In Management's 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
management's review of the factors that affected our financial and operating
performance for the three- and nine-month periods ended August 31, 2020 and
August 31, 2019. This discussion should be read in conjunction with the
condensed consolidated interim financial statements and notes thereto contained
elsewhere in this report and our Annual Report on Form 10-K for the year ended
November 30, 2019, 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.



Overview



Our operations primarily relate to the delivery of project milestones, including
the achievement of various technical, environmental, sustainable development,
external affairs/community engagement, economic, and legal objectives; obtaining
necessary permits, completion of feasibility studies, preparation of engineering
designs and obtaining financing to fund these milestones.



Our goals for 2020 include:

? Advance the Donlin Gold project toward a construction/production decision.






  ? Maintain a healthy balance sheet.




  ? Sustain an effective corporate social responsibility program.




  ? Promote a strong safety, sustainability and environmental culture.




Third quarter highlights



COVID-19



NOVAGOLD's most important objective is to ensure the health and safety of its
employees, partners and contractors. 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 asked to work from home, avoid all
non-essential travel, adhere to good hygiene practices, and engage in social
distancing.



Drilling activities resumed at Donlin Gold in late May, after temporarily
pausing due to the COVID-19 pandemic, and following the announcement by Alaska's
Governor of the safe re-opening process for the State and easing of travel
restrictions, and in consultation with employees, contractors and regional
villages regarding safety measures. Donlin Gold has implemented a wide-ranging
set of policies at its office in Anchorage and at the project site this year
designed to prevent the spread of COVID-19, including: testing of all employees
and contractors visiting the Donlin Gold project site; utilizing charters to
safely deliver employees to and from camp to minimize in-region travel;
screening and social distancing measures while at camp; more frequent
sanitization practices; and increased communication around hygiene and
sanitization practices, as well as identification of symptoms.



Donlin Gold LLC also responded to the COVID-19 pandemic with urgently needed
community support, including delivery of food and supplies, alongside its Native
Corporation partners Calista Corporation ("Calista") and The Kuskokwim
Corporation (TKC), owners of the project's subsurface and surface rights
respectively.



Donlin Gold project



NOVAGOLD and Barrick continue to study ways to improve the project's value and
to reduce initial capital outlays through enhanced project design and execution,
engagement of third-party operators for certain activities, and potential for
future financing of some capital-intensive infrastructure. To date, these
additional studies have identified key areas that have the potential to add
value and maximize the future opportunity and longevity of the project. In the
third quarter, Donlin Gold LLC had four drills at the project site to advance
the 2020 drill program in the ACMA and Lewis resource areas. The primary
objective of the 2020 drill program, the largest such campaign at Donlin Gold
since 2008, is to validate recent geological and resource modeling controls
developed by the owners, Barrick and NOVAGOLD. The other objective is to test
potential extensions of high-grade zones, most of which would be expected to be
mined early in the life of a future mine. The newly obtained data should lead
the partners to determine 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. As discussed above, drilling activities
resumed at Donlin Gold in late May, after temporarily pausing due to the
COVID-19 pandemic, and following the announcement by Alaska's Governor of the
safe re-opening process for the State and easing of travel restrictions, and in
consultation with employees, contractors and regional villages regarding safety
measures. NOVAGOLD and Barrick Gold issued a joint release on August 6, 2020
with an update on the recent drilling at Donlin Gold with significant distinct
high-grade intervals intercepted in multiple areas, including good intervals
near surface. Donlin Gold LLC completed the drilling in September 2020 with
assays anticipated to be received by early 2021. The owners will advance the
Donlin Gold project in a safe, efficient, financially disciplined manner with a
strong focus on environmental stewardship and social responsibility.



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Our share of funding for the Donlin Gold project in the first nine months of
2020 was $13.6 million for the drill program, administration, permitting and
community engagement efforts. Our share of the Donlin Gold 2020 work program and
budget totals $20 million, including $11 million for the drilling program and $9
million for administration, permitting and community engagement to continue to
advance the project. The continued spread of COVID-19 could impact employee
health, workforce productivity, insurance premiums, ability to travel, the
availability of industry experts and personnel, restrictions or delays to the
drill program and/or the timing to process drill results and other metallurgical
testing, and other factors that will depend on future developments beyond our
control.



Donlin Gold LLC continues to support the State of Alaska to advance other
permits and certificates needed for the project. The Alaska Department of
Natural Resources' (ADNR) issuance of the Alaska Dam Safety certificates for the
tailings storage facility and water retention and diversion structures requires
a thorough multi-year stepwise process to deliver a final construction package
to ADNR. The program necessary for the certificates, including geotechnical core
drilling, test pits, overburden drilling, packer tests, hydrogeologic test well
installation and pumping tests, and geophysical surveys, commenced in 2019. The
field work has been temporarily paused pending the prioritization of the 2020
drill program.



