UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Form 10-K/A

Amendment No. 1



☒       ANNUAL REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the Fiscal Year Ended November 30, 2018



OR



☐       TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the Transition Period from                    to



Commission File Number: 001-31913









NOVAGOLD RESOURCES INC.(Exact Name of Registrant as Specified in Its Charter)



|British Columbia                                                    | N/A                                 
|------------------------------------------------------------------- | ------------------------------------
|(State or Other Jurisdiction of
Incorporation or Organization)      | (I.R.S. Employer
Identification No.)
|                                                                    |                                     
|201 South Main, Suite 400
Salt Lake City, Utah, USA                 | 84111                               
|(Address of Principal Executive Offices)                            | (Zip Code)                          
|                                                                    |                                     
|(801) 639-0511
(Registrant’s Telephone Number, Including Area Code)
|                                                                    |                                     
|Securities registered pursuant to Section 12(b) of the Act:        





|Title
    of Each Class     | Trading Symbol | Name
    of each exchange on which registered
|--------------------------- | -------------- | ---------------------------------------------
|Common Shares, no par value | NG             | NYSE American
Toronto Stock Exchange         



Securities registered pursuant to Section 12(g) of the Act: 
None



Indicate by check mark if the registrant is
a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐



Indicate by check mark if the registrant is
not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒



Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ☒ No ☐



Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§
232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files). Yes ☒ No ☐

















Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)



|Large accelerated filer ☒   | Accelerated filer ☐       | Non-accelerated filer ☐
|--------------------------- | ------------------------- | -----------------------
|                            |                           |                        
|Smaller reporting company ☐ | Emerging growth company ☐ |                        



If an emerging growth company, indicate by
check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒



Based on the last sale price on the NYSE American
of the registrant’s common shares on May 31, 2018 (the last business day of the registrant’s most recently completed
second fiscal quarter) of $4.84 per share, the aggregate market value of the voting common shares held by non-affiliates was approximately
$1,150,740,000.



As of January 16, 2019, the registrant had
325,052,364 common shares, no par value, outstanding.





DOCUMENTS INCORPORATED BY REFERENCE



Certain portions of the registrant’s
definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than April
1, 2019, in connection with the registrant’s fiscal year 2018 annual meeting of shareholders, were incorporated by reference
into Part III of the Annual Report on Form 10-K originally filed on January 23, 2019.

















2


NOVAGOLD RESOURCES INC.












TABLE OF CONTENTS



Page



|Explanatory Note                                          | 4
|--------------------------------------------------------- | -
|PART IV                                                   | 5
|Item 15.   Exhibits
    and Financial Statement Schedules | 5































3


NOVAGOLD RESOURCES INC.












EXPLANATORY NOTE



The Annual Report on Form 10-K of NOVAGOLD
RESOURCES INC. (“NOVAGOLD”, “we”, “our”, “us”, or the “Company”) for
the year ended November 30, 2018 was originally filed with the U.S. Securities and Exchange Commission on January 23, 2019 (the
“Original Form 10-K”).  This Amendment No. 1 to the Original Form 10-K (this “Amendment No. 1”)
is being filed solely to include the financial statements of Galore Creek Partnership for its year ended December 31, 2018.



The exhibit listing in Part IV, Item 15 in this Amendment No. 1
reflects a currently-dated consent of PricewaterhouseCoopers LLP, as well as, pursuant to Rule 12b-15 promulgated under the Securities
Exchange Act of 1934, as amended, currently-dated certifications from the Chief Executive Officer and the Chief Financial Officer
as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as amended, which are attached as exhibits to this Amendment
No. 1.



Except as described above, no other changes
have been made to the Original Form 10-K. There have been no changes to any of the financial or other information contained in
the Original Form 10-K. Except as specifically provided otherwise herein, this Amendment
No. 1 does not reflect events occurring after January 23, 2019, the date of the filing of our Original Form 10-K or modify or update
those disclosures that may have been affected by subsequent events. Accordingly, this Amendment No. 1 should be read in conjunction
with the Original Form 10-K.















4


NOVAGOLD RESOURCES INC.






PART
IV



|Item 15. | Exhibits and Financial Statement Schedules
|-------- | ------------------------------------------



(a)(1) Financial Statements.The Consolidated Financial Statements
are included in our Original Form 10-K in Part II, Item 8.



(a)(2) Financial Statement Schedules



Schedule A – The Financial Statements
of Donlin Gold LLC as at November 30, 2018 and 2017 and for the years ended November 30, 2018, 2017 and 2016 are included in our
Original Form 10-K.



