Good day, ladies and gentlemen and welcome to the NOVAGOLD Fourth Quarter 2018 Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] I would now like to turn the call over to Mr. Melanie Hennessey, Vice President of Corporate Communications. Ma’am, you may begin.

Thank you, Victor. Good morning, everyone. We are pleased that you have joined us for NOVAGOLD’s fourth quarter and year-end financial results and also for an update on the Donlin project. On today’s call, we have Dr. Thomas Kaplan, NOVAGOLD’s Chairman; Greg Lang, NOVAGOLD’s President and CEO; and David Ottewell, NOVAGOLD’s Vice President and CFO. 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 disclosed in our Form 10-K and in our EDGAR and SEDAR filings and in various 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 year end results. What a year it’s been. The team’s perseverance has paid off, delivering on significant milestones that were first laid out when I joined the company in 2012. Key events in 2018 as shown on Slide 4, included the completion of the six year National Environmental Policy Act review with the receipt of the Donlin Gold joint Record of Decision and federal permits. Along with completing the federal permitting process the project received several major state permits throughout the year, which will continue through 2019. In July, we sold Galore Creek project to Newmont for a total consideration of up to $275 million. Further strengthening our treasury and allowing us to advance Donlin Gold up the value chain. The sale was a great outcome for both companies. In November, 62%, the Alaska voters rejected Ballot initiative 1, the Stand for Salmon initiative, proving once again, that this state already the second largest gold producer in the country remains open for business. In the same month, NOVAGOLD received an award for it’s permitting efforts at Donlin from the American Exploration & Mining Association for the design, strong safety culture, environmental stewardship and community engagement. Congratulations to the team. We are all very proud of these accomplishments and look forward to 2019. For those of you who are new to the company, NOVAGOLD’s 50% owned Donlin Gold project is located about 280 miles west of Anchorage, as shown on Slide 5. And is one of the largest undeveloped gold deposits in the world today. We now have a federally permitted project for development in Alaska, one of the most business friendly jurisdictions in the world, which welcomes responsible mine development. Slide…

Thank you, Greg. Slide 11 highlights our operating performance for the fourth quarter and year. Our fourth quarter net loss from continuing operations decreased by $2.7 million to $6.2 million, primarily due to lower permitting cost for Donlin Gold, no drilling programs in 2018 and higher interest income. For the year, share-based compensation expense included in G&A decreased by $2.6 million due to changes in the company's long-term incentive program. The vesting period for new stock options and for mature units were extended to three years from two years. Cash flows are highlighted on Slide 12. During the fourth quarter of 2018 and for the year, lower spending at Donlin Gold due to lower permitting costs and no drilling program was offset by working capital changes, primarily related to the timing of term deposit maturities. In the fourth quarter, discontinued operations provided $4.6 million from a refund of Galore Creek reclamation deposit. We ended the year with cash and term deposit of $167 million. On Slide 13, we note NOVAGOLD’s healthy treasury. In 2019, we expect to spend approximately $24 million, including $13 million for our share of Donlin Gold and $11 million for corporate, general and administrative costs. At Donlin Gold, 2019 activities includes the commencement of additional field work and more detailed engineering that will require multi-year commitment to support the application for Alaska Dam Safety certificate. Looking ahead, as mentioned by Greg, we have $100 million receivable from Newmont with an additional $75 million contingent on Galore Creek construction. Back to you, Greg.

Thank you, Dave. Now turning to a brief overview of our Donlin Gold asset on Slide 14, which highlights all the key attributes one would seek as a model and leader in the gold industry. With its noteworthy size, high grade, a mine life that spans decades, exploration upside, strong growth in partnerships and jurisdictional safety, Donlin Gold is unique on all counts. Beginning with size as shown on Slide 15, compared to other development stage projects with 39 million ounces of gold, Donlin is clearly at the top of the list and about five times the size of the peer average. Another key attribute shown on Slide 16 is the excellent quality of the deposit. Donlin grade at 2.25 grams is twice the world industry average and puts it in a category of its own as one of the highest grade known open-pit gold deposits. This is a very important quality in the context of the challenges facing the precious metals industry as reserve grades continue to decline and sources of emerging production become increasingly scarce. Donlin Gold has longevity with an anticipated production profile greater than 1 million ounces per year over a 27-year mine life. Clearly, in a league of its own when compared to the peer groups as shown on Slide 17. Once in production, the project will contribute great economic benefits to all our stakeholders for decades to come. To put the project size in perspective, the bubble diagram on Slide 18 shows the 10 largest producing gold mines in the world, of which only five were expected to produce more than a million ounces a year in 2018. Projects like Donlin are very scarce and they are needed to replenish reserves. Shown on Slide 19, we have roughly 1,400 drill holes in this deposit…

