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British Columbia
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N/A
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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789 West Pender Street, Suite 720
Vancouver, British Columbia
Canada
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V6C 1H2
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(Address of Principal Executive Offices)
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(Zip Code)
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(604) 669-6227
(Registrant’s Telephone Number, Including Area Code)
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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| PART I - FINANCIAL INFORMATION |
1
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||
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Item 1.
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Financial Statements
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1
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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14
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Item 3.
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Quantitative and Qualitative Disclosures about Market Risk
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18
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Item 4.
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Controls and Procedures
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18
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| PART II - OTHER INFORMATION |
19
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||
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Item 1.
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Legal Proceedings
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19
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Item 1A.
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Risk Factors
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19
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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19
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Item 3.
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Defaults Upon Senior Securities
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19
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Item 4.
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Mine Safety Disclosures
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19
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Item 5.
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Other Information
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19
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Item 6.
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Exhibits
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19
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·
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our ability to achieve production at any of our mineral exploration and development properties;
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·
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estimated capital costs, operating costs, production and economic returns;
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·
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estimated metal pricing, metallurgy, mineability, marketability and operating and capital costs, together with other assumptions underlying our resource and reserve estimates;
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·
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our expected ability to develop adequate infrastructure and that the cost of doing so will be reasonable;
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·
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assumptions that all necessary permits and governmental approvals will be obtained;
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·
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assumptions made in the interpretation of drill results, the geology, grade and continuity of our mineral deposits;
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·
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our expectations regarding demand for equipment, skilled labor and services needed for exploration and development of mineral properties; and
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·
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our activities will not be adversely disrupted or impeded by development, operating or regulatory risks.
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·
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uncertainty of whether there will ever be production at our mineral exploration and development properties;
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·
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uncertainty of estimates of capital costs, operating costs, production and economic returns;
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·
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uncertainties related to the assumptions underlying our resource and reserve estimates, such as metal pricing, metallurgy, mineability, marketability and operating and capital costs;
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·
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risks related to our ability to commence production and generate material revenues or obtain adequate financing for our planned exploration and development activities;
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·
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risks related to our ability to finance the development of our mineral properties through external financing, strategic alliances, the sale of property interests or otherwise;
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·
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risks related to the third parties on which we depend for our exploration and development activities;
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·
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dependence on cooperation of joint venture partners in exploration and development of properties;
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·
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credit, liquidity, interest rate and currency risks;
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·
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risks related to market events and general economic conditions;
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·
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uncertainty related to inferred mineral resources;
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·
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risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of our mineral deposits;
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·
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risks related to lack of infrastructure required to develop, construct, and operate our mineral properties;
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·
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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;
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·
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the risk that permits and governmental approvals necessary to develop and operate mines on our properties will not be available on a timely basis, subject to reasonable conditions, or at all;
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·
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commodity price fluctuations;
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·
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risks related to governmental regulation and permits, including environmental regulation;
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·
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risks related to the need for reclamation activities on our properties and uncertainty of cost estimates related thereto;
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·
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uncertainty related to title to our mineral properties;
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·
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uncertainty related to unsettled aboriginal rights and title in British Columbia;
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·
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our history of losses and expectation of future losses;
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·
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uncertainty as to the outcome of potential litigation;
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·
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uncertainty inherent in litigation including the effects of discovery of new evidence or advancement of new legal theories, the difficulty of predicting decisions of judges and juries and the possibility that decisions may be reversed on appeal;
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·
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risks related to default under our unsecured convertible notes;
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·
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risks related to our majority shareholder;
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·
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risks related to increases in demand for equipment, skilled labor and services needed for exploration and development of mineral properties, and related cost increases;
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·
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increased competition in the mining industry;
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·
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our need to attract and retain qualified management and technical personnel;
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·
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risks related to our current practice of not using hedging arrangements;
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·
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uncertainty as to our ability to acquire additional commercially mineable mineral rights;
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·
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risks related to the integration of potential new acquisitions into our existing operations;
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·
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risks related to unknown liabilities in connection with acquisitions;
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·
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risks related to conflicts of interests of some of the directors of the Company;
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·
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risks related to global climate change;
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·
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risks related to opposition to our operations at our mineral exploration and development properties from non-governmental organizations or civil society;
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·
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uncertainty as to our ability to maintain the adequacy of internal control over financial reporting as per the requirements of the Sarbanes-Oxley Act; and
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·
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increased regulatory compliance costs relating to the Dodd-Frank Act.
