Q2 2021 NovaGold Resources Inc Earnings Call
Welcome to the Nova Golda second quarter financial results conference call and webcast.
As a reminder, all participants I didn't listen only mode and the conference is being recorded.
After the presentation, there will be an opportunity to ask questions.
To join the question queue you May Press Star then 1 on your telephone keypad.
Should you need assistance during the conference call you may see it got an operator by pressing star and zero.
I would now like to turn the conference over to Melanie Hennessey, Vice President Corporate Communications. Please go ahead.
Thank you Claudia good morning, everyone. We are pleased you have joined US for our novel Gold's 2021 second quarter financial results and also for an update on the Donlin Gold project.
On today's call we have Dr. Thomas Kaplan Nava golf Sherman.
And David Ottawa, low the Gold's, Vice President and CFO.
At the end of the webcast, we will take questions both by phone and bypass. Additionally, we will respond to questions received by email.
I would like to remind our webcast and call participants that as stated on slide 3 any statements made today may contain forward looking information such as projections and goals, which are likely to involve risks detailed in our various Edgar and SEDAR filings and Gordon looking disclaimers will keep moving.
On vacation.
I now have the pleasure of turning the presentation over to our chairman Dr. Thomas Kaplan Hum.
Thank you Melanie.
And good morning, everyone, Greg sends his regrets.
As you've had a family emergency to attend to them and we'll be back in the office in several days.
Jack.
In the west the Greek payable.
Slide 4.
The joint venture partnership with <unk>.
Krish that mining is an important part of the Alaskan economy, and becoming even more important to state revenues unemployment as shown on the map there are 6 producing mines and numerous development.
Development stage.
State mining industry employees can be found in most communities large for small.
In terms of scale quality and exploration potential donlin gold's attributes far exceed any other gold development project globally, when combined with our longstanding Native corporation partnerships the exponential.
Gold price, a strong cash position with key federal and state permits and an experienced management team and board.
Supportive share.
<unk> is in an enviable among them.
Gold development project.
No for gold is committed to responsible mining stewardship of the environment and adding value to the communities in which we operate we believe that mine can be developed in collaboration with people who've had the local knowledge to help minimize environmental impact.
While providing maximum benefits to all stakeholders, Nova gold has approached the disclosure of our environment, social and governance ESG performance pragmatically as a development stage company disclosing benchmarks, we believe for the most relevant measure.
So how much.
And the power inaugural sustainability summary report earlier this year was the latest step in our progression of.
Our selection of the measurements of performance can be on losses.
Hi, Bob.
And.
No.
Highest possible standards for our workforce performance actions and conduct at Donlin Gold. These principles are passed onto our workforce as they receive training and experience to develop skills that will help them today as well as in the future.
1 drill program at Donlin Gold has direct hires with 70% Alaska natives employees from 20 different villages in the Y K region as presented by the Blue dots on the slide 6 map.
Chip is integral to our corporate culture Novo supports the donlin gold team and their outreach and site work to make a positive difference in the Alaskan communities from the White K region Slide 7 shows net.
Activities like the Rainbow smelt larva studies.
The buckets to improve hygiene.
Material sales for us.
Provide protected.
COVID-19 pandemic.
Careful collaboration with our native partners, Calista, and Teekay C as well as other tribal groups in the Waikiki regions. Since 'twenty 'twenty has been key to successfully operating at site with zero Coke.
Zero, while the COVID-19 pandemic is a lower risk than a year ago, Nova Golden Donlin Gold's have continued adhering to policies to reduce risk and ensure the safety and wellbeing of all employees and contractors Donlin gold stringent measures as outlined on slide 8 allowed donlin gold to safely.
We operate for their Twenty-twenty drill program, which we are continuing for the 2021 drill season.
Underlining Nova golds in barrick's commitment for the subject.
Partners had approximately $2 million to your peers and a leading gold project site, including a larger kitchen facility upgrades to electrical supply a new warehouse and upgrades to the core logging and cutting facilities and equipment. Some of this investment can be seen in the photos on.
Slide 9.
