Blue Spec Project
The Mosquito Creek Basin, measuring approximately 65 km east-west and 30 km north-south, is comprised of a thick sequence of sedimentary rocks that were deposited approximately 2.92 billion years ago before those of the Fortesque Group at Beatons Creek which were deposited approximately 2.74 billions years ago. While the Fortesque Group correlates in time with the Upper Central Rand and Ventersdorp Groups of the Witwatersrand Basin in South Africa, the Mosquito Creek Formation correlates in time with the Lower Central Rand Group. This is important because it is within this window of time, around 3.0-2.7 billion years ago, that photosynthetic life evolved and the first whiffs of oxygen it produced triggered precipitation of gold resulting in the formation of the vast accumulation of gold in the Witwatersrand Basin.
Although the sedimentary rocks of the Mosquito Creek Formation were deposited in a deeper water environment than those of the Lower Central Rand Group, they display strong regional gold anomalism. The Mosquito Creek Basin is one of the most prolific gold nugget sites in Australia with dozens of prospectors returning to the area every winter finding gold nuggets across the entire basin. Hundreds of historic prospects and mine shafts explore innumerable veins scattered throughout the area. Novo considers the gold in these veins to have been directly remobilized from gold-enriched sedimentary rocks of the Mosquito Creek Basin during a period of low rank metamorphism and deformation following their deposition.
Two parallel east-west trending structural zones, the Blue Spec line in the north and the Middle Creek line in the south, cross the Mosquito Creek Basin and host numerous gold deposits, mainly orogenic lodes and veins. Veins found along the Blue Spec line commonly display abundant antimony in addition to high gold grades. Stibnite is the main antimony mineral.
Novo's Blue Spec and Gold Spec veins, host indicated resources of 151,000 tonnes at 21.7 gpt Au (105,300 oz) and 1.7% Sb and inferred resources of 264,000 tonnes at 13.3 gpt Au (112,600 oz) and 1.0% Sb. This historical estimate, disclosed in a news release dated September 30, 2013 issued by Northwest Resources Ltd. ("Northwest") 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 historical 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 historical estimates and data available regarding the Blue Spec and Gold Spec deposits (except for the data contained in this news release and Novo's news release of January 21, 2016) and, as such, no work needs to be done at this point in time to upgrade or verify the historical 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.
Both the Blue Spec and Gold Spec deposits are open along strike and down dip and associated splay zones have never been fully tested. At Blue Spec, for example, historic drill holes including BSI-011 (1.72 m @ 36.78 gpt Au), BSD0027 (1.15 m @ 62.67 gpt Au), BSD0036-W1 (2.5 m @ 157.45 gpt Au) and BSD0018-W2 (1.76 m @ 12.57 gpt Au) fall along the periphery of the current resource model and suggest immediate potential to expand this deposit through offset drilling. At Gold Spec, historic drill holes including BSD0013 (0.67 m @ 42.9 gpt Au), GSI-003 (2.1 m @ 17.09 gpt Au) and GSI-007 (2.1 m @ 20.09 gpt Au) fall along the periphery of the resource model and similarly suggest immediate potential to expand this deposit through offset drilling. True widths are approximately 80% of the reported lengths.
The Blue Spec style of gold mineralization is strikingly similar to that at the Costerfield mine in Victoria State owned and operated by Madalay Resources Ltd. Mandalay employs narrow vein mining techniques and a combination of gravity and flotation to produce gold in dore and high grade gold-antimony concentrate.