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Novo Resources - Chairman and President, Quentin Hennigh (centre) - The Market Herald Canada
Chairman and President, Quentin Hennigh (centre)
Source: Lion Metals
  • Mining company Novo Resources (NVO) has agreed to revised terms for Calidus Resources’ acquisition of the Blue Spec gold-antimony project
  • The companies first announced the cash deal for the Pilbara-based project, worth approximately C$18.6 million, on September 21
  • Calidus has since requested an extension on its acquisition payment, which was originally due on November 30
  • The extension will allow the ASX-listed company to focus on completing a funding package for the nearby Warrawoona gold project
  • Novo Resources is down 14.44 per cent and is currently trading for $2.37 per share

Mining company Novo Resources (NVO) has agreed to revised terms for Calidus Resources’ acquisition of the Blue Spec gold-antimony project.

The Canadian miner previously bought the Blue Spec project in August 2015, but found that it was not compatible with another acquisition, the Nullagine mill. Calidus Resources is an Australian-based mining company, which is listed on the Australian Securities Exchange (ASX).

In September of this year, the two companies agreed that Calidus would buy a portion of the Blue Spec project for $19.5 million cash. The acquisition made sense, as the Blue Spec project is located just 70 kilometres away from Calidus’ Warrawoona Gold project in Western Australia’s Pilbara region.

Under the deal’s original terms, Calidus was meant to pay the entire $19.5 million in consideration by November 30, 2020. However, the company has since requested an extension on its payment schedule, which Novo has agreed to.

Under the new revised payment schedule, Calidus will make an initial payment of $2.5 million by November 30. This will allow the company to secure a ten per cent interest in Blue Spec.

If Calidus pays another $2.5 million by January 31, 2021, the company may increase its ownership in the project to 20 per cent. Otherwise, it may make a payment of $5 million by January 31, 2021, to increase its interest to 25 per cent.

For the third and final payment, Calidus has two options, depending on the choices it made for its second payment. If the company chose the 20 per cent interest option, it must pay $14.3 million in cash by March 31, 2021 to acquire all remaining interest.

If, however, Calidus chose the 25 per cent interest option, the company must pay $11.8 million by March 31, 2021 to acquire all remaining interest. In this case, the $11.8 million may be comprised entirely of cash, or can be paid as $10.3 million cash and $1.5 million in Calidus shares.

Novo’s Chairman and President, Dr Quinton Hennigh, said the company is looking forward to completing the transaction with Calidus.

“Novo’s team is currently focused on moving its Beatons Creek project toward production”, he said.

“As mentioned previously, cash from the transaction will allow Novo to aggressively pursue exploration at Beatons Creek, as well as test the company’s numerous other near-surface gold targets in the region, part of Novo’s vision for growth in the Nullagine camp,” he added.

Novo Resources is down 14.44 per cent and trading for $2.37 per share, as of 9:52am EST.


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