Egina Gold Project - NOVO Resources Corp....whether Egina gold nuggets indeed react sufficiently to reliably be separated from waste material (please see links to videos 1 and 2 below)

NOVO RESOURCES CORP. AMENDED AND RESTATED

INTERIM MD&A – QUARTERLY HIGHLIGHTS APRIL 30, 2018

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This interim Management Discussion and Analysis – Quarterly Highlights (the “Interim MD&A”) has been prepared as of September 30, 2019. This Interim MD&A updates disclosure previously provided in Novo Resources Corp.’s (“Novo” or the “Company”) annual MD&A, up to the date of this Interim MD&A, and should be read in conjunction with our amended and restated condensed interim consolidated financial statements for the three-month period ended April 30, 2018 (the “Interim Financial Statements”), the audited amended and restated consolidated financial statements for the year ended January 31, 2018 (the “Audited Financial Statements”) and the annual MD&A for the year ended January 31, 2018 (the “Annual MD&A”). The Interim Financial Statements have been prepared by management in accordance with International Financial Reporting Standards (“IFRS”) and all amounts are expressed in Canadian dollars unless otherwise noted. Our accounting policies are described in note 2 of our Audited Financial Statements. Additional information relating to the Company is available on SEDAR at www.sedar.com. Caution on Forward-Looking Information This MD&A may include forward-looking statements and forward-looking information, such as estimates and statements that describe the Company’s future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements and forward-looking information addresses future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.

Egina Gold Project

On September 16, 2019, the Company announced that it completed encouraging gold processing trials at the Steinert GmbH testing facility in Cologne, Germany. Highlights:

- Preliminary tests of eddy current separator (“ECS”) technology indicate promising potential to directly extract gold nuggets from gravel. ECS technology is one of several dry processing methodologies being considered by Novo for gold recovery at its expansive Egina terrace gravel gold project.

- Tests conducted on a spectrum of nugget sizes ranging from 1-10 mm demonstrated consistently high gold nugget recovery via ECS technology. Nuggets that underwent testing were recently extracted from gravels at Egina.

- In addition to ECS technology, Novo conducted initial testing of Steinert mechanical sorting technology to detect small gold nuggets utilizing an Argos EM electro-magnetic sensor. Fine gold nuggets, approximately 1 mm, were consistently and readily detected indicating potential for direct mechanical sorting of gold nuggets.

- A combination of mechanical sorting and ECS technology is also being considered as a potentially viable means of dry processing at Egina.

Phase one of the Company’s joint venture with Sumitomo Corporation at the Egina gold project centres around gaining a better understanding of geology (grade, continuity, controls, gold particle size distribution, gold location within gravels, gold genesis etc.) but also involves high level desktop studies and trials to develop potential future processing and mining methodologies. Eddy current separators are predominantly used to recover select metals in the scrap metal industry. Material is fed onto a conveyor, the head pulley of which contains an adjustable high-powered magnet spinning at very high rotation rates, 4,000 rpm in Novo’s tests, independent of the speed of the conveyor. This spinning magnet induces an alternating magnetic field that differentially repels non-magnetic metals such as gold. This magnetic repulsion causes gold nuggets to lift, or fling, off the end of the conveyor belt where they can be separated from waste material by a steel plate. These trials were designed to establish

http://www.sedar.com/



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whether Egina gold nuggets indeed react sufficiently to reliably be separated from waste material (please see links to videos 1 and 2 below). Gold at Egina predominantly occurs as free nuggets of which most are above 1mm in size. This presents opportunity to explore innovative technologies, some used commercially in other applications such as ECS technology, to assess their efficacy for use at the Egina gold project. ECS Testing:

- Testing was conducted upon two size fractions of gravel material sourced from Novo’s Egina project. Gravel was seeded with a range of nugget sizes down to 1mm size. Nuggets were recently recovered from the Company’s IGR3000 alluvial test plant being used to process bulk samples at Egina.

- 3-10mm size fraction results: o Nine nuggets ranging in size from 3 to 10mm were introduced into the gravels and seven

tests were conducted, with nine out of nine nuggets being recovered in six tests and eight out of nine nuggets being recovered in one test. In the latter test, the smallest nugget was unrecovered.

o Collation of these results indicates over 99% nugget recovery, higher by weight. o No waste particles were evident in the concentrate stream in any of these tests.

- 1-3mm size fraction results: o Greater than 90% of gold by weight was recovered from gravels during multiple tests. o A minor amount of ‘over-sort’, or waste material, was concentrated with gold, though

representing significantly less mass than gold in the concentrate. - Simulated testing was also conducted for nuggets contained within rock and clay matrix, an

occurrence that represents a very minor proportion of gold observed in the field. It was observed that where gold made up over half of the mass of the particle, it responded sufficiently favorable for the ECS to allow differential separation.

- Simulated testing was also conducted to assess the potential impacts of moisture, and whilst quantitative analysis was not undertaken in the time allotted, it is evident that moisture is likely to have some impact upon recovery efficiency. Novo thinks this effect might be mitigated by measures including dry screening prior to processing.

Mechanical Sorter Testing: To better understand the ability of Steinert mechanical sorting machines to separate free gold nuggets, four nuggets of around 1mm each were affixed to the conveyor belt and scanned by an Argos EM electro magnetic sensor. All 4 nuggets were reliably detected through each conveyor belt rotation, indicating a reasonable level of certainty of this technology being able to recover gold particles at least down to the 1mm size fraction. Next Steps: It is clear from this encouraging preliminary testing that ECS technology can play an important role at Egina, with potential application as a processing solution or an exploration tool, or both. This technology generates significant inherent advantages. It requires no water, no chemicals, is of low capital cost and is readily mobile. It can also be employed along with other technologies and is scalable. Novo thinks field tests are warranted at larger scale to better understand recovery efficiencies, operating costs and throughput rates. The Company plans further work further with Steinert to study schemes in which ECS machines, or ECS machines in combination with mechanical sorting technology, can achieve efficient recovery of gold nuggets at Egina. As Novo learns more about gold size particle and mass distribution of gold in Egina gravels, the Company can then begin to estimate gold recovery. As mentioned above, ECS technology is one of a range of technologies being considered, all with the common attributes of requiring no water, no chemicals, low capital outlay, and being mobile and flexible.



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Video 1: Merged videos and photos showing rear view, side view, concentrate and waste streams for 3mm-10mm feed - https://www.youtube.com/watch?v=-kTmA_CoR48 Video 2: Merged videos and photos showing feed blend nuggets excitation in magnetic field, rear view, side view for 1mm-3mm feed - https://www.youtube.com/watch?v=0ZxgudXbbS8 On September 9, 2019, the Company announced that the Kariyarra Aboriginal Corporation have completed

a heritage survey over the entirety of tenement M47/560 and portions of tenement E47/2502. The

Company’s planned exploration program for all priority target areas can now continue.

On August 22, 2019, the Company announced positive results from its Egina gold project, Western

Australia. Novo has recovered significant coarse gold from bulk samples of surface gravels collected from

test pits excavated next to its first exploration trench, where encouraging results were announced

previously.

Highlights:

• Metal detecting and gravity processing of 281.9 cubic meters of surface lag gravels yielded a total

of 292.38 grams of coarse gold nuggets.* Of particular note, sample EGBS016 yielded 118.59

grams of gold nuggets from 80.3 cubic meters of gravel, and sample EGBS017 yielded 123.47

grams of gold nuggets from 66.8 cubic meters of gravel (please refer to nearby table of results and

Figure 1 for sample locations). Novo considers these results very encouraging given many alluvial

gold deposits display grades significantly below one gram per cubic meter.

• Gold-bearing gravels lie at surface under a thin veneer of sandy soil. Novo is currently evaluating

extraction options that are potentially simple and cheap including continuous mining methods.

• All gold discussed in this Interim MD&A is coarser than one mm (Figure 2). Such coarse gold

presents opportunity for simple and cheap extraction methods including “dry” techniques that do not

require water. Novo is currently investigating use of mobile eddy current separators and other

effective, state-of-the-art processing technologies as potentially viable methods of gold recovery.

• Bulk sampling was undertaken across a 64-m wide nugget-rich zone within a broad topographic

depression, or swale, identified by ground penetrating radar (“GPR”). Novo is growing more

confident that GPR can help identify target areas to help guide future exploration.

• The combination of exploration trenching and metal detecting followed up by bulk sampling and

processing has proved to be highly effective at evaluating the gold-bearing gravel potential of the

vast terrace at Egina. Upon upcoming heritage clearance, Novo anticipates expanding such

exploration activity elsewhere within the Egina mining lease.

* These nuggets are not necessarily indicative or representative of mineralization at the Egina project.

Table of coarse gold recoveries from four bulk samples at Egina:

Coarse Gold Fine Gold

Bulk

Sample

Pit

Position

in

Swale

Volume

(cubic

m)

Gold Nuggets

Metal

Detected

While

Excavating

Bulk Sample

(grams)A

Gold Nuggets

Metal

Detected in

+5 mm

Oversize

Material

(grams)A

Gold Nuggets

from Sluice

+1 mm

(grams)A

Gold Nuggets

Recovered by

IGR 3000 +1

mm (grams)A

Total Coarse

Gold Nuggets

(grams)A

Gold in

Shaker Table

Concentrate

(grams)B

Gold in

Shaker Table

Tailings

(grams)C

Gold in IGR

3000 Tailings

(grams)C

Total Fine

Gold (grams)

https://www.youtube.com/watch?v=-kTmA_CoR48

https://www.youtube.com/watch?v=0ZxgudXbbS8



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EGBS016 Middle 80.3 63.9D 0.0 30.71 23.98 118.59 In Progress In Progress In Progress In Progress

EGBS017 Middle 66.8 77.4 0.0E 30.67 15.40 123.47 In Progress In Progress In Progress In Progress

EGBS018

South

End 59.7 15.8 0.0 6.13 16.88 38.81 In Progress In Progress In Progress In Progress

EGBS021

North

End 75.1 8.6 0.0 0.27 2.64 11.51 In Progress In Progress In Progress In Progress

Total

64 m

Long 281.9 165.7 0.0 67.78 58.90 292.38 In Progress In Progress In Progress In Progress

Notes:

A – Gold purity has been assessed at Egina and falls within a range of 89% - 95%. B – Based on whole sample assays. C – Back-calculated from assayed sub-samples. D – Additional gold contained within rock was metal detected. Actual gold content has not been determined or included in

the gold weight in the above table. E – See Figure 3. Additional gold was metal detected in the oversize which is contained within rock. Actual gold content

has not been determined or included in the gold weight in the above table.



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(Figure 1: Map showing Novo’s first exploration trench and adjacent four bulk sample sites discussed above. Nuggets are represented by colored dots scattered along the length of the trench.)



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(Figure 2: Various gold nuggets recovered from bulk samples. Virtually all nuggets are rounded and flattened. The photograph is of concentrated gold nuggets and is not necessarily indicative or representative of mineralization hosted on the Egina gold project.)

(Figure 3: Example of additional gold found in the oversize which is contained within rock. Actual gold content has not been determined or included in the gold weight in the above table.)



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On August 13, 2019, the Company announced that its first exploration trench supported the Company’s exploration

model for targeted gold-bearing terrace gravels at its Egina Gold Project, Western Australia.

• A total of 162 gold nuggets with a total weight of 324 grams was recovered through systematic metal detecting

of Novo’s first exploratory trench. This total includes two large nuggets weighing 83.18 grams and 78.14 grams,

respectively (Figure 4)*. Most nuggets were recovered from near the base of the gravel profile or on top of

underlying bedrock.

• Nuggets were found scattered along the entire length of the 579 m long, 3.65 m wide north-south oriented

trench, but most were recovered from a 50 m long interval within a swale, or topographic depression, in

underlying basement rock as identified by GPR near the northern end of the trench. This swale is open to the

east where it appears to expand out onto the greater terrace (https://www.youtube.com/watch?v=EVhv-

os9QZE). Novo views the Egina area as the edge of a much more expansive gold-bearing gravel system, and

this trench provides initial support for this model.

• Most gold nuggets are a rounded, flattened shape characteristic of gold nuggets derived from the much older

bedrock conglomerate deposits found across the region. Novo believes most of the gold at Egina is derived

from weathering and erosion of these conglomerates.

• To better understand the occurrence of finer, undetectable nuggets as well as fine gold in these gravels, Novo

is collecting a series of bulk samples from areas immediately adjacent to this exploratory trench. Each sample

has a footprint of 4x16 m. These samples will be processed through the Company’s IGR 3000 gravity gold plant

at nearby Station Peak. The first bulk sample was recently excavated and yielded 45 detectable nuggets

weighing 63.86 grams. Initial results from these samples will be made available once they have been processed.

• While the trench depth in the vicinity of the swale reached up to 3 m, the average trench depth was only 0.9 m.

Only about 0.2 m of sandy soil caps the gravel profile. Trenching extended into underlying bedrock by up to 0.2

m. The overall thin nature of sand and sheetwash cover exposed in this trench suggests the targeted gravel

horizon is likely present at shallow depth over a broad area across the terrace, a potentially favorable outcome

that indicates overburden stripping could be minimal.

• Trenching was conducted along the eastern margin of a previously trenched area that was prospected by the

previous owners of the Egina mining lease. Unfortunately, data on the distribution, number and size of gold

nuggets from these older trenches was not collected.

• Kariyarra Aboriginal Corporation scheduled a heritage survey/clearance process for additional exploration areas

on the Egina mining lease beginning August 26, 2019. Novo plans to subsequently expand its current program

of exploration trenching within cleared areas.

