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    Nova goldye2012 Nova goldye2012 Presentation Transcript

    • 2012 YEAR-END FINANCIALS& PROJECT UPDATE FEBRUARY 12, 2013 1 NYSE-MKT, TSX: NG www.novagold.com
    • CONFERENCE CALL ATTENDEES ▸ Introduction Mélanie Hennessy (Vice President Corporate Communications) ▸ Corporate Update Greg Lang (President & Chief Executive Officer) ▸ Fourth Quarter Financials & 2013 Budget David Ottewell (Vice President & Chief Financial Officer) ▸ Closing Remarks Greg Lang (President & Chief Executive Officer) ▸ Question & Answer Session Greg Lang & David Ottewell 2 NYSE-MKT, TSX: NG www.novagold.com
    • CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS This presentation includes certain “forward-looking statements” within the meaning of applicable securities laws, including the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included herein including, without limitation, statements relating to Donlin Gold and Galore Creek’s future operating or financial performance, are forward-looking statements. Forward-looking statements are frequently, but not always, identified by words such as “plans”, “expects”, “anticipates”, “believes”, “intends”, “estimates”, “potential”, “possible” and similar expressions, or statements that events, conditions or results “will”, “may”, “could”, or “should” occur or be achieved. These forward-looking statements are set forth in the slides pertaining to the implementation of the Donlin Gold second updated Feasibility Study and may include statements regarding perceived merit of properties; exploration results and budgets; mineral reserves and resource estimates; work programs; capital expenditures; timelines; strategic plans; completion of transactions; market price of precious base metals; or other statements that are not statements of fact. Forward-looking statements involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from our expectations include the uncertainties involving the need for additional financing to explore and develop properties and availability of financing in the debt and capital markets; uncertainties involved in the interpretation of drilling results and geological tests and the estimation of reserves and resources; the need for continued cooperation between NOVAGOLD and Barrick Gold in the exploration and development of the Donlin Gold property; the need for cooperation of government agencies and native groups in the development and operation of properties; the need to obtain permits and governmental approvals; risks of construction and mining projects such as accidents, equipment breakdowns, bad weather, non-compliance with environmental and permit requirements, unanticipated variation in geological structures, ore grades or recovery rates; unexpected cost increases; fluctuations in metal prices and currency exchange rates; and other risk and uncertainties disclosed in reports and documents filed by NOVAGOLD with applicable securities regulatory authorities from time to time. The forward-looking statements made herein reflect our beliefs, opinions and projections on the date the statements are made. Except as required by law, we assume no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change. REGARDING SCIENTIFIC AND TECHNICAL INFORMATION Unless otherwise indicated, all reserve and resource estimates included in this presentation have been prepared in accordance with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral Reserves (“CIM Definition Standards”). Canadian standards, including NI 43-101, differ significantly from the requirements of the United States Securities and Exchange Commission (“SEC”), and reserve and resource information in this presentation may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, the term “resource” does not equate to the term “‘reserves”. Under