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novagold.com
NYSE-MKT, TSX: NG | May 2014
15th Annual B. Riley & Co. Investor Conference
THOMAS S. KAPLAN, CHAIRMAN
cautionary statements
REGARDING FORWARD-LOOKING STATEMENTS
This presentation includes certain “forward-looking statements”...
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1/30/1970 1/30/1975 1/30/1980 1/30/1985 1/30/1990 1/30/1995 1/30/200...
why gold? despite recent price turbulence, fundamental
demand drivers remain unchanged
4
Current Correction Is In Line Wit...
why gold? the revaluation
5
Gold has served mankind for five millennia, protecting wealth from high inflation, negative re...
why gold? a valuable portfolio diversifier
6
COMPARATIVE RETURNS
Notes:
Indexes are for illustrative purposes only. Past p...
why gold? flourishes in inflation and deflation
7
Gold has historically retained value on a relative and absolute basis. W...
EXCEPTIONAL IN SCALE, QUALITY AND JURISDICTIONAL SAFETY
why NOVAGOLD? two significant assets
8
39Moz
gold resource1
̴ 9Blb...
why NOVAGOLD? the largest development-stage gold
project in the world
M&I Gold Resource2
>30 million oz.
>10 million oz.
>...
why NOVAGOLD? among the highest-grade open pit
deposits in the world
M&I Gold Resource
>2.0 g/T Au
>1.0 g/T Au
>0.5 g/T Au...
why NOVAGOLD? emerging top-tier producer in safe
jurisdiction
1.102
0.76
0.60 0.58
0.34 0.33
0.19
0.13
1.501
0.00
0.20
0.4...
why NOVAGOLD? significant exploration upside
3km = 39 Moz M&I (including 34 Moz P&P), 6 Moz Inferred1
1) Includes only Mea...
Donlin Gold located in Alaska, one of
the safest jurisdictions in the world with
history of successful mining
development
...
INDUSTRY LEADERS TO BRING DONLIN GOLD THROUGH PERMITTING & BEYOND
why NOVAGOLD? experienced team with an excellent
record ...
why NOVAGOLD? Donlin Gold project permitting is on track
15
1.5Moz/year
first five full years1
1.1Moz/year
life of mine1
1...
$6.2B
$9.2B
$11.6B
$14.6B
$19.2B
$27.0B
0
5,000
10,000
15,000
20,000
25,000
30,000
$1,200 $1,350 $1,500 $1,700 $2,000 $2,5...
THE KIND OF ASSET YOU CAN BUILD A COMPANY AROUND
why NOVAGOLD? Galore Creek a significant copper-gold-
silver asset in Can...
CLEAR FOCUS BEGINS WITH FUNDING TO EXECUTE ON ALL FRONTS
why NOVAGOLD? solid foundation with a strong balance
sheet
18
Not...
26.7%
11.3%
6.9%
2.2%1.7%
51%
BLUE CHIP INSTITUTIONAL QUALITY INVESTMENT
why NOVAGOLD? excellent and committed shareholder...
why NOVAGOLD? why NOW?
NOVAGOLD offers:
▶ TOP TIER, high-grade assets with excellent exploration upside
▶ SAFEST leverage ...
novagold.com
appendix
PROJECTS CONTINUE TO ADVANCE ON TIME AND ON BUDGET
recent achievements
22
maintaining a healthy balance sheet
continued to...
CLEAR FOCUS BEGINS WITH STRONG FUNDING TO EXECUTE ON ALL FRONTS
financial obligations have decreased substantially
23
$0
$...
1.60
1.101 1.01
0.95 0.94
0.89 0.87
0.75 0.73 0.70
0.68
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
Grasberg Donlin ...
▶ Donlin Gold LLC is the operating company
▶ 50/50 ownership by NOVAGOLD and Barrick Gold
▶ Board of Directors has two rep...
SLATED TO BE A STATE-OF-THE-ART SIGNIFICANT MINE
Donlin Gold project highlights
26
Reserves: 33.9 Moz Au (505M tonnes ore)...
Donlin Gold
LOW OPERATING CASH COSTS AND ALL-IN SUSTAINING COSTS
27
Open-pit mining2 270
Processing 257
G&A, royalties, la...
28
($10,000)
($5,000)
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
...
Donlin Gold
WELL POSITIONED TO SHARE UPFRONT COSTS WITH THIRD PARTIES
Areas US$M1 Opportunities1
Mining 345 Leasing equipm...
ROBUST ECONOMICS HIGHLY LEVERAGED TO GOLD PRICES
Donlin Gold key performance indicators
30
Gold Price
Unit $1,000/oz $1,20...
Donlin Gold - standard technology
Donlin Gold Pueblo Viejo Detour Lake
Capital Expenditures US$6.7B1 ~US$4.0B2 C$1.5B4
Loc...
WEST COAST RIVER BARGE UP KUSKOKWIM RIVER WITH TWO PORT FACILITIES
Donlin Gold logistics & supply chain
32
PROPOSED PIPELINE TIES INTO EXISTING INFRASTRUCTURE AT COOK INLET
powering Donlin Gold
33
▸ Project would require 153MW of...
JURISDICTIONAL SAFETY IS MORE THAN GEOGRAPHIC LOCATION
the right stakeholders
Committed Stakeholders
▶ Calista Corporation...
COMPANIES HAVE AND CONTINUE TO BUILD MUTUALLY-BENEFICIAL
PARTNERSHIPS IN ALASKA
state supporting development of resource i...
LARGE PROJECTS HAVE BEEN SUCCESSFULLY PERMITTED
permitting in the U.S.
36
Project Name Location Metal Time Description
Red...
RESOURCES MORE THAN DOUBLED FROM 2006 TO 2008
Donlin Gold reserve & resource growth
37
16.6
29.4
35.3
37.9
39.0
0.0
5.0
10...
MULTIPLE DRILL PROSPECTS AND TARGETS EXIST ALONG 8KM TREND
Donlin Gold’s substantial exploration potential
Notes:
See “Cau...
AN EXCEPTIONAL ASSET
Galore Creek project overview
39
▶ Galore Creek Mining Corporation (GCMC) is the operating company
▸ ...
ANTICIPATED TO BE ONE OF CANADA’S LARGEST COPPER MINES
Galore Creek project highlights
40
Reserves: 6.8 Blb Cu; 5.5 Moz Au...
ROBUST ECONOMICS HIGHLY LEVERAGED TO METAL PRICES
Galore Creek key performance indicators
41
Unit Metal Prices
Copper
Gold...
