Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary notes

Forward-looking statements

This Management’s Discussion and Analysis contains “forward-looking information” and “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other applicable securities laws. These forward-looking statements may include statements regarding the perceived merit of properties, exploration results and budgets, mineral reserves and resource estimates, work programs, capital expenditures, operating costs, cash flow estimates, production estimates and similar statements relating to the economic viability of a project, timelines, strategic plans, including the Company’s plans and expectations relating to its Upper Kobuk Mineral Projects, completion of transactions, market prices for precious and base metals, or other statements that are not statements of fact. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of Management. Statements concerning mineral resource estimates may also be deemed to constitute “forward-looking statements” to the extent that they involve estimates of the mineralization that will be encountered if the property is developed.

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such as “expects”, “is expected”, “anticipates”, “believes”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential”, “possible” or variations thereof or stating that certain actions, events, conditions or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.

Forward-looking statements are based on a number of material assumptions, including those listed below, which could prove to be significantly incorrect:

• assumptions made in the interpretation of drill results, the geology, grade and continuity of the Company’s mineraldeposits;
• our ability to achieve production at any of the Company’s mineral exploration and development properties;
• estimated capital costs, operating costs, production and economic returns;
• estimated metal pricing, metallurgy, mineability, marketability and operating and capital costs, together with otherassumptions underlying the Company’s resource and reserve estimates;
• our expected ability to develop adequate infrastructure and that the cost of doing so will be reasonable;
• assumptions that all necessary permits and governmental approvals will be obtained;
• our ability to continue our good relationship with local communities and other stakeholders;
• our ability to obtain additional financing;
• our expectations regarding demand for equipment, skilled labour and services needed for exploration and developmentof mineral properties; and
• assumptions that our activities will not be adversely disrupted or impeded by development, operating or regulatoryrisks.

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation:

• risks related to inability to define proven and probable reserves and the fact that none of the Company’s mineralproperties are in production or under development;
• uncertainties relating to the assumptions underlying the Company’s resource estimates, such as metal pricing,metallurgy, mineability, marketability and operating and capital costs;
• risks related to uncertainty of whether there will ever be production at the Company’s mineral exploration anddevelopment properties;
• risks related to the Company’s ability to commence production and generate material revenues or obtain adequatefinancing for its planned exploration and development activities;
• risks related to the Company’s ability to finance its planned exploration activities at its mineral properties or tocomplete further exploration programs;
• risks related to the Company’s ability to finance the development of its mineral properties through external financing,strategic alliances, the sale of property interests or otherwise;

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• commodity price fluctuations;
• risks related to market events and general economic conditions;
• uncertainty of estimates of capital costs, operating costs, production and economic returns;
• risks related to lack of infrastructure, specifically a lack of road access to the UKMP Project site;
• risks related to inclement weather which may delay or hinder exploration activities at its mineral properties;
• the Company’s history of losses and expectation of future losses;
• risks and uncertainties relating to the interpretation of drill results and the geology, grade and continuity of theCompany’s mineral deposits;
• uncertainty related to inferred mineral resources;
• uncertainty related to the economic projections derived from the PEA;
• risks related to the third parties on which the Company depends for its exploration and development activities;
• mining and development risks, including risks related to infrastructure, accidents, equipment breakdowns, labordisputes or other unanticipated difficulties with or interruptions in development, construction or production;
• credit, liquidity, interest rate and currency risks;
• uncertainty as to the Company’s ability to acquire additional commercially mineable mineral rights;
• risks related to increases in demand for equipment, skilled labor and services needed for exploration and developmentof mineral properties, and related cost increases;
• the risk that permits and governmental approvals necessary to develop and operate mines on the Company’s propertieswill not be available on a timely basis or at all;
• risks related to governmental regulation and permits, including environmental regulation;
• risks related to the need for reclamation activities on the Company’s properties and uncertainty of cost estimatesrelated thereto;
• uncertainty related to title to the Company’s mineral properties;
• risks related to competition in the acquisition of mineral properties;
• risks inherent in the acquisition of new properties including unknown liabilities;
• the Company’s need to attract and retain qualified management and technical personnel;
• risks related to conflicts of interests of some of the directors of the Company;
• risks related to potential future litigation;
• risks related to global climate change;
• risks related to adverse publicity from non-governmental organizations;
• risks related to future sales or issuances of equity securities decreasing the value of existing common shares, dilutingvoting power and reducing future earnings per share;
• uncertainty as to the volatility in the price of the Company’s shares;
• the Company’s expectation of not paying cash dividends;
• adverse federal income tax consequences for U.S. shareholders should the Company be a passive foreign investmentcompany;
• risks related to the Company’s majority shareholder;
• uncertainty as to the Company’s ability to maintain the adequacy of internal control over financial reporting as per therequirements of the Sarbanes-Oxley Act; and
• increased regulatory compliance costs relating to the Dodd-Frank Act.

