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BMO Global Metals & Mining Conference


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NOVAGOLD presented at the 22nd BMO Capital Markets Global Metals & Mining Conference in Florida. For more information, please see

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BMO Global Metals & Mining Conference

  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 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 the Galore Creek Pre-Feasibility Study. Froward-looking statements 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; 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 management’s beliefs, opinions and projections on the date the statements are made. Except as required by law, the Company assumes 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. 2 NYSE-MKT, TSX: NG
  3. 3. THE NOVAGOLD OPPORTUNITYTier 1 Projects – Exceptional in Scale, Quality and Jurisdictional Safety Donlin Gold ▸ In terms of combined size, grade, exploration potential, production profile and jurisdictional safety, Donlin Gold is arguably the most important undeveloped gold project in the world ▸ Permitting commenced in Q3/12 Galore Creek ▸ If placed into production, as per the latest Pre-Feasibility Study, would be the largest and lowest cash cost copper mine in Canada ▸ Pursuing divestiture to fund development of Donlin Gold 3 NYSE-MKT, TSX: NG
  4. 4. THE NOVAGOLD OPPORTUNITYInstitutional Quality InvestmentSolid. 80% Institutional Ownership▸ Significant High Grade Reserves Electrum Group Lifted Stake to 27%1▸ Excellent Exploration Potential▸ Experienced Management Team Top Shareholders 2 Electrum Strategic Holdings, L.L.CSecure. Paulson & Co. Inc.▸ Healthy Balance Sheet The Baupost Group, L.L.C.▸ Jurisdictional Safety Vinik Asset Management, L.P. Fidelity Management & ResearchGolden. Company▸ Committed to Shareholder Value▸ Superior Leverage to Gold 1) Based on the 12.31.12 13-D filings 2) For the exception of Electrum Strategic Holdings, LLC, shareholder positions are based on the 12.31.12 13-F filings 4 NYSE-MKT, TSX: NG
  5. 5. NOVAGOLD: MEETING THE MILESTONES FOR 2012A 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) 5 NYSE-MKT, TSX: NG
  6. 6. 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 update Q1 - 13 Complete public Galore scoping for Creek Donlin Gold exploration EIS Received $54.0 M drill results proceeds from in the money warrants 6 NYSE-MKT, TSX: NG
  7. 7. 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. 7 NYSE-MKT, TSX: NG
  8. 8. 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. 8 NYSE-MKT, TSX: NG
  9. 9. 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. 9 NYSE-MKT, TSX: NG
  10. 10. DONLIN GOLD: SUBSTANTIAL EXPLORATION POTENTIALMultiple Drill Prospects and Targets Exist Along 8km Trend ▸ Future mine situated in 3km segment of 8km mineralized trend ▸ Over the last six years, the mineral endowment has more than doubled ▸ Located largely on private land, designated for mining ▸ Gold-bearing drill holes along the 8km trend ▸ Exploration upside: • In-pit resource conversion • In-pit/deep-pit exploration • Near-pit targets (East ACMA, 3km = 39 Moz M&I (including 34 Moz P&P), 6 Moz Inferred1 Akivik Zone and Snow) • Area resource potential1) See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. 10 NYSE-MKT, TSX: NG
  11. 11. 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 11 NYSE-MKT, TSX: NG
  12. 12. JURISDICTIONAL SAFETY BECOMING THE “EXISTENTIAL” INVESTMENTCRITERION“Large-Scale Quality Assets” Raising the Question “Where in the World Are You?” • Recently highlighted regions/countries with heightened geopolitical risk ▸ Accelerated industry focus on jurisdictional safety and resource nationalism in many of the largest gold and copper-producing countries ▸ Countries such as Mongolia, Kyrgyzstan, Dominican Republic, Peru, Argentina, Indonesia and Ghana have all stated their intentions to seek higher mining taxes and royalties ▸ Civil and labor unrest in South Africa, Congo, Zambia and Greece with countries looking to get an increased stake in mining companies ▸ Very limited number of quality assets in low geo-political risk jurisdictions 12 NYSE-MKT, TSX: NG