Schedule B – The Financial Statements
of the Galore Creek Partnership as at December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016 are being
filed by this amendment.



No other financial statement schedules are filed
as part of this report because such schedules are not applicable or the required information is shown in the Consolidated Financial
Statements or Notes thereto. See “Item 8. Financial Statements and Supplementary Data” in our Original Form 10-K.



(a)(3)The executive compensation plans and arrangements
listed in Part IV, Item 15(a)(3) of the Original Form 10-K were filed or incorporated by reference as part of the Original Form
10-K.



5


NOVAGOLD RESOURCES INC.






(b) Exhibits



The exhibits listed in Part IV,
Item 15. “Exhibits, Financial Statement Schedules” of the Original Form 10-K were filed or incorporated by reference
as part of the Original Form 10-K.



|Exhibit
No. |  | Description                                                            
|----------- |  | -----------------------------------------------------------------------
|            |  |                                                                        
|23.1        |  | Consent of PricewaterhouseCoopers LLP                                  
|31.1        |  | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|31.2        |  | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|32.1        |  | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|32.2        |  | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002









6


NOVAGOLD RESOURCES INC.






SIGNATURES



Pursuant to the requirements of Section 13
or 15(d) 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.
|------------------- |  | -----------------------
|                    |  |                        
|                    |  | By:                    
|                    |  | Name:                  
|                    |  | Title:                 
|                    |  |                        
|Date: June 25, 2019 |  |                        

























7







Item 15. (a)(2) Schedule B





Report of Independent Registered Public Accounting Firm



To the Partners and Management Committee of the Galore Creek Partnership





Opinion on the Financial
Statements



We have audited the accompanying balance sheets of the Galore Creek
Partnership (the Partnership) as of December 31, 2018 and 2017, and the related statements of loss and comprehensive loss, changes
in partners’ equity and cash flows for each of the three years in the period ended December 31, 2018, including the related
notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 2018 and 2017, and its financial performance and its cash
flows for each of the three years in the period ended December 31, 2018 in conformity with International Financial Reporting Standards
as issued by the International Accounting Standards Board (IFRS).



Basis for Opinion



These financial statements are the responsibility of the Partnership’s
management. Our responsibility is to express an opinion on the Partnership’s financial statements based on our audits. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required
to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.



We conducted our audits of these financial statements in accordance
with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement, whether due to error or fraud.



Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.



/s/PricewaterhouseCoopers LLP



Chartered Professional Accountants



Vancouver, Canada 
June 18, 2019



We have served as the Partnership’s auditor since 2007.









B-1























Galore Creek Partnership

A Partnership between Newmont Galore Creek Holding Corporation and Teck Resources Limited



Financial Statements

December 31, 2018 and 2017

(Expressed in thousands of Canadian dollars)



































Galore Creek Partnership

Balance Sheets

December 31, 2018 and 2017



(in thousands of Canadian dollars)



|                                                   |  | 2018
$ |          |   | 2017
$ | 
|-------------------------------------------------- |  | ------ | -------- | - | ------ | 
|Assets                                             |  |        |          |   |        | 
|Current assets:                                    |  |        |          |   |        | 
|Cash and cash equivalents                          |  |        | 2,776    |   |        | 
|Deposits and prepaid expenses                      |  |        | 20       |   |        | 
|Due from Partners (Note 10)                        |  |        | 19       |   |        | 
|GST recoverable                                    |  |        | 121      |   |        | 
|                                                   |  |        | 2,936    |   |        | 
|Mineral property, plant and equipment (Note 6)     |  |        | 706,943  |   |        | 
|Reclamation bonds (Note 7)                         |  |        | 4,522    |   |        | 
|                                                   |  |        | 714,401  |   |        | 
|                                                   |  |        |          |   |        | 
|Liabilities                                        |  |        |          |   |        | 
|Current liabilities:                               |  |        |          |   |        | 
|Accounts payable and accrued liabilities           |  |        | 1,163    |   |        | 
|Due to Partners (Note 10)                          |  |        | 936      |   |        | 
|                                                   |  |        | 2,099    |   |        | 
|Due to Partners (Note 10)                          |  |        | 4,453    |   |        | 
|Decommissioning and restoration provision (Note 7) |  |        | 15,505   |   |        | 
|                                                   |  |        | 22,057   |   |        | 
|                                                   |  |        |          |   |        | 
|Equity                                             |  |        |          |   |        | 
|Partners’ contributions                            |  |        | 864,946  |   |        | 
|Partners’ deficit                                  |  |        | (172,602 | ) |        | 
|                                                   |  |        | 692,344  |   |        | 
|                                                   |  |        | 714,401  |   |        | 