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in NovaCopper’s Form 10-K dated January 29,2014, filed with the Canadian securities regulatory authorities and the United States Securities and Exchange Commission (the “SEC”), and other information released by NovaCopper and filed with the appropriate regulatory agencies.

The Company’s forward-looking statements are based on the beliefs, expectations and opinions of Management on the date the statements are made, and the Company does not assume any obligation to update forward-looking statements if circumstances or Management’s beliefs, expectations or opinions should change, except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

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General

This Management’s Discussion and Analysis (“MD&A”) of the CompanyNovaCopper Inc. (“NovaCopper” or “the Company”) is dated July 7,October 8, 2014 and provides an analysis of our unaudited interim financial results for the quarter ended MayAugust 31, 2014.

The following information should be read in conjunction with our MayAugust 31, 2014 unaudited interim consolidated financial statements and related notes which were prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP.GAAP”). The MD&A should also be read in conjunction with our audited consolidated financial statements and related notes for the year ended November 30, 2013. A summary of our accounting policies are outlined in note 2 of the audited consolidated financial statements and the unaudited interim consolidated financial statements. All amounts are in United States dollars unless otherwise stated.

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Scott Petsel, P.Geo., an employee and the Upper Kobuk Mineral Projects Manager, is a Qualified Person under National Instrument 43-101 -Standards of Disclosure for Mineral Projects (“(“NI 43-101”), and has approved the scientific and technical information in this MD&A.

NovaCopper’s shares are listed on the Toronto Stock Exchange (“TSX”) and the NYSE-MKT under the symbol “NCQ”. Additional information related to NovaCopper, including our annual report on Form 10-K, is available on SEDAR atwww.sedar.comand on EDGAR at www.sec.gov.

Description of business

We are a base metals exploration company focused on exploring and developing the Ambler mining district located in Alaska, U.S.A. We conduct our operations through a wholly-owned subsidiary, NovaCopper US.US Inc. (“NovaCopper US”). Our Upper Kobuk Mineral Projects, or UKMP Projects, consist of: i) the 100% owned Ambler lands which host the Arctic copper-zinc-lead-gold-silver Project; and ii) the Bornite lands being explored under a collaborative long-term agreement with NANA Regional Corporation, Inc. (“NANA”), a regional Alaska Native Corporation, which host the Bornite carbonate-hosted copper Project.

We were formed in 2011 by NovaGold Resources Inc. (“NovaGold”) to hold the UKMP Projects, and were spun-out to shareholders of NovaGold through a Plan of Arrangement effective April 30, 2012. NovaGold shareholders received one NovaCopper common share for every six common shares of NovaGold held on the effective date of the Plan of Arrangement.

Recent activities

On July 7, 2014, we completed the financing originally announced on July 1, 2014 where we had entered into definitive agreements with existing shareholders to complete a non-brokered private placement offering of $7,500,000$7.5 million in Units. Each Unit was priced at $1.15 per Unit and consisted of one common share of the Company and one common share purchase warrant. Each common share purchase warrant will entitle the holder to purchase one common share of the Company at a price of $1.60 per share for a period of five years from the closing date. Net proceeds from the private placement were $7.2 million. The gross proceeds raised will be used for the 12 months following closing to fund $2.7 million on program expenditures, up to $4.0 million on general and administrative expenses including costs associated with the offering, and $0.8 million on extraordinaryone-time expenses incurred in reducing annual general and administrative expenses.

