NOVAGOLD Reports Third Quarter Results

Press Release

Donlin Gold Continues to Make Excellent Progress Advancing Up the Value Chain

NOVAGOLD Maintains Robust Financial Position

• Geotechnical drilling and field testing are underway to advance permitting of Donlin Gold’s tailings storage facility and other water dams
• The State continues to make progress on key Donlin Gold permits, including land authorizations along the transportation corridor and for the sections of the natural gas pipeline on State lands
• NOVAGOLD’s cash and term deposit balance as of August 31, 2019 remains strong at $152.9 million

VANCOUVER, British Columbia, Oct. 01, 2019 (GLOBE NEWSWIRE) — NOVAGOLD RESOURCES INC. (NYSE American, TSX: NG) today released its 2019 third quarter financial results and updates for its flagship Donlin Gold project in Alaska, which NOVAGOLD owns equally with Barrick Gold Corp. (“Barrick”).

Details of the financial results for the third quarter ended August 31, 2019 are presented in the consolidated financial statements and quarterly report filed 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 third quarter 2019, NOVAGOLD achieved the following milestones:

• With key Federal permits in hand and the receipt of multiple State permits, Donlin Gold LLC (“Donlin Gold”) continued to advance other State permits during the quarter:
  –   The Alaska Department of Natural Resources (ADNR) Division of Mining, Land, and Water (DMLW) issued preliminary land use decisions on January 28, 2019 for the project’s transportation corridor, including the access road and related material sites, airstrip, and upriver Jungjuk Port.  The public comment period for these decisions closed on March 29, 2019.  Final ADNR approvals are anticipated by the end of the year.
  –   ADNR’s Division of Oil and Gas (DOG), State Pipeline Coordinator’s Section issued a preliminary decision to authorize the sections of the pipeline on State lands on January 28, 2019.   The public comment period for this decision closed on March 22, 2019. Final DOG approval is anticipated by the end of the year.
  –   Donlin Gold commenced a geotechnical field program to support the detailed design package to be submitted to ADNR for final approval and issuance of Alaska Dam Safety Certificates.
• NOVAGOLD, as well as Donlin Gold, together with Calista Corporation (“Calista”) and The Kuskokwim Corporation (TKC), its Native Corporation Partners, continued local community outreach in Alaska:
  –   Brought together more than 20 regional organizations to successfully collect, process and remove household hazardous material from remote villages in the Yukon-Kuskokwim (Y-K) region. The latest event took place in Bethel on July 24 when about 80,000 pounds of material was collected.
  –   Continued outreach activities, including attending Calista’s Annual Shareholders meeting in July.
  –   Provided project updates and gathered feedback from shareholders in Kotlik and Kongiganak and met with groups interested in establishing Friendship Agreements.
  –   Supported the City of Aniak’s initiative for community-wide fire safety training and equipment.

President’s Message

Progress across the board
Donlin Gold constitutes a unique asset with which we are truly blessed. With our partner Barrick, your management team and board of directors have advanced this project up the value chain with a resolute strategic consistency. Speaking for NOVAGOLD, all our kept promises and strategic decisions have revolved around our belief that Donlin Gold represents the finest development stage story in the global gold industry. Were we to simply extract our stated resources, this pronouncement would still hold true. As we are convinced that the potential exploration upside is so much greater than what we are dealing with at present, we feel that owning NOVAGOLD is akin to owning a pure play on an emerging major gold district. Our major shareholders are united in their belief that our equity provides an excellent vehicle available to take full advantage of the next leg upwards in both the secular bull market in our favorite metal and a resurgence of gold-related equities. NOVAGOLD’s track record of achievement has also been aided by the good fortune of conducting much of the permitting and technical work necessary to de-risk the Donlin Gold project during a cyclical market correction, thus avoiding entirely the industry’s scourge of being forced to squander at low prices what is, at least what we believe to be in our case, an unparalleled natural endowment.

An impressive bounty
With approximately 39,000,000 ounces of gold in measured and indicated mineral resources grading 2.24 grams per tonne¹, Donlin Gold is not just exceptional in today’s world, but when one takes into account that a project that may well result in the largest gold-producing mine in the world is located in a jurisdiction characterized by a strict adherence to the rule of law, Donlin Gold could well be in a league of its own as a premier gold deposit. Its unique stature is further enhanced by the presently quantified aspect of its gold endowment being contained within three kilometers of an eight-kilometer mineralized belt, all of which represents, in and of itself, a small portion of the overall land package.

Will the next Donlin be found at Donlin?
We believe that great districts are the best place to go hunting for new discoveries. Yet for various reasons, the greater Donlin Gold region has been underexplored.  As with the best mining districts in Nevada and throughout the world, key geologists that have been involved in the project for many years believe that when Donlin Gold’s holdings are explored systematically, the next Donlin may well be found at Donlin. If, like ourselves, you are excited by the possibility of uncovering significant additional resources and perhaps even making new discoveries– especially during an era characterized by a striking paucity of both – then pause and think about that prospect for a moment. Moreover, this bounty is located in Alaska, a State that supports and welcomes responsible development and, as the second-largest gold producing State in the United States, is arguably the safest legal jurisdiction in the world. Combining the right assets, the right management team, and the right jurisdiction we expect NOVAGOLD to be one of the few equities that will represent a “go-to” stock when the market resumes its uptrend.

