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Business Context and Reporting Period

Company: NOVAGOLD RESOURCES INC.
Filing Type: Form 8-K (Current Report)
Date of Report: April 22, 2025
Principal Event: Entry into a definitive agreement to acquire Barrick Gold Corporation's 50% interest in Donlin Gold LLC, increasing NOVAGOLD's ownership from 50% to 60%.

Key Financial Metrics and Transaction Details

Acquisition Consideration: $1.0 billion in cash total for Barrick's 50% interest.
NOVAGOLD's Obligation: $200 million (20% of Barrick's interest).
Paulson's Obligation: $800 million (80% of Barrick's interest).
Financing Structure (Backstop Agreement):

• Equity Commitment: Up to $170 million from Investors (Electrum, Paulson Investor, Kopernik) at $3.00 per share.
• Warrants Issued: 25.5 million five-year warrants at $3.00 exercise price.
• Treasury Commitment: $30 million to be funded from NOVAGOLD's available cash.

Existing Debt: Promissory note to Barrick Gold totaling approximately $155.1 million (as of Feb 28, 2025) with interest at U.S. prime plus 2%.

Material Changes and Governance

Ownership Structure: Post-closing, NOVAGOLD will hold 60% of Donlin Gold LLC, and Paulson will hold 40%.
Governance Rights: Despite the 60/40 ownership split, the amended LLC Agreement provides equal governance rights. NOVAGOLD's voting interest will be adjusted to be 10% less than its ownership interest, while Paulson's will be 10% greater.
Related Party Transactions: The Investors (Electrum, Paulson, Kopernik) are related parties and existing significant shareholders. The transaction was approved by a Special Committee of independent directors.
Debt Restructuring: The promissory note to Barrick will be amended to allow NOVAGOLD to prepay up to $100 million within 18 months post-closing. A side letter also provides an option to prepay $90 million prior to closing.

Outlook, Risks, and Contingencies

Expected Closing: Second calendar quarter of 2025.
Strategic Priorities:

• Shift 2025 drill program focus to reserve and resource conversion/expansion.
• Commence workstreams for a new feasibility study (S-K 1300 and NI 43-101 standards).
• Advance technical work and engineering designs.
• Enhance social license and community outreach with Calista Corporation and The Kuskokwim Corporation.

Risks and Contingencies:

• Closing Conditions: Transaction is subject to regulatory approvals and customary closing conditions.
• Outside Date: The agreement may be terminated if conditions are not satisfied within 180 days of the effective date.
• Financing Risk: Need for additional financing to complete feasibility studies and development.
• Environmental Indemnity: NOVAGOLD and NGRA must guarantee Donlin Gold's obligations for a post-closing environmental indemnity to Barrick.

Investor Verification Checklist

• Verify the final closing date and confirmation of all regulatory approvals.
• Confirm the exact amount of capital raised under the Backstop Agreement versus the $170 million commitment.
• Review the amended promissory note terms regarding the $155.1 million debt and prepayment options.
• Monitor the progress of the new feasibility study and reserve conversion efforts.
• Assess the impact of the 25.5 million new warrants on future dilution.
• Check for any material adverse effects regarding Donlin Gold prior to the 180-day Outside Date.