Novo Resources Corp. (TSX: NVO) reported its Q2 2022 financials on late Monday, toplined by the preliminarily announced quarterly revenue of $29.7 million. This is a decline from Q1 2022’s revenue of $31.9 million and Q2 2021’s revenue of $31.7 million.
The quarterly revenue came from selling 12,378 gold ounces at an average realized price of US$1,880 per ounce compared to 13,364 gold ounces last quarter and 13,958 gold ounces last year.
However, the company also incurred costs of goods sold higher than the revenue, notching $42.5 million for the quarter vis-a-vis $37.4 million last quarter and $31.7 million last year. All-in sustaining costs at $2,505 per ounce also ended higher than the realized price.
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The company is preparing to wind down the oxide operations at the Beatons Creek project, “with mining of the oxide mineral resource ending in Q3 2022 followed by a phased wind-down of operational activities finishing by the end of October 2022.” Meanwhile, the firm is shifting its focus on high-priority exploration targets, including the Beatons Creek Project Fresh drill-out and feasibility study, expected to be completed in late 2022.
Exploration spending added $11.4 million to operational expenses, including $4.6 million on the Fresh project. This widened the firm’s operating loss at $27.7 million from last year’s loss of $9.7 million.
Thanks to an $18.5 million net gain in fair value change on derivative asset, the firm recorded a net loss of $18.8 million for the quarter, a drop from last quarter’s $12.9 million loss and last year’s $16.5 million. This translates to $0.08 loss per share.
Calibrating for financial items, adjusted EBITDA for the quarter came in at a loss of $21.8 million, a significant decline from both losses of $3.1 million in the previous quarter and $6.0 million in the year-ago period.
The company ended the quarter with $74.7 million in cash balance coming from a beginning balance of $21.8 million. The influx came primarily from the $68.9 million net proceeds from selling 8.25 million shares of New Found Gold at $8.35 per share. This puts the balance of the current assets at $148.4 million, which includes recognizing the $16.3 million forward contract from the subsequent sale of another 6.75 million New Found Gold shares at $8.45 per share that transpired after the second quarter.
The company reaffirmed that it expects to produce between 9,000 and 11,000 ounces in Q3 2022.
Novo Resources last traded at $0.52 on the TSX.
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