Q4 2023 NovaGold Resources Inc Earnings Call
Thank you for standing by this is the conference operator welcome to the Nova go to 'twenty to 'twenty three 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.
On today's call we have novel Gold's Chairman, Dr. Thomas Kaplan, Greg Lang, <unk>, President and CEO, and David Auto well, although both vice President and CFO.
Melanie Hennessey: At the end of the webcast, we will take questions by phone.
Melanie Hennessey: Additionally, we will respond to questions received by email.
Melanie Hennessey: 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.
Melanie Hennessey: I will now turn the presentation over to our President and CEO, Greg Lang Greg.
Greg Lang: Thank you Melanie and good morning, everyone.
Greg Lang: I haven't provided a summary of our 'twenty 'twenty 'twenty you're anglogold.
Melanie Hennessey: I'd like to start today's call with a brief overview on slide five.
Greg Lang: Which explains why we and our shareholders consider donlin gold a tier one asset.
Greg Lang: Hosting approximately 39 million ounces of gold.
<unk> grade of more than twice the industry average at two in a quarter grams and a projected mine life of almost 30 years Donlin gold holds the potential to be a significant and cost effective producer.
Greg Lang: Furthermore, outstanding exploration potential exists beyond the known resource areas.
Greg Lang: Rob Donovan's extensive land holdings.
Greg Lang: Project is also located on private land designated for mining in Alaska.
Rob Donovan: World, leading jurisdiction known for responsible mining practices.
Rob Donovan: Our enduring partnerships and a life of mine agreements with Joe Mr and the Teekay Corporation.
Rob Donovan: The position Darwin frame humbly honest Hal.
Rob Donovan: Oh development.
Rob Donovan: It is important to put it into context, the company's accomplishments since the reorganization in 2012.
Rob Donovan: Especially for those who are new investors and less familiar with us.
Rob Donovan: 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.
Rob Donovan: Namely to unlock the value of Nova go with high quality assets.
Rob Donovan: For our shareholders and advanced Donlin.
Rob Donovan: Pure gold play.
Rob Donovan: Offering our unique and Belmont and maximum leverage.
Rob Donovan: Looking at slide seven.
Rob Donovan: Alaska offers an excellent environment for mining.
Rob Donovan: And it was one of the world's safest jurisdictions.
Rob Donovan: Ranks as the second largest gold producer in the U S with a well defined permitting process.
Rob Donovan: Numerous companies have achieved success here and the government is very supportive and recognizes the importance of responsible natural resource development.
Rob Donovan: Notable performance in the areas of environmental stewardship.
Rob Donovan: Health and safety, social and community engagement and corporate governance are featured on slide eight.
Rob Donovan: Health and safety of our people.
Rob Donovan: This is our highest priority with over 10 years.
Rob Donovan: Zero lost time accidents at the project site.
Rob Donovan: Work force is comprised mostly of local hires.
Rob Donovan: Throughout 2023, we will continue to monitor reflect on and refine our environmental social and governance performance.
Rob Donovan: Maintaining strong records of environmental health and safety of Darwin.
Rob Donovan: Spanning all investments and partnerships with the people of the Y K region.
Donlin attributes: I'll touch on Donlin attributes.
Donlin attributes: 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.
Donlin attributes: Looking at the group Gold development project in the Americas on slide nine.
Donlin attributes: And gold is by far the largest.
Donlin attributes: Global gold production continuing to decrease it is clear the industry needs projects of scale greed and longevity.
Donlin attributes: Right out multiple price cycles.
Melanie Hennessey: What's the grade of more than twice the industry average for 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 P. K 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: Immensely 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: Near 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.
Melanie Hennessey: To form 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.
Melanie Hennessey: Turning to slide 14, the 2023 field program at Donlin was safely completed on schedule in July.
Melanie Hennessey: With almost two thirds of the direct hires coming from the Y K region.
Greg Lang: The program included the completion of a comprehensive field work and geotechnical drilling required for the Alaska Dam safety certificates.
Greg Lang: This involves data collection.
Greg Lang: Ms locations earmarked for water retention structures and the tailings.
Greg Lang: Storage facility.
Greg Lang: Field work included drilling water retention structures seismic surveys and test block liner installation.
Greg Lang: Additional field work included refining groundwater at the site with hydro geologic drillings that provided essential information for mine planning and design.
Greg Lang: At the historic Placer site restoration work accomplished significant stream and pond habitat creation.
Greg Lang: Continued restoration work well.
Speaker Change: It will include anticipated aquatic life accident.
Speaker Change: And for the 2020 force field season.
Speaker Change: 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 design components.
Validation.
Speaker Change: They are critical role subsequent steps to advance the project further up the value chain.
Speaker Change: Through ongoing cooperation with <unk> to T J P and local communities Nova goals are patches.
Speaker Change: Upholds, our steadfast commitment to education.
Speaker Change: The energy wellness cultural preservation and environmental stewardship.