U.S. standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. The SEC’s disclosure standards normally do not permit the inclusion of information concerning “measured mineral resources”, “indicated mineral resources” or “inferred mineral resources” or other descriptions of the amount of mineralization in mineral deposits that do not constitute “reserves” by U.S. standards in documents filed with the SEC. U.S. investors should also understand that “inferred mineral resources” have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an “inferred mineral resource” will ever be upgraded to a higher category. Under Canadian rules, estimated “inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies except in rare cases. Investors are cautioned not to assume that all or any part of an “inferred mineral resource” exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in-place tonnage and grade without reference to unit measures. The requirements of NI 43-101 for identification of “reserves” are also not the same as those of the SEC, and reserves reported in compliance with NI 43-101 may not qualify as “reserves” under SEC standards. Accordingly, information concerning mineral deposits set forth herein may not be comparable to information made public by companies that report in accordance with United States standards. 3 NYSE-MKT, TSX: NG www.novagold.com
    • NOVAGOLD: MEETING THE MILESTONES FOR 2012 A Year Of Accomplishments Advancing NOVAGOLD Up the Value Chain 2013 NOVAGOLD Pure Gold Play Q4 - 12 Q4 - 12 Q4 - 12 Strengthened management Notice of team with Q3 - 12 permitting, Intent to prepare an development Q2 - 12 Rock Creek and CSR divestiture EIS for Donlin Gold experience completed Q1 - 12 Donlin Gold published in updated Federal NovaCopper Feasibility Register spinoff Study accepted &Bought-deal permittingfinancing initiatedUS$318M(net) 4 NYSE-MKT, TSX: NG www.novagold.com
    • THE RIGHT PROJECT – DONLIN GOLDArguably the World’s Most Significant Gold Project Largest gold project in development Among the highest grade large-scale open-pit deposits Excellent expansion potential along strike & at depth Poised to be world’s largest gold producer, one of only six >1Moz/year Safe: In Alaska, 2nd largest gold producing state in U.S. 5 NYSE-MKT, TSX: NG www.novagold.com
    • www.novagold.com 2012 FOURTH-QUARTER & YEAR-END FINANCIALS DAVID OTTEWELL, VICE PRESIDENT & CFO
    • 2012 FOURTH QUARTER – PROJECT ACTIVITY▸ Donlin Gold > Permit applications submitted > Project funding (NG 50% share) > FY2012: $18.5 million > FY2013: $15.0 million to continue permitting▸ Galore Creek > Exploration and geotechnical drilling in 2012 > Project funding (NG 50% share) > FY2012: $16.3 million > FY2013: $8.0 million for follow-up drilling and new targets▸ Rock Creek > Completed Phase 1 reclamation activities > Sold to BSNC in November 7 NYSE-MKT, TSX: NG www.novagold.com
    • Q4 2012 HIGHLIGHTS – INCOME (LOSS) in millions of Canadian dollarsYear ended November 30, 2012 2011 Donlin Gold and Galore Creek $ 40.0 $ 59.8 Expenses(1) 24.1 21.1 Share based payment 19.0 8.9 Project care and maintenance 5.5 12.4 Mineral properties 1.8 12.2 Decommisioning expense 1.5 20.4 Other (gains) losses (1.5) 6.2 Foreign exchange (gain) loss (11.4) (9.3)Operating loss 79.0 131.7Finance costs - net 14.1 13.5Other income 153.8 78.0Income (loss) $ 67.6 $(57.5)(1) General and administrative, salaries and severance, professional fees, corporate and development expenses 8 NYSE-MKT, TSX: NG www.novagold.com
    • Q4 2012 HIGHLIGHTS – CASH FLOW in millions of Canadian dollarsYear ended November 30, 2012 2013ECommon shares and warrants $322.2 $ 54.0Asset sales and interest 3.3 0.6Cash inflow 325.5 54.6Donlin Gold (18.5) (15.0)Galore Creek (16.3) (8.0)Administrative expenses(1) (24.1) (15.0)NovaCopper spin-out (40.4) –Rock Creek (21.3) –Ambler (4.0) –Convertible notes – principal and interest (5.2) (97.6)Other working capital (3.2) –Cash outflow (133.0) (135.6)Increase (decrease) in cash $ 192.5 $ (81.0)Cash and cash equivalents $ 253.0 $ 172.0(1) General and administrative, salaries and severance, professional fees, corporate and development expenses 9 NYSE-MKT, TSX: NG www.novagold.com
