NOVAGOLD Enters Agreement to Sell Its 50% Stake in Galore Creek to Newmont for up to $275 Million

VANCOUVER, British Columbia, July 26, 2018 (GLOBE NEWSWIRE) -- NOVAGOLD RESOURCES INC. (TSX:NG) (NYSE American:NG) (“NOVAGOLD” or “the Company”) today announced that it has entered into a binding agreement (the “Agreement”) with Newmont Mining Corporation (NYSE:NEM) (“Newmont”), pursuant to which NOVAGOLD has agreed to sell its 50% interest in the Galore Creek project (“Project”), owned by the Galore Creek Partnership (GCP). The Project is located in northern British Columbia, Canada. All dollar amounts referred to in this release are stated in U.S. Dollars.

Under the terms of the Agreement, NOVAGOLD will receive total consideration of up to $275 million, payable as follows:

1. $100 million payable upon closing;
2. $75 million payable upon the earlier of: (i) the completion of a new Project pre-feasibility study prepared by or for GCP or (ii) three (3) years from the closing date;
3. $25 million, payable upon the earlier of: (i) completion of a Project feasibility study prepared by or for GCP or (ii) five (5) years from the closing date; and
4. $75 million payable upon approval of Project construction.

Teck has waived its right of first refusal to acquire NOVAGOLD’s interest in GCP. The transaction is expected to close on or about July 27, 2018.

“NOVAGOLD has remained steadfast on its stated strategy of monetizing its interest in Galore Creek at a value that recognizes the scarcity of this important asset and to a purchaser that will continue to advance the Project in a technically sound as well as environmentally and socially responsible manner,” said Greg Lang, NOVAGOLD’s President & CEO. “Our patience has been rewarded. I’m very pleased that NOVAGOLD is receiving fair value for its interest in Galore Creek and believe that Newmont is the right organization to carry forward the track record of excellence that we have achieved with our partners over the years. Upon completion of this transaction, NOVAGOLD will further strengthen its balance sheet to fund activities at its flagship Donlin Gold project in Alaska. With approximately 39 million ounces of measured and indicated gold resources grading 2.24 grams per tonne¹, Donlin Gold is one of the most valuable projects in our industry today. As we approach receipt of the Record of Decision, marking successful completion of a multi-year National Environmental Policy Act assessment and federal and state permitting processes, as well as advancing the project optimization study with our partner Barrick Gold, our team is looking forward to continuing to build value for Donlin Gold with our customary discipline and professionalism.”