Novo Updates Activity at Its Beatons Creek and Blue Spec GOLD Projects, Western Australia
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Novo Resources Corp.
Suite 1980 – 1075 West Georgia Street
Vancouver, BC V6E 3C9
NOVO UPDATES ACTIVITY AT ITS BEATONS CREEK AND
BLUE SPEC GOLD PROJECTS, WESTERN AUSTRALIA
VANCOUVER, BC, March 7 , 2017 - Novo Resources Corp. (“Novo” or the
“Company”) ( TSX-V: NVO; OTCQX: NSRPF) is pleased to provide an update on
activities at its 100% controlled Beatons Creek and Blue Spec gold project s, Western
Australia.
Beatons Creek
In the Company’s news release issued February 1, 2017, Novo discussed favorable
cyanidation results from six tests performed on a sample of tailings from its recently
processed bulk sample. Bulk sample material was treated through the Company’s IGR3000
gravity test plant late last year . Cyanidation was found to be exceptionally effective at
recovering gold from this sample. Recoveries exceed ed 97% within just 12 hours of
leaching, even at a coarse grind size of 212 microns (0.212 mm). Lime consumption was
low, ranging from 0.87 to 1.51 kg/tonne, and NaCN consumption was very low, ranging
from 0.15 to 0.40 kg/tonne.
Background about Beatons Creek
In late 2014, Novo set about drilling and trench sampling mineralized conglomerates at
Beatons Creek with the intention of establishing a rob ust near-surface resource. In the
Company’s news release issued September 16, 2015, Novo announced a global near -
surface resource of 299,000 oz Au at 2.7 gpt in the measured and indicated categories and
259,000 oz Au at 2 .7 gpt in the inferred category. The resource estimate for Novo’s
Beatons Creek Gold Project disclosed in its September 16, 2015 news release was
supported by a technical report entitled NI 43-101 Technical Resource Report, Beatons
Creek Gold Project, Pilbara Region, Australia prepared by Arnand van Heerden (PGeo,
SACNASP, MAusIMM) of Tetra Tech (the “Technical Report”). The Technical Report
was filed under Novo’s profile on SEDAR (www.sedar.com) on October 13, 2015 and is
also available on Novo’s website (www.novoresources.com).
Since late 2015, Novo has focused on moving Beatons Creek through economic study with
a vision of establ ishing a case for a modest sized, oxide -only mine using gravity -only
treatment. Novo’s bulk sampling exercise conducted late last year was a critical step in
evaluating many aspects of mining and processing needed to complete this study, and work
on this study is effectively complete.
Novo decided to pursue a modest sized, oxide -only, mine scenario using gravity -only
recovery at a time when market sentiment toward gold mining was sharply negative and
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capital for gold mining projects was scarce and came with unfavorable terms. With no
certainty that market conditions would improve, Novo considered that such a mine would
be the cheapest, most effective path to move Beatons Creek toward production.
Several factors have changed over the past 15 months:
- Gold prices have risen, especially in Australian dollars.
- Market sentiment toward gold mining has improved.
- Capital for gold mining is more readily available with much improved terms.
- Novo’s bulk sampling exercise provided favorable results, especially regarding
costs of extraction and demonstrating strong reconciliation between the bulk
sample grade with that predicted by the block model.
- Cyanidation tests performed on tailings from bulk sample processing proved very
encouraging and suggested a harder look at their potential impact on the project.
Impact of Cyanidation Test Results
Since receiving cyanidation test results , Novo has examined, at a high level, how the
introduction of conventional cyanide treatment might impact economics at Beatons Creek.
A processing rate of around 2,000 tonnes per day utilizing a gravity + carbon -in-leach
(“CIL”) mill was considered.
Initial feedback suggests the amount of capital needed to bring CIL into the project’s
processing design is potentially only modestly higher than that for the current gravity-only
design. Although processing costs are expected to be somewhat hi gher using gravity +
CIL mill, added gold recovery easily offsets additional operating costs. Novo has modeled
recoveries in a gravity -only scenario at 80% whereas cyanidation test data indicate
potential recoveries of +97% in a gravity + CIL mill.
Additionally, Novo also considers potential for treating fresh rock in a gravity + CIL
milling scenario, whereas i n a gravity -only mill, only oxide mineralization would be
amenable to treatment. Potential to treat fresh rock could enhance the project considerably
by extending mine-life. Initial metallurgical test work on fresh rock ( please refer to the
Company’s news release dated July 8, 2014 for more details) indicates gold is free-milling.
Novo now considers the case for gravity + CIL milling to be compelling. Such a traditional
milling scenario could potentially enhance both the cash flow and net present value of the
project. Gravity + CIL mills oper ate over much of Australia where the technology is
considered well-proven. Novo recognizes that potential financing for a more traditional
milling scenario could be made simpler.
