NOVAGOLD RESOURCES INC. (“NOVAGOLD” or “the
Company”) (NYSE American, TSX: NG) today released its 2021
first-quarter financial results and an update on its Tier One2 gold
development project Donlin Gold, which NOVAGOLD owns equally with
Barrick Gold (“Barrick”).
Details of the financial results for the quarter ended February
28, 2021 are presented in the consolidated financial statements and
annual report filed March 31, 2021 on Form 10-Q with the SEC that
is available on the Company’s website at www.novagold.com, on SEDAR
at www.sedar.com, and on EDGAR at www.sec.gov. 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.
NOVAGOLD and Barrick, through a joint release issued on March
25, 20213, reported the last set of assay results from the
successful 2020 drill program at Donlin Gold:
- The 85-hole drill
program, totaling 23,361 meters in the proposed ACMA and Lewis pit
areas, was successfully carried out in order to further increase
confidence in recent geologic modeling concepts.
- Results in both the
ACMA and Lewis deposit areas exceeded the previously modeled
grade-thickness, with higher grades observed over narrower
intervals, particularly in sedimentary rocks.
- Data collected has resulted in an
improved appreciation of the controls on mineralization.
- With extensive
communication and the application of health and safety protocols,
there were zero COVID-19 cases at the project site and no Lost-Time
Incidents.
- Ten of the top
intervals for the 2020 drill program were contained in the Donlin
Gold joint media release issued subsequent to quarter-end4:
- DC20-1937 intersected 103.88 m grading
6.1 g/t gold, starting at 390.19 m drilled depth, including a sub
interval of 22.15 m grading 12.5 g/t, starting at 459.17 m drilled
depth;
- DC20-1871 intersected 41.91 m grading
11.61 g/t gold, starting at 30.35 m drilled depth;
- DC20-1903 intersected 8.14 m grading
45.3 g/t gold, starting at 99.39 m drilled depth, including a sub
interval of 6.84 m grading 52.1 g/t gold, starting at 99.39 m
drilled depth;
- DC20-1877 intersected 4.17 m grading
80.6 g/t gold, starting at 123.48 m drilled depth, including a sub
interval of 3.15 m grading 106.2 g/t gold, starting at 124.50 m
drilled depth;
- DC20-1888 intersected 6.93 m grading
43.1 g/t gold, starting at 178.58 m drilled depth, including a
sub interval of 3.25 m grading 90.5 g/t gold, starting at 180.26 m
drilled depth;
- DC20-1912 intersected 37.30 m grading
7.0 g/t gold, starting at 249.70 m drilled depth, including a sub
interval of 3.30 m grading 24.5 g/t gold, starting at 251.70 m
drilled depth;
- DC20-1930 intersected 51.15 m grading
4.6 g/t gold, starting at 148.85 m drilled depth, including a sub
interval of 7.60 m grading 12.4 g/t gold, starting at 182.40 m
drilled depth;
- DC20-1866 intersected 45.91 m grading
5.03 g/t gold, starting at 35.39 m drilled depth; 23.36 m
grading 4.15 g/t gold, starting at 108.30 m drilled depth; and
30.28 m grading 4.20 g/t gold, starting at 226.53 m drilled
depth;
- DC20-1932 intersected 47.66 m grading
4.8 g/t gold, starting at 101.62 m drilled depth, including a sub
interval of 4.00 m grading 19.5 g/t gold, starting at 143.28 m
drilled depth; and,
- DC20-1878 intersected 19.77 m grading
11.3 g/t gold, starting at 48.86 m drilled depth, including a sub
interval of 7.00 m grading 25.2 g/t gold, starting at 54.86 m
drilled depth.
- The Board of Donlin
Gold is considering additional confirmation and extension drilling
in 2021 to expand upon recently obtained information into the
continuity and structural controls of the higher-grade
mineralization, which will be incorporated into the geological
model.
