Novo Reports Q2 2022 Financial Results

Novo Reports Q2 2022 Financial Results

 

Novo Resources Corp. ( "Novo" or the "Company" ) (TSX: NVO, NVO.WT & NVO.WT.A) (OTCQX: NSRPF) reports its financial results for the six-month period ended June 30, 2022. All amounts are expressed in Canadian dollars, unless otherwise noted.

 

This news release should be read together with Novo's management's discussion and analysis (the " MD&A ") and condensed interim consolidated financial statements (the " Financial Statements ") for the six-month period ended June 30, 2022 (" H1 2022 ") which are available under Novo's profile on SEDAR (www.sedar.com). The three-month period ended June 30, 2022 is referred to as " Q2 2022 " in this news release.

 

   Q2 2022 Highlights   

 
  • Revenue of $29.7 million from the sale of 12,378 ounces of gold from the Company's Beatons Creek gold project (the " Beatons Creek Project ") in Q2 2022 at an average realized price 1 of $2,400 / A$2,635 / US$1,880 per ounce, and revenue of $61.6 million from the sale of 25,742 ounces of gold in H1 2022 in line with revised guidance 2 and at an average realized price 1 of $2,394 / A$2,618 / US$1,883
  •  
  • Cash and cash equivalents of $74.9 million as at June 30, 2022
  •  
  • Aggregate investment portfolio balance of $57.9 million 3 , which included Novo's remaining 6.75 million shares   of New Found Gold Corp. (TSXV: NFG) (" New Found ") with a fair value of $38.9 million ($5.77 per share) as at June 30, 2022
  •  
  • Novo sold 8.25 million shares of New Found at $8.35 per share for gross proceeds of $68.9 million during Q2 2022 (" Tranche 1 "), and completed the sale of its remaining 6.75 million shares of New Found at $8.45 per share for gross proceeds of $57.0 million subsequent to June 30, 2022 4 (" Tranche 2 "). A financial asset totaling $16.3 million was recognized as at June 30, 2022 and represents the Tranche 2 forward contract at the agreed price of $8.45 per New Found share
  •  
  • Continuing focus on high-priority exploration targets, with exploration spend of $11.4 million in Q2 2022 and $15.3 million in H1 2022, including $4.6 million on the Beatons Creek Project Fresh drill-out and feasibility study  5 which is expected to be completed in late 2022
  •  
  • $0.4 million was invested in capital projects during Q2 2022, and $2.3 million was invested in capital projects in H1 2022
  •  
  • Earnings before interest, taxes, depreciation and amortization (" EBITDA ") 1 of $(3.5) million and adjusted EBITDA 1 of $(21.8) million in Q2 2022, and EBITDA 1 of $(6.3) million and adjusted EBITDA 1 of $(25.3) million in H1 2022
  •  
  • Total cash costs 1 of $2,598 / A$2,852 / US$2,035 per ounce sold and all-in sustaining costs (" AISC ") 1 of $3,198 / A$3,510 / US$2,505 per ounce sold in Q2 2022, and total cash costs 1 of $2,307 / A$2,523 / US$1,815 per ounce sold and AISC 1 of $2,930 / A$3,204 / US$2,304 per ounce sold in H1 2022
  •  
  • Conversion of Sumitomo Corporation's notional interest in Novo's Egina project in the Pilbara region of Western Australia to an equity stake in Novo comprised of 3,382,550 Novo common shares representing a 1.36% shareholder on the date of issuance, with all shares subject to orderly sale restrictions and a twelve-month contractual hold period expiring on April 21, 2023 6
  •  
  • Production to pause at the Beatons Creek Project and the Golden Eagle processing facility (" Golden Eagle Plant "), with mining of the Oxide mineral resource ending in Q3 2022 followed by a phased wind-down of operational activities finishing by the end of October 2022 7
  •  

   Financial Highlights   

 
                                                                                                                                                                                                                                                                           
  In thousands of CAD,       For the three months ended     For the six months ended  
  except where noted     June 30, 2022    June 30, 2021    June 30, 2022    June 30, 2021  
Gold sold   Oz Au    12,378    13,958    25,742    17,456  
            
Average realized price 1   $/oz    2,400    2,270    2,394    2,259  
Average realized price 1   AUD$/oz    2,635    2,401    2,618    2,348  
Average realized price 1   USD$/oz    1,880    1,849    1,883    1,811  
            
