Novagold Resources Inc. · AMEX:NG
Novagold Resources — TD Securities Mining Conference 2018
38 slides from Novagold Resources's conference presentation, January 2018
Slide 1: TD Securities Mining Conference
TSX, NYSE American: NG | novagold.com | January 2018 TD Securities Mining Conference
Slide 2: Cautionary Statements Regarding Forward-Looking Statements
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 historic
Slide 3: 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 Location: Southwest Alaska GALORE CREEK 50/50 with Teck Potential to be one of
Slide 4: Donlin Gold: The Right Project
DONLIN GOLD: THE RIGHT PROJECT ARGUABLY THE MOST IMPORTANT GOLD PROJECT IN THE WORLD TODAY SIZE PARTNERSHIPS Among the largest present Strong partnerships with and/or future gold mines local stakeholders in the world JURISDICTION GRADE High-grade open- pit mine Donlin Gold Located in Alaska, one of
Slide 5: 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 49.8 50 40 0.53 g/t 39.0 39.0 9.8 M&I Gold Resource (millions of ounces) million oz million oz 2.24 30 g/t 20 18.8 Donlin Gold Peer Group Avg. 0.52 g/t 11.5 9.5 10 8.0 8.0 0.68 6.7 0.7
Slide 6: 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 World Donlin Gold Average Grade1 Resource Grade2 1.13g/t 2.24g/t While industry average grades are declining, Donlin Gold’s grade provides resilience through commodity price
Slide 7: Expected to Be One of the Industry's Top Producing Assets
DONLIN GOLD: EXPECTED TO BE ONE OF THE INDUSTRY’S TOP PRODUCING ASSETS A REMARKABLE RESOURCE AMONG UNDEVELOPED GOLD DEPOSITS IN THE AMERICAS Donlin Gold’s size, grade and projected 1.60 production profile clearly distinguish it from its peers 1.40 1.1 2 Projected Annual Gold Production (millions of
Slide 8: Large Gold Deposits Are Critical for Sustainability of Gold Industry
LARGE GOLD DEPOSITS ARE CRITICAL FOR THE SUSTAINABILITY OF THE GOLD INDUSTRY SCARCITY OF QUALITY ASSETS FURTHER EXACERBATED BY LONG DEVELOPMENT TIMELINES o New discoveries have become increasingly rare o Gold is an under-owned currency that enjoys a well-earned place in global finance o On the deman
Slide 9: Only Undeveloped Asset in This Category in North America
DONLIN GOLD: ONLY UNDEVELOPED ASSET IN THIS CATEGORY IN NORTH AMERICA 2016 TOP TEN GOLD PRODUCING MINES ONLY SIX MINES/PROJECTS IN THE WORLD SLATED TO PRODUCE >1M OUNCES PER YEAR 39.0Moz Donlin Gold 2.5Moz 33.0Moz Kupol Olimpiada 48.2Moz 9.5Moz 12.4Moz Muruntau Goldstrike Cortez 47.9Moz Lihir Island
Slide 10: Donlin Gold: Excellent Exploration Potential
DONLIN GOLD: EXCELLENT EXPLORATION POTENTIAL MULTIPLE DRILL PROSPECTS AND TARGETS EXIST ALONG THE 8 KM GOLD MINERALIZED TREND THE NEXT BIG GOLD DISCOVERY MAY BE AT DONLIN GOLD o From 2006 to 2011, M&I resources increased 135% (16.6Moz to 39.0Moz) through a well- executed exploration program o Future
Slide 11: Partners Shared Mindset to Enhance Value and Build Optionality
DONLIN GOLD: PARTNERS SHARED MINDSET TO ENHANCE VALUE AND BUILD OPTIONALITY BARRICK AND NOVAGOLD – PERFECTLY ALIGNED PARTNERSHIP POSITIONED TO MAXIMIZE DONLIN GOLD PROJECT OPTIMIZATION o Both partners are focused on further improving the project’s value and reducing initial capital costs: • Evaluati
Slide 12: Drill Program Aimed at Further Enhancing Project Economics
DONLIN GOLD: DRILL PROGRAM AIMED AT FURTHER ENHANCING PROJECT ECONOMICS BARRICK AND NOVAGOLD ARE FOCUSED ON CAPITALIZING ON THE FLEXIBILITY INHERENT IN DONLIN GOLD’S UNIQUE CHARACTERISTICS OF LARGE SIZE AND SUPERIOR GRADE o Selective mining has been identified as an opportunity to further improve mi
Slide 13: Significant Value Upside with Higher Gold Prices
DONLIN GOLD: SIGNIFICANT VALUE UPSIDE WITH HIGHER GOLD PRICES EXTRAORDINARY LEVERAGE TO THE GOLD PRICE NPV (US$ BILLIONS) NPV5 INCREASES ~20X $30.0 WITH ~2X INCREASE IN GOLD PRICE $27.0B o Project has a positive return that increases substantially with higher gold prices $25.0 27 YEAR MINE LIFE NPV
Slide 14: 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 40 years ago; resolved Alaska Native land claims • Lands valuab
Slide 15: 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 JURISDICTIONAL APPEAL: • Mineral potential • Established mining industry • Political and social stability • Excellent local partnerships • A
Slide 16: 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 27+ years ENVIRONMENTAL STUDIES 1.5 Moz/year first five full years1 EXPLORATION & CONSTRUCTION PERMITTING OPERATION 1.1 Moz/year life o
Slide 17: A Thorough, Transparent, and Established Environmental Review Process
DONLIN GOLD: A THOROUGH, TRANSPARENT, AND ESTABLISHED ENVIRONMENTAL REVIEW PROCESS SUPPORTING THE CORPS IN COMPLETING THE FINAL STEPS IN EIS PROCESS WHILE WORKING WITH ALASKA TO SECURE STATE PERMITS National Environmental Policy Act (NEPA) review nearing completion – supports agency decision- making
