Novo Resources - Management Reports 2021

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MANAGEMENT’S DISCUSSION AND ANALYSIS

For the eleven-month period ended December 31, 2020 and the year ended January 31, 2020

(Expressed in Canadian Dollars)

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

The following Management Discussion and Analysis (“ MD&A ”) of the results of operations and financial condition of Novo Resources Corp. (the “ Company ” or “ Novo ”), prepared as of March 31, 2021, should be read in conjunction with the audited consolidated financial statements of Novo for the 11 months ended December 31, 2020 and the year ended January 31, 2020 (the “ Audited Financial Statements ”) and accompanying notes thereto. The Audited Financial Statements are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“ IFRS ”) and this MD&A includes the results of the Company’s subsidiaries, Novo Resources (USA) Corp., Conglomerate Gold Exploration (B.V.I.) Ltd., Karratha Gold Exploration (B.V.I.) Ltd., Conglomerate Gold Exploration Pty. Ltd., Nullagine Gold Pty. Ltd., Beatons Creek Gold Pty. Ltd., Grant’s Hill Gold Pty. Ltd., Karratha Gold Pty. Ltd., Rocklea Gold Pty. Ltd., Meentheena Gold Pty. Ltd., Farno-McMahon Pty. Ltd., and Millennium Minerals Pty. Ltd. All figures in this MD&A are in Canadian dollars unless stated otherwise.

During the eleven months ended December 31, 2020, the Company changed its fiscal year end to December 31, from January 31. The Company’s transition period is the eleven month period ended December 31, 2020, and the comparative period is the twelve month period ended January 31, 2020. The new financial year will align the Company with its peer group in the mineral resources sector. For additional information, please see the Company’s notice filed on the Company’s SEDAR profile on the SEDAR website at www.sedar.com on December 22, 2020.

In this MD&A:

“ Current Fiscal 2020 ” means the eleven month period ended December 31, 2020;

“ Prior Fiscal 2020 ” means the fiscal year ended January 31, 2020; and
“ Fiscal 2019 ” means the fiscal year ended January 31, 2019.

All amounts are expressed in Canadian dollars and all values are rounded to the nearest thousand dollars ($’000) unless otherwise noted. Additional information relating to the Company, including the Company’s annual information form for the eleven-month period ended December 31, 2020, is available on SEDAR at www.sedar.com.

Caution on Forward-Looking Information

This Annual MD&A contains “forward-looking information” within the meaning of Canadian securities laws. Forwardlooking information in this Annual MD&A includes, but is not limited to, information with respect to the impact of the coronavirus disease 2019 (“ COVID-19 ”) on the Company’s business and future cash flows; the use of proceeds from the Offering (hereinafter defined) and other available funds; the successful restart of the production infrastructure held by Millennium Minerals Pty Ltd (“ Millennium ”) recently acquired by the Company; the expected commencement of the mechanical sorting trial on the Comet Well project and Purdy’s Reward project; the value of certain Company assets, in particular the fair value of marketable securities held by the Company; the Company’s planned production from, and further potential of, the Company’s mineral properties; the Company’s ability to raise additional funds; the future price of minerals, particularly gold; the estimation of mineral resources; the realization of mineral resource estimates; capital expenditures; success of exploration activities; exploration and development issues; currency exchange rates; government regulation of exploration, development, and mining operations; and environmental risks. Estimates regarding the anticipated timing, amount and cost of exploration and development activities are based on numerous factors including but not limited to assumptions underlying mineral resource estimates and the realization of such estimates, the successful integration of Millennium following its recent acquisition, and the ability to successfully restart Millennium’s production infrastructure. Capital and development cost estimates are based on extensive research of the Company, purchase orders placed by the Company to date, recent estimates of development and operating costs and other factors. Forward-looking information is characterized by words such as “plan”, “expect”, “budget”, “target”, “schedule”, “estimate”, “forecast”, “project”, “intend”, “believe”, “anticipate” and other similar words or statements that certain events or conditions “may”, “could”, “would”, “might”, or “will” occur or be achieved. Forward-looking information is based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include: risks relating to the ongoing COVID-19 pandemic and measures intended to prevent its spread; the fluctuating price of

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

gold; success of exploration, development and operations activities; including the ability to successfully restart Millennium’s production infrastructure; the ability to successfully integrate the operations and personnel of Millennium and realize the anticipated benefits of the Millennium Acquisition; the ability to comply with and maintain the Sprott credit facility (the “ Credit Facility ”) in good standing; health, safety and environmental risks; risks relating to foreign operations and expropriation or nationalization of operations; variations in the estimation of mineral resources; uncertainty relating to mineral resources; the potential of cost overruns; risks relating to government regulation; the impact of Australian laws regarding foreign investment; access to additional capital; volatility in the market price of the Company’s securities; liquidity risk; risks relating to native title and Aboriginal heritage; risks relating to the construction and development of new operations; the availability of adequate infrastructure; the availability of adequate energy sources; seasonality and unanticipated weather conditions; limitations on insurance coverage; the prevalence of competition within the industry; currency exchange rates (such as the United States dollar and the Australian dollar versus the Canadian dollar); risks associated with foreign tax regimes; risks relating to potential litigation; risks relating to the dependence of the Company on outside parties and key management personnel; risks in the event of a potential conflict of interest; as well as those risk factors discussed or referred to herein and in the Company’s annual management’s discussion and analysis, which are incorporated herein by reference and are also available under the Company’s profile on the SEDAR website at www.sedar.com.

If any of these risks or uncertainties materialize, or if assumptions underlying the forward looking statements prove incorrect, actual results might vary materially from those anticipated in those forward looking statements. The assumptions referred to above and described in greater detail under “Risk Factors” should be considered carefully by readers.

The Company’s forward looking statements are based on the reasonable beliefs, expectations and opinions of management on the date of this Annual MD&A (or as of the date they are otherwise stated to be made). Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There is no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking statements. The Company does not undertake to update or revise any forward looking statements, except as, and to the extent required by, applicable securities laws in Canada.

DESCRIPTION OF BUSINESS AND OVERALL PERFORMANCE

Novo was incorporated on October 28, 2009 pursuant to the provisions of the Business Corporations Act (British Columbia) as Galliard Resources Corp. On June 27, 2011, the Company changed its name from Galliard Resources Corp. to Novo Resources Corp. The Company’s shares trade on the Toronto Stock Exchange (the “ TSX ”) under the ticker symbol “NVO” and in the United States on the OTC market’s OTCQX International Exchange under the symbol “NSRPF”.

The Company is engaged primarily in the business of evaluating, acquiring, exploring, and developing natural resource properties with a focus on gold. The Company’s head office is located at Suite 880, 580 Hornby Street, Vancouver, British Columbia, V6C 3B6, Canada. The Company’s operational office and corporate staff are located at Level 1, 680 Murray Street, West Perth, Western Australia, 6005, Australia.

The Company is currently exploring and developing its numerous mineral properties, particularly Beatons Creek conglomerate gold project (the “ Beatons Creek Project ”) in Western Australia. Regional exploration also continued around the Karratha, Egina, and peripheral projects.

Current assets totalled $46,976,000 as at December 31, 2020 (January 31, 2020 - $35,698,000). The increase in total current assets is mainly due to an increase in cash pursuant to equity and debt financings which accompanied the acquisition of Millennium in September 2020 and the inaugural recognition of inventory held by Millennium. The Company deploys its cash in order to fund exploration and development activities on its mineral properties, particularly the Beatons Creek project since the acquisition of Millennium. Non-current assets at December 31, 2020 totalled $409,432,000 (January 31, 2020 - $122,351,000). The increase in non-current assets is mainly due to the recognition

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

of Millennium’s production infrastructure and exploration tenure covering approximately 273km[2] , an increase to the value of the Company’s marketable securities, and the recognition of the Company’s investment in New Found Gold Corp. (“ New Found ”) as an investment in associate as a result of the Company’s 10.08% position in New Found.

During Current Fiscal 2020, the Company reported a net loss after tax of $17,710,000, which represents a $0.09 basic and diluted loss per share (Prior Fiscal 2020 – loss after tax of $11,962,000, which represents a $0.07 basic and diluted loss per share). The increase in loss is mainly attributable to the increase in office and general expenses and salaries and wages as the Company expands its Beatons Creek Project development team, along with an increase in sharebased payments recognized over time.

2020 Highlights

Transformative Acquisition

In September 2020, the Company acquired Millennium (the “ Acquisition ”) and its key production infrastructure. Millennium’s assets are located approximately 10 km south of the Beatons Creek Project in the Nullagine region, Shire of East Pilbara, Western Australia (see figure 1 below) and include the requisite processing infrastructure to accelerate Novo’s planned transition to a producing gold company.

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( Figure 1 : Map of Novo’s and Millennium’s tenure.)

The Acquisition was fully funded via brokered and non-brokered private placements of subscription receipts totalling $56 million and a US$60 million four-year Credit Facility with Sprott Private Resource Lending II (Collector), LP (“ Sprott ”), of which the Company has drawn an initial tranche of US$35 million. The Facility bears interest at 8% plus the greater of US 3-month LIBOR or 1% and is repayable in equal quarterly instalments commencing September 2022.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

The second US$25 million Credit Facility tranche is available to be drawn until March 31, 2021, at Novo’s sole discretion, upon delivery of a pre-feasibility study on the Beatons Creek Project acceptable to Sprott.

The Company completed a preliminary economic assessment (“ PEA ”) for the Beatons Creek Project in March 2021. In addition to the potential viability of mineral resources at the Project reported by the PEA, the Beatons Creek Project displays significant upside resource potential from deposit extensions.

Beatons Creek Project 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 the Beatons Creek Project with pre-existing production infrastructure acquired pursuant to the acquisition of Millennium

Considerable upside potential recognized in the Beatons Creek Project conglomerate resource expansion potential as well as throughout the consolidated Nullagine mining camp

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.

Novo also reports that its board of directors has ratified management’s recommendation to mine the Beatons Creek Project. The Company is currently in the late stages of commissioning the Golden Eagle Mill and continues to ramp up mining and production into Q2 2021. The decision by the Company to produce at the Beatons Creek Project was not based on a feasibility study of mineral reserves demonstrating economic and technical viability and, as a result, there is an increased uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery, including increased risks associated with developing a commercially mineable deposit. 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.

Beatons Creek Project PEA Summary

The PEA was prepared by Jason Froud (BSc Hons, Grad Dip (Fin Mkts), MAIG) and Andrew Grubb (BE (Mining), FAusIMM), and peer reviewed by Ian Glacken (BSc Hons, MSc (Mining Geology), MSc (Geostatistics) PGCert (comp), DIC, FAusIMM(CP), FAIG, CEng, MIMMM) of Optiro Pty Ltd of Perth, Australia. Optiro was supported by William George Gosling (BE (Extractive Metallurgy), FAusIMM) of GR Engineering Services, also of Perth, Australia. The Company plans to file an updated technical report in respect of Beatons Creek reporting on the PEA, in compliance with National Instrument 43-101 (“NI 43-101”), under the Company’s profile on the SEDAR website at www.sedar.com within 45 days.

1 Current LOM production extends into year 7 with the potential for 23,000 oz in year 7. The potential for 604,000 oz over 6 years is rounded to 100,000 oz average gold production per year over the first 6 years of LOM.

2 See “Key Assumptions” section below for further details.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

PEA Economics	Unit	Pre-Tax Post-Tax	Pre-Tax Post-Tax
NPV5%	US$ millions	$318	$250
Average annual cash flow	US$ millions	$64	$50
LOM unlevered cash flow (undiscounted)	US$ millions	$386	$260
Mine life	Years	6
Average annual production over LOM	Oz/year	101
LOM production	Oz	627

Economic Sensitivities to Gold Price (post-tax)	Economic Sensitivities to Gold Price (post-tax)
Per ounce of gold (US$)	NPV5% (US$ millions)
$1,600	$216
$1,700	$250
$1,800	$285
$1,900	$319
$2,000	$354

Opportunities

Novo owns approximately 1,250 km2 of prospective tenure within the Nullagine gold camp, approximately 283 km2 of which was acquired with Millennium, and plans to aggressively pursue near-term exploration and production opportunities across the gold field. Of highest importance are extensions of conglomerate gold mineralization around the Beatons Creek Properties and a recent conglomerate gold discovery located approximately 2 km southwest of the Beatons Creek Project called Skyfall. Novo also sees potential to unlock its other assets across the East Pilbara region including, but not limited to, its wholly-owned Talga Talga, Virgin Creek, Contact Creek, and Mt. Elsie projects.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

PEA Details

The Beatons Creek Project has been explored extensively by various companies since the late 1960’s. The Company acquired an initial interest in the Beatons Creek Project from Millennium in 2011 before acquiring a 100% interest in 2015. The Company most recently announced an updated mineral resource estimate in April 2019 outlining indicated mineral resources comprising 6.6 million tonnes at 2.1 g/t Au for 457,000 oz contained gold, with additional inferred mineral resources of 4.3 million tonnes at 3.2 g/t Au for 446,000 oz contained gold (refer to the resource summary table outlined below as well as the 2019 Beatons Creek Technical Report). M ineral resources that are not mineral reserves do not have demonstrated economic viability.

Mining and Processing

The Beatons Creek Project mining plan utilizes conventional open pit mining methods. Iron Mine Contracting Pty Ltd were awarded preferred contractor status by the Company in November 2020 and have been ramping up commissioning efforts to date. Mineralized material is stockpiled at a run of mine (“ROM”) pad at Beatons Creek before being hauled approximately 14 km to a ROM pad at the Golden Eagle Mill. Mineralized material passes through a single-stage jaw crusher before being ground to 150 µm utilizing a semi-autogenous grinding (“SAG”) mill. Gravity recovery is handled by a centrifugal concentrator and intensive cyanidation leach reactor. Leaching occurs in two tanks, and subsequent carbon adsorption occurs in seven carbon-in-leach tanks, the first three of which incorporate oxygen addition.

Mining and Processing Summary
Total mineralized material mined	(kt)	9,486
Total waste mined	(kt)	79,969
LOM strip ratio	(W:O)	8.43

Mineralized material milled	(kt)	9,486
Head grade	(g/t)	2.16
Contained Au	(koz)	660
Recovery rate	(%)	95%
Recovered Au	(koz Au)	627

Figures may not reconcile due to rounding.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

The Beatons Creek Project resource is as follows:

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)

	Cut-off Grade	Tonnes	Grade	Ounces Troy Au
Classification	Au g/t	(x1000)	Au g/t	(x1000)
Indicated	0.5	4,500	1.9	272
Inferred	0.5	765	1.8	44

Open Pit Mineral Resources (fresh mineralization)

	Cut-off Grade	Tonnes	Grade	Ounces Troy Au
Classification	Au g/t	(x1000)	Au g/t	(x1000)
Indicated	0.5	2,145	2.7	185
Inferred	0.5	2,645	2.9	250

Underground Mineral Resources (fresh mineralization)

	Cut-off Grade	Tonnes	Grade	Ounces Troy Au
Classification	Au g/t	(x1000)	Au g/t	(x1000)
Inferred	3.5	885	5.3	152

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

	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, 3.5	4,295	3.2	446

Notes:

Open pit mineral resources contain oxide and fresh mineralization within an optimized shell and constrained within a mineralized wireframe.
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/m[3] and fresh 2.85 t/m[3] 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.
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 g/t Au to 3.5 g/t Au for the Beatons Creek Technical Report. 4. Columns may not total due to rounding.
One troy ounce is equal to 31.1034768 grams.

Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Operating Costs

Operating costs for contract mining and in-house processing were developed from detailed budget estimates from reputable services providers with operational experience in the Pilbara region of Western Australia and recent operations experience for the Golden Eagle Mill. Beatons Creek is located near a large skilled labour pool with minimal COVID-19 restriction requirements due to a successful handling of the pandemic by state authorities. Beatons Creek is located adjacent to the partly sealed Marble Bar Road and less than 1 km away from the town of Nullagine.

Operating Costs (LOM)
Mining cost	(US$/t mined)	$3.60
Processing cost	(US$/t milled)	$17.18
Site SG&A & corporate cost	(US$/t milled)	$5.14
Sustaining capex	(US$/t milled)	$4.10
Cash cost	(US$/oz)	$702

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Sustaining Capital

Sustaining capital requirements over LOM are generally low due to the recently completed refurbishment of the Golden Eagle Mill. The Millennium tailings storage facility requires on-going monitoring as well as annual lifts to maintain capacity for production which together cost approximately US$1.5 million per annum.

