Novo Reports Q1 2022 Financial Results

VANCOUVER, British Columbia, Might 13, 2022 (GLOBE NEWSWIRE) — Novo Assets Corp. (“Novo” or the “Firm”) (TSX: NVO, NVO.WT & NVO.WT.A) (OTCQX: NSRPF) is happy to announce its monetary outcomes for the three-month interval ended March 31, 2022. All quantities are expressed in Canadian {dollars}, except in any other case famous.

This information launch needs to be learn along with Novo’s administration’s dialogue and evaluation (the “MD&A”) and condensed interim consolidated monetary statements (the “Monetary Statements”) for the three-month interval ended March 31, 2022 (“Q1 2022”) which can be found underneath Novo’s profile on SEDAR (www.sedar.com).

Highlights

• Income of $31.9 million from the sale of 13,364 ounces of gold from the Firm’s Beatons Creek gold venture (the “Beatons Creek Mission”) in Q1 2022 at a median realized value¹ of $2,389 / A$2,604/ US$1,887 per ounce

• Money and money equivalents of $21.9 million as at March 31, 2022

• Funding portfolio steadiness of $135.2 million² as at March 31, 2022, which included a 9.13% undiluted stake in New Discovered Gold Corp. (TSXV: NFG) (“New Discovered”) value $113.9 million. Subsequent to March 31, 2022, Novo agreed to promote its stake in New Discovered for gross proceeds of C$125.9 million³

• Persevering with concentrate on high-priority exploration targets, with exploration spend of $4.0 million

• $4.1 million was invested in capital tasks throughout Q1 2022, together with $2.1 million on the Beatons Creek Mission Recent drill-out and feasibility research⁴ which is predicted to be accomplished in Q3 2022

• Earnings earlier than curiosity, taxes, depreciation and amortization (“EBITDA”)¹ of $(2.4) million and adjusted EBITDA¹ of $(3.1) million

• Complete money prices¹ of $2,195 / A$2,392 / US$1,733 per ounce bought and all-in sustaining prices (“AISC”)¹ of $2,842 / A$3,097 / US$2,244 per ounce bought

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1 Non-IFRS measure; the definitions and reconciliations of those measures are included underneath “Non-IFRS Measures” beneath.
2 Novo’s capacity to get rid of its investments is topic to sure thresholds underneath the Sprott Facility (as outlined beneath). Please confer with the MD&A which is obtainable underneath Novo’s profile on SEDAR at www.sedar.com. Novo’s funding in New Discovered Gold Corp. is topic to escrow necessities pursuant to Nationwide Instrument 46-201 Escrow for Preliminary Public Choices. The worth of Novo’s holdings in Elementum 3D, Inc. (“E3D”) is predicated on E3D’s most up-to-date financing value of US$8.00 per unit comprised of 1 widespread share and one-half of 1 widespread share buy warrant. Apart from its funding in E3D and warrant holdings, the truthful worth of Novo’s investments is predicated on closing costs of its investments and related international exchanges price as at March 31, 2022.
3 Discuss with the Firm’s information launch dated April 12, 2022 and April 27, 2022. Pricing of the two^nd tranche if topic to part 4.2 of Nationwide Instrument 62-104 Take-Over Bids and Issuer Bids.
4 Discuss with the Firm’s information releases dated December 13, 2021 and April 7, 2022.

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Monetary Highlights

Novo generated income of $31.9 million from the sale of 13,364 ounces of gold at a median realized value¹ of $2,389 / A$2,604 / US$1,887 per ounce. 394,382 tonnes of mineralized materials have been processed by means of the Golden Eagle processing facility (the “Golden Eagle Plant”) equating to an annual processing price of roughly 1.6 million tonnes every year. Processed materials had a median head grade of 1.15 g/t Au with common restoration of 91.4% leading to 13,378 ounces of gold produced in Q1 2022⁵.

The Firm generated a internet lack of $(12.9) million or $(0.05) per share.

