U.S. Markets closed

Edited Transcript of NG.TO earnings conference call or presentation 3-Apr-19 3:00pm GMT

Q1 2019 NovaGold Resources Inc Earnings Call

VANCOUVER Apr 16, 2019 (Thomson StreetEvents) -- Edited Transcript of NovaGold Resources Inc earnings conference call or presentation Wednesday, April 3, 2019 at 3:00:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* David A. Ottewell

NovaGold Resources Inc. - VP & CFO

* Gregory A. Lang

NovaGold Resources Inc. - President, CEO & Non-Independent Director

* Melanie Hennessey

NovaGold Resources Inc. - VP of Corporate Communications

* Thomas S. Kaplan

NovaGold Resources Inc. - Chairman of the Board

================================================================================

Conference Call Participants

================================================================================

* Lucas Nathaniel Pipes

B. Riley FBR, Inc., Research Division - Senior VP & Equity Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Welcome to the NOVAGOLD's First Quarter 2019 Conference Call. (Operator Instructions) And the conference is being recorded. (Operator Instructions)

I would now like to turn the conference over to Melanie Hennessey, Vice President, Corporate Communications. Please go ahead.

--------------------------------------------------------------------------------

Melanie Hennessey, NovaGold Resources Inc. - VP of Corporate Communications [2]

--------------------------------------------------------------------------------

Thank you, Aerial, and good morning, everyone. We are pleased that you've joined us on NOVAGOLD's first quarter financial results and for an update on the Donlin Gold project.

On today's call, we have Greg Lang, NOVAGOLD's President and CEO; and David Ottewell, NOVAGOLD's Vice President and CFO. We also have our Chairman, Dr. Thomas Kaplan, who will be on hand to answer questions at the end of the call. At the end of the webcast, we will take questions both by phone and by e-mail.

Before we get started, I would like to remind our listeners that 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.

With that, I have the pleasure of introducing Greg Lang, NOVAGOLD's President and CEO. Greg?

--------------------------------------------------------------------------------

Gregory A. Lang, NovaGold Resources Inc. - President, CEO & Non-Independent Director [3]

--------------------------------------------------------------------------------

Thank you, Melanie. Good morning, everyone. Our 50% owned federally permitted Donlin Gold project is in Alaska, the second-largest gold producing in the state in U.S. and is located approximately 300 miles west of Anchorage, as shown on Slide 4.

On Slide 5, we highlight 2 state permits received in the first quarter, the Alaska Department of Environmental Conservation issued the final waste management permit and the Alaska Department of Natural Resources issued the final reclamation and closure plan approval in January. We are advancing other state permits regarding the project's transportation corridor and pipeline. Additionally, we are commencing work needed for the Alaska Dam Safety certificates that will carry on into 2020. With permitting largely complete, we are increasing our focus on continuing to integrate scoping-level optimization work into a study that will become the basis for an updated project development plan.

Slide 6 outlines the permit work that the team has already accomplished over the past year, heavily de-risking the Donlin Gold project, while staying on track with our strategy. With federal permits in hand, we have the right, but not the obligation to conduct work on site. Highlighted in green are the 2 most recent state permits that were received in the first quarter, which I mentioned in the previous slide. We will keep you updated as other permits come in.

Big part of our activities in Alaska is working with both Calista and TKC, our Native Corporation partners. Over the past few months, we continued our outreach efforts and met with tribal councils and key stakeholders in the Y-K region. In the first quarter, NOVAGOLD and Donlin Gold participated in several community activities, some of the highlights included meeting with career counselors in the Lower Kuskokwim School District with the goal of engaging youth in an upcoming career fair and participating in the Alaska Forum on the Environment, where we received the Green Star Certification certificate that recognizes businesses for your efforts in sustainable environmental stewardship.

Additionally, Donlin Gold hosted their annual safety expo ahead of the Iron Dog race in Alaska. We attended the State of Alaska legislative session in Juneau where we met with state representatives and senators, as well as the newly elected Governor Michael Dunleavy. Transparent and open communications with local communities is in the central part of our day-to-day responsibilities in the region.

And with that, I'll turn it over to our Chief Financial Officer David Ottewell.

--------------------------------------------------------------------------------

David A. Ottewell, NovaGold Resources Inc. - VP & CFO [4]

--------------------------------------------------------------------------------

Thank you, Greg. Slide 8 highlights our first quarter operating performance. For the first quarter, we reported a $6.3 million net loss, $1.9 million lower than the prior year. The net loss decreased primarily due to lower share-based compensation costs, lower permitting costs at Donlin Gold, increased interest income and accretion of notes receivable, partially offset by higher interest expense on the promissory note payable to Barrick and foreign exchange losses.