* These two nuggets are not necessarily indicative or representative of mineralization at the Egina project

https://www.youtube.com/watch?v=EVhv-os9QZE

https://www.youtube.com/watch?v=EVhv-os9QZE



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(Figure 4: Some of the larger gold nuggets recovered from Novo’s first exploration trench at Egina. Most nuggets are rounded and flattened. Starting in the upper left and working clockwise, nuggets weigh 83.18, 78.14, 14.36, 14.15, 4.83, 20.54, 6.09 and 10.78 grams. The photograph is

of concentrated gold nuggets and is not necessarily indicative or representative of mineralization hosted on the Egina gold project.)

On August 1, 2019, the Company provided an update of activities at its Egina Gold Project, Western Australia.

• Sampling and bulk sample processing were fully underway. All sampling activities were being conducted in

proximity to previously trenched areas in the northeastern corner of the Egina mining lease.

• Two levels of exploration are currently being undertaken: 1) bulk sampling on 8 x 8 m panels in the immediate

vicinity of existing trenches, and 2) exploratory trenching along the eastern margin of the disturbed area.

Trenching conducted by the previous owner of Farno-McMahon focused on an area immediately adjacent to

several low rolling hills along the margin of the terrace. In May 2019, Novo conducted ground penetrating radar

surveys across the terrace outboard from these trenches that clearly identified a broad swale, or shallow valley,

in which the Company believes gold-bearing gravels may be focused (Figure 5). This swale expands onto the

broader terrace as it exits the mining lease along its eastern border.



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• Novo was undertaking exploratory trenching across the targeted swale along the margin of previously disturbed

areas in order to assess the gold potential of these gravels. Trenching is conducted by taking approximately 20

cm lifts, or slices of gravel, then thoroughly metal detecting the floor of each lift for nuggets. Once the first of

these trenches has been excavated and thoroughly evaluated, Novo will discuss its assessment of the

distribution of gold across the swale. Thus far, the first lift has revealed nuggets to be distributed across the

entire 600 m width of the targeted zone. Novo believes detectable gold serves as a good indicator for the general

presence of gold. Exploratory trenching will be invaluable to guide further bulk sampling work.

• Bulk sample sites near older Farno-McMahon trenches have displayed several types of gravel within the 0.5-2

m near-surface profile. In a few locations, gravels are capped by residual laterite, a heavily weathered crust of

iron oxides, suggesting they may be very old, perhaps mid-Miocene in age (about 12 million years ago) during

a period when the region was last undergoing tropical weathering. Gold-bearing gravels often contain clasts of

earlier lateritic material perhaps dating back to Eocene time around 40 million years ago. If the observations

prove correct, the targeted gravels on the terrace were probably deposited between 12-40 million years ago.

This information could be important to help guide exploration elsewhere across the terrace.

• In places, the gravels discussed above have either been found to be absent or displaced by other types of

gravel. At present, Novo thinks this might be related to the proximity of the current working area to adjacent hilly

terrain. More recent erosion appears to be active in this area. Novo hopes to see more continuous gravel profiles

further east as it gains access to exploring the greater terrace away from local topographic effects. The presence

of nuggets across the entire width of the first exploratory trench described above provides encouragement that

gold-bearing gravels may be more continuous on the greater terrace.

• Novo personnel have detected nuggets embedded in rock matrix in some cobbles occurring in the gravel beds

(Figure 6). Such clasts appear to be pieces of heavily weathered Archean conglomerate matrix material that

has retained in situ gold nuggets. Interestingly, fine halo gold has been observed around such nuggets

appearing much like that seen around nuggets from Fortescue age conglomerates at Karratha. This observation

lends support to the view that much of the gold at Egina is derived from weathered and eroded Archean

conglomerates.



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(Figure 5: A broad swale, or shallow valley, is evident in this image of contoured top of bedrock from ground penetrating radar conducted in the northeast quadrant of the Egina mining lease. Older trenches can be seen in gray and near-term bulk sample sites are marked by black squares. The 2018 bulk sample site is shown in white. Novo is currently excavating an exploratory trench across the swale along

the eastern margin of the previously disturbed area and has encountered gold nuggets across a continuous length of 600 m.)

(Figure 6: Rounded gold nugget (approximately 2 cm diameter) in a cobble of heavily weather conglomerate matrix material, probably Archean in age. This cobble was found by detecting Egina gravels. Fine halo gold occurs around the nugget much like in situ nuggets found at Karratha. The photograph is of a concentrated gold nugget and is not necessarily indicative or representative of mineralization hosted on the Egina gold project.)



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Egina bulk samples discussed in this MD&A were collected from pits approximately 4 m wide and 16 m long under the supervision of Novo personnel. Depth of pits varies from about 1-1.5 m. Sandy soil overburden was generally stripped prior to gravel extraction. Some underlying bedrock material was excavated along with gold-bearing gravels to ensure capture of gold on the bedrock interface. Each sample was excavated in lifts approximately 20-30 cm thick. Every lift was detected for gold nuggets by Novo personnel prior to removal, and the location and weight of each nugget was recorded without limitation prior to being securely stored. Bulk sample gravel was transported to Novo’s Station Peak camp where it was processed through the Company’s IGR 3000 gravity gold plant. Various concentrates and tailings from the IGR 3000 plant are currently being analyzed to evaluate fine grain gold. Once these results have returned, the fine gold contribution will be added to the coarse gold tally. X-ray fluorescence analysis of nuggets indicates purities ranging from 89-95%. Densities of gravels vary widely generally ranging between about 1.4-2.1 tonnes per cubic metre. Unlike hard rock gold deposits, alluvial gold deposit grades are commonly reported in grams per cubic metres.

On June 28, 2019, the Company entered into a binding letter of intent (the “LOI”) with De Grey Mining Ltd. (“De Grey”),

an ASX-listed entity, in order to significantly broaden its exposure to the gold-bearing lag gravel deposits adjacent and

believed to be synonymous with the Company’s Egina gold project.

Novo has secured the right to explore De Grey’s tenements for gold-bearing lag gravel deposits (see Figure 1 below

for a tenure map) for an initial three-year period (the “Initial Period”) by paying AUD $1 million, of which AUD $300,000

will be held in escrow by Novo until De Grey acquires Indee Gold Pty Ltd (“Indee Gold”). Prior to the expiry of the Initial

Period, Novo can elect to extend its exploration rights for an additional two years (the “Second Period”) by paying an

additional AUD $1 million (the “Second Payment”), AUD $300,000 of which will also be kept in escrow by Novo until

De Grey acquires Indee Gold. Novo can elect to continue to extend its exploration rights beyond the Second Period in

two year increments by paying an additional AUD $1 million per extension period, subject to the successful submission

of a mining lease application or De Grey’s waiver of this condition.

If a mining lease is granted to Novo on the De Grey tenements, Novo will be deemed to have acquired an 80% interest in the relevant tenements (or portions thereof) which comprise the mining lease area (the “Joint Venture”) by giving notice to DEG and making a one-time payment of AUD $2 million. If the Joint Venture is established during the Initial Period, Novo will also be required to pay the Second Payment. De Grey remains the primary tenement holder and will have precedence at all stages of exploration and mining for

bedrock mineralisation while Novo holds rights for exploration and mining for gold-bearing lag gravel deposits. Certain

tenements held by De Grey are excluded, including granted mining and miscellaneous leases, existing De Grey

resources with a 300 metre buffer, any future mining leases granted over the existing De Grey resources, De Grey’s

conglomerate gold excursion areas, and minor areas of existing gravel rights on De Grey’s tenure which are currently

retained by third parties.

On June 7, 2019, the Company entered into a USD $30 million farm-in and joint venture agreement (the “Sumitomo

Agreement”) with Sumitomo Corporation of Tokyo, Japan, and its wholly-owned Australian subsidiary (together,

“Sumitomo”) in order to advance Novo’s Egina project (the “Egina Project”) located approximately 80 km south-

southwest of Port Hedland, Western Australia.

The Egina Project is comprised of wholly-owned Novo tenure, including tenements held by Farno-McMahon Pty Ltd

(“Farno”), tenements into which Novo is currently earning an interest under a binding memorandum of agreement with

Pioneer Resources Limited, and a tenement into which ASX-listed De Grey Mining Ltd. is currently earning an interest

under a farm-in and joint venture agreement executed with Farno prior to its acquisition by Novo. See Figure 7 below

for a map of Novo’s current tenure including the Egina Project.

Pursuant to the Sumitomo Agreement, Sumitomo is entitled to earn, through farm-in arrangements, up to a 40% interest

in the Egina Project by spending up to USD $30 million (approximately $40.2 million) over three years, with a required

minimum of USD $5 million per phase defined by a program and budget (approximately $6.7 million). Sumitomo has



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the right to elect not to continue with the farm-in arrangement and, if this right is exercised, it is expected that any

amounts advanced under the farm-in arrangement will be converted into common shares of Novo through a shares for

debt settlement at the higher of $2.00 and the minimum price permitted as at the date the right is exercised, subject to

receipt of TSX Venture Exchange approval. Any shares issued to Sumitomo pursuant to such a debt settlement will be

subject to a twelve-month contractual hold period (inclusive of the required four-month statutory hold period) and orderly

sale restrictions. The Sumitomo Agreement also contains a mechanism by which Sumitomo can participate in an

expanded project area.

(Figure 7 – Map of Novo’s tenure including the Egina Project and the De Grey tenure.)

On April 29, 2019, the Company announced the following exploration plans at its Egina gold project in the Pilbara region of Western Australia:

• Work in progress included detailed mapping, and small-scale trench “pan” sampling, in preparation for an upcoming aggressive program of 100-tonne bulk sampling and processing, all of which will initially be conducted on the mining leases obtained through the Company’s acquisition of Farno in October 2018. The goal of bulk sampling will be to establish protocols for defining resources across the targeted terrace.

• Novo also plans to undertake a ground penetrating radar survey of target areas to better assess thickness of the targeted terrace gravel horizon. Importantly, this work may help identify subsurface swales and depressions where gold may be trapped and better help focus bulk sampling efforts.

• A series of upgrades to the onsite IGR3000 gravity gold processing plant are ongoing in preparation for commencement of bulk sample processing. Certain adjustments are expected to increase efficiencies of processing and ensuring capture of gold.



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• Reconnaissance exploration is being undertaken throughout the Egina District to better assess the extent of gold-bearing terrace gravels.

Novo’s preliminary bulk sampling program at Egina is nearing completion. An approximately 170 tonne bulk sample

was excavated in December 2017 and was processed utilizing the Company’s IGR3000 gravity gold plant.

Sampling and processing protocols developed during this preliminary bulk sampling phase will enable Novo to undertake systematic bulk sampling across other parts of the expansive gravel terrace at Egina.

In addition to the 170 tonne bulk sample, three smaller samples weighing approximately 20 tonnes each were collected for detailed metallurgical test work including mechanical sorting tests similar to those recently undertaken on bulk samples from Comet Well. Metallurgical test work will be geared toward developing a processing scheme suited for Egina gravels.

Novo anticipates trial bulk sampling and processing of a few tens of thousands of tonnes at Egina in 2019.

Egina terrace gravel bulk sample returns encouraging gold recovery

As announced on December 20, 2018, Novo completed processing its first bulk sample of terrace lag gravels at its new Egina gold project. Approximately 95 cubic metres of pristine lag gravel (density approximately 1.6 tonnes per cubic metre) were excavated from an area in the northeast part of mining lease M47/560. The sample was transported to nearby Station Peak camp for treatment through the Company’s IGR3000 gravity gold plant. The IGR3000 utilizes Falcon centrifugal concentrators to capture fine and medium sized gold particles and a discharge sluice to capture large nuggets.

- A total of 107.88 grams of raw gold were recovered from 95 cubic metres of gravel. Fine gold and small nuggets recovered by Falcon concentrators account for 18.55 grams of the total. A further 49.16 grams were captured in the discharge sluice. One large nugget weighing 40.17 grams was recovered from the oversize pile using a metal detector. X-ray fluorescence analysis of gold nuggets indicates gold purities ranging from 91-93% with silver making up most of the balance.

- Assays of tailings are in process. - Dominantly coarse gold suggests simple processing techniques can likely be employed during potential

future large-scale gold recovery at Egina. - Very little clay is present resulting in short scrubbing times and short settling times to clarify return water. - Novo plans an aggressive program of collecting and treating similar-sized bulk samples in 2019 with the

intent of establishing a first ever resource at Egina. Novo also has plans for large-scale test sampling. As described in the Company’s news release dated October 30, 2018, Novo thinks lag gravels mantling the vast erosional terrace at Egina could host a significant gold deposit. The shallow nature of these gravels makes them a particularly attractive target.

The initial mineral sorting concentrates have been analyzed via Photon assay and are subject to QA/QC and other assay techniques that are currently being performed by MinAnalytical Laboratory Services Australia in Perth, Australia.

PhotonAssay provides a non-destructive chemistry-free approach to gold assay. It bombards samples with high-energy X-rays, causing short-lived excitation of atomic nuclei of targeted elements (e.g., gold). These excited nuclei give off a characteristic signature that can be detected and used to calculate concentration. The analysis is completely non-destructive, and all samples have been retained for further analysis.

On October 30, 2018, the Company discussed recent findings and exploration plans at its recently acquired Egina gold project, Western Australia.

