Earnings Call: Q2 2021

Jun 30, 2021

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 You may signal an operator by pressing star and 0. I would now like to turn the conference over to Melanie Hennessy, Vice President, Corporate Communications. Please go ahead. Thank you, Claudia. Good morning, everyone. We are pleased that you have joined us for NOVAGOLD's 2021 Second Quarter Financial Results and also for an update on the Donlin Gold Project. On today's call, we have Doctor. Thomas Kaplan, NOVAGOLD's Chairman and David Ottewell, NOVAGOLD's Vice President and CFO. At the end of the webcast, I would like to remind our webcast and call participants that as stated on Slide 3, 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 SEDAR filings and forward looking disclaimers included in this presentation. I now have the pleasure of turning the presentation over to our Chairman, Doctor. Thomas Kaplan. Tom? Thank you, Melanie, And good morning, everyone. Greg sends his regrets as he's had a family emergency to attend to, And we'll be back in the office in several days. The new project is in the Western, the great state of Alaska as stress that mining is an important part of the Alaskan economy and becoming even more important to state revenues and employment. As shown on the map, there are 6 producing mines and numerous 3 employees can be found in most communities, large or small. In terms of scale, quality and exploration potential, Donlin Gold's attributes far exceed any other gold development project globally. When combined with our long standing native corporation partnerships, the exponential leveraging gold price, a strong cash position with key federal and state permits in hand, and experienced management team and Board as well as transformative shareholder. NOVAGOLD is an enviable amongst all Gold Development Projects. NOVAGOLD is committed to responsible mining, Stewardship of the environment and adding value to the communities in which we operate. We believe that mines Can be developed in collaboration with people who've had the local knowledge to help minimize environmental impacts while providing maximum benefits to all stakeholders. NOVAGOLD has approached the disclosure of our environment, social and governance ESG performance pragmatically Our inaugural sustainability summary report earlier this year was the latest step in our progression. With highest possible standards through our workforce performance, actions and conduct. At Donlin Gold, these principles are passed on to our workforce as they receive training and experience to develop skills that will help them today as well as in the future. The 1 drill program at Donlin Gold has direct hires of 70% Alaska Native employees from 20 different villages in the YK region as presented by the blue dots on the slide 6 map. Partnership is integral to our corporate culture. NOVAGOLD supports the Donlin Gold team and their outreach and site work to make a positive difference in the Alaskan communities in the YK region. Slide 7 shows Snapshot activities like the Rainbow Smelt Larva Study Sample. We have buckets to improve hygiene materials from masks providing protection from COVID-nineteen pandemic. Careful collaboration with our native partners, Cholista and TKC, as well as other tribal groups in the YK region since 2020, Has been key to successfully operating at sites with 0 COVID. 0. While the COVID-nineteen pandemic is a lower risk than a year ago, NOVAGOLD and Donlin Gold have continued adhering to policies to reduce risk and ensure the safety and well-being of all employees and contractors. Donlin Gold's stringent measures, as outlined on slide 8, allowed Donlin Gold to safely operate for the 2020 drill program, which we are continuing for the 2021 drill season. Underlining NOVAGOLD's and Barrick's commitment to the project partners did approximately $2,000,000 in the past 2 years and upgrading gold project site, including a larger kitchen facility, upgrades to electrical supply, a new warehouse and upgrades to the core logging and cutting facilities and equipment. Some of this investment can be seen in the photos on slide 9. The Donlin Gold Project Camp was reopened in March and 4 drill rigs were deployed for the 2021 drill program. Slide 10 shows drilling as well as core cutting and inspection that occurred earlier this month. You can also see on the bottom left an aerial photo of the project site. As of June 26, 28 holes in the year of 64 planned. This represents over 40% of the 20,000 100 meters planned in this campaign. Initial assay results are expected later this summer. As you can see in the map on Slide 11 is targeted in the ACMA and Lewis pit areas and is being performed to verify geologic modeling concepts And further test ore body continuity and structural control and test for extensions of high grade zones in both intrusive and sedimentary rocks. Once we have completed the 2021 drill program and geologic model update incorporating all the latest drill data, optimization work and trade off studies since 2011. This will provide the necessary information to support a decision to move to the upcoming feasibility study, Subject to a formal decision by the Donlin Board LLC. With all federal and most key state Donlin Gold continued to successfully advance remaining state permits, including water rights and the natural gas pipeline right way to right of way With the support of Alaska Native Partners, Cholista and TK, Alaska departed the water rights applications for Donlin Gold related to local surface water and groundwater