AMONG HIGHEST COPPER GRADE COMPARED TO NORTH AMERICAN ASSETS
Galore Creek grade peer comparisons
42
P&P + M&I grade (Cu%)
...
NOVAGOLD board of directors
43
Dr. Thomas Kaplan
Chairman
Chairman and CIO of The Electrum Group LLC, a privately held nat...
COPPER
Tonnage
Mt
Grade*
%Cu
Metal content
Mlbs
NOVAGOLD share**
Mlbs
Reserves (100%)2
Proven 69.0 0.61 900.0 450.0
Probab...
reserve/resource table (con’t)
Resources (100%)5,6 Tonnage Grade* Metal content NOVAGOLD share**
COPPER Mt %Cu Mlbs Mlbs
I...
Notes:
a. These resource estimates have been prepared in accordance with NI43-101 and the CIM Definition Standard, unless ...
47
NOVAGOLD RESOURCES INC.
Suite 720 – 789 West Pender Street
Vancouver, BC
Canada V6C 1H2
T 604 669 6227 TF 1 866 669 622...
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Transcript of "Riley investorconference novagold"

  1. 1. novagold.com NYSE-MKT, TSX: NG | May 2014 15th Annual B. Riley & Co. Investor Conference THOMAS S. KAPLAN, CHAIRMAN
  2. 2. 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’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 pertaining to the implementation of the Galore Creek Pre-Feasibility Study, the factors that may influence future gold price performance, and the potential future value of gold, 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 continued cooperation between NOVAGOLD and Teck Resources Ltd. in the exploration and development of the Galore Creek 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. At this time, both of Donlin Gold and Galore Creek projects are without known reserves, as defined under SEC Industry Guide 7. 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. 2 All dollar amounts quoted in this report are in U.S. currency unless otherwise noted.
  3. 3. 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 1/30/1970 1/30/1975 1/30/1980 1/30/1985 1/30/1990 1/30/1995 1/30/2000 1/30/2005 1/30/2010 Gold Price ($USD) 856 2010 201420052000199519901985198019751970 3 why gold? gold has been in a secular bull market since 2000 496 34 409 700 1207 1882 1370
  4. 4. why gold? despite recent price turbulence, fundamental demand drivers remain unchanged 4 Current Correction Is In Line With Historical Precedent; 1980-Style Parabolic Rise Has Yet to Occur Gold Prices During Historical and Current Price Corrections Current Data through December 2013 Indexed(a) Source: Bloomberg. Trading Days Since Beginning of Correction Period Gold Prices During Historical and Current Bull Markets Current Data through December 2013 Months Since Beginning of Bull Market Indexed(a) (a) Start date is 12/30/1974 for previous correction and 10/5/2012 for current correction. (b) Start date is 1/1/1968 for 70s Bull Market and 1/1/2001 for Current Bull Market. Indexes are for illustrative purposes only. Past performance is not indicative of future results. 50 60 70 80 90 100 110 120 1 51 101151201251301351401451501551601651701751801851901 Previous Correction (December 1974 to July 1978) Current Correction (September 2011 to December 2013) 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 1 12 23 34 45 56 67 78 89 100 111 122 133 144 155 70s Bull Market Current Bull Market ▶ During 2013, gold prices dropped 28% to $1,202/oz., driven by reduced allocations to gold-backed futures and ETFs from U.S. hedge funds, institutions, and mutual funds. As a result, some commentators called an end of the bull market in gold. ▶ However, we believe that the recent price correction will be temporary, similar to the 1974 to 1976 correction in gold prices during the bull market of 1968 to 1980 and the 1987 downturn in the Dow Jones Industrial Average: • During the last gold price correction (1974 to 1976), gold prices dropped by nearly 50%; following the correction, gold prices resumed their upward climb. ▶ We believe that the fundamental drivers that support gold’s upward trajectory are still in place: • Amidst some encouraging US economic data, core underlying issues remain unsolved (i.e., high sovereign debt, expansionary monetary policies, structural federal deficits) • Exceptionally strong demand from emerging markets, led by China, India, and the Middle East • As central banks diversify their foreign reserves, gold should continue to be a highly relevant asset class • Supply remains stagnant, constrained by low discovery rates, rising costs, declining grades, and jurisdictional risk
  5. 5. why gold? the revaluation 5 Gold has served mankind for five millennia, protecting wealth from high inflation, negative real interest rates, volatile currencies, rising and falling empires, declining stock values, and other crises. HISTORIC HAVEN RISING TIDE We believe that gold is in a secular bull market, driven by financial and macro-economic developments, a shift in central bank activity, and significant supply/demand pressures. Financial and economic problems have highlighted the value of gold for governments, SWFs, central banks, institutions and private investors, who seek the capital appreciation potential and stabilizing effect on overall wealth that gold can provide. Yet gold remains strikingly under owned. INVESTMENT ATTRACTION Gold production growth rates have slowed. New discoveries are increasingly difficult and costly to find, highly risky, and require long lead times to reach production. Central banks, formerly a source of supply, have been net purchasers since 2009. SUPPLY CHALLENGES CURRENCY DEBASEMENT Major reserve currencies are being debased: the USD, the Euro, the Sterling, the Yen and even the Swiss Franc. After a 40-year secular trend of attempted de-monetization, gold has re-asserted itself as the only currency that cannot be debased or printed. NO COUNTERPARTY RISK Gold is the only major store of value which does not represent someone else’s liability. EMERGING MARKETS Economic growth, particularly in developing economies, has supported gold’s upward trajectory; emerging markets represented the source of 84% of physical gold demand in 2013. Strong demand from key emerging markets may also reflect investors’ desire for a liquid, low-risk investment that can serve as a hedge against inflation. Past performance is not indicative of future results.
