Japan’s Sumitomo farms into Pioneer Resources and Novo’s Kangan gold project
Sumitomo Corporation is investing US$30 million on exploring Novo’s Egina project, which includes Kangan, to earn 40%.
Pioneer Resources (ASX: PIO) and TSXV-listed Novo Resources have attracted the attention of Japan’s major Sumitomo Corporation, with the Japanese conglomerate to farm-in to the Kangan gold project in Western Australia’s Pilbara.
Kangan is part of Novo’s Egina asset, which is 80km south of Port Hedland and in the heart of conglomerate gold country.
Under Sumitomo’s farm-in contract with Novo, Sumitomo will spend US$30 million on exploring Egina, which includes Novo’s wholly-owned tenements, as well as Pioneer’s Kangan licences and a separate farm-in arrangement with De Grey Mining (ASX: DEG).
After spending US$30 million on exploration over three years, Sumitomo will own 40% of the project.
Meanwhile, the farm-in terms for Pioneer’s Kangan asset comprise Sumitomo and Novo spending $460,000 on exploration over the next 18-months to secure a combined 70% stake in the project.
Novo’s chairman and president Dr Quinton Hennigh has previous referred to Egina as an early stage project with high gold potential.
“Sumitomo, upon conducting their own technical review, has developed a similar opinion,” Dr Hennigh said.
“It is remarkable for an exploration company to team up with a world class finance partner like Sumitomo.”
“With Sumitomo’s financial backing, we aim to quickly advance Egina through exploration and test-extraction phases with the ultimate goal, should results prove favourable, of setting the project on the path to production,” Dr Hennigh explained.
Kangan gold project
The Kangan licences cover 336 square kilometres and host the historical Womerina alluvial workings.
In addition to the gold workings, the project’s eastern-most tenement abuts the Wodgina lithium mine tenements.
Novo is one of the central players in the Pilbara gold rush that kicked-off in mid-2017 with multiple explorers pegging up land in the region.
Multiple theories abound regarding the conglomerate-style gold found in the region, with many likening the mineralisation to that of the world’s largest gold deposit Witwatersrand in South Africa.
Pioneer’s managing director David Crook said he looked forward receiving results as exploration at Egina and Kangan advances.