  13. 13. MINES THE SIZE OF DONLIN GOLD ARE SCARCEOnly Six Projects in the World are Slated for Ore Producing >1Moz/year CORTEZ USA 1 156 MINES >100 Koz MURUNTAU Uzbekistan 1 21 MINES 3 MINES/PROJECTS GOLDSTRIKE >500 Koz USA Located in North America, a safe jurisdiction Donlin Gold: only undeveloped 8 MINES YANACOCHA asset in this category >800 Koz Peru PUEBLO VIEJO 6 MINES/ Dominican Republic Projects >1 Moz DONLIN GOLD USA ▸ 1.5 Moz/year in first five full years2 ▸ 1.1 Moz/year LOM2Source: RBC1) Based on 2011 actual production where available, excludes Newmont’s Nevada operations that consist of multiple mines, and excludes Tasiastas Kinross has elected to undertake a Pre-Feasibility Study (PFS) for construction of a mid-sized CIL mill in the 30,000 tonne per day range, forpurposes of comparison with the 60,000 tonne per day mill expansion option. Analysis includes life of mine data for Donlin Gold2) If put into production as contemplated by the Updated Feasibility Study 13 NYSE-MKT, TSX: NG
  14. 14. 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) 14 NYSE-MKT, TSX: NG
  15. 15. 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 1.5years 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 15 NYSE-MKT, TSX: NG
  16. 16. THE PRODUCTION CLIFF – AN INEVITABLE PHENOMENONDonlin Gold Project to Come into Play at a Key Time for the Industry Donlin Gold expected to commence production 1.5M oz Au/yr1 ▸ 2017 onward, material declines in gold production across the industry ▸ Project queue & discovery frequency inadequate to replace production, creating a supply-demand disequilibrium in gold Source: National Bank Financial – The Gold Production Cliff; Industry Congestion Part 3, January 31, 2013. Note: Based on Company Reports, NBF Estimates 1) Projected annual gold production during first five full years of mine life as per the Updated Feasibility Study 16 NYSE-MKT, TSX: NG
  17. 17. RESERVE BURN RATELarge Development Projects are Needed to Maintain Current Production Levels 30 26 25 Large deposits 21 rapidly depleting 20 20 reserves 18 16 The industry 15 Years 15 15 needs large mines to sustain production levels 10 5 0 NOVAGOLD Goldfields Kinross Goldcorp Anglogold Ashanti Newmont Barrick 2011 Attributable Recoverable 17.2 70.0 47.7 45.4 67.9 79.3 114.6 P&P Reserves (Moz.) 2011 Attributable Annual 0.7 3.3 2.4 2.5 4.3 5.2 7.7 Production (Moz.) Note: Based on public filings and websites. Annual production figures represent 2011 annual production for public peers and steady-state production estimate for Donlin Gold as per the most recent Updated Feasibility Study. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. 17 NYSE-MKT, TSX: NG
  18. 18. DONLIN GOLD: POISED TO BE WORLD’S BIGGEST GOLD MINEExpected Production Rivals 10 Largest Existing Gold Mines 1.60 1 1.50 1.44 1.42 1.40 1.29 1.20 1.09 Gold (M/oz) 1.10 2 1.00 0.96 0.83 0.79 0.79 0.80 0.76 0.74 0.60 0.40 0.20 0.00 Donlin Gold Grasberg Mine Cortez Yanacocha Goldstrike Veladero Vaal River The Super Pit West Wits Lagunas Norte Boddington SOUTH SOUTH LOCATION: USA INDONESIA USA PERU USA ARGENTINA AUSTRALIA PERU AUSTRALIA AFRICA AFRICA Source: Cole Latimer, “World’s ten biggest gold mines – three mining majors dominate list,” Australian Mining, Mineweb, August 13, 2012. A listing of the worlds ten largest gold mines by gold output according to 2011 production figures. 1) Projected annual gold production during first five full years of mine life as per the Updated Feasibility Study. 2) Projected annual gold production during full life of mine as per the Updated Feasibility Study. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. 18 NYSE-MKT, TSX: NG