Like Novo's Karratha gold project, Egina is an important part of the Pilbara conglomerate gold province. Not only does Egina have potential to host significant deposits of gold-bearing conglomerates, weathering and erosion appear to have liberated considerable gold from these rocks and redeposited it into extensive surficial lag gravel deposits blanketing



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much of the area. Gold-bearing gravels can easily be explored as described in Novo's aggressive exploration program described below.

Egina Exploration Model Highlights:

- Egina lies in the heart of the Pilbara conglomerate gold province approximately 120 km east of Novo’s Karratha gold project. Upon recognizing its conglomerate gold potential, Novo began applying for multiple exploration licenses covering much of the core area beginning in 2017. On September 17, 2018, Novo announced two transactions; the acquisition of private company Farno-McMahon Pty Ltd (“FM”), and a joint venture with ASX-listed Pioneer Resources Limited, increasing Novo’s Egina project to 948 square km. Importantly, purchase of FM included granted mining leases M47/560 and M47/561 covering approximately 11.8 square km of key target areas.

- Three styles of gold mineralization are recognized at Egina: 1) basal Fortescue gold-bearing conglomerates like those at Novo’s Karratha gold project, 2) gold-bearing, deflationary and/or marine lag gravels blanketing an erosional terrace covering most of the Egina area, and 3) lode gold mineralization hosted by the underlying Mallina Basin assemblage.

- Given the large size of the target, Novo considers the gold-bearing terrace lag gravels to be the most important immediate target at Egina. Gravel deposits form a continuous sheet across much of the terrace. Where they have been trenched, they are up to 1.5 meters thick and weakly consolidated. Lag gravels rest on weathered Mallina Group sedimentary rocks, and up to 1 meter of soil and sand overlie them.

- Novo has discovered considerable cobbles and boulders of weathered Fortescue-type conglomerate within the lag gravels. Particulate gold has been observed in the matrix of some conglomerate boulders. A few gold nuggets that have been recovered from trenches at Egina remain partially encased in ferruginous rock matrix, some of which display a distinctive melon seed shape similar to nuggets observed at Karratha. Remarkably, halos of fine-grained gold are evident in the residual rock matrix surrounding these nuggets, again strikingly similar to that observed around in situ nuggets at Karratha. Novo firmly believes much of the gold in lag gravels is derived from geologically recent weathering and erosion of Fortescue-type conglomerates that once blanketed this area.

- Most gold found at Egina is coarse and water-worn. During the 2018 exploration season, FM focused entirely on metal detecting nuggets within a series of trenches covering an area roughly 500 x 200 meters. Detected nuggets range in size from approximately 0.5-104 grams. As a test for the presence of fine-grained gold, Novo recently assessed gravel from these trenches. Significant numbers of small nuggets up to 4 mm across were recovered along with appreciable very fine gold particles down to approximately 10 microns in size. Novo finds the presence of fine gold particularly encouraging and believes it may be derived, in part, from weathering of halo gold associated with Fortescue-type nuggets.

2018 Egina Exploration Plans:

o Systematic sampling of ▪ largely unworked areas of lag gravel within M47/560 ▪ gravels already excavated but not processed by FM that have shown appreciable fine gold in

preliminary testing o Geophysical testwork including ground penetrating radar and ground magnetics to define terrace and

channel geometries o Trench mapping and survey pickup to delineate gravel horizons for input into a 3D model o Conduct broader-spaced program of alluvial sampling for fine gold and develop coarse gold

assessment strategy o Assess Novo’s IGR3000 alluvial processing plant for suitability and engineering modifications ahead

of bulk sampling of the terrace gravels in 2019 o Regional 1:2,500 scale mapping to define areas of conglomerate gold and basement gold potential

Novo plans to engage the Kariyarra and Mugarinya Traditional Owner Groups to seek permission to explore on Novo-controlled exploration licenses surrounding M47/560. Environmental regulators will also be engaged regarding



15

permitting requirements for the project, laying the groundwork for Novo to conduct test mining of lag gravels on mining lease M47/560 at Egina beginning after the rainy season, approximately second quarter of calendar 2019.

Farno McMahon Share Purchase Agreement

On September 17, 2018, the Company entered into a share purchase agreement whereby the Company acquired 100% of the issued and outstanding shares of Farno-McMahon Pty Ltd (“Farno”), an Australian proprietary limited exploration company (the “Farno Transaction”). Farno holds a 100% interest in four key tenements in the Egina region of Western Australia, including two mining leases. One of these (an exploration licence) is subject to an option with respect to a potential joint venture arrangement. The Farno Transaction closed on October 1, 2018. The Company paid AUD $150,000 in cash to Farno upon execution of an initial agreement. Upon closing, the Company paid a further AUD $2.35 million in cash to the shareholders of Farno and issued 1,252,895 Novo common shares at a deemed price of CAD $4.107 per share to the shareholders of Farno. Pioneer Resources Memorandum of Agreement and Private Placement

The Company also entered into a binding memorandum of agreement (the “MOA”) with ASX-listed Pioneer Resources Limited (“Pioneer”) on September 17, 2018. Pursuant to the MOA, Novo will be entitled to earn, via farm-in arrangements, a 70% interest in precious metal rights on four exploration tenements in the Egina region of Western Australia which comprise the Kangan gold project (the “Pioneer Transaction”). Novo considers this area prospective for conglomerate-related gold mineralization. As part of the Pioneer Transaction, Novo subscribed to AUD $1 million in Pioneer ordinary shares at AUD $0.02 per share as a private placement.

Novo paid AUD $200,000 in cash and issued 100,000 common shares (the “Consideration Shares”) to Pioneer in accordance with the MOA on September 21, 2018.

Karratha Gold Project

On May 28, 2019, the Company announced the completion of a mineralization report and an outline of future work at

its Karratha Gold Projects, Western Australia.

Novo’s geological mapping successfully extended the known semi-continuous conglomerate trend over a distance of

approximately 10 km at the Karratha Gold Project, approximately 2 km longer than previously recognized. In addition

to conglomerate gold mineralization, reconnaissance mapping extended a previously identified basement gold zone at

East Well, yielding high grade rock chip samples from quartz veining including assays up to 73.9 g/t Au, 11.2 g/t Au

and 6.7 g/t Au (not necessarily representative of mineralization at East Well) with further rock chip samples pending

across a strike length of approximately 4km (see Figure 8 below).



16

(Figure 8: Comet Well and Purdy’s Reward tenement map showing mapping areas and East Well basement anomaly. Grades presented are not necessarily representative of mineralization at East Well)

It is well understood that delivering a conventional mineral resource at the Karratha Gold Project is challenging owing

to the extremely nuggety nature of the deposit. Accordingly, Novo has worked closely with independent experts (Mr Ian

Glacken, Director of Geology at Optiro Ltd and sampling and geometallurgical expert, Dr Simon Dominy) to ensure the

Company’s QA/QC processes and sample collection methodologies are sufficiently robust to underpin this

mineralization report. Development of the mineralization report has become a guiding discipline to ensure Novo can

pursue a mining lease application as well as update its National Instrument 43-101 Standards of Disclosure for Mineral

Projects (“NI 43-101”) technical report for the Karratha Gold Project.

This mineralization report details the geology and exploration recently carried out by Novo in this area, including

diamond drilling, bulk sampling, detailed mapping and 3D model building and has confirmed the existence of significant

coherent gold mineralization. Of critical importance, it further identifies areas amenable to large-scale bulk sampling,

necessary for confirming gold grades across a broader area from this highly nuggety deposit.

Geology and Mineralization

The main focus of the mineralization report is to coalesce all geological information gleaned thus far and can be broadly

summarized as follows:



17

The occurrence and geological setting of a unique style of gold mineralization has been delineated across Comet Well

and Purdy’s Reward (50% Joint Venture with Artemis Resources Limited). The mineralization comprises generally

coarse gold, which is predominantly present as ‘melon seed’ nuggets, together with finer gold particles found almost

exclusively within haloes around many of the nuggets. Gold is hosted mainly in conglomeratic rocks of various types,

predominantly related to two predictable geological horizons that can be mapped.

The majority of mineralization of this type has been identified on the Comet Well and Purdy’s Reward tenements, but

this generally coarse-grained conglomerate style of gold mineralization has been discovered over a wide spatial area

in the Western and Northern Pilbara by Novo and other explorers, indicating the potential of the region as a significant

new gold camp.

A series of bulk samples taken to date (initially approximately 300 kg of samples at Purdy’s starting in 2017 and

approximately 5 tonne of samples from Comet Well during 2018 exploration activities) have returned grades up to 10.4

g/t gold, with significant gold mineralization demonstrated along the 2 km exposed strike length on the Comet Well and

Purdy’s Reward leases.

Project Development Strategy and Future Work

The project development strategy proposed for Comet Well and Purdy’s Reward closely mirrors that at Novo’s Beatons

Creek Gold Project, approximately 350 km east of Karratha, which recently culminated in the granting of mining leases.

The nuggety nature of gold in conglomerates at Beatons Creek required utilization of 50-kg ‘bulk’ samples to augment

traditional exploration and sampling techniques. Following these small-scale bulk samples, a large-scale bulk sampling

exercise consisting of around 30,000 tonne of gold bearing material was excavated and 9,680 tonnes processed to

confirm grades. A key difference between Beatons Creek and Comet Well-Purdy’s Reward is that Comet Well-Purdy’s

Reward exhibits much larger gold nuggets, requiring a substantially larger sample (of the order of 100,000 tonnes) to

adequately assess gold grade. The coarse nature of the mineralisation also requires development of a tailored grade

control regime and processing flowsheet that ensures successful definition of bulk sample grades.

Future Work

Planned work at Comet Well and Purdy’s Reward includes:

• Ongoing field work – including mapping, drilling, bulk sampling as appropriate

o Development of a tailored grade control methodology suitable for the style of mineralization as

conventional grade control techniques of drilling and assaying are unlikely to yield reliable outcomes

at Comet Well / Purdy’s and cannot be used to guide a large-scale bulk sampling process.

• Grade control

o Mechanical sorters represent a possible technical breakthrough that may assist in a more accurate

determination of gold grade. The scanning devices used in mechanical sorters ‘see’ gold content within

rocks but rely upon algorithms that count pixels of gold mineralization to identify individual rocks for

sorting (see Figure 9 below). By processing individual truck-loads, the number of gold pixels for a given

sample can potentially act as a proxy to reconcile the gold grade from each load, deriving grade and

thereby producing a 3D field model of gold distribution.



18

(Figure 9: Left, pieces of concentrate with exposed gold nuggets. Right, X-Ray image of concentrate with red arrows pointing to dense particles of matter, black, embedded in rock. Gold mineralization in this Figure is not necessarily

representative of the mineralization hosted on the relevant property.)

• Determine appropriate processing solution

o The solution identified above for grade control (mechanical sorting) is being investigated as a basis for

processing of a large-scale bulk sample and offers the benefits of being chemical and water free,

mobile and of low capital intensity. There remain some technical challenges to processing the entire

sample with mechanical sorters, however Novo is making significant progress in addressing these

challenges.

• Submit Program of Works approval for a circa 100,000 tonne large-scale bulk sample to the Department of

Minerals, Industry Regulation and Safety (“DMIRS”).

• Once approval is achieved from the DMIRS, undertake a large-scale bulk sampling program to confirm

representative gold grades over a larger area and demonstrate an effective grade control regime

o Sample representivity is an iterative process – gold particle size distribution must first be known in

order to apply statistical analysis to estimate a representative sample size. It has been recognized that

Novo’s bulk sampling to date (300 kg – 5,000 kg) yields indicative gold grades only and that

substantially larger samples are required to produce a representative grade.

o Benefiting from geological understanding gained through exploration activities, a series of prioritized

locations for larger scale bulk sampling have been identified using the following criteria:

• located within the approved exploration license or proposed mining lease areas;

• located within the approved disturbance zone from a Native Title Heritage perspective;

• close to the surface to minimize the cost and complexity of excavation;

• near to previous geological sampling (bulk sampling or drilling) to provide increased geological

certainty; and

• in areas of suitable topography to allow relatively simple access, operation and remediation.

Figures 10, 11, and 12 below depict five areas identified as amenable for large-scale bulk sampling

across the Comet Well and Purdy’s Reward project areas. A nominal 100,000 tonnes of sampled

material, in total, is envisioned to be of a sufficient sample size to ascertain the representative indicative

grade of mineralization across the project.



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(Figure 10: Location of amenable large-scale bulk sampling areas as yellow squares. Cross sections A’-A” and B’-B” shown in this figure are depicted in Figures 11 and 12 below.)

(Figure 11: Example cross-section showing the bulk sample results and target gold horizons at Comet Well, with an

indicative pit geometry hatched. Grades presented are not necessarily representative of mineralization at Comet

Well.)



20

(Figure 12: Example cross-section showing the bulk sample results and target gold horizon at Purdy’s Reward, with an indicative pit geometry hatched. Grades presented are not necessarily representative of mineralization at Purdy’s

Reward.)

• Timing for undertaking the large-scale bulk sample is contingent upon resolving technical challenges with

mechanical sorting technology and approval to take a 100,000 tonne sample. Potential solutions will be trialed

during this 2019 field season at Egina, where Novo plans to process a number of large samples (each circa

100 tonnes).

Rock chip samples from East Well were submitted to the Intertek-Genalysis Laboratory in Perth, Western Australia.

