Q4 2024 NovaGold Resources Inc Earnings Call
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Speaker Change: Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Melanie Hennessey, Vice President, Corporate Communications. Please go ahead.
Speaker Change: We are pleased that you have joined us for NOVAgold's 2024 year-end webcast and conference call and for an update on the Donlan Gold Project. On today's call we have NOVAgold's President and CEO Greg Lang and Peter Adamek, NOVAgold's Vice President and CFO.
Speaker Change: At the end of the webcast, we will take questions by phone. Additionally, we will respond to questions received by email.
Speaker Change: I would like to remind everyone, as stated on slide 3, any statements made today may contain forward-looking information, such as projections and goals, which are likely to involve risks detailed in our various EDGAR and CDAR filings, and forward-looking disclaimers included in this presentation.
Speaker Change: To begin today's call I want to highlight why Donovan Gold is viewed as a Tier 1 asset by us and our shareholders.
Speaker Change: Especially given the scarcity of high-quality projects in secure jurisdictions and the recent surge in the price of gold.
Speaker Change: Let's examine the impressive features of the Donovan Gold Project as shown on slide 5.
Speaker Change: with 39 million ounces at a grade of two and a quarter grams per ton.
More than double the industry average.
and a projected line life of nearly three decades.
Donlan promises long-term stable and low-cost operating conditions, positioning itself
and the majority of the state permits.
Demonstrating its readiness for successful advancement.
Speaker Change: Located on private land that has been designated for mining in one of the world's top mining jurisdictions,
Don and Gold's strong partnerships with Chelysta and TKC.
Speaker Change: Collectively, these factors established Onland Gold as a cornerstone project with exceptional long-term value and substantial growth potential.
On slide six.
We outline the 2024 highlights, key activities, and upcoming catalysts.
Extensive collaboration with our Native Corporation partners across the region.
recorded ecological projects, education initiatives, youth employment, and cultural awareness.
Speaker Change: These efforts underscore Donlan's commitment to the local communities, strengthening long-term relationships,
Speaker Change: This past year, we focused on increasing Donlan's visibility and advancing activities that support sustainable value creation.
Speaker Change: Positioning the project as a unique opportunity to gain exposure to gold through one of the largest undeveloped
Speaker Change: Gold Assets Globally, located in Alaska's stable Tier 1 mining jurisdiction.
Stalin stands out as one of the largest
Speaker Change: Driving demand for assets like Donlan that possess the scale, grade, and longevity needed to thrive through various gold cycles.
In addition,
Speaker Change: With a grade of two and a quarter grams, more than double the industry average for open pit projects, as shown on slide eight, Donlan is set to become one of the most cost effective producers in the gold industry.
SPEAKER 1 Currently.
Speaker Change: Alaska is ranked 13th out of 117 global jurisdictions and only one of 13 to achieve a double-a rating in the World Risk Report published by the Mining Journal.
Alaska is renowned for its strong and secure environment.
especially in the mining sector as shown on slide 9.
Speaker Change: As the second largest gold producer in the United States, Alaska's robust regulatory framework and commitment to responsible development create a supportive climate.
Streamlining permitting and reducing restrictions that have hindered responsible growth.
Speaker Change: This initiative is expected to create new opportunities for gold mining, job creation, and economic expansion.
while also enhancing investor confidence.
which align perfectly with the promising attributes of Donlan Gold.
It's highlighted on slide 10.
Speaker Change: Chalista and TKC, as private landowners and key partners in Donland Gold, play a pivotal role in the project's success.
Speaker Change: and the preservation of their cultural heritage within their local communities.
Speaker Change: On land designated for mining activities over 50 years ago, their stewardship reflects a strong dedication to sustainable development.
Throughout the different stages of development, they're invaluable expertise.
Speaker Change: Their partnership is critical to the advancement of diamond gold, reinforcing its potential as a cornerstone of long-term economic development for the YK region and future generations.
Speaker Change: Turning to slide 11, we outline Donovan Gold's current permitting status.
Speaker Change: Federal and state permits secured. We continue to support agencies in maintaining these permits and defending them against legal challenges, ensuring the project's continued approval.
[inaudible]
Speaker Change: The permitting process in Alaska requires extensive shareholder engagement, especially within the communities in the YK region.
Speaker Change: While managing jurisdictional complexities can be challenging, Alaska's political and social stability offers a secure investment environment.
Reinforcing our commitment to effectively navigate the regulatory processes.
Speaker Change: Nova Gold is backed by a veteran management team with long-term expertise in mining in the Americas as shown on slide 12.
Speaker Change: and leading gold producers and possess deep knowledge in building and operating large-scale open pit and underground mines.
Speaker Change: With significant exploration potential beyond the Ackman-Lewis pits, as shown in the graphic on slide 13.
Speaker Change: covering only three kilometers of a eight kilometer gold-bearing trend. This highlights the opportunity to increase ounces and extend the mine's life through further exploration.
