NOVAGOLD(NG) - 2024 Q3 - Quarterly Results

Q3 2024 Highlights This section summarizes key technical, community, and corporate advancements for Donlin Gold in Q3 2024, highlighting project progress and financial stability Donlin Gold Project Progress Details the key technical advancements for the Donlin Gold project in Q3 2024, including progress on metallurgical testing, dam safety certifications, and resource modeling, with most activities nearing completion by year-end - Metallurgical test work (pilot plant) to confirm flowsheet optimizations is advancing, with completion expected by year-end[2] - The majority of the Dam Safety Certification preliminary design packages were submitted to the Alaska Department of Natural Resources (ADNR) on June 17, 2024, with final documents expected by year-end[2] - Updated resource modeling by the Donlin Gold team and a third-party consultant is nearing completion[2] Community and Government Engagement Highlights Donlin Gold's active engagement with local communities and stakeholders, including project site tours for residents and a public Open House in Anchorage to ensure transparency and strengthen its social license - Hosted residents from Crooked Creek and Georgetown on a tour of the Donlin Gold project site[3] - Participated in a public Open House in Anchorage to provide information and engage in transparent discussions about the project[3] - Sponsored the RurAL CAP Elder Mentor Program, fostering connections between youth and Elders in Alaska[4] Corporate Updates Covers significant corporate developments, including the appointment of a new CFO and the company's strong financial standing with a substantial cash and term deposit balance - Appointed Peter Adamek, a financial executive with over 20 years of experience, as the new Vice President and Chief Financial Officer[4][8] - Maintains a strong financial position with a treasury of $105.6 million in cash and term deposits as of August 31, 2024[4][7] President's Message The President's message outlines strategic project advancements, ongoing stakeholder engagement, permitting updates, and the compelling investment rationale for the Donlin Gold project Project Development and Strategy The President emphasizes the advancement of key project activities for Donlin Gold, such as metallurgical testing and resource modeling, which are crucial for updating technical work and cost estimates. These efforts, reviewed with partner Barrick, guide the 2025 strategy with a focus on financial prudence and engineering excellence - Key activities including metallurgical test work and updated resource modeling are nearing completion and expected by year-end[6] - Dam Safety Certification preliminary design packages were submitted to ADNR, with final documents due by year-end and comments anticipated in 2025[6] - A workshop was held with partner Barrick in Alaska to review progress and plan for 2025 activities, guiding the project's strategy[7] Stakeholder and Community Initiatives This section details the company's deep and ongoing engagement with local communities in the Yukon-Kuskokwim (Y-K) region, in partnership with Native Corporations Calista and TKC. Initiatives include community tours, public open houses, environmental programs like salmon monitoring and waste backhauling, and educational support to reinforce the project's social license - Enduring partnerships with Calista and TKC are crucial for advancing the project's development and permitting efforts[9] - Launched a salmon smolt monitoring program on the George River and continued the 'In It for The Long Haul' backhaul program, recycling approximately 140,000 pounds of hazardous waste from Y-K villages this year[11] - Supported various youth and educational programs, including the Summer Youth Employment program, the RurAL CAP Elder Mentor Program, The Dictionary Project, and the Alaska School Activities Association[12][13] Permitting and Legal Updates NOVAGOLD is actively defending its existing federal and state permits against legal challenges, with several court decisions and oral arguments pending. The company is also focused on securing the remaining state-level permits, highlighting Alaska as a stable and reliable jurisdiction for investment despite the complex regulatory process - State Litigation: Oral arguments were held for the 401 Water Quality Certification appeal, with a decision expected by 2025. Appeals concerning water rights permits and the state pipeline Right-of-Way (ROW) are scheduled for oral arguments on November 12, 2024[14] - Federal Litigation: A