De Grey to Invest A$25 Million to Earn 50% IN Egina JV and Complete A$10 Million Cornerstone Investment
Suite 1100, 1199 West Hastings Street
Vancouver, BC, Canada V6E 3T5
P: +1-416-543-3120 E: [email protected] www.novoresources.com
21 June 2023
DE GREY TO INVEST A$25 MILLION TO EARN 50% IN EGINA JV
AND COMPLETE A$10 MILLION CORNERSTONE INVESTMENT
HIGHLIGHTS
• Major Western Australian gold developer De Grey Mining Ltd (ASX: DEG) (“De Grey”) to spend up to
A$25 million on exploration of Novo’s Becher G old Project (“Becher”) and adjacent tenements ,
encompassing approximately 1,000 sq. km, through an earn-in and joint venture (“Egina JV”) under a
binding Heads of Agreement (the “Agreement”).
o De Grey will earn a 50% direct stake in the relevant tenements by spending A$25 million on
exploration within four years, with a minimum commitment of A$7 million within 18 months, at
which time the 50/50 Egina JV will be established.
o De Grey will manage all exploration under the earn-in and become the manager of the Egina JV
once established.
o Novo’s flagship Becher tenements are adjacent to De Grey’s 11.7 Moz Au (JORC 2012)1 Mallina
Gold Project on which De Grey expects to release a Definitive Feasibility Study in Q3 2023.
o Novo’s exploration program to date has confirmed that Becher has the geological indicators of
potential discovery success.
• De Grey has separately agreed to take a cornerstone investment of A$10 million in Novo common
shares for a n approximate 11.6% post-financing undiluted interest in Novo and will become the
Company’s largest single shareholder.
o The cornerstone investment underpins Novo’s exciting exploration portfolio and growth strategy.
o The cornerstone private placement to De Grey will be completed at Novo's current spot price of
C$0.255 per common share.
o De Grey has also been granted a financing participation right and board nomination right and will
be subject to extended contractual hold period and orderly sale restrictions subsequent to expiry
of such hold period.
• Novo has commenced a process to seek a dual listing on the Australian Securities Exchange (“ASX”)
through an initial public offering (“IPO”), with further updates to follow.
o Argonaut has been appointed lead manager to the IPO.
o A listing on the ASX would complement Novo’s current TSX and OTCQX listings and is a logical
next step given the location of Novo’s assets.
• Novo will commence a strategic review of the Nullagine Gold Project to assess value maximising
options for shareholders.
• The exploration success at Becher is testament to the credentials of Novo’s experienced management
and exploration team that will continue to focus on opportunities for major gold discoveries.
• Novo will continue to focus on exploration with drilling progra ms planned for Nunyerry North and
Balla Balla in the Pilbara, and Belltopper in Victoria in the second half of 2023.
• This transaction with De Grey will result in Novo having a n unaudited consolidated cash position of
approximately C$29.8 million / A$33.0 million.
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Commenting on De Grey becoming a joint venture partner and cornerstone investor , Novo Executive Co -
Chairman and Acting CEO Mike Spreadborough said, “Attracting a joint venture partner and cornerstone
investor like De Grey is a strong endorsement of Novo, our team, exploration efforts to date, the Becher Project
and our project generation abilities. I would like to welcome De Grey as a major shareholder of Novo and look
forward to working with them as we focus on pursuing the next major gold project in the Pilbara”.
“De Grey is the right strategic partner for Becher with their understanding of the area, geology and what is
required to make a major discovery within the region, highlighted by their 11.7 Moz Mallina Gold Project 1,
which sits only ~28km ENE of Becher”.
“De Grey has committed to a minimum exploration spend of A$7 million within 18 months, and potentially up
to A$25 million, over the next four years to advance the strong platform already established by Novo. The Novo
exploration team has achieved a great deal of success at Becher to date, with reconnaissance exploration
zeroing in on key initial targets with results from these programs hitting all the right indicators”.
“The future for Novo is promising; we have a tier-one strategic partner, supportive major shareholders, a highly
prospective exploration portfolio, an A-grade exploration team and f unding to continue progressing on our
path of exploring and defining potential standalone gold projects that can deliver value to our shareholders.”