ADNR's Division of Mining, Land, and Water (DMLW) issued the easement land
leases, land use permits, and material site authorizations for the proposed
transportation facilities including the access road, airstrip, and upriver
Jungjuk port, as well as the easement for the fiber optic cable on State lands
on January 2, 2020. ADNR's Division of Oil and Gas (DOG), issued the final State
Right-of-Way (ROW) lease for the buried natural gas pipeline on January 17,
2020. On February 6, 2020, Cook Inletkeeper, on behalf of the Orutsararmiut
Native Council (ONC), Susitna River Coalition, Kasigluk Traditional Council, and
Tununak IRA Council, requested that the Commissioner of ADNR reconsider the
decision to issue the ROW lease for the pipeline. The ADNR Commissioner denied
the request for reconsideration on February 18, 2020. On March 19, 2020,
Earthjustice, representing ONC, Chevak Native Village, Chuloonawick Native
Village, Native Village of Eek, and Cook Inletkeeper, filed an appeal of the
denial of the ROW lease issuance reconsideration request in the Superior Court
of the State of Alaska at Anchorage (the "Alaska Superior Court"). On April 30,
2020, ADNR reversed itself and agreed to reconsider the decision to issue the
ROW lease in accordance with the February 6, 2020 request made by Cook
Inletkeeper. The reconsideration is specifically addressing additional analysis
of cumulative effects. In response, the appeal filed in the Alaska Superior
Court was dismissed without prejudice on May 20, 2020. ADNR reissued additional
information on the pipeline, including an updated cumulative effects analysis,
for public comment on September 10, 2020. Donlin Gold LLC supported the State's
decision to complete this work and we expect that the final ROW lease
authorization offer will be reissued in early 2021 by ADNR.



In 2018, Earthjustice, on behalf of ONC, Akiak Native Community IRA Council,
Organized Village of Kwethluk, Native Village of Kwigillingok, Chuloonawick
Tribal Council, and the Yukon-Kuskokwim River Alliance, requested an informal
review of the State of Alaska's 401 certification (the "Certification") by the
Director of the Division of Water in the Alaska Department of Environmental
Conservation (ADEC). In October 2018, the Director responded to the request by
deciding to conduct the informal review and reissued the Certification on April
4, 2019. On April 24, 2019, Earthjustice requested a second informal review of
the Certification and the request was granted by ADEC on May 4, 2019. On May 8,
2020, after a long and detailed technical and legal analysis including input
from Donlin Gold, the Director issued his decision to uphold the April 2019
reissued Certification. On June 5, 2020, Earthjustice filed a formal appeal to
the ADEC Commissioner; the appeal is in the form of a request for an
Adjudicatory Hearing. The appeal specifically relates to compliance with the
State's water quality standards in Crooked Creek near the proposed mine site. On
June 15, 2020, the ADEC Commissioner conditionally granted the request for the
hearing. After completion of the hearing process, the ADEC Commissioner is
expected to issue a decision on the appeal in late 2020 or early 2021.



Donlin Gold LLC, with support from the project owners (NOVAGOLD and Barrick) is
committed to growing strong and collaborative working relationships to preserve
traditional lifestyles and support economic development for the benefit of
Calista, TKC and the Yukon-Kuskokwim (Y-K) region. Donlin Gold LLC and our
Native Corporation partners remain actively engaged in environmental
sustainability projects and extensive outreach efforts with local stakeholders
through multiple traditional village council meetings, regional tribal
gatherings, events and village visits across the Y-K region. Involving the local
communities in all aspects of the project is core to both Barrick's and
NOVAGOLD's philosophy as illustrated by the fact that approximately 80% of
Donlin Gold direct hires are Alaska Natives.



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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 LLC.



Outlook



We do not currently generate operating cash flows. At August 31, 2020, we had
cash and cash equivalents of $45.3 million and term deposits of $81.0 million.
At present, we believe that these balances are sufficient to cover anticipated
funding of the Donlin Gold project and NOVAGOLD's general and administrative
costs. Additional capital will be necessary if a decision to commence
engineering and construction is reached for the Donlin Gold project. 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 the risk factors in our Annual Report on Form 10-K for the year
ended November 30, 2019, as filed with the SEC and the Canadian Securities
Regulators on January 22, 2020, and Part II, Item 1A of this Form 10-Q.



For 2020, we continue to expect to spend approximately $31 million, including
$20 million to fund our share of expenditures at the Donlin Gold project and $11
million for general and administrative costs. The continued spread of COVID-19
could materially and adversely impact the Company's business including without
limitation, employee health, workforce productivity, insurance premiums, ability
to travel, the availability of industry experts and personnel, restrictions or
delays to the Donlin Gold drill program and/or the timing to process drill and
other metallurgical testing, and other factors that will depend on future
developments beyond the Company's control.

