NG (2020 - Q4)

Thank you for standing by. This is the conference operator. Welcome to the NovaGold Fourth Quarter and Year-End 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. [Operator Instructions] I would now like to turn the conference over to Melanie Hennessey, Vice President, Corporate Communications. Please go ahead. Melanie

Thank you, Ariel. Good morning, everyone. We are pleased that you have joined us for NovaGold's 2020 year-end financial results and for an update on the Donlin Gold project. On today's call, we have Dr. Thomas Kaplan, NovaGold's Chairman; Greg Lang, NovaGold's President and CEO; and David Ottewell, NovaGold's Vice President and CFO. At the end of the webcast, we will take questions, both by phone and via text. 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 risk detailed in our various EDGAR and SEDAR filings and forward-looking disclaimers included in this presentation. Without further ado, I have the pleasure of introducing Greg Lang. Greg?

Thank you, Melanie, and good morning, everyone. Our Donlin Gold project is in the western part of the great state of Alaska, as shown on Slide 4. This project is a 50-50 partnership with Barrick Gold. 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 six producing mines and numerous exploration and development projects in the state. In terms of scale, quality and exploration potential, Donlin Gold's attributes far exceed any other gold development project on the horizon. When combined with the Company's excellent partnership with the native corporations and co-owner, Barrick, exponential leverage to a rising gold price, a strong cash position and key federal and state permits in hand, an experienced management team and Board as well as long-term supportive shareholders, NovaGold is in a league of its own. Slide 5 highlights our strategic focus for the year. As COVID-19 positive cases rose in Alaska over the summer, Donlin Gold's stringent safety measures and on the ground support allowed us to safely operate four drill rigs, making up for the two months of the pandemic-related shutdown sustained early in year. Careful collaboration with our native corporation partners, Calista and TKC, as well as other tribal groups in the region were key to a safe and successful drill program. In August, October and January 2021, and NovaGold and our partner, Barrick, reported updates on the assay results from the 2020 program, the largest drill program in over 12 years. The work was carried out safely and ahead of schedule despite the impacts of COVID-19 on our activities. With a long history of mining and a skilled workforce in the state, Donlin offers the opportunity of a future with good paying job and training for young people who can live close to home and continue a sustenance way of life that includes hunting, gathering and fishing. We are proud that greater than 80% of our local workforce, our Alaska natives and that we had no lost time accidents. The image on Slide 6 shows the 2020 drill program, core hole locations with reported assays in orange and remaining assays to report in black. A total of almost 17,000 meters or over 70% of the length drilled have now been reported. Final assays for the 2020 drill program are expected to be reported in the coming months. We are proud to say that the program was safely and successfully completed in September with a total of 85 holes or over 23,000 meters drilled. The results exceeded modeled expectations with higher drilled grade thickness than predicted by previous modeling. The program to date not only improves geologic interpretation. It also provides encouragement for additional high-grade drill targets. All of this was done with zero COVID cases at the project site. Our plans for 2021 include that partners will report the final assays from the drill program. We will be integrating the results into the geologic model and evaluating the timing to update the feasibility study followed by engineering, which forms the basis of our execution plan and ultimately, leads us to a construction decision. To complete the model, additional confirmation and extension drilling are planned for 2021, focusing on the continuity and structural controls of the high-grade mineralization we encountered. NovaGold engaged Wood Canada, formerly AMEC, to perform a detailed review of the cost used in the Donlin Gold feasibility study, 43-101 technical report that was prepared by AMEC in 2011 to meet the Company's reporting requirements and qualified person sign-off. Based on that cost per view, we are determine that updating the Donlin Gold feasibility study using 2020 costs and gold guidance results in no material change to the mineral reserve and reserves. Therefore, the Donlin Gold project feasibility study is considered current and supportive of all of our scientific and technical data included in our public materials. With this currently updating all sections of the report has generated the Donlin Gold project since 2011. NovaGold intends to file the updated technical report on EDGAR and SEDAR in 2021. The updated Donlin Gold study does not incorporate the latest Donlin Gold optimization work on the geologic model or other optimization work, given that these assessments are still underway. On Slide 7, we highlight federal and state permits received to date, a great foundation from which to build on. In early 2020, the Alaska Department of Natural Resources issued final authorizations of the easements, land leases, land use permits and site authorizations for the proposed transportation facility and easements for the fiber optic cable located on state land. It also denied an appeal and affirm the division of mining land and water's original approval of the Donlin Gold reclamation plan and accompanied permits. There are three primary permits that remain outstanding, all of which are not on the critical path. The state right-of-way agreement and lease authorization for the buried natural gas pipeline is under reconsideration. A comment period on the document closed in November, and we anticipate that Alaska will reissue the right-of-way agreement and lease authorizations in the first half of this year. With respect to the water right permits, last November, Alaska published a public notice for comment on Donlin's 12 applications for water rights associated with the mine site and transportation facilities. The comment period closed in December, and we anticipate that Alaska will issue the final authorizations in the first half of this year. The dam safety certification is a multiyear commitment for which activities commenced in 2019, but paused to focus on the 2020 drill program. The COVID-19 pandemic created significant concern in the Y-K region due to the interdependence of communities and frequent travel within the region. As shown on Slide 8, Donlin Gold partnered with TKC and tribal councils to coordinate food collection and delivery of supplies to the eight middle Kuskokwin villages. When we took the precaution to pause the 2020 drill program, Donlin Gold donated thousands of pounds of food from our camp and collaborated with Aniak, a regional hub to distribute food and supplies to residents homebound due to health issues and quarantine requirements. Donlin Gold also recognized the need in Bethel, the largest town in the region, and supported the Bethel Community Services Foundation, COVID response fund and the Bethel Community Services Foundation to help vulnerable youth. As noted on Slide 9, Donlin Gold worked with its Alaska Native partners, Calista and TKC, and other key representatives of the communities in the region, responding to the needs arising from the pandemic as well as in other areas such as environmental management, training, education and cultural initiatives. The Donlin Gold backhaul hazardous waste removal project in late summer was a collaboration with 28 community partners that resulted in the removal of over 45,000 pounds of hazardous materials. In the past three years, almost 200,000 pounds of waste has been removed from the region. We are also proud of the ongoing community engagement efforts and growing collaboration with Donlin Gold on the signing of six friendship agreements in 2020 with key communities in the project region. These agreements further expand on the long-term relationships already established with these communities and address specific needs, such as water, sewer and landfill projects. The ice road that connects the remote villages in the Y-K region, salmon studies and suicide prevention are among these many programs. Calista and TKC have been partners in the Donlin's projects since 1995. Donlin has life-of-mine agreements with both partners, who have been deeply involved and supportive from the start. We are thankful for their long-term support and commitment to the project and its continued success. We support their mandate through the Alaska Native Claims Settlement Act, as highlighted on Slide 10, to help them develop their land for the economic benefit of the region and all stakeholders involved. These owners have an interest in seeing the project developed. Over the past 25 years, Donlin Gold has worked closely with its Alaska Native partners, along with other key representatives of the communities in the Y-K region to effectively respond to needs ranging from environmental management, training, education and cultural initiatives. The commitment to healthy community was evident, as we've seen with the cooperative response to the global pandemic. These partnerships and the activities and programs we undertake together are illustrated of our commitment to the sustainable and responsible development of the Donlin Gold project for all stakeholders. On Slide 11, we highlight a few quotes from Calista and TKC. And with that, I'll turn the call over to our Chief Financial Officer, David Ottewell. Dave?