In the first quarter 2021, the following milestones were
achieved:
- Donlin Gold,
together with Calista and TKC, continued their
long-standing community engagement during the quarter:
- In partnership with TKC, the Village of
Crooked Creek, and Napaimute Tribe, Donlin Gold was again the lead
sponsor of a project to construct and maintain the upper portions
of a 200-mile ice road on the Kuskokwim River.
- In mid-January, the Middle Kuskokwim
village of Tuluksak with a population of approximately 370 had its
water supply plant destroyed by fire, creating a health and safety
crisis for the community. In the days following, Donlin Gold and
several other community organizations, companies, and individuals
stepped in to assist in the effort, providing drinking water,
buckets for carrying and storing water, sanitary wipes, diapers,
and other health supplies.
- As part of Donlin Gold’s ongoing
community engagement efforts, Friendship Agreements have been
approved and signed by six communities (Akiak, Sleetmute,
Napaimute, Crooked Creek, Napaskiak, and Nikolai) in the project’s
region. These agreements with Donlin Gold expand upon the long-term
relationships already established with these communities and
address specific community needs such as water, sewer, and landfill
projects; the ice road that connects remote villages in the
Yukon-Kuskokwim (Y-K) region during winter; salmon studies; and
suicide prevention programs.
- With key Federal and
State permits in hand, Donlin Gold advanced additional State
permits:
- In November 2020, the Alaska Department
of Natural Resources (ADNR) published an initial public notice for
comment on Donlin Gold’s 12 applications for water rights for the
mine site and transportation facilities, which closed on December
15, 2020. Water rights are for local surface water sources and
groundwater to be used for process water, dust control, fire
protection, and potable water. In March 2021, ADNR introduced a
second two-week public notice period, which closed March 26, 2021.
It is anticipated that the ADNR will issue final decisions on the
water rights applications in the first half of 2021.
- In April 2020, the ADNR’s Division of
Oil and Gas agreed to reconsider its decision on the State
Right-of-Way (ROW) agreement and lease authorization for the buried
natural gas pipeline. Under the reconsideration, on September 10,
2020, the ADNR issued for additional public comment a revised
Consideration of Comments document. This document further describes
how the ADNR is considering previous public input that was
solicited in the ROW review, including how cumulative effects are
addressed in the decision. The comment period on the document ended
on November 9, 2020. It is expected that the ADNR will re-issue the
ROW agreement and lease authorization in the first half of
2021.
- Donlin Gold, working with its Native
Corporation partners, continues to support the State of Alaska to
advance other permits and certificates needed for the project.
President’s Message
Donlin Gold and Alaskan resilience
As spring arrives and many of us note the anniversary of the
COVID-19 global pandemic, we all reflect on the past year and the
challenges that affected our families, our communities, and our
organizations. I am proud of the accomplishments of the NOVAGOLD,
Barrick and Donlin Gold teams in executing the 2020 drill program
while remaining ever-mindful of the risk posed by COVID-19 and
adhering to the stricter health protocols put in place in our
workplaces in response. By far, our most important objective in
2020 was to protect the health and safety of our workforce,
contractors, and partners. Despite the added challenge of
navigating a pandemic, all Donlin Gold 2020 drill program
objectives were achieved and accomplished with zero COVID-19 cases
on site and no Lost-Time Incidents.
By working closely with our partners at Barrick and our Alaska
Native Corporation partners, Calista and TKC, we strengthened and
deepened our relationships with local communities. The past year
has reminded all of us at NOVAGOLD of the tenacity, resilience, and
flexibility of our partners and our team. I extend my most sincere
appreciation to Donlin Gold, its workforce, as well as Calista and
TKC for their dedication to the highest standards of safety, social
responsibility, and environmental stewardship.
