Novo Resources Corp. (
TSX.NVO,
OTCMKTS: NVOOF,
Forum) is a company engaged in the business of evaluating, acquiring, and exploring natural resource properties with a focus on gold. The organization has business interests in properties located in Australia, Canada, and the U.S. Its projects include the Beaton’s Creek Property, Millennium Property, Blue Spec, Paleo-Placer, Comet Well, as well as others. In this compelling video podcast Q&A, Stockhouse Media’s Dave Jackson was joined by newly-minted company CEO Michael Spreadborough to get investors and shareholders up-to-date on all things Novo Resources.
(Click image to play video)
TRANSCRIPT BELOW:
SH: To start off with, can you tell us a little bit about yourself and the history of the company?
MS: Let’s talk a bit about Novo first. Novo has been around since 2012, as you said, we're TSX listed but based here in Perth, Australia. Our founder, Quinton Hennigh, is based in Denver. We haven't seen him for a while with all the COVID and travel issues, but we're based here in Perth. As you said, our focus is on the Pilbara in Western Australia. That's about 2000 kilometers north of Perth and most people think of Pilbara as iron ore country but we’ve got 13,000 square kilometers of tenure and we are focused on gold, but we also are looking for base metals in that area. It’s an exciting area, and no one's played in that space. That's our most valuable asset, 13,000 square kilometers combined with a great team, which we'll talk about later. I’m a mining engineer by training. I joined the Novo board in January. We had a board refresh, and I came onto the board and in the last three months I moved off the board into the executive co-chairman role to help us drive forward strategy and move the company, but I've got a good term, you know, we've got a team of explorationists, operations people and finance people here in Perth.
SH: Can you update our investor audience and your Novo Resources shareholders on any new company developments, especially in the wake of COVID-19?
MS: If we backtrack to COVID, we haven't had any major impacts on COVID here in Western Australia. We're one of the few jurisdictions in the world where we've kind of locked down the state through almost two years. We've had very few cases and very few deaths from COVID, eventually, the state will open up but as a result of that, we've had no impact on our business. We occasionally see some delays in suppliers, international supplies but none of that's impacted any of our plans going forwards, and our staff and contractors are on site very well. The big focus for year 21, which is almost completed, it's unbelievably gone so quickly has burned to get into production. You saw the first gold pour early in the year and we'll talk more about that in a minute but that was a great success by the team to move a unique project, the Beaton's Creek gold project into production but in parallel to that advances have now happened with expiration and we've seen an increase of expenditure and activities in our exploration portfolio, remembering the Pilbara gets pretty hot, you know, it's already 35 degrees.
Our arbitration activities tend to be a bit seasonal as we go through this, it's not only hot but wet as we go through the December, January, February, period. That's been an exciting year. A lot of work has happened to get into production and as I said now, drive expiration.
SH: You’ve just announced the Nullagine Gold Project production update. Can you expand on this for our investor audience?
MS: This was a great discovery by the team couple of years ago and finally combined with gold. That's a little bit different to what you might see in a gold fluid taught mine or something like that. This is gold has been deposited by alluvial process and floodplains over many millennia years ago, but it's got good grades, it's in tight bands, very close to the surface. It's very easy to access open-pit mining. Through the purchase last year of a processing plant that was owned by another company that had not been run very well and they went broke, by buying that plant were able to put together the deposit and the plan and go into production. The team that a very great job of rapidly moving that deposit in the production first gold pour at the start of this year. We've now seen steady throughput come through which has been good, recoveries are great, the team stabilized, and good performance on-site in terms of what we expected. It's been a great year for the team and certainly, we'll celebrate around Christmastime.
SH: You’ve also recently announced high-grade gold intersected in the first drill program at Talga-Talga Gold Project. This may be news to many investors. Can you unpack the benefits of it?
MS: Look where we are with our expiration across that 13,000 square kilometers, we were kind of looking for three things: we're looking for more conglomerate gold deposits because we believe that there are more there, and we have the knowledge and the technology to bring them into our production. We're looking for what we call basement gold projects and Talga-Talga is a basement gold project, and we are looking for base metals, copper, and nickel. Talga-Talga, it's been around for a long time with a lot of different owners, but no one's got in there and done work. We've done the first phase of drilling. We released the results I think about eight weeks ago. Those results were fantastic. They are pretty well geologically term, what we expected, the gold is in long narrow bands, which we expected it was where we were expecting.
That's a real positive. The next stage the team is busy now planning what we will do, March, April next year in terms of follow-up drilling and we plan to get to a position to be able to make a call on whether we can bring it into production, but it is high-grade gold which is exciting. It is a bit different in Beatons Creek in the conglomerate, that's pretty normal star gold that you might see elsewhere but we are excited that it's one of many new projects that we're seeing from expiration effort.
SH: The Company looks set for strong growth in 2022. How are you placed to expand operations to meet this demand?
MS: We are coming off a busy 2021, and your investors will see, I think, three things. One you'll see that continuation of exploration spend in the Pilbara and don't forget, we've got a little patch of ground in Victoria, we're going to do some work there as well. You'll see the continuation of good spending in exploration and that'll be great. You'll also see the Beatons Creek conglomerate project continue and we'll also continually look at other deposits around the processing plant. You'll see production flow through in 2022, which is good, and thirdly, you'll see that our mechanical sorting technology that we're using to upgrade low-grade gold deposits into something that the second note for mining you'll see advancement in that. They are the key three things that investors will see. Within the big picture. Our focus is we want to grow the business beyond a hundred thousand ounces a year. That's the long-term that we're focused on.
