Nova Minerals (ASX:NVA) share price sinks as gold estimate grows

The Nova Minerals Ltd (ASX: NVA) share price is sinking after the mining company upgraded its gold estimates for its flagship gold project.

Mitchell Lawler

Mitchell stumbled upon the concept of investing when in high school, devotedly urging his parents to put some money into a handful of technology companies with increasingly popular products among his demographic – many of which have gone on to great success. It wouldn’t be until 2017, some five years later, that Mitchell became an investor of his own money. Having studied and worked as a mechanical engineer in the building services industry, Mitchell takes a methodical and analytical approach to evaluating businesses. Rather than relying purely on numbers, Mitchell drills beyond a company’s metaphorical mantle to unearth obscure patterns or competitive advantages that would go otherwise unnoticed. His expertise resides within areas such as software, consumer goods, and building services equipment. However, his quest to find quality companies that set the industry standard and flex some degree of an impenetrable position has no limits – small cap to mega cap, cosmetics to healthcare – if it’s an exceptional business it’s on his radar.

Published April 7, 2021 1:34 pm AEST

Confusing some shareholders today, the Nova Minerals Ltd (ASX: NVA) share price is sinking, despite the mining company upgrading its Korbel Main resource estimate.

Perplexingly, the Nova Minerals share price has experienced a 9.1% selloff to 15 cents per share. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has added a further 0.32% at the time of writing.

Man in hard hat rolling his eyes at a falling ASX share price. builder — Image source: Getty Images

Expectations meet reality

I think it was Shakespeare that said "expectation is the root of all heartache", which is a bit of an exaggeration in this case – but the point holds true. The reaction to Nova's update is likely the consequence of expectations. With that being said, let's go through the details so you can make your own mind up.

The update that sparked the share price fall relates to Nova Mineral's Korbel Main deposit. Located in Alaska, Korbel forms part of the company's flagship Estelle gold project. Nova now estimates the deposit to contain 4.7 million ounces of gold.

The revised update is the result of an additional 48 diamond core holes drilled last year. As a result, independent consultants determined an increased inferred mineral estimate. Additionally, the resource was found to start from the surface and is open along strike to the North-West and South-East.

Furthermore, ore sorting results indicate a substantial grade increase, which assisted in lowering the reported gold cut-off grade to 0.15 grams per tonne. This is a reduction from the previously reported 0.18 grams per tonne cut-off.

Nova Minerals share price unfazed by further potential

On top of the resource upgrade today, Nova Minerals pointed to further potential in unexplored targets. Specifically, Korbel blocks C and D, Cathedral, You Beauty, Isabella, Sweet Jenny, and other priority targets were not included in the upgrade.

The company insisted these targets could potentially provide substantial resource growth across the Estelle gold project. Nova Minerals CEO Christopher Gerteisen commented further:

Estelle is a district scale project, and Nova is on a mission to unlock it, with multiple exciting targets that offer huge potential to continue growing the overall resource inventory across the project area.

Mineralisation remains open in multiple directions and we have numerous well-established targets, some with historic drilling such as RPM, which we plan to drill and release a Maiden Resource on this year.

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