Ann: Invitation to Investor Webinar and CEO interview, page-94

continued from my previous post.

Chris sums it up nicely between 1:17 and 1:21

Chris gets excited about geology (gets his rocks off!) between 1:02 and 1:07.

having now digested this all I feel that they know what they are doing and I support their decisions. I just hope they get there act together regarding good clear regular communications.
cheers
bruised custard

48:40 Question. How does Donlin creek coming into production will effect Nova minerals? Chris, that’s your buddy?

CG. We’ve spoken to Donlin and how that will affect nova minerals, one thing is that Donlin will have a huge drain on resources here in Alaska, drill rigs, people, geologists, engineers, so what we’ve done, we have very good relationships and contracts with our contractors, there committed to Estelle, so there not take any rigs of us and some of these operations are struggling to get rigs, but we’ve got them here all on site. That will be a challenge when they get up and running but I think we’ve secured ourselves and in such a good position and have a good relationship that our contractors are committed to the project.

49:35. The major benefit how this will affect us is when the Donlin natural gas pipeline goes out, that’s what there planning for their power, it will pass about 10 miles to the north of us, we’ve already spoken to them, Dan Grant (?) the main guy, he’s my neighbour here in Palmer, they would love a take-off agreement, there very open to that, of course they are. So that’s how we will benefit, we will get very very cheap fuel of that Donlin pipeline. A major benefit so we are really pushing for that to go forward. But we have other power options as well. The critical thing is that we’re working with Agreeko (?). Agreeko is a world leading power solutions company and this is how we actually generated our estimates for power, we used 12 cents/kilowatt which was referencing Agreeko and numerous analogue projects here and throughout the article who are doing 9-12 cents/kilowatt hour, so they have a number of solutions in-house proprietary technology to find efficiencies, battery storage and all these type of things. So working with Agreeko we’re very comfortable that we will get our power requirements.

51:40 Question. Sell snowlake? L.S. We have strategic interests in snowlake but at these prices snowlake are doing any incredible job. It’s just not worth us to block trade any of it. We’ve got a large holding there, more to come on that, I’m not in operations. ……etc

52:50 CG. I’ll just say in the big picture Nova minerals and the Estelle gold project we’ve had a few articles in the local media here, very positive reception, we’re becoming a very important part of the community here, we support the ………(?) and really big events, local kids sports and this type of things, so in terms of sustainability in the bigger picture in this world today, we’re not here to rip the guts out, rape and pillage the deposits, we’re here to develop the district to benefit ourselves and our share holders and company and including the local community and become a major part of the economy and that’s the message and how we build the confidence here in Alaska with the state government and the local government and local borough, very excited about the project coming online, we’ve built the relationships to do what we do. People need to consider that as well, we’re developing a district, developing a trend, to have decades of mine life out here at the end of the day. The SS just represents a small portion constrained by our indicated resources at the moment. It gives you a small part of the picture for what we wanted to get out of the scoping study, again, positive, very positive, we can mine, we can make a profit and get very good numbers out of mining 0.4 gram material and it’s only upside from here. We just continue our work systematically as usual, do our work, we’re playing the long game here. It’s a long game to get these projects going to do the resource drill outs, the environmental permitting going and we expect to ultimately achieve our objectives, with a few bumps in the road, of course but there’s no doubt we’re here to stay, we’re here to produce gold.

55:10. L.S. Yes we’re looking to improve, we’ve engaged a PR firm, we’ve updated the website. You can see from the website our mandate to improve started about a month ago (me paraphrasing). And that will only improve.

56:50. CG exciting year ahead, 20,000 metres planned at RPM, 20,000 metres at Korbel, we have 5 rigs on site, last year we were pretty much drilling with 3 rigs, …… we have the flow sheet in place, we’ve got the resources, we just need to prove up here and continue to add to our production profile, we have the social license, we couldn’t be more confident than ever that we are on the right track and it’s all upside from here.

58:00. Why did Chris predict a capex would be 250 mill? LS. 450 is including yellow gear and extending the resource including RPM.

