- Significant permitting progress made with
Donlin Gold LLC (“Donlin Gold”) receiving final easements for the access road and fiber optic cable, as well as land leases, land use permits, and material site authorizations for proposed transportation facilities on State lands - Plans in place for 2020 to carry out a 22,000-meter, 80-hole drill program to test the extension of high-grade gold zones and validate geologic modeling concepts
- By completing fiscal year 2019 with
$148.5 million in cash and term deposits as well as additional receivables, NOVAGOLD enjoys the financial strength to advance the Donlin Gold project up the value chain
Details of the financial results for the year ended
In 2019, NOVAGOLD achieved the following milestones:
- With key Federal and State permits in hand, Donlin Gold secured additional State permits:
- The
Alaska Department of Natural Resources (ADNR) approved the Reclamation and Closure Plan (“Plan”). - The Waste Management permit was issued by the
Alaska Department of Environmental Conservation . - ADNR’s
Division of Mining , Land, and Water (DMLW) issued the final land leases, land use permits, and material site authorizations for the proposed transportation facilities on State lands and the final easements for the access road and fiber optic cable.
- The
- NOVAGOLD and Barrick advanced technical work on Donlin Gold with more drilling planned for 2020:
- In mid-2019, commenced a multi-year site investigation program to collect additional geotechnical information to advance the engineering work on the tailings facility and other water retention and diversion structures from a feasibility level to a final construction package, as required for the project’s dam safety certification application to ADNR.
- A 22,000-meter, 80-hole drill program will be undertaken in 2020 to test the extension of high-grade gold zones, including some encountered in the 2017 drilling, and validate geologic modeling concepts.
- Donlin Gold, together with Calista Corporation (“Calista”) and
The Kuskokwim Corporation (“TKC”), itsNative Corporation partners who respectively own the subsurface and surface rights for the Donlin Gold project, carried out a wide-ranging program of community engagement, including training, education, health, safety and environmental management initiatives during 2019:- Community Backhaul projects, funded by NOVAGOLD, brought together over 20 regional organizations to remove nearly 100,000 pounds of hazardous and electronic waste from 14 remote villages in the Yukon-Kuskokwim (Y-K) region and Bethel.
- Broad outreach activities and engagement with key local groups during the
Alaska Federation of Natives Convention last fall. - Co-sponsored spill response training with TKC and 25 participants from the region.
- Hosted a career & college fair with the
Lower Kuskokwim School District that was attended by hundreds of students, parents and teachers from the Y-K region.
President’s Message
Advancing permits, enhancing value and realizing a vision
Luck and a laser-like adherence to excellence represent powerful forces. We definitely know how lucky we are. Donlin Gold is a rare, high-grade open-pit gold development project located in a mining friendly jurisdiction –
Our track record of achievement was further enhanced earlier this month when Donlin Gold received final easements for the access road and fiber optic cable, as well as the receipt of the final land leases, land use permits, and material site authorizations for the proposed transportation facilities on State lands, including the airstrip and upriver Jungjuk Port. In addition, ADNR’s
In mid-2019, Donlin Gold commenced a multi-year site investigation program required to collect additional geotechnical information to advance the engineering work on the tailings facility and other water retention and diversion structures from a feasibility level study to a final construction package, as required for the project’s dam safety certificate application to ADNR. The safety of the tailings facility constitutes one of Donlin Gold’s most important priorities as they continue to provide the requisite human and financial resources to ensure that the work is done to the highest standard and according to the best design practices.
A project so significant, so timely and so rare that a comparable asset is near-impossible to find
The unique nature of NOVAGOLD is starting to come into focus for investors. Several specific advances help explain the prominent position enjoyed by NOVAGOLD today: the major milestones of receiving key Federal and State permits, selling
Donlin Gold merits attention. With approximately 39,000,000 ounces of gold in measured and indicated mineral resources grading 2.24 grams per tonne,1 the project already boasts a size that is exceptional, a grade twice the industry average2, excellent exploration upside potential, extraordinary leverage to a higher gold price, a location in a friendly jurisdiction, and strong local partnerships. These constitute a rare and unique combination of attributes. Being a gold endowment presently contained within only three kilometers of an eight-kilometer mineralized belt, and with only a small portion of the mining claims area having been explored, Donlin Gold ultimately could well command district-sized potential. After working in or visiting many of the world’s greatest mining districts, I know firsthand what exciting geological upside looks like. Donlin Gold embodies that promise. To such good fortune, one must add that there are now few mining jurisdictions left that are peaceful and democratic, and that will honor and enforce contracts and permits with a strict adherence to the rule of law.
