British Columbia
|
N/A
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
(I.R.S. Employer
Identification No.)
|
789 West Pender Street, Suite 720
Vancouver, British Columbia
Canada |
V6C 1H2
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
(604) 669-6227
(Registrant’s Telephone Number, Including Area Code)
|
|
Large accelerated filer ý
|
Accelerated filer ☐
|
Non-accelerated filer ☐
(Do not check if a smaller reporting company) |
Smaller reporting company ☐
|
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
|
10
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
10
|
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
|
·
|
our ability to achieve production at any of our mineral exploration and development properties;
|
·
|
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 resource and 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;
|
·
|
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 exploration and development of mineral properties; and
|
·
|
that our activities will not be adversely disrupted or impeded by development, operating or regulatory risks.
|
·
|
uncertainty of whether there will ever be production at our mineral exploration and development properties;
|
·
|
uncertainty of estimates of capital costs, operating costs, production and economic returns;
|
·
|
uncertainties relating to the assumptions underlying our resource and reserve estimates, such as metal pricing, metallurgy, mineability, marketability and operating and capital costs;
|
·
|
risks related to our ability to commence production and generate material revenues or obtain adequate financing for our planned exploration and development activities;
|
·
|
risks related to our ability to finance the development of our mineral properties through external financing, strategic alliances, the sale of property interests or otherwise;
|
·
|
risks related to the third parties on which we depend for our exploration and development activities;
|
·
|
dependence on cooperation of joint venture partners in exploration and development of properties;
|
·
|
credit, liquidity, interest rate and currency risks;
|
·
|
risks related to market events and general economic conditions;
|
·
|
uncertainty related to inferred mineral resources;
|
·
|
risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of our mineral deposits;
|
·
|
risks related to lack of infrastructure required to develop, construct, and operate our mineral properties;
|
·
|
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;
|
·
|
the risk that permits and governmental approvals necessary to develop and operate mines on our properties will not be available on a timely basis, subject to reasonable conditions, or at all;
|
·
|
commodity price fluctuations;
|
·
|
risks related to governmental regulation and permits, including environmental regulation;
|
·
|
risks related to the need for reclamation activities on our properties and uncertainty of cost estimates related thereto;
|
·
|
uncertainty related to title to our mineral properties;
|
·
|
uncertainty related to unsettled aboriginal rights and title in British Columbia;
|
·
|
our history of losses and expectation of future losses;
|
·
|
uncertainty as to the outcome of potential litigation;
|
·
|
risks related to our largest shareholder;
|
·
|
risks related to increases in demand for equipment, skilled labor and services needed for exploration and development of mineral properties, and related cost increases;
|
·
|
competition in the mining industry;
|
·
|
our need to attract and retain qualified management and technical personnel;
|
·
|
risks related to our current practice of not using hedging arrangements;
|
·
|
risks related to conflicts of interests of some of the directors of the Company;
|
·
|
risks related to global climate change;
|
·
|
risks related to opposition to our operations at our mineral exploration and development properties from non-governmental organizations or civil society; and
|
·
|
increased regulatory compliance costs relating to the Dodd-Frank Act.
|
Item 1.
|
Financial Statements
|
NOVAGOLD RESOURCES INC.
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||
(Unaudited, US dollars in thousands)
|
||||||||
At
August 31,
2016
|
At
November 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
|
||||
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 October 4, 2016. They are signed on the Company’s behalf by:
|
/s/ Gregory A. Lang, Director
|
/s/ Anthony P. Walsh, Director
|
|
|
|
|
NOVAGOLD RESOURCES INC.
|
||||||||||||||||
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE GAIN (LOSS)
|
||||||||||||||||
(Unaudited, US dollars in thousands except per share amounts)
|
||||||||||||||||
Three months ended
August 31,
|
Nine months ended
August 31,
|
|||||||||||||||
2016
|
2015
|
2016
|
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
|
—
|
52
|
—
|
353
|
||||||||||||
Depreciation
|
8
|
8
|
25
|
26
|
||||||||||||
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 10)
|
—
|
—
|
—
|
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
|
)
|
|||||||||
(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
|
||||||||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
|
NOVAGOLD RESOURCES INC.
