Novo Resources Corp T.NVO

Hotcopper Post - Interesting reading about NOVO site visit

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David Erfle
Friday November 17, 2017

I was unable to post a weekly column to Kitco this week as I was on a site visit in Western Australia to see the Novo Resources highly controversial Karratha region project. Since writing two separate reports about the company, (you can access them both here and here) I have been anxious to visit the project and was not disappointed when I arrived on November 14th.

Here is the report I sent to my subscribers today:

I have just returned from a very exhausting and amazing Novo Resources Site Visit in Western Australia, where attendees were treated to multiple gold nugget discoveries. We began the tour at the 50/50 JV with Artemis' Purdy's Reward, which is just an hour outside Karratha (poulation 21,000) via a road that did not exist 16 months ago. The city of Karratha is mostly populated with skilled laborers who are employed in the Pilbara, where an integrated network of 16 iron ore mines, four independent port terminals, and a 1700km rail network reside. The reason why Novo began exploration in this particular area is that recent erosion has exposed nuggets at Purdy's and Artemis had recently obtained a permit. Australia holds the oldest continental crust on Earth, researchers have confirmed, and the topography is in constant change in the Pilbara region of Western Australia.

On route to Purdy's, we watched a seemingly endless train load of iron ore motoring to port. Each load contained 120 tons in roughly 150 containers worth over A$3.5 million. When we arrived on site, Dr, Hennigh, accompanied by a few workers, dug up 11 grams of nuggets in about 10 minutes. The Purdy's Reward C$2M earn-in obligation by the company will be completed in three weeks, then Novo will officially control 50% of Purdy's, which is less than 1% of the 7,000km total land package the firm has staked in the Karratha region.

After the Purdy's nuggets were excavated, we were driven a few kilometers away to the even more exciting 80% Novo controlled Comet Well property. Once there, we were introduced to local prospector Rob Beeton, who proceeded to give us fossicker lessons while digging up a plethora of gold nuggets. Rob had been prospecting in the area exactly one year to the day of the tour and was welcomed with a one-year birthday cake on site. Novo has a very good relationship with all the local prospectors, who have done a marvelous job of mapping out the property by digging thousands of holes where nuggets have already been located. Australian law permits prospectors to dig just 2 meters below surface with the use of hand tools. The use of mechanized equipment is illegal, unless you have a permit.

The company is working with the Ngarluma Aboriginal Corporation (NAC), and are in the process of receiving Heritage Clearance for Comet Well and the surrounding area. NAC has committed to expeditiously prepare and execute heritage agreements with Novo and progress heritage surveys on the Comet Well and surrounding tenements in an efficient manner and on a priority basis. Rob informed us that roughly 40 fossickers have already mapped out the area of Comet Well, where Novo plans to begin trenching in a few weeks. He has been living on site for the past few months, digging up nuggets to pay off his debts. Rob is a legacy prospector, as his great grandfather discovered Beaton's Creek in the late 1800's, which is now controlled by Novo and nearly 300km away from Karratha. Some of the rocks Rob dug out of the ground at Comet Well had a "halo effect" around the nugget. This is very promising for the possibility of more fine gold in the area, which would increase the grade, making the deposit more economical to mine.

At the Comet Well location of Rob's camp, the conglomerate is 15 - 20 meters thick and Dr. Hennigh is itching to find out if this thickness is continuous on strike toward the highway. The Comet Well property is next door to Purdy's and contains thousands of fossicker dug holes, which run 8km to an area next to the highway called 50k. (so named for the 50k highway marker from the city of Karratha) Dr Hennigh also drove us to 50k, where he proceeded to tell the story about a group of workers who discovered nuggets laying on the ground recently, while the area was being used as a parking lot. They came back with metal detectors and proceeded to excavate over 400 ounces of gold in a very short period of time. Since that time, the word spread and the area is now littered with thousands of fossicker dug holes. Just over a basalt ridge, where the Comet Well property ends, is the beginning of 100% controlled Novo property, which Dr. Hennigh informed me they will probably begin work in March of 2018. 

I think it is safe to say the assay's of the first drill program at Purdy's are the most highly anticipated in the sector, which will be released by early Q1 2018. We should also have the first trenching news out of Comet Well, along with a few more bulk samples before those drill results are released. Dr. Hennigh told me they will be doubling up on the trenching at Purdy's, as well as beginning to trench at Comet Well in a few weeks. The geology of this project makes trenching very vital to the process of figuring out how to mine this very unique deposit.

RS