NovaGold Resources (NG) 10-Q 4 Oct 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Aug. 31, 2016	Sep. 27, 2016
Document And Entity Information
Entity Registrant Name	NOVAGOLD RESOURCES INC
Entity Central Index Key	1,173,420
Document Type	10-Q
Document Period End Date	Aug. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--11-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		320,015,809
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,016

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Aug. 31, 2016	Nov. 30, 2015
ASSETS
Cash and cash equivalents	$ 28,455	$ 41,731
Term deposits	80,000	85,000
Other assets	1,520	3,310
Current assets	109,975	130,041
Investment in Donlin Gold (note 4)	1,761	1,058
Investment in Galore Creek (note 5)	247,317	242,906
Mineral property	44,394	43,605
Deferred income taxes	9,886	9,711
Other assets	7,056	6,263
Total assets	420,389	433,584
LIABILITIES
Accounts payable and accrued liabilities	2,412	3,066
Other liabilities	276	451
Current liabilities	2,688	3,517
Promissory note (note 6)	83,660	80,261
Deferred income taxes	20,881	20,510
Total liabilities	107,229	104,288
Commitments and contingencies (note 13)
EQUITY
Common shares	1,942,451	1,938,262
Contributed surplus	80,756	80,774
Accumulated deficit	(1,698,551)	(1,672,055)
Accumulated other comprehensive loss	(11,496)	(17,685)
Total equity	313,160	329,296
Total liabilities and equity	$ 420,389	$ 433,584

CONDENSED CONSOLIDATED INTERIM

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2016	Aug. 31, 2015	Aug. 31, 2016	Aug. 31, 2015
Operating expenses:
Equity loss – Donlin Gold (note 4)	$ 1,980	$ 2,803	$ 6,485	$ 8,953
Equity loss – Galore Creek (note 5)	212	(346)	726	65
General and administrative (note 8)	4,222	4,062	16,107	15,714
Studies and evaluation	0	52	0	353
Depreciation	8	8	25	26
Total operating expenses	6,422	6,579	23,343	25,111
Loss from operations	(6,422)	(6,579)	(23,343)	(25,111)
Other income (expense) (note 10)	(885)	288	(3,000)	341
Loss before income taxes	(7,307)	(6,291)	(26,343)	(24,770)
Income tax expense	(74)	(10)	(153)	(14)
Net loss	(7,381)	(6,301)	(26,496)	(24,784)
Other comprehensive income (loss):
Unrealized holding gains (losses) on marketable securities during period	42	(75)	637	(327)
Reclassification adjustment for losses included in net loss (note 11)	0	0	0	426
Net unrealized gain (loss), net of $(6), $10, $(92),and $14 tax (expense) recovery	42	(75)	637	99
Foreign currency translation adjustments	(127)	(17,969)	5,552	(48,185)
Other comprehensive loss	(85)	(18,044)	6,189	(48,086)
Comprehensive income (loss)	$ (7,466)	$ (24,345)	$ (20,307)	$ (72,870)
Net loss per common share
Basic and diluted	$ (0.02)	$ (0.02)	$ (0.08)	$ (0.08)
Weighted average shares outstanding
Basic and diluted (thousands)	319,967	317,862	319,694	317,835

CONDENSED CONSOLIDATED INTERIM4

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2016	Aug. 31, 2015	Aug. 31, 2016	Aug. 31, 2015
Operating activities:
Net loss	$ (7,381)	$ (6,301)	$ (26,496)	$ (24,784)
Adjustments to reconcile net income to net cash used in operating activities:
Equity losses of affiliates	2,192	2,457	7,211	9,018
Share-based compensation	1,869	1,673	8,446	7,730
Interest on promissory note	1,155	1,045	3,399	3,066
Depreciation	8	8	25	26
Deferred income taxes	(6)	10	(92)	14
Foreign exchange (gain) loss	(4)	(1,141)	268	(4,356)
Write-down of investments	0	0	0	426
Other	14	(27)	79	638
Withholding tax on stock based compensation	0	0	(4,275)	(827)
Net change in operating assets and liabilities (note 11)	1,618	521	1,016	(864)
Net cash used in operations	(535)	(1,755)	(10,419)	(9,913)
Investing activities:
Proceeds from term deposits	5,000	40,000	90,000	135,000
Purchases of term deposits	(5,000)	(40,000)	(85,000)	(125,000)
Funding of affiliates	(2,742)	(2,757)	(7,935)	(9,219)
Net cash provided from (used in) investing activities	(2,742)	(2,757)	(2,935)	781
Financing activities:
Repayment of debt	0	0	0	(15,829)
Net cash provided from financing activities	0	0	0	(15,829)
Effect of exchange rate changes on cash	(11)	(197)	78	(377)
Decrease in cash and cash equivalents	(3,288)	(4,709)	(13,276)	(25,338)
Cash and cash equivalents at beginning of period	31,743	49,696	41,731	70,325
Cash and cash equivalents at end of period	$ 28,455	$ 44,987	$ 28,455	$ 44,987

