Release Date: October 03, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Donlin Gold project is considered a Tier 1 asset with 39 million ounces of gold at an average grade of 2.4 grams per tonne, which is more than double the industry average.
- The project has a projected mine life of nearly three decades, promising long-term, stable, and low-cost operations.
- Donlin Gold has secured necessary federal permits and most state permits, demonstrating readiness for advancement.
- The project is located in Alaska, a top jurisdiction with a strong regulatory framework, boosting investor confidence.
- Significant exploration potential exists beyond the defined resources, indicating opportunities for future growth.
Negative Points
- The company reported a net loss of $10.7 million in the third quarter of 2024, primarily due to lower stock-based compensation and increased general and administrative costs.
- There are ongoing legal challenges related to the project's permits, requiring continuous defense and support from federal and state agencies.
- The permitting process in Alaska is rigorous and demanding, requiring extensive shareholder engagement and meticulous preparation.
- The Dam Safety Certification process is still ongoing, with final design packages submitted but approval not expected until 2025.
- Cash and term deposits decreased by $7 million in the third quarter, primarily due to corporate administrative expenses and project funding.
Q & A Highlights
Q: Is the Dam Safety Certification the only major permit left for the Donlin Gold project, and when is it expected to be received?
A: Gregory Lang, President, CEO, Director, stated that the tailings dam and related water retention structures are the last major permits needed. The process is rigorous, but they anticipate approval within 1 to 1.5 years, well in advance of project decisions. The permits are not on the critical path for development.
Q: With current high gold prices, will these be reflected in the updated feasibility study?
A: Gregory Lang mentioned that the price of gold is intriguing and helps projects like Donlin move forward. They plan to guide on their 2025 work plan towards the end of this year or early next year, considering the current gold prices.
Q: What is the expected CapEx for 2025, and what is the current cash burn rate?
A: Gregory Lang noted that the treasury is strong with over $100 million. The burn rate might increase next year with more activity, but they have sufficient cash to advance the Donlin project. This year's expenditure was about $30 million.
Q: Can you elaborate on the staged approach for the advancement of Donlin?
A: Gregory Lang explained that Donlin was originally envisioned as a large-scale open-pit project. They have considered building it in stages to minimize upfront capital, possibly in two stages. Various alternatives will continue to be explored to optimize investment when updating the feasibility study.
Q: What are the financial highlights for the third quarter of 2024?
A: Peter Adamek, VP and CFO, reported a net loss of $10.7 million, a decrease from the prior year due to lower stock-based compensation and project costs. Cash and term deposits decreased by $7 million, with a strong treasury position of $105.6 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