The entire sample was crushed and pulverised to -75um and assayed as follows:

• 50 gram lead collection fire assay with flame AAS finish for gold;

• Multi-acid digest with ICP-MS finish for 48-element suite. On April 29, 2019, the Company announced the following exploration plans at its Karratha gold project in the Pilbara region of Western Australia:

• A program of target generation supported by detailed mapping and sampling has commenced along an approximately 8 kilometre strike trend to the northeast and southwest of Comet Well and Purdy’s Reward.

• Plans have been formulated for a regional helicopter-supported reconnaissance program exploring for additional conglomerate-hosted gold along +300-line kilometers of interpreted stratigraphic unconformities within newly-granted Novo-controlled tenements. The objective of the program is to speedily identify, prioritize and test additional prospective targets for conglomerate-hosted gold so that the Company can effectively reconcile its land holdings.

Mechanical sorting trial yields gold-rich concentrates

In order to test the potential viability of mechanical rock sorting as a means of concentrating gold from conglomerates at Novo’s Karratha gold project, four bulk samples were collected, crushed, screened and tested using a TOMRA mechanical rock sorter. High-grade assays from sorted rock concentrates provide a first indication that this technique is effective at upgrading gold into small volume concentrates.

- Mechanical sorting was conducted on material ranging from 6 to 63 mm (10 to 63 mm for sample KX237. Fractions larger than 63 mm and finer than 6 mm are currently undergoing assaying. Once all analyses have returned, an assessment of the effectiveness of mechanical rock sorting will be made.

- Mechanical rock sorted concentrates range from 0.07-0.48% of total sample mass, a remarkably small fraction. Given the high-grade assays of these concentrates, ranging from 92.1-792.4 gpt Au, it appears that gold is being significantly upgraded by mechanical rock sorting.



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- Optimizing crushing to reduce volumes of fines and oversize, effectively maximizing the amount of material being sorted, should further improve the potential of this technology.

- Novo believes mechanical sorting technology could be a critical component of the Karratha gold project moving forward.

Table 2: Assays of concentrates from TOMRA mechanical sorting trials conducted on bulk samples of Karratha gold-bearing conglomerate

Sample ID

Mass (kg) Size Fraction

Size Fraction as % of Total Mass

Mass of Sorter Concentrate (kg)

Mass of Sorter Concentrate as % of Total Mass

Gold Grade of Sorter Concentrate (gpt)

KX234 5610.6

greater than 63 mm 2.2%

6 to 63 mm 67.8% 13.5 0.24% 792.4

less than 6 mm 30.0%

KX235 3989.8


6 to 63 mm 64.8% 19.1 0.48% 188.8


KX236 4229.1


6 to 63 mm 61.3% 13.0 0.31% 92.1


KX237 4434.0


10 to 63 mm 41.6% 3.2 0.07% 377.8


Size fractions in italics are too coarse or too fine to be sorted.

On January 31, 2019, the Company announced further encouraging results from initial testing of mechanical rock sorting of gold-bearing conglomerate from its Karratha gold project.

The potential viability of mechanical rock sorting was tested by subjecting four bulk samples to crushing, screening, and sorting using a TOMRA mechanical rock sorter. Sorted rock concentrates of very small volume were generated returning high gold contents.

Assays of the sorted waste material, undersize (-6 mm) fraction and oversize fraction (+63 mm) have returned allowing for further evaluation of this technique.

- Samples KX234 and KX237 generated 81.1% and 89.4% recovery of gold, respectively, from the 6-63 mm fraction that was sorted. These recoveries are considered very encouraging considering these tests are first pass and un-optimized. Interestingly, the best recovery is from the lowest grade sample, KX237.

- Although samples KX235 and KX236 generated lower recoveries, the fine (-6 mm) unsorted fraction of each of these samples displays higher grade than the respective calculated head grade. Novo believes the well-oxidized, crumbly nature of the rock comprising these bulk samples may have played a role in lower recoveries. Gold particles appear to have preferentially reported to the fines rather than remain



22

encapsulated in rock that was sorted. Such oxidation persists to about 1-2 m below surface at Karratha. Below this level, Novo believes the targeted conglomerate will be harder and less crumbly.

- Sorter tailings commonly display gravity recoveries of gold of over 50% indicating significant coarse gold remains in this material. Novo believes crushing to somewhat finer size, perhaps 50 mm, may improve sorter recoveries because X-rays will more readily penetrate smaller rock particles making it easier for the mechanical sorter to identify gold particles.

- Although testing was conducted on rock particles down to 6 mm size, further work is needed to determine the lowest range of particle size that can effectively be sorted. Further crush testing is also required in order to determine means of minimizing generation of fines and maximizing the fraction of material that can be sorted.

- Gravity recoveries of gold from the undersize (-6 mm) fraction of the four bulk samples tested during this study range between 44%-64%. This data suggests gravity recovery of gold from unsorted fines may be a viable treatment option.

- Novo considers mechanical sorting a potentially low cost means of concentrating gold that is particularly suitable for the nuggety conglomerates Novo is exploring in the Pilbara. Novo is currently undertaking a thorough review of recent mechanical sorting test data to determine means of optimizing crushing and sorting and what further testing is needed.

TOMRA mechanical rock sorting results from four Karratha bulk samples.

Sample ID

Mass (kg) Size Fraction

Size Fraction as % of Total Mass

Mass of Sorter

Concentrate (kg)

Mass of Sorter

Concentrate as % of Total

Mass

Gold Grade of Sorter

Concentrate (gpt)

Gold Grade of Unsorted Material

(gpt)

Gold Grade

of Sorter Tails (gpt)

Stage Recovery of Sorter

(%)

Gold Distribution

to Sorter Concentrate

(%)

Calculated Head

Grade of Sample

(gpt)

KX234

5460

greater than 63 mm

2.3% - - - 5.18 -

2.97 6 to 63 mm 67.2%

13.5 0.25% 792.4 - 0.68 81.1% 66.0%

less than 6 mm

30.6%

- - - 1.43 -

KX235

3981

greater than 63 mm

19.3%

- - - 0.21 -

1.91 6 to 63 mm 64.8%

19.1 0.48% 188.8 - 1.01 58.1% 47.5%

less than 6 mm

15.8%

- - - 1.95 -

KX236

4205

greater than 63 mm

9.6% - - - 0.57 -

1.40 6 to 63 mm 61.5%

13.0 0.31% 92.1 - 0.70 39.8% 20.3%

less than 6 mm

28.9%

- - - 2.19 -

KX237

4418

greater than 63 mm

9.2% - - - 0.17 -

0.46



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10 to 63 mm 41.5%

3.2 0.07% 377.8 - 0.08 89.4% 60.3%

less than 10 mm

49.3%

- - - 0.27 -

Size fractions in italics were too coarse or too fine to be sorted

Reported masses may be slightly different to those quoted in the Company's news release dated December 20, 2018 because materials were re-weighed at the assay laboratory

Novo staff collected bulk samples discussed in this MD&A. Bulk samples were crushed at Cook Industrial Minerals in Perth, Australia prior to being shipped to TOMRA. Once rock sorting was completed, the concentrate and smaller mass tailings samples were submitted to MinAnalytical Laboratory Services Australia in Perth, Australia for analysis via Photon assay and fire assay. PhotonAssay provides a non-destructive chemistry-free approach to gold assay. It bombards samples with high-energy X-rays, causing short-lived excitation of atomic nuclei of targeted elements (e.g., gold). These excited nuclei give off a characteristic signature that can be detected and used to calculate concentration. The analysis is completely non-destructive, and all samples have been retained for further analysis. Larger tailings samples were submitted to SGS Minerals in Perth, Australia where they were treated in a test plant detailed in Novo’s news releases dated February 6 and May 31, 2018. All assay certificates and head grade calculations were provided by SGS and MinAnalytical, with the calculations and head grades checked by Novo internal resources. There were no limitations to the verification process and all relevant data provided to date was verified.

On November 19, 2018, the Company discuss positive initial results from mechanical rock sorting tests being undertaken by TOMRA Sorting Pty. Ltd., Castle Hill, New South Wales (“TOMRA”). TOMRA is the foremost mechanical rock sorting company in the mining industry.

TOMRA Mechanical Sorting Test Highlights:

Four, +5 tonne bulk samples from Comet Well, three from the Upper Cannonball Conglomerate and one from the Lower Cannonball Conglomerate, have undergone successful sorting.

- Each sample was crushed and screened yielding sub-fractions of 63-100 mm, 25-63 mm, 10-25 mm and less than 10 mm. Testing was undertaken on each size fraction except for the sub-10 mm size fraction. Mechanical sorting employed a combination of X-Ray transmission (“XRT”) and electromagnetic induction (“EM”). XRT identifies rocks containing particles of high atomic mass such as gold and EM identifies rocks that become electrically charged due to the presence of metallic particles in a manner similar to the operation of a metal detector.

- Sorting of material between 10-63 mm resulted in a remarkably low mass pull of approximately 0.3%. Visual and X-Ray examination of concentrate indicates gold nuggets are present. This data, although preliminary, suggests there is good potential for employment of mechanical sorting to upgrade gold content for analytical purposes and possibly commercial applications. Novo thinks mechanical sorting could become an important component of future advancement of the Karratha and Egina gold projects.

- With this tranche of mechanical sorting tests now complete, assays will be performed on all fractions of concentrates and rejects to ascertain overall efficiency of sorting. Full results of this study are expected early next year.

- Rocks larger that 63 mm were found to be too thick for X-Rays to adequately penetrate making particulate gold obscured from detection. Therefore, crushing of large rock pieces to less than 63 mm is required for effective mechanical sorting. The sub-10 mm fraction comprises approximately 35% of the overall mass of each sample. TOMRA believes there is opportunity to further screen material down to approximately 6 mm before employing mechanical sorting, thus maximizing the overall percentage of material that can be sorted.



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On October 26, 2018, the Company announced bulk sample results from its Comet Well joint venture (80% Novo; 20% Smith/Gardner Mining), part of Novo’s greater Karratha gold project, Western Australia.

First round bulk sample results confirm the potential of the basal conglomerates at Karratha and support Novo’s view of significant prospectivity across its Comet Well/Purdy’s Reward tenements and, more broadly, the prospectivity of Novo’s 12,000 square kilometer land-holdings across the Pilbara.

Highlights:

Bulk samples reported below come from two gold-bearing conglomerate units at Comet Well, the Upper Cannonball Conglomerate (“UCC”) and Lower Cannonball Conglomerate (“LCC”) as well as surrounding rock strata. Table 1 (below) lists bulk sample data including weight, thickness, gold grade, and fractions of gold occurring in each processing stream.

Bulk samples were collected from 2 x 2 meter pits scattered along 1.2 km strike from Cannonball Gully in the southwest to the Purdy’s Reward tenement boundary in the northeast (Purdy’s Reward is a joint venture on conglomerate/paleoplacer gold; 50% Novo and 50% Artemis Resources Ltd.). Thicknesses of samples range from approximately 0.35 to 1.20 meters.

The bounds of gold-bearing conglomerates are not readily identifiable by eye, therefore bulk sampling encompassed sections of conglomerate above and below each respective gold-bearing unit in order to better constrain their limits.

Processing of each sample encompasses coarse crushing and screening then passing material through a metal detector to collect any nuggets. Once detected, the sample is finely crushed, screened and further processed through a gravity concentrator. Concentrates and tails are analyzed, with the final grade based upon the gold recovered from each of the three sample streams.

At Cannonball Gully, Novo has identified what it believes are significant basin-bounding faults that may have been active during sedimentation and controlled LCC deposition. Diamond drilling indicates the LCC continues into the basin and may open up and become more laterally extensive, particularly to the east. Therefore, Novo believes that exposures of LCC at Cannonball Gully form a small outcropping apex of this important unit. Bulk samples from the mineralized core of the LCC include KX157 (7.14 tonnes) grading 10.40 grams per tonne gold and KX158 (6.85 tonnes) grading 1.51 grams per tonne gold. Collectively, these two samples represent a 1.4 m high vertical profile through the LCC with a weighted average grade of 6.06 grams per tonne gold. Nearby samples KX160 (7.17 tonnes) grading 1.99 grams per tonne gold and KX161 (13.5 tonnes) grading 2.62 grams per tonne gold collectively represent a 1.8 m high vertical profile through the LCC with a weighted average grade of 2.40 grams per tonne gold. Gold nuggets recovered from bulk samples of LCC are typically flat, up to 10 mm across, weigh a gram or less and occur within sandy matrix between boulders. Boulder clasts in the LCC range in size up to 1.5 meter diameter and are tightly packed.

Bulk samples from the mineralized core of the UCC include KX223 (3.78 tonnes) grading 4.53 grams per tonne gold, KX227 (3.40 tonnes) grading 3.06 grams per tonne gold, KX198 (6.44 tonnes) grading 2.26 grams per tonne gold, KX224 (4.11 tonnes) grading 1.29 grams per tonne gold and KX171 (4.96 tonnes) grading 1.22 grams per tonne gold. Gold nuggets recovered from bulk samples of UCC are similar in shape to those of the LCC but are typically larger, up to 18 mm across and weighing up to approximately 6 grams. Such size nuggets are typical of mineralized conglomerate at nearby Purdy’s Reward, therefore Novo believes the UCC at Comet Well may be geologically related to the Purdy’s Reward conglomerate. Novo has currently explored a combined length of 3.6 kilometers of UCC and Purdy’s Reward conglomerate. This zone remains open at both ends and into the basin. Novo collected circa 300 kilogram bulk samples from trenches at Purdy’s Reward late last year.

