Novo Agrees to Acquire Significant Stake in New Found Gold Corp.
03 March 2020 - 12:00AM
Novo Resources Corp. (“
Novo” or
the “
Company”) (TSX-V: NVO; OTCQX: NSRPF) is
pleased to announce that it has subscribed for 15,000,000 common
shares of New Found Gold Corp. (“
New Found”), a
Canadian private exploration company with the largest mineral claim
package in the Province of Newfoundland and Labrador. The
subscription price will be paid by the issuance of 6,944,444 common
shares of Novo (the “
Acquisition”). The
Acquisition is subject to TSX Venture Exchange approval.
Upon closing of the Acquisition and assuming no
further share issuances by New Found or Novo, Novo will own
approximately 15.97% of the issued and outstanding shares of New
Found and New Found will own approximately 3.73% of the issued and
outstanding common shares of Novo. The Acquisition gives Novo a
significant stake in yet another promising new gold field and,
coupled with the Company’s recent investment in ASX-listed
Kalamazoo Resources Limited (please see the Company’s news release
dated January 14, 2020
-https://www.novoresources.com/news-media/news/display/index.php?content_id=376),
further diversifies the Company’s passive exposure to potentially
significant discoveries worldwide.
New Found is focused on exploring its
wholly-owned Queensway project (the “Queensway
Project”) located near the town of Gander, Central
Newfoundland. The first hole from its late 2019 drill program
(NFGC-19-01) on the Queensway Project intersected 92.86 g/t
Au over 19.0 metres including 285.2 g/t Au over 6.0
metres. This intercept is near surface, starting at 96 m
down hole depth. The true width of this intercept is estimated to
be 70% based on drill core angles and correlation with historic
drilling. The information in this paragraph and the next has been
provided to Novo by New Found and has not been verified by
Novo.
The Queensway Project comprises 85 km of
prospective strike length with strong geological indications that
much of the property falls within the prospective high-grade
epizonal orogenic regime. In addition to the impressive gold
intercept encountered in hole NFGC-19-01, historic work has yielded
numerous high-grade surface rock chip and float samples along
approximately 20km of strike length on the Appleton and JBP fault
zones. An historic gold resource is situated approximately two
kilometres from hole NFGC-19-01.
The Province of Newfoundland and Labrador is a
favorable exploration and mining jurisdiction. The Province
recently launched the “Mining the Future 2030” initiative which
envisions five new mines, direct employment of a diverse workforce
of more than 6,200 people, CAD $4 billion in annual mineral
shipments, and CAD $100 million in exploration expenditures by 2030
(please see https://www.gov.nl.ca/releases/2018/exec/1102n05/) and
bodes well for the future of the Queensway Project.
Eric Sprott, a director of Novo, currently holds
16.79% of the issued and outstanding shares of New Found
immediately prior to the Acquisition. As such, New Found is
considered a non-arm’s length party to Novo pursuant to TSX Venture
Exchange policies.
Pursuant to the terms of the Acquisition, the
Company also has the right to appoint a director to the board of
directors of New Found at any time for a period of three years from
the Acquisition Date provided that the Company holds no less than
10% of New Found’s issued and outstanding shares. The Company has
also agreed to certain voting restrictions for a period of three
years.
“We at Novo think the Queensway Project
represents a very promising new high-grade gold discovery,”
commented Dr. Quinton Hennigh, President and Chairman of Novo
Resources. “It appears the Queensway Project encompasses an area
highly prospective for high-grade epizonal orogenic gold
mineralization. We are very pleased to have the opportunity to be
part of this exciting discovery and, upon completion of the
Acquisition, look forward to supporting New Found as they advance
work around hole NFGC-19-01 and the many other high grade showings
across the Queensway Project.”
“We are thrilled to welcome Novo as a
significant stakeholder in New Found,” commented Collin Kettel,
Executive Chairman and Director of New Found. “Following strategic
investments in New Found by Eric Sprott and Rob McEwen last year,
we are excited to receive further validation of our team’s
discovery at the Queensway Project in Newfoundland. We look forward
to working with Dr. Quinton Hennigh and the entire Novo team as we
continue to advance the Queensway Project.”
The technical content of this news release has
been reviewed and approved by Mr. Greg Matheson, P.Geo. Chief
Operating Officer of New Found Gold Corp. Mr. Matheson is a
"qualified person" as defined by National Instrument 43-101 –
Standards of Disclosure for Mineral Projects.
About New Found Gold Corp.
New Found is a private exploration company
focused on the district scale Queensway Project in Central
Newfoundland. As the largest mineral rights holder on the island of
Newfoundland the company is uniquely positioned to capitalize on
the underexplored nature of this emerging gold district. Further
information can be found on the company’s website
https://newfoundgold.ca/. New Found has a strong shareholder base
with (post-Acquisition) Palisades Goldcorp owning 48%, Novo 15%,
Eric Sprott 14%, Rob McEwen 7%, and management and directors
8%.
About Novo Resources Corp.
Novo’s focus is to explore and develop gold
projects in the Pilbara region of Western Australia, and Novo has
built up a significant land package covering approximately 13,000
sq. km with varying ownership interests. For more information,
please contact Leo Karabelas at (416) 543-3120 or
e-mail leo@novoresources.com
On Behalf of the Board of Directors,
Novo Resources Corp.
“Quinton Hennigh”Quinton Hennigh President and
Chairman
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, the expected consummation of the
Acquisition. Forward-looking 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, the
receipt of TSX Venture Exchange approval.
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