THIS NEWS RELEASE REPLACES AN INCORRECT VERSION OF THE NEWS RELEASE DATED JULY 19, 2012 BEARING THE SAME TITLE
VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 20, 2012) - Novo Resources Corp. ("Novo") (CNSX:NVO) is pleased to announce that it has signed four farmin and joint venture agreements (each a "JVA") with the Creasy Group ("Creasy") of Western Australia whereby Nullagine Gold Pty Ltd ("Nullagine Gold"), an Australian subsidiary of Novo, is entitled to earn a 70% interest (as to gold and minerals associated with and normally mined with gold, being "Gold Rights") in the prospecting, exploration and mining tenements and applications related to Creasy's 100% controlled Pilbara Paleo-Placer project. This project covers ground in the Nullagine embayment and Marble Bar sub-basin located in Western Australia.
Nullagine Gold is held 100% by Conglomerate Gold Exploration Pty Limited ("CGE"), an Australian subsidiary of Novo. CGE and Creasy have also entered into a CGE Shareholders Agreement and a CGE Share Issue Agreement.
The thirty two properties within the four JVA's cover an area of approximately 1,251 square km in the Nullagine embayment and 554 square km in the Marble Bar sub-basin underlain by 2.74 billion year old siliciclastic sedimentary and volcanic rocks belonging to the Fortescue Group, the basal part of the Hamersley Basin located in the Pilbara region of Western Australia. These rocks are similar in age and character to the Central Rand Group of the Witwatersrand Basin, Republic of South Africa, the single largest gold region on Earth. The Fortescue Group hosts multiple conglomerate horizons known to contain gold. Although these rocks were mined locally in the late part of the nineteenth century, little modern exploration has taken place in the region.
Mark Creasy, discoverer of the Jundee gold deposits (production to date approximately 5,300,000 ounces) and one of Australia's best known prospectors, recognized the potential for gold mineralization in these conglomerates while prospecting in the Pilbara region in the early 1980's. Over several years Mr. Creasy has, using his on-ground experience, assembled an extensive land package covering these highly prospective rocks. In 2012, Novo anticipates undertaking an aggressive exploration program to fully evaluate the potential of these projects.
"Now that we have finalized the formation of our initial joint ventures, we are looking forward to working with Mr. Creasy on this very exciting gold project," commented Dr. Quinton Hennigh, President and CEO of Novo. "Given that there are very few places where gold-bearing conglomerates of similar age and character to those of the Witwatersrand Basin can be found, we feel the exploration opportunity before us is truly exceptional."
Key details of the JVA terms are as follows:
1. four JVA's (and related documents) have been signed with companies controlled by Mark Creasy covering 32 tenements or applications for tenements (the "Properties");
2. Nullagine Gold will acquire a 70% interest in all Gold Rights with respect to the Properties by spending AUD$1 million on exploration expenditure across the Properties. Nullagine Gold will also become a registered holder of a 70% legal interest in 30 of the 32 tenements;
3. Creasy's interests under each JV will be free carried for all exploration related expenditures. Upon completion of the joint venture, Creasy will retain a 30% interest in all Gold Rights with respect to the Properties, as well as 100% of rights to all other minerals. Creasy will then hold a 30% legal interest in 30 of the 32 tenements and 100% of the remaining 2 tenements (but subject to Nullagine Gold's Gold Rights);
4. CGE will reimburse past exploration expenditure on the Properties by Creasy, as verified by CGE, up to a maximum of AUD$5.5 million. Reimbursement is contingent on CGE achieving a listing on a recognized stock exchange (an "IPO") within 4 years of the execution of the JVA's. Reimbursement will be paid from net funds raised in an IPO (if completed) and subsequent funding rounds (if completed), capped at 10% of net funds from each round, until the verified expenditure is reimbursed;
5. if CGE has not achieved an IPO within 4 years, the Properties will be returned to 100% ownership by Creasy at no cost, unless otherwise agreed;
6. if a mining decision is made under any of the JVA's following a bankable feasibility study but Creasy elects not to participate in mining, its interest in relation to that mining area and the underlying ground will be transferred to Nullagine Gold and converted to a 1% net smelter royalty. Creasy will continue to be free carried with respect to ground outside that mining area; and
7. Nullagine Gold will manage all four joint ventures as if they were a one single joint venture.
Key details of the CGE Shareholders Agreement and CGE Share Issue Agreement are as follows:
8. Novo will initially control 51% of the issued shares in CGE and Creasy will control 49%;
9. CGE is entitled to spend (via Nullagine Gold and Beatons Creek Gold) up to a further AUD$3.5 million in aggregate on the Properties and the Beatons Creek tenements to increase its shareholding in CGE to 81% (and reducing Creasy's interest to 19%), subject to a maximum included expenditure on Beatons Creek of AUD$2 million;
10. Creasy is obliged to use its best endeavours to negotiate a right for Nullagine Gold to participate in an existing adjacent joint venture to which Creasy is a party, including bringing certain ground within that joint venture. In return Creasy's and one other party's interests under that joint venture with respect to exploration expenditure will be free carried by Nullagine Gold and CGE will reimburse AUD$125,000 to Creasy. If CGE achieves an IPO it will also issue AUD$50,000 of shares in CGE to a former tenement holder. Further details regarding that JV will be released once documentation is finalized;
11. if Creasy does not satisfy the obligation referred to in paragraph (10) above prior to an IPO of CGE (if completed) then Creasy will forfeit 23.3% of its shareholding in CGE. Prior to an IPO of CGE (if completed) that 23.3% of CGE shares shall have no voting or dividend rights; and
12. if the obligation referred to in paragraph (10) is satisfied then the ground within that joint venture will be included within the minimum expenditure commitments and additional expenditure entitlements referred to in paragraphs (2) and (9) above.
Novo has entered into loan agreements with its subsidiaries to fund their obligations under the JVA's. Novo has also guaranteed performance of those obligations. Novo is entitled to be reimbursed up to AUD$500,000 for IPO related costs of CGE (if completed) and stamp duty costs of Nullagine Gold.
The deal documents are subject to Australian regulatory approval, which is expected in due course.
About Novo Resources Corp.
Novo's focus is to evaluate, acquire and explore natural resource properties. In addition to the right to earn a 70% interest in the Pilbara Paleo-Placer project described in this news release, Novo also has the right to earn a 70% interest in another exploration property situated in Western Australia, namely the Beatons Creek Tenements. The Company also holds non-controlling investments in other junior resource companies.
Dr. Quinton Hennigh, Novo's chief executive officer and president and a Qualified Person as defined by National Instrument 43-101, has reviewed the technical contents of this news release.
For more information, please contact Leo Karabelas at (416) 543-3120 or e-mail email@example.com.
On behalf of the Board of Directors,
Novo Resources Corp.
CEO, President and Director
The forward-looking information contained in this press release is made as of the date of this press release and, except as required by applicable law, Novo Resources Corp. does not undertake any obligation to update publicly or to revise any of the included forward-looking information, whether as a result of new information, future events or otherwise. By its very nature, such forward-looking information requires Novo Resources Corp. to make assumptions that may not materialize or that may not be accurate. This forward-looking information is subject to known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied
by such information.