  19. 19. DONLIN GOLDProjected to be Among the Low Cost Producers First Five Years Cash Costs Life of Mine Cash Costs Area US$/oz Area US$/oz Open-pit mining1 133 Open-pit mining1 228 Processing 208 Processing 257 G&A, Royalties, land & 68 G&A, Royalties, land & 100 other2 other2 Total $409 Total $585 ▸ First 5 full years of production at cash cost of US$409/oz, accelerating payback ▸ Processing costs include power generation and natural gas delivery ▸ Industry average 2012E cash cost is US$673/oz3 Source: Updated Feasibility Study 1) Net of deferred costs 2) Based on US$1,200/oz gold price and an exchange rate of $1.10 CAD/USD Source: Metals Economics Group, Company Reports, RBC Research Estimates 3) Based on 168 primary gold mines with aggregate 2011 production of ~29Moz Au 19 NYSE-MKT, TSX: NG
  20. 20. DONLIN GOLD IS EXPECTED TO GENERATE SUBSTANTIAL CASH FLOWSSignificant Leverage to Gold & Fast Payback at a Broad Range of Gold Prices All Amounts in US Dollars $30,000 $26,803 $25,000 Cumulative Net Cash Flow (US$ millions) Net Cash Flow (millions) $20,000 Rich Ore Body With a 27-Year Mine Life and Extensive Exploration Upside $19,075 ~4.5x $15,000 $14,444 leverage $11,459 $10,000 $6,025 $5,000 $0 ($5,000) ($10,000) 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 37 38 39 40 41 42 43 44 45 46 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 $1,200/oz Au $1,500/oz Au $1,700/oz Au $2,000/oz Au $2,500/oz Au Source: Updated Feasibility Study 20 NYSE-MKT, TSX: NG
  21. 21. DONLIN GOLD HAS EXCEPTIONAL LEVERAGE TO GOLDNPV Increases ~20x with ~2x Increase in Gold Price All amounts in US dollars 30,000 $27.0B 25,000 NPV (US$ millions) 20,000 $19.2B $14.6B 15,000 10,000 $6.2B 5,000 0 $1,200 $1,700 $2,000 $2,500 Gold Price NPV at 5% NPV at 0% Source: 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 1/1/2014 are treated as sunk costs. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. 21 NYSE-MKT, TSX: NG
  22. 22. THE RIGHT LOCATION – ALASKARight Project, Location & Stakeholders Should Lead to Orderly Permitting ▸ Alaska is the second largest U.S. gold-producing State ▸ Five major gold producing mines and counting ▸ Natural resource projects integral to the State’s economy ▸ Strong commitment to responsible mining ▸ Donlin Gold has no proximity to major population areas; located on private land designated for mining ▸ Strong and time-tested community support 22 NYSE-MKT, TSX: NG
  23. 23. THE RIGHT STAKEHOLDERSJurisdictional Safety is More Than Geographic LocationGreat Partners “Calista supports responsible resource development…The Donlin Gold project▸Calista Corporation presents us with an opportunity for▸The Kuskokwim Corporation tremendous economic potential right in▸50/50 joint-ownership with Barrick Gold our Region.” – June MacAtee, Calista Corporation VP 23 NYSE-MKT, TSX: NG
  24. 24. CONVENTIONAL MINING AND MILLING PROCESSWell Tested and Available Technology 24 NYSE-MKT, TSX: NG
  25. 25. DONLIN GOLD: STANDARD TECHNOLOGYWell Established Mining and Mineral Processing Methodology Donlin Gold Pueblo Viejo Capital Expenditures US$6.7B1 ~US$4.0B2 Location Alaska, US Sanchez Ramirez, Dominican Republic Mining Method Open Pit Open Pit Project Status Permitting Start up Total M&I Resources 39.0 Moz 36.3 Moz (inclusive of reserves) Nameplate 53,500 24,000 Design Throughput (tpd) M&I Grade (g/t) 2.24 2.41 Expected Average Annual Production 1,500,000 3 1,042,000 – 1,125,000 3 (oz) Processing Method Flotation/Autoclaving/Leaching Autoclave/Leaching/Ag/Cu Number of Autoclaves 2 medium 4 large Key Infrastructure Natural gas pipeline/Power plant Power plant/Oxygen plant Oxygen plant Lime Kilm Mine Life 27 years 25 yearsSource: Updated Feasibility Study, company documents, public filings and websites. 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) Capital expenditure shown on a 100% project basis2) Capital expenditure of US$3.7B disclosed in Barrick Gold’s press release dated 01/15/13, plus a net incremental cost of approximately $300M for the power plant3) Production expected for first full five years of operation 25 NYSE-MKT, TSX: NG
