New Found Gold Shifts from Discovery to Engineering De-Risking, Reframing Queensway's Valuation Path

• Queensway is entering the most critical value-creation phase for any high-grade gold discovery, where drilling success must translate into mineable, engineered ounces.
• The 2025 infill drilling programme at Monte Carlo emphasizes geological consistency and block-model validation rather than new headline intercepts.
• With more than 95% of the 70,000-metre drill programme complete as of December 2025 and parallel geotechnical and hydrogeological work underway, the project is advancing toward engineering-defined status.
• Resource conversion from inferred to indicated categories and underground potential remain unresolved until the planned H1 2026 Mineral Resource Estimate update.
• The next valuation inflection is tied less to grade discovery and more to execution certainty, capital discipline, and mine-planning confidence.

Why Markets Re-Price Gold Discoveries at the Engineering Phase

The transition from discovery to development represents one of the most consequential valuation shifts in the mining sector. Initial market enthusiasm for high-grade intercepts often gives way to more sober assessments as projects approach the engineering gate, where geological promise must be converted into bankable mine plans.

The Industry Pattern: Discovery Premiums Fade Without Engineering Proof

Markets have historically rewarded high-grade gold discoveries with premium valuations during the exploration phase. However, this premium erodes rapidly when projects fail to demonstrate the engineering certainty required for financing and construction. The critical inflection points that separate successful developers from stalled projects include infill drilling density sufficient to support indicated resource classifications, geotechnical confidence enabling pit and underground design parameters, and systematic conversion of inferred ounces into categories that carry financing weight.

Queensway now sits at precisely this threshold. Having established its presence as a high-grade discovery of scale, the project's valuation trajectory depends on its ability to deliver engineering-grade data that satisfies institutional due diligence requirements.

The Cost of Getting It Wrong

Failed or delayed gold projects share common characteristics: inadequate early-stage engineering, optimistic assumptions about geological continuity, and insufficient attention to geotechnical and hydrogeological risk. The consequences for investors manifest in capex overruns, permitting delays, and All-In Sustaining Cost (AISC) inflation that erodes project economics.

Keith Boyle, Chief Executive Officer of New Found Gold, frames the company's current approach in terms of systematic execution:

"We're in the midst of ramping up production at Hammerdown to produce gold next year and advancing the Queensway gold project to production in the latter half of 2027."

Queensway's Shift from Optical Success to Economic Validation

Queensway's early narrative centered on discovery, specifically the high-grade intercepts that established its position among significant Canadian gold discoveries. The current phase requires a fundamentally different set of objectives.

From High-Grade Headlines to Block Model Reliability

The distinction between optical milestones and economic milestones defines the challenge facing Queensway. Early-stage intercepts exceeding 20 grams per tonne gold represent geological success, but they do not, on their own, confirm that ore can be extracted profitably at scale. Economic milestones require demonstrated resource confidence, pit optimization parameters, and engineering data sufficient to support capital allocation decisions.

As of the March 2025 MRE, Queensway holds 1.392 million ounces in the Indicated category at 2.40 g/t Au and 608,000 ounces Inferred at 1.77 g/t Au. The planned H1 2026 MRE update will determine whether infill drilling has successfully converted additional inferred material into higher-confidence categories.

Monte Carlo Infill Drilling: What Continuity Actually Signals

At the current stage, continuity matters more than grade. Mining selectivity, dilution control, and scheduling confidence all depend on the degree to which actual geology matches modeled expectations. Recent Monte Carlo infill results, including 22.4 g/t Au over 4.75 metres, indicate alignment with prior geological interpretations, reducing model risk and providing foundation for updated resource estimates.

Keith Boyle describes the nature of the grade control work:

"It was results from a grade control drilling program. We're drilling at 5-metre centers in the area where we will begin mining. We felt it important to get those assays out right away to show people what we're getting in the area that we'll be mining right up front."

Where Execution Is Being De-Risked

The de-risking process at Queensway extends beyond drilling to encompass the full range of engineering inputs required for a financeable mine plan. Progress across these workstreams signals the transition from exploration asset to development-ready project.

Resource Continuity & Predictability

Infill drilling confirms three critical parameters: vein persistence, grade distribution, and geometry reliability. Each factor feeds directly into mine scheduling assumptions and cut-off grade confidence. The 5-metre drill spacing provides the resolution necessary to validate block model estimates and reduce variance between planned and actual production grades.

Keith Boyle emphasizes the data density objective:

"With this very tight drilling pattern we're able to fill in the holes of that data and provide them with the information necessary to then update the resource."

Programme Completion as an Execution Signal

As of December 2025, more than 95% of the 70,000-metre drill programme has been completed, with conclusion targeted by year-end. This represents more than scale; it signals execution discipline. Staying on schedule heading into MRE updates and permitting windows demonstrates the operational capability that institutions require before committing development capital.

Engineering Workstreams Running in Parallel

Beyond resource drilling, several technical workstreams are advancing concurrently. Geotechnical drilling provides slope stability parameters for pit design. Hydrogeological studies inform water management infrastructure requirements. Condemnation drilling clears areas designated for plant siting and surface facilities.

The November 2025 closing of the Maritime Resources acquisition brought the Pine Cove Mill, with its 1,300 tonnes per day nominal throughput capacity and full permitting, under New Found Gold's control. This infrastructure now supports the broader development strategy.

