NovaGold Resources Inc.: Exhibit 99.1 - Filed by newsfilecorp.com
 |
News Release
|
TSX, NYSE-AMEX Symbol: NG
|
NovaGold Year-End Financial Results
February 22, 2012 - Vancouver, British Columbia -
NovaGold Resources Inc. (TSX, NYSE-AMEX: NG) (“NovaGold” or “the
Company”) today announced the results of its fiscal year ended November 30, 2011
along with an update on the Company’s project-development activities. Details of
the Company’s financial results are described in the consolidated financial
statements and Management’s Discussion and Analysis (“MDA”) which, together with
further details on each of the Company’s projects, including resource estimates,
will be available on the Company’s website at www.novagold.net, on SEDAR and www.sedar.com and on EDGAR at www.sec.gov. All amounts are in Canadian dollars unless
otherwise stated.
NovaGold will host a
conference call and webcast
Thursday, February 23 at 8.30 am PST (11.30 am
EST)
Webcast: www.meetview.com/novagold or
www.novagold.net
North
American callers: 1-866-212-4491
International callers: 1-416-800-1066
President’s message
The fourth quarter represented, on multiple levels, a true
turning point for our company. On November 16, 2011, NovaGold announced major
changes to its leadership and corporate structure. I, Greg Lang, accepted the
position of President and Chief Executive Officer of NovaGold effective January
2012. Having come to the Company directly from my position as the President of
Barrick Gold North America, I had the privilege of being responsible for Barrick
Gold’s nine operations in the United States, Canada and the Dominican Republic.
My responsibilities included representing Barrick's interest in the Donlin Gold
project, which is equally owned by wholly-owned subsidiaries of NovaGold and
Barrick. As such, I was intimately familiar with all aspects of the Donlin
project and what I believe to be its uniquely attractive attributes. The
prospect of being able to lead NovaGold into the ranks of North America's most
important gold producers represented an extremely compelling opportunity for me
personally, in as much as the Donlin project represents an extremely compelling
opportunity for all of our shareholders to gain a direct exposure to, and
leverage from, what is in my opinion the most important and exciting gold
development project in the world today.
Having decided to focus NovaGold as a pure play on its flagship Donlin Gold project, the Board announced two further decisions on November 16, 2011 which underlined a clear vision for unlocking the value of the Company's significant copper-dominant assets. The first announcement was that NovaGold was embarking upon a process to sell all or part of its 50% share of the Galore Creek project, which it is developing with its partner, Teck Resources. The second decision was to create a newly formed subsidiary, NovaCopper, whose shares would be distributed 100% to the shareholders of NovaGold by way of a Plan of Arrangement. To lead this new company, NovaGold's founder, Rick Van Nieuwenhuyse, has stepped down from his previous position as President and CEO of NovaGold in order to assume the new position of President and CEO of NovaCopper Inc.
I believe both of NovaGold's copper-dominant assets are
exceptional. If put in production, as envisioned in the Pre-Feasibility Study
results released on July 27, 2011, Galore would be the largest copper mine in
the tier-one jurisdiction of Canada, as well as one of the lowest cost from an
operating cost perspective. At the same time, the Ambler district in
Northwestern Alaska which is held by NovaCopper hosts one of the richest
known volcanogenic massive sulfide (“VMS”) copper-zinc-lead-gold-silver deposits
in the world and is home to a series of additional deposits which comprise one
of the most exciting group of copper exploration targets located anywhere, an
attribute only accentuated by its North American address. These positive factors
are further enhanced by our having first-rate local partners. On October 20,
2011, NovaGold signed a cooperative, long-term agreement with NANA Regional
Corporation, Inc. (“NANA”), the owners of the Red Dog mine, on the development
of our respective resources interests in the Ambler mining district. The
agreement ratified the cooperation that will be so valuable in furthering the
successful development of the district's mineral deposits. With Rick Van
Nieuwenhuyse, a proven, award-winning exploration geologist at the helm of
NovaCopper, the prospects look very promising for Ambler. Indeed, on November
10, 2011, new drill results were produced from the Bornite deposit which showed
multiple significant intersections including perhaps one of the best copper
drill holes in the industry: a mineralized interval of 178 meters grading 4.0%
copper, including a high-grade intersection of 34.7 meters of 12.0%
copper1. These outstanding results reaffirm our belief that Ambler is
one of the most significant copper districts in the world and that NovaCopper's
(and hence NovaGold's) shareholders can look forward to much additional news
flow in the months and years to come.
NovaGold Resources Inc.
- 1 -
I would like to thank Rick Van Nieuwenhuyse for his significant
contributions to NovaGold over the past 13 years. His identification of the true
potential of Donlin was a remarkable achievement and, on a personal level, as a
new Board member of NovaCopper as well as NovaGold, I look forward to seeing the
same exploration success replicated at Ambler and wish him and all of us the
best of good fortune with this truly exciting new copper investment.
