From @AUinvestor without chart @AUinvestor @JustJT and other group members who have been discussing Novo Resources...
Everyone has their own views, concerns, biases, and investment styles. Myself, I'm a long-term investor, and Novo is a large position in my portfolio. My style is to accumulate when I believe the share price is significantly over-sold /undervalued. In my experience, that is when most weak hands sell and there remains only the strong hands who believe in the company's management and fundamentals. Of course, every company has strengths and weaknesses, mistakes, learning curve, etc. But at the end of the day, you have to assess the risk-reward and only hold what you are comfortable with.... (I have a lot of shares, and I'm comfortable... it's an individual choice that each investor has to be accountable for). If the share price eventually takes off, I won't be one of the "chasers"... again, I only accumulate weakness. That is the long-term style of investing that has worked for me over the past 30 years (sure, I've made mistakes, but have tried to learn from them)......
Obviously, with the above said, I've been a recent buyer (sure the stock price can go lower, and depending on the Gold price and Gold miner action, I'd probably add). But with that said, I believe the stock is extremely over-sold/under-valued at today's price. The above chart shows some positive divergence on the Monthly extremely over-sold (all-time low) %B indicator.
From a fundamentals view... (I'll discuss that) my study indicates the company is only about 95% of its "fair value" (which I've spent considerable time calculating). Novo's revenue should be growing a whopping 35% per annum once we get into the second half of this year. I do realize that we can't expect much from Beaton's production numbers until the beginning of July when the 3rd quarter commences... even then we'll have to wait for the quarterly earnings report in the latter part of the year.
Quick ramble in no particular order... in the meantime, we should be getting continued news releases like the recent one for the High-Grade Gold rock chip assay results at Station Peak in Egina of "quartz vein-style lode gold mineralization"... that belt seems to extend from De Grey's Hemi resource from the South-West to North-East. QH announced that Novo plans follow-up work that will include integration of historic mine plans, assessing underground access, stopes and channel sampling along drives and access ways, a 3D geological model and drilling such targets as defined by the recent and future results and 3D modelling... including along strike, the structurally complex zones down dip of surface alteration and geochemistry, and the down plunge of various high-grade shoots ... ongoing detailed mapping, ongoing soil geochemical sampling and ongoing rock chip sampling to the west of the belt.
We also had a recent news release of Nunyerry North soil sampling assay results that defined a rich Gold anomaly at "> 100 ppb Au over a strike of 640 m which remains open to the west". 10 of those soil samples returned greater than 1 g/t Au and 29 samples returned greater than 0.5 g/t Au. The peak results included "2.3 g/t Au, 2.13 g/t Au, 1.84 g/t Au and 1.59 g/t Au". Open to the west... a result of "1.84 g/t Au on the western-most line". The rock chip sampling also returned high grade results from "quartz veins and associated wall rocks with peak values including 30.3 g/t Au, 21.1 g/t Au and 19 g/t Au". In 2016, the Creasy Group produced high-grade rock chip samples of "81.0 g/t Au, 73.1 g/t Au, 40.3 g/t Au and 10.8 g/t Au" from a "zone of quartz veining over a radius of 20m" and "8.3 g/t Au approximately 90m to the west of the main cluster of high-grade rock chip samples". The Creasy Group also produced a ">100 ppb Au soil anomaly over 360 m strike defined 400 m to the WSW" of the area sampled by Novo in 2021, and a "500 m long >100 ppb anomaly" that is 270 m south of the area sampled by Novo... they found a peak soil result of "771 ppb Au". As well, we learned that reconnaissance rock chip sampling produced a peak assay result of "20.7 g/t Au at the western end of the anomaly".
Novo also gave us updated exploration results on some of its various projects in WA and down in Victoria. Again, I would describe this company as a "mutual fund of 13K sq km extremely high prospective conglomerate and orogenic/intrusion-related Gold deposit tenements" as well as the battery metals (Ni, Cu, Li, Zn and Ag) as discussed by QH.
What else... when we have the ongoing accelerated near-mine exploration work at Novo's Nullagine Gold Project with the 20,000 meter RC drill program expected to be completed by June. So far, initial results from tenements such as the Genie and the Parnell Trend have been excellent including (Genie with "13 m at 2.78 g/t gold from 1 m, 22 m at 1.61 g/t gold from 8 m, 7 m at 4.57 g/t gold from 47 m, 12 m at 2.45 g/t gold from 6 m").