EBITDA¹ totaled $(2.4) million Q1 2022, and adjusted EBITDA¹ totaled $(3.1) million.

Complete money prices¹ have been $2,195 / A$2,392 / US$1,733. AISC¹ was $2,842 / A$3,097 / US$2,244. Complete money prices¹ and AISC¹ are closely influenced by the variety of ounces of gold bought and are larger than anticipated resulting from, amongst different issues, a decrease manufacturing base than initially forecast.

Adjusted earnings (losses)¹ have been $(13.6) million or $(0.06) per share. Changes to internet earnings (losses) for the interval embrace minor non-operational revenue, non-cash international change positive factors, and non-cash positive factors ensuing from the motion within the truthful worth of sure marketable securities.

The Firm is dedicated to aggressively advancing its extremely potential exploration portfolio and devoted $4.0 million to such efforts. As well as, the Firm is advancing the Beatons Creek venture Recent feasibility research and incurred $2.1 million by means of Q1 2022, with an anticipated completion date in Q3 2022⁴.

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5 Discuss with the Firm’s information launch dated April 7, 2022.

Monetary Place

The Firm held money and money equivalents of $21.9 million, with a working capital¹ steadiness of $105.1 million. The Firm’s 9.13% undiluted stake in New Discovered was reclassified as a present asset as at March 31, 2022 pursuant to sale plans which culminated within the settlement to promote the New Discovered funding in early April 2022³.

Abnormal course accounts payable and accrued liabilities totaled $14.5 million, representing a $1.5 million lower from December 31, 2022 and an extra $1.1 million improve from September 30, 2021. Extra quantities embrace $1.4 million in worker entitlements, and a $3.0 million accrual representing the Firm’s present estimate of Western Australian stamp obligation payable on the acquisition of Millennium Minerals Restricted (“Millennium”) in 2020⁶ which is at present being reviewed by the Western Australian Division of Finance and is predicted to be confirmed and paid inside 12 months.

The farmin and three way partnership association (the “Settlement”) over the Firm’s Egina venture with Sumitomo Company of Tokyo, Japan (“Sumitomo”) was acknowledged as a set of monetary liabilities because of the Firm’s obligation to reimburse Sumitomo for exploration expenditure funded all through the tenure of the Settlement if Sumitomo didn’t elect to type a three way partnership with the Firm previous to the expiry of the Settlement. This legal responsibility is truthful valued on a quarterly foundation. The combination truthful worth of the liabilities decreased from $6.9 million as at December 31, 2021 to $4.7 million as at March 31, 2022. Subsequent to March 31, 2022, Sumitomo elected to transform its curiosity underneath the Settlement, and Novo elected to reimburse Sumitomo by means of the issuance of three,382,550 widespread shares⁷ with a good worth of $3.2 million based mostly on the Firm’s closing value on April 21, 2022 of $0.96 as in comparison with Sumitomo’s combination funding of A$7.8 million (roughly $7.2 million) by means of April 21, 2022.

Present and non-current lease liabilities signify the amortized price of assorted contractual obligations that are acknowledged pursuant to IFRS 16 Leases. The amortized price of such contractual obligations, which incorporates (however isn’t restricted to) the mounted price part of the Firm’s mining contract and the minimal month-to-month PhotonAssay assure underneath the Firm’s contract with Intertek⁸, represents the discounted current worth of contractual obligations over the life of every contract and is offset to a sure extent by proper of use non-current property. Importantly, these liabilities signify obligations that are due over time and reduce over the life of every contract as contractual provisions are delivered and utilized.

Deferred tax liabilities signify the Firm’s estimate of capital positive factors tax payable on the truthful worth of the Firm’s marketable securities, together with the funding in New Discovered. This quantity represents the perfect estimate of capital positive factors tax that will be payable if the Firm liquidated its investments.

