PERTH (miningweekly.com) – Canada’s Kirkland Lake Gold has invested C$56-million through a private placement in fellow-listed Novo Resources.

Kirkland Gold would acquire 14-million units in the Western Australian-focused Novo, at a price of C$4 each, with the units consisting of one common share and one share purchase warrant, that could be exercised at a price of C$6 each within the next 36 months.

Novo chairperson and president Dr Quinton Hennigh said this week that Kirkland Lake, which owns mines in Canada and Australia, was a good fit for Novo.

“Given the Karratha gold project is still early stage and the Beatons Creek gold project is ramping up to development, this sizeable commitment from Kirkland Gold serves as a strong endorsement of Novo’s potential. 

“Upon closing of this placement, Novo will have approximately C$70-million in its treasury and will be in an exceptionally strong position to move its projects forward,” Hennigh said.

Kirkland Gold president and CEO Tony Makuch said this week that the investment in Novo was an important part of the company’s strategy to grow and enhance the value of its Australian franchise, which currently included large land positions in Victoria and the Northern Territory, and production from its high-grade Fosterville gold mine, in Victoria.

“Investing in Novo will provide our company with exposure to highly prospective exploration targets in the Pilbara region of Western Australia, including the Karratha gold project, where recent exploration results have been very encouraging and suggest that the property may be host to a large gold system with significant potential for profitable, long-life production.

"The investment we are making will support an acceleration of exploration programmes at Karratha and other key projects within Novo's portfolio,” Makuch said.