What changed in this filing

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Item 1A. Risk Factors

2021-01-27 compared with 2020-01-22 · 112 added, 125 removed, 276 unchanged (46% of the section changed)

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Additional risks that we are not presently aware of, or that we currently believe are immaterial, may also adversely affect our business, operating results and financial condition.

We cannot assure you that we will successfully address these risks and caution that other unknown risks may exist or may arise that may affect our business.

We cannot assure you that we will successfully address these risks and caution that other unknown risks may exist or may arise that may affect our business.

An investment in our securities is speculative and involves a high degree of risk due to the nature of our business and the present stage of exploration and development of our mineral properties.

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the availability and cost of funds to finance construction and development activities;

NOVAGOLD RESOURCES INC.

the timing and cost, which can be considerable, of the construction of mining and processing facilities as well as related infrastructure;

potential opposition from non-governmental organizations, environmental groups or local groups which may delay or prevent development activities;

NOVAGOLD RESOURCES INC.

potential increases in construction and operating costs due to changes in the cost of labor, fuel, power, materials and supplies, services, and foreign exchange rates;

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None of our mineral properties have advanced to the commercial production stage and we have no history of earnings or cash flow from operations.

We expect to continue to incur net losses unless and until such time the Donlin Gold project enters into commercial production and generates sufficient revenues to fund continuing operations.

We expect to continue to incur net losses unless and until such time the Donlin Gold project commences commercial production and generates sufficient revenues to fund continuing operations.

The development of our mineral properties to achieve production will require the commitment of substantial financial resources.

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On December 5, 2011, we announced the total capital cost estimate for the Donlin Gold project was approximately $6.7 billion including costs related to the natural gas pipeline (100% basis).

These cost estimates may change materially as our studies are updated.

Our failure to obtain sufficient financing could result in the delay or indefinite postponement of exploration, development, construction, or production at the Donlin Gold project.

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The capital costs to take our projects into production may be significantly higher than anticipated.

On December 5, 2011, we announced the total capital cost estimate for the Donlin Gold project of approximately $6.7 billion, including costs related to the natural gas pipeline (100% basis).

The previous capital cost estimate for the project released in April 2009 was $4.5 billion, which did not include the cost of a natural gas pipeline.

Conditions may have changed since the Donlin Gold FS (as defined below) was completed and the results of that study may no longer reflect an accurate economic assessment of the Donlin Gold project.

On December 5, 2011, we announced the initial capital cost estimate for the Donlin Gold project of approximately $6.7 billion, including costs related to the natural gas pipeline (100% basis).

The previous initial capital cost estimate for the project released in April 2009 was $4.5 billion, which did not include the cost of a natural gas pipeline.

Wood is currently updating all sections of the Donlin Gold FS with updated costs, economic assessment, permitting information, and technical information related to permitting, generated on the Donlin Gold project since 2011, which is anticipated to be finalized and filed during 2021.

The economic assessment in the updated Donlin Gold FS may be materially different than in the 2011 study.

None of our mineral properties have an operating history upon which we can base estimates of future operating costs.

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anticipated climatic conditions.

Capital costs, operating costs, production and economic returns, and other estimates contained in studies or estimates prepared by or for us may differ significantly from those anticipated by our current studies and estimates, and there can be no assurance that the capital costs incurred to construct and the operating costs incurred in operating the Donlin Gold project will not be higher than currently anticipated.

Capital costs, operating costs, production and economic returns, and other estimates contained in studies or estimates prepared by or for us may differ significantly from those anticipated by our current or future studies and estimates, and there can be no assurance that the initial capital costs incurred to construct, and the sustaining capital and operating costs incurred in operating the Donlin Gold project will not be higher than currently anticipated.

Changes in the market price of gold, which in the past has fluctuated widely, affect our financial condition.

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There can be no assurance that the market price of gold will remain at current levels or that such prices will improve.

In particular, an increase in worldwide supply, and consequent downward pressure on prices, may result over the longer term from increased production from the development of new or expansion of existing mines.

An increase in worldwide supply, and consequent downward pressure on prices, may result over the longer term from increased production from the development of new or expansion of existing mines.

There is no assurance that if commercial quantities of gold are discovered, that a profitable market may exist or continue to exist for a production decision to be made or for the ultimate sale of gold.

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NOVAGOLD RESOURCES INC.