SH: For company shareholders and potential investors, what kind of future development and progress can we expect at your various projects?
MS: If we kind of worked backward, Beaton’s Creek you'll just see really continuation of us trying to optimize the project. We put a release out recently on how the grades are performing. We've said that we're going to do a bit more of a mining study. In mid-November, you will see an update on that, but we are now in a position where the teams are optimized costs, grade performance. That's good you will see that through. As I said, expiration, you're going to say a more extensive focus on drilling. We've done a lot of the groundwork and we're now able to put that into place with drilling some of our less mature projects in the base metals, you'll see some geophysics where we're using technology to see if we can source where the best place is to drill holes.
You'll see a lot of that, and a lot of results come through next year. As I said importantly, mechanical sorting, you'll see that move to Comet Well which is on kind of the Western coast of the Pilbara. We've had a conglomerate gold deposit there that we know of mechanical sorting allows us to upgrade that project into a high-grade concentrate and then truck that concentrate across to Nullagine mill. Next year, kind of our April-ish, we hope to start at what we call the development project. We'll treat 60 to 80,000 tons of Comet Well…material to allow us to firm up that production profile. Next year will be a good, and a pretty busy, year for Novo Resources and our team.
SH: What separates Novo Resources from the competition and makes your business model unique?
MS: I think any company can have good assets, so we've got good assets but it's how you work with the people and Quinton and our CEO Rob Humphryson have done a fantastic job in building a great culture, a culture that is focused on the innovation. How do we do things differently? How do we move quickly to make projects move into production? That's the good part. We're not seeing a big turnover at the moment in Western Australia, there is a huge demand for skills, and we are still attracting people to come and join us. I believe that culture is a big part of that, that we are a team-based group. I'm very family orientated very focused on giving people professional development. I think that is the big thing that makes us different. We're paid to do something unique and new, and we've got a team behind us, which is good. It might be a cliche, but we do have some good shareholders who have supported us along the way. They are very important to our journey.
SH: I have to mention your stock has been on a little bit of roller coaster ride over the past year. What can you tell our investor audience regarding the current valuation of your stock and why you think it’s a good buy right now?
MS: As everyone will tell you that the stock's undervalued and people should bid in, but the reality is, as you've just heard, we've got a large expiration tenement that is now after four years of work showing promises in terms of delivery. A good example is if your investors look on the TSX platform today, we just announced a discovery near our processing plant called Genie. That's one of many that we hope to be able to bring forward as we do more drilling- very exciting. That's a real positive going forward. I'm still a strong believer that 2022 will be a good place for gold. We also sell gold on the Australian Stock Exchange dollar, so that's held up. We're seeing good gold prices in Australian dollar terms, which is good. I think gold is a good place to be. I think sentiment over the last six months has been a bit kind of vague and a bit up and down and that's what's been reflected in our gold price. The economic issues that we've seen around the world, but I think you'll see that stabilize and gold has got a good future. We'll back that up with great work with production but also bringing our assets into more drilling the more success, hopefully.
SH: What’s the long-term strategy for the company moving forward and what should retail and institutional investors be looking out for?
MS: In the next 12 months, two years, our focus remains on that large Pilgrim tenement. That is where we've put it but behind the company, and it's not talked about too often, we have a huge investment portfolio that's the value of about 150 million plus or minus Canadian and so that investment portfolio we're very busy focused on how we use that for growth. We have as a board, a long-term vision of growing to 250,000 ounces of gold, we've got a great balance sheet, $50 million of cash at the moment, a good investment portfolio, and a production profile. We're a strong company that can now with production stabilized exploration going well, a good platform for mechanical sorting. We're now 5% on how do we grow and you'll see some of that happens through next year. I think a very exciting time to join Novo.
SH: Can you tell our audience a little bit about your corporate management and board teams, along with the experience and innovative ideas they bring to the gold exploration space?
MS: We had a refresh of the boards in January. I came on board, I've got a large mining development experience, worked for large corporates as well as the smaller end of town, IPO in projects, and brought financing to projects, that was my contribution to the new board. We brought on someone with corporate governance and a kind of legal background as well. We have a finance director previously who has got a good understanding of auditing and financial parts of the business but in the refresh, we also brought on an ESG expert. So, Ross Hamilton has a big background in that area. It's a part of the work that we're doing. I think it's an essential part of mining going forward and of course, the board is complemented by Quinton Hennigh is a great geologist, he's the founder of the company and Rob Humphryson for the center guy is a long time experiencing a gold industry here in Western Australia. We've got a board that's got all the skillsets that we need to go forward, and we work together as a team to grow and of course below the board were supported by great teams in that operations development, finance, and expiration terms. We're well set up for the future.
SH: And finally, Mike, if there’s anything I’ve overlooked the floor is all yours.
MS: Look, I'd just encourage your investors to take time, have a look at some of our recent announcements, keep an eye out for the new spot that will be coming up. I'm a great supporter of gold. I think they probably should be great support of gold going forward and we've got a good future Dave and thank you very much for catching up.
For regular updates, please visit
www.novoresources.com.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.