Novo Resources (ASX: NVO) has bolstered its financial position with the sale of 38% of the company’s holding in San Cristobal Mining for gross proceeds of around $11.5 million.
The sale leaves Novo with a strong balance sheet, including cash of $16.7 million and investments of approximately $44.6m.
Novo’s remaining shareholding in San Cristobal has an estimated value of $19m.
Acting chief executive officer Mike Spreadborough said the funds received from the sale will support Novo’s current exploration programs across Western Australia and Victoria and enable the company to focus on identifying additional exploration opportunities.
The funds will also be used to repay the first portion of the deferred $3m consideration owed to IMC Holdings, due in late December 2024.
The outstanding amount owing to IMC following this will be $12.6m, repayable by 2026 with early repayment options.
“This is an excellent outcome for the company and our shareholders,” Mr Spreadborough said.
“With a cash balance of $16.7m, we are well positioned to continue advancing our exploration plans for 2025.”
“Furthermore, we will continue to progress work to identify value-accretive exploration opportunities to enhance our exploration portfolio.”
The San Cristobal share sale is expected to result in capital gains tax of $1.4m payable in Q1 2025.
The San Cristobal deal follows the company’s success in selling its remaining interest in the Quartz Hill joint venture (JV).
Austroid Australia acquired the remaining 20% of the JV, along with Novo’s 100% interest in gold and silver rights for $850,000.
Mr Spreadborough said that transaction aligned with Novo’s strategy to focus on its gold exploration in the Pilbara.
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