A worsening of gold prices or tightening of credit in the financial markets or other economic conditions, including but not limited to, consumer spending, employment rates, business conditions, inflation, fuel and energy costs, consumer debt levels, lack of available credit, the state of the financial markets, interest rates and tax rates, may adversely affect our ability to finance development and construction of the Donlin Gold project.

A decrease in gold prices or tightening of credit in the financial markets or other economic conditions, including but not limited to, consumer spending, employment rates, business conditions, inflation, fuel and energy costs, consumer debt levels, lack of available credit, the state of the financial markets, interest rates and tax rates, may adversely affect our ability to finance development and construction of the Donlin Gold project.

Specifically:

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the devaluation and volatility of global stock markets would impact the valuation of our equity and other securities.

The coronavirus (COVID-19) pandemic may affect our operations.

The Company faces risks related to health epidemics and other outbreaks of communicable diseases, which could significantly disrupt its operations and may materially and adversely affect its business and financial conditions.

The Company’s business could be adversely impacted by the effects of COVID-19 or other epidemics.

The extent to which COVID-19 impacts the Company’s business, including its operations and the market for its securities, will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the pandemic and the actions taken to contain or treat the COVID-19 pandemic.

In particular, the continued spread of COVID-19 could materially and negatively impact the Company’s business including without limitation, employee health, workforce productivity, insurance premiums, ability to travel, the availability of industry experts and personnel, restrictions or delays to future Donlin Gold drill programs and/or the timing to process drill and other metallurgical testing, and other factors that will depend on future developments beyond the Company’s control, which may have a material and adverse effect on its business, financial condition and results of operations.

There can be no assurance that the Company's personnel will not be impacted by these pandemic diseases and ultimately see its workforce productivity reduced and incur increased medical costs or insurance premiums as a result of these health risks.

We are dependent on a third party that participates in exploration and development of our Donlin Gold project.

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The existence or occurrence of one or more of the following circumstances and events could have a material adverse impact on our ability to achieve our business plan, profitability, or the viability of our interests held with the third party, which could have a material adverse impact on our business, future cash flows, earnings, results of operations and financial condition:

(i) disagreement with our business partner on how to develop and operate the Donlin Gold project efficiently;

(i) disagreement with the third party on how to develop and operate the Donlin Gold project efficiently;

(ii) inability to exert influence over certain strategic decisions made in respect of the jointly-held Donlin Gold project;

(iii) inability of our business partner to meet its obligations to the joint business or third parties;

and (iv) litigation with our business partner regarding joint business matters.

(iii) inability of the third party to meet its obligations to the joint business or other parties;

and (iv) litigation with the third party regarding joint business matters.

Opposition to our operations from local stakeholders or non-governmental organizations could have a material adverse effect on us.

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Donlin Gold Project”

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We require various permits to conduct our current and anticipated future operations, and delays or a failure to obtain such permits, or a failure to comply with the terms of any such permits that we have obtained, could have a material adverse impact on us.

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As well, it can be difficult to assess what specific permitting requirements will ultimately apply to our projects.

NOVAGOLD RESOURCES INC.

The figures for our mineral resources and mineral reserves are estimates based on interpretation and assumptions and may yield less mineral production under actual conditions than is currently estimated.

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We cannot provide assurance that mineralization identified at our mineral properties can or will be mined or processed profitably.

The resource and reserve estimates contained in this Annual Report on Form 10-K have been determined and valued based on assumed future prices, cut-off grades and operating costs that may prove to be inaccurate.

NOVAGOLD RESOURCES INC.

The mineral resource and mineral reserve estimates contained in this Annual Report on Form 10-K have been determined and valued based on assumed future prices, cut-off grades and operating costs that may prove to be inaccurate.

Extended declines in market prices for gold may render portions of our mineralization uneconomic and result in reduced reported mineralization.

Any material reductions in estimates of mineralization, or of our ability to extract this mineralization, could have a material adverse effect on our ability to implement our business strategy, the results of operations or our financial condition.

We have established the presence of proven and probable reserves at our Donlin Gold project under Canadian standards.

There can be no assurance that any resource estimates for our mineral projects will ultimately be reclassified as mineral reserves.

We have established the presence of proven and probable mineral reserves at our Donlin Gold project under Canadian standards.

There can be no assurance that any mineral resource estimates for our mineral projects will ultimately be reclassified as mineral reserves.

There can be no assurance that subsequent testing or future studies will establish proven and probable mineral reserves at our other mineral properties, if any.

