Categories Earnings Call Transcripts, Industrials

Novagold Resources Inc  (NYSEAMERICAN : NG) Q2 2020 Earnings Call Transcript

NG Earnings Call - Final Transcript

Novagold Resources Inc  (NG) Q2 2020 earnings call dated June 25, 2020

Corporate Participants:

Melanie Hennessey — Vice President, Corporate Communications

Gregory A. Lang — President & Chief Executive Officer

David Ottewell — Vice President and Chief Financial Officer

Thomas S. Kaplan — Chairman of the Board

Analysts:

David Lesinski — Private Investor — Analyst

Lucas N. Pipes — B. Riley FBR, Inc. — Analyst

John Tumazos — John Tumazos Very Independent Research — Analyst

Presentation:

Operator

Thank you for standing by. This is the conference operator. Welcome to the NOVAGOLD Second Quarter Financial Results Conference Call. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there’ll 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 Hennessey — Vice President, Corporate Communications

Thank you, Gillie, and good morning everyone. We are pleased that you’ve joined us for NOVAGOLD’s 2020 second quarter 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 by 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 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. Greg?

Gregory A. Lang — President & Chief Executive Officer

Thank you, Melanie, and good morning everyone. Before I provide an overview of the second quarter results, I wanted to address the ongoing pandemic. In order to minimize the risk posed by COVID-19, NOVAGOLD is maintaining a wide-ranging set of policies at its offices in Salt Lake City, Vancouver, and in conjunction with Barrick at the Donlin Gold office in Anchorage as well as implementing an enhanced safety plan at the project site. All of this is designed to ensure the safety and well-being of all personnel.

NOVAGOLD’s most important objective right now is the health and safety of its employees, partners, and contractors. To that end, as shown on Slide 4, the Company has put in place measures to protect its personnel both in an office setting and in the field. Donlin Gold is regularly conducting safety meetings to address hygiene and sanitation practices. We request all in place to monitor their health and consult with health professionals if feeling any symptoms. We are committed to providing an environment, which all of our people make it home safe and healthy every day.

Slide 5 highlights the steady progress in the first half of the year for NOVAGOLD’s operational activities even with the temporary pause in the drill program during the first quarter. The year started strong with the receipt of state permits followed by preparation of the drill program and mobilization of drill rigs to the site in early March, all before temporarily pausing activities as a precautionary measure as a result of COVID-19. The drill program we mobilized in late May, and we currently have four rigs operating. The multi-year site investigation that commenced in mid-2019 as part of the project’s dam safety certification has been paused due to the prioritization of the ongoing drilling. It’s not on the critical path and our focus is on completing the drilling right now. I will elaborate further on external affairs activities and community engagement later in the presentation.

Donlin progressed nicely on its optimization efforts and established a solid plan for 2020 that would allow the owners to have a greater understanding of the recent geologic model and high-grade mineralization controls, all of which have the potential to benefit the project and will ultimately serve as a basis for an updated study.

Looking at this year’s drill program in more detail on Slide 6, we have completed about 20 holes so far this year. Assuming no further interruptions, it is anticipated that the majority of the 2020 drill program, which consists of about 80 holes totaling over 20,000 meters as centered on the ACMA and Lewis areas, will be completed. The objective of this drill campaign, which is the largest in 12 years, is to validate the recent geologic and resource modeling concepts developed by Barrick and NOVAGOLD and to protest — to test potential extensions of high-grade zones, which would be expected to be mined early in the life of Donlin. The results of the 2020 program will provide the necessary data for NOVAGOLD and Barrick to consider the next steps for the project.

The pandemic has created significant concern in the Y-K region due to the Elders memory of the toll taken by the Spanish flu early in the century when Alaska Native Americans suffered some of the highest casualty rates in North America. Donlin Gold and our Native Corporation partners immediately engaged with the community to assist to the needs of the small villages in the region.

As shown on Slide 7, Donlin partnered with TKC and Tribal councils to coordinate food collection and delivery of supplies to the eight middle Kuskokwim River villages. Donlin also coordinated with tribal administrators to identify community members to make face masks for elders and people susceptible to COVID. In addition, through the work focused on lending a hand during the COVID pandemic, Donlin also supported the Clean Up Green Up initiatives, a program we have participated in for many years.

As can be seen on Slide 8, with the temporary closure of the Donlin Gold camp, we donated thousands of pounds of food to homeless shelters and various food banks. Compounding the urgency of the COVID response, many communities have been cut off from winter transportation when the regional airline declared bankruptcy. Donlin Gold continues to coordinate deliveries of food and supplies to communities who still do not have regular air service, which along with River travel, is the primary means of transportation in Western Alaska.

I’ll now turn the call over to David Ottewell, our Chief Financial Officer. Dave?

David Ottewell — Vice President and Chief Financial Officer

Thank you, Greg. Slide 9 highlights our operating performance. For the second quarter, we reported a $7.2 million net loss, $1.7 million higher than the prior year quarter. The net loss increased primarily due to the 2020 drilling program at Donlin Gold, also lower interest income, higher share-based compensation costs, partially offset by lower interest expense on the promissory note payable to Barrick and foreign exchange movements.

Second quarter 2020 cash flows are highlighted on Slide 10. In the second quarter, we spent $6.4 million, $1.6 million higher than the prior year quarter. Total spending increased primarily due to the 2020 drilling program at Donlin Gold and interest income decreased due to lower interest rates. We ended the quarter with cash and term deposits of $134.3 million.

Greg, back to you.

Gregory A. Lang — President & Chief Executive Officer

Thank you, Dave. The Donlin Gold project is in the western part of the great State of Alaska as shown on Slide 11 and is a 50-50 joint venture partnership with Barrick Gold. Mining is an important part of the Alaskan economy and becoming even more important to the state as revenues and employment decline in other sectors. There are six producing mines in the state, and numerous exploration and development projects that are advancing as shown on the map. Other industries there had been experiencing low or no growth in Alaska, and the impact of the COVID-19 crisis on the cruise ship and tourist industries may take many years to recover. With a long history of mining and a skilled workforce in the state, Donlin Gold offers the opportunity of a future with good paying year-round careers and training for young people to live close to home and maintain a subsistence way of life.

Donlin Gold is the largest gold development project in its category as you can see by looking at comparable development stage projects. It’s truly unique in that it’s federally permanent and starts with an endowment of almost 40 million ounces as shown on Slide 12. And it’s in the jurisdiction where the rule of law is not a novelty and has strong long-term partnerships with the Native Corporation’s Calista and TKC. If you look at the peer group average, Donlin’s resource is over 5 times the other projects.

