Novo Resources Update – Follow Up Questions On The Recent News

December 22, 2017

The Novo stock has taken a hit over the last 2 trading days since the news was released. Quinton Hennigh, Novo’s President and Chairman joins me to address some of the questions on the back on the news. We discuss how Quinton and his team will continue to explore the project, address the fine gold component, and look big picture at the whole land package Novo has assembled.

Click here to visit the Novo website and read the recent news.

Click download link to listen on this device: Download Show

    Dec 22, 2017 22:31 PM

    2 – HotCopper board comments…

    1. I recall that he gave DL full credit for getting that 20kt permit in a past interview.
    QH sounded a bit miffed if not shocked by the market’s reaction to the NR. I’m glad he’s not taking it lightly.

    2. Odd that QH makes a big point of the need for more bulk sampling to understand how/where/if to best mine conglom, but fails to make any mention of his companies JV partners activities in this regard. I would have thought the 20K ton sampling program under way by ARV now would be encouraging news to investors still waiting answers & confirmation regardless of which company they hold?

    Dec 22, 2017 22:33 PM…

    @Dunite @CriticalInvestor, The end was when they acknowledged that it was a Nome style marine placer, This is the last nail in the coffin and you are probably correct in the 2-2.5 range. Artemus is a better investment bet with the mill and hard rock resouces in their portfolio.

      Dec 23, 2017 23:29 AM

      I don’t have much knowledge of the Novo story but the chart tells me that 1.50 should not be a surprise.

    Dec 22, 2017 22:36 PM

    Bob Moriarty: The Bitcoin Bubble Has Burst

    CEO Technician: One final question. If someone was completely new to the market and came in today and saw Novo trading in the C$3.70 area in Canada should they buy today?

    Bob Moriarty: If someone is new to the story today they shouldn’t buy Novo, they should buy Kirkland Lake Gold (NYSE:KL, TSX:KL) because they own so many Novo shares and they are an extremely well run company that have several other exciting projects. Kirkland Lake is a less leveraged bet on Novo.

      Dec 22, 2017 22:10 PM

      Kirklsnd Lake also does not dilute out regular shareholders by giving thousands of options. (Actually millions of options)

        Dec 23, 2017 23:53 PM

        Agree about Kirkland Lake.

    Dec 22, 2017 22:43 PM

    Novo Resources Is Not Worth $600 Million – Dave Kranzler

    I want to emphasize that neither me nor this executive are asserting that Novo is not for real. But, at its peak, at $1.3 billion market cap despite the complete lack of evidence of an economic gold deposit was reminiscent to me of the bubble.

    As a point of comparison, Seabridge Gold’s (SA) KSM project has a 40 million oz gold reserve (proven/probable) resource, yet its current market cap is only $638 million. Compare this to Novo’s peak market cap ($1.39 billion) and its current market cap of $601 million.

    While Novo may eventually advance Karratha into an economically viable mining operation, this end result will take several years to become a reality. The process is riddled with innumerable embedded risks – some known and many unknown – inherent to the exploration and development of a precious metals mining project.

    Kudos to those of you who still have a paper profit in Novo. My best advice would be to take the profit and pay your taxes on the gains or use the gains to offset losses you can take in other stocks before the end of the year. If you bought it at a price higher than today, you can try to trade your way out of the big loss because I’m sure there will be plenty of two-way volatility in the stock.

    From my perspective, and based on the price at which I believe offers a reasonable risk/return opportunity, I won’t consider investing in this stock until the price is below $1. Even at $1, subtracting the shares represented by in-the-money options/warrants at the current price, the market cap is $146 million. That is just too high given what is known at this point about the property.

      Dec 22, 2017 22:23 PM

      thanks for the article…………

      Dec 23, 2017 23:18 AM

      Novo has at least 8 km strike of Vits grade and thickness at surface. Mining cost couldn’t be over $100 an ounce. If you assume .4 meters thick and 8 km strike and 16 g/t gold., you can work out the numbers.

      Seabridge has a sub economic project that will never go into production.

      If Dave Kanzler wasn’t recommending Novo when it was below $1 and didn’t say it was expensive at $9 who is he to jump on the bandwagon after a 50% decline?

        Dec 23, 2017 23:58 AM

        Hi Bob, Dave’s article reminds me of folks posting trades several months after the fact.

        I see investors are jumping on your anaconda mining ANX ANXGF pick. It being your #2 pick behind Novo stands out.

          Dec 23, 2017 23:13 AM

          Anaconda has and had a great story that simply needed telling. It was nothing but a communications issue. Wonderful potential and a ton of news coming out in January.

          Dec 23, 2017 23:32 PM

          Kranzler came out early and was critical of the over 1bil valuation and thought until the resource was proven that holders of Novo may want to book some profits and maybe buy back in, in the $2 area. With the latest releases, he has revised downward to $1, but still is leaving it open for a big resource as a possibility if proven.

        Dec 23, 2017 23:35 AM

        Robert, the madness of crowds works in both directions (as you know). So an overshoot to the downside should not be too surprising. Of course, the economics you point to along with gold going much higher could put a stop to the decline well before any chart might suggest.

    Dec 22, 2017 22:44 PM

    Thanks Dr Hennigh and Cory. This project sounds worthwhile. Requires patience.

    Dec 22, 2017 22:34 PM

    I do not own a large number of stocks so I can follow their progress closely. When you see a stock selling off the first thing that comes to your mind is where on earth is this torrent of selling orders coming from.

    Now after learning my lesson I realize who cares I must get out of the way. Usually by limiting my losses I have become a better trader. The price to get in or out is miniscule in comparison to getting beaten up by the fear. FDR used to say all we have to fear is fear itself for me that is one of the best ways to win in the markets. Get out before the fear becomes triggered stop losses, margin calls, or forced selling. DT

      Dec 22, 2017 22:18 PM

      DT – Some good advice there on getting out of the way if sentiment shifts. The stock can always be bought back again and often at a much better value proposition.

        Dec 22, 2017 22:20 PM

        Of course, it should be noted that exiting a position completely puts one at risk of missing an explosive move to the upside if a massive exploration results drops on the market. This is why I prefer trading around a position by trimming or adding by 20-50% tranches. However, for now I’m Novo-naked without a position. I’d be interested in getting back into it though if things get overdone to the downside. I still like the speculative nature of what they may be sitting on.

          Dec 22, 2017 22:22 PM

          Really I liked Novo before all this Pilbara gold rush started, but it wouldn’t have demanded such a premium in this current environment. It is the narrative and huge potential that sent it up into the stratosphere. It still will be fascinating to see how things proceed.

            Dec 23, 2017 23:19 AM

            Lots of interesting commentary from a number of investors, geologists, and newsletter writers in the NVO room. There are 30-50 people at a time in there most days.


    Dec 23, 2017 23:28 AM

    HSC: Discovery Watch Dec 22, 2017: Who has Australia’s best Nugget Patch? with Jim Goddard and John Kaiser