Novagold Resources Inc (NG) Q3 2025 Earnings Call Highlights: Strategic Moves and Financial ...

This article first appeared on GuruFocus.

Net Loss: $54.3 million in Q2 2025, an increase of $40.6 million from the prior year, primarily due to a $39.6 million non-cash charge related to warrants. Treasury: Increased by $225.7 million to $318.7 million at the end of Q2 2025, mainly from a public offering and private placement. Capital Raise Proceeds: $234.1 million in net proceeds from the May capital raise. Corporate G&A Costs: Declined by $0.8 million in Q2 2025. Donlin Gold Funding: Increased by $3.1 million due to increased site activity in 2025. Pro Forma Treasury: $136 million after additional share purchase and underwriters option exercise. Gold Production Potential: 1.4 million ounces annually for the first 10 years, with a grade of 2.25 g, more than twice the industry average.

Warning! GuruFocus has detected 3 Warning Signs with NG. Is NG fairly valued? Test your thesis with our free DCF calculator.

Release Date: October 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Novagold Resources Inc (NG) has successfully removed a major headwind by resolving its partnership issues, paving the way for future growth. The Donlin Gold project is positioned to be one of the largest gold mines, with an average production of 1.4 million ounces annually for the first decade. The company has a strong financial position with a treasury of $318.7 million, bolstered by recent capital raises. Novagold Resources Inc (NG) has secured a strategic partnership with Paulson Advisers, enhancing its access to capital and expertise. The Donlin Gold project is located in Alaska, a favorable jurisdiction for mining, with strong support from Native Corporation partners and secured federal permits.

Negative Points

Novagold Resources Inc (NG) reported a net loss of $54.3 million in the second quarter of 2025, primarily due to a non-cash charge related to warrants. The feasibility study for the Donlin Gold project is outdated and requires an update, which will take approximately two years and cost about $80 million. The company anticipates increased expenditures due to its 60% share of Donlin Gold funding, which may exceed previous guidance. Permitting challenges remain, with a court remanding the project for an additional study related to a tailings dam issue. The capital intensity of the Donlin Gold project remains high, with previous estimates over $7 billion, necessitating careful financial planning for future development.

Q & A Highlights

Q: Can you remind us of the capital intensity of the feasibility study and the timing for its completion? A: Greg Lang, President & CEO, explained that the last capital refresh was over $7 billion. They are preparing documents to solicit proposals from engineering firms for a new feasibility study, expected to start late in the third or fourth quarter of this year. The study will take about two years and cost approximately $80 million on a 100% basis.

Story Continues

Q: With Barrick out of the picture, how will annual spending change, and how will funds be allocated in 2025 and beyond? A: Greg Lang stated that corporate spending will return to historical levels, while Donlin site expenditures will increase due to the feasibility study. Spending will ramp up in 2026, with the feasibility study costing about $40 million each year, of which NOVAGOLD's share is 60%.

Q: How are you thinking about funding the project in this new phase? Is there a debt-to-equity split in mind? A: Thomas Kaplan, Chairman of the Board, expressed confidence in financing, noting that the toughest deal was the recent purchase with Paulson. He mentioned that multiple blue-chip names were willing to invest, and once the feasibility study is updated, there will be significant access to capital. The debt-equity split remains to be seen, with many options available.

Q: If a new discovery were to materialize at Donlin, what could be the geopolitical implications? A: Thomas Kaplan highlighted that Donlin is already a strategic asset, with potential geopolitical significance due to its size and location. He noted that if Donlin proves to be a string of pearls like Carlin or Nevada, it could elevate its status to a tier-zero asset, with significant geopolitical and monetary implications.

Q: What are the immediate priorities of the Paulson partnership to close the valuation gap? A: Greg Lang stated that the immediate priority is to update the feasibility study, with full support from Paulson. They are aligned on ongoing drill programs, permit defense, and community engagement. Thomas Kaplan added that Paulson's involvement will provide knowledgeable advice and increase investor interest, helping to close the valuation gap.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

View Comments