Figure 1 - Egina JV tenure2.
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VANCOUVER, BC - Novo Resources Corp. (“Novo” or the “Company”) (TSX: NVO , NVO.WT & NVO.WT.A)
(OTCQX: NSRPF) is pleased to announce that major ASX-listed Western Australian gold developer De Grey
(ASX: DEG) has been granted the right to earn a 50% interest in the Egina JV by spending up to A$25 million
on exploration within four years. This strategic agreement between De Grey and Novo follow s a successful
period of exploration completed at Becher by Novo since September 2022.
The Egina JV will encompass, Novo’s Becher Gold Project (“ Becher”) and adjacent tenements that cover
approximately 1,000 sq. km of existing Novo tenements.
Becher is located in the northern sect or of the Egina Gold Camp , ~28 km along trend from De Grey’s Hemi
deposit within the 11.7 Moz Au (JORC 2012) 1 Mallina Gold Project . The Egina JV tenements are considered
highly prospective for large scale, intrusion-related gold deposits similar to the Hemi deposit, as well as shear-
hosted orogenic deposits similar to De Grey’s Withnell and Mallina deposits.
De Grey will separately make a cornerstone private placement investment of A$10 million into Novo at a price
of C$0.255 per common share (the “Financing”). De Grey will become Novo’s largest single shareholder with
an approximate 11.6% post-Financing undiluted interest in Novo.
Over the last 9 months, Novo has prioritised work at Becher and completed a large amount of exploration
drilling with 2,130 aircore drill holes completed for over 50,000 m. The results from this program have been
very promising , with drilling highlighting mineralisation under shallow cover in both intrusions and
sedimentary rocks and, importantly, displaying geological indicators of potential discovery success.
Novo will now partner with De Grey to continue exploration efforts at Becher and is hopeful of discovering
the next major Pilbara gold project.
Novo is a dedicated gold explorer which owns an exciting exploration portfolio located in the premium
Australian gold jurisdictions o f the Pilbara and Victoria. In the Pilbara , outside of the Becher Project, other
current key exploration targets include Nunyerry North located in the southern sector of the Egina Gold Camp,
and Balla Balla located north of Karratha . Novo is also exploring in Victoria at its Belltopper Project located
south of the Fosterville mine in the Bendigo Tectonic Zone, where over 60 Moz Au were produced historically.
Led by a talented and experienced management and exploration team, Novo has the right team and
credentials to make discoveries and build sizeable resources.
About De Grey
De Grey is a Western Australian gold explorer and project development company, with its activities focussed
on the 100% owned Mallina Gold Project in the Pilbara region of WA. At Mallina, De Grey made a large scale,
high value, near surface gold discovery at an area called Hemi.
The Hemi gold discovery is intrusion hosted and is rapidly moving towards De Grey’s development goal of
defining a Tier 1 project with true district-scale potential. Mineralisation in the Hemi area has been identified
over a large area and a 9.5-million-ounce Mineral Resource1 was updated in June 2023. The discovery remains
open in multiple directions and at depth. Overall, the total Mallina Gold Project Mineral Resource is now 11.7
million ounces 1 and includes the Hemi deposits 30km to the north east and Withnell deposits located only
10km north of the Becher prospect area.
De Grey expects to complete a Definitive Feasibility Study on the Mallina Gold Project in the September
quarter 2023, and continues to focus exploration on new discoveries throughout the Mallina Gold Project. The
Egina JV provides De Grey with an expanded footprint and extensions to the highly prospective stratigraphy
and structures.
For De Grey, the addition of the Egina Project tenements to the broader Mallina Gold Project is an important
step in its strategy to discover and grow a large resource base centred around the future Hemi processing
plant. The new tenements represent a substantial opportunity for De Grey to discover new large scale,
intrusion-related gold deposits similar to Hemi, as well as shear-hosted orogenic gold deposits.