Then we learned about Novo's orogenic Gold/intrusion-related and conglomerate-hosted Gold targets included at Golden Eye and Becher, Irvine in addition to the sanukitoid intrusive targets along strike from De Grey Mining’s Hemi deposit and Catia. "Battery-metal and base-metal targets including Purdy’s North adjacent to the Azure deposit... ok, I'll mention them all... East Well, Bob’s Well (which is a VHMS), Gully Washer at Miralga and Kurrana Pegmatites.
Then let's not forget the main conglomerate targets at Comet Well and Purdy’sthat have been advanced for the upcoming large-scale sampling programs later this year....
The 1,750 m diamond drilling program that will test the high-priority Gold targets at Belltopper at Malmsbury SW of the high-grade Fosterville Gold mine in Victoria...
All this with foresighted thinking of the fast turnaround of Gold assays using Intertek's PhotonAssay labs.
The ramping-up in November and December the RC drill programs across NGP with two rigs testing the high priority orogenic quartz vein-related Gold targets (as stated above... including Genie, Parnell trend, Red Ensign, Margies, Crossing and Linq). The results (from the drilling at both Genie and Parnell) have so far been highly successful with several holes intercepting high-grade Gold FROM NEAR SURFACE (my emphasis as it should be emphasized for all investors in Novo).
We have the infill and extensional drilling in 2022 AND the new drill programs mentioned by QH to test additional priority targets which the compliance and heritage having ALREADY BEEN APPROVED (my emphasis). Yes, the MAJORITY of Novo’s high priority lode Gold targets are located on GRANTED Mining Leases and are EASILY ACCESSIBLE by established roads already in place. A
Then (again) we have Novo's fifty sample Phase 2 mechanical sorter trials from Comet Well, Purdy's, Egina, Talga Talga ranging from 800kg to 5 tonnes that are being processed and results/analysis should be reported by end of April... (sorter trials designed to determine the construction and commissioning of the sorter(s) and infrastructure at Comet Well later this fall).
These trials take time, but will help tune the sorter(s) to the the various geological considerations and size fractions as well as train the operators in their most efficient use. This is our opportunity to field test the "mass pull to concentrate" that we are waiting to confirm anticipated bullish results. Also remember that management informed us that the Acacia reactor and electro-winning apparatus at Golden eagle are being upgraded to accommodate the larger masses of material from so-called "accepts and reject samples". This will help Novo to test the Phase 3 Comet Well and Purdy's bulk samples this Fall. A lot is riding on doing this right... (determine the viability of mechanical ore-sorting of Novo's massive 13K sq km of land packages across the Pilbara - let's not rush to screw this up... patience).
I could ramble on, but this has already been hashed out, and yet most people seem totally clueless? Especially given the scandemic supply-chain disruptions environment of the past 2 years... exploration and starting a mill takes time... labor is hard to get and with only 70 employees or less, I'd say Novo management has been doing a pretty good job, much better than they are being credited for.
Ok... for anyone freaking out... I'd start by asking myself what is the company's Market Cap... I get as of today ~US$190.86M. Then I'd ask, what is the Revenue? I get ~ US$64.94m... Earnings? ~US$52m... EPS?.. last reported in September, 0.27... P/E Ratio? ~3.8x with market values ave. 20x.... then P/B Ratio at ~0.6x when the mining sector averages 2.8-3.0x...
Future Growth? There different ways of calculating, but as a conservative estimate... I get ~40% over the next few years when many sectors are negative or at best in the teens to 20s %. In my estimation, both Short and Long-term assets exceed the company's Short term and Long-term liabilities. (I can do the numbers for the short-term).... the company Balance Sheet is a big POSITIVE (again, easy to do the numbers).
In my opinion, we are in good company with our biggest shareholders, Eric Sprott at 7+%, Van Eck at ~5%, Agnico Eagle at ~4%, Quinton Hennigh at ~1.5%, IMC at a couple percent... etc.
Again, bottom line... everyone has to be comfortable in their position. I've said before, that having revenue or cash to buy dips can help to take out the stress... owning too much for some creates too much stress. You have to be comfortable with your position size and should have at least (imo) 10 positions spread out to limit risk (I have over 40 positions). Of those positions, I'm overweight Novo Resources, because I believe in the company and am a long-term "Value-investor" (despite all the negativity, rumors, and low share price).
As stated above, in my view... Novo Resources is 95% over-sold/under-valued... the share price should easily be around the US$15 mark instead of the ridiculous, current $0.78/share. So (short-term traders excluded), we will see who wins this speculative bet 5 to 10 years from now. But like all my past winners, none of the bashers will have the integrity to fess up to their failure when Novo's share price is much, much higher. They will simply disappear to be heard from no more (has been my experience).