Q1 2025 NovaGold Resources Inc Earnings Call
Thank you for standing by this is the conference operator welcome to the Evercore first quarter 2025 financial results conference call and webcast.
Operator: Thank you for standing by.
Operator: This is the conference operator. Welcome to the Novocode First Quarter 2025 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 to ask questions. 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. Webcast viewers may submit questions through the text box in the lower right corner of the webcast frame. Should you need assistance during the conference call, you may signal an operator by pressing star then zero.
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Castillo Rhodes: That's Castillo Rhodes myself my question did the text box in the lower right corner of the webcast pain.
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Castillo Rhodes: I would now like to turn the conference over to Melanie Hennessey, Vice President Corporate Communications. Please go ahead.
Melanie Hennessey: I would now like to turn the conference over to Melanie Hennessey, Vice President, Corporate Communications. Please go ahead. Good morning, everyone.
Melanie Hennessey: Good morning, everyone. We are pleased that you have joined us for Nova Gold 2025, first quarter webcast and conference call and for an update on the Donlin Gold project.
Melanie Hennessey: We are pleased that you have joined us for NOVA Goals 2025 first quarter 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. At the end of the webcast, we will take questions by phone. Additionally, we will respond to questions received by email.
Greg Lang: On today's call, we have novel Gould, President and CEO, Greg Lang, and Peter Animal Knowable, Vice President and CFO.
Greg Lang: 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 you as stated on slide three.
Melanie Hennessey: I would like to remind you, 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: 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.
Speaker Change: I will now turn the presentation over to our president and CEO, Greg Lang great.
Greg Lang: I will now turn the presentation over to our president and CEO, Greg Lang. Thank you, Melanie. Silver Gold is solely focused on the Donovan asset up in Alaska. some of the key attributes that the Donlan project had. You know, it's large, almost 40 million ounces of gold and a grade of two and a quarter grams. It'll be a large mine, its production will average over a million ounces a year. over a mine life measured in decades. The project is big now, but there is significant exploration potential, a long strike, and a depth. We're up in Alaska.
Greg Lang: Thank you Melanie.
Speaker Change: So the goal is solely focused on the donlin asset up in Alaska.
Speaker Change: Some of the key attributes the Donlin project has.
Speaker Change: Yeah, it's large almost 40 million ounces of gold at a grade of two in a quarter grams.
Speaker Change: It'll be a large mine production will average over a million ounces a year.
Speaker Change: Over a mine life measured in decades.
Speaker Change: The project is big now.
Speaker Change: There's significant exploration potential along strike and at depth.
Speaker Change: We're up in Alaska.
Greg Lang: a world-leading mining jurisdiction. with the well-established industry. and in a state that supports responsible mining. Our project is owned by two Alaska Native corporations, Chalista and TKC. Our partnership with them has endured for many years. The federal permit... are in hand and we're wrapping up the state permit. We remain committed. to Environmental Stewardship and Responsible Governance and Development. We've got an experienced management team that has the expertise. to continue to advance the Darwin project. and we enjoy strong shareholder support. from our institutional investors. Looking at slide six. Diamond will average over a million ounces a year of production throughout its life.
Speaker Change: A world leading mining jurisdictions.
Speaker Change: With a well established industry.
Speaker Change: And in a state that supports responsible mining.
Speaker Change: Our project is owned by two Alaska Native corporations, <unk> and Teekay see our partnership with them.
Speaker Change: Endure for many years.
Speaker Change: The federal permit.
Speaker Change: Are in hand, and we're wrapping up the state permits.
Speaker Change: We remain committed.
Speaker Change: Yeah.
Speaker Change: To environmental stewardship and responsible governance.
Speaker Change: Element, we've got an experienced management team that has the expertise.
Speaker Change: To continue to advance the Donlin project.
Speaker Change: And we enjoy strong shareholder support.
Speaker Change: From our institutional investors.
Speaker Change: Looking at slide six.
Greg Lang: Robert will average over a million ounces a year production.
Speaker Change: Throughout its life.
Speaker Change: This is twice.
Greg Lang: This is twice. The Industry Average. and the largest producer in the development pipeline throughout the industry. As global production declines, the demand for high quality assets like Donlan will continue to increase. at Two and a Quarter Grounds. The mine grade at Donovan is better than twice the industry average. It's high grade and longevity. well position it to thrive through any gold cycle. imaginable.
Speaker Change: The industry average.
Speaker Change: And the largest producer in the development pipeline throughout the industry.
