Novagold Resources Inc. · AMEX:NG
Novagold Resources — 2018 B. Riley FBR Investor Conference
42 slides from Novagold Resources's conference presentation, May 23, 2018
Slide 1: 2018 B. Riley FBR Investor Conference, Santa Monica
TSX, NYSE American: NG | novagold.com | May 23, 2018 2018 B.RILEY FBR INVESTOR CONFERENCE, SANTA MONICA
Slide 2: Cautionary Statements Regarding Forward-Looking Statements
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS This presentation includes certain “forward-looking information” and “forward-looking statements” (collectively “forward-looking statements”) within the meaning of applicable securities legislation, including the United States Private Securi
Slide 3: Gold: High Quality Assets with Scale Are Key for Declining Production
GOLD: HIGH QUALITY GOLD ASSETS WITH SCALE ARE KEY FOR INDUSTRY’S DECLINING PRODUCTION, DISCOVERIES AND GRADES DONLIN GOLD’S SIZE AND HIGH GRADE PROVIDES RESILIENCE THROUGH MULTIPLE CYCLES AS A LOW COST PRODUCER Increased Production Has Depleted Resources: Global Gold Mine Production Mine supply is s
Slide 4: Gold: Assets in Safe Locations Will Be Coveted
GOLD: ASSETS IN SAFE LOCATIONS WILL BE COVETED IN AN ENVIRONMENT OF RISING JURISDICTIONAL RISK AND COSTS ALASKA IS A GREAT PLACE TO DEVELOP DONLIN GOLD, A PROJECT WITH SCALE, QUALITY AND OPPORTUNITIES TO GROW Central Bank Changes in Gold Holdings: reduced o Global gold exploration budget rose for fi
Slide 5: Gold Remains in a Secular Bull Market
GOLD REMAINS IN A SECULAR BULL MARKET SINCE 2000 THE PRICE OF GOLD HAS INCREASED APPROXIMATELY FIVEFOLD o Bridgewater Associates LP’s Ray Dalio suggested in August that investors should hold 5-10 percent of their portfolios in gold to hedge against rising political risks. IS GOLD REALLY AN EFFECTIVE
Slide 6: Gold: World's Largest Producers Quickly Depleting Their Reserves
GOLD: WORLD’S LARGEST PRODUCERS QUICKLY DEPLETING THEIR RESERVES LARGE HIGH QUALITY PROJECTS SUCH AS DONLIN GOLD ARE NEEDED TO REPLENISH DEPLETING RESERVES Total Reserves for 20 of the World’s Largest Gold Producers (2012-2016) 800 697 700 638 600 585 554 536 500 (Moz) 400 300 200 100 0 2012 2013 20
Slide 7: What Makes NOVAGOLD Unique?
WHAT MAKES NOVAGOLD UNIQUE? A DEVELOPMENT-STAGE COMPANY WITH TWO PROJECTS OF EXCEPTIONAL SCALE, QUALITY, AND JURISDICTIONAL SAFETY DONLIN GOLD 50/50 with Barrick Poised to be one of the largest gold producers in the world Approx. 280 miles west of Anchorage GALORE CREEK 50/50 with Teck Potential to
Slide 8: Donlin Gold: The Right Project
DONLIN GOLD: THE RIGHT PROJECT ARGUABLY THE MOST IMPORTANT DEVELOPMENT-STAGE GOLD PROJECT IN THE WORLD LONGEVITY 27-year mine life; strong leverage to gold price JURISDICTION Located in Alaska, one of the truly safe mining jurisdictions PARTNERSHIPS Strong partnerships with local stakeholders GROWTH
Slide 9: Development Projects the Size of Donlin Gold Are Scarce
DEVELOPMENT PROJECTS THE SIZE OF DONLIN GOLD ARE SCARCE A RESOURCE FOUR TIMES THE SIZE OF THE PEER GROUP AVERAGE 60 50 49.2 9 0.52 39.0 39 40 g/t M&I Gold Resource (millions of ounces) Moz1 Moz 2.24 30 g/t Donlin Gold1 Peer Group Average2 20 18.8 0.52 g/t 11.5 9.5 10 8.0 8.0 0.68 7.4 6.7 6.5 g/t 0.7
Slide 10: High Quality Deposit with Double the Industry Average Grade
DONLIN GOLD: HIGH QUALITY DEPOSIT WITH DOUBLE THE INDUSTRY AVERAGE GRADE AMONG THE WORLD’S HIGHEST-GRADE OPEN PIT GOLD DEPOSITS Donlin Gold Average Grade1 World Average Grade2 2.24 g/t 1.13 g/t While industry average grades are declining, Donlin Gold’s grade provides resilience through commodity pri