Total revenue   $    29,685    31,704    61,560    39,422  
Cost of goods sold   $    (42,524    )   (31,704 )   (79,899    )   (39,422 )
General and exploration expenditure   $    (14,904    )   (9,697 )   (22,943    )   (5,248 )
Other income, net   $    18,283    2,915    18,953    1,006  
Finance items   $    (7,157    )   (9,738 )   (7,220    )   (11,164 )
Income tax expense   $    (2,198    )   -    (2,198    )   -  
Net loss for the period after tax   $    (18,815    )   (16,520 )   (31,747    )   (15,406 )
Basic and diluted profit / (loss) per common share   $/share    (0.08    )   (0.07 )   (0.13    )   (0.07 )
            
EBITDA 1   $    (3,534    )   (3,099 )   (6,321    )   2,862  
Adjusted EBITDA 1   $    (21,817    )   (6,014 )   (25,274    )   1,856  
            
Adjusted loss 1   $    (37,098    )   (19,244 )   (50,700    )   (31,161 )
Adjusted loss per common share 1   $/share    (0.15    )   (0.08 )   (0.20    )   (0.13 )
            
Total cash costs 1   $/oz    2,598    2,003    2,307    1,846  
Total cash costs 1   AUD$/oz    2,852    2,118    2,523    1,919  
Total cash costs 1   USD$/oz    2,035    1,631    1,815    1,481  
            
AISC 1   $/oz    3,198    2,604    2,930    2,771  
AISC 1   AUD$/oz    3,510    2,753    3,204    2,880  
AISC 1   USD$/oz    2,505    2,120    2,304    2,222  
 

Novo generated revenue of $29.7 million in Q2 2022 from the sale of 12,378 ounces of gold at an average realized price 1 of $2,400 / A$2,852 / US$1,880 per ounce, and $61.6 million in H1 2022 from the sale of 25,742 ounces of gold at an average realized price 1 of $2,394 / A$2,523 / US$1,883 per ounce in Q2 2022.

 

398,830 tonnes of mineralized material were processed through the Golden Eagle Plant in Q2 2022 equating to an annual processing rate of approximately 1.6 million tonnes per annum, and 793,212 tonnes of mineralized material were processed in H1 2022.

 

Processed material had an average head grade of 1.02 g/t Au with average recovery of 93.5% resulting in 12,610 ounces of gold produced in Q2 2022, and an average head grade of 1.09 g/t Au with average recovery of 92.5% resulting in 25,988 ounces of gold produced 8 in H1 2022.

 

The Company generated a net loss of $(18.8) million or $(0.08) per share in Q2 2022 and a net loss of $(31.7) million or $(0.13) per share in H1 2022.

 

EBITDA 1 totaled $(3.5) million in Q2 2022 ($(6.3) million in H1 2022), and adjusted EBITDA 1 totaled $(21.8) million in Q2 2022 ($(25.3) million in H1 2022).

 

Total cash costs 1 were $2,598 / A$2,852 / US$2,035 in Q2 2022 ($2,307 / A$2,523 / US$ 1,815 in H1 2022), and AISC 1 was $3,198 / A$3,510 / US$2,505 in Q2 2022 ($2,930 / A$3,204 / US$2,304 in H1 2022). Total cash costs 1 and AISC 1 are heavily influenced by the number of ounces of gold sold and are higher than anticipated due to, among other things, a lower production base than originally forecast.

 

Adjusted earnings (losses) 1 were $(37.1) million or $(0.15) per share in Q2 2022 and $(50.7) million or $(0.20) per share in H1 2022. Adjustments to net earnings (losses) for the period include minor non-operational income, non-cash foreign exchange gains, and non-cash gains resulting from the movement in the fair value of certain marketable securities.

 

The Company is committed to aggressively advancing its highly prospective exploration portfolio and devoted $11.4 million to such efforts in H1 2022. In addition, the Company is advancing the Beatons Creek project Fresh feasibility study and incurred $4.6 million through H1 2022, with an expected completion date in Q4 2022 5 .

 

   Financial Position   

 
                                                        
  In thousands of CAD,    June 30, 2022    December 31, 2021    December 31, 2020  
  except where noted    $'000    $'000    $'000  
Cash   74,737   32,345 40,494
Short-term investments   147   108 195
Working capital 1   62,565   3,925 14,071
Credit Facility adjusted working capital (USD) 1   96,025   23,332 25,089
Marketable securities 1   57,905   156,209 18,770
Available liquidity 1   144,225   102,868 59,623
Total assets   385,322   462,682 456,408
Current liabilities excluding current portion of financial liabilities   18,454   19,805 12,083
Non-current liabilities excluding non-current portion of financial liabilities   33,248   36,342 28,615
Financial liabilities (current and non-current)   74,781   75,608 86,271
Total liabilities   132,795   148,420 126,969
Shareholders' equity   252,527   314,262 329,439
 

The Company held cash and cash equivalents of $74.9 million as at June 30, 2022, with a working capital 1 balance of $62.6 million. Tranche 1 settled for gross proceeds $68.9 million during Q2 2022. The Company's remaining 6.75 million shares, which represent a 4.02% undiluted stake in New Found, were classified as a current financial asset as at June 30, 2022 pursuant to Tranche 2 sale plans which settled in August 2022 and provided Novo with additional gross proceeds of $57.0 million 3 .

