UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended November 30, 2023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
Commission File Number:001-31913
NOVAGOLD RESOURCES INC.
(Exact Name of Registrant as Specified in Its Charter)
| British Columbia | N/A |
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| (State or Other Jurisdiction of Incorporation or Organization) · (I.R.S. Employer Identification No.) |
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| 201 South Main Street, Suite 400 Salt Lake City, Utah, USA | 84111 |
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| (Address of Principal Executive Offices) | (Zip Code) |
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(801)639-0511
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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| Common Shares | NG | NYSE American Toronto Stock Exchange |
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Securities registered pursuant to Section 12(g) of the Act:None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)
| Large accelerated filer ☒ | Accelerated filer ☐ | Non-accelerated filer ☐ |
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| Smaller reporting company ☐ | Emerging growth company ☐ | |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐ No ☒
Based on the last sale price on the NYSE American of the registrant’s common shares on May 31, 2023 (the last business day of the registrant’s most recently completed second fiscal quarter) of $5.15 per share, the aggregate market value of the voting common shares held by non-affiliates was approximately $1,266,900,000.
As of January 16, 2024, the registrant had 334,371,223 common shares, no par value, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Certain portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than April 1, 2024, in connection with the registrant’s fiscal year 2023 annual meeting of shareholders, are incorporated by reference into Part III of this Annual Report on Form 10-K.
TABLE OF CONTENTS
| Page |
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| PART I | 8 | |
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| Item 1. | Business | 8 |
| Item 1A. | Risk Factors | 13 |
| Item 1B. | Unresolved Staff Comments | 23 |
| Item 1C. | Cybersecurity | 23 |
| Item 2. | Properties | 24 |
| Item 3. | Legal Proceedings | 42 |
| Item 4. | Mine Safety Disclosures | 42 |
| PART II | 43 | |
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| Item 5. | Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities | 43 |
| Item 6. | [Reserved] | 45 |
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations (US dollars in thousands, except per share amounts) | 46 |
| Item 7A. | Quantitative and Qualitative Disclosures about Market Risk | 52 |
| Item 8. | Financial Statements and Supplementary Data | 53 |
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 72 |
| Item 9A. | Controls and Procedures | 72 |
| Item 9B. | Other Information | 72 |
| PART III | 73 | |
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| Item 10. | Directors, Executive Officers and Corporate Governance | 73 |
| Item 11. | Executive Compensation | 73 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters | 73 |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 74 |
| Item 14. | Principal Accountant Fees and Services | 74 |
| PART IV | 75 | |
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| Item 15. | Exhibits and Financial Statement Schedules | 75 |
Unless the context otherwise requires, the words“we,”* “us,” “our,” the*“Company”* and*“NOVAGOLD”* refer to NOVAGOLD RESOURCES INC., a British Columbia corporation, and its subsidiaries as of November 30, 2023.*
CURRENCY
References in this report to $ refer to United States currency and C$ to Canadian currency.
See the “Glossary of Technical Terms” for more information regarding some of the terms used in this report.
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements or information within the meaning of Canadian securities laws and the United States Private Securities Litigation Reform Act of 1995 concerning anticipated results and developments in our operations in future periods, planned exploration activities, the adequacy of our financial resources and other events or conditions that may occur in the future. These forward-looking statements may include statements regarding perceived merit of properties, exploration results and budgets, mineral reserves and resource estimates, work programs, anticipated timing of updated reports and/or studies, capital expenditures, operating costs, cash flow estimates, production estimates and similar statements relating to the economic viability of a project, timelines, strategic plans, including our plans and expectations relating to the Donlin Gold project, permitting and the timing thereof, market prices for precious metals, or other statements that are not statements of fact. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Statements concerning mineral resource estimates may also be deemed to constitute “forward-looking statements” to the extent that they involve estimates of the mineralization that will be encountered if the property is developed.
Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such as “expects”, “is expected”, “anticipates”, “believes”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential”, “possible” or variations thereof or stating that certain actions, events, conditions or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.