Program expenditures will be used to complete aIn early September 2014, we completed our 2014 re-logging and re-assaying program of between 10,000 andapproximately 13,000 meters of historical drill core at Bornite beginning in JulyBornite. We expect to complete the re-assaying portion of the program by the end of October 2014. Targeted historical holes arewere located within the extensions of the Upper and Lower Reef mineralization captured inwithin the Bornite Open Pit Resource released on March 18, 2014 and the up dip portion of South Reef zone. This effort is a continuation of last year’s program of re-sampling and re-assaying which targeted 33 drill holes comprising 11,067 meters of core originally drilled and only selectively sampled by Kennecott between 1957 and 1975. Last year’s re-assay program resulted in a significant increase in the amount of low-grade coppercopper-bearing mineralization at Bornite and we expectanticipate that the 2014 re-logging and re-assaying program this year could add additional low grade material to the Bornite copper inventory and reduce the strip ratio for a potential open pit mining operation.

During the first half of 2014, we focused efforts on supporting Alaska Industrial Development Export Authority ("AIDEA”) in initiating the permitting process on the Ambler Mining District Industrial Access Road ("AMDIAR”) which is expected to provide access to UKMP Projects. In late April 2014, AIDEA’s boardyield further increases of directors approvedlow grade copper mineralization as well as a resolution authorizing AIDEA to proceed with an application for the Ambler road to the federal agencies that have jurisdiction over the AMDIAR project and to engage a firm to prepare the environmental impact statement for the project under the directionreduction of the federal agencies. Funding for this initiative was provided in the 2013-2014 Alaska State budget.in-pit waste material.

AIDEA continued to collect community input at meetings held through the winter of 2013/2014 in various local villages. Environmental baseline studies are planned to begin during the summer field season.

On May 28, 2014, the Governor of Alaska signed Alaska’s 2015 state budget bills into law. AIDEA received an approved budget of $8.5 million from the State of Alaska to fund activities on the AMDIAR in the 2015 fiscal budget.

We also worked closely with NANA on community relations and workforce development strategies during the first half of 2014.

We intend to sign a memorandum of understanding with AIDEA in 2014 to explore the feasibility of utilizing liquid natural gas (“LNG”) trucked from AIDEA’s proposed 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, Alaska in the winter of 2015/2016.

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We do not currently generate operating cash flows. As at MayAugust 31, 2014, we had consolidated cash of $2.1$7.0 million and working capital of $1.4$6.0 million. Subsequent to period end, the CompanyWe raised $7.5 million through a private placement in July 2014 which is restricted to fund general and administrative expenses and program expenditures during the next twelve months.months following the offering. We will need to raise additional funds to support further exploration of our projects and administration expenses. 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. For further information, please see “Liquidity and capital resources” below.

Corporate developments16

Annual general meeting

On May 21, 2014, NovaCopper held its annual general meeting of shareholders. The shareholders voted for the election of the directors proposed for nomination in the management proxy circular, being: Mr. Tony Giardini, Dr. Thomas Kaplan, Mr. Gregory Lang, Mr. Igor Levental, Mr. Kalidas Madhavpeddi, Mr. Gerald McConnell, Mr. Clynton Nauman, Ms. Janice Stairs, and Mr. Rick Van Nieuwenhuyse. The shareholders also voted in favour of the ratification of an advance notice policy.

Property review

Our principal assets, the UKMP Projects, are located in the Ambler mining district in Northwest Alaska. Our UKMP Projects comprise approximately 352,943 acres (142,831 hectares) consisting of the Ambler and Bornite lands.

Arctic Project

The Ambler lands, which host a number of deposits, including the high-grade copper-zinc-lead-gold-silver Arctic Project, and other mineralized targets within a 65100 kilometer long volcanogenic massive sulfide (“VMS”) belt, are owned by NovaCopper US. The Ambler lands are located in Northwestern Alaska and consist of 112,058 acres (45,348 hectares) of Federal patented mining claims and State of Alaska mining claims, within which VMS mineralization has been found.

On January 11, 2010, NovaGold purchased 100% of the Ambler lands. As consideration, NovaGold issued 931,098 common shares with a fair value of $5.0 million and agreed to make two cash payments to the vendor of $12.0 million each in January 2011 and January 2012 for total consideration of $29.0 million. The January 2011 payment was made by NovaGold on January 7, 2011 and the January 2012 payment was made in advance by NovaGold on August 5, 2011. Total fair value of the consideration was $26.5 million, including transaction costs associated with the acquisition of $0.1 million. The vendor retained a 1% net smelter return royalty that the owner of the property can purchase at any time for a one-time payment of $10.0 million.

