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.”