NOVAGOLD RESOURCES INC. (“NOVAGOLD” or “the
Company”) (NYSE American, TSX: NG) today released its 2021 third
quarter financial results and an update on its Tier One1 Donlin
Gold project (“Donlin Gold” or the “project”), which NOVAGOLD owns
equally with Barrick Gold Corporation (“Barrick”).
Details of the financial results for the quarter ended August
31, 2021 are presented in the consolidated financial statements and
quarterly report filed September 29, 2021 on Form 10-Q with the SEC
that is available on the Company’s website at www.novagold.com, on
EDGAR at www.sec.gov, and on SEDAR at www.sedar.com. All amounts
are in U.S. dollars unless otherwise stated and all mineral
resource and mineral reserve estimates are shown on a 100% project
basis.
Third Quarter Highlights and Updates
- The 2021 Donlin Gold
drill program site activities are wrapping up for the year.
- Assays from 29 holes
(18 complete and 11 partial), encompassing approximately 7,500
meters of drilling, were disclosed in a joint Barrick-NOVAGOLD
media release dated September 2, 2021.
- The drilling was
completed in late September, consisting of 79 holes totaling
approximately 24,200 meters.
- The program revealed
significant high-grade drill-hole intercepts, particularly in ACMA
and in the Divide zone, pointing toward potential feeder zones of
this large system.
- Examples of
high-grade drill-hole intercepts include drill-hole DC-1970
intersected 92.02 m grading 7.8 g/t gold; drill-hole DC21-1963A
intersected 40.97 m grading 10.5 g/t gold; and drill-hole DC-1969
intersected 47.78 m grading 9.0 g/t gold. For a more extensive
description of recent drill results, please refer to a joint
Barrick-NOVAGOLD media release dated September 2, 2021.
- In order to minimize
the risks posed by COVID-19, NOVAGOLD is continuing to maintain a
wide-ranging set of health and safety policies at its offices, and,
in conjunction with Barrick, at Donlin Gold. These measures are
designed to ensure the safety and well-being of all employees,
contractors and all individuals associated with the Company.
- In August 2021,
Donlin Gold enhanced its Community and Workforce Protection Plan to
ensure the safety and well-being of its workforce, employees’
families, and local communities for the remainder of the 2021 field
season. Employees and contractors are subject to mandatory COVID-19
testing prior to traveling to camp as well as upon arrival.
- Donlin Gold employed
a local workforce from 20 Yukon-Kuskokwim (Y-K) communities for the
2021 season – approximately 70% of Donlin Gold direct hires for
this year’s drill program were Alaska Natives. Donlin Gold,
together with its Native Corporation partners Calista
Corporation (“Calista”) and The Kuskokwim Corporation
(TKC), carried out a wide range of community engagement and
support initiatives during the quarter:
- In August 2021,
Donlin Gold partnered with the Delta Backhaul Company, Association
of Village Council Presidents (AVCP), and other regional partners
on the fourth “In It For The Long Haul” backhaul project to
collect, remove, and safely dispose of approximately 180,000 pounds
of household hazardous and electronic waste from 26 Y-K
villages.
- Finalized a Shared
Value Statement with Upper Kalskag for a total of eight Shared
Value Statements in the Y-K region.
- Advancing State
permitting, methodically:
- All 12 water rights permits were
finalized and issued by ADNR’s Division of Mining Land and Water on
June 29, 2021. In July, the water rights permit issuance was
administratively appealed by an Environmental Non-Governmental
Organization (ENGO) representing five tribal groups in the Y-K
region. A decision on the appeal is anticipated in 2022.
- In April 2020, the ADNR’s Division
of Oil and Gas agreed to reconsider its decision on the State ROW
for the buried natural gas pipeline. On July 19, 2021, the ADNR
Commissioner completed the reconsideration and upheld the State
ROW. In September, two appeals of the State ROW were filed in
Alaska Superior Court, one by an ENGO representing several tribal
groups and one by an outdoor recreational business owner in the
pipeline area.
- In June 2021, the Clean Water Act
(CWA) Section 401 certification (the “401 Certification”) of the
CWA Section 404 permit was appealed in Alaska Superior Court by an
ENGO representing Orutsararmiut Native Council (ONC).
