NOVAGOLD Reports Fiscal Year 2022 Financial Results 2022 Drill Program Delivers Excellent Results that Support Next Steps for Donlin Gold; Healthy Treasury of $126 Million in Cash and Term Deposits, with $25 Million of Receivables in 2023
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NOVAGOLD Reports Fiscal Year 2022 Financial Results
2022 Drill Program Delivers Excellent Results that Support Next Steps for Donlin Gold;
Healthy Treasury of $126 Million in Cash and Term Deposits, with
$25 Million of Receivables in 2023
NOVAGOLD’s strong cash position of $126 million as of November 30, 2022, with additional funds of $25
million due in July 2023 from Newmont Corporation, should be sufficient to advance Donlin Gold t hrough
an updated feasibility study.
The 42,331-meter (m) 2022 drill program was completed ahead of schedule and under budget. The Donlin
Gold joint release issued by NOVAGOLD and Barrick on January 19, 2023 reported results that reconcile
favorably with the resource model as well as further support the global resource estimate and recent
modelling concepts.
With an increased appreciation of the geology, the experienced team will continue to focus on updating
the resource model and completing trade-off studies — all of which are moving Donlin Gold up the value
chain and leading toward an updated feasibility study decision to position the project well for the next leg
in gold’s long-term bull market.
January 25 , 2023 - Vancouver, British Columbia – NOVAGOLD RESOURCES INC. (“NOVAGOLD” or “the
Company”) (NYSE American, TSX: NG) today released its 2022 fiscal year financial results and an update on
Donlin Gold, among the largest — and envisioned to be in the lower quartile in terms of operating cost — of
the next generation of gold operating mines, and more importantly in a jurisdiction that welcomes responsible
development. Donlin Gold LLC is owned equally by NOVAGOLD and Barrick Gold Corporation (“Barrick”).
Details of the financial results for the fiscal year ended November 30, 2022 are presented in the consolidated
financial statements and annual report on Form 10-K filed on January 25, 2023 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.
In 2022, the following milestones were achieved at Donlin Gold:
The comprehensive 141-hole, 42,331-meter drill program was successfully completed ahead of schedule,
with multiple high-grade gold intercepts reported from the last set of assays and the advancement of key
project efforts.
The success of our 2022 drill program is due to the exceptional dedication of the Donlin Gold team in
Anchorage and at site, the majority of which are local hires from 24 different communities in the Yukon -
Kuskokwim (“Y-K”) region, who all share the goal of protecting the health and safety of their colleague s.
In partnership with Calista Corporation (“Calista”) and The Kuskokwim Corporation (“ TKC”), the Company
pursued its stakeholder and government engagement efforts in the Y-K region, Alaska and Washington,
D.C.:
Crooked Creek, the closest community to the project site in the Y-K region formally expressed its
support of Donlin Gold;
Four additional Shared Value Statements were signed with Y-K villages, for a total of 12;
Five local hires from the 2022 drill program signed on as Donlin Gold Community Liaison
representatives in their villages (Marshall, Tuluksak, Nikolai, Napaskiak, and Pilot Station); and
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Calista and Donlin Gold continued their proactive, bipartisan outreach in Alaska as well as with the
Administration and Congress in Washington, D.C.
Environmental and social investment focused on the Y-K region spanned from supporting important
health and safety initiatives in remote communities to cultural preservation efforts and educational
programming in collaboration with school districts and other organizations. Key achievements included :
Conducted multiple fishery studies, reclamation work and other environmental activities.
Supported various search and rescue teams in the region, funded the Healthy Alaska Natives
Foundation and Bethel Community Services Foundation, as well as sponsored and participated in
the Alaska Safe Riders initiative, which promotes safety for year-round outdoor sports.
Fostered education, community wellness and cultural preservation through a variety of
interventions including several river studies, supported the local school district and educational
organizations, funded and participated in youth sporting activities, and backed initiatives led by
Traditional Councils and Native communities.
As a federally permitted project on private Alaska Native Corporation land designated by law for mining
activities and with key State permits in hand, activities continued to keep our permits in good standing .