Sustaining Capital (LOM)	US$ Millions	US$/t Milled
Mining	$30.40	$3.20
Processing infrastructure	$1.05	$0.11
Tailings storage facility	$7.50	$0.79
Total sustaining capital	$38.95	$4.10

AISC

AISC metrics are competitive with Australian gold developer and producer peers. A breakdown of Novo’s AISC4 is as follows:

AISC Summary (LOM)
Total mine operating cost (including stockpile adjustments and royalties3)	(US$/oz)	$825
Corporate cost overheads	(US$/oz)	$13
Sustaining capital	(US$/oz)	$62
Closure	(US$/oz)	$74
AISC	(US$/oz)	$974

Key Assumptions

The PEA uses a pricing assumption of US$1,700/oz gold price and A$-US$ foreign exchange rate of 0.75.

Since the Acquisition, the Company has focused on fast-tracking the Beatons Creek Project to production. GR Engineering Services’ AUD $8.3 million refurbishment of Millennium’s processing facility (the “ Golden Eagle Mill ”) was completed on time and under budget in February 2021. Beatons Creek Project site development continued through 2020, as did high-density grade control drilling to test the first months of planned operational areas. Approximately 85 Novo employees, along with major contractors including Iron Mine Contracting Pty Ltd, Rivet Mining Services, Redline Drill and Blast Pty Ltd, Catercare Group, have mobilized to the Beatons Creek Project. Final West Australian regulatory

4 Royalties consist of (i) a 2.5% gross royalty payable to the state of Western Australia, and (ii) 4.75% aggregate gross royalties payable to private royalty holders. {01950094;1} 10

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

approvals required to commence operations were obtained in February 2021 and culminated in the Company’s inaugural commissioning gold pour on February 16, 2021 (see figure 3 below).

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( Figure 3 : Novo’s inaugural gold bar.)

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Exploration Highlights

While the Company focused on developing the Beatons Creek Project, the Company continued to evaluate and explore its 14,000km[2] Pilbara mineral tenure as outlined in figure 4 below.

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( Figure 4: Map of Novo’s current Pilbara tenure.)

The Pilbara’s wet season generally runs from December to March of each year. The first significant rainfall event of the 2020-2021 “wet season” occurred in early December 2020 and left many areas of the Pilbara flooded. In order to ensure the safety of its exploration teams, the Company implemented plans to decrease its presence at its Egina and Karratha projects until late Q1 2021 while maintaining appropriate caretaking and safety measures. During this time, exploration teams collated and analyzed data gathered during the 2020 field season and prepared exploration plans for the 2021 field season.

East Pilbara Highlights

The Company continued to consolidate its holdings in the East Pilbara region of Western Australia with the acquisition of 2,900km[2] of prospective tenure (the “ Creasy Tenure ”) from Mark Creasy and entities controlled by him (collectively, the “ Creasy Group ”) and the Mt. Elsie project (the “ Mt. Elsie Project ”) in June 2020. The Company issued 2,582,269 common shares to the Creasy Group and will issue an additional 8,431 common shares to the Creasy Group upon receipt of Australian Foreign Investment Review Board (“ FIRB ”) approval, expected in the first half of 2021 as consideration for a 100% interest and joint venture arrangements over certain tenements comprising the Creasy Tenure. The Company also issued 324,506 common shares and paid AUD $100,000 cash to acquire the Mt. Elsie {01950094;1} 12

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Project. The Company believes that both the Mt. Elsie Project and the Creasy Tenure are highly prospective and complement mineralization found at the Beatons Creek Project.

West Pilbara Highlights

The Company also consolidated its holdings in the Karratha region of Western Australia with the acquisition of the Purdy’s Reward and 47K prospects and dissolution of a 50-50 conglomerate gold rights joint venture with ASX-listed Artemis Resources Limited for aggregate consideration of 2,000,000 common shares of the Company, AUD $1,000,000 cash, and the granting of a 1% net smelter returns gold royalty over the 47K prospect.

The Company also entered into an option agreement with Bellary Dome Pty Ltd (the “ Bellary Option ”) to acquire the gold rights in exploration licence E47/3555. In exchange for AUD $25,000, the Company has a one year option to explore E47/3555 which can be extended by up to five years in total by paying an additional AUD $100,000. The Company can exercise the Bellary Option and earn a 100% gold rights interest in E47/3555 by paying AUD $1,000,000 and granting a 2% gross overriding royalty on all gold derived from future production by the Company from E47/3555.

The Company plans to deploy a Steinert KSS mechanical sorter to the Karratha region of Western Australia to conduct field-based mechanical sorting trials of up to 30,000 tonnes of material at the Comet Well and Purdy’s Reward projects (see figure 5 below). Commencement of the trial is subject to receipt of requisite approvals from the Department of Mines, Industry Regulation, and Safety and the Department of Water and Environmental Regulation. The Company has already received approval from the Ngarluma Aboriginal Corporation.

Field test work will be designed to better understand gold grades, the extent and location of mineralized conglomerate units, evaluate mechanical sorter gold recovery at production throughput rates and of various sorted size fractions, and provide critical input concerning operational costs. The Company intends to use this information to advance development plans for all of its Pilbara projects.

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( Figure 5: Placement location of mechanical sorter.)

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In an effort to expand the Company’s understanding of the mineralization on its vast holdings in the West Pilbara region of Western Australia, the Company’s exploration teams spent significant time mapping and surveying tenements in the region. Prospective regions were flagged for further analysis and will be reviewed in 2021 in the context of possibly complementing the Company’s Comet Well and Purdy’s Reward projects which will undergo mechanical sorter trials.

Egina Highlights

The Company’s Egina projects are subject to a joint venture arrangement with Sumitomo Corporation of Tokyo, Japan (“ Sumitomo ”), with whom the Company worked closely throughout 2020 to advance exploration efforts. The Company conducted extensive mobile alluvial Knudson (“ MAK ”) sampling, particularly across mining lease 47/560 which only represents 5km[2] of the approximately 2,500km[2] Egina tenure area. Results to date indicate widespread gold potential within terrace gravels, and the Company’s exploration teams have focused on areas such as Paradise and Clarke where gold grain counts exceed 50 particles, with one yielding approximately 600 particles. More systematic evaluation of these targets will be conducted in 2021.

MAK samples are collected from pits spaced at approximately 50 metres across target areas. Pits are dug by track hoe and range up to 3 metres depth. Targeted sample size is approximately one tonne. Samples are placed in wooden crates lined with bulka bags and transported to Novo’s Station Peak camp where they are processed through a MAK centrifugal concentrator. Concentrates are panned down to reveal gold for point counting and further study.

In addition, the Company processed several bulk samples from the Paradise prospect through its IGR3000 alluvial gold plant. Results further confirmed widespread gold potential within terrace gravels.

Large scale, 30-50 cubic m bulk samples are collected from pits approximately 6 m wide and 6 m long. Depth of pits varies from about 1-3 m. Sandy soil overburden is generally stripped prior to gravel extraction. Some underlying bedrock material is excavated along with gold-bearing gravels to ensure capture of gold on the bedrock interface. Bulk sample gravel is transported to Novo’s Station Peak camp where it will be processed through the Company’s IGR3000 alluvial gold plant.

Other Exploration Highlights

The Company remains focused on expanding its influence over high-quality gold deposits, particularly in Victoria, Australia. The Company exercised its option to earn an initial 50% interest (the “ Malmsbury Interest ”) in the Malmsbury Project from GBM Resources Limited (“ GBM ”) (ASX: GBZ) in September 2020. Transfer of the Malmsbury Interest to Novo is subject to approval from the Victorian Department of Jobs, Precincts and Regions and the Australian Foreign Investment Review Board (the “ Malmsbury Conditions ”).

The Company has also been granted an option to acquire an initial 50% interest (the “ Queens Options ”) in the Queens Project (the “ Queens Project ”) from Kalamazoo Resources Limited (“ Kalamazoo ”). Novo is currently conducting due diligence on the Queens Project and has until March 22, 2021 to exercise the Queens Option.

The Company also further revised a binding terms sheet with Calidus Resources Limited (“ Calidus ”) to sell a portion of the Company’s Blue Spec Property (the “ Subject Blue Spec Tenements ”), with Calidus having options to acquire up to 100% of the Subject Blue Spec Tenements (the “ Blue Spec Transaction ”). The terms sheet with Calidus was amended on November 25, 2020 and further amended on March 22, 2021. To date, Calidus has acquired a 25% interest in the Subject Blue Spec Tenements in consideration for the aggregate cash payment of AUD $7,700,000 to the Company.

In order to acquire the remaining interest in the Subject Blue Spec Tenements, Calidus is required to pay the Company additional aggregate consideration of AUD $11,800,000 (the “ Completion Payment ”), for a total purchase price of AUD $19,500,000. The Completion Payment consists of AUD $5,000,000 cash by March 31, 2021 (which has been paid) and the issuance by Calidus of 13,333,333 ordinary shares (having a total value of AUD $6,800,000) to the Company by April 16, 2021. In further consideration for the remaining interest in the Subject Blue Spec Tenements, Calidus must also transfer a 100% interest in prospecting license 45/3065, a tenement adjacent to the Company’s

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Talga Talga project in the East Pilbara region of Western Australia, to the Company’s wholly-owned subsidiary, Beatons Creek Gold.

The acquisition by Calidus of the remaining interest in the Blue Spec Tenements is subject to the satisfaction of certain conditions precedent including the execution of various deeds of assignment between the Company, Calidus, and relevant third parties, along with customary regulatory approvals for transactions of this nature.

If Calidus fails to complete the Blue Spec Transaction in full by April 16, 2021, Novo will have an 18-month option to repurchase any interest in the Subject Blue Spec Tenements held by Calidus for 50% of the aggregate consideration paid by Calidus for that interest.

Corporate Highlights

The Company holds a number of strategic investments which are outlined in note 5 of the Audited Financial Statements. The Company has long-term views of these investments and considers them to be strategic in nature.

In March 2020, the Company acquired 15,000,000 common shares of New Found (TSXV: NFG) in exchange for 6,944,444 common shares of the Company. The Company holds a 10.08% interest in New Found with a fair value of $63,300,000 as at March 30, 2021. The Company also acquired 9,090,909 units of GBM (each a “ GBM Unit ”) in April 2020 in exchange for 197,907 common shares of the Company, with each GBM Unit comprised of one ordinary share of GBM and one-half of one ordinary share purchase warrant (each a “ GBM Warrant ”). Each of the 4,545,454 GBM Warrants entitles Novo to purchase one ordinary share of GBM at AUD $0.11 until April 6, 2023. The Company acquired an additional 2,272,728 GBM Units in July 2020. The Company holds additional investments in Kalamazoo, Essential Metals Limited (ASX: ESS), Calidus, and American Pacific Mining Corp. (CSE: USGD), as well as unlisted Elementum 3D Inc., with a total investment portfolio fair value of $77,170,000 as at March 30, 2021, excluding the fair value of the GBM Warrants and warrants held in Kalamazoo Resources Limited (ASX: KZR). The Company considers these investments to be strategic in nature. The Company may, depending on market conditions, acquire or dispose of additional common shares or other securities of listed and unlisted entities in the future, whether in transactions over the open market or through privately negotiated arrangements or otherwise, subject to a number of factors including general market conditions, permitted disposal thresholds within the Credit Facility agreements, and other available investment and business opportunities.

On December 18, 2020, Mr. Ross Hamilton was elected to the Company’s board of directors (the “ Board ”) at the Company’s annual general meeting.

On December 30, 2020, the Company received final approval to graduate to the TSX. The Company’s common shares commenced trading on the TSX on January 4, 2021, under the ticker symbol “NVO”. As a result, the Company ceased to be a “venture issuer” within the meaning of National Instrument 51-102 Continuous Disclosure Obligations as of January 4, 2021. Certain share purchase warrants of the Company also commenced trading on the TSX under the ticker symbol “NVO.WT”.

On January 13, 2021, the Company announced the appointment of Michael Spreadborough to the Board.

RESULTS OF OPERATIONS

During Current Fiscal 2020, the Company incurred a net loss after tax of $17,424,000 compared to a net loss after tax of $11,962,000 for Prior Fiscal 2020. The net loss in Current Fiscal 2020 relates primarily to a loss before other items of $19,200,000 (January 31, 2020 - $13,480,000) and other items loss of $998,000 (January 31, 2020 – gain of $638,000). The operating loss before other items was mainly comprised of share-based payments of $7,062,000 (January 31, 2020 – $2,743,000); consulting fees of $845,000 (January 31, 2020 – $928,000) related to due diligence exercises, administration, corporate communications, investor relations, computer services and management services provided by officers and consultants of the Company; wages and salaries of $3,724,000 (January 31, 2020 – $3,013,000) related to employee payroll in Canada, the US, and Australia; general office and administrative expenses of $3,464,000 (January 31, 2020 – $1,620,000) mainly related to general and administrative expenses including {01950094;1} 15

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

advertising and promotion, computer & internet expenses, telephone expenses, depreciation, professional development, and rent expenses; accounting fees of $671,000 (January 31, 2020 – $441,000) related to due diligence exercises, quarterly review and annual audit fees, tax return services, and accounting services related to Australian research and development refunds from the Australian Department of Mines, Industry Regulation and Safety; legal fees of $317,000 (January 31, 2020 - $586,000) related to due diligence exercises and corporate matters; transfer agent and filing fees of $336,000 (January 31, 2020 - $228,000) related to transfer agent fees and fees associated with maintaining the Company’s listing on the TSX and OTCQX; meals and travel expenses of $381,000 (January 31, 2020 - $503,000) related to meals and entertainment and business-related travel expenses; insurance expenses of $260,000 (January 31, 2020 - $266,000); and an impairment expense of $1,884,000 (January 31 2020 - $2,585,000) related to the write-down of expired tenements in the Beatons Creek region of Western Australia (see nnoote 6 of the Audited Financial Statements).

During Current Fiscal 2020, other items include interest and other income of $3,033,000 (January 31, 2020 – $801,000) related to interest income and the partial disposition of the Company’s Blue Spec project in the Nullagine region of Western Australia; a foreign exchange gain of $315,000 (January 31, 2020 – $5,000) related to payments denominated in foreign currencies and the revaluation of the Company’s USD cash as at January 31, 2020; accretion expense on the cash component of deferred consideration for the Comet Well mineral property of $144,000 (January 31, 2020 - $168,000) and the rehabilitation provision and the Credit Facility of $127,000 (January 31, 2020 - $nil); an unrealized holding gain of $1,542,000 (January 31, 2020 - $nil) on marketable securities designated as fair value through profit or loss (“ FVTPL ”); interest accretion expense of $810,000 (January 31, 2020 - $nil) and finance expenses of $1,316,000 (January 31, 2020 - $nil) related to the Credit Facility (see note 14 of the Audited Financial Statements); and a share of losses in New Found, designated as an associate, of $1,837,000 (January 31, 2020 - $nil).

During Current Fiscal 2020, the Company recognized an unrealized holding gain of $4,079,000 (January 31, 2020 – $3,468,000) in other comprehensive income or loss on marketable securities designated as FVTOCI. The Company also recognized a foreign exchange gain on the translation of subsidiaries of $17,722,000 (January 31, 2020 – loss of $8,923,000) in other comprehensive income or loss.

During the period from incorporation on October 28, 2009 to December 31, 2020, the Company did not recognize any revenue as the Company was still in the acquisition, exploration, and development stage.

Since December 31, 2020, the Company has continued to develop its Beatons Creek Project. The directors have prepared a cash flow forecast which indicates that the Company will have sufficient cash flows to meet all commitments and working capital requirements for the 12-month period from the date of signing these financial statements.

Based on the cash flow forecast and revenue and operating cost assumptions therein, along with forecast commodity prices and foreign exchange rates, the directors are satisfied that the going concern basis of preparation is appropriate. A critical element to achieving the forecast cash flows, and forecast covenant compliance under the Credit Facility, is the Company’s ability to achieve forecast gold production in accordance with Board approved forecasts.

If the Company does not meet its cash flow forecast, it may need to rely on a number of options, including management of both operating cash flow and capital expenditure to align with available funds, obtaining waivers or rescheduling of repayments under the Credit Facility with Sprott, disposing of non-core assets to the extent permitted under the Credit Facility, securing additional funding which may include refinancing the Credit Facility with other parties, securing funds by raising capital from equity markets, or a combination of these options.

The directors are confident of the Company’s ability to manage its cash flow as required.

Notwithstanding the above, these conditions indicate a material uncertainty that may cast doubt about the Company’s ability to continue as a going concern and, therefore, whether it will be able to realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

to the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

The Company plans to continue exploring and developing its mineral properties and incurring the necessary expenditures to maintain its tenements in good standing.

SELECTED ANNUAL INFORMATION

For Current Fiscal 2020, Prior Fiscal 2020, and Fiscal 2019, the consolidated financial statements have been prepared in accordance with IFRS.

