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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended February 28, 2013

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _____ to _____

Commission File Number: 1-35447

NOVACOPPER INC.(Exact Name
of Registrant as Specified in Its Charter)

|British Columbia                         | 98-1006991         
|---------------------------------------- | -------------------
|(State or Other Jurisdiction of          | (I.R.S. Employer   
|Incorporation or Organization)           | Identification No.)
|                                         |                    
|Suite 2300, 200 Granville Street         |                    
|Vancouver, British Columbia              |                    
|Canada                                   | V6C 1S4            
|(Address of Principal Executive Offices) | (Zip Code)         

(604) 638-8088(Registrants Telephone Number,
Including Area Code)

Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]     No [   ]

Indicate by check mark whether
the registrant has submitted electronically and posted on its corporate Web
site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for
such shorter period that the registrant was required to submit and post such
files). 
Yes [X]     No [   ]

Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated filer and smaller reporting company
in Rule 12b-2 of the Exchange Act. (Check one):

|Large accelerated filer [   ] | Accelerated filer [X] | Non-accelerated filer [   ]          | Smaller reporting company [   ]
|----------------------------- | --------------------- | ------------------------------------ | -------------------------------
|                              |                       | (Do not check if a smaller reporting |                                
|                              |                       | company)                             |                                

Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). 
Yes [   ]     No [X]

As of April 8, 2013, the registrant had 52,769,226 Common
Shares, no par value, outstanding.

---

NOVACOPPER INC.

TABLE OF CONTENTS

|                                     |                                                                                             | Page
|------------------------------------ | ------------------------------------------------------------------------------------------- | ----
|                                     |                                                                                             |     
|PART I -
      FINANCIAL INFORMATION | 1                                                                                          
|                                     |                                                                                             |     
|Item 1.                              | Financial
      Statements                                                                  | 1   
|Item 2.                              | Managements Discussion and
      Analysis of Financial Condition and Results of Operations | 15  
|Item 3.                              | Quantitative
      and Qualitative Disclosures about Market Risk                            | 25  
|Item 4.                              | Controls and Procedures                                                                     | 25  
|                                     |                                                                                             |     
|PART II - OTHER INFORMATION          | 27                                                                                         
|                                     |                                                                                             |     
|Item 1.                              | Legal Proceedings                                                                           | 27  
|Item 1A.                             | Risk Factors                                                                                | 27  
|Item 2.                              | Unregistered Sales of Equity
      Securities and Use of Proceeds                           | 27  
|Item 3.                              | Defaults
      Upon Senior Securities                                                       | 27  
|Item 4.                              | Mine Safety Disclosures                                                                     | 27  
|Item 5.                              | Other
      Information                                                                     | 27  
|Item 6.                              | Exhibits                                                                                    | 27  

ii

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

NovaCopper Inc.(An Exploration-Stage
Company)Consolidated Balance Sheets(unaudited)

|in
      thousands of dollars                                                                                           | 
|----------------------------------------------------------------------------------------------------------------------- | 
|                                                                                                                        | 
|                                                                                                                        | 
|                                                                                                                        | 
|Assets                                                                                                                  | 
|Current assets                                                                                                          | 
|Cash and cash equivalents                                                                                               | 
|Accounts receivable                                                                                                     | 
|Deposits and prepaid amounts                                                                                            | 
|                                                                                                                        | 
|                                                                                                                        | 
|Plant and equipment (note 3)                                                                                            | 
|Mineral properties and development costs
      (note 4)                                                                 | 
|                                                                                                                        | 
|Liabilities                                                                                                             | 
|Current liabilities                                                                                                     | 
|Accounts payable and accrued liabilities (note 5)                                                                       | 
|Due to related parties (note 6)                                                                                         | 
|Other liabilities (note 7)                                                                                              | 
|                                                                                                                        | 
|                                                                                                                        | 
|Other liabilities (note 7)                                                                                              | 
|                                                                                                                        | 
|                                                                                                                        | 
|Shareholders equity                                                                                                    | 
|Share capital (note 8)  unlimited common shares authorized,
      no par value Issued  52,757,511 (2012  46,665,069) | 
|Contributed surplus (note 8)                                                                                            | 
|Contributed surplus  stock-based compensation (note 8(a,b))                                                            | 
|Deficit accumulated during the exploration
      stage                                                                  | 
|                                                                                                                        | 
|                                                                                                                        | 

Nature of operations, liquidity, structure and plan of
arrangement(note 1) Commitments(note 8, 11)

(See accompanying notes to the interim consolidated financial
statements)

|/s/ Rick Van
      Nieuwenhuyse, Director    |  | /s/
      Terry Krepiakevich, Director
|-------------------------------------------- |  | --------------------------------------
|Approved on behalf of the Board of Directors |  |                                       

1

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NovaCopper Inc.(An Exploration-Stage
Company)Consolidated Statements of Loss and Comprehensive
Loss(unaudited)

|                                                                 |   | in thousands of dollars, except share and per share
      amounts |  
|---------------------------------------------------------------- | - | ----------------------------------------------------------------- | -
|                                                                 |   | For the three                                                     |  
|                                                                 |   | months ended                                                      |  
|                                                                 |   | February 28, 2013                                                 |  
|                                                                 |   | **$**                                                             |  
|Expenses                                                         |   |                                                                   |  
|Amortization                                                     |   | 250                                                               |  
|Corporate development                                            |   | 104                                                               |  
|Foreign exchange gain                                            |   | (24                                                               | )
|General and administrative                                       |   | 548                                                               |  
|Mineral properties expense (note 4(c))                           |   | 802                                                               |  
|Professional fees                                                |   | 299                                                               |  
|Salaries                                                         |   | 549                                                               |  
|Salaries  stock-based compensation (note
      7, 8(a) and (b)) |   | 4,113                                                             |  
|Total expenses                                                   |   | 6,640                                                             |  
|Other items                                                      |   |                                                                   |  
|Accretion expense                                                |   | -                                                                 |  
|Loss on disposal of equipment                                    |   | -                                                                 |  
|Interest and other income                                        |   | (14                                                               | )
|Loss and comprehensive loss for the
      period                 |   | (6,626                                                            | )
|                                                                 |   |                                                                   |  
|Basic and diluted loss per common
      share                    | $ | 0.13                                                              |  
|Weighted average number of common
      shares outstanding       |   | 50,573,980                                                        |  

Nature of operations, liquidity, structure and plan of
arrangement(note 1)

(See accompanying notes to the interim consolidated financial
statements)

