Novo Resources Corp. (
“Novo” or
the
“Company”) (TSX: NVO, NVO.WT & NVO.WT.A)
(OTCQX: NSRPF) is pleased to announce that major ASX-listed Western
Australian gold developer De Grey (ASX: DEG) has been granted the
right to earn a 50% interest in the Egina JV by spending up to A$25
million on exploration within four years. This strategic agreement
between De Grey and Novo follows a successful period of exploration
completed at Becher by Novo since September 2022.
The Egina JV will encompass, Novo’s Becher Gold
Project (“Becher”) and adjacent tenements that
cover approximately 1,000 sq. km of existing Novo tenements.
Becher is located in the northern sector of the
Egina Gold Camp, ~28 km along trend from De Grey’s Hemi deposit
within the 11.7 Moz Au (JORC 2012)1 Mallina Gold Project. The Egina
JV tenements are considered highly prospective for large scale,
intrusion-related gold deposits similar to the Hemi deposit, as
well as shear-hosted orogenic deposits similar to De Grey’s
Withnell and Mallina deposits.
De Grey will separately make a cornerstone
private placement investment of A$10 million into Novo at a price
of C$0.255 per common share (the “Financing”). De
Grey will become Novo’s largest single shareholder with an
approximate 11.6% post-Financing undiluted interest in Novo.
Over the last 9 months, Novo has prioritised
work at Becher and completed a large amount of exploration drilling
with 2,130 aircore drill holes completed for over 50,000 m. The
results from this program have been very promising, with drilling
highlighting mineralisation under shallow cover in both intrusions
and sedimentary rocks and, importantly, displaying geological
indicators of potential discovery success.
Novo will now partner with De Grey to continue
exploration efforts at Becher and is hopeful of discovering the
next major Pilbara gold project.
Novo is a dedicated gold explorer which owns an
exciting exploration portfolio located in the premium Australian
gold jurisdictions of the Pilbara and Victoria. In the Pilbara,
outside of the Becher Project, other current key exploration
targets include Nunyerry North located in the southern sector of
the Egina Gold Camp, and Balla Balla located north of Karratha.
Novo is also exploring in Victoria at its Belltopper Project
located south of the Fosterville mine in the Bendigo Tectonic Zone,
where over 60 Moz Au were produced historically.
Led by a talented and experienced management and
exploration team, Novo has the right team and credentials to make
discoveries and build sizeable resources.
About De Grey
De Grey is a Western Australian gold explorer
and project development company, with its activities focussed on
the 100% owned Mallina Gold Project in the Pilbara region of WA. At
Mallina, De Grey made a large scale, high value, near surface gold
discovery at an area called Hemi.
The Hemi gold discovery is intrusion hosted and
is rapidly moving towards De Grey’s development goal of defining a
Tier 1 project with true district-scale potential. Mineralisation
in the Hemi area has been identified over a large area and a
9.5-million-ounce Mineral Resource1 was updated in June 2023. The
discovery remains open in multiple directions and at depth.
Overall, the total Mallina Gold Project Mineral Resource is now
11.7 million ounces1 and includes the Hemi deposits 30km to the
north east and Withnell deposits located only 10km north of the
Becher prospect area.
De Grey expects to complete a Definitive
Feasibility Study on the Mallina Gold Project in the September
quarter 2023, and continues to focus exploration on new discoveries
throughout the Mallina Gold Project. The Egina JV provides De Grey
with an expanded footprint and extensions to the highly prospective
stratigraphy and structures.
For De Grey, the addition of the Egina Project
tenements to the broader Mallina Gold Project is an important step
in its strategy to discover and grow a large resource base centred
around the future Hemi processing plant. The new tenements
represent a substantial opportunity for De Grey to discover new
large scale, intrusion-related gold deposits similar to Hemi, as
well as shear-hosted orogenic gold deposits.
Earn-In and Joint Venture
A number of Novo’s wholly-owned Australian
subsidiaries have executed the Agreement with De Grey, pursuant to
which De Grey has been granted the right to earn a 50% interest in
the Egina JV (Figure 1) by incurring up to A$25 million in
exploration expenditure within 48 months (the
“Earn-In”).