 

During Q2 2022, Sumitomo Corporation of Tokyo, Japan elected to convert its interest under the farmin and joint venture arrangement (the " Agreement ") over the Company's Egina project, and Novo elected to reimburse Sumitomo through the issuance of 3,382,550 common shares 9 with a fair value of $3.2 million based on the Company's closing price on April 21, 2022 of $0.96 as compared to Sumitomo's aggregate funding of A$7.8 million (approximately $7.2 million) through April 21, 2022.

 

Tax payable of $1.5 million represents the estimated capital gains tax payable in Canada on Tranche 1 after application of Novo's available Canadian tax losses. Deferred tax liabilities represent the Company's estimate of capital gains tax payable on the fair value of the Company's marketable securities. Approximately $6.4 million of this deferred tax liability relates to the capital gains tax payable on Tranche 2 and will be reclassified to tax payable during Q3 2022. The Company is in the process of determining its aggregate capital gains tax liability and intends to apply available tax losses in order to decrease any amount payable.

 

Sprott Resource Lending Corp. (" Sprott "), Novo's senior secured lender, waived any event of default which was triggered by Novo's recent operational pause at the Beatons Creek Project 7 in anticipation of full repayment of the US$40 million (currently approximately C$51.1 million) senior secured credit facility (the " Sprott Facility ") subsequent to completion of Tranche 2. Repayment of the Sprott Facility was completed on August 12, 2022 10 .

 

   Outlook   

 

The Company expects to produce 9 – 11 koz Au from the Beatons Creek Project in Q3 2022, with drawdown of inventory expected to add an additional 1 koz Au in Q4 2022 as Phase One Oxide operations at the Beatons Creek Project wind down through October 2022 11 . This forecast is subject to the Company's ability to manage the impact to operations from COVID-19.

 

   Non-IFRS Measures   

 

Certain non-IFRS measures have been included in this news release. The Company believes that these measures, in addition to measures prepared in accordance with International Financial Reporting Standards (" IFRS "), provide readers with an improved ability to evaluate its underlying performance and to compare it to information reported by other companies. The non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to similar measures presented by other companies.

 

  Average Realized Price  

 

The Company uses the average realized price per ounce of gold sold to better understand the gold price and, once applicable, cash margin realized throughout a period.

 

Average realized price is calculated as revenue from contracts with customers plus treatment and refinery charges included in dore revenue less silver revenue divided by gold ounces sold.

 

The following table reconciles this non-IFRS measure to the most directly comparable IFRS measure disclosed in the Financial Statements and MD&A.

 
                                                                                                                          
  In thousands of CAD,       For the three months ended    For the six months ended  
  except where noted     June 30, 2022    June 30, 2021    June 30, 2022    June 30, 2021  
Revenue from contracts with customers   $    29,685    31,704    61,560    39,422  
Treatment and refining charges   $    69    51    175    98  
  Less: Silver revenue ( Note 17 of the Financial Statements )   $    (43    )   (70 )   (97    )   (89 )
Gold revenue   $    29,711    31,685    61,638    39,431  
Gold sold   oz    12,378    13,958    25,742    17,456  
Average realized price   $/oz    2,400    2,270    2,394    2,259  
            
Foreign exchange rate   CAD:AUD    1.0976    1.0575    1.0935    1.0396  
Average realized price   AUD$/oz    2,635    2,401    2,618    2,348  
            
Foreign exchange rate   CAD:USD    0.7834    0.8144    0.7865    0.8019  
Average realized price   USD$/oz    1,880    1,849    1,883    1,811  
 

  Total Cash Costs  

 

The Company reports total cash costs on a per gold ounce sold basis. In addition to measures prepared in accordance with IFRS, such as revenue, the Company believes this information can be used to evaluate its performance and ability to generate operating earnings and cash flow from its mining operations. The Company uses this metric to monitor operating cost performance.

 

Total cash costs include cost of sales such as mining, processing, mine general and administrative costs, royalties, selling costs, and changes in inventories less non-cash depreciation and depletion, write-down of inventories and site share-based payments where applicable, and silver revenue divided by gold ounces sold to arrive at total cash costs per ounce of gold sold.

