Full Year 2023 NovaGold Resources Inc Earnings Call
Thank you for standing by this is the conference operator welcome to the Nova go to 2023 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 will be an opportunity.
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I would now like to turn the conference over to Melanie Hennessey, Vice President Corporate Communications. Please go ahead.
Melanie Hennessey: Thank you Lisa good morning, everyone. We're pleased that you've joined us for Nova Gold's 2023 year end financial results and for an update on the Donlin Gold project.
Melanie Hennessey: On today's call, we have known for Goldman Chairman, Dr. Thomas Kaplan, Greg Lang, <unk>, President and CEO, and David ATA, well, although both vice President and CFO.
At the end of the webcast, we will take questions by phone.
Additionally, we will respond to questions received by email.
David ATA: I would like to remind you 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 this presentation.
David ATA: I will now turn the presentation over to our President and CEO, Greg Lang Greg.
Melanie Hennessey: Thank you Melanie.
Greg Lang: Good morning, everyone.
Greg Lang: I haven't provided a summary of our 'twenty 'twenty 'twenty you're anglogold.
I'd like to start today's call with a brief overview on slide five.
Melanie Hennessey: Explains why we and our shareholders consider donlin gold a tier one asset.
Melanie Hennessey: Hosting approximately 39 million ounces of gold at an impressive grade more than twice the industry average at two in a quarter grams and a projected mine life of almost 30 years Donlin gold.
Melanie Hennessey: The potential to be a significant and cost effective producer.
Melanie Hennessey: Furthermore, outstanding exploration potential exists beyond the known resource areas.
Melanie Hennessey: Diamond's extensive landholdings.
Project is also located on private land.
Melanie Hennessey: I figured for mining in Alaska.
Melanie Hennessey: World, leading jurisdiction knowing for responsible mining practices.
Melanie Hennessey: Our enduring partnerships and life of mine agreements with Joe Mr and the Teekay Corporation.
Melanie Hennessey: Their position Darwin favorably on its path.
Melanie Hennessey: For development.
Melanie Hennessey: It is important to put it into context, the company's accomplishments since the reorganization in 2012.
Melanie Hennessey: Especially for those who are new investors and less familiar with us.
Melanie Hennessey: As shown on slide six we have been focused on executing the strategy that was set in motion by our chairman and me over a decade ago.
Melanie Hennessey: Namely to unlock the value of Nova gold high quality assets.
Melanie Hennessey: For our shareholders and advanced Donlin.
Melanie Hennessey: Pure gold play.
Melanie Hennessey: Offering our unique and Belmont and maximum leverage.
Melanie Hennessey: Looking at slide seven.
Melanie Hennessey: Alaska offers an excellent environment for mining.
Melanie Hennessey: And he was one of the world's safest jurisdictions.
Melanie Hennessey: It ranks as the second largest gold producer in the U S with a well defined permitting process.
Melanie Hennessey: Numerous companies have achieved success here and the government is very supportive and recognizes the importance of responsible natural resource development.
Melanie Hennessey: Notable performance in the areas of environmental stewardship.
Melanie Hennessey: Health and safety, social and community engagement and corporate governance are featured on slide eight.
Melanie Hennessey: Health and safety of our people.
Melanie Hennessey: This is our highest priority with over 10 years.
Melanie Hennessey: Zero lost time accidents at the project site.
Work force is comprised mostly of local hires.
Melanie Hennessey: Throughout 2023, we will continue to monitor reflect on and refine.
Melanie Hennessey: Our environmental social and governance performance.
Melanie Hennessey: Maintaining strong records of environmental health and safety of Donlin.
Melanie Hennessey: Spanning our investments and partnerships with the people of the Y K region.
Melanie Hennessey: To touch on Donlin attributes.
Melanie Hennessey: As currently envisioned with approximately 39 million ounces. It helps one of the largest and highest grade undeveloped gold endowment in the world when it would average over a million ounces a year for 27 years.
Melanie Hennessey: Looking at the group of Gold development project in the Americas on slide nine.
Melanie Hennessey: And gold is by far the largest.
Melanie Hennessey: Global Gold production continuing to decrease you just clear the air.
Melanie Hennessey: Industry needs projects of scale greed and longevity.
Melanie Hennessey: Right out multiple price cycles.
Melanie Hennessey: What's the grade of more than twice the industry average for the open pit project at two and a quota grant as shown on slide 10.
She returned enables donlin gold to be potentially become one of the lowest cost producers in the gold space.
Melanie Hennessey: Excellent exploration potential exists beyond the defined resources located in the asthma and Lewis deposits on the diagram in the upper right hand corner, which occupies only three kilometers of an eight kilometer mineralized belt.
Melanie Hennessey: Highlighted on slide 11.
Melanie Hennessey: Accretable potential remains to increase ounces and extend the mine life.
Melanie Hennessey: Private landowners, both calista and PK C are dedicated to developing donlin gold in a way consistent with the elderly vision of responsible mining development, while creating jobs and economic benefits for the sure.
Melanie Hennessey: Romney communities as well as protecting the culture.
Melanie Hennessey: A few quotes are provided from the leaders of both Alaska Native corporations.
Melanie Hennessey: <unk> knowledge and guidance has been critical over the years through permitting sustainability and community engagement initiatives.
Melanie Hennessey: Yeah I'm actually appreciate.
Melanie Hennessey: There are meaningful input regarding their land and the significant economic needs required to sustain healthy living for their communities.
Melanie Hennessey: Our partners continued time-tested collaboration on the project.
Melanie Hennessey: Their full engagement was extremely valuable ensuring sustainable economic development throughout all phases of the project.
Melanie Hennessey: With these combination of attribute Donlin gold has the potential.
Two farm cornerstone economic sustainable development for the Y K region.
Melanie Hennessey: For many decades to come.
Melanie Hennessey: I will now touch on the highlights accomplish by Donlin gold.
Melanie Hennessey: Last year as well as some of the ongoing activities.
Turning to slide 14, the 2023 field program at Donlin was safely completed on schedule in July.
With almost two thirds of the direct tires coming from the Y K region.
The program included the completion of a comprehensive field work and geotechnical drilling required for the Alaska Dam safety certificates.
