Q4 2022 NovaGold Resources Inc Earnings Call
Thank you for standing by this is the conference operator welcome to the Nova goal 2022 year end financial results conference call and webcast.
As a reminder, all participants are in listen only mode and the conference is being recorded.
After the presentation there'll be an opportunity to ask questions to join the question queue. You May Press Star then one on your telephone keypad.
Should you need assistance during the conference call you may signal, an operator by pressing star zero.
Should you need assistance, Please press star zero.
I would now like to turn the conference over to Melanie Hennessey, Vice President Corporate Communications. Please go ahead.
Yes.
Thank you Eric Good morning, everyone. We're pleased that you've joined US for the 2022 year on financial results and also for an update on the Donlin Gold project.
On today's call, we have Doctor Thomas Kaplan, Nova Gold's Chairman Greg.
Greg Lang, <unk>, President and CEO , and David Ottawa, Oliver Gold's, Vice President and CFO at.
At the end of the webcast, we will take questions by phone.
Actually we will respond to questions received by email.
I would like to remind our webcast and call participants, but as stated on slide three 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 forward looking disclaimers included in the slides.
Location I.
Now have the pleasure of turning the presentation over to our president and CEO , Greg Lang right.
Yes.
Thank you Melanie.
And good morning to everyone joining today's conference call and webcast.
On slide four we have included a drill hole map for the 'twenty two programs it shows the asthma and little failures.
The three areas, where we'd get tight spaced grid drilling.
And the top five intervals.
The latest results, we jointly released with Bert.
We could go.
The 2022 program was completed under budget and head to head of schedule in September .
With 141 hole drilled for a total of over 42000 meters, making.
Making it the largest drill program at Donlin.
For 15 years.
During the field season, 150 employees worked at the Donlin site representing 24.
Of the villages in the Yukon Kuskokwim region.
Keeping our workforce healthy and safe.
It's always been a top priority.
Well, nobody goes and Donlin gold.
The safety protocols.
And the meetings at the project site plays a central role in ensuring the continued success of Donlin and the stroke program.
We are immensely proud of the Donlin gold achieved zero loss time incidents again in 2022.
This is a remarkable achievement that we do not take for granted.
As we continue to work and improve practices to the insurance of the health and safety of our people.
Our key focus areas for the drill program such as the tighter space drilling in the deposit.
The firm we should.
Geologic modeling concept at the wider spaced drilling both in the immediate areas around the grid.
It also identified.
It still controls that will be incorporated into an update to refine the geologic domains used for resource estimation.
Which will then be utilized for the strategic mine planning work.
The additional 14 geotechnical drill hole also provided information to advance the application for the Alaska Dam safety certifications.
Yep.
We could not be happier with the outcome in 2022 program.
The assay labs to return some of the best intercept since the project conception and among the best open pit gold intercepts industrywide.
Just to highlight how encouraging results were.
Table on slide five includes the top 20 intervals from the program.
Yes.
For example drill hole.
22, 68, and Dubai grid encountered over 40 meters and about one ounce per ton and the southern or bull at 23 meters almost two ounces per ton yeah excellent results, what's particularly intriguing about the results we have provided.
Is the tighter we drilled here.
Sure, we expose ourselves to encountering these high grade structures.
For the top holds the MS program within the Dubai grid and encountered unexpected high grade structure. It will be following up on.
It's a highly successful drill program behind this and once we have completed the updated resource model and trade off studies. The owners look forward to supporting the project team and its partners Calista and Teekay C and positioning we project for the next steps you've taken it up the value chain with an updated feasibility.
This study.
Both of them one of the world's largest gold mines represents a substantial undertaking.
It requires the necessary time and energy to ensure a diligent thorough transparent and inclusive posture.
For all of our stakeholders in the region.
But from my experiences with multiple tier one assets when I was president of Barrick North America for many years I realized how spectacular the Donlin gold project really is.
I believe that the intensive work that we're doing on the front end the better will be the long term outcome.
Richard Williams, our vice President of Engineering development Cherish that philosophy.
You brought the Pueblo Viejo mine into production for barracks.
And he too joined Novo go to.
To align itself with the best in class for the gold industry future.
Turning to slide six.
<unk> and Donlin gold continued their bipartisan outreach in Alaska with the administration and Congress in Washington D. C to highlight the thoroughness of the prop.
<unk> environmental review and permitting processes.