 

The following table reconciles this non-IFRS measure to the most directly comparable IFRS measure disclosed in the Financial Statements and MD&A.

 
                                                                                                                                    
  In thousands of CAD,    For the three months ended    For the six months ended  
  except where noted    June 30, 2022    June 30, 2021    June 30, 2022    June 30, 2021  
Gold sold   Oz Au    12,378    13,958    25,742    17,456  
            
  Total cash cost reconciliation             
Cost of sales   $    42,524    31,704    79,899    39,422  
  Less: Depreciation and depletion*   $    (10,322    )   (3,683 )   (20,404    )   (7,104 )
  Less: Silver Revenue (Note 17 of the Financial Statements)    $    (43    )   (70 )   (97    )   (89 )
Total cash costs   $    32,159    27,951    59,398    32,229  
  Cash costs per oz of gold sold    $/oz    2,598    2,003    2,307    1,846  
        
Foreign exchange rate   CAD:AUD    1.0976    1.0575    1.0935    1.0396  
  Cash costs per oz of gold sold    AUD$/oz    2,852    2,118    2,523    1,919  
        
Foreign exchange rate   CAD:USD    0.7834    0.8144    0.7865    0.8019  
  Cash costs per oz of gold sold    USD$/oz    2,035    1,631    1,815    1,481  
 

  *Depreciation and depletion are reconciled to aggregate depreciation and depletion in the operating adjustments in the condensed interim consolidated statements of cash flows in the Financial Statements.  

 

  All-in Sustaining Costs  

 

The Company believes that AISC more fully defines the total costs associated with producing gold. AISC is calculated based on the definitions published by the World Gold Council (" WGC "). The WGC is not a regulatory organization. The Company calculates AISC as the sum of total cash costs (as described above), sustaining capital expenditures (excluding significant projects considered expansionary in nature), accretion on decommissioning and restoration provisions, treatment and refinery charges, payments on lease obligations, site share-based payments where applicable, and corporate administrative costs less any share-based payments directly attributable to exploration and non-operating payments on lease obligations, all divided by gold ounces sold during the period to arrive at a per ounce amount.

 

Other companies may calculate this measure differently as a result of differences in underlying principles and policies applied. Differences may also arise due to a different definition of sustaining versus expansion capital.

 

The following table reconciles this non-IFRS measure to the most directly comparable IFRS measure disclosed in the Financial Statements and MD&A.

 
                                                                                                                                                                                                                     
  In thousands of CAD,    For the three months ended    For the six months ended   
  except where noted    June 30, 2022    June 30, 2021    June 30, 2022    June 30, 2021  
Gold sold   Oz Au    12,378    13,958    25,742    17,456   
             
  All-in sustaining cost reconciliation              
Total cash costs   $    32,159    27,951    59,398    32,229   
Sustaining capital expenditures   $    807    -    2,693    -   
Accretion on rehabilitation provision (Note 21 of the Financial Statements)    $    218    113    363    182   
Treatment and refinery charges   $    69    51    175    98   
Payments on lease obligations (Note 13 of the Financial Statements)    $    2,895    2,698    5,681    4,905   
Less: non-operating payments on lease obligations*   $    (119    )   (156 )   (231    )   (310 )  
Site share-based compensation   $    -    -    -    -   
Corporate administrative costs (Note 19 of the Financial Statements)    $    3,553    7,409    7,554    15,052   
Less: exploration share-based payments**   $    -    (1,724 )   (213    )   (3,792 )  
Total all-in sustaining costs   $    39,582    36,342    75,420    48,364   
  AISC per oz of gold sold    $/oz    3,198    2,604    2,930    2,771   
             
Foreign exchange rate   CAD:AUD    1.0976    1.0575    1.0935    1.0396   
  AISC per oz of gold sold    AUD$/oz    3,510    2,753    3,204    2,880   
             
Foreign exchange rate   CAD:USD    0.7834    0.8144    0.7865    0.8019   
  AISC per oz of gold sold    USD$/oz    2,505    2,120    2,304    2,222   
 

  *The non-operating payments on lease obligations adjustment includes lease amounts which are not directly related to the Company's operations at the Beatons Creek Project. This figure is not separately disclosed in the Financial Statements.  
**Share-based payment expenses directly attributable to the Company's exploration staff are excluded from the calculation of AISC. This figure is not separately disclosed in the Financial Statements and is a subset of the share-based payments expense outlined in Note 19 of the Financial Statements.  

 

  EBITDA  

 

The Company uses EBITDA to better understand its ability to generate liquidity by producing operating cash flow to fund working capital needs, service debt obligations, and fund capital expenditures.

