Sponsored: New Found shifts from discovery to steady gold production

Key Concepts

• Queensway Gold Project: A flagship gold exploration and development project in Newfoundland.
• Hammerdown: A secondary project currently ramping up toward commercial production.
• All-In Sustaining Cost (AISC): A metric used to measure the total cost of producing an ounce of gold; New Found Gold targets <$1,300/oz at Queensway.
• Resource Growth: The process of expanding the known mineral deposit through drilling.
• De-risking: Engineering and technical work performed to increase confidence in the project’s economic viability.
• PEA (Preliminary Economic Assessment): A study that provides an initial view of the potential economic viability of a mineral project.

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1. Evolution from Exploration to Production

New Found Gold has transitioned from a pure "discovery story" to a "growing production story" over the last 18 months. The company is currently managing two primary assets:

• Hammerdown: Expected to reach commercial production in the next quarter.
• Queensway: First ore production is targeted for Q4 of next year.
• Production Outlook: By 2028, the company projects an annual production rate of 100,000 to 125,000 ounces of gold, with an AISC estimated at approximately $1,500/oz. This is expected to generate over $300 million in annual cash flow.

2. Drilling Program and Exploration Strategy

The company has expanded its 2026 drilling program to 90,000 meters. The strategy is divided into three core objectives:

• Resource Growth: 45% of the 90,000-meter program is dedicated to expanding the current resource and identifying new discoveries.
• Depth Potential: The current resource at Queensway spans a 4.5 km strike length but is only drilled to a depth of 400 meters. Given that the system has been intercepted at 1,000 meters, there is significant untapped potential at depth.
• New Discoveries: The company is focusing on the "Dropkick" zone, located 11 km north of the main resource. Recent drilling has defined a system 1.4 km by 300 meters, which remains open in all directions.

3. Operational Milestones and Catalysts

CEO Keith Bowles identified several critical milestones for the remainder of 2026:

• Permitting: The company has submitted its environmental assessment application and is awaiting government feedback.
• Technical Reporting: An updated technical report for Queensway is in progress. This will include an updated resource estimate (incorporating the Dropkick zone) and will advance the project toward feasibility-level engineering.
• Cash Flow: The commencement of commercial production at Hammerdown will provide immediate cash flow to support ongoing exploration.
• Continuous News Flow: The company plans to maintain a steady stream of exploration results as drills continue to test half a dozen high-priority targets across their 110-km property package.

4. Economic Resilience and Strategy

• Cost Discipline: Despite fluctuations in the gold price, the company maintains a focus on low-cost production. With an AISC of less than $1,300/oz at Queensway, the project remains highly profitable regardless of market volatility.
• Valuation Perspective: The CEO suggests that investors are currently buying into a "growing gold production story" while gaining exposure to a massive, early-stage exploration play comparable to the Abitibi gold camp.

5. Synthesis and Conclusion

New Found Gold is successfully executing a dual-track strategy: de-risking its flagship Queensway project through rigorous engineering and resource expansion, while simultaneously bringing the Hammerdown project into production to generate near-term cash flow. By 2028, the company aims to be a significant mid-tier producer with a robust production profile and a massive, underexplored land package. The primary focus for the next six months remains the advancement of environmental permits, the release of an updated technical report, and the aggressive pursuit of new discoveries across their 110-km property.