A CLEAR PATH
FORWARD
2021 ANNUAL REPORT
TABLE OF CONTENTS
PRESIDENT & CEO’S MESSAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
NOVAGOLD AT A GLANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SUSTAINABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
CHAIRMAN’S INTERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
MINERAL RESERVES & MINERAL RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . 35
CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
FINANCIAL REPORT (SEPARATE DOCUMENT)
COVER PHOTO: Donlin Gold employee and Stony River resident Christopher Gregory.
PAGE ONE: One of the drill rigs from Donlin Gold’s 2021 drill program.
Our employees and neighbors take pride in the work and activities depicted in the photographs throughout this report,
most of which were taken at the Donlin Gold site or in the surrounding communities.
All scientific and technical information in the body of this annual report is qualified by – and is to be read in conjunction with – the Mineral
Reserves & Mineral Resources table and associated notes found on page 35.
All dollar amounts quoted in this report are in U.S. currency unless otherwise noted.
This annual report contains forward-looking statements or information concerning anticipated results and developments in our operations in
future periods, planned exploration activities, the adequacy of our financial resources, and other events or conditions that may occur in the future.
It may include statements regarding perceived merit of properties, exploration results and budgets, mineral reserves and resource estimates, work
programs, capital expenditures, operating costs, cash flow estimates, production estimates and similar statements relating to the economic
viability of a project, timelines, strategic plans, including our plans and expectations relating to the Donlin Gold project, market prices for precious
metals, or other statements that are not statements of fact. These statements relate to analyses and other information that are based on forecasts
of future results, estimates of amounts not yet determinable, and the beliefs, expectations, and opinions of management as of the date of this
report. We do not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations, or
opinions should change, except as required by law. Investors should therefore not place undue reliance on forward-looking statements. See
complete disclaimer on page 35.
THIS IS AN EXCITING TIME
FOR NOVAGOLD, ITS PARTNERS,
AND ITS STAKEHOLDERS.
Key Donlin Gold permits received. Continued stakeholder
support. Some of the best drill results in the gold mining
industry. A progression plan in place — with more resources
than ever committed to advancing the unrivaled Donlin Gold
project further up the value chain.
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The Kuskokwim Corporation (TKC) was formed by a merger of 10 Native village corporations in the Yukon-Kuskokwim region.
Located 10 miles north of the village of Crooked Creek, the Donlin Gold project enjoys strong support from Alaska Native
partners TKC and the Calista Corporation, the private landowners of the project’s mineral and surface rights.
Neighboring villages in the Yukon-Kuskokwim region, an area that covers over 75,000 square miles of southwestern Alaska.
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PRESIDENT & CEO’S MESSAGE
Gregory A. Lang
As we enter 2022, it is important to reflect on many milestones that were
reached in 2021, a year in which we advanced our Donlin Gold project up the
value chain against the backdrop of the global COVID-19 pandemic. And while
the pandemic continues to affect us all, NOVAGOLD remains laser-focused
on its top priority of ensuring the safety and well-being of employees,
contractors, and the diverse community of stakeholders in its 50 percent-
owned Donlin Gold project in Alaska. Our unwavering commitment to
responsible mine development in the Yukon-Kuskokwim (Y-K) region
remains strong.
HEALTH & SAFETY
NOVAGOLD is committed to the health, safety, and well-being of its personnel,
visitors, and members of the multiple communities in which the company operates.
We are proud of the fact that we have created a corporate culture that encourages
safe practices for our workforce. Our safety achievement awards and performance
recognition, both in the workplace and in our local communities, are highly sought
after and hard-earned.
Since the start of the pandemic, the majority of NOVAGOLD employees have
been working remotely. Despite less in-person engagement, we have managed
to stay more connected than ever before. We continued to hold regular internal
P R E S I D E N T & C E O ’ S M E S S A G E
3
meetings and conferences, mainly in a virtual environment,
SUSTAINABILITY REPORT
and we maintained regular communications with our key
stakeholders, shareholders, and investors. As we enter the third
NOVAGOLD developed a methodical process of reporting
year of the pandemic, we reflect on the challenges that have
information related to environmental, social, and governance
affected our families, our communities, and our organizations.
(ESG) matters for fiscal year 2020. We launched our inaugural
I am proud of the
Sustainability Summary in the Integrated Annual Report, which
accomplishments
is now available on NOVAGOLD’s website. For 2021, NOVAGOLD
of the teams at
NOVAGOLD, our
partner Barrick
will be issuing a stand-alone Sustainability Summary Report to
offer more information and detail regarding our ESG initiatives.
These initiatives have always been an important part of our
Gold, and Donlin
business, and we are excited to be building upon our track
Gold, who executed
record of sharing our comprehensive ESG framework with
the 2021 work
program with
our stakeholders. We are invested in achieving the highest
possible standards through our workforce development,
minimal COVID-19
performance, actions, and conduct as we continue to make
cases at the project
improvements to this increasingly important sphere of our
site and no Lost-
Time Incidents.
During our 2021
field season, out
operations while advancing Donlin Gold up the value chain.
NOVAGOLD is committed to responsible mining, stewardship of
the environment, and community support in the areas where
we operate.
of approximately 171,310 hours worked, we recorded four
If you haven’t already done so, please subscribe to
cases of COVID-19 at the Donlin Gold project site. The affected
NOVAGOLD’s email list and follow us on social media to ensure
individuals fully recovered and ultimately returned to work.
you don’t miss our Sustainability Summary Report.
Our operating protocols call for individuals to undergo
mandatory COVID-19 testing prior to traveling to the Donlin
Gold project camp and again before leaving the site to
COMMUNITY PARTNERSHIPS & COMMITMENTS
return home. Our procedures were especially important at
the time when cases began to rise in Alaska throughout the
Donlin Gold is fortunate to have long-term partnerships
summer. Our enhanced COVID-19 Community and Workforce
with Calista and TKC, owners of the project’s mineral and
Protection Plan was particularly effective in making sure that
surface rights, respectively. These partnerships date back
safe operations could continue and the workforce would
decades. The project’s location on private land specially
remain safe and healthy. Careful collaboration with our Native
designated for mining activities, enshrined through the 1971
Corporation partners Calista Corporation and The Kuskokwim
Alaska Native Claims Settlement Act (ANCSA), distinguishes it
Corporation (TKC), as well as with other Tribal groups in the
from many other mining projects in Alaska. In fact. 2021 marked
Y-K region, remain key to our success.
the 50th anniversary of this landmark act, which has served as
In the third quarter, Donlin Gold put further restrictions
a pillar of support for the well-being of the Indigenous people
on its Anchorage office following two positive COVID-19 cases
of Alaska. We are proud to share that in September 2021, the
there. All Donlin Gold employees in Anchorage who may have
board of directors of the ANCSA Regional Association of the 12
been exposed were tested and quarantined while continuing
regional Native Corporations unanimously passed a resolution
to work remotely in accordance with the protocols.
in support of the Donlin Gold project. As representatives of key
NOVAGOLD president & CEO Gregory Lang with U.S. Senator Lisa Murkowski at a
Donlin Gold dinner in Anchorage in September 2021.
Donlin Gold’s 2021 “In It for the Long Haul” backhaul project removed and
consolidated approximately 180,000 pounds of hazardous and electronic waste
from 26 villages throughout the Y-K region, including Bethel, where these photos
were taken.
4
stakeholders in the state, the support of the ANCSA Regional
in formalizing these relationships and finding common ground
Association is greatly appreciated.
with Shared Value Statements that build upon the long-term
As landowners, Calista and TKC are committed to
agreements with Calista and TKC that are already in place.
developing a mining operation consistent with the Elders’
At the end of 2021, Donlin Gold had entered into Shared Value
vision of responsible development that creates jobs and
Statements with eight villages from the Y-K region (Akiak,
economic benefits for the community while protecting the
Sleetmute, Napaimute, Crooked Creek, Napaskiak, Nikolai,
environment and local culture. This commitment is at the core
Tuluksak, and Upper Kalskag). These agreements include
of both Barrick’s and NOVAGOLD’s philosophy on how the
educational, environmental, and social initiatives which help
project should be developed. During the 2021 field season,
provide support for these villages.
70 percent of Donlin Gold direct hires were Alaska Natives
In the first quarter of 2021, Donlin Gold, in partnership
from 20 Y-K communities. In a region marked by high
with TKC, the village of Crooked Creek, and the Napaimute
unemployment and fewer job options than in urban areas,
Tribe, was the lead sponsor of a program to construct and
the work experience and skills gained at Donlin Gold are
maintain the upper portions of the ice road on the Kuskokwim
particularly valuable to the local community members.
River. The ice road greatly improved safety and access to
Donlin Gold is committed to supporting the needs of
nearby communities for residents in remote locations. At its
its community partners. As part of Donlin Gold’s ongoing
completion in February 2021, the Kuskokwim ice road was
community engagement efforts, we continue to make progress
approximately 200 miles long.
P R E S I D E N T & C E O ’ S M E S S A G E
5
In mid-January 2021, the water supply plant in the
scrub brushes for cleaning, 50 more cases of water, and other
Middle Kuskokwim village of Tuluksak (population 370) was
supplies.
destroyed by fire, creating a health and safety crisis for the
In March 2021, following the Tuluksak fire, the Thomas
entire community. Donlin Gold worked with the Tuluksak
Lodge in Crooked Creek – the only lodging facility in the village
Tribal administrator and Tribal council to assess how they
that is closest to the project site – also suffered substantial fire
could best help coordinate support for immediate needs and
damage. Donlin Gold aided with labor and materials to get the
sustainable long-term solutions. In the days following, Donlin
building back in order and operating by May, prior to the busy
Gold, together with several other community organizations,
summer season.
companies, and individuals, stepped in to provide drinking
In August, Donlin Gold held the fourth annual “In It for
water, buckets for carrying and storing water, sanitary wipes,
the Long Haul” backhaul project, removing and consolidating
diapers, and other health supplies. Team members traveled to
approximately 180,000 pounds of hazardous and electronic
Tuluksak via the ice road and delivered 100 five-gallon reusable
waste from 26 villages throughout the Y-K region. The waste
containers of water to be distributed to each household in the
was then packed into containers and shipped to Anchorage
community. Shortly after the fire, Donlin Gold worked with
and Seattle for recycling and safe, proper disposal. In terms of
Alaska Commercial Company and Fox Air in Bethel to deliver
scale and reach, this was the most successful backhaul yet. Over
120 cases of water, along with basic needs items like paper
the past five years this program has removed almost 400,000
towels, baby wipes, hand sanitizer, and bar soap to the village
pounds of hazardous and electronic waste from Y-K villages.
as quickly as possible. Donlin Gold also arranged for Desert Air
Access to training and education are two important areas
to donate a DC-3 flight directly from Anchorage to Tuluksak
in which we collaborate with our Native Corporation partners.
to bring a second delivery of water tanks, containers, pumps
The Lower Kuskokwim School District’s annual college and
(including hose assemblies), totes for washing and bathing,
career fair was held virtually in April, with a record number
SIGNIFICANT HIGH-GRADE INTERCEPTS FROM THE 2021 DRILL PROGRAM 1
6
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updated technical
studies, engineering
& construction
operation
1.1Moz/year
life of mine (27+ years)2
exploration &
environmental
studies
permitting
current status
of vendors and high student participation. Donlin Gold also
sponsored the annual Best in the West competition at the
Kuskokwim campus of the University of Alaska to encourage
2021 DRILL PROGRAM —
CONTINUING & CONSISTENT SUCCESS
and support the leaders of tomorrow.
