VANCOUVER, British Columbia, Sept. 22, 2020 (GLOBE NEWSWIRE) -- Novo Resources Corp. (“Novo” or the “Company”) (TSX-V: NVO; OTCQX: NSRPF) is pleased to announce that it has been granted an option and an additional earn-in right to acquire an initial 50% interest in ASX-listed Kalamazoo Resources Limited’s (“Kalamazoo”) Queens gold project (the “Queens Project”) located in the Bendigo zone of Australia’s Victorian goldfields (collectively, the “Transaction”) (please see Figure 1 and Figure 2 below for maps of the Queens Project), with the possibility of an increase to an 80% interest, as described below. The Transaction is subject to approval of the TSX Venture Exchange and other customary regulatory approvals for transactions of this nature. Novo holds a 7.64% undiluted / 11.60% fully diluted equity interest in Kalamazoo pursuant to an investment made on January 14, 2020.
Queens Project Description
The Queens Project encircles the core of ASX-listed GBM Resources Limited’s Malmsbury gold field and covers multiple structural extensions of the primary lode Au deposits of this important high-grade gold camp. The Malmsbury gold field is situated in the eastern part of the prolific Bendigo Zone approximately 55 km south of Kirkland Lake’s high-grade Fosterville mine. Given the similar geologic setting of Malmsbury and its history of high-grade gold production, Novo thinks Malmsbury has potential to host similar mineralization to that at Fosterville. Novo holds an option to purchase-joint venture the Malmsbury Project with GBM Resources Ltd. With the addition of the Queens Project Transaction, Novo will hold an interest in the entirety of the Malmsbury gold field.
Queens Project Terms
Novo will have a six-month period (the “Initial Period”) to conduct due diligence on the Queens Project by issuing to Kalamazoo 24,883 common shares of the Company (the “Initial Shares”) which will be subject to a statutory hold period of four months from the date of issuance. At any time during the Initial Period, Novo will have the right to exercise its option (the “Option”) to earn a 50% interest in the Queens Project by issuing A$2 million-worth of common shares of the Company to Kalamazoo at a deemed price per share equal to the volume-weighted average closing price of the Company’s common shares for the five trading days immediately prior to Novo’s exercise of the Option (the “Option Shares”). The Option Shares will also be subject to a statutory hold period of four months from the date of issuance.
If Novo exercises the Option, it will have the right to earn an additional 20% interest in the Queens Project and form a joint venture with Kalamazoo by incurring AUD $5 million in exploration expenditure (the “Earn-In Amount”) over a five-year period (the “Earn-In Period”), as to a minimum of AUD $250,000 during the first year, AUD $1 million during each of the second, third, and fourth years, and AUD $1.75 million during the fifth and final year of the Earn-In Period. Any expenditure incurred during any year of the Earn-In Period which surpasses the minimum required amount will be credited against the subsequent year’s commitment.
If Novo satisfies the Earn-In Amount by the expiry of the Earn-In Period, it will have 30 days to elect to either (i) earn an additional 10% in the Queens Project by delivering a preliminary economic assessment (the “PEA”) which must include a minimum 1 million ounces of gold of which at least 60% must be comprised of indicated mineral resources within three years of the Company’s election (the “PEA Conditions”), or (ii) maintain its 70% interest in the Queens Project. If the Company elects to maintain its 70% interest in the Queens Project, Kalamazoo must elect to either (i) contribute to 30% of exploration expenditure, or (ii) automatically convert to a 2% net smelter returns gold royalty.
If the Company elects to complete the PEA but fails to satisfy the PEA Conditions, Novo will retain a 70% interest in the Queens Project and Kalamazoo can elect to contribute to 30% of exploration expenditure or dilute at a rate of 1% for every AUD$100,000 not contributed. If Kalamazoo’s interest dilutes below 10%, Kalamazoo’s interest will automatically convert to a 2% net smelter returns gold royalty.
If Novo does not satisfy the Earn-In Amount during the Earn-In Period, Novo’s interest in the Queens Project will decrease to 49%.
Dr. Quinton Hennigh, P. Geo., the Company’s president, chairman, and a director, and a qualified person as defined by National Instrument 43-101, has approved the technical contents of this news release.
About Novo Resources Corp.
Novo is advancing its flagship Beatons Creek gold project to production while exploring and developing its highly prospective land package covering approximately 14,000 square kilometres in the Pilbara region of Western Australia. In addition to the Company’s primary focus, Novo seeks to leverage its internal geological expertise to deliver value-accretive opportunities to its shareholders. 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 Hennigh
President and Chairman
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.
Forward-looking information
Some statements in this news release contain forward-looking information (within the meaning of Canadian securities legislation) including, without limitation, the expected consummation of the Transaction and that Malmsbury has the potential to host similar mineralization to that at Fosterville. Forward-looking 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 and other customary approvals and customary risks of the mineral resource exploration industry.
PDFs accompanying this announcement are available at:
http://ml.globenewswire.com/Resource/Download/863af531-614e-4f98-b4a2-7bb128f53fd3
http://ml.globenewswire.com/Resource/Download/b4272c42-0e83-463a-85dd-f78985df9fa1
