Donlin Gold 2021 Drill Program Continues to Advance as Planned
Community Support Expanded to Counter the Effects of Global Pandemic
Key Permits Secured and Robust Financial Position Maintained

A total of 28 holes have been drilled at the Donlin Gold project (representing approximately 8,650 meters of length drilled) out of the 64 planned for 2021 (representing a total of approximately 20,100 meters of length to be drilled). Four drill rigs are operating. The owners expect to release assay results to the market in the coming months.
Donlin Gold, together with its Alaska Native Corporation partners, Calista Corporation (“Calista”) and The Kuskokwim Corporation (“TKC”), expanded their engagement with the local communities.
With key Federal and State permits in hand, Donlin Gold continued to advance additional State permits, including water rights and the natural gas pipeline State Right-of-Way (“ROW”).
NOVAGOLD continues to maintain a strong treasury amounting to $107.6 million in cash and term deposits as of May 31, 2021, and it has receivables from Newmont amounting to $75 million due in July 2021 and an additional $25 million due in July 2023.
VANCOUVER, British Columbia, June 29, 2021 (GLOBE NEWSWIRE) -- NOVAGOLD RESOURCES INC. (“NOVAGOLD” or “the Company”) (NYSE American, TSX: NG) today released its 2021 second quarter financial results and an update on its Tier One1 gold development project Donlin Gold (“Donlin Gold” or the “project”), which NOVAGOLD owns equally with Barrick Gold Corporation (“Barrick”).

Details of the financial results for the quarter ended May 31, 2021 are presented in the consolidated financial statements and quarterly report filed June 29, 2021 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 mineral resource and mineral reserve estimates are shown on a 100% project basis.

Second Quarter Highlights and Updates:

In order to minimize the risk posed by COVID-19, NOVAGOLD is continuing to maintain a wide-ranging set of health and safety policies at its offices in Salt Lake City and Vancouver, and, in conjunction with Barrick, at the Donlin Gold office in Anchorage and project site. These measures are designed to ensure the safety and well-being of all employees, contractors, and people associated with the Company.
The Donlin Gold project camp has been re-opened safely with four drills currently operating.
A total of 28 holes (representing approximately 8,650 meters of length drilled) as of June 26, 2021, out of the 64 planned for the 2021 program have been drilled to date (representing a total of approximately 20,100 meters of length to be drilled). The program is expected to:
Build upon a successful 2020 drill program that produced results supporting updates to recent geologic modeling concepts, validate mineralization continuity, and test for extensions of high-grade zones in both intrusive (igneous) and sedimentary rocks.
Provide necessary information to support a decision to move to the upcoming feasibility study, subject to a formal decision by the Donlin Gold LLC Board, and initiate the engineering work necessary to advance the project design before reaching a construction decision.
Numerous camp improvements were completed: equipment purchased, kitchen facilities expanded, a new recreation area furnished, electrical work upgraded, sleeper capacity increased, camp facilities remodeled, a new warehouse added, and core logging and cutting facilities and equipment were upgraded.
Donlin Gold, together with its Native Corporation partners Calista and TKC, carried out a wide range of community engagement and support initiatives:
Finalized Shared Value Statements with two additional villages from the Yukon-Kuskokwim (“Y-K”) region for a total of seven Shared Value Statements (Akiak, Sleetmute, Napaimute, Crooked Creek, Napaskiak, Nikolai, and Tuluksak) to date. These agreements include educational, environmental, and social initiatives to help support villages.
Held the Lower Kuskokwim School District’s annual College and Career fair where more than 42 vendors and 100 students attended the virtual event held in April 2021.
Launched a Subsistence Community Advisory Committee (“SCAC”) which will strengthen the role of Donlin Gold in guiding subsistence activities within the Kuskokwim River drainage.
NOVAGOLD sponsored and participated in the Mining for Miracles Pie Throw, an annual fundraising event in support of the BC Children’s Hospital Cellular and Regenerative Medicine Centre.
On May 27, 2021, the Alaska Department of Environmental Conservation (“ADEC”) Commissioner upheld the State of Alaska’s Section 401 Certification under the Clean Water Act that had been granted to Donlin Gold in 2018 after a thorough, diligent and transparent review by State and Federal agencies of the proposed project development plan and its relationship with the surrounding environment. The Commissioner’s decision was appealed in Alaska’s Superior Court on June 28, 2021, by a San Francisco-based activist law firm, Earthjustice. Donlin Gold strongly believes that the Commissioner’s decision to uphold the 401 Certification validates the project’s stakeholders’ commitment to advance the Donlin Gold project in a safe and environmentally responsible manner for the benefit of all Alaskans.
President’s Message