Commitments and contingencies (Note 9)





(See accompanying notes to financial statements)









1









Galore Creek Partnership

Statements of Loss and Comprehensive Loss

For the Years Ended December 31,
2018, 2017 and 2016



(in thousands of Canadian dollars)



|                                         |  | 2018
$ |        |   | 2017
$ |  |        | 2016
$ | 
|---------------------------------------- |  | ------ | ------ | - | ------ |  | ------ | ------ | 
|                                         |  |        |        |   |        |  |        |        | 
|Other Income                             |  |        |        |   |        |  |        |        | 
|Interest income                          |  |        | 16     |   |        |  | –      |        | 
|                                         |  |        | 16     |   |        |  | –      |        | 
|                                         |  |        |        |   |        |  |        |        | 
|Expenses and Other Items                 |  |        |        |   |        |  |        |        | 
|Professional fees                        |  |        | 52     |   |        |  | 51     |        | 
|Care and maintenance costs (Note 8)      |  |        | 9,085  |   |        |  | 4,410  |        | 
|                                         |  |        | 9,137  |   |        |  | 4,461  |        | 
|Loss and Comprehensive Loss for the year |  |        | (9,121 | ) |        |  | (4,461 | )      | 



(See accompanying notes to financial statements)









2









Galore Creek Partnership

Statement of Changes in Partners’ Equity

For the Years Ended December 31,
2018, 2017 and 2016



(in thousands of Canadian dollars)



|                                |  | NovaGold / Newmont Contributions $ |         |  | Teck
 Contributions $ |  |         | Deficit $ |  |  | Total $  |  
|------------------------------- |  | ---------------------------------- | ------- |  | --------------------- |  | ------- | --------- |  |  | -------- | -
|                                |  |                                    |         |  |                       |  |         |           |  |  |          |  
|Balance as at December 31, 2015 |  |                                    | 434,067 |  |                       |  | 413,387 |           |  |  | (156,437 | )
|                                |  |                                    |         |  |                       |  |         |           |  |  |          |  
|Net loss for the year           |  |                                    | –       |  |                       |  | –       |           |  |  | (2,583   | )
|Contributions                   |  |                                    | 1,355   |  |                       |  | 1,355   |           |  |  | –        |  
|Balance as at December 31, 2016 |  |                                    | 435,422 |  |                       |  | 414,742 |           |  |  | (159,020 | )
|                                |  |                                    |         |  |                       |  |         |           |  |  |          |  
|Net loss for the year           |  |                                    | –       |  |                       |  | –       |           |  |  | (4,461   | )
|Contributions                   |  |                                    | 2,085   |  |                       |  | 2,085   |           |  |  | –        |  
|Balance as at December 31, 2017 |  |                                    | 437,507 |  |                       |  | 416,827 |           |  |  | (163,481 | )
|                                |  |                                    |         |  |                       |  |         |           |  |  |          |  
|Net loss for the year           |  |                                    | –       |  |                       |  | –       |           |  |  | (9,121   | )
|Contributions                   |  |                                    | 5,306   |  |                       |  | 5,306   |           |  |  | –        |  
|Balance as at December 31, 2018 |  |                                    | 442,813 |  |                       |  | 422,133 |           |  |  | (172,602 | )





(See accompanying notes to financial statements)





3









Galore Creek Partnership

Statements of Cash Flows

For the Years Ended December 31,
2018, 2017 and 2016



(in thousands of Canadian dollars)