The State of Alaska is a leader among the United States in
COVID-19 vaccination availability, with Governor
Dunleavy announcing in early March that vaccinations are now
available to everyone aged 16 and older living and working in
Alaska. The success of the vaccination campaign in the Y-K
region can be credited in large part to the leadership of the
Yukon-Kuskokwim Health Corporation (YKHC) and Native health
partners, who made access to the vaccines at grocery stores
possible without appointment, thereby removing a barrier for those
who did not want to go to the hospital or did not have
transportation. In addition, the YKHC made home visits to serve as
an extension of the distribution network among village medical
clinics. By February, the Y-K Delta became one of the Nation’s
leaders in COVID-19 vaccination. This achievement bodes well for an
eventual return to something close to normal life within the Y-K
region where the Donlin Gold project is located.
Donlin Gold drill program and value
The hard work of the past year and first quarter of 2021 also
yielded valuable results in the form of generating additional
detailed information about the deposit. We are proud of the fact
that, despite the global pandemic, we were able to carry out the
largest drill program at Donlin Gold since 2008. We did so with
extensive communication and application of strict health and safety
protocols, resulting in zero COVID-19 cases at the project site and
no Lost-Time Incidents. The knowledge we gained was enormous. We
were gratified by the fact that drilled grade-thicknesses within
both ACMA and Lewis deposits exceeded those predicted by previous
modeling, with higher grades observed over narrower intervals,
particularly in sedimentary rocks. These have bolstered our
confidence in Donlin Gold’s recent geologic modeling concepts
developed jointly by the Barrick and NOVAGOLD teams. We also
encountered multiple high-grade extensions in both
the intrusive (igneous) and sedimentary rocks, including near
surface. One such near surface hit in drill hole DC20-1938
intersected 17.96 m grading 10.5 g/t gold. While impressive in its
own right, this intercept included a sub-interval of 3.96 m
grading 28.0 g/t gold starting at 1.83 m drilled depth5. The
exceptional results Donlin Gold has received, from the outset right
up to the latest set of results, is indicative of the extraordinary
nature of this deposit.
Now, equipped with outstanding assay results from the 2020 drill
program, we are well positioned to update our geologic model. and
follow up on new targets. Additional confirmation and extension
drilling is being planned for the 2021 field season after which it
is anticipated that, on the completion of the updated geologic
model and, subject to a formal decision by the Donlin Gold LLC
Board, the focus will then shift to updating the feasibility
study.
With approximately 39 million ounces of gold in measured
and indicated mineral resources grading 2.24 grams
per tonne6, Donlin Gold is indeed rare, particularly
given that no new major gold discoveries have been made in the past
four years. Furthermore, and perhaps more importantly, Donlin
Gold’s grade, which is twice the industry average7, is simply
incredible. Size and grade are not the only attributes that make
Donlin Gold unique. The project has tremendous exploration
potential, especially considering that its gold endowment is
contained within only three kilometers of an
eight-kilometer mineralized belt, itself limited to a mere five
percent of the property.
Discussion of Donlin Gold’s unique status would not be complete
without special recognition of the fact that it is located in
Alaska, a Tier One jurisdiction8. In an environment in which
governments can either physically or, through legislation or other
means, effectively seize an asset, we are grateful that Donlin Gold
is located in Alaska where there is a time-tested culture of
support and respect for responsible and sustainable mine
development. And in that regard, we are confident that NOVAGOLD’s
seasoned management team, which has worked together since 2012,
supported by its well-developed partnership with Barrick as well as
Native Corporations, can advance this unique project up the value
chain in a technically advanced, safe, as well as environmentally
and socially responsible manner. Therefore, it is not surprising
that NOVAGOLD has become a go-to investment for some of the wisest
investors in the space.
Building better through community
partnerships
Donlin Gold is fortunate to have time-tested partnerships with
Calista and TKC, owners of the mineral and surface rights,
respectively. The project’s location on private land specially
designated for mining activities through the 1971 Alaska Native
Claims Settlement Act is a key attribute that distinguishes it from
most other mining assets in Alaska. Our commitment to meaningful
tribal consultation throughout project development and permitting
has been tested over decades of reliable and dependable engagement
with the community. We are proud to provide significant economic
and social benefits to the Y-K region.