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Item 1.
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Financial Statements
|
|
NOVAGOLD RESOURCES INC.
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|||||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||||
|
(Unaudited, US dollars in thousands)
|
|||||||||
|
At May 31,
2014
|
At November 30,
2013 |
||||||||
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ASSETS
|
|||||||||
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Cash and cash equivalents
|
$ | 71,329 | $ | 81,262 | |||||
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Investments (note 4)
|
105,000 | 110,000 | |||||||
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Other assets
|
3,769 | 5,549 | |||||||
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Current assets
|
180,098 | 196,811 | |||||||
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Investments (note 4)
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1,373 | 1,280 | |||||||
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Investment in affiliates (note 5)
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302,458 | 307,455 | |||||||
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Mineral properties
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53,704 | 54,813 | |||||||
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Deferred income taxes
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9,113 | 9,728 | |||||||
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Other assets
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8,478 | 8,599 | |||||||
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Total assets
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$ | 555,224 | $ | 578,686 | |||||
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LIABILITIES
|
|||||||||
|
Accounts payable and accrued liabilities
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$ | 1,853 | $ | 3,492 | |||||
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Debt (note 6)
|
14,309 | — | |||||||
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Derivative liabilities (note 7)
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58 | — | |||||||
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Other liabilities
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813 | 861 | |||||||
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Current liabilities
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17 , 033 | 4,353 | |||||||
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Debt (note 6)
|
74,174 | 85,298 | |||||||
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Derivative liabilities (note 7)
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— | 83 | |||||||
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Deferred income taxes
|
22,410 | 23,303 | |||||||
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Total liabilities
|
113,617 | 113,037 | |||||||
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Commitments and contingencies (note 14)
|
|||||||||
|
EQUITY
|
|||||||||
|
Common shares
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1,936,336 | 1,933,953 | |||||||
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Contributed surplus
|
70,361 | 66,811 | |||||||
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Accumulated deficit
|
(1,620,991 | ) | (1,599,619 | ) | |||||
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Accumulated other comprehensive income
|
55,901 | 64,504 | |||||||
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Total equity
|
441,607 | 465,649 | |||||||
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Total liabilities and equity
|
$ | 555,224 | $ | 578,686 | |||||
|
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
|
|||||||||
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These condensed consolidated interim financial statements are authorized for issue by the Board of Directors on July 8, 2014. They are signed on the Company’s behalf by:
|
|||||||||
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/s/ Gregory A. Lang, Director
/s/ Anthony Walsh, Director
|
|
||||||||
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NOVAGOLD RESOURCES INC.
|
|
CONDENSED CONSOLIDATED
INTERIM STATEMENTS OF CASH FLOWS
|
|
(Unaudited, US dollars in thousands)
|
|
Three months ended
May 31,
|
Six months ended
May 31,
|
|||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
|||||||||||||
|
Operating expenses:
|
||||||||||||||||
|
General and administrative (note 9)
|
$ | 4,640 | $ | 5,978 | $ | 12,342 | $ | 14,994 | ||||||||
|
Equity loss of affiliates (note 5)
|
3,616 | 6,238 | 7,237 | 11,721 | ||||||||||||
|
Depreciation
|
8 | 9 | 18 | 19 | ||||||||||||
| 8,264 | 12,225 | 19,597 | 26,734 | |||||||||||||
|
Loss from operations
|
(8,264 | ) | (12,225 | ) | (19,597 | ) | (26,734 | ) | ||||||||
|
Other income (expense):
|
||||||||||||||||
|
Interest income
|
150 | 236 | 466 | 446 | ||||||||||||
|
Interest expense
|
(1,562 | ) | (2,491 | ) | (3,620 | ) | (6,539 | ) | ||||||||
|
Foreign exchange gain (loss)
|
(1,101 | ) | 974 | 1,348 | 8,812 | |||||||||||
|
Gain on derivative liabilities (note 7)
|
140 | 3,667 | 25 | 391 | ||||||||||||
|
Other
|
— | 6 | — | 15 | ||||||||||||
| (2,373 | ) | 2,392 | (1,781 | ) | 3,125 | |||||||||||
|
Loss before income taxes
|
(10,637 | ) | (9,833 | ) | (21,378 | ) | (23,609 | ) | ||||||||
|
Income tax recovery (expense)
|
(44 | ) | — | 6 | — | |||||||||||
|
Net loss
|
$ | (10,681 | ) | $ | (9,833 | ) | $ | (21,372 | ) | $ | (23,609 | ) | ||||
|
Loss per common share
|
||||||||||||||||
|
Basic and diluted
|
$ | (0.03 | ) | $ | (0.03 | ) | $ | (0.07 | ) | $ | (0.08 | ) | ||||
|
Weighted average shares outstanding
|
||||||||||||||||
|
Basic and diluted (thousands)
|
317,295 | 316,634 | 317,117 | 310,081 | ||||||||||||
|
NOVAGOLD RESOURCES INC.
