Novo Resources Corp. (Novo or the Company) has provided an update on the previously announced sale (the Transaction) of a portion of its Blue Spec Project in the Pilbara region of Western Australia comprising mining leases 46/115 and 46/244 and related mining information (the Subject Blue Spec Tenements) to ASX-listed Calidus Resources Limited (Calidus).

The Company has executed an amended terms sheet (the Amended Terms Sheet) and agreed to a revised transaction structure and payment schedule with Calidus as follows:

• Calidus will pay A$2.5 million to the Company by November 30, 2020 in exchange for a 10 per cent interest in the Subject Blue Spec Tenements;
• Calidus has the right to acquire an additional 10 per cent interest in the Subject Blue Spec Tenements by paying the Company an additional A$2.5 million (the Second Payment) by January 31, 2021;
• At Calidus’ sole discretion, Calidus can increase the Second Payment to A$5 million in exchange for an additional 15 per cent interest in the Subject Blue Spec Tenements (the Second Bonus Payment) (for an aggregate 25 per cent interest);
• In order to acquire the remaining interest in the Subject Blue Spec Tenements, Calidus must pay the Company the remaining A$11.8 million or A$14.3 million (either being the Remaining Payment) of the total agreed purchase price of A$19.5 million by March 31, 2021;
• If Calidus exercises its right to make the Second Bonus Payment, A$1.5 million of the Remaining Payment of A$11.8 million can be satisfied by the issuance of ordinary shares of Calidus at a 15-day trailing volume-weighted average price prior to the date of issuance, subject to Calidus shareholder approval;
• If Calidus does not make the Second Bonus Payment, the Remaining Payment must be made in cash for the full A$14.3 million; and
• If Calidus fails to complete the Transaction in full by March 31, 2021, Novo will have an 18-month option to repurchase any residual interest in the Subject Blue Spec Tenements held by Calidus for 50 per cent of the aggregate consideration paid by Calidus for that interest.

Calidus paid a non-refundable A$200,000 deposit to Novo on September 22, 2020.

The Transaction is still subject to the satisfaction of certain conditions precedent including the execution of various deeds of assignment between the Company, Calidus, and relevant third parties, and customary regulatory approvals for transactions of this nature.

Chairman and President of Novo, Dr Quinton Hennigh, said that the Company looks forward to completing the Transaction with Calidus.

“Novo’s team is currently focused on moving its Beatons Creek project toward production. As mentioned previously, cash from the Transaction will allow Novo to aggressively pursue exploration at Beatons Creek, as well as test the Company’s numerous other near-surface gold targets in the region, part of Novo’s vision for growth in the Nullagine camp,” he said.

The Beatons Creek project, near the town of Nullagine in Western Australia, is one of Novo Resources’ Pilbara Paleoplacer gold projects.

At Beatons Creek, Novo is exploring for gold-bearing conglomerates within the Hardey Sandstone Formation, part of the Fortescue Group, a thick sequence of ancient sedimentary and volcanic rocks.

*Above image: Novo’s Blue Spec Plan Map. Image credit: Novo Resources Corp.