Good day, ladies and gentlemen and welcome to the NOVAGOLD’s Third Quarter 2018 Conference Call and Webcast. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this call maybe recorded. I would now like to introduce your host for today’s conference, Melanie Hennessey, Vice President, Corporate Communications. Ma’am, you may begin.

Thank you, Heather. Good morning, everyone. We are pleased that you have joined us for NOVAGOLD’s third quarter results and for an update on Donlin. On today’s call, we have Greg Lang, NOVAGOLD’s President and CEO who will speak about our recent achievements. We also have David Ottewell, NOVAGOLD’s Vice President and CFO who will speak about our financial results. And Dr. Thomas Kaplan, NOVAGOLD’s Chairman will also be joining us today to make some closing remarks at the end of the call. At the end of the webcast, we will take questions both by phone and by e-mail. But before we get started, I would like to remind our listeners that any statements made today may contain forward-looking information such as projections and goals which are likely to involve risks detailed in our various EDGAR and SEDAR filings and forward-looking disclaimers included in this presentation. With that, I have the great pleasure of introducing Greg Lang, NOVAGOLD’s President and CEO. Greg?

Thank you, Melanie and good morning everyone. We are pleased that you could join us to hear about our third quarter results, which were momentous in the history of the company. After more than 5 years of diligent work focused on the strategy of taking the company’s assets up the value chain, given last quarter’s achievements, I couldn’t be more pleased with the outcome. From the receipt of the Donlin Gold Record of Decision as well as multiple federal and state permits to the successful sale of our share of the Galore Creek project to Newmont, we have delivered on significant strategic milestones that we laid out for the company. We have now a unique project permitted for development in Alaska, one of the best jurisdictions in the world who welcome responsible mine development. With its significant size, excellent grade and outstanding exploration potential, we believe that the Donlin Gold project will become one of the leading mines in the precious metals industry for decades to come. The positive Record of Decision in August and the completion of the federal permitting process on our Donlin Gold project were very noteworthy. It was the first time two federal agencies have ever signed a joint Record of Decision. As shown on Slide 5, feed for the Army Corps of Engineers and the Bureau of Land Management were present at the signing ceremony. We are very pleased with the Record of Decision as the project was approved as it was proposed with no unusual stipulations added to this approval. Slide 6 shows an image of the participants in the signing ceremony for the Record of Decision. The representatives from the BLM, the Corps of Engineers, our native partners, Andrew Guy of Calista and Maver Carey from the Kuskokwim Corporation, Andy Cole from Donlin…

Thank you, Greg. Slide 13 highlights our third quarter operating performance. Our third quarter net loss from continuing operations decreased by $1.8 million to $8 million, primarily due to lower permitting costs at Donlin Gold and higher interest income. Net loss from discontinued operations includes an $80 million loss on the sale of Galore Creek. As Greg mentioned, proceeds on the sale include the $100 million in cash and notes receivable of $75 million and $25 million, which we valued at a total of $88 million. No value was assigned for accounting purposes to the final $75 million receivable on approval of project construction. The net book value of the Galore Creek assets exceeded the net proceeds by $105.3 million and was partially offset by the reclassification of cumulative foreign currency translation adjustments of $13.8 million and a net deferred tax recovery of $11.5 million resulting in a net loss on sale of $80 million. Cash flows are highlighted on Slide 14. During the third quarter of 2018, cash used in continuing operations decreased by $700,000 from the prior year quarter due to lower permitting costs at Donlin Gold. Net cash proceeds on the sale of Galore Creek were $99.3 million after closing costs of $700,000. And as Greg mentioned, we ended the quarter with cash and term deposits of $166 million. Greg, back to you.

Thank you, Dave. Turning to a brief overview of our Donlin Gold asset on Slide 15, it really has all the attributes that are required to make a successful mining operation. With its significant size, superior grade, projected output, low operating cost structure and a mine life measured in decades along with excellent exploration upside, strong local partnerships and jurisdictional safety, Donlin Gold is expected to be a pacesetter in precious metals industry for many years to come. Starting with size on Slide 16, when we compare Donlin to 19 other development stage projects in the industry, if you look at this peer group at 39 million ounces of gold, Donlin is a league of its own and four times the size of the peer average. Another key attribute shown on Slide 17 is the quality of the deposit. Donlin's grade is 2.25 grams, that’s twice the industry average. In an industry where reserve grades are declining and sources of emerging production are becoming and increasingly scarce, quality is important. At an anticipated production profile of greater than 1 million ounces per year over the 27-year mine life Donlin Gold is at the top of the list in terms of longevity when compared to the same development peer group presented earlier on Slide 18. Once in production, the project will contribute great economic benefits to all of our stakeholders for decades to come. The resource at Donlin has been extensively drill tested. As shown on Slide 19, we have roughly 1,400 drill holes in this deposit, with over 90% of them being core giving us a very in-depth understanding of the deposit. Beyond all the drilling completed to-date, exploration potential remains as shown on Slide 20 along the 8 kilometer mineralized gold belt. The ACMA and Lewis deposits which are…

