 Good day, fellow investors. Today we're going to discuss a very interesting company. A company that has no revenue is losing about 10 million for costs per year on permits for its Donlin Gold project in Alaska. We're talking about Nova Gold resources that has a market capitalization of 1.3 billion and as I said no revenues. Now how can that be? Well, Nova Gold is a call option on gold prices because the Donlin project, if gold prices go up, will be of immense value according to Nova Gold's management. This is the chart that Nova Gold is selling for their mission, business, vision, whatever. So if gold prices hit 2,500, the net present value of their project, not even the net present value, the net present value at 0% discount rate is 27 billion, so the total cumulative cash flows. At 5%, that net present value falls to 11 billion of the project. Okay, 11 billion, you say if gold prices explode, we are now at 1.3 billion, so 10 times upside, no, they own just 50% of that project, the other 50% is owned by Barrick Gold. If we go down to current gold prices 1,200, then we are at 6.2 billion of present cumulative cash flows and around 500 million for the net present value of 5%. We are in negative territory for the net present value at 8%, which is usual for gold miners. So practically now at current levels of gold, there is no value with the company, there is no value with Donlin Gold project. Now, what to do? Is this something you want to see in your portfolio? Set Claremont from the Baupost Group owns it. So is that something we should own or not? Let's investigate into the company and see how that fits a risk reward portfolio or simple normal sanity that has to be brought to the mining world. So as I said, no revenues only costs for permitting staff etc. I made a video, don't watch it please, more than a year ago, I was still in the beginnings but I hope I improved and I said that Novogold is an excellent acquisition for bigger companies and we have seen recently Newmont acquire their Galore Creek project for 100 million and then another 150 million contingent to developments. So I was right on the acquisition, not the whole company, but they acquired just a project for 100 million now in cash and they will pay 75 or earlier of pre-feasibility study, then another 25 million on a feasibility study and then another 75 on approval of construction if ever that happens. This was last year's Novogold, Donlingold and Galore Creek two good jurisdiction future mines. However, we are still in the permitting process so we have still one, two, three, four, five permits to get and those water rights at the end are usually the toughest one, if toughest ones, if I am not wrong. We'll see how that goes but that's another risk to the story. Another look at the project, it's really huge. The resource is four times the size of the peer group average, so really, really big, big mine with a lot of gold in it. Also the gold grade is above average, double the world average grade. So again, everything looks really, really nice. They tested it with 1,400 drill holes over 339,000 meters. There is further room for exploration, so resources increased 135 percent since 2006. So all goods there all looks very, very fine. The mine life, 27 years, production 1.5 million ounces per year for the life of mine, 1.1 million ounces per year. So that's a tier one production, potential production mine. This is again the story depending on gold prices and now why do I say call on, call option on gold prices because if you buy Nova Gold then if gold prices go up, if, if, if then you can have something that might potentially deliver somewhere in the future. They're developing the tech, they'll make new technical studies, construction decision, they will see whether it's payable or not. However, the technical report gives you the present value with financing on a 100 percent all equity standalone basis. Does Nova Gold have the cash to develop the mine? It's 50 percent no, zero. So either dilution is coming if the mine, if there is a decision to go or they will have to incur in a lot of debt and it takes 5 mine, 5 years for the mine only to be developed and they need what 6 billion in cash flows to do that, that's 3.3 billion for Nova Gold, 3.3 billion for Barrick Gold. Where is Nova Gold going to find the 3.3 billion dilution, perhaps selling part of the value of the mine to get some money out of it, to get some value like that did with selling Gallow or Crick. However, let's dig deeper and then you will see you'll already feel my negative calculations because this is insanely how is this value that 1.3 billion. Let's continue. The technical report from the mine used 1200 dollars per ounce of Gold, their costs will be 581 per ounce, so a profitable mine in the long term. However, they use the discount rate of 5 percent, I hate that 8 percent is a little bit better when we are talking about mines. The internal rate of return at 1200 Gold will be 6 percent and the net present value just 547 million. The cumulative undiscounted after-tax cash flow value for the project around 6 billion dollars, payback period 9.2 years. It takes a lot of years to build it and then even more cash flows to build it. So cumulative cash flows until the first year of production, so 5 years are 6.8 billion, so sorry 3.4 billion for New Gold. Total cumulative cash flows, 6 billion at Gold 1200. I made a few calculations just to show how does this change in case we change the net present value. Put all the cash flows in the next 27 years, plus 5 of construction, Gold 1200, the present value at 5 percent, okay 563 million they got 522, okay, we are there. If I put 0.8 percent discount rate, we are in negative 900 million. If I dare to go to 15 that I usually use with my miners, then we are negative 2.3 billion for Gold 1200. So no way they make a decision on building this, Berwick will never do that. Back to the sensitivity, again if Gold prices hit 2000, then the net present value 2000, we are talking 2000 here, the net present value of the project is 6.7 billion. 6.7 million divided by 2 is 3.3 billion, so the upside if Gold prices hit 2000, the upside is from 1.3 billion to 3.3 billion. So that's what 200 percent without the financing. So add the financing, add the dilution, so perhaps from 3.3 billion plus the usual 30 percent discount on such a project that will have a lot of issues, 5 years of building, then grades, then whatever. So when you sum all those things up, I think that even in case of Gold 2000 that the value or the net present value, if I push it to 8 percent comes below 2 billion for Nova Gold's stake in the mine. So below 2 billion and I have now 1.3 billion in market cap. So the upside in case of Gold going to 2000 is what 50 percent in an extremely positive scenario. I have put it here, Gold at 800, Nova Gold zero value, Gold now it's at 4 dollars per share, Gold at 2000 it goes my maybe 5-6 dollars per share because of the current crazy valuation. So no cash flows, all in sustaining cost, okay 600, but still crazy, crazy, crazy. On top of it, they have also debt, about 90 million in long-term liabilities, so they will need more money to finance what they're doing if the production, just to finance the survivorship over the next few years, if the production doesn't get traction. The paupers group has 4.2 percent, they increased it from 3 percent, don't know what you're doing set there, you can give me a call and explain that to me. To be frank here, my value for Nova Gold's stake in Donlin 100 million max. So downside for Nova Gold 90 percent when common sense hits those that own the company, that's it. Now another point is if Nova Gold's stake is valued 1.3 billion, then Barrick's stake should also be valued 1.3 billion. If I check Barrick's market cap it's 13 billion, so is Donlin 10 percent of Barrick's capital? No, plus Barrick has the capital, Barrick could find the 3 billion to build it, so it should be even double the market cap. So is Donlin 20 percent of Barrick for a fair valuation? Of course not. When I type Barrick in the big presentation slide that they had at their investor day with 128 slides, Donlin Gold comes only out 7 times and just once mentioned on a great slide with okay this is what can happen in the future we have these resources. So think of it from a Barrick perspective, what do investors, what do analysts give it a value when they look at Barrick, I don't think they even account for it as it's just resources somewhere in the future at extremely high cost. So similarly perhaps they add 100 million to it, similarly Nova Gold should be valued at 100 million which implies 93% downside from here. This is my simple common sense, please let me know if I'm wrong, where am I wrong because I really would like to know. Thank you for watching, looking forward to comments and I'll see you in the next video.