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Q+A
NOVAGOLD PLACES A GREAT DEAL OF EMPHASIS ON TRANSPARENCY AND INTEGRITY.
WHAT DO YOU MEAN BY THAT?
That means telling what one is going to do openly, and
then delivering on those promises. And doing so in a way that the shareholders can take pride in the outcome. In my decade of experience with the NOVAGOLD team, I can tell you that it is their nature to do things right.
In terms of doing it right, let us start with what the team
has not done – what I would call successes of omission. First and foremost, the team has never been tempted to use NOVAGOLD’s cash or equity to do something foolish. Sadly, for the fortunes of our industry, using common sense has proven to be a differentiator in and of itself. For as Voltaire professed, “Common sense is not so common.” If, by every metric, one believes one owns one of the best assets on the planet, one simply does not “deworsify,” as the famed Peter Lynch put it so well. Deal junkies we are not.
Then, there are the successes of commission – namely, those things Greg and his team promised to do, and then meticulously delivered to the shareholders as measurable outcomes. When Greg and I joined NOVAGOLD in 2012, we made a series of promises:
f We promised to spin-off our Alaskan copper assets. That company, then called NovaCopper and now trading under the name Trilogy Metals to reflect its polymetallic attributes, has been a highly successful exercise in value accretion.
f In order to make NOVAGOLD the pure play on Donlin in the marketplace, we promised to sell Galore Creek – a beautiful asset, but a project too far for a development-stage company with a flagship as ambitious as Donlin Gold. We could have
let Galore go in a fire sale. We didn’t. We sold it for real money in a market where win-win monetization has been the exception, not the rule. The cash position we find ourselves in, with more guaranteed and potential payments to come, is to be celebrated.
f We declared that, if given an opportunity to show the flexibility of the deposit, we would take it. The drill results Donlin Gold delivered in 2017 and most recently in 2020 exceeded our own expectations. We reckon that these results stand with or above the best drill results reported by any open-pit gold project.
f We stated that this project would be permitted. When anyone pushed back, assuming permitting in Alaska would be a nightmare, we just shrugged our shoulders. The facts pointed to the opposite. All we had ever heard from our
local stakeholders and partners, Calista and TKC, were strong indications of widespread support. The only references to the project in 2012, from a media standpoint, were positive. Six years later, we received the first-ever joint federal record of decision – delivered in a formal ceremony in the presence of the lead agency, the U.S. Army Corps of Engineers with the Bureau of Land Management – that included extensive input from those who held the reasonable concerns that any big project would bring; but not substantial opposition. For those who know the industry, this represents an amazing occurrence practically anywhere in the world.
f Then there is the building of the management team itself, one that in truth could run a major mining company. When the board of directors reorganized the company in early 2012 to focus on Donlin Gold, NOVAGOLD pledged to recruit top talent with demonstrated track records in large-scale mine permitting, development, and operation, with a particular focus on experience in North America. Knowing that a world- class asset warrants world-class professionals, the company set out to attract the very best people in their respective specialties. And it did. NOVAGOLD’s current management, which has been in place for the past nine years, is, as one shareholder put it, “straight out of central casting.” Starting with Greg Lang, NOVAGOLD’s president and CEO, who has over 35 years of diverse experience in mine operations, project development, and evaluations – including eight years as president of Barrick Gold North America, a wholly- owned subsidiary of Barrick Gold Corporation. Greg held progressively increasing operating and project development responsibilities over his 10-year tenure with Barrick and, prior to that, with Homestake Mining Company and International Corona Corporation – both of which are now part of Barrick. Major mines that now represent the foundation of Barrick, such as Cortez Hills, were built under Greg’s leadership. Richard Williams, NOVAGOLD’s vice president of engineering and development – responsible for all aspects related to
the engineering and technical advancement of Donlin
Gold – is yet another star. Richard spent over 30 years with Barrick developing and operating major mines. He is a highly knowledgeable and experienced leader in the autoclave technology that is planned to be used to process ores at Donlin Gold. Importantly, he served as project director of the Pueblo Viejo project in the Dominican Republic, now one
of the most successful mines in Barrick’s portfolio of assets. Richard’s seven-year tenure at Pueblo Viejo capped a career where he progressively held top operating roles that included the design, construction, and operation of mineral processing facilities of major mines, such as Goldstrike in Nevada and Mercur in Utah. David Ottewell, our vice president and chief
QUESTIONS AND ANSWERS 17