NOVAGOLD(NG) - 2024 Q2 - Quarterly Results

NOVAGOLD Q2 2024 Financial Results Report Overview and Key Milestones NOVAGOLD reports Q2 2024 results, highlighting progress on the Donlin Gold project and a strong financial position - NOVAGOLD ended the second quarter with a robust treasury of $113 million in cash and term deposits[1] - Key technical milestones for the Donlin Gold project include advancing metallurgical testing and resource modeling[5] - Significant community outreach included finalizing a 17th Shared Values Statement and holding subsistence committee meetings[5] President's Message The President details the company's commitment to advancing the Donlin Gold project through technical, community, and legal progress Technical Advancement and Project Development The company focuses on key technical work, including resource modeling and metallurgical testing, to de-risk the Donlin Gold project - The next critical step is updating the feasibility study to position Donlin Gold favorably for a construction decision[8] - Metallurgical pilot plant test work is underway to confirm flowsheet optimizations and is expected to be completed in 2024[6] - A third-party consultant is updating the resource model, while new field data is enhancing hydrological models[6] Community, Government, and Stakeholder Engagement NOVAGOLD and its partners maintain deep engagement with local communities, government bodies, and key stakeholders - An additional Shared Values Statement was finalized with a Y-K region community, bringing the total to 17[10] - The Crooked Creek Traditional Council traveled to Washington, D.C. to voice their support for the project[12] - Alaska's Congressional Delegation submitted a joint amicus brief supporting Donlin Gold as a vital economic project[12] Environmental and Social Initiatives The company is actively involved in environmental and social programs, focusing on salmon health, community cleanup, and education - In collaboration with local tribes, the company is planning projects to monitor and enhance salmon population health[14] - Donlin Gold continues to support the annual "Clean-Up Green-Up" program, assisting 47 communities in the Y-K region[15] - The company provided financial support for educational initiatives and suicide prevention events in local villages[16] Permitting and Legal Status Donlin Gold actively defends its permits against legal appeals while progressing with remaining state-level certifications - Preliminary design packages for the Dam Safety Certification were submitted to the ADNR on June 17, 2024[18] - In the Federal litigation, oral arguments were held on June 24, 2024, with a decision anticipated by early 2025[21] - Oral argument for the state-level appeal of the 401 Water Quality Certification is scheduled for August 30, 2024[20] Strategic Vision and Shareholder Value NOVAGOLD positions Donlin Gold as a premier, low-risk investment with significant resource size and a long-life potential - Donlin Gold is highlighted as a top development asset with approximately 39 million ounces of gold in Measured and Indicated Mineral Resources[23] - The company has maintained its financial strength without requiring additional equity issuances since 2012[23] - A key management change was announced: David Ottewell, CFO, will retire and be replaced by Peter Adamek, effective July 15, 2024[8] Financial Performance The company reported a reduced net loss of $13.7 million for Q2 2024, driven by lower project expenses and higher interest income Financial Results Analysis The net loss decreased year-over-year due to lower site activity, higher interest income, and gains on securities Financial Results (in thousands of U.S. dollars, except for per share amounts) | | Three months ended May 31, 2024 | Three months ended May 31, 2023 | Six months ended May 31, 2024 | Six months ended May 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | Net loss | (13,700) | (14,649) | (24,018) | (25,308) | | Loss per share, basic and diluted | (0.04) | (0.04) | (0.07) | (0.08) | | General and administrative expense | 7,603 | 5,535 | 13,862 | 11,142 | | Share of losses – Donlin Gold | 3,990 | 7,543 | 6,951 | 12,018 | | Balance Sheet | At May 31, 2024 | | At November 30, 2023 | | | Cash and term deposits | 112,568 | | 125,749 | | - Net loss decreased by $0.9 million in Q2 2024 and $1.3 million in the first six months of 2024 compared to prior year periods[28] - The reduced net loss was driven by lower Donlin Gold field expenses, partially offset by higher G&A costs[28] Liquidity and Capital Resources Cash equivalents increased in the first six months of 2024, as proceeds from term deposits offset project and corporate costs - Cash and term deposits stood at $112.6 million at May 31, 2024, compared to $125.7 million at November 30, 2023[27] - In the first six months of 2024, cash equivalents increased by $6.8 million, mainly due to $20 million in net proceeds from term deposits[29] - Funding requirements for Donlin Gold were substantially lower in the first half of 2024 compared to the prior year[29] 2024 Outlook NOVAGOLD anticipates total expenditures of approximately $31.2 million for fiscal year 2024 to advance the Donlin Gold project 2024 Anticipated Expenditures | Category | Amount (approx.) | | :--- | :--- | | Donlin Gold Project Funding | $14,250,000 | | Corporate G&A Costs | $16,950,000 | | Total Expenditures | $31,200,000 | - Primary goals for 2024 include advancing Donlin Gold, maintaining a strong reputation, and managing the treasury effectively[31] Corporate Information and Disclosures This section provides company details, investor event information, and important legal disclaimers regarding future outlook About NOVAGOLD NOVAGOLD is a well-financed company focused on developing its flagship Donlin Gold project in a 50/50 partnership with Barrick - NOVAGOLD is solely focused on the Donlin Gold project in Alaska, held in an equal partnership with Barrick[34] - The project contains approximately 39 million ounces of gold in Measured and Indicated Mineral Resources[34] - Donlin Gold is expected to produce an average of approximately one million ounces of gold per year over a 27-year mine life[34] Conference Call & Webcast Details NOVAGOLD will host a conference call on June 27, 2024, to discuss Q2 results and has scheduled its Q3 results release - A conference call and webcast to discuss Q2 results is scheduled for June 27, 2024, at 8:00 am PT[32] - Q3 2024 results will be released after market close on Wednesday, October 2, 2024[32] Cautionary Note Regarding Forward-Looking Statements This section warns investors that the release contains forward-looking statements subject to significant risks and uncertainties - The release contains forward-looking statements concerning judicial decisions, the 2024 outlook, and project development[36] - Important factors that could cause actual results to differ materially include permitting, financing, and metal price fluctuations[36] - Investors are directed to the "Risk Factors" sections of NOVAGOLD's recent SEC filings for a comprehensive list of risks[36]