Speaker Change: These principles are actively reinforced not only at the Donlin Gold project site, but also in the Y K community as highlighted on slide 15.
Speaker Change: The 'twenty to 'twenty three donlin Gold's demonstrated this commitment by appointing additional community liaison representatives from four benches in the Y K region.
Donlin Gold: Expanding the total to eight.
Donlin Gold also establish three additional shares valued statements totaling 16 formalizing ongoing engagement.
Donlin Gold: Reinforcing long term relationships.
Donlin Gold: With the communities in the region.
Donlin Gold: And then also supported various search and rescue teams provided funding to the bathroom community Services Foundation and Special Olympics, Alaska just to name a few.
Donlin Gold: We also concluded another successful in it for the long haul backhaul program for the sixth year in a row.
Donlin Gold: 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.
Donlin Gold: This year's program achieved significant milestones, including the removal of waste from fish camps in the liver.
Donlin Gold: Donlin gold employees from three villages played a key part.
Donlin Gold: And initializing the backhaul from the Yukon River.
Donlin Gold: Furthermore.
Donlin Gold: 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 Kuskokwim and Yukon River watersheds.
Donlin Gold: In the fourth quarter of 2023 specific projects opportunities for salmon population health were identified.
Donlin Gold: Additionally, donlin gold's accorded the construction and maintenance of 300 miles of ice roads, fostering community engagement and providing essential access for emergency services.
Donlin Gold: Ireland continues to support educational programs with a focus on enhancing opportunities through the Alaska resource education.
Ireland: After school activities Association, providing scholarships at the University of Alaska.
Donlin Gold: Donlin gold is a federally permitted project on private land.
Donlin Gold: Designated by law for mining activities as part of the 1971, Alaska Native claims settlement Act.
Rob Donovan: Differentially differentiating factor for most other mining assets in Alaska.
Melanie Hennessey: For me to get in the United States in Alaska.
Melanie Hennessey: <unk> represents a significant and rigorous endeavor.
Melanie Hennessey: Our success hinges on years of dedicated efforts to ensure a diligent transparent and inclusive process for all stakeholders.
Melanie Hennessey: Slide 16 risks all the federal and state permits and certificates received to date.
Donlin Gold: We have received our federal permits from the Army Corps of Engineers, and the Bureau of land management.
Donlin Gold: 2018, followed by numerous state permits on this slide in subsequent years.
Donlin Gold: Donlin gold its owners and partners because 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.
Donlin Gold: Yes.
Donlin Gold: On slide 17, we present updates regarding state and federal permitting and mitigation activities.
Donlin Gold: None of these actions are surprised and we were prepared and have prevailed in the courts.
Donlin Gold: The 2023 field program was focused on geotechnical and hydrological drilling together supplementary data for the dam safety certificate.
Donlin Gold: Okay.
Donlin Gold: You'll work concluded in July and the team is on track to submit the preliminary design packages to the state.
Donlin Gold: First half of 2024.
September 1st 2023, the Alaska Superior Court.
Rob Donovan: Reaffirmed the department of natural resources decision on Diamond Goldwater rates following an unsuccessful appeal.
Rob Donovan: In October 2nd 20, twenty-three Earth Justice appealed the superior court's decision to the Alaska Supreme Court.
Earth Justice: Filed their opening brief.
Earth Justice: January.
Earth Justice: And the federal litigation challenging Donlin gold joint record of decision and permits including the 404 permit.
Earth Justice: The U S Department of Justice is finalizing a compilation of the administrative record for the court.
Earth Justice: Briefing schedule was agreed in the fourth quarter and will extend through the first half of 2024.
Earth Justice: Yeah.
Earth Justice: Despite these numerous challenges.
Earth Justice: All appeals against the Donlin Gold project have been unsuccessful to date.
Earth Justice: 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.
Earth Justice: We remain committed to back in all agencies and defending the permits.
Earth Justice: With that.
Earth Justice: I will now turn the call over to our CFO David out of wealth to review the 2023 year end financial results.
Earth Justice: Dave.
David Wealth: Thank you Greg.
David Wealth: Turning to slide 19 for.
David Wealth: For the year, our net loss decreased by $6 5 million from 2022, 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: Donlin gold expenses were lower in 2023 with field work and geotechnical drilling completed in July.
The Alaska Dam safety.
Donlin Gold: Typical applications and hydrate, the geologic drilling to support the mine planning and design compared to the large exploration drilling program in 2022.
Donlin Gold: 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.
Donlin Gold: Higher interest rates in 2023 impacted both the interest income on cash and term deposits.
Donlin Gold: And interest expense on the promissory note.
Donlin Gold: On slide 20.
Donlin Gold: Cash and term deposits increased in 2023 by 0.2 million with corporate administrative and our share of Donlin gold expenditures offset by.
David Wealth: Interest income of $5 7 million and the note proceeds received from the Newmont now of $25 million.
David Wealth: Compared to the prior year Donlin, Gulfport, who is lower due to the geotechnical and hydro geological program compared to the exploration program in 2022.