|
||||||||||||||||
|
CONDENSED CONSOLIDATED
INTERIM STATEMENTS OF COMPREHENSIVE LOSS
|
||||||||||||||||
|
(Unaudited, US dollars in thousands)
|
||||||||||||||||
|
Three months ended
May 31,
|
Six months ended
May 31,
|
|||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
|||||||||||||
|
Net loss
|
$ | (10,681 | ) | $ | (9,833 | ) | $ | (21,372 | ) | $ | (23,609 | ) | ||||
|
Items that may be reclassified to Net loss:
|
||||||||||||||||
|
Unrealized gains (losses) on marketable securities
|
||||||||||||||||
|
Unrealized holding gains (losses) during period
|
(210 | ) | (372 | ) | 109 | (644 | ) | |||||||||
|
Net unrealized gain (loss), net of $(44), $nil, $6 and $nil tax expense (recovery)
|
(210 | ) | (372 | ) | 109 | (644 | ) | |||||||||
|
Foreign currency translation adjustments
|
8,375 | (2,994 | ) | (8,712 | ) | (24,946 | ) | |||||||||
|
Other comprehensive income (loss)
|
8,165 | (3,366 | ) | (8,603 | ) | (25,590 | ) | |||||||||
|
Comprehensive loss
|
$ | (2,516 | ) | $ | (13,199 | ) | $ | (29,975 | ) | $ | (49,199 | ) | ||||
|
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
|
||||||||||||||||
|
NOVAGOLD RESOURCES INC.
|
|
CONDENSED CONSOLIDATED
INTERIM STATEMENTS OF CASH FLOWS
|
|
(Unaudited, US dollars in thousands)
|
|
Three Months Ended
May 31,
|
Six Months Ended
May 31,
|
|||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
|
Operating activities:
|
||||||||||||||||
|
Net loss
|
$
|
(10,681
|
)
|
$
|
(9,833
|
)
|
$
|
(21,372
|
)
|
$
|
(23,609
|
)
|
||||
|
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||||||||||
|
Depreciation
|
8
|
9
|
18
|
19
|
||||||||||||
|
Deferred income taxes
|
44
|
—
|
(6
|
)
|
—
|
|||||||||||
|
Foreign exchange (gain) loss
|
1,101
|
(974
|
)
|
(1,348
|
)
|
(8,812
|
)
|
|||||||||
|
Share-based compensation
|
1,907
|
1,440
|
6,565
|
6,982
|
||||||||||||
|
Equity losses of affiliates
|
3,616
|
6,238
|
7,237
|
11,721
|
||||||||||||
|
Gain on derivative liabilities
|
(140
|
)
|
(3,667
|
)
|
(25
|
)
|
(391
|
)
|
||||||||
|
Other
|
1,235
|
947
|
2,810
|
4,974
|
||||||||||||
|
Withholding tax paid on stock based compensation
|
—
|
(34
|
)
|
(636
|
)
|
(619
|
)
|
|||||||||
|
Net change in operating assets and liabilities (note 11)
|
2,436
|
(338
|
)
|
1,069
|
(2,357
|
)
|
||||||||||
|
Net cash used in operations
|
(474
|
)
|
(6,212
|
)
|
(5,688
|
)
|
(12,092
|
)
|
||||||||
|
Investing activities:
|
||||||||||||||||
|
Additions to property and equipment
|
—
|
—
|
(22
|
)
|
—
|
|||||||||||
|
Proceeds from term deposits
|
60,000
|
—
|
110,000
|
—
|
