Form 10-Q NOVAGOLD RESOURCES INC For: Feb 28

April 5, 2022 5:16 PM EDT

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 10-Q

 

         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended February 28, 2022

OR

 

         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Transition Period from              to                 

Commission File Number: 001-31913

 

logo.jpg

 

NOVAGOLD RESOURCES INC.

(Exact Name of Registrant as Specified in Its Charter)

 

British Columbia

N/A

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

 

201 South Main Street, Suite 400

Salt Lake City, Utah, USA

84111

(Address of Principal Executive Offices)

(Zip Code)

 

(801) 639-0511

(Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

 

Title of Each ClassTrading SymbolName of each exchange on which registered
Common Shares, no par valueNGNYSE American
  Toronto Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

 

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

 

Large accelerated filer

Non-accelerated filer ☐

Smaller reporting company

 
 Accelerated filer ☐ Emerging growth company  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

 

As of March 29, 2022, the Company had 333,192,571 common shares, no par value, outstanding.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOVAGOLD RESOURCES INC.

 

TABLE OF CONTENTS

 

 

Page
   

PART I - FINANCIAL INFORMATION

1
   

Item 1.         Financial Statements

1

Item 2.         Management’s Discussion and Analysis of Financial Condition and Results of Operations

11

Item 3.         Quantitative and Qualitative Disclosures about Market Risk

15

Item 4.         Controls and Procedures

15
   

PART II - OTHER INFORMATION

16
   

Item 1.         Legal Proceedings

16

Item 1A.      Risk Factors

16

Item 2.         Unregistered Sales of Equity Securities and Use of Proceeds

16

Item 3.         Defaults Upon Senior Securities

16

Item 4.         Mine Safety Disclosures

16

Item 5.         Other Information

16

Item 6.         Exhibits

16

 

 

 

 

 

 

 

 

 

 

 

 

This Quarterly Report on Form 10-Q contains forward-looking statements or information within the meaning of Canadian securities laws and the United States Private Securities Litigation Reform Act of 1995 concerning anticipated results and developments in our operations in future periods, planned exploration activities, the adequacy of our financial resources and other events or conditions that may occur in the future. These forward-looking statements may include statements regarding perceived merit of properties, exploration results and budgets, mineral reserves and mineral resource estimates, work programs, capital expenditures, operating costs, cash flow estimates, production estimates and similar statements relating to the economic viability of a project, timelines, strategic plans, including our plans and expectations relating to the Donlin Gold project, permitting and the timing thereof, market prices for precious metals, or other statements that are not statements of fact. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Statements concerning mineral resource estimates may also be deemed to constitute “forward-looking statements” to the extent that they involve estimates of the mineralization that will be encountered if the property is developed.

 

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such as “expects”, “is expected”, “anticipates”, “believes”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential”, “possible” or variations thereof or stating that certain actions, events, conditions or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.

 

Forward-looking statements are based on a number of material assumptions, including those listed below, which could prove to be significantly incorrect:

 

 

our ability to achieve production at the Donlin Gold project;

 

 

estimated capital costs, operating costs, production and economic returns;

 

 

estimated metal pricing, metallurgy, mineability, marketability and operating and capital costs, together with other assumptions underlying our mineral resource and mineral reserve estimates;

 

 

our expected ability to develop adequate infrastructure and that the cost of doing so will be reasonable;

 

 

assumptions that all necessary permits and governmental approvals will be obtained and retained, and the timing of such approvals;

 

 

assumptions made in the interpretation of drill results, the geology, grade and continuity of our mineral deposits;

 

 

our expectations regarding demand for equipment, skilled labor and services needed for the Donlin Gold project; and

 

 

our activities will not be adversely disrupted or impeded by development, operating or regulatory risks

 

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation:

 

 

uncertainty of whether there will ever be production at the Donlin Gold project;

 

 

our history of losses and expectation of future losses;

 

 

risks related to our ability to finance the development of the Donlin Gold project through external financing, strategic alliances, the sale of property interests or otherwise;

 

 

uncertainty of estimates of capital costs, operating costs, production and economic returns;

 

 

commodity price fluctuations;

 

 

risks related to market events and general economic conditions;

 

 

risks related to the coronavirus global health pandemic (COVID-19);

 

 

 

 

risks related to the third parties on which we depend for Donlin Gold project activities;

 

 

dependence on cooperation of joint venture partners in exploration and development of the Donlin Gold project;

 

 

risks related to opposition to our operations at our mineral exploration and development properties from non-governmental organizations or civil society;

 

 

the risk that permits and governmental approvals necessary to develop and operate the Donlin Gold project will not be available on a timely basis, subject to reasonable conditions, or at all;

 

 

risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of our mineral deposits;

 

 

uncertainties relating to the assumptions underlying our mineral resource and mineral reserve estimates, such as metal pricing, metallurgy, mineability, marketability and operating and capital costs;

 

 

risks related to the inability to develop or access the infrastructure required to construct and operate the Donlin Gold project;

 

 

uncertainty related to title to the Donlin Gold project;

 

 

mining and development risks, including risks related to infrastructure, accidents, equipment breakdowns, labor disputes or other unanticipated difficulties with, or interruptions in, development, construction or production;

 

 

competition in the mining industry;

 

 

risks related to governmental regulation and permits, including environmental regulation;

 

 

risks related to our largest shareholder;

 

 

risks related to conflicts of interests of some of the directors and officers of the Company;

 

 

risks related to the need for reclamation activities on our properties and uncertainty of cost estimates related thereto;

 

 

credit, liquidity, interest rate and currency risks;

 

 

risks related to increases in demand for equipment, skilled labor and services needed for exploration and development of the Donlin Gold project, and related cost increases;

 

 

our need to attract and retain qualified management, administrative, and technical personnel;

 

 

uncertainty as to the outcome of potential litigation;

 

 

risks related to information technology systems;

 

 

risks related to the Company’s status as a “passive foreign investment company” in the United States; and

 

 

risks related to the effects of global climate change on the Donlin Gold project.

