Multiple High-Grade Intercepts Recorded at Donlin Gold’s Successful 2021 Drilling Program
Additional State Permits Received
Strong Cash Position Maintained
- The Donlin Gold project (“Donlin Gold” or the “project”) safely and successfully completed a comprehensive 79-hole, 24,264-meter drill program in 2021 that produced multiple significant gold intercepts. The results to date have served to support the existing global resource estimate, and the recent modelling concepts and strategic mine planning work. To date, Donlin Gold has reported assays from approximately 15,700 meters or 65 percent of the length drilled with the balance expected in the coming months.
- Donlin Gold continues to enforce strict COVID-19 protocols with established contingency plans in place to keep employees, their families, and members of the community safe and healthy.
- In
November 2021 , theAlaska Department of Fish and Game (ADF&G) issued two Special Area Permits required for pipeline facilities. InDecember 2021 , theAlaska Department of Environmental Conservation (ADEC) approved a third extension of the air quality permit. - In
July 2021 , NOVAGOLD’s treasury increased following the receipt of$75 million from Newmont Corporation (“Newmont”) in connection with the sale of NOVAGOLD’s 50 percent interest in theGalore Creek project. The Company had$169.1 million in cash and term deposits as ofNovember 30, 2021 , with another$25 million due inJuly 2023 from Newmont.
Details of the financial results for the year ended
In 2021, NOVAGOLD achieved the following milestones:
- NOVAGOLD and Barrick successfully completed the 2021 drilling at Donlin Gold:
- 79 core holes, upsized from the original work plan, were drilled in the ACMA and Lewis pit areas. The total drill program encompassed 24,264 meters.
- With extensive communication and the application of health and safety protocols, COVID-19 cases at site were minimal and there were no Lost-Time Incidents.
- To date, Donlin Gold has reported assays for 36 complete and 22 partial holes from the 2021 drill program, encompassing approximately 65 percent or 15,700 meters of length drilled. Assays continue to support the global resource estimate, recent modelling concepts, and strategic mine planning work.
- Donlin Gold strives to aid local communities with support and resources, particularly when health and safety are of concern, along with other areas, such as environmental management, training and education, as well as cultural initiatives in the Yukon-Kuskokwim (Y-K) region. Specifically, Donlin Gold worked with its Alaska Native partners,
Calista Corporation (“Calista”) andThe Kuskokwim Corporation (TKC), as well as other key representatives of Y-K communities to:- Sponsor the Calricaraq team from the
Yukon-Kuskokwim Health Corporation to travel to area villages to support residents and families who have lost loved ones to suicide – a heightened challenge in remote villages, especially during the COVID-19 pandemic. - Partner with KSKO Radio to purchase hand-held radios for five middle Kuskokwim villages. This initiative expands the reach of public radio to communities where internet connectivity is lacking.
- Enter into a sponsorship agreement with the
Alaska School Activities Association to underwrite statewide sports.
- Sponsor the Calricaraq team from the
- With key Federal and State permits in hand, Donlin Gold advanced additional State permits:
- In
November 2021 , the ADF&G issued two Special Area Permits required for pipeline facilities located within the Susitna Flats State Game Refuge. - In
December 2021 , the ADEC approved a third extension of the air quality permit toJune 30, 2023 .
- In
President’s Message
Donlin Gold:
As we start a new year, we can reflect on 2021 as a year of important achievements for the Donlin Gold project. Despite the formidable challenges caused by a global pandemic that continues to affect our daily lives, we reached and exceeded several milestones as we advanced Donlin Gold up the value chain. Our drill campaign was successful not only because of the strong drill results, but also because we managed to conduct our business with the utmost attention to the health and safety of our employees, their families, our contractors, and visitors as well as members of the communities in which we operate. Donlin Gold delivered many tremendous benefits to many people.
To further solidify our understanding of the structural controls on mineralization, a decision was made to expand the parameters of the 2021 program mid-year. The ability to complete this expanded program within the 2021 drill season was facilitated by our efficient and effective onsite team.
The original 2021 drill program plan was expanded by 13 drill holes to gather more closely spaced data to assess the dominant controls and orientations of gold mineralization. This infill program has been instrumental in supporting our updated ore domaining approach and will be expanded in 2022. Overall, the 2021 drill program was designed to complete the work necessary to validate and increase confidence in recent geologic modelling concepts to support future feasibility work. The drill program included confirmation and extension drilling that focused on further testing of orebody continuity and structural controls, as well as data collection for geotechnical and geometallurgical purposes. A total of 79 drill holes totaling approximately 24,264 meters were completed in both the ACMA and Lewis deposit areas.