Speaker Change: As global production declines.
Speaker Change: Demand for high quality assets like Dan Donlan will continue to increase.
Speaker Change: Yes.
Speaker Change: And two in a quarter grounds.
Speaker Change: The mine grade of Donlin.
Speaker Change: Better than twice the industry average.
Speaker Change: It's high grade and longevity.
Well positioning it.
Speaker Change: Drive thru any gold cycle.
Speaker Change: Imaginable.
Speaker Change: The current slide depicts the exploration potential at Donlin.
Greg Lang: The current slide depicts the exploration potential at Donlon. The 40 million ounce resource is contained in the ACMA and Lewis Mining Pit. That area represents only three kilometers of an eight kilometer system. and we've got gold bearing drill holes all up and down trend. That's right, we will resume exploration, and there is the potential to substantially increase the endowment at Donlon. Alaska is the second largest gold producing state in the United States. has almost $5 billion in annual revenue from non-fuel mineral production. The industry in Alaska generates over a billion dollars a year in goods and services.
Speaker Change: 40 million ounce resource is contained in the asthma and Louis mining pits.
Speaker Change: That area represents only three kilometers of an eight kilometer system.
Speaker Change: And we've got Goldberg drill holes, all up and down trend.
Speaker Change: Right, we will resume exploration and there is the potential to substantially increase the enrollment is done.
Speaker Change: Okay.
Speaker Change: Alaska is the second largest gold producing state in the United States.
Speaker Change: He has almost $5 billion.
Speaker Change: In annual revenue from non fuel mineral production.
Speaker Change: The industry in Alaska.
Speaker Change: Generates over $1 billion, a year in goods and services.
Greg Lang: This results in 12,000 high-paying jobs for the local economy. A recent executive order aims to strengthen Alaska's position and encourage resource development. This initiative will drive new opportunities for gold mining, job creation, and economic expansion. which will enhance investor confidence aligning well with Donald Gold's potential.
Speaker Change: This results in 12000 high paying jobs for the local economy.
Speaker Change: Our recent executive order aims to strengthen alaska's position and encourage resource development.
Speaker Change: This initiative will drive new opportunities for gold mining job creation.
Speaker Change: And economic expansion.
Speaker Change: Which will enhance investor confidence aligning well.
Speaker Change: With Donlin golds potential.
Speaker Change: Turning to slide 10.
Greg Lang: Turning to slide 10. The land at Donlon is owned by two Alaska native corporations. Chalista owns the mineral rights and TKC owns the surface rights. They share their elders vision for responsible mineral development. their expertise and stewardship. grounded in a deep understanding of the significance of the land to their people are crucial to responsible economic development and long term benefits for the YK region where their communities are located.
Speaker Change: When the dollar is owned by two Alaska Native corporations <unk> owns the mineral rights and Teekay C owns the surface rights.
Speaker Change: They share their children their elders vision for responsible minerals development.
Speaker Change: Their expertise and stewardship.
Speaker Change: Grounded in a deep understanding of the significance of a wound to their people are crucial to responsible economic development and long term benefits for the Y K region, where their communities are located.
Speaker Change: Pardon me.
Greg Lang: permitting in the United States. is a long-term rigorous process. and we have substantially completed it. Our federal permits are in hand and our state permits are well adapted. The only remaining state permit of any consequence is for the tailings dam. and this work is well underway. We have secured these permits, and we are actively supporting the agencies in maintaining and defending these permits. This process has required extensive community engagement throughout. Nobel Gold has made significant strides. in Environmental Stewardship. and good government.
Speaker Change: The United States.
Speaker Change: It's a long term rig.
Speaker Change: Rigorous process and we have substantially completed it.
Speaker Change: Our federal permits are in hand.
Speaker Change: Our state permits are well advanced.
Speaker Change: The only remaining state permit of any consequence is for the tailings dam.
Speaker Change: And this work is well underway.
Speaker Change: We have secure these permits and we are actively supporting the agencies and maintaining and defending these permits.
Speaker Change: This process is required extensive community engagement throughout.
Speaker Change: No. The globe has made significant strides.
Speaker Change: And environmental stewardship.
Speaker Change: And good governance.
Speaker Change: We will be shortly publishing our new sustainability report say.
Greg Lang: We will be shortly publishing our new sustainability report. safety has been a top priority at Donovan. And the project has Chief. a record of no lost time accidents in well over a decade. We're very proud of our accomplishments in this area.
Speaker Change: Safety.