 

This list is not exhaustive of the factors that may affect any of our forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and our actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in our Annual Report on Form 10-K for the year ended November 30, 2021 and this Quarterly Report on Form 10-Q under the heading “Risk Factors” and elsewhere.

 

Our forward-looking statements contained in this Quarterly Report on Form 10-Q are based on the beliefs, expectations and opinions of management as of the date of this report. We do not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions should change, except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

 

 

 

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

NOVAGOLD RESOURCES INC.

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS

(Unaudited, US dollars in thousands)

 

  

As of

February 28,

2022

  

As of

November 30,

2021

 

ASSETS

        

Cash and cash equivalents

 $77,133  $91,124 

Term deposits

  78,000   78,000 

Other assets (Note 6)

  1,310   327 

Current assets

  156,443   169,451 

Notes receivable (Note 4)

  23,782   23,572 

Investment in Donlin Gold (Note 5)

  5,472   3,576 

Other assets (Note 6)

  2,714   2,253 

Total assets

 $188,411  $198,852 
         

Accounts payable and accrued liabilities

 $536  $682 

Accrued payroll and related benefits

  731   2,637 

Other liabilities (Note 8)

  1,031   1,064 

Current liabilities

  2,298   4,383 

Promissory note (Note 7)

  117,235   115,723 

Other liabilities (Note 8)

  444   464 

Total liabilities

  119,977   120,570 
         

Commitments and contingencies (Notes 7 and 8)

          
         

EQUITY

        

Common shares

  1,980,801   1,978,520 

Contributed surplus

  79,904   82,216 

Accumulated deficit

  (1,969,160)  (1,959,165)

Accumulated other comprehensive loss

  (23,111)  (23,289)

Total equity

  68,434   78,282 

Total liabilities and equity

 $188,411  $198,852 

 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

 

These condensed consolidated interim financial statements are authorized for issue by the Board of Directors on April 5, 2022. They are signed on the Company’s behalf by:

 

/s/ Gregory A. Lang       /s/ Anthony P. Walsh     

 

 

 

 

1

 

 

 

NOVAGOLD RESOURCES INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(Unaudited, US dollars in thousands except per share amounts)

 

   

Three months ended February 28,

 
   

2022

   

2021

 

Operating expenses:

               

General and administrative (Note 10)

  $ 5,177     $ 5,329  

Equity loss – Donlin Gold (Note 5)

    4,040       1,968  
      9,217       7,297  
                 

Loss from operations

    (9,217 )     (7,297 )

Interest expense on promissory note

    (1,512 )     (1,434 )

Accretion of notes receivable

    210       854  

Other income (expense), net (Note 11)

    524       (79 )

Loss before income taxes and other items

    (9,995 )     (7,956 )

Income tax expense

           

Net loss

    (9,995 )     (7,956 )
                 

Other comprehensive income (loss):

               

Foreign currency translation adjustments

    178       778  
                 

Comprehensive loss

  $ (9,817 )   $ (7,178 )
                 

Net loss per common share – basic and diluted

  $ (0.03 )   $ (0.02 )
                 

Weighted average shares outstanding

               

Basic and diluted (thousands)

    332,940       331,295  

 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

 

 

 

 

2

 

 

 

NOVAGOLD RESOURCES INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(Unaudited, US dollars in thousands)

 

   

Three months ended February 28,

 
   

2022

   

2021

 

Operating activities:

               

Net loss

  $ (9,995 )   $ (7,956 )

Adjustments:

               

Share-based compensation

    2,091       2,042  

Equity loss – Donlin Gold

    4,040       1,968  

Interest expense on promissory note

    1,512       1,434  

Foreign exchange loss

    112       483  

Accretion of notes receivable

    (210 )     (854 )

Change in fair value of marketable securities

    (500 )     (226 )

Other operating adjustments

          2  

Net change in operating assets and liabilities (Note 13)

    (3,053 )     (1,179 )

Net cash used in operating activities

    (6,003 )     (4,286 )
                 

Investing activities:

               

Proceeds from term deposits

          35,000  

Purchases of term deposits

          (25,000 )

Funding of Donlin Gold

    (5,936 )     (2,946 )

Net cash provided by (used in) investing activities

    (5,936 )     7,054  
                 

Financing activities:

               

Withholding tax on share-based compensation

    (2,122 )     (731 )

Net cash used in financing activities

    (2,122 )     (731 )
                 