sources this year. Additionally, ADNR's division of oil and gas is also expected to reissue the state right of way agreement and lease authorization this year. On May 27th, the Alaska Department of Environmental Conservation Commissioner upheld the State of Alaska's Section 401 Certification under the Clean Water Act that had been granted to Donlin Gold in 2018 after a thorough, diligent and transparent review by state and federal agencies of the proposed project development plan and its relationship with the surrounding environment. This is a permit that Donlin Gold has held since August 2018. On June 28th, Earthjustice Law Firm on behalf of ONC, The Tribal Council for Bethel, a village in the Yukon Kuskokwim region held an appeal to the Superior Court. NOVAGOLD's strong commitment to uphold the 401 certification validates the project stakeholders' commitment to advance the Nonland Gold Project in a safe and environmentally responsible manner for the benefit of all Alaskans. All great ore bodies go through appeals and litigation. There's never been one without one. Over a 6 year period, Donlin Gold conducted an extensive, transparent and independently reviewed scientific evaluation that included significant community participation and scrutiny and consistently demonstrated that the project fully complies with the Clean Water Act, the Alaska Water Quality Standards and analysis applicable state and federal laws. The process culminated with the issuance of the 401 certification in 2018. The 401 certification clearly demonstrates that the project of environment imposed by the State of Alaska and the appropriate agencies of the federal government of the United States. We remain entirely enthusiastic about the future of Donlin Gold, a Tier 1 gold development and look forward to continuing our constructive engagement with all the appropriate federal and state agencies in Alaska Welcome to the NOVAGOLD. Welcome to the NOVAGOLD. To meet reporting requirements, NOVAGOLD retained Wood Canada Limited in 2020 to perform a detailed review of costs and other assumptions used in the previously filed 2011 technical report. The 2021 technical report utilizes the existing mineral resources model and the same technical information from the previous Donlin Gold 2011 technical report with 2020 cost and adjusted gold price. This report results in no material change to the mineral resources or mineral reserves. As stated earlier in the presentation, the 2021 Donlin Gold technical report is separate from the upcoming feasibility study that we expect will commence Once we've completed the 2021 drill program and the geologic model update, subject to Donlin Gold LLC Board approval. Donlin Gold is committed to support the needs of its community partners and 2nd quarter community engagement highlights Can be seen on slide 14. In April, Donlin Gold was a major sponsor of the Lower Kuskokwim School District's Annual College and Career Fair held virtually. More vendors participated this year and approximately 100 students attended. NOVAGOLD and Donlin Gold made significant contributions to the Thomas Lodge in Crooked Creek after a fire. Funds were used to repair this critical asset prior to the busy summer season. To date, Donlin Gold LLC has signed 7 shared value statements with villages in the Yukon Kuskokwim region that formalize current engagement with local communities. These engagements Expand upon the long term relationships already established with these communities and address specific community needs such as water, Sewer and Landfill Projects, Salmon Studies and Suicide Prevention Programs. NOVAGOLD also located in Vancouver, British Columbia. As you can see from the photo on the bottom right, our very own Greg Lang took a pie for this worthy cause. Thank you, Greg. Donlin Gold operates pursuant to the terms of a subsurface minerals and surface land lease with Calista Corporation and a surface land use agreement with the Kuskokwim Corporation, TKC. The Donlin Gold Project is being developed plan that was selected by Cholista and TKC at the direction of YK region elders in the 1970s When land considered valuable for resource potential was selected and resource development companies were invited by the native corporations to explore. We support Cholista and TKC mandates through the 1971 Alaska Native Claims Settlement Act, ANCSA as highlighted on Slide 15 to help them develop their land for the economic benefit of the region and all stakeholders involved. We are thankful for the long term support and commitment to the project by the Alaska Native Corporations. They play a key role in its continued success. In the second quarter, the 1st Subsistence Community Advisory Committee was launched. SCAC is a subcommittee of the Donlin Technical Review Committee Chalista, TKC and Donlin Gold initiated planning to establish this committee in 2018. The committee's objective is to establish and maintain a well defined process for communication, dialogue and problem solving needed among the partners. The committee is made up of diverse people from the region to provide information about local subsistence activities and traditional knowledge as it relates to the Donlin Gold Project. The SCAC committee provides a forum for stakeholders to discuss issues of concern related to Donlin Gold's plans, operations or monitoring activities and their potential impact on subsistence activities, wildlife or habitat. Recommendations related to subsistence will be made to the committee and assist them in developing and periodically updating a subsistence