Speaker Change: It's been a top priority at Donlin.
Speaker Change: And the project.
Speaker Change: Ashish.
Speaker Change: Our record of no lost time accidents, well over a decade, we're very proud of our accomplishments in this area.
Speaker Change: Coca Cola has a very experienced management team.
Greg Lang: NovaGold has a very experienced management team. All of us come from major mining corporations. and have the expertise. to take Donlon forward. We also enjoy strong institutional shareholder support. Over 70% of our shares are held with our top 10 shareholders. They share our vision for responsible, long-term development, and we are extremely grateful for their support. and their focus on helping us maintain. and maximize the project's value.
Speaker Change: All of us come from major mining corporations.
Speaker Change: And have the expertise to.
Speaker Change: To take Donlin forward.
Speaker Change: We also enjoy strong institutional shareholder support.
Speaker Change: Over 70% of our shares are held with our top 10 shareholders.
Speaker Change: They share our vision for responsible long term development.
Speaker Change: We are extremely grateful for their support.
Speaker Change: And their focus on helping us maintain.
Speaker Change: And maximize the projects here.
Speaker Change: Okay.
Speaker Change: These are unprecedented times.
Greg Lang: These are unprecedented times. when it comes to gold price. He's hitting new records every week. Diamond Gold brings exceptional leverage in a jurisdiction where you can keep it. at an undiscounted rate, the current spot price. yields over 40 billion dollars. This underscores the very significant economic potential at Donner.
Speaker Change: When it comes to gold price is hitting new records every week.
Speaker Change: And gold brings exceptional leverage.
Speaker Change: Euro section, where you can keep it.
Speaker Change: And then discounted rate.
Speaker Change: Current spot price.
Speaker Change: Yields over $40 billion.
Speaker Change: <unk> scores, the very significant economic potential at dawn.
Speaker Change: Turning to the first quarter highlights.
Greg Lang: Turning to the first quarter highlights. The Camp O'Donohue was opened. earlier this year and drilling commenced in March. We have a program of 15,000 meters planned for the year, initially focused on grid drilling to enhance our understanding of the parameters that will support mine planning that will ultimately feed into an updated feasibility study. Noble Gould and Donovan staff have traveled to Juneau to meet with members of Alaska's Congressional Delegation to share information about Donovan. the project's importance to Alaska. and the YK region. We also presented in Juneau to the Alaska House of Representatives Energy Committee.
Speaker Change: The cap the dominant was opened.
Speaker Change: And early earlier this year and drilling commenced in March.
Speaker Change: We have a program of 15000 meters planned for the year initially focused on grid drilling.
Speaker Change: To enhance our understanding of the parameters that will support mine planning that will ultimately feed into an updated feasibility study.
Speaker Change: <unk> and Donlin staff.
Speaker Change: Traveled to China to meet with members of last sketch congressional delegation to share information about them.
Speaker Change: And reinforce the.
Speaker Change: The project's importance to Alaska.
Speaker Change: And the Y K region.
Speaker Change: We also presented in journal.
Speaker Change: The Alaska House of Representatives Energy Committee.
Speaker Change: To describe the projects energy needs and to discuss.
Greg Lang: to describe the project's energy needs and to discuss Alaska's environmental standards. In collaboration with our native villages, we provided financial assistance to maintain the ice road on the Kuskokwim River, allowing the people in that region safe access between the villages. We continue to support local community events, such as the Diamond Gold Basketball Tournament. and the Kuskokwim 300 Sled Dog Race, where we sponsor three mushers from the YK region. We anticipate that we will receive comments from the agencies on the preliminary dam certification project package that was recently submitted. The state water permits have been extended.
Speaker Change: Alaska is environmental standards.
Speaker Change: In collaboration with our main intelligence, we provided financial assistance to maintain the ice road on the Kuskokwim River.
Speaker Change: Allowing the people in that region safe access between the villages.
Speaker Change: Yeah.
Speaker Change: We continue to support local community events, such as Saddam Angola basketball tournament.
Speaker Change: And the Costco Club 300, sled dog race, where we sponsored three mushers from the Y K region.
Speaker Change: We anticipate that we were seeing comments from the agencies on the preliminary dam certification project package that was recently submitted.
Speaker Change: Okay.
Speaker Change: State water permits have been extended.
Speaker Change: In the litigation related to our permits we continue to support Donlin and the state permits and all of these cases have been fully briefed.
