Novagold Resources Inc (NG) Q2 2026 Earnings Call Transcript

Thank you for standing by. This is the conference operator. Welcome to the Novo Code Second Quarter 2026 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. You will hear a tone acknowledging your request. Should you need assistance during the conference calls, you know each and operator addressing stars and view. Webcast viewers may submit questions through the text box in the lower right corner of the Webcast frame. 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 NOVA Gold's 2026 Second Quarter Webcast and Conference Call and for an update on the Donlan Gold Project. On today's call, we have NOVA Gold's President and CEO, Greg Lang, and Peter Adamek, NOVA Gold'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 those received throughout the call. 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 the risk detail in our various Edgar and Cedar filings, and forward-looking disclaimers included in this presentation. With that, I will now turn the presentation over to NOVA Gold's President and CEO, Greg Lange.

Thank you, Melanie. Why NOVA Gold? I think it's useful to reflect on the value created through the company's long-term commitment to advancing the Donlan Gold Project. Over the past two decades, extensive drill programs have significantly expanded Donlan's reserves and resources. A key milestone for the company occurred in 2008-2010, and Electrum and Paulson became major shareholders. A position they hold to this day, the company successfully advanced permitting for the Donland Gold Project, representing an important step in its development. A year ago, Dovergold, in partnership with Paulson, acquired Barrett's interest in the Donland Gold Project. For the first time in 13 years, the company went back to the market to fund the purchase of its increased stake in Donland Gold, the bankable feasibility study, and repay the promissory note to Barrett. This transaction simplified the ownership structure and unlocked meaningful value for shareholders. These events, combined with the project's attributes, scale, grade, location, and production profile, underpin the value creation and incredible investment opportunity. Many of our shareholders view Nova Gold as an unexpired warrant on an ounce of production. On slide 6, the chart illustrates the post-tax net present value at a variety of gold prices. With the gold price currently over $4,000 an ounce, this reflects a value of over $50 billion at a zero discount rate, or about $20 billion at a 5% discount rate. This projection underscores the substantial economic potential of the Dowling Gold project in the current market environment. As highlighted on slide 7, Dowling Gold is positioned to become one of the biggest annual producers in the world with a projected output averaging over a million ounces a year throughout its 27-year mine line. Looking at slide eight, Donlan Gold hosts approximately 40 million ounces of measured and indicated resources at an average grade of two and a quarter grams per ton, which is more than double the industry average. Projects scale, grade, and long life position it to perform strongly across a wide range of gold market cycles. Moving to slide 9, we believe there are significant exploration opportunities beyond the defined resources in the ACMA and Lewis Pits, as illustrated in the graphic in the upper right hand corner. These resources cover only 3 kilometers of an approximate 8 kilometer gold bearing trend, which is only a small portion of our overall land package. This underscores the substantial potential to increase our reserves and significantly extend the mine life through further exploration. Outline Donlan Gold's current permitting status and underscores the advantages of its location in Alaska, the second largest gold-producing state in the U.S. Alaska has a well-established regulatory framework and an emphasis on resource development, provides a stable and supportive foundation for long-term mining operations. To date, ongoing collaboration with state and federal agencies have been constructive regulatory decisions affirming the rigor of the review process. We continue to support the state of Alaska in defending the Clean Water Act Section 401 certification, which is the only remaining challenge at the state level. Oral arguments were heard on June 3rd, and we anticipate a decision within a year. In federal litigation, the U.S. District Court in Alaska directed the Corps of Engineers and the Bureau of Land Management to supplement the current EIS and analyze a larger hypothetical tailings release. It's important to remember that all permits remain in place while the litigation is ongoing. The Corps of Engineers and cooperating agencies will review and prepare the draft supplemental EIS, which is anticipated to be published in September of this year. Moving to slide 11, we highlight a quote from Governor Mike Dunleavy who expressed strong backing for responsible resource development in Alaska, including the Donlin Gold Project. We appreciate his advocacy and look forward to continuing an open and constructive communication with him and his team. On slide 12, we highlight our longstanding collaboration and ongoing engagement with Chilista and TKC, whose roles as private landowners and owners of the mineral rights are integral to Donovan's success. Their shared commitment to responsible development helps for job creation, long-term economic opportunity, and the preservation of cultural heritage in the YK region, all grounded in deep local knowledge and stewardship. Moving to slide 13, in May, we released our 2025 Sustainability Report, which reflects our ongoing commitment to environmental stewardship, strong safety performance, and broader social responsibilities that are embedded in the project. NOVA Gold also takes pride in maintaining strong governance practices across all aspects of board oversight and governance. Moving over to slide 14, NOVA Gold is supported by a seasoned management team with a proven track record in mine development throughout the Americas. This is further strengthened by the Donlan Gold Project Execution Team, led by Frank Carcase, along with contractors like Fluor, WSP, Worley, and Hatch.

