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NOVAGOLD Reports Excellent 2016 Results: Advances toward Final Environmental Impact Statement for Donlin Gold


NOVAGOLD Reports Excellent 2016 Results: Advances toward Final Environmental Impact Statement for Donlin Gold

  • Donlin Gold is nearing the end of the Environmental Impact Statement (EIS) process as the project’s lead permitting agency, the U.S. Army Corps of Engineers (the “Corps”), works on the final EIS
  • NOVAGOLD’s strong balance sheet, $105 million in cash and term deposits as of November 30, 2016, is more than sufficient to complete the Donlin Gold project permitting process

January 25, 2017 - Vancouver, British Columbia – NOVAGOLD RESOURCES INC. (TSX, NYSE MKT: NG) today released its year-end 2016 financial results and provided 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 year ended November 30, 2016 are presented in the consolidated financial statements and annual report filed on Form 10-K 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 2016, NOVAGOLD achieved the following milestones:

  • Materially advanced permitting and technical work at Donlin Gold across the board: < >Six-month public comment period on the draft EIS completed by the CorpsAll draft EIS comments have been read, reviewed, and separated into discrete categories < >The Corps held working sessions attended by all cooperating agencies to address comments on key topicsThe Corps is reviewing the comments to determine how to address each one; will include additional information and make revisions to the EIS as appropriateThe Corps’ schedule envisages the final EIS to be published in early 2018Other permitting applications and submissions have been concurrently advanced with state and federal agenciesExperienced technical teams at Barrick and NOVAGOLD continued to explore alternatives to enhance the value of the project and reduce initial capital expendituresAndy Cole, a seasoned Barrick executive, was appointed General Manager of Donlin Gold
  • Progressed Galore Creek project design; completed Phase 1 Galore Valley integrated planning study
  • Strengthened partnerships with local stakeholders and community partners through extensive outreach: < >Donlin Gold completed over 30 village visits in the Yukon-Kuskokwim (Y-K) region and participated in numerous local conferences, fundraisers and eventsActively promoted youth education and workforce development by sponsoring students to attend training programs and facilitating internships through Calista subsidiariesGalore Creek provided bursary awards for Tahltan members pursuing post-secondary educationYear ended
    November 30, 2016
    $ Year ended
    November 30, 2015
    $ General and administrative expense (1)20,17919,922Share of losses – Donlin Gold8,81911,016Share of losses – Galore Creek1,149392Studies and evaluation-366Total operating expenses30,14731,696Loss from operations(30,147)(31,696)Other income (expense)(3,422)(103)Loss for the period(33,846)(31,952)Loss per share, basic and diluted(0.11)(0.10)Cash and term deposits105,274126,731Total assets408,261433,584Total liabilities107,998104,288

    (1) Includes share-based compensation expense of $10,263 and $9,488 for the year-ended November 30, 2016 and 2015, respectively.

    Liquidity and Capital Resources

    During 2016, cash and cash equivalents decreased by $11.5 million and term deposits decreased by $10.0 million. The total decrease in cash and term deposits of $21.5 million was primarily related to $11.7 million used in operating activities for administrative costs, and $9.7 million to fund our share of the Donlin Gold and Galore Creek projects. As previously acknowledged, we believe that these balances are sufficient to cover the anticipated funding at the Donlin Gold and Galore Creek projects in addition to general and administrative costs through completion of permitting at the Donlin Gold project. The term deposits are denominated in U.S. dollars and held at two Canadian chartered banks.

    2017 Outlook

    In 2017, we expect to spend approximately $23 million, including $11 million for general and administrative costs, $10 million to fund our share of permitting expenditures at the Donlin Gold project and $2 million at the Galore Creek project. Funding requirements for our share of joint Donlin Gold studies with Barrick will be determined later in 2017.

    NOVAGOLD remains dedicated to five strategic goals: to advance the Donlin Gold project toward a construction/production decision; continue to enhance the value of the Galore Creek project; maintain a healthy balance sheet; maintain an effective corporate social responsibility program; and evaluate opportunities to monetize the value of Galore Creek.

    Conference Call & Webcast Details

    NOVAGOLD’s conference call and webcast to discuss these results will take place on January 26th, 2017 at 8:00 am PT (11:00 am ET). The webcast and conference call-in details are provided below.

    Webcast:   www.novagold.com/investors/events/
    North American callers: 1-866-426-5215
    International callers: 1-704-908-0398
    Conference ID:   49661317

    The webcast will be archived on NOVAGOLD’s website for one year.  For a transcript of the call please email info@novagold.com.


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