Thank you, Greg. Slide 12 highlights our operating performance. We reported a $33.6 million net loss in 2020, an increase of $5.8 million from the prior year, primarily due to the drill program at Donlin and higher G&A expense. Lower interest rates led to lower interest income earned on cash and term deposits and lower interest expense incurred on the Barrick notes. Regarding income taxes, we have elected to file consolidated return for our U.S. subsidiaries. This allows us to use operating losses against our income, resulting in a reversal of income tax expense in 2020. Slide 13 highlights our 2020 cash flows. For the year, we spent $26.6 million, $8.1 million higher than the prior year. This was due, again, to the increased dominant funding along with higher G&A spending and lower interest income. Donlin funding was lower than our original outlook of $20 million, primarily due to better than planned drill productivity and lower permitting administrative and community engagement costs. Our corporate G&A spending was higher than our original outlook of $11 million due to higher legal and regulatory costs. On Slide 14, we note our robust treasury. We ended the year with cash in term deposits of nearly 122 million. We also have 75 million from Newmont in July, and an additional 25 million due two years later. A further contingent payment of 75 million becomes due from Newmont if the Galore Creek owners approved the project's construction. We anticipate spending 31 million to 35 million in 2021. We put 18 million to 22 million to fund our share of drilling, permitting, and community engagement of Donlin and 13 million for our corporate G&A costs. Slide 15 presents the life of mine diagram per Donlin Gold is one of the world's largest open pit mining development projects. The time invested upfront to build a solid foundation from which to grow responsibly and sustainably has been critical to the project's success to date. And as Greg discussed, in 2021, we expect Donlin report the final lasting results from the 2020 drill program and integrate them into the geologic model. Complete additional drilling focused on the continuity and structural controls of the hydrate mineralization and evaluated the timing for the next step by new Donlin Gold feasibility study and engineering, which forms the basis of an execution plan and ultimately a construction decision. I will now turn the presentation over to Dr. Thomas Kaplan. Tom?

