UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 40-F
x | Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934 |
or
¨ | Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 |
For the fiscal year ended _________
Commission File Number _________
NEW FOUND GOLD CORP.
(Exact name of registrant as specified in its charter)
Canada | 1040 | N/A | ||
(Province or Other Jurisdiction of Incorporation or Organization) |
(Primary Standard Industrial Classification Code) |
(I.R.S. Employer Identification No.) |
1430 – 800 West Pender Street
Vancouver, British Columbia V6C 2V6
604 562-9664
(Address and telephone number of registrant’s principal executive offices)
CT Corporation
28 Liberty Street
New York, New York 10005
(212) 894-8940
(Name, address (including zip code) and telephone number (including area code)
of agent for service in the United States)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class: |
Trading Symbol |
Name of Each Exchange On Which Registered: |
Common Shares, no par value | NFGC | NYSE American LLC |
Securities registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
For annual reports, indicate by check mark the information filed with this form:
¨ Annual Information Form | ¨ Audited Annual Financial Statements |
Indicate the number of outstanding shares of each of the registrant’s classes of capital or common stock as of the close of the period covered by the annual report: N/A
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.
¨ Yes x No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
¨ Yes ¨ No
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.
Emerging growth company x
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.
¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
¨
FORWARD LOOKING STATEMENTS
This Registration Statement on Form 40-F, including the exhibits hereto (collectively, the “Form 40-F”) contains forward looking statements which reflect management's expectations regarding the Registrant’s future growth, results from operations (including, without limitation, statements about the Registrant’s opportunities, strategies, competition, expected activities and expenditures as the Registrant pursues its business plan, the adequacy of the Registrant’s available cash resources and other statements about future events or results), performance (both operational and financial) and business prospects, future business plans and opportunities. Wherever possible, words such as “predicts”, “projects”, “targets”, “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. These forward-looking statements include, among other things, statements relating to; the Registrant’s Queensway Project (the Queensway Project”) and the Registrant’s planned and future exploration on the Queensway Project and its other mineral properties; the Registrant’s goals regarding exploration and potential development of its projects; the Registrant’s future business plans; expectations regarding the ability to raise further capital; the market price of gold; expectations regarding any environmental issues that may affect planned or future exploration and development programs and the potential impact of complying with existing and proposed environmental laws and regulations; the ability to retain and/or maintain any require permits, licenses or other necessary approvals for the exploration or development of its mineral properties; government regulation of mineral exploration and development operations in the Provinces of Newfoundland and Labrador and Ontario; the Registrant’s compensation policy and practices; the Registrant’s expected reliance on key management personnel, advisors and consultants; effects of the novel COVID- 19 outbreak as a global pandemic.
Forward-looking statements are not a guarantee of future performance and is based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this Form 40-F including, without limitation, assumptions about: the ability to raise any necessary additional capital on reasonable terms to advance exploration and development of the Registrant’s mineral properties; future prices of gold and other metal prices; the timing and results of exploration and drilling programs; the demand for, and price of gold; that general business and economic conditions will not change in a material adverse manner; the Registrant’s ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; the geology of the Queensway Project as described in the Queensway Technical Report; the accuracy of budgeted exploration and development costs and expenditures; future currency exchange rates and interest rates; operating conditions being favorable such that the Registrant is able to operate in a safe, efficient and effective manner; the Registrant’s ability to attract and retain skilled personnel; political and regulatory stability; the receipt of governmental, regulatory and third-party approvals, licenses and permits on favorable terms; obtaining required renewals for existing approvals, licenses and permits on favorable terms; requirements under applicable laws; sustained labor stability; stability in financial and capital goods markets; expectations regarding the level of disruption to exploration at the Queensway Project as a result of COVID 19; availability of equipment.
Furthermore, such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of the Registrant to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking statements. Such risks include, without limitation: the Registrant may fail to find a commercially viable deposit at any of its mineral properties; there are no resources or mineral reserves on any of the properties in which the Registrant has an interest; the Registrant’s plans may be adversely affected by the Registrant’s reliance on historical data compiled by previous parties involved with its mineral properties; mineral exploration and development are inherently risky; the mineral exploration industry is intensely competitive; additional financing may not be available to the Registrant when required or, if available, the terms of such financing may not be favorable to the Registrant; fluctuations in the demand for gold; the Registrant may not be able to identify, negotiate or finance any future acquisitions successfully, or to integrate such acquisitions with its current business; the Registrant’s exploration activities are dependent upon the grant of appropriate licenses, concessions, leases, permits and regulatory consents, which may be withdrawn or not granted; the Registrant’s operations could be adversely affected by possible future government legislation, policies and controls or by changes in applicable laws and regulations; there is no guarantee that title to the properties in which the Registrant has a material interest will not be challenged or impugned; the Registrant faces various risks associated with mining exploration that are not insurable or may be the subject of insurance which is not commercially feasible for the Registrant; public health crises such as the COVID-19 pandemic may adversely impact the Registrant’s business; the volatility of global capital markets over the past several years has generally made the raising of capital more difficult; compliance with environmental regulations can be costly; social and environmental activism can negatively impact exploration, development and mining activities; the success of the Registrant is largely dependent on the performance of its directors and officers; the Registrant’s operations may be adversely affected by First Nations land claims; the Registrant and/or its directors and officers may be subject to a variety of legal proceedings, the results of which may have a material adverse effect on the Registrant’s business; the Registrant may be adversely affected if potential conflicts of interests involving its directors and officers are not resolved in favor of the Registrant; the Registrant’s future profitability may depend upon the world market prices of gold; there is no existing public market for the Registrant’s securities and an active and liquid one may never develop, which could impact the liquidity of the Registrant’s securities; dilution from future equity financing could negatively impact holders of the Registrant’s securities; failure to adequately meet infrastructure requirements could have a material adverse effect on the Registrant’s business; the Registrant’s projects now or in the future may be adversely affected by risks outside the control of the Registrant; the Registrant is subject to various risks associated with climate change; other factors discussed under “Risk and Uncertainties” in the Registrant’s most recent Annual Information Form and Management’s Discussion and Analysis.
Although the Registrant has attempted to identify important factors that could cause actual actions, events, conditions, results, performance or achievements to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events, conditions, results, performance or achievements to differ from those anticipated, estimated or intended.
The Registrant cautions that the foregoing lists of important assumptions and factors are not exhaustive. Other events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward-looking statements contained herein. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking statements.
Forward-looking statements contained herein are made as of the date of this Form 40-F and the Registrant disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as and to the extent required by applicable securities laws.
DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTICES
Technical disclosure regarding the Registrant’s properties included herein and in the documents incorporated herein by reference has not been prepared in accordance with the requirements of U.S. securities laws. Without limiting the foregoing, such technical disclosure uses terms that comply with reporting standards in Canada and certain estimates are made in accordance with National Instrument 43-101 — Standards of Disclosure for Mineral Projects (“NI 43-101”). NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, all mineral reserve and mineral resource estimates contained in the technical disclosure have been prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards on Mineral Resources and Reserves ("CIM Definition Standards").
Canadian standards, including NI 43-101, differ significantly from the historical requirements of the Securities and Exchange Commission (the “SEC”), and mineral reserve and resource information contained or incorporated by reference herein may not be comparable to similar information disclosed by U.S. companies.
The SEC has adopted amendments to its disclosure rules to modernize the mineral property disclosure requirements for issuers whose securities are registered with the SEC. These amendments became effective February 25, 2019 (the “SEC Modernization Rules”). Under the SEC Modernization Rules, the definitions of “proven mineral reserves” and “probable mineral reserves” have been amended to be substantially similar to the corresponding CIM Definition Standards and the SEC has added definitions to recognize “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources” which are also substantially similar to the corresponding CIM Definition Standards; however, there are still differences in the definitions and standards under the SEC Modernization Rules and the CIM Definition Standards. Therefore, the Registrant’s mineral resources and reserves as determined in accordance with NI 43-101 may be significantly different than if they had been determined in accordance with the SEC Modernization Rules.
DOCUMENTS FILED PURSUANT TO GENERAL INSTRUCTIONS
In accordance with General Instruction B.(l) of Form 40-F, the Registrant hereby incorporates by reference Exhibit 99.1 through Exhibit 99.64, as set forth in the Exhibit Index attached hereto.
DESCRIPTION OF THE SECURITIES
The Registrant is authorized to issue an unlimited number of Common Shares, without par value. All of the Common Shares rank equally as to voting rights, participation in a distribution of the assets of the Registrant on a liquidation, dissolution or winding-up of the Registrant and entitlement to any dividends declared by the Registrant. The holders of the Common Shares are entitled to receive notice of, and to attend and vote at, all meetings of shareholders (other than meetings at which only holders of another class or series of shares are entitled to vote). Each Common Share carries the right to one vote. In the event of the liquidation, dissolution or winding-up of the Registrant, or any other distribution of the assets of the Registrant among its shareholders for the purpose of winding-up its affairs, the holders of the Common Shares will be entitled to receive, on a pro rata basis, all of the assets remaining after the payment by the Registrant of all of its liabilities. The holders of Common Shares are entitled to receive dividends as and when declared by the Registrant’s board of directors in respect of the Common Shares on a pro rata basis. The Common Shares do not have pre-emptive rights, conversion rights or exchange rights and are not subject to redemption, retraction purchase for cancellation or surrender provisions. There are no sinking or purchase fund provisions, no provisions permitting or restricting the issuance of additional securities or any other material restrictions, and there are no provisions which are capable of requiring a security holder to contribute additional capital.
UNDERTAKINGS
The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to this Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.
CONSENT TO SERVICE OF PROCESS
Concurrently with the filing of the Registration Statement on Form 40-F, the Registrant will file with the Commission a written irrevocable consent and power of attorney on Form F-X. Any change to the name or address of the Registrant’s agent for service shall be communicated promptly to the Commission by amendment to the Form F-X referencing the file number of the Registrant.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized.
NEW FOUND GOLD CORP. | |
|
|
/s/ Michael Kanevsky |
|
Name: Michael Kanevsky | |
Title: Chief Financial Officer |
Date: September 17, 2021
EXHIBIT INDEX
The following documents are being filed with the Commission as exhibits to this registration statement on Form 40-F.
Exhibits | Documents |
99.1* | Annual Information Form for the year ended December 31, 2020 |
99.2* | Annual Information Form for the year ended December 31, 2019 |
99.3* | Management’s Discussion and Analysis for the year ended December 31, 2020 and 2019 |
99.4* | Audited Annual Financial Statements for the years ended December 31, 2020 and 2019 |
99.5* | Management’s Discussion and Analysis for the three and six months ended June 30, 2021 and 2020 |
99.6* | Unaudited Condensed Interim Financial Statements for the three and six months ended June 30, 2021 and 2020 |
99.7* | Management’s Discussion and Analysis for the three months ended March 31, 2021 and 2020 |
99.8* | Unaudited Condensed Interim Financial Statements for the three months ended March 31, 2021 and 2020 |
99.9* | Management’s Discussion and Analysis for the three and nine months ended September 30, 2020 and 2019 |
99.10* | Unaudited Condensed Interim Financial Statements for the three and nine months ended September 30, 2020 and 2019 |
99.11* | Management’s Discussion and Analysis for the six months ended June 30, 2020 and 2019 |
99.16* | Early Warning Report dated April 8, 2021 |
99.17* | Material Change Report dated August 24, 2021 |
99.18* | Material Change Report dated August 17, 2021 |
99.19* | Material Change Report dated August 12, 2021 |
99.20* | Material Change Report dated July 6, 2021 |
99.21* | Material Change Report dated June 30, 2021 |
99.22* | Material Change Report dated June 23, 2021 |
99.23* | Material Change Report dated June 15, 2021 |
99.24* | Material Change Reports dated May 26, 2021 |
99.25* | Material Change Report dated May 12, 2021 |
99.26* | Material Change Report dated May 4, 2021 |
99.27* | Material Change Report dated April 27, 2021 |
99.28* | Material Change Report dated April 20, 2021 |
99.29* | Material Change Report dated April 16, 2021 |
99.30* | Material Change Report dated April 7, 2021 |
99.31* | Material Change Report dated March 29, 2021 |
99.32* | Material Change Report dated March 23, 2021 |
99.33* | Material Change Reports dated March 18, 2021 |
99.34* | Material Change Report dated March 10, 2021 |
99.35* | Material Change Report dated March 1, 2021 |
99.36* | Material Change Report dated February 23, 2021 |
99.37* | Material Change Report dated February 11, 2021 |
99.38* | Material Change Report dated February 1, 2021 |
99.39* | Material Change Report dated January 11, 2021 |
99.40* | Material Change Report dated January 7, 2021 |
99.41* | Material Change Report dated January 4, 2021 |
99.42* | Material Change Report dated December 17, 2020 |
99.43* | Material Change Report dated December 11, 2020 |
99.44* | Material Change Report dated November 16, 2020 |
99.45* | Material Change Report dated October 27, 2020 |
99.46* | Material Change Report dated September 10, 2020 |
99.47* | Material Change Report dated September 3, 2020 |
99.48* | Material Change Report dated September 1, 2020 |
99.49* | Material Change Reports dated August 21, 2020 |
99.50* | Material Change Report dated August 10, 2020 |
99.51* | Notice of Change of Auditor from Deloitte LLP to Crowe MacKay LLP as of October 28, 2020 |
99.52* | Notice of Change of Auditor from DNTW Toronto LLP to Deloitte LLP as of October 9, 2020 |
99.53* | Notice of Meeting and Record Date with respect to the annual general meeting and special meeting of New Found Gold Corp. shareholders held on September 17, 2021 |
99.54* | Statement of Executive Compensation for the fiscal year ended December 31, 2020 |
99.55** | Technical Report on the Queensway Project, Newfoundland dated May 27, 2021 |
99.56** | Technical Report on the Queensway Project, Newfoundland dated July 15, 2020 |
99.57** | Technical Report on the Queensway Project, Newfoundland dated June 20, 2020 |
99.58** | Agency Agreement dated July 31, 2020, between New Found Gold Corp., Canaccord Genuity Corp., BMO Nesbitt Burns Inc. and Desjardins Securities Inc. |
99.59** | Underwriting Agreement dated August 19, 2021, between New Found Gold Corp., Canaccord Genuity Corp., BMO Nesbitt Burns Inc., CIBC World Markets Inc., Clarus Securities Inc. and Desjardins Securities Inc. |
99.60** | Consent of Crowe MacKay LLP |
99.61** | Consent of Stefan Kruse, Ph.D., P.Geo |
99.62** | Consent of Rene Sterk, MSc MAIG (RPGeo) FAusIMM CP(Geo) MSEG |
99.63** | Consent of Greg Matheson, P. Geo., Chief Operating Officer |
99.64** | Consent of Dawn Evans-Lamswood, M.Sc. P.Geo |
* Filed herewith
** To be filed by amendment
Exhibit 99.1
NEW FOUND GOLD CORP.
ANNUAL INFORMATION FORM
For the year ended December 31, 2020
Dated: July 15, 2021
TABLE OF CONTENTS | |||
1 | PRELIMINARY NOTES | 3 | |
1.1 | Financial Statements | 3 | |
1.2 | Currency | 3 | |
1.3 | Cautionary Statement Regarding Forward-Looking Information | 3 | |
2 | CORPORATE STRUCTURE | 5 | |
2.1 | Name, address and incorporation | 5 | |
3 | GENERAL DEVELOPMENT OF THE BUSINESS | 5 | |
3.1 | Overview of the Company | 5 | |
3.2 | Business of the Company | 5 | |
3.3 | Three-year History | 6 | |
4 | RISK FACTORS | 10 | |
4.1 | Risks Related to the Company | 10 | |
4.2 | Risks Related to the Company’s Securities | 18 | |
5 | QUEENSWAY PROJECT | 20 | |
5.1 | Summary | 20 | |
5.2 | Property Description and Location | 20 | |
5.3 | History | 27 | |
5.4 | Geologic Setting and Mineralization | 32 | |
5.5 | Deposit Type | 44 | |
5.6 | Exploration | 45 | |
5.7 | Drilling | 64 | |
5.8 | Sample Preparation, Analyses and Security | 71 | |
5.9 | Data Verification | 81 | |
5.10 | Mineral Processing and Metallurgical Testing | 82 | |
5.11 | Mineral Resource and Mineral Reserve Estimates | 82 | |
5.12 | Adjacent Properties | 82 | |
5.13 | Interpretation and Conclusions | 83 | |
5.14 | Recommendations | 85 | |
6 | OTHER MINERAL PROJECTS | 88 | |
7 | DIVIDENDS AND DISTRIBUTIONS | 89 | |
7.1 | Summary | 89 | |
8 | DESCRIPTION OF CAPITAL STRUCTURE | 89 | |
8.1 | Common Shares | 89 | |
8.2 | Options | 89 | |
8.3 | Warrants | 91 | |
9 | MARKET FOR SECURITIES | 91 | |
9.1 | Trading Price and Volume | 91 | |
9.2 | Prior Sales | 92 | |
10 | ESCROWED SECURITIES | 95 | |
10.1 | Summary | 95 | |
11 | DIRECTORS AND OFFICERS | 96 | |
11.1 | Name, Occupation and Security Holding | 96 | |
11.2 | Directors’ Terms of Office | 98 | |
11.3 | Committees of the Board of Directors | 98 | |
11.4 | Audit Committee | 98 | |
11.5 | Nominating and Corporate Governance Committee | 100 | |
11.6 | Compensation Committee | 101 |
ii
1 PRELIMINARY NOTES
In this Annual Information Form (“AIF”), “New Found” or the “Company” refers to New Found Gold Corp.
All information contained herein is as at December 31, 2020 unless otherwise stated.
1.1 Financial Statements
New Found’s financial statements for the fiscal year ended December 31, 2020 were prepared in accordance with International Financial Reporting Standards (“IFRS”).
This AIF should be read in conjunction with New Found’s audited financial statements and notes thereto, as well as the management’s discussion and analysis for the years ended December 31, 2020 and 2019. The financial statements and management’s discussion and analysis are available at New Found’s website https://newfoundgold.ca/ or under New Found’s profile on SEDAR at www.sedar.com.
1.2 Currency
All sums of money which are referred to in this AIF are expressed in lawful money of Canada, unless otherwise specified. References to “US$” are to United States Dollars.
1.3 Cautionary Statement Regarding Forward-Looking Information
This AIF contains “forward-looking information” and “forward-looking statements” (referred to together herein as “forward-looking information”). Forward-looking statements and information can generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue”, “plans” or similar terminology. Forward-looking statements and information are not historical facts, are made as of the date of AIF, and include, but are not limited to, statements regarding discussions of results from operations (including, without limitation, statements about the Company’s opportunities, strategies, competition, expected activities and expenditures as the Company pursues its business plan, the adequacy of the Company’s available cash resources and other statements about future events or results), performance (both operational and financial) and business prospects, future business plans and opportunities and statements as to management’s expectations with respect to, among other things, the activities contemplated in this AIF.
Forward-looking statements included or incorporated by reference in this AIF include, without limitation, statements related to the Queensway Project (as such term is defined herein) and the Company’s planned and future exploration on the Queensway Project and its other mineral properties; the Company’s goals regarding exploration and potential development of its projects; the Company’s future business plans; expectations regarding the ability to raise further capital; the market price of gold; expectations regarding any environmental issues that may affect planned or future exploration and development programs and the potential impact of complying with existing and proposed environmental laws and regulations; the ability to retain and/or maintain any require permits, licenses or other necessary approvals for the exploration or development of its mineral properties; government regulation of mineral exploration and development operations in the Provinces of Newfoundland and Labrador and Ontario; the Company’s compensation policy and practices; the Company’s expected reliance on key management personnel, advisors and consultants; effects of the novel COVID19 outbreak as a global pandemic; and the anticipated listing of the Common Shares on the NYSE American LLC.
3
These forward-looking statements involve numerous risks and uncertainties and other factors which may cause the actual results, performance or achievements of New Found to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Important factors that may cause actual results to vary include without limitation, the Company may fail to find a commercially viable deposit at any of its mineral properties; there are no mineral resources or mineral reserves on any of the properties in which the Company has an interest; the Company’s plans may be adversely affected by the Company’s reliance on historical data compiled by previous parties involved with its mineral properties; mineral exploration and development are inherently risky; the mineral exploration industry is intensely competitive; additional financing may not be available to the Company when required or, if available, the terms of such financing may not be favourable to the Company; fluctuations in the demand for gold; the Company may not be able to identify, negotiate or finance any future acquisitions successfully, or to integrate such acquisitions with its current business; the Company’s exploration activities are dependent upon the grant of appropriate licenses, concessions, leases, permits and regulatory consents, which may be withdrawn or not granted; the Company’s operations could be adversely affected by possible future government legislation, policies and controls or by changes in applicable laws and regulations; there is no guarantee that title to the properties in which the Company has a material interest will not be challenged or impugned; the Company faces various risks associated with mining exploration that are not insurable or may be the subject of insurance which is not commercially feasible for the Company; public health crises such as the COVID-19 pandemic may adversely impact the Company’s business; the volatility of global capital markets over the past several years has generally made the raising of capital more difficult; compliance with environmental regulations can be costly; social and environmental activism can negatively impact exploration, development and mining activities; the success of the Company is largely dependent on the performance of its directors and officers; the Company’s operations may be adversely affected by First Nations land claims; the Company and/or its directors and officers may be subject to a variety of legal proceedings, the results of which may have a material adverse effect on the Company’s business; the Company may be adversely affected if potential conflicts of interests involving its directors and officers are not resolved in favour of the Company; the Company’s future profitability may depend upon the world market prices of gold; dilution from future equity financing could negatively impact holders of the Company’s securities; failure to adequately meet infrastructure requirements could have a material adverse effect on the Company’s business; the Company’s projects now or in the future may be adversely affected by risks outside the control of the Company; the Company is subject to various risks associated with climate change; and other factors discussed under “Risk Factors”.
In making the forward-looking statements in this AIF, New Found has applied several material assumptions, including without limitation, the assumptions that: the ability to raise any necessary additional capital on reasonable terms to advance exploration and development of the Company’s mineral properties; future prices of gold and other metal prices; the timing and results of exploration and drilling programs; the demand for, and price of gold; that general business and economic conditions will not change in a material adverse manner; the Company’s ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; the geology of the Queensway Project as described in the Technical Report (as such term is defined herein); the accuracy of budgeted exploration and development costs and expenditures; future currency exchange rates and interest rates; operating conditions being favourable such that the Company is able to operate in a safe, efficient and effective manner; the Company’s ability to attract and retain skilled personnel; political and regulatory stability; the receipt of governmental, regulatory and third-party approvals, licenses and permits on favourable terms; obtaining required renewals for existing approvals, licenses and permits on favourable terms; requirements under applicable laws; sustained labour stability; stability in financial and capital goods markets; expectations regarding the level of disruption to exploration at the Queensway Project as a result of COVID 19; availability of equipment.
Certain of the risks and assumptions are described in more detail under the heading “Risk Factors” herein and in New Found’s audited financial statements and management discussion and analysis for the years ended December 31, 2020 and 2019, available at New Found’s website https://newfoundgold.ca/ or under New Found’s profile on SEDAR at www.sedar.com.
The actual results or performance by New Found could differ materially from those expressed in, or implied by, any forward-looking statements relating to those matters. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of the Company. Except as required by law, New Found is under no obligation, and expressly disclaim any obligation, to update, alter or otherwise revise any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
4
2 CORPORATE STRUCTURE
2.1 Name, address and incorporation
New Found was incorporated under the Business Corporations Act (Ontario) (the “OBCA”) as Palisade Resources Corp. on January 6, 2016. By articles of amendment effective June 20, 2017, the Company’s name was changed to New Found Gold Corp.
On June 23, 2020, the Company continued into British Columbia under the provisions of the Business Corporations Act, British Columbia, (the “BCBCA”). The Company’s head office is located at Suite 1430 – 800 West Pender Street, Vancouver, British Columbia, V6C 2V6, Canada. The Company’s registered office is located at Suite 2600, Three Bentall Centre, 595 Burrard Street, P.O. Box 49314, Vancouver, British Columbia, V7X 1L3, Canada.
3 GENERAL DEVELOPMENT OF THE BUSINESS
3.1 Overview of the Company
3.1.1 General
New Found is a mineral exploration company involved in the identification, acquisition and exploration of mineral properties primarily in the Provinces of Newfoundland and Labrador and Ontario. The Company’s exploration is focused on discovering and delineating gold resources. The Company has one material property: the Queensway Project located in Newfoundland, Canada (the “Queensway Project”). At present, the Queensway Project does not have any known mineral resources or reserves.
Since incorporation, the Company has taken the following steps in developing its business: (i) identified and acquired mineral properties with sufficient merit to warrant exploration; (ii) raised funds to progress the Company’s exploration activities on its mineral properties, as described herein; (iii) completed the “NI 43-101 Technical Report for the Queensway Project, Newfoundland, Canada” with an effective date of May 27, 2021, prepared by René Sterk, M.Sc., MAIG (RPGeo) FAusIMM CP(Geo) MSEG of RSC Consulting Limited and Stefan Kruse, PhD., P.Geo., (APEGNB, PEGNL, EGBC) of Terrane Geoscience Inc. in compliance with NI 43-101 on the Queensway Project (the “Technical Report”); and (iv) retained directors, officers and employees with the skills required to successfully operate a public mineral exploration company.
On August 11, 2020, the Company completed its initial public offering and the Common Shares (as defined herein) of the Company began trading on the TSX Venture Exchange under the symbol “NFG”. The Company is a reporting issuer in British Columbia, Alberta and Ontario.
3.2 Business of the Company
3.2.1 Principal Operations
The Company is a mineral exploration company engaged in the acquisition, exploration and evaluation of resource properties with a focus on gold properties located in the Provinces of Newfoundland and Labrador and Ontario, Canada.
3.2.2 Competitive Conditions
The mineral exploration and mining industry is competitive in all phases of exploration, development and production. The Company competes with a number of other entities and individuals in the search for and the acquisition of attractive mineral properties. As a result of this competition, the Company may not be able to acquire attractive properties in the future on terms it considers acceptable. The Company may also encounter competition from other mining companies in efforts to hire experienced mining professionals. Increased competition could adversely affect the Company’s ability to attract necessary funding or acquire suitable properties or prospects for mineral exploration in the future. See “Risk Factors – Competition and Mineral Exploration”.
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3.2.3 Specialized Skills and Knowledge
Various aspects of the Company’s business require specialized skills and knowledge. Such skills and knowledge include, but are not limited to, expertise related to mineral exploration, geology, drilling, permitting, metallurgy, logistical planning, and implementation of exploration programs, as well as legal compliance, finance and accounting. The Company expects to rely upon various legal and financial advisors, consultants and others in the operation and management of its business. See “Risk Factors – Dependence on Management and Key Personnel”.
3.2.4 Cycles
The Company’s mineral exploration activities may be subject to seasonality due to adverse weather conditions including, without limitation, inclement weather, frozen ground and restricted access due to snow, ice or other weather-related factors. In addition, the mining and mineral exploration business is subject to global economic cycles effecting, among other things, the marketability and price of gold products in the global marketplace.
3.2.5 Employees
At December 31, 2020 and at the date of this AIF, the Company has no employees. The Company relies exclusively on consultants and contractors to carry on its business activities and, in particular, to supervise and carry-out mineral exploration on its Queensway Project and other mineral properties.
3.2.6 Environmental Protection
The Company is currently engaged in exploration activities on its Queensway Project and other mineral properties and such activities are subject to various laws, rules and regulations governing the protection of the environment. Corporate obligations to protect the environment under the various regulatory regimes in which the Company operates may affect the financial position, operational performance and earnings of the Company. A breach of such legislation may result in imposition of fines and penalties. Management believes all of the Company’s activities are in material compliance with all applicable environmental legislation. See “Risk Factors – Environmental Risks”.
3.2.7 Social or Environmental Policies
The Company is committed to conducting its operations in accordance with sound social and environmental practices. At present, the scale of operations has not required the adoption of formal policies. The Company will reevaluate this position if and when necessary.
The Company is subject to the laws and regulations relating to environmental matters in all jurisdictions in which it operates, including provisions relating to property reclamation, discharge of hazardous materials and other matters. The Company may also be held liable should environmental problems be discovered that were caused by former owners and operators of its properties. The Company conducts its mineral exploration activities in compliance with applicable environmental protection legislation.
3.3 Three-year History
3.3.1 Financings and Issuances of the Company’s Securities
Initial Public Offering
On August 11, 2020, the Company completed an initial public offering on the TSX Venture Exchange of an aggregate of 21,000,000 Common Shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 14, 2020, Canaccord Genuity Corp., BMO Nesbitt Burns Inc. and Desjardins Securities Inc. (together the “Agents”) exercised their overallotment option in full to offer and sell an additional 3,150,000 Common Shares for gross proceeds of $4,095,000. The Company paid agents’ fees of $1,793,700 in cash and issued 1,379,768 agents’ warrants (“Broker Warrants”) exercisable into Common Shares at $1.30 for 12 months from the date of issue in connection with the initial public offering.
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2020 Flow-Through Private Placements
On June 10, 2020, the Company completed the second and final tranche of a non-brokered private placement financing by issuing 68,462 Common Shares that qualified as “flow-through shares” (within the meaning of the Income Tax Act (Canada) (the “Tax Act”)) at a price $1.30 per Common Share, for gross proceeds of $89,001. In connection with the private placement, the Company issued certain finders non-transferable common share purchase warrants (“Finder Warrants”, together with the Broker Warrants, the “2020 Warrants”), in an aggregate amount of 4,107 Finder Warrants, representing 6% of the Common Shares sourced by certain finders. Each Finder Warrant issued in connection with this private placement entitles the holder thereof to purchase one additional Common Share at a price of $1.30 per Common Share for a two-year period expiring on June 10, 2022.
On June 4, 2020, the Company completed the second and final tranche of a non-brokered private placement financing by issuing of 1,227,753 Common Shares that qualified as “flow-through shares” (within the meaning of the Tax Act) at a price $1.50 per Common Share, for gross proceeds of $1,841,630. In connection with the private placement, the Company issued certain finders an aggregate amount of 28,230 Finder Warrants, representing 6% of the Common Shares sourced by certain finders. Each Finder Warrant issued in connection with this private placement entitles the holder thereof to purchase one additional Common Share at a price of $1.50 per Common Share for a two-year period expiring on June 4, 2022.
On May 13, 2020, the Company completed the first tranche of the non-brokered private placement financing by issuing 2,766,844 Common Shares that qualified as “flow-through shares” (within the meaning of the Tax Act) at a price of $1.50 per Common Share, for gross proceeds of $4,150,266. In connection with the private placement, the Company issued an aggregate of 36,052 Finder Warrants, representing 6% of the Common Shares sourced by certain finders. Each Finder Warrant issued in connection with this private placement entitles the holder thereof to purchase one additional Common Share at a price of $1.50 per Common Share for a two-year period expiring on May 13, 2022.
On May 12, 2020, the Company completed the first tranche of a non-brokered private placement financing of 797,923 Common Shares that qualified as “flow-through shares” (within the meaning of the Tax Act) at a price of $1.30 per Common Share, for gross proceeds of $1,037,299. In connection with the private placement, the Company issued an aggregate of 39,475 Finder Warrants, representing 6% of the Common Shares sourced by certain finders. Each Finder Warrant issued in connection with this private placement entitles the holder thereof to purchase one additional common share at a price of $1.30 per Common Share for a two-year period expiring on May 12, 2022.
Novo Transaction and Share Issuance
On March 6, 2020, the Company issued 15,000,000 Common Shares to Novo Resources Corp., a TSXV listed mineral exploration and development corporation (“Novo”), at a subscription price of $1.12 per Common Share, which was paid to the Company by the issuance of 6,944,444 common shares in the capital of Novo (the “Novo Transaction”). Upon closing of the Novo Transaction, Novo owned approximately 15.97% of the Company’s issued and outstanding Common Shares and New Found owned approximately 3.73% of the issued and outstanding common shares of Novo. Pursuant to the terms of the Novo Transaction, Novo has the right to appoint a director to the Board at any time until March 6, 2023, provided that Novo holds no less than 10% of New Found’s issued and outstanding Common Shares. In connection with Novo’s right to appoint a director to the Board, Novo appointed Dr. Quinton Hennigh as its director nominee. Dr. Hennigh was elected to the Board on June 17, 2020.
Mr. Eric Sprott, a principal securityholder of the Company, is also a principal securityholder of Novo.
November 2019 Private Placement
On November 29, 2019, the Company completed a non-brokered private placement financing of 16,000,000 units at a price of $0.50 per unit for gross proceeds of $8,000,000 (the “November 2019 Private Placement”). Each unit consisted of one Common Share and one common share purchase warrant (the “2019 Warrants”). Each 2019 Warrant entitles the holder thereof to purchase one additional Common Share at a price of $0.75 per Common Share for a three year period expiring on November 29, 2022. In accordance with the terms thereof, 12,000,000 of the 2019 Warrants were exercised on July 21, 2020 and the remaining 4,000,000 of the 2019 Warrants were exercised on August 10, 2020.
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July 2019 Private Placement
On July 3, 2019, the Company completed a non-brokered private placement financing of 1,250,000 Common Shares at a price of $0.40 per Common Share for gross proceeds of $500,000.
June 2019 Private Placement
On June 18, 2019, the Company completed a non-brokered private placement financing of 1,875,000 Common Shares at a price of $0.40 per Common Share for gross proceeds of $750,000.
2019 Property Option Share Issuances
In 2019, New Found issued a total of 442,499 Common Shares in connection with the exercise of certain property option agreements with respect to the Queensway Project.
2018 Property Option Share Issuances
In 2018, New Found issued a total of 42,500 Common Shares in connection with the exercise of certain property option agreements with respect to the Queensway Project.
2017 Property Option Share Issuances
In 2017, New Found issued a total of 223,750 Common Shares in connection with the exercise of certain property option agreements with respect to the Queensway Project.
2017 Private Placement
In 2017, New Found completed a non-brokered private placement financing of 5,585,500 Common Shares at a price of $0.40 per Common Share for gross proceeds of $2,234,200.
3.3.2 Exploits Transaction
On December 11, 2020, the Company entered into a purchase and sale agreement with Exploits Discovery Corp. (“Exploits”) pursuant to which the Company sold a 100% interest in two mineral claims representing 12.0 km 2 of land at the Queensway Project for non-cash consideration of 6,562,799 common shares in the capital of Exploits. The Company will also retain a 2% net smelter returns royalty on production from the mineral claims sold to Exploits.
3.3.3 Exercise of Queensway Project Option Agreements
On June 23, 2020, the Company fully exercised the final remaining active option agreement with respect to the Queensway Project, being an option agreement with Unity Resources Inc., Gary Lewis, Donna Lewis, Nigel Lewis, Leonard Lewis, and Aubrey Budgell, entered into in November 2016, which covered 100% of the Unity Property portion of the Queensway Project. As a result, the Company is now the 100% owner of the interests comprising the Queensway Project. Pursuant to the option agreement, an NSR grant of 1.6% is payable to the optionors which can be reduced by 1.0% by paying the optionors $1,000,000. This agreement contains a 2 km area of influence that subjects adjacent lands to the east and north of the subject lands and does not impact the optioned property.
In November 2019, the Company fully exercised an option agreement covering the 100% interest in the JBP Linear Property portion of the Queensway Project, being an option agreement with Roland Quinlan and Eddie Quinlan, entered into in May 2017. Under the terms of the option agreement, the Company paid the optionors a total of $45,000 in cash over a 30-month period and granted an NSR of 1.6% to the optionors which can be reduced by 1.0% by paying the optionors $1,000,000.
