Golden future in sight for this soon-to-be-merged minnow
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It’s been a hectic few months for Anova Metals with the ASX-listed gold play close to finalising a merger which will see it become a near-term gold producer.
The Perth-based company (ASX: AWV) recently announced a tie-up with Exterra Resources (ASX:EXC) under a court-approved scheme where Anova will acquire all the issued capital of Exterra.
The merged company, which is expected to be valued at $78 million, will have a portfolio of projects in two world-class gold jurisdictions.
The two key projects are Exterra’s advanced Second Fortune mine at the Linden project north of Kalgoorlie and Anova’s much bigger, but less advanced opportunity, Big Springs in Nevada.
The merger will allow fast tracking of production at Second Fortune plus additional equity and a bigger balance sheet to support production plans at Big Springs.
The company will also boast mineral resources of 1.23 million ounces gold and “JORC compliant” ore reserves totalling 65,000 ounces gold across the two projects.
JORC compliance refers to the mining industry’s code for reporting exploration results, mineral resources and ore reserves, managed by the Australasian Joint Ore Reserves Committee.
Second Fortune and Exterra’s other gold projects lie slap bang in the middle of the Archaean Yilgarn Craton in Western Australia, a world class gold province which has been a prolific producer of gold since the late 1880s. The region includes the Kalgoorlie “Golden Mile” deposit which has produced 50 million ounces of gold since its discovery in 1893.
Big Springs lies in an established gold mining region, 80km north of Elko in the northeast of Nevada, USA.
Under the scheme, Exterra shareholders will receive one Anova share for every two Exterra shares. Exterra shareholders will vote on the scheme on September 15 after Federal Court of Australia approval.
In the meantime, Anova has kicked off another round of drilling at Big Springs.
The drilling is designed to test shallow up-dip eastern extensions of a high-grade zone intersected during its 2016 drilling campaign. The company has also mobilised a second drill rig onsite to begin drilling at the nearby South Sammy prospect.
Anova previously completed a JORC compliant mineral resource estimate at Big Springs gold deposit totalling 1.03 million ounce. The total mineral resource estimate comprised 16 million tonnes at 2 grams of gold per tonne.
According to Anova, increasing the cut-off grade to 2.5 grams per tonne gold yielded a high-grade core of 3.1 million tonnes at 4.2 grams per tonne gold for 415,000 ounces.
The merged company will boast a wealth of experience with Exterra directors John Davis and Geoff Laing to join Anova board members Malcolm James (Non-Executive Chairman) , Bill Fry (Executive Director) and Alasdair Cooke (Non-Executive Director).
Anova closed up 7 per cent yesterday at 8.8c.