Novo Closes Initial Tranche of Sprott Facility Concurrently with US$3.6 Million Non-Brokered Financing and Completes Acquisition of Millennium Minerals Limited
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580 Hornby Street, Suite 880
Vancouver, BC, Canada V6C 3B6
Not for Distribution to United States Newswire Services or for dissemination in the United States
NOVO CLOSES INITIAL TRANCHE OF SPROTT FACILITY
CONCURRENTLY WITH US$3.6 MILLION NON-BROKERED FINANCING
AND COMPLETES ACQUISITION OF MILLENNIUM MINERALS LIMITED
VANCOUVER, BC, September 8, 2020 - Novo Resources Corp. (“Novo” or the “Company”) (TSX-V:
NVO) is pleased to announce that it has completed the acquisition of all of the outstanding shares of
privately held Millennium Minerals Limited (“Millennium”) from IMC Resources Gold Holdings Pte Ltd,
Heritas Capital Management (Australia) Pty Ltd, and IMC Resources Ltd (collectively, “ IMC”) (t he
“Acquisition”) first announced in the Company’s news release dated August 4, 2020.
All amounts are in United States dollars unless indicated otherwise.
The Company is also pleased to announce that it has closed the initial tranche of its $60 million four-year
credit facility (the “Sprott Facility”) with Sprott Private Resource Lending II (Collector), LP (“ Sprott”).
The funds are available in two tranches, with the first $35 million (subject to a lender’s 12.286% cash
discount for net proceeds of $30.7 million) drawn down and the remaining $25 million (subject to a lender’s
2% cash discount) available to be drawn until March 31, 2021, at Novo’s sole discretion, upon delivery of
a pre -feasibility study acceptable to Sprott on the Company’s Beatons Creek gold project and the
satisfaction of certain other conditions. The Company will also pay to Clarus Securities Inc. and Stifel GMP
a 4.5% cash fee on amounts drawn under the Sprott Facility.
Sprott has concurrently subscribed for 1,453,624 units (the “Sprott Units”) at a price of C$3.25 per Sprott
Unit for gross cash proceeds of C$4,724,280 (approximately $3.6 million ) (the “ Sprott Private
Placement”). Each Sprott Unit is comprised of one common share of Novo (each a “Share”) and one-half
of one transferable Share purchase warrant (each a “Sprott Warrant”), with each whole Sprott Warrant
entitling Sprott to acquire one Share at a price of C$4.40 for a period of 36 months after the issuance of the
Sprott Units. The Sprott Units and their underlying securities are subject to a statutory four-month hold
period in accordance with Canadian securities legislation. Proceeds raised from the issuance of the Sprott
Units will be used for capital expenditures relating to the restart of Millennium’s infrastructure and for
general working capital purposes related thereto . The Sprott Private Placement will close upon receipt o f
TSX Venture Exchange acceptance.
As announced on August 27, 2020 , t he Company has also closed brokered and non -brokered private
placements of Subscription Re ceipts (as defined below) raising gross proceeds of approximately C$56
million. The Escrow Release Conditions (as defined below) having been satisfied, these funds were released
from escrow to the Company in order for it to complete the Acquisition . In agg regate, subsequent to
completion of the Sprott Private Placement and repayment of the cash component of IMC’s secured debt
of approximately $43. 7 million (A$60 million) (as outlined below) , and combined with the Company’s
current cash balance, the Company will have approximately $44.8 million (C$58.6 million) at its disposal
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to advance the Company’s Beatons Creek gold project, with an additional gross amount of $25 million
(approximately C$32.8 million) available pursuant to the second Sprott Facility tranche.
Pursuant to the agreements signed with IMC, Novo has acquired all of the outstanding ordinary shares of
Millennium on a cash and debt free basis (except as described below) in exchange for the issuance to IMC
of 17,706,856 Novo units (each a “Consideration Unit”) at a deemed price of C$3.25 per Consideration
Unit for aggregate consideration of C$57.6 million (A$60.3 million). Each Consideration Unit is comprised
of one Share and one-half of one transferable Share purchase warrant (each a “Consideration Warrant”),
with each whole Consideration Warrant entitling the holder to acquire one Share at a price of C$4.40 until
September 7, 2023 (the “Acquisition Consideration”).
Millennium is required, within five business days after the closing of the Acquisition , to repay IMC’s
secured debt of approximately $50.3 million (A$69 million) by way of payment of $43.7 million (A$60
million) in cash and the balance of $6.6 million (A$9 million) in units of Novo (each a “Debt Settlement
Unit”) at a deemed price of C$3.25 per Debt Settlement Unit. Each Debt Settlement Unit is comprised of
one Share and one-half of one transferable Share purchase warrant (each a “Debt Settlement Warrant”),
with each whole Debt Settlement Warrant entitling the holder to acquire one Share at a price of C$4.40 for
a period of 36 months after the closing date of the debt settlement (the “Debt Consideration”). Novo will
provide funding to Millennium to allow repayment of IMC’s secured debt.
The Consideration Units and the Debt Settlement Units issued to IMC, and the securities underlying the
Consideration Units and the Debt Settlement Units, are subject to statutory and TSX Venture Exchange
hold period s expiring on January 8, 202 1; a further contractual hold period will apply to half of the
Consideration Units and Debt Settlement Units issued to IMC, increasing the hold period for those
securities to 12 months.
