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Novo Resources Corp T.NVO

Alternate Symbol(s):  NSRPF

Novo Resources Corp. is a gold explorer focused on discovering gold projects. The Company is engaged primarily in the business of evaluating, acquiring, exploring, and developing natural resource properties with a focus on gold. It has a land package covering approximately 5,500 square kilometers in the Pilbara region of Western Australia, along with the 22 square kilometer Belltopper project in the Bendigo Tectonic Zone of Victoria, Australia. Its key project area is the Egina Gold Camp, where De Grey Mining is farming-in to form a JV at the Becher Project and surrounding tenements through exploration. The Company is also advancing gold exploration at Nunyerry North. It focuses on undertaking early-stage exploration across its Pilbara tenement portfolio. It has also formed a lithium joint venture with SQM Australia Pty Ltd (SQM) in the Pilbara, which provides shareholder exposure to battery metals. Its Belltopper Gold Project comprises the adjacent Malmsbury and Queens projects.


TSX:NVO - Post by User

Comment by likeikeon Apr 18, 2021 11:36am
120 Views
Post# 33018894

RE:alpha

RE:alpha

Novo Resources appears to need cash, which is likely why it carried out a below-the-market financing, and likely why it accepted loan terms from Sprott Lending that are punitive. As a company developing a mine, Novo is at a point where it is burning cash and where its operation comes with uncertainty and risk that is best mitigated by a cash cushion. The company can clearly access cash: it can sell some of its New Found Gold shares and it can raise money in the equity markets, albeit not on ideal terms. Thus, I wouldn't go so far as to say that the company risks going bankrupt; however the company could be forced to dilute its shareholders at unfavorable prices or liquidate its share holdings at unfavorable prices should the gold price fall, or if Beaton's Creek ramp-up takes longer, or costs more than expected.

Even if you believe in the geology side of the Novo story, you'd be wise to look closely at the company's financials, as well as some of its financial decisions, before taking a long position.

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