Novo Resources Corp. (TSX-V:NVO) (OTCQX:NSRPF)
(“Novo” or the “Company”) is pleased to announce that Novo and two
of its 100%-owned Australian subsidiaries, Grant’s Hill Gold Pty
Ltd (“GHG”) and Karratha Gold Pty Ltd (“KG”), have entered into a
binding Memorandum of Agreement (“MOA”) that allows Novo to
consolidate its ownership in five key tenements encompassing
approximately 6.5 km of strike along outcropping
conglomerate-hosted gold mineralization at Novo’s new Karratha gold
discovery.
“We are extremely pleased to have consolidated
control over this exciting new gold discovery,” commented Dr.
Quinton Hennigh, Chairman, President, and director of Novo
Resources Corp. “The five tenements comprising the Comet Well
property cover about 6.5 km of strike along outcropping
gold-bearing conglomerates. Purdy’s Reward, part of our earn-in and
joint venture with Artemis Resources Ltd., sits immediately
adjacent to Comet Well and covers an additional 1.5 km of
mineralized strike. Comet Well and Purdy’s Reward combined
give Novo control over 8 km of critical outcropping
conglomerate-hosted gold mineralization. In addition, Novo
has a 100% interest, through staking, in the entirety of down dip
extensions of the mineralized conglomerate horizon. We think
this conglomerate may underlie a large area on our ground south and
southeast of Comet Well-Purdy’s Reward.”
“Recent fieldwork at Purdy’s Reward indicates
the mineralized conglomerate unit may be a few meters thick,”
explained Hennigh. “Local metal detectorists continue to scour the
area for gold nuggets which are commonly the size and shape of
watermelon seeds. Numerous small holes dug by detectorists
are scattered regularly along strike suggesting good continuity of
mineralization. Importantly, many nuggets are still encased
in rock matrix derived directly from weathered conglomerate.”
“Expertise we gained exploring
conglomerate-hosted gold mineralization at Beatons Creek puts us in
an exceptionally strong position to explore this new, potentially
much larger gold project,” continued Hennigh. “First phase
trench work will begin at Purdy’s within a couple weeks. This
MOA increases our exposure to this discovery and puts us in a
position to now extend exploration work along the entirety of the
mineralized Comet Well-Purdy’s Reward horizon. Novo plans to
immediately seek necessary permits and approvals. We are very
excited by the potential we see at Comet Well-Purdy’s Reward and
are anxious to commence exploration work.”
Karratha Mineral Holdings
With the addition of this MOA and recent
staking, Novo’s Karratha mineral holdings consist of 7,638 sq km of
100% controlled exploration licenses and applications, 1,536 sq km
of mineral licenses subject to a recently announced farm-in/joint
venture agreement with Artemis Resources Ltd (please refer to a
news release dated May 26 for further details) and 54.5 sq km of
mineral license applications at Comet Well subject to the MOA
discussed in this news release (Figures 1 and 2). Novo’s
total mineral holdings in the Karratha region encompass 9,228.5 sq
km.
Details of the MOA
Further to the Company’s news release dated
April 11, 2017, Novo, GHG and KG have entered into the MOA with two
arm’s length vendors (the “Vendors”) to earn a further interest in
the Comet Well project (the “Comet Well Project”). The Comet
Well Project, acquired on April 11, 2017, consists of a 100%
interest in three prospecting licenses and a 100% interest in an
exploration licence (collectively, the “Other Licences”), and a 25%
interest in a second exploration licence (the “Second
Licence”).
Pursuant to the MOA, KG will be entitled to
earn, via farm-in arrangements, an additional 55% interest in the
Second Licence by expending $4 million of exploration expenditure
on the Second Licence. At the same time, the Vendors will be
entitled to earn, via farm-in arrangements, an aggregate 20%
interest in the Other Licenses by expending $50,000 of exploration
expenditure on the Other Licenses. Once all respective farm-in
commitments are satisfied, the net position will be that Novo, via
GHG and KG, will hold an 80% interest in each of the Other Licences
and the Second License, with the Vendors holding the remaining 20%
interest.
The Vendors, GHG and KG will then enter into two
joint venture agreements covering the Comet Well Project, with the
key following joint venture (“JV”) terms: 1) the Vendors will hold
a 20% interest in each JV and will be free carried for exploration
related expenditures until a decision to mine is made; 2) Novo,
through GHG and KG, will hold an 80% interest in each JV and will
be the Manager of each JV. Novo will manage and control all
exploration activities; and 3) after a decision to mine is made,
Novo and the Vendors will contribute to joint venture costs in
proportion to their JV interests. Standard dilution clauses will
apply thereafter, and if the Vendors’ aggregate JV interest drops
below 5% their JV interests will convert to an aggregate 1% net
smelter royalty.
The Vendors will retain prospecting and
excavation rights in relation to surface, alluvial and elluvial
soils on the five tenements which comprise the Comet Well Project.
This does not extend to minerals in conglomerates or primary rock
or bedrock.
The MOA is binding but is subject to standard
conditions precedent including receipt of Australian Foreign
Investment Review Board approval, TSX Venture Exchange approval,
and obtaining any other required third party consents. Once these
conditions are satisfied, Novo will pay to the Vendors AU$1.5
million cash as a signing fee. In addition, as part of
further conditions of the MOA, Novo will issue to the Vendors
AU$1.5 million worth of Novo’s common shares (the “Initial
Consideration Shares”), with the number of shares to be calculated
based on Novo’s then prevailing 5-day trailing volume-weighted
average price (“VWAP”). The Initial Consideration Shares will be
subject to a statutory hold period expiring four months from the
date of issuance. Three years after the initial payment is made, a
further payment of AU$3 million in cash and AU$3 million worth of
Novo’s common shares (the “Subsequent Consideration Shares”) will
be issued, with the number of shares to be calculated based on
Novo’s then prevailing 5-day trailing VWAP. The Subsequent
Consideration Shares will also be subject to a statutory hold
period expiring four months from the date of issuance.
The MOA will be replaced by binding definitive
legal agreements in due course.
Dr. Quinton Hennigh, a qualified person as
defined by National Instrument 43-101 and the Company’s Chairman,
President and a director, has approved the technical contents of
this news release.
About Novo Resources
Corp.Novo’s focus is to explore and develop gold projects
in the Pilbara region of Western Australia. Novo also controls a
100% interest in approximately 2 sq km covering much of the
Tuscarora Au-Ag vein district, Nevada. For more information, please
contact Leo Karabelas at (416) 543-3120 or e-mail
leo@novoresources.com.
On Behalf of the Board of Directors,
Novo Resources Corp.
“Quinton Hennigh”Quinton HennighChairman and
President
Forward-looking information
Some statements in this news release contain
forward-looking information (within the meaning of Canadian
securities legislation) including, without limitation, the
statement as to the expected consummation of the Comet Well
Project. 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, the
receipt of TSX Venture Exchange approval.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
Photos accompanying this release are available
at
http://www.globenewswire.com/NewsRoom/AttachmentNg/f48f1ac6-65ba-4c3e-9163-ef9b0fd30e1d
http://www.globenewswire.com/NewsRoom/AttachmentNg/651f7beb-83cb-4f4c-a9b8-45d30a0ef705
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