So far, so great
Our team expects that, once developed, Donlin Gold will provide benefits for all its stakeholders for decades to come. NOVAGOLD is guided by a highly experienced management group with a strong track record of execution and we have taken the time to get things right the first time and not cut any corners. The third quarter was no exception, as NOVAGOLD and Barrick continued to make significant progress in conscientiously advancing the jointly held Donlin Gold project up the value chain. We are continuing to carry out necessary fieldwork, including site investigation to collect additional geotechnical information required for the procurement of the Alaska Dam Safety Certificates. This program consists of geotechnical drilling (core and direct push) and field testing with installation of monitoring instruments; pumping test program in the tailings storage facility area; excavation of test pits; geophysical surveys (seismic refraction and downhole); and laboratory testing. The site investigation information will support a Preliminary Design Package, Detailed Design Package and ultimately the Final Construction Package, each of which will be submitted to the ADNR for final approval and issuance of the Certificates.

The geotechnical field program commenced in May 2019, following the re-opening of the Donlin Gold camp. Good progress had been made prior to a five-week suspension of activities in late July when field personnel were moved to safety as a precaution and to accommodate wildland firefighting operations in the area. Donlin Gold structures and equipment sustained no damage. All personnel returned to the site in early September to resume work on the field program which will continue through the winter and is expected to be completed in 2020.

NOVAGOLD and Donlin Gold also provided support to the ADNR’s Division of Mining, Land, and Water to help advance work on the land use decisions regarding the project’s transportation corridor, including the access road and related material sites, airstrip and upriver port, as well as the DOG’s authorization for construction of the sections of the pipeline on State lands. Final approvals for both authorizations are expected by the end of 2019. With key Federal permits in hand and the timeline fully in the owners’ control, NOVAGOLD and Barrick continue to focus their attention on project optimization toward defining an updated development plan, followed by an advanced feasibility study. We all agree that Donlin Gold must be advanced in a financially disciplined manner while emphasizing recently updated geological data, modern engineering, and with particular attention to strong environmental and social stewardship as well as safety practices.

External affairs and stakeholder engagement are key
NOVAGOLD never takes its social license for granted and continues to work closely with the Donlin Gold team in partnership with Calista and TKC, owners of the mineral and surface rights, respectively, on a variety of local outreach, environmental and educational initiatives. Our third quarter activities included bringing together a group of 20 organizations to sponsor and participate, along with the Delta Backhaul company, in successfully collecting, processing and removing household hazardous material and e-wastes from the remote City of Bethel. About 250 residents took part in the program, collecting some 80,000 pounds of material that will be safely transferred to designated disposal facilities. Spearheaded by NOVAGOLD, Donlin Gold and the Delta Backhaul company, nearly 150,000 pounds of hazardous material have been removed from 14 remote villages on the Kuskokwim River and the City of Bethel over the past year. These various initiatives aptly reflect NOVAGOLD’s steadfast commitment to nurturing strong and collaborative working relationships in the communities in which we operate. We also pursued our ongoing outreach activities with Calista, meeting with tribal councils and key stakeholders in the Yukon-Kuskokwim Delta region, including Donlin Gold attending the Calista Corporation Annual Shareholders meeting in July, providing project updates and gathering feedback from shareholders in Kotlik and Kongiganak, two coastal villages, as well as meeting with various Native groups interested in establishing Friendship Agreements.

Balance sheet
NOVAGOLD’s robust balance sheet – with approximately $152.9 million in cash and term deposits as of August 31, 2019 – gives us great flexibility to further enhance the value of Donlin Gold. This amount does not include an additional $100 million expected to come from Newmont within the next four years, or another $75 million contingent payment that we could receive if the Galore Creek project owners approve a construction plan. Therefore, the Company believes it has sufficient funds to advance Donlin Gold without the need to raise capital until a construction decision is made.

Current gold environment and recent meetings with investors
During the last quarter, gold has made important strides to resume its upward trajectory within what we are convinced constitutes a long-term secular bull market. Though gold is not over-owned by any measure – far from it – we are not alone in this bullish conviction. Leading investors such as Bridgewater Associates’ Ray Dalio, DoubleLine Capital’s Jeffrey Gundlach, and RIT Capital Partners’ Jacob Rothschild, to name a few, repeatedly point out that gold is clearly poised for substantial appreciation in value because of its unique currency characteristics, declining supplies, and due to the highly unpredictable geo-political and economic environment we live in. At the recent Precious Metals Summit in Beaver Creek, Colorado and Gold Forum Americas in Denver, Colorado, where NOVAGOLD participated, we heard clearly from numerous investors that NOVAGOLD is viewed as the very best and most well-conceived option on a large, federally permitted gold project in one of the world’s safest locations for resource development. This notion, along with NOVAGOLD’s strong balance sheet, ultimately supports our view of NOVAGOLD as a unique financial vehicle poised for a substantial value uplift as gold returns to its bull market.

In conclusion, I wish to express my profound appreciation to the experienced group of professionals at NOVAGOLD, Donlin Gold and Barrick. Their hard work and fierce dedication, coupled with the unwavering support and leadership of Calista and TKC, are key ingredients of our success. My gratitude also goes to the various State agencies for their diligent work and adherence to well-established regulatory procedures. And last but not least, I sincerely thank my dedicated colleagues on the NOVAGOLD Board for their incredible support, constant engagement, and commitment to best governance practices.

Gregory A. Lang
President & CEO

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