|
||||||||||||||||
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
|
||||||||||||||||
(Unaudited, US dollars in thousands)
|
||||||||||||||||
Three months ended
August 31,
|
Nine months ended
August 31,
|
|||||||||||||||
2016
|
2015
|
2016
|
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
|
—
|
—
|
—
|
426
|
||||||||||||
Other
|
14
|
(27
|
)
|
79
|
638
|
|||||||||||
Withholding tax on share-based compensation
|
—
|
—
|
(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
|
—
|
—
|
—
|
(15,829
|
)
|
|||||||||||
Net cash used in financing activities
|
—
|
—
|
—
|
(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
|
NOVAGOLD RESOURCES INC.
|
||||||||||||||||||||||||
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF EQUITY
|
||||||||||||||||||||||||
(Unaudited, US dollars and shares in thousands)
|
||||||||||||||||||||||||
Common shares
|
Contributed
|
Accumulated
|
Accumulated other comprehensive
|
Total
|
||||||||||||||||||||
Shares
|
Amount
|
surplus
|
deficit
|
income (loss)
|
equity
|
|||||||||||||||||||
November 30, 2014
|
317,288
|
$
|
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
|
622
|
1,926
|
6,736
|
—
|
—
|
8,662
|
||||||||||||||||||
November 30, 2015
|
317,910
|
$
|
1,938,262
|
$
|
80,774
|
$
|
(1,672,055
|
)
|
$
|
(17,685
|
)
|
$
|
329,296
|
|||||||||||
Net loss
|
—
|
—
|
—
|
(26,496
|
)
|
—
|
(26,496
|
)
|
||||||||||||||||
Other comprehensive income
|
—
|
—
|
—
|
—
|
6,189
|
6,189
|
||||||||||||||||||
Share-based compensation and related share issuances
|
2,106
|
4,189
|
(18
|
)
|
—
|
—
|
4,171
|
|||||||||||||||||
August 31, 2016
|
320,016
|
$
|
1,942,451
|
$
|
80,756
|
$
|
(1,698,551
|
)
|
$
|
(11,496
|
)
|
$
|
313,160
|
NOVAGOLD RESOURCES INC.
|
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
(Unaudited, US dollars in thousands except per share amounts)
|
NOVAGOLD RESOURCES INC.
|
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
(Unaudited, US dollars in thousands except per share amounts)
|
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
|
NOVAGOLD RESOURCES INC.
|
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
(Unaudited, US dollars in thousands except per share amounts)
|
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
|
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
|
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
|
NOVAGOLD RESOURCES INC.
|
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
(Unaudited, US dollars in thousands except per share amounts)
|
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
|
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
|
NOVAGOLD RESOURCES INC.
|
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|
(Unaudited, US dollars in thousands except per share amounts)
|
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
|
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
|
)
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
·
|
Advance the Donlin Gold project toward a construction decision.
|
·
|
Advance Galore Creek mine planning and project design.
|
·
|
Evaluate opportunities to monetize the value of Galore Creek.
|
·
|
Maintain a healthy balance sheet.
|
·
|
Maintain an effective corporate social responsibility program.
|
·
|
Outline of the purpose and need for the development of the proposed mine and the benefit it would bring to the stakeholders of Donlin Gold’s Alaska Native Corporation partners, Calista Corporation and The Kuskokwim Corporation (TKC).
|
·
|
Identify and analyze a reasonable range of alternatives to the mine development proposed by Donlin Gold which comprise variations on certain mine site facility designs, as well as local transportation and power supply options.
|
·
|
Prepare an environmental analysis of the proposed action and reasonable alternatives (including a no action alternative), which identifies and characterizes the potential physical, biological, social, and cultural impacts relative to the existing baseline conditions. This portion constitutes the most extensive part of the EIS.
|
·
|
Describe potential mitigation measures intended to reduce or eliminate the environmental impacts described in the impact analysis section.