Slide 18: Donlin Gold: Looking Ahead
DONLIN GOLD: LOOKING AHEAD NEXT STEPS IN DONLIN GOLD’S DEVELOPMENT o Obtain federal and major state permits o Advance optimization work looking at reducing up front cost while maintaining full upside value • Use of selective mining methods • Innovative technologies, automation, modular off-site cons
Slide 19: Galore Creek: A Significant Copper-Gold-Silver Asset
GALORE CREEK: A SIGNIFICANT COPPER-GOLD-SILVER ASSET POTENTIAL TO BE ONE OF THE LARGEST, HIGHEST-QUALITY, LOWEST-COST COPPER PRODUCERS IN CANADA Copper Gold Silver 7Blbs Grade: 0.59% 5Moz Grade: 0.32g/t 102Moz Grade: 6.02g/t P&P RESERVES1 1) Galore Creek project estimates as per the pre-feasibility
Slide 20: 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 NPV (US$ BILLIONS) $4.0 $3.5B $3.1B $3.0 $2.6B 18 YEAR MINE LIFE A significant NPV at 7% $2.1B copper-gold-silver NPV at 5% $2.0 $1.6B asset in Cana
Slide 21: Clear Focus and Strong Funding to Execute on All Fronts
CLEAR FOCUS AND STRONG FUNDING TO EXECUTE ON ALL FRONTS SUFFICIENT CASH ON HAND TO PROGRESS DONLIN GOLD THROUGH PERMITTING TOTAL 2017 BUDGET ($ MILLIONS)2 $27 Donlin Gold – permitting 10 $88M Donlin Gold – drill program 4 cash and term deposits1 Galore Creek 2 G&A, working capital and other 11 SPEND
Slide 22: Top Institutional Shareholders
TOP INSTITUTIONAL SHAREHOLDERS 51% OF SHARES ISSUED & OUTSTANDING HELD BY SIX LARGEST SHAREHOLDERS2 26.3% Electrum Strategic Resources LP 7.6% Fidelity Management & Research Company $1.2B 6.8% Paulson & Co. Inc. MARKET CAP1 4.5% Van Eck Associates Corporation 3.0% The Baupost Group, L.L.C. 2.7% Tocq
Slide 23: Upcoming Catalysts
UPCOMING CATALYSTS KEY COMPANY MILESTONES ON THE HORIZON o NOVAGOLD 2017 fourth quarter and year-end results o Donlin Gold drill results o Donlin Gold final EIS expected to be published by the U.S. Army Corps of Engineers o Expect receipt of Donlin Gold Record of Decision and major Federal wetlands
Slide 24: The NOVAGOLD Opportunity
THE NOVAGOLD OPPORTUNITY SAFE GEO-POLITICAL STRONG BALANCE SHEET ENVIRONMENT $88M cash + term deposits Alaska and British Columbia, as of August 31, 2017 top-rated mining jurisdictions TOP TIER ASSETS ACCOMPLISHED Donlin Gold – Large, LEADERSHIP TEAM high-grade deposit well Extensive experience adva
Slide 25: Appendix
APPENDIX
Slide 26: 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 ore)1 Resources: 39.0 Moz M&I (inclusive of reserves) 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, con
Slide 27: 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 ore)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 C
Slide 28: 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) o Rights of Way (BLM) o Pipeline Special Permit (PHMSA) – Public Notice Complete o PSD Air Quality Permit Review (EPA) – Completed, Permit Issued o EFH Con
Slide 29: Permitting in the U.S.
DONLIN GOLD: PERMITTING IN THE U.S. LARGE PROJECTS HAVE BEEN SUCCESSFULLY PERMITTED Project Name Location Metal Time Description • Expansion Red Dog Alaska Lead/zinc ~2 years • EIS completed in 2009 • Development started on schedule in 2010 • Expansion – new heap leach facility Fort Knox Alaska Gold
Slide 30: 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: Fort Knox Kinross Gold Corp Red Dog Teck Resources Limited Greens Creek Hecla Mining Company Kensington Coeur Mining Inc Pogo Sumitomo Metal Mining
Slide 31: Donlin Gold: Capital Expenditures
DONLIN GOLD: CAPITAL EXPENDITURES OUR OPTIMIZATION EFFORTS ARE FOCUSED ON REDUCING UPFRONT CAPITAL WHILE MAINTAINING FULL UPSIDE VALUE Areas US$M1 Opportunities1 Mining 345 Leasing equipment ~$170M of $345M Site preparation/roads 236 Process facilities 1,326 Oxygen plant could be built by third part
Slide 32: 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 33: 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 34: NOVAGOLD: The Board of Directors
NOVAGOLD: THE BOARD OF DIRECTORS INDUSTRY LEADERS TO BRING DONLIN GOLD THROUGH PERMITTING & BEYOND Dr. Thomas Kaplan • Chairman and CIO of The Electrum Group LLC, a privately held natural resources investment management Chairman company that controls a diversified portfolio of precious and base meta
Slide 35: 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 36: 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 37: 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 38: 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 Erin O’Toole VP, Corporate Communications Senior Stakeholder Relations Specialist melanie.hennessey@
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