NOVAGOLD

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Ladies and gentlemen, my pleasure in welcoming Mr. Greg Lang, who's president and CEO of Novagold, more of a traditional corporate presentation rather than the Q and A, Q&A we had in the last session. Greg, please. Thank you. And thanks everyone for taking a few minutes to get an update on Nova Gold. Nova Gold is really focused on one thing, and that's advancing the Donland Gold Project up in Alaska. And as I'm sure everybody would know, our presentation does contain some forward-looking materials. So why would you think about Nova gold now, aside from the obvious fact that gold is near record prices? Nova Gold, we own 60% of the Donland asset up in Alaska. This will be a big mine when it's built over a million ounces a year for a mine life of almost 30 years. Permitting is essentially done. The federal permitting is in hand, and we're wrapping up the remaining state permits. Got great grade at 2.25 g. It's one of the highest grade open pit deposits in the industry, about twice the industry average. We're located up in Alaska, a great mining jurisdiction and a jurisdiction that appreciates responsible mining. Jurisdictional risk is one of the key issues facing the industry today, and being up in Alaska, we don't have that fear. Don's also got tremendous remaining exploration potential, so it's a great asset in a great location. And the timeline to production is solely in the hands of the owners. It's interesting to look at where Nova Gold is today. A year ago we were about a $2 stock, $250 and we were partnered with Barra. About this time a year ago we announced a transaction that really transformed Nova Gold. We teamed up with the Paulson Company and paid a billion dollars to buy Barrack's interest in Donlan. With this transaction, Paulson put in $800 million. And we put in $200 billion and this increased our stake in Donlan from 50 to 60%, really giving us control of the asset. You look at where we are today, where we were a year ago, and it's really gratifying to see the market response to this transaction. When you understand where Nova Gold is today, it's helpful to look back a few years. For many years we were one of the better performing stocks in the GDX. Jay is shown on this illustration. But what happened, our partner Barra at the time shifted their focus. They went from gold to copper in a copper project in Reco Dick, and that put Donlan on the back burner. So our share price just slowly decayed. And since the transaction has been announced and we now have a defined path forward and a partner who shares our vision. Our stock prices regained its outperformance in the GDXJ. You know, I touch on gold. A little bit today because I think most people who would be at this conference have a generally constructive view on where gold price is going. The world, as we all know, is a very unsettled place right now, and I think that alone will continue. To push gold prices higher. On the supply side, you know, there are pressures there. Grades are declining, production has peaked, and the central banks continue to buy. This is just a look at a bull market and what it really might look like. This is the Dow Jones over a 50 year timeline. If you go back, and many of us are, I'm certainly old enough to remember the crash of '87 and the impact that had, it is hardly noticeable now, and that's what The gold price is doing, and I think we've had a little bit of a pullback, but we've recovered some of the losses, and I think the secular upward trend will continue in the coming years. The other interesting thing that Nova Gold really brings to our shareholders in the Donland project is leverage. These numbers look at the returns that Nova Gold's Donland project will generate at a variety of gold prices. We're sitting here today at over $4500 an ounce and its NPV of almost $24 billion for the project, and we own 60% of that. It's got good returns even at gold prices as low as $2500 an ounce. You know, it's a tremendous asset and it, it brings us leverage in a place we know we can keep the fruits of that leverage. Mentioned earlier, Donlan's big M. Over a million ounces a year through its life. 1st 10 years, 1.3 million ounces. At today's prices, the margin that Donlin will enjoy is approaching $4000 an ounce, and you think about that and the cash flow this mine will generate, the payback, even with a significant investment, will come quickly. Grade is important in a mining asset. You look at Donlan at 2.25 g open pit. It's great grade for an open pit mine, and it gives the project low life of mine cash costs, about $900 an ounce for the life of the mine, lower in the 1st 10 years when the grade is a little bit higher. So grade is key, and Donlon enjoys that. There are a lot of mines built in recent years with grades about 1 g. It's Donlan's high grade that gives it a low cost profile. Another really interesting and very exciting part about the Donlan asset is, you know, we've got over 40 million ounces in and around the ACM and Lewis ore bodies. That represents less than 3 kilometers of an 8 kilometer gold bearing system. We've got gold bearing drill holes all up and down. The strike length of this mineralized trend, and we know from some deep drilling that the project is open-ended at depth and a long strike. When the time is right, we will resume exploration drilling at the site. The other aspect that's important here is this illustration where the mineralized belt is, is about 5% of our total landholdings, which are all substantially unexplored. Permitting permitting is often something people worry about events beyond your control. Well, we've completed our permitting. We wrapped up the federal permitting process a few years ago. We had a joint record of decision issued by the Army Corps of Engineers and the Bureau of Land Management. It was really the first time two federal agencies approved together a mining