In November 2019, the Company fully exercised an option agreement covering the 100% interest in the Golden Bullet Property portion of the Queensway Project, being an option agreement with Roland Quinlan, Eddie Quinlan and Larry Quinlan, executed in November 2016. Under the terms of the option agreement, the Company paid the optionors a total of $125,000 in cash and issued $100,000 in Common Shares to the optionors over a 36-month period. Pursuant to the option agreement, an NSR of 1.6% is payable to the optionors which can be reduced by 1.0% by paying the optionors $1,000,000. This option agreement contains a 2 km area of influence that subjects adjacent lands to an additional 0.6% NSR.
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In July 2019, the Company fully exercised an option agreement covering the 100% interest in the Linear and JBP Linear Property portion of the Queensway Project, being an option agreement with Krinor Resources, Kevin Keats and Allan Keats entered into in July 2016. Under the terms of the option agreement, the Company paid the optionors a total of $54,000 and issued 45,000 Common Shares to the optionors over a 36-month period. An NSR of 0.6% is payable to the optionors along with an underlying net smelter royalty of 1.0% covering five of the six claims, which is payable to Paragon Minerals Corp (“Paragon”). This option agreement contains a 2 km area of influence that subjects adjacent lands to the additional 0.6% NSR.
In April 2019, the Company fully exercised an option agreement covering the 100% interest in the Guinchard Property portion of the Queensway Project, being an option agreement with Wayde Guinchard, Myrtle Guinchard and Peter Rogers executed in April 2017. Under the terms of the option agreement, the Company paid the optionors a total of $45,000 and issued 105,000 Common Shares to the optionors over a 24-month period. Pursuant to the option agreement, an NSR of 1.0% is payable to the optionors which can be reduced by 0.5% by paying the optionors $1,000,000.
In September 2018, the Company acquired a 100% interest in the Lush Property portion of the Queensway Project pursuant to a purchase agreement with Paragon Minerals Corp. The Lush Property is comprised of one map staked licence covering 50 hectares. Under the terms of the purchase agreement, the Company granted an NSR of 0.5% payable to Paragon Minerals Corp along with an underlying NSR 2.0% payable to Tom Lush which can be reduced by 1.0% by paying $1,000,000 to Tom Lush.
In May 2017, the Company acquired a 100% interest in the P-Pond Property via an option agreement with Stephen Stockley, Mark Stockley and Edward Stockley. The P-Pond Property is comprised of three map staked licences covering 175 hectares and under the terms of the agreement the Company paid the optionor a total of $30,000 in cash and issued $10,000 worth of Common Shares to the optionor; this option agreement has been fully executed the Company are the sole owner of the property. A net smelter royalty grant of 1.0% is payable to the optionor which can be reduced by 0.5% by paying the optionor $250,000.
In April 2017, the Company acquired a 100% interest in the Guinchard Property via an option agreement with Wayde Guinchard, Myrtle Guinchard and Peter Rogers. The Guinchard Property is comprised of five map staked licences covering 625 hectares and under the terms of the agreement the Company agreed is to pay the optionor a total of $45,000 and 105,000 shares over a 24-month period; the option was fully executed in April 2019 and the Company are the sole owner of the property. A net smelter royalty grant of 1.0% is payable to the optionor which can be reduced by 0.5% by paying the optionor $1,000,000.
In October 2016, the Company acquired a 100% interest in the United Gold Property via an option agreement with Noreen Kennedy. The United Gold Property is comprised of one map staked licence covering 275 hectares and under the terms of the agreement the Company is to pay the optionor a total of $16,500 and $16,500 worth of shares are to be issued over a 6-month period; this option agreement has been fully executed and the Company are the sole owner of the property. A net smelter royalty grant of 0.6% is payable to the optionor.
The Company does not expect any changes to its business during the current financial year.
3.3.4 Proposed Mexican Gold Transaction
On January 26, 2020, New Found entered into a binding letter agreement (the “Mexican Gold Agreement”) with Mexican Gold Corp. (“Mexican Gold”), pursuant to which Mexican Gold agreed to acquire all of the Company’s issued and outstanding shares (the “Proposed Mexican Gold Transaction”). The Proposed Mexican Gold Transaction would have constituted a reverse takeover pursuant to TSXV policies as, following completion of the Proposed Mexican Gold Transaction, the Company’s shareholders would have owned approximately 88.4% of the issued and outstanding common shares of the resulting issuer.
On February 19, 2020, the Company mutually agreed with Mexican Gold to terminate the Mexican Gold Agreement and the Proposed Mexican Gold Transaction.
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3.3.5 Recent Events
COVID-19 Developments
The Company continues to have no material disruption to operations or supply chains as a result of the COVID-19 pandemic. Since the onset of COVID-19 in early 2020, the Company has continued to take extraordinary measures to mitigate the possible impact of COVID-19 on its workforce and operations. Some of these measures include: (i) eliminating all non-essential travel to and from the Queensway Project and (ii) reducing physical interaction throughout the organization as much as possible by moving to a work-from-home format. The Company continues to closely monitor the COVID-19 pandemic and is engaged in active operational and financial contingency planning to prudently manage the potential impact of the pandemic on its operations.
NYSE American Listing Application
On February 1, 2021, the Company filed a Form 20-F registration statement with the United States Securities and Exchange Commission (the “SEC”) with the intention of applying to list its Common Shares on the NYSE American stock exchange (“NYSE American”). Subject to the approval of the SEC and the satisfaction of all applicable listing and regulatory requirements, the Company will become a SEC registrant and expects its Common Shares to commence trading on the NYSE American in 2021.
2021 Flow-Through Private Placement
On April 8, 2021, the Company completed a non-brokered private placement of 2,857,000 Common Shares that qualify as “flow-through shares” for the purposes of the Tax Act at a price of $5.25 per Common Share for gross proceeds to New Found of $14,999,250. The Common Shares had a hold period of four months and one day from closing, expiring on August 9, 2021. On closing, a cash finders’ fee equal to 3.5% of the gross proceeds of this financing was paid to Clarus Securities Inc.
4 RISK FACTORS
The business and operations of New Found are speculative due to the high-risk nature of its business, which is the exploration of mineral properties. The risks listed below are not the only risks and uncertainties that New Found faces. Additional risks and uncertainties not presently known to New Found or that New Found currently considers immaterial may also materially impair its business. These risk factors could materially affect New Found’s business, financial condition and future operating results and could cause actual events to differ materially from those described in forward-looking statements relating to the Company.
If any of the following risks occur, New Found’s business, financial condition and operating results could be materially adversely affected.
4.1 Risks Related to the Company
4.1.1 Exploration Stage Company
The Company is an exploration stage company and cannot give any assurance that a commercially viable deposit, or “reserve,” exists on any properties for which the Company currently has or may have (through potential future joint venture agreements or acquisitions) an interest. Determination of the existence of a reserve depends on appropriate and sufficient exploration work and the evaluation of legal, economic, and environmental factors. If the Company fails to find a commercially viable deposit on any of its properties, its financial condition and results of operations will be materially adversely affected.
4.1.2 No Mineral Resources
Currently, there are no mineral resources (within the meaning of NI 43-101) on any of the properties in which the Company has an interest and the Company cannot give any assurance that any mineral resources will be identified. If the Company fails to identify any mineral resources on any of its properties, its financial condition and results of operations will be materially adversely affected.
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4.1.3 No Mineral Reserves
Currently, there are no mineral reserves (within the meaning of NI 43-101) on any of the properties in which the Company has an interest and the Company cannot give assurance that any mineral reserves will be identified. If the Company fails to identify any mineral reserves on any of its properties, its financial condition and results of operations will be materially adversely affected.
4.1.4 Reliability of Historical Information
The Company has relied on, and the disclosure in the Technical Report is based, in part, upon, historical data compiled by previous parties involved with the Queensway Project. To the extent that any of such historical data is inaccurate or incomplete, the Company’s exploration plans may be adversely affected.
4.1.5 Mineral Exploration and Development
Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection, the combination of which factors may result in the Company not receiving an adequate return of investment capital.
There is no assurance that the Company’s mineral exploration and any development activities will result in any profitable extraction of ore. The long-term profitability of the Company’s operations will in part be directly related to the costs and success of its exploration programs, which may be affected by a number of factors. Substantial expenditures are required to establish mineral resources through drilling and to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis.
Substantial expenditures are required to establish ore reserves through exploration and drilling, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities and grades to justify commercial operations or that funds required for development can be obtained on a timely basis. Estimates of reserves, mineral deposits and production costs can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In addition, the grade of ore ultimately mined may differ from that indicated by drilling results. Short term factors relating to reserves, such as the need for orderly development of ore bodies or the processing of new or different grades, may also have an adverse effect on mining operations and on the results of operations. Material changes in ore reserves, grades, stripping ratios or recovery rates may affect the economic viability of any project.
4.1.6 Competition and Mineral Exploration
The mineral exploration industry is intensely competitive in all of its phases and the Company must compete in all aspects of its operations with a substantial number of large established mining companies with greater liquidity, greater access to credit and other financial resources, newer or more efficient equipment, lower cost structures, more effective risk management policies and procedures and/or greater ability than the Company to withstand losses. The Company’s competitors may be able to respond more quickly to new laws or regulations or emerging technologies or devote greater resources to the expansion of their operations, than the Company can. In addition, current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties. Competition could adversely affect the Company’s ability to acquire suitable new mineral properties or prospects for exploration in the future. Competition could also affect the Company’s ability to raise financing to fund the exploration and development of its properties or to hire qualified personnel. The Company may not be able to compete successfully against current and future competitors, and any failure to do so could have a material adverse effect on the Company’s business, financial condition or results of operations.
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4.1.7 Additional Funding
The exploration and development of the Company’s mineral properties will require substantial additional capital. When such additional capital is required, the Company will need to pursue various financing transactions or arrangements, including joint venturing of projects, debt financing, equity financing or other means. Additional financing may not be available when needed or, if available, the terms of such financing might not be favourable to the Company and might involve substantial dilution to existing shareholders. The Company may not be successful in locating suitable financing transactions in the time period required or at all. A failure to raise capital when needed would have a material adverse effect on the Company’s business, financial condition and results of operations. Any future issuance of securities to raise required capital will likely be dilutive to existing shareholders. In addition, debt and other debt financing may involve a pledge of assets and may be senior to interests of equity holders. The Company may incur substantial costs in pursuing future capital requirements, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. The ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the gold industry in particular), the Company’s status as a new enterprise with a limited history, the location of the Company’s mineral properties, the price of commodities and/or the loss of key management personnel.
4.1.8 Acquisition of Additional Mineral Properties
If the Company loses or abandons its interests in its mineral properties, there is no assurance that it will be able to acquire another mineral property of merit or that such an acquisition would be approved by the TSXV. There is also no guarantee that the TSXV will approve the acquisition of any additional properties by the Company, whether by way of an option or otherwise, should the Company wish to acquire any additional properties.
4.1.9 Government or Regulatory Approvals
Exploration and development activities are dependent upon the grant of appropriate licences, concessions, leases, permits and regulatory consents, which may be withdrawn or made subject to limitations. There is no guarantee that, upon completion of any exploration, a mining licence will be granted with respect to exploration territory. There can also be no assurance that any exploration licence will be renewed or if so, on what terms. These licences place a range of past, current and future obligations on the Company. In some cases, there could be adverse consequences for breach of these obligations, ranging from penalties to, in extreme cases, suspension or termination of the relevant licence or related contract.
4.1.10 Permits and Government Regulation
The future operations of the Company may require permits from various federal, state, provincial and local governmental authorities and will be governed by laws and regulations governing prospecting, development, mining, production, export, taxes, labour standards, occupational health, waste disposal, land use, environmental protections, mine safety and other matters. Although Canada has a favourable legal and fiscal regime for exploration and mining, including a relatively simple system for the acquisition of mineral titles and relatively low tax burden, possible future government legislation, policies and controls relating to prospecting, development, production, environmental protection, mining taxes and labour standards could cause additional expense, capital expenditures, restrictions and delays in the activities of the Company, the extent of which cannot be predicted. Before development and production can commence on any properties, the Company must obtain regulatory and environmental approvals. There is no assurance that such approvals can be obtained on a timely basis or at all. The cost of compliance, with changes in governmental regulations, has the potential to reduce the profitability of operations. The Company is currently in compliance with all material regulations applicable to its exploration activities.
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4.1.11 Limited Operating History
The Company has a limited operating history and its mineral properties are exploration stage properties. As such, the Company will be subject to all of the business risks and uncertainties associated with any new business enterprise, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. The current state of the Company’s mineral properties require significant additional expenditures before any cash flow may be generated. Although the Company possesses an experienced management team, there is no assurance that the Company will be successful in achieving a return on shareholders’ investment and the likelihood of success of the Company must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the establishment of any business. There is no assurance that the Company can generate revenues, operate profitably, or provide a return on investment, or that it will successfully implement its plans.
An investment in the Company’s securities carries a high degree of risk and should be considered speculative by purchasers. There is no assurance that the Company will be successful in achieving a return on shareholders’ investment and the likelihood of its success must be considered in light of its early stage of operations. You should consider any purchase of the Company’s securities in light of the risks, expenses and problems frequently encountered by all companies in the early stages of their corporate development.
4.1.12 Title Risks
Although the Company has or will receive title opinions for any properties in which it has a material interest, there is no guarantee that title to such properties will not be challenged or impugned. The Company has not conducted surveys on all of the claims in which it holds direct or indirect interests. The Company’s properties may be subject to prior unregistered agreements or transfers or native land claims and title may be affected by unidentified or unknown defects. Title insurance is generally not available for mineral properties and the Company’s ability to ensure that it has obtained secure claims to individual mineral properties or mining concessions may be constrained. A successful challenge to the Company’s title to a property or to the precise area and location of a property could cause delays or stoppages to the Company’s exploration, development or operating activities without reimbursement to the Company. Any such delays or stoppages could have a material adverse effect on the Company’s business, financial condition and results of operations.
4.1.13 Laws and Regulation
The Company’s exploration activities are subject to extensive federal, provincial and local laws and regulations governing prospecting, development, production, exports, taxes, labour standards, occupational health and safety, mine safety and other matters in all the jurisdictions in which it operates. These laws and regulations are subject to change, can become more stringent and compliance can therefore become more costly. The Company applies the expertise of its management, advisors, employees and contractors to ensure compliance with current laws.
4.1.14 Uninsured and Underinsured Risks
The Company faces and will face various risks associated with mining exploration and the management and administration thereof including those associated with being a public company. Some of these risks are not insurable; some may be the subject of insurance which is not commercially feasible for the Company. Those insurances which are purchased will have exclusions and deductibles which may eliminate or restrict recovery in the event of loss. In some cases, the amount of insurance purchased may not be adequate in amount or in limit.
The Company will undertake intermittent assessments of insurable risk to help ensure that the impact of uninsured/underinsured loss is minimized within reason. Risks may vary from time to time within this intermittent period due to changes in such things as operations operating conditions, laws or the climate which may leave the Company exposed to periods of additional uninsured risk.
In the event risk is uninsurable, at its reasonable and sole discretion, the Company may endeavor to implement policies and procedures, as may be applicable and/or feasible, to reduce the risk of related loss.
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4.1.15 Public Health Crises such as the COVID-19 Pandemic
The Company’s business, operations and financial condition could be materially and adversely affected by the outbreak of epidemics or pandemics or other health crises, including the current COVID-19 pandemic. To date, there have been a large number of restrictions, business closures, quarantines and a reduction in various activities in a number of countries including Canada, the United States, Europe and China. The pandemic has resulted in travel, gathering and other public health restrictions. While these effects are expected to be temporary, the duration of the various disruptions to businesses locally and internationally and the related financial and other impacts cannot be reasonably estimated at this time. Such public health crises can result in volatility and disruptions in the supply and demand for gold and other minerals, global supply chains and financial markets, as well as declining trade and market sentiment and reduced mobility of people, all of which could affect commodity prices, interest rates, credit ratings, credit risk, share prices and inflation. The risks to the Company of such public health crises also include risks to employee health and safety, additional slowdowns or temporary suspensions of operations in geographic locations impacted by an outbreak, increased labor, transportation and fuel costs, regulatory changes, political or economic instabilities or civil unrest. At this point, the extent to which COVID- 19 will or may impact the Company is uncertain and these factors are beyond the Company’s control. Any increase in the severity of the pandemic or future outbreaks of COVID-19, particularly if the number of COVID-19 cases in Newfoundland continues to rise, could have a material adverse effect on the Company’s business, results of operations and financial condition.
4.1.16 Global Economy Risk
The volatility of global capital markets, including the general economic slowdown in the mining sector, over the past several years has generally made the raising of capital by equity or debt financing more difficult. The Company may be dependent upon capital markets to raise additional financing in the future. As such, the Company is subject to liquidity risks in meeting its operating expenditure requirements and future development cost requirements in instances where adequate cash positions are unable to be maintained or appropriate financing is unavailable. These factors may impact the ability to raise equity or obtain loans and other credit facilities in the future and on terms favourable to the Company and its management. If these levels of volatility persist or if there is a further economic slowdown, the Company’s operations, the Company’s ability to raise capital and the trading price of the Company’s securities could be adversely impacted.
In addition, the current outbreak of COVID-19, and any future emergence and spread of similar pathogens, could have a material adverse impact on global economic conditions, which may adversely impact: the market price of the Common Shares, the Company’s operations, its ability to raise debt or equity financing for the purposes of mineral exploration and development, and the operations of the Company’s suppliers, contractors and service providers.
4.1.17 Environmental Risks
The Company’s activities are subject to extensive laws and regulations governing environment protection. The Company is also subject to various reclamation related conditions. Although the Company closely follows and believes it is operating in compliance with all applicable environmental regulations, there can be no assurance that all future requirements will be obtainable on reasonable terms. Failure to comply may result in enforcement actions causing operations to cease or be curtailed and may include corrective measures requiring capital expenditures. Intense lobbying over environmental concerns by non-governmental organizations has caused some governments to cancel or restrict development of mining projects. Current publicized concern over climate change may lead to carbon taxes, requirements for carbon offset purchases or new regulation. The costs or likelihood of such potential issues to the Company cannot be estimated at this time.
The legal framework governing this area is constantly developing, therefore the Company is unable to fully ascertain any future liability that may arise from the implementation of any new laws or regulations, although such laws and regulations are typically strict and may impose severe penalties (financial or otherwise). The proposed activities of the Company, as with any exploration, may have an environmental impact which may result in unbudgeted delays, damage, loss and other costs and obligations including, without limitation, rehabilitation and/or compensation. There is also a risk that the Company’s operations and financial position may be adversely affected by the actions of environmental groups or any other group or person opposed in general to the Company’s activities and, in particular, the proposed exploration and mining by the Company within the Provinces of Newfoundland and Ontario.
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4.1.18 Social and Environmental Activism
There is an increasing level of public concern relating to the effects of mining on the nature landscape, in communities and on the environment. Certain non-governmental organizations, public interest groups and reporting organizations (“NGOs”) who oppose resource development can be vocal critics of the mining industry. In addition, there have been many instances in which local community groups have opposed resource extraction activities, which have resulted in disruption and delays to the relevant operation. While the Company seeks to operate in a social responsible manner and believes it has good relationships with local communities in the regions in which it operates, NGOs or local community organizations could direct adverse publicity against and/or disrupt the operations of the Company in respect of one or more of its properties, regardless of its successful compliance with social and environmental best practices, due to political factors, activities of unrelated third parties on lands in which the Company has an interest or the Company’s operations specifically. Any such actions and the resulting media coverage could have an adverse effect on the reputation and financial condition of the Company or its relationships with the communities in which it operations, which could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.
4.1.19 Dependence on Management and Key Personnel
The success of the Company is currently largely dependent on the performance of its directors and officers. The loss of the services of any of these persons could have a materially adverse effect on the Company’s business and prospects. There is no assurance the Company can maintain the services of its directors, officers or other qualified personnel required to operate its business. As the Company’s business activity grows, the Company will require additional key financial, administrative and mining personnel as well as additional operations staff. There can be no assurance that these efforts will be successful in attracting, training and retaining qualified personnel as competition for persons with these skill sets increase. If the Company is not successful in attracting, training and retaining qualified personnel, the efficiency of its operations could be impaired, which could have an adverse impact on the Company’s operations and financial condition. In addition, the COVID-19 pandemic may cause the Company to have inadequate access to an available skilled workforce and qualified personnel, which could have an adverse impact on the Company’s financial performance and financial condition.
4.1.20 First Nations Land Claims
Certain of the Company’s mineral properties may now or in the future be the subject of First Nations land claims. The legal nature of First Nations land claims is a matter of considerable complexity. The impact of any such claim on the Company’s material interest in the Company’s mineral properties and/or potential ownership interest in the Company’s mineral properties in the future, cannot be predicted with any degree of certainty and no assurance can be given that a broad recognition of First Nations rights in the areas in which the Company’s mineral properties are located, by way of negotiated settlements or judicial pronouncements, would not have an adverse effect on the Company’s activities. Even in the absence of such recognition, the Company may at some point be required to negotiate with and seek the approval of holders of First Nations interests in order to facilitate exploration and development work on the Company’s mineral properties, there is no assurance that the Company will be able to establish practical working relationships with the First Nations in the area which would allow it to ultimately develop the Company’s mineral properties.
4.1.21 Claims and Legal Proceedings
The Company and/or its directors and officers may be subject to a variety of civil or other legal proceedings, with or without merit. From time to time in the ordinary course of its business, the Company may become involved in various legal proceedings, including commercial, employment and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s attention and resources and cause the Company to incur significant expenses. Furthermore, because litigation is inherently unpredictable, the results of any such actions may have a material adverse effect on the Company’s business, operating results or financial condition.
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4.1.22 Conflicts of Interest
Most of the Company’s directors and officers do not devote their full time to the affairs of the Company. All of the directors and officers of the Company are also directors, officers and shareholders of other natural resource or public companies, and as a result they may find themselves in a position where their duty to another company conflicts with their duty to the Company. Although the Company has policies which address such potential conflicts and the BCBCA has provisions governing directors in the event of such a conflict, none of the Company’s constating documents or any of its other agreements contain any provisions mandating a procedure for addressing such conflicts of interest. There is no assurance that any such conflicts will be resolved in favour of the Company. If any such conflicts are not resolved in favour of the Company, the Company may be adversely affected.
4.1.23 Gold and Metal Prices
If the Company’s mineral properties are developed from exploration properties to full production properties, the majority of its revenue will be derived from the sale of gold. Therefore, the Company’s future profitability will depend upon the world market prices of the gold for which it is exploring. The price of gold and other metals are affected by numerous factors beyond the Company’s control, including levels of supply and demand, global or regional consumptive patterns, sales by government holders, metal stock levels maintained by producers and others, increased production due to new mine developments and improved mining and production methods, speculative activities related to the sale of metals, availability and costs of metal substitutes.
Moreover, gold prices are also affected by macroeconomic factors such as expectations regarding inflation, interest rates and global and regional demand for, and supply of, gold as well as general global economic conditions. These factors may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities. Additionally, the current COVID-19 pandemic and efforts to contain it, including restrictions on travel and other advisories issued may have a significant effect on gold prices.
4.1.24 Negative Cash Flow from Operating Activities
The Company has no history of earnings and had negative cash flow from operating activities since inception. The Company’s mineral properties are in the exploration stage and there are no known mineral resources or reserves and the proposed exploration programs on the Company’s mineral properties are exploratory in nature. Significant capital investment will be required to achieve commercial production from the Company’s existing projects. There is no assurance that any of the Company’s mineral properties will generate earnings, operate profitably or provide a return on investment in the future. Accordingly, the Company will be required to obtain additional financing in order to meet its future cash commitments.
4.1.25 Going Concern Risk
The Company’s financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. The Company’s future operations are dependent upon the identification and successful completion of equity or debt financings and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that the Company will be successful in completing equity or debt financings or in achieving profitability. The financial statements do not give effect to any adjustments relating to the carrying values and classifications of assets and liabilities that would be necessary should the Company be unable to continue as a going concern.
4.1.26 Reporting Issuer Status
The Company is subject to reporting requirements under applicable securities law, the listing requirements of the TSXV and other applicable securities rules and regulations. Compliance with these requirements can increase legal and financial compliance costs, make some activities more difficult, time consuming or costly, and increase demand on existing systems and resources. Among other things, the Company is required to file annual, quarterly and current reports with respect to its business and results of operations and maintain effective disclosure controls and procedures and internal controls over financial reporting. In order to maintain and, if required, improve disclosure controls and procedures and internal controls over financial reporting to meet this standard, significant resources and management oversight is required. As a result, management’s attention may be diverted from other business concerns, which could harm the Company’s business and results of operations. The Company may need to hire additional employees to comply with these requirements in the future, which would increase its costs and expenses.
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4.1.27 Risks Associated with Acquisitions
If appropriate opportunities present themselves, the Company may acquire mineral claims, material interests in other mineral claims, and companies that the Company believes are strategic. The Company currently has no understandings, commitments or agreements with respect to any material acquisition, other than as described in this AIF, and no other material acquisition is currently being pursued. There can be no assurance that the Company will be able to identify, negotiate or finance future acquisitions successfully, or to integrate such acquisitions with its current business. The process of integrating an acquired Company or mineral claims into the Company may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for ongoing development of the Company’s business. Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to goodwill and other intangible assets, which could materially adversely affect the Company’s business, results of operations and financial condition.
4.1.28 Force Majeure
The Company’s projects now or in the future may be adversely affected by risks outside the control of the Company, including the price of gold on world markets, labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods, explosions or other catastrophes, pandemics, epidemics or quarantine restrictions.
4.1.29 Infrastructure
Exploration, development and processing activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important elements of infrastructure, which affect access, capital and operating costs. The lack of availability on acceptable terms or the delay in the availability of any one or more of these items could prevent or delay exploration or development of the Company’s mineral properties. If adequate infrastructure is not available in a timely manner, there can be no assurance that the exploration or development of the Company’s mineral properties will be commenced or completed on a timely basis, if at all. Furthermore, unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of necessary infrastructure could adversely affect its operations.
Exploration operations depend on adequate infrastructure. In particular, reliable power sources, water supply, transportation and surface facilities are necessary to explore and develop mineral projects. Failure to adequately meet these infrastructure requirements or changes in the cost of such requirements could affect the Company’s ability to carry out exploration and future development operations and could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.
4.1.30 Climate Change Risks
The Company acknowledges climate change as an international and community concern and it supports and endorses various initiatives for voluntary actions consistent with international initiatives on climate change. However, in addition to voluntary actions, governments are moving to introduce climate change legislation and treaties at the international, national, state/provincial and local levels. Where legislation already exists, regulation relating to emission levels and energy efficiency is becoming more stringent. Some of the costs associated with reducing emissions can be offset by increased energy efficiency and technological innovation. However, if the current regulatory trend continues, the Company expects that this could result in increased costs at some of its operations in the future.
The Company and the mining industry are facing continued geotechnical challenges, which could adversely impact the Company’s production and profitability. Unanticipated adverse geotechnical and hydrological conditions, such as landslides, floods, seismic activity, droughts and pit wall failures, may occur in the future and such events may not be detected in advance. Geotechnical instabilities and adverse climatic conditions can be difficult to predict and are often affected by risks and hazards outside of the Company’s control, such as severe weather and considerable rainfall. Geotechnical failures could result in limited or restricted access to mine sites, suspension of operations, government investigations, increased monitoring costs, remediation costs, loss of ore and other impacts, which could cause one or more of the Company’s projects to be less profitable than currently anticipated and could result in a material adverse effect on the Company’s business results of operations and financial position.
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4.1.31 Information Systems and Cyber Security
The Company’s operations depend on information technology (“IT”) systems. These IT systems could be subject to network disruptions caused by a variety of sources, including computer viruses, security breaches and cyber-attacks, as well as disruptions resulting from incidents such as cable cuts, damage to physical plants, natural disasters, terrorism, fire, power loss, vandalism and theft. The Company’s operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Company’s reputation and results of operations.
Although to date the Company has not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that the Company will not incur such losses in the future. The Company’s risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. As a result, cyber security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.
4.2 Risks Related to the Company’s Securities
4.2.1 Speculative Nature of Investment Risk
An investment in the Company’s securities carries a high degree of risk and should be considered as a speculative investment. The Company has no history of earnings, limited cash reserves, a limited operating history, has not paid dividends, and is unlikely to pay dividends in the immediate or near future. The likelihood of success of the Company must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the establishment of any business. An investment in the Company’s securities may result in the loss of an investor’s entire investment. Only potential investors who are experienced in high-risk investments and who can afford to lose their entire investment should consider an investment in the Company.
4.2.2 Price may not Represent the Company’s Performance or Intrinsic Fair Value
The market price of a publicly-traded stock is affected by many variables not directly related to the corporate performance of the Company, including the market in which it is traded, the strength of the economy generally, the availability of the attractiveness of alternative investments, and the breadth of the public market for the stock. The effect of these and other factors on the market price of the Common Shares on the TSXV in the future cannot be predicted.
4.2.3 Securities or Industry Analysts
The trading market for the Common Shares could be influenced by research and reports that industry and/or securities analysts may publish about the Company, its business, the market or its competitors. The Company does not have any control over these analysts and cannot assure that such analysts will cover the Company or provide favourable coverage. If any of the analysts who may cover the Company’s business change their recommendation regarding the Company’s stock adversely, or provide more favourable relative recommendations about its competitors, the stock price would likely decline. If any analysts who may cover the Company’s business were to cease coverage or fail to regularly publish reports on the Company, it could lose visibility in the financial markets, which in turn could cause the stock price or trading volume to decline.
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4.2.4 Price Volatility of Publicly Traded Securities
The Common Shares are listed on the TSXV. Securities of mineral exploration and development companies, have experienced substantial volatility in the past, often based on factors unrelated to the companies’ financial performance or prospects. These factors include macroeconomic developments in North America and globally and market perceptions of the attractiveness of particular industries.
The price of the Common Shares is also likely to be significantly affected by short-term changes in gold or other mineral prices or in the Company’s financial condition or results of operations. Other factors unrelated to the Company’s performance that may affect the price of the Common Shares include the following: the extent of analytical coverage available to investors concerning the Company’s business may be limited if investment banks with research capabilities do not follow the Company; lessening in trading volume and general market interest in the Common Shares may affect an investor’s ability to trade significant numbers of Common Shares; the size of the Company’s public float may limit the ability of some institutions to invest in the Common Shares; and a substantial decline in the price of the Common Shares that persists for a significant period of time could cause the Common Shares to be delisted from such exchange, further reducing market liquidity. As a result of any of these factors, the market price of the Common Shares at any given point in time may not accurately reflect the Company’s long-term value. Securities class action litigation often has been brought against companies following periods of volatility in the market price of their securities. New Found may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources.
The market price of the Common Shares is affected by many other variables which are not directly related to the Company’s success and are, therefore, not within New Found’s control. These include other developments that affect the market for all resource sector securities, the breadth of the public market for the Company’s Common Shares and the attractiveness of alternative investments. The effect of these and other factors on the market price of the Common Shares is expected to make the price of the Common Shares volatile in the future, which may result in losses to investors.
4.2.5 Dilution
Future sales or issuances of equity securities could decrease the value of the Common Shares, dilute shareholders’ voting power and reduce future potential earnings per Common Share. New Found may sell additional equity securities in future offerings (including through the sale of securities convertible into Common Shares) and may issue additional equity securities to finance the Company’s operations, development, exploration, acquisitions or other projects. New Found cannot predict the size of future sales and issuances of equity securities or the effect, if any, that future sales and issuances of equity securities will have on the market price of the Common Shares. Common Sales or issuances of a substantial number of equity securities, or the perception that such sales could occur, may adversely affect prevailing market prices for the Common Shares. With any additional sale or issuance of equity securities, investors will suffer dilution of their voting power and may experience dilution in the Company’s earnings per Common Share.
4.2.6 Dividends
To date, the Company has not paid any dividends on the outstanding Common Shares. Any decision to pay dividends on the Common Shares of the Company will be made by the Board on the basis of the Company’s earnings, financial requirements and other conditions. See “Dividends and Distributions”.
4.2.7 TSXV Listing
The Company may fail to meet the continued listing requirements for the Common Shares to be listed on the TSXV. If the TSXV delists the Common Shares from trading on its exchange, the Company could face significant material adverse consequences, including: a limited availability of market quotations for the Common Shares; a determination the Common Shares are a “penny stock” which will require brokers trading in the Common Shares to more stringent rules and possibly resulting in a reduced level of trading activity in the secondary market for the Common Shares; a limited amount of news and analysts coverage for the Company; and a decreased ability to issue additional securities or obtain additional financing in the future.
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5 QUEENSWAY PROJECT
5.1 Summary
New Found commissioned RSC Consulting Limited, trading as RSC, to prepare the Technical Report in compliance with Canadian National Instrument 43-101 (NI 43-101), for its 100% owned Queensway Project, located near Gander, Newfoundland, Canada. The Technical Report documents all data and data collection procedures for the Queensway Project up until May 27, 2021. The Technical Report is titled “NI 43-101 Technical Report for the Queensway Project, Newfoundland, Canada”. The effective date of the Technical Report is May 27, 2021.
The Qualified Persons for the Technical Report are Mr. René Sterk, M.Sc., MAIG (RPGeo) FAusIMM CP(Geo) MSEG of RSC Consulting Limited and Stefan Kruse, PhD., P.Geo., (APEGNB, PEGNL, EGBC) of Terrane Geoscience Inc. (each a “QP” and together the “QPs”), and independent of the Company, as defined in NI 43-101. Mr. Sterk takes responsibility for all sections of the Technical Report, except those sections related to the site visit. Dr. Kruse takes responsibility for all sections of the Technical Report that are related to the site visit.
The scientific and technical information in this section relating to the Queensway Project is derived from, and in some instances is a direct extract from, and is based on the assumptions, qualifications and procedures set out in, the Technical Report. Such assumptions, qualifications and procedures are not fully described in this AIF and the following summary does not purport to be a complete summary of the Technical Report. Reference should be made to the full text of the Technical Report, which is available for review under the Company’s profile on SEDAR at www.sedar.com.
The technical content disclosed in this AIF was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer of the Company and a Qualified Person as defined in NI 43-101.
5.2 Property Description and Location
Location and Access
The Queensway Project is located in north-central Newfoundland 12 km to the west of the town of Gander. It covers three non-contiguous mineral license groups (Figure 1). The Queensway Project contains 86 map-staked mineral licenses containing 6,041 mining claims covering 151,025 ha. The project is located within 1:250,000 scale National Topographic System Sheets 002D and 002E.
1. | Queensway North (previously Gander Gold North): East of the towns of Glenwood-Appleton, to the north of Gander Lake, covering the Appleton Fault Zone (“AFZ”) and Joe Batt’s Pond Fault Zone (“JBPFZ”) and associated areas around them. Queensway North comprises 36 mineral licenses, totaling 15,775 ha. |
2. | Queensway South (previously Gander Gold South): Located to the south and west of Gander Lake along the eastern side of the Northwest Gander River, extending east to the Southwest Gander River area and west to near the Baie d’Espoir road. Queensway South comprises 48 mineral licenses, totaling 130,650 ha. |
3. | Twin Ponds / Island Pond (“TP”): Located to the west of the Gander River and northwest of Glenwood- Appleton. Twin Ponds is separated from the other licenses on the west side of properties and comprises two mineral licenses totaling 4,600 ha. |
The Trans-Canada Highway (“TCH”) extends through the Queensway North portion of the property. The Northwest Gander (“NWG”) road extends along the west side of the Northwest Gander River and provides access to the Queensway South portion of the property. A steel bridge ~40 km to the south of Glenwood provides access across the Northwest Gander River to the east side of the river. A network of gravel forest access roads, in variable condition, and trails extend through the properties from the TCH and NWG road.
