New Found Gold: High-Grade Discovery Meets Production Strategy

• New Found Gold is executing a dual-track strategy combining near-term cash flow from the recently acquired Hammerdown mine with development of the flagship Queensway Gold Project, targeting production in late 2027.
• The Maritime Resources acquisition closed November 13th, securing the Pine Cove mill and the Hammerdown mine which poured its first gold just one day earlier, providing critical milling infrastructure for the company's 700-ton-per-day production strategy.
• Recent grade control drilling at Queensway delivered exceptional high-grade results at five-meter centers, with only 20% of assays released, providing crucial data for resource updates and mine planning while minimizing dilution.
• The company has appointed Cutfield Freeman as financial advisor to structure optimal project financing for Queensway's $155 million initial capital requirement, targeting completion by end of Q2 2026, with Hammerdown cash flow serving as equity portion.
• New Found Gold completed 70,000 meters of drilling in 2025, with 80% focused on project advancement including grade control work at both Keats and Iceberg zones, while exploration continues at high-potential targets like Dropkick, located 11 kilometers north of existing resources.

Introduction to New Found Gold

New Found Gold Corporation operates three strategic assets in Newfoundland, Canada, positioning itself as an emerging gold producer with significant exploration upside. The company's flagship Queensway Gold Project represents a high-grade gold discovery characterized by narrow vein systems with exceptional grade concentrations. Complementing this development asset, New Found Gold now controls the producing Hammerdown mine and the fully permitted Pine Cove mill, creating an integrated production platform in one of Canada's most prospective gold regions.

CEO Keith Boyle's background as a proven builder informs the company's methodical approach to production. The strategic vision centers on extracting value from high-grade core zones while maintaining aggressive exploration programs across the property portfolio. This dual mandate reflects management's recognition that Queensway's unique geology, featuring coarse-grained, nuggety gold in narrow vein structures, demands specialized grade control protocols to maximize economic returns.

The Newfoundland geological setting offers multiple advantages for exploration and development. The region hosts underexplored Paleozoic rocks with demonstrated gold mineralization, favorable permitting conditions, and established infrastructure including road access and power availability. New Found Gold's consolidated land position spans highly prospective terrain with numerous drill targets exhibiting similar geological signatures to the company's existing high-grade zones.

As Boyle emphasized:

"When we see the deposit at Queensway, we have a very unique characteristic of high-grade core veins. And so that high-grade core is really what we're after to get to that cash flow quickly."

The company's strategy acknowledges a fundamental economic reality: high-grade zones generate disproportionate cash flow even from relatively modest production rates. By targeting a 700-ton-per-day operation rather than pursuing a larger, capital-intensive development, New Found Gold can accelerate cash generation while maintaining financial flexibility. This approach reduces execution risk, shortens the timeline to positive cash flow, and positions the company to self-fund expansion from operating profits.

Interview with Chief Executive Officer, Keith Boyle

Strategic Importance of Maritime Acquisition

Securing Critical Infrastructure & Production

The November 2025 acquisition of Maritime Resources fundamentally transformed New Found Gold's development trajectory. Closing on November 13th, remarkably, one day after Hammerdown poured its first gold, this transaction delivered two critical assets: the producing Hammerdown underground mine and the fully permitted Pine Cove mill with associated tailings facilities. The strategic timing proved exceptional, as New Found Gold immediately inherited a functioning operation rather than assuming construction risk.

For Queensway's development pathway, securing milling capacity represented the essential missing piece. The company's Preliminary Economic Assessment outlined a 700-ton-per-day production scenario requiring processing infrastructure that would otherwise demand substantial capital investment and lengthy permitting timelines. The Pine Cove mill eliminates these obstacles, providing permitted capacity that can process Queensway ore with minimal modifications. This infrastructure advantage accelerates the development timeline while reducing upfront capital requirements.

Beyond infrastructure access, the Hammerdown mine generates near-term value through production cash flow. While Maritime Resources brought the project into production, the operation required additional technical rigor and capital investment to reach optimal performance. Boyle acknowledged this reality:

"They did a great job, but it was on a shoestring budget. So we've got to take the time to properly ramp it up."

New Found Gold deployed a specialized team led by Chief Operating Officer Rob Assabgui to implement enhanced grade control procedures. The appointment of a new mine manager with strong geological credentials reflects management's understanding that narrow-vein mining demands precise ore delineation to minimize dilution. These operational improvements should enhance metal recovery while reducing processing costs, directly impacting cash margins.