Regarding Galore Creek itself, NovaGold and our bankers at
Royal Bank of Canada and J.P. Morgan have begun the process of engaging with
potential suitors for our portion of the project. We anticipate that this
process will occur through the 2012 calendar year and that, when completed, the
proceeds of any sale will be added to NovaGold's treasury.
These proceeds will top up an already robust balance sheet.
With the recent US$332 million capital raising, NovaGold is now fully funded
through the permitting phase and indeed to a construction decision on Donlin
Gold. This is a strategic advantage that substantially enhances our view of
shareholder value. Having de-risked the Donlin asset through the successful
conclusion of a comprehensive Feasibility Study that drew on the in-depth
technical expertise of both Owners, our strong balance sheet complements a
premier asset base which, when combined with the safety of our North American
address, renders us one of the rare "go-to, institutional-quality" gold
developers. These are not merely aspirations. The success of our stock offering
in January, which was upsized due to substantial over-subscription by
institutional investors in the United States, Canada and Europe, only reinforced
our conviction that we are poised to provide significant value to our
shareholders.
At the Board level, it was announced that Thomas Kaplan joined
the Board of Directors of NovaGold and succeeded Gerry McConnell to become the
new Chairman of the Company. We thank Gerry for his gracious leadership and fine
service to the Company and look forward to his continued role with us through
his participation on the Boards of both NovaGold and NovaCopper. His successor,
Thomas Kaplan, is widely regarded as one of the natural resource industry’s most
successful entrepreneurs and is among the precious metals sector’s
most-prominent advocates. Dr. Kaplan's commitment to NovaGold and his expertise
in maximizing shareholder returns will surely provide a much larger stage in
terms of awareness for NovaGold and its investment attributes going forward. I
very much look forward to working closely with him as we advance NovaGold along the value chain
for the benefit of all shareholders.
______________________________
1 See NovaGold
news release of December 14, 2011 "NovaGold's Drilling in Ambler District
Continues to Yield High-Grade Intersections at Bornite Deposit."
NovaGold Resources Inc.
- 2 -
Subsequent to these announcements, on December 5, 2011,
NovaGold released the results of a positive conclusion to the Feasibility Study
update for Donlin Gold2. This study confirmed that if put into
production, Donlin Gold would be among the world’s most significant
low-operating-cost and long-lived gold mines. The mine would average 1.5 million
ounces of gold per year in its first five years of operations at an average cash
cost of US$409/oz, and on a life-of-mine basis it would average 1.1 million
ounces of gold per year at an average cash cost of US$585/oz. The proven and
probable mineral reserves are 33.8 million ounces of gold, which are encompassed
within a resource base (including measured and indicated resources) of almost 40
million ounces. This figure does not include additional inferred resources
within the vicinity of the pit.
These are extraordinary numbers, placing Donlin well within the
top 1% of global gold deposits in terms of size. Nonetheless, what is singular
in my professional experience is that this is not where the ore body will end
its life, but where it will start. We can see that there is excellent
exploration upside with the potential to expand the current open pit resources
along strike and at depth; moreover, there is additional upside beyond this, as
reflected by the fact that the current pit is only part of a three-kilometer
portion of a mineralized corridor that runs for at least eight kilometers.
Donlin's mine life, already measured in decades, is likely to be much greater
than now anticipated, if indeed the production rate is not one day expanded.
When one considers that this is at a consistent grade of 2.2 grams, very high
grade for a large-scale open pit operation, and that it will be a
plus-one-million-ounce annual producer, the merits of Donlin are self-evident.
The capital cost, estimated at US$6.7 billion, was meant to be eminently
defensible and open to optimizations, such as turning over key infrastructure
items to owner/operators. In this regard, it reflects a favorable decision to
build a natural gas pipeline, always held out to be an upside case for the
project, and a robust US$1.0 billion in contingencies. Looking at the capital on
a unit basis of approximately US$160 per ounce, Donlin compares favorably to
other major gold development projects globally.
Finally, it should be remembered as we embark upon permitting
that Alaska is a highly attractive jurisdiction if one has a well situated
project, which we do. Donlin is indeed in a remote part of the state, which
means we will be bringing vitally needed infrastructure to people who need it.
And there are no particular red flags environmentally. Not surprisingly,
therefore, Donlin has broad local support. Of major importance, Donlin is on
private land already designated for mining, where the native corporations are
stakeholders. These social factors are naturally a big plus for the project. In
sum, the study confirmed what we can now acknowledge to be the case: that in
terms of size, grade, production rates, and exploration potential, Donlin is in
a league of its own. If one superimposes on top of that the increasingly
"existential" element of jurisdictional safety because of its US address -- an
attribute that is so rare in this era of pronounced asset scarcity and resource
nationalism -- then it becomes clear why we are so bullish on our future.