Thank you very much, Greg. I hope that everyone can hear me. I think that anyone listening to the presentation, which Greg just outlined should really come away with several takeaways. The first is and I do believe that not only as Chairman of NOVAGOLD, but also as the largest investor in the company that there is no doubt in my mind that the management team, the leadership of NOVAGOLD is the best that I have worked with in my 25 years in the natural resources industry and I am celebrating those 25 years this year. It is truly an honor, a privilege and almost a guilty pleasure to be the Chairman of NOVAGOLD which is the only public company of which I am Chairman. And so I wanted to take a few moments just to be able to highlight some of those factors that other investors should be able to take into account as investors in NOVAGOLD and also prospective investors in NOVAGOLD. When critics of the mining executives who run the industry and with a great deal of justification in many instances I confess, but when they say that there really are no companies that have managed to state their strategic objectives with clarity, execute them with technical excellence and be able to fulfill all of their promises and do so in a way that keeps faith with their shareholders, their partners, local communities, governments, state and federal, this shows you that first of all it can be done, secondly, it’s true that it’s extremely rare, but it can be done. And NOVAGOLD is one of those true rare unicorns that has been able to show that it can do things well and at the same time do good things. The fact that we have managed to see…

Thank you, Tom. We are now happy to open the lines for questions.

Thank you. [Operator Instructions] Your first question comes from John Bridges with JPMorgan. Your line is open.

Hi, good morning, everybody. Well, I'm almost speechless after your talk there, Tom, but I'll force myself. So, there's been a change of management at Barrick, I just wondered if you’ve spoken to them and what they were telling you? And then maybe if you could give us a bit more detail as to when to expect the scoping study and any sort of insights that’s come out of it so far? Thank you.

John, thank you for being on the call. I'll turn the first part of that question over to Tom and then I'll speak to the scoping study.

First of all, thank you, John. Great to hear your voice. With regards to the changes that are coming at Barrick, I am personally thrilled to see the ascension of Mark Bristow. I've said many times publicly and privately that he is one of the greatest CEOs of our generation in this business. And I say that not only because of his proven credentials as a practitioner, as a professional, but I also say this because I've had experiences over the last 15 years with Mark professionally and each one of them has been marked by tremendous respect, camaraderie, and his personal integrity and character not just his intelligence are – and remain exemplary in my experience in this business. All of the attributes which Greg and I have cited about Donlin are just simply facts, not fake news, they're not alternative facts, they are just facts, and I don't think that there is anyone in this business who has any doubt that Mark Bristow is able to understand an extraordinary story when he sees it. You know that our strategy is not to make any wine before its time. A wise man once told me these kinds of assets are rarer than hens' teeth and they're not steam, and our job is not to go into production in order to subsidize Chinese and Indian gold consumption. So the Barrick leadership for the last decade that we've been in this story has heard this from me, I think it's fair to say that the incoming leadership has heard and will continue to hear this from me, and if I had to guess, if I had to guess, I would think that the combination of the experiences, which Mark and I, and just speaking for myself now has had together the common understanding and very much the shared beliefs in this business that we have. I am predicting really, really, really good things ahead. This for us is a major, major breakthrough. Greg?

Thank you, Tom. And John just to speak to your question on the scoping study and the work that's ahead of us, the Donlin Gold Board actually meets tomorrow and we're laying out the work program and plans for next year that will be presumably approved sometime later this year and we'll be in a position to update all of our stakeholders.

Okay. So, when will the scoping study be released?

Within the context of the work program for next year.

So, in January or February next year?

We haven't landed on a firm date, John. We'll keep everybody apprised as we develop the path forward with Barrick.

Yes. As you can understand, I am just keen to you to improve my model, anyway congratulations on the on the progress, it’s everything seems to be moving on very nicely, well-done guys.

Thank you, John.

Thank you, John.

Thank you. Your next question comes from Lucas Pipes with ‎B. Riley FBR. Your line is open.

