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Business Context and Reporting Period

Company: NOVAGOLD RESOURCES INC.
Filing Type: Form 10-K (Annual Report)
Period Ended: November 30, 2025
Primary Asset: 60% economic interest in the Donlin Gold project (Alaska, USA), held via Donlin Gold LLC.
Operational Status: Development stage; no commercial production or operating revenue. The company focuses on advancing the Donlin Gold project toward a Bankable Feasibility Study (BFS) and construction.

Key Financial Metrics

Note: The company has no revenue. Expenses are primarily driven by the equity loss from Donlin Gold operations and general corporate costs.

Material Changes vs. Prior Period

• Donlin Gold Transaction: On June 3, 2025, NOVAGOLD acquired an additional 10% interest in Donlin Gold from Barrick Gold for $200 million, increasing its economic stake from 50% to 60%. Paulson acquired the remaining 40%. Governance rights remain 50/50.
• Financing Activities: The company raised approximately $260.4 million through a public offering ($195.2 million) and a concurrent private placement ($64.4 million) in May 2025 to fund the acquisition and general corporate purposes.
• Net Loss Increase: Net loss increased by $49.0 million year-over-year. This was primarily due to a $39.6 million non-cash charge for warrants issued under a backstop agreement and $9.0 million in higher Donlin Gold field expenses.
• Functional Currency Change: Effective April 22, 2025, the parent company's functional currency changed from Canadian dollars to U.S. dollars.
• Investment Carrying Value: The investment in Donlin Gold increased significantly from $2.6 million to $213.2 million, reflecting the capitalization of the acquisition cost and transaction fees.

Guidance, Outlook, and Risks

Outlook and Management Commentary

• Bankable Feasibility Study (BFS): A Request for Proposals (RFP) for the BFS was issued in 2025. The Prime Contractor is expected to be selected in Q1 2026.
• 2026 Budget: Donlin Gold's board approved a fiscal 2026 budget of $131.4 million (NOVAGOLD's share: $78.8 million) to advance the BFS, maintain permits, and fund exploration.
• Liquidity: As of November 30, 2025, cash resources totaled approximately $120 million, sufficient to cover anticipated costs for at least the next 12 months. However, additional capital will be required for the BFS and construction phases.
• Capital Raising Restriction: Due to a delinquent Form 8-K filing in June 2025, the company is ineligible to use Form S-3 to register securities until July 2026.

Risks and Contingencies

• Permitting and Litigation:
  • Federal: A U.S. District Court remanded the case to federal agencies to supplement the Environmental Impact Statement (EIS) regarding a hypothetical tailings release. Permits remain in place, but the supplemental analysis is expected by mid-2027.
  • State: An appeal regarding the Clean Water Act Section 401 Certification is pending before the Alaska Supreme Court.
• Financing: The project requires substantial capital (estimated initial capital cost of $9.233 billion). There is no assurance that financing will be available on favorable terms.
• PFIC Status: The company believes it was a Passive Foreign Investment Company (PFIC) for fiscal 2025, which may have adverse tax consequences for U.S. holders.
• Disclosure Controls: A deficiency in disclosure controls was identified and remediated regarding the timely filing of a Form 8-K for a director resignation.

Investor Verification Checklist

• Permitting Status: Verify the timeline and potential impact of the Supplemental EIS (SEIS) required by the Federal District Court and the outcome of the Alaska Supreme Court appeal on the 401 Certification.
• Capital Adequacy: Confirm the sufficiency of the $120 million cash balance against the $98.5 million anticipated 2026 expenditures and the timeline for the next capital raise (post-July 2026).
• Donlin Gold Economics: Review the updated 2025 Technical Report Summary (S-K 1300) for the $9.233 billion initial capital cost estimate and the $2,100/oz gold price assumption used for reserves.
• Barrick Promissory Note: Monitor the $166.3 million debt obligation to Barrick, including the option to prepay $100 million by December 3, 2026, and the impact of interest accruals.
• PFIC Implications: Consult tax advisors regarding the tax treatment of gains and distributions given the company's PFIC status for U.S. investors.