 

EBITDA is defined as net earnings before interest and finance expense/income, current and deferred income tax expenses and depreciation and depletion. EBITDA is also adjusted for non-recurring transactions such as the change in fair value of derivative instruments, foreign exchanges gains and losses, gains and losses on the disposal of assets, impairment, and other income.

 

The following table reconciles this non-IFRS measure to the most directly comparable IFRS measure disclosed in the Financial Statements and MD&A.

 
                                                                                              
  In thousands of CAD,    For the three months ended    For the six months ended  
  except where noted    June 30, 2022    June 30, 2021    June 30, 2022    June 30, 2021  
     $'000    $'000    $'000    $'000  
Net (loss) / profit for the period   (18,815    )   (16,520 )   (31,747    )   (15,406 )
Interest and finance expense   7,340    9,750    7,413    11,184  
Interest and finance income   (183    )   (12 )   (193    )   (20 )
Current income tax expense / (income)   (2,198    )   -    (2,198    )   -  
Deferred income tax expense   -    -    -    -  
Depreciation and depletion*   10,322    3,683    20,404    7,104  
  EBITDA    (3,534    )   (3,099 )   (6,321    )   2,862  
Other (income) / expenses (Note 22 of the Financial Statements)    (18,283    )   (2,915 )   (18,953    )   (1,006 )
  Adjusted EBITDA    (21,817    )   (6,014 )   (25,274    )   1,856  
 

  *Depreciation and depletion is reconciled to aggregate depreciation and depletion in the operating adjustments in the consolidated statements of cash flows in the Financial Statements.  

 

  Adjusted Earnings and Adjusted Basic and Diluted Earnings per Share  

 

The Company uses adjusted earnings and adjusted basic and diluted earnings per share to measure its underlying operating and financial performance.

 

Adjusted earnings are defined as net earnings adjusted to exclude specific items that are significant, but not reflective of the Company's underlying operations, including: foreign exchange (gain) loss, (gain) loss on financial instruments at fair value, impairment, and non-recurring gains and losses on treatment of marketable securities, sale of exploration and evaluation assets, and associated tax impacts. Adjusted basic and diluted earnings per share are calculated using the weighted average number of shares outstanding under the basic and diluted method of earnings per share as determined under IFRS.

 

The following table reconciles this non-IFRS measure to the most directly comparable IFRS measure disclosed in the Financial Statements and MD&A.

 
                                                                                  
  In thousands of CAD,     For the three months ended    For the six months ended  
  except where noted     June 30, 2022    June 30, 2021    June 30, 2022    June 30, 2021  
Basic weighted average shares outstanding    248,541,466    236,525,772    248,293,389    233,849,893  
  Adjusted earnings and adjusted basic earnings per share reconciliation           
Net loss for the period   $    (18,815    )   (16,520 )   (31,747    )   (15,406 )
  Adjusted for:           
Other income (Note 22 of the Financial Statements)    $    (18,283    )   (2,915 )   (18,953    )   (1,006 )
Profit on disposal of exploration asset   $    -    191    -    (14,749 )
Adjusted earnings   $    (37,098    )   (19,244 )   (50,700    )   (31,161 )
  Adjusted basic earnings per share    $/share    (0.15    )   (0.08 )   (0.20    )   (0.13 )
 

  Available Liquidity  

 

The Company believes that available liquidity provides an accurate measure of the Company's ability to liquidate assets in order to satisfy its liabilities. The Company uses this metric to help monitor its risk profile.

 

Available liquidity includes cash, short-term investments, and assets which are readily saleable within the next 12 months, including gold in circuit and stockpiles, receivables, marketable securities (to the extent that an established market exists for such marketable securities, they are free of any long-term trading restrictions, and sufficient historical volume exists to liquidate holdings within 12 months), and gold specimens. The market value of certain marketable securities has been used in the calculation of available liquidity which may not reconcile to the accounting treatment of such marketable securities. Refer to the MD&A and Notes 6 and 11 of the Financial Statements.

 

The following table reconciles this non-IFRS measure to the most directly comparable IFRS measure disclosed in the Financial Statements and MD&A.