Subsequent to the issuance of the Consideration Units and the Debt Settlement Units , IMC will hold an
approximate 9.73% undiluted interest in Novo which will decrease to approximately 8.94% once the
Subscription Receipts issued pursuant to the brokered and non -brokered financings announced by the
Company on August 27, 2020 convert to Financing Units (as defined below).
Novo has also agreed to pay to IMC deferred consideration in the form of a fee on future gold production
equal to 2% of all gold revenue generated by Novo up to the later of cumulative gold production of 600,000
ounces or cumulative payments of A$20 million having been made to IMC.
The Company’s brokered and n on-brokered private placement s of a total of 17,192,379 subscription
receipts (the “Subscription Receipts”) at a price of C$3.25 per Subscription Receipt closed on August 27,
2020 (the “Offering”). The Subscription Receipts were issued pursuant to a subscription receipt agreement
(the “Subscription Receipt Agreement”) entered into by the Company, Clarus Securities Inc. and Stifel
GMP, as co -lead agents on behalf of themselves and PI Financial Corp., CIBC Capital Markets and
Haywood Securities Inc. (collectively, the “Agents”), and Olympia Trust Company as subscription receipt
agent. Pursuant to the Subscription Receipt Agreement, the proceeds from the Offering except for 50% of
the Agents’ 6% cash commission and all of the Agents’ expenses (the “Escrowed Funds”) were held in
escrow and released on September 8, 2020 upon satisfaction of certain conditions including, amongst
others, (a) the satisfaction or waiver of each of the conditions precedent to the Acquisition; and (b) the
receipt of all required regulatory (including TSX Venture Exchange) approvals in connection with the
Acquisition (“Escrow Release Conditions”).
The Subscription Receipts remain outstanding and will automatically be exchanged for one unit of Novo
(a “Financing Unit”), on the date that is the earlier of:
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(a) the date that is three business days following the issuance by the British Columbia Securities
Commission, as principal regulator, of a receipt (the “ Final Receipt ”) of the Qualifying
Jurisdictions (as defined below) for a final short form prospectus qualifying the distribution of
the Financing Units underlying the Subscription Receipts (the “Qualifying Prospectus”); and
(b) December 28, 2020.
Each Financing Unit is comprised of one Share and one-half of one transferable Share purchase warrant (a
“Financing Warrant”), with each whole Financing Warrant entitling the holder thereof to acquire one
Share at a price of C$4.40 until August 27, 2023,
The Company has agreed to use its commercially reasonable efforts to obtain the Final R eceipt by 5:00
p.m. (Toronto time) on November 25, 2020 (the “Qualification Deadline”). In the event the Final Receipt
is not obtained by the Qualification Deadline, the Financing Units will be comprised of one Share and one
whole Financing Warrant (rather than one-half of one Financing Warrant).
The Subscription Receipts issued under the Offering were sold pursuant to private placement exemptions
in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Nova Scotia (the “ Qualifying
Jurisdictions”). The Subscription Receipts and the Financing Warrants, and the Shares underlying the
Subscription Receipts and the Financing Warrants respectively, are subject to a statutory hold period in
accordance with Canadian securities legislation expiring on December 2 8, 2020 unless sooner qualified
under the Qualifying Prospectus. Securities of the Company sold in the Offering in the United States or to,
or for the benefit of, U.S. persons constitute “restricted securities” under U.S. securities laws and,
accordingly, are also subject to additional resale restrictions.
About Novo Resources Corp.
Novo’s focus is primarily to explore and develop gold projects in the Pilbara region of Western Australia,
and Novo has built up a significant land package covering approximately 13, 750 square kilometres with
varying ownership interests. 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 [email protected]
On Behalf of the Board of Directors,
Novo Resources Corp.
“Quinton Hennigh”
Quinton Hennigh
President and Chairman
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 news release.
Forward-looking information
Some statements in this news release contain forward-looking information (within the meaning of Canadian securities
legislation). These include statements (the “forward-looking statements”) regarding Novo’s intent, or the beliefs or
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current expectations of Novo’s managem ent, including without limitation statements regarding the expected
completion of the Sprott Private Placement and the intended filing of the Qualifying Prospectus . When used in this
news release, words such as “will”, “would”, “expect”, “target”, “potenti al”, “objective”, “subject to”, “expected to”
and similar words or expressions identify these forward-looking statements as well as phrases or statements that certain
actions, events or results “may”, “could”, “would”, “should”, “occur” or “be achieved” or the negative connotation of
such terms. Forward looking statements in this news release include, without limitation, the Company’s plans advance
the Beatons Creek Project. Forward-looking statements address future events and conditions and, as such, invol ve
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 forward-looking statements. Such factors include, without limitation, the risk factors identified in Novo’s Annual
Information Form for the year ended January 31, 2020, which is available on SEDAR at www.sedar.com. Forward-
looking statements speak only as of the date those statem ents 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 eve nts 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.
This news release does not constitute an offer for sale , or a solicitation of an offer to buy , in the United States or to
any “U.S Person” (as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended (the
“1933 Act ”)) of any equity or other securities of Novo. The securities of Novo have not been , and will not be,
registered under the 1933 Act or under any state securities laws and may not be offered or sold in the United States
or to a U.S. Person absent registration under the 1933 Act and applicable state securities laws or an applicable
exemption therefrom.