2

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NovaCopper Inc.(An Exploration-Stage
Company)Consolidated Statements of Changes in Shareholders
EquityFor the three months ended(unaudited)

|                                                                    |  | in thousands of dollars, except share amounts | 
|------------------------------------------------------------------- |  | --------------------------------------------- | 
|                                                                    |  |                                               | 
|                                                                    |  | Number of shares                              | 
|                                                                    |  |                                               | 
|Share capital                                                       |  |                                               | 
|Balance  beginning of period                                       |  | 46,665,069                                    | 
|Issued on vesting of performance share units (note 8)               |  | 14,180                                        | 
|Issued on exercise of warrants (note 8)                             |  | 6,088,262                                     | 
|Balance  end of period                                             |  | 52,767,511                                    | 
|Contributed surplus                                                 |  |                                               | 
|Balance  beginning of period                                       |  |                                               | 
|Transfer to share capital on vesting of performance share units     |  |                                               | 
|Transfer to share capital exercise of
      warrants                |  |                                               | 
|Balance  end of period                                             |  |                                               | 
|Contributed surplus  stock-based compensation                      |  |                                               | 
|Balance  beginning of period                                       |  |                                               | 
|Stock-based compensation (note 8(a) and
      (b))                  |  |                                               | 
|Balance  end of period                                             |  |                                               | 
|Deficit                                                             |  |                                               | 
|Balance  beginning of period                                       |  |                                               | 
|Loss for the period                                                 |  |                                               | 
|Balance  end of period                                             |  |                                               | 
|Total shareholders equity                                          |  |                                               | 
|                                                                    |  |                                               | 
|                                                                    |  | in thousands of dollars, except share amounts | 
|                                                                    |  |                                               | 
|                                                                    |  | Number of shares                              | 
|                                                                    |  |                                               | 
|Share capital                                                       |  |                                               | 
|Balance  beginning of period                                       |  | 200                                           | 
|Balance  end of period                                             |  | 200                                           | 
|Contributed surplus                                                 |  |                                               | 
|Balance  beginning of period                                       |  |                                               | 
|Funding provided and expenses paid by
      NovaGold Resources Inc. |  |                                               | 
|Balance  end of period                                             |  |                                               | 
|Deficit                                                             |  |                                               | 
|Balance  beginning of period                                       |  |                                               | 
|Loss for the period                                                 |  |                                               | 
|Balance  end of period                                             |  |                                               | 
|Total shareholders equity                                          |  |                                               | 

(See accompanying notes to the interim consolidated financial
statements)

3

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NovaCopper Inc.(An Exploration-Stage
Company)Consolidated Statements of Cash
Flows(unaudited)

|                                                                                              |  | in thousands of dollars |  
|--------------------------------------------------------------------------------------------- |  | ----------------------- | -
|                                                                                              |  | For the three           |  
|                                                                                              |  | months ended            |  
|                                                                                              |  | February 28, 2013       |  
|                                                                                              |  | **$**                   |  
|Cash flows used in operating activities                                                       |  |                         |  
|Loss for the period                                                                           |  | (6,626                  | )
|Items not affecting cash                                                                      |  |                         |  
|Amortization                                                                                  |  | 250                     |  
|Accretion                                                                                     |  | -                       |  
|Loss on disposal of equipment                                                                 |  | -                       |  
|Issuance of shares as compensation                                                            |  | -                       |  
|Stock-based compensation                                                                      |  | 4,113                   |  
|Unrealized foreign exchange                                                                   |  | (80                     | )
|Net change in non-cash working capital                                                        |  |                         |  
|Decrease (increase) in accounts receivable                                                    |  | 64                      |  
|Decrease (increase) in deposits and prepaid
      amounts                                     |  | 46                      |  
|(Decrease) increase in
      accounts payable, accrued liabilities and due to related parties |  | (1,259                  | )
|                                                                                              |  | (3,492                  | )
|Cash flows from financing activities                                                          |  |                         |  
|Funding provided by NovaGold on the completion of the Plan of
      Arrangement               |  | -                       |  
|Funding provided and expenses paid by NovaGold                                                |  | -                       |  
|Repayment of notes payable                                                                    |  | -                       |  
|                                                                                              |  | -                       |  
|Cash flows used in investing activities                                                       |  |                         |  
|Acquisition of plant & equipment                                                              |  | (14                     | )
|Expenditures on mineral properties                                                            |  | -                       |  
|                                                                                              |  | (14                     | )
|Increase in cash and cash equivalents                                                         |  | (3,506                  | )
|Cash and cash equivalents  beginning of
      period                                         |  | 22,244                  |  
|Cash and cash equivalents  end of
      period                                               |  | 18,738                  |  

Nature of operations, liquidity, structure and plan of
arrangement(note 1)

(See accompanying notes to the interim consolidated financial
statements)

4

---

NovaCopper Inc.(An Exploration-Stage
Company)Notes to the Consolidated Financial Statements

1     Nature of operations,
liquidity, structure and plan of arrangement

NovaCopper Inc. (NovaCopper or the Company) was
incorporated in British Columbia under the Business Corporations Act (BC)on April 27, 2011. The Company is engaged in the exploration and development
of mineral properties including the Arctic and Bornite Projects located in
Northwest Alaska in the United States of America (US).

Structure and plan of arrangement

The Ambler lands are comprised of the
copper-zinc-lead-gold-silver Arctic Project and other mineralized targets within
a 65 kilometer long volcanogenic massive sulfide belt. On January 11, 2010,
Alaska Gold Company (AGC), a wholly owned subsidiary of NovaGold Resources
Inc. (NovaGold), purchased 100% of the Ambler lands for consideration of $29
million. The Ambler lands were acquired on October 17, 2011 by NovaCopper US
Inc. (NovaCopper US) through a purchase and sale agreement with AGC. On
October 24, 2011, NovaGold transferred its ownership of NovaCopper US to
NovaCopper, then a wholly owned subsidiary of NovaGold, in exchange for 100
shares of NovaCopper, with an ascribed value of $27.3 million (note 8).

On October 19, 2011, NovaCopper US acquired the exclusive right
to explore the Bornite lands and lands deeded to NANA Regional Corporation, Inc.
(NANA) through the Alaska Native Claims Settlement Act (ANCSA) located
adjacent to the Ambler lands to create the Upper Kobuk Mineral Projects (UKMP
Projects).

Where applicable, these consolidated financial statements
reflect the balance sheet, statements of loss, comprehensive loss and deficit
and cash flows of the Arctic Project as if NovaCopper had been an independent
operation from inception. The statements of loss, comprehensive loss and deficit
for the three months ended February 29, 2012 include direct general and
administrative and exploration costs of the Arctic Project and an allocation of
NovaGolds general and administrative costs incurred. NovaGold has historically
provided corporate services to the Arctic Project, including executive
oversight, information technology, technical expertise, accounting, tax,
treasury, human resources and other services. The allocation of general and
administrative costs to the Arctic Project was calculated on the basis of time
committed by NovaGold staff to AGC and the ratio of expenses incurred on the
Arctic Project in the period presented as compared to all costs incurred by AGC
in the respective period.

The Arctic Projects opening deficit has been calculated by
applying the same allocation principles described above to the cumulative
transactions relating to the project from the date of its initial option in 2004
and includes an allocation of NovaGolds general and administrative expenses
from the date of acquisition. Prior to the acquisition in 2010, NovaGold held an
option to earn a 51% interest in the property which was terminated upon entering
into the purchase and sale agreement. All historical spending prior to April 30,
2012 was funded by NovaGold.

In April 2012, NovaCopper Inc. was listed on the Toronto Stock
Exchange and the NYSE-MKT (previously NYSE-AMEX) under the symbol NCQ
following a positive vote from the shareholders of NovaGold to distribute the
shares of NovaCopper, a wholly owned subsidiary, to the shareholders of NovaGold
as a return of capital by way of a Plan of Arrangement (the Plan of
Arrangement).

Liquidity

These financial statements have been prepared on a going
concern basis, which assumes that the Company will be able to realize its assets
and discharge its liabilities in the normal course of business. As at February
28, 2013, the Company had consolidated cash of $18.7 million and working capital
of $16.8 million. Based on anticipated but not committed expenditures on its
projects, the Company is likely to require financing within the next twelve to
fifteen months. Future financings are anticipated through debt financing, equity
financing, convertible debt, exercise of options, or other means. The continued operations of the
Company are dependent on its ability to obtain additional financing or to
generate future cash flows.