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The property is accessed by the TCH, which passes through the southern portion of the AFZ/JBPFZ claim areas and part of the Queensway North claims area, and by the NWG road, which extends along the western portion of the Queensway South claims area and to the south and west of Gander Lake. Most of the project is accessible via gravel woods roads, including the AFZ access road, the JBPFZ access road, the JBP road and the roads to the east of the steel bridge across the NWG River. Areas in the extreme southeast and southwest are the most difficult to access. The SW area is best accessed via woods roads from Route 360, the Baie d’Espoir highway, that leaves the TCH at Bishop’s Falls, ~70 km west of Glenwood. Many quad/harvester trails and winter roads are also present in more recently cut-over areas, providing excellent access for heavy equipment when required. Mineral licenses immediately south of Gander Lake can also be accessed easily by boat. Newfoundland Helicopters has a helicopter base in Appleton which provides easy and relatively cheap air travel to most parts of the property. Additionally, the international airport at Gander has bush plane and helicopter bases. Shipping through the ports of Lewisporte and Botwood, 25 and 70 km to the west of Appleton, respectively, and north of the TCH, both have good harbors; however, sea and pack ice do cause disruptions with the winter shipping.
The nearest large community is Gander, a town of ~12,000 people is located ~10 km to the east on the TCH, which has an international airport and most amenities required for exploration including labor, equipment, accommodation and supplies. The small towns of Appleton and Glenwood lie within the Queensway Project. Combined they have a population of ~1,400 with good availability of labor as many of the people work in the resource sectors. Only limited amenities are available; however, a helicopter base and an environmental remediation company are located in Appleton.
The installation of surface infrastructure such as tailings disposal, waste rock disposal and mining facilities would require New Found to convert the mineral licenses targeted for surface infrastructure into mining leases through a regulatory process administered by the Newfoundland Department of Industry, Environment, and Technology.
Electricity is available from the NL provincial grid, which has three transmission lines through the Queensway Project.
1. | A 350 kV HVDC direct-current line, which passes through the approximate center of the Queensway South licenses. |
2. | Two 138 kV HVAC transmission lines to the north of the TCH crossing the AFZ and JBPFZ trends on the Queensway North licenses. |
3. | A 69 kV HVAC transmission line that approximately parallels the TCH to the north across the AFZ and JBPFZ trends on the Queensway North licenses and follows the TCH and secondary routes. |
In addition, electrical power is supplied, through the provincial grid, to the towns of Glenwood and Appleton which are surrounded by the New Found Queensway licenses.
There is currently no developed water supply or water right attached to the project aside from the water use license described below; although, the project encompasses the Towns of Glenwood and Appleton which currently have water and sewer systems in place. The region also contains many bodies of water which can be drawn from should the need arise, and the permitting allows for this. There are no buildings or ancillary facilities on the Property except for cabins and the residential and commercial facilities that exist within the boundaries of the towns of Appleton and Glenwood. New Found has purchased four lots in the Appleton Industrial Park which hosts a fenced-in core yard, office trailer, and shipping container, as well as a trailer-style camp for drill crews. There are no tailings disposal areas located on the Queensway Project site. The Beaver Brook Antimony Mine, currently placed under care and maintenance, has an associated tailings disposal area and is located on the western boundary of the Queensway Project. Given the extent of the project’s mineral licenses, it is likely that a suitable site for tailing storage could be found within the project lands.
There are currently no waste disposal areas located on site. With proper engineering and environmental controls, it is likely that a suitable site for waste disposal area could be found within the project lands. A waste management plan has been completed by Gemtec Consulting Engineers and Scientists Limited of Paradise, NL.
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The town of Gander (population 12,000) is 10 km to the east of the Queensway North claims along the Trans-Canada Highway (TCH), where logistical support, a local workforce, and an international airport are found. The town of Grand Falls Windsor (population 14,000) is located 50 km to the west of the Queensway North claims along the TCH. The towns of Appleton and Glenwood, located in the western portion of the property, to the north of Gander Lake, are encompassed by the property.
Figure 1: Queensway Project Location Map. Source: New Found, 2021
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Mineral Titles
The Queensway Project lands are map-staked crown mineral licenses, issued by the Newfoundland Department of Industry, Energy, and Technology, Mineral Lands Division. Mineral licenses are acquired by online staking in the province of Newfoundland using the Mineral Lands Administration Portal (MinLAP) system. Licenses can consist of 1–256 claims per license. Assessment work is required to keep them in good standing: the first five years require $200, $250, $300, $350 and $400/year/claim, respectively. Assessment requirements continue for up to 30 years with increasing costs as follows: $600/claim for years six through ten, $900/claim for years 11 through 15, $1,200/claim for years 16 through 20, $2,000/claim for years 21 through 30. Renewal fees paid directly to the government, which also increase with time, are required every five years (at years 5, 10, 15, 20) and annually for years 21 through 30.
The QP has not independently verified the legal status of surface rights and has not investigated the legality of any of the underlying agreements that may exist concerning the project area.
Surface Rights
New Found does not own surface rights on the Queensway Project. Surface rights owners within the property boundaries include cabin owners in specific cottage areas and the residents of the towns of Appleton and Glenwood. By law, no exploration can take place within town boundaries without permission. New Found can explore areas with surface rights held by others with the owner’s permission and is responsible for any damage caused to the surface rights. New Found maintains the legal right to access and conduct exploration on crown land without encumbrance with the exception of necessary exploration permits for the work being conducted.
Queensway Property
The locations of the mineral licenses are shown in Figure 2. As map-staked mineral licenses, the project lands in the Queensway Project are subject to annual assessment requirements and claim renewal costs. The total exploration expenditures required for 2021 to maintain the claims in good standing is $1,443,589 along with $94,200 in license renewal fees. The total exploration expenditures required for 2022 to maintain the claims in good standing is $2,614,364 along with $ 14,850 in license renewal fees. These costs are adjusted each time an assessment report is submitted or when assessment credits are applied by the Mineral Lands Division.
The total option payments outstanding to fully execute each agreement are outlined in Table 1.
In addition, in March 2019, New Found completed a financing with GoldSpot Discoveries Corp. (GoldSpot), which granted a net smelter royalty to GoldSpot covering most of the existing 21 staked licenses and parts of the optioned properties. This royalty ranges from 0.4–1.0%, such that royalties on the subject lands of the agreement do not exceed 1.0%. Additional lands staked in April 2020 are also subject to the GoldSpot royalty.
After the application of the 0.6% area of influence included in the Linear and JBP Linear Property and the Golden Bullet option agreement, the total net smelter royalty for the Queensway Project ranges from 0.6–2.5 % before the application of NSR buy-back provisions. After the application of buy-back provisions, the total net smelter royalty ranges from 0.5–1.6%.
Option Agreement | Completion Date | NSR | ||
Linear and JPB Linear Project | Fully Executed | 1.6% NSR | ||
Unity Project | Fully Executed | 1.6% NSR with $1M buyback of 1.0% | ||
United Gold | Fully Executed | 0.6% NSR | ||
Golden Bullet | Fully Executed | 1.6% NSR with $1M buyback of 1.0% | ||
Blackmore option | Fully Executed | 0.6% NSR |
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Option Agreement | Completion Date | NSR | ||
Guinchard claims | Fully Executed | 1.0% NSR with $1M buyback of 0.5% | ||
JPB Linear Project | Fully Executed | 1.6% NSR with $1M buyback of 1.0% | ||
P-Pond Project | Fully Executed | 1.0% NSR with $0.25M buyback of 0.5% | ||
Lush Property | Fully Executed | 2.5% NSR with $1.0M buyback of 1.0% |
Table 1: Option agreement summary
Figure 2: Queensway Claim location map
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Figure 3: Map of properties covered by the Option Agreements and map staked mineral licenses. Source: New Found, 2020
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Environmental Liabilities and Permitting
All exploration activities, including reclamation, must comply with all pertinent federal and provincial laws and regulations. The most fundamental requirement is that exploration on crown land must prevent unnecessary or undue degradation or impact on fish and wildlife and requires reclamation if any degradation or impacts occur. All exploration activities in Newfoundland and Labrador require an Exploration Approval from the Department of Industry, Energy, and Technology (“DIET”) via the Mineral Lands Division before the start of work. In these approvals, requirements for the exploration are listed along with contacts and conditions from the various other agencies to which the application was referred. Four exploration approvals are in place as of the date of this Technical Report.
E200303: This approval was issued for diamond drilling (750 drill holes), an airborne geophysical survey, and fuel storage in the Queensway North area. The permit was issued 8 October 2020 and expires 8 October 2021. As part of 34 permit conditions, New Found is required to acquire two permits from the Department of Environment and Climate Change (“DECC”). The additional permits held by New Found for the Queensway North project are listed below.
Section 39 Permit (PRO11270-2020): This permit contains 47 conditions and six special terms. The permit was issued on 28 August 2020 and will expire on August 28, 2021.
Permit (PRO11547-2020): This permit was issued to continue drilling at Queensway North and contains 53 conditions. The permit was issued on 21 December 2020 and amended on 6 April 2021. The amendments included the modification of condition 33 and the addition of 5 conditions. The permit is set to expire on October 16, 2023.
Water Use License (WUL/P-21-11571): This permit was issued in anticipation of the additional holes planned for Queensway North. The license was issued on 12 January 2021 and will expire on 11 December 2021. It contains 24 conditions and a requirement to record water resources used. The permit was amended on April 8, 2021, to reflect changes in conditions 9 and 24.
E200265: This approval was issued 12 August 2020 and expires 12 August 2021 and was granted for geochemical surveying and prospecting over the entire Queensway Project. These exploration methods have minimal environmental disturbance and therefore, no additional permits are required from other agencies. A recommendation to acquire an operating permit, cutting permit, and burn permit from the local Forest Management Office was included in the 14 conditions.
E200293: This exploration approval was granted for 12 trenches in the Queensway South area and an airborne geophysical survey over the Queensway Project. The permit was issued 16 October 2020 and expires 16 October 2021. As part of 25 conditions of the permit, New Found was required to obtain three additional permits under the Water Resources Act from the DECC. Additional permits held by New Found are listed below.
Section 39 Permit (PRO11573-2021): Permit to operate within a Protected Public Water Supply Area (PPWSA)— the permit contains 36 conditions and six special terms. The permit was issued on 14 January 2021 and is valid for one year.
Section 48 Permit (ALT11481-2020): Permit to alter or cross known water bodies, and a Water Use License— this permit contains 22 conditions and six special terms. The permit was issued 18 November 2020 and expires 18 November 2021.
Water Use License (WUL/P-19-11482): This permit was issued 18 November 2020 and expires 16 October 2021. This license contains 24 conditions and a requirement to record water use amounts.
Water Use License (WUL/P-20-10463): This permit was issued due to the modification of planned trenching at Queensway South. The permit was issued on September 11, 2020, and amended on April 6, 2021, to reflect changes to conditions 7, 9 and 24. The permit expires on October 16, 2021. This permit contains 24 conditions and a requirement to record water amounts used.
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E200319: This permit was issued for an airborne geophysical survey over the Queensway Project, including newly acquired licenses. The permit was issued 24 September 2020 and expires 24 September 2021. The permit was amended March 8, 2021, to include all areas of the Queensway Project. The permit contains 15 conditions, and no extra permits are required.
Any changes to the planned work must be submitted to the DIET and either an amended approval is given, or a new application is requested. The Environmental Assessment Division of DECC stated in a letter dated September 18, 2020, that New Found was required to register the projects it is undertaking with the department. New Found compiled an Environmental Registration (2106), and this was submitted 22 October 2020. The project was released from further review on 11 December 2020, with 23 pages of comments from referral agencies and requirements to develop a Waste Management Plan and a Women’s Employment Plan.
The QP notes that environmental liabilities appear to be limited to ground disturbances related to trenching and drilling, which require reclamation at a future date. The JBPFZ is a heavily logged area with an extensive network of all-season and winter-only woods access roads, and cutovers that have been scarified and partially replanted using silviculture. All but one of the trenches dug in 2017 and 2018 have been reclaimed, as required by license agreements, and the replanting of small trees using silviculture will follow at a future date. Trenches completed in 2020 along the AFZ are largely reclaimed; one trench remains open for additional review. Historical trenches in the AFZ, JBPFZ and Queensway South areas, some of which have not been reclaimed, are not the responsibility of New Found under present laws unless the Company conducts additional trenching in those areas. There is little evidence of drilling exploration by previous operators as decades of natural plant growth has removed most traces of prior exploration activities.
All drill sites have been cleaned of drill cuttings and drill pads have been reclaimed to prevent negative environmental effects. In the opinion of the QP, diamond drilling conducted from 2019 onwards does not present any apparent environmental liabilities.
Generally, the mineral licenses are available for exploration activities year-round and only subject to the conditions of the exploration approvals and water use license. Other activities such as construction, road building, camps and water crossings may require additional permits from outside of DIET. Mineral licenses within the southernmost portion of Queensway South, specifically licenses 024557M, 024558M, 024561M, 024563M, 024568M, and 024570M are restricted from exploration activities from mid-May to early-July as the area is a spring habitat for Newfoundland caribou.
The 2020 and 2021 activities, planned and active, require the renewal of the regional prospecting and geochemistry permits. The AFZ and Queensway South trenching permits were renewed along with the associated water use permits. Additional permits were acquired for diamond drilling and water use associated with the drilling. Any number of individual Exploration Approvals can be applied for; typical delays in permit approval range from 30–60 days. Permitting is an ongoing administrative activity expected with such a large land package and varied exploration programs.
The QP is unaware of any environmental liabilities to which the Queensway Project is currently subject other than those mentioned above. There appear to be no significant factors or risks that may affect access, title, right or ability to perform work on the property.
5.3 History
Ownership
Over the last few decades, many individuals and companies have explored the property for Au and property ownership has changes hands many times. The following section describes in detail past owners of the land and outlines the history of ownership in the various areas.
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Twin Ponds / Island Pond
The Twin Ponds/Island Pond portions of the Queensway Project are located to the northwest of the main portion of the property. Below is the history of ownership, starting from the oldest and working forward in time.
· | 1988 — Noranda Exploration was the first to conduct mineral exploration in the area, staking in 1988 and exploring using prospecting and geochemistry into 1990. From 1991–1995 no exploration took place, and the Noranda licenses were eventually canceled. |
· | 1995 — Prospectors Jim Bouzanne, Michael Stacey, L. Dwyer focused their efforts on the Big Pond area near the current New Found licenses. These licenses were eventually canceled.\ |
· | 2002 — Crosshair Exploration staked Big Pond, Dan’s Pond, Island Pond, Salmon Pond area. Their exploration attracted the attention of Rubicon Minerals/Paragon Minerals. Regional exploration consisted of prospecting and geochemistry and continued until 2004. All licenses were eventually canceled. |
· | 2007–2015 — Prospectors during this period included Michele and Nath Noel, Gary and Donna Lewis, Nehemiah Pinsent, Larry Quinlan, Gordon Lawrence, and Jessica Bjorkman. Staked claims explored the Big Pond, Dan’s Pond and Shirley Lake areas; however, all licenses were canceled within 2 years of staking. |
In mid-2016, the current licenses were optioned to New Found by Nigel Lewis shortly after they were staked. Exploration has included airborne EM and high-resolution magnetics and follow-up prospecting and till geochemistry. The option agreement is still in place and exploration is continuing.
Queensway South
The licenses to the south of Gander Lake held by New Found are termed the ‘Queensway South’. This area has a long and complex history of ownership. The below description does not refer to specific land claim boundaries, but instead discusses the areas’ property ownership in general terms.
· | 1981 — Minorex Limited held a claim in the Little Gander Pond area. |
· | 1984 — Glenn R. Clark & Associates Limited held licenses in the Caribou Lake area. |
· | 1985–1988 — Prospector Lewis Murphy and his company Commodore Mining held exploration licenses in the area, especially in the Hunts Pond and Berry Hill areas. |
· | 1985–1987 — Corona Corporation held claims in the Hunts Pond and Southwest Gander River area. |
· | 1985–1990 — Noranda Exploration claimed Northwest and Southwest Gander Rivers, Gander Lake, Gander River areas. They were the major license holder with large land packages over the Jumbo Brook, Paul’s Pond and Greenwood Pond areas. The licenses were either surrendered or canceled in the early 1990s. |
· | 1986–1987 — Kidd Creek Mines, partnered with Noranda Falconbridge for claims in the Northwest Gander River area as well as the Caribou Lake area east of Queensway South. |
· | 1988–1989 — Roycefield Resources claimed the Beaver Brook area and optioned licenses over Sb discoveries made by Noranda, with the property becoming the Beaver Brook Antimony Mine. |
· | 1988–1992 — BP Resources Canada Ltd. held licenses in the Great Bend and Coy Pond areas just southwest of New Found’s current claims. |
· | 1989–1990 — Prospector Lew Murphy claimed the Bear Pond and Rollins Pond areas. |
· | 1993–1995 — John Clarke claimed the Greenwood Pond and Paul’s Pond area. |
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· | 1995 — New Island Minerals claimed the Northwest Gander River area. |
· | 1995 — Roland Butler, John Clarke, Wayne Pickett and Rod Churchill claimed the Southwest Gander River area. |
· | 1995–2000 — Prospectors Benjamin Critchfield, Denis Walsh and Timothy Froude held licenses in the Dead Wolf Pond area. |
· | 1995–2001 — Altius Minerals claimed the Greenwood Pond area and other areas along the Northwest Gander River. |
· | 1995–2000 — Prospector Lai Chan claimed the Paul’s Pond and Greenwood Pond areas. These claims were tied on to Altius. Robert Stares held ground in the Caribou Lake area. Paul Crocker held claims in the Hunts Pond area. |
· | 1999 — Cornerstone Resources claimed the Southwest Gander River area. |
· | 2001–2002 — Prospector Kevin Keats claimed the Eastern Pond area. Allan Keats held some licenses in the Little Gander Pond area. |
· | 2001–2002 — South Coast Ventures held claims in the Northwest Gander River, Joes Feeder, Steel Bridge, Jumbo Brook, and Greenwood Pond areas. Buchans River Ltd. held minor ground at Hunts Pond. |
· | 2002–2010 — Period with the most ground being held by independent prospectors. Lai Chan, Darrin Hicks, Nathaniel Noel and E. Michelle Noel held ground in the Berry Hill area. Roland Quinlan, Fred and Wesley Keats, Brian Rowsell, James and Calvin Crocker held ground in the Dead Wolf Pond, Caribou Pond, and Southwest Gander River area. Stephen Baldwin and the Quinlan’s held minor claims in the Hunts Pond area and Suley Keats Sr., Alexander Duffitt, Gene Hedges held licenses in the Little Gander Pond and Southwest Gander River area. The Dead Wolf Pond area was particularly busy by prospectors Eddie Quinlan, Frank Pollett, Glenn Stacey, John Sceviour, Hayward Critchley, and the Crockers. |
· | 2003–2004 — Black Bart Prospecting and partner Spruce Ridge Resources held some ground at Hunts Cove and Caribou Lake eventually attracting interest from CanAlaska Ventures and VVC Exploration. |
· | 2003–2004 — Most of the licenses reverted to the original prospectors who held the most promising ground. There was limited company interest during this period other than Altius Resources. Much of the area remained unclaimed. |
· | 2003–2005 — Candente Resources claimed the Eastern, Paul’s Pond and Outflow areas and Paragon Minerals held some ground near Bear Pond. |
· | 2003–2011 — Mostly held by prospector’s claims aside from interest by Altius Resources Inc. in the Northwest Gander River, Caribou Lake, Hunts Pond, and Dead Wolf Pond areas, and Cornerstone along the Northwest Gander River. |
· | 2009–2010 — Golden Dory Resources claimed the Greenwood Pond area. |
· | 2011 — Metals Creek Resources claimed the Gander Lake area. |
· | 2011–2012 — Altius Minerals allowed many claims to revert to prospectors or be canceled for the Northwest and Southwest Gander Rivers and Greenwood Pond. |
· | 2012–2016 — A few prospectors held claims along the Northwest and Southwest Gander Rivers. Fred and Wesley Keats held ground along the Southwest Gander River. Andy Budden, Jeffrey LeDrew, Shane and Robert Stares, and Wayde Guinchard held licenses in the Dead Wolf Pond and Southwest Gander River area. Michelle Noel, Fred and Wesley Keats, Brian Rowsell, Clyde McLean, Allen Keats, and Jeffrey Neville all held licenses in the Southwest Gander River area. |
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· | 2016–2020 — Vulcan Minerals held ground in the Northwest Gander River more towards the Lizard Pond showing. |
· | 2012–2015 — A few prospectors held claims along the Northwest and Southwest Gander Rivers. |
· | 2016–Present — New Found staked the licenses that make up the bulk of the Queensway South area and optioned prospectors claims in the Paul’s Pond and Greenwood Pond areas. In 2020, New Found map-staked an additional 22 licenses on ground in the Queensway South area, largely south and east of existing claims. |
Queensway North
The properties to the north of Gander Lake were the first to be acquired by New Found by option in late 2016. The optioned properties covered known Au showings along the Appleton and JBP faults. Below is the rest of the ownership history for the claims on the property.
· | 1980 — Westfield Minerals worked the Jonathan’s Pond area. They staked an Au showing discovered by government geologists in 1980, the first recorded Au exploration in the area. |
· | 1981 and 1985 — Prospector Lewis Murphy worked the GRUB line with MD & K Agencies and Newmont Canada. |
· | 1984 — Duval Int’l Corp. for Glenn R. Clark & Associated Limited conducted basic geological mapping, VLF ground surveys, and some till sampling along the GRUC line north of Jonathan’s Pond. |
· | 1984–1986 — Noranda worked north of Gander Lake, prospecting for Au, dominating exploration activity until joint venturing with Gander River Minerals on the more prospective ground from 1992–1997 when most claims were canceled. |
· | 1987–1991 — Falconbridge worked the Joe Batts Pond area. No records of the results are available. |
· | 1999–2000 — United Carina with partner Consolidated Pine Channel Gold worked the AFZ area and optioned claims, which had been targeted earlier by Noranda and Gander River Minerals. |
· | 1997–1999 — Krinor Resources worked the Appleton and the JBP Faults. Prospector Roland Quinlan began prospecting the area east of Rocky Pond, west of Jonathan’s Pond and the Gander River. |
· | 1999–2001 — Several local prospectors worked the Gander River, Gander Lake, Millers Brook, Appleton and Joes Batts Pond areas to the north of Gander Lake into the Bellman’s Pond and Jonathans Pond region near the GRUC line. Cyril Reid, Roland Quinlan and his brothers, Jim Bouzane, and Calvin Crocker among others. |
· | 2001–2011 — Rubicon Minerals and Paragon Minerals worked the Appleton and JBP Faults. |
· | 2002–2003 — Crosshair Exploration & Mining Corp. worked ground near Bellman’s Pond and Rocky Pond along with minor activity by WAVE Exploration Corp., and prospectors Gary Lewis and Perry English. |
· | 2004–2005 — Spruce Ridge Resources worked the Little Harbor and Gander Lake North areas. |
· | 2008–2015 — Many properties reverted to the crown and were re-staked by prospectors who targeted the Au showings defined in the earlier exploration activity. |
· | 2011 — Altius explored the Jonathan’s Pond area. |
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· | 2016–Present — New Found explored the Appleton and JBP Faults and began optioning Au properties with added staking and options. By 2018, New Found established the current land package. |
· | 2020 — New Found added map stake licenses at Gander Lake and at Little Rocky Brook and Bellman’s Pond, north of the main Queensway North area. |
Past Exploration
Outside of the academic studies that delineated the geology of the Gander Group, Davidsville Group, and area lithologies, there was very little formal mineral exploration activity for Au in the Queensway Project area until Noranda in the 1980s.
· | 1950s–1960s — NALCO conducted reconnaissance base metal prospecting along the Great Bend portion of the Gander River Ultramafic Complex (GRUC) (1953–1954). Bell Asbestos examined the complex in 1963. During this time talc, copper, zinc, tungsten, arsenopyrite, and asbestos showings were discovered in the Dead Wolf, Caribou Lake and Hunts Pond areas. |
· | 1970s–1980s — Exploration continued with a focus on the potential for base metals and industrial minerals, such as chromite, magnesite, and asbestos in the GRUC north of Gander Lake. Companies included John’s Manville and International Mogul Mines. |
· | 1971 — International Mogul Mines, north of Jonathan’s First Pond, drilled a pyrite-chalcopyrite-sphalerite showing to the northeast of the Queensway Project. |
· | 1980–1981 — Westfield Minerals in the Jonathan’s Pond area conducted a follow-up program of rock sampling, prospecting, mapping and trenching to evaluate an Au-arsenopyrite showing reported by NGS geologist Frank Blackwood in 1980; thus, the beginning of Au exploration in the region. |
· | 1983–early 1990s — Noranda Exploration on the Queensway South and Queensway North properties initiated Au exploration using regional till sampling, prospecting, and stream heavy mineral concentrate (HMC) surveys identifying significant Au-in-till anomalies both to the north and south of Gander Lake. Follow-up exploration included prospecting, soil geochemistry, ground geophysics, trenching and diamond drilling, and defined Au showings including Duder Lake, and Mount Peyton, to the northwest of Gander River, Aztec, the Greenwood Pond and Paul’s Pond showings to the south of Gander Lake, and the Knob, Bowater and others in the AFZ. The Andromeda Au showing near Rocky Lake was discovered in 1991 north of Jonathan’s Pond. The soil/till geochemistry also indicated a major antimony (Sb) trend along the Northwest Gander River. Follow-up prospecting, trenching and diamond drilling resulted in the Beaver Brook Antimony deposit being discovered. Gold targets were identified throughout the Joe Batts Pond and Appleton Faults, in the Queensway North area, as well as at Paul’s Pond and Greenwood Ponds to the south of Gander Lake in the Queensway South area. |
Subsequent exploration by Noranda and other companies and prospectors has resulted in the discovery of many Au showings such as the Dome, Road and Keats/Baseline showings along the AFZ, H-Pond, Pocket Pond and Lachlan along the JBPFZ, the Goose, Road Gabbro and LBNL showings at Paul’s Pond, and the Aztec, Hornet, A-Zone Extension as well as the Greenwood showings near Greenwood Pond. Visible Au was noted in many of these showings.
Historical Drilling
Prior to 2019, over 29,000 m of core (238 holes) were drilled on or in the near vicinity of the Queensway Project. All drillholes were BQ, NQ and HQ size core drilled from the wireline drills available during the time. No rotary or other drilling types have been recorded. No holes were drilled at the Twin Ponds-Island Pond portion of the property, although four holes were drilled at the Clydesdale showings just off the northern portion of the licenses in that area. South of Gander Lake, 43 holes were drilled with over 4,300 m of core. The majority of diamond drilling has occurred North of Gander Lake in the AFZ (123 holes, 12,800 m) and JBPFZ (54 holes, 8,400 m) areas.
In 2020, New Found contracted a surveyor to verify locations of historical collars. A total of 65 collars were located and verified, while 60 collar locations were not found. Collars that were not found may be subject to considerable error, especially where only historical records are available. A total of 43 holes were re-surveyed due to significant discrepancies between original and recorded collar locations.
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No information is currently available on sample preparation methods by companies operating before the year 2000. Samples collected since 2000 were mostly analyzed by fire assay with AAS finish at Eastern Analytical Laboratories, Springdale, NL. Multielement geochemistry results were collected for selected samples but the employed method is unknown. More recent drilling programs were conducted with data quality management systems in place and reference material and blanks were included in the sample stream. However, results of check samples are not available and the QP cannot determine the accuracy or certainty of the historical assay results.
The QP considers the analytical results from historical drilling campaigns to be adequate for the data quality objective of target generation, but not for estimation of mineral resources. Geological data from these holes should be relogged and twin-holes should be drilled to verify accuracy of assay results.
Historical Mineral Resource and Reserve Estimates
No known mineral resources or reserves that are reported under an acceptable reporting code (e.g. NI 43-101, JORC, SAMREC) exist within the Queensway Project.
Historical Production
There has been no historical mineral production from this project reported.
5.4 Geologic Setting and Mineralization
Regional Geology
The island of Newfoundland is the northeastern portion of the Appalachian-Caledonian orogen in North America. It is divided into four major tectonostratigraphic zones: Humber, Dunnage, Gander and Avalon (Figure 4). These zones are the product of peri-Laurentia and peri-Gondwana micro-continental during the opening of the Iapetus and Rheic oceans, and subsequent collision with oceanic terranes during ocean closure and terrane accretion in the early to mid-Paleozoic.
The western half of the Dunnage Zone (Notre Dame Subzone) represents a peri-Laurentia continental arc complex. On the eastern side of the Dunnage Zone, where the Queensway property is located, the Exploits Subzone represents the metasedimentary and meta-igneous remnants of a peri-Gondwanan arc/back-arc complex. Cambrian-Silurian supracrustal rocks are intruded by Silurian–Devonian granites. The Exploits Subzone is delineated by the Red Indian line to the west and the Gander River Ultramafic Complex (“GRUC”; historically named the GRUB line) to the east (Figure 4). Rocks of the GRUC are Upper Cambrian in age and represent relics of an ophiolitic complex thrusted upon Middle Cambrian to Lower Ordovician arenites and shales of the Gander Zone, which were deposited on the leading edge of the Gondwanan margin. The GRUC line is a continental suture, traceable through Newfoundland and into the United Kingdom.
The tectonic evolution of Newfoundland started in the Late Cambrian to Late Ordovician (500–450 Ma) with the Taconic Orogeny, followed by the Penobscot Orogeny. The Taconic Orogeny occurred along the Laurentia margin with the collision of the Notre Dame arc and continental crust of the Humber Zone; while the Penobscot Orogeny occurred along the Gondwana continent margin. The Penobscot Orogeny involved the obduction of ophiolitic complexes onto the Gondwana margin (e.g. the GRUC). The predominantly Silurian Salinic Orogeny consisted of the closure and partial subduction of basin-hosted rocks of the Exploits subzone, as Laurentia and Ganderia converged. Ganderia was a passive margin, separated from Gondwana by narrow stretches of ocean and the Neoproterozoic arc complex of Avalonia. Avalonia collided with Laurentia during the Acadian Orogeny (450–400 Ma). The final stage of the tectonic evolution of Newfoundland involved the continental docking of the Meguma Zone (Nova Scotia) during the Neoacadian Orogeny, from the Middle Devonian to Early Carboniferous.
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Figure 4: Image of major suture zones. Source: modified from J. C. Pollock et al. 2007
Property Geology
The Queensway Project is located within the Exploits Subzone of the Dunnage Zone and lies to the west of the GRUC fault, which is the boundary of the Dunnage and Gander zones. The project area is mostly composed of Cambrian to Silurian metasedimentary rocks of the Davidsville Group. The Davidsville Group is divided into the Outflow Formation and the Hunt’s Cove Formation. Queensway South also includes the boundary between the Davidsville and Indian Island groups. The Indian Island Group is predominantly composed of Silurian-age siliciclastic rocks, intruded by the Mount Peyton Intrusive Suite.
Local Lithology
The local lithologies are predominantly Early–Middle Paleozoic sedimentary rocks. A brief description of the important geological units is given below, from east to west.
Gander River Ultramafic Complex
The GRUC extends to the east of the Queensway Project. It consists of discontinuous slivers of an ophiolitic sequence, obducted above the Gander Zone by major thrust faulting of the Penobscot Orogeny. These small mafic-ultramafic bodies predominantly comprise pyroxenite, serpentinite, gabbro, talc, tremolite zones, mafic flows and related volcaniclastics.
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Davidsville Group
The Davidsville Group occupies most of the surface area of the Queensway Project (Figure 5). It is bounded to the west by the Indian Islands Group and to the east by the Gander River Complex. It is divided into two main formations: the lower Hunt’s Cove Formation and the upper Outflow Formation. A third formation, that stratigraphically underlies the Hunt’s Cove Formation, has been defined as the Barry’s Pond Formation or Weir’s Pond Formation.
The stratigraphy of the Davidsville Group youngs towards the northwest. The Outflow Formation overlies the Hunt’s Cove Formation, which unconformably overlies ophiolitic sequences of the GRUC. The Barry’s Pond Formation occurs sporadically between the Hunt’s Cove Formation and the GRUC. It has an assemblage of fossiliferous limestone, graphitic shale, sandstone, and conglomerate, structurally imbricated with the GRUC. The Hunt’s Cove Formation transitions from a basal, thickly bedded, pebble-to-cobble conglomerate to fine-to-coarse-grained sandstone, locally interbedded with grey to black siltstone and slate. The Hunt’s Cove Formation directly contacts the overlying Outflow Formation. The Outflow Formation comprises a thick shale package and minor units of greywacke, sandstone, argillite, graptolitic slate, and conglomerate, interpreted as distal turbidite sequences deposited in an arc/back-arc setting.
Indian Islands Group
The Indian Islands Group is located east of the MPIS and west of the Davidsville Group (Figure 5). It is composed of variably calcareous to siliciclastic siltstone, shale, and sandstone, with rare beds of massive limestone. Fossil fauna, including brachiopods, corals and mollusca, suggest a late Silurian to early Devonian deposition. The Indian Islands Group is possibly equivalent to the Ten Mile Lake Formation further.
Mount Peyton Intrusive Suite
The MPIS is located along the western boundary of the Queensway Project (Figure 5, Figure 6). It consists of finegrained, equigranular gabbro and medium-grained, equigranular, biotite-hornblende granite, with minor diorite. Relative and absolute geochronological constraints suggest a post-kinematic, Silurian emplacement age of 431–417 Ma. The eastern margin of the MPIS is fault-bounded against the Indian Islands Group along the Dog Bay Line.
Mineralization
Mineralization typically occurs as coarse, free Au in brecciated, massive-vuggy, laminated and high-density stockwork quartz-carbonate veins (Figure 7). Arsenopyrite is commonly observed with Au, whereas fibrous boulangerite is less commonly observed and is associated with very high-grade mineralization. Fine- to coarse-grained disseminated pyrite occurs throughout the host rock sequence. High-grade mineralization typically occurs in deformation zones with high density quartz veining and has not been observed outside of the main vein arrays.
There are over 100 Au showings on and around the Queensway Project (Figure 8). The most notable mineralized zones in the Property are the AFZ, which includes the Keats, Lotto, Dome, TCH, Golden Joint, Little, Knob, Letha, Grouse, Road, Bullet, Trench 26, Cokes, Powerline, and Bowater showings, and the JBPFZ, which includes the H-Pond, Pocket Pond, Glass, 1744, 798, Logan and Lachlan showings (Figure 9).
Appleton Fault Zone
The AFZ is a set of NNE-striking faults and vein arrays that can be traced over ~ eight km on the western side of Queensway North. The AFZ has not been identified in outcrop, but it can be identified in satellite images as a clear NNE-striking linear depression, filled with glacial till and overlain by creeks and ponds. In drill core, the AFZ is recognized as a 100–200 m wide zone of intensely fault-brecciated sedimentary rock and fault gouge, often filled with large volumes of quartz and iron carbonate. Gold mineralization is spatially associated with the main fault lineament and thirteen Au showings occur within hundreds of meters of the lineament. The structural relationship between the Au occurrences and structures varies from prospect to prospect indicating an along-strike structural complexity of the AFZ and its adjacent subsidiary faults. Gold showings occurring along the AFZ include Keats, Lotto, Dome, TCH, Golden Joint, Little, Knob, Letha, Grouse, Road, Bullet, Trench 26, Cokes, Powerline, and Bowater (Figure 9). A description of these prospects is given below.
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Figure 5. Queensway North geology showing mapped stratigraphic units. Location of major Au occurrences marked by yellow stars.
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Figure 6. Geological context of the Queensway Project. circa 2018: Geological map from Colman-Sadd et al., 1990. (A) Location of the property with respect to major terranes of Newfoundland, (B) Regional geological context.