We have recorded the Ambler lands as a mineral property with acquisition costs capitalized and exploration costs expensed in accordance with our accounting policies. As a result of the spin-out of NovaCopper from NovaGold, the interim consolidated financial statements have been presented under the continuity of interest basis of accounting whereby the amounts are based on the amounts originally recorded by NovaGold as if we had held the property from inception.

Bornite Project

On October 19, 2011, NovaCopper US and NANA signed a collaborative agreement to explore and develop the Ambler mining district. Under the Exploration Agreement and Option to Lease (the “NANA Agreement”), NovaCopper US acquired the exclusive right to explore the Bornite property and lands deeded to NANA through the Alaska Native Claims Settlement Act (“ANCSA”), located adjacent to the Arctic Project, and the non-exclusive right to access and entry onto NANA’s lands. The agreement establishes a framework for any future development of either the Bornite Project or the Arctic Project. Both projects are included as part of a larger area of interest set forth in the NANA agreement.

As consideration, NovaCopper paid $4.0 million to NANA upon signing the NANA agreement and gave NANA the right to appoint a member to NovaCopper’s board of directors within a five year period following our public listing on a stock exchange. NANA has not exercised their right to appoint a board member at this time. Upon the decision to proceed with development of a mine within the area of interest, NANA maintains the right to purchase an ownership interest in the mine equal to between 16%-25% or retain a 15% net proceeds royalty which is payable after NovaCopper has recovered certain historical costs, capital and cost of capital. Should NANA elect to purchase an ownership interest in the mine, consideration will be payable based on the elected percentage purchased and the costs incurred on the properties less $40.0 million, not to be less than zero. The parties would form a joint venture and be responsible for all future costs incurred in connection with the mine, including capital costs of the mine, based on each party’s pro-rata share. The completion of the agreement with NANA creates a total land package which incorporates our Ambler lands with the adjacent Bornite and ANCSA lands for a total of approximately 352,900 acres (142,831 hectares).

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NANA would also be granted a net smelter return royalty between 1% and 2.5% upon the execution of a mining lease or a surface use agreement, the amount of which is determined by the particular area of land from which production originates.

We have accounted for the Bornite property as a mineral property with acquisition costs capitalized and exploration costs expensed.

Summary of results

For the three month period ended MayAugust 31, 2014, we reported a net loss of $2.1$2.9 million (or $0.04$0.05 basic and diluted loss per common share), a reduction from the net loss of $5.9$6.9 million for the corresponding period in 2013 (or $0.11$0.13 basic and diluted loss per common share). The significant reduction in expenses is related to the timingdiffering magnitude of the field program start-upprograms in 2014.2014 and 2013. In 2013, we incurred $2.2 millioncompleted a drilling campaign of 8,142 meters at the Bornite Project and a significant drill core re-sampling and re-assaying program at the Bornite Project consisting of 33 historical drill holes comprising 11,067 meters of drill core. In 2014, we have completed a re-sampling program and are currently re-assaying approximately 13,000 meters of drill core at the Bornite Project. Offsetting the reduction in mineral property expenses as our field season beganis an increase in early May. In 2014, our field program is expectedsalaries expense due to begin in July resulting in minimal charges during the second quarter relatinga one-time severance cost incurred of $1.3 million to field activities.reduce future general and administrative expenses. The other significant reduction in expenses is from a charge of $2.0$0.8 million in stock-based compensation in 2013 compared to $0.1 million in 2014. No stock-based compensation grants have occurred infor the nine months ended August 31, 2014 resulting in minimal expense from previously granted options and units being recorded in the current period.

Other differences in the three months ended MayAugust 31, 2014 compared to the three months ended MayAugust 31, 2013 resulted from a reduction in general and administrative expensesamortization and professional fees. GeneralThe decrease in professional fees is mainly due to lower activity levels and administrative costs were reduced by approximately 26% from $0.6 million incontinued results of cost reduction efforts during the three months ended MayAugust 31, 20132014 compared to $0.5 million in the three months ended MayAugust 31, 2014 due to cost reduction efforts including a reduction in office space costs. Professional fees also decreased by approximately 17% in the comparable three month periods due to cost reduction efforts.2013.

