NOVAGOLD Reports Major Progress in Advancing Donlin Gold up the Value Chain
Press Release –
- Reinforces strong partnership with Donlin Gold’s Native Corporation stakeholders
- Advances permitting within budget and on schedule, reaching key milestone in preparation of Donlin Gold’s preliminary draft Environmental Impact Statement (EIS)
VANCOUVER, BRITISH COLUMBIA–(Marketwired – July 9, 2014) – NOVAGOLD RESOURCES INC. (TSX:NG)(NYSE MKT:NG) today released its second quarter financial results and updates for its flagship 50%-owned Donlin Gold project in Alaska and its 50%-owned Galore Creek copper-gold-silver project in British Columbia.
Details of the financial results for the three and six months ended May 31, 2014 are presented in the consolidated financial statements and quarterly report filed on Form 10-Q with the SEC that will be 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 second quarter 2014, NOVAGOLD reported the following accomplishments:
- Donlin Gold secured extension of the Surface Use Agreement with The Kuskokwim Corporation (TKC). The agreement now coincides with the terms of Calista Corporation’s Exploration and Mining Lease and incorporates the projected mine life of Donlin Gold
- The U.S. Army Corps of Engineers (the “Corps”), the lead agency for the Donlin Gold EIS, and cooperating agencies’ completed the alternatives identification, a major step in the permitting process
- Donlin Gold participated in a number of community-related activities, supporting local youth in leadership endeavors and executing on its workforce development strategy in the region
- NOVAGOLD and its partner Teck Resources Limited continued the technical work related to evaluating opportunities to enhance the economics of the Galore Creek project
President’s Message
NOVAGOLD is approaching a half-way mark in Donlin Gold’s anticipated permitting timeline which began in the third quarter of 2012. In the second quarter of 2014, we continued to make progress on the preparation of the preliminary draft EIS for agency review. Preparation of an EIS under the National Environmental Policy Act (NEPA), which governs the process by which most major projects in the United States are permitted, is considered to be the most time-consuming part of permitting. During the quarter, the Corps and cooperating agencies’ successfully completed the EIS alternatives identification process, establishing a reasonable range of alternatives to be evaluated in the EIS. The alternatives comprise variations on certain mine site facility designs, local transportation options, and power supply options. Preparations of the remaining components of the preliminary draft EIS are well underway and expected to be completed over the next two quarters. This includes the alternatives development and the analysis of their potential environmental impacts. The Corps anticipates that all outstanding environmental baseline data required to complete the EIS will be compiled by the end of the third quarter. Donlin Gold is working simultaneously with the other permitting agencies on other major permit applications, such as air quality, water discharge and usage, gas pipeline, wetlands and dam safety. These achievements are a testament to the tremendous amount of work that has gone into permitting to date, and I am very proud of the headway we have made so far.
In early June, we announced that Donlin Gold LLC and TKC reached an updated, long-term agreement extending Donlin Gold’s rights to use the surface lands owned by TKC. Now, this important agreement, which covers the mine life of the Donlin Gold project, is in alignment with the duration of the existing Exploration and Mining Lease with the Calista Corporation, owner of the mineral rights to the lands encompassing the Donlin Gold project. The agreement with TKC sets in place a mutually-beneficial undertaking that will have a far-reaching impact not only on the local communities, but on all of our stakeholders who will participate in the development of this major gold project. Notably, the agreement provides a mechanism for direct compensation to TKC for annual surface use and mine operation. It also gives preference to TKC for certain contracts, hiring and training opportunities to TKC shareholders, as well as funds scholarships for TKC shareholders and their descendants. Furthermore, the agreement includes a coordinated and consultative approach regarding annual project planning, reclamation and the preparation of a subsistence harvest plan for affected surface lands. This agreement represents an important milestone in the advancement of Donlin Gold toward development and production. We truly appreciate our partnership with the Alaska Native Corporations and look forward to a prosperous future for all stakeholders.
As one of the gold industry’s highest-quality deposits, Donlin Gold will without a doubt provide tremendous economic benefits to its stakeholders for many decades to come. Donlin Gold’s key attributes in terms of size (39 million ounces of gold resources in measured and indicated category), grade (averaging 2.2 grams per tonne), production profile (expected to average greater than 1,000,000 ounces of gold per year for the life of mine) and jurisdictional safety (Alaska is the second largest gold-producing state in the U.S.) make NOVAGOLD a truly institutional quality investment. Furthermore, the project’s significant exploration potential, manifested by the fact that its current mineral endowment covers only three kilometers of the eight-kilometer-long mineralized corridor, provides sufficient indication that Donlin Gold, once built, should provide investors with many years of wealth-generating opportunities.
Over the last three years, we have been focusing on carefully managing our financial resources and ensuring that we have sufficient cash to execute on our objectives to permit the Donlin Gold project. With over $176 million in cash and term deposits at the end of the second quarter, our treasury is more than sufficient to do that and continue to enhance the value of Galore Creek.
Donlin Gold continues to work hand-in-hand with its community partners on workforce development and educational initiatives, local sponsorship activities, as well as village visits. In the second quarter, Donlin Gold partnered with the Kuspuk School District, Alaska Construction Academies, and EXCEL Alaska in sponsoring a youth Academic and Trades Decathlon in Aniak. At this successful event, 145 students had an opportunity to learn from experts in various trades and competed individually in math, science, geography and keyboarding. During the quarter, the Donlin Gold team continued with its long-standing tradition of community outreach by visiting 10 villages. Town hall meetings were held in each village with a viewing of the Donlin Gold project video, narrated in both English and the local Yup’ik language. In partnership with the State of Alaska and the Yukon-Kuskokwim Health Corporation, Donlin Gold participated in the Kids Don’t Float Campaign distributing personal flotation devices and safety messages to kids along the Yukon-Kuskokwim River. Finally, Donlin Gold continued its support for both the Iron Dog snow machine race and the Iditarod sled dog race, sponsoring two racers in each event. Our camp staff volunteered at the Iditarod’s Cripple checkpoint, spending four nights assisting the race crew and mushers as they made their way north to Nome.
At Galore Creek, the drilling results from the 2012 and 2013 programs are being incorporated into a model to advance mine planning and project design. During the quarter, we conducted workshops aimed at initiating a review process to evaluate an integrated plan for mining, waste disposal and water management to enhance the economics of the Galore Creek project. We expect this effort to further improve the value and marketability of the Galore Creek project, which we continue to work on monetizing, in whole or in part, to strengthen our balance sheet and focus primarily on the permitting of Donlin Gold.
As always, we thank our Board of Directors, employees and project teams for sharing a vision and working tirelessly to meet our goals on all fronts. Most importantly, we are forever grateful for the continued interest and support of our shareholders, as well as governments, Native Corporations and First Nations communities of the jurisdictions in which we operate.
