Company News – Thu 31 May, 2018

Novo Reports First Bulk Sample Results From Comet Well

Here sit he news today that is driving down the Novo stock. While the numbers are clearly disappointing the markets it is only the first 2 of 12 bulk samples. The tough situations of exploring in this Karratha area is the inconsistent geology. This is why Novo has tried a number of different exploration methods to get a handle on what gold is in the ground.

Please email me with all your questions and I will get those in front of Quinton – Fleck@kereport.com.

Click here for the most recent interview with Quinton and I discussing this news.

…Here’s the news…

VANCOUVER, British Columbia, May 31, 2018 (GLOBE NEWSWIRE) — Novo Resources Corp. (“Novo” or the “Company”) (TSX-V:NVO) (OTCQX:NSRPF) is pleased to provide results for the first two bulk samples from Comet Well, part of Novo’s greater Karratha Gold Project located in the Pilbara region of Western Australia. Sample KX157, a 7.143 tonne bulk sample previously reported to contain numerous gold nuggets (please refer to the Company’s news release dated April 25, 2018 for further details), returned an impressive grade of 10.4 grams per tonne gold (please refer to figures 1 and 2 below for sample location). Sample KX158, a 6.853 tonne bulk sample encompassing conglomerate and footwall dolerite, returned 1.5 grams per tonne gold.

Sample KX157 was collected from a 2×2 m horizontal panel from 0.3-0.8 m above the basal contact of the Lower Cannonball conglomerate unit at the Powerline showing (please refer to the Company’s news releases dated February 14, 2018 and March 20, 2018 for further details). Additional bulk samples, KX151-KX162, have been collected from nearby trenches (please refer to figure 2 below and the Company’s news release dated March 20, 2018 for further details) and are currently being processed through the SGS Minerals (“SGS”) laboratory in Perth (please refer to the Company’s news release dated February 6, 2018 for further details). Data from these samples will provide a more thorough understanding of gold grades within the basal few meters of the Lower Cannonball conglomerate, a unit that has yielded numerous metal detector strikes.

Sample KX158 was collected immediately beneath KX157 from a panel approximately 0.5 m thick. Approximately half of the sample is conglomerate and half is footwall dolerite, a rock considered barren. When compared to bulk samples collected from the basal contact at Purdy’s Reward that yielded 10.6-87.8 grams per tonne gold (please refer to the Company’s news release dated February 14, 2018 for further details), this sample is notably lower grade, an indication that the basal contact is not as enriched at Comet Well compared to that at Purdy’s Reward. At Comet Well, gold appears to be scattered through a thicker section of conglomerate as evidenced by results from sample KX157 and the numerous detector strikes over several vertical meters of exposure in trenches.

To date, two gold-bearing horizons have been identified at Comet Well. The lower horizon comprises the bottom of the Lower Cannonball conglomerate and displays a thickness of several meters. The upper gold-bearing horizon is approximately 1-2 m thick and comprises the base of the Upper Cannonball conglomerate. This horizon may correlate with gold-bearing conglomerates approximately 2 km northeast at Purdy’s Reward. Novo is currently exploring areas along strike to confirm this hypothesis.

Novo personnel recently discovered a new exposure of gold-bearing conglomerate within a drainage approximately 250 m southeast of the trench from which bulk samples KX157 and KX158 were extracted (please refer to figures 3 and 4 below). Current interpretation suggests this is the down dip extension of the gold-bearing horizon within the Upper Cannonball conglomerate. Work is currently being undertaken to further expose this conglomerate and collect bulk samples. Novo plans to provide further information about this discovery once this work is complete.

In light of the successful implementation of Novo’s bulk sampling and processing protocols at Comet Well, Novo is considering returning to Purdy’s Reward to re-sample previously sampled areas using these new protocols to ensure consistency of procedures and resulting data.

Novo Chairman and President, Dr Quinton Hennigh, commented, “We are very encouraged by initial bulk sample results from Comet Well. Samples KX157 and KX158 are the first two +5 tonne samples collected and analyzed by our new protocols, a seminal step forward for the Company and project. We are particularly intrigued with the elevated concentration of gold in sample KX157 given its position above the basal contact and look forward to receipt of further results from additional bulk samples collected in nearby trenches. These results will give us a more complete picture of gold grade distribution from the bottom few meters of the Lower Cannonball conglomerate.”

Since securing an agreement for the use of the sample processing facility at SGS in February, 2018, Novo technical staff and consultants have been working closely with SGS to refine flowsheets for processing and analysis of bulk samples from Comet Well. Analysis extends beyond solely assigning a grade to the material. Testing also generates important metallurgical information that will prove invaluable as the project progresses through economic studies. Novo will glean key information around gold grade, gold particle size and distribution, and gravity recoverable gold that will assist with future processing plant design options.