Resource Upgrade and Expansion
With a more robust milling scenario in mind and a potentially longer mine-life, Novo has
recently decided to undertake work to upgrade and expand existing mineral resources at
Beatons Creek. In areas of inferred oxide resources, trench (costean) sampling is being
undertaken with the intention of upgrading these to indicated resource s. Novo has also
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identified several new areas where mineralized conglomerates are present that have not yet
been included in the resource, but can potentially be added through costean sampling.
Upon completion of costean sampling in approximately one mon th, Novo plans to
undertake a modest reverse circulation drill program to help upgrade and expand both oxide
and fresh resources. Novo considers the potential to grow its resource base very good
given that most conglomerate horizons remain open into the Nullagine sub-basin.
Path Forward
Work to upgrade and expand gold resources is expected to take approximately 3-4 months.
While resource work progresses, Novo is shifting focus of economic study to a gravity +
CIL milling scheme with an expected completion within 1 -2 months after resources are
restated for Beatons Creek. Permitting works already underway will be re -geared in this
new direction.
“Beatons Creek is an exceptional gold project ,” commented Dr. Quinton Hennigh,
President, CEO and director of Novo Resources Corp. “ Last year’s bulk sampling work
demonstrated mining is potentially simple and cost-effective. Now, we have a clear picture
that gravity + CIL processing can potentially improve overall economics of the project
considerably. Therefore, we are aggressively advancing Beatons Creek in this new
direction. We think our new approach to progressing Beatons Creek will potentially result
in a low cost, high margin mining operation”
Blue Spec
Novo has received final assays from its drill campaign at it Blue Spec gold -antimony
project late last year. Blue Spec is a high -grade vein system with strong exploration
potential.
Step-Out Drilling East of Blue Spec
Novo completed seven reverse circulation and core holes in areas east of the Blue Spec
high-grade deposit. All holes were drilled from north to south at inclinations of 55 -70
degrees, and were designed to test for extensions of mineralization (Figure 1). Significant
results are presented in the table below.
Holes 16BSDH016 and 16BSDH035 tested areas immediately above the projected high-
grade core of Blue Spec and between the Blue Spec zone and the Red Spec zone further
east. Both holes encountered significant gold mineralization including 5.01 gpt Au over 3
m and 3.97 gpt over 1.2 m, respectively, suggesting there is a probability that Blue Spec
and Red Spec may link together. While these grades are lower than those encountered in
Blue Spec’s high-grade core, Novo believes these results indicate the high-grade core may
be present immediately below this area.
Significant Drill Results from Blue Spec Deposit
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Hole Number From (m) To (m) Length (m) Au (gpt)
16BSDH016 327.0 330.0 3.0 5.01
16BSDH024 593.0 594.6 1.6 2.19
694.0 700.0 6.0 2.14
including 698.0 699.5 1.5 3.27
16BSDH035 399.3 400.5 1.2 3.97
16BSDH039 505.0 506.0 1.0 9.81
Hole 16BSDH039 clipped the lower edge of Blue Spec’s high -grade core encountering
9.81 gpt Au over 1 m. This hole was intended to intersect the high -grade core
approximately 20 meters to the east, but deviated westward thus missing its intended target.
Nevertheless, Novo believes the strong gold intercept that was encountered is indicative of
the margin of the high-grade core.
Hole 16BSDH024 tested regions approximately 50 m below Blue Spec’s high grade core
encountering 2.19 gpt Au over 1.6 m on the projected plane of the Blue Spec deposit and
2.14 gpt Au over 6 m on a separate splay structure located south of the Blue Spec zone.
Holes 16BSDH007 a nd 16BSDH008 tested eastern extensions of the Blue Spec zone at
shallower depths (<200 m). Both holes encountered anomalous gold where they crossed
the plane of the Blue Spec zone. Similarly, hole 16BSDH029 encountered anomalous gold
in a shallow location east of the Red Spec zone.
Reviewing this drill data, Novo considers the best potential to expand mineralization at
Blue Spec lies in the down -plunge direction to the east and under the Red Spec area.
Further drilling is needed to verify this possibi lity. True widths of mineralized intercepts
are estimated to be approximately 30-40% of reported down-hole intervals.
White Spec Discovery
Three wildcat holes were completed at target called White Spec approximately 9 km east
of Blue Spec and two km west of the newly discovered Pros Spec zone ( please refer to
Novo’s news release dated January 18, 2017 for more details). Hole 16WSDH002, drilled
northwestward at an inclination of 60 degrees, encountered two significant gold intervals,
2.09 gpt Au ov er 2 m and 10.26 gpt Au over 2 m at shallow depth. Novo believes these
results represent the discovery of a significant new gold zone along the greater Blue Spec
shear.