|                                                                                       |  | 2018 $ |        |   | 2017 $ |  |        | 2016
$ | 
|-------------------------------------------------------------------------------------- |  | ------ | ------ | - | ------ |  | ------ | ------ | 
|                                                                                       |  |        |        |   |        |  |        |        | 
|Cash flows provided by operating activities                                            |  |        |        |   |        |  |        |        | 
|Loss for the year                                                                      |  |        | (9,121 | ) |        |  | (4,461 | )      | 
|Net change in non-cash working capital                                                 |  |        |        |   |        |  |        |        | 
|(Increase) decrease in GST recoverable                                                 |  |        | (100   | ) |        |  | (17    | )      | 
|(Increase) decrease in deposits and prepaid amounts                                    |  |        | (20    | ) |        |  | –      |        | 
|Increase (decrease) in accounts payable, accrued liabilities, and due to/from Partners |  |        | 1,064  |   |        |  | 491    |        | 
|                                                                                       |  |        | (8,177 | ) |        |  | (3,987 | )      | 
|                                                                                       |  |        |        |   |        |  |        |        | 
|Cash flows provided by financing activities                                            |  |        |        |   |        |  |        |        | 
|Contributions from Teck Resources Ltd.                                                 |  |        | 5,306  |   |        |  | 2,085  |        | 
|Contributions from NovaGold Canada Inc.                                                |  |        | 1,876  |   |        |  | 2,085  |        | 
|Contributions from Newmont Galore Creek Holding Corp.                                  |  |        | 3,430  |   |        |  | –      |        | 
|                                                                                       |  |        | 10,612 |   |        |  | 4,170  |        | 
|                                                                                       |  |        |        |   |        |  |        |        | 
|Cash flows provided by investing activities                                            |  |        |        |   |        |  |        |        | 
|Additions to mineral property, plant and equipment                                     |  |        | (112   | ) |        |  | (123   | )      | 
|                                                                                       |  |        | (112   | ) |        |  | (123   | )      | 
|Net cash increase (decrease) for the year                                              |  |        | 2,323  |   |        |  | 60     |        | 
|Cash and cash equivalents at beginning of year                                         |  |        | 453    |   |        |  | 393    |        | 
|Cash and cash equivalents at end of year                                               |  |        | 2,776  |   |        |  | 453    |        | 



(See accompanying notes to financial statements)



4









Galore Creek Partnership

Notes to Financial Statements

For the Years Ended December 31,
2018, 2017 and 2016



(in Canadian dollars)



| | 1 | Nature of Operations and Economic Dependence
| | - | --------------------------------------------



The Galore Creek Partnership (“Partnership”) is a general partnership
formed under the laws of the Province of British Columbia on August 1, 2007 for the purposes of exploration, development and construction
of the Galore Creek mine. The Partnership was 50% owned by NovaGold Canada Inc. a wholly owned subsidiary of NOVAGOLD RESOURCES
INC. (“NovaGold”) and 50% owned by Teck Resources Limited (“Teck”). On July 27, 2018 NovaGold sold its
50% interest in the Partnership to Newmont Galore Creek Holding Corporation, a subsidiary of Newmont Mining Corporation (“Newmont”).
The Partnership owns 100% of Galore Creek Mining Corporation, which is the operator of the project.



The Partnership’s registered office is at 1600-925 West Georgia Street
Vancouver, British Columbia, Canada.



Upon formation of the Partnership, NovaGold contributed the Galore Creek project
and Teck committed to contribute cash. Teck completed its cash earn-in in 2011. During 2018, Newmont and Teck (collectively the
“Partners”) signed an Amended and Restated Partnership Agreement and are currently equally responsible for funding
the Partnership.



These financial statements have been prepared on the basis of accounting principles
applicable to a going concern, which assumes that the Partnership will be able to continue in operation for the foreseeable future
and will be able to realize its assets and discharge its liabilities in the normal course of business.



Currently, the Partnership is economically dependent upon its Partners, for
financial support and the Partnership has commitments from the Partners that it will receive support for the next 12 months. The
future recoverability of the Partnership’s mineral property, plant and equipment is dependent upon: the ability of the Partnership
to obtain continued support from the Partners or to obtain financing necessary to complete the development of its property, demonstrating
the existence of economically recoverable reserves, the securing and maintaining of title and beneficial interest in the properties,
and the future profitable production or proceeds from disposition of the mineral properties.



| | 2 | Basis of Preparation
| | - | --------------------



These annual financial statements have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).



These financial statements were prepared by management and approved by the
Partnership Management Committee on June 7, 2019.



These annual financial statements include the results of the Partnership and
its wholly owned subsidiary, Galore Creek Mining Corporation.



5


Galore Creek Partnership Notes to Financial Statements For the Years Ended December 31, 2018, 2017 and 2016






(in Canadian dollars)



| | 3 | New IFRS Pronouncements
| | - | -----------------------



New IFRS pronouncements
that have been issued but are not yet effective at the date of these financial statements are listed below. We plan to apply the
new standards or interpretations in the annual period for which they are first required.