  26. 26. DONLIN GOLDWell Positioned to Reduce Capex by Sharing Upfront Costs with Third PartiesAreas US$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 26 NYSE-MKT, TSX: NG
  27. 27. DONLIN GOLDRobust Contingency Represents 25% of Hard Assets Potential Capex Reduction from $6.7B1 to $5.7B (amounts in US dollars) ~$1B in Contingency is a Reflection of the Conservative Nature of the Updated Feasibility Study Surface/Mill3 $1.2B Capital Expenditures $4.7B Utilities2 $2.6B Owners Cost $414M Contingency $984M Indirect $1.4B Capital Expenditures Reduction Opportunities Include: Opportunities - Third-party built gas pipeline ~$1.0B Contingency - Third-party built oxygen plant $984M - Leasing mining equipment1) Represents 100% of capital expenditures to be shared equally with co-owners Barrick Gold Corporation2) Utilities include process facilities (ie: oxygen plant) and utilities (ie: gas pipeline)3) Surface/Mill: Mining, site preparation, roads, tailings, ancillary buildings and off-site facilities 27 NYSE-MKT, TSX: NG
  28. 28. 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 28 NYSE-MKT, TSX: NG
  29. 29. GALORE CREEKProjected to be Largest Copper Mine in a Mining-Friendly Jurisdiction, Canada Location BC, Canada Mining Method Open Pit Owners 50/50 (NG/TCK) P&P Copper 6.8 Blb 0.6% Reserves 1, 2 Gold 5.45 Moz 0.32 g/t Silver 102 Moz 6.0 g/t M&I Resources1, 3 Copper 8.9 Blb 0.5% Gold 8.0 Moz 0.3 g/t Silver 136 Moz 5.2 g/t▸ 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▸ NPV of $837M (pre-tax) using base case metal price assumptions 4 and $4.1B (pre-tax) in current commodity price environment51) See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix.2) P&P: Proven and Probable reserves3) M&I: Measured and Indicated resources inclusive of Proven and Probable reserves4) Galore Creek 2011 PFS estimated net present value (NPV7%) base case at US$2.65/lb copper, US$1,100/oz gold and US$18.50/oz silver with a foreign exchange rate of US$0.91 = Cdn$1.005) Current commodity price environment assuming US$3.50/lb copper, US$1,600/oz gold and US$30/oz silver and keeping the exchange rate the same as in the Galore Creek 2011 PFS 29 NYSE-MKT, TSX: NG
  30. 30. GALORE CREEK2012 Drilling Program Extended Mineralization Substantially Beyond Pit Limit ▸ Completed 27,873 meter drilling program expected to result in increased resources and provide further support for future mine design ▸ Significant intercepts, including 86 meters grading 1.31%Cu and 0.46g/t Au, lead to the discovery of the new Legacy zone, a 700 -meter long mineralized zone, currently open in all directions and adjacent to the Central Pit1 1) Source: NOVAGOLD press release, NOVAGOLD Reports Discovery of 700 Meter Legacy Zone at Galore Creek Mineralization is Extended Substantially beyond the Pit Limits, dated 25/2/13. 30 NYSE-MKT, TSX: NG
  31. 31. GALORE CREEKWell Positioned to Update Resource Model and Improve Overall Economics▸ 2013 work and exploration budget $8 million (50%) ▸ Update resource model with 2012 drill results ▸ Drilling to define the extent of the Legacy mineralization, and assess its impact to future mine design.▸ NOVAGOLD continues to enhance the value of Galore Creek through exploration and technical studies on a reduced budget 31 NYSE-MKT, TSX: NG
  32. 32. NOVAGOLD’S FUTURE FINANCIAL OBLIGATIONS HAVE DECREASEDSUBSTANTIALLYClear Focus Begins with Strong Funding to Execute on All Fronts Highlights: 140.0 Lower Spending $5 ▸ $253M in cash and cash equivalents1 120.0 ▸ $54M additional proceeds received $21 from warrant exercise Q1-2013 100.0 68 % US$ (Millions) ▸ $95M cash available for convertible Reduction notes2 80.0 $44 2013: 60.0 ▸ Donlin Gold US$30M (100% ) $16 $3 lower costs with commencement of 40.0 permitting $18 $8 $15 ▸ Galore Creek C$16M (100%) 20.0 $24 expenditures significantly lower $15 - ▸ G&A $15M reduced due to 1 2012 Spending 2 2013 Budget3 reorganization 4 1) Cash and cash equivalents as of November 30, 2012 Donlin Gold G&A and Miscellaneous Interest 2) The Notes mature on May 1, 2015. The holders of the Notes have the right to require the Company to repurchase all or part of their Notes on May 1, 2013 (“put option”) NovaCopper Galore Creek Rock Creek 3) 2013 anticipated budget expenditure disclosed on February 12, 2013 4) Assuming full repayment of US$95M in convertible notes 32 NYSE-MKT, TSX: NG