Greg Lang: In the litigation related to our permits, we continue to support Donlan in the state permits, and all of these cases have been fully briefed. In federal litigation, the court ordered supplemental briefing on the remedy that was completed in March and oral arguments will take place on April 14th. With a thorough understanding of the regulatory and legal landscape, Donovan Gold and its partners are committed to supporting and defending the permits that have been granted by the agency.
Speaker Change: And central litigation.
Speaker Change: Court ordered supplemental briefing on the remedy that was completed in March and oral arguments will take place on April 14th.
With a thorough understanding of the regulatory and legal landscape.
Speaker Change: Gold and its partners are committed to supporting and defending the permits that have been granted by the agencies.
Peter: With that I will now turn the call over to Peter.
Peter Adamek: With that, I will now turn the call over to Peter Adamek, our Chief Financial Officer. Peter. Thank you, Greg. Turning to slide 20, our net loss in the first quarter of 2025 decreased by $1.2 million from the comparative 2024 quarter, primarily due to lower stock based compensation expense and lower Donilon Gold expenditures, partially offset by lower interest income. Other than stock based compensation expense, which declined by 1.4 million in the quarter, general and administrative costs during the quarter were in line with the comparative 2024 period.
Peter: Our Chief Financial Officer Peter.
Peter: Thank you Gregg turning to slide 20, our net loss in the first quarter of 2025 decreased by $1 2 million from the comparative <unk> 'twenty 'twenty four quarter, primarily due to lower stock based compensation expense.
Peter: And lower Donlin gold expenditures, partially offset by lower interest income.
Peter: Okay.
Peter: Other than stock based compensation expense, which declined by $1 4 million in the quarter general and administrative costs during the quarter were in line with the comparative 2024 period.
Peter: Okay.
Peter: On slide 21.
Peter Adamek: on slide 21. Cash and term deposits decreased by $8.2 million. with Corporate and Administrative Costs and our share of Donland Gold expenditures partially offset by interest income as well as approximately $1 million in proceeds from the sale of marketable securities. Compared to prior year, Donlon Gold's first quarter funding was unchanged as Donlon Gold site activities related to the 2025 field program only commenced late in the quarter.
Peter: Cash and term deposits decreased by $8 2 million.
Peter: With corporate and administrative costs and our share of Donlin gold expenditures, partially offset by interest income as well as approximately $1 million in proceeds from the sale of marketable securities.
Peter: Compared to prior year.
Peter: <unk> Gold's first quarter funding was unchanged as Donlin Gold's site activities related to the 2025 field program only commenced late in the quarter.
Peter: Turning to slide 22, our treasury remains robust with cash and term deposits.
Peter Adamek: Turning to slide 22, our treasury remains robust with cash and term deposits. totaling $93 million at the end of the first quarter of 2025. Our first quarter cash expenditures remain on track to meet our 2025 budget and guidance. Donland Gold expenses in the first quarter of 2025 were below the quarterly run rate implied by our 2025 guidance, as Donland Gold site activities related to this year's field program only commenced late in the quarter. We expect Donland Gold expenditures to ramp up in the second and third quarters. Our anticipated expenditures for 2025 remain unchanged at approximately $37.5 million, including $21.5 million for Donlan and $16 million for Corporate G&A.
Peter: Totaling 93 million at the end of the first quarter of 2025.
Peter: Our first quarter cash expenditures remain on track to meet our 2025 budget and guidance.
Peter: Donlin gold expenses in the first quarter of 2025 were below the quarterly run rate implied by our 2025 guidance as Donlin gold site activities related to this year's field program only commenced late in the quarter.
Peter: We expect donlin gold expenditures to ramp up in the second and third quarters.
Peter: Our anticipated expenditures for 2025 remain unchanged at approximately $37 5 million, including $21 5 million for Donlin and 16 million for corporate G&A.
Greg Lang: And with that I'll now turn the presentation back over to Greg.
Greg Lang: And with that, I'll now turn the presentation back over to Greg.
Greg Lang: Thank you Peter.
Greg Lang: Thank you, Peter. The Diamond and Gold Project budget for this year is $43 million. In addition to the drilling. We will continue geotechnical and geoscience work and project planning. We will advance the dam safety certificates and our very active community relations, government affairs and permits. Support will continue. Noble Gold's priority. remains focused. on the work necessary to ultimately support a new bankable feasibility study. With a strong treasury of approximately $93 million, Nobel Gold is well positioned to fund our activities for the coming years.
Greg Lang: The Donlin Gold project budget for this year is $43 million.
Greg Lang: In addition to the drilling.
