NovaGold Resources Inc (NG) 2009 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen. Welcome to the NovaGold fourth quarter results conference call. Please be advised that this call is being recorded.

I would now like to turn the meeting over to Mr. Rick Van Nieuwenhuyse, President and Chief Executive Officer. Please go ahead, sir.

Thank you, operator, and welcome everybody to our 2009 year-end conference call. We'll -- I'd like to start out by having Don MacDonald, our Chief Financial Officer, review the highlights from our 2009 results, and then outline our planned budgets for 2010, and then I'll give a corporate presentation, highlighting our 2009 accomplishments and our planned activities for 2010, the current year. We'll then open it up to a question and answer period at the end of the show before wrapping up here.

So Don, I'll turn it over to you.

Thanks, Rick. Thanks for that introduction. There's no question that this year has been a very interesting year. In the past year, the Company has achieved a number of successes despite the extremely difficult market at the beginning of the year.

Late in 2008, like many other companies, we were facing a banking crisis that significantly restricted our financing opportunities. We were able to sign, on December 31, 2008, a USD$60 million financing, which was expanded in January 2009 to USD$75 million, and set us up for the beginning of the year.

In February, USD$20 million of debt was converted to shares, which saved us the cash for repayments, and we were also able to negotiate a new deal with Teck on Galore Creek that meant that Teck would be funding 100% of the costs from November 2008 until at least 2011, based upon our current budgets for Galore Creek.

In March 2009, we were all very pleased to see Rick and the NovaGold exploration team win the Thayer Lindsley Award for the discovery of the Donlin Creek project. And then in April, 2009, we completed the feasibility study, and in May, the study was filed and formally accepted by the Donlin Creek LLC as the basis for the project going forward. This study did use 2008 costs and reserves and a gold price of USD$7.25 per ounce, so it is obviously not optimized for current prices and costs.

And November 2009, the company had consolidated cash of CAD38 million, and in December, we were -- we announced the agreement to acquire a 100% interest in the Ambler project, which closed in January 2010. And in this month, February 2010, we agreed to terms on a settlement of a lawsuit that dated back to the suspension of construction on Galore Creek in 2008.

The next slide just shows the changes in the financial results of the Company between 2008 and 2009. We ended the year 2009 with cash of CAD38 million, but more importantly, our working capital was CAD26.6 million, compared to a working capital deficiency of CAD19.2 million at the end of fiscal 2008, a swing of CAD46 million.

Our loss for the year was CAD73 million, compared with a loss last year of CAD195 million. In 2008, you may recall we started to expense expiration costs and care and maintenance, and CAD44 million of the loss for the year, net, related to the funding of expiration, care and maintenance, net of non-consolidated funding.

We also incurred CAD28 million of interest and accretion, CAD18.4 million, and also stock based compensation. That total of CAD28 million, though CAD22 million was non-cash.

On the financing side, I mentioned the major financings with cash from financing activities totalled CAD117 million for the year, and our share of project costs at Donlin Creek was CAD15 million, compared to CAD25 million in 2008 when the feasibility study was the main focus of expenditures.

Now, overall, total expenditures on projects was CAD31 million, compared to CAD164 million in 2008.

Looking forward to 2010, on the next slide, NovaGold's share of the budget for Donlin Creek is USD$14 million, which will primarily be expended on optimization studies and repermitting activities. But we expect a review of that budget in midyear, depending on the success of the work on the natural gas power option, which may give rise to a supplemental budget on the projects for the remainder of the year.

At Galore Creek, as I mentioned, Teck is funding 100% of the costs until their earn-in is completed. The initial budget for 2010 is CAD8 million, but as Teck has announced, we plan to begin the preparation of a pre-feasibility study, so that updated capital and operating cost estimates can be prepared for the Galore Creek project. And thus, an additional budget may be approved for the balance of 2010.