Significant Drill Results from White Spec Hole
16WSDH002
Hole Number From (m) To (m) Length (m) Au (gpt)
16WSDH002 31.0 33.0 2.0 2.09
42.0 44.0 2.0 10.26
Holes 16WSDH001, collared 100 m southwest of hole 16WSDH002, and hole
16WSDH003, collared 200 m northeast of 16WSDH002, both encountered anomalous
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gold values (<0.1 gpt Au). Both holes appear to have missed the same zone encountered
in hole 16WSDH002, but may have been situated too far to the south and north,
respectively.
Magic Mountain and Mt. Hays
Eight shallow reverse circulation holes were completed at the Magic Mountain drill target
about 35 km east of Blue Spec. All holes were drilled in a southwestward direction at
inclinations of 50-65 degrees. The Magic Mountain target is a 100 m long, near -vertical
zone where surface rock chip sampling returned values up to 17.4 gpt Au.
All drill holes encountered anomalous (>0.1 gpt) to significant (>0.5 gpt) gold
mineralization. Notable intercepts include 1.62 gpt Au over 9 m starting at 38 m in hole
16MMDH002, 0.69 gpt Au over 7 m starting at 47 m in hole 16MMDH003, 1 .33 gpt Au
over 3 m starting at 43 m in hole 16MMDH004, and 0.72 gpt Au over 7 m starting at 42 m
in hole 16MMDH005. Mineralization appears to take a more disseminated for m (?) like
that encountered at the new Pros Spec discovery further west. Further wor k is needed to
fully evaluate this new zone.
Nine shallow reverse circulation holes were completed at the Mt. Hays target located
approximately 8 km east of Magic Mountain. All holes were drilled in a southward
direction at inclinations of 50 -70 degrees. All drill holes encountered anomalous (>0.1
gpt) Au values. Three holes encountered significant gold mineralization including 0.63
gpt Au over 3 m starting at 24 m in hole 16MHDH001, 1.44 gpt Au over 2 m starting at 30
m in hole 16MHDH002, and 1.64 gpt Au over 2 m starting at 35 m in hole 16MHDH003.
Further work is needed to assess further prospectivity of this zone.
RC and core samples were submitted to Genalysis Laboratory in Perth, Australia. All
samples were analyzed utilizing a 50 g pulp subjected to fire assay with an atomic
absorption finish. Overlimit samples (>10 gpt Au) were re -analyzed by fire assay with a
gravimetric finish. Sb was analyzed by ICP-MS following three-acid digestion.
Quinton Hennigh (Ph.D., P.Geo.) is the Qualified Person pursuant to National Instrument
43-101 responsible for, and having reviewed and approved, the technical information
contained in this news release. Dr. Hennigh is Pre sident, CEO and a Director of Novo
Resources Corp.
About Novo Resources Corp.
Novo’s focus is to evaluate, acquire and explore gold properties. Indirect subsidiaries of
Novo hold a 100% interest in the Beatons Creek gold project, a 70% interest in properties
surrounding Beatons Creek and Marble Bar , a 100% interest in the Blue Spec gold -
antimony project, and options covering approximately 400 square km over the Mosquito
Creek Basin, all in the Pilbar a region, Western Australia. Novo also controls a 100%
interest in approximately 2 sq km covering much of the Tuscarora Au -Ag vein district,
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Nevada. For more information, please contact Leo Karabelas at (416) 543-3120 or e-mail
On Behalf of the Board of Directors,
Novo Resources Corp.
“Quinton Hennigh”
Quinton Hennigh
CEO and President
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies
of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Forward-looking information
Some statements in this news release contain forward-looking information (within the meaning of Canadian
securities legislation) including, without limitation, statements as to the expected receipt of results from
various exploration and testing activities. Forward -looking statements address future e vents 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, customary
risks of the mineral resource exploration industry as well as Novo having sufficient cash to fund the planned
drilling and other exploration activities.
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(Figure 1: Long section through the Blue Spec deposit showing historic drill intercepts
and the locations of Novo’s recent drill intercepts. The historical estimates listed in
Figure 1, above, and disclosed in Northwest Resources Limited’s (“Northwest”) news
release of September 30, 2013 and in the mineral resource statement issued by Northwest
on the same date (the “Northwest Disclosure Documents”), are stated to have been
reported in accordance with the 2012 edition of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (2012 JORC Code), which are
consistent with sections 1.2 and 1.3 of NI 43-101. For the key assumptions, parameters,
and methods used to prepare these estimates, please refer to the Northwest Disclosure
Documents which are available on Northwest’s website (www.nw-resources.com.au).
These are the most updated estimates and data available regarding the Blue Spec and
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Gold Spec deposits (except for the data contained in this news release) and, as such, no
work needs to be done at this point in time to upgrade or verify the estimates. Novo is
unaware of the existence of any technical report prepared in connection with the
technical information contained in the Northwest Disclosure Documents. A qualified
person has not done sufficient work to classify the historical estimate as current mineral
resources or mineral reserves. Novo is not treating the historical estimate as current
mineral resources or mineral reserves.)