The Donlin Gold project can was reopened in March and for drill rigs were deployed for the <unk> 'twenty 'twenty, 1 drill program slide 10 shows drilling as well as cord cutting and inspection that occurred earlier. This month you can also see on the bottom left an aerial photo of the project site.
<unk>.
As of June 26.
On a poll.
Keep for planned this represents over 40% of the 20000.
100 metres planned in this campaign initial assay results are expected later this summer as you can see in the map on slide 11.
Get it in the asthma and Louis pit areas and its being performed to verify geologic modeling concept and further tests or body continuity and structural control and test for extensions of high grade zones in both intrusive and sedimentary rocks. Once we have completed the 'twenty 'twenty, 1 drill program and geologic model updates.
Corporate's old the latest drill data optimization work and trade off studies. Since 2011. This will provide the necessary information to support a decision to move to the upcoming feasibility study subject to a formal decision by the Donlin Board L. L C.
With all federal in most key states.
Donlin Gold's continued to successfully advance remaining state permits, including water rights and the natural gas pipeline right way to right of way with the support of Alaska Native partners Calista and T. K C.
The Alaska depart the net.
As expected.
Through water rights applications for Donlin gold related to local surface water and groundwater sources this year.
Additionally, a D N ours division of oil and gas is also expected to reissue the state right of way agreements and lease authorization this year.
On May 27, the Alaska Department of Environmental Conservation Commissioner upheld the state of Alaska. This section for O..1 certification under the clean water Act that had been granted to Donlin gold and 2018 after a thorough diligence and transparent review by state and federal agencies of the proposed <unk>.
Project development plan and its relationship with the surrounding environment. This is a permit that donlin gold has held since August 2018 on June 28th first job channel.
This law firm on behalf of O N C. The tribal council for vessel a village in the Yukon Kuskokwim region.
Gil.
CT gold.
Overall strong.
Commission decision to uphold the for O..1 certification validates the project stakeholders commitment to advance the Donlin gold project in a safe and environmentally responsible manner for the benefit of all alaskans.
All great ore bodies go to Appeals and litigation there is never been 1 without 1 over a 6 year period Donlin Gold's conducted an extensive transparent and independently reviewed scientific evaluation that included significant community participation and scrutiny and consistently demonstrated.
The project fully complies with the clean water Act, the Alaska water quality standards and patient analysis.
State and federal laws the process culminated with the issuance of the for 1 certification.
2018, the 401 certification clearly demonstrates that the project.
In regards of environment.
Most by the state of Alaska, and the appropriate agencies of the federal government of the United States. We remain entirely enthusiastic about the future of Donlin golds tier 1 bode well for them in.
And look forward to continuing our constructive engagement.
With all the appropriate federal and state agencies in Alaska.
That welcomes responsible resource development that enriches the lives of all its residents.
To meet reporting requirements, Nova Gold retained Wood, Canada Ltd. In 2020 to perform a detailed review of cost and other assumptions used in the previously filed 2011 technical report.
The 'twenty 'twenty, 1 technical report utilizes the existing mineral resources model and the same technical information from the previous Donlin Gold 2011 Technical report with Twenty-twenty cost and adjusted both price. This report results in no material change to the mineral resources or mineral reserves.
As stated earlier in the presentation. The 'twenty 'twenty 1 donlin both technical report is separate from the upcoming feasibility study that we expect will commence once we've completed the 'twenty 'twenty 1 drill program in the geologic model update subjective Donlin gold LLC Board approval.
Donlin gold is committed to support the needs of its community partners and second quarter community engagement highlights can be seen on slide 14.
In April Donlin gold was a major sponsor of the lower caustic when school districts and you will college and career fair held virtually more vendors participated this year and approximately 100 students attended.
Nova Golden Donlin Gold made significant contributions for the Thomas La <unk> Creek. After a fire funds were used to repair this critical asset prior to the busy summer season.
To date Donlin Gold LLC has signed 7 shared values statements with villages in the Yukon Kuskokwim region. The formalized current engagement with local communities. These engagements expand upon the long term relationships already established with these communities and address specific community needs such as water sewer.
Sure and landfill projects Salmon studies and suicide prevention programs, Nova Gold also sponsored and participated in the mining Inc. For me.
