New Found Gold Announces PEA for Queensway Gold Project

• Initial Proven Resource Base 1.5 million ounces of gold over 15-year mine life, with high-grade surface mineralization at Queensway Gold Project
• De-Risked Phased Approach Starting with 700 TPD operation requiring only $155M capex, generating early cash flow to self-fund expansion
• $742 million NPV5 at $2,500 gold with 56% IRR, reaching over 190% IRR at current spot prices
• Strategic Location Advantage Project, located major town in Newfoundland, with supportive government, existing infrastructure, and skilled workforce
• Significant Expansion Potential Phase two scales to 7,000 TPD, producing 172,000 ounces annually, with an underground component adding further upside

PEA Announcement Marks Major Milestone for New Found Gold

New Found Gold Corporation (TSX-V: NFG, NYSE-A: NFGC) has announced the results of its Preliminary Economic Assessment (PEA) for the Queensway Gold Project in Newfoundland, marking a significant milestone in the project's development trajectory under CEO Keith Boyle's leadership.

The Queensway Gold Project distinguishes itself through its high-grade surface mineralization and strategic location advantages. As Boyle explains:

"We're producing 1.5 million ounces of gold over a 15-year mine life. At an average all in sustaining cost (AISC) of $1,256 an ounce." 

This positions New Found Gold competitively within the current gold market environment, particularly given the metal's recent strength above $3,300 per ounce.

The project's location near Gander, Newfoundland, provides immediate infrastructure advantages that many exploration companies lack. This proximity to established infrastructure significantly reduces development risks and capital requirements compared to remote mining projects.

Preliminary Economic Assessment Overview: A Conservative Foundation

The PEA presents compelling economics that become increasingly attractive in the current gold price environment. At the base case assumption of $2,500 gold, the project delivers a net present value of $742 million with a 56% internal rate of return. However, these figures improve dramatically at current market prices:

"The IRR jumps to 197% when you use the spot price today." 

This sensitivity to gold prices provides significant upside potential for investors, particularly given the current macro environment supporting precious metals.

The company's approach prioritizes IRR over NPV, reflecting a strategic decision to minimize shareholder dilution. As Boyle states: 

"We sacrificed NPV for IRR. In other words, in phasing the approach, we really pushed out that big production number because the capital cost of the small starter project is much more attractive to us, and a much better fit for our shareholders."

This conservative methodology extends throughout the assessment. The engineering firm selected is "known for its conservatism," with indirect costs at 35% and contingency at 25%, placing these assumptions "in the 90th percentile of conservatism" compared to recent PEAs in the sector.

Interview with Chief Executive Officer, Keith Boyle

Phase One: Small Mine Development Strategy

The phased development approach represents NFG's key differentiator in the current market environment. Phase one involves constructing a 700 tons per day (tpd) operation with capital expenditure of $155 million, designed to generate early cash flow while minimizing initial capital requirements.

This initial phase targets production of 69,000 ounces annually with remarkable margins. Boyle emphasizes: 

"We're talking significant cash because that initial phase of only $155 million, generating just 69,300 ounces a year, but with around US$2,000 an ounce margin on those ounces, that's significant cash."

The strategy leverages existing infrastructure through toll milling arrangements in Newfoundland, allowing rapid production commencement without the extended timelines associated with plant construction. This approach provides multiple optimization opportunities, including potential contract mining arrangements and phased equipment acquisition, to further reduce initial capital requirements.

The timeline for phase one remains aggressive yet achievable. New Found Gold plans to submit permit applications at the beginning of 2026, targeting permit approval by year-end to commence construction in early 2027. This timeline benefits from supportive government policy, with recent examples including Maritime Resources achieving permits in 10.5 months and FireFly receiving environmental assessment approval in just 45 days.

Phase Two: Scaling for Significant Production

Phase two represents the project's transformation into a major gold producer, scaling operations to 7,000 tons per day and generating 172,200 ounces annually. This expansion occurs during years three and four of phase one operations, utilizing cash flow from the initial operation to fund construction.

The expanded operation's economics prove compelling, delivering production "at just over a twelve hundred dollars all in sustaining" cost. This positions New Found Gold among significant gold producers.

Permitting for phase two requires federal involvement due to the increased scale, with New Found Gold allowing two years for approval. However, the company maintains operational flexibility, as Boyle explains: 

"We're not beholden to it because we'll have a small mine that will be able to go for longer than that."

The expansion includes best-in-class tailings management through utilization of empty pits for tailings deposition, eliminating traditional tailings dam requirements. This approach significantly reduces long-term environmental liabilities while potentially accelerating permitting processes.

Economic & Operational Strategy: Conservative Assumptions Drive Upside

NFG's economic modeling employs current market pricing for key inputs, providing realistic operational cost projections. Fuel costs utilize today's pricing, while labor costs reflect current regional rates. The company has developed operating costs "from the ground up" for both open pit mining and processing operations.

Capital cost estimates employ benchmark studies with conservative factors. With indirects at 35% and contingency at 25%, these assumptions provide a significant buffer for cost overruns while creating potential for cost optimization during detailed engineering phases.

The metallurgical work completed to date supports the processing assumptions, with recoveries above 92% for material grading over two grams per ton through "simple crush, grind, gravity and leech" processing. Lower grade material requires flotation circuits to handle refractory components, with the overall process targeting 48% of gold production as doré and 44% as concentrate.

Infrastructure requirements remain modest due to the project's location advantages. While some upgrades are necessary, including power line rerouting and road connections, these costs are well-defined and manageable within the overall capital envelope.