CG. I think it was a pretty close prediction. When I make a prediction in any interview I’m trying to bring out to our share holders our ideas, what we’re thinking and be open and transparent with these things. That’s what the SStudies are for, actually pin it down. I try to present in interviews what we’re thinking what are ideas are and we will continue to do that. I think it was a pretty close prediction if you look at the plant itself, if you break it down, plant infrastructure itself is about 250 plus ore sorters about 300, plus yellow gear we did include inflation in a lot of these costs including contingencies, yellow gear alone, which is for the life of the mine, comes close to a 100million. These are early stage predictions, we will continue to do so, this is the reason why we come out with these studies along the way to actually compile it all and report the actual numbers at that point in time.

59:50 Question. LS. Capital raise? We have other funding options. Capital raise, we wouldn’t be contemplating a capital raise, directors wouldn’t have ploughed half a million dollars over the last couple of days if there was a capital raise contemplated. I don’t know where this rumor has come from. We have cash. I see some one say we have 5 rigs but they won’t be starting all at once, but at different times and we have cash flow projections on that.

101:15 once we get those inferred to indicated, if we were reporting under 9i43 101as a tsx company we could gone a lot bigger on the production profile but unfortunately we were limited with the indicated resource.

CG. Just a note on resources 9.6 million ounces with what we have planned this year, we’re going to get it to 10 million, I can confidently say that. We going to crack the 10 million considerably I would think but importantly a significant component of that, we got 3 million indicated resource, so if we can double that, it would be a fantastic outcome for this year and a big part of that will be the very hi grade resources coming from RPM. That’s what we’re really focused on, to get that average total global resource grade up with the RPM resource coming on line. 10 million easily plus company, by the end of the year. I’m being conservative there.

102:30 Question which other prospects will you target this year?

CG. Our main focus right now, because we are on the fast track to production, is Korbel 50/50 drilling and RPM. I don’t see us getting out to Train Shoeshine, although it’s low hanging fruit, we’re trying to get to PFS by the end of next year and get into production as soon as possible. I would expect us to continue our recon exploration, this is how we discovered Train and Stony. With the recon exploration this year, you saw in January a news release which showed a geo physics at RPM, there’s some outer lying anomalys there at RPM that aren’t in the current drilling area that are looking really hot. I want a recon geologist to go around that RPM area of influence and really have a good look, kick some rocks around there and see if we can’t get some more resources and drill targets there similar to North RPM grades. Remember RPM resources are RPM north, that’s where the 1.5 million ounces 2 grams per ton is, RPM south which just sits a few hundred meters away, is currently the rock chip samples there shows a surface footprint much larger than RPM north. At RPM south we will get the first drill holes into RPM south this year as well. So if RPM north is anything to go by and RPM south is similar it could be a serious addition of hi-grade ounces to the RPm resource.

So we have continuous wide open RPM north as well as RPM south and additional potential at the recon exploration teams will be looking at this summer. I think recon exploration teams will also go to Korbel, there’s some areas we need to have a look at. Remember the geological ore deposition model is a bit different between RPM and Korbel, Korbel is all intrusive, intrusive is the host rock only. At RPM we see the deposit there is sitting on the intrusive hornfelds(?), it’s an altered sediment, sitting on that contact, obviously that contact is some sort of conduit or an ideal site of ore deposition of high grade mineralisation, and we have that same sort of model, we have a number of sites at Korbel that we want to drill into that intrusive contact at Korbel and potentially intersect similar RPM style mineralization at Korbel. I think we will really start focusing this year on Korbel and RPM area of influence to start to bring more and more resources in anticipation of the PFS.

In 2023 we will start to go out to train shoeshine and start to get serious about that area. I expect that 2023 will be on further discoveries through the Estelle gold trend. It’s a 35 kilometre trend, 35 k from just north of Korbel to just south of RPM and within that there are so many other numerous gold prospects and gold showings. We need to systematically go through those and start advancing those projects and it’s pretty virgin territory out here. We’re looking for mineralization on the surface that won’t require any deep searching exploration techniques, it’s just old school boots on the ground kicking rocks right on the surface. I expect that to feed the Korbel processing plant for the next couple of decades. Who knows what’s deeper than that but that’s way off in the future and we will consider that when the time comes. But the plan for recon exploration for now is around RPM and Korbel for this year.

