Monday, February 15, 2010

NovaGold Resources (AMEX:NG) Uncertain Future

NovaGold Resources

NovaGold Resources (AMEX:NG), like its gold mining cousins, must be considered risky investments, and those sinking their money into them should be sure they are able to lose it, as the valuations of the companies are highly subjective, and it's a toss of the dice from the beginning, even with the most respected experts making the call on how much recoverable gold can be extracted at a profit.

The share price and futures of companies like NovaGold Resources is completely based on the estimates of geologists hired to make the estimates. They admit that their estimates, while to the best of their abilities, is still a highly subjective discipline and are only guidelines, not true assessments, which in fact can't be made by anybody, the reason smaller gold mining companies can swing back and forth in price to such large degrees.

It's not only the estimates of profitably recoverable gold in the mines that is the only factor, but also the cost related to extracting the gold where it can make money, which can be more accurately assessed, and which is more able to be measured by those evaluating the company, assuming management is forthright with investors and potential investors.

NovaGold Resources

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