I throw in May our fundraising event in support of the BC Childrens hospital located in Vancouver, British Columbia as you can see from the photo on the bottom right, our very own Greg Lang for the Pi for this worthy cause thank you Greg.
Donlin gold operates pursuant to the terms of a sub surface minerals and surface land lease with Calista Corporation and a surface land use agreement with the customer <unk> Corporation Teekay see the Donlin Gold project is being developed.
And that was selected by Calista and Teekay C. At the direction of Waikiki region elders in the 19 seventies when land considered valuable for resource potential with selected and resource development companies were invited by the native corporations to explore.
We support for Lister in Teekay. She mandates through the 1971, Alaska Native claims settlement Act, Inc. Stuff as highlighted on slide 15 to help them develop their land for the economic benefit of the region and all stakeholders involved we are thankful for the long term support and commitment to the project.
<unk> by the Alaska Native corporations, they play a key role in its continued success.
In the second quarter. The first statistics community Advisory Committee was launched.
S T. A C is a subcommittee of the Donlin.
Review Committee.
To lift our TK C and Donlin gold initiated planning to establish this committee in 2018. The committees objective is to establish and maintain a well defined process for communication dialogue and problem solving needed. Among the partners. The committee is made up of diverse people from the region to provide it.
Information about local subsistence activities and traditional knowledge as it relates to the Donlin Gold project.
The S. T. A C Committee provides a forum for stakeholders to discuss issues of concern related to Donlin, Gold's plans operations or monitoring activities and their potential impact on subsistence activities wildlife habitat.
Our recommendations related to subsistence will be made for the committee and assist them in developing and periodically updating of subsistence plan for lands and waters affected by the Donlin Gold project.
These partnerships activities and programs demonstrate Nova goldson, Barrick longstanding and deep rooted commitment to sustainable and responsible development for the benefit of all stakeholders in the Y K region.
I will now pass it over to David <unk>, our CFO, who will cover the financial results for the second quarter Dave.
Thank you Tom.
Slide 17 highlights our second quarter operating performance.
We reported a net loss of $10.5 million in the quarter.
An increase of $3.3 million from the prior year quarter, primarily due to foreign exchange movements, resulting from the strengthening Canadian dollar and lower interest income earned on cash and term deposits.
Also contributing to the increase were higher share based compensation and legal costs.
On a full quarter of activity at the Donlin camp this year compared to last year's temporary pause due to COVID-19 precautions.
Second quarter cash flows are highlighted on slide 18.
We spent $6.6 million in the second quarter slightly higher than the prior year quarter.
I heard Donlin gold funding and G&A spending was offset by foreign exchange movements on our Canadian dollar denominated cash and a reduction in working capital.
We ended the quarter with cash and term deposits of $107.6 million.
On slide 19, we note a robust treasury.
In addition to our cash and term deposits. We also have $75 million due from Newmont X month with an additional $25 million due in July 2023.
We continue to anticipate spending $31 million to $35 million share.
Call it $18 million to $22 million to fund our share of Donlin.
And 13 million for corporate G&A costs.
I will now turn the call back over to our chairman Thomas capsule.
Thank you very much day.
We all recognize that donlin gold already enjoys an incredible foundation of attributes to build upon and that is the project expected mine life may already be measured in decades, we have a great responsibility to all stakeholders to do things.
Right from the start and not cut any corners with approximately 39 million ounces of gold in measured and indicated mineral resources when compared to the 15 comparable large gold projects in the Americas as shown on slide 20, Donlin gold is the largest in its category with a resource that is 4 times greater than the average.
<unk>.
The scale of Donlin gold combined with its quality its grade at 224 grams, a tonne as shown on slide 21 at twice the global average.
Large open pit.
It exceptional.
As currently envisioned the project would average 1.1 million ounces per year for the life of mine as shown on slide 22 Donlin.
Donlin golds production profile far exceeds the average of north and South American peers on this slide.
Global Gold production continues to decrease for most of the major producers further illustrating that the industry desperately needs projects with scale raid and longevity.
And then of course, there's more than this donlin gold is indeed unique in its combination of all of the attributes that we've cited and then some particularly given the scarcity of new major gold discoveries over the past decade, and the shape jure.