At Rock Creek, we budgeted USD$17 million for ongoing engineering and environmental management work, and at our new Ambler project, we have a budget of USD$1.4 million for environmental and engineering studies, and we will be looking at other work in the region, so there may be more expenditures on other projects in that area.

Looking on the financing side, we filed a USD$500 million shelf prospectus in December that will allow us to speedily access equity markets or convertible equity markets over the next two years.

We also are assessing long-term approaches to project financing, and with the positive dynamics at Galore Creek, we have been approached with regards to financing of that project, including the potential for copper concentrate off-take contracts. We will update you on these matters as the year progresses.

And the finally, on the M&A side, we are evaluating a number of opportunities for future growth of the Company, and we'll also update you on those as the year progresses.

I'd like to now pass the microphone back over to Rick.

Thank you, Don. Before starting on the formal -- our corporate presentation, I'd like to just follow up on some of Don's comments on the project financing for -- specifically, probably for Galore Creek.

We just came back from a two week trip in Asia -- Singapore, Hong Kong, and Beijing, and a few things are quite obvious, that there is certainly a huge amount of capital available in Asia, in China, specifically. And there is certainly a huge amount of interest in large resources.

We specifically have a lot of interest in our Donlin, Galore and Ambler projects, and we certainly see the potential for developing strategic relationships in this part of the world. After all, our copper concentrate from Galore will likely end up going on ships to Asia for processing. They're looking for a secure, safe, long-term source of high quality copper concentrate feed, and certainly Galore could deliver that.

So we plan to return -- go back over to China shortly, and continue our dialogue in search of a strategic partner there.

Turning back to the presentation, I'd like to start out with some high level comments, an overview of NovaGold to date, and in particular, for those of you who might be new to the story, I think that might be useful.

Our reserves and resources slide here outlines the 15 million ounces of gold reserves. Those obviously primarily come from our Donlin Creek project. This is our share of resources and reserves for all of our projects, and you see another 11 million ounces of resource, gold resources there. Plus, obviously, a significant amount of silver and copper.

These -- the three main assets that build this resource base are Donlin Creek, our 50-50 partnership with Barrick, our Galore Creek, 50-50 partnership with Teck, and our Ambler project, which Don alluded to. We recently acquired 100% ownership in that. And I'll be talking more about each of these momentarily here.

These are large, world class projects. They're partnered with world class mining companies, and they're located in a safe geopolitical part of the world, Alaska and Canada. NovaGold has demonstrated a track record of being able to raise money, to advance these projects, even in years such as 2008 that were extremely difficult. But I think on the strength of the assets and on the strength of the management team, we've managed to continue to move these projects forward.

We've also -- we've got a history, a track record of resource growth, and that's certainly something that we will continue to do. It's something we're good at, and we certainly aren't going to forget our roots there.

We expect to have significant reserves and resource increases in 2010, and we plan to continue to expand our exploration effort, probably in particular at Ambler this year, and we will continue to evaluate new opportunities.

The leverage -- I think this is one thing that's really important for investors to appreciate, and what NovaGold offers to investors is huge leverage to gold -- 1.7 ounces in gold for every ten shares, plus about 500 pounds of copper for every ten shares. To express this in terms of dollars, it's about CAD250 worth of metal for every share purchased. So we probably -- I think we provide one of the best leverage stories in the sector.

Now turning over to our projects, the location map here shows, again, the projects located in Alaska and British Columbia, and we'll start with our Donlin Creek project. Of course, the flagship of the Company, located in southwest Alaska. Current reserves there, based on the -- well, the feasibility study that was completed and put forward in 2009, again, based on a USD$7.25 gold pricing, you can see the 29 million ounces of reserves, plus the 10 million ounces of resource there. It's a significant number, this is -- there is 6 million ounces as measured and indicated, and a further 4 million ounces of inferred.

These numbers have just recently -- I think earlier today, were updated by Barrick in their announcements for their year-end. We're in the process of doing the same, and so we expect these numbers to be updated using an USD$8.25 gold price going forward.