People in mining will tell you that grade is king. As shown on Slide 13, at 2.25 grams, Donlin Gold has twice the global average grade for large open pit deposits. As we’ll see, not only is the global production of gold decreasing but the average grades continue to decline. Last year, they decreased by 0.05 gram per ton and this trend is irreversible. Why is that important? Compare two projects, one with two grams per tonne and the other with one gram per tonne. With all other factors being equal, the one-gram mine would need the resources and plant capacity and energy consumption as twice that of the project like Donlin.

Given its scale and grade, if Donlin Gold was built today, it would be one of the largest gold-producing mines in the industry. For the long-term investor, there is additional value that comes with a mine that has a multi-decade lifespan from its start almost 30 years of production with just the current resource. As currently envisioned, Donlin would average 1.1 million ounces a year over its entire life. There are few mines in the world existing or proposed with that level of production. In fact, only three mines globally produced a million ounces of gold last year.

Looking at comparable scale mining operations around the globe, Donlin would rank among the top operations if it was producing today. Slide 15 shows the 10 largest producing operations globally. You will notice that gold color on the map indicating the world’s most desirable mining jurisdictions as ranked in the annual Fraser Institute survey published earlier this year. Of the three operations producing more than 1 million ounces per year, one of them is a joint venture in Nevada between Barrick and Newmont. Nevada is ranked third and Alaska is ranked fourth as the best mining jurisdictions in the world. Two other mines, which produced more than 1 million ounces last year, are in Uzbekistan and Russia. They were not even ranked due to the lack of industry response.

A report from Wood McKenzie released last week and based on a study of 260 gold projects found that to maintain current production levels, the gold industry must invest $37 billion on greenfield expansion projects over the next five years. They estimate the industry will need to commission 8 million ounces from projects by 2025. This equates to roughly 44 new mines. This report emphasizes that jurisdictional risk is tied to production declines. The authors note that social and governance considerations are dissuading the exploration of certain jurisdictions and the progression of identified deposits. As well, organic growth is waning. Miners are looking to buy gold through mergers and acquisitions to secure their future. This has failed to significantly increase production. To avoid a perpetual decline in gold supply, the industry must see a rise in project development. Prior to the COVID pandemic, peak gold supply was already becoming a real possibility. Now it seems almost certain. Donlin Gold is in the right place at the right time.

Another differentiating factor for the Donlin Gold project is its location on private land that was designated for mining. It’s rare in mining projects to-date that both the mineral and the surface rights to the project are privately held. In our case, by our long-term partners, Calista and TKC, who identified a mineral potential of the property and invited mining companies to explore. The ACMA and Lewis deposits can be seen on Slide 17. Topography at Donlin is clearly very favorable for development.

As shown on Slide 18, the ACMA and Lewis deposits contain the 39 million ounce resource but occupy only three kilometers of an eight-kilometer gold bearing trend. We have done extensive drilling, over 1,400 holes totaling 340,000 meters, and our focus is on continuing to optimize the project. Based on previous work done in the area, there are future opportunities for a substantial exploration and the expansion of the known resource. When the time is right, we will resume drilling.

Calista and TKC have been partners in the Donlin Gold project 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 their commitment to the project. We support their mandates through the Alaska Native Claims Settlement Act as highlighted on Slide 19 to help them develop their land for the economic benefit of the region and all stakeholders involved. They have an owner’s interest in seeing the project go forward.

While we are all experiencing or responding to COVID and its impact on the health of our communities, we also gain comfort from the longstanding relationships that unite us in the common goal of bringing Donlin Gold up the value chain. We focus our culture of safety, social responsibility, and corporate governance practices. We do this by engaging our stakeholders through regular contact, interacting with our investors, and engaging in meaningful ways to promote the health and safety of our people on site. Especially now, Donlin Gold brings much-needed support to the local communities. We are better together.

On Slide 21, we note our healthy treasury. We continue to anticipate spending about $31 million this year, which includes $20 million to fund our share of expenditures at the Donlin Gold project. At Donlin Gold, $11 million is planned for the drill program and the remaining $9 million for permitting and community engagement. In addition, as the result of the sale of our Galore Creek project to Newmont, the receipt of $75 million is due in 2021 and a further $25 million in 2023, with the contingency payment of $75 million when the owners make a construction decision.

With that, I will now turn the call over to Dr. Kaplan, who will give us his insights into gold. Tom?

Thomas S. Kaplan — Chairman of the Board

Thank you very much, Greg. I’m going to take the opportunity today to be able to reacquaint our existing shareholders and the many new potential shareholders that have been attracted to our stock of late in order to be able to highlight why it is that we believe that Donlin is the greatest gold development story in the world today and that NOVAGOLD as a pure play on Donlin, which we consider to be the next Carlin, is a great way to be able to play it. In addition, of course, for those who are Barrick shareholders, it gives me an opportunity to be able to explain why there are probably dollars of value in Barrick shares as well as a consequence of the progress, which has been made and what Mark Bristow refers to as the global brand that is now Donlin. When we look at the first page with the title of our annual report today, it really does say at all, the expression at Tier 1 asset has been most popularized, of course, by Mark Bristow. Our [Indecipherable] for this is that what we have in Donlin is a Tier 1 asset in a Tier 1 jurisdiction. The superlatives that can be attached to Donlin make it in the combination of attributes something that’s not just the best in the space, but also unique. The reserve size, the grade, the fact that it will be in one or two phases the largest pure gold producing mine in the safest jurisdiction in the mine running over decades and multiple gold cycles, and obviously, because of its superior grade, at a lower cash cost than other mines. But the story gets even better.

This is our stock chart over the last year. I could have put up a two-year chart, I could have put up a five-year chart, I could have put up an eight-year chart when Greg and I joined together as Chairman and CEO of NOVAGOLD, but this chart tells a very big story about what came next, and I think it’s worth highlighting. NOVAGOLD has been an outperformer. There have been multiple catalysts over the years that have rendered it deserving of its space as really one of the go-to stocks in the gold development space. It’s very likely that this chart explains the focus that was placed upon NOVAGOLD’s share price by those who were short the stock and the fact that we were approaching 10-year highs. This is not something that a short-seller wants to see. This is a bad chart if you are short a stock and you’ve come to the conclusion that gold and gold shares may be in a bull market.

