- Novo Resources Corp (NVO) has exercised its option to earn a 50% interest in the Queens Gold Project
- The project is located in the Bendigo zone of Australia’s Victorian goldfields
- Novo has issued 584,215 common shares to Kalamazoo as consideration for the exercise of the option
- Novo has the right to earn an additional 20% interest in the Queens Project by incurring AUD$5 million in exploration expenditure over a five-year period
- Novo Resources Corp is engaged in evaluating, acquiring and exploring natural resource properties with a focus on gold
- Novo is down 0.60 per cent, trading at C$3.30 per share at 1 pm ET
Novo Resources Corp (NVO) has exercised its option to earn a 50% interest in the Queens Gold Project.
The project, held by ASX-listed Kalamazoo Resources Limited, is located in the Bendigo zone of Australia’s Victorian goldfields.
Novo has issued 584,215 common shares to Kalamazoo as consideration for the exercise of the option. The option shares are subject to a statutory hold period expiring on July 23, 2021.
“Malmsbury is a very high-value Victorian gold target with strong geologic similarities to the high-grade Fosterville deposit approximately 55 km to the north,” commented Quinton Hennigh, Chairman and President of Novo Resources.
“Exercise of this option consolidates Novo’s land holdings in this important district. We look forward to expanding our current exploration program beyond the joint venture ground we hold with GBM Resources and identifying drill targets by late this year.”
Novo has 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 over a five-year period.
If Novo satisfies the Earn-In Amount by the expiry of the Earn-In Period, it will have 30 days to elect to either earn an additional 10% in the Queens Project by delivering a preliminary economic assessment (PEA) which must include a minimum of 1 million ounces of gold of which at least 60% must be comprised of indicated mineral resources, or 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 contribute to 30% of exploration expenditure, or transfer its 30% interest to Novo and 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%.
Novo Resources Corp is a company engaged in the business of evaluating, acquiring and exploring natural resource properties with a focus on gold.
Novo is down 0.60 per cent, trading at C$3.30 per share at 1 pm ET.