Novagold Resources (AMEX:NG) held its second-quarter earnings conference call on Wednesday. Below is the complete transcript from the call.

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Summary

Novagold Resources reported a fiscal 2026 second-quarter net loss of $25.5 million, or $0.06 per share, marking a decrease of $28.8 million from the prior year due to a $39.6 million non-cash charge in the previous year.

The company advanced the Donlin Gold Project, focusing on completing the bankable feasibility study by 2027, with significant progress in integrating major work packages and technical streams.

Novagold's cash and term deposits decreased by $22.3 million to $370.2 million, reflecting funding for Donlin Gold and corporate G&A costs, but the company remains well-funded for upcoming commitments.

Permitting for Donlin Gold is ongoing, with key regulatory processes affirmed and anticipation of a decision on the Clean Water Act section 401 certification within a year.

Management highlighted strong collaboration with local stakeholders and continued support from shareholders, emphasizing the project's long-term value potential and strategic importance.

Full Transcript

OPERATOR

Thank you for standing by. This is the Conference Operator. Welcome to the Novagold Resources Second Quarter 2026 Financial Results Conference call and webcast. As a reminder, all participants are in listen-only mode and the content 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 call, you may reach an operator by pressing star then zero. Webcast viewers may submit questions through the text box in the lower right corner of the webcast frame. I would now like to turn the conference over to Melanie Hennessey, Vice President, Corporate Communications. Please go ahead.

Melanie Hennessey, Vice President, Corporate Communications

Good morning everyone. We are pleased that you have joined us for Novagold Resources' 2026 second quarter webcast and conference call and for an update on the Donlin Gold Project. On today's call, we have Novagold's President and CEO Greg Lang and Peter Adamek, Novagold'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 3, any statements made today may contain forward-looking information such as projections and goals which are likely to involve the risks detailed 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 Novagold's President and CEO Greg Lang.

Greg Lang, President and CEO

Thank you, Melanie. Why Novagold Resources? I think it's useful to reflect on the value created through the company's long-term commitment to advancing the Donlin Gold Project. Over the past two decades, extensive drill programs have significantly expanded Donlin's reserves and resources. A key milestone for the company occurred in 2008-2010 when Electrum and Paulson became major shareholders, a position they hold to this day. The company successfully advanced permitting for the Donlin Gold project, representing an important step in its development.

About a year ago, Novagold, in partnership with Paulson, acquired Barrick's interest in Donlin Gold for the first time in 13 years. The company went back to the markets to fund the purchase of its increased stake in Donlin Gold, the bankable feasibility study, and repay the promissory note to Barrick. This transaction simplified the ownership structure and unlocked meaningful value for shareholders. These events, combined with the project's attributes of scale, grade, location, and production profile, underpin the value creation and incredible investment opportunity.

Many of our shareholders view Novagold as an unexpiring 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 0% discount rate or about $20 billion at a 5% discount rate. This projection underscores the substantial economic potential of the Donlin Gold Project in the current market environment.

As highlighted on Slide 7, Donlin 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 life. Looking at Slide 8, Donlin 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. The project's 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.

Slide 10 outlines Donlin 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 responsible resource development, providing a stable and supportive foundation for long-term mining operations. To date, ongoing collaboration with state and federal agencies has been constructive, with 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 open and constructive communication with him and his team.

On slide 12, we highlight our long-standing collaboration and ongoing engagement with Calista and TKC, whose roles as private landowners and owners of the mineral rights are integral to Donlin's success. Their shared commitment to responsible development helps support 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. Novagold also takes pride in maintaining strong governance practices across all aspects of board oversight and governance. Moving over to Slide 14, Novagold is supported by a seasoned management team with a proven track record in mine development throughout the Americas. This is further strengthened by the Donlin Gold Project execution team led by Frank Arques, along with contractors like Fluor, WSP, Worley, and Hatch. They all bring extensive experience, positioning Donlin to advance efficiently, responsibly, and with a strong focus on project execution.

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

Peter Adamek, Vice President and CFO

Thank you, Greg. Turning to our operating performance on Slide 16, Novagold reported a fiscal 2026 second-quarter net loss of $25.5 million, or $0.06 per share. Novagold's 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 Donlin Gold due to ongoing bankable feasibility study activities and higher G&A expenses at Novagold.

The company's share of Donlin 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 Fluor, WSP, Worley, and Hatch to advance the Donlin Gold Bankable Feasibility study. Unlike the comparative prior year period, the company's second-quarter 2026 results also reflect Novagold's 60% interest in Donlin Gold. G&A expenses at Novagold increased in the second quarter of 2026 by $3.1 million from the comparative prior year period, primarily due to higher professional fees, share-based compensation, and employee compensation.

Professional fees were elevated in the second quarter and in the first six months of 2026 but remain generally in line with quarterly cadence expectations that are expected to decline during the remainder of the year. On Slide 17, our treasury comprising cash and term deposits decreased by $22.3 million to $370.2 million during the second quarter, reflecting Donlin Gold funding of $16.3 million and Novagold's corporate G&A cost 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 Donlin Gold 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 quarter sits at a very robust $370.2 million. Novagold is well-funded, enabling us to complete the Donlin Gold Bankable Feasibility study in 2027, exercise our option to prepay the Barrick Promissory Note later this year, and cover our corporate G&A cost for at least the next 12 months.