NOVAGOLD's cash flow highlights are outlined on Slide 9. In the first quarter, we spent $5.2 million, $1.8 million lower than the prior year quarter. Total spending decreased due to lower permitting costs at Donlin Gold, increased interest income on term deposits and the sale of Galore Creek in July 2018, partially offset by withholding taxes paid on vested PSUs.

We ended the quarter with $161.8 million in cash and term deposits. In 2019, we continue to expect to spend a total of $24 million, including $13 million for our share of Donlin Gold and $11 million for corporate, general and administrative costs. At Donlin Gold, 2019 spending is expected to increase with the commencement of fieldwork and detailed engineering to support the application for Alaska Dam Safety certificates.

Looking ahead, as a result of our sale of Galore Creek last year, we have $100 million receivable from new mine with an additional $75 million contingent on Galore Creek construction.

Back to you, Greg.

--------------------------------------------------------------------------------

Gregory A. Lang, NovaGold Resources Inc. - President, CEO & Non-Independent Director [5]

--------------------------------------------------------------------------------

Thank you, Dave. Now for a brief overview of Donlin Gold. With its significant size, high grade, incredible output and a mine life measured in decades, along with excellent exploration upside, strong local partnerships and jurisdictional appeal, Donlin Gold is expected to be a pacesetter in the precious metals industry for years to come.

I will speak to each of these attributes in the coming slides. Beginning with size. On Slide 12, we compare Donlin to 17 other development stage projects in the industry. And if you look at the peer group average with 39 million ounces, Donlin is unique and more than 5x the size of the average peer group.

Another key attribute shown on Slide 13 is the outstanding quality of the deposit. Donlin's grade at 2.25 grams is double the industry average. Given the rapid decline in gold reserves and grade, deposits such as this are needed to sustain the industry.

Beyond the size and quality, Donlin Gold has longevity with an anticipated production profile of greater than 1 million ounces a year over a 27-year mine life. With the mine life measured in decades, once in production, the project is expected to be the largest contributor in the region and will bring great benefits to its stakeholders for many years to come.

The bubble chart on Slide 15 shows the scale of the project and how it compares to 10 largest gold producing mines in the world. Only 6 are expected to produce more than 1 million ounces a year this year, further illustrating that projects like Donlin are very scarce and needed to replenish the industry's diminishing reserves.

Slide 16 depicts the challenges of finding new gold deposits as defined by the blue bars. Gold is getting harder to find, and even as the prices moved up and exploration spending increased, there have been very few new discoveries. That puts Donlin in a great position when gold resumes its upward trend. Given that it can take on average over 20 years to go from discovery to production, we are in a great spot with the federally permitted projects and control of the development time line.

As shown on Slide 17, we have roughly 1,400 holes in this deposit, with over 90% of them being core holes, giving us a very detailed understanding of the geology and mineralization.

Beyond the drilling completed to date, there is still substantial exploration potential along the 8-kilometer mineralized belt as shown on Slide 18. The ACMA and Lewis deposits, which are marked in the blue area contain the 39 million ounce resource and only occupy about 3 kilometers of the 8-kilometer belt. When the time is right, we will resume exploration drilling.

Donlin brings exceptional leverage to a rising gold price as shown on Slide 19. In the current environment, we have a project with modest rates of return that increase substantially in a rising gold price environment. We have the flexibility and patience to wait for the right time to proceed with development.

Another unique aspect of the project is that our property is located on private land that's owned by 2 Alaska Native Corporations. Calista owns the mineral estate and TKC owns the surface rights. This land was set aside for mining-related activities and transferred to the Native Corporations for their economic self-determination. We have life of mine agreements with both partners who have been involved and supportive from the very start. We are thankful to Calista and TKC for their support and their commitment to Donlin has been key to our success.

As Slide 21 shows, being in a geopolitically safe jurisdiction is another key attribute. Alaska offers jurisdictional stability and welcomes responsible new resource development.

With permitting largely complete, the time line for development, as shown on Slide 22, is within the project owner's direct control. Our focus is shifting more to finalizing optimization work that will ultimately be reflected in a study that will serve as a basis for an updated development plan.

