Near-Surface Grade & Capital Efficiency Define New Found Gold's Leverage to Gold Price Upside

• Gold market conditions remain structurally supported by monetary policy uncertainty, inflation pressures, and sustained central bank demand, increasing investor focus on margin resilience and capital efficiency among developers.
• The Queensway Gold Project hosts 1.39 million ounces of indicated gold at 2.40 grams per tonne and prioritises near-surface open-pit mining, with dense 5-by-5-metre grade control drilling supporting geological confidence and production planning reliability.
• Phase 1 economics demonstrate strong torque to gold prices, with after-tax net present value (NPV) of C$743 million and an internal rate of return (IRR) of 56.3% at US$2,500 per ounce of gold, rising to an after-tax NPV of C$1.45 billion and an IRR of 197% at US$3,300 per ounce of gold.
• Low initial capital of C$155 million and life-of-mine all-in sustaining cost (AISC) of US$1,256 per ounce create operating leverage in higher gold price scenarios while preserving downside resilience.
• The hub-and-spoke processing model through the Pine Cove Mill, combined with a 110-kilometre district-scale land package that remains largely unexplored, provides capital efficiency, reduced infrastructure risk, and long-term growth optionality.

Gold Market Dynamics & Margin Discipline in Developer Equities

Gold has entered a structurally supported pricing environment shaped by persistent monetary policy uncertainty, residual inflation pressures, and geopolitical fragmentation. Central bank demand, as tracked by the World Gold Council, remains elevated relative to historical norms, particularly among emerging market institutions seeking to diversify away from United States dollar exposure. At the same time, retail and institutional allocations have increased as gold reasserts its role as a reserve asset and policy hedge. In this environment, investor focus has shifted from production growth alone to margin resilience and capital efficiency, with greater emphasis on free cash flow per ounce and capital exposure per development stage.

Developers with high-grade ore bodies and low capital intensity typically demonstrate stronger torque to rising gold prices because grade amplifies margin expansion. This dynamic underpins the strategy at the Queensway Gold Project operated by New Found Gold in Newfoundland and Labrador, Canada, where near-surface, high-grade mineralisation and a phased, low-capex entry model are designed to maximise early cash flow. 

Queensway Resource Scale & Open-Pit De-Risking Strategy

The Queensway Gold Project hosts 1.39 million ounces of indicated gold, comprising 18.0 million tonnes at 2.40 grams per tonne gold of (g/t Au), and 0.61 million ounces of inferred gold, comprising 10.7 million tonnes at 1.77 g/t Au, reported under National Instrument 43-101 (NI 43-101) standards. Indicated resources carry higher geological confidence than inferred resources due to tighter drill spacing and demonstrated continuity. Mineralisation is focused along the 1.9-kilometre strike and 1.1-kilometre vertical extent of the Keats-Baseline Fault Zone, with intercepts including 71.8 g/t Au over 31.95 metres at Iceberg and 51.3 g/t Au over 3.40 metres at Keats. Visible coarse-flake gold within high-grade shoots reinforces the need for systematic grade control.

Chief Executive Officer and Director of New Found Gold, Keith Boyle, drawing on four decades of vein mining experience, described what that distribution looks like in practice: 

“In our case, it's the core I've never seen in my career, the gold occurs more like flakes distributed throughout. You still have to high-grade it, but the drilling shows that it’s consistent within those high-grade shoots.”

Phase 1 of the preliminary economic assessment (PEA) prioritises near-surface open-pit mining to reduce initial capital intensity, avoid early underground development costs, and accelerate cash flow. The geometry supports surface access along the corridor, but coarse gold distribution introduces reconciliation risk without dense drilling. A mandated 5-by-5-metre grade control drill pattern underpins production planning confidence. 

Phased Capital Strategy & Financing Discipline

The Queensway Phase 1 PEA requires C$155 million in initial capital, with a life-of-mine all-in sustaining cost (AISC) of US$1,256 per ounce. At a US$2,500 base case price per ounce of gold, the project achieves payback in under two years and is expected to generate over C$250 million in free cash flow during the first four years, while the on-site mill is built using operating cash flow. Ore will be processed via toll milling at the permitted Pine Cove Mill under a hub-and-spoke model, incorporating the Hammerdown Gold Project, with plans to integrate the Nugget Pond Gold Circuit and expand throughput to 1,400 tonnes per day ahead of targeted Queensway shipments by the end of 2026. 

