NOVAGOLD Reports Third Quarter 2021 Financial Results Donlin Gold LLC Board Approves Additional 2021 Funding for New Feasibility Study Prework Expanded 2021 Donlin Gold Drill Program Yields Significant High-Grade Intercepts,
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NOVAGOLD Reports Third Quarter 2021 Financial Results
Donlin Gold LLC Board Approves Additional 2021 Funding for
New Feasibility Study Prework
Expanded 2021 Donlin Gold Drill Program Yields Significant High-Grade Intercepts,
Some of Which Point to Potential Feeder Zones
Donlin Gold Camp Remained Free of COVID-19
Key Permits Advanced and Financial Position Further Strengthened
Expanded 2021 Donlin Gold drill program, consisting of 79 holes totaling approximately 24,200 meters, is
nearing completion . The owners reported initial assay results from 29 holes (18 complete, 11 partial)
encompassing approximately 7,500 meters of length drilled. The program has been enormously rewarding,
yielding significant new high-grade intercepts in ACMA and an area between the ACMA and Lewis deposits
(“Divide”) that point toward the potential feeder zones of this large system. Additional assay results will be
released to the market as they become available.
Donlin Gold LLC Board approved an additional $3 Million in 2021 to advance studies and increase staffing
in preparation for the new feasibility study.
With all key Federal and most key State permits in hand, Donlin Gold continued to advance additional State
permits, including receipt of final 12 water rights permits. T he Alaska Department of Natural Resources
(ADNR) Commissioner’s Office completed its review of a reconsideration request and upheld the natural gas
pipeline State right-of-way agreement and lease authorization (“State ROW”).
NOVAGOLD received $75 million from Newmont Corporation (“Newmont”) , further strengthening its
already robust treasury. NOVAGOLD’s third quarter cash and term deposits totaled $173.3 million. A n
additional payment of $25 million from Newmont comes due in 2023.
September 29, 2021 - Vancouver, British Columbia – 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.
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.
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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).
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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
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 an y 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.
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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
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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 communit ies.
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
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the attention it deserves both in Alaska and in the seat of the Federal government in Washingto n, 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. Lang
President & CEO
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Financial Results
in thousands of U.S. dollars, except for per share amounts
Three months ended
August 31,
Nine months ended
August 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
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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 [email protected]. 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.
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.