NovaGold receives $75M from Newmont Corporation
NovaGold has received $75 million from Newmont Corporation as per the 2018 Share Purchase Agreement in which NovaGold agreed to sell its 50% interest in the Galore Creek project in British Columbia, Canada. Under the terms of the July 2018 Agreement, total consideration pay- able by Newmont was up to $275 mil- lion. NovaGold received $100 million upon closing and $75 million in July. The remaining amounts related to the 2018 sale of the GCP are payable as follows: $25 million upon the earlier of: completion of a project feasibility study prepared by or for GCP, or five (5) years from the closing date on July 27, 2023; and, $75 million contingent upon con- struction approval of the Galore Creek project. The latest payment from Newmont will increase NovaGold’s cash posi- tion by $75 million, which consisted of approximately $108 million of cash and term deposits as of May 31, 2021. As a result of the successful sale of the Galore Creek project, NovaGold materially increased its treasury to greater than $150 million, providing the Company with a strong finan - cial foundation to advance the Donlin Gold project owned in 50/50 partner- ship with Barrick Gold. The Company expects its existing financial resources and future incom - ing payments to be sufficient to exe - cute on its business plan without re- sorting to raising more capital until a construction decision on Donlin Gold is made. All amounts are in U.S. dollars. NovaGold is a precious metals com- pany focused on the development of the Donlin Gold project, owned 50/50 with Barrick Gold Corporation, in Alaska, one of the safest mining juris- dictions in the world. With approximately 39 million ounces of gold in the measured and indicated mineral resource categories, inclusive of proven and probable min- eral reserves (541 million tonnes at an average grade of approximately 2.24 grams per tonne in the measured and indicated resource categories on a 100
Photo Courtesy Donlin Gold Donlin Gold is expected to produce an average of more than 1 million ounces per year over a 27-year mine life.
percent basis), Donlin Gold is regarded to be one of the largest, highest-grade, and most prospective known open pit gold deposits in the world. Donlin Gold is expected to produce an average of more than 1 million ounces per year over a 27-year mine life. The Donlin Gold project has sub- stantial exploration potential beyond the designed footprint which cur- rently covers three kilometers of an approximately eight-kilometer-long gold-bearing trend. Current activities at Donlin Gold are focused on State permitting, opti- mization work, and community out- reach. Donlin Gold is a committed part- ner to the Alaska Native commu- nities both surrounding the project and within the State as a whole. An important factor that distinguishes Donlin Gold from most other mining assets in Alaska is that the project is
located on private land that was se- lected by Calista Corporation (“Calis- ta”) and The Kuskokwim Corporation (“TKC”) at the direction of the Yu- kon-Kuskokwim region Elders and was designated for mining activities five decades ago. Donlin Gold has entered into life- of-mine agreements with Calista, which owns the subsurface miner- al rights, and TKC, a collection of 10 village corporations, which owns the surface land rights and is committed to providing employment opportu- nities, scholarships, and preferential contract considerations to Calista and TKC shareholders. These agreements include a revenue-sharing struc- ture established by the Alaska Native Claims Settlement Act of 1971 which resolved Alaska Native land claims, allotting 44 million acres of land for use by Alaska Native Corporations.
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The Alaska Miner
Summer 2021
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