Jul 1 2019
Novo Resources Corp. takes immense pleasure in announcing that it has signed a binding letter of intent (LOI) with De Grey Mining Ltd., an ASX-listed entity, to considerably widen its exposure to the adjacent gold-bearing lag gravel deposits and assumed to be identical with the Company’s Egina gold project.
Novo has obtained the permission to investigate De Grey’s tenements for gold-bearing lag gravel deposits for a preliminary three-year period (the “Initial Period”) by paying AUD $1 million, of which Novo will hold in escrow AUD $300,000 will be held until De Grey secures Indee Gold Pty Ltd.
Before the Initial Period gets expired, Novo can choose to extend its exploration rights for an two extra years (the “Second Period”) by paying an extra AUD $1 million (the “Second Payment”), of which AUD $300,000 will also be held in escrow by Novo until De Grey secures Indee Gold.
Novo can opt to carry on extending its exploration rights beyond the Second Period in two-year increments by paying an extra AUD $1 million per extension period, depending on the successful submission of a mining lease application or De Grey’s waiver of this condition.
In case a mining lease is provided to Novo on the De Grey tenements, Novo will be supposed to have obtained an 80% interest in the relevant tenements (or portions thereof) which cover the mining lease area (the “Joint Venture”) by offering notice to DEG and making a one-time transaction of AUD $2 million. If the Joint Venture is set up during the Initial Period, Novo will also be needed to pay the Second Payment.
De Grey continues to be the primary tenement holder and will have priority at all phases of exploration and mining for bedrock mineralization, while Novo has rights for exploration and mining for gold-bearing lag gravel deposits.
Some tenements owned by De Grey are left out, for instance, granted mining and miscellaneous leases, existing De Grey resources with a 300 m buffer, any future mining leases granted over the current De Grey resources, De Grey’s conglomerate gold excursion areas, and minor areas of current gravel rights on De Grey’s tenure that are presently held by third parties.
The De Grey landholding is immediately adjacent to our Egina gold project. Through this option arrangement, we have effectively added around 1,100 km2 of additional exposure to gold-bearing lag gravels in the region, a significant focus of Novo’s current exploration program.
Dr Quinton Hennigh, Chairman and President, Novo Resources Corp.
Hennigh added, “Over the coming months, we plan to evaluate the gold content and continuity of shallowly occurring gravels at Egina. Our program can now be expanded to test areas on this newly optioned ground. Although an unusual style of gold mineralization, we are very excited by the potential the terrace gravels have to offer.”