The Mosquito Creek Basin, measuring approximately 65 km east-west and 30 km north-south, is comprised of a thick sequence of sedimentary rocks that were deposited approximately 2.92 billion years ago before those of the Fortesque Group at Beatons Creek which were deposited approximately 2.74 billions years ago. While the Fortesque Group correlates in time with the Upper Central Rand and Ventersdorp Groups of the Witwatersrand Basin in South Africa, the Mosquito Creek Formation correlates in time with the Lower Central Rand Group. 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.
Although the sedimentary rocks of the Mosquito Creek Formation were deposited in a deeper water environment than those of the Lower Central Rand Group, they display strong regional gold anomalism. The Mosquito Creek Basin is one of the most prolific gold nugget sites in Australia with dozens of prospectors returning to the area every winter finding gold nuggets across the entire basin. Hundreds of historic prospects and mine shafts explore innumerable veins scattered throughout the area. Novo considers the gold in these veins to have been directly remobilized from gold-enriched sedimentary rocks of the Mosquito Creek Basin during a period of low rank metamorphism and deformation following their deposition.
Two parallel east-west trending structural zones, the Blue Spec line in the north and the Middle Creek line in the south, cross the Mosquito Creek Basin and host numerous gold deposits, mainly orogenic lodes and veins. Veins found along the Blue Spec line commonly display abundant antimony in addition to high gold grades. Stibnite is the main antimony mineral.
Novo’s Blue Spec and Gold Spec veins, host indicated resources of 151,000 tonnes at 21.7 gpt Au (105,300 oz) and 1.7% Sb and inferred resources of 264,000 tonnes at 13.3 gpt Au (112,600 oz) and 1.0% Sb. This historical estimate, disclosed in a news release dated September 30, 2013 issued by Northwest Resources Ltd. (“Northwest”) and in the mineral resource statement issued by Northwest on the same date (the “Northwest Disclosure Documents”), are stated to have been reported in accordance with the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2012 JORC Code), which are consistent with sections 1.2 and 1.3 of NI 43-101. For the key assumptions, parameters, and methods used to prepare these historical estimates, please refer to the Northwest Disclosure Documents which are available on Northwest’s website (www.nw-resources.com.au). These are the most updated historical estimates and data available regarding the Blue Spec and Gold Spec deposits (other than data included in subsequent Novo news releases) and, as such, no work needs to be done at this point in time to upgrade or verify the historical estimates. Novo is unaware of the existence of any technical report prepared in connection with the technical information contained in the Northwest Disclosure Documents. A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves. Novo is not treating the historical estimate as current mineral resources or mineral reserves.
Both the Blue Spec and Gold Spec deposits are open along strike and down dip and associated splay zones have never been fully tested. At Blue Spec, for example, historic drill holes including BSI-011 (1.72 m @ 36.78 gpt Au), BSD0027 (1.15 m @ 62.67 gpt Au), BSD0036-W1 (2.5 m @ 157.45 gpt Au) and BSD0018-W2 (1.76 m @ 12.57 gpt Au) fall along the periphery of the current resource model and suggest immediate potential to expand this deposit through offset drilling. At Gold Spec, historic drill holes including BSD0013 (0.67 m @ 42.9 gpt Au), GSI-003 (2.1 m @ 17.09 gpt Au) and GSI-007 (2.1 m @ 20.09 gpt Au) fall along the periphery of the resource model and similarly suggest immediate potential to expand this deposit through offset drilling. True widths are approximately 80% of the reported lengths.
The Blue Spec style of gold mineralization is strikingly similar to that at the Costerfield mine in Victoria State owned and operated by Madalay Resources Ltd. Mandalay employs narrow vein mining techniques and a combination of gravity and flotation to produce gold in dore and high grade gold-antimony concentrate.