Once De Grey completes the Earn-In, the
resultant Egina JV will be fully documented by way of a formal
joint venture agreement between the parties. Novo and De Grey will,
under the Egina JV, be required to co-fund exploration expenditure
according to their pro-rata interests in the Egina JV. De Grey has
the right to terminate the Earn-In after incurring a minimum of A$7
million in exploration expenditure within 18 months (in which case
it would forfeit any interest in the relevant tenements).
Certain tenements comprising the Egina Project
are currently subject to pre-existing joint ventures into which
Novo has already earned an interest. The Agreement includes a
mechanism by which such joint ventures may be incorporated into the
Egina JV, subject to agreement with relevant joint venture
partners.
The Earn-In and Egina JV are otherwise subject
to industry-standard earn-in and joint venture conditions,
including information sharing, quarterly technical meetings, mutual
pre-emptive rights and extension of the Earn-In period due to
reasonable delays in accessing priority areas of the Egina Project.
De Grey will manage exploration activities under the Earn-In, and
De Grey will also manage the resultant joint venture provided that
its interest remains at or above 50%. The Egina JV is also subject
to an industry-standard dilution clause, with dilution below 10%
resulting in the conversion of a party’s interest to a 1% net
smelter returns royalty.
Cornerstone Investment
Novo expects to close the Financing raising
gross proceeds of A$10 million (approximately C$8.97 million)
through the issue of 35,223,670 common shares
(“Shares”) to De Grey at Novo’s current spot price
of C$0.255 per Share promptly following receipt of Toronto Stock
Exchange (“TSX”) acceptance of notice of the
Financing.
Immediately subsequent to closing of the
Financing, De Grey will hold an approximate 11.6% undiluted
interest in Novo and will become the Company’s largest single
shareholder.
All Shares issued in the Financing will be
subject to a statutory hold period expiring four months and one day
following the closing of the Financing, along with an additional
voluntary contractual hold period (the “Contractual Hold
Period”) expiring one year following the closing of the
Financing. However, if the Company has not received a formal
listing decision letter from ASX (see below) within six months
following the closing of the Financing, the Contractual Hold Period
will expire six months following the closing of the Financing. The
Shares will be subject to orderly sale restrictions subsequent to
the expiry of the Contractual Hold Period.
Commencing six months following closing of the
Financing and subject to De Grey maintaining at least a 12.5%
undiluted interest in Novo at all times (the “Nomination
Threshold”), De Grey has a one-time right to nominate a
director to Novo’s board. However, if Novo has not received a
formal listing decision letter from ASX listing within six months
following closing of the Financing, the Nomination Threshold will
decrease to 10%. De Grey also has the right to participate in any
raising conducted in conjunction with an ASX listing to ensure it
holds up to a maximum undiluted post-financing interest of 12.5% of
Novo.
The net proceeds from the Financing will
primarily be used by Novo to fast-track exploration at the
Company’s key projects, including Nunyerry North, Balla Balla and
Belltopper, as well as for general working capital purposes.
The Financing is subject to receipt of approval
from the TSX.
Argonaut PCF Limited of Perth, Western Australia
was financial adviser to Novo on this transaction and will receive
a cash finder’s fee of A$0.5 million (approximately C$0.45 million)
in connection with the Financing.
Intention to seek Dual-Listing on
ASX
Novo is also pleased to announce that it has
commenced a process to seek a dual listing on the ASX.
The Board believes that an ASX listing would be
a logical next step for Novo given the location of its assets and
management team. Further, Novo believes that listing on the ASX
would deliver a number of potential benefits for Novo and its
shareholders, including:
-
Ability to enhance the profile of Novo across a broader mix of
stakeholder groups
-
Increasing liquidity and accessing potential new sources of
equity
-
Engaging and attracting additional institutional investment and
equity research coverage
The ASX would provide a natural fit for Novo to
list and grow due to historical investor appetite for exploration
companies with projects located in Australia. Novo has been listed
on the TSXV/TSX since 2015, has developed a supportive, long-term
investor register and remains committed to this investor group and
intends to maintain its TSX and OTCQX listings.