In addition to the considerable benefits this project will deliver to all made up of Alaska.
Alaska is U S Senators markowski, it should with our external manager bearish, Kristina Williston and Dan Sullivan as well as Governor Michael Dunlavy have long been supported as Donlin Gold project.
We also recognize the historic reelection to the house of Representatives of Mary helped all of them for a full term as the first Alaska native to join Congress and look forward to our continued outreach to her regardless donlin gold in the coming year.
Our goal is a federally permitted project located on private Alaska Native Corporation land designated by law for mining activities as part of the 1971, Alaska Native claims settlement.
As a differentiating factor for many other mining projects in Alaska.
Permanent in Alaska has represented a substantial undertaking and a tremendous achievement.
To ensure a diligent process for everyone involved.
Slide seven.
So all the federal and state permits and certificates received to date.
Ongoing donlin gold permitting activities are included on slide eight.
In September 13 tribes joined Earth Justice requesting that the corps of engineers do a supplemental EIF.
And revoke your permits.
Responses have been submitted by Donlin and <unk>, stating why none of these actions are appropriate theres very little precedent for 404, B page and E. P. A.
Always defers to the cores regular permitting process.
Teams have been very receptive and dialogue.
And welcome the responses that we have provided.
We continue to support Alaska in its efforts on the state's clean water Act for one certification.
The commissioner granted the request.
For the judiciary hearing related to potential water temperature in facts and Crooked Creek.
The briefing process is underway and should be completed in the next six months.
The right away lease for.
Proportion from the natural gas pipeline on state land was separately appeal.
The superior court by two parties.
Legal briefings are being prepared by the parties and we anticipate a decision this year.
The state of philosophy issuance of water rights for the mine and the Sonys was also appealed.
All parties are preparing their initial briefs.
Vision is expected also this year.
The Alaska Department of natural resources finalize the relocation plan for public easements and mine and transportation facilities.
It should be noted that all appeals and triangle engines to dongo permit to date have been unacceptable.
Unsuccessful, often multiple times and we have confidence in the process.
Nevertheless, as with all mining projects in the developed World, we are always prepared and organized for challenges.
Leadership and mitigation teams are intimately familiar with the permits.
And the procedures that needed to be followed.
Donlin gold alongside steadfast advocacy Jewish too and Teekay C continued to support the state and defense of what constitutes an exceptionally thorough permitting process.
One of the key areas, which we spend a considerable amount of time and energy at Diamond project is participating funding and supporting the local communities in initiatives associated with health and safety.
Rental management and training and education.
For example.
As shown on slide nine Donlin Gold has conducted many fishery studies reclamation work and other environmental activities.
The project team has also supported this search and rescue teams in the region.
Fostered education by supporting the local school districts and user activities.
This has represented a fundamental undertaking by donlin over the years.
For the benefit of all stakeholders.
From a community engagement standpoint, Crooked Creek, the closest community to the project site.
Currently formerly expressed their support for the Donlin Gold project.
For additional shared value statement.
We're also signed in the region in the last few months.
Bringing the total to over 12 with five new community relations positions filled by regional Donlin Gold's employees.
With that I will now turn the call over to David out of well to review year end financial results.
Dave.
Thank you Greg.
Slide 11 highlights our operating performance.
Appointed a net loss of $53 3 million in 2022, an increase of $12 8 million from the prior year.
Primarily due to the expanded foundling golf drilling and work program and lower accretion income due to the maturity of the $75 million we might note.
The prior year.
Higher interest expense on the promissory note was offset by increased interest income earned on cash and term deposits and favorable foreign exchange movements.
Cash flows are highlighted on slide 12.
For the year, we spent $43 2 million $15 4 million higher than the prior year, primarily due to the expanded drilling and work program at Donlin.
And the timing of corporate liability insurance payments.
Partially offset by higher interest.
Our cash and term deposits.
Looking ahead to 2023 on slide 13.
Begin the year with a financial position that includes cash and cash equivalents of $64 million.
Term deposits of 62 million and.
And $25 million due from Newmont in July 2023.
We expect to spend $31 million in 2023, including $17 million of Donlin.
$13 million of corporate G&A, and 1 million for working capital and other items.
I will now turn the presentation back to Greg.
Thank you Dave.
As the Premier gold deposits in the industry located in Alaska.
Donlin gold represents a potential source of responsible economic development for the benefit of all the stakeholders and the second largest gold producing state in the U S.