They all bring extensive experience and position Donlan to advance efficiently, responsibly, and with a strong focus on project execution.

I will now turn the call over to our CFO, Peter Ademak, to discuss our second quarter financial results. Peter?

Thank you, Greg. Turning to our operating performance on slide 16, the 26 second quarter net loss of $25.5 million for a civil net loss during the second quarter decreased by $28.8 million from the comparable prior year period primarily due to a $39.6 million non-cash charge recognized in the prior year related to warrants issued under a backstop agreement signed in April 2025 and higher interest income in 2026, partially offset by higher expenditures at Donlon Gold due to ongoing bankable feasibility study activities. The company's share of Donlon Gold expenses in the second quarter of 2026 was $10.4 million higher than the comparative prior year period due to ongoing 2026 activities by floor wsp whirley and hatch to advance the dominant gold bankable feasibility study unlike the comparative prior year period the company's second quarter 2026 results also reflect nova gold's 60 percent interest in dominant gold gna expenses at nova gold increased in the second quarter of 2026 by 3.1 million from the primarily due to higher professional fees share-based compensation and employee compensation fees were elevated in the second quarter and in the first six months of 2026 but remain generally in line with quarterly cadence expectations and are expected to decline during the remainder on slide 17 our treasury comprising cash and term deposits decreased by 22.3 million dollars to 370.2 million during the second quarter, reflecting Donlon Gold's funding of $16.3 million and Nova Gold's corporate G&A costs of $6.7 million, partially offset by $4 million in interest income. Corporate G&A expenditures during the second quarter increased by $2.3 million and our share of Donlon Gold's funding increased by $9.5 million compared to the prior year period for reasons discussed on the previous slide. Moving to slide 18, our Treasury at the end of the second $370.2 million dollars. Nova Gold is well-funded, enabling us to complete the Donlan Gold Bankable Feasibility Study in 2027, exercise our option to prepay the Barrick Promissory Note later this year, and cover our corporate GNA costs for at least the next week. Our cash expenditures in the second quarter and for the first six months of fiscal 2026 remain generally in line with our 2026 budget, and we remain on track to meet our 2026 guidance. I will now turn the presentation over to Greg Thank you, Peter.

I will now review the key highlights and activities from the second quarter. As highlighted on slide 20, Don and Gold continued to extensively engage with government and regional stakeholders and support local programs across the YK region. The key focus remained direct engagement with regional communities, where we conducted outreach alongside Celista and TKC to strengthen relationships and to support ongoing dialogue. The Subsistence Community Advisory Committee met a few times in the first half of 2006, with the latest meeting focused on subsistence and the Barge communication plan. The Don and Gold team also participated in several major Alaska industry and legislative events, Alaska Day on the Hill and the Alaska Mining Forum, along a broad coalition of trade associations. In parallel, we maintained active engagement with state and federal policymakers on key areas such as permitting, workforce development, and infrastructure. Lastly, we provided briefings to the U.S. Senate campaigns and the YK Regional Health Board to ensure their continued awareness and alignment on project activities. All of these efforts support Donlan Gold's long-term objectives of advancing workforce force development, strengthening regional economic participation, and progressing the project in a responsible manner. Slide 21 highlights the key technical updates and exhilarating momentum achieved in the second quarter marked by meaningful progress across all primary work streams. Under Floor's leadership, the integration of major work packages and technical work streams with specialist contractors WSP, Worley, and Hatch are progressing to support the Donland Gold Bankable Feasibility Study. Key updates include infrastructure advancement for the on-site power plant and the natural gas pipeline, pressure oxidation circuit, and oxygen plant. Strategic integration, where FLOR is coordinating all specialized contracts with a single consolidated execution framework to improve schedule efficiency and cost accuracy. Operational foundation, with a disciplined engineering approach to bring key components closer to completion, ensuring the delivery of a high-quality bankable feasibility study with a targeted completion. 2027 building on this momentum the island gold remains exceptionally well positioned as one of the world's premier undeveloped gold deposits as shown on slide 22 the second quarter of the year has delivered meaningful progress across all the key work streams further strengthening the project's development trajectory. As a result, Donovan is increasingly well positioned for its next phase of advancement, supported by a series of important recent milestones. Donovan Gold is building out the project team and advancing key state, site, and technical activities in support of the Bankable Feasibility Study. These activities include geotechnical drilling and materials assessments along the planned upriver port and access road corridor, as well as along the proposed natural gas pipeline route. In addition, the company will continue to support permitting activities while maintaining strong engagement with Tulista, TKC, local communities, and government stakeholders as it advances toward the next stage of project development. We deeply appreciate the continued support and competence of our long-term shareholders, some of which are shown on slide 23. Nova Gold remains committed to responsibly advancing the Donland Gold Project and achieving key milestones while fulfilling all its commitments to local communities. We extend our sincere appreciation to our shareholders, stakeholders, our board of directors for their steadfast trust and support, and we express our deep appreciation to the Donnell & Gold team for their dedication and hard work. We look forward to even further progress and more exciting opportunities in the years ahead. In closing, slide 24 summarizes the core attributes that distinguished diamond gold as a truly unique asset within the global gold sector. The project is defined by exceptional scale, high-grade open pit mineralization, long life, low projected operating costs, and meaningful exploration potential, all in a stable jurisdiction. placing it among the select group of world-class gold development projects. With approximately 40 million ounces, rating two and a quarter grams per ton, the project already stands apart from the others. Supported by an experienced leadership team and strong collaboration with local community landowners, the project remains well-positioned for disciplined advancement and long-term value creation. Operator, we can now open the line for questions.