Statement of comprehensive loss data	11-month period ended December 31, 2020	Year ended January 31, 2020	Year ended January 31, 2019
Other income $’000	3,033	801	1,020
Net loss after tax $’000	(17,424)	(11,962)	(15,296)
Net loss per common share outstanding - basic and diluted	$(0.09)	$(0.07)	$(0.10)
Dividend	Nil	Nil	Nil

Statement of financial position data	11-month period ended December 31, 2020	Year ended January 31, 2020 $’000	Year ended January 31, 2019 $’000
Total assets	456,408	158,049	156,665
Non-current financial liabilities	94,064	Nil	2,825
Shareholders’ equity	329,429	148,402	149,247

Net Loss

The Company incurred a net loss after tax of $17,424,000 during Current Fiscal 2020, $11,962,000 during Prior Fiscal 2020 and $15,296,000 during Fiscal 2019. The variance was mainly attributable to share-based payments (December 31, 2020 - $7,062,000; January 31, 2020 - $2,743,000; January 31, 2019 - $8,944,000), wages and salaries (December 31, 2020: $3,724,000, January 31, 2020 - $3,013,000; January 31, 2019 - $4,168,000), office and general expenses (December 31, 2020 - $3,464,000; January 31, 2020 - $1,620,000; January 31, 2019 – $1,482,000), consulting services (December 31, 2020 - $845,000; January 31, 2020 - $928,000; January 31, 2019 - $425,000), and impairment expense (December 31, 2020 - $1,884,000; January 31, 2020 - $2,585,000; January 31, 2019 - $3,218,000). Explanations for the fluctuations in net losses are summarized below by separately identifying the aforementioned five major categories of expenses.

Share-based payments

During Current Fiscal 2020, the Company recognized $7,062,000 in share-based payments expense compared to $2,743,000 in Prior Fiscal 2020 and $8,944,000 in Fiscal 2019. Share-based payment expenses increased from Prior Fiscal 2020 to Current Fiscal 2020 because expenses are being amortized over the vesting period of the relevant options and Current Fiscal 2020 was the first year to capture a full year’s worth of share-based compensation expense

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

for stock options issued in January 2020. Costs associated with options issued with time-based vesting conditions are amortized over the vesting timeframe of the options. Costs associated with options issued with performance-based vesting conditions are amortized over the estimated timeframe required for the options to vest.

Wages and salaries

During Current Fiscal 2020, the Company recognized $3,724,000 in wages and salaries expense as compared to $3,013,000 in Prior Fiscal 2020 and $4,168,000 in Fiscal 2019. While the number of employees increased in Current Fiscal 2020, the Company allocates any wages and salaries which are attributable to the Company’s mineral properties to the Company’s mineral properties and allocates all remaining wage and salary amounts to wages and salaries expense, and most of the Company’s new hires worked on the Company’s mineral properties.

Office and general expenses

During Current Fiscal 2020, the Company recognized $3,464,000 in office and general expenses as compared to $1,620,000 during Prior Fiscal 2020 and $1,482,000 during Fiscal 2019. Office and general expenses include advertising and promotion expenses, depreciation, computer and internet expenses, and telephone expenses along with general office expenses. Such expenses continue to increase as the Company grows its Western Australian team and influence and, more particularly, subsequent to the acquisition of Millennium.

Consulting services

During Current Fiscal 2020, the Company recognized $845,000 in consulting expenses as compared to $928,000 in Prior Fiscal 2020 and $425,000 in Fiscal 2019. While growing its operations, the Company relies on external consultants to provide certain financial, marketing, and investor relations services. Any consulting services pertaining to the Company’s mineral properties are capitalized to the relevant mineral project.

Impairment expenses

During Current Fiscal 2020, the Company recognized $1,884,000 in impairment expenses as compared to $2,585,000 in Prior Fiscal 2020 and $3,218,000 in Fiscal 2019. The decrease from Fiscal 2019 to Current Fiscal 2020 is a function of the Company’s increasing ability to utilize personnel and allocate resources to actively explore and maintain its 14,000km[2] of tenure in Western Australia. All expenditure that was capitalised to these tenements was impaired.

Total Assets

Total assets increased from $156,665,000 as at January 31, 2019 to $158,049,000 as at January 31, 2020 and $456,408,000 as at December 31, 2020. Total assets consist mainly of cash and short-term investments, receivables, marketable securities, mine development assets and exploration and evaluation assets and increased from prior years mainly due to the Company’s acquisition of Millennium.

Shareholders’ Equity

Total shareholders’ equity increased from $149,247,000 as at January 31, 2019 to $148,402,000 as at January 31, 2020 to $329,439,000 as at December 31, 2020. Total shareholders’ equity consisted mainly of share capital and the increase was mainly due to the acquisition of Millennium (see notes 9 and 16 of the Audited Financial Statements) and

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

concurrent equity financings, and was offset by losses incurred and foreign exchange impacts carried through other comprehensive loss.

SUMMARY OF QUARTERLY RESULTS

4th Quarter 2020 December 31, 2020 3rd Quarter 2020 October 31, 2020	2nd Quarter 2020 July 31, 2020 1st Quarter 2020 April 30, 2020 4th Quarter 2020 January 31, 2020 3rd Quarter 2020 October 31, 2019	2nd Quarter 2020 July 31, 2019 1st Quarter 2020 April 30, 2019
Revenue - -	- - - -	- -
Net Loss $’000 (1,514) (8,159)	(3,826) (3,927) (5,952) (2,249)	(934) (2,827)
Basic and Diluted Loss Per Share ($0.09) ($0.04)	($0.02) ($0.02) ($0.03) ($0.01)	($0.01) ($0.02)

FOURTH QUARTER

During the two month period ended December 31, 2020, the major expenses of the Company were accounting and audit fees, consulting services, insurance expenses, legal fees, meal and travel expenses, office and general expenses, transfer agent and filing fees, wages and salaries and the lease interest expenses totaling $1,121,000 (January 31, 2020 - $2,633,000). In addition, non-cash share-based payment expenses of $1,217,000 (January 31, 2020 - $894,000) were incurred during the two month period ended December 31, 2020. Share-based payment expenses increased due to the quarterly revaluation based on external inputs including volatility, share price and bond rate. Impairment of mineral properties of $14,000 (January 31, 2020 - $2,585,000) was incurred due to the expiry of a small number of tenements.

During the two month period ended December 31, 2020 operating expenses were offset by non-operating items such as interest and other income and foreign exchange of $645,000 (January 31, 2020 – $184,000) and increased by a deferred consideration accretion expense of $13,000 (January 31, 2020 - $22,000), accretion expense relating to the rehabilitation provision and the Sprott Credit Facility of $168,000 (January 31, 2020 – $nil), finance expense of $689,000 (January 31, 2020 - $nil) relating to interest on the Credit Facility, and share of profit in an associate of $341,000 (January 31, 2020 - $nil).

EXPLORATION AND EVALUATION ASSETS

Beatons Creek Region

Beatons Creek Property

The Company signed agreements with aboriginal groups who have title to the ground comprising the Beatons Creek property during the year ended January 31, 2018. In aggregate, the Company has paid AUD $750,000 ($738,000) and a further AUD $600,000 is due once a decision has been made to develop the Beatons Creek property for mining. In addition, a production royalty totaling 2.75% is payable on any gold and silver produced from the Beatons Creek property.

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A 2.5% royalty is payable to the State of Western Australia on any gold produced by the Company on the Beatons Creek property.

On December 8, 2020, the Company received final mining approvals from the Western Australia Department of Mining, Industry Regulation and Safety (“DMIRS”). With this approval in place, certain tenements included in the Beatons Creek project have transitioned from exploration and evaluation assets under IFRS 6 to mine development assets pursuant to IAS 16.

Millennium Property

Pursuant to the acquisition of Millennium (see note 9 of the Audited Financial Statements), the Company acquired control over 106 granted tenements including one general purpose lease, 11 miscellaneous licences, 62 mining leases, and 32 prospecting licences (collectively, the “Millennium Tenements”). A 2.5% royalty is also payable to the State of Western Australia on any gold produced by the Company from the Millennium Tenements.

Talga Projects

A 1.5% net smelter returns royalty is payable on any minerals extracted from the Talga Talga, Warrawoona, and Mosquito Creek Projects (collectively, the “Talga Projects”) in a commercial mining operation. A 2.5% royalty is also payable to the State of Western Australia on any gold produced by the Company on the Talga Projects.

Blue Spec Project

On September 19, 2020, the Company signed a binding terms sheet with Calidus to sell tenements M46/115 and M46/244 (the “Calidus Blue Spec Tenements”), both of which are included in the Blue Spec project, for AUD $19,500,000 ($18,779,000). Calidus paid a non-refundable deposit of AUD $200,000 ($193,000) to the Company on September 22, 2020 (see note 23 of the Audited Financial Statements). On November 25, 2020, the Company signed an amended binding terms sheet (the “Calidus Amended Terms Sheet”) with Calidus regarding the sale of the Calidus Blue Spec Tenements revising payment terms as follows:

Calidus paid AUD $2,500,000 ($2,459,000) to the Company on November 27, 2020 in exchange for a 10% interest in the Calidus Blue Spec Tenements (paid November 27, 2020); Calidus has the right to acquire an additional 10% interest in the Calidus Blue Spec Tenements by paying the Company an additional AUD $2,500,000 (the “Second Payment”) by January 31, 2021;
At Calidus’ sole discretion, Calidus can increase the Second Payment to AUD $5,000,000 in exchange for an additional 15% interest in the Calidus Blue Spec Tenements (the “Second Bonus Payment”) (for an aggregate 25% interest);
In order to acquire the remaining interest in the Calidus Blue Spec Tenements, Calidus must pay the Company the remaining AUD $11,800,000 or A$14,300,000 (either being the “Remaining Payment”) of the total agreed purchase price of AUD $19,500,000 by March 31, 2021;
If Calidus exercises its right to make the Second Bonus Payment, AUD $1,500,000 of the Remaining Payment of AUD $11,800,000 can be satisfied by the issuance of ordinary shares of Calidus at a 15-day trailing volume weighted average price prior to the date of issuance, subject to Calidus shareholder approval;
If Calidus does not make the Second Bonus Payment, the Remaining Payment must be made in cash for the full AUD $14,300,000; and
If Calidus fails to complete the transaction in full by March 31, 2021, the Company will have an 18-month option to repurchase any residual interest in the Calidus Blue Spec Tenements held by Calidus for 50% of the aggregate consideration paid by Calidus for that interest.

During the year ended January 31, 2020, five prospecting tenements included in the Blue Spec project expired. The Company recorded an impairment expense of AUD $2,537,000 ($2,329,000).

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

A 2% net smelter returns royalty over all production from tenements comprising the Blue Spec Au-Sb Project (the “Blue Spec Project”) is payable to RSI (WA Gold) Pty Ltd. under a royalty agreement entered into by Northwest Resources Limited (“Northwest”), the prior owner of the Blue Spec project.

A net smelter returns royalty over all production from certain tenements comprising the Blue Spec Project is payable to St. Barbara Limited under a royalty agreement Northwest was bound by when it owned the Blue Spec Project. The Company assumed the obligations under the 2015 purchase agreement with Northwest. The royalty is equal to 3.75% of the gross proceeds of sale of 75% of all gold, silver and other minerals produced from the Blue Spec Project.

A 2.5% royalty is payable to the State of Western Australia on any gold produced by the Company on the Blue Spec Project.

Paleo-Placer Property

During the year ended January 31, 2020, one of the tenements comprising the Paleo-Placer property expired so the Company recorded an impairment expense of AUD $149,000 ($136,000).

On June 15, 2020 the Company entered into a binding term sheet with the Mark Gareth Creasy and entities controlled by him (collectively, the “Creasy Group”) pursuant to which Novo will consolidated sole ownership of 510km² of existing tenure and acquire ownership of an additional 2,390km² of highly prospective new tenure in the Pilbara region of Western Australia (the “Creasy Transaction”).

The Creasy Transaction is comprised of the following elements:

acquisition of Creasy Group’s residual interest in 20 tenements comprising 510km² currently subject to joint arrangements between the Company and the Creasy Group pursuant to which the Company currently holds a 70% of all mineral rights (the “Original JV Tenements”). Upon completion of the transaction, Novo will hold 100% ownership in these tenements;
acquisition of 100% ownership (including rights to all minerals) in 55 tenements comprising an additional 1,865km² of new tenure for Novo, subject to the Creasy Group retaining limited prospecting rights on one tenement comprising 25km²; and
acquisition of a 70% interest in 3 tenements comprising an additional 525km² of new tenure for the Company and entry into joint arrangements over these tenements, pursuant to which Novo will hold a 70% interest in rights to all minerals and Creasy Group will hold the other 30%.

Upon completion of the Creasy Transaction, the Company and the Creasy Group will terminate agreements which pertain to the Original JV Tenements and historical transactions between the Company and the Creasy Group.

As consideration for the Creasy Transaction, the Company issued to the Creasy Group 2,582,269 common shares (the “Consideration Shares”) at a fair value of $3.45 per Consideration Share for gross consideration of $8,909,000. An additional 8,431 common shares (the “Additional Consideration Shares”) will be issued to Creasy once Australian Foreign Investment Review Board (“FIRB”) approval has been obtained. The Additional Consideration Shares will be subject to a statutory hold period expiring four months from the date of issuance. If FIRB approval is not obtained by February 13, 2021, or such later date as agreed by the Company and the Creasy Group, either the Company or the Creasy Group may terminate this portion of the Creasy Transaction.

The Consideration Shares have been accounted for as an equity-settled share-based payment. As an equity-settled share-based payment, the consideration payable was recognised directly in equity without subsequent remeasurement. The transaction was recognised and measured with reference to the fair value of the equity instruments granted at the date control of the asset was obtained, estimated to be $8,909,000 as the Company determined that it could not reliably measure the fair value of the asset obtained.

A 2.5% royalty is payable to the State of Western Australia on any gold produced by the Company on the tenements subject to the Creasy Transaction.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Calidus Resources Limited

On September 19, 2017, the Company signed a binding term sheet with Calidus, granting Calidus the right to earn a 70% interest in and to certain Novo tenements surrounding Calidus’

Warrawoona project in Western Australia (the “Novo Warrawoona Tenements”). The Novo Warrawoona Tenements are comprised of four exploration licences and three prospecting licences.

Calidus completed its due diligence and satisfied or waived all conditions precedent. Calidus issued to Novo 20,000,000 fully paid ordinary shares at a fair value of AUD $820,000 ($814,000) or AUD $0.041 per share.

In order to earn a 70% interest in and to the Novo Warrawoona Tenements, Calidus must incur exploration expenditure of AUD $2,000,000 over three years. If Calidus earns its 70% interest, Novo and Calidus will then be subject to a fund or dilute obligation whereby any interest below 10% will automatically convert into a 1% net smelter returns royalty. On May 31, 2019, Calidus provided notice to the Company that it had earned its 70% interest in and to the Novo Warrawoona Tenements. The Company is currently discussing joint operation plans with Calidus.

During the year ended January 31, 2020, one of the Novo Warrawoona Tenements reached the end of its term and expired. The Company recorded an impairment expense of AUD $131,000 ($120,000).

Mt Elsie project

On June 11, 2020, the Company entered into a binding term sheet to acquire three exploration licences (the “Mt Elsie Project”) comprising an area of approximately 19km² located 75km north-east of the town of Nullagine, Western Australia and adjacent to numerous Novo wholly-owned tenements. The Company issued an aggregate 324,506 common shares (the “Elsie Consideration Shares”) at a fair value of $3.98 per Elsie Consideration Share for gross consideration of $1,292,000 and paid AUD $100,000 ($94,550) in cash to the vendors of the Mt. Elsie Project. As the Company determined that it could not reliably measure the fair value of the asset obtained, the shares issued were fair valued based on their trading price at the date of the transaction.

Karratha Region

Bellary Dome Pty Ltd (“Bellary Dome”)

On June 12, 2020 the Company entered into an option agreement (the “Option Agreement”) with Bellary Dome for the option to acquire the gold rights in exploration licence 47/3555 (the “Tenement”) located in the Southern Pilbara region of Western Australia. The Option was conditional upon the removal of a caveat currently registered against the Tenement by a non-arm’s length party to Bellary Dome and subsequent registration of the Tenement in Bellary Dome’s name, all of which were satisfied on July 31, 2020. The Company paid AUD $25,000 ($24,000) to Bellary Dome for an initial option period of 12 months. At any time during the Option Period, the Company may exercise its Option and earn a 100% gold rights interest in the Tenement by paying Bellary Dome AUD $1,000,000 and granting Bellary Dome a 2% gross overriding royalty on all gold derived from future production by the Company from the Tenement.