Melanie Hennessey: This involves data collection at numerous locations earmarked for water retention structures and the tailings storage facility.
Melanie Hennessey: The old work included drilling water retention structures seismic surveys and test block liner installation.
Melanie Hennessey: Additional field work included refining groundwater at the site with hydro geologic drillings that provided essential information for mine planning and design.
Melanie Hennessey: At the historic Placer site restoration work accomplished significant stream and pond habitat creation.
Melanie Hennessey: Continued restoration work with.
Melanie Hennessey: It will include anticipated aquatic life accent.
Melanie Hennessey: And for the 'twenty 'twenty four is field season.
Melanie Hennessey: Furthermore, with the support from both owners and third party consultants Donlin gold continued to advance the geologic and resource models.
Speaker Change: Vance Tradeoffs studies.
Speaker Change: We conducted extensive analysis on key project assumptions and designed components.
Validation.
They are critical role subsequent steps to advance the project further up the value chain.
Speaker Change: Through ongoing cooperation with Calista Teekay T in local communities, Nova cold patches.
Speaker Change: Upholds, our steadfast commitment to education.
Speaker Change: Energy wellness cultural preservation and environmental stewardship.
Melanie Hennessey: These principles are actively reinforced not only at the Donlin Gold project side, but also in the Y K communities as highlighted on slide 15.
Melanie Hennessey: For 2023, Donlin Gold's demonstrated this commitment by appointing additional community liaison representatives from four benches in the Y K region.
David ATA: Expanding the total to eight.
David ATA: Donlin Gold also establish three additional shares valued statements totaling 16 formalizing ongoing engagement.
David ATA: Reinforcing long term relationships.
David ATA: With the communities in the region.
David ATA: And then also supported various search and rescue teams and provided funding to the bathroom community Services Foundation and Special Olympics, Alaska just to name a few.
David ATA: We also concluded another successful in it for the long haul backhaul program for the sixth year in a row.
David ATA: This vital project is dedicated to the collection removal and safe disposal of household hazardous and electronic waste from the villages throughout the region, preventing an adverse impact on landfills and waterways.
David ATA: This year's program achieved significant milestones, including the removal of waste from fish Champs and the river.
David ATA: Donlin gold employees from three villages played a key part.
David ATA: And initializing the backhaul from the Yukon River.
David ATA: Furthermore.
David ATA: Donlin is collaborating with its Alaska Native partners on environmental initiatives, which include the monitoring and assessment of the conditions and management of salmon fisheries and the cost per claim in Yukon River watersheds.
David ATA: In the fourth quarter of 2023 specific projects opportunities for salmon population health were identified.
David ATA: Additionally, donlin gold's accorded the construction and maintenance of 300 miles of ice roads.
Austrian community engagement and providing essential access for emergency services.
David ATA: The island continues to support educational programs with a focus on enhancing opportunities through the Alaska resource education.
David ATA: After school activities Association, providing scholarships at the University of Alaska.
David ATA: Donlin gold is a federally permitted project on private land.
David ATA: Designated by law for mining activities. He was part of the 1971, Alaska Native claims settlement Act.
David ATA: Differentially differentiating factor for most other mining assets in Alaska.
David ATA: Permitting in the United States in Alaska.
David ATA: <unk> represents a significant and rigorous endeavor.
David ATA: Our success hinges on years of dedicated efforts to ensure a diligent transparent and inclusive process for all stakeholders.
David ATA: Slide 16 risks all the federal and state permits and certificates received to date.
Melanie Hennessey: We have received our federal permits from the Army Corps of Engineers, and the Bureau of land management.
Melanie Hennessey: 2018, followed by numerous state permits on this slide in subsequent years.
Melanie Hennessey: Donlin gold its owners and partners, but that's an intimate understanding of the project permitting and regulatory procedures and remain committed to supporting the federal and state agencies defend it such a rigorous permitting process.
Melanie Hennessey: Yes.
Melanie Hennessey: On slide 17, we present updates regarding state and federal permitting and mitigation activities.
Melanie Hennessey: None of these actions are a surprise and we were prepared and have prevailed in the courts.
Melanie Hennessey: The 2023 field program was focused on geotechnical and hydrological drilling together supplementary data for the dam safety certificate.
Melanie Hennessey: Okay.
Melanie Hennessey: Do you have work concluded in July and the team is on track to submit the preliminary design packages to the state.
Melanie Hennessey: First half of 2024.
Melanie Hennessey: In September 1st 2023, the Alaska Superior Court.
Melanie Hennessey: Reaffirmed the department of natural resources decision on Diamond Goldwater rates following an unsuccessful appeal.
Melanie Hennessey: In October 2nd 2023 Earth Justice appealed the superior court decision to the Alaska Supreme Court.
Melanie Hennessey: Filed their opening brief.
Melanie Hennessey: January.
Melanie Hennessey: And the federal litigation challenging Donlin, Gold's joint record of decision and permits including the 404 permit.
Melanie Hennessey: The U S Department of Justice is finalizing a compilation of the administrative record for the court.
Melanie Hennessey: Briefing schedule was agreed in the fourth quarter and will extend through the first half of 2024.
Melanie Hennessey: Yeah.
Melanie Hennessey: Despite these numerous challenges.
Melanie Hennessey: All appeals against the Donlin Gold project have been unsuccessful to date.
Thereby reinforcing our confidence in the thoroughness of the permitting process acknowledging the importance of readiness and preparation along with the unwavering support from Donlin gold and its owners.
Melanie Hennessey: We remain committed to backing all agencies and defending the permits.
Melanie Hennessey: With that.
David ATA: I will now turn the call over to our CFO David out of wealth to review the 2023 year end financial results.
David ATA: Dave.
David ATA: Thank you Greg.
David ATA: Turning to slide 19.
David: For the year, our net loss decreased by six and a half million from 'twenty to 'twenty, two primarily due to lower field expenses at Donlin gold and increased interest income partially offset by an increase in interest expense on the promissory note and higher G&A expenses.
Donlin gold expenses were lower in 2023 with field work and Geo technical drilling completed in July.
David: The dam safety.
David: Difficult applications and hydrate, the geologic drilling to support the mine planning and design.
David: Is it a large exploration drilling program in 2022.