  6. 6. why gold? a valuable portfolio diversifier 6 COMPARATIVE RETURNS Notes: Indexes are for illustrative purposes only. Past performance is not indicative of future results. Gold provides excellent portfolio diversification due to its low correlation with most other asset classes, including equities, bonds, other commodities, and the U.S. dollar. Unlike other commodities, gold tends to retain value during recessions and deflationary periods. Gold’s performance over the last decade vindicates its status as a valuable diversifier. Over the last decade, gold has surged relative to other investment classes; it has outperformed equities, risen in price as oil fell sharply in Q4 2008 and again in Q2 2011 (signifying an historic de-coupling) and outperformed the Commodity Research Bureau (CRB) Futures Index by 28% between December 2008 and December 2013. We believe it will continue to do so because gold is more than a mere commodity. PORTFOLIO DIVERSIFICATION AND CAPITAL PRESERVATION GOLD HAS RETAINED VALUE IN UNCERTAIN TIMESGOLD’S 10-YEAR HISTORICAL CORRELATION 100.0% 40.0% 44.0% 89.0% 27.0% (5.0%) (50.0%) (65.0%) (31.0%) (80.0%) (60.0%) (40.0%) (20.0%) 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 1814 to 1830 1864 to 1897 1929 to 1933 Gold Silver Other Commodities SOURCE: INCREMENTUM AG. % CHANGE SOURCE: CPM GROUP. 0.94 0.67 0.33 0.28 0.28 0.14 (0.49) (0.63) (0.81) (0.88)(1.00) (0.50) 0.00 0.50 1.00 Silver Oil FTSE100 $/Euro S&P500 MSCIWorldIndex Nikkei 13WeekT-Bill 30YearT-Bond 10YearT-Note Percent Change 31-Dec-13 1 year 5 year 10 year Gold $1,202.30 -28.3% 36.0% 188.9% Silver $19.37 -35.9% 71.5% 224.7% Oil $98.42 7.2% 120.7% 202.6% S&P 500 1,848.36 29.6% 104.6% 66.2% FTSE 6749.09 14.4% 52.2% 50.8% Nikkei 16291.31 56.7% 83.9% 52.6% MSCI World Index 1661.07 24.1% 80.5% 60.3% $/Euro $1.37 4.2% -1.6% 9.1% 13 Week T-Bill 0.6% 0.5% 0.8% 1.8% 10 Year T-Note 3.0% 2.4% 2.6% 3.5% 30 Year T-Bond 4.0% 3.2% 3.7% 4.2% Notes: T-bill, T-note, and T-bond are average rates of return. Source: CPM Group
  7. 7. why gold? flourishes in inflation and deflation 7 Gold has historically retained value on a relative and absolute basis. When imploding asset classes created a deflationary spiral in 2008 and 2009, oil, equities, currencies, agricultural and commodities declined. As a safe haven, gold retained its value, as investors sought to protect their savings and hedge against financial market default. GOLD RETAINS VALUE HISTORICAL DEFLATIONARY PRECEDENT In prior periods of significant economic downturn such as the Great Depression, average gold prices rose (e.g., 76% from $19.75 in 1929 to 1932, to $34.69 in 1934).A July 2011 Oxford Economics Group model of a wave of defaults in the Eurozone countries concluded that gold would perform strongly in a deflationary scenario. SIGNIFICANT INFLATIONARY PRESSURES Gold can play an important role in preserving purchasing power and minimizing downside risk. Inflation, or expectations of inflation, can have a substantial impact on the price of gold, which is a trusted inflation hedge. Unprecedented fiscal and monetary incentives have been used to stimulate the global economy and could fuel inflationary pressures. Certain emerging economies are already experiencing significant inflation rates, further fueling gold demand. GOLD PRICES VS. CHANGE IN CPI, SEPTEMBER 2008 TO MARCH 2009 MONTHLY DATA SOURCE: CPM GROUP. Past performance is not indicative of future results. GOLD AND INDIAN INFLATION ANNUAL, THROUGH 2013 SOURCE: BLOOMBERG. INDIAN INFLATION (%) GOLD PRICE (K INR) (2.0%) (1.5%) (1.0%) (0.5%) 0.0% 0.5% 1.0% $0 $200 $400 $600 $800 $1,000 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 MoM CPI Gold Price GOLD PRICE ($/OZ.) CHANGE IN CPI 0.0 25.0 50.0 75.0 100.0 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013
  8. 8. EXCEPTIONAL IN SCALE, QUALITY AND JURISDICTIONAL SAFETY why NOVAGOLD? two significant assets 8 39Moz gold resource1 ̴ 9Blbs copper resource1 Notes: 1) Represents 100% of measured and indicated resources of which NOVAGOLD’s share represents 50%. Measured and indicated resources inclusive of proven and probable reserves. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. ̴ 8Moz gold resource1 ̴ 136Moz silver resource1 Donlin Gold Galore Creek 8
  9. 9. why NOVAGOLD? the largest development-stage gold project in the world M&I Gold Resource2 >30 million oz. >10 million oz. >4 million oz. Donlin Gold: 39.0 M oz. Livengood: 15.7 M oz. Metates: 19.0 M oz. Haile: 4.0 M oz. Aurora: 6.5 M oz. Rainy River: 6.2 M oz. Tropicana: 6.8 M oz. 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”). Peer group resource data from RBC Capital Markets Research, focusing on large, open pit, gold focused development projects. 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. 1) Source: Canaccord Genuity Research, “Don’t Fear the Reaper,” January 8, 2013. This report ranks each of the top twenty gold-producing countries in terms of jurisdictional safety. ”Donlin Gold has all the leverage to a rising gold market that a bull on the metal could ask for, and, critically, it's one of only a handful of large projects located in a safe jurisdiction where you can sleep soundly knowing you will keep the fruits of that leverage” - Greg Lang, President & CEO, NOVAGOLD Feb. 12, 2013 Jurisdictional Considerations1 Safest Somewhat Safe Unranked Less Safe Riskiest 9
  10. 10. why NOVAGOLD? among the highest-grade open pit deposits in the world M&I Gold Resource >2.0 g/T Au >1.0 g/T Au >0.5 g/T Au Donlin Gold: 2.24 g/t Au Livengood: 0.61 g/t Au Metates: 0.50 g/t Au Aurora: 3.24 g/t Au Rainy River: 1.09g/t Au Tropicana: 1.99 g/t Au Jurisdictional Considerations1 Safest Somewhat Safe Unranked Less Safe Riskiest Haile: 1.77 g/t Au 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”). Peer group resource data from RBC Capital Markets Research, focusing on large, open pit, gold focused development projects. 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. 1) Source: Canaccord Genuity Research, “Don’t Fear the Reaper,” January 8, 2013. This report ranks each of the top twenty gold-producing countries in terms of jurisdictional safety. COMPARES FAVORABLY TO OTHER LARGE DEVELOPMENT STAGE OPEN-PIT PROJECTS 10