For the sixnine months ended MayAugust 31, 2014, NovaCopper reported a net loss of $4.7$7.6 million (or $0.09$0.14 basic and diluted loss per common share) compared to a net loss of $12.6$19.5 million for the corresponding period in 2013 (or $0.26$0.37 basic and diluted loss per common share). This variance was primarily due to a non-cash stock-based compensation charge of $6.1$6.9 million for the sixnine months ended MayAugust 31, 2013 compared to $0.3 million in the corresponding period in 2014. As noted above, no stock based compensation grants have occurred for the nine months ended August 31, 2014 resulting in a lesser amount from previously granted options and units being expensed in the current period. Total stock-based compensation expense recognized for the sixnine months ended MayAugust 31, 2013 was $6.1$6.9 million which included $3.3$3.6 million for options granted under the NovaCopper stock option plan, $0.05$0.07 million for NovaGold arrangement options from the spin-out, and $2.7$3.1 million for restricted share unitsRestricted Share Units (“RSUs”) and deferred share unitsDeferred Share Units (“DSUs”) granted to employees and directors with no similar grant in the first quarterthree quarters of this year. InDuring November 2013, all employees and directors voluntarily returned options outstanding having an exercise price of CAD$3.11 for no consideration 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. Additionally as noted above, no stock based compensation grants2013 reducing the amount of expense which would have occurredbeen recorded during the nine months ended August 31, 2014. The other significant driver of the loss improvement is the reduction in 2014 resulting in minimal expense from previously granted options and units being expensedmineral property expenses of $7.8 million in the current period.nine months ended August 31, 2013 compared to $1.9 million in the nine months ended August 31, 2014. As discussed above, the difference relates to the magnitude of the field programs undertaken in 2013 and 2014.

Other differences in the sixnine months ended MayAugust 31, 2014 compared to the sixnine months ended MayAugust 31, 2013 resulted from an increase in salaries and professional fees offset by a reduction in mineral property expensesamortization and general and administrative expenses offsetexpenses. Salaries increased by an increase in professional fees. For the six months ended May 31, 2014, we reported mineral property expenses$0.8 million due to a one-time severance cost incurred of $1.1$1.3 million compared to $3.0 million for the corresponding period in 2013. We started our summer field season in early May 2013 resulting in significant expenditures incurred within the six months ended May 31, 2013. Our 2014 summer field season is expected to begin in July resulting in no field season costs incurred for the six months ended May 31, 2014. We were also engaged in a preliminary economic assessment (“PEA”) study for the Arctic Project in the first halfthird quarter of 2013 compared2014 to the six months ended May 31, 2014 during which we were engaged in the update to the Bornite Project resource estimate, a report involving less technicalreduce future general and engineering consulting.administrative expenses. General and administrative costs were reduced from $1.5 million in the nine months ended August 31, 2013 to $1.2 million in the sixnine months ended May 31, 2013 to $0.9 million in the six months ended MayAugust 31, 2014 due to cost reduction efforts. Our professional fees increased to $0.8 million for the sixnine months ended MayAugust 31, 2014 compared to $0.5$0.6 million for the sixnine months ended MayAugust 31, 2013 as we incurred financing preparation costs for a public financing relating to the filing of a preliminary prospectus supplement on February 19, 2014 and other financing documentation which was not completed for which there is no comparable cost in 2013. Future salaries and general and administrative expenses are expected to continue to decrease as a result of cost reduction efforts taken in the third quarter of 2014.

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Selected financial data

Quarterly information

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

Factors that can cause fluctuations in our quarterly results include the length of the exploration field season at the UKMP Projects, timingmagnitude of property acquisition payments,the exploration program, and stock option vesting, and issuance of shares.vesting. The majority of the field season typically occurs in the third quarter of each year. Other factors that have caused fluctuations in the quarterly results that would not be expected to re-occurreoccur include our incorporation and completion of the spin-out.