Thank you very much and good morning everyone. I want to congratulate you all on a fantastic execution over the past 3 months. I don’t need to belabor the point, but it’s very impressive and really just a job well done, great outcomes. I wanted to – John asked the two questions that were on top of my list, but maybe to follow-up on the consolidation from a kind of bigger picture point of view Tom, Greg do you see this as a broader trend in the industry and if so what would be what do you see as implications of greater consolidation?

Thank you for joining the call. Lucas I think I will lateral that question to Tom.

Thanks Greg. Great hearing your voice Lucas, look the reality is that this is a very, very small industry and it’s going to get bigger in terms of market capitalization because when gold prices start to move, when people understand the value propositions in this industry you are just going to see those who will remain in the business, go up in value, nature pours a vacuum and when people bemoan companies that their market caps are too small make sure has the way of making the market caps bigger to accommodate them. The thing that I would point out is this. And I think that we see this very simply even in mergers such as between Randgold and Barrick, there is not pretty much gold out there. The truth is that if companies want to grow, they really are going to have to grow through acquisition. So I love exploration. But I can do that, but I also can take a 20-year time horizon. The reality is that to build a mine in today’s world from the time that you buck the 1,000 to 10,000 to 1 odds of actually making a discovery all the way through taking it up to value chain to production is going to take you a minimum of a decade. In fact I think the industry average now is twice that if not more. There are no new discoveries being made a size, I mean very few. And when I say size, I mean 5 million ounces, we don’t even look at 5 million ounces anymore as a group because we need to be able to focus on those assets which can move the needle. I don’t think there are very many that can. And the ones that are substantial not that they will…

Lucas, does that answer your question?

Very helpful. Thank you. Maybe a quick follow-up staying a little bit bigger picture and then I do have a follow-up question on the scoping study as well, but staying on the bigger picture one thing I hear from investors is maybe resignation is too stronger word, but obviously there are trade tensions out there, uncertainty as to future growth and gold is acting somewhat lackluster, how do you square the current performance of gold prices with the world we are living in and what your longer term outlook I mean I know your outlook but I think I am – but I would certainly appreciate your views on that?

Well, first of all I have learned through experience that gold and silver behave in the way you least likely expect them to do. Gold in our view began wave one of a generational bull market which started at around $250, $300 took gold to 1,900, we have been in what I am using technical jargon but the reality is we have been in a correction of say a wave to decline and I am expecting that in the not too distant future we will either have one of two scenarios either one short spike down, just clean everybody’s clock where we can followed by a resumption of the bull market and there is a chart pattern which could allow for that. The other interpretation of that pattern is that we have already broken out of the down trend and that as Jeffrey Gundlach says gold is coiling like a snake, readying itself for its next move which if you believe as I do that the move to 1,900 was just wave one means that we go to significantly higher numbers, all of which will be aggravated by production declines, increased net investment by central banks. And this is not even including negative or fear factors of things going wrong in the world which I really hope they don’t. I believe that the supply-demand fundamentals, the collapse in grade and quality, the collapse in discoveries, the jurisdictional issues are all going to compound a production decline which is going to help trigger a rise in prices. When will it do it, I don’t know and it’s the short answer. But one thing that I would say is this if you look at wave one for 12 years gold ended the year higher than it began the year, for 12 consecutive…

Very helpful. Thank you very much, Tom. This is great.

You are welcome, Lucas.

Greg, final question to follow-up on the on the scoping study, could you – I mean, you were very cautious than I thought and how you answered John’s question, but can you maybe elaborate in terms of when you sit down tomorrow, what the priorities are, what you would like to see addressed in the scoping study where you spent most of your time and focus? Thank you.

Sure, Lucas and I appreciate your interest. Obviously, it’s a work in progress with our partners, so I am really not in a position to provide a great deal of detail at this stage other than to say we have been working with Barrick to steadily advance the Donlin Gold project. And I think we have clearly made a lot of progress having a Record of Decision in hand really does put us in control of our destiny now. And I think as we are working with our partner and developing next year’s plans we will take that into consideration and when the time is right, we look forward to updating everyone about how 2019 will shape up for us and for Donlin.

Got it. I appreciate it’s a tricky time for you. We will be eagerly waiting for your progress and keep up all the great work. Thank you.

Thank you, Lucas.

Thank you. Your next question comes from Joe Hays, a Private Investor. Your line is open.

