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-month period ended March 31, 2022. 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
“MD&A”) and condensed interim consolidated
financial statements (the “Financial Statements”)
for the three-month period ended March 31, 2022 (“Q1
2022”) which are available under Novo’s profile on SEDAR
(www.sedar.com).
Highlights
-
Revenue of $31.9 million from the sale of 13,364 ounces of gold
from the Company’s Beatons Creek gold project (the “Beatons
Creek Project”) in Q1 2022 at an average realized price1
of $2,389 / A$2,604/ US$1,887 per ounce
-
Cash and cash equivalents of $21.9 million as at March 31,
2022
-
Investment portfolio balance of $135.2 million2 as at March 31,
2022, which included a 9.13% undiluted stake in New Found Gold
Corp. (TSXV: NFG) (“New Found”) worth $113.9
million. Subsequent to March 31, 2022, Novo agreed to sell its
stake in New Found for gross proceeds of C$125.9 million3
-
Continuing focus on high-priority exploration targets, with
exploration spend of $4.0 million
-
$4.1 million was invested in capital projects during Q1 2022,
including $2.1 million on the Beatons Creek Project Fresh drill-out
and feasibility study4 which is expected to be completed in Q3
2022
-
Earnings before interest, taxes, depreciation and amortization
(“EBITDA”)1 of $(2.4) million and adjusted EBITDA1
of $(3.1) million
-
Total cash costs1 of $2,195 / A$2,392 / US$1,733 per ounce sold and
all-in sustaining costs (“AISC”)1 of $2,842 /
A$3,097 / US$2,244 per ounce sold
_______________1 Non-IFRS measure; the
definitions and reconciliations of these measures are included
under “Non-IFRS Measures” below.2 Novo’s ability to dispose of its
investments is subject to certain thresholds under the Sprott
Facility (as defined below). Please refer to the 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 March 31, 2022.3 Refer to the
Company’s news release dated April 12, 2022 and April 27, 2022.
Pricing of the 2nd tranche if subject to section 4.2 of National
Instrument 62-104 Take-Over Bids and Issuer Bids. 4 Refer to the
Company’s news releases dated December 13, 2021 and April 7,
2022.
Financial Highlights
In thousands of CAD, |
|
For the three months ended |
except where noted |
|
March 31, 2022 |
|
March 31, 2021 |
|
Gold
sold |
Oz Au |
13,364 |
|
3,497 |
|
|
|
|
|
Average realized price1 |
$/oz |
2,389 |
|
2,205 |
|
Average realized price1 |
AUD$/oz |
2,604 |
|
2,254 |
|
Average realized price1 |
USD$/oz |
1,887 |
|
1,742 |
|
|
|
|
|
Total revenue |
$ |
31,875 |
|
7,718 |
|
Cost of goods sold |
$ |
(37,375 |
) |
(7,718 |
) |
Net (loss) / income from
operations |
$ |
(8,039 |
) |
4,447 |
|
Other income / (expenses),
net |
$ |
670 |
|
(1,903 |
) |
Finance items |
$ |
(64 |
) |
(1,424 |
) |
Net (loss) / profit for the period after tax |
$ |
(12,933 |
) |
1,120 |
|
Basic
and diluted profit / (loss) per common share |
$/share |
(0.05 |
) |
0.00 |
|
|
|
|
|
EBITDA1 |
$ |
(2,440 |
) |
6,208 |
|
Adjusted EBITDA1 |
$ |
(3,110 |
) |
8,111 |
|
|
|
|
|
Adjusted (loss) / earnings1 |
$ |
(13,603 |
) |
(11,917 |
) |
Adjusted (loss) / earnings per common share1 |
$/share |
(0.06 |
) |
(0.05 |
) |
|
|
|
|
Total cash costs1 |
$/oz |
2,195 |
|
1,223 |
|
Total cash costs1 |
AUD$/oz |
2,392 |
|
1,251 |
|
Total
cash costs1 |
USD$/oz |
1,733 |
|
966 |
|
|
|
|
|
AISC1 |
$/oz |
2,842 |
|
3,429 |
|
AISC1 |
AUD$/oz |
3,097 |
|
3,505 |
|
AISC1 |
USD$/oz |
2,244 |
|
2,708 |
|
|
|
|
|
|
|
Novo generated revenue of $31.9 million from the
sale of 13,364 ounces of gold at an average realized price1 of
$2,389 / A$2,604 / US$1,887 per ounce. 394,382 tonnes of
mineralized material were processed through the Golden Eagle
processing facility (the “Golden Eagle Plant”)
equating to an annual processing rate of approximately 1.6 million
tonnes per annum. Processed material had an average head grade of
1.15 g/t Au with average recovery of 91.4% resulting in 13,378
ounces of gold produced in Q1 20225.