Leases



In January 2016, the IASB issued IFRS 16, Leases (IFRS 16), which eliminates
the classification of leases as either operating or finance leases for a lessee. Under IFRS 16, substantially all leases will be
recorded on the balance sheet for the lessee. The only exemptions to this will be for leases that are 12 months or less in duration
or for leases of low-value assets. The requirement to record all leases on the balance sheet under IFRS 16 will increase “right-of-use”
assets and lease liabilities on an entity’s financial statements. IFRS 16 will also change the nature of expenses relating
to leases as the straight-line lease expense previously recognized for operating leases will be replaced with depreciation expense
for right-of-use assets and finance expense for lease liabilities. IFRS 16 includes an overall disclosure objective and requires
a company to disclose (a) information about lease assets and expenses and cash flows related to leases, (b) a maturity analysis
of lease liabilities, and (c) any additional company-specific information that is relevant to satisfying the disclosure objective.
IFRS 16 is effective from January 1, 2019.



As at December 31, 2018, the Partnership completed a review and analysis of
IFRS 16. Adoption of this guidance is not expected to materially increase the Company’s assets and liabilities.



| | 4 | Summary of Significant Accounting Policies
| | - | ------------------------------------------



The significant accounting policies used in the preparation of these financial
statements are as follows:



Mineral Property, Plant and Equipment



Plant and equipment is recorded at cost, being the purchase price and the directly
attributable costs to bring the assets to the location and condition necessary for it to be capable of operating in the manner
intended by the Partnership. Mobile road building equipment is depreciated over its estimated useful life of 3 years on a straight
line basis.



Exploration and evaluation costs



Exploration and evaluation costs are considered to be tangible assets, as
they relate to the Galore Creek property for which resources exist and it is expected that the expenditures can be recovered by
future exploitation or sale. These assets are not depreciated, as they are not currently available for use. When development is
approved, capitalized exploration and evaluation costs will be reclassified to development costs or capital work-in-progress within
property, plant and equipment.





6


Galore Creek Partnership Notes to Financial Statements For the Years Ended December 31, 2018, 2017 and 2016






(in Canadian dollars)



Exploration and evaluation
expenditures include property acquisition costs, engineering studies, drilling, survey work, capitalized construction costs relating
to the advancement of the Galore Creek Project, mobile equipment depreciation and other costs related to the evaluation of the
mineral resource. These costs will be transferred to work in progress once development is approved.



Mine development costs will be amortized on a unit-of production basis once
the asset is in the location and condition necessary for it to be capable of operating in the manner intended by the Partnership.
Mobile construction equipment was amortized to exploration and evaluation costs over the estimated useful life of the equipment.
The amortization of the equipment was capitalized, as the equipment was acquired for the development of the project.



Repairs and maintenance



Repairs and maintenance costs are charged to expense as incurred, except when
these repairs significantly extend the life of an asset or result in an operating improvement. In these instances the portion of
these repairs relating to the betterment is capitalized as part of plant and equipment.



Impairment of tangible assets



The carrying amounts of non-current assets are reviewed for impairment whenever
facts and circumstances suggest that the carrying amounts may not be recoverable. For exploration & evaluation assets, impairment
indicators specific to exploration and evaluation assets are assessed. If there are indicators of impairment, the recoverable amount
of the asset is estimated in order to determine the extent of any impairment. Where the asset does not generate cash flows that
are independent from other assets, the recoverable amount of the cash generating unit (“CGU”) to which the asset belongs
is determined. The recoverable amount of an asset or CGU is determined as the higher of its fair value less cost to sell and its
value in use. An impairment loss exists if the asset’s or CGU’s carrying amount exceeds the recoverable amount.



Value in use is determined as the present value of the future cash flows expected
to be derived from an asset or CGU. The estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the CGU for which estimates
of future cash flows have not been adjusted. Fair value less cost to sell is the amount obtainable from the sale of an asset or
CGU in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal. For mining assets,
fair value less cost to sell is often estimated using a discounted cash flow approach as a fair value from an active market or
binding sale agreement is not readily available. Estimated future cash flows are calculated using estimated future prices, mineral
reserves and resources, operating and capital costs. All assumptions used are those that an independent market participant would
consider appropriate.



Provisions



Decommissioning and restoration provisions



Future obligations to retire an asset, including dismantling, remediation
and ongoing treatment and monitoring of the site related to normal operations are initially recognized and recorded as a provision
based on estimated future cash flows. The decommissioning and restoration provision (“DRP”) is adjusted at each reporting
period for changes to factors including the expected amount of cash flows required to discharge the liability, the timing of such
cash flows and the discount rate.