The Cash Flow Financing Strategy

The cash flow dynamics carry strategic significance for Queensway financing. As Boyle explained:

"The second part of the strategy was that that cash flow would become, if you will, the equity portion of our project financing for Queensway."

This approach offers multiple advantages. First, production cash flow provides tangible demonstration of management's operational capabilities to potential lenders, improving debt financing terms. Second, using Hammerdown profits as equity contribution reduces dilution to existing shareholders compared to raising the full $155 million through equity offerings. Third, steady cash generation from a producing asset improves the company's overall risk profile, potentially lowering capital costs.

The Maritime property package also includes exploration potential that has received minimal historical attention. President Melissa Render will oversee exploration programs designed to extend mine life and potentially identify new zones. Any success on this front would enhance Hammerdown's value as a cash-generating asset while the company advances Queensway through development. The transaction structure reflects sophisticated strategic thinking, creating a self-funding mechanism that generates cash flow during Queensway's development phase while reducing equity dilution.

Exploration Potential & Grade Control

Grade Control Drilling Delivers Exceptional Results

New Found Gold's recent drilling results underscore the exceptional grade characteristics that distinguish Queensway from typical gold projects. The company released assays from grade control drilling at the Keats zone, representing only 20% of expected results from this program, with intercepts displaying spectacular grades. This tight-spaced drilling at five-meter centers provides critical data for resource estimation and mine planning, particularly for deposits exhibiting nuggety gold characteristics.

Grade control drilling serves a specific technical purpose distinct from resource expansion work. As Boyle explained: "When you mine narrow veins, and we hear the words nuggety gold and whatnot, geologists have to estimate between two data points the amount of gold between them." Standard resource drilling typically spaces holes at 25 to 50 meters, leaving substantial interpolation between pierce points. For deposits with coarse-grained gold and significant grade variability, this spacing introduces estimation uncertainty.

The five-meter drill spacing dramatically reduces this uncertainty. By creating a dense data grid, geologists can map grade distributions with far greater precision, identifying high-grade shoots and understanding continuity patterns. This information proves essential for mine planning, allowing engineers to design stope sequences that target the richest zones first, maximizing early cash flow. Additionally, detailed grade knowledge enables more accurate dilution estimates, improving confidence in production forecasts.

The implications for resource estimation are significant. Boyle noted that "when you put out an initial resource it's normal, it's natural for geologists to be conservative in the way they estimate the gold, in particular in a nuggety deposit." Conservative assumptions protect against overstatement, but they may also underrepresent actual metal content in zones with insufficient data density. The grade control program should support resource upgrades as geological understanding improves.

New Found Gold completed approximately 70,000 meters of drilling in 2025, with 80% directed toward project advancement rather than pure exploration. This allocation reflects management's focus on de-risking known zones and advancing toward production decisions. The grade control work encompasses both the Keats and Iceberg zones, the two primary areas outlined in the Preliminary Economic Assessment as initial mining targets.

District-Scale Discovery Potential

Beyond the immediate mine plan areas, New Found Gold continues targeting exploration prospects across the broader property package. The Dropkick showing, located 11 kilometers north of existing resources, recently returned results that "rival what we just released" according to Boyle. This discovery demonstrates the district-scale potential of the property, suggesting multiple high-grade zones remain to be discovered.

The Dropkick results carry strategic importance beyond immediate resource addition. They validate the geological model that predicts multiple parallel vein systems across the property, each potentially hosting high-grade mineralization. If drilling confirms Dropkick as a significant zone, it could warrant inclusion in future mine planning, extending project life and improving overall economics.

President Melissa Render's mandate includes systematic exploration of these satellite targets while advancing the core Keats and Iceberg zones. This balanced approach recognizes that proving up additional high-grade zones enhances the project's attractiveness to lenders and strategic partners while providing option value for future expansion. As Boyle noted:

"We'll be following up with a fulsome exploration program at Queensway."

The grade control emphasis reflects New Found Gold's operational philosophy. High-grade narrow vein mining succeeds or fails based on grade control precision. Excessive dilution destroys economics in narrow vein systems, while accurately targeting the richest portions of veins while minimizing waste maximizes mill feed grade, directly improving cash margins.

Future Plans & Project Financing

Structuring the Optimal Finance Package

New Found Gold's 2026 roadmap centers on three parallel workstreams: permitting Queensway, structuring project financing, and ramping Hammerdown to steady-state production. The company's appointment of Cutfield Freeman as financial advisor signals serious progress toward securing project debt. Cutfield Freeman brings specialized expertise in mine finance, with a track record of structuring debt packages for development-stage mining projects globally.