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Earn-In and Joint Venture
A nu mber of Novo’s wholly -owned Australian subsidiaries have executed the Agreement with De Grey,
pursuant to which De Grey has been granted the right to earn a 50% interest in the Egina JV (Figure 1) by
incurring up to A$25 million in exploration expenditure within 48 months (the “Earn-In”).
Once De Grey completes the Earn-In, the resultant Egina JV will be fully documented by way of a formal joint
venture agreement between the parties. Novo and De Grey will, under the Egina JV, be required to co -fund
exploration expenditure according to their pro-rata interests in the Egina JV. De Grey has the right to terminate
the Earn-In after incurring a minimum of A$7 million in exploration expenditure within 18 months (in which
case it would forfeit any interest in the relevant tenements).
Certain tenements comprising the Egina Project are currently subject to pre-existing joint ventures into which
Novo has already earned an interest. The Agreement includes a mechanism by which such joint ventures may
be incorporated into the Egina JV, subject to agreement with relevant joint venture partners.
The Earn -In and Egina JV are otherwise subject to industry -standard earn-in and joint venture conditions ,
including information sharing, quarterly technical meetings, mutual pre-emptive rights and extension of the
Earn-In period due to reasonable delays in accessing priority areas of the Egina Project. De Grey will manage
exploration activities under the Earn -In, and De Grey will also manage the resultant joint venture provided
that its interest remains at or above 50%. The Egina JV is also subject to an industry-standard dilution clause,
with dilution below 10% resulting in the conversion of a party’s interest to a 1% net smelter returns royalty.
Cornerstone Investment
Novo expects to close the Financing raising gross proceeds of A$10 million (approximately C$8.97 million)
through the issue of 35,223,670 common shares (“Shares”) to De Grey at Novo’s current spot price of C$0.255
per Share promptly following receipt of Toronto Stock Exchange (“TSX”) acceptance of notice of the Financing.
Immediately subsequent to closing of the Financing, De Grey will hold a n approximate 11.6% undiluted
interest in Novo and will become the Company’s largest single shareholder.
All Shares issued in the Financing will be subject to a statutory hold period expiring four months and one day
following the closing of the Financing, along with an additional voluntary contractual hold period (the
“Contractual Hold Period”) expiring one year following the closing of the Financing. However, if the Company
has not received a formal listing decision letter from ASX (see below) within six months following the closing
of the Financing, the Contractual Hold Period will expire six months following the closing of the Financing. The
Shares will be subject to orderly sale restrictions subsequent to the expiry of the Contractual Hold Period.
Commencing six months following closing of the Financing and subject to De Grey maintaining at least a 12.5%
undiluted interest in Novo at all times (the “ Nomination Threshold ”), De Grey has a one -time right to
nominate a director to Novo’s board. However, if Novo has not received a formal listing decision letter from
ASX listing within six months following closi ng of the Fina ncing, the Nomination Thres hold will decrease to
10%. De Grey also has the right to participate in any raising conducted in conjunction with an ASX listing to
ensure it holds up to a maximum undiluted post-financing interest of 12.5% of Novo.
The net proceeds from the Financing will primarily be used by Novo to fast-track exploration at the Company’s
key projects, including Nunyerry North , Balla Balla and Belltopper, as well as for general working capital
purposes.
The Financing is subject to receipt of approval from the TSX.
Argonaut PCF Limited of Perth, Western Australia was financial adviser to Novo on this transaction and will
receive a cash finder’s fee of A$0.5 million (approximately C$0.45 million) in connection with the Financing.
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Intention to seek Dual-Listing on ASX
Novo is also pleased to announce that it has commenced a process to seek a dual listing on the ASX.
The Board believes that an ASX listing would be a logical next step for Novo given the location of its assets and
management team. Further, Novo believes that listing on the ASX would deliver a number of potential benefits
for Novo and its shareholders, including:
• Ability to enhance the profile of Novo across a broader mix of stakeholder groups
• Increasing liquidity and accessing potential new sources of equity
• Engaging and attracting additional institutional investment and equity research coverage
The ASX would provide a natural fit for Novo to list and grow due to historical investor appetite for exploration
companies with projects located in Australia. Novo has been listed on the TSXV/TSX since 2015, has developed
a supportive, long -term investor register and remains committed to this investor group and intends to
maintain its TSX and OTCQX listings.