CONDENSED CONSOLIDATED INTERIM5

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF EQUITY - USD ($) $ in Thousands	Common Stock	Contributed Surplus	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Total
Beginning Balance, shares at Nov. 30, 2014	317,288
Beginning Balance, amount at Nov. 30, 2014	$ 1,936,336	$ 74,038	$ (1,640,103)	$ 34,845	$ 405,116
Net loss			(31,952)		(31,952)
Other comprehensive loss				(52,530)	(52,530)
Share-based compensation and related share issuances, shares	622
Share-based compensation and related share issuances, amount	$ 1,926	6,736			8,662
Ending Balance, shares at Nov. 30, 2015	317,910
Ending Balance, amount at Nov. 30, 2015	$ 1,938,262	80,774	(1,672,055)	(17,685)	329,296
Net loss			(26,496)		(26,496)
Other comprehensive loss				6,189	6,189
Share-based compensation and related share issuances, shares	2,106
Share-based compensation and related share issuances, amount	$ 4,189	(18)			4,171
Ending Balance, shares at Aug. 31, 2016	320,016
Ending Balance, amount at Aug. 31, 2016	$ 1,942,451	$ 80,756	$ (1,698,551)	$ (11,496)	$ 313,160

NOTE 1. NATURE OF OPERATIONS AN

NOTE 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION	9 Months Ended
	Aug. 31, 2016
Accounting Policies [Abstract]
NOTE 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION	NOVAGOLD RESOURCES INC. and its affiliates and subsidiaries (collectively, “NOVAGOLD” or the “Company”) operates in the mining industry, focused on the exploration for and development of gold and copper mineral properties. The Company has no operations or realized revenues from its planned principal business purpose. The Company’s principal assets include a 50% interest in the Donlin Gold project in Alaska, U.S.A. and a 50% interest in the Galore Creek project in British Columbia, Canada. The Condensed Consolidated Interim Financial Statements of NOVAGOLD are unaudited. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. These interim statements should be read in conjunction with NOVAGOLD’s Consolidated Financial Statements for the year ended November 30, 2015. The year-end balance sheet data was derived from the audited financial statements and certain information and footnote disclosures required by United States generally accepted accounting principles (US GAAP) have been condensed or omitted. The functional currency for the Company’s Canadian operations is the Canadian dollar and the functional currency for the Company’s U.S. operations is the U.S. dollar. References to “$” refer to United States currency and “C$” to Canadian currency. Dollar amounts are in thousands, except for per share amounts.

NOTE 2. SUMMARY OF SIGNIFICANT

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Aug. 31, 2016
Accounting Policies [Abstract]
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Recently adopted accounting pronouncements Consolidation – Amendments to the Consolidation Analysis In February 2015, Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) guidance was issued to amend current consolidation guidance. The amendments affect both the variable interest entity and voting interest entity consolidation models and primarily relate to: limited partnerships and similar legal entities; evaluating fees paid to a decision maker or a service provider as a variable interest; the effect of fee arrangements on the primary beneficiary determination; the effect of related parties on the primary beneficiary determination; and certain investment funds. The Company determined that these changes did not have an impact on its previous consolidation analysis and elected early adoption of the new standard effective for the Company’s fiscal year beginning December 1, 2016. Application of the new guidance had no impact on the consolidated financial position, results of operations or cash flows. Recently issued accounting pronouncements Classification of Certain Cash Receipts and Cash Payments In August 2016, ASC guidance was issued to amend the classification of certain cash receipts and cash payments in the statement of cash flows. The new guidance is effective for the Company’s fiscal year and interim periods beginning December 1, 2018. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The Company is currently evaluating this guidance and the impact on its consolidated financial statements. Compensation—Stock Compensation In March 2016, ASC guidance was issued to amend employee share-based payment accounting. The new guidance amends several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance is effective for the Company’s fiscal year and interim periods beginning December 1, 2017. Early adoption is permitted in any interim or annual period. If adopted in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. All of the amendments must be adopted in the same period. The Company is currently evaluating this guidance and the impact on its consolidated financial statements. Leases In February 2016, ASC guidance was issued to amend lease accounting guidance. The new guidance amends the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases and amends disclosure requirements associated with leasing arrangements. The new guidance is effective for the Company’s fiscal year beginning December 1, 2019. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. The Company is currently evaluating this guidance and the impact on its consolidated financial statements. Classification and Measurement of Financial Instruments In January 2016, ASC guidance was issued to amend the guidance on the classification and measurement of financial instruments. The new guidance significantly revises an entity’s accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The new guidance also amends certain disclosure requirements associated with the fair value of financial instruments. The new guidance is effective for the Company’s fiscal year beginning December 1, 2018. Early adoption for most of the provisions is not allowed. The Company is currently evaluating this guidance and the impact on its consolidated financial statements.