These are indeed exciting times at NovaGold. The assets are
excellent and the management is enthusiastic. With the substantial de-risking of
our asset base over the past year, a healthy balance sheet, and a renewed focus
on a unique and pure gold flagship property at Donlin at a time when we and our
shareholders' share a strongly-held long term view of the both the gold market
as well as the market for scarce great gold assets, we believe that we are
exceptionally well-positioned to continue to build great value for all our
stakeholders.
______________________________
2 See Appendix at
end of this news release.
NovaGold Resources Inc.
- 3 -
Results of operations
|
in thousands of Canadian
dollars,
except for per share amounts |
|
Year ended
November 30,
2011
$ |
Year ended
November 30,
2010
$ |
| Asset impairment – power
transmission |
52,668 |
116,370 |
| Asset impairment – equipment |
8,343 |
- |
| Asset retirement obligation |
20,415 |
- |
| Equity loss |
21,352 |
20,873 |
| Foreign exchange loss (gain) |
1,111 |
(3,158) |
| Gain on disposal of mineral
properties |
- |
(1,440) |
| General and administrative expenses |
4,771 |
3,656 |
| Interest and accretion |
15,025 |
15,187 |
| Inventory write down |
6,933 |
7,537 |
| Mineral properties expense |
39,842 |
12,727 |
| Project care and maintenance (Galore Creek) |
8,822 |
7,383 |
| Project care and maintenance (Rock
Creek) |
12,471 |
18,405 |
| Salaries, severance and payroll
taxes |
10,591 |
6,788 |
| Gain on disposal of property, plant
and equipment |
1,875 |
- |
| Loss for the year after taxes
attributable to the shareholders |
153,153 |
203,549 |
| Basic and diluted loss per share |
0.65 |
0.95 |
Financial Results
For the year ended November 30, 2011, the Company reported a loss attributable to the shareholder of $153.2 million (or $0.65 basic and diluted loss per share) compared to a loss of $203.5 million (or $0.95 basic and diluted loss per share) for the previous year. This variance was mainly due to the non-cash asset impairment of the Rock Creek project for $116.4 million in 2010 compared to the non-cash asset impairment of the power transmission rights for $52.7 million and the equipment for $8.3 million in 2011, of which $13.8 million was attributable to non-controlling interest and $9.7 million to future income tax recovery partially offset by the gain on disposition of alluvial gold properties of $16.1 million. Another factor that contributed to this variance was the Company’s additions in closure cost estimates for the required closure activities at the Rock Creek project, which the Company recorded an expense of $20.4 million for the revision of its asset reclamation obligation in 2011, with no comparable amount in 2010.
Income from the Company’s land and gravel sales, gold royalties
and other revenues were $0.4 million during 2011 compared with $0.6 million in
2010 due to decreased land sales in Nome, Alaska. Interest income decreased to
$0.4 million in 2011 from $0.6 million in 2010 as the result of the decrease in
cash holdings during the year.
Expenses for the year ended November 30, 2011 were $107.9
million compared to $70.3 million in 2010. This was primarily due to the
increased level of activity for the Galore Creek prefeasibility study and
exploration work at the Ambler project which resulted in the increase of mineral
property expenses to $39.6 million compared with $12.7 million in 2010. The
Company also recorded expense of $7.7 million in 2011 compared with $5.0 million
in 2010 for stock-based compensation; the increase is due to higher valuations
for the stock option and performance share units (“PSU”) issued as a result of
higher stock prices. During 2011, the Company granted 1.3 million stock options
and 0.2 million PSUs to its employees.
NovaGold Resources Inc.
- 4 -
These increases were offset by the reduction of care and
maintenance expenditures at Rock Creek, as the Company recorded $12.5 million in
2011 compared with $18.4 million in 2010. This was due to the decreased level of activity in 2011
compared to 2010, when the Company was improving the tailings pond
infrastructure and water management and treatment systems at Rock Creek. The
Company also recorded $8.8 million of Galore Creek project care and maintenance
expenses in 2011 compared with $7.4 million in 2010, mainly due to the increased
level of activity in 2011 compared to 2010 as the project progresses by
strengthening the existing access areas and upgrading its environmental
program.
Outlook
At November 30, 2011, the Company had cash and cash equivalents
of $66.8 million and working capital of $37.3 million. The 2012 budget for Rock
Creek closure is discussed below.
The Company is focused on advancing the Donlin Gold project.
Donlin Gold LLC has conditionally approved a 2012 budget of approximately
US$37.2 million of which the Company’s 50% share is approximately US$18.7
million. The 2012 work program includes funds for permitting activities,
community development and planning for future development. Project permitting is
expected to commence in the first half of 2012 following approval by the Donlin
Gold LLC Board of Directors.