In the first quarter of 2021, Donlin Gold continued outreach
activities in support of local communities. These were carried out
in strict adherence to COVID-19 protocols. In partnership with TKC,
the village of Crooked Creek, and Napaimute Tribe, Donlin Gold was
the lead sponsor of a project to construct and maintain the upper
portions of an ice road on the Kuskokwim River and provide
technical data to assist the road builder, including aerial
photographs and ice measurements along the river. The work done on
the ice road has greatly improved safety and access to nearby
communities for residents in remote locations. At its completion in
February 2021, the Kuskokwim ice road was approximately 200 miles
long.
In mid-January, the village of Tuluksak with a population of
about 370 in the Middle Kuskokwim region had its “washeteria” water
purification plant destroyed by fire, creating a health and safety
crisis for the community. As neighbors of the villages in the Y-K
region and as a team largely 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
worked closely with the Tuluksak Tribal Administrator and the
tribal council to assess how Donlin Gold could best help and to
coordinate support efforts. In the days following, Donlin Gold,
together with several other community organizations, companies, and
individuals, stepped in to assist – providing drinking water,
buckets for carrying and storing water, sanitary wipes, diapers,
and other health supplies. Donlin Gold team members traveled to
Tuluksak via the ice road and delivered 100 five-gallon reusable
containers of water to be distributed to each household in the
community. They also backhauled a truck load of empty water bottles
and brought them to Northern Air Cargo to be shipped to a recycling
facility in Anchorage. Shortly after the fire, Donlin Gold worked
with Alaska Commercial Company and Fox Air in Bethel to deliver to
some 120 cases of water along with basic needs items,
including paper towels, baby wipes, hand sanitizer as well as
liquid and bar soap to the village as quickly as possible. Donlin
Gold also arranged for DesertAir to donate a DC-3 flight directly
from Anchorage to Tuluksak to bring a second delivery of water
tanks, containers, and pumps, including hose assemblies, totes for
washing and bathing, scrub brushes for cleaning, 50 more cases of
water, and other supplies.
Six Friendship Agreements formalizing current engagement with
key local Y-K region communities have been finalized to date
(Akiak, Sleetmute, Napaimute, Crooked Creek, Napaskiak, and
Nikolai). These agreements include educational, environmental,
social and economic development initiatives to support the
villages. Additionally, Donlin Gold continued its long-term support
of a team from the Y-K region for the annual Iron Dog snowmobile
race in February. Donlin Gold also worked with TKC, the State
of Alaska and the Alaska Native Tribal Health Consortium in an
initiative to upgrade – as well as improve the health and safety
standards of – water and sewer services in Middle Kuskokwim area
communities. These partnerships, activities, and programs
demonstrate NOVAGOLD’s, as well as Barrick’s, commitment to
sustainable and responsible development for the benefit of all
stakeholders in the Y-K region.
Advancing permits and creating value
During the quarter, Donlin Gold continued to work with
State agencies, in coordination with its Native Corporation
partners, to advance remaining permits and approvals needed for the
project. The ADNR published a public notice for comment on Donlin
Gold’s 12 applications for water rights for the mine site and
transportation facilities, which closed on December 15, 2020. Water
rights are for local surface water sources and groundwater to be
used for process water, dust control, fire protection and potable
water. In the first quarter, with Donlin Gold’s support, ADNR
introduced a second two-week public notice period to address
concerns about the legal language used in the previous public
notice as well as concerns about the public’s ability to review the
subject applications, which notice period closed on March 26. We
anticipate ADNR will issue final decisions on the water rights
applications in the first half of 2021.
