Our news releases would be very well written if we were taken out by Novagold.

NOVAGOLD surely has the right assets in the right places. In our view of the world, out of the dwindling number of addresses where one can look for leverage to gold, yet can count on keeping the fruits of that leverage, we believe that Donlin Gold is uniquely attractive. We also believe that we are nearing an inflection point in terms of the market's positive realization that NOVAGOLD holds assets that are extraordinarily well positioned to achieve the premium valuation they deserve. Nonetheless, we have been frustrated by NOVAGOLD's share price performance of late. Despite achieving key objectives across the range of our activities, it is a fact that NOVAGOLD was caught in the backwash of, and negatively impacted by, a misinterpretation by the marketplace of Barrick's second quarter report as to the meaning of that report as it related to Donlin Gold. It is thus important to reiterate that Donlin Gold continues on the permitting path with the full support of its co-owners, NOVAGOLD and Barrick, and at the same pace as projected earlier in the fiscal year. In fact, it should be emphasized that, while other major gold projects around the world have seen delays and de facto cancellation during the quarter, by proceeding at exactly the same pace with permitting as was previously envisioned, Donlin Gold is now essentially moving up the "ranks" in terms of major gold projects and their timelines. As the market realizes that nothing has changed with regard to Donlin Gold's progress, we believe that NOVAGOLD's share price will respond accordingly.

In summary, as a mine builder with considerable experience in our sector, I'm extremely pleased with Donlin Gold's progress to date. Indeed, more than at any time since coming aboard NOVAGOLD, with permitting now underway, I can reaffirm that the opportunity ahead with Donlin Gold is not just unique, but exciting as well. An asset of such quality and scale is not only rare but vital to an industry where reserves are rapidly depleting. In an environment of declining grades, escalating costs and limited discoveries in the gold industry, Donlin Gold, with approximately 39 million ounces of gold in the Measured and Indicated resource categories and with a grade of 2.2 grams per tonne, enjoys the status of being the world's largest known high-grade undeveloped open-pit gold deposit. The size, which understates considerably the true resource potential, is extraordinary. The significance of this statement is magnified when one considers that the grade at Donlin Gold is of such quality that it equals the average grade found in open-pit deposits 10 years ago which compares favorably to today's average reserve grade of 1.1 grams per tonne. One must also remember that the existing footprint of this unusually attractive asset covers only a portion of three kilometers of an eight-kilometer ore-bearing strike length. This represents significant exploration upside potential to substantially increase the endowment's mine life and/or throughput.

As it stands now, once in operation, Donlin Gold is expected to produce approximately 1,500,000 ounces of gold per year in the first five full years of production and, incidentally, is envisioned to enter production as the largest gold producing mine in the world. Assuming no future expansions, it is expected to average well over 1,000,000 ounces per year over its present 27-year life. Donlin Gold is one of only six of the world's gold mines producing or which have the potential to produce in excess of a million gold ounces per year and it is only one of three such mega-assets to be located in North America. Donlin Gold is, moreover, in a location which is not only the second largest gold producer in the United States, but which supports environmentally and socially responsible mining and has very low geo-political risk.

During the third fiscal quarter of 2012, NOVAGOLD continued to work on investigating opportunities to sell all or part of its 50% interest in Galore Creek, jointly and equally owned by NOVAGOLD and Teck Resources Limited. Discussions with several parties are ongoing and the timeline of the sales process has indeed been extended by a quarter to the first quarter 2013 due to the arrival of additional entrants into the process. If an attractive offer is made, we are prepared to sell our share of the asset. If the Company does not get an offer which is reflective of Galore Creek's inherent and, in our view, rising value, NOVAGOLD will not sell its interest but intends to significantly reduce activities until such time as market conditions have improved and the Company can sell its 50% interest for an appropriate amount. The proposed sale would not only allow the Company to achieve the same ‘streamlining' objectives as the sale of its other non-core assets, but it would further strengthen an already strong balance sheet. It should be stated however that, at this point, even without the cash that a transaction on Galore Creek would potentially generate, NOVAGOLD has approximately $267 million in cash on the balance sheet and, with significantly reduced expenditures going forward, the Company has sufficient financial resources to advance Donlin Gold through permitting, as well as meet its other financial obligations.