At the Ambler project, held by NovaCopper, NovaGold has
approved a US$4.0 million interim budget to support exploration and development
activities in advance of the completion of the proposed Plan of Arrangement in
regard to the distribution of the shares of NovaCopper. Should the Plan of
Arrangements not be completed before the field drilling season commencing in May
2012, further funding by NovaGold may be required.
At the Galore Creek project, GCMC has an approved 2012 budget
of approximately $35.4 million of which the Company’s 50% share is approximately
$17.7 million to fund the 2012 infill drilling program, additional engineering
studies and site care and maintenance costs. The portion of this budget funded
by NovaGold is contingent on the timing and success of its divestment process.
The Company has recently commenced a formal process to investigate opportunities
to sell all or part of its interest in the Galore Creek Partnership.
The Company has a budget of approximately $30.0 million for
completion of closure activities at Rock Creek and an additional $7.0 million
for site care and maintenance. The majority of Closure activities are expected
to take place during 2012 with certain activities carrying over to 2013. A
majority of the closure activities have been accounted for in the working
capital as part of the current portion of the asset retirement obligation.
Subsequent to the year end, the Company has increased its reclamation bond with
the State of Alaska by US$13.4 million for a total bond of $20.3 million. Funds
are expected to be returned to the Company once closure activities are
completed. Also the Company is considering a corporate general and
administrative budget at approximately $21.9 million in 2012. On February 7,
2012, the Company issued by way of a bought deal equity financing 35,000,000
common shares at US$9.50 per common shares for net proceeds of approximately
US$318 million after deducting underwriters’ fees and issuance expenses.
Scientific and technical information not directly summarized
from the contents of the technical report was reviewed and approved by Kevin
Francis, SME Registered Member, VP, Resources for NovaGold and a Qualified
Person as defined by NI 43-101.
NovaGold Resources Inc.
- 5 -
About NovaGold
NovaGold is a precious metals company engaged in the
exploration and development of mineral properties primarily in Alaska, U.S.A.
and British Columbia, Canada. The Company is focused on advancing its flagship
property, Donlin Gold and offers superior leverage to gold with one of the
largest reserve/resource bases of any junior or mid-tier gold exploration
company. The Company is also committed to maximizing the value of its non-core
assets, including its interest in the Galore Creek copper-gold-silver project.
NovaGold has a strong track record of expanding deposits through exploration
success and forging collaborative partnerships, both with local communities and
with major mining companies. The Donlin Gold Project in Alaska, one of the
world’s largest known undeveloped gold deposits, is held by a limited liability
company owned equally by wholly-owned subsidiaries of NovaGold and Barrick Gold
Corporation. The Galore Creek Project in British Columbia, a large
copper-gold-silver deposit, is held by a partnership owned equally by
wholly-owned subsidiaries of NovaGold and Teck Resources Limited. NovaGold,
through its wholly-owned subsidiary, NovaCopper Inc., which it plans to spin-out
to shareholders, owns a 100% interest in the high-grade Ambler
copper-zinc-gold-silver deposit in northern Alaska. The Company also owns other
earlier-stage exploration properties. NovaGold trades on the TSX and NYSE-AMEX
under the symbol NG.
NovaGold Contact
Neil MacRae
Director, Investor Relations
Ariadna D. Peretz
Analyst, 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. All
statements, other than statements of historical fact, included herein including,
without limitation, statements relating to NovaGold’s future operating and
financial performance, the potential spin-out of NovaCopper and the potential
sale of all or part of NovaGold’s interest in Galore Creek are forward-looking
statements. 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”, or “should” occur or
be achieved. These forward-looking statements may include statements regarding
perceived merit of properties; exploration results and budgets; mineral reserves
and resource estimates; work programs; capital expenditures; timelines;
strategic plans; completion of transactions; market prices for precious and base
metals; intended use of proceeds; 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 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 with Barrick Gold
Corporation and Teck Resources Limited for the continued exploration and
development of the Donlin Gold and Galore Creek properties; the need for
cooperation of government agencies and native groups in the development and
operation of properties; the need to obtain permits and governmental approvals;
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; and other risk and uncertainties disclosed in
NovaGold’s Annual Information Form for the year-ended November 30, 2011, filed with the Canadian
securities regulatory authorities, and NovaGold’s annual report on Form 40-F
filed with the United States Securities and Exchange Commission and in other
NovaGold reports and documents filed with applicable securities regulatory
authorities from time to time. NovaGold’s forward-looking statements reflect the
beliefs, opinions and projections 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.
NovaGold Resources Inc.
