NG - Earnings call transcript Q2 2021 | NovaGold Resources Inc.

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Operator

Thank you for standing by. This is the conference operator. Welcome to the NovaGold Second Quarter 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. now Vice turn President, would to conference I Hennessey, Melanie Corporate Instructions] like the to over [Operator Communications. Please go ahead.

Melanie Hennessey

Thank morning, everyone. Good you, Claudia.

take XXXX webcast Thomas the President the Donlin both We us and project. NovaGold’s On questions and you Vice that we Gold we Chairman; for second have end by and call, NovaGold’s Ottewell, Dr. also on are At results NovaGold’s phone quarter of and update have an will CFO. today’s the financial Kaplan, pleased by for text. joined David

and to risk over our Additionally, we SEDAR call received will on made in Dr. likely such our would I goals, which like as now projections various contain that included remind respond this slide involve presentation and are questions and Thomas webcast may filings Tom? the by presentation. to any the statements to information today and email. our have turning three, in I stated disclaimers to forward-looking forward-looking Chairman, participants Kaplan. of EDGAR as pleasure detailed

Dr. Thomas Kaplan

everyone. project to Melanie, of great and sends in you, office four. Alaska the of back we’ll morning, Alaskan days. with attend had Greg slide emergency west of good and he’s be his revenues regrets, that to State several as venture employment. in an shown the even is a family and the important Thank The as to part economy important It’s the partnership mining more joint a state on Barrick becoming is Gold [ph] and

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David Ottewell

reported income quarter, the to the foreign Thank Donlin our year million increase from of camp We and Also interest and Slide and net in compensation second this dollar earned higher to movements, loss a share of year, you, full legal to the compared the precautions. activity the were of lower primarily Canadian increase to year’s deposits. costs XX quarter exchange highlights operating of performance. $X.X million quarter an term $X.X strength a the cash Tom. temporary due pause and on last resulting quarter, due based prior contributing from at COVID

with higher Higher cash spent slightly Second funding the second on we working million. On and capital. are million quarter, on movements XX. than highlighted in We term reduction dollar a of denominated quarter. treasury. spending exchange ended $X.X foreign the offset prior Canadian quarter Gold robust deposits cash by our quarter and $XXX.X slide in and We XX, Donlin was the flows G&A year note cash slide

we month, $XX In $XX next addition to our million Newmont cash and term July from an additional have in million also with deposits, due due XXXX.

We to back our for $XX and million to turn our $XX now including this call million share corporate Donlin the anticipate spending Kaplan. of $XX year, I our fund to continue Chairman, will $XX to G&A over million million to $XX costs. Thomas million

Dr. Thomas Kaplan

life project an measured Thank already foundation in you very expected decades. that enjoys upon. the much, And mine is incredible Gold that attributes Dave. We already may Donlin of to build all be recognize

ton, with greater slide grade its the category combined its [Technical resource Gold The largest from large have of XX do responsibility to scale pit and Difficulty] the resources gold on is corners. quality, the that measured start XX, XX, average stakeholders shown a right XX great to gold with million Americas at is times of Donlin cut Donlin as slide grams shown in and average. when things the mineral at With approximately the exceptional. open ounces twice as four than projects large the a and any comparable on global X.XX Gold not a We compared to in all indicated its

of producers, on there’s the gold and peers And continues industry for scale, major would and American further the year production desperately this past million most decrease the gold projects cited needs Donlin per Gold’s the mine, average ounces major shown XXXX, Only slide the particularly XX. the as new North for far life slide illustrating indeed the slide. produced as of of ounces more then, to some, more Global X in with it’s the unique of course, of that XX. currently decade attributes is over given all of As safe profile a production operations and discoveries and the in we’ve in combination grade shown longevity. envisioned, in average on located, Alaska, jurisdiction three exceeds than of X in mining Gold Donlin teal X.X million jurisdiction. project then South scarcity its that which Tier than this.