An important part of our engagement effort includes outreach to our shareholders and investors throughout the year. Over 50% of our shares are held by our top shareholders as shown on Slide 23, for whom we are extremely grateful, not only for their support of our strategy, but their foresight in superior gold leverage opportunities that this company represents through Donlin.

NOVAGOLD strives to create a balanced development plan that enhances economic growth, provides a safe and healthy workplace and preserves traditional lifestyles, while bringing tangible and long-lasting benefits to our community partners.

As shown on Slide 24, we implement our social responsibility programs and commitments in a number of important areas on an ongoing basis. We are all to one extent or another vested and contributing our time to various outreach efforts in Alaska.

We have moved Donlin Gold further up the value chain and look forward to the next chapter as we advance the project. It's our belief that our company is truly well positioned to create value for our shareholders.

To conclude, with a strong balance sheet of $162 million in cash, a unique asset in a safe jurisdiction, the right partnerships and people to take this project forward, I have no doubt that Donlin has the potential to become one of the most coveted assets in the precious metals industry.

Operator, we can now open the line for questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) Our first question comes from Lucas Pipes of B. Riley FBR.

--------------------------------------------------------------------------------

Lucas Nathaniel Pipes, B. Riley FBR, Inc., Research Division - Senior VP & Equity Analyst [2]

--------------------------------------------------------------------------------

I wanted to follow up a little bit, Greg, on the optimization study that you mentioned. Could you share with us a little bit more in regards to timing? And then what parts you're most focused on at this time?

--------------------------------------------------------------------------------

Gregory A. Lang, NovaGold Resources Inc. - President, CEO & Non-Independent Director [3]

--------------------------------------------------------------------------------

Lucas, thanks for joining the call. Our partner, we've been working very closely with them the last couple of months. As you might imagine, there's a lot of data for the new executives to get their arms around, and we're continuing to pursue that with them and advanced our execution plan for this year. But I think we're still some months out from committing to a firm date on when Barrick will finish getting their arms around the project. And as they do, we'll keep everyone posted.

--------------------------------------------------------------------------------

Lucas Nathaniel Pipes, B. Riley FBR, Inc., Research Division - Senior VP & Equity Analyst [4]

--------------------------------------------------------------------------------

Excellent. And then you touched on it in terms of the major changes we've seen in the industry with consolidation. Greg, what do you think could this mean for Donlin and NOVAGOLD? Would appreciate your perspective on that.

--------------------------------------------------------------------------------

Gregory A. Lang, NovaGold Resources Inc. - President, CEO & Non-Independent Director [5]

--------------------------------------------------------------------------------

Lucas, we're -- we don't really give a lot of thought to what's happening around us in the industry. I think it's fascinating. And really this year, we're financially strong and we're in a great spot to continue to move our project forward.

--------------------------------------------------------------------------------

Thomas S. Kaplan, NovaGold Resources Inc. - Chairman of the Board [6]

--------------------------------------------------------------------------------

Lucas, it's Tom. Can everyone hear me?

--------------------------------------------------------------------------------

Lucas Nathaniel Pipes, B. Riley FBR, Inc., Research Division - Senior VP & Equity Analyst [7]

--------------------------------------------------------------------------------

Tom, I can hear you, yes.

--------------------------------------------------------------------------------

Thomas S. Kaplan, NovaGold Resources Inc. - Chairman of the Board [8]

--------------------------------------------------------------------------------

Great. I'll add just one wrinkle to Greg's answer. When we look back upon the value proposition and the upside potential of Donlin being unlocked, I believe that I will be proven to be right that the Barrick, Randgold merger is indeed the white swan that I referred to in my last comments in the conference call that preceded this one as well as in my letter to shareholders. The first of that white swan's offspring and little swans are called signets. The first white signet from that is what we just witnessed between Newmont and Barrick. 25 years ago, the frontier gold rush, the go where the gold is phenomenon that led from the United States being the most coveted jurisdiction for goldmines to people moving into Peru when Newmont went in with Buenaventura on Yanacocha and, of course, Freeport to Indonesia and then ultimately Africa and everywhere else.

As you know, for a number of years, I believed that, that era is over. And again, I am standing. It was very, very good for me in a number of these countries. But about 7 or 8 years ago, we realized that it was ultimately all going to come around to jurisdiction. That if one really wanted to be able to get maximum premium valuation for assets, not to mention the ability to sleep at night, you were going to want to be in safe jurisdictions, North America, Australia and the like. So we withdrew from almost everything in the developing world. And the reason was, we thought resource nationalism would rear its head and it's the nature of resource nationalism that it's not something that could be contained. And when someone sees that their neighbor over the defense is getting a better deal from a mining company, they demand the same and so on and so on.

