Novo to Acquire Strategic Portfolio of Tenements in Egina Region of Western Australia
VANCOUVER, British Columbia, Sept. 17, 2018 (GLOBE NEWSWIRE) -- Novo Resources Corp. (“Novo” or the “Company”) (TSX-V: NVO; OTCQX: NSRPF) is pleased to announce that it has entered into two property transactions in the Egina region of Western Australia.
Farno McMahon Share Purchase Agreement
The Company entered into a share purchase agreement whereby (subject to satisfaction or waiver of customary conditions) the Company will acquire 100% of the issued and outstanding shares of Farno-McMahon Pty Ltd (“Farno”), an Australian proprietary limited exploration company (the “Farno Transaction”). Farno holds a 100% interest in four key tenements in the Egina region of Western Australia, including two mining leases. One of these (an exploration licence) is subject to an option with respect to a potential joint venture arrangement.
The Company paid AUD $150,000 in cash to Farno upon execution of an initial agreement. Subject to the satisfaction or waiver of outstanding conditions (including completion of satisfactory due diligence by Novo and receipt of TSX Venture Exchange approval), the Company will pay a further AUD $2.35 million in cash to the shareholders of Farno and issue AUD $5.5 million-worth of Novo common shares at a deemed price of CAD $4.107 per share (and converted at the exchange rate on the day prior to completion) to the shareholders of Farno. All Novo common shares issued pursuant to the Farno Transaction will be subject to a statutory hold period of four months from the date of issuance in accordance with applicable securities legislation and the policies of the TSX Venture Exchange.
Pioneer Resources Memorandum of Agreement and Private Placement
The Company is also pleased to announce that Novo and one of its Australian subsidiaries have entered into a binding memorandum of agreement (the “MOA”) with ASX-listed Pioneer Resources Limited (“Pioneer”). Pursuant to the MOA, Novo will be entitled to earn, via farm-in arrangements, a 70% interest in precious metal rights on four exploration tenements in the Egina region of Western Australia which comprise the Kangan gold project (the “Pioneer Transaction”). Novo considers this area prospective for conglomerate-related gold mineralization. As part of the Pioneer Transaction, Novo will subscribe to AUD $1 million in Pioneer ordinary shares at AUD $0.02 per share as a private placement (please see Pioneer's news release dated September 18, 2018 for further details).
Novo will pay AUD $200,000 in cash and issue 100,000 common shares (the “Consideration Shares”) to Pioneer in accordance with the MOA. The Consideration Shares will be subject to a statutory hold period expiring four months from the date of issuance. The Pioneer Transaction is also subject to TSX Venture Exchange approval.
“Egina has long been known as an important Pilbara gold district,” commented Quinton Hennigh, President and Chairman of Novo Resources Corp. “Gold nuggets have been found in modern surface gravels over a vast area around Egina since the late 1800's. Upon researching the distribution and nature of gold nuggets earlier this year, Novo has concluded these are largely derived from weathering and erosion of basal Fortescue conglomerates similar to those at Comet Well and Purdy's Reward. This makes Egina particularly intriguing. In our view, not only is there potential for the discovery of gold-bearing conglomerates, there is also very good potential for significant surface gold deposits occurring in modern lag gravels. Acquisition of the core tenements at Egina consolidates Novo's position in this potentially very important gold district.”