Major milestones included:
Applied for a new air quality permit from the Alaska Department of Environmental Conservation
(ADEC). A draft permit was issued for public comment in December 2022.
Submitted application to ADEC for the regularly scheduled re-issuance of its Alaska Pollutant
Discharge Elimination System permit, which is now complete and will remain in effect until the
State completes the re-issuance.
On November 1, 2022, the Alaska Department of Natural Resources (ADNR) finalized the re -
location plan for public easements in the mine site and transportation facility areas — decisions
which were not appealed.
President’s Message
Excellent Results from the 2022 Drill Program Support Next Steps for Donlin Gold
NOVAGOLD’s management team has been together for a decade now and is committed to the advancement
of the 50%-owned Donlin Gold project to be perfectly situated for the next leg in the gold bull market. Many
activities have taken place over the years to support Donlin Gold and de-risk the project to enable it to benefit
from a rising gold price environment. These include, among many others, the receipt of key F ederal and State
permits, geological and exploration drilling, technical and trade-off studies, environmental initiatives,
successful implementation of employee health and safety procedures, and extensive community engagement
and government affairs efforts. This last year was no exception as activities substantially ramped-up at the
start of the year with the project camp reopening to begin the largest drill program in over 15 years at Donlin
Gold. This campaign was executed while remaining attentive to the health and safety of our employees,
project contractors and stakeholders, and concurrently with the extensive community relations and
government affairs efforts conducted in collaboration with our Alaska Native Corporation partners, Calista and
TKC. The success of this program is due to the exceptional dedication of the Donlin Gold team in Anchorage
and at site, the majority of which were local hires from 24 different communities in the Y-K region, who all
share the goal of protecting the health and safety of their colleagues.
Donlin Gold’s 2022 drill program was completed in September with 141 holes drilled for a total of 42,331 m.
The final set of results released jointly with Barrick on January 19, 2023, include assays
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for 37 complete and 7 partial holes, encompassing the remaining 12,762 m of length drilled. Drilling in 2022
returned some of the best assay results seen to date at Donlin Gold, delivering outstanding gold intercepts
which include, among others from the most recent set of assay results, drill hole DC22-2130 that intersected
17.20 m grading 11.11 g/t gold, with a sub-interval of 4.25 m grading 36.91 g/t gold.
As part of the key focus areas for the drill program, tight-spaced 20m x 20m grid drilling in representative
areas within the main structural domains of the deposit (Lewis –further infilled to 10m x 10m, West ACMA and
Divide areas) confirmed recent geological modelling at wider drill-spacing in the immediate area surrounding
the grids. It also identified additional short-scale controls that will be incorporated into an update to refine the
geological domains used for global resource estimation, which will be utilized for strategic mine planning
work. The 14 additional geotechnical drill holes provided information needed to advance the application for
the Alaska Dam Safety Certifications. In truth, we could not be happier with the outcome of the 2022 drill
program; the assay labs returned some of the best intercepts since the project’s inception and indeed among
open-pit gold projects industry-wide. Just to highlight how encouraging the results were, what follows are the
top 20 intercepts from the 2022 Donlin Gold drill program:
Hole ID Location Date Reported From (m) To (m) Length (m)
Grade
(g/t Au)
DC22-2068 Divide 11/01/2022 117.52 159.80 42.28 30.68
DC22-2077 Divide 11/01/2022 150.11 199.07 48.96 20.61
DC22-2040 ACMA 07/28/2022 232.95 285.22 52.57 14.63
DC22-2063 Divide 11/01/2022 236.22 297.18 60.96 12.35
DC22-2063 Divide 11/01/2022 162.18 181.92 19.74 34.17
DC22-2056 ACMA 07/28/2022 99.82 173.80 73.98 4.21
DC22-2092 Divide 11/01/2022 116.12 157.31 41.19 6.64
DC22-2063 Divide 07/28/2022 130.04 142.14 12.10 22.15
DC22-2086 Divide 11/01/2022 160.87 170.78 9.91 22.24
DC22-2120 Lewis 11/01/2022 41.86 71.73 29.87 6.96
DC22-2040 ACMA 07/28/2022 197.60 216.25 18.65 10.78
DC22-2067 ACMA 07/28/2022 464.06 508.64 44.58 4.50
DC22-2072 Divide 11/01/2022 140.67 148.61 7.94 24.65
