Novo Resources (ASX: NVO) has picked up a new gold and base metals exploration play in WA’s Pilbara region by locking up a 1520-square-kilometre land package near Onslow that is littered with evidence of historical mining. The two-part move involves pegging six new tenements together with securing an option on a 70 per cent interest in the nearby Cane River project held by private company, OD4 Rocklea Pty Ltd.
Under the terms of the deal Novo will pay OD4 Rocklea $100,000 to cover past expenses at its Toolunga project and secure rights over it for an initial 12-month farm-in agreement.
Should Novo decide to extend the farm-in period for an additional 12 months, it will provide a further $100,000 payable in Novo shares.
At the conclusion of the extended farm-in period, Novo can decide to terminate the agreement or exercise an option to form a 70:30 unincorporated joint venture (JV) with OD4 Rocklea which will be free carried until a formal decision to mine is made.
The Toolunga project is in a highly prospective and under-explored district with substantial areas of untested shallow cover where prospectivity for intrusion-related systems is deemed high. This land package provides Novo with a platform to build a strategic position in the district, where we can deploy the expertise of our highly experienced exploration team and deliver on our targeted growth objectives.
Novo Resources Executive Co-Chairman and Acting CEO Mike Spreadborough
Novo has conducted extensive due diligence on the broader district, which it believes boasts a smorgasbord of geochemical signatures such as intrusion-related gold, porphyry, iron oxide-copper-gold and epithermal systems.
The area is similar to the Tennant Creek district and Novo thinks it is ripe with potential for major precious and base metals discoveries.
The amalgamated tenement package is specifically focused on the Toolunga grounds and sits strategically within a hub of intersecting tectonic boundaries, including the Capricorn Orogen, the Pilbara Craton and the Ashburton Basin.
Interestingly, the project also includes historical mining centres and numerous prospective gravity, magnetic and geochemical targets, making the area a prime geological hotspot.
Toolunga is just 80km northwest of ASX-listed Black Cat Syndicate’s Paulsens high grade mine, which is currently on care and maintenance but still holds a residual resource of 4.4 million tonnes grading 3.9 grams per tonne for 549,000 ounces.
Notably for Novo, Paulsens benefits from existing infrastructure, including a 450,000 tonne per annum processing plant.
The plant could potentially be restarted with minimal capital investment to toll treat ore from any new discoveries.
The wider Onslow district remains heavily under-explored using modern exploration techniques apart from a quick sojourn in the late 1990s and early 2000s when WMC Resources looked into the iron oxide-copper-gold potential. WMC came up with some notable assay results of up to 3.1 per cent copper, 33 per cent lead and 125 parts per million (ppm) silver at its Range No 2 prospect that sits within the Toolunga grounds.
The tenements offer a diverse array of minerals including copper, base metals, uranium, rare earths and bismuth-molybdenum-tungsten but gold, silver and tin, however, remain largely untested.
Novo thinks the tenements will provide significant potential exploration upside.
Other key prospects at the new project include Bullajacka Well, with historic rock chip hits of 6.2 per cent copper and 94ppm silver and Mt Minnie, a large magnetic and gravity anomaly near critical fault zones with anomalous stream sediment samples.
Additional targets to be investigated include Range North, which has the district’s strongest copper soil anomaly at 147ppm and other big geophysical targets, mostly backed up with excellent geochemical support.
Positioned just 70km from Onslow, the project has access to labour and good road access, making fieldwork easier and potentially cheaper.
When tenement approvals have been received, Novo will kick off exploration with geophysical surveys, mapping and geochemical sampling to get a better understanding of the potential of the region.
Novo’s decision to pump more money into exploration was made easier after it recently banked $11.5 million from the partial sale of shares in private mining company San Cristobel. Its remaining investment in San Cristobel is worth about $19m.
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