In March 2017, the Company announced drill results from Blue Spec, including seven RC and core holes in areas east of the Blue Spec high-grade deposit. All holes were drilled from north to south at inclinations of 55-70 degrees, and were designed to test for extensions of mineralization. Holes 16BSDH016 and 16BSDH035 tested areas immediately above the projected high-grade core of Blue Spec and between the Blue Spec zone and the Red Spec zone further east. Both holes encountered significant gold mineralization including 5.01 gpt Au over 3 m and 3.97 gpt over 1.2 m, respectively, suggesting there is a probability that Blue Spec and Red Spec may link together. While these grades are lower than those encountered in Blue Spec's high-grade core, the Company believes these results indicate the high-grade core may be present immediately below this area. Hole 16BSDH039 clipped the lower edge of Blue Spec's high-grade core encountering 9.81 gpt Au over 1 m. This hole was intended to intersect the high-grade core approximately 20 metres to the east, but deviated westward thus missing its intended target. Nevertheless, the Company believes the strong gold intercept that was encountered is indicative of the margin of the high-grade core. Hole 16BSDH024 tested regions approximately 50 m below Blue Spec's high grade core encountering 2.19 gpt Au over 1.6 m on the projected plane of the Blue Spec deposit and 2.14 gpt Au over 6 m on a separate splay structure located south of the Blue Spec zone. Holes 16BSDH007 and 16BSDH008 tested eastern extensions of the Blue Spec zone at shallower depths (<200 m). Both holes encountered anomalous gold where they crossed the plane of the Blue Spec zone. Similarly, hole 16BSDH029 encountered anomalous gold in a shallow location east of the Red Spec zone. Reviewing this drill data, the Company considers the best potential to expand mineralization at Blue Spec lies in the down-plunge direction to the east and under the Red Spec area. Further drilling is needed to verify this possibility. True widths of mineralized intercepts are estimated to be approximately 30-40% of reported down-hole intervals. Three wildcat holes were completed at target called White Spec approximately 9 km east of Blue Spec and two km west of the newly discovered Pros Spec zone. Hole 16WSDH002, drilled northwestward at an inclination of 60 degrees, encountered two significant gold intervals, 2.09 gpt Au over 2 m and 10.26 gpt Au over 2 m at shallow depth. The Company believes these results represent the discovery of a new gold zone along the greater Blue Spec shear. Holes 16WSDH001, collared 100 m southwest of hole 16WSDH002, and hole 16WSDH003, collared 200 m northeast of 16WSDH002, both encountered anomalous gold values (<0.1 gpt Au). Both holes appear to have missed the same zone encountered in hole 16WSDH002, but may have been situated too far to the south and north, respectively. The Company also completed eight shallow reverse circulation holes at the Magic Mountain drill target about 35 km east of Blue Spec. All holes were drilled in a southwestward direction at inclinations of 50-65 degrees. The Magic Mountain target is a 100 m long, near-vertical zone where surface rock chip sampling returned values up to 17.4 gpt Au. All drill holes encountered anomalous (>0.1 gpt) to significant (>0.5 gpt) gold mineralization. Notable intercepts include 1.62 gpt Au over 9 m starting at 38 m in hole 16MMDH002, 0.69 gpt Au over 7 m starting at 47 m in hole 16MMDH003, 1.33 gpt Au over 3 m starting at 43 m in hole 16MMDH004, and 0.72 gpt Au over 7 m starting at 42 m in hole 16MMDH005. Mineralization appears to take a more disseminated form like that encountered at the new Pros Spec discovery further west. Further work is needed to fully evaluate this new zone. Nine shallow RC holes were completed at the Mt. Hays target located approximately 8 km east of Magic Mountain. All holes were drilled in a southward direction at inclinations of 50-70 degrees. All drill holes encountered anomalous (>0.1 gpt) Au values. Three holes encountered significant gold mineralization including 0.63 gpt Au over 3 m starting at 24 m in hole 16MHDH001, 1.44 gpt Au over 2 m starting at 30 m in hole 16MHDH002, and 1.64 gpt Au over 2 m starting at 35 m in hole 16MHDH003. Further work is needed to assess further prospectivity of this zone. RC and core samples were submitted to Genalysis Laboratory in Perth, Australia. All samples were analyzed utilizing a 50 g pulp subjected to fire assay with an atomic absorption finish. Overlimit samples (>10 gpt Au) were re-analyzed by fire assay with a gravimetric finish. Sb was analyzed by ICP-MS following three-acid digestion.
RC and core samples were submitted to Genalysis Laboratory in Perth, Australia. All samples were analyzed utilizing a 50 g pulp subjected to fire assay with an atomic absorption finish. Overlimit samples (>10 gpt Au) were re-analyzed by fire assay with a gravimetric finish. Sb was analyzed by ICP-MS following three-acid digestion.