G&A cost increased due to higher corporate travel costs legal expenses and additional P. S. T. N is granted to the company's executive officers as a retention incentive through June 30 of 2024.
David: Higher interest rates in 2023 impacted both the interest income on cash and term deposits.
David: And interest expense on the promissory note.
David: On slide 20.
Melanie Hennessey: Cash and term deposits increased in 2023 by 0.2 million with corporate administrative and our share of Donlin gold expenditures offset by.
Melanie Hennessey: Interest income of $5 7 million and the milk proteins were seeing from our new mine now of $25 million.
Melanie Hennessey: Compared to the prior year Donlin gold funding was lower due to the geotechnical and hydro geological drilling program compared to the exploration program in 2022.
Melanie Hennessey: Higher G&A costs resulted from increased travel and legal expenses.
Melanie Hennessey: The PSU awards that matured in 2023.
Melanie Hennessey: Not meet performance criteria. Therefore, no common shares were issued and no withholding taxes.
Melanie Hennessey: Were paid in 2023.
Melanie Hennessey: Our treasury remains strong with cash and term deposits totaling $125 7 million at November 30th.
Melanie Hennessey: And our intent.
Melanie Hennessey: The anticipated expenditures for 2020 for approximately $31 million, including $14 million of Donlin and 17 for corporate G&A.
Greg Lang: Greg ill turn it back to you.
Greg Lang: Thank you Dan.
Greg Lang: Hello, everyone.
Greg Lang: I want to take this as an opportunity to be able to assure.
Greg Lang: Our investors that we are as.
Greg Lang: As investor friendly as well as transparent as any company in the mining industry.
We have from the very outset since.
Greg Lang: Greg Lang, and I became CEO and chairman respectively laid out.
Greg Lang: Not just verbally but in writing everything that we would be doing for the years coming in terms of making Nova gold a pure play on what we regard as the greatest gold development story in the world.
Greg Lang: A tier one asset.
Greg Lang: In a tier one jurisdiction.
Greg Lang: At the same time, we've also been completely.
Greg Lang: Straightforward as gold Bulls.
Greg Lang: Representing a very very intelligent shareholder base, who share our convictions that we see.
Greg Lang: Nova gold as a pure play on Donlin as being the best risk reward story in the gold development space.
Greg Lang: No.
Melanie Hennessey: As you will have heard we've.
We've approved a budget.
Speaker Change: With our partners at Barrick There is a difference in terms of our point of view as to some of the steps forward, but we're taking the project up the value chain with them and.
Speaker Change: Conversations are ongoing and we'll see where they go.
Speaker Change: But they will not be going into a place that we're uncomfortable.
Speaker Change: Let me review the no the gold.
Speaker Change: Because I think it's extremely important for you to understand why as someone who's been in this story for 15 years and chairman for 12.
Speaker Change: There is no way.
Speaker Change: Literally no way.
Speaker Change: That.
Hi on behalf of the shareholders will allow.
Speaker Change: Allow any opportunity for our share price to be able to reach.
Speaker Change: 13, and a half and higher.
Speaker Change: We have a unique story in fact, you've heard it before but let me just reiterate this.
When I ask investors.
Speaker Change: Which.
Speaker Change: Asset <unk>.
Speaker Change: Has the combination.
Speaker Change: Of.
Speaker Change: Size.
Speaker Change: Great.
Speaker Change: Which means low opex as a producer which has 39 million ounces already identified on 5% of the overall land package in fact, 30% of what some strike and our drill programs have also hit.
Yep.
Speaker Change: We know this is going to be much bigger.
Speaker Change: And candidly so do some of the major mining companies.
Speaker Change: There should be no doubt in anyone's mind that if they buy Nova gold at these prices they are buying it well below the price that anyone would pay for it which should give them some comfort.
Speaker Change: And if in order to impress upon people that these are prices, which are the product of.
Speaker Change: Special circumstances that will find resolution.
Speaker Change: All options are on the table, including stock buybacks as well as the promotion of the value of these assets and very very different ways.
Speaker Change: This is a pledge that I make to you I've been in for 15 years I'm happy to be in it for another 15 years everything that's happened since I became an investor in this story has only reinforced my view that donlin.
Speaker Change: Got.
Speaker Change: That donlin is the new Carlin and when I make references to these things I'm, making reference to great assets in Great Places.
Speaker Change: Nova gold as a gold company with the size the grade the exploration potential being a pure play on what has the potential to be a million ounce producer.
Speaker Change: Among the lowest cost.
Speaker Change: Producers with Fantastic Native Corporation partners, with whom we enjoy.
Speaker Change: Excellent.
Relations and fidelity and solidarity.
Speaker Change: And most importantly in today's world.
Speaker Change: We are in and address where.
Speaker Change: If you go to sleep at night.
You know that when you wake up in the morning.
Speaker Change: You haven't eaten literally or figuratively.
Speaker Change: You know that there are no insurgents youll know that there are no missile strike you.
Speaker Change: You know that you're not dealing with kleptocrats, where the rule of law is not a novelty which shouldn't be overthrown.
Speaker Change: At will.
Speaker Change: Where private property is enshrined the second largest gold producing state in the United States, where we enjoyed the most wonderful relationships with our Native Corporation partners, who really really appreciate the stand which we're taking on this story.
Speaker Change: So what's our treasury is sacred.
Speaker Change: We don't oppose drilling.
Speaker Change: To continue drilling to be able to show me.
Speaker Change: My belief that we can increase this resource.
Speaker Change: By a huge amount.
Speaker Change: But for the time being our view.
Speaker Change: Circumstances could change, but our view is our shareholder treasury, which gives us years of runway is.
Speaker Change: Is part of our overall profile.
Speaker Change: And we like it we haven't needed to raise outside capital since 2012, that's extraordinary.
Speaker Change: That's because every promise that we ever made.
Speaker Change: In taking us away from being adult copper company to a pure gold company with the spin off.
Speaker Change: Of Nova copper now trilogy, with the sale of Galore to Newmont.
Speaker Change: Has been affirmed.
Speaker Change: All of our shareholders.
Speaker Change: No.
Speaker Change: We have always kept our promises.
Speaker Change: And that we have been transparent to the point of verbosity, especially.