Before the expiry of the Option Period, the Company may extend the Option Period to 24 months from the date of satisfaction of the Conditions by paying Bellary Dome AUD $25,000, 36 months from the date of satisfaction of the Conditions by paying Bellary Dome AUD $50,000, or 48 months from the date of satisfaction of the Conditions by paying Bellary Dome AUD $100,000.

Comet Well Property

On April 11, 2017, the Company entered into a binding terms sheet (the “Terms Sheet”) with Jonathan and Zoe Campbell (“Campbell”) to acquire the Campbells’ interest in tenements 47/3597, 47/1845, 47/1846, 47/1847, and 47/3601 (collectively, the “Tenements”) which comprise the Comet Well project in the Karratha region of Western Australia (the “Comet Well Project”). On August 3, 2017, the Company signed a sale and purchase agreement and a

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

royalty agreement with Campbell, two farm-in and joint operation agreements with Gardner Mining Pty Ltd (“Gardner”) and Bradley Adam Smith (“Smith”), and a settlement deed with Campbell, Gardner, and Smith (collectively, the “Definitive Agreements”). Upon execution of the Definitive Agreements, the Company had the right to earn an 80% interest, in aggregate, to the Tenements.

On January 25, 2021, AUD $3,000,000 in aggregate was required to be paid to Gardner Mining Pty Ltd (“Gardner”) and Bradley Adam Smith (“Smith”), the Company’s Comet Well project (the “Comet Well Project”) joint operation partners, and AUD $3,000,000-worth of Novo’s common shares (the “Subsequent Consideration Shares”) was required to be issued to Gardner and Smith, with the number of Subsequent Consideration Shares to be calculated based on Novo’s then prevailing 5-day trailing volume-weighted average price (“VWAP”).

The Subsequent Consideration Shares will be subject to a statutory hold period expiring four months from the date of issuance.

The AUD $3,000,000 cash consideration was recognized as a current liability in the Company’s consolidated statement of financial position considering it is due within 12 months. On initial recognition, the cash consideration payable was discounted to reflect its present value. The liability is carried at amortised cost and is being accreted to its face value over the period to maturity. The carrying value of the cash consideration payable recognised as a current liability at December 31, 2020 was $2,949,000 (AUD $2,988,000) (January 31, 2020 - $2,518,000 (AUD $2,842,000)). See note 22 of the Audited Financial Statements.

The Subsequent Consideration Shares have been accounted for as an equity-settled share-based payment. As an equity-settled share-based payment, the consideration payable was recognised directly in equity without subsequent remeasurement. The transaction was recognised and measured with reference to the fair value of the equity instruments granted at the date control of the asset was obtained, estimated to be $3,354,000 as the Company determined that it could not reliably measure the fair value of the asset obtained.

A bonus (the “Discovery Bonus”) of AUD $1,000,000 payable in cash and/or Novo common shares (at Campbell’s option) is required to be paid to Campbell if Novo publishes measured, indicated, or inferred gold resources of at least 250,000 ounces on the Comet Well Project (the “Comet Well Technical Report”). As at the date of these consolidated financial statements resources have not been defined on the Comet Well Project.

If the Discovery Bonus is to be paid in the Company’s common shares, the shares will be priced at the Company’s then 5-day trailing VWAP and will be subject to a statutory hold period expiring four months from the date of issuance. The Company has not published a Comet Well Technical Report so no amount has been accrued for the Discovery Bonus.

The royalty agreement between the Company and Jonathon and Zoe Campbell (“Campbell”) entitles Campbell to a 0.5% net smelter returns royalty on gold (the “Campbell Royalty”) extracted by the Company on the Tenements. The Company also agreed to pay Campbell a sub-royalty, in cash or satisfied by the issuance of 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

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

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 VWAP of the Company’s shares for the last 20 trading days of the relevant quarter.

Pursuant to the first farm in and joint operation agreement (the “Novo Farm-in Agreement”), the Company will free carry Gardner and Smith with respect to joint operation expenditures until a decision to mine is made, at which point any non-contributing entity’s interest in the joint operation will dilute at a pre-determined ratio. If Gardner’s and Smith’s interests in the joint operation are reduced to below 5%, Gardner and Smith will be deemed to have withdrawn from the joint operation and their interest will convert to an aggregate 1.0% net smelter returns royalty payable on any gold which is capable of being sold or otherwise disposed of. If the Company’s interest in the joint operation is reduced to below 5%, the Company will be deemed to have withdrawn from the joint operation and its interest will convert to an aggregate 4% net smelter returns royalty payable on any gold which is capable of being sold or otherwise disposed of.

Pursuant to the concurrent farm in and joint operation agreement with Gardner and Smith (the “Gardner and Smith Farm-in Agreement”), the Company will free carry Gardner and Smith with respect to joint operation expenditures until a decision to mine is made, at which point any non-contributing entity’s interest in the joint operation will dilute at a predetermined ratio. If Gardner’s and Smith’s interests in the joint operation are reduced to below 5%, Gardner and Smith will be deemed to have withdrawn from the joint operation and their interests will convert to a 0.5% net smelter returns royalty payable on any gold which is capable of being sold or otherwise disposed of. If the Company’s interest in the joint operation is reduced to below 5%, the Company will be deemed to have withdrawn from the joint operation and its interest will convert to a 4% net smelter returns royalty payable on any gold which is capable of being sold or otherwise disposed of.

Artemis Resources Limited Joint Operation

Effective November 27, 2017, a 50:50 unincorporated joint operation was deemed to be formed between the Company and Artemis Resources Ltd.’s (“Artemis”) subsidiaries over gold (and other minerals necessarily mined with gold) in conglomerate and/or paleo placer style mineralization in Artemis’ tenements within 100km of the City of Karratha, including at Purdy’s Reward (the “Gold Rights”). The Company managed the joint operations and Artemis and the Company contributed to further exploration and mining of the Gold Rights on a 50:50 basis. If the Company or Artemis elected not to contribute to the joint operation pursuant to a budget approved by the joint operation management committee, the non-contributing entity’s interest in the joint operation would dilute at a ratio of 0.1% for every AUD $50,000 overspent by the contributing entity. If a non-contributing entity’s interest in the joint operation was reduced to below 5%, the non-contributing entity would be deemed to have withdrawn from the joint operation and its interest will convert to a 0.5% net smelter returns royalty payable on any gold subject to the Gold Rights which is capable of being sold or otherwise disposed of.

During the year ended December 31, 2020, Artemis contributed AUD $83,000 ($81,630) to the joint operation.

On March 23, 2020, the Company dissolved the 50:50 joint operation with Artemis and acquired a 100% interest in exploration licenses E47/1745 (“Purdy’s Reward”) and E47/3443 (“47K”). As consideration for the transaction, the Company issued 1,640,000 common shares at a fair value of $1.61 per share based on the Company’s closing price on the TSX-V on March 23, 2020 for total consideration of $2,640,000, and paid AUD $820,000 ($680,000) to Artemis. The Company also issued 360,000 common shares at a fair value of $1.61 per share for total consideration of $580,000, paid AUD $180,000 ($151,000), and granted a 1% net smelter returns royalty to Sorrento Resources Pty Ltd, one of Artemis’ joint venture partners on the 47K project. For both transactions, as the Company determined that it could not reliably measure the fair value of the asset obtained, the shares issued were fair valued based on their trading price at the date of the respective transactions.

A finder’s fee comprised of 100,000 common shares of the Company, issued at a fair value of $1.61 per share for total consideration of $161,000, and a cash payment of AUD $50,000 ($42,000) was paid to Battle Mountain Pty Ltd in respect of the transaction.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

As part of the transaction Novo returned 26 tenements to Artemis and recognised an impairment of AUD $1,776,000 ($1,508,000) relating to expenditure incurred on these tenements.

Memorandum of Agreement with Essential Metals

On December 7, 2020, the Company completed its farm in obligations pursuant to a Memorandum of Agreement pertaining to certain tenements in the Egina region, executed with Essential Metals in September 2017 and earned a 70% interest in precious metals rights on the relevant tenements.

Sumitomo Farm-In and Joint Operation

Egina Farmin Arrangement (“EFA”)

On June 7, 2019, the Company entered into the Egina Farmin Agreement (“EFA”) to advance its Egina project (the “Project”) located near Port Hedland in WA.

Under the EFA, Sumitomo Corporation and its wholly owned Australian subsidiary (together, “Sumitomo”) will contribute up to USD $29.66 million funding to the Project over a 3-year earning period, subject to specific milestones and activity taking place. As at December 31, 2020, Sumitomo has funded AUD $7,256,000 ($6,800,000) to advance the Project.

At any time during the 3-year earning period and upon termination of the funding period, Sumitomo may elect to either:

acquire up to 40% participating interest in the Farmin Assets if Sumitomo makes an election to establish a joint arrangement with the Company (the “Farmin Option”); or
exercise their Reimbursement Option, resulting in Novo reimbursing Sumitomo’s funding contribution in either cash (“Cash Payment Option”) or a variable number of shares (“Share Payment Option”) subject to Sumitomo having funded US$5 million in respect for the exploration phase of the project.

Exercising the Farmin Option extinguishes the obligation of the Company to repay Sumitomo any funding contributions previously provided.

The Reimbursement Option is calculated with reference to the Reimbursement Payment Amount, which includes adjustments for any notional share of Product that Sumitomo has earned over the earning period and, in the case of the Cash Payment Option, accrued interest on the principal outstanding calculated with reference to the London Interbank Offered Rate (“LIBOR”) from the date the funding was obtained.

Payment by Novo common shares under the Share Payment Option are subject to specific requirements outlined in the EFA and below. The number of shares to be issued is determined by dividing the Reimbursement Payment Amount by a prescribed issue price.

The prescribed issue price is the higher of:

The Company’s closing share price of $2 as at June 7, 2019 (the date of the EFA); or
The 15% discounted VWAP of the Company at the time of conversion (determined with reference to the EFA requirements and TSX-V listing policies).

The Company has a financial liability with respect to the Reimbursement Option as it has an unavoidable contractual obligation to reimburse Sumitomo the full Reimbursement Payment Amount in either cash or a variable number of shares and the Reimbursement Option is at Sumitomo’s discretion at all times.

As a result of the unique features and characteristics of the EFA, the Company has elected to designate the financial liability and related embedded derivatives in their entirety at FVTPL. In these circumstances, changes in the fair value of the entire hybrid financial instrument are recognised through profit or loss, except to the extent that the change in

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

fair value is attributable to changes in credit risk of that liability (in which case it is presented in other comprehensive income).

In addition to the financial liability, the EFA has also resulted in a written call Option, under which the Company has an obligation to sell a portion of its interest in the Farmin Assets if the counterparty exercises the option. The written call option is a contract to sell a non-financial item, being the physical delivery of a participating interest in the Farmin Assets.

The written call option was initially measured at cost, determined as the residual amount of the consideration received after deducting the fair value of the financial liability (including embedded derivatives).

Sumitomo funding liability Opening balance Draw downs Sumitomo liability change in fair value through profit and loss Sumitomo liability change in fair value through OCI Foreign exchange Closing balance Sumitomo written call option Opening balance Draw downs Foreign exchange Closing balance	December 31, 2020 $'000 January 31, 2020 $'000 (4,519) - (783) (4,369) 211 (314) (442) - (538) 164 (6,071) (4,519) December 31, 2020 $'000 January 31, 2020 $'000
	(1,341) (1,389) (131) - 315 48
	(1,157) (1,341)

De Grey Mining Ltd. Letter of Intent

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 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”) (as at December 31, 2020, the Company has paid AUD $1,000,000 ($907,000) to De Grey under the LOI).

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.

De Grey acquired Indee Gold on August 23, 2019.

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 Arrangement”) by giving notice to De Grey and making a one-time payment of AUD $2 million. If the Joint Arrangement 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.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

New Frontier Resources Pty Ltd Purchase

On May 25, 2019, the Company purchased a 60% interest in tenement E47/3812 from New Frontier Resources Pty Ltd (“New Frontier”) for AUD $2,000,000 ($1,809,000). A joint operation was formed whereby New Frontier will be freecarried to a decision to mine.

De Grey and Farno McMahon Heads of Agreement

Pursuant to the terms of the heads of agreement (“HoA”) executed by De Grey and Farno (prior to the Company’s acquisition of Farno), De Grey can earn a 30% interest in E47/2502 by incurring AUD $1,000,000 in valid exploration expenditure by December 13, 2019, and an additional 45% (for an aggregate 75% interest) by incurring an additional AUD $1,000,000 in valid exploration expenditure by December 13, 2020.

On January 28, 2020, De Grey provided the Company with a notice that it had earned a 30% interest in E47/2502 by incurring at least AUD $1,000,000 in valid exploration expenditure.

Victoria, Australia

Malmsbury Project

On March 30, 2020, the Company was granted an option (the “Malmsbury Option”) and an additional earn-in right to acquire up to an aggregate 60% interest in GBM’s Malmsbury gold project (the “Malmsbury Project”) located in the Bendigo zone of Australia’s Victorian goldfields, with the possibility of the interest being increased to 75% interest, as described below. The Malmsbury Option was subject to approval of the TSX-V and other customary regulatory approvals for transactions of this nature, all of which were received by April 6, 2020.

Novo had a six-month period (the “Malmsbury Initial Period”) to confirm social license to explore the Malmsbury Project and conduct other due diligence while awaiting the grant of the Malmsbury Project Retention Licence RL6587 to GBM. At any time during the Malmsbury Initial Period, Novo had the right to exercise the Malmsbury Option to earn a 50% interest in the Malmsbury Project by issuing 1,575,387 common shares to GBM (the “GBM Option Shares”), which will be subject to a statutory hold period of four months from the date of issuance, and reimbursing GBM for validly incurred and documented exploration expenditures on the Malmsbury Project during the Malmsbury Initial Period of up to AUD $250,000 (the “GBM Reimbursable Amount”), with such reimbursed amount being credited against the Malmsbury Earn-In Amount (defined below). On September 24, 2020, the Company exercised the Malmsbury Option. The Company will issue the GBM Option Shares to GBM, pay the GBM Reimbursable Amount, and commence the Malmsbury Earn-In Period upon receipt of approval from FIRB and the Victorian Department of Jobs, Precincts, and Regions.

Assuming satisfaction of the aforementioned conditions, the Company will have the right to earn an additional 10% interest in the Malmsbury Project and form a joint venture with GBM by incurring AUD $5,000,000 in exploration expenditure (the “Malmsbury Earn-In Amount”) over a four-year period (the “Malmsbury Earn-In Period”), as to a minimum of AUD $1,000,000 during the first year, and AUD $1,250,000 in each subsequent year, of the Malmsbury Earn-In Period. Any expenditure incurred during any year of the Malmsbury Earn-In Period which surpasses the minimum required amount will be credited against the subsequent year’s commitment. If Novo does not satisfy the Malmsbury Earn-In Amount during the Malmsbury Earn-In Period, Novo’s interest in the Malmsbury Project will decrease to 49%.

However, following satisfaction by Novo of the Malmsbury Earn-In Amount during the Malmsbury Earn-In Period, and delivery to GBM of written notice of its election to increase its interest in the Malmsbury Project to an aggregate 60% interest and initiate a joint venture with GBM (the “Malmsbury Joint Venture Date”), GBM will be required to elect to (i) retain its 40% interest in the Malmsbury Project by contributing to 40% of exploration and development expenditure incurred subsequent to the Malmsbury Joint Venture Date, or (ii) dilute its interest in the Malmsbury Project to 25% upon delivery by Novo of a preliminary economic assessment (the “Malmsbury PEA”) disclosing at least a 1 million ounce gold resource, of which at least 60% must be in the Indicated classification, within 3 years from the Malmsbury Joint Venture Date. In such case, Novo will pay all development expenditure incurred commencing from the Malmsbury

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Joint Venture Date, but if a decision to mine is made, GBM will reimburse Novo as to 25% of any such development expenditure from a maximum of 80% of Malmsbury Project cash flows.

Novo and GBM will negotiate a royalty arrangement whereby, subsequent to a decision to mine, GBM will be entitled to receive a maximum 2.5% net smelter returns royalty (the “Maximum Royalty”). The Malmsbury Project is encumbered by certain pre-existing royalties; where such an encumbrance is present, GBM will only be entitled to an adjusted royalty, being the Maximum Royalty less any pre-existing royalty amount.

Queens Project

On September 22, 2020, the Company was granted an option (the “Queens Option”) and an additional earn-in right to acquire up to an aggregate 50% interest in Kalamazoo’s Queens gold project (the “Queens Project”) located in the Bendigo zone of Australia’s Victorian goldfields, with the possibility of the interest being increased to 80% interest, as described below. The Queens Option was subject to approval of the TSX-V and other customary regulatory approvals for transactions of this nature, all of which were received by September 28, 2020.

