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.
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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