  11. 11. why NOVAGOLD? emerging top-tier producer in safe jurisdiction 1.102 0.76 0.60 0.58 0.34 0.33 0.19 0.13 1.501 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 Donlin Gold Metates Kibali Livengood Tropicana East Rainy River Aurora Haile Location USA Mexico DRC USA Australia Canada Guyana USA Owner(s) NOVAGOLD(50%) Barrick (50%) Chesapeake (100%) Randgold (45%) AngloGold (45%) DRC (10%) ITH Mines (100%) AngloGold (70%) Ind. Group (30%) New Gold (100%) Guyana Goldfields (100%) Romarco (100%) 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. ProjectedAnnualGoldProduction (millionsofounces) THE LARGEST PROJECTED GOLD PRODUCER AMONG EXISTING DEVELOPMENT PROJECTS 11
  12. 12. why NOVAGOLD? significant exploration upside 3km = 39 Moz M&I (including 34 Moz P&P), 6 Moz Inferred1 1) Includes only Measured and Indicated resources. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. “WHAT IS SINGULAR IN MY PROFESSIONAL EXPERIENCE IS THAT THIS IS NOT WHERE THE OREBODY WILL END ITS LIFE, BUT WHERE IT WILL START.” – Greg Lang, President & CEO, NOVAGOLD 12 ▶ Potential to expand current open-pit resources along strike and at depth • Many targets close to the pit floor that could be mined without dramatically increasing strip ratio or enlarging pit footprint ▶ Good potential to discover meaningful deposits outside current mine footprint – current reserves and resources are contained within just 3 km of an 8 km long district • Several drilled prospects and other exploration targets along the 6 km trend north of the resource area remain under-explored ▶ Between 2002 and 2010, drilling programs more than doubled the mineral endowment ▶ Inferred mineral resource: 6 million ounces of gold within the resource pit shell • Potential to convert to M&I category during mining, representing upside potential to project economics
  13. 13. Donlin Gold located in Alaska, one of the safest jurisdictions in the world with history of successful mining development ALASKA IS COMMITTED TO RESPONSIBLE RESOURCE DEVELOPMENT why NOVAGOLD? favorable geo-political jurisdictions ▶ Alaska is the second largest U.S. gold- producing State ▶ Well-defined permitting process ▶ Four large precious metals mines, one coal mine & two base metals mines ▶ Numerous small-scale mines ▶ Natural resource projects integral to the State’s economy ▶ Strong and time-tested community support 13
  14. 14. INDUSTRY LEADERS TO BRING DONLIN GOLD THROUGH PERMITTING & BEYOND why NOVAGOLD? experienced team with an excellent record of success 14 Gregory Lang President & CEO ▸ Former President of Barrick Gold North America ▸ 35 years experience building & operating major mines ▸ Intimate knowledge of Donlin Gold David Deisley Executive Vice President and General Counsel ▸ Former EVP and General Counsel of Goldcorp ▸ Regional General Counsel for Barrick Gold North America ▸ Extensive track record in project permitting, corporate social responsibility, mergers and acquisitions and corporate development ▸ 25 years of mining industry experience David Ottewell Vice President and Chief Financial Officer ▸ Former VP and Corporate Controller of Newmont Mining Corporation ▸ 25 years of mining industry experience ▸ Diverse experience in all facets of financial management, from mine operations to executive corporate financial management of premier gold producers Mélanie Hennessey Vice President, Corporate Communications ▸ Held variety of executive and senior IR & corporate communications positions with Goldcorp Inc., New Gold Inc., and Hecla Mining Company ▸ Leading NOVAGOLD’s internal and external communications functions Ron Rimelman Vice President, Environment, Health, Safety & Sustainability ▸ 25+ years of environmental experience, managing environmental impact assessments and permitting activities world-wide ▸ Leadership role on mine permitting and NEPA evaluations for mine projects in Alaska since 1993 Richard Williams Vice President, Engineering and Development ▸ Former Project Director for the Pueblo Viejo project in the Dominican Republic ▸ 30 years of experience developing and operating major mines world-wide ▸ Particular expertise in autoclave technology MANAGEMENT
  15. 15. why NOVAGOLD? Donlin Gold project permitting is on track 15 1.5Moz/year first five full years1 1.1Moz/year life of mine1 16 years ̴ 4 27+ years EXPLORATION& ENVIRONMENTAL STUDIES PERMITTING ENGINEERING& CONSTRUCTION OPERATION WE ARE HERE 1.5Moz/year first five full years1 1.1Moz/year life of mine1 ̴ 4 Notes: 1) Donlin Gold data as per the updated feasibility study. Projected annual production represents 100% of which NOVAGOLD’s share represents 50%. DEVELOPMENT TIMELINE - ADVANCING TOWARD A CONSTRUCTION DECISION A GREAT LOW-COST OPTION ON GOLD
  16. 16. $6.2B $9.2B $11.6B $14.6B $19.2B $27.0B 0 5,000 10,000 15,000 20,000 25,000 30,000 $1,200 $1,350 $1,500 $1,700 $2,000 $2,500 NPV(US$inmillions) Gold Price (US$) NPV at 0%NPV at 5% NPV INCREASES ~20X WITH ~2X INCREASE IN GOLD PRICE why NOVAGOLD? Donlin Gold has exceptional leverage to gold ▶ Even in a low-price environment, the project has a positive return that increases substantially with higher gold prices ▶ Fast payback at a broad range of gold prices ▶ Does not take into account: • Value creation as project progresses from permitting to operation • Significant exploration upside of the mineralized trend 16 Notes: Donlin Gold estimates as per updated feasibility study. All dollar figures are in USD and reflect after-tax net present value (at a 0% and 5% discount rates) of the Donlin Gold project as of 1/1/2014. At a 5% discount rate, the net present value is: $547 m @ $1,200 gold; $1,922m @ $1,350 gold; $3,147m @ $1,500 gold; $4,581 m @ $1,700 gold; $6,722 m @ $2,000 gold; and $10,243 m @ $2,500 gold. Project development costs prior to 1/1/2014 are treated as sunk costs.