The feasibility study, this is a map showing the layout of the site. It's obviously a very, very large scale mine, and I think it's important to point out that all of the facilities here are located on private lands that are owned by the [Shalista] Native Corporation and the PKC Native Corporation, who are obviously strongly supportive of development of this project.

You can see here in green the open pit, in red, outlining the development and waste rock facility, and then in brown, the tailing storage facility just south of that. And then right in the middle is the plant site.

So despite the fact that this is a huge operation, everything is pretty tightly confined and located on a relatively small footprint for such a large operation.

And just to give you a sense of the scale here, the open pit there, which contains the ACMA-Lewis deposits, measures about 3 kilometers long by 2 kilometers wide by about 350 meters deep. So again, a very, very substantial ore body.

Moving on, we'll operate this -- the plant operation is 50,000 to 55,000 tonnes per day. It's a pretty typical open pit, crush, grind, flotation process, then with pressure oxidation and carbon leach recovery of the gold. Production will be about 1.5 million ounces for the first 12 years, and 1.3 million ounces over the 20 year mine life.

We're confident that once this is in operation, additional resources and reserves will be developed in the rest of the district, to increase operating mine life.

During 2009, as Don pointed out, we finished the 42-101 compliant resource -- or, excuse me, the feasibility study, and we're basically in the process of preparing the project for permitting.

This year, we're evaluating the option of using a gas line to provide natural gas to the -- from the Cook Inlet to the project. And if this is feasible, we believe it will potentially -- has the potential to increase the -- or excuse me, to reduce the cost of onsite power generation, perhaps by up to 50%. And obviously, power generation is a significant part of the overall cost structure of the project, and so having -- producing power for half the cost will have a significant effect on the overall cost of production, perhaps the reduction of 10% to 15%.

The feasibility of sourcing sufficient gas in Cook Inlet, as well as the construction of the gas line, is part of this study. We expect to have a decision on this in the third quarter this year, and then make a decision to either go forward with the gas line, and use that as a new case going forward, or to go ahead and permit the existing -- for the current base case, which is dependent on diesel fuel.

If we go forward with the gas line, we'll probably have an increased budget, perhaps CAD10 million for the project, which will be CAD5 million for NovaGold.

Barrick and NovaGold have agreed to spend CAD100 million on permitting the mine over the next three years. That's a CAD50 million estimate for NovaGold. That's our sort of going forward, forward-looking planned expenditures over the next years to permit the mine. Permitting is a time consuming process, particularly in the United States, but it's a very well regulated process and it's not terribly expensive in the big picture.

We do expect to have to complete a full-blown EIS for this project. It's a large, complicated project, but we -- because we're working on the (inaudible) Corporation lands, because they were -- they selected these lands specifically for mining, we believe that we won't have any challenges to the -- this is -- the mining is the best use for this land. So we think that it will be possible to permit this operation.

Once in production, you can see that the scale and magnitude of production here, the first five years, producing 1.6 million ounces of gold, at an average cash cost of just under CAD400 an ounce, CAD394 an ounce. With the gas alternative, we think this, again, could further reduce the cash cost of production by perhaps 10% or a bit more.

We -- you can see the cash flow potential, the cash flow generation of this project in the current pricing environment. It's obviously very significant. So we're really excited about where we are with the Donlin Creek project, and we'll look forward to updating you on the progress on the gas line alternative.

Moving on to Galore Creek, again, a 50-50 partnership with Teck, with Teck still earning into its 50% interest. This is a very large, 1 billion tonne plus copper, gold, silver (inaudible), containing about 9 billion pounds of copper, another 7 million ounces of gold, plus 123 million ounces of silver in the measured and indicated category, plus significant additional resources in the inferred category. The project is located, of course, in northwestern British Columbia.