To join the question queue, you may press star, then 1 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 2. Webcast viewers may submit questions through the text box on the lower right corner of the Webcast page. The first question comes from Carlos de Alba with Morgan Stanley. Please go ahead.

Yeah, thank you. Good morning, everyone. So just on the professional fees, obviously we saw a big increase, and you just mentioned that you expect the second half to see lower levels than in the first half. Is this already happening, you think, in the third quarter, or is it more just in the fourth quarter? That would be my first question.

Yeah, I'm happy to take that. Thank you for the question. Yes, fees were just kind of going fees related to the transaction transpired at the end of last year in connection with our increase of the 10%, and we are expecting those fees to start tapering off at third quarter of this year.

All right. Thank you, Peter. And maybe, Greg, do you have a sense already as when in 2011 you may finish the BFF? Or is it still out of the cell?

Thank you for joining the call this morning, of course. You know, we've guided that we expect to finish equitable feasibility study in the first half of 2027. But, you know, the work is proceeding with Floor, Worley, SP, and Hatch, all contributing their in-fishing for the studies. So it's progressing now as we expected. So we'll look for something early in the first half of next year.

All right. Thank you, Greg. Good luck with everything. Thank you, Carlos.

We have a few additional questions. Go ahead.

I only we have another question from the audio right now the question comes from Fred Bolton with BMO capital market please go ahead hi morning and thank you for the presentation and Greg and Peter just one question are you able to give us a bit more and color on how financing the shifts are going for the jump project thanks for participating in our call this time yeah we've We've been going through a process with our partner, the team at Paulson, on electing financial advisors for the project, and we anticipate making an announcement in the garden in the coming weeks. But it's moving ahead as we consider what options are ahead of us for financing Donlon.

Thanks very much.

We have a few questions coming from the line. The first is from Jeff Niemann. What is the current commitment for development of the mine?

Well, I think I'll break it down into two pieces. I think the first one is the timing. I think, as we've mentioned, our main focus is completing bankable feasibility study, and that's of a year out. And then we will include it in the study. We'll be an execution plan, and we'll be able to provide significantly more detail on the path forward for Donovan Project in conjunction with the completion of the feasibility study. So that's moving ahead. And, you know, the timeline on, you know, financing, you know, that's, you know, as I mentioned earlier, we've engaged financial advisors, and we'll be updating the markets in due course.

The second question is from Mr. Fritz.

Could comment on the expected timeline regarding the Alaska Supreme Court decision on the water quality certification in particular, whether this potentially remain pending on the proposed completion of the EFS?

All right. I think it's important to remember that there were three cases before the Alaska Supreme Court that worked all the way to the Supreme Court. Two of those have already been ruled on in favor of the Donilon Project and the permitting agencies. The final case is regarding the 401 certification. You know, brief oral arguments were made earlier this month. And typically, the court in Alaska takes about a year to issue a ruling. At this stage, it's also important to remember that our permits remain in force during this time. So I think do the permits cases influence our thinking? No, they do not, and I expect that they will be resolved, you know, sometime probably when the feasibility study is due to be completed and certainly before a construction decision made.

All the questions we have online, Aida, unless you have something else on your side?

No, we don't have any more of your questions. That concludes the question and answer session. I'd like to turn the conference back over to Greg for closing remarks.

All right.

Well, everybody, we appreciate you taking the time to join the QT call for NOVA Gold. Thank you. Thank you.

This brings to a close this conference call. You may disconnect your line. Thank you for participating and have a proud day.