Strategic investment boosts Novo lithium hunt

TSX-listed Novo Resources Corporation has received a prominent new shareholder following a C$5 million strategic investment by private explorer Liatam Mining.

The funding package will be principally used to vector in on battery metals across the company’s Quartz Hill tenements in the Nullagine district of Western Australia and will lean on Liatam’s experience in the sector.

Notably, the investment will be completed through the purchase of 12.8 million shares at a cost of C$0.39 each, signifying an undiluted 4.9 per cent post-financing position in Novo.

The company says the unit price denotes a 26 per cent premium to Novo’s closing price on December 14 and the company’s 30-day trailing volume-weighted average price. The funding package is subject to a contractual hold period which expires on June 30, 2023.

In tandem with the finance package, Novo plans to hasten exploration via an earn-in agreement that will allow Liatam to pick up an 80 per cent stake in the battery mineral rights of the Quartz Hill project through a A$1.5 million exploration outlay over 24 months.

Importantly, Novo will be free carried to either a bankable feasibility study or A$20 million in spending at Quartz Hill, depending on what occurs first.

Novo will retain a 20 per cent stake in the battery minerals joint venture and claim total ownership of the project’s gold and silver rights, or the option to convert its interest into a royalty right.

In addition, Novo can elect to add lithium rights to the deal by meeting a host of restrictions.

Novo Resources Corporation Executive Co-Chairman and acting CEO Michael Spreadborough said:“Liatam brings significant exploration and operational experience and success from the Bald Hill lithium and tantalum operation in Western Australia and the Moblan lithium exploration project in Quebec.”

“Novo has a dedicated focus to exploration over the next 12 months and the C$5 million secured at a premium adds to our already robust cash position and places the Company in a strong position to continue drilling our exciting Pilbara gold and battery metals targets.”

WA-based Liatam Mining is a privately held company focused on the exploration, extraction and construction of mining projects.

Novo’s decision to form a commercial partnership is seemingly tied to Liatam’s extensive resume in the battery minerals space, particularly with the Bald Hill lithium and tantalum mine where the company assisted in the asset’s operational pre-commissioning.

Novo will now look to apply some of Litiam’s learnings to its Quartz Hill project. The operation was acquired from the Creasy Group in 2020 and recent exploration by Novo unveiled more than 200 potentially lithium-bearing pegmatites at the site.

Subsequent rock chip analysis returned results of up to 1.54 per cent lithium oxide and 1992 parts per million tantalum pentoxide.

Novo is now cashed up and ready to test the ground once again following the investment.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au