Nova Minerals divests partial stake in Snow Lake Resources for $24m
Nova’s 57.52%-owned Snow Lake Resources aims to become the world’s first lithium mine to achieve ‘B Corporation’ status.
Aspiring miner Nova Minerals (ASX: NVA) has divested 31% of its stake in Snow Lake Resources to fund upcoming work at the 9.6 million ounce Estelle gold project in Alaska.
The company has parted with 3 million Snow Lake shares priced at US$6 (A$8) each in an underwritten secondary offering to raise proceeds of US$18 million (A$24 million) before costs.
The sale closed this morning, and has reduced Nova’s interest in Snow Lake to 6.6 million shares or approximately 37% of total shares on issue. Funds are expected to be received overnight.
Aggressive campaign
Nova chief executive officer Christopher Gerteisen said the Snow Lake divestment will fund an aggressive drilling campaign and associated resource studies to fast-track the Estelle project.
“This funding represents another milestone achievement for the company and illustrates our strict capital management strategy, of identifying and entering strategic investments cheaply, growing them over time, and then monetising them to fund our path to production at the Estelle gold project, all while minimising dilution to Nova shareholders and keeping debt off our balance sheet,” he said.
With $25 million in cash reserves, Mr Gerteisen confirmed Nova is now fully-funded to complete its planned drilling and studies at Korbel and RPM through to pre-feasibility studies.
The company can also afford to add drilling rigs to support exploration of 19 other prospects along the wider Estelle gold trend.
Increasing resources
Nova will focus on increasing the size and confidence of the Korbel Main deposit and the high-grade RPM North target at Estelle, where it previously encountered a hit of 132m at 10.1 grams per tonne gold.
That hole returned an overall average grade of 3.5g/t gold over 400m from surface within the mineralised zone and the results will be included in a phase two scoping study to be delivered later this year.
“We are eager to get the drill rigs back out to the RPM deposit again shortly, weather permitting,” Mr Gerteisen said.
“The RPM South zone is also showing massive potential of its own, and this area will be another priority for the company to drill this year as it looks to substantially increase the resource at RPM.”
Drilling program
Mr Gerteisen said Nova’s exploration would take in the RPM South zone (which is believed to exhibit a much larger surface footprint based on rock chip sampling and geological observations) and more of the wider Korbel Valley.
Drilling will test the Isabella zone, Blocks C and D, and the “very encouraging” Cathedral zone, which returned rock chip samples of up to 114g/t in mid-2020.
Resources derived from these additional zones will be included in a pre-feasibility study currently underway and scheduled for completion next year.
Exploration programs will also continue across the wider Estelle gold trend including on the new and “promising” Muddy Creek prospect.
Underwriter lock-up
Nova agreed to extend the underwriter lock-up on the remaining shares until 21 March 2023, highlighting a long-term commitment to Snow Lake as it advances development of its Thompson Brothers lithium project in Canada.
The project has a mineral resource estimate of 9.08 million tonnes grading 1% lithium oxide indicated and 1.97Mt at 0.98% inferred.
Snow Lake is undertaking expansion drilling to significantly increase the resource size and confidence.
The lithium mine is expected to be fully renewable and sustainable, delivering a completely traceable, carbon neutral and zero harm product to the electric vehicle and battery market in North America.