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NOTE 5. INVESTMENT IN AFFILIATES
6 Months Ended
May 31, 2014
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]  
NOTE 5. INVESTMENT IN AFFILIATES

 

   

At May 31,

2014

    At November 30, 
2013
 
Donlin Gold LLC, Alaska, U.S.A   $ 3,480     $ 1,720  
Galore Creek Partnership, British Columbia, Canada     298,978       305,735  
    $ 302,458     $ 307,455  

 

Donlin Gold LLC

 

On December 1, 2007, together with Barrick Gold US Inc. (“Barrick”), the Company formed a limited liability company (“Donlin Gold LLC”) to advance the Donlin Gold project in Alaska. 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 Barrick and the Company. The Company has a 50% interest in Donlin Gold LLC.

  

Changes in the Company’s 50% investment in Donlin Gold LLC are summarized as follows:

             
    Six months ended May 31,  
    2014     2013  
Balance – beginning of period   $ 1,720     $ 4,185  
Funding     7,746       6,898  
Share of losses     (5,986 )     (6,528 )
Balance – end of period   $ 3,480     $ 4,555  

 

The following amounts represent the Company’s 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.

 

   

At May 31,

2014

    At November 30, 
2013
 
Current assets: Cash, prepaid expenses and other receivables   $ 4,139     $ 3,390  
Non-current assets: Property and equipment     484       541  
Non-current assets: Mineral property     32,692       32,692  
Current liabilities: Accounts payable and accrued liabilities     (1,143 )     (2,211 )
Non-current liabilities: Reclamation obligation     (692 )     (692 )
Net assets   $ 35,480     $ 33,720  

 

Galore Creek Partnership

 

The Galore Creek project is owned by the Galore Creek Partnership (“Partnership”) a partnership in which wholly owned subsidiaries of NOVAGOLD and Teck Resources Limited (“Teck”) each own a 50% interest. The Partnership was formed in May 2007. Teck earned its 50% interest in the Partnership upon completion of its funding commitment of C$373,300 in June 2011. Commencing June 2011, the partners have funded the project costs on a 50/50 basis.

 

Changes in the Company’s 50% investment in the Partnership are summarized as follows:

             
    Six months ended May 31,  
    2014     2013  
Balance – beginning of period   $ 305,735     $ 335,086  
Funding     1,445       2,067  
Share of losses     (1,250 )     (5,193 )
Exploration tax credit     (693 )      
Foreign currency translation     (6,259 )     (13,879 )
Balance – end of period   $ 298,978     $ 318,081  

 

The following amounts represent the Company’s 50% share of the assets and liabilities of the Partnership. As a result of recording the Company’s investment in the Partnership at fair value in June 2011, the carrying value of the Company’s 50% interest in the Partnership is higher than 50% of the book value of the Partnership. Therefore, the Company’s investment in the Partnership does not equal 50% of the net assets recorded by the Partnership:

 

   

At May 31,

2014

    At November 30, 
2013
 
Current assets: Cash, prepaid expenses and other receivables   $ 532     $ 377  
Non-current assets: Property and equipment     268,733       263,797  
Current liabilities: Accounts payable and accrued liabilities     (462 )     (483 )
Non-current liabilities: Payables and reclamation obligation     (8,724 )     (8,533 )
Net assets   $ 260,079     $ 255,158  

 

Equity losses of affiliates

 

    Three months ended May 31,     Six months ended May 31,  
    2014     2013     2014     2013  
Donlin Gold LLC:                        
Mineral property expenditures   $ 3,083     $ 3,480     $ 5,893     $ 6,420  
Depreciation     48       54       94       108  
      3,131       3,534       5,987       6,528  
Galore Creek Partnership:                                
Mineral property expenditures     47       422       328       932  
Care and maintenance expense     438       696       922       1,050  
Depreciation           1,586             3,211  
      485       2,704       1,250       5,193  
      3,616     $ 6,238     $ 7,237     $ 11,721