project, and I think that speaks really to the very collaborative way in which we approached the permitting. The state permitting, you see a tabulation of the permits we have in hand. The only remaining permit is for the tailings dam and other water retention structures. We've submitted design packages to the state of Alaska, and they're very quick to turn these things around. Alaska is a jurisdiction that really appreciates mining. And this is just, you know, to that earlier comment about Alaska appreciates mining, and we were up with our new owners, which was John Paulson and his team last summer, met with the governor, and he put out a, you know, really one of his posts on this, and he is absolutely supportive of the mine. You know, we've been. We started permitting under a different administration. We completed it under another different administration, and we've always stayed non-political, you know, the current, everybody asks me often, does the current changes in Washington help you? And I said, no, we didn't need anybody's help. We got this permitted under a Democratic. Administration and I think part of what was very key to our successful permitting is we're on private land that's owned by two Alaska Native corporations and we've got life of mine agreements with them in place and they've really got an owner's interest in seeing this project go forward and I think that was really, you know, we've involved them in every step of the way through the permitting, and I think that was really one of the keys to the successful outcome that we enjoyed. This is a little bit more about the native corporations. Cholita owns the underlying mineral rights, and TKC owns the surface rights. And they've, you know, we've worked with them very steadily through the permitting. Right now, we're working with them on programs to prepare residents in this part of Alaska for employment at the mine. So that when as construction gets underway in a year or so, they'll be able to seek employment. Donlan is located in a very impoverished part of Alaska. In fact, it's one of the poorest parts of the entire country, so they've really got no other economic engine on the horizon like Donlan. They really want this mine and they really need this mine for their economic self-determination. The management team has been down this road before. Richard Williams, who is our chief operating officer, years ago I worked with Richard at Barrack. Richard was the project director for the Pueblo Viejo mine in the Dominican Republic. That mine has many similarities to the Donlan, and at the time it was the largest capital ever put into a single gold mine of about $4 billion. So he's a person that's built big gold mines. In fact, he was responsible for many of the construction activities in Brack over his 30-year tenure. So we've got the people that know how to get these things done. Frank Arcase is our project director. He brings decades of experience with large projects all over the world, including projects in far flung remote places like the Arctic where we plan to be. Some of the highlights from our first quarter, we never stop our community engagement and government affairs activities. These are important relationships. We don't take them for granted, so we stay in touch with the Alaska senators Murkowski and Sullivan. We're routinely in contact with the governor's office, and they've always stated whatever help this mine needs, we want to see it happen. So we continue to work with them on any issues that come up. And we continue to work with Chalista and TKC both getting out in their communities, helping prepare people for the mines, and addressing any concerns that might come out of some of the community meetings. So we're very active in that. It's one of the key activities up in Alaska for us right now. Yeah, earlier this year we announced that we hired Fleur to prepare the bankable feasibility study. Fleur was actually the lead firm on the Pueblo Viejo project. We know them well, and when we selected a firm, we wanted somebody that could not only do the feasibility study but had the depth and experience to take the project all the way through construction and ultimately into commissioning. We've also engaged specialist contractors under the floor umbrella. Donlan is a big, complex project. We've engaged Hatch, who is an industry leader in autoclave technology, and they will do the pressure oxidation in the oxygen plant for us. Worley operates up in Alaska, and their specialty is transporting hydrocarbons. And WSP build many power plants, so these are all under the floor umbrella. These are all industry leading companies that have the capacity to do what we're doing and experience in cold environments. Also in the 1st quarter, and we're following an interesting development. Glenn Farn is seeking financing to build a natural gas pipeline from the North Slope into the Cook Inlet. This could be very important to Donlan for two reasons. One, Donlan, we envisioned importing gas into the Cook Inlet and putting it in a pipeline to the mine site. We've signed a non-binding letter of intent with Glenfarm. They would like to supply gas to the site. And also build and operate our gas pipeline, which suits us very well. That would take a big piece of the infrastructure off of our capital requirements and put it onto a third party, and we would have an off-take agreement with them. The permitting for the gas pipeline was completed with the permitting for the project, so the next steps we'll just continue to advance our discussions with Glenn Farn. I think given the current environment and the energy markets, now is as good a chance as ever that that gas pipeline can become a reality. So this is really some of the milestones coming up right now. Our main focus is a bankable feasibility study by Flor, and that will define our project capital needs going forward. In the next couple of weeks, we'll be