Next slide. This is what’s happened until, I guess, yesterday and shows the impact of the report by J Capital. I’m not going to go into the details of that report. I think the line-by-line analysis as well as the color which I provided in my own press release pretty much goes to the point that we regard this as not a report, but as a character assassination, a defamation, certainly the fact that it took us over a week and we’re able to go through this line by line and show the errors in fact, the falsehoods, the distortions. The rest, we will leave to the lawyers. But the point which I’d like to make about this chart is that in light of the fact that the J capital report — it’s not really a report, we’re not really dealing with analysts, I believe their last long on mining was Mongolia Mining, which went down 99%, and they also, if I remember correctly, argued to short Fortescue in Australia, which multiplied in value. I’m not aware of other mining things that they’ve done. Suffice to say that when you have a team such as Greg Lang and you compare that and a track record of integrity, of promises fulfilled, keeping faith with all stakeholders, shareholders, native corporations, and our partner Barrick, I have no doubt that when you look at this chart, you should say, well, if that’s all true, then this is a great buy. We are able to get a pure play on Donlin at a third or so off. I would urge you to take a look at the attributes of NOVAGOLD and of Donlin in order to be able to see whether what I’m saying make sense to you.

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Let’s go to the next slide. When I meet with investors, when I speak about Donlin, I often ask this question. Please tell me, because 99% of the time, I sit on the side of investors, I do not have to be invested in the gold space, I do not have to be invested in NOVAGOLD, I have a free hand to be able to invest in anything that I want to. I’ve chosen to have a big portion of our balance sheet on NOVAGOLD over the last 12 years, simply because I believe that it is the single best opportunity in the gold space and I believe that gold is a generational trade. I’ve made 100 times my money before in various commodities, be they silver, platinum, and hydrocarbons. I believe that that’s exactly what’s going to happen in NOVAGOLD. And the reason is because I’ve been blessed with having a career over the last 27 years in which my teams have either made discoveries or taken control of assets that have been category killers. But I’ve never been in a situation where, as Fidelity says, as the “owner”, I sit above the shop of a half interest in an asset that’s not just a category killer but has a unique combination of attributes that is perfectly, but perfectly suited for the environment in which we are about to embark. So I ask the question, because if somebody can give me an answer, I’m a buyer, I have more capital to deploy in the precious metal space, what other gold development stage asset in the industry compares in its combination of enormous size? There has, to our knowledge, never been a gold mine, which started out with 40 million to 50 million ounces of measured, indicated resources.

Secondly, for an open pit, this is a high-grade operation. The grade at Donlin is where the industry was a decade ago. The average grade of gold mines has fallen upwards of 50% in that decade, which has obviously a very important aspect in terms of operating costs and where we would stand on that scale, because ceteris paribus, all things being equal, if you’ve got something which is producing a two grams a tonne and someone else has one gram a tonne, your cost of production is half theirs, suffice to say that we have size and we have grade, we have quantity and we have quality that would be accretive by any metric for any major mining company.

The exploration potential, which Greg highlighted, really has to be seen from a very interesting prism. Going into 2006, I wasn’t the shareholder then when Barrick made its failed hostile takeover attempt on Donlin and I wasn’t one of the shareholders who rejected that takeover attempt and NOVAGOLD went into the $20s [Phonetic]. If Barrick succeeded in that bid, I think the history of the gold mining industry could actually have been altered, at least the turn of the screw of that history would have been changed. I think you would have seen 10 drill rigs on Donlin and instead of the 40 million to 50 million ounces on the three kilometers of an eight-kilometer trend, which has drill holes in it, I think that you would see a multiple of what we presently have, and I believe that in due course, we have a very good shot, there are no guarantees, that we will see a multiple of what we have now. Now take into consideration that that eight kilometers represents about 5% of the total land package at Donlin, which has never been properly explored because of the legacy of the failed takeover attempt and the assumption that Barrick had for many years that if they didn’t prove that the management of NOVAGOLD was right in 2006 that there was a lot more there and give them a stick with which to beat Barrick over their head with, maybe NOVAGOLD will fall into their lap. It almost did, but on December 31, 2008, my team, The Electrum Group, effectively took control of NOVAGOLD and prevented it from going into bankruptcy, fixed all of the issues that it was facing at that time. It had class action lawsuits, environmental liabilities, discredited management, no balance sheet, and we took that company from $1.5, $2 to $15 about a year or so later, with the help, bless them of John Paulson and the Soros funds.

The production profile of Donlin couldn’t be better. In one or two phases, Donlin will be the largest single pure gold producing mine in the world. I’m ambivalent about base metals. We have some stakes in what we consider very high quality, high grade base metals, but in the world that I see, I really want to be able to have full exposure to the monetary metals, gold and silver. Donlin will be, again, the largest pure gold producing mine in the world, whether it’s the first phase, in the feasibility study, we would start with 1.5 million ounces or in two phases, I believe that’s where we will be. The mine life will be measured in decades, assuming no reserve expansion, plus we have great partnerships. The relationship with Barrick couldn’t be better.

My relationship with Mark Bristow goes back 20 years. If anyone wants to know what Mark thinks of me as a professional in the space, whose integrity he has seen exhibited many times over the last couple of decades, call him up, ask him. My best reference are the people who are my partners and my shareholders. You want to know who I am, I’m sure John Paulson and Fidelity and the Agnellis or Mark Bristow or our native corporation partners will serve as our best references and there’s a reason for it. We have a great management team with great credibility and that management team is focused on what they believe will be the single greatest gold mine in the world. When Richard Williams, who was the project manager at Pueblo Viejo, joined Greg Lang in this story, I remember, John Paulson’s analyst asked him, “Why did you leave Barrick to come to NOVAGOLD? He said, “Because I’m going to build the greatest gold mine in the world.” And he joined with Greg Lang, who had never left Barrick or its predecessors after a 30-year career because Greg had been part of the team that tried the hostile takeover on NOVAGOLD and his attitude was very similar to mine, this is going to be the greatest gold mine in the world, but also as we both agreed, it’s in the right place in the world. Greg had worked all over the world as a miner. I had invested all over the world as an investor. I made my first fortunate in Bolivia, my second in Zimbabwe and South Africa. I sold the Kibali mine to Mark Bristow because he wanted it and I preferred him to the other bidder. So I can tell you, I know what’s going on in the developing world from the investor standpoint. I made my bones there and I love it and I wish that it weren’t what I’m about to say, so does Greg. Greg ran mines all over the world for Barrick and its predecessors. Suffice to say that our view is that the key to making money in this business going forward, the place where investors will be channeled like salmon moving upstream is in the great assets that are located in safe places. Donlin will be the largest pure gold producing mine in the world one day, but most importantly, located in the best jurisdiction in the world. You heard it, Nevada’s Number 3, Alaska is Number 4. Alaska is already the second largest gold producing state in the United States. They understand mining, and of course, they understand infrastructure and they understand making sure that there is access to it. It’s not a big deal, get over it. Those are lives that are meant to scare people, nothing more. Move on.