David Wealth: Higher G&A costs resulted from increased travel and legal expenses and the PSU awards that matured in 2023 did not meet the price war.
David Wealth: Criteria. Therefore, no common shares were issued and no withholding taxes.
David Wealth: Paid in 2023.
David Wealth: Our tertiary remained strong with cash and term deposits totaling $125 7 million at November 30.
David Wealth: And our.
David Wealth: Expenditures for 2024.
David Wealth: Approximately $31 million, including $14 million for Donlin and 17 for corporate G&A.
Greg Lang: Greg I'll turn it back to you.
Thank you Dan.
Speaker Change: Hello, everyone.
Speaker Change: I want to take this as an opportunity to be able to assure.
Speaker Change: Our investors that we are.
Speaker Change: As investor friendly as well as transparent as any company in the mining industry.
Speaker Change: We have from the very outset since.
Speaker Change: 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.
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.
Greg Lang: As you will have heard.
Greg Lang: We've approved a budget.
Rob Donovan: 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 they are the conversations are ongoing and we'll see where they go.
But they will not be going into a place that we're uncomfortable.
Rob Donovan: Let me review the Nova Gold thesis 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.
Rob Donovan: There is no way.
Rob Donovan: Literally no way that.
Rob Donovan: I on behalf of the shareholders.
Rob Donovan: Will allow.
Rob Donovan: Allow any opportunity for our share price to be able to reach.
Rob Donovan: 13, and a half and higher.
Rob Donovan: We have a unique story in fact, you've heard it before but let me just reiterate this.
Rob Donovan: When I ask investors.
Rob Donovan: Which.
Asset <unk>.
Rob Donovan: Has that combination.
Rob Donovan: Of.
Rob Donovan: Size.
Rob Donovan: Great.
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 did.
Rob Donovan: To depth.
Rob Donovan: We know this is going to be much bigger and candidly so do some of the major mining companies.
Rob Donovan: There should be no doubt in anyone's mind that if they buy Nova gold at these prices.
Rob Donovan: They are buying it well below the price that anyone would pay for it.
Rob Donovan: She'd give them some comfort.
Rob Donovan: And if in order to impress upon people that these are prices, which are the product of.
Rob Donovan: Special circumstances that will find resolution 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.
Rob Donovan: 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.
Rob Donovan: That Donlin is then you carlin and when I make references to these things I'm, making reference to great assets in Great Places.
David Wealth: 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.
David Wealth: The lowest cost producers with Fantastic Native Corporation partners, with whom we enjoy.
David Wealth: Excellent.
David Wealth: Nations and fidelity and solidarity.
David Wealth: And most importantly in today's world.
We are in and address where if you go to sleep at night.
David Wealth: You know that when you wake up in the morning, you haven't eaten literally where figure at Tivoli.
David Wealth: You know that there are no insurgents you do know that there are no missile strike.
David Wealth: You know that you're not dealing with kleptocrats, where the rule of law is not a novelty.
David Wealth: Which shouldn't be overthrown.
David Wealth: At will.
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 store.
David Wealth: Laurie.
Laurie: So what's our treasury is sacred.
Laurie: We don't oppose drilling.
Laurie: I'd love to continue drilling to be able to show.
Laurie: My belief that we can increase this resource.
Laurie: By a huge amount.
Laurie: But for the time being our view.
Laurie: And circumstances could change, but our view is our shareholder Treasury, which gives us years of runway is part of our overall profile and we like it we haven't needed to raise outside capital since 2012, that's extra.
Ordinary.
That's because every promise that we've ever made.
Laurie: In taking us away from being adult copper company to a pure gold company with the spin off.
Laurie: Of Nova copper now trilogy, with the sale of Galore to Newmont.
Laurie: Has been affirmed.
Laurie: All of our shareholders know.
Laurie: That we have always kept our promises.
Laurie: And that we have been transparent to the point of verbosity, especially on my part obviously because remedy isn't my strong suit.
In order to hold fast with them well.
Laurie: I will remind them.
Laurie: The owner lives above the store that's a quotation from one of the most powerful fund managers in the world about his take on the way that I view Donlin.
It is a passion project.
Laurie: And will be pursued as such you will not be seeing him.
Laurie: Any absence of earnestness in seeing our share price multiply.
David Wealth: In fact.
David Wealth: If I have it.
David Wealth: Any sense of forecasting at all I would say that one of the greatest trades in the gold industry.
Greg Lang: 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.
Greg Lang: I'm talking about.
Greg Lang: Majors.
Greg Lang: Wow.
Greg Lang: Let's continue to talk about some of the macros.
Greg Lang: If we go to slide 24.
Greg Lang: We're setting up for a perfect storm in gold.
Greg Lang: 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.
Greg Lang: And scrubbed that thesis find the right asset that will stay.
Greg Lang: Stay with you.
Greg Lang: And allow you to reap the fruits of that leverage.
Greg Lang: For us it.
Greg Lang: 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.
Greg Lang: We know what we have we have the most beautiful.
