Novagold Resources Inc.

Thank you for standing by. This is the conference operator. Welcome to the NOAA Gold 2023 First 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. 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 and zero. 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 and zero. I would now like to turn the conference over to Melanie Hennessy. Vice President, Corporate Communications. Please go ahead.

Thank you, Shia. Good morning, everyone. We are pleased that you've joined us for Novogold's 2023 first quarter financial results and also for an update on the Donald Gold Project. On today's call, we have Dr. Thomas Catlin, Novogold's Chairman, Greg Lang, Novogold's President and CEO, and David Otterwell, Novogold's Vice President and CFO. At the end of the webcast, we will take questions by phone and by email. Additionally, we will respond to other questions received subsequent to the call by email. I would like to remind our webcasts and call participants that as stated on slide three, 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 CEDAR filings and forward-looking disclaimers included in this presentation. I now have the pleasure of turning the presentation over to our president and CEO, Greg Lang, right?

Thank you, Melanie, and good morning, everyone. All of us at Novogold take great pride in the fact that we have been laser-focused and very successful on executing the strategy set forth by our chairman and myself over a decade ago, namely to unlock Novogold's high-quality assets for our shareholders and dedicate our energy to creating the maximum leverage from a pure gold play on the unique endowment that is the Donnelly Gold Project. This has been a foundation of our investment thesis. As shown on slide five, we have been steadily advancing Donnelly Gold up the value chain in various areas over the past decade. These areas include the completion of the 43-101 technical report on the update to the second feasibility study, the receipt of a joint record of decision from the Army Corps of Engineers and the Bureau of Land Management, as well as other major federal permits. And most recently, we completed the largest drill program at Donovan. in over 15 years. We believe that the Diamond Gold Project is truly best in class in its combination of attributes, which are shown on slide six. Possessing the unique combination of industry-leading size, grade, and excellent exploration potential, which would move the needle in our gold industry and all of this in a safe and time-tested jurisdiction. Alaska is a great location to develop, build, and operate a mine for many generations to come. In my view, it really is the ultimate company maker. As currently envisioned, Donlon would average over a million ounces per year of production for 27 years. When looking at the other developer groups, as shown on slide seven, Donlon is by far and away the largest in gold production, continuing to decline for most of the top producers. It is clear the industry needs projects with scale, grade, and longevity to sustain themselves. As shown on slide eight, with twice the industry average grade for an open kit, once in production, Donlan would be one of the lowest cost producers in the gold industry. Turning to slide nine, The leverage to a higher gold price is exceptional at Donovan. The after-tax NPV at today's gold price is over $7 billion and a 5% discount rate for $22 billion undiscounted. The great exploration potential is another remarkable attribute. Backman Lewis deposits, as shown on slide 10, occupy less than half of an 8-kilometer mineralized gold bill, which itself is located on less than 5% of Donovan's land position. A testament to the excellent exploration potential were the results from last year's program. As shown on slide 11, the top 20 intersects returned some of the best assay results seen to date at Donlin and among the best reported in the entire industry last year. For example, well 2068 in the divide grid returned 42 meters and over 30 grams, including a sub-interval of 23 meters at 54 grams. As highlighted on slide 11, credible upside exists to increase houses and extend the mine life. Location is truly key. Having great leverage in a place where you can keep the fruits of your leverage is worth the investment in time and in resources. On the map included on slide 12, We feature some of the top three gold-producing operations in the world and the five largest gold development projects. As private landowners, both Chalista and TKC are dedicated to developing foundling gold in a way that remains consistent with the elders' vision of responsible development while creating jobs and economic benefits for the surrounding communities, as well as protecting the local culture. A few of the quotes are provided on slide 13 from the leaders of both Alaska Native corporations. Their knowledge, guidance, and engagement are extremely valuable in ensuring responsible and sustainable economic development throughout all phases of the Diamond Gold Prize. I will now touch on some of the milestones that were achieved and the key activities of the first quarter. The Downwind Gold 2023 Field Program commenced early in the year to complete the necessary field work and geotechnical drilling required for the Alaska Dam Safety Certificates applications. Additional work included on-site hydrological drilling to further define the flow of groundwater in the areas that the plan dominant pit and surrounding infrastructure to support mine planning and design. Founding Gold prioritizes local hiring and invests in supporting the communities throughout the Waikato region. During the first quarter of our 2023 field program, We had a total workforce of 44 direct hiring employees, most of which are from the project region. This is a continuation of the success of Donlan's local hiring program, which was initiated very early on during the exploration phase. Our focus off-site is four key areas, as shown on slide 16. First, mine optimization. We are finalizing the updated geologic and resource models with the drill results from the last two years, and we are incorporating those into the key project assumptions, inputs, and design components for optimization. Ultimately, this supports the decision to proceed with an updated feasibility study. Community engagement is also a very active area of ours. working alongside with our Alaska Native Corporation partners. Permanently, we continue to advance our permits through the regulatory process and supporting the state in maintaining the existing permits. We're also very active with bipartisan outreach to the Biden administration, members of the U.S. Congress, and the state administration up in Alaska. Assisting and partnering with local communities in the region has been a constant focus at Donnelly. Working in concert with Chalista and TKC to provide critical support. As shown on slide 17, Donnelly was premier sponsor of the Iron Dog Race and is part of the Alaska Safe Riders program. Also, in collaboration with Covenant House and Bethel Community Services, Donlin is developing an action plan to help address the chronic and ongoing youth and other issues, just to name a few. In partnership with the Alaska Native Tribal Health Consortium, Donlin is advancing efforts to improve the overall health and safety standards of water and sewer services in the middle of Kuskokwim villages. In collaboration with TKC and the village of Crooked Creek, Donovan provided financial support for the construction and maintenance of ice roads that allow winter travel between remote communities. On average, a total of 300 miles of ice road is constructed and maintained thanks to this program. Advancing educational opportunities in Alaska is another priority for the company. We recently awarded the first Molden Gold Scholarship at the University of Alaska to an undergraduate student studying geological engineering. We also support the Alaska Excel Program, a nonprofit providing educational support for rural youth across the region. In March of this year, we released our 2022 Annual Report. which features a special conversation between Dr. Kaplan and Daniela Cambone, editor-at-large and host of the Daniela Cambone Show on Stansberry Research, as shown on slide 18. Their discussion covers a broad range of topics, including geopolitics, history, markets, and opportunities in the gold space, and central banks are the largest buyers of gold, both presently and historically. and the corresponding upside for the premier development stimulus. The interview is recorded at the New York Stock Exchange, and a full transcript is available in our annual report. Those interested in watching the video can access the interview on our website, Novogold.com. With that, I will now turn the call over to our CFO, David Otterwell. Dave?