    • NOVAGOLD’S FUTURE FINANCIAL OBLIGATIONS HAVE DECREASEDSUBSTANTIALLYClear Focus Begins with Strong Funding to Execute on All Fronts 140.0Highlights: $5 Lower Spending▸ $253M in cash and cash equivalents1 120.0 $21▸ $54M additional proceeds received from warrant exercise Q1-2013 100.0 68 % US$ (Millions) Reduction2013: 80.0 $44▸ Lower Donlin Gold costs with commencement of permitting 60.0 $16▸ Galore Creek expenditures significantly $3 40.0 lower $18 $8▸ Reduced G&A due to reorganization 20.0 $15 $24 $15 - 1 2012 Spending 2 2013 Budget2 3 Donlin Gold G&A and Miscellaneous Interest1) Cash and cash equivalents as of November 30, 2012. NovaCopper Galore Creek Rock Creek2) 2013 anticipated budget expenditure disclosed on February 12, 2013.3) Assuming full repayment of US$95M in convertible notes 10 NYSE-MKT, TSX: NG www.novagold.com
    • 2013 GOALS AND MILESTONESFocused on Advancing Our Projects On Time and On Budget Q4 - 13 Q4 - 13 Update on Q3 - 13 Donlin Gold Preliminary Q2 - 13 Donlin Gold Draft EIS cost Progress Galore reduction Q1 - 13 Creek opportunities updated Q1 - 13 Complete R&R public Galore scoping for Creek Donlin Gold exploration EIS Received $54.0 M drill results proceeds from in the money warrants 11 NYSE-MKT, TSX: NG www.novagold.com
    • DONLIN GOLD PERMITTING PROCESSRegulatory Process Currently Focused on Environmental Impact Statement (“EIS”) What is an EIS? A disclosure document that is part of the regulatory process and led by the U.S. Army Corps of Engineers that provides the What is the Permitting Process? agencies and the public with Concurrent with and supported by the EIS process, the Federal and State regulatory information needed to make agencies will consider all of the required permits and authorizations for the project. permitting decisions on the project Record of Preliminary Decision Notice of Public Public Final Draft EIS Draft EIS subject to Intent Scoping Comment EIS/Permit 30-Day Period Issuance Appeal Period 2012 2016 Permitting Process ~3-4 Impacts Discussed in the EIS years • Hydrology • Fish & Aquatic Habitat • Air & Water Quality • Wildlife • Cultural Resources • Noise • Socioeconomics • Visual Resources • Wetlands • Threatened & Endangered Species • Recreation, Safety & Feasibility • Cumulative Impacts • Land Use and Subsistence 12 NYSE-MKT, TSX: NG www.novagold.com
    • DONLIN GOLDWell Positioned to Reduce Capex by Sharing Upfront Costs with Third PartiesAreas US$M Capital Reduction OpportunitiesMining 345 Leasing equipment ~$170MSite preparation/roads 236Process facilities 1,326 Oxygen plant could be built by third party ~$130MTailings 120Utilities 1,302 Gas pipeline could be built by third party ~$700MAncillary buildings 304Off-site facilities 243Total Direct Costs 3,876Owners’ cost 414Indirects 1,405 Contingency increases confidence to 85% and is aContingency 984 reflection of the conservative nature of the feasibility studyTotal Indirect & 2,803ContingencyTotal Project Cost 6,679 >$1B potential capital reductions 13 NYSE-MKT, TSX: NG www.novagold.com
    • GALORE CREEKProjected to be Largest Copper Mine in a Mining-Friendly Jurisdiction, Canada▸ NOVAGOLD continues to evaluate the potential sale of its share of Galore Creek▸ Once in production, as envisioned by the Pre-Feasibility Study, Galore Creek is expected to be the largest and lowest cash cost copper mine in Canada▸ 2013 work and exploration program > Update the resource model with 2012 drill results > follow-up on positive drill results and test additional targets with approximately 10,000 meters of planned drilling. 14 NYSE-MKT, TSX: NG www.novagold.com
