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Karratha

Novo has recently acquired, through staking, a 100% interest in approximately 6,021 square km of mineral rights in the Karratha region. Aggressive staking was undertaken following the discovery of a new occurrence of conglomerate-hosted gold mineralization at Comet Well and nearby Purdy’s Reward approximately 45 km south of Karratha. On April 11, 2017, Novo announced the acquisition of an interest in the approximately 48 square km Comet Well property where local prospectors has recently been very active recovering gold from soil using metal detectors. On May 26, 2017, Novo announced a Farm-In/Joint Venture agreement with Artemis Resources Ltd, an ASX-listed exploration and development company, covering an additional 1,536 square km of prospective ground in the same region. Combined, Novo now has interests encompassing approximately 7,600 square km around this exciting new discovery.

In recent years, metal detectorists have discovered gold nuggets, sometimes in concentrated patches, over an extensive area around the city of Karratha. In 2016, several particularly rich nugget patches were found in an area approximately 45 kilometers south of Karratha near Comet Well and Artemis’s adjoining Purdy’s Reward. Detectorists have been active along an 8 km long corridor underlain by conglomerate horizons that are part of a 50-100 meter thick sequence of sedimentary rocks underlying the Mt. Roe basalt at the base of the Fortescue Group. This sequence of sedimentary rocks does not appear on geologic maps of the region. Of particular note, prospectors have recently discovered gold nuggets in situ, sometimes in abundance, in outcropping conglomerates thus confirming their origin.

Gold nuggets at Comet Well and Purdy’s Reward display several interesting characteristics. Most are flattened with rounded edges giving them an appearance similar to watermelon seeds. Most are coarse, +2 mm and are not attached to quartz or other minerals. Gold is of high purity, +96%, compared to lode gold from the Pilbara region that displays purities of 70-90%. Most nuggets occur in the sandy matrix of conglomerate and the sandy texture has been imparted on their surface through pressure during burial (Figure 4). Fine particles of remobilized and re-precipitated gold occur in 2-3 mm wide halos surrounding nuggets. Gold-bearing conglomerates appear to have been subjected to thermal metamorphism in the form of hornfels.

Novo advises that extensive exploration work is necessary to gain an understanding of the geology of these conglomerates, let alone establish a mineral resource. However, given their substantial lateral extent and locally high concentrations of nuggets within them, Novo considers the conglomerate-hosted gold mineralization around Comet Well to be a significant new discovery. Gold-bearing conglomerates are Novo’s primary exploration focus in the Pilbara, and given the vast amount of experience Novo has gained exploring such deposits at Beatons Creek, approximately 350 km east of Karratha, Novo is ideally suited to explore this exciting new discovery.

Novo has staked approximately 6,021 square km southward from Comet Well covering virtually all projected down dip extensions of gold-bearing conglomerates. The addition of the Artemis earn-in/joint venture ground brings in an additional 1,536 square km of land including critical areas of outcropping gold-bearing conglomerates such as the Purdy’s Reward discovery discussed in a news release issued by Artemis on February 20, 2017. Given that Artemis has already permitted exploration work, Novo plans aggressive trenching at Purdy’s over the next several months followed by drilling later this year. While the development of Beatons Creek project remains Novo’s main focus, Novo views the Comet Well area and its vast new Pilbara land holdings as a potential pipeline of conglomeratic gold projects upon which the Company can grow. A key component of the earn-in/joint venture agreement allows access to Artemis’ permitted mill at Radio Hill, a potential benefit should economic mineralization be identified and put into production.

(Photograph of the Comet Well area looking south. Weathered, gold-bearing conglomerates occupy the foreground. Note liberated quartz cobbles scattered across the surface. Mt. Roe basalt underlies the hills in the middle ground and the Cooya Pooya dolerite sill forms the ridge in the back. These rocks comprise the base of the Fortescue Group in this area and dip shallowly, less than 5 degrees, to the south. Novo-Artemis farm-in/joint venture ground covers the foreground. Novo’s 100% controlled ground lies in the distance and further into the basin.)

(Examples of in situ gold nuggets frozen in matrix material from the Comet Well and Purdy’s Reward area. Rock is dark grey-green to brown hornfelsed sandy conglomerate. Gold is high purity, 96-98%, setting it apart from that from basement-hosted lode gold deposits which commonly displays purities of 70-95%. Note that nuggets are rounded, clear evidence they are detrital in origin. Multiple outcrops of gold-bearing conglomerate have recently been identified at Comet Well and Purdy’s Reward. Novo plans to assess such areas first during upcoming exploration activities.)

(Liberated “watermelon seed” type gold nugget from the Comet Well area. Blue lines are 1 mm apart. Note the dimpled surface, a result of imprinting of sandy matrix on the nugget during compaction after burial. Otherwise, the original shape of the nugget is well-preserved.)

(Cross sectional view of a “watermelon seed” style gold nugget in a sawn slab of gold-bearing conglomerate. The dark grey-green color is likely a product of thermal metamorphism, hornfels, of the original rock. Note the crenulated texture around the edge of the nugget. Encircling the nugget is a cloud of very fine gold, likely remobilized during burial or metamorphism. Such dispersed gold is common around in situ nuggets at Comet Well and Purdy’s Reward.)

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