Novo Reports 2021 Financial Results
Suite 880, 580 Hornby Street
Vancouver, BC, Canada V6C 3B6
P: +1-416-543-3120 E: [email protected] www.novoresources.com
MARCH 31, 2022
NOVO REPORTS 2021 FINANCIAL RESULTS
VANCOUVER, BC - Novo Resources Corp. (“Novo” or the “Company”) (TSX: NVO, NVO.WT & NVO.WT.A) (OTCQX: NSRPF)
is pleased to announce its financial results for the three and twelve-month periods ended December 31, 2021. 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 “Annual MD&A”) and
audited consolidated financial statements (the “Audited Financial Statements”) for the year ended December 31, 2021
(“Fiscal 2021”) and the eleven -month transitional period ended December 31, 2020 (“ Fiscal 2020”) which are available
under Novo’s pro file on SEDAR (www.sedar.com) . The fourth quarter of Fiscal 2021 is referred to as “ Q4 2021” in this
news release.
Highlights
• Revenue of $112.2 million from the sale of 49,232 ounces of gold from the Company’s Beatons Creek gold project
(the “Beatons Creek Project ”) in Fiscal 2021 ($29.9 million from the sale of 13,023 ounces in Q4 2021) at an
average realized price 1 of $2,281 / A$2,421/ US$1,819 per ounce ($2, 294 / A$2,498 / US$1,821 per ounce for
Q4 2021) subsequent to Novo’s inaugural gold pour on February 16, 20212
• Cash and cash equivalents of $32.5 million as at December 31, 2021
• Investment portfolio balance of $156.2 million 3 as at December 31, 2021 , including a 9.13% undiluted stake in
New Found Gold Corp. (TSXV: NFG) (“New Found”)
• Continuing focus on high -priority exploration targets, with exploration spend of $ 12.1 million in Fiscal 2021
($12.3 million in Fiscal 2020)
• Earnings before interest, taxes, depreciation and amortization (“EBITDA”)1 of $41.7 million in Fiscal 2021 ($(49.8)
million for Q4 2021) and adjusted EBITDA1 of $(2.4) million in Fiscal 2021 ($(5.2) million for Q4 2021)
• Total cash costs1 of $1,865 / A$1,980 / US$1,488 per ounce sold in Fiscal 2021 ($2,296 / A$2,501 / US$1,822 in
Q4 2021 ) and all-in sustaining costs (“ AISC”)1 of $ 2,637 / A$ 2,799 / US$ 2,104 per ounce sold in Fiscal 2021
($3,143 / A$3,423 / US$2,494 per ounce sold in Q4 2021)
• Recognition of a one-time non-cash gain of $85.6 million in Fiscal 2021 as a result of the accounting treatment
(discontinuation of equity accounting; see below) for the Company’s investment in New Found
• Recognition of a non-cash impairment charge of $46.9 million in Q4 2021 due to uncertainty regarding the timing
of the receipt of the Fresh mining approvals and Beatons Creek Project operational performance to date against
forecast
• Completion of final payment of A UD$3 million for the Comet Well project near Karratha, Western A ustralia in
February 20214
• Amendment of senior secured credit facility with Sprott Private Resource Lending II (Collector), LP (the “Sprott
Facility”) and draw-down of additional USD$5 million in April 20215
• Completion of sale of part of the Company’s Blue Spec project near Nullagine, Western Australia to Calidus
Resources Ltd. (ASX: CAI) (“ Calidus”) in April 2021 for gross aggregate consideration of A UD$12.5 million cash
(AUD$2.5 million received in Fiscal 2020) plus 13,333,333 ordinary share s of Calidus 6, all of which were sold in
Q4 2021 (along with some pre-existing Calidus shares) for gross proceeds of AUD$8.7 million
• Completion of $26.4 million brokered private placement of special warrants in May 2021 7
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 February 16, 2021.
3 Novo’s ability to dispose of its investments is subject to certain thresholds under the Sprott Facility. Please refer to the Annual MD&A which is available under Novo’s profile on SEDAR at www.sedar.com.
Novo’s investment in New Found Gold Corp. is 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 December 31, 2021.
4 Refer to the Company’s news release dated February 4, 2021.
5 Refer to the Company’s news release dated April 9, 2021.
6 Refer to the Company’s news release dated March 23, 2021.
7 Refer to the Company’s news release dated May 4, 2021.
{02438498;1} 2
Also refer to the Company’s Q4 2021 operational update 8 and comprehensive exploration update 9. The Company will
provide further operations and exploration updates during April 2022.
Financial Highlights
The Company did not have any revenue-generating operations prior to its inaugural gold pour on February 16, 2021 2.
Novo generated revenue of $112.2 million from the sale of 49,232 ounces of gold at an average realized price1 of $2,281
/ A$2,421/ US$1,819 per ounce in Fiscal 2021. Approximately 1,362,534 tonnes of mineralized material were processed
through the Golden Eagle processing facility (the “ Golden Eagle Plant ”) in Fiscal 2021 subsequent to the Company’s
inaugural gold pour 2, equating to an annual processing rate of approximately 1.6 million tonnes per annum. Processed
material had a n average head grade of 1.25 g/t Au with average recovery of 93.0% 8 resulting in 49,364 ounces of gold
produced in Fiscal 20218.
Revenue for Q4 2021 was $29.9 million from the sale of 13,023 ounces of gold at an average realized price 1 of $2,294 /
A$2,498 / US$1,821 per ounce. Processing rates were affected by a number of unscheduled short-term mill shuts during
Q4 2021 , including a longer shut in early November 2021 which a ccompanied significant crusher maintenance 10.
Approximately 395,000 tonnes of mineralized material were processed through the Golden Eagle Plant in Q4 2021 at an
average head grade of 1.16 g/t Au and average recovery of 91.5% 8. The Company produced 12,833 ounces of gold and
sold 13,023 ounces of gold in Q4 20218.
The Company generated a net loss of $(0.7) million or $(0.00) per share in Fiscal 2021, and a net loss of $(59.3) million or
$(0.24) per share in Q4 2021.
EBITDA1 totaled $41.5 million in Fiscal 2021 ($( 49.8) million in Q4 2021), and adjusted EBITDA 1 totaled $(2.5) million in
Fiscal 2021 ($(5.2) million in Q4 2021).
Total cash costs 1 were $1,865 / A$1,980 / US$1,488 in Fiscal 2021 ($2,296 / A$2,501 / US$1,822 in Q4 2021). AISC1 was
$2,637 / A$2,799 / US$2,104 in Fiscal 2021 ($3,143 / A$3,423 / US$2,494 in Q4 2021 ). Total cash costs 1 and AISC1 are
heavily influenced by the number of ounces of gold sold and are higher than anticipated due to , among other thin gs, a
lower production base than forecast.
Adjusted earnings (losses) 1 were $(52.0) million or $(0.2 2) per share in Fiscal 2021, and $( 16.1) million or $(0.0 7) per
share in Q4 2021. Non-cash adjustments include a gain recognized on the discontinuation of equity a ccounting for the
8 Refer to the Company’s news release dated January 14, 2022.
9 Refer to the Company’s news release dated January 28, 2022.
10 Refer to the Company’s news releases dated November 1, 2021, and November 5, 2021.
In thousands of CAD, except w here noted
For the three months
ended December 31,
2021
For the three months
ended December 31,
2020
For the year ended
December 31, 2021
For the 11-month
period ended
December 31, 2020
Gold sold Oz Au 13,023 - 49,232 -
Average realized price1
$/oz 2,294 - 2,281 -
Average realized price1
AUD$/oz 2,498 - 2,421 -
Average realized price1
USD$/oz 1,821 - 1,819 -
Total revenue $ 29,857 - 112,243 -
Cost of goods sold $ (37,769) - (110,767) -
Net loss from operations $ (5,084) (10,640) (22,740) (26,804)
Impairment of non current assets $ (46,905) - (46,905) -
Other income, net $ 2,253 574 90,947 398
Finance items $ (2,395) (503) (16,337) (2,173)
Income tax expense (benefit) $ 739 - (7,145) 778
Net loss for the period after tax $ (59,304) (10,569) (704) (27,801)
Basic and diluted loss per common share $/share (0.24) (0.05) (0.00) (0.14)
EBITDA1
$ (49,839) (8,598) 41,508 (24,209)
Adjusted EBITDA1
$ (5,187) (9,172) (2,534) (24,607)
Adjusted earnings1
$ (16,116) (11,143) (52,073) (28,199)
Adjusted earnings per common share1
$/share (0.07) (0.05) (0.22) (0.14)
Total cash costs1
$/oz 2,296 - 1,865 -
Total cash costs1
AUD$/oz 2,501 - 1,980 -
Total cash costs1
USD$/oz 1,822 - 1,488 -
AISC1
$/oz 3,143 - 2,637 -
AISC1
AUD$/oz 3,423 - 2,799 -
AISC1
USD$/oz 2,494 - 2,104 -
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Company’s investment in New Found, impairment related to the Beatons Creek Project, and income tax expenses related
to the movement in fair value of the Company’s investment portfolio .
The Company recognized a non-cash impairment expense of $ 46.9 million related to the Company’s Beatons Creek
Project in Q4 2021 due to current uncertainty regarding the timing of the receipt of the Fresh mining approvals and
Beatons Creek Project operational performance to December 31, 2021 against forecast.
The Company is committed to aggressively advancing its highly prospective exploration portfolio and devoted
$12.1 million to such efforts in Fiscal 2021.
Financial Position
The Company held cash and cash equivalents of $32.5 million as at December 31, 2021, with a working capital 1 balance
of $3.9 million. The Company’s investment portfolio balance grew by 732% from December 31, 2020 to $156.2 million3
and includes the Company’s 9.13% undiluted investment in New Found (currently worth approximately $114.75 million)
along with the Company’s undiluted 12.6% investment (pre-financing) in unlisted Elementum 3D Inc. (“E3D”). The
Company revalued its holdings in E3D in Q4 2021 from $6.6 million to $16.5 million based on E3D’s ongoing financing at
USD$8.00 per unit.
During Fiscal 2020, the Company determined that it exercised significant influence over New Found pursuant to IAS 28
Investment in Associates and Joint Ventures . On September 17, 2021, immediately su bsequent to New Found’s most
recent annual general meeting, Novo determined that it had ceased to exercise significant influence over New Found,
discontinued equity accounting, and recognized its retained interest in New Found as a marketable security at f air value
resulting in a non-cash one-time gain of $85.6 million based on the difference between New Found’s fair value using its
share price on the date of derecognition ($7.15) and the carrying value of the investment using the equity accounting
method, with certain adjustments.
The Sprott Facility remains fully drawn at US D$40 million. Interest accrues on the outstanding principal amount of the
Sprott Facility at a rate of 8% per annum plus the greater of (i) US three-month LIBOR and (ii) 1.00%. All interest is payable
in cash on a monthly basis. Principal is repayable commencing December 2022 and quarterly thereafter until September
2024 in eight equal instalments. The availability of the Sprott Facility is subject to certain conditions and covenants,
including the maintenance of minimum unrestricted cash and working capital balances after certain adjustments. As at
December 31, 2021 and the date of this news release, the Company is in compliance with Sprott Facility conditions and
covenants, as amended or waived.
Outlook
The Company reiterates its previous production forecast for the first half of 2022 of 27 koz – 33 koz Au11, which remains
influenced by close-spaced drilling and mine-to-mill reconciliation efforts and assumes receipt of requisite approvals. The
Company will provide an operations performance and approvals update following completion of the first quarter of 2022.
11 Refer to the Company’s news releases dated December 13, 2021, and January 14, 2022.
In thousands of CAD, December 31, 2021 December 31, 2020 January 31, 2020
except where noted $'000 $'000 $'000
Cash 32,345 40,494 28,703
Short-term investments 108 195 88
Working capital1 3,925 14,071 26,051
Credit Facility adjusted working capital (USD)1 18,332 25,089 -
Marketable securities1 156,209 18,770 14,457
Available liquidity1 102,868 59,623 42,501
Total assets 462,682 456,408 158,049
Current liabilities excluding current portion of financial liabilities 19,805 12,083 1,082
Non-current liabilities excluding non-current portion of financial liabilities 36,342 28,615 -
Financial liabilities (current and non-current) 75,608 86,271 8,565
Total liabilities 148,420 126,969 9,647
Shareholders' equity 314,262 329,439 148,402
{02438498;1} 4
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 I nternational 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.
Non-IFRS measures for Fiscal 2021 are not necessarily indicative of ongoing performance considering the Company was
still ramping up operations through to September 30, 2021 and declared commercial production effective October 1,
202112.
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 trea tment 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
Annual MD&A and Audited Financial Statements.
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 admini strative 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. Refer to the Annual MD&A for the treatment of depreciation and depletion costs prior and subsequent to
the declaration of commercial production.
The following table reconciles this non -IFRS measure to the most directly comparable IFRS measure disclosed in the
Annual MD&A and Audited Financial Statements.
12 Refer to the Company’s news release dated October 12, 2021.
In thousands of CAD, except w here noted
For the three months
ended December 31,
2021
For the three months
ended December 31,
2020
For the year ended
December 31, 2021
For the period ended
December 31, 2020
Revenue from contracts with customers $ 29,857 - 112,243 -
Treatment and refining charges $ 72 - 255 -
Less: Silver revenue (Note 18 ) $ (52) - (215) -
Gold revenue $ 29,877 - 112,283 -
Gold sold oz 13,023 - 49,232 -
Average realized price $/oz 2,294 - 2,281 -
Foreign exchange rate CAD:AUD 1.0890 - 1.0616 -
Average realized price AUD$/oz 2,498 - 2,421 -
Foreign exchange rate CAD:USD 0.7936 - 0.7978 -
Average realized price USD$/oz 1,821 - 1,819 -
{02438498;1} 5
*Depreciation and depletion are reconciled to aggregate depreciation and depletion in the op erating adjustments in the consolidated
statements of cash flows in the Audited 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 consider ed 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. Refer to the Annual
MD&A for the treatment of depreciation and depletion costs prior and subsequent to the declara tion of commercial
production.
The following table reconciles this non -IFRS measure to the most directly comparable IFRS measure disclosed in the
Annual MD&A and Audited Financial Statements.
*The non-operating payments on lease obligations adjustment i ncludes 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 Audited 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 Audited Financial Statements and is a subset of the share -based payments expense outlined in
Note 20 of the Audited Financial Statements.
In thousands of CAD, except w here noted
For the three months
ended December 31,
2021
For the three
months ended
December 31, 2020
For the year ended
December 31, 2021
For the period ended
December 31, 2020
Gold sold Oz Au 13,023 - 49,232 -
Total cash cost reconciliation
Cost of sales $ 37,768 - 110,767 -
Less: Depreciation and depletion* $ (7,809) - (18,730) -
Less: Silver Revenue (Note 18) $ (52) - (215) -
Less: Site share-based compensation $ - - - -
Total cash costs $ 29,907 - 91,822 -
Cash costs per oz of gold sold $/oz 2,296 - 1,865 -
Foreign exchange rate CAD:AUD 1.0890 - 1.0616 -
Cash costs per oz of gold sold AUD$/oz 2,501 - 1,980 -
Foreign exchange rate CAD:USD 0.7936 - 0.7978 -
Cash costs per oz of gold sold USD$/oz 1,822 - 1,488 -
In thousands of CAD, except w here noted
For the three months
ended December 31,
2021
For the three
months ended
December 31, 2020
For the year ended
December 31, 2021
For the period ended
December 31, 2020
Gold sold Oz Au 13,023 - 49,232 -
All-in sustaining cost reconciliation
Total cash costs $ 29,907 - 91,822 -
Sustaining capital expenditures $ 5,448 - 5,448 -
Accretion on rehabilitation provision (Note 24) $ 138 - 473 -
Treatment and refinery charges $ 72 - 255 -
Payments on lease obligations (Note 13) $ 576 - 11,889 -
Less: non-operating payments on lease obligations* $ (113) (1,155)
Site share-based compensation $ - - - -
Corporate administrative costs (Note 20) $ 5,115 - 25,094 -
Less: exploration share-based payments** $ (211) (4,005)
Total all-in sustaining costs $ 40,932 - 129,821 -
AISC per oz of gold sold $/oz 3,143 - 2,637 -
Foreign exchange rate CAD:AUD 1.0890 - 1.0616 -
AISC per oz of gold sold AUD$/oz 3,423 - 2,799 -
Foreign exchange rate CAD:USD 0.7936 - 0.7978 -
AISC per oz of gold sold USD$/oz 2,494 - 2,104 -
{02438498;1} 6
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, intere st and finance income, current income tax
expense, deferred income tax expense, 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 losse s, gains and losses on the
disposal of assets, impairment, and other income. Refer to the Annual MD&A for the treatment of depreciation and
depletion costs prior and subsequent to the declaration of commercial production.
The following table reconciles this non -IFRS measure to the most directly comparable IFRS measure disclosed in the
Annual MD&A and Audited Financial Statements.
*Depreciation and depletion is reconciled to aggregate depreciation and depletion in the oper ating adjustments in the consolidated
statements of cash flows in the Audited 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 E&E 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. Refer to the
Annual MD&A for the treatment of depreciation and depletion cos ts prior and subsequent to the declaration of
commercial production.
The following table reconciles this non -IFRS measure to the most directly comparable IFRS measure disclosed in the
Annual MD&A and Audited Financial Statements.
In thousands of CAD, except w here noted
For the three months
ended December 31,
2021
For the three months
ended December 31,
2020
For the year ended
December 31, 2021
For the period
ended December
31, 2020
$'000 $'000 $'000 $'000
Net loss for the period (59,304) (10,569) (704) (27,801)
Interest and finance expense 2,422 483 16,428 2,311
Interest and finance income (27) (21) (91) (138)
Current income tax expense / (income) (739) - 7,145 (778)
Deferred income tax expense - - - -
Depreciation and depletion 7,809 1,509 18,730 2,197
EBITDA (49,839) (8,598) 41,508 (24,209)
Other (income) / expenses (Note 23) (2,253) (574) (90,947) (398)
Impairment of non current assets (Note 22) 46,905 - 46,905 -
Adjusted EBITDA (5,187) (9,172) (2,534) (24,607)
In thousands of CAD, except where noted
For the three
months ended
December 31,
2021
For the three
months ended
December 31,
2020
For the year
ended
December 31,
2021
For the period
ended
December 31,
2020
Basic weighted average shares outstanding 245,939,504 230,353,507 239,822,300 198,880,088
Adjusted earning and adjusted basic earnings per shares
reconciliation
Net earnings / (loss) for the period $ (59,304) (10,569) (704) (27,801)
Adjusted for:
Other (income) / expenses (Note 23) $ (2,253) (574) (90,947) (398)
(Loss) / Profit on disposal of exploration asset (Note 6) $ (725) - (14,472) 2,517
Impairment of mine development asset (Note 22) $ 46,905 - 46,905 -
Income tax expense / (benefit) $ (739) - 7,145 (778)
Adjusted earnings $ (16,116) (11,143) (52,073) (28,199)
Adjusted basic earnings per share $/share (0.07) (0.05) (0.22) (0.14)
{02438498;1} 7
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 calcu lation of available liquidity which may not reconcile to the accounting treatment of such marketable
securities. Refer to the Annual MD&A and Notes 5 and 11 of the Audited Financial Statements.
The following table reconciles this non -IFRS measure to the most directly comparable IFRS measure disclosed in the
Annual MD&A and Audited Financial Statements.
*Some of the Company’s New Found shares remain subject to escrow restrictions pursuant to National Instrument 46-201 Escrow for Initial
Public Offerings. As at December 31, 2021, 6,000,000 of the Company’s 15,000,000 New Found shares had been released from escrow.
The Company’s remaining 9,000,000 New Found shares will be released from escrow semi -annually, with 2,250,000 New Found Shares
being released in February and August of each year. As at March 31, 2022, 8,250,000 New Found Shares had been released from escrow.
*As at December 31, 2020, 1,500,000 of the Company’s 15,000,000 New Found shares had been released from escrow. Refer to the
preceding table for further details.
December 31, 2021 December 31, 2020 January 31, 2020 January 31, 2019
$'000 $'000 $'000 $'000
Cash 32,345 40,494 28,703 42,832
Short-term investments 108 195 88 93
Gold in circuit 788 3 - -
Stockpiles 4,732 565 - -
Receivables 6,127 1,806 6,657 1,160
Marketable securities 58,691 16,477 6,979 1,336
Gold specimens 77 83 74 159
Available liquidity 102,868 59,623 42,501 45,580
# 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
Decemeber 31, 2021
# of shares Share price
Foreign
exchange
Adjusted value
$'000
Calidus Resources Limited Ordinary Shares 5,138,537 $0.51 0.9835 2,552
American Pacific Mining Corp. Common Shares 266,666 $0.18 1 47
Essential Metals Limited Ordinary shares 4,450,000 $0.08 0.9835 358
Kalamazoo Resources Limited Ordinary Shares 10,000,000 $0.60 0.9835 5,852
GBM Resources Ltd Ordinary Shares 11,363,637 $0.14 0.9835 1,564
New Found Gold Corp Common Shares * 1,500,000 $4.07 1 6,105
16,477
December 31, 2020
# of shares Share price
Foreign
exchange
Adjusted value
$'000
Calidus Resources Limited Ordinary Shares 5,658,537 $0.26 0.8860 1,309
Kalamazoo Resources Limited Ordinary Shares 10,000,000 $0.64 0.8860 5,670
American Pacific Mining Corp. Common Shares 533,332 $0.06 1 32
Essential Metals Limited Ordinary shares 50,000,000 $0.01 0.8860 576
6,979
January 31, 2020
{02438498;1} 8
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
Annual MD&A and Audited Financial Statements.
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
Annual MD&A and Audited Financial Statements.
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, inclu ding 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 pro duction 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 Octob er 1, 202112 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.
# of shares Share price
Foreign
exchange
Adjusted value
$'000
Calidus Resources Limited Ordinary Shares 56,585,366 $0.02 0.9561 1,302
American Pacific Mining Corp. Common Shares 266,666 $0.13 1 33
Essential Metals Limited Ordinary shares 50,000,000 $0.02 0.9561 813
1,336
January 31, 2019
December 31, 2021 December 31, 2020
$'000 $'000
Current assets 49,385 46,976
Current liabilities 45,460 32,905
Working capital 3,925 14,071
December 31, 2021 December 31, 2020
$'000 $'000
Working capital $ 3,925 14,071
Credit Facility (current) $ 6,339 -
Lease liabilities (current) $ 12,453 10,645
Sumitomo funding liability $ 5,780 6,071
Sumitomo written call option $ 1,083 1,157
Sprott Facility working capital $ 29,580 31,944
Foreign exchange rate CAD:USD 0.7888 0.7854
Sprott Facility working capital USD$ 23,332 25,089
In thousands of CAD, except w here noted