||||||||||||
|
Purchases of term deposits
|
(55,000
|
)
|
—
|
(105,000
|
)
|
—
|
||||||||||
|
Funding of affiliates (note 5)
|
(5,569
|
)
|
(5,872
|
)
|
(9,191
|
)
|
(8,965
|
)
|
||||||||
|
Net cash used in investing activities
|
(569
|
)
|
(5,872
|
)
|
(4,213
|
)
|
(8,965
|
)
|
||||||||
|
Financing activities:
|
||||||||||||||||
|
Proceeds from share issuance, net
|
—
|
—
|
—
|
54,359
|
||||||||||||
|
Repayment of debt
|
—
|
(72,821
|
)
|
—
|
(72,821
|
)
|
||||||||||
|
Net cash provided from financing activities
|
—
|
(72,821
|
)
|
—
|
(18,462
|
)
|
||||||||||
|
Effect of exchange rate changes on cash
|
50
|
(44
|
)
|
(32
|
)
|
(170
|
)
|
|||||||||
|
Decrease in cash and cash equivalents
|
(993
|
)
|
(84,949
|
)
|
(9,933
|
)
|
(39,689
|
)
|
||||||||
|
Cash and cash equivalents at beginning of period
|
72,322
|
299,927
|
81,262
|
254,667
|
||||||||||||
|
Cash and cash equivalents at end of period
|
$ | 71,329 | $ | 214,978 | $ | 71,329 | $ | 214,978 | ||||||||
|
NOVAGOLD RESOURCES INC.
|
|
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF EQUITY
|
|
(Unaudited, US dollars and shares in thousands)
|
| Accumulated | ||||||||||||||||||||||||
| other | ||||||||||||||||||||||||
|
Common shares
|
Contributed | Accumulated | comprehensive | Total | ||||||||||||||||||||
|
Shares
|
Amount
|
surplus
|
deficit
|
income
|
equity
|
|||||||||||||||||||
|
November 30, 2012
|
279,927 | $ | 1,462,102 | $ | 454,260 | $ | (1,536,859 | ) | $ | 97,308 | $ | 476,811 | ||||||||||||
|
Net loss
|
— | — | — | (62,760 | ) | — | (62,760 | ) | ||||||||||||||||
|
Other comprehensive loss
|
— | — | — | — | (32,804 | ) | (32,804 | ) | ||||||||||||||||
|
Warrants exercised
|
36,529 | 469,150 | (397,052 | ) | — | — | 72,098 | |||||||||||||||||
|
Share-based compensation and related share issuances
|
205 | 2,701 | 9,603 | — | — | 12,304 | ||||||||||||||||||
|
November 30, 2013
|
316,661 | $ | 1,933,953 | $ | 66,811 | $ | (1,599,619 | ) | $ | 64,504 | $ | 465,649 | ||||||||||||
|
Net loss
|
— | — | — | (21,372 | ) | — | (21,372 | ) | ||||||||||||||||
|
Other comprehensive loss
|
— | — | — | — | (8,603 | ) | (8,603 | ) | ||||||||||||||||
|
Share-based compensation and related share issuances
|
627 | 2,383 | 3,550 | — | — | 5,933 | ||||||||||||||||||
|
May 31, 2014
|
317,288 | $ | 1,936,336 | $ | 70,361 | $ | (1,620,991 | ) | $ | 55,901 | $ | 441,607 | ||||||||||||
|
NOVAGOLD RESOURCES INC.
|
|
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
|
(Unaudited, US dollars in thousands except per share amounts)
|
|
NOVAGOLD RESOURCES INC.
