Novo Resources Corp. (TSX-V: NVO; OTCQX: NSRPF): Exploring and Developing Conglomerate Gold in the Pilbara Region of Western Australia. Interview with Dr. Quinton Hennigh, Chairman and President
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 9/6/2018
Novo Resources Corp. (TSX-V: NVO; OTCQX: NSRPF) is focused on exploration and development of gold projects in the Pilbara region of Western Australia. We learned from Dr. Quinton Hennigh, Chairman and President of Novo Resources, that it was established in 2010, specifically to explore for conglomerate-hosted gold deposits in Australia and since then has built up a significant land package, covering approximately 12,000 sq. km, with varying ownership interests. According to Dr. Hennigh, rocks of the Pilbara Craton are very similar or related to those of the Kaapvaal Craton in South Africa, host to one of the largest single gold fields on Earth. Today Novo is focused mainly on its very large Karratha gold project in western Pilbara, where it is aggressively bulk sampling and diamond drilling a new conglomerate discovery at Comet Well and Purdy’s Reward. Novo's other gold project, called Beaton’s Creek, has a resource of around 600,000 ounces. In the long term, Novo Resources plans to take its projects to production and has a very good cash balance to support this goal.
Liberated “watermelon seed” type gold nugget from the Comet Well area.
Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, interviewing Dr. Quinton Hennigh Chairman and President of Novo Resources Corp. This has been a great year for you, Quinton. Could you give our readers/investors an overview of what Novo Resources Corp has accomplished and where the Company is going?
Dr. Quinton Hennigh: Novo Resources is a Canadian listed junior company. It was established in 2010, specifically to explore for conglomerate-hosted gold deposits in Australia. The place on which we're focused is called the Pilbara region, which is in the northwest quadrant of Australia. It is a place where very, very old rocks are preserved, the Pilbara Craton, a piece of crust dating back to around three billion years and older. The rocks of the Pilbara Craton are very similar in age, composition and geologic history to those of the Kaapvaal Craton in South Africa.
Based on that and some other interesting similarities, Novo decided to explore the Pilbara region for gold-bearing conglomerates similar or related to those found in South Africa’s Witwatersrand Basin. Gold deposits of the Witwatersrand Basin comprise the single largest gold field on Earth.
Novo entered the area and acquired several key pieces of ground in the East Pilbara in 2011. These included places where there are known gold-bearing conglomerates that have been mined historically. We cut our teeth on those and in the process, learned a lot about exploring these types of systems and how to evaluate them. We found that the deposits of the Pilbara have some similarities to those in South Africa, but they also have some key differences.
For example, the gold in the conglomerates in the Pilbara tends to be coarse grained, occurring as very large gold particles, whereas the gold in South African conglomerates tends to be finer grained and more easily sampled. To give you a perspective, because of the nuggety nature of the mineralization, we have to take samples weighing over five tonnes to get representation of nuggets within the material.
Novo has spent about six years focused entirely in the east Pilbara. We worked in an area called Beaton’s Creek which is near the town of Nullagine, a historic mining center. The conglomerate deposits that we explored were first discovered in 1886. They were mined sporadically over several decades. It was our exploration, however, that really put the picture together.
Between 2011 and 2016, we explored these, using modern techniques, collecting large surface and RC drill samples. We also applied a new geologic model, one in which sediments are laid down in a near-shore setting rather than a river setting.
Not only were we able to explain the deposition of gold, but more importantly, to model the deposits themselves, coming up with a resource of around 600,000 ounces based on our initial work. It was clear that the deposits at Beaton’s Creek could be much larger, but that's the point we reached when, in early 2017, a very pivotal event happened.
We got rumor that people were finding gold nuggets in an area in the West Pilbara, roughly 300 kilometers from Beaton’s Creek. Recognizing that the gold was coming from conglomerates, we aggressively staked ground in the Karratha area and did some other land deals to put together a very large land holding, approximately 10,000 square kilometers. Then, we started to do some work.
By mid-2017, we undertook our first bulk sampling which yielded very good results. Today, the Karratha gold takes most of our attention, because of its large size and large geological potential. We can trace gold-bearing conglomerates for around eight kilometers along strike from Comet Well to Purdy’s Reward.
Samples that we are taking are quite large. Because of the nuggety gold they have to be to get any degree of representativity. They're five plus tonnes, absolutely enormous. We are collecting samples at site then herding them down to Perth and processing them at a commercial lab belonging to SGS Minerals.
The Karratha project is very exciting from the perspective of potential. We see at least two distinct gold-bearing horizons, one at the base of the conglomerate section and one about 15 meters above. Both units appear continuous over a long strike and we see continuity of geology in our diamond drilling. These conglomerates dip gently into the basin to the southwest leaving one to wonder about their ultimate size potential.
The exciting news around this discovery has led to new conglomerate occurrences popping up in the region. Other companies have found gold-bearing conglomerates of similar nature to the ones we have at Comet Well. These cover a vast area, several hundred kilometers of strike along the edge of the basin, so we're very excited about this. It appears to be a very large gold system.
