Novo Resources is to secure 100 per cent of Farno-McMahon (Farno) and enter a farm-in to earn the right to up to 70 per cent of the Kangan gold project in separate deals with Farno and Pioneer Resources.
Novo entered a share purchase agreement to acquire Farno’s shares. The company holds four key tenements in the Egina region of Western Australia, one of which, E47/2502, is subject to option due to a pre-existing joint venture (JV) arrangement between Farno and De Grey Mining (a separate statement from De Grey said they expected to have a good working relationship with Novo).
Novo paid Farno $150,000 cash as part of the initial agreement and subject to certain conditions, will pay a further 2.35 million and issue $5.5 million in Novo common shares at a price of $CAD4.10 per share.
In the second deal, Novo has entered into a memorandum of agreement (MOA) with Pioneer Resources for farm-in rights to a 70 per cent interest in the Kangan gold project, also in WA.
Novo will subscribe to $1 million of Pioneer’s ordinary shares at a price of 2 cents per share in a private placement and will also pay $200,000 in cash and issue 100,000 common company shares as part of the MOA.
Kangan is comprised of four exploration tenements that Novo considers highly prospective. Commenting, Novo president and chairman Quinton Hennigh said that Egina was an important Pilbara gold district and that the acquisition of these core tenements consolidated Novo’s position in the region.
“Gold nuggets have been found in modern surface gravels over a vast area around Egina since the late 1800s,” he said.
“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.”