|
|
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
|
(Unaudited, US dollars in thousands except per share amounts)
|
| At May 31, 2014 | |||||||||||||||||
|
Cost
|
Unrealized
|
Fair Value
|
|||||||||||||||
|
Basis
|
Gain
|
Loss
|
Basis
|
||||||||||||||
|
Current:
|
|||||||||||||||||
|
Term deposits
|
$ | 105,000 | $ | — | $ | — | $ | 105,000 | |||||||||
|
Long-term:
|
|||||||||||||||||
|
Marketable equity securities
|
$ | 1,045 | $ | 376 | $ | (48 | ) | $ | 1,373 | ||||||||
| At November 30, 2013 | |||||||||||||||||
|
Cost
|
Unrealized
|
Fair Value
|
|||||||||||||||
|
Basis
|
Gain
|
Loss
|
Basis
|
||||||||||||||
|
Current:
|
|||||||||||||||||
|
Term deposits
|
$ | 110,000 | $ | — | $ | — | $ | 110,000 | |||||||||
|
Long-term:
|
|||||||||||||||||
|
Marketable equity securities
|
$ | 1,067 | $ | 213 | $ | — | $ | 1,280 | |||||||||
|
At May 31,
2014
|
At November 30,
2013 |
|||||||
|
Donlin Gold LLC, Alaska, U.S.A
|
$ | 3,480 | $ | 1,720 | ||||
|
Galore Creek Partnership, British Columbia, Canada
|
298,978 | 305,735 | ||||||
| $ | 302,458 | $ | 307,455 | |||||
|
NOVAGOLD RESOURCES INC.
|
|
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
|
(Unaudited, US dollars in thousands except per share amounts)
|
|
Six months ended May 31,
|
||||||||
|
2014
|
2013
|
|||||||
|
Balance – beginning of period
|
$ | 1,720 | $ | 4,185 | ||||
|
Funding
|
7,746 | 6,898 | ||||||
|
Share of losses
|
(5,986 | ) | (6,528 | ) | ||||
|
Balance – end of period
|
$ | 3,480 | $ | 4,555 | ||||
|
At May 31,
2014
|
At November 30,
2013 |
|||||||
|
Current assets: Cash, prepaid expenses and other receivables
|
$ | 4,139 | $ | 3,390 | ||||
|
Non-current assets: Property and equipment
|
484 | 541 | ||||||
|
Non-current assets: Mineral property
|
32,692 | 32,692 | ||||||
|
Current liabilities: Accounts payable and accrued liabilities
|
(1,143 | ) | (2,211 | ) | ||||
|
Non-current liabilities: Reclamation obligation
|
(692 | ) | (692 | ) | ||||
|
Net assets
|
$ | 35,480 | $ | 33,720 | ||||
|
Six months ended May 31,
|
||||||||
|
2014
|
2013
|
|||||||
|
Balance – beginning of period
|
$ | 305,735 | $ | 335,086 | ||||
|
Funding
|
1,445 | 2,067 | ||||||
|
Share of losses
|
(1,250 | ) | (5,193 | ) | ||||
|
Exploration tax credit
|
(693 | ) | — | |||||
|
Foreign currency translation
|
(6,259 | ) | (13,879 | ) | ||||
|
Balance – end of period
|
$ | 298,978 | $ | 318,081 | ||||
|
At May 31,
2014
|
At November 30,
2013 |
|||||||
|
Current assets: Cash, prepaid expenses and other receivables
|
$ | 532 | $ | 377 | ||||
|
Non-current assets: Property and equipment
|
268,733 | 263,797 | ||||||
|
Current liabilities: Accounts payable and accrued liabilities
|
(462 | ) | (483 | ) | ||||
|
Non-current liabilities: Payables and reclamation obligation
|
(8,724 | ) | (8,533 | ) | ||||
|
Net assets
|
$ | 260,079 | $ | 255,158 | ||||
|
NOVAGOLD RESOURCES INC.
