Nova Minerals Ltd (ASX:NVA, OTCQB:NVAAF) has now completed the sale of a portion of its investment holding in Snow Lake Resources Ltd (NASDAQ:LITM), with the funds to be received overnight.
The sale comprised of 3 million Snow Lake Resources shares in an underwritten secondary offering, which represented about 31% of Nova’s holding, for total proceeds of US$18 million (~A$24,000,000).
Subsequent to the transaction, Nova continues to hold 6.6 million Snow Lake shares which under agreement are in escrow to 21 March 2023.
Nova is now fully funded, with zero dilution to shareholders, to continue its aggressive resource development drilling and study programs, at its 9.6 million ounces Estelle Gold Project.
“Milestone achievement for the company”
Nova CEO Christopher Gerteisen said: “This funding represents another milestone achievement for the company and illustrates our strict capital management strategy, of identifying and entering strategic investments cheaply, growing them over time, and then monetising them to fund our path to production at the Estelle Gold Project, all while minimising dilution to Nova shareholders and keeping debt off our balance sheet.
“The price obtained for the sale of our Snow Lake shares, which was a complex transaction given Nova’s position as a major founding shareholder, was dictated by the regulatory approval timeframe and market conditions, with the LIT ETF, NASDAQ, many of the lithium juniors, and other major lithium indicators all heavily down having experienced a correction at the time of pricing.
“Nova is a gold company focused with passion, determination, and purpose on developing our flagship Estelle Gold Project.
“The opportunity cost of not being fully funded and committed to completing the full slate of aggressive 2022 work programs, which are expected to add enormous value to the Company with so much resource upside at play, was not an option we considered.”
Pre-feasibility study underway
The initial focus for Nova will be to increase the resource, both in size and confidence, at the Korbel Main deposit and the high-grade RPM North deposit, where the company encountered the spectacular hit in RPM-005 of 132 metres at 10.1 g/t gold, for inclusion in the highly anticipated Phase 2 Scoping Study to be delivered later this year.
In addition, Nova intends to drill the RPM South zone, which exhibits a much larger surface footprint based on rock chip sampling and geological observations, as well as explore more of the wider Korbel Valley, with drilling this year to also test the Isabella zone, Blocks C & D, and the encouraging Cathedral zone, which had rock chip samples of up to 114 g/t.
Resources derived from these additional zones will be included in the Pre-Feasibility Study (PFS), now also underway, and scheduled for completion in 2023.
Furthermore, exploration programs planned across the wider Estelle Gold Trend will also continue, with more targets identified within the RPM area, as well as the new promising Muddy Creek prospect.
The Estelle gold trend – unlocked
With drill rigs and personnel mobilising to ramp up exploration activities, and environmental and feasibility studies ongoing, the company is in a strong position to make rapid progress and derive value for shareholders in 2022.
“Fully funded for an exciting future ahead”
Gerteisen added: “With circa AUD$25 million in cash, Nova is fully funded to complete all its planned drilling and studies at the Korbel and RPM areas through to the PFS, with the opportunity to add additional drill rigs to explore some of the other 19 plus exciting prospects as the Company continues to unlock the wider Estelle Gold Trend.
“In particular, we are eager to get the drill rigs back out to the RPM deposit again shortly, weather allowing, where we hit the high-grade zone in our last hole to the west (RPM-005 132m @ 10.1g/t).
“This high-grade zone remains wide open, and we look forward to drilling its core, and further beyond towards the west, as soon as possible.
“With this drilling, the first objective in 2022 at RPM is to prove up the existing 1.5 Moz resource at 2.0 g/t Au to the higher confidence indicated category for inclusion in the Phase 2 Scoping Study later in the year, to greatly enhance the project’s overall economics.
“The RPM South zone is also showing massive potential of its own, and this area will be another priority for the Company to drill this year as it looks to substantially increase the resource at RPM.
“With Nova’s well established funding avenues, that provide the least dilution to shareholders, we are now fully funded for an exciting future ahead at the Estelle Gold Project.
“With two massive resources already defined and a pipeline of prospects set for systematic exploration, the Estelle Gold Trend, in terms of scale and potential gold endowment, is shaping up to be a major North American gold trend, as Nova progresses on its path towards production and its vision of becoming a world class, tier one, global gold producer.”
Activities planned for 2022
- RPM Phase 1 – Two rigs drilling 5,000 metres at the RPM North deposit to prove up the resource to the Indicated status;
- RPM Phase 2 – Three rigs drilling 15,000m at the RPM North deposit to extend the strike by up to 1 km to the west of the high-grade hole RPM-005;
- RPM Phase 3 – 3,000 metres drilling to test the highly prospective RPM South zone;
- Korbel Main – Infill resource definition drilling in the saddle area to prove up additional resources to Indicated;
- Korbel Valley – Commence drill testing additional Korbel Valley targets, including Cathedral, Isabella and Blocks C & D;
- Mineral resource estimate updates, with the aim of increasing both the confidence and size of the resource;
- Phase 2 Scoping Study which will include the expanded and higher confidence RPM North mineral resource, with the anticipation of improving the overall project’s economics significantly;
- Haulage studies investigating four options;
- Ongoing environmental and permitting studies;
- Ongoing PFS level metallurgical studies and test work;
- Improve site access including the “Korbel Highway” and expanding the airstrip to support larger capacity aircraft; and
- Expand the winterised man camp and facilities.