In a news release dated April 11, 2017, Novo announced that one of its Australian subsidiaries entered into a binding terms sheet with an arm’s length vendor (the “Vendor”) to acquire the Vendor’s interest in the Comet Well project in the Karratha region of Western Australia (the “Comet Well Project”). The Comet Well Project consists of a 100% interest in three special prospect licenses, a 100% interest in an exploration licence, and a 25% interest in a second exploration licence. This acquisition is subject to TSX Venture Exchange approval.
An initial payment of AU$100,000 was made to the Vendor. Subsequent payments of AU$150,000 and AU$350,000 worth of Novo’s common shares (the “Consideration Shares”), to be calculated based on Novo’s then 5-day trailing volume-weighted average price (“VWAP”) at the time of execution of the definitive agreement concerning this transaction, will be made to the Vendor in accordance with the definitive agreement. The Consideration Shares will be subject to a statutory hold period expiring four months from the date of issuance.
The Company will also pay a bonus (the “Discovery Bonus”) to the Vendor of AU$1,000,000 in cash or common shares if Novo publishes measured, indicated, or inferred gold resources of over 250,000 ounces on the Comet Well Project. If the Vendor chooses to receive payment of the Discovery Bonus in the Company’s common shares, the shares will be priced at the Company’s then 5-day trailing VWAP and will be subject to a statutory hold period expiring four months from the date of issuance.
Comet Well is a significant new conglomerate-hosted gold discovery situated approximately 45 km south of Karratha, Western Australia. Prospectors first discovered gold nuggets here around mid-2016 and have remained very active in the area since. Novo confirmed the origin of gold is from a package of previously unmapped conglomerates at the base of the Archean Fortescue Group, the same unit that hosts Novo’s Beatons Creek project approximately 350 km east.
At Comet well, detectorists have been active over an 8 km corridor underlain by conglomerates. Recently, gold has been discovered in situ in several locations. Gold nuggets in the matrix of conglomerates are typically coarse, +2 mm, and distinctly flattened appearing like watermelon seeds. Gold purity is high, 96-98%, setting it apart from gold derived from orogenic lode deposits in the underlying basement that displays purities of 70-95%.
(Photograph of the Comet Well area looking south. Weathered, gold-bearing conglomerates occupy the foreground. Note liberated quartz cobbles scattered across the surface. Mt. Roe basalt underlies the hills in the middle ground and the Cooya Pooya dolerite sill forms the ridge in the back. These rocks comprise the base of the Fortescue Group in this area and dip shallowly, less than 5 degrees, to the south. Novo-Artemis farm-in/joint venture ground covers the foreground. Novo’s 100% controlled ground lies in the distance and further into the basin.)
(Examples of in situ gold nuggets frozen in matrix material from the Comet Well and Purdy’s Reward area. Rock is dark grey-green to brown hornfelsed sandy conglomerate. Gold is high purity, 96-98%, setting it apart from that from basement-hosted lode gold deposits which commonly displays purities of 70-95%. Note that nuggets are rounded, clear evidence they are detrital in origin. Multiple outcrops of gold-bearing conglomerate have recently been identified at Comet Well and Purdy’s Reward. Novo plans to assess such areas first during upcoming exploration activities.)
(Liberated “watermelon seed” type gold nugget from the Comet Well area. Blue lines are 1 mm apart. Note the dimpled surface, a result of imprinting of sandy matrix on the nugget during compaction after burial. Otherwise, the original shape of the nugget is well-preserved.)
(Cross sectional view of a “watermelon seed” style gold nugget in a sawn slab of gold-bearing conglomerate. The dark grey-green color is likely a product of thermal metamorphism, hornfels, of the original rock. Note the crenulated texture around the edge of the nugget. Encircling the nugget is a cloud of very fine gold, likely remobilized during burial or metamorphism. Such dispersed gold is common around in situ nuggets at Comet Well and Purdy’s Reward.)