Page 18 - NG2020AR

10
Q+A
FROM THAT PARTICULAR STANDPOINT, WHAT KIND OF RELATIVE ADVANTAGE DOES ALASKA BRING TO YOU?
For a mining investor, it is optimal to seek a Tier One asset19
in a Tier One jurisdiction.20 Sadly, as I just discussed, location in the mining industry is ultimately the existential factor. A company can never take its asset elsewhere, were geo-political conditions to deteriorate.
Fortunately, Donlin Gold is located in Alaska, one of the world’s most favorable mining jurisdictions where a strong culture of support exists for responsible mine development. That fact can never be overestimated. As we stated in our January 27, 2021 press release:
“...we feel enormously fortunate to be located in what is, after Nevada, the second-largest gold-producing State in a country where the rule of law is real, and to be partnered with the Alaska Native communities.
An incredibly favorable factor that distinguishes Donlin Gold from most other mining assets in Alaska is the fact that it is located on private land that was designated by law for mining activities five decades ago. Donlin Gold is a party to life-of-mine agreements with Calista Corporation (“Calista”), which owns the subsurface mineral rights, and The Kuskokwim Corporation (TKC), a collection of ten village corporations, which owns
the surface rights. Involving the local communities
in many aspects of the project is thus core to both Barrick’s and NOVAGOLD’s philosophy and culture. The benefits – short-, medium-, and long-term – are there for all to see. Right now, this partnership is the source of key employment opportunities, scholarships, and preferential contract considerations. But very importantly, these agreements also include a revenue- sharing structure, established by the Alaska Native Claims Settlement Act (ANCSA) of 1971, which resolved Alaska Native land claims and allotted 44 million acres for land use to Alaska Native Corporations.
Our long-term commitment to the region’s economic development is exemplified by Donlin Gold’s support of TKC’s initiative to launch middle Kuskokwim energy and infrastructure projects. These partnerships, activities and programs are illustrative of our commitment to the sustainable and responsible development of the Donlin Gold project for the benefit of all stakeholders.”
19 NOVAGOLD defines a Tier One gold development project as one with a projected production life of at least 10 years, annual projected production of at least 500,000 ounces of gold, and average projected cash costs over the production life that are in the lower half of the industry cost curve.
20 NOVAGOLD considers Tier One jurisdictions to be any in the top 10 rank by the Investment Attractiveness Index in the Fraser Institute’s Annual Survey of Mining Companies, 2020. Alaska is ranked number 5.
With an asset boasting a life of mine of almost 30 years (and most likely a lot more than that), and in light of the strong bonds and mutual trust built over a 20-year period of working alongside our Native Corporation partners, as well as with local communities in the Y-K region, we believe that Donlin Gold should be able
to secure a robust and enduring social license to advance its project. That, of course, can never be taken for granted – hence our continuous engagement and daily commitment to these relationships.
YOU SPEAK A LOT ABOUT VALUES AS WELL AS VALUE. COULD YOU PLEASE EXPAND ON THIS?
We all know that reputation is hard won and easily lost. This
is best summed up by Electrum’s corporate motto: Intelligence is a commodity; Character is a currency. Character itself is fundamentally about trying to do the right thing rather than the expedient
thing. It’s about not losing one’s sense of honor, if one can use
that elevated word these days and still get away with it, and more prosaically, it’s about credibility. Doing what one says one is going to do is of course a wonderful way to maintain that credibility, both personally and professionally.
Speaking for Electrum and NOVAGOLD, when we say that we’re going to do something, we do it. Period. It makes life simpler and it’s also good business. Quaint as that may sound in our increasingly transactional world, this code stems from a deep philosophical attachment to a values-based and purpose-driven life. It also comes from being, as the French would say, bien élevé (“well brought up”) in business by partners who taught us that one’s word should be one’s bond – simply because it is the right thing to do. Reputation, after all, is the coin of the realm in life.
As goes the Russian proverb: “With lies you may get ahead in
the world – but you can never go back.” Through leading by example, these mentors gave us the greatest gift of all: namely, understanding the art of practicing integrity.
11
Q+A
16