Thank you, Greg. Slide 20 highlights our first quarter operating performance. We reported a net loss of $10.7 million in the quarter, a $0.7 million increase due to increased interest expense on the promissory note, higher Donlan permitting costs, higher corporate legal expenses, partially offset by increased interest income, and income from the 2021 sale of our interest in the San Roque Mineral Property. First quarter cash flows are highlighted on slide 21. Cash decreased by $9.7 million, primarily to fund our share of Donlon and for corporate administrative expenses. The decrease in cash used in the first quarter of 2023 compared to 2022 was due to the timing of corporate liability insurance payments in 2022, withholding tax paid on share-based compensation in 2022, and proceeds received in 2023 for the sale of San Roque. No shares were issued in the first quarter of 2023 for the PSUs granted in December 2019, as the company's share performance over the three-year period was below the minimum performance criteria relative to the Global Gold Index. On slide 22, we note our strong treasuries. Our financial position includes cash of $54 million, term deposits of $62 million, and $25 million due from Newmont in July 2023. For the full year, we continue to expect to spend $31 million, including $17 million at Donlon, $13 million for corporate G&A, and $1 million for working capital. I'll now turn the presentation back over to Greg. Greg?

Thank you, Dave. Turning to slide 23, the focus of our activities this year will be one, updating the geologic and resource models, continuing field work, collecting geotechnical and hydrological information to support the dam safety certifications, reviewing key project assumptions and inputs and design components for optimization in mine engineering, metallurgy, and infrastructure. We will continue to advance current permits through regulatory process and support the state in defending the existing permits. Lastly, we will continue to engage, maintain, and grow support for the project in the region. Noble Gold has been blessed with long-term and supportive shareholders, comprising many of the most respected names in the investment world, whose presence and counsel have been invaluable. Some of these are listed on slide 24. We are grateful for their decision to invest with the company and for their continued interest and engagement. We affirm to all of them and as stewards of the company, we continue to be focused on delivering on our strategy and enhancing the value of the Diamond Gold Project, increasing both shareholder and stakeholder wealth in a safe and socially responsible manner. As we position the company to enjoy the fruits of this unique leverage on what we believe is one of the best positioned goal development stories in the marketplace. I look forward to continuing to deliver on our promises and keeping an open line of communication between us as we reach even more milestones in 2023. I will now turn the call over to the operator and open it up for questions.