|
|
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
|
(Unaudited, US dollars in thousands except per share amounts)
|
|
Three months ended May 31,
|
Six months ended May 31,
|
|||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
|||||||||||||
|
Donlin Gold LLC:
|
||||||||||||||||
|
Mineral property expenditures
|
$ | 3,083 | $ | 3,480 | $ | 5,893 | $ | 6,420 | ||||||||
|
Depreciation
|
48 | 54 | 94 | 108 | ||||||||||||
| 3,131 | 3,534 | 5,987 | 6,528 | |||||||||||||
|
Galore Creek Partnership:
|
||||||||||||||||
|
Mineral property expenditures
|
47 | 422 | 328 | 932 | ||||||||||||
|
Care and maintenance expense
|
438 | 696 | 922 | 1,050 | ||||||||||||
|
Depreciation
|
— | 1,586 | — | 3,211 | ||||||||||||
| 485 | 2,704 | 1,250 | 5,193 | |||||||||||||
| 3,616 | $ | 6,238 | $ | 7,237 | $ | 11,721 | ||||||||||
|
At May 31,
2014
|
At November 30,
2013 |
|||||||
|
Convertible notes
|
$ | 14,309 | $ | 13,570 | ||||
|
Promissory note
|
74,174 | 71,728 | ||||||
| 88,483 | 85,298 | |||||||
|
Less: current portion
|
(14,309 | ) | — | |||||
| $ | 74,174 | $ | 85,298 | |||||
|
Six months ended May 31,
|
||||||||
|
2014
|
2013
|
|||||||
|
Balance – beginning of period
|
$ | 13,570 | $ | 73,606 | ||||
|
Repurchases of Notes
|
— | (58,017 | ) | |||||
|
Accretion expense
|
739 | 2,472 | ||||||
|
Balance – end of period
|
$ | 14,309 | $ | 18,061 | ||||
|
At May 31,
2014
|
At November 30,
2013 |
||||||||
|
Principal amount
|
$ | 15,829 | $ | 15,829 | |||||
|
Unamortized debt discount
|
(1,520 | ) | (2,259 | ) | |||||
| 14,309 | 13,570 | ||||||||
|
Embedded derivative
|
58 | 83 | |||||||
|
Net carrying amount
|
$ | 14,367 | $ | 13,653 | |||||
|
NOVAGOLD RESOURCES INC.
|
|
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
|
(Unaudited, US dollars in thousands except per share amounts)
|
|
Six months ended May 31,
|
||||||||
|
2014
|
2013
|
|||||||
|
Balance – beginning of period
|
$ | 83 | $ | 17,934 | ||||
|
Repurchases of Notes
|
— | (14,804 | ) | |||||
|
Gain on embedded derivative liabilities for the period
|
(25 | ) | (2,853 | ) | ||||
|
Balance – end of period
|
$ | 58 | $ | 277 | ||||
|
Level 1
— Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
|
|
Level 2
— Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
|
|
Level 3
— Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
|
|
NOVAGOLD RESOURCES INC.
|
|
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
|
(Unaudited, US dollars in thousands except per share amounts)
|
|
Fair value at May 31, 2014
|
||||||||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
|
Assets:
|
||||||||||||||||
|
Cash equivalents
|
$ | 71,329 | $ | — | $ | 71,329 | $ | — | ||||||||
|
Term deposits
|
105,000 | — | 105,000 | — | ||||||||||||
|
Marketable equity securities
|
1,373 | 1,373 | — | — | ||||||||||||
|
Liabilities:
|
||||||||||||||||
|
Embedded derivative liabilities (note 7)
|
58 | — | — | 58 | ||||||||||||
|
Fair value at November 30, 2013
|
||||||||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
|
Assets:
|
||||||||||||||||
|
Cash equivalents
|
$ | 81,262 | $ | — | $ | 81,262 | $ | — | ||||||||
|
Term deposits
|
110,000 | — | 110,000 | — | ||||||||||||
|
Marketable equity securities
|
1,280 | 1,280 | — | — | ||||||||||||
|
Liabilities:
|
||||||||||||||||
|
Embedded derivative liabilities (note 7)
|
83 | — | — | 83 | ||||||||||||
|
Three months ended May 31,
|
Six months ended May 31,
|
|||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
|||||||||||||
|
Salaries
|
$ | 1,470 | $ | 1,267 | $ | 3,103 | $ | 2,636 | ||||||||
|
Share-based compensation
|
1,907 | 1,440 | 6,565 | 6,982 | ||||||||||||
|
Office expense
|
506 | 1,557 | 1,168 | 2,521 | ||||||||||||
|
Professional fees
|
388 | 1,099 | 782 | 1,928 | ||||||||||||
|
Corporate development
|
369 | 615 | 724 | 927 | ||||||||||||
| $ | 4,640 | $ | 5,978 | $ | 12,342 | $ | 14,994 | |||||||||
|
Three months ended May 31,
|
Six months ended May 31,
|
|||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
|||||||||||||
|
Stock options
|
$ | 831 | $ | 519 | $ | 4,567 | $ | 4,858 | ||||||||
|
Performance share unit plan
|
1,030 | 864 | 1,898 | 2,004 | ||||||||||||
|
Deferred share unit plan
|
46 | 57 | 100 | 120 | ||||||||||||
| $ | 1,907 | $ | 1,440 | $ | 6,565 | $ | 6,982 | |||||||||
|
NOVAGOLD RESOURCES INC.