5

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2     Summary of significant
accounting policies

Basis of presentation

These consolidated financial statements have been prepared
using accounting principles generally accepted in the United States (U.S.
GAAP) and include the accounts of NovaCopper Inc. and its wholly-owned
subsidiary, NovaCopper US Inc. All significant intercompany transactions are
eliminated on consolidation. These financial statements were approved by the
Companys Audit Committee on behalf of the Board of Directors for issue on April
5, 2013.

The unaudited interim consolidated financial statements include
all adjustments of a normal recurring nature necessary for the fair presentation
of our financial position as of February 28, 2013, our results of operations for
the three months ended February 28, 2013 and February 29, 2012, and our cash
flows for the three months ended February 28, 2013 and February 29, 2012. The
results of operations for the three months ended February 28, 2013 are not
necessarily indicative of the results to be expected for the year ending
November 30, 2013.

As these interim consolidated financial statements do not
contain all of the disclosures required by U.S. GAAP for annual financial
statements, these unaudited interim consolidated financial statements should be
read in conjunction with the annual financial statements and related notes
included in our Annual Report on Form 10-K for the fiscal year ended November
30, 2012 filed with the U.S. Securities and Exchange Commission (SEC) on
February 12, 2013.

All figures are in United States dollars unless otherwise
noted.

Financial instruments

Held-for-trading financial assets and liabilities are recorded
at fair value as determined by active market prices and valuation models, as
appropriate. Valuation models require the use of assumptions concerning the
amount and timing of estimated future cash flows and discount rates. In
determining these assumptions, Management uses readily observable market inputs
where available or, where not available, inputs generated by Management. Changes
in fair value of held-for-trading financial instruments are recorded in income
or loss for the period. Held-for-trading financial liabilities consist of other
liabilities. The Company has no held-for-trading financial assets.

Available-for-sale financial assets are recorded at fair value
as determined by active market prices. Unrealized gains and losses on
available-for-sale investments are recognized in other comprehensive income. If
a decline in fair value is deemed to be other than temporary, the unrealized
loss is recognized in net earnings. Investments in equity instruments that do
not have an active quoted market price are measured at cost. The Company has no
available-for-sale financial assets.

Loans and receivables are recorded initially at fair value, net
of transaction costs incurred, and subsequently at amortized cost using the
effective interest rate method. Loans and receivables consist of cash and cash
equivalents, accounts receivable, and deposits.

Other financial liabilities are recorded initially at fair
value and subsequently at amortized cost using the effective interest rate
method. Other financial liabilities include accounts payable and accrued
liabilities, and due to related parties.

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.

6

---

Compensation expense for restricted share units and deferred
share units 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 and updated at each period end until the unit vests. 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. Units may be settled
in either i) cash or ii) subject to approval by shareholders, shares issued from
treasury, at the Companys election at the time of vesting.

Recent accounting pronouncements

|i.  | Offsetting assets and liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | In January 2013, the FASB issued Clarifying the Scope of
      Disclosures about Offsetting Assets and Liabilities (ASU 2013-01). ASU
      2013-01 clarifies Accounting Standards Update No. 2011-11: Disclosures
      about Offsetting Assets and Liabilities (ASU 2011-11) to restrict the
      scope of implementation to derivatives accounted for under Topic 815,
      Derivatives and Hedging, which includes bifurcated embedded derivatives
      repurchase agreements and reverse repurchase agreements, and securities
      borrowing and lending transactions that require an offset or are subject
      to an enforceable master netting arrangement. ASU 2013-01 is effective for
      fiscal years, and interim periods within those years, beginning on or
      after January 1, 2013 (year ending November 30, 2014 for the Company). We
      do not expect the adoption of ASU 2013-01 to have a material impact on our
      results of operations, financial condition, or cash flows.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|ii. | Comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | In December 2011, the FASB issued Comprehensive Income 
      Deferral of the Effective Date for Amendments to the Presentation of
      Reclassifications of Items out of Accumulated Other Comprehensive Income
      in Accounting Standards Update No. 2011-05 (ASU 2011-12). ASU 2011-12
      defers changes in Update 2011-05 that relate to the presentation of
      reclassification adjustments. ASU 2011-12 is effective for fiscal years,
      and interim periods within those years, beginning after December 15, 2011
      (year ending November 30, 2013 for the Company). The adoption of ASU
      2011-12 did not have a material impact on our results of operations,
      financial condition, or cash flows.                                                                                                                                                                                                                                                                                 

3     Plant and
equipment

|                        |  | in thousands of dollars | 
|----------------------- |  | ----------------------- | 
|                        |  |                         | 
|                        |  |                         | 
|                        |  | Cost                    | 
|Alaska, USA             |  | **$**                   | 
|                        |  |                         | 
|Machinery and equipment |  | 2,832                   | 
|Vehicles                |  | 201                     | 
|Computer hardware       |  | 44                      | 
|                        |  | 3,077                   | 

7

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|                        |  | in thousands of dollars | 
|----------------------- |  | ----------------------- | 
|November 30, 2012       | 
|                        |  |                         | 
|                        |  | Cost                    | 
|Alaska, USA             |  | **$**                   | 
|                        |  |                         | 
|Machinery and equipment |  | 2,831                   | 
|Vehicles                |  | 201                     | 
|Computer hardware       |  | 31                      | 
|                        |  | 3,063                   | 

4     Mineral properties and
development costs

|            |  | in thousands of dollars | 
|----------- |  | ----------------------- | 
|            |  | November 30, 2012       | 
|Alaska, USA |  | **$**                   | 
|Ambler (a)  |  | 26,586                  | 
|Bornite (b) |  | 4,000                   | 
|            |  | 30,586                  | 

|            |  | in thousands of dollars | 
|----------- |  | ----------------------- | 
|            |  | November 30, 2011       | 
|Alaska, USA |  | **$**                   | 
|Ambler (a)  |  | 26,547                  | 
|Bornite (b) |  | 4,000                   | 
|            |  | 30,547                  | 

|(a) | Ambler                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | On January 11, 2010, NovaGold, through its wholly-owned
      subsidiary AGC, purchased 100% of the Ambler lands in Northwest Alaska,
      which contains the copper-zinc-lead-gold-silver Arctic Project and other
      mineralized targets within the volcanogenic massive sulfide belt. As
      consideration, NovaGold, issued 931,098 shares with a fair value of $5.0
      million and agreed to make cash payments to the vendor of $12.0 million
      each in January 2011 and January 2012, respectively, for total
      consideration of $29.0 million. The fair value of these cash payments were
      $11.1 million and $10.3 million, respectively, at the transaction date
      valued using a discount rate of approximately 8%. The January 2011 payment
      was made by NovaGold on January 7, 2011 and the January 2012 payment was
      made by NovaGold in advance 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.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | Prior to the acquisition in 2010, NovaGold held an option
      to earn a 51% interest in the property which was terminated upon entering
      into the purchase and sale agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | As discussed in note 1, the property was acquired on
      October 17, 2011 by NovaCopper US through a purchase and sale agreement
      with AGC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(b) | Bornite                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | On October 19, 2011, NovaCopper US acquired the exclusive
      right to explore the Bornite lands and lands deeded to NANA through the
      ANCSA, located adjacent to the Ambler lands in Northwest Alaska. As
      consideration, NovaCopper US paid $4 million to acquire the right to
      explore and develop the combined Upper Kobuk Mineral Projects through an
      Exploration Agreement and Option to Lease with NANA. Upon the decision to
      proceed with development of a mine on the lands, NANA maintains the right
      to purchase between a 16%-25% ownership interest in the mine 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, consideration will be payable equal to
      all historical costs incurred on the properties at
the elected percentage purchased less $40 million, not to be
      less than zero. The parties would form a joint venture and be responsible
      for all future costs, including capital costs of the mine based on their
    pro-rata share.                                                      