NOTE 3. SEGMENTED INFORMATION

NOTE 3. SEGMENTED INFORMATION	9 Months Ended
	Aug. 31, 2016
Segment Reporting [Abstract]
NOTE 3. SEGMENTED INFORMATION	Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chief Executive Officer. The Chief Executive Officer considers the business from a geographic perspective considering the performance of our investments in the Donlin Gold project in Alaska, U.S.A. and the Galore Creek project in British Columbia, Canada. Segment information is provided on each of the material projects individually in notes 4 and 5.

NOTE 4. INVESTMENTS IN DONLIN G

NOTE 4. INVESTMENTS IN DONLIN GOLD	9 Months Ended
	Aug. 31, 2016
Schedule of Investments [Abstract]
NOTE 4. INVESTMENTS IN DONLIN GOLD	The Donlin Gold project is owned and operated by Donlin Gold LLC, a limited liability company in which wholly owned subsidiaries of Barrick Gold Corporation (“Barrick”) and NOVAGOLD each own a 50% interest. Donlin Gold LLC has a board of four directors, with two directors selected by Barrick and two directors selected by the Company. All significant decisions related to Donlin Gold LLC require the approval of both Barrick and the Company. Changes in the Company’s 50% investment in Donlin Gold LLC are summarized as follows: Three months ended August 31, Nine months ended August 31, 2016 2015 2016 2015 Balance – beginning of period $ 1,287 $ 1,486 $ 1,058 $ 1,618 Share of losses: Mineral property expenditures (1,947 ) (2,760 ) (6,377 ) (8,825 ) Depreciation (33 ) (43 ) (108 ) (128 ) (1,980 ) (2,803 ) (6,485 ) (8,953 ) Funding 2,454 2,693 7,188 8,711 Balance – end of period $ 1,761 $ 1,376 $ 1,761 $ 1,376 The following amounts represent the Company’s 50% share of the assets and liabilities of Donlin Gold LLC. Donlin Gold LLC has capitalized as Mineral property the initial contribution of the Donlin Gold property with a carrying value of $64,000 resulting in a higher carrying value of the Mineral property than the Company. At August 31, 2016 At November 30, 2015 Current assets: Cash, prepaid expenses and other receivables $ 1,862 $ 1,762 Non-current assets: Property and equipment 677 232 Non-current assets: Mineral property 32,692 32,692 Current liabilities: Accounts payable and accrued liabilities (778 ) (936 ) Non-current liabilities: Reclamation obligation (692 ) (692 ) Net assets $ 33,761 $ 33,058

