TSXV:NVO

Novo Exercises Option Over GBM Resources' Malmsbury Gold Project

Novo Resources Corp. (" Novo " or the " Company ") (TSX-V: NVO; OTCQX: NSRPF) is pleased to announce that it has exercised its option to earn a 50% interest (the " Interest ") in the Malmsbury gold project (the " Malmsbury Project ") held by ASX-listed GBM Resources Limited (ASX: GBZ) (" GBM "). Transfer of the Interest to Novo is subject to approval from the Victorian Department of Jobs, Precincts and Regions and the Australian Foreign Investment Review Board (the " Conditions "). Please see the Company's news releases dated March 30, 2020 and April 6, 2020 for further details.

"We are pleased to exercise our option over the Malmsbury project," commented Quinton Hennigh, Chairman and President of Novo. "Although early stage, Malmsbury hosts one of the closest geologic analogues to the high-grade Fosterville gold deposit situated approximately 50 km to the north. Like Fosterville, Malmsbury is situated along the eastern margin of the prolific Bendigo zone. Mineralization is of classic epizonal orogenic style displaying high-level vuggy quartz veins, elevated antimony and finely disseminated high-grade gold. Novo believes that it now holds one of the most prospective high-grade gold projects in the Victorian gold fields."

Upon satisfaction of the Conditions, Novo will issue 1,575,387 common shares (the " Option Shares ") to GBM as consideration for the exercise of the option. The Option Shares will be subject to a statutory hold period expiring four months from the date of issuance of the Option Shares. The Company will also reimburse GBM for validly incurred and documented exploration expenditures on the Malmsbury Project of up to AUD $250,000 incurred from March 30, 2020 to today, with such reimbursed amount being credited against the Earn-In Amount (defined below).

Upon satisfaction of the Conditions, Novo will have the right to earn an additional 10% interest in the Malmsbury Project and form a joint venture with GBM by incurring AUD $5 million in exploration expenditure (the " Earn-In Amount ") over a four-year period (the " Earn-   I   n Period "), as to a minimum of AUD $1 million during the first year, and AUD $1.25 million in each subsequent 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 does not satisfy the Earn-In Amount during the Earn-In Period, Novo's interest in the Malmsbury Project will decrease to 49%.

If Novo satisfies the Earn-In Amount during the Earn-In Period and delivers to GBM written notice of its election to increase its interest in the Malmsbury Project to an aggregate 60% interest and initiate a joint venture with GBM (the date on which such notice is given being the " Joint Venture Date "), GBM will be required to elect to (i) retain its 40% interest in the Malmsbury Project by contributing to 40% of exploration and development expenditure incurred subsequent to the Joint Venture Date, or (ii) dilute its interest in the Malmsbury Project to 25% upon delivery by Novo of a preliminary economic assessment (the " PEA ") disclosing at least a 1 million ounce gold resource, of which at least 60% must be in the Indicated classification, within 3 years from the Joint Venture Date. In such case, Novo will pay all development expenditure incurred commencing from the Joint Venture Date, but if a decision to mine is made, GBM will reimburse Novo as to 25% of any such development expenditure from a maximum of 80% of Malmsbury Project cash flows.

Novo and GBM are currently finalizing a royalty arrangement whereby, subsequent to a decision to mine, GBM will be entitled to receive a maximum 2.5% net smelter returns royalty (the " Maximum   Royalty "). The Malmsbury Project is encumbered by certain pre-existing royalties; where such an encumbrance is present, GBM will only be entitled to an adjusted royalty, being the Maximum Royalty less any pre-existing royalty amount.

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, that Malmsbury project is one of the most prospective high-grade gold projects in the Victorian gold fields, the expected finalization of the Maximum Royalty arrangement, the expected satisfaction of the Conditions, and the advancement of Novo's Beatons Creek project to production. 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 results of further negotiations with GBM, the timeframe associated with Australian Foreign Investment Review Board and the Victorian Department of Jobs, Precincts and Regions approvals, and customary risks of the mineral resource exploration industry.


Primary Logo

News Provided by GlobeNewswire via QuoteMedia

The Conversation (0)
Map of Ontario, Canada, with "Top 5 Canadian Mining Stocks This Week" text overlay.

Top 5 Canadian Mining Stocks This Week: Onyx Gold Shines with 118 Percent Gain

Welcome to the Investing News Network's weekly look at the best-performing Canadian mining stocks on the TSX, TSXV and CSE, starting with a round-up of Canadian and US news impacting the resource sector.

Statistics Canada released April’s gross domestic product (GDP) numbers on Friday (June 27). The data showed a slowing in the Canadian economy with a 0.1 percent monthly decline after it increased 0.2 percent in March as businesses attempted to get ahead of US tariff deadlines.

In April, the shift in US trade policy led to significant declines in the manufacturing sector, which saw its largest drop in four years at 1.9 percent. Durable goods manufacturing declined for the first time in four months, dropping 2.2 percent d. The most heavily impacted sub-sectors were transportation equipment and the auto sector, which fell 21.6 percent and 5.2 percent, respectively.

Keep reading...Show less
Gold bars with "5 Top Australian Mining Stocks" text overlay.

Top 5 Australian Mining Stocks This Week: GBM Soars on AU$13 Million Raise

Welcome to the first edition of the Investing News Network's weekly round-up of Australia’s top-performing mining stocks on the ASX, starting with news in Australia's resource sector.

In significant news for Australia's iron sector, mining giant Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO), together with its joint venture partner Hancock Prospecting, said on Tuesday (June 24) that the partners will invest a combined US$1.6 billion to develop the Hope Downs 2 iron ore project in the Pilbara region, Western Australia.

Companies focused on antimony and gold have also been making news this week, such as Resolution Minerals (ASX:RML) announcing its acquisition of the Horse Heaven project in Idaho, US, and Ausgold (ASX:AUC,OTC Pink:AUSGF) signing an agreement to acquire Critica’s (ASX:CRI,OTC Pink:VTMLF) Kulin gold project in Western Australia.

Keep reading...Show less

Latest Press Releases

Related News

×