Nova Minerals set for take-off with analysts tipping major re-rate

• Think Equity analysts double Nova Minerals’ price target to US$50 per American Depositary Shares (ADS) driven by confidence in its Estelle gold and critical minerals project which has US government support
• Nova is trading at US$40 per resource ounce, well below the North American average of US$278, as the company works towards pivotal catalysts
• As it advances toward its goal of gold and antimony production by 2026-27 Nova has started procuring essential mining and processing equipment

Special report: Analysts have doubled their price target for Nova Minerals to US$50 per ADS, highlighting growing confidence in the dual-listed company’s ability to unlock value across its Estelle gold and critical minerals project in Alaska.

Estelle is one of North America’s largest undeveloped gold assets, with a current JORC resource of 9.9Moz, now bolstered by a US Government backed antimony discovery.

Aiming for production by 2026-27 the company has started a procurement program of key mining and processing equipment.

Strong tailwinds

Nova trades at an enterprise value (EV)/resource ounce of just US$40/oz, a fraction of the North American peer average of ~$278/oz, Think Equity says in its research note.

This suggests substantial re-rating potential, especially as catalysts line up. Upcoming milestones include deployment of US government funding, the maiden antimony resource estimate and a pre-feasibility study (PFS) for the gold assets.

Nova is also looking forward to results from its extensive summer drill campaign aimed at growing the resource across the 514km2 project in Alaska’s prolific Tintina Belt.

The Think Equity note follows independent RFC Ambrian analysis from earlier this year which identified Estelle as one of just two US-linked antimony projects with near-term production potential, the other being A$4.3 billion-capped Perpetua Resources.

Nova’s runway to production includes a low-capital starter mine at the high-grade 1.24Moz RPM deposit. This is designed to deliver early cash flow while self-funding expansion across the broader district, including the bulk-tonnage 6.64Moz Korbel deposit.

But, as noted by Think Equity analysts in their report, it’s Estelle’s antimony potential that could be the real game-changer.

Last month Nova’s US subsidiary received a US$43.4m (A$65.5m) non-dilutive award from the Department of War (DoW).

The DoW funding will allow Nova to fast-track progress at the Stibium prospect, which has returned samples up of up to 60.5% antimony, and the development of a fully integrated US supply chain for military-grade antimony trisulphide.

The funding also gives Nova access to more than A$86.3m in funding, including A$17.5m in cash – boosted by July’s US$12.1m Nasdaq capital raise – and A$3.3m in liquid investments, as reported in its recent quarterly.

Downstream refining at port

With its solid cash position, and with highly encouraging antimony ore sorting and gold recovery work underway, Nova is fast advancing refining capacity at Port MacKenzie near Alaska’s largest city Anchorage.

The company has begun procuring essential mining and refinery equipment for antimony operations, as well as exploring partnerships to secure additional antimony supply.

The moves on the processing front follow Nova receiving permitting for the commercial operation of a US critical minerals production hub near the deepwater, commodity focused port, alongside support for an all-weather road that will fast-track development.

CEO Christopher Gerteisen said the Think Equity note highlighted the rare opportunity for investors to get exposure to near-term defence metals and gold upside:

“Our project is right at the centre of efforts to bring domestic antimony production back to the US,” he said. “We’ve been a first mover in that space and being located on state land gives us a much more streamlined permitting path, unlike other projects on federal and native corporation land.

“Additionally, our antimony prospect is distinct from our gold deposit, which allows us to advance it on a standalone, parallel path. That means lower CAPEX and the ability to move into production faster.

“I don’t think the market has yet caught up with the inherent value in what Estelle offers – a large-scale gold project complemented by an antimony asset that directly aligns with US policies.”

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Price revision

The research report has a price target of US$50 for its American Depositary Shares (ADS) trading on the Nasdaq. At the time of the report’s release these were trading US$31.96, representing a potential 56.4% rerate.

The report was finalised before the completion on October 28 of Nova’s 5-for-1 ADS forward split which reduced the ADS ratio from 1 ADS to 60 ordinary shares down to 1 for 12. Nova’s ADS price on the Nasdaq is now US$7.56.

On the ASX Nova’s price is ~98c – up more than 25% in last week’s trade. Think Equity’s ADS price target is A$1.25.

This article was developed in collaboration with Nova Minerals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.