Variability of grade in conglomerate bulk samples is largely a function of the number of nuggets in each sample. Novo also believes the proportion of boulders to matrix in each respective sample significantly impacts variability. Given the nuggety nature of gold mineralization at Karratha, such variability is expected.

At Karratha, gold almost universally occurs as nuggets with a thin, 2-5 mm, halo of fine-grained gold in the matrix of conglomerates. In spite of this, the proportion of gold occurring as nuggets varies widely from bulk sample to bulk sample. Novo believes this may reflect breakdown of nuggets to finer gold particles during processing of some samples.



25

Novo does not see evidence of a significant component of fine-grained, disseminated gold in Comet Well conglomerates.

Table 1, Summary of Comet Well Bulk Sample Data:

Stratigraphic Position

Sample #

Sample Thickness

(m)

Sample Mass

(t)

Reporting Head Grade (g/t)

Weighted Average Grade

% Au Recovered

in MDC (Nugget

Au)

% Au Recovered in Gravity

Concentrate

% Au Recovered in Gravity Tailings

% Au Recovered

via Gravity

Lower Cannonball

Conglomerate Core

KX157 0.5 7.14 10.40 1.4 m @ 6.06 gpt

Au

43.90% 27.90% 28.10% 71.90%

KX158 0.5 6.85 1.51 16.00% 16.60% 67.40% 32.60%

KX160 0.6 7.17 1.99 1.8 m @ 2.40 gpt

Au

52.60% 17.80% 29.60% 70.40%

KX161 1.2 13.35 2.62 57.20% 21.80% 21.00% 79.00%

Margin of LCC Core

KX190 0.5 8.35 1.38 3.80% 79.30% 16.90% 83.10%

KX192 0.6 5.86 0.46 0.00% 99.00% 1.00% 99.00%

Below LCC Core

KX159 0.5 4.01 0.16 0.00% 48.90% 51.10% 48.90%

KX195 0.7 5.71 0.11 0.00% 83.30% 16.70% 83.30%

Above LCC Core

KX153 0.5 7.19 0.08 0.00% 48.90% 51.10% 48.90%

KX154 0.5 5.64 0.01 0.00% 28.40% 71.60% 28.40%

KX155 0.5 6.54 0.01 0.00% 34.70% 65.30% 34.70%

KX156 0.5 7.59 0.06 0.00% 17.30% 82.70% 17.30%

KX189 0.5 5.13 0.04 0.00% 73.70% 26.30% 73.70%

KX193 0.6 4.88 0.02 0.00% 78.40% 21.60% 78.40%

Upper Cannonball

Conglomerate Core

KX171 0.6 4.96 1.22 94.90% 4.70% 0.40% 99.60%

KX198 0.8 6.44 2.26 21.10% 49.80% 29.10% 70.90%

KX223 0.4 3.78 4.53 10.00% 69.50% 20.60% 79.40%

KX224 0.4 4.11 1.29 0.00% 22.20% 77.80% 22.20%

KX227 0.4 3.40 3.06 49.50% 36.50% 14.00% 86.00%



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Margin of UCC Core

KX170 0.6 7.70 0.59 48.20% 15.70% 36.10% 63.90%

KX197 0.6 9.04 0.52 10.20% 60.90% 28.90% 71.10%

Below UCC Core

KX172 0.6 4.37 0.01 0.00% 46.50% 53.50% 46.50%

KX178 0.6 7.44 0.10 0.00% 71.20% 28.80% 71.20%

KX183 0.6 5.88 0.12 0.00% 53.50% 46.50% 53.50%

Above UCC Core

KX226 0.4 3.67 0.12 0.00% 67.20% 32.80% 67.20%

The multi-tonne bulk samples presented in this disclosure serve to provide an indicative grade of the two gold-bearing conglomerates at Comet Well. Novo takes the view that bulk sampling on the scale of 10,000’s tonnes is required to more fully ascertain the grade, distribution, and continuity of these units and to determine the commercial viability of whether a potential mining operation could proceed. Such process is well-known in the diamond industry where trial excavation of very large samples is required to evaluate economics of deposits prior to mining.

Novo plans to use this bulk sample data along with geologic data collected from recently completed diamond drill cores as a basis for a mineralization report, a critical component needed to convert an exploration license to a mining lease.

Bulk Sample Processing

Novo staff collected bulk samples discussed in this disclosure. Bulk samples were submitted to SGS Minerals in Perth, Australia where they were treated in a test plant. Because gold mineralization at Comet Well is extremely coarse, the entire sample is coarsely crushed and screened and passed through a metal detector to collect any nuggets. Once detected, the sample is finely crushed, screened and further processed through a gravity concentrator. Concentrates and tails are analyzed, with the final grade based upon the gold recovered from each of the three sample streams. Samples are scrutineered by independent consultants from RSC Mining and Mineral Exploration, Perth, whilst each sample is collected and received into the laboratory, maintaining complete integrity over the chain of custody. All assay certificates and head grade calculations were provided by SGS as secured documents, with the calculations and head grades checked by Novo internal resources and verified by Dr. Simon Dominy. There were no limitations to the verification process and all relevant data was verified.

Dr. Quinton Hennigh, P. Geo., the Company’s, President and Chairman and a qualified person as defined by National Instrument 43-101, has approved the geological content of this disclosure. Dr. Simon Dominy, FAusIMM (CP), a consultant geometallurgist to the Company, a qualified person as defined by National Instrument 43-101, has approved the processing and sample grade content of this disclosure.

On October 10, 2018, the Company voluntarily filed a technical report prepared pursuant to National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) for its Karratha gold project. The independent technical report, entitled “Novo Resources Corp. Technical Report on the Karratha Project, Australia” (the “Karratha Technical Report”), with an effective date of May 31, 2018 and an issue date of September 20, 2018, was prepared for Novo by Ian Glacken (FAusIMM(CP), FAIG, CEng) of Perth, WA, Australia. Mr. Glacken is a Qualified Person as defined under NI 43-101.

In mid-August 2018, the Company announced that recent surface mapping and trenching indicated that the upper gold-bearing conglomerate at Comet Well (80% Novo; 10% Gardner Mining Pty Ltd; 10% Brad Smith) appears continuous with the basal gold-bearing conglomerate at Purdy’s Reward (50% Novo; 50% Artemis joint venture on conglomerate and paleoplacer gold hereafter referred to as the “Novo-Artemis JV”), a current explored strike of approximately 3.4 km. These gold-bearing conglomerates remain open along strike to the northeast and southwest and down dip to the



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southeast into the Fortescue Basin. At Purdy’s Reward, exploration recently re-commenced where infill drilling and bulk sampling is being undertaken to further evaluate the gold deposit.

Soon after identifying two distinct gold nugget-bearing conglomerate units at Comet Well, Novo noted that nuggets from the upper unit displayed similar large size and flattened shape to those observed in the basal gold-bearing conglomerate uncovered at Purdy’s Reward in late 2017 by the Novo-Artemis JV. Novo and the Novo-Artemis JV have recently conducted mapping and trenching in intermediate areas indicating these conglomerates are one-in-the-same.

Novo and the Novo-Artemis JV are encouraged by the apparent continuity of these gold-bearing conglomerates over an explored strike length of 3.4 km. They are generally shallow and accessible for bulk sampling. Several new trenches opened up in the intermediate area between Comet Well and Purdy’s Reward reveal numerous detector strikes. Bulk samples (5-10 tonnes) are currently being collected from newly opened areas and will be prioritized in the processing queue.

The upper gold-bearing conglomerate at Comet Well is associated with a distinct mafic volcanic tuff marker bed that helps enable its identification in the field. As the upper gold-bearing conglomerate and associated tuff project northeastward toward Purdy’s Reward, a series of north-northeast trending faults is encountered beyond which the mafic tuff is no longer present. Gold-bearing conglomerates persist, however, stepping down through the stratigraphic section to a position directly on basement. Small fragments of what appear to be mafic tuff occur within the basal gold-bearing conglomerate at Purdy’s Reward. Novo and the Novo-Artemis JV believe these north-northeast faults must have been active during deposition of the conglomerate beds. Purdy’s Reward was the upthrown block, hence gold-bearing conglomerate was deposited straight onto basement whereas Comet Well was the downthrown block and nuggets were deposited onto older conglomerate beds.

Because these gold-bearing conglomerates display good lateral continuity and are generally shallow, Novo and the Novo-Artemis JV are growing more confident that they will be the main focus of future large-scale bulk sample extraction.

Re-Commencement of Exploration at Purdy’s Reward

The Novo-Artemis JV recently commenced infill diamond drilling at Purdy’s Reward. These drill holes are utilized to gather information about the depth and thickness of targeted conglomerate units. Given the extremely nuggety nature of the deposit, gold grades are being assessed by bulk sampling. Bulk samples using Novo’s new 5-10 tonne sampling protocol will soon be collected from trenches in areas near where the Novo-Artemis JV collected 300 kg gold-bearing bulk samples in 2017.

Novo’s and the Novo-Artemis JV’s exploration strategy is to generate sufficient geologic and grade data for the gold-bearing conglomerates at Comet Well and Purdy’s Reward to produce a mineralization report, a critical item needed to convert the current exploration licenses to mining leases. The Novo-Artemis JV’s aim is to ultimately move the project toward large-scale bulk sample extraction and testing as a critical means of determining its potential viability with sufficient data available for a mineralization report by the end of 2018.

In late July 2018, the Company announced that it had exercised its right of first refusal (the “ROFR”) to purchase one-half of a 1% net smelter returns royalty (the “NSR”) on the Company’s Comet Well property in the Karratha region of Western Australia (the “Acquisition”). The Company exercised its ROFR and matched the terms of an offer made by International Prospect Ventures Ltd. to the holder of the NSR (the “Holder”). The consideration payable by the Company to the Holder for the Acquisition includes $1,750 in cash, payable as follows:

- $1,000 upon receipt of TSX Venture Exchange approval (the “Approval Date”); - $250 on the six-month anniversary of the Approval Date; and - $500 on the twelve-month anniversary of Approval Date.



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The consideration payable by the Company also includes the issue to the Holder of 138,946 Novo common shares (the “Novo Shares”). The Company also agreed to pay the Holder a sub-royalty, in cash or satisfied by the issuance of Novo common shares at the Company’s discretion, based on either (i) resource reports being announced by the Company in compliance with either National Instrument 43-101 or the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves for the Comet Well property, demonstrating Measured Mineral Resources or Indicated Mineral Resources of gold, or a combination thereof (together, the “Announced Resources”), or (ii) if there are no Announced Resources but the Comet Well property is being mined by the Company, gold produced by the Company (“Mined Resources”), as follows:

- For Announced Resources and/or Mined Resources up to 5,000,000 ounces of gold, Novo shall make a payment of $0.50 per ounce; and

- For Announced Resources and/or Mined Resources over 5,000,000 ounces of gold, Novo shall make a payment of $1.00 per ounce.

If applicable, any sub-royalty will be paid quarterly and the obligation to pay the sub-royalty expires on the tenth anniversary of the Approval Date. The sub-royalty is only payable once in respect of Announced Resources that may subsequently become Mined Resources. If a sub-royalty is paid in common shares issued by the Company, the issue price will be determined by reference to the volume-weighted average price of the Company’s shares for the last 20 trading days of the relevant quarter.

On July 10, 2018, the Company announced that Ngarluma Aboriginal Corporation (“NAC”) had signed a heritage agreement that includes 37 exploration licence applications covering 6,645.4 square kilometers in the West Pilbara region of Western Australia. The heritage agreement sets out the protocols under which heritage surveys are conducted.

In addition, the execution of this agreement facilitates the process of granting the exploration licence applications without undue delay. Applications can often take up to 12 months whilst heritage agreements are negotiated.

Novo’s overall tenement position covers five Aboriginal claim groups within the greater Karratha area. It is Novo’s intention to complete claim-wide agreements with each of the other four groups within the near future.

On June 28, 2018, the Company announced that the upper gold-bearing unit at Comet Well displayed strong continuity in outcrop and drilling.

In May 2018, Novo confirmed the discovery of an upper gold-bearing conglomerate at Comet Well. Recent mapping along the outcropping upper gold-bearing conglomerate has confirmed a very close spatial association between nugget occurrences and a conspicuous thin mafic tuff bed.

The tuff marker bed is distinct in outcrop and in diamond drill core thus making it invaluable for guiding exploration and helping establish continuity of the upper gold-bearing conglomerate across the Comet Well area.

Historic prospector digging sites support the interpretation of a continuous upper gold-bearing conglomerate bed extending for +2.5 km from Cannonball Gully in the southwest through Purdy’s Reward in the northeast. Gold nuggets have been found in a corridor of similar strata extending approximately 5 km further southwest from Cannonball Gully. With the benefit of new understanding of the tuff marker bed and spatial association with nugget occurrences, Novo plans to pursue exploration in this direction over the coming months.

As the upper gold-bearing conglomerate bed projects northeastward to Purdy’s Reward, thickness of underlying strata diminishes. Novo believes the gold-bearing conglomerate at Purdy’s Reward, which rests directly atop basement rock, is likely the same bed as the upper gold-bearing conglomerate at Comet Well.

Nuggets from the upper gold-bearing conglomerate bed at Comet Well range in size from a few tenths of a gram to as large as 8 grams, similar to the range in size among nuggets found at Purdy’s Reward. Like those at Purdy’s Reward, they display a halo of secondary fine-grained gold intergrown with chlorite.



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At Comet Well, Novo has now confirmed two gold bearing conglomerate beds, the upper of which is spatially associated with the tuff marker bed and the lower bed resting on the basal contact. Although gold nuggets are typically concentrated in these two conglomerate beds, occasional nuggets have also been reported from adjacent conglomerates.