Stiction in which it's located Alaska, a tier 1 jurisdiction.
The 3 mining operations produced more than 1 million ounces from 2020 as shown in Peel and slide 23, looking at comparable scale mining operations around the world. Both in production and then development Donlin would rank among the top operations. If it was in production today.
It also shows the top 5 largest development stage gold projects in dark Blue Donlin is in Gulf looking.
Looking globally Theres only 1 development project that has both scale and a desirable mining jurisdiction.
Donlin.
While we're focused on the drill program permitting and modeling work, we haven't lost sight of 1 of the projects most important attributes donlin gold's truly exceptional exploration potential the project Golden Downwind is contained within only 3 kilometers of an 8 kilometer mineralized.
Felt as shown by the <unk> and Lewis pits shown and goals on slide 24, and the mineralized belt represents only 5 per cent of the total property.
And let's not forget that in all the past drill programs at Donlin gold we've encountered amongst the best assay results for an open pit gold project in the industry anywhere in the world.
Slide 25 represents for life of mine diagram for Donlin gold as 1 of the world's largest.
In developed Europe.
After years of exploration and resource enhancement technical studies to receipt of our federal record of decision and several state permit Donlin gold has been substantially derisked and methodically brought up the value chain.
The solid foundation from which to advance this rare and unique deposits.
Time invested upfront to develop responsibly and sustainably is critical to the project's success, we believe investors.
We'll be amply rewarded.
In 2021, we will complete the 'twenty 'twenty, 1 drill program and geologic model update incorporating all the latest drill data optimization work and tradeoff studies since 2011.
Then subject to a formal decision by the Donlin Gold board shift our focus for the upcoming feasibility study.
Deposits that boasts donlin golds special combination of incredible attributes are unusual and highly coveted.
And not just for investors given recent examples with governments around the world either physically or through legislation or other means effectively seizing assets. We are grateful that donlin gold is located in Alaska, where there is a time tested culture of respect for responsible and sustainable mine development and the rule of law.
We are confident that Nova gold with Barrick for listing Teekay C will advance this.
Unique about Texas.
Particularly it's Dave.
Don.
So for men.
Novo just thankful for the dedication engagement knowledge sharing and encouragement of our shareholders many of whom have been holders for a decade and are shown on slide 26, we're appreciative and humbled by the trust you put in our team and we take this responsibility very seriously.
We remain focused on maximizing returns and a measured safe and socially responsible manner to extremely important for all of US that you are proud of your investments as well as make money.
The attributes of Donlin are summarized again on slide 27, the uniqueness of the project, it's balanced robustness in key categories size grade jurisdiction partnerships exploration potential balance sheet.
Advanced stage of permitting a management team that has built and operated similar scale operations.
And then that's it.
Aligned with our strategy as we move Donlin gold up the value chain.
Thank you operator, we will now take questions from the participants.
Thank you Sir we will now begin the question and answer session to join the question queue. You May Press Star then 1 on your telephone keypad, you will hear a tone and knowledge in your request.
If youre using a speakerphone please pick up your handset before pressing any Keith.
Withdraw your question. Please press Star then 2.
We will pause for a moment as callers join the queue.
Our first question is from Lucas pipes with B Riley Securities. Please go ahead.
Thank you very much Inc.
Good morning, Tom and team Thomas it's great to hear your voice.
I wanted to first ask a higher level question and then.
Turn it over to the project.
Specifics, but but Tom it feels like the gold market is looking a bit for direction here and would appreciate your thoughts as to what is what is your outlook of where do you see the next catalyst.
I really appreciate your insights thank you.
Thank you Lucas great hearing your voice as well.
You know I don't really think it's really something of the gold market looking for direction I think it's more a function of gold doing what.
What we always say, which is the gold does with you least expect it to do.
When you least expect it to do it.
I think that what we're dealing with is a correction that once.
Out of the way is going to lead to new highs.
Ingalls I think that we'll see those go right through 2000.
Essentially what we're seeing not only in the gold market and some other markets as well youre seeing pull back.
That are accompanied by.
Some capitulation.
But if I had fresh dollars to put into the.
The market today.