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Figure 7: Typical Au-bearing quartz vein styles observed at the Queensway Project. A) Brecciated quartz veining; B) Massive, vuggy quartz vein with visible Au; C) Laminated quartz veining with visible Au; D) high density stockwork veining with visible Au. Core photos from the Keats and Lotto prospects. Red circles indicate the location of visible Au.
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Figure 8: Queensway Project Au showings. Source: New Found, 2020
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Bowater Prospect
The Bowater prospect (DME File No. 2D/15/Au003) consists of narrow (up to 10-cm wide), extensional and minor shear controlled, milky-white, quartz-pyrite veins and quartz breccia. The quartz is developed in a 12-m thick quartz-feldspar-rich greywacke of the Outflow Formation, that is weakly sericite/carbonate-altered. Two main vein orientations are noted: N to NE-striking, bedding-parallel veins and E-striking bedding-perpendicular veins. Gold mineralization is associated with dark grey to white brecciated quartz veins and Au values are directly related to pyrite concentrations. A southeast plunging, open F2 fold is thought to have played a role in localizing Au. Graphitic shale forms the footwall to the greywacke and contains up to 20% non-auriferous pyrite.
Bullet Prospect
The Bullet prospect (DME File No. 2D/15/Au002) is hosted by weakly graphitic, greyish-green shales and siltstone of the Hunts Cove Formation. Gold mineralization comprises a narrow set of quartz-carbonate veins developed in a NE-striking, steeply S-dipping, dextral shear zone. The shear zone has a maximum width of 50 cm and an exposed strike length of 24 m. To the southwest, the quartz veins are offset ~1 m by and folded into a sinistral shear zone, suggesting synkinetic vein formation. Quartz veins are typically over 15-cm wide, with milky-white quartz, disseminated pyrite, arsenopyrite and boulangerite. The Au occurs as specks and clusters of free Au.
Cokes Prospect
The Cokes prospect is an 8–10-m wide iron carbonate altered zone of quartz veining located near the contact between a thin (3–4 m) sheared greywacke bed and grey shales. The prospect contains boudinaged, narrow, quartz veins with pyrite, arsenopyrite and minor bladed stibnite(?) identified in one vein. Trenching has exposed iron carbonate altered greywacke (to the west), in contact with unaltered, contorted, grey shales. 2021 exploration drilling (Holes NFGC-21-146, NFGC-21-166, NFGC-21-162, NFGC-21-157, NFGC-21-154) revealed the presence of both disseminated sulfide minerals and vein-hosted style of mineralization. Optical televiewer and acoustic televiewer data indicates a consistent SE-dipping bedding. Drill hole NFGC-21-157 revealed a pervasive >10 m-wide, near-surface fault zone hosting quartz veins as well as an extensive >40 m-wide shear zone domain hosting two white-mica altered quartz vein zones adjacent to coarse-grained intervals.
Dome Prospect
The Dome prospect is located just to the northeast of North Herman’s Pond. It is a sigmoidal shaped, quartz “blowout” with associated narrow (<1 m wide), brecciated quartz veins and iron carbonate carrying abundant visible Au. Mineralization appears to be controlled by a dilational structure caused by shearing oblique to the AFZ trend, or possibly a crosscutting kink or fold. Host units are dark grey to black mudstones to graphitic shales. Pyrite and arsenopyrite are present but are not always associated with higher Au values. Trenching located additional sub-parallel veins with visible Au in fractures and healed vein margins, in association with green to brown sericite. 2019—2021 drilling (12 drill holes) indicates a NNE mineralization trend controlled by an >3 m-wide massive quartz vein showing fine-grained gold particles and minor sulfide content. The mineralization trend is bounded to the NW by a continuous coarse-grained unit which, in turn, occurs in close proximity to a major deformation corridor interpreted as the Appleton Fault Zone.
Grouse Prospect
The Grouse prospect (DME File No. 2D/15/Au017) is a zone of quartz veins with anomalous Au values that reaches almost 30 m true thickness and contains individual veins that are up to 6 m wide. The mineralized quartz veins are hosted by a massive greywacke unit with ~25-m-wide alteration zones. The most prominent quartz vein is E-striking and dips to the north by 50–60°. Pyrite and arsenopyrite are mostly confined to the margins of the veins, while sphalerite, chalcopyrite, galena, and boulangerite are present within the veins. Historical drilling tested the mineralized zone over 25 m strike length and to 70 m down dip, but the true width of mineralization remains undetermined.
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Keats Prospect
The Keats prospect is located ~1 km to the south of the Dome prospect, east of South Herman’s Pond. It consists of a complex, multi-generation quartz vein system associated with variable iron carbonate and sericite alteration. The Keats prospect is hosted in steeply west-dipping, mudstones and greywackes and is affected by numerous brittle faults and high-strain domains. Results from 2019–2021 drilling indicate that high-grade Au mineralization is primarily associated with bedding-discordant brittle veins within the NNE-striking Keats Baseline Fault, with lesser high-grade intercepts occurring in the footwall. The Keats Baseline Fault is interpreted to be a secondary fault to the AFZ. Gold occurs as free coarse Au in brecciated, massive, vuggy, and laminated quartz-carbonate veins. Arsenopyrite is typically observed with Au, whereas fibrous boulangerite is less abundant and is associated with very high-grade Au mineralization. Fine- to coarse-grained disseminated pyrite occurs throughout the host rock sequence. High-grade mineralization typically occurs in deformation zones with dense quartz veining. Structural data from downhole televiewer logging records a steep, bedding parallel vein set, a sub-horizontal, weakly E-dipping vein set, and a possible set of veins dipping ~45° to the south. The structural, textural, and mineralogical characteristics of the different sets will be targeted for investigation in 2021. Drilling in 2020–2021 has confirmed the presence of near-surface Au mineralization, continuous for 250 m along strike (055) and ~350 m down plunge. The mineralized zone dips ~65° to the southeast with an estimated true width of mineralization of 85–95% of encountered intercepts and remains open along strike and at depth.
Knob Prospect
The Knob prospect (DME File No. 2D/15/Au004) consists of mesothermal, auriferous quartz veins hosted in a variably deformed, NE-striking shale and greywacke unit of the Outflow Formation. The host units have a northeast strike, dip steeply to the northwest and are overturned, forming the structural footwall to the mineralized package. Faulting appears to have offset the mineralized veins. Two types of quartz veins are noted: 1) pyrite-arsenopyrite-rich veins with low Au values; and 2) milky-white massive and smaller, sheeted quartz veins, that contain coarse free Au and minor pyrite, chalcopyrite and boulangerite. Both vein types are shear-controlled and are hosted by structures that crosscut the host rock at high angles. The veins are typically <50 cm wide and exhibit pinch and swell textures. Extensional veins (tension-gash) are developed in the greywacke and are adjacent to the main shear zones. Wall rock alteration around the milky-white veins consists of silicification, disseminated pyrite and arsenopyrite, rusty weathering, and intensely deformed zones. Free Au occurs in the quartz veins and is associated with adjacent, carbonate-altered and arsenopyrite-bearing, sedimentary units. Veins occur in all host rock units but are best developed in the greywackes, possibly due to their higher competency. The 2021 drilling at the Knob prospect identified a series of distinct conglomeratic intervals interbedded with greywackes, shales and siltstones often in close proximity to irregular and massive quartz veins.
Letha Prospect
The Letha prospect, (DME File No. 2D/15/Au016) centers on a WNW-striking, narrow quartz vein system. The vein system is dominantly hosted by greywacke but there is extensive thickening (a blow-out) where the vein passes from shale into massive greywacke. The plunge of the quartz ‘blowout’ (340°/-70°) is defined by the intersection of the N-dipping vein and NW-dipping greywacke-shale contact. Coarse visible Au is noted in the ‘blowout’ and shale-hosted veins.
Little Prospect
The Little prospect consists of a strongly deformed/foliated black shale unit cut by occasionally brecciated quartz veins. An alteration zone in grey-green shales (≤5 m) with boudinaged quartz veins carrying pyrite, arsenopyrite, and possible stibnite and cinnabar, is associated with cross-cutting shears. Black shales, west of the shear zone are offset by the shear and contain mineralized and Fe carbonate altered quartz veins. Non-mineralized black shales lie to the west of the trench. A total of six drill holes (NFGC-20-11, NFGC-20-12, NFGC-20-13, NFGC-20-14, NFGC-20-15, NFGC-20-16) were drilled at this prospect to date and these holes revealed the presence of a distinct graphitic unit bounded by brittle faults hosting discrete stockwork style of quartz veins.
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Lotto Prospect
The Lotto prospect is located ~150–200 m along strike to the north from the Dome prospect. Three trenches have exposed strong iron carbonate alteration associated with quartz veins and visible Au, hosted by dark-grey to black mudstones and graphitic shales. Quartz veins are steep and strike north, crosscutting the steeply W-dipping stratigraphy at low angles. Gold occurs as free coarse Au in brecciated, massive, vuggy and laminated quartz-carbonate veins. Arsenopyrite is commonly observed with Au, whereas fibrous boulangerite is less commonly observed. The latter is associated with very high-grade mineralization. Fine- to coarse-grained disseminated pyrite occurs throughout the host rock sequence. Highgrade mineralization typically occurs in deformation zones with dense quartz veining and has not been observed outside of the main vein arrays. Visible Au has been observed in two trenches, in association with strong iron carbonate alteration and brecciated quartz veins. 2020-2021 drilling demonstrates that high-grade mineralization extends to 130 m below surface and remains open at depth. Mineralization is interpreted to occur along a N-striking, steeply (75°) E-dipping structure. This structure is interpreted as part of a network of N-striking vein sets that is interpreted to be secondary to the Lotto Baseline Fault.
Figure 9: Plan view of the Lotto Zone with assays >0.1 g/t Au projected to surface. Source: New Found (2021)
Powerline Prospect
The powerline prospect consists of iron carbonate alteration zones up to 5 m wide, with narrow quartz veins. Quartz veins are in shales and conglomeratic greywacke with acicular arsenopyrite observed in the iron carbonate altered conglomeratic greywacke. To the north, the zone appears to be offset to the east along the crosscutting Herman’s Pond fault structure.
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Road Prospect
The Road prospect is located ~200–300 m east of the AFZ structure and southeast of the Dome showing. The prospect is oriented at a 30° angle to the AFZ, striking ~165°. Mineralization consists of a sheared and folded zone of iron carbonate alteration (up to 3 m wide) and boudinaged quartz veins that trend north along the shear. The main, shallow dipping (40°) quartz vein is up to 0.7 m wide, with an average width of ~0.3 m, and contains visible Au. Gold mineralization is associated with arsenopyrite, minor pyrite and green and brown sericite, similar to the Dome prospect. Two holes were drilled in 2020 (NFGC-20-71 and NFGC-20-76) and these holes revealed two near-surface (~25 m and ~50 m deep) highgrade ore zones defined by massive and brecciated quartz veins hosting visible gold. The gold-bearing quartz veins predominantly occur orthogonally to the bedding planes indicating a dip towards the southwest. OTV data indicates a similar vein orientation.
Trench 26 Prospect
Candente Resources’ Trench #26 identified a strong Au and As soil anomaly~250 m to the west of the AFZ, immediately to the west of the access road and ~200 m along strike of the Powerline showing. The mineralization is hosted in black to graphitic shales with green shales and greywackes and is the northernmost mineralization identified on the west side of the AFZ.
TCH
The TCH prospect is located ~700 m south of the Keats prospect adjacent to the Trans-Canada Highway. 2021 drilling (NFGC-21-138 and NFGC-21-144) indicates characteristics similar to the Keats prospect where NFGC-21-144 intercepted gold-bearing massive vuggy quartz veins and NFGC-21-138 revealed extensive (>10 m wide) gouge-rich fault zones.
Golden Joint
The Golden Joint prospect is located approximately 1 km north of the Keats zone and approximately 850 m south of the Lotto zone. Massive vuggy quartz veins host numerous gold grains which resemble the quartz vein system at the Lotto prospect. At the Golden Joint, the AFZ is remarkably wide (>50 m), hosting extensive intermediate dikes as part of an extensive deformation corridor which also contains gold-bearing veins.
Joe Batts Pond Deformation Zone
The JBPDZ is a 500–1,000-m-wide linear belt of high strain ductile- to brittle-deformed mudstone, containing numerous quartz and iron carbonate veins, some of which can be traced for hundreds of meters. Gold mineralization has been identified along seven kilometers of this corridor to date. Exploration along the JBPDZ has primarily focused on surface trenching and diamond drilling to define the mineralized zones. Key prospects along this trend are H-Pond (including the Pocket Pond, 1744 and 798 zones), Pocket Pond, Glass, Logan and Lachlan.
H-Pond, Pocket Pond and 798 Prospects
The H-Pond Prospect is located along the trace of the H-Pond brook, directly underlying the H-Pond brook quartz boulder train, and comprises three subzones: H-Pond, Glass and 1744. The H-Pond mineralized quartz veins strike is implied over a length of 800 m and to a depth of 250 m. The mineralization generally occurs in zones of steep (~70°), northwestdipping and northeast–striking quartz veins. The Pocket Pond and 798 are prospects situated along the JBPFZ, approximately 3 km south and 2 km north of the H-Pond prospect respectively. Given the general similarities between the three H-Pond subzones and the Pocket Pond and 798 prospects, a general description is provided below. The quartz veins are hosted by folded and variably altered, fine to very fine-grained mudstone/shale, with slightly grittier siltstone sections. Light-green-colored siltstone horizons represent a unique lithology in the area not observed in any of the prospects along the AFZ. The quartz-veined zones contain ~25% quartz vein material and are on average ~5 m wide, but range from 1–24 m in width. The veins consist of partly vuggy quartz-iron carbonate and contain visible Au. Approximately 50% of the vein zones contain individual veins >20 cm thick, while 7% of the zones have veins >1 m thick. Zones containing thicker veins typically host higher Au grades, especially when proximal to the contact between light green and dark colored siltstones. The veins and host-rock in the area are intensely folded, adding complexity to the overall vein orientation. Accompanying the veins are finely disseminated pyrite, coarse granular pyrite and arsenopyrite (up to 3 cm), which often propagate along bedding planes. The sulfides are locally zoned, showing pyrite overgrowths around the cores of arsenopyrite. In many places, the porphyroblasts have quartz-filled pressure fringes. Some of the finer pyrite appears to replace the iron carbonate granules. Sulfide contents reach a maximum of 15–20% proximal to the veins, though the sulfide content is rarely >1–2%, including the veins themselves. Accessory minerals in the veins include iron carbonate, chlorite, sericite, dickite, talc, gypsum, yellow to purple-grey sphalerite, chalcopyrite, galena, boulangerite, and locally, visible Au. Visible Au was mainly observed near vein margins or in the immediately adjacent wall rock. The iron carbonate usually occurs along the vein margins as lathy crystals up to 2 cm in length. Most of the quartz veins are enveloped in a 50–75 m-wide, steeply northwest-dipping zone of strong sericite–iron carbonate alteration, often expressed as pervasive mm-sized spot texture. On the western (hanging wall) side, sericite alteration is more intense, and the rock has been bleached to a creamy yellow color. Some of the iron carbonate granules are locally rimmed or completely replaced by chlorite. Alteration patterns at the Glass showing are of cryptic alteration haloes with iron carbonate extending for tens of centimeters and lesser amounts of sericite along the vein margins.
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Lachlan / Logan Prospect
The Lachlan and Logan prospects were initially discovered in 2000 and 2017, respectively, and likely represent the same mineralized zone as they are separated by tens of meters. The Lachlan/Logan prospects represent the southernmost Au showing along the JBPDZ, occurring south of the Trans-Canada Highway. Mineralization extends over ~175 m along strike. The bedrock comprises variably iron carbonate altered siltstones and shales that are cut by a number of north striking and steeply dipping quartz veins (1–20 cm). Locally, visible Au has been noted along with significant concentrations of near massive arsenopyrite (clots to 15 cm).
Queensway South
The Queensway South claims are less explored than the northern portion of the Queensway Project, owing partly to greater glacial cover and distance from major population centres. However, a number of Au discoveries have been made through prospecting, soil and till sampling and surface trenching. Notable Au prospects in this area include the Greenwood Pond, Hornet, North Paul’s Pond, Aztec, Goose, Road Gabbro and LBNL showings.
Greenwood Pond Prospect and Hornet Showing
The seven Greenwood Pond showings (DME File No. 2D/11/Au012 to Au018) and the Hornet showing (DME File No. 2D/11/Au008) consist of altered gabbro with disseminated pyrite and typically <5% arsenopyrite. The Hornet showing consists of small, 1–2 cm, quartz-pyrite stringers with vuggy quartz veins in a silicified, fractured and brecciated felsic unit. No drilling results are reported for either the Greenwood Pond or Hornet showings.
North Paul’s Pond Prospect
The North Paul’s Pond prospect (DME File No. 2D/11/Au020) consists of quartz veins up to 1 m wide exposed in trenches. Quartz veins contain 10–20% patchy to semi-massive arsenopyrite and are hosted by strongly foliated, and tightly folded, fine-grained Davidsville Group siltstones. The highest-grade mineralization is associated with a combined IP/chargeability anomaly and a cluster of angular, Au-bearing quartz vein floats.
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Aztec Prospect
The Aztec prospect (DME File No. 2D/11/Au006) and A-Zone Extension prospects (DME File No. 2D/11/Au007) contain epithermal-style quartz veins and alteration associated with the fault contact between the Davidsville Group and Indian Islands Group. Mineralization consists of low-grade Au values which have been trenched and tested with six diamond-drill holes and have been traced along strike for ~330 m. The Aztec prospect alteration is believed to have developed in the structural footwall of a fault zone and is comprised of silicified, pyritic conglomerate or breccia. Tallman (1989) suggests these features could have developed adjacent to an epithermal style silica sinter. Gold mineralization typically carries <1 ppm Au and is associated with the conglomerate. The “hydrothermal breccias” exposed on the surface exhibit multiple phases of brecciation and pervasive silicification, with concentric chalcedony rinds, over a thickness of ~10 m. Below the hydrothermal breccia, and structurally beneath the possible sinter is an ~70 m thick zone of variably developed argillic alteration in fine-grained siltstone/sandstone. The alteration intensity appears to decrease away from the structural contact. The alteration zone has a strike length of 330 m, and a width of 100 m with a shallow dip to the northwest. Historical drilling tested the mineralized zone but further drilling would be required to determine the true width of mineralization. The A-Zone Extension runs parallel to the Aztec prospect (500 m to the east). The prospect comprises a ~30-m-thick, pervasively chloritized and locally potassic-altered, greywacke unit in siltstone that is cut by extensional quartz-carbonate veins carrying arsenopyrite/pyrite. The mineralized zone has a strike length of ~250 m. No drilling is reported to have tested this zone.
Goose Prospect
The Goose Prospect (DME File No. 2D/11/Au011) was discovered by Noranda during follow-up of grab sample values of up to 42.1 ppm Au. It is hosted by weakly deformed massive sandstone, limonitic sandstone and chloritic siltstone of the Davidsville Group. Patchy silicification of the host rock is associated with 1–2 cm milky white quartz veins and veinlets. The mineralization consists of fine to coarse patches of arsenopyrite, pyrite and pyrrhotite in quartz veins and as disseminations (up to 10%) in the wall rock. Mineralization is regular along strike (055) and dips moderately to the northwest, varying from 2–10 m thick (average 3 m) over a strike length of 180 m, and remains open along strike and at depth. It was tested over a 100 m strike length by seven trenches, four diamond drill holes (291.1 m) in 1988, and four diamond drill holes (572 m) in 2004, locating narrow high-grade intervals (including 15.68 g/t Au over 0.8 m (PP-04- 01)). Further drilling would be required to determine the true width of mineralization.
Road Gabbro Showing
The Road Gabbro Showing (DME File No. 2D/11/Au009) is hosted by the Botwood Group, close to the Davidsville Group contact. The outcrop consists of gabbro crosscut by quartz veins that carry pyrite and minor visible Au that intrude siltstones and shales of the Botwood Group. The region has undergone chloritization and silicification. There has been no reported drilling at this showing to date and it remains largely untested.
LBNL Showing
The LBNL Showing (DME File No. 2D/11/Au010) consists of narrow quartz-arsenopyrite veins in a silicified granitic intrusive and was initially detected by an anomalous soil sample. Arsenopyrite forms coarse patches in the veins and sometimes mantles the vein margins. Trenches reveal part of the LBNL Showing has undergone chloritization and sericitization. Float near the showing consists of angular, sericite-altered greywacke that is pyrite and arsenopyrite bearing. No drilling is reported for this showing.
5.5 Deposit Type
Orogenic Gold Deposits
Orogenic Au deposits form in metamorphic rocks of the mid-to-shallow crust of compressional settings, where Au-bearing fluids (derived from dehydrated metamorphosed rocks) migrate upwards from depth via structural conduits and precipitate Au (often within quartz veins) following cooling and decompression. The crustal continuum model argues that orogenic Au mineralization occurs at pressures and temperatures covering a wide range of depths, from the subgreenschist to granulite facies. More recent literature has suggested that orogenic Au deposits have a more restricted range of depth and temperature — mostly greenschist facies conditions. Notwithstanding the controversy of their formation, a large number of Au deposits that range in nature from replacement-style, quartz-vein hosted and those demonstrably associated with intrusions, are classed as orogenic Au deposits. This results in a plethora of different characteristics associated with orogenic Au deposits.
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Geological and Genetic Model
Gold mineralization in central Newfoundland is thought to be associated with the ~408 Ma regional D2 deformation event of the Acadian Orogeny (450–400 Ma). This event overprints an initial regional D1 event that is associated with a pervasive NE-striking fabric and doubly plunging folds (northeast and southwest). At the Queensway Project, D1 deformation resulted in tight-to-isoclinal folds with NNE-striking S0 and S1 fabrics. This event was followed by the development of NW and SE-dipping splay faults along the main NE-striking regional structures (D2). Crosscutting relationships of auriferous veins and D1 folds suggests Au mineralization postdates the D1 regional event and likely pertains to a D2 regional deformation event. New Found interprets the geological model for mineralization in Northwest Newfoundland to be analogous to the Victorian Goldfields with striking similarities between the drill core from the Queensway Project and Fosterville Mine, Australia.
The strong Au-Sb metal association and the brittle nature of the Au-bearing quartz veins at the Queensway Project relates to an cpizonal, sedimentary-hosted orogenic Au system. The geological setting and style of Au mineralization are like other Au occurrences such as the Meguma Supergroup, in Nova Scotia, Canada and the Castlemaine-Bendigo region, in Victoria, Australia. The metamorphic breakdown of pyrite, releasing sulfur and trace metals (including Au) is a possible mechanism for generating fluid-mobile Au and sulfur, like is observed in the Otago Schist, New Zealand. Mudstone horizons with disseminated pyrite in the Hunt’s Cove and Outflow formations, containing pyrite nodules up to 10 cm in size, offer a potential sulfur and Au source for mineralization of the Queensway Project.
Application of Exploration Concepts
New Found has tailored its exploration approach to orogenic-style quartz-vein-hosted Au mineralization. This includes geochemical and heavy mineral analysis of till samples, grab sampling, trenching and drill testing. Regional exploration is driven by locations of regional-scale and secondary fault-structures, as defined by geophysical interpretation. Drill orientations are designed to suit the geometry of mineralization based on surface and drilling data. The QP (Mr. Sterk) considers this approach to be appropriate for deposits of this style.
5.6 Exploration
Summary
In 2016, New Found exploration for Au mineralization on the Queensway Project was limited to a till sampling programme.
In 2017, New Found exploration for Au mineralization on the Queensway Project included regional and detailed prospecting, geological mapping, trenching, a structural study of the trenched areas, a drone survey and an airborne geophysical survey, and drilling. In 2018, exploration included additional interpretation of geophysical data, a detailed structural geological survey, a significant regional till sampling program, soil surveys, regional prospecting and surface trenching. In late 2018 and early 2019, a culvert was replaced, and roads were upgraded between North and South Herman’s Pond to allow access for diamond drilling program. In 2020 New Found started a till sampling program, a prospecting programme and a trenching programme. These programmes remain ongoing at the time of writing this report. Up to 27 May, 986 till samples and 1,456 prospecting/grab samples (outcrop and float) were collected over the project area and a total of 16 trenches were completed. A HeliFALCON survey was conducted in March 2020 and 3-D inversion of the survey data was completed in February 2021.
2016 Till Survey - JBPFZ
From November 3–8 2016 New Found contracted Overburden Drilling Management Limited (ODM) to undertake sampling of glacial till deposited by northward flowing ice. A total of 59 samples of oxidized, C-horizon till were collected from hand-dug shovel pits on a portion of the property that overlies the auriferous JBPFZ Trend. The objective of the program was to detect and delineate Au-grain dispersal trains emanating from undiscovered quartz veins of potential significance.
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The following excerpt is from the report published by Holmes and Michaud (2017) of ODM:
The Au grain content of the till is effectively anomalous over the entire 1.5 km x 5 km survey area (Figure 16) and the Au background could not be established. The counts ranged from 19–1,744 grains and averaged 127 grains per sample. Forty-nine samples (83%) yielded Au counts >40 grains including 24 samples (41%) with >100 grains and three samples with >300 grains. Approximately 70% of all Au grains are pristine to partly modified indicating that most of the Au has been transported <1 km; thus, is derived from multiple sources. A larger number of pristine and modified grains were recovered from the up-ice end [northeast] of the sampling area. The increase in reshaped morphologies down-ice indicates that the Au sources are concentrated toward the up-ice end of the survey area.
The overall anomaly was evidently produced by: (1) a plethora of small, auriferous quartz veins (i.e. Bendigo-type veins) that were sufficiently exposed during glaciation to contribute a significant amount of Au to the till; and (2) the mineralized trend being parallel to the N020° ice-flow direction.
2017 Prospecting
Regional prospecting consisted of outcrop/float sampling throughout the Queensway South and Twin Ponds portions of the property following existing forest access roads and foot traverses, in August–November 2017. A total of 193 rock samples were collected, including 158 from the Queensway South area (93 outcrop, 65 float), and 35 from the Twin Ponds property (30 outcrop, five float). The results, locations, and descriptions of selected rock samples are presented in the Technical Report. Geological evaluations of the Queensway North and Queensway South areas were also carried out including assessment the JBPFZ and AFZ trends and a helicopter tour of prospecting showings discovered during the regional prospecting. A four-day structural and trenching study was carried out in November 2017 over the AFZ and JBPFZ trends.
2017 Trenching: Joe Batts Pond Fault Zone (JBPFZ)
Trenching carried out in November–December 2017 focused on Au targets generated by the 2016 prospecting and till sampling surveys along the JBPFZ. The initial permitted program proposed ninety-four trenches of ~25 m length crossing the northeast-southwest regional trend. Ultimately, 24 trenches were dug including 14 sites that encountered bedrock. Many of the proposed sites encountered overburden deeper than the excavator arm could reach (~6 m) and were reclaimed and abandoned. All except six trenches were reclaimed after examination and sampling; four with shallow overburden were contoured and left open for future review and two others were left open, fenced, with warning signs erected, and permission from the DNR to allow for further mapping and sampling in the spring. A total of 122 channel samples and 40 grab samples were taken from the five trenched areas — QP trench (19 samples), 798 trench (29 samples), Glass trench (23 samples), JBT trench (two samples), and Logan trench (89 samples). The location and assay results of selected samples are presented in the Technical Report.
2017 Structural Geology Assessment
The structural geology of the Queensway Project was evaluated by William Oswald of GoldSpot Discoveries, a PhD student from Institut National de la Recherche Scientifique in Quebec City, in November 2017. He spent four days working on the Queensway Project, visiting the 798, Glass and Logan trenches along with a New Found prospector. This work was hindered by water filling the trenches and cold weather and although the trenches were pumped out, some water/ice remained in the 798 and Glass trenches when the structural geological review was carried out.
Lithological and structural data were collected from outcrops and trenches (dug and backfilled). Most outcrops are grey, bedded to laminated siltstone to mudstone with local gabbroic sills present in the stratigraphy. The main fabric (Sn+1) measured over the Queensway Project is oriented NE-SW and steeply dipping, which is consistent with the regional context. This fabric is likely associated with tight folds; however, no fold hinge zones were clearly identified. Scattered outcrops in the vicinity of Gander suggest such folds are open near Gander and become tighter toward the property area, where major fault zones are suspected.
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Gold mineralization is documented in association with quartz veins. The veins are present as a set of fault-fill veins subparallel to the main fabric and a second set of extension veins at a high angle. All veins are affected by folds and boudinaged, suggesting emplacement during the main deformation event. Fault-fill veins are oriented northeast and dip 60–80° to the northwest or southeast. Folds of these veins tend to plunge shallowly to the southwest (25°). Measured extension veins are striking south–southeast, dipping 50° to the northeast.
2017 Airborne Survey – CGG Canada Services Ltd.
In May–June 2017, an airborne geophysical survey (HELITEM35c, magnetics and digital terrain model) was carried out by CGG Airborne over the Queensway Project for Palisade Resources Inc. (now New Found). Line spacing was 200 m in an Data were acquired using a HELITEM35c electromagnetic system, supplemented by a high-sensitivity cesium magnetometer. The data were processed to produce images that display the magnetic and conductive properties of the survey area. A GPS electronic navigation system was used for positioning of the geophysical data. The HELITEM35c comprises a MULTIPULSE system configuration transmitting in two pulses – the half sine pulse and the square pulse with the square pulse gates providing information from the near surface and the half sine providing information at depth. The report by CGG Canada (CGG Canada Services, 2017) describes the logistics, data acquisition, processing, and presentation of results of the survey.
2018 Interpretation of Airborne Geophysical Data
A preliminary interpretation of the 2017 HELITEM35c geophysical survey and historical geophysical data for the Queensway Project area was completed by consulting geophysicist Brenda Sharp (GoldSpot) and a more detailed interpretation was carried out in 2018. Geophysical interpretations of the Queensway North, Queensway South and Twin Ponds areas are summarized below.
Queensway North
Most of these magnetic survey data, especially in the northern regions, show a quiet magnetic background consistent with the mapped siliciclastic marine sediments of the Davidsville Group, and NNE to SSE-striking narrow magnetic features attributed to low-angle mafic dykes intruding the Davidsville Group. The GRUC is obvious along the northeastern edge of the geophysical survey as a strong magnetic signature with associated EM zones/lineaments. Later, SE-striking dykes occur in the Davidsville Group close to the GRUC. The magnetic data were upward continued to identify areas of low magnetic intensity, possibly associated with Au mineralization, which is not easily identified in a magnetically quiet environment. Figure 16 presents the vertical derivative of the 150 m upward continued Residual Magnetic Intensity (RMI). It identifies several NNE-striking areas of slightly lower magnetic intensity, including the Lotto, Letha, Grouse, H-Pond and Pocket Pond showings, and other areas between the AFZ and JPBDZ not yet explored. Given the mostly low amplitude response of the magnetic data, structural features have been defined using upward continued magnetic grids, offsets and truncations in dykes and the EM data. The major structural directions determined from the geophysical data are south–southeast, northeast (dextral), southeast and north. The magnetic response from culture (a powerline) along the Trans-Canada Highway is clearly identified crosscutting the survey. Like the magnetic data, the EM response is relatively weak, with a fabric striking 030. The weakly-elevated background EM response is attributed to slightly more conductive material in low-lying areas. In a west–east direction, the units are more resistive closer to the AFZ and with an “abrupt” change in elevation (from 100–70 m) closer to the JBPFZ, where the EM data are slightly more conductive. Variations in the EM data may also indicate changes in lithology. Stronger conductive responses are noted immediately to the west of the AFZ and associated with the GRUC. The EM data also identified numerous lineaments, with several associated with mineralized areas. The lineaments have an unusual signature, possibly an IP response, which may be due to clays, graphitic argillite or alteration. In the interpretation of the EM data, no differentiation has been made between conductive anomalies and potential airborne IP effect zones since along their length, these features can change geometry, appearing as either a conductive or airborne IP anomaly. Where strong and/or isolated IP effects exist, they have been labelled separately in the interpretation layers.
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Queensway South
The magnetic fabric is more pronounced in the Gander South area and increases to the south. On the western geophysical survey boundary (southern part of licenses 24560M, 24562M, 24559M), a mafic unit is attributed to the MPIS, and on the eastern survey boundary (eastern edge of licenses 24566M, 24567M), the increased magnetic response may be part of the GRUC. An extensive gabbroic unit, striking northeast located in the south-central part of the survey and hosts the Greenwood Pond showings. The gabbro may be folded and sheared along the fold axis with a northeast strike. This unit is extremely disrupted and crosscut by multiple (proposed) structures. Most of the showings occur in areas of reduced magnetic intensity, likely reflecting structures or alteration zones.
Extensive weak-to-moderate magnetic zones striking 034 in the south and 024 in the north occur in the south-central area of the survey and near the eastern survey boundary. The eastern magnetic zone, which approximately correlates with the mapped contact between the Outflow Formation and Hunts Cove Formation of the Davidsville Group, comprises several narrow, close-spaced magnetic lineaments coincident with formational EM conductors. The central zone is weaker than the eastern zone and is adjacent to a formational conductive zone. Along the western survey boundary, between the MPIS mafic units and the gabbroic unit, is a non-magnetic unit that corresponds to a weak–moderate conductive zone, which may be part of the Indian Islands Group or Ordovician black shale. The previously mapped Bear Pond Gabbro lies in a magnetically quiet area, with the response more consistent with that of a sedimentary unit.
The Queensway South area is structurally complex with major structures following the geologic fabric, striking 025–040, and other structures striking subparallel to the Gander River at 060 showing dextral offset, and 095–125, also with dextral offsets, occurring throughout the area. Less commonly, structures striking ~170–180 are identified. Figure 17 and Figure 18 show the magnetic and EM interpretations respectively, along with the major structures (regional and more local scale) defined from a combination of both the magnetic and EM parameters. The combination of the magnetic and EM data produces a slightly different geologic scenario, especially in the southern Queensway South area. The (proposed) gabbroic unit lies along the mapped contact between Indian Islands Group and Davidsville Group, and the contact seems to lie closer to the western survey boundary than previously mapped. Likewise, if the extensive eastern magnetic/conductive zone marks the transition between the Outflow Formation and the Hunts Cove Formation, then the contact is ~2 km further to the west in the northern part of the Queensway South area than what was previously mapped.
Twin Ponds
Unlike the Queensway North area, the magnetic data over the Twin Ponds properties show an elevated magnetic background. The mapped geology suggests that the major lithologies are the Ten Mile Lake Formation (TMLF), the Duder Group mélange/Badger Group and MPIS mafic intrusives. These contacts are clearly identifiable in the magnetic data. In addition, a strongly magnetic unit striking northeast/north–northeast, adjacent to the Reach Fault may be an extension of a mapped mafic unit located to the northeast along the boundary of the claims.
The EM data over most of the area is quite resistive, showing little response in the TMLF, except for a strong airborne IP response in Twin Pond itself, which is likely due to a buildup of clay/lake bottom sediments. A weak conductive zone is noted at the contact between the Duder Group and TMLF. To the north of a proposed southeast structure, which extends through Twin Pond, the zone is more conductive. Several major structural directions are defined, north–northeast (Reach Fault direction), northeast and southeast. However, there is no obvious correlation between the magnetic signatures and the locations of Au showings in the area.
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Figure 10: Queensway North, JBPFZ, 2016 till sample locations and Au grain count values. Source: ODM (2017).
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Figure 11: Queensway Project residual magnetic intensity (RMI). Source: MacInnis & Azad (2018).
Figure 12: Queensway Project dB/dt Z component half-sine channel 9. Source: MacInnis & Azad (2018).
