Novo Resources reported a reduced net loss of CAD 1.625 million in Q1 2025, progressing exploration with a new aircore drilling program in Western Australia while facing liquidity challenges that cast doubt on its near-term financial sustainability.
- Net loss narrowed to CAD 1.625 million from CAD 5.064 million year-on-year
- Maiden ~6,000m aircore drilling program commenced at Balla Balla Gold Project
- Reconnaissance fieldwork completed at Tibooburra and John Bull projects in NSW
- Cash and short-term investments declined to CAD 9.045 million
- Material uncertainty noted over going concern beyond May 2026
Financial Performance and Liquidity
In its Q1 2025 update, Novo Resources Corp reported a net loss after tax of CAD 1.625 million, a significant improvement from the CAD 5.064 million loss recorded in the same quarter last year. This reduction was largely driven by lower general administration and exploration expenditures, reflecting a more disciplined cost structure amid ongoing exploration activities.
Despite this improvement, the company’s cash and short-term investments decreased to CAD 9.045 million as of March 31, 2025, down from CAD 10.689 million at the end of 2024 and CAD 14.623 million a year earlier. Novo’s available liquidity, which includes marketable securities and receivables, also declined, prompting management to highlight a material uncertainty regarding the company’s ability to continue as a going concern beyond May 2026. The company plans to manage this risk through controlled discretionary spending, potential joint ventures, and asset disposals.
Exploration Progress in Australia
Exploration remains the core focus for Novo, with a maiden approximately 6,000-metre aircore drilling program initiated in late March at the Balla Balla Gold Project in the Pilbara region of Western Australia. This early-stage project targets structural and intrusion-related gold mineralisation along the Sholl Shear Zone, a major crustal-scale feature. Initial drilling at the Beaufort prospect has begun, aiming to test multiple priority targets including Ramquarry, Cockerell, and Babbage.
In New South Wales, reconnaissance field programs were completed at the Tibooburra and John Bull Gold Projects, setting the stage for reverse circulation drilling planned for Q2 2025. At Tibooburra, recent sampling returned high-grade gold results, including rock chip assays up to 89.6 g/t Au, supporting the design of a targeted drilling campaign. Meanwhile, ongoing desktop studies continue at the Toolunga Project in Western Australia’s Onslow District, where Novo holds a strategic land position with potential for precious and base metal discoveries.
Joint Ventures and Market Context
At the Egina Gold Camp in the Pilbara, De Grey Mining Limited, Novo’s joint venture partner, has met its minimum expenditure commitments and plans further investment to earn a 50% interest in the Becher Project. Notably, Northern Star Resources Limited has announced its intention to acquire De Grey in a transaction valued at A$5 billion, expected to close in the second half of 2025, which could have implications for Novo’s joint venture arrangements.
On the sustainability front, Novo reported no significant safety, environmental, or community incidents during the quarter. The company continues to engage with Indigenous communities and regulatory bodies, emphasizing environmental stewardship and social responsibility across its extensive Australian tenure.
Outlook and Strategic Considerations
Looking ahead, Novo plans to complete the Balla Balla drilling program in Q2 2025 and commence reverse circulation drilling at its NSW projects. The company’s management remains focused on balancing exploration advancement with prudent financial management amid liquidity constraints. The coming quarters will be critical in delivering drill results that could validate Novo’s exploration strategy and potentially attract new investment or partnership opportunities.
Bottom Line?
Novo’s exploration momentum is building, but financial headwinds underscore the need for strategic funding solutions.
Questions in the middle?
- Will upcoming drilling results at Balla Balla and NSW projects materially enhance Novo’s resource potential?
- How will Northern Star’s acquisition of De Grey impact Novo’s joint venture interests and exploration plans?
- What specific measures will Novo take to address the going concern uncertainty beyond mid-2026?