Thank you very much, Dave. Thank you, Greg. Certain things bear repetitions. When I speak about Donlin Gold to investors, I often ask the question, what other gold development stage assets in the gold mining industry compares in its combination of the following. Number one, enormous side. Number two, we all know the greatest team, and what we're talking about here is very high grade for an open pit, large open pit mine, with the concomitant fact that you're going to have low production costs. The exploration potential is extraordinary. We're finding it simply in the insole drilling. But, when did you realize that the existing resources are only on the 3 out of an 8 kilometer mineralized belt, 3 kilometers out of 8 kilometers, and that 8 kilometers itself is less than 5% of the total land package. You realize that, the blue sky and the exploration potential at Donlin is arguably better than any other gold mining project, certainly in a safe jurisdiction. The production profile of Donlin would make it in either one or two stages either the first or second largest gold producing mine in the world. And by gold producing, I mean, purely gold without base metals. It's only comp would be -- project, and that one is being developed in Russia. A mine life measured in decade, that's the basis, that's the foundation of all great mining companies. It means that, you do not have to continue outside of your own backyard in order to be able to sustain and very possibly add to growth. Our local and industry partnerships are superb. We are on land is Greg referred to, which is already designated legally, bylaw for mining. And of course, we're partners with great native corporation organizations, plus one of the leading gold producers in the world, Barrick Gold. And last but as far as I'm concerned, really the gating factor for investing in precious metals mining today. We have the safety of being in one of the world's premier mining jurisdictions. Even if there were other gold deposits, not very many of them would be able to combine several of the attributes that I just discussed to combine all of them and yet be in a jurisdiction that is the second largest gold producer in the United States after Nevada. This to us is why we call Donlin to the benefit of our shareholders, and also those in Barrick the Holy Grail. Next slide please. Let's talk about some of the backdrop. By background, as you know, Greg is an engineer. He is one of the premier mine builders and operators in the space. He and our project manager, Richard Williams, they know how to really build great mines. That's not my forte, mine is being able to anticipate future supply demand imbalances and try to get ahead of the curve. What we see in the gold space is that, even without any of the absolutely numerous macro factors that favor gold, if you only going to look at it in terms of the industry fundamentals themselves, you would have to say that this is a time when you want to pick the next-generation of winners. After the nuclear winter that the gold space went into before, I think that if you find those stocks, which will be the go-to stocks, that is those that have great assets in safe jurisdictions, you're going to have the opportunity to make a real killing. The fact is that within the gold industry itself, there's been a decline in discoveries and grade as global production has peaked. Barrick is calling for a 5% annual decrease in gold production for years. Existing mines are being depleted and grades are declining simultaneously with very few, if any, new discoveries being made to replace them, certainly, nothing that we would consider to be substantial. And when you consider that it now takes, on average, between 15 and 25 years to develop a new mine, the horse has really left the barn. In terms of existing mine production, 26 of the world's largest miners are forecasting that existing mine production is going to decline 13% by 2022 and 47% by 2027. $130 billion in cumulative CapEx is forecast to sustain current bold output to 2026. And the truth is that gold supply from stable jurisdictions represents a small percentage of that total production, many of which, in terms of those outside of the jurisdictions that we believe in. I actually believe are going to be subjected to far greater nationalization and confiscation, whether it be de facto or Dura. Next slide please. This under investment increase output growth. In 2012, mining companies began implementing aggressive cost cutting measures and curtailing expansion plans in their effort to protect the margins. As their shareholders, who were quite fed up with misallocation of resources, abandoned growth in favor of maximizing returns from existing operations, perfectly sensible thing to do for a short period of time. The results however, is that exploration budgets for gold fell by 65% from a peak in 2012 to a 10 year low in 2016 according to S&P Global. Exploration budgets increased in 2017 and '18, the current gold exploration budget remains 50%, that of the 2012 level. Now remember, I have to continue repeating this, because it's shocking. Even if you found multiple mines, which could move the needle and with all due respect to Donlin and Sukhoi Log, we're really not going to move the needle that much in terms of the bigger goal supply balance. The truth is that the shift to lower reward late-stage in mines by exploration programs means that it's going to take anywhere from 15 to 25 years for other projects further in the pipeline or view discoveries to be able to get to market. Over the past 10 years only 25 major new deposits have been identified, containing 153 million ounces of gold, which represents only 7% of the gold discovered over the past 30 years. No major discoveries have been made in the past three years. Facts are curious things. High-quality assets in fact are very few. Off 135 assets, not yet in production, only 30 have greater than 10 million ounces of gold in reserves and resources. Only nine of these assets have a grade of one gram per ton or greater. Next slide, please. So, in terms of size Donlin is already a category killer. They're only a couple of projects in the worlds, ours in Alaska, Sukhoi Log in Russia, which obviously is parked in similar geology. Alaska once having been part of Russia itself, but I don't believe that there's ever been a gold mine, which has begun with 40 plus million ounces of gold. And once again, that's only on 5% of the land package when we know that at least double the endowment is mineralized, in terms of the kilometers. So this is a great asset in terms of size, but size isn't everything. Please continue. Let's get back to grade. What grade means is quality. So, when you're a quantity, that's a box that you can check. But in today's world, grade is king. And when you're sitting on a grade, which very will be higher than this that remains to be seen, but when you were already sitting on the grades, a two and a quarter grams per ton and that's over twice the industry average at a time when grades are falling and will fall through one gram per ton, you have an enormous advantage. The reality is that, when you're talking about cost structures, if you've got two grams of gold and someone else has one gram of gold, all things being equal, your cost of production per ounce of gold is going to be half. That is a great differentiator. When it's not just something that's going to be around for four or five or six or eight years, for something that could be around for 40 or 50 or 80 years, you have a category killer project. Next, NovaGold is very privileged to be able to share with Barrick, one of the mines which will be producing over a million ounces of gold a year, hopefully just in the first Phase III. It could get considerably larger than that. This is really a unique proposition. If you consider the Barrick, the whole Tier 1 asset is one that produces half a million ounces annually, you can obviously understand that the scarcity value of one that produces twice of that, and at a grade