  33. 33. 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 33 NYSE-MKT, TSX: NG
  34. 34. WHY IS NOVAGOLD A BUY TODAY?NG is a Very Well Managed, Strongly Sponsored Way to Gain Extraordinary Leverage to aRising Gold Price in a Safe Country Where you Can Keep the Fruits of that Leverage KEY FORESEEABLE CATALYSTS THE MICRO VIEW THE MACRO VIEW Pending De-Risking of Donlin Gold Right Place at The Right TimeOrderly Permitting Process Jurisdictional Safety• Uniform Transparent Step-by-Step Process • Alaska is 2nd Largest Gold Producer in the US• Strong Support from Native Corporations • Support for Environmentally & Socially Responsible MiningOpportunity for Financial Optimization Strong Leverage to Gold• Third-party Participation should Reduce Capex • Major Increase in NAV with Higher Au Price• $1 Billion Contingency is Robust • Long-life Asset in a Stable Jurisdiction should Yield Sustainable Investor Returns in a Secular Bull MarketStable Share Dynamics Long-Term Option on Gold• Strong Shareholder Support • Projected to be the World’s Largest Gold Mine• No Need to Raise Capital for Years • Significant Exploration Potential should Add Decades to the Mine-Life 34 NYSE-MKT, TSX: NG
  36. 36. SHARE CAPITALIZATION Issued and Options Fully outstanding diluted1 316.6M 16.8M 333.4M As of January 30, 2013. 1) Fully diluted number excludes convertible notes. The Convertible notes (“Notes”) - The holders of the Notes have the right to require the Company to repurchase all or part of their Notes on May 1, 2013 and upon certain fundamental corporate changes at a price equal to 100% of the principal amount of such Notes plus any accrued and unpaid interest. 36 NYSE-MKT, TSX: NG
  37. 37. RISING GOLD DEMAND ACROSS ALL SECTORSA Once Concentrated Global Demand is Now Diversified Source: Bloomberg, CPM Group, LBMA, World Gold Council 37 NYSE-MKT, TSX: NG
  38. 38. GOLD SIGNIFICANTLY UNDERINVESTEDInvestor Gold Holdings Among World Financial Assets Are Negligible US$ Trillion $250 200 150 100 50 0 80 90 95 00 01 02 03 04 05 06 07 08 09 10 11e Bank Deposits Government Debt Securities Private Debt Securities Equity Securities Investor Gold Holdings World Financial Assets Including Gold, May 2012 Source: McKinsey & Co., IMF, CPM Group 38 NYSE-MKT, TSX: NG
  39. 39. DOW JONES INDUSTRIAL AVERAGE TO GOLD PRICE RATIO SINCE 1900A New Super Cycle in Gold is Imminent 45.0 40.0 2000; 38.42 35.0 30.0 1965; 25.93 25.0Arithmetic ScaleDow/Gold Ratio 20.0 1929; 15.15 15.0 10.0 5.0 2012; 7.69 1934; 2.83 1980; 1.45 - Year Source: Dow Jones Industrial Average (DJIA): Federal Reserve Bank of St. Louis, Historical Gold Prices: The National Mining Association (NMA), Gold prices are based on annual prices on first trading day of each year 2012 as of 09/21/2012 (last data point) 39 NYSE-MKT, TSX: NG
  40. 40. UNCONVENTIONAL MONETARY POLICY DRIVE INVESTMENT INTO GOLDFour Key Factors Why One Should Invest in Gold ▸ Inflation risk: Increase in money printing could be a catalyst for higher inflation in the future, a likely positive for gold investment ▸ Weakened currency: Gold is typically transacted using its US-dollar price as a reference, gold provides a hedge against domestic currency debasement ▸ Crisis and sharp market pull backs: During these times, gold has proven to be an effective diversifier acting as a hedge against falls in equity and credit markets ▸ Low interest rate environment: Households must save greater sums of money to pay obligations, causing a shift into investments in real assets that will provide long-term security Source: World Gold Council 40 NYSE-MKT, TSX: NG