For lands and waters affected by the Donlin Gold Project. These partnerships, activities and programs demonstrate NOVAGOLD's and Barrick's long standing and deep rooted commitment to sustainable and responsible development for the benefit of all stakeholders in the YK region. I will now pass it over to David Ottwell, our CFO, who will cover the financial results for the Q2. Dave? Thank you, Tom. Slide 17 highlights our 2nd quarter operating performance. We reported a net loss of $10,500,000 in the quarter, an increase of $3,300,000 from the prior year quarter, primarily due to foreign exchange movements resulting from a strength in the Canadian dollar and lower interest income earned on cash and term deposits. Also contributing to the increase were higher share based compensation and legal costs and a full quarter of activity at the Donlin Camp this year compared to last year's temporary pause due to COVID precautions. 2nd quarter cash flows are highlighted on Slide 18. We spent $6,600,000 in the 2nd quarter, slightly higher than the prior year quarter. Higher with Donlin Gold Funding and G and A spending was offset by foreign exchange movements on Canadian dollar denominated cash and a reduction in working capital. We ended the quarter with cash and term deposits of 107,600,000 On Slide 19, we note our robust treasury. In addition to our cash and term deposits, We also have $75,000,000 due from Newmont next month, with an additional $25,000,000 due in July 2023. We continue to anticipate spending $31,000,000 to $35,000,000 this year, including $18,000,000 to $22,000,000 to fund our share of Donlin and $13,000,000 for our corporate G and A costs. I will now turn the call back over to our Chairman, Thomas Kaplan. Thank you very much, Dave. We all recognize that Donlin Gold already enjoys an incredible foundation of attributes to build upon And that as the project's expected mine life may already be measured in decades, we have a great responsibility to all stakeholders to do things right from the start and not cut any corners. With approximately 39,000,000 ounces of gold in measured and indicated mineral resources, When compared to the 15 comparable large gold projects in the Americas, as shown on Slide 20, Donlin Gold is the largest in its category with a resource that is 4 times greater than the average. The scale of Donlin Gold combined with its quality, Its grade at 2.24 grams a tonne, as shown on Slide 21, at twice The global average of large open pit deposits is exceptional. As currently envisioned, the project would average 1,100,000 ounces per year for the life of mine, as shown on Slide 22. Donlin Gold's production profile far exceeds the average of North and South American peers on this slide. Global gold production continues to decrease For most of major producers, further illustrating that the industry desperately needs projects with scale, grade, and longevity. And then of course there's more than this. Donlin Gold is indeed unique In its combination of all of the attributes that we've cited and then some, particularly given the scarcity of new major gold discoveries over the past decade and the safe jurisdiction in which it's located, Alaska, A Tier 1 jurisdiction. Only 3 minuteing operations produced more than 1,000,000 ounces in 2020 as shown in teal in Slide 23. Looking at comparable scale mining operations around the world, both in production and in development, Donlin would rank among the top operations if it was in production today. The slide also shows the top 5 largest Stage gold projects in dark blue. Donlin is in gold. Looking globally, there's only one development project that has both Scale and a Desirable Mining Jurisdiction. Donlin. While we're focused on the drill program, permitting and modeling work, we haven't lost sight of one of the project's most important attributes, Donlin Gold's truly exceptional exploration potential. The project's gold endowment is contained within only 3 kilometers of an 8 kilometer Belt as shown by the ACMA and Lewis pits shown in gold on Slide 24. And the mineralized belt represents only 5% of the total property. And let's not forget that in all the pastoral programs at Donlin Gold, we've encountered amongst the best assay results for an open pit gold project in the industry anywhere in the world. Slide 25 represents the life of mine diagram for Donlin Gold as one of the world's largest mining developments. After years of exploration and resource enhancement, technical studies, the receipt of our federal record of decision and several state permits, Donlin Gold has been substantially derisked and methodically brought up the value chain. It's a solid foundation from which to advance this rare and unique deposit. The time invested upfront to develop responsibly and sustainably is critical to the project's success. We believe all the latest drill data, optimization work and trade off studies since 2011. Then subject to a formal decision by the Donlin Gold Board, Shift our focus to the upcoming feasibility study. Deposits that boast Donlin Gold's special combination of Governments around the world, either physically or through legislation or other means, effectively seizing assets. We are grateful that Donlin Gold is located in Alaska, Where there is a time tested culture of respect for responsible and sustainable mine development and the rule of law. We are confident that NOVAGOLD with Barrick, Cholista and TKC will advance this unique Technically a safe and durable and sustainable manner. NOVAGOLD is thankful for the