Family and Safety First

Following a successful 2020 season with zero COVID-19 cases on site, together with a renewed and sustained commitment to the health and safety of our workforce members and local communities, the Donlin Gold project camp was safely re-opened in March and four drill rigs have been deployed.

Local community involvement in the project lies at the core of both Barrick’s and NOVAGOLD’s philosophy. Approximately 70% of Donlin Gold direct hires for this year’s drill program are Alaska Natives and we are pleased to report that for the 2021 season, Donlin Gold hired employees from 20 Y-K communities. In an area marked by high unemployment and fewer job choices than in urban environments, the work experience and skills training that Donlin Gold provides is highly significant and appreciated. Of equal importance, being that we share the objective of protecting the health of all Alaskans, ahead of the camp re-opening in March, Donlin Gold consulted with its partners Calista and TKC, as well as the home communities of Donlin Gold employees regarding health and safety – particularly in terms of disciplined adherence to stringent COVID-19 protocols. Employees will again have mandatory COVID-19 testing prior to traveling to the Donlin Gold project camp and, upon arrival, will follow social distancing and other safety protocols implemented in response to the pandemic. Moreover, all workforce members have been required to continue following these protocols upon return to their respective communities and are encouraged to bring Donlin Gold’s safety practices into their home villages.

Current Drilling Continues to Build Upon the Successful 2020 Program

There are four drill rigs operating at the project site in the ACMA and Lewis deposit areas, with 28 holes drilled as of June 26, representing approximately 47% of the planned 64-hole program. We are excited to be building upon a successful 2020 drill program which included significant higher-grade gold intersections indicative of the impressive nature of this deposit. Ahead of the 2021 field season, Donlin Gold completed numerous camp improvements, such as the purchase of heavy equipment, expanded the kitchen facilities, furnished a new recreation area, upgraded electrical work, increased sleeper capacity with sixteen new units, expanded and remodeled camp facilities, added a large new warehouse, and upgraded core logging and cutting facilities and equipment. After the 2021 drill season, we anticipate that, on the completion of the updated geologic model and, subject to a formal decision by the Donlin Gold LLC Board, we will turn our attention to the upcoming feasibility study with Barrick.

We all recognize that Donlin Gold already enjoys an incredible foundation of attributes to build upon and that, as the project’s expected mine life may already be measured in decades, we have a great responsibility to all stakeholders to do things right from the start and not cut any corners. With approximately 39 million ounces of gold in measured and indicated mineral resources grading 2.24 grams per tonne2, Donlin Gold’s scale and grade, at twice the industry average3, are simply exceptional. Donlin Gold is indeed unique in the combination of its attributes, particularly given the scarcity of new major gold discoveries over the past decade and the safe jurisdiction in which it is located – Alaska, a Tier One jurisdiction4. While we are focused on the drill program, permitting, and modeling work, we have not lost sight of one of the project’s most important attributes: Donlin Gold’s truly exceptional exploration potential. It is notable that the project’s gold endowment is contained within only three kilometers of an eight-kilometer mineralized belt, and that even this only represents five percent of the total property. And let’s not forget that, in all the past drill programs at Donlin Gold, we have encountered among the best assay results for an open-pit gold project in the industry.