the operations around in five stage was blue, in dark shows operations in mining top also slide Donlin largest scale projects in comparable is development, top gold. gold production would the both production at it the Donlin among today. and ranked world, if Looking development The in

that globally, and only there’s Looking has Donlin. a both one desirable development mining scale project jurisdiction,

and that Gold, best in one the as Donlin of pit open assay the of project mine the substantially state receipt of an XX It’s encountered Gold will since at represents a from brought enhancement, methodically the latest The of focus exploration the up value XXXX. work investing work, Then shown responsibly X update important and the And this the on Donlin XXXX we highly either property. been the of truly let’s the and the complete federal the optimization XX, deposit. foundation represents haven’t Donlin invested is largest study. feasibility of in or not given technical X of subject our our investors, And upcoming develop is a The governments assets, located legislation belt resource model will are drill geologic Alaska, this unusual where rule X% drill the means, exceptional to has effectively world’s modeling While lost seizing we’re focused Lewis respect around upfront shown by chain. Gold record data, in contained the and attributes, and several world, decision After responsible pits derisked tested amongst of of drill project’s there of permits, the only belt, mineralized we law. We project’s mining anywhere to the development. are Gold incredible success. permitting and Gold’s grateful shift in we’ve kilometers formal slide results kilometer incorporating of that one time Gold, of an as the all Deposits program, all within for sight for unique studies, rewarded. culture the is years studies XXXX boasts coveted. and Gold advance in only and mine Donlin endowment rare gold just physically ACMA forget total not Donlin which and Board a and in programs on or trade-off world. through gold by the solid most mineralized pastoral believe is the by we special the project’s of exploration other attributes diagram gold development Donlin to to life combination sustainably In amply potential. program recent examples and that, to Donlin and Slide and for critical time sustainable industry decision be

Difficulty]. is and will for that of thankful advance NovaGold and of for have with slide shown We shareholders, our a XX. whom are been decade sharing many confident TKC holders encouragement are engagement, and Calista knowledge, NovaGold unique the dedication, on this Barrick, [Technical

participants. money. extremely summarized investment, our maximizing manner. put that take chain. it uniqueness key with you’ve all from trust proud the advanced by value Donlin in we stage robustness jurisdiction, and well are safe categories, Difficulty] permitting, partnerships, us a on we team responsible we strategy attributes the the Donlin humbled a The it’s of built socially remain you project, the and your Thank again this as potential, on of as scale move our focused similar in of now management and line in size, that measured, It’s up The slide of We for and important grade, Gold exploration as very will operations has you. are balanced, appreciative XX. sheet, seriously. take operated returns questions responsibility [Technical in Operator, of make We’re balance team

Operator

you, with question is Our Thank Securities. Lucas Pipes ahead. Riley go sir. B. [Operator Please from first Instructions]

Lucas Pipes

question is Tom hear Thank much, But good the feels higher looking see bit do thoughts over like a it’s and catalyst, and to team. your Tom wanted to appreciate you. what the turn is market really your for project would and what then first gold you very voice. it here appreciate to the and Tom, your ask direction Thank as great morning, insights? I your a next specifics. outlook, level to you

Dr. Thomas Kaplan

it’s I Thank well. hearing looking really Great as you, Lucas. really of direction. the gold something market don’t your think voice for

say, to gold to which gold I of more think expect when least do it that, we expect you is it’s a function you it. what doing, does do, least always it what

dealing is once I correction think gold. new that with a that to is going we’re highs in what way out lead to the of

gold see not well. we’ll Essentially through in that as only some it’s market, we’re go think what the markets I gold other right XXXX. in seeing,

You’re some maximum fresh capitulation. you silver, and into are accompanied into that had to the seeing I by market today, put exposure. dollars give particularly and equities if the gold that the But it’s pullbacks

we’re things overall unchartered terms that which fact waters. have is in seeing come part this we me, changed are the So to some that and of to people markets, to and in what with parcel is the having are

a to cheap been. One sea of are the precious change you that have and as assets as the ever are to such we’re exposure metals when always in the want equities they’ve