The financing target remains clearly defined: $155 million initial capital requirement as outlined in the Preliminary Economic Assessment for a 700-ton-per-day operation. This relatively modest capital intensity reflects several factors: acquisition of existing mill infrastructure, straightforward underground mining methods, and reliance on contract mining to avoid equipment capital outlays. The smaller capital requirement improves financing feasibility, as lenders face less exposure compared to larger projects.

Boyle indicated the goal of finalizing optimal financing structure by end of Q2 2026, a timeline that aligns with permitting progress and technical report completion. The company plans to deliver updated technical reports for both Hammerdown and Queensway during 2026, incorporating the extensive drilling completed in 2025. These reports will provide lenders with comprehensive technical data supporting feasibility assessments.

The debt financing approach offers significant advantages for existing shareholders. As Boyle emphasized, Hammerdown cash flow "would become the equity portion of our project financing for Queensway." This structure minimizes dilution by using operating cash rather than issuing new shares for the equity component. Assuming Hammerdown reaches steady-state production generating $20-30 million annually in free cash flow, the company could contribute meaningful equity over an 18-24 month development period.

Permitting Timeline & Development Milestones

Permitting represents another critical 2026 milestone. The company expects to submit the Queensway permit application in Q1 2026, initiating the regulatory review process. Newfoundland offers more streamlined permitting compared to other Canadian jurisdictions, though comprehensive environmental assessment remains required. Management anticipates permit approval during the latter half of 2026, enabling development commencement shortly thereafter.

Development activities will accelerate once permits are in hand and financing closes. Long-lead equipment items require ordering well in advance of actual installation, necessitating procurement decisions during the financing period. Underground development of access drifts and ramp systems typically proceeds for 12-18 months before ore production commences, setting the timeline for late 2027 commercial production.

The Hammerdown ramp-up continues throughout this period. Management projects the first half of 2026 as the critical phase for achieving steady-state operations. As Boyle noted:

"It'll fund itself to get the rest of that capital in place. And then from there on, it'll be a steady production and a good cash flow from the operation."

This self-funding characteristic proves important, as it avoids requiring equity capital for Hammerdown improvements while Queensway financing proceeds.

The deployment of Rob Assabgui and the specialized technical team to Hammerdown demonstrates management's commitment to operational excellence. Proper grade control implementation, optimized mining sequences, and efficient processing should drive improvements in recovered metal per ton milled. Even modest grade increases materially impact cash generation from the same tonnage throughput.

Exploration programs will continue across both property packages during 2026. While project development activities dominate the capital allocation, maintaining exploration momentum serves multiple purposes: additional high-grade discoveries improve project economics by extending mine life, exploration success generates positive newsflow supporting share price, and systematic exploration addresses the geological potential across the property.

The integration of Hammerdown exploration under Melissa Render's oversight represents a shift from Maritime Resources' historical approach. As Boyle observed: "They didn't really look at the property," suggesting that limited exploration budgets constrained regional work. New Found Gold's larger balance sheet enables more ambitious programs targeting mine life extension and new zone discovery.

The 2026-2027 execution period represents a critical phase for New Found Gold. Success requires coordinating multiple complex workstreams: maintaining Hammerdown production, closing project financing, completing permitting, and commencing development, all while managing exploration programs. Management's track record of delivering on stated objectives during 2025 provides confidence in their ability to execute this integrated strategy.

The Investment Thesis for New Found Gold

• High-grade asset quality: Queensway demonstrates exceptional grades in narrow vein systems, with recent grade control drilling confirming continuity and grade characteristics that support robust economics even at modest production scales
• Near-term cash flow catalyst: Hammerdown mine began producing gold in November 2025, with ramp-up to steady-state production during H1 2026 expected to generate substantial free cash flow that reduces financing risk and shareholder dilution
• Permitting and infrastructure advantages: Acquisition of fully-permitted Pine Cove mill eliminates major development obstacle while Newfoundland's favorable regulatory environment supports timely Queensway permitting through 2026
• Proven management execution: Management team delivered on stated 2025 objectives including PEA publication, Maritime acquisition, and extensive drilling programs, demonstrating capability to advance complex multi-asset development strategy
• Self-funding development pathway: Integration of producing asset cash flow with structured project finance minimizes equity dilution for Queensway's $155 million capital requirement, preserving shareholder value through the development phase
• District-scale exploration potential: Ongoing discoveries like Dropkick demonstrate property-wide prospectivity extending well beyond current resources, providing significant option value for future production expansion and mine life extension
• De-risked technical approach: Investment in dense-spaced grade control drilling reduces estimation uncertainty and optimizes mine planning, directly addressing the key technical challenges of high-grade narrow vein mining
• Strategic timing with gold fundamentals: Development timeline targeting late 2027 production aligns with constructive outlook for gold prices driven by monetary policy dynamics, geopolitical uncertainty, and central bank demand