Recognizing the importance of this discovery, Novo has recently pursued aggressive bulk sampling of the upper gold-bearing conglomerate bed from sites at Cannonball Gully, 150S, 250E and 420E, to help establish continuity of mineralization. Confirmed in situ nugget occurrences and additional detector strikes have been encountered at all four sample sites. As more is learned about the position of the upper gold-bearing conglomerate bed, additional step-out bulk sampling sites will be prepared further east where it trends towards Purdy’s Reward. Areas to the west will also be pursued over the coming months.

Novo’s exploration program at Comet Well and adjacent Purdy’s Reward is focused on gathering sufficient geological information to generate a mineralization report for the Western Australian Department of Mines, Industry Regulation and Safety, one of several items needed to convert an exploration license to a mining lease. Novo thinks that the best way to advance the Karratha gold project is to ultimately move it toward large-scale bulk sampling for which a mining lease will be required. Recent recognition of this upper gold-bearing conglomerate is important for the following reasons:

- Its continuity can be established with help from the associated tuff marker bed. Recent detailed mapping and diamond drilling has found this bed to be continuous over most of the Comet Well area, and Novo will be developing a 3D model of it with high confidence, a critical element for any future mineralization report.

- It appears accessible to bulk sampling in multiple areas. Novo is currently collecting 5-10 tonne bulk samples from which defendable grade estimates can be made, another key element for any future mineralization report.

- The unit appears to underlie a broad area at shallow depth making it ideally suited for large-scale bulk sampling, Novo’s ultimate goal is to demonstrate potential viability of the Karratha Gold Project.

- Favorable topography and drainage channels have exposed this conglomerate bed to the south of the line of outcrop, thereby adding a degree of three-dimensionality to the bulk sampling results.

In addition to bulk sampling discussed above, Novo continues to diamond drill at Comet Well. As announced in a recent news release, an exploration budget has been approved for the Purdy’s Reward joint venture. Novo plans to extend the mode of exploration detailed above northeastward onto the Purdy’s Reward tenement in the near future. Novo’s aim is to move Comet Well and Purdy’s Reward forward toward large-scale bulk sampling.

Bulk Sample Reporting

The Karratha gold project is unique in many ways. Extremely nuggety gold mineralization requires numerous bulk samples and the associated sample processing and analysis requirements of such large samples are uncommon to the gold mining industry. As discussed above, Novo has a strategic aim of collecting sufficient information to present a mineralization report acceptable to the Western Australian Department of Mines, Industry Regulation and Safety to convert existing tenure to mining leases. Novo is working closely with SGS Minerals Pty Ltd, Perth to process 5 to 10 tonne bulk samples to generate defendable grades suitable for such reporting.

Fieldwork is generating a rapid evolution in Novo’s understanding of the geology of the deposit. The recently recognized continuity of the upper gold-bearing conglomerate is important to the ultimate trajectory of the Karratha gold project. Analysis of bulk samples has accelerated recently and work continues to optimize timing and quality of the samples, but new information derived from further sampling requires the Company to constantly assess exploration priorities. Because of this, Novo’s management and board have decided to release bulk sample results in meaningful and material batches that provide a clear context to gold grade and distribution rather than in piecemeal fashion. In the meantime, Novo will provide meaningful exploration updates such as this to keep investors informed about advancements in the understanding of the Karratha gold project.

In June 2018, the Company announced that it had agreed to an AUD $5,400 exploration budget for the year beginning July 1, 2018 (the “Period”) with its 50-50 joint venture partner, ASX-listed Artemis Resources Limited, on joint venture tenure in the Karratha region of Western Australia.



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During the first four months of the Period, Novo and Artemis intend to focus on bulk sampling, diamond drilling, and costeaning activities, primarily at Purdy’s Reward. Large bulk samples will be collected and treated to provide necessary grade data needed to file a mineralization report, an important step toward converting the current exploration license to a mining license. Additionally, environmental and heritage studies will be undertaken in conjunction with similar work at Novo’s nearby Comet Well joint venture in order to move the collective area toward bulk sampling. Lastly, follow-up exploration will be undertaken on the wider tenement package under the joint venture to identify further areas of conglomerate gold prospectivity.

The Novo-Artemis 50-50 budget of AUD $5.4 million comprises approximately one-third of Novo’s planned $15,400 Pilbara conglomerate exploration budget.

The Company announced results for the first two bulk samples from Comet Well, part of Novo’s greater Karratha Gold

Project located in the Pilbara region of Western Australia, on May 31, 2018. Sample KX157, a 7.143 tonne bulk sample

previously reported to contain numerous gold nuggets, returned an impressive grade of 10.4 grams per tonne of gold.

Sample KX158, a 6.853 tonne bulk sample encompassing conglomerate and footwall dolerite, returned 1.5 grams per

of tonne gold.

Sample KX157 was collected from a 2x2 m horizontal panel from 0.3-0.8 m above the basal contact of the Lower

Cannonball conglomerate unit at the Powerline showing. Additional bulk samples, KX151-KX162, have been collected

from nearby trenches and are currently being processed through the SGS Minerals Metallurgy (“SGS”) laboratory in

Perth. Data from these samples will provide a more thorough understanding of gold grades within the basal few meters

of the Lower Cannonball conglomerate, a unit that has yielded numerous metal detector strikes.

Sample KX158 was collected immediately beneath KX157 from a panel approximately 0.5 m thick. Approximately half

of the sample is conglomerate and half is footwall dolerite, a rock considered barren. When compared to bulk samples

collected from the basal contact at Purdy’s Reward that yielded 10.6-87.8 grams per tonne gold, this sample is notably

lower grade, an indication that the basal contact is not as enriched at Comet Well compared to that at Purdy’s Reward.

At Comet Well, gold appears to be scattered through a thicker section of conglomerate as evidenced by results from

sample KX157 and the numerous detector strikes over several vertical meters of exposure in trenches.

To date, two gold-bearing horizons have been identified at Comet Well. The lower horizon comprises the bottom of the

Lower Cannonball conglomerate and displays a thickness of several meters. The upper gold-bearing horizon is

approximately 1-2 m thick and comprises the base of the Upper Cannonball conglomerate. This horizon may correlate

with gold-bearing conglomerates approximately 2 km northeast at Purdy’s Reward. Novo is currently exploring areas

along strike to confirm this hypothesis.

Novo personnel recently discovered a new exposure of gold-bearing conglomerate within a drainage approximately

250 m southeast of the trench from which bulk samples KX157 and KX158 were extracted. Current interpretation

suggests this is the down dip extension of the gold-bearing horizon within the Upper Cannonball conglomerate. Work

is currently being undertaken to further expose this conglomerate and collect bulk samples. Novo plans to provide

further information about this discovery once this work is complete.

In light of the successful implementation of Novo’s bulk sampling and processing protocols at Comet Well, Novo is

considering returning to Purdy’s Reward to re-sample previously sampled areas using these new protocols to ensure

consistency of procedures and resulting data.

Since securing an agreement for the use of the sample processing facility at SGS in February, 2018, Novo technical

staff and consultants have been working closely with SGS to refine flowsheets for processing and analysis of bulk

samples from Comet Well. Analysis extends beyond solely assigning a grade to the material. Testing also generates



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important metallurgical information that will prove invaluable as the project progresses through economic studies. Novo

will glean key information around gold grade, gold particle size and distribution, and gravity recoverable gold that will

assist with future processing plant design options.

To ensure that the extremely nuggety Pilbara conglomerate gold mineralization is sampled and tested appropriately,

considerable mineral processing, geometallurgical and geological intelligence have been applied to develop rigorous

sampling and testwork flowsheets, assay and QA/QC regimes. Test work procedures are being optimised as material

hardness, gold grade, gold particle size and distribution of gold reporting to various analytic streams is better

understood. Capacity of the test plant is expected to be in excess of 50 tonnes per month once operating at steady

state.

As at the date of this Interim MD&A, 14 samples from Comet Well are at SGS waiting to be sampled, and an additional

10 samples are in Karratha awaiting transport to SGS.

Exploration activity during the period focused on the Comet Well project. Bulk sampling recommenced mid-June,

targeting horizons in the Upper Cannonball Conglomerate down dip as defined by surface and trench mapping

undertaken in March 2018, in addition to step-out areas along strike identified by geological mapping and 3D modelling

of drilling data to date. A geophysical downhole survey program was also completed, and results are currently under

assessment.

The bulk sampling program will continue during the next three months, in addition to an approximately 4000m diamond

drilling program covering both Comet Well and Purdy’s Reward. Novo is also planning to return to Purdy’s Reward to

conduct bulk sampling using new protocols to ensure consistency of procedures and resulting data.

Dr. Quinton Hennigh, the Company’s president and chairman and a qualified person as defined by National instrument

43-101, has approved the technical contents of this Interim MD&A.

Quality Control and Quality Assurance:

Novo staff, under the supervision of Dr. Quinton Hennigh, Novo’s President and Chairman, collected bulk samples.

Bulk samples are being submitted to SGS Minerals in Perth, Australia where they are treated in a test plant. As the

gold mineralization at Comet Well is extremely coarse, the entire sample is crushed and screened and passed through

a metal detector to collect any nuggets in the sample. Once detected, the sample is again crushed, screened and

further processed through a gravity concentrator. The concentrates and tails are analyzed, with the final grade based

upon the gold recovered from each of the three sample streams. Samples are scrutineered by independent consultants

from RSC Mining and Mineral Exploration, Perth, whilst each sample is collected and each sample is treated at the

laboratory.

Beatons Creek Gold Project

On April 1, 2019, the Company announced an updated resource estimate (the “2019 Resource Estimate”) for its Beatons Creek conglomerate gold project located in the eastern Pilbara region of Western Australia. The 2019 Resource Estimate incorporated diamond drilling and trench channel sampling conducted in 2018. Additionally, bulk sampling was used to validate a significant portion of the oxide resource. The effective date of the 2019 Resource Estimate was March 29, 2019. A technical report in respect of the 2019 Resource Estimate will be filed under the Company’s SEDAR profile upon its completion.

Highlights:



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- The updated 2019 Resource Estimate included a 30% increase in tonnes driven predominantly by an improved geological framework from the recent diamond drilling program compared to the previous 2018 estimate supported by the technical report titled “NI 43-101 Technical Report Resource Update, Beatons Creek Gold Project, Pilbara Region, Australia” issued on November 20, 2018 (the “2018 Resource Estimate”) and filed on

SEDAR (www.sedar.com) under the Company’s profile on November 21, 2018.

- The new model saw an increase of 115,000 oz Au (+33%) in the Indicated Mineral Resource category (over the 2018 Resource Estimate’s Measured + Indicated) within the Open Pit.

- Recent three-stage gravity recoverable gold (“GRG”) test work on the fresh mineralization achieved a gravity recovery in the range of 89-95%.

- The expanded 2019 Resource Estimate, along with Beatons Creek’s high metallurgical recovery (+97% gravity + carbon-in-leach; please refer to the Company’s news release dated March 7, 2017 for further details), make it a premier gold deposit in the Nullagine mining camp in the eastern Pilbara region.

- Mineralization remains open to the north-west and south-west with several areas identified for resource development drilling.

2019 Resource Estimate:

Open Pit Mineral Resources (oxide and fresh mineralization)

Cut-off Grade Tonnes Grade Ounces Troy Au

Classification Au g/t (x1000) Au g/t (x1000)

Indicated 0.5 6,645 2.1 457

Inferred 0.5 3,410 2.7 294

Open Pit Mineral Resources (oxide mineralization)



Indicated 0.5 4,500 1.9 272

Inferred 0.5 765 1.8 44

Open Pit Mineral Resources (fresh mineralization)



Indicated 0.5 2,145 2.7 185

Inferred 0.5 2,645 2.9 250

Underground Mineral Resources (fresh mineralization)



Inferred 3.5 885 5.3 152

Total Mineral Resources (oxide and fresh mineralization; open pit and underground)




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Indicated 0.5 6,645 2.1 457

Inferred 0.5, 3.5 4,295 3.2 446

Notes:

1. Open pit Mineral Resources contain oxide and fresh mineralization within an optimized shell and constrained within a mineralized wireframe. 2. An optimized Whittle pit shell was estimated with the following indicative parameters:

(a) USD $1,311 (AUD $1,850) / troy ounce; (b) Metallurgical recoveries of 95% oxide and 90% fresh; (c) SGs applied: Oxide 2.40 t/m3 and fresh 2.85 t/m3 based on measurements taken on drill core; (d) USD $2.40 / tonne mining cost for oxide and USD $3.68 / tonne for fresh; (e) USD $17.00 / tonne oxide and USD $19.00 / tonne fresh processing cost; and (f) USD $3.00 / tonne general and administrative costs.

3. Underground Mineral Resources contain fresh mineralization outside the optimized shell. Underground resources are constrained to discrete areas of contiguous mineralization. NB: cut-off grade for underground resource has been increased from 2.0 Au g/t to 3.5 Au g/t for the 2019 Resource Estimate. 4. Columns may not total due to rounding. 5. One troy ounce is equal to 31.1034768 grams.