The failure to establish proven and probable mineral reserves could restrict our ability to successfully implement our strategies for long-term growth and could impact future cash flows, earnings, results of operation and financial condition.

NOVAGOLD RESOURCES INC.

Beginning with our fiscal year ending November 30, 2022, we will be subject to, and required to disclose our mineral resources and reserves in accordance with the new SEC mining rules contained in Subpart 1300 of Regulation S-K (the “New SEC Rules”).

While the New SEC Rules are similar to Canadian NI 43-101, they are not identical and there can be no assurance that the reserves and resources reported under Canadian NI 43-101 will be the same as the reserves and resources to be reported under the New SEC Rules.

Lack of infrastructure could delay or prevent us from developing advanced projects.

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Access to the Donlin Gold project is limited and there is no infrastructure that serves the project area.

An approximately 500-kilometer-long natural gas pipeline is needed to supply fuel to the proposed generating plant to provide power for the Donlin Gold project.

An approximately 316-mile-long (509-kilometer) natural gas pipeline is needed to supply fuel to the proposed generating plant to provide power for the Donlin Gold project.

The proposed pipeline would traverse generally undeveloped areas in Alaska that are difficult to access.

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Two ports would be needed on the Kuskokwim River, the first located in Bethel, Alaska, where ocean barges would transition materials to river barges;

and the second located approximately 200 miles upriver from Bethel.

A 30-mile access road from the upriver port to the project site is needed to deliver the materials.

Additionally, a 5,000-foot long airstrip would be built to provide year-round access to the project.

and the second located approximately 200 miles (320 kilometers) upriver from Bethel.

A 30-mile-long (48-kilometer) access road from the upriver port to the project site is needed to deliver the materials.

Additionally, a 5,000-foot-long (1,500-meter) airstrip would be built to provide year-round access to the project.

Terrain, geologic conditions, ground conditions, steep slopes, river levels, ice breakup, weather, climate change impacts and other natural conditions that are beyond our control along the pipeline and transportation routes present design, permitting, construction, and operational challenges for the project.

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Title and other rights to our mineral properties are subject to agreements with other parties.

The subsurface mineral and surface rights at the Donlin Gold project are owned by Calista Corporation and The Kuskokwim Corporation, respectively, two Alaska Native corporations.

Donlin Gold operates on these lands pursuant to a Mining Lease with Calista Corporation and a Surface Use Agreement with The Kuskokwim Corporation.

The ability of Donlin Gold to continue to explore and develop the Donlin Gold project depends upon its continued compliance with the terms and conditions of the Mining Lease and Surface Use Agreement.

The subsurface mineral and surface rights at the Donlin Gold project are owned by Calista and TKC, respectively, two native corporations.

Donlin Gold LLC operates on these lands pursuant to a Mining Lease with Calista and a Surface Use Agreement with TKC.

The ability of Donlin Gold LLC to continue to explore and develop the Donlin Gold project depends upon its continued compliance with the terms and conditions of the Mining Lease and Surface Use Agreement.

Furthermore, our ability to continue to explore and develop other mineral properties may be subject to agreements with other third parties, including agreements with Native corporations, for instance.

Mining is inherently risky and subject to conditions or events some of which are beyond our control, and which could have a material adverse effect on our business.

Mining involves various types of risks, including:

environmental hazards;

industrial accidents;

metallurgical and other processing problems;

unusual or unexpected geologic formations and conditions;

structural cave-ins or slides;

power outages;

labor disruptions;

landslides and avalanches;

mechanical equipment and facility performance problems;

availability of materials and equipment;

metals losses;

periodic interruptions due to inclement or hazardous weather conditions.

These risks could result in damage to, or destruction of, mineral properties, production facilities or other properties;

personal injury or death, including to employees;

environmental damage;

delays in construction or mining operations;

increased production costs;

asset write downs;

monetary losses;

and possible legal liability.

We may not be able to obtain insurance to cover these risks at economically feasible premiums or at all.

Insurance against certain environmental risks, including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from mineral production, is not generally available to us or to other companies within the mining industry.

We may suffer a material adverse impact on our business if we incur losses related to any significant events that are not covered by our insurance policies.

NOVAGOLD RESOURCES INC.

Exploration, construction and production activities may be limited or delayed by inclement weather and shortened exploration, construction and operating seasons.