In 2009, the Galore Creek Mining Corporation, the partnership company, completed additional work to continue to advance the road, and sold equipment and camp supplies that were no longer needed for ongoing activities. Sale of the excess camp equipment generated significant funds for Galore Creek, and those were basically put back into the care and maintenance and road construction activities.

The road has currently been advanced to approximately kilometer 48, and I won't try to imply that the road is 100% completed, but it's certainly a very drivable road in terms of gaining access into the area.

We are planning additional -- we've been working on additional optimization studies during last year, and into this year. We plan to have an updated, new updated mine plan towards the end of the quarter here, which envisions mining in the Galore Valley, and this would be at a larger throughput than previously -- previous studies. We'd be looking at a 95,000 tonne a day throughput. We'd have a longer tunnel and a shorter road access, and then we'd look at putting the tailings facility and the mill site over on the road side of the mountain, rather than on the -- rather than in the valley, as previously envisioned.

We expect to have a report on this, updating this new mine plan in the end of the first quarter here. Meanwhile, work continues on additional metallurgical studies, specifically on the lower grade material. As the copper prices increase, the copper cutoff grades have dropped. We've found that we need to find additional information on those lower end copper recoveries, so that's work that's ongoing. We expect that there will be a net positive on overall recoveries, since we didn't have data here in this area before. We generally don't have a -- you've seen the worst, so that work is ongoing.

We also expect to conduct additional geotechnical work on pit slopes, and also specifically for the mill site and tailings site, located in the upper [Moore] Creek Valley.

We'll also evaluate where exactly to put the mill and processing facilities, whether it's next to the mine or next to the tailings facility, or somewhere in between. This exercise will include a series of tradeoff studies of conveying ore versus slurrying milled material. In addition, we'll obviously also evaluate the potential of operating these conveying or slurrying, given the terrain here and the climate. And obviously, that's all -- that would be part of the picture as well as costs. In addition, GCMC will continue to advance the access road towards tailings and [pedal] site.

This information will obviously all be collected and used towards completing a pre-feasibility study, and at that point, then, we'll make a decision and an assessment of the path forward.

As mentioned earlier, Teck is responsible for 100% of the 2010 budget. We expect that either late -- or sometime in 2011, that they will have earned into their 50% of the project.

Once in production, you can see the -- again, the cash flow potential here. At 95,000 tonnes a day, you're producing between 350 million and 500 million pounds of copper a year in a concentrate, totaling about 750,000 tonnes of concentrate. That's a lot of concentrate. It's about as much concentrate as the country of -- all of Korea uses in a year. So this is a very, very large scale mine.

In addition to the 350 million to 500 million pounds of copper, you're producing 300,000 to 500,000 ounces in gold, and 3 million to 5 million ounces of silver. That's during that first five years.

Obviously, our new mine plan, we'll be updating these numbers. The cash costs, you can see on a co-product basis, you're in the lower quartile for both gold and copper at CAD0.90 for copper and CAD400 per ounce of gold. Using the byproduct methodology, of course, you're crediting the gold and silver against the cost of production of a pound of copper, it's around CAD0.40. Be it the other way around, and crediting copper and silver against the cost of producing amounts of gold, it becomes a very large negative number, from what -- something in excess of minus CAD1,000 an ounce.

And again, you can see that the cash flow potential generation of this mine is well over CAD1 billion a year at anything close to current metal prices.

So we'll look forward to updating you on Galore Creek as the year progresses here, first in Q1 and then hopefully later in the year with updates on the pre-feasibility work.

Moving on to our Rock Creek mine, this is located just outside of the town of Nome in Alaska here. We also refer to that as our Nome operations. You can see we have the reserve base there of 0.5 million ounces, plus a significant measured and indicated and inferred resource in addition to that.

We have primarily been carrying out our maintenance activities onsite, including a significant amount of work as it related to resolving the water management issues at the mine site. I'm pleased to report that the water treatment plant and the injection well field has been operating as designed, and we are making excellent progress on vacating the excess water that's been located behind the tailing storage facility.