Greg Lang: We will continue geotechnical and geoscience work and project planning.
Greg Lang: We will advance the dam safety certificates and are very active community relations government affairs and permits.
Greg Lang: Support will continue.
Greg Lang: <unk> priority.
Greg Lang: Remains focused on.
Greg Lang: On the work necessary to ultimately support.
Greg Lang: New bankable feasibility study.
Greg Lang: With a strong treasury of approximately $93 million <unk> is well positioned to fund our activities for the coming years.
Greg Lang: The path for Donlin is clear.
Greg Lang: The path for Donlon is clear. We've got a lot of patience, we've got great partnerships, and an unrelenting focus. on the long-term value of God.
Greg Lang: A lot of patients great partnerships and an unrelenting focus on the long term value of Donlin.
Greg Lang: To recap my presentation.
Greg Lang: To recap my presentation. Diamond gold is unique in the gold space. with a production profile of over a million ounces a year for almost three decades. The grade is exceptional and the exploration potential along strike and at depth is unique. The jurisdictional safety of Alaska, particularly in light of the new executive orders. is immense and a key attribute in future investment in the state. We are steadfast in our relationships and collaboration with our Native partners.
Greg Lang: Donlin gold is unique in the gold space.
Greg Lang: With the production profile of over a million ounces a year for almost three decades.
Greg Lang: The grade is exceptional and the exploration potential along strike and index is unique.
Greg Lang: The jurisdictional safety of Alaska, particularly in light of the new executive orders.
Greg Lang: Is immense.
Greg Lang: Key attribute and future investment in this state.
Greg Lang: We are steadfast in our relationships and collaboration with our native partners.
Greg Lang: Our permits are in hand. We remain committed to the environment and social and governance issues. and we have an experienced team. that can take this project forward.
Greg Lang: Permits are in hand, we remain committed to the environment, social and governance issues.
Greg Lang: And we have an experienced team.
Greg Lang: It can take this project forward.
Greg Lang: And finally, we appreciate the longstanding support of our shareholders.
Greg Lang: And finally, we appreciate the longstanding support of our shareholders.
Greg Lang: We will now open the call for questions.
Greg Lang: We will now open the call for questions. Thank you. We will now begin the question and answer session.
Greg Lang: Thank you.
Speaker Change: Ill begin the question and answer session will join the question queue. You May Press Star then one on your telephone keypad Hello here at town acknowledging your request.
Operator: To join the question queue, you may press star then 1 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.
Speaker Change: A speakerphone please pick up your handset before pressing any key.
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Speaker Change: And Italia question. Please press Star then two.
Speaker Change: Our first question comes from Mikhail.
Fedor Shabalin: The first question comes from Nick Giles with D. Reilly. Please go ahead. Good morning, everyone. Thank you very much, Operator. This is Fedor Shabalin on behalf of Nick Giles. Greg and the team, congrats on the progress in the quarter.
Speaker Change: B Riley. Please go ahead.
Speaker Change: Good morning, everyone. Thank you very much operator.
Speaker Change: This is further shuttle and on behalf of mixed child.
Speaker Change: Greg and the team congrats on the progress in the quarter. My first question is about the court's ruling and lift come in.
Greg Lang: My first question is about the court's ruling and the upcoming argument on April 14. What would be the next steps and what are your expectations for the hearing regarding the evaluation of a larger theoretical release from Dolan Gold's tailings storage facility? And how strong is their position, if we can call it that way? Thank you.
Speaker Change: Augment on April 14.
Speaker Change: What would be the next steps and what are your expectations for the hearing regarding the emulation also of a larger theoretical relieve from Donlin Gold's tailings storage facility and how strong is that position if we can call it that way. Thank you.
Speaker Change: Yeah.
Speaker Change: Okay.
Greg Lang: Well, good morning, Nick, and thank you for joining our call. You know, the question you posed pertains to the litigation that's ongoing in federal court regarding our 404 permit. You know, the The issue was during the preparation of the EIS, we did not study a massive failure of the tailings dam, we just studied, you know, partial failure, which we thought was adequate considering the design of the dam, which is all downstream construction rock fill. But it was rather than, you know, push back on that, the Corps of Engineers decided to, yes, let's just do the additional study.
Nick: Well good morning, Nick and thank you for joining our call.
Nick: So the question you posed pertains to the litigation that's ongoing in federal court regarding our.
Nick: 404 permit.
Nick: The.
Speaker Change: The issue it was during the preparation the EIA as we did not study a massive failure of the tailings dam, we just studied.