For example, Donlin Gold proposes to transport the bulk of the supplies required to operate the Donlin Gold project to the site from ports in the United States and Canada.

This would require the supplies to be transported by barge on the Kuskokwim River which is free of ice and open for barge traffic for a limited period each year.

Delays in the ice breakup or early freeze-up, low flow levels and water depths, or other conditions affecting the Kuskokwim River could delay or prevent Donlin Gold from transporting supplies to the site.

Any such interference with the delivery of needed supplies to the Donlin Gold project could adversely affect the construction or operation of the project and/or the costs associated with these activities which, in turn, would adversely affect our business.

We are subject to significant governmental regulation.

Our operations, exploration and development activities in the United States, are subject to extensive federal, state and local laws and regulations governing various matters, including:

environmental protection;

management and use of toxic substances and explosives;

management of tailings and other wastes generated by our operations;

management of natural resources;

exploration and development of mines, production and post-closure reclamation;

price controls;

taxation and mining royalties;

regulations concerning business dealings with native groups;

availability and use of water resources;

labor standards and occupational health and safety, including mine safety;

preservation of historic and cultural resources.

Failure to comply with applicable laws and regulations may result in civil or criminal fines or penalties or enforcement actions, including orders issued by regulatory or judicial authorities enjoining, curtailing or closing operations or requiring corrective measures, installation of additional equipment or remedial actions, any of which could result in us incurring significant expenditures.

We may also be required to compensate private parties suffering loss or damage by reason of a breach of such laws, regulations or permitting requirements.

It is also possible that future laws and regulations, or a more stringent enforcement of current laws and regulations by governmental authorities, could cause additional expense, capital expenditures, restrictions on or suspensions of our operations and delays in the exploration and development of our mineral properties.

Our activities are subject to environmental laws and regulations that may increase our costs of doing business and restrict our operations.

All of our exploration, potential development and production activities in the United States are subject to regulation by governmental agencies under various environmental laws.

To the extent that we conduct exploration activities or undertake new mining activities in other foreign countries, we will also be subject to environmental laws and regulations in those jurisdictions.

These laws address emissions into the air, discharges into water, management of waste, management of hazardous substances, use of water, protection of natural resources, antiquities and endangered species, and reclamation of lands disturbed by mining operations.

Environmental legislation continues to evolve and the trend has been toward stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and increasing responsibility for companies and their officers, directors and employees.

Compliance with environmental laws and regulations may require significant capital outlays on our behalf and may cause material changes or delays in our intended activities.

There can be no assurance that future changes in environmental regulations will not adversely affect our business, and it is possible that future changes in these laws or regulations could have a significant adverse impact on some portion of our business, causing us to re-evaluate those activities at that time.

Environmental hazards may exist on our mineral properties that are unknown to us at the present time, and that have been caused by previous owners or operators or that may have occurred naturally.

We may be liable for remediating such damage.

NOVAGOLD RESOURCES INC.

Failure to comply with applicable environmental laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities, causing operations to cease or to be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions.

Our largest shareholder has significant influence on us and may also affect the market price and liquidity of our securities.

Electrum Strategic Resources L.P.

(“Electrum”) and its affiliate GRAT Holdings LLC hold in the aggregate 25.76% of our issued and outstanding common shares as of January 15, 2020.

(“Electrum”) and its affiliate GRAT Holdings LLC hold in the aggregate 25.52% of our issued and outstanding common shares as of January 20, 2021.

Accordingly, Electrum and its affiliates will have significant influence in determining the outcome of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations, and the sale of all or substantially all of our assets and other significant corporate actions.

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control dispersion of potentially deleterious effluents;

reasonably re-establish pre-disturbance land forms and vegetation;

reasonably re-establish pre-disturbance landforms and vegetation;

provide adequate financial assurance to ensure required reclamation of land affected by our activities.

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For more detail with respect to the promissory note, see section Item 2, Donlin Gold Project, Alaska , below.

Risks Related to Our Industry

Mining is inherently risky and subject to conditions or events some of which are beyond our control, and which could have a material adverse effect on our business.

Mining involves various types of risks, including:

environmental hazards;

industrial accidents;

metallurgical and other processing problems;

unusual or unexpected geologic formations and conditions;

structural cave-ins or slides;

power outages;

labor disruptions;

landslides and avalanches;

mechanical equipment and facility performance problems;

availability of materials and equipment;

metals losses;

periodic interruptions due to inclement or hazardous weather conditions.

