Mr. Quinton Hennigh reports
NOVO TO ADVANCE EGINA GOLD PROJECT BY WAY OF US $30 MILLION FARMIN & JOINT VENTURE WITH SUMITOMO CORPORATION
Novo Resources Corp. has entered into a $30-million (U.S.) farm-in and joint venture agreement with Sumitomo Corp. of Tokyo, Japan, and its wholly owned Australian subsidiary in order to advance Novo's Egina project located approximately 80 kilometres south-southwest of Port Hedland, Wash.
The project comprises wholly owned Novo tenure, including tenements acquired through the recent acquisition of Farno-McMahon, tenements into which Novo is currently earning an interest under a binding memorandum of agreement with Australian Securities Exchange-listed Pioneer Resources Ltd., and a tenement into which ASX-listed De Grey Mining Ltd. is currently earning an interest under a farm-in and joint venture agreement executed with Farno prior to its acquisition by Novo (please see the company's news releases dated Sept. 17, Sept. 21 and Oct. 1, 2018).
Pursuant to the agreement, Sumitomo is entitled to earn, through farm-in arrangements, up to a 40-per-cent interest in the project by spending up to $30-million (U.S.) (approximately $40.2-million) over three years, with a required minimum of $5-million (U.S.) per phase defined by a program and budget (approximately $6.7-million). Sumitomo has the right to elect not to continue with the farm-in arrangement and, if this right is exercised, it is expected that any amounts advanced under the farm-in arrangement will be converted into common shares of Novo through a shares-for-debt settlement at the higher of $2 and the minimum price permitted as at the date the right is exercised, subject to receipt of TSX Venture Exchange approval. Any shares issued to Sumitomo pursuant to such a debt settlement will be subject to a 12-month contractual hold period (inclusive of the required four-month statutory hold period) and orderly sale restrictions. The agreement also contains a mechanism by which Sumitomo can participate in an expanded project area.
"Novo's Egina project is an early-stage, high-potential gold project," commented Dr. Quinton Hennigh, chairman and president of Novo Resources. "Sumitomo, upon conducting their own technical review, has developed a similar opinion. It is remarkable for an exploration company to team up with a world-class finance partner like Sumitomo. With Sumitomo's financial backing, we aim to quickly advance Egina through exploration and test extraction phases with the ultimate goal, should results prove favourable, of setting the project on a path to production. Novo has been developing the relationship with Sumitomo for many years, built on a foundation of mutual trust and respect. The combined teams have the technical capacity to advance this unique gold deposit and we are honoured to work with Sumitomo's capable technical team."
About Novo Resources Corp.
Novo's focus is to explore and develop gold projects in the Pilbara region of Western Australia, and Novo has built up a significant land package covering approximately 13,000 square kilometres with varying ownership interests.
We seek Safe Harbor.
© 2020 Canjex Publishing Ltd. All rights reserved.