Following completion of a strong 2020 drill program, our
In January 2022, NOVAGOLD established the Mining and
plan for 2021 was to complete the work necessary to validate
Geological Engineering Scholarship at the University of Alaska
mineralization continuity and structural control, as well as test
(Fairbanks & Anchorage) to help support students seeking
extensions of high-grade zones within different rock types. This
bachelor’s degrees in mining or geological engineering, with a
information was important to increase confidence in geologic
focus on underrepresented students as a commitment to foster
modeling concepts ahead of an updated feasibility study.
diversity in the industry.
We re-opened the Donlin Gold camp in May 2021 with
Along with supporting initiatives in Alaska, NOVAGOLD
numerous improvements completed ahead of the ambitious
recognizes the importance of sponsoring events in the
field season. Specifically, heavy equipment was purchased,
areas where we operate. In May of 2021, we sponsored and
kitchen facilities expanded, a new recreation area furnished,
participated in the Mining for Miracles Pie Throw, a fundraising
sleeper capacity expanded, camp facilities remodeled, a large
event in support of the BC Children’s Hospital in Vancouver.
new warehouse added, core logging, and cutting facilities
Each year, senior leaders from across the industry are paired
upgraded. With the crews operating efficiently – and without
up in a friendly fundraising competition, with the one raising
increasing the budget – the drill program was expanded to
the most money earning the right to toss a pie at the other. I
include 13 additional holes to gather more closely spaced
was happy to participate in this event and help raise funds for
data to assess the dominant controls and orientations of gold
the Cellular and Regenerative Medicine Centre. In a healthy
mineralization. I am delighted to report that the 2021 drill
competition with Red Conger from Teck, I was on the receiving
program was completed in September, on time and on budget,
end of the pie.
with 79 holes drilled for a total of 24,264 meters. The program
These various community partnerships, activities, and
yielded some of what I view as the best results in the gold
programs form just one dimension of NOVAGOLD’s multi-
mining industry for an open-pit project, and we are grateful to
dimensional commitment to sustainable and responsible
our local and Alaska partners who have worked with us to reach
development.
these important milestones.
P R E S I D E N T & C E O ’ S M E S S A G E
7
Greater attention was paid to the eastern side of the ACMA
to advance studies and increase staffing in preparation for an
pit area that transitions into the Lewis pit area and has had less
updated feasibility study.
drilling than the main areas of the deposit.
Final results from the 2021 drill program are expected to
As with the 2020 drill results, we have gained a better
be released in early 2022. The camp was closed at the end of
understanding of the definition of controls on mineralization
October 2021 and re-opened in January 2022 for a winter drill
in the deposits. The last core was logged in mid-October
program that will continue into the summer and fall of 2022.
with final samples sent offsite to laboratories for further
Part of the objective of the 2022 exploration and drill program
processing. The core logging and assay laboratory results data
will be to confirm mineralization continuity and key geologic
will be incorporated into a geologic model update, with the
controls in other representative areas of the deposit.
subsequent shift to feasibility study update work, subject to a
The owners of this large, multi-generational, high-grade
formal decision by the Donlin Gold LLC Board.
project, located on private land specially designated for mining
As the 2021 drilling was coming to a close, Barrick and
activities in a Tier-One3 jurisdiction, have a unique opportunity
NOVAGOLD held senior executive management workshops
to generate wealth in the area. The fact that it is being
and a site visit aimed at jointly assessing results and mapping
advanced in partnership with Alaska Native Corporations – who
out future plans. Barrick CEO Mark Bristow and I met with local
are committed to developing a mining operation consistent
stakeholders as well as with senior Alaska federal and state
with the Elders’ vision of responsible development that
representatives who expressed their continued support for
creates social and economic benefits while safeguarding the
the project. Following these meetings, the Donlin Gold LLC
environment and culture – makes Donlin Gold unique.
board approved an additional $3 million expenditure for 2021
Barrick Gold president & CEO Mark Bristow and
NOVAGOLD president & CEO Gregory Lang at the
Donlin Gold site in September 2021.
8
BALANCE SHEET
$46M
forecast full
year 2022
spending4
The most significant outstanding Alaska permits are the
dam safety certifications. Securing these permits requires a
multi-year effort to gather geotechnical data and prepare
various engineering studies. It is anticipated that the 2022 work
plan will incorporate important milestones to advance the
work in this area.
treasury
$169M
$25M
BALANCE SHEET
$169.1M cash and term deposit
balance on November 30, 2021
due from Newmont
in July 20235
NOVAGOLD’s strong balance sheet allows us to continue
taking the company up the value chain without the need for
$0
US$ (millions)
PERMITTING
$200
raising more capital and, by extension, diluting shareholder
value. We now have approximately $169 million in cash and
term deposits as of November 30, 2021, which we believe
is sufficient to advance Donlin Gold to a point when a
construction decision would be made. Our treasury includes a
payment of $75 million the company received from Newmont
With federal permitting complete, Donlin Gold, together
Corporation in July 2021 related to the sale of NOVAGOLD’s
with Calista and TKC, continued to focus its 2021 permitting
50 percent interest in the Galore Creek project in British
efforts on advancing the remaining Alaska permits and
Columbia6. Another payment of $25 million from Newmont
approvals for the project. A lot of effort went into supporting
comes due in July 2023. There’s an additional payment of $75
the Alaska agencies with various permit applications.
million contingent upon a Galore Creek construction approval.
In late 2021, the Donlin Gold project was issued a third
extension of the air quality permit by the State of Alaska. This
is a rare achievement and speaks to the dedicated effort by
2022 GOALS & BUDGET
all on the permitting team, including our native partners and
Alaska agencies. Three permits held by Donlin Gold came
By all measures, Donlin Gold is an exceptional project.
under appeal in 2021, specifically the Clean Water Act Section
With approximately 39 million ounces7 of gold in measured
401 certification, the 12 water rights permits, and the Right-of-
and indicated mineral resources, it is one of the largest in the
Way (ROW) agreement for the buried natural gas pipeline. The
world. Its grade of 2.248 grams per tonne is approximately twice
permits remain in effect while these appeals are pending.
the industry average9. The 2021 drill program has been very
Unfortunately, litigation led by environmental non-
successful in reinforcing the robust integrity of this massive
governmental organizations (ENGOs) that oppose resource
endowment.
development of any kind has become a regular part of business
Donlin Gold is in the rare position of having a sufficient
in the U.S. and, as such, is something that must be anticipated
foundation to advance toward construction once the owners
in the planning process from the start of permitting. We are
make that decision. As currently envisioned, the project would
not surprised by these legal challenges. As a consequence, we
produce an average of about 1.1 million ounces per year over
have built and sustained, in partnership with the Alaska Native
its 27-year mine life10, a very important factor given a frequently
landowners and our partner Barrick Gold, a comprehensive,
held view that global gold production is expected to decline
science-based record that we believe will withstand any legal
in the absence of major new discoveries. Furthermore, the fact
challenge to our permits.
that it is located in Alaska, where there is long-standing support
P R E S I D E N T & C E O ’ S M E S S A G E
9
for socially and environmentally responsible mine development
CONCLUSION
and respect for the rule of law, gives Donlin Gold a special
status among the very few of the world’s development projects,
I wish to thank the experienced team of professionals at
particularly in light of the fact that the project already has all the
NOVAGOLD, Donlin Gold, and Barrick, along with our drill crews
major federal and most key Alaska permits.
and contractors at the project site, for their expert navigation
Any discussion about Donlin Gold would not be complete
of the project. Our success would not have been possible
without reference to its exploration potential. The project’s
without their dedication and hard work. There’s tremendous
current resources and reserves are contained within only three
commitment by each of these groups to maintain the highest
kilometers of an eight-kilometer mineralized belt which, in
standards of safety and environmental protection. My gratitude
itself, represents only five percent of the total mineral land
also extends to the various State of Alaska agencies for their
package. It is not surprising that the consistency of grade and
thorough and professional work in advancing permitting
high-grade intercepts from the current and past drill programs
for the project. A big thank-you also goes to Calista and
are further reinforcing its exploration potential.
TKC, our Native Corporation partners who have been strong
Looking ahead to 2022, NOVAGOLD and Barrick expect to
supporters in ensuring that Donlin Gold is developed to the
finalize geologic modeling and interpretation work with results
highest standards of environmental stewardship and social
from the 2021 drill program for an updated resource model,
responsibility. I would also like to express my sincere thanks to
which would then lead into an updated feasibility study. We
the entire NOVAGOLD board and team for their commitment
are particularly intrigued by the 2022 work plan, which includes
and devotion to the company. I enjoy working alongside each
some exploration drilling under the ACMA and Lewis pit areas
and every one of you.
that are open along strike and at depth.
Lastly, I’d like to thank our shareholders for your
NOVAGOLD anticipates spending approximately $46
unwavering support, engagement, knowledge, and
million in 2022. About $30 million will be allocated to fund our
encouragement. Each of these strong relationships has been
share of expenditures at the Donlin Gold project, representing
strengthened over the past two years during the pandemic,
the largest project budget in more than a decade. It includes
and I look forward to continuing our engagement and sharing
$17 million for the 2022 drill program; $9 million for external
many more achievements in 2022.
affairs, permitting, environmental, land, and legal activities;
and $4 million for project planning and fieldwork. A total
of $13 million is allocated for NOVAGOLD general corporate
and administrative costs and an additional $3 million for
withholding taxes on share-based compensation and other
working capital.
Gregory A. Lang
President and CEO
February 28, 2022
10
Donlin Gold employees from the Y-K region (left to right): Daryl Petruska,
Christopher Gregory, Scott Fitka, Jordan Shriner.
11
THE UNRIVALED DONLIN GOLD
39Moz
5%
There are 39 million gold ounces7
contained in Donlin Gold’s measured
Only five percent of Donlin Gold’s
total land package has been
and indicated resources – five times
explored.
the peer group average.
TOP 5
2.24g/t
According to the Fraser Institute10,
Alaska is ranked fifth in the world for
investment attractiveness.
Donlin Gold’s grade – 2.24 grams
of gold per tonne8 – is more than
double the world’s average among
known open-pit deposits.
$169M
2+2
NOVAGOLD has a strong balance
A true partnership between
sheet, including $169.1 million
in cash and term deposits as of
NOVAGOLD and Barrick, project
owners, and Calista and TKC,
November 30, 2021, plus $25 million
mineral and surface rights owners.
in notes receivable in 2023.
12
N O V A G O L D A T A G L A N C E
The Donlin Gold 2021 drill program was completed
with 79 holes drilled for a total of 24,264 meters.
13
NOVAGOLD is committed to delivering long-term value to all our
stakeholders through responsible mining. Our sustainability approach
involves setting and meeting high standards in environmental,
social, and governance matters in all that we do – while contributing
to the social and economic development of the communities in the
regions where we operate. We believe that mines can be responsibly
developed in partnership with our local stakeholders who have
the knowledge to help us manage and minimize environmental
impacts. NOVAGOLD is committed to building trust and transparency,
continuous improvement, and stage-appropriate enhancements to
its sustainability initiatives and policies.
The 2021 Sustainability Summary is our first stand-alone report that
integrates sustainability data and gives stakeholders a tangible
overview of our non-financial performance in fiscal year 2021. This
report demonstrates how policy and practice are bringing about real
and positive benefits at the Donlin Gold project and for the Yukon-
Kuskokwim region, both today and in the years to come.
The ACMA and Lewis deposits at the Donlin Gold project
site in the Yukon-Kuskokwim region in Alaska.
