New Found Gold's Lotto Excavation: 8 Signals of De-Risking at Queensway

Project Overview

New Found Gold (TSXV: NFG | NYSE American: NFGC) is advancing its 100%-owned Queensway Gold Project in Newfoundland and Labrador toward Phase 1, with first ore to the mill targeted for the fourth quarter of 2027. The deposit is an orogenic, structurally controlled gold system, meaning the gold sits in structures formed during mountain building, and it extends to within a few metres (m) of the surface. It sits within a district-scale land package covering more than 110 kilometres (km) of strike along the Appleton and JBP fault zones. That near-surface geometry is the feature the company is using to reduce geological risk ahead of mining.

The Lotto zone sits in the Appleton Fault Zone Core area, about 1.6 km north of the Keats and Iceberg zones. Phase 1 carries an initial capital cost of C$155 million in the 2025 preliminary economic assessment (PEA) and is fully funded. President of New Found Gold, Melissa Render, leads the exploration programme and reviewed and approved the latest Lotto results.

1. The Excavation & Channel Sampling Method

New Found Gold is confirming its orebody on exposed bedrock as well as in drill core. At Lotto, the company stripped 2.5 to 9 m of overburden to expose mineralised bedrock over a 210-metre-by-70-metre area, uncovering a network of gold-bearing quartz veins over a 210-metre strike length. Geologists then mapped and channel-sampled the exposed rock along 57 lines at 7.5-m spacing, totalling 729 m of samples.

The purpose is direct: to validate the geological and resource models and to lift confidence in resource areas that form part of the Phase 1 mine plan. Seeing the veins in place, rather than reconstructing them from the core, removes a layer of interpretation from the model.

2. A Repeatable Programme Across the Fault Zone Core

Lotto is the third zone to receive the same excavation treatment. New Found Gold first applied it at Keats in 2024 and Iceberg in 2025 before extending it to Lotto in the Appleton Fault Zone Core area.

Running the same method zone by zone builds a consistent, comparable surface dataset across the core mining area rather than a series of isolated tests. Each added zone widens the base of physical evidence underlying the Phase 1 plan.

3. Lotto's Channel & Infill Results

The latest Lotto channel work returned high grades over good widths at surface, on the company's description. Channel sampling highlights include 23.7 grams per tonne (g/t) gold over 15.88 m, 3.38 g/t over 9.07 m, 3.22 g/t over 12.83 m, and 2.17 g/t over 16.36 m. Infill drilling into the underground resource blocks added 43.5 g/t gold over 4.75 m and 22.3 g/t over 3.60 m.

These are near-surface channel intervals and deeper intercepts in the blocks defined for underground mining. Continuity across the channel widths supports a mineable shape, and those widths do as much work here as the peak grades.

4. Results Track the 2025 Block Model

Conformance with the existing model carries more weight here than the headline grades. Both the channel results and the infill holes conform with the initial 2025 mineral resource estimate (MRE) block model, validating the modelled mineralised trends and the key veins. When fresh physical data is overlaid on an existing model without contradicting it, the model becomes more defensible for mine planning.

Confirmation at this stage reduces the risk of a costly remodel as construction decisions approach. On the company's guidance, the channel and mapping results will not shift the future MRE significantly. The model is holding.

5. Grade Variability & True Width Limits

The same dataset shows how unevenly the gold is distributed. A number of channels and drill holes returned no significant values, and the company states that the channel and mapping results demonstrated the local variability characteristic of a coarse, free-gold quartz vein system. True widths carry additional uncertainty because secondary veins crosscut the moderately to steeply dipping host structures.

Management points to grade control as the operational answer in narrow-vein deposits. Chief Executive Officer of New Found Gold, Keith Boyle, made the point about the narrow-vein orebody the company is currently mining at Hammerdown:

"Because it's a narrow vein deposit, grade control is what's critical, and the team that we've built on site has done a great job."

The barren intervals sit in the same dataset as the high-grade hits. That is how a coarse-gold vein system behaves.

6. Resource Conversion From Inferred to Indicated

The infill drilling is aimed as much at the resource category as at the grade. The 2025 Lotto infill drilling was completed as part of a broader geotechnical programme targeting the Phase 2 open pit and Phase 3 underground, while also serving as infill to support conversion of open pit and underground areas of the block model from the inferred to the indicated category. Additional infill is still required to complete the Lotto conversion, and that drilling is targeted for the second half of 2026.

The infill results are to be incorporated into the next MRE update, with the 7.5-m channel data feeding future estimates. Mine plans and project financing draw on indicated resources, not inferred, which is what makes the conversion work consequential.

7. Building & Sequencing the Mine

Two decisions have changed since the PEA, one aimed at delivery risk and one at processing capacity. New Found Gold is targeting a start at Queensway with a contract miner before moving to an owned fleet. Rather than build a new plant for Phase 1, it plans to double the capacity of the existing Pine Cove mill, already designated in the PEA to process Phase 1 ore, applying the ramp-up experience it is gaining at Hammerdown.

Boyle frames the sequencing plainly:

"It's really using Hammerdown to leverage an understanding, because as a new company, all this stuff is brand new. By doing it on Hammerdown first, we're really going to hit the ground running at Queensway."

Proving the methods on a smaller operation first applies the same logic the company uses at surface: reduce the unknowns before committing capital at scale.

8. The Catalyst Stack Into Late 2026

An updated technical report and an active permitting process run through the second half of 2026. The Lotto results feed into that report, which is to include an updated MRE. In parallel, the 2026 programme of 90,000 metres of diamond drilling is underway, with about 40,100 m completed across 284 holes by July 2026 and roughly 6% of the 2025 results still to be reported.

Together, these convert the surface and infill work into an updated resource picture investors can price. The technical report is the point at which the excavation, channel, and infill data cease to be individual results and become a single, revised model.

The permitting track runs alongside it. In July 2026, Minister of Environment, Conservation and Climate Change for Newfoundland and Labrador, Chris Tibbs, notified the company by decision letter that an Environmental Preview Report is required for Queensway Phase 1, following the environmental registration submitted in April 2026 and the start of the assessment process in May 2026. Guidelines for the report are due within 60 days of the letter; thereafter, the submitted report undergoes a 35-day public review, and the Minister issues a decision within 45 days of submission.

Key Takeaway for Investors

• Surface excavation and channel sampling enabled New Found Gold to confirm the Queensway orebody on exposed bedrock and in core.
• The method has been repeated at Keats, Iceberg, and now Lotto, building a consistent surface dataset across the core mining area.
• The latest Lotto channel and infill results returned high grades over good widths and conform to the existing block model.
• Localised barren intervals are inherent to a coarse, free-gold vein system, and true-width uncertainty follows from secondary veins crosscutting the host structures.
• Infill drilling is converting resources from inferred to indicated, feeding an updated mineral resource estimate and technical report due in the second half of 2026.

Bottom Line

New Found Gold is using surface-level tools that the company calls cost-effective to de-risk an expensive decision. Excavating and channel sampling at Lotto, then confirming the results against the block model, tightens confidence in the veins that will feed Phase 1 before any mining commitment. The barren intervals are a feature of coarse-gold geology, and the infill drilling is steadily moving blocks toward the indicated category that the mine plan needs. The read for investors arrives with the updated MRE and technical report in the second half of 2026, against a Phase 1 targeting first ore in late 2027.