Q4 2024 NovaGold Resources Inc Earnings Call
Music
Speaker Change: Thank you for standing by. This is the conference operator. Welcome to the NOAA Gold 2024 Year-End Financial Results Conference Call and Webcast.
Speaker Change: As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions.
Speaker Change: To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then 0.
Speaker Change: Webcast viewers may submit questions to the text box in the lower right corner of the webcast frame.
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: I will now turn the presentation over to our President and CEO, Greg Lang. Greg?
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.
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.
With 39 million ounces.
Speaker Change: 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.
further reinforce its social license.
On slide six.
We outline the 2024 highlights, key activities, and upcoming catalysts.
Speaker Change: Technical work advanced to position the project for an updated cost estimate, including advancing the resource model, fieldwork, and permitting work.
Unknown Attendee, Thomas Kaplan, Gregory Lang, Peter Adamek, David Ottewell
Extensive collaboration with our native corporation partners across the region.
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,
and addressing their key needs.
Speaker Change: This past year we focused on increasing Donlan's visibility and advancing activities that support sustainable value creation.
Positioning the project as a unique
Speaker Change: Gold Assets Globally, located in Alaska's stable Tier 1 mining jurisdiction.
Stalin stands out as one of the largest
Speaker Change: and highest-grade undeveloped open pit reserves globally, especially compared to the other projects in the Americas, as shown on slide 7.
Speaker Change: With global gold production in decline, the industry is facing a scarcity of high-quality development stage projects.
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 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.
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 Donovan 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: Their commitment to responsible growth closely aligns with the elders vision focusing on job creation, economic prosperity, and the preservation of their cultural heritage within their local communities.
Unknown Attendee, Thomas Kaplan, Gregory Lang, Peter Adamek, David Ottewell
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 there are invaluable expertise.
Grounded in a deep understanding of the land's economic significance.
has been essential in enhancing community well-being.
For more information, visit www.fema.gov
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.
Unknown Attendee, Thomas Kaplan, Gregory Lang, Peter Adamek, David Ottewell
Speaker Change: Turning to slide 11, we outline Donovan Gold's current permitting status.
with most.
For more information visit www.FEMA.gov
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.
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.
Donovan's existing resource occupies just 5% of its land package.
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: at a zero discount rate, or approximately $11 billion at a 5% discount rate.
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.
Speaker Change: Results derived from the considerable technical work performed over these past 12 months.
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, Foundland Gold has ramped up efforts to monitor, survey, and engage the local salmon fisheries in the Kuskokwim and Yukon River watersheds.
Transcribed by ESA, translated by —
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.
This program recycled over 140,000 pounds of materials in 2024.
Speaker Change: Over 800,000 pounds of hazardous waste has been removed since the program began in 2018.
Our outreach in Alaska.
Speaker Change: especially the YK region, and in Washington, D.C., has strengthened community involvement in partnership with CHLISTA and TKC, advanced effort to engage local communities, governments, and stakeholders.
Speaker Change: To that end, Donald Gold led numerous projects and activities in 2024.
including public open houses in Anchorage, Bethel, and Crooked Creek.
in collaboration with Jaliscan TKC.
Speaker Change: providing Alaskans and local residents with the opportunity to learn more about the project.
Engage in open and transparent discussions.
Donald Gold: Moreover, Donald Gold and Chylista and TKC held two Substance Community Advisory Committee meetings.
The first in Antioch and the second in Enbridge.
Donald Gold: 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.
Donald Gold: Beyond that, Don and Gold established three shared value statements, which brings the total to 18.
and reinforce existing long-term relationships that address specific community needs.
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: describing Donovan Gold as one of the state's most important and necessary economic development projects in one of the most impoverished regions in Alaska.
Speaker Change: The company appreciates the diligent contributions of the Don and Gold team.
Speaker Change: Our partners, stakeholders, and we remain dedicated to advancing the project to its full potential.
Unknown Attendee, Thomas Kaplan, Gregory Lang, Peter Adamek, David Ottewell
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.
Speaker Change: Comments are expected in 2025 with the issuance of a certification in 2026 or early 2027.
Speaker Change: The Alaska Pollutant Discharge Elimination System Permit and the Waste Management Permit originally set to expire.
were extended. The reclamation plan was also administratively extended.
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 that, I will now turn the call over to Peter, our CFO, to review the 2024 financial results.
Peter?
Peter Adamek: Thank you, Greg. Turning to slide 19, as NovaGold is a development stage company with no production, the company reported a loss of $45.6 million and earnings per share of negative 14 cents for the 2024 fiscal year.
Reflecting expenditures in line with budget for the year.
Peter Adamek: 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.
Increased interest expense on the Barrett Promissory Note.
Peter Adamek: lower interest income on cash and term deposits and other income related to a gain on the fair market value of marketable securities and proceeds received for the 2021 sale of the company's interest in the St. Rock mineral property.
