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Wednesday, April 13, 2022 - 13:30:44
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Mining News Pro - Western Australia-focused gold producer Novo Resources (TSX: NVO) has agreed to sell its entire stake in New Found Gold, consisting of 15 million shares or about 9% of NFG’s share capital, to a corporation controlled by Canadian mining investor Eric Sprott.
Pursuant to arm’s-length negotiations, Novo will receive total consideration of C$125.9 million (about $100m), representing a 9.3% premium to NFG’s stock price of C$7.68 as of market close on April 11, 2022.
The share sale will be conducted in two tranches. The first tranche will consist of 8.25 million NFG shares priced at C$8.35 for gross proceeds of C$68.9 million, and is scheduled for completion on April 27. The second tranche totals 6.75 million NFG shares priced at C$8.45 for gross proceeds of C$57 million, and is scheduled to settle on August 5.
Proceeds of the NFG share sale will be used by Novo to advance its exploration efforts across the Pilbara and Victoria, and to expedite a feasibility study on the Fresh component of its Beatons Creek project in Nullagine, Western Australia.
“Novo has always considered its sizeable investment portfolio as a means to fund growth expenditure,” Mike Spreadborough, executive co-chairman of Novo, said in a news release.
“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.”
The transaction will also free Novo of its debt with Sprott Private Resource Lending II, allowing it to repay its C$50.5 million ($40m) senior secured credit facility with Sprott upon completion.
For Sprott, his shareholding in NFG will expand to 51.6 million common shares, or 31.4% of the its outstanding shares, once the transaction is completed.
NFG’s flagship asset is the 100%-owned Queensway project located 15 kilometres west of Gander, Newfoundland, where it is currently conducting a 400,000-metre drilling campaign.
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https://www.miningnews.ir/En/News/621057
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