These risks could result in damage to, or destruction of, mineral properties, production facilities or other properties;

personal injury or death, including to employees;

environmental damage;

delays in construction or mining operations;

increased production costs;

asset write downs;

monetary losses;

and possible legal liability.

We may not be able to obtain insurance to cover these risks at economically feasible premiums or at all.

We may suffer a material adverse impact on our business if we incur losses related to any significant events that are not covered by our insurance policies.

Exploration, construction, and production activities may be limited or delayed by inclement weather and shortened exploration, construction and operating seasons.

For example, Donlin Gold proposes to transport the bulk of the supplies required to operate the Donlin Gold project to the site from ports in the United States and Canada.

This would require the supplies to be transported by barge on the Kuskokwim River which is free of ice and open for barge traffic for a limited period each year.

NOVAGOLD RESOURCES INC.

We are subject to significant governmental regulation.

Our operations, exploration and development activities in the United States, are subject to extensive federal, state and local laws and regulations governing various matters, including:

environmental protection;

management and use of toxic substances and explosives;

management of tailings and other wastes generated by our operations;

management of natural resources;

exploration and development of mines, production and post-closure reclamation;

price controls;

taxation and mining royalties;

regulations concerning business dealings with native groups;

availability and use of water resources;

labor standards and occupational health and safety, including mine safety;

preservation of historic and cultural resources.

We may also be required to compensate private parties suffering loss or damage by reason of a breach of such laws, regulations or permitting requirements.

Our activities are subject to environmental laws and regulations that may increase our costs of doing business and restrict our operations.

Our exploration, potential development and production activities in the United States are subject to regulation by governmental agencies under various environmental laws.

Environmental legislation and regulations continue to evolve, and the trend has been toward stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and increasing responsibility for companies and their officers, directors and employees.

Compliance with environmental laws and regulations may require significant capital outlays on our behalf and may cause material changes or delays in our intended activities.

Environmental hazards may exist on our mineral properties that are unknown to us at the present time, and that have been caused by previous owners or operators or that may have occurred naturally.

We may be liable for remediating such damage.

Our insurance will not cover all of the potential risks associated with mining operations.

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Losses from these events may cause us to incur significant costs that could have a material adverse effect on our financial performance and results of operations.

NOVAGOLD RESOURCES INC.

Title and other rights to our mineral properties cannot be guaranteed and may be subject to prior unregistered agreements, transfers or claims and other defects.

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Our mineral properties may be subject to prior unregistered agreements, transfers or claims, and title may be affected by, among other things, undetected defects.

We have not conducted surveys of all of the mineral properties in which we hold direct or indirect interests.

We have not conducted surveys of all the mineral properties in which we hold direct or indirect interests.

A successful challenge to the precise area and location of these mineral properties could result in us being unable to operate on our mineral properties as permitted or being unable to enforce our rights with respect to our mineral properties.

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There can be no assurance that increased costs may not adversely affect our development of our mineral properties in the future.

NOVAGOLD RESOURCES INC.

We may experience difficulty attracting and retaining qualified management and technical personnel to meet our business objectives, and the failure to manage our business effectively could have a material adverse effect on our business and financial condition.

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There can be no assurances that these matters will not have a material adverse effect on our business.

General Risk Factors

The Company is dependent upon information technology systems, which are subject to disruption, damage, failure, and risks associated with implementation and integration.

The Company’s information technology systems used in its operations are subject to disruption, damage, or failure from a variety of sources, including, without limitation, computer viruses, security breaches, cyberattacks, natural disasters and defects in design.

Cybersecurity incidents, in particular, are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data or machines and equipment, and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information, the corruption of data or the disabling, misuse or malfunction of machines and equipment.

Cybersecurity incidents are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data or machines and equipment, and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information, the corruption of data or the disabling, misuse or malfunction of machines and equipment.

Various measures have been implemented to manage the Company’s risks related to information technology systems and network disruptions.

However, given the unpredictability of the timing, nature and scope of information or operational technology disruptions, the Company could potentially be subject to the compromising of confidential or otherwise protected information, destruction or corruption of data, security breaches, other manipulation or improper use of our systems and networks or financial losses from remedial actions, any of which could have a material adverse effect on cash flows, financial condition or results of operations.

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The Company could also be adversely affected by system or network disruptions if new or upgraded information technology systems are defective, not installed properly or not properly integrated into operations.

