Would-be miner Nova Minerals (ASX:NVA) has sold 31% of its stake in Snow Lake Resources to finance upcoming work on the 9.6 million ounce Estelle gold project in Alaska.
The company parted with 3 million shares of Snow Lake at a price of US$6 (AU$8) each in an underwritten secondary offering to raise proceeds of US$18 million (AU$24 million) before fresh.
The sale was completed this morning and reduced Nova’s stake in Snow Lake to 6.6 million shares, or approximately 37% of total shares issued. Funds should be received overnight.
Nova chief executive Christopher Gerteisen said the Snow Lake divestiture will fund an aggressive drilling campaign and associated resource studies to accelerate the Estelle project.
“This funding represents another significant milestone for the company and exemplifies our strict capital management strategy of identifying and capturing strategic investments at lower cost, growing them over time, and then monetizing them to fund our path to production at the Estelle gold project, while minimizing dilution to Nova shareholders and keeping debt off our balance sheet,” he said.
With $25 million in cash reserves, Gerteisen confirmed that 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 drill rigs to support exploration of 19 other prospects along the broader Estelle gold trend.
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 has already encountered a 132m strike at 10.1 grams per tonne gold .
This hole returned an overall average grade of 3.5 g/t gold over 400 m from surface in the mineralized zone and the results will be included in a phase two scoping study to be delivered later this year.
“We look forward to bringing the rigs back to the RPM deposit shortly, weather permitting,” Gerteisen said.
“The RPM South zone also shows tremendous potential, and this zone will be another priority for the company to drill this year as it seeks to significantly increase the resources at RPM.”
Gerteisen said Nova’s exploration would focus on the RPM South area (which is believed to have a much larger surface footprint based on rock chip sampling and geological observations) and more over the wider Korbel Valley.
The 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 planned for next year.
Exploration programs will also continue on the broader Estelle gold trend, including the new “promising” Muddy Creek prospect.
Blocking of the subscriber
Nova has agreed to extend the underwriter’s lock-in on the remaining shares through March 21, 2023, underscoring 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 at 1% indicated lithium oxide and 1.97 Mt at 0.98% inferred.
Snow Lake is undertaking expansion drilling to significantly increase resource size and confidence.
The lithium mine is expected to be fully renewable and sustainable, providing a fully traceable, carbon-neutral and safe product for the electric vehicle and battery market in North America.