Effect of exchange rate changes on cash and cash equivalents

    70       250  

Net change in cash and cash equivalents

    (13,991 )     2,287  

Cash and cash equivalents at beginning of period

    91,124       60,906  

Cash and cash equivalents at end of period

    77,133     $ 63,193  

 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

 

 

3

 

 

 

NOVAGOLD RESOURCES INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF EQUITY

(Unaudited, US dollars and shares in thousands)

 

   

Common shares

   

Contributed

   

Accumulated

           

Total

 
   

Shares

   

Amount

   

surplus

   

deficit

   

AOCL*

   

equity

 
                                                 

November 30, 2020

    330,412     $ 1,972,029     $ 81,203     $ (1,918,629 )   $ (23,876 )   $ 110,727  

Share-based compensation

                2,042                   2,042  

Performance share units (PSUs) settled in shares

    574       1,460       (1,460 )                  

Stock options exercised

    345       777       (777 )                  

Withholding tax on PSUs

                (731 )                 (731 )

Net loss

                      (7,956 )           (7,956 )

Other comprehensive income

                            778       778  

February 28, 2021

    331,331     $ 1,974,266     $ 80,277     $ (1,926,585 )   $ (23,098 )   $ 104,860  
                                                 

November 30, 2021

    332,416     $ 1,978,520     $ 82,216     $ (1,959,165 )   $ (23,289 )   $ 78,282  

Share-based compensation

                2,091                   2,091  

PSUs settled in shares

    430       1,731       (1,731 )                  

Stock options exercised

    144       550       (550 )                  

Withholding tax on PSUs

                (2,122 )                 (2,122 )

Net loss

                      (9,995 )           (9,995 )

Other comprehensive income

                            178       178  

February 28, 2022

    332,990     $ 1,980,801     $ 79,904     $ (1,969,160 )   $ (23,111 )   $ 68,434  

 

* Accumulated other comprehensive loss

 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

 

 

 

 

 

4

 

 

NOVAGOLD RESOURCES INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited, US dollars in thousands except per share amounts)

 

 

NOTE 1 NATURE OF OPERATIONS AND BASIS OF PRESENTATION

 

NOVAGOLD RESOURCES INC. and its affiliates and subsidiaries (collectively, “NOVAGOLD” or the “Company”) operate in the mining industry, focused on the exploration for and development of gold mineral properties. The Company has no realized revenues from its planned principal business purpose. The Company’s principal asset is a 50% interest in the Donlin Gold project in Alaska, USA. The Donlin Gold project is owned and operated by Donlin Gold LLC, a limited liability company that is owned equally by wholly-owned subsidiaries of NOVAGOLD and Barrick Gold Corporation (“Barrick”).

 

The Condensed Consolidated Interim Financial Statements (“interim 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, 2021. 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 United States dollar. References in these Condensed Consolidated Interim Financial Statements and Notes to $ refer to United States dollars and C$ to Canadian dollars. Dollar amounts are in thousands, except for per share amounts.

 

 

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Contingent note receivable

 

A portion of the proceeds related to the sale of Galore Creek to Newmont includes a $75,000 note receivable, contingent upon the approval of a Galore Creek project construction plan by the owner(s). The Company has not assigned a value to the contingent note receivable as management determined that the approval of the Galore Creek project construction was not probable as of the closing of the Galore Creek sale or in subsequent periods. The contingent note will be recognized when, in management’s judgement, it is probable that the payment will occur, and that the amount recorded will not reverse in future periods.

 

Investment in affiliates

 

Investments in unconsolidated ventures over which the Company has the ability to exercise significant influence, but does not control, are accounted for under the equity method and include the Company’s investment in the Donlin Gold project. The Company identified Donlin Gold as a Variable Interest Entity (VIE) as the entity is dependent on funding from its owners. All funding, ownership, voting rights, and power to exercise control is shared equally on a 50/50 basis between the owners of the VIE. Therefore, the Company has determined that it is not the primary beneficiary of the VIE. The Company’s maximum exposure to loss is its equity investment in Donlin Gold.

 

The equity method is a basis of accounting for investments whereby the investment is initially recorded at cost and the carrying value is adjusted thereafter to include the investor’s pro rata share of post-acquisition earnings or losses of the investee, as computed by the consolidation method. Cash funding increases the carrying value of the investment. Profit distributions received or receivable from an investee reduce the carrying value of the investment.

 

Donlin Gold is a non-publicly traded equity investee owning an exploration and development project. Therefore, the Company assesses whether there has been a potential triggering event for other-than-temporary impairment by assessing the underlying assets of the equity investee for recoverability and assessing whether there has been a change in the development plan or strategy for the project. If the underlying assets are not recoverable, the Company will record an impairment charge equal to the difference between the carrying amount of the investee and its fair value.

 

Share-based payments

 

The Company records share-based compensation awards exchanged for employee services at fair value on the date of the grant and expenses the awards in the Consolidated Statements of Loss over the requisite employee service period. The fair values of stock options are determined using a Black-Scholes option pricing model. The fair values of PSUs are determined using a Monte Carlo valuation model. The Company’s estimates may be impacted by certain variables including, but not limited to, stock price volatility, employee stock option exercise behaviors, additional stock option grants, estimates of forfeitures, the Company’s performance, and the Company’s performance in relation to its peers.

 

 

5

 

NOVAGOLD RESOURCES INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited, US dollars in thousands except per share amounts)

 

 

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, USA (Note 5).