The Firm’s rehabilitation provision of $35.7 million represents the discounted current worth of the combination rehabilitation provision on the Beatons Creek Mission and the rehabilitation provision inherited pursuant to the acquisition of Millennium⁶. Quantities are anticipated to be incurred between 2026 and 2036 based mostly on present lifetime of mine fashions, beginning after mining has accomplished on the Beatons Creek Mission.

The senior secured credit score facility with Sprott Non-public Useful resource Lending II (Collector), LP (the “Sprott Facility”) stays totally drawn at USD$40 million. Curiosity accrues on the excellent principal quantity of the Sprott Facility at a price of 8% every year plus the larger of (i) US three-month LIBOR and (ii) 1.00%. All curiosity is payable in money on a month-to-month foundation. As at March 31, 2022, principal is contractually repayable commencing December 2022 and quarterly thereafter till September 2024 in eight equal instalments, ensuing within the recognition of $12.5 million as present liabilities to replicate the truth that two principal funds are contracted to be made throughout the 12 months subsequent to March 31, 2022. The provision of the Sprott Facility is topic to sure situations and covenants, together with the upkeep of minimal unrestricted money and dealing capital balances after sure changes. These covenants have been not too long ago adjusted on account of the Firm’s sale of its New Discovered funding³. As at March 31, 2022 and the date of this information launch, the Firm is in compliance with Sprott Facility situations and covenants, as amended or waived.

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6 Discuss with the Firm’s information releases dated August 4, 2020 and September 8, 2020.
7 Discuss with the Firm’s information launch dated April 21, 2022.
8 Discuss with the Firm’s information launch dated Might 18, 2021.

Outlook

The Firm reiterates its earlier manufacturing forecast for the primary half of 2022 of 27 koz – 30 koz Au⁵ assuming receipt of requisite approvals and talent to handle any additional influence to operations from COVID-19.

Non-IFRS Measures
Sure non-IFRS measures have been included on this information launch. The Firm believes that these measures, along with measures ready in accordance with Worldwide Monetary Reporting Requirements (“IFRS”), present readers with an improved capacity to judge its underlying efficiency and to match it to data reported by different firms. The non-IFRS measures are meant to offer further data and shouldn’t be thought of in isolation or as an alternative choice to measures of efficiency ready in accordance with IFRS. These measures don’t have any standardized which means prescribed underneath IFRS, and due to this fact is probably not similar to related measures introduced by different firms.

Common Realized Value

The Firm makes use of the typical realized value per ounce of gold bought to higher perceive the gold value and, as soon as relevant, money margin realized all through a interval.

Common realized value is calculated as income from contracts with clients plus therapy and refinery costs included in dore income much less silver income divided by gold ounces bought.

The next desk reconciles this non-IFRS measure to probably the most immediately comparable IFRS measure disclosed within the Monetary Statements and MD&A.

Complete Money Prices

The Firm experiences complete money prices on a per gold ounce bought foundation. Along with measures ready in accordance with IFRS, equivalent to income, the Firm believes this data can be utilized to judge its efficiency and talent to generate working earnings and money movement from its mining operations. The Firm makes use of this metric to observe working price efficiency.

Complete money prices embrace price of gross sales equivalent to mining, processing, mine basic and administrative prices, royalties, promoting prices, and modifications in inventories much less non-cash depreciation and depletion, write-down of inventories and web site share-based funds the place relevant, and silver income divided by gold ounces bought to reach at complete money prices per ounce of gold bought.

The next desk reconciles this non-IFRS measure to probably the most immediately comparable IFRS measure disclosed within the Monetary Statements and MD&A.

*Depreciation and depletion are reconciled to combination depreciation and depletion within the working changes within the condensed interim consolidated statements of money flows within the Monetary Statements.