14
SUSTAIN NOVAGOLD’S 2021 SUSTAINABILITY
SUMMARY LAUNCHES SPRING 2022.
Sign up for email alerts and follow us on social media for more details.
S U S T A I N A B I L I T Y
15
ABILITY CHAIRMAN’S
INTERVIEW
John Hathaway (left) and Dr. Thomas S. Kaplan (right)
This interview should be read in conjunction with the
cautionary statements and the “Mineral Reserves &
Mineral Resources” information on page 35.
All figures are in USD unless otherwise stated.
16
On Friday, December 3, 2021, John Hathaway, CFA —
portfolio manager of Sprott Hathaway Special Situations
Strategy and co-portfolio manager of the Sprott Gold
Equity Fund — sat down with Dr. Thomas S. Kaplan,
chairman of the board of directors at NOVAGOLD and
chairman and CEO of The Electrum Group. The two
discussed gold’s market trajectory, jurisdictional safety,
and cryptocurrencies — and why Tom thinks NOVAGOLD
has the potential to significantly outperform its peer
group. The interview has been edited both for length and
for clarity; to watch a video of the conversation, please
visit novagold.com/media-gallery.
John Hathaway: Tom, it’s so nice to see you. Thank you for
NOVAGOLD, in many respects, embodies my arc in the
inviting me.
mining world. When I began my career in the nineties with
Apex Silver and through our own engagement in African
Dr. Thomas S. Kaplan: The pleasure is mine. And so is
Platinum, which was taken over by Impala – and indeed in
the honor.
I’ve known you forever, it seems.
You have.
NOVAGOLD itself – what my career has shown is two very
distinct features. The first has been the constant in my career:
this gravitational pull toward category-killer assets. Assets
which any larger company would want to own at a price if
given the opportunity. I’ve come to believe that no matter
how sophisticated a piece of paper is when you’re doing a
Through many iterations. What led you to NOVAGOLD
transaction and making an investment, at the end of the day
after Apex, African Platinum – or, as then known, South
it’s all about the assets.
African Resources – and a few other things along the way,
If you don’t have a high-quality asset, but you’ve got the
not to mention your other interests that are not remotely
best kind of piece of paper, you’re still going to lose money and
gold-oriented? But maybe they all fit together.
it’s only going to be heartache. It’s all about the assets. And if
you superimpose onto those assets great management teams,
It may simply be because I’m shallow and superficial, but I
then you can deliver outstanding returns. In silver we had a
am clearly drawn to the iconic. I’m drawn to beauty. I’m drawn
200X return and that got me started. And then we went into
to great assets – those things which really give me a sense of
platinum, in which we had a 100X return, and hydrocarbons a
joy when I’m engaged with them. And that runs the gamut.
100X return. We then sold everything in 2007 in order to pivot
So, in my business career, I’ve had the great luck of being able
into gold and silver. It was the only thing that I really believed
to either discover – in the case of silver, platinum, natural gas
in. And I was lucky. We were able to make exits in hydrocarbons
– or to take control of assets that are really category-killers in
to Encana, in platinum to Impala. And so when we entered
their space, and which have almost always ended up being in
the financial crisis, I had capital and conviction, and whenever
the portfolios of much larger companies who needed these
I have capital and conviction in something, it proves to be a
kinds of assets to move the needle in their own reserves or
lethal combination.
production.
There is something of a correlation when you look at my
You say that’s dangerous.
other interests too. In art, for example, I’m drawn to Rembrandt.
There isn’t any list of the greatest painters of all time which
It is, it really is. Now, I had coveted NOVAGOLD for years,
doesn’t include Rembrandt and several other artists that I love.
and I had watched it go from a 60 cent stock to $14, $15 when
It’s that combination of intensity and beauty – similarly with a
Barrick made a hostile takeover attempt in 2006. I didn’t own
passion that, for me, is even something that burns brighter than
it. So I’m not taking any credit for having owned it. I fell into
art: wildlife conservation. I’ve always been drawn to the big
that trap that investors sometimes face and thought I missed it
cats – actually all cats, big and small. There’s something about
instead of realizing you do not make money looking in the rear-
the grace and the beauty and the power of cats that has a
view mirror. I watched the company and shareholders reject
certain charisma. They are iconic, they’re at the top of the food
the Barrick bid and the stock went to $19.74 CAD. Again, I didn’t
chain, and they’re the umbrella species under which if you save
own it, but I did watch as it made a round trip and at different
them, you’ve also saved all the flora and fauna in these critical
intervals, I would look and say, maybe now is the time to strike.
ecosystems. So, whether it’s assets or whether it’s other
What was it that attracted me to NOVAGOLD? Donlin Gold.
beautiful subjects, there is that commonality of the
I really felt that Donlin Gold was the ultimate category-killer.
iconic nature.
I had that sense that the Donlin Gold trend could be something
C H A I R M A N ’ S I N T E R V I E W 17
akin to the Carlin trend – not necessarily the same kind of
Mauritania all the way through to Pakistan, and it was one of
system, but in terms of how the next big discovery at Carlin
the things that got me to open up doors and ultimately
would lead to another discovery. And when we realized that
become partners with sovereign wealth funds from the Arabian
the 30, 40 million ounces that we could see in 2008 were on a
Gulf. But around the time that we made the investment in
small percentage of the entire land package – concentrated on
NOVAGOLD, I’d come to believe that the era of “Go where the
a three-kilometer area that had been heavily drilled, as well as
gold is” mentality was coming to an end. And that ultimately
being open at depth – I sent my chief geologist to assess it. This
investors such as myself would gravitate toward jurisdictions
geologist, Dr. Larry Buchanan, is one of the great exploration
where the rule of law wasn’t a novelty, where when you go to
geologists in the world. The Buchanan model is a textbook
sleep at night you feel completely confident that when you
analysis of epithermal deposits that’s still unrivaled to this day.
wake up in the morning, what you thought you own the
And I sent Larry out and I said, “What do you think?” (This
evening before, you still own. Therefore, I changed my mantra.
was after we’d already made the deal, which gave us effective
So the mantra went from being “seek out great assets that give
control.) I asked, “Are the
you extraordinary leverage to an underlying theme,” to “seek
40 million ounces there?”
out great assets that give you extraordinary leverage to an
And he said, “Oh no.” For
underlying theme in a jurisdiction that will allow you to keep
a moment my heart sank.
the fruits of that leverage when the time comes to ring the
We’re already in it. And he
cash register.”
said, “I think there’s at least
double, maybe more. In fact,
Ultimately, we have in the picture a big partner who owns
I think that the next Donlin
50 percent. So some of it would be the dynamics between
Gold is at Donlin Gold.” If
the two partners. Do you think that can be monetized?
you’re in the mining industry,
A lot of this is unknown at this stage, but we know that
you know, it’s an old adage:
you have a scarce asset. Gold is in itself scarce. Maybe you
If you’re going out in search
could just talk about the various things that would come
of elephants, go to elephant
into play in advancing NOVAGOLD. Why, in your opinion,
country. And what he was
will this particular asset outperform its peer group?
basically saying was in terms
of the geological potential
NOVAGOLD is the flagship asset of The Electrum Group.
at Donlin Gold, we were
We have interests in multiple gold and silver assets – hence the
perhaps just scratching the
name Electrum, which is a naturally occurring alloy of gold and
surface. Now this got me
silver – in North America as well as some exposure to Australia.
extremely excited despite the fact that everything that I know
For us, Donlin Gold is the holy grail. And the reason I say that is
about mining development and operations would fit very
because we believe that Donlin Gold, as a vehicle for investors
generously into a thimble.
to be able to get true octane in the development space in gold,
So when I got this conviction that NOVAGOLD was going
is unique. What does it mean to be unique? What it means
to give me all the leverage I could possibly want to the
is that when you look at Donlin Gold’s attributes…Its size:
underlying gold thesis, I realized we had a tiger by the tail. Now,
There’s never been a gold mine that began production with 40
up until that time – when we came into NOVAGOLD in 2008 –
million ounces plus. The scale: We’re talking about something
Electrum had perhaps the most widespread and diversified
that could be a million-ounce-a-year producer. The mine life:
exploration portfolio in the world. I was the largest holder of
It is projected to start with 27 years of production. The cost
mineral rights in mining, so I was told, in the Islamic world from
structure: Because it is projected to be a high-grade mine for a
18
JURISDICTIONAL SAFETY 11
large-scale open pit, between two and three grams, it could be
constraints on permitting and environmental considerations
one of the lowest-cost producers in the world.
would mean longer lead times.
Then you have to take into account the fact that it’s in
So you were getting higher valuations for assets in Africa
the safest part of the world, for which a premium should be
than you were in North America. When we pivoted away from
attached. Before we entered into the “Go where the gold is”
the developing world into what we called the safe jurisdictions
mentality in the early 1990s, particularly led by Newmont’s
– now what would be known as the Tier-One jurisdictions – at
move into Yanacocha with Buenaventura, gold assets were
least in my case people couldn’t say, “Well Tom, you’re talking
pretty much valued as follows: U.S. assets were valued using
your own book. You’ve taken a stake in NOVAGOLD.” It’s not
a 0 percent discount rate because they were considered to be
exactly true. I’d become the largest holder of Moto Goldmines
the safe jurisdictions. And if you had exploration potential, all
at the same time. And we engineered the sale of Moto to Mark
the better. These were arbitraged against the risky jurisdictions:
Bristow and Randgold and AngloGold. So we were still willing
Australia, Canada, and South Africa. That just shows you how
to take opportunistic bets in the developing world, but we
far we came because once Newmont went into Peru and then
viewed that as being a warrant, as opposed to being a stock.
into Uzbekistan – and you had Barrick following suit into Chile
The true stocks were U.S., Canada, Mexico, and Australia. Now,
and ultimately looking for gold in Russia and Freeport into
when you look at NOVAGOLD, what you see is this combination
Irian Jaya – everything changed. And at a certain point, it came
of Donlin Gold’s size, grade, exploration potential, production
around to the assets in North America being valued lower than
profile, and cost structure. And superimposed upon all that is
in these other jurisdictions because it was assumed that the
jurisdictional safety. Alaska is a state that welcomes mining.
C H A I R M A N ’ S I N T E R V I E W
19
46MozSukhoi Log1.2MozOlimpiada2.7MozMuruntau11.5MozLivengood11.7MozBlackwater1.7MozCarlin11.3MozGoldrush39.0Moz12Donlin Gold2020 annual production of gold operations14M&I resources of development-stage gold projects13low riskmoderate to high riskextreme riskno data It is already the second largest gold-producing state after
combination of attributes of this asset, you realize that there
Nevada. We are very blessed to have our Native Corporation
is no other in the world like it. No mining project has ever
partners at the local level, the Calista Corporation and The
begun production with over 40 million ounces. NOVAGOLD’s
Kuskokwim Corporation, and to have as our strategic partner
resources are only on three kilometers of a mineral belt that is
Barrick Gold. As a consequence, the level of professionalism
eight kilometers. And those eight kilometers represent only 5
that came from the NOVAGOLD team and the support that we
percent of the total land package. We’re just simply following
had at the local level and at the government level in Alaska
an old adage that if you’re going to look for elephants, go to
and, ultimately, the federal government allowed us to be able
elephant country. There are only a few mines in the world that
to do something that a lot of people thought would be too
can have that kind of production because the grade is already
hard to do. We got a Record of Decision. In fact, it was the first
double if not triple what’s coming online in the gold industry.
time that the Bureau of Land Management and the U.S. Army
Now you take all of that and the fact that it’s located in a
“We have, like the tortoise and the hare,
taken [Donlin Gold] up the value chain
while other projects that people thought
would go into production have, like the
hare, fallen by the wayside. Donlin Gold is
on the path. I believe that Donlin Gold will
be a producer for decades to come.”
jurisdiction that is already the second largest gold-producing
state in the union – on land that is private and already
designated by law for mining – what you see is an asset that, if
we are right, could be the next Nevada. And already is poised to
be the greatest gold story in the development space. The only
other asset that compares to it is Sukhoi Log in Russia, and we
wish them the best of success. But we would argue, I think, that
we’re on the right side of the Bering Strait.
