IMS 2025 JV Video: New Found Gold starts pouring, eyes 200k oz

New Found Gold: Transitioning from Exploration to Production - A Detailed Summary

Key Concepts:

• Queensway Deposit: A high-grade gold deposit in Newfoundland, Canada, forming the core of New Found Gold’s exploration efforts.
• Hammerdown Mine: An acquired gold mine in Newfoundland, currently in production and providing immediate cash flow.
• Phased Development: A strategy for developing Queensway in stages, starting with a smaller-scale operation and scaling up based on cash flow.
• All-In Sustaining Cost (AISC): A comprehensive measure of the total cost of gold production, including operating costs, capital expenditures, and exploration.
• Project Financing: Securing funding for the development of large-scale mining projects, typically through a combination of debt and equity.
• Environmental Assessment (EA): A process required by governments to assess the environmental impact of proposed mining projects.
• Narrow Vein, High-Grade Deposit: A geological characteristic of the Queensway deposit, where gold is concentrated in relatively small, but highly valuable, veins.

1. Company Overview & Strategic Shift

New Found Gold was established in 2016, focusing on acquiring a substantial land package near Gander, Newfoundland. The discovery of the Queensway deposit in 2019 generated significant excitement and investment. However, a shift in strategy occurred in late 2023 with a new board (starting December) and new management (led by Keith Bole, starting January). The primary mandate of this new leadership is to transition the company from pure exploration to generating cash flow through production. This involved a re-evaluation of expectations following the initial resource estimate for Queensway, which revealed 1.4 million ounces of indicated resources and 600,000 ounces of inferred resources. A key characteristic of the Queensway deposit is its high-grade core: 75% of the gold ounces are contained within 25% of the tonnage.

2. Acquisition of Maritime Resources & Hammerdown Mine

A pivotal step in this transition was the acquisition of Maritime Resources and the Hammerdown mine, which was already in development. Production commenced at Hammerdown in the previous month of the interview, with initial gold pours already completed. The mine was described as having been developed on a “shoestring budget” and requiring additional capital investment to reach its full potential. The acquisition also included the Pine Cove Mill and the gold circuit at Nugget Pond, providing processing options for both Hammerdown and future production from Queensway. The proximity of Hammerdown to Queensway is a significant advantage, streamlining logistics and potential synergies.

3. Queensway Deposit: Phased Development & Economics

The Queensway deposit is characterized by its narrow-vein, high-grade nature. This allows for a phased development approach. A Preliminary Economic Assessment (PA) released in July outlined a plan for initial production of 60,000-70,000 ounces per year over four years with a capital expenditure of $155 million Canadian, at an all-in sustaining cost (AISC) of approximately $1,300 per ounce. Cash flow generated from this initial phase would then fund a Phase 2 expansion to 172,000 ounces per year at an AISC of under $1,100 per ounce. Combined with Hammerdown’s production, the company projects a total production profile exceeding 200,000 ounces per year. The property package encompassing Queensway is extensive, covering 110 km in length and 20 km in width, comparable in size to the Valdor-Uroy region in Canada.

4. Permitting & Operating Environment in Newfoundland

Keith Bole highlighted a positive experience with the permitting process in Newfoundland, contrasting it with longer timelines experienced in other jurisdictions (e.g., Quebec, where the Louisore deposit went into production within four years of discovery). He emphasized the importance of proactive engagement with the government and early consultation with communities. Firefly Resources received an Environmental Assessment (EA) approval in just 45 days, demonstrating the potential for expedited permitting when thorough preparatory work is completed. This is attributed to a collaborative approach and a willingness to address government concerns proactively.

5. Financing & Future Roadmap

As of the end of September, New Found Gold had $87 million in cash, projected to decrease to around $50 million by year-end due to investments in Hammerdown and exploration. The company has engaged Cutfield Freeman as an advisor to secure project financing for the Queensway development, targeting approximately $155 million Canadian. The roadmap for the next six to two years includes:

• Ramping up production at Hammerdown to a steady state.
• Submitting the Environmental Assessment (EA) application for Queensway in the first quarter of next year.
• Initiating engineering studies for Queensway construction, with potential early works in late 2027 and full construction in 2027.
• Continuing exploration on the extensive property package, with a 70,000-meter drill campaign nearing completion and plans for continued drilling.

6. Investor Perspective & Risk Assessment

Keith Bole believes the company is positioned to achieve a $10 share price, given its line of sight to 200,000 ounces of annual production and a current market capitalization of $1 billion. He identified three key areas for investors: control over the timeline through permitting, initial cash flow from Hammerdown facilitating project financing, and the mitigation of resource risk through extensive surface sampling of the high-grade deposit. The primary risk identified is execution risk – successfully delivering on the planned development and production targets.

7. Keith Bole’s Experience & Lessons Learned

Keith Bole brings over 40 years of experience in the mining industry, including involvement in the development of narrow-vein gold mines and the successful development of Reunion Gold (acquired by G Mining Guyana). He emphasized the importance of adequate capitalization and careful planning to avoid pitfalls during project execution. His experience in Guyana highlighted the value of proactive engagement with government and communities during the permitting process.

8. Potential for Future Acquisitions

While currently focused on optimizing existing assets, New Found Gold remains open to potential acquisitions if the right opportunity arises, particularly given the support of a significant shareholder who believes assets are undervalued.

Notable Quotes:

• “We’ve got a line of sight on 200,000 ounces a year.” – Keith Bole, emphasizing the company’s production potential.
• “It’s just pretty straight line for me is I see the line of sight on 200,000 ounces a year.” – Keith Bole, reiterating his confidence in the company’s future.
• “You don’t cheap out on the work in order to deliver.” – Keith Bole, highlighting the importance of thorough preparation for permitting.
• “I’ve got about more than half in the Abbot Tibby and Timman’s camps narrow vein gold and so understanding that it takes the work in order to properly understand the deposit.” – Keith Bole, emphasizing the importance of understanding the deposit.

Conclusion:

New Found Gold is undergoing a significant transformation from an exploration-focused company to a gold producer. The acquisition of Hammerdown provides immediate cash flow, while the phased development plan for Queensway leverages the deposit’s high-grade nature to minimize capital requirements and accelerate production. A positive operating environment in Newfoundland and a seasoned management team led by Keith Bole position the company for continued growth and value creation. The company’s success hinges on executing its development plan, securing project financing, and maintaining a collaborative relationship with the Newfoundland government and local communities.