Subject to Toronto Stock Exchange (TSX) approval, Liatam Mining Pty Ltd has agreed to invest a further A$1.8 million to obtain 9 million shares at A$0.20 per share in Novo Resources Corp (TSX:NVO, OTCQX:NSRPF, ASX:NVO).
This will increase Liatam’s shareholding from around 3% to around 6% and means Liatam has exceeded the required spend of A$1.75 million to form the 80%:20% Quartz Hill Joint Venture with Novo in the Mosquito Creek Basin in East Pilbara, Western Australia.
The investment, along with the recent A$10 million transaction with SQM Australia in the Harding Battery Metals JV in the West Pilbara, puts Novo in a strong financial position to continue its aggressive exploration focus across key gold targets in the Pilbara and Victoria in 2024.
Earlier this week, the company’s shares soared on entering the JV agreement with SQM, the local subsidiary of global lithium producer Sociedad Química y Minera de Chile S.A.
Novo is selling a 75% interest in five of its prospective lithium and nickel exploration tenements in the West Pilbara to SQM for A$10 million.
Novo executive co-chairman and acting CEO Mike Spreadborough said, “Novo is continuing its strategy to JV its prospective battery minerals tenements with battery minerals specialists.
"Novo is pleased that Liatam has quickly exceeded its minimum exploration spend to form the JV and Liatam will continue its strategy to explore for lithium-bearing pegmatites at Quartz Hill.
"Liatam’s additional investment of $1.8 million in Novo also further validates Novo’s continuing exploration strategy and helps boost Novo’s current cash reserves and exploration budget.”
About the Liatam JV
Under the Liatam 80%:20% JV, Liatam is responsible for solely funding and carrying all of Novo’s exploration expenses until the earlier of two milestones is reached:
After a year of exploration activities, Liatam proposed to acquire legal ownership of the tenements involved in the JV for A$200,000. This offer was accepted by Novo, leading to the transfer of the tenements' title to Liatam.
Despite this transfer, Novo maintains its 20% interest in the battery mineral rights as well as rights to all gold and silver on these tenements.
The Quartz Hill area, subject to this JV, encompasses six granted Exploration Licences, 19 Prospecting Licences, and one Exploration Licence Application. Collectively, these cover an area of around 770 square kilometres. This region is deemed prospective for lithium-caesium-tantalum (LCT) style pegmatite mineralisation.
A win for Novo
Alongside establishing the JV, Liatam has also entered into a subscription agreement, committing to invest an additional A$1.8 million in Novo shares.
With the approval of the TSX, Liatam will receive 9 million shares at a value of A$0.20 per share, which will increase their stake in Novo from approximately 3% to around 6%. Liatam holds the option to convert these shares into ASX CDIs after a four-month holding period.
Following the A$10 million deal with SQM Australia and Liatam's investment, Novo is in a strong position to continue its execution of gold exploration activities throughout 2024.
The funds raised will be allocated to advance Novo's exploration drilling and reconnaissance efforts in the southern Egina Gold Camp, the Balla Balla Gold Project and the Belltopper Project in Victoria.