NOTE 5. INVESTMENT IN GALORE CR

NOTE 5. INVESTMENT IN GALORE CREEK	9 Months Ended
	Aug. 31, 2016
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]
NOTE 5. INVESTMENT IN GALORE CREEK	The Galore Creek project is owned by Galore Creek Partnership (GCP), a partnership in which Teck Resources Limited (“Teck”) and a wholly owned subsidiary of NOVAGOLD each own a 50% interest. GCP has a board of four directors, with two members selected by Teck and two members selected by the Company. All significant decisions related to GCP require the approval of both Teck and the Company. GCP prepares its financial statements under International Financial Reporting Standards, as issued by the IASB, and presents its financial statements in Canadian dollars. In accounting for its investment in GCP, the Company converts and presents reported amounts in accordance with US GAAP and in U.S. dollars. Changes in the Company’s investment in GCP are summarized as follows: Three months ended August 31, Nine months ended August 31, 2016 2015 2016 2015 Balance – beginning of period $ 247,352 $ 260,606 $ 242,906 $ 283,247 Share of gains (losses): Mineral property expenditures (13 ) (46 ) (146 ) (71 ) Care and maintenance expense (199 ) (247 ) (580 ) (633 ) Gain on sale of equipment — 639 — 639 (212 ) 346 (726 ) (65 ) Funding 288 64 747 508 Foreign currency translation (111 ) (14,285 ) 4,390 (36,959 ) Balance – end of period $ 247,317 $ 246,731 $ 247,317 $ 246,731 The following amounts represent the Company’s 50% share of the assets and liabilities of GCP presented in U.S. dollars and in accordance with US GAAP. As a result of recording the Company’s investment at fair value in June 2011, the carrying value of the Company’s 50% interest is higher than 50% of the book value of GCP. Therefore, the Company’s investment does not equal 50% of the net assets recorded by GCP: At August 31, 2016 At November 30, 2015 Current assets: Cash, prepaid expenses and other receivables $ 282 $ 497 Non-current assets: Mineral property 222,481 218,532 Current liabilities: Accounts payable and accrued liabilities (71 ) (365 ) Non-current liabilities: Reclamation obligation (7,292 ) (7,162 ) Net assets $ 215,400 $ 211,502

NOTE 6. PROMISSORY NOTE

NOTE 6. PROMISSORY NOTE	9 Months Ended
	Aug. 31, 2016
Debt Disclosure [Abstract]
NOTE 6. PROMISSORY NOTE	The Company has a promissory note payable to Barrick for $51,576, plus interest at a rate of U.S. prime plus 2%, amounting to $32,084 in accrued interest. The promissory note resulted from the agreement that led to the formation of Donlin Gold LLC, where the Company agreed to reimburse Barrick for a portion of their expenditures incurred from April 1, 2006 to November 30, 2007. The promissory note and accrued interest are payable from 85% of the Company’s share of revenue from future mine production or from any net proceeds resulting from a reduction of the Company’s interest in Donlin Gold LLC. The carrying value of the promissory note approximates fair value.

NOTE 7. FAIR VALUE ACCOUNTING

NOTE 7. FAIR VALUE ACCOUNTING	9 Months Ended
	Aug. 31, 2016
Fair Value Disclosures [Abstract]
NOTE 7. FAIR VALUE ACCOUNTING	Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the significance of the inputs used in making the measurement. The three levels of the fair value hierarchy are as follows: Level 1 Level 2 Level 3 The Company’s marketable equity securities are valued using quoted market prices in active markets and as such are classified within Level 1 of the fair value hierarchy. The fair value of the marketable equity securities was $1,303 at August 31, 2016 ($571 at November 30, 2015), calculated as the quoted market price of the marketable equity security multiplied by the quantity of shares held by the Company.

NOTE 8. GENERAL AND ADMINISTRAT

NOTE 8. GENERAL AND ADMINISTRATIVE EXPENSES	9 Months Ended
	Aug. 31, 2016
Other Income and Expenses [Abstract]
NOTE 8. GENERAL AND ADMINISTRATIVE EXPENSES	Three months ended August 31, Nine months ended August 31, 2016 2015 2016 2015 Salaries $ 1,536 $ 1,513 $ 4,852 $ 4,563 Share-based compensation 1,869 1,673 8,446 7,730 Office expense 457 503 1,512 1,571 Professional fees 256 176 524 554 Corporate development and communications 104 197 773 1,296 $ 4,222 $ 4,062 $ 16,107 $ 15,714