8

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|    | NANA would also be granted a net smelter return royalty
      of between 1% and 2.5% upon the execution of a mining lease or a surface
      use agreement, the percent which is determined by the classification of
      land from which production originates.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                  
|(c) | Mineral properties expense                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                  
|    | The following table summarizes mineral properties expense
      for the three months ended February 28, 2013 and February 29,
  2012.                                                                                                                            

|                            |  | *in thousands of dollars* | 
|--------------------------- |  | ------------------------- | 
|                            |  | Three months ended        | 
|                            |  | February 28, 2013         | 
|                            |  | **$**                     | 
|Community                   |  | 75                        | 
|Engineering                 |  | 130                       | 
|Environmental               |  | -                         | 
|Geochemistry and geophysics |  | 49                        | 
|Land and permitting         |  | 58                        | 
|Project support             |  | 92                        | 
|Wages and benefits          |  | 398                       | 
|Mineral property expense    |  | 802                       | 

Indirect project support expenses consist of expenses such as
fixed wing charters, helicopter support, fuel, and other camp operation costs.
Cumulative mineral properties expense from the initial earn-in agreement on the
property in 2004 to February 28, 2013 is $43.2 million.

5     Accounts payable and
accrued liabilities

|                                               |  | in thousands of dollars | 
|---------------------------------------------- |  | ----------------------- | 
|                                               |  | February 28, 2013       | 
|                                               |  | **$**                   | 
|Trade accounts payable                         |  | 130                     | 
|Accrued liabilities                            |  | 365                     | 
|Accrued salaries and vacation                  |  | 121                     | 
|Accounts payable and accrued
      liabilities |  | 616                     | 

6     Related
parties

Expenses to April 30, 2012 were funded by NovaGold and its
subsidiaries. NovaGold is a company with directors in common. During the three
months ended February 28, 2013, NovaGold and its subsidiaries provided
management and office services totaling $100,000 to the Company, including rent
and office expenses pursuant to a Services Agreement.

During the three months ended February 28, 2013, the Company
provided exploration and management services in the amount of $69,000 to
NovaGold under the Services Agreement.

The Company had accounts receivable of $15,000 at February 28,
2013 due from NovaGold. The Company had payables of $98,000 at February 28, 2013
and $127,000 at November 30, 2012 due to NovaGold and its subsidiaries.

9

---

7     Other
liabilities

On November 29, 2012, the Board of Directors approved a
Restricted Share Unit Plan (RSU Plan) and a Deferred Share Unit Plan (DSU
Plan) to provide long-term incentives to employees and directors. The RSU and
DSU Plans may be settled in cash or, subject to shareholder approval, common
shares, at the Companys election with each Restricted Share Unit (RSU) and
Deferred Share Unit (DSU) entitling the holder to receive one common share.

Under Accounting Standards Codification (ASC) 718, the units
are measured at fair value at the time of grant and recognized over the service
period as stock-based compensation expense using the graded attribution method.
The RSU and DSU Plans allow for the units to be settled in cash or, subject to
shareholder approval, common shares, at the Companys election. At the current
time, the Company does not have the ability to deliver common shares, and as
such, recognizes the RSU and DSU plans as a liability, marked-to-market at each
period end until the time of vesting. If the Company does have the ability to
deliver common shares in the future, the RSU and DSU plans may change to an
equity-classified share compensation arrangement. At that time, the plans would
be reflected in equity as contributed surplus based on the then current fair
value.

On December 5, 2012, 1,295,500 RSUs were granted to employees
vesting equally in thirds on June 5, 2013, December 5, 2013, and December 5,
2014. 750,000 DSUs were granted to directors credited to account immediately to
be paid out at the time of retirement from NovaCopper.

A summary of the Companys unit plans and changes during the
period ended is as follows:

|                              |  | February 28,
      2013 | 
|----------------------------- |  | ----------------------- | 
|                              |  | Number of RSUs          | 
|Balance  beginning of period |  | -                       | 
|Granted                       |  | 1,295,500               | 
|Balance  end of period       |  | 1,295,500               | 

The fair value of the units recognized in the period has been
estimated using the quoted market price of the Companys shares at period
end.

For the period ended February 28, 2013, NovaCopper recognized a
stock-based compensation charge of $2.2 million for units granted to directors
($1.5 million) and employees ($0.7 million), net of forfeitures.

8     Share capital

Authorized: unlimited common shares, no par value

|                                                |  | in thousands of dollars, except share amounts | 
|----------------------------------------------- |  | --------------------------------------------- | 
|                                                |  | Number of shares                              | 
|                                                |  |                                               | 
|November 30, 2011                               |  | 200                                           | 
|Issued pursuant to Plan of Arrangement          |  | 46,577,878                                    | 
|Issued pursuant to employment agreement         |  | 76,005                                        | 
|Issued on exercise of options                   |  | 10,986                                        | 
|November 30, 2012                               |  | 46,665,069                                    | 
|Issued on vesting of performance share units    |  | 14,180                                        | 
|Issued on exercise of warrants                  |  | 6,088,262                                     | 
|February 28, 2013, issued and
      outstanding |  | 52,767,511                                    | 

On March 28, 2012, the shareholders of NovaGold approved the
Plan of Arrangement in which NovaGold would distribute its interest in
NovaCopper to its shareholders on the basis that each shareholder would receive
one share in NovaCopper for every six shares of NovaGold held on the record
date. As part of the Plan of Arrangement, the Company split its then issued and
outstanding shares into 46,578,078 common shares. On April 30, 2012 (the
Effective Date), the Plan of Arrangement became effective and the Company
distributed a total of 46,578,078 common shares, including the 200 shares held
by NovaGold, to shareholders of record of NovaGold as at the close of business on April 27, 2012. The value of $64.5 million
attributed to the common shares distributed on the spin-out is the historical
value expended by NovaGold on the Upper Kobuk Mineral Projects.

10

---

Under the Plan of Arrangement, NovaCopper committed to issue up
to 6,181,352 common shares to satisfy holders of NovaGold warrants, performance
share units and deferred shares units (NovaGold DSUs) on record as of the
close of business April 27, 2012 on the same basis as NovaGold shareholders
under the Plan of Arrangement. When a warrant is exercised or a unit becomes
vested, NovaCopper has committed to deliver one common share to the holder for
every six shares of NovaGold the holder is entitled to receive, round down to
the nearest whole number. An amount of $12.2 million was recorded in contributed
surplus representing a pro-rated amount of the historical NovaGold investment
based on the fully diluted number of common shares at the time the Arrangement
became effective.

During the period ended February 28, 2013, the Company issued
14,180 common shares in settlement of NovaGold performance share units
(NovaGold PSUs) which vested on December 3, 2012. The Company issued 6,088,262
common shares upon the exercise of NovaGold warrants by various holders during
the period. The Company received no proceeds from the vesting and exercise of
these instruments. $12.0 million was reclassified to share capital to reflect
the issuance of common shares for these instruments.

As of February 28, 2013, 120,000 NovaGold PSUs of which the
NovaGold shares that may be issued vary between 0% and 150% of the number of
NovaGold PSUs granted, and 24,833 NovaGold DSUs are outstanding.

(a) Stock options

During the period ended February 28, 2013, 35,000 options at a
weighted average fair value of $0.72 were granted to new employees exercisable
for a period of five years with various vesting terms between one and two years.