We expect to exceed the limits for our compliance order by the end of March, and for removing the water from behind the dam. We've also constructed a significant amount of diversion channels to alleviate the accumulation of water behind the TSF in the future, TSF being the tailing storage facility.

This year, we'll also continue to care and maintain the property site with the objective of protecting the environment, and as well as protecting our asset there. Meanwhile, we've assembled a team to evaluate the possible restart options for -- of the mine. The objective would be to understand the capital and timing necessary to complete construction and commissioning of the operation. We then expect to have the study completed by mid-summer, and then by Q4 be able to make a decision on Rock Creek's future.

If put into operation, we expect the mine would be sort of an average cash cost producer, between CAD500 and CAD600 an ounce, and it certainly has potential to produce, on an annual basis, about 100,000 ounces. With today's metal price, that would generate somewhere between CAD40 million and CAD50 million of annual operating cash flow.

Our objective this year is to evaluate the go-forward alternatives. That will result in adding best value for our shareholders here.

One of our newest projects is -- and is an early stage exploration project. We refer to it as the Ambler project. It's located in northwest Alaska in the same mineral belt as the world's largest and highest grade zinc mine, which is located at Red Dog. You can see that the polymetallic nature of this deposit, with excellent metal and dominant in both -- well, actually, in copper, zinc, gold and silver.

We acquired 100% controlling interest in this project just a little bit ago, from -- we acquired the balance of the project from Rio Tinto. Rio Tinto was in the mode of shedding non-core assets to reduce their corporate debt, and so we took advantage of their desire to pay down their debts and put together a deal whereby we fulfill 100% of this really very important and high quality district.

The Ambler district is made up of a series of volcanogenic massive sulfide deposits. You've all -- you've probably seen and watched the Nova and Discovery channel programs that talk about the black smokers at the bottom of the field. This is one that operated here some 400 million years ago, and formed a series of particularly rich massive sulfide deposits.

The Arctic deposit is specifically one of the highest grades in the belt, and actually one of the highest grades in the world, with a 43-101 compliant resource estimate of -- in excess of 32 million tonnes, creating 4% copper and 6% zinc, along with significant precious metal credits.

There are a number of other deposits in this district. We control the lion's share of this district. We refer to these as -- these deposits have a tendency to occur as pearls on a string.

The others are not quite as high grade as Arctic. Arctic is certainly the crown jewel in the district that's been found so far. But there's certainly additional resources that we just haven't completed 43-101s on that certainly offer great potential for future expansion of the resources here.

We do have an exploration budget planned for this year. Obviously, we'll be continuing our community relations efforts. That's always been a very important part of our business strategy, bringing the local communities along with what our plans are, so that they're involved in the process as we go along.

We'll also have a significant amount of engineering and environmental work. Basically, we're working towards permitting an access road and the underground development that would be necessary to complete the next stage of evaluation of the Arctic deposit, which would be a feasibility study.

We do plan to do some additional exploration in the district, and when we have agreements in place, we'll be updating you on our plans there. We certainly see tremendous exploration here, exploration potential in the district.

We're working closely with the Northwest Alaska Native Corporation, or NANA, which is the owner, of course, of the Red Dog zinc deposits that Teck operates on behalf of the joint venture there. NANA owns adjacent lands to our Arctic deposit, and we certainly want to -- we believe developing a partnership with NANA makes sense, and we certainly would like -- would love to work with them in helping to develop this important mineral belt here.

So if you put these four projects together, you can see that the level of production each one of these brings, and then on a cumulative basis, what that means for the Company as all projects are put into production. Obviously, this will take a significant amount of time, but you're looking at a Company with a growth profile that could produce over 1 million ounces of gold, and net 450 million pounds of copper. Of course, when you're venting out that copper, you'd be producing gold for a very, very low cash cost, so you'd be obviously a very -- a premier gold and copper producer.

