Post by
mrbubba on Dec 20, 2020 3:32pm
THE UPSIDE
The downside is the fact that we could all lose every last penny we invested in this stock. That is relevant. But the potential upside (within reason) is what I'm looking for too.
We know the mill can process 5200 tons per day. What happens if we cut the Beatons Creek portion to 2600 tons and then substitute in 2600 tons from Karatha at the LOW end of the grams per ton QH referred to in the November 2018 news release? Keep in mind, that news release had an upper sample of 792 grams per ton. Consider these numbers:
2,600 tons per day from BC
x 2.5 grams per ton (undiluted grade from BC)
6,500 grams per day (subtotal from BC)
2,600 tons per day from Karatha
x 92 grams per ton
239,200 grams per day (subtotal from Karatha)
245,700 grams per day TOTAL from BC and Karatha
/ 31.1 grams per troy ounce
x 340 days per year
2,686,109 ounces per year
x $800 profit per ounce (assumes AISC is 1,000.00 per ounce, high)
= $2,148,887,460 net income per year (that’s $2.1 Billion!)
Yes, admittedly seems far-fetched.
For perspective, keep in mind that Barrick’s 2019 net income was about $900 Million off of 5.47 million ounces of gold.
So, there is indeed "blue sky potential" with this company. The only question in my mind is how our boys will tweek the mill processing to maximize production without tearing it up.
Comment by
TXRogers on Dec 20, 2020 4:24pm
Like I said before, just a standard mining operation at BC puts Novo as intermediate producer with little risk. https://stockhouse.com/companies/bullboard?symbol=v.nvo&postid=31565054 Tx
Comment by
SniffnTheTears on Dec 20, 2020 4:25pm
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Comment by
mrbubba on Dec 20, 2020 5:36pm
Makes sense to me. But it seems to me if all this works out Novo will need another, large-capacity mill.
Comment by
TXRogers on Dec 20, 2020 5:44pm
Probably will in the future. And one that accommodates refractory gold ore as well. Tx
Comment by
tbnorthstar on Dec 20, 2020 5:54pm
Plenty of upside here for sure but maybe we wait and see how long it will take to a 100,000 ounce per year run rate. Sorting material coming sometime down the road. A lot of tinkering to be done out in the field commencing in April.
Comment by
mrbubba on Dec 21, 2020 10:59am
No doubt - but if you're a betting man you gotta take the UPSIDE into account too, which in my view isn't necessarily that far-fetched. A one hundred thousand rate will indeed be a welcome start.
Comment by
goldman88 on Dec 21, 2020 9:19am
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