 
                                 
   June 30, 2022    December 31, 2021  
   $'000    $'000  
Cash   74,737   32,345
Short-term investments   147   108
Gold in circuit   1,013   788
Stockpiles   6,569   4,732
Receivables   4,418   6,127
Marketable securities   40,987   58,691
Financial asset   16,281   -
Gold specimens   73   77
  Available liquidity    144,225   102,868
 

  Remainder of page intentionally left blank  

 
                                   
     
   June 30, 2022  
   # of shares    Share price    Foreign exchange    Adjusted value  
$'000  
Kalamazoo Resources Limited Ordinary Shares 10,000,000 $ 0.16 0.889   1,422  
GBM Resources Ltd Ordinary Shares 11,363,637 $ 0.06 0.889   617  
New Found Gold Corp Common Shares * 6,750,000 $ 5.77 1   38,948  
        40,987  
 

 

 
                              
   December 31, 2021  
   # of shares    Share price    Foreign exchange    Adjusted value  
$'000  
Kalamazoo Resources Limited Ordinary Shares 10,000,000 $ 0.38 0.942 3,579
GBM Resources Ltd Ordinary Shares 11,363,637 $ 0.12 0.942 1,232
New Found Gold Corp Common Shares * 6,000,000 $ 8.98 1 53,880
       58,691
 

  *The December 31, 2021 figure represents the number of free-trading New Found common shares. The June 30, 2022 figure represents the Company's remaining New Found shares which were committed to be sold pursuant to Tranche 2 which completed on August 5, 2022.  

 

  Working Capital  

 

Working capital is defined as current assets less current liabilities and is used to monitor the Company's liquidity.

 

The following table reconciles this non-IFRS measure to the most directly comparable IFRS measure disclosed in the Financial Statements and MD&A.

 
                    
        June 30, 2022    December 31, 2021  
        $'000    $'000  
Current assets      148,388   49,385
Current liabilities      85,823   45,460
Working capital      62,565   3,925
 

  Sprott Facility Adjusted Working Capital  

 

Sprott Facility adjusted working capital is a derivation of working capital with a series of adjustments as permitted pursuant to the Sprott Facility. The Company uses Sprott Facility adjusted working capital to monitor its compliance against certain covenants within the Sprott Facility.

 

The following table reconciles this non-IFRS measure to the most directly comparable IFRS measure disclosed in the Financial Statements and MD&A.

 
                                           
  In thousands of CAD, except where noted  

   June 30, 2022    December 31, 2021  
   $'000    $'000  
Working capital    $     62,565   3,925
Credit Facility (current)    $     51,544   6,339
Lease liabilities (current)    $     7,987   12,453
Sumitomo funding liability    $     -   5,780
Sumitomo written call option    $     -   1,083
  Sprott Facility working capital    $    122,096   29,580
          
Foreign exchange rate    CAD:USD     0.7865   0.7888
  Sprott Facility working capital     USD$     96,029   23,332
 

  CAUTIONARY STATEMENT  

 

The decision by the Company to produce at the Beatons Creek Project was not based on a feasibility study of mineral reserves demonstrating economic and technical viability and, as a result, there is an increased uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery, including increased risks associated with developing a commercially mineable deposit. Production has not achieved forecast to date. Historically, such projects have a much higher risk of economic and technical failure. There is no guarantee that anticipated production costs will be achieved. Failure to achieve the anticipated production costs would have a material adverse impact on the Company's cash flow and future profitability.

 

The Company cautions that its declaration of commercial production effective October 1, 2021 12 only indicates that the Beatons Creek project was operating at anticipated and sustainable levels and it does not indicate that economic results will be realized.

 

  QP STATEMENT  

 

Dr. Quinton Hennigh (P.Geo.) is the qualified person, as defined under National Instrument 43-101 Standards of Disclosure for Mineral Projects , responsible for, and having reviewed and approved, the technical information contained in this news release. Dr. Hennigh is the non-executive co-chairman and a director of Novo.

 

  ABOUT NOVO  

 

Novo operates its flagship Beatons Creek Project while exploring and developing its prospective land package covering approximately 11,000 square kilometres in the Pilbara region of Western Australia. In addition to the Company's primary focus, Novo seeks to leverage its internal geological expertise to deliver value-accretive opportunities to its shareholders. For more information, please contact Leo Karabelas at (416) 543-3120 or e-mail leo@novoresources.com.

 

On Behalf of the Board of Directors,

 

  Novo Resources Corp.  

 

  "    Michael Spreadborough    "  

 

Michael Spreadborough

 

Executive Co-Chairman & Acting CEO

 

  Forward-looking information  

 

Some statements in this news release contain forward-looking information (within the meaning of Canadian securities legislation) including, without limitation, that the Beatons Creek Project feasibility study is expected to be completed in Q4 2022, that mining of the Oxide mineral resource is expected to end in Q3 2022 followed by a phased wind-down of operational activities finishing by the end of October 2022, and the production forecast for the remainder of 2022. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, without limitation, customary risks of the resource industry and the risk factors identified in the MD&A which is available under Novo's profile on SEDAR at www.sedar.com. Forward-looking statements speak only as of the date those statements are made. Except as required by applicable law, Novo assumes no obligation to update or to publicly announce the results of any change to any forward-looking statement contained or incorporated by reference herein to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements. If Novo updates any forward-looking statement(s), no inference should be drawn that the Company will make additional updates with respect to those or other forward-looking statements.