Speaker Change: Especially on my part obviously, because remedy isn't my strong suit in order to hold fast with them well.
Speaker Change: I will remind them.
Speaker Change: The owner lives above the store at the quotation from one of the most powerful fund managers in the world about his take on the way that I view Donlin.
Speaker Change: It is a passion project.
Speaker Change: And will be pursued as such you will not be seeing them.
Speaker Change: The absence of earnestness in seeing our share price multiply.
Melanie Hennessey: In fact.
If I have.
Melanie Hennessey: Any sense of forecasting at all I would say that one of the greatest trades in the gold industry.
Melanie Hennessey: We will prove to be long, Nova gold and short some others, who don't share all of our attributes and I'm not talking about juniors.
Melanie Hennessey: Talking about majors.
Melanie Hennessey: Well.
Melanie Hennessey: Let's continue to talk about some of the macros.
If we go to slide 24.
Melanie Hennessey: We're setting up for a perfect storm in gold.
Melanie Hennessey: And for US, it's very obvious to wait to play it is to be able to give yourself the maximum leverage to the thesis and scrubbed that thesis is find the right asset that will stay with you and.
Melanie Hennessey: Allow you to reap the fruits of that leverage.
Melanie Hennessey: For us it.
Melanie Hennessey: Donlin and nothing has changed in our view to the country. When we look at things that are going on in Asia Africa South America.
Melanie Hennessey: We know what we have we have the most beautiful.
Melanie Hennessey: We have the most beautiful girl in the world and she's with us.
Melanie Hennessey: No no I, probably just got canceled but in any event as far as gold is concerned.
Melanie Hennessey: I think that what we're seeing is a slow motion breakout.
Melanie Hennessey: When gold goes past and I don't like to talk about specific prices or even timing, but when you look at this chart I think that it's pretty clear that you have beautiful chart formations from a plastic cup and saucer to multiple.
Top.
Melanie Hennessey: The question is are the fundamentals there to take gold to what I believe will be a new equilibrium level of between three and 5000 and I know that that sounds like a very wide range, but that's because I could see gold.
David ATA: In certain circumstances trading five swinging to three going back to five and the truth is there's no reason for me to make higher forecast in that but gold could go much much higher than that.
David ATA: This is just on supply demand fundamentals that I make the forecast that I do.
David ATA: But I believe that.
David ATA:
David ATA: And as much as patriotism is the last refuge of the scandal.
David ATA: Factors such as.
David ATA: Refuge for the gold bull, they're not necessary.
David ATA: The supply pressures.
David ATA: Donlin is twice the average grade of the mines that are being proposed to the extent that there are any major mines.
David ATA: Production costs, we've seen rising the exploration budgets are completely inadequate.
David ATA: The discovery rates are probably at an all time low I love drilling them I'm always drilling.
David ATA: And the fact is that.
David ATA: I'm in a very very small minority, which has never faced me.
David ATA: I made 100 times my money on drilling.
David ATA: In <unk>.
David ATA: Silver.
David ATA: 100 times.
David ATA: One P G m's.
David ATA: 100 times on hydrocarbons.
David ATA: I would match.
David ATA: Our.
David ATA: Track record.
David ATA: With all but a few other.
David ATA: Not just smart, but also very very lucky people and we acknowledge look.
David ATA: In the same ways, we acknowledged the luck that had no the gold.
David ATA: Falling into our laps when we came in and rescued it.
David ATA:
David ATA: Stock went from three to 15, you will see it happen again, if not much much higher.
David ATA: And I will do everything within my power to make that forecast come true.
David ATA: Now the reality is if you go to slide 25, I'm I'm not.
David ATA: Going to blame our performance on the.
David ATA: The fact that gold equities.
David ATA: I have greatly underperformed bold itself.
David ATA: Yes.
David ATA: That's not uncommon in commodities, because you often see that the physical demand.
David ATA: Increases from certain level and when you get the investor sentiment. It then flows into the equities that are correlated to those.
David ATA: Commodities or currencies in the case of gold.
David ATA: Okay.
David ATA: The things that has changed is that.
David ATA: When I got into the business 30 years ago.
David ATA: The value of all the precious metal shares in the world.
David ATA: We're about the value of Coca Cola.
David ATA:
David ATA: And now the value of all the precious metal shares in the world is a fraction of many many many.
David ATA: Technology companies. So the question is.
David ATA: Well technology come down to Earth in some sense and I don't mean that in terms of will technology stocks fall I mean that in the sense that.
David ATA: What is the status of gold in the World well for me the fact that the central banks.
David ATA: Have remained huge buyers as you can see on slide 26 tells me.
David ATA: That bolt has legs central banks are not stupid money they may be forced by their governments to do stupid things.
David ATA: Less the global economy fall, apart and but they know what they have on their balance sheets.
David ATA: And they are voting with their feet with gold.
David ATA: I want to be on their side of the table the path of least resistance for a central bank bureaucrat.
David ATA: Is to go with the trend.
So when you have the Chinese and the Indians competing over.
David ATA: Who is going to be the largest consumer when you have central banks as buyers.
David ATA: It's very very clear that the trend is our friend.
David ATA: At some point.
David ATA: You will see a catalyst that will have a big impact on the equities.
And it will be impossible to get into them.
David ATA: <unk> that you were seeing now.
Speaker Change: It will be as one with put it years ago like getting Hoover dam through a garden hose because there are a lot of funds that can really only by equities.
Speaker Change: And the solid performance that they will show.
Speaker Change: Will attract more and more money.
Speaker Change: Just the fact that financial assets are amongst the only asset that people want to buy much much more of as they get dear.
Speaker Change: The equities market.
Speaker Change: In the Golden Platinum and silver space.
Speaker Change: <unk> is highly undervalued.
Speaker Change: And as you heard our view is that the place to be is in fabulous assets tier one assets in tier one jurisdictions, you've got to have those in fact, when we see what's happened in Europe, when we see what's going on in the Middle East and Asia.
Speaker Change: And.
Speaker Change: South America.
Melanie Hennessey: The reality is the geopolitics trumps geology, and I love geologist.
But if you're not in a place.
Melanie Hennessey: Where the rule of law is not sacred.
Melanie Hennessey: My worst fear for those who are is that ironically, they will be right on gold.