Thank you. We will now begin the question and answer session. To join the question queue, you may press star, then one 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. To withdraw your question, please press star, then two. We will pause a moment as the callers join the queue. The first question comes from Mike Parkin from National Bank. Please go ahead.

Hi, guys. Thanks for taking my questions. It might be a bit early to speak upon this, but I'm just wondering what some of the higher-level trade-off studies might be considering as you move forward in 2023, just looking for some sense of some of the bigger kind of delta items that you're looking at for the project? Thank you.

All right. Mike, I'll take that question. Thank you for your interest, Mike. The trade-off studies have been primarily focused on infrastructure, but we've also focused on the gas pipeline and just other of the big key cash components of the capital. But in addition to the infrastructure, we've done some fine-tuning work, looking at options on flotation and a lot of validation work on the flow sheet and other parameters of the project. But we're also looking at optimizing the mining based on the great drill results we've had this year, specifically what opportunities are out there to enhance the grade by more selective, smaller mining drills. Clearly, we've demonstrated that the high grades really do exist at the down the road level. And we look forward to updating everybody on the studies as they reach their conclusion.

Great. Thanks, Greg, for that.

I have some questions that I've committed by email. The first one will be for you, Greg. When would you expect the investment decision will be made on the Don Cole project?

Well, let me give you the timeline on the studies. You know, we're wrapping up the various trade-off studies now, as well as preparing the new geologic model. You know, all of these studies and the new model will be presented to the Donovan Grove Board or the owners in the next couple of months. And I think that's, we'll be in a position then to go a little bit more specifically on the past weather.

Great, thank you. The other question was, what's the all-in cost per ounce for the Don LaValle project? That one is directed toward you.

All right. Well, the question was on the all-in cost. And for our most recent refresh of the 43 mile run, life of mine, it would average about $630 an ounce. We would expect them to be a little bit more more competitive and lower in the first few years of the mine line to a higher grade that would be mined early. But very competitive costs would be among the lowest in the industry.

Thank you. Before we proceed to the final question, we have Lucas Pikes on the line that is wanting to ask a question.

Operator? The next question comes from Lucas Pipes from B. Reilly Securities. Please go ahead.

Thank you very much, Operator. Thank you, Melanie. Good morning, everyone. I started to ask my question, and Melanie, I appreciate you opening up the queue there. So I I wanted to ask about reserves and resources and the context of the updated feasibility study. Would you expect changes to those measures, and then would you anticipate any changes in the cutoff grade? Thank you very much for your perspective, Greg.

All right. Let me – I'll break that into a couple of pieces. The drilling has really delivered some very nice grades. I think, if anything, they will slightly enhance the grade of the overall Donovan Gold deposit. Most of this drilling has really been our partners' due diligence. Donovan has been the company to Nova Gold for many years. We know the asset very intimately. And the drilling and trade-off studies that we've been conducting, they've really been part of our partners' due diligence. And I think while the trade-off studies and the drilling have been insightful, I would say it's more validated than changed our view of the project. And I think certainly from a Novavolt point of view, we've been a supportive partner. We've answered their questions. geologic and due diligence curiosities. I think certainly from my perspective, a next logical step for the owners is to proceed with the new feasibility standard. And that would hopefully be getting underway later this year.

Thank you very much, Greg. And to you and to team, continued best of luck.

Thank you, Lucas.

So we have two more questions from the line. The first is for Greg. You mentioned outreach to government in your comments. Do you detect any changes to the attitude of Washington to the resource sector as the world has changed since Biden became president?

Well, you know, I think I'll speak, I'll answer that. From a Donovan perspective, Donovan has always had maintain and nurture bipartisan support both in the state of Alaska and in our nation's capital. Senators Murkowski and Sullivan, U.S. senators, are very very staunch advocates for the project. And while the Biden administration has not always been supportive of mining projects, they certainly have been supportive of diamond. And I think certainly the Alaska delegation is very supportive. And the Biden administration recently approved the major natural resource development on the North Slope called the Pueblo Project. So I think they're They're cautious, but I think they support responsible line development and responsible resource development. So I would say it has really had no impact on our activities, the change in administration.

Great, thank you. The final question was for Dr. Kathleen. What is your view on the direction of the gold price over the next 12 to 24 months?

Hello, everyone. I hope that you can see me and hear me. Melanie, can I assume that everyone can?

You can.