Speaker Change: Slide 14 features a bar chart showing the post-tax net present value at different gold prices.
Speaker Change: With today's gold price nearing the upper end of the chart, Donovan Gold's value exceeds over $30 billion.
Speaker Change: This projection highlights the significant economic potential in the current gold price environment.
Speaker Change: I'll now turn to the year-end milestones reached and the ongoing project activities.
Speaker Change: Moving to slide 16, key activities in 2024 included the substantial completion of metallurgical test work at a pilot plant in Ontario, Canada, to confirm proposed optimizations to the flow sheet.
Speaker Change: Field and geotechnical data collection continue updating source characteristics for ground and surface water models for both operational and closure planning.
Speaker Change: as well as the advancement of the Diamond Gold Resource Model.
will serve as inputs.
into an updated feasibility study.
Speaker Change: At NOVA Gold, we prioritize ecological stewardship in the YK region.
Speaker Change: Since mid-2023, Foundling Gold has ramped up efforts to monitor, survey, and engage the local salmon fisheries in the Kuskokwim and Yukon River watersheds.
Speaker Change: This concludes, this includes the launch of the Salmon Smolt Monitoring Program on the George River in 2024 in partnership with the Native Village of Nipaimute.
Speaker Change: to assess health and migration patterns with the initiative set to continue into 2025.
Speaker Change: Furthermore, restoration of a portion of the historic Lyman Placer gold mining site, which included significant stream and pond habitat creation, including aquatic life access and use, was completed in 2024.
and aquatic restoration work.
Speaker Change: On the rest of Snow Gulch, previously disturbed by historic mining, will start in 2025.
Speaker Change: Donovan Gold also continued its support for the Long Haul Backhaul Program, a long-standing initiative to collect and safely dispose of hazardous household electronic waste from the YK villages.
Speaker Change: Over 800,000 pounds of hazardous waste has been removed since the program began in 2018.
and Thomas Kaplan. For more information, visit www.fema.gov.
Speaker Change: Our outreach in Alaska, especially the YK region, and in Washington D.C., has strengthened community involvement in partnership with CHELISTA and TKC, advanced effort to engage local communities, governments, and stakeholders.
Speaker Change: including public open houses in Anchorage, Bethel, and Crooked Creek in collaboration with Jaliscan TKC, providing Alaskans and local residents with the opportunity to learn more about the project, engage in open and transparent discussions.
Speaker Change: Moreover, Donald Gold and Chylista and TKC held two Substance Community Advisory Committee meetings.
The first in Antioch and the second in Enbridge.
Speaker Change: This committee, composed of members from the YK region, demonstrates our ongoing commitment to fostering communication, dialogue, and community input on subsistence matters throughout the project's life.
Speaker Change: Beyond that, the online goals establish three shared value statements, which brings the total to 18.
For more information, visit www.FEMA.gov
Lastly,
Speaker Change: In 2024, the Donovan Gold Project received continuous support from U.S. Senators Lisa Murkowski, Dan Sullivan, and then U.S. Representative Mary Peltola, who submitted a joint amicus brief in the federal court.
Speaker Change: The company appreciates the diligent contributions of the Don and Gold team.
Speaker Change: Looking at slide 17, progress on the dam safety certification continued with the submission of the preliminary design packages to the Alaska Development of Natural Resources in 2024.
were extended. The reclamation plan was also administratively extended.
Speaker Change: In state litigation, we continue to support the agencies in defending Don and Gold's 401 Water Quality Certification, Water Rights, and State Pipeline Right-of-Way Lease.
Speaker Change: These cases have been fully briefed and argued and decisions are anticipated in 2025.
Speaker Change: In federal litigation, on the joint record of decision, including the 404 permit,
Speaker Change: The court upheld the federal agency's analysis on two of the three issues raised.
Speaker Change: The plaintiffs requested reconsideration on one of these issues, which the court subsequently denied.
Speaker Change: Briefing on the appropriate remedy is scheduled to be completed in early February.
Speaker Change: With a thorough understanding of the regulatory and legal landscape, Donald Gold and its partners are committed to supporting the federal and state agencies in addressing the challenges related to the project's permits.
Peter?
Reflecting expenditures in line with budget for the year.
Speaker Change: Our net loss in 2024 decreased by $1.2 million from 2023, primarily due to lower field expenses at Donlon Gold, partially offset by higher corporate, general and administrative expenses.
Speaker Change: Compared to prior year, Donlin Gold expenses were lower as there was no 2024 field program.
Speaker Change: Corporate G&A costs increased due to hiring of additional staff along with higher professional and consulting fees.
Speaker Change: On slide 20, cash and term deposits decreased in 2024 by $24.5 million with corporate administrative costs and our share of Donlan expenditures partially offset by interest income and working capital changes of $5.6 million.