  17. 17. THE KIND OF ASSET YOU CAN BUILD A COMPANY AROUND why NOVAGOLD? Galore Creek a significant copper-gold- silver asset in Canada STRONG copper grades SIGNIFICANT gold & silver content GROWING resources CONSIDERABLE exploration upside SAFE jurisdiction 17 9Blbs copper 8Moz gold 136Moz silver 0.5% copper 0.3g/t gold 5.2g/t silver M&I Resources1 Notes: 1) Represents 100% of measured and indicated resources of which NOVAGOLD’s share represents 50%. Measured and indicated resources inclusive of proven and probable reserves. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. 18year mine life
  18. 18. CLEAR FOCUS BEGINS WITH FUNDING TO EXECUTE ON ALL FRONTS why NOVAGOLD? solid foundation with a strong balance sheet 18 Notes: 1) Market Capitalization as of May 16, 2014 based on 317.3 million shares issued and outstanding. 2) Includes US$ 110 million in term deposits as of February 28th 2014. 3) The Notes mature on May 1, 2015. market cap1 $958M cash and term deposits2 $182 convertible notes3 $16 in millions of U.S. dollars
  19. 19. 26.7% 11.3% 6.9% 2.2%1.7% 51% BLUE CHIP INSTITUTIONAL QUALITY INVESTMENT why NOVAGOLD? excellent and committed shareholder base 19 Institutional Ownership 80% held by top 5 shareholders(1) 49% Notes: (1) Shareholder positions are based on the latest 13-F filings. committed to Shareholder Value Electrum Strategic Resources LP Paulson & Co. Inc The Baupost Group, L.L.C. Tocqueville Asset Management Sun Valley Gold, LLC Other
  20. 20. why NOVAGOLD? why NOW? NOVAGOLD offers: ▶ TOP TIER, high-grade assets with excellent exploration upside ▶ SAFEST leverage to a massive gold endowment ▶ PROLIFIC gold production for decades to come ▶ SUPPORTIVE, loyal, and engaged stakeholders ▶ ACCOMPLISHED team in building & operating large-scale mining assets ▶ STRONG balance sheet 20 In an environment where: ▶ Gold is in a secular bull market ▶ Macroeconomic environment supportive of continued trend toward higher price ▶ Grades are declining ▶ New discoveries are few ▶ Global exploration & development shrinking ▶ Geopolitical risks increasing
  21. 21. novagold.com appendix
  22. 22. PROJECTS CONTINUE TO ADVANCE ON TIME AND ON BUDGET recent achievements 22 maintaining a healthy balance sheet continued to advance permitting of Donlin Gold with completion of public scoping and advanced preparation of preliminary draft environmental impact statement Galore Creek 2013 exploration drill results identified extensions to mineralization at Legacy zone simplified company, significantly reduced expenditures built a management team with expertise in permitting, developing and operating large-scale projects
  23. 23. CLEAR FOCUS BEGINS WITH STRONG FUNDING TO EXECUTE ON ALL FRONTS financial obligations have decreased substantially 23 $0 $20 $40 $60 $80 $100 $120 $140 2012 Act(1) 2013 Act 2014 Bud DiscOps G&A Donlin Gold Galore Creek Interest & other 1 - 70% - 23% Notes: 1) 2014 anticipated budget expenditure disclosed on February 11, 2014 2) Market Capitalization as of May 5, 2014 based on 316.7 million shares issued and outstanding. 3) Includes US$ 110 million in term deposits as of February 28th 2014. 4) The Notes mature on May 1, 2015. cash and term deposits3 $182 convertible notes4 $16 in millions of U.S. dollars reducedby~$100M
  24. 24. 1.60 1.101 1.01 0.95 0.94 0.89 0.87 0.75 0.73 0.70 0.68 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 Grasberg Donlin Gold Pueblo Viejo Cortez Yanacocha Goldstrike Carlin Lihir Island Oyu Tolgoi Boddington Veladero Notes: Donlin Gold projected annual production represents 100% of which NOVAGOLD’s share represents 50%. All other production estimates, for the exception of Grasberg, are based on published 2014 average gold annual production guidance. Grasberg represents the published 2014 gold sales guidance. 1) 1.50Moz represents the projected annual gold production during first five full years of mine life, 1.10Moz represents the projected annual gold production during full life of mine. Gold (M/oz) LOCATION: 1.50 1 USA USADOMINICAN REPUBLIC INDONESIA PAPUA NEW GUINEA PERU AUSTRALIAMONGOLIA poised to be world’s biggest gold mine EXPECTED PRODUCTION RIVALS 10 LARGEST EXISTING GOLD MINES 24 USAUSA ARGENTINA
  25. 25. ▶ Donlin Gold LLC is the operating company ▶ 50/50 ownership by NOVAGOLD and Barrick Gold ▶ Board of Directors has two representatives from each company • Chairman rotates every year • Each company has the right to appoint the Donlin Gold General Manager every two years ▶ Operates under agreements with Alaska Native Claims Settlement Act (ANCSA) landowners • Calista Corporation (Subsurface minerals and surface lease) • The Kuskokwim Corporation (Surface use agreement) ▶ Project office in Anchorage • 36 full-time employees and 2 contractors ▶ Strong track record for local hiring ADVANCING THE PROJECT UP THE VALUE CHAIN Donlin Gold project overview 25
  26. 26. SLATED TO BE A STATE-OF-THE-ART SIGNIFICANT MINE Donlin Gold project highlights 26 Reserves: 33.9 Moz Au (505M tonnes ore)1 Resources: 5.1 Moz M&I (excluding P&P) and 6.0 Moz Inferred1 Mine Life: ~27 years Production: Year 1-5,1.5 Moz/year; LOM,1.1 Moz/year Operation: Open-pit, conventional truck & shovel Milling: 53.5k tonnes/day, sulfide flotation, pressure oxidation (POX), carbon-in-leach recovery (CIL) Strip ratio: 5.5 = 2.8B tonnes waste rock Tailings: Fully lined storage facility Power: 153MW average site-generated load, fueled by natural gas transported via a 315-mile pipeline Logistics: All consumables supplied by Kuskokwim River transportation system with port near Jungjuk Creek See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve and Resource Base” table with footnotes.
