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 3 In a nutshell, what are the key attributes that have positioned NOVAGOLD to outperform in the next leg of the bull market?
We consider Donlin Gold to be the very definition of unique. That’s a bold claim – but the contention is fairly straightforward. As investors, we have yet to find a development-stage gold asset that compares favorably to Donlin in its combination of size, grade, exploration potential, production profile, all-in cash costs, mine life, and jurisdictional safety. In other words, what we believe to be the greatest undeveloped gold deposit in the world is located in the second-largest gold-producing state – in the safest jurisdiction in the world. It doesn’t get better than that when it comes to adding octane to a portfolio.
4 You place an unusually high regard on what you call a management’s “character.” How does that express itself in NOVAGOLD?
Character is fundamentally about trying to do the right thing rather than the expedient thing. It’s about not losing one’s sense of honor, if one can use that elevated word these days and still get away with it – and, more prosaically, credibility. Doing what you say you’re going to do is of course a wonderful way to maintain that credibility, both personally and professionally. Speaking now for Greg and myself, what does not appear to be in dispute is that we both share a strong commitment to valuing and honoring our word. We know that reputation is hard won and easily lost. If I say that I’m going to do something, I’ll do it. It makes life simpler and allows me to feel – and perhaps actually be – virtuous. It’s also good business. Quaint as that may sound in our increasingly transactional world, this code stems from a deep philosophical attachment to a values-based and purpose-
driven life.
The other thing we haven’t done is over-promise and under-deliver. We’ve told the truth and done everything we said we were going to do. Everything. Before we were approached with the offer to do a capital raising the last time around, in January 2012, the newly minted CEO and Chairman of NOVAGOLD laid out a clear roadmap for our investors – specifically to spin off our Alaskan copper properties. That company, spun off as NovaCopper and now trading under the name Trilogy Metals to reflect its polymetallic attributes, has performed well – and has been rewarded with the crystallization, this past December, of an exciting joint-venture agreement with South32.
In order to turn NOVAGOLD into the pure play on Donlin in the marketplace, we also promised to sell Galore Creek, a beautiful endowment but a project too far for a development-stage company with a flagship as ambitious as Donlin Gold. We could have let Galore go in a fire sale. We didn’t. We sold it for real money in a market where win-win monetization has been the exception, not the rule. As a result, the cash position we find ourselves in, with more guaranteed and potential payments to come, is truly the envy of our space.
Finally, we stated that Donlin would be permitted. When anyone pushed back, assuming Donlin must be in the same category as Pebble and that, as a consequence, permitting in Alaska would be a nightmare, we just shrugged our shoulders. The facts suggested the opposite. All we have ever heard from our local stakeholders and partners, the Calista Corporation and TKC, were strong indications of support. In fact, the only references to the project in 2012, from a media standpoint, were actually positive. Six years later, we received the first-ever joint Federal Record of Decision for a proposed mining project – delivered in a formal ceremony in the presence of the lead agencies, the U.S. Army Corps of Engineers and the Bureau of Land Management (BLM) – that included input from those who held the reasonable concerns that any big project could bring. While there are always some opposing views, the project has continued to maintain widespread support throughout the Yukon-Kuskokwim (Y-K) Region and the State of Alaska. For those who know this industry, that’s an amazing occurrence practically anywhere in the world.
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