- 6 -
Cautionary Note Regarding Reserve and Resource Estimates
This press release has been prepared in accordance with the
requirements of the securities laws in effect in Canada, which differ from the
requirements of U.S. securities laws. Unless otherwise indicated, all resource
and reserve estimates included in this press release have been prepared in
accordance with National Instrument 43-101 Standards of Disclosure for Mineral
Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy, and
Petroleum Definition Standards on Mineral Resources and Mineral Reserves. NI
43-101 is a rule developed by the Canadian Securities Administrators which
establishes standards for all public disclosure an issuer makes of scientific
and technical information concerning mineral projects. Canadian standards,
including NI 43-101, differ significantly from the requirements of the United
States Securities and Exchange Commission (“SEC”), and resource and reserve
information contained herein may not be comparable to similar information
disclosed by U.S. companies. In particular, and without limiting the generality
of the foregoing, the term “resource” does not equate to the term 9 “reserves”.
Under U.S. standards, mineralization may not be classified as a “reserve” unless
the determination has been made that the mineralization could be economically
and legally produced or extracted at the time the reserve determination is made.
The SEC’s disclosure standards normally do not permit the inclusion of
information concerning “measured mineral resources”, “indicated mineral
resources” or “inferred mineral resources” or other descriptions of the amount
of mineralization in mineral deposits that do not constitute “reserves” by U.S.
standards in documents filed with the SEC. Investors are cautioned not to assume
that any part or all of mineral deposits in these categories will ever be
converted into reserves. U.S. investors should also understand that “inferred
mineral resources” have a great amount of uncertainty as to their existence and
great uncertainty as to their economic and legal feasibility. It cannot be
assumed that all or any part of an “inferred mineral resource” will ever be
upgraded to a higher category. Under Canadian rules, estimated “inferred mineral
resources” may not form the basis of feasibility or pre-feasibility studies
except in rare cases. Investors are cautioned not to assume that all or any part
of an “inferred mineral resource” exists or is economically or legally mineable.
Disclosure of “contained ounces” in a resource is permitted disclosure under
Canadian regulations; however, the SEC normally only permits issuers to report
mineralization that does not constitute “reserves” by SEC standards as in-place
tonnage and grade without reference to unit measures. The requirements of NI
43-101 for identification of “reserves” are also not the same as those of the
SEC, and reserves reported by the Company in compliance with NI 43-101 may not
qualify as “reserves” under SEC standards. Accordingly, information concerning
mineral deposits set forth herein may not be comparable with information made
public by companies that report in accordance with U.S. standards.
NovaGold Resources Inc.
- 7 -
Appendix – Reserve &
Resource Table
| NovaGold Resources Inc. |
| Proven and Probable Mineral Reserves, Measured,
Indicated and Inferred Mineral Resources for Gold (Au), Silver (Ag),
Copper (Cu), Zinc (Zn) and Lead (Pb) |
| As at December 5, 2011 |
Reserves
| Property |
Reserve |
Tonnes |
Diluted Grade |
Total Contained
Metal |
NovaGold Share Net
After Earn-Ins |
| % Ownership |
Category |
Millions |
Au g/t |
Ag g/t |
Cu % |
Zn % |
Pb % |
Moz Au |
Moz Ag |
Mlbs Cu |
Mlbs Zn |
Mlbs Pb |
Moz Au |
Moz Ag |
Moz
AuEq |
Mlbs Cu |
Mlbs Zn |
Mlbs Pb |
| |
| Donlin Gold (1) approximately 0.57 g/t Au Cutoff |
Proven |
7.7 |
2.32 |
|
|
|
|
0.57 |
|
|
|
|
0.29 |
|
0.29 |
|
|
|
| 50%
Ownership - 50% Owned by Barrick Gold U.S. Inc. |