  27. 27. Donlin Gold LOW OPERATING CASH COSTS AND ALL-IN SUSTAINING COSTS 27 Open-pit mining2 270 Processing 257 G&A, royalties, land & other3 108 Total $635 Open-pit mining2 133 Processing 208 G&A, royalties, land & other3 70 Total $411 Life of Mine Cash Costs1 Per Ounce First Five Years Cash Costs1 Per Ounce Notes: Donlin Gold estimates as per the updated feasibility study. 1) US GAAP cost of sales, excluding depreciation and reclamation 2) Net of deferred costs 3) Based on US$1,200/oz gold price Life of Mine All-in Sustaining Costs Per Ounce Cash costs1 635 Sustaining capex 50 Corporate administration 28 Reclamation 22 Total $735 First Five Years All-in Sustaining Costs Per Ounce Cash costs1 411 Sustaining capex 83 Corporate administration 21 Reclamation 17 Total $532
  28. 28. 28 ($10,000) ($5,000) $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 CumulativeNetCashFlow(US$millions)' $1,200/oz Au $1,500/oz Au $1,700/oz Au $2,000/oz Au $2,500/oz Au $6,025 $11,459 $14,444 $19,075 $26,803 ~4.5x leverage NetCashFlow(millions) All Amounts in US Dollars Rich Ore Body With a 27-Year Mine Life and Extensive Exploration Upside Notes: Donlin Gold estimates as per the updated feasibility study. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 LEVERAGE TO GOLD & FAST PAYBACK AT A BROAD RANGE OF GOLD PRICES Donlin Gold expected to generate substantial cash flows
  29. 29. Donlin Gold WELL POSITIONED TO SHARE UPFRONT COSTS WITH THIRD PARTIES Areas US$M1 Opportunities1 Mining 345 Leasing equipment ~$170M Site preparation/roads 236 Process facilities 1,326 Oxygen plant could be built by third party ~$130M Tailings 120 Utilities 1,302 Ancillary buildings 304 Off-site facilities 243 Total Direct Costs 3,876 Owners’ cost 414 Indirect Costs 1,405 Contingency 984 Healthy Contingency Total Owner’s & Indirect Costs, and Contingency 2,803 Total Project Cost 6,679 >$1B potential capital reductions Gas pipeline could be built by third party $834M 1) Represents 100% of project’s capital expenditures 29
  30. 30. ROBUST ECONOMICS HIGHLY LEVERAGED TO GOLD PRICES Donlin Gold key performance indicators 30 Gold Price Unit $1,000/oz $1,200/oz Base Case $1,700/oz $2,000/oz $2,500/oz Average annual after-tax cash flow (first full five years) $M 670 950 1,500 1,785 2,185 Average annual after-tax cash flow (LOM) $M 350 500 815 990 1,275 NPV (5%) after-tax1 $M (1,340) 550 4,580 6,720 10,240 NPV (0%) after-tax1 $M 2,100 6,200 14,620 19,250 26,975 IRR after-tax1 % 2.3 6.0 12.3 15.1 19.1 Payback period Years 19.1 9.2 5.3 4.4 3.5 Notes: Donlin Gold estimates as per the updated feasibility study. All dollar figures are in USD and reflect after-tax net present value (at a 0% and 5% discount rates) of the Donlin Gold Project as of 1/1/2014. At a 5% discount rate, the net present value is: $547 m @ $1,200 gold; $4,581 m @ $1,700 gold; $6,722 m @ $2,000 gold; and $10,243 m @ $2,500 gold. Project development costs prior to that date are treated as sunk costs. All amounts in US dollars 1) NPVs and IRRs as at January 1, 2014. Project development costs prior to that date are treated as sunk costs.
  31. 31. Donlin Gold - standard technology Donlin Gold Pueblo Viejo Detour Lake Capital Expenditures US$6.7B1 ~US$4.0B2 C$1.5B4 Location Alaska, US Sanchez Ramirez, Dominican Republic Ontario, Canada Mining Method Open Pit Open Pit Open Pit Project Status Permitting Commercial Operation Commercial Operation Total M&I Resources (inclusive of reserves) 39.0 Moz 36.3 Moz 23.3 Moz Nameplate Design Throughput (tpd) 53,500 24,000 61,000 M&I Grade (g/t) 2.24 2.41 1.07 Recovery (%) 89.8 92 91 Strip Ratio 5.5 1.2 3.7 Expected Average Annual Production (oz) 1,500,000 3 1,042,000 – 1,125,000 3 ~650,000 Processing Method Flotation/Autoclaving/Leaching Autoclave/Leaching/Ag/Cu Recovery Gravity Concentration/High-Intensity Leaching Ball Mill Underflow & Gravity Tails Leaching Number of Autoclaves 2 medium 4 large N/A Key Infrastructure Natural gas pipeline/Power plant Oxygen plant Power plant and Transmission Line/ Oxygen plant/Lime Kilns/Limestone Grinding 180 km 230kV Transmission Line Mine Life 27 years 25 years 22 years WELL ESTABLISHED MINING AND MINERAL PROCESSING METHODOLOGY Notes: Donlin Gold estimates as per the updated feasibility study. Peer data as per company documents, public filings and websites. Represents 100% of measured and indicated resources of which NOVAGOLD’s share represents 50%. Measured and indicated resources inclusive of proven and probable reserves. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. 1) Capital expenditure shown on a 100% project basis. 2) Capital expenditure of US$3.7B disclosed in Barrick Gold’s press release dated 01/15/13, plus a net incremental cost of approximately US$300M for the power plant. 3) Production expected for first full five years of operation. 4) Revised at end of 3Q 2012, as per press release dated 11/8/12. 31
  32. 32. WEST COAST RIVER BARGE UP KUSKOKWIM RIVER WITH TWO PORT FACILITIES Donlin Gold logistics & supply chain 32
  33. 33. PROPOSED PIPELINE TIES INTO EXISTING INFRASTRUCTURE AT COOK INLET powering Donlin Gold 33 ▸ Project would require 153MW of electricity to power the mill & facilities ▸ Fueled by natural gas transported via a 315-mile-long, 14-inch pipeline ▸ Donlin Gold has studied various pipeline routes and collected baseline data on: • Wetlands, stream crossings and aquatic resources • Cultural sites • Seismic conditions • The Iditarod Trail
