Novo Resources

Exploring and Developing Gold Properties in Australia’s Pilbara Region

This Novo Resources profile is part of a paid investor education campaign.*

Overview

Novo Resources Corp (TSXV:NVO) is a gold exploration and development company with a pipeline of conglomerate gold projects in Western Australia’s Pilbara gold region. The state of Western Australia is a Tier 1 mining district, representing 70 percent of the total gold output in a nation which ranks as the second largest gold producer in the world.

Novo Resources’ 2017 discovery of near-surface conglomerate gold over impressive strike lengths at Purdy’s Reward kicked off a staking rush in the Pilbara Craton. The Pilbara area hosts numerous small mesothermal gold deposits containing conglomerate gold — mineralization known to hold large, high-grade gold nuggets. The discovery also attracted the attention of Kirkland Lake Gold, now a major investor in Novo Resources as is Kirkland’s former Chairman Eric Sprott.

Today, Novo Resources’ Pilbara gold portfolio includes of the production-ready Beatons Creek project, the advanced-stage Egina gold project, the Karrantha gold project which hosts Purdy’s Reward and additional projects such as Talga Talga and Contact Creek. In August 2020, the company announced the acquisition of Millennium Minerals, which has assets located 10 kilometers south of the Beatons Creek project. The newly acquired property features processing infrastructure necessary to accelerating Novo’s planned transition to a producing gold company.

“By picking up the mill, we’re able to move Beatons Creek into production in the near-term which will give us the cash flow to continue aggressively advancing Egina to production as well as allowing some of our more dormant projects to really come to life,” said Novo Resources Chairman and President Dr. Quinton Hennigh. “Going forward, investors can expect to see a lot more news flow concerning how Novo plans to build its resource base and put together a production profile out of our current assets across the Pilbara region.”

Novo Resources is led by a team of mining professionals with the rare combination of in-house exploration and development expertise needed to bring top notch projects through to production, unlocking significant value for investors. Dr. Hennigh is an economic geologist with decades of gold exploration experience. While with Gold Canyon Resources, he led exploration at the a 5-million-ounce Springpole alkaline gold project near Red Lake Ontario. Novo CEO Rob Humphryson is a mining engineer with decades of experience in the Australian mining industry, including underground and open pit mining operations from both a contractor and miner’s perspective.

Pilbara’s conglomerate gold represents a rewarding challenge for the right team. The coarse, nugget effect of this gold deposit type needs an ideal combination of mining ingenuity and expertise to achieve potentially significant high-grade gold production. Novo believes it has the sorting technology and technical know-how to make it happen. “We’re not afraid of tackling coarse gold deposits and have developed the in-house methodology to evaluate coarse gold deposits,” said Hennigh. “We’re probably the only gold company to be exclusively focused on producing high-grade gold concentrate using mechanical sorting.”

Novo Resources’ Company Highlights

  • Large portfolio of gold projects in Tier 1 mining jurisdiction known for significant gold production.
  • Flagship project Beatons Creek is production-ready.
  • Significant news flow expected throughout 2020/2021.
  • Recent acquisition of processing infrastructure represents a catalyst to fast track the company to producer status.
  • Unicorn management team with the expertise to take projects from exploration through to production.
  • Developed in-house methodology (mechanical sorting) for tackling the challenge of coarse, nugget effect conglomerate gold with the potential to produce high-grade gold concentrate.
  • Expecting to receive KSS 100F LIXT fine mechanical sorting unit from Steinert Global for use at project sites during the 2020 field season.
  • Strategic financial partnership with Sumitomo Corporation.
  • Major shareholders include Kirkland Lake Gold (15.83 percent), Eric Sprott (12.2 percent) and Newmont Gold (3.15 percent).

Key Projects in Pilbara Region of Western Australia

The Fraser Institute ranked Western Australia as the world’s top mining jurisdiction in 2019. Covering more than half a million square kilometers, Pilbara is one of the most resource-rich regions in the state and home to many near-surface deposits of gold, iron and various other base metals. Pilbara’s plethora of shallow mineral wealth has translated into limited exploration at depth, meaning there is still lots of blue-sky potential to be had in the region, especially for gold.

