Flush with cash from an oversubscribed initial public offering (IPO) and a $35 million deal with neighbouring mining giant De Grey Mining for its Becher project, Novo Resources Corporation has officially launched on the ASX.
The successful IPO netted the company $7.5 million before costs through the issue of 37.5 million common shares to Australian residents only. It has been listed in Canada since 2010 and management says it intends to retain the listing, in addition to joining the ASX.
Novo says entry into the ASX market opens up a more readily-accessible Australian capital base, with greater access to liquidity and increased exposure to the nation’s institutional investors.
Novo Resources Corporation executive chairman and acting chief executive officer Michael Spreadborough said: “The ASX listing is the logical next step for Novo and will facilitate our Australian growth plans, considering the local investor appetite for mining and exploration opportunities. We are focused on accelerating our exploration activities and seeking value accretive opportunities to grow long-term shareholder value.”
The company’s flagship Becher project spans a 20-square-kilometre area of the Egina gold camp in the underexplored Mallina Basin and directly neighbours De Grey’s bulging Mallina deposit. It lies just 2.5km south of De Grey’s Withnell South discovery.
Mallina’s resource was recently upgraded by 1.1 million ounces through ongoing drilling to now sit at a whopping 11.7 million gold ounces.
As part of its recent investment deal, De Grey has the right to earn a 50 per cent interest in Becher and adjacent tenements by spending $25 million in four years. The 50-50 “Egina” joint venture (JV) will be then formed, with a minimum $7 million to be spent within 18 months.
Separately, De Grey has agreed to take a cornerstone investment of $10 million in Novo common shares for about an 11.6 per cent interest, making it the Canadian-based company’s biggest single shareholder.
De Grey will manage all exploration at Becher under the earn-in agreement and will become the manager of the Egina JV once it is established. It already has plans for a 39,000m air-core (AC) campaign at the Egina JV area, with an initial focus on the Becher project.
Becher forms part of Novo’s 10,500sq-km Pilbara tenement package and sits within its greater Egina gold camp between De Grey’s Mallina and Hemi gold projects. The company says the camp includes an 80km strike trend along a known gold-fertile corridor between Becher and Nunyerry North.
Novo recently completed a 61,400m AC drill campaign at Becher, sinking 2540 holes that identified 207 intercepts recording more than 0.5 grams per tonne gold and 109 hits exceeding 1g/t.
The company is set to kick off a combined 6000m drill campaign across its key Pilbara prospects and its Belltopper project in Victoria following its success at Becher. The exploration program will target Novo’s Nunyerry North and Balla Balla projects in Western Australia’s Pilbara region, while it also has plans for a diamond drill campaign at Belltopper.
Management says it has finalised the program design and planning for its 2000m maiden drill program at Nunyerry North, which sits to the south of the Egina gold camp and about 80km south-west of its flagship Becher project. The company has identified a gold soil anomaly at the site that extends through a 1.4km strike, where samples taken in 2021 returned values of up to 30.3g/t gold.
Balla Balla covers an area of more than 1200sq km in the north-west Pilbara region, with several small historical gold workings, but limited systematic exploration. Novo is planning about 2000m of drilling, with several pegged exploration licenses at the site expected to be granted this year.
On the other side of the country in Victoria, Novo has highlighted several high-priority target areas at its Belltopper gold project after compiling a comprehensive set of data. Results from drilling, sampling, mapping, surveys and historic data have been used to compile a 3D prospectivity model of the project to collate effective drill-targeting for a 2000m diamond campaign set for next month.
The company has a strong balance sheet with no debt, cash in the bank and marketable securities of $51.75 million and is focused on executing its growth strategy, which aims to identify and define deposits with more than a million-ounce development potential.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Michael Philipps