The point is this, so when I ask people, can you give me an asset which has that combination of size, great mine life, operating cost, exploration potential, production profile and in a safe place where you can actually keep all of those things, all of that leverage to gold? I never get pushback, ever. If I can’t find a challenge to the assertion, then Donlin Gold must be unique. At that point, it’s a rhetorical question.

Next, now I can’t stress this issue enough. Normally in our conference calls, I tend to talk about two things in particular, because I think that they are so important to gold investors, and yes, we do sense in our mission something of the evangelist, but I usually focus on gold, which I’m not focusing on today, because to me the arguments are now very, very clear and God knows all of my existing shareholders have heard them, but I do welcome any who do want to hear my views on gold to feel free to post that question and the issue isn’t getting me to talk about it, the issue is getting me to shut up about it. But let me go into another aspect which I really think people have to understand if they’re going to invest in this space. As I said from my own experience, from Greg’s experience, our belief is that the go where the gold is mentality that took me to South America, Africa, Asia, etc., same for Greg, our belief is that that era is over and that the key is not just being able to acquire category killer assets that give the greatest leverage to the underlying investment thesis, which was my mantra for 15-plus years until I added the corollary in jurisdictions that will allow one to keep the fruits of that leverage.

I don’t want to dwell on this more than I usually do. But the reality is even since our AGM when I spoke about this last, you now have countries which are practically using my language as they confiscate gold. Zambia now refers to gold as a strategic asset. The artisanal miners have to give the gold to the Central Bank in exchange for local currency, which is basically confiscation. We’ve effectively seen what Barrick refers to as nationalization in New Guinea. Yesterday, they announced that they’re going to be laying off people. It was a very, very important statement which was made by the Prime Minister of New Guinea after effectively nationalizing the Barrick and Chinese asset, not just Barrick, but when you have the guts to nationalize the Chinese, you really know that this is an exorable [Phonetic] trend, but the way that he described it was, he said, “Look, these companies have shareholders but I have 8 million shareholders who I have to answer to.” That’s a very, very, very pragmatic [Phonetic] comment. It’s a bad, bad omen for the mining industry. Mining is coming down to the existential issue and that is, it’s not do you have a world-class asset, but where in the world is it located.

Think about it for a moment, put yourself in the position of an institutional investor, if you’re not already one. Broker calls you up and says, “I’ve got a great management team with a world-class asset.” You’re going to say, “Okay, well, I’ve seen a lot of wealth destruction in gold industry, but a lot of balance sheets have been cleaned up, things are looking better, I’m bullish on gold.” But I think the first question that the investor is going to ask is, “I don’t want to waste anyone’s time, where in the world is it, because if it’s not in a place where I can go gambling or take my kids like Las Vegas, okay, admittedly when the pandemic passes, or go swimming in the Great Barrier Reef in Australia or go whale watching or salmon fishing in Alaska, I don’t really think I want to make a career risk.” I don’t want to ever have to answer to my IC, while we got overrun by guerrillas or we were subjected to de facto or de jure outright nationalization as we’re seeing in so many places around the world. I don’t want to list them, because I don’t wish this upon any of my colleagues in the gold industry, even if it is happening to them.

So, the real question is, if you take as the existential factor, where in the world are you in order to be the gating issue? There aren’t that many assets to choose from. And we’re going to be one of those go-to stocks, whether you buy us at $8 or $9 or $18 or $19, $28 or $29, I do believe you’re going to own us, because as Mark Bristow has said, he travels all over the world, he said, “Tom, Donlin is now a global brand”, and if you don’t think that one day Barrick is not going to conclude or start to talk about Donlin the way I do, and by the way, feel free to ask Mark, everything which I say about Donlin, he agrees with. We are now in the process as Greg put it, where we are working on an optimized geological model. Our geological model is already two times or three times the industry average. But in Barrick’s AGM, they referenced that we’re working on a model that could actually enhance the economics, which is, as Greg referenced, focusing on some of the higher-grade zones which materialized from a very successful, albeit very limited, remind you it was a different Barrick at that time, drill program in 2017.

I made my fortune through the drill bit in mining and energy. I love to drill. Mark knows that anything he proposes, I boast double. We have a geologist as the CEO of Barrick, a great geologist, one of the greatest CEOs in the history of gold mining. He has been to Donlin for CEO in 12 years. He’s met with the Governor. He’s met with our local partners. He knows that Alaska is a great place to do business, very different from some of the other jurisdictions that he has managed so ably, but he sees Alaska is a place where responsible mining has a home. So if you really want to know what Barrick thinks about this, feel free to talk to Mark.

You’ll be talking about it eventually, but he is a stickler for wanting to make sure that everything that we’ve been modeling, the new model, his team had a big hand in it. We’re all very excited even if it didn’t pan out. I have no idea. We’ll see after the drill program. We’re still dealing with a grade that will give superior returns in a bull market in gold without a shadow of doubt.

Next. That kind of leverage that we see is extraordinary. Now, you can look at Donlin and you can attach discount rates. I’m going to tell you, I’ve been in this business for 27 years, I got into it when U.S. assets were valued using 0% discount rates if they had any exploration potential whatsoever, because they were considered the safe jurisdictions. They were arbitraged against what were considered the risky jurisdictions to which South Africa, Australia and Canada. Times really changed in 1992, 1993, Newmont went the Yanacocha and then you had a flipping around of the assumptions about valuation and it became you go where the gold is. It’s the frontier spirit. Before you knew it, people were in Argentina and Uzbekistan and China and Russia, etc. That year is over.

We’re now coming back home. And I say that as somebody who once was apparently one of the largest holders of mineral rights in the entire world, from West Africa where we had rights in eight countries all the way through to Pakistan. The year is over. You’ve got to be in a place with the rule of law is not a novelty. That’s not even if, as I predict, gold is declared in most jurisdictions a strategic asset because in most jurisdictions where gold is produced, those currencies are not readily convertible into hard currencies.

We’re seeing already a liquidity trap throughout the developing world. The example I gave of Zambia requiring conversion to local currency, you’re going to see a hell of a lot more of it. And really you know something, there is nothing worse than being an investor and having the right thesis i.e. being bullish on gold and losing your money because you were in the wrong place. Unfortunately, that’s going to happen. So, regardless of whether you buy NOVAGOLD, regardless of whether you buy my thesis, just heed this warning. If you are not in a place where you know that were you wake up in the morning you’re going to own the same thing that you own the night before and not have to walk abashedly into your IC and explain why you invested in a place where you wouldn’t be able to take your family on vacation, don’t say you weren’t warned.