Novo was granted a six-month period (the “Queens Initial Period”) to conduct due diligence on the Queens Project by issuing 24,883 common shares of the Company (the “Queens Due Diligence Shares”) to Kalamazoo on September 28, 2020 at a fair value of $3.87 per share for gross consideration of $85,000. The Queens Due Diligence Shares are subject to a statutory hold period expiring on January 29, 2021. At any time during the Queens Initial Period, Novo will have the right to exercise the Queens Option to earn a 50% interest in the Queens Project by issuing AUD $2,000,000worth of the Company’s common shares to Kalamazoo (the “Kalamazoo Option Shares”), which will be subject to a statutory hold period of four months from the date of issuance, at a deemed price per Kalamazoo Option Share equal to the volume-weighted average closing price of the Company’s common shares for the five trading days immediately prior to the Company’s exercise of the Queens Option.

If Novo exercises the Queens Option, it will have the right to earn an additional 20% interest in the Queens Project and form a joint arrangement with Kalamazoo by incurring AUD $5,000,000 in exploration expenditure (the “Queens EarnIn Amount”) over a five-year period (the “Queens Earn-In Period”), with a minimum expenditure of AUD $250,000 during the first year, AUD $1,000,000 in each of the second, third, and fourth years, and AUD $1,750,000 during the fifth and final year of the Queens Earn-In Period. Any expenditure incurred during any year of the Queens Earn-In Period which surpasses the minimum required amount will be credited against the subsequent year’s commitment.

If Novo satisfies the Queens Earn-In Amount by the expiry of the Queens Earn-In Period, it will have 30 days to elect to either (i) earn an additional 10% in the Queens Project by delivering a preliminary economic assessment (the “Queens PEA”) which must include a minimum 1 million ounces of gold of which at least 60% must be comprised of indicated mineral resources within three years of the Company’s election (the “Queens PEA Conditions”), or (ii) maintain its 70% interest in the Queens Project. If the Company elects to maintain its 70% interest in the Queens Project, Kalamazoo must elect to either (i) contribute to 30% of exploration expenditure, or (ii) automatically convert to a 2% net smelter returns gold royalty.

If the Company elects to complete the Queens PEA but fails to satisfy the Queens PEA Conditions, Novo will retain a 70% interest in the Queens Project and Kalamazoo can elect to contribute to 30% of exploration expenditure or dilute at a rate of 1% for every AUD$100,000 not contributed. If Kalamazoo’s interest dilutes below 10%, Kalamazoo’s interest will automatically convert to a 2% net smelter returns gold royalty.

If Novo does not satisfy the Queens Earn-In Amount during the Queens Earn-In Period, Novo’s interest in the Queens Project will decrease to 49%. Refer to note 23 of the Audited Financial Statements.

Nevada, USA Region

Tuscarora Property

On November 6, 2017, the Company signed an option agreement with APM whereby APM has the option to acquire the Company’s interest in the Tuscarora property in Nevada, USA.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

APM listed on the Canadian Securities Exchange on March 8, 2018 (the “Listing Date”). Pursuant to the option agreement, APM will pay to Novo $375,000 in three equal annual instalments by January 31 of each year. APM will also issue $200,000 worth of APM common shares in three equal annual instalments on the anniversary of the Listing Date. Beginning on the first anniversary of the Listing Date, APM will also be required to incur annual expenditures of USD $100,000 on the Tuscarora Project. APM will grant to Novo a 0.5% net smelter returns royalty (the “Tuscarora NSR”) which APM can repurchase for USD $500,000 at any time. APM will also assume all of Novo’s royalty obligations under its original option agreement underlying the Tuscarora Project between Novo and Nevada Select Royalty, Inc. On January 24, 2018, APM paid $125,000 to Novo. On March 8, 2018, APM issued 266,666 common shares to Novo at a fair value of $0.38 per share for total consideration of $102,000. On January 29, 2019, APM paid $125,000 to Novo. On March 8, 2019, APM issued 266,666 common shares to Novo at a fair value of $0.22 per share for total consideration of $59,000. On March 4, 2020, APM issued the final tranche of 266,667 common shares to Novo at a fair value of $0.045 per share for total consideration of $12,000 which have been accounted for at FVTOCI.

On December 18, 2019, the Company signed an amending and acknowledgement agreement with APM (the “Amending APM Agreement”) whereby the third and final cash payment of $125,000 was increased to $150,000 and delayed until January 31, 2021. The Amending APM Agreement also ratified an expanded area over which the Tuscarora NSR applies and confirmed APM’s obligation to cover annual Tuscarora claim maintenance fees.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

OPERATIONS

Exploration and Evaluation Assets

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

==> picture [634 x 241] intentionally omitted <==

----- Start of picture text -----

US Region Karratha & Egina Region
Granted
Beatons Creek Tuscarora Comet Well Artemis Pioneer Farno McMahon tenements Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance, January 31, 2020 46,452 27 21,463 17,531 629 14,430 5,702 106,234
Acquisition Costs 99,350 - 414 5,273 - 158 2,175 107,370
Exploration Expenditures:
Drilling 410 - - - - - - 410
Field Work 3,839 - 257 139 328 3,415 1,128 9,106
Fuel 12 - - - 5 180 16 213
Geology 988 - 11 7 36 145 148 1,335
Legal 37 - 22 35 - 56 97 247
Meals & Travel 174 - 12 6 35 395 123 745
Office and General 221 - 4 - (7) (105) (117) (4)
Reports, Data and Analysis 61 - - 10 - - - 71
Rock Samples 994 - 67 17 28 548 199 1,853
Earthworks 6 - - - 110 536 42 694
Native Title 424 - 3 5 58 162 18 670
Tenement Administration 308 - 10 88 48 288 1,030 1,772
Foreign Exchange Difference 10,861 (12) 216 168 12 196 99 11,540
Fuel Tax rebate (151) - - - - - - (151)
Artemis contribution - - - (83) - - - (83)
Transfer to Mining development asset (36,871) - - - - - - (36,871)
Impairment - - - (1,676) - - (335) (2,011)
(18,687) (12) 602 (1,284) 653 5,816 2,448 (10,464)
Balance, December 31, 2020 127,115 15 22,479 21,520 1,282 20,404 10,325 203,140
----- End of picture text -----

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Balance, January 31, 2019 Acquisition Costs Exploration Expenditure: Drilling Field Work Fuel Geology Legal Meals & Travel Office and General Reports, Data and Analysis Rock Samples Native Title Tenement Administration Foreign Exchange Difference Option Payments Received Artemis contribution Research and Development Refund Impairment Balance, January 31, 2020	47,063 - 130 176 26 3,287 146 387 174 391 1,036 206 467 (4,487) - - - (2,550) Beatons Creek Region $'000	US Region Tuscarora $'000 84 - - - - - - - - - - - - 1 (58) - - -	Comet Well Artemis Pioneer Farno-McMahon (Egina) Granted Tenements Total $'000 $'000 $'000 $'000 $'000 $'000 25,939 19,321 641 7,365 3,695 104,108 (248) - - 3,134 - 2,886 13 - - 345 - 488 79 38 5 1,859 1,223 3,380 17 - - 286 1 330 30 38 - 905 98 4,358 31 10 15 51 12 265 54 (16) - 919 411 1,755 15 1 - 305 62 557 95 - 12 68 (54) 512 451 28 - 393 244 2,152 - - 10 69 14 299 - 37 4 88 523 1,119 (2,239) (1,414) (58) (1,357) (527) (10,081) - - - - (58) - (512) - - - (512) (2,774) - - - - (2,774) - - - - - (2,550) Karratha and Egina Region	Comet Well Artemis Pioneer Farno-McMahon (Egina) Granted Tenements Total $'000 $'000 $'000 $'000 $'000 $'000 25,939 19,321 641 7,365 3,695 104,108 (248) - - 3,134 - 2,886 13 - - 345 - 488 79 38 5 1,859 1,223 3,380 17 - - 286 1 330 30 38 - 905 98 4,358 31 10 15 51 12 265 54 (16) - 919 411 1,755 15 1 - 305 62 557 95 - 12 68 (54) 512 451 28 - 393 244 2,152 - - 10 69 14 299 - 37 4 88 523 1,119 (2,239) (1,414) (58) (1,357) (527) (10,081) - - - - (58) - (512) - - - (512) (2,774) - - - - (2,774) - - - - - (2,550) Karratha and Egina Region
	(611)	(57)	(4,228) (1,790) (12) 3,931 2,007	(760)
	46,452	27	21,463 17,531 629 14,430 5,702	106,234

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

CAPITAL AND RESERVES

Authorized

Unlimited number of common voting shares without nominal or par value. All issued common shares are fully paid.

Shares issued

During the period ended December 31, 2020, and the year ended January 31, 2020, shares were issued pursuant to brokered and non-brokered private placements as follows:

a) On August 27, 2020, the Company closed a private placement of subscription receipts (the “Subscription Receipts”). Gross proceeds of approximately $50,975,000 were raised from a brokered component (the “Brokered Offering”) and gross proceeds of approximately $4,900,000 were raised from a non-brokered component (the “Non-Brokered Offering”). In aggregate, the Company issued 17,192,379 Subscription Receipts at a price of $3.25 per Subscription Receipt, raising gross proceeds of $55,875,000 (collectively, the "Offering").

The Subscription Receipts were issued pursuant to a subscription receipt agreement (the “Subscription Receipt Agreement”) entered into by the Company, Clarus Securities Inc. and Stifel GMP as lead agents of the Brokered Offering (the “Agents”), and Olympia Trust Company as subscription receipt agent. Pursuant to the Subscription Receipt Agreement, the proceeds from the Offering except for 50% of the Agents’ cash commission and all of the Agents’ expenses (the “Escrowed Funds”) were held in escrow pending satisfaction of certain conditions including, amongst others, (a) the satisfaction or waiver of each of the conditions precedent to the Millennium Acquisition other than the completion of financings to raise the funds required to pay the IMC Cash Debt Repayment which was completed concurrently with the release of the Escrowed Funds; and (b) the receipt of all required regulatory (including TSX-V) approvals in connection with the Millennium Acquisition and the Offering (“Escrow Release Conditions”). The Escrow Release Conditions were satisfied on September 7, 2020.

As a result of the Escrow Release Conditions being satisfied and the Company obtaining a receipt from the British Columbia Securities Commission, as principal regulator, for final short form prospectuses qualifying the Units (as defined below) underlying the Subscription Receipts on October 27, 2020, each Subscription Receipt was automatically exchanged for one unit of Novo (a “Unit”). Each Unit was comprised of one common share of Novo (a “Share”) and one-half of one Share purchase warrant (a “Warrant”), with each whole Warrant entitling the holder thereof to acquire one Share at a price of $4.40 until August 27, 2023. The Company incurred share issuance costs of $3,652,000 in conjunction with the Offering.

b) On September 9, 2020, in conjunction with the Credit Facility, Sprott subscribed for 1,453,624 units (the “Sprott Units”) at a price of $3.25 per Sprott Unit for gross proceeds of $4,997,000 (approximately USD $3,600,000) (the “Sprott Private Placement”). Each Sprott Unit is comprised of one Share and one-half of one transferable Share purchase warrant (each a “Sprott Warrant”), with each whole Sprott Warrant entitling Sprott to acquire one Share at a price of $4.40 until September 9, 2023. The Sprott Units and their underlying securities are subject to a statutory four-month hold period expiring on January 10, 2021.
c) Refer to notes 5 and 6 of the Audited Financial Statements for shares issued in acquiring marketable securities and exploration and evaluation assets.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Warrants

The continuity of warrants is as follows:

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Full share equivalent warrants outstanding and exercisable as of December 31, 2020:

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Warrants
Price Per Share
Expiry Date Outstanding
August 27, 2023 4.40 8,596,184
September 7, 2023 4.40 8,853,427
September 9, 2023 4.40 726,812
September 14, 2023 4.40 1,328,295
19,504,718
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Full share equivalent warrants outstanding and exercisable as of January 31, 2020:

	Price Per Share	Warrants Outstanding
Expiry Date
September 6, 2020	$6.00	14,000,000
		14,000,000

Share option plan

Pursuant to the Plan, the maximum number of common shares which can be reserved for issuance under the Plan is 10% of the issued and outstanding shares of the Company. The exercise price of each option (“Option”) shall not be less than the closing price of the common shares on the trading day immediately preceding the day on which the Option is granted, less any discount permitted by the TSX.

4,300,000 stock options have fully vested as at December 31, 2020. 4,660,000 stock options vest on the date on which any of the Company’s projects in aggregate produce their 10,000th ounce of gold. 6,125,000 stock options vest on the date on which any of the Company’s projects in aggregate produce their 60,000th ounce of gold.

The continuity of stock options is as follows:

	December 31, 2020	December 31, 2020	December 31, 2020	January	January	31, 2020
	Number		Weighted Average	Number		Weighted Average
			Exercise Price			Exercise Price
Options outstanding, beginning of period	15,825,000	$	3.37	12,415,000	$	3.21
Granted	-	$	-	6,165,000	$	3.57
Exercised	(300,000)	$	(0.57)	(510,000)	$	(1.57)
Expired/cancelled	(440,000)	$	(7.54)	(2,245,000)	$	(3.40)
Options outstanding,end ofperiod	15,085,000	$	3.31	15,825,000	$	3.37

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

The options outstanding and exercisable at December 31, 2020 are as follows:

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Outstanding Options Exercisable Options
Number Outstanding Weighted Average Weighted Average Remaining Number Weighted Average
Exercise Price Contractual Life Exercisable Exercise Price
1,600,000 0.94 0.62 900,000 0.94
1,750,000 0.95 0.43 250,000 0.95
2,125,000 1.57 0.55 1,450,000 1.57
2,125,000 7.70 1.80 1,700,000 7.70
950,000 3.47 2.08 - 3.47
410,000 4.60 2.43 - 4.60
6,125,000 3.57 4.07 - 3.57
15,085,000 $ 3.31 2.30 4,300,000 $ 3.83
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The options outstanding and exercisable at January 31, 2020 were as follows:

	Outstanding Options	Outstanding Options		Exercisable Options
		Weighted Average
	Weighted Average	Remaining Contractual	Number	Weighted Average
Number Outstanding	Exercise Price	Life	Exercisable	Exercise Price
150,000	$0.20	0.36	150,000	$0.20
1,750,000	$0.94	1.54	1,050,000	$0.94
1,750,000	$0.95	1.35	250,000	$0.95
2,125,000	$1.57	1.46	1,450,000	$1.57
2,125,000	$7.70	2.72	1,700,000	$7.70
400,000	$7.94	2.77	400,000	$7.94
950,000	$3.47	3.00	-	$3.47
410,000	$4.60	3.35	-	$4.60
6,165,000	$3.57	4.99	-	$3.57
15,825,000	$3.37	3.17	5,000,000	$3.96

For the period ended December 31, 2020, the total share-based payment expense was $7,062,000 (January 31, 2020 - $2,743,000).

The Company used the Black-Scholes option pricing model to estimate the fair value of the options at the grant date using the following assumptions:

tions:
	For the period ended December 31, 2020	For the year ended January 31, 2020
Average Share price	$3.03	$2.74
Risk-free interest rate	0.39%-2.11%	1.29%-2.11%
Dividend yield	0.00%	0.00%
Expected volatility	57.05%-96.34%	74.43%-101.65%
Expected option life	0.62–4.75 years	3.57–5 years

Share-based payment transactions with performance-based vesting conditions are measured at the fair value of the options granted at the date of issuance. Management adjusts the cumulative share-based payment expense periodically, based on the number of options expected to vest under the vesting conditions.

The option reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

The warrant reserve is used to recognize the value of equity-settled call options provided as compensation to financing underwriters.

The Comet Well Deferred Consideration reserve was used to recognize the value of the Subsequent Consideration Shares. See note 21 of the Audited Financial Statements for further details.

The foreign currency translation reserve is used to recognize exchange differences arising from the translation of the financial statements of foreign subsidiaries.

The reserve of financial assets at FVTOCI is used to recognize movements in fair value of investments where an irrevocable election has been made at initial acquisition to present fair value movements in other comprehensive income.

A reconciliation of the Company’s annual movement in accumulated other comprehensive loss is as follows:

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

LIQUIDITY AND CAPITAL RESOURCES

	December 31,	January 31,	January 31,
	2020	2020	2019
	$'000	$'000	$'000
Cash	40,494	28,703	42,832
Short-term investments	195	88	93
Working capital1	14,072	26,051	39,789
Credit Facility adjusted working capital (USD)2	25,090	-	-
Total assets	456,408	158,049	156,665
Current liabilities excluding current portion of financial liabilities 3	12,082	1,082	4,593
Non-current liabilities excluding non-current portion of financial liabilities 3	28,615	-	-
Financial liabilities (current and non-current)3	86,271	8,565	2,825
Total liabilities	126,968	9,647	7,418
Shareholders' equity	329,440	148,402	149,247

1. Working capital is calculated as current assets (including cash and short-term investments) less current liabilities.

2. Credit Facility adjusted working capital allows for the exclusion of lease liabilities and Sumitomo liabilities from the working capital calculation. The amount is converted into USD using the Bank of Canada's December 31, 2020 closing rate of 0.7854:1. The Credit Facility working capital covenant floor is USD $5 million.

