Novo to sell stake in New Found Gold to Eric Sprott–controlled company for C$125.9 million
(Kitco News) - Novo Resources (TSX: NVO) said today that it has agreed to sell its 15 million New Found shares to a corporation controlled by Eric Sprott for gross proceeds of approximately C$125.9 million representing an aggregate 9.3% premium to market.
According to the company’s statement, completion of the transaction will leave Novo debt-free and with a pro-forma cash balance of almost C$97 million, with funds providing Novo with the flexibility to aggressively advance exploration efforts across the Pilbara and Victoria, while expediting a Feasibility Study on the Fresh component of the company’s Beatons Creek project in Nullagine, Western Australia.
“Novo has always considered its sizeable investment portfolio as a means to fund growth expenditure,” commented Executive Co-Chairman Mike Spreadborough. “The sale of our New Found holding at a premium of 9.3% to the closing price of C$7.68 is an excellent result and allows Novo to deleverage our balance sheet, continue to focus on optimizing operations at Beatons Creek and aggressively accelerate growth and expansion plans across Western Australia and Victoria.”
Novo operates its flagship Beatons Creek project while exploring and developing its prospective land package covering approximately 12,500 square kilometres in the Pilbara region of Western Australia.