In this MD&A, the terms “Mineral Reserve”, “Mineral Resource”, “Inferred Mineral Resource”, Indicated Mineral Resource” and Measured Mineral Resource” have the meanings given in the CIM Definition Standards on Mineral Resources and Mineral Reserves adopted by the Canadian Institute of Mining, Metallurgy and Petroleum Council. Resource Modelling

The spatial extent of the 2019 Resource Estimate covers a surface area of over 2km x 2km. Mineralization exists as multiple sub-horizontal, narrow stacked and un-classified ferruginous-conglomeritic horizons (“reefs”), which are interbedded with un-mineralized conglomerate, sandstones and grits with minor intercalations of shale, mudstone, siltstone and tuffs. Reefs vary from <1 m to several metres thick and are continuous for up to 2km.

Mineral Resources were estimated from 3,909 samples, sourced from 2,422 samples from reverse circulation holes, 302 samples from diamond core holes, and 1,185 trench ‘channel’ samples. The majority of assays used for the estimate were determined using the LeachWELL (cyanide leaching) technique, with the 2018 diamond drilling and trench programs also analysing the LeachWELL residues by fire assay.

Grade interpolation was performed using a three-pass Ordinary Kriging (“OK”) estimation method within modelled reef

domains. Wireframed mineralized domains differentiate between regionally continuous marine lags and localized

stacked-channel mineralization. A weathering profile has further differentiated the estimate into oxide and fresh

components.

All samples were composited to 1m for estimation. Composites were analysed and top-cut per domain using statistical

and graphical methods. OK was constrained by variograms per domain, though some domains had too few samples

to define an acceptable variogram. In such cases, the most appropriate domain variogram was applied based on

geological reasonableness. A total nugget effect of 65% was applied during the kriging process. Two estimation block

sizes were applied: 20m by 20m by 1m and 40m by 40m by 1m for relatively densely spaced data versus sparsely

spaced data respectively. All blocks were sub-blocked to 2.5m by 2.5m by 0.25m. Block size and number of samples

applied in search passes were selected based on kriging neighbourhood analysis. Estimation was undertaken in three

passes, with passes one and two being no more than the geostatistical range defined in the variogram. Search pass

three used up to three times the geostatistical range. The estimate was validated by visual comparison of samples and

estimation block grade by domain, moving window plots, and global grade comparisons. The 2018 bulk sampling

program was also used to validate sections of the oxide mineralization (refer to the Company’s news release dated

February 20, 2019). Indicated Mineral Resources were classified based on passes one and two, and Inferred Mineral

Resources classified based on pass three. As well as search passes, resources were also classified on consideration



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of sample data quality, mix of different sample types, and quantity and quality of SG data. The qualified person (as

defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects published by the Canadian

Securities Administrators (“NI 43-101”)) has applied the principles of reasonable prospects of eventual economic

extraction. Geostatistical analysis was undertaken using Snowden Supervisor [v8.11.0] software and estimation was

undertaken in Datamine Studio RM [v1.4.175] software.

The Mineral Resource estimation process was peer reviewed by Mr. Ian Glacken FAusIMM(CP), a Director and

Principal of Optiro Pty Ltd. Optiro have endorsed the estimation approach and classification.

Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability; it is uncertain if applying economic modifying factors will convert Measured and Indicated Mineral Resources to Mineral Reserves. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues, however, no issues are known at this time. The quantity and grade of reported Inferred Mineral Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Mineral Resources as an Indicated or Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category. The Mineral Resources in this MD&A were estimated using current Canadian Institute of Mining, Metallurgy and Petroleum (CIM) standards, definitions and guidelines.

Dr. Simon C. Dominy, FAusIMM (CPGeo) has coordinated the 2019 Resource Estimate for the Beatons Creek conglomerate gold project, and is independent of the Company for purposes of NI 43-101. Dr. Dominy is a Qualified Person as defined by NI 43-101. Metallurgical Test Work on Fresh Mineralization

Three (3) PQ diamond drill holes (BCMET18-021, BCMET18-022, BCMET18-023) were drilled for metallurgical

testwork within Fresh mineralization. These holes each intersected two (2) mineralized horizons within the Fresh zone

(M1 and M2 reefs).

Whole core was taken for each of the six intersections and subjected to non-destructive head grade assay by

PhotonAssay, followed by comminution testwork. The three intersections of each reef were then blended to form two

approx. 60 kg composites for M1 and M2. These were each subjected to the three-stage gravity recoverable gold test

(the so-called “Laplante” test) to determine the GRG of the composites. Leach testwork on the GRG residues is currently

being completed.

The result of the GRG testwork was a 95% GRG recovery for the M1 composite (head grade 5.6 g/t Au) and 89% GRG

recovery for the M2 composite (head grade 4.6 g/t Au).

All metallurgical testwork was undertaken at Metallurgy Pty Ltd, Perth, Australia. PhotoAssay analysis was undertaken

at MinAnalytical Pty Ltd, Perth, Australia. All testwork and analysis was supported by a QAQC programme including

process documentation, blanks, barren flushes and CRMs (where appropriate).

Receipt of Mining Approvals On May 14, 2019, the Company announced that environmental approvals for mining the Beatons Creek conglomerate gold project located in the eastern Pilbara region of Western Australia had been granted. Additionally, the final mining lease required to complete the Beatons Creek gold project, M46/532, has now been granted. All necessary tenure and Native Title agreements are now in place.

Highlights

- Granting of the mining lease for tenement M46/532 (known as the Edwards Lease) is important to Novo as it contains some of the highest grade material and covers some of the planned waste dump footprint. It also means that just under 99% of all ounces recently reported in the 2019 Resource Estimate are now contained within granted mining leases.



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- All necessary Native Title agreements and tenure are now in place for the entire Beatons Creek gold project resource estimate (oxide & fresh mineralisation).

- Novo’s previously announced options study continues to consider a processing route for the Beatons Creek gold project, now underpinned by the certainty of a significant source of oxide mill feed.

- These approvals apply to the Beatons Creek gold project’s oxide resource. All necessary environmental test-work for the Beatons Creek gold project oxide tailings product (carried out to the standards required by the relevant environmental regulatory agencies) has been completed, confirming an environmentally benign tailings product.

- Work will now commence for an approvals submission for the Beatons Creek gold project’s fresh resource. The granting of Mining Leases and mining approvals follow a rigorous assessment process undertaken by the Western Australian Departments of Mines, Industry Regulation and Safety and Water and Environmental Regulation and require comprehensive technical input including:

- Environmental studies (ecological, hydrogeological and social environmental impacts, mineralization and waste chemical composition)

- Mining plans – mine closure planning, mining techniques, waste dump design and location, and safety management plans

- Native Title – demonstration that a mining agreement is in place with all Native Title parties that considers royalties, employment opportunities, community engagement and cultural awareness.

Talga Talga Project

- Talga Talga is one of Novo’s East Pilbara assets and is located approximately 110 km north of Beatons Creek. Gold occurs in lode quartz veins hosted by metamorphosed volcanic and sedimentary rocks of the Warrawoona Supergroup, the same rocks that host Calidus Resources Ltd.’s Warrawoona gold project approximately 35 km south of Talga Talga.

- Spot rock chip sampling of veins has returned highly encouraging assay results including grades of 81.4 g/t, 46.9 g/t, 35.1 g/t and 30.0 g/t gold (these grades are not necessarily representative of mineralization at Talga Talga). Of a total of 149 samples, 68 returned grades greater than 0.5 g/t gold and 33 returned grades greater than 5.0 g/t gold.

- These rock chip results combined with detailed mapping define a corridor of mineralized structures approximately three kilometers long.

- An updated geological interpretation will drive further exploration in 2019 anticipated to include a component of diamond drill testing.

Spot rock chip samples from Talga Talga were submitted to Genalysis Laboratory in Perth, Australia. Given the occurrence of coarse gold on the property, analyses were performed on 1 kg pulverized charges subjected to LeachWell™ technique. Following LeachWell™ analysis, tailings from each sample were rinsed and dried. A 50 gram split was subjected to fire assay with OES-finish. Grades reported in this MD&A are a mathematical combination of LeachWell™ analyses and residual gold in tails as determined by fire assay. There were no limitations to the verification process and all relevant data was verified.

Dr. Quinton Hennigh, P. Geo., the Company’s, President and Chairman and a qualified person as defined by NI 43-101, has approved the geological content of this MD&A. Dr. Simon Dominy, FAusIMM (CP), a consultant geometallurgist to the Company and a qualified person as defined by NI 43-101, has approved the processing and bulk sample grade content of this MD&A.

On October 10, 2018, the Company also announced an updated robust near-surface resource estimate (the “Beatons Creek 2018 Resource Estimate”) for its Beatons Creek gold project located in the Nullagine region of Western Australia. The Beatons Creek 2018 Resource Estimate is based on multiple campaigns of reverse circulation drilling and trench (“costean”) sampling conducted between 2015 and 2018. The effective date of the Beatons Creek 2018 Resource



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Estimate is January 1, 2018. A technical report in respect of the 2018 Resource Estimate will be filed under the Company’s SEDAR profile.

Highlights:

The Beatons Creek 2018 Resource Estimate includes a 17% increase in near surface measured and indicated Au ounces over the 2015 estimate supported by a technical report entitled “NI 43-101 Technical Resource Report, Beatons Creek Gold Project, Pilbara Region, Australia” dated August 31, 2015 prepared by Arnand van Heerden, Pri.Sci.Nat, PGeo, Principal Geologist of Tetra Tech, Inc. which was filed under Novo’s SEDAR profile on October 13, 2015 (the “2015 Estimate”).

Inferred near surface Au ounces increase by 40% over the 2015 Estimate.

This resource upgrade along with Beatons Creek’s very high metallurgical recovery (+97% gravity + carbon-in-leach) make it the premier gold deposit in the Nullagine mining camp.

Significant room for resource expansion remains.

Beatons Creek 2018 Resource Estimate:

Near Surface Mineral Resources


Classification Au g/t (x1000) Au g/T (x1000)

Measured 0.5 816 2.5 65

Indicated 0.5 3,749 2.3 277

Measured +

Indicated 0.5 4,565 2.3 342

Inferred 0.5 3,448 2.5 282

Underground Mineral Resources



Measured 2 0.39 2.9 0.04

Indicated 2 29 3.1 3

Measured +

Indicated 2 29 3.1 3

Inferred 2 342 3.6 40

Global Mineral Resources



Measured 0.5, 2 816 2.5 65

Indicated 0.5, 2 3,778 2.3 280



37

Measured +

Indicated 0.5, 2 4,594 2.3 345

Inferred 0.5, 2 3,790 2.6 322

Notes:

1. Near surface mineral resources contain oxide and sulphide material within an optimized shell and within a mineralized wireframe. 2. Optimized shell estimated using Lerch-Grossam algorithm with the following indicative parameters:

(a) $USD 1,246/troy ounce; (b) Recoveries of 95% oxide and 90% sulphide; (c) $USD 2.4/T mining cost for oxides, and 3/T for sulfides; (d) $USD 15/T oxide and $USD 17/T sulphide processing cost; and (e) $USD 2/T general & administrative costs.

3. Underground mineral resources contain sulphide resources outside of an optimized shell and within a mineralized wireframe. 4. Columns may not total due to rounding. 5. One troy ounce is equal to 31.1034768 grams.

Resource Modelling

Mineral resources were estimated by multiple pass Ordinary Kriging (OK) method within modelled reef domains. Mineral resources are currently defined in seven reef domains each divide into oxide and sulphide mineral type by a shallow weathering profile.

The majority of assays used for the estimate were determined using LeachWELL® methodology, which was statistically determined to be the most reliable method. Assays were capped at 25 Au g/T prior to compositing and were statistically evaluated on a reef domain and mineral type basis.

Mineral resources were estimated from 35,063 samples, sourced from 32,549 samples from reverse circulation holes, 681 samples from diamond holes, and 1,833 costean samples. Capping was analyzed for each reef’s oxide and sulfide portions using histograms and probability plots to determine where high-grade distribution tails became erratic and deviated from lognormal. Sampled intervals from all data sources were composited to 1 m. Compositing initiated and terminated at the top and bottom of the reef contacts.

Mineral resources that are not mineral reserves and do not have demonstrated economic viability, it is uncertain if applying economic modifying factors will convert measured and indicated mineral resources to reserves. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues, however, no issues are known at this time. The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category. The mineral resources in this disclosure were estimated using current Canadian Institute of Mining, Metallurgy and Petroleum (CIM) standards, definitions and guidelines.

Leonel Lopez, AIPG- Geol. Eng. QP, SME-RM, of Tetra Tech, Golden, Colorado, has coordinated the Beatons Creek 2018 Resource Estimate for the Beatons Creek gold project, and is independent of the Company for purposes of NI 43-101. Mr. Lopez is a Qualified Person as defined by NI 43-101.

On August 31, 2018, the Company announced that it had finalized the outstanding components of a transaction with Mark Gareth Creasy and entities controlled by him (collectively, the “Creasy Group”). As a result, Novo now has:

• four joint ventures with the Creasy Group under which it has earned a 70% interest in the “gold rights” (gold and minerals associated with and normally mined with gold) relating to the Nullagine and Marble Bar properties. Nullagine Gold Pty. Ltd. is entitled to become a 70% registered holder of those properties; and

• one joint venture with the Creasy Group under which it owns 70% interest in all minerals rights relating to the Callina Creek property. Nullagine Gold Pty. Ltd is a 100% registered holder of this tenement, and will transfer a 30% interest to the Creasy Group.