President’s Message
Fulfilling Commitments and Embarking on a New Era at
Donlin Gold
As we reach the fall and onset of winter in Alaska, we can look
back on many achievements in the last quarter and the year to date:
nearing the successful completion of the expanded 2021 drill
program; the excitement and indications of the potential feeder
zones for the ACMA and Lewis deposits; the fulfillment of
commitments made and enrichment of relationships with our
partnerships at Barrick, Calista, and TKC; and, the approval by the
Donlin Gold LLC Board of additional funding in 2021 in preparation
for a new feasibility study for the Donlin Gold project.
Barrick and NOVAGOLD executives had very productive meetings
jointly reviewing the 2021 drill results to date and ongoing
technical work during their Anchorage and Donlin Gold project site
visit in early September 2021. The Donlin Gold LLC
Board subsequently approved an additional $3 million for 2021
to advance studies and increase staffing needed to lay
the foundation for a new feasibility study.
Activities for the 2021 drill program at the Donlin Gold project
are now wrapping up. There were four drill rigs operating at the
project site in the ACMA and Lewis deposits for the approximately
24,200-meter, 79-hole program. The owners reported initial assay
results from 29 holes (18 complete, 11 partial) for approximately
7,500 meters of length drilled to-date. Some notable high-grade
gold intercepts were encountered. These were similar to the
high-grade gold intercepts that we saw in previous drill programs.
Our geologic knowledge of the deposits also improved. The program
yielded significant results that point toward the potential feeder
zones of this large system. With drilling for the 2021 program
completed in late September, additional assay results will be
released as they become available.
Donlin Gold is being prepared to be a model mine for the
industry. Recent results are only reinforcing the conviction that
it will be a generational mine with an exceptionally long mine life
already currently measured in decades. With approximately 39
million ounces of gold in measured and indicated mineral resources
grading 2.24 grams per tonne2, Donlin Gold’s scale and grade, at
twice the industry average3, in a safe, Tier One jurisdiction4 such
as Alaska, is simply unparalleled and brings with it the coveted
stability of a mineral land package that few development-stage
projects can boast.
It has been essential for the partners to focus on the drill
program, permitting, and modeling work to advance the project up
the value chain. While all of this effort forms a solid foundation
for a new feasibility study, we have never ignored one of the
project’s most important attributes: Donlin Gold’s truly
exceptional exploration potential. It is notable that the project’s
gold endowment is contained within only three kilometers of an
eight-kilometer mineralized belt, and that even this only
represents five percent of the total mineral land package. And, as
we often say, the next Donlin could be found at Donlin as we
continue to produce some of the best assay results for an open-pit
gold project in the industry.
Increased Health and Safety Protocols at Camp Pay
Dividends for All
Health and safety are top priorities. With that in mind,
NOVAGOLD has implemented a broad range of policies designed to
ensure the safety and well-being of all employees, contractors, and
members of the community where the Company is operating. Throughout
the pandemic, Donlin Gold has worked with all of its community
partners in Alaska and in the Y-K region to make sure that the
program is effective. In fact, in the third quarter, Donlin Gold
further enhanced health and safety protocols in light of the rise
of COVID-19 cases in the Y-K region. We are pleased to report that
we have not had any COVID-19 cases to date at the project site;
however, restrictions are in place for the Donlin Gold Anchorage
office following two positive cases. All Donlin Gold employees who
may have been exposed were tested, are quarantining, and are
currently working remotely in accordance with the Donlin Gold
COVID-19 Mitigation Plan protocols.
Partnerships Strengthened by Challenging
Times
As a neighbor to villages in the Y-K region and as
a team made up of people from the area, Donlin Gold strives to aid
communities with support and resources, particularly when health
and safety are of concern. Donlin Gold continues to make progress
in formalizing its community relationships and finding common
ground with Shared Value Statements with eight villages from the
Y-K region (Akiak, Sleetmute, Napaimute, Crooked Creek, Napaskiak,
Nikolai, Tuluksak, and Upper Kalskag) that confirm current
engagement with key local communities. These agreements include
educational, environmental, and social initiatives to help provide
support for these villages. The Y-K is an area of Alaska the size
of Idaho with 52 sparsely populated villages, each village with its
own character, its own independent needs, and inter-dependence.