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The leverage that NOVAGOLD provides here needs to be — needs to be qualified. This is only on the 40 million or 45 million ounces. It’s a hell of a lot more there. How much more? My guess is that the new Barrick, one which has its practitioners and executives people who’ve made a lot of money through the drill bit, I think they’re going to be allies on our side when the time comes for them to revisit where do they want to be and where do they want to put exploration dollars.

But you know what, as I’ve always said to Mark, you know what Mark, take your time, do it your way, because once you start talking about Donlin the way I do, and as I said, he agrees with it already, when you’re ready for that, I could pretty much retire because I may be evangelical about Donlin, but I don’t have every analyst waiting for my every word like Barrick does. They are the 800-pound gorilla and the odds that Mark is not going to insist that the valuation attached to NOVAGOLD when we’re back at $4 billion, $5 billion, $10 billion isn’t attached to Barrick because it’s apples to apples, other than the quarter of $1 billion in cash and receivables we have, I would say those odds are zero. He is not a wallflower. What he wants is to get the value for that.

And as I tell analysts who are talking to us about coverage, I say you want to ingratiate yourself to Mark Bristow, just make sure that if you choose to give us coverage, you give him the same valuation because he’s going to appreciate it. It’s one thing that I appreciate something, it’s another thing that Barrick does. So, I’m looking forward to a lot of good catalysts ahead of us because we’ve got an asset that gives you leverage in a place where you can keep it and that is the Holy Grail.

Next. When it comes to investing in the gold mining space, I don’t have to tell experienced or veteran investors that it has been a very, very frustrating period. And one of the reasons is, admittedly, that there are very few management teams, which have adhered to a discipline where they have not, as Peter Lynch used to call it, deworsified because they bought an investment banker’s thesis that you have to go into production. I think our stock chart going into this month pretty much showed that that’s a myth. The key is to be able to have a great asset and not squander that asset on inferior assets, but for that you have to have a management team which is committed to being focused on what it considers to be the best of the best. That in a nutshell describes the management team that was created by Greg Lang, period.

Every promise that this Company has made since he came on Board as CEO and as when I came on Board as Chairman in the beginning of 2012 when we raised $330 million, we told the investors that we would take Donlin up the value chain. When we began permitting, there were a lot of people who said you can’t permit a mine in Alaska. Well, you know, we’ve got our federal permits, the first time ever that the U.S. Army Corps of Engineers and the Bureau of Land Management were the co-authors of the federal permits, they actually asked us to have a ceremony to mark that occasion. We did it. We did it with the full-throated cooperation of officials in Alaska and most importantly with the full support of our Native Corporation partners. It’s been a wonderful experience and we look forward to being able to change the economy of what most people would not recognize when they saw it is really one of the least developed and by that it’s a euphemism for poorest parts of the United States.

We look forward to being part of Alaska and part of this wonderful story of being able to in the most environmentally, socially and culturally sensitive way possible, being able to bring a better life to our partners and our stakeholders. In terms of the advancements of Donlin Gold, it’s been an uninterrupted series of successes from the 2011 second updated feasibility study, the 2012 commencement of permitting the 2017 targeted drill campaign which delivered some of the best drill results in the mining industry, the 2018 receipt of the record of decision on the major federal permits and of course, the receipt of key state permits over the last two years.

Meanwhile, we spun off an asset that didn’t exist before in our valuation, the Arctic and Bornite deposits into a company called NovaCopper and now known as Trilogy, which is now worth several hundred million dollars and it is in a very lucrative joint venture with South32, and we hope for even better things to come. And at a time when people were saying we wouldn’t get more than $50 million for Galore, we held on, did it right, didn’t cut corners and made an agreement that would give us $200 million, potentially $275 million, for that asset so that we could fulfill our pledge to be a pure play on the greatest gold development story in the world and to be able to have a treasury that meant that we have not had to raise capital since 2012 and have no need to raise capital and god knows we did our last round at $9.5 and we’d never do a down-round. But we don’t have to raise money until there is a construction decision.

We’re sitting on a quarter of $1 billion, $230 million, $240 million in cash and bankable receivables. And finally, we have what I believe is going to be a wonderful catalyst for NOVAGOLD. If gold prices continued their march higher, and as all of you know, I believe that gold will multiply from here. We have in the advent of Mark Bristow and the Randgold team, what I call the white swan event. As I’ve said, I truly believe that we have a partner who gets it, we have a partner who will see and I believe does already see that this is a tier one asset in a great place and wants to be able to have this thing framed within the Randgold/Barrick paradigm, and we are all for it.

Next. So what is the NOVAGOLD opportunity and why should you be looking for it especially now, when a company that’s been outperforming the indexes and we’re not cherry picking, we could have just made it Newmont and Barrick because of those high-quality names, but you’re able to get it at a discount now. And what are you getting? What you’re getting is a company that has shown that it is faithful to its stakeholders, to its shareholders, to its partners, a company that has a management team that is honorable, that is, I believe, one of the most transparent in the entire mining industry. Anyone who has gone through our annual reports will see from the Q&A, that we go out of our way to insert Q&A that people have asked us over the years whether Investors have thought of them or not so that we know that we have an educated shareholder base who understands our strategy, who understands that we value our shares more than even the metal itself.

We have a balance sheet that allows us to be able to continue on our path of development with Barrick without having to access capital markets until our share price is much, much higher, gold prices are higher, and the partners are thinking about a construction decision and a timeline. The asset itself, its beyond tier one. It’s a category killer.

The production profile, as I’ve said, one of the largest going into production, ultimately the largest pure gold-producing mine in the world if we do it in two phases. A leadership team that has been there, done that, built mines on-budget, built mines in difficult places and has a stellar track record of keeping the faith with our shareholders. And most importantly, we’re in a jurisdiction that all of our shareholders know they can trust. They know that whatever it is that they own, they’re going to continue to own because we have the asset that is the right asset for an industry starved for great assets, but especially great assets in great places.

Next. It’s not an accident that we have the kind of the shareholder base that we do. I can assure you that in the events of the last several weeks, none of these people have asked us any questions about the issues that were brought up in the short and distort campaign. They understood. In fact, I would say the majority of them began their conversations with us saying, well, you’re a victim of your own success. Mark Bristow actually said, Tom, congratulations, you’re grown up, but don’t they know who they’re dealing with because you’re probably the straightest guy in the entire industry in terms of saying what you’re going to do and keeping those promises.

I can assure you that any one of you who know John Paulson or Will Danoff or the Agnellis or John Hathaway or our friends at First Eagle who made us their first development stage gold stock, there is a reason why we were outperforming. And one of those reasons is the Fidelity, no pun intended, well, maybe slightly, of our shareholder base, they know who we are. They’ve been with us. They continue to be with us. And I hope that the opportunity that’s presented by the, what I hope to be, temporary downdraft in our share price, it comes when people say lies and you just have to deal with the sucker punch and move on. I hope that we’re going to have a number of new shareholders. I can tell you, I’m getting more inquiries now than ever before, people saying if this is a 30% or 40% off sale on potentially the best gold asset, the new Nevada, then we’re interested, tell us more.