In April 2020, the ADNR’s Division of Oil and Gas agreed to
reconsider its decision on the State ROW agreement and lease
authorization for the buried natural gas pipeline. Under the
reconsideration, in September 2020, the ADNR issued for additional
public comment a revised Consideration of Comments document. This
document further illustrates how the ADNR is considering previous
public input that was solicited in the ROW review, including how
cumulative effects are addressed in the decision. The comment
period ended on November 9, 2020 and we anticipate ADNR will
re-issue the ROW agreement and lease authorization in the first
half of 2021.
My report would not be complete without a proper reference to
NOVAGOLD’s strong financial position. As of February 28, 2021,
we had $114.2 million in cash and term deposits. In July 2021, we
expect to receive an additional $75 million from Newmont resulting
from the sale of our 50% interest in the Galore Creek project in
2018. 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.
I wish to thank the experienced team
of professionals at NOVAGOLD, Donlin Gold and
Barrick – as well as the stellar 2020 drilling contractor teams. We
are proud of your professionalism and unrelenting commitment to
safety, especially at a time when COVID-19 presented us with major
challenges. I would also like to recognize the importance of the
great mutual support we have been experiencing with our Native
Corporation partners, Calista and TKC, particularly during the
ongoing pandemic.
As we move forward together, allow me once again to express
sincere appreciation to my dedicated colleagues on
the NOVAGOLD Board for their unwavering support,
keen engagement, and commitment to best governance practices.
It is a pleasure to serve with you. My gratitude also
goes to the various State agencies for their diligent and
professional work and adherence
to well-established regulatory procedures, particularly
during these challenging times.
Lastly, we are blessed to have a stellar group of long-term
shareholders supporting the value of our strategy. To all of our
shareholders, including Paulson & Co., Fidelity Investments,
BlackRock, the Saudi Public Investment Fund, First Eagle, EXOR, and
Van Eck, among others, NOVAGOLD is thankful for your continued
dedication, engagement, and encouragement. This is especially
noteworthy during a global pandemic – a result of our team’s
flexibility and adaptability. The strong relationships that we
enjoy with everyone from our retail shareholders to our
institutional shareholders were deepened, and many have added to
their positions in the past several months. NOVAGOLD will continue
to apply its efforts to deliver on its strategy to increase
shareholder wealth in a safe and socially responsible manner. Best
of health and safety to all.
Sincerely,
Gregory A. LangPresident & CEO
Financial Results
in thousands of U.S. dollars, except for per share
amounts
|
Three months endedFebruary 28,
2021$ |
Three months endedFebruary 29,
2020$ |
General and administrative expense (1) |
5,329 |
4,714 |
Equity loss – Donlin Gold |
1,968 |
1,568 |
Total operating expenses |
7,297 |
6,282 |
|
|
|
Loss from operations |
(7,297) |
(6,282) |
Interest expense on promissory note |
(1,434) |
(1,760) |
Accretion of notes receivable |
854 |
824 |
Other income (expense), net |
(79) |
887 |
Income tax expense |
— |
(264) |
Net loss |
(7,956) |
(6,595) |
|
|
|
Net loss per common share, basic and diluted |
(0.02) |
(0.02) |
|
At February 28,
2021$ |
At November 30, 2020
$ |
Cash and term deposits |
114,193 |
121,906 |
Total assets |
218,040 |
224,441 |
Total liabilities |
113,180 |
113,714 |
(1) Includes share-based compensation expense of $2,042 and
$1,761 for the first quarter-ended February 28, 2021 and
quarter-ended February 29, 2020, respectively.
For the first quarter ended February 28, 2021,
NOVAGOLD’s share of Donlin Gold losses increased from
$1.6 million in 2020 to $1.9 million in 2021 due to the work
in completing the 2020 drill program assays.
General and administrative expense increased from
$4.7 million in 2020 to $5.3 million in 2021 primarily due to
higher share-based compensation costs, salaries, and legal
fees.