These have been emphasized in the past two years as the pandemic,
travel restrictions, and poor fishing seasons have led to increased
need for assistance.
The Donlin Gold project’s success at the local level can in part
be attributed to local community involvement in the project. This
commitment is at the core of both Barrick’s and NOVAGOLD’s
philosophy on how the project should develop in partnership with
our Alaska Native Corporation partners’ goals. Approximately 70% of
Donlin Gold direct hires for this year’s drill program are Alaska
Natives and we are pleased to report that for the 2021 season,
Donlin Gold hired employees from 20 Y-K communities. In an area
marked by high unemployment and fewer job choices than in urban
environments, the work experience and skills training that Donlin
Gold provides is significant and appreciated by the workforce.
Donlin Gold is committed to supporting the needs of its
community partners. As an example, in August, Donlin Gold held the
fourth “In It For The Long Haul” backhaul project that removed and
consolidated approximately 180,000 pounds of hazardous and
electronic waste from 26 villages throughout the Y-K region, that
was then packed into containers and shipped to Anchorage and
Seattle for recycling and proper disposal. As well, volunteers
received instruction about proper waste handling and packaging
techniques. Measured by scale and reach, it was the most successful
backhaul yet.
Also, Donlin Gold sponsored the annual 2021 Clean-up Green-up
program throughout the summer with a record 50-plus Tribes and
municipalities participating. These partnerships, activities, and
programs demonstrate our longstanding and deep-rooted commitment to
sustainable and responsible development for the benefit of all
stakeholders in the Y-K region.
Methodically Advancing Permits in a Sustainable
Manner
One word that keeps coming up in conversation with our existing
and potential investors is how “methodical” we have been in taking
Donlin Gold up the value chain. This description of our reliability
comes as no surprise to our long-term investors. For the past
decade, the NOVAGOLD management team, with its rare pedigree in
large-scale engineering, construction, Alaska permitting, and
open-pit operational expertise, has alongside Barrick and with the
Donlin Gold teams quietly, diligently, and successfully permitted
what will one day be one of the largest gold producing mines in the
world. Working with two U.S. federal administrations, the Donlin
Gold project team gained the first-ever joint Federal Record of
Decision between the Bureau of Land Management and the Army Corps
of Engineers for a mining project, and received its key State
permits and authorizations in 2018. These achievements reflect a
healthy partnership among NOVAGOLD, Barrick, and our Native
Corporation partners at Calista and TKC.
During the third quarter, Donlin Gold, together with Calista and
TKC, continued to provide support to State agencies in their
efforts to advance remaining permits and approvals needed for the
project. Several key permit advancements were made for the project
in the quarter.
- The
Alaska Department of Environmental Conservation (ADEC) Commissioner
issued his decision to uphold the State’s 401 Certification on May
27, 2021. The decision was appealed by an ENGO representing ONC on
June 28, 2021, in Alaska’s Superior Court as part of an ongoing
appeal process initiated by an ENGO. The appeal focused on three
narrow issues related to compliance with the State’s water quality
standards near the mine site.
-
Final water rights permits were issued on June 29, 2021, by the
Alaska Department of Natural Resources’ (ADNR) Division of Mining
Land and Water. The 12 water rights permits are for local surface
water sources and groundwater to be used for process water, dust
control, fire protection, and potable water. In July, they were
administratively appealed to the ADNR Commissioner by an ENGO
representing ONC and five villages. We anticipate a decision on the
appeal by the Commissioner in 2022.
- On
July 19, 2021, the ADNR Commissioner completed the reconsideration
and upheld the State ROW agreement and lease authorization for the
buried natural gas pipeline. On August 9, 2021, an ENGO,
representing ONC, and an outdoor recreational business owner each
requested that the Commissioner conduct a further reconsideration.
The Commissioner rejected both further reconsideration requests on
August 19, 2021. On September 20, ONC and the outdoor recreational
business owner both filed appeals of the State ROW in Alaska
Superior Court.