    • THE NOVAGOLD TEAMSenior Industry Leaders to Bring Donlin Gold through Permitting and Beyond MANAGEMENT ▸ Former President of Barrick Gold North America Gregory A. Lang ▸ 35 years experience building & operating major mines President & CEO ▸ Intimate knowledge of Donlin Gold ▸ Former EVP and General Counsel of Goldcorp David Deisley ▸ Regional General Counsel for Barrick Gold North America Executive Vice President and ▸ Extensive track record in project permitting, corporate social responsibility, General Counsel mergers and acquisitions and corporate development ▸ 25 years of mining industry experience David Ottewell ▸ Former VP and Corporate Controller of Newmont Mining Corporation ▸ 25 years of mining industry experience Vice President and Chief ▸ Diverse experience in all facets of financial management, from mine operations Financial Officer to executive corporate financial management of premier gold producers Mélanie Hennessey ▸ Held variety of senior IR & corporate communication positions with Goldcorp Vice President, Corporate Inc., New Gold Inc., and Hecla Mining Company Communications ▸ Leading NOVAGOLD’s internal and external communications functions Ron Rimelman ▸ 25 years of environmental experience , managing environmental impact assessments and permitting activities world-wide Vice President, Environment, ▸ Leadership role on mine permitting and NEPA evaluations for mine projects in Health, Safety & Sustainability Alaska since 1993 15 NYSE-MKT, TSX: NG www.novagold.com
    • 2013 - AN EXCITING YEAR AHEADNOVAGOLD Well Positioned to Deliver on All Corporate Objectives A simplified corporate structure resulting in reduced expenditures going forward The right people and experience to execute on all fronts Strong cash balance for the next 4+ years Focused on advancing Donlin Gold up the value chain 16 NYSE-MKT, TSX: NG www.novagold.com
    • APPENDIX 17 NYSE-MKT, TSX: NG www.novagold.com
    • MAJOR DISCOVERIES ARE INCREASINGLY RAREVery Few and No Easy Quality Development Assets LeftSignificantdecline in golddiscoveriessince 2006Gold reservesare being minedout at a high rate Source: Metals Economics Group – Strategies for Gold Reserves Replacement 2012 Note: Major gold discoveries based on a cut off of 2 M/oz of gold in total reserves, resources and past production (or at least 1 M/oz in defined reserves) 18 NYSE-MKT, TSX: NG www.novagold.com
    • THE CLIMATE OF DECLINING GRADE AND ESCALATING COSTSDonlin Gold Has Among the Highest Grade for an Open-Pit Deposit Grade, g/t Cost US$/oz 2.5 1,200Donlin Gold Mining 12.24 g/t average Mined gradeM&I grade 2.0 36% 1,000 above reserve grade“Reserve grade are 800down 50% over 10 Reserve grade 1.5yrs negativelyimpacting 600production costand capex which 1.0have tripled in the 400same time period” 0.5Pierre Lassonde, 200DGF 2012 0.0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total cash cost Depreciation Exploration & sustaining capex Other and administrative 2 Source: GFMS Mine Economics, LBMA, World Gold Council 1) 2002-2004 data set includes primary Gold mines only, 2005 onwards, includes porphyry copper gold mines 2) Includes exceptional items 19 NYSE-MKT, TSX: NG www.novagold.com
    • DONLIN GOLD: THE LARGEST DEVELOPMENT-STAGE GOLD DEPOSITFeasibility Study in Place and Permitting Underway 45 40 39.0 35 30 M&I Au Resources (Moz) 25.8 25 20 19.0 16.5 14.6 14.0 15 10 5 -- Donlin Gold Detour Lake Metates Livengood Rosia Montana Kibali LOCATION: USA CANADA MEXICO USA ROMANIA D.R. CONGO Source: Donlin Gold data as per Donlin Creek Gold Project Alaska, USA, NI 43-101 Technical Report on Second “Updated Feasibility Study”, effective November 18, 2011, as amended January 20, 2012 (the “Updated Feasibility Study”). Measured and indicated resources are inclusive of proven and probable reserves. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. RBC peer group data based on large, open pit, gold focused development projects. 20 NYSE-MKT, TSX: NG www.novagold.com