In the first three months of 2021, total cash, cash
equivalents and term deposits decreased by $7.7 million of which
$4.3 million was used in operating activities for administrative
costs and working capital changes, $2.9 million was used to
fund Donlin Gold and $0.7 million related to withholding taxes paid
on vested performance share units (PSUs). Effects of exchange rate
changes also increased cash by $0.3 million.
Net cash used in operating activities of continuing
operations increased by $0.8 million, due to lower interest income
and higher general and administrative costs. Net cash provided from
(used in) investing activities included a $0.3 million increase in
Donlin Gold funding due to the work in completing the 2020 drill
program assays. Term deposits were reduced by $10 million in the
first quarter with the proceeds deposited in interest-bearing
savings accounts.
As of February 28, 2021, we had cash and cash
equivalents of $63.2 million and term deposits of $51.0 million. In
July 2021, we expect to receive $75 million from the first note
receivable from Newmont in relation to the 2018 sale of our 50%
interest in the Galore Creek project. The term deposits are
denominated in U.S. 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 continue to anticipate spending approximately
$31 to $35 million in 2021, which includes $18 to $22 million
to fund our share of expenditures at the Donlin Gold project ($11
million for the 2021 drilling program, camp improvements and
studies; $7 million for permitting, community engagement and
administration; and an additional $4 million for other studies
contingent upon mid-year approval by both owners) 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. Our operations primarily
relate to the delivery of project milestones, including the
achievement of various technical, environmental, sustainable
development, economic and legal objectives, obtaining necessary
permits, completion of feasibility studies, preparation of
engineering designs and the financing to fund these objectives.
Conference Call & Video Webcast Details
NOVAGOLD’s conference call and video webcast to discuss these
results will take place April 1, 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: |
http://services.choruscall.ca/links/novagold20210401.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),9 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 Donlin Gold FS as defined below, 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. An important factor
that distinguishes Donlin Gold from most other mining assets in
Alaska is that the project is located on private land designated
for mining activities five decades ago. Donlin Gold has entered
into life-of-mine agreements with Calista, which owns the
subsurface mineral rights, and TKC, a collection of 10 village
corporations, which owns the 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 by the Alaska Native Claims Settlement Act (ANSCA) of
1971, which resolved Alaska Native land claims, allotting 44
million acres of land for use by Alaska Native Corporations.
Additionally, our long-term commitment to economic development 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.
QA/QC Procedures
The QA/QC procedures for the 2020 Donlin Gold drill program and
sampling protocol were developed and managed by Donlin Gold LLC and
overseen by Barrick and NOVAGOLD. The chain of custody from the
drill site to the sample preparation facility was continuously
monitored. All samples are HQ-diameter core. Approximately 93% core
recovery was achieved. Core was logged, cut, and sampled at site by
Donlin Gold employees. Samples were primarily collected on
two-meter lengths, with a minimum length of 0.3 meters and
maximum length of approximately 3.5 meters. Sampled half-core was
crushed and pulverized in ALS Limited’s Fairbanks, Alaska;
Whitehorse, Yukon; or Vancouver, British Columbia sample
preparation facilities. Pulp samples were sent to the ALS labs in
Vancouver, British Columbia; Lima, Peru; or Reno, Nevada for gold
assays and to labs in Vancouver, British Columbia or Lima, Peru for
multi-element analysis. At least 14 quality control samples
(four standards, four coarse blanks, two pulp blanks, two coarse
duplicates, and two pulp duplicates) were inserted into each batch
of 80 samples. The review of the quality control samples did not
indicate any bias or error. There are no known factors that would
materially affect the accuracy or reliability of the drill program
data referred to in this media release.
Downhole directional surveys were completed on all reported
completed holes by both Boart Longyear drill operators and on 96%
of reported completed holes by DGI Geoscience Inc. technicians, and
collar surveys were completed on all holes by Professional Licensed
Surveyors from either Rowland Engineering Consultants or Brice
Engineering LLC.