We have the most beautiful girl.
Greg Lang: In the world and she's with us.
Greg Lang: No no it probably just got canceled but in any event as far as gold is concerned.
I think that what we're seeing is a slow motion breakout.
Greg Lang: 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.
Greg Lang: Top 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.
Greg Lang: 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 forecasts than that but gold could go much much higher than that.
Greg Lang: This is just on supply demand fundamentals that I make the forecast that I do but I believe that.
Greg Lang:
And as much as patriotism is the last refuge of the scandal fear factor that's.
Greg Lang: That's refuge for the gold bull, they're not necessary.
Greg Lang: The supply pressures.
Greg Lang: Donlin is twice the average grade of the mines that are being proposed to the extent that there are any major mines production costs, we've seen rising the exploration budgets are completely inadequate.
Greg Lang: The discovery rates are probably at an all time low I love drilling them I'm always drilling.
Greg Lang: And the fact is that.
Greg Lang: I'm in a very very small minority, which has never faced me.
David Wealth: I made 100 times my money on drilling.
David Wealth: In <unk>.
David Wealth: Silver.
David Wealth: 100 times.
David Wealth: One P G and.
David Wealth: 100 times.
David Wealth: Hydrocarbons.
David Wealth: I would match our.
David Wealth: Track record.
David Wealth: With all but a few other.
David Wealth: Not just smart, but also very very lucky people and we acknowledge look.
David Wealth: In the same ways, we acknowledged the luck that had no the gold.
David Wealth: Falling into our laps when we came in and rescued it.
David Wealth:
David Wealth: Stock went from three to 15, you will see it happen again, if not much much higher.
David Wealth: And I will do everything within my power to make that forecast come true.
David Wealth: Now the reality is if you go to slide 25, I'm I'm not.
David Wealth: Going to blame our performance on our the fact that the gold equities have.
David Wealth: Have greatly underperformed.
David Wealth: Bold itself.
David Wealth: It's not uncommon in commodities, because you often see that the physical demand increase.
David Wealth: Increases from certain level and when you get the investor sentiment. It then flows into the equities that are correlated to those.
David Wealth:
David Wealth: Commodities or currencies in the case of gold.
David Wealth: The thing that has changed is that.
David Wealth: When I got into the business 30 years ago.
David Wealth: The value of all the precious metal shares in the world.
David Wealth: We're about the value of Coca Cola.
David Wealth:
David Wealth: And now the value of all the precious metal shares in the world is a fraction of many many many technology.
David Wealth: Technology companies. So the question is.
David Wealth: Well technology come down to Earth in some sense and I don't mean that in terms of will technology stopped full I mean that in the sense that.
David Wealth: What is the status of gold in the World well for me the fact that the central banks.
David Wealth: Have remained huge buyers as you can see on slide 26 tells me that bold has legs central banks are nuts.
David Wealth: Stupid money they may be forced by their governments to do stupid things less the global economy fall apart and but they know what they have on their balance sheets.
David Wealth: And they are voting with their feet with gold.
David Wealth: I want to be on their side of the table the path of least resistance for a central bank bureaucrat mm is to go with the trend so.
David Wealth: So when you have the Chinese and the Indians competing over who's going to be the largest consumer when you have central banks as buyers.
It's very very clear that the trend is our friend.
David Wealth: At some point.
David Wealth: You will see a catalyst that will have a big impact on the equities.
David Wealth: And it will be impossible to get into them at the levels that you were seeing now.
It will be as one which 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.
And the solid performance that they will show.
David Wealth: Will attract more and more money.
Greg Lang: Just the fact that financial assets are amongst the only asset that people want to buy much much more of as they get dear.
Greg Lang: The equities market in the Golden platinum and silver space.
Greg Lang: <unk> is highly undervalued.
Greg Lang: 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.
Greg Lang: Asia and.
Greg Lang: South America.
The reality is the geopolitics trumps geology, and I love geologist.
Greg Lang: But if you're not in a place.
Where the rule of law is not sacred.
Greg Lang: My worst fear for those who are is that ironically, they will be right on gold.
Greg Lang: And by being right on gold when gold is reviewed as a strategic asset like we are seeing happen with lithium.
Greg Lang: Those assets will be the object of.
Greg Lang: Avaricious.
Greg Lang:
Greg Lang: Yeah.
Greg Lang: Local governments.
Greg Lang: Want of a better word.
Greg Lang: And as you know I made my bones in Bolivia, Zimbabwe, South Africa I.
Greg Lang: I sold Kibali to Barrick.
Greg Lang: Not squeamish I wish the largest holder of mineral rights.
In Pakistan focused on Baluchistan, a country that I studied 35 years ago. When I was doing my doctor It on the counter insurgency still studying it.
Greg Lang: I know these places.
Greg Lang: And I really do believe that for me as someone who voted with their feet.
Greg Lang: The best place to be.
Greg Lang: If the United States, Canada, Mexico, So long as it stays part of NAFTA Australia.
