Novadx Enters into Letter of Intent for Corporate Restructuring

NEWS RELEASE

August 13, 2013 Symbol: TSX-V: NDX

Novadx Enters into Letter of Intent for Corporate Restructuring

(Vancouver, BC, August 13, 2013) Novadx Ventures Corp. (the "Company") (TSX-V: NDX) is pleased to announce that it, and its wholly-owned subsidiary, MCoal Corporation ("MCoal") have entered into a letter of intent (the "LOI") with ABACI Capital Limited ("ABACI") and Sandstorm Metals and Energy Ltd. ("Sandstorm"), pursuant to which the Company intends to raise up to CDN $20 million in equity and debt financing. The LOI also contemplates the restructuring of the Company's existing coal stream purchase agreements and the consolidation of the Company's issued and outstanding common shares (the "Consolidation") on the basis of one (1) post-consolidated common share for every fifty (50) preconsolidated common shares (collectively, the "Restructuring"). The Company has engaged Asperion Group LLC ("Agent") as its placement agent to assist the Company on the structuring and placement of the equity and debt financing.

"We are pleased to announce this restructuring and recapitalization program that will allow the Company to move from a financially challenged position, to one of significant financial strength," said Daniel A. Roling, President and CEO. "The strong support given to the Company by the management team at Sandstorm Metals & Energy has been exceptional. In addition, we believe that the confidence being placed in management by ITA Global Opportunities Fund in connection with their proposed participation in the Restructuring will be rewarded. Once the recapitalization has been completed, it is our intention to focus our energy on opening the Rex No. 1 mine, reopening the Smokey Junction preparation facility, and rebuilding customer relationships. We look forward to reopening operations".

It is anticipated that the Company's current President and Chief Executive Officer, Mr. Daniel A. Roling, and its current Chief Financial Officer and Corporate Secretary, Mr. Sam Wong, will continue in their current roles upon completion of the Restructuring.

As part of the Restructuring, the Company intends to complete a non-brokered private placement (the "Private Placement") of up to 1,500,000,000 units (each a "Unit") (30,000,000 Units post Consolidation) at a price of $0.01 per Unit ($0.50 post Consolidation), for aggregate proceeds of up to CDN $15 million. Each Unit will be comprised of one common share and one-tenth of one share purchase warrant. Each whole share purchase warrant (a "Warrant") shall entitle the holder thereof to acquire an additional common share of the Company at an exercise price of $0.01 ($0.50 post Consolidation) for a period of 5 years from the date of the issuance of the Warrants.

"Completion of the proposed restructuring will allow the Novadx assets to reach production and generate cash flow to both Novadx and Sandstorm shareholders," said Sandstorm President & CEO Nolan Watson. "The royalty and the equity position will put us in a position to recoup some of our invested capital."

The Company will pay the Agent a commission of up to 6% cash of the gross proceeds from the sale of Units, and warrants of up to 6% of the aggregate number of Warrants issued by the Company. The Company will pay ABACI finder's fees in cash equal to 5% of the gross proceeds from the sale of Units under the Private Placement purchased by arm's length subscribers introduced to the Company by ABACI.

In addition, the Company will be seeking a secured loan in the amount of CDN $5 million (the "Secured Loan") which will mature and become payable on the date that is 24 months from the date of issuance. The Secured Loan will bear interest at a rate of 12% per annum and will be secured against the shares of MCoal and the shares of each of the Company's other subsidiaries. The Company has agreed to grant the lender bonus warrants exercisable to acquire 12,500,000 common shares (250,000 post Consolidation) exercisable at $0.01 ($0.50 post Consolidation) for a period of 5 years. The Company has agreed to pay finders fee of up to 2.5% of the amount of the Secured Loan. Pursuant to the terms of the LOI, an escrow deposit of $750,000 will be made available to the Company, which will be drawn against the Secured Loan facility, to fund working capital expenses until closing of the Restructuring; $250,000 has been advanced to the Company to date. In the event that Sandstorm terminates the LOI, the entire $750,000 is repayable by Sandstorm to ABACI.

In connection with the closing of the Restructuring, the Company intends to amend the terms of previously issued convertible debentures having an aggregate outstanding principal amount of CDN $2.67 million, expiring on December 9, 2014 (the "Debentures") to reduce the applicable conversion price of the Debentures from $0.30 per common share to $0.01 per common share ($0.50 post Consolidation), making them convertible into an aggregate of 267,000,000 shares (5,340,000 post Consolidation common shares).

As announced on January 2, 2013, the Company and Sandstorm acquired Mine 12, the Turley Rail Load- Out, and the Smokey Junction Preparation Plant located in Campbell and Scott Counties, Tennessee (the "Smokey Acquisition") through a wholly owned US subsidiary of Sandstorm ("0955615 US Inc.") in consideration of cash payment, the issuance of common shares of Sandstorm and a 5 year secured loan from National Coal LLC to 0955615 US Inc. in the amount of US $3.5 million (the "US Inc. Loan"). In connection with the Smokey Acquisition, the Company agreed to fund the repayment of the US. Inc. Loan pursuant to which the Company would earn up to a 41.2% interest in 0955615 US Inc.

As part of the proposed Restructuring, Sandstorm has agreed to restructure and cancel the Company's previously disclosed coal streaming agreements and credit facility and to transfer its interest in 0955615 US Inc. to the Company on the following basis (collectively, the "Sandstorm Restructuring"):

• Sandstorm will immediately be issued 20,000,000 pre-Consolidation common shares (400,000 post-Consolidation Common Shares) of the Company at a price of CDN $0.05 per common share ($2.50 post Consolidation) in settlement of $1,000,000 in outstanding debt;
• The Company will pay Sandstorm CDN $1 million in cash on completion of the Restructuring;
• Sandstorm will be issued 500,000,000 common shares (10,000,000 post-Consolidation Common Shares) (the "Sandstorm Shares") of the Company at a price of $0.01 per common share ($0.50 post Consolidation)on completion of the Restructuring;
• Sandstorm and the Company will enter into a royalty agreement (the "Royalty Agreement"), pursuant to which the Company will pay US $3.00 per ton royalty on all clean tons sold from existing reserves and resources with minimum aggregate recoupable annual royalty payments of US $500,000 to Sandstorm; the Royalty Agreement shall be deemed fully paid and cease to exist

upon payment of US $9 million (the "Royalty Cap") in royalties to Sandstorm, provided that, if at any time while any portion of the Secured Loan remains due and owing to the Lender or any other party that is controlled by or related to ABACI, the closing price at which the common shares of the Company trade on the Exchange falls below $0.20 on a post Consolidated basis for a period of three consecutive months, then the Sandstorm Cap shall cease to apply until the closing price at which the common shares of the Company trade on the Exchange is above $0.20 on a post Consolidated basis for a period of three consecutive months. In addition, Novadx will have the right to repurchase the Royalty from Sandstorm for a cash purchase price of US $6 million at any time until the date that is two years from the date of closing of the Restructuring, provided that the closing price at which the common shares of the Company trade on the Exchange is not below CDN $0.50 (on a Consolidated basis); and

• Sandstorm will assign all of the issued and outstanding share capital of 0955615 US Inc. to the Company and 0955615 US Inc. will become a wholly-owned subsidiary of the Company.

It is currently anticipated that ITA Global Opportunities Fund ("ITA") will subscribe for an aggregate number of Units under the Private Placement that will result in ITA holding, in excess of 20% of the aggregate issued and outstanding common shares of the Company on closing of the Restructuring. In addition, it is anticipated that the issuance of common shares to Sandstorm under the Sandstorm Restructuring will result in Sandstorm holding, in excess of 20% of the aggregate outstanding common shares of the Company on closing. As a result, both ITA and Sandstorm will become new control persons (the "Change of Control") of the Company pursuant to the policies of the TSX Venture Exchange (the "Exchange") requiring the approval of shareholders of the Company under the policies of the Exchange.

The Company intends to seek shareholder approval for the Change of Control at the Company's Annual and Special Meeting of Shareholders scheduled to be held on September 24, 2013 (the "AGM"). The Company also intends to appoint additional directors to its current board of directors. At the AGM, management intends to nominate the following individuals to serve as directors of the Company for the ensuing year:

• Daniel A. Roling, President, Chief Executive Officer and Director: Previously, Mr. Roling was the President, CEO, and served on the Board of Directors of National Coal Corp., a publicly traded southern Appalachian coal producer. Prior thereto, he was First Vice President and Global Senior Metals and Mining Analyst at Merrill Lynch, where he was employed for 25 years. Mr. Roling is both a Certified Public Accountant and a Chartered Financial Analyst.
• Sam Wong, Chief Financial Officer, Corporate Secretary and Director: Mr. Wong holds the position of Chief Financial Officer of Chesapeake Gold Corp and Lowell Copper Ltd. Previously, Mr. Wong was the corporate controller for Luna Gold Corp. and Pathway Capital Ltd. While employed with Deloitte & Touche LLP, he obtained the chartered accountant designation; he is a graduate of the University of British Columbia where he received a bachelor of commerce degree.
• Marc Solochek, Director: Mr. Solochek currently is the Chief Financial Officer for Medical Information Systems Technology, LLC, and is a Financial and Business Consultant. Previously, he has been the Chief Financial Officer for both private and public companies, as well as having served on the Board of Directors of other public companies.
• Dr. Jeff O'Leary, Proposed Director: Dr. O'Leary after retiring from HSBC Group, where he was a director of the Mining & Metals team, was a Non-Executive director of Moto Goldmines Ltd and European Goldfields. Currently, he is involved with the development of two large iron ore

projects in South America and gold and base metal projects in Europe. In addition, Jeff held a number of executive and non-executive positions with mining companies in North and South America and Africa, and was the senior lecturer in geo-statistics at the Royal School of Mines, Imperial College London. Jeff has his BSc in mining geology and a PhD in geo-statistics from the Royal School of Mines, and is a Fellow of the Institute of Materials, Minerals and Mining, and a Chartered Engineer.

