WisGuy1 wrote: From @exploratory: Been stupid busy wrapping up my 2020 field season, but thanks for keeping me posted.
As you know, it has long been apparent to me that Novo has been on a methodical and workman-like trajectory to profitable production and positive cash flow, with unavoidable interference from the coronavirus pandemic obviously delaying the first pour from Q4 2020 until Q1 of 2021.
Those skeptics who doubted Novo could transition relatively easily and smoothly from explorer only to explorer and miner/producer IMO confused the massive challenges well known to accompany the undertaking of complex major mining associated with big open pit and/or underground operations with Novo’s much simpler and straight-forward BC and Egina surface strip mining undertakings which are much more akin to earth and gravel moving tasks. QH is spot on with his confident projections of profitable low cost gold mining by Novo in the near term. That cash flow will be a game changer, and bashers better get their last bashing in soon before Novo dore bars close that window.
FWIW, too, my perspective on KL reducing its Novo position seems to be a bit different from some, and a lot less negative a development. Aside from its market impact prompting a transient downward dip in Novo stock price, I view it as a natural and predictable reallocation of assets by KL that takes into account Novo’s decision to be the miner of its holdings in the Pilbara rather than KL being the miner. Let me explain what I mean.
Kl is a mining company. Its business and core mission is to mine. It is not in the business of investing in other mining companies and watching them mine. TM made it crystal clear some time back that KL was interested in being the miner in the Pilbara, not just a passive investor. I believe that Novo was initially open to KL being the miner, or at least miner. However, as things developed, my sense is that it eventually became apparent to KL that Novo intended to become, and saw its path forward as becoming, its own miner (at least at BC and at Egina and elsewhere as to gold bearing lag gravels). It also became clear, I think, that Novo had no interest in or intention to be acquired and/or controlled by KL. Once KL came to understand that, it made perfect sense to me and became inevitable that KL would sooner or later elect to sell its investment in Novo and put those financial resources to work elsewhere where its assets would be deployed so as to more closer align with KL’s internal mining goals and objectives.
This is NOT to say that KL’s sale of its interest in Novo will necessarily make KL’s shareholders the most money, but only that it does not surprise me that it would choose to take its cash off the Novo table and invest it in mining opportunities for itself elsewhere. This is also not at all to say that KL thinks that Novo can’t or won’t succeed as a miner or that its Pilbara and other investments and projects are not economic. Quite the contrary. But I do think that if KL is not in control and doing the mining itself, they’re not interested.
Also FWIW, I think this is a great time to invest in Novo given that Novo is about to begin up the second phase its BC Lassonde curve. Among other things, Novo will have enjoy access to an entire new set of potential investors who follow and invest in promising new producing miners. QH may or may not finally get the credit he deserves from the conventional skeptics out there, but the considerable wealth that he will be soon creating in the form of Pilbara dore will be credit enough for Novo’s shareholders.