Before the frontier spirit took hold, U.S. assets were valued primarily using a 0% discount rate because of their safety and also growth potential. They were arbitraged against riskier jurisdictions, like Canada, Australia and South Africa. What just happened between Barrick and Newmont is a watershed event. And every investor and analyst in mining should have absolutely no doubt that a major, major game changer has just occurred. What Barrick did with Newmont is they have highlighted that the most attractive assets in the world are in the United States. Now Nevada, of course, is the #1 gold producer in the country. But #2 is Alaska. And we believe that we're already on track when one day we recommence drilling to be able to overtake the reserves of Nevada.

Now obviously if there's more drilling in Nevada, all power to them. But the point is this. For NOVAGOLD shareholders, in particular, and for shareholders of high-quality U.S. assets, the arm wrestling match that just took place over Nevada reaffirmed that the assets worth fighting for in the gold industry are in safe jurisdictions. Nevada obviously qualifies, so does Alaska. These are both places where research analysts, fund managers and other stakeholders will be very happy to take their families without any risk. It's a place where investors know that when they go to sleep at night, when they wake up in the morning, whatever they thought they owned the night before, they still own. It's a place where the rule of law isn't a novelty. We think that what just happened has validated our thesis that the United States would not only be coming back, but that it would be given the premier status in the world.

Now the best way to play the rebirth of the American gold mining premium is through NOVAGOLD. We are a 50% owner of an asset that will rival Nevada in terms of size; the grade, we already know; the mine in 1 or 2 stages would actually be bigger than the goldmines in Nevada and any single goldmine. Donlin could prove to be a multi-mine district. Remember, we have 45 million ounces identified on 3 kilometers of an 8-kilometer belt and that 8 kilometers represents maybe 5% of the total property. It's a quart of history that it hasn't yet been explored, but there are other targets on this property. In other words, Donlin could be in its own right, another Nevada. Now that's great enough.

But remember the last deal that was made between Barrick and Newmont was 61.5%, 38.5%, Barrick having operatorship. I'm sure that there's very good reason for all of that. What matters to us is that we are 50-50 with joint operatorship that gives neither party any advantage over the other, which means that we are a pure play on an asset that could one day rival Nevada and we have half of it with joint operatorship. One day when investors are coming back into this space, you can imagine the bullet points on the analyst reports, you can imagine what bankers will be telling their clients and brokers will be telling their clients, would you like a half interest in the next Nevada? With Nevada now being on everybody's lips, as I said, this is the first white swan. There may very well be others. But what has just happened will be that moment when people will go back, and they say, you know what, they ranged the bell for the NOVAGOLD thesis.

How quickly it takes for people to come around to it, it doesn't really matter. Because once they do, the uplift, the complete reevaluation based on the jurisdiction, not to mention all of the other aspects that make Donlin in the aggregate unique is going to be a game changer. And so I just wanted to make sure that everyone understands what that -- what we just saw is not another ho-hum moment in the mining industry, it is as much a ringing of the bell as when Newmont went to Yanacocha and unleashed the go to the gold -- go to where the gold is mentality. Fortunately, we have as much as gold as any deposits you're likely to find in the rest of the world, we just happen to be blessed that it's in the best jurisdiction in the world.

--------------------------------------------------------------------------------

Operator [9]

--------------------------------------------------------------------------------

(Operator Instructions) This concludes the question -- our next question comes from [Terence Moore], a private investor.

--------------------------------------------------------------------------------

Unidentified Participant, [10]

--------------------------------------------------------------------------------

First thing, I was looking at your measured and indicated, you got measured 6 million -- roughly 6 million ounces, indicated 33 million ounces. Would you do me the honor of differentiating those 2 and explaining why the indicated is not in the measured?

--------------------------------------------------------------------------------

Gregory A. Lang, NovaGold Resources Inc. - President, CEO & Non-Independent Director [11]

--------------------------------------------------------------------------------

Well, Terence, you've actually asked a question which would require a fairly in-depth answer, but I guess, the simplest way to put it is the function of drill hole density, and I'd observe that we strictly adhere to the industry and statutory requirements in how we compute and report our reserves and resources.