Choosing to route ore through the existing Pine Cove Mill rather than constructing an on-site facility was driven by both timeline and financing considerations. Boyle explained the logic:

“It saves time, saves money, and saves dilution because we'd have to keep financing our way through those three years as we advanced.”

New Found Gold holds approximately C$87 million in cash and expects C$20 million from warrant exercises, following a C$63 million bought deal and a C$20 million private placement. The project delivers an after-tax net present value (NPV) at a 5% discount rate of C$743 million with an internal rate of return (IRR) of 56.3%, rising to an NPV of C$1.45 billion and an IRR of 197% at US$3,300 per ounce of gold. Using existing infrastructure accelerates cash flow, shortens the funding window, and reduces reliance on repeated equity issuance, which can erode shareholder returns in volatile gold markets.

Drilling Programme & Resource Conversion

In 2025, New Found Gold completed 74,377 metres of drilling across 614 holes, with 75% focused on the Phase 1 mine plan and the remainder on regional exploration. Tight 5-by-5-metre drill spacing within target volumes supports grade model confidence and enables conversion of inferred resources to indicated status, increasing the PEA-eligible resource base, and enhancing project NPV and production planning. Key 2026 catalysts include an Environmental Assessment submission in the second quarter of the year, an updated Technical Report in the third quarter of the year, feasibility-level metallurgical results in the second half of the year, and Phase 2 open-pit conversion drilling and Phase 3 underground transition work advancing in sequence.

Jurisdiction, Infrastructure, & District Optionality

The Queensway Gold Project sits in a jurisdiction consistently ranked highly for mining investment and regulatory transparency by the Fraser Institute, with government support to permit five new mines by 2030. Stable regulatory conditions reduce project risk premiums, supporting valuation multiples for institutional investors. The project benefits from direct Trans-Canada Highway access, renewable power, deep-water port connectivity, and nearby airports, lowering infrastructure capital requirements. Queensway spans a 110-kilometre strike, less than 5% explored, offering district-scale optionality. Recent discoveries, including the Dropkick target 11 kilometres north of the current resource, along with multiple follow-up targets for 2026 drilling, demonstrate the potential to expand the mineral system beyond the defined mine plan area.

The Investment Thesis for New Found Gold

• The near-surface indicated resource of 18.0 million tonnes at 2.40 grams per tonne of gold underpins margin resilience, supporting free cash flow generation across a wide range of gold price assumptions.
• Low initial capital of C$155 million and a phased open-pit entry strategy reduce upfront execution risk and capital exposure during the pre-production stage.
• Life-of-mine all-in sustaining cost of US$1,256 per ounce preserves margin durability below current spot prices, while higher grades amplify upside in a rising gold market.
• After-tax net present value increases from C$743 million at US$2,500 per ounce of gold to C$1.45 billion at US$3,300 per ounce of gold, with internal rate of return rising from 56.3% to 197%, demonstrating strong torque to gold price appreciation.
• The hub-and-spoke processing model through the Pine Cove Mill accelerates cash flow, lowers infrastructure risk, reduces dilution by utilising existing permitted capacity, and provides flexibility to process potential additional resources from across the company’s landholdings.
• Dense 5-by-5-metre grade control drilling within the Phase 1 mine plan area improves geological confidence, supports resource conversion, and strengthens production planning reliability.

Queensway combines high-grade, near-surface mineralisation, disciplined capital intensity, and demonstrated price sensitivity, positioning New Found Gold as a developer with both downside resilience and amplified exposure to rising gold prices.

TL;DR

New Found Gold’s Queensway Gold Project combines near-surface, high-grade resources with low initial capital and disciplined cost structure to maximise leverage to rising gold prices in a structurally supportive market. With 1.39 million ounces of indicated gold at 2.40 grams per tonne, Phase 1 requires C$155 million upfront and delivers strong price sensitivity, with after-tax net present value rising from C$743 million at US$2,500 per ounce of gold to C$1.45 billion at US$3,300 per ounce of gold. Dense grade control drilling, toll milling through existing infrastructure, and district-scale exploration upside further enhance capital efficiency, reduce risk, and position the company for both margin resilience and amplified upside in higher gold price scenarios.

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