7


Galore Creek Partnership Notes to Financial Statements For the Years Ended December 31, 2018, 2017 and 2016




(in Canadian dollars)



The DRP will be accreted to full value over time through periodic charges
to earnings. This unwinding of the discount will be charged to financing expense in the statement of loss and comprehensive loss.



The amount of the DRP initially recognized is capitalized as part of the related
asset’s carrying value and amortized to earnings once production commences. The method of amortization follows that of the
underlying asset. The costs related to a DRP are only capitalized to the extent that the amount meets the definition of an asset
and can bring about future economic benefit. A revision in estimates or a new disturbance will result in an adjustment to the provision
with an offsetting adjustment to the capitalized retirement cost.



Other provisions



Provisions are recognized when a present legal or constructive obligation
exists, as a result of past events, and it is probable that an outflow of resources that can be reliably estimated will be required
to settle the obligation. Where the effect is material, the provision is discounted using an appropriate current market-based pre-tax
discount rate.



Financial Instruments



The Partnership adopted the requirements of IFRS 9 Financial Instruments (IFRS
9) as of January 1, 2018. The adoption of IFRS 9 had no impact on the classification or measurement of any of the Partnership’s
financial instruments at the date of adoption.



IFRS 9 requires financial assets to be classified into three measurement categories
on initial recognition: those measured at fair value through profit and loss, those measured at fair value through other comprehensive
income, and those measured at amortized cost. Investments in equity instruments are required to be measured by default at fair
value through profit or loss. However, there is an irrevocable option to present fair value changes in other comprehensive income.
The Partnership does not have any financial instruments that are classified as fair value through other comprehensive income (loss).



Measurement and classification of financial assets is dependent on the Partnership’s
business model for managing the financial assets and the contractual cash flow characteristics of the financial asset. Financial
liabilities are measured at amortized cost, unless they are required to be measured at fair value through profit and loss (such
as instruments held for trading or derivatives) or the Partnership has opted to measure them at fair value through profit and loss.



Cash and cash equivalents



Cash and cash equivalents consist of cash on deposit with banks and highly
liquid short-term interest-bearing investments with maturities of 90 days or less from the original date of acquisition. Cash and
cash equivalents are classified at amortized cost.



Due from / (to) Partners



The amounts due from / (to) Partners are non-interest bearing, unsecured and
without specified terms of repayment. Due from / (to) Partners balances are classified at amortized cost.





8


Galore Creek Partnership Notes to Financial Statements For the Years Ended December 31, 2018, 2017 and 2016






(in Canadian dollars)



Receivables and payables



Receivables and payables are classified as loans and receivables. Loans and
receivables are initially recorded at fair value with subsequent measurement at amortized cost.



Reclamation bonds



The Partnership’s reclamation bonds are carried at amortized cost and
bear fixed interest rates.



Due to Partners



The amount due to Partners is a non-interest bearing payable and is recorded
at amortized cost.



Income Taxes



The Partnership is not a taxable entity for federal and provincial income tax
purposes. Accordingly, no recognition is given to income taxes for financial reporting purposes. Tax on the Partnership’s
net income (loss) is borne by the Partners through the allocation of taxable income (loss). Net income for financial statement
purposes may differ significantly from taxable income for the Partners as a result of differences between the tax basis and financial
reporting basis of assets and liabilities and the taxable income allocation requirements under the Amended and Restated Galore
Creek Partnership Agreement.



| | 5 | Critical Accounting Estimates and Judgments
| | - | -------------------------------------------



In preparing these financial
statements, the Partnership makes estimates and judgements that affect the amounts recorded. Actual results could differ from those
estimates. The estimates and judgements are based on historical experience and other factors the Partnership considers to be reasonable,
including expectations of future events. The estimates and assumptions that could result in a material impact to the carrying amounts
of assets and liabilities are outlined below.