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DC22-2056 ACMA 07/28/2022 2.44 13.33 10.89 17.55
DC22-2130 Lewis 01/19/2023 902.45 919.65 17.20 11.11
DC22-2110 Lewis 11/01/2022 157.98 164.53 6.55 28.96
DC22-2081 Divide 11/01/2022 179.90 201.10 21.20 8.73
DC22-2183 Lewis 01/19/2023 62.53 86.80 24.27 7.56
DC22-2177 Lewis 01/19/2023 168.51 197.82 29.31 6.01
DC22-2109 Lewis 11/01/2022 94.22 120.70 26.48 6.65
With this highly successful drill program behind us, to be followed by the completion of an updated resource
model and trade-off studies, the owners look forward to supporting the Donlin Gold team and its partners
Calista and TKC in positioning the project for the next steps in taking Donlin Gold up the value chain with an
updated feasibility study decision for the benefit of all stakeholders.
Developing one of the world’s largest gold mines represents a substantial undertaking that takes the
necessary time and energy to ensure a diligent, thorough, transparent, and inclusive process for all involved,
including stakeholders from the Y-K region. But I can also tell you from my own experience with multiple Tier-
1 assets — including as President of Barrick North America for eight years, which is when I realized just how
spectacular the Donlin project really is — I believe that the more intensive work that is done on the front end,
the better the long-term outcome. Richard Williams, our Vice President of Engineering & Development , shares
that philosophy. As the man who built and brought the famed Pueblo Viejo mine into production for Barrick,
he too felt that in joining NOVAGOLD he was aligning himself with the best-in-class for the gold industry’s
future.
This shared philosophy is particularly meaningful for a project that is by any definition not just Tier-1 but
generational. As committed partners to the second largest gold-producing state in one of the world’s premier
jurisdictions, we welcome a process that enhances our social and environmental license for a mine that we
fully expect to operate for decades to come.
A Healthy Workforce to Safely Advance Site Activities and Support Local Communities
Keeping our workforce healthy and safe has always been a top priority for NOVAGOLD and at Donlin Gold.
This also extends to health and safety initiatives in the surrounding communities where we operate. The safety
protocols and meetings at the project site played a central role in ensuring the continued success of Donlin
Gold and its drill program in 2022. We are immensely proud that Donlin Gold achieved zero Lost-Time-
Incidents once again in 2022 — a remarkable achievement that we do not take for granted as we continue to
work and improve practices to ensure the health and safety of our people.
One of the key areas in which we spend a considerable amount of time and resources at the Donlin Gold
project is participating, funding, and supporting local communities in initiatives associated with health and
safety, environmental management, training and education, and cultural programming throughout the Y -K
region. This has represented a fundamental undertaking by Donlin Gold over the years — for the benefit of all
stakeholders. Local recruitment is also an important part of our ongoing efforts. During the 2022 field season,
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150 employees worked at the Donlin Gold site representing 24 Y-K villages. Local hires from the 2022 drill
program will continue to support Donlin Gold’s engagement efforts through the Community Liaison program
in five Y-K villages.
We immensely appreciate the meaningful input from Calista and TKC regarding their land and the significant
economic needs required to sustain healthy living for their communities. Our partners’ continued and time -
tested collaboration, project support, and full engagement are extremely valuable in ensuring responsible and
sustainable economic development throughout all phases of the Donlin Gold project. Crooked Creek, the
closest community to the project site in the Y-K region, formally expressed their support of Donlin Gold in
December 2022. Four additional Shared Value Statements were also signed with villages in the Y-K region in
the last three months, for a total of 12. These documents formalize current engagement with key local
communities, expand upon the long-term relationships already established with them, and address specific
community needs including water, sewer, and solid waste projects; the ice road that connects remote villages
in the Y-K region; salmon and other aquatic life studies; and suicide prevention and public safety programs.