|
·
|
working with the State to advance the review of Donlin Gold’s air quality permit application and preparation of the air quality permit, targeted for issuance in 2017;
|
·
|
advancing the water discharge permit application and working with the State to advance the review of the integrated waste management permit application and reclamation plan;
|
·
|
the Corps provided opportunities for public comment on Donlin Gold’s Public Notice CWA Section 404 (wetland)/10 (rivers and harbors) permit application as part of the draft EIS comment period which closed on May 31, 2016;
|
·
|
Donlin Gold continues to work with State and Federal agencies to advance issuance of all other required permits, including dam safety approvals, pipeline authorizations, water use permits, fish habitat permits, as well as land and shoreline lease and right-of-way approvals.
|
Three months ended August 31,
|
Nine months ended August 31,
|
|||||||||||||||
($ thousands, except per share)
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Loss from operations
|
$
|
(6,422
|
)
|
$
|
(6,579
|
)
|
$
|
(23,343
|
)
|
$
|
(25,111
|
)
|
||||
Net loss
|
$
|
(7,381
|
)
|
$
|
(6,301
|
)
|
$
|
(26,496
|
)
|
$
|
(24,784
|
)
|
||||
Net loss per common share
|
||||||||||||||||
Basic and diluted
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
$
|
(0.08
|
)
|
$
|
(0.08
|
)
|
Three months ended August 31,
|
Nine months ended August 31,
|
|||||||||||||||
($ thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Cash used in operations
|
$
|
(535
|
)
|
$
|
(1,755
|
)
|
$
|
(10,419
|
)
|
$
|
(9,913
|
)
|
||||
Cash used to fund Donlin Gold and Galore Creek
|
$
|
(2,742
|
)
|
$
|
(2,757
|
)
|
$
|
(7,935
|
)
|
$
|
(9,219
|
)
|
||||
Net cash provided from term deposits
|
$
|
—
|
$
|
—
|
$
|
5,000
|
$
|
10,000
|
||||||||
Cash used in financing activities
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
(15,829
|
)
|
|||||||
At
|
At
|
|||||||||||||||
($ thousands)
|
August 31,
2016
|
November 30,
2015
|
Change
|
|||||||||||||
Cash and cash equivalents
|
$
|
28,455
|
$
|
41,731
|
$
|
(13,276
|
)
|
|||||||||
Term deposits
|
$
|
80,000
|
$
|
85,000
|
$
|
(5,000
|
)
|
·
|
Cash used in operations increased from $9.9 million in 2015, to $10.4 million in 2016, primarily due to higher withholding taxes paid on performance share units vested in the first quarter of 2016, partially offset by the receipt of exploration tax credits.
|
·
|
Cash used to fund Donlin Gold and Galore Creek decreased by $1.3 million in 2016 due to the timing of Donlin Gold funding requirements for permitting.
|
·
|
Cash provided from term deposits was $5.0 million in 2016 and $10.0 million in 2015.
|
·
|
Cash used in financing activities in 2015 included $15.8 million to repay the remaining convertible notes.
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information.
|
Item 6.
|
Exhibits
|
|
|
|
Date: October 4, 2016
|
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)
|
||
Exhibit No.
|
|
Description
|
|
|
|
|
Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a)
|
|
|
Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)
|
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350
|
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350
|
|
101
|
The following materials are filed herewith: (i) XBRL Instance, (ii) XBRL Taxonomy Extension Schema, (iii) XBRL Taxonomy Extension Calculation, (iv) XBRL Taxonomy Extension Labels, (v) XBRL Taxonomy Extension Presentation, and (vi) XBRL Taxonomy Extension Definition. In accordance with Rule 406T of Regulation S-T, the information in these exhibits is furnished and deemed not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Exchange Act of 1934, and otherwise is not subject to liability under these sections and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by the specific reference in such filing.
|
1. | I have reviewed this Quarterly Report on Form 10-Q of NOVAGOLD Resources Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
1. | I have reviewed this Quarterly Report on Form 10-Q of NOVAGOLD Resources Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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 | 0001173420 | |
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 | 2016 |
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 |
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 Companys 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 NOVAGOLDs 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 Companys Canadian operations is the Canadian dollar and the functional currency for the Companys 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 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 Companys 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 Companys 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. CompensationStock 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 Companys 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 Companys 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 entitys 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 Companys 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 |
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 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 Companys 50% investment in Donlin Gold LLC are summarized as follows:
The following amounts represent the Companys 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.