that is double the industry average and located in a jurisdiction where when you wake up in the morning, whatever you thought you owned the evening before you still own. And you've really got a wonderful, wonderful story, and you have the makings of a go-to stock for smart money. And as we've been permitting and taking this company up the value chain, um, it's something that will be the premier Gold development story, when gold it embarks upon the next leg of what we expect will be a continuation of a rip-roaring bull market. Next, you know, those of you who know me know that I make my fortune in the developing world, starting in South America, in Bolivia then in Africa, in Zimbabwe, South Africa, Congo. At one time, I was the largest holder of mineral rights throughout the entire Islamic world from Mauritania through to Pakistan. A number of years ago, I decided that as much as I gained from this experience, and hopefully was able to create opportunity for a lot of people on the way, not just investors, but other stakeholders, I believe that that year is over for investors. If I didn't, I never would have withdrawn from these other countries because I had the experience to be comfortable there. I just unfortunately believe that the rule of law is key and that institutional investors when presented with world-class assets and world-class management teams are going to be asking the brokers who introduce them. That's great. I'm really interested to meet them. But just tell me one question. Where in the world are they? Because I think that mining has become like real estate, location, location, location. You want to be in a place where if you have a great asset that's going to give you leverage to an underlying theme, you are one day going to be able to ring the cash register and reap the fruits of that leverage. If I'm right on where gold is going, if I'm right on the macros and the importance that gold is going to play in the coming very soon world order of currencies. I think that you're going to see more and more that gold -- and to a certain extent, silver will be declared strategic assets. If you ever believe that there will be a significant recession again, then my level of certainty in that respect will probably rise to that of metaphysical certitude. Right now, I'm hoping it's not the case. I think that we're in a situation where gold does well. Everyone should be able to do well. But if other things happen in the world that, unfortunately, I see unfolding, gold may be one of the only things that does well. And if that's the case, the chance that gold mines will be untouched in parts of the world where the rule of law is a novelty, I think are very unlikely. Next, the bottom line to that argument, in fact, the bottom line to the series of arguments that I've just made about the significance of having an asset that moves the needle and size, the significance of grade and what that does to the attractiveness of an asset and the cost structure of an asset, and of course, the significance of jurisdictional risk. What that means is that all ounces are the same, not all ounces are created equal. If you've got great ounces in -- assuming you do have great ounces in a place where jurisdiction is challenging, it's not the same as if you're in Nevada or if you're in Australia or, of course, if you're in Alaska. And this is something that I learned a long time ago. I'm always attracted to assets, which have optionality value. And there were days in the past where I found that in many different parts of the world. If I'm right on how the world is developing, that optionality value is ephemeral because by the time it becomes something that can be realized, somebody will have made you an offer from the government that you really can't refuse because at the end of the day, mining companies aren't in a position where they can move from a safe place to a new place. They're not like textile companies that can move their factories to lower wage jurisdictions or semiconductor companies that can move to places where they're given land and subsidies. What you have with the mine is you have a hole in the ground. And you'd better be sure that the people who are your hosts are very, very happy and contractually obliged to live by the agreements that they've made with you. There really aren't that many jurisdictions in which you can make that characterization. Next, I've obviously spoken about exploration before, but I have to tell you that when you have the ability to be able to deliver great exploration results. There comes a time when the kind of results that we've been issuing with Barrick would make our stock double or triple. That era is coming. And it's not just simply because retail investors seem to have suspended their disbelief over certain momentum plays. As the gold bull market takes off and as people do realize that exploration is something that very few companies really have easy access to and certainly not the kind of drill results that we are almost taking for granted, you have to recognize that those things will add kerosene to the fire when stocks are delivering great results. We believe it's yet to be seen. It's the ultimate forward-looking statement that considering that only 5% of the Donlin property has been explored, and that's really a function of the historical blowback from Barrick's failed takeover attempt in 2006. We now have an explorationist at the helm of Barrick, a great one and a geologist for that matter, who's been out to see the site. I think that we're going to be able to have opportunities to be able to show that we're really just scratching the surface in terms of the potential at Donlin. We call it the new Nevada, we're the new Carlin. And to be able to be a 50% owner with a great company like Barrick on the new Nevada is an enormous privilege. Some people, obviously, will choose to get that exposure through Barrick. They're big. They're diversified, extremely well managed. Others will choose to be able to have a pure-play on Donlin as the next Nevada and in a safe place that is the second largest gold producer in the United States after Nevada. And then there will be others, I hope, who will see the opportunity and want to own a piece of both companies because the leverage to gold in a place where you can keep it is simply extraordinary. There aren't that many gold discoveries of 6 million ounces over the last few years. We have 6 million ounces, that's in inferred adjacent to the pit. This thing has got real octane going for it. And as someone who's made his money through the drill bit and surrounded himself with some of the greatest geologists in the world. One of them, in fact, was the one who said he thought the next Donlin would be at Donlin, we're extremely happy with what the future holds for us in this district. Next, in terms of gold itself, having been called gold's evangelist on many occasions, I see no reason to change our outlook to the contrary. Comments, which might have raised the brows a couple of years ago about the inevitability of a revaluation of gold no longer do. I'm using the quotation of Mohamed El-Erian as a very good example of this because I know Mohamed. And in addition to being a really, really fine man, he is not by any stretch of the imagination someone given to unfounded pronouncements. He's a very thoughtful person who speaks only after he's really thought something through. And I think he's right. Gold is evolving into a must-have asset. Investors went from treating gold as a short-term momentum trade, that's if they were willing to invest in gold at all, of course, to seeing it more as a legitimate stand-alone option in long-term portfolios. Well, if he's right, and I do believe he is, the reality is there just isn't enough gold to go around if you were to get even a 1% allocation by family offices and institutions into gold for its value as a store of value and other facts that we hold dear. Next, over the past year or so, I've pointed out that it's no longer the case that if you were to