The assay results released to date have returned significant high-grade intercepts. They continue to support the global resource estimate, recent modelling concepts and strategic mine planning work. Recent top intervals include 57.25 m grading 6.87 g/t gold starting at 270.35 m drilled depth, including a sub-interval of 4.05 m grading 18.13 g/t, starting at 288.95 m drilled depth (DC21-1976); and 19.15 m grading 12.57 g/t gold starting at 173.19 m drilled depth, including a sub-interval of 12.15 m grading 17.28 g/t, starting at 179.19 m drilled depth (DC21-1970), as per the
Largest Planned Budget in 2022 for Donlin Gold in Over a Decade
In
In 2022, the proposed overall budget for the
Maintaining Stringent Health & Safety Protocols
NOVAGOLD is strongly committed to the health, safety, and well-being of its employees and their families as well as contractors, visitors, and members of the multiple communities where we operate. Since the start of the pandemic, we have implemented strict and rigorous health and safety protocols designed to mitigate the spread of COVID-19 cases within our entire organization.
During our 2021 drill season, out of approximately 171,310 hours worked, we recorded four cases of COVID-19 at the Donlin Gold project site. The affected individuals fully recovered and ultimately returned to work. Our procedures were especially important at the time when COVID-19 cases began to rise in
Critical to
The Alaska Native Claims Settlement Act (ANCSA) of 1971 constituted a new approach in
The 50th anniversary of ANCSA recognizes the profound difference, over the past half century, that ANCSA has made in creating the first socially responsible, for-profit corporations tasked with promoting social, cultural, and economic advancement of Alaska Native shareholders, their descendants and communities, and all of
In
“The early Y-K region leaders who founded Calista chose the
As representatives of key stakeholders in the State, the support of the
NOVAGOLD and Barrick are committed to preserving the traditional lifestyles of, and providing support to, the Y-K communities, as well as the sustainable and responsible development of the Donlin Gold project for the benefit of all stakeholders.
Technical Execution and Permitting with a Focus on Getting the Details Right
As reported in the third quarter, the Company retained
In late 2021, the Donlin Gold project was successful in securing a third extension of the air quality permit issued by the
Consistent Engagement with Stakeholders
We are truly fortunate to have long-term Alaska Native partners in the Y-K region. The Donlin Gold project is unlike most other mining assets in
Donlin Gold sponsored the Calricaraq (“to practice good health”) team from the
In April, Donlin Gold was the primary sponsor for the Lower Kuskokwim School District’s annual College and Career fair – a virtual event which more than 42 vendors and 100 students attended. In the fall, Donlin Gold entered into a sponsorship agreement with
In
Donlin Gold partnered with KSKO Radio to purchase hand-held radios for five middle Kuskokwim villages. This initiative expands the reach of public radio to communities where internet connectivity is lacking. Every home will now have an information source for important updates from the Y-K region, including local news and weather updates.
Donlin Gold is a sponsor of the RurAL CAP Elder Mentor Program that connects youth with Elders in
Donlin Gold’s environment, health and safety commitment is embodied in its support of the 2021 Clean-up Green-up program that ran throughout the summer and reached a record 50-plus Tribes and municipalities who participated in the event. Donlin Gold held the fourth and most successful “In It For The Long Haul” backhaul project last summer that removed approximately 180,000 pounds of hazardous and electronic waste from 26 villages throughout the Y-K region. Over the last five years, along with community and Tribal partners, nearly 400,000 pounds of waste were collected and removed that would otherwise end up in landfills, in waterways, or in other areas that could be harmful to local communities.
While many initiatives are rightfully focused on the Donlin Gold project and the greater Y-K region and
In
Leverage in a Place where You Can Keep the Rewards
The NOVAGOLD story is refreshingly straightforward with an established senior partner in Barrick, advancing what we view as one of the industry’s best development opportunities, Donlin Gold, in a great jurisdiction,
With approximately 39,000,000 ounces of gold in measured and indicated mineral resources grading 2.24 grams per tonne4 (twice the industry average for an open-pit project5), Donlin Gold is a unique pure gold play. Already considered one of the industry’s top open-pit high-grade deposits with a mine life measured in decades – and positioning itself to be one of the world's largest new gold mines – among Donlin Gold’s key differentiators is its safe location on private land owned by Alaska Native Corporations in
Donlin Gold is also blessed with enormous exploration upside potential. Its current mineral reserves and mineral resources are contained within only three kilometers of an eight-kilometer mineralized belt – itself representing a mere five percent of the property package. In an environment characterized by few new discoveries greater than five million ounces, decreasing average gold grades, and few late-stage projects of scale, particularly in safe geo-political jurisdictions, we believe that Donlin Gold is truly “best in breed”.
