Novo Resources aims for high-grade gold trifecta

August 22, 2016 12:09 PM

I've been writing about Novo Resources Corp. for four years. I have visited the Western Australia flock of lands owned by them three times now. In the first piece I wrote, I discussed Quinton Hennigh's theory of how gold got into the great oxidation event, the chemistry of water began to change. Gold precipitated out in the presence of carbon. Gold has an affinity for carbon. I have explained this before in all of my first articles. 

I've been pretty quiet about the company for most of the last two years. That isn't because things weren't happening of interest; it was because they would have been interesting to the wrong people. In August 2014, Novo released the first of their BLEG results talking about gold in Beaton's Creek and Marble Bar. Alas, when Novo got all of the BLEG results back the highest indications of gold weren't on their projects, it was to the east of them.

If Quinton Hennigh had made a big deal of how rich the gold indications were to the east of their projects, he would have made the owners of those tenements very happy and very rich. I didn't want to be touting the results for others to see and appreciate. I wanted to give Quinton the time to see if he could do deals on the ground. So Quinton was moving the short-term production forward at Beaton's Creek at Nullagine but working on acquiring the new projects in the background.

Beaton's Creek should have been in production at least on a test basis last March. But everything costs more and takes longer than you anticipate. In the background, Hennigh was doing deals on the high-grade deposits east of Nullagine but permitting the mining and mill for the 30,000-tonne test production took far longer than he anticipated.

The mining permits finally came in and Novo began mining the 30,000 tons of near surface gold bearing material at Beaton's Creek a few weeks ago. At the same time, Novo was doing sampling at the new high-grade Blue Spec shear zone east of Nullagine.

I'm going to quote from that last press release an important concept for investors need to fully understand.

"Novo controls approximately 450 square km of the Mosquito Creek basin that measures approximately 65 km east-west and 30 km north-south and is comprised of a thick sequence of sedimentary rocks that were deposited approximately 2.92 billion years ago. The Mosquito Creek Formation correlates in time with the Lower Central Rand Group of the Witwatersrand basin, South Africa, the most prolific gold district on earth. This is important because it is within this window of time, around 3.0-2.7 billion years ago, that photosynthetic life evolved and the first whiffs of oxygen it produced triggered precipitation of gold resulting in the formation of the vast accumulation of gold in the Witwatersrand Basin".

The Mosquito Creek basin includes the Mosquito Creek and Blue Spec deposits held by Novo. Results in the past from both drilling and surface samples were outstanding. Recent samples indicated Novo has found some 22 high-grade veins with one ultra-high-grade sample of 525 grams of gold per ton. Other assays indicate 149.5 and 71.4 gold per tonne gold in surface grab samples. The Australian company that Novo did the deal with for the project showed a JORC (similar to 43-101) resource of about 218,000 ounces of gold.

Novo announced on the Aug. 17 a 10,000-meter program of drilling that will last three-four months to test the Blue Spec and Gold Spec portions of the Mosquito Creek Basin. Drilling will begin at the first of September. Expect results to start coming out in October and continuing until the heat of summer in Western Australia stops field work in December for three months.

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