Speaker Change: Compared to prior year, Donland 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.
[inaudible]
Speaker Change: Moving to slide 21. Our Treasury remains strong with cash and term deposits totaling $101.2 million as of November 30th.
Speaker Change: Our 2024 cash expenditures were lower than our 2024 budget by $1.1 million due to lower-than-anticipated spending at Donlon Gold.
Speaker Change: And our anticipated expenditures for 2025 are approximately $37.5 million, including $21.5 million for Donlan and $16 million for corporate GNA.
Greg Lang: And with that, I'll turn the presentation back over to Greg.
Thank you, Peter.
Speaker Change: 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.
Speaker Change: The Donlan Board approved a path forward with a 2025 budget of 43 million dollars on a 100% basis.
For more information visit www.FEMA.gov
Speaker Change: Cap operations will resume in the coming months to complete grid drilling.
Speaker Change: We'll continue to advance key work streams in preparation for a cost update.
Additional work will include project and mine planning,
Speaker Change: Further advancement of the Dam Safety Certificate applications with work on the detailed design packages.
Speaker Change: Continued support of the pending litigation and ongoing community relations and government affairs activities.
Speaker Change: With a strong treasury of over 100 million dollars, NovoGold is well positioned to fund our share of activities for the next few years at current spending levels.
Donald Gold: The path ahead for Donald Gold is clear, guided by the principles of patience,
Partnership
Donald Gold: We firmly believe that with one of the industry's most attractive development gold assets, NOVA Gold is optimally positioned to deliver exceptional returns.
Speaker Change: Reflecting on 2024, Nobel Gold remains resolute in its confidence that the Diamond Gold Project represents a prime investment in the gold market.
Speaker Change: 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.
For more information visit www.FEMA.gov
Their decision to invest in continued engagement
are invaluable to us.
Speaker Change: On special note, 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.
Speaker Change: Moving forward, we remain focused on executing our strategy with the highest standards of safety and social responsibility.
Speaker Change: All while making tangible progress to advance shareholder and stakeholder value.
with one of the industry's most attractive development projects.
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 1 on your telephone keypad. You will hear a tone acknowledging your request.
Speaker Change: 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 V-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...
Unknown Attendee, Thomas Kaplan, Gregory Lang, Peter Adamek, David Ottewell
Speaker Change: Project Appetite among the majors more broadly, do you think that...
Speaker Change: 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
Speaker Change: All right, Nick. Well, first off, thank you for joining our call this morning. Yeah, I think the project appetite. Yeah, I think it's there. It's real. You know, I think people are certainly more mindful of the inflationary pressures. And I think that
Speaker Change: in itself, you know, people are more diligent in their evaluation of projects. But that said, you know, the industry still needs them. You know, the inflationary pressures are starting to subside. And I think
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
Issued an executive order
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 encourage investment in Alaska and in natural resource projects.
Speaker Change: Greg, I really appreciate your perspective on this. My next question, and apologies if I missed this in the prepared remarks, but
and the other one.
Speaker Change: Could you break down the 2025 budget of the $43 million approved by the board? Maybe the the allocations to updated mine planning, any geotechnical work, or any additional detail you could provide on just the 2025 budget?
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: And as I mentioned in my remarks, that drilling is, you know, really very detailed, almost oar control type drilling to enhance the mine planning activities.
Speaker Change: So that's the lion's share of it. We've also allocated $5 million to lay the foundation to update the capital and operating costs for the project.
Unknown Attendee, Thomas Kaplan, Gregory Lang, Peter Adamek, David Ottewell
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, you know, activities that we think, you know, add substantial value to the work we're trying to accomplish with BERA.
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.
Speaker Change: We have a question coming from the webcast from Mr. Kovacs. Have there been any recent discussions with Barrick leading to a decision for construction?
Unknown Attendee, Thomas Kaplan, Gregory Lang, Peter Adamek, David Ottewell
The, you know, the work that we've...
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.
Speaker Change: Great, and the final question coming from the webcast from Mr. Zahnfeld. What is the timeline looking at based on the current work in 2025 and to initial production?
Well, we have not.
Unknown Attendee, Thomas Kaplan, Gregory Lang, Peter Adamek, David Ottewell
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 a very important work necessary for a future feasibility study.
Speaker Change: When this work is largely completed, we'll be in a position to make that decision.
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 Gold.
Good day.
Unknown Attendee, Thomas Kaplan, Gregory Lang, Peter Adamek, David Ottewell
Speaker Change: This brings to close today's conference call, you may disconnect your lines. Thank you for participating and have a pleasant day.
OCCITANIA
Speaker Change: Hennessey, Unknown Attendee, Thomas Kaplan, Gregory Lang, Peter Adamek, David Ottewell