Just to wrap up, a few slides on leverage again. NovaGold offers shareholders huge leverage to both copper and gold, 1.7 ounces of gold for every ten shares, along with 500 pounds of copper. Again, about CAD250 of metal value per share. Or if you look at it from a dollar invested standpoint, you invest a dollar in NovaGold stock, you're getting CAD35 worth of gold, plus CAD35 worth of copper. So, excellent opportunity for investors who want to play that leverage to the market.

I think I'll end there, and open it up for the Q&A. Operator?

Thank you, but I'll take questions from the telephone lines. (Operator instructions)

Our first question is from Haytham Hodaly from Salman Partners. Please go ahead.

Good afternoon, Rick, Don.

(inaudible).

Good, good. Just -- I just had some accounting questions, actually, mostly for Don. Don, are you on the line still?

Yes.

Perfect. Just curious. For Galore, care and maintenance in 2009 was CAD14 million, and CAD25 million for Rock Creek. For Galore specifically, that CAD14 million hit the income statement even though it wasn't a cash outlay, obviously, because Teck is funding your share. Does that get added back anywhere as a non-cash item on your consolidated statement of cash flows?

Yes, it does. The two things that go on here, it's a 50-50 partnership, and despite the fact that they haven't earned in, the accounting is such that there's a non-controlling interest deduction that comes through the income statement. But although we're paying zero of the costs, we're actually, at the end of the day, end up with 50% of the expenses on our income statement.

The add-back is in the non-controlling interest section, so if you look in the adjustments, there is a non-controlling interest adjustment that gets added back --

That's the (inaudible) --

-- on the cash flow statements.

[12.4], something like that?

That's correct. That's the 12.4.

Okay, and I assume going forward, it's going to be the same accounting treatment, for example, for Galore, I think you said CAD8 million. Was that CAD8 million that was planned, was that 100%, or your share?

That's 100%.

100%, so roughly, CAD4 million of that, again, should hit the income statement.

Yes.

And then get added back in to the consolidated cash flows.

Yes.

And then -- and your expensed exploration in 2009 was about just under CAD18 million. That was primarily Galore Creek and Rock Creek exploration.

Yes.

What's the expectation for 2010 for this income statement that I am --

Well, let's explain the CAD8 million -- sorry. The exploration is predominately Donlin Creek, so the way we deal with exploration at Donlin Creek, it's different than Galore Creek. We don't consolidate. We treat Donlin Creek as an investment, so you'll see a separate note to our financial statements that shows the breakdown of the expenses on the projects. And what essentially happens is, there is cash sitting in the LLC, and that sometimes funds part of the subsequent year's budget. So there's never an exact balance between what we put through the income statement and what we actually have budgeted. So there's slightly -- if you can think of it at a working capital difference, a couple million dollars.

So essentially with a USD$14 million budget on Donlin, you should see USD$14 million go through the income statement under exploration, but it may be slightly different. And the USD$14 million is US dollars, of course, and these are Canadian.

Yes, yes, okay. So it's somewhere around USD$14 million for expensed exploration. Is there any other exploration -- anything else that would be considered exploration, for example --

Yes, Ambler work would be definitely exploration. If we do any extra work, it's Rock Creek or other places.

Okay, so Ambler, that [1.5 million] would also fall in with that USD$14 million for exploration?

Correct, yes.

Okay, perfect. And in 2009, you had USD$12.6 million at Donlin Creek as your share of expenditures, correct? Where does this show up in your financials, this USD$12.6 million? Is this also in the exploration line, or this is the (inaudible) exploration line?

Oh, no -- you're talking about Donlin Creek here?

Yes, at Donlin.

That number would be a US dollar number, so if you look at note 7 of the financial statements, you'll see the breakdown -- there's a table there that shows the actual exploration. It was -- CAD14.7 million is the cash, there was also some stock based compensation of CAD700,000, which doesn't get reflected on the investment section. (inaudible), it was attributable to the project.

