Safety First: NOVAGOLD Implements Strong COVID-19 Precautionary Measures at Both its Offices and with Barrick Gold at Donlin Gold
Initiates Project Optimization Drill Program, Receives Multiple State Permits and Authorizations, and Maintains Strong Financial Position
? In order to minimize the risk posed by COVID-19, NOVAGOLD implemented a wide-ranging set of policies at its offices in Salt Lake City and Vancouver, and in conjunction with Barrick Gold Corp. (“Barrick”) at the Donlin Gold LLC (“Donlin Gold”) office in Anchorage and project site, designed to ensure the safety and wellbeing of all employees, contractors, and people associated with them.
? Three drill rigs were mobilized at the Donlin Gold site for the project’s largest drill program in 12 years with 80 holes planned totaling 22,000 meters to be drilled in the ACMA and Lewis deposit areas, but as a result of travel restrictions and other COVID-19 measures in the region, the drill program will be temporarily paused and go into care and maintenance until it is safe for our employees and contractors to return to site.
? Donlin Gold received the final State Right-of-Way (ROW) lease for the buried natural gas pipeline, the final easements for the access road and fiber optic cable, as well as land leases, land use permits, and material site authorizations for proposed transportation facilities on State lands.
? NOVAGOLD continued to maintain a strong treasury with $140.7 million in cash and term deposits at the end of the first quarter, with $75 million in additional receivables from Newmont expected in 2021 and more to follow; NOVAGOLD continues to execute on a conservative financial plan to advance the Donlin Gold project up the value chain.
April 1, 2020 - Vancouver, British Columbia – NOVAGOLD RESOURCES INC. (“NOVAGOLD” or “the Company”) (NYSE American, TSX: NG) today released its 2020 first quarter financial results and an update on its flagship Donlin Gold project in Alaska, which NOVAGOLD owns equally with Barrick.
Details of the financial results for the quarter ended February 29, 2020 are presented in the consolidated financial statements and quarterly report filed April 1, 2020 on Form 10-Q with the SEC that is available on the Company's website at www.novagold.com, on SEDAR at www.sedar.com, and on EDGAR at www.sec.gov. All amounts are in U.S. dollars unless otherwise stated and all resource and reserve estimates are shown on a 100% project basis.
In the first quarter 2020 and more recent global events, NOVAGOLD wanted to highlight the following achievements and updates:
? COVID-19
? NOVAGOLD’s most important objective is to secure the health and safety of its employees, partners and contractors. In that regard, to reduce risk, our office employees have been asked to work from home, avoid all non-essential travel, adhere to good hygiene practices, and, if they must visit the office, engage in social distancing. NOVAGOLD and its partner Barrick Gold, through Donlin Gold LLC, have implemented a wide-ranging set of policies consistent with the State of Alaska’s requirements, recommendations, and precautions for State activities and aimed at achieving the same objectives at the project site including: screening all employees and contractors visiting the project site prior to their departure and periodically during their stay; should any individual exhibit symptoms of illness, they will be evaluated to determine if they need to be isolated and evacuated from site; implementation of more frequent sanitization practices; regularly conducting safety meetings designed to address sound hygiene and sanitization practices; and requesting all employees to monitor their health and consult the health professionals if feeling any symptoms of illness.
? In addition, Donlin Gold LLC has reached out to Calista Corporation (Calista) and The Kuskokwim Corporation (TKC), Donlin Gold’s Native Corporation partners and owners of the project’s subsurface and surface rights, respectively, to offer help and assistance with COVID-19 related issues at this great time of need. ? While the 2020 Donlin Gold drill program preparations and work commenced in February, as a precautionary measure and to align with the State of Alaska Department of Health and Social Services recommendations, travels restrictions and other COVID-19 measures in the region, the drill program will temporarily pause and the project site will go into care and maintenance until it is safe for our employees and contractors to return to site.
? NOVAGOLD and Barrick advanced technical work on Donlin Gold:
? The partners commenced the project’s drill program, encompassing 80-holes planned totaling 22,000-meters in the ACMA and Lewis resource areas, with the objective of validating recent geologic and resource modeling concepts and testing potential extensions of high-grade zones focused on early-life mining that have the potential to add value.
? We continued to advance the multi-year site investigation program that commenced in mid-2019 as part of the project’s dam safety certification application.
? With key Federal and State permits in hand, Donlin Gold secured additional State permits:
? In early January, the Alaska Department of Natural Resources (ADNR) Division of Mining, Land, and Water (DMLW) issued the final land leases, land use permits, and material site authorizations for the proposed transportation facilities on State lands and the final easements for the access road and fiber optic cable.