Probable |
497.1 |
2.08 |
|
|
|
|
33.28 |
|
|
|
|
16.64 |
|
16.64 |
|
|
|
| |
Total P&P |
504.8 |
2.09 |
|
|
|
|
33.85 |
|
|
|
|
16.93 |
|
16.93 |
|
|
|
| |
| Galore Creek (2) C$10.08 NSR Cutoff |
Proven |
69.0 |
0.52 |
4.94 |
0.61 |
|
|
1.15 |
11.0 |
900 |
|
|
0.58 |
5.5 |
0.67 |
450 |
|
|
| 50%
Ownership - 50% Owned by Teck Resources Inc. |
Probable |
459.1 |
0.29 |
6.18 |
0.58 |
|
|
4.30 |
91.2 |
5900 |
|
|
2.15 |
45.6 |
2.91 |
2,950 |
|
|
| |
Total P&P |
528.0 |
0.32 |
6.02 |
0.59 |
|
|
5.45 |
102.2 |
6800 |
|
|
2.73 |
51.1 |
3.58 |
3,400 |
|
|
| Resources (Inclusive of Reserves) |
| Property |
Resource |
Tonnes |
In Situ Grade |
Total Contained
Metal |
NovaGold Share Net
After Earn-Ins |
| % Ownership |
Category |
Millions |
Au g/t |
Ag g/t |
Cu % |
Zn % |
Pb % |
Moz Au |
Moz Ag |
Mlbs Cu |
Mlbs Zn |
Mlbs Pb |
Moz Au |
Moz Ag |
Moz AuEq |
Mlbs Cu |
Mlbs Zn |
Mlbs Pb |
| |
| Donlin Gold (3) approximately 0.46 g/t Au Cutoff |
Measured |
7.7 |
2.52 |
|
|
|
|
0.63 |
|
|
|
|
0.31 |
|
0.31 |
|
|
|
| 50%
Ownership - 50% Owned by Barrick Gold U.S. Inc. |
Indicated |
533.6 |
2.24 |
|
|
|
|
38.38 |
|
|
|
|
19.19 |
|
19.19 |
|
|
|
| |
Total M&I |
541.3 |
2.24 |
|
|
|
|
39.01 |
|
|
|
|
19.50 |
|
19.50 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Inferred |
92.2 |
2.02 |
|
|
|
|
5.99 |
|
|
|
|
3.00 |
|
3.00 |
|
|
|
| |
| Galore Creek (4) C$10.08 NSR Cutoff |
Measured |
108.4 |
0.48 |
4.10 |
0.48 |
|
|
1.70 |
14.30 |
1,147.0 |
|
|
0.85 |
7.15 |
0.97 |
573.5 |
|
|
| 50%
Ownership - 50% Owned by Teck Resources Limited |
Indicated |
706.3 |
0.28 |
5.38 |
0.50 |
|
|
6.40 |
122.10 |
7,786.0 |
|
|
3.20 |
61.05 |
4.21 |
3,893.0 |
|
|
| |
Total M&I |
814.7 |
0.31 |
5.21 |
0.50 |
|
|
8.00 |
136.40 |
8,933.0 |
|
|
4.00 |
68.20 |
5.18 |
4,466.5 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Inferred |
346.6 |
0.24 |
4.28 |
0.42 |
|
|
2.70 |
47.73 |
3,230.0 |
|
|
1.35 |
23.87 |
1.75 |
1,615.0 |
|
|
| |
| Copper Canyon (5)(6) 0.6% CuEq Cutoff |
Inferred |
53.7 |
0.73 |
10.60 |
0.50 |
|
|
1.26 |
18.36 |
592.0 |
|
|
0.88 |
12.85 |
1.10 |
414.4 |
|
|
| 70%
Ownership - 30% Owned by Teck Resources Limited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total Inferred |
400.3 |
0.31 |
5.14 |
0.43 |
|
|
3.96 |
66.09 |
3,822.0 |
|
|
2.23 |
36.72 |
2.84 |
2,029.4 |
|
|
| |
| Ambler (7) $75 NSR / Tonne Cutoff |
Measured |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 100%
Ownership |
Indicated |
16.8 |
0.83 |
59.62 |
4.14 |
6.02 |
0.94 |
0.45 |
32.29 |
1,538.3 |
2,237.0 |
350.3 |
0.45 |
32.29 |
0.98 |
1,538.3 |
2,237.0 |
350.3 |
| |
Total M&I |
16.8 |
0.83 |
59.62 |
4.14 |
6.02 |
0.94 |
0.45 |
32.29 |
1,538.3 |
2,237.0 |
350.3 |
0.45 |
32.29 |
0.98 |
1,538.3 |
2,237.0 |
350.3 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Inferred |
12.1 |
0.67 |
48.04 |
3.53 |
4.94 |
0.79 |
0.26 |
18.67 |
939.9 |
1,316.9 |
211.6 |
0.26 |
18.67 |
0.57 |
939.9 |
1,316.9 |
211.6 |
| |
| |
| Total Proven & Probable Reserves Contained Metal |
39.30 |
102.2 |
6,800.0 |
|
|
19.66 |
51.10 |
20.51 |
3,400.0 |
|
|
| Total Measured & Indicated Contained Metal (inclusive of
Reserves) |
47.45 |
168.69 |
10,471.32 |
2,237.0 |
350.3 |
23.95 |
100.49 |
25.67 |
6,004.8 |
2,237.0 |
350.3 |
| Total Inferred Contained Metal |
10.21 |
84.76 |
4,761.9 |
1,316.9 |
211.6 |
5.49 |
55.38 |
6.41 |
2,969.3 |
1,316.9 |
211.6 |
NovaGold Resources Inc.
- 8 -
| Notes: |
| a. These resource estimates have been prepared in
accordance with NI43-101 and the CIM Definition Standard, unless otherwise
noted. |
| b. See numbered footnotes below on resource information. |
| c. AuEq - gold equivalent is calculated using gold and
silver in the ratio of gold + silver ÷ (US$1023 Au ÷ US$17 Ag) 2008 - 2010
average metal prices. |
| d. Rounding as required by reporting guidelines may result
in apparent summation differences between tonnes, grade and contained
metal content |
| e. Tonnage and grade measurements are in metric units.