NOTE 9. SHARE-BASED COMPENSATIO

NOTE 9. SHARE-BASED COMPENSATION	9 Months Ended
	Aug. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
NOTE 9. SHARE-BASED COMPENSATION	Three months ended August 31, Nine months ended August 31, 2016 2015 2016 2015 Stock options $ 734 $ 493 $ 5,138 $ 4,111 Performance share unit plan 1,077 1,124 3,142 3,457 Deferred share unit plan 58 56 166 162 $ 1,869 $ 1,673 $ 8,446 $ 7,730 In the first nine months of 2016, the Company granted 4,586,700 share options to employees and directors with an exercise price of C$5.02 per share and a fair value of C$1.83 per share. The Company also granted 1,241,900 performance share units (PSUs) to employees with a fair value of C$4.65 per unit. PSU grants made on January 4, 2014 vested and were paid out on December 1, 2015 in common shares of the Company at 140% of the PSU grant amount. The Company elected to remit PSU withholding taxes of $4,275 using cash and issued the net amount of 1,377,364 shares to holders. In the first nine months of 2015, the Company granted 4,359,450 share options to employees and directors with an exercise price of C$3.18 per share and a fair value of C$1.28 per share. The Company also granted 1,377,250 PSUs to employees with a fair value of C$3.86 per unit. PSU grants made on December 5, 2012 vested and were paid out on December 5, 2014 in common shares of the Company at 137% of the PSU grant amount. The Company elected to remit PSU withholding taxes of $827 using cash and issued the net amount of 506,175 shares to holders.

NOTE 10. OTHER INCOME (EXPENSE)

NOTE 10. OTHER INCOME (EXPENSE)	9 Months Ended
	Aug. 31, 2016
Note 10. Other Income Expense
NOTE 10. OTHER INCOME (EXPENSE)	Three months ended August 31, Nine months ended August 31, 2016 2015 2016 2015 Interest income $ 266 $ 192 $ 667 $ 557 Interest expense (1,155 ) (1,045 ) (3,399 ) (4,146 ) Foreign exchange gain (loss) 4 1,141 (268 ) 4,356 Write-down of investments — — — (426 ) $ (885 ) $ 288 $ (3,000 ) $ 341 During the nine month period ended August 31, 2015, a loss of $426 related to marketable equity securities was reclassified from other comprehensive income (loss) to net loss.

NOTE 11. CHANGE IN OPERATING AS

NOTE 11. CHANGE IN OPERATING ASSETS AND LIABILITIES	9 Months Ended
	Aug. 31, 2016
Increase (Decrease) in Operating Capital [Abstract]
NOTE 11. CHANGE IN OPERATING ASSETS AND LIABILITIES	Three months ended August 31, Nine months ended August 31, 2016 2015 2016 2015 Decrease in receivables, deposits and prepaid amounts $ 915 $ 54 $ 1,856 $ 559 Increase (decrease) in accounts payable and accrued liabilities 721 497 (665 ) (1,316 ) Decrease in other liabilities (19 ) (30 ) (175 ) (107 ) $ 1,618 $ 521 $ 1,016 $ (864 )

NOTE 12. RELATED PARTY TRANSACT

NOTE 12. RELATED PARTY TRANSACTIONS	9 Months Ended
	Aug. 31, 2016
Related Party Transactions [Abstract]
NOTE 12. RELATED PARTY TRANSACTIONS	During the first nine months of 2016, the Company provided office rental and services to GCP for $251 ($266 in the first nine months of 2015). As of August 31, 2016, the Company has accounts receivable from GCP of $28 (November 30, 2015: $28) included in other current assets and a receivable of $3,610 (November 30, 2015: $3,546) from GCP included in other long-term assets.

NOTE 13. COMMITMENTS AND CONTIN

NOTE 13. COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Aug. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
NOTE 13. COMMITMENTS AND CONTINGENCIES	General The Company follows ASC guidance in determining its accruals and disclosures with respect to loss contingencies. Accordingly, estimated losses from loss contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it is probable that a liability could be incurred and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least reasonably possible that a material loss could be incurred. Obligations under operating leases The Company leases certain assets, such as office equipment and office facilities, under operating leases expiring at various dates through 2017. Future minimum annual lease payments are $93 in the remainder of 2016, $325 in 2017 and $18 in 2018, totaling $436.