With its well established tradition of responsible mining.
And an opportunity to provide long term.
Sustainable economic growth for many decades to come.
Donlin gold.
It's truly.
You know league of its own within the gold industry.
With approximately 39 million ounces grading two two grams per tonne. It hosts one of the largest.
Highest grade undeveloped open pit and dominance in the world.
And we believe it has exceptional capacity to grow.
The most recent drill program results clearly demonstrate the remarkable upside it remains at dawn.
The asthma Lewis deposits.
We chose the existing resources occupy only three kilometers of an eight kilometer mineralized belt.
Which is on less than 5% of Donlin brand position.
This project is on private land designated for mining with our partners Calista and T. K C who are dedicated to responsibly advancing the project.
As currently envisioned Donlin gold project with average over a million ounces a year over 27 years of production.
When looking at the select group of gold development projects in North and South America on Slide 15.
Donlin is by far the largest and most global gold production continuing to decrease for most of the producers.
It is clear the industry projects.
Joel grade and longevity.
To write out multiple gold cycles.
With a grade of twice the industry average for an open pit project at two in a quarter grams as shown on slide 16. This gives donnelley and advantage to make it one of the lowest cost producers in the gold space.
The great exploration potential is another attractive attribute of the Donlin Gold project.
The asthma and lose deposits occupy just a small part of the land position is highlighted on slide 17.
Incredible upside exist to increase the ounces and extend the lives well beyond 30 years.
Location.
Is key.
Having great leverage in a place where you can keep the fruits of your leverage is worth the investment and time and resources.
On the map on slide 18.
We feature the top three gold producing operations in the world and the five largest gold development projects.
There's private landowners, both Jewish too and Teekay C are dedicated to developing donlin gold in a way that remains consistent.
With the elders vision for responsible economic development.
While creating jobs and benefits for the surrounding communities as well as protecting the local culture.
Yeah.
A few quotes are provided from the leaders of both Alaska Native corporations on slide 19.
Calista and Tk's knowledge and guidance have been critical over the years through the permitting sustainability and community initiatives we conduct.
We are immensely appreciate their input regarding their land and the significant economic needs required to sustain healthy living for their communities.
Our partners continued and time tested collaboration and.
And full engagement are extremely valuable in ensuring responsible and sustainable economic development through all phases of the Donlin Gold project.
Turning to slide 20.
Focus of our activities in 2023 will be.
Updating the geologic and resource models, incorporating the data from last year's drilling program.
Continuing field work on collecting geotechnical and hydrological information for completely design documentation required for the Alaska Dam safety certificates.
We will be reviewing the key project assumption inputs and designed components.
For optimization and future mining engineering, metallurgy, hydrology and infrastructure.
We will also continue to guide our permits through the regulatory process and support the state and defending the existing permits.
Lastly, we will continue to engage maintain and grow support for the project in the region and with government entities.
I will now turn the presentation over to our chairman.
Dr. Thomas Kaplan.
Thank you very much Greg it's always.
Pleasure to be able to hear the highlights of what has become my favorite investment.
And my favorite Gold story.
And particularly as I am now embarking on may 30th year.
In this industry.
I've been very very lucky from the outset to have been able to work with fantastic people.
Who could help guide me to the right places and to the right asset.
But mining is more than that and in fact, I think investing is more than that and I'd like to reiterate with some first principles, which ive enunciated on multiple occasions, but can now use did you still once again the reasons why I do believe that Nova gold represents.
The very best way to gain maximum leverage to my thesis on gold.
As it's written but let me repeat it again as an investor I find that the ability to make money is very much a function of developing a thesis scrubbing that thesis to the point, where one enjoys massive conviction.
Finding the right assets that will allow us to benefit from the underlying theme increasingly so in a jurisdiction that secures the fruits of that benefit and then having the patience and riding it out for as long as it takes and I have come to that conviction with Nova gold.
Let me take this in two parts.
Over the last 30 years I've been blessed to have experienced what it's like to make anywhere between 10 times and 200 times my money.
As a consequence of being able to harness the value of great assets.
And I have had the pleasure and the look to be able to control some of the greatest assets.
In silver.
Latin am hydrocarbons.
And now once again in gold as well as silver.
As good in fact as great as some of these assets work category killers in their space I do not believe that any of them in their combined attributes.
Would be able to be cold unique.
Uniques Big word and so I tried to use it.