The fair value of the stock options recognized in the period
has been estimated using an option pricing model. Assumptions used in the
pricing model for the period are as provided below.

|                                |  | February 28, 2013 | 
|------------------------------- |  | ----------------- | 
|Average risk-free interest rate |  | 1.1-1.2%          | 
|Exercise price                  |  | CDN$1.97-2.00     | 
|Expected life                   |  | 3.0 years         | 
|Expected volatility             |  | 56.2-57.7%        | 
|Expected dividends              |  | Nil               | 

The Black-Scholes and other option pricing models require the
input of highly subjective assumptions. As NovaCopper has no history of granting
stock options prior to April 30, 2012, the Company considered historical
information from NovaGold in estimating the expected life of the options granted
during the period. Further, volatility was estimated based upon historical price
observations of NovaGold over the expected term of the options.

For the period ended February 28, 2013, NovaCopper recognized a
stock-based compensation charge of $1.9 million for options granted to
directors, employees and services providers, net of forfeitures.

11

---

A summary of the Companys stock option plan and changes during
the period ended is as follows:

|                              |  | February 28,
      2013 |  
|----------------------------- |  | ----------------------- | -
|                              |  |                         |  
|                              |  |                         |  
|                              |  | Number of options       |  
|Balance  beginning of period |  | 6,064,994               |  
|Granted                       |  | 35,000                  |  
|Forfeited                     |  | (75,001                 | )
|Balance  end of period       |  | 6,024,993               |  

The following table summarizes information about the stock
options outstanding at February 28, 2013.

|                     |  |             |  |  | Stock options -
      outstanding |  |  | Stock options -
      exercisable | 
|-------------------- |  | ----------- |  |  | --------------------------------- |  |  | --------------------------------- | 
|                     |  |             |  |  |                                   |  |  | Weighted                          | 
|                     |  | Number of   |  |  | Weighted                          |  |  | average                           | 
|                     |  | outstanding |  |  | average years                     |  |  | exercise price                    | 
|Range of
      price |  | options     |  |  | to
      expiry                   |  |  | **$**                             | 
|$ 1.72 to $ 2.99     |  | 135,000     |  |  | 4.53                              |  |  | 1.77                              | 
|$ 3.00 to $ 3.99     |  | 5,889,993   |  |  | 4.18                              |  |  | 3.02                              | 
|                     |  | 6,024,993   |  |  | 4.19                              |  |  | 2.99                              | 

(b) NovaGold Arrangement Options

Under the Plan of Arrangement, holders of NovaGold stock
options received one option in NovaCopper for every six options held in NovaGold
(NovaGold Arrangement Options). The exercise price of the options in
NovaCopper was determined based on the relative fair values of NovaCopper and
NovaGold based on the volume weighted-average trading prices on the Toronto
Stock Exchange for the five trading days commencing on the sixth trading day
following the Effective Date. All other terms of the options remained the same.
A total of 2,189,040 options to acquire NovaCopper shares were granted under the
Plan of Arrangement on April 30, 2012. No future stock options granted by
NovaGold are subject to the Plan of Arrangement.

For the period ended February 28, 2013, NovaCopper recognized a
stock-based compensation charge of $0.04 million for NovaGold Arrangement
Options, net of forfeitures.

A summary of the NovaGold Arrangement Options and changes
during the period ended is as follows:

|                              |  | February 28,
      2013 |  
|----------------------------- |  | ----------------------- | -
|                              |  |                         |  
|                              |  |                         |  
|                              |  | Number of options       |  
|Balance  beginning of period |  | 2,076,541               |  
|Forfeited                     |  | (19,981                 | )
|Balance  end of period       |  | 2,056,560               |  

The following table summarizes information about the NovaGold
Arrangement Options outstanding at February 28, 2013.

|                     |  |             |  |  | Stock options -
      outstanding |  |  | Stock options -
      exercisable | 
|-------------------- |  | ----------- |  |  | --------------------------------- |  |  | --------------------------------- | 
|                     |  |             |  |  |                                   |  |  | Weighted                          | 
|                     |  | Number of   |  |  | Weighted                          |  |  | average                           | 
|                     |  | outstanding |  |  | average years                     |  |  | exercise price                    | 
|Range of
      price |  | options     |  |  | to
      expiry                   |  |  | **$**                             | 
|$ 0.54 to $ 1.99     |  | 350,214     |  |  | 0.67                              |  |  | 1.28                              | 
|$ 2.00 to $ 3.99     |  | 765,704     |  |  | 1.50                              |  |  | 3.00                              | 
|$ 4.00 to $ 5.99     |  | 621,367     |  |  | 3.69                              |  |  | 5.22                              | 
|$ 6.00 to $ 7.99     |  | 289,277     |  |  | 2.87                              |  |  | 7.35                              | 
|$ 8.00 to $10.60     |  | 29,998      |  |  | 4.22                              |  |  | 8.62                              | 
|                     |  | 2,056,560   |  |  | 2.25                              |  |  | 4.07                              | 

12

---

9     Management of capital
risk

The Company relies upon management to manage capital in order
to accomplish the objectives of safeguarding the Companys ability to continue
as a going concern in order to pursue the development of its mineral properties
and maintain a capital structure which optimizes the costs of capital at an
acceptable risk (note 1 - liquidity). The Companys current capital consists of
equity funding through capital markets and funding received from its prior
owner, NovaGold, prior to its public listing.

As the Company is currently in the exploration phase none of
its financial instruments are exposed to commodity price risk; however, the
Companys ability to obtain long-term financing and its economic viability may
be affected by commodity price volatility.

To facilitate the management of its capital requirements, the
Company prepares annual expenditure budgets that are updated as necessary
depending on various factors, including successful capital deployment and
general industry conditions.

10   Financial instruments

The Company is exposed to a variety of risks arising from
financial instruments. These risks and Managements objectives, policies and
procedures for managing these risks are disclosed as follows.

The Companys financial instruments consist of cash and cash
equivalents, accounts receivable, deposits, accounts payable and accrued
liabilities, due to related parties, and other liabilities. The fair value of
accounts payable and accrued liabilities and due to related parties approximates
their carrying value due to the short-term nature of their maturity.

The Companys other liabilities are held at fair value and are
a Level 1 financial instrument valued using quoted market prices. All of the
Companys other financial instruments are initially measured at fair value and
then held at amortized cost.

Financial risk management

The Companys activities expose them to certain financial
risks, including currency risk, credit risk, liquidity risk, interest risk and
price risk.

(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. The
Company operates in the United States and Canada with some expenses incurred in
Canadian dollars. The Companys exposure is limited to cash of CDN$941,000,
accounts receivable of CDN$15,000 and accounts payable of CDN$475,000. Based on
a 10% change in the US-Canadian exchange rate, assuming all other variables
remain constant, the Companys net loss would change by approximately
$43,000.

(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 its contractual obligations.
The Company holds cash and cash equivalents with Canadian Chartered financial
institutions which are composed of financial instruments issued by Canadian
banks. The Companys accounts receivable consist of HST receivable from the
Federal Government of Canada, amounts due from related parties and receivables
due for camp and management services provided to other parties. The Companys
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 the Company will encounter
difficulties raising funds to meet its financial obligations as they fall due.
The Company is in the exploration stage and does not have cash inflows from
operations; therefore, the Company manages liquidity risk through the management of
its capital structure and financial leverage as outlined in notes 1 and 9 to the
consolidated financial statements.

