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NovaCopper Announces First Quarter Financial Results

April 8, 2014

TSX, NYSE-MKT

Symbol: NCQ

VANCOUVER, April 8, 2014 /PRNewswire/ – NovaCopper Inc. (TSX, NYSE-MKT: NCQ) (“NovaCopper” or “the Company”) announces its
financial results for the first quarter ended February 28, 2014.
Details of the Company’s financial results are contained in the
unaudited consolidated financial statements and Management’s Discussion
and Analysis which will be available on the Company’s website at www.novacopper.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. All amounts are in United States dollars unless otherwise stated.

First Quarter Financial Results

The following unaudited selected quarterly information is prepared in
accordance with U.S. GAAP.


                                                   in thousands of dollars,
                                               except for per share amounts

    Selected financial results               Three months      Three months
                                                    ended             ended
                                        February 28, 2014 February 28, 2013
                                                        $                 $

    Amortization                                      258               250

    General and administrative                        437               548

    Mineral properties expense                        580               802

    Professional fees                                 650               299

    Salaries                                          550               549

    Salaries - stock-based compensation               116             4,113

    Loss and comprehensive loss for the             2,615             6,626
    period

    Basic and diluted loss per common               $0.05             $0.13
    share

For the three months ended February 28, 2014, NovaCopper reported a net
loss of $2.6 million (or $0.05 basic and diluted loss per common share)
compared to a net loss of $6.6 million for the corresponding period in
2013 (or $0.13 basic and diluted loss per common share). This variance
was primarily due to a non-cash stock-based compensation charge of $4.1
million in for the three months ended February 28, 2013 compared to
$0.1 million in the corresponding period in 2014. Total stock-based
compensation expense recognized for the three months ended February 28,
2013 was $4.1 million which included $1.9 million for options granted
under the NovaCopper stock option plan, $0.04 million for NovaGold
arrangement options from the spin-out, and $2.1 million for RSUs and
DSUs granted to employees and directors with no similar grant in the
first quarter of this year.

In November 2013, all employees and directors voluntarily returned
options outstanding with an exercise price of CAD$3.11 totaling
5,710,000 stock options in order to create a more sustainable long-term
retention strategy. As a result, the expense relating to these options
was accelerated and recorded in the year ended November 30, 2013.

Other differences in the three months ended February 28, 2014 compared
to the three months ended February 28, 2013 resulted from a reduction
in mineral property expenses and general and administrative expense
offset by an increase in professional fees. For the three months ended
February 28, 2014, we reported mineral property expenses of $0.6
million compared to $0.8 million for the corresponding period in 2013.
For the period in 2013 we were engaged in the preliminary economic
assessment study for the Arctic Project compared to the three months
ended February 28, 2014 during which we were engaged in the update to
the Bornite Project resource estimate, a report involving less
technical and engineering consulting. General and administrative costs
were reduced from $0.5 million in the three months ended February 28,
2013 to $0.4 million in the three months ended February 28, 2014 due to
cost reduction efforts. Our professional fees were $0.7 million for the
three months ended February 28, 2014 compared to $0.3 million for the
three months ended February 28, 2013 as we incurred financing
preparation costs in 2014 for which there is no comparable cost in
2013. We filed a preliminary prospectus supplement on February 19, 2014
with the intention of raising approximately $20 million through a
combination of a public offering and a private placement with its large
shareholders. On March 7, 2014, we cancelled the offering and deferred
a decision on financing until the release of the results from the
Bornite resource update. If we successfully complete a financing in
the near future, some of the financing costs already incurred and
recorded in professional fees during the first quarter 2014 may be
reclassified at that time into share capital.

Liquidity and Capital Resources

At February 28, 2014, we had $4.4 million in cash and cash equivalents.
We expended $2.1 million on operating activities during the three month
period ended February 28, 2014, compared with expenditures of
$3.5 million for operating activities for the same period in 2013. The
majority of cash spent on operating activities during both periods was
expended on mineral property expenses, general and administrative, and
salaries. A large proportion of the cash spent in the three months
ended February 28, 2013 was also spent on a reduction in accounts
payable and accrued liabilities of $1.3 million due to timing of
payments. As the exploration field season in the Ambler mining district
is between May and early October of each year, a significant portion of
the mineral property expenses and operating activities are incurred
during this time frame.