--------------------------------------------------------------------------------

Unidentified Participant, [12]

--------------------------------------------------------------------------------

Okay. The well indicated, the vast amount -- your 39 million overwhelmingly is in indicated -- is indicated. That does not have the sound of finality to it. So in other words, my question is, is there a possibility that you'll wind up with much less than 39 million ounces?

--------------------------------------------------------------------------------

Gregory A. Lang, NovaGold Resources Inc. - President, CEO & Non-Independent Director [13]

--------------------------------------------------------------------------------

Well, Terence, no, I think to give you a more sense of the classification, there's measured and indicated then inferred. And so only if you're looking for a category that's if you would say at risk to either get increase or decrease, it's typically in the inferred. Measured and indicated are very, very solid. And I would direct you to our web pages, which have really very in-depth detailed technical descriptions of the criteria that supports each one of those various classifications. And if you have trouble locating it, please feel free to reach out to us, and we will direct you to the appropriate spot in our data.

--------------------------------------------------------------------------------

Unidentified Participant, [14]

--------------------------------------------------------------------------------

No, I have got it up on my computer now. I can find it. I appreciate that. Now my next question is, what is the projected date for production to start, if there is one?

--------------------------------------------------------------------------------

Gregory A. Lang, NovaGold Resources Inc. - President, CEO & Non-Independent Director [15]

--------------------------------------------------------------------------------

Well, Terence, at this stage, we have not announced a development plan. It's our strategy to position this asset that when the prices in the markets are right, we're in a position to go forward. And Tom, would you like to expand on that question a little bit?

--------------------------------------------------------------------------------

Thomas S. Kaplan, NovaGold Resources Inc. - Chairman of the Board [16]

--------------------------------------------------------------------------------

Did you look to me?

--------------------------------------------------------------------------------

Gregory A. Lang, NovaGold Resources Inc. - President, CEO & Non-Independent Director [17]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Thomas S. Kaplan, NovaGold Resources Inc. - Chairman of the Board [18]

--------------------------------------------------------------------------------

When the conditions are right, when the gold price is higher -- can everyone hear me?

--------------------------------------------------------------------------------

Gregory A. Lang, NovaGold Resources Inc. - President, CEO & Non-Independent Director [19]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Unidentified Participant, [20]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Thomas S. Kaplan, NovaGold Resources Inc. - Chairman of the Board [21]

--------------------------------------------------------------------------------

Hello?

--------------------------------------------------------------------------------

Unidentified Participant, [22]

--------------------------------------------------------------------------------

Hello. Yes, I can hear you.

--------------------------------------------------------------------------------

Gregory A. Lang, NovaGold Resources Inc. - President, CEO & Non-Independent Director [23]

--------------------------------------------------------------------------------

Yes, we can hear you, Tom.

--------------------------------------------------------------------------------

Unidentified Participant, [24]

--------------------------------------------------------------------------------

Are we still on?

--------------------------------------------------------------------------------

Gregory A. Lang, NovaGold Resources Inc. - President, CEO & Non-Independent Director [25]

--------------------------------------------------------------------------------

Yes. We seem -- Terence, we seem to have encountered a communication barrier there, but really to answer your question a little bit more...

--------------------------------------------------------------------------------

Thomas S. Kaplan, NovaGold Resources Inc. - Chairman of the Board [26]

--------------------------------------------------------------------------------

I'm back on -- sorry, about that. I hope you can hear me now.

--------------------------------------------------------------------------------

Gregory A. Lang, NovaGold Resources Inc. - President, CEO & Non-Independent Director [27]

--------------------------------------------------------------------------------

Much better.

--------------------------------------------------------------------------------

Thomas S. Kaplan, NovaGold Resources Inc. - Chairman of the Board [28]

--------------------------------------------------------------------------------

Oh, much better, great. Basically, when the gold price is right, and we'll know it when we see it. Don't ask me what that price is going to be. You'll see it in an exploding share price, you'll see it in investor sentiment. People will understand that the next leg of the bull market is moving. That's when we, and of course, we have a partner, and Barrick will make a construction decision.

--------------------------------------------------------------------------------

Unidentified Participant, [29]

--------------------------------------------------------------------------------

The -- Tom, the reason I asked that is because I've been an investor in NOVAGOLD for many years, literally many. And I remember, and correct me if I'm mistaken, but my memory is usually pretty good, that at one point NOVAGOLD was offered a buyout at $17 a share, which NOVAGOLD turned down and that was...