13

---

Contractually obligated cash flow requirements as at February
28, 2013 are as follows.

|                                         |  | in thousands of dollars | 
|---------------------------------------- |  | ----------------------- | 
|                                         |  | Total                   | 
|                                         |  | **$**                   | 
|Accounts payable and accrued liabilities |  | 616                     | 
|Due to related parties                   |  | 98                      | 
|Office lease                             |  | 758                     | 
|                                         |  | 1,472                   | 

(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. The Company holds excess cash balances in money market funds
which limits the risk of loss due to interest rate changes to $nil.

11  Commitments

On January 25, 2013, the Company entered into a commitment to
lease office space effective May 1, 2013 for a period of four years. The future
minimum lease payments as at February 28, 2013 are approximately as follows.

|in
      thousands of Canadian dollars | 
|-------------------------------------- | 
|                                       | 
|                                       | 
|2013                                   | 
|2014                                   | 
|2015                                   | 
|2016                                   | 
|2017                                   | 
|Total                                  | 

14

---

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

General

This Managements Discussion and Analysis (MD&A) of
NovaCopper Inc. (NovaCopper or the Company) is dated April 8, 2013 and
provides an analysis of NovaCoppers unaudited interim consolidated financial
results for the quarter ended February 28, 2013 compared to the quarter ended
February 29, 2012.

The following information should be read in conjunction with
our February 28, 2013 unaudited interim consolidated financial statements and
related notes which were prepared in accordance with accounting principles
generally accepted in the United States (U.S. GAAP). The MD&A should also
be read in conjunction with the Companys audited consolidated financial
statements and related notes for the year ended November 30, 2012. 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.

Scott Petsel, P.Geo., an employee, Upper Kobuk Mineral Projects
Manager, and a qualified person under National Instrument 43-101 Standards of
Disclosure for Mineral Projects (NI 43-101), has approved the scientific and
technical information in the 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 is available on SEDAR at www.sedar.comand on EDGAR at
www.sec.gov.

Description of business

NovaCopper is a base metals exploration company focused on
exploring and developing the Ambler mining district located in Alaska, U.S.A.
NovaCopper conducts its operations through a wholly-owned subsidiary, NovaCopper
US Inc. (NovaCopper US). Our Upper Kobuk Mineral Projects or UKMP Projects
consist of the 100% owned Ambler lands which hosts the Arctic
copper-zinc-lead-gold-silver Project and the Bornite carbonate-hosted copper
Project located on the Bornite lands acquired through a collaborative long-term
agreement with NANA Regional Corporation, Inc. (NANA), a Regional Alaska
Native Corporation. NovaCopper is primarily focused on developing copper
properties in the Ambler mining district, some of which also have significant
zinc, gold and silver resources. In addition, NovaCoppers principal properties
are located in Alaska, a region with low geopolitical risk that has a long
history of mining, established permitting standards and governments supportive
of resource development. We are focused on continuing to identify high-grade
mineralization with additional exploration being executed in 2013.

NovaCopper was formed in 2011 by NovaGold to hold the UKMP
Projects, and was spun-out to shareholders by NovaGold Resources Inc.
(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.

Property review

NovaCoppers principal assets, the UKMP Projects, are located
in the Ambler mining district in Northwest Alaska. Our UKMP Projects comprises a
total of approximately 352,900 acres (142,831 hectares) consisting of the Ambler
and Bornite lands.

Arctic Project

The Ambler lands, which host the high-grade
copper-zinc-lead-gold-silver Arctic Project and other mineralized targets within
a 65 kilometer long volcanogenic massive sulfide (VMS) belt, are owned by
NovaCopper US. The Ambler lands, comprising of a number of deposits, most
significantly the Arctic deposit, are located in Northwestern Alaska comprising
112,058 acres (45,348 hectares) of Federal patented mining claims and State of
Alaska mining claims, within which VMS mineralization has been found.

15

---

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 cash payments to the vendor of $12.0
million each in January 2011 and January 2012, respectively, 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 the Company 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, 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. The agreement establishes a framework for any future development
of either the Bornite Project or the Arctic Project, of which both projects are
included as part of a larger area of interest as defined in the agreement.

As consideration, NovaCopper paid $4.0 million upon signing the
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. Upon the decision to proceed with development of a mine within the
area of interest, NANA maintains the right to purchase between a 16%-25%
ownership interest in the mine 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,
consideration will be payable equal to the historical costs incurred on the
properties at the elected percentage purchased less $40.0 million, not to be
less than zero. The parties would form a joint venture and be responsible for
all future costs, including capital costs of the mine based on their pro-rata
share. The completion of the agreement with NANA creates a total land package
incorporating NovaCoppers Ambler lands with the adjacent Bornite and ANCSA
lands for a total of approximately 352,900 acres (142,831 hectares).

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 which is determined by the portion 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.

Current activities

On February 5, 2013, NovaCopper released an updated resource
estimate for the Bornite Project in a report entitled NI 43-101 Technical
Report Resource Estimation  South Reef and Ruby Creek zones, Bornite deposit,
Upper Kobuk Mineral Projects, Northwest Alaska. In addition to the Ruby Creek
zone resources released on July 18, 2012, NovaCopper released a resource
estimation on the South Reef zone which lies roughly 400 to 600 meters southeast
of the Ruby Creek zone. The South Reef zone at Bornite reports at a 1.0% copper
cut-off grade, Inferred Resources of 43.1 million tonnes of 2.54% Cu or 2,409
million pounds of contained copper. Resources are stated as potentially being
economically viable in an underground mining scenario based on a projected metal
price of $2.75 per pound copper and total site operating costs of $60.00 per
tonne. Investors should also understand that "inferred mineral resources" have a great amount of uncertainty as to their existence and great uncertainty 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. SeeCautionary Note to United States Investors concerning
Reserve and Resource Estimates.

NovaCopper has approved a budget of $16.0 million for its 2013
exploration program, technical reviews, formal studies and general and
administrative costs. We plan to carry-out additional diamond
core drilling focused on the Bornite Project and
complete a preliminary economic assessment study on an open pit scenario at the Arctic deposit
during the summer of 2013.

16

---

We are continuing to work with the Alaska Industrial
Development and Export Authority (AIDEA) and plan to sign a memorandum of
understanding during the first half of 2013 as the next step to advancing the
road into the Ambler mining district. The State of Alaska and AIDEA are working
on initiating permitting for the road which is expected to provide access to
NovaCoppers UKMP Projects. We are also continuing to focus efforts on community
relations and workforce development strategies, working closely with NANA on
these efforts.

Corporate developments

Share issuances

Under the Plan of Arrangement, NovaCopper committed to issue up
to 6,181,352 common shares to satisfy holders of NovaGold warrants, performance
share units and deferred shares units on record as of the close of business
April 27, 2012 on the same basis as NovaGold shareholders under the Plan of
Arrangement. When a warrant is exercised or a unit becomes vested, NovaCopper
has committed to deliver one common share to the holder for every six shares of
NovaGold the holder is entitled to receive, round down to the nearest whole
number.

NovaCopper issued 6,088,262 common shares upon the exercise of
NovaGold warrants by various holders during the first quarter ended February 28,
2013 and 14,180 common shares in settlement of NovaGold performance share units
which vested on December 3, 2012. The Company receives no proceeds from the
exercise and settlement of these instruments.

Long-term incentives

On November 29, 2012, the Board of Directors approved a
Restricted Share Unit Plan (RSU Plan) and a Deferred Share Unit Plan (DSU
Plan) to provide long-term incentives to employees and directors. The RSU and
DSU Plans may be settled in cash or, subject to shareholder approval, common
shares with each Restricted Share Unit (RSU) and Deferred Share Unit (DSU)
entitling the holder to receive one common share, subject to shareholder
approval, or the market value of one common share, at the Companys election.