Speaker Change: A partial failure, which we thought was adequate considering the design of the dam, which is all downstream construction Rockville.
Speaker Change: But it was a rather than a.
Speaker Change: Pushback on that.
Speaker Change: Core of engineers decided to yes, let's just due to the additional study so the argument before the courts right now is just to define that study and.
Greg Lang: So the argument before the courts right now is just to define that study, and you know, both sides will file their briefs later this month, and then we will wait for a ruling. You know, it's not an issue that I'm overly concerned by, you know, the judge's ruling was very narrow in the work they wanted the Corps to do, and so we'll, you know, it will take probably six, eight months to get that work done, and then the court will... take whatever time they need to make a ruling. And that's always a bit unpredictable. But the court cases have all so far gone very well.
Speaker Change: We both sides profile their briefs later this month and then we will wait for a ruling.
Speaker Change: It's not an issue at that time.
Speaker Change: Overly concerned by that.
Speaker Change: The judges ruling was very narrow in the work. They wanted according to do and so will it will take probably six eight months to get that work done and then the court will.
Speaker Change: Take whatever time, they need to to make a ruling and that's always a bit unpredictable, but the court cases evolve so far have gone very well and.
Greg Lang: And I anticipate they will continue to go well. And it's not really anything that's on our critical path. So we'll navigate those in due course.
Speaker Change: We anticipate they will continue to go well and it's not really anything that's on a critical path.
Speaker Change: So we will navigate those in due course.
Speaker Change: Yeah.
Greg Lang: Great to hear. Thank you.
Speaker Change: Great to hear thank you and the second one is.
Greg Lang: And the second one is, so you already started the field program and drilling. Can you talk a bit about the modifying factors for converting mineral resources to mineral reserves and how the project might be revalued considering these conversions? With conversions, higher gold prices and probably potential inflationary corrections. Okay, well, the first phase of the drill program is fairly tightly spaced drilling, you know, almost on a spacing that you would use for or control if you were mining. So we're using the data from this drilling to really fine tune bench heights, mining widths, and so on.
Speaker Change: So you you'll have you already started the field program and drilling.
Speaker Change: Can you talk could be to bobs and modifying factors for converting mineral resources to mineral reserves and how that project might be reevaluated considering these conversions.
Speaker Change: With conversions higher gold prices and.
Speaker Change: So the potential inflationary corrections.
Speaker Change: Sure well the first.
Speaker Change: First phase of the drill program is fairly tightly spaced drilling.
Speaker Change: Almost on a spacing that you would use for where control. If you were mining. So we're using the data from this drilling to really fine tune your bench heights mining width and so on so it's really more of a fine tuning exercise the second part of the drop off and that's what we're drilling now the second part of the program.
Greg Lang: So it's really more of a fine tuning exercise. The second part of the drill program, and that's what we're drilling now, the second part of the program is, you know, there's areas in and around the known ore bodies where the drill spacing isn't adequate to calculate a reserve or a resource. So some of the holes will fill in some of the areas of light drilling and, you know, the goal is to update or upgrade some of the inferred material. and we'll be, you know, guiding everybody as our results come in. I appreciate the color, Greg, and the team.
As you know there is areas in and around the.
Speaker Change: The known ore bodies, where the drill spacing isn't adequate to calculate our reserve or resource. So some of the holes will fill in some of the areas like drilling.
Speaker Change: The goal is to update upgrade.
Speaker Change: Some of the inferred material.
Speaker Change: And we will be.
Speaker Change: You know guiding everybody is our results come in.
Speaker Change: I appreciate the color Greg and the team continued best of luck and turn it over for now thank you.
Greg Lang: Continue, best of luck, and turn it over for now. Thank you. Thanks, Nick.
Speaker Change: Thanks, Nick.
Speaker Change: The next question comes from Andy <unk> private Investor. Please go ahead.
Andy Skopik: The next question comes from Andy Skopik, Private Investor. Please go ahead. Good morning. A couple of questions I'd like to ask.
Speaker Change: Good morning couple of questions I'd like to ask you've made reference to a fully bankable feasibility study and I'd like to ask if you could estimate the cost of completing such a feasibility study and give any indication.
Greg Lang: You've made reference to a fully bankable feasibility study, and I'd like to ask if you could estimate the cost of completing such a feasibility study and give any indication of the timeline for completion. Well, I'll break that into parts. The estimated cost for a full bankable feasibility study is about $80 to $100 million. And it's an undertaking that would require approximately two years. The owners of Donlan, us, and Barrick have not reached that decision yet. I think our main focus right now really is get the drilling done. And based on that, we'll have more data on which to make a decision on the feasibility study.
