With its recently acquired Ashburton gold project in Western Australia now gaining greater focus and 10 priority targets in Victoria, Kalamazoo Resources (ASX: KZR) has granted Canada-listed Novo Resources Corporation an option to earn up to 70% of its Queens project in Victoria.
Queens was added to Kalamazoo’s Castlemaine gold project in July. It is immediately adjacent to another project optioned by Novo.
Novo will pay Kalamazoo with 24,883 new shares for the six-month option and grant another $2 million worth of its shares by exercising the option to earn a 50% interest in Queens.
The Canadian company can then move to 70% by spending $5 million over five years on exploration and forming a joint venture with Kalamazoo.
Second option taken by Novo in Victoria
The Queens project spans the “highly prospective” Taradale fault and surrounds the Malmsbury gold project owned by GBM Resources (ASX: GBZ) which is also subject to a joint venture option with Novo Resources.
Novo’s focus to date has been primarily to explore and develop gold projects in WA’s Pilbara region. The company has amassed a land package covering approximately 13,000sq km with varying ownership interests.
Novo’s present focus is its Egina gold project, where it is currently exploring under a joint venture with Japan’s Sumitomo Corporation.
Earlier this week, Novo sold its Blue Spec gold-antimony project in the Pilbara to Calidus Resources (ASX: CAI) for $19.5 million.
‘Fantastic’ opportunity to merge knowledge
Kalamazoo chairman and chief executive officer Luke Reinehr said there are obvious synergies that can be created between Queens and the adjacent Malmsbury project.
Novo president and chairman Dr Quinton Hennigh will be part of Kalamazoo’s technical team.
“This is a fantastic opportunity to merge both our technical and regional knowledge to hopefully unlock the potential of the exciting Queens project,” Mr Reinehr said.
“The $2 million in Novo shares will further strengthen our treasury and the likely farm-in expenditure by Novo of $5 million will ensure that the Queens project receives the exploration attention it deserves,” he added.
Kalamazoo will in early October begin the next diamond drilling program at the Castlemaine project, targeting the Lightning prospect.
Castlemaine is located in the Bendigo zone of central Victoria and covers 310sq km.
Queens includes part of the historic Malmsbury goldfield, which contains numerous historical gold mine workings.
“Like the rest of the Castlemaine gold project, the Queens project is considered under-explored as it has not been subjected to modern exploration techniques and only limited shallow drilling,” the company said.