On December 5, 2012, 1,295,500 RSUs were granted to employees
vesting equally in thirds on June 5, 2013, December 5, 2013, and December 5,
2014. 750,000 DSUs were granted to directors to be paid out at the time of
retirement from NovaCopper.

Base shelf prospectus

During March 2013, we filed a short form based shelf prospectus
with the securities commissions in each province and territory of Canada (other
than Quebec) and a corresponding shelf registration statement on Form S-3 with
the United States Securities and Exchange Commission which allow us to make
offerings of common shares, warrants, share purchase contracts, and share
purchase or equity units for aggregate proceeds of up to $100,000,000 for a
period of up to 25 months in Canada and 3 years in the United States from the
effective date.

17

---

Summary of results

|                                           |   | in thousands of dollars,     | 
|------------------------------------------ | - | ---------------------------- | 
|                                           |   | except for per share amounts | 
|                                           |   | Three months                 | 
|                                           |   | ended                        | 
|                                           |   | February 28, 2013            | 
|                                           |   | **$**                        | 
|Amortization                               |   | 250                          | 
|General and administrative                 |   | 548                          | 
|Mineral properties expense                 |   | 802                          | 
|Professional fees                          |   | 299                          | 
|Salaries                                   |   | 549                          | 
|Salaries  stock-based compensation        |   | 4,113                        | 
|Loss and comprehensive loss for the period |   | 6,626                        | 
|Basic and diluted loss per common share    | $ | 0.13                         | 

For the three months ended February 28, 2013, NovaCopper
reported a net loss of $6.6 million (or $0.13 basic and diluted loss per common
share) compared to a net loss of $0.9 million for the corresponding period in
2012 (or $0.02 basic and diluted loss per common share). This variance was
primarily due to a non-cash stock-based compensation charge of $4.1 million,
salaries of $0.5 million and general and administrative expenses of $0.5 million
incurred as a result of NovaCopper being a stand-alone public company in 2013
compared to 2012. The first quarter of 2012 was prior to the spin-out from
NovaGold which became effective April 30, 2012, whereby the majority of expenses
related to mineral property expenses has been accounted for as if the project
expenditures were incurred by the Company from the projects inception.

Total stock-based compensation expense recognized for the
period 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. As NovaCopper was not a publicly traded entity in the first quarter
of 2012, there is no similar charge. Further, as a result of becoming a separate
public company, expenses were incurred relating to general and administrative
expenses of $0.5 million and salaries of $0.5 million for which there are
minimal comparable expenses in 2012 of $0.1 million. The comparable basic and
diluted loss per common share for 2013 is significantly higher than 2012 mainly
as a result of the increased net loss. Expenses to April 30, 2012, the date of
completion of the spin-out, were funded by NovaGold and its affiliates.

For the three months ended February 28, 2013, NovaCopper
reported mineral property expenses of $0.8 million compared to $0.6 million for
the corresponding period in 2012. Similar expenses were incurred consisting of
engineering, project support expenses for the upcoming field season and
community initiatives.

Selected financial data

Quarterly information

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

|                                          |  | in thousands of dollars, |  
|----------------------------------------- |  | ------------------------ | -
|                                          |  | except per share amounts |  
|                                          |  | 02/28/13                 |  
|                                          |  | **$**                    |  
|Interest income                           |  | 14                       |  
|Mineral property expenses                 |  | 802                      |  
|Loss for the quarter                      |  | (6,626                   | )
|Loss per common share  basic and diluted |  | (0.13                    | )

18

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Factors that can cause fluctuations in NovaCoppers quarterly
results include the length of the exploration field season at the properties,
timing of property acquisition payments, stock option vesting, and issuance of
shares. Other factors that have caused fluctuations in the quarterly results
that would not be expected to re-occur include the incorporation of NovaCopper
and completion of the spin-out in April 2012. Prior to April 2011, NovaCopper
had no shares outstanding as it was not yet incorporated. As a result of the
spin-out, the loss per common share has been restated as if the distribution of
common shares would have occurred at inception.

During the second quarter of 2011, we had mineral property
expenses of $2.4 million as a result of the start-up of the exploration field
season. During the third quarter of 2011, we had mineral property expenses of
$5.6 million as the full quarter was during the exploration field season and
accretion expense of $0.5 million due to an early payment of payments owing on
the Ambler land acquisition. During the fourth quarter of 2011, NovaCopper
incurred $1.3 million in general and administrative expenses as a result of
general expenses that were incurred as part of NovaCopper incurring management
fees from NovaGold. During the first quarter of 2012, we recorded expenses of
$0.6 million in mineral property expenses in preparation activities for field
season and ongoing engineering studies. During the second quarter of 2012,
NovaCopper had stock-based compensation expense of $5.5 million, $0.7 million
for general and administrative and $0.7 million for salaries expense recorded as
a result of the completion of the spin-out from NovaGold. 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 during which the
third quarter encompasses the majority of the field season. 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 expenses of $0.8 million in
mineral property expenses in preparation for field season and ongoing
engineering studies.

The Companys properties are not yet in production;
consequently, the Company believes that its loss (and consequent loss per common
share) is not a primary concern to investors in the Company.

Liquidity and capital resources

At February 28, 2013, NovaCopper had $18.7 million in cash and
cash equivalents. We expended $3.5 million on operating activities during the
three-month period ended February 28, 2013, compared with expenditures of $1.3
million for operating activities for the same period in 2012. Cash spent on
operating activities in 2013 was mainly expended on mineral property expenses,
general and administrative expenses, salaries, and reducing current liabilities.
A majority of cash spent on operating activities in the three months ended
February 29, 2012 was expended on mineral property expenses.

During the period ended February 28, 2013, no cash from
financing activities was generated compared with $1.6 million in the same period
in 2012. Funding of $1.6 million was received to fund operating expenses
incurred from NovaGold for the period ended February 29, 2012 compared with $nil
in operating expense funding provided in the comparable period in 2013.

During the period ended February 28, 2013, the Company expended
$0.01 million on investing activities to purchase accounting software compared
with no comparative amount in 2012.

We do not currently generate operating cash flows. At February
28, 2013, we had cash and cash equivalents of $18.7 million and working capital
of $16.8 million. At present, we believe that the current cash and cash
equivalent balances as of February 28, 2013 are sufficient to cover the
anticipated expenditures on exploration activities and general and
administrative costs for 2013. Additional capital will be necessary to conduct
additional exploration drilling and engineering studies on our properties to
advance our projects to a positive production decision. Based on anticipated but
not committed expenditures on our projects, we are likely to require financing
within the next twelve to fifteen months. Future financings are anticipated
through debt financing, equity financing, convertible debt, exercise of options,
or other means. The continued operations of the Company are dependent on its
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 on terms favourable to the Company or to generate cash
flows.

19

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Contractual obligations

Contractual obligated undiscounted cash flow requirements as at
February 28, 2013 are as follows.

|                                         |  | in thousands of dollars,   | 
|---------------------------------------- |  | -------------------------- | 
|                                         |  | unless otherwise specified | 
|                                         |  | Total                      | 
|                                         |  | **$**                      | 
|Accounts payable and accrued liabilities |  | 616                        | 
|Due to related parties (a)               |  | 98                         | 
|Office lease                             |  | 758                        | 
|Total                                    |  | 1,472                      | 

|(a) | Amounts due to related parties consist of current
      accounts payable owing to NovaGold under its Services
  Agreement.
|--- | --------------------------------------------------------------------------------------------------------------------------

On January 25, 2013, the Company entered into a commitment to
lease office space effective May 1, 2013 for a period of four years. The future
minimum lease payments as at February 28, 2013 are approximately as follows.

|in
      thousands of  dollars | 
|------------------------------ | 
|                               | 
|                               | 
|2013                           | 
|2014                           | 
|2015                           | 
|2016                           | 
|2017                           | 
|Total                          | 

Off-balance sheet arrangements

The Company has no material off-balance sheet arrangements.

