Toronto-listed gold producer Novo Resources has churned out 18,144 ounces of gold in the third quarter at its newly minted Nullagine gold project in the Pilbara that produced 14,890 ounces in the previous quarter. Gold sales generated C$43 million revenue for Australia’s first commercial conglomerate gold miner who finished the quarter with a hefty C$44.1 million in the tin and an impressive C$135 million worth of liquid investments.
Some 451,000 tonnes of dirt was pushed through the company’s Golden Eagle processing plant during the quarter, a substantial 23 per cent increase on the 366,000 tonnes achieved in quarter two.
Notably, gold recovery rates for the quarter were solid at about 94 per cent.
To date, all of the company’s current mill feed has been sourced exclusively from its conglomerate gold deposit at Beatons Creek.
Novo commissioned Beatons Creek back in February with a targeted throughput rate of 1.8 million tonnes per annum, an important milestone that was achieved on an annualised basis in the third quarter.
So far, the operation has largely involved the mining of the shallower oxide mineralisation at the deposit as the company works its way down to the more lucrative fresh rock mineralisation for which it is awaiting mining approvals.
Head grades in the oxide ore increased from 1.3 grams per tonne in quarter 2 to 1.34 g/t in quarter 3 however Novo says the grades in the oxide are still a disappointment and lower than expected – largely due to a lack of close spaced drilling.
Finding suitable flat close spaced drilling locations at the project is difficult in the best of times due to the uneven “domal” nature of the topography, however Novo’s decision to mine largely coincided with a massive exploration boom in WA that saw crazy wait times for sample assays at local labs.
Many samples were and still are taking up to six weeks to be processed, delivering a savage blow to miners looking to rely on grade control drilling to laser target their mine plan.
Novo’s plan to keep the mine on track and develop it further from here is three-fold.
Firstly it has successfully been trialling and will continue to use an exciting new way to assay its samples using a purpose built “Chrysos PhotonAssay” machine from Intertek that essentially just radiates a “hockey puck” sized sample to deliver assay results within just days rather than weeks – technology that has the potential to reinvent the fire assay industry.
Novo will use results from these samples generated from 10m x 10m spaced drill holes and a flood of results that are starting to come in now from previously submitted samples to undertake a study on the oxide ores with a view to more selectively mining them.
Secondly, the company is sitting on a conga line of a dozen or so interesting looking non-conglomerate gold prospects within about 50km of the plant.
It is voraciously exploring these prospects with a view to providing another source of ore for the mill in addition to the oxide ore and the impending fresh rock horizon.
Finally, the main game is the fresh rock below the oxide that is starting to poke its head through in some locations.
Novo must now endure an agonizing wait for Mines Department approval to monetise this resource that it expects will hold up at around the grade that was previously encountered during a 43kg bulk trial of 1.83 grams per tonne.
Once the fresh rock mining approvals come through, it will be off to the races for Novo who expects to mine this resource for at least 3 to 4 years.
Importantly the resource is still open and showing good grades at depth that may lead to underground mining activity.
Even though the fresh rock is essentially sulphide mineralisation, importantly, it is NOT difficult refractory ore and has previously demonstrated solid recoveries in a bulk sample of over 94 per cent.
Notably, 56 per cent of the bulk sample in the fresh rock was recovered in the gravity circuit, leading to a relatively simple processing route.
The existing resource base for Beatons Creek, consisting of oxide and fresh rock mineralisation, clocks in at about 4.3 million tonnes going 3.5 g/t gold for 446,000 ounces of the precious yellow metal in the inferred category. The deposit takes in another 6.65Mt at 2.1 g/t for 457,000 ounces of gold in the higher confidence indicated category.
Management says some 65 per cent of the total resource base at Beatons Creek falls into the fresh rock category which is handy given that it is still open at depth.
Novo has suffered a bit of a blow with the reduced head grade in the oxide ore, however if it can keep washing its face and even turning a profit of sorts from the oxide on the way down to the fresh mineralisation, that’s where the real story will start.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Matt Birney