While the region is known to host orogenic gold deposits, in the last few years the Pilbara has become a growing hotspot for high-grade conglomerate gold exploration. The gold discoveries made at Novo Resources’ projects are indicative of this coarse gold deposit type.

novo resources pilbara gold mineralization

novo resources tenement holdings

Beatons Creek Gold Project

Novo Resources’ 100-percent owned Beatons Creek gold project cover 166.3 square kilometers  near the town of Nullagine in Western Australia. Although historic gold mining dates back to the late 1800s in the Nullagine region, the area has seen very little modern exploration.

Today, Beatons Creek is a production-ready property with mining lease, mine permitting and native title agreements in place.

Through extensive exploration, Novo has established a new geologic model for conglomerate gold deposits at Beatons Creek along with a 2019 NI 43-101 resource estimate—for a project management says others had written off as not workable.

Beatons Creek 2019 Resource Estimate

novo resources 2019 resource estimate

Mineralization remains open to the north-west and south-west with several areas identified for resource development drilling.

Promising mechanical sorting tests on bulk sampling

In 2018, Novo conducted a 5.6 tonne bulk sampling program at Beatons Creek. Half of this material was delivered to Steinert Global’s Bibra Lake and Canning Vale testing facilities in Perth, while the other half was sent to TOMRA Sorting Pty Ltd.’s mechanical sorting test facility in Castle Hill, New South Wales for test work beginning in late January 2020. Sub-samples of the latter were forwarded for testing in Germany conducted in late February 2020.

The results of the test work completed at Stienert resulted in a calculated head grade of 5.72 gpt gold for the bulk sample. An impressive 90.2 percent of gold was recovered in 54.5 percent of the mass of the +18/-50 mm fraction, 68.8 percent of gold was recovered in 42.4 percent of the mass of the +6/-18 mm fraction, and 95.5 percent of gold was recovered in 20.3 percent of the mass of the +2.3/-6 mm fraction. The results of test work completed by TOMRA were similar to those generated using the Steinert mechanical sorter. A concentrate containing 92.1 percent of gold in just 39.9 percent of the original mass was generated.

novo resources 2019-2020 beatons creek testing

These test results have bolstered management’s confidence in mechanical sorting as a potentially effective means of upgrading Beatons Creek conglomerate gold mineralization. Although the test work conducted on 2-6mm material targeting mass pulls lower than 40 percent yielded lower gold recoveries, Novo sees an opportunity to achieve lower mass pulls while recovering +90 percent of gold through various optimizations.

Path to Production in 2021

In Q3 2020, Novo Resources’ plans on tendering major mining contracts and refurbishment work for the newly acquired processing facility, commencing critical systems developments and upgrades, recruiting a capable workforce, and completing grade control drilling on the Beatons Creek gold project. The company intends to commission the processing facility In Q4 2020 and commence mining in Q1 2021.

Egina Gold Project

Novo Resources’ wholly-owned Egina gold project is located in the heart of the newly emerging conglomerate gold province of the Pilbara Craton.

The company’s extensive exploration work at Egina has led to a new geological model for gold in terrace gravels and a sampling regimen for nugget gold in gravel. Exploration work is ongoing and includes trenching and bulk sampling. Mechanical sorting tests are being conducted on Egina bulk samples and Novo is working to identify mining technologies best suited to the project. To move the project further down the path the production, management is working toward heritage access and native title agreements as well as conducting necessary studies for mine permitting.

Egina Geological Model

novo resources egina geological model

Novo Resources’ has identified three styles of gold mineralization at Egina:

  • basal Fortescue gold-bearing conglomerates like those at Novo’s Karratha gold project;
  • gold-bearing, deflationary and/or marine lag gravels blanketing an erosional terrace covering most of the Egina area, and
  • lode gold mineralization hosted by the underlying Mallina Basin assemblage.

novo resources egina terrace

Novo considers the gold-bearing terrace lag gravels to be the most important immediate target at Egina. Where they have been trenched, they are up to 1.5 meters thick and weakly consolidated. Lag gravels rest on weathered Mallina Group sedimentary rocks, and up to 1 meter of soil and sand overlie them.

novo resources trenching and bulk sampling

2019/2020 Bulk sampling work continues with positive results

In July 2020, the company released positive mobile alluvial Knudson (MAK) sampling results indicating widespread gold potential within terrace gravels. Novo believes these systematic sample results provide an encouraging picture of how gold might prove to be distributed over broader parts of the project.

novo resources mak sampling

NE egina bulk sampling results

Novo’s 2020 field season plans include further MAK sampling at multiple prospective gravel targets identified across the project and new heritage surveys (COVID-19 dependent). Late in 2020, the company anticipates collecting and trucking some bulk samples to its mechanical sorting plant at Purdy’s Reward, once commissioned, to further test the viability of this method in achieving gold recoveries at Egina.