Outstanding share data

At April 8, 2013, NovaCopper had 52,769,226 common shares
issued and outstanding. At April 8, 2013, NovaCopper had 6,011,660 stock
options with a weighted-average exercise price of $3.03, 2,046,664 NovaGold
arrangement options with a weighted-average exercise price of $4.12, and
1,283,500 RSUs and 750,000 DSUs outstanding.

Related party transactions

Expenses to April 30, 2012 were funded by NovaGold and its
affiliates. NovaGold is a company with directors in common. During the three
months ended February 28, 2013, NovaGold and its affiliates provided management
and office services totaling $100,000 to NovaCopper, including rental of office
space pursuant to a Services Agreement.

During the three months ended February 28, 2013, we provided
exploration and management services in the amount of $69,000 to NovaGold under
the Services Agreement. The Services Agreement terminates on May 1, 2013.

NovaCopper had accounts receivable of $15,000 at February 28,
2013 due from NovaGold. NovaCopper had payables due to related parties of
$98,000 at February 28, 2013 and $127,000 at November 30, 2012 due to NovaGold
and its affiliates.

20

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New accounting pronouncements

Unless otherwise noted, the following revised standards and
amendments are effective for annual periods beginning on or after December 1,
2012 or as noted. The Company is continuing to assess the impact of these
standards and amendments or has determined whether it will early adopt them as
noted.

|i.  | Comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | In December 2011, the Financial Accounting Standards
      Board issued Comprehensive Income  Deferral of the Effective Date for
      Amendments to the Presentation of Reclassifications of Items out of
      Accumulated Other Comprehensive Income in Accounting Standards Update No.
      2011-05 (ASU 2011-12). ASU 2011-12 defers changes in Update 2011-05
      that relate to the presentation of reclassification adjustments. ASU
      2011-12 is effective for fiscal years, and interim periods within those
      years, beginning after December 15, 2011 (year ending November 30, 2013
      for the Company). The adoption of ASU 2011-12 did not have a material
      impact on our results of operations, financial condition, or cash
      flows.                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|ii. | Offsetting assets and liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | In January 2013, the FASB issued Clarifying the Scope of
      Disclosures about Offsetting Assets and Liabilities (ASU 2013-01). ASU
      2013-01 clarifies Accounting Standards Update No. 2011-11: Disclosures
      about Offsetting Assets and Liabilities (ASU 2011-11) to restrict the
      scope of implementation to derivatives accounted for under Topic 815,
      Derivatives and Hedging, which includes bifurcated embedded derivatives
      repurchase agreements and reverse repurchase agreements, and securities
      borrowing and lending transactions that require an offset or are subject
      to an enforceable master netting arrangement. ASU 2013-01 is effective for
      fiscal years, and interim periods within those years, beginning on or
      after January 1, 2013 (year ending November 30, 2014 for the Company). We
      do not expect the adoption of ASU 2013-01 to have a material impact on our
      results of operations, financial condition, or cash
  flows.

Critical accounting estimates

The most critical accounting estimates upon which NovaCoppers
financial status depends are those requiring estimates of the recoverability of
its 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 its 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.

21

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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.

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 and updated at each period
end until the unit vests. 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. Units may be settled in either i) cash or ii) shares issued from
treasury, subject to approval by shareholders, at the Companys election at the
time of vesting.

Cautionary notes

Forward-looking statements

This Report 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 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 mineral deposits;
- our ability to achieve production at any of the Companys mineral
  exploration and development properties;

22

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- estimated capital costs, operating costs, production and economic
  returns;
- estimated metal pricing, metallurgy, mineability, marketability and
  operating and capital costs, together with other assumptions 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 expectations regarding demand for equipment, skilled labour and
  services needed for exploration and development of mineral properties;
  and
- our activities will not be adversely disrupted or impeded by
  development, operating or regulatory risks.

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
  none of the Companys mineral properties are in production or under
  development;
- uncertainties relating to the assumptions underlying the Companys
  resource and reserve 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 and development properties;
- risks related to the Companys ability to commence production and
  generate material revenues or obtain adequate financing 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 to complete 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;
- increased regulatory compliance costs related to the Companys loss of
  its foreign private issuer status as of December 1, 2012;
- 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;
- 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, the geology, grade and continuity of the Companys mineral
  deposits;
- uncertainty related to inferred mineral resources;
- risks related to the third parties on which the Company depends for its
  exploration and development activities;
- dependence on cooperation of joint venture partners in exploration and
  development of properties;
- mining and development risks, including risks related to
  infrastructure, accidents, equipment breakdowns, labor disputes 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 development of mineral properties,
  and related cost increases;
- the risk that permits and governmental approvals necessary to develop
  and operate mines on the Companys properties will 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 estimates related thereto;
- uncertainty related to title to the Companys mineral properties;
- risks related to competition in the acquisition of mineral
  properties;

23

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- risks related to unknown liabilities in connection with
  acquisitions;
- 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;
- uncertainty as 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, diluting voting 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 investment company;
- 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 the requirements 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 February 12, 2013,
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.

Reserve and resource estimates

Unless otherwise
indicated, all resource and reserve estimates included in this Report 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 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 reportmineralization 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.

24

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Item 3. Quantitative and Qualitative Disclosures about
Market Risk

Financial instruments

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 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 due to related parties approximates their
carrying value due to the short-term nature of their maturity. The Companys
other liabilities are held at fair value and are a Level 1 financial instrument
valued using quoted market prices. All of the Companys 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$941,000, accounts receivable of
CDN$15,000 and accounts payable of CDN$475,000. Based on a 10% change in the
US-Canadian exchange rate, assuming all other variables remain constant, our net
loss would change by approximately $43,000.

(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 its contractual obligations.
Our cash and cash equivalents are all held with Canadian Chartered financial
institutions and are composed of financial instruments issued by Canadian banks.
Our accounts receivable consist of HST receivable 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 NovaCopper will encounter
difficulties raising funds to meet its 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 its capital
structure and financial leverage. We do expect, based on anticipated but not
committed expenditures on its projects, we are likely to require financing
within the next twelve to eighteen 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 its 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. The Company holds 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

25

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The Company is exposed to price risk with respect to commodity
prices as future profitability and long-term viability will depend, in large
parts 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. The Company does not have any hedging
or other commodity-based risks respecting its operations.

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

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 February
28, 2013. 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.

26

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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, 2012, as filed with the SEC on February 12, 2013. The
risk factors in our Annual Report on Form 10-K for the year ended November 30,
2012, 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.

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.

27

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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.

|Date: April 9, 2013 | NOVACOPPER INC.
|------------------- | ---------------
|                    |                
|                    |                
|                    |                
|                    | By:            
|                    |                
|                    |                
|                    |                
|                    | By:            
|                    |                
|                    |                

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EXHIBIT INDEX

|Exhibit No. |  | Description                                                                              
|----------- |  | -----------------------------------------------------------------------------------------
|31.1        |  | Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a)
|31.2        |  | Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)
|32.1        |  | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350          
|32.2        |  | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350          

29

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