  34. 34. JURISDICTIONAL SAFETY IS MORE THAN GEOGRAPHIC LOCATION the right stakeholders Committed Stakeholders ▶ Calista Corporation (mineral owner) ▶ The Kuskokwim Corporation (surface owner) “Calista would like to take this opportunity to assert and inform the U.S. Army Corps of Engineers and the public of its legislated mandate under ANCSA. Calista and TKC are not only stakeholders, but are the legislatively mandated landowners charged with the responsibility of seeing the project to fruition in an environmentally responsible manner.” – June MacAtee, Calista Corporation VP 34
  35. 35. COMPANIES HAVE AND CONTINUE TO BUILD MUTUALLY-BENEFICIAL PARTNERSHIPS IN ALASKA state supporting development of resource industry ▶ Large Mine Permitting Team responsible for coordinating the permitting process for large mining projects in the State ▶ Alaska Exploration Incentive Credit Program – up to $20 million deduction over a 15-year period for new mines ▶ Roads to Resources Program (R2R) – transportation and other infrastructure initiatives to support the development of natural resources STATE IS COMMITTED TO WORK WITH COMPANIES IN FACILITATING COST-EFFECTIVE ACCESS TO PROJECTS AND OPERATIONS IN ALASKA ▶ Red Dog mine port & access road owned by State Economic Development Agency – initially financed by State ▶ Ambler project - earlier-stage initiative in evaluating a 225 mile road to access the Ambler mining district ▶ Alaska State Senate Labor and Commerce Committee authorized AIDEA to provide up to $125 million in financing to support development of the Bokan- Dotson Ridge and Niblack projects 35
  36. 36. LARGE PROJECTS HAVE BEEN SUCCESSFULLY PERMITTED permitting in the U.S. 36 Project Name Location Metal Time Description Red Dog Alaska Lead/zinc ~2 years • Expansion • EIS completed in 2009 • Development started on schedule in 2010 Fort Knox Alaska Gold ~3 years • Expansion – new heap leach facility • Permitting completed in 2007 Pogo Alaska Gold ~3 years • New mine • Permitting completed in 2004 • Operations began in 2006 Arturo Nevada Gold ~4 years • Major pit expansion • New waste rock and heap leach facilities • EIS/ROD completed in May 2014 Rochester Nevada Silver ~1 year • Expansion – new heap leach & mine reopening • EA/permitting completed in 2011 Cortez Nevada Gold ~3 years • Major pit expansion • EIS/permitting completed in 2008/2009 Goldstrike Nevada Gold ~2 years • Major pit expansion • Waste rock and tailings facilities • ROD approving the project was in 2009 Hycroft Nevada Gold ~2 years • Reactivation • EIS/permitting completed in 2012 Long Canyon Nevada Gold ~3 years (anticipated) • New pit, heap leach, mill and tailings facility • Draft EIS issued in March 2014 Pan Nevada Gold ~2 years • New open pit and heap leach • EIS/permitting completed in 2013 Haile South Carolina Gold ~3 years (anticipated) • New mine on historic property • Open pits, processing and tailings facilities • Draft EIS issued spring 2014, Final/ROD anticipated within 6 months
  37. 37. RESOURCES MORE THAN DOUBLED FROM 2006 TO 2008 Donlin Gold reserve & resource growth 37 16.6 29.4 35.3 37.9 39.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 2006 2007 2008 2009 2011 Notes: Donlin Gold data as per NOVAGOLD public documents. Represents 100% of measured and indicated resources of which NOVAGOLD’s share represents 50%. 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. M&IAuResources(Moz) 39Moz M&I RESOURCES 34Moz P&P RESERVES @ $975/oz inclusive of grade of 2.24g/t And there is opportunity for continued growth once in production… PEA FeasibilityStudy UpdatedFeasibilityStudy Focused on feasibility-level planning and more recently permitting
  38. 38. MULTIPLE DRILL PROSPECTS AND TARGETS EXIST ALONG 8KM TREND Donlin Gold’s substantial exploration potential Notes: See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. 38 ▶ Exploration upside: • In-pit resource conversion • In-pit/deep-pit exploration • Near-pit targets (East ACMA, Akivik Zone and Snow) • Additional resource potential Snow Dome Quartz Ophir ACMA Lewis 39.0Moz M&I Resource 6.0Moz Inf Resource 5 km Snow Quartz Dome Ophir ACMA Lewis Snow Dome
  39. 39. AN EXCEPTIONAL ASSET Galore Creek project overview 39 ▶ Galore Creek Mining Corporation (GCMC) is the operating company ▸ 50/50 ownership by NOVAGOLD and Teck Resources Inc. ▸ Management Committee has two representatives from each company • Chairman rotates every year ▸ Project is located within the Tahltan Nation Territory and operates under a Participation Agreement ▸ All mineral claims are on Crown land ▸ Project office in Vancouver • Abundance of technical strength to draw from within Teck ▸ Strong track record for Tahltan hiring at project site as well as contracting and procurement with Tahltan businesses and joint ventures
  40. 40. ANTICIPATED TO BE ONE OF CANADA’S LARGEST COPPER MINES Galore Creek project highlights 40 Reserves: 6.8 Blb Cu; 5.5 Moz Au; 102 Moz Ag 1 Resources: 8.9 Blb Cu; 8.0 Moz Au; 136 Moz Ag (inclusive of reserves) 1 Mine Life: ~18 years Production: Year 1-5, 400 Mlb/year Cu; LOM, 340 Mlb/year Cu Operation: Open-pit, conventional truck & shovel Milling: +80k tonnes/day, conventional crush, grind, and Cu/Au/Ag flotation concentration, plant located in West More Valley Strip ratio: 2.2 = 1.1B tonnes waste rock Tailings: storage facility located in West More Valley next to plant Power: BC Hydro currently constructing the Northwest Transmission Line from near Terrace, BC to Bob Quinn to promote remote industrial development, Galore Creek to tie into the NTL Logistics: Port facilities to be built near Stewart, BC Notes: See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve and Resource Base” table with footnotes.