Greg Lang: That's where you want it be I mean, there are a few other odds and ends in Europe et cetera, but you Wanna be in places, where you can sleep and the reason for that is if you can sleep well.
Greg Lang: You can hold on for when the reversal comes.
Greg Lang: And if past is prologue in my experience, it's when you least expect it.
Greg Lang: And the stock doubles triples, and then people start to cotton on and that's where you make your 10 bagger.
Greg Lang: When the fundamentals catch up with the asset quality and the safety of jurisdiction in the hands of a management team, but in our case.
Greg Lang: Were instrumental in building Cortez in Nevada.
Greg Lang: Richard Williams brought but it'll be a cool into production.
Greg Lang: In the Dominican Republic, just in time for them to change the rules of course.
Greg Lang: But it's still not just not mine, but one that's being expanded.
Greg Lang: Our our.
Greg Lang: A co owner in Donlin Barrett.
Greg Lang: Our expertise in the Americas Truthfully is second.
Greg Lang: None.
Donlin Barrett: They could run a larger gold company.
Donlin Barrett: Moving to slide 27, I think I covered this but this is a very very.
Donlin Barrett: Sad chart for the industry good for us sad for the industry.
Donlin Barrett: Gold reserves have been falling.
It's possible that we can see reserves that may have been uneconomic now start to come back in.
Donlin Barrett: But that implies higher gold prices. So that's a win win if that happens 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 <unk>.
Donlin Barrett: <unk> thousand 456.
Donlin Barrett: 20 years, hence the industry is going towards a gram if not lower.
Donlin Barrett: Some of the best drill results that were developed in the gold space.
Over the last two drill programs, which according to Barrick Derisked. The geology, we think it was always de risk, but you know so what you know happy partner is a good thing.
Donlin Barrett: We delivered some of the best drill results in the entire industry.
Donlin Barrett: You heard them from us at least.
Donlin Barrett: And we're very very comfortable with the fact that we have the best asset.
Donlin Barrett: Now something else that I want to mention I'm, not going to predict a recession or.
Donlin Barrett: I'm not an economist probably means I'd have a better chance of predicting a recession.
Donlin Barrett: But.
Donlin Barrett: I know.
Donlin Barrett: Global.
Donlin Barrett: Rich.
Donlin Barrett: Very well.
Donlin Barrett: 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.
Donlin Barrett: But I can tell you something.
Donlin Barrett: Yeah.
Donlin Barrett: Recession can come from many places.
Donlin Barrett: You could have a financial crisis in China.
Donlin Barrett: For arguments sake.
Donlin Barrett: You could have a 1929 in China, which could have enough gone effect on the rest of the world.
Donlin Barrett: And the way that.
Donlin Barrett: The financial crisis in 19, and 29 in the United States had a knock on effect all over the world.
Donlin Barrett: And led to.
Donlin Barrett: Global conflict, let's put it like this.
Donlin Barrett: We already have an unprecedented conflict and.
Donlin Barrett: Europe.
Donlin Barrett: We have unprecedented.
Donlin Barrett: Actions in the middle East that are.
Donlin Barrett: Beyond barbaric.
Donlin Barrett: In terms of what.
Donlin Barrett: It was carried out in October seven and is a game changer in many ways I won't go into that here, but I have given some interviews on that subject over the last couple of months.
Donlin Barrett: Yeah.
Donlin Barrett: But one of the things that people.
Donlin Barrett: Must take into account is that there is a chance for recession.
Donlin Barrett: And if there is the rush to exit.
Speaker Change: He's going to be absolutely unprecedented because the world hasn't had a real recession in the 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.
Speaker Change: I'm not going to prefer them any more specific instances accept and perhaps private conversations.
Speaker Change: Suffice it to say.
Speaker Change: Do 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.
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 it's gold or up my conviction that goal will lead and other factors will lead to Nova gold multiply because it's got everything I want them to a place where I want it to be.
Speaker Change: It comes from the.
Speaker Change: The place of massive massive conviction.
Speaker Change: And as all of our shareholders know.
Greg Lang: About Greg and myself the whole management team.
We don't just talk the talk.
Greg Lang: We walk the walk.
Watch this space, it's going to get really interesting.
Greg Lang: The most important thing for our investors as you can see on slide 29.
Greg Lang: We have.
Enormous leverage.
Greg Lang: To gold.
Donlin Barrett: And that is something that we have to reiterate but again, it's leverage in a place where you can keep the fruits of the leverage.
Donlin Barrett: And there are many places that if gold does what I think it's going to do.
Donlin Barrett: They're not going to let you keep it.
Donlin Barrett: We were seeing it with lithium we're seeing it in some places with copper.
We will see it in gold not in NAFTA not worried about that.
Donlin Barrett: All of what I've found it.
Donlin Barrett:
Donlin Barrett: He is very very well known to our large shareholders.
Donlin Barrett: They've heard me say it publicly to all of you.
Donlin Barrett: Everyone knows that if they want to speak to me about any subject.
