NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

NOVAGOLD RESOURCES INC. and its affiliates and subsidiaries (collectively, “NOVAGOLD” or the “Company”) operate in the mining industry, focused on the exploration for and development of gold mineral properties. The Company’s principal asset is a 60% interest in the Donlin Gold project in Alaska, USA. The Company has no realized revenues from its principal asset. The Donlin Gold project is owned and operated by Donlin Gold LLC, a Delaware limited liability company (“Donlin Gold”). NOVAGOLD owns 60% of the equity interests of Donlin Gold through NOVAGOLD Resources Alaska, Inc., an Alaska corporation (“NGRA”). Paulson Advisers LLC, a Delaware limited liability company, and certain of its affiliates (collectively, “Paulson”) own the remaining 40% of the equity interests of Donlin Gold through Donlin Gold Holdings LLC, a Delaware limited liability company (“DGH”). The membership interests of DGH are held by Donlin Gold Holdings II LLC, a Delaware limited liability company (“DGH II”), and certain other Paulson affiliates. Prior to June 3, 2025, Donlin Gold was owned equally by NGRA, a wholly-owned subsidiary of NOVAGOLD and Barrick Mining Corporation (“Barrick”). See Note 5 regarding changes to Donlin Gold ownership on June 3, 2025.

On July 21, 2026, the Company, Paulson, and NovaGold Corporation, a newly incorporated Delaware corporation (“New NOVAGOLD”) entered into a series of definitive transaction agreements pursuant to which, subject to the satisfaction of certain closing conditions, upon the consummation of the transactions contemplated thereby, New NOVAGOLD will own, directly and indirectly, 100% of Donlin Gold. See Note 6 for additional information regarding the proposed transaction.

The Condensed Consolidated Interim Financial Statements (“interim 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 NOVAGOLD’s Consolidated Financial Statements for the year ended November 30, 2025. 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 (“U.S. GAAP”) have been condensed or omitted.

The functional currency of the Company is the U.S. dollar. Prior to April 22, 2025, the functional currency of NOVAGOLD, the parent company, was the Canadian dollar. Management reassessed the functional currency of the parent company, NOVAGOLD, and determined that as of April 22, 2025, given the increasing prevalence of U.S. dollar denominated activities and financing transactions, its functional currency changed from the Canadian dollar to the U.S. dollar. Prior to April 22, 2025, the effects of translating the Company’s Canadian operations from the Canadian dollar to the U.S. dollar were recorded in Other comprehensive income (loss) and Accumulated other comprehensive loss. The change in functional currency was accounted for prospectively from April 22, 2025, and prior period consolidated financial statements were not restated. Previously recorded cumulative translation adjustments were not reversed.

References in these Condensed Consolidated Interim Financial Statements and Notes to $ refer to United States (“U.S.”) dollars and C$ to Canadian dollars. Dollar amounts are in thousands, except for per share amounts.