  41. 41. PROJECT OVERVIEWAdvancing Donlin Gold Up the Value Chain ▸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 ▸40 full-time employees and 32 contractors ▸Strong track record for local hiring 41 NYSE-MKT, TSX: NG
  42. 42. PROJECT HIGHLIGHTSDonlin Gold Slated to be a State-of-the-Art Significant Mine Reserves: 33.9 Moz Au (~500M tons ore)1 Resources: 5.1 M&I Moz (excluding P&P) and 6.0 Inferred Moz1 Mine Life: ~27 years Production: Year 1-5 – 1.5 Moz/year, LOM – 1.1 Moz/year Operation: Open-pit, conventional truck & shovel Milling: 59k short tons/day, sulfide flotation, pressure oxidation (POX), Carbon-in-Leach recovery (CIL) Strip ratio: ~5.5:1 = ~3B tons waste rock Tailings: Fully lined storage facility Power: ~150MW, supplied by 313-mile, natural-gas pipeline Logistics: All consumables supplied by Kuskokwim River transportation system with port near Jungjuk Creek 1) See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve and Resource Base” table with footnotes. 42 NYSE-MKT, TSX: NG
  43. 43. ENSURING A SMOOTH PERMITTING PROCESSA Team with Strength, Knowledge, Experience and Understanding Strength • Alaska has a rigorous and clearly defined permitting process • Good reputation and local support Knowledge • Early project briefings and open communication with regulatory agencies • Consistent communication with and input from local communities throughout the region • Strive for “responsible development,” bringing benefits and positive impacts to the region Experience • One of the most robust environmental baseline databases • Strong support and NEPA experience from Barrick Gold and NOVAGOLD • Team in place that has “been there, done that” in Alaska and throughout the U.S. Understanding • Based in Alaska, with comprehensive understanding of State’s issues and concerns • Integration of permitting requirements in formulating project design concepts • Deep roots in the State and community with more than 16 years on the ground at Donlin Gold 43 NYSE-MKT, TSX: NG
  44. 44. SITE LAYOUTThe Property Lends Itself Well to Compact Project Layout 44 NYSE-MKT, TSX: NG
  45. 45. DONLIN GOLD TIMELINESmall Percentage Of Time Invested Considering Mine Life Measured In Decades Exploration, Key Permitting Construction Production Responsibilities Environmental Highlights: State: Air, Water, ▸ ~1.5 million Studies, ▸ Two open pits Dam Safety, ounces/year Engineering, ▸ Pressure oxidation plant for first 5 years, Waste Management, Feasibility Reclamation Plan ▸ Milling circuit followed by Studies Approval, Rights of Way, ▸ 27-mile road ▸ ~1 million Cultural Resources ▸ 5,000-foot runway ounces/year Federal: Wetlands, ▸ Two port facilities Rights of Way, ▸ 600-bed permanent camp 27 year Wildlife Consultations, ▸ 2,500-bed construction camp mine life Environmental Impact ▸ ~40-million gallon diesel storage Statement 45 NYSE-MKT, TSX: NG
  46. 46. DONLIN GOLD PERMITTING PROCESSClear Steps Outlined and Good Working Relationship at State & Federal Levels Permitting Process is Approximately 3-4 years State Federal AK Department of AK Department of US Army Corps Bureau of Land Agencies Environmental Natural Resources of Engineers Management AK Department of Fish & Game US Fish and US Environmental Wildlife Service Protection Agency Reclamation Air Quality National Marine Fisheries ServicePermits/Approvals Waste Pipeline Management Right of Way Wetlands Fish Habitat Water Discharge Essential Fish Habitat Marine Mammal Protection 46 NYSE-MKT, TSX: NG