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 to discuss the second-quarter highlights.

Greg Lang, President and CEO

Thank you, Peter. I will now review the key highlights and activities from the second quarter as highlighted on slide 20. Donlin Gold continued to extensively engage with government and regional stakeholders and support local programs across the YK region. Key focus remained direct engagement with regional communities where we conducted outreach alongside Calista and TKC to strengthen relationships and to support ongoing dialogue. The Subsistence Community Advisory Committee met a few times in the first half of 2026.

The latest meeting focused on subsistence in the Barge Communication Plan. The Donlin Gold team also participated in several major Alaska industry and legislative events, including Alaska Day on the Hill and the Alaska Mining Forum, along with 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 US Senate campaigns and the YK Regional Health Board to ensure their continued awareness and alignment on project activities.

All of these efforts support Donlin Gold's long-term objectives of advancing workforce development, strengthening regional economic participation, and progressing the project in a responsible manner. Slide 21 highlights the key technical updates and accelerating momentum achieved in the second quarter, marked by meaningful progress across all primary work streams. Under Fluor's leadership, the integration of major work packages and technical work streams with specialist contractors WSP, Worley, and Hatch are progressing to support the Donlin 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 Fluor 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 the targeted completion in 2027.

Building on this momentum, Donlin 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, Donlin is increasingly well-positioned for its next phase of advancement. Supported by a series of important recent milestones, Donlin 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 Calista, TKC, local communities, and government stakeholders as it advances toward the next stage of project development. We deeply appreciate the continued support and confidence of our long-term shareholders, some of which are shown on slide 23.

Novagold remains committed to responsibly advancing the Donlin Gold Project and achieving key milestones while fulfilling all its commitments to the local communities. We extend our sincere appreciation to our shareholders, stakeholders, and our Board of Directors for their steadfast trust and support, and we express our deep appreciation to the Donlin 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 distinguish Donlin 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 grading 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.

OPERATOR

Thank you. 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're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. Webcast viewers may submit questions to the text box on the lower right corner of the webcast frame. The first question comes from Carlos d' Alba with Morgan Stanley. Please go ahead.

Carlos d' Alba, Morgan Stanley

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 more just in the fourth quarter? That'll be my first question.

Peter Adamek, Vice President and CFO

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 in the third quarter of this year.

Carlos d' Alba, Morgan Stanley

All right, thank you, Peter. And maybe Greg, do you have a sense already as when in 2027 you may finish the DFS or is it too early to tell?

Greg Lang, President and CEO

Thank you for joining the call this morning. Of course, we've guided that we expect to finish the bankable feasibility study in the first half of 2027. The work is proceeding with Fluor, Worley, DSP, and Hatch all contributing their information to the study. So it's progressing as we expected. So we'll look for something early in the first half of next year.

Carlos d' Alba, Morgan Stanley

All right, thank you, Greg. Good luck with everything.

OPERATOR

We have another question from the audience. The question comes from Fred Bolton with BMO Capital Market. Please go ahead.

Fred Bolton, BMO Capital Market

Hi, good morning. Thank you for the presentation. Greg and Peter, just one question. Are you able to give us a bit more color on how finance industries are going?

Greg Lang, President and CEO

Sure. Frederick, thanks for participating in our call this morning. 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 coming weeks. But it's moving ahead as we consider what options are ahead of us for financing Donlin.

Fred Bolton, BMO Capital Market

Okay, thank you very much.

OPERATOR

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

Greg Lang, President and CEO

Well, I think I'll break it down into two pieces. I think the first one is the timing. I think as you know, as we've mentioned on our call, our main focus is completing the bankable feasibility study and that's about a year out. Then we will include in the study an execution plan and we'll be able to provide significantly more detail on the path forward for the Donlin project in conjunction with the completion of the feasibility study. So that's moving ahead.

And the timeline on financing, as I mentioned earlier, we've engaged financial advisors and we'll be updating the markets in due course.

OPERATOR

The second question is from Mr. Fritz. Could you comment on the expected timeline regarding the Alaska Supreme Court decision on the water quality certification? In particular, whether this potentially remains pending beyond the proposed completion of the DFS?

Greg Lang, President and CEO

I think it's important to remember that there were three cases before the Alaska Supreme Court that worked their way all the way to the Supreme Court. Two of those have already been ruled on in favor of the Donlin project and the permitting agencies. The final case is regarding the 401 certification. 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 through the permits cases influence our thinking. No, they do not. And I expect that they will be resolved, you know, sometime approximately when the feasibility study is due to be completed and certainly before a construction decision is made.

OPERATOR

Great. I believe these are all the questions we have online. Aisha, unless you have something else on your side.

Aisha

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

Greg Lang, President and CEO

All right, well everybody, we appreciate you taking the time to join the call for Novagold. Thank you.

OPERATOR

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

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.