Novagold Resources Inc. · AMEX:NG
Novagold Resources — Q2 2018 Earnings Presentation
27 slides from Novagold Resources's earnings presentation, Jun 28, 2018
Slide 1: 2018 Second Quarter & Project Update
TSX, NYSE American: NG | novagold.com | June 28 2018 2018 SECOND 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 Second Quarter Financials & 2018 Budget David Ottewell (Vice President & Chief Financial Officer) o Closing Remarks Greg Lang (Pre
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 Approx. 280 miles west of Anchorage GALORE CREEK 50/50 with Teck Potential to
Slide 5: Second Quarter Activity Highlights
SECOND 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 filed the notice of availability for the final Environmental Impact Statement (EIS) in the
Slide 6: Alaska Governor Bill Walker quote
“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 7: Alaska Native corporations quotes on Donlin Gold
Maver Carey President & CEO, The Kuskokwim Corporation “Developing that land is part of the novel system that Congress structured under ANCSA for Alaska Native corporations to provide self-sustaining benefits for their shareholders. To realize that promise, Alaska Native corporations must be able to
Slide 8: Second Quarter Activity Highlights Cont'd
SECOND QUARTER ACTIVITY HIGHLIGHTS CONT’D PROJECT OPTIMIZATION EFFORTS LAYING THE GROUNDWORK FOR 2018 AND BEYOND Barrick and NOVAGOLD are focused on advancing the optimization work to improve capital efficiencies and enhance the project’s execution plan, maintaining upside potential and providing th
Slide 9: Barrick CEO quote on final EIS
“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 10: Second Quarter Activity Highlights Cont'd: Community Engagement
SECOND QUARTER ACTIVITY HIGHLIGHTS CONT’D FOCUSED ON OUR LONG-TERM STRATEGY OF DELIVERING SHAREHOLDER VALUE Community Engagement o Visited several villages with the Calista Corporation and The Kuskokwim Corporation across the Yukon-Kuskokwim (Y-K) region to meet with traditional village councils, re
Slide 11: Q2-2018 Operating Performance Analysis
Q2-2018 OPERATING PERFORMANCE ANALYSIS Three months ended Six months ended May 31, May 31, (US$ millions) 2018 2017 2018 2017 General and administrative(1) $4.9 $4.8 $9.6 $11.5 Donlin Gold: Permitting 0.3 2.4 1.5 4.5 Optimization 2.6 0.1 3.2 0.1 Galore Creek 0.4 0.2 0.7 0.4 Operating loss 8.2 7.6 15
Slide 12: Q2-2018 Cash Flow Highlights
Q2-2018 CASH FLOW HIGHLIGHTS Three months ended Six months ended May 31, May 31, (US$ millions) 2018 2017 2018 2017 General and administrative(1) $(3.0) $(2.7) $(5.7) $(5.5) Working capital, interest and other 1.1 1.2 (0.8) (0.5) Cash used in operating activities (1.9) (1.5) (6.5) (6.0) Donlin Gold:
Slide 13: 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 14: 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 15: Donlin Gold: 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 16: 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 17: 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 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 PUBLISHED THE FINAL ENVIRONMENTAL IMPACT STATEMENT DEVELOPMENT TIMELINE: 16 years ̴6 4-6 27+ years 1.5 ENVIRONMENTAL STUDIES STUDIES, ENGINEERING & UPDATED TECHNICAL Moz/year first five full years1 EXPLORATION & CONSTRUCTION PERMITTING OPERATION
Slide 20: 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 21: 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 22: 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 23: The NOVAGOLD Opportunity
THE NOVAGOLD OPPORTUNITY SAFE GEO-POLITICAL STRONG BALANCE SHEET ENVIRONMENT $70M cash + term deposits Alaska and British Columbia, as of May 31, 2018 top-rated mining jurisdictions TOP TIER ASSETS ACCOMPLISHED Donlin Gold – large, high-grade deposit well LEADERSHIP TEAM advanced in permitting; Exte
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 (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 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]