 

 

NOTE 4 NOTES RECEIVABLE

 

On July 27, 2018, the Company sold its interest in the Galore Creek project to a subsidiary of Newmont Corporation (“Newmont”) for cash proceeds of $100,000, a $75,000 note receivable due on the earlier of the completion of a Galore Creek pre-feasibility study or July 27, 2021, a $25,000 note receivable due on the earlier of the completion of a Galore Creek feasibility study or July 31, 2023, and a contingent note for $75,000 upon approval of a Galore Creek project construction plan by the owner(s). The Company received $75,000 from Newmont on July 27, 2021.

 

As of February 28, 2022, the carrying value of the $25,000 note receivable was $23,782 including $2,834 of accumulated accretion. The carrying value of the note receivable is being accreted to $25,000 over five years at a discount rate of 3.6% based on quoted market values for Newmont debt with a similar term.

 

A contingent note for $75,000 is receivable upon approval of a Galore Creek project construction plan by the owner(s). No value was assigned to the final $75,000 contingent note receivable. The Company determined that Galore Creek project construction approval was not probable as of the closing of the Galore Creek sale. The Company’s assessment did not change as of February 28, 2022.

 

 

NOTE 5 INVESTMENT IN DONLIN GOLD

 

The Donlin Gold project is owned and operated by Donlin Gold, a limited liability company in which wholly-owned subsidiaries of NOVAGOLD and Barrick each own a 50% interest. Donlin Gold has a board of four representatives, with two representatives selected by Barrick and two representatives selected by the Company. All significant decisions related to the Donlin Gold project requires the approval of at least a majority of the Donlin Gold board.

 

Changes in the Company’s Investment in Donlin Gold are summarized as follows:

 

  

Three months ended February 28,

 
  

2022

  

2021

 

Balance – beginning of period

 $3,576  $2,614 

Share of losses

        

Mineral property expenditures

  (3,944)  (1,901)

Depreciation

  (85)  (67)

Accretion

  (11)   
   (4,040)  (1,968)

Funding

  5,936   2,946 

Balance – end of period

 $5,472  $3,592 

 

 

6

 

NOVAGOLD RESOURCES INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited, US dollars in thousands except per share amounts)

 

The following amounts represent the Company’s 50% share of the assets and liabilities of Donlin Gold LLC. Donlin Gold LLC capitalized the initial contribution of the Donlin Gold property as Non-current assets: Mineral property with a carrying value of $64,000, resulting in a higher carrying value of the mineral property for Donlin Gold LLC than that of the Company.

 

  

As of

February 28,

2022

  

As of

November 30,

2021

 

Current assets: Cash, prepaid expenses, and other receivables

 $6,795  $3,815 

Non-current assets: Right-of-use assets, property and equipment

  1,355   1,417 

Non-current assets: Mineral property

  32,615   32,615 

Current liabilities: Accounts payable, accrued liabilities and lease obligations

  (2,608)  (1,584)

Non-current liabilities: Reclamation and lease obligations

  (685)  (687)

Net assets

 $37,472  $35,576 

 

 

NOTE 6 OTHER ASSETS

 

   

As of

February 28,

2022

   

As of

November 30,

2021

 

Other current assets:

               

Accounts and interest receivable

  $ 351     $ 302  

Prepaid expenses

    959       25  
    $ 1,310     $ 327  

Other long-term assets:

               

Marketable equity securities

  $ 2,345     $ 1,830  

Right-of-use assets

    344       396  

Office equipment

    25       27  
    $ 2,714     $ 2,253  

 

 

NOTE 7 PROMISSORY NOTE

 

The Company has a promissory note payable to Barrick of $117,235, comprised of $51,576 in principal, and $65,659 in accrued interest at U.S. prime plus 2%. The promissory note resulted from the agreement that led to the formation of Donlin Gold, 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. The carrying value of the promissory note approximates fair value.

 

 

NOTE 8 OTHER LIABILITIES

 

  

As of

February 28,

2022

  

As of

November 30,

2021

 

Other current liabilities:

        

Remediation liabilities

 $840  $840 

Lease obligations

  191   224 
  $1,031  $1,064 

Other long-term liabilities:

        

Remediation liabilities

 $280  $280 

Lease obligations

  164   184 
  $444  $464 

 

 

7

 

NOVAGOLD RESOURCES INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited, US dollars in thousands except per share amounts)

 

 

NOTE 9 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 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 — Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3 — Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

 

The Company’s financial instruments consist of cash and cash equivalents, term deposits, accounts receivable, and accounts payable and accrued liabilities. The fair value of the Company’s financial instruments approximates their carrying value due to the short‐term nature of their maturity. The Company’s financial instruments initially measured at fair value and then held at amortized cost include cash and cash equivalents, term deposits, accounts receivable, and accounts payable and accrued liabilities. 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 $2,345 at February 28, 2022 ($1,830 at November 30, 2021), calculated as the quoted market price of the marketable equity security multiplied by the quantity of shares held by the Company.