dedication, engagement, knowledge, sharing and encouragement of our shareholders, many of whom have been holders for a decade and are shown on Slide 26. We're appreciative and humbled by the trust you've put in our team and we take this responsibility very seriously. We remain focused on maximizing returns in a measured, safe and socially responsible manner. It's extremely important for all of us That you are proud of your investment as well as make money. The attributes of Donlin Are summarized again on slide 27. The uniqueness of the project, its balanced, its robustness in key categories, Size, grade, jurisdiction, partnerships, exploration potential, balance sheet, advanced stage of permitting, A management team that has built and operated similar scale operations and investors aligned with our strategy as we move Donlin Gold up Value Chain. Thank you. Operator, we will now take questions from the participants. Thank you, sir. We will now begin the question and answer session. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any to withdraw your question. Our first question is from Lucas Pipes with B. Riley Securities. Please go ahead. Thank you very much and good morning Tom and team. Tom, it's great to hear your voice. I wanted to first ask a higher level question and then turn over to the project specifics. But Tom, it feels like the gold market is looking a bit for direction here and Would appreciate your thoughts as to what is your outlook? Where do you see the next catalyst? Really appreciate your insights. Thank you. Thank you, Lucas. Great hearing your voice as well. You know, I don't really think it's really something of the gold market looking for direction. I think it's more a function of gold doing What we always say, which is that gold does what you least expect it to do when you least expect it to do it. I think that what we're dealing with is a correction that once out of the way Is going to lead to new highs in gold. I think that we'll see gold go right through 2,000. Essentially, what we're seeing, it's not only in the gold market, it's in some other markets as well. You're seeing pullbacks that are accompanied by some capitulation. But if I had fresh dollars to put into the market today, It's into gold and silver, and particularly the equities that give you the maximum exposure. So to me, this is part and parcel of What we're seeing overall in the markets, which is that people are having to come to terms with the fact that some things have changed We are in unchartered waters. One of the assets that you always want to have exposure to when we're in such a sea change Are the precious metals and the equities are as cheap as they've ever been. So they're a great guy. Very helpful. Thank you, Tom. And on the feasibility study. You mentioned you would commence that work once the drill program is complete. And I wondered if you can provide an update of kind of how long it would take from there for the study to be completed. And then obviously from there kind of what the timeline could look like towards development. Thank you very much. That's brilliant. Thank you so much, Lucas. Question, I'd rather pivot this to Richard Williams, who is our project manager. Suffice to say that Greg would normally be fielding that part of the question. But my understanding is that once we have the drill data and the modeling done and Once there's decision by the Donlin Board, we would go into updating the feasibility study And the logic or the logical way for me to answer this is that at that time, Both we and Barrick would give you the timeline that we're looking for. Got it. Bob and weave sufficiently for someone who's not trying to avoid the question, but wants to make sure that you get an accurate answer As a pinch hitter. Yeah, no, no, that's helpful. Wait a minute. Wait a minute. Wait a minute. Go ahead. Wait a minute. No, I was just going to say, Tom, you did a brilliant Richard Williams. Yes, please. Lucas, Lucas, It's hard to put a timeline and Tom said it perfectly. We're going to get this drilling done. We're going to do the analysis, Make sure we've covered all the risks and gaps or at least have a mitigation plan. And you remember all the optimization and all the trade offs We've been doing, we'll go through all those, what survives, what doesn't. And then we have to develop a scope of work of what that Updated feasibility or final feasibility or detailed, whatever definition you want to put in, you know, adjectives in front of that feasibility because that's a key document As a stage gate for that next decision to try to get to a construction, ultimate construction decision. And so As Tom said, we're going to pull all that together as a group and put everything on the table. Once we have that scope defined, Then your scope to find your timeline. And as Tom says, we'll be happy to roll that out once we have all the pieces lined up. I'll ask one other slightly related question. It's a bit higher level again. But Tom, you speak to the declining production profile in the industry. And I wondered if you're able to provide an update As it relates to the sense of urgency that you're seeing or sensing among that the majors to replenish their production and development pipeline. Appreciate your thoughts on this. Well, I think If we're right in what's going on with gold, that sense of urgency will become, I think closer to panic. But it's not simply that. It's what's happening in terms of the jurisdictional risk Is really, I hate to say it because at a certain point, I became the Pied Piper of Unajurisdictional