In 2020, NOVAGOLD engaged Wood Canada Limited (“Wood”) to perform a review of the costs and other assumptions used in the Donlin Gold 2011 Technical Report (as defined below) to meet the Company’s reporting requirements. Based on that cost review, Wood determined that updating the 2011 Technical Report using 2020 costs and new gold price guidance results in no material change to the mineral resources or mineral reserves. See below in “NI 43-101 Technical Report” for additional detail regarding the “Donlin Gold Project, Alaska, USA, NI 43-101 Technical Report”, with an effective date of June 1, 2021 (“2021 Technical Report”).

Note that the 2021 Technical Report utilizes the existing mineral resources model and the same technical information from the previous Donlin Gold 2011 Technical Report with 2020 costs and adjusted gold price and is separate from the upcoming feasibility study that is expected to commence, subject to Donlin Gold LLC Board approval, once we have completed the 2021 drill program and geologic model update incorporating all the latest drill data, optimization work and trade off studies since 2011.

Deposits that boast Donlin Gold’s special combination of incredible attributes are unusual and highly coveted. And not just by investors. Given recent examples of governments around the world either physically or, through legislation or other means, effectively seizing assets, we are grateful that Donlin Gold is located in Alaska where there is a time-tested culture of respect for responsible and sustainable mine development and the rule of law. We are confident that NOVAGOLD in partnership with Barrick, Calista and TKC, will advance this unique project up the value chain in a technically advanced, safe, environmentally sound, and socially responsible manner.

Community Partnership is Integral to our Culture

As a Company, we aspire to make a positive difference in the Alaskan communities in the Y-K region. That’s why we give community members a chance to be heard. Through that exchange of ideas and approaches, we develop lasting solutions to improve the way of life in the communities. For example, in March Donlin Gold, together with Calista and TKC, hosted a water rights information call with interested tribes in response to a request for additional engagement on the topic, which is a regular practice for Donlin Gold. A half-dozen tribes participated. Donlin Gold is fortunate to enjoy deep-rooted partnerships with Calista and TKC, owners of the mineral and surface rights, respectively. The project’s location on private land, specially designated for mining activities, as enshrined in the 1971 Alaska Native Claims Settlement Act (“ANCSA”), represents a key attribute that distinguishes Donlin Gold from most other mining assets. Our commitment to a meaningful consultation with the local communities throughout the period of project permitting and development has been affirmed over decades. Donlin Gold has made progress in formalizing its community relationships with Shared Value Statements to date covering seven villages from the Y-K region (Akiak, Sleetmute, Napaimute, Crooked Creek, Napaskiak, Nikolai, and Tuluksak). These agreements include educational, environmental, and social initiatives to help provide support for these villages, most of them remote, particularly at a time of need.

In March 2021, the Thomas Lodge in Crooked Creek suffered a major fire. Substantial damage occurred and Donlin Gold aided with labor and materials to get the building back in order by May. The Thomas Lodge is the only lodging facility in the village and in proximity to the project site. NOVAGOLD and Donlin Gold provided financial contributions to help fund repairs for this vital community asset prior to the busy summer season.

Access to training and education are two of the important areas in which we collaborate with our Native Corporation partners. The Lower Kuskokwim School District’s annual College and Career fair was held virtually in April, with a record number of vendors and strong student participation. Donlin Gold also sponsored the annual Best in the West Competition at the Kuskokwim Campus of the University of Alaska to encourage and support the leaders of tomorrow.