 

 

NOTE 10 GENERAL AND ADMINISTRATIVE EXPENSE

 

    Three months ended February 28,  
   

2022

   

2021

 

Share-based compensation (Note 12)

  $ 2,091     $ 2,042  

Salaries and benefits

    1,768       1,768  

Office expense

    729       589  

Corporate communications and regulatory

    253       309  

Professional fees

    334       619  

Depreciation

    2       2  
    $ 5,177     $ 5,329  

 

 

NOTE 11 OTHER INCOME (EXPENSE), NET

 

    Three months ended February 28,  
   

2022

   

2021

 

Interest income

    136     $ 178  

Foreign exchange loss

    (112 )     (483 )

Change in fair market value of marketable securities

    500       226  
    $ 524     $ (79 )

 

 

NOTE 12 SHARE-BASED COMPENSATION

 

  Three months ended February 28, 
  

2022

  

2021

 

Stock options

 $1,193  $1,193 

Performance share unit plan

  836   796 

Deferred share unit plan

  62   53 
  $2,091  $2,042 

 

 

8

 

NOVAGOLD RESOURCES INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited, US dollars in thousands except per share amounts)

 

Stock options

 

A summary of stock options outstanding and activity during the three months ended February 28, 2022 are as follows:

 

  

Number of

stock options

(thousands)

  

Weighted- average exercise price

per share

  

Weighted- average

remaining

contractual term

(years)

  

Aggregate

intrinsic

value

 

November 30, 2021

  8,602  $5.43         

Granted

  1,887   6.76         

Exercised

  (365)  4.21         

Cancelled

  (2)  7.59         

February 28, 2022

  10,122  $5.73   2.51  $17,002 
                 

Vested and exercisable as of February 28, 2022

  6,718  $4.75   1.69  $16,471 

 

The following table summarizes other stock option-related information:

 

  Three months ended February 28, 
  

2022

  

2021

 

Weighted-average assumptions used to value stock option awards:

        

Expected volatility

  46.4%  47.3%

Expected term of options (years)

  4   4 

Expected dividend rate

      

Risk-free interest rate

  1.04%  0.3%

Expected forfeiture rate

  2.9%  3.0%

Weighted-average grant-date fair value

 $3.21  $3.66 

Intrinsic value of options exercised

 $1,001  $3,505 

Cash received from options exercised

 $  $ 

 

As of February 28, 2022, the Company had $6,048 of unrecognized compensation cost related to 3,404,000 non-vested stock options expected to be recognized and vest over a period of approximately 2.75 years.

 

Performance share units

 

A summary of PSU awards outstanding and activity during the three months ended February 28, 2022 are as follows:

 

  

Number of

PSU awards

(thousands)

  

Weighted- average

grant day fair value

per award

  

Aggregate

intrinsic

value

 

November 30, 2021

  1,583  $5.94     

Granted

  517   6.75     

Vested

  (745)  3.69     

Performance adjustment

  (56)  3.69     
Cancelled  (1)  7.78     

February 28, 2022

  1,298  $7.65  $3,089 

 

 

As of February 28, 2022, the Company had $6,077 of unrecognized compensation cost related to 1,298,300 non-vested PSU awards expected to be recognized and vest over a period of approximately 2.75 years.

 

 

9

 

NOVAGOLD RESOURCES INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited, US dollars in thousands except per share amounts)

 

The following table summarizes other PSU-related information:

 

  Three months ended February 28, 
  

2022

  

2021

 

Performance multiplier on PSUs vested

  93%  150%

Common shares issued (thousands)

  430   574 

Total fair value of common shares issued

 $2,903  $5,723 

Withholding tax paid on PSUs vested

 $2,122  $731 

 

 

NOTE 13 NET CHANGE IN OPERATING ASSETS AND LIABILITIES

 

  Three months ended February 28, 
  

2022

  

2021

 

Changes in operating assets and liabilities:

        

Other assets

 $(994) $768 

Accounts payable and accrued liabilities

  (151)  (355)

Accrued payroll and related benefits

  (1,908)  (1,592)
  $(3,053) $(1,179)

 

 

 

 

 

 

 

 

 

 

 

10

 

 

 

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

 

In Managements Discussion and Analysis of Financial Condition and Results of Operations, NOVAGOLD, the Company, we, us and our refer to NOVAGOLD RESOURCES INC. and its consolidated subsidiaries. The following discussion and analysis of our financial condition and results of operations constitutes managements review of the factors that affected our financial and operating performance for the three-month periods ended February 28, 2022 and 2021. This discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto contained elsewhere in this report and our Annual Report on Form 10-K for the year ended November 30, 2021, as well as other information we file with the Securities and Exchange Commission on EDGAR at www.sec.gov and with Canadian Securities Administrators on SEDAR at www.sedar.com. References herein to $ refer to United States dollars and C$ to Canadian dollars, in thousands, except for per share amounts.

 

Overview

 

We operate in the gold mining industry, primarily focused on advancing the Donlin Gold project in Alaska. The Donlin Gold project is held by Donlin Gold LLC (“Donlin Gold”), a limited liability company owned equally by wholly-owned subsidiaries of NOVAGOLD and Barrick.

 

Our corporate goals include continuing to advance the Donlin Gold project toward a construction decision; maintaining support for Donlin Gold among the project’s stakeholders; promoting a strong safety, sustainability, and environmental culture; maintaining a favorable reputation of NOVAGOLD; and preserving a healthy balance sheet. Our operations primarily relate to the delivery of project milestones, including the achievement of various technical, environmental, sustainable development, economic and legal objectives, obtaining necessary permits, completion of pre-feasibility and feasibility studies, preparation of engineering designs and the financing to fund these objectives.