Thank you very much, Greg. Amidst the expressions of gratitude, which I share for Gerry, Gil and Dave, I’d like to take a moment to express my deepest gratitude to you, Greg. What you have done, what your team has done has been a credit to the mining industry. And I can certainly say that having been in this business for 25 years, the experience that I’ve had working with you and your management team has far and away been the most enjoyable that I have known. You have been and the team has given nothing but joy. And the results themselves of the company’s activities, I think, reaffirm that. In my remarks, I’d like to touch on a few things which I believe need to be highlighted and I shall also be doing so in writing in this year’s annual report. One of them is that having been in this business for a long period of time, I am like almost everyone else in this call, normally on the investors side of the table, vetting managements, vetting assets, taking a view on natural resources prices whether they were silver, copper, gold or natural gas for that matter. I can say that there has been, in my experience, very few examples of a company that said what it was going to do and actually did it to the letter. People forget that 10 years ago and this January is indeed the 10th anniversary of Electrum’s entry into the NOVAGOLD story. The company had all kinds of problems that made it almost uninvestable. When you look at the progress, which has been made over the last 10 years, you would realize that this is one of the great turnaround stories in the industry. But the period that I’d like to highlight…

Thank you, Tom. Victor, we’ll open the line for questions.

Yes, ma’am. [Operator Instructions]. And our first question comes from the line of John Bridges from JPMorgan. You may begin.

Good morning, Tom, Greg, everybody.You raised the issue, the very topical issue of the Barrick transition. Could you give us a little bit more color on what the market is thinking in terms of Donlin? You suggest the potential for sale. But from our perspective, the U.S. tax regime for the mining industry seems to be one of the best in the world at this time. So sale sounds a bit strange, but just wondering what you thought.

Greg, let me begin. John, I’m not saying that Barrick is going to sell. What I’m trying to highlight is that no matter how you slice it, no matter through which facet you look through the prism, if Barrick stays, it’s great. If Barrick leaves, it’ll be great. I love Mark Bristow. I think he is one of the greatest CEOs, not just to this generation, but in the mining space. And I’m not saying this to flatter him, I’ve known him for many years. Every dealing that I’ve ever had with him in every sphere of life has been marked by honor and goodwill. And he knows it. And he knows that and I think that he would say the same about me. Bringing him as a partner would be a dream. Is there any reason why Barrick should sell it? From my perspective, no. I agree, but I – Mark is a friend, but I respect that business is business. And if for any reason he and his team were focusing – what I’m saying is that any outcome will make our shares go higher. You have to understand, for the first time in the Randgold story, because Randgold really know how to market their virtues of which they have many, but whether it’s Randgold or any new buyer of that asset, we will have so much more positive exposure through having a partner who for the first time will champion and talk about the merits of the asset in a way that we have not seen in many years. So when I talk about that, I’m not speculating. And no, I have not been given one iota of a hint that Barrick would like to sell or redeploy Donlin, not remotely. I’m talking about it from the standpoint of my shareholders. I’m talking about it because it’s not a question mark in my eyes because whatever the outcome is, it’s going to be accretive, it’s going to lead to a higher share price. Do you really think that if I put NOVAGOLD into play, that it would be at this price? No way. We’re the company that I think the share price is no reflection of where it would trade in a sale and it’s no reflection of the fact that the company could actually buy back shares that it sold at $9.50. So things that make Larry Tisch famous. I’m not saying that I would ever be in his pants, but know how to be opportunistic. From all standpoints, we believe that we have been surrounded, is what I’m saying. Does that answer your question, John, or not?

Absolutely, absolutely. Yes, I just wanted a bit of clarification on that. I understand it’s very difficult one to address. Just as a follow-up, the scoping study of the Phase I project at Donlin, will that be released? Or is that still under review by Barrick?

John, this is Greg. As you might guess, a lot of new players have come into the mix in there: Greg Walker, John Steele, Catherine Raw. And they’re rapidly coming up the learning curve on Donlin. So, we’ll give them a little bit of time to get their feet on the ground and then we’ll deal with that question.

Excellent. Well done guys and congratulations on last year’s achievements.

Thank you, John.

And our next question comes from the line of Stephen Walker from RBC Capital. You may begin.

Thank you, operator. Good morning. Greg, just kind of a follow-up to John’s question. The NOVAGOLD budget for Donlin in 2019 is $13 million. Has Barrick committed to its 50% share of the joint venture at this time? Are they going to be funding their share of the $13 million – excuse me, their $13 million which is their 50% share?