Speaker Change: Moving to slide 21. Our Treasury remains strong with cash and term deposits totaling $101.2 million as of November 30th.
Greg Lang: And with that, I'll turn the presentation back over to Greg.
Thank you, Peter.
Greg Lang: In September, NOVA Gold, Barrick, and Donlon Gold held their annual workshop in Alaska to review the work completed to date and look at the next steps for the project.
Greg Lang: Cap operations will resume in the coming months to complete grid drilling.
Aimed at refining mind-planning assumptions and efforts
Greg Lang: We'll continue to advance key work streams in preparation for a cost update.
Additional work will include project and mine planning.
Greg Lang: Further advancement of the Dam Safety Certificate applications with work on the detailed design packages.
Greg Lang: With a strong treasury of over 100 million dollars, NOVA Gold is well positioned to fund our share of activities for the next few years at current spending levels.
Greg Lang: We firmly believe that with one of the industry's most attractive development gold assets
Nova Gold is optimally positioned to deliver exceptional returns.
Greg Lang: We deeply appreciate the unwavering support and trust of our long-term shareholders whose commitment and guidance has been integral to the company's success.
Their decision to invest in continued engagement.
are invaluable to us.
and special note
Speaker Change: We would like to express our gratitude to Dr. Thomas Kaplan, our chairman and largest shareholder for his active engagement with the board and the company in driving toward its full potential.
and Peter Adamek. Thank you.
Moving forward.
Speaker Change: All while making tangible progress to advance shareholder and stakeholder value.
Speaker Change: We are confident that Diamond Gold is well-positioned to deliver exceptional returns.
Operator, we are now prepared to take questions.
Speaker Change: Thank you. We will now begin the question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two.
Speaker Change: The first question comes from Nick Giles with B-Riley Securities. Please go ahead.
Thank you, Operator, and good morning, Greg and team.
Thanks for the update here and congrats on recent progress.
Greg, my first question, I wanted to...
Get your view
Speaker Change: Project Appetite among the majors more broadly, do you think that concerns around cost overruns and inflation could be keeping anyone on the sidelines and how could Project Appetite ultimately change under this new administration? Thank you very much.
Unknown Attendee, Peter Adamek, Gregory Lang, Gregory Lang,
Speaker Change: I think to your other question, you know, we've obviously gone through a change of administration in the U.S., and I think
Speaker Change: From just about everyone's perspective, the changes are going to be good for the natural resource industry in the U.S. President Trump recently
Speaker Change: reinforcing his commitment and support of responsible development in Alaska both in the hydrocarbons and in the mining sector. So I think all of those are you know certainly positive developments which will I think encourage investment in Alaska and in natural resource projects.
Speaker Change: I really appreciate your perspective on this. My next question, and apologies if I missed this in the prepared remarks.
Could you break down the 2025 budget?
Unknown Attendee, Peter Adamek, Gregory Lang, Gregory Lang,
Speaker Change: updated mine planning, any geotechnical work, any additional detail you could provide on just the 2025 budget.
Thank you.
Speaker Change: Sure, the lion's share of the budget, the budget is 43 million dollars and you know one of the largest single items in the budget is about 15 million dollars for drilling and camp operations.
Speaker Change: You know, we continue to engage with our various stakeholders in the community relations side. So that's also a big piece of the budget. Your defense of our permits is approximately $2 million.
Speaker Change: And as the project moves forward, our holding costs and payments to the Native partners, you know, continue to increase, you know, that and, you know, normal wages of the people up in employed at Diamond in Alaska continue.
Speaker Change: And the biggest increase year over year is really the drilling and the money for the cost estimate.
Speaker Change: All of which are activities that we think, you know, add substantial value to the work we're trying to accomplish with BARA.
Speaker Change: Greg, I look forward to those drilling results and updated estimates. Appreciate all your color here this morning and to you and the team, continued best of luck.
You're quite welcome here.
Planned for the coming year.
Speaker Change: lays the foundation for the company to make the decisions to advance the project.
Speaker Change: You know, the work we're doing now with the cost estimate, the detailed drilling, metallurgical pilot work, it really is all part of laying the foundation for a future feasibility study, which is the next major step in advancing the project toward a construction decision.
Well, we have not.
Speaker Change: provided guidance on a timeline to initial construction. I think if we look at the work that we've got planned for this year, that's very important work necessary for a future feasibility study.
Speaker Change: The updating of the feasibility study is an undertaking that will be approximately 18-24 months. I think that gives you a sense of the timing that it would take for the owners to reach a construction decision.
Speaker Change: That concludes the question and answer session. I would like to turn the conference back over to Greg Lang for any closing remarks.
Greg Lang: Well, thank you, everyone. I appreciate you taking the time this morning to get an update on the activities at Donlon and within NOVA Goal.
Good day.
Greg Lang: This brings to close today's conference call, you may disconnect your lines. Thank you for participating and have a pleasant day.