The Company generated a net loss of $(12.9)
million or $(0.05) per share.
EBITDA1 totaled $(2.4) million Q1 2022, and
adjusted EBITDA1 totaled $(3.1) million.
Total cash costs1 were $2,195 / A$2,392 /
US$1,733. AISC1 was $2,842 / A$3,097 / US$2,244. Total cash costs1
and AISC1 are heavily influenced by the number of ounces of gold
sold and are higher than anticipated due to, among other things, a
lower production base than originally forecast.
Adjusted earnings (losses)1 were $(13.6) million
or $(0.06) per share. Adjustments to net earnings (losses) for the
period include minor non-operational income, non-cash foreign
exchange gains, and non-cash gains resulting from the movement in
the fair value of certain marketable securities.
The Company is committed to aggressively
advancing its highly prospective exploration portfolio and
devoted $4.0 million to such efforts. In addition, the Company
is advancing the Beatons Creek project Fresh feasibility study and
incurred $2.1 million through Q1 2022, with an expected completion
date in Q3 20224.
_______________5 Refer to the Company’s news
release dated April 7, 2022.
Financial Position
In thousands of CAD, |
March 31, 2022 |
December 31, 2021 |
December 31, 2020 |
except
where noted |
$'000 |
$'000 |
$'000 |
Cash |
21,783 |
32,345 |
40,494 |
Short-term investments |
155 |
108 |
195 |
Working capital1 |
105,063 |
3,925 |
14,071 |
Sprott Facility adjusted
working capital (USD)1 |
105,237 |
23,332 |
25,089 |
Marketable securities1 |
135,164 |
156,209 |
18,770 |
Available liquidity1 |
99,136 |
102,868 |
59,623 |
Total assets |
427,017 |
462,682 |
456,408 |
Current liabilities excluding
current portion of financial liabilities |
18,813 |
19,805 |
12,083 |
Non-current liabilities
excluding non-current portion of financial liabilities |
35,721 |
36,342 |
28,615 |
Financial liabilities (current
and non-current) |
72,635 |
75,608 |
86,271 |
Total liabilities |
139,665 |
148,420 |
126,969 |
Shareholders' equity |
287,352 |
314,262 |
329,439 |
|
|
|
|
The Company held cash and cash equivalents of
$21.9 million, with a working capital1 balance of $105.1 million.
The Company’s 9.13% undiluted stake in New Found was reclassified
as a current asset as at March 31, 2022 pursuant to sale plans
which culminated in the agreement to sell the New Found investment
in early April 20223.
Ordinary course accounts payable and accrued
liabilities totaled $14.5 million, representing a $1.5 million
decrease from December 31, 2022 and an additional $1.1 million
increase from September 30, 2021. Additional amounts include $1.4
million in employee entitlements, and a $3.0 million accrual
representing the Company’s current estimate of Western Australian
stamp duty payable on the acquisition of Millennium Minerals
Limited (“Millennium”) in 20206 which is currently
being reviewed by the Western Australian Department of Finance and
is expected to be confirmed and paid within 12 months.
The farmin and joint venture arrangement (the
“Agreement”) over the Company’s Egina project with
Sumitomo Corporation of Tokyo, Japan (“Sumitomo”)
was recognized as a set of financial liabilities due to the
Company’s obligation to reimburse Sumitomo for exploration
expenditure funded throughout the tenure of the Agreement if
Sumitomo didn’t elect to form a joint venture with the Company
prior to the expiry of the Agreement. This liability is fair valued
on a quarterly basis. The aggregate fair value 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 convert its interest under the Agreement, and Novo
elected to reimburse Sumitomo through the issuance of 3,382,550
common shares7 with a fair value of $3.2 million based on the
Company’s closing price on April 21, 2022 of $0.96 as compared to
Sumitomo’s aggregate funding of A$7.8 million (approximately $7.2
million) through April 21, 2022.