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NOTE 5. INVESTMENT IN GALORE CREEK |
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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 Companys investment in GCP are summarized as follows:
The following amounts represent the Companys 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 Companys investment at fair value in June 2011, the carrying value of the Companys 50% interest is higher than 50% of the book value of GCP. Therefore, the Companys investment does not equal 50% of the net assets recorded by GCP:
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NOTE 6. PROMISSORY NOTE |
9 Months Ended |
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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 Companys share of revenue from future mine production or from any net proceeds resulting from a reduction of the Companys interest in Donlin Gold LLC. The carrying value of the promissory note approximates fair value. |
NOTE 7. FAIR VALUE ACCOUNTING |
9 Months Ended |
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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 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 Companys 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 ADMINISTRATIVE EXPENSES |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 8. GENERAL AND ADMINISTRATIVE EXPENSES |
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NOTE 9. SHARE-BASED COMPENSATION |
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Aug. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 9. SHARE-BASED COMPENSATION |
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) |
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Note 10. Other Income Expense | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 10. OTHER INCOME (EXPENSE) |
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 ASSETS AND LIABILITIES |
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Increase (Decrease) in Operating Capital [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 11. CHANGE IN OPERATING ASSETS AND LIABILITIES |
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NOTE 12. RELATED PARTY TRANSACTIONS |
9 Months Ended |
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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 CONTINGENCIES |
9 Months Ended |
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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 SIGNIFICANT ACCOUNTING POLICIES (Policies) |
9 Months Ended |
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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 Companys 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 Companys 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. CompensationStock 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 Companys 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 Companys 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 entitys 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 Companys 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 GOLD (Tables) - Donlin Gold LLC Alaska USA |
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Changes in the Company's investment |
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Net assets |
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NOTE 5. INVESTMENT IN GALORE CREEK (Tables) - The Galore Creek Partnership, British Columbia, Canada |
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Changes in the Company's investment |
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Net assets |
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NOTE 8. GENERAL AND ADMINISTRATIVE EXPENSES (Tables) |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of general and administrative expenses |
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NOTE 9. SHARE-BASED COMPENSATION (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share based compensation |
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NOTE 10. OTHER INCOME (EXPENSE) (Tables) |
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Supplemental Cash Flow Elements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of other income (expense) |
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NOTE 11. CHANGE IN OPERATING ASSETS AND LIABILITIES (Tables) |
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Note 11. Change In Operating Assets And Liabilities Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CHANGE IN OPERATING ASSETS AND LIABILITIES |
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NOTE 4. INVESTMENT IN DONLIN GOLD (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Aug. 31, 2016 |
Aug. 31, 2015 |
Aug. 31, 2016 |
Aug. 31, 2015 |
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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 GOLD (Details 1) - Donlin Gold LLC, Alaska, USA - USD ($) $ in Thousands |
Aug. 31, 2016 |
Nov. 30, 2015 |
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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 CREEK (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Aug. 31, 2016 |
Aug. 31, 2015 |
Aug. 31, 2016 |
Aug. 31, 2015 |
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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 CREEK (Details 1) - The Galore Creek Partnership, British Columbia, Canada - USD ($) $ in Thousands |
Aug. 31, 2016 |
Nov. 30, 2015 |
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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 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 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 (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 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 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 CONTINGENCIES (Details Narrative) $ in Thousands |
Aug. 31, 2016
USD ($)
|
---|---|
Note 13. Commitments And Contingencies Details Narrative | |
2016 | $ 93 |
2017 | 325 |
2018 | 18 |
Total | $ 436 |
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