During the third quarter of 2012, mineral property expenses of $9.1 million were recorded as a larger exploration program was conducted than previous years. Additionally, stock-based compensation expense of $2.0 million was recognized due to the vesting of previously granted stock options. During the fourth quarter of 2012, mineral property expenses of $3.1 million were recorded for the end of the 2012 field season. Stock-based compensation expense of $1.9 million was also recognized due to the vesting of previously granted stock options. During the first quarter of 2013, we incurred expenses of $4.1 million in stock-based compensation expense due to the vesting of previously granted stock options and the granting of RSUs and DSUs. We also recognized mineral property expenses of $0.8 million related to preparation activities for the 2013 field season and ongoing engineering studies. During the second quarter of 2013, we incurred mineral property expenses of $2.2 million consisting of the start-up of the field season in May 2013 and continuation of engineering studies. We also incurred expenses of $2.0 million in stock-based compensation due to the expense being recorded evenly over the vesting period of previously granted stock options and RSUs. During the third quarter of 2013, mineral property expenses of $4.7 million were recorded as the majority of the exploration program was conducted during the quarter. During the fourth quarter of 2013, stock-based compensation of $1.4 million was recorded due to an acceleration of expense as a result of the cancelling of 5,710,000 stock options during the period. All expense for unvested options was accelerated and included in the fourth quarter of 2013. During the first quarter of 2014, we incurred $0.1 million of stock-based compensation expense due to the prior acceleration of expense in the fourth quarter of 2013. As a result, our loss for the first quarter ended February 28, 2014 is significantly reduced. During the second quarter of 2014, we incurred $0.5 million in mineral property expenses as our field season start-up in 2014 is expected to occuroccurred in July, later than in previous years. As a result, no field season activity costs were incurred in Q2 2014 resulting in a significantly reduced loss of $2.1 million for the second quarter of 2014 compared to previous second quarter losses. During the third quarter of 2014, we incurred mineral property expenses of $0.8 million due to a reduced field season program resulting in a significantly reduced loss of $2.9 million compared to previous third quarter losses. We incurred a one-time severance cost of $1.3 million relating to staff reductions.

Our properties are not yet in production; consequently, we believe that our loss (and consequent loss per common share) is not a primary concern to investors in the Company.

Liquidity and capital resources

At MayAugust 31, 2014, we had $2.1$7.0 million in cash and cash equivalents. At November 30, 2013, we had consolidated cash and cash equivalents of $6.5 million and working capital of $4.7 million. We expended $4.4$6.7 million on operating activities during the sixnine month period ended MayAugust 31, 2014, compared with expenditures of $6.4$12.2 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, salaries, and professional fees. As the exploration field season in the Ambler mining district in 2013 began in May, a significant portion of the mineral property expenses expended during the 2013 fiscal year were incurred during this period. As our project program for 2014 is anticipated to beginwas a significantly smaller field season program than in July,2013, cash expended on mineral property expenses was significantly reduced from the prior year. We did incur a one-time severance charge of $1.3 million during the third quarter of 2014 as a result of staff reductions.

During the sixnine month period ended MayAugust 31, 2014, we raised $0.02$7.2 million from financing activities due toin net proceeds received from the exercisecompletion of NovaGold arrangement options witha private placement in July 2014. There is no comparable amount from financing activities generated in the same period in 2013.

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During the sixnine month period ended MayAugust 31, 2014 we expended minimal cash on investing activities. Equipment purchases consisted of mainly replacement items totaling $0.01 million. With last year’s start-up of field activities during the sixnine month period ended MayAugust 31, 2013, we expended $0.02$0.08 million on equipment to support drill and camp activities. We also moved into office space in April 2013 incurring $0.1 million in information technology and office infrastructure.

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Substantial doubt exists as to the Company’sour ability to continue as a going concern as the continued operations and explorationoperating activities of the Company are dependent on itsour ability to obtain additional financing within the next twelve months. Subsequent to May 31,In July 2014, the Companywe raised gross proceeds of $7.5 million through a private placement which is restricted to fund general and administrative expenses and program expenditures during the next twelve months. The Companymonths from completion of the financing. We will need to raise additional funds to continue operations, and to support the further exploration of itsour projects and administration expenses. Future financings are anticipated through equity financing, debt financing, convertible debt, or other means.Theremeans. There is no assurance that the Companywe will be successful in obtaining additional financing, that sufficient funds will be available to the Company,us, or be available on favourable terms in the future. Factors that could affect the availability of financing include fluctuations in the Company'sour share price, the state of international debt and equity markets, investor perceptions and expectations, global financial and metals markets, and progress on the Company'sour exploration properties.