The scientific work done on the Donlin Gold project to date, in
parallel with the continuing collection of data and analysis, will
be verified through extensive, open, and transparent monitoring as
required by State permits. We will not operate without demonstrated
compliance with the State and Federal permitting standards.
Unfortunately, litigation led by activist ENGOs opposing resource
development of any kind has become a regular course of business in
the U.S. and it is something that has been built into our planning
since the start of permitting in 2012. We are not surprised by
these legal appeals and, by building a comprehensive, science-based
record, the Company believes it is in a strong position to support
the State in its defense of legal action against the permits.
Partnerships and Government Affairs
Dating back decades, prior to the start of permitting, Donlin
Gold has been fortunate to have established strong partnerships
with Calista and TKC, owners of the mineral and surface rights,
respectively. The project’s location on private land specially
selected for its mineral development potential under the 1971
Alaska Native Claims Settlement Act, is a key attribute that
distinguishes it from most other mining assets in Alaska. This year
is the 50th anniversary of this landmark Act supporting indigenous
populations in Alaska. As landowners, Calista and TKC are committed
to developing a mining operation consistent with the Elders’ vision
of responsible development that creates jobs and economic benefits
while safeguarding the environment and culture. Donlin Gold’s
commitment to meaningful tribal consultation throughout project
development and permitting has been proven over decades of reliable
and dependable engagement with the communities.
As the Donlin Gold project has moved up the value chain and
become a late-stage development project, the partnership of
Barrick, Calista, and TKC has closely collaborated in all
government affairs activities. Donlin Gold worked alongside Calista
and TKC during the Federal permitting process, culminating in the
granting of the Record of Decision in 2018. The partners continue
to work to ensure the project receives the attention it deserves
both in Alaska and in the seat of the Federal government in
Washington, D.C. The project team has decades of experience that
includes bipartisan engagement with Congress and different
Administrations and is well-positioned to engage on
project-specific and national mining issues at all levels of
government. In the third quarter, Calista has led efforts in
outreach to senior Biden Administration officials regarding the
Donlin Gold project and its unique situation of being located on,
and containing minerals owned by, Alaska Natives and the mandate to
provide economic and social benefits to Calista and TKC
Shareholders, many of whom live in the Y-K region. This
communication has consistently focused on priorities identified by
the Administration for resource development projects in the U.S.,
including Native consultation, empowerment, and self-determination.
Alaska’s U.S. Senators have recently reaffirmed their long-standing
support of the Donlin Gold project in discussions with Donlin Gold,
Barrick, and NOVAGOLD leadership. We also continue to work with our
Native Corporation partners in all aspects of outreach and feedback
in the communities of the Y-K region.
Strengthened Treasury
As of the end of the third quarter, NOVAGOLD had more than $170
million in cash and term deposits. This figure includes the July
payment of $75 million from Newmont related to the sale of
NOVAGOLD’s 50% interest in the Galore Creek project in 2018.
NOVAGOLD’s strong financial position is no accident. It emanates
from a well-executed strategy aimed at enhancing the value of
Donlin Gold for our shareholders with minimal dilution. Indeed,
whereas the Company last issued equity almost a decade ago, in
early 2012, we expect our existing financial resources and future
incoming payments to be sufficient for NOVAGOLD to carry out its
business without resorting to raising more capital until a
construction decision is made.
After a superb quarter of accomplishments that advanced the
Donlin Gold project markedly, I wish to thank the project teams at
NOVAGOLD, Donlin Gold, and Barrick for their hard work,
professionalism, expertise, and perseverance in safely and
effectively meeting our goals on all fronts as we work to overcome
the numerous challenges that continue to be presented by the global
pandemic in our work and personal lives. The team has a sincere
appreciation of the State agencies for their hard work and
professionalism throughout the permitting activities for the Donlin
Gold project and we thank them for their dedication to balancing
the needs of all stakeholders in the project.
We would not be here at this pivotal turning point of
development of Donlin Gold without the support of our Native
Corporation partners, Calista and TKC, on whose land we were first
invited to explore and now persevere to develop responsibly for the
mutual benefit of all. I express my deep gratitude to them for
their longstanding support and unwavering commitment to our shared
vision of advancing the Donlin Gold project.