Forward-looking statements are based on a number of material assumptions, including those listed below, which could prove to be significantly incorrect:
| ● | our ability to achieve production at the Donlin Gold project; |
| ● | dependence on cooperation of co-owner in exploration and development of the Donlin Gold project; |
| ● | estimated capital costs, operating costs, production and economic returns; |
| ● | estimated metal pricing, metallurgy, mineability, marketability and operating and capital costs, together with other assumptions underlying our resource and reserve estimates; |
| ● | our expected ability to develop adequate infrastructure and that the cost of doing so will be reasonable; |
| ● | assumptions that all necessary permits and governmental approvals will be obtained and retained, and the timing of such approvals; |
| ● | assumptions made in the interpretation of drill results, the geology, grade and continuity of our mineral deposits; |
| ● | our expectations regarding demand for equipment, skilled labor and services needed for the Donlin Gold project; |
| ● | our activities will not be adversely disrupted or impeded by development, operating or regulatory risks; and |
| ● | our expectations regarding the timing and outcome of the appeals to the Federal Joint Record of Decision (JROD) and permits issued by the U.S. Army Corps of Engineers (Corps) and U.S. Bureau of Land Management (BLM) and the State Clean Water Act Section 401 Certification (as defined below), pipeline right-of-way (ROW) agreement and lease (as defined below); and application for water rights (as defined below). |
Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation:
| ● | uncertainty of whether there will ever be production at the Donlin Gold project; |
| ● | risks related to co-owner on which we depend for Donlin Gold project activities; |
| ● | risks related to proceeding with a feasibility study for the Donlin Gold project without the participation of the co-owner; |
| ● | our history of losses and expectation of future losses; our limited property portfolio; |
| ● | risks related to our ability to finance the development of the Donlin Gold project through external financing, strategic alliances, the sale of property interests or otherwise; |
| ● | uncertainty of estimates of capital costs, operating costs, production and economic returns; |
| ● | commodity price fluctuations; |
| ● | risks related to market events and general economic conditions; |
| ● | risks related to opposition to our operations at our mineral exploration and development properties from non-governmental organizations (NGOs) or civil society; |
| ● | the risk that permits and governmental approvals necessary to develop and operate the Donlin Gold project will not be available on a timely basis, subject to reasonable conditions, or at all; |
| ● | uncertainties relating to the assumptions underlying our resource and reserve estimates, such as metal pricing, metallurgy, mineability, marketability and operating and capital costs; |
| ● | risks related to the inability to develop or access the infrastructure required to construct and operate the Donlin Gold project; |
| ● | uncertainty related to title to the Donlin Gold project; |
| ● | risks related to our largest shareholder; |
| ● | risks related to conflicts of interests of some of the directors and officers of the Company; |
| ● | risks related to the need for reclamation activities on our properties and uncertainty of cost estimates related thereto; |
| ● | credit, liquidity, interest rate and currency risks; |
| ● | mining and development risks, including risks related to infrastructure, accidents, equipment breakdowns, labor disputes or other unanticipated difficulties with, or interruptions in, development, construction or production; risks related to governmental regulation; |
| ● | risks related to environmental laws and regulations; |
| ● | risks related to our insurance; |
| ● | risks related to title and other rights to our mineral properties; |
| ● | risks related to increases in demand for equipment, skilled labor and services needed for exploration and development of the Donlin Gold project, and related cost increases; |
| ● | our need to attract and retain qualified management and technical personnel; |
| ● | uncertainty as to the outcome of potential litigation; |
| ● | risks related to the effects of global climate change on the Donlin Gold project; |
| ● | risks related to information technology systems; and |
| ● | risks related to the Company’s status as a “passive foreign investment company” in the United States |
This list is not exhaustive of the factors that may affect any of our forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and our actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in this Annual Report on Form 10-K under the heading “Risk Factors” and elsewhere.
Our forward-looking statements contained in this Annual Report on Form 10-K are based on the beliefs, expectations and opinions of management as of the date of this report. We do not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions should change, except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.
Technical Information
Paul Chilson, P.E., a Qualified Person and an employee of the Company reviewed and approved the scientific and technical information contained in this Annual Report on Form 10-K.
GLOSSARY OF TECHNICAL TERMS
The following technical terms defined in this section are used throughout this Annual Report on Form 10-K.