Macro Thematic Analysis: High-Grade Gold in an Uncertain World

The investment case for high-grade gold producers strengthens as global monetary dynamics and geopolitical uncertainty create sustained demand for gold as a monetary alternative and portfolio hedge. Central banks continue accumulating gold reserves at historically elevated rates, removing significant supply from markets while signaling concerns about fiat currency stability and geopolitical fragmentation. The diversification of reserve assets away from dollar-denominated instruments represents a structural shift rather than cyclical phenomenon, providing sustained bid support for gold prices.

High-grade gold operations generate disproportionate margins during periods of elevated gold prices. Unlike bulk-tonnage operations where costs per ounce remain relatively fixed regardless of gold prices, high-grade producers benefit from operating leverage. Modest increases in gold prices flow directly to bottom-line profitability because extraction costs remain concentrated in relatively small ore volumes. New Found Gold's strategy of targeting high-grade core zones positions the company to maximize this operating leverage, potentially generating exceptional returns if gold prices sustain current levels or move higher.

The supply-side dynamics for gold also favor high-grade discoveries. Global gold production has plateaued despite aggressive exploration spending during the 2010s, as deposit quality declined and major discoveries became increasingly rare. The lack of significant new high-grade deposits means that projects like Queensway, which demonstrates exceptional grades in accessible jurisdictions, command premium valuations from both strategic acquirers and capital markets. This scarcity premium should support New Found Gold's valuation as the company advances toward production.

Geographically, Newfoundland offers advantages that enhance project attractiveness. Canadian mining jurisdictions provide strong property rights, transparent regulatory processes, and stable political environments - factors increasingly valued as mining companies reduce exposure to higher-risk jurisdictions. The province's demonstrated support for mining development, combined with existing infrastructure and skilled labor availability, reduces development risk compared to frontier regions requiring infrastructure construction and workforce development.

The financing environment for gold projects has improved markedly as institutional investors reassess the sector. After a decade of underinvestment following the 2011-2015 bear market, capital availability has increased as gold prices strengthened and producers demonstrated capital discipline. Streaming companies, private equity funds, and traditional project lenders have all increased appetite for gold development projects, creating competitive dynamics that benefit developers seeking optimal financing terms.

From a portfolio construction perspective, New Found Gold offers differentiated exposure within the gold sector. Major producers provide safe, diversified exposure but generate modest returns due to size and portfolio complexity. Pure exploration companies offer potential multi-bagger returns but carry high binary risk. New Found Gold occupies a middle ground: producing asset providing near-term cash flow and downside protection, advanced-stage development project with clear path to production, and significant exploration upside providing option value.

As Keith Boyle emphasized regarding Queensway's fundamental advantage: "That high-grade core is really what we're after to get that cash flow quickly. So even if you start a small mine, we can get cash flow." This statement encapsulates the strategic logic underpinning the investment thesis - high-grade zones generate disproportionate value, enabling capital-efficient development and rapid returns even at modest production scales. In an uncertain macroeconomic environment where gold serves as monetary insurance, high-grade gold producers offer leveraged exposure to this fundamental demand dynamic.

TL;DR Summary

New Found Gold is executing a capital-efficient strategy combining near-term production from the newly acquired Hammerdown mine with development of the high-grade Queensway project targeting late 2027 commercial output. The Maritime acquisition delivered critical infrastructure including the permitted Pine Cove mill and a producing gold mine that poured first gold in November 2025. Management is advancing Queensway development with 70,000 meters of drilling completed in 2025, including extensive grade control work at five-meter spacing that confirms exceptional grades in the Keats and Iceberg zones. The company has appointed Cutfield Freeman to structure project financing for Queensway's $155 million capital requirement, with Hammerdown cash flow serving as equity contribution to minimize shareholder dilution. Permit submission is scheduled for Q1 2026 with approval expected in H2 2026, enabling development commencement. The property demonstrates district-scale exploration potential with recent discoveries at Dropkick, located 11 kilometers from existing resources, showing similar high-grade characteristics. This integrated approach de-risks development while maintaining significant exploration upside across both property packages.

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