107:15. Question. disclose additional information and transparency? (?) LS. Absolutely, but we have to do it in a manner where we disclose to the whole market, we can’t disclose on this forum or personal. Under continuous disclosure obligations, we have to disclose to the wider market, we can’t disclose in any other forum.

107:50 Slurry pipeline. CG. We were planning the slurry pipeline it will sit between just north of RPM in the valley almost equal-distant between RPM and train shoeshine, so train shoeshine will be able to use that infrastructure to be able to get over to Korbel.

108:25. I’ll just make a note on Stoney here, the main Stoney vein we can follow over 4 Kms of strike, 300m vertical extent, up to 10 to 12 metres in thickness in the main Stoney vein and also parallel to that on either side, we didn’t get a lot of time to follow them up but we did see more veins sticking up on either side of the main Stoney vein. This is a bit of a different beast, it’s not only gold, hi-grade gold, 48 grams per ton, some of these samples, but thousands of grams per ton silver, up to 2.4% copper in this poly metallic stack vein system in there. That’s a bit of a different beast, so at this stage of the game, we are after the gold, so that creates certain complications when you have silver and copper as a co-product, but what it does with the plant that we will set up there at Korbel with a flotation plant , because when we eventually develop Stoney it will require you to produce a concentrate rather than a dore gold bars. The Korbel flotation plant can also be used to generate concentrate some time in the future when it’s time to get into a deposit style like Stoney. But right now where just focused on the gold but it’s out there and we are getting a lot of interested in a different type of investor interested in these poly metallic vein systems because it’s not just gold, all commodities are on the up and up and silver and copper are certainly in that industrial uses (category).

110:20. Question. Gold price? L.S. External advisors and bankers range any where from 2000 up-to 5000. Gold is cheap now with what is happening in Russia and Ukraine, hidden in all the news about Russia is the US inflation rate of 7%. Even in the US inflation gauge they taken out housing, and the oil price. So you could double that and still be conservative. We’re biased we see gold a lot higher, no question.

111:25 CG. I was looking last night at the average gold price realise for most of the major gold companies in the world, the last two years the average was closer to 1800, so for two years now the average gold price that actual miners have been realizing from their actual gold fields has been $1797 I think has been the average, to the upside of course we could take advantage of that but if gold price does go to the down side, and I don’t believe it will due to the reasons you just stated, remember that’s the power of ore sorting. With ore sorting you can dial it in and get a higher grade mill feed. It’s such a powerful thing, people really need to research what we’re doing here with ore sorting and all the big companies that we talk to, are using it more and more across all their projects. It’s a really powerful part of our flow sheet. Some people will never get it. I get that, but when you compare what we’re doing to a typical project being dictated, what your mining and that goes straight to the mill, whole of ore processing, that’s different to what we’re doing here, we have that grade control step, we can tweak it and dial it up and down according to market conditions. We’re really resilient to any of the fluctuations in the gold price and most importantly I think … it’s going up. Most people in the gold space today would probably be thinking that, certainly be poised to take advantage and maximum benefit out of gold price moves here. Especially when you can take advantage of 0.4 gram material, where you can make money of 0.4 gram material at a $2000 gold price, that’s huge, it adds big big numbers to our economics.

113:35 Question. At what point would you seek off take agreements? I assume you mean hedging? L.S. That all depends on the funding arrangements, we will see, but that’s a while off yet.

114:45. Question. Will Cathedral be drilled this year? CG. I so want to, we discussed that, the troughs in the ounce production profile, cathedral is like a little knob, a little hill, you could just daylight and take that right of the surface, easy ounces. We are just finalizing the drill program at Korbel now and I’m leaning towards yes. I think we need to to that this year for sure. We got to get that into the equation.