All-in Sustaining Prices

The Firm believes that AISC extra totally defines the full prices related to producing gold. AISC is calculated based mostly on the definitions printed by the World Gold Council (“WGC”). The WGC isn’t a regulatory group. The Firm calculates AISC because the sum of complete money prices (as described above), sustaining capital expenditures (excluding important tasks thought of expansionary in nature), accretion on decommissioning and restoration provisions, therapy and refinery costs, funds on lease obligations, web site share-based funds the place relevant, and company administrative prices much less any share-based funds immediately attributable to exploration and non-operating funds on lease obligations, all divided by gold ounces bought through the interval to reach at a per ounce quantity.

Different firms could calculate this measure otherwise on account of variations in underlying rules and insurance policies utilized. Variations may come up resulting from a distinct definition of sustaining versus enlargement capital.

The next desk reconciles this non-IFRS measure to probably the most immediately comparable IFRS measure disclosed within the Monetary Statements and MD&A.

*The non-operating funds on lease obligations adjustment contains lease quantities which aren’t immediately associated to the Firm’s operations on the Beatons Creek Mission. This determine isn’t individually disclosed within the Monetary Statements.
**Share-based fee bills immediately attributable to the Firm’s exploration workers are excluded from the calculation of AISC. This determine isn’t individually disclosed within the Monetary Statements and is a subset of the share-based funds expense outlined in Notice 19 of the Monetary Statements.

EBITDA

The Firm makes use of EBITDA to higher perceive its capacity to generate liquidity by producing working money movement to fund working capital wants, service debt obligations, and fund capital expenditures.

EBITDA is outlined as internet earnings earlier than curiosity and finance expense/revenue, present and deferred revenue tax bills and depreciation and depletion. EBITDA can also be adjusted for non-recurring transactions such because the change in truthful worth of by-product devices, international exchanges positive factors and losses, positive factors and losses on the disposal of property, impairment, and different revenue.

The next desk reconciles this non-IFRS measure to probably the most immediately comparable IFRS measure disclosed within the Monetary Statements and MD&A.

*Depreciation and depletion is reconciled to combination depreciation and depletion within the working changes within the consolidated statements of money flows within the Audited Monetary Statements.

Adjusted Earnings and Adjusted Fundamental and Diluted Earnings per Share

The Firm makes use of adjusted earnings and adjusted primary and diluted earnings per share to measure its underlying working and monetary efficiency.

Adjusted earnings are outlined as internet earnings adjusted to exclude particular objects which might be important, however not reflective of the Firm’s underlying operations, together with: international change (acquire) loss, (acquire) loss on monetary devices at truthful worth, impairment, and non-recurring positive factors and losses on therapy of marketable securities, sale of exploration and analysis property, and related tax impacts. Adjusted primary and diluted earnings per share are calculated utilizing the weighted common variety of shares excellent underneath the fundamental and diluted methodology of earnings per share as decided underneath IFRS.

The next desk reconciles this non-IFRS measure to probably the most immediately comparable IFRS measure disclosed within the Monetary Statements and MD&A.

Accessible Liquidity

The Firm believes that obtainable liquidity offers an correct measure of the Firm’s capacity to liquidate property in an effort to fulfill its liabilities. The Firm makes use of this metric to assist monitor its threat profile.

Accessible liquidity contains money, short-term investments, and property that are readily saleable throughout the subsequent 12 months, together with gold in circuit and stockpiles, receivables, marketable securities (to the extent that a longtime market exists for such marketable securities, they’re freed from any long-term buying and selling restrictions, and ample historic quantity exists to liquidate holdings inside 12 months), and gold specimens. The market worth of sure marketable securities has been used within the calculation of obtainable liquidity which can not reconcile to the accounting therapy of such marketable securities. Discuss with the MD&A and Notes 5 and 10 of the Monetary Statements.

The next desk reconciles this non-IFRS measure to probably the most immediately comparable IFRS measure disclosed within the Monetary Statements and MD&A.