Donlin Barrett: They can and.
Donlin Barrett: I have no lack for words.
Donlin Barrett: But I would also like to take the opportunity to thank our shareholders for.
Donlin Barrett: Being not only stalwarts.
Donlin Barrett: And faithful their solidarity in.
Donlin Barrett: No pun intended fidelity is enormously appreciate it.
Donlin Barrett: I've heard people schooled their shareholders in the gold space for short term ism.
Donlin Barrett: I've never encountered that I mean people trade and that's fine.
Donlin Barrett: But the most faithful shareholders and co investors and partners that I've ever had whether they are sovereign wealth fund partners wait whether they are institutional investors and families. The most faithful.
Donlin Barrett: Our.
Donlin Barrett: The precious metals investors and.
Donlin Barrett: I would go into battle for all of these shareholders. Indeed, any one of these shareholders.
Donlin Barrett: And so as I said.
Donlin Barrett: Watch this space.
Donlin Barrett: It's going to be a very very interesting opportunity for us to be able to put a spotlight on.
Donlin Barrett: On an asset that is not.
Donlin Barrett: Just kind of size grade exploration potential production profile.
Donlin Barrett: And jurisdiction.
Donlin Barrett: Unique.
But one that is wildly undervalued.
Donlin Barrett: And with that I. Thank you and obviously, we welcome any questions that you may have.
Donlin Barrett: [noise].
Donlin Barrett: Okay.
Donlin Barrett: Chuck can you prompt the group for for those that have questions.
Donlin Barrett: Thank you.
Donlin Barrett: To join the question queue. You May Press Star then one on your telephone keypad, you will hear a tone acknowledging your request if youre using a speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then one.
Sorry, then too.
Speaker Change: The first question comes from Lucas pipes with B Riley Securities. Please go ahead.
Speaker Change: Thank you very much operator, good morning, everyone.
Speaker Change:
Speaker Change: Tom You mentioned that there are some differences.
Speaker Change: Couldn't write down the exact wording you used up between you and your joint venture partner and I wondered if you could maybe <unk>.
Speaker Change: Elaborate on that and kind of where where where you see that shared common golf and where there may be some temporary difference 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 that both of us.
Or committed to in taking Nova gold up the value chain, which is their terminology as well as ours.
Greg Lang: As we put in the.
The press release and as we've said.
Greg Lang: We've been making we've been making representation together as partners for two years.
To the market.
Greg Lang: And to the native corporations.
Greg Lang: That when the drillings over we go to these.
Greg Lang: Visibility.
Greg Lang: And that is what we are going to stick with because our strategy.
Greg Lang: Which has been articulated is that we're not in a rush to go into production until the economics justify it.
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.
Uh huh.
Greg Lang: He was likewise.
Greg Lang: What I would say is this.
Greg Lang: Yeah.
Greg Lang: We've made.
What we consider to be commitments.
Greg Lang: The only constraint is the.
Greg Lang: Fact that.
Greg Lang: We have a partner.
Greg Lang: Our partner wants to continue drilling.
Greg Lang: The geology.
Greg Lang: According to our partner.
Greg Lang: It has been derisked satisfied with your ore body.
Greg Lang: The drilling is.
Greg Lang: In order to.
The mine plan.
Greg Lang: Our attitude is we can do that in parallel with the feasibility study.
Greg Lang: And that's where we are it's really that simple.
Greg Lang:
Greg Lang: Sure.
Greg Lang: Management team.
Greg Lang: Great.
Does.
Greg Lang: The president of Barrick Gold North America for eight years before joining us because he felt that.
Greg Lang: Lynn was the best development asset within Barrick.
Greg Lang: Richard Williams, who as I mentioned was a check on the Pueblo Viejo project.
Greg Lang: For Eric and.
Greg Lang: Goldcorp at the time.
Greg Lang: Now new months.
Greg Lang:
Greg Lang: 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:
Donlin Barrett: I wont after having built Pueblo Viejo I want to now build them the greatest gold mine in the world and that's donlin.
Greg Lang: Yeah.
Donlin Barrett: And both of them. Their attitude is just gives us leverage to the greatest asset and the Barrick portfolio.
Donlin Barrett: Lee I think that's the case.
Donlin Barrett: And if you look at what.
Donlin Barrett: Donlin brings to Barrick's reserve base.
Donlin Barrett: Either they're 50% share all of it.
Donlin Barrett:
Donlin Barrett: You can see that.
Donlin Barrett: They're not dumb.
Donlin Barrett: You know.
Donlin Barrett: They.
Donlin Barrett: Can stick with and think to drill.
Donlin Barrett: We don't have to our budget is settled.
Donlin Barrett: You know we're not in conflict.
Donlin Barrett: We know what we want.
We believe that what we want is what has been promised and what is best for.
Donlin Barrett: Everyone Nate.
Donlin Barrett: Native corporations, our shareholders and candidly barrick shareholders unless their agenda is different from ours.
Donlin Barrett:
Donlin Barrett: Our strategy has always been very simple.