court decision on September 30, 2024, upheld two of three issues raised but required supplemental briefing on the analysis of a theoretical tailings storage facility release[15] Investment Rationale for Donlin Gold The company positions the Donlin Gold project as a rare, high-quality "Tier 1 Asset" in a secure jurisdiction (Alaska). It highlights the project's significant resource size, long mine life, and low-cost potential, making it a compelling investment, especially in a volatile market with high gold prices - Donlin Gold is described as a compelling "Tier 1 Asset" located in Alaska, a well-established and secure mining destination[16][17] - The project boasts approximately 39 million ounces of gold in Measured and Indicated Mineral Resources at a grade of 2.24 grams per tonne[16][20] - It has a projected mine life of 27 years with expected average annual gold production exceeding one million ounces, alongside significant exploration upside[16] Financial Performance This section details NOVAGOLD's financial results for Q3 2024, including net loss, liquidity, and capital resources, along with the company's outlook for the remainder of 2024 Financial Results The company reported a net loss of $10.7 million for Q3 2024, a slight decrease from the $11.1 million loss in Q3 2023. The change was driven by lower share-based compensation and reduced Donlin Gold field expenses, partially offset by higher G&A costs Financial Summary (in thousands USD) | Metric | Three months ended Aug 31, 2024 | Three months ended Aug 31, 2023 | | :--- | :--- | :--- | | Loss from operations | (7,934) | (9,221) | | Net loss | (10,743) | (11,074) | | Net Loss per share | (0.03) | (0.03) | - The decrease in net loss for Q3 2024 compared to the prior year was primarily due to lower stock-based compensation and reduced field expenses at Donlin Gold[24] - General and administrative expenses increased, mainly due to higher professional fees for project evaluation and increased employee compensation[24] Liquidity and Capital Resources As of August 31, 2024, NOVAGOLD held $105.6 million in cash and term deposits. Cash decreased during the quarter primarily due to funding for the Donlin Gold project and corporate G&A costs, partially offset by interest income Liquidity and Capital Resources (in thousands USD) | Metric | August 31, 2024 | November 30, 2023 | | :--- | :--- | :--- | | Cash and term deposits | 105,572 | 125,749 | | Total assets | 114,731 | 133,290 | | Total liabilities | 152,540 | 141,513 | - In Q3 2024, cash and equivalents decreased by approximately $7.0 million, primarily to fund Donlin Gold activities and corporate general and administrative costs[25] 2024 Outlook The company maintains its 2024 cash expenditure forecast at approximately $31.2 million. Key goals include advancing the Donlin Gold project towards a construction decision, maintaining stakeholder support, and preserving a strong balance sheet - Anticipated cash expenditures for fiscal year 2024 remain approximately $31.2 million[26] - The 2024 budget includes $14.25 million for Donlin Gold project funding and $16.95 million for corporate general and administrative costs[26] - Primary goals for 2024 are to advance Donlin Gold toward a construction decision, maintain stakeholder support, promote safety and sustainability, and preserve a healthy balance sheet[26] Corporate Information This section provides an overview of NOVAGOLD's corporate focus on the Donlin Gold project and details for the upcoming Q3 2024 results conference call About NOVAGOLD NOVAGOLD is a precious metals company focused solely on developing the Donlin Gold project in Alaska, a 50/50 partnership with Barrick. The project is positioned to be one of the world's largest gold mines, with significant resources and a long projected mine life - NOVAGOLD is a well-financed company solely focused on the development of its flagship Donlin Gold project in Alaska[28] - The Donlin Gold project is an equal partnership with Barrick and is positioned to be one of the world's largest gold mines[28] - The project has approximately 39 million ounces of gold in Measured and Indicated Mineral Resources and is expected to produce an average of one million ounces of gold over a 27-year mine life[28] Conference Call Information Provides details for the conference call and webcast scheduled for October 3, 2024, to discuss the third-quarter results, including access information for participants - A conference call and webcast to discuss Q3 2024 results will take place on October 3, 2024, at 8:00 am PT (11:00 am ET)[27]