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LETTER TO SHAREHOLDERS
Gregory A. Lang | president and CEO
Over the past six years, we have been methodically advancing our two assets up the value chain: the 50%-owned Donlin Gold project in Alaska and the 50%-owned Galore Creek
copper-gold-silver project in British Columbia. Our company’s core priority throughout this period has been to position NOVAGOLD such that when the scarcity value of these tier-one properties is realized – and the market is willing to pay the right price for growth – our e orts will render NOVAGOLD the go-to gold stock. This revaluation can happen quickly.
Looking at the last time our share price rose quickly, in 2010, we faced more than a few headwinds and had some things to prove. Yet despite such adversity, NOVAGOLD’s share price more than doubled within a matter of months. This is worth remembering, as this was before we had a feasibility study on Donlin Gold; before we had a pre-feasibility study on Galore Creek; before relations with our partner on the Donlin Gold project – strained by the baggage of the failed takeover attempt in 2006 – became truly friendly and close; before the seasoned management team we have in place today had been hired; and before the company’s stated belief that permitting our project in Alaska would succeed had been demonstrated. Successfully turning all of these NOVAGOLD-speci c headwinds into major tailwinds for our company will surely advance our unique story. I would add that a number of other factors that did not seem particularly critical at the time have been very positive for NOVAGOLD. Let us ponder some of them, as they will inevitably resonate with all of our shareholders. In 2010, miners – and investors – were ambivalent about grade; now grade is king. And even if the quality of the discoveries was low, exploration was yielding some success. Since the beginning of the decade, however, no new discoveries that could signi cantly move the needle for the majors have been found. Perhaps most important, miners – and again investors – were rather cavalier about where they secured and developed their projects. Now if a management team
claims to have one of the industry’s best assets, it had better also be able to satisfyingly answer investors’ likely question: “Where in the world is it?”
Between what we have done right in the areas within our control and what has happened to the industry, NOVAGOLD today is better positioned than ever. As we work and wait, it can be frustrating
at times for all of us who want to see NOVAGOLD achieve its true potential. But we are convinced that the phenomenon we call “the tortoise and the hare” is going to provide the value we all seek. The price of gold will obviously have a say in the matter. Nonetheless,
in terms of those items within our control, we are delivering on our strategy of derisking our agship project, Donlin Gold, setting the stage for a timely construction decision. 2017, a year characterized by success across the board, was certainly no exception. We continued to execute on the company’s stated strategy, making progress on all fronts – including completing a drill program that will help advance our optimization work at Donlin Gold, a one-of-a-kind asset where potential value generation is highest. In our view, Donlin Gold represents the world’s most important gold development project and warrants a singular, laser-like focus. This truly will be a model mine, in no small part because of the exceptional level of dedication, collaboration, trust, and respect among all stakeholders as they continue to move the project forward. This is what motivates us. We believe that the best is yet to come – for our shareholders, for our partners, and for all of our project’s local stakeholders.
A resource almost four times the size of the peer group average.
39Moz 10Moz Donlin Gold* peer group average†
* Donlin Gold resources as per the second updated feasibility study effective November 18, 2011, as amended January 20, 2012. Represents 100% of measured resources of 7.7 million tonnes at 2.52 g/t and indicated resources of 533.6 million tonnes at 2.24 g/t and includes proven and probable reserves. NOVAGOLD’s share of total Donlin Gold resources is 50%. † Peer group data based on company documents, public filings, and websites. Comparison group of 15 projects based on large (2Moz P&P cut-off ), North/South American gold-focused development projects.
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