    • DONLIN GOLD: AMONG HIGHEST-GRADE DEPOSITS IN THE WORLD Large-Scale Open-Pit Gold Development 4.00 3.50 3.38 3.00 2.50 M&I Au Grade (g/t) 2.24 2.00 1.50 1.30 1.04 1.00 0.55 0.50 0.50 -- Kibali Donlin Gold Rosia Montana Detour Lake Livengood MetatesLOCATION: D.R. CONGO USA ROMANIA CANADA USA MEXICO Source: Donlin Gold data as per the Updated Feasibility Study. Measured and indicated resources are inclusive of proven and probable reserves. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. RBC peer group data based on large, open pit, gold focused development projects. 21 NYSE-MKT, TSX: NG www.novagold.com
    • DONLIN GOLD: SUBSTANTIAL EXPLORATION POTENTIALMultiple Drill Prospects and Targets Exist Along 8km Trend ▸ Future mine will only be part of 3km portion of 8km identified trend ▸ Over the last six years, the mineral endowment has more than doubled ▸ Exploration upside: > In-pit resource conversion > In-pit/deep-pit exploration > Near-pit targets (East ACMA, Akivik Zone and Snow) > Area resource potential ▸ Located largely on private land, designated for mining ▸ Gold-bearing drill holes along the 8km trend 3km = 39 Moz M&I (including 34 Moz P&P), 6 Moz Inferred11) See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. 22 NYSE-MKT, TSX: NG www.novagold.com
    • DONLIN GOLD: ANTICIPATED TO BE TOP-TIER PRODUCER By Far the Largest Evolving Gold Producer from Existing Projects 1.60 1 1.50 1.40 1.20LOM Average Annual Au Production (Moz) 2 1.10 1.00 0.80 0.76 0.66 0.60 0.60 0.56 0.51 0.40 0.20 0.00 Donlin Gold Metates Detour Lake Kibali Livengood Rosia Montana LOCATION: USA MEXICO CANADA D.R. CONGO USA ROMANIA Source: Donlin Gold data: Updated Feasibility Study. Measured and indicated resources are inclusive of proven and probable reserves. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. RBC peer group data based on large, open pit, gold focused development projects. 1) Projected annual gold production during first five full years of mine life. 2) Projected annual gold production during full life of mine. 23 NYSE-MKT, TSX: NG www.novagold.com
    • JURISDICTIONAL SAFETY BECOMING THE “EXISTENTIAL” INVESTMENTCRITERION“Large-Scale Quality Assets” Raising the Question “Where in the World Are You?” ▸ Accelerated industry focus on jurisdictional safety and resource nationalism in many of the largest gold and copper-producing countries ▸ Heightened investor focus on “Safety Premium” ▸ Very limited number of quality assets in low geo-political risk jurisdictions ▸ NOVAGOLD holds assets that are well positioned to achieve the premium valuation they deserve Recently highlighted regions/countries with heightened geopolitical risk and uncertainty of ownership affecting explorers, developers, and miners alike 24 NYSE-MKT, TSX: NG www.novagold.com
    • NOVAGOLD RESERVE/RESOURCE TABLEAt April 30, 2012Donlin Gold (NOVAGOLD 50%)GOLD Tonnage Grade* Metal content NOVAGOLD share** Mt g/t Moz MozReserves (100%)1Proven 7.7 2.32 0.57 0.29Probable 497.1 2.08 33.28 16.64P&P 504.8 2.09 33.85 16.93Resources (100%)3 inclusive of reservesMeasured 7.7 2.52 0.63 0.31Indicated 533.6 2.24 38.38 19.19M&I 541.3 2.24 39.01 19.50Inferred 92.2 2.02 5.99 3.00Galore Creek (NOVAGOLD 50%)COPPER Tonnage Grade* Metal content NOVAGOLD share** Mt %Cu Mlbs MlbsReserves (100%)2Proven 69.0 0.61 900.0 450.0Probable 459.1 0.58 5,900.0 2,950.0P&P 528.0 0.59 6,800.0 3,400.0Resources (100%)4 inclusive of reservesMeasured 108.4 0.48 1,147.0 573.5Indicated 706.3 0.50 7,786.0 3,893.0M&I 814.7 0.50 8,933.0 4,466.5Inferred 346.6 0.42 3,230.0 1,615.0 25 NYSE-MKT, TSX: NG www.novagold.com