Furthermore, the first sub-committee of the Donlin Advisory Technical Review and Oversight Committee (“DATROC”) was officially launched in early May. The DATROC’s objective is to establish and maintain a well-defined process for communication, dialogue and problem-solving needed among the partners. Calista, TKC, and Donlin Gold initiated planning to establish the DATROC in 2018. The SCAC, a sub-committee under the DATROC, will receive and distribute information on Donlin Gold’s plans, operations, and monitoring activities. It will also communicate information regarding local subsistence activities and traditional knowledge as it relates to information shared by Donlin Gold. Lastly, it will serve as a forum for stakeholders to discuss issues of concern related to the potential impact of Donlin Gold’s plans, operations or monitoring activities on subsistence activities, wildlife or habitat, as well as assist them in developing and updating plans for land and waters affected by the project. As part of the new SCAC, the “Let’s Talk Donlin” website – hosted by Calista, TKC, and Donlin Gold – was launched as a community information hub that also accepts feedback on community issues and concerns. These partnerships, activities, and programs demonstrate NOVAGOLD’s and Barrick’s longstanding and deep-rooted commitment to sustainable and responsible development for the benefit of all stakeholders in the Y-K region.

NOVAGOLD also sponsored and participated in the Mining for Miracles Pie Throw in May, a fundraising event in support of the BC Children’s Hospital located in Vancouver, British Columbia. Each year, senior leaders from across the industry are paired up in a friendly fundraising competition and whoever raises the most money earns the right to toss a pie at the other person. I was happy to participate in this event and help raise funds for the BC Children’s Hospital Cellular and Regenerative Medicine Centre.

Advancing Permits Diligently and Responsibly

During the second quarter, Donlin Gold, together with Calista and TKC, continued to provide support to State agencies in their efforts to advance remaining permits and approvals needed for the project. Several key permit decisions were made in support of the project in the quarter. The ADEC Commissioner released his decision in late May to uphold the Donlin Gold 401 Certification that was granted in 2018 after a lengthy, thorough, and diligent review of the proposed project development plan and its relationship with the surrounding environment by State and Federal agencies. The 401 Certification was formally appealed to the ADEC Commissioner in June 2020, and the ADEC Commissioner referred the appeal to an Administrative Law Judge (ALJ) for review. The ALJ opinion was issued on April 12, 2021, ahead of the ADEC Commissioner’s decision to uphold the 401 Certification of the Federal Clean Water Act Section 404 permit. The Commissioner’s decision to uphold the 401 Certification, as expected, was appealed in Alaska’s Superior Court on June 28, 2021, by a San Francisco-based activist law firm, Earthjustice.

We believe the ADEC Commissioner’s decision to uphold the 401 Certification for the Donlin Gold project was the right outcome. Donlin Gold strongly believes that the Commissioner’s decision to uphold the 401 Certification validates the project stakeholders’ commitment to advance the Donlin Gold project in a safe and environmentally responsible manner for the benefit of all Alaskans. The scientific work done to date on the 401 Certification, in parallel with the continuing collection of data and analysis, will be verified through extensive, open and transparent monitoring as required by State permits. Simply put, we will not operate the Donlin Gold project without demonstrated compliance with the State’s water quality standards. Throughout the multi-year permitting process, Donlin Gold engaged with all relevant parties to answer their questions and address their concerns. We look forward to continuing that practice.

The ADNR published a public notice for comment on Donlin Gold’s 12 applications for water rights associated with the mine site and transportation facilities. This notice for comment closed on December 15, 2020. Water rights encompass local surface water sources and groundwater to be used for process water, dust control, fire protection, and potable water. In March 2021, the ADNR introduced a second two-week public notice period, which closed on March 26, 2021. The ADNR is expected to issue final decisions granting the water rights applications in 2021.

In April 2020, the ADNR Division of Oil and Gas agreed to reconsider its decision on the State ROW agreement and lease authorization for the buried natural gas pipeline. Under the reconsideration, ADNR issued a revised Consideration of Comments document for additional public review on September 10, 2020. This document describes how the ADNR considered public input that was solicited in the ROW review, including how cumulative effects are addressed in the decision. The comment period on that document ended in November 2020. The ADNR is expected to re-issue the ROW agreement and lease authorization in 2021. We look forward to continuing our constructive engagement with all the appropriate Federal and State agencies in Alaska.

