Novadx Ventures Report

The Mining Stock Report summary of Novadx Ventures Corp. (TSX.V:NDX), a Canadian coal producer with metallurgical and specialty coal properties in the Central Appalachian region of the southern United States. This is a summary report, for informational purposes only and does not have any recommendation to buy or sell.

Summary

Novadx Ventures is a Canadian coal producer, with operations focused in the Central Appalachian region of the southern United States. Novadx trades on the Toronto Venture Exchange, under the ticker symbol NDX, has two coalmines in production; (1) Rosa Mine in Alabama, and (2) Rex No.1 Mine in Tennessee. The company is focused on metallurgical and specialty coal.

Capital Structure

As of Date : April 20, 2012
Exchange: TSX Venture
Ticker Symbol: NDX
Recent Price: $0.21
52 Week Hi /Low: $0.15 / $0.53
Issued & Outstanding: 79,340,847
Market Capitalization: $17,455,000

Management

Neil Macdonald, BSc., Chief Executive Office & Director
Robert Payne, BS, Chief Operating Officer
Valerie Helsing, CPA, CMA, BA, Chief Financial Office & Corporate Secretary
Gregory Saragas, Vice President of Finance
Scott Ackerman, Director
Jeff Durno, Director
Peter Espig, Director, Chair of Audit Committee

Property Summary

Rosa Mine

Coalmine located in Alabama as part of the Warrior Coalfields, Rosa currently produces 10,000 tons of metallurgical and special coal per month. Coal is auger mined, and processed at an onsite wash plant. The company claims that 100% of production at Rosa is sold , approximate price of $180 per ton. The current NI 43-101 Proven & Probable reserve for Rosa is 652,000 tons. Plans to expand production at Rosa through an underground mine.

Rex No. 1 Mine
A silicon metal grade coal mine in Tennessee, currently in test production. Novadx plans for commercial production at Rex of 20,000 tons per month by QE2 2012, and the ability to expand production up to 60,000 tons per month as market demand dictates. Rex No.1 has a NI43-101 Proven & Probable reserve of 11.3 million tons, Measured & Indicated Resource of 38.1 million tons and 9.6 million tons inferred. A coal wash facility is currently being developed.

Regional Summary

Central Appalachian Coal Belt
The middle of three coal basins which comprise the Appalachian Coal Belt, located in the south eastern United States. It covers approximately 23,000 sq. miles, parts of Kentucky, Tennessee, West Virginia and Virginia, and comprises 6 major Pennsylvania age coal seams. The coal seams contain approximately 5 trillion cubic feet of coalbed methane.

Warrior Coalfield

Market Summary

Although primarily considered a source of energy, coal has a number of uses, depending on its characteristics and grades. Thermal coal is in great abundance, but there is a large, stable and growing market for thermal coal, as energy is in demand and coal is considered an inexpensive and reliable source. Thermal coal prices vary, but 2012 spot prices range from $65 – 85 per ton, depending on region, season, etc.

Premium coals are in high demand and their supply is far less abundant than thermal coal. Metallurgical coal, also known or met coal or coking coal, is used as the carbon source in steel production. Demand for met coal is tied largely to industrial demand and global economic growth. Prices for metallurgical coal range from $200 – $350 per ton.

Aside from metallurgical coal, there are niche markets for specialty coals such as the silicon metals market and activated carbon. Novadx is currently supplying coals for both activated carbon and silicon metals. Prices for activated carbon market demand a significant premium in the market. Silicon metals coal used during the production of silicon metals, has a high BTU rating and demands a significant premium in the market.

Investment Highlight / Risks

Highlights
• Exposure to the energy market.
• Currently in production, and generating revenue.
• Mining assets located in the United States, which is politically stable
• Metallurgical Coal provides exposure to industrial demand market.
• High demand and premium price for specialty & metallurgical coals.

Risks
• Stock is currently trading under $2 per share, risk of price volatility.
• Market capitalization of the company is less than $50 million.
• Premium coals are vulnerable to price fluctuation.
• Information was derived from public sources, and may not be accurate. Please verify via your own due diligence.

Comparable Companies

CanAm Coal Corp. (TSX:COE)
Lipari Energy Inc. (TSX:LIP)
NEMI Northern Energy & Mining (TSX:NNE.A)
Royal Coal Corp. (TSXV:RDA)
Compliance Energy Corp. (TSXV:CEC)

Cited Information Sources

Novadx Website
Novadx Corporate Presentation
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