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 6 You seem quite content to wait for higher gold prices to build Donlin. Is that feasible financially?
Yes, very much so. We have lots of cash – NOVAGOLD ended 2019 with $148 million in cash, with a further $100 million of notes receivable due over the next three years. Moreover, should Galore Creek proceed to a construction decision, NOVAGOLD will receive an additional $75 million. Furthermore, we have no burning desire to unnecessarily deplete our treasury until the time is right. The owners of our shares should thus be delighted by the fact that, in order to implement its business strategy, our company would not expect to raise capital under duress, nor does it expect to raise more money until a construction decision is made on Donlin Gold – at which point we believe the project finance market should be quite eager to fund this generational mine.
Regarding financing construction of the project, we and Barrick have been studying a number of ways to minimize initial capital outlays, including modular construction techniques, third-party construction of the pipeline, and equipment leasing. Speaking for ourselves, Donlin Gold’s strong attributes lend to multiple financing options when the time is right: equity, third-party financing, and debt, just to mention a few. We are not remotely concerned about what combination of financing vehicles we will use when the timing is right.
7 So your watchword remains “be patient”?
One wonderful thing about metals deposits is that they don’t deplete or wither on the vine. Great deposits are not steam. And we are located in a mineral province without use-it-or-lose-it provisions. Time is very much on our side. That a big mine will be built is something I fully expect. Doing it so that the results are optimal for all our stakeholders is thus the name of the game.
More philosophically, patience constitutes an enormous virtue in our space. Some things are within our control and skill set; the process leading to the federal Record of Decision, for example, was followed with the utmost professionalism and still took six years, which is normal in the United States. But gold will move higher at its own pace. We can’t change this fact, bullish as we are about how the movie will play out. Not surprisingly, our team has adopted an expression for Donlin’s steadfastness: “The Tortoise and the Hare” – a lovely herpetological metaphor highlighting the phenomenon of more advanced and higher-profile projects getting picked off by political or jurisdictional turmoil, while we have been chugging along, steadily but determinedly, passing pretty much all of them to the finish line.
As a wildlife conservationist myself, I can assure
you that we did not cut any corners in our
environmental work. And we never sought to do so. The lengthy permitting process has been worth every penny and every year to get it done right. As an investor, I can tell you that having taken the time to permit properly what may become the largest pure gold mine in the world, in one of the safest places in the world, what we have truly is like catnip.
   Double the Gold Industry’s Average Grade
2.24G/T Donlin Gold
average grade*
world average grade†
* Represents average grade of measured and indicated mineral resources, inclusive of mineral reserves. See “Mineral Reserves & Mineral Resources” and associated information on page 46. † 2018 average grade of open-pit and underground deposits with gold as primary commodity and over 1Moz in measured and indicated resources, sourced from S&P Global Market Intelligence.
   NG 17

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