Your partner has, to my way of thinking, been tone-deaf
on the issue of jurisdictional safety. You can observe
that simply by where their assets are located. I don’t
have to go through the litany of where they are. So I
guess maybe something changed recently with your
joint announcement with Barrick in terms of their way of
viewing the world and their evaluation of political safety
as being relevant in terms of where they spend their
Corps of Engineers combined to provide a joint Record of
capital.
Decision – something that so moved them to have their own
ceremony to celebrate the occasion. One of the great things
I think it’s fair to say that Mark Bristow is without a doubt
about Donlin Gold is that anyone who goes to Alaska – and
one of the greatest CEOs of his generation in the gold mining
Mark Bristow has now been there a couple of times and seen
industry. Mark’s experience is primarily in Africa. I also have
it firsthand – realizes the depth of support that we have from
African experience in gold. I sold him the Kibali mine as
Calista and TKC, the owners of the mineral and surface rights,
well as a platinum asset in Zimbabwe. So, I’m not Pollyanna
but all the way through to the governors and to the senators
when it comes to my experiences in Africa. I also got my first
themselves. Donlin Gold is now viewed as the flagship for gold
lucky break in Bolivia. So I do have an understanding of the
development in Alaska.
opportunities that are present in the developing world.
When you combine all of these factors, what you have
Mark’s focus has always been Tier-One assets that
is a situation where I’m often asked, “Why do you say that
will make a certain kind of return; that are of a significant
Donlin Gold is unique?” The reasons are when you look at the
production profile and all of the other attributes which Barrick
20
discusses. I also believe in Tier-One assets. In fact, I’m even
There’s a shortage of names that are in safe jurisdictions.
more stringent, certainly when it comes to what I’m looking
And it’s hard to imagine capital is going to flow to Sukhoi
for in an asset that can really move the needle in terms of
Log before it flows to Donlin Gold.
production and reserves for a company. An asset like Donlin
Gold, for example. In fact, our mantra over the last 30 years has
I would agree with you. We’ve seen analysts attach
been great assets. Now it’s great assets in safe jurisdictions.
valuations of 10 billion to 15 billion dollars on Sukhoi Log.
Mark’s attitude, I believe, is that it’s all about the assets. Even if
Now that Barrick is starting
those jurisdictions are challenging, he has the skillset to be able
to talk about Donlin Gold, I
to navigate those challenges. And if anyone can do it, I think it’s
think that the bell is going to
Mark. So when we look at Donlin Gold, I’m not sure that that
start ringing. Remember, for
indicates that he sees it from a jurisdictional standpoint. I think
12 years we’ve been in the
what I can say is that he understands this can easily evolve into
story, and we have framed
a Tier-One producer.
the narrative on Donlin
I would say that being a Tier-One producer is absolutely
Gold and we have, like the
critical in terms of being able to explain to investors why the
tortoise and the hare, taken
long-term prospects of Donlin Gold, and hence NOVAGOLD, are
this thing up the value chain
so good. But I would say that for me as an investor, and I think
while other projects that
I speak for our shareholder base, we want not only Tier-One
people thought would go
assets, we want Tier-One assets in Tier-One jurisdictions. We
into production have, like the
want to be able to sleep well at night, knowing that when we
hare, fallen by the wayside.
wake up in the morning, whatever we thought we owned the
Donlin Gold is on the path. I
night before, we still own.
believe that Donlin Gold will
I think that what we’re seeing with Barrick, as evidenced
be a producer for decades
by the joint press release that we issued in December, is a
to come and that it will pay
recognition that Donlin Gold is now very much part of their
dividends.
project pipeline profile in a way that it wasn’t before. They are
getting comfortable with it. Mark is a geologist. He is absolutely
I’m not sure how patient I am on that sort of thing.
punctilious when it comes to geology. There was never a doubt
that the gold is there, but Mark wants to be able to quantify
Look, we are now at the point where we have something
how every ounce is going to come out over a 10-year period.
that is pretty much permitted in a safe jurisdiction with great
And I’m the last person to gainsay such a dedication to one’s
partners. We’re in great shape. Mark sees this – and Barrick
craft, but for me, this press release, I think, was a game-changer.
knows even from experience in North America that a Record of
And I think that in the not-too-distant future, when gold
Decision is a big deal. Barrick knows that being able to have a
reaffirms its bull market trajectory, we will be the go-to stock in
property that is on private land designated for mining, in an era
the development space. NOVAGOLD’s got all the attributes that
when people are starting to talk about royalties on government
investors will be looking for and they will want octane in their
land, is a big asset on top of what is demonstrably a very, very
portfolio. We’ve seen M&A in the gold space take out name
big asset. So my belief is that what we will see over the coming
after name after name.
year is quite a bit of very positive news. The more we drill, the
more we find. We say that Donlin Gold is a gift that keeps
on giving.
C H A I R M A N ’ S I N T E R V I E W 21
We’ve had some astonishing results – some of the
You’re going from almost none to potentially…
most promising in the gold mining industry – but there’s
also another factor here. For investors in NOVAGOLD stock
Right now, we have two analysts following us. God bless
and those who have relied upon me, Greg Lang, Mélanie
them, we love them dearly. But even they, I would imagine,
Hennessey, Igor Levental, and other members of the
would love to see six or eight analysts following us. Now,
NOVAGOLD management team to tell that story, we’re going to
just look at the psychology of it. If you are already following
see a sea change. Because as exuberant and passionate as we
Donlin Gold because you have to follow Barrick, because it’s
are about Donlin Gold, anyone who knows Mark Bristow knows
the 800-pound gorilla, then why not look at having a pure play
that when he loves, he loves very deeply. And I believe that he
on a great asset in a great jurisdiction? Why not? Some won’t
will be falling in love with Donlin Gold. He’s already said that
bother. Others will jump all over it. Now, that’s number one,
he’s catching up with the Kaplan narrative. Now, I think after
but number two is that as the Donlin Gold story gets rippled
anyone that’s been listening to me, that must be a terrifying
through the market because of Barrick, some of that offtake
prospect because the fact that two of us will be doing that
is going to spill out onto us. And we’re a stock with very, very
simultaneously is very good.
loyal shareholders who’ve been in it for a long time – some of
So here’s what I think will happen, which I believe is so
them almost as long as I have, and I’ve been in it for 12 years.
wonderful for NOVAGOLD shareholders: Number one, anyone
I am more passionate about the story than ever before. They
from the sell side who follows the gold industry follows Barrick.
are watching this unfold.
They’re now going to have to look more deeply into Donlin
In fact we’ve had multiple calls from people saying
Gold. Some of them will be doing so in the context of following
congratulations with regard to the December joint press
“When you look at NOVAGOLD, what
you see is this combination of Donlin
Gold’s size, grade, exploration potential,
production profile, and cost structure.
And superimposed upon all that is
jurisdictional safety.”
release because they understand that as Donlin Gold gets
some more coverage, more investors will be looking for a
pure play on the story. And you start to get a few shareholders
taking positions like the Public Investment Fund of Saudi Arabia
did over the last year or so, and it’s a game-changer. My agenda
and Greg’s agenda is that we are aiming to be the go-to stock
in the gold development space. I believe that we’re already
there. But more than that, we want to be viewed as being
the premier value and growth story in a sector in which the
defining attribute is scarcity.
Where do you think – because this is an unusual, unique
situation – NOVAGOLD should trade? I understand
that more analysts following it will certainly help, but
theoretically, hypothetically, we have a long-dated call
Barrick, which I really hope they will. This is great news for
on the gold price. That’s how I see it anyway. How in
Barrick shareholders because I don’t believe that the value of
your mind, and I’m strictly asking this from an academic
Donlin Gold is reflected at all in the Barrick share price. And
point of view, because I know you and I think the stock
analysts following Donlin Gold already will start to follow
should trade higher, but how would one analytically get
NOVAGOLD as a pure play on this emerging gold district.
to a higher price, when I guess production will not occur
So we’ll have more analytical coverage. I feel pretty confident
until six, seven, eight years down the road? What are your
about that. It’s almost the law of averages.
thoughts on that?
22
I’ve always been a believer that at the end of the day, the
money is made on having great assets. I’ve never believed that
production in and of itself should be the metric on taking a
position to the contrary.
TOP 10 SHAREHOLDERS
That’s radical in the world of sell-side research.
35.2%
all other
Completely. But you know, that’s how I’ve made my living.
If everybody adhered to the same opinion, I would’ve had
far more competition in the space. So if you’ve got someone
whose foremost credential to be in the mining industry is a
PhD in counterinsurgency, then there must be something else
going for him. In my case I am probably the luckiest person I’ve
ever met – personally and professionally. I’ve been blessed with
surrounding myself with the best in breed: geologists like Larry
Buchanan, specialists like Igor Levental and Ken Rye. And then
being able to create an ecosystem in which we have this coterie
of superior managements. For example, Greg Lang. Before he
$2.2B
market cap15
64.8% top 10
25.4% Electrum Strategic Resources
LP & affiliates
7.5% Fidelity Management &
Research Company
6.7% Paulson & Co. Inc.
6.0% BlackRock Institutional Trust
& affiliates
4.9% Saudi Public Investment Fund
3.6% EXOR Investments (UK) LLP
3.5% First Eagle Investment
Management
3.2% Van Eck Associates Corporation
2.6% The Vanguard Group, Inc.
1.4% Kopernik Global Investors LLC
joined NOVAGOLD, Greg was the president of Barrick North
Williams and Ron Rimelman and Dave Ottewell. A great cast of
America for eight years. He was producing more gold than
people, all of whom have this huge company experience but
Goldcorp, but he was also someone who had been with Barrick
have come together to help build out what they all believe to
and its predecessor companies for nearly 30 years. Why did he
be the greatest gold story in the space. When Richard Williams
leave Barrick to join NOVAGOLD? The reason was because, as
joined from Barrick, he had just taken into production Pueblo
he said, “I wanted to go into the company that had access to
Viejo. That was the biggest gold investment Barrick had ever
being a pure play on what I felt was the greatest development
made. And when Victor Flores, who came to visit Donlin Gold
story in the gold industry.” And he knew it. Donlin Gold came
for John Paulson, asked him why he made that move, Richard
under his purview at Barrick. He was part of the team that
conveyed that he wanted to be part of the greatest gold story
made the takeover attempt in 2006. So he was an educated
in the world. That’s a statement. And that is part of our DNA.
consumer – which of course as we know is the best customer.
