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extended tenures with Barrick and Goldcorp; David Ottewell, who joined NOVAGOLD from Newmont where he served in a variety
of senior financial roles, including Chief Controller; Ron Rimelman, whose background in environmental management, health and safety, and sustainability included a long career at Tetra Tech; and Mélanie Hennessey, our VP, Corporate Communications, who came to us after successful tenures at companies such as Hecla and Goldcorp.
As personal dynamics go, I am also very proud of the fact that
in 2016 we further strengthened our relationship with our partner Barrick. Fifty-fifty partnerships are supposed to be challenging, but not this partnership. We are aligned at every level, from our specific approach to project management with a focus on engineering excellence and a strong culture of safety, environmental stewardship, and social engagement to our strategic approach to the timing for development of major projects such as Donlin Gold. In terms of the timing, we both share the belief that all stakeholders stand to benefit the most from Donlin Gold by advancing it prudently; that it should not be built at “any gold price.” We also believe that the value of Donlin Gold can be enhanced by minimizing initial capital outlays and employing innovative ideas such as modular construction techniques and selective mining methods. Both teams are jointly working toward that end, knowing full well that the advancement
of Donlin Gold, coupled with a meaningful uptick in the price of gold, would represent a beautifully perfect storm for all Donlin Gold stakeholders.
The most recent appointment of Andy Cole is the best example of our shared values. Last year, we were delighted to welcome Andy, an enormously well-regarded Barrick executive, to take on the role of General Manager of Donlin Gold. He has more than 20 years
of experience in permitting, building and operating major gold mines in North America. Most recently, he was Barrick’s Executive Director, U.S.A., responsible for permitting, energy, communications, community relations, and corporate social responsibility. Prior to that position, he served in a variety of senior operating roles, including General Manager of the Goldstrike mine, one of Barrick's largest, in Nevada. Andy’s assumption of this key role is a statement on many levels about how Donlin Gold is not only a “special” situation but, as Andy himself put it in our joint-press release with Barrick, a
“unique” one.
The reason for Andy’s and the NOVAGOLD management team’s enthusiasm about Donlin Gold is because they all realize just what
a special project it is. And like them, I am not aware of any project that has a measured and indicated resource endowment containing approximately 39,000,000 ounces of gold with a grade averaging 2.2 grams of gold per tonne, double the industry average. Add
to that a projected gold production profile that is expected to
average approximately 1,100,000 ounces of gold per year (with initial production averaging 1,500,000 ounces per year) over a projected 27- year life, and that one has what could be the largest, highest-quality long-life pure gold mine in the world. This does not even consider the exceptional exploration potential that exists on our eight-kilometer strike zone, of which only three kilometers encompass the future mine. Any future exploration success could yield further expansion of the mine life and a possible increase in its future production profile. All of those attributes located in a place that respects the rule of law, make Donlin Gold not only “special” but “unique,” particularly in light of our bullish view on gold.
As NOVAGOLD’s largest shareholder and its Chairman I could not be happier with the Company’s achievements. That includes our excellent time-tested mutual trust we have developed with the Native Corporations – Calista and The Kuskokwim Corporation –
the respective owners of the mineral and surface rights to Donlin Gold. These relationships are based on actions rather than words. For example, in 2016, Donlin Gold sponsored students from the Native Village of Napaimute to help them attend the Northern Industrial Training Career Center and participate in skill development workshops. We also helped provide an Alaska Sealife Center distance learning program for the Kuspuk School District, which will be
used broadly in schools across the region. These are just two of many examples of our close involvement in Yukon-Kuskokwim communities. They form an important foundation for our future collective success, because together, we are creating a source of economic prosperity in the region for many generations to come.
The atmosphere of trust and respect toward our local partners is not limited to Donlin Gold. We employ the same philosophy with members of the Tahltan First Nation, on whose traditional territory Galore Creek – the major copper-gold-silver project equally owned by NOVAGOLD and Teck – is located. Our engagement with the community includes support for post-secondary education and employment on our projects. These activities remain high-priority while we continue our technical and environmental work at Galore Creek, which could one day be Canada’s largest and lowest-cost copper mine.
In conclusion, on behalf of the Board of Directors, I would like to extend our sincere thanks to all of our stakeholders, including the many fine financial institutions who have become shareholders of this great company. In addition, I wish to express my gratitude to
our partners at Barrick and Teck as well as the governments, Native Corporations, and First Nations of the jurisdictions where we operate. We are truly blessed to be a part of their families.
DR. THOMAS KAPLAN CHAIRMAN, BOARD OF DIRECTORS FEBRUARY 10, 2017
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