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 May4 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 update1, 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 Company and its contractors.
Supply chain issues are resulting in elevated production costs,
particularly with respect to fuel and other consumables, 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)
https://www.globenewswire.com/NewsRoom/AttachmentNg/cdee5a37-a124-4e4c-a916-1c2f554a7b4fFigure
1: Gold Crown mining areas (Looking North).
https://www.globenewswire.com/NewsRoom/AttachmentNg/c2201e01-eeb7-4df6-bb99-5f4ab28abb4cFigure
2: Edwards mining area (looking South-East).
https://www.globenewswire.com/NewsRoom/AttachmentNg/392ccb19-7acf-45ba-9e8e-807494532caaFigure
3: Grant’s Hill pit with requisite backfilling
complete.
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 20221, 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 an 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, 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. 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 leo@novoresources.com.
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. to 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 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
events 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.
________________________________________________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, 2022.5 This value excludes
the fair value of warrants held in GBM Resources Ltd. Novo’s
ability to dispose of its investments is subject 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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