NOTE 2. SUMMARY OF SIGNIFICAN19

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Aug. 31, 2016
Accounting Policies [Abstract]
Recently adopted accounting pronouncements	Consolidation – Amendments to the Consolidation Analysis In February 2015, Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) guidance was issued to amend current consolidation guidance. The amendments affect both the variable interest entity and voting interest entity consolidation models and primarily relate to: limited partnerships and similar legal entities; evaluating fees paid to a decision maker or a service provider as a variable interest; the effect of fee arrangements on the primary beneficiary determination; the effect of related parties on the primary beneficiary determination; and certain investment funds. The Company determined that these changes did not have an impact on its previous consolidation analysis and elected early adoption of the new standard effective for the Company’s fiscal year beginning December 1, 2016. Application of the new guidance had no impact on the consolidated financial position, results of operations or cash flows.
Recently issued accounting pronouncements	Classification of Certain Cash Receipts and Cash Payments In August 2016, ASC guidance was issued to amend the classification of certain cash receipts and cash payments in the statement of cash flows. The new guidance is effective for the Company’s fiscal year and interim periods beginning December 1, 2018. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The Company is currently evaluating this guidance and the impact on its consolidated financial statements. Compensation—Stock Compensation In March 2016, ASC guidance was issued to amend employee share-based payment accounting. The new guidance amends several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance is effective for the Company’s fiscal year and interim periods beginning December 1, 2017. Early adoption is permitted in any interim or annual period. If adopted in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. All of the amendments must be adopted in the same period. The Company is currently evaluating this guidance and the impact on its consolidated financial statements. Leases In February 2016, ASC guidance was issued to amend lease accounting guidance. The new guidance amends the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases and amends disclosure requirements associated with leasing arrangements. The new guidance is effective for the Company’s fiscal year beginning December 1, 2019. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. The Company is currently evaluating this guidance and the impact on its consolidated financial statements. Classification and Measurement of Financial Instruments In January 2016, ASC guidance was issued to amend the guidance on the classification and measurement of financial instruments. The new guidance significantly revises an entity’s accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The new guidance also amends certain disclosure requirements associated with the fair value of financial instruments. The new guidance is effective for the Company’s fiscal year beginning December 1, 2018. Early adoption for most of the provisions is not allowed. The Company is currently evaluating this guidance and the impact on its consolidated financial statements.

NOTE 4. INVESTMENT IN DONLIN GO

NOTE 4. INVESTMENT IN DONLIN GOLD (Tables) - Donlin Gold LLC Alaska USA	9 Months Ended
	Aug. 31, 2016
Changes in the Company's investment	Three months ended August 31, Nine months ended August 31, 2016 2015 2016 2015 Balance – beginning of period $ 1,287 $ 1,486 $ 1,058 $ 1,618 Share of losses: Mineral property expenditures (1,947 ) (2,760 ) (6,377 ) (8,825 ) Depreciation (33 ) (43 ) (108 ) (128 ) (1,980 ) (2,803 ) (6,485 ) (8,953 ) Funding 2,454 2,693 7,188 8,711 Balance – end of period $ 1,761 $ 1,376 $ 1,761 $ 1,376
Net assets	At August 31, 2016 At November 30, 2015 Current assets: Cash, prepaid expenses and other receivables $ 1,862 $ 1,762 Non-current assets: Property and equipment 677 232 Non-current assets: Mineral property 32,692 32,692 Current liabilities: Accounts payable and accrued liabilities (778 ) (936 ) Non-current liabilities: Reclamation obligation (692 ) (692 ) Net assets $ 33,761 $ 33,058

NOTE 5. INVESTMENT IN GALORE 21

NOTE 5. INVESTMENT IN GALORE CREEK (Tables) - The Galore Creek Partnership, British Columbia, Canada	9 Months Ended
	Aug. 31, 2016
Changes in the Company's investment	Three months ended August 31, Nine months ended August 31, 2016 2015 2016 2015 Balance – beginning of period $ 247,352 $ 260,606 $ 242,906 $ 283,247 Share of gains (losses): Mineral property expenditures (13 ) (46 ) (146 ) (71 ) Care and maintenance expense (199 ) (247 ) (580 ) (633 ) Gain on sale of equipment — 639 — 639 (212 ) 346 (726 ) (65 ) Funding 288 64 747 508 Foreign currency translation (111 ) (14,285 ) 4,390 (36,959 ) Balance – end of period $ 247,317 $ 246,731 $ 247,317 $ 246,731
Net assets	At August 31, 2016 At November 30, 2015 Current assets: Cash, prepaid expenses and other receivables $ 282 $ 497 Non-current assets: Mineral property 222,481 218,532 Current liabilities: Accounts payable and accrued liabilities (71 ) (365 ) Non-current liabilities: Reclamation obligation (7,292 ) (7,162 ) Net assets $ 215,400 $ 211,502