To ensure that the extremely nuggety Pilbara conglomerate gold mineralization is sampled and tested appropriately, considerable mineral processing, geometallurgical and geological intelligence have been applied to develop rigorous sampling and testwork flowsheets, assay and QA/QC regimes. Test work procedures are being optimised as material hardness, gold grade, gold particle size and distribution of gold reporting to various analytic streams is better understood. Capacity of the test plant is expected to be in excess of 50 tonnes per month once operating at steady state.

Novo CEO and Director, Rob Humphryson, commented, “Our staff’s dedication and determination helped overcome many obstacles faced during the development of these unique sampling and analytical processes. Novo is not aware of any such work having been undertaken previously in Australia, thus these processes were developed without the benefit of precedent. Our ultimate aim is to achieve integrity of data, including auditable and reliable results, in a timely and cost-effective manner with an eye to future geological modelling and economic studies. Considerable intellectual property gained through the development of these processes and Novo’s access to the SGS facility help ensure that Novo will remain at the forefront of conglomerate gold exploration in the Pilbara for the foreseeable future.”

Quality Control and Quality Assurance:

Novo staff, under the supervision of Dr. Quinton Hennigh, Novo’s President and Chairman, collected bulk samples discussed in this news release.  Bulk samples are being submitted to SGS Minerals in Perth, Australia where they are treated in a test plant detailed in Novo’s news release dated February 6, 2018. As the gold mineralization at Comet Well is extremely coarse, the entire sample is crushed and screened and passed through a metal detector to collect any nuggets in the sample.  Once detected, the sample is again crushed, screened and further processed through a gravity concentrator. The concentrates and tails are analyzed, with the final grade based upon the gold recovered from each of the three sample streams (See figure 5 below). Samples are scrutineered by independent consultants from RSC Mining and Mineral Exploration, Perth, whilst each sample is collected and each sample is treated at the laboratory.

Dr. Quinton Hennigh, the Company’s, President and Chairman and a Qualified Person as defined by National Instrument 43-101, has approved the technical contents of this news release.

About Novo Resources Corp.

Novo’s focus is to explore and develop gold projects in the Pilbara region of Western Australia, and Novo has built up a significant land package covering approximately 12,000 sq km. For more information, please contact Leo Karabelas at (416) 543-3120 or e-mail leo@novoresources.com
On Behalf of the Board of Directors,

Novo Resources Corp.

“Quinton Hennigh”
Quinton Hennigh
President and Chairman

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Forward-looking information 
Some statements in this news release contain forward-looking information (within the meaning of Canadian securities legislation) including, without limitation, statements as to planned exploration activities and the expected timing of the receipt of results. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, without limitation, customary risks of the mineral resource industry as well as the performance of services by third parties.

PDFs accompanying this announcement are available at:

http://resource.globenewswire.com/Re/_modules/bCMS/content/forms/source/Download/8835c18e-6e55-450a-929d-dfef9873611a

http://resource.globenewswire.com/Re/_modules/bCMS/content/forms/source/Download/b1ca8862-da08-4025-afda-2fa2c21865d5

http://resource.globenewswire.com/Re/_modules/bCMS/content/forms/source/Download/e92583e5-184e-48b9-b09e-e589468fd6c3

http://resource.globenewswire.com/Re/_modules/bCMS/content/forms/source/Download/16319ff3-c5e8-42be-bf10-69abbea45676

http://resource.globenewswire.com/Re/_modules/bCMS/content/forms/source/Download/f8d4b011-52bb-45c2-9cf8-235d301b27f3


Comments:
  1. On May 31, 2018 at 9:22 am,
    Tom says:

    long MRNS

  2. On May 31, 2018 at 9:32 am,
    spanky says:

    Tightest 50,2 bollinger bands on the $XAU chart since 2014. This tightness has only been witnessed about 3 other times since 1985. The 2014 instance preceded a massive waterfall decline. The two other times preceded significant rallies.

    • On May 31, 2018 at 9:42 am,
      spanky says:

      I should say this is for the daily chart.

      On the weekly chart, 50,2 bollingers have only been this tight a couple of times before–in 1989 and 2007, The 2007 one was interesting because there was a huge initial thrust up, then a huge thrust down and then the final move was higher into the 2008 peak. That was one very very crazy double headfake. I would expect no less this time. I hope I am wrong and we can just smoothly ramp higher with higher highs and higher lows, but that is merely hope. You would expect the banksters to want to fleece as many bulls and bears alike before showing their hand.

