Old West Management, an investment management company, released its 2022 fourth-quarter investor letter. A copy of the same can be downloaded here. 2022 was one of the most difficult years for investors. However, the fund performed better than the market. Even though its long-only separate accounts delivered negative returns for the year, they beat their respective benchmarks, and the fund’s three Limited Partnerships performed relatively well. The Old West Income Fund increased by 12.4% for the year. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Old West Management highlighted stocks like NovaGold Resources Inc. (NYSE:NG) in the Q4 2022 investor letter. Headquartered in Vancouver, Canada, NovaGold Resources Inc. (NYSE:NG) develops and explores for gold mineral properties. On January 17, 2023, NovaGold Resources Inc. (NYSE:NG) stock closed at $6.47 per share. One-month return of NovaGold Resources Inc. (NYSE:NG) was 5.20%, and its shares lost 10.39% of their value over the last 52 weeks. NovaGold Resources Inc. (NYSE:NG) has a market capitalization of $2.157 billion.
Old West Management made the following comment about NovaGold Resources Inc. (NYSE:NG) in its Q4 2022 investor letter:
“The previous two mining companies are industry leaders with solid production. The next two companies have no production or revenue but are sitting on huge deposits. We were initially attracted to NovaGold Resources Inc. (NYSE:NG) because of the track record of success of company chairman and largest shareholder Thomas Kaplan. Kaplan has become a billionaire investing in silver and platinum mines in Bolivia and South Africa. Besides his investing in mining, he owns the world’s largest collection of Rembrandt’s works.
Novagold is co-owner of the Donlin mine in Alaska, along with Barrick Gold. The Donlin mine is on track to be one of the world’s largest gold mines with 39 million ounces of measured and indicated reserves with an average grade of 2.24 grams of gold per ton. A major hurdle is Donlin is located in a remote area of Alaska, and the estimated cost to bring the mine to production is $7.4 billion. That is a huge expense but at today’s gold price the mine has gross revenue potential of $72 billion. Obviously the higher the gold price goes the easier the decision to begin construction. The U.S. government is supportive of the project as are the local Alaska Native stakeholders. Novagold has $120 million of long term debt offset by $142 million of cash. The market cap is $2.2 billion, and the company is burning $11 million of cash per year. It is widely expected that Barrick, who is always looking to buy high quality assets, will purchase Novagold’s 50% interest in the world class Donlin mine.”
Photo by Ricardo Gomez Angel on Unsplash
NovaGold Resources Inc. (NYSE:NG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 13 hedge fund portfolios held NovaGold Resources Inc. (NYSE:NG) at the end of the third quarter, which was 15 in the previous quarter.
We discussed NovaGold Resources Inc. (NYSE:NG) in another article and shared the list of best mineral stocks. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