  41. 41. ROBUST ECONOMICS HIGHLY LEVERAGED TO METAL PRICES Galore Creek key performance indicators 41 Unit Metal Prices Copper Gold Silver US$/lb US$/oz US$/oz 2.00 900 15.00 2.65 1,100 18.50 3.00 1,100 20.00 3.50 1,200 25.00 4.00 1,300 30.00 LOM after-tax cash flow $M 1,514 5,118 6,641 9,223 11,812 NPV (5%) after-tax1 $M (969) 988 1,794 3,134 4,458 NPV (7%) after-tax1 $M (1,431) 137 778 1,837 2,877 IRR after-tax1 % 2.4 7.4 9.2 11.9 14.3 Payback period Years 13.2 7.8 6.1 4.1 3.3 Notes: Galore Creek estimates as per the 2011 Pre-Feasibility Study. All dollar figures are in CAD. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. 1) NPVs and IRRs as of two years prior to significant project spend. Project development costs prior to that point are treated as sunk costs. All amounts in CAD dollars
  42. 42. AMONG HIGHEST COPPER GRADE COMPARED TO NORTH AMERICAN ASSETS Galore Creek grade peer comparisons 42 P&P + M&I grade (Cu%) Notes: Data as per SNL MEG’s MineSearch database, Company reports, SNL MEG estimates. 0.50 0.45 0.42 0.40 0.32 0.30 0.27 0.24 0.21 0.18 0.18 0.00 0.10 0.20 0.30 0.40 0.50 0.60 Galore Creek Pebble Rosemont Catface Red Chris Berg Schaft Creek New Prosperity KSM Mount Milligan Casino
  43. 43. NOVAGOLD board of directors 43 Dr. Thomas Kaplan Chairman Chairman and CIO of The Electrum Group LLC, a privately held natural resources investor that controls a diversified portfolio of precious and base metals assets Sharon Dowdall Former Chief Legal Officer and Corporate Secretary with Franco-Nevada, transforming an industry pioneer into one of the most successful precious metals enterprises in the world Dr. Marc Faber Publishes a monthly investment newsletter entitled The Gloom, Boom & Doom Report and is the author of several books Greg Lang President & CEO Former President of Barrick Gold North America, 35 years experience building & operating major mines with intimate knowledge of Donlin Gold Gil Leathley COO and Director of Sunward Resources, former Senior Vice President and Chief Operating Officer of the Company Igor Levental President of The Electrum Group LLC, former VP of Homestake Mining and International Corona Corp. Kalidas Madhavpeddi Former Executive with Phelps Dodge Gerald McConnell Former Chairman and CEO of NOVAGOLD, CEO of Namibia Rare Earths Inc. Clynton Nauman CEO of Alexco Resources, formerly with Viceroy Gold and Kennecott Minerals Rick Van Nieuwenhuyse CEO of NovaCopper, founder and former CEO of NOVAGOLD Anthony Walsh Former President and Chief Executive Officer of Miramar Mining Corporation, which in 2007 was sold to Newmont Mining Company.
  44. 44. COPPER Tonnage Mt Grade* %Cu Metal content Mlbs NOVAGOLD share** Mlbs Reserves (100%)2 Proven 69.0 0.61 900.0 450.0 Probable 459.1 0.58 5,900.0 2,950.0 P&P 528.0 0.59 6,800.0 3,400.0 Resources (100%)4 inclusive of reserves Measured 108.4 0.48 1,147.0 573.5 Indicated 706.3 0.50 7,786.0 3,893.0 M&I 814.7 0.50 8,933.0 4,466.5 Inferred 346.6 0.42 3,230.0 1,615.0 GOLD Mt g/t Moz Moz Reserves (100%)2 Proven 69.0 0.52 1.15 0.58 Probable 459.1 0.29 4.30 2.15 P&P 528.0 0.32 5.45 2.73 Resources (100%)4 inclusive of reserves Measured 108.4 0.48 1.70 0.85 Indicated 706.3 0.28 6.40 3.20 M&I 814.7 0.31 8.00 4.00 Inferred 346.6 0.24 2.70 1.35 SILVER Mt g/t Moz Moz Reserves (100%)2 Proven 69.0 4.94 11.0 5.5 Probable 459.1 6.18 91.2 45.6 P&P 528.0 6.02 102.2 51.1 Resources (100%)4 inclusive of reserves Measured 108.4 4.10 14.30 7.15 Indicated 706.3 5.38 122.10 61.05 M&I 814.7 5.21 136.40 68.20 Inferred 346.6 4.28 47.73 23.87 At April 30, 2012 Donlin Gold (NOVAGOLD 50%) Galore Creek (NOVAGOLD 50%) GOLD Tonnage Mt Grade* g/t Metal content Moz NOVAGOLD share** Moz Reserves (100%)1 Proven 7.7 2.32 0.57 0.29 Probable 497.1 2.08 33.28 16.64 P&P 504.8 2.09 33.85 16.93 Resources (100%)3 inclusive of reserves Measured 7.7 2.52 0.63 0.31 Indicated 533.6 2.24 38.38 19.19 M&I 541.3 2.24 39.01 19.50 Inferred 92.2 2.02 5.99 3.00 NOVAGOLD reserve/resource table 44
  45. 45. reserve/resource table (con’t) Resources (100%)5,6 Tonnage Grade* Metal content NOVAGOLD share** COPPER Mt %Cu Mlbs Mlbs Inferred 53.7 0.50 592.0 414.4 GOLD Mt g/t Moz Moz Inferred 53.7 0.73 1.26 0.88 SILVER Mt g/t Moz Moz Inferred 53.7 10.60 18.36 12.85 Copper Canyon (NOVAGOLD 70%) t = metric tonne M = million g/t = grams/tonne * Reserve grade is diluted; resource grade is in situ. ** NOVAGOLD share net after earn-ins Approximate cut-off grades (see Resource Footnotes below): Donlin Gold Reserves1: 0.57 g/t gold Resources3: 0.46 g/t gold Galore Creek Reserves2: C$10.08 NSR Resources4: C$10.08 NSR Copper Canyon Resources5,6: 0.6% copper equivalent 45
  46. 46. 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 content d. Tonnage and grade measurements are in metric units. Contained gold and silver ounces are reported as troy ounces, contained copper pounds as imperial pounds Resource 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 for gold 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/t processed; 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 pit slope 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. Assuming an 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$16.85/oz, respectively. Appropriate mining costs, processing costs, metal recoveries and inter ramp pit slope angles varing from 42º to 55º were used to generate the pit phase designs. Mineral Reserves have been calculated using a 'cashflow grade' ($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 = Net Smelter 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 of CDN$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 and throughput 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) of US$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 Return was 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 have demonstrated 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 ever be 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 been assigned 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 and Refining 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 processing in 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 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". 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, and US$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. 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 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 is owned by another wholly owned subsidiary of NOVAGOLD. Cautionary Note Concerning Reserve & Resource Estimates This 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 not recognize 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 reserves do 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 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. 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 release may 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 in accordance with NI 43-101 and the CIM Definition Standards. Technical Reports and Qualified Persons The documents referenced below provide supporting technical information for each of NOVAGOLD's projects. Project Qualified Person(s) Most Recent Disclosure & Filing Date Donlin 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, 2012 Galore 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 International Heather 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 the issuance of the technical report filed on September 12, 2011. reserve/resource table (con’t) 46
  47. 47. 47 NOVAGOLD RESOURCES INC. Suite 720 – 789 West Pender Street Vancouver, BC Canada V6C 1H2 T 604 669 6227 TF 1 866 669 6227 F 604 669 6272 www.novagold.com info@novagold.com Mélanie Hennessey VP, Corporate Communications melanie.hennessey@novagold.com Erin O’Toole Analyst, Investor Relations erin.otoole@novagold.com contact us
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