Novo swoops on Millennium Minerals
The West Australian
Wed, 5 August 2020 5:05PM
Novo Resources Corp has struck a $130 million deal to acquire Millennium Minerals in a deal that could expedite the Canadian company’s plans to bring its Beatons Creek gold project in the Pilbara into production.
The Quinton Hennigh-led company, renowned as a major player in the Pilbara conglomerate gold rush of 2017, will issue $61m in scrip to Millennium’s owner, Singapore-based IMC Resources, and repay its $69m of debt via a mixture of cash and shares.
A deferred consideration equal to 2 per of all gold revenue generated up to $20m will also apply.
As secured creditor of Millennium, IMC emerged as the owner of the Nullagine project after the former ASX-listed gold miner collapsed late last year.
Nullagine project, which is on care and maintenance, lies just 10km south of Novo’s Beatons Creek project.
Novo wants to use the existing infrastructure at Nullagine to bring Beatons Creek into production sooner than if it was to build its own standalone operation.
Infrastructure at Nullagine includes a 1.5Mtpa processing plant, a tailings storage facility, contract power station, administration offices, assay laboratory and a 230-room camp.
Nullagine could also be used as a production hub for the company’s broader 13,750sqkm landholding in the Pilbara.
Mr Hennigh described the acquisition as transformative for Novo and said it put the company on the fast track to production
“Novo entered the Pilbara region ten years ago on a largely conceptual basis and this transaction enables us to significantly accelerate our transition into a producing gold company,” he said.
“The Millennium assets provide us with ideally suited infrastructure that should enable us to begin producing gold from our Beatons Creek project several years earlier than our initial plan.”
Novo has retained its faith in the commercial viability of mining conglomerate gold which appears in ore as watermelon seed-shaped nuggets in the Pilbara, in contrast with the quartz-vein hosted mineralisation typically found in the WA Goldfields.
Novo plans to refurbish the processing facility at Nullagine and begin mining at Beatons Creek in the first quarter of next year.
Beaton’s Creek hosts an indicated resource 457,000oz of contained gold.
Novo plans to raise $C30m in a placement and $US60m in debt from Sprott to effect the transaction.
Perth-based Azure Capital advised IMC on the deal while Novo was advised by CIBC World Markets.