 

  1 Non-IFRS measure; the definitions and reconciliations of these measures are included under "Non-IFRS Measures" below.  
2 Refer to the Company's news release dated    May 24, 2022    .  

 

  3 Novo's ability to dispose of its investments is subject to certain thresholds under the Sprott Facility (as defined below). Please refer to the MD&A which is available under Novo's profile on SEDAR at    www.sedar.com    . Novo's investment in New Found Gold Corp., which is included in the June 30, 2022 balance, was subject to escrow requirements pursuant to National Instrument 46-201 Escrow for Initial Public Offerings. The value of Novo's holdings in Elementum 3D, Inc. ("    E3D    ") is based on E3D's most recent financing price of US$8.00 per unit comprised of one common share and one-half of one common share purchase warrant. Except for its investment in E3D and warrant holdings, the fair value of Novo's investments is based on closing prices of its investments and relevant foreign exchanges rate as at June 30, 2022.  
4 Refer to the Company's news release dated    April 12, 2022    ,    April 27, 2022    , and    August 5, 2022    .  
5 Refer to the Company's news release dated    June 14, 2022    .  
6 Refer to the Company's news release dated    April 21, 2022    .  
7 Refer to the Company's news release dated    June 14, 2022    .  
8 Refer to the Company's news release dated    July 6, 2022    .  
9 Refer to the Company's news release dated    April 21, 2022    .  
10 Refer to the Company's news release dated    August 12, 2022    .  
11 Refer to the Company's news release dated    June 14, 2022    .  
12 Refer to the Company's news release dated    October 12, 2021    .  

 

 

 

  Primary Logo 

 

News Provided by GlobeNewswire via QuoteMedia

NVO.WT:CA
The Conversation (0)
Significant Results From Malmsbury Victorian Projects Exploration Update

Significant Results From Malmsbury Victorian Projects Exploration Update

 

  HIGHLIGHTS  

 
  • New exciting high-grade assay results received from the 11-hole, 3,162 m diamond drilling program recently completed at the 50%-owned Malmsbury gold project (" Malmsbury Project ") located 50 km SSW of the high-grade Fosterville gold mine in Victoria, Australia.
  •  
  • Significant results generated from the last two holes drilled in the program at Queens Birthday (MD20) and Leven Star (MD21) reefs include:
    • 3.1 m @ 9.27 g/t Au from 400.9 m (MD20);
    •  
    • 8.1 m @ 5.79 g/t Au from 131.9 m (MD21); and
    •  
    • 6.2 m @ 3.92 g/t Au from 144.6 m (MD21).
    •  
  •  
  • Step-out hole MD22 returned 45 m @ 0.23 g/t Au from 134 m successfully intersecting the gold-mineralised felsic intrusive (Missing Link Monzogranite) 80 m north of previous reported drilling (MD17 1 ).
  •  
  • These new results together with previously released results affirm the success of this drilling program and support the exploration potential of the Malmsbury Project.
  •  
  • Induced polarization (" IP ") survey commenced on the Malmsbury Project and adjacent 50%-owned Queens gold project (" Queens Project "). Ground gravity and magnetic data to be collected concurrently with the IP survey. Novo expects this will take approximately six weeks to complete.
  •  
  • Diamond drilling planned for H1 2023 will test remaining high-priority mapping targets at the Malmsbury Project, in addition to developing high-grade shoot potential on the Leven Star Reef and key significant results from the recent diamond drilling campaign.
  •  

Novo Resources Corp. ( "Novo" or the "Company" ) (TSX: NVO, NVO.WT & NVO.WT.A) (OTCQX: NSRPF) is pleased to provide an exploration update from the 50%-owned Malmsbury Project (RL006587) and adjacent 50%-owned Queens Project (EL007112), located approximately 50 km SSW of the high-grade Fosterville mine in Victoria, Australia (Figure 1). The Malmsbury Project is a joint venture with ASX-listed GBM Resources Ltd. (ASX:GBZ) (" GBM ") and the Queens Project is a joint venture with ASX-listed Kalamazoo Resources Ltd. (ASX:KZR) (" Kalamazoo ").

