Page 26 - Demo

Well, I can tell you that, when the time is right to go into production, I think this will be the easiest gold mine to finance. In Alaska, with Barrick as a partner, it will be something where
I think it can be done in several phone calls. Now, let’s break this down. I’m only using hypotheticals here. These are purely forward-looking statements; disavow all of them. I’m just using round numbers. Let’s assume that phase one of the project
is four billion dollars, split two ways. That’s two billion each. Obviously for Barrick, not difficult – but not difficult for us either. Electrum financed a very prosperous silver project in Mexico, which we operate ourselves (not with the benefit of a major like Barrick), and we got 70 percent financing.
shareholder, what I want to see is that when gold prices are where they should be, when the mine is ready to be built, our share price I believe will be multiples where it is today.
One of the rationales for investing in NOVAGOLD is a belief in a substantially higher gold price, which is hard to come by these days outside of this room. Of the few believers in gold, my friends are well chosen. You did toss out $3,000 to $5,000 earlier; what are some of the things that come to mind as to how we’ll get there?
Now, $2,000 gold – if you’re a bull on gold – isn’t really a number. It’s nothing. And when I pivoted from energy to gold in 2007, oil was heading to $120-140 per barrel. We sold our energy company when oil was $120. Gold had a 600 handle, and I gave all the reasons why I felt that one should be in a currency that can’t be produced at will. And I think that gold and silver provided me with exactly the kind of exposure that I needed. When we sold our energy company, we didn’t go back in because I told people I could no longer really comfort myself with conviction as to whether oil was worth $20 or $120. Little did I know that last year it would be worth briefly minus $20. But the one thing that I did know is that gold would multiply, and my long-term target for gold in 2007 was between $3,000 and $5,000 when it was at $600. So we’re on our way. I mean we’ve tripled since then. And something that I really want to mention because you’ve brought this out in your own writings. The idea that you need to be a dollar bear to be a gold bull;
it’s not true. The idea that you need to be a bull on oil to be
a gold bull; it’s not true. You’ve pointed these out, and here’s the proof: In 2007, we got a wire transfer for $2.55 billion from Encana for the sale of our stake in Leor Energy...
You remember the date?
Oh yeah, and if for no other reason than that I have no idea what would have become of us if we had made that sale six months later. One thing I did was I looked around at where we were going to park the money. Well, dollar-euro was 1.47. Today it’s 1.13. Gold was $600-ish and it’s three times higher with
the dollar having strengthened by 30 percent. The concept that you have to be a dollar bear is not true. Oil was $120 with gold at $600-ish. Oil is now half – and was even much lower
– and gold is a multiple of that, which tells you this: First of
AVERAGE GRADE
Donlin Gold average grade16 global average grade17
2.24g/t
Let’s say that happens for us. What are we really talking about? $600 million, $700 million, $800 million? Now let’s
do something that investors very rarely do, but they should, which is to take themselves out of where they are today
and their present mindset and understand what will be the conditions that will pertain when we’re talking about going into production. I believe that gold will have embarked on the next leg of its bull market. I think that it will take us well beyond $2,000. I think ultimately it’d be $3,000 to $5,000, but once
you see that gold has embarked upon that next wave, I think Barrick will be extremely excited to go into production. And I’ve always said that when Barrick is ready, we’ll be ready. We have three sovereign wealth funds as our partners in Electrum, and we’re very, very close to them and we’ve always had a number of major players in the financial space in mining who’ve always said when you’re ready, just let us know. For me as the largest
1.12 g/t
24