*A number of the Firm’s New Discovered shares stay topic to escrow restrictions pursuant to Nationwide Instrument 46-201 Escrow for Preliminary Public Choices. As at March 31, 2022, 8,250,000 of the Firm’s 15,000,000 New Discovered shares had been launched from escrow. The Firm’s remaining 6,750,000 New Discovered shares shall be launched from escrow semi-annually, with 2,250,000 New Discovered Shares being launched in February and August of every 12 months.

Working Capital

Working capital is outlined as present property much less present liabilities and is used to observe the Firm’s liquidity.

The next desk reconciles this non-IFRS measure to probably the most immediately comparable IFRS measure disclosed within the Monetary Statements and MD&A.

Sprott Facility Adjusted Working Capital

Sprott Facility adjusted working capital is a derivation of working capital with a collection of changes as permitted pursuant to the Sprott Facility. The Firm makes use of Sprott Facility adjusted working capital to observe its compliance in opposition to sure covenants throughout the Sprott Facility.

The next desk reconciles this non-IFRS measure to probably the most immediately comparable IFRS measure disclosed within the Monetary Statements and MD&A.

CAUTIONARY STATEMENT

The choice by the Firm to supply on the Beatons Creek Mission was not based mostly on a feasibility research of mineral reserves demonstrating financial and technical viability and, consequently, there may be an elevated uncertainty of attaining any explicit degree of restoration of minerals or the price of such restoration, together with elevated dangers related to growing a commercially mineable deposit. Manufacturing has not achieved forecast so far. Traditionally, such tasks have a a lot larger threat of financial and technical failure. There is no such thing as a assure that anticipated manufacturing prices shall be achieved. Failure to realize the anticipated manufacturing prices would have a fabric hostile influence on the Firm’s money movement and future profitability.

The Firm cautions that its declaration of economic manufacturing efficient October 1, 2021⁹ solely signifies that the Beatons Creek venture was working at anticipated and sustainable ranges and it doesn’t point out that financial outcomes shall be realized.

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9 Discuss with the Firm’s information launch dated October 12, 2021.

QP STATEMENT

Dr. Quinton Hennigh (P.Geo.) is the certified individual, as outlined underneath Nationwide Instrument 43-101 Requirements of Disclosure for Mineral Initiatives, accountable for, and having reviewed and authorised, the technical data contained on this information launch. Dr. Hennigh is the non-executive co-chairman and a director of Novo.

ABOUT NOVO

Novo operates its flagship Beatons Creek Mission whereas exploring and growing its potential land bundle overlaying roughly 12,500 sq. kilometres within the Pilbara area of Western Australia. Along with the Firm’s major focus, Novo seeks to leverage its inside geological experience to ship value-accretive alternatives to its shareholders. For extra data, please contact Leo Karabelas at (416) 543-3120 or e-mail leo@novoresources.com.

On Behalf of the Board of Administrators,

Novo Assets Corp.

“Michael Spreadborough”

Michael Spreadborough

Govt Co-Chairman

Ahead-looking data

Some statements on this information launch comprise forward-looking data (throughout the which means of Canadian securities laws) together with, with out limitation, manufacturing forecast for the primary half of 2022. These statements tackle future occasions and situations and, as such, contain identified and unknown dangers, uncertainties and different components which can trigger the precise outcomes, efficiency or achievements to be materially completely different from any future outcomes, efficiency or achievements expressed or implied by the statements. Such components embrace, with out limitation, customary dangers of the useful resource trade and the chance components recognized within the MD&A which is obtainable underneath Novo’s profile on SEDAR at www.sedar.com. Ahead-looking statements converse solely as of the date these statements are made. Besides as required by relevant regulation, Novo assumes no obligation to replace or to publicly announce the outcomes of any change to any forward-looking assertion contained or integrated by reference herein to replicate precise outcomes, future occasions or developments, modifications in assumptions or modifications in different components affecting the forward-looking statements. If Novo updates any forward-looking assertion(s), no inference needs to be drawn that the Firm will make further updates with respect to these or different forward-looking statements.