Continual shareholder engagement has long been a hallmark of NOVAGOLD’s approach to aligning company strategy with the input from our shareholder base. During the 2021 proxy season, NOVAGOLD placed calls to shareholders holding more than 90% of the Company’s issued and outstanding common shares. Approximately 72% of the Company’s issued and outstanding shares entitled to vote were represented at the Annual and Special Meeting of Shareholders held virtually on May 12. All proposals were approved, and all 10 director nominees re-elected.

NOVAGOLD’s strong financial position of approximately $108 million in cash and term deposits as of May 31, 2021, will soon be enhanced by an additional $75 million to be received from Newmont in July, resulting from the 2018 sale of our 50% interest in the Galore Creek project. We expect our existing financial resources and future incoming payments to be sufficient for NOVAGOLD to carry out its business without resorting to raising more capital until a construction decision is made.

For NOVAGOLD, the word “partnership” also implies a long-term, trust-based relationship with its joint-venture partner, Barrick. Barrick’s management team has been responsive and engaged in the project for as long as they have been involved, and NOVAGOLD is fortunate to have an experienced partner with whom to work alongside as the Donlin Gold project builds momentum.

I wish to thank the project teams at NOVAGOLD, Donlin Gold, and Barrick for their hard work, professionalism, expertise, and perseverance in both safely and effectively meeting our goals on all fronts as we work to overcome the numerous challenges of the global pandemic. We also extend our sincere appreciation to the various State agencies for their hard work and professionalism throughout the permitting activities for the Donlin Gold project.

I would also like to express my deep gratitude to our Native Corporation partners, Calista and TKC, for their longstanding support and unwavering commitment to our shared vision of advancing the Donlin Gold project – one of the largest, highest-grade, and most prospective open-pit gold deposits in the world.

Once again, I express genuine gratefulness to my colleagues on the NOVAGOLD Board for their unwavering support and commitment to upholding the best social, environmental, and governance practices. I truly enjoy serving with all of you.

NOVAGOLD is thankful for the dedication, engagement, knowledge sharing, and encouragement of our shareholders – many of whom have been holders for a decade or more. We are appreciative and humbled by the trust you put in our team, and we take this responsibility very seriously. NOVAGOLD remains focused on maximizing returns for its shareholders and stakeholders alike in a measured, safe, and socially responsible manner. I wish you all the best of health.

Sincerely,

Gregory A. Lang
President & CEO

Financial Results

in thousands of U.S. dollars, except for per share amounts

Three months ended May 31, 2021 $ Three months ended May 31, 2020 $ Six months ended May 31, 2021 $ Six months ended May 31, 2020 $
General and administrative expense (1) 4,992 4,387 10,321 9,101
Share of losses – Donlin Gold 4,198 3,700 6,166 5,268
Total operating expenses 9,190 8,087 16,487 14,369

Loss from operations (9,190) (8,087) (16,487) (14,369)
Interest expense on promissory note (1,480) (1,400) (2,914) (3,160)
Accretion of notes receivable 854 824 1,708 1,648
Other income (705) 1,694 (784) 2,581
Income tax expense (264) (528)
Net loss (10,521) (7,233) (18,477) (13,828)

Loss per share, basic and diluted (0.03) (0.02) (0.06) (0.04)

At At
May 31, 2021 Nov. 30 2020
$ $
Cash and term deposits 107,587 121,906
Total assets 213,296 224,441
Total liabilities 115,168 113,714
(1) Includes share-based compensation expense of $2,095 and $1,715 in the second quarter of 2021 and 2020, respectively, and $4,137 and $3,476 in the first six months of 2021 and 2020, respectively.

For the second quarter ended May 31, 2021, NOVAGOLD’s share of Donlin Gold losses increased from $3.7 million in 2020 to $4.2 million in 2021. In 2020, Donlin Gold LLC temporarily paused the drill program for April through mid-May as a precautionary COVID measure.

General and administrative expense increased from $4.4 million in 2020 to $5.0 million in 2021 primarily due to higher share-based compensation and legal costs.