|
|
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
|
(Unaudited, US dollars in thousands except per share amounts)
|
|
Three months ended May 31,
|
Six months ended May 31,
|
|||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
|||||||||||||
|
Decrease in receivables, deposits and prepaid amounts
|
2,549 | $ | 249 | $ | 2,504 | $ | 394 | |||||||||
|
Decrease in accounts payable and accrued liabilities
|
(113 | ) | (587 | ) | (1,435 | ) | (2,751 | ) | ||||||||
| 2,436 | $ | (338 | ) | $ | 1,069 | $ | (2,357 | ) | ||||||||
|
May 31,
2014
|
November 30,
2013 |
|||||||
|
Unrealized net gain on marketable securities, net of $35 and $29 tax expense, respectively
|
$ | 293 | $ | 184 | ||||
|
Foreign currency translation adjustments
|
55,608 | 64,320 | ||||||
| $ | 55,901 | $ | 64,504 | |||||
|
May 31,
2014
|
November 30, 2013
|
|||||||
|
Current:
|
||||||||
|
Donlin Gold LLC
|
$ | 39 | $ | 1,750 | ||||
|
Galore Creek Partnership
|
1,657 | 1,690 | ||||||
| $ | 1,696 | $ | 3,440 | |||||
|
Long-term:
|
||||||||
|
Galore Creek Partnership
|
$ | 4,048 | $ | 4,132 | ||||
|
NOVAGOLD RESOURCES INC.
|
|
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
|
(Unaudited, US dollars in thousands except per share amounts)
|
|
Six months ended May 31,
|
||||||||
|
2014
|
2013
|
|||||||
|
Interest received
|
$ | 343 | $ | 293 | ||||
|
Interest paid
|
$ | 435 | $ | 2,612 | ||||
|
Income taxes paid
|
$ | 295 | $ | — | ||||
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
·
|
Advance permitting of the Donlin Gold project.
|
|
|
·
|
Maintain a healthy balance sheet.
|
|
|
·
|
Undertake Galore Creek technical studies to build on successful 2012 and 2013 drill results.
|
|
|
·
|
Evaluate opportunities to monetize the value of Galore Creek.
|
|
|
·
|
Maintain an effective corporate social responsibility program.
|
|
|
·
|
An outline of the purpose and the need for the proposed mine. The management of Donlin Gold LLC and its Native Corporation partners, Calista Corporation and The Kuskokwim Corporation (TKC), jointly contributed to the preparation of this section which highlights the need for the development of the proposed mine and the benefit it would bring to its stakeholders.
|
|
|
·
|
The identification and analysis of a reasonable
range of
alternatives to the mine development proposed by Donlin Gold which comprise variations on certain mine site facility designs, local transportation options, and power supply options.
|
|
|
·
|
The preparation of an environmental analysis of the proposed action and reasonable alternatives (including a no action alternative), which identifies and characterizes the potential biological, social, and cultural impacts relative to the existing baseline conditions. This portion normally constitutes the most extensive part of the EIS.
|
|
|
·
|
The last section describes potential mitigation measures intended to reduce or eliminate the environmental impacts described in the impact analysis section.
|
|
|
·
|
Provides direct compensation to TKC through payments for project milestones, annual surface use and mine operation.
|
|
|
·
|
Includes a coordinated and consultative approach between Donlin Gold and TKC regarding annual project planning, reclamation as well as preparation of a subsistence harvest plan for affected surface lands.
|
|
|
·
|
Gives preference to TKC for contracts, hiring and training TKC shareholders, as well as funding scholarships and working with federal, state and local entities to help create and fund a training facility in the region.
|
|
|
·
|
Commits to an exclusive contract with TKC for the construction and operations of an upriver port site.