risk. But every week that goes by, you're looking at new jurisdictions which are becoming uninvestable. It's very hard if you're an investor in gold or copper to look at countries which are already talking about windfall profits taxes. And when you see that kind of thing happening in copper, not just By the way, in Africa, but also in the Americas amongst some of the senior producers. And you see movement In these countries towards outright socialist governments, you realize that The mantra of location, location, location is there. You have investors, those investors don't want to see you Putting new fresh in countries that are going to cap their earnings potential. And when you see things through that prism, the natural concern that these mining companies have to replace their reserves. And remember, not just replace reserves, but also To do so in a way that is not dilutive to their overall grade because average grade has collapsed by half over the previous decade. Well now you have to superimpose on that, that all the other countries that you might have been thinking of assuming that you weren't listening to me and a few other To me and a few other Jeremiah's out there, they're off limits. And the implications that that has For gold, for copper, for copper gold projects, etcetera. People aren't going to put Fresh dollars into jurisdictions that are basically saying, if you build it, we will come and take it from you. It's the field of dreams just doesn't work that way. And if I'm right, then what you're seeing in copper Is definitely going to be shown to be in gold. I think gold, for sure is going to be declared a strategic asset In many jurisdictions and you really want to be in those handful of places where the rule of law still matters. And again, what does that mean? That means a project like Donlin, which does not suffer from those issues of being accretive in reserves to everybody. It is accretive In terms of grades to practically everyone's open pit profile. But more than that, it's in a jurisdiction That when you really want the fruits of the leverage, instead of a legislature or, you know, autocratic government coming in and capping your gains, This one will allow you to keep the fruits of that leverage. So seen through that prism, how many stories do you have? You know kudos to Barrick, they understand it. They've seen what goes on all over the world. They know that Donlin You know is unique. I mean we call it the new Nevada because in terms of its size and its quality, Alaska, which is already the 2nd largest gold producing state in the United States after Nevada. Well, Donlin is A flagship gold asset for the entire industry. The amount of Gold assets that will produce over a 1000000 ounces around the world. It's it's a unicorn. But the most important thing is that the unicorn has got to be in a place where there is anti poaching legislation. Otherwise, the unicorn ends up on someone's wall. So, you know, I've completely mixed my metaphors, but you're going to allow me to indulge myself because I cannot exhort people enough. And I'm not talking my own book it's because I've been there I know these places I've actually done really well in those places it's over over O V E R. You want to be in places where an investor, a portfolio manager Can tell as I see that when I go to sleep at night, I know that what I thought I was going to wake up to is still there. I still own it and there are no surprises. That means United States, Canada, Mexico, Australia. I mean a couple of other outliers, you know, your Finland's Thanks, but if you're not there, you're going to have the worst of all problems for an investor, Getting the macro right and because you're right, not just getting it right, but because you're right, That's my summary. It's Always great to hear your thoughts. I really appreciate it and to you and the entire team, continued best of luck. Thank you very much, Lucas. Thank you for all of your great questions and firm support. We really appreciate it. Our next question is from Trevor Turnbull with Scotiabank. Please go ahead. Yes. Thank you. And thank you for providing an opportunity to discuss the project update. I'm sorry to hear about Greg's news. I certainly wish him the best. I appreciate you're going to have an updated technical report that will Be forthcoming with all the details of the recosting exercise. However, I did also want to ask a couple of high level questions just on the operating and capital costs. With respect to the reassessing the cost at Donlin, I was wondering if there were any major surprises or if you could comment Perhaps on some of the big items like the labor rate trends and if there were any material changes in the recasting for, say, fuel price assumptions. Richard? Yes. You want me to take that time, I will. Thanks. Yes. Trevor, yes, it was a good exercise. It's been 10 years Since the 2011 technical report. And so it's a good opportunity to, 1, look at a lot of the permitting activity and see if there was any major changes, which there weren't. But we were able Bring in new costs, which now we aren't estimates as much as real now as we're getting permits. But no material change. It's just more surety. And then, you touched on some good points. When we looked at fuel, particularly with diesel and the oil prices have changed since we The months we've been working on this update, but in the 2011, for instance, we had $85 barrel oil and we used 65 in this in these update numbers, which isn't far off where we are today. And so actually we saw a decrease