Loading ...NVO HALTED AND DOWN 18%
‘Bunch of Nuggets’
“If it’s true, this is massive,” Brent Cook, a Rockville, Utah-based geologist and mining stock analyst who booked a flight to the site three days after Novo announced the discovery. For the moment, though, the company’s valuation — C$703.6 million ($559.5 million) — is “just absurd,” says Cook. “We’ve only got a concept, one small excavation, and nuggets scattered across hundreds of kilometers. It could turn out to be a bunch of nuggets that are only good for fossickers,” he says, using industry slang for prospectors.
The first test on land south of the coastal town of Karratha looked good. Employing two men, a metal detector and a jack hammer, Vancouver-based Novo extracted gold nuggets as long as 4 centimeters (1.6 inches) from an exploration “trench” little more than a half-meter deep. That tiny sample hinted atore grades that could be among the highest of any operating mine in the world.Such caution has failed to damp the euphoria driving Novo, whose backers include the world’s second-largest gold producer Newmont and billionaire precious-metals investor Eric Sprott. Sumitomo Corp. is partnering with Novo to study a site further east in a deal that could lead to the Japanese trading house taking a stake in the company.