Saturday, September 22, 2018Canada's Leading Online Business Magazine

NovaGold Resources

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Headquartered in Vancouver, British Columbia, NovaGold Resources Inc. is a precious metals company focused on gold exploration, development and mining. With the diversification of three separate multimillion-ounce quality projects, all at different stages in the production pipeline, NovaGold has one of the strongest production growth profiles in the sector.

“Our flagship property is Donlin Creek, located in Alaska,” says Rick Van Nieuwenhuyse, President and CEO of NovaGold. “It’s a 50/50 partnership with Barrick Gold. Of course, with Barrick being the largest gold company in the world, it is appropriate to have them as a partner because Donlin Creek is one of the largest undeveloped gold deposits in the world. You can literally count on one hand the other deposits in the world that are that big.”

To be precise, nearly 40 million ounces have already been defined and there is a lot of exploration potential beyond that. “Clearly we see the potential of the district that we control,” Van Nieuwenhuyse adds. “In fact, we see Donlin’s potential approaching 100 million ounces.”

While Donlin Creek is the leading profile property, NovaGold does have a close second in British Columbia, called Galore Creek. “It’s one of the world’s largest and highest-grade undeveloped porphyry-related copper-gold-silver deposits,” explains Van Nieuwenhuyse. “It’s a billion-tonne ore body and we have a whole district of exploration upside there.” The Galore deposit contains over eleven million ounces of gold, over twelve billion pounds of copper and over 180 million ounces of silver. It is another part-ownership structure, NovaGold owns one half and Teck owns the other.

Last but not least is Nome Operations. Located in Alaska, it comprises three projects (Rock Creek, Big Hurrah and Nome Gold). “It’s a project that, with the financial crisis last year, we had to put on hold,” says Van Nieuwenhuyse. “We were nearly finished constructing it, so it’s an advanced project that is almost ready to start up in operation.”

What sets them apart?
If you ask Van Nieuwenhuyse what gives NovaGold a competitive edge in the sector, he’ll say it’s the size. “Net to the company, we have well over 20 million ounces of gold and, really, the only other companies with that level of resource are the big ones, such as Barrick, Newmont or Kinross. That’s pretty unique.”

“In addition to that, we’re one of the few exploration companies that have the potential to produce over a million ounces of gold a year with our 50 percent interests in Galore and Donlin,” he continues.

About the company’s success as a whole, Van Nieuwenhuyse believes it stems from the company’s ability to carry out exploration. “We’re very good at exploration,” he says, “and we know the business very well. I think one of the reasons is because we’re focused and don’t have lots of projects going on. We tend to get one project, advance it, and then bring in appropriate partners when the time is right. It’s a good recipe. It’s a good business plan and good business strategy for NovaGold. We like exploring for large deposits and we like to partner them with big companies.”

Market expectations
Rick Van Nieuwenhuyse is optimistic about the future of the company, and the gold market in general. As he puts it, there are a number of factors contributing to the “perfect storm” for the success of the gold business.

“On the one hand, there’s a relationship between supply and demand on the price of a particular commodity and it’s no different for gold,” he says. “Supply continues to diminish and demand continues to increase. These are long-term trends too—this isn’t something that happened just six months ago, things have trended in this way for ten years now. We have a whole new population that is now beginning to buy gold because of the wealth that is being generated in places like India and China. That’s a significant contribution.”

Of course there’s also the meltdown in the financial sector. To that end, Van Nieuwenhuyse notes that in times like this, people are more likely to invest in things that are real, rather than engineered financial instruments that have no real value. “I think that’s the case for all the commodities, including gold,” he says. “You’re seeing central banks all around the world buying gold – particularly in the developed countries
– that, again, leads to increased demand.”

Well-positioned for success
For NovaGold, the goals are simple and clear. In the short-term, the company plans to continue advancing its three major projects towards production. Longer term, NovaGold would like to grow and develop new opportunities.

“We think we’re in a great place as a company,” Van Nieuwenhuyse smiles. “We’ve got a very strong and excellent team—and not just in exploration geologists, but in finance and marketing as well. We know the exploration mining business very well, and we think NovaGold is extremely well-poised to take advantage of what I think is going to be a tremendous bull market in gold and copper.”

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