--------------------------------------------------------------------------------

Thomas S. Kaplan, NovaGold Resources Inc. - Chairman of the Board [30]

--------------------------------------------------------------------------------

That's correct. That was before I was a shareholder in the company by the way. That was 2006 when Barrick made a hostile bid. Correct. I came into the company on December 31, 2008. It was a very, very different story at that time. The one thing that I can tell you is that if you've read the annual report, you will see that every promise we've ever made to investors from the time that we have come into the company, we have fulfilled each and every one of them. I don't think there are many companies that over the last decade would be able to say, they haven't made 1 mistake. And the result is that we have a federally permitted project in the United States with one of the best management teams in this space.

We haven't done anything to dilute shareholder value to the contrary, we spun off Trilogy, which is now $0.25 billion company in its own right. We've sold Galore, not for pennies, but for real money. We're now a pure play on 50% of an asset that in its own right could rival Nevada. Now you've been an investor for a long time and you've clearly seen that the last decade has been very difficult for gold stocks over the most part. Nonetheless, what I would suggest is that where we are now in a position to be able to wait for the higher gold prices that will allow us to get the kind of rate return that everyone should be looking for before they build a goldmine in this environment, we are, I think, better positioned than any other company in this industry. So I hope to be able to reward you.

One thing I can assure you, I sit exactly on your side of the table, if anything you could say that the owner lives above the shop. I love the story more now than when we got into it 10 years ago, and I was pretty excited then. But the fact that all of the boxes have been checked, the fact that we have been de-risked, the fact that all of the upside is so very clearly obvious. And that we are sitting with enough cash to be able to survive any downdraft in the industry that could devastate other companies that are producing or developing prematurely in my view. This is exactly the kind of vehicle that you should be looking for. I know personally this is exactly the kind of vehicle that I want. And I don't know of anyone that is better. Because if they were, I will be buying it.

--------------------------------------------------------------------------------

Unidentified Participant, [31]

--------------------------------------------------------------------------------

I appreciate that and I'm still with the company. I've got a good position with you. But let me wrap this up because somebody else might have a question, I can't ask all the questions. You mentioned Galore Creek, which was one of the things I was going to bring up because you did not address that, you sold 50% of Galore Creek, but we still retained 50%. What is the status of Galore Creek as far as development?

--------------------------------------------------------------------------------

Gregory A. Lang, NovaGold Resources Inc. - President, CEO & Non-Independent Director [32]

--------------------------------------------------------------------------------

Well, Tom, I will take that question.

--------------------------------------------------------------------------------

Thomas S. Kaplan, NovaGold Resources Inc. - Chairman of the Board [33]

--------------------------------------------------------------------------------

Yes, please take that one, Greg. Thank you.

--------------------------------------------------------------------------------

Gregory A. Lang, NovaGold Resources Inc. - President, CEO & Non-Independent Director [34]

--------------------------------------------------------------------------------

Yes. Terence, we had owned 50% of Galore Creek and it was co-owned by Teck. So now we sold 100% of our 50% interest. So Galore Creek is now owned by Teck and Newmont.

--------------------------------------------------------------------------------

Unidentified Participant, [35]

--------------------------------------------------------------------------------

Oh, okay, all right. I did not understand that. I thought we still had 50% of that. Last thing, general, let me make a comment here. I'm glad to see that Paulson is -- owns a lot of your stock because I am also into Detour, and Detour was an absolute mess, it was a scam until Paulson took over the board and straightened that company up. So I have a lot of hopes for Detour too under Paulson's leadership. So just thought I'd drill it in there that I think it's a good point that Mr. Paulson and his companies are heavily invested in NOVAGOLD.

--------------------------------------------------------------------------------

Gregory A. Lang, NovaGold Resources Inc. - President, CEO & Non-Independent Director [36]

--------------------------------------------------------------------------------

Well, we're very pleased to have them as shareholders, and I'm sure your remarks will find their way to the Paulson Group.

--------------------------------------------------------------------------------

Operator [37]

--------------------------------------------------------------------------------

This concludes...

--------------------------------------------------------------------------------

Gregory A. Lang, NovaGold Resources Inc. - President, CEO & Non-Independent Director [38]

--------------------------------------------------------------------------------

All right. Well, everyone, thank you for your interest in NOVAGOLD. We appreciate you taking the time to join our call. Thank you.

--------------------------------------------------------------------------------

Operator [39]

--------------------------------------------------------------------------------

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