Novo Resources Corp (TSX:NVO, OTCQX:NSRPF, ASX:NVO, FRA:1NOR) earlier this week outlined a busy program of gold and copper exploration as executive chairman Mike Spreadborough highlighted a series of drilling catalysts across the company’s Australian portfolio.
Novo is maintaining a discovery-led strategy focused primarily on greenfields opportunities, with the company targeting projects where successful early-stage exploration could create substantial value.
Belltopper in Victoria remains the company’s most advanced gold asset. Spreadborough said the project had an exploration target of around 880,000 ounces and contained high-grade reef systems that could be traced effectively. Novo has also established an initial resource as part of its work to demonstrate the potential conversion of exploration targets through drilling.
Elsewhere, Toolunga represents Novo’s principal copper-gold exploration opportunity. Spreadborough said the project covered more than 2,000 square kilometres and contained three geophysical targets, with fieldwork expected ahead of drilling.
A number of additional programmes could provide nearer-term catalysts. Spreadborough said Novo was aiming to return to drilling at Wyloo, subject to traditional owner approvals, while Teichman, south of Hemi, had produced high-grade rock chips and was also expected to be tested.
Egina gives the company further exposure south of Northern Star’s Hemi deposit, with fieldwork planned ahead of drilling. At Tibooburra in New South Wales, Spreadborough highlighted around 22 kilometres of gold mineralisation and said the company intended to drill the project as soon as possible.
Belltopper could also receive further drilling, adding to what Spreadborough described as a particularly active exploration period.
Novo’s financial position provides another potential catalyst. Spreadborough said the company had around $8 million in cash and valued its strategic San Cristobal Mining investment at approximately $36 million.
He stressed that the investment was liquid, saying: “We can move that position within 12 weeks if we need to, to fund drilling or if we go and purchase a project.”
Spreadborough also argued that Novo’s market valuation did not fully reflect the value of the investment portfolio. Combined with a broad pipeline of drilling targets, the company’s available liquidity could give it scope to advance exploration while retaining the flexibility to assess additional project opportunities.
Interview highlights
- Novo Resources is positioning itself as a discovery-led explorer focused on greenfields gold and copper opportunities.
- Belltopper is the company’s most advanced gold project, with an exploration target of around 880,000 ounces and an initial resource already defined.
- Toolunga is the company’s key early-stage copper-gold opportunity, with three geophysical targets across more than 2,000 square kilometres.
- Wyloo is a hydrothermal system where Novo plans further work and is targeting additional drilling, subject to approvals.
- Teichman, south of Hemi, has produced high-grade rock-chip results and is among the company’s nearer-term drilling targets.
- Egina gives Novo exposure to a substantial land position south of Northern Star’s Hemi gold project, with fieldwork and drilling planned.
- Tibooburra contains around 22 kilometres of gold mineralisation and is also expected to be drilled.
- Belltopper could see additional drilling as part of a busy exploration programme.
- Novo expects Pilbara field activity to resume after the seasonal shutdown.
- The company said it had around $8 million in cash at the time of the interview.
- Novo valued its strategic investment in San Cristobal Mining at around $36 million and described the position as liquid.
- Spreadborough said the San Cristobal investment gives Novo flexibility to fund exploration or pursue project acquisitions.
Proactive: Novo Resources is re-emphasising its discovery-led gold and copper strategy. Joining me today to discuss the company’s strategy and projects is Executive Chairman Mike Spreadborough. Mike, good to see you again. Let’s talk through this strategy. Exploration-focused, discovery-driven — talk us through what that means and what you’re building.
Mike Spreadborough: Some people might be aware, but let’s retouch it. Novo Resources is listed on the ASX and TSX. As an exploration-driven company, that gives us great liquidity. Our focus is really on greenfields discovery, looking at that early part of the Lassonde curve, where you get a great discovery and it drives share price value.
But, as we also mention to many people, we’ve got a great balance sheet. We’re always out there looking for development opportunities using the skill set that we have here in Australia, but also the support we have from a great shareholder register. We’re really focused on copper and gold. The thematics are great at the moment, with gold prices going up and copper prices going really well, so there are great discovery opportunities.
Proactive: Let’s talk about the projects that underpin all of this. Belltopper is the most advanced gold project. Talk us through that project and what role the others play in the portfolio.
Mike Spreadborough: Belltopper, just north of Melbourne in Victoria, is more advanced for us. We’ve got a very large exploration target of 880,000 ounces. It’s a huge project with really great high-grade reef systems that we can track very well.
We’ve put out a small resource just to prove that through drilling we can turn that exploration target into something significant.
The other key projects that I really like include Toolunga in Western Australia. That’s early stage, with three geophysical targets across more than 2,000 square kilometres, focused on IOCG copper-gold. We like big projects and big targets. We’ll do some work and look to go drilling next year.
We’ve also done some drilling at Wyloo. That’s a hydrothermal system and normally those grow to be big systems.
And don’t forget, we’ve still got a lot of ground south of Hemi, the 11-million-ounce project operated by Northern Star. Those are cornerstone early-stage exploration projects, and I think all of them on their own could be a separate exploration vehicle, but they’re all together within Novo.
Proactive: You talked about drilling there. Talk us through what’s happening and the key catalysts for the next few months.
Mike Spreadborough: At Toolunga, we’ll finally get the approval to get on the ground. We’ll do some fieldwork this year and drilling early next year.
At Wyloo, we’ll do some more work on the ground, but we’re really aiming to get back drilling this year, subject to approval from traditional owners.
Hopefully you’ll see us drill at Teichman. Teichman is south of Hemi and has high-grade rock chips.
At Egina, south of Hemi, we’ll get on the ground and do some fieldwork, with drilling next year.
We haven’t talked about Tibooburra in New South Wales. There are 22 kilometres of gold mineralisation and we’ll definitely be drilling there as soon as we possibly can.
We might also possibly sneak in some drilling at Belltopper. So it’s a really active period between now and the end of the year.
We obviously shut down Pilbara exploration over the hot months, but we should be back on the ground in the Pilbara in January and in those other projects in February next year.
Proactive: Mike, you released the presentation yesterday and it’s all aimed at investors. Talk us through what your aim is for them and where this strategy all leads.
Mike Spreadborough: The new corporate presentation gives an update on those projects, but importantly it sets out the catalysts for the next three to four months.
The key for us is that we’ve had this investment in San Cristobal for a long time. It’s always delivered great dividends, which has helped us, but it has also had great growth.
Through public announcements, we’ve been able to revalue the San Cristobal investment. That is now worth about $36 million to us.
I’ve just got to keep reminding people that it is liquid. We can move that position within 12 weeks if we need to, to fund drilling or if we go and purchase a project.
If you look at our balance sheet, we’re at about $8 million in cash and an investment portfolio worth $36 million which is liquid. So we’re in a very good position.
Our share price doesn’t really reflect that investment portfolio right now, so it’s a really good time for people to come on board as that portfolio is recognised.
Proactive: Mike, investors certainly have plenty to look forward to. Good luck with all the drilling and all the work that’s coming, and thanks for your time today.
Mike Spreadborough: Thanks very much.