Preliminary Economic Assessment; Beatons Creek Conglomerate Gold Project

VANCOUVER - Novo Resources Corp. reported the completion of a preliminary economic assessment (PEA”) for the Beatons Creek conglomerate gold project, located in the Pilbara region of Western Australia. In addition to the potential viability of mineral resources at the Project reported by the PEA, Beatons Creek displays significant upside resource potential from deposit extensions. Novo has identified numerous new near-surface exploration targets across its approximate 1,250 km2 of land holdings across the Nullagine mining district.

Beatons Creek PEA highlights: The potential for average 100,000 oz conglomerate gold production per year over 6 years for 627,0001 oz potential total production over life of mine (LOM), excluding current underground resources; Comparable production costs among the field of current and imminent Australian gold producers: LOM C1 cash costs of US$702/oz and LOM all-in sustaining costs (AISC) of US$974/oz; Robust base-case scenario: at a gold price of US$1,700/oz and an A$-US$ foreign exchange rate of 0.75:123, potential for pre-tax US$318 million (C$400 million) NPV5% and average annual EBITDA of US$88 million / post-tax US$250 million (C$315 million) NPV5%; Synergistic combination of Beatons Creek with pre-existing production infrastructure acquired pursuant to the acquisition of Millennium Minerals Limited; and Considerable upside potential recognized in Beatons Creek conglomerate resource expansion potential as well as throughout the consolidated Nullagine mining district.

The PEA is preliminary in nature, and is based on a mineral resource estimate that includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

“Completion of this PEA demonstrates the strength of Beatons Creek,” said, Quinton Hennigh, Chairman and President. “The PEA indicates the potential viability of mineral resources at Beatons Creek, with a competitive AISC of US$974/oz. Given the expansive nature of gold-bearing conglomerates in the Nullagine region, there is the potential for the resource base to grow through step-out exploration and support an extension to the LOM. The robust anticipated cash generation reported by the PEA should support Novo’s exploration activities across its vast holdings in the Pilbara, with further potential to grow production organically.”

Novo also reports that its board of directors has ratified management’s recommendation to mine the Project based on the PEA. The Company is currently in the late stages of commissioning Millennium’s Golden Eagle processing facility (the “Golden Eagle Mill”) and continues to ramp up mining and production into Q2 2021. The decision by the Company to produce at Beatons Creek was not based on a feasibility study of mineral reserves demonstrating economic and technical viability and, as a result, there is an increased uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery, including increased risks associated with developing a commercially mineable deposit. Historically, such projects have a much higher risk of economic and technical failure. There is no guarantee that that anticipated production costs will be achieved. Failure to achieve the anticipated production costs would have a material adverse impact on the Company’s cash flow and future profitability.