Novo will demonstrate best practices in environmental land management by progressively rehabilitating all MAK sampling pits and bulk sample sites.

Karratha Gold Project

Novo Resources’ Karratha gold project covers more than 7,600 square kilometers in the Pilbara Craton. The project includes the key gold targets Comet Well, Purdy’s Reward and 47K that are part of a 50-meter to 100-meter thick sequence of sedimentary rocks underlying the Mt. Roe basalt at the base of the Fortescue Group.

Most of the gold found at Comet Well and Purdy’s Reward is in the form of coarse +2 mm watermelon seed-shaped nuggets not attached to quartz or other minerals. The gold is of high purity (+96 percent), compared to lode gold from the Pilbara region that displays purities of 70 percent to 90 percent.

novo resources gold units

The company’s exploration work at Karratha has established a new geological model for Mt. Roe conglomerate gold.

Karratha Gold Project Geological Model

novo resources gold units

Planning trial bulk extraction and processing

To date, a series of bulk samples (approximately 300 kg samples at Purdy’s Reward and approximately 5 tonne samples from Comet Well) have returned grades up to 10.4 g/t gold, with significant gold mineralization demonstrated along the 2 km exposed strike length on the Comet Well and Purdy’s Reward leases.

In June 2020, Novo Resources announced advanced discussions with Steinert to procure a 1 meter wide KSS 100F LIXT fine mechanical sorting unit for use at Karratha during the 2020 field season. The company is looking to field test up to 10,000 tonnes of material from Purdy’s Reward, Comet Well and 47K, respectively, for a total up to 30,000 tonnes.

Novo also plans to employ this sorter to test field exploration samples delivered from its other projects including Egina. “Field test work will be designed to better understand gold grades, the extent and location of mineralized conglomerate units, evaluate mechanical sorter gold recovery at production throughput rates and of various sorted size fractions, and provide critical input concerning operational costs,” stated the company’s new release.

Novo has completed the necessary mineralization report for the mining lease application and is working toward native title agreements along with conducting studies for full mine permitting.

Novo Resources’ Management Team

Dr. Quinton Hennigh—Chairman and President

Dr. Quinton Hennigh is an economic geologist with 25 years of exploration experience, mainly gold related. Early in his career, he explored for major mining firms including Homestake Mining Company, Newcrest Mining Ltd and Newmont Mining Corporation. Dr. Hennigh joined the junior mining sector in 2007 and has been involved with a number of Canadian listed gold companies including Gold Canyon Resources where he led exploration at the Springpole alkaline gold project near Red Lake Ontario, a 5 million ounce gold asset that was recently sold. In 2010, Dr. Hennigh helped start Novo Resources and began assembling its Australian exploration portfolio. Dr. Hennigh obtained a Ph.D. in Geology/Geochemistry from the Colorado School of Mines.

Rob Humphryson—CEO

Rob Humphryson, a Mining Engineer, graduated from the Western Australian School of Mines in 1990. Humphryson has over 25 years of experience within ASX-listed companies in the Australian mining industry, gaining broad exposure to underground and open pit mining operations from both a contractor and miner’s perspective. A 17-year career at Macmahon Underground (formerly National Mine Management) culminated in executive operational and business development leadership roles within the group. He has more recently held senior roles at Swick Mining Services (Business Development Manager) and Silver Lake Resources (Chief Operating Officer), where he gained significant exposure to precious metals project construction, operation and acquisitions. Humphryson is a member of the AusIMM.