? On January 17, 2020, the ADNR issued the final State ROW lease for the buried natural gas pipeline to provide fuel to power the remote project site.
? Donlin Gold, together with Calista and TKC, continued their long-standing community engagement during the quarter:
Donlin Gold worked with TKC, the State of Alaska and Alaska Native Tribal Health Consortium in an initiative to upgrade, as well as improve health and safety standards, of water and sewer services in Middle Kuskokwim area communities.
? In a partnership with TKC, the Village of Crooked Creek, and the Napaimute Tribe, Donlin Gold funded and provided technical data to extend and maintain the ice road on the Kuskokwim River - greatly improving safety and access to nearby remote communities.
? Donlin Gold delivered a project update with TKC CEO and President, Andrea Gusty, at the TKC Middle Kuskokwim Gathering in Aniak, where 10 villages were represented.
? Donlin Gold hosted and sponsored a regional basketball tournament in January at Bethel High School where nine communities participated. Bethel is approximately 140 miles from Donlin Gold and is the closest major town to the project.
President’s Message
Continuing to advance Donlin Gold in the climate of COVID-19
While many important milestones were achieved during the first quarter 2020, a great deal of that fine work is overshadowed by the stark backdrop of the spread of COVID-19. That was particularly the case in the latter part of the quarter when it became clear that the world, as we knew it, was changing.
NOVAGOLD treats all matters related to the health and safety of its employees with the utmost urgency and thus addressed the challenges and the dangers posed by COVID-19 by immediately instituting specific operating and social guidelines at both of its offices and, together with Barrick, at Donlin Gold. The key elements of the office policies relate to strongly encouraging everyone to work from home and maintain rigid rules for social distancing, hygiene and travel restrictions.

At Donlin Gold, Barrick and NOVAGOLD instituted a comprehensive set of testing for symptoms of COVID-19 prior to traveling to the project site, as well as new health, hygiene and behavior guidelines implemented for those working at the project site designed to protect individuals from contracting or spreading the virus. As an additional precautionary measure and to align with the State of Alaska Department of Health and Social Services, travel restrictions and other COVID-19 measures in the region, we will temporarily pause the drill program and reduce activities to care and maintenance until it is safe for our employees and contractors to return to site. We are committed to maintaining vigilance during this pandemic and continue to enforce all the appropriate guidelines to ensure everyone’s safety and wellbeing.
Building Value for a Unique Asset
NOVAGOLD strongly believes that Donlin Gold is a one-of-a-kind asset, unique in our industry. There are several reasons for that description. First, with approximately 39,000,000 ounces of gold in measured and indicated mineral resources1, we believe it is nearly impossible for this endowment to be replicated given the scarcity of such projects and the lack of new discoveries in the world. Second, its grade, averaging 2.24 grams per tonne1 is more than twice the industry average grade2. Third, considering that its stated resources are contained in only three kilometers of an eight-kilometer mineralized belt, and with only a small portion of the land package having been explored, Donlin Gold could well command district-sized exploration potential. Fourth, its location in Alaska, with the State’s history of support for responsible mining and mine development, provides the kind of jurisdictional safety that is a key differentiator, especially during this era of political and economic fragility. And, of course, we are truly blessed to have time-tested Native Corporation partners who share our vision of building value for their future generations of stakeholders in this game-changing project.
All of these attributes clearly render Donlin Gold unique. Consequently, any value-enhancing work that we undertake on the property should be value-accretive to the owners. In 2017, Donlin Gold carried out a drill program that encountered distinct significant high-grade intercepts within the reserve pit and high grades identified outside the planned pit boundaries. With a history of growth through drilling, these results are indeed indicative of the exceptionally strong resource potential that exists. In 2019, Donlin Gold commenced a multi-year site investigation program required to collect additional geotechnical information to advance the engineering work on the tailings facility and other water retention and diversion structures from a feasibility level study to a final construction package, as required for the project’s dam safety certificate application to ADNR. The safety of the tailings facility constitutes one of Donlin Gold’s most important priorities as the partners continue to ensure that the work is done to the highest standards and according to best design practices.
The partners have mobilized three drill rigs at the Donlin Gold site for the project’s largest drill program in 12 years, with 80-holes totaling 22,000-meters planned in the ACMA and Lewis deposit areas to validate recent geologic and resource modeling concepts, and test potential extensions of high-grade zones focused on early life mining that have potential to add value. The program will provide the necessary data needed for the owners to decide on the next steps to update the Donlin Gold feasibility study and initiate the engineering work necessary to advance the project design from feasibility level to basic, then detailed, engineering before reaching a construction decision. As a precautionary measure and as a result of travel restrictions and other COVID-19 measures, the owners have decided to temporarily pause the drill program. The project site will go into care and maintenance and the drill program will resume once it is safe for our employees and contractors to return to site.