In the first six months of 2021, total cash, cash equivalents and term deposits decreased by $14.3 million of which $6.3 million was used in operating activities for administrative costs and working capital changes, $8.1 million was used to fund Donlin Gold and $0.7 million related to withholding taxes paid on vested performance share units (PSUs). Effects of exchange rate changes increased cash by $0.8 million.

For the six-month period in 2021, net cash used in operating activities of continuing operations increased by $0.9 million, primarily due to lower interest income and higher legal costs, partially offset by changes in working capital. Net cash used in investing activities included a $1.2 million increase in Donlin Gold funding due to timing of the 2021 drill program. Term deposits decreased by $5.2 million, with the proceeds deposited in interest-bearing savings accounts. Net cash used in financing activities related to withholding taxes paid on vested performance share units.

As of May 31, 2021, we had cash and cash equivalents of $51.8 million and term deposits of $55.8 million. The term deposits are denominated in U.S. or Canadian dollars and are held at Canadian chartered banks. In July 2021, we expect to receive $75 million from the first note receivable from Newmont in relation to the 2018 sale of our 50% interest in the Galore Creek project. Additional capital will be necessary if a decision to commence engineering and construction is reached for the Donlin Gold project.

NI 43-101 Technical Report

In 2020, the Company retained Wood Canada Limited (“Wood”) to update content in its previously filed “Donlin Creek Gold Project, Alaska, USA, NI 43-101 Technical Report on the Second Updated Feasibility Study,” effective November 18, 2011, and amended January 20, 2012 (“2011 Technical Report”). The 2021 Technical Report is an updated summary of the results of the 2011 Technical Report in the form of a National Instrument (NI) 43-101 technical report for the Donlin Gold project in Alaska, USA, and is titled “Donlin Gold Project, Alaska, USA, NI 43-101 Technical Report”, with an effective date of June 1, 2021. Wood completed an exercise to verify which content in the 2011 Technical Report remains current, and what was required to update the report content with the latest information. Updated content includes operating costs, capital costs, tax rates, long term gold price, and the economic analysis. Additionally, work done on the property since 2011 with respect to exploration, drilling, permitting, and minor mine design changes as a result of recent permitting activities are summarized in the 2021 Technical Report. A data verification exercise was completed by each Wood Qualified Person (“QP”) co-authoring the report. This included a September 2020 site visit by two of the report QPs; review of the geologic data, geologic model, and resource model; review of metallurgical test work; review of designs for mining, processing, and infrastructure, including minor design updates; update of capital and operating cost estimates utilizing a combination of cost indices and vendor quotations; and an updated economic analysis.

The Wood review exercise determined that the report updating exercise resulted in no material change to the Mineral Resources or Mineral Reserves, so the Company will be voluntarily filing the 2021 Technical Report on System for Electronic Document Analysis and Retrieval (SEDAR) to update the scientific and technical information on the property and to support NOVAGOLD’s disclosure on the Donlin Gold project.

Wood reviewed the geologic and resource models that supported the 2011 Technical Report, including comparing them to data from recent drilling programs, and determined that they continue to be adequate and suitable to be used for a Mineral Resource estimation. Using updated cost inputs from the first calendar quarter of 2020, a gold price of $1,500 per ounce, and the geologic and resource models utilized in support of the 2011 Technical Report, the contents within an updated optimized pit shell did not show a material change to the Mineral Resources stated in the 2011 Technical Report. Therefore, the Mineral Resources are considered current and are unchanged. They continue to have an effective date of July 11, 2011.

Similarly, using updated cost inputs, a gold price of $1,200 per ounce, and the geologic and resource models utilized in support of the 2011 Technical Report with appropriate modifying factors applied for Mineral Reserve estimation, the previous Mineral Reserve ultimate pit was contained within an updated optimized pit shell. Therefore, the Mineral Reserves remain current and are unchanged. Because the Mineral Reserves are supported by an updated economic analysis they have an effective date of April 27, 2021.