Stephen, they have committed to fully funding their share. And we’re continuing our dialogue with Barrick on other additional work we may undertake in 2019.

Great. Thank you. And there’s a comment in the release that talks about the need for engineering, multiyear engineering, a detailed engineering for the tailings. Can you talk a little bit about that? And what’s required for that particular project – for that aspect of the project?

Sure, Stephen. Final permits, we have all the permits in hand, essentially, to begin work at the site, if we were so inclined. But some of the facilities, the tailings dam is certainly one, require fully engineered detailed drawings before the final permits are issued. So the work that we’re undertaking this year is to advance the final design of the tailings dam and other water retention and control structures throughout the project site.

Perfect. And Barrick’s committed to that process, from the sounds of it, is that in fact correct?

That is indeed correct. They’re 100% committed and the Donlin budget has been approved by the Donlin Gold board.

One last question. There was no optimization project update as was asked by John, am I correct in my assumption that the pre-existing projects team that you have been working with is either no longer there or no longer working on the Donlin project? And do you, in fact, have the liaison that you had in the first half of the year or the first three quarters of the year that are working with you on the optimization study?

Yes. We do, Stephen. Andy Cole, the Donlin Gold project General Manager who’s the Barrick secondee remains with the project as do other Barrick technical people. And as I mentioned to John, Catherine Raw, Greg Walker and John Steele, who are somewhat new to Donlin, are rapidly getting up to speed on the project. So we’ve had numerous review meetings with the new players.

Perfect. That’s very helpful. And it’s good to hear that Andy is still involved in the project. Thank you, Greg. That’s all my questions.

Thank you, Stephen.

[Operator Instructions] Our next question will come from the line of Howie Flinker from Flinker & Co. You may begin.

Hi, Tom, hi, Greg, hi, Melanie. I just want to point out that, Tom, your connection was spotty. So on the replay, you might try to clean that up.

Thank you, Howie.

Thanks, Howie.

You’re welcome. That’s all for me.

Thank you again, Howie.

And our next question comes from the line of David Lapinski as a Private Investor. You may begin.

Yes, good morning, Greg. Mark Bristow has publicly said that Barrick wants to divest of any mine that doesn’t produce 1 million ounces or greater. And that being the case, it seems to me that Donlin is going to produce 1 million plus a year. And taking that into account, doesn’t it make sense that Barrick Gold instead of selling would be the buyer of NovaGold to produce that sizable quantity? I mean, I assure you there's talk going both ways, but to me it's a no-brainer that he should acquire NovaGold at prices today, which are ridiculously low because if we take into account the 20 million ounces that NovaGold owns in the ground. And let's just say hypothetically you put a value of $1,000 an ounce on that, that's $20 billion asset. Now NovaGold, when you take into account your cash and cash receivables, your market cap is $900 billion. So you're talking about 20 times the price of your market cap. So if you want to be conservative, that would be a $80 price. So if you want to be conservative and you cut it in half to $40, OK, that's half the price. OK, let's be conservative again. Let's divide that price in half again to $20, OK, and that's realistic. That means a share price for NovaGold of at least $20 on a double conservative area, would you agree with that?

Well, I do like your math, David. Thank you. But I do think there is certainly a lot of potential in our stock, particularly looking at current levels.

Well, the largest shareholders sell – would the largest shareholder, I forgot your name, sir.

Tom Kaplan.

Don, would you sell at $15? Because I would vote it down. I would vote it down if it's $15.

First of all, bless your heart. I really believe that while some people may have been rolling their eyes while you were talking about the upside, let me share with you, this would be the silliest stock in the gold space to short. It doesn’t trade at a value which we would call a market clearing price if the stock were the object of a takeover. And at the same time as we say, it’s the only one in the space or one of the only ones in the space, which truly can’t go out of business, wouldn’t hemorrhage cash and wouldn’t have to dilute its share offering, if gold were to go down before it goes up. And we have two scenarios on the gold price. One is that like Jeffrey Gundlach calls it, gold is coiling like a snake and has actually broken out if you look at certain charts. And there’s another one where we – scenario B, where we have one more head-fake to the downside before we see you [Audio Dip] quite high. I don’t really know. But as an investor and we are considered sophisticated investors, our job is to look at every conceivable scenario focused on the downside, because if downside is taken care of the upside will take care of itself. And the upside for that is that we will see new all-time highs in gold. I’d said before that I do believe that for a lot of the reasons that we’ve cited for just within the gold industry, we will see a new equilibrium price of $3,000 to $5,000 at some point in the future and that’s wonderful. But, of course, you’ve still got to get to $1,900 to go to $3,000. At $1,900, the NPV of this project based on…

