Nova Minerals Drops 14% on $20m Capital Raise- Buy or Avoid?

Nova Minerals (ASX: NVA) dropped nearly 14 per cent to A$0.90 following the announcement of a US$20 million (approximately AUD 30.2 million) capital raise on the Nasdaq. The offering, priced at US$6.83 per American Depositary Share, will issue approximately 35.14 million new ordinary shares (representing 2.93 million ADSs) to fund exploration and development at the company’s 85%-owned Estelle Gold Project in Alaska. The offering is expected to close on December 22, 2025. For investors, the key question is whether this short-term dilution is worth the long-term potential of advancing one of the world’s largest undeveloped gold assets.

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Where the Money Is Going- Funding Estelle’s Next Phase

Nova plans to deploy the fresh capital across several critical work streams at the Estelle Project. This includes additional drilling, feasibility and environmental studies, camp expansion, permits and approvals, and initial development activities. The project hosts a JORC-compliant resource of 9.9 million ounces of gold, making it one of the most significant undeveloped gold deposits globally.

What makes this timing particularly smart is the broader backdrop. Gold is trading near record highs at US$4,332 per ounce (having recently tested highs of US$4,347), up approximately 67 per cent since the start of 2025. Strong gold prices improve project economics and make it easier for companies like Nova to attract capital. We believe the decision to raise funds now, while gold sentiment remains bullish, reflects sensible capital management rather than desperation.

The Dilution Problem: Short-Term Pain for Shareholders

The flip side of this raise is the dilution impact on existing shareholders. The offering price represents a discount to recent trading levels, which is typical for junior explorer capital raises but nonetheless frustrating for current holders. Issuing 35 million new shares increases the total share count meaningfully, diluting each investor’s ownership stake.

However, this is part of the game for pre-revenue explorers. Without cash flow from operations, companies like Nova rely on equity markets to fund development. Before this raise, Nova had access to over AUD 86 million in funding, comprising AUD 17.5 million in cash plus a US$43.4 million (AUD 65.5 million) award from the U.S. Department of Defence to support antimony production. This new capital strengthens an already solid funding position and should provide runway to advance key milestones.

The Investor’s Takeaway

Nova Minerals presents a classic junior explorer proposition: high upside potential paired with meaningful risk. The Estelle Project sits in Alaska’s prolific Tintina Gold Belt, a region hosting over 220 million ounces of documented gold. The DoD backing for antimony adds strategic importance beyond the gold story, positioning Nova at the intersection of precious metals and critical minerals.

That said, investors should recognise this remains a pre-production company with no near-term revenue. Mining development timelines are uncertain, and the stock’s volatility reflects its speculative nature.

For risk-tolerant investors bullish on gold and willing to accept dilution as part of the development journey, Nova looks like a speculative buy at current levels. Conservative investors seeking stable, cash-generating businesses should look elsewhere. The opportunity here is in the long-term optionality, not short-term certainty.