Early in 2020, NOVAGOLD reached a number of milestones with the issuance of key transportation and energy infrastructure approvals for the Donlin Gold project including the final state land authorizations and the final state ROW lease for the buried natural gas pipeline to provide fuel to power the remote project site. The receipt of the ROW lease and other land leases and permits for the transportation facilities are the most recent among the last few key permits needed to proceed with activities at Donlin Gold. With federal permitting complete and state permitting progressing, the focus is on the drill program to advance and integrate scoping-level optimization work into a study that will serve as the basis for an updated project development plan.
Given the significant advancement of all permitting activities and substantial amount of project de-risking that the owners have undertaken over the years, the timeline for the development of Donlin Gold resides in the hands of the partnership. NOVAGOLD is working with Barrick’s management and technical team to advance the project in a financially disciplined manner with a strong focus on engineering excellence, environmental stewardship, a strong safety culture and continued community engagement.
Strong upside and well-protected downside
It is well known that the value of Donlin Gold is highly leveraged to the price of gold. What few people realize, however, is the fact that NOVAGOLD’s value in a downside scenario is also exceptionally well protected. In the Chairman’s Q&A section of our 2019 Annual Report, which was written around the New Year, we address NOVAGOLD’s positioning in terms of its downside protections. The following excerpt discusses the potential concerns our employees, shareholders, contractors, partners and communities may have regarding the economic security of the Company as we continue to focus on responding to the COVID-19 global health crisis:
14. Do you still see NOVAGOLD as well-positioned in terms of its downside protections, or is the gold market past the need for that?


1 Donlin Gold data as per the 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 National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”).
2 2019 average gold grade of open-pit and underground deposits with gold as primary commodity and over 1 Moz in measured and indicated resources is 1.05 g/t, sourced from S&P Global Market Intelligence.

One should never be past thinking in terms of downside protection. Indeed, as a seasoned player in the natural resources space who strongly believes in the notion that if an investor has covered the downside the upside will take care of itself, let me actually highlight the downside protections we’ve put in place for NOVAGOLD’s owners in order to ensure that your company, effectively an unexpiring warrant without time decay, is positioned to prosper.
As a pure play on a federally permitted mining project – on Native Corporation land already designated for mining – we believe Donlin Gold will constitute the largest single pure gold mine in the world, in one of the few parts of the world where mining is welcomed and the rule of law isn’t a novelty. The project has tremendous support at the local, state, and federal levels.
And we have a well-managed, tier-one partner in Barrick Gold. Moreover, as of February 29, 2020, NOVAGOLD had a balance sheet that, between cash on hand and receivables, was approximately $241 million, with maybe more to come. With federal permitting behind us, and Galore Creek monetized, NOVAGOLD’s current obligated burn rate is nominal at a time when we are flush with cash.
What this means is that, were the gold price to go down before they revive in full, and should we face challenging times, we simply could not go out of business under any reasonable scenario. While I don’t believe that the fundamentals of gold, or the industry, require a washout to set the stage for gold’s next big move higher, these head fakes do happen. Shakeouts before a blistering move upward are classic chart patterns. Think of a V-bottom and you may recall a few. This is assuredly not a scenario our shareholders should fear – the Electrum team having been in that movie several times over the years and knowing well from firsthand experience how to position our portfolio companies in order to identify opportunity in market displacements.
We have thus deliberately positioned NOVAGOLD in such a manner that we likely would not need to raise capital, even if the resumption of the gold bull market is delayed by a temporary downturn in gold price – including a sharp one. If anything, under certain circumstances, the company might determine that its shares are worth more than the metal itself and buy some back. Put differently, an investor can expect that, when gold is acknowledged to have put in its bottom, we will not have diluted our fully intact optionality on our reserve base. For an investor, these robust downside protections provide a true differentiator.