3. Financial liabilities include Sumitomo liabilities, deferred consideration on mineral properties, long-term debt, and lease obligations.

Operating Activities

Cash used by operating activities during Current Fiscal 2020 totalled $3,937,000 (January 31, 2020 – $7,745,000). Adjustments for non-cash items included impairment of mineral property, change in fair value of marketable securities, share-based payments, depreciation, foreign exchange, and share of losses in New Found, an associate.

Investing Activities

Cash used by investing activities during Current Fiscal 2020 was $84,582,000 (January 31, 2020 – $21,944,000). The Company’s principal investing activity is the acquisition, exploration, and development of its resource properties. During Current Fiscal 2020, the Company used $60,651,000 (January 31, 2020 - $nil) as the cash component of the Millennium acquisition consideration and incurred $12,840,000 (January 31, 2020 - $19,289,000) on its mineral resource properties. Please see note 6 of the Audited Financial Statements for more details.

Financing Activities

Cash provided by financing activities during Current Fiscal 2020 was $100,365,000 (January 31, 2020 - $15,977,000), which relates to cash received from equity and debt financings which accompanied the acquisition of Millennium as well as the funding received from Sumitomo. Please see note 9 of the Audited Financial Statements for more details.

Cash Resources and Going Concern

At December 31, 2020, the Company had cash of $40,494,000 and an additional $195,000 in short-term investments. Working capital as at December 31, 2020 was $14,071,000. The Company holds 14,000 km[2] of tenure in the Pilbara region of Western Australia which currently carries annual expenditure commitments of AUD $8,830,000. To fully

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

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.

OFF BALANCE SHEET TRANSACTIONS

There are currently no off balance sheet arrangements which could have a material effect on current or future results of operations, or the financial condition of the Company.

ADDITIONAL DISCLOSURE

Related Party Transactions

Key Management Personnel Disclosures

During the periods ended December 30, 2020 and January 31, 2020, the following amounts were incurred in the normal course of operations and were measured at the exchange value which represented the amount of consideration established and agreed to by the related parties:

Fees for consulting services paid to the Company's VP, Corporate Communications Wages and Salaries paid to the Company's Chairman Wages and Salaries paid to the Company's Chief Executive Officer Wages and Salaries paid to the Company's Chief Financial Officer Directors' fees paid to the Company's independent directors Share-based payments relating to incentive stock options issued to the Company's Chief Executive Officer, Chief Financial Officer, VP, Corporate Communications and directors	11 Months ended December 31, 2020 $'000 12 Months ended January 31, 2020 $'000 2 Months ended December 31, 2020 3 Months ended January 31, 2020
	165 180 30 45 395 364 67 91 264 298 70 75 256 291 56 73 121 167 19 37 2,786 873 508 289
	3,987 2,173 750 610

Fees for consulting services paid to the Company's VP, Corporate Communications
Wages and Salaries paid to the Company's Chairman
Wages and Salaries paid to the Company's Chief Executive Officer
Wages and Salaries paid to the Company's Chief Financial Officer
Directors' fees paid to the Company's independent directors
Share-based payments relating to incentive stock options issued to the Company's
Chief Executive Officer, Chief Financial Officer, VP, Corporate Communications and
directors

11 Months ended
December 31, 2020
$'000
12 Months ended
January 31, 2020
$'000
2 Months ended
December 31,
2020
3 Months ended
January 31, 2020

165
180
30
45
395
364

67
91
264
298
70
75
256
291
56
73
121
167
19
37
2,786
873
508
289

3,987
2,173
750
610

The Company pays its VP, Corporate Communications a cash consulting fee of $15,000 per month. Consulting services totaled $165,000 during Current Fiscal 2020 (January 31, 2020 - $180,000) and $30,000 for the two-month period ended December 31, 2020 (quarter ended January, 2020 - $45,000).

The Company pays annual cash salaries to its Chairman/President/Director, Chief Executive Officer/Director, and Chief Financial Officer/Corporate Secretary, and directors’ fees to two independent directors. Details of these salary arrangements are outlined in the Company’s Form 51-102F6V Statement of Executive Compensation (most recently filed on SEDAR on July 30, 2020). Wages and salaries for the aforementioned key management personnel and directors totaled $1,036,000 during Current Fiscal 2020 (January 31, 2020 – $1,120,000) and $212,000 for the twomonth period ended December 31, 2020 (quarter ended January 31, 2020 - $276,000).

From time to time, the Company’s board of directors incentivizes the Company’s management, employees, and consultants by issuing incentive stock options. Amounts outlined in the table above represent such portion of the Company’s share-based payment expenses which relate to incentive stock options granted to the Company’s management and board of directors, namely the Chairman/President/Director, two independent directors, the Chief Executive Officer/Director, the Chief Financial Officer/Corporate Secretary, and the VP, Corporate Communications. The Company’s methodology for calculating the fair value of share-based payments is outlined in note 2 of the Audited Financial Statements and the “share-based payments” section of this Annual MD&A. Share-based payments relating to these key management personnel and directors totaled $2,786,000 during Current Fiscal 2020 (January 31, 2020 - $873,000) and $508,000 for the two-month period ended December 31, 2020 (quarter ended January 31, 2020 - $289,000).

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Basis of presentation

These consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments that have been measured at fair value.

These consolidated financial statements are presented in Canadian dollars and all values are rounded to the nearest thousand dollars ($’000) unless otherwise stated. Share amounts are not rounded.

The preparation of consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. The areas involving a higher degree of judgement or complexity or where assumptions and estimates are significant to the financial statements are disclosed below within this note.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized during the period in which the estimate is revised if the revision affects only that period or during the period of the revision and further periods if the review affects both current and future periods. The accounting policies adopted are consistent with prior years, except for those adopted during the period resulting from new transactions and events, these include financial instruments – derivatives, inventory, mine development assets and investment in associates.

Australian dollars will be referred to as “AUD”, and United States dollars will be referred to as “USD” in these consolidated financial statements.

Basis of consolidation

These consolidated financial statements include the accounts of the Company and its subsidiaries listed below. Control is established by having power over the acquiree, exposure or rights to variable returns from its involvement with the acquiree, and the ability to use its power over the acquiree to affect the amount of the acquiror’s returns. Subsidiaries are fully consolidated from the date on which control is acquired by the Company. Inter-company transactions and balances are eliminated upon consolidation. They are de-consolidated from the date that control by the Company ceases.

As at December 31, 2020, the subsidiaries of the Company were as follows:

Company Name	Area of Incorporation	% of Interest
Novo Resources (USA) Corp.	Nevada, USA	100%
Conglomerate Gold Exploration (B.V.I.) Ltd.	Tortola, British Virgin Islands	100%
Karratha Gold Exploration (B.V.I.) Ltd.	Tortola, British Virgin Islands	100%
Conglomerate Gold Exploration Pty Ltd (“CGE”)	Western Australia, Australia	100%
Nullagine Gold Pty Ltd (“Nullagine Gold”)	Western Australia, Australia	100%
Beatons Creek Gold Pty Ltd	Western Australia, Australia	100%
Grant’s Hill Gold Pty Ltd	Western Australia, Australia	100%
Karratha Gold Pty Ltd (“Karratha Gold”)	Western Australia, Australia	100%
Rocklea Gold Pty Ltd	Western Australia, Australia	100%
Meentheena Gold Pty Ltd (“Meentheena”)	Western Australia, Australia	100%
Farno-McMahon Pty Ltd (“Farno”)	South Australia, Australia	100%
Millennium Minerals Pty Ltd (“Millennium”)	New South Wales, Australia	100%

New and amended Accounting Standards and Interpretations adopted by the Company

The Company has applied, for the first time, the amendment to IFRS 3 Definition of a Business from February 1, 2020. In accordance with the transitional provisions, the amendment was applied prospectively, and comparatives were not restated. The new definition of a business was applied to the Millennium acquisition during the period

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

which resulted in that transaction being classified as an asset acquisition in the absence of outputs and a skill workforce at the date of acquisition. Other than the adoption of the amendment to IFRS 3, the adoption of the new and amended accounting standards and interpretations had no impact on the Company. The Company has not early adopted any other accounting standard, interpretation or amendment that has been issued but is not yet effective.

Going concern

These financial statements have been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business.

In September 2020, the Company completed the acquisition of Millennium, which was financed through private placements raising gross proceeds of $56,000,000 as well as senior secured debt of USD $60,000,000, of which USD $35,000,000 has been drawn to date. See notes 9, 14, and 19 of the Audited Financial Statements.

The Company has incurred a net loss after tax for the eleven month period ended December 31, 2020 of $17,424,000 (January 31, 2020: $11,962,000). For the eleven month period ended December 31, 2020, the Company reported operating cash outflows of $3,937,000 (January 31, 2020: $7,745,000). As at December 31, 2020, the Company reported a net working capital of $14,071,000 (January 31, 2020: $26,051,000). The Company had cash on hand of $21,081,000 at March 30, 2021 and $40,494,000 at December 31, 2020 (January 31, 2020 - $28,703,000).

The directors are confident of the Company’s ability to manage its cash flow as required.

FINANCIAL INSTRUMENTS

a) Fair value

The Company’s financial instruments include cash, short-term investments, marketable securities, accounts payable and accrued liabilities, the Sumitomo funding liability, the Credit Facility, the derivative liability, and the cash component of the deferred consideration for mineral property. The fair value hierarchy reflects the significance of inputs in making fair value measurements as follows:

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Level 1 − applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 − applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly such as quoted prices for similar assets or liabilities in active markets or indirectly such as quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions.
Level 3 − applies to assets or liabilities for which there is unobservable market data.

The recorded amounts of cash, short-term investments and accounts payable and accrued liabilities approximate their respective fair values due to their short-term nature. The cash component of the deferred consideration was initially recognized at fair value and is subsequently measured at amortized cost with the carrying value approximating fair value at reporting date. The Sumitomo funding liability and its related embedded derivatives are measured in their entirety as at FVTPL, except to the extent that the change in fair value is attributable to changes in credit risk of the Sumitomo funding liability in which case it is presented in other comprehensive income. The Credit facility was initially recognized at fair value and is subsequently measured at amortized cost using the effective interest method. The derivative liability is initially recognized at fair value and is measured in its entirety at FVTPL

Financial Instruments carried at fair value:

The marketable securities balance for listed shares is measured using Level 1 inputs. The fair value of marketable securities is measured at the closing market price obtained from the Canadian Securities Exchange and the Australian Securities Exchange.
The marketable securities balance for the Kalamazoo Warrants and the GBM Warrants is measured using Level 2 inputs. The fair value of the Kalamazoo Warrants and the GBM Warrants has been determined using Black-Sholes.
The marketable securities balances held in E3D are measured using Level 3 inputs. The value of the shares held in E3D was determined using the last financing price of USD $2.50 used by E3D to raise funds for its operations. Changes to E3D’s fair value per share can significantly affect the fair value estimates.
The Sumitomo funding liability balance is measured using Level 3 inputs. The fair value of the liability was determined using a Binomial Option Pricing Model and a Monte Carlo simulation including the Company’s share price of $2.38 and accompanying volatility of 83.26%, various interest rates (including AUD risk-free rates of 0.075% and US 3MLIBOR of 0.1965%), and the Company’s estimated credit rating. Changes to the aforementioned inputs can significantly affect the fair value estimate of the Sumitomo funding liability.
The embedded derivative associated with the Credit Facility was measured using Level 3 inputs. The fair value of the derivative was determined by using a Black 76 model including accretion due to the passage of time, agreed repayment schedules, required interest payments, changes in the applicable interest rate (US three-month LIBOR or 1%), and changes in the Company’s credit spread.

Financial instruments carried at amortized cost:

The Credit Facility is measured using Level 3 inputs. The carrying value of the Credit Facility was recognized using the effective interest rate method and was adjusted by the value of the derivative liability.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

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Fair Value Hierarchy
Level 1 Level 2 Level 3 Total
$'000 $'000 $'000 $'000
As at December 31, 2020
Financial assets at Fair Value
Marketable Securities 10,374 1,786 6,611 18,770
Financial Liabilities at Fair Value
Sumitomo funding liability - - 6,071 6,071
Derivative liability - - 984 984
Total December 31, 2020 10,374 1,786 13,666 25,825
As at January 31, 2020
Financial assets at fair value
Marketable securities 7,587 - 6,870 14,457
Financial liabilities at fair value
Sumitomo funding liability - - 4,519 4,519
Total January 31, 2020 7,587 - 11,389 18,976
December 31, 2020 January 31, 2020
$'000 $'000
Reconciliation of the fair value measurement of Level 3 unlisted investments
Opening balance 6,870 4,585
Remeasurement recognised through other comprehensive income (260) 1,404
Foreign currency translation - 881
Closing balance 6,610 6,870
Reconciliation of the fair value measurement of Level 3 financial liabilities
Opening balance 4,519 -
Purchases 2,074 4,683
Remeasurement recognised through profit and loss 124 314
Foreign currency translation adjustment 338 (478)
Closing balance 7,055 4,519
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There were no transfers between levels or changes in the valuation techniques and processes or inputs for determining fair value for financial instruments during the year.

b) Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and short-term investments. The Company limits its exposure to credit loss by placing its cash and short-term investments with high credit quality financial institutions, however these amounts are subject to credit risk. The Company does not invest in asset-backed deposits or investments and does not expect any credit losses.

The Company’s maximum exposure to credit risk for cash and short-term investments is the carrying amounts as per the statement of financial position.

c) Foreign exchange rate risk

The Company operates internationally and is exposed to foreign exchange risk, primarily the United States and Australian dollars. Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities denominated in a currency that is not the functional currency of the relevant company. The following table represents the impact of a +/- 5% change in the USD/CAD exchange rate on financial assets and liabilities denominated in US dollars for the period ended December 31, 2020:

The Company has not entered into any derivative instruments to manage foreign exchange fluctuations.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

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d) Liquidity Risk

Liquidity risk is the risk that the Company cannot meet its obligations as they fall due. Liquidity risk is managed by ensuring sufficient financial resources are available to meet obligations associated with financial liabilities. The Company’s cash and cash equivalents are invested in business accounts and term deposits which are available on demand. The Company manages liquidity risk by preparing and maintaining cash forecasts, which illustrate cash spent to date and its cash needs over the short term and over repayment dates into the future as it pertains to the Credit Facility. At December 31, 2020, the Company had cash of $40,494,000 (January 31, 2020 - $28,703,000) and short-term investments of $195,000, (January 31, 2020 - $88,000) to settle current liabilities of $32,884,000 (January 31, 2020 - $9,647,000). The Company has a practice of paying its outstanding payables within 30 days. The deferred consideration for mineral property is due on January 25, 2021. The Sumitomo funding liability represents the approximate value that the Company would repay if Sumitomo were to exercise their Reimbursement Option (see note 6 of the Audited Financial Statements).

The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments

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e) Price Risk

The Company is exposed to price risk with respect to commodity prices and its marketable securities. The Company’s ability to raise capital is subject to risks associated with fluctuations in the market, including commodity prices. The Company’s ability to recognize gains on liquidation of its marketable securities is subject to risks associated with fluctuations in the market prices of its marketable securities. At December 31,2020 a 5% movement in the market value of marketable securities would have resulted in a movement of $849,000 (January 31, 2020 $723,000)

f) Interest Rate Risk

Interest rate risk is the risk that the fair value or cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company has interest-bearing assets in relation to cash at bank and term deposits carried at floating interest rates with reference to the market. The Company also has some exposure to interest rate risk with respect to the fair value of the Sumitomo funding liability and the Credit Facility and associated derivative liability. The Company’s operating cash flows are generally unaffected by changes in market interest rates unless the US 3-month LIBOR increases above 1%. The Company has not used any financial instrument to hedge potential fluctuations in interest rates.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

The Company is exposed to cash flow interest rate risk due to the floating rate interest on the Credit Facility. For the period ended December 31, 2020, US 3-month LIBOR rate would need to increase by approximately 80 basis points before any additional interest would become payable on the Credit Facility.