Once again, I express sincere thanks to my colleagues on the
NOVAGOLD Board for their steadfast support and commitment to
upholding the best of corporate governance and sustainability
practices. I truly enjoy serving with all of you.
On behalf of the NOVAGOLD team, we thank our shareholders for
their engagement, sharing of knowledge, support, and encouragement.
Many of you are long-term shareholders. We are humbled by the trust
you put in our team with your investment, and we take this
responsibility very seriously. NOVAGOLD remains focused on
maximizing returns for its shareholders and stakeholders alike in a
measured, safe, and socially responsible manner. I wish you all the
best of health.
Sincerely,
Gregory A. LangPresident & CEO
Financial Results
in thousands of U.S. dollars, except for per share
amounts
|
Three months ended August 31, |
Nine months endedAugust 31, |
|
2021 |
2020 |
2021 |
2020 |
General and administrative expense (1) |
4,883 |
4,745 |
15,204 |
13,846 |
Share of losses – Donlin Gold |
6,748 |
6,150 |
12,914 |
11,418 |
Operating expenses |
11,631 |
10,895 |
28,118 |
25,264 |
|
|
|
|
|
Loss from operations |
(11,631) |
(10,895) |
(28,118) |
(25,264) |
Interest expense on promissory note |
(1,506) |
(1,428) |
(4,420) |
(4,588) |
Accretion of notes receivable |
639 |
835 |
2,347 |
2,483 |
Other income |
818 |
(982) |
34 |
1,599 |
Income tax expense |
(110) |
(266) |
(110) |
(794) |
Net loss |
(11,790) |
(12,736) |
(30,267) |
(26,564) |
|
|
|
|
|
Loss per share, basic and diluted |
(0.04) |
(0.04) |
(0.09) |
(0.08) |
|
|
|
At |
At |
|
|
|
Aug 31, 2021$ |
Nov 30, 2020$ |
Cash and term deposits |
|
|
173,341 |
121,906 |
Total assets |
|
|
204,194 |
224,441 |
Total liabilities |
|
|
117,263 |
113,714 |
(1) Includes share-based compensation expense of $2,050 and
$1,783 in the third quarter of 2021 and 2020, respectively, and
$6,187 and $5,259 in the first nine months of 2021 and 2020,
respectively.
For the third quarter ended August 31, 2021, loss
from operations increased from $10.9 million in 2020 to $11.6
million in 2021, primarily due to higher permitting and legal costs
at Donlin Gold LLC. For the first nine months of 2021, loss from
operations increased from $25.3 million in 2020 to $28.1 million in
2021 due to higher general and administrative expense and higher
costs at Donlin Gold LLC. General and administrative expense
increased by $1.4 million primarily due to higher share-based
compensation, salaries, and benefits. At Donlin Gold, expenses
increased by $1.5 million in 2021 due to higher permitting and
legal costs.
In the first nine months of 2021, total cash, cash
equivalents, and term deposits increased by $51.4 million due to
the receipt of $75 million from Newmont, partially offset by $15.0
million used to fund Donlin Gold, $8.4 million used in operating
activities for administrative costs and working capital changes,
and $0.7 million related to withholding taxes paid on vested
performance share units. Effects of exchange rate changes increased
cash by $0.6 million.
Under the terms of the sale of the Galore Creek
project to Newmont on July 27, 2018, NOVAGOLD received $100
million. An additional $75 million was received on July 27, 2021. A
further $25 million is due upon the earlier of: (i) completion of a
project feasibility study prepared by or for the Galore Creek
project, or (ii) July 27, 2023. An additional $75 million payment
is contingent upon Galore Creek project construction approval.
In the first nine months in 2021, net cash used in
operating activities increased by $1.0 million compared to the same
period in 2020, primarily due to lower interest income. Net cash
provided from (used in) investing activities includes the $75.0
million note payment from Newmont and net proceeds of $5.2 million
from term deposits in 2021, partially offset by a $1.4 million
increase in Donlin Gold funding. Net cash used in financing
activities related to withholding taxes paid on vested performance
share units.
As of August 31, 2021, we had cash and cash
equivalents of $117.8 million and term deposits of $55.5 million.
