Baupost Group has boosted its stake in Novacopper Inc to 10.73 %, according to a 13G filing with the SEC. The famous value hedge fund, founded by Seth Klarman, had owned 4,600,000 shares, or 9.86% of the Canadian based company. Baupost Group now controls 5,005,298 shares of the company. Baupost Group remains the third largest shareholder of the metals exploration company. The largest shareholder of Novacopper is Electrum Strategic Resources, L.L.C. with 8,872,033 shares, followed by John Paulson’s Paulson & Co with 5,921,608 shares.
The metals company has a market capitalization of $82 million, making this a tiny transaction for the $25 billion hedge fund. However, it could indicate a shift by Seth Klarman to commodity based company. In Baupost Group’s third quarter letter , Seth Klarman blasted Ben Bernanke’s monetary policy, and implied that it would boost the price of precious metals.
Novacopper Inc (TSE:NCQ) (NYSE:NCQ) was spun out of NovaGold Resources Inc. (NYSE:NG) (TSE:NG) during April 2012 to focus on the development of its 100% owned Upper Kobuk volcanogenic massive sulphide (VMS) copper project in Northern Alaska, part of the 110km Ambler District.
NovaGold Resources Inc. (NYSE:NG) (TSE:NG)’s third largest shareholder is also Seth Klarman’s Baupost Group with 21 million shares. Additionally, the largest shareholder is Electrum Strategic Resources L.L.C., followed by Paulson & Co.
Following an agreement with the Northwest Alaskan Native Association (NANA) in 2011, Novacopper Inc (TSE:NCQ) (NYSE:NCQ) consolidated the Arctic project with the nearby Bornite project, totalling a 180,000 hectare land package and is currently focused on the exploration of key prospective targets on the project. The company’s Arctic deposit on Upper Kobuk has a 43-101 compliant resource totaling 28.9Mt grading 3.9% copper, 5.6% zinc, 0.9% lead, 0.76g/t gold, and 54.78g/t silver.
Recently, NovaCopper released results of metallurgical testwork on a +1,000kg sample from the Arctic deposit in northern Alaska. Testing completed by SGS Laboratories in Vancouver suggests significantly higher recoveries and concentrate grades than assumed in
the 2011 Preliminary Economic Assessment. Copper recoveries improved by 5%, zinc by 13%, and lead by 23%, while total gold and silver recoveries to concentrates improved by 25% and 45%, respectively. The company also notes that concentrate grades have also improved, by 1.4% for copper and 2.2% for zinc.
Analysts at RBC opine in a recent report that the results suggest significantly higher recovery of precious metals to the copper and zinc concentrates, which tend to achieve higher payability for gold and silver than the lead concentrate.
Disclosure: No position