That was in late 2011. Since that time, NOVAGOLD has done everything it set out to do – from restructuring the Company to the permitting of Donlin Gold. Yet despite all of the great news from the past, the brightest part of Donlin Gold’s already significant history undoubtedly will stem from what happens next. Our partnership with Barrick, for example, provides us with additional depth of technical and environmental expertise, as well as community engagement practices; skills that are particularly critical in the context of 21st century requirements of earning and maintaining a well-founded social license. Add to this sense of optimism and momentum a management team with decades of successful operational experience at some of the largest gold producers in the world, and it becomes rather clear why we are all so excited to get to the office every morning.
The sheer rarity of a project like Donlin Gold is of course well understood by our major shareholders, who are united in their belief that our equity provides perhaps one the best vehicle available to take full advantage of the next big move in gold’s secular bull market. In 2019, NOVAGOLD’s investors were given a glimpse of what a move in the gold price could represent to shareholders. But advancement of Donlin Gold is taking place at an extraordinary time in the gold cycle, as the renewal of interest in gold is happening against the backdrop of declining new discoveries, challenging geo-politics of mine supplies, the continuing erosion of grades of existing deposits, and increasing global uncertainty and volatility. Such an environment is particularly conducive to a substantial re-rating of value for an asset with both the rare combination of virtues and the leverage characteristics of Donlin Gold. The Company’s inclusion on the Russell 2000 index in
Dedicated to strong stakeholder engagement
In addition to fidelity to our shareholders, NOVAGOLD and our project partners are committed to growing strong and collaborative working relationships to preserve traditional lifestyles and support economic development for the benefit of Calista and TKC shareholders and the Y-K region as a whole. In 2019, Donlin Gold and our
The health and safety of our employees and our communities are also paramount. In 2019, the Y-K Community Backhaul projects funded by NOVAGOLD removed nearly 100,000 pounds of hazardous and electronic waste from 14 villages and Bethel on the
Donlin Gold supports projects such as the Lower Kuskokwim School District Career & College Fair in Bethel, a hub for the region, and other career fairs throughout the Y-K region to help develop the leaders of tomorrow. Alongside Calista and TKC, Donlin Gold proudly engages with the EXCEL
Balance sheet
We take dilution seriously. Fortunately, NOVAGOLD’s strong balance sheet affords a rare opportunity in our space to satisfy foreseeable project expenses without seeking additional equity from the market. With approximately
Advancing the vision in 2020
Looking ahead to 2020, Donlin Gold will embark on the project’s largest drill program in twelve years, with 80-holes totaling 22,000‑meters planned in the ACMA and Lewis deposit areas. The program’s objective is to continue to gather additional data that should increase our understanding of the geologic model and high-grade mineralization controls that have the potential to benefit the project when the owners decide to update the Donlin Gold feasibility study and initiate the engineering work necessary to advance the project design from feasibility level to basic, then detailed engineering.
In conclusion, I wish to thank the experienced team of professionals at NOVAGOLD, Donlin Gold, and Barrick for their passion and commitment to the project. Their steadfast determination, coupled with the deep and decades-long support and engagement of Calista and TKC, are critical ingredients required for the successful achievement of our collective vision. I also would like to express my sincere appreciation to my dedicated colleagues on the NOVAGOLD Board for their support, constant engagement, and commitment to continual improvement and best governance practices. It is a pleasure to serve alongside you all. My gratitude also goes to the various State agencies for their diligent and professional work and adherence to well-established regulatory procedures.
Finally, to our shareholders, I thank each and every one of you for your unwavering support, engagement, patience, and encouragement. NOVAGOLD will not only do its utmost to deliver on its strategy and promises but will continue to realize Donlin Gold’s unparalleled investment opportunity in a manner that you can truly be proud of.
President & CEO
Financial Results
in thousands of
Year ended $ | Year ended $ | |
General and administrative expense (1) | 16,321 | 18,493 |
Share of losses – Donlin Gold | 10,491 | 8,798 |
Total operating expenses | 26,812 | 27,291 |
Loss from operations | (26,812) | (27,291) |
Accretion of notes receivable | 3,220 | 1,061 |
Interest expense on promissory notes | (7,286) | (6,461) |
Other income, net | 4,395 | 1,751 |
Income tax expense | (1,278) | (526) |
Loss from continuing operations for the period | (27,761) | (31,446) |
Loss from discontinued operations for the period | – | (81,299) |
Net loss | (27,761) | (112,765) |
Loss per share, basic and diluted | | |
Continuing operations | (0.09) | (0.10) |
Discontinued operations | – | (0.25) |
(0.09) | (0.35) |
| At $ | At $ |
Cash and term deposits | 148,549 | 167,004 |
Total assets | 245,835 | 260,929 |
Total liabilities | 107,881 | 100,241 |
(1) Includes share-based compensation expense of
For the year ended
General and administrative costs decreased by
Net loss from continuing operations decreased from
Net loss from discontinued operations, net of tax of
Liquidity and Capital Resources
Total Donlin Gold funding of
Net cash used in operating activities decreased by
Net cash provided from discontinued operations of
NOVAGOLD had
2020 Outlook
We anticipate spending approximately
NOVAGOLD’s primary goals in 2020 are to continue to advance the Donlin Gold project toward a construction/production decision; maintain a healthy balance sheet; and maintain an effective corporate social responsibility program.