Slide 11: Expected to Be One of the Industry's Top Producing Assets
DONLIN GOLD: EXPECTED TO BE ONE OF THE INDUSTRY’S TOP PRODUCING ASSETS POISED TO BECOME A MILLION OUNCE GOLD PRODUCER 1.60 1.40 1.501 1.20 Donlin Gold’s size, grade, and projected 1.1 Moz2 0.3 Moz Projected Annual Gold Production (millions of ounces) production profile Donlin Gold’s North and South
Slide 12: Top Ten Gold Producing Mine Comparison
DONLIN GOLD: ONLY UNDEVELOPED ASSET IN THIS CATEGORY IN NORTH AMERICA 2017 TOP TEN GOLD PRODUCING MINE COMPARISON ONLY SEVEN MINES IN THE WORLD SLATED TO PRODUCE >1M OUNCES A YEAR 39.0Moz Donlin Gold 31.6Moz Olimpiada 48.2Moz 10.0Moz 12.0Moz Muruntau Goldstrike Cortez 46.4Moz Lihir Island 25.5Moz Pu
Slide 13: Donlin Gold: Excellent Exploration Potential
DONLIN GOLD: EXCELLENT EXPLORATION POTENTIAL MULTIPLE DRILL PROSPECTS EXIST ALONG THE 8 KM GOLD MINERALIZED TREND The next big gold discovery may be at Donlin Gold: o Donlin Gold’s resource was defined with nearly 1,400 drill holes, totaling over 339,000 meters o From 2006 to 2011, M&I resources inc
Slide 14: Donlin Gold: 2017 Drill Program Highlights
DONLIN GOLD: 2017 DRILL PROGRAM HIGHLIGHTS EXCELLENT RESULTS - MINERALIZED INTERCEPTS ENCOUNTERED HIGHER GRADES THAN PREDICTED BY PREVIOUS MODELING Top Five Significant Intervals1 DC17-1821 130.5 meters grading 5.93 g/t gold, starting at 205.0 meters depth DC17-1821 39.0 meters grading 9.34 g/t gold
Slide 15: Private Land Designated for Mining
DONLIN GOLD: PRIVATE LAND DESIGNATED FOR MINING TOPOGRAPHY AMENABLE TO SITE DEVELOPMENT Lewis Deposit ACMA Deposit 15
Slide 16: Donlin Gold: Project Optimization Efforts
DONLIN GOLD: PROJECT OPTIMIZATION EFFORTS LAYING THE GROUNDWORK FOR 2018 AND BEYOND Latest drill results provide valuable inputs to advance optimization work o A total of 16 core holes were completed (7,040 m) and core samples assayed o Intercepted distinct significant high-grade zones in multiple a
Slide 17: Significant Value Upside with Higher Gold Prices
DONLIN GOLD: SIGNIFICANT VALUE UPSIDE WITH HIGHER GOLD PRICES NPV5 INCREASES ~20X WITH ~2X INCREASE IN GOLD PRICE Net Present Value (NPV) (US$ in Billions) NPV at 0% NPV at 5% $27.0B $2,500 $19.2B $2,000 • Project has a positive return that increases substantially with higher gold prices $1,700 $14.
Slide 18: Life of Mine Agreements with Alaska Native Corporations
DONLIN GOLD: LIFE OF MINE AGREEMENTS WITH ALASKA NATIVE CORPORATIONS TIME-HONORED RELATIONSHIPS WITH STAKEHOLDERS o Donlin Gold is located on private land specifically selected for its resource development potential • ANCSA1 established over 45 years ago; resolved Alaska Native land claims • Lands v
Slide 19: Stakeholder Support Quotes
Maver Carey President & CEO, The Kuskokwim Corporation “As a mine that focuses on environmental responsibility, meaningful dialogue with communities, job opportunities, and economic stimulus for one of the poorest regions in the entire state, Donlin Gold has TKC’s full support.” “Ultimately, economi
Slide 20: Leverage in a Place Where You Can Keep the Rewards
DONLIN GOLD: LEVERAGE IN A PLACE WHERE YOU CAN KEEP THE REWARDS AT A TIME OF EXTREME GEOPOLITICAL UNCERTAINTY, ALASKA IS WELCOMING NEW RESPONSIBLE DEVELOPMENT DONLIN GOLD is a very rare 39 million ounce deposit located in Alaska – a safe jurisdiction and the second largest gold producing U.S. State.
