I just don’t understand what is going on with this stock. It has done nothing but gradually fall for years while they discover one new rich deposit after another. I think that there will be mining on their claims for generations, there is so much ore in fat, rich vein clusters, though the veins seem to be often discontinuous as is often the case in the California Mother Lode. There is no resource estimate yet, and drilling is relatively shallow, but there is obviously millions of ounces just at the shallow levels they have drilled so far.
I have an abnormally large investment in NFGC and so I am interested to hear if anyone here knows anything bad about the company that I have missed. It is Eric Sprott’s largest investment, and like me he has put in more money as the stock price kept falling. At a guess I would say that it is worth 1.5 billion but the market cap is about one third of that.
The stock price has often fallen on strong up days for gold.
Is it the young management and the unusual (or innovative) prospecting methods - seismic surveying, surface stripping to expose their most impressive bonanza deposits - they are using? Could it possibly be the Lassonde Curve in operation to an absurd degree?
Well of course it’s unprofitable. It is an explorer/developer and is years from actually mining its orebodies. The value of the company lies in its gold resources in the ground less its exploration expenditures to date. Although there has been no resource estimate yet, there is already a large known body of hugely profitable vein systems which are at a multiple of the size they had years ago when the stock price peaked soon after the initial discovery. While they discovered most of this very-high-grade ore over the last four years, the stock price has only gone down. Is the gold mine market so deeply asleep that no one is watching? It feels a lot like yr. 2,000 to me. I think we are at the start of a significant PM miners’ bull market. No one at all seems to be paying attention to the miners, while their intrinsic value has been climbing for years.
The traffic on this board is another indicator. We were getting a dozen or more posts a day as I remember during the early 2,000s when the last bull was in progress. Big moves always start from lack of interest and low valuations.
I remember making a speech at my NYeve party in 1979. I predicted a big bull market in stocks. My remarks were greeted with catcalls and disbelief. Anyone with stocks had been losing money for years. Due to lack of interest, tomorrow had been cancelled. I believe we are there again with the miners.
Thanks for your question. So let me be explicit rather than merely dismissive.
If a fundie site I trust says that NFGC is “currently unprofitable and not forecast to become profitable over the next three years”, and I have no evidence to say that is not so, then my necessary conclusion is that NFGC doesn’t merit a place in my portfolio, not when other companies in the industry/sector ARE turning a profit.
In several industries, namely mining, biotech and the current darling, AI, there are dozens (hundreds?) of these kinds of tiny companies who have plenty of cash on their books, perhaps from a recent IPO, but whose future prospects are just a speculative bet at present. There are ways to try to turn a profit from betting on them. But they involve doing more work and taking more risks than I’m willing to do.
With respect to NFGC specifically, why not just use GDXJ to make a bet on the juniors? In fact, I own GDXJ, well as a basket of the juniors, every one of which is in the green from my entry points. Up an avg of 20% in less than a year, which is good enough money for the girls I go dancing with. So why would I consider NFGC? Just doesn’t make a lick of sense to me. Why go looking for trouble? But as I said earlier, to each , his own.
To be explicit, I guess you could have said, “I don’t analyse mining companies: I just invest in the sector or on recommendations.”
In any case, to say that NFGC is a dog without any analysis whatsoever is a bit of a stretch. For your information, it owns one of the world’s most spectacular group of discoveries and has spent its time since its initial discoveries in 2021 finding more and more rich deposits all along its claim holdings, which are massive now. All this time the share price has been falling and I can see no reason for it. After 46 years of gold mine investing I have found my niche in the junior explorers/developers, (basically investing in orebodies, as the closed-end junior-miner fund Dundee Precious Metals used to do before they threw all their resources behind their Chelopech operations and closed the fund) and this one is shaping up to be a solid opportunity as far as I can judge. Is their anybody here who knows anything about New Found Gold that is not on their website? I know that a small outfit has been recently shorting and bad-mouthing the company, but they are just flies on the wall as far as I can tell. Their justifications for shorting are not new facts: just old knowledge that has been amply reported by the company itself over the last few years.
As far as investing in ETFs is concerned, I stay away from them because firstly they are just a somewhat-leveraged play on the gold price (Whereas I invest in mines as businesses and make no gold price forecasts) and secondly because I see investing in ETFs as “letting the side down” because I don’t believe that they are fully invested in the mines rather than derivatives, and so the effect of people investing in mining ETFs are not driving up the mine values much at all. This opinion is supported by the anaemic way that ETF fund flows affect the underlying stock prices.
If you look at the Northern Miner’s lists of top ten drill holes the last couple of years, you will find that NFGC is all over that winner’s board. Hardly what I would call a dog.
If you want to make a hobby of digging into the company-specific fundamentals of obscure mining companies, then go for it. But such a project doesn’t interest me. Never has. Never will. Hence, I’ll stick by my rating of NFGC as a ‘dog’ that should be ignored and avoided until --if ever-- it begins to report profits.