The term deposits are denominated in U.S. or Canadian dollars and
are held at Canadian chartered banks. Additional capital will be
necessary if a decision to commence engineering and construction is
reached for the Donlin Gold project.
2021 Outlook
We anticipate spending approximately $32 million in
2021, which includes $19 million to fund our share of expenditures
at the Donlin Gold project ($12 million for the 2021 drilling
program, camp improvements and studies; $7 million for permitting,
community engagement and administration); and $13 million for
corporate general and administrative costs.
NOVAGOLD’s primary goals in 2021 are to continue to
advance the Donlin Gold project toward a construction decision;
maintain/increase support for Donlin Gold among the project’s
stakeholders; promote a strong safety, sustainability, and
environmental culture; maintain a favorable reputation of NOVAGOLD,
its governance practices, and its project among shareholders; and
manage the Company treasury effectively and efficiently, including
streamlining the corporate structure.
Conference Call & Video Webcast Details
NOVAGOLD’s conference call and video webcast to discuss these
results will take place September 30, 2021 at 8:00 a.m. PT
(11:00 a.m. ET). The video webcast and conference call-in details
are provided below.
|
Video
Webcast: |
https://services.choruscall.ca/links/novagold20210930.html |
|
North American callers: |
1-800-319-4610 |
|
International callers: |
1-604-638-5340 |
Questions may be submitted prior to the call at
info@novagold.com. There will also be an opportunity to ask
questions during the webcast following the presentation.
About NOVAGOLD
NOVAGOLD is a well-financed precious metals company focused on
the development of its 50%-owned Donlin Gold project in Alaska, one
of the safest mining jurisdictions in the world. With approximately
39 million ounces of gold in the measured and indicated
mineral resource categories, inclusive of proven and probable
mineral reserves (541 million tonnes at an average grade of
approximately 2.24 grams per tonne in the measured and indicated
resource categories on a 100% basis),5 Donlin Gold is regarded to
be one of the largest, highest-grade, and most prospective known
open pit gold deposits in the world.
According to the 2021 Technical Report, once in production,
Donlin Gold is expected to produce an average of more than one
million ounces per year over a 27-year mine life on a 100% basis.
The Donlin Gold project has substantial exploration potential
beyond the designed footprint which currently covers three
kilometers of an approximately eight-kilometer-long gold-bearing
trend. Current activities at Donlin Gold are focused on State
permitting, optimization work, community outreach, and workforce
development in preparation for the eventual construction and
operation of this project. With a strong balance sheet, NOVAGOLD is
well-positioned to fund its share of permitting and optimization
advancement efforts at the Donlin Gold project.
Donlin Gold is a committed partner to the Alaska Native
communities both surrounding the project and within the State as a
whole. This commitment underpins our approach and is also reflected
in the way in which the asset itself is structured. An important
factor that distinguishes Donlin Gold from most other mining assets
in Alaska is that the project is located on private land selected
due to its mineral development potential that would benefit
indigenous shareholders statewide five decades ago. Donlin Gold has
entered into life-of-mine agreements with Calista, which owns the
subsurface mineral rights and some surface land rights, and TKC, a
collection of 10 village corporations, which owns the majority of
surface land rights, and is committed to providing employment
opportunities, scholarships, and preferential contract
considerations to Calista and TKC shareholders. These agreements
include a revenue-sharing structure established in the Alaska
Native Claims Settlement Act of 1971, which resolved Alaska Native
land claims and allotted 44 million acres of land for use by Alaska
Native Corporations. Additionally, our long-term commitment to
economic development in the Y-K region is exemplified by Donlin
Gold’s support of TKC’s initiative to launch energy and
infrastructure projects in middle Kuskokwim villages. These
partnerships, activities, and programs are illustrative of the
commitment to the sustainable and responsible development of the
Donlin Gold project for the benefit of all stakeholders.
Scientific and Technical Information
Certain scientific and technical information contained herein
with respect to the Donlin Gold project is derived from the “NI
43-101 Technical Report on the Donlin Gold Project, Alaska, USA”
prepared by Wood Canada Limited with an effective date of June 1,
2021 (the “2021 Technical Report”). Henry Kim, P.Geo., Senior
Resource Geologist, Wood Canada Limited; Mike Woloschuk, P.Eng., VP
Global Business Development & Consulting, Wood Group USA, Inc.;
and Kirk Hanson, MBA, P.E., Technical Director, Open Pit Mining,
Wood Group USA, Inc. are the Qualified Persons responsible for the
preparation of the independent technical report, and each is an
independent Qualified Person as defined by National Instrument
43-101 (“NI 43-101”).