So they’re part. great

Lucas Pipes

from could an provide you, helpful. would mentioned, that development? program it look the And if what towards work be you you study very completed from long obviously, update of kind the I like for timeline and feasibility drill wondered completed. you commenced would -- to you Thank there commence how then, Very is much. Tom. once there of take Thank the study, on can the

Dr. Thomas Kaplan

Richard Manager. understanding brilliant. I’d Suffice my modeling to the our pivot Project that much, question. you But rather once that once Thank the normally fielding to a part and is say of Donlin so would this there’s is decision go would Greg drill by into have Who and be we the Board, we that Question, That’s updating for data that Williams. Lucas. answer that would get Barrick the way for study. logical both you at not someone this time you sure to or a an answer as to pinch me looking give accurate avoid logic And timeline we’re for. the question, [Technical and the is Difficulty] the to that but the feasibility trying we sufficiently that wants make who’s hitter. done,

Lucas Pipes

Yeah. That’s No. No. helpful.

Dr. Thomas Kaplan

Wait minute. a a Wait minute. a minute. Wait

Lucas Pipes

ahead. Go

Dr. Thomas Kaplan

Wait a minute. Wait Actually… a minute.

Richard Williams

just No. I was to you say, going did… Tom,

Dr. Thomas Kaplan

Right.

Richard Williams

brilliant… a …

Dr. Thomas Kaplan

Williams. Richard Yes. Please.

Richard Williams

you Lucas pleasure. My know…

Dr. Thomas Kaplan

My friend.

Richard Williams

just I it Lucas, a hard it’s said, and put Yeah. said to timeline Tom perfectly.

get to going drilling this We’re done.

put all adjectives feasibility to of do covered the been gate to final work feasibility optimization updated front to or decision whatever through a survives, the and decision. have definition at key want all And next feasibility, remember, a the least stage that’s of you the in, or because for and that or We’re what we’ve mitigation all develop then document, construction, ultimate we’ve a make doesn’t. plan. analysis, construction gaps get trade-offs as a to detailed, all of doing, risks scope in you that a to have we’ll try that to going we go And sure what those, what

we’d we that Tom out your the have we’re together to as your said, defined, timeline, Tom going then on put scope table. all lined up. that says, Once pull group everything be and happy up we as so, -- find and pieces a all once have to And the to that roll scope put as

Lucas Pipes

helpful. Very

Dr. Thomas Kaplan

said. Rightly

Lucas Pipes

provide higher the production and wondered you’re you’re update appreciate I thoughts one it that. their I’ll able appreciate your industry of replenish as But question. if production to sensing again. to to urgency a that majors Tom, in pipeline. related and Really to on profile the the speak slightly ask other among development declining level I sense an this? relates or bit you seeing the It’s

Dr. Thomas Kaplan

yeah, super. Well, is I think, this

or the to that of a It I it’s jurisdictional It’s point very that. closer jurisdictional happening goes hate by, certain is also the But some gold, urgency think because sense looking simply see on copper, the already what’s about We’re week windfall if in you countries the copper you’re gold that an which talking of become to senior that investor thing to And not profits kind in right in say there. the when the governments, of of I Africa, by you But you’re at countries you really, which piper that uninvestable. in just are look going every taxes. outright panic. but happening amongst pied will in it, location terms are It’s with I location, location, and of of jurisdictions risk. not at producers movement at mantra towards is in these in realize hard see new becoming socialist became risk. Americas, way what’s

new way. gold, copper, are that jurisdictions basically for the implications copper-gold their is just collapsed in a definitely dilutive gold. will and and grade, right, field potential. been And of don’t people out a half by to is the dreams but come to be we in going it, to mining for fresh it there, companies reserves, they’re also has build in concern the what dollars from that And countries that It’s their on decade. are Those the replace You overall reserves, prism, investors to remember jeremiahs you not then in over aren’t take if to thinking going want you’re projects, now have superimpose see for be things am limits. you grade have through listening putting -- to going to other because average do that that, that if weren’t that when all you natural you previous me dollar into to see that you have is to off the cetera, you have saying, might cap And earnings replace that few to work these copper so I just investors. shown that seeing their assuming you. et not other that way and Well, countries of, doesn’t that put fresh

