General Chat, page-7012

Published by Axinocapital:

November 6, 2023

Strategic review of the Estelle gold project underway

There are numerous parameters on the Estelle gold project that greatly influence the economics of the planned gold mining. Nova Minerals will examine its impact thoroughly as part of a strategic review over the next few months.

The current high price of gold favors properties that, like Nova Minerals Limited's (ASX: NVA, FSE: QM3) Estelle gold project, are characterized by large quantities of ore with comparatively low gold grades. For this reason, Nova Minerals will focus its activities over the next few months on the strategic review of the project's fundamental assumptions. All parameters should be checked again and critically examined with the aim of bringing the Estelle gold project into production more quickly and keeping the initial capital requirement as low as possible in order to minimize the expected dilution for investors.

Taking a step back every now and then and looking at things from a slightly greater distance is very helpful because it directs your focus more closely to the aspects that are particularly important for the success of a plan. Nova Minerals also took such a step with the strategic review of the Estelle gold project initiated at the end of August. The main objective of the strategic review is to bring the Estelle Gold Project into production firstly as quickly as possible and secondly with as low a risk profile as possible. To make this plan a success, Nova Minerals has hired two leading mining and metallurgical engineers, METS Engineering in Australia and Rough Stock Mining Services in Alaska, to assist the Board in the review.

Nova Minerals has three main key objectives

Rough Stock Mining Services was also commissioned to prepare a report in accordance with SK-1300 standards to advance the potential listing of Nova Minerals shares on a major US stock exchange. At its core, the strategic review aims to achieve three key objectives. The company's first goal is to significantly improve the initial cost of capital. It is important to reduce it in order to provide the necessary basis for the second goal of taking a faster route to commercial production on Estelle. For Nova Minerals shareholders, this would result in a significant reduction in the expected dilution. Minimizing them while accelerating work on the Prefeasibility Study (PFS) is the third goal. In order to achieve these objectives, the strategic review will focus on the following: First, an audit of the current processing flow will be initiated with a view to the desired reduction in initial capital costs. The focus is on increasing yield and maximizing the value for every ton that goes through the system.

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From the pit slope to the heap leaching – all parameters should be optimized

Test work conducted at the PFS level will explore various options and opportunities for improvement, including the collection of material currently in stockpile or waste. Geotechnical studies, in conjunction with blasting methods, will examine how the design of the mine slope can be improved and how the mined material can be linked to the plan and potential requirements for a heap leach. The possible system options should also be examined in detail. One of them is the question of what the “right” size is for starting gold production. On the one hand, it is important to minimize capital costs and at the same time to generate enough cash flow to finance the further expansion of the project. As part of the later expansion, a larger processing plant and an ore sorter could then be built. The latter are able to compress the ore by a factor of 10 to up to 6 g/t gold. The decisive factor for the Estelle gold project will therefore be not only when gold production begins, but also at what production rate gold mining is started before gold production is then ramped up to the preferred steady state of more than 200,000 ounces of gold per year.

All the necessary qualifications are available in the company

Within the questions to be clarified, energy supply plays a key role. What needs to be clarified are the various energy options for early commissioning and operation, including the use of low-emissions diesel generators, such as the new Cat® 3516C-HD diesel generator set, which offers highly efficient fuel consumption and lower emissions. Upon completion of the strategic review process, Nova Minerals will have multiple sources of financing with minimal dilution to shareholders. For this reason, completing the strategic review and subsequent feasibility study is currently the company's highest priority. Financially, Nova Minerals is so well positioned that the upcoming study work can be carried out and completed. Rodrigo Pasqua has developed a variety of different mining projects. He currently supports Nova Minerals as an independent director and has overseen recent studies and discussions on the future of the project. He knows from experience that a variety of different qualifications must be present in order to make the jump from developer to producer. At Nova Minerals, these qualifications are already present on the board and all directors are aware of the fact that the current fairly high gold price, given the low gold grades over large stretches of Estelle, will have a strong impact on the economics of the project. It is therefore important to use it. The best way to do this is to bring the Estelle Gold Project into production as quickly as possible. Nova Minerals is fully committed to this goal with passion and vigor.