PERTH (miningweekly.com) – Midtier gold miner Kirkland Lake Gold has entered into an agreement to buy four-million shares in junior miner Novo Resources from Australia-based Artemis Resources in a A$20.7-million transaction.
Kirkland Lake currently holds more than 25.8-million shares and 14-million Novo common share purchase warrants, representing a 16.33% undiluted interest and about 23.14% partially diluted interest in Novo, assuming the exercise of the warrants.
On completion of the Artemis transaction, Kirkland Lake will hold more than 29.8-million shares and 14-million warrants, representing an 18.86% interest in the outstanding common shares of Novo on an undiluted basis, and a 25.46% of the outstanding shares on a partially diluted basis.
Artemis executive chairperson David Lenigas told shareholders on Friday that the A$20-million deal would significantly boost the company’s cash reserves without diluting shareholders.
“Our 50% interest in the exciting Novo/Artemis joint venture (JV), in the Karratha area, remains unchanged and we are well funded to continue paying our share of the JV expenses.”
Lenigas noted that the decision by Kirkland Lake to increase its position in Novo was further evidence of the strength in the conglomerate and paleo placer gold story.
Kirkland Lake said that the additional shares in Novo were being acquired for investment purposes, with the company flagging the possible acquisition of further securities in either the open market or through private acquisitions, subject to the receipt of the necessary approvals.
Novo holds gold tenements in Western Australia, and has the right to earn a 70% interest in the Pilbara gold project, from the Creasy group. The company’s current focus is the Beatons Creek and Marble Bar gold projects.