Current and non-current lease liabilities
represent the amortized cost of various contractual obligations
which are recognized pursuant to IFRS 16 Leases. The amortized cost
of such contractual obligations, which includes (but is not limited
to) the fixed cost component of the Company’s mining contract and
the minimum monthly PhotonAssay guarantee under the Company’s
contract with Intertek8, represents the discounted present value of
contractual obligations over the life of each contract and is
offset to a certain extent by right of use non-current assets.
Importantly, these liabilities represent obligations which are due
over time and decrease over the life of each contract as
contractual provisions are delivered and utilized.
Deferred tax liabilities represent the Company’s
estimate of capital gains tax payable on the fair value of the
Company’s marketable securities, including the investment in New
Found. This amount represents the best estimate of capital gains
tax that would be payable if the Company liquidated its
investments.
The Company’s rehabilitation provision of $35.7
million represents the discounted present value of the aggregate
rehabilitation provision on the Beatons Creek Project and the
rehabilitation provision inherited pursuant to the acquisition of
Millennium6. Amounts are expected to be incurred between 2026 and
2036 based on current life of mine models, starting after mining
has completed at the Beatons Creek Project.
The senior secured credit facility with Sprott
Private Resource Lending II (Collector), LP (the “Sprott
Facility”) remains fully drawn at USD$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. As at March 31, 2022, principal is contractually repayable
commencing December 2022 and quarterly thereafter until September
2024 in eight equal instalments, resulting in the recognition of
$12.5 million as current liabilities to reflect the fact that two
principal payments are contracted to be made within the 12 months
subsequent to March 31, 2022. 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. These covenants were recently
adjusted as a result of the Company’s sale of its New Found
investment3. As at March 31, 2022 and the date of this news
release, the Company is in compliance with Sprott Facility
conditions and covenants, as amended or waived.
_______________6 Refer to the Company’s news
releases dated August 4, 2020 and September 8, 2020.7 Refer to the
Company’s news release dated April 21, 2022. 8 Refer to the
Company’s news release dated May 18, 2021.
Outlook
The Company reiterates its previous production
forecast for the first half of 2022 of 27 koz – 30 koz Au5 assuming
receipt of requisite approvals and ability to manage any further
impact to operations from COVID-19.
Non-IFRS MeasuresCertain
non-IFRS measures have been included in this news release. The
Company believes that these measures, in addition to measures
prepared in accordance with International 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.
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 treatment 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 Financial Statements and MD&A.
In thousands of CAD, |
|
For the three months ended |
except where noted |
|
March 31, 2022 |
|
March 31, 2021 |
|
Revenue from contracts with
customers |
$ |
31,875 |
|
7,718 |
|
Treatment and refining
charges |
$ |
106 |
|
13 |
|
Less: Silver revenue (Note 17
of the Financial Statements) |
$ |
(54 |
) |
(19 |
) |
Gold revenue |
$ |
31,927 |
|
7,712 |
|
Gold sold |
oz |
13,364 |
|
3,497 |
|
Average realized price |
$/oz |
2,389 |
|
2,205 |
|
|
|
|
|
Foreign
exchange rate |
CAD:AUD |
1.0898 |
|
1.0223 |
|
Average realized price |
AUD$/oz |
2,604 |
|
2,254 |
|
|
|
|
|
Foreign
exchange rate |
CAD:USD |
0.7898 |
|
0.7899 |
|
Average
realized price |
USD$/oz |
1,887 |
|
1,742 |
|
|
|
|
|
|
|
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 administrative 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.
The following table reconciles this non-IFRS
measure to the most directly comparable IFRS measure disclosed in
the Financial Statements and MD&A.