Melanie Hennessey: And by being right on gold when gold is reviewed as a strategic asset like we are seeing happen with lithium.
Melanie Hennessey: Those assets will be the object of.
Melanie Hennessey: Avaricious.
Melanie Hennessey: Yeah.
Melanie Hennessey: Local governments.
For want of a better word.
Melanie Hennessey: And as you know I made my bones in Bolivia, Zimbabwe South Africa.
Melanie Hennessey: I sold Kibali to Barrick.
David ATA: I'm not squeamish I wish the largest holder of mineral rights.
David ATA: In Pakistan focused on Baluchistan, a country that I.
David ATA: <unk> studied 35 years ago, when I was doing my doctorate on counterinsurgency still studying it.
David ATA: I know these places.
David ATA: And I really do believe that for me as someone who voted with their feet.
David ATA: The best place to be.
Speaker Change: If the United States, Canada, Mexico, So long as it stays part of NASCAR Australia.
Speaker Change: Okay.
Speaker Change: That's what you want to be I mean, there are a few other odds and ends in Europe et cetera, but you want to be in places, where you can sleep and the reason for that is if you can sleep well.
Speaker Change: You can hold on for when the reversal comes.
Speaker Change: And if past is prologue in my experience, it's when you least expect it.
Speaker Change: And the stock doubles triples, and then people start to cotton on and that's where you make your 10 bagger.
Speaker Change: When the fundamentals catch up with the asset quality and the safety of jurisdiction in the hands of our management team, but in our case.
Speaker Change: Were instrumental in building Cortez in Nevada.
Speaker Change: Richard Williams brought but it'll be a slow into production.
Richard Williams: In the Dominican Republic, just in time for them to change the rules of course, but it's still not just mine, but one that's being extended.
Richard Williams: I, our co owner in Donlin Barrett.
Richard Williams: Our expertise in the Americas.
Richard Williams: Truthfully is second to.
Richard Williams: None.
Richard Williams: They could run a larger gold company.
Moving to slide 27, I think I covered this but this is a very very.
Richard Williams: Sad chart for the industry good for us sad for the industry.
Richard Williams: Gold reserves have been falling.
Richard Williams: It's possible that we can see reserves that may have been uneconomic now start to come back in.
Richard Williams: But that implies higher gold prices. So that's a win win if that happens.
Richard Williams: One thing that is not happening is that grade has plunged. If you look at that chart on the right. What you'll see is donlin is where the industry was in 2456 20.
Richard Williams: 20 years, hence the industry is going towards a gram if not lower.
Richard Williams: Some of the best drill results that were developed in the gold space.
Richard Williams: Over the last two drill programs, which according to Barrick Derisked. The geology, we think it was always be risk, but you know so what.
Richard Williams: Happy partner is a good thing.
Richard Williams: We delivered some of the best drill results in the entire industry.
Richard Williams: You heard from us at least.
Richard Williams: And we're very very comfortable with the fact that we have the best asset.
Richard Williams: Now something else that I want to mention I'm not going to.
Richard Williams: Predict a recession.
Richard Williams: I'm, not an economist, which probably means I'd have a better chance of predicting a recession.
Richard Williams: But.
Richard Williams: I know.
Richard Williams: Global.
Richard Williams: Great.
Richard Williams: Well.
Richard Williams: There are a lot of things I don't know, 99% of things I don't know and candidly business use is the least interesting of my activities unless it's related to gold.
Richard Williams: But I can tell you something.
Richard Williams: Okay.
Richard Williams: Recession can come from many places.
Richard Williams: You could have a financial crisis in China.
Richard Williams: For argument sake.
You could have in 19 and 29 in China, which could have enough go in effect on the rest of the world.
And the way that.
Richard Williams: The financial crisis in 19, and 29 in the United States had a knock on effect all over the world.
Richard Williams: And led to.
Richard Williams: Global conflict, let's put it like this.
Richard Williams: We already have an unprecedented conflict in.
Richard Williams: Europe.
Richard Williams: We have unprecedented.
Richard Williams: Actions in the middle East that are.
Richard Williams: Beyond barbaric.
Richard Williams: In terms of what.
Richard Williams: It was carried out in October and is a game changer in many ways I won't go into that here.
Richard Williams: But I have given some interviews on that subject over the last couple of months.
Richard Williams:
Richard Williams: But one of the things that people.
Richard Williams: Must take into account is that there is a chance for.
For recession.
Richard Williams: And if there is the rush to exit.
Speaker Change: He is going to be absolutely unprecedented because the world Hasnt had a real recession in this state of indebtedness and it may very well come from financial reasons or it could come from a combination of geopolitics and finance.
I'm not going to prefer them any more specific instances accept and perhaps private conversations.
Speaker Change: Suffice it to say.
Speaker Change: You want to have gold in your portfolio I own it because I love the supply demand equation I love. The fact that the gold industry is paper challenged and that that is.
Speaker Change: For my lifespan as an investor irreversible.
Speaker Change: So I like it for a lot of positive reasons.
Speaker Change: But my background is as a historian.
Speaker Change: Counter insurgency military history.
Speaker Change: And the World has never been this dangerous since the end of the second World War.
Speaker Change: So when I look to own something whether its goals are up my conviction that goal will lead and other factors will lead to Nova gold multiply because it's got everything I want in a place where I want it to be.
Speaker Change: It comes from.
Speaker Change: <unk> is a massive massive conviction.
Speaker Change: And as all of our shareholders know about Greg and myself the whole management team.
Greg Lang: We don't just talk the talk.
Melanie Hennessey: We walk the walk.
Melanie Hennessey: Watch this space, it's going to get really interesting.
Melanie Hennessey: The most important thing for our investors as you can see on slide 29.
Melanie Hennessey: We have enormous leverage to gold.
Melanie Hennessey:
Melanie Hennessey: And that is something that we have to reiterate but again its leverage.
Melanie Hennessey: In a place where you can keep the fruits of the leverage.
Melanie Hennessey: And there are many places that if gold does what I think it's going to do.
Melanie Hennessey: They're not going to let you keep it.
Melanie Hennessey: We're seeing it with lithium we're seeing it in some places with copper.
Melanie Hennessey: We will see it in gold not in NAFTA not worried about that.
Melanie Hennessey: All of what I've expanded.
Melanie Hennessey: It's very very well known to our large shareholders.
Melanie Hennessey: They've heard me say it publicly to all of you.
Melanie Hennessey: Everyone knows that if they want to speak to me about any subject.
Melanie Hennessey: They can.
Melanie Hennessey: And.
I have no lack for words.
Melanie Hennessey: But I would also like to take the opportunity to thank our shareholders for.
Melanie Hennessey: Sure.
Melanie Hennessey: Being not only stalwarts.
Richard Williams: And faithful their solidarity in.
Richard Williams: No pun intended fidelity is enormously appreciate it.
Richard Williams: I've heard people sold their shareholders in the gold space for short term ism.
Richard Williams: I've never encountered that I mean people trade and that's fine.
Richard Williams: But the most faithful shareholders and co investors and partners that I've ever had whether they are sovereign wealth fund partners.
Richard Williams: They are institutional investors and families.
Richard Williams: The most faithful.
Our.
Richard Williams: The precious metals investors and.
Richard Williams: I would go into battle for all of these shareholders. Indeed, any one of these shareholders.
Richard Williams: And so as I said.
Richard Williams: Watch this space.
Richard Williams: It's going to be a very very interesting opportunity for us to be able to put a spotlight on.
Richard Williams: On an asset that is not.
Richard Williams: Not just in its size grade exploration potential production profile.
Richard Williams: And jurisdiction.
Unique.
Richard Williams: But one that is wildly undervalued.
Richard Williams: And with that I. Thank you and obviously, we welcome any questions that you may have.
Richard Williams: [laughter].
Yeah.
Okay.
Richard Williams: Thank you Chuck can you prompt group for those that have questions.
Richard Williams: Thank you.
Richard Williams: Joining the question queue you May Press Star then one on your telephone keypad, you will hear a tone acknowledging your request.
Richard Williams: Youre using a speakerphone please pick up your handset before pressing any keys to withdraw your question. Please press Star then one.
Richard Williams: Sure. Thank you.
Richard Williams: The first question comes from Lucas pipes with B Riley Securities. Please go ahead.
Richard Williams: Thank you very much operator, good morning, everyone.
Richard Williams: Tom You mentioned that there are some differences.
Richard Williams: I couldn't write down the exact wording you used between you and your joint venture partner and I wondered if you could maybe elaborate on that.
Richard Williams: Kind of where you.
Richard Williams: You see that shared common golf and where there may be some temporary differences at this time. Thank you so much.
Greg Lang: Well I'll, let I'll, let Greg speak to the shared common goals because they are technical aspect.
Greg Lang: Both of us.
Our committed to in taking Nova gold up the value chain, which is their terminology as well as ours.
Greg Lang: As we put in.
Greg Lang: The press release and as we've said.
Melanie Hennessey: We've been making we've been making a representation together as partners for two years.
Melanie Hennessey: To the market.
Melanie Hennessey: And to the native corporations.
Melanie Hennessey: That when the drillings over we go to.
Melanie Hennessey: Usability.
Melanie Hennessey: And that is what we are going to stick with because our strategy.
Melanie Hennessey: Which has been articulated is that we're not in a rush to go into production until the economics justify it.
Melanie Hennessey: And that they will surely come and I have no doubt that donlin, which is a generational mine will be running for many many many decades I have no doubt about that and I have a sense that our co owner.
Melanie Hennessey: Uh huh.
Melanie Hennessey: He was likewise.
Melanie Hennessey: What I would say is this.
Melanie Hennessey: Okay.
Melanie Hennessey: We've made.
Melanie Hennessey: What we considered to be commitments.
The only constraint is.
<unk>.
Melanie Hennessey: The fact that.
Melanie Hennessey: We have a partner.
Melanie Hennessey: Our partner wants to continue drilling.
Melanie Hennessey: The geology.
Melanie Hennessey: According to our partner.
Melanie Hennessey: Has been derisked satisfied with your body.
Melanie Hennessey: The drilling is.
Melanie Hennessey: In order to a mine plan.
Melanie Hennessey: Our attitude is we can do that in parallel with the feasibility study.
Melanie Hennessey: And that's where we are it's really that simple.
Melanie Hennessey:
Melanie Hennessey: Our.
Melanie Hennessey: Management team.
Melanie Hennessey: Great who was.
Melanie Hennessey: The president of Barrick Gold North America for eight years before joining us because he felt that donlin.
Greg Lang: Was the best development asset within Barrick.
Greg Lang: Richard Williams, who as I mentioned was a check on.
Richard Williams: On the Pueblo Viejo project.
Richard Williams: For Eric.
Eric: Eric and.
Goldcorp at the time.
Eric: Now new months.
Eric: He when he finished that project.
Greg Lang: He joined with Greg and Nova Gold because he was asked by an analyst for one of our largest shareholders why did you leave.
Greg Lang: And he said.
Greg Lang: Because I want after having built Pueblo Viejo.
Greg Lang: Want to now build them.
Greg Lang: The greatest gold mine in the World and Thats Donlin.
Greg Lang: Okay.
Greg Lang: And both of them their attitude is this gives us leverage to the.
Greg Lang: The greatest asset and the Barrick portfolio and candidly I think it's the case.
Greg Lang: And if you look at what.
Melanie Hennessey: Donlin brings to <unk> reserve base.
Melanie Hennessey: Either they are 50% share all of it.
Melanie Hennessey: <unk>.
Melanie Hennessey: You can see that.
Melanie Hennessey: They're not dumb.
Melanie Hennessey: You know.
Melanie Hennessey:
Melanie Hennessey: They.
Melanie Hennessey: Can stick with and think to drill.
Melanie Hennessey: So we don't have to our budget is settled.
We're not in conflict.
Melanie Hennessey: We know what we want.
Melanie Hennessey: We believe that what we want is what has been promised and what is best for us.
Melanie Hennessey: Everyone.
Speaker Change: Corporations, our shareholders and candidly barrick shareholders unless their agenda is different from ours.
Speaker Change:
Speaker Change: Our strategy has always been very simple.
Speaker Change: No wine before its time.
Speaker Change: We've articulated it we've written that our strategy is get the feasibility study done so that when the economics lineup. We're in a position to be able to put together the financing that will enable.
Speaker Change: Donlin to go into production.
Speaker Change: That's what we want our Native Corporation partners has been unbelievably patient.
Speaker Change: But this is a game changer.
Speaker Change: For the entire region.
Speaker Change: And the social license that we enjoy.
Speaker Change: Is candidly more valuable to us than the metal itself.
Speaker Change: Equally our shares are more valuable to us than the metal itself, which is why we will take.
Speaker Change: All measures necessary.
Speaker Change: To improve the share price performance.
Speaker Change: So it's an impasse that can just simply be shrugged off for the time being.
Speaker Change: Both parties can come to terms they know what we want we know what they want.
Speaker Change: If we don't budge.
Speaker Change: There's no drilling.
Speaker Change: If they don't budge.
Speaker Change: No feasibility for the time being.
Speaker Change: But at the end of the day like I said I've been in this for 15 years.
Speaker Change: I suffer from the opposite of deal fatigue, I am more excited.
Speaker Change: And this isn't broke.
Speaker Change: Though I am more excited about donlin and I've ever been when.
Speaker Change: When I see what's going on in the World I have no doubt that our mantra in leverage in a place where you can keep the fruits of the leverage is best.
Speaker Change: Expressed via <unk>.
Speaker Change: Gold development stocks.
Speaker Change: And great ones with great assets in Safe places.
Speaker Change: And I have a feeling that people are cutting hang on to that in not just one but major mining companies.
Melanie Hennessey: We're clearly undervalued relative to what the share price can do and as I said I think long Nova Golden short some others will be the best trade in the gold space.
Melanie Hennessey: But Greg could you answer perhaps you know some of the things for which are you know I don't have a natural aptitude.
Melanie Hennessey: Yes.
Greg Lang: Sure Lucas.
Greg Lang: Next year, we've approved and are well over $28 million, which is.
Still a substantial budget for donlin and this will.
Greg Lang: Vance, our resource modeling and mine planning work.
Greg Lang: We've got a pilot plant underway right now.
Greg Lang: Actually a fairly expensive undertaking doing some regional infrastructure support planning hydrology, and just related activities as well as our ongoing defensive permits and our extensive community relations programs.
Melanie Hennessey: Yes, there's two areas of the budget that we are still actively discussing with our partner <unk>.
Melanie Hennessey: One is to finalize the scope of work for the update to the capital and operating cost estimate and the other as has been mentioned is two <unk>.
Melanie Hennessey: Debate the merits.
Melanie Hennessey: Drill program and improve it if appropriate.
Melanie Hennessey: You know, we're very mindful of our treasury, but I think.
Melanie Hennessey: 50, 50 partnership, but I'm confident that reaching now worked our way through that experience.
Thank you.
Melanie Hennessey: Tom and Greg. Thank you very much for the additional color and I wish you and the entire team best of luck. Thank you.
Thank you Lucas keep the faith keep the faith.
Melanie Hennessey: We're going to Astonish Ya.
Melanie Hennessey: Okay.
Melanie Hennessey: The next question comes from Don Demarco with National Bank Financial. Please go ahead.
Melanie Hennessey: Thank you operator and good morning.
Greg Lang: Thompson and Greg.
Greg Lang: Our first question is.
Greg Lang: Greg I heard you talk about the size.
Greg Lang: Mineralization is impressive strike of eight kilometers.
Greg Lang: Over which only the resource currently serves only covers just a little more than three kilometers.
Greg Lang: To what extent have you tested the balances that eight kilometer mineralized trend.
Greg: Well, it's Greg.
Greg: Great.
Greg Lang: Ore grade intercepts, so it really all up and down the trend.
Greg Lang: We'll follow up as appropriate and there's a slide <unk>, we can locate one of the oldest slides in our on our webpage for is it shows very good potential there for long strike, but I think the potentially in the near term is really what we see at depth primarily in the Louis deposit.
Greg Lang: Some of our drilling for monarch, two seasons ago encountered great.
Greg Lang: Great great good mineralization well below the bottom of the known pits. So as the best potential is in the near term is expand the existing pits and then move out and along strike.
Greg Lang: In other areas of the claim block.
Melanie Hennessey: Okay. Thank you and so if you were to drill and increase your resourcing donlin adapt their long strike by a measurable amount.
Melanie Hennessey: The incremental ounces simply be added to the end of the mine life or could this change the development approach as you see it now.
Melanie Hennessey: Oh good.
Melanie Hennessey: Probably a little too soon to answer that question I mean, it could do both it could increase the.
Melanie Hennessey: Secondly, it will extend the mine life and then at some stage the owners were.
Melanie Hennessey: As discussed the merits of building a larger facility. So I think we've just got to get our arms around and quantify the potential.
Melanie Hennessey: Okay addressed the issue.
Melanie Hennessey: <unk>.
Melanie Hennessey: Thank you and just as a final question then do you have a process for reaching consensus or settling any strategic differences of opinion with your partner.
Melanie Hennessey: We maintained an ongoing dialogue.
Melanie Hennessey: Yes.
Bob: 50, 50 partnership Bob did like a marriage, it's a little give and take and I think we've always been successful.
Bob: Successful in the past and I think we will get there again this year.
Bob: Okay, that's great.
Bob: Thanks, So much and good luck in 2024 I appreciate it.
Bob: Thank you.
We have two questions from the webcast some of them have been answered maybe Greg if you can speak to them.
Bob: D and E trading below the nev and NSF.
Greg Lang: Rory on Capex or future dilution that would be great.
Greg Lang: Hello.
Greg Lang: I'll start with that question and probably lateral at the time I mean, we're all disappointed that.
Greg Lang: When the share price underperforms, especially for no apparent reason, but.
Greg Lang: Our share price really doesn't.
Greg Lang: We've got we've got a strong treasury.
Greg Lang: Pretty solid work plan ahead of US this year and there is the share price really is.
Greg Lang: Not directly connected to our.
Greg Lang: The future capital of the Donlin project.
Greg Lang: Tom anything you'd want to add to that.
Greg Lang: Sure.
Greg Lang:
I'm not worried about a dilution we have a strong treasury.