We’ve all been together as a team for many, many years, and I
When he came in, he said, “I will join as CEO if you join as
enjoy it. I enjoy their company. Otherwise, I simply wouldn’t do
chairman.” And that’s how I took the position. I very rarely
it. I wouldn’t need to do it, that’s for sure.
join the boards of companies even if I own 70 or 80 percent of
them. My shareholders, those who follow us, know that I follow
You certainly don’t need to. One of the questions I think
these stories extremely carefully. As they say at Fidelity, the
that crosses investors’ minds, and certainly my mind from
owner lives above the store. I don’t have to be on the board of
time to time, is this is a large capital commitment. The last
NOVAGOLD, but I do it because I enjoy it. I do it because I am a
count was I think seven billion. I know it can be staged
huge believer in Donlin Gold. I nearly named my third child, our
and maybe wouldn’t be that large, but, from NOVAGOLD’s
youngest son, Donlin Gold. So that’s got to be indicative of the
point of view, whatever is decided would still be a major
passion which we have for this story.
financial commitment. So I would be interested in your
I do it because it’s one of the most enjoyable gigs in the
thoughts on how you will negotiate that particular issue.
gold mining industry. I get to work with Greg Lang. I get to
And I know there are many different ways to do it, but I
work with Mélanie Hennessey. I get to work with Richard
kind of think it would be interesting to hear your
thoughts on that.
C H A I R M A N ’ S I N T E R V I E W 23
Well, I can tell you that, when the time is right to go into
shareholder, what I want to see is that when gold prices are
production, I think this will be the easiest gold mine to finance.
where they should be, when the mine is ready to be built, our
In Alaska, with Barrick as a partner, it will be something where
share price I believe will be multiples where it is today.
I think it can be done in several phone calls. Now, let’s break
this down. I’m only using hypotheticals here. These are purely
One of the rationales for investing in NOVAGOLD is a belief
forward-looking statements; disavow all of them. I’m just using
in a substantially higher gold price, which is hard to come
round numbers. Let’s assume that phase one of the project
by these days outside of this room. Of the few believers in
is four billion dollars, split two ways. That’s two billion each.
gold, my friends are well chosen. You did toss out $3,000
Obviously for Barrick, not difficult – but not difficult for us
to $5,000 earlier; what are some of the things that come to
either. Electrum financed a very prosperous silver project in
mind as to how we’ll get there?
Mexico, which we operate ourselves (not with the benefit of a
major like Barrick), and we got 70 percent financing.
Now, $2,000 gold – if you’re a bull on gold – isn’t really a
AVERAGE GRADE
2.24 g/t
1.12 g/t
Donlin Gold average grade16
global average grade17
number. It’s nothing. And when I pivoted from energy to gold
in 2007, oil was heading to $120-140 per barrel. We sold our
energy company when oil was $120. Gold had a 600 handle,
and I gave all the reasons why I felt that one should be in a
currency that can’t be produced at will. And I think that gold
and silver provided me with exactly the kind of exposure that I
needed. When we sold our energy company, we didn’t go back
in because I told people I could no longer really comfort myself
with conviction as to whether oil was worth $20 or $120. Little
did I know that last year it would be worth briefly minus $20.
But the one thing that I did know is that gold would multiply,
and my long-term target for gold in 2007 was between $3,000
and $5,000 when it was at $600. So we’re on our way. I mean
we’ve tripled since then. And something that I really want to
mention because you’ve brought this out in your own writings.
The idea that you need to be a dollar bear to be a gold bull;
Let’s say that happens for us. What are we really talking
it’s not true. The idea that you need to be a bull on oil to be
about? $600 million, $700 million, $800 million? Now let’s
a gold bull; it’s not true. You’ve pointed these out, and here’s
do something that investors very rarely do, but they should,
the proof: In 2007, we got a wire transfer for $2.55 billion from
which is to take themselves out of where they are today
Encana for the sale of our stake in Leor Energy…
and their present mindset and understand what will be the
conditions that will pertain when we’re talking about going
You remember the date?
into production. I believe that gold will have embarked on the
next leg of its bull market. I think that it will take us well beyond
Oh yeah, and if for no other reason than that I have no idea
$2,000. I think ultimately it’d be $3,000 to $5,000, but once
what would have become of us if we had made that sale six
you see that gold has embarked upon that next wave, I think
months later. One thing I did was I looked around at where we
Barrick will be extremely excited to go into production. And I’ve
were going to park the money. Well, dollar-euro was 1.47. Today
always said that when Barrick is ready, we’ll be ready. We have
it’s 1.13. Gold was $600-ish and it’s three times higher with
three sovereign wealth funds as our partners in Electrum, and
the dollar having strengthened by 30 percent. The concept
we’re very, very close to them and we’ve always had a number
that you have to be a dollar bear is not true. Oil was $120 with
of major players in the financial space in mining who’ve always
gold at $600-ish. Oil is now half – and was even much lower
said when you’re ready, just let us know. For me as the largest
– and gold is a multiple of that, which tells you this: First of
24
all, gold has been the best performing currency in the world,
that long-term in our thinking to understand that crypto is
and second, as a commodity, which is the way some people
a phenomenon. Crypto currencies are here to stay, just as
look at it, it’s also outperformed. So when I look at gold, I see
automobiles were a phenomenon, just as airplanes were a
something that is an accident waiting to happen. And I love
phenomenon. Railroads were a phenomenon. Most of those
being long on accidents.
that were early movers ended up going broke.
We don’t yet know who the winner is. I personally think
Seems to be asymmetric in terms of risk/reward.
that it’s likely to have a Chinese name attached to it. They’re
Completely. So when I look at the gold space, I see no
States. They have of course phenomenal opportunity just
reason to adjust my $3,000 to $5,000 target. And by the way, I
domestically to be able to develop that market. And through
think that there will be days when gold trades peak to trough
the Belt and Road Initiative, they have a lot of other countries
the absolute price that it’s trading today. It would not surprise
who may very well be open to that idea. What that means for
me to see $1,700-$1,800 days where gold will trade up and
things like Bitcoin or Ethereum, I don’t really know.
a larger trading partner with more countries than the United
down. I think that we’re going to see that kind of volatility by
I am, I suppose, a true
definition. That means that gold is a great buy here, if I can say
conservative. There was a
that with that level of conviction. I did that once before when
professor at The London
I made that forecast in silver, which was trading at around
School of Economics named
$6 per ounce at the time and people thought that I was nuts
Michael Oakeshott who once
and you had much greater intraday volatility a couple of
defined a true conservative
years later – the implication being that silver was much, much
as one who prefers present
higher. So for gold bulls, I would say what we’re seeing now is a
happiness to future utopia.
correction within a long-term bull market, but $2,000 won’t be
There are many different
the number. And if $2,000 per ounce gives me a $10 billion NPV
forms of crypto. I don’t know
for Donlin Gold without adding any reserves, you know what?
which of them will emerge
That’s a very good investment.
victorious, whether we even
know its name yet. I do
This is probably a good time to bring up crypto, because
know that there’s only one
I think crypto has sucked the oxygen out of the room for
gold, there’s only one silver.
gold in many ways. It’s been a headwind, and certainly
They have their chemical
has a generational aspect to it in that guys at my stage of
definitions. They’re called
the game believe in gold. What are your thoughts on the
AU and AG, and that’s it.
competitive aspects of gold and crypto?
So, what we’ve seen in the
crypto market to me is extremely bullish. In the same way that
It reminds me of that famous exchange between Henry
I view the scarcity value of Donlin Gold to be one of its greatest
Kissinger and Premier Zhou Enlai when Kissinger was secretly
attributes, I view the scarcity value of precious metals to be
negotiating Nixon’s visit to China and the U.S.’s recognition of
amongst those greatest attributes.
the People’s Republic. Kissinger, being a historian, asked Zhou
Let’s understand what the crypto phenomenon really
Enlai what he thought the long-term implications were of the
means in its essence. It means that your narrative, the John
French revolution of 1789. Zhou Enlai famously responded,
Hathaway narrative, the Tom Kaplan narrative, has won.
“It’s too soon to tell.” Now I don’t think that we need to be
That is, we have seen gold – and the reasons why people buy
C H A I R M A N ’ S I N T E R V I E W 25
gold – be adopted by the crypto crowd, to the extent that in
Now, I don’t need people to have as much exposure to
order to be able to induce people to look at crypto in the first
gold as to crypto. If we even had a fraction of the market cap of
place, people refer to it as gold 2.0. Now for some people, that
Bitcoin, going into gold, gold would be at $20,000 per ounce.
may be enough to be able to have exposure to crypto as being
But do I think that there’s going to be some spillover effect
a currency that has limited ability to be reproduced. But there
onto gold, as people say? Well, maybe gold is undervalued.
will always be enough people who are interested in gold, and
I think personally that the acceptance of that “gold 2.0”
Relative to…
“If you don’t have great relationships with
the communities, if you don’t have great
relationships at the provincial level so
that people...see that what you are doing
is going to have a direct impact on their
lives and, most important, the prospects
for their children, then you’re going to go
nowhere fast — or even worse, you’re going
to build something and find that you have
challenges. We don’t have those issues.”
Yeah, we’ve bought the argument for gold, but maybe it is
actually undervalued. And it does cost something to produce
– that we can quantify – so we just need some of that to rub
off on a scarce asset and gold will be like a bat out of hell. And
one of the things that we’ve seen is that in today’s world, when
something’s going up, that’s when people really want it the
most. So, if gold goes through $2,000, it can also go to $2,100,
$2,200, $2,500…. People will start saying I’ll buy it on a pullback
and then it will pull back and then they’ll be afraid to buy it
because they don’t want to be the sucker who bought it at all-
time highs. And then it can go to $3,000, $4,000, $5,000.
We see that, by the way, in cryptocurrencies. We see that in
assets when they’re in a bull market and they have momentum,
and especially now where there’s so much capital. So, I think
when you do see that $2,000 breakthrough, it’s going to
be enduring and the uptrend will be violent, which is just
wonderful for us and it’s especially wonderful if you’ve got
assets with great leverage to that in places that are not going
to nationalize you because now you’re viewed as a strategic
asset that should be in their portfolio. You want to be in a place
where private property is enshrined constitutionally – and
narrative is going to create a lot of arbitrage between gold
there aren’t that many.
2.0 and gold 1.0. You know the Chinese, the Indians, many
countries around the world are still buying a lot of gold. Central
Right. It’s a short list.
banks are buying a lot of gold. Singapore, which is a bellwether
central bank, bought gold for the first time in decades. That
And getting shorter by the day. You know, they say that
was made public in December. Now to me, central banks are
they don’t ring a bell, but as we were discussing earlier, the
like insiders. They know the value of the assets that they hold.
“Go where the gold is” mentality really began in the early 1990s
Most of which are dollars.
when Newmont went to Yanacocha. I think that they rang the
bell when Newmont and its partner Buenaventura weren’t
able to continue with Mina Conga in Peru. There was almost
Most of which are dollars, are now subpar financial assets
an unfortunate but poetic symmetry to the entire arc of the
that they’ve had to hoover up in order to sustain the global
scramble for gold, regardless of jurisdictional risk. But we see
economy since 2008, 2009. So when they’re buying gold, it’s
it now across the board. In fact, in Peru, you know, they just
like when a museum buys a work of art. They’re voting with
devastated a silver miner stock on the London stock exchange.
their feet to be able to have some exposure to it.
26
True.
This is happening now all over. And who needs it?
UPSIDE VALUE 18
And it’s kind of monkey see, monkey do. I mean, if one
Net Present Value
(NPV) (US$ in billions)
NPV at 0%
NPV at 5%
country decides to get more of the economics, they’re all
going to follow in.