In a and educational way when I need an investor who's looking for a way to be able to play the bold development space.
We'll put forward the attributes of <unk>.
Donlin.
And when I say, there's some saying this as obviously.
The chairman and largest shareholder of a 50% owner of Donlin through Nova gold.
And I also say this is somebody who very happily can point people in the direction of Barrick and say that I do believe that this is a undervalued within barrick portfolio as well.
We try to be as a <unk>.
<unk> and his partner Lee as we possibly can the reality is that if you look at the combined attributes of Donlin is unique in the gold space.
And so if we are to look at slide 22.
Let me reiterate some of the factors that I looked at when I'm sitting on the side of the table of many of you out there as those who analyze the story.
Or are investors in this story.
First of all size matters and the truth is that.
There has never been to my knowledge.
A gold mine that began with fortyish.
<unk> million ounces.
And has the potential to host so much more.
The drill results, which donlin gold LLC posted.
Over the last year are not just the best drove results in the history of the project, but also the best drill results in many ways.
In the gold industry certainly for a large.
Open pit story, and I'm, not even including in that the fact that it is not located.
In a difficult jurisdiction, it's located in a place where mining a responsible sustainable mining is welcome.
So you have the size you have the exploration potential we have often said that we believe that there could be a multiple of the gold at donlin, what we're seeing is not only.
Is there more gold, but that we're finding structures.
Which are so high grade that they very well could assist us being able to find what could very possibly be the feeder zone for this very very large system.
We've come to call it the new Nevada, or the new Carlin.
Simply because it's so big and the potential to make it bigger is so obvious.
Think about this.
The entirety of the eight kilometer trend that is mineralized represents only 5% of the land package at least 95% of it is relatively unexplored.
The reason for that for those of you who are relatively new to the story is really a function of.
Of course of history.
Eric Gold long before we were shareholders.
But indeed, while Greg Lang was the CEO of Barrick North America.
Barrick gold made a hostile takeover attempt on.
Nova gold.
Had these succeeded by the way at a multiple of where the stock prices today and that's in 2006 have they succeeded I have no doubt that they would have had 10 drill rigs on the property and and this is both wild forward looking statement, but I've been in this movie before.
In a number of countries and then with the number of deposits.
I believe that we would be talking about a multiple of the 40 million ounces.
And very possibly.
On other deposits within the district again, 95% of the district has been unexplored without drill holes there isn't adage in the mining industry, if youre going out in search of elephants.
Go to elephant country. This is probably the greatest elephant country now in North America.
And I believe.
And my Chief geologist, who have seen me through 30 years of Discovery's also believes that there is a very reasonable chance that the next donlin is at Donlin.
Had barrick one that takeover bid and then not done everything that it could be tried to suppress the value of <unk>. So that it can buy the rest over the years and Barrick Ceos would admit that at the time.
I have no doubt that they would have absolutely drove this thing completely out having made my money.
Primarily through the drill bit and there is no drill budget that Barrick would propose that I wouldn't ask you to double.
So you know I have massive conviction about this deposit and everything about the drill results has absolutely confirmed what we've been saying for years that donlin is a gift that keeps on giving it is the ultimate category killer.
But it's not just that it has the size it.
It has the grade.
In the last decade, the grade of the average gold mine has gone down as much as 50%.
Properties that are being put into development are often lower grand.
And the grades are falling.
There are two aspects to that first of all it's harder to mine lower grade.
<unk> fleet it gives a tremendous relative advantage to donlin, because terrorists paribus, all things being equal.
If you have a mine that's producing a two grams of mine producing at one gram and the cost structure is similar your cost of production is going to be have a higher grade mine.
This gives us an advantage.
So you have a size you have quality as well as quantity you have exploration potential that we've already shown in the last year.
Is as good as anyone has shown for any gold deposit anywhere period.
But very importantly to my mind, most importantly, and I say this for somebody who is not squeamish about the developing world are jurisdictions I see this as somebody who as they say made their bone in Bolivia, Zimbabwe, South Africa, I sold Kibali too Mark.
Bristow at Randgold.
And that he will often say I was one of the only two people with him who believed that that was going to be a great mine.
I know, where if I speak in the developing world I was the largest holder of mineral rights from Mauritania through to Pakistan itself.
Having said that.
While this was so good to me the frontier Spirit. The go where the gold is mentality I believe that the world has changed and I believe that events of the last year have only reinforced that conviction.
