US GAAP NOTE
 

 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of January, 2006
Commission File Number: 001-31913
NOVAGOLD RESOURCES INC.
(Translation of registrant’s name into English)
Suite 2300 – 200 Granville Street, PO Box 24
Vancouver, BC Canada V6C 1S4
 
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
o Form 20-F   þ Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes o No þ
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-                     
 
 

 

 

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
         
    NovaGold Resources, Inc.
    (Registrant)
 
        
Date: January 24, 2006
  By:   /s/ Elaine Sanders
 
       
 
      Elaine Sanders
 
  Title:   Controller

 

 

NOVAGOLD RESOURCES INC.
For the three and nine months ended August 31, 2005
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Unaudited
Significant differences from United States accounting principles
Canadian generally accepted accounting principles (Canadian GAAP) vary in certain significant respects from the principles and practices generally accepted in the United States (U.S. GAAP). The effect of the principal measurement differences on the Company’s unaudited consolidated financials statements is quantified below and described in the accompanying notes.
in thousands of Canadian dollars
                 
    August 31     November 30  
    2005     2004  
     
Shareholders’ equity reported under Canadian GAAP
     221,628       171,510  
Cumulative adjustments to shareholders’ equity
                
Add (deduct)
                
Exploration costs (a)
     (102,194 )     (62,168 )
Flow-through shares (d)
     —       (2,496 )
Unrealized gain on available for sale securities (b)
     6,444       693  
     
 
                
Shareholders’ equity under U.S. GAAP
     125,878       107,539  
     
 
                
Total assets reported under Canadian GAAP
     275,722       210,499  
Add (deduct)
                
Exploration costs (a)
     (102,194 )     (62,168 )
Unrealized gain on available for sale securities (b)
     6,444       693  
     
 
                
Total assets reported under U.S. GAAP
     179,972       149,024  
     
 
                
Total liabilities reported under Canadian GAAP
     54,094       38,989  
Add
                
Future income taxes
     —       2,496  
     
 
                
Total liabilities reported under U.S. GAAP
     54,094       41,485  
     

 

 

in thousands of Canadian dollars
                                 
    Three Months Ended     Nine Months Ended  
    August 31     August 31  
    2005     2004     2005     2004  
    $     $     $     $  
Loss for the period reported under Canadian GAAP
     (1,451 )     (286 )     (8,385 )     (7,113 )
Add (deduct)
                                
Exploration costs (a)
     (26,377 )     (11,175 )     (40,026 )     (14,615 )
Flow-through shares (d)
     —       —       (4,228 )     —  
 
                                
     
 
                                
Loss for the year under U.S. GAAP
     (27,828 )     (11,461 )     (52,639 )     (21,728 )
 
                                
     
 
                                
Loss for the year before comprehensive income adjustment
     (27,828 )     (11,461 )     (52,639 )     (21,728 )
 
                                
Unrealized gain (loss) on available for sale securities (b)
     6,173       116       5,751       (83 )
     
 
                                
Comprehensive (loss) income under U.S. GAAP
     (21,655 )     (11,345 )     (46,888 )     (21,811 )
     
 
                                
Net loss per common share — U.S. GAAP
                                
Basic and diluted
     (0.41 )     (0.19 )     (0.79 )     (0.38 )
 
                                
Accumulated other comprehensive income
                                
Opening balance
     271       141       693       340  
Unrealized gain (loss) on available for sale securities (b)
     6,173       116       5,751       (83 )
     
 
                                
Closing balance
     6,444       257       6,444       257  
     

 

 

                                 
    Three Months Ended     Nine Months Ended  
    August 31     August 31  
    2005     2004     2005     2004  
    $     $     $     $  
     
Cash flows from operating activities under Canadian GAAP
     (921 )     (646 )     (4,971 )     (3,798 )
Exploration costs (a)
     (26,377 )     (11,175 )     (40,026 )     (14,615 )
 
                                
     
Cash flows from operating activities under U.S. GAAP
     (27,298 )     (11,821 )     (44,997 )     (18,413 )
     
 
                                
Cash flows from investing activities under Canadian GAAP
     (30,409 )     (5,672 )     (45,444 )     (10,894 )
Exploration costs (a)
     26,377       11,175       40,026       14,615  
     
 
                                
Cash flows from investing activities under U.S. GAAP
     (4,032 )     5,503       (5,418 )     3,721  
     
  a)   Exploration costs
 
      Resource property costs and related exploration expenditures are capitalized in accordance with Canadian GAAP. For U.S. GAAP purposes, the Company expenses, as incurred, the exploration costs relating to unproven mineral properties. When proven and probable reserves are determined for a property and a feasibility study prepared, then subsequent exploration and development costs of the property would be capitalized. The capitalized costs of such properties would then be measured periodically for recoverability of carrying values under Statement of Financial Accounting Standards (SFAS) No. 144.
 
  b)   Available for sale securities
 
      Under U.S. GAAP, securities that are available for sale are recorded at fair value and unrealized gains or losses are part of comprehensive income. Under Canadian GAAP, there is no adjustment made for unrealized gains.
 
  c)   Comprehensive income
 
      In addition to net income, comprehensive income includes all changes in equity during a period except those resulting from transactions with shareholders. Such items would include the cumulative unrecognized changes in fair value of securities that are available for sale.
 
  d)   Flow-through shares
 
      In October 2004 the Company issued by way of private placement 1,980,200 flow-through common shares at $10.10 per share. The Company received a net premium to market on this issuance of $2,496,000 which was recorded in share capital as part of the transaction. For U.S. GAAP purposes the proceeds should be allocated between the offering of the shares and the sale of tax benefits when the shares are offered. The allocation is made based on the difference between the quoted price of the shares and the amount the investor pays for the flow-through shares. A future income tax liability is recognized for the premium paid by the investors.
 
      Upon renouncing the income tax deductions in 2005, the Company recorded a future income tax liability with a corresponding reduction in share capital under Canadian GAAP. For U.S. GAAP purposes the difference between the future income tax liability on renunciation and the premium is recorded as a future income tax expense.