NOVO Resources Corp (TSX-V: NVO; OTCQX: NSRPF): World-Class Large-Scale Australian Conglomerate Gold Deposits; Interview with Dr. Quinton Hennigh, President and Chairman
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 3/26/2019
Novo Resources Corp. (TSX-V: NVO; OTCQX: NSRPF), a Canadian gold exploration and development company, has built up a significant land package covering approximately 12,000 sq km with varying ownership interests in the Pilbara region of Western Australia. We learned from Dr. Quinton Hennigh, President and Chairman of NOVO Resources Corp., that they are looking for world-class large-scale conglomerate gold deposits, and their most advanced project is called Beatons Creek, near the town of Nullagine, in the East Pilbara region. At the moment, Novo is focused on increasing significantly, the current resource of about 670,000 ounces. Novo is working on another interesting project, the brand new conglomerate gold Karratha discovery, in the West Pilbara region, very large system, where the Company did aggressive bulk sampling in 2018. The Company is tightly held with such major shareholders as Kirkland Lake Gold, Newmont Mining, Eric Sprott, and Mark Creasy.
Novo Resources Corp.
Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, here at PDAC 2019, interviewing Dr. Quinton Hennigh, Chairman and President of NOVO Resources Corp. Could you give our readers/investors an update on what's been going on since the last time we interviewed? Also for the benefit of the thousands of new readers/investors, who have joined us since our last interview, could you give us an overview of your Company? Also tell them the exciting news that's going on with NOVO Resources?
Dr. Q Hennigh: Sure. NOVO Resources is a Canadian-listed junior exploration company. We are focused on exploring in Australia. Our projects are in the Pilbara region, in Northwestern Australia. We're exploring for deposits that most people find unconventional. These are deposits of conglomerates, which are basically gravels that were laid down in ancient rivers and oceanic environments many, many millions of years ago. 2.74 billion years ago, to be exact. These conglomerates contain particles of gold that were trapped when the gravels were laid down. And in places, these deposits are what appear to be potentially economic. These are deposits similar to those that are found in South Africa in some respects, albeit the gold is much coarser. Most of our gold occurs as quite coarse nuggets, whereas the particles in the deposits in South Africa are quite small, compared to the ones we see in Australia.
Dr. Q Hennigh: We are looking for large systems. The game here is to explore for a deposit that could be truly world-class, truly make a very large-scale mine one day. We have three main areas of focus at the moment. Our most advanced project is called Beatons Creek, near the town of Nullagine in the East Pilbara region. Beatons Creek really has a resource measured and inferred and indicated of roughly 670,000 ounces. We are going to be publishing a new resource on the property very shortly that should see a significant upgrade and increase in size of that particular deposit. That was the first project we worked on, Beatons Creek. We started work there in 2011.
Dr. Q Hennigh: Moving forward, we then started working in a place called Karratha. Karratha is in the West Pilbara region. It is also a conglomerate system. But it was previously unrecognized. This was a brand-new discovery. It was found in 2016 by local prospectors, using metal detectors. When NOVO learned of this discovery, we quickly grabbed as much ground as we could, and we have a commanding land position in the region. We are exploring this very, very large gold system at the moment. We've done some aggressive sampling, including bulk samples in 2018 that are giving us indications that the grades are actually very similar to those that we see at Beatons Creek, on the order of two or three grams per ton. Given these are near-surface deposits, we're very hopeful that these should make a very good mine someday.
Dr. Q Hennigh: The third project we have is called Egina. Egina is a conglomerate-hosted system like the one we have at Karratha. But we also find places where the gold-bearing conglomerates have eroded in recent time. The nuggets that are trapped in those conglomerates have been liberated and then reworked into modern-day gravels. So we are exploring not only for conglomerates, but we're also looking at the potential for gold deposits in modern, reworked gravels that have been derived from those conglomerates. It's a very large system, on the order of many hundreds of square kilometers. We see potential there for a very, very sizable deposit.
Dr. Allen Alper: That's really exciting. That's great news. That must be a very interesting time for you and your team, looking, and discovering, and exploring. A lot of fun for the whole group!
Dr. Q Hennigh: Yes. It is. We have a good team, very capable, very competent people, who can tackle this unusual style of mineralization.
Dr. Allen Alper: That sounds great. Could you give our readers/investors an update on your background, and your Team, and your Board?
Dr. Q Hennigh: I have a doctorate in geology from the Colorado School of Mines. My expertise is exploration for gold deposits in particular. I've been working in the gold industry now for most of my career. I worked for major mining companies, including Homestake Mining, Newcrest Mining and Newmont Mining. Those major companies gave me the foundation for becoming a well-rounded explorationist. I decided to go work in the junior sector about 10 years ago, when I left Newmont and started to pursue this conglomerate story in Australia.