 

First quarter highlights

 

COVID-19 response

 

The Company has implemented policies at its offices in Salt Lake City and Vancouver designed to ensure the safety and well-being of all employees and the people associated with them. In that regard, to reduce risk, our employees have been encouraged to get fully vaccinated against COVID-19, have been asked to work remotely, avoid all non-essential business travel, adhere to good hygiene practices, and engage in physical distancing. Continuation of the COVID-19 pandemic in 2022 and beyond could impact employee health, workforce productivity, insurance premiums, ability to travel, the availability of industry experts, personnel and equipment, restrictions or delays to field work, studies, and assay results, and other factors that will depend on future developments that may be beyond our control.

 

At Donlin Gold, with dedicated community partners in Alaska and in the Yukon-Kuskokwim (Y-K) region, who share the objective of protecting the health of Donlin Gold’s employees and contractors, a wide-ranging set of policies have been implemented at the Donlin Gold project site and Anchorage office designed to mitigate the spread of COVID-19.

 

The plan includes:

 

 

testing of all personnel prior to visiting the Donlin Gold project site;

 

testing on the third day after their arrival at camp;

 

additional testing for direct local hires ahead of returning to their villages to reduce the spread of the virus where minimal health services are available;

 

utilizing charters to safely deliver employees to and from camp to minimize in-region travel;

 

screening and physical distancing measures while at camp;

 

more frequent sanitization practices; and

 

increased communication around hygiene and sanitization practices, as well as identification of symptoms.

 

Community engagement

 

To date, Donlin Gold LLC has signed eight Shared Values Statements with villages in the Y-K region (Akiak, Sleetmute, Napaimute, Crooked Creek, Napaskiak, Nikolai, Tuluksak, and Upper Kalskag) that formalize current engagement with key local communities. These agreements with Donlin Gold expand upon the long-term relationships already established with these communities and address specific community needs such as water, sewer, and landfill projects; the ice road that connects remote villages in the Yukon-Kuskokwim (Y-K) region; salmon studies; and suicide prevention programs.

 

 

11

 

As a neighbor to others in the Y-K region and as a team largely made up of people from the area, Donlin Gold strives to aid communities with support and resources, particularly when health and safety are of concern. Donlin Gold is committed to support the needs of its community partners. During the first quarter 2022, Donlin Gold sponsored the Yukon-Kuskokwim Health Corporation Behavioral Health Calricaraq Program, a four-day event with traditional healing and wellness activities; for the tenth year in a row, Donlin Gold worked with the local school districts in the region as part of the national Dictionary Project in an effort to provide a personal dictionary to all third graders with a total of 5,000 dictionaries distributed to date; with support from TKC, provided smoke detectors for stakeholders in the Y-K region; and sponsored the Iron Dog Day, a new community partnership with Alaska Safe Riders, focused on winter safety with youth and families.

 

In partnership with TKC, the Village of Crooked Creek, and Napaimute Tribe, Donlin Gold was again the lead sponsor of a project to construct and maintain the upper portions of an ice road on the Kuskokwim River. Donlin Gold also provided technical data to assist the roadbuilder, including aerial photographs and ice measurements along the river. The road greatly improved safety and access to nearby communities for residents in remote locations. At its completion in February 2022, the Kuskokwim ice road was approximately 270 miles long connecting 17 communities.

 

Permitting

 

The State’s Clean Water Act (CWA) Section 401 certification (the “401 Certification”) of the Federal CWA Section 404 permit was formally appealed to the Commissioner of the Alaska Department of Environmental Conservation (ADEC) in June 2020, and the ADEC Commissioner referred the appeal to an Administrative Law Judge for review. The appeal focused on three narrow issues related to compliance with the State’s water quality standards near the mine site. On April 12, 2021, the Administrative Law Judge issued his opinion for the Commissioner’s consideration recommending the 401 Certification be vacated. The Commissioner issued his decision to uphold the 401 Certification on May 27, 2021. The decision was appealed on June 28, 2021 in Alaska’s Superior Court by Earthjustice on behalf of Orutsrarmiut Native Corporation (ONC). On December 29, 2021, the Court issued an order remanding the 401 Certification to ADEC for consideration of additional technical information provided by Donlin Gold. The appeal was stayed pending the results of the remand. The existing 401 Certification remains in effect during the remand period. Based on the remand schedule established by the Court order, ADEC’s decision is expected in the second quarter of 2022.

 

In April 2020, the Alaska Department of Natural Resources’ (ADNR) Division of Oil and Gas agreed to reconsider its decision on the State Right-of-Way (ROW) agreement and lease authorization for the buried natural gas pipeline. Under the reconsideration, on September 10, 2020, the ADNR issued for additional public comment a revised Consideration of Comments document. This document describes how the ADNR considered public input that was solicited in the ROW review, including how cumulative effects are addressed in the decision. The comment period on the document ended on November 9, 2020. On July 19, 2021, the ADNR Commissioner completed the reconsideration and upheld the ROW agreement and lease authorization. On August 9, 2021, two parties requested that the Commissioner conduct a further reconsideration. The first party was Earthjustice representing ONC, Cook Inletkeeper, and three villages. The second party was an individual who operates an outdoor guiding business around the pipeline route. The Commissioner rejected both further reconsideration requests on August 19, 2021. On September 20, 2021, Earthjustice, representing ONC, Cook Inletkeeper, and three villages, filed an appeal of the State ROW in Alaska Superior Court. An appeal was also filed by the second party in September 2021. The two appeals have been consolidated into a single case that is pending before the Alaska Superior Court based in Anchorage, Alaska. Legal briefings are being prepared by the parties and we anticipate a decision on the appeal in the second half of 2022 or the first half of 2023.