Keith Boyle notes the integrated infrastructure approach:

"When we put out the PEA we said we're going to start with a 700 tonnes per day operation at a mill somewhere in Newfoundland. With the acquisition of Maritime, we managed to put our hands on that mill."

Where Execution Remains Unproven: The Choke Points Investors Must Track

Despite meaningful progress, several critical uncertainties remain unresolved. Investors should track these items as indicators of whether Queensway can complete the transition to a fully de-risked development asset.

Inferred to Indicated: The Real De-Risking Test

Inferred mineral resources carry limited financing value. Most lenders and equity providers assign minimal or zero value to inferred ounces when structuring project finance. Phase 1 and Phase 2 pit economics at Queensway depend substantially on successful conversion of current inferred resources to indicated categories in the planned H1 2026 MRE.

Underground Optionality: Upside Without Current Mine Plan Weight

Monte Carlo's underground extension, outlined in the July 2025 PEA, remains open at depth, representing potential for additional high-grade ounces beyond the current pit-constrained resource. However, this optionality requires careful framing. Underground extensions represent strategic upside, but they are not yet capital-relevant to the near-term development plan.

Keith Boyle characterizes the grade profile:

"We have a very positive, unique characteristic of high-grade core veins. That high-grade core is really what we're after to get that cash flow quickly."

Capital Discipline in a High-Grade Environment

High-grade discoveries create both opportunity and risk. The opportunity lies in superior unit economics. The risk lies in the temptation to accelerate timelines or expand scope before engineering fundamentals are secured.

Why Engineering Confidence Now Drives Cost of Capital

Institutional investors increasingly emphasize AISC reliability, payback period certainty, and capex visibility when evaluating gold developers. Projects that can demonstrate tight confidence intervals around these metrics secure more favorable financing terms. The July 2025 PEA outlines initial capital costs of C$155 million for Phase 1, providing a baseline for financing discussions.

Keith Boyle indicates the company's financing approach:

"With initial capital cost of $155 million as outlined in our PA, we're now in a position to look and advance that project financing. We just announced the appointment of Cutfield Freeman, a well-known financial adviser in the space of project financing, with the objective of FNAT in place by the end of the second quarter of next year."

With a pro-forma treasury of approximately C$87 million as of 30 September 2025 and cash flow from the November 2025 first gold pour at Hammerdown, the company maintains financial flexibility through the permitting and financing process.

Implications for Valuation Metrics

Enterprise value per ounce (EV/oz) sensitivity increases as projects approach development decisions. Two factors dominate this sensitivity: resource category upgrades and mine plan clarity. Queensway's next valuation step will be determined by model outputs rather than discovery headlines.

How Institutional Investors Will Likely Frame Queensway in 2026

The valuation framework applied to Queensway will shift as the project advances through development milestones. Understanding this reframing helps investors anticipate market response to upcoming catalysts.

From Exploration Multiple to Development Benchmark

Current peer comparisons likely position Queensway among exploration-stage companies, where valuations reflect discovery potential and geological upside. As engineering data accumulates, institutional investors will increasingly apply development-stage multiples that emphasize execution capability and capital efficiency.

Keith Boyle outlines the permitting timeline:

"In 2026 we're going to continue on that execution of getting to cash flow at Queensway... We'll submit our permit in the first quarter. In the latter half we expect to get permitted and start the development."

Management targets permit submission in Q1 2026, with approval anticipated in the latter half of 2026, subject to regulatory processes.

Risk-Adjusted Optionality vs. Speculative Upside

Queensway's positioning should be understood as risk-managed optionality rather than speculative exploration exposure. The combination of demonstrated high-grade geology, advancing engineering work, and clear near-term catalysts distinguishes the asset from earlier-stage peers.

The Investment Thesis for Gold Developers Transitioning to Build-Phase Assets

• Engineering validation now outweighs grade discovery in determining capital efficiency and financing access for late-stage gold developers.
• Resource continuity reduces dilution and scheduling risk, supporting stable AISC forecasts that underpin financing confidence.
• Parallel engineering workstreams compress development timelines, improving IRR resilience and reducing time-to-cash-flow.
• Clear execution milestones including updated MRE, permitting submissions, and engineering studies create observable re-rating events.
• Queensway exemplifies this transition, positioning it for valuation frameworks aligned with build-ready developers rather than exploration-stage companies.

When Discovery Ends, Investment Judgment Begins

Queensway's investment relevance now depends less on finding gold and more on proving it can be mined, financed, and scheduled with confidence. The high-grade discovery phase established the geological foundation. The engineering phase will determine whether that foundation supports a mine.

The planned H1 2026 MRE update represents a key milestone. Targeted conversion of inferred resources to indicated categories, combined with advancing engineering studies and permitting progress, will define whether Queensway completes its transition to development-ready status. Disciplined execution, not spectacle, defines long-term mining returns.

TL;DR

New Found Gold Corp is transitioning Queensway from a discovery-phase asset to an engineering-validated development project. The 2025 infill drilling programme at Monte Carlo—over 95% complete—focuses on proving geological continuity rather than headline grades. The H1 2026 Mineral Resource Estimate update represents the key near-term catalyst, with resource conversion from inferred to indicated categories determining financing viability. With C$155 million initial capital requirements, the Maritime Resources acquisition (bringing the permitted Pine Cove Mill), and Cutfield Freeman appointed for project financing, execution discipline now drives valuation. Permit submission targets Q1 2026, with approval anticipated later that year.

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