Contractual obligations

Contractual obligated undiscounted cash flow requirements as at MayAugust 31, 2014 are as follows:

Off-balance sheet arrangements

We have no material off-balance sheet arrangements. On January 25, 2013, we entered into a commitment to lease office space effective May 1, 2013 for a period of four years with a remaining total commitment of $0.5 million.

Outstanding share data

At JulyOctober 7, 2014, we had 60,229,69760,296,365 common shares issued and outstanding. At JulyOctober 7, 2014, we had 6,521,740 warrants with an exercise price of $1.60, 155,0001,741,666 stock options with a weighted-average exercise price of $1.73, 728,763$1.13, 727,097 NovaGold arrangement options with a weighted-average exercise price of $5.40, 422,340$5.17, 337,336 RSUs, 618,191838,350 DSUs, and 20,685 NovaGold DSUs for which the holder is entitled to receive one common share for every six NovaGold shares received outstanding.

New accounting pronouncements

Unless otherwise noted, the following revised standards and amendments are effective for annual periods beginning on or after December 1, 2013 or as noted. The Company isWe are continuing to assess the impact of these standards and amendments or hashave determined whether we will early adopt them, as noted.

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Critical accounting estimates

The most critical accounting estimates upon which our financial status depends are those requiring estimates of the recoverability of our capitalized mineral properties, impairment of long-lived assets and valuation of stock-based compensation.

Mineral properties and development costs

All direct costs related to the acquisition of mineral property interests are capitalized. Mineral property exploration expenditures are expensed when incurred. When it has been established that a mineral deposit is commercially mineable and an economic analysis has been completed in accordance with Industry Guide 7, the costs subsequently incurred to develop a mine on the property prior to the start of mining operations are capitalized and will be amortized against production following commencement of commercial production using the unit of production method over the estimated life of proven and probable reserves.

The acquisition of title to mineral properties is a complicated and uncertain process. NovaCopper has taken steps, in accordance with industry standards, to verify the mineral property in which it has an interest. Although we have made efforts to ensure that legal title to our property is properly recorded, there can be no assurance that such title will ultimately be secured.

Impairment of long-lived assets

Management assesses the possibility of impairment in the carrying value of its long-lived assets whenever events or circumstances indicate that the carrying amounts of the asset or asset group may not be recoverable. Management calculates the estimated undiscounted future net cash flows relating to the asset or asset group using estimated future prices, proven and probable reserves and other mineral resources, and operating, capital and reclamation costs. When the carrying value of an asset exceeds the related undiscounted cash flows, the asset is written down to its estimated fair value, which is usually determined using discounted future cash flows. Management’s estimates of mineral prices, mineral resources, foreign exchange, production levels and operating capital and reclamation costs are subject to risk and uncertainties that may affect the determination of the recoverability of the long-lived asset. It is possible that material changes could occur that may adversely affect Management’s estimates.

Stock-based compensation

Compensation expense for options granted to employees, directors and certain service providers is determined based on estimated fair values of the options at the time of grant using the Black-Scholes option pricing model, which takes into account, as of the grant date, the fair market value of the shares, expected volatility, expected dividend yield and the risk-free interest rate over the expected life of the option. The cost is recognized using the graded attribution method over the vesting period of the respective options. The expense relating to the fair value of stock options is included in expenses and is credited to contributed surplus. Shares are issued from treasury in settlement of options exercised.

Compensation expense for RSUs and DSUs granted to employees and directors, respectively, is determined based on estimated fair values of the units at the time of grant using quoted market prices or at the time the units qualify for equity classification under ASC 718. The cost is recognized using the graded attribution method over the vesting period of the respective units. The expense relating to the fair value of the units is included in expenses and is credited to other liabilities or contributed surplus based on the unit plan’s classification. Units may be settled in either i) cash and/or ii) shares issued from treasury and/or iii) shares purchased in the open market, at the Company’sour election at the time of vesting.