That is why, with its 50 percent ownership in Donlin Gold, NOVAGOLD stands out as a cornerstone investment for some of the most knowledgeable investors in the sector. We are grateful to have a group of long-term shareholders who understand the rare pure gold play opportunity that NOVAGOLD represents, including
Prudent Fiscal Management
For the past decade, NOVAGOLD has been disciplined about its committed stewardship of fiduciary responsibilities toward shareholders. The Company has been well-financed and hasn’t needed to fundraise in the markets since it last raised equity in
In
A patient, methodical, and value-building approach – together with strength in partnerships – have been a hallmark of NOVAGOLD and its management, a group that has been working together as a cohesive team for the past decade. Looking back on the major achievements and milestones of 2021, I wish to thank the experienced team of professionals at NOVAGOLD, Barrick, and Donlin Gold – as well as the drilling contractor teams and other support service contractors – for their steadfast commitment to safety at the Donlin Gold project while faced with the continued and ever-shifting challenge that COVID-19 presents to us all. At the local, regional, and national level, the close and mutual support from our
I appreciate the dedication of my colleagues on the NOVAGOLD Board for their enthusiastic support, energized engagement, steadfast commitment to best governance practices, and the desire to constantly improve and refine our approaches with the goal of improving outcomes. It is a pleasure to serve alongside you. My gratitude also goes to the various State agencies for their diligent and professional work and adherence to well-established regulatory procedures.
Despite travel restrictions and the inability to meet face-to-face for most of the year, NOVAGOLD not only retained its largest shareholders, but many increased their shareholdings in the last quarter. We are humbled by the trust you have placed in us and grateful for your encouragement and willingness to engage as the teams work together to enhance the value of the Donlin Gold project.
While 2021 was an exceptional year and represents yet another positive turning point for NOVAGOLD and for the Donlin Gold project, 2022 offers even greater milestones with the largest project budget in more than a decade and a path forward as the owners approach the launch of an updated feasibility study. We will continue our efforts to deliver on the strategy to increase shareholder wealth in a safe and socially responsible manner. I wish you good health and safety.
Sincerely,
President & CEO
Financial Results | ||||
in thousands of | ||||
Year ended $ | Year ended $ | |||
General and administrative expense (1) | 20,210 | 18,735 | ||
Share of losses – Donlin Gold | 16,625 | 14,502 | ||
Total operating expenses | 36,835 | 33,237 | ||
Loss from operations | (36,835) | (33,237) | ||
Interest expense on promissory note | (5,922) | (6,014) | ||
Accretion of notes receivable | 2,556 | 3,337 | ||
Other income, net | (198) | 1,569 | ||
Income tax recovery (expense) | (137) | 781 | ||
Net loss | (40,536) | (33,564) | ||
Loss per share, basic and diluted | (0.12) | (0.10) |
At $ | At $ | |||
Cash and term deposits | 169,124 | 121,906 | ||
Total assets | 198,852 | 224,441 | ||
Total liabilities | 120,570 | 113,714 |
(1) Includes share-based compensation expense of
During the fourth quarter of 2021, we incurred a net loss of
Net loss increased from
Liquidity and Capital Resources
Donlin Gold funding increased by
In 2021, the net increase in cash and cash equivalents of
Net spending on operating activities marginally decreased in 2021 from 2020 primarily due to the timing of corporate liability insurance payments; and COVID-19 resulting in reduced corporate travel, offset by higher salaries and benefits; and lower interest received on cash and term deposits due to lower interest rates.
NOVAGOLD’s current cash position as of
2022 Outlook
We anticipate spending approximately
$17 million for the 2022 drill program (approximately 34,000 meters of core drilling)- Grid drilling (mineralization continuity and geologic structural controls in three areas of the deposit)
- In-pit and below-pit exploration
- Platform mapping to confirm mineralization continuity and key geological controls in representative areas of the deposit
$9 million for external affairs, permitting, environmental, land and legal activities, and$4 million for project planning and fieldwork (dam and water structures, metallurgical testing, mining studies, hydrogeology and geochemistry, and infrastructure planning).
NOVAGOLD’s primary goals in 2022 are to continue to advance the Donlin Gold project toward a construction decision; maintain or increase support for Donlin Gold among the project’s stakeholders; promote a strong safety, sustainability, and environmental culture; maintain a favorable reputation of NOVAGOLD, its governance practices and its project among shareholders; and manage the Company treasury effectively and efficiently, including streamlining the corporate structure. Our operations primarily relate to the delivery of project milestones, including the achievement of various technical, environmental, sustainable development, economic and legal objectives, obtaining necessary permits, completion of feasibility studies, preparation of engineering designs and the financing to fund these objectives.