terms be is where want I a many really which of you or the that for want gains, places really in of That Donlin, that the not accretive project It’s in a does government being accretive keep does again, handful of you will think a sure, more than strategic just that leverage. rule everybody. to this your you mean? issues autocratic those declared and the legislature be leverage grades to it’s to in in gold, those profile. what to to open-pit everyone’s asset the in instead of fruits going and from means fruits coming jurisdiction still in capping like law practically reserves suffer matters. But one that, And a allow of jurisdictions of of when

is the world, to through a amount of state up already a we for how the United most which They size have? million there The that States what Alaska asset ends after world. quality, Nevada, place the prism, by know Barrick, Otherwise the wall. a over the the the gold ounces in will it on entire Donlin legislation. the gold Kudos gold thing it’s and the Nevada. unicorn. assets got unicorn to I that unicorn in its flagship approaching someone’s around its But stories is They’ve important they call seen is produce second understand do over Well, in industry. Donlin has be it. that you that many seen goes So largest of new terms mean, all unique. is producing on because the

enough I in O-V-E-R. completely but my It’s there, I I’ve really actually know over, talking I’ve me to these So not myself, allow to because been because own book, well you’re people I’ve those cannot am I indulge it’s places. places. my going mixed and exhort done metaphors, over,

United You want portfolio are Mexico, wake investor, other it that at in to a there manager night, where outliers. Canada, surprises. places when I up to still go I of as was be sleep that an means there, couple to I going still I I see a no to mean and I own is States, Australia. That know can I thought tell what

you’re but someone much very markets. right Other to Not investor, you the That’s my there, getting enthusiastic worst right. me. comes going about for have because that, and I just am right not for the it because Your it macro of says getting commentary. Finland, problems building the things, than along emerging and but all you you’re for are you’re wildly else rights, an thank

Lucas Pipes

It’s hear Always to great always and thoughts. great. team. appreciate the you entire I your really

of best luck. Continued

Dr. Thomas Kaplan

and very for you it. much, your of you Thank great questions appreciate really We Lucas. firm all support. Thank

Operator

from is ahead. Please Our with next question Turnbull Scotiabank. go Trevor

Trevor Turnbull

forthcoming I update. I opportunity to Thank you the about you’re to the news. thank exercise. wish certainly you that all am the providing project the and details discuss best. Yes. be have technical him Greg’s sorry report with for I will appreciate updated re-costing hear an to an going of

a couple did want if items big However, perhaps at some in comment major like operating and just of on or the I assumptions? ask fuel of for, re-costing changes questions the price there you With to any if was any costs also were high costs. the material wondering I there Donlin, reassessing the level surprises were and say, capital rate labor respect on the if to trends could

Dr. Thomas Kaplan

Richard?

Richard Williams

to Yeah. will. Do me Thanks. Tom? you I want take that,

Dr. Thomas Kaplan

that. will with Then Okay. I continue

Richard Williams

a It’s Yeah. good the Trevor. been since exercise. It XXXX XX years was Report. Technical has Yeah.

lot you and today. now And on major in there it’s as update, some with we’ve in see getting a changes, been any in the since particularly isn’t at we’re aren’t there the but this looked so new we was we’re one, XXXX, weren’t, estimate permits, now the we where which diesel more oil update opportunity instance, changed far It’s if as $XX in good material change. able we And which prices bring but have look -- working numbers, off we use we we fuel, touched months real oil much surety. these $XX good for permitting and to, but points. a then of had costs, When barrel to no on and which as just activity are

oil in And price. natural also costs to so actually the because we tied saw gas decrease a power is