    • -1-NOVAGOLD RESERVE/RESOURCE TABLEGalore Creek (NOVAGOLD 50%)GOLD Mt g/t Moz Moz 2Reserves (100%)Proven 69.0 0.52 1.15 0.58Probable 459.1 0.29 4.30 2.15P&P 528.0 0.32 5.45 2.73Resources (100%)4 inclusive of reservesMeasured 108.4 0.48 1.70 0.85Indicated 706.3 0.28 6.40 3.20M&I 814.7 0.31 8.00 4.00Inferred 346.6 0.24 2.70 1.35SILVER Mt g/t Moz MozReserves (100%)2Proven 69.0 4.94 11.0 5.5Probable 459.1 6.18 91.2 45.6P&P 528.0 6.02 102.2 51.1Resources (100%)4 inclusive of reservesMeasured 108.4 4.10 14.30 7.15Indicated 706.3 5.38 122.10 61.05M&I 814.7 5.21 136.40 68.20Inferred 346.6 4.28 47.73 23.87Copper Canyon (NOVAGOLD 70%)Resources (100%)5,6 Tonnage Grade* Metal content NOVAGOLD share**COPPER Mt %Cu Mlbs MlbsInferred 53.7 0.50 592.0 414.4GOLD Mt g/t Moz MozInferred 53.7 0.73 1.26 0.88SILVER Mt g/t Moz MozInferred 53.7 10.60 18.36 12.85 t = metric tonne Approximate cutoff grades (see Resource Footnotes below): M = million Donlin Gold Reserves1: 0.57 g/t gold Resources3: 0.46 g/t gold g/t = grams/tonne Galore Creek Reserves2: C$10.08 NSR * Reserve grade is diluted; resource grade is in situ. Resources4: C$10.08 NSR ** NOVAGOLD share net after earn-ins Copper Canyon Resources5,6: 0.6% copper equivalent 26 NYSE-MKT, TSX: NG www.novagold.com
    • RESERVE/RESOURCE TABLE (CONTINUED)Notes:a. These resource estimates have been prepared in accordance with NI43-101 and the CIM Definition Standard, unless otherwise noted.b. See numbered footnotes below on resource information.c. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal contentd. Tonnage and grade measurements are in metric units. Contained gold and silver ounces are reported as troy ounces, contained copper pounds as imperial poundsResource Footnotes:Mineral Reserves are contained within Measured and Indicated pit designs, and supported by a mine plan, featuring variable throughput rates, stockpiling and cut-off optimization. The pit designs and mine plan were optimized on diluted grades using the following economic and technical parameters: Metal price forgold of US$975/oz; reference mining cost of US$1.67/t incremented US$0.0031/t/m with depth from the 220 m elevation (equates to an average mining cost of US$2.14/t), variable processing cost based on the formula 2.1874 x (S%) + 10.65 for each US$/t processed; general and administrative cost of US$2.27/tprocessed; stockpile rehandle costs of US$0.19/t processed assuming that 45% of mill feed is rehandled; variable recoveries by rock type, ranging from 86.66% in shale to 94.17% in intrusive rocks in the Akivik domain; refining and freight charges of US$1.78/oz gold; royalty considerations of 4.5%; and variable pitslope angles, ranging from 23º to 43º. Mineral Reserves are reported using an optimized net sales return value based on the following equation: Net Sales Return = Au grade * Recovery * (US$975/oz – (1.78 + (US$975/oz – 1.78) * 0.045)) - (10.65 + 2.1874 * (S%) + 2.27 + 0.19) and reported in US$/tonne. Assumingan average recovery of 89.54% and an average S% grade of 1.07%, the marginal gold cutoff grade would be approximately 0.57 g/t, or the gold grade that would equate to a 0.001 NSR cutoff at these same values. The life of mine strip ratio is 5.48. The assumed life-of-mine throughput rate is 53.5 kt/d.Mineral Reserves are contained within Measured and Indicated pit designs using metal prices for copper, gold and silver of US$2.50/lb, US$1,050/oz, and US$16.85/oz, respectively. Appropriate mining costs, processing costs, metal recoveries and inter ramp pit slope angles varing from 42º to 55º were used togenerate the pit phase designs. Mineral Reserves have been calculated using a cashflow grade ($NSR/SAG mill hr) cut-off which was varied from year to year to optimize NPV. The net smelter return (NSR) was calculated as follows: NSR = Recoverable Revenue – TCRC (on a per tonne basis), where: NSR = NetSmelter Return; TCRC = Transportation and Refining Costs; Recoverable Revenue = Revenue in Canadian dollars for