In thousands of CAD, |
|
For the three months ended |
except where noted |
|
March 31, 2022 |
|
March 31, 2021 |
|
Gold
sold |
Oz Au |
13,364 |
|
3,497 |
|
|
|
|
|
Total cash cost
reconciliation |
|
|
|
Cost of sales |
$ |
37,375 |
|
7,718 |
|
Less: Depreciation and
depletion* |
$ |
(7,989 |
) |
(3,421 |
) |
Less: Silver Revenue (Note 17
of the Financial Statements) |
$ |
(54 |
) |
(19 |
) |
Total cash costs |
$ |
29,332 |
|
4,278 |
|
Cash costs per oz of gold sold |
$/oz |
2,195 |
|
1,223 |
|
|
|
|
|
Foreign
exchange rate |
CAD:AUD |
1.0898 |
|
1.0223 |
|
Cash costs per oz of
gold sold |
AUD$/oz |
2,392 |
|
1,251 |
|
|
|
|
|
Foreign
exchange rate |
CAD:USD |
0.7898 |
|
0.7899 |
|
Cash costs per oz of gold sold |
USD$/oz |
1,733 |
|
966 |
|
|
|
|
|
|
|
*Depreciation and depletion are reconciled to
aggregate depreciation and depletion in the operating adjustments
in the condensed interim consolidated statements of cash flows in
the 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 considered 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.
The following table reconciles this non-IFRS
measure to the most directly comparable IFRS measure disclosed in
the Financial Statements and MD&A.
In thousands of CAD, |
|
For the three months ended |
except where noted |
|
March 31, 2022 |
|
March 31, 2021 |
|
Gold
sold |
Oz Au |
13,364 |
|
3,497 |
|
|
|
|
|
All-in sustaining cost
reconciliation |
|
|
|
Total cash costs |
$ |
29,332 |
|
4,278 |
|
Sustaining capital
expenditures |
$ |
1,930 |
|
- |
|
Accretion on rehabilitation
provision (Note 21 of the Financial Statements) |
$ |
146 |
|
68 |
|
Treatment and refinery
charges |
$ |
106 |
|
13 |
|
Payments on lease obligations
(Note 13 of the Financial Statements) |
$ |
2,786 |
|
2,208 |
|
Less: non-operating payments
on lease obligations* |
$ |
(112 |
) |
(154 |
) |
Site share-based
compensation |
$ |
- |
|
- |
|
Corporate administrative costs
(Note 19 of the Financial Statements) |
$ |
4,001 |
|
7,645 |
|
Less: exploration share-based
payments** |
$ |
(213 |
) |
(2,068 |
) |
Total all-in sustaining costs |
$ |
37,976 |
|
11,990 |
|
AISC per oz of gold sold |
$/oz |
2,842 |
|
3,429 |
|
|
|
|
|
Foreign
exchange rate |
CAD:AUD |
1.0898 |
|
1.0223 |
|
AISC per oz of gold
sold |
AUD$/oz |
3,097 |
|
3,505 |
|
|
|
|
|
Foreign
exchange rate |
CAD:USD |
0.7898 |
|
0.7899 |
|
AISC per oz of gold sold |
USD$/oz |
2,244 |
|
2,708 |
|
|
|
|
|
|
|
*The non-operating payments on lease obligations
adjustment includes 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 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 Financial
Statements and is a subset of the share-based payments expense
outlined in Note 19 of the Financial Statements.
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/income, current and deferred income
tax expenses and 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
losses, gains and losses on the disposal of assets, impairment, and
other income.
The following table reconciles this non-IFRS
measure to the most directly comparable IFRS measure disclosed in
the Financial Statements and MD&A.
In thousands of CAD, |
For the three months ended |
except where noted |
March 31, 2022 |
|
March 31, 2021 |
|
|
$'000 |
|
$'000 |
|
Net (loss) / profit for the
period |
(12,933 |
) |
1,120 |
|
Interest and finance
expense |
2,514 |
|
1,676 |
|
Interest and finance
income |
(10 |
) |
(9 |
) |
Current income tax expense /
(income) |
- |
|
- |
|
Deferred income tax
expense |
- |
|
- |
|
Depreciation and
depletion* |
7,989 |
|
3,421 |
|
EBITDA |
(2,440 |
) |
6,208 |
|
Other (income) / expenses
(Note 22 of the Financial Statements) |
(670 |
) |
1,903 |
|
Adjusted EBITDA |
(3,110 |
) |
8,111 |
|
|
|
|
|
|
*Depreciation and depletion is reconciled to
aggregate depreciation and depletion in the operating 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 exploration and
evaluation 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.
The following table reconciles this non-IFRS
measure to the most directly comparable IFRS measure disclosed in
the Financial Statements and MD&A.
