TSX-V-listed Novo Resources Corporation has entered into a $30-million farm-in and joint venture agreement with Sumitomo Corporation of Tokyo to advance the Egina project, located in Western Australia.
Through the agreement, Sumitomo is entitled to earn up to a 40% interest in the project by spending up to $30-million, or C$40-million, over three years, with a required minimum of $5-millino for each phase defined by a programme and budget.
Should Sumitomo elect not to continue with the farm-in arrangement, any amounts advanced under the arrangement will be converted into common shares of Novo.
The Egina project is a high-potential gold project and comprises wholly-owned Novo tenure, including tenements acquired through the recent acquisition of Farno-McMahon; tenements into which Novo is currently earning an interest under a binding memorandum of agreement with ASX-listed Pioneer Resources; and a tenement into which ASX-listed De Grey Mining is currently earning an interest under a farm-in and joint venture agreement executed with Farno, prior to its acquisition by Novo.
Novo president and chairperson Dr Quinton Hennigh stated on Friday in a release that it was remarkable for an exploration company to team up with a world-class finance partner such as Sumitomo.
“With Sumitomo’s financial backing, we aim to quickly advance Egina through exploration and test-extraction phases with the ultimate goal, should results prove favourable, of setting the project on a path to production.
“Novo had been developing the relationship with Sumitomo for many years, built on a foundation of mutual trust and respect. The combined teams have the technical capacity to advance this unique gold deposit and we are honoured to work with Sumitomo’s capable technical team.”Creamer Media Senior Researcher and Deputy Editor Online