The Company will provide further updates as this process progresses. There is no guarantee that the Company
will list on the ASX or will be granted approval to do so.
Nullagine Gold Project Strategic Review
The Nullagine Gold Project (“NGP”) consists of the Mosquito Creek Basin (“MCB”), the Beatons Creek Project
and the Golden Eagle Processing Facility. The NGP remains in care and maintenance following suspension of
operations in September 2022.
Novo will commence a strategic review of the Nullagine Gold Project to assess value maximising options for
shareholders which may include development, joint ventures or divestment.
The Golden Eagle Plant is a tier-one facility which hosts a 1.5 Mtpa nameplate capacity (historically operated
at 1.8 Mtpa) conventional gold gravity/CIL processing facility 4 MW SAG mill . The plant is supported by
surrounding infrastructure, which includes a 10 MW diesel power station, 230-person accommodation village,
offices, workshops and warehouse.
The Beatons Creek project hosts an Indicated Mineral Resource of 3.05 million tonnes at 2.4 g/t Au for 234,000
oz Au and an Inferred Mineral Resource of 0.83 million tonnes at 1.6 g/t Au for 42,000 oz Au3. Reference should
be made to the technical report entitled “NI 43-101: Mineral Resource Update, Beatons Creek Gold Project,
Nullagine, Western Australia” with an effective date of June 30, 2022 and an issue date of December 16, 2022
(the “Technical Report”), prepared for Novo by Dr. Simon Dominy (FAusIMM(CP) FAIG(RPGeo) FGS(CGeol)),
Ms. Janice Graham (MAIG), Mr. Jeremy Ison (FAusIMM), and Mr. Royce McAuslane (FAusIMM) (collecti vely,
the “ QP’s”). The QP’s are qualified persons as defined under National Instrument 43 -101 Standards of
Disclosure for Mineral Projects (“NI 43-101”). The Technical Report is available under the Company’s profile
on the System for Electronic Document An alysis and Retrieval (“ SEDAR”) website at www.sedar.com (filing
date: December 16, 2022) and on the Company’s website at www.novoresources.com.
Deferral of 2023 Annual General Meeting
As a result of the potential ASX listing, the Company has sought and obtained approval from the TSX to defer
its annual general meeting (“AGM”) to no later than September 29, 2023. The Company will provide an update
on the timing of its AGM in due course.
QP STATEMENTS
Mr. Iain Groves (MAIG), is the qualified person, as defined under NI 43 -101, responsible for, and having
reviewed and approved, the geological and exploration information contained in this news release pertaining
to the Egina Gold Project other than information concerning De Grey’s Mallina Gold Project. Mr. Groves is
Novo’s Exploration Manger – West Pilbara.
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Mr. Alwin Van Roij (MAIG), is the qualified person, as defined under NI 43 -101, responsible for, and having
reviewed and approved, the technical information contained in this news release pertaining to the Nullagine
Gold Project other than information conc erning the Technical Report . Mr. Van Roij is Novo’s Exploration
Manger – East Pilbara.
ABOUT NOVO
Novo explores and develops its prospective land package covering approximately 10,500 square kilometres in
the Pilbara region of Western Australia, along with the 22 square kilometre Belltopper Project in the Bendigo
Tectonic Zone of Victoria, Australia. In addition to the Company’s primary focus, Novo seeks to leverage its
internal geological expertise to deliver value-accretive opportunities to its stakeholders. For more information,
please contact Michael Spreadborough at +61-419-329-687 or [email protected], or
Leo Karabelas at +1-416-543-3120 or [email protected].
On Behalf of the Board of Directors,
Novo Resources Corp.