|
|
|
·
|
Partnered with the Kuspuk School District, Alaska Construction Academies, and EXCEL Alaska in sponsoring a youth Academic and Trades Decathlon in Aniak. At this event, students competed individually in math, science, geography and keyboarding, and learned about trades from experts in several industries.
|
|
|
·
|
Continued its longstanding tradition in outreach, visiting
10
villages. Town Hall meetings were held in each village with a viewing of the Donlin Gold project video, narrated in
both English and
the local Yup’ik language.
|
|
|
·
|
Continued its partnership with the State of Alaska and the Yukon-Kuskokwim Health Corporation on the Kids Don’t Float Campaign. Donlin Gold supports the lifesaving message of this campaign by distributing personal flotation devices (lifejackets) to kids along the river and updating safety messages at boat launches. Donlin Gold also continued its exemplary site safety record entering its ninth consecutive year without a lost time incident.
|
|
|
·
|
Continued its support for both the Iron Dog snow machine race and the Iditarod sled dog race, sponsoring two racers in each event. The Donlin Gold camp staff volunteered at the Cripple checkpoint, spending four nights assisting the race crew and mushers as they made their way north to Nome.
|
|
Three months ended May 31,
|
Six months ended May 31,
|
|||||||||||||||
|
($ thousands, except per share)
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
|
Loss from operations
|
$ | (8,264 | ) | $ | (12,225 | ) | $ | (19,597 | ) | $ | (26,734 | ) | ||||
|
Net loss
|
$ | (10,681 | ) | $ | (9,833 | ) | $ | (21,372 | ) | $ | (23,609 | ) | ||||
|
Net loss per common share
|
||||||||||||||||
|
Basic and diluted
|
$ | (0.03 | ) | $ | (0.03 | ) | $ | (0.07 | ) | $ | (0.08 | ) | ||||
|
Three months ended May 31,
|
Six months ended May 31,
|
|||||||||||||||
|
($ thousands)
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
|
Cash used in operations
|
$ | (474 | ) | $ | (6,212 | ) | $ | (5,688 | ) | $ | (12,092 | ) | ||||
|
Cash used in investing activities
|
$ | (569 | ) | $ | (5,872 | ) | $ | (4,213 | ) | $ | (8,965 | ) | ||||
|
Cash used in financing activities
|
$ | — | $ | (72,821 | ) | $ | — | $ | (18,462 | ) | ||||||
|
($ thousands)
|
At May 31,
|
At November 30,
|
||||||
|
2014
|
2013 | |||||||
|
Cash and cash equivalents
|
$ | 71,329 | $ | 81,262 | ||||
|
Term deposits
|
$ | 105,000 | $ | 110,000 | ||||
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
|
Item 4.
|
Controls and Procedures
|
|
Item 1.
|
Legal Proceedings
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
Item 3.
|
Defaults Upon Senior Securities
|
|
Item 4.
|
Mine Safety Disclosures
|
|
Item 5.
|
Other Information.
|
|
Item 6.
|
Exhibits
|
|
Date: July 9, 2014
|
NOVAGOLD RESOURCES INC.
|
|
|
By:
|
/s/ Gregory A. Lang
|
|
|
Gregory A. Lang
|
||
|
President and Chief Executive Officer
(principal executive officer)
|
||
|
By:
|
/s/ David A. Ottewell
|
|
|
David A. Ottewell
|
||
|
Vice President and Chief Financial Officer (principal financial and accounting officer)
|
|
Exhibit No.
|
Description
|
|
|
Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a)
|
||
|
Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)
|
||
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350
|
||
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350
|
||
|
101
|
The following materials are filed herewith: (i) XBRL Instance, (ii) XBRL Taxonomy Extension Schema, (iii) XBRL Taxonomy Extension Calculation, (iv) XBRL Taxonomy Extension Labels, (v) XBRL Taxonomy Extension Presentation, and (vi) XBRL Taxonomy Extension Definition. In accordance with Rule 406T of Regulation S-T, the information in these exhibits is furnished and deemed not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Exchange Act of 1934, and otherwise is not subject to liability under these sections and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by the specific reference in such filing.
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
Customers
| Customer name | Ticker |
|---|---|
| Tiffany & Co. | TIF |
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|