Dr. Q Hennigh: As far as other members of NOVO's Management and Board, we have Rob Humphryson in Perth. He's a Perth-based mining engineer. He is our CEO. Rob is well-connected, throughout the mining industry in Australia, which gives us a big advantage, being a Canadian company operating in that jurisdiction. Through all of his connections, he's managed to build a very good team to help the Company move forward. He has a very dynamic personality that allows him to manage a very wide spectrum of skillsets in the Company. We have basically everything from engineering, to exploration geology, to environmental permitting, to aboriginal affairs, all within one company. So we are pursuing this project aggressively, and Rob's at the helm.
Dr. Q Hennigh: We have excellent people involved. Eric Sprott is a director of NOVO. Eric is a well-known mining financier. He's perhaps one of the most famous, if not the most famous, mining financiers in the Canadian market. Eric has been a supporter of NOVO for many years. He recently joined the board about a year and a half ago, shortly after we made the discovery at Karratha. He's also a very large shareholder. He holds around 11% of NOVO's outstanding shares. We have Akiko Levinson. Akiko and I have worked together on numerous occasions, mainly with Gold Canyon Resources, years ago, but now with Irving Resources. I'm a director of Irving Resources, as she is a director of NOVO Resources. Akiko is running a Company that's focused on exploring in Japan. I advise her on a technical level with that work.
Dr. Q Hennigh: We have Greg Gibson. Greg is the CEO of Sprott Mining, which is a private company that's owned by Eric Sprott. It basically has assets around the planet, including stocks in many companies, but also operating assets in Canada and Nevada. We have Michael Barrett. Michael joined us about a year and a half ago. He was formerly CFO of one of Rio Tinto's subsidiaries in the United States. He resides in Perth. He is a finance expert. He has a very good background in M&A and things like that. So we have a good team, well-rounded, ranging from geology and myself, to engineering in the case of Rob, to finance in the case of Eric and Michael, and then operating companies in terms of Greg Gibson and Akiko. So we have a very well-rounded team.
Dr. Allen Alper: Well, you, and your Team, and your Board have amazing backgrounds and amazing abilities. So that's an extremely strong Team and Board that you have to support you, and support NOVO Resources. That's really excellent. Could you tell our readers/investors a little bit about your capital structure?
Dr. Q Hennigh: Yes. NOVO has 164 million shares out. We also have warrants and options that brings us to approximately 204 million shares out. We have a tranche of warrants that are expiring in about two months. Those are held by Eric Sprott, as well as another large investor. We believe that those will be exercised without any issues. We have roughly $43 million in the bank right now. We anticipate the warrants and the exercise of the warrants will bring in roughly another $13 million. The company is fairly tightly-held. Kirkland Lake Gold holds 18.4% of the current outstanding shares. Newmont Mining holds roughly 4% of the outstanding shares. Eric Sprott, roughly 11%. Mark Creasy, a well-known prospector in Australia has roughly 6% or 7%. And then a number of funds hold around 20%. So I would say somewhere around 2/3 of the shares are in very tight hands.
Dr. Allen Alper: Excellent! Really great supporters and great investors! It's excellent to be in that kind of a position to have such a great project, and such great potential. And then also to have such great support. So I think NOVO Resources has everything going for it, the technical ability, the financial ability, and the right project, and in the right place. So that's really amazing. Quinton, could you tell our readers/investors the primary reasons they should consider investing in your company?
Dr. Q Hennigh: Yes. I think the investors that we have right now, as well as those that should be looking at us, understand that we have extremely good potential in terms of finding a very, very large gold deposit, something that can ultimately become a very large mine. It started out on a conceptual basis, this exploration work that we did in the Pilbara. But over the past nine years, we've turned up very tangible proof. And now we're advancing all of those projects, we have sufficient cash to do so. We also have good alliances with financial partners, including Sumitomo Corporation, that we can make sure that we get these things to the finish line. So big systems, but also big support from the right people.
Novo Resources Corp.
Dr. Allen Alper: That sounds excellent. That's really a great position to be in. I think 2019 will be an exciting time for our readers/investors, and for NOVO Resources. Is there anything else you'd like to add, Quinton?
Dr. Q Hennigh: Yes. People should keep an eye on work we have coming up. Field season is beginning shortly. As summer in Australia, ends and the heat dies down, we're able to get out and do some work. Egina will be a main focus for us this year. We anticipate being fairly aggressive in terms of taking samples and coming to grips with the overall size of that system. We're very hopeful with those results. In the short term, we also have this resource upgrade at Beatons Creek, which I mentioned earlier. I think people will sit up and take note when they see that. That'll be the first confirmation of how big these particular deposits can get.
Dr. Allen Alper: That sounds excellent. And it sounds like 2019 will be a time to watch NOVO Resources as the drilling results and the exploration results come in.
Dr. Q Hennigh: Yes. We're looking forward to this season.
Dr. Allen Alper: Excellent! Thank you, Quinton. I enjoyed talking with you once again. I’m very impressed with what you and your team are doing.
Dr. Q Hennigh: Thank you, Al.
Dr. Allen Alper: We’ll publish your press releases as they come out so our readers/investors can follow your progress.
http://www.novoresources.com/
Leo Karabelas
(416) 543-3120
leo@novoresources.com
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