Slide 21: Project Permitting Is on Track
DONLIN GOLD: PROJECT PERMITTING IS ON TRACK THE CORPS RELEASED THE FINAL ENVIRONMENTAL IMPACT STATEMENT DEVELOPMENT TIMELINE: 16 years ̴6 4-6 27+ years 1.5 ENVIRONMENTAL STUDIES Moz/year first five full years1 EXPLORATION & ENGINEERING & CONSTRUCTION PERMITTING OPERATION 1.1 Moz/year life of mine1 C
Slide 22: Final EIS Milestone Quote
“The publication of the final EIS is an important milestone for Donlin Gold and reflects a high degree of professionalism and teamwork by the entire project team. The project partners share common values that include technical innovation, financial discipline, a deep commitment to safety and environ
Slide 23: A Thorough, Transparent, and Established Environmental Review Process
DONLIN GOLD: A THOROUGH, TRANSPARENT, AND ESTABLISHED ENVIRONMENTAL REVIEW PROCESS SUPPORTING THE CORPS IN COMPLETING THE EIS PROCESS AND ISSUING A RECORD OF DECISION WHILE WORKING WITH ALASKA TO SECURE STATE PERMITS National Environmental Policy Act (NEPA) review completed – supports agency decisio
Slide 24: Alaska Governor Statement on Final EIS
“This is great news for Alaska, a major step toward development of a gold mine that would bring jobs to the Yukon-Kuskokwim region and help utilize Alaska’s vast natural resources. The Donlin Gold project still has a long way to go in the permitting process before construction and operations can beg
Slide 25: Donlin Gold: Upcoming Catalysts
DONLIN GOLD: UPCOMING CATALYSTS NEXT STEPS IN DONLIN GOLD’S DEVELOPMENT Integrate drill program results into resource model Determine best path forward based on updated study & prevailing market conditions Solidify execution plan Constructi on technical construction decision financing permitting & o
Slide 26: Galore Creek: A Significant Copper-Gold-Silver Asset
GALORE CREEK: A SIGNIFICANT COPPER-GOLD-SILVER ASSET MEASURED & INDICATED RESOURCES1 9Blbs 1 COPPER Grade: 0.50% Potential to be one of the largest, highest-quality, GOLD 8 Moz1 Grade: 0.31g/t lowest-cost copper producers in Canada. SILVER 136 Moz1 Grade: 5.21g/t 1) Galore Creek project estimates as
Slide 27: Galore Creek: Significant Upside Potential with Higher Copper Prices
GALORE CREEK: SIGNIFICANT UPSIDE POTENTIAL WITH HIGHER COPPER PRICES PROJECT HAS POSITIVE RETURNS THAT INCREASE SIGNIFICANTLY WITH RISING COPPER PRICES Net Present Value (NPV) (US$ in Billions) NPV at 5% NPV at 7% $3.5B $4.00 $3.1B $3.75 $2.6B $3.50 A significant copper-gold-silver asset in Canada:
Slide 28: Clear Focus and Strong Funding to Execute on All Fronts
NOVAGOLD: CLEAR FOCUS AND STRONG FUNDING TO EXECUTE ON ALL FRONTS SUFFICIENT CASH ON HAND TO COMPLETE DONLIN GOLD PERMITTING ($ MILLIONS) 2018 Budget $ 14M Donlin Gold ($9M permitting, $5M optimization work) 28.0M $ 3M Galore Creek $ 11M G&A, working capital and other 24.7M Yearly Average Annual Spe
Slide 29: Top Institutional Shareholders
TOP INSTITUTIONAL SHAREHOLDERS 53% OF SHARES ISSUED & OUTSTANDING HELD BY SIX LARGEST SHAREHOLDERS2 Electrum Strategic 26.2% Resources LP & affiliates Fidelity Management & 7.5% Research Company 6.8% Paulson & Co. Inc. $ 1.5 Market Cap1 B 5.7% Van Eck Associates Corporation 4.2% The Baupost Group, L
Slide 30: The NOVAGOLD Opportunity
THE NOVAGOLD OPPORTUNITY SAFE GEO-POLITICAL STRONG BALANCE SHEET ENVIRONMENT $77M cash + term deposits Alaska and British Columbia, as of February 28, 2018 top-rated mining jurisdictions TOP TIER ASSETS ACCOMPLISHED Donlin Gold – large, high-grade deposit well LEADERSHIP TEAM advanced in permitting;
Slide 31: Appendix
APPENDIX
Slide 32: Donlin Gold: Project Highlights