Environmental stewardship, education, community wellness, and cultural preservation constitute key focus
investments for Donlin Gold in the Y-K region. The project supports these initiatives through fisheries studies
and other environmental activities, subsistence and cultural preservation efforts, and educational grants. A
wide range of activities and projects were carried out in collaboration with Calista and TKC in the fourth
quarter. Donlin Gold supported various search and rescue teams in the region, provided funding to the
Healthy Alaska Natives Foundation and Bethel Community Services Foundation, as well as sponsored and
participated in the Alaska Safe Riders initiative, which promotes safety for year-round outdoor sports. Donlin
Gold fostered education, community wellness and cultural preservation through a variety of interventions
including several river studies, supporting the local school district and educational organizations, funding and
participating in youth sporting activities, and backing initiatives led by Traditional Councils and Native
communities.
In 2022, several community engagements and critical support initiatives took place across the region. Donlin
Gold funded the 270-mile-long Kuskokwim ice road developed to improve safety to nearby communities — a
significant undertaking during the winter months to connect many communities along the Kuskokwim River
and provide road access to residents living in remote locations. With support from TKC, Donlin Gold supplied
safe drinking water to the village of Red Devil following a flood that was caused by ice break -up and which
temporarily contaminated the local water wells. We funded and participated in the fifth annual “In It for the
Long Haul” Backhaul Project to collect, remove, and safely dispose of household hazardous and electronic
waste from some 30 remote villages throughout the Y-K region that would otherwise have ended up in
landfills and waterways. As advocates of training and youth educational initiatives, Donlin Gold supported
EXCEL Alaska, a non-profit organization providing life-changing educational and professional opportunities for
rural Alaska students and young adults, and the Lower Kuskokwim School District annual College and C areer
fair. We also collaborated with six Y-K school districts as part of the national Yup’ik Dictionary Project.
Additionally, Donlin Gold funded community investments through the Bethel Community Services Foundation
for the development, growth, and enhancement of community-based programs.
Calista and Donlin Gold continued their proactive, bipartisan outreach in Alaska and with the Administration
and Congress in Washington, D.C. to highlight the thoroughness of the project’s environmental review and
permitting processes, in addition to the considerable benefits that the project would deliver to all Native
Alaskans. Alaska U.S. Senators Lisa Murkowski and Dan Sullivan, as well as Governor Michael Dunleavy, have
been long-term supporters of the Donlin Gold project. We also recognize the historic re-election of U.S.
Representative Mary Peltola for a full term as the first Alaska Native to join Congress and look forward to our
continued outreach to her regarding Donlin Gold in the coming year.
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A Diligent, Thorough, and Transparent Permitting Process to Maintain Permits in
Good Standing and Complete the Required State Permitting
Donlin Gold is a federally permitted project on private Alaska Native Corporation land designated, by law, for
mining activities as part of the 1971 Alaska Native Claims Settlement Act (ANCSA) — a considerable
differentiating factor from most other mining assets in Alaska. As private landowners, both Calista and TKC are
dedicated to developing Donlin Gold in a way that remains consistent with the Elders’ vision of responsible
development, while creating jobs and economic benefits for the surrounding communities as well as
protecting the local culture. As someone who has visited many of the world’s greatest mining districts, I feel
extremely lucky to be operating in the great State of Alaska.
In 2022, Donlin Gold applied for a new air quality permit from the ADEC and a draft permit was issued for
public comment in December 2022. Donlin Gold also submitted its application to ADEC for the regularly
scheduled re-issuance of its Alaska Pollutant Discharge Elimination System permit. In December 2022, ADEC
sent a letter indicating that the application was complete, and that the permit would remain in effect until
ADEC completes the reissuances process. On November 1, 2022, the ADNR finalized the re-location plan for
public easements in the mine site and transportation facility areas — decisions which were not appealed.