Okay, great. Well, you know, I think it's fair to say that... ...long-standing gold bull for over 20 years... I've seen gold go from $250 an ounce to $1,900 an ounce in what I called Wave 1. We saw, for want of a better word, Wave 2 as a correction that took gold from $1,900 back to $1,100. And now we're seeing Wave 3 which i believe is going to be a long way i'm not saying that we're not going to have knuckle whitening corrections along the way that's the nature of the market but i do believe that we're headed for a trajectory that will be marked by two aspects first a multiplication of the gold price second a long, long duration. In other words, wave one in gold for 12 years took gold to higher closes every year, regardless of the circumstances that we normally think are so determinative for gold. There were times of interest rate fears, dollar fears, commodities fears, geopolitical stories, regardless of which way you were leaning in terms of the macros. Gold was up every year, year on year for 12 years. That's a bull market. If you see a stock go from $2.50 to $19 and it corrects down to $11, you're not really shocked. But both of those waves were characterized by more than a decade in the durations. The next wave in gold, maybe we're seeing it. Maybe we need one more head fake. I don't know. But the next wave in gold, I think, takes it to my long-term target of $3,000 to $5,000. And I say long-term because I said that when gold was at $250. The truth is that if gold were to go much higher, I would not be at all surprised. One thing is very clear to me, and this pertains to the investment thesis for Novogold. Gold is going to go up for the next 10 to 20 years. That's what the charts are telling us, and the charts for a historian are like looking at human brainwaves. You don't have to be a technician. I'm a fundamentalist, obviously, by definition. But being a historian, it's all about cycles, reversals, and the way that markets will carry on from the depths of despair to the heights of irrational exuberance. We could see gold with five digits easily. But in order to do that, we still have to get through 3,000 to 5,000. So I'll update my estimates when we get there. But the point that I would want to mention to our shareholders is as follows. I came into this story the beginning, the first week in January, actually December 31st, 2008, when Electrum effectively took control as the dominant shareholder of Novigold. Novogold had been a company that had gone from 50 cents a share to $20, and we had not participated in it, nor did we participate in shorting the stock. It's not something that we do when it went from 20 back to a buck, 50 cents actually at one point. The asset or the company had multiple issues. class action lawsuits, environmental issues on assets not relating to Donlon. It had several different assets, so there was a, as it were, diversified aspect to the story. The management was discredited. There was no following. The balance sheet was terrible. Institutions couldn't touch it. Electrum was able to do that because we're a family business, in essence. It's our family, plus several large Arab sovereign wealth funds and employee capital. And so we could catch the falling knife. And we turned that story around. We dealt with the environmental issues with the EPA. By selling off a project, we spun off Galore to Newmont, realizing great value for the shareholders, making Novigold a pure play on what we call the new Carlin or the new Nevada. We settled the class action lawsuits. We changed the entire management team, culminating in being able to get the president of Barrick North America, who knew the asset better than anyone, anyone else, because he'd been on the other side of the table when Barak made a failed hostile takeover attempt. We brought in who had built the Pueblo Viejo mine, the largest investment ever made by Barak, and something which Barak talks about even expanding now in the Dominican Republic. And the stock went back to $15.00. within the space of a couple of years. Obviously, the last decade has been very, very tough for the gold mining shares. We haven't been immune to that. We're not unusual in that respect. The ratio of gold to gold mining equities is pretty much as low as it's ever been. So what I would say is this. several things. Number one, we're in a bull market in gold. Number two, it's going to last for a very long time, well over a decade. Number three, we will see a revaluation of gold assets. Number four, I've been in this story for 14 years, and contrary to suffering from any form of deal fatigue, I'm more excited about Donlon than ever before. And I'd like to explain why, because it ties into a bow some of the other four aspects which I just mentioned. We're in a very, very different world. My friends, shareholders, my colleagues, those who follow Novigold, let me be very, very blunt. the era of the frontier mentality, the era where geology trumps geopolitics, is over. Over. The assets that will achieve the premium valuations, which will be valued like they were before the frontier spirits took hold when Newmont went to Yonacocha and the go-where-the-gold-is mentality became prevalent. At that time, People forget U.S. assets were valued using a 0% discount rate because they were the height of political safety. They were arbitraged with the less politically safe jurisdictions, Canada, Australia, and South Africa. The world is very, very different now. I happen to believe that in almost everywhere other than in North America, Australia, New you know, in a few jurisdictions, the gold mines will be nationalized. Gold is money. You don't have to be a gold bug to believe that. It's money because the central banks say it's money. And they are the ultimate insider traders. The fact that central banks no longer sell gold, but are massive net buyers. And I'm talking smart money. the Chinese, Singapore, not to mention other countries that fear being part of the US dollar system only, and they've seen that that has its own hazards. The era when people could go all over the world and think that they're going to mine gold and not have a gun put to their head to change those agreements, They're over. I made my bones in Bolivia. I made my bones in Zimbabwe, South Africa. I sold Kibale to Mark Bristow. I know what it's like operating in these areas. And I admire those who still do it. But there's no way that one can go to sleep at night feeling comfortable when you wake up in the morning. You're going to own the same thing that you owned the night before. Gold is money, gold will be nationalized, and jurisdiction will be everything. So that brings us back to Donlin. Let's understand what Donlin is. Let's understand why it's the best buy in the gold space. Let's understand why when people really cotton on to the fact that gold has embarked upon another long wave, they're going to be asking their brokers, hey, can you give me a company which has an excellent management team and a fantastic asset and it's located in a part of the world where I would be willing to take a vacation? There aren't that many places left. There's Nevada. There's Alaska. There's Australia. There are a few other places. You might want to go to Finland. But the reality is that the rule of law is going to be sacrosanct. Institutional investors are going to gravitate towards those very few go-to stocks which are in places where the rule of law is not a novelty and where they don't eat you, literally or figuratively. By that standard, in addition to the fact that in terms of the size, the grades, the mine life, the exploration potential, the low operating costs which come from higher grade. The safety of Alaska is determinative. If you believe and you're a bull in gold, you want to be in safe places. If you want octane in your portfolio, you want to have a development stage story. We believe we are the go-to stock in that space. We believe that we are on the cusp of being able to go to the next level. We've got a project which has got all the right attributes. We've positioned it as a pure play on a district that is a gift that keeps on giving. Those exploration results were amongst the very best in the entire gold industry. I don't believe that there's any major mining company in the world that wouldn't want to own them. And in fact, I'm pretty sure that in the gold space, everyone understands that it is the best in breed project. We will be advancing this up the value chain, but there's something that you also have to remember. The real money is made in this space, and I've now been doing it for 30 years, by the quality of the asset that you own. We will one day be in production. There's no question about that. This is going to be built. But that doesn't mean that we can't also be the highest rated stock in the space. Every month that goes by, more and more countries are asking the companies that are invested there to give more money, to rework their sovereign agreements. The jurisdictional aspect combined with a bull market in gold means that for us as investors, Donlon is truly the holy grail. I have no doubt that we can see a 10x on this stock as every day, every week, the story gets better and better and better. Partly because we're moving the project forward and partly because, as I started by saying, we live in an entirely different world and it's all about being able to have the greatest leverage to gold in a jurisdiction that will allow you to keep the fruits of the leverage. If we can't combine those two attributes, You're dead man walking. If you can combine those attributes, you're going to make a killing in the market. And for me, if I didn't think that that was the case with Nova Gold and Donlon, I'd put it in play and we'd sell it to pivot to something better. But I genuinely don't believe that there is anything better out there in the space. Thank you.