Okay, fair enough. And maybe one last question, just bigger picture, to Rick. Rick, with regards to your current cash position, obviously, you made a statement in your quarterly that you'd be looking at financing, which -- understandable, given what you have in front of you. Any sense as to timing on that?

We'll be opportunistic this year. I think it's also important to point out that we have CAD75 million of warrants that are well on the money, and we know those shareholders well, and they're certainly open to exercising the warrants if the Company is need of cash, so --

Okay, perfect. Thank you.

(Operator instructions) The following question is from Kevin Barnes from [Absaroka Capital]. Please go ahead.

Good afternoon, gentlemen. Can you hear me?

Absolutely.

Very good. One quick question on Donlin Creek, in regards to the proposed natural gas tie-in that you guys are studying. Can you give a little more color on what you're looking at, at what pipeline you're looking to tie into, kind of what route you're looking for, kind of the distance of that pipeline?

Sure. The Cook Inlet oil and gas basin is located in -- just outside of Anchorage, here, and it's a relatively large basin with significant Nome gas reserves. So that would be the site that we'd be bringing the gas from. The pipeline would go over a route, it's called Rainy Pass. It's about 250 miles from the Cook Inlet, depending exactly where it comes from, over to the project site. So roughly, it's a 250 mile pipeline.

Very good. Could you give a little extra color to why you guys are considering this a better option than just in normal electrical grid tie in for the same distances?

Yes, we actually spent a lot of work and effort on looking at the electrical power line out there, and I think from a common sense standpoint, it certainly does make sense to do. Unfortunately, in Alaska, there's no overriding state utility. What we have is six or seven independent, small utilities that you'd have to wheel power through. And not only would that be a bit of a business challenge to negotiate six or seven different agreements, we think that would actually be the easy part of the challenge. It's -- probably the more difficult part would be, they're public utilities, so you'd have to go through a public process six or seven different times over. And so you'd have the anti-mining NGOs lining up six or seven times to tell the public why they shouldn't subsidize this evil mining company.

So we think that was just probably in the too difficult basket, unfortunately, because I think it does make sense, certainly makes sense from a sustainability standpoint to bring power out to the region, and the region was certainly in favor of it.

But we think the gas line option is very -- actually, has all the same kinds of synergies in terms of bringing gas out to the region, bringing cheap power out to the region. We think the region will be very supportive of this as well.

And of course, gas is a better environmental solution to bringing power out here than diesel, and so we think it's something definitely worth studying.

Very good. Looking forward to hearing the results of that study. And then, just to go back to the financing later this year. Do you guys have any preference for kind of a public market transaction, or are you looking more like a private deal like you did back in '08, I think it was?

We're just -- we're looking at a number of different options now. I mentioned the trip to China, that was a very interesting trip. We certainly -- as again, we see the tremendous amount of capital there, and there's a tremendous amount of interest in our projects. Obviously, things in China don't necessarily move at lightning speed, so -- but we'll look at a number of different options there. We're not really locked into anything, and again, we have CAD75 million in warrants that are well on the money with shareholders who want to do the best thing for the Company.

Very good. Thanks for that information. Best of luck with the year.

Sure.

Take care.

Thank you. There are no further questions registered. I'd like to turn the meeting back over to Mr. Nieuwenhuyse for his closing comments.

Well, I thank you, Operator, and thank you, Don, from down under, for your participation. We'd certainly like to thank all the participants. We hope you're enjoying the Olympic Games. Vancouver has certainly been abuzz with all the new -- all the people in town, and hopefully they get some snow over at Cypress Sunday. But on Sunday is the US-Canada game, so I'll maybe just leave by wrapping up and saying thank you again, and go, Canada, go. Thank you much.

Thank you, gentlemen. This concludes today's conference call. Please disconnect your lines, and thank you for your participation.