APPLETON, NFLD. – New Found Gold (TSXV: NFG; NYSE-A: NFGC) is counting on an expansion of its Pine Cove mill in Newfoundland and the development of the nearby Queensway project to cement its status as a midsized gold producer.
Together with the newly producing Hammerdown gold mine, Pine Cove is one of the key assets that New Found added last year when it completed the $292-million (US$206 million) acquisition of Canada’s Maritime Resources. Located 180 km apart in a central part of the island, Queensway and Hammerdown will share Pine Cove and the Nugget Pond hydrometallurgical plant after the future mine starts producing late next year.
“Things are happening, and they’re unfolding the way that they should,” CEO Keith Boyle said in an interview about the company’s development plans.
“We acquired Pine Cove in order to fast track the Queensway development. It bought us three years of permitting and construction” lead time, he said.
Watch a video of the site visit below:
Environmental assessment
Boyle spoke ithis month as Vancouver-based New Found hosted analysts, investors and reporters to show off Queensway, Pine Cove and Hammerdown.
As press time neared, New Found was waiting to receive the environmental assessment permit for Queensway under an expedited 45-day timeline. A resource update and revamped preliminary economic assessment (PEA) should follow in the second half.
A positive environmental assessment decision “would move Queensway from permitting toward execution,” SCP Resource Finance mining analyst Brandon Gaspar, who visited the site, wrote in a note June 19.
Emerging producer
Once confined to exploration, New Found is adapting to life as a producer after taking over Hammerdown. Crews at the mine poured first gold in November.
Commercial production at Hammerdown, which is located about 95 km from Pine Cove, should be declared in this year’s second half, Boyle said. Hammerdown is expected to produce about 251,000 oz. over a 13-year mine life, according to a company presentation.
The site has 3.33 million measured and indicated tonnes across three pits grading 2.43 grams per tonne for 260,000 oz. contained metal, according to a PEA this year. It also has 2.13 million inferred tonnes at 2.34 grams for 161,000 ounces.
Boyle and his colleagues on New Found’s management team are even more sanguine about Queensway’s prospects.
A view of the Queensway project area. Credit: Frédéric Tomesco
Located about 15 km west of Gander, on the Trans-Canada Highway, Queensway covers more than 110 km of strike on two primary fault zones, Appleton and Joe Batt’s Pond, which are most commonly associated with the mineral showings on the property.
New Found spent several years consolidating the large regional land package that encompasses the two fault zones. Newfoundland’s Keats family, including veteran prospector Allan and his son Kevin, previously owned the land package that hosts Queensway’s Keats and Iceberg deposits.
“This is a family of prospectors,” New Found president Melissa Render told The Northern Miner at Queensway. “They drilled the initial holes that identified the low-grade mineralization at Keats. They also had uncovered the Dome prospect.”
After New Found came in and optioned the land, “they did a step out and their first hole went into the high-grade ore shoot that associated with the Keats zone,” Render added. Drill hole NFGC-19-01 cut 19 metres at 92.86 grams gold per tonne in 2019.
“That’s really what launched the project forward and enabled them to finance that first 100,000-metre drill program. Things snowballed from there to where we are now, with many discoveries coming online since then.”
Engineering discipline
Developing Queensway is estimated to cost $1.07 billion, including $325 million of sustaining capital, New Found says in a slide presentation. Montreal-based engineering services firm WSP was hired in January to advance Queensway and “put some engineering discipline in what we had to do,” Boyle said.
New Found envisions Queenway producing an average of 100,000 oz. gold a year over a projected 15-year life. The project has 18 million indicated tonnes grading 2.4 grams gold for 1.39 million oz. gold, plus 10.7 million inferred tonnes at 1.77 grams for 610,000 oz. contained metal, the company said in its first resource last year.
New Found has adopted a phased approach to build its second operating asset.
Stage one will see the construction of an open-pit mine with off-site toll milling. Its $155-million cost estimate, as outlined in the PEA, includes about $40 million for mill upgrades at Pine Cove. A $220-million financing package, completed in April, gives New Found the money needed “to get to the finish line,” Boyle said.
Stage two – at $442 million, the costliest of all three phases – will include open-pit mining with the construction of an on-site processing plant that would open in year four. Stage three would involve building an underground mine, with development scheduled to start in year 5.
Construction of stages two and three would begin in the first quarter of 2029, with production from the second stage starting about two years later, chief operating officer Rob Assabgui said.
“By breaking the project into small steps, we’ve reduced the capital and we’ve increased the speed to production,” Assabgui told The Northern Miner in an interview. “All of these steps have allowed to get from PEA to operations in under two years.”
Growth story
First gold pour from Queensway’s initial stage is expected by year-end 2027, pending reception of the required permits.
Queensway “is increasingly evolving from a discovery story into a staged production growth story built around the existing Pine Cove/Hammerdown platform,” Gaspar wrote.
A view of the tailings pond area outside the Pine Cove processing mill. Credit: Frédéric Tomesco
Key infrastructure works planned for Queensway during the next year or so include the relocation of three power lines that traverse the property, Assabgui said.
For now, New Found plans to operate four pits at Queensway: Keats, Iceberg, Dome and Lotto. The ore will be shipped to Pine Cove for processing so that all the tailings are stored near the mill, Assabgui said.
None of this would be possible without Pine Cove’s expansion, which will see daily output double to 1,400 tonnes by the time gold is mined at Queensway.
For now, Pine Cove includes a ball mill, four flotation cells, four leach tanks, two drum filters, a Merill Crow circuit, onsite refining and in-pit tailing storage space.
“It’s a unique flowsheet. There aren’t very many mills like this,” Assabgui said.
Recovery rates have been an issue, averaging no more than 88%, which is why New Found is in the process of installing a gravity carbon-in-leach (CIL) circuit at the mill. Converting Pine Cove to CIL technology will boost recovery rates to 92-93%, Assabgui said.
“The plan is to commission the new circuit standalone and continue to operate Hammerdown,” he said. “We are protecting the revenue stream.”
Pine Cove’s expansion will also give New Found the capacity to process additional quantities should exploration at Queensway unearth new deposits.
“We have more optionality and flexibility that is not included in any PEA,” Assabgui said. “If we have more ore available at Queensway at 6, 7 or 8 grams per tonne, we can handle it.”
This month, New Found expanded its $44-million drilling program at Queensway to six rigs from four. After completing 74,000 metres of diamond drilling in 2025, it plans to drill about 90,000 metres this year across exploration and infill targets.
Shallow drilling
Much of the drilling both at Queensway and Hammerdown “remains shallow, leaving significant potential for both down-plunge and district-scale growth beyond the current resource base,” Gaspar said in his note.
Key targets at Queensway include AFZ Core, where deeper drilling will focus below the current resources; AFZ Peripheral, which includes the Dropkick zone; and regional zones such as Paul’s Pond and Greenwood in Queensway South, and Gazeebow South in Queensway North.
Boyle describes Queenway’s exploration package as “camp-scale.”
“We have way too many targets not to be successful.”
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