Yes, but you know it’s interesting to two points. One, being I feel safer owning NOVAGOLD stock than I do having money in a bank. And on top of that, the Chinese – I’ve been doing business with China for 40 years. Okay? I sell China wastepaper and they are the market. And every time the price gets too high, they back away. So the price comes down, then they come back in with new orders. So China in the last week announced they’re increase in gold reserves to something like 1,800 to 1,900 tons, which is a total lie. Because if they were to come out, I firmly believe that China has 15,000 to 20,000 tons because of the Chinese or the Shanghai Oil Exchange and the option to convert Yuan into gold at the Shanghai Gold Exchange. Okay, they can’t just have 1,800 tons to run a program like that. And if they were to announce to the world that they had 15,000 tons, you know as well as I do, the price would rise $500 in a day.

I completely agree with you and I agree with your assessment. I have no doubt that the official numbers of the Chinese gold reserves are understated, that what they talk about is maybe what they have sitting in one aspect of the Bank of China, but they have so many parastatals that I do believe are accumulating gold. And this is not because I’m a gold buff or any other thing, it’s in China’s strategic interest to wait for the time to accumulate, when they can ...

That’s right, that’s right, to keep the price down.

Yes, it’s not in their...

To keep the price down.

It’s very rarely that when someone when they’re accumulating to broadcast that they’re accumulating. And the Chinese have never gone to Goldman and said, give me an order for 10 million ounces or hit my bid. If the World Bank or the IMF or Germany, for example, not that it would happen, I don’t see any official sector statement. But if they go to the Chinese and show them something that would tempt them because the size would be big enough that it would achieve an objective, they might reveal themselves. But otherwise, what’s most likely is that the Chinese do have more gold now than the United States, officially, and they will wait to announce it when it’s optimal for them in order to be able to broadcast that for one of the most obvious areas embedded within the neocortex of all humans that in gold they have become the middle kingdom.

That’s right, gold is money, everything else is credit. That’s right.

I think they see it. And I think that one day that will be announced. And woe unto the shorts because if they ever do that from a strategic point, gold will hit $500 in Tokyo and it will be mayhem.

There’s – of course, with all the central banks and everything that’s going on, is the world is going to have to go back to hard money and what that looks like, their strategic drawing rights with gold as part of the asset, I don’t know. But it’s inevitable. And you know what else is interesting to me? For – the first person that asked the question was JPMorgan, okay? JPMorgan, from what I’ve read, they’ve got 11,000 tons of silver in their safe under – in New York, is that true?

I don’t know the answer to that.

Why are they holding 11,000 tons?

You’d have to – look...

I know I’m taking a lot of time, but what you have to understand is that this manipulation by the big banks on the price of gold and silver, okay, has done direct harm to NOVAGOLD shareholders, because you know as well as I do, that if oil goes up, the oil stocks go up. If gold goes up, the gold stocks go up. If they suppress it and push it down, the gold stocks go down. So NOVAGOLD has damages. And whether you ever want to pursue that, there’s litigation going on all over the place right now.

Well, I can say that JPMorgan has been a wonderful supporter of the company over the years. So we’re definitely not pursuing anything against them. But the truth of the matter is that I do believe the fundamental clout, I believe that gold will break out from the declining wedge pattern from which we see. And again, it could have one more head-fake, but I do believe that the path of resistance, least resistance for gold is multiplying. It has to go down from $950 to shake every weak hand out. And I don’t think it does. I, in fact, I know it doesn’t need to do that. But if it had to, to make some mining companies go out of business, shakeout weak hands. We don’t know, that’s outside of our control. But I do believe with absolute conviction that we would see a v-bottom and a reversal that would take us past all-time highs. We saw it before. We saw it with silver in the early 2000s, it went up to six, got people excited. Get a head-fake back down to four then went back to six, the people were shaken out, were paralyzed. And it began a journey that ultimately took silver back to 50. So, I do see that, but if you may, I’m happy to continue this conversation with you off-line. If you give Melanie your number, I’m willing to call you personally and spend as much time talking about this as we can, but I think we should give some people – some other people a chance online, if that’s all right?

That’s fine. Thank you very much.

You’re very welcome. Thank you.

Thank you. And I’m actually showing no further questions at this time. I’d like to turn the call back to Greg Lang, President and CEO, for closing remarks.

Well, everyone, thank you for participating in our call and enjoy the rest of your day.

Thank you, and I did mean it. Give me a call on the Maytag repair [ph]. I’m happy to take your calls and continue talking. Thank you from me.

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