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Figure 13: Queensway South, 2017 select grab sample locations and highlighted areas
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Figure 14: Ponds Area, select grab sample locations
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Figure 15: JBPFZ/AFZ Area, 2017 grab sample locations
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Figure 16: Queensway North Area, first vertical derivative of the upward continued RMI. Source: MacInnis & Azad (2018)
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Figure 17: Queensway South, magnetic interpretation of local and regional scale structures. Source: MacInnis & Azad (2018)
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Figure 18: Queensway South Area, EM interpretation. Source: MacInnis & Azad (2018)
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2018 Structural Geology Survey
A structural geology study of the Queensway Project area was conducted by GoldSpot in September 2018, following the initial structural geology survey of 2017. The intention of the survey was to understand the regional structure of the Davidsville Group and nearby units, and to evaluate the structural setting of Au mineralization in the Queensway Project. The results of this survey are summarized below.
Most units in the Queensway Project area display a penetrative, sub-vertical, axial planar structural fabric (S1) striking north–northeast (~215°). Local decimeter-scale, open to isoclinal folds (F1) have been observed, plunging shallowly to the northwest. Occasional SW-plunging folds are interpreted to be caused by D2 interference, consistent with other studies. Variations in the attitude of S1 are documented and are interpreted as resulting from the development of crosscutting NE-striking dextral fault/shear zones, consistent with late-stage dextral transpression during the main deformation event. Drag folds affecting the main fabric are present. Such fault zones are present at outcrop-scale, typically with half a meter to a few meters offset determined in the presence of quartz veins. The widest example occurs on the north shore of Gander Lake, to the west of the Gander River. It consists of a 10–20-m wide, sub-vertical zone of intense S1 disruption striking 075°. The S1 fabric is frequently affected by crosscutting D2 structures. Such structures consist of early to well-developed kink banding, fault planes and locally open folds. They strike 125°–130° and dip ~60/220. A conjugate, secondary set of faults/kink banding is locally present at approximately 30°. Relative kinematic indicators indicate southeast extension and northeast compression.
Most structures observed are of meter to decameter-scale. The lithological homogeneity of rocks in the Queensway Project hinders the identification and delineation of major structures at a property scale. Consequently, geophysical data has been used to identify probable structures.
2018 Till Geochemistry
New Found collected till samples from February through to July 2018. The till sample locations were based on GPS grids designed around property boundaries, lakes, rivers, and boggy areas. Grid 1 is the regional survey over Queensway South using 2 km spacing and a 1 km offset on every second line. Grid 2 is a detailed grid over the Queensway South southwest magnetic anomaly, with spacing at 500 m with a 250 m offset. The regional till survey produced 339 samples and the detailed grid produced 276 samples. Some planned samples were not collected due to excessive organic material, sandy, non-till material, or rocky ground with little till. Efforts were made to sample all sites; however, some areas along the Northwest Gander River were not sampled as they consisted of reworked fluvial material and are not true tills. Of the 615 till samples (356 regional, 276 detailed), 83 samples (64 regional and 19 detailed) returned analysis values >0.008 ppm Au (14%) with 0.008 ppm Au considered a background level for the area. Four hundred and thirteen samples returned values the below detection of <0.002 ppm Au. Of the Au anomalous samples, 28 (25 regional and 3 detailed) returned values of >0.02 ppb Au, with the highest values of 0.133 ppb Au (regional-33980), 0.065 ppm Au (detailed-37338) and 0.045 ppm Au (regional-33075). The till results suggest at least six target areas for follow-up prospecting.
2018 Satellite Imagery
New Found contracted Pacific Geomatics Ltd. (PACGEO) of Cowichan Bay, British Columbia, to task satellite images for the Queensway Project. For the Queensway North area, covering 240 km2, satellite images were sourced from DigitalGlobe’s WorldView-3/4 with 4-band select tasking and <15% cloud cover at a pixel resolution of 30 cm. Satellite images of the Queensway South and Twin Ponds areas, 938 km2 and 100 km2, respectively, were sourced from DigitalGlobe’s WorldView-1 and GeoEye-1 with 4-band select tasking and <15% cloud cover at a pixel resolution of 50 cm. PACGEO provided bundled processing which included scaling, orthorectification, enhancement, mosaic and cloud patch as required. The bundle had both natural and false color infrared products. Combined, the satellite images cover the Queensway Project in its entirety.
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2018 Soil Surveys
Anomalous Au and As values in float rock samples from 2016–2017 prospecting in the Queensway South area were followed up with two gridded soil surveys in 2018. Samples were acquired from the B horizon, where possible, using “Dutch” augers through the ice/snow. While not an ideal time for soil geochemistry, sample acquisition was good, and most samples were reasonable B horizon soils. Samples were analyzed at Eastern Analytical in Springdale, NL, for Au by fire assay with AAS finish and for trace elements by four-acid digest with an ICP-OES finish.
Jumbo Brook Soil Survey
The Jumbo Brook soil survey grid consisted of eleven 1-km long, 100-m spaced lines, from a 1 km baseline at 040 and was completed in early February 2018, with a total of 373 samples analyzed. Twenty-one of 373 samples returned >0.01 ppm Au with a maximum value of 0.09 ppm Au and 6 values >0.02 ppm Au. The grid lies over the contact between the Davidsville Group to the east and the Indian Islands Group to the west. Elevated Au results for soil and float samples appear to be clustered near the forest access road and suggest a possible source to the south-southwest towards “Thumb- Up Pond” or the boggy area just to the west of it. Results for As were atypically low with a maximum value of 463 ppm As, Sb was <6 ppm, Ag at the lower detection limit of 0.2 ppm and base metal values were weakly anomalous.
Yellow Fox Brook Soil Survey
The Yellow Fox Brook soil survey grid consisted of 11, 100-m-spaced, NW-striking lines, each 1 km long, from a 1 km baseline at 050. Sampling was completed in early May 2018 with a total of 380 samples analyzed. Twelve of 380 samples returned values >0.01 ppm Au with a maximum of 0.047 ppm Au, the only value above 0.02 ppm Au. The grid covers the contact between the Davidsville Group to the east and the Ten Mile Lake Formation to the west. Samples 33843 and 33844 occur along Yellow Fox Brook and represent a possible target to the north of the grid and the three float samples (33839–33841) appear to line up with the elevated soil samples in a northeast trend; however, the suggested ice flow direction from the south–southeast indicates a south-lying source for the float and soil. Base metal, As, Sb and Ag results give values lower than at Jumbo Brook except for two values for Ag >1 ppm for samples 2280 (1.7 ppm) and 2316 (1 ppm). The Ag and Au results may indicate a possible east-northeast trend that reflects a source to the west-southwest resulting from a more localized ice flow direction along Yellow Fox Brook Valley.
2018 Prospecting
A total of 528 prospecting rock samples were taken on the Queensway Project in 2018, including 104 samples from Queensway North, 382 samples from Queensway South and 42 samples from TP. Samples consisted of outcrop (309), chips from outcrop (5), sub-crop (8) or float samples (206), taken mainly as ‘grab’ samples or ‘selected’ grabs with mineralization, especially visible Au, included in the sample. Forty-one control samples, 24 blanks and 17 standards, were also included for quality control.
Historical values and till results were used to select targets in the Queensway South and include: Joe’s Feeder; the Narrows at Steel Bridge; Winter Brook; Hussey Pond; SE Paul’s Pond; Greenwood Pond; Jumbo Brook; Eastern Pond and Larson’s Falls. Associated with a structural study by GoldSpot, abnormally low water levels in the late summer allowed for prospecting to be done along the shore of Gander Lake and the Gander River systems and around historical showings, including the southern AFZ trend in the outflow area. In the northwestern part of the JBPFZ trend, prospecting evaluated historical results which suggested a continuation or parallel trends. In the Twin Ponds area, limited systematic prospecting across the structural trend was carried out looking for on strike extensions to historical Au showings such as the T-Rex, Blue Peter and Clydesdale which are adjacent, to the north of the New Found licenses, as well as evaluating the potential of magnetic/electromagnetic targets located in the 2017 airborne survey.
Of the 528 samples analyzed, 36 samples returned analyses >0.50 ppm Au, 24 samples >1.0 ppm Au, 11 samples >3.0 ppm Au, and four samples >10 ppm Au. The highest Au value was reported in sample X942013 (44.7 ppm Au), a grab sample from the Glass T2 trench, in a sulfide-enriched portion of a quartz vein. In general, an increase in Au values is associated with an increase in As values, although overall, As values are usually <500 ppm. A correlation of Au with base metals and Ag was not found except for some mineralization along the eastern trend on the JBPFZ where Pb values are elevated and a dark grey sulfide, thought to be boulangerite is noted. The location and assay results of the 2018 rock samples are presented in the Technical Report.
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2018 Trenching
Trenching has been a successful follow-up method at the Queensway Project, with many of the Au zones located and/or better defined and traced through trenching. Examples include Dome, Road, Lotto, Little Cokes, Knob, Bullet, Glass, Greenwood Pond showings, Aztec, A-Zone, LBNL. Trenching is a good early-stage follow-up technique although overburden depths can exceed 6 m. All trenches are required to be reclaimed.
New Found submitted an exploration plan for 133 possible trenches in the JBPFZ area in 2018. An Exploration Approval (#E180252) was given by the DNR on August 27, 2018, with a year to complete the work. Twelve trenches were attempted, with the majority of trenches at the Glass T2, where the 2017 trench was extended to ~150 m in length and up to 25 m in width. Most other trenches either failed to reach bedrock or were so deep that they were sampled by breaking rock off with the excavator bucket. The coordinates for the trenches are listed and their location is shown in the Technical Report. Channel samples were cut with a gas-powered diamond blade saw with sample cuts ~2–3 cm wide, 5–10 cm deep and usually 1 m long. Samples were bagged at collection. In some cases, additional grab samples were taken to investigate vein differences.
Most trenching in 2018 was carried out at the Glass showing (GS TR 2) where the 2017 trench was extended and widened. Multiple quartz veins were mapped by drone, and channel sampled. Structural mapping was also carried out by GoldSpot as part of their regional scale property review. The highest assay value is 44.7 ppm Au (X942013) from a 10–12 cm quartz vein with semi-massive stringers of dark grey to black, pyrite and arsenopyrite, sampled at the northern end of the trench. Base metal values are low to insignificant; however, Ag, and Sb are anomalous. The channel sampling tested only a portion of the main vein and associated veins to the east and west due to water and winter conditions. In the southern portion, additional sampling validated results from 2017 with values >5 ppm Au along the central “Main” vein system. In this area, the right side “Starboard” vein returned values <0.10 ppm Au; however, further to the north, values >0.50 ppm Au with one >10 ppm Au are noted.
2020-2021 Till Geochemistry
The 2020–2021 Queensway till sampling program is ongoing at the time of writing this report. As of the 27th of May, a total of 955 till samples were collected using hand digging methods. The till sampling was conducted over eight grids. Following the till sampling at Eastern Pond, two follow-up sampling grids, Larsen’s Falls and Pine Tree, were completed to further evaluate the area. The till samples were collected from weakly to non-oxidized C-horizon, with areas covered by glacial fluvial sediments excluded. The samples were shipped to Overburden Drilling Management (ODM), where a representative split was taken and sent to Actlabs for Au and INAA analysis. The remainder of the sample was then processed to extract the visible Au grains. The results of the 2020-2021 till survey are summarized below.
Joe Batts Pond Deformation Zone — Till sampling continues as of the date of this report. One hundred and fifty-seven samples have been acquired to date, with eighty-eight with >10 grains Au and only six with no Au grains. The highest grain counts include samples #43429 with 167 grains (35 pristine, 21%), #43433 with 75 grains (10 pristine, 13%) and #41494 with 72 grains (4 pristine, 6%). In total there are 42 samples with more than 30 grains Au. Two samples, #41483 and #41470 have 100% pristine gold grains with twenty samples with >40% pristine Au grains.
Hunt’s Brook — Only one sample, #41080, had more than 20 grains at 26 grains with 3 pristine (12%), with seven samples with >10 grains. Sixteen samples had no Au grains. Eight had 100% and five had >50% pristine grains. Despite the low number of Au grains, samples gave high Au analytical values of up to 30 ppm. Twenty-one samples gave Au values >1 ppm including two >10 ppm Au (#14073, 30 ppm; #41071, 16.5 ppm). It appears that in general Au grains were larger on this grid compared to other areas on the Queensway South.
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The Narrows — All of the samples had <8 Au grains with 38 samples containing zero grains. Sample #42082 had 7 grains with 5 pristine (71%). It is thought that the proximity to the Northwest Gander River may have resulted in more dispersion in this area.
Larsen’s Falls — One hundred and three samples were taken with 45 samples containing >10 grains Au, seven with 0 grains and one missing sample. Sample # 42035 contained 73 grains (4 pristine, 5%), #43402 and #41240 had 43 (16% pristine). Two samples had >40% pristine grains.
Pine Tree – Eighty-four samples with 27 samples containing >10 grains Au, two with 0 grains and one missing sample. The highest values were # 41992 — 43 grains, 6 pristine (14%); # 42004 and # 41215 with 39 grains (51% and 5% pristine respectively). Two samples had 100% pristine Au grains and eight had >40%.
Eastern Pond — Two samples returned an Au value of >10.0 ppm, with sample #41601 returning 23.7 ppm Au and sample #41849 returning 21.4 ppm. A total of 40 samples returned an Au value > 1.0 ppm. The initial till grid collected two anomalous samples containing a high number of pristine Au grains. Sample #41674 contained a total of 216 Au grains including 163 pristine grains (75%), and sample #41656 contained a total of 155 Au grains including 127 pristine grains (82%). The Eastern Pond Detailed Till Grid also contains a high number of pristine Au grains, including sample 41802 with 177 pristine grains out of a total of 183 grains (97%). The Expanded Till Grid contained three samples with >20 Au grains including sample #41516, with a total of 94 pristine grains (out of 137 grains; 69% pristine Au grains).
Great Gull — Eighty-five samples were taken with ten samples containing >10 grains Au and 7 with zero grains. Four samples had 100% pristine Au grains with another 13 samples containing >40%. Two samples, #41733, #41734 (duplicates) had significant Au grains — 124, 95 pristine (77%), 107, 83 pristine (78%), respectively and #41735 had 27 grains, 17 (63%) pristine.
Twin Pond — Five samples contained more than ten Au grains. The highest grain count came from samples #41895 and #41860, both with 13 Au grains. Sample #41895 had no pristine grains while sample #41860 had three pristine grains (23%). Oddly, the duplicate of sample #41930 (which had 17 Au grains, 15 pristine), sample #41931, had two grains with one pristine. Forty-five samples contained no Au grains. The samples with >10 grains appear to lie along a NNE-trending line through the property and may represent an underlying gold mineralized shear or fault although the lack of pristine grains indicating closeness to source downgrades this theory.
Twin Pond — The highest count of Au grains came from sample #41895 and #41860, which both contain 13 Au grains. Sample #41895 did not contain any pristine grains and sample #41860 contains three pristine grains (23%).
2020-2021 Prospecting
A total of 1,456 prospecting/grab samples (outcrop and float) were collected over the Queensway Project between 15 June 2020 and 27 May 2021. The sampling was subdivided into five areas, including:
· | Joe’s Feeder and the Narrows; |
· | Hunt’s Brook; |
· | Pine Tree Hill/Larsen’s Fall; |
· | Eastern Pond; and |
· | Great Gull. |
As of the 27th of May 2021, 1,236 samples were analyzed. Of these, 87 samples returned an Au value >0.10 ppm including 44 samples >0.50 ppm, 30 samples >1.0 ppm, ten samples returned assays >3.0 ppm and four samples returned assays >10 ppm Au. The highest Au value was reported in sample X942038 (47 ppm Au), a grab sample collected from trench TR-20-08. Table 2 reports the significant grab samples and Figure 19 shows the location of the grab samples.
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Sample | UTM NAD 83 z21 | VG Grains | % | Calculated ppb Au in HMC | % | |||||||||||||||||||||||||||||||||||
# | Area | Easting | Northing | Total | Reshaped | Modified | Pristine | Prist. | Total | Reshaped | Modified | Pristine | Prist. | |||||||||||||||||||||||||||
41516 | Eastern Pond | 631833 | 5384124 | 137 | 19 | 24 | 94 | 69 | 1055 | 67 | 167 | 821 | 78 | |||||||||||||||||||||||||||
41517 | Eastern Pond | 631117 | 5383450 | 49 | 19 | 5 | 25 | 51 | 252 | 120 | 11 | 121 | 48 | |||||||||||||||||||||||||||
41566 | Eastern Pond | 629982 | 5378547 | 30 | 14 | 1 | 15 | 50 | 169 | 137 | 1 | 30 | 18 | |||||||||||||||||||||||||||
41656 | Eastern Pond | 630332 | 5381176 | 155 | 23 | 5 | 127 | 82 | 1398 | 571 | 13 | 813 | 58 | |||||||||||||||||||||||||||
41674 | Eastern Pond | 629784 | 5382499 | 216 | 28 | 25 | 163 | 75 | 8398 | 606 | 252 | 7540 | 90 | |||||||||||||||||||||||||||
41679 | Eastern Pond | 627397 | 5378657 | 58 | 26 | 0 | 32 | 55 | 1746 | 1674 | 0 | 72 | 4 | |||||||||||||||||||||||||||
41774 | Eastern Pond | 630859 | 5381195 | 36 | 25 | 5 | 6 | 17 | 300 | 244 | 26 | 30 | 10 | |||||||||||||||||||||||||||
41776 | Eastern Pond | 630720 | 5381259 | 44 | 29 | 9 | 6 | 14 | 323 | 192 | 85 | 46 | 14 | |||||||||||||||||||||||||||
41778 | Eastern Pond | 630561 | 5381483 | 52 | 31 | 10 | 11 | 21 | 495 | 229 | 223 | 43 | 9 | |||||||||||||||||||||||||||
41783 | Eastern Pond | 630249 | 5381319 | 40 | 22 | 9 | 9 | 23 | 361 | 267 | 45 | 49 | 14 | |||||||||||||||||||||||||||
41787 | Eastern Pond | 630340 | 5381189 | 45 | 33 | 2 | 10 | 22 | 146 | 126 | 5 | 14 | 10 | |||||||||||||||||||||||||||
41788 | Eastern Pond | 630366 | 5381167 | 37 | 25 | 3 | 9 | 24 | 253 | 223 | 13 | 17 | 7 | |||||||||||||||||||||||||||
41789 | Eastern Pond | 630492 | 5381003 | 34 | 26 | 5 | 3 | 9 | 234 | 204 | 27 | 2 | 1 | |||||||||||||||||||||||||||
41796 | Eastern Pond | 629841 | 5382917 | 35 | 25 | 3 | 7 | 20 | 262 | 94 | 165 | 3 | 1 | |||||||||||||||||||||||||||
41802 | Eastern Pond | 629784 | 5382498 | 183 | 5 | 1 | 177 | 97 | 1027 | 716 | 14 | 296 | 29 | |||||||||||||||||||||||||||
41824 | Eastern Pond | 631853 | 5381780 | 46 | 33 | 9 | 4 | 9 | 1026 | 1005 | 14 | 7 | 1 | |||||||||||||||||||||||||||
41844 | Eastern Pond | 632104 | 5382309 | 45 | 14 | 8 | 23 | 51 | 280 | 112 | 18 | 150 | 54 | |||||||||||||||||||||||||||
41733 | Great Gull | 621140 | 5377468 | 124 | 13 | 16 | 95 | 77 | 1516 | 216 | 215 | 1085 | 72 | |||||||||||||||||||||||||||
41227 | Larsen’s Falls | 640178 | 5389100 | 33 | 25 | 4 | 4 | 12 | 53 | 44 | 4 | 5 | 9 | |||||||||||||||||||||||||||
41240 | Larsen’s Falls | 638079 | 5389910 | 43 | 29 | 7 | 7 | 16 | 279 | 186 | 82 | 11 | 4 | |||||||||||||||||||||||||||
41549 | Larsen’s Falls | 639507 | 5391340 | 42 | 34 | 7 | 1 | 2 | 182 | 155 | 24 | 3 | 2 | |||||||||||||||||||||||||||
41550 | Larsen’s Falls | 641117 | 5390879 | 42 | 34 | 2 | 6 | 14 | 271 | 204 | 5 | 61 | 23 | |||||||||||||||||||||||||||
42008 | Larsen’s Falls | 640799 | 5391445 | 37 | 24 | 2 | 11 | 30 | 1089 | 946 | 131 | 13 | 1 | |||||||||||||||||||||||||||
42012 | Larsen’s Falls | 641172 | 5390075 | 30 | 23 | 3 | 4 | 13 | 61 | 53 | 6 | 3 | 4 | |||||||||||||||||||||||||||
42035 | Larsen’s Falls | 641465 | 5392019 | 73 | 62 | 7 | 4 | 5 | 228 | 172 | 48 | 9 | 4 | |||||||||||||||||||||||||||
42062 | Larsen’s Falls | 638792 | 5390033 | 33 | 27 | 5 | 1 | 3 | 223 | 200 | 18 | 5 | 2 | |||||||||||||||||||||||||||
43402 | Larsen’s Falls | 641709 | 5392508 | 43 | 29 | 7 | 7 | 16 | 437 | 335 | 96 | 5 | 1 | |||||||||||||||||||||||||||
41212 | Pine Tree Hill | 633503 | 5384967 | 30 | 15 | 4 | 11 | 37 | 830 | 639 | 34 | 157 | 19 | |||||||||||||||||||||||||||
41215 | Pine Tree Hill | 636831 | 5384976 | 39 | 31 | 6 | 2 | 5 | 585 | 448 | 137 | 1 | 0 | |||||||||||||||||||||||||||
41546 | Pine Tree Hill | 634059 | 5385033 | 31 | 16 | 8 | 7 | 23 | 333 | 80 | 74 | 179 | 54 | |||||||||||||||||||||||||||
41992 | Pine Tree Hill | 635682 | 5386615 | 43 | 23 | 14 | 6 | 14 | 1473 | 1219 | 217 | 37 | 2 | |||||||||||||||||||||||||||
42002 | Pine Tree Hill | 635295 | 5387408 | 33 | 14 | 6 | 13 | 39 | 587 | 555 | 13 | 19 | 3 | |||||||||||||||||||||||||||
42003 | Pine Tree Hill | 635041 | 5387650 | 33 | 7 | 8 | 18 | 55 | 209 | 20 | 130 | 60 | 29 | |||||||||||||||||||||||||||
42006 | Pine Tree Hill | 634796 | 5386473 | 31 | 7 | 14 | 10 | 32 | 1242 | 24 | 49 | 1169 | 94 |
Table 2: Significant till samples collected during 2020. Source: New Found 2020
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2020-2021 Trenching
In 2020, sixteen trenches were dug, mainly on the west side of the AFZ, near the town of Appleton, from the Hornet zone in the south to the Trench 36 area in the north. Additional trenching is planned for 2021, but at the time of writing this report the 2021 trench program had not yet commenced. Trenches 5–7, 11, 13–16 evaluated areas not previously trenched while trenches 1–4, 8–10 and 12 were dug either to re-expose or extend previously discovered showings. Trenches 12 to 16 inclusive were located on the east side of the AFZ with the rest on the west side. Trenches 5, 6 and 11 didn’t reach bedrock and were reclaimed immediately. Only trench 8, in the Trench 36 area, immediately to the west of the AFZ to the north of Herman’s Pond, has not been reclaimed as of the writing of this report, remaining open to allow geological and structural mapping. A total of 38 channel samples (42123–42160) and three grab samples (X942822–X942824) were collected. The channel samples returned a value of 0.62 ppm Au and 2672 ppm As over 9 m (42123–421131) with the highest Au value 1.15 ppm (42131). Three other channel samples returned >100 ppb Au. Anomalous gold values of the channel samples are associated with the arsenopyrite. Grab samples X942822, X942823 and X942824 returned 10.00, 0.39 and 1.89 ppm Au respectively.
2020 HeliFALCON Airborne Gravity and Aeromagnetic Survey
In March 2020, New Found commissioned CGG Services Canada to conduct a HeliFALCON Airborne Gravity Gradiometer and Aeromagnetic Survey over the Queensway North area. The survey had a total of 1,705 line-km with a nominal terrain clearance of 35 meters. Typical traverse lines trended 90° and were spaced 100 meters apart with tie lines spaced at 500 meters and striking north.
Products delivered by CGG included:
· | a digital terrain model (DTM); |
· | a terrain clearance map; |
· | a turbulence map; |
· | two system noise maps as (NE) and (UV) to assist with cleaning up the survey data; |
· | the residual magnetic intensity (RMI) and its first vertical derivative; |
· | the total magnetic intensity (TMI) and its first vertical derivative; and |
· | the equivalent source calculated gravity (gD) and the vertical gravity gradient. |
New Found contracted Fathom Geophysics and Techno Imaging for interpretation of the data and the inversion of the data to 2D and 3D voxel models to assist in future exploration activities and to generate new drill targets. The inversion results were received and interpretation of these results is ongoing as of 27 May 2021.
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Figure 19: Queensway 2020-2021 till-sample locations and Au (ppm) results
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5.7 | Drilling |
2019 Drilling
In October–December 2019, New Found carried out a ten-hole diamond drill program at Queensway North. The program totalled 1,985 m of HQ core and targeted the Keats, Dome, H-Pond, Glass and 1744 Prospects. An overview of collar locations is provided in Figure 20. A full list of collar details is provided in the Technical Report.
Drilling was carried out by New Valley Drilling of Springdale, NL using an EF-50 skid rig equipped to drill HQ size core. A dozer was used to clear drill sites and move the rig. All core was placed in labelled wooden boxes, which were collected daily by New Found personnel. All collars were marked with pickets and foresighted by New Found personnel using RTK GPS receivers. All completed holes were plugged and cemented and finally marked with a metal post to identify the hole and act as a hazard warning. Downhole dip data were collected using the Reflex EZ Shot by the drill crews near the beginning and end of each hole, with a 50 m spacing between tests where possible. Core was also oriented using the Reflex HQ ACT-III system.
All core was logged by Ken Rattee and Michael Regular of New Found in a core logging facility at Gander, NL. Samples were cut and half-core samples were sent for preparation to ALS Minerals in Timmins, Ontario and Moncton, New Brunswick. From there, pulps were shipped to ALS Vancouver, British Columbia, for analysis. Details of sample preparation, analytical methods and drilling data quality management systems are provided below. Detail on results for individual prospects is shown below.
The QP is not aware of any drilling, sampling or recovery factors that could materially impact the accuracy and reliability of the results.
Keats
Significant Au mineralization was intercepted in hole NFGC-19-01. The best result was 18.16 m @ 86.12 g/t Au from 95 m in NFGC-19-01, including 4.43 m @ 340.35 g/t Au from 105 m (true width). The intercept contained considerable visible Au and wall rock sulfidation consisting of pyrite and lesser arsenopyrite. Traces of arsenopyrite, chalcopyrite and boulangerite were found within the quartz vein material. The quartz vein was notably vuggy and exhibited textures (Figure 21). A second mineralized zone (2.23 m @ 3.54 g/t Au, true width) was intersected at 177.5 m with associated Au mineralization in lesser quartz stockwork form. Both fault zones intersected in the hole are believed to be secondary to the regional Appleton fault zone.
Hole NFGC-19-02 drilled 160 m south of NFGC-19-01 also intersected the second order fault structure found in NFGC- 19-01 with associated narrower quartz veinlets and wall rock sulfidation (pyrite and arsenopyrite) and visible Au in quartz. The best intercept was 3.61 m @ 2.55 g/t Au from 147 m (true width) and containing visible Au. Exhibiting a similar width and structural control to NFGC-19-01, the results of hole NFGC-19-02 suggest a strike length up to 300 m. The true width is estimated to be 90% of the down-hole interval based on an interpreted orientation of mineralization of 146/63.
Dome
Holes NFGC-19-03 and 04 both intersected mineralization at Dome, with a best intercept of 0.53 m @ 162.5 g/t Au from 20.9 m (true width) in NFGC-19-03. NFGC-19-03 intersected the main vein at a depth of 20.9 to 22.0 m with a second vein from 24.9 to 25.5 m. Visible Au appears to be primarily confined to the vein margins. The vuggy nature of the quartz and similarity in texture to the veining intersected at the Keats Zone suggests similar emplacement mechanisms. True width of mineralization in NFGC-19-03 is estimated to be 85% of the down-hole interval based on an interpreted orientation of mineralization of 167/70.
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H-Pond
The Glass vein system was discovered in 2017 and excavated by New Found in 2017 and 2018. The Glass vein system is thought to be a parallel vein system to the H-Pond mineralized zone, ~100 m to the east. Mineralization was intersected in hole NFGC-19-05, which returned 3.06 m @ 2.51 g/t Au from 231 m (including 0.31 m @ 10.8 g/t Au from 231 m) in NFGC-19-05 (true width). This intercept extends the H-Pond mineralized zone by roughly 150 m along strike. The intercept was marked by significant iron-carbonate alteration zone. The Glass vein array was noted in holes NFGC-19- 06 to -08, though no significant mineralization was intercepted. The true width of mineralization in NFGC-19-05 is estimated to be 30-40% of the down-hole interval based on an interpreted orientation of mineralization of 300/65.
1744 Prospect
Holes NFGC-19-09, 10 were drilled along strike from the H-Pond and Glass vein systems in an area with very high Au-in-till results and several float samples containing visible Au. Both holes intercepted new vein systems with a best intercept of 0.92 m @ 17.55 g/t Au from 165 m in NFGC-19-09 (true width). The intercept shows alteration and sulfide mineralization that are strikingly similar to the intercept in NFGC-19-05. The intercept in NFGC-19-09 is thought to be an extension of the H-Pond mineralized zone, roughly 500 m along strike. The true width of mineralization in NFGC-19- 05, 09, 10 is estimated to be 30-40% of the down-hole interval based on an interpreted orientation of mineralization of 300/75.
2020-2021 Drilling
In August 2020, New Found commenced a 200,000-m drill program at the Queensway Project. The program is targeting a 7.8-km long corridor along the Appleton Fault and a 12.4-km corridor along the JBP fault. Up to and including 27 May 2021, New Found completed 210 diamond holes for a total of 46,451 m of HQ core. An overview of collar locations is provided in Figure 20.
Drilling contractor New Valley Drilling of Springdale, NL, drilled with four rigs using two EF-50 and one A5 skidmounted rig along with a track-mounted CS-1000, equipped to drill HQ size core. In February 2021, New Found contracted Rally Drilling (Rally) of Sussex, NB. Rally drilled with three HTM2500 skid-mounted rigs and a trackmounted CS-1000, all equipped to drill HQ size core. Excavators were used to clear drill sites and move the rigs. Collars were foresighted by New Found personnel using RTK GPS receivers and marked with pickets. Drill alignments were completed with a TN14 gyrocompass. Core was collected twice daily by New Found personnel. All completed holes were plugged and marked with a metal post to identify the hole and act as a hazard warning. Downhole dip data were collected by the drill crews, using the Reflex EZ-Trac, starting at 15 m past the casing and at 50-m intervals downhole. An exit survey was completed at 15-m intervals upon completion of the hole.
All core was logged by New Found geologists under supervision of Miguel Nassif and Greg Matheson of New Found in a core logging facility in Gander, NL. Samples were cut or split on site and half-core samples were sent for preparation to ALS Minerals in Sudbury, Ontario and Moncton, New Brunswick or to Eastern Analytical in Springdale, Newfoundland. The pulps prepared by ALS were shipped to ALS Vancouver, British Columbia, for analysis. The pulps prepared by Eastern Analytical remained in Springdale, Newfoundland, for analysis.. As of the 27th of May, complete assay results for 136 holes were received. The assay results of these holes are discussed and presented as significant intercepts in the Technical Report. For 23 holes only partial results were available. These partial results have not been included in the Report because in most instances the pending results were associated with high-grade sample intervals submitted for metallic screening.
In March 2021, New Found contracted DGI Geoscience to undertake a downhole wireline logging campaign to collect optical televiewer (“OTV”), acoustic televiewer (“ATV”), natural gamma and gamma-gamma density data. As of 27 May 2021, 106 holes were surveyed. Four holes were skipped due to hole collapse or unstable borehole wall conditions. OTV and ATV data were captured for all holes surveyed, gamma-gamma density and natural gamma data were collected for 54 holes only, as these probes were added later during the programme. The OTV and ATV data are interpreted to obtain structural data, which facilitates a better understanding of the structural controls on mineralization.
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The QP is not aware of any drilling, sampling or recovery factors that could materially affect the accuracy and reliability of the results.
Keats
The 2020–2021 drilling has intersected significant mineralized intervals at Keats and has confirmed the presence of highgrade near-surface Au mineralization as well as down-plunge continuity over ~425 m strike length. The six best intercepts are presented in Table 3, and an overview of all significant intercepts is presented in the Technical Report. The drill results suggest that the high-grade mineralization is largely constrained within the Keats Fault Zone, dipping 146/63 and plunging southwest by ~30°. Holes are drilled at an azimuth of 300 with a dip of 45°, hence, the true widths of mineralization is estimated to be 88–95% of the down-hole interval. Results from holes NFGC-21-85 (2.7 m @ 49.41 g/t Au from 108.45 m, true width) and NFGC-20-26 (5.49 m @ 2.59 g/t Au from 65.7 m, including 0.31 m @ 824 g/t Au from 73.5 m, true width) demonstrate that the high-grade zone is not closed off and highlight the potential to extend the zone in the off-plunge direction. Observations from downhole televiewer data suggest that bedding planes are steeply west-dipping, and that mineralization is associated with a zone of intense and possibly drag-related folding within the Keats Fault Zone. Structural data from downhole televiewer logging record a steep, bedding parallel vein set, a subhorizontal, shallowly east-dipping vein set, and a possible set of veins dipping ~45° to the south–southwest (Figure 7.11). Gold mineralization is primarily associated with bedding-discordant brittle veins. The structural, textural, and mineralogical characteristics of the different sets will be the target of investigation in 2021.
New Found is currently investigating the relationships of different vein sets with mineralization and aims to better characterize the veins through detailed petrography and geochemical studies.