If your neighbor has just changed the rules, whether
it’s windfall profit taxes or local ownership or outright
nationalization, and you’re on the other side of the fence,
you have to follow suit, politically. It’s suicide not to. If you’re
a dictatorship, people will be saying, “He must be on the
take of the mining company.” If you’re a democracy, your
constituents aren’t going to allow your national endowment
to be plundered by foreigners. When on the other side, they’ve
shown you can get away with getting more. So politically,
regardless of your form of government, it’s unsustainable for
$35.0
$30.0
$25.0
$20.0
$15.0
$10.0
$5.0
$0.0
31.6B
22.5B
17.5B
13.1B
8.8B
$1,300
Gold Price US$/oz
$1,500
$1,700
$2,000
$2,500
other governments not to join in. I often say it’s like popcorn:
First of all, as you said, we have the luxury of time, and it
Nobody ever eats one piece of popcorn. I think that that’s
really is a luxury. My own experience in the space shows how
already begun. So if I’m right about that from an investor
being developers can give you such a long runway to have
standpoint, it means that the premium multiples are going to
opportunities to make money. But we are quite a while away
be seen in those assets in safe places, which are immune from
from being in a situation where cost pressures today are going
that kind of confiscatory trend.
to have an impact on our valuation. The most important aspect
that goes into determining what your cost of production
Well, Tom, one of the things that we spent a lot of time
is going to be is grade. So therefore, all things being equal,
obsessing about are costs. In fact, we’ve interviewed many
ceteris paribus, if you have a company that is extracting one
different managements and one of the first questions is,
gram of gold per tonne, rather than two grams – or in our
What do you expect your all-in sustaining costs to be and
case, two-plus grams per tonne – their cost of production is
where are the cost pressures coming from? And we’re
going to be double what Donlin Gold’s would be. The grade
finding that in many cases we’re talking about 6-7 percent.
profile of Donlin Gold as a large-scale open-pit mine gives
Of course, there’s no inflation. Of course, it’s transitory.
us tremendous advantages. It will place us at the low end of
But in my mind, it’s not. And, obviously that’s one of the
the cost curve. But let’s again enter into the exercise of what
arguments for gold as inflation has become embedded
does it mean if we have five or six percent cost inflation in
and there’s no way out, but when it comes to NOVAGOLD,
gold mining by the time we’re in production? What does that
we’re a long way away from producing. How do you think
mean for the price of gold? Do you really think that gold will
investors will look at the profile of costs and the structure
be at $1,700 or $1,800? One of the challenges that investors
of the costs in Donlin Gold when it starts producing?
have – you don’t suffer from this issue – is that they make the
C H A I R M A N ’ S I N T E R V I E W
27
assumption in valuing something that the conditions upon
2008 when the deal was signed. But one of the most important
exit are going to be the same as they are today. In other words,
things is that he said, “Look, you’re in a position to buy the
they don’t game things out. What we always try to do is we say
company for $2 a share. You have the cash. Barrick tried to buy
to ourselves, okay, hopefully we’re buying when you have, as
it at $16 a share. You don’t think that they’re going to walk you
John Templeton put it, maximum pessimism. That was certainly
up dollar for dollar until they get to where they want?” And it
the case when we came into NOVAGOLD. It was on the verge of
turns out that Barrick wasn’t the only company that was hoping
bankruptcy, and we hadn’t owned one share when we came in
to buy NOVAGOLD on the cheap. There were others, including
as a white knight and saved the company. And because of the
Newmont and even the Russians. And so we realized we have
exigent circumstances, we were able to go to 40 percent rather
an opportunity to take control of one of the greatest gold
than having to take a takeover bid. I wanted to buy the whole
stories in the development space: NOVAGOLD. But we would
company, but fortunately, I have around me people whose job
have to settle for less than a hundred percent. And we ended
in life….
Calmer heads prevail.
It’s not just calmer heads, it’s wiser heads. So, in this
up going 40 percent fully diluted. That was the right move.
The attributes of Donlin Gold are that we are in a
situation where the grade gives us plenty of leeway. Grades
have collapsed over the decade-plus that I’ve been in the
NOVAGOLD story. We’re now approaching one gram per tonne
for projects and going sub-one gram per tonne. At a certain
point, particularly if you’re not in stable jurisdictions, this is a
real challenge.
When we look at Donlin Gold, which has multiples more
than those projects, we know that we have a cushion. And if
anything, the results of the drill programs over the last couple
of years have given us, with great input from Mark Bristow as a
geologist – and the Barrick team – a much greater definition on
the controls on the mineralization. The Bristow of Barrick, or the
Barrick of Bristow, is absolutely committed to wanting to know
every single ounce that will come out over a 10-year period.
And I think that’s a great discipline. I think you, as an investor
– I, as an investor – in the space have come to understand that
when people cut corners, the back end can be pretty brutal.
The more work you do on the front end, the more the back will
take care of itself.
instance, comrade Igor Levental was whispering into my
Now we know that once Donlin Gold is built, it will have
ears as he was supposed to: “Thou art mortal, Caesar.” So,
been pretty well-engineered. Costs will be known. Cash flow
whereas I sold my energy company and was flush with cash
year X will be pretty much known other than the gold price.
and brimming with conviction on gold, particularly on the
holy grail, in my mind, which was Donlin Gold, then hence
Look, we have an A team: You have the Barrick side, of
NOVAGOLD, he was saying, “You know, you might think twice
course, led by Mark; you have the NOVAGOLD side led by Greg.
or three times about making a bid for the entire company
Richard Williams built Pueblo Viejo for Barrick and at the time
because everyone may be asleep,” as it was December 31st,
Goldcorp, now Newmont, and is one of the world leaders
28
in autoclave technology. So, when we look at Donlin Gold,
the amount of work that’s gone into it, combined with the
robustness of the asset and the grade, we’re very comfortable
in where the cost structure will be. But once again, people tell
me, “Well, you know, you could have significant cost inflation
years down the road.” And I say, like General David Petraeus
said as Commander in Iraq, “Tell me, where does this end?” If
you say that, then please tell me, where do you think gold is?
“Oh no, we make the assumption gold is the same.” Really?
Then why are we even talking?
Yeah, the average expectation on the sell side is $1,600
gold per ounce. It’s a flat price deck.
Well, you know, we are bullish on gold and we want to
be able to provide the premier vehicle for those who want it,
on a risk-adjusted basis, the most octane and the lowest risk
in the development space for a Tier-One asset in a Tier-One
1.20
1.00
0.80
0.60
0.40
0.20
0.00
PRODUCTION
Projected Annual Gold Production (millions of ounces)
1.10
0.5
0.39
0.37
0.36
0.32
Donlin Gold
USA19
Goldrush
USA20
Courageous Lake
Canada20
Côté Gold
Canada20
Salares Norte
Chile20
Blackwater
Canada20
jurisdiction. That’s our mantra. We are gold bulls. And for those
Well, fortunately, we haven’t had to make any
who aren’t gold bulls…
Go somewhere else.
philosophical adjustments in the company for the last decade.
Greg Lang, the entire management team of NOVAGOLD, and
I have always been extremely committed to ESG on every
level. And even before ESG became a popular initialism, my
One thing I’ve learned over the last 30 years is bears don’t
own affinity, indeed passion, for wildlife conservation and
buy shares. And I will spend time talking to someone if they
particularly for species which require entire landscapes in
have a thousand shares or they have 10 million shares. I enjoy
which to be able to thrive, like big cats, means that for me, the
it, clearly, and it’s not because I have to do it. It’s because I like
environment is not just second nature, it’s actually first nature.
to do it. Being associated with Donlin Gold to me is like being
So the first thing that my kids will associate with me is passion
associated with Rembrandt or being associated with tigers.
for wildlife. And I’ve managed to inculcate that in all of them.
You’re literally talking the best in breed in their space. That’s
So I would never ever be around anything that countenanced
not a hardship, that’s a privilege.
cutting any corners when it comes to the environment or
sustainability.
Maybe this would be a good time to talk about
Social license, the environmental license, is existential in
sustainability. It’s something that we frankly have become
the mining industry. If you don’t have great relationships with
more and more involved in, and, of course, it has become
the communities, if you don’t have great relationships at the
one of the screens by which large capital will invest in the
provincial level so that people buy in so that they see that what
mining space. So I’d be interested in hearing how you look
you are doing is going to have a direct impact on their lives
at that and what you’re doing – and what you still need to
and, most important, the prospects for their children, then
do in terms of the ESG side of the equation.
you’re going to go nowhere fast – or even worse, you’re going
C H A I R M A N ’ S I N T E R V I E W
29
to build something and find that you have challenges. We don’t
that we’ve made to shareholders, we’ve kept. Soon after we
have those issues. We’ve been very blessed in that our local
came on board, we did a capital raise at the beginning of 2012.
partners, Calista and TKC, are our most vocal supporters. And of
We raised over $330 million dollars because of the enthusiasm
course the Native Corporations will all share in the benefits of
of the combination of both of us and our relative skillsets.
Donlin Gold. All of the Native Corporations in Alaska – that’s the
What endeared the investors to us was that we laid out very
way the system works. So, a certain percentage goes to those
specifically what our plans were.
who are most immediately related to the project, and the rest is
We were going to spin off the company’s copper assets.
spread around the state. We have that kind of buy-in.
We did. The company is now called Trilogy Metals. It’s a very
As far as governance is concerned, we are a paradigm of
successful developer in partnership with South 32 in Alaska.
an independent board. I’ve always believed that shareholders
We would sell our share of Galore Creek, not for the $40 or
should have a significant say even at the board level. I think
$50 million that people assumed, but for $200-275 million.
RESOURCE SIZE
39.0 Moz
7.7Moz
Donlin Gold7
peer group average21
We would therefore position Donlin Gold as a pure play on the
next Nevada through our vehicle, NOVAGOLD.
So we felt we didn’t have headwinds. And in fact we
moved right through permitting all the way through to a
Record of Decision. So, essentially what you have is a company
that articulates its strategy. It’s not trying to be all things to all
people. We’ve never gone out of our way to say when we’re
going to go into production, for the simple reason that we’ve
always said that the whole idea is to make money and that
required higher gold prices because our job is not to be
producing high-grade, open-pit gold to subsidize Chinese and
Indian consumption. When share prices are higher, we
minimize dilution. And to our mind, certainly now, the shares
are more valuable than the metal itself. So, for all of these
reasons, I think that we have an exceptionally educated
shareholder base, which is one of the reasons why they’ve been
very loyal to us. Obviously, as they say in Russia, a fish rots from
the head down. So they at least see that in our case, the owners
that the transparency with which NOVAGOLD has conveyed
live above the store and are completely investor-friendly
its message in the media, in our annual reports, to our
because we’re in fact the largest shareholders. We’ve got skin
shareholders, is at least as good if not actually the best of any
in the game.
company that I’ve encountered. I remember in my first mining
story, when we went public, I waived rights to be able to have
Now that you’re positioned, you’ve sold Galore, you’ve
more board seats because I felt having more independent
spun out Trilogy, you’re permitted, and you’ve got the
directors means that you’re going to get more independent
Record of Decision, what would you say are the next key
points of view.
events from an investor’s point of view in 2022 – and
The more independent points of view you get, especially if
maybe beyond?
you’re just coming into the space and you’re in your thirties, the
less likelihood you have of problems. That certainly pertains to
Well, I think that we just had a press release, which was
the NOVAGOLD board, but more than that, we have gone out
issued in December, that lays out the joint strategy by Barrick
of our way strenuously to leave no room in terms of explaining
and NOVAGOLD for taking Donlin Gold up the value chain.
to our shareholders what our strategy is. And I’m very proud of
We have a drill program coming up. It’s very exciting for us,
the fact that since the 10 years that Greg Lang and I have been
especially for me, because my fortunes have been made
functioning as CEO and chairman, respectively, every promise
through the drill bit and I’ve always been a very strong believer
30
in the exploration potential at Donlin Gold. And in a bull market
one day NOVAGOLD be the object of a takeover attempt, one
in gold, when you deliver exploration results that are positive,
of the most attractive attributes for an acquirer is that when
it’s a very, very wonderful thing. So, I’m looking forward to that
they enter into the story, they are not subordinate to the
and I believe that the next step will therefore be a review of
existing partner. It’s a true 50/50. They will both jointly be the
the feasibility study, which was last done nearly a decade ago.
operator. That is a huge selling point in this industry.
