Novo Resources and SQM to Explore Lithium-Nickel Deposits in Australia

Novo Resources (ASX: NVO) (TSX: NVO) disclosed on Monday its initiation of a strategic joint venture with Chile's SQM, the world's second-largest lithium miner, aimed at advancing critical minerals exploration endeavors in Australia.

Currently, Novo possesses an extensive land package covering approximately 9,000 square kilometers in the Pilbara region of Western Australia, with its primary asset being the Nullagine gold project. The Nullagine gold project boasts over 3 million tonnes of indicated resources, grading 2.4 grams per tonne, amounting to 234,000 ounces of contained gold.

The collaboration with SQM pertains to five of Novo's promising lithium and nickel exploration tenements situated in West Pilbara. The resulting joint venture will adopt the name Harding Battery Metals, chosen to underscore the significance of the Harding River in the region, as outlined by Novo.

As part of the agreement, SQM is set to pay Novo A$10 million, securing a 75% interest in the specified tenements. Additionally, SQM retains a 12-month option for additional exploration tenements held by Novo in West Pilbara. Novo, in turn, will maintain a 25% interest in the joint venture, while retaining full ownership (100%) of the mineral rights pertaining to gold, silver, PGE (platinum group elements), copper, lead, and zinc in the region.

The 25% interest held by Novo will be carried by SQM until a decision to mine is reached by the participants of the Harding Battery Metals joint venture. Furthermore, Novo is entitled to a contingent success payment based on the lithium content within a JORC-compliant ore reserve, contingent upon the completion of a feasibility study.

This collaboration with SQM marks a significant milestone for Novo Resources, providing the company with strategic positioning in the realm of battery metals exploration. The joint venture encompasses a set of tenements located in proximity to Azure Minerals' Andover lithium-nickel project and Artemis Resources' Carlow Castle gold-copper-cobalt project. Mike Spreadborough, acting CEO of Novo, emphasized the importance of SQM's active engagement in the Western Australian lithium sector and expressed optimism about the potential for battery metals and gold in the region.

Novo Resources experienced a notable surge in its stock value on the Australian exchange, with shares trading 15.4% higher late Monday afternoon. The market capitalization of Novo Resources reached A$298 million ($199.6 million), reflecting positive investor sentiment and confidence in the strategic collaboration with SQM. This joint venture positions Novo Resources to play a key role in the evolving landscape of critical minerals exploration, aligning with the growing importance of battery metals in the global market.