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Letter to Shareholders
After some outstanding results in 2016 and a great start to 2017, NOVAGOLD is in excellent shape, remaining steadfast in its commitment to its shareholders as well as local stakeholders
and community partners as we advance Donlin Gold up the value chain. A permitted high-quality, long-life deposit in Alaska with
time-honored partnerships with the Native Corporations is worth its weight in gold. As shareholders ourselves, we have the utmost conviction that NOVAGOLD, with its crown jewel Donlin Gold, is the best way investors can obtain leverage to gold.
The Most Valuable Single Pure Gold Asset in the World
At NOVAGOLD, we find ourselves in a unique situation. Exploration spending in the gold industry is at a 10-year low. New, large, higher-grade, long-life assets are nearly extinct. For the longest period in my professional career, an absence of quality
gold discoveries, combined with plummeting grades, has created a structural challenge for our industry. And when you consider that it now takes an average of two decades for a mining asset to go from discovery to production, it’s clear that such assets, especially those in safe jurisdictions, will be in high demand.
Given these staggering changes that we have seen in the gold industry and trends that will most likely continue, Donlin Gold may go into development at just the right time. With an endowment of approximately 39,000,000 ounces of gold in measured and indicated mineral resources – at 2.2 grams per tonne, double the industry average – Donlin Gold is in a class all its own. With 1,500,000 ounces of planned annual gold production in the first five years of operation and approximately 1,100,000 ounces per year during its projected 27-year life, Donlin Gold would be the largest pure gold mine in
the world.
And though the resource is already one of the largest in the sector, only a portion of the district has been explored. Excellent exploration upside exists at Donlin Gold and on the broader land package around the project which we control with our partner, Barrick Gold (Barrick). Future exploration success could either further expand the mine life – already measured in decades – or increase its future production profile. Or perhaps both.
What this means is that Donlin Gold is potentially one of the most valuable pure gold assets in the world, and is located in
what’s not only the safest jurisdiction in the world, but also one
in which responsible mining development is welcomed – in part because it will both diversify Alaska’s economy and support the self- determination objectives of the Alaska Native Claims Settlement Act.
Unwavering Commitment
Maintaining our strategy of advancing and de-risking the Donlin Gold project, our focus in 2016 was twofold: first, continue working with federal and state agencies to advance permitting; second, work with our partner Barrick on enhancing the value of the project – in order to provide shareholders with the greatest risk/reward story for gold investment.
The first component of this approach was accomplished as the cooperating agencies and stakeholders of the Yukon-Kuskokwim (Y-K) region engaged in the draft Environmental Impact Statement (EIS) public review process. The local communities surrounding our projects have lived off this land for generations; they simply want to ensure that Donlin Gold is developed responsibly and in a way that provides tangible benefits. And we share those values.
With an unwavering commitment to engineering excellence and a laser-like focus on safety and environmental protection, another major milestone was achieved with the conclusion of the Donlin Gold draft EIS six-month public comment period last May. This effort, led by the U.S. Army Corps of Engineers (the “Corps”), involved 17 meetings throughout the Y-K region and in Anchorage, providing
a platform for stakeholders’ questions and comments on the draft EIS. More than 500 letters and public statements were received
from individuals, Alaska Native Corporations, business groups, communities, the State of Alaska, and various federal agencies.
By year-end, all the comments were read, reviewed, and separated into discrete categories. The Corps and AECOM, its EIS contractor, are preparing responses to these comments, refining alternatives to be considered, and identifying additional information necessary to complete the final EIS. Per its latest schedule, available at, the Corps anticipates publication of the final EIS in early 2018.
The second component of our approach is made possible by Donlin Gold’s high grades and low projected operating costs. We’re presently conducting studies assessing a number of development

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