NOTE 8. GENERAL AND ADMINISTR22

NOTE 8. GENERAL AND ADMINISTRATIVE EXPENSES (Tables)	9 Months Ended
	Aug. 31, 2016
Other Income and Expenses [Abstract]
Summary of general and administrative expenses	Three months ended August 31, Nine months ended August 31, 2016 2015 2016 2015 Salaries $ 1,536 $ 1,513 $ 4,852 $ 4,563 Share-based compensation 1,869 1,673 8,446 7,730 Office expense 457 503 1,512 1,571 Professional fees 256 176 524 554 Corporate development and communications 104 197 773 1,296 $ 4,222 $ 4,062 $ 16,107 $ 15,714

NOTE 9. SHARE-BASED COMPENSAT23

NOTE 9. SHARE-BASED COMPENSATION (Tables)	9 Months Ended
	Aug. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of share based compensation	Three months ended August 31, Nine months ended August 31, 2016 2015 2016 2015 Stock options $ 734 $ 493 $ 5,138 $ 4,111 Performance share unit plan 1,077 1,124 3,142 3,457 Deferred share unit plan 58 56 166 162 $ 1,869 $ 1,673 $ 8,446 $ 7,730

NOTE 10. OTHER INCOME (EXPENS24

NOTE 10. OTHER INCOME (EXPENSE) (Tables)	9 Months Ended
	Aug. 31, 2016
Supplemental Cash Flow Elements [Abstract]
Summary of other income (expense)	Three months ended August 31, Nine months ended August 31, 2016 2015 2016 2015 Interest income $ 266 $ 192 $ 667 $ 557 Interest expense (1,155 ) (1,045 ) (3,399 ) (4,146 ) Foreign exchange gain (loss) 4 1,141 (268 ) 4,356 Write-down of investments — — — (426 ) $ (885 ) $ 288 $ (3,000 ) $ 341

NOTE 11. CHANGE IN OPERATING 25

NOTE 11. CHANGE IN OPERATING ASSETS AND LIABILITIES (Tables)	9 Months Ended
	Aug. 31, 2016
Note 11. Change In Operating Assets And Liabilities Tables
CHANGE IN OPERATING ASSETS AND LIABILITIES	Three months ended August 31, Nine months ended August 31, 2016 2015 2016 2015 Decrease in receivables, deposits and prepaid amounts $ 915 $ 54 $ 1,856 $ 559 Increase (decrease) in accounts payable and accrued liabilities 721 497 (665 ) (1,316 ) Decrease in other liabilities (19 ) (30 ) (175 ) (107 ) $ 1,618 $ 521 $ 1,016 $ (864 )

NOTE 4. INVESTMENT IN DONLIN 26

NOTE 4. INVESTMENT IN DONLIN GOLD (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2016	Aug. 31, 2015	Aug. 31, 2016	Aug. 31, 2015
Balance - beginning of period			$ 242,906
Share of losses
Depreciation	$ 8	$ 8	25	$ 26
Share of losses	(212)	346	(726)	(65)
Balance - end of period	247,317		247,317
Donlin Gold LLC, Alaska, USA
Balance - beginning of period	1,287	1,486	1,058	1,618
Share of losses
Mineral property expenditures	(1,947)	(2,760)	(6,377)	(8,825)
Depreciation	(33)	(43)	(108)	(128)
Share of losses	(1,980)	(2,803)	(6,485)	(8,953)
Funding	2,454	2,693	7,188	8,711
Balance - end of period	$ 1,761	$ 1,376	$ 1,761	$ 1,376

NOTE 4. INVESTMENT IN DONLIN 27

NOTE 4. INVESTMENT IN DONLIN GOLD (Details 1) - Donlin Gold LLC, Alaska, USA - USD ($) $ in Thousands	Aug. 31, 2016	Nov. 30, 2015
Current assets: Cash, prepaid expenses and other receivables	$ 1,862	$ 1,762
Non-current assets: Property and equipment	677	232
Non-current assets: Mineral property	32,692	32,692
Current liabilities: Accounts payable and accrued liabilities	(778)	(936)
Non-current liabilities: Reclamation obligation	(692)	(692)
Net assets	$ 33,761	$ 33,058

