Novo Resources (TSXV:NVO), a junior exploration company exploring for gold in the Pilbara region of Northwestern Australia, announced a new gold-bearing reef discovery 700 meters west from their original 43-101 resource (421k ozs gold at 1.47 grams per ton).
The reef varies from 1-2 meters thick and is less than 20 meters deep, and one kilometre across. The company said more sampling and mapping will be undertaken to assess its true extent.
I spoke with Novo Resources CEO Dr. Quinton Hennigh by Skype briefly this morning. Quinton is in Vancouver for the Annual AME BC Roundup conference.
“Every time we go out there, we find something new, and that’s usually a good sign for a gold project,” Mr. Hennigh commented.
Novo was conservative with its cash in 2013 which inspired the “boots on the ground” discovery announced today. The company has $10.6 million CAD in its treasury thanks to strong support from shareholders including Newmont Mining.
“We see this as a Wits [Witwatersrand in South Africa, which holds the largest gold reserves in the world] analog, most certainly. We’re in the upper level of a Wits system and we’re going to keep chasing it at surface. We have very large open pittable potential, but we also see this extending down into the basin for many kilometres. This is a big system, there’s no doubt.”
Novo holds 70% of the project via 2 joint ventures. A 70/30 JV with the Creasy Group covers 95% of the project, and another 70/30 JV with Millennium Minerals covers the remainder.
In addition to expanding the newly discovered gold bearing reef, Novo’s priorities in 2014 are to upgrade its existing resource, undertake economic studies to move it towards feasibility, conduct large diameter drilling and or bulk sampling to evaluate shallow, oxide bearing gold reefs in the proximity of the resource (RC drilling of these areas in 2013 failed to produce results of acceptable quality). Finally, the company will drill deep holes at Beatons Creek and Marble Bar using funds from the $400k drilling grant awarded by the government of Western Australia (Dec 14, 2013 news release).
The company is also evaluating distressed opportunities that may help its position in the Pilbara region of Australia.
In addition to being an entrepreneurial junior mining CEO, Mr. Hennigh is a sought after Exploration analyst, often contributing to Brent Cook’s Exploration Insights publication. After three tough years for the mining sector, Quinton is optimistic things are about to get better, referencing the $1 billion + in cash the Sprott group are sitting on, which is just one of several firms with large amounts of capital allocated towards this sector, Mr. Hennigh believes.
“As soon as things get ramped up again, you’ll see the big companies hunting good projects, so I think you’ll see money coming into junior companies which have been languishing but do have something solid in their portfolio.”
Novo Resources has not languished in this market, in fact the company’s share price climbed from $0.70 a year ago to $0.95 today.
“We seem to benefit from a lack of sellers, more so than just large volumes of buying.”
At the Roundup conference, Quinton’s goal is to communicate Novo’s story to technical professionals and analysts, to convey that Novo really is a Wits type of story. He says the similarities between the drill core from his project and Wits are striking.
“I’m really trying to light a fire, I guess.”
Novo Resources trades on the Canadian Securities Exchange under the symbol NVO. With 55,505,310 shares outstanding, the company has a market capitalization of approximately $53,840,000.