We do not currently generate operating cash flows. We believe that the
cash and cash equivalent balances at November 30, 2013 of $6.5 million
were sufficient to cover the anticipated expenditures relating to
fiscal 2014 general and administrative costs and to maintain our
properties in good standing. As at February 28, 2014, the Company had
consolidated cash of $4.4 million and working capital of $3.2 million.
We will need to raise additional funds to support further exploration
of our projects and administration expenses beyond the end of our
fiscal year. Future financings are anticipated through debt financing,
equity financing, convertible debt, or other means. Our continued
operations are dependent on our ability to obtain additional financing
or to generate future cash flows. However, there can be no assurance
that we will be successful in our efforts to raise additional capital.

Recent activities

On March 18, 2014, we announced the release of an updated National
Instrument 43-101 (“NI 43-101″) compliant resource estimate for the
Bornite deposit. The technical report titled “NI 43-101 Technical
Report on the Bornite Project, Northwest Alaska, USA” dated effective
April 1, 2014 is available on SEDAR, EDGAR, and our website. See Cautionary Note to United States Investors concerning Reserve and
Resource Estimates.”

We are currently working to define the 2014 exploration program focus
and initiatives.

During the first quarter of 2014, we continued to focus efforts on
supporting Alaska Industrial Development Export Authority (“AIDEA”) in
permitting the Ambler Mining District Industrial Access Road (“AMDIAR”)
which is expected to provide access to UKMP Projects. AIDEA received an
approved budget of $8.5 million from the State of Alaska to fund
activities on the AMDIAR in the 2013/2014 fiscal budget. AIDEA
continued to collect community input at meetings held through the
winter in various villages. Environmental baseline studies are planned
to begin during the summer field season. We also worked closely with
NANA on community relations and workforce development strategies.

We intend to sign a memorandum of understanding with AIDEA in the first
half of 2014 to explore the feasibility of utilizing liquid natural gas
(“LNG”) trucked from the North Slope LNG plant (or the Interior Energy
Project) to the UKMP Projects site to replace diesel as the main source
of fuel for any future production at the UKMP Projects. In January
2014, AIDEA announced the selection of the commercial participant to
develop the North Slope LNG plant and outlined the target for the first
gas delivery to Fairbanks in the winter of 2015/2016.

About NovaCopper

NovaCopper Inc. is a base metals exploration company focused on
exploring and developing the Ambler mining district in Alaska. It is
one of the richest and most-prospective known copper-dominant districts
located in one of the safest geopolitical jurisdictions in the world.
It hosts world-class polymetallic VMS deposits that contain copper,
zinc, lead, gold and silver, and carbonate replacement deposits which
have been found to host high-grade copper mineralization. Exploration
efforts have been focused on two deposits in the Ambler district – the
Arctic VMS deposit and the Bornite carbonate replacement deposit. Both
deposits are located within NovaCopper’s land package that spans
approximately 143,000 hectares. NovaCopper has an agreement with NANA
Regional Corporation, Inc., an Alaskan Native Corporation that provides
a framework for the exploration and potential development of the Ambler
mining district in cooperation with the local communities. Our vision
is to develop the Ambler mining district into a premier North American
copper producer.

More information on the Company, its properties and its management team
is available on the Company’s website at www.novacopper.com.