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Additional information

Additional information regarding the Company, including our annual report on Form 10-K, is available on SEDAR atwww.sedar.com and EDGAR atwww.sec.gov and on our website atwww.novacopper.com.

Item 3.Quantitative and Qualitative Disclosures about Market Risk

Our financial instruments are exposed to certain financial risks, including currency risk, credit risk, liquidity risk, interest risk and price risk. Our financial instruments consist of cash and cash equivalents, accounts receivable, deposits, accounts payable and accrued liabilities and amounts due to related parties. Our instruments are held in the normal course to meet daily operating and cash flow needs of the business. The fair value of accounts payable and accrued liabilities and amounts due to related parties approximates their carrying value due to the short-term nature of their maturity. Our other liabilities are held at fair value and are a Level 1 financial instrument valued using quoted market prices. All of our other financial instruments are initially measured at fair value and then held at amortized cost.

(a)    Currency risk

Currency risk is the risk of a fluctuation in financial asset and liability settlement amounts due to a change in foreign exchange rates. We operate in the United States and Canada with some expenses incurred in Canadian dollars. Our exposure is limited to cash of CDN$40,000,291,000, accounts receivable of CDN$34,00018,000 and accounts payable of CDN$180,000.283,000. Based on a 10% change in the US-Canadian exchange rate, assuming all other variables remain constant, our net loss would change by approximately $10,000.$2,000.

(b)    Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet itsour contractual obligations. OurWe hold cash and cash equivalents are all held with Canadian Charteredchartered financial institutions andwhich are composedcomprised of financial instruments issued by Canadian banks. Our accounts receivable consist of HST receivableGST receivables from the Federal Government of Canada amounts due from related parties and receivables due for camp and management services provided to other parties. Our exposure to credit risk is equal to the balance of cash and cash equivalents and accounts receivable as recorded in the financial statements.

(c)    Liquidity risk

Liquidity risk is the risk that we will encounter difficulties raising funds to meet itsour financial obligations as they fall due. We are in the exploration stage and do not have cash inflows from operations; therefore, we manage our liquidity risk through the management of our capital structure and financial leverage. We do expect, based on anticipated but not committed expenditures on itsour projects, we are likely to require financing within the next twelve months. Future financings are expected to be obtained through debt financing, equity financing, convertible debt, exercise of options, or other means. Continued operations are dependent on our ability to obtain additional financing or to generate future cash flows. Our contractually obligated cash flow is disclosed under the section titled “Liquidity and capital resources”.

(d)    Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. We hold excess cash balances in money market funds which are highly liquid which limits the risk of loss due to interest rate changes to $nil.

(e)    Price risk

We are exposed to price risk with respect to commodity prices as future profitability and long-term viability will depend, in large parts,part, on the price of copper, zinc, lead, gold and silver. The market prices for such metals are volatile and subject to numerous factors beyond Management’s control. Management closely monitors commodity prices to determine the appropriate course of action to be taken. We do not have any hedging or other commodity-based risks respecting itsour operations.

As we are currently in the exploration phase, none of our financial instruments are exposed to commodity price risk; however, our ability to obtain long-term financing and our economic viability could be affected by commodity price volatility.

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Item 4.Controls and Procedures

Management, with the participation of our President and Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of MayAugust 31, 2014. On the basis of this review, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our President and Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There have not been any changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated by the SEC under the Exchange Act) during the Company’s most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1.Legal Proceedings

From time to time, we are a party to routine litigation and proceedings that are considered part of the ordinary course of its business. We are not aware of any material current, pending, or threatened litigation.

Item 1A. Risk Factors

There have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended November 30, 2013, as filed with the SEC on January 30, 2014. The risk factors in our Annual Report on Form 10-K for the year ended November 30, 2013, in addition to the other information set forth in this quarterly report, could materially affect our business, financial condition or results of operations. Additional risks and uncertainties not currently known to us or that we deem to be immaterial could also materially adversely affect our business, financial condition or results of operations.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

None.Not Applicable.

Item 3.Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

These disclosures are not applicable to us.

Item 5.Other Information.

None.

Item 6.Exhibits

Exhibits

See Exhibit Index.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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EXHIBIT INDEX