Donlin Barrett: No wine before its time.
Donlin Barrett: We've articulated it we've written that our strategy is to get the feasibility study done so that when the economics line up we're in a position to be able to put together the financing that will enable.
Donlin Barrett: Donlin to go into production.
Donlin Gold: That's what we want our Native Corporation partners has been unbelievably patient.
Donlin Gold:
Donlin Barrett: But this is a game changer.
Donlin Barrett: For the entire region.
Donlin Barrett: And the social license that we enjoy.
Donlin Barrett: Is candidly more valuable to us than the metal itself.
Donlin Barrett: Equally our shares are more valuable to us than the metal itself, which is why we will take.
Donlin Barrett: All measures necessary.
Donlin Barrett: To improve the share price performance.
Donlin Barrett: So it's an impasse that can just simply be shrugged off for the time being.
Donlin Barrett: Both parties can come to terms they know what we want we know what they want.
Donlin Barrett: If we don't budge.
Donlin Barrett: There's no drilling.
Donlin Barrett: If they don't budge.
No feasibility for the time being.
Donlin Barrett: But at the end of the day like I said I've been in this for 15 years.
Donlin Barrett: I suffered from the opposite of deal fatigue, I am more excited.
Donlin Barrett: And this isn't broke.
Donlin Barrett: Though I am more excited about donlin and I've ever been when.
Donlin Barrett: 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.
Donlin Barrett: <unk> via <unk>.
Donlin Barrett: Gold development stocks.
Greg Lang: And great ones with great assets in Safe places.
Greg Lang: And I have a feeling that people are cutting hang on to that in not just one but major mining companies.
Greg Lang: 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.
Greg Lang: But Greg could you answer perhaps you know some of the things for which are you know I don't have a natural aptitude.
Sure well look as you know for next year, we've approved a budget of well over $28 million, which is where I started.
Greg Lang: Still a substantial budget predominant and this will advance our resource modeling and mine planning work.
Greg Lang: Got a pilot plant underway right now that's actually a fairly expensive undertaking.
Greg Lang: We're doing some regional infrastructure support planning hydrology, and just related activities as well as our ongoing defensive permits and our extensive community relations programs.
There's two areas of the budget that we are still actively discussing with our partner one is to finalize the scope of work for the update to the capital and operating cost estimates.
Greg Lang: And the other as has been mentioned is to.
Greg Lang: Debate, the merits of a drill program and improve it if appropriate.
Greg Lang: You know, we're very mindful of our treasury, but I'd say, it's 50.
Greg Lang: 50, 50 partnership, but I'm confident that we can now work our way through these things.
Greg Lang: That's it.
Tom and Greg. Thank you very much for the additional color and I wish you and the entire team best of luck. Thank you.
Lucas Pipes: Thank you Lucas keep the faith keep the faith.
Speaker Change: We're going to Astonish Ya.
Speaker Change: The next question comes from Don Demarco with National Bank Financial. Please go ahead.
Speaker Change: Yeah.
Don Demarco: Thank you operator, and good morning, Tom.
Greg Lang: Thomas and and Greg.
Don Demarco: First question is.
Greg Lang: Greg I heard you talk about the size of that.
Greg Lang: Mineralization is impressive strike with eight kilometers.
Greg Lang: Overweight to only the resorts current resources only covers just a little more than three kilometers.
Greg Lang: To what extent have you tested the.
Greg Lang: The balance of that eight kilometer mineralized trend.
Greg Lang: Well, it's a great.
Greg Lang: Ore grade intercepts, so it really all up and down the trend now.
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, whereas it shows where the potential is along strike, but I think the potentially in the near term is really what we see at depth primarily in the Louis deposit yeah.
Don Demarco: Some of our drilling for my two seasons ago encountered.
Don Demarco: Great grants of mineralization well below the bottom of the known pits. So that's the best potential is in the near term is expanding the existing pits and then move out along strike and at.
Don Demarco: In other areas of the claim block.
Don Demarco: Okay. Thank you and so if you were to drill and increase your resource endowment adapter along strike by a measurable amount.
Don Demarco: The incremental ounces simply be added to the end of the mine life or could this.
Don Demarco: The development approach as you see it now.
Don Demarco: Oh, it's a probably a little too soon to answer that question I mean, it could do both it could increase the.
Don Demarco: Secondly, it will extend the mine life and then at some stage the owners were.
Don Demarco: To discuss the merits of building a larger facility I think we've just got to get our arms around and quantify the potential.
Don Demarco: Okay addressed the issue you raised.
Don Demarco: 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.
Oh, you know, we maintain an ongoing dialogue and we've oh.
Don Demarco: It's a 50 50 partnership are there like a marriage, it's a little give and take and I think we've always been.
Don Demarco: Successful in the past and I think we will get there again this year.
Don Demarco: Okay, that's great.
Don Demarco: Well, thanks, so much and good luck in 2024 I appreciate it.
Don Demarco: Thank you.