News Provided by GlobeNewswire via QuoteMedia

Keep reading...Show less
Novo Releases Inaugural Sustainability Statement

Novo Releases Inaugural Sustainability Statement

 

Novo Resources Corp. ( "Novo" or the "Company" ) (TSX: NVO, NVO.WT & NVO.WT.A) (OTCQX: NSRPF) is pleased to announce that it has published its inaugural sustainability statement (the " Statement ") for the 12-month period ended June 30, 2022.

 

The Statement is available on the Company's website .

News Provided by GlobeNewswire via QuoteMedia

Keep reading...Show less
Novo Reports Q3 2022 Financial Results

Novo Reports Q3 2022 Financial Results

 

Novo Resources Corp. ( "Novo" or the "Company" ) (TSX: NVO, NVO.WT & NVO.WT.A) (OTCQX: NSRPF) reports its financial results for the nine-month period ended September 30, 2022. All amounts are expressed in Canadian dollars, unless otherwise noted.

 

This news release should be read together with Novo's management's discussion and analysis (the " MD&A ") and condensed interim consolidated financial statements (the " Financial Statements ") for the nine-month period ended September 30, 2022 (" YTD 2022 ") which are available under Novo's profile on SEDAR (www.sedar.com). The three-month period ended September 30, 2022 is referred to as " Q3 2022 " in this news release.

News Provided by GlobeNewswire via QuoteMedia

Keep reading...Show less
Beatons Creek Updated Mineral Resource Estimate

Beatons Creek Updated Mineral Resource Estimate

 

Novo Resources Corp. ( "Novo" or the "Company" ) (TSX: NVO, NVO.WT & NVO.WT.A) (OTCQX: NSRPF) announces an updated Mineral Resource estimate (the " 2022 MRE ") for the Beatons Creek gold project (" Beatons Creek ") located in the Nullagine region of Western Australia. The 2022 MRE incorporates extensive reverse circulation ( "RC" ) drilling completed between January 2020 and May 2022. The effective date of the 2022 MRE is June 30, 2022. A Technical Report (as defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects (" NI 43-101 ")) in respect of the 2022 MRE will be filed under the Company's SEDAR profile upon its completion.

 

News Provided by GlobeNewswire via QuoteMedia

Keep reading...Show less
Standout Results From Becher Aircore Drilling Along Trend From Hemi Gold Deposit

Standout Results From Becher Aircore Drilling Along Trend From Hemi Gold Deposit

 

  HIGHLIGHTS  

 
  • Standout gold results have been intersected on the southern Irvine Shear corridor including 20 m @ 0.67 g/t Au , as part of the current aircore drilling program at the high priority Becher   Area in the Egina District.
  •  
  • Over 650 shallow aircore holes for 16,500 m of the > 30,000 m program have been completed.
  •  
  • The aircore program will test multiple structural and intrusive targets along a series of significant mineralized corridors, some interpreted to extend to De Grey Mining Limited's (" De Grey ") Hemi gold deposit within the Mallina gold project (" Hemi ").
  •  
  • Several additional quartz veined, large-scale sericite-silica-sulphide alteration zones have been identified from drilling across the Irvine and Whillans Shear corridors, with assays pending.
  •  
  • Deeper reverse circulation (" RC ") drilling will commence in November 2022, designed to follow-up significant aircore results and test discrete drill targets within the Becher Area.
  •  
  • Numerous targets have been enhanced or newly identified from a recent high resolution aeromagnetic and radiometric survey, coupled with detailed ground gravity surveys which have advanced structural interpretation and geological understanding.
  •  
  • Two heritage surveys were recently completed, enabling infill and extensional aircore drilling traverses and RC drilling to be completed for the remainder of 2022 and first half of 2023.
  •  
  • Initial results from the Becher Area, combined with previously reported results from Nunyerry North 1 , reconfirm potential for the Egina District to be a standalone gold production hub.
  •  

" Our first aircore drill results have yielded strong gold results at the Becher Area, " commented Dr. Quinton Hennigh, Non-Executive Co-Chairman of Novo, " indicating that the Whillans and Irvine shear zones are indeed prospective for deposits similar to those at De Grey's adjacent Mallina project. Aircore drilling, a means of rapid, shallow drilling widely used across Australia as a first pass means of testing new areas for mineralization, is proving highly effective at Becher. Several large-scale anomalies are emerging, the largest of which is 650m across and situated along the southern Irvine shear zone. Alteration assemblages, lithologies, geochemical associations and size of these mineralized areas are similar to those observed in other nearby large gold discoveries. Although we have lots more drilling to complete and results to come in, the anomalies suggest that deeper drill testing is required. "

News Provided by GlobeNewswire via QuoteMedia

Keep reading...Show less

Latest Press Releases

Related News

×