Novo Resources Plummets 26% As It Expects Up To 18-Month Production Hiatus At Beatons Creek
Novo Resources Corp. (TSX: NVO) announced on Tuesday that it is expecting a production pause of around 12-18 months at Beatons Creek. This is due to a series of challenges faced in defining the oxide mineral resource at the site and the marginal cashflow delivered by mined grade so far.
Based on the firm’s three-phase plan for the mine, mining of the Beatons Creek Oxide mineral resource was only supposed to last until Q2 2022, with low-grade stockpiles expected to be processed until Q3.
After which, the plan entails “transition to mining of the higher-grade free-milling Beatons Creek Fresh mineral resource,” with an expected production timeline until 2026.
But the firm soon recognized the complexity, as well as the cashflow limitations, going into the first phase. It now plans to extend the economic viability for another quarter.
“Unfortunately, we expect a 12–18-month gap in production as we seek formal approval to mine the Fresh mineral resource,” acting CEO Mike Spreadborough said in a statement.
The firm’s shares fell 26% on the day following the announcement.
He added that during this hiatus, the firm plans to focus on “core strategic exploration programs across the company’s 11,000 square kilometres of premium Pilbara tenure.”
On phase two, the firm plans to complete the feasibility study for Beatons Creek by mid-Q4. Once it secures approval, the firm plans to do a “12-month drill out of the known Fresh mineral resource.”
The results from this phase are said to “play a critical role in executing the long-term vision at Nullagine.”
Prior to the pause, the mining firm expects a 9 – 11 koz of gold production in Q3 2022 from Beatons Creek and the Golden Eagle mill, “with an additional 1 koz gold expected to be produced in Q4 2022 as part of inventory draw down.”
Novo Resources last traded at $0.45 on the TSX, down 26.23% on the day.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
