I've been writing about Novo Resources
Corp. (NVO:TSX.V; NSRPF:OTCQX) for four years. I have visited the Western
Australia flock of lands owned by them three times now. In the first piece I
wrote I discussed Quinton Hennigh's theory of how gold got into the Great Oxidation Event, the
chemistry of water began to change. Gold precipitated out in the presence of
carbon. Gold has an affinity for carbon. I have explained this before in all of my first articles. You
should take the time to revisit them if you are not familiar with the theory.
And go here. And here.
I've been pretty quiet about the company for most of the last two years.
That isn't because things weren't happening of interest; it was because they
would have been interesting to the wrong people. In August of 2014 Novo released
the first of their BLEG results talking about gold in Beaton's Creek and
Marble Bar. Alas, when Novo got all of the BLEG results back the highest
indications of gold weren't on their projects, it was to the east of them.
If Quinton Hennigh had made a big deal of how rich the gold indications
were to the east of their projects, he would have made the owners of those
tenements very happy and very rich. I didn't want to be touting the results
for others to see and appreciate. I wanted to give Quinton the time to see if
he could do deals on the ground. So Quinton was moving the short-term
production forward at Beaton's Creek at Nullagine but working on acquiring
the new projects in the background.
Beaton's Creek should have been in production at least on
a test basis last March. But everything costs more and takes longer than
you anticipate. In the background, Hennigh was
doing deals on the high-grade deposits east of Nullagine but permitting
the mining and mill for the 30,000-tonne test production took
far longer than he anticipated.
The mining permits finally came in and Novo began mining the
30,000 tons of near surface gold bearing material at Beaton's Creek a few
weeks ago. At the same time, Novo was
doing sampling at the new high-grade Blue Spec shear zone east of
Nullagine.
I'm going to quote from that last press release an important concept for
investors need to fully understand.
"Novo controls approximately 450 square km of the Mosquito Creek
basin that measures approximately 65 km east-west and 30 km north-south and
is comprised of a thick sequence of sedimentary rocks that were deposited
approximately 2.92 billion years ago. The Mosquito Creek Formation correlates
in time with the Lower Central Rand Group of the Witwatersrand basin, South
Africa, the most prolific gold district on earth. This is important because
it is within this window of time, around 3.0-2.7 billion years ago, that
photosynthetic life evolved and the first whiff0s of oxygen it produced
triggered precipitation of gold resulting in the formation of the vast
accumulation of gold in the Witwatersrand Basin".
The Mosquito Creek basin includes the Mosquito Creek and Blue Spec
deposits held by Novo. Results in the past from both drilling and surface
samples were outstanding. Recent samples indicated Novo has found some 22
high-grade veins with one ultra-high-grade sample of 525 grams of gold
per ton. Other assays indicate 149.5 and 71.4 g/t gold in surface grab
samples. The Australian company that Novo did the deal with for the project
showed a JORC (similar to 43-101) resource of about 218,000 ounces
of gold.
Novo announced on the 17th of August a 10,000-meter
program of drilling that will last 3-4 months to test the Blue Spec and Gold
Spec portions of the Mosquito Creek Basin. Drilling will begin at the
first of September. Expect results to start coming out in October and
continuing until the heat of summer in Western Australia stops field work in
December for three months.
I was satisfied to learn that the bulk sample of 30,000 tons had been
mined and was ready for processing. And that processing would begin in a
couple of weeks. My guess is there will be between 1.5 and 2 million ounces
produced in the test. It will be some of the cheapest gold mining in the
world. Novo is literally scraping away the overburden over the near surface
reefs and loading the reef material containing the gold into trucks to move
to the holding pad. Quinton has designed a small and simple gravity circuit
that will recover the gold. That's high-grade project number one.
And the 10,000-meter drill program for the Mosquito Creek Basin will give
a substantial test of the truth detector used in a bonanza grade district.
That's high-grade project number two.
Don't expect any 130 meter intercepts of 1.5 g/t material but don't be
surprised with 1 ounce or higher intercepts of gold over 2 meters. It's a
very high-grade shear/vein system and I suspect the intercepts will be
significant.
But I mentioned a high-grade trifecta in the title of this piece and I've
only told you about two. Number three was a shock to even me and I didn't
find out about it until last night.
Someone wrote to me on Thursday the 17th after reading the
Novo press release. He wanted to know what the deal was on the Tuscarora
project in Nevada. I had to scratch my head because I didn't know anything
about it or why Novo was planning a 4,500-foot drill program there starting
in a few days.
Quinton literally just got back from Australia and I caught him at the
Denver airport on his way home while he was waiting for the shuttle. We
chatted for about twenty minutes. When I raised the issue of Tuscarora and
drilling in Nevada he explained that he didn't want to shell shock investors
into thinking the company was doing some sort of U-turn and bailing out of
Western Australia so while Sedar documents did mention him doing a deal on
the Tuscarora gold project for $100,000 for 100% ownership, he didn't say
anything about it on the website.
When Quinton worked for Newcrest Mining Ltd. (NCM:ASX) in the 1990s he
drilled the project on a vein system than had been mined back in the days of
the Lone Ranger. The results that Newcrest reported were incredible. Hole TN38 showed one
section with more than 368.3 g/t gold over 5 feet. That's greater than ten
ounces. The entire mineralized zone was 4.5 meters with the lowest 1.5 meters
showing 5.15 g/t gold. Someone had staked the project knowing that Quinton
wanted it and made Quinton an offer he couldn't refuse. Drilling is still
cheap so Quinton figured it was time shareholders deserved some nice results.
In my humble opinion all of the three immediate programs will deliver more
than satisfactory results. Novo's share price has been crippled by a lack of
results over the last year and existing shareholders were starting to get
nervous. After all, when ordinary Vancouver/Toronto mining lottery tickets
are going up hundreds of percent, investors want to see some action.
Any of the three projects, the gold processing of the 30,000 tons in WA,
the 10,000-meter Blue Spec drill program and the 1,500-meter drill program in
Tuscarora have the potential for moving the peg for investors. Should all of
them hit, Nova shares will go a lot higher. This fall is going to bring some
interesting news from Novo.
I am biased since Novo is my largest investment position. I have
participated in almost every placement the company has ever done including
the just concluded one. Novo is an advertiser. I highly suggest visiting
their website and reviewing all of the material. Expect to see some blurb
about Tuscarora shortly. Do go over the
company presentation; it is excellent even if the charts in the back are
a little hard to read. Do your own due diligence.
Novo Resources
NVO-V $.95 (Aug 22, 2016)
NSRPF OTCQX 88 million shares
Novo Resources website
Bob and Barb Moriarty brought 321gold.com
to the Internet almost 14 years ago. They later added 321energy.com to
cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both
sites feature articles, editorial opinions, pricing figures and updates on
current events affecting both sectors. Previously, Moriarty was a Marine F-4B
and O-1 pilot with more than 820 missions in Vietnam. He holds 14
international aviation records.
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