in power costs because natural gas is also tied To the oil price. And so, something like processing, the costs actually were slightly better Due to that energy reduction, labor costs that you touched on a good one. Probably one of the steady things we did see Throughout the past 10 years and throughout all our costs, labor has gone up. And I don't think That's a surprise. But again, nothing earth shattering. And I think, Trevor, what you can take from these numbers As although they've gone up, so has the gold price. And so one of the things we were trying to check and it's the same thing we checked Back in 2008 when we were doing projects is, when does the gold price have a steeper incline And the rising commodities for building. And so what we saw and you'll see it in the detailed report is, We track well, right? And so with the higher gold price, it offset some of those higher labor costs and some of the other commodity costs. I think overall, Tony showed about a 10% capital increase on a project this size. That was a pleasant surprise is that they weren't more. And again, we use some CPI indexes in some places, but we did go out for quote on a lot of the major equipment To make sure that we didn't let indices fool us. So overall, there was no step change. And as we reported, The really good news is when we look at these new operating costs and ran some optimized pits, they fell within the 2011 pits, which Is why the QPs were comfortable signing off to no material change. So I think it kind of Supports the robustness and again just highlights the magnitude and the value of this asset. Right. No, that helps a lot. Thank you. I had a similar question about the initial capital costs. I was wondering, again, if there were any large swings in the estimates or surprises that just were unexpected to you. And then also if you could talk a little bit about if there was a difference between, say, the initial costs on the mine versus the utilities and the pipeline project, If one showed more or less change relative to because you provided an overall number, but But didn't break it down. And I was just curious if one element had more of a change than the other. Yes. No, That's a fair question and a good question and something we were trying to watch to see where the trend was going, which we also would Then relate back to some of the optimization work that we've been doing. But we didn't really see any one area Grossly spiked out of control, which was good again, good news. You had some pluses, you had some minuses. There were a few Pieces of the mining equipment that were a little bit shocking how they had maybe doubled in price, but then other mining And most of the not just large capacity equipment, but the large number of equipment did not. So overall, we did see a substantial rise. But yes, it was a little curious on just a few pieces of equipment. And then when you got into the process, I think, Yes, I think, again, nothing mills and flotation equipment and autoclaves and all that seem to be Pretty well all in line. No major spike in one area than another, which again, that was a good trend to see. One thing we tried to do, Trevor, is to make sure we did not because we were on the front end, Q1 2020, we're on the front end. We didn't want Any COVID related costs, good or bad, to impact. We wanted more of A neutral thing. And so there were some areas where we could have used a lot lower prices, say, in piping material that we opted not to at this time. And when the time comes that we're ready to actually purchase that we'll take advantage of those things. But Again, we wanted to be as fair and level as we could with this exercise, knowing that this is just a launching pad into the final feasibility update. So yes, I would say overall, Trevor, we did not See any one area that just knocked our eyes out. And so overall, I think that's a good trend is that You see the ups and downs, magnitudes all about the same throughout all the disciplines. Even like I say, even in the infrastructure, we seem to have Held pretty good ground there. So we're pretty pleased in that sense. Well, that's great. Yes. Looking at kind of the overall numbers on both OpEx and CapEx. It didn't seem like that big a change and that certainly would Make you think that there were no big outline elements within it. I appreciate the color and look forward to finding out When you guys are looking at the feasibility study when that decision comes, but thank you very much. You bet. Thank you, Trevor. Thank you, Trevor. Our next question is from John Tumazos with John Tumazos Very Independent Research. Please go ahead. Thank you. In regards to Greg, all well wishes. Last year, there were some really nice drill holes, really used to confirmatory drill holes. Does no material change in the reserves and resources Mean that you might have had a 1,000,000 or 2,000,000 ounce improvement that's immaterial because you're so well endowed with so many ounces of gold? Or were those holes just twinning other good holes or were there some holes that were below average mixed in so there was no material change? So Tom, I can address that one too. Yes. Sure. So John, yes, that's good observation. So with this verification of no material change, we did not Go into, obviously all the new data and run a whole new resource with these QPs. What we did though is Take the 2020 2017 drill holes and looked at those piercings into the old 2011, geologic and resource model and look, you know, spot check that there wasn't A major material change or variation. So you're