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NOVAGOLD
RESOURCES INC.
NG(NYSE MKT:
NG) today released its third quarter
financial results and updates for its flagship 50%-owned Donlin Gold project
(the "Project") in Alaska and its 50%-owned Galore Creek copper-gold-silver
project in British Columbia.
Details of the financial results for the three and nine months ended August
31, 2015 are presented in the consolidated financial statements and
quarterly report filed on Form 10-Q with the SEC and Canadian securities
regulators that is available on the Company's website at www.novagold.com,
on SEDAR at www.sedar.com, and on EDGAR at www.sec.gov. All amounts are in
U.S. dollars unless otherwise stated and all resource and reserve estimates
are shown on a 100% project basis.
In the third quarter of 2015, NOVAGOLD achieved the following:
-- The cooperating agencies completed the review of the Donlin Gold
preliminary draft EIS (PDEIS) in July
-- The Corps is on track to publish the Donlin Gold draft EIS for public
comment
-- Donlin Gold hired two additional senior permitting staff members who
have
taken lead roles on key permitting tasks as major permits also continue
to progress
-- Site visits were conducted at Galore Creek to continue to optimize
integrated mining, waste and water management concepts in the Galore
Valley
-- Outreach activities continued in Alaska and British Columbia
-- Donlin Gold delivered project updates, safety messages and
lifejackets in over 50 villages across the Yukon-Kuskokwim (Y-K)
region
-- Galore Creek sponsored and participated in the Tahltan Literacy
Camps, among other activities
-- Released third segment of a four-part Alaska video series, People's
Connection to the River, which describes the importance of the Kuskokwim
River as both a food source and "highway" connecting communities
President's Message
An incredible amount of work was completed in the third quarter by all of
the parties involved on the advancement of the Donlin Gold EIS. The Corps,
along with the cooperating agencies, is on track with the previously
released schedule and anticipates filing the draft EIS for public comment in
the coming months. The constructive exchange, commitment and insight
provided throughout this permitting process will further strengthen the
quality of the Donlin Gold EIS, which represents a very thorough and
thoughtful analysis of the project and its potential impacts. I was equally
pleased to hear that the draft EIS Executive Summary will be provided in
both English and Yup'ik, facilitating communication with stakeholders in the
Y-K region who wish to provide input during the public comment period. This
is the most comprehensive permitting process I have undertaken to date in my
career.
The activities this quarter at Donlin Gold consisted mainly of permitting
and outreach efforts. The EIS continued to advance with the cooperating
agencies and Donlin Gold submitting the PDEIS comments, as well as Donlin
Gold providing all remaining data analysis to the Corps. The agencies'
overall comments were constructive and helped strengthen the analysis of the
Donlin Gold project's potential impacts on the environment. Once the draft
EIS is published, the public comment period, which is anticipated to take
approximately five months, will follow. The Corps continues to work toward
the publication of the final Donlin Gold EIS in 2017. The Company believes
this timeline provides ample opportunity for stakeholders to comment on the
draft EIS, while respecting the cultural practices of the Y-K region.
Donlin Gold also progressed other major permit applications with the
agencies, such as working toward finalizing the air quality permit;
completing approaches to water management, treatment, and discharge to
facilitate issuance of the water discharge and use permits; obtaining
concurrence of the Calista Corporation and The Kuskokwim Corporation, the
Alaska Native landowners, on relocating existing trails that cross the
project site, advancing the rights-of-way and lease applications for the gas
pipeline; and finalizing plans for the Clean Water Act section 404
permitting process. Given the permitting deliverables that accompany a
project such as Donlin Gold, two additional permitting experts were added to
the team and have taken lead roles on key permitting tasks. Each has
extensive experience with the National Environmental Policy Act and mine
permitting in Alaska.
With a gold industry declining in size and quality, Donlin Gold presents an
outstanding asset with an endowment of 39 million ounces of gold resources
in the measured and indicated category, at an average grade of 2.2 grams per
tonne, and a planned output of approximately 1,100,000 ounces of gold per
year over its projected 27-year life. Beyond size, quality and longevity,
Donlin Gold's other key attributes that distinguish it are geo-political
stability, superb exploration potential, its location in a mining-friendly
jurisdiction, and incredible leverage to a higher price of gold. When
investor sentiment demands that a new mine be built, Donlin Gold will be the
development project of choice.
Galore Creek technical studies advanced during the third quarter. Field
visits were conducted to continue to optimize integrated mining, waste and
water management concepts, as well as provide a basis for a long-term site
management plan. Additionally, a request for expressions of interest was
issued for a study of the access tunnel into the Galore Valley. We are
satisfied to maintain our interest in Galore Creek at minimal spend and
until such time that market conditions become more favorable for valuable
polymetallic deposits such as this project.
Community investment and outreach is very important to us, especially in the
regions where our assets are located. It's about more than obtaining a
social license to operate; it's about making connections and communicating
transparently with all stakeholders. Throughout these busy summer months,
the project teams were out in force to maintain a high level of engagement
with surrounding communities. Donlin Gold visited with more than 50 villages
throughout the Y-K region year-to-date by giving project updates and
encouraging participation in and feedback at the upcoming draft EIS public
meetings, as well as delivering safety messages and donating lifejackets.
Furthermore, Donlin Gold sponsored and participated in 12 fairs, festivals
and camps in the region. A Donlin Gold site tour was also completed with the
local school district superintendent, local officials and Y-K Watershed
Council. Other initiatives in the third quarter included the partnership
between Donlin Gold, Calista and Yulista to donate school supplies as part
of the 2015 Yulista Backpack Campaign; and encouraging the younger
generation to further their education through various training programs and
scholarships. Galore Creek sponsored local fundraising events and
volunteered at the Tahltan Literacy Camps which took place in three villages
in northern British Columbia.
Having the foresight to raise capital almost four years ago, at a time when
the window of opportunity was limited, was exactly what NOVAGOLD needed
ahead of a significant market decline. Our cash and term deposits of
approximately $130 million are more than sufficient to take Donlin Gold
through the permitting process and could sustain NOVAGOLD if current market
conditions persist.
The support and contribution of our shareholders, native corporations, joint
venture partners and various government agencies is integral to the progress
achieved to date on the Donlin Gold and Galore Creek projects. We are also
privileged to have a dedicated Board of Directors providing valuable
guidance as NOVAGOLD advances two exceptional deposits to the next stage of
development.
Financial Results
in thousands of U.S. dollars, except for per share
amounts
Three Three Nine Nine
months months months months
ended ended ended ended
August August August August
31, 2015 31, 2014 31, 2015 31, 2014
$ $ $ $
--------------- -------- -------- --------- ---------
General and
administrative
expense (1) 4,062 5,037 15,714 17,379
Share of losses
- Donlin Gold 2,803 5,439 8,953 11,426
Share of losses
- Galore Creek (346) 270 65 1,520
Exploration and
evaluation 52 - 353 -
Depreciation 8 9 26 27
---------------- -------- -------- --------- ---------
Total operating
expenses 6,579 10,755 25,111 30,352
Loss from
operations (6,579) (10,755) (25,111) (30,352)
Other income
(expense) 288 (1,253) 341 (3,034)
Loss for the
period (6,301) (12,009) (24,784) (33,381)
Loss per share,
basic and
diluted (0.02) (0.04) (0.08) (0.11)
---------------- -------- -------- --------- ---------
At At
August November
31, 2015 30, 2014
$ $
--------------- -------- -------- --------- ---------
Cash and term
deposits 129,987 165,325
Total assets 442,454 524,546
Total
liabilities 103,173 119,430
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