Each of ALS Limited, Boart Longyear, DGI Geoscience Inc.,
Rowland Engineering Consultants, and Brice Engineering LLC are
independent of Donlin Gold, Barrick, and NOVAGOLD.
Scientific and Technical Information
Certain scientific and technical information contained herein
with respect to the Donlin Gold project is derived from the “Donlin
Creek Gold Project Alaska, USA NI 43-101 Technical Report on Second
Updated Feasibility Study” prepared by AMEC with an effective date
of November 18, 2011, as amended January 20, 2012 (the “Second
Updated Feasibility Study”). Kirk Hanson, P.E., Technical Director,
Open Pit Mining, North America, (AMEC, Reno) is the Qualified
Person responsible for the preparation of the independent technical
report, and an independent “qualified person” as defined by NI
43-101. Wood Canada Limited (“Wood” formerly AMEC Americas Limited)
is currently updating all sections of the Second Updated
Feasibility Study with updated costs, economic assessment,
permitting information, and technical information related to
permitting, generated on the Donlin Gold project since 2011, which
is anticipated to be finalized and filed during 2021. Based on that
cost review, Wood determined that updating the Second Updated
Feasibility Study using 2020 costs and new gold price guidance
results in no material change to the mineral resources or mineral
reserves. The economic assessment in the updated study may be
materially different than in the 2011 study.
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 2020 Donlin Gold drill program contained in this
media release. To verify the information related to the drilling
program, he visited the project site twice during the 2020 field
season; discussed and observed logging, sampling, and sample
shipping processes with responsible site staff; discussed and
reviewed assay and QA/QC results with responsible personnel; and
reviewed supporting documentation, including drill hole location
and orientation and significant assay interval calculations.
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 work program for the 2021 field season, anticipated
benefits from the 2020 drill program including an improved
geological model for Donlin Gold; the update to the Second Updated
Feasibility Study and the results and timing thereof, 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; the timing and
likelihood of permits, including but not limited to the re-issuance
of the ROW agreement and lease authorization for the project’s
buried natural gas pipeline; the statements under the heading “2021
Outlook”; and future share price performance of NOVAGOLD. 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
NOVAGOLD’s management expectations, 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
permits including but not limited to the right-of-way lease offer
for the project’s buried natural gas pipeline; 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, and 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 See NOVAGOLD media release dated March 25, 2021, “Donlin Gold
Announces Assay Results from the Remaining 30 Percent of the 2020
Drill Program”. 2 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 cash costs over the production life
that are in the lower half of the industry cost curve.3 See
Footnote 1.4 Drill intercepts disclosed in the March 25, 2021 media
release “Donlin Gold 2020 Announces Assay Results from the
Remaining 30 Percent of the 2020 Drill Program”
https://www.novagold.com/_resources/news/2021-03-25.pdf.
Significant intervals represent drilled intervals and not
necessarily true thickness of mineralization. Mineralized intervals
meet or exceed 3 meters in length above 1 g/t. A maximum of 4
meters of continuous dilution (< 1 g/t) is permitted.
g/t = grams per tonne; m = meters.5 Drill intercept disclosed in
the March 25, 2021 media release “Donlin Gold 2020 Announces Assay
Results from the Remaining 30 Percent of the 2020 Drill Program”
https://www.novagold.com/_resources/news/2021-03-25.pdf.
Significant intervals represent drilled intervals and not
necessarily true thickness of mineralization. Mineralized intervals
meet or exceed 3 meters in length above 1 g/t. A maximum of 4
meters of continuous dilution (< 1 g/t) is permitted.
g/t = grams per tonne; m = meters.6 Donlin Gold data as per the
Donlin Gold FS (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 43-101.7 2020 average grade of open
pit and underground deposits with gold as primary commodity and
over 1Moz in measured and indicated resources is 1.12 g/t, sourced
from S&P Global Market Intelligence.8 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 5.9 Donlin
Gold data as per the Donlin Gold FS (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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