 

In November 2020, the ADNR published an initial public notice for comment on Donlin Gold’s 12 applications for water rights for the mine site and transportation facilities, which closed on December 15, 2020. Water rights are for local surface water sources and groundwater to be used for process water, dust control, fire protection, and potable water. In March 2021, the ADNR held a second two-week public notice period, which closed on March 26, 2021. All the final Water Rights were issued on June 29, 2021 by ADNR’s Division of Mining Land and Water. In July, they were administratively appealed to the ADNR Commissioner by Earthjustice, ONC, and five villages. We expect a decision on the appeal by the Commissioner in the second quarter of 2022.

 

Donlin Gold, working with its Native Corporation partners, continues to support the State of Alaska to advance other permits and certificates needed for the project. Donlin Gold continues to work with Calista, TKC, ADNR, and the U.S. Bureau of Land Management on re-locating easements and public ROWs in the project area. The field work related to the issuance of the Alaska Dam Safety certificates is planned to recommence during second half of 2022 or the first half of 2023. The work was temporarily paused to concentrate on the 2020 and 2021 geological drill programs.

 

Donlin Gold is fortunate to have time-tested partnerships with Calista and TKC, owners of the mineral and surface rights, respectively. The project’s location on private land specially designated for mining activities through the 1971 Alaska Native Claims Settlement Act, is a key attribute that distinguishes it from most other mining assets in Alaska. Our commitment to meaningful tribal consultation throughout project development and permitting has been tested over decades of reliable and dependable engagement with the community.

 

 

12

 

Donlin Gold project

 

Drilling is underway for 2022 and is designed for approximately 34,000 meters of tight spaced grid drilling in structural domains and in-pit and below-pit drilling in undrilled areas of the open pit. The newly obtained data from the 2021 drill program will be incorporated into the geologic and resource model followed by updated mining schedules and life of mine business plans prior to shifting to an updated feasibility study, subject to a formal decision by the Donlin Gold LLC board.

 

Ultimately, the 2021 and 2022 information should assist in determining the next steps to update the Donlin Gold feasibility study and initiate the engineering work necessary to advance the project design before reaching a construction decision. The owners will advance the Donlin Gold project in a financially disciplined manner with a strong focus on engineering excellence, environmental stewardship, a strong safety culture and continued community engagement.

 

Our share of funding for the Donlin Gold project in the first quarter of 2022 was $5,936. In 2022, we continue to expect our share of Donlin Gold LLC funding to be $30,000, including $21,000 for follow-up drilling, camp improvements and studies, and $9,000 for permitting, community engagement and administration.

 

The Donlin Gold LLC board must approve a construction program and budget before the Donlin Gold project can be developed. The timing of the required engineering work and the Donlin Gold LLC board’s approval of a construction program and budget, the receipt of all required governmental permits and approvals, and the availability of financing, commodity price fluctuations, risks related to market events and general economic conditions among other factors, will affect the timing of and whether to develop the Donlin Gold project. Among other reasons, project delays could occur as a result of public opposition, litigation challenging permit decisions, requests for additional information or analysis, limitations in agency staff resources during regulatory review and permitting, project changes made by Donlin Gold LLC, or any impact on operations from COVID-19.

 

We record our interest in the Donlin Gold project as an equity investment, which results in our 50% share of Donlin Gold’s expenses being recorded in the income statement as an operating loss. The investment amount recorded on the balance sheet primarily represents unused funds advanced to Donlin Gold.

 

Consolidated Financial Results

 

   

Three months ended

February 28,

         
   

2022

   

2021

   

Change

 

Net loss

  $ (9,995 )   $ (7,956 )   $ (2,039 )

Net loss per common share, basic and diluted

  $ (0.03 )   $ (0.02 )   $ (0.01 )

 

Net loss increased by $2,039 from 2021 to 2022, primarily due to the earlier commencement of the Donlin Gold drilling program in 2022, and reduced accretion income due to the maturity of the $75,000 Newmont note in July 2021, partially offset by lower legal expenses, an increase in the value of marketable securities, and favorable foreign exchange movements.

 

Liquidity and Capital Resources

 

Liquidity overview

 

At present, we believe we have sufficient working capital available to cover anticipated funding of the Donlin Gold project and corporate general and administrative costs until a decision to commence engineering and construction is reached by the Donlin Gold board for the Donlin Gold project, at which point substantial additional capital will be required. Future financings to fund construction are anticipated through debt, equity, project specific debt, and/or other means. Our continued operations are dependent on our ability to obtain additional financing or to generate future cash flows. However, there can be no assurance that we will be successful in our efforts to raise additional capital on terms favorable to us, or at all. For further information, see our Annual Report on Form 10-K for the year ended November 30, 2021, as filed with the SEC and the Canadian Securities Regulators on January 26, 2022, section Item 1A, Risk Factors Our ability to continue the exploration, permitting, development, and construction of the Donlin Gold project, and to continue as a going concern, will depend in part on our ability to obtain suitable financing.