right. I mean, when we get this last drilling done And we do another full update on that resource. It's not I don't think you're going to see anything material, right? And again, we're just spot checking at this stage. We'll have a better handle on that when we finish the work. And as we said last year, those were all good news holes, but they were targeted holes and it was a small population to the overall. And we just got to finish the work to give you the what The big picture looks like. Where last year's holes targeting what is likely to be the first Several years of the mining sequence, it's common for lenders or equity investors to ask about the first Few years when they do due diligence on a project and often the twinned holes in the early years. Right. So John, the targeted holes were more looking at concepts and extensions and could we Looking for some continuity and piecing together. We have a high grade up here. Can we tie that high grade we have down there together and do they Does it fill in between? So it wasn't necessarily designed to look at just the early pits. But what I will comment is we keep track of ones that do pierce, say that first 10,000,000 ounce pit versus The bag at the time $1200 resource pit, just to see how we're tracking. And I think it's pretty clear that with this deposit in the drilling that's been done over the last 10, 12, whatever, 20 years. That I'll call it the starter pit, if you will, is Obviously, more densely drilled and we have more understanding of it than we do the Some of the outer areas. And so that can be used, as you said, for that due diligence to make sure that Yes, you always and I think you've heard others say it, it's a 30 year project, but we want to make sure those 1st 10 years Are pretty rock solid because that's your payback. And I think that is what you're alluding to. Thank you very much. This concludes the question and answer session. Would like to turn the conference back over to Thomas Kaplan for any closing remarks. Thank you very much, Claudia. First of all, thank you to Lucas, Trevor, John for your questions and your well wishes to Greg, which Obviously will be conveyed. I want to also thank Dave Ottewell for his contribution. You know, we've got a robust balance sheet and he's doing a great job with it. And Richard Williams for stepping in and making sure that I'm not too far over my own skis in talking about things where we're fortunate To have someone who joined us right after building the very successful Pueblo Viejo mine, which is Pretty similar in scale to Donlin. And I remember when Richard joined us and Victor Flores, then it pulls and asked, Richard, why did you come to NOVAGOLD? And Richard said, because I want to be part of building the greatest gold mine in the world. For reasons which I think that we've tried to convey, We really believe that Donlin is A unicorn. Whatever superlatives you want to put on something, which when attributes And size and safety and costs and all those other things really is unique. And in a world in which almost every week another jurisdiction goes by the wayside And location, location, location becomes the primary gating point for an investor. I think it's fair to say that NOVAGOLD as a pure play on the new Nevada, The next Carlin, however you want to look at it, is a really great investor vehicle. And I also want to take a moment to thank our partners at Barrick, because this is truly a joint venture. We are fifty-fifty, but more than that, And Catherine, running North America. First setting that tone, as I like to rib Mark, who's Been a dear, dear friend for many, many years. I say the reason why we get along so well with Barrick is because NOVAGOLD has more Barrick DNA in it than Barrick. And it's a joke, but it's also a testament to the fact that our teams work very seamlessly because Pretty much everyone has known each other. And to the extent that Randgold has come into the story, which of course is a very big extent, It's been hugely accretive to the process. What they've brought their own vision To the enhanced modeling concepts. I think it's fair to say that both the Barrick NOVAGOLD teams, the Donlin Gold team as the Synthesis are really excited by what they see. The new models are obviously Extremely exciting. If you were to look at those drill results from last year, they would be amongst the very best drill results In the entire gold industry. The fact that they're located in a place that is really allowing us to Go all in is really fabulous. And as most of my career has been built on the drill bit, I can tell you, Word up to me, I'd have 10 drill rigs on the thing for years, but that's another story. Suffice to say that There's a lot of gold there. There's going to be a lot more gold there. The 3 kilometers start And even the 8 kilometers altogether are 5% of the land package. All credit to Mark Bristow, who's a geologist. He's been out to site, will continue to be out to site. Mark wants to know what every single ounce is going to look like, in those early years. And All credit to him because the project's only getting better. And this is a big love letter and thank you to Barrick and team. But as investors, maybe also I think really stalwart investors on our side, I think we can look forward to really having one of the only go to stocks in the global development space. And I want to thank all of our investors, shareholders, big and small, for their support. We never take it for granted, not for a moment. Thank you. This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.