We have always prepared and organized Donlin Gold for potential challenges to the Federal and State permits
as this is the norm in the United States. The Donlin Gold project leadership and litigation teams are intimately
familiar with the permits and the associated procedures that need to be followed. Donlin Gold and its owners,
alongside the steadfast advocacy of Calista and TKC, continue to support the State and Federal government
agencies in the defense of what has constituted an exceptionally thorough and diligent permitting process.
Excellent Treasury to Execute on Activities in 2023
NOVAGOLD’s well-executed strategy to take Donlin Gold up the value chain has allowed the Company to
remain in a strong financial position. The Company has not issued equity to raise capital since January 2012,
and we believe that we have sufficient funds to cover anticipated costs to fund our share of the Donlin Gold
project through an updated feasibility study. We have approximately $126 million in cash and term deposits as
of November 30, 2022 and expect an additional $25 million due from Newmont in July 2023 from the sale of
our 50%-owned Galore Creek project in British Columbia. A further payment of $75 million is contingent upon
a construction decision on Galore Creek.
Looking ahead to 2023, NOVAGOLD anticipates spending approximately $31 million, with approximately $17
million allocated to fund our share of expenditures at the Donlin Gold project. This includes $ 8 million for
external affairs, permitting, environmental, land, and legal activities and $9 million for project planning and
fieldwork. A total of $13 million is allocated for NOVAGOLD general corporate and administrative costs and $1
million for working capital and other items.
The focus areas at Donlin Gold will be to update the geologic and resource models with 2022 data; r eview key
project assumptions, inputs, and design components for optimization (mine engineering, metallurgy,
hydrology, and infrastructure); complete trade-off studies; continue fieldwork to collect geotechnical and
hydrological information for completing design documentation required for the Alaska Dam Safety certificates,
as well as advance permits through the regulatory process and support the State in maintaining the existing
permits under appeal; and through continued engagement, sustain and expand project support in the region.
As a direct consequence of the success that characterized last year’s large-scale drill program in achieving its
objectives, our focus this year will be on advancing trade-off studies and advancing the Donlin Gold project
toward a decision to commence an updated feasibility study.
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Donlin Gold — An Absolute Gem to Advance Up the Value Chain in a Jurisdiction that
Welcomes Responsible Mining Development
As the premier gold deposit located in Alaska, Donlin Gold represents a potential source of responsible
economic development for the benefit of all stakeholders in the second largest gold -producing state in the
United States, with its well-established tradition of responsible mining, and an opportunity to provide long-
term, sustainable economic growth for many decades to come.
Moreover, Donlin Gold truly stands in a league of its own within the gold industry itself. With approximately 39
million ounces of gold grading 2.24 grams per tonne1 in the Measured and Indicated Mineral Resource
categories (100 percent basis), Donlin Gold hosts one of the largest and highest-grade undeveloped open-pit
gold endowments in the world. And we believe it has an extraordinary capacity to grow . The most recent 2022
drill program results clearly demonstrate remarkable additional upside potential. The ACMA and Lewis pits,
where the existing resources sit, occupy only three kilometers of an eight-kilometer mineralized belt, which
itself is located on less than 5% of Donlin Gold’s land position. As currently envisioned, the project would
produce an average of 1.1 million ounces per year over its 27-year mine life.
The gold industry in general, and unique high-quality assets such as Donlin Gold in particular, require patience
— an attribute that we have demonstrated extensively over the last decade, and which has proven beneficial in
allowing us to substantially de-risk the project and the Company. Donlin Gold is indeed brilliantly positioned
for this next leg in the gold market. As stated by our Chairman, our largest shareholder and a well-seasoned
investor with extensive experience in gold, platinum, silver and hydrocarbons, Dr. Thomas S. Kaplan : “As an
investor, I find that the ability to make money is very much a function of developing a thesis, scrubbing that
thesis to the point where one enjoys massive conviction, finding the right assets that will allow one to benefit
from the underlying theme, increasingly so in a jurisdiction that secures the fruits of that benefit, and then
having patience and riding it for as long as it takes. And I came to that conviction with NOVAGOLD .” With
such remarkable attributes of scale, quality, longevity, additional growth potential, excellent partnerships and
jurisdictional appeal, Donlin Gold is in the right place at the right time to meet an industry need for new
responsible gold mining development.