DONLIN GOLD: PROJECT HIGHLIGHTS POISED TO BE ONE OF THE LARGEST GOLD PRODUCERS IN THE WORLD Reserves: 33.9 Moz Au (505M tonnes grading 2.09 g/t)1 Resources: 39.0 Moz M&I (541M tonnes grading 2.24 g/t, inclusive of reserves) and 6.0 Moz Inferred (92 M tonnes grading 2.02 g/t)1 Mine Life: ~27 years Pr
Slide 33: Galore Creek: Project Highlights
GALORE CREEK: PROJECT HIGHLIGHTS POTENTIAL TO BE ONE OF CANADA'S LARGEST COPPER MINES Reserves: 6.8 Blb Cu; 5.5 Moz Au; 102 Moz Ag (528M tonnes grading 0.59% Cu, 0.32 g/t Au, 6.02 g/t Ag)1 Resources: 8.9 Blb Cu; 8.0 Moz Au; 136 Moz Ag (815M tonnes grading 0.50% Cu, 0.31 g/t Au, 5.21 g/t Ag, inclusiv
Slide 34: Donlin Gold: Other Permit Applications
DONLIN GOLD: OTHER PERMIT APPLICATIONS NEARLY 100 PERMITS ARE REQUIRED Major federal permits or reviews o CWA Section 404/RHA Section 10 (USACE) – Record of Decision (ROD) in second half of 2018 o Rights of Way (BLM) – ROD in second half of 2018 o Pipeline Special Permit (PHMSA) – Public Notice Comp
Slide 35: Alaska's Mining Industry
ALASKA’S MINING INDUSTRY MINING IS A GROWING FORCE IN ALASKA’S ECONOMY WITH SIX PRODUCING MINES AND NINE ADVANCED EXPLORATION PROJECTS Producing Mines: (Pb/Zn) Fort Knox Kinross Gold Corp Red Dog (Au) Teck Resources Limited (Au) (Coal) Greens Creek Hecla Mining Company Kensington Coeur Mining Inc (A
Slide 36: Expected to Provide Three Decades of Low Cost Production
DONLIN GOLD: EXPECTED TO PROVIDE THREE DECADES OF LOW COST PRODUCTION LOW OPERATING CASH COSTS AND ALL-IN SUSTAINING COSTS FIRST FIVE YEARS LIFE OF MINE Cash Costs1 Per Ounce Cash Costs1 Per Ounce Open-pit mining2 133 Open-pit mining2 270 Processing 208 Processing 257 G&A, royalties, land & other3 7
Slide 37: NOVAGOLD: Company History Highlights
NOVAGOLD: COMPANY HISTORY HIGHLIGHTS THE GOLD DEVELOPMENT COMPANY FOR THE 21ST CENTURY o 1984 incorporated in Nova Scotia – Gerald McConnell as CEO leads exploration company initially focused on gold properties in Nova Scotia, later exploration expands throughout the Americas o 1998 Rick Van Nieuwen
Slide 38: NOVAGOLD: The Board of Directors
NOVAGOLD: THE BOARD OF DIRECTORS INDUSTRY LEADERS TO BRING DONLIN GOLD THROUGH PERMITTING & BEYOND Dr. Thomas Kaplan • Chairman and CEO of The Electrum Group LLC, a privately held natural resources investment Chairman management company that controls a diversified portfolio of precious and base meta
Slide 39: NOVAGOLD: The Management Team
NOVAGOLD: THE MANAGEMENT TEAM INDUSTRY LEADERS TO BRING DONLIN GOLD THROUGH PERMITTING & BEYOND • Former President of Barrick Gold North America Gregory Lang • 35+ years experience building & operating major open-pit and underground mines (Goldstrike, President and CEO Cortez, Turquoise Ridge, Bald
Slide 40: NOVAGOLD: Reserve/Resource Table
NOVAGOLD: RESERVE/RESOURCE TABLE Donlin Gold* Tonnage (100%) Grade (100%) Metal (100%) NOVAGOLD Share (50% ) GOLD Mt g/t Au koz Au koz Au Reserves1 Proven 7.7 2.32 573 286 Probable 497.1 2.08 33,276 16,638 P&P 504.8 2.09 33,849 16,924 Resources3, inclusive of Reserves Measured 7.7 2.52 626 313 Indic
Slide 41: NOVAGOLD: Reserve/Resource Table (Cont'd)
NOVAGOLD: RESERVE/RESOURCE TABLE (CONT’D) Notes: a. These reserve and resource estimates have been prepared in accordance with NI 43-101 and the CIM Definition Standard, unless otherwise noted. b. See numbered footnotes below on resource information. c. Rounding and significant figures may result in
Slide 42: Contact Us
CONTACT US 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 [email protected] Mélanie Hennessey Allison Pettit VP, Corporate Communications Manager, Investor Relations [email protected]
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