Greg Lang: You have a management team which is evidenced.
Greg Lang: With our red lines that.
Greg Lang: We are only going to spend capital.
That we believe is being properly spent by the way as to the previous question.
Greg Lang: I wanted to drill the entire district for 15 years.
Greg Lang: I do not believe that Barrick.
Greg Lang: <unk> had that.
Greg Lang: The same sense of interest.
From the time that you have to remember.
David ATA: They launched a hostile takeover in 2006.
Melanie Hennessey: A couple of years before we became a shareholder.
Melanie Hennessey: And.
Barrick's intention.
Melanie Hennessey: With split 10 drill rigs on the the project and although this is a forward looking statement of some sort I'm sure. So please disregard it.
Melanie Hennessey: Genuinely believe that Theres, a 100 million ounces, there along strike to depth.
Melanie Hennessey: And with other targets and even my friends.
Melanie Hennessey: At Barrick.
Melanie Hennessey: I will acknowledge that you know I've made my hundred xs through the drill bit silver platinum those were all exploration energy.
Melanie Hennessey: Grassroots exploration I surround myself with great geologist.
Melanie Hennessey: And the geologists who've made some of my biggest discoveries are for our team.
Melanie Hennessey: She is 100 million ounces at Donlin.
Melanie Hennessey: And he's always been right.
Melanie Hennessey: When it comes to these things and use the brand name and the geology industry.
Melanie Hennessey:
Melanie Hennessey: Okay.
Melanie Hennessey: So I would love to drill more.
Melanie Hennessey: I just want to make sure that.
Melanie Hennessey: And the board wants to make sure we United on this.
Melanie Hennessey: So you understand we are completely United on you drill when it adds value.
Melanie Hennessey: The ore body is the ore body as it exists today.
Melanie Hennessey: Is what it is and we think it's fantastic.
Melanie Hennessey: We don't need to.
Melanie Hennessey: To squander, our social license.
Speaker Change: Perhaps in combination with a.
Speaker Change: Moving to feasibility.
Speaker Change: And Barrick talking about the asset.
Speaker Change: The way we do.
Speaker Change: Sure we're open.
Greg Lang: Personal this is strictly business and as Greg said these are in constant contact with the with Barrick on multiple levels.
Greg Lang: Not all style.
Greg Lang: But you know we have to keep faith with who we are what credibility do I have when I say I'm going to do everything within my power.
Greg Lang: Two.
Greg Lang: Preserve the company's profile raised its share price husband, its treasury, which gives us years.
Greg Lang: And by the way.
Greg Lang: The the challenge that we have.
Greg Lang: Is that it's not about dilution, it's not about any of that stuff. The challenge that we have is that we're so undervalued.
Greg Lang: Relative to what the real value is in the market.
Greg Lang: That someone.
Greg Lang: Someone could.
Greg Lang: Get the wrong idea.
Greg Lang: And think that they can get hold of us.
Greg Lang:
Greg Lang: 50, or 100% ownership whatever it is of donlin.
Greg Lang: Is accretive to it.
Greg Lang: Every mining company in the World at this point.
Greg Lang: <unk> on every metric reserves grade production profiles not to mention that if I'm right that Hoover dam through a garden hose metaphor will be in.
Greg Lang:
Speaker Change: North American assets, firstly, they wont be in Africa, they wont be in Chunky places I don't believe so.
And I voted with my feet by moving from those places.
Speaker Change: Back home.
Speaker Change: We're.
Speaker Change: I don't feel that I'm going to experience that great Woody Allen quote I'm not afraid of dying I, just don't want to be there when it happens.
Speaker Change:
Speaker Change: I Love, what we have.
Speaker Change: And the key to being a successful investor in my view.
Speaker Change: Is <unk>.
Speaker Change: Being having so much conviction that youre willing to stay in it.
Melanie Hennessey: Until the world comes around to it I think that could very very well happen.
Melanie Hennessey: In the nearer term than people imagine for a variety of reasons company specific as well as in the market, but you know that then.
Speaker Change: A cappuccino.
Speaker Change: The price of a cappuccino that's it that's all you you need but what I would say is that we.
Speaker Change: We are more apparel of being an unwanted takeover targets.
I believe it would be.
Speaker Change: Foolish.
Speaker Change:
Speaker Change: But we.
Speaker Change: We would be more of a target of that then of.
Speaker Change: Running out of money.
Speaker Change: Does that answer your question.
Speaker Change: Thank you Tom I appreciate the response.
Speaker Change: A webcast question.
Greg Lang: And Greg is the litigation worrisome to you can you speak to some of the engagement efforts and steps that have been taken with the state and federal agencies.
Speaker Change: Sure.
Greg Lang: Work in the mining industry for many decades in North America and mitigation.
Greg Lang: Wasn't always this way, but probably for the last 15 years or so mitigation is a normal part of the permitting process.
Greg Lang: You're basically litigious society and.
Greg Lang: Well we are.
Greg Lang: We don't really like it but we know it's common we prepared for it we've had great counsel on board and we feel we anticipated this even before we got a record of decision in 2018.
Greg Lang: And we're we've prevailed.
Greg Lang: Four major pieces of litigation as it works its way through the courts, we prevailed on every ruling to date.
Greg Lang: Do I have any fear about that going forward no I think we will we will continue to prevail.
Greg Lang: Sure a lot of people are curious what what it costs to defend your permits.
Greg Lang: Frankly, it's a pretty significant amount of money in our budget to <unk>.
Greg Lang: Actively defending the permits that we.
Greg Lang: Got through a very disciplined process, so I'm not worried about it at a cost of doing.
Melanie Hennessey: Our business and we will we will prevail.
Melanie Hennessey: Great. Thank you and that is all the questions we have today.
Greg Lang: Greg if you want to say some final remarks.
Greg Lang: Well everyone. Thank you for joining our call today, we've got a pretty.
Greg Lang: Active year ahead of us and we will keep everyone appraised as our work on phones in India.
Greg Lang: Potential additions to the approved budget at Donlin.
Greg Lang: Thank you for your time.
Greg Lang: This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
Greg Lang: Yeah.
Greg Lang: [music].
Greg Lang: [music].
Greg Lang: Yeah.