Expenditures for 2009 at the Donlin Creek gold project in Southwest Alaska – which is operated by Donlin Creek LLC, equally co-owned by NovaGold and Barrick Gold Corp. – totaled about US$25.3 million, with 50 percent contributed by NovaGold.

The 2009 work at Donlin Creek focused on geotechnical drilling for the location of mine facilities, environmental baseline data collection, pre-permitting community advisory meetings and various optimization studies.

For 2010, the Donlin Creek LLC has approved a budget of about US$28 million, half of which will be contributed by NovaGold. The 2010 program will focus on completing optimization studies, including the potential to bring a source of natural gas to the project. NovaGold expects that these studies will be completed by mid-2010, at which point the Donlin Creek LLC will either; file permit applications for the original project design or, upon unanimous Donlin Creek LLC board approval, approve a supplemental budget and proceed to revise the feasibility study to include the natural gas option.

Work at Galore Creek – a large copper-gold-silver project located in northwestern British Columbia that is held by a 50-50 partnership between NovaGold and Teck Resources Inc. – in 2009 focused primarily on roadwork, establishing the initial 48 kilometers, or 30 miles, of the proposed 90-kilometer-, or 56-mile-, road linking the project to Highway 37.

Optimization studies completed in 2008 and 2009 identified a number of modified approaches to the project that show the potential for expansion of project throughput, a shorter construction schedule and relocation of the process facilities along the project access road to allow for easier construction and future expansion.

NovaGold said Galore Creek Mining Corp., owned equally by NovaGold and Teck, is considering a more aggressive program in 2010 to advance the project toward a construction decision. NovaGold plans to release the results of an updated mine plan in the second quarter of 2010 that will use higher copper and gold prices than previous studies and an optimized project design. In addition, the partners expects to prepare a pre-feasibility study to provide updated capital and operating cost estimates with completion targeted for the first half of 2011.

During 2009, expenditures at the Galore Creek project totaled about C$13.6 million and the project received C$7.5 million from the sale of equipment. Under the terms of the Galore Creek Partnership agreement, Teck is funding all costs for the project until it completes its earn-in obligations, and NovaGold expects to have no near-term funding obligations for the Galore Creek project. At Nov.30, 2009, the Galore Creek Partnership had cash of C$4.7 million and Teck had around C$25 million remaining in project contributions to earn its 50 percent interest in the project. Certain road construction equipment and facilities are being recovered and sold as the road progresses. The proceeds from the sales directly fund the project's activities and do not reduce Teck’s required contributions.

NovaGold's Nome Operations comprises three properties: Rock Creek, Big Hurrah and Nome Gold. The properties are located on the Seward Peninsula in Alaska. The most advanced property is Rock Creek, which is 90 percent constructed and designed to produce about 100,000 ounces of gold annually, based on the existing 0.5 million ounces of probable gold reserves, 1.9 million ounces of measured and indicated resources and 0.3 million ounces of inferred resources at the three properties.

On July 2, the company received a notice of violation from the Alaska Department of Environmental Conservation, which alleged that the company violated the terms of its waste management permit at the Rock Creek mine by failing to comply with the water treatment and injection requirements of the mine's temporary closure plan. Since that time the company has improved water treatment and injection, lowering the water building up behind the tailings dam at the mine.

On Dec. 31, NovaGold received a renewed certificate of approval from the Alaska Department of Natural Resources that authorizes continued operation of the mine's tailings storage facility dam. The renewed authorization, which expires Nov. 24, 2011, contains conditions the company must follow to ensure dam safety, including the requirement to treat, inject and apply water at an increased rate to reduce water levels behind the mine’s tailings storage facility dam. The renewed dam authorization also requires NovaGold to notify DNR of its preliminary, future intentions concerning the mine site by Nov. 1, 2010. The certificate of approval terminated an earlier notice of violation.

During 2009, expenditures at NovaGold’s Rock Creek project in Northwest Alaska totaled about C$27.7 million. NovaGold worked diligently in 2009 to improve the project’s water management structures and action plan to ensure the project remains in compliance with all environmental regulations during the coming spring freshet, with the objective of no reportable environmental incidents at the project in 2010.

NovaGold is completing a detailed review process to evaluate start-up requirements for the Rock Creek project, but does not currently plan to initiate start-up activities in 2010.

On Jan. 7, 2010, NovaGold purchased 100 percent of the Ambler project, which hosts the high-grade copper-zinc-gold-silver Arctic deposit. Ambler is an exploration-stage property located in Northwest Alaska comprising 90,614 acres of Federal patented and unpatented mining claims and State of Alaska mining claims, covering a major portion of the precious-metal-rich Ambler volcanogenic massive sulfide belt. A resource estimate for the Arctic deposit totals indicated resources of 2.2 billion pounds of zinc, 1.5 billion pounds of copper, 450,000 ounces of gold, 32 million ounces of silver and 350 million pounds of lead, with additional inferred resources of 1.3 billion pounds of zinc, 937 million pounds of copper, 260,000 ounces of gold, 19 million ounces of silver and 210 million pounds of lead.

During 2010, NovaGold said it will continue its community engagement programs at Ambler and has appointed a project team to plan exploration activities, advance environmental baseline studies and conduct engineering and technical studies at the project, with the goal of gaining a better understanding of the true size and potential of the district as well as the continuity and mineability of the other deposits in the Ambler VMS belt.

For the year ended Nov. 30, NovaGold Resources Inc. reported a loss of C$73.4 million, or C42 cents loss per share, compared to a loss of C$195million, or C$1.84 per share, for the previous year.

Other important variances are as follows: The company’s project care and maintenance charges in 2009 were C$39.6 million compared to C$13.4 million in 2008, due primarily to having both Rock Creek and Galore Creek on care and maintenance in 2009, with just Galore Creek in 2008; interest and accretion expenses for the promissory note, convertible debt and bridge loan in 2009 were C$18.5 million compared with C$5.8 million in 2008; exploration costs were reduced to C$17.9 million in 2009 from C$49.6 million in 2008, reflecting reduced activity at Galore Creek and Rock Creek; and a C$15.2 million foreign exchange gain occurred during 2009, compared to a loss of C$28.7 million in 2008, due primarily to the effect on the company's U.S. dollar-denominated liabilities of the strengthening of the Canadian dollar against the U.S. dollar.

Income from NovaGold’s land and gravel sales, gold royalties and other revenues totaled C$1.2 million in 2009, down sharply from C$2.2 million in 2008 due to decreased land sales in Nome, Alaska. Interest income decreased to C$400,000 in 2009 from C$2.2 million in 2008 as the result of lower interest rates.

Expenses for the year ended Nov. 30, totaled C$85.8 million compared with C$114.0 million in 2008. The decrease is primarily due to lower exploration expenditures of C$17.9 million compared with C$49.6 million in 2008; the Canadian dollar strengthening against the U.S. dollar during the year, resulting in a foreign exchange gain of C$15.2 million, compared with a C$28.7 million foreign exchange loss in 2008; and an increase in project care and maintenance costs to C$39.6 million in 2009 compared with C$13.4 million in 2008.

In 2009, NovaGold sold its interest in five Alaska base metal exploration-stage properties totaling about 397,680 acres of state mining claims and resulting in a C$1.6 million gain on disposal. Also during the year, the disposal of equipment by the Galore Creek Partnership for net proceeds of C$7.5 million resulted in a loss of C$9.7 million. In 2008, the company incurred an asset impairment charge of C$160.9 million with no comparable amount in 2009.

At Nov.30, NovaGold had cash and cash equivalents of C$38.2 million and working capital of C$26.6 million.