And with that, I will conclude and see if there are any questions for Greg or Dave or myself.

Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question is from David Lesinski, a private investor. Mr. Lesinski, your line is open.

David Lesinski — Private Investor — Analyst

Thank you. Appreciate it. Hello, fellows. Finally, a real statement is that, if someone like Mark Bristow from Barrick was to come out and say, yeah, we’re going to expedite the Donlin project and fast track it or make it one of our priorities, you would see the assured sale is run for the hills in a day, they’d be gone. And I don’t think shareholders fully realize or the public fully realizes that a $100 increase in the price of gold equates to almost a total market cap of NOVAGOLD.

So, when you take into account proven and probable resources, me — I firmly believe that by January we’re going to hit $2,000 on gold and I think by the end of 2021 will be at $2,500 to $3,000. When you’re talking about $2 trillion deficit for year after year after year from now, it’s got to give and it will happen. And just taking into account someone like China, China internally mines 400 tonnes of gold annually and it’s all sold and belongs to the Chinese government. When you look at the last 10 years, that’s 4,000 tonnes. Now China publicly admits that their inventory is 1,900 tonnes, 2,000 tonnes, when, in fact, internally they mine 4,000, not to mention all the gold that they’ve been buying around the world.

I think it’s going to come a day that China will announce their gold reserves and that will be when there’s a dollar crisis. And when that day comes and China announces that they have 20,000 tonnes of gold. it’d be a whole different matter when it comes to Bretton Woods number two. I’m walking as I’m talking to you, I’m sorry. The other — only — I believe I have one question and that question is, is Barrick allowed to increase the percentage that they own at the project or they have to buy more stock? Are they restricted to just 50%? And anybody can answer that.

Thomas S. Kaplan — Chairman of the Board

Greg, shall I go ahead.

Gregory A. Lang — President & Chief Executive Officer

I’ll take — well, go ahead, Tom.

Thomas S. Kaplan — Chairman of the Board

Okay. No, no, no, you go ahead.

Gregory A. Lang — President & Chief Executive Officer

All right. So, Donlin Gold LLC, which holds the Donlin Gold project, is 50% owned by Barrick and 50% owned by NOVAGOLD. The Donlin Gold Board has two representatives from each company. The Chairmanship alternates every year. This year Catherine Raw, Barrick’s Senior Executive for North America, is the Chairman of Donlin Gold. Next year, I will be the Chairman. But it’s a true 50-50 ownership structure in every sense of the work. Neither party has right that the other does not have.

David Lesinski — Private Investor — Analyst

Okay. Thank you, fellas. Appreciate your hard work and…

Gregory A. Lang — President & Chief Executive Officer

You’re welcome. Thanks…

David Lesinski — Private Investor — Analyst

And I’m sure it’s very…

Gregory A. Lang — President & Chief Executive Officer

Thank you for joining the call this morning.

Thomas S. Kaplan — Chairman of the Board

Thank you very much. And by the way, your comment about China one day announcing their real gold reserves, you hit the nail on the head. And it’s going to be a very, very important moment, probably done during a dollar crisis or some other inflection point. And it’s going to only enhance their financial standing, when they do it. But they’re waiting, they’re waiting for the right time and that’s not a conspiracy theory, it’s just smart. You don’t telegraph what you’re doing, until you’re ready to expose your position.

David Lesinski — Private Investor — Analyst

Who owns the gold makes the rules, period. Thank you, fellas.

Thomas S. Kaplan — Chairman of the Board

Absolutely.

David Lesinski — Private Investor — Analyst

See you later.

Thomas S. Kaplan — Chairman of the Board

Thank you.

Gregory A. Lang — President & Chief Executive Officer

Thank you.

Operator

The next question and Lucas Pipes of B. Riley FBR. Lucas Pipes, your line is open.

Lucas N. Pipes — B. Riley FBR, Inc. — Analyst

Thank you so much, and good afternoon everybody. Hope you’re all doing well and staying safe, and thank you for the detail in the prepared remarks. Greg, I wanted to follow up a little bit on the drilling program for this year. Kind of under your base case, what are you looking for, what would constitute a positive surprise? Thank you very much.

Gregory A. Lang — President & Chief Executive Officer

All right. Lucas, well, to answer the question on the drill program, I want to go back a little bit in time. As we’ve been working our way through the permitting process, we’ve challenged the overall project, how it was conceived and challenged ourselves to take a fresh look. And one of the things that we came up with was, well, let’s build it in phases and if you do, could you utilize smaller equipment, minimize the dilution and enhance the grade to the mill, particularly in the early years. So a couple of years ago, we had a fairly small program about 16 holes to test the hypothesis if the high-grade intrusive structures were contiguous enough to be mined discreetly. And those results are on our web page and frankly they were stellar results, good thick intercepts of five and six grams in the intrusive. So, we satisfied ourselves that the hypothesis about higher grade with smaller equipment and less dilution was valid.

And then Barrick went through their merger with Rand, which really reinvigorated the company in my view. And Mark was up at site last summer with us, and he and his team went through the new geology concepts that we’ve would put forward. And I think, suffice it to say, they were intrigued. So the purpose of this program right now is with the Barrick people we’ve created a new model, and the purpose of this program is twofold. About half of the 80 holes will validate the new model, which focuses on the intrusive structures. The other half are to test for high-grade mineralized structures that will be mined early in the life. Both of these could certainly enhance the rate of return on the project. And we’re really excited by the results.

We’ve got about 20 holes drilled. We lost a couple of months because of COVID, but the drilling is going very well right now. We’re exceeding our per day targets for meters. And if we don’t get it all done, we’ll be pretty close to it before winter sets in. I’m — yeah, whenever we drill at Donlin, we always want to drill more because it keeps getting better with each program and each fresh look, and we’ve enjoyed the input of Mark and his team of geologists.

Lucas N. Pipes — B. Riley FBR, Inc. — Analyst

Very helpful. Greg, really appreciate the color. And I believe you said it earlier, but just kind of wanted to circle back up on that. Kind of from here, what’s the timeline, the drilling program this year? And then, when should we expect these results? And when would they — when could they lead to kind of a revised mine plan, etc.?

