WisGuy1 wrote: @Danielh From Jay Taylor news letter this week: Novo Resources Corp. (245.9 million shares) had two announcements of significance last week. First, on December 13
Management reviewed the company’s five-year plan. Here are highlights of that plan:
• Implementation of revised mining approach at Beatons Creek Oxide Resource has delivered, as expected, higher
processing grades in November 2021 of 1.58 g/t Au over 117 kt processed, for total monthly production of 5,498
ounces
• Completion of Beatons Creek Gold Project (“Beatons Creek”) mining review outlines optimized five-year plan
through to 2026
• A three-phase approach for the plan has been adopted for development and mining activities
o Mining of the Beatons Creek Oxide Resource to continue through Q2 2022, with low-grade stockpiles to
be processed through Q3 2022.
o Transition to mining of higher-grade free-milling Beatons Creek Fresh Resource, which provides
production through 2026
o Mining of the Golden Eagle Deposit (“Golden Eagle”) may commence and continue through the
transition from Beatons Creek Oxide to Fresh material, depending on timing of Beatons Creek Fresh
mining approvals
• Beatons Creek Fresh Resource drill out to 20 m by 20 m drill spacing for completion of a Feasibility Study in Q2
2022 has commenced
• Ongoing brownfields and regional exploration underway to further optimize and extend mine life beyond 2026,
e.g., current drilling of the Parnell Deposit
• Five-year plan supported by a strong balance sheet with cash balance of C$39.1 million and an investment
portfolio with a fair value of approximately C$119 million
Novo commenced a detailed review of Beatons Creek and nearby projects in October 2021, with a primary focus on
developing a detailed plan to ensure optimized production and profitability from the Beatons Creek Oxide Resource,
given the nature of the deposit and incorporating the learnings to date.Mining and processing target rates at Beatons Creek have been achieved during the ramp-up since February 2021,
however gold production has been below expectations due to predominantly wide-spaced grade control drilling at the
high-nugget oxide
mineralization and higher
mining dilution from more
complex mining areas. Note the
photo on your right of Beatons
Creek; Grant’s Hill in the
foreground, with (from left to
right) Edwards, Central,
Golden Crown, and South Hill
mining areas in the
background.
A program of closer-spaced
grade control drilling at
Beatons Creek has provided
more certainty for mine
forecasting. These results,
along with additional data and
analysis, have been
incorporated into the mining
review to develop the
optimized production profile for Beatons Creek. As expected, implementation of the revised mining approach has
delivered higher grades to the company’s Golden Eagle processing facility (the “Golden Eagle Mill”). The company
processed 240,731 tonnes of mineralized material during October and November 2021 at an average head grade of 1.30
g/t Au and average recovery of approximately 93% to produce 9,223 oz Au. The company expects to produce 5,000-
5,500 oz Au in December, for an anticipated total of between 14,200 and 14,700 oz Au for Q4 2021.
The revised mining approach is expected to be implemented for the life of the Beatons Creek Oxide Resource with
continued closer-spaced grade control drilling. Following completion of the detailed review, Novo has developed a five-
year, three-phase plan through to 2026:
Mining of the Beatons Creek Oxide resource to continue through Q2 2022. Between Q2 and Q3 2022, lower-grade oxide
stockpiles will supplement transitional mill feed. Mining of the Beatons Creek free-milling Fresh Resource targeted to
commence in Q3 2022 and continue through 2026. The Golden Eagle Deposit, which is adjacent to the Golden Eagle
Mill, will be used for a transition period of production as preparations are completed for the Beatons Creek Fresh
Resource, depending on timing of Beatons Creek Fresh mining approvals.
Novo expects to produce 27 koz–33 koz Au in H1 2022.
There are considerably more details available in the company’s December 13 news release where detail-oriented investors
can go to learn more. On December 16 Management announced that it and its joint venture partner, GBM, began an inaugural diamond drill
program on a number of high priority targets at the Malmsbury Project located approximately 50 kilometers south-
southwest of the high-grade Fosterville Gold Mine. Here are highlights of that December 16 announcement:
• Commencement of >2,000 m diamond drilling program, testing multiple high-order gold targets at the 50%-
owned Malmsbury Gold Project (“Malmsbury Project”), 50 km SSW of the high-grade Fosterville Gold Mine in
Victoria, Australia;
• Drill targets defined through systematic exploration in 2021 including mapping with alteration vectoring, grid soil
and rock chip sampling, historic drill core review/re-sampling and historic data compilation with 3D modelling;
• The Malmsbury Project is under-explored and highly structurally complex, with multiple orientations of high-
grade gold mineralization and in excess of 1,500 historic workings and old trenching;
13
• Several target styles are present, including “Fosterville-type” anticline-fault related targets, large scale planar
faults and fault breccias, “Woods Point-A1 style” intrusion-hosted orogenic gold targets and an intrusion-related
gold (“IRG”) system;
• Drilling will target a shoot on the Leven Star Trend where historic reverse circulation (RC) drilling intersected
7 m @ 4.84 g/t Au (LSCR014) including 3m @ 9.38 g/t Au from 54 m and 4.1 m @ 13.1 g/t Au from 66.3 m
(LSDDH08)1;
• Within the most complex part of the system, drilling will also target a highly altered gold-mineralized Devonian
monzogranite which is rare in Victoria and outcrops over 340 m strike and 40 m width;
• Forward work program includes a further second phase of drilling in 2022, 2D/3D induced polarization (“IP”) to
define disseminated sulphide haloes around various gold targets, further expansion of systematic soil
geochemistry, mapping, and rock chip sampling.
Novo acquired a 50% interest in the Malmsbury Project from ASX-listed GBM Resources Limited (ASX: GBZ)
(“GBM”) in May 2021 and has the initial right to earn up to an additional 10% interest by incurring A$5 million in
exploration expenditure over a four-year period. GBM is currently managing the project. This project was acquired by
Novo when Quinton Hennigh was the executive chairman of the company. He is now non-executive chairman of Novo
but is very much involved as an advisor to the company. He picked up this investment because he believed the Malmsbury
Project had “Fosterville-like” potential. If exploration results point in that direction, I think it is highly likely that Novo
would exercise its right to gain a 60% interest in the project because it would add another valuable orogenic epizonal
investment in its portfolio, in addition to its holdings in New Found Gold—which is currently worth approximately $119
million.
I would be lying to you if I said I am not disappointed with Novo’s operating performance thus far. However, I remain
very bullish on this company’s longer-term prospects, in no small measure because of the outside-the-box thinking by Dr.
Hennigh and his team. Quinton’s ability to use his geological genius to find additional higher-grade resources close to the
company’s mill, combined with very promising mechanical sorting that should enable long-term production at much
higher levels from the Karratha and Egina projects has me believing that Novo has a very bright future, and that a lower
level of production than expected and hoped for is par for the course of companies making a transition from explorer to
producer. Thankfully, I believe Novo has the technical skills on board to make the necessary adjustments for success.
Novo continues to be one of my top holdings