Exploration and Evaluation expenditure



The application of the Company’s accounting policy for exploration and
evaluation expenditures requires judgement in the following areas:



| | (i) | Determination of whether any impairment indicators exist at each reporting date giving consideration to factors such as budgeted
expenditures on the Galore Creek Property, assessment of the right to explore in the specific area and evaluation of any project
specific and market data which would indicate that the carrying amount of exploration and evaluation assets is not recoverable;
and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Assessing when the commercial viability and technical feasibility of the project has been determined, at which point the asset
is reclassified to property and equipment.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------





9


Galore Creek Partnership Notes to Financial Statements For the Years Ended December 31, 2018, 2017 and 2016








(in Canadian dollars)



During 2018, management of the Partnership concluded that an impairment indicator
existed as the transaction between NovaGold and Newmont indicated that the carrying amount of the Galore Creek Property may not
be recovered from successful development or sale. As a result, a test of the recoverable amount was performed based on a fair value
less cost to dispose. The test concluded that the recoverable amount was greater than the carrying value of Mineral Property, Plant
and Equipment, and therefore no impairment was recorded. The estimated fair value less cost to dispose was calculated on a market-based
approach using the information from the recently completed transaction between NovaGold and Newmont adjusted to estimate the fair
value less cost to dispose of the Mineral Property, Plant and Equipment. The market-based approach included a control premium assumption
subject to estimation uncertainty. The control premium assumption of 30% represents the estimated premium a market participant
would pay for a 100% controlling interest in the Galore Creek Property. Management of the Partnership performed a sensitivity analysis
on this assumption keeping all other assumptions constant and concluded that a negative change in the control premium assumption
to below 22% would result in an impairment.



Decommissioning and Restoration Provisions



The DRP is based on cost estimates using information available at the balance
sheet date. The DRP requires other significant estimates and assumptions such as: requirements of the relevant legal and regulatory
framework, and the timing, extent and costs of required decommissioning and restoration activities. To the extent the actual costs
differ from these estimates, adjustments will be recorded.



| | 6 | Mineral Property, Plant and Equipment
| | - | -------------------------------------



(in thousands of Canadian
dollars)



|                         |  | Exploration
 and
 Evaluation $ |         |  | Mobile
 Construction
 Equipment $ |  |         | Total $ | 
|------------------------ |  | ------------------------------ | ------- |  | --------------------------------- |  | ------- | ------- | 
|Cost                     |  |                                |         |  |                                   |  |         |         | 
|At December 31, 2016     |  |                                | 706,250 |  |                                   |  | 32,772  |         | 
|Additions                |  |                                | 328     |  |                                   |  | –       |         | 
|At December 31, 2017     |  |                                | 706,578 |  |                                   |  | 32,772  |         | 
|Additions                |  |                                | 365     |  |                                   |  | –       |         | 
|At December 31, 2018     |  |                                | 706,943 |  |                                   |  | 32,772  |         | 
|                         |  |                                |         |  |                                   |  |         |         | 
|Accumulated Depreciation |  |                                |         |  |                                   |  |         |         | 
|At December 31, 2016     |  |                                | –       |  |                                   |  | (32,772 | )       | 
|At December 31, 2017     |  |                                | –       |  |                                   |  | (32,772 | )       | 
|At December 31, 2018     |  |                                | –       |  |                                   |  | (32,772 | )       | 
|                         |  |                                |         |  |                                   |  |         |         | 
|Net Book Value           |  |                                |         |  |                                   |  |         |         | 
|At December 31, 2016     |  |                                | 706,250 |  |                                   |  | –       |         | 
|At December 31, 2017     |  |                                | 706,578 |  |                                   |  | –       |         | 
|At December 31, 2018     |  |                                | 706,943 |  |                                   |  | –       |         | 







10


Galore Creek Partnership Notes to Financial Statements For the Years Ended December 31, 2018, 2017 and 2016




(in Canadian dollars)



| | 7 | Decommissioning and Restoration Provision
| | - | -----------------------------------------



| | a) | Reclamation provision
| | -- | ---------------------



Although the ultimate amount of the reclamation costs to
be incurred cannot be predicted with certainty, the total undiscounted amount of estimated cash flows required to settle the Partnership’s
estimated obligations is $15.5 million. Significant reclamation and closure activities include land rehabilitation, decommissioning
of roads, bridges, buildings and facilities at the project site.



The reclamation liabilities may be subject to change based
on changes in management’s estimates, changes in remediation technology or changes to the applicable laws and regulations.



(in thousands of Canadian dollars)



|                   |  | 2018 $ |        |  | 2017
$ | 
|------------------ |  | ------ | ------ |  | ------ | 
|Opening balance    |  |        | 15,252 |  |        | 
|Change in estimate |  |        | 253    |  |        | 
|Closing balance    |  |        | 15,505 |  |        | 



| | b) | Reclamation bonds
| | -- | -----------------



Each of the Partners has provided collateral for their 50% share of reclamation
bonds and letters of credit covering the required permits.