Speaker Change: <unk> of the timeline for completion.
Speaker Change: Well I'll break that into into part B.
Speaker Change: The estimated cost for a full bankable feasibility study is about $80 million to $100 million and it's an undertaking that will require approximately two years.
Speaker Change: The owners of Donlin and Barrick have not reached that decision yet I think our main focus right now really is get the drilling done and.
Speaker Change: It's based on that we will have more data on which to make a decision on the feasibility study.
Peter Adamek: Okay, question for Peter. Given the budget that you put forward for this current year, what is your projected use of cash?
Speaker Change: Okay a question for Peter.
Speaker Change: Given the budget that you've put forward for this current year.
Speaker Change: What is your projected use of cash.
Speaker Change: Well I. Thank you Andy for the question.
Peter Adamek: I thank you, Andy, for the question. Our budget was $37.5 million split between 2016 for NOVA Gold G&A, cash G&A if you will. And the remainder is $21.5 for Donovan. So our use of cash principally is to fund those two activities. And that's a little bit offset by interest income on the cash we have on deposit.
Speaker Change: You know our budget was 37 $5 million split between 16 for Nova Gold's G&A cash G&A, if you will.
Speaker Change: And the remainder is 21.5 Ford for Donlin. So our use of cash principally is to fund those two activities and that's a little bit offset by interest income on the cash we have on deposit.
Speaker Change: Okay.
Andy Skopik: Okay, I'm going to come back to you, Greg, for one more. You know, I've been familiar with this story for quite some time, and although I am a retired investor now, I did meet Tom Kaplan in New York at a presentation, probably close to a dozen years ago now. This has been a development company for a long time, and I think, you know, investors are just getting more than a little impatient with how slow things seem to be developing. And you do have a partner in Barrick, and I just really wonder to what extent The developmentā¦ of this project, the pace is going to start to pick up.
Greg Lang: Come back to you Greg for one more you know.
Speaker Change: Familiar I've been familiar with the story for quite some time.
Speaker Change: Though I am a retired investor now I did meet Tom Kaplan in New York at a presentation, probably close to a dozen years ago. Now. This is this has been a developing company for a long time and I think you know investors.
Speaker Change: Or just getting.
Speaker Change: A little impatient with how slow things seem to be developing and you do have a partner and Barrick and I just really wonder.
Speaker Change: To what extent.
Speaker Change: The development.
Speaker Change: Of this project is the pace is going to start to pick up.
Speaker Change: Well, yes, as I mentioned in my remarks, we're working with our partner to complete this drill program and.
Greg Lang: Well, you know, as I mentioned in my remarks, we're working with our partner to, you know, complete this drill program and, you know, incorporate the results into our understanding of mining methods. You know, this work will be done probably largely finished drilling, you know, late May, early June and in a month or two to, you know, digest the closed space drilling and then we'll be in a position to move forward. Certainly gold at record high prices is a motivator, but, you know, right now we're taking it one step at a time and continuing to work with Barrick.
Speaker Change: Incorporate the results into our understanding of the mine.
Speaker Change: Mining methods.
Speaker Change: This work will be done probably largely finished drilling.
Speaker Change: Late May early June in a month or two to digest the close space drilling and then we'll be in a position to move forward certainly gold at record high prices.
Speaker Change: As a motivator, but yeah right now we're taking it one step at a time and we're continuing to work with Barrick.
Greg Lang: All right, thank you very much.
Speaker Change: Alright, Thank you very much.
Speaker Change: Yeah.
Speaker Change: We have a few questions coming in from the line and.
Operator: We have a few questions coming in from the line.
Greg Lang: The first is, can you comment on the resource and how much of it is refractory? Well, the Donlan ore body is essentially all refractory. You know, there's some oxide near surface, but, you know, that's relatively insignificant. You know, the flow sheet at Donlan is to flow to concentrate and treat the concentrate in the autoclave and then subsequently leach the gold. So it's very, very common in the industry. We're, you know, certainly Richard Williams, our engineering vice president and chief operating officer, has, you know, probably 30 years experience working with autoclaves. So it's a technology that's been demonstrated to be reliable for decades in the mining industry and one that our team is very familiar with.
Speaker Change: The first is can you comment on on the resource and and how much of that is refractory.
