JOHANNESBURG (miningweekly.com) – Dual-listed Kirkland Lake Gold has entered into a term sheet agreement with Novo Resources to acquire 14-million units at a price of C$4 apiece, totalling C$56-million.
Kirkland, which already owns about 9.2% of the issued and outstanding common shares of Novo, is expected to own around 18.2% of Novo – 25.5% on a partially diluted basis – by financing end.
“Our investment in Novo is an important part of our strategy to grow and enhance the value of our Australian franchise and production from our high-grade Fosterville gold mine,” said Kirkland president and CEO Tony Makuch.
The investment is expected to open further exposure to highly prospective exploration targets in the Pilbara region of Western Australia, including the Karratha gold project, where recent exploration results have been positive, with indications that the property may be host to a large gold system with significant potential for profitable, long-life production.
The midtier gold producer’s investment will also support an acceleration of exploration programmes at Karratha and other key projects within Novo's portfolio.
The closing of the financing, which is expected to occur on September 15, remains subject to the necessary regulatory approvals.
Each unit comprises one common share and one common share purchase warrant, entitling Kirkland to buy one additional common share of Novo at a price of $6 a share for a period of 36 months from the closing date.