At December 31, 2018 Newmont assumed $4.5 million previously funded by NovaGold
for its share in respect of the BC Ministry of Forests and Range Special Use Permit (“Forestry Act Permit”), through
the Partnership. The $4.5 million loan related to the funding of these reclamation bonds will be repaid to Newmont once the reclamation
bond in respect of the Forestry Act Permit is released back to the Partnership.



11


Galore Creek Partnership Notes to Financial Statements For the Years Ended December 31, 2018, 2017 and 2016






(in Canadian dollars)



| | 8 | Expenses by Nature
| | - | ------------------



(in thousands of Canadian dollars)



|                                     |  | 2018 $ |       |  | 2017 $ |  |       | 2016
$ | 
|------------------------------------ |  | ------ | ----- |  | ------ |  | ----- | ------ | 
|Community and stakeholder engagement |  |        | 481   |  |        |  | 581   |        | 
|Drillcore maintenance                |  |        | 262   |  |        |  | 352   |        | 
|Environmental maintenance            |  |        | 1,815 |  |        |  | 589   |        | 
|Fuel and energy                      |  |        | 526   |  |        |  | 72    |        | 
|Insurance and property tax           |  |        | 68    |  |        |  | 100   |        | 
|Maintenance and repair               |  |        | 1,701 |  |        |  | 1,029 |        | 
|Office rent and support              |  |        | 816   |  |        |  | 389   |        | 
|Salaries and employee benefits       |  |        | 1,432 |  |        |  | 645   |        | 
|Travel and transportation            |  |        | 1,984 |  |        |  | 653   |        | 
|Total care and maintenance costs     |  |        | 9,085 |  |        |  | 4,410 |        | 



| | 9 | Commitments and Contingencies
| | - | -----------------------------



| | a) | Lease commitments
| | -- | -----------------



The Partnership is party to certain leases. These leases include the Partnership’s
leased office location and certain office equipment with commitments ranging from one to three years. The future minimum lease
payments as at December 31, 2018 are as follows:



(in thousands of Canadian dollars)



| |      |  |  |  | $   | 
| | ---- |  |  |  | --- | 
| | 2019 |  |  |  | 238 | 
| | 2020 |  |  |  | 265 | 
| | 2021 |  |  |  | 265 | 



| | b) | The Partnership has a royalty agreement entitling the counterparty to a maximum annual net smelter royalty of between 0.5%
to 1.0%. The royalty is subject to positive future operating mine cash flow and is contingent upon reaching certain agreed financial
targets.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10 | Related Party Transactions
| | -- | --------------------------



| | a) | Management services
| | -- | -------------------



During the period ended December 31, 2018, management services were provided
to the Partnership as follows: Newmont, $nil (2017 - $nil; 2016 - $nil); NovaGold, $nil (2017 - $219,111; 2016 - $459,601) and
Teck $1,505,369 (2017 - $937,509; 2016 - $449,940).





12


Galore Creek Partnership Notes to Financial Statements For the Years Ended December 31, 2018, 2017 and 2016






(in Canadian dollars)



| | b) | Due to Partners
| | -- | ---------------



As at December 31, 2018 the Partnership owed $935,845 (2017 - $899,182) to
Teck for management services and expenses paid on the Partnership’s behalf.



In addition, the Partnership was owed $6,000 (2017 - $nil) by Newmont for
the 40% share of an advance royalty payment and $12,965 (2017 - $14,079) by Teck subsidiaries for management services provided
to other Teck projects by staff of the Partnership.



The Partnership owed $4.5 million (2017 - $nil) to Newmont and $nil (2017
- $4.5 million) to NovaGold in respect of its funding of reclamation bonds held in the Partnership.



| | 11 | Financial Instruments
| | -- | ---------------------



Financial assets are comprised of cash and cash equivalents and reclamation
bonds. Cash and cash equivalents and reclamation bonds are held with Canadian chartered banks.



Financial liabilities are comprised of accounts payable and accrued liabilities,
and amounts due to partners. All financial liabilities are due within 30 days except the amounts due to Newmont related to the
reclamation bonds held in the Partnership.



The Partnership is not subject to material market risk
on any of its financial instruments.



The fair value of the Partnership’s receivables, accounts payable and
amounts due from / (to) partners approximate their carrying values at December 31, 2018 due to their short-term nature. Reclamation
deposits are interest-bearing deposits and approximate fair value. These deposits effectively secure the amount due to Newmont.













13