Thank you.

Thank you, Tom. We have a few more questions that have come on via the webcast. And so I will ask, the first one is directed to Greg. What are the goals of the next feasibility study? And will there be another future feasibility study before breaking ground?

I think the goals of the feasibility study are You're pretty intuitive. We're going to update our geologic understanding of the ore body, update the current trade-off studies we're doing, and use that knowledge to define the most optimal project to take forward to a new feasibility study. But yes, I think the question on whether will there be a new feasibility study, absolutely. The existing study is... is stale in our thinking on the project, primarily building it in stages, is crystallizing. And all of the learnings of the last couple years in the drilling will be incorporated into the new study to deliver the most sensible project for the shareholders.

Great, thank you. And the final question, and also came via the webcast, is given our current cash burn rate, Do you have sufficient funds to last for the next 24 months?

Absolutely. The feasibility work actually will be less dollars to the owners than the drilling. Drilling is a fairly costly activity. Our budget last year at Diamond was the highest in many years, and that was... $60 million in total for 32 each apartment. Going forward, our budget this year is less than that, but when we embark on the new feasibility study, we'll of course update the budget. But in total, the feasibility study in engineering would be less than the burn rate we had on our drilling programs the last two years. So yes, clearly we've got those burn rates. We have sufficient cash to see us through. of the new feasibility study onto a construction decision. So no need to raise equity until then. All right.

Thank you, Greg. That wraps up the Q&A session. Back to you.

All right. Well, I want to thank you for taking the time to get an update on NovaCoal. Stay safe.

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

Thank you, everybody, for taking the time to join our call this morning. We look forward to updating you in the coming months as our work progresses.

Thank you. Thank you. This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.