Summary of Consolidated Financial Performance





                                                   Three months ended August 31,            Nine months ended August 31,
($ thousands, except per share)                      2020                  2019               2020                 2019
General and administrative                      $        (4,745 )     $       (4,075 )   $      (13,846 )     $      (12,630 )
Equity loss - Donlin Gold                                (6,150 )             (3,141 )          (11,418 )             (6,662 )
Loss from operations                            $       (10,895 )     $       (7,216 )   $      (25,264 )     $      (19,292 )

Net loss                                        $       (12,736 )     $       (8,056 )   $      (26,564 )     $      (19,894 )

Net loss per common share - basic and diluted $ (0.04 ) $ 


   (0.02 )   $        (0.08 )     $        (0.06 )




Results of Operations

Third quarter 2020 compared to 2019





Loss from operations increased from $7.2 million in 2019 to $10.9 million in
2020 due to higher general and administrative expense and higher costs at Donlin
Gold LLC. General and administrative expense increased from $4.1 million in 2019
to $4.7 million in 2020 primarily due to higher legal and share-based
compensation costs. Equity loss - Donlin Gold increased from $3.1 million in
2019 to $6.2 million in 2020 due to the 2020 drilling program.



Net loss increased from $8.0 million ($0.02 per share) in 2019 to $12.7 million
($0.04 per share) in 2020, primarily due to higher operating losses, foreign
exchange movements and lower interest income, partially offset by lower interest
expense on the promissory note payable to Barrick.



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First nine months 2020 compared to 2019





Loss from operations increased from $19.3 million in 2019 to $25.3 million in
2020 due to higher general and administrative expense and higher costs at Donlin
Gold LLC. General and administrative expense increased by $1.2 million primarily
due to higher share-based compensation, legal and regulatory costs. Our share of
Donlin Gold LLC expenses increased by $4.8 million due to the 2020 drilling
program.

Net loss increased from $19.9 million ($0.06 per share) in 2019 to $26.6 million ($0.08 per share) in 2020, primarily due to higher operating losses, lower interest income and foreign exchange movements, partially offset by lower interest expense on the promissory note payable to Barrick.

Liquidity, Capital Resources and Capital Requirements





                                 At                At
                             August 31,       November 30,
($ thousands)                   2020              2019           Change
Cash and cash equivalents   $     45,348     $       67,549     $ (22,201 )
Term deposits               $     81,000     $       81,000     $       -




In the first nine months of 2020, total Cash, cash equivalents and Term deposits
decreased by $22.2 million of which $7.1 million was used in operating
activities for administrative costs and working capital changes, $13.6 million
was used to fund Donlin Gold and $1.7 million related to withholding taxes paid
on vested performance share units (PSUs). Effects of exchange rate changes also
increased cash by $0.2 million. The term deposits are denominated in U.S.
dollars and are held at Canadian chartered banks.



                                              Three months ended August 31,           Nine months ended August 31,
($ thousands)                                   2020                 2019               2020                 2019
Net cash (used in) provided from:
Operating activities                       $       (1,826 )     $         (373 )   $        (7,157 )     $      (5,284 )
Investing activities                       $       (6,693 )     $       36,160     $       (13,583 )     $      39,354
Financing activities                       $            -       $            -     $        (1,652 )     $      (1,197 )

Third quarter 2020 compared to 2019





Net cash used in operating activities increased by $1.5 million, due to lower
interest income and higher general and administrative expense, partially offset
by changes in working capital. Net cash provided from (used in) investing
activities included a $2.9 million increase in Donlin Gold funding due to the
2020 drilling program. For the three-month period in 2019, term deposits
decreased by $40.0 million, with the proceeds deposited in interest-bearing
savings accounts.

First nine months 2020 compared to 2019





Net cash used in operating activities increased by $1.9 million, primarily due
to lower interest income and higher general and administrative expense,
partially offset by changes in working capital. Net cash provided from (used in)
investing activities included a $5.9 million increase in Donlin Gold funding due
to the 2020 drilling program. For the nine-month period in 2019, term deposits
decreased by $47.0 million, with the proceeds deposited in interest-bearing
savings accounts. Net cash used in financing activities relates to withholding
taxes paid on vested performance share units.



Outstanding share data



As of September 23, 2020, the Company had 329,912,479 common shares issued and
outstanding. Also, as of September 23, 2020, the Company had: i) a total of
11,157,163 stock options outstanding; 2,381,898 of those stock options with a
weighted-average exercise price of C$5.62 and the remaining 8,775,265 with a
weighted-average exercise price of $4.60; and ii) 1,684,000 PSUs and 280,363
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 13,963,526 common shares.



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Accounting Developments

For a discussion of Recently Issued Accounting Pronouncements, see Note 2 to the Condensed Consolidated Interim Financial Statements.

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