Conference Call & Webcast Details
NOVAGOLD’s conference call and webcast to discuss these results will take place
Webcast: | www.novagold.com/investors/events/ |
North American callers: | 1-800-319-4610 |
International callers: | 1-604-638-5340 |
About NOVAGOLD
NOVAGOLD is a well-financed precious metals company focused on the development of its 50%-owned Donlin Gold project in
Scientific and Technical Information
Some scientific and technical information contained herein with respect to the Donlin Gold project is derived from the “Donlin Creek Gold Project Alaska, USA NI 43-101 Technical Report on Second Updated Feasibility Study” prepared by AMEC with an effective date of
Clifford Krall, P.E., who is the Mine Engineering Manager for NOVAGOLD and a “qualified person” under NI 43-101, has approved and verified the scientific and technical information related to the Donlin Gold project contained in this press release.
NOVAGOLD Contacts:
Vice President, Corporate Communications
Manager, Investor Relations
604-669-6227 or 1-866-669-6227
Cautionary Note Regarding Forward-Looking Statements
This press release includes certain “forward-looking information” and “forward-looking statements” (collectively “forward-looking statements”) within the meaning of applicable securities legislation, including the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are frequently, but not always, identified by words such as “expects”, “anticipates”, “believes”, “intends”, “estimates”, “potential”, “possible”, and similar expressions, or statements that events, conditions, or results “will”, “may”, “could”, “would” or “should” occur or be achieved. Forward-looking statements are necessarily based on several opinions, estimates and assumptions that management of NOVAGOLD considered appropriate and reasonable as of the date such statements are made, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, included herein are forward-looking statements. These forward-looking statements include statements regarding the 2020 Outlook; the potential development and construction of Donlin Gold; perceived merit of properties; the advancement of optimization studies at Donlin Gold; potential opportunities to enhance or maximize the value of Donlin Gold; sufficiency of funds for the Company to advance Donlin Gold without additional financing; the timing and likelihood of permits; opportunities to reduce capital outlays and improve project economics; mine life and production estimates at Donlin Gold; the exploration potential of Donlin Gold; mineral reserve and resource estimates; work programs; capital expenditures; timelines; strategic plans; benefits of the Donlin Gold project and market prices for precious metals; whether the final
Important factors that could cause actual results to differ materially from expectations include the need to obtain additional permits and governmental approvals; the timing and likelihood of permits; the need for additional financing to explore and develop properties and availability of financing in the debt and capital markets; uncertainties involved in the interpretation of drilling results and geological tests and the estimation of reserves and resources; the need for continued cooperation between NOVAGOLD and Barrick Gold Corp. for the continued exploration, and development and eventual construction of the Donlin Gold property; the need for cooperation of government agencies and native groups in the development and operation of properties; risks of construction and mining projects such as accidents, equipment breakdowns, bad weather, non-compliance with environmental and permit requirements, unanticipated variation in geological structures, ore grades or recovery rates; unexpected cost increases, which could include significant increases in estimated capital and operating costs; fluctuations in metal prices and currency exchange rates; whether a positive construction decision will be made regarding Donlin Gold or
Cautionary Note to
This press release has been prepared in accordance with the requirements of the securities laws in effect in
On
1 Donlin Gold data as per the Second Updated Feasibility Study (as defined herein). Donlin Gold measured resources of approximately 8 Mt grading 2.52 g/t and indicated resources of approximately
2 2018 average gold grade of open-pit and underground deposits with gold as primary commodity and over 1 Moz in measured and indicated resources is 1.10 g/t, sourced from
3 Donlin Gold data as per the Second Updated Feasibility Study (as defined herein). Donlin Gold measured resources of approximately 8 Mt grading 2.52 g/t and indicated resources of approximately
Source:
2020 GlobeNewswire, Inc., source