| alluvial | A placer formed by the action of running water, as in a stream channel or alluvial fan; also said of the valuable mineral (e.g. gold or diamond) associated with an alluvial placer. |
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| arsenopyrite | An arsenic iron sulfide mineral (FeAsS). |
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| assay | A metallurgical analysis used to determine the quantity (or grade) of various metals in a sample. |
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| concentrate | A clean product recovered in flotation, which has been upgraded sufficiently for downstream processing or sale. |
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| cut-off grade | The grade (i.e., the concentration of metal or mineral in rock) that determines the destination of the material during mining. For purposes of establishing "prospects of economic extraction," the cut-off grade is the grade that distinguishes material deemed to have no economic value (it will not be mined in underground mining or if mined in surface mining, its destination will be the waste dump) from material deemed to have economic value (its ultimate destination during mining will be a processing facility). Other terms used in similar fashion as cut-off grade include net smelter return, pay limit, and break-even stripping ratio. |
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| cyanidation | A metallurgical technique, using a dilute cyanide solution, for extracting gold from ore by dissolving the gold into solution. |
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| dike | A tabular igneous intrusion that cuts across the bedding of the host rock. |
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| doré | A semi-pure alloy of gold and silver. |
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| electrowinning | The deposition of gold from solution to cathodes by passing electric current from anodes through gold-bearing solution. |
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| flotation | A process used for the concentration of minerals, especially within base metal systems. |
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| geotechnical | Said of tasks or analysis that provide representative data of the geological rock quality in a known volume. |
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| grade | Quantity of metal or mineral per unit weight of host rock. |
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| greywacke | A variety of sandstone generally characterized by its hardness, dark color, and poorly sorted angular grains of quartz, feldspar, and small rock fragments set in a compact, clay-fine matrix. |
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| host | rock A body of rock serving as a host for other rocks or for mineral deposits. |
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| hydrothermal | Pertaining to hot aqueous solutions of magmatic origin which may transport metals and minerals in solution. |
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| intrusive | Said of igneous rock formed by the consolidation of magma intruded into other rocks. |
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| mafic | Igneous rocks composed mostly of dark, iron- and magnesium-rich minerals. |
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| massive | Said of a mineral deposit, especially of sulfides, characterized by a great concentration of mineralization in one place, as opposed to a disseminated or vein-like deposit. |
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| mineral | A naturally formed chemical element or compound having a definite chemical composition and, usually, a characteristic crystal form. |
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| mineral | deposit A mineralized body which has been physically delineated by sufficient drilling, trenching, and/or underground work, and found to contain a sufficient average grade of metal or metals to warrant further exploration and/or development expenditures. |
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| mineralization | A natural occurrence in rocks or soil of one or more yielding minerals or metals. |
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| net present value (NPV) | The sum of the value on a given date of a series of future cash payments and receipts, discounted to reflect the time value of money and other factors such as investment risk. |
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| ore | Rock containing metallic or non-metallic materials that can be extracted at a profit. |
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| placer | An alluvial deposit of sand and gravel, which may contain valuable metals. |
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| porphyry | An igneous rock of any composition that contains conspicuous phenocrysts (large crystals or mineral grains) in a fine-grained groundmass. |
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| pyrite | An iron sulfide mineral (FeS2), the most common naturally occurring sulfide mineral. |
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| pyrrhotite | An unusual, generally weakly magnetic, iron sulfide mineral with varying iron content (Fe1-xS (x=0 to 0.2)). |
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| reverse circulation (RC) | A type of drilling using dual-walled drill pipe in which the material drilled, water and mud are circulated up the center pipe while air is blown down the outside pipe. |
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| realgar | An arsenic sulfide mineral (As4S4). |
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| reclamation | Restoration of mined land to original contour, use, or condition where possible. |
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| rhyodacite | A volcanic, high-silica rock composed of mostly quartz and feldspar. |
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| sedimentary | Said of rock formed at the Earth’s surface from solid particles, whether mineral or organic, which have been moved from their position of origin and re-deposited, or chemically precipitated. |
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| shale | A fine-grained detrital (transported by wind, water, or ice) sedimentary rock, formed by the consolidation of clay, silt, or mud. |
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| sill | An intrusive sheet of igneous rock of roughly uniform thickness that has been forced between the bedding planes of existing rock. |
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| stibnite | An antimony sulfide mineral (Sb2S3). |
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| strike | The direction, or bearing from true north, of a vein or rock formation measured on a horizontal surface. |
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| sulfide | A compound of sulfur and some other metallic element. |
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| syngenetic | Relating to or denoting a mineral deposit or formation produced at the same time as the host rock. |
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| tailings | Uneconomic material produced by a mineral processing plant which is disposed of in a manner meeting government regulation and which may involve a permanent impoundment facility or which may involve the discharge of material to the environment in a manner regulated by the government authority. |
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| vein | A thin, sheet-like crosscutting body of hydrothermal mineralization, principally quartz. |
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| waste rock | Barren or submarginal rock that has been mined but is not of sufficient value to warrant treatment and is therefore removed ahead of the milling processes. |
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