Nova Minerals kicks off new drill campaign as analyst forecasts major share price lift

As it begins a significant drilling program at its flagship Estelle gold project in Alaska, a new research paper has concluded that Nova Minerals (ASX: NVA) is trading at a massive discount to most of its peers.

The research study produced by Martin Place Securities (MPS) found that Nova’s current market ratings are “abysmally low” against regional and local peers.

In particular, the study noted the market’s under-rating of Nova’s high-quality Estelle gold project, where a recent scoping study confirmed a very robust project with strong financial returns and significant exploration upside.

New drilling campaign underway

Nova will be looking to boost its value with a new drilling campaign underway at Estelle.

Designed as part of its pre-feasibility study program, drilling has kicked off at the RPM deposit. Additional rigs are being mobilised to commence drilling at the Train and Trumpet deposits in coming weeks.

Nova’s PFS stage campaign is aiming to drill approximately 15,000m utilising an average of three diamond rigs focused on both increasing the drill density of the resource and further growing the global gold resource.

The company has contracted the rigs to operate 24 hours a day on rotation, seven days a week, with the ability to change targets and individual programs based on initial drill core observations.

RPM area and Train targets

Most of the 2023 drill program will be focused on the RPM area with the aim to further infill and expand the at surface, higher grade resources at RPM North and RPM South and the very high priority 600m continuous target area linking the two deposits.

The drill program will also target the Train area where RPM-style mineralisation was discovered with the aim to define a third gold resource in the area.

Surface exploration mapping and sampling programs will also be conducted as part of the 2023 field season.

These will be primarily focused on the RPM and Train areas, as well as at the highly prospective three km long polymetallic gold-silver-copper system at the Stoney prospect.

To date Nova has drilled more than 90,000m at Estelle for 10moz at a US$11 per ounce cost.

2023 field program to add to robust mining study results

In mid-May Nova unveiled an aggressive Estelle 2023 field programme designed to follow-up the release of its robust Phase 2 Scoping Study.

The Phase 2 Scoping Study, which was based on a mining scenario aimed at boosting the higher grad.

It confirmed the potential for a commercially robust mining operation at Estelle gold with an 11 month payback period and strong financial and mining metrics.

Undervalued alongside its Alaskan peers

The MPS research note highlighted the market caps of Nova’s neighbours in Alaska’s rich Tintina Gold Belt.

It said stocks such as the newly-listed US GoldMining and the highly-rated Snowline Gold have obtained significantly higher ratings than Nova.

US Goldmining is currently sitting with a market cap of around $231.5 million while Snowline has a market cap of approximately $729.4 million. That is vastly different to Nova’s $52.7 million mark.

Nova’s share price currently sits around the $0.25 mark and MPS has forecast a 12 month share price target of $1, which it predicts could double in 24 month’s time.

Estelle a major gold opportunity

Estelle is located in Alaska’s proven and prospective Tintina Gold Belt.

The MPS research note has rated the 10 million ounce Estelle gold project as one of the world’s important undeveloped gold deposits.

Tintina hosts numerous substantial gold deposits, while several major deposits just outside the belt are considered to be amongst the largest undeveloped resources in the world.

The firm’s analysts believe there is considerable value to added via Estelle in comparison to its Tintina peers.

In particular, it noted the results of the recent Phase 2 scoping study which defined a very profitable $990 million pretax NPV project with low capital cost of approximately $882.1 million and intensity and a very attractive 53% IRR.

Trading at substantial discount

“Nova’s trade value is at a substantial discount to the US$654m NPV described in the Scoping Study and also against Tintina Gold Belt gold project developer peers with a discount that seems far too great,” the research note suggested,” the research note stated.

“Nova’s over 450 sq km Estelle `District’ scale project has the potential to sit amongst some of the larger deposits with four resources totalling 9.9moz and more to come near term.”

The Estelle Gold Project currently consists of four at surface mineral deposits with along strike and at depth mineralisation potential and over 20 other advanced prospects.

The company is currently moving towards a full pre-feasibility study which is due to be wrapped up by the end of 2024.