  3. On May 31, 2018 at 10:49 am,
    pardu says:

    Cory, what do your contributors think about these results for NOVO, because the stock price fell significantly, is NOVO still promising?

    • On May 31, 2018 at 11:05 am,
      terra,laser says:

      Hi Pardu, I think the market was expecting better assays – thus the large drop in share price. The large discrepency between the two assay results in the nr is another concern. On the positive side, NVO’s land package is huge and if continuity at sufficiently high grade exists, the company has good prospects.

      • On May 31, 2018 at 3:29 pm,
        Excelsior says:

        @Goldfinger – “Moriarty comments on Novo NR:”

        “If you go back to the video presented at the Denver Gold show that had all the dots showing where the gold is, I think that more accurately reflects what they really have.”

        “This was not the most clear press release I have ever read. The whole purpose of drilling/sampling is to determine both where the gold is and where it isn’t. They are so wrapped up on complying with JORC and 43-101 that they have forgotten that mining is the art and science of extracting minerals from the ground at a profit.”

        “It appears to me that there is a 4-6 month delay between taking a sample and getting results. I think they should be running a parallel testing protocol where they take an identical sample, crush it and run it through either jigs or a sluice box. They need a feel for where the gold is and I don’t think they are getting that. This isn’t f’ing rocket science.”

        “Investors have gotten whacked for multiple times and at some point they are going to desert and not come back.” $NVO

        https://ceo.ca/index?3f234343a70c

        • On May 31, 2018 at 3:31 pm,
          Excelsior says:

          I guess the market didn’t think the grades were enough to warrant the current share price so it is selling off a bit. This looks to be a buy the rumor sell the news scenario, but it is only one bulk sampling so it will be interesting to see how things look after a few more samples come back.

          Bob M. made a good point though about the parallel testing with the jigs or sluice box, because that way they can narrow down the search for where the gold is and test their thesis in a more timely basis.

          They have a massive land position so the market is over-reacting to this bulk sample, but it highlights the chore they have in front of them of sampling such a large area and figuring out if it will be economic to mine it or not. It may only be that isolated sections are economic.

          Like so many exploration stories over the last year or 2 investors have bought in big on the narrative of a massive discovery, and sold off very hard if the results were good but not great due to the valuation mis-match.

          I wouldn’t rule Novo out just yet, but yes, they need to speed up the turnaround times on getting these results out to the market before they lose fickle investors interest.

          • On June 1, 2018 at 3:22 am,
            Excelsior says:

            good comments from a contributor at ceo with the handle @mineralised:

            @mineralised – “My 2c. The cross section / aerial views look very good. The market doesn’t understand the approach. Once they bulk sample each layer and determine that over X km (2-6km potential) a particular layer (lower cannonball for example) is grading Y g/t on average, the core drilling will reveal the rock volume of that particular layer – notice the close drill spacing, they can use this to create a mine plan for trial mining.”

            “The mine plan will be tailored precisely to the gold bearing strata and will minimise waste taken back to the mill, this thing will be killed by dilution otherwise, you can’t bulldoze your way through this pastry, it is not all gold bearing. They will also be able to follow that layer down-dip with core drilling, all the way back up to basement highs (blocks pushed up hopefully post mineralisation event) that exist kms away, and bulk sample the outcrop where it comes back up, note one of the earliest Novo karratha tenements to be granted is smack bang on a basement high ~23km downdip. Cheap and effective. This is the reason for the forensic sampling technique at surface, to nail down the precise gold bearing strata. It will be hard to argue on the ounce potential if they pull it off (x km of a particular conglomerate layer exposed along strike grading Y g/t and z m3 of rock volume of that same horizon) and it will be easy for them to demonstrate a good head grade in trial mining if they do it right (and there’s pay dirt). Also remember there are two horizons to test not just one. The return to Purdy’s is as much about upgrading the integrity of the sample data as it is linking the Purdy’s conglomerate to the upper conglomerate at Comet Well, to repeat – they don’t think Purdy’s is better, they think they have both. Good luck all.”

            https://ceo.ca/nvo?faf639b6b31e

    • On May 31, 2018 at 6:39 pm,
      Excelsior says:

      The Comet Well Confusion
      By: The Hedgeless Horseman – (05/31/18)

      “As we saw a huge reaction in the Novo Resources share price today I would like to give my take on the News Release and other developments as of late.”

      “(In short; This is the biggest over-reaction we have seen in Novo so far. It even eclipses the “Purdy’s fake out” which I wrote about a couple of months back.)”

      http://www.thehedgelesshorseman.com/novo-resources/the-comet-well-confusion/

  4. On May 31, 2018 at 12:09 pm,
    Charles says:

    There was an unfilled gap on the daily chart that I have been watching for some time that got filled today.