Novo Resources has been granted an option and an additional earn-in right to acquire an initial 50% interest in ASX-listed Kalamazoo Resources Limited’s (“ Kalamazoo ”) Queens gold project (the “ Queens Project ”) located in the Bendigo zone of Australia’s Victorian goldfields (collectively, the “ Transaction ”) ( please see Figure 1 and Figure 2 below for map s of the Queens Project ), with the possibility of an increase to an 80% interest, as described below. The Transaction is subject to approval of the TSX Venture Exchange and other customary regulatory approvals for transactions of this nature. Novo holds a 7.64% undiluted / 11.60% fully diluted equity interest in Kalamazoo pursuant to an investment made on January 14, 2020 .

Queens Project Description

The Queens Project encircles the core of ASX-listed GBM Resources Limited’s Malmsbury gold field and covers multiple structural extensions of the primary lode Au deposits of this important high-grade gold camp. The Malmsbury gold field is situated in the eastern part of the prolific Bendigo Zone approximately 55 km south of Kirkland Lake’s high-grade Fosterville mine. Given the similar geologic setting of Malmsbury and its history of high-grade gold production, Novo thinks Malmsbury has potential to host similar mineralization to that at Fosterville. Novo holds an option to purchase-joint venture the Malmsbury Project with GBM Resources Ltd. With the addition of the Queens Project Transaction, Novo will hold an interest in the entirety of the Malmsbury gold field.

Queens Project Terms

Novo will have a six-month period (the “ Initial Period ”) to conduct due diligence on the Queens Project by issuing to Kalamazoo 24,883 common shares of the Company (the “ Initial Shares ”) which will be subject to a statutory hold period of four months from the date of issuance. At any time during the Initial Period, Novo will have the right to exercise its option (the “ Option ”) to earn a 50% interest in the Queens Project by issuing A$2 million-worth of common shares of the Company to Kalamazoo at a deemed price per share equal to the volume-weighted average closing price of the Company’s common shares for the five trading days immediately prior to Novo’s exercise of the Option (the “ Option Shares ”). The Option Shares will also be subject to a statutory hold period of four months from the date of issuance.

If Novo exercises the Option, it will have the right to earn an additional 20% interest in the Queens Project and form a joint venture with Kalamazoo by incurring AUD $5 million in exploration expenditure (the “ Earn-In Amount ”) over a five-year period (the “ Earn- I n Period ”), as to a minimum of AUD $250,000 during the first year, AUD $1 million during each of the second, third, and fourth years, and AUD $1.75 million during the fifth and final year of the Earn-In Period. Any expenditure incurred during any year of the Earn-In Period which surpasses the minimum required amount will be credited against the subsequent year’s commitment.

If Novo satisfies the Earn-In Amount by the expiry of the 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 “ 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 “ 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 PEA but fails to satisfy the 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 Earn-In Amount during the Earn-In Period, Novo’s interest in the Queens Project will decrease to 49%.