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Gregory A. Lang — President & Chief Executive Officer

Well, we’re drilling now. And with the two months we lost due to the travel restrictions and COVID impacts, that might push the completion date from September into October. And that’s — we’ll get as much done as we safely can this year. And then we’ll probably take a couple of months to incorporate the drill results into the model and work to update that. So even with the setback, I would think that somewhere early in the next year, the owners will be in a position to make a decision on where to from here.

Lucas N. Pipes — B. Riley FBR, Inc. — Analyst

This is great news. Much, much sooner than I expected. I really appreciate the update and keep up the good work. Thank you.

Gregory A. Lang — President & Chief Executive Officer

Thank you, Lucas.

Thomas S. Kaplan — Chairman of the Board

Thank you, Lucas.

Operator

The next question is from John Tumazos with John Tumazos Very Independent Research. John Tumazos, your line is open.

John Tumazos — John Tumazos Very Independent Research — Analyst

Thank you. I was looking at the website and I noticed the feasibility study for the reserve and resources November 2011. And frankly, I haven’t read the short sum of report, I’m not interested in reading it. And I’d like to say something nice about Donlin Creek. I sort of feel as though there are no facts at hand because the feasibility study hasn’t been updated for eight years. When are you going to update the feasibility study? And is there a couple of key points of the changes in parameters that you could call our attention to?

Gregory A. Lang — President & Chief Executive Officer

Sure, John. I’ll be happy to speak to the feasibility study. The study, yeah, it is dated right now. But yeah, a couple of things you really need to remember about, particularly as it pertains to permitting. Once you start permitting in the United States, you, in essence, freeze your project. You cannot — if you change the project in any way once you start permitting, then you basically reset the clock and have to start over. So it made — from our point of view, we did want to do that. We permitted a big project. And if we decide to build it in stages, as long as we stay within the footprint of what has been permitted, which is now approved, any changes would be simple administrative actions.

Had we done a feasibility study that was materially different, then we would have set back our permitting timeline. The other, I think, important aspect about that from my perspective, a proper feasibility study at Donlin is tens of millions of dollars to each owner, and I see no reason to do that until the owners believe that they are in a position to go forward with the project. As gold prices move up and our understanding of the geology crystallizes, we’re approaching that time. And I think we’ll be there early next year. But we’ve always taken the view spend no money before we need to, the feasibility study was done by blue chip engineering firms. Yeah, things have — some things have changed since the study was done, but a lot of things have moved in our favor, energy being a big part of it.

Feasibility study was done at $85 a barrel of oil, and we’re half of that with — seems pretty unlikely to me we’re going to see $85 oil again. Other inputs, heavy equipment is certainly more of a buyer’s market than the seller’s market back then, so there has been pluses and minuses. But we track those indices and don’t see any major movements. So, I think the study — certainly, any prudent operator, and that would very clearly describe us and Barrick, would not go forward with the study that’s somewhat dated. So, we would refresh the study when the time and environment is right.

John Tumazos — John Tumazos Very Independent Research — Analyst

So you’re saying the study is fair and accurate, even though it’s eight years or nine years old?

Gregory A. Lang — President & Chief Executive Officer

John, I think the study is still a pretty reasonable expectation of what it will cost to build and operate this mine. The capital was $6.7 billion. There has been some pluses and minuses along the way. We’ve engaged with outside parties on partnering on the gas pipeline. So that should take $1 billion off of that. So there’s — the study is dated, but it’s not been a particularly inflationary time. And even up in Alaska, wages with all the layoffs in the petroleum industry, wages are not going up. If anything, they’ve turned the corner and are going down. So, I think, I wouldn’t expect any material differences. And fuel, don’t underestimate the impact of $40 oil on an open pit mine. Fuel is a big part of the operating costs and that’s clearly been cut in half. So, I think when it — when we’re in a position to update the study, I think particularly if we look at the stage development approach, I don’t think — I wouldn’t expect anything materially different.

John Tumazos — John Tumazos Very Independent Research — Analyst

How much more do you think it costs to operate in terms of mining or milling cost per ton? Because you have a remote camp in Alaska as opposed to say Nevada, do you think the factor is 2x or 1.5x or 2.5x?

Gregory A. Lang — President & Chief Executive Officer

John, when we did the feasibility study and estimated the operating costs, the biggest issue of operating remote is getting your bulk materials to the mine site. And we’ve looked at barging, we looked at pipelines, both viable options. If I was sitting on the bank of the Kuskokwim River today, I’d see barges delivering fuel and supply is going all up and down the river. So either one of those are certainly viable options to deliver materials to the site and that’s the biggest difference in the operating cost, is just getting the materials to the site. And in our feasibility study, we envisioned everything would be put on ocean-going barges, probably from a port like Seattle or Vancouver on the western seaboard, and then barged up the coast, transfer delivering barges and then transport it to the site. So that’s one of the principal differences.

If you looked at mine in Nevada mine for $1.50 a ton, so in that side-by-side comparison we would estimate somewhere around $2.50 a ton just to get the materials there. So the remote nature of the site has been certainly factored into all of our operating costs. And it’s a remote site, so it’s fly in fly out. That’s — that describes a lot of the workforce up in Alaska and throughout many of the gold and diamond mines in Canada’s north — northern provinces. So it’s all pretty well understood. And operating a mine fly in fly out, is — it happens all over the industry. And we’ve certainly benchmarked our costs against other sites that are operating in similar conditions and against many of the better properties that operate in some far-flung places.

John Tumazos — John Tumazos Very Independent Research — Analyst

Thank you.

Melanie Hennessey — Vice President, Corporate Communications

Thank you, Greg. We also have some questions coming through the chat in the webcast. The first is, could you speak a bit more extensively to the pipeline feasibility in costs?

Gregory A. Lang — President & Chief Executive Officer

Sure. The gas pipeline — what we envisioned is a 14-inch pipeline that runs from the Cook Inlet to the Donlin site. It was envisioned to be a 14-inch steel. It was designed and costed by CH2M HILL. They are one of the biggest pipeline design and construction companies operating in Alaska. They’ve got a proven track record up in the state. And it’s — transmitting gas is a whole lot simpler than transporting liquid, and this study was done by a company that, that’s their bread and butter, is building pipelines up in the Arctic. And I think the work is, particularly, as we permitted it and applied for permits, such as our FINSA special use permit for the pipeline, the design and all aspects of it were reviewed in conjunction with that. And I think it’s — it still remains a viable means of delivering fuel to the site.

At current oil prices, we’ll take a hard look at that when we update the feasibility study, but it’s certainly — there’s pipelines like it throughout Alaska and the colder climates.

Melanie Hennessey — Vice President, Corporate Communications

How long will it take…

Gregory A. Lang — President & Chief Executive Officer

[Speech Overlap] the gas pipe — how long does it take? It would take about three seasons to build the pipeline, which would be done concurrently with building out the Donlin Gold site.

