NovaCopper (NCQ / NCQ.TO) is a junior copper explorer that NovaGold spun out last year. The spinoff's CEO is the geologist who founded that parent. I like serial entrepreneurs who launch new projects in their field. Note that the Thayer Lindsley award for 2009 was shared by several geologists and explorers involved with the Donlin discovery. Just sayin' you gotta give credit where it's due.
The preliminary findings from their Upper Kobuk projects are definitely intriguing, with indicated and inferred resources far above typical copper grade discoveries. Photos of the project show a fairly challenging topology to mine but the valley floor may have sufficient space for a mill facility and tailings site; it's just hard for me to assess it without being there or seeing a vertical view with elevations and a distance scale. Their presentations shed some additional light. One longitudinal cross-section of the Bornite South Reef shows a substantial amount of overburden that will be costly to remove.
The good news on logistics is that NovaCopper has a solid plan to finance the construction of a 200-mile road connecting their project to the highways that lead to Anchorage. I didn't see any power lines or water wells in those photos, so I hope they have a plan for the infrastructure they'll need. They also need a final 43-101 with a 2P estimate, but if the grades stay as high as promised the project will be very satisfying to pursue.
Their most recent financials from November 2012 showed cash on hand of US$22M and net losses of US$31M. They will need to raise a lot more money ASAP to continue their developmental work, so investors should expect further dilution. That's even worse news for anyone who held NCQ stock since inception in April 2012, when it traded at $4.72; it closed today at $1.86.
NovaCopper has a potentially rich find but will need lots of capital to make it work. I'm not an investor yet but I won't count out a team that made NovaGold work.
Full disclosure: No positions in any companies mentioned.