Clifford Krall, P.E., who is the Mine Engineering Manager for
NOVAGOLD and a Qualified Person under NI 43-101, has approved
and verified the scientific and technical information related to
the 2021 Donlin Gold project drill program and 2021 Technical
Report contained in this media release.
NOVAGOLD Contacts:Mélanie HennesseyVice
President, Corporate Communications
Jason MercierManager, Investor Relations
604-669-6227 or 1-866-669-6227
Cautionary Note Regarding Forward-Looking
Statements
This media release 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
Securities Litigation Reform Act of 1995. Forward-looking
statements are frequently, but not always, identified by words such
as “expects”, “anticipates”, “believes”, “intends”, “estimates”,
“potential”, “possible”, and similar expressions, or statements
that events, conditions, or results “will”, “may”, “could”, “would”
or “should” occur or be achieved. Forward-looking statements are
necessarily based on several opinions, estimates and assumptions
that management of NOVAGOLD considered appropriate and reasonable
as of the date such statements are made, are subject to known and
unknown risks, uncertainties, assumptions, and other factors that
may cause the actual results, activity, performance, or
achievements to be materially different from those expressed or
implied by such forward-looking statements. All statements, other
than statements of historical fact, included herein are
forward-looking statements. These forward-looking statements
include statements regarding the anticipated results for the 2021
drill program; the anticipated timing of certain judicial and/or
administrative decisions; the 2021 Outlook; our goals for the
remainder of 2021; anticipated benefits from the 2017, 2020, and
2021 drill programs including an improved geological model for
Donlin Gold; ongoing support provided to key stakeholders including
Native Corporation partners; the potential impact of the COVID-19
pandemic on the development of Donlin Gold; the potential
development and construction of Donlin Gold; the sufficiency of
funds to continue to advance development of Donlin Gold; perceived
merit of properties; mineral reserve and resource estimates; Donlin
Gold’s ability to secure the permits needed to construct and
operate the Donlin Gold project in a timely manner, if at all; and
legal challenges to Donlin Gold’s existing permits. In addition,
any statements that refer to expectations, intentions, projections
or other characterizations of future events or circumstances are
forward-looking statements. Forward-looking statements are not
historical facts but instead represent the management expectations
of NOVAGOLD’s estimates and projections regarding future events or
circumstances on the date the statements are made.
Important factors that could cause actual results to differ
materially from expectations include the need to obtain additional
permits and governmental approvals; the timing and likelihood of
obtaining and maintaining permits necessary to construct and
operate; the need for additional financing to explore and develop
properties and availability of financing in the debt and capital
markets; the outbreak of the coronavirus global pandemic
(COVID-19); uncertainties involved in the interpretation of drill
results and geological tests and the estimation of reserves and
resources; changes in mineral production performance, exploitation
and exploration successes; changes in national and local government
legislation, taxation, controls or regulations and/or changes in
the administration of laws, policies and practices, expropriation
or nationalization of property and political or economic
developments in the United States or Canada; the need for continued
cooperation between Barrick and NOVAGOLD for the continued
exploration, development and eventual construction of the Donlin
Gold property; the need for cooperation of government agencies and
native groups in the development and operation of properties; risks
of construction and mining projects such as accidents, equipment
breakdowns, bad weather, disease pandemics, non-compliance with
environmental and permit requirements, unanticipated variation in
geological structures, ore grades or recovery rates; unexpected
cost increases, which could include significant increases in
estimated capital and operating costs; fluctuations in metal prices
and currency exchange rates; whether a positive construction
decision will be made regarding Donlin Gold; and other risks and
uncertainties disclosed in NOVAGOLD’s most recent reports on Forms
10-K and 10-Q, particularly the “Risk Factors” sections of those
reports and other documents filed by NOVAGOLD with applicable
securities regulatory authorities from time to time. Copies of
these filings may be obtained by visiting NOVAGOLD’s website at
www.novagold.com, or the SEC’s website at www.sec.gov, or at
www.sedar.com. The forward-looking statements contained herein
reflect the beliefs, opinions and projections of NOVAGOLD on the
date the statements are made. NOVAGOLD assumes no obligation to
update the forward-looking statements of beliefs, opinions,
projections, or other factors, should they change, except as
required by law.
