NVA has a general strategy of trying to monetise assets if commodity sentiment points to future upside. This is better than letting potentially good prospective assets sit idle. They are also trying to do this cost-effectively by leveraging assets that have historic data and results. That's certainly more cost-effective the pure greenfield exploration.
In essence it's also a many irons in the fire approach. It can be complex to manage but it can deliver potentially large upside for investors. They are prioritising their efforts on the more prospective assets (and putting others on the backburner ).
NVA haven't lost their way but market conditions have had a big impact on progress, particularly with the Snow Lake TSX-V IPO. H2 of 2018 was a bad period for IPOs (from my observation of IPOs on TSX-V) and it would have been suicide to kick-off an IPO in those conditions. Fortunately conditions are improving and capitalisations for Snow Lake's peers in Canada have lifted substantially in the last 2-3 weeks - see:
View Snow Lake (Thompson Bros) as a short-medium term asset, that should be capable of delivering cashflow from a 2020/21 timeframe ( conservatively 2021 ).
They are still on the same timeline they announced in 2018 ... i.e. to progress the project to full economic analysis by the end of the year.
They are essentially prioritising exploration within the the scope of their existing exploration target ( which is based on their own drilling ) rather than exploring historic ground they haven't yet followed up with more recent drilling.
Priority here is to get an economic analysis (i.e. feasibility study) as soon as possible so they can start generating cashflow in the 2020/21 timeframe they were originally proposing.
They'll identify and develop other economic deposits later ( add tonnage and scale and extend mine life later ).
The IPO will allow Snow Lake to be self-funding from capital raised on the TSX-V rather than going back to NVA shareholders for all of the funds.
Snow Lake should be a nimble project, quick to put into production. Believe me ... I have done my own calculations looking at a range of production/cashflow scenarios. There is certainly good potential for $$$ there. The local community is also supportive. Smaller scale should mean cheap to fund and lower technical risk to build.
View the Alaska projects as medium-long term assets that have the potential to deliver significant upside over a 5-year period, particularly for Estelle. Here's a summary of where we are at with the Alaska projects mentioned in the presentation:
Estelle - very strong historic exploration (conducted by Millrock Resources and Canadian major Teck Resources ). Strong potential for a number of very large gold deposits. For potential look at the peer developers: Victoria Gold ( 2.66 Moz Gold, MCAP CAD $376M )
Bowser Creek - I don't expect much money or effort to be expended here. They will essentially do some desktop analysis of historic data and geophysics/survey data held by the state of Alaska and they will use this as the basis for planning preliminary exploration. This should be low cost ( following up historic exploration by walking over the property and collecting samples ).
They are starting to look at this project because silver prices often move up when gold prices do. Some initial investigation (done cheaply) will allow them to determine if it should be given further funds or priority ( depending on outcome they could even farm it out, but still retain some of the upside ).
Officer Hill is a somewhat accidental sleeper project. The company has held it under JV with Newmont since 2005, with Newmont leading the exploration ( however Newmont essentially let the project sit idle all of that time whilst they focused on their Tanami expansion projects ). Essentially no money or effort from NVA's perspective from 2005 to 2018. Newmont was only doing very limited work in the background.
They have other assets in the Alaska JV but there is no activity on them currently. They also have a High Purity Alumina Project ( but reduced their stake in this around 2016/17 to focus on Thompson Bros instead ).
NVA Price at posting:
2.1¢ Sentiment: Buy Disclosure: Held
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