In thousands of CAD, |
|
For the three months ended |
except where noted |
|
March 31, 2022 |
|
March 31, 2021 |
|
Basic weighted average shares
outstanding |
|
245,939,504 |
|
231,144,281 |
|
Adjusted earnings and
adjusted basic earnings per share reconciliation |
|
|
|
Net earnings / (loss) for the
period |
$ |
(12,933 |
) |
1,120 |
|
Adjusted for: |
|
|
|
Other (income) / expenses
(Note 22 of the Financial Statements) |
$ |
(670 |
) |
1,903 |
|
Profit on disposal of
exploration asset |
$ |
- |
|
(14,940 |
) |
Adjusted earnings |
$ |
(13,603 |
) |
(11,917 |
) |
Adjusted basic earnings per share |
$ |
(0.06 |
) |
(0.05 |
) |
|
|
|
|
|
|
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 calculation of available liquidity which may not reconcile to
the accounting treatment of such marketable securities. Refer to
the MD&A and Notes 5 and 10 of the Financial Statements.
The following table reconciles this non-IFRS
measure to the most directly comparable IFRS measure disclosed in
the Financial Statements and MD&A.
|
March 31, 2022 |
|
December 31, 2021 |
|
|
$'000 |
|
$'000 |
|
Cash |
21,783 |
|
32,345 |
|
Short-term investments |
155 |
|
108 |
|
Gold in circuit |
1,434 |
|
788 |
|
Stockpiles |
3,321 |
|
4,732 |
|
Receivables |
5,188 |
|
6,127 |
|
Marketable securities |
67,178 |
|
58,691 |
|
Gold specimens |
77 |
|
77 |
|
Available liquidity |
99,136 |
|
102,868 |
|
|
|
|
|
|
|
March 31, 2022 |
|
# of shares |
|
Share price |
|
Foreign exchange |
|
Adjusted value$'000 |
Kalamazoo Resources Limited Ordinary Shares |
10,000,000 |
|
$ |
0.35 |
|
0.936 |
|
3,230 |
GBM Resources Ltd Ordinary
Shares |
11,363,637 |
|
$ |
0.13 |
|
0.936 |
|
1,331 |
New Found Gold Corp Common
Shares * |
8,250,000 |
|
$ |
7.59 |
|
1 |
|
62,618 |
|
|
|
|
|
|
67,178 |
|
|
|
|
|
|
|
*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 March 31, 2022,
8,250,000 of the Company’s 15,000,000 New Found shares had been
released from escrow. The Company’s remaining 6,750,000 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.
|
December 31, 2021 |
|
# 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 |
|
|
|
|
|
|
|
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 Financial Statements and MD&A.
|
March 31, 2022 |
December 31, 2021 |
|
$'000 |
$'000 |
Current assets |
152,064 |
49,385 |
Current liabilities |
47,001 |
45,460 |
Working capital |
105,063 |
3,925 |
|
|
|
Sprott Facility Adjusted Working Capital
Sprott Facility adjusted working capital is a
derivation of working capital with a series of adjustments as
permitted pursuant to the Sprott Facility. The Company uses Sprott
Facility adjusted working capital to monitor its compliance against
certain covenants within the Sprott Facility.
The following table reconciles this non-IFRS
measure to the most directly comparable IFRS measure disclosed in
the Financial Statements and MD&A.
In thousands of CAD, except where noted |
|
March 31, 2022$'000 |
|
December 31, 2021$'000 |
|
Working capital |
$ |
105,063 |
|
3,925 |
|
Credit Facility (current) |
$ |
12,496 |
|
6,339 |
|
Lease liabilities
(current) |
$ |
11,015 |
|
12,453 |
|
Sumitomo funding
liability |
$ |
3,575 |
|
5,780 |
|
Sumitomo written call
option |
$ |
1,102 |
|
1,083 |
|
Sprott Facility working capital |
$ |
133,251 |
|
29,580 |
|
|
|
|
|
|
|
Foreign exchange rate |
CAD:USD |
0.7898 |
|
0.7888 |
|
Sprott Facility working capital |
USD$ |
105,237 |
|
23,332 |
|
|
|
|
|
|
|
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, 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, 20219 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.
_______________9 Refer to the Company’s news
release dated October 12, 2021.
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.
ABOUT NOVO
Novo operates its flagship Beatons Creek Project
while exploring and developing its prospective land package
covering approximately 12,500 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, production
forecast for the first half of 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 the MD&A 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.
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