Novo Resources to form JV with Artemis for gold exploration in Western Australia
Canadian company Novo Resources has signed a preliminary memorandum of agreement for farm-in and joint venture (JV) gold rights for Artemis Resources' 1,536km² exploration package in the Pilbara region of Western Australia.
Under the deal, Novo Resources will have to spend A$2m ($1.48m) on exploration to be able to farm-in to 50% of the gold rights in Artemis’s current and future tenements within 100km of Karratha.
The investment has to be made within two years of satisfying conditions precedent in the farm-in and JV agreement.
Novo can earn rights to gold defined as that in conglomerate and paleoplacer style mineralisation. The company will be responsible for solely funding gold exploration during the farm-in phase.
Upon fulfilment of investment requirements, the parties will form a 50:50 JV to explore, develop and mine for gold as outlined in the contract.
Furthermore, Novo will join the tenements already within existing farm-in/JV arrangements, with its rights limited to 50% of Artemis’ existing rights to gold mineralisation.
Under the JV agreement, the companies must contribute equally to exploration, development and mining of gold rights on the tenements.
There is an option to convert a party’s JV interest to a 0.5% NSR royalty if it drops below 5%. In addition, a non-converting party has a right to purchase the royalty at market value after conversion to a royalty.
The parties will assess the possibility of using Artemis’s 425,000tpa Radio Hill treatment plant for treatment of ore from any new gold mine pursued by the JV, in order to accelerate project development.
Completion of the transaction is subject to due diligence and receipt of necessary approvals from the regulatory authorities.