L.S. Thanks for comments of support, we’re doing all we can 24/7 ….

CG. I assure we are putting our blood sweat and tears into this.

116:20 LS. There’s always ways of optimizing the production profile. We could go smaller, high grade, that’s the beauty of these intrusive related gold systems, you can squeeze them, turn them, we can go much larger …etc.

117:10 Question. Snowlake holding. We have a substantial holding and there are strategic parties that want to take a position of us, but they are doing a lot of work over there. It’s very undervalued ….. . But yes we would take money of the table but to a strategic party.

117:45 CG. Just on could we go smaller? You could, we could get massive IRR and all of these indicators, if you rip the guts out of the deposit, but that comes to the detriment of not having a permanent long life cash flow and so we are trying to get maximum value out of the deposit for our shareholders and all the parties involved. To really build a mid tier to major gold company over the decades to come with this type of gold trend, we’re not just a one hit wonder, we’re just not Korbel starter pit, we’re all these things that we talked about today, all these resources, and potential upside on those resources and additional prospects. Of course you have to look at this in a broader context, the scale tells you, you have to think bigger. Nova is a long term project to build ourselves into a major gold producer. We’ve put our blood sweat and tears into this, we’re not here to be a lifestyle company, we’re an aspiring major gold producer and that’s where we are going.

119:20. Question. Is the larger capex to allow for expansion to incorporate other deposits in addition to Korbel? LS. Absolutely. CG. Yes. Absolutely, that’s it! That’s the plan for the project. Your looking at it! For a minimal additional just for haulage, there won’t be a whole plant at RPM, there’s not going to be another whole plant processing site. There will be some basic infrastructure to get it into a slurry pipe, to get it into Korbel processes plant. Again this comes back to the small mine, to build a small rip the guts out plant at Korbel, then what? Then you have to go to RPM and build a whole new plant site? And another one at other prospects? That’s not how we envision this thing, that doesn’t make economic sense. This is the plant, this is the infrastructure, this is the capital required to develop and produce from the Estelle gold trend for decades to come.

That needs to be understood, that needs to be crystal clear.

121:00. Question and comment. Between now and the PFS just improve the NPV/CAPEX ratio. LS. Absolutely. The reason why we couldn’t do that is because we couldn’t include the inferred. Three short years ago we were speaking to a mid tier mining company they said why didn’t you include the inferred? We showed them the ASX listing rule, that we have to have a certain percentage of indicated resource and that would have increased the NPV considerably. Once RPM comes in it will increase it as well.

122:10. Question. Giving guidance?. LS. Chris mentioned all through the webinar that you gave guidance at the time. The guidance was on the plan, this included contingencies and inflation to the capital costs. And extend the plant capacity with the RPM hit, with what we now know at RPM.

123:00. Question. I see peers in Canada use 5% I’m assuming this is a discount rate? The reason we use 5% is we have $70million in losses, capital losses over the years. In Alaska we have expenditure that gives us credit where we’re free from royalties for years, so it made the most sense to use the 5% discount rate for the initial period. Once we’ve paid back, that’s the same cost done, the same cost is in. Your pretty much covered from that point. We can do what we want and Fort Knox is a case in point. They’ve got there (sum?) costs in, capex paid for, they’re mining stuff at 0.1 grams, mate, they’re hi grade stuff is 0.3!.

124:20. L.S. There’s a question on individual shareholders, I can’t comment.

124:30. Question. Phase 2 Scoping study? L.S. As soon as possible with RPM, as soon as possible. We’re onto them now, as soon as possible we’ll update the scoping study. And we’ll have news flowing until we get the updated scoping study with RPM.

124:50 Question. Are you concerned about a potential takeover? Absolutely, mate your getting something for free, your getting snowlake for free or your getting the gold for free. Absolutely, but I’m sure we have enough just to support that people are riding on this Q&A and the shareholding of directors and management and friends and family I’m sure we have enough to fight off a takeover bid, if it was to eventuate. Absolutely, it’s been discussed and it’s a concern, particularly because your getting something for free.

End.