38

The Creasy Group retains prospecting rights across all joint venture properties. The Creasy Group’s interests under each joint venture are free carried for all exploration related expenditures through to the completion of any bankable feasibility study. If a mining decision is made under any of the joint venture agreements following a bankable feasibility study, and the Creasy Group elects not to participate in mining, its interest in relation to that mining area and the underlying ground will be diluted and eventually transferred to Nullagine Gold Pty. Ltd and will thereby convert to a royalty. The transaction was completed pursuant to definitive agreements signed with the Creasy Group in July 2012 (the “2012 Agreements”) and varied in January 2015 by signing further agreements (the “2015 Agreements”). For further details, please see the Company’s news releases dated July 20, 2012, January 27, 2015 and July 28, 2015. Since 2012, the Creasy Group has held 100 shares (the “Conditional Shares”) in Conglomerate Gold Exploration Pty Ltd, one of Novo’s Australian subsidiaries (“CGE”). From the date of issuance, the Conditional Shares have had no economic or voting rights unless released from escrow. The 2012 Definitive Agreements and 2015 Definitive Agreements together provided Novo with the right to acquire the Conditional Shares from the Creasy Group in exchange for 2,139,534 Novo common shares upon Novo and the Creasy Group entering into additional agreements regarding certain third party owned tenements in the Nullagine region, as referred to in the Company’s news releases of January 27, 2015 and July 20, 2012. Entry into those additional agreements would release the Conditional Shares from escrow. The additional agreements were not entered into and the parties have agreed that the proposed transaction on the third party owned tenements in the Nullagine region will not transpire. As a result, the Conditional Shares have been bought back by CGE for the nominal consideration of AUD $1.00, pursuant to a selective share buyback in accordance with the CGE Share Issue Agreement (as referred to in the Company’s news release dated July 20, 2012). Novo is therefore no longer obliged to issue the 2,139,534 common shares to the Creasy Group and will not do so. The CGE Shareholders Agreement and a CGE Share Issue Agreement referred to in the Company’s news release dated July 20, 2012 have been terminated. As required by the 2015 Definitive Agreements, Novo has also entered into a new joint venture with the Creasy Group - the Callina Creek Joint Venture Agreement. It is on materially similar terms as the existing four joint ventures between Novo and the Creasy Group. The new joint venture covers a tenement adjacent to Novo’s existing Whim Creek Mining joint venture with the Creasy Group.

Corporate Update

Mr. Simon Pooley, the Company’s Chief Operating Officer, resigned on October 10, 2018.

Sumitomo Memorandum of Understanding

On January 7, 2019, the Company announced the extension and expansion of its previously announced non-binding memorandum of understanding (the “MOU”) with Sumitomo Corporation of Tokyo, Japan (“Sumitomo”) with the objectives of evaluating, advancing, and developing the Company’s Australian gold projects. The MOU reflects the following intentions of the parties:

- Sumitomo will provide human resource assistance to assist Novo with the above objectives. - Sumitomo commits to make available up to 5,000,000,000 Japanese Yen in order to accomplish the above

objectives, subject to mutual agreement on development plans for a project(s) and mutual agreement on a transaction structure(s).

- Novo shall grant to Sumitomo the right to fund a project through an option to purchase an interest in a project based on a mutually agreed-upon valuation or through a subscription for Novo’s common shares at prevailing market prices subject to certain discounts (in accordance with the policies of the TSX-V). Sumitomo will retain the sole and exclusive right to determine the final funding mechanism.



39

- If Sumitomo agrees to commit funds to a project and Novo agrees to receive such funding, Novo shall seek approval from its board of directors to provide Sumitomo with a right of first refusal (the “ROFR”) over the project. If granted, the ROFR shall require Novo to provide notice to Sumitomo if an offer is provided to Novo by a third party regarding the project (a “Transaction”). Novo shall deliver to Sumitomo a written offer disclosing terms at the same price and otherwise on the same terms and conditions as set out in the third party offer, and Sumitomo will have a thirty (30) day period to elect to enter into the Transaction with Novo.

- The term of the MOU will expire December 31, 2023.

FINANCIAL POSITION AND LIQUIDITY Review of Financial Results

* On November 18, 2014, the Company participated in the inaugural financing and purchased 2,000,000 common

shares of Elementum 3D Inc. (“E3D”), an unlisted private company based in Erie, Colorado. On March 7, 2018, the

Company participated in the rights offering financing of E3D. E3D is an additive manufacturing research and

1st

Quarter

2019

April 30,

2018

Restated

$’000

4th

Quarter

2018

January

31, 2018

Restated

$’000

3rd

Quarter

2018

October

31, 2017

$’000

2nd

Quarter

2018

July 31,

2017

$’000

1st

Quarter

2018

April 30,

2017

$’000

4th

Quarter

2017

January

31, 2017

$’000

3rd

Quarter

2017

October

31, 2016

$’000

2nd

Quarter

2018

July 31,

2017

$’000

Revenue - - - - - - - -

Net Income

Gain/(Loss) (5,044) (2,517) (9,960) (4,675) (554) 241 (2,935) (771)

Amendment

of fair value

gain on

derecognitio

n of

associate

4,315* - - - - - - -

Amendment

of unrealized

gain of

Comet Well

deferred

consideration

**

(492) (139) - - - - - -

Amended

Net income (1,221) (2,656) (9,960) (4,675) (554) 241 (2,935) (771)

Basic and

Diluted

Gain (Loss)

Per Share

($0.01) ($0.01) ($0.07) ($0.04) ($0.01) $0.00 ($0.03) ($0.01)



40

development company which specializes in the creation of advanced metals, composites, and ceramics. Through this

right offering financing, the Company purchased 76,560 additional common shares of E3D at a price of USD $1.68 per

common share. As a result of other share issuances during the rights offering financing, the Company’s ownership in

E3D was diluted to 14.87%. As a result of this and other factors, the Company determined that it could no longer exert

significant influence over E3D and thus no longer met the definition of an associate in accordance with IAS 28,

Investments in associates and joint ventures. As such, the Company’s 2,076,560 common shares of E3D have been

accounted for as marketable securities from the date E3D ceased to be an associate. The Company recognized a fair

value gain on de-recognition of associate in the statement of comprehensive loss with subsequent fair value changes

in this investment re-measured at FVTOCI.

** See notes 6 and 14 of the Interim Financial Statements as well as the Comet Well Property section below for

further details.

Overall, net loss for the period reflected continued increased exploration activities associated with Novo’s expanding

programme to bulk sample the most prospective areas of its extensive 12,000km2 landholdings. consulting fees, share-

based compensation, foreign exchanges gains/losses, and wages and salaries were the major components that caused

variances in net losses from quarter to quarter.

During the quarter ended April 30, 2018, the major expenses of the Company were accounting and audit fees,

consulting services, insurance expenses, legal fees, meals and travel expenses, office and general expenses, transfer

agent and filing fees, and wages and salaries totaling $1,639,000 (April 30, 2017 - $475,000). In addition, non-cash

stock-based compensation expenses of $4,067,000 (April 30, 2017 - $87,000) were incurred during the quarter ended

April 30, 2018. The Company has acquired numerous mineral exploration properties in Karratha during the latter half

of the year ended January 31, 2018 and corporate expenses have increased as a result. Stock-based compensation

expenses also increased as the Company issued options to employees and consultants.

During the quarter ended April 30, 2018, operating expenses were mitigated by non-operating items such as interest

and other income of $165,000 (April 30, 2017 – $nil), foreign exchange gains of $12,000 (April 30, 2017 – $8,000), a

deferred consideration accretion expense of $7,000(April 30, 2017 - $nil), and a fair value gain on derecognition of

associate $4,315,000 (April 30, 2017 - $nil).

Operating Activities Cash used by operating activities during the three-month period ended April 30, 2018, was $1,38,000 (April 30, 2017

– cash provided of $770,000). Adjustments for non-cash items, namely share-based compensation, foreign exchange,

and an unrealized gain on deferred consideration for mineral property comprised the difference between quarters.

Please see Notes 6 and 11 of the Company’s Interim Financial Statements for more details.

Investing Activities

Cash used for investing activities during the three-month period ended April 30, 2018, was $6,455,000 (April 30, 2017

- $2,538,000). The Company’s principal investing activity is the acquisition and exploration of its resource properties.

During the three-month period ended April 30, 2018, the Company incurred $4,989,000 (April 30, 2017 - $2,538,000)

on its resource properties. Please see Note 6 of the Company’s Interim Financial Statements for more details.



41

Financing Activities

Cash provided by financing activities during the three-month period ended April 30, 2018 was $4,102,000 (April 30,

2017 - $1,823,000), which relates to cash received from stock option and warrant exercises. Please see Note 8 of the

Company’s Interim Financial Statements for more details.

Cash Resources and Going Concern At April 30, 2018, the Company had cash of $51,393,000 and an additional $15,335,000 in short-term investments. Working capital as at April 30, 2018 was $65,381,000. To fully develop the Company’s mineral properties into large-scale mining operations with processing plants, the Company may have to raise additional cash or form strategic partnerships; however, there cannot be any certainty that additional financing can be raised or that strategic partnerships can be found.



42

OPERATIONS Exploration and Evaluation Assets

The Company’s exploration and evaluation assets are comprised of the following:

Beatons

Creek Region US Region Karratha Region

Tuscarora Comet Well Artemis Welcome

Exploration 100%-Owned Farno

McMahon Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Balance, January 31, 2018 39,360 303 13,876 21,091 2,625 617 - 77,872

Acquisition Costs - - 218 - - - 269 487

Exploration Expenditures:

Drilling 109 - - 906 - - - 1,015

Field Work 36 - 337 71 - - - 444

Fuel 34 - 41 - - - - 75

Geology 722 - 126 - - - - 848

Legal 1 - 3 10 - - - 14 Meals, Travel, and

Vehicle/Equipment Hire 119 - 1,108 - - - - 1,227

Office and General 81 - 59 - - - - 140

Reports, Data and Analysis 89 - 164 75 - - - 328

Rock Samples 17 - 693 30 - - - 740

Native Title 97 - - - - - - 97

Tenement Administration 83 - 102 3 - 1 - 189

Option Payments Received - (101) - - - - - (101)

Foreign Exchange (995) 13 (351) (533) (66) (15) - (1,947)

393 (88) 2,282 562 (66)

(14) - 3,069

Balance, April 30, 2018 39,753 215 16,376 21,653 2,559 603 269 81,428



43

Beatons Creek

Region US Region Karratha Region

Tuscarora Comet Well Artemis Welcome Exploration Granted tenements Total

$'000 $'000 $'000 $'000 $'000 $'000 $'000

Balance, January 31, 2017 34,782 440 - - - - 35,222

Acquisition Costs 41 - 13,203 16,495 2,600 - 32,339

Exploration Expenditure:

Drilling 686 - - 942 - - 1,628

Feasibility study 172 - - - - - 172

Fieldwork 279 - 43 678 - - 1,000

Fuel 72 - 166 72 - - 310

Geology 2,204 2 44 349 - - 2,599

Legal 155 4 128 124 7 - 418

Meals, Travel and Vehicle/Equipment Hire 515 1 225 1,286 - - 2,027

Office and General 265 - 30 57 - - 352

Reports, Data and Analysis 419 - - 453 17 433 1,322

Rock Samples 857 1 18 554 - - 1,430

Native Title 447 - - - - - 447

Tenement Administration 759 6 19 81 2 184 1,051

Foreign Exchange 147 (25) - - - - 122

Option Payments Received (814) (125) - - - - (939)

R&D Refund (1,192) - - - - - (1,192)

Impairment (434) - - - - - (434)

4,537 (136) 673 4,596 26 617 10,313

Balance, January 31, 2018 39,360 304 13,876 21,091 2,626 617 77,874



44

ADDITIONAL DISCLOSURE Related Party Transactions

A number of key management personnel, or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of those entities. Certain of these entities transacted with the Company during the year, and amounts incurred were expensed as consulting fees. The relationship with one of these entities was terminated during the period ended January 31, 2018. (a) Key Management Personnel Disclosures

During the periods ended April 30, 2018 and 2017, the following amounts were incurred with respect to the key management and directors of the Company:

April 30, 2018 April 30, 2017

$’000 $’000

Consulting services 45 57 Wages and salaries 366 43 Wages and salaries included in exploration and evaluation assets

- 79

Share-based payments 3,497 87

3,908 266

(b) Other Related Party Disclosures

During the periods ended April 30, 2018 and 2017, the following amounts were incurred with respect to consulting services provided by a corporation which employed the former Chief Financial Officer:

April 30, 2018 April 30, 2017

$’000 $’000 Consulting services - 30

- 30



45

Outstanding Share Data

The Company is authorized to issue an unlimited number of common voting shares without nominal or par value. All issued common shares are fully paid. As of September 30, 2019, the following common shares and stock options were issued and outstanding:

Number of Shares Exercise Price

($)

Expiry Date

Common Shares 178,860,048 - -

Stock Options 150,000 0.20 June 10, 2020

Stock Options 2,350,000 0.94 August 15, 2021

Stock Options 1,750,000 0.95 June 5, 2022

Stock Options 2,435,000 1.57 July 18, 2022

Stock Options 2,525,000 7.70 October 20, 2022

Stock Options 400,000 7.94 November 6, 2022

Stock Options 950,000 3.47 January 30, 2023

Stock Options 430,000 4.60 June 5, 2023

Warrants 14,000,000 6.00 September 6, 2020

Fully Diluted 203,850,048

Additional Disclosure for Venture Issuers without Significant Revenue Additional disclosure concerning the Corporation’s general and administrative expenses and mineral property costs is provided in the Interim Financial Statements and related notes that are available on the SEDAR website www.sedar.com.


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