AUinvestor on Novo
4 17 Feb 2023, 22:50
@AUinvestor As a long-term investor, I'm comfortable with speculating on Novo Resources. In every discussion board over the several decades I've invested, there have always been the posters that were Uber-bullish, and the ones Uber-bearish... I always wondered why the bearish lot would continue hanging out on a board after they professed they were selling all their shares (usually, notably at bottoms). But they did however hang out for unknown reasons.
Anyway, speculating is ALWAYS a risky endeavor, and throwing stones at management is the USUAL behavior of those with volatile emotions when they are burned. As Jesse Livermore advised, it's better to sit tight than try to trade the markets.
Over the decades investing in speculative juniors, I've used the "shot-gun" approach (not advise)... let's say out of 10 speculative holdings (I usually hold between 40-50), but for illustrative purpose, 10 speculative stocks all with excellent potential and good management, with the expectation a few will GO BUST, a few will break even, a few will outperform, and 1 or 2 will become XX baggers or even in my experience XXX baggers when a secular bull market (not a bear market) is in play (as it has been since the double bottoms in Gold in 1999, 2001... with intermittent cyclical bear markets).
Novo Resources has been one of my long-term holdings bought in the initial years and added to (never chased) at "significant dips" based on its potential (not based on popular bearish sentiment as expressed in discussion boards).
As such, Novo Resources is
1) a company focused on Gold exploration and mining... check!
(Of course you would only invest in a potential Gold mining and exploration company if you believe that Gold prices will rise in the future... some seem to have zero clue on that requirement).
2) It's a fact that high-grade Gold deposits have been discovered in the Pilbara and Novo has a lot of exposure to up the likely hood it has ample gold deposits on its properties that could eventually (Gold price cooperating) will result in SIGNIFICANT revenue for the company.
3) All important, Novo has an experienced management team... not a bunch of greenhorns that proclaim themselves or promoted as "experienced". Naysayers thrown aside, Novo's management team has extensive experience in the mining industry and has a track record of success in exploration and development.
4) Novo's Pilbara Gold projects have significant exploration potential, and the company is actively exploring other areas in Western Australia for Gold deposits with the potential for significant growth... check!
So as I see it, Novo remains a viable SPECULATIVE stock (speculative means speculative), especially for those that have not chased price (as most investors who listen to people in groups animated by bullish and bearish sentiment do), but instead have accumulated shares on SIGNIFICANT dips (as identified on charts) in balance with their other speculative and not so speculative stocks in their portfolio.
As always, speculating and/or investing in ANY mining company comes with inherent risks, such as exploration risks, production risks, and commodity price risks. Duh??? Speculating and/or investing also comes with regulatory and political risks... Duh??? (see consequences such as labor shortages/costs, material/operating input costs, mining permits, etc pertaining to the "scamdemic" lock downs for example). Speculating and/or investing also comes with the reliance on Gold prices in comparison to input costs (over lapping with lockdown consequences) such as energy and other commodities, equipment, labor costs, etc... which can impact profitability and cause an environment of volatility and unpredictableness... Duh???
Anyway, for those that focus on calculated risks with a longer-term perspective, who study market fundamentals that affect the price of Gold, those that use a "shot gun" approach with dozens of reasonably well managed companies (under various circumstances), those with the patience and resolve to sit tight, then Novo Resources is one of many Gold mining and exploration companies that offers speculators an opportunity to invest in the Gold industry. Again, only if you believe that the price of Gold is likely to increase in the future (like I do), investing in a company like Novo (key word) could (likely in my opinion) provide excellent exposure to (imo) appreciation in the price of Gold.
This is because (I believe) Novo's Pilbara Gold projects with their very unique geological models, likely pose as significant assets for the company. It's not as if Novo has not already identified high-enough-grade deposits (Gold price dependent) giving Novo the potential to result in significant revenue for the company as Gold prices rise.
As well, it's not as if Novo hasn't already identified significant exploration potential... it has and continues to (Anyone study how many failures De Grey had before it finally started hitting pay dirt at its Hemi property? That was one of my recos when it was a couple cents at my Gold group. Becher deserves the same patience - see below). Despite the usual pessimistic naysayers, the company has and continues to actively explore other areas in Western Australia for Gold deposits, and this exploration may lead the additional discoveries of Gold deposits AND to additional "high-grade" Gold-price-dependent deposits. The company's success in finding such additional Gold deposits, the likelihood that Gold will soon rise in price significantly, may lead to SIGNIFICANT growth in revenues once the Golden Eagle mill is restarted.
Quickly, I would describe the Becher deposit which consists of a collection of Gold-rich conglomerates as being a potentially significant Gold project. Novo's strategy to develop an economically viable mining operation by conducting extensive exploration, geophysical surveys, and drilling activities to determine the extent and quality of the Gold mineralization has resulted in significant Gold mineralization (despite the naysayers), and Novo's continued efforts to advance the project despite the risks, appears to be on track (using DeGrey's progression as a model) to being a mineral-rich region located next door to De Grey's Hemi property. Recall that De Grey's Hemi Gold deposit took 2 years from its initial discovery in Dec 2019 to Dec 2021 of actively drilling and conducting exploration activities to delineate its 10.1 million ounces of Gold which continues today. News flash for the pessimists, estimating a mineral resource involves significant geological and technical work, including drilling, sampling, and analysis, and the process can take a lot of time to complete accurately. And some (rookies) are already throwing in the towel on Becher... lol. Yes granted, both Novo and De Grey have significant potential, yet their prospects are DIFFERENT. Novo (by in large with its vasts holdings) is exploring in relatively under-explored regions with a mill and strong cash position, while De Grey has a larger resource base and is further along in its development process.
Finally, how many other speculative stocks have a mill not being reflected in the share price? Please name them. In fact, the Golden Eagle mill processing facility acquired in 2017 and located in Nullagine is a significant asset for Novo, as it is a key component of the company's strategy to extract Gold from its large land holdings in Western Australia. For anyone adept at math, the replacement cost over the almost 6 years from purchase of the mill has almost tripled. Investors seem to forget that this mill has the capacity to process up to 1.5 million tonnes of ore per year and is designed to recover Gold using its gravity-based system. Gravity-based processing is the method of extracting Gold that uses the force of gravity to separate the Gold from other materials in the ore. This in comparison (for anyone knowledgeable on the subject) is a relatively low-cost (Gold price and input cost dependent) and efficient method of extraction, as it does not require the use of chemicals or expensive equipment.
Anyway, I'll leave it at that as I'm certain this will piss off many of the nay-sayers, and to which I won't bother responding. "NovoSerious" over and out...
@AUinvestor @afarmer Thank you...
I should add that there is nothing like a rising price of Gold to increase a company's potential for success (and by extension shareholders' success) by helping the company to increase profitability of its mill being put back into production (once mining permits have been approved...patience), giving the company the additional capital to improve the quality and size of its resource base, change the perspective of volatile investor sentiment from one of weakness of management to one of strength in the management team, to increase the company's financial stability, to increase its operational efficiency, and increase its ability to access capital. Seen this cycle many times... best for management to ignore the back-seat divers.
@AUinvestor @Haskaps Thanks for the kind words... first we need Gold to launch which I've been working on the details soon to be released in my Gold group. Then we need more time on drilling and subsequent drilling results... then we need the permits hopefully by the end of this year. If as I believe, the Gold price will shock and awe those having thrown in the towel on Gold exploration companies having sold near bottoms, then it will be another case of "wash, rinse, repeat". My advice to self is to give this more time to unfold, especially with the setbacks the lockdowns brought upon the mining sector.