Cautionary Note to United States Investors
NOVAGOLD cautions that this media release has been prepared in
accordance with the requirements of the securities laws in effect
in Canada, which differ from the requirements of U.S. securities
laws. Unless otherwise indicated, all resource and reserve
estimates included in this media release 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 (CIM)—CIM Definition
Standards on Mineral Resources and Mineral Reserves, adopted by the
CIM Council, as amended (“CIM Definition Standards”). NI 43-101 is
a rule developed by the Canadian Securities Administrators which
establishes standards for all public disclosure an issuer makes of
scientific and technical information concerning mineral projects.
Canadian standards, including NI 43-101, differ significantly from
the requirements of the United States Securities and Exchange
Commission (SEC) Industry Guide 7 (“SEC Industry Guide 7”), and
resource and reserve information contained herein may not be
comparable to similar information disclosed by U.S. companies.
NOVAGOLD’s disclosure concerning Reserve & Resources Estimates
remains consistent with NI 43-101. Under SEC Industry Guide 7,
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. SEC Industry Guide 7 normally does
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” under SEC Industry Guide 7 in documents filed with the
SEC. 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.
Under Canadian rules, estimated “inferred mineral resources” may
not form the basis of feasibility or pre-feasibility studies except
in rare cases. 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” under SEC Industry Guide 7 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 SEC Industry Guide 7, and reserves
reported by NOVAGOLD in compliance with NI 43-101 may not qualify
as “reserves” under SEC Industry Guide 7. Donlin Gold does not have
known reserves, as defined under SEC Industry Guide 7. Accordingly,
information concerning mineral deposits set forth herein may not be
comparable with information made public by companies that report in
accordance with SEC Industry Guide 7.
On October 31, 2018, the SEC adopted a final rule (“New Final
Rule”) that will replace SEC Industry Guide 7 with new disclosure
requirements that are more closely aligned with current industry
and global regulatory practices and standards, including NI 43-101.
Companies must comply with the New Final Rule for the Company’s
first fiscal year beginning on or after January 1, 2021, which for
NOVAGOLD would be the fiscal year beginning December 1, 2021. The
New Final Rule provides that SEC Industry Guide 7 will remain
effective until all registrants are required to comply with the New
Final Rule, at which time SEC Industry Guide 7 will be rescinded.
While early voluntary compliance with the New Final Rule is
permitted, NOVAGOLD has not elected to comply with the New Final
Rule at this time.
1 NOVAGOLD defines a Tier One gold development project as one
with a projected production life of at least 10 years, annual
projected production of at least 500,000 ounces of gold, and
average projected operating costs over the production life that are
in the lower half of the industry cost curve.2 Donlin Gold data as
per the 2021 Technical Report (as defined herein). Donlin Gold
measured resources of approximately 8 Mt grading 2.52 g/t and
indicated resources of approximately 534 Mt grading 2.24 g/t, each
on a 100% basis and inclusive of mineral reserves. Mineral
resources have been estimated in accordance with NI 43-101.3 2020
average grade of open pit and underground deposits with gold as
primary commodity and over 1 Moz in measured and indicated
resources is 1.12 g/t, sourced from S&P Global Market
Intelligence.4 NOVAGOLD considers Tier One jurisdictions to be any
in the top 10 rank by the Investment Attractiveness Index in the
Fraser Institute Annual Survey of Mining Companies,
2020. Alaska is ranked number 5.5 Donlin Gold data as per the
2021 Technical Report, as defined herein. Donlin Gold measured
resources of approximately 8 Mt grading 2.52 g/t and indicated
resources of approximately 534 Mt grading 2.24 g/t, each on a 100%
basis and inclusive of mineral reserves. Mineral resources have
been estimated in accordance with NI 43-101.
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