go on CNBC, for example, and say that you're constructive on gold that people will throw things at you, either literally or figuratively. You can talk about gold constructively and really have a conversation. That is a prerequisite for a long-term enduring bull market. We are nowhere near gold being an investment that is a crowded trade, not remotely. But we are in an investment, which has attracted some smart money and some smart money observations. I'd like to mention a few quotes that we've added to this grouping over the last while. Here's Ray Dalio. And Ray has been constructive on gold for quite a while now. And around the time of the bottom, he started to speak about it more openly. In a world of ongoing pressure for policymakers across the globe to print and spend zero interest rates, tectonic shifts in where global power lies. By the way, that's a nice, very elegant code word for the rise of China. And conflict, gold has a unique role in protecting portfolios. It is wise to hold some of what central banks can't create more of. I would add that it's wise to hold something that central banks do regard as a currency, even if it is demonetized. They're comfortable with it and of course central banks have been adding to their gold reserves. We had a phenomenal fact several weeks ago where Russia was revealed to have more gold and its reserves than treasuries. This is extraordinary. I have zero doubt that the Chinese are also working very possibly in concert with the Russians, on ways to be able to use gold to chip away at the dollar has been the world's reserve currency. More sanguine that they're going to be able to do that, over the passage of time, for many years long gold long dollar. I would say watch China, China is internationalizing the renminbi and China is also the largest producer of gold. They have a best interest in gold remaining interesting, as does Russia, which now has overtaken. Australia is the second largest producer of gold. I'd like to highlight a comment by the man who I regard as the Dean of gold mining investments. John Hathaway, who said, recently, a cursory inspection of the U.S. fiscal situation suggests that the U.S. dollar deserves to rank high on the endangered species list. It's beautiful turn of phrase. We believe that now is the time to start layering in gold exposure, not when the rest of the world tries to do so. He's very right, there will come a time when the assets that people have here to for love to hate and hate to love will become extremely sought after any of you want to see what could happen to gold, and watch some of the unbelievable anomalies that are taking place in the U.S. stock market today. In truth, I think that what we're seeing is a global phenomenon and I think it points to a very, very bullish scenario with regards to the revaluation of gold and I would also say, silver. A comment by [Paul Finger], also from the past year, this was a perfect environment for gold to take center stage. He wrote, as spot gold traded at around today's price a little bit less. Fair value for the metals the fund believes gold is literally or should be literally multiples of its current price. I agree with him. Next slide please. For all of the reasons which are cited that makes NovaGold so attractive. The truth is that if you just look at what's going on from a macro and micro standpoint, we're dealing with a perfect storm for gold. As an asset diversifier you really have to own it. The safe haven appeal makes more sense than ever before. Currency debasement, which obviously has been used as the primary factor for those who are bullish on Bitcoin is the, now a global phenomenon. The central bank purchasing means that central banks will be competing with private investors for that gold which can be acquired at certain levels. Gold provides inflation, deflation protection and emerging market demand and our view is only going to go up. Meanwhile, for the reasons I've decided, when recovery rates, inadequate exploration, decreasing for grades, rising production costs, jurisdictional risks, which means that mines that people thought might come online probably won't. All of these supply pressures, which are leading to a decrease in mining supply at a time when you have demand drivers arguing for higher prices. This is a beautiful picture. Next, perhaps it's not surprising that with all of the attributes that we have going for us at Donlin. Our institutional shareholder support has been excellent. Management has been increasing its share ownership in the Company. Our 10 largest shareholders, some of the smartest money in the world, represent 60% plus of shares issued and outstanding, that number may actually be higher now. But we'll see, meanwhile, our named executive officers share ownership has increased to 2.7 million shares since joining the Company. Obviously, my family holding company, which is my family, plus employee capital, and the capital of two of the world's largest sovereign wealth funds, as well as a very large prominent private family office is the largest shareholder, followed by fidelity, John Paulson, Paulson & Company, BlackRock. And now the Saudi Public Investment Fund, we are extremely proud that at a time when Saudi Arabia was monetizing it's profits from having invested extremely acutely during the crash earlier last year. We were the only stock in the third quarter that they were actually revealing holdings for. We welcome the Public Investment Fund and look forward to having a wonderful alliance with them going forward. But when we look at our other shareholders than First Eagle, who are our mines, one of the smartest investors in the gold mining space, Vanguard, EXOR, Amiral Gestion in Europe, Sprott Asset Management, it's a great shareholder base and we are very proud to be serving you. I'm often called the owner who lives above the store. And I am very glad to be a servant to such great smart and loyal shareholders. Next, so, summarizing the NovaGold story, Donlin is a Tier 1 asset in a Tier 1 jurisdiction, and we are a pure play on this new Nevada. The asset we believe, in terms of its aggregation of superlatives is unique, with very strong investor friendly attributes. You've even just heard the Chairman referred to himself as a servant of the shareholders. And that's because that's the way I view myself. That's the way management's views themselves. We believe that we're one of the most transparent in signaling our strategy in the gold mining space. We believe that we have delivered on all of our promises in the eight years since 59 years almost since Greg Lang and I became CEO and Chairman respectively. So, here are the attributes, the size enormous, the grade, extraordinary. The exploration potential, we believe the best in the gold space, certainly in a jurisdiction where you can sleep easily at night. Indeed Alaska is a premier mining jurisdiction with respect to socially and environmentally responsible mine development. Our partners, the native corporations really couldn't be greater and more supportive of what we're all trying to do. And of course, Barrick enjoys many, many superlatives in its own, right? Our leverage is enormous, just with the existing endowment. We believe it's worth tens of billions of dollars and half of which is to our credit, half of which to Donlin. We have a balance sheet with $122 million. When you take into account the notes receivable, including $75 million in the third quarter that we expect from -- we're going to be one of the only gold mining companies with a stronger balance sheet at the end of the year than where we started, without having to have had to recourse to shareholders. Our chief federal and state permits are in place. The management and Board have a successful track record of building and operating mines and to our shareholders, I can't thank you enough. The friendship and expression gratitude is the memory of the heart, and you certainly have mine and Greg's and all of the Board's and management for your steadfastness. Thank you.

