Was it exercised?
Welcome Exploration Pty Ltd
On August 11, 2017, Novo and one of its Australian subsidiaries, Karratha Gold Pty Ltd., entered into anoption agreement (the “Agreement”) with Welcome Exploration Pty Ltd, a private Australian company (the“Optionor”) for the option to acquire the Optionor’s interest in certain tenements (the “Option”) in the Karratha region of Western Australia (the “Pipeline Project”). The Pipeline Project consists of sevenprospecting licences, five exploration licences, six prospecting licence applications, three exploration licence applications and a miscellaneous licence application.
An option fee payment of 500,000 Novo common shares (the “Initial Shares”) was made on August 16,2017 at a fair value of $2,500,000 based on the closing price of the Company’s common shares on the TSX-V on August 16, 2017 of $5.00.
At any time within 12 months of signing of the Agreement, the Company has the right to exercise its Option and purchase the Pipeline Project outright, subject to the Optionor retaining certain rights described below,by issuing 2,500,000 Novo common shares (the “Option Exercise Shares”) to the Optionor. The OptionExercise Shares will be subject to a statutory hold period expiring four months from the date of issuance. Transfer to Novo of the tenements comprising the Pipeline Project will be subject to the requisite approvals of certain Australian government authorities.
The Optionor will retain non-gold rights to the Pipeline Project and will retain a 1% gross royalty on production from the Pipeline Project if the Company exercises the Option.