I probably, And did the XX to better that past the a good costs steady slightly one, we the so years you was see don’t Labor actually and that touched can something processing price. all I gone you they’ve again, cost throughout has Trevor, is But, take has think gold And what costs, numbers energy up, things from one that’s like up surprise. on the we of gone labor think, earth and shattering. is a these nothing although throughout due our reduction. so

we projects we steeper gold when we XXXX back than of in and were the check does rising trying same building. checked doing to price when the incline one so for it’s is have a commodities And things were thing the the

you’ll report the is, and higher in costs we what commodity labor right? it costs. well, track with higher so gold saw and And price of we of other offset some so those see some the the And detailed

overall, more XX% we places. use let in pleasant this increase CPI show on what did a that we and us. capital That sure about again think, for didn’t Indexes size. the make we surprise they was equipment some major on the quote want I project indices But a some fool go totally out of to that lot

is is there overall change. QPs as good XXXX step comfortable really we some costs operating pitch, is no They within which the new we off optimized news fell the ran look were that and why when So these and with material change no at to signing pit. reported,

and I asset. So the of robustness, again this and it think highlight kind of value the supports just magnitude

Trevor Turnbull

question initial about lot. Thank the similar a Right. had No. I That you. cost. a capital helps

that one project swings between, the about had a unexpected I change a to, you of if the surprises more there was if less the So overall element mine down if large didn’t talk were you was little just the a if costs but to say, an it versus change wondering, break pipeline also curious on could there than showed just other? provided you. and number, relative or were more if just because utilities the and And I one bit again, difference the estimates any in or then initial was

Richard Williams

But a to going, good good grossly watch is area back optimization work question again, spiked a of fair That’s see to control, trying any which we’ve which and would where that -- the out No. see didn’t we Yeah. the some we question good relate and really doing. to of been news. one something also trend we was were

minuses. mining other some There had but of equipment you few but shocking equipment a did the large of pluses, some were the just large that how pieces number the equipment that bit had they mining or of And then not capacity little -- most not. You the had hadn’t. equipment, maybe doubled price

see But, substantial little few Knowing equipment. curious a into it a rise. yeah, didn’t we overall, the got So, process. a was pieces of just on you

again pretty nothing Trevor, think again end. didn’t seemed is because we front neutral bad not, all to did was the COVID-related to more in we’re I end. We to front thing. one make One see. good to do, costs line, the we want of a wanted were well We spike sure area which major another, no impact. mills QX and any that be all that XXXX or on on and equipment thing a trend to than and in flotation we autoclaves tried good

with is launching take final we knowing used advantage that comes there that and to some and just we ready feasibility opted leveled purchase actually pad at of with again, were those lower to not could we’re wanted exercise to a whether time that so we’ll have fair exercise, the a update. time this we say, that prices, be And in as where knowing we things. this piping this material But the that this into this lot areas could is

yeah, would one overall, we area that I locked just out. see did say, our eyes Trevor, So, not any

think disciplines, have trend you We I is said, seem like overall, in the about held pretty infrastructure. even to same -- good I and good that’s the the magnitudes all so, there. even, that And that see a ups the downs ground throughout all

So we’re that in pleased pretty sense.

Trevor Turnbull

Well, that’s Yeah. great.

decision kind on were there and the elements certainly much. outlying the big looking think big seem and overall numbers are both no of and there CapEx, change it out at that like at that you that Looking the OpEx didn’t comes, thank guys would study, that you a but to color when -- within make Appreciate you are look very when finding it. feasibility forward

Richard Williams

you, Thank bet. Trevor. You

Dr. Thomas Kaplan

Thank you, Trevor.

Operator

Our John with next -- question Tumazos from John Very our next apologies, Tumazos go Research. Please is ahead. Independent question

John Tumazos

X holes wishes. that so so holes Thank were or all X and immaterial to really There was other there you’re holes. average improvement were of resources, change had no well with you. drill Regards below just or meaning many that might in endowed were or the good have drill holes some material material winning mix is those confirmatory ounce released well Last you were there no some holes or there gold that’s so year, nice and because Greg, a reserves million million ounces change?

Richard Williams

Hey, Tom, I can that… address

Dr. Thomas Kaplan

Yeah.

Richard Williams

if too … like. you

Dr. Thomas Kaplan

Sure.