It is also anticipated that a fifth, and independent, director will be nominated by the Board of Directors at a later date.

In connection with the completion of the Restructuring, the Company intends to complete filings pursuant to the policies of the Exchange to reclassify from its current classification of Investment Issuer to Mining Issuer and to change its name to Blackpaw Coal Corp. The Company's Rex No. 1 mine located in Campbell County, Tennessee, will be the Company's "Qualifying Property" in accordance with Exchange policies. A copy of the Company's independent technical report on the Rex No. 1 Property entitled "Technical Report on the Rex Coal Mine Property – MCoal Corporation – Campbell County, Tennessee, USA", prepared John E. Feddock, P.E., Senior Vice President and Qualified Person on behalf of Marshall Miller & Associates Inc. (the "Technical Report") is available under the Company's SEDAR profile at www.sedar.com.

Pursuant to the terms of the LOI, completion of the Restructuring is conditioned upon, among other customary closing conditions, (1) all components of the Restructuring being completed; (2) holders of Debentures having an aggregate principal amount of CDN $1.32 million agreeing to convert the Debentures at the amended conversion price of $0.01 ($0.50 post-Consolidation) into 132,000,000 common shares (2,640,000 common shares post Consolidation) at or before closing of the Restructuring;

(3) the Company having no other material indebtedness, other than the US$3.5 million US Inc. Loan, the Secured Loan and any remaining unconverted Debentures; (4) completion by ABACI of satisfactory due diligence with respect to the Company; (5) successful negotiation of definitive agreements with regard to the Restructuring; and (6) receipt of all necessary shareholder and regulatory approvals.

The Company also announced that it will redeem 480,000 common shares (9,600 post Consolidation common shares) from a former officer of the Company in satisfaction of $50,000 in debt owed by the former officer to the Company, and will issue 15,000,000 (300,000 post Consolidation common shares) common shares at a price of $0.01 per share ($0.50 post Consolidation) on closing of the Restructuring in settlement of amounts owing to certain officers, directors and employees of the Company.

Upon Completion of the Restructuring and related transactions, assuming completion of the maximum private placement and conversion of Debentures having an aggregate principal amount of CDN $1.32 million, it is anticipated that the Company will have 45,261,909, post Consolidated common shares issued and outstanding, or 48,560,409, post Consolidated common shares issued and outstanding on a diluted basis.

Certain of the securities issued pursuant to the Restructuring and related transactions will have a hold period expiring four months and one day from the date of issuance.

Completion of the transaction is subject to a number of conditions, including Exchange acceptance and appropriate Shareholder approvals. The transaction cannot close until the required Shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in any further disclosure documents filed on SEDAR in connection with the Change of Business and the Restructuring, any information released or received with respect to the Restructuring may not be accurate or complete and should not be relied upon. Trading in the securities of Novadx Ventures Corp. should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

ON BEHALF OF THE BOARD Daniel A. Roling President, CEO and Director

For more information about Novadx Ventures Corp. please contact:

Daniel A. Roling +1 (865) 392-4282 [email protected]

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the qualification under the securities laws of such jurisdiction.

This release contains "forward-looking information" that includes information relating to future events and future financial and operating performance, including management's assessment of Novadx's and MCoal's future outlook, potential financings, potential acquisitions, properties, permitting and mining activities and production. Specifically, this release contains forward-looking information related to future development of assets, mining operations, permitting and regulatory and shareholder approvals, and potential financings. Statements included in this announcement, including statements concerning our plans, intentions and expectations, which are not historical in nature are intended to be, and are hereby identified as, "forward-looking statements" for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words including "anticipates", "believes", "intends", "estimates", "expects" and similar expressions. Forward-looking information should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking information is based on information available at the time it is made and/or management's good faith belief as of that time with respect to future events, and such information is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking information. Important factors that could cause these differences include but are not limited to: requisite regulatory and shareholder approvals, actual or expected sampling or production results, pricing and assumptions, projections concerning reserves and/ or resources in our mining operations; changes in contracted sales, the business of the Company may suffer as a result of uncertainty surrounding the coal market; the Company may be adversely affected by other economic, business, and/or competitive factors; the worldwide demand for coal; the price of coal; the price of alternative fuel sources; the supply of coal and other competitive factors; the costs to mine and transport coal; the ability to maintain existing mining leases and rights and the ability obtain new mining leases, rights and permits; governmental and regulatory and shareholder approvals, the costs of reclamation of previously mined properties; the risks of expanding coal mining activities and production; the ability to bring new mines on line on schedule; industry competition; the Company's ability to continue to execute its growth strategies; the Company's ability to secure and complete additional financing and debt restructuring; the Company's ability to complete planned acquisitions; and general economic conditions. You should not put undue reliance on any forward-looking information. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking information, no inference should be drawn that we will make additional updates with respect to those or other forward-looking information. The company cautions readers that forward- looking statements, including without limitation those relating to the company's future operations and business prospects, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements.