Market Movers: New Found Gold Momentarily Crosses $700 Million Valuation

New Found Gold (TSXV: NFG) went gangbusters this morning, moving as high as $4.90 before falling lower later in the day. At the the height, the company saw its equity up as much as 9.4%, cresting a $700 million valuation – a remarkable gain considering it actually opened the market down 2.5% on the day. Roughly a million shares were traded on the company in the first half of the day.

The apparent excitement surrounding the company appears to be in connection to Tuesday’s announcement of further development at the Keats Zone at the Queensway Project in the Exploits subzone of Newfoundland. Drilling continues on site in connection with a 100,000 metre diamond drill program.

The latest results feature step out drilling from the results released by the company in 2019 (largely that of hole NFGC-19-01) that ultimately lead to the go-public transaction of New Found Gold. Step outs conducted 10 metres from the hole of initial discovery resulted in intercepts of 22.3 g/t gold over 41.35 metres and 31.2 g/t over 18.85 metres. More significantly however, is that the intervals are first hit at depths ranging from 82.7 metres to 101.7 metres – meaning if a meaningful resource is established, at these depths it’s easily open pit mineable.

To date, only four of the eight step out drill results have seen assays completed. The first four were assayed on a rushed basis due to the significant quartz veining found in the cores, as well as sulfide mineralization and visible gold that was present. The remaining four holes from the 3 x 3 step out pattern are currently being assayed on a rush basis, along with step out drilling that was conducted 50 metres to the north and south of hole NFGC-19-01.

The discovery is said to be along the Appleton Fault line, a fault that runs just east of the Dog Bay Line that runs through much of Newfoundland within the Exploits Subzone. Located in the northern portion of the Queensway project, the discovery is bordered to the north by Labrador Gold’s (TSXV: LAB) Kingsway Project, and two kilometres to the west by Exploits Discovery Corp’s (CSE: NFLD) Mount Peyton property, the latter of which has had notable historical outcrop samples as high as 164 g/t gold. Notably, the fault also runs through Exploits property to the north as well.

Most significantly, the results released Friday points towards strong continuity of veining and high grade gold mineralization. The company has indicated that historic work on the property has indicated mineralization has a strike of over 300 metres, with the target remaining open along strike and to depth. Further, the company intends to continue step out drilling from the recent discovery to test the larger area.

Despite the significant results posted to date, it should be stated that the company remains a junior exploration firm with no current resource estimate. The current valuation that sits north of $650 million as a result is something that needs to be considered in the context of the valuations of surrounding explorers whom are likely to have the same style of mineralization on their own property, especially those of whom that have the same fault line travel through their own property.

New Found Gold last traded at $4.55 on the TSX Venture.

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Information for this briefing was found via Sedar and New Found Gold. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

FULL DISCLOSURE: Exploits Discovery Corp is a client of Canacom Group, the parent company of The Deep Dive. The company has been compensated to cover Exploits Discovery Corp on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.