Sure, a lot has changed, not the least of which is the potential
strategy itself of developing Donlin Gold in stages. Ultimately
that will be determined jointly by the board of Donlin Gold,
which is 50 percent Barrick, 50 percent NOVAGOLD.
One of the things that I really have to stress – because it’s
one of our most attractive attributes – is that Donlin Gold, the
joint venture, is a true 50/50, which means that no partner has
one iota greater rights than the other. In practical terms, we’ve
never had any dissonance between the shareholders, certainly
not since the time that I’ve been involved in the story. We get
along extremely well with Barrick and the relationship between
the management teams of Barrick and NOVAGOLD has never
been better. And Mark Bristow and I have a relationship that
goes back over 20 years and has been marked by successes in
African Platinum, where he was a director and I was the largest
shareholder.
I was the largest shareholder of Moto Gold and was able to
deliver that to him when he decided that he wanted the Kibali
Not that you’re for sale…
project in Congo, and we’ve enjoyed really great relations. But
very importantly, what you also see is that we’re in sync on the
Not that we’re for sale, but our job is to ensure that under
work plan which has been laid out, something that is using
any eventuality we get the premium valuation for our asset.
very much Randgold kind of influences. In terms of news flow,
And if that means being the beneficiary of things that took
we’re hopeful about the next drill program and we believe
place before we came onto the scene, great. I think everything
that it should lead to a decision by Donlin Gold to proceed
that we have done on our watch has positioned the company
with a review of the feasibility study. When we talk about the
so that we are in a position to take this project, with our partner
Donlin Gold joint venture, investors have to understand that
Barrick, up the value chain; to be able to finance the project,
the way that it was constructed was brilliant. It had nothing to
our aim being with minimal equity dilution; and if someone
do with me so I’m not claiming any credit for it, but before we
else is going to pay shareholders for the future – in a way that
came into the NOVAGOLD story, they had devised two 50/50
is accretive and attractive – our job is to maximize that value
joint ventures on Donlin Gold Creek, as it was then called, and
and hence to maximize the valuation. I think that everything
Galore Creek. These are genuine 50/50s, which is why when
that we’ve done – but most importantly, everything about the
Newmont came into Galore Creek, they were able to join Teck
Donlin Gold asset – has given us the attributes that, whether
Resources as a completely equal partner. In this business, unlike
we take this into production or someone else does, it’s going
in hydrocarbons, for example, that extra 0.1 of a percent and
to prove to be one of the industry’s really, really great and
operatorship makes a big difference. Because we don’t have
epic successes.
any deficiency in that respect with regard to Barrick, should
C H A I R M A N ’ S I N T E R V I E W 31
Delivery of supplies for the 2021 Donlin Gold drill program.
32
33
NOTES
1) See media releases titled “Donlin Gold Initial
6) See July 26, 2018 media release titled
“NOVAGOLD Enters Agreement to Sell Its 50%
Stake in Galore Creek to Newmont for up to
$275 Million.”
7) Donlin Gold data as per the 2021 Technical
Report and the S-K 1300 Technical Report
Summary (as defined herein). Donlin Gold
proven and probable reserves of approximately
16.925Moz grading 2.09 g/t attributable to
NOVAGOLD (33.849Moz on 100% basis) and
measured and indicated resources, exclusive of
reserves, of approximately 2.749Moz grading
2.43 g/t attributable to NOVAGOLD (5.497 Moz
on 100% basis). 39Moz refers to mineral resources
inclusive of reserves on a 100% basis.
8) Donlin Gold data as per the 2021 Technical
Report and the S-K 1300 Technical Report
Summary (as defined herein). Donlin Gold
measured resources of approximately 8 Mt
grading 2.52 g/t and indicated resources of
approximately 534Mt grading 2.24 g/t, each
on a 100% basis and inclusive of mineral
reserves, of which 50% are attributable to
NOVAGOLD through their 50% ownership
interest in Donlin Gold LLC. Exclusive of mineral
reserves, Donlin Gold possesses measured
resources of approximately 1Mt grading 2.23
g/t and indicated resources of approximately
69Mt grading 2.44 g/t, each of which 50% are
attributable to NOVAGOLD. Mineral resources
have been estimated in accordance with NI 43-
101 and S-K 1300.
9) 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.
10) Annual Survey of Mining Companies, 2020
11) The jurisdictional risk map is derived from the
top 10 (lower risk) and bottom 10 (extreme risk)
of 77 jurisdictions reviewed in the Fraser Institute
Annual Survey of Mining Companies, 2020.
12) Represents 100% of M&I resources, inclusive of
mineral reserves, of which 50% is NOVAGOLD’s
share. Donlin Gold is not in production and
a construction decision has not been made.
See “Cautionary Note Concerning Reserve and
Resource Estimates” and “Mineral Reserves &
Mineral Resources” table on page 35.
13) Gold development stage projects defined as the
top 5 globally by contained gold in measured
and indicated resources, >75% projected
revenues from gold, and with stated proven
and probable reserves, as per latest company
documents, public filings and websites as of
November 2021.
2021 Drill Program Results Continue to Deliver for
Project Advancement”, September 2, 2021 and
“Barrick and NOVAGOLD Agree on Next Steps
Toward Advancement of Donlin Gold; Drill Assay
Results Continue to Yield High-Grade Intercepts
and Demonstrate Important Grade Continuity;
With Clear Improvement in Definition of Controls
of Mineralization, the Project is Advancing
Towards Feasibility Study Update”,
December 2021.
2) Anticipated annual gold production during full
life of mine if put into production as per the
NI 43-101 Technical Report on the Donlin Gold
Project, Alaska, USA with an effective date of
June 1, 2021 (the “2021 Technical Report”) and
the S-K 1300 Technical Report Summary on the
Donlin Gold Project, Alaska, USA, November 30,
2021 (the “S-K 1300 Technical Report Summary”).
See “Cautionary Note Concerning Reserve &
Resource Estimates” and “Mineral Reserves &
Mineral Resources” table on page 35.
3) 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.
4) Forecast includes $30 million to Donlin Gold, $13
million to NOVAGOLD G&A and $3 million for
withholding taxes on PSUs and other working
capital. This report may also contain future-
oriented financial information (“FOFI”) and
information which could be considered to be in
the nature of a “financial outlook”. Such FOFI or
financial outlook was approved by NOVAGOLD’s
management as of the date of this report for the
purpose of providing management’s reasonable
estimate based on the assumptions set forth in
such estimates and the information may not be
appropriate for other purposes. Management
cautions that such FOFI or financial outlook
reflects NOVAGOLD’s current beliefs and are
based on information currently available to
NOVAGOLD and on assumptions NOVAGOLD
believes are reasonable. Actual results and
developments may differ materially from results
and developments discussed in the FOFI or
financial outlook as they are subject to a number
of significant risks and uncertainties. Certain
of these risks and uncertainties are beyond
NOVAGOLD’s control. Consequently, all of the
FOFI or financial outlook are qualified by these
cautionary statements, and there can be no
assurances.
5) NOVAGOLD sold its 50% ownership of the Galore
Creek project to Newmont in 2018. Deferred
compensation on the sale of Galore Creek
includes $25M on the earlier of completion of a
Feasibility Study or July 27, 2023. An additional
$75M is due upon construction approval. For
additional detail, see the media release dated
July 28, 2021: “NOVAGOLD Receives $75 Million
from Newmont Corporation”.
34
N O T E S
14) Only three mines produced greater than 1 million
ounces in 2020: Muruntau (2,652koz), Carlin
(1,665koz), and Olimpiada (1,229koz), as per SNL
Metals & Mining, an offering of S&P Global Market
Intelligence.
15) Market Capitalization based on 332.9 million
shares issued and outstanding and NOVAGOLD
share price of $6.82 as of January 25, 2022. Stock
options outstanding as of January 19, 2022.
16) Represents average grade of measured and
indicated mineral resources, inclusive of mineral
reserves. See “Cautionary Note Concerning
Reserve and Resource Estimates” and “Mineral
Reserves & Mineral Resources” table on page 35.
17) 2020 average grade of open-pit and
underground deposits with gold as primary
commodity and over 1Moz in measured and
indicated resources, sourced from S&P Global
Market Intelligence.
18) Donlin Gold data as per the 2021 Technical
Report and the S-K 1300 Technical Report
Summary (as defined herein). All dollar figures are
in USD, represent 100% of the project of which
NOVAGOLD’s share is 50%, and reflect after-tax
net present value (at 0% and 5% discount rates)
of the Donlin Gold project using the reference
date of start of Year -06 as the first year of
discounting. Estimated owner’s initial capital
project development costs of approximately
$348M to be spent prior to the reference date
are treated as sunk costs. At a 5% discount
rate, the net present value is: $1,161M at $1,300
gold; $3,040M at $1,500 gold; $4,887M at $1,700
gold; $7,229M at $2,000 gold; and $11,199M at
$2,500 gold. The project requires a gold price of
approximately $930 per ounce to break even on
an undiscounted cash flow basis and a gold price
of approximately $1,180 per ounce to break even
on a 5% discounted basis.
19) Anticipated annual gold production during
full life of mine if put into production as
contemplated in the 2021 Technical Report
and the S-K 1300 Technical Report Summary
(as defined herein). See “Cautionary Note
Concerning Reserve & Resource Estimates” and
“Mineral Reserves & Mineral Resources” table on
page 35.
20) Peer group data based on company documents,
public filings and websites as of November 2021.
Comparison group of 14 projects based on
large (2Moz P&P cut off), North/South American
gold-focused development projects with >75%
projected revenues from gold.
21) Average of comparison group data of 14 projects
based on large (2Moz P&P cut off), North/South
American gold-focused development projects
with >75% projected revenues from gold, as per
latest company documents, public filings, and
websites as of November 2021.