Various measures have been implemented to manage the risks related to the system implementation and modification, but system modification failures could have a material adverse effect on the Company’s business, financial position, and results of operations.

Acquiring, holding or disposing of our securities may have tax consequences under the laws of Canada and the United States that are not disclosed in this Annual Report on Form 10-K and, in particular, potential investors should be aware that if we are or we become a “passive foreign investment company”

under the U.S.

Internal Revenue Code, there may be adverse tax consequences for investors in the United States.

Acquiring, holding or disposing of our securities may have tax consequences under the laws of Canada and the United States that are not disclosed in this Annual Report on Form 10-K.

In particular, potential investors that are U.S.

taxpayers should be aware that we may be considered a “passive foreign investment company”

under Section 1297(a) of the U.S.

Internal Revenue Code (a PFIC).

We believe that we were not a PFIC for our tax year ended November 30, 2019 but may become a PFIC for future tax years.

PFIC classification is fundamentally factual in nature, generally cannot be determined until the close of the tax year in question and is determined annually.

Additionally, the analysis depends, in part, on the application of complex U.S.

federal income tax rules, which are subject to differing interpretations.

In any tax year in which we are a PFIC, a U.S.

taxpayer will be required to file an annual report with the Internal Revenue Service containing such information as Treasury Regulations or other tax rules may require.

Any gain recognized on the sale of common shares of a PFIC and any excess distributions paid on the common shares of a PFIC must be ratably allocated to each day in a U.S.

taxpayer’s holding period for the common shares.

The amount of any such gain or excess distribution allocated to prior years of such U.S.

taxpayer’s holding period for the common shares generally will be subject to U.S.

federal income tax at the highest tax applicable to ordinary income in each such prior year, and the U.S.

taxpayer will be required to pay interest on the resulting tax liability for each such prior year, calculated as if such tax liability had been due in each such prior year.

Alternatively, a U.S.

taxpayer that makes a timely “QEF election”

generally will be subject to U.S.

federal income tax on such U.S.

taxpayer’s pro rata share of our “net capital gain”

and “ordinary earnings”

(calculated under U.S.

federal income tax rules), regardless of whether such amounts are actually distributed by us.

taxpayers should be aware that there can be no assurance that we will satisfy record-keeping requirements or that we will supply U.S.

taxpayers with required information under the QEF rules in the event that we are a PFIC and a U.S.

taxpayer wishes to make a QEF election.

As a second alternative, a U.S.

taxpayer may make a “mark-to-market election”

if we are a PFIC and the common shares are marketable stock.

taxpayer that makes a mark-to-market election generally will include in gross income, for each taxable year in which we are a PFIC, an amount equal to the excess, if any, of (a) the fair market value of the common shares as of the close of such taxable year over (b) such U.S.

taxpayer’s tax basis in such common shares.

NOVAGOLD RESOURCES INC.

Investors should consult their own tax advisors as to the tax consequences of an investment in our securities.

We believe we were a passive foreign investment company (PFIC) in 2020 which could have negative tax consequences for U.S.

holders of our common shares should be aware that we believe that for U.S.

federal income tax purposes we were classified as a PFIC for our fiscal year ended November 30, 2020 and that we may continue to be classified as a PFIC in future years.

The determination of whether the Company is a PFIC is a factual determination dependent on a number of factors and cannot be made until the close of the applicable tax year.

Accordingly, no assurances can be given regarding the Company’s PFIC status for the current year or any future year.

If the Company is a PFIC at any time during a U.S.

holder’s holding period, then certain potentially adverse tax consequences could apply to such U.S.

holder’s acquisition, ownership, and disposition of common shares.

For more information, please see the discussion in Item 5.

Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities “Certain U.S.

Federal Income Tax Considerations for U.S.

Holders”

Global climate change is an international concern and could impact our ability to conduct future operations.

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Climate change could require modifications to the project’s water management plan, which may require additional capital investments or increase operating costs, if precipitation increases relative to historic records.

Extreme weather events (such as increased frequency or intensity of storms, increased snowpack, prolonged drought and associated\ fire danger) have the potential to disrupt operations at our projects.

Extreme weather events (such as increased frequency or intensity of storms, increased snowpack, prolonged drought, and associated fire danger) have the potential to disrupt operations.

Where appropriate the Donlin Gold project has developed contingency plans for managing extreme weather conditions;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors