NVO.TO · 2021-03-31 12:00:00

Preliminary Economic Assessment Beatons Creek Conglomerate GOLD Project

Economic Studies

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Suite 880, 580 Hornby Street

Vancouver, BC, Canada V6C 3B6

PRELIMINARY ECONOMIC ASSESSMENT

BEATONS CREEK CONGLOMERATE GOLD PROJECT

VANCOUVER, BC, March 31, 2021 - Novo Resources Corp. (“Novo” or the “Company”) (TSX: NVO

& NVO.WT; OTCQX: NSRPF) is pleased to announce completion of a preliminary economic assessment

(“PEA”) for the Company’s 100%-owned Beatons Creek conglomerate gold project (“Beatons Creek” or

“Project”), located in the Pilbara region of Western Australia. In addition to the potential viability of

mineral resources at the Project reported by the PEA, Beatons Creek displays significant upside resource

potential from deposit extensions . Novo has identifie d numerous new near -surface exploration targets

across its approximate 1, 250 km2 of land holdings across the Nullagine mining district ( refer to the

Company’s news release dated December 15, 2020).

Beatons Creek PEA highlights:

- The potential for average 100,000 oz conglomerate gold production per year over 6 years for

627,0001 oz potential total production over life of mine (“LOM”), excluding current underground

resources

- Comparable production costs among the field of current and imminent Australian gold

producers: LOM C1 cash costs of US$702/oz and L OM all -in sustaining costs (“ AISC”) of

US$974/oz

- Robust base-case scenario: at a gold price of US$1,700/oz and an A$-US$ foreign exchange rate

of 0.75:1 23, potential for pre-tax US$318 million ( C$400 million) NPV 5% and average annual

EBITDA of US$88 million / post-tax US$250 million (C$315 million) NPV5%

- Synergistic combination of Beatons Creek with pre-existing production infrastructure acquired

pursuant to the acquisition of Millennium Minerals Limited (“ Millennium”) ( refer to the

Company’s news release dated August 8, 2020)

- Considerable upside potential recognized in Beatons Creek conglomerate resource expansion

potential as well as throughout the consolidated Nullagine mining district

The PEA is preliminary in nature, and is based on a mineral resource estimate that includes inferred mineral

resources that are considered too speculative geologically to have the econ omic considerations applied to

them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA will

be realized. Mineral resources that are not mineral reserves do not have demonstrated economic

viability.

1 Current LOM production extends into year 7 with the potential for 23,000 oz in year 7. The potential for 604,000 oz over 6 y ears is rounded to

100,000 oz average gold production per year over the first 6 years of LOM.

2 See “Key Assumptions” section below for further details.

3 Figures are at asset level and do not include repayment of existing debt facility with Sprott Private Resource Lending II (Collector), LP (see the

Company’s news release dated August 8, 2020).

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“Completion of this PEA demonstrates the strength of Beatons Creek,” commented Quinton Hennigh,

Chairman and President of Novo Resources. “The PEA indicates the potential viability of mineral

resources at Beatons Creek, with a competitive AISC of US$974/oz. Given the expansive nature of gold -

bearing conglomerates in the Nullagine region, there is the potential for the resource base to grow through

step-out exploration and support an extension to the LOM. The robust anticipated cash generation reported

by the PEA should support Novo’s exploration activities across its vast holdings in the Pilbara, with further

potential to grow production organically.”

Novo also reports that its board of directors has ratified management’s recommendation to mine the Project

based on the PEA. The Company is currently in the late stages of commissioning Millennium’s Golden

Eagle processing facility (the “Golden Eagle Mill”) and continues to ramp up mining and production into

Q2 2021. 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, 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. Historically, such projects

have a much higher risk of economic and technical failure. There is no guarantee that 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.

Beatons Creek PEA Summary

The PEA was prepared by Jason Froud (BSc Hons, Grad Dip (Fin Mkts), MAIG) and Andrew Grubb (BE

(Mining), FAusIMM) , and peer reviewed by Ian Glacken ( BSc Hons, MSc (Mining Geology), MSc

(Geostatistics) PGCert (comp), DIC, FAusIMM(CP), FAIG, CEng, MIMMM) of Optiro Pty Ltd of Perth,

Australia. Optiro was supported by William George Gosling (BE (Extractive Metallurgy), FAusIMM) of

GR Engineering Services, also of Perth, Australia. The Company plans to file an updated technical report

in respect of Beatons Creek reporting on the PEA, in compliance with National Instrument 43-101 (“NI 43-

101”), under the Company’s profile on the SEDAR website at www.sedar.com within 45 days.

PEA Economics Unit Pre-Tax Post-Tax

NPV5% US$ millions $318 $250

Average annual cash flow US$ millions $64 $50

LOM unlevered cash flow (undiscounted) US$ millions $386 $260

Mine life Years 6

Average annual production over LOM Oz/year 101

LOM production Oz 627

Economic Sensitivities to Gold Price

(post-tax)

Per ounce of gold

(US$)

NPV5%

(US$ millions)

$1,600 $216

$1,700 $250

$1,800 $285

$1,900 $319

$2,000 $354

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The PEA is preliminary in nature, and is based on a mineral resource estimate that includes inferred mineral

resources that are considered too speculative geologically to have the economic considerations applied to

them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA will

be realized.

Opportunities

Novo owns approximately 1,250 km2 of prospective tenure within the Nullagine gold district,

approximately 283 km2 of which was acquired with Millennium, and plans to aggressively pursue near -

term exploration and production opportunities across the gold field. Of highest importance are extensions

of conglomerate gold mineralization around Beatons Creek and a recent conglomerate gold discovery

located approximately 2 km southwest of Beatons Creek called Skyfall ( refer to the Company’s news

release dated November 5, 2020). Novo also sees potential to unlock its other assets across the East Pilbara

region including, but not limited to, its wholly-owned Talga Talga, Virgin Creek, Contact Creek, and Mt.

Elsie projects (refer to Figure 1).

(Figure 1:Map of Novo’s Pilbara tenure.)

PEA Details

Beatons Creek has been explored extensively by various companies since the late 1960’s. The Company

acquired an initial interest in Beatons Creek from Millennium in 2011 (refer to the Company’s news release

dated April 6, 2011) before acquiring a 100% interest in 2015 (refer to the Company’s news release dated

March 26, 2015). The Company most recently announced an updated mineral resource estimate in April

2019 outlining indicated mineral resources comprising 6.6 million tonnes at 2.1 g/ t Au for 457,000 oz

contained gold, with additional inferred mineral resources of 4.3 million tonnes at 3.2 g/t Au for 446,000

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oz contained gold (refer to the resource summary table outlined in Figure 2 as well as the Company’s news

release dated April 1, 2019 and the report (the “Beatons Creek Technical Report”) titled “Amended and

Restated NI 43 -101 Technical Re port: Mineral Resource Update, Beatons Creek Conglomerate Gold

Project, Pilbara Region, Western Australia” dated October 22, 2020 (effective date February 28, 2019 ))

(the “ Beatons Creek Resource ”). Mineral resources that are not mineral reserves do not have

demonstrated economic viability.

Mining and Processing

The Beatons Creek mining plan utilizes conventional open pit mining methods. Iron Mine Contracting Pty

Ltd were awarded preferred contractor status by the Company in November 2020 (refer to the Company’s

news release dated November 18, 2020 ) and have been ramping up commissioning efforts to date .

Mineralized material is stockpiled at a run of mine (“ ROM”) pad at Beatons Creek before being hauled

approximately 14 km to a ROM pad at the Golden Eagle Mill. Mineralized material passes through a single-

stage jaw crusher before being ground to 150 µm utilizing a semi -autogenous grinding (“SAG”) mill.

Gravity recovery is handled by a centrifugal concentrator and intensive cyanidation leach reactor. Leaching

occurs in two tanks, and subsequent carbon adsorption occurs in seven carbon-in-leach tanks, the first three

of which incorporate oxygen addition.

Mining and Processing Summary

Total mineralized material mined (kt) 9,486

Total waste mined (kt) 79,969

LOM strip ratio (W:O) 8.43

Mineralized material milled (kt) 9,486

Head grade (g/t) 2.16

Contained Au (koz) 660

Recovery rate (%) 95%

Recovered Au (koz Au) 627

Figures may not reconcile due to rounding.

The Beatons Creek Resource is as follows:

Open Pit Mineral Resources (oxide and fresh mineralization)