  47. 47. DONLIN GOLD KEY PERFORMANCE INDICATORSRobust Economics Highly Leveraged to Gold Prices All amounts in US dollars Gold Price Unit $1,000/oz $1,200/oz $1,700/oz $2,000/oz $2,500/oz Base CaseAverage annual $M 670 950 1,500 1,785 2,185after-tax cash flow(first full five years)Average annual $M 350 500 815 990 1,275after-tax cash flow (LOM)NPV (5%) after-tax1 $M (1,340) 550 4,580 6,720 10,240NPV (0%) after-tax1 $M 2,100 6,200 14,620 19,250 26,975IRR after-tax1 % 2.3 6.0 12.3 15.1 19.1Payback period Years 19.1 9.2 5.3 4.4 3.5Source: 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 dateare treated as sunk costs. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix.1) NPVs and IRRs as at January 1, 2014. Project development costs prior to that date are treated as sunk costs. 47 NYSE-MKT, TSX: NG
  48. 48. NOVAGOLD BOARD OF DIRECTORS Dr. Thomas S. Kaplan Chairman and CEO of The Electrum Group LLC, a privately held natural resources Chairman investor that controls a diversified portfolio of precious and base metals assets Former Chief Legal Officer and Corporate Secretary with Franco-Nevada, transforming an Sharon Dowdall industry pioneer into one of the most successful precious metals enterprises in the world Publishes a monthly investment newsletter entitled The Gloom, Boom & Doom Dr. Marc Faber Report and is the author of several book Executive VP and CFO of Kinross Gold Corporation, former CFO of Capstone Mining Tony Giardini Corp. COO and Director of Sunward Resources, former Senior Vice President and Chief Gil Leathley Operating Officer of the Company President of The Electrum Group LLC, former VP of Homestake Mining and International Igor Levental 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 Former President and Chief Executive Officer of Miramar Mining Corporation, which in Anthony P. Walsh 2007 was sold to Newmont Mining Company. 48 NYSE-MKT, TSX: NG
  49. 49. DONLIN GOLD MANAGEMENT TEAM 30+ years mining industry experience in exploration, mine geology, operations management, project managementStanley Foo and permitting; 12 years mine operations experience in NV including superintendent roles at Cortez and Bald;President/General 15 years in Alaska in project management and permitting; Previous Project Manager roles with Donlin 1997-99,Manager 2005-2007, served on DGLLC board 2008-2010.James Fueg Led Donlin Gold’s recent feasibility studies and coordinates all engineering and technical work for project;Study Manager 20+ years experience in mining, exploration and environmental science; 16 years in Alaska; on Donlin since 2004. 30 years experience in mining industry; 16 years in Alaska, with Donlin and TeckCominco (Pogo and Red Dog);Bill Bieber Recipient of Barrick’s long-term CSR achievement award for his work at Donlin in workforce development andOperations Manager community relations.Robert Nick Enos Leads permitting and environmental management for project; primary contact for reg. agencies; 20 yearsEnvironmental and experience in Alaska in geology, environmental science and permitting management; Previous experiencePermitting Manager includes Greens Creek, Calista Corp., as environmental/permitting consultant; Joined Donlin in 2005. Leads Donlin Gold’s community affairs, communications, government relations and corporate social responsibilityKurt Parkan functions; Nearly 30 years public affairs experience in Alaska; Previous roles: External Affairs Director of NatureExternal Affairs Conservancy of Alaska, Deputy Commissioner for Alaska Department of Transportation and Public Facilities,Manager Special Assistant to the Governor, Legislative Aide and as staff for Alaska House of Representatives Finance Committee. 22 years human resources experience in the mining industry including 17 years in Alaska; Served in variousMeg Day senior management positions in Alaska, Utah and Washington and has been involved in the start up of severalHuman Resources mines. Serves on Alaska Miners Association HR Committee, Society of HR Management and Advisory BoardManager member of University of Alaska.Jan Halstead 25+ years accounting and financial analysis experience in construction, investment, telecommunications;Administrative and Responsible for growth and development of Accounting, Administration, Purchasing and Contract functions forFinance Manager Donlin Gold LLC. 49 NYSE-MKT, TSX: NG