Turning to gold and silver and particularly the equities that gives you the maximum exposure. So to me. This is part and parcel of what we're seeing overall in the markets.
Which is that.
People are having to come to terms with the fact that some things have changed and we are in unchartered waters..1 of the assets that you always want to have exposure to when we're in such a sea change.
Are the precious metals and the equities are as cheap.
As they've ever been.
They're a great volume.
Very helpful. Thanks, Thank you Tommy and on the feasibility study you mentioned you would.
Commenced Ah commenced at work wants to drill program is completed.
I wondered if you can provide an update.
Kind of how long it would take from there for the study to be completed.
And and and then obviously from there kind of what what the timeline could look like towards development. Thank you very much.
Yeah.
That's brilliant thank you so much Lucas.
Question, you know I'd, rather I'd, rather pivot this to Richard Williams.
Who is our project.
Manager for.
I used to say that Greg would normally be fielding that part of the question, but my understanding is that once we have the.
The drill data and the modeling done and once the decision by the Donlin Board.
We would go into updating the feasibility study.
And.
The logic there.
For the logical way for me to answer this is that at that time.
Both we and Barrick.
Would you view the timeline that we're looking for.
Scott did I, Bob and weave sufficiently for someone who's not trying to avoid the question, but wants to make sure that you get an accurate answer.
As they are as a pinch hitter.
Yeah No no that's it that's.
That's helpful.
Oh wait a minute wait a minute wait a minute.
Tom you instead of right I'm, sorry, Richard Williams.
Yes.
Very good.
You know it's my friend.
I'd just add you know Lucas, it's hard to put a timeline and Tom said it perfectly.
We're gonna get this drilling done we're going to do the the analysis and make sure. We've we've covered all of the risks and gaps or at least have a mitigation plan.
And you remember all the optimization and all of the trade offs, we've been doing well.
We will go through all those what survives what doesn't and then we have to develop a scope of work of what that updated feasibility our final feasibility their detailed whatever definition you wanted to put it.
Could you live in front of that feasibility because that's a key document as a stage gate for for that next decision to try to get to a construction.
Ultimate construction decision so as Tom said, we're going to pull all that together as a group and put out putting everything on the table. Once we have that scope defined than your scope defined your timeline and as Tom says, we will be happy to roll that out once we have all day.
All the pieces lined up.
Very helpful really while we appreciate that.
I'll I'll ask 1.1 other.
Slightly related question, it's it's it's a bit higher level again, but.
Tommy you speak to the declining production profile in the industry and I wondered.
If you are able to provide an update as it relates to the sense of urgency.
You're seeing we're sensing among the majors to replenish their production and development pipeline.
Appreciate your thoughts on that.
Well.
I think.
This is hubert.
If we're right in what's going on with gold that sense of urgency will become.
I think closer to panic, but it's not simply that it.
It's what's happening in terms of the jurisdictional risk is really I hate I hate to say it because at a certain point you know I became the pied Piper of the.
You know jurisdictional risks, but every week that goes by Youre looking at new jurisdictions, which are becoming an investable.
It's very hard if you're an investor and go for copper.
To look at countries, which are already talking about windfall profit taxes are.
And when you see that kind of thing happening in copper not just by the way in Africa, but also in the Americas amongst some of the senior producers and you see movement in.
In these countries towards outright socialist governments.
You realize that the mantra of location location location is there you have investors those investors don't want to see you putting new fresh dough.
In.
Countries that are going to cap their earnings potential.
And when you see things for that prism.
The natural concern that these mining companies have to replace their reserves and remember not just replace reserves, but also to do so in a way that is not dilutive to their overall grade because average grade is collapsed by half over the previous decade well.
Well now you're up to superimposed on that that all the other countries that you might have been thinking of assuming that you weren't listening to me and you know a few other <unk>.
Rmi is out there they're off limits.
And the implications that that has for gold for copper for.
Copper gold project et cetera.
People aren't going to put fresh dollars into jurisdictions that are basically saying.
If you build it we will come out.
And take it from you.
The field of Dreams, just doesn't work that way and if I'm right then what youre seeing in copper is definitely going to be shown to be in both I think I think goals.
For sure is going to be declared a strategic asset in many jurisdictions.
