NG — Q3 2026 Financial Report Analysis

Overview

NovaGold has no revenue. Its main asset is a 60% stake in Donlin Gold, a large undeveloped gold deposit in southwest Alaska that is permitted at the federal level but not yet built. That makes it a bet on whether the mine gets financed and built. Each quarter is about three things: how much cash goes into studying and permitting the project, how much is left in the bank, and whether the milestones arrive on time.

In fiscal Q3 2026 (the three months ended August 31, 2026; NovaGold's fiscal year ends November 30), the net loss more than doubled to $36.0 million, or $0.08 per share, from $15.6 million ($0.04) a year earlier. Two things drove it. Spending at Donlin rose sharply as the bankable feasibility study ramped up. NovaGold's own overhead also nearly doubled because of legal fees for a deal announced on July 21, 2026, under which a new Delaware company, NovaGold Corporation, would own 100% of Donlin Gold by absorbing Paulson's 40% stake. The company held $343.4 million in cash and term deposits at quarter-end, which management says is enough to finish the feasibility study, pay off the Barrick promissory note early, and cover overhead for at least 12 months.

At a glance

• $24.8 million went into Donlin Gold this quarter, three times the $8.1 million a year ago. A feasibility-study team led by Fluor is now working at full pace, and that is where most of the money goes.
• $343.4 million in cash and term deposits, up from $115.1 million at fiscal year-end (November 30, 2025). The jump comes from a February 2026 private placement that raised $310.2 million gross at $10.00 per share, not from operations.
• Fiscal 2026 spending guidance was raised by $11.5 million to about $110.0 million. All of the increase is corporate legal and advisory fees for the pending Paulson deal. Donlin funding guidance is unchanged at $78.8 million.

Key metrics

NovaGold reports no revenue, so revenue, revenue growth and operating margin don't apply. The useful measures are the loss, the cash going into the project, and the cash on hand. Figures are in US dollars.

Year to date (nine months), the net loss was $77.0 million ($0.18 per share), compared with $79.0 million ($0.22) a year earlier. The near-flat comparison is misleading, as the section below explains.

Takeaway: The loss doubled, but the important figure is the cash going into Donlin, which tripled to $24.8 million a quarter. That is the feasibility study finally moving at full pace after years of slow spending. NovaGold has raised enough to finish the study and retire the Barrick note. What it doesn't have yet is any plan for paying to build the mine. If the Paulson deal closes, NovaGold will be paying 100% of Donlin's costs instead of 60%.

What drove the quarter

Donlin Gold spending. NovaGold doesn't consolidate Donlin. It records 60% of Donlin's expenses as one line, "equity loss." That line rose by $16.5 million to $24.0 million. Management attributes the rise to "ongoing 2026 activities by Fluor, WSP, Worley and Hatch to advance Donlin Gold's BFS." The bankable feasibility study (BFS) is the detailed engineering and cost study that lenders require before they finance construction. Almost all of the equity loss was mineral-property spending ($23.8 million). Depreciation and accretion were minor. Donlin's staff grew from about 35 to 77 employees since the start of 2026. This season's geotechnical drilling is due to finish this fall, and engineering firms are working toward a "Class 3" cost estimate, the level of accuracy a BFS normally carries.

Corporate overhead. G&A rose $5.8 million to $12.0 million. Professional fees accounted for $5.3 million of that increase, rising from $1.0 million to $6.3 million. The filing attributes this "primarily" to "legal fees in support of the pending Transactions." Salaries actually fell slightly, from $2.0 million to $1.9 million. Excluding deal fees, the underlying corporate cost base is roughly flat.

Interest. Interest earned on the larger cash pile ($3.8 million) now about equals the interest accruing on the Barrick promissory note ($3.9 million). A year ago, interest income covered only about a third of it.

The Paulson deal: what it changes

Under the July 21, 2026 agreements, each NovaGold share would be exchanged one-for-one into a share of a new Delaware company, NovaGold Corporation. Paulson would contribute its 40% of Donlin in exchange for new shares, priced at a 10% discount to the value implied by NovaGold's 10-day average share price as of July 21. According to the filing:

• Current NovaGold shareholders, including Paulson's existing NovaGold shares, would own about 65% of the new company on a fully diluted basis. Paulson would receive about 35% for its Donlin stake.
• After closing, Paulson would hold about 40% of the economic interest, with its voting interest capped at 19.99%.
• The new company would own 100% of Donlin. Today, governance is split 50/50 even though NovaGold funds 60%: NovaGold's voting share is set at its 60% ownership minus 10 points.
• Closing is expected in the fourth calendar quarter of 2026. It still needs shareholder, court, regulatory and stock-exchange approvals. NovaGold has received demand letters from purported shareholders claiming that the preliminary proxy left out material information. The company says the claims are without merit.

For a shareholder, this exchanges dilution for control. Your share of Donlin moves from an indirect 60% of a 50/50-governed joint venture to about 65% of a company that owns all of it and controls it outright. That ends the joint-venture deadlock risk before the expensive construction decision is made.