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from is David Lesinski [ph] a Private Investor. Please go ahead.

Good morning, gentlemen. Before I start any of the questions I had, I just wanted to take note that SLV which normally trades the silver ETFs. It normally trades about 26 million shares a day, traded 53 million shares in 45 minutes this morning, which means this ready crowd obviously sees the short position with JP Morgan on silver and gold. And we all know that COMEX has been dictating the price of the GLV and the SLV for 30 years. Now, if the SLV is accumulated, this is the first time initiated, the COMAX is going to have to follow the ETF. So, we reverse roles and I find that a standing and interesting trend. Because of stuff like this that's happening and the changes that are happening, I think gold feeling a lot higher, and I also would robs to see Mark Breslow, just say, We're going to start foundation construction or anything to start getting ready because it's coming. And I'm really anxious to say this mind, at least some construction starts. Now, the other question I had was, is it windy at the Donlin goldmine? Is there a lot of wind because I was thinking about the possibility of wind those for energies? As often thought of?

I'll take that question. First off, thanks for joining our call this morning. Over the years, we have looked at different energy sources including wind, and we found this -- and I think the case is still true with current gas prices that natural gas is the most cost effective means of generating power at the Donlin site. But I think as we move into updating our feasibility study, it's always appropriate to revisit and challenge any of the earlier assumptions. And I think we'll do the same with wind and other energy sources as we're moving.