HoleID | From | To | Au (g/t) | Length (m) | True length (m) | True length (%) | Dilution (m) | Prospect | ||||||||||||||||||||||
NFGC-20-59 | 71.75 | 89.45 | 124.51 | 17.7 | 15.91 | 90 | % | 0.54 | Keats | |||||||||||||||||||||
Including | 71.75 | 73.3 | 186.52 | 1.55 | 1.39 | 90 | % | 0 | Keats | |||||||||||||||||||||
Including | 77.25 | 78.15 | 38.6 | 0.9 | 0.81 | 90 | % | 0 | Keats | |||||||||||||||||||||
Including | 78.6 | 80.1 | 49.88 | 1.5 | 1.35 | 90 | % | 0 | Keats | |||||||||||||||||||||
Including | 81.15 | 83.15 | 557.35 | 2 | 1.8 | 90 | % | 0 | Keats | |||||||||||||||||||||
Including | 87.75 | 89.05 | 505.57 | 1.3 | 1.17 | 90 | % | 0 | Keats | |||||||||||||||||||||
NFGC-21-118 | 211.15 | 224.8 | 61.76 | 13.65 | 12.33 | 90 | % | 1.27 | Keats | |||||||||||||||||||||
Including | 211.15 | 213.05 | 292.53 | 1.9 | 1.72 | 90 | % | 0 | Keats | |||||||||||||||||||||
Including | 218.65 | 220.25 | 116.11 | 1.6 | 1.45 | 90 | % | 0 | Keats | |||||||||||||||||||||
Including | 221.45 | 222.45 | 56.93 | 1 | 0.9 | 90 | % | 0 | Keats | |||||||||||||||||||||
Including | 222.85 | 223.6 | 34.19 | 0.75 | 0.68 | 90 | % | 0 | Keats | |||||||||||||||||||||
NFGC-21-122 | 33.65 | 43.85 | 95.77 | 10.2 | 8.97 | 88 | % | 1.62 | Keats | |||||||||||||||||||||
Including | 34.7 | 36 | 30.77 | 1.3 | 1.14 | 88 | % | 0 | Keats | |||||||||||||||||||||
Including | 37.45 | 39 | 454.67 | 1.55 | 1.36 | 88 | % | 0 | Keats | |||||||||||||||||||||
Including | 39.45 | 40 | 20.16 | 0.55 | 0.48 | 88 | % | 0 | Keats | |||||||||||||||||||||
Including | 42.85 | 43.85 | 202.87 | 1 | 0.88 | 88 | % | 0 | Keats | |||||||||||||||||||||
NFGC-21-137 | 68.8 | 74 | 321.14 | 5.2 | 4.68 | 90 | % | 1.71 | Keats | |||||||||||||||||||||
Including | 71.5 | 74 | 667.17 | 2.5 | 2.25 | 90 | % | 0 | Keats | |||||||||||||||||||||
NFGC-21-182 | 289.4 | 298.45 | 167.4 | 9.05 | 8.08 | 89 | % | 1.79 | Keats | |||||||||||||||||||||
Including | 291 | 292 | 10.18 | 1 | 0.89 | 89 | % | 0 | Keats | |||||||||||||||||||||
Including | 296.45 | 298.45 | 747.89 | 2 | 1.79 | 89 | % | 0 | Keats | |||||||||||||||||||||
NFGC-21-182 | 300 | 319.4 | 115.12 | 19.4 | 17.37 | 90 | % | 1.61 | Keats | |||||||||||||||||||||
Including | 302 | 312 | 219.43 | 10 | 8.95 | 89 | % | 0 | Keats | |||||||||||||||||||||
Including | 315 | 316 | 15.87 | 1 | 0.9 | 90 | % | 0 | Keats |
Table 3: Best intercepts of the 2020–2021 program for Keats. Significant intercepts are reported at a cut-off grade of 1 g/t Au, a minimum length of 2 m and maximum internal dilution of 2 m. Included high-grade intercepts are reported at a cut-off grade of 10 g/t Au, a minimum length of 0.2 m and no internal dilution. Expected true widths were determined based on an interpreted orientation of mineralization of 146/63
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Lotto
The 2020–2021 drilling has intersected significant mineralization at Lotto and has demonstrated good continuity of highgrade Au mineralization to a vertical depth of 130 m below the surface, where it remains open. The best results include (true widths):
· | 4.38 m @ 105.53 g/t Au from 115.2 m (including 1.38 m @ 332.97 g/t Au from 118.8) in NFGC-21-100; |
· | 4.15 m @ 38.79 g/t Au from 34.95 m (including 1.36 m @ 108.58 g/t Au from 35.25) in NFGC-20-17; |
· | 3.99 m @ 35.18 g/t Au from 152.7 m (including 0.68 m @ 193.31 g/t Au from 156.6 m) in NFGC-21-109; and |
· | 2.59 m @ 53.3 g/t Au from 186 m (including 1.42 m @ 95.57 g/t Au from 187.4 m) in NFGC-21-115. |
These intervals are interpreted to be part of the same, steeply east-dipping structure (097/73). Holes were drilled mostly at an azimuth of ~300° with a dip of 45° and the true width of mineralization is estimated to be 80–90% of the down hole interval. The steep structure is interpreted to be part of a network of north-striking vein sets occurring over an area of 300 m x 200 m which is in turn interpreted to be a set of secondary structures associated with the Lotto Baseline Fault (Figure 9). High-grade mineralization is interpreted to be associated with fault splays and structural intersections. Optical televiewer data suggest that bedding orientations are steeply east-dipping. An association between mineralization and intense (drag-related) folding as at Keats is not established at Lotto.
Drilling is ongoing at the Lotto target and aims to better constrain the geometry and extent of the mineralized system. Areas along strike to the south and north from NFGC-21-115 and NFGC-21-109 have been identified as priority drill targets.
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Figure 20: Collar locations of the 2019 and 2020-2021 Diamond Drill Programs
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Figure 21: Visible Au in core from hole NFGC-19-01. A, C, D) visible Au in NFGC-19-01; B) vuggy quartz texture in hole NFGC-19-01. Source: New Found (2020)
Little Powerline Zone
In August 2020, New Found drilled six holes at the Little Zone target, west of the AFZ, ~1 km northwest of Keats. Significant intercepts are presented in the Technical Report and include (apparent widths):
• | 2.5 m @ 1.78 g/t Au from 31.8 m in NFGC-20-11; and | |
• | 5.5 m @ 4.04 g/t Au from 21 in NFGC-20-12. |
These results demonstrate significant near-surface mineralization. In addition, hole NFGC-20-14 returned two intercepts of high-grade silver mineralization (apparent widths):
• | 2.0 m @ 253.8 g/t Ag from 11 m in NFGC-20-14; and | |
• | 1.0 m @ 94.9 g/t Ag from 57 m in NFGC-20-14. |
This is the first instance of high-grade silver being identified on the Queensway property. Silver mineralization is located proximal to the Little-Powerline Au-bearing structures. Further geological investigation is ongoing to determine the significance of these intervals and to develop a follow-up plan for additional drilling.
Gold mineralization at the Little-Powerline Zone appears to be associated with a north-striking fault but the exact relationship remains poorly constrained at this stage and true widths could not be determined.
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Knob
In February–April 2021, New Found drilled 16 holes at the Knob target, along the AFZ. As per 27 May, results for nine holes were received. Significant intercepts are presented in the Technical Report and include (apparent widths):
• | 2.45 m @ 2.91 g/t Au from 42.85 m in NFGC-21-159; |
• | 3.35 m @ 1.43 g/t Au from 39.3 m in NFGC-21-124; |
• | 4.4 m @ 1.06 g/t Au from 24 m in NFGC-21-107; and |
• | 2.75 m @ 1.51 g/t Au from 30.9 m in NFGC-21-117. |
The orientation of mineralization at Knob is poorly constrained at this stage and true widths could not be determined. Depending on the outcome of the pending assay results, further geological investigation will be conducted to identify priority follow-up targets.
Dome
Between November 2020 and May 2021, New Found drilled six holes at the Dome target, along the AFZ. As per 27 May, results for five holes were received. Significant intercepts are presented in the Technical Report and include (true widths):
• | 2.61 m @ 1.96 g/t Au from 84 m in NFGC-20-55; and |
• | 6.22 m @ 1.76 g/t Au from 113.6 m in NFGC-20-66. |
The drill results suggest that the mineralization is dipping ~170/69. Holes are drilled at various angles and the true width of mineralization is estimated to be 70–90% of the downhole interval.
Cokes
In March–April 2021, New Found drilled six holes at the Cokes target, along the AFZ. As per 27 May, results for two holes were received. Significant intercepts are presented in the Technical Report and include (apparent widths):
• | 14.85 m @ 3.61 g/t Au from 18.85 m in NFGC-21-157; |
• | 3.85 m @ 2.23 g/t Au from 55.2 m in NFGC-21-157; |
• | 6.0 m @ 1.84 g/t Au from 61 m in NFGC-21-157; and |
• | 4.5 m @ 2.04 g/t Au from 105 m in NFGC-21-157. |
The orientation of the mineralization at Cokes is poorly constrained at this stage and true widths could not be determined.
Road
In December 2020, New Found drilled two holes at the Road target, along the AFZ. As per 27 May, results for both holes were received and these include (true widths):
• | 2.58 m @ 35.36 g/t Au from 23.5 m (including 0.57 m @ 104.5 g/t Au from 23.5 m) in NFGC-20-71; and |
• | 2.82 m @ 9.06 g/t Au from 48.8 m (including 0.48 m @ 30.7 g/t Au from 49.7 m) in NFGC-21-71. |
The drill results suggest that the mineralization is dipping ~255/40. Holes are drilled at an azimuth of 050° with a dip of 45°, hence, the true width of mineralization is estimated to be ~95% of the downhole interval.
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5.8 | Sample Preparation, Analyses and Security |
Sample Preparation
Till Samples 2016-2018
All samples collected in 2016 and 21 samples collected in 2018 were processed by Overburden Drilling Management (ODM) for Au grain analysis without heavy mineral concentrate preparation.
Twenty-one (21) samples were chosen from the 2018 till program for tabling following geochemical analysis. Following excavation, the till samples were hand screened into a pail on site to -8 mm to remove most of the large clasts. Approximately 13 kg of the sieved -8 mm fraction, along with ~1 kg of the +8 mm pebbles, was packed in a heavy-duty plastic bag and sealed with a cable tie. The -8 mm fraction was used for analysis and the pebbles were reserved for lithological logging.
Overburden Drilling Management processed the samples using procedures designed specifically for extracting Au grains. Sample weights of all fractions were recorded along with observations of the physical characteristics of both the samples and any recovered Au grains. A 500-g split (~400 g dry weight) was set aside for geochemical analysis. The remaining bulk sample material was wet-screened at 2 mm and a primary -2 mm table concentrate was prepared.
The concentrates obtained by tabling were typically 300–400 g at ~10–25% heavy minerals to yield a high (~80–90%) recovery rate for all useful indicator minerals with specific gravity (SG) of >3.2 g/cm3, irrespective of grain size The Au grains, which are mostly (>95%) silt-sized, were separated from the table concentrates by micro-panning and were counted, measured and classified by degree of wear (i.e. distance of glacial transport). The relative abundances of sulfides or other indicator minerals or metallic contaminants were also estimated, and the expected Au assay value of the contained Au grains was calculated. A ~250–300 g subsample of the reserved 500-g geochemistry split was dry-sieved to produce a 30-g -63-µm fraction for geochemical analysis. The samples typically yielded 15–30% fines. The remainder of the 500- g split and the +63-µm fraction of the sieved portion were archived.
Till Sampling 2020-Present
Till samples collected in 2020 and beyond were processed using ODM’s Heavy Mineral Concentrate (HMC) preparation method. This method is designed to concentrate the heavy minerals, expose the Au grains, and prepare a heavy mineral concentrate suitable for geochemical analysis. Field preparation of the till samples was the same as for 2016–2018.
At ODM, the sample was wet screened at 2 mm and a preliminary concentrate was extracted from the 2-mm fraction by tabling. Geological characterization of the sample was done during the screening and tabling operations. The concentrates obtained by tabling were typically 300–400 g at ~10–25% heavy minerals to yield a high (~80–90%) recovery rate for all useful indicator minerals with specific gravity of >3.2 g/cm3, irrespective of grain size. The Au grains were separated by micro-panning and were counted, measured and classified by degree of wear (i.e. distance of glacial transport); then grains were returned to the table concentrate. The overall pyrite content of the pan concentrate was estimated and the number of grains of heavier, visually distinctive indicator minerals such as arsenopyrite, galena and scheelite was recorded.
To obtain a consistent heavy mineral product suitable for geochemical analysis, the 2.0-mm table concentrate was separated in methylene iodide (SG = 3.3 g/cm3). Magnetite was removed from the heavy liquid concentrate using a ferromagnetic separator, leaving a pure, nonferromagnetic HMC that contains the previously observed Au grains and any sulfide minerals (most sulfides are expected to have been removed by weathering). The approximate Au contribution of the observed Au grains to the non-ferromagnetic HMC was calculated from the number of grains found, their measured dimensions, their approximate specific gravity, and the weight of the HMC.
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Grab and Trench Samples
Rock grab samples were collected from outcrop, sub-crop or boulders (float), as well as trenches; primarily where mineralization was observed. For each rock grab sample, the pertinent information including the UTM location was recorded as well as the unique sample ID number. The rock samples were placed in a plastic bag along with the sample tag, and the sample tag number was written in duplicate using a permanent marker on the outside of the bag. The bag was then sealed, transported back to the field office, and safely stored before shipping. Prior to the 2020 field season, all sample data recorded in the field were entered into a master rock sample spreadsheet and subsequently imported into the MX Deposit database management software using drop-down validation to prevent errors. Since the 2020 field season, data were entered directly into the MX in the field using hand-held tablet computers.
Diamond Drill Core Samples
Diamond drill core was sampled as HQ half-core. Samples were selected and marked after logging by New Found geologists before being split at New Found’s dedicated core processing facility in Gander, NL. Samples were split and placed in clean plastic sample bags with the sample ID written on the outside of the bag and a sample ID tag inserted into the bag. The sample bags were sealed and combined into rice sacks of five samples, which were sealed with zip ties and placed into collapsible totes for dispatch. Sample tags are stapled into the core boxes at the end of each sample interval.
Eastern Analytical
The Technical Report presents a flow chart of the sample preparation procedure used at EA. For standard samples (expected <1.0 ppm Au), assay preparation procedures at EA involved crushing of the entire sample in a jaw crusher to 80% passing 10 mesh (2 mm). A 250-g aliquot was collected using a Humboldt open pan riffle splitter and the remainder was bagged and stored as a coarse reject. To achieve the target split weight, the half-lots from one side were passed through the Humboldt riffle splitter several times, creating progressively smaller splits, until a split weight as close to, but not less than, 250 g was achieved. Next, a measured scoop was used to collect a 250-g aliquot from the split and the remainer was returned to the coarse reject bag. The 250-g aliquot was pulverized to 95% passing -150 mesh (106 µm) using a TM Engineering ring-mill pulverizer and collected in the master pulp bag. From this bag, 30-g pulp aliquot was collected using a scoop and analyzed by fire assay.
Since 2019, samples with 30-g fire assay results >1 ppm Au and samples with expected high Au grade were analyzed by screen fire assay (EA method Au Met.). For the metallic screen assay, the entire sample was crushed in a jaw crusher to 80% passing 10 mesh (2 mm). Hereafter, the entire sample was pulverized to 95% passing -150 mesh (106 µm) in a TM Engineering four-head ring-mill pulverizer, using 1,000-cc bowls. The pulverized material was passed through a -150- mesh screen. Depending on the sample size, multiple screens could be used. The total coarse fraction (+106 µm) was weighed and analyzed by fire assay.
ALS Minerals
The Technical Report presents a flowchart of the sample preparation procedure used at ALS Moncton and Timmins. For standard samples (expected <1 ppm Au), assay preparation procedures at ALS involved crushing of the entire sample in a Boyd Mk 4 crusher to 85% passing -10 mesh (2 mm; CRU-36). A 1,000-g aliquot was collected by standard riffle split and the remainder was bagged and stored as coarse reject. To achieve the target split weight, the half-lots from one side were passed through the riffle splitter multiple times, generating progressively smaller splits. Depending on the initial sample weight, a selection of half-lots was combined to form a 1,000 g aliquot. This aliquot was pulverized to 85% passing -200 mesh (75 µm) using an LM2 ring-mill pulverizer (PUL-32) and collected in the master pulp bag. From this bag, 100–140 g was scooped using the lab split sample envelope and sent to the analytical facility and analyzed by fire assay.
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Since 2019, samples with 30-g fire assay results >1 ppm Au and samples with expected high Au grade were analyzed by screen fire assay (ALS method Au-SCR24C). For the metallic screen fire assay procedure, if the sample was 3 kg or less in weight, the entire sample was crushed in a Boyd Mk 4 or Terminator jaw crusher to 70% passing 10 mesh (2 mm; CRU-21). Up until January 18, 2020, if the received weight was larger than 3 kg, the crushed sample was split into two lots (‘A’ and ‘B’), which were both processed and analyzed using the procedure detailed below. On January 18, 2021, after a careful review of the A and B samples, New Found decided to cease analyzing the excess (>3 kg) material and store any excess material as a coarse reject. The crushed sample was pulverized in an LM2 (PUL-32) to 85% passing 200 mesh (75 µm) using bowls with a capacity of 1 kg. The pulverized material was combined on a mat and homogenized by four-corner rolling. Following homogenization, the sample was dry-screened using two -150 mesh (106 µm) screens. The oversize material, including the screens, were combined forming the (+) fraction. The undersize lots would be combined on a mat and homogenized by four-corner rolling, forming the (-) fraction. From the (-) fraction, ~300 g was scooped using an envelope. Both the (+) and the (-) fraction were shipped to the analytical facility.
Analytical Methods
A summary of the analytical methods used for the Queensway Project is shown in Table 4. Further detail on methods is provided below. The QP’s assessment of the appropriateness of these procedures is detailed below. All geochemical laboratories used by New Found (Eastern Analytical, Activation Laboratories and ALS) are accredited by the International Accreditation Service, which conforms with requirements of ISO/IEC 17025:2005. Eastern Analytical however is accredited for regular fire assays, but not for metallic screening. Eastern Analytical, Activation Laboratories (Actlabs) and ALS are independent of New Found.
Sample Type | From | To | Lab | Method | Description | Comment | ||||||||||
Till | 2016 | 2018 |
Maxxam Analytics (now |
BQL SOP-0001 | Instrumental neutron activation |
Au + 33 elements / |
||||||||||
Bureau Veritas) | ||||||||||||||||
All elements | ||||||||||||||||
Till | 2016 | 2018 | Bureau Veritas | AQ300 | Aqua regia, ICP-ES | except Au and | ||||||||||
As | ||||||||||||||||
Till | 2018 | 2020 | Actlabs | 1H INAA | acid digest, instrumental neutron activation analysis | Au | ||||||||||
4-acid digest, instrumental | ||||||||||||||||
Till | 2018 | 2020 | Actlabs |
1H INAA/TD-ICP |
neutron activation analysis / ICP- |
All elements except Au |
||||||||||
OES finish | ||||||||||||||||
Till | 2020 | May 2021 | Actlabs | INAA | Instrumental neutron activation | Au + 34 elements | ||||||||||
Till | 2020 | May 2021 | Actlabs | AR-ICP | Aqua regia, ICP-OES | 8 elements | ||||||||||
Till | 2016 | 2020 | ODM | Non-HMC | Table separation and concentration | Au | ||||||||||
Till | 2020 | May 2021 |
Overburden Drill |
HMC | Table separation, heavy liquid and | Au | ||||||||||
Management | ferromagnetic separation | |||||||||||||||
Grab/Trench/ Core | 2016 | May 2021 | EA Springdale | Au AA40 | 30 g fire assay, AAS finish | Au | ||||||||||
Grab/Trench/Core | 2019 | May 2021 | EA Springdale | Au Met.* | Screen fire assay, AAS finish |
Au, high-grade samples |
||||||||||
Grab/Trench/Soil | 2016 | May 2018 | EA Springdale | ICP-34 | 4-acid digest, ICP-OES finish | All elements except Au | ||||||||||
Grab/Trench | 2016 | May 2018 | EA Springdale | Au (Total Pulp Metallics) | Screen fire assay, AAS finish |
Au, high-grade samples |
||||||||||
Grab/Trench/Core | May 2018 | May 2021 | ALS Vancouver | Au-ICP21 | 30 g fire assay, ICP-AES finish | Au | ||||||||||
Grab/Trench/Core | May 2018 | 2020 | ALS Vancouver | ME-ICP41 | Aqua regia, ICP-AES finish | All elements except Au | ||||||||||
Grab/Trench/Core | 2020 | May 2021 | ALS Vancouver | ME-ICP61 | 4-acid, ICP-AES | All elements except Au | ||||||||||
Grab/Trench/Core | May 2018 | May 2021 | ALS Vancouver | Au-SCR21/- SCR24B/- SCR24C | Screen fire assay, AAS finish | Au, high-grade samples |
* EA is not ISO-accredited for screen metallics
Table 4: Analytical methods employed by New Found for the Queensway Project
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Till Samples
Till samples collected in 2016 were sieved to 63 µm and split into two subsamples both of which were submitted to Maxxam Analytics (Maxxam, now Bureau Veritas) in Mississauga, Ontario for geochemical analysis. From the first split, a 25-g aliquot was analyzed for Au and 33 trace elements by instrumental neutron activation analysis (INAA). No acid digestion was required prior to INAA analysis. From the second split, a ~0.5-g aliquot was analyzed at Bureau Veritas, Vancouver, British Columbia, for a suite of trace elements (Ag, Cu, Zn, Pb, Cd, Ni, Mo, Mn and S) by aqua regia digest with an inductively coupled plasma/optical emission spectrometry (ICP-OES) finish.
The 2018 till samples were sent to Activation Laboratories (Actlabs) in Ancaster, ON, and analyzed by INAA (Au, Actlabs code 1H INAA) and INAA Total Digestion (48 trace elements, Actlabs Code 1H INAA/TD-ICP). The analysis comprises a four-acid digest with NAA finish for Au, and either an NAA or ICP-OES finish for the remaining elements.
The 2020 till samples were submitted to Actlabs, ON, for geochemical analysis. They were analyzed for Au and 34 trace elements by INAA (Actlabs method INAA), which uses up to a 60-g aliquot. No pulverization or acid digestion is required prior to analysis and grains of Au and other indicator minerals remain intact for further analysis. The INAA method provides quantitative analyses for Au, As and Sb but most other elements cannot be quantitatively analyzed at levels useful for exploration. Therefore, a second split (1–5 g) was collected from each HMC and was pulverized and digested by aqua regia and analyzed for key indicator elements (Ag, Cu, Pb, Zn, Cd, Mo, Ni, Mn and S) by ICP-OES (Actlabs method AR ICP).
Grab, Trench, and Drill Core Samples
Prior to May 2018, all rock samples collected by New Found were analyzed at EA in Springdale, Newfoundland. From May 2018 to 31 March 2021, approximately 90% of Au analyses was carried out by ALS Vancouver, and 10% was carried out by EA Springdale. From April–May 2021, 55% of Au analyses (50% of screen fire analyses) was carried out by ALS and 45% of Au analyses (50% of screen fire analyses) was carried out by EA. All multi-element analyses (100%) were carried out by ALS since May 2018. Eastern Analytical maintains ISO 17025 Accreditation for Au fire assay and multi-acid ore grade assays of Cu, Pb, Zn, Ag, Fe and Co. ALS Geochemistry laboratories are accredited to ISO/IEC 17025:2017 for Au fire assay and screen metallics, as well as multi-acid ore grade assays. The analytical procedures used at EA and ALS are detailed below. The QP’s assessment on the appropriateness of these techniques is presented below.
Eastern Analytical
A 30-g pulp aliquot was collected from the pulverized lot using a scoop and analyzed by fire assay with AAS finish (EA method Au AA30). The pulp rejects were sent to ALS for trace element analysis by ALS method ME-ICP41 (until March 2020) or ME-ICP61 analysis (March 2020–present). Prior to 2019, samples returning >10 ppm Au were subject to a 30- g gravimetric fire assay. Since 2019, samples with 30-g fire assay results >1 ppm Au and samples with expected high Au grade were analyzed by screen fire assay (EA method Au Met.). For the metallic screen assay, the total coarse fraction (+106 µm) was weighed and analyzed by fire assay with various finishes. Beads were visually inspected, silver beads were analyzed by AAS, golden beads suspected to contain high Au were analyzed by gravimetric finish. In the event a bead does not dissolve by aqua regia digestion for AAS, the residual bead was subjected to gravimetric finish (hybrid). If required, the undersize fractions (-106 µm) were combined and homogenized by four-corner rolling on parchment paper. From the undersize lot, two 40-g samples were weighed and analyzed by fire assay with AAS, gravimetric or hybrid finish. The average of the two undersize results was taken and reported as the Au minus fraction. The combined Au content reported by the lab is a weighted average of the plus and minus fractions. The undersize reject was submitted to ALS for ME-ICP41 or ME-ICP61 analysis.
ALS Minerals
At ALS Vancouver, a 30-g pulp split was collected from the pulverized lot using a scoop and analyzed by fire assay with ICP-AES finish (ALS method Au-ICP21). The lab split reject was submitted for trace element analysis by ALS method ME-ICP41 (until March 2020) or ME-ICP61 analysis (March 2020–present). Prior to 2019, samples returning >10 ppm Au were subjected to a 30-g gravimetric fire assay. Since 2019, samples with 30-g fire assay results >1 ppm Au and samples with expected high Au grade were analyzed by screen fire assay (ALS method Au-SCR24C). For the metallic screen assay, the entire (+) fraction and the screens were analyzed by fire assay with a gravimetric finish. From the (-) fraction, two 50-g aliquots were weighed and analyzed by fire assay with an AAS finish (Au-AA26). Undersize samples returning >10 ppm Au were re-analyzed with a gravimetric finish. The average of the two undersize results was reported as the Au (-) fraction. The combined Au content reported by the lab is a weighted average of the (+) and (-) fractions. Until January 2021, the final Au value reported in the database was determined by combing the A and B results using a weighted average calculation.
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Sample Security and Transportation
The collection, packaging, transport, and receipt of samples were conducted under a strict and traceable chain of custody (CoC). The collection and packaging of samples for shipping was undertaken by contractors of New Found under the supervision of New Found’s Chief Operating Officer, Greg Matheson, P.Geo. Samples were collected and stored in a dedicated area in the core shack under constant surveillance during the day which is secured by lock and key at night and under video surveillance. A CoC document was created by the geologist/geo-technician that includes a list of sample numbers and signature lines for the courier and New Found representative confirming the state of the shipment. For shipment, samples were inventoried before being placed in rice bags which were secured with a cable tie. The samples were then placed in shipping bins that were labelled with the shipping information.
Prior to May 2018, all of New Found’s samples were transported directly to EA. All 2018 sampling was directly supervised by Mike Regular, and all samples were handled and shipped by Mike Regular. Since May 2018, samples were analyzed at ALS Minerals, in Vancouver B.C. Sample preparation occurred at ALS Minerals Timmins, ON, Sudbury, ON and Moncton, NB. Samples were shipped to ALS by commercial courier on a regular basis. New Found contractors delivered the sample bins to the shipping courier along with the CoC form. The CoC was signed and returned to New Found for scanning and cataloguing. The sample shipment was virtually dispatched in the MX Database by the logging geologist for tracking and the laboratory was notified of the incoming shipment. Upon receipt by the laboratory, New Found’s COO and database geologists were informed, and the samples were logged in and checked against New Found’s submittal form and chain of custody document for any discrepancies. Since February 2021, a portion of samples was analyzed EA and sample shipments were transported directly by New Found contractors.
Data Quality
All analytical data collected and reported at the Queensway Project since May of 2018 have been collected under a data quality management system (“DQMS”), which is administered by Melissa Render P.Geo and Candice Ooi and with ultimate responsibility of Greg Matheson P.Geo. The DQMS includes a quality assurance (“QA”) component, through implementation of standard operating procedures (“SOP”) for all relevant work processes. Data quality was monitored continually through collection and analysis of control samples and final data quality has been assessed by the QP against New Found’s data quality objective (“DQO”) of identifying and delineating mineralization.
The below discussion centers on the diamond core sampling process and sample preparation and analytical processes at ALS and EA. Data quality management systems and data quality for the till sampling programmes were not independently reviewed by the QP. The risk associated with the data quality of these programmes is considered low with respect to the associated DQO of identifying and delineating mineralization. New Found’s personnel ensure that four quality control samples are included in every 40 samples, representing 10% of the total samples, which meets the industry standard. All control samples are submitted to the laboratory without any additional identification marks apart from the sample tag number.
Quality Assurance
Quality assurance (QA) is about error prevention and establishing processes that are repeatable and self-checking. The simpler the process, and the fewer steps required, the better, as this reduces the potential for errors (variance and bias) to be introduced into the process. This goal can be achieved using technically sound, simple and prescriptive SOPs and management systems.
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For location data, data quality is determined by the accuracy of collar locations and down hole surveys. No SOPs for collar and downhole surveys were sighted by the QP. The QP is aware that collars are surveyed by RTK GPS and downhole surveys are collected by Reflex EZ Shot equipment by the drill crew. The QP considers this level of QA appropriate with respect to the DQO but suggests putting a written SOP in place that details acceptable survey deviations and magnetic tolerances. Such an SOP should be available to the drill crew as well as the supervising geologist to facilitate a dialogue.
For the geological data, data quality is determined by consistency of the logging between different geologists. An SOP for core logging was sighted by the QP as well as a reference document detailing the various Queensway Project lithologies. The logging SOP represents common practice and details how to log lithology, alteration and veining, how to collect structural information and how to use the TerraSpec Halo instrument. The lithology reference document provides additional detail and pictures of common lithologies and textures. The QP considers the level of QA broadly appropriate with respect to the DQO but suggests formalizing the SOP in a version-controlled, peer-reviewed document. The QP recommends investing time in identifying the key vein types and capturing these in the logging SOP, including a list of key characteristics. The QP recommends investing in a rock library of the key lithologies present in the project area to serve as a reference for logging geologists. The SOP contains no record of peer-review or cross-logging and the QP suggests routinely carrying cross-logging to monitor the consistency of the logging results.
Density data were not collected for the Queensway Project prior to 31 April 2021. Since April 2021, downhole density data were collected using a gamma-gamma compensated-density logging tool. The SOPs from the wireline survey contractor were not available for review and the QP cannot comment on the adequacy of the procedures in place.
For diamond drilling, sample quality is determined by the drillers’ ability to return complete core samples from the hole. Standard operating procedures for the drilling at the Queensway Project were not sighted by the QP; however, the QP is aware that New Found has implemented measures to maximize recovery in friable zones including the use of polymer drill additives, drilling of HQ core and pulling of the core barrel at the first sign of blockage. The QP considers the level of QA appropriate with respect to the DQO but suggests putting a written SOP in place to facilitate dialogue between New Found and the drilling contractor to optimize sample quality and core recovery. The QP considers a recovery of 95% to be achievable, provided the core is predominantly fresh and not excessively sheared or altered.
The core sampling SOP reviewed by the QP describes industry-standard sample-selection and core-cutting procedures. Samples were collected at intervals of 0.3–1 m length depending on lithological breaks. The SOP emphasizes sampling should not cross lithological breaks, which is considered good practice; however, the QP suggests adding a statement that up to 2 cm of waste rock at the edge of the mineralized zone should be included in mineralized vein samples to prevent grade smearing in the host-rock. The QP also suggests adding detail on specific lithological breaks to use for sampling such as different types of quartz veining. Further, the QP suggests formalizing the SOP in a version-controlled, peer reviewed document. This document should also include a section on how to properly control the quality of the splitting process through the collection of core duplicates. The QP considers the sampling SOPs broadly appropriate with respect to the DQO but suggests adjusting the SOP to fit the data objectives once the DQO changes to aim for higher degrees of data quality for resource definition purposes. The second split is completed after the coarse crush at ALS or EA. Standard operating procedures for the crushing and splitting of this stage were not sighted by the QP; however, the QP is familiar with how ALS and EA carry out this process. ALS uses a standard riffle splitter and EA uses a Humboldt open pan riffle splitter to collect the 3-kg sample for pulverizing. The splitting may involve multiple steps of splitting and recombining to achieve a result as close to 3 kg as possible. The QP considers the practice of collecting a 3-kg split by splitting and recombining to yield a 3-kg split not good practice for material with such high natural inherent variability. The variance introduced at this generally poorly controlled stage of coarse crushing is significant and erodes much of the variance improvements from using the expensive screen-fire assay method. The QP suggests changing sample lengths from 1.0 m standard lengths to 0.7 m sample lengths for strongly mineralized material to fit the 3-kg sample limit and prevent them from having to be split. A more cost-effective alternative solution could be to pulverize the entire sample and then split it. In the QP’s opinion, New Found should prepare an SOP in collaboration with its laboratories for this critical stage so that the quality can be assured and controlled. In the QP’s opinion, the QA of the second split is marginally acceptable with respect to the DQO and should be optimized if the objective changes to higher degrees of data quality for resource definition purposes. The third split occurs after pulverization of the ~3-kg sample at ALS or EA. Standard operating procedures for the pulverization and third splitting of this stage were not sighted by the QP; however, the QP is familiar with how ALS and EA carry out this process. The third split is conducted with a stainless-steel scoop and the subsample is placed in a paper sample bag. The QP suggests requesting ALS and EA carry out the third split using a micro-rotary splitting device to ensure the representativity of the pulp. This is relevant especially since pulp samples are transported from preparation laboratories at Moncton and Timmins to the analytical facility in Vancouver. There is a misalignment in pulverization settings between ALS (85% passing 75µm) and EA (95% passing 106µm) and the pulverization settings between ALS and EA should be aligned. In the QP’s opinion, the QA of the third split is marginally acceptable with respect to the DQO and should be optimized if the objective changes to higher degrees of data quality for resource definition purposes.
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The analytical phase of the process involves the measurement of elements present in the sample by analytical methods at EA and ALS. For simplicity of the discussion, this also includes all actions after collection of the pulp (e.g. fluxing, fusing, cupellation, etc). The QP has not reviewed SOPs for the processes at ALS or EA but has corresponded directly with laboratory personnel regarding operating procedures and is familiar with the standard procedures in place. In the QP’s opinion, the operating procedures of the analytical process at ALS and EA are acceptable with respect to the DQO. The screen-fire assay method is an appropriate method for unbiased and precise measurements of Au concentration in material that has very high natural inherent variability. However, the QP notes that the duplicate results for the undersize of the pulp should not be treated as quality control pairs and should not undergo re-assaying if the results are outside 10% relative difference to one another. This limits New Found’s understanding of the effectiveness of the screen size and might obscure important true variance introduced by the presence of Au grains smaller than the screen size. The analytical procedures should be optimized for future work. The differences in fire assay charges between ALS (50 g) and EA (40 g) should be resolved and the QP suggests using the same charge weight for normal and screen fire assays (now respectively 30 g and 50 g at ALS and 30 g and 40 g at EA). Eastern analytical is ISO accredited for fire assay with AAS finish but not for screen metallics. After optimizing analytical procedures to ensure that identical procedures are employed at ALS and EA, New Found should carry out a detailed umpire testing program to verify accuracy and precision of the results obtained from EA. Moreover, New Found should undertake such programs routinely to monitor accuracy and precision of analytical results.
Quality Control
The purpose of QC is to ensure that data are consistent by detecting and correcting errors while the measuring or sampling system is in operation. A QC program is successful if it demonstrated that the system delivering the data was always in control and that errors were fixed during operation. Only after it has been established that a system was in control during a given period can data quality, measured by accuracy and precision, be determined. Quality control can be achieved by inserting and constantly evaluating checks and balances. These checks and balances should be inserted at every stage of the sampling process (e.g. primary sampling, preparation, and analytical) and monitored while data collection is ongoing.
Quality control on location data takes place at the drill rig as surveys are being collected by monitoring deviations and magnetic field strength. The QP considers this level of quality control appropriate with respect to the Queensway DQO.
No results of cross logging or peer review are available for the Queensway Project and the QP has not been able to assess consistency of the geological logging process. The QP recommends carrying out cross-logging programs and peer review of the geological logging to better monitor the consistency of the logging data.
The quality of the drilling process is determined by proxy through monitoring sample recovery data. The QP has reviewed the recovery data and concludes that the drilling process appears to have been in control, providing consistent results.
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The quality of the first splitting process (core split) can be monitored by the collection of a duplicate sample. No first split (core-split) duplicates were collected by New Found and consistency of the first splitting process could not be reviewed. The QP recommends that New Found collects duplicate samples from mineralised core and submits these continually so that the natural inherent variability of the mineralization can be better understood and the process better controlled. The quality of the second splitting process (coarse crush) can be monitored by the collection of a duplicate sample. Coarse crush duplicates were not systematically collected by the laboratories. The QP considers this not good practice for material with such high natural inherent variability. The practice of collecting a 3-kg split by splitting and recombining introduces significant variance, and this variance should be monitored by collection of a second-split (coarse-crush) duplicate. For the period until January 2021, samples submitted for screen fire assay at ALS that were in excess of 3 kg were split in an A and B split after the coarse crush. Although sample sizes are not strictly equal (i.e. the overlimit of a 3-kg sample A was analyzed as sample B), results of the A and B splits can be used as an approximation of second split duplicates. Relative differences of analytical results from A and B splits analyzed at ALS Vancouver were reviewed to assess consistency of the splitting process. No trends were noted in relative differences of the second-split duplicates and the second splitting process at ALS appears to have been in control. Since samples >1 ppm Au are analyzed by screen fire assay, the third split only takes place for the undersize material. While comparison of undersize duplicates is useful to verify that screen sizes are chosen appropriately, the undersize results are not representative for the full sample and cannot be used to assess variability of the mineralization. Hence, consistency of the third splitting process could not be assessed.