Melanie Hennessey — Vice President, Corporate Communications

Great. Thank you, Greg. The next question is around our — the short-seller report in our response.

Gregory A. Lang — President & Chief Executive Officer

Well, I don’t want to dwell a lot on the short-seller report, but I will speak to it. I’ve been in the industry for many years and have read some analyst reports that were — had some mistakes or somewhat sloppy. But that’s not what we’re dealing with here. And other reports analysts had presented to us have generally been — they ask management to review for accuracy of the reports, and obviously that did not happen with J Capital. And so it really wasn’t an analyst report. Top of the waves, a couple of things about that report. Our capital cost is $6.7 billion. Any junior analyst with any standing knows the difference between initial capital and sustaining capital. So, I think that really is the fact that nobody tried to verify anything in that report speaks to the integrity of the people behind it.

Pipelines and barging, that’s very common up in Alaska. So say you can’t build in permafrost, of course you can. Management ownership in the company has steadily increased, not decreased as noted in the report. So it’s when you’ve got a 20-page report with literally hundreds of misstatements and misrepresentations, it takes a great deal of time to speak to that. And I would draw everybody’s attention to the fact matrix that’s on our website that really just sets the record straight, if you will. But…

Melanie Hennessey — Vice President, Corporate Communications

Thank you.

Gregory A. Lang — President & Chief Executive Officer

I think…

Melanie Hennessey — Vice President, Corporate Communications

And then, Greg…

Gregory A. Lang — President & Chief Executive Officer

That’s invested on that. Please, if you have any lingering doubts about that report, I would encourage you to review the fact matrix that we presented and to read our Chairman’s letter on how he looks at the Company and actions like this.

Melanie Hennessey — Vice President, Corporate Communications

Great. Thank you, Greg. The next question is looking for our current status update from the Alaska Department of Natural Resources permitting that is currently underway and any other state permitting related activities.

Gregory A. Lang — President & Chief Executive Officer

Well, the permitting is very definitely in the homestretch, where the pipeline right away, the state had issued the permit and then because of the request for additional information to review the cumulative impacts of the pipeline rather than fight it, the state resented [Phonetic] the permit and they’re now addressing the question raised. We think that will take another six months and they’ll reissue the pipeline right away. But the permitting — the federal permitting has long since been completed, and we’re wrapping up the remaining state permits.

Melanie Hennessey — Vice President, Corporate Communications

Great. Thank you. Then the last question that I have here is for Dr. Kaplan. What is the dilution risk for existing shareholders with respect to a capital raise upon construction start?

Thomas S. Kaplan — Chairman of the Board

Well, rest assured that the issue of dilution is my top priority. About a year ago when we had our AGM, I think that stock was with a three-handle, maybe a four-handle, and I was asked the question about how are we going to deal with financing this project and I said, my guess is that when gold gets a little bit of a tailwind, we’ll go up to the $9.5 area, where we did our last round of financing in 2012. I personally think that anyone who had not sold in the intervening eight years or seven years, probably was no longer there, but in any event and that we would move from there to the all-time highs of the last decade, which is $16, and as gold continue to move, we would move into the $20s and depending on whether there was a construction decision to be made at that time, that’s where we would raise the equity for a construction decision. And I stand by that with the exception that I believe that time is really very much on our side more now than even a year ago and that if I had to guess, once we get see our shares back on track, we don’t need money until we have a construction decision and it’s likely that our share price, in my opinion, it’s a completely forward-looking statement discounted as you will, would be higher than in the $20s when we do our next raise. But that has always been my long-standing target just simply based on the fact that it’s our stock and trade that when we raise money for a company, when we do a round of capital, we not only try to raise enough to be able to take us to a milestone, but also to be able to hang around until the market catches up to our point of view. Our point of view is that Donlin’s unique, our point of view is that we have no doubt that it’s going to be built. If gold falls to $1,200 or $1,000, personally, I don’t believe it should be built, but then again, I don’t believe any gold mine should be built unless you’re in a bull market. And the reason for that, specifically, is the reason for why this question was asked.

At a certain point in the development of an asset, if it’s a really, really, really extraordinary asset, at least a category killer, maybe not even unique like Donlin, the shares become more valuable than the metal itself. And for me, job one is that this story will become for many people a pure play on the next Carlin. Now, Barrick and Newmont dominate the Nevada story. There isn’t a pure play on it, I wish there was, but Barrick has a half interest in what we believe can be the next Carlin and even Mark understands that when he stepped into this story and the comments and the questions that he is getting about Donlin that it is now a “global brand” and that NOVAGOLD represents, as even Mark said, a unique investment proposition on a global brand.

Now, this is characteristic of the relationship that Mark and I have, and our attitude on a rising share price for NOVAGOLD is that that’s good for Barrick and he agrees. Our attitude is that if people want to buy Barrick, because it’s bigger, it’s got the market cap and diversified production and also a great management team, superb. Whatever is good for Barrick is good for us and whatever is good for us, it’s good for Barrick. It’s a truly virtuous circle. But if you’re thinking about dilution, just imagine this, gold is going up, Barrick is feeling okay, comfortable, whenever that will be, it could be tomorrow, it could be a year from now, it could be six months from now, I mean, you’ve got the timeline on how we’re dealing with things, the megaphone that will be given to Donlin by Barrick is going to be extraordinary. It will be a game changer. I’ve been in this for 12 years, I still cannot find a better story than ever before. We do not need to give away our shares. Shareholders do not need to worry about dilution. The last round we did was at $9.5. As all my shareholders — my big shareholders know, I don’t do down-rounds. And the last thing I’m going to do is a down-round when we have $230 million — $240 million in cash and visible bankable receivables with a $30 million annual spend. We’re not worried and you shouldn’t be either, because as Fidelity says, when they talk about me, the owner lives above the store, and I regard each and every NOVAGOLD share and shareholder as being extremely precious. I don’t know of a better way to play gold than NOVAGOLD. I don’t know of a better gold development asset than Donlin. If I did, and I’ve said it many times, I would pivot towards that other thing, I don’t know of it. Those unique combination of attributes are unique. And when you have something like that, you don’t give it away at a discount.

Operator

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

Gregory A. Lang — President & Chief Executive Officer

Well, everyone thank you for joining our call this morning. And if you have any further questions, please feel free to reach out to Melanie and myself and we’ll be happy to answer them for you. Everybody stay safe and healthy. Thank you.

Operator

[Operator Closing Remarks]

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The COVID-19 pandemic raged through the first half of this year and continues to impact the world without signs of abating. Amid this health crisis, several companies reported strong results

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