New Found’s Queensway drilling lifts explorer back into billion-dollar territory

New Found Gold Queensway Keats WestThe core shack at New Found Gold's Queensway gold project in Newfoundland. Credit: New Found Gold

New Found Gold‘s (TSXV: NFG) high-grade Queensway project in central Newfoundland may be fundamentally altered after surprising drilling results from a zone it nearly dismissed.  

This week the Vancouver-based company reported diamond drill hole NFGC-22-960 at the Keats West area intersected 42.6 grams gold per tonne over 32 metres. That followed last week’s 18.6 grams gold per tonne over 15.95 metres in hole NFGC-22-773, located 200 metres up-plunge. 

These assays from the west side of the Appleton fault running northeast through the province just west of Gander compare with the first Queensway hole, which returned 19 metres grading 92.9 grams gold per tonne. It was drilled at the Keats area on the east side of the same fault in 2019.  

Later high-grade discoveries further north on the same line as Keats, at the Golden Joint and Lotto zones, appeared to confirm the east side of the fault as the project’s best target area, New Found chief executive officer Collin Kettell said in an interview on Monday.  

“We had a mentality that the east side was pregnant with gold but maybe the west wasn’t,” Kettell said by phone. “The discovery we had over on the west side is truly transformational for the company.”  

It gives New Found another zone of major significance and a large untested area to continue drilling at its 1,650-sq.-km Queensway project. The company is vying with other explorers such as Labrador Gold (TSXV: LAB; US-OTCQX: NKOSF) and the smaller Exploits Discovery (TSXV: NFLD) to drill along Appleton and other faults in a central Newfoundland exploration surge.  

Marathon Gold (TSX: MOZ) has the region’s most advanced project, with its nearly $500-million Valentine open-pit and mill beginning construction now about 200 km west of Gander.

Appalachian orogeny

The province’s system of faults including the Valentine, Dog Bay, Appleton and the Gander River Ultramafic Belt formed about 480 million years ago during the closing of the Iapetus Ocean. Geologists say this Appalachian orogeny formation, boasting discoveries from South Carolina to Ireland, could rival the Golden Triangle in northwestern British Columbia and the Abitibi belt straddling Ontario and Quebec.

Monday’s result of the Keats West intercept had 19 sub-intervals grading more than 10 grams per tonne, supporting the target’s potential as a second high-grade zone at Queensway after the original Keats discovery, according to Andrew Mikitchook, an analyst based in Toronto for BMO Capital Markets.  

“This clearly demonstrates the extensive occurrences of high-grade mineralization across the full intercept length,” Mikitchook wrote in a note on Monday. “The results suggest to us the possibility of an open-pit target at Keats West.”  

CEO Kettell said it was too early to determine exactly how to develop Queensway, with any economic studies likely more than a year away. But he agreed evidence was mounting to back an open-pit concept, at least to start.  

“Mineralization does ‘daylight’ in more than one zone, which obviously is well-suited to an open-pit scenario,” he said. “The zones seem to extend to depth and we haven’t drilled very deep with these orogenic systems known to go deeper than they express themselves on surface. Ultimately you would think Queensway would evolve into an underground scenario if it doesn’t start underground.” 

Kettell, 32, brings family experience with turning a discovery into a multi-billion-dollar acquisition. His father, Ralph Kettell, helped stake the Long Canyon gold deposit in Nevada in 2003 and steered it to an eventual purchase by Fronteer Gold, itself later purchased by Newmont (TSX: NGT; NYSE: NEM) for $2.3 billion in 2011.  

“It impressed upon me the different things that have to be done to take a company private, raise money privately and go public,” the son said. “It also impressed on me just the premium that a takeover can command, especially at the top of a bull market.” 

Kettell says he’s open to the idea of a similar destiny for Queensway, or developing it to production through New Found.  

“If along the way a large company comes to us and offers us a number that’s bigger than we can say ‘no’ to, then that might be the way that things go,” Kettell said. “We’ve certainly had discussions with companies out there, but I can’t say any more than that.” 

Lucky Strike

New Found is focused on Queensway to the point that its Lucky Strike project at Kirkland Lake, Ont., is in limbo and could be sold or partnered with a company bringing in a dedicated team, Kettell said.

Lucky Strike, a 100-sq.-km property in the Abitibi gold belt, holds the past producing Walsh Mine and two exploration shafts at the Copper King and Norwood Kirkland sites.  

Kettell is also founder and CEO of Nevada King Mining (TSXV: NKG), which he said will soon be the second-largest claims holder in that western state behind the Nevada Gold Mines joint venture of Barrick Gold (TSX: ABX; NYSE: GOLD) and Newmont. Nevada King’s chief asset, the Atlanta Mine project, could also soon be on the block, he said. Nevada King has drilled 18,000 metres at the site, which produced gold from 1975 to 1985.  

“If things do continue going in the right direction, in the medium term it would fall into the hands of a mid-tier, or major if it gets big enough, that’s looking to break into the state,” Kettell said.  

The CEO’s market outlook is for gold companies to shine in 2023 after lacklustre performance this year while the yellow metal fared better than companies because it remained a haven in volatile times. The combination of economists forecasting a recession next year and fewer investors being interested in gold company stocks could actually work in the industry’s favour, he said.  

“Any bull market with longevity needs to start from a place where very few people are interested and I can’t think of a better economic situation to be in, perversely because it’s not a good economic situation,” Kettell said. “If it does happen, look for these miners and exploration companies to not just perform well but to really perform exceptionally because of how poorly they’ve been moving up until now.” 

His investment company, Palisades Gold, and high-profile gold investor Eric Sprott each control about 30% of New Found. Shares in the company have shot up 23% since Friday to trade at $6.04 on Tuesday in Toronto, within a 52-week range of $4.03 and $9.64, valuing the company at more than $1 billion. 

The stock’s surge places the company atop the province’s explorers. Its rapid rise to billion-dollar market value is akin to the Great Bear deposit in northwest Ontario that Kinross Gold (TSX: K) acquired for $1.8 billion a year ago, but different because New Found’s discovery was in a virgin area, Kettell said.

“To have something new on the map is just something exciting for the province and for Canada and the mining industry as a whole,” he said. “Before the Queensway discovery, everyone doubted the potential of Newfoundland to have elephant-style gold deposits. We’re changing the thinking on that.” 


4 Comments on "New Found’s Queensway drilling lifts explorer back into billion-dollar territory"

  1. It appears to me that the Keats deposit is for sure amenable to an initial open pit.
    An open pit of free gold without a cyanide circuit with a grade of .25 OPT – 1.0 OPT is something that has never been seen before. The initial waste/ore ratio looks to be small, and with the HUGE margin, the waste-ore ratio eventually can be very high before having to go underground. I estimate a cash cost of less than $500 / ounce for revenue of $1,800 per ton. Close to town on the trans-Canada highway, so site development costs are minimal for CAPEX.
    Now that they have hired a very competent engineer he is likely analyzing the Leapfrog drill data and preparing to dump it into an ore reserve program of his choosing to produce an ore reserve and a preliminary economic estimate to industry standards. A few months away I estimate. Without a doubt the biggest development in the Canadian mining industry for decades. As they have half the drill rigs running to the south doing more exploration similar to the new Keats west discovery, the expansion of the DISTRICT scale deposits discoveries is going to be history making for the industry.

  2. NFGC It just keeps getting better & better
    Doing a great job Collin…

  3. Finally seeing a light at the end of the tunnel! Yreka!

  4. 2023 is the year the mining world wakes up to NFGC its world class high grade gold district

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