Speaker Change: The donlin ore body is essentially all refractory yeah, theres some oxide near surface.
Speaker Change: That's a relatively insignificant the flow sheet at Donlin is too slow to concentrate and <unk>.
Speaker Change: Treat the concentrate in the autoclave and then subsequently leach the goal. So it is very very common in the industry.
Speaker Change: And.
Richard Williams: There were certainly Richard Williams, our engineering Vice President.
Richard Williams: And Chief operating Officer has.
Richard Williams: With 30 years experience working with older claims so it's a technology that's been demonstrated.
Richard Williams: Straightened to be reliable for decades in the mining industry and one that our team is very familiar with.
Speaker Change: Great and then the last question from the line.
Greg Lang: Great.
Greg Lang: And then the last question from the line is, given the current Treasury, is there any future needs for funding? And is that linked to litigation?
Richard Williams: Is and given the current.
Richard Williams: The Treasury is there any future needs for.
Richard Williams: For funding and is that linked to litigation.
Richard Williams: Well our Treasury S.
Greg Lang: Well, our Treasury, as Peter mentioned in his remarks, our Treasury is robust, and we've got more than sufficient funds to see us through this year. And regarding the litigation, we are working our way through it and supporting the Army Corps of Engineers, the State of Alaska, and the Bureau of Land Management in defending the rigorous work they did on those permits. So I think, you know, it's something we need to work through, but it's really not a critical item for us. You know, we have the courts of rule in our favor every step of the way, and we expect that will continue.
Richard Williams: As Peter mentioned in his remarks, our treasury is robust and.
Richard Williams: We've got more than sufficient funds to see us through this year and regarding the litigation.
Richard Williams: We are working our way through it and supporting the Army Corps of engineers, the state of Alaska, and the Bureau of land management in defending the rigorous work. They did on those permits. So I think yes, it's something we need to work through but it's really not a critical item for us we have.
The courts have ruled in our favor every step of the way and we expect that will continue.
Speaker Change: The next question comes from Robbie Nozomi with National Bank Financial. Please go ahead.
Ravi Nizami: The next question comes from Ravi Nizami with National Bank Financial. Please go ahead. Good morning, everyone. Thanks for taking my call. Greg, just given the strength in gold prices that we have at all-time highs, can you just speak a bit towards how this environment influences your decision-making or the pace of prioritization on this project, whether that comes to permitting or moving forward on the feasibility? Thank you.
Robbie Nozomi: Good morning, everyone. Thanks for taking my call.
Speaker Change: So Greg just given the strength in gold prices that we have at all time highs can you just speak a bit towards.
Speaker Change: All of this environment influences your decision, making or the pace of prioritization.
Speaker Change: This project, whether that come to permitting or or.
Speaker Change: Or moving forward on the visibility.
Speaker Change: Thank you.
Speaker Change: I think I'm not sure I fully understand your question well first off thank you for joining us.
Greg Lang: I think, not sure I fully understand your question. Well, first off, thank you for joining us. you know, we are probably the most important thing we need to do in the coming months is execute on our drill program and continue to, you know, we engage with the communities and our other stakeholders. So that's really our focus. I think, you know, gold prices where they are now, certainly Donlan looks just, you know, very, like a very compelling investment. I think we're going to take this one step at a time, finish the drill program, fine-tune our mining methods, and that will then position the owners in a place to make a decision on the next step.
Speaker Change: You know we are probably the most important thing we need to do in the coming months is execute on our drill program and continued to engage with the communities and our other stakeholders. So that's really our focus I think gold prices, where they are now certainly donlin looks just like a <unk>.
Speaker Change: Very compelling investment.
Speaker Change: We're going to take this one step at a time finish the drill program fine tune, our mining methods and that will then position the owners in a place to make a decision on next steps.
Speaker Change: This concludes the question answer session.
Greg Lang: This concludes the question and answer session.
Greg Lang: I would like to turn the conference back over to Greg Lang for any closing remarks. Please go ahead. Well, everyone, thank you for taking the time to join our Q1 call this morning and we look forward to updating everyone. as we advance the work at Dahlman this year.
Speaker Change: I would like to turn the conference back over to Greg Lang for any closing remarks. Please go ahead.
Speaker Change: Well everyone. Thank you for taking the time to join our Q1 call. This morning, and we look forward to updating everyone.
Speaker Change: As we advance the work it down this year.
Operator: Thank you.
Speaker Change: Thank you.
Speaker Change: This brings to a close today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.
Operator: This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
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