MINERAL RESERVES & MINERAL RESOURCES
Donlin Gold
GOLD
Reserves1
Proven
Probable
P&P
Resources,2 exclusive of Reserves
Measured
Indicated
M&I
Inferred
Resources,2 inclusive of Reserves
Measured
Indicated
M&I
Inferred
Tonnage
kt
7,683
497,128
504,811
869
69,402
70,271
92,216
7,731
533,607
541,337
92,216
Grade
g/t Au
2.32
2.08
2.09
2.23
2.44
2.43
2.02
2.52
2.24
2.24
2.02
Metal content
100% basis
Attributable to
NOVAGOLD 50%
koz Au
koz Au
573
33,276
33,849
62
5,435
5,497
5,993
626
38,380
39,007
5,993
287
16,638
16,925
31
2,718
2,749
2,997
313
19,190
19,503
2,997
Donlin Gold approximate cut-off grades
(see Mineral Resources and Reserves Footnotes):
Reserves:1 0.57 g/t gold
Resources:2 0.47 g/t gold
Notes:
a) Mineral Reserves & Mineral Resources are
reported on a 100% basis and on a 50%
ownership basis, and are current as of
November 30, 2021. The 50% basis is
attributable to NOVAGOLD through its
50% ownership interest in Donlin Gold LLC
which owns the Donlin Gold project.
b) These Mineral Reserve and Resource
estimates have been prepared in
accordance with NI 43-101, the 2014 CIM
Definition Standard, and S-K 1300.
c) Rounding may result in apparent
summation differences between tonnes,
grade and contained metal content
d) Tonnage and grade measurements are in
metric units. Contained gold is reported as
troy ounces. Currency is reported as U.S.
dollars.
t = metric tonne
g/t = grams/tonne
oz = troy ounce
k = thousand
M = million
Mineral Resources and Reserves Footnotes:
1) Mineral Reserves are reported within the pre-feasibility pit designs, and supported by a mine schedule, featuring variable throughput rates, stockpiling and cut-off optimization. The point of reference for Mineral
Reserves estimates is where the reserves are delivered to the mill. The pit designs are contained within an optimized pit shell based on the following economic and technical parameters: Metal price for gold of $1,200/
oz; reference mining cost of $2.16/t incremented $0.0033/t/m with depth from the 220 m elevation (equates to an average mining cost of $2.64/t), fixed processing cost $13.78/t processed; sustaining capital of $1.54/t
processed; general and administrative cost of S$3.66/t processed; stockpile rehandle costs of $0.24/t processed assuming that 45% of mill feed is rehandled; variable metallurgical recoveries by rock type, ranging from
86.7% in shale to 94.2% in intrusive rocks in the Akivik domain; refining and freight charges of $1.21/oz gold; royalty considerations of 4.5% NSR and $0.50/t processed; and variable pit slope angles, ranging from 23° to
43°. Mineral Reserves are reported using an optimized block value (BV) based on the following equation: BV = Au grade * Recovery * $1,200/oz – royalties & refining costs – process operating costs – G&A cost reported in
$/t. Assuming an average gold recovery of 89.5% the marginal gold cut-off grade would be approximately 0.57 g/t, or the gold grade that would equate to a $0.001 BV cut-off at these same values. The life-of-mine (LOM)
strip ratio is 5.48:1. The assumed LOM throughput rate is 53,500 t/d.
2) Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Inferred Resources are in addition to Measured and Indicated Resources. Inferred Resources have great uncertainty as to
their existence and whether they can be mined legally or economically. The cut-off date for the sample database used in the Mineral Resource estimate is 1 November 2009. However, more recent drilling data were
used to validate the resource model as remaining current. Mineral resources are reported in-place (point of reference) and contained within a conceptual measured, indicated and inferred optimized pit shell using
the following assumptions: gold price of $1,200/oz; variable process cost based on 2.1874 * (sulphur grade) + 10.6485; administration cost of $2.29/t; refining, freight & marketing (selling costs) of $1.85/oz recovered;
stockpile rehandle costs of $0.20/t processed assuming that 45% of mill feed is rehandled; variable royalty rate, based on royalty of 4.5% * (Au price – selling cost); and a variable metallurgical recovery depending on
the host rock type ranging from 86 to 94%. Assuming an average recovery of 89.5% and average S% grade of 1.07, the marginal gold cut-off grade is 0.47 g/t. These technical and economic parameters are those that
were used in the Donlin 2011 Technical Report to establish reasonable prospects of eventual economic extraction (effective 11 July 2011). Based on the QP review of the estimate, there would be no material change
to the Mineral Resources if the gold price were updated to $1,500/oz and other economic parameters were updated to the 2020 parameters used in the Mineral Reserve estimate. As a result, the Mineral Reserve and
Mineral Resource estimates shown above remain unchanged from the 2011 estimates contained in the prior technical report. S-K 1300 requires that Mineral Resources be reported exclusive of Mineral Reserves. We have
supplementally reported Mineral Resources inclusive of Mineral Reserves.
Regarding Forward-Looking Statements
This report 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. All statements, other than statements of historical fact, included herein, including, without limitation, statements regarding the permitting, potential development, exploration, construction
and operation of Donlin Gold and statements relating to NOVAGOLD’s future operating and financial performance and production estimates are forward-looking statements. Forward-looking statements are frequently, but not
always, identified by words such as “expects”, “anticipates”, “believes”, “intends”, “estimates”, “potential”, “possible”, “poised”, and similar expressions, or statements that events, conditions, or results “will”, “may”, “could”, “would” or “should”
occur or be achieved. These forward-looking statements may also include statements regarding the exploration potential of Donlin Gold; anticipated mine life; perceived merit of properties; anticipated permitting timeframes;
exploration and drilling results and budgets; mineral reserve and resource estimates; work programs; capital expenditures; timelines; market prices for precious metals, including the potential performance of the price of gold or
other statements that are not statements of fact. Forward-looking statements involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events
could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from NOVAGOLD’s expectations include the uncertainties involving unexpected cost increases,
which could include significant increases in estimated capital and operating costs; the need for additional financing to explore and develop properties and availability of financing in the debt and capital markets; risks related to
the outbreak of the coronavirus global pandemic (COVID-19); uncertainties involved in the interpretation of drilling results and geological tests and the estimation of reserves and resources; the need for continued cooperation
with Barrick Gold Corporation for the continued exploration and development 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, non-compliance with environmental and permit requirements; unanticipated variation in geological structures, ore grades or
recovery rates; the need to obtain permits and governmental approvals; 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 annual report filed on Form 10-K for the year-ended November 30, 2021, and subsequently in NOVAGOLD’s quarterly reports filed on Form 10-Q, with the United States Securities and
Exchange Commission (SEC), Canadian securities regulators, and in other NOVAGOLD reports and documents filed with applicable securities regulatory authorities from time to time. Copies of these filings may be obtained at
no charge by visiting our Investor Relations website at www.novagold.com or the SEC’s website at www.sec.gov or at www.sedar.com. NOVAGOLD’s forward-looking statements reflect the beliefs, opinions and projections of
management 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.
Forward-looking statements are based on a number of material assumptions, including but not limited to the following, which could prove to be significantly incorrect: our ability to achieve production at any of our mineral
exploration and development properties; estimated capital costs, operating costs, production and economic returns; estimated metal pricing, metallurgy, mineability, marketability and operating and capital costs, together with
other assumptions underlying our resource and reserve estimates; our expected ability to develop adequate infrastructure and that the cost of doing so will be reasonable; assumptions that all necessary permits and governmental
approvals will be obtained and the timing of such approvals; assumptions made in the interpretation of drill results, the geology, grade and continuity of our mineral deposits; our expectations regarding demand for equipment,
skilled labor and services needed for exploration and development of mineral properties; and that our activities will not be adversely disrupted or impeded by development, operating or regulatory risks.
Cautionary Note Concerning Reserve & Resource Estimates
This report uses the terms “mineral resources”, “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources”. Mineral resources that are not mineral reserves do not have demonstrated economic
viability. You should not assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. Further, inferred mineral resources have a great amount of uncertainty as to their
existence and as to whether they can be mined legally or economically. On October 31, 2018, the SEC adopted new mining disclosure rules (“S-K 1300”) that are more closely aligned with current industry and global regulatory
practices and standards, including National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI-43-101”). NOVAGOLD has elected to comply with S-K 1300 for its fiscal year ended November 30, 2021.
While S-K 1300 is more closely aligned with NI 43-101 than the prior SEC mining disclosure rules, there are some differences. Notably, unlike NI 43-101, S-K 1300 requires that resources be disclosed exclusive of mineral reserves, and
that mineral resources and reserves be disclosed on the basis of our interest in them. NI 43-101 is a rule developed by the Canadian Securities Administrators, which established standards for all public disclosure an issuer makes of
scientific and technical information concerning mineral projects. All reserve and resource estimates contained in the tables about have been prepared in accordance with NI 43-101 and the CIM Definition Standards, as well as S-K
1300.
Technical Reports and Qualified Persons
The documents referenced below provide supporting technical information for the Donlin Gold project.
Project
Donlin Gold
Qualified Person(s)
Kirk Hanson, MBA, PE.
Michael Woloschuk, P.Eng.
Henry Kim, P.Geo.
Wood Canada Limited
Most Recent Disclosures
“NI 43-101 Technical Report on the Donlin Gold Project, Alaska, USA” prepared by Wood Canada Limited (“Wood”), effective June 1, 2021.
“S-K 1300 Technical Report Summary on the Donlin Gold Project, Alaska, USA” prepared by Wood Canada Limited (“Wood”), November 30, 2021.
M I N E R A L R E S E R V E S & M I N E R A L R E S O U R C E S
35
CORPORATE INFORMATION
MANAGEMENT TEAM
TRANSFER AGENT
GREGORY LANG . . . . . . . . . . . . . . . President & Chief Executive Officer
DAVID OTTEWELL . . . . . . . . . Vice President & Chief Financial Officer
MÉLANIE HENNESSEY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vice President,
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Corporate Communications
RON RIMELMAN . . . . . . . . . . . . Vice President, Environment, Health,
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Safety, & Sustainability
RICHARD WILLIAMS . . .Vice President, Engineering & Development
FOR INFORMATION ON SHARE TRANSFERS, LOST CERTIFICATES,
OR A CHANGE OF ADDRESS, CONTACT:
Computershare
1.800.564.6253 (toll-free in Canada and the U.S.)
1.514.982.7555 (international direct dial)
computershare.com
AUDITORS
PRICEWATERHOUSECOOPERS LLP
SHARE LISTINGS
TSX, NYSE AMERICAN: NG
ISSUED AND OUTSTANDING AT JANUARY 19, 2022, 332.9 MILLION
BOARD OF DIRECTORS
DR. THOMAS KAPLAN . . . . . Chairman, NOVAGOLD RESOURCES INC.;
. . . . . . . . . . . . . . . . . . . . . . . . . . . Chairman & CEO, The Electrum Group
ELAINE DORWARD-KING (2, 3) . . . . . . . . . . . . . . . . . . . . Corporate Director
SHARON DOWDALL (2, 4) . . . . . . . . . . . . . . . . . . . . . . . . Corporate Director
DIANE GARRETT (3, 4) . . . . . . . . . . . . . . . . . President, CEO, & Director of
. . . . . . . . . . . . . . . . . . . . . . . . . . . . Hycroft Mining Holding Corporation
GREGORY LANG (3, 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . President & CEO,
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .NOVAGOLD RESOURCES INC.
IGOR LEVENTAL (4, 5) . . . . . . . . . . . . . . . . President, The Electrum Group
KALIDAS MADHAVPEDDI (2, 3) . . . . . . . . . . . . . . . . . . . . Corporate Director
CLYNTON NAUMAN (1, 3) . . . . . . . . . . . . . .CEO, Alexco Resource Corp., &
CEO, Asset Liability Management Group ULC
ETHAN SCHUTT (1, 4, 5) . . . . . . . . . . . . . . . . . . . Executive Vice President &
. . . . . . . . . . . . . . . . General Counsel, Bristol Bay Native Corporation
ANTHONY WALSH (1, 2) . . . . . . . . . . . . . . . . . . . . . . . . . . Corporate Director
Independent Lead Director,
NOVAGOLD RESOURCES INC.
Members of:
1. Audit Committee
2. Compensation Committee
3. Environment, Health, Safety, Sustainability, and Technical Committee
4. Corporate Governance and Nominations Committee
5. Corporate Communications Committee
36
C O R P O R A T E I N F O R M A T I O N
2021 FINANCIAL REPORT
From NOVAGOLD’s Annual Report on Form 10-K for the fiscal year ended November 30, 2021
For full Annual Report on Form 10-K, please visit www.novagold.com, www.sec.gov, or www.sedar.com
Or call Investor Relations at 1.866.669.6227
ANNUAL MEETING OF SHAREHOLDERS
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