NOVAGOLD RESOURCES INC. received proceeds of CAD$46.4 million on December 31, 2012 from the exercise of the entirety of the 31,337,278 share purchase warrants held by Electrum Strategic Resources L.P. The warrants, due to expire January 21, 2013, were exercisable at CAD$1.479(1) per share.
Upon exercise of these warrants, the shares received by Electrum were added to their core NOVAGOLD holdings. Electrum and its affiliate GRAT Holdings LLC now hold, in the aggregate, 84,569,479 shares or 27.2% of NOVAGOLD's issued and outstanding shares. The proceeds from the warrants exercise will be used for the advancement of Donlin Gold, NOVAGOLD's flagship asset.
As of November 30, 2012, NOVAGOLD had CAD$252.2 million in cash and cash equivalents. Receipt of the additional CAD$46.4 million increases NOVAGOLD's cash position, which is sufficient to satisfy all of the existing financial obligations and to pay for its share of the expected expenditures related to the Donlin Gold permitting process, anticipated to take approximately three to four years. NOVAGOLD now has 311.1 million shares outstanding and 329.7 million shares fully diluted, giving effect to the exercise of the warrants formerly held by Electrum.
NOVAGOLD is a well-financed precious metals company engaged in the exploration and development of mineral properties in North America. Its flagship asset is the 50%-owned Donlin Gold project in Alaska, one of the safest jurisdictions in the world. With approximately 39 million ounces of gold in the Measured and Indicated resource categories (541 million tonnes at an average grade of approximately 2.2 grams per tonne), Donlin Gold is regarded to be one of the largest, and most prospective known gold deposits in the world. According to the Updated Feasibility Study, once in production, Donlin Gold should average approximately 1.5 million ounces of gold per year for the first five years, followed by decades of more than one million ounces per year. The Donlin Gold project has substantial exploration potential beyond the designed footprint which currently covers only three kilometers of an approximately eight-kilometer strike length of the property. Permitting is underway for the Donlin Gold project, a clearly defined process expected to take 3-4 years. NOVAGOLD also owns 50% of the Galore Creek copper-gold-silver project located in northern British Columbia. According to the 2011 Pre-Feasibility Study, Galore Creek is expected to be the largest copper mine in Canada, a tier-one jurisdiction, when it is put into production. NOVAGOLD is currently evaluating opportunities to sell all or a portion of its interest in Galore Creek and would apply the proceeds toward the development of Donlin Gold. NOVAGOLD has a strong track record of forging collaborative partnerships, both with local communities and with major mining companies.
Please note: As part of the rebranding, NOVAGOLD has converted its primary domain to .com from .net, therefore, our website can now be accessed at www.NOVAGOLD.com and all email formats within NOVAGOLD are now [email protected]. Please update your contacts accordingly.
Scientific and Technical Information
Scientific and technical information contained herein with respect to the Donlin Gold project is derived from the "Donlin Creek Gold Project Alaska, USA NI 43-101 Technical Report on Second Updated Feasibility Study" compiled by AMEC. Kirk Hanson, P.E., Technical Director, Open Pit Mining, North America, (AMEC, Reno), Gordon Seibel, R.M. SME, Principal Geologist, (AMEC, Reno), Tony Lipiec, P.Eng. Manager Process Engineering (AMEC, Vancouver) are the Qualified Persons responsible for the preparation of the independent technical report, each of whom are independent "qualified persons" as defined by NI 43-101.