De Grey takes 11.6% stake in Novo Resources, shares up
Novo Resources Corp. [NVO-TSX, NVO.WT, WT.A, NSRPF-OTCQX] shares advanced Thursday after Australian company De Grey Mining Ltd. [DEG-ASX] said it has acquired 35.2 million Novo shares via a non brokered $8.97 million private placement transaction priced at 25.5 cents a share.
Prior to closing of the transaction, De Grey held 50,116 Novo shares, but has now increased its stake to 11.6%.
Novo shares rose 4.5% or $0.01 to 23 cents on volume of 194,710. The shares are currently trading in a 52-week range of 60 cents and 22 cents.
Novo is exploring a developing a land package covering 10,500 square kilometres in the Pilbara region of Western Australia, along with the Belltopper Project in the Bendigo Tectonic Zone of Victoria, Australia.
Novo said net proceeds of the financing will primarily be used to fast-track exploration at the company’s key projects, including Nunyerry North, Balla Balla, and Belltopper.
News of the financing comes after De Grey agreed to spend up to $25 million (Australian) on exploration at Novo’s Becher gold project and adjacent tenements covering approximately 1,000 square kilometres through an earn-in and joint venture [Egina JV].
Under the agreement De Grey will earn a 50% direct stake in the relevant tenements by spend the $25 million over four years, with a minimum commitment of $7 million within 18 months, at which time the 50/50 Egina JV will be established.
De Grey will manage all exploration under the earn-in and become manager of the Egina JV.
Novo’s flagship Becher tenements are adjacent to De Grey’s Mallina gold project where a definitive feasibility study is scheduled to be released in the third quarter of 2023. Mallina is estimated to host 11.7 million ounces of gold. Becher is located in the northern sector of the Egina Gold Camp. Novo has completed over 50,000 metres of drilling at Becher, generating significant gold and multi-element assay results.
Novo was in the news last year when it agreed to sell its 15 million New Found Gold Corp. [NFG-TSXV] shares to a corporation controlled by Bay Street financier Eric Sprott for $125.9 million.
That left Sprott with control 51.6 million shares, representing approximately 31.4% of the outstanding shares, marking an increase of 9.1%.
New Found Gold is working to advance Canada’s newest high grade gold discovery on its 100%-owned Queensway project in central Newfoundland.
Novo said completion of the transaction would render it free of debt and with a pro-forma cash balance of almost $97 million, giving the company the flexibility to aggressively advance exploration efforts across Australia’s Pilbara and Victoria regions, while expediting a feasibility study on the Fresh component of its Beatons Creek project in Nullagine, Western Australia.