Contained gold and silver ounces are reported as troy ounces, contained
copper, zinc, and lead pounds as imperial pounds |
Resource Footnotes:
(1) Mineral Reserves are contained within Measured and
Indicated pit designs, and supported by a mine plan, featuring variable
throughput rates, stockpiling and cut-off optimization. The pit designs and mine
plan were optimized on diluted grades using the following economic and technical
parameters: Metal price for gold of US$975/oz; reference mining cost of
US$1.67/t incremented US$0.0031/ t/m with depth from the 220 m elevation
(equates to an average mining cost of US$2.14/t), variable processing cost based
on the formula 2.1874 x (S%) + 10.65 for each US$/t processed; general and
administrative cost of US$2.27/t processed; stockpile rehandle costs of
US$0.19/t processed assuming that 45% of mill feed is rehandled; variable
recoveries by rocktype, ranging from 86.66% in shale to 94.17% in intrusive
rocks in the Akivik domain; refining and freight charges of US$1.78/oz gold;
royalty considerations of 4.5%; and variable pit slope angles, ranging from 23º
to 43º. Mineral Reserves are reported using an optimized net sales return value
based on the following equation: Net Sales Return = Au grade * Recovery *
(US$975/oz – (1.78 + ((US$975/oz – 1.78) * 0.045))) [](10.65 + 2.1874 * (S%) +
2.27 + 0.19) and reported in US$/tonne. The life of mine strip ratio is 5.48.
The assumed life-of-mine throughput rate is 53.5 kt/d.
(2) Mineral Reserves are contained within Measured and
Indicated pit designs using metal prices for copper, gold and silver of
US$2.50/lb, US$1,050/oz, and US$16.85/oz, respectively. Appropriate mining
costs, processing costs, metal recoveries and inter ramp pit slope angles
varying from 42º to 55º were used to generate the pit phase designs. Mineral
Reserves have been calculated using a 'cashflow grade' ($NSR/SAG mill hr)
cut-off which was varied from year to year to optimize NPV. The net smelter
return (NSR) was calculated as follows: NSR = Recoverable Revenue – TCRC (on a
per tonne basis), where: NSR = Net Smelter Return; TCRC = Transportation and
Refining Costs; Recoverable Revenue = Revenue in Canadian dollars for
recoverable copper, recoverable gold, and recoverable silver using metal prices
of US$2.50/lb, US$1,050/oz, and US$16.85/oz for copper, gold, and silver,
respectively, at an exchange rate of CDN$1.1 to US$1.0; Cu Recovery = Recovery
for copper based on mineral zone and total copper grade; for Mineral Reserves
this NSR calculation includes mining dilution. SAG throughputs were modeled by
correlation with alteration types. Cashflow grades were calculated as the
product of NSR value in $/t and throughput in t/hr. The life of mine strip ratio
is 2.16.
(3) Mineral Resources are inclusive of Mineral Reserves.
Mineral Resources that are not Mineral Reserves do not have demonstrated
economic viability. Mineral Resources are contained within a conceptual
Measured, Indicated and Inferred optimized pit shell using the following
assumptions: gold price of US$1,200/oz; variable process cost based on 2.1874 *
(sulphur grade) + 10.65; administration cost of US$2.29/t; refining, freight
& marketing (selling costs) of US$1.85/oz recovered; stockpile rehandle
costs of US$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).
Mineral Resources have been estimated using a constant Net Sales Return cut-off
of US$0.001/t milled. The Net Sales Return was calculated using the formula: Net
Sales Return = Au grade * Recovery * (US$1200/oz – (1.85 + ((US$1200/oz – 1.85)
* 0.045))) (10.65 + 2.1874 * (S%) + 2.29 + 0.20) and reported in US$/tonne. See
"Cautionary Note Concerning Reserve & Resource Estimates".
(4) Mineral Resources are inclusive of Mineral Reserves.
Mineral resources are contained within a conceptual Measured, Indicated and
Inferred optimized pit shell using the same economic and technical parameters as
used for Mineral Reserves. Tonnages are assigned based on proportion of the
block below topography. The overburden/bedrock boundary has been assigned on a
whole block basis. Mineral resources have been estimated using a constant NSR
cut-off of C$10.08/t milled. The Net Smelter Return (NSR) was calculated as
follows: NSR = Recoverable Revenue – TCRC (on a per tonne basis), where: NSR =
Diluted Net Smelter Return; TCRC = Transportation and Refining Costs;
Recoverable Revenue = Revenue in Canadian dollars for recoverable copper,
recoverable gold, and recoverable silver using silver using the economic and
technical parameters mentioned above. The mineral resource includes material
within the conceptual M&I pit that is not scheduled for processing in the
mine plan but is above cutoff. See "Cautionary Note Concerning Reserve &
Resource Estimates".