And so I believe that when you have an asset that has the fundamental attributes.
Of Donlin in terms of size grade mine life cost structure exploration potential production profile to be producing upwards of a million ounces or more a year. These are all fantastic, but then you superimposed on to that.
They're located in the tier one jurisdiction, they're not just tier one they're tier one jurisdictions.
Those are places where you get all the leverage to the underlying theme that youre looking for and we are unreconstructed unabashed gold Bulls I believe that gold is going to multiply from here.
You want to be able to have overleverage to that theme in a mining equity.
And in a place that you feel very comfortable will allow you to keep the fruits of that leverage that where you wake up in the morning, What you thought that you own is still what you own.
And there are reasons why this is a competitive advantage when youre talking about the development story.
First of all.
Perhaps I'm talking about this because I tend to try to project.
On to other people the feeling that I have as an investor, but I'm very convinced.
That when.
Brokerage firms are taking companies around to see investors.
In the next leg of the Bull market and people are scrambling to find great stories, great assets with great management teams.
The first question that they're going to get from the Investor is it sounds wonderful just tell me where in the world visit.
Is it someplace I'm willing to take my kids.
Is it a place where it can go gambling like Nevada, or whale watching like Alaska or swimming in the great barrier reef like Australia, because if it's not why am I, adding onto the complexity of mining investment. The fact that I can be surprised.
Lots of things are going on in the world that can range from.
Insurgencies too.
Social dislocations you wanted to be in a place to welcome to you and where the rule of law is not a novelty where private property is enshrined places like donlin, where the land on which the deposit is located.
Has been set aside.
By law designated for mining and where the native corporations.
Could not be stronger supporters as shown by the signing on board of Cripple Creek. The nearest community to the mine and of course Teekay key in Calista, who have been time honored partners for us and an incredible blessing. We've seen at Barrick has seen donlin is very very blessed to have this kind of support.
At the local level as well as the state level, the senators and as well as being in a position.
Where we have our federal permits not.
Not just from the Bureau of land management with the U S. Army Corps of engineers, something so special that this combination when it was done they asked to be able to have a party to celebrate this unique joint venture.
We are in a great place Donlin figuratively metaphorically physically in every respect as a gift that keeps on giving and I can tell you as someone who doesn't have to be chairman.
I'm chairman because I enjoy it because I love, telling the story and probably able to gather that I've been in this now for 12 years and rather than experiencing deal fatigue I'm more excited about this than ever before and the reasons are several fold first of all you know when Greg came on board.
As CEO I came on board as Chairman we came on board simultaneously, we went out we raised $330 million within the first few months.
We raised that money at nine and a half dollars in 2012.
We haven't had to raise outside capital since then.
We've kept pace with the investors who bought US we said, there's no reason to be raising money below where we raised money, we raised enough money between that and the sale of our stake in the Lora to newmont to be able to take us to the next milestone with keeping faith with all of our investors and I'll get back to that.
That in a moment because that is definitely been a differentiating factor for us in the industry.
So we have the leverage we have the partnerships the balance sheet takes us to where we need to go in a production decision, we're blessed with a management team that could run.
Any large mining company they have the credibility so too.
Does the board.
And we have a shareholder base that knows us extremely well we are perhaps the most transparent.
The company in the industry in terms of expressing its long term strategy as well as our tactics and how we intend to fulfill that strategy.
Where almost too transparent, but the product where the end result of that is that we have perhaps the most educated consumer base.
In the space.
One of the easiest ways that new investors have found to be able to get up to speed on checking the box as to whether this is the kind of investment that they wanted to be in if they look at our shareholder base and that Oh wait I know him or I know him, where I know them.
What's going to happen, if I call them and I say please do.
Because they are our best referenced they've known us for years and they've seen that the management team.
George.
<unk> kept every single promise that its made since we came onboard in 2011.
And that more than that the deposit itself has always delivered so now let's get to what really is the gating factor on where we go from here. If you look on slide 20, 2020, excuse me 23.
I'm, just going to repeat what I've been saying because I believe that we are.
Perhaps I hate to talk about timing, it's not my strong suit, but perhaps on the cusp of seeing this happen this year or next year at the latest.
Gold is marching to a different beat when people least expected gold will go back to 2000 people will say it's been here before it'll go to 2050 people will say it's been here before then it will go to 'twenty $121 50, and people will say I'm going to buy it.