What the headline numbers hide

• Operating cash flow understates how much cash is going out. Reported operating cash outflow was only $3.3 million this quarter against a $36.0 million net loss. The money sent to Donlin ($24.8 million) is recorded under investing activities, not operating, and the equity loss itself is a non-cash charge. The actual cash leaving the company was about $28.1 million this quarter and $71.6 million over nine months ($14.9 million operating plus $56.7 million Donlin funding), compared with $26.5 million a year ago.
• The year-to-date "improvement" comes from a one-off charge last year. The nine-month loss fell slightly ($77.0 million vs $79.0 million), but only because fiscal 2025 included a $39.6 million non-cash charge for 25.5 million warrants issued to investors who backstopped the purchase of Barrick's stake. Excluding that charge, last year's nine-month loss was about $39.4 million, so this year's loss is nearly double the underlying prior-year figure.
• Per-share loss growth is partly diluted away. The weighted share count rose 7.9% year over year because of the February 2026 placement (31.0 million shares at $10.00) and the mid-2025 offerings. Another 37.4 million shares could be issued from outstanding warrants (24.7 million at $3.00), options, PSUs and DSUs. The Paulson deal would issue a much larger block on top of that.
• The Barrick note is a $177.5 million liability that can be paid off for $100 million. It accrues interest at US prime plus 2%. NovaGold has until December 3, 2026 to pay it off in full for $100 million and says it intends to do so in the fourth quarter. That uses about $100 million of the $343.4 million cash and removes a liability recorded at $177.5 million. Our inference: the $77.5 million difference will likely show up as a gain in a later quarter. The filing does not describe the accounting.
• The deal fees aren't finished. The $11.5 million guidance increase covers fees through the fourth quarter only. Management says professional fees will stay elevated "into the early part of fiscal 2027" and that the raised guidance "does not reflect anticipated fiscal 2027 professional fees and closing costs."
• A large accounting gain is expected, and it won't be cash. After closing, the new company expects to book a "non-cash, non-recurring gain on revaluation of Donlin Gold to fair market value." That will make reported earnings look strong in the closing quarter, but no cash comes in.
• Funding runway. Our rough estimate, using the company's own figures: $343.4 million, less the ~$100 million note payoff, less ~$30 million of remaining fiscal 2026 guided spending ($110 million guidance minus about $80 million spent through nine months, excluding share-based pay), leaves roughly $210 million entering fiscal 2027, before the deal closes and before any new capital. If NovaGold funds 100% of Donlin instead of 60%, its project bill rises by about two-thirds at the same activity level. At this quarter's pace, that is about $41 million a quarter for Donlin alone, plus overhead. Management says the company remains "fully funded to complete the Donlin Gold BFS" even if the deal closes. It also says it "expects to raise additional capital at some point" for detailed engineering.

Permits and project milestones

• Federal permits: A federal court left Donlin's permits in place but sent one narrow issue back to the agencies: how they analyzed a larger potential release from the tailings storage facility, the dam that holds mine waste. The draft Supplemental Environmental Impact Statement was published September 23, 2026, public hearings run through October 2026, and the final version is expected in April 2027.
• State water certification: The Alaska Supreme Court heard oral argument on June 3, 2026 in Earthjustice's appeal of the state's Clean Water Act Section 401 certification. That is the last remaining state-court challenge. No decision has been issued yet.
• Dam safety: Detailed design packages for the project's seven dams are expected by end of 2026 or early 2027. Certificates are expected in 2028.
• Feasibility study: On schedule for completion in 2027.
• Financing advisors: Donlin appointed Endeavour Financial and Macquarie Capital to arrange project and infrastructure financing. The options include government agency or sovereign wealth fund support. This is the first concrete step toward funding construction.

Outlook

Management's fiscal 2026 guidance is about $110.0 million total: $78.8 million for NovaGold's 60% share of Donlin and about $31.2 million of corporate G&A excluding share-based pay. Part of the November Donlin funding will prepay December, which is the first month of Donlin's fiscal 2027.

Our view: the cash position is no longer the near-term risk. The risks now are the steps between here and a construction decision, in order:

1. The Paulson deal closes as planned in the fourth calendar quarter of 2026.
2. The $100 million Barrick note payoff happens by December 3.
3. The Alaska Supreme Court rules on the 401 certification.
4. The final SEIS arrives around April 2027.
5. The BFS reports a capital cost that the financing advisors can actually fund.

Watch the BFS capital-cost number most closely. The filing's new risk factor flags energy prices and inflation, citing disruptions to shipping through the Strait of Hormuz. A remote Alaska mine needs a natural gas pipeline and large amounts of fuel, so it is exposed to both. Until that number exists, any estimate of how much new equity NovaGold will need to build the mine is a guess. Note that the share count is already set to rise substantially when the deal closes.