The Company will provide further updates as this
process progresses. There is no guarantee that the Company will
list on the ASX or will be granted approval to do so.
Nullagine Gold Project Strategic
Review
The Nullagine Gold Project
(“NGP”) consists of the Mosquito Creek Basin
(“MCB”), the Beatons Creek Project and the Golden
Eagle Processing Facility. The NGP remains in care and maintenance
following suspension of operations in September 2022.
Novo will commence a strategic review of the
Nullagine Gold Project to assess value maximising options for
shareholders which may include development, joint ventures or
divestment.
The Golden Eagle Plant is a tier-one facility
which hosts a 1.5 Mtpa nameplate capacity (historically operated at
1.8 Mtpa) conventional gold gravity/CIL processing facility 4 MW
SAG mill. The plant is supported by surrounding infrastructure,
which includes a 10 MW diesel power station, 230-person
accommodation village, offices, workshops and warehouse.
The Beatons Creek project hosts an Indicated
Mineral Resource of 3.05 million tonnes at 2.4 g/t Au for 234,000
oz Au and an Inferred Mineral Resource of 0.83 million tonnes at
1.6 g/t Au for 42,000 oz Au3. Reference should be made to the
technical report entitled “NI 43-101: Mineral Resource Update,
Beatons Creek Gold Project, Nullagine, Western Australia” with an
effective date of June 30, 2022 and an issue date of December 16,
2022 (the “Technical Report”), prepared for Novo
by Dr. Simon Dominy (FAusIMM(CP) FAIG(RPGeo) FGS(CGeol)), Ms.
Janice Graham (MAIG), Mr. Jeremy Ison (FAusIMM), and Mr. Royce
McAuslane (FAusIMM) (collectively, the “QP’s”).
The QP’s are qualified persons as defined under National Instrument
43-101 Standards of Disclosure for Mineral Projects (“NI
43-101”). The Technical Report is available under the
Company’s profile on the System for Electronic Document Analysis
and Retrieval (“SEDAR”) website at www.sedar.com
(filing date: December 16, 2022) and on the Company’s website at
www.novoresources.com.
Deferral of 2023 Annual General
Meeting
As a result of the potential ASX listing, the
Company has sought and obtained approval from the TSX to defer its
annual general meeting (“AGM”) to no later than
September 29, 2023. The Company will provide an update on the
timing of its AGM in due course.
QP STATEMENTS
Mr. Iain Groves (MAIG), is the qualified person,
as defined under NI 43-101, responsible for, and having reviewed
and approved, the geological and exploration information contained
in this news release pertaining to the Egina Gold Project other
than information concerning De Grey’s Mallina Gold Project. Mr.
Groves is Novo’s Exploration Manger – West Pilbara.
Mr. Alwin Van Roij (MAIG), is the qualified
person, as defined under NI 43-101, responsible for, and having
reviewed and approved, the technical information contained in this
news release pertaining to the Nullagine Gold Project other than
information concerning the Technical Report. Mr. Van Roij is Novo’s
Exploration Manger – East Pilbara.
ABOUT NOVO
Novo explores and develops its prospective land
package covering approximately 10,500 square kilometres in the
Pilbara region of Western Australia, along with the 22 square
kilometre Belltopper Project in the Bendigo Tectonic Zone of
Victoria, Australia. In addition to the Company’s primary focus,
Novo seeks to leverage its internal geological expertise to deliver
value-accretive opportunities to its stakeholders. For more
information, please contact Michael Spreadborough at
+61-419-329-687 or mike.spreadborough@novoresources.com, or Leo
Karabelas at +1-416-543-3120 or leo@novoresources.com.
On Behalf of the Board of Directors,
Novo Resources Corp.