Recently, we have begun taking some of the information we've learned from Karratha, particularly relating to appropriate sample size, and we're going back to Beaton’s Creek to take bulk samples there. It's been a long learning exercise for Novo, these very interesting and unique deposits, but we see very, very good potential for large gold systems in the Pilbara. As a Company, we are on the cutting edge of exploring them.
Dr. Allen Alper: All that sounds fantastic. Amazing accomplishments and amazing opportunity! That's really fantastic work that has been done and you are in such a great position to explore and discover more. So that's really fantastic.
I know you have a fantastic background and history of success, Quinton. Could you update our readers/investors on your background and your team’s and Board’s?
Dr. Quinton Hennigh: I'm an economic geologist. I've been exploring for mineral deposits for about 25 years for various companies. I started with major mining companies, including Homestake, Newcrest, and Newmont Mining. Then I moved into the junior sector about 10 years ago. I've been exploring in various parts of the world, North America, Canada, and the U.S. in particular, as well as Australia, with Novo. My main passion is exploring for gold.
I don't have a favorite type of gold deposit. I like to explore for all different types of gold deposits, but the Pilbara is a potentially very big prize. I felt exploring for gold-bearing conglomerates in the Pilbara, to try and find replications of the deposits that we see in South Africa, is something that I should do in my career.
As for the Board and management, Novo brought on a first class Australian CEO about a year ago named Rob Humphryson. Rob is an engineer. We brought him on specifically because Novo anticipates taking its projects to production. Rob has a stellar reputation in Australia, working with many different companies, mainly in mining services. He's well connected with government, other mining companies and contractors. Given his connections, he was able to put together a team to advance the Karratha gold project very quickly.
We have one of the premier explorers in Australia, Kas De Luca. Kas joined us out of Newcrest about seven or eight months ago. Kas has vast experience exploring for many different deposit types in numerous places around the globe. It's around people like Rob and Kas that we've built a first class team. We're in a good position to move the company forward.
Our Board of Directors is comprised of myself and Rob as well as Eric Sprott. Eric is a very well-known mining financier, most people know the name and his contributions right away.
Dr. Allen Alper: Well respected!
Dr. Quinton Hennigh: Also Greg Gibson, who's currently the CEO of Sprott Mining. He runs the private mining company called Sprott Mining, of which Eric Sprott is the largest shareholder. Greg has a lot of mining expertise and has run junior companies.
We also have Michael Barrett, an accountant with broad mining finance experience. He's out of Perth. This is his first endeavor as a board member, but his background is extensive. He worked for Rio Tinto and other large companies.
We have Akiko Levinson with whom I have worked together for nearly 10 years. Akiko ran a company called Gold Canyon Resources where we drilled up the five million ounce Springpole deposit in Ontario. Akiko is a very, very sharp business woman. She currently runs Irving Resources, a Japanese-focused exploration company.
Dr. Allen Alper: That's an amazing Board, really fantastic, great experience and great knowledge and great backgrounds and successful careers. You really have strong backing and you put together an amazingly strong team there. That's excellent.
Dr. Quinton Hennigh: Yep, we're a good company with exceptional talent.
Dr. Allen Alper: All right, that's fantastic.
Could you tell me a little bit about your share structure?
Dr. Quinton Hennigh: We have about 161 million shares out right now. A largest shareholder is Kirkland Lake Gold. Kirkland Lake is a premier mid-tier gold producer. They own the Fosterville mine in Australia as well as the Macassa mine in Canada, both very, very high grade deposits. We're very glad to have them as our largest shareholder with approximately 18.5% of shares on issue. Eric Sprott holds around 10% currently. Newmont maintains their share position of around 4% and Mark Creasy, a well-known Australian prospector, holds around 7%. We have a number of funds, which hold anywhere from two million shares up to eight million shares.
Dr. Allen Alper: That's great. You have some excellent shareholders and supporters. That's a great position to be in.
What are the primary reasons our high-net-worth readers/investors should consider investing in NOVO Resources?
Dr. Quinton Hennigh: The prize here is truly world class. There are gold districts and then there are gold districts. What we're exploring for in Australia are deposits of conglomerates that might underlie significant areas of the Pilbara region. It's going to take time, money, patience to explore these, but their upside is large. We think that these deposits can potentially change the mining industry over time.
Novo has a very competent, capable team with the right skills to advance our projects to production. Our large cash balance of over C$60M allows us to follow an aggressive trajectory toward trial mining at Karratha without having to go back to the market. We're very serious, diligent explorers and do good science. That pretty much sums up Novo.
Dr. Allen Alper: That sounds great. You have a great team, you have great properties, great prospects, great backing. It sounds like it's a fantastic opportunity for our high-net-worth readers/investors to consider.
Is there anything else you'd like to add, Quinton?
Dr. Quinton Hennigh: People should keep an eye on near-term developments. Not only are we exploring at Comet Well and Purdy’s Reward, we have begun searching new areas in the Pilbara. Over the next few months we'll be able to talk about some new and exciting things we're seeing in the field.
Thank you for the opportunity to share our good news with your readers/investors.
http://www.novoresources.com/
595 Burrard St.,
Suite 2900
Vancouver, BC V7X 1J5
Canada
Leo Karabelas, VP of Corporate Communications
Telephone: (416) 543-3120
E-mail: leo@novoresources.com
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