Intriguing Pullback Opportunity in NOVO RESOURCES COR (OTCMKTS:NSRPF)


NOVO RESOURCES COR (OTCMKTS:NSRPF) may be an awfully interesting name to watch here. The stock has been beaten up over the past few sessions, down as much as 35% in a week. But this stock has also been on fire if you step back and look at the larger trend: shares are up over 500% since June. This is the type of pullback you hope to see if you want to find an entry point in a hot play like this one.

The latest from the company is a fresh update on exploration activities at the Purdy’s Reward tenement, a key tenement within the farm-in and joint venture Novo has with ASX-listed Artemis Resources Limited and part of Novo’s greater Karratha gold project in Western Australia. The company also just announced that its key project has been granted a 20,000 ton “excess tonnage permit” for the extraction of a bulk sample by the Western Australian Government’s Department of Mines, Industry Regulation and Safety.

NOVO RESOURCES COR (OTCMKTS:NSRPF) trumpets itself as a company focused on the evaluation, acquisition, and exploration of gold properties.

Indirect subsidiaries of NSRPF hold a 100% interest in the Beatons Creek gold project, a 70% interest in properties surrounding Beatons Creek and Marble Bar, a 100% interest in the Blue Spec gold-antimony project, and options covering approximately 400 square km over the Mosquito Creek Basin, all in the Pilbara region, Western Australia. Novo also controls a 100% interest in approximately 2 sq km covering much of the Tuscarora Au-Ag vein district, Nevada.

According to NSRPF materials, “Novo’s focus is to explore and develop gold projects in the Pilbara region of Western Australia and built up a significant land package covering approximately 10,000 km2. Novo also controls a 100% interest in approximately 2 sq km covering much of the Tuscarora Au-Ag vein district, Nevada.”

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As discussed above, NSRPF could be an interesting pullback opportunity on this dip as the stock finally takes a break following its huge gains over recent months. The company just put out a new update on operations as it looks to work toward monetization of its Karratha project in Australia.

According to the release, “conglomerate-hosted gold mineralization at Karratha is extremely nuggety and requires exceptional exploration techniques for its evaluation.” That is why the company is moving toward bulk sampling, and the excess tonnage permit is of such value. However, this may add to the cost structure of the project, which is likely why shares have been a bit weak in recent sessions.

“We were fully aware from day one that the Karratha gold project is a coarse gold system,” commented Dr. Quinton Hennigh, President, Chairman and a director of Novo Resources Corp. “The fact that numerous prospectors have been detecting gold here since its discovery is compelling evidence. While the ability to recover consistent, quality sample material using large diameter drilling has not yet been accomplished, trenching appears to yield acceptable bulk samples for test work. Bulk sampling at the surface will be the most critical means of determining the grade, processing characteristics, and viability of this deposit. We look forward to working with Artemis on ways to fast-track a bulk sampling strategy at Purdy’s Reward.”

Traders will note around -30% stripped out of shares during the past week. However, NSRPF has a history of dramatic rallies and is still up over 500% in the past 5 months. What’s more, the name has registered increased average transaction volume recently, with the past month seeing nearly 110% above its longer-run average levels.

Currently trading at a market capitalization of $608.1M, NSRPF has a significant war chest ($13.7M) of cash on the books, which compares with virtually no total current liabilities. The company is pre-revenue at this point. We will update the story again soon as developments transpire. Sign-up for continuing coverage on shares of $NSRPF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $NSRPF, either long or short, and we have not been compensated for this article.