Novagold Resources Inc. (NG)

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NovaGold Resources Inc. (NG)

Wall Street Analyst Forum

March 26, 2008 10:30 am ET


Greg Johnson - VP of Corporate Communications and Strategic Development



All right. The next company this morning that is presenting is NovaGold, and NovaGold is one of the fastest growing gold and copper companies in the industry, with a diversification of four separate multi-million ounce quality projects advancing towards production. NovaGold has one of the production growth profiles in the sector.

With a target to achieve commercial production of the Rock Creek Mine in the second quarter of 2008, NovaGold anticipates producing 100,000 ounces of gold annually in 2008, increasing to potentially over 1 million ounces of gold, 4 million ounces of silver, and 200 million pounds of copper annually with Nome operations at Galore Creek and Donlin Creek fully producing at one of the lowest cash costs in the industry.

Presenting today is Greg Johnson, Vice President of Corporate Communications and Strategic Development. Thank you.

Greg Johnson

Great. Thank you. Thanks for the opportunity to present today to the forum, and I think this is our second or third time here. I see some new faces in the audience. What I'd like to do is give kind of an overview of the company through the presentation, and if we could hold the questions to the end, we'll have the question-and-answer period towards the end.

For those of you that are new to the sector, maybe new to NovaGold, one of the things I'd point out here on the first slide is the location of our projects. All of our projects are located in North America. In the mining industry, we don't have the opportunity to move our factories, if you will, where we want to, so we are limited by where they are located. And often times what you find in our business is that the area that still has large undeveloped resources are in very politically challenged areas.

So when you are looking at investments in this sector, it's something of note. That's one of the things that NovaGold with our projects in Alaska and Western Canada are quite low on the geopolitical risk, and of things, and this is an area that the businesses in this region are really resourced development businesses; so oil and gas, mining, timber, fish. So our type of business is welcome. We're working on native-owned lands, private lands and lands owned by the state of Alaska.

So as we go through each of the projects, you will get a feel for the way we work in those regions, those are relatively remote regions, many of the people in those regions are native people that we work closely with, as a core part of our business practices.

So starting out, kind of the key highlights for someone first looking at NovaGold. NovaGold has a portfolio. If you look at gold only, our attributable global resource is 26.5 million ounces of gold, well over 100 million ounces of sliver, and nearly 8 billion pounds of copper to our credit.

We have a portfolio of world-class assets. Many companies in the sector really have just a single asset; with NovaGold you are looking actually at three world-class projects in our portfolio. As we'll go through them in the presentation, I believe you'll see that we are relatively undervalued, even for development staged companies, and as we make the transition to production this year, I think we look quite attractive on a valuation basis as we go through.

Our Donlin Creek projects, with Barrick Gold, one of the world's largest undeveloped gold resources, over 30 million ounces of gold with 29 million ounces in the measured and indicated category. This is an in-pit resource; we just recently updated this resource adding some 12.8 million ounces of gold to the M&I category.

We are working closely with Barrick on this project, and this project is located in Alaska. We're moving to complete updated economics in the second half of this year, and start the permitting process. At our Nome operations, in Nome, Alaska is the Rock Creek mine. We're on the very last stage of construction; we hope to start early production here next quarter. That will be about a three-month ramp up as we start to bring the system online and hopefully by the end of the quarter, we'll be at commercial levels of production, producing about a 100,000 ounces a year on an annualized basis with a potential to grow about 25% to 50% in future years.

At our Galore Creek copper gold project; this is the project that’s partnered with Teck Cominco. We had a major announcement last year that we were suspending construction due to rising capital cost. We have a new engineering management team in place, and we are looking at several scenarios to basically reduce capital and reduce risk on construction, and I will be giving you some more details on that. And you will be getting quarterly updates as we move forward.

Our objective within the next 12 to 18 months is to have new feasibility and a new construction plan in place with Teck Cominco. Teck is spending the majority of the funds here, nevertheless relatively minor expenditures until Teck has completed its earn-in. So, we will talk more about that in a bit. But it is a world calls resource at the nearly 9 billion tons of copper and 7.3 million ounces of gold. It's one of the better grade, better quality deposits of its kind worldwide for copper-gold.

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