 

 

13

 

Our anticipated expenditures in fiscal year 2022 are approximately $46,000, including $30,000 to fund the Donlin Gold project, $13,000 for corporate general and administrative costs, $2,000 for withholding taxes on share-based compensation and $1,000 for working capital and other items.

 

Our financial position includes the following as of February 28, 2022:

 

 

Cash and cash equivalents of $77,133.

 

 

Term deposits of $78,000 denominated in U.S. dollars and held at Canadian chartered banks with high investment-grade ratings and maturities of one year or less.

 

 

Notes receivable of $25,000 due on the earlier of the completion of a Galore Creek feasibility study or July 27, 2023, and a note for $75,000 fully contingent upon approval of a Galore Creek project construction plan by the owner(s).

 

 

Promissory note payable to Barrick of $117,235, including accrued interest at U.S. prime plus 2%. The promissory note and accrued interest are payable from 85% of the Company’s share of revenue from future Donlin Gold project production or from any net proceeds resulting from a reduction of the Company’s interest in Donlin Gold.

 

Cash flows

 

In the first quarter of 2022 cash and cash equivalents decreased by $13,991, primarily to fund our share of Donlin Gold, for corporate administrative expenses, and for withholding taxes on share-based payments. The increase in cash used in the first quarter of 2022 compared to 2021 was due to the earlier commencement of the Donlin Gold drilling program in 2022, the timing of corporate liability insurance payments, increased withholding tax on share-based compensation in 2022 (no cash was used for CEO and CFO withholdings in 2021), and no proceeds received from term deposits in 2022 compared to $10,000 received in 2021.

 

Outstanding share data

 

As of March 29, 2022, the Company had 333,192,571 common shares issued and outstanding. Also, as of March 29, 2022, the Company had: i) a total of 9,672,751 stock options outstanding; 8,433,052 with a weighted-average exercise price of $5.78 and the remaining 1,239,699 of those stock options with a weighted-average exercise price of C$7.50; and ii) 1,293,200 PSUs and 323,939 deferred share units outstanding. Upon exercise or pay out, as applicable, of the foregoing convertible securities, the Company would be required to issue a maximum of 11,936,490 common shares.

 

 

 

 

 

 

 

 

 

14

 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

Our financial instruments are exposed to certain financial risks, including credit and interest rate risks.

 

Credit risk

 

Concentration of credit risk exists with respect to our cash and cash equivalents, term deposit investments and notes receivable. All term deposits are held through Canadian chartered banks with high investment-grade ratings and have maturities of one year or less. The notes are receivable from a subsidiary of Newmont, a publicly traded company with investment-grade credit ratings. The notes are guaranteed by Newmont.

 

Interest rate risk

 

The interest rate on the promissory note owed to Barrick is variable with the U.S. prime rate. Based on the amount owing on the promissory note as of February 28, 2022, and assuming all other variables remain constant, a 1% change in the U.S. prime rate would result in an increase/decrease of approximately $1.2 million in the interest accrued on the promissory note per annum.

 

Item 4. Controls and Procedures

 

Management, with the participation of our President and Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of February 28, 2022. On the basis of this review, our President and Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our President and Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

There have not been any changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated by the SEC under the Exchange Act) during the Company’s most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company’s internal controls over financial reporting are based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

 

 

 

 

 

15

 

PART II     - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

From time to time, we are a party to routine litigation and proceedings that are considered part of the ordinary course of our business. We are not aware of any material current, pending, or threatened litigation.

 

Item 1A. Risk Factors

 

There have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended November 30, 2021, as filed with the SEC on January 26, 2022. The risk factors in our Annual Report on Form 10-K for the year ended November 30, 2021, in addition to the other information set forth in this quarterly report, could materially affect our business, financial condition or results of operations. Additional risks and uncertainties not currently known to us or that we deem to be immaterial could also materially adversely affect our business, financial condition or results of operations.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

These disclosures are not applicable to us.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits

 

See Exhibit Index.

 

 

 

 

16

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: April 5, 2022

NOVAGOLD RESOURCES INC.

 
       
 

By:

/s/ Gregory A. Lang

 
   

Gregory A. Lang

 
   

President and Chief Executive Officer

 
    (principal executive officer)  

 

 

By:

/s/ David A. Ottewell

 
   

David A. Ottewell

 
   

Vice President and Chief Financial Officer

 
    (principal financial and accounting officer)  

 

 

 

 

 

 

 

17

 

EXHIBIT INDEX

 

Exhibit No.

 

Description

     

31.1

 

Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a)

31.2

 

Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)

32.1

 

Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350

32.2

 

Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350

101

 

The following materials are filed herewith: (i) Inline XBRL Instance, (ii) Inline XBRL Taxonomy Extension Schema, (iii) Inline XBRL Taxonomy Extension Calculation, (iv) XBRL Taxonomy Extension Labels, (v) XBRL Taxonomy Extension Presentation, and (vi) Inline XBRL Taxonomy Extension Definition.

104

 

Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
18


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