Page 31 - NG2020AR

2021 GOALS AND BUDGET
Even before the outstanding drill results received so far from the 2020 campaign, Donlin Gold was an extraordinary project.
With approximately 39 million ounces of gold grading 2.24 grams per tonne1 in measured and indicated mineral resources, Donlin Gold dwarfs most comparable development projects in terms of
its size and its grade. As envisioned, it would average 1.1 million ounces of gold production per year over its projected 27-year mine life.2 Very few mines exist in the gold industry with that level of production. And it’s located in one of the safest mining jurisdictions in the world: Alaska. Donlin Gold also enjoys incredible exploration potential along its eight-kilometer gold-bearing trend, which could substantially increase the already sizable resource and further extend the mine life of the project. Such a one-of-a-kind asset is certainly worth all the time and attention needed to maximize
its value.
Looking ahead to 2021, NOVAGOLD and Barrick expect
to integrate the Donlin Gold 2020 drill program results into an updated geologic model and evaluate the timing to update
the Donlin Gold feasibility study, followed by engineering work which would form the basis of an execution plan and, ultimately, a construction decision. To complete the model update, additional confirmation and extension drilling are planned for 2021,
focusing on the continuity and structural controls of the higher- grade mineralization. To minimize the risks posed by COVID-19, NOVAGOLD will continue to be guided by a set of wide-ranging safety policies to be applied at every company-related facility.
NOVAGOLD anticipates spending approximately $31 to
$35 million in 2021. Between $18 and $22 million will be allocated to fund our share of expenditures at the Donlin Gold project – including $11 million for the 2021 drilling program and studies; $7 million for camp improvements, community engagement, permitting, and administration; and an additional $4 million for other studies contingent upon mid-year approval by both owners – as well as $13 million for corporate general and administrative costs.
NOVAGOLD believes that with approximately $114 million in cash and term deposits as of February 28, 2021, and $75 million
due from Newmont in July 2021, it has sufficient funds to cover anticipated corporate general and administrative costs and funding of the Donlin Gold project through to a construction decision.
Our success in 2020 would not have been possible without the dedicated and experienced team of professionals at NOVAGOLD, Donlin Gold, and Barrick, as well as our top-performing drill crews and support teams at the project site. Their commitment to the
task at hand and their timely and efficient response to the COVID-19 pandemic, while enhancing a multi-decade partnership with Calista and TKC, have been nothing short of outstanding, all of which is
in large part responsible for the considerable achievements seen
1 Donlin Gold data as per the Donlin Gold Second Updated Feasibility Study (as defined herein). Donlin Gold measured resources of approximately 8 Mt grading 2.52 g/t and indicated resources of approximately 534 Mt grading 2.24 g/t, each on a 100% basis and inclusive of mineral reserves. Mineral resources have been estimated in accordance with NI 43-101.
2 As per the Donlin Gold Second Updated Feasibility Study (as defined herein).
2021
GOALS
f continue to advance the Donlin Gold project toward a construction decision
f maintain/increase support for Donlin Gold among the project’s stakeholders; promote a strong safety, sustainability, and environmental culture
f maintain a favorable reputation among shareholders of NOVAGOLD, its governance practices, and its project
f manage the company treasury effectively and efficiently, including streamlining the corporate structure
at the Donlin Gold project. I would also like to thank the entire NOVAGOLD board and team for their commitment, hard work, and dedication to the company. It is a joy to work alongside each of you. My appreciation also extends to the various Alaska state agencies for their diligence in advancing permitting for the project.
Finally, to our shareholders who so clearly understand and support the NOVAGOLD investment thesis, I thank you for your unwavering support through the many challenges that 2020 brought. We value every engagement opportunity and will keep you informed of our progress as we work toward many more accomplishments in 2021, highlighting NOVAGOLD and this unique investment opportunity.
The NOVAGOLD team has entered the new year extremely excited about the recent assay results and very much looks forward to further advancing the project throughout 2021.
Gregory A. Lang
President and CEO
April 7, 2021
PRESIDENT AND CEO’S MESSAGE 29