In closing, I wish to extend my sincere gratitude to our Board members for their steadfast commitment and
loyalty to NOVAGOLD — and particularly Igor Levental, a long-tenured director who unexpectedly passed
away last June. We would like to thank his family for sharing him with us and for his extensive knowledge of
the mining industry that brought such a unique and valuable perspective to NOVAGOLD’s Board. I am also
grateful for the highly experienced team of professionals at NOVAGOLD, Donlin Gold, and Barrick, along wit h
our contractors and drill crew at site, and for the various State agencies and representatives for their
determination and commitment to the permitting process. Their passion and expertise, as well as the long -
term support from Calista and TKC, constitute the foundation of Donlin Gold’s vision and the source of the
Company’s present and future accomplishments. To Calista and TKC: your knowledge and guidance have been
critical over the years through permitting, sustainability, and community engagement init iatives — we thank
1 Donlin Gold data as per the 2021 Technical Report and S-K 1300 Report (both as defined herein). Donlin Gold possesses 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, of which approximately 4 Mt of Measured Resources and approximately 267 Mt of Indicated
Resources inclusive of Reserves is attributable to NOVAGOLD through its 50% ownership interest in Donlin Gold LLC. Exclusive of Mineral
Reserves, Donlin Gold possesses Measured Resources of approximately 1 Mt grading 2.23 g/t and Indicated Resources of approximately
69 Mt grading 2.44 g/t, of which approximately 0.5 Mt of Measured Resources and approximately 35 Mt of Indicated Resources exclusive
of Mineral Reserves is attributable to NOVAGOLD. Donlin Gold possesses Proven Reserves of approximately 8 Mt grading 2.32 g/t and
Probable Reserves of approximately 497 Mt grading 2.08 g/t, each on a 100% basis, of which approximately 4 Mt of Proven Reserves and
approximately 249 Mt of Probable Reserves is attributable to NOVAGOLD. Mineral Reserves and Resources have been estimated in
accordance with NI 43-101 and S-K 1300.
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you for your constant support. It is a distinct pleasure and a real honor to be a part of this Company and to
work alongside each of you.
Last but certainly not least, to our shareholders: I wish to thank each and every one of you for yo ur strong
backing and for choosing to invest in NOVAGOLD, as well as for your engagement, patience, and insight over
the years. I look forward to continuing to deliver on our promises and to keeping an open line of
communication between us while we reach even more milestones and achievements together in 2023.
Sincerely,
Gregory A. Lang
President & CEO
Financial Results
in thousands of U.S. dollars, except for per share amounts
Year ended
November 30, 2022
$
Year ended
November 30, 2021
$
General and administrative expense (1) 20,109 20,210
Share of losses – Donlin Gold 28,163 16,625
Total operating expenses 48,272 36,835
Loss from operations (48,272) (36,835)
Interest expense on promissory note (7,962) (5,922)
Accretion of notes receivable 849 2,556
Other income, net 2,009 (198)
Income tax recovery (expense) 33 (137)
Net loss (53,343) (40,536)
Loss per share, basic and diluted (0.16) (0.12)
At
November 30, 2022
$
At
November 30, 2021
$
Cash and term deposits 125,882 169,124
Total assets 159,189 198,852
Total liabilities 129,286 120,570
Net loss increased by $12.8 million in 2022 compared to 2021, primarily due to the expanded Donlin Gold
drilling and work program, and lower accretion income in 2022 resulting from the receipt of the $75 million
note from Newmont in July 2021. Increasing interest rates resulted in higher Barrick promissory note interest
expense and was offset by income earned on cash and term deposits and favorable foreign exchange
movements.
During the fourth quarter of 2022 we incurred a net loss of $12.3 million compared to a net loss of $10.3
million in 2021. The increase in net loss primarily resulted from the expanded activity at Donlin Gold and
increased interest on the promissory note, partially offset by higher interest income and lower remediation
expense for the former New Gold House mineral property.