NOTE 8. DERIVATIVE LIABILITIES

12 Months Ended

Nov. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

NOTE 8. DERIVATIVE LIABILITIES

	At November 30,
	2013		2012
Convertible notes – Embedded derivative	$	83	$	17,934
Warrants – Derivative		—		15,276
		83		33,210
Less: current portion		—		(33,210	)
	$	83	$	—

Convertible notes – Embedded derivative

The conversion price of the Notes is denominated in U.S. dollars, a currency different from the functional currency of the Company. Therefore, an embedded derivative liability is recorded at fair value and re-measured each period with the movement being recorded as a gain or loss in Net income (loss).  The fair value of the embedded derivative is composed of the conversion feature of the Note and the put option. The Company had assessed the embedded derivative within the Note to be the difference between the fair value of the Note and the discounted value of the cash flows resulting from the potential exercise of the put option. The derivative was accounted for in this manner until the May 1, 2013 put option expired as described above. Subsequent to this date, the measurement of the embedded derivative is based solely on the conversion feature.

	Years ended November 30,
	2013			2012			2011
Balance – beginning of period	$	17,934		$	57,493		$	88,138
Gain on embedded derivative liability for the period		(3,817	)		(39,559	)		(30,645	)
Repurchases of Notes		(14,034	)		—			—
Balance – end of period	$	83		$	17,934		$	57,493

Warrants – Derivative

The Company’s functional currency is the Canadian dollar and it had issued and outstanding warrants with an exercise price denominated in U.S. dollars. The Company determined that such warrants with an exercise price denominated in a currency that is different from the entity’s functional currency were classified as a derivative liability based on the evaluation of the warrant’s settlement provisions, and carried at their fair value. Any changes in the fair value from period to period have been recorded as a gain or loss in net income (loss).

In January 2011, an agreement was entered into between the Company and the holder of 37.1 million warrants to amend the currency that the exercise price was denominated in from U.S. dollars to Canadian dollars. The exercise price was amended from $1.50 to C$1.479 at the prevailing spot rate on the date of the agreement. The expiry date remained unchanged at January 21, 2013. The conversion of the exercise price of these warrants to U.S. dollars permanently crystallized the fair value of these warrants, for purposes of determining future transfers to share capital upon exercise of these warrants. The terms of the remaining 5.1 million warrants were unchanged.

In the first quarter of 2013, all of NOVAGOLD’s remaining warrants were exercised and the Company realized a loss on derivative liability of $2,461 for the year ended November 30, 2013.

	Years ended November 30,
	2013			2012			2011
Balance – beginning of period	$	15,276		$	51,963		$	641,895
Loss (gain) on derivative liability		2,461			(36,687	)		(31,039	)
Foreign exchange revaluation		—			—			(469,694	)
Conversion of warrants to equity		(17,737	)		—			(89,199	)
Balance – end of period	$	—		$	15,276		$	51,963