recoverable copper, recoverable gold, and recoverable silver using metal prices of US$2.50/lb, US$1,050/oz, and US$16.85/oz for copper, gold, and silver, respectively, at an exchange rate ofCDN$1.1 to US$1.0; Cu Recovery = Recovery for copper based on mineral zone and total copper grade; for Mineral Reserves this NSR calculation includes mining dilution. SAG throughputs were modeled by correlation with alteration types. Cash flow grades were calculated as the product of NSR value in $/t andthroughput in t/hr. The life of mine strip ratio is 2.16.Mineral Resources are contained within a conceptual Measured, Indicated and Inferred optimized pit shell using the following assumptions: gold price of US$1,200/oz; variable process cost based on 2.1874 * (sulphur grade) + 10.6485; administration cost of US$2.29/t; refining, freight & marketing (selling costs) ofUS$1.85/oz recovered; stockpile rehandle costs of US$0.20/t processed assuming that 45% of mill feed is rehandled; variable royalty rate, based on royalty of 4.5% * (Au price – selling cost). Mineral Resources have been estimated using a constant Net Sales Return cut-off of US$0.001/t milled. The Net Sales Returnwas calculated using the formula: Net Sales Return = Au grade * Recovery * (US$1200/oz – (1.85 + ((US$1200/oz – 1.85) * 0.045)) - (10.65 + 2.1874 * (S%) + 2.29 + 0.20)) and reported in US$/tonne. Mineral Resources are inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not havedemonstrated economic viability. Inferred Resources are in addition to Measured and Indicated Resources. Inferred Resources have a great amount of uncertainty as to their existence and whether they can be mined legally or economically. It cannot be assumed that all or any part of the Inferred Resources will everbe upgraded to a higher category. See "Cautionary Note Concerning Reserve & Resource Estimates".Mineral resources are contained within a conceptual Measured, Indicated and Inferred optimized pit shell using the same economic and technical parameters as used for Mineral Reserves. Tonnages are assigned based on proportion of the block below topography. The overburden/bedrock boundary has beenassigned on a whole block basis. Mineral resources have been estimated using a constant NSR cut-off of C$10.08/t milled. The Net Smelter Return (NSR) was calculated as follows: NSR = Recoverable Revenue – TCRC (on a per tonne basis), where: NSR = Diluted Net Smelter Return; TCRC = Transportation andRefining Costs; Recoverable Revenue = Revenue in Canadian dollars for recoverable copper, recoverable gold, and recoverable silver using silver using the economic and technical parameters mentioned above. The mineral resource includes material within the conceptual M,I&I pit that is not scheduled for processingin the mine plan but is above cutoff. Mineral Resources are inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Inferred Resources are in addition to Measured and Indicated Resources. Inferred Resources have a great amount of uncertaintyas to their existence and whether they can be mined legally or economically. It cannot be assumed that all or any part of the Inferred Resources will ever be upgraded to a higher category. See "Cautionary Note Concerning Reserve & Resource Estimates".The copper-equivalent grade was calculated as follows: CuEq = Recoverable Revenue ÷ 2204.62 * 100 ÷ 1.55. Where: CuEq = Copper equivalent grade; Recoverable Revenue = Revenue in US dollars for recoverable copper, recoverable gold and recoverable silver using metal prices of US$1.55/lb, US$650/oz, andUS$11/oz for copper, gold, and silver, respectively; for the purposes of the equivalency formula, Cu Recovery is assumed to be 100%. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Inferred Resources are in addition to Measured and Indicated Resources. InferredResources have a great amount of uncertainty as to their existence and whether they can be mined legally or economically. It cannot be assumed that all or any part of the Inferred Resources will ever be upgraded to a higher category. See "Cautionary Note Concerning Reserve & Resource Estimates".NOVAGOLD Canada Inc. has agreed to transfer its 60% joint venture interest in the Copper Canyon property to the Galore Creek Partnership, which is equally owned by NOVAGOLD Canada Inc. and a subsidiary of Teck Resources Limited. The remaining 40% joint venture interest in the Copper Canyon property isowned by another wholly owned subsidiary of NOVAGOLD.Cautionary Note Concerning Reserve & Resource EstimatesThis summary table uses the term “resources”, “measured resources”, “indicated resources” and “inferred resources”. United States investors are advised that, while such terms are recognized and required by Canadian securities laws, the United States Securities and Exchange Commission (the “SEC”) does notrecognize them. Under United States standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Mineral resources that are not mineral reservesdo not have demonstrated economic viability. United States investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves. Further, inferred resources have a great amount of uncertainty as to their existence and as to whether they can be minedlegally or economically. It cannot be assumed that all or any part of the inferred resources will ever be upgraded to a higher category. Therefore, United States investors are also cautioned not to assume that all or any part of the inferred resources exist, or that they can be mined legally or economically. Disclosure of“contained ounces” is permitted disclosure under Canadian regulations, however, the SEC normally only permits issuers to report “resources” as in place tonnage and grade without reference to unit measures. Accordingly, information concerning descriptions of mineralization and resources contained in this releasemay not be comparable to information made public by United States companies subject to the reporting and disclosure requirements of the SEC.NI 43-101 is a rule developed by the Canadian Securities Administrators, which established standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, all resource estimates contained in this circular have been prepared inaccordance with NI 43-101 and the CIM Definition Standards.Technical Reports and Qualified PersonsThe documents referenced below provide supporting technical information for each of NOVAGOLDs projects.Project Qualified Person(s) Most Recent Disclosure & Filing DateDonlin Gold Tony Lipiec, P. Eng., AMEC Donlin Creek Gold Project Gordon Seibel R.M. SME, AMEC Alaska, USA Kirk Hanson P.E., AMEC NI 43-101 Technical Report on Second Updated Feasibility Study amended filing on January 23, 2012Galore Creek Robert Gill, P.Eng., AMEC Galore Creek Copper–Gold Project, Jay Melnyk, P.Eng., AMEC British Columbia, NI 43-101 Technical Report on Pre-Feasibility Study, Greg Kulla, P.Geo., AMEC filed on September 12, 2011 Greg Wortman, P.Eng., AMEC Dana Rogers, P.Eng., Lemley InternationalHeather White, B.Sc., P.Eng., who is a consultant to NOVAGOLD and a “qualified person” under NI 43-101, has approved the scientific and technical information included in this section related to: (i) Donlin Gold since the issuance of the technical report filed on January 23, 2012, and (ii) Galore Creek since theissuance of the technical report filed on September 12, 2011. 27 NYSE-MKT, TSX: NG www.novagold.com
    • CONTACT USNOVAGOLD RESOURCES INC.200 Granville St., Suite 2300Vancouver, BCCanada V6C 1S4T 604 669 6227 TF 1 866 669 6227 F 604 669 6272www.novagold.cominfo@novagold.comMélanie Hennessey Erin O’TooleVP, Corporate Communications Analyst, Investor Relationsmelanie.hennessey@novagold.com erin.otoole@novagold.com 28 NYSE-MKT, TSX: NG www.novagold.com