A pullback than the pullback to $19 50 comes.
And then all the people who said they were going to buy it on a pullback.
Paul There are there they're by orders are and.
And they don't buy it on the pullback because they get scared and then it'll go back to 'twenty 300, 2400, and then those who put it bought it at 1950 or 2050 or $21 50 get paralyzed until gold goes to what I expect to be the next equilibrium range between three and $5000.
Now remember.
My background is doesn't hit story I surround myself with an ATM of people both within the family holding company Electrum.
Which is our family and employee capital in several sovereign wealth funds and family offices.
But also in the management team of <unk> itself.
When we look at the price chart of gold going back to 1970 on slide 24.
I just want to point out to you and this is someone who speak to it as a fundamentalist historian and who believes that stock charts are simply human brain waves change through a different lens and this is a really bullish chart.
This is a chart that shows you why I genuinely believe we will see an entirely new equilibrium level and its not going to be 'twenty two 'twenty three 'twenty four 'twenty 500.
It's the reason why we're so relax about win Nova gold goes into production, because we're going to be achieving much much higher realized prices and what we see today I've long advocated that theres no reason to build something at 11 or 1200, if you're genuinely bullish well, let's look at that long wave from.
The turn of the century.
To nearly 2000 in January .
In 2009 10.
That was 12 years.
12 years Gold went up every single year for 12 years now during that time, you had inflation fears deflation fears strong oil weak oil political instability political stability strong dollar weak dollar and yet gold went up.
Every year for 12 years that is a bull market.
It looks like a duck and it works like a duck and it tastes like a duck duck vegetable market. What you saw is basically a stock go from two and a half bucks to 19 Bucks long wave than you had.
A second wave, which took it down to what's actually a very very beautiful chart formations, but I won't go into that.
Just to say that that second wave I believe.
<unk> is coming to an end or actually came to an end and we are now at the point, where the third wave higher.
He is going to take us.
So the equilibrium level that I have suggested I'm, saying, there's not because I.
Believe in playing charge, but I do believe that if you really are a fundamentalist and you ignore charge, you're ignoring basically a representation of human history in the human fault process. It's a very very bullish chart.
And it has gotten even more bullish in terms of the fundamentals.
So I get the question.
What does Ukraine done to make people more bullish on gold.
Well I may get this question from you, but I'm going to answer in any event.
And I say, you know I don't care very many people, saying that they are buying gold because of Ukraine, although I could make a case for it I mean after all war.
In the heart of Europe .
It's certainly a reason to want to protect your assets in gold is amongst those that have proven themselves to be great stores of value.
The reason why Ukraine is particularly valuable is because it has accelerated.
And I think this will be an enduring acceleration.
The competition between the public sector, and the private sector to be able to own physical gold.
Central banks have been buyers net buyers of gold.
A number of years now.
They're not dumb money in.
In fact, they're quite the opposite they are smart money. They are insider money nobody knows better the quality of their treasuries and their reserves than the central Bank.
Themselves and Theyre buying more gold they want to be able to have diversification away from paper assets, but they're very very cognizant of the fact, because they've been doing it can be printed at will.
They want to be diversified away from dependence on the dollar, particularly in the aftermath of what happened in the opening days of Ukraine War, where Russia basically had half of their.
Attainable.
Or touchable.
Foreign reserves quarantined.
By Western governments and central banks.
Came as a surprise to them, but it did also reinforced the fact that the gold, particularly the gold that they had in Russia.
Wasn't touched and could still be used for those friends and neighbors, who might want some collateral for the support that they're being given this has only accelerated on the part of central banks, the need to own more gold and for those that already have it.
There's no way, they're going to sell it eurocrats are not paid enough they're not paid two in 'twenty.
To take a risk spending in the face of a bull market and selling off the family silver or gold.
So I think we can expect central bank loan it are going to hold it and those that don't own it are going to want more of it and theyre going to want to repatriate it particularly back to their own countries. There are also a lot of reasons for why the Chinese the Russians and some of their fellow travelers looking for ways to be able to use gold.
As a means of being outside the dollar system to the extent that they can.
The bigger issue in terms of the gold narrative that I want to point out.
Is crypto.
I no longer get very many questions from investors about the reasons to own gold.
20 years, I would hear from people well you can't eat it.
I would respond with something glib like you can't eat yen, Aussie or swissie or dollars or euros for that matter with your curios. So no you can't eat it.
