Artemis Resources (ASX: ARV) emerged from a trading halt this morning with news it has sold its 4 million shares in Pilbara-focused conglomerate gold explorer Novo Resources (TSXV: NVO) to Kirkland Lake Gold (ASX: KLA) for more than A$20 million.
The sale values Novo at A$5 per share, which closed trade on the Toronto Venture Exchange yesterday at C$5.30 (A$5.09) per share. Novo’s share price has been on a roller coaster since mid-last year when it unearthed conglomerate gold with Artemis Resources at the duo’s jointly owned Purdy’s Reward project in Western Australia’s Pilbara.
Multiple more conglomerate discoveries in region sparked a mini gold rush with Novo, Artemis Resources and other explorers racing to peg up ground and investors throwing their money at the stock.
Novo’s share price shot up to C$8.83 (A$8.49) during the height of the frenzy before plummeting to C$2.61 (A$2.51) in mid-January on news the gold mineralisation wasn’t as easy to prove up as first thought.
Commenting on its Novo divestment, Artemis Resources executive chairman David Lenigas said the A$20 million deal would “significantly” boost Artemis’ cash reserves without diluting shareholders.
“Our 50% interest in the exciting Novo/Artemis Resources joint venture in the Karratha area remains unchanged and we are well-funded to continue paying our share of joint venture expenses.
“Artemis Resources believes that the decision by Kirkland Lake Gold to increase its position in Novo is further evidence of the strength in the conglomerate gold and paleo placer gold story,” Mr Lenigas added.
What Artemis Resources and Novo advocate is the potential for the watermelon seed-shaped gold nuggets found in the Pilbara to be similar to the world’s largest gold deposit in South Africa, which also hosts conglomerate-style, coarse, watermelon seed-shaped nuggets.
South Africa’s Witwatersrand reef holds the world’s largest known gold reserves and has produced more than 1.5 billion ounces of the precious metal, with much more to come.
Investor sentiment on the Witwatersrand theory has been divided. However, market chatter today has many shareholders speculating that Novo is about to fast-track project development in the region and joint venture partner Artemis Resources needs the cash to fund its share of the costs.
By early afternoon trade, Artemis Resources’ share price remained in the green – up more than 2% to A$0.195 after peaking at A$0.20 after the news was released.