Conference Call & Webcast Details
NOVAGOLD’s conference call and webcast to discuss these results will take place
Webcast: https://services.choruscall.ca/links/novagold20220127.html | ||
North American callers: | 1-800-319-4610 | |
International callers: | 1-604-638-5340 |
NOVAGOLD’s quarterly reporting schedule for the remainder of 2022 will be as follows:
- Q1 2022 –
Tuesday, April 5, 2022 ; financial statements and a Donlin Gold project update will be released after market close. A conference call and webcast will be held onWednesday, April 6, 2022 at11 a.m. ET . - Annual Meeting of Shareholders –
Wednesday, May 18, 2022 ; the meeting will be held at1 p.m. PT . - Q2 2022 –
Tuesday, June 28, 2022 ; financial statements and a Donlin Gold project update will be released after market close. A conference call and webcast will be held onWednesday, June 29, 2022 at11 a.m. ET . - Q3 2022 –
Tuesday, October 4, 2022 ; financial statements and a Donlin Gold project update will be released after market close. A conference call and webcast will be held onWednesday, October 5, 2022 at11 a.m. ET .
About NOVAGOLD
NOVAGOLD is a well-financed precious metals company focused on the development of its 50%-owned Donlin Gold project in
According to the 2021 Technical Report and the S-K 1300 Report, once in production, Donlin Gold is expected to produce an average of more than one million ounces per year over a 27-year mine life on a 100% basis. The Donlin Gold project has substantial exploration potential beyond the designed footprint which currently covers three kilometers of an approximately eight-kilometer-long gold-bearing trend. Current activities at Donlin Gold are focused on State permitting, optimization work, community outreach, and workforce development in preparation for the eventual construction and operation of this project. With a strong balance sheet, NOVAGOLD is well-positioned to fund its share of permitting and optimization advancement efforts at the Donlin Gold project.
Scientific and Technical Information
Certain scientific and technical information contained herein with respect to the Donlin Gold project is derived from the 2021 Technical Report and the S-K 1300 Report.
Paul Chilson, P.E., who is the Manager,
NOVAGOLD Contacts:
Vice President, Corporate Communications
Manager, Investor Relations
604-669-6227 or 1-866-669-6227
Cautionary Note Regarding Forward-Looking Statements
This media release includes certain “forward-looking information” and “forward-looking statements” (collectively “forward-looking statements”) within the meaning of applicable securities legislation, including the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are frequently, but not always, identified by words such as “expects”, “anticipates”, “believes”, “intends”, “estimates”, “potential”, “possible”, and similar expressions, or statements that events, conditions, or results “will”, “may”, “could”, “would” or “should” occur or be achieved. Forward-looking statements are necessarily based on several opinions, estimates and assumptions that management of NOVAGOLD considered appropriate and reasonable as of the date such statements are made, are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, activity, performance, or achievements to be materially different from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, included herein are forward-looking statements. These forward-looking statements include statements regarding the anticipated results for the 2021 and 2022 drill programs; the anticipated timing of certain judicial and/or administrative decisions; the 2022 Outlook; the timing and potential for an updated feasibility on the project; our goals for the remainder of 2022; anticipated benefits from the 2017, 2020, 2021, and 2022 drill programs including an improved geological model for Donlin Gold; ongoing support provided to key stakeholders including
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 obtaining and maintaining permits necessary to construct and operate; the need for additional financing to explore and develop properties and availability of financing in the debt and capital markets; the outbreak of the coronavirus global pandemic (COVID-19); uncertainties involved in the interpretation of drill results and geological tests and the estimation of reserves and resources; changes in mineral production performance, exploitation and exploration successes; changes in national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices, expropriation or nationalization of property and political or economic developments in
1 NOVAGOLD defines a Tier One gold development project as one with a projected production life of at least 10 years, annual projected production of at least 500,000 ounces of gold, and average projected cash costs over the production life that are in the lower half of the industry cost curve.
2 Drill intercepts originally disclosed in the
3 ANCSA Regional Association Resolution 21-01 “Support for Donlin Gold Mine Project” dated
4 Donlin Gold data as per the 2021 Technical Report (as defined herein). Donlin Gold measured resources of approximately 8 Mt grading 2.52 g/t and indicated resources of approximately
5 2020 average grade of open pit and underground deposits with gold as primary commodity and over 1 Moz in measured and indicated resources is 1.12 g/t, sourced from
6 NOVAGOLD considers Tier One jurisdictions to be any in the top 10 rank by the Investment Attractiveness Index in the Fraser Institute Annual Survey of Mining Companies, 2020. Alaska is ranked number 5.
7 Donlin Gold data as per the 2021 Technical Report and the S-K 1300 Report, as defined herein. Donlin Gold measured resources of approximately 8 Mt grading 2.52 g/t and indicated resources of approximately
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