Don Demarco: We have two questions from the webcast some of them have been answered maybe Greg if you can speak to them.
D and E trading below the nev and if that's a worry on capex or future dilution that would be great.
Don Demarco: Well I'll start with that question I'd, probably lateral at the time I mean, we're all disappointed.
Don Demarco: The share price Underperforms, especially for no apparent reason, but you know our.
Our share price really doesn't.
Don Demarco: We've got a strong treasury.
Don Demarco: Pretty solid work plan ahead of us this year.
Don Demarco: The share price really is.
Don Demarco: Not directly connected to our.
Don Demarco: The future capital of the Donlin project.
Don Demarco: Tom anything you'd want to add to that.
Don Demarco: Sure.
Don Demarco: Hum.
Don Demarco: I'm not worried about a dilution we have a strong treasury are you have a management team which is evidenced.
Don Demarco: With our red lines that.
Don Demarco: We're only going to spend capital.
Don Demarco: That we believe is being properly spent by the way as to the previous question I wanted to drill the entire district for 15 years I do not believe that Barrick.
Don Demarco: <unk> had that same sense of interest.
Don Demarco:
Don Demarco: The times that you have to remember.
Donlin Barrett: They launched a hostile takeover in 2006.
<unk> of years before we became a shareholder and.
Donlin Barrett: Barrick's intention.
Donlin Barrett: We put 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 I genuinely believe that Theres 100 million ounces, there along strike to depth.
Speaker Change: And with other targets.
Speaker Change: And even my friends.
Speaker Change: Or at Barrick.
We will acknowledge that you know I've made my hundred xs through the drill bit silver platinum those were all exploration energy.
Donlin Barrett: Grassroots exploration I surround myself with great geologists and the geologists who've made some of my biggest discoveries are for our team.
Donlin Barrett: She's 100 million ounces at Donlin.
Don Demarco: And he's always been right.
Don Demarco: When it comes to these things and use the brand name and the geology industry.
Don Demarco:
Don Demarco: So I would love to drill more.
I just want to make sure.
Don Demarco: That.
Don Demarco: And the board wants to make sure we United on this.
Don Demarco: So you understand we're completely United on the you drill when it adds value.
Don Demarco: The ore body is the ore body as it exists today.
Don Demarco: Is what it is and we think it's fantastic.
Don Demarco: We don't need to.
Don Demarco: To squander, our social license.
Don Demarco: Perhaps in combination with a moving to feasibility.
Don Demarco: And Barrick talking about the asset.
Don Demarco: The way, we do Oh sure. We're hoping this is.
Don Demarco: This isn't personal this is strictly business and as Greg said he was in constant contact with the with Barrick on multiple levels.
Not all style.
Don Demarco: 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.
Two.
Greg Lang: Preserve the company's profile raised its share price a husband, its treasury, which gives us years and by the way.
Greg Lang: You know 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 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.
Every mining company.
Greg Lang: In the world at this point.
Greg Lang: Accretive 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 them.
Greg Lang: American assets, firstly, they wont be in Africa, they wont be in Funky places I don't believe so and I voted with my feet by moving from those places.
Greg Lang: Back home.
Greg Lang: We're.
Greg Lang: I don't feel that I'm.
Greg Lang: 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.
Greg Lang: I Love, what we have.
Greg Lang: And the key to being a successful investor in my view.
Greg Lang: Is.
Greg Lang: Being having so much conviction that you're willing to stay in it.
Greg Lang: Until the world comes around to it I think that could very very well happen.
Greg Lang: 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.
Greg Lang: You know a cappuccino a you know the price of a cappuccino you know that's it that's all you you need but what I would say is that we.
Greg Lang: We are more apparel of being an unwanted takeover targets.
Greg Lang: I believe it would be a foolish.
But.
Greg Lang: We would be more of a target of that then of you know.
Greg Lang: Running out of money.
Greg Lang: Does that answer your question.
Greg Lang: Thank you Tom I appreciate the response.
Greg Lang: 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.
Greg Lang: Sure.
Greg Lang: I worked in the mining industry for many decades in North America and mitigation.
It 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 we.
Greg Lang: We don't really like it but we know what's coming 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: We've prevailed.
Don Demarco: Four major pieces of litigation as it works its way through the courts. We prevailed on every ruling debate or do I have any fear about that going forward. No. I think we will we will continue to prevail.
Don Demarco: I'm sure a lot of people are curious what what it costs to defend your permits.
Don Demarco: Frankly, it's a pretty significant amount of money in our budget two were actively.
Don Demarco: Actively defending the permits that we got.
Don Demarco: Got through a very disciplined process.
Don Demarco: Not worried about it it's a cost of doing business and we will we will prevail.
Don Demarco: Great. Thank you 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.
Greg Lang: We've got a pretty.
Greg Lang: After a year ahead of us and we will keep everyone appraised as our work unfolds and any potential additions to the approved budget of Darwin.
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: Yeah.
Greg Lang: [music].
Greg Lang: Uh huh.