Dedication to strong partnerships with stakeholders
NOVAGOLD and our project partners are committed to enhancing and engaging in community relationships to preserve traditional ways of life and support economic development for the benefit of Calista and TKC shareholders and the Y-K region. One partnership that speaks directly to the health and safety of our employees and our communities is recent assistance with construction of an ice road on the Kuskokwim River, which acts as a highway connecting these remote villages to one another. In partnership with TKC, the Village of Crooked Creek, and Napaimute Tribe, Donlin Gold was the lead sponsor of a project to construct and maintain the upper portions of an ice road on the Kuskokwim River from Crooked Creek to Sleetmute and provided technical data to assist the roadbuilder, including aerial photographs and ice measurements along the river. For the first time, the road extended as far north as Sleetmute, greatly improving safety and access to nearby communities for residents in remote locations, creating economic opportunity for local trade, and increased community contact for sport, social activities and academics. In many of these communities, difficulty with air travel in winter can lead to life-threatening scenarios and isolation from other communities, family and friends. Through Donlin Gold, NOVAGOLD is proud to have played a part in bringing this safety lifeline to communities in the Middle Kuskokwim. Upon its completion in February, the Kuskokwim ice road was a record length of 355 miles long running from just south of Bethel to Sleetmute.
Also having a positive impact on communities farther from the project, Donlin Gold was invited to host and sponsor a regional basketball tournament in January at Bethel High School where nine villages participated. Bethel is approximately 140 miles from Donlin Gold, is the closest major town to the project, and is a significant port and regional hub in southwestern Alaska. Additionally, Donlin Gold is working with TKC, the State of Alaska and Alaska Native Tribal Health Consortium on a health initiative to upgrade, as well as improve health and safety standards of water and sewer services in Middle Kuskokwim area communities. As part of its ongoing community engagement, Donlin Gold attended and gave a presentation with TKC’s CEO and President, Andrea Gusty, at the TKC Middle Kuskokwim Gathering in Aniak where 10 villages were represented.
In January, Pete Kaiser, 2019 Iditarod Champion and Donlin Gold-sponsored musher, won the Kuskokwim 300 regional dog mushing race. In addition, Donlin Gold sponsored four Iron Dog teams for the annual snowmobile race in February. These popular events are an important part of the culture and way of life in remote southwestern Alaska.
A balance sheet with integrity
A unique feature and benefit of being a NOVAGOLD shareholder is not only owning a piece of one of the rarest assets in the world but also a Company with a strong balance sheet and projected expenses that are comfortably within means and which has not needed to go back to the market in more than eight years. In 2020, we are projecting expenses of $31 million. With approximately $140.7 million in cash and term deposits as of February 29, 2020, the management team can focus entirely on moving Donlin Gold forward without the distraction of needing to raise additional capital. In addition to a strong balance sheet, we expect to receive an additional $75 million from Newmont in 2021 and another $25 million in 2023, or a further $75 million contingent payment on top of that which we would receive if and when the Galore Creek project owners approve a construction plan. Based on these commitments and projected needs, the Company believes it has sufficient funds to advance Donlin Gold without the need to raise capital until markets, and indeed the rest of the world, are considerably healthier and a construction decision is made.
In periods of turmoil, we believe companies like NOVAGOLD present an investment opportunity that stand above most others. As a pure play on one of the world’s largest and highest-grade known open-pit gold deposits - now federally permitted for development in a geo-politically safe jurisdiction with well-established support for responsible mining – we believe NOVAGOLD is an incredible value proposition, now more than it has been in years, particularly in light of its exceptional leverage to the price of gold and great downside protection. As global gold production reaches “peak gold”, we believe Donlin Gold’s scarcity value can only get better as the industry depletes its established reserves and begins to seek out replacement in a world where major discoveries have become nearly extinct.
I wish to thank the experienced team of professionals at NOVAGOLD, Donlin Gold, and Barrick for their steadfast dedication to advancing the project. We are also thankful to our Native Corporation partners, Calista and TKC. Their strong support and commitment to Donlin Gold have been the foundation of our success. The permitting achievements this quarter would not have been possible without the dedication of the professionals at the Alaska Department of Natural Resources to advance permits and approvals for the project in a transparent as well as environmentally and socially responsible manner with strong adherence to best practices. To our Board of Directors, I wish to thank all of you for your continued counsel and adherence to best governance practices which have truly set the Company apart in the junior development space.

To our shareholders, having come to know many of you, I thank you all for your unwavering support, engagement, patience, and dedication. It is not during times of good fortune when you learn who your friends are but in times of difficulty. Our shareholders have understood and supported NOVAGOLD’s investment thesis and have shown remarkable steadfastness as we continued to deliver on our strategy. For that and much more, we are truly grateful to you.
We at NOVAGOLD pledge to remain true to our promise to build on Donlin Gold’s unparalleled value and growth propositions, and to remain true to our principles to do it right and continue to make our shareholders proud. As we begin a new quarter during a challenging era, please know that we wish all of our stakeholders, who we sincerely consider to be our friends and family, a safe and healthy future.
Sincerely,
Gregory A. Lang President & CEO

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