Internal Controls over Financial Reporting

Management is responsible for the design of the Company’s internal controls over financial reporting (" ICFR ") as required by National Instrument 52-109–Certification of Disclosure in Issuers’ Annual and Interim Filings (" NI 52-109 "). ICFR is intended to provide reasonable assurance regarding the preparation and presentation of material financial information for external purposes in accordance with applicable generally accepted accounting principles. Internal control systems, no matter how well designed, have inherent limitations. The Company’s officers certify the design of Novo’s ICFR using the Internal Control – Integrated Framework (2013) issued by The Committee for Sponsoring Organizations of the Treadway Commission. Based on a review of its internal control procedures at the end of the period covered by this Annual MD&A, management has determined that the Company’s internal controls over financial reporting have been effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. There were no changes to the internal controls over financial reporting that occurred during Current Fiscal 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting other than in conjunction with the acquisition of Millennium. However, even systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness in future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Disclosure Controls and Procedures

Disclosure controls and processes have been designed to ensure that information required to be disclosed by Novo is compiled and reported to management as appropriate to allow timely decisions regarding required disclosure. The Company’s Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of December 31, 2020, that the disclosure controls and procedures are effective in providing reasonable assurance that material information related to Novo is made known to them by employees and third-party consultants working for Novo and its subsidiaries. There have been no significant changes in the Company’s disclosure controls and procedures during the year ended December 31, 2020 other than in conjunction with the acquisition of Millennium. While Novo’s Chief Executive Officer and Chief Financial Officer believe that the Company’s disclosure controls and processes will provide a reasonable level of assurance and that they are effective, they do not expect that the disclosure controls and processes will prevent all errors and frauds. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Outstanding Share Data

The Company is authorized to issue an unlimited number of common shares without par value (the “ Common Shares ”). All issued Common Shares are fully paid and non-assessable. As of March 31, 2021 the following Common Shares, Common Share purchase warrants (the “ Warrants ”), and stock options were issued and outstanding:

Number of Shares	Exercise Price ($) Expiry Date
Common Shares 231,551,902 Stock Options 1,600,000 Stock Options 1,750,000 Stock Options 2,125,000 Stock Options 2,125,000 Stock Options 950,000 Stock Options 410,000 Stock Options 6,125,000 Warrants 8,596,184 Warrants 8,853,427 Warrants 726,812 Warrants 1,328,295	- - 0.94 August 15, 2021 0.95 June 5, 2022 1.57 July 18, 2022 7.70 October 20, 2022 3.47 January 30, 2023 4.60 June 5, 2023 3.57 January 6, 2025 4.40 August 27, 2023 4.40 September 7, 2023 4.40 September 9, 2023 4.40 September 14, 2023
Fully Diluted 266,141,620

Additional Disclosure for Venture Issuers without Significant Revenue

Additional disclosure concerning the Company’s general and administrative expenses and mineral property costs is provided in the Audited Financial Statements and related notes that are available under the Company’s profile on the SEDAR website www.sedar.com.

Risk Factors

The operations of the Company are subject to significant uncertainty due to the high-risk nature of its business, which is the exploration, development and operation of mining properties. The following risk factors could materially affect the Company’s financial condition and/or future operating results and could cause actual events to differ materially from those described in forward-looking statements relating to the Company.

Dependence on Future Financing

Although the Company believes that it currently has sufficient funding to restart the production infrastructure of Millennium and its planned operations at its Beatons Creek Project and other properties, there can be no assurance that the Company will have the funds required to carry out all of its business plans or that those expenditures will

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

prove profitable. Obtaining additional financing would be subject to a number of factors, including market prices for minerals and commodities, investor acceptance of the Company’s properties and investor sentiment. These factors may make the timing, amount, terms or conditions of additional financing unavailable to the Company. The most likely source of future funds presently available to the Company is through equity or debt financings. Any sale of share capital will result in dilution to existing shareholders.

Dependence on Key Management Personnel

The Company is dependent upon a number of key management personnel. The Company’s ability to manage its operating, development, exploration and financing activities will depend in large part on the efforts of these individuals. As the Company’s business grows, it will require additional key financial, administrative, mining, marketing and public relations personnel as well as additional staff for operations. The Company faces intense competition for qualified personnel, and there can be no assurance that the Company will be able to attract and retain such personnel. The loss of the services of one or more key employees or consultants or the failure to attract and retain new personnel could have a material adverse effect on the Company’s ability to manage and expand the Company’s business.

COVID-19

The COVID-19 outbreak was declared a pandemic by the World Health Organization on March 11, 2020.

Other than an approximate six-week suspension of exploration activities, the Company has not experienced a significant impact on its business to date; however, there is no assurance that this will continue given the ongoing global situation The outbreak and the response of various governments in dealing with the pandemic is interfering with general activity levels within the community, the economy and financial markets worldwide, including Novo’s operations and the operations of the companies in which Novo has invested. Restrictions on travel and the limited ability to have meetings with personnel, vendors and service providers may have an adverse effect on the Company’s operations. The scale and duration of these developments remain uncertain as at the date of this Annual MD&A, but they may have an impact on the Company’s future cash flows. The Company notes that the value of certain assets, in particular the fair value of marketable securities recorded in the statement of financial position in the Audited Financial Statements, determined by reference to fair or market values at December 31 and January 31, 2020, may have materially changed by the date of this Annual MD&A.

The COVID-19 pandemic has also caused, and is likely to continue to cause, severe economic, market and other disruptions worldwide. It is not possible to estimate the impact of the outbreak’s near-term and longer-term effects or governments’ varying efforts to combat the outbreak and support businesses. There can be no assurance that conditions in the global financial markets will not continue to deteriorate as a result of the pandemic, or that the Company’s access to capital and other sources of funding will not become constrained, all of which could adversely affect the availability and terms of any future financings the Company undertakes.

Risks Related to the Credit Facility and Indebtedness

The Credit Facility has usual and customary covenants to keep the facility in good standing, including, but not limited to, repayment of the principal advanced thereunder and accrued interest, maintenance and provision of regular and up-to-date financial reports, compliance with all applicable laws and applicable securities legislation, obligation to provide notice of material events, and obligation to maintain secured assets and insurance thereon. The Credit Facility also contains restrictive covenants that will limit the Company’s ability to engage in activities that may be in the Company’s long-term best interest. If the Company defaults in respect of its obligations under the Credit Facility, it may lose the shares of certain of its international subsidiaries (which are pledged as collateral under the Credit Facility) and other property securing its obligations under the Credit Facility, which would have a material effect on the Company’s operations. The Company has currently drawn down on the first tranche under the Credit Facility. To the extent the Company draws down the additional amounts under the second tranche or incurs other additional debt, the risks related to the Company’s indebtedness could increase.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

The Company's level of indebtedness and the terms thereof will have several important effects on its future operations, including, without limitation, that it:

will require the Company to dedicate a portion of its cash flow from operations, if any, and under the terms of the Credit Facility other proceeds from divestitures, financings and insurance claims, to the payment of principal and interest on the Company's outstanding indebtedness, thereby reducing the funds available to it for operations and any future business opportunities;
could increase the Company's vulnerability to adverse changes in general economic and industry conditions, as well as to competitive pressure;
could decrease the Company’s flexibility in planning for and reacting to changes in the industry in which it competes and place the Company at a disadvantage compared to other, less leveraged competitors; and
depending on the levels of its outstanding debt, could increase the Company’s cost of borrowing and/or limit the Company's ability to obtain additional financing for working capital, capital expenditures, general corporate and other purposes or require the Company to make other divestitures.

The Company's ability to make payments of principal and interest on its indebtedness depends upon the Company's financial condition, operating performance and expected future revenues, will be subject to prevailing economic conditions, competitive conditions, changes in the applicable interest rate, industry cycles and financial, business, legislative, regulatory and other factors affecting its operations, many of which are beyond the Company's control. If the Company's revenues are insufficient to, or the Company cannot raise sufficient funds to, meet its debt service and other obligations in the future, the Company could face substantial liquidity problems and may be required, among other things, to:

reduce or delay investments and other capital expenditures;
obtain additional financing in the debt or equity markets;
refinance or restructure all or a portion of its indebtedness; and/or
sell selected assets.

The Company cannot provide assurance that such measures will be sufficient to enable the Company to service its debt. In addition, any such financing, refinancing or sale of assets might not be available on economically favourable terms or at all. Any of the foregoing may have a material and adverse effect on the Company’s financial condition and results of operations.

Obligations as a Public Company

The Company’s business is subject to evolving corporate governance and public disclosure regulations that may from time to time increase both the Company’s compliance costs and the risk of non-compliance, which could adversely impact the price of the Common Shares.

The Company is subject to changing securities laws and to rules and regulations promulgated by a number of governmental and self-regulated organizations having jurisdiction over the Company, including, but not limited to, the Toronto Stock Exchange and the International Accounting Standards Board. These laws, rules and regulations continue to evolve in scope and complexity creating many new requirements. The Company’s efforts to comply with the same could result in increased general and administration expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

Acquisitions and Integration

From time to time, the Company examines opportunities to acquire additional assets and businesses. Any acquisition that the Company may choose to complete may be of a significant size, may change the scale of the Company’s

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

business and operations, and may expose the Company to new geographic, political, operating, financial and geological risks. The Company’s success in its acquisition activities depends on its ability to identify suitable acquisition candidates, negotiate acceptable terms for any such acquisition, and integrate the acquired operations successfully with those of the Company. Any acquisitions would be accompanied by risks. For example, there may be a significant change in commodity prices after the Company has committed to complete the transaction and established the purchase price or exchange ratio; a material ore body may prove to be below expectations; the Company may have difficulty integrating and assimilating the operations and personnel of any acquired companies, realizing anticipated synergies and maximizing the financial and strategic position of the combined enterprise, and maintaining uniform standards, policies and controls across the organization; the integration of the acquired business or assets may disrupt the Company’s ongoing business and its relationships with employees, customers, suppliers and contractors; and the acquired business or assets may have unknown liabilities which may be significant. In the event that the Company chooses to raise debt capital to finance any such acquisition, the Company’s leverage will be increased. If the Company chooses to use equity as consideration for such acquisition, existing shareholders may experience dilution. Alternatively, the Company may choose to finance any such acquisition with its existing resources. There can be no assurance that the Company would be successful in overcoming these risks or any other problems encountered in connection with such acquisitions.

On September 7, 2020, the Company completed the acquisition of Millennium (the “ Acquisition ”) which involves the integration of a corporation that previously operated independently, and such integration is still in the early stages. An important factor in the success of the Acquisition will be the ability of the new management team to integrate all or part of any operations, systems, technologies and continuing personnel of Millennium and to realize the anticipated opportunities and synergies. There can be no assurance that the business integration will be successful initially or on the timeline anticipated by the Company. While the Company conducted due diligence on Millennium and its operations, there are risks inherent in any acquisition. Specifically, there could be unknown or undisclosed risks or liabilities of Millennium which could materially and adversely affect the Company’s financial performance and results of operations. The success of the Acquisition will depend, in part, on the ability of the Company to realize the anticipated benefits, including cost savings and operational efficiencies, specifically in successfully achieving restart of infrastructure held by Millennium and acquired via the Acquisition (the “ Millennium Assets ”) and utilizing such project infrastructure in connection with the Beatons Creek Project, which cannot be assured. There can be no assurance that the Company and Millennium will not incur additional material costs in subsequent quarters to reflect additional costs associated with the Acquisition or that that the benefits expected from the Acquisition will be realized.

Market Price of Securities

Over the last several years, junior securities markets have experienced a high level of price and volume volatility, and the market price of securities of many resource companies have experienced wide fluctuations in price that have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. Factors unrelated to the financial performance or prospects of the Company include macroeconomic developments locally and globally and market perceptions of the attractiveness of particular industries. There can be no assurance that continued fluctuations in mineral prices will not occur.

As a result of any of these factors, the market price of the securities of the Company at any given point in time may not accurately reflect the Company’s long-term value. In the past, following periods of volatility in the market price of a company’s securities, shareholders have instituted class action securities litigation against those companies. Such litigation, if instituted, could result in substantial cost and diversion of management attention and resources, which could significantly harm profitability and the reputation of the Company.

The Speculative Nature of the Exploration of Natural Resource Properties

While the discovery of a commercially viable ore body may result in substantial rewards, few mineral properties that are explored are ultimately developed into producing mines. There is no assurance that any of the claims the Company will explore or acquire will contain commercially exploitable reserves of minerals. Exploration for natural resources is a speculative venture involving substantial risk. Even a combination of careful evaluation, experience and knowledge may not eliminate such risk. Hazards such as unusual or unexpected geological formations, formation pressures, fires, power outages, labour disruptions, flooding, cave-ins, landslides and the inability of the Company to obtain suitable

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

machinery, equipment or labour are all risks involved with the conduct of exploration programs and the operation of mines. While appropriate precautions to mitigate these risks have been taken or are planned to be taken, operations are subject to hazards such as equipment failure or failure of structures which may result in environmental pollution and consequent liability. Even though the Company intends to maintain liability insurance in an amount which it considers adequate, the nature of these risks is such that liabilities might exceed policy limits, the liabilities and hazards might not be insurable or the Company might not elect to insure itself against such liabilities due to high premium costs or other reasons, in which event the Company could incur significant costs that could have a material adverse effect upon its financial condition.

Reclamation Costs

In the context of environmental permits, including the approval of reclamation plans, the Company must comply with standards, laws and regulations that may entail costs and delays depending on the nature of the activity to be permitted and how stringently the regulations are implemented by the regulatory authority. The reclamation liability on any of the Company’s properties will be calculated based on current laws and regulations and the expected future costs to be incurred in reclaiming, restoring and closing its exploration or operating mine sites. The Company may incur costs associated with reclamation activities, which may materially exceed the provisions established by the Company for the activities. In addition, possible additional future regulatory requirements may require additional reclamation requirements creating uncertainties related to future reclamation costs. Should the Company be unable to post required financial assurance related to an environmental remediation obligation, the Company might be prohibited from starting planned operations or enter into interim compliance measures pending completion of the required remedy, which could have a material adverse effect. Furthermore, changes to the amount of financial assurance that the Company is required to post, as well as the nature of the collateral to be provided, could significantly increase the Company’s costs, making the maintenance and development of new mines less economically feasible.

Although Millennium has currently made provisions for certain of its reclamation obligations and the Company is assessing provisions for the reclamation obligations of its other subsidiaries, there is no assurance that these provisions will be adequate in the future. The provision required is expected to increase significantly through negotiation with regulatory authorities as the Beatons Creek Project advances through permitting. There can be no guarantee that the Company will have sufficient capital resources to cover the costs of reclamation when they become due and payable.

The Company is currently engaged in discussions with the Department of Mines, Industry Regulation, and Safety and the Department of Water and Environmental Regulation, in Western Australia, with respect to its closure plan for the Beatons Creek Project, to account for any future changes to the site through construction and ultimately through production. This amount has not yet been determined as at the date hereof. Failure to provide regulatory authorities with the required information could potentially result in the closure of the Company’s operations, which could result in a material adverse effect on its operating results and financial condition.

Nature and Climatic Conditions

The Company has properties located in Western Australia, Australia. Typically, the Western Australian’s tropical wet season is from the end of November to the end of March. During the wet season, the properties may be subject to unpredictable weather conditions such as cyclones, heavy rains, strong winds and flash flooding. The Company has undertaken several steps to minimize the effects of the wet season on its operations including planning exploration and mining activities around the wet season. Nonetheless, no assurance can be given that the unpredictable weather conditions will not adversely affect exploration activities. In particular, bulk sampling and exploration activities may be suspended due to poor ground conditions.

Information Technology

The Company is reliant on the continuous and uninterrupted operations of its information technology (“ IT ”) systems. User access and security of all IT systems are critical elements to the operations of the Company. The Company’s operations depend, in part, on how well the Company and its suppliers protect networks, equipment, IT systems and software against damage from a number of threats, including, but not limited to, cable cuts, damage to physical plants, natural disasters, terrorism, fire, power loss, hacking, computer viruses, vandalism and theft. The Company’s

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures. Any IT failure pertaining to availability, access or system security could result in disruption for personnel and could adversely affect the reputation, operations or financial performance of the Company.

The Company’s IT systems could be compromised by unauthorized parties attempting to extract business sensitive, confidential or personal information, corrupting information or disrupting business processes or by inadvertent or intentional actions on the part of the Company’s employees or vendors. A cyber security incident resulting in a security breach or failure to identify a security threat, could disrupt business and could result in the loss of business sensitive, confidential or personal information or other assets, as well as litigation, regulatory enforcement, violation of privacy and security laws and regulations and remediation costs.

Although, to date, the Company has not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that it will not incur such losses in the future. The Company’s risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. As a result, cyber security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.

Insurance and Uninsured Risks

The Company’s business is subject to a number of risks and hazards generally, including: adverse environmental conditions; industrial accidents; unusual or unexpected geological conditions; ground failures; changes in the regulatory environment; and natural phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could result in damage to mineral properties, personal injury or death, environmental damage to the Company’s properties or the properties of others, monetary losses and possible legal liability.

