TSX-V listed Novo Resources is set to join the lucrative hunt for gold in Victoria after putting an option in place with Kalamazoo Resources to earn an initial interest in the Queens gold project. The Queens project overlies the world-class Bendigo Tectonic Zone and is only 55km south of Kirkland Lake’s well-known 6.1 million-ounce Fosterville gold mine.
The Queens gold project is located around 100km north west of Melbourne in Victoria and covers much of the historic Malmsbury goldfield in the world-class Bendigo Tectonic Zone. The project hosts multiple strike extensions of recognised high-grade, primary gold lodes within the company’s tenure.
It surrounds GBM Resources’ Malmsbury project, which hosts a near surface resource of 820,000 tonnes at 3.95 g/t gold at Leven Star Reef. GBM’s Malmsbury field also boasts a plethora of old high-grade underground workings with historical production estimated at around 91,000 ounces grading at an impressive 29 g/t gold.
Novo believes the Malmsbury goldfield is potentially structurally similar to the company-making Fosterville mine to the north. Novo also holds an option to expand its holding in the region via an additional ‘Purchase-Joint Venture’ agreement with GBM Resources, delivering it a commanding position in the fertile terrane.
Novo can earn an initial 50 per cent in the Queens gold project by issuing ASX-listed Kalamazoo with A$2 million worth of Novo shares. Novo has an initial six months ‘due diligence’ period in which to make this decision. It can then earn a further 20 per cent in the project by forming a joint venture with Kalamazoo by spending A$5 million across the tenure over a five-year period.
Novo can then move to an 80 per cent holding by completing a preliminary economic assessment, including the definition of at least 1 million ounces in indicated resources, within 30 days of reaching its 70 per cent holding. If Novo chooses to maintain its 70 per cent position, Kalamazoo must contribute 30 per cent of all costs or dilute its holding and revert to a 2 per cent royalty position.
Whilst Novo continues to focus on the development of its Beaton Creek conglomerate gold project in WA’s Pilbara region, the company’s move into the high-grade Victorian goldfields shows that it is still winding its tendrils into a range of other gold assets.
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