Then it was well you know it doesn't have earnings.
Etc. Okay fine. It's just the currency you have to see it through that prism.
Dow came along and crypto build itself is gold to point out.
And.
That was first of all I wrote about this a couple of years ago. I said this is going to be a game changer, because it's going to make an entire generation.
Compare what they're buying with such wild abandon.
To gold.
And some of them are going to look at that and say.
Why would it be cold, though to point out you know we felt gold was a barbarous relic for Troglodytes No no no no no. There is a reason indeed to be able to own a currency that can't be printed at will or by Fiat.
Now in truth, it turned out that most of those new currencies proliferated as.
If they were being printed that will or by Fiat, but what happened was that in making the case that they were both 2.0. It got people to once again look at gold one point such that when the crypto universe.
Collapsed and I'm not talking about all the particular vehicles, if we used if I'm not going into that but when that universe collapse and as Warren Buffett would say the tide went out therefore, revealing who is swimming naked.
All of a sudden started to look pretty good and a lot of those family offices with Shanghai with central banks are buying at what do they know that we don't know and after all gold has been something that held its value for thousands of years and with all due respect to you know the self referential solipsistic.
Attitude of western audiences pretty much every Indian or Chinese zone goal since they bought it since the dawn of mankind has now seen that gold has held its value against paper.
That is what we call positive reinforcement, you're not looking at Bolton, saying bolt is too high different Goldman saying, Thank you build and Goldman Trust.
So you have that at a time when western countries are reassessing.
Crypto currencies, but crypto has now made the argument for me I can't remember the last time someone said to me why should I own a currency that cannot be debates in other words, why should I own volt.
That argument is done all that remains is for bolt to push convincingly through 2000, 2000 ish and I think we're off to the races.
I don't like to engage in market timing it could happen tomorrow. It could happen six months from now it doesn't really matter what counts, though is that I've always found.
That the best leverage comes through those equities.
Which are related to the underlying commodity or in the case of gold currency and if I'm right. The go to stock in this space for all of those myriad reasons that I mentioned will.
We will make novo Vigo to stop in the development space It will be for those brokers, whether they cover it or they don't some are and I think more will as donlin goes up the value chain.
This is going to be something where a an investor is able to look at it and say you know what he checks all my boxes, great asset great management.
And in a jurisdiction that when I talked to my I see their eyes arent going to roll. They may actually some of them may actually say can I join you on the on the mine tour, that's a differentiator and that's one of the reasons many of the reasons why I believe that.
No the goal as a pure play.
On the greatest gold development story in the space.
Is for me as an investor the Holy Grail.
Going to slide 25, the leverage is absolutely enormous and so you know as a historian of these things I believe that donlin for the benefit of Barrick as well as Nova gold will.
We will be valued using very likely a zero percent discount rate at as U S assets were back in the Eighty's Ninety's before the frontier Spirit took people like new monthly on our culture, and our Uzbekistan and freeport's to Indonesia.
And indeed, barrick to all kinds of far flung places.
I think that if you're in a safe jurisdiction and you have the kind of exploration potential.
In a bull market.
Would make your stock double or triple.
In a bull market. If we were there already the kind of results that Nova Gold's put out with Barrick over the last year I believe would have put us already in the teens, but that's the investor psychology.
When it happens people will catch up they will do their work they'll look at it you'll say this is exactly the kind of story that we want and it's got exploration could be much bigger it's in North America, we're going to give it the premium valuation that's a lot of leverage in a place where you can keep it now.
Now on the last slide I'd like to say this I mentioned this before.
We take it really seriously that we have an extraordinarily educated shareholder base.
I've said this many times, we don't just benefit from having the shareholders on the roster.
When I have questions when the company has questions, we're cheap investor advice.
We know who to call the doors open to us at fidelity at pulse and.
First Eagle Saudi P. I F C annually family of X or I can go on and on and on and.
And we take advantage of that.
Through my career, which started.
When I became partners with sorrow for the silver mining venture next year will be 30 years I have always taken advantage of the intelligence of my partners I believe in the Solomonic proverb as iron Sharpens iron So a friend sharpens friends I'm not interested in people.
Telling me what I wanted to hear.
You know lot of people would benefit from the old Russian proverb is better to be slapped with the truth and kits with a lie.
We are very very fortunate we have shareholders, who have been the speed on everything that we do before we make them.