The one caveat to starting some semblance of construction as Mark Bristow was to say, to start with jump I would say, five to eight bucks in a day on that, just that simple statement. The other thing is, I want to point out, there's a lot of talk about Bretton Woods II meeting by Christine Lagarde. And if something like that was going to take place, and all the G20 leaders was sitting around the table, I think the first question I asked would be. What are the gold holdings? And I think at that time, China will finally disclose that they have 25,000 tons instead of 1900 tons like they say, and that'll be the time that they will come out. I thought just out with a Chinese for 40 years, and I know how they buy, I feel them proud, I think we're doing. It's actually what his favorite when I saw them. And they are the market when they come in and buy for a period of time to drive the price up, and they back away to drive the price down and they come back in power and they didn't think they with gold and they're not going to announce their holdings, because they were announced today that they have 20,000 tons. Gold is at $1,000 today, it's just crazy what's going on, but I'm just so anxious to see this progress, at least for some night guys, let's get going. Anyway, that's all I have to say, unless you have any comments.

Thank you very much, David, for your stalwart support. And I think it's fair to say that we're all on the same page about what we're going to see happening in the gold market, the silver market indeed, and also at Donlin, when the time comes and we're obviously moving in the right direction. The geology is allowing us to be able to say hand on heart to Donlin this clearly a gift that keeps on giving. And I think it will be in the right place at exactly the right time. Thank you, David. I think we should move to the next call. We really need to move on. We really need to move on. I don't want to lose people but I'm certainly happy to answer any additional questions you have, when there are no more questions, if that's okay with you.

[Operator Instructions] Our next question comes from Lucas Pipes of B. Riley FBR Securities.

I have a few for Greg and then one for Tom. And first, Greg, you had additional drill results out recently, can you maybe just give us your quick impressions from this latest batch? And then what can we look forward to in terms of the timeline from here to revise mine plan and such so that some of the earlier comments regarding development, that we can check those boxes? So really appreciate your thoughts and color on this.

The drill results, frankly, I'm very pleased with them. And whenever you embark on a drill program, you take on an element of risk. And I would say, across the board, we've encountered great sicknesses exceed that what we expected in the model. And that's always a very comforting feeling. And across the board, we're seeing slightly thinner intervals, but it's significantly higher grades, and certainly we'll take the grade any day. So we are really pleased with the results we've gotten today. As we never take those kinds of results for granted and we should have in the last few days in the next month or so, and look forward to providing an update. For the next, as a turnaround has been slow this year, because it COVID, but we'll be as we get the assays in we update the model. And once all the drill results are in we'll work with there to update our understanding of the impact on the resources and reserves, but this drill program has had. So that'll take us well into the second quarter of this year. And I think that's the time where we're, I think we're going to have a small follow up program to some of these really intriguing intercepts of 10 and 20 grams that are somewhat unexpected, we're going to do a little bit of follow-up drilling on those, and I think that should wrap up all of the drilling the owners feel we need to prepare a model that's one need to take forward with an updated version of the feasibility study. So in the second half, I think we'll be working with our partner to conclude the last of the trade-off studies we need. And I look forward to updating everybody, as those studies are completed. So, I think, yes, in spite of COVID, I think will have some pretty good news and key milestones coming out throughout the first half of this year.

Very helpful, I appreciate that additional color and look forward to, to all of that. Tom, you commented a little bit on, what we're seeing in the market more broadly. I think you called it at a global event or something along those lines. But can you -- you've seen a lot of cycles, you've seen a lot of interesting markets, made a lot of money anticipating unusual events. And clearly we're in some uncharted territory here. So I wondered, if you could maybe elaborate on what you're seeing here and what this might be a symptom of, and you touched on what this might mean for silver and gold. And I just wanted to ask you if you could share a few more thoughts on that? Thank you.

