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Business Context and Reporting Period

Company: NOVAGOLD RESOURCES INC.
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: May 31, 2026
Business Overview: Novagold is a gold exploration and development company focused primarily on the Donlin Gold project in Alaska. The Company holds a 60% economic interest in Donlin Gold LLC (with Paulson holding 40%), though governance rights are shared equally (50/50). The Company has no realized revenues from its principal asset and operates as a single reportable segment.

Key Financial Metrics

Material Changes vs. Prior Period

• Net Loss Improvement: Net loss for the three months ended May 31, 2026, decreased by $28.8 million compared to the same period in 2025. This improvement is primarily attributed to a $39.6 million non-cash warrant expense recognized in the prior year (Q2 2025) related to the Backstop Agreement, which did not recur in 2026.
• Increased Operating Expenses: General and administrative expenses increased by $3.1 million year-over-year due to higher professional fees and share-based compensation. Donlin Gold equity loss increased by $10.4 million due to the commencement of the Bankable Feasibility Study (BFS) and the Company's funding share increasing from 50% to 60% in Q3 2025.
• Liquidity Position: Cash and cash equivalents decreased from $110.1 million (Nov 30, 2025) to $78.2 million (May 31, 2026), while term deposits increased significantly from $5.0 million to $292.0 million, reflecting a strategic shift in cash management.
• Equity Transactions: In Q1 2026, the Company completed a private placement raising $310.2 million (gross), compared to a public offering and private placement in Q2 2025 raising approximately $243.8 million (gross).

Guidance, Outlook, and Risks

• Project Outlook: Management expects to complete the Donlin Gold Bankable Feasibility Study (BFS) and exercise the option to prepay the Barrick promissory note (valued at $100 million) by December 3, 2026. Current liquidity is deemed sufficient to fund the BFS and corporate costs for at least the next 12 months.
• Permitting Status: The project faces ongoing litigation regarding the Clean Water Act Section 401 Certification (appeal pending in Alaska Supreme Court) and a federal court remand requiring a Supplemental Environmental Impact Statement (SEIS). A draft SEIS is anticipated in September 2026.
• Capital Requirements: Anticipated operating expenditures for fiscal 2026 remain at $98.5 million ($78.8 million for Donlin Gold, $19.7 million for G&A). The Company expects to raise additional capital in the future to support detailed engineering and construction, noting it is ineligible for Form S-3 registration until July 2026 due to a prior delinquent filing.
• Risk Factors: Key risks include the uncertainty of production at Donlin Gold, dependence on co-owner cooperation, permitting delays, potential increases in energy prices and inflation, and the need for future financing.

Investor Verification Checklist

• Permitting Litigation: Verify the status of the Alaska Supreme Court appeal regarding the 401 Certification and the timeline for the federal Supplemental Environmental Impact Statement (SEIS).
• Promissory Note Prepayment: Confirm the Company's ability and intent to exercise the $100 million prepayment option on the Barrick note by December 3, 2026.
• Capital Raising Eligibility: Monitor the Company's eligibility to use Form S-3 for future offerings, which is restricted until July 2026.
• BFS Progress: Track the progress of the Bankable Feasibility Study update led by Fluor Corporation and its impact on projected capital costs and economic returns.
• Donlin Gold Funding: Review the Company's 60% funding obligation for Donlin Gold expenditures and ensure cash reserves remain adequate as BFS activities intensify.