And you really just want to be in those handful of places where the rule of law still matters.
And again, what does that mean that means a project like donlin, which does not suffer from those issues of.
You know being accretive in reserves.
Everybody. It's it is accretive in terms of grades to practically everyone's open pit profile, but more than that it's been a jurisdiction that when you really want the fruits of the leverage instead of a legislature or Oh.
Credit government coming in and capping your gains. This 1 will allow you to keep the fruits of that.
Net leverage.
<unk> seen through that prism, how many stores do you have.
Kudos to Barrick they understand it.
They've seen what goes on all over the world They know that donlin.
<unk> is unique I mean, we call it the new Nevada, because in terms of its size and its quality.
Alaska, which is already the second largest gold producing state in the United States. After Nevada will Donlin is a flagship gold asset for the entire industry. The amount of of our gold assets that will produce over 1 million ounces around the world.
It's a unicorn, but the most important thing is that the unicorn is got to be placed per zentai coaching legislation otherwise the unicorn and per month.
Walt.
So you know I've completely mixing my metaphors, but youre going to allow me to indulge for myself, because I cannot exhorting people enough and I'm not talking my own book, it's because I've been there I know these places I've actually done really well in those places it over and over.
The E. R. You wants to be in places, where an investor a portfolio manager can tell us I see when I go to sleep at night, I know that what I thought I was going to wake up to is still there I still own it and there are no surprises.
That means the United States, Canada, Mexico, Australia.
I mean, a couple of other outliers you know your Finland.
But your thoughts there.
Youre going to have the worst of all problems for an investor getting the macro right.
And because youre right not just getting it right, but because youre right someone else comes along and says thank you very much for building it for me.
Other than that wildly enthusiastic about the emerging markets.
Yeah.
Got it.
It's always great. It's always great to hear your thoughts.
I really appreciated tend to you and the entire team continued best of luck.
Thank you very much Lucas. Thank you for all of your great questions and firm support we really appreciate it.
Our next question is from Trevor Turnbull with Scotiabank. Please go ahead.
Yes, Thank you and thank you for providing an opportunity to discuss the project update I'm sorry to hear about Greg's news I certainly wish him the best.
I appreciate you're going to have an updated technical report that will be forthcoming with all the details of the re costing exercise. However, I did also want to ask a couple of high level questions just on the operating and capital costs.
With respect to the reassessing the cost at Donlin I was wondering if there were any major surprises or if you could comment perhaps on some of the big items like labor rate trends and if there were any material changes in the re costing for say fuel price assumptions.
Richard.
You want me to take that time I don't think so yes.
I'd love for that.
Yeah.
Trevor Yeah. It it you know.
It was a good exercise it's been 10 years so for.
The 2011.
Technical report and.
So it was a good opportunity to 1 look at a lot of the permitting.
Activity and see if there was any major changes, which they weren't but we were able to.
Bring in new costs, which now we aren't asked isn't it. So much is real now as we're getting permits but no no material change it it's just more surety.
And then you touched on some good points.
When we looked at our fuel.
Typically with the diesel and oil prices.
Since we.
For the months, we've been working on this update but.
When the 2011 for instance, we had $85 barrel oil and we use 65 than theirs and these updated numbers, which isn't far off where we are today.
And so actually we saw a decrease in power.
Cost because natural gas is also tied.
Tied to the oil price.
And so something like processing costs actually at or slightly better.
Due to net energy reduction.
Labor cost that you touched on the good 1 probably 1 of the steady thing we did see throughout the day.
The past 10 years and and throughout all our cost is labor, it's gone up and I don't think that that's a surprise.
But again nothing that Earth shattering, there and I think Trevor where you can take from these numbers is although they've gone up so has the gold price.
And so.
1 of the things we were trying to check and it's the same thing we check back in 2008. When we were doing projects is when does the gold price have a steeper incline.
Rising commodity for building and and so what we saw.
And you'll see it in the detailed report is we.
We track well right so with the higher gold price offset some of those higher labor costs in some of the other commodity costs I think overall, you know Tony show about a 10% capital increase on a project of this size.
That was a pleasant.
Pleasant surprises net debt.