Cautionary Note Regarding Forward-Looking Statements

This press release includes certain “forward-looking information” and
“forward-looking statements” (collectively “forward-looking
statements”) within the meaning of applicable Canadian and United
States securities legislation including the United States Private
Securities Litigation Reform Act of 1995. All statements, other than
statements of historical fact, included herein, without limitation,
statements relating to the future operating or financial performance of
NovaCopper, are forward-looking statements. Forward-looking statements
are frequently, but not always, identified by words such as “expects”,
“anticipates”, “believes”, “intends”, “estimates”, “potential”,
“possible”, and similar expressions, or statements that events,
conditions, or results “will”, “may”, “could”, or “should” occur or be
achieved. These forward-looking statements may include statements
regarding perceived merit of properties; exploration results and
budgets; mineral reserves and resource estimates; work programs;
capital expenditures; timelines; strategic plans; market prices for
precious and base metals; or other statements that are not statements
of fact. Forward-looking statements involve various risks and
uncertainties. There can be no assurance that such statements will
prove to be accurate, and actual results and future events could differ
materially from those anticipated in such statements. Important factors
that could cause actual results to differ materially from NovaCopper’s
expectations include the uncertainties involving the need for
additional financing to explore and develop properties and availability
of financing in the debt and capital markets; uncertainties involved in
the interpretation of drilling results and geological tests and the
estimation of reserves and resources; the need for cooperation of
government agencies and native groups in the development and operation
of properties; the need to obtain permits and governmental approvals;
risks of construction and mining projects such as accidents, equipment
breakdowns, bad weather, non-compliance with environmental and permit
requirements, unanticipated variation in geological structures, metal
grades or recovery rates; unexpected cost increases, which could
include significant increases in estimated capital and operating costs;
fluctuations in metal prices and currency exchange rates; and other
risks and uncertainties disclosed in NovaCopper’s Annual Report on Form
10-K for the year ended November 30, 2013 filed with Canadian
securities regulatory authorities and with the United States Securities
and Exchange Commission and in other NovaCopper reports and documents
filed with applicable securities regulatory authorities from time to
time. NovaCopper’s forward-looking statements reflect the beliefs,
opinions and projections on the date the statements are made.
NovaCopper assumes no obligation to update the forward-looking
statements or beliefs, opinions, projections, or other factors, should
they change, except as required by law.

Cautionary Note to United States Investors

This press release has been prepared in accordance with the requirements
of the securities laws in effect in Canada, which differ from the
requirements of U.S. securities laws. Unless otherwise indicated, all
resource and reserve estimates included in this press release have been
prepared in accordance with National Instrument 43-101 Standards of
Disclosure for Mineral Projects (“NI 43-101″) and the Canadian
Institute of Mining, Metallurgy, and Petroleum Definition Standards on
Mineral Resources and Mineral Reserves. NI 43-101 is a rule developed
by the Canadian Securities Administrators which establishes standards
for all public disclosure an issuer makes of scientific and technical
information concerning mineral projects. Canadian standards, including
NI 43-101, differ significantly from the requirements of the United
States Securities and Exchange Commission (“SEC”), and resource and
reserve information contained herein may not be comparable to similar
information disclosed by U.S. companies. In particular, and without
limiting the generality of the foregoing, the term “resource” does not
equate to the term “reserves”. Under U.S. standards, mineralization may
not be classified as a “reserve” unless the determination has been made
that the mineralization could be economically and legally produced or
extracted at the time the reserve determination is made. The SEC’s
disclosure standards normally do not permit the inclusion of
information concerning “measured mineral resources”, “indicated mineral
resources” or “inferred mineral resources” or other descriptions of the
amount of mineralization in mineral deposits that do not constitute
“reserves” by U.S. standards in documents filed with the SEC. Investors
are cautioned not to assume that any part or all of mineral deposits in
these categories will ever be converted into reserves. U.S. investors
should also understand that “inferred mineral resources” have a great
amount of uncertainty as to their existence and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all or
any part of an “inferred mineral resource” will ever be upgraded to a
higher category. Under Canadian rules, estimated “inferred mineral
resources” may not form the basis of feasibility or pre-feasibility
studies except in rare cases. Investors are cautioned not to assume
that all or any part of an “inferred mineral resource” exists or is
economically or legally mineable. Disclosure of “contained ounces” in a
resource is permitted disclosure under Canadian regulations; however,
the SEC normally only permits issuers to report mineralization that
does not constitute “reserves” by SEC standards as in-place tonnage and
grade without reference to unit measures. The requirements of NI 43-101
for identification of “reserves” are also not the same as those of the
SEC, and reserves reported by the Company in compliance with NI 43-101
may not qualify as “reserves” under SEC standards. Accordingly,
information concerning mineral deposits set forth herein may not be
comparable with information made public by companies that report in
accordance with U.S. standards.

SOURCE NovaCopper Inc.


Source: PR Newswire



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