Novagold Resources Inc. · AMEX:NG
Novagold Resources — Q1 2018 Earnings Presentation
27 slides from Novagold Resources's earnings presentation, Apr 5, 2018
Slide 1: 2018 First Quarter & Project Update
TSX, NYSE American: NG | novagold.com | April 5 2018 2018 FIRST QUARTER & PROJECT UPDATE
Slide 2: Conference Call Attendees
CONFERENCE CALL ATTENDEES o Introduction Mélanie Hennessey (Vice President Corporate Communications) o Corporate Update Greg Lang (President & Chief Executive Officer) o First Quarter Financials & 2018 Budget David Ottewell (Vice President & Chief Financial Officer) o Closing Remarks Greg Lang (Pres
Slide 3: 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 4: 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 GALORE CREEK 50/50 with Teck Potential to be one of the largest and lowest cos
Slide 5: First Quarter Activity Highlights
FIRST QUARTER ACTIVITY HIGHLIGHTS FOCUSED ON OUR LONG-TERM STRATEGY OF DELIVERING SHAREHOLDER VALUE Donlin Gold Nearing the Completion of Permitting o Environmental Impact Statement (EIS) process: • The Corps has completed the final EIS and anticipates publishing the document shortly, along with a N
Slide 6: First Quarter Activity Highlights Cont'd
FIRST QUARTER ACTIVITY HIGHLIGHTS CONT’D PROJECT OPTIMIZATION EFFORTS LAYING THE GROUNDWORK FOR 2018 AND BEYOND o Released 2017 drill program results, a total of 16 core holes were completed (7,040 m) and samples assayed • Mineralized intercepts encountered higher grades than predicted by previous m
Slide 7: Barrick CEO quote on Donlin Gold drill results
“We are very encouraged by the latest drill results at Donlin Gold, some of which encompassed areas where relatively little drilling had been previously done. The results are further evidence of the significant potential of this deposit. We look forward to continuing to collaborate closely with our
Slide 8: First Quarter Activity Highlights Cont'd: Community Engagement
FIRST QUARTER ACTIVITY HIGHLIGHTS CONT’D FOCUSED ON OUR LONG-TERM STRATEGY OF DELIVERING SHAREHOLDER VALUE Community Engagement o NOVAGOLD and Donlin Gold staff visited several villages with the Calista Corporation and The Kuskokwim Corporation across the Yukon-Kuskokwim (Y-K) region to meet with tr
Slide 9: Q1-2018 Operating Performance Analysis
Q1-2018 OPERATING PERFORMANCE ANALYSIS First Quarter First Quarter (US$ millions) 2018 2017 General and administrative expenses1 $4.7 $6.7 Donlin Gold 1.8 2.1 Galore Creek 0.3 0.2 Operating loss 6.8 9.0 Other expense2 1.4 1.1 Net loss $8.2 $10.1 (1) Includes share-based compensation expense of $1.9
Slide 10: Q1-2018 Cash Flow Highlights
Q1-2018 CASH FLOW HIGHLIGHTS First Quarter Full Year (US$ millions) 2018 Budget General and administrative(1) $ (2.7) $ (11.0) Working capital, interest and other (1.9) — Cash used in operating activities $ (4.6) $ (11.0) Donlin Gold - Permitting (0.9) (9.0) Donlin Gold - Optimization (0.8) (5.0) Ga
Slide 11: 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 0.52 39.0 39 9 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 12: Donlin Gold: Quality Grade Double the Average Gold Deposit
DONLIN GOLD: QUALITY GRADE DOUBLE THE AVERAGE GOLD DEPOSIT IN THE WORLD 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 pric
Slide 13: Donlin Gold: 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 14: Large Gold Deposits Are Critical for Sustainability of the Gold Industry
LARGE GOLD DEPOSITS ARE CRITICAL FOR THE SUSTAINABILITY OF THE GOLD INDUSTRY SUPPLY & DEMAND FORCES AT WORK BODE WELL FOR GOLD’S UPWARD TRAJECTORY SUPPLY DEMAND • New discoveries are increasingly rare • Time from discovery to production can be 20+ years due to lengthy permitting timelines • Remote m
Slide 15: 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 16: Donlin Gold: Private Land Designated for Mining
DONLIN GOLD: PRIVATE LAND DESIGNATED FOR MINING TOPOGRAPHY AMENABLE TO SITE DEVELOPMENT Lewis Deposit ACMA Deposit 16
Slide 17: Donlin Gold: 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: Donlin Gold: 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 19: Donlin Gold: Project Permitting Is on Track
DONLIN GOLD: PROJECT PERMITTING IS ON TRACK THE CORPS EXPECTS TO PUBLISH THE FINAL ENVIRONMENTAL IMPACT STATEMENT IN EARLY 2018 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
Slide 20: Donlin Gold: Upcoming Catalysts
DONLIN GOLD: UPCOMING CATALYSTS NEXT STEPS IN DONLIN GOLD’S DEVELOPMENT Integrate drill program results Determine best path forward into resource model based on updated study & prevailing economic market conditions Solidify execution plan Constructi on technical construction decision financing permi
Slide 21: Galore Creek: A Significant Copper-Gold-Silver Asset
GALORE CREEK: A SIGNIFICANT COPPER-GOLD-SILVER ASSET MEASURED & INDICATED RESOURCES1 COPPER 9 Blbs1 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 136Moz 1 Grade: 5.21g/t 1) Galore Creek project estimates as
Slide 22: Top Institutional Shareholders
TOP INSTITUTIONAL SHAREHOLDERS 52% OF SHARES ISSUED & OUTSTANDING HELD BY SIX LARGEST SHAREHOLDERS2 Electrum Strategic 26.3% Resources LP & affiliates Fidelity Management & 7.5% Research Company 6.8% Paulson & Co. Inc. $ 1.5 Market Cap1 B 5.4% Van Eck Associates Corporation 3.3% The Baupost Group, L
Slide 23: 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 24: Appendix
APPENDIX
Slide 25: 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 26: NOVAGOLD: Reserve/Resource Table (Con't)
NOVAGOLD: RESERVE/RESOURCE TABLE (CON’T) 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 27: 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]