They weren't more and and again, we use from CPI index is at some places, but we did go out for quotes a lot of the major equipment to.
To make sure that.
So yes.
Tool up so so overall there was no step change and as we reported.
Really good news is when we look at these new operating costs per ran some optimized pits.
And he told me 11 pitch switches is why the Q piece, we're comfortable signing off to no material change so.
I think it is.
<unk> supports the robustness and again just highlights.
The magnitude and the value of this asset.
Right.
No that helps a lot. Thank you I had a similar question about the initial capital cost. So I'm just wondering again, if there were any large swings in the estimates are surprises that just were unexpected to you and then also if you could talk a little bit about if there was a different.
Between say the initial costs on the mine versus the utilities and the and the pipeline project. If it from 1 showed more or less a change relative to because you provided an overall number but but didn't break it down and I was just curious if you're from 1 element has had more of a change than the other.
Yeah No. That's that's a that's a fair question a good question and something we were trying to watch to see where the trend is growing which we also would then relate back to some of the optimization work, we've been doing but we didn't really see any 1.
Aerie grossly spike kind of control what was good again good news.
Had some pluses you had some minuses.
There were a few pieces of the mining equipment that Oh, yeah.
That little bit shocking, how they had maybe double that price, but then other other mining equipment.
And most of the.
Not just large capacity equipment with the large number of equipment did not so you know overall, we didn't see a substantial rise but yeah. It was it was a little curious on just a few pieces of equipment and then when you got into the process I think.
Again, nothing mills, and flotation equipment and novel claims and all of that seem to be.
Pretty pretty well all in line.
No no major spike in 1 area and then other which again that was a good trend to see 1 thing. We've tried to do was to make sure. We did not because we were on the front end Q1.2020 were in the Permian we didn't want.
Any COVID-19 related costs.
Good or bad to 2 impact from we wanted more of a you know what.
Neutral thing and so there were some areas, where we could have used a lot lower prices say in piping material that we opted not to at this time.
But the time comes that we're ready to actually purchased that will take advantage of those things, but again, we wanted to be a fair level as we could with persist exercise knowing that this is just the launching pad.
For the into the final feasibility update so yeah, I would say overall travel we did not see any 1 area that just locked our eyes out and.
So overall net I think that's a good trend is that.
So you'll see you'll see the ups and downs.
It's all about the sales throughout all the disciplines, even like I said even in the.
And the infrastructure.
We seem to have held pretty good pretty good ground there so.
Pleased in that sense.
Well, that's great yeah, looking at kind of the overall numbers on both Opex and Capex it didn't seem like that big a change and.
That certainly would make you think that there weren't there no big outline elements within it I appreciate the color and look forward to finding out.
When you guys are looking at the feasibility study when that decision comes but thank you very much.
You bet. Thank you Kurt.
Our next question.
And our next question is from John Tumazos with John Tumazos very independent research. Please go ahead.
Thank you.
In regards to Greg I'll well wishes.
Hmm.
Sure there were some really nice trolls release for confirmatory drill holes.
Does no material change in our reserves and resources.
I mean that it might've had a 1 or 2 million ounce improvement that's immaterial because sure.
So well endowed with so many ounces of gold.
Or were those holes just twinning other good holes or were there some.
Holes that were below average mixed in so there was not a material change.
Okay.
So Tom I can address that 1 too.
Sure.
So John.
Yes, that's good.
Good good observation so with with this verification of no material change we did not go into obviously, all the new data and run a whole new resource with these kids piece, what we did though is take the 'twenty to 2020.17 drill holes and.
<unk> looked at those peer scenes into the old 2011 geologic and resource model.
And look.
Spot check that there wasn't a major.
Material change or variation, so youre right I mean, when we get this last drilling done and when we do a another full update on that resource.
Yeah.
It's not I don't think we were gonna see anything material right.
Again, we're just spot checking at this stage, we will have a better handle on that when we finish the work.
Hum.
As we said last year those are all good news.
Holes, but they were targeted holes and they and it was a small population to be overall.
And we just got to finish the work day to give you the what the big picture looks like.
Where last year's holes.
Targeting what is likely to be the first.
Several years of the mining sequence it's common.
For lenders or credit investors to ask about the first few years 1 day.
Do due diligence on a project and often the twin goals for the euro for years.
Right. So so John day, the targeted holes, where we're more looking at concepts and extensions and could we.
Looking for some continuity and piece them together, we have a high grade up here can we tie that high grade we have down there together and do that.
Does it fill in between so it wasn't necessarily.
Designed to look at just the early pitch, but what I will comment is we we keep track of ones that do peers say that first 10 million ounce pit versus the the big that's the time 1200 dollar resource pit.
Just to see how we're tracking and and I think it's pretty clear that with our with this the positive and the drilling that's been done over the last.
10, 12, whatever 20 years.
That that I'll call. It the starter pit if you will.
Is obviously more densely drilled and we have.
More.
Understanding of it than we do the some of the other areas and so that that can be used as you said for that due diligence to make sure that.
And I think you've heard others say, it's a 30 year project, but we wanted to make sure. Those first 10 years of pretty rock solid cause that should pay back and I think that is what you're moving to.
Thank you very much.
Yeah.
This concludes the question and answer session I would like to turn the conference back over to Thomas Kaplan for any closing remarks.
Thank you very much Claudia.
First of all thank you.
2 Lucas driver John for your questions.
And your well wishes to Greg, which obviously would be conveyed I want to also thank Dave <unk>.
For his contribution.
Yeah that a robust balance sheet and he's doing a great job with it.
And Richard Williams for stepping in.
And making sure that I'm not too far over my own skis in and talking about things, where we're fortunate to have him.
Yeah.
I joined right after building the very successful with low vehicle mine, which.
Which is pretty similar in in scale.
To Donlin and I remember when Richard joined Us and Victor.
Victor Flores then it falls for Nash, Richard why did you come to de Novo and Richard said.
Because I want to be part of building the greatest gold mine in the world.
For reasons, which I think that we've.
Tried to convey.
We really believe that donlin is.
A unicorn.
Whatever superlative as you want to put on some things.
When is.
That review.
Size and safety.
And costs and all those other things really is unique.
And in a world in which almost every week another jurisdiction goes by the wayside and location location location becomes the primary gating point for.
An investor.
I think it's fair to say that.
No for gold as a pure play.
Nevada for next Carlin, However, you want to look at it.
Is a really great investor vehicle and I also wanted to take a moment to thank our partners at Barrick.
Because this is truly a joint venture.
We are 50.50, but more than that.
And they work really really.
Once again.
I think mark for <unk>.
And Kathryn.
I mean North America.
Net.
Your tone.
As I like to rib, Mark who's been a dear Dear friends for many many years I'd say the reason why we get along so well with Barrick is because nobody goes has more Eric DNA and it's in Barrick.
And it's a it's a joke, but it's also a testament to the fact that our teams worked very seamlessly because pretty much everyone has known each other and to the extent that randgold has come into the story, which of course is a very big extent, it's been hugely accretive to the process.
Yes.
What they've brought their own vision to the enhanced modeling concept.
I think it's fair to say that both the Barrick Novo bolt teams for Donlin gold team as the synthesis.
Are really excited by what they see.
The new models are obviously.
Extremely exciting if you were to look at those drill results from last year, they would be amongst the very best real results in the entire gold industry. The fact that they are located in a place that is really allowing us to.
The all in is really Fabulous and as most of my career has been built on the drill bit I can tell you where it up to me I'd have 10 drill rigs on.
The thing for years, but that's another story.
Nice to say that.
There's a lot of gold there, it's gonna be a lot more growth there.
3.
The parts.
And you know even the 8 kilometers altogether.
Our 5% of the land package all.
All credit to Mark Bristow is a geologist spin out to site will continue to be outside.
Mark wants to know what every single ounce is going to look like.
In those early years.
And all credit to him because the projects.
Only getting better and you know this is the big Love letter and thank you to to Barrick and team.
But.
As investors.
So I think really is forward investors on our side I think we can look forward to.
Really having 1 of the only go to stocks in the global development space and I want to thank all of our investors shareholders Big and small.
For for their support we never take it for granted not for a moment. Thank you.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
[music].
Okay.
[music].