Well, you know me. I could go on this for long time. Suffice to say that you're pretty much spot on, when you said, we're in unchartered waters. It's terra incognita, but not only in terms of obviously the health crisis, which could develop in many, many different ways, if it becomes pandemic. The social displacement, particularly in the West, the developments of January 6th, I think one day will be seen as important in terms of its implications for America's power and therefore the rising power of other countries at its expenses as December the 7th was in a different way. We have the situation where the Chinese are the only country, which have come out of 2020 actually growing. And you know, you actually heard me say once before, when you asked me to predict a scenario that wasn't on the horizon, but from a historical standpoint. And I mentioned that, people forget that, the great depression and the political and military consequences of that, actually pretty much began in 1929 with the American stock market crash. But lo and behold, a decade and a half later, America itself emerged as the global hedge as a consequence was something that started in the United States, but the Americans do this intentionally, of course not. Well, my thought was that, we were going to see an economic crisis come out of China that would have a cascade effect on the West and because the Chinese and as any great power rising are going to have multiple boom-bust cycles, which they can survive politically, the Chinese would emerge actually stronger from it, whereas the West, which as we can see has a very fragile political system at the moment, would be weaker. And I used the 1929, 1945 analogy of the United States. So, whether or not you believe the Chinese did any of this by position and I don't, not the conspiracy period. When you look at who benefits from it, they're benefiting from this displacement that was caused as a result of some really, really, really, foolish and dietary habits with regards to -- And they're emerging as the winner to the extent that you can actually use that expression in such a horrible era that we're just looking at it analytically. United States is far weaker now than it was four years ago. And so as Britain, France is muddling and sweaty fruits. But you have China stronger, you have Russia which has been pushing for periphery, Turkey, Iran. It's a very dangerous world. And normally, I like to be long accidents but I don't like to be long crises and the opportunity for a serious crisis to emerge extremely quickly, in many, many different parts of the world from the South China Sea to the Baltic. You have a war taking place in the Middle East already, between the Israelis and the Iranians. 1000s Israelis sorties against the Iranians in Syria and Iraq taking place that's a war didn't work going on in Yemen, between Saudi Arabia and is effectively in Iranian proxies. We a lot of wars going on and the prospect for escalation is there. Now, I'm not saying that that's a reason to own gold. I've never been a believer that you have to own gold as catastrophe insurance. I'm a believer in economics one on one. And the truth is that if you would superimpose the multiplicity of black swans that exists economically, geopolitically, militarily, on to the incredible distinct delivery in between supply and demand, the mining industry and the jurisdictional risk. You really are looking at an accident that's already happened. It's an implosion of the industry in certain respects, which is very bullish for gold and bullish for those companies that can profit from these factors. It's happening in plain sight. And so you really, you want to be great assets and safe places, but that's not the most important thing. We have kids, we have people that we love, and the world is a far more dangerous place now than it was before. And I do not see anything on the horizon, which is going to reverse that trend.

I really appreciate your very.

Did I answer your question fully?

Yes, I mean, I think this is such, as you said at the outset. this is something that we could discuss for over many hours, but I really appreciate your thoughts. And it's uncharted waters. And I really appreciate your, you've seen this and you have studied history, and so your perspective is invaluable.

Well, if I would leave you with this, I would say that, obviously, there are lots of questions about where the dollar will go, I made a number of comments about what I think the Chinese are thinking. And if I were they, I would be doing the same. The wills powers and important thing. China is not an emerging country. It's a country that's submerged for a brief period, and it's coming back. Obviously, I'm pro American. I'm not someone who's looking at the Chinese model and saying that you be emulated. But I also just have to be very objective. They have a model. They are a larger trading partner to more countries than the United States. They certainly exercise, not just because they're intelligent, hard working, but they are competent, more competent than we appear to have been in a crisis. And I think they're taking note of that I think the Russians are taking notes of all of this. And I don't see an end in sight activity now to the economic let's see here, I don't see an end in sight to money printing. I think that the concept of money itself is being reevaluated, one of our previous caller, David referred to a second Bretton Woods. People forget that John Maynard Keynes, actually, we have to include gold in Bretton Woods, because whatever I may think of it, people do see it as a store value, and it has a place in the global financial system. I do believe that the Chinese already own more gold officially, the United States, they just haven't revealed it. And I do believe that they have a vested interest in a rising gold price, as do the Russians. And both of them have designs on dollar hegemony, because dollar hegemony is crucial to America's ability to create, to be able to project powers, not simply aircraft carriers, by the way we can probably know these days we saw. But power is economic to the East is palpable. And if anything, we're seeing it accelerated. It's not just the rise, or the ascendancy of China, it's the decline in absolute terms of the United States. That's a challenge. It can be reversed requires a lot of civic virtue, which something they trigger. Unfortunately, those kinds of things are usually triggered by dire consequences. Up until December 7, 1941, the vast majority of the American public did not want to get involved in the Second World War. So the greatest generation became the greatest generation, because of Pearl Harbor. I hope that we do not see such a thing happening. But unfortunately, this is the way of the world. And if I'm right, then China is what Dean Martin [ph] used to say Frank Sinatra [ph]. He used to say, in Frank's world we're just living in. Well, unfortunately, I think that that's what's happening now on the geopolitical stage, and we should count our blessings suffice to say. By the way, you know me. You know that I'm not a pessimist by nature. I'm only someone who is optimist. And if anything irrationally exuberant, would look at 1,000 to one observe, 10,000 to one observe drove for a brand and say that's all we got. So I don't, I'm not someone who shy away from those things. I don't own goals, because of any of those factors. I own goals, because finding more effective burning through reserves than the greatest collapse. And so that's good enough for me. But as somebody who is trying to prepare for my children's future. I'm watching what's going on around the world very, very closely. And I think that people should not be complacent. And they better think about what the world is going to look like. What money is going to look like, obviously, but that's not the most important thing. The most important thing to teach your kids ethics and honor and in the world, which is [audio gap] Thank you. Take care and feel free to reach out anytime. If you want to continue this, you might bring a bourbon with you however by the time I'm done.

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

Well, everyone for joining our call this morning, and we look forward to updating you on our progress in the coming months. Stay safe. Thank you.

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