Ronan Sabo-Walsh—Chief Financial Officer

Ronan Sabo-Walsh has over 7 years’ experience in corporate finance. He was employed by a full-service merchant bank providing ongoing financial and back-office support to public companies and served as the Chief Financial Officer of a mineral exploration company listed on the Canadian Securities Exchange prior to joining Novo. Sabo-Walsh has extensive experience with public listings, merger transactions, and public company management, and holds a Bachelor of Commerce degree in finance from the University of British Columbia in Vancouver, BC.

Leo Karabelas—VP Corporate Communications

Leo Karabelas is the founder and president of Focus Communications, a Toronto based investor relations, corporate communications and advisory firm. He has more than 12 years of experience working with private and public companies in various sectors with a focus on natural resources. Karabelas bridges the gap between companies and the investment community, developing IR strategies that help clients raise visibility in the capital markets and improve liquidity. He has managed countless analyst and investor days and executed hundreds of investor road shows throughout the world. In addition to his role at Focus communications he is also a director of Labrador Gold Corp. Karabelas has a bachelor of commerce degree in management and enterprise development from Ryerson University.

Akiko Levinson –Director

Akiko Levinson brings over 20 years of experience to the market, has extensive experience in mining finance and end-to-end rare earth mineral investment. Levinson is currently the President & CEO and Director of Irving Resources Inc. which holds gold projects in Japan and joint venture projects with JOGMEC in Africa. Previously, she served as the President of Gold Canyon Resources Inc., a TSX-Venture listed mineral company with North American operations, for more than 10 years.

Michael Barrett –Director

Michael Barrett is a chartered accountant with over 28 years’ experience. Barrett is a highly regarded former chief financial officer with extensive board-level strategic experience, combined with hands-on operational experience and deep international capital market experience. From 2004 – 2015, he was based in the US as CFO of Rio Tinto’s energy coal business and led its listing on the NYSE in 2009. Most recently, he was National Lead Partner for Deloitte’s energy and resources risk advisory practice, before establishing his own consulting business.

Yoshikazu Ishikawa—Director

Yoshikazu Ishikawa is currently the General Manger of the Non-Ferrous Metals Business Department in Sumitomo Corporation of Tokyo, Japan, and joined Sumitomo in 1992. Ishikawa has been involved with numerous large-scale global mining projects including the Batu Hijau copper and gold project in Indonesia, the San Cristobal zinc and silver project in Bolivia, the Yanacocha gold and copper project in Peru, and the Quebrada Blanca #2 copper and the Sierra Gorda copper and molybdenum projects in Chile. He has managed Sumitomo offices in Denver and Vancouver and brings a wealth of finance and M&A experience to the Company’s board of directors. Ishikawa was also instrumental in coordinating Sumitomo’s US$30 million farm-in and joint venture arrangement with Novo over the Egina gold project in June 2017.

Kas De Luca—General Manager, Exploration

With a career in exploration and mining spanning more than 30 years, Kas De Luca joins the company most recently from Newcrest Mining Limited where she held the role of Regional Exploration Manager, Asia Pacific. In this role, De Luca was responsible for strategic planning, project management and generative portfolios. Prior to her stint at Newcrest, De Luca worked for a number of domestic and international mining and exploration companies including Dundee Precious Metals, Thani-Ashanti, Placer Dome, and KCGM, and was also one of the founding directors of successful specialist geological consultancy Jigsaw Geoscience. De Luca is a highly qualified exploration specialist with excellent technical, business, and people skills and with a record of effectively establishing and managing high performance teams to success in both near-mine and greenfield environments.

Chris Mardon—Senior Manager, Operations for Nullagine Gold Project

Mr. Mardon is a mining engineering graduate of the Western Australian School of Mines who brings a wealth of mine operational experience to Novo, with a 30-year mining career spanning both local and international operations. Mr. Mardon has extensive experience in similar roles, overseeing successful gold operations throughout Western Australia, in addition to direct operational experience with mechanical sorting technology.

Brad Woodland—Mining Manager for Nullagine Gold Project

Mr. Woodland has over 30 years of mining industry experience with the majority directly involved in the gold mining industry. Mr. Woodland’s exposure to paleo-channel mining in the West Australian Goldfields and alluvial gold mining in Laos represents a significant advantage in fully exploiting the conglomerate material in the Nullagine region.


 

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The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Novo Resources Corp and seek advice from a qualified investment advisor.