Novagold Resources Inc.

Thank you for standing by. This is the conference operator. Welcome to the NOVA Code 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 one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then 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, then zero. I would now like to turn the conference over to Melanie Hennessey, Vice President, Corporate Communications. Please go ahead.

Good morning, everyone. We are pleased that you have joined us for Novogold's 2025 first quarter webcast and conference call and for an update on the Donlon Gold project. On today's call, we have Novogold's president and CEO, Greg Wang, and Peter Adamak, Novogold'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. I would like to remind you, as stated on slide three, any statements made today may contain forward-looking information, such as projections and goals, which are likely to involve risk, detailed in our various EDGAR and CDAR filings, and forward-looking disclaimers included in this presentation. I will now turn the presentation over to our President and CEO, Greg Lang. Greg?

Thank you, Melanie. Nova Gold is solely focused on the Donlin asset up in Alaska. Some of the key attributes that the Donlin project has, 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. It's 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 along strike and at depth. We're up in Alaska, a world-leading mining jurisdiction with a 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 permits are in hand and we're wrapping up the state permits. 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 Donovan project. and we enjoy strong shareholder support from our institutional investors. Looking at slide six, Donilon will average over a million ounces a year of production throughout its life. 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 Donilon will continue to increase. At two and a quarter grams, the mine grade at Donilon is better than twice the industry average. Its high grade and longevity well position it to thrive through any gold cycle imaginable. The current slide depicts the exploration potential at Donlon. The 40 million ounce resource is contained in the ACMA and Lewis mining pits. That area represents only three kilometers of an eight kilometer system. and we've got gold-bearing drill holes all up and down trend. When the time is 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. It 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. 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 Donland Gold's potential. 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. 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 advanced. 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. NOVA Gold has made significant strides in environmental stewardship and good governance. We will be shortly publishing our new sustainability report. Safety has been a top priority at Donlin, and the project has achieved a record of no lost time accidents in well over a decade. We're very proud of our accomplishments in this area. Nova Gold has a very experienced management team. All of us come from major mining corporations and have the expertise to take Donlin forward. We also enjoy strong institutional shareholders 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. These are unprecedented times when it comes to gold price. It's hitting new records every week. Donlon Gold brings exceptional leverage in a jurisdiction where you can keep it. At an undiscounted rate, the current spot price yields over $40 billion. This underscores the very significant economic potential at Donlon. Turning to the first quarter highlights, the Camp Adonan 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. Nova Gold and Donlin staff have traveled to Juneau to meet with members of Alaska's congressional delegation to share information about Donlin and reinforce the project's importance to Alaska and the YK region. We also presented in Juneau to the Alaska House of Representatives Energy Committee 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. to support local community events, such as the Don and 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 package that was recently submitted. The state water permits have been extended. 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 agencies. 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. On slide 21, cash and term deposits decreased by 8.2 million with corporate and administrative costs and our share of Donlon 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. 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. Donalyn Gold expenses in the first quarter of 2025 were below the quarterly run rate implied by our 2025 guidance as Donalyn Gold site activities related to this year's field program only commenced late in the quarter. We expect Donalyn 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 Donlin and $16 million for corporate G&A. And with that, I'll now turn the presentation back over to Greg.

Thank you, Peter. The Don 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. NOVA 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, Nova Gold is well positioned to fund our activities for the coming years. The path for Donlin is clear. We've got a lot of patience, we've got great partnerships, and an unrelenting focus on the long-term value of Donlin. To recap my presentation, Donlin 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. 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. And finally, we appreciate the longstanding support of our shareholders. We will now open the call 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're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. The first question comes from Nick Giles with D. Riley. 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. 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 tailing storage facility? And how strong is their position, if we can call it that way? Thank you.

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 issue that 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. So the argument before the courts right now is just to define that study. And both sides will file their briefs later this month, and then we will wait for a ruling. It's not an issue that I'm overly concerned by. The judge's ruling was very narrow in the work they wanted the court to do. And so 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. 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.

Great to hear. Thank you. 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 work control if you were mining. So we're using the data from this drilling to really fine tune, you know, bench heights, mining widths, and so on. So it's really more of a fine tuning exercise. The second part of the drill, and that's what we're drilling now. The second part of the program is, you know, there's areas in and around the 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 guiding everybody as our results come in.

I appreciate the call, Greg, and the team. Continue, best of luck, and turn it over for now. Thank you.

Thanks, Nick.

The next question comes from Andy Skopik, a private investor. Please go ahead.

Good morning. A 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 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 Donlon, 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 will have more data on which to make a decision on the feasibility study.

Okay. Question for Peter. Given the budget that you put forward for this current year, what is your projected use of cash?

Thank you, Andy, for the question. You know, our budget was $37.5 million split between 16 for Nova Gold G&A, cash G&A, if you will, and the remainder is 21.5 for Donlan. 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.

Okay. Come back to you, Greg, for one more. Sure. 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 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, um, to what extent the development of this project is the pace is going to start to pick up.

Well, you know, you know, as I mentioned in my remarks, we're working with our partner to complete this drill program. And, uh, 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.

All right, thank you very much.

We have a few questions coming in from the line. The first is, can you comment on the resource and how much of it is refractory?

Well, the diamond ore body is essentially all refractory. There's some oxide near surface, but that's relatively insignificant. You know, the flow sheet at Donlin 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. And, you know, 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.

Great. 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?

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 have ruled in our favor every step of the way, and we expect that will continue.

The next question comes from Robbie Nizami with National Bank Financial. Please go ahead.

Good morning, everyone. Thanks for taking the call. So, 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 around this project, whether that comes to permitting or moving forward on the feasibility?

Thank you. Well, I think, I'm not sure I fully understand your question.

Well, first off, thank you for joining us. You know, we are, you know, 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 Donlon looks just, you know, like a very compelling investment. I think we're going to take this one step at a time, finish the drill program and fine tune our mining methods and that will then position the owners in a place to make a decision on the next steps.

This concludes the question and answer session. 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 Donilon this year. Thank you.

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