NPV is probably the most important factor in deciding ones risk tolerance in today’s speculative price run up. Should you sell before news and take some profits, or hold on to bigger and more impressive gains? NOT has had a roller coaster ride stretching from highs of over $7 to very recent lows of 55 cents. Which one is closer to the actual NPV?

The math doesn’t have to be difficult. If the defined resources don’t justify the capital, risks, and profit margins of starting a mine, then the NPV equals Zero! The market obviously thought this to be closer to the truth 3 weeks ago while the stock price was in the 60 cent range. Today, the speculation is shifting rather swiftly to the yes or maybe area.

This next news release will do one 3 things:

1. It will either support the speculation that there is enough tonnage to put NOT over the threshold of profitably extracting this resource. NPV jumps way way up along with the stock price. $10 minimum. Speculation is then how much more resources will NOT be able to define? The stock price really doesn’t have any middle ground and nickel prices will begin to swing NOT’s stock price. Calculations of resources size, grades, defined, inferred, cut off grades, depth, buyouts, etc become valid along with infurred costs.
2. The news does not yet support justification of mining this resource but helps to speculate that they are getting closer to finding much more. NPV still equals zero, but speculation keeps the stock price close to current levels until further news arrives. It may even run up somewhat higher depending on how good the news is. But unless there is further supporting news, one may wish to have taken some profits off the table.
3. The news is disappointing and does not match current speculation. NPV is Zero and the stock price falls quickly towards this number. One wishes they took some profits during the pre news days because the big fund managers will drop this faster than they’ve been buying it.

Looking at the bare facts, it probably wouldn’t take too much in this release to support outcome number two. Adding good speculation to the current resource tonnage won’t take too much, however all three of these outcomes is a very real possibility. If the news is even close to current talk, then outcome number one is possible.

When the news release eventually comes, please post your interpretation on which one you think it translates into. Its still going to get interesting so don't take your seatbelts off just yet.

Here's hopping for #1!