THH – New Novo after NFG sale – April 12, 2022

2 thoughts on “THH – New Novo after NFG sale – April 12, 2022”

1. Greg says:

   April 12, 2022 at 3:46 pm

   This is great news. Before the sale Novo was being valued almost zero for their exploration potential. Now they’re in great shape to really open up their potential. Based on what they spent last year they should be able to fund current operations plus exploration for the next three years. I can’t think of a single explorer I own that is in such good financial shape.

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2. Tyler says:

   April 12, 2022 at 4:38 pm

   This is fantastic news for Novo and its shareholders. They unlocked an incredible return on NFG shares to cash up the company, will eliminate all debt (8% interest rate gone), can explore high profile targets sooner, and can finish feasibility work to get the Golden Eagle mill some better material. If they believe their massive land holdings in the Pilbara are worth multiples in the future, then it was the right move to sell NFG and invest in the Pilbara (AND they already have an operating mill to monetize chunks of their land package).

   If this move gets the Golden Eagle mill operating closer to 100k/oz per year then it should 100% sustain Novo’s exploration potential without needing to raise any more external capital. Double win on the dilution front and ensures existing shareholders can retain more of the huge asymmetric upside in the Pilbara region.

   NFG likely has big upside potential too, but Novo is making the right decision. The value of the Pilbara is super cheap right now, whereas the Queensway project is valued much higher. They sold a good asset at a higher price and are doubling down on a huge upside asset at a dirt cheap price. I like that trade-off all day long.

   I will be adding to my existing large Novo stake. I wish they had sold the NFG stake sooner, but I understand there were restrictions on those shares given that they invested in them only 2ish years ago. Regardless, a smart capital allocation decision by the team and should not only restore some confidence but hopefully lead to better mining numbers and positive drilling activity.

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