Permitting & Engineering Challenges: Government Support Provides Confidence

Newfoundland's mining-friendly regulatory environment provides significant advantages for NFG's development timeline. The provincial government has stated objectives to develop "five mines by 2030," creating policy alignment with NFG's development schedule.

Recent permitting successes in the province demonstrate achievable timelines. The consulting group STANTEC, engaged by New Found Gold, successfully guided FireFly through environmental assessment in 45 days, providing valuable precedent and process knowledge for New Found Gold’s applications.

The federal permitting requirement for phase two, triggered by the 7,000 TPD threshold, represents the primary regulatory risk. However, improved federal processes for major mining projects provide reasonable confidence in the two-year timeline assumption.

Engineering challenges remain manageable given the project's characteristics. The high-grade core beginning at surface simplifies initial mine development, while the phased approach allows operational learning to inform expansion designs.

Underground development, planned as phase three, employs cut-and-fill mining methods with conservative three-meter mining widths. Boyle's experience suggests optimization potential: 

"When it comes to narrow vein, I've mined much narrower than that, down to 1.2 meters."

Future Prospects & Exploration: Expanding the Resource Base

New Found Gold’s exploration program continues expanding the resource base beyond the current 15-year mine plan. The PEA is just the beginning. More drilling aims to add more commercial ounces. Two drills currently operate on targets, including Dropkick, located 11 kilometers north of the main deposit area, where recent results suggest similar high-grade characteristics to the core deposit areas.

According to Boyle, the exploration strategy targets "the ounces that will replace or add to the ounce profile that we have in our current 15-year mine plan."

This approach prioritizes near-term production enhancement over speculative regional exploration.

The underground component offers significant expansion potential with 400,000 ounces identified in the resource, of which 230,000 ounces were converted to mine plans. This represents additional production over years six through ten, providing "a nice sweetener on top of the open pit."

Resource expansion potential extends across "five ramp systems over a four and a half kilometer length or strike," which Boyle characterizes as "basically five different mines that are running in the Abitibi" if located in that prolific mining district. This geological setting remains "wide open at depth and on strike," suggesting substantial exploration upside.

The Investment Thesis for New Found Gold

• De-risked Development Model Phased approach minimizes initial capital requirements while generating early cash flow to fund expansion
• Exceptional Economics 56% IRR at $2,500 gold, and exceeding 190% IRR at current gold prices with conservative assumptions throughout
• High-Grade Surface Resource 92% recovery rates on simple metallurgy with mineralization starting at surface
• Proven Jurisdiction Newfoundland's mining-friendly regulatory environment with demonstrated fast-track permitting success
• Experienced Management CEO with proven track record of developing high-grade gold deposits through various market cycles
• Significant Expansion Potential Active drilling programs targeting resources beyond the current 15-year mine plan
• Strategic Location One hour from Gander with access to skilled labor and established infrastructure
• Conservative Modeling 90th percentile conservatism in cost estimates provides substantial upside potential
• Flexible Timeline Phased approach provides operational flexibility if permitting or construction timelines extend
• Strong Cash Generation $2,000/oz margins in phase one provide substantial cash flow for self-funded growth

The investment opportunity centers on New Found Gold’s unique approach to development risk management through phased construction, which maintains significant upside exposure to gold price appreciation. The company's conservative assumptions and experienced management team provide confidence in its execution capability.

New Found Gold represents an investment opportunity for investors seeking exposure to a development-stage gold project with superior economics, proven management, and a de-risked development pathway. The company's phased approach minimizes initial capital requirements while providing early cash flow generation to self-fund expansion into a significant Canadian gold producer.

The Queensway Gold Project's combination of high-grade surface mineralization, infrastructure advantages, and supportive regulatory environment creates an optimal development scenario. Current gold prices provide exceptional project economics, and significant exploration upside remains across the property. NFG offers both near-term production visibility and long-term growth potential.

The strategic vision implemented by CEO Keith Boyle prioritizes shareholder value creation through disciplined capital allocation and operational excellence. This approach, combined with the project's technical merits and economic strength, positions New Found Gold as a near-term cash focused company.

Macro Thematic Analysis: Gold's Strategic Position in the Current Economic Environment

The current macroeconomic environment presents exceptional tailwinds for gold mining investments, particularly for projects like New Found Gold’s Queensway that demonstrate superior economics at conservative gold price assumptions. With gold trading above $3,300 per ounce, representing significant appreciation from the $2,500 base case used in New Found Gold’s PEA, the project's economics improve dramatically.

Central bank monetary policies across developed economies continue supporting precious metals through persistent inflationary pressures and currency debasement concerns. The Federal Reserve's recent policy stance and substantial government deficit spending create sustained demand for gold as a store of value and portfolio diversification tool.

Geopolitical tensions, including ongoing conflicts in Ukraine and the Middle East and US-China trade complexities, drive institutional and sovereign wealth fund allocation toward gold as a safe-haven asset. This demand dynamic supports premium valuations for development-stage projects with near-term production profiles like New Found Gold’s phased approach.

Supply constraints in the global gold mining sector compound these demand drivers. Major producers face declining grades, increasing costs, and limited pipeline development, creating opportunities for new producers with high-grade deposits. New Found Gold’s surface mineralization and conventional processing requirements position the company advantageously within this supply-constrained environment.

Canadian mining jurisdiction advantages become increasingly valuable as global mining faces rising political risks in traditional producing regions. Newfoundland's mining-friendly regulatory environment, with Canada's stable political system and established mining law framework, provides a security premium increasingly valued by international investors seeking exposure to precious metals production.