Novo to Advance Egina Gold Project by Way of US $30 Million Farmin & Joint Venture With Sumitomo Corporation
June 07 2019 - 6:55AM
Novo Resources Corp. (
“Novo” or
the
“Company”) (TSX-V: NVO; OTCQX: NSRPF) is
pleased to announce that it has entered into a US $30 million
farmin and joint venture agreement (the
“
Agreement”) with Sumitomo Corporation of Tokyo,
Japan, and its wholly-owned Australian subsidiary (together,
“
Sumitomo”) in order to advance Novo’s Egina
project (the “
Project”) located approximately 80
km south-southwest of Port Hedland, WA.
The Project is comprised of wholly-owned Novo
tenure, including tenements acquired through the recent acquisition
of Farno-McMahon (“Farno”), tenements into which
Novo is currently earning an interest under a binding memorandum of
agreement with ASX-listed Pioneer Resources Limited, and a tenement
into which ASX-listed De Grey Mining Ltd. is currently earning an
interest under a farmin and joint venture agreement executed with
Farno prior to its acquisition by Novo (please see the Company’s
news releases dated September 17, 21, and October 1, 2018 -
http://novoresources.com/news-media/news/).
Pursuant to the Agreement, Sumitomo is entitled
to earn, through farmin arrangements, up to a 40% interest in the
Project by spending up to US$30 million (approximately C$40.2
million) over three years, with a required minimum of US$5 million
per phase defined by a program and budget (approximately C$6.7
million). Sumitomo has the right to elect not to continue with the
farmin arrangement and, if this right is exercised, it is expected
that any amounts advanced under the farmin arrangement will be
converted into common shares of Novo through a shares for debt
settlement at the higher of C$2.00 and the minimum price permitted
as at the date the right is exercised, subject to receipt of TSX
Venture Exchange approval. Any shares issued to Sumitomo pursuant
to such a debt settlement will be subject to a twelve-month
contractual hold period (inclusive of the required four-month
statutory hold period) and orderly sale restrictions. The Agreement
also contains a mechanism by which Sumitomo can participate in an
expanded project area.
“Novo’s Egina project is an early-stage,
high-potential gold project,” commented Dr. Quinton Hennigh,
Chairman and President of Novo Resources Corp. “Sumitomo, upon
conducting their own technical review, has developed a similar
opinion. It is remarkable for an exploration company to team up
with a world-class finance partner like Sumitomo. With Sumitomo’s
financial backing, we aim to quickly advance Egina through
exploration and test-extraction phases with the ultimate goal,
should results prove favourable, of setting the project on a path
to production. Novo has been developing the relationship with
Sumitomo for many years, built on a foundation of mutual trust and
respect. The combined teams have the technical capacity to advance
this unique gold deposit and we are honoured to work with
Sumitomo’s capable technical team.”
About Novo Resources Corp.
Novo’s focus is to explore and develop gold
projects in the Pilbara region of Western Australia, and Novo has
built up a significant land package covering approximately 12,000
sq km with varying ownership interests. For more information,
please contact Leo Karabelas at +1-416-543-3120 or
e-mail leo@novoresources.com
On Behalf of the Board of Directors,
Novo Resources Corp.
“Quinton
Hennigh”
Quinton Hennigh
Chairman and President
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
statements as to the Agreement and the 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, receipt of TSX Venture Exchange approval to the
Agreement and customary risks of the resource industry, economic
conditions and risks and uncertainties inherent to the mineral
exploration industry as well as the performance of services by
third parties and the issuance of necessary approvals and permits
by regulatory authorities.
A PDF accompanying this announcement is
available
at: http://ml.globenewswire.com/Resource/Download/322649cc-b7f2-44b1-8ba7-be6d3a959389
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