Nullagine GOLD Production Update Key Points
Suite 880, 580 Hornby Street
Vancouver, BC, Canada V6C 3B6
P: +1-416-543-3120 E: [email protected] www.novoresources.com
July 6, 2022
NULLAGINE GOLD PRODUCTION UPDATE
KEY POINTS
• No lost-time injuries were recorded during Q2 2022 or H1 2022
• Q2 2022 production of 12,610 oz Au, which totals 25,988 oz Au for H1 2022 and is in line with revised
guidance0F
1
• Q2 2022 revenue of C$29.7 million (A$32.6 million)1F
2 from the sale of 12,378 oz Au
• Q3 2022 production forecast of 9 – 11 koz Au, with drawdown of inventory expected to add an additional
1 koz Au in Q4 2022 as Phase One Oxide operations at Beatons Creek wind down through October 20221
• Cash balance as at June 30, 2022 of C$74.8 million2, which will support ongoing and extensive exploration
programs and completion of resource and extension drilling at the Beatons Creek Fresh mineral resource1
• Novo s till awaiting a response from the Western Australian Environmental Protection Authority on
requisite approval pathway to commence Phase Two operations of the Fresh mineral resource at Beatons
Creek1
• Beatons Creek Fresh mineral resource feasibility study progressing as planned and expected to be
completed in Q4 20223
Table 1: Key Operational and Financial Figures2
Q4 2021 Q1 2022 Q2 2022
Mining (tonnes) 434,133 395,824 421,981
Processing (tonnes) 395,310 394,382 398,830
Grade (g/t Au) 1.16 1.15 1.02
Recovery (%) 91.5% 91.4% 93.5%
Gold Production (oz Au) 12,833 13,378 12,610
Revenue (C$M) $29.9 $31.9 $29.7
Cash and Cash Equivalents (C$M) $32.5 $22.0 $74.8
VANCOUVER, BC - Novo Resources Corp. (“Novo” or the “Company”) (TSX: NVO , NVO.WT & NVO.WT.A)
(OTCQX: NSRPF) provides a 2022 second quarter (“Q2 2022”) operational update from the Beatons Creek gold
project (“ Beatons Creek ”) and the Golden Eagle processing facility (“ Golden Eagle Plant ”), located in
Nullagine, Western Australia.
“Q2 2022 and H1 2022 have been critical periods for Novo, ” commented Mr. Mike Spreadborough, Novo’s
Executive Co-Chairman, Acting CEO, and director. “ Despite operational setbacks with the Golden Eagle Plant
in late May 4 and the decision to pause operations at Beatons Creek, our safety and operational performance
has been excellent, which is a credit to our operations team. As outlined in our recent operations update 1, we
have a detailed growth plan in place and are focused on delivering the feasibility study in Q4 2022, continuing
aggressive exploration, and working with government on the approvals to restart Beatons Creek.”
BEATONS CREEK PROJECT
Safety and COVID-19 Update
During Q2 2022 and H1 2022, Novo did not record any lost time injuries.
The Company is still experiencing impacts from COVID -19, particularly with respect to its workforce ;
mandatory isolation for positive personnel and close contacts is temporarily impacting staffing levels for the
1 Refer to the Company’s news release dated June 14, 2022.
2 These financial figures are unaudited and may differ from final results due to foreign exchange and rounding differences.
3 Refer to the Company’s news release dated June 14, 2022.
4 Refer to the Company’s news release dated May 24, 2022.
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Company and its contractors. Supply chain issues are resulting in elevated production costs, particularly with
respect to fuel and other consuma bles, however best efforts have been made to mitigate the impacts of the
pandemic through the adoption of sound risk management processes. The Company intends to manage such
impacts throughout remaining operations at Beatons Creek but remains cautious that they may also affect
other aspects of the Company’s business, including exploration activities.
Operations
422 kt of mineralized material were mined from the Edwards and Gold Crown areas of Beatons Creek (refer to
Figure 1 and Figure 2 below). Backfilling of the Grant ’s Hill pit will be completed in compliance with
environmental requirements during the pause in operations1 (refer to Figure 3 below).
Figure 1: Gold Crown mining areas (Looking North).
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Figure 2: Edwards mining area (looking South-East).
Figure 3: Grant’s Hill pit with requisite backfilling complete.
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The Golden Eagle Plant processed 399 kt in Q2 2022, with an average head grade of 1.02 g/t Au.
Gold production totalled 12,610 ounces and recovery rates of approximately 93.5% were achieved in Q2 2022.
The Company expects to produce 9 – 11 koz Au in Q3 2022 and an additional 1 koz Au via the drawdown of
inventory through October 2022 1, assuming the Company’s ability to manage any impact to operations from
COVID-19.
Novo Financial Position
Novo’s cash balance as at June 30, 2022 was C$74.8 million2.
In addition to its existing cash reserves, the Company has a n investment portfolio with a fair value of
approximately C$58 million as at June 30, 20225. This includes the Company’s 6.75 million remaining shares of
New Found Gold Corp. which the Company has agreed to sell to Eric Sprott, the closing of which is scheduled
to occur in August 20226.
Q2 2022 gold sales totalled 12,378 ounces of gold and 1,502 ounces of silver for gross revenue of C$29.7
million (A$32.6 million)2. Novo sells its gold in Australian dollars to ABC Refinery of Sydney, Australia and
continues to enjoy strong gold price performance in Australian dollar terms.
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.
CAUTIONARY STATEMENT
The decision by the Company to produce at Beatons Creek was not based on a feasibility study of mineral
reserves demonstrating economic and technical viability and, as a result, the re 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, 20217 only indicates
that Beatons Creek was operating at anticipated and sustainable levels and it does not indicate that economic
results will be realized.
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 [email protected].
5 This value excludes the fair value of warrants held in GBM Resources Ltd. Novo’s ability to dispose of its investments is sub ject to certain thresholds pursuant to its senior secured credit facility with
Sprott Private Resource Lending II (Collector), LP. Please refer to the Company’s management discussion and analysis for the three months ended March 31, 2022, 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. Except for its investment in E3D, 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.
6 Refer to the Company’s news release dated April 12, 2022 and April 27, 2022, as well as the Company’s management discussion and analysis for the three-month period ended March 31, 2022 which is
available on the Company’s profile on SEDAR at www.sedar.com.
7 Refer to the Company’s news release dated October 12, 2021.
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On Behalf of the Board of Directors,
Novo Resources Corp.
“Michael Spreadborough”
Michael Spreadborough
Executive Co-Chairman
Forward-looking information
Some statements in this news release contain forward -looking information (within the meaning of Canadian
securities legislation) including, without limitation, that Novo will produce 9 – 11 koz Au in Q3 2022 and an
additional 1 koz Au in Q4 2022 from the drawdown of inventory, that Novo’s cash balance will support on-
going exploration programs and completion of resource and extension drilling at the Beatons Creek Fresh
mineral resource, that the feasibility study is expected to be completed in Q4 2022, that Novo intends to
manage the impacts of COVID-19 throughout remaining operations at Beatons Creek, and that Novo expects
to complete the sale of its 6.75 million shares in New Found Gold Corp. t o Eric Sprott in August 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 Novo’s
management’s discussion and analysis for the three-month period ended March 31, 2022, 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 obligatio n 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 affect ing 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.