Major decisions, we seek advice we seek counsel.
And as I said.
The best reference that we can make when we talk to new investors, which to say if you know any of the people who are involved with us by all means give them a call. They know Greg. They know me. They know we've kept all of our promises and they also know donlin to be the very very best in breed. There is a reason why we call it the <unk>.
<unk> rail and the fact that our shareholders state with us with this kind of solidarity and pardon the pun fidelity.
Is one of the reasons why we have been able to shine and why I expect that we will be the premier right. It star.
The story in the gold development space when the next leg of the Bull market kicked in and people want the right asset in the right place.
And so with that I pass back to Melanie and.
She can continue being master of ceremonies from there. Thank you.
Yeah.
Thank you Tom the aerial we can move to the question period. Thank.
Thank you we will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you'll hear atone acknowledging your request. If you are using a speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then two our first question comes from Lucas.
Types of B Riley Securities. Please go ahead.
Thank you very much operator, good morning, everyone. Thank you very much for the very detailed overview, Tom always great to hear your update on the gold markets really appreciate it.
All of that perspective. My first question is on on Slide 20, where you list.
Three upcoming catalysts and I Wonder if you could maybe elaborate on the potential timing of each of those.
I have a follow up question from there. Thank you very much.
Alright nutritional thank you for joining the call today, what are the upcoming catalysts.
Actually all very much interrelated and there the natural outcome from the drilling and the other work we've been doing with our partner.
So it gives you a sense of timing you know the resource model is well.
Well advanced.
Updating it with.
Great results from last year and the various trade off studies, saying there has been a work in progress, but we anticipate all of the work that we.
Set out to do too.
Really fine tuned the project made sure that we've approached the infrastructure and all other aspects in the most effective manner, yeah, we expect to wrap those up.
March early April and reviewing them with our partner.
I think you kind of laid the foundation for us to make the next decisions on the timing of updating the feasibility study.
That's that's very helpful. Greg and then.
Follow up question from there is one do you have a sense for the budget for the.
Updated feasibility study and to what extent and I know you're still completing the tradeoff studies, but to what extent can you.
Maybe provide some color as to whether the drill results allow us allow for staged approach that could then allow for different fuel source.
To get the mine started for example would appreciate your color on those two points. Thank you.
Sure Lucas.
Looking at.
The tradeoff studies, you'll certainly a stage development approach is that yes, that's been something we've been exploring and a great deal of detail I think it makes it makes a lot of sense to US you know I don't want to get ahead of the studies, but I think that sure.
Certainly a sensible way to approach the project.
Some of the other studies that relate to that is what bench size should we use optimizing the fleet to maximize the grade what stockpiling strategies do we want to implied enhanced grades in the early years. So I think these are these are all related to Oh really charging.
The the most economic path forward for the project.
And I look forward to updating everyone as this progression from where and your ownership position to.
You described the project if we plan to take forward in greater detail.
Thank you at the the approximate cost of the updated feasibility study.
As Melissa said, yeah feasibility studies for an asset the scale of Donlin.
$60 million to $80 million undertaking and a lot of that will depend on how much engineering that you'd want to do on the tail end to prepare the project for construction, so even rough rough numbers somewhere $40 million 30 or $40 million to Nova golf.
And I think as Dan pointed out our treasury can certainly easily accommodate the expenditures that we see coming forward in the next couple of years and.
As we've said we see no reason to raise equity until we are ready to make a construction decision.
Very very helpful. Thank you Bracken and again to the entire team continued best of luck.
Thank you Lucas.
This concludes the question and answer session I would like to turn the conference back over to Greg for any closing remarks.
Alright, Thank you operator.
And in closing.
The gold industry in general.
And large scale assets, such as Donlin gold in particular with.
Require patients.
This is Matt tribute that we have demonstrated extensively over the last decade, which has proven beneficial and allowing us to derisk the project and move it up the value chain.
Donlin gold is brilliantly positioned.
For this next leg in the gold market.
I wish to thank all of you and all of our shareholders for your backing.
And your choice to invest in Nova gold as.
As well as your encouragement patients and insights over the years.
We look forward to continuing to deliver on our promises and keeping an open line of communication.
Between us.
While we reached even more milestones and achievements together in 2023.
Thank you for joining our call.
Thank you. This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
Okay.
[music].
Okay.
[music].
Yeah.
[music].
Yes.
Okay.
Okay.
Okay.