“Michael Spreadborough”
Michael Spreadborough
Executive Co-Chairman and Acting CEO
Forward-looking information
Some statements in this news release contain forward -looking information (within the meaning of Canadian
securities legislation) including, without limitation, the use of the net proceeds from the Financing, the
intention to undertake an IPO on the ASX, and planned exploration activities. These statements address future
events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which
may cause the actual results, performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by the statements. Such factors include, without
limitation, receipt of TSX acceptance of notice of the Financing, receipt of ASX approval to the listing of Novo,
investor interest in the IPO, customary risks of the resource industry and the risk factors identified in Novo’s
annual information form for the year ended December 31, 2022, which is available under Novo’s profile on
SEDAR at www.sedar.com. Forward-looking statements speak only as of the date those statements are made.
Except as required by applicable law, Novo assumes no obligation to update or to publicly announce the results
of any change to any forward -looking statement contained or incorporated by reference herein to reflect
actual results, future events or developments, changes in assumptions or changes in other factors affecting
the forward-looking statements. If Novo updates any forward -looking statement(s), no inference should be
drawn that the Company will make additional updates with respect to those or other forward -looking
statements.
Notes
1 De Grey has reported that its Hemi deposit at the Mallina Gold Project is comprised of Measured Mineral
Resources of 4.7 Mt @ 1.7 g/t Au for 265 koz Au, Indicated Mineral Resources of 184.1 Mt @ 1.3 g/t Au for
7,798 koz Au, and Inferred Mineral Resources of 89.2 Mt @ 1.3 g/t Au for 3,684 koz Au, as those categories are
defined in the JORC Code (as defined in NI 43-101). Refer to De Grey’s public disclosure record for further details.
No assurance can be given that a similar or any mineral resource estimate will be determined at Novo’s
Becher Project.
2 De Grey has reported that, at the Mallina Gold Project, its (i) Mount Berghaus deposit is comprised of
Indicated Mineral Resources of 1 Mt @ 1.7 g/t Au for 53 koz Au and Inferred Mineral Resources of 3.4 Mt @
1.2 g/t Au for 128 koz Au, (ii) Wingina Well d eposit is comprised of Measured Mineral Resources of 3.1 Mt @
1.7 g/t Au for 173 koz Au, Indicated Mineral Resources of 1 Mt @ 1.4 g/t Au for 43 koz Au, and Inferred Mineral
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Resources of 1.4 Mt @ 1.6 g/t Au for 72 koz Au, (iii) Toweranna open pit deposit i s comprised of Indicated
Mineral Resources of 8.3 Mt @ 1.6 g/t Au for 418 koz Au and Inferred Mineral Resources of 2.5 Mt @ 1.5 g/t
Au for 120 koz Au, (iv) Toweranna underground deposit is comprised of Indicated Mineral Resources of 0.1 Mt
@ 3.0 g/t Au for 11 koz Au and Inferred Mineral Resources of 0.5 Mt @ 2.9 g/t Au for 49 koz Au, (v) Mallina
deposit is comprised of Indicated Mineral Resources of 1.6 Mt @ 1.2 g/t Au for 64 koz Au and Inferred Mineral
Resources of 5.1 Mt @ 1.5 g/t Au for 243 koz Au, (vi) Withnell open pit deposit is comprised of Measured
Mineral Resources of 1.3 Mt @ 1.5 g/t Au for 62 koz Au, Indicated Mineral Resources of 3 Mt @ 1.8 g/t Au for
178 koz Au, and Inferred Mineral Resources of 0.7 Mt @ 2.0 g/t Au for 43 koz Au, (vii) Withnell underground
deposit is comprised of Indicated Mineral Resources of 0.1 Mt @ 4.3 g/t Au for 16 koz Au and Inferred Mineral
Resources of 2.4 Mt @ 3.9 g/t Au for 301 koz Au, and (viii) Hemi deposit is comprised of Indicated Mineral
Resources of 165.7 Mt @ 1.3 g/t Au for 6,876 koz Au and Inferred Mineral Resources of 70.2 Mt @ 1.2 g/t Au
for 2,632 koz Au, as those categories are defined in the JORC Code (as defined in NI 43-101). Refer to De Grey’s
public disclosure record for further details. No assurance can be given that a similar or any mineral resource
estimate will be determined at Novo’s Becher Project.
3 Refer to the Company’s news release dated November 2, 2022.