Novo on Sale
We clearly are at a major bottom. Even though gold is up some $130 from the low two weeks ago, it continues to climb a wall of worry. I’ve had a lot of email from readers angry that no one predicted how bad things would get and that worries me.
Markets go up and down. That’s the way they work. If you can’t handle that, you shouldn’t be in the markets. Whining about manipulation is an easy out. You can always blame someone, even if you have no clue as to who it is.
The tin-foil hat crews, the cheerleaders, have lost a lot of credibility. No one is going to forget how they were howling at the moon at $50 silver demanding that everyone sell everything they own to buy physical silver. Boy, they sure got quiet at $22 silver. That’s when they should have been telling people to buy, not mumbling about how there is more gold above ground than silver.
I didn’t get the bottom to the day or even month and I don’t care. Those who want to be critical never bothered congratulating me for calling the top to the day in March of 2008 or in April of 2011. Getting close is about as good as any of us are going to get. When you have a giant bottom that started showing extremes last November and capitulation in February, you have giant opportunity if you see it.
On March 14, 2013, King World News said, “Today legendary Jim Sinclair made one of his boldest predictions ever regarding the gold market when he spoke with King World News.
King World News also spoke briefly with legendary trader Jim Sinclair, who emphatically stated, “Gold is about to take out $1,600.” Sinclair then boldly predicted, “We may never see that $1,600 level ever again.” If that prediction from Sinclair turns out to be true it will go down as one of his greatest calls in history.
It took 9 trading days to drop below $1600 (March 25, 2013) When I read the KWN blurb on the 14th, all I could think of was, “I wonder what the odds are of him having to eat those words. It was a bold and great call indeed. It was also dead wrong. It happens to all of us.
One thing I know for certain is that the price of gold shares is more irrational than at any time in history, it’s not a conspiracy by JP Morgan, it’s not manipulation, indeed, Eric Sprott is one of the biggest sellers.
A lot of funds have been getting demands for redemptions and are in a liquidity crisis. They are dumping every share they can get a bid on. Sprott is doing it. Frank Holmes is doing it, Sheldon Inwentash is selling and every other gold fund is dumping. It’s not a conspiracy, it’s business. There have been four corrections in the last 30 years that had bigger drops in the same time frame. Markets go up, markets go down. Live with it.
I know that in the case of Novo, the biggest shareholder needs to raise money for another venture and has been dumping shares for months. He’s shooting himself in the foot. Novo is the real thing and every drill hole has tended to prove that. I think the stock would be $1.50 a share and the warrant holders would be thrilled to exercise $8 million worth if the biggest shareholder wasn’t standing on the price of the stock.
But on to Novo’s announcement. They released a 43-101 resource on May 1st of 421,000 ounces at a grade of 1.47 g/t. The company spent about $2.5 million on the drill program of 16,000 meters of RC and 478 meters of core drilling. They drilled off about 30% of a square km. Given that they only started drilling 14 months ago; it’s a nice resource. There was a time a year or two ago that a discovery cost of $6 an ounce would double or triple the value of a stock but it won’t be tomorrow.
Novo is in the process of permitting another 200 holes. The only thing holding the company back is money. Plans are for drilling another 20,000 meters of RC.
The market is at a historic bottom and one day soon or down the road, the rest of the investors will get it. Novo would be far higher in any normal market but this isn’t a normal market. When the big shareholder stops dumping shares, it will go up. Novo has the goods and more drilling will prove it.
We are biased. Novo is my biggest share position and they are an advertiser. Do your own due diligence.