NOTE 5. INVESTMENT IN GALORE 28

NOTE 5. INVESTMENT IN GALORE CREEK (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2016	Aug. 31, 2015	Aug. 31, 2016	Aug. 31, 2015
Balance - beginning of period			$ 242,906
Share of losses
Share of losses	$ (212)	$ 346	(726)	$ (65)
Balance - end of period	247,317		247,317
The Galore Creek Partnership, British Columbia, Canada
Balance - beginning of period	247,352	260,606	242,906	283,247
Share of losses
Mineral property expenditures	(13)	(46)	(146)	(71)
Care and maintenance expense	(199)	(247)	(580)	(633)
Gain on sale of equipment	0	639	0	639
Share of losses	(212)	346	(726)	(65)
Funding	288	64	747	508
Foreign currency translation	(111)	(14,285)	4,390	(36,959)
Balance - end of period	$ 247,317	$ 246,731	$ 247,317	$ 246,731

NOTE 5. INVESTMENT IN GALORE 29

NOTE 5. INVESTMENT IN GALORE CREEK (Details 1) - The Galore Creek Partnership, British Columbia, Canada - USD ($) $ in Thousands	Aug. 31, 2016	Nov. 30, 2015
Current assets: Cash, prepaid expenses and other receivables	$ 282	$ 497
Non-current assets: Mineral property	222,481	218,532
Current liabilities: Accounts payable and accrued liabilities	(71)	(365)
Non-current liabilities: Reclamation obligation	(7,292)	(7,162)
Net assets	$ 215,400	$ 211,502

NOTE 8. GENERAL AND ADMINISTR30

NOTE 8. GENERAL AND ADMINISTRATIVE EXPENSES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2016	Aug. 31, 2015	Aug. 31, 2016	Aug. 31, 2015
Other Income and Expenses [Abstract]
Salaries	$ 1,536	$ 1,513	$ 4,852	$ 4,563
Share based compensation	1,869	1,673	8,446	7,730
Office expense	457	503	1,512	1,571
Professional fees	256	176	524	554
Corporate development and communications	104	197	773	1,296
General and administrative	$ 4,222	$ 4,062	$ 16,107	$ 15,714

NOTE 9. SHARE-BASED COMPENSAT31

NOTE 9. SHARE-BASED COMPENSATION (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2016	Aug. 31, 2015	Aug. 31, 2016	Aug. 31, 2015
Note 9. Share-based Compensation Details
Stock options	$ 734	$ 493	$ 5,138	$ 4,111
Performance share unit plan	1,077	1,124	3,142	3,457
Deferred share unit plan	58	56	166	162
Net Share Based Compensation	$ 1,869	$ 1,673	$ 8,446	$ 7,730

NOTE 10. OTHER INCOME (EXPENS32

NOTE 10. OTHER INCOME (EXPENSE) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2016	Aug. 31, 2015	Aug. 31, 2016	Aug. 31, 2015
Note 10. Other Income Expense Details
Interest income	$ 266	$ 192	$ 667	$ 557
Interest expense	(1,155)	(1,045)	(3,399)	(4,146)
Foreign exchange gain (loss)	4	1,141	(268)	4,356
Write-down of investments	0	0	0	(426)
Total other income (expense)	$ (885)	$ 288	$ (3,000)	$ 341

NOTE 11. CHANGE IN OPERATING 33

NOTE 11. CHANGE IN OPERATING ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2016	Aug. 31, 2015	Aug. 31, 2016	Aug. 31, 2015
Supplemental Cash Flow Elements [Abstract]
Decrease in receivables, deposits and prepaid amounts	$ 915	$ 54	$ 1,856	$ 559
Increase (decrease) in accounts payable and accrued liabilities	721	497	(665)	(1,316)
Decrease in other liabilities	(19)	(30)	(175)	(107)
Net change in operating assets and liabilities (note 13)	$ 1,618	$ 521	$ 1,016	$ (864)

NOTE 12. RELATED PARTY TRANSA34

NOTE 12. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) $ in Thousands	9 Months Ended
	Aug. 31, 2016	Aug. 31, 2015	Nov. 30, 2015
Office rental and services	$ 251	$ 266
The Galore Creek Partnership, British Columbia, Canada
Account receivable, related party - current	28		$ 28
Account receivable, related party - noncurrent	$ 3,610		$ 3,546

NOTE 13. COMMITMENTS AND CONT35

NOTE 13. COMMITMENTS AND CONTINGENCIES (Details Narrative) $ in Thousands	Aug. 31, 2016USD ($)
Note 13. Commitments And Contingencies Details Narrative
2,016	$ 93
2,017	325
2,018	18
Total	$ 436