No stopping Nova with funding in place for big exploration push
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Special Report: Nova Minerals has ensured it is well funded to achieve its lofty 2020 exploration goals at the Estelle Gold Project in Alaska after securing an investment of up to $6 million from a highly regarded Australian fund manager.
Nova (ASX: NVA) announced on Thursday that Collins St Asset Management (CSVF), a high conviction long-only equities fund, had agreed to make a $2 million prepayment facility available to the company.
CSVF may also provide Nova with an additional loan of $4 million subject to terms to be agreed upon by both parties and has agreed to exercise all its options in the company, which will further bolster its cash balance.
“Collins St Asset Management is already a significant shareholder of Nova Minerals, and we could not have asked for a better partner,” Nova executive chairman Avi Kimelman said.
“Of all the many facilities and direct equity offers made to us, this was the least dilutive and most beneficial to shareholders.”
Nova has clearly communicated its intent to grow the shallow 2.5 million ounce inferred resource contained in the Korbel deposit at Estelle in both size and confidence in 2020 through systematic drilling.
The company is targeting the addition of 2-5 million ounces and has reason to be confident of achieving towards the higher end of that range with the current resource achieved using an average drill depth of just 100 metres.
In late April, Nova announced that a diamond drill rig had started turning at Block B, one of two zones that make up Korbel, marking the start of the resource development program.
This program is testing for strike and depth extensions, with the company reporting last week that the first hole drilled had ended in the same mineralisation as the inferred resource at a depth of 542.1 metres from the collar or surface with assays now pending.
“The continuation of mineralisation at depth and the consistency of mineralisation are further evidence of the potential for a big intrusive-related gold system in Block B alone on the Korbel prospect,” Kimelman said.
A second diamond drill rig has been mobilised to Korbel in recent weeks, meaning the resource development program is set to accelerate significantly.
Korbel is but one of 15 known prospects within the Estelle camp, with Nova planning to begin testing others later in the year.
Ultimately, the company believes Estelle could rival the nearby Donlin Creek mine, which is a 40 million-ounce behemoth, for size.
The $2 million from CSVF will be made available immediately, with Nova having the right to repay the face value ($2.2 million) of the prepayment facility at any time within 120 days.
If the loan isn’t repaid in that period, CSVF will have the right to convert all or some of the outstanding face value of the prepayment facility to Nova shares at an issue price per share of 7c, a premium to the company’s last traded price on Friday of 5.7c.
Nova will also issue CSVF with 4.3 million shares and 18 million options with a two-year term and an exercise price of 7c as a consideration for entering the arrangement.
Meanwhile, an investment in Western Australian gold explorer Torian Resources (ASX: TNR) appears to be paying off handsomely, with the shares with options up approximately 800% since Nova issued a convertible note.
Torian has drill results pending from its exciting Mt Stirling gold project, which sits adjacent to Red 5’s 4Moz King of the Hills mine in the Leonora district.
The program at Mt Stirling is following up historic intercepts including 35m at 2.99 g/t gold and 39m at 0.71 g/t gold.