Is Novo Resources Corp (OTCMKTS:NSRPF) A Rebound Play?

Could Novo Resources Corp (OTCMKTS:NSRPF) be a rebound play after a 50% pullback from record highs?That’s the big question we intend to tackle, as the mining company moves an inch closer to bringing online some of its high priority gold and diamond projects.Movement in Stock Nova Resources has been in free fall after touching a 52-week high of $7.08 a share late last year. After failing to close above the mark on two attempts, sellers have consistently pushed the stock lower. However, momentum appears to be building up, seen by trading volume, as the stock tries to make a comeback from the $2 a share handle. NSRPF Daily ChartGiven that the stock trading in a precarious position, it needs to close above the $3 a share handle, if it is to erase a good chunk of losses accrued over the past few months. A close below the $2 a share, on the other hand, could see the stock dropping to the $0.7 handle, a critical support level.We believe Novo Resources is undervalued at current trading levels given the potential and size of its mining operations, especially in Australia.Company ProfileNovo Resources is a mining company that explores and develops gold projects. Together with its subsidiaries, the company evaluates explores and acquires gold projects in Canada, Australia, and the United States. Its flagship project is the Pilbara gold project located in Western Australia. The company has built a significant land package covering about 12, 000 sq. km.The company also has a farm-in and joint venture with ASX-listed Artemis Resources Limited for exploration activities at Purdy’s Reward as part of its greater Karratha gold project in Western Australia.Latest DevelopmentsLate last year, Novo Resources completed a farm-in exploration expenditure commitment on 38 tenements in joint venture agreements signed with Artemis Resources Limited. Under the contracts, the two companies through their subsidiaries are to contribute to further exploration on a 50:50 basis.Novo is the manager of the joint venture tasked with the responsibility of managing operations.

“We are excited to continue progressing exploration efforts in the Karratha region of Western Australia. We look forward to partnering with our new joint venture partner, Artemis Resources, in order to advance the Karratha gold project,” commented Novo Resources Chairman and President Dr. Quinton Hennigh.

Purdy’s Reward UpdateIn December, the company provided an update on ongoing works at Purdy’s Reward. According to the company, they have completed 3,294 meters of scout diamond drilling in 69 holes testing, and about 1,550 m strike in the targeted conglomerate sequence.The company has also completed a study of in Situ gold mineralization project, which confirms Purdy’s reward is a coarse gold system. It is currently assessing appropriate sample size. Results of the scout drilling program are of great importance, given that they assert continuity of the conglomerate sequence. The data also indicates that Purdy’s Reward is a nearshore fluvial depositional environment.

“Novo does not consider these results surprising given the nuggety nature of gold mineralization at Purdy’s Reward. Given the small diameter of diamond drill holes (8.5 cm diameter), the odds of encountering gold nuggets are small. Notably, these four drill holes are in close proximity to bulk sample sites containing appreciable gold as discussed above,” The company in a statement.

Novo Resources exploration and mining activities have also received a significant boost on the approval of a program of Works for exploration at the Comet Well, by the Department of Mines in Western Australia. The clearance paves the way for the company to commence exploration activities in the prospective area of the target.The Comet Well is a significant extension of the gold-bearing conglomerate sequence that covers an additional 5 km strike of the Purdy’s Reward. The company intends to begin bulk sampling and diamond drilling l to complement ongoing works at Purdy’s Reward

“Exploration to date has centered on Purdy’s Reward, pending tenement permitting, Aboriginal heritage access and government departmental approvals at Comet Well. With access now granted, Novo has the ability to access new, high priority target areas. We look forward to further exploring this unique gold system across a much broader footprint,” said CEO, Mr. Rob Humphryson.

ConclusionNovo Resources trading at the $2.4 handle presents unique buying opportunity given that the stock remains undervalued. Positive exploration data from Purdy’s Reward project underscores the fact that the company has a valuable asset on its hands that has the potential to generate significant returns shortly.Works approval at the Comet Well Program also provides the company an opportunity to explore the unique gold system broadly in pursuing maximum returns and shareholder value. The company needs to ramp up exploration and production operation at its critical projects if it is to have any chance of bouncing back on its way to 52-week high of $7.08.We will be updating our subscribers as soon as we know more. For the latest updates on NSRPF, sign up below!Disclosure: We have no position in NSRPF and have not been compensated for this article.