The businesses and properties of the Company are insured against loss or damage, subject to a number of limitations and qualifications. Such insurance will not cover all the potential risks associated with an exploration company’s operations. The Company may also be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration is not generally available to the Company or to other companies in the exploration industry on acceptable terms. The Company might also become subject to liability for pollution or other hazards that it may not be insured against or that the Company may elect not to insure against because of premium costs or other reasons. The Company may suffer a material adverse effect on its business, results of operations, and financial position if it incurs a material loss related to any significant event that is not covered, or adequately covered, by its insurance policies.

Dependence on Principal Exploration Stage Projects

The operations of the Company are currently dependent upon the Egina, Karratha, and Beatons Creek Projects. These projects may never develop into commercially viable ore bodies, which would have a material adverse effect on the Company’s potential mineral resource production, profitability, financial performance and results of operation.

Previous Work on the Egina, Beatons Creek, and Karratha Properties May Give Rise to Environmental Liabilities

There can be no assurance that historic (prior to the Company’s ownership) activities on the Egina, Beatons Creek, and Karratha Properties, as well as on tenements held by Millennium, were conducted in full compliance with the various government and environmental regulations required under the Australian mining regime. To the extent that any of the activities were not in compliance with applicable environmental laws, regulations and permitting requirements, enforcement actions thereunder, including orders of regulatory or judicial authorities, may be taken against the Company as a result of its interest in the Egina, Beatons Creek, and Karratha Properties, and on tenements held by

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Millennium. Any such actions or orders may cause increases in expenses, capital expenditures or production costs or reduction in levels of production, or require abandonment or delays.

Negative Operating Cashflow

The Company has incurred losses since inception and expects to continue to incur losses as it proceeds with exploration and development of its mineral properties. The Company’s efforts to date have been focused on acquiring and exploring its mineral properties. These properties are in the exploration stage and do not have mineral reserves. The Company does not anticipate that it will earn any revenue from operations or other means unless and until at least one of its properties is placed into production or is sold to a third party. It is possible that neither of these events will occur.

Uncertainty in Global Markets and Economic Conditions

There remains considerable volatility in global markets and economic conditions together with the volatility in the price of gold. This continues to generate uncertainty for the mining sector worldwide and there has been a decrease in access to capital for exploration and development activities.

As discussed above, the Company has and will continue to rely on the capital markets for necessary capital expenditures. As a result, the business, financial condition and operations of the Company could be adversely affected by: (i) continued disruption and volatility in financial markets; (ii) continued capital and liquidity concerns regarding financial institutions generally and hindering the Company’s counterparties specifically; (iii) limitations resulting from governmental action in an effort to stabilize or provide additional regulation of the financial system; or (iv) recessionary conditions that are deeper or last longer than currently anticipated.

Price of Gold

The Company’s profitability and long-term viability depend, in large part, upon the market price of gold. Metal prices fluctuate widely and are affected by numerous factors beyond the Company’s control, including global and regional supply and demand for industrial products containing metals generally; changes in global or regional investment or consumption patterns; increased production due to new mine developments and improved mining and production methods; decreased production due to mine closures; interest rates and interest rate expectation; expectations with respect to the rate of inflation or deflation; currency rate fluctuations; availability and costs of metal substitutes; global or regional political or economic conditions; and sales by central banks, holders, speculators and other producers of metals in response to any of the above factors.

There can be no assurance that metal prices will remain at current levels or that such prices will improve. A decrease in the market prices could adversely affect the profitability of the Company’s existing mines and projects as well as its ability to finance the exploration and development of additional properties, which would have a material adverse effect on the Company’s results of operations, cash flows and financial position. A decline in metal prices may require the Company to write-down mineral resource estimates (or mineral reserve estimates if ever established in the future), which could result in material write-downs of investments in mining properties. Further, if revenue from metal sales declines, the Company may experience liquidity difficulties. Its cash flow from mining operations may be insufficient to meet its operating needs, and as a result the Company could be forced to discontinue production and could lose its interest in, or be forced to sell, some or all of its properties.

Joint Ventures

The Company is and will be subject to the risks normally associated with the conduct of joint ventures, which include disagreements as to how to develop, operate and finance a project, inequality of bargaining power, incompatible strategic and economic objectives and possible litigation between the participants regarding joint venture matters. These matters may have an adverse effect on the Company’s ability to realize the full economic benefits of its interest in the property that is the subject of a joint venture, which could affect its results of operations and financial condition as well as the price of the Company’s Common Shares.

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Permits

The Company’s current and anticipated future operations, including further exploration and development activities and commencement of production on the Company’s properties, require permits from various governmental authorities. Delays or a failure to obtain such permits, or a failure to comply with the terms of any such permits, including the amount and timing of financial assurance obligations required, could have a material adverse impact on the Company. Any changes or delays to the Egina, Beatons Creek, and Karratha Properties will cause the Company additional expense. There can be no assurance that any such additional permits that the Company requires will be obtainable on reasonable terms, or at all. Further, there may be appeals of issued permits which may delay and/or prevent construction or operation during the appeal process and there can be no assurance that an appeal would be resolved in a timely manner or in the Company’s favour.

Danger of Exploration and Development Activities

Exploration and development activities involve various types of risks and hazards, including:

environmental hazards;
industrial accidents;
metallurgical and other processing problems;
unusual or unexpected rock formations;
structural cave-ins or slides;
flooding and fires; and
periodic interruptions due to inclement or hazardous weather conditions.

These risks could result in damage to, or destruction of, mineral properties or other properties; personal injury; environmental damage; delays in activities; monetary losses; and possible legal liability. The Company may not be able to obtain insurance to cover these risks at economically feasible premiums. Insurance against certain environmental risks, including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from production, is not generally available to the Company or to other companies within the mining industry. The Company may suffer a material adverse impact on its business if it incurs losses related to any significant events that are not covered by its insurance policies.

Exploration and Mining Tenements May be Subject to Forfeiture

The Australian title registration system provides for application for forfeiture of exploration and mining licences where there is, or has been, non-compliance with the prescribed royalties, rents or expenditure conditions. Forfeiture may occur in one of a number of ways. A third party may file a plaint (an application for forfeiture) with the mining warden, who may (in the case of prospecting or miscellaneous licences) elect to forfeit the tenement or impose a fine not exceeding AUD $10,000 for non-compliance with expenditure conditions and not exceeding AUD $50,000 in any other case, or (in the case of exploration licences, mining and general purpose leases) make a recommendation to the Minister for Mines and Petroleum; Energy; Industrial Relations (the “ Minister ”) for or against forfeiture.

In the latter case, the Minister may decide to forfeit the tenement, impose a fine not exceeding AUD $50,000 per tenement, or impose no penalty. A tenement may not be forfeited or recommended for forfeiture unless non-compliance is of sufficient gravity to justify forfeiture. Alternatively, the Minister may himself institute forfeiture measures where noncompliance has occurred (or impose a fine not exceeding AUD $50,000 per tenement which, if unpaid, results in deemed forfeiture).

Uncertainty in the Estimation of Mineral Resources and Mineral Reserves

Mineral resources that are not mineral reserves do not have demonstrated economic viability. The Company’s publicly disclosed mineral resource figures are estimates only and no assurance can be given that these will ever be upgraded to higher categories of mineral resources or to mineral reserves. Even if mineral reserves are established in the future,

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

there is no assurance that the anticipated tonnages and grades will be achieved, that the indicated level of recovery will be realized or that mineral reserves will be mined or processed profitably. Actual mineral resources may not conform to geological, metallurgical or other expectations, and the volume and grade of mineralized material recovered may differ from estimated levels. There are numerous uncertainties inherent in estimating mineral resources and mineral reserves, including many factors beyond the Company’s control. Such estimation is a subjective process, and the accuracy of any mineral resource or mineral reserve estimate is a function of the quantity and quality of available data and of the assumptions made and judgments used in engineering and geological interpretation. Shortterm operating factors relating to the mineral reserves, such as the need for orderly development of the mineralized material or the processing of new or different mineralized material grades, may cause the mining operation to be unprofitable in any particular accounting period. In addition, there can be no assurance that gold recoveries in small scale laboratory tests will be duplicated in larger scale tests under on-site conditions or during production. Lower market prices, increased production costs, reduced recovery rates and other factors may result in a revision of mineral resource estimates from time to time or may render the Company’s mineral resources uneconomic to exploit. Mineral resource data is not indicative of future results of operations.

If the Company’s actual mineral resources (and mineral reserves if ever established in the future) are less than current estimates or if the Company fails to develop its mineral resource base through the realization of identified mineralized potential, its results of operations or financial condition may be materially and adversely affected. Evaluation of mineral resources occurs from time to time and estimates of mineral resources (and mineral reserves if ever established in the future) may change depending on further geological interpretation, drilling results and metal prices, which could have a negative effect on the Company’s operations. The category of inferred mineral resource is the least reliable mineral resource category and is subject to the most variability. Due to the uncertainty which may attach to inferred mineral resources, there is no assurance that inferred mineral resources will be upgraded to an indicated or measured mineral resource category as a result of continued exploration. There is no certainty that any mineral resources (or mineral reserves, if any) identified on any of the Company’s properties will in fact be realized or will ever qualify as a commercially mineable (or viable) deposit which can be legally and economically exploited. Until a deposit is actually mined and processed, the quantity of mineral resources (or mineral reserves, if any) and grade must be considered as estimates only and the Company may ultimately never realize production on any of its properties.

Government Regulation

The Company’s business, mining operations and exploration and development activities are subject to extensive federal, territorial and local laws and regulations governing exploration, development, production, exports, taxes, labour standards, waste disposal, protection of the environment, reclamation, historic and cultural resource preservation, mine safety and occupational health, control of toxic substances, reporting and other matters. Although the Company believes that its exploration activities are currently carried out in accordance with all applicable rules and regulations, new rules and regulations may be enacted and existing rules and regulations may be applied in a manner that could limit or curtail production or development of the Company’s properties. Amendments to current laws and regulations governing the operations and activities of the Company or more stringent implementation thereof could have a material adverse effect on the Company’s business, financial condition and results of operations.

Community Relations

The Company’s relationships with the communities in which it operates and other stakeholders are critical to ensure the future success of its existing operations and the construction and development of its projects. There is an increasing level of public concern relating to the perceived effect of exploration activities on the environment and on communities impacted by such activities. Publicity adverse to the Company, its operations or extractive industries generally, could have an adverse effect on the Company and may impact relationships with the communities in which Novo operates and other stakeholders. While the Company is committed to operating in a socially responsible manner, there can be no assurance that its efforts in this respect will mitigate this potential risk. Further, damage to the Company’s reputation can be the result of the perceived or actual occurrence of any number of events, and could include any negative publicity, whether true or not. The increased usage of social media and other web-based tools used to generate, publish and discuss user-generated content and to connect with other users has made it increasingly easy for individuals and groups to communicate and share opinions and views in regards to the Company and its activities, whether true or not. While the Company strives to uphold and maintain a positive image and reputation, the Company does not ultimately

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

have control over how it is perceived by others. Reputation loss may lead to increased challenges in developing, maintaining community relations and advancing its projects and decreased investor confidence, all of which may have a material adverse impact on the financial performance and growth of the Company.

Native Title and Aboriginal Heritage

Native title claims and Aboriginal heritage issues may affect the ability of the Company to pursue exploration, development and mining on Australian properties. The resolution of native title and Aboriginal heritage issues is an integral part of exploration and mining operations in Australia and the Company is committed to managing any issues that may arise effectively. However, in view of the inherent legal and factual uncertainties relating to such issues, no assurance can be given that material adverse consequences will not arise.

Competition

The mining industry is intensely competitive in all of its phases and the Company competes with many companies possessing greater financial and technical resources than itself. Competition in the precious metals mining industry is primarily for mineral rich properties that can be developed and produced economically; the technical expertise to find, develop, and operate such properties; the labour to operate the properties; and the capital for the purpose of funding such properties. Many competitors not only explore for and mine precious metals, but also conduct refining and marketing operations on a global basis. Such competition may result in the Company being unable to acquire desired properties, to recruit or retain qualified employees or to acquire the capital necessary to fund its operations and develop its properties. Existing or future competition in the mining industry could materially adversely affect the Company’s prospects for mineral exploration and success in the future.

Currency Fluctuations

Currency fluctuations may affect the Company’s capital costs and the costs that the Company incurs at its operations. Gold is sold throughout the world based principally on a United States dollar price, but most of the Company’s operating and capital expenses are incurred in Australian and Canadian dollars. Changes in these foreign currencies could materially and adversely affect the Company’s profitability, results of operations and financial position.

Litigation

All industries, including the mining industry, are subject to legal claims, with and without merit. Legal proceedings may arise from time to time in the course of the Company’s business. Such litigation may be brought against the Company or one or more of its subsidiaries in the future from time to time or the Company or one or more of its subsidiaries may be subject to another form of litigation. Defense and settlement costs of legal claims can be substantial, even with respect to claims that have no merit. As of the date hereof, no claims have been brought against the Company, nor has the Company received an indication that any claims are forthcoming. However, due to the inherent uncertainty of the litigation process, should a claim be brought against the Company, the process of defending such claims could take away from management time and effort and the resolution of any particular legal proceeding to which the Company or one or more of its subsidiaries may become subject could have a material adverse effect on the Company’s financial position and results of operations.

Enforcement of Civil Liabilities.

Substantially all of the Company’s assets are located outside of Canada and certain of the directors and officers of the Company are or may be resident outside of Canada. As a result, it may be difficult or impossible to enforce judgments granted by a court in Canada against the assets of the Company or the Company’s directors and officers residing outside of Canada.

No Cash Dividends on Common Shares.

Shareholders should not anticipate receiving cash dividends on the Common Shares. The Company has never declared or paid any cash dividends or distributions on the Common Shares. It is currently expected that the Company

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NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

will retain future earnings, if any, to support operations and to finance explorations and therefore not pay any cash dividends on the Common Shares in the foreseeable future.

Conflicts of Interest

Certain of the directors and officers of the Company also serve as directors and/or officers of other companies involved in natural resource exploration and development and, consequently, there exists the possibility for such directors and officers to be in a position of conflict. The Company expects that any decision made by any of such directors and officers involving the Company will be made in accordance with their duties and obligations to deal fairly and in good faith with a view to the best interests of the Company and its shareholders, but there can be no assurance in this regard. In addition, each of the Company’s directors is required to declare and refrain from voting on any matter in which such directors may have a conflict of interest or which are governed by the procedures set forth in the Business Corporations Act (British Columbia) and any other applicable law.

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AI assistant

Novo Resources — Management Reports 2021

46548_rns_2021-03-31_4e509ae3-ae47-43c4-88b0-aaf7338434da.pdf

MANAGEMENT’S DISCUSSION AND ANALYSIS

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Caution on Forward-Looking Information

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

DESCRIPTION OF BUSINESS AND OVERALL PERFORMANCE

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

2020 Highlights

Transformative Acquisition

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Beatons Creek Project PEA highlights:

Beatons Creek Project PEA Summary

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Opportunities

PEA Details

Mining and Processing

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Open Pit Mineral Resources (oxide and fresh mineralization)

Open Pit Mineral Resources (oxide mineralization)

Open Pit Mineral Resources (fresh mineralization)

Underground Mineral Resources (fresh mineralization)

Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Operating Costs

Sustaining Capital

AISC

Key Assumptions

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Exploration Highlights

East Pilbara Highlights

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

West Pilbara Highlights

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Egina Highlights

Other Exploration Highlights

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Corporate Highlights

RESULTS OF OPERATIONS

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

SELECTED ANNUAL INFORMATION

Net Loss

Share-based payments

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Wages and salaries

Office and general expenses

Consulting services

Impairment expenses

Total Assets

Shareholders’ Equity

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

SUMMARY OF QUARTERLY RESULTS

FOURTH QUARTER

EXPLORATION AND EVALUATION ASSETS

Beatons Creek Region

Beatons Creek Property

Millennium Property

Talga Projects

Blue Spec Project

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Paleo-Placer Property

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Calidus Resources Limited

Mt Elsie project

Karratha Region

Bellary Dome Pty Ltd (“Bellary Dome”)

Comet Well Property

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Artemis Resources Limited Joint Operation

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

Memorandum of Agreement with Essential Metals

Sumitomo Farm-In and Joint Operation

Egina Farmin Arrangement (“EFA”)

De Grey Mining Ltd. Letter of Intent

NOVO RESOURCES CORP. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DECEMBER 31, 2020

New Frontier Resources Pty Ltd Purchase

De Grey and Farno McMahon Heads of Agreement

Victoria, Australia

Novo Resources Management Reports 2021