Richard Williams

observation. good That’s yeah. John, So,

there drill holes old spot in to change looked, and checked at variation. XXXX model all look So that the geologic QPs. whole with material new resource we we wasn’t change, did, and go these XXXX and or the the take the no did is run piercings new a this those and obviously, XXXX verification a and of major data with though, not material into, resource What

mean, the it they work. the what got handle like. that give holes that going the drilling it’s the you’re we another as finish good this we are to I small big see news don’t you all we do done think just and but population we’re and picture holes, I material, they we targeted at anything right? only last get resource, finish on stage. overall to on last right, full you’re spot said have a looks and when not checking So -- this when was again, And we a to update We’ll And those were just better year, -- to work the and

John Tumazos

the or common when lenders the in year’s do last years? likely is Were years what sequence, few holes on mining the about to it’s first years often equity project to twin be a the diligence targeting holes the for several ask of they first early investors due

Richard Williams

Right.

concepts and John, So, continuity could more extensions and targeted we’re looking and looking holes, together. piecing the for some at we

in high We it do here. down have in Can grade? tie up there between. -- the have sell does high grade a together We we and that

will the XX tracking. some what resource big to how that’s at we this whatever look years, we I’ll it, the will with pit the keep to done have first think is than say call early obviously we’re time of the do and you And designed just ounce drilled just XX pit see years, outer pit. of necessarily and the XX over XX million the do wasn’t it deposit versus been is it last in comment we drilling ones that, So more I the pit understanding if densely at pretty that it $X,XXX years, that pierce, more But areas. of track starter I the it’s that, clear

alluding that project. I that I And be you sure you for to sure used, you’ve to to. can rock pretty it, those solid that said, what due payback are XX think think because we first that But make a as it’s you’re years XX-year and want others always diligence heard so -- that’s make is and say your

John Tumazos

very you much. Thank

Operator

to Kaplan turn to closing This concludes back the Thomas over for the would question-and-answer any session. like I conference remarks.

Dr. Thomas Kaplan

you very Thank Claudia. much,

conveyed. First want far robust Greg, And not over sure too to doing he’s in well great to about of obviously your Trevor, Lucas, job talking Williams that will it. all, own thank got and with and a Ottewell things. skis also sheet Richard his balance contribution. for am Dave stepping I and John, We’ve in a making my to which your questions be wishes for for you thank I

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known they’ve together really Barrick it that Barrick. also course a accretive say has the enhanced been but many of Randgold Mark which extent. everyone than the vision seamlessly, than so joke, many, is been the to It’s to concepts. very because a modeling come XX/XX, to rib I testament What the own brought like years. we’ve a our DNA get story, Difficulty] who’s to work really, as much the setting has other. a pretty more more fact And [Technical are process. along reason extent is kind NovaGold of big America I why very that it’s in to We worked that, North dear, that and hugely And dear tone, well with friend for Barrick teams we because has their into each it’s the but

excited really see. both that the by I say fair extremely team new and are as they exciting. NovaGold think the Barrick to models it’s Gold teams, Donlin the obviously The are synthesis what

like is and that gold another of because years, a ounce early you to XX geologist, love investors X look to There’s built the project’s drill Mark be they continue me, be altogether in be a him really there. every I that the those And at only as also know big Barrick there’s the on my to but really entire will better that, package. to all-in place story. career The and on thank located you All amongst there. single can up really is allowing credit The site side. in kilometers is getting year, drill is us all tell is out even what gold the go gold credit drill team, the who’s for letter fact at on drill Mark to the and X and to bit, word our from fabulous. would were a look stalwart a [Technical having they’re lot results to Bristow, very to starts to land kilometers to been If as a that’s more I’d going rigs who investors the to are last X% wants results going years. say thing And of and the industry. this lot has site. been you of to Difficulty] best have those most in but Suffice

stocks I in global think granted, thank small, of we space take having one for can development it our investors, want not only I to Thank go-to big look and all support. their a and really the shareholders, of forward never to for We the for moment. you.

Operator

call. conference today’s concludes This

your Thank may and pleasant disconnect day. participating You a for lines. have you

NovaGold Resources (NG) 30 Jun 212021 Q2 Earnings call transcript