(5) The copper-equivalent grade was calculated as follows: CuEq
= Recoverable Revenue ÷ 2204.62 * 100 ÷ 1.55. Where: CuEq = Copper equivalent
grade; Recoverable Revenue = Revenue in US dollars for recoverable copper,
recoverable gold and recoverable silver using metal prices of US$1.55/lb,
US$650/oz, and US$11/oz for copper, gold, and silver, respectively; Cu Recovery
= 100%. 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 a great amount of uncertainty as to their
existence and whether they can be mined legally or economically. It cannot be
assumed that all or any part of the Inferred Resources will ever be upgraded to
a higher category. See "Cautionary Note Concerning Reserve & Resource
Estimates".
(6) NovaGold Canada Inc. has agreed to transfer its 60% joint
venture interest in the Copper Canyon property to the Galore Creek Partnership,
which is equally owned by NovaGold Canada Inc. and a subsidiary of Teck
Resources Limited. The remaining 40% joint venture interest in the Copper Canyon
property is owned by another wholly owned subsidiary of NovaGold.
(7) Resources stated as contained within a potentially
economically minable underground shapes above a US$75.00/t NSR cut-off. NSR
calculation is based on assumed metal prices of US$2.50/lb for copper,
US$1,000/oz for gold, US$16.00/oz for silver, US$1.00/lb for zinc and US$1.00/lb
for lead. A mining cost of US$45.00/t and combined processing and G&A costs
of US$31.00 were assumed to form the basis for the resource NSR cut-off
determination. 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 a great amount of uncertainty
as to their existence and whether they can be mined legally or economically. It
cannot be assumed that all or any part of the Inferred Resources will ever be
upgraded to a higher category. See "Cautionary Note Concerning Reserve &
Resource Estimates".
Cautionary Note Concerning Reserve & Resource Estimates
This summary table uses the term “resources”, “measured
resources”, “indicated resources” and “inferred resources”. United States
investors are advised that, while such terms are recognized and required by
Canadian securities laws, the United States Securities and Exchange Commission
(the “SEC”) does not recognize them. Under United States standards,
mineralization may not be classified as a “reserve” unless the determination has
been made that the mineralization could be economically and legally produced or
extracted at the time the reserve determination is made. Mineral resources that
are not mineral reserves do not have demonstrated economic viability. United
States investors are cautioned not to assume that all or any part of measured or
indicated resources will ever be converted into reserves. Further, inferred
resources have a great amount of uncertainty as to their existence and as to
whether they can be mined legally or economically. It cannot be assumed that all
or any part of the inferred resources will ever be upgraded to a higher
category. Therefore, United States investors are also cautioned not to assume
that all or any part of the inferred resources exist, or that they can be mined
legally or economically. Disclosure of “contained ounces” is permitted
disclosure under Canadian regulations, however, the SEC normally only permits
issuers to report “resources” as in place tonnage and grade without reference to
unit measures. Accordingly, information concerning descriptions of
mineralization and resources contained in this release may not be comparable to
information made public by United States companies subject to the reporting and
disclosure requirements of the SEC.
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.
Unless otherwise indicated, all resource estimates contained in this circular
have been prepared in accordance with NI 43-101 and the CIM Definition
Standards.
Technical Reports and Qualified Persons
The documents referenced below provide supporting technical
information for each of NovaGold's projects.
| Project |
Qualified Person(s) |
Most Recent Disclosure & Filing Date |
| Donlin Gold |
Tony Lipiec, P. Eng., AMEC |
Donlin Creek Gold Project |
| |
Gordon Seibel R.M. SME, AMEC |
Alaska, USA |
| |
Kirk Hanson P.E., AMEC |
NI 43-101 Technical Report on Second Updated
Feasibility Study |
| |
|
amended filing on January 23, 2012 |
| |
|
|
| Galore Creek |
Robert Gill, P.Eng., AMEC |
Galore Creek Copper–Gold Project, |
| |
Jay Melnyk, P.Eng., AMEC |
British Columbia, NI 43-101 Technical Report on
Pre-Feasibility Study, |
| |
Greg Kulla, P.Geo., AMEC |
filed on September 12, 2011 |
| |
Greg Wortman, P.Eng., AMEC |
|
| |
Dana Rogers, P.Eng., Lemley
International |
|
| |
|
|
| Copper Canyon |
Erin Workman, P.Geo., NovaGold
Resources Inc. |
Not publicly released - updated March 2008 |
| |
|
|
| Ambler |
Russ White, P.Geo., SRK
Consulting |
NI 43-101 Preliminary Economic Assessment,
Ambler Project - May 9, 2011 |
| |
Neal Rigby, C.Eng., MIMMM, Ph.D.,
SRK Consulting |
|
NovaGold Resources Inc.
- 9 -