Quality control of the analytical process involves the repeated and continuous evaluation of certified reference materials (“CRMs”). The laboratory inserts such reference materials into the sample stream, evaluates these, and makes corrections to the system when errors occur, as part of its requirements under ISO accreditation. New Found submits an additional set of ‘blind’ CRMs to the laboratory along with the primary samples to conduct its checks on the laboratory’s consistency. New Found’s CRM materials were sourced from Ore Research and Exploration Pty Ltd. of Bayswater, Australia. The CRMs span a range of elemental values and were inserted at a frequency of once per 20 primary samples. Shewhart control plots were created for each CRM to identify if any special cause variation occurred during the period of analysis. The analytical results were compared against the process mean determined using the moving range approach. Westgard control rules 1(3s), 2(2s), 4(1s), R(4s), 7X, 6T, J-Chart and 14O were used for detection of special cause variation. All CRM results were plotted on a heat map to assess if any periods occurred in which results for multiple CRMs showed special cause variation. This approach addresses the problem faced when following the standard Westgard Rules, where many transgressions are identified, indicating that the system was not in control. The heatmap approach enables quick identification of the periods in which multiple transgressions occurred across various CRMs and provides a more practical way to evaluate whether there was an issue with consistency at the laboratory.
Analytical results for CRMs submitted to ALS from February to April 2020 demonstrate that no special cause variation occurred during this period, suggesting that the analytical process was in control. Analytical results for CRMs submitted to ALS from September 2020 to May 2021 highlight seven periods in which multiple CRMs showed special cause variation. Moreover, the CRM results highlight five days for which only a single CRM result was available and that result indicates special cause variation. These results suggest that the analytical process at ALS Vancouver was not always in control. Analytical results for CRMs submitted to EA from February–May 2021 demonstrate that special cause variation occurred on 28 April 2021, suggesting that the analytical process was not in control. Moreover, the CRM results highlight one day (6 May 2021) for which only a single CRM result was available and that result indicates special cause variation. These results suggest that the analytical process at EA Springdale was mostly in control.
CRM Code | First Analyzed | Last Analyzed | Certified Value | Certified StdDev | ||||||||
OREAS 217 | 21/09/2020 | 25/05/2021 | 0.338 | 0.01 | ||||||||
OREAS 218 | 10/12/2019 | 03/04/2020 | 0.531 | 0.017 | ||||||||
OREAS 223 | 28/03/2020 | 25/05/2021 | 1.78 | 0.045 | ||||||||
OREAS 224 | 21/11/2019 | 03/04/2020 | 2.15 | 0.053 | ||||||||
OREAS 239 | 25/03/2020 | 25/05/2021 | 3.55 | 0.086 | ||||||||
OREAS 255 | 21/11/2019 | 03/04/2020 | 4.08 | 0.087 |
Table 5: CRMs inserted during the 2019-2021 campaigns.
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Quality Testing
Quality acceptance testing (QT) is where a final judgement on the quality of the data is made by assessing the accuracy and precision of the data for those periods where the process was demonstrated to be in control, and separately for those periods where the process was demonstrated to be not in control. Accuracy and precision are evaluated, and a final pass/fail assessment is made based on the requirements for each data component.
No results of check surveys (e.g. using a gyro compass or DGPS) were sighted by the QP and accuracy and precision of the collar and down-hole surveys was not assessed. However, location data were collected using industry-standard equipment and the QP considers location data acceptable with respect to the DQO. No results of cross-logging or peer review are available, and accuracy of the geological logging could not be assessed. The QP considers this acceptable with respect to the DQO but suggests putting in place quality monitoring and quality assessment systems to better understand the consistency of the logging process.
New Found has implemented measures to maximize recovery in friable zones and a visual examination of the drill core (section 12) did not reveal any issues with core quality or recovery. The QP considers the quality of the primary sample acceptable with respect to the DQO.
No first-split (core-split) duplicates were collected by New Found and precision and accuracy of the first splitting process could not be reviewed. The QP recommends collecting duplicate samples from mineralised core and submitting these continually so that the natural inherent variability of the mineralization can be better understood. Scatter- and quantilequantile plots were created for the A-B duplicates collected during the 2020–2021 diamond drilling program. The quantile-quantile plot suggests that no biases were introduced by the splitting process. The precision of the coarse crush (second split) was determined using the modified Thompson-Howarth approach. Thompson-Howarth precision values (defined as the coefficient of variation) are 10–20% for samples up to 10 ppm Au and 20–45% for samples ranging from 10–350 ppm Au, reflecting the nuggety character of the mineralization. The QP considers the precision values for the second split acceptable for the style of mineralization. Since Samples >1 ppm Au are analyzed by screen fire assay, the third split only takes place for the undersize material. While comparison of undersize duplicates is useful to verify that screen sizes are chosen appropriately, the undersize results are not representative of the full sample and cannot be used to constrain the precision of the splitting process.
After identification of any special cause variation, accuracy and precision of the CRM results were determined for periods in which the analytical process was in control, and separately for periods in which the analytical process was demonstrated to be not in control. The analytical results from six CRMs demonstrate that, for the period from 2019–2021, the analytical process at ALS Vancouver delivered results that were precise and mostly accurate (Table 11.5). On 18 November 2020 and on 25 February 2021, when the analytical process was not in control, results for two out of three CRMs demonstrate a statistically significant (95% confidence) low bias of 1–2% compared to certificate values. Considering that the bias is low and relatively small, the QP considers the associated risk low with respect to the DQO.
From 19–22 April 2021, when the analytical process was not in control, results for two out of three CRMs show significantly (95% confidence) more variance than the certified variance of the CRM. In addition, results for one CRM (OREAS 239) show a low bias of ~4% (not statistically significant at 95% confidence) and New Found should consider submitting a selection of samples for check assaying. Considering the nature (low) of the bias, the QP considers the associated risk low with respect to the DQO.
The analytical results from three CRMs analyzed at EA Springdale from February 2021–May 2021, demonstrate that analytical results were precise but not accurate. From 24 February 2021 to 25 May 2021, when the analytical process was in control, results for three CRMs demonstrate a statistically significant (95% confidence) low bias of ~2% compared to certificate values. Moreover, on 28 April 2021, when the analytical process was not in control, results for one CRM demonstrate a statistically significant (95% confidence) low bias of 13%. The QP considers a low bias of 2–13% not acceptable with respect to the DQO and this should be addressed with EA Springdale. Considering the nature (low) of the bias, the associated risk is considered low with respect to the DQO. No results for other CRMs are available for 28 April 2021 and New Found should consider submitting a selection of samples, analyzed on this date, for check assaying.
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For the six days for which only a single CRM result was available and showed special cause variation, a statistical assessment of accuracy and precision could not be carried out. New Found should review the analytical results for these dates and consider submitting a selection of samples for check assaying. The QP recommends including three different CRMs with each submission such that assessment of accuracy and precision is never reliant on a single CRM result.
For samples submitted to Eastern Analytical prior to May 2018, no check samples were included, and internal laboratory check samples were used to monitor analytical precision and accuracy. Considering the nature of the exploration work undertaken during this period (grab and soil samples) and the intended outcome of the work (identification of exploration targets), the QP considers this level of quality control acceptable with respect to the DQO. To validate the results of the work undertaken before 2018, New Found carried out a check assay program of the pre-2018 samples by submitting a batch of 22 randomly selected mineralized samples to ALS Vancouver for umpire assaying. The results showed that, for assays above the limit of quantification (30 ppb), results from Eastern Analytical mostly correlate well with check assays from ALS The QP considers the accuracy of the assay process before 2018 acceptable with respect to the 2018 DQO of identifying exploration targets.
Blanks were submitted by New Found once per 20 primary samples from 2019–2021. The blank material was sourced from an unmineralized red sandstone from a roadcut near Botwood, NL. Blank performance for ALS from 2019–2021 is good with 1088/1096 (99.3%) assays returning assay values below the limit of quantification (10 times the method blank, 30 ppb). One blank returned an assay result of 0.9 ppm Au, suggesting that some cross-contamination occurred. Further inspection shows that this sample followed a primary sample containing 65 ppm Au. Comparison of blank results against the preceding sample shows that two out of eight blanks following >10 ppm Au assays returned assays below 0.1 ppm Au, indicating that cross-contamination is not a systemic issue at ALS Vancouver. Blank performance for EAL from 2019-2021 is good with all assays (161) returning assay values below the limit of quantification (10 times the method blank, 30 ppb). The blank results are considered acceptable with respect to the DQO. However, the QP recommends requesting ALS to run a silica flush following samples with visible Au.
Conclusions
· | Several periods of special cause variation were identified at ALS Vancouver and EA Springdale, based on results of disguised CRMs, suggesting that the analytical process was not always in control. |
· | Results of CRMs demonstrate that analytical results from ALS were precise and mostly accurate, whereas analytical results from EA were precise but not entirely accurate. |
· | A consistent low bias (~2%) should be discussed with EA. |
· | Identified biases are all low biases and the QP considers the associated risk low respect to the DQO. |
· | Six days were identified for which only one CRM result was available and showed special cause variation. The QP recommends including three different CRMs with each submission to ensure that assessments of accuracy and precision are never reliant on a single CRM result. |
· | Blank results demonstrate that cross-contamination is not an issue at ALS Vancouver and EA Springdale. |
· | The QP recommends requesting quartz flushes following samples with visible gold. |
· | Preparation and analytical methods should be aligned between ALS and EA. Crushing, pulverization, and screen size settings as well as fire assay charges should be aligned. |
· | Coarse crush duplicates should be collected systematically to monitor the second split after the coarse crush. |
· | Duplicate results for the undersize pulp should not be treated as quality control pairs by ALS and EA and should not undergo re-assaying if outside 10% relative difference to one another. |
· | Duplicate samples should be collected from mineralised core and submitted continually so that the natural inherent variability of the mineralization can be better understood and the process better controlled. |
· | Accuracy and precision of screen fire assay results from EA should be closely monitored and verified by umpire analyses. |
· | The QP recommends investing time in identifying key vein types and including key characteristics and images in the logging SOP. The QP recommends investing in a rock library to use as a reference for the logging geologists. |
· | The QP recommends carrying out cross-logging and peer review to monitor the consistency and quality of the geological logging. |
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· | The QP considers New Found’s DQMS broadly acceptable with respect to the DQO. However, various important improvements are required for future resource definition drilling and for the data to be used for resource estimation. |
5.9 | Data Verification |
The QP for the site visit (Dr. Kruse) conducted a site inspection for data verification purposes from 18–23 May 2021. The site visit included inspection of NFGC’s core handling facilities, core storage areas, active drill rigs and property geology. The site visit was facilitated by G. Matheson, P.Geo, Chief Operating Officer for NFGC.
The objectives of the site visit included: 1) collection of independent witness (“IW”) verification samples; 2) auditing New Found core drilling, handling and sampling procedures 3) verification of selected drill hole collar locations, 4) observation of in-situ mineral occurrences in outcrop, and 5) examination of drill core and observation of mineralized intercepts. The property site visit included observation of in-situ mineralized quartz veins at the Dome and Keats occurrences. All IW verification samples were analyzed at Eastern Analytical Ltd (EA), Springdale, NL. The results of these analyses are provided in the Technical Report.
Independent Witness Verification Samples
Ten IW verification samples were collected from 2019, 2020 and 2021 series drill holes. Holes were selected from the Keats, Lotto, Dome and Glass target area. Intervals were selected to span a representative range of grades reported from the Queensway Project. Half-core verification samples were collected, honoring the original sample intervals. Samples were submitted to EA for analysis by screen fire assay (EA method Au Met.). Results of the verification samples are shown in Table 6. The samples confirm the general grade tenor and discrepancies are consistent with the expected natural inherent variability for orogenic gold deposits.
Year | Drill Hole | Zone | From (m) | To (m) | Sample (Orig.) | Sample (Ver.) | Au g/t (Orig.) | Au g/t (Ver.) | |||||||||||||||||||
2020 | NFGC-20-73 | Keats | 63 | 63.45 | B916024 | 986478 | 4.2 | 1.1 | |||||||||||||||||||
2020 | NFGC-20-49 | Keats | 177.7 | 178.7 | B886736 | 986479 | 21.2 | 12.6 | |||||||||||||||||||
2021 | NFGC-21-111 | Keats | 236 | 237 | B918578 | 986480 | 3.0 | 4.5 | |||||||||||||||||||
2021 | NFGC-21-118 | Keats | 217 | 218 | B918799 | 986481 | 3.9 | 9.5 | |||||||||||||||||||
2020 | NFGC-20-52 | Keats | 107.7 | 108.7 | B880682 | 986482 | 285.6 | 100.7 | |||||||||||||||||||
2021 | NFGC-21-89 | Lotto | 85.35 | 86.35 | B875732 | 986483 | 6.2 | 3.0 | |||||||||||||||||||
2020 | NFGC-20-24 | Lotto | 35.3 | 35.8 | B871872 | 986484 | 1.5 | 1.2 | |||||||||||||||||||
2020 | NFGC-20-17 | Lotto | 29.8 | 30.5 | B871033 | 986485 | 44.4 | 26.3 | |||||||||||||||||||
2020 | NFGC-20-66 | Dome | 103.75 | 104.65 | B875089 | 986486 | 3.7 | 2.6 | |||||||||||||||||||
2019 | NFGC-19-05 | Glass | 232 | 233 | X943897 | 986487 | 5.2 | 7.6 |
Table 6: Results of independent verification samples.
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Data Verification
The QP for the site visit, Dr. Kruse, was provided with full access to New Found’s database. New Found employs a cloud-based relational database system (MX Deposit) for storage and management of drill hole and surface data. Other data and documentation (e.g. laboratory certificates, chain-of-custody documentation etc.) are also stored in a commercial online cloud storage platform. Data verification includes random spot checks of sample weights and assay results in the database against original laboratory certificates. No errors or inconsistencies were found. The New Found data management workflow involves import of digital certificates into the cloud-based relational database. This system includes automated data verification and approval checks by New Found designated senior geologists. This workflow largely eliminates the possibility of manual transcription errors. During the site visit, selected drill hole collars were located using a conventional hand-held GPS against surveyed RTK coordinates in the New Found database. Additionally, casing dip and azimuths were validated using a geological compass. A minor discrepancy in Easting was noted on one hole. Additionally, some recent holes had not yet be labeled with a hole ID, at the time of the site visit. Some historical holes had been re-surveyed and flagged by New Found staff, but not labeled with hole numbers. Drill logs for selected holes were compared with core photos and no significant discrepancies were found. Geological descriptions were found to be complete and consistent with the core photographs. Discussion with on-site logging geologists at the Queensway Project site indicated a good understanding of the Queensway Project geology, alteration, and mineralization style.
Adequacy of Data
The QP for the site visit, Dr. Kruse, has verified the quality of the exploration data and the visual, physical, and geological characteristics of the property and have found no significant issues or inconsistencies that would cause one to question the validity of the data. In the opinion of the QP for the site visit, New Found data collection and management practices conform to or exceed current industry best-practice standards. The adoption of new cloud-based technologies and automated workflow for data management has eliminated many potential sources of human error. However, it is recommended that New Found develop and implement robust data security and redundancy protocols to protect the integrity of their database from either malicious or unintentional failure.
5.10 | Mineral Processing and Metallurgical Testing |
New Found has no knowledge of any historical mineral processing/metallurgical testing of the Au mineralization on the Queensway Project, nor has it completed any mineral processing/metallurgical testing of its own.
5.11 | Mineral Resource and Mineral Reserve Estimates |
There are no current mineral resources or mineral reserves on the Queensway Project.
5.12 | Adjacent Properties |
There are many mineral licenses in the vicinity of the Queensway Project, held by prospectors and other exploration companies. There are also several mineral tenures existing near the Queensway Project, the most important of which is the Beaver Brook Antimony Mine, west of Queensway South. The Beaver Brook Antimony Mine lies ~1.5 km northwest of Paul’s Pond claims at Queensway South. In 1989, Noranda discovered the deposit during regional Au exploration as a prominent soil anomaly. Stibnite mineralization occurs in three zones (West, Central and East), along a 4 km strike length of the eastern margin of the MPIS. While primarily an antimony mine, exploration drilling near the Central zone has given intercepts yielding up to 26 g/t Au over 2.0 m with and without coincident Sb values. In 1997, Roycefield Resources opened the mine, but it closed after eight months of operation. In 2007, after an ownership change, the mine was dewatered, re-opened and operated as Beaver Brook Antimony until 2012. A short period of operation occurred from 2017–2019. Since 2019, the mine has been on care and maintenance. Staff are on-site and continue to pump water inflows.
Within the boundaries of the Queensway Project, there are four enclosed license areas held by companies other than New Found. The largest is held by Golden Ridge Resources and includes 62 claims optioned from Marilyn and Roland Quinlan (024195M and 025767M), situated in the Queensway South block on the central west flank near the Beaver Brook Mine. Towards the southeastern limits of the Queensway South project, a small, six-claim mineral license is held by prospector Clyde McLean (025520M). Buchans Minerals Corp holds a small, four-claim mineral license (031341M) near Dead Wolf Brook. Prospector Alexander T. Stares holds six claims (024096M) west of Gander Lake. These claims are optioned to Quadro Resources.
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The Clark’s Brook property, an enclave into the northwest portion of Queensway South and west of the Northwest Gander River, was first explored by Sokoman Minerals Corp. under option from Metals Creek Resources. Prospecting at Clark’s Brook discovered Au mineralization associated with silicified and quartz vein intervals in shales and sandstones, bearing disseminated sulfides. Grab sample assays of 19.5 ppm Au from bedrock and 25.4 ppm Au from float, led to diamond drilling seven holes in 2017–2018, which returned the highest values of 3.37 g/t Au over 3.0 m including 14.7 g/t Au over 0.6 m. The drilling was designed to test both the showing on Clark’s Brook and a strong magnetic low, which has a northerly trend and a minimum strike length of 400 m. In 2019, an additional three holes were drilled with assay highlights of 1.0 g/t Au over 25.8 m in CB-19-08, although the true thickness of this zone is not known. It was noted that intervals of vuggy, chalcedonic, quartz veins with 1–3% disseminated pyrite, minor arsenopyrite and very minor stibnite, were intersected in hole CB-19-08. The property option is to be terminated by Sokoman and the ownership of the claims will revert to Metals Creek Resources.
Other companies conducting exploration near the Queensway Project include an extended and constantly changing list of explorers, who together have developed a regional exploration play identified by some as the Exploits subzone or Davidsville Group Play.
At the release of this Report, there is a minimum of eleven exploration companies active at the boundaries of the Queensway Gold project. From the south–north these are:
· | Exploits Discovery Corp. are exploring in areas they term True Grit, Middle Ridge, and Great Bend. Exploits Discovery Corp. has a comparable land package to New Found and began with licenses north of Queensway North at their Mount Peyton, Jonathan’s Pond, Gazeebow, and Dog Bay projects. |
· | Canstar Resources Inc. is exploring south of Queensway. |
· | Origen Resources Inc. is exploring south of Queensway, near the south coast of Newfoundland, at the Golden Baie and Middle Ridge projects. |
· | Tru Precious Metals Corp. is exploring along the southwest edge of Queensway South. |
· | Vulcan Minerals Inc. is exploring along the southwest edge of Queensway South at the Rolling Pond and Lizard projects. |
· | Sky Gold Corp. is exploring north of the Gander Lake and adjacent to Queensway North. Projects include Mustang and Virginia. |
· | Labrador Gold Corp. are exploring along strike from the AFZ at their Kingsway Project. |
· | Quadro Resources Ltd. is exploring at Yellow Fox and Careless Cove projects, among other locations. |
· | Spearmint Resources Inc. explore adjacent to the AFZ at their Goose Gold Project |
· | Gossan Resources Ltd. is exploring east of Queensway North. |
· | St. James Gold Corp. is exploring along the GURC. |
Spatial data pertaining to the adjacent properties of the Queensway Project is primarily sourced from the Government of Newfoundland and Labrador’s Geoscience Atlas (http://geoatlas.gov.nl.ca/Default.htm). This website allows for the extraction of digital GIS data for use in GIS applications. Data is updated on a regular basis.
The QP has been unable to verify the technical information on these adjacent properties and this information is not necessarily indicative of the mineralization on the properties that are the subject of this Technical Report.
5.13 | Interpretation and Conclusions |
Interpretation
New Found has undertaken significant exploration on its 151,000-ha Queensway Project in central Newfoundland, Canada. Following a review of historical geophysics, surface mapping, and soil, till and drill-core sampling, New Found has carried out regional magnetic, EM and gravity surveys, collected >2,500 grab and trench samples, >1,500 till samples, >750 soil samples and drilled >48,000 m of diamond core. In 2019 New Found carried out a ~2,000 m drilling program and successfully intersected Au mineralization along the AFZ and JBPFZ. In August 2020, New Found commenced a 200,000-m drill program, with 46,000 m completed as of 27 May 2021, the effective date of this report.
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The 2020–2021 drilling program has intersected significant Au mineralization along the AFZ at the Keats and Lotto targets and demonstrated the presence of near-surface high-grade Au mineralization. Surface exploration has generated multiple targets for follow-up till-sampling and trenching along the AFZ and JBPFZ and along their inferred extensions in the southern part of the property.
Gold mineralization at the Queensway Project is quartz-vein-hosted orogenic Au mineralization, typically with free Au, hosted in tight-to-isoclinal folded Cambrian-Silurian metasediment of the Davidsville Group. Mineralization is typically Au-only with significant Ag mineralization only intercepted at the Little-Powerline Zone. Interpretation of airborne geophysics and field structural observations suggests that Au mineralization is structurally controlled and associated with the regional D1 deformation event. Gold mineralization is spatially associated with kilometer-scale deformation structures such as the AFZ and JBPFZ and secondary structures such as the Keats and Lotto baseline faults.
At Keats, drilling to date shows that high-grade Au mineralization is steeply dipping and has along-strike continuity of over 250 m and down-plunge continuity of at least 450 m while remaining open at depth. Structural data obtained from optical televiewer logging suggest that Au mineralization is associated with a zone of intense and possibly drag-related folding within the Keats Fault Zone. At least two dominant orientations of quartz veins have been identified and New Found is currently investigating the relationship of different vein sets with mineralization through detailed petrography and geological modelling.
At Lotto, drilling has demonstrated continuity of high-grade Au mineralization to 130 m below the surface, where it remains open. Mineralization is steeply dipping, and along-strike continuity is inferred to be at least 50 m. High-grade Au mineralization is interpreted to be associated with north-striking quartz veins, interpreted to be secondary structures to the Lotto Baseline Fault. Current drilling is designed to better constrain the geometry and extent of the mineralized system.
At Knob, historical drilling intersected significant near-surface Au mineralization in steep, shear-controlled quartz veins, striking east–northeast over a strike length of ~120 m. Gold mineralization occurs primarily as visible Au in massive, sheeted veins of milky quartz. Current drilling is designed to better constrain the geometry and extent of the mineralized system.
At H-Pond, along the JBPFZ, Au mineralization occurs in multiple, steep, northwest dipping quartz vein arrays. Historical drilling suggests that mineralization occurs over a strike length of 800 m and to 250 m below surface. Excavation at the Glass prospect, 150 m along strike to the north, exposed quartz vein arrays over ~150 m strike length. Preliminary drill testing of the Glass prospect suggests this may be a continuation of the H-Pond vein system. Drill testing of an Au-in-till anomaly at the 1744 zone, 500 m along strike to the north, intersected sulfide Au mineralization and may suggest further continuation of the H-Pond system to the north. Additional drill testing of the H-Pond, Glass and 1744 prospects is planned for 2021.
Two- and three-dimensional inversion of airborne magnetic and gravity data for Queensway North has been completed. Cutting-edge data interpretation techniques such as machine learning will be used to interpret the inverted data and better constrain structural controls on Au mineralization and guide further regional exploration. Prospecting of outcrop and float, in follow-up of till and soil geochemistry data, has to date been the key target generator. The shallow till cover and the association of Au mineralization with quartz veining and associated alteration make identification of prospective mineralization relatively easy. Trenching has been a successful follow-up method at the Queensway Project and many of the Au zones such as Dome, Road, Lotto, Little and Cokes were discovered and/or defined through trenching. Trenching will continue to be an important early-stage follow-up technique in the area.
Conclusions
The QPs consider that the Queensway Project has considerable potential for significant Au mineralization. The project covers a significant land package covering >100 km of strike length in a favorable geological and structural setting, potentially analogous to that of world-class Au deposits located in the Bendigo-Castlemaine goldfields of Victoria, Australia. Limited deep drill testing has been carried out to date, therefore the area’s potential remains largely unexplored.
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The work carried out to date has successfully demonstrated high-grade near-surface Au mineralization and generated multiple targets for follow-up exploration.
The 2020–2021 drill program has intersected significant Au mineralization along the AFZ at the Keats and Lotto targets and demonstrated the presence of near-surface high-grade Au mineralization. Significant potential exists for the expansion of the known zones through diamond drilling, both along strike and down dip. Meanwhile, surface prospecting, trenching, till sampling and geophysical have continued to generate new targets for follow-up exploration through trenching and drill-testing.
The southern portion of the Queensway Project area has historically received little exploration work but has a similar geological and structural setting and is likely prospective for Au mineralization and should be a target for exploration.
The QPs consider the work undertaken at the Queensway Project to be of an acceptable standard. Data quality management systems are considered acceptable for an exploration project and the risk associated with data quality, for this purpose, is considered small. However, the QPs recommend several important areas of improvement to make the data more robust for eventual inclusion in high-confidence resource classifications. Data collected prior to 2018, before emplacement of New Found’s data quality management system, are considered fit-for-purpose for identifying exploration targets. For historical exploration data, data quality management is largely unknown, and these data are considered fit for the purpose of identifying exploration targets but not fit to support any mineral resource estimates.
5.14 | Recommendations |
Recommended Work Programs
The QPs recommend that future exploration focusses on drilling along the AFZ and JBPFZ. Additionally, both regional and targeted exploration work should be conducted following up on regional targets. This includes prospecting targets generated in the past three years and Au-in-till anomalies in Queensway South. Trenching, followed by diamond drilling, should be undertaken in the vicinity of known Au prospects and targets generated south of Gander Lake.
Exploration work recommended by the QPs is detailed below. The recommended work is separated into two phases. Programs undertaken in Phase 2 are contingent on results of Phase 1. Associated cost estimates are presented in Table 7 at the end of this section.
Phase 1
Geophysics
The QPs recommend several geophysics work programs.
· | Interpretation of the 3-D inversions of the 2020 HeliFALCON gravity survey data to generate new targets and better constrain the strike of major structures controlling the mineralization and the geometry of the vein systems. |
· | Interpretation of the Helitem2 EM data, collected in April 2021, to identify targets for follow-up field investigation. |
· | Comparison of the 2021 Helitem2 interpretation with previous EM and gravity interpretations to better define targets. |
· | Conducting a DCIP survey over the AFZ to better define structural character of Au mineralized zones. |
· | Conducting a 3-D seismic survey over both the AFZ and JBPFZ to better define the structural character. |
Surface Exploration
The QPs recommend several surface exploration programs.
· | Infill till sampling in areas of anomalous Au-in-till concentrations between Great Gull River and Eastern Pond. |
· | Trenching programs at Eastern Pond, Joe’s Feeder, Great Gull River, and Larsen’s Falls. |
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· | A trenching program for the Queensway South claims to re-expose known surface Au occurrences at Aztec, A-Zone, and Paul’s Pond (LBNL) and map their surface extensions. |
The QPs recommend undertaking a regional study on the direction of ice flows to aid interpretation of till samples.
Satellite Imagery, LiDAR, and Baseline Studies
The QPs recommend several desktop- and baseline studies:
· | Spectral analysis of alteration trends and lithology fom newly acquired satellite imagery (Pan, VNIR and SWIR high-resolution imagery including 50 cm ground RGB imagery). |
· | A LiDAR survey for Queensway to serve as a baseline for 3-D modelling and future engineering/environmental studies. |
· | Hydrology baseline and habitat studies for the Queensway Project. |
Drilling and Metallurgical
The QPs have several recommendations for future drilling programs.
· | Carry out step-out drill testing along strike from previous intersections at Keats to test down-plunge extension of mineralization and delineate the extent of the mineralized system. |
· | Carry out drill testing along strike from previous intersections at Lotto to better constrain the geometry of the mineralized structure and delineate the extent of the mineralized system. |
· | Continue exploration drilling along the AFZ and JBPFZ including the Little-Powerline, Knob, Road, Dome, Cokes, Golden Joint, TCH, H-Pond, Pocket Pond, Glass, 798 and 1744 prospects. |
· | Carry out structural and/or petrogenetic studies and detailed geological and structural modelling in tandem with drilling to better constrain structural controls of mineralization. |
· | Undertake preliminary metallurgical studies to better understand potential recovery factors and support a future mineral resource estimate. |
Analytical and DQMS
The QPs have several recommendations for improvements of analytical procedures and data quality management systems.
· | Investigate the benefits of photon assaying and/or cyanide leaching as a more cost-effective alternative to the screen fire assay. |
· | Collect first-split (core-split) and second-split (coarse-crush) duplicates to better understand the natural inherent variability of the mineralization. |
Phase 2
Contingent on results of Phase 1, the QPs have several recommendations for Phase 2 work programs.
· | Carry out a resource drill-out program at Keats with the aim of estimating and classifying an Inferred Mineral Resource. Complete the drill-out at a drilling orientation that is optimized to intersect the mineralization at right angles and at a drill spacing that is optimized for estimation. Submit full core samples to yield better sample support for a future mineral resource estimate. |
· | Complete a 100,000-m resource definition drill program for the targets for which results from Phase 1 warrant it. |
· | A 12,000-m diamond drilling program for Queensway South for targets of interest to test findings from trenching at depth and assess the scale of the systems. |
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2021 Exploration Costs
Global cost estimates for work planned in 2021 are presented in Table 7. The QP considers this budget to be in-keeping with the work program recommended above.
Phase | Item | Unit Costs | Estimated Cost (CAD) | ||||||||
1 | Geophysics | ||||||||||
Geophysical Interpretation | $ | 500,000 | |||||||||
Geological Modelling and Interpretation | $ | 800,000 | |||||||||
Satellite Imagery & Spectral Analysis | $ | 156,000 | |||||||||
DCIP Survey Queensway North | $ | 750,000 | |||||||||
3D Seismic Survey Queensway North | $ | 7,000,000 | |||||||||
Item Total | $ | 9,206,000 | |||||||||
1 | Surface Exploration | ||||||||||
Regional Prospecting/Geological Mapping | $ | 1,000,000 | |||||||||
Till Program | $ | 270,000 | |||||||||
Queensway South Trenching | $ | 350,000 | |||||||||
Item Total | $ | 1,620,000 | |||||||||
1 | Desktop and Baseline Studies | ||||||||||
LiDAR Survey Queensway North | $ | 132,000 | |||||||||
Environmental Registration Document | $ | 23,500 | |||||||||
Water Monitoring Program | $ | 209,000 | |||||||||
Biophysical | $ | 75,000 | |||||||||
Hydrological Study | $ | 54,000 | |||||||||
Habitat Studies | $ | 150,000 | |||||||||
Hydrology | $ | 300,000 | |||||||||
Socioeconomic Studies | $ | 100,000 | |||||||||
Item Total | $ | 1,043,500 | |||||||||
1 | Drilling and Metallurgy | ||||||||||
Exploration Diamond Drilling (175,000 m, HQ) | $ | 225.00 | $ | 39,375,000 | |||||||
Geotechnical Study | $ | 200,000 | |||||||||
Metallurgical Testing Program | $ | 250,000 | |||||||||
Item Total | $ | 39,825,000 | |||||||||
Phase 1 Total | $ | 51,694,500 | |||||||||
2 | Drilling and Metallurgy | ||||||||||
Exploration Drilling Program Queensway South (12,000 m, HQ) | $ | 225.00 | $ | 2,700,000 | |||||||
Resource Definition Drilling Queensway North (100,000 m, HQ) | $ | 225.00 | $ | 22,500,000 | |||||||
Item Total | $ | 25,200,000 | |||||||||
Phase 2 Total | $ | 25,200,000 | |||||||||
Grand Total | $ | 76,894,500 |
Table 7: Cost estimates for Recommended Exploration Program for the Queensway Project, 2021–2022
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6 | OTHER MINERAL PROJECTS |
The Company owns a 100% interest in the Lucky Strike Project in Kirkland Lake, Ontario, comprising 11,684 hectares, as well as a portfolio of mining and royalty interests throughout northeastern Ontario. The Company acquired the rights to the Lucky Strike Project by map staking mineral licenses and making staged payments in cash and Common Shares from 2016 through 2019 under two fully-executed option agreements.
On May 27, 2016, the Company optioned the primary Lucky Strike Project property from Ashley Gold Mines Ltd. (“Ashley Gold”) under a property option agreement, which was ultimately amended in May 2019, and fully exercised in November 2019. Under the terms of this agreement, the Company paid $115,000 and issued Common Shares equivalent to $80,000 to Ashley Gold. The option agreement included an underlying 1% NSR payable to Wallbridge Mining Company, which covers a small portion of the applicable claims, with most of the claims carrying no NSR.
On July 26, 2017, the Company optioned the Vallillee extension claims west of the primary Lucky Strike Project and this option agreement was fully executed July 2018. Under the terms of the agreement the Company paid $40,000 and issued a 2% NSR in favour of the optionors.
In April 2020, the Company staked an additional 70 unpatented mining cells on the west side of the Lucky Strike Project. These lands carry no NSR.
On May 7, 2020, the Company completed a claim purchase agreement with Eric Marion to purchase 21 unpatented mining claim cells adjacent to the east of the Lucky Strike Project. Under the terms of the agreement the Company paid $25,000. The claims carry no NSR.
For the purpose of NI 43-101, the Lucky Strike Project is not a material property of the Company.
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7 | DIVIDENDS AND DISTRIBUTIONS |
7.1 | Summary |
The Company has not, since the date of its incorporation, declared or paid any dividends or other distributions on its Common Shares, and does not currently have a policy with respect to the payment of dividends or other distributions. The Company does not currently pay dividends and does not intend to pay dividends in the foreseeable future. The declaration and payment of any dividends in the future is at the discretion of the Board and will depend on numerous factors, including compliance with applicable laws, financial performance, working capital requirements of the Company and its subsidiaries and such other factors as its directors consider appropriate. There can be no assurance that the Company will pay dividends under any circumstances. See “Risk Factors – Risks Related to the Company – Dividends”.
8 | DESCRIPTION OF CAPITAL STRUCTURE |
8.1 | Common Shares |
The Company’s authorized share capital consists of an unlimited number of common shares without par value (the “Common Shares”). As at December 31, 2020, there were 148,684,523 Common Shares issued and outstanding. As of the date of this AIF, there are 152,679,221 Common Shares issued and outstanding.