announcing that we've appointed a financial advisor just so that they can prepare to help us raise the money we need to build this mine, and I think in the current gold price environment. And a mine in a safe jurisdiction, raising the capital for this will come very easily. Nova Gold, we're in great financial shape. We've got a treasury of just under $400 million. We anticipate spending about $100 of that to retire the Barrack promissory note. This note had a face value of about $165 million when we negotiated the purchase price that got Barrack out of Donlan. We also negotiated paying this note out in 18 months at a significant discount, so about $100 million. This was a promissory note that was payable. Out of cash flow from the mine, but it made sense for us to do that, and we intend to pay that off before the year is done. No sense paying it off early because it's not interest bearing at this stage. It's a flat $100 million. So we'll be doing that later in the year and clearly you look at our expenditures this year and what we anticipate spending at Don. We will have more than a sufficient treasury to see this through completion of the feasibility study, arranging financing, and ultimately to a construction decision. Nova Gold is really an institutional quality gold stock. Many of our top shareholders have been with us for years and have stood by us through thick and thin and low gold prices, disenchanted partner, and so on. So it's great to see their patience rewarded and a lot of them have added to their positions in the company. In the last couple of years, it's interesting to note one of our largest shareholders is Paulson Advisors. That's John Paulson's family office, and they've been shareholders in the company over 15 years, and now we jointly own the asset with them. So they've been great supporters every step of the way, and we're glad to have them. And then Capital Group is a London-based firm, and they've, you know, come in in a big position. Fidelity has been with us a long time. Leato is the Agnelli family office and a great shareholder base, and it's really, I think, great to have long-term sticky money like we do backing the company. I think that really concludes my remarks. I think I've got a couple of minutes for questions. Thank you. Thank you. Any questions from the floor, please, ladies and gentlemen? Any questions? Otherwise I'll, I'll ask a quick one if I may. Obviously a, a great project, a very large project which will come with very large capex bills. You're in a comfortable position already having a majority ownership is one of the potential ways to help funders get another partner in, so you reduce your 60%. And secondly, I think like some major infrastructure, 316 miles of gas pipeline, 500 kilometers, would you look to have that off balance sheet booted? Somebody else owns that. Yeah, I think a couple of thoughts on that. We believe that when the feasibility study is done, Donlan will be a much greater value, as will Nova gold, and I think we would not contemplate taking on a partner until we've got the feasibility study done. We've done enough work to know it's going to be a robust returns, particularly if you take a view of these prices. So we don't rule out bringing on a partner, but just not right now. You mentioned the gas pipeline. That's an obvious piece of the infrastructure that we could. You know, move over to a third party and really take it out of the operating costs. Take it out of the capital cost and put it into the operating costs, which I think given a lot of the people that we talked to about Don think jeez, that's a lot of money for a gold mine, and it is. So anything we can take off of our balance sheet and put it on someone else's, whether it's financing the mining equipment, oxygen plants, and so on, we will consider those when we're putting together the total package to finance the mine. But I think putting it in perspective, a lot of people get a little leery of a multi-billion dollar capital project in gold. Well, it's not. Common in gold, I accept that, but certainly it's common in the copper industry. And if you look at Donlan on a capital intensity per ounce of reserves or per ounce of production, it's really very simple. And at 1.5 million ounces a year for the first few years, it's a big pie that we could divide if we ever thought so in the future. But for right now we've got the people in the treasury to take this forward to completion of the feasibility study. Great, thank you, ladies and gentlemen, sorry, one very quick question if you may please from the floor. I don't know if this is kind of already been asked, but, if something goes wrong with the pipeline with the right of way, disputes and so on, is there a Plan B for power and, logistics, and then what happens to the NPV with those higher costs? OK, well, I think, a couple things to point out. The pipeline is permitted and the right of way is approved, so I think we're in fine shape there. There was a group that litigated the right of way, but that went to the Alaska Supreme Court and the court ruled in our favor. So the pipeline as it's permitted, is ready to go. But there is a Plan B, and that's originally we were going to just barge heavy fuel oil in and generate power with fuel oil. We still have that option. If for some reason we don't build the pipeline or the mine construction is before then, that has always been an option, and a lot of the power plants out there that we've built in the past are dual fuel plants, both reciprocating engines that can operate on fuel oil, or you can convert them to gas. So it certainly is a Plan B. And with cash costs under $1000 an ounce, you can absorb a little bit of extra operating costs by carving out some of the capital. Always good to have low cash costs, I'm afraid we're out of time, so if you could help me, thank you, thank you, sorry, to Mr. Greg Lang for a great presentation, thank you. Thank you.