“Michael Spreadborough”
Michael Spreadborough
Executive Co-Chairman and Acting CEO
Forward-looking information
Some statements in this news release contain
forward-looking information (within the meaning of Canadian
securities legislation) including, without limitation, the use of
the net proceeds from the Financing, the intention to undertake an
IPO on the ASX, and planned exploration activities. These
statements address future events and conditions and, as such,
involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements to
be materially different from any future results, performance or
achievements expressed or implied by the statements. Such factors
include, without limitation, receipt of TSX acceptance of notice of
the Financing, receipt of ASX approval to the listing of Novo,
investor interest in the IPO, customary risks of the resource
industry and the risk factors identified in Novo’s annual
information form for the year ended December 31, 2022, which is
available under Novo’s profile on SEDAR at www.sedar.com.
Forward-looking statements speak only as of the date those
statements are made. Except as required by applicable law, Novo
assumes no obligation to update or to publicly announce the results
of any change to any forward-looking statement contained or
incorporated by reference herein to reflect actual results, future
events or developments, changes in assumptions or changes in other
factors affecting the forward-looking statements. If Novo updates
any forward-looking statement(s), no inference should be drawn that
the Company will make additional updates with respect to those or
other forward-looking statements.
Notes
1 De Grey has reported that its
Hemi deposit at the Mallina Gold Project is comprised of Measured
Mineral Resources of 4.7 Mt @ 1.7 g/t Au for 265 koz Au, Indicated
Mineral Resources of 184.1 Mt @ 1.3 g/t Au for 7,798 koz Au, and
Inferred Mineral Resources of 89.2 Mt @ 1.3 g/t Au for 3,684 koz
Au, as those categories are defined in the JORC Code (as defined in
NI 43-101). Refer to De Grey’s public disclosure record for further
details. No assurance can be given that a similar or any
mineral resource estimate will be determined at Novo’s Becher
Project.
2 De Grey has reported that, at
the Mallina Gold Project, its (i) Mount Berghaus deposit is
comprised of Indicated Mineral Resources of 1 Mt @ 1.7 g/t Au for
53 koz Au and Inferred Mineral Resources of 3.4 Mt @ 1.2 g/t Au for
128 koz Au, (ii) Wingina Well deposit is comprised of Measured
Mineral Resources of 3.1 Mt @ 1.7 g/t Au for 173 koz Au, Indicated
Mineral Resources of 1 Mt @ 1.4 g/t Au for 43 koz Au, and Inferred
Mineral Resources of 1.4 Mt @ 1.6 g/t Au for 72 koz Au, (iii)
Toweranna open pit deposit is comprised of Indicated Mineral
Resources of 8.3 Mt @ 1.6 g/t Au for 418 koz Au and Inferred
Mineral Resources of 2.5 Mt @ 1.5 g/t Au for 120 koz Au, (iv)
Toweranna underground deposit is comprised of Indicated Mineral
Resources of 0.1 Mt @ 3.0 g/t Au for 11 koz Au and Inferred Mineral
Resources of 0.5 Mt @ 2.9 g/t Au for 49 koz Au, (v) Mallina deposit
is comprised of Indicated Mineral Resources of 1.6 Mt @ 1.2 g/t Au
for 64 koz Au and Inferred Mineral Resources of 5.1 Mt @ 1.5 g/t Au
for 243 koz Au, (vi) Withnell open pit deposit is comprised of
Measured Mineral Resources of 1.3 Mt @ 1.5 g/t Au for 62 koz Au,
Indicated Mineral Resources of 3 Mt @ 1.8 g/t Au for 178 koz Au,
and Inferred Mineral Resources of 0.7 Mt @ 2.0 g/t Au for 43 koz
Au, (vii) Withnell underground deposit is comprised of Indicated
Mineral Resources of 0.1 Mt @ 4.3 g/t Au for 16 koz Au and Inferred
Mineral Resources of 2.4 Mt @ 3.9 g/t Au for 301 koz Au, and (viii)
Hemi deposit is comprised of Indicated Mineral Resources of 165.7
Mt @ 1.3 g/t Au for 6,876 koz Au and Inferred Mineral Resources of
70.2 Mt @ 1.2 g/t Au for 2,632 koz Au, as those categories are
defined in the JORC Code (as defined in NI 43-101). Refer to De
Grey’s public disclosure record for further details. No
assurance can be given that a similar or any mineral resource
estimate will be determined at Novo’s Becher Project.
3 Refer to the Company’s news
release dated November 2, 2022.
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