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scenarios designed to enhance the project’s value. Led by Barrick’s and NOVAGOLD’s technical teams, these studies have already identified opportunities with the potential to reduce initial capital and enhance the value of Donlin Gold.
Leading us through this next phase of value maximization is Andy Cole, appointed general manager of the Donlin Gold project in November. Andy, who has over a 20-year track record of building and operating major gold mines throughout North America, will build on the solid foundation left by outgoing general manager Stan Foo. I’ve known and worked with Andy for years, and believe that his breadth and depth of experience and talent is perfectly suited to further unlock Donlin Gold’s potential.
Safety, Stewardship, Engagement
In addition to our focus on completing the EIS process in 2016, we’ve been advancing work on the numerous federal and state permit applications and submissions.
Additional field work, designed to support the Clean Water Act Section 404 permit application, was completed and the results were incorporated into an updated preliminary jurisdictional determination for submission to the Corps. In 2016, work was initiated with Calista and other parties on developing a compensatory mitigation plan
for the wetland impacts from the project. Major state permit applications were also submitted to secure the air quality permit, and we updated our integrated waste management permit application and reclamation and closure plan. The state anticipates issuing draft permits for public comment in 2017.
We’ll continue to work with state and federal agencies to advance all other required permits throughout 2017. And, as always, the Donlin Gold team will continue to focus on engineering excellence, a strong culture of safety, environmental stewardship, and community engagement.
Galore Creek Project
While we focus our resources on Donlin Gold, we’re also advancing our other project, Galore Creek, with our partner Teck. A high-grade copper-gold-silver asset, Galore Creek has the potential to be one of the largest, highest-quality, lowest-cost copper producers in Canada.
In 2016, the Galore Creek Partnership completed Phase 1 of the Galore Valley integrated planning study which included the surface water drainage study. We value our partnership with the Tahltan Nation, on whose traditional territory the project is situated, and continue to support common initiatives that bring tangible benefits to their members.
We believe that these studies will improve the value and marketability of the Galore Creek project, which we plan to monetize – in whole or in part – to further strengthen our balance sheet and redeploy capital toward the development of Donlin Gold.
Conclusion
NOVAGOLD continues to carefully steward the capital entrusted to it by our shareholders, managing the treasury in a way that will enable the company to deliver on its objectives while staying true to its long-term outlook and strategy. Our year-end financial position, at $105 million in cash and term deposits as of November 30, 2016, is more than sufficient to advance Donlin Gold through the permitting process.
We’re fortunate to not only own a 50% interest in two of the best development assets in the industry, but also to possess the financial flexibility to de-risk these projects for our stakeholders. We’re confident that the outcome of our work will establish the best path forward for the advancement of both Donlin Gold and Galore Creek, ensuring that, when the time comes for the owners to make a construction decision, the Donlin Gold project will yield the best return on investment.
As we move into 2017, I'd like to thank our partners at Barrick
and Teck and their project teams, my NOVAGOLD colleagues, and the governments, Native Corporations, and First Nations of the jurisdictions where we operate. I’m also grateful to our shareholders for their consistent support and trust, and to our experienced board of directors for their guidance and vision. Finally, I would like to express my sincere appreciation to our employees, whose teamwork, professionalism, and dedication is remarkable.
GREGORY A. LANG PRESIDENT AND CEO FEBRUARY 10, 2017
2.5 times the resources of the next largest known undeveloped gold deposit in the Americas.
39.0 Moz
Donlin Gold
15.7 Moz
next largest deposit
Donlin Gold data as per NOVAGOLD public documents. Represents 100% of measured and indicated resources of which NOVAGOLD’s share represents 50%. Measured and indicated resources are inclusive of proven and probable reserves. See Reserves & Resources Footnotes on page 35. Peer group data as per latest company documents, public filings, and websites. Comparison group based on large (2Moz P&P cut off ), feasibility-level, North/South American gold-focused development projects.
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