NovaGold Highlights
Commercial Terms of the Ambler Agreement
(All amounts are in US dollars)
October 26, 2011 - Vancouver, British
Columbia NovaGold Resources
Inc. ("NovaGold��) (NYSE-AMEX, TSX: NG) is pleased to highlight
commercial terms of the earlier
announced Exploration Agreement (the "Agreement��)
with NANA Regional
Corporation, Inc. ("NANA��), its Alaska Native partner. Under the Agreement, NovaGold
and NANA consolidated their
respective holdings in the Ambler mining district of
Northwest Alaska, as described in the press release dated October 20, 2011. Among other things, under
the terms of the Agreement:
- Upon
a one-time payment of $4 million, NovaGold has the exclusive right to explore and develop the combined Ambler
district which, as a result
of the Agreement, will total approximately
180,000 hectares.
- NovaGold
will have a 100% interest
in any mining project subject to NANA's right, exercisable at the time of any
construction decision, to purchase
between 16% and 25% of any
project on the combined
property. Alternatively,
NANA can elect to retain a 15% Net Proceeds Royalty ("NPR��) with
respect to the project.
- Should
NANA elect to purchase
a specified percent interest
in the project, it would pay to NovaGold a consideration equal to the specified percentage of the joint venture
which NANA elects to acquire multiplied by the difference between all costs incurred by NovaGold in connection with the mining project less, with respect to the first of any
such joint ventures,
$40 million. The $40 million amount is a one-time deduction for
the construction of the first mining operation on the combined property. The consideration will be payable to NovaGold in cash at the time
that the parties enter into
a joint venture agreement on the specified project. Following the formation of the joint
venture, each party would
be responsible for its pro-rata share of subsequent funding.
- Should
NANA elect to hold a
15% NPR, such royalty would be calculated
in accordance with the agreed-upon
provisions as to allowable costs
deducted from the project's proceeds.
- The
above rights to participate would apply to each and every mining operation constructed on the
consolidated land holding.
- In
addition, NANA is entitled
to receive a Net Smelter
Returns royalty ranging between 1% and 2.5% from production originating from the combined property with the exact percentage depending on the specific area where the
future production originates.
- NANA
would also receive annual payments in relation to properties
permanently used for access or operations.
"This is a win-win deal for both parties,�� said Rick Van Nieuwenhuyse, NovaGold's President and CEO. "NovaGold
secures 100% interest in any project located
in one of the largest and most
prospective poly-metallic projects
in the world. NANA has an option for participation in the future financial success of any joint venture and access to NovaGold's proven exploration expertise and track
record of major economic discoveries
without any exposure of risk capital. At the time of a secular bull market in all commodities, both parties are now stakeholders in a significant copper-lead-zinc-silver-gold project located in one of the safest geo-political jurisdictions in the world.��
About
NovaGold
NovaGold is
a precious metals company engaged in the
exploration and development of mineral
properties in Alaska, U.S.A.
and British Columbia, Canada.
The Company is focused on advancing its two core
properties, Donlin Gold and
Galore Creek, with the
objective of becoming a low-cost
million-ounce-a-year gold producer, and offers superior leverage to gold and copper with one of the largest reserve/resource bases of any junior or mid-tier gold company. NovaGold has a strong track record of expanding deposits through exploration success and forging collaborative
partnerships, both with local communities and with major mining companies. The Donlin Gold project in Alaska,
one of the world's largest known undeveloped gold deposits, is held
by a limited liability company owned equally
by wholly-owned subsidiaries
of NovaGold and Barrick
Gold Corporation. The Galore Creek project in British
Columbia, a large copper-gold-silver deposit, is held by a partnership
owned equally by wholly-owned subsidiaries of NovaGold and Teck Resources
Limited. NovaGold also owns a 100% interest in the
high-grade Ambler copper-zinc-gold-silver deposit in northern Alaska
and has other earlier-stage
exploration properties. NovaGold
trades on the TSX and NYSE-AMEX under
the symbol NG. More information is
available at
www.novagold.net or by emailing info@novagold.net.
NovaGold Contact
Neil
MacRae
Director, Investor
Relations
neil.macrae@novagold.net
604-669-6227
or 1-866-669-6227
# # #
Cautionary Note Regarding Forward-Looking Statements
This press release includes certain
"forward-looking statements��
within the meaning of
applicable securities legislation
including the United States Private
Securities Litigation Reform
Act of 1995. All statements,
other than statements of historical fact, included herein including, without limitation, statements relating to NovaGold's future
operating or financial performance, are forward-looking statements. Forward-looking statements are frequently, but not always, identified by words such as "expects��, "anticipates��, "believes��,
"intends��, "estimates��,
"potential��, "possible��, and similar expressions, or statements
that events, conditions, or
results "will��,
"may��, "could��,
or "should�� occur or be achieved. These
forward-looking statements may include statements
regarding perceived merit of properties; exploration results and budgets; mineral reserves and resource estimates; work programs; capital
expenditures; timelines; strategic plans; completion of
transactions; market prices
for precious and base metals;
or other statements that are not statements of fact. Forward-looking statements involve various risks and uncertainties. There can be no assurance that such statements will prove to be
accurate, and actual results and future events could differ materially
from those anticipated in such statements. Important factors that could cause actual results to differ materially from NovaGold's expectations include the uncertainties involving the need for additional financing to explore
and develop properties and availability of financing in the debt and capital markets; uncertainties involved in the interpretation of drilling results and geological tests and
the estimation of reserves and resources;
the need for continued cooperation with NANA for the continued exploration and development
of the Ambler, Bornite and ANCSA lands; the need for cooperation of government agencies and native groups in the development
and operation of properties;
the need to obtain permits and governmental approvals; risks of construction
and mining projects such as accidents, equipment
breakdowns, bad weather,
non-compliance with environmental and permit requirements,
unanticipated variation in geological
structures, ore grades or recovery rates; unexpected cost increases, which could include significant
increases in the capital and operating costs estimated in the preliminary economic assessment; fluctuations in metal
prices and currency
exchange rates; and other risk
and uncertainties disclosed
in NovaGold's Annual
Information Form for the year-ended
November 30, 2010, filed with the Canadian securities regulatory authorities, and NovaGold's annual report on Form 40-F filed with the United States Securities and Exchange Commission
and in other NovaGold
reports and documents filed with
applicable securities regulatory
authorities from time to
time. NovaGold's forward-looking
statements reflect the beliefs, opinions and projections on the date the statements are made. NovaGold
assumes no obligation to update the forward-looking statements of beliefs, opinions,
projections, or other factors,
should they change, except as required by law.
info@novagold.net Toll
free: 1-866-669-6227 www.novagold.net