Yes. I have probably been invested with the NOVAGOLD for twice as long as you folks have been involved with the company. So I look at it a different perspective. I used to be a young man. I am now becoming an older man. I wonder if you can give me some projections in terms of years before NOVAGOLD will become profitable enough to actually mine some gold and take it to market?

Sure, Joe. Well, first off, thank you for your patience with the company. I am sure you followed the changes in the progress over the last few years. We are now in the process of laying out the work programs for next year. And so to put you I guess in a time horizon that you are curious about, next year will be spent steadily advancing the project to ultimately a construction decision. And once we have reached that point we would take about 3 or 4 years to bring the Donlin project into production. And there is a lot of work we can do concurrently or we could do it end-to-end and a lot of the decision in that regard would be driven by the markets and the gold price at that time.

What the gold price do you feel would be worthwhile, now you stand presuming the minerals that you have until it’s a profitable situational stratum, do you have a dollar figure at this time that you are looking for gold to achieve to make that figure come into realization?

No Joe, we don’t think of it in terms of just strictly gold price alone, it’s got to be market sentiment, it’s got to be our share price, it’s got be our partners position has to be considered, so it’s quite a variety of factors that we will take into consideration before we make that decision.

Okay. Thanks for the information. I appreciate that.

You are welcome. Thank you, Joe.

Thank you. Your next question comes from Jim Smith, a Private Investor. Your line is open.

Hello, Jim Smith, I am a stockholder, December 02, 2008, I am also old as MUD] and I did have questions, but they were thoroughly asked, I just want to complement the expertise and the dedication of the management team since I have been a stockholder and I especially want to complement Dr. Kaplan for his incredible ability to inspire in his vision especially the last two annual meeting statements that you made just keep up the good work and that’s all I have for you.

Thank you for calling in, Jim.

Thank you very much. You are very kind sir. Thank you.

Thank you. Your next question comes from David Lezinsky, a Private Investor. Your line is open.

Hi Greg, I just wanted to take this opportunity to thank you for being honorable and everything you said has panned out and it’s wonderful to see management live up to what they say. I also want to compare something. When it comes to landfills, everyday, a landfill loses money and it becomes less valuable, because it’s filling up with trash and eventually it will be full. And when you look at the gold mining industry, the major gold miners their minds become less valuable because they're digging up the gold every day. So they're going to need the replacement, and a replacement as I see it is mine like [Donlin] with that kind of quantity, so I guess my question to you is, is there a price where if someone came in tomorrow that another would love to bow to a major?

Well David, first I would thank you for joining the call. I think that’s another one, I will lateral to our Chairman and largest shareholder.

First of all, thank you for your question. And it also goes to something that Jim, your predecessor on the call also said our job is to make money for the shareholders and to do so consistent with our values, consistent with the honor and the integrity of the company and keeping faith with shareholders. As Greg said there are a lot of things which go into making a determination on when it’s right to go into production, the same could also be said on when it’s right to engage in an industrial transaction. Our job is to make money for shareholders. And as I said to do it with best practices from a cultural as well as professional standpoint Our motto, may sound a little corny, at Electrum is intelligence is a commodity, character is currency. And we will do what’s right for the shareholders. We have been in the story a long time. I can tell you that after 10 years not once have we ever not felt that we were so lucky that we should pinch ourselves that we are in the story. Markets go up, markets go down, we have been in depressed situations, we anticipate that in the future we will see a bubble in gold mining shares and if that bubble will be particularly obvious in those very, very, very few companies, which have great assets in safe jurisdictions. So, one day there may come a time when someone comes to us and pays us for the future. They are going to see like we do. We believe that the mine life of this deposit will more than double and perhaps even far beyond that. That’s the kind of thing in which great companies are built. So, our job is to do everything right, not cut corners, take the company up the value chain, be very happy when we go into production and always try to assess through the prism of being investors who understand how difficult it would be to replace in our portfolio, something like NOVAGOLD. I don’t believe we actually could, which is a big statement. And nonetheless look at that and say okay, what’s the right thing for shareholders. In the case of when it’s right to go into production, it’s not only when gold goes up, but when the shares are multiplying, that’s when you really know that the move is real. In the case of potential industrial transaction, there are so many different variables, but I can tell you something knowing that this could not be replaced in our portfolio by any company in the world today it would really have to be something that makes great sense for all of us and for all of you. Greg?

Thank you, Tom. Well, everyone thank you for participating in our call this morning and we look forward to updating everyone at the end of the next quarter.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you all may disconnect. Everyone, have a wonderful day.