Outside of verifying the Mineral Resource and Mineral Reserve estimates, the primary efforts in the 2021 Technical Report were financial and permitting updates. This includes updates to estimated capital costs, operating costs, reclamation and closure costs, royalties, taxes, and economic analysis, as well as current status of the permits.

Updated capital costs are based on first calendar quarter 2020 pricing (cost indices and current commodity pricing and equipment quotes) applied to the engineering designs and material take-offs from the 2011 Technical Report, except for minor changes made during permitting in the operations water treatment plant and the natural gas pipeline.

As a result of the content updates, the total initial capital cost estimate is $7,402 million, which is an increase of $723 million, a 10.8% increase, compared to the 2011 Technical Report total initial capital cost estimate. Likewise, the total sustaining capital estimate is $1,723 million, which is an increase of $219 million, a 14.6% increase, compared to the 2011 Technical Report total sustaining capital estimate.

The 2011 Technical Report operating costs were updated to first calendar quarter 2020 by updating key cost drivers like energy, labour, consumables, and freight. No material changes to project designs, schedules, or productivities were made; consequently, the manning schedules and consumables remain unchanged. The updated estimated life of mine (“LOM”) operating costs total $19,289 million, which is $5.90/t mined, $38.21/t processed, or $635/oz gold sold.

The economic evaluation of the Donlin Gold project was updated using the following inputs:

A production plan based on the 2011 Technical Report of 53,500 t/d open pit gold mine with ore processing by means of flotation, pressure oxidation, and cyanidation. The pit designs and Mineral Reserves were based on the Measured and Indicated Mineral Resource estimates that were verified as remaining current. Annual LOM gold production averages 1.13 Moz per year over a production life of 27 years, including 1.46 Moz per year for the first five full years of production.
$1,500/oz gold price
Current land and royalty agreements
Operating and initial and sustaining capital costs updated to first calendar quarter 2020
Tax payments in accordance with the Tax Cuts and Jobs Act (“TCJA”) enacted in December 2017 and effective January 1, 2018
$292 million LOM contributions for reclamation, closure, and financial assurance
Financing has been assumed on a 100%, all equity, stand-alone basis
Escalation/inflation has been excluded
No salvage is assumed at the end of operations
Based on the economic evaluation, the Donlin Gold project generates positive before and after-tax economic results. Total after-tax cash flow is $13,145 million, after-tax NPV5 is $3,040 million, and the after-tax internal rate of return is 9.2%. After-tax payback is achieved 7.3 years following the start of production.

The 2021 Technical Report will be filed on SEDAR in 2021. The 2021 Technical Report was prepared by Wood and the following contributors, each of whom is a Qualified Person under National Instrument 43-101 (“NI 43-101”): Henry Kim, P.Geo., Senior Resource Geologist, Wood Canada Limited; Mike Woloschuk, P.Eng., VP Global Business Development & Consulting, Wood Group USA, Inc.; and Kirk Hanson, MBA, P.E., Technical Director, Open Pit Mining, Wood Group USA, Inc.

2021 Outlook

We continue to anticipate spending approximately $31 to $35 million in 2021, which includes $18 to $22 million to fund our share of expenditures at the Donlin Gold project ($11 million for the 2021 drilling program, camp improvements and studies; $7 million for permitting, community engagement and administration; and an additional $4 million for other studies contingent upon mid-year approval by both owners) and $13 million for corporate general and administrative costs).

NOVAGOLD’s primary goals in 2021 are to continue to advance the Donlin Gold project toward a construction decision; maintain/increase support for Donlin Gold among the project’s stakeholders; promote a strong safety, sustainability, and environmental culture; maintain a favorable reputation of NOVAGOLD, its governance practices, and its project among shareholders; and manage the Company treasury effectively and efficiently, including streamlining the corporate structure. Our operations primarily relate to the delivery of project milestones, including the achievement of various technical, environmental, sustainable development, economic and legal objectives, obtaining necessary permits, completion of feasibility studies, preparation of engineering designs and the financing to fund these objectives.