All of the Common Shares rank equally as to voting rights, participation in a distribution of the assets of the Company on a liquidation, dissolution or winding-up of the Company and entitlement to any dividends declared by the Company. The holders of the Common Shares are entitled to receive notice of, and to attend and vote at, all meetings of shareholders (other than meetings at which only holders of another class or series of shares are entitled to vote). Each Common Share carries the right to one vote. In the event of the liquidation, dissolution or winding-up of the Company, or any other distribution of the assets of the Company among its shareholders for the purpose of winding-up its affairs, the holders of the Common Shares will be entitled to receive, on a pro rata basis, all of the assets remaining after the payment by the Company of all of its liabilities. The holders of Common Shares are entitled to receive dividends as and when declared by the Board in respect of the Common Shares on a pro rata basis. The Common Shares do not have pre-emptive rights, conversion rights or exchange rights and are not subject to redemption, retraction purchase for cancellation or surrender provisions. There are no sinking or purchase fund provisions, no provisions permitting or restricting the issuance of additional securities or any other material restrictions, and there are no provisions which are capable of requiring a security holder to contribute additional capital.
Any alteration of the rights, privileges, restrictions and conditions attaching to the Common Shares under the Company’s Articles must be approved by at least two-thirds of the Common Shares voted at a meeting of the Company’s shareholders.
8.2 | Options |
New Found has a stock option plan (the “Plan”) pursuant to which the Board of Directors may grant stock options (the “Options”) to any director, senior officer, management company, employee or consultant of the Company (including any subsidiary of the Company), as the Board of Directors may determine, exercisable to acquire Common Shares up to a maximum of 10% of the issued and outstanding Common Shares at the time of grant. Every Option granted has a term not exceeding 10 years after the date of grant.
As at July 14, 2021, New Found had the following Options outstanding:
Exercise Price (C$ | ||||||||||||||
Common Shares Under | per Common | Vesting | ||||||||||||
Holder of Options | Options Granted | Share) | Grant Date | Conditions | Expiry Date | |||||||||
Executive and other | 150,000 | $ | 0.40 | October 1, 2018 | Fully vested | September 30, 2023 | ||||||||
officers of New Found, as a group (1) |
1,725,000 | $ | 0.50 | December 17, 2019 | Fully vested | December 17, 2024 | ||||||||
1,200,000 | $ | 1.00 | April 15, 2020 | Fully vested | April 15, 2025 |
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Exercise | ||||||||||||||
Price (C$ | ||||||||||||||
per | ||||||||||||||
Common Shares Under | Common | Vesting | ||||||||||||
Holder of Options | Options Granted | Share) | Grant Date | Conditions | Expiry Date | |||||||||
200,000 | $ | 1.075 | May 23, 2020 | Fully vested | May 23, 2025 | |||||||||
2,375,000 | $ | 1.40 | August 11, 2020 | Fully vested | August 11, 2025 | |||||||||
5,080,000 | $ | 4.10 | December 31, 2020 | Fully vested | December 31, 2025 | |||||||||
893,000 | $ | 6.79 | April 29, 2021 | Fully vested | April 29, 2026 | |||||||||
Total | 11,623,000 | |||||||||||||
Directors (who are | 200,000 | $ | 0.50 | December 17, 2019 | Fully vested | December 17, 2024 | ||||||||
not also executive
officers) of New |
200,000 | $ | 1.40 | August 11, 2020 | Fully vested | August 11, 2025 | ||||||||
Found, as a group (2) | 150,000 | $ | 4.10 | December 31, 2020 | Fully vested | December 31, 2025 | ||||||||
35,000 | $ | 6.79 | April 29, 2021 | Fully vested | April 29, 2026 | |||||||||
200,000 | $ | 8.62 | May 17, 2021(3) | Fully vested | May 17, 2026 | |||||||||
Total | 785,000 | |||||||||||||
Consultants of New
Found, as a group |
312,500 | $ | 0.50 | December 17, 2019 | Fully vested | December 17, 2024 | ||||||||
300,000 | $ | 1.00 | April 15, 2020 | Fully vested | April 15, 2025 | |||||||||
25,000 | $ | 1.075 | May 23, 2020 | Fully vested | May 23, 2025 | |||||||||
375,000 | $ | 1.40 | August 11, 2020 | Fully vested | August 11, 2025 | |||||||||
90,000 | $ | 2.07 | September 3, 2020 | Fully vested | September 3, 2025 | |||||||||
25,000 | $ | 2.15 | October 1, 2020 | Fully vested | October 1, 2025 | |||||||||
975,000 | $ | 4.10 | December 31, 2020 | Fully vested | December 31, 2025 | |||||||||
171,000 | $ | 6.79 | April 29, 2021 | Fully vested | April 29, 2026 | |||||||||
10% vest | ||||||||||||||
immediately | ||||||||||||||
15% every 6 | ||||||||||||||
months | ||||||||||||||
52,500 | $ | 6.79 | April 29, 2021 | thereafter | April 29, 2026 | |||||||||
Total | 2,326,000 | |||||||||||||
Any other person or | ||||||||||||||
company, other than | ||||||||||||||
the Agent | 49,000 | $ | 2.07 | September 3, 2020 | Fully vested | September 3, 2025 | ||||||||
10% vest | ||||||||||||||
immediately | ||||||||||||||
15% every 6 | ||||||||||||||
months | ||||||||||||||
214,250 | $ | 6.79 | April 29, 2021 | thereafter | April 29, 2026 | |||||||||
Total | 263,250 | |||||||||||||
TOTAL OPTIONS | 14,997,250 |
Notes:
(1) | Total of four persons, being Collin Kettell the Executive Chairman, Greg Matheson the Chief Operating Officer, Craig Roberts the Chief Executive Officer and Denis Laviolette the President. | |
(2) | Total of two persons, being Quinton Hennigh and Douglas Hurst. On May 11, 2021 Mr. John Anderson resigned from the Company as Director. |
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8.3 | Warrants |
As at July 14, 2021, there were 549,892 common share purchase warrants (“Warrants”) outstanding, comprised of: (i) 15,960 Finder Warrants entitling the holder thereof to acquire one Common Share at a price of $1.50 per common share until June 4, 2022; (ii) 24,380 Finder Warrants entitling the holder thereof to acquire one common share at a price of $1.50 per common share until May 13, 2022; (iii) 33,245 Finder Warrants entitling the holder thereof to acquire one common share at a price of $1.30 per common share until May 12, 2022; and (iv) 476,307 agents’ warrants issued in connection with the initial public offering entitling the holder thereof to acquire one common share at a price of $1.30 per common share until August 11, 2021.
The following table sets forth the aggregate number of warrants, outstanding as at July 14, 2021:
Exercise Price | ||||||||||||||
(C$ per | Market Value of | |||||||||||||
Number of | Common | Common Shares | ||||||||||||
Holder of Warrants | Warrants Held | Share) | Issue Date | Under Warrants(1) | Expiry Date | |||||||||
Executive and other | Nil. | N/A | N/A | N/A | N/A | |||||||||
officers of New Found, | ||||||||||||||
as a group | ||||||||||||||
Directors (who are not | Nil. | N/A | N/A | N/A | N/A | |||||||||
also executive officers) | ||||||||||||||
of New Found, as a | ||||||||||||||
group | ||||||||||||||
Consultants of New | Nil. | N/A | N/A | N/A | N/A | |||||||||
Found, as a group | ||||||||||||||
Any other person or | 15,960 | (2) | $ | 1.50 | June 4, 2020 | N/A | June 4, 2022 | |||||||
company, other than the
Agents |
24,380 | (3) | $ | 1.50 | May 13, 2020 | N/A | May 13, 2022 | |||||||
33,245 | (4) | $ | 1.30 | May 12, 2020 | N/A | May 12, 2022 | ||||||||
476,307 | (5) | $ | 1.30 | August 11, 2020 | N/A | August 11, 2021 | ||||||||
TOTAL | 549,892 |
Notes:
(1) | Market value of the Common Shares under warrants are not reasonably ascertainable on the grant date or another date given that the Common Shares are not and have never been publicly traded or listed. |
(2) | Finder Warrants issued in connection with 2020 Flow-Through Private Placements. |
(3) | Finder Warrants issued in connection with 2020 Flow-Through Private Placements. |
(4) | Finder Warrants issued in connection with 2020 Flow-Through Private Placements. |
(5) | Broker Warrants issued in connection with Company’s Initial Public Offering. |
9 | MARKET FOR SECURITIES |
9.1 | Trading Price and Volume |
New Found’s Common Shares are currently listed for trading through the facilities of the TSX Venture Exchange under the symbol “NFG” and on the OTC under the symbol “NFGFF”. No other securities of New Found are traded or quoted on any marketplace.
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During the period from August 11, 2020 until the date of this AIF, the Common Shares traded on the TSX Venture Exchange as follows based on information available from Bloomberg:
TSX VENTURE EXCHANGE | ||||||||||||
Month | Volume | High (Cnd$) | Low (Cnd$) | |||||||||
August 2020 | 18,520,969 | 2.01 | 1.24 | |||||||||
September 2020 | 9,288,028 | 2.56 | 1.85 | |||||||||
October 2020 | 13,142,070 | 4.50 | 2.15 | |||||||||
November 2020 | 6,905,260 | 4.90 | 3.60 | |||||||||
December 2020 | 10,831,311 | 4.74 | 3.52 | |||||||||
January 2021 | 4,453,432 | 4.40 | 3.16 | |||||||||
February 2021 | 4,284,132 | 3.84 | 3.15 | |||||||||
March 2021 | 6,789,083 | 5.25 | 3.53 | |||||||||
April, 2021 | 6,675,715 | 7.00 | 4.21 | |||||||||
May, 2021 | 8,281,966 | 12.48 | 6.80 | |||||||||
June, 2021 | 6,582,626 | 13.50 | 9.40 | |||||||||
July 1–15, 2021 | 1,616,341 | 12.47 | 9.79 |
9.2 | Prior Sales |
The following table summarizes the issuances of Common Shares and securities that are convertible or exchangeable into Common Shares as at July 14, 2021:
Issue Date |
Type of
Security |
Number Issued |
Issue Price | Exercise Price | Description of Issuance | |||||||||||
June 3, 2021 | Common Shares | 25,000 | $ | 0.50 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
June 1, 2021 | Common Shares | 2,000 | $ | 6.79 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
May 28, 2021 | Common Shares | 4,107 | $ | 1.30 | N/A | Issued pursuant to the exercise of 2020 Warrants | ||||||||||
May 27, 2021 | Common Shares | 85,000 | $ | 0.50 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
May 26, 2021 | Common Shares | 20,000 | $ | 2.07 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
May 20, 2021 | Common Shares | 25,000 | $ | 4.10 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
May 20, 2021 | Common Shares | 15,000 | $ | 1.40 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
May 20, 2021 | Common Shares | 100,000 | $ | 0.40 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
May 20, 2021 | Common Shares | 2,000 | $ | 2.07 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
May 17, 2021 | Options | 200,000 | N/A | $ | 8.62 | Options issued pursuant to the Stock Option Plan. Vesting contingent on receiving disinterested shareholder approval at the upcoming annual general meeting. If shareholder approval for the grant is not received, the options will be cancelled. | ||||||||||
May 17, 2021 | Common Shares | 5,000 | $ | 2.07 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan |
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Issue Date |
Type of
Security |
Number Issued |
Issue Price | Exercise Price | Description of Issuance | |||||||||||
May 14, 2021 | Common Shares | 6,250 | $ | 4.10 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
May 14, 2021 | Common Shares | 2,385 | $ | 1.50 | N/A | Issued pursuant to the exercise of 2020 Warrants | ||||||||||
May 6, 2021 | Common Shares | 10,000 | $ | 2.07 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
May 5, 2021 | Common Shares | 8,372 | $ | 1.50 | N/A | Issued pursuant to the exercise of 2020 Warrants | ||||||||||
May 5, 2021 | Common Shares | 1,154 | $ | 1.30 | N/A | Issued pursuant to the exercise of 2020 Warrants | ||||||||||
May 3, 2021 | Common Shares | 6,250 | $ | 4.10 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
April 22, 2021 | Common Shares | 10,000 | $ | 2.07 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
April 21, 2021 | Common Shares | 10,000 | $ | 2.07 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
April 21, 2021 | Common Shares | 125,000 | $ | 0.50 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
April 20, 2021 | Common Shares | 75,000 | $ | 0.15 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
April 8, 2021 | Common Shares | 2,857,000 | $ | 5.25 | N/A | Issued pursuant to 2021 Flow-Through Private Placement | ||||||||||
March 29, 2021 | Common Shares | 15,000 | $ | 2.07 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
March 17, 2021 | Common Shares | 1,268 | $ | 1.30 | N/A | Issued pursuant to the exercise of 2020 Warrants | ||||||||||
March 11, 2021 | Common Shares | 3,300 | $ | 1.50 | N/A | Issued pursuant to the exercise of 2020 Warrants | ||||||||||
March 5, 2021 | Common Shares | 7,500 | $ | 1.50 | N/A | Issued pursuant to the exercise of 2020 Warrants | ||||||||||
January 11, 2021 | Common Shares | 275,954 | $ | 1.30 | N/A | Issued pursuant to the exercise of 2020 Warrants | ||||||||||
January 6, 2021 | Common Shares | 3,808 | $ | 1.30 | N/A | Issued pursuant to the exercise of 2020 Warrants | ||||||||||
January 6, 2021 | Common Shares | 100,000 | $ | 0.50 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
December 31, 2020 | Options | 6,242,500 | N/A | $ | 4.10 | Options issued pursuant to the Stock Option Plan | ||||||||||
December 31, 2020 | Common Shares | 2,075,000 | $ | 1.40 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
December 31, 2020 | Common Shares | 1,395,000 | $ | 1.075 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
December 31, 2020 | Common Shares | 100,000 | $ | 1.00 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
December 31, 2020 | Common Shares | 1,135,000 | $ | 0.50 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan |
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Issue Date |
Type of
Security |
Number
Issued |
Issue Price | Exercise Price | Description of Issuance | |||||||||||
December 23, 2020 | Common Shares | 700,000 | $ | 1.00 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
December 16, 2020 | Common Shares | 100,000 | $ | 0.15 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
November 12, 2020 | Common Shares | 75,000 | $ | 0.15 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
November 2, 2020 | Common Shares | 2,385 | $ | 1.50 | N/A | Issued pursuant to the exercise of 2020 Warrants | ||||||||||
October 27, 2020 | Common Shares | 450,000 | $ | 0.50 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
October 13, 2020 | Common Shares | 50,000 | $ | 1.075 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
October 6, 2020 | Common Shares | 551,907 | $ | 1.30 | N/A | Issued pursuant to the exercise of 2020 Warrants | ||||||||||
October 1, 2020 | Options | 25,000 | N/A | $ | 2.15 | Options issued pursuant to the Stock Option Plan | ||||||||||
September 3, 2020 | Options | 215,000 | N/A | $ | 2.07 | Options issued pursuant to the Stock Option Plan | ||||||||||
August 27, 2020 | Common Shares | 50,000 | $ | 0.40 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
August 14, 2020 | Common Shares | 50,000 | $ | 0.40 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
August 13, 2020 | Broker Warrants | 188,999 | N/A | $ | 1.30 | Issued to the Agents’ in connection with the exercise of the over-allotment option grants to the Agents pursuant to the Company’s initial public offing. | ||||||||||
August 13, 2020 | Common Shares | 3,150,000 | $ | 1.30 | N/A | Issued pursuant to the exercise of the Agents’ overallotment option granted pursuant to the Company’s initial public offering. | ||||||||||
August 12, 2020 | Common Shares | 4,000,000 | $ | 0.75 | N/A | Issued pursuant to the exercise of 2019 Warrants | ||||||||||
August 11, 2020 | Options | 5,040,000 | N/A | $ | 1.40 | Options issued pursuant to the Stock Option Plan | ||||||||||
August 11, 2020 | Broker Warrants | 1,190,769 | N/A | $ | 1.30 | Issued to the Agents in connection with the Company’s initial public offering | ||||||||||
August 11, 2020 | Common Shares | 21,000,000 | $ | 1.30 | N/A | Issued pursuant the Company’s initial public offering | ||||||||||
July 21, 2020 | Common Shares | 12,000,000 | $ | 0.75 | N/A | Issued pursuant to the exercise of 2019 Warrants | ||||||||||
July 17, 2020 | Common Shares | 100,000 | $ | 0.15 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
June 30, 2020 | Common Shares | 1,000,000 | $ | 0.15 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
June 10, 2020 | Finder Warrant | 4,107 | N/A | $ | 1.30 | Finder Warrants issued to certain finders in connection with 2020 Flow-Through Private Placements |
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Issue Date |
Type of
Security |
Number
Issued |
Issue Price | Exercise Price | Description of Issuance | |||||||||||
June 10, 2020 | Common Shares | 68,462 | $ | 1.30 | N/A | Issued pursuant to 2020 Flow-Through Private Placements | ||||||||||
June 4, 2020 | Finder Warrant | 28,230 | N/A | $ | 1.50 | Finder Warrants issued to certain finders in connection with 2020 Flow-Through Private Placements | ||||||||||
June 4, 2020 | Common Shares | 1,227,753 | $ | 1.50 | N/A | Issued pursuant to 2020 Flow-Through Private Placements | ||||||||||
May 23, 2020 | Options | 1,670,000 | N/A | $ | 1.075 | Options issued pursuant to the Stock Option Plan | ||||||||||
May 22, 2020 | Common Shares | 85,000 | $ | 0.50 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
May 19, 2020 | Common Shares | 250,000 | $ | 0 50 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
May 14, 2020 | Common Shares | 580,000 | $ | 0.15 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
May 13, 2020 | Finder Warrant | 36,052 | N/A | $ | 1.50 | Finder Warrants issued to certain finders in connection with 2020 Flow-Through Private Placements | ||||||||||
May 13, 2020 | Common Shares | 2,766,844 | $ | 1.50 | N/A | Issued pursuant to first tranche of 2020 Flow-Through Private Placements | ||||||||||
May 12, 2020 | Finder Warrant | 39,475 | N/A | $ | 1.30 | Finder Warrants issued to certain finders pursuant to 2020 Flow-Through Private Placements | ||||||||||
May 12, 2020 | Common Shares | 797,923 | $ | 1.30 | N/A | Issued pursuant to 2020 Flow-Through Private Placements | ||||||||||
April 29, 2020 | Common Shares | 200,000 | $ | 0.50 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
April 13, 2020 | Common Shares | 800,000 | $ | 0.50 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
April 15, 2020 | Options | 2,300,000 | N/A | $ | 1.00 | Options issued pursuant to the Stock Option Plan | ||||||||||
March 6, 2020 | Common Shares | 15,000,000 | $ | 1.12 | N/A | Issued pursuant to Novo Transaction |
10 | ESCROWED SECURITIES |
10.1 | Summary |
In connection with the initial public offering of the Company’s Common Shares, Palisade Goldcorp Ltd, Novo Resources Corp., 2176423 Ontario Inc. (a corporation controlled by Eric Sprott), Collin Kettell, Denis Laviolette and Craig Roberts (collectively, the “Principals”), entered into an escrow agreement (the “Escrow Agreement”) with Computershare Trust Company of Canada, as escrow agent (the “Escrow Agent”), pursuant to which the Principals deposited 90,199,500 Common Shares into escrow (the “Escrowed Securities”) with the Escrow Agent, representing approximately 63% of the issued and outstanding Common Shares as at December 31, 2020.
The following table sets forth, as of as at December 31, 2020, the number of securities of each class of securities of the Company held, to the knowledge of the Company, in escrow or that are subject to a contractual restriction on transfer and the percentage that number represents of the outstanding securities of that class.
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Designation of Class | Number of Securities | Percentage of Class | ||||||
Common Shares | 83,470,050 | 56 | % |
In accordance with NP 46-201, the Escrowed Securities will be subject to a three-year escrow and subject to the following release scheduled:
Date | Amount of Escrowed Securities Released | |
On the August 11, 2020 (the “Listing Date”) | 1/10th of the Escrowed Securities | |
6 months after the Listing Date | 1/6th of the remaining Escrowed Securities | |
12 months after the Listing Date | 1/5th of the remaining Escrowed Securities | |
18 months after the Listing Date | 1/4th of the remaining Escrowed Securities | |
24 months after the Listing Date | 1/3rd of the remaining Escrowed Securities | |
30 months after the Listing Date | 1/2 of the remaining Escrowed Securities | |
36 months after the Listing Date | the remaining Escrowed Securities |
Additionally, securities of New Found may be subject to additional escrow restrictions and restrictions on transfer pursuant to NP 46-201, or if required by the TSXV (in accordance with TSXV Policy 5.4) or other applicable regulations of any other stock exchange on which the securities of New Found may be listed for trading in the future.
11 | DIRECTORS AND OFFICERS |
11.1 | Name, Occupation and Security Holding |
The name, municipality of residence, positions held with the Company, and principal occupation within the five preceding years as at July 14, 2021 of each director and executive officer of New Found are as follows:
Number and | ||||||||
Percentage of | ||||||||
Position(s) and Office(s) | Principal Occupation(s) During | Common | ||||||
Name and Residence | with New Found | Past Five Years | Director Since | Shares Held | ||||
COLLIN KETTELL, Puerto Rico, United States |
Executive Chairman and Director | Executive Chairman (since March 2020) and former CEO (2016 - 2020), New Found; CEO, Nevada King Gold Corp. (formerly Victory Metals Ltd.), since January 2019; Executive Chairman, Palisades Goldcorp Ltd., since August 2019; former CEO, Palisade Global Investments Ltd. Majority of the foregoing companies are mineral exploration and development companies. | January 21, 2016 |
5,155,000(1) (3.38%) |
||||
CRAIG ROBERTS(7), British Columbia, Canada |
Chief Executive Officer and Director | CEO and Director, New Found, since March 2020 and December 2019, respectively; Chairman and Director (formerly CEO), Ethos Gold Corp., since 2018; Director, Nevada King Gold Corp. (formerly Victory Metals Ltd.); Chief Technical Officer, Palisades Goldcorp Ltd., since 2020; Director, K2 Gold Corporation, since 2016; | December 17, 2019 |
2,200,000(2) (1.44%) |
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Number and | ||||||||
Percentage of | ||||||||
Position(s) and Office(s) | Principal Occupation(s) During | Common | ||||||
Name and Residence | with New Found | Past Five Years | Director Since | Shares Held | ||||
Director, Global Battery Metals Ltd., since 2016. Majority of the foregoing companies are mineral exploration and development companies. | ||||||||
DENIS LAVIOLETTE, Ontario, Canada |
President and Director | President and Director. New Found, since 2016; Executive Chairman, Goldspot Discoveries Inc. since 2016. The foregoing companies are mineral exploration and development companies. | January 21, 2016 |
2,625,000(3) (1.72%) |
||||
GREG MATHESON, Ontario, Canada |
Chief Operating Officer | COO, New Found, since 2019; former Manager of Exploration, Northern Gold Mining Inc., former Senior Project Manager, Oban Mining Corp. All of the foregoing companies are mineral exploration and development companies. | - | Nil(4) | ||||
MICHAEL KANEVSKY, British Columbia, Canada |
Chief Financial Officer |
CFO, New Found, since 2019; CFO, Mexican Gold Mining Corp; CFO, Palisades Goldcorp Ltd. Majority of the foregoing companies are mineral exploration and development companies. |
- | Nil | ||||
DR. QUINTON HENNIGH(7) Colorado, United States |
Director |
President and Chairman, Novo Resources Corp., since 2009, Director, New Found, since 2020; Director, Irving Resources Inc., since 2015; Director, Kuya Silver Corporation (formerly Miramont Resources Corp.), since 2017; Director, Precipitate Gold Corp since 2010; Director, Condor Resources Inc., since 2020; Director, Tristar Gold Inc., since 2015. All of the foregoing companies are involved in one or all of: mineral exploration, development, production and the capital markets. |
June 17, 2020 |
115,300(5) (0.09%) |
||||
DOUGLAS HURST(7) British Columbia, Canada |
Director | Director, New Found, since May 2021; Chairman, Northern Vertex Mining Corp. since February 2021; Director, Calibre Mining Corp., since 2017; Director, Newcore Gold Ltd., since 2017; former Director, Northern Empire Resources Corp., 2015 – 2018; former Director, Kirkland Lake Gold Ltd., 2013 – 2016. All of the foregoing companies are mineral exploration and development companies or mineral production companies. | May 11, 2021 |
93,023(6) (0.06%) |
Notes:
(1) | Mr. Kettell is the principal securityholder of Palisades Goldcorp Ltd., which directly holds the 46,566,425 Common Shares of the Company (or 30.50% of the issued and outstanding Common Shares) as at July 14, 2021. As at July 14, 2021, Mr. Kettell also holds 4,541,000 Options, entitling him to acquire an additional 4,541,000 Common Shares. |
(2) | As at July 14, 2021, Mr. Roberts also holds 3,436,000 Options, entitling him to acquire an additional 3,436,000 Common Shares. |
(3) | As at July 14, 2021, Mr. Laviolette also holds 3,011,000 Options, entitling him to acquire an additional 3,011,000 Common Shares. |
(4) | As at July 14, 2021, Mr. Matheson also holds 635,000 Options, entitling him to acquire an additional 635,000 Common Shares. |
(5) | As at July 14, 2021, Dr. Quinton Hennigh also held 585,000 Options, entitling him to acquire an additional 585,000 Common Shares. |
(6) | As at July 14, 2021, Mr. Hurst also holds 200,000 Options, entitling him to acquire an additional 200,000 Common Shares, subject to shareholder approval. |
(7) | Member of the Audit Committee. Mr. Hurst is the Chairman of this committee. |
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11.2 | Directors’ Terms of Office |
The term of office for each director of New Found expires at the next annual general meeting of shareholders of the Company.
The members of Board committees are appointed by the Board of Directors as soon as possible following each annual general meeting of shareholders of the Company.
The officers of New Found are appointed by the Board of Directors and hold office for such period and on such terms as the Board of Directors may determine.
11.3 | Committees of the Board of Directors |
The committees of the Board of Directors of New Found and the directors serving on each of the committees are described below:
11.4 | Audit Committee |
11.4.1 | Overview |
The Company has formed an Audit Committee comprised of Douglas Hurst (Chair), Dr. Quinton Hennigh and Denis Laviolette, all of whom are “financially literate” as defined in National Instrument 52-110 – Audit Committees (“NI 52-110”). Mr. Hurst and Dr. Hennigh are considered “independent” and Mr. Laviolette, as President of the Company, is not considered “independent”, pursuant to NI 52-110.
The Audit Committee provides assistance to the Board in fulfilling its obligations relating to the integrity of the internal financial controls and financial reporting of the Company. The external auditors of the Company report directly to the Audit Committee. The Audit Committee’s primary duties and responsibilities include: (i) reviewing and reporting to the Board on the annual audited financial statements (including the auditor’s report thereon) and unaudited interim financial statements and any related management’s discussion and analysis, if any, and other financial disclosure related thereto that may be required to be reviewed by the Audit Committee pursuant to applicable legal and regulatory requirements; (ii) reviewing material changes in accounting policies and significant changes in accounting practices and their impact on the financial statements; (iii) overseeing the audit function, including engaging in required discussions with the Company’s external auditor and reviewing a summary of the annual audit plan at least annually, overseeing the independence of the Company’s external auditor, overseeing the Company’s internal auditor, and pre-approving any non-audit services to the Company; (iv) reviewing and discussing with management the appointment of key financial executives and recommending qualified candidates to the Board; (v) reviewing with management and the Company’s external auditors, at least annually, the integrity of the internal controls over financial reporting and disclosure; (vi) reviewing management reports related to legal or compliance matters that may have a material impact on the Company and the effectiveness of the Company’s compliance policies; and (vii) establishing whistleblowing procedures and investigating any complaints or concerns it deems necessary.
98
The full text of the Audit Committee Charter is attached to this AIF as Schedule “A”.
11.4.2 | Relevant Education and Experience |
Each member of the Audit Committee has adequate education and experience that is relevant to their performance as an Audit Committee member and, in particular, the requisite education and experience that have provided the member with:
(a) | an understanding of the accounting principles used by the Company to prepare its financial statements and the ability to assess the general application of those principles in connection with estimates, accruals and reserves; |
(b) | experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements or experience actively supervising individuals engaged in such activities; and |
(c) | an understanding of internal controls and procedures for financial reporting. |
Douglas Hurst
Mr. Hurst has over 30 years of experience in the mining and natural resource industries having acted as geologist, consultant, mining analyst, senior executive and board member. Mr. Hurst was previously a mining analyst with McDermid St. Lawrence Securities Ltd. and Sprott Securities Inc. and a contract analyst to Pacific International Securities Inc. and Octagon Capital Corporation. He was a founding executive of International Royalty Corporation, which was purchased by Royal Gold, Inc. for $700 million. Recently, Mr. Hurst was one of the founders of Newmarket Gold Inc., which was purchased for approximately $1 billion by Kirkland Lake Gold Ltd in November 2016. Mr. Hurst holds a Bachelor of Science in Geology from McMaster University (1986). Based on his experience, Mr. Hurst has an understanding of financial reporting requirements respecting financial statements sufficient enough to enable him to discharge his duties as an Audit Committee member.
Dr. Quinton Hennigh
Dr. Quinton Hennigh is an economic geologist with more than 25 years of exploration experience with major gold mining firms. Dr. Hennigh has various experience with budgeting, economic assessments, and financial reporting through roles at various publicly traded companies. Dr. Hennigh is familiar with managing junior mining companies, including financing and compliance with reporting requirements. Based on his experience, Dr. Hennigh has an understanding of financial reporting requirements respecting financial statements sufficient enough to enable him to discharge his duties as an Audit Committee member.
Denis Laviolette
Mr. Laviolette is an intermediate level mining and exploration professional with approximately 10 years of experience in exploration, advanced mine operations, start-up mine management, QA/QC, grass roots exploration, financing and acquisitions, working in Northern Ontario (Timmins, Kirkland Lake and Red Lake), Norway and Ghana. Mr. Laviolette received his B.Sc., Earth Science (Geology) from Brock University, in St. Catharines, Ontario. He is currently employed as Vice President for Palisade Global Investments. His responsibilities at Palisade Global Investments include market/portfolio analysis, reviewing and vetting assets from a technical perspective and providing valuation estimates, analyzing and summarizing technical reports on resources, feasibility and corporate financial statements.
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11.4.3 | Pre-Approval Policies and Procedures |
The Audit Committee mandate requires that the Audit Committee pre-approve any retainer of the auditor of the Company to perform any non-audit services to the Company that it deems advisable in accordance with applicable legal and regulatory requirements and policies and procedures of the Board. The Audit Committee is permitted to delegate pre-approval authority to one of its members; however, the decision of any member of the Audit Committee to whom such authority has been delegated must be presented to the full Audit Committee at its next scheduled meeting.
11.4.4 | Reliance on Certain Exemptions |
The Company has relied upon the exemption provided by section 6.1 of NI 52-110, pursuant to which the Company is not required to comply with Part 3 (Composition of the Audit Committee) and Part 5 (Reporting Obligations) of NI 52-110.
11.4.5 | External Auditor Service Fees by Category |
The fees billed by the Company’s external auditors in each of the last two fiscal years for audit and non-audit related services provided to the Company or its subsidiaries (if any) were as follows:
Financial Year Ending | Audit Fees | Audit Related Fees(1) | Tax Fees(2) | All Other Fees(3) | ||||||||||||
December 31, 2020 | $ | 170,000 | $ | 42,800 | $ | Nil | $ | Nil | ||||||||
December 31, 2019 | $ | 15,000 | $ | Nil | $ | Nil | $ | Nil |
Notes:
(1) | Fees charged for assurance and related services that are reasonably related to the performance of an audit, and not included under Audit Fees. |
(2) | Fees charged for tax compliance, tax advice and tax planning services. |
(3) | Fees for services other than disclosed in any other column. |
On October 9, 2020, New Found appointed Deloitte LLP as the auditor of the Company. At the request of the Company, DNTW Toronto LLP resigned as the auditor of the Company. There were no reservations in DNTW Toronto LLP’s audit reports for the fiscal year ended December 31, 2019 and there are no reportable events, as such term is defined in National Instrument 51-102, between New Found and DNTW Toronto LLP. New Found filed the required reporting package in accordance with National Instrument 51-102 on October 14, 2020.
On October 28, 2020, New Found appointed Crowe MacKay LLP as the auditor of the Company. At the request of the Company, Deloitte LLP resigned as the auditor of the Company. There were no reportable events, as such term is defined in National Instrument 51-102, between New Found and Deloitte LLP. New Found filed the required reporting package in accordance with National Instrument 51-102 on November 10, 2020.
11.5 | Nominating and Corporate Governance Committee |
The Company has formed a nominating and corporate governance committee (the “Nominating and Corporate Governance Committee”) comprised of Craig Roberts (Chair), Collin Kettell and Douglas Hurst. Mr. Hurst is considered “independent” and Craig Roberts, as Chief Executive Officer, and Collin Kettell, as Executive Chairman, are not considered “independent”, pursuant to NI 52-110. In consultation with the Board, the Nominating and Corporate Governance Committee identifies and recommends to the Board potential nominees for election or re-election to the Board as well as individual directors to serve as members and chairs of each committee. The Nominating and Corporate Governance Committee establishes and reviews with the Board the appropriate skills and characteristics required of members of the Board, taking into consideration the Board’s short-term needs and long-term succession plans. In addition, the Nominating and Corporate Governance Committee develops, and annually updates, a long-term plan for the Board’s composition, taking into consideration the characteristics of independence, age, skills, experience and availability of service to the Company of its members, as well as opportunities, risks, and strategic direction of the Company.
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11.6 | Compensation Committee |
The Company has formed a Compensation Committee comprised of Collin Kettell (Chair), Douglas Hurst and Craig Roberts. Douglas Hurst is considered “independent” and Collin Kettell, as Executive Chairman, and Craig Roberts, as Chief Executive Officer, are not considered “independent”, pursuant to NI 52-110.
Each member of the Compensation Committee has business and other experience which is relevant to their position as a member of the Compensation Committee. By virtue of their differing professional backgrounds, business experience, knowledge of the Company’s industry, knowledge of corporate governance practices and, where appropriate, service on compensation committees of other reporting issuers and experience interacting with external consultants and advisors, the members of the Compensation Committee are able to make decisions on the suitability of the Company’s compensation policies and practices.
The charter of the Compensation Committee provides that it is responsible for, among other things, the following matters:
· reviewing and approving corporate goals and objectives relevant to the compensation of the CEO and other executive officers, evaluating the performance of the CEO and the other executive officers in light of those goals and objectives and approving their annual compensation levels, including salaries, bonuses, and stock option grants based on such evaluation; and
· reviewing the compensation of directors for service on the Board and its committees and recommending to the Board the annual Board member compensation package, including retainer, committee member and chair retainers, Board and committee meeting attendance fees and any other form of compensation, such as stock option grants or stock awards.
While the Board is ultimately responsible for determining all forms of compensation to be awarded to the CEO, other executive officers and directors, the Compensation Committee will when appropriate review the Company’s compensation philosophy, policies, plans and guidelines and recommend any changes to the Board.
11.7 | Cease Trade Orders, Bankruptcies, Penalties or Sanctions |
To the knowledge of the Company, none of the Company’s directors or executive officers is, as of the date of this AIF, or was within 10 years before the date of this AIF, a director, chief executive officer or chief financial officer of any company (including the Company) that (a) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant issuer access to any exemption under securities legislation, that was in effect for a period or more than 30 consecutive days (an “Order”) that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer of such issuer, or (b) was subject to an Order that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.
None of the Company’s directors or executive officers, nor, to its knowledge, any shareholder holding a sufficient number of its securities to affect materially the control of the Company (a) is, as at the date of this AIF, or has been within the 10 years before the date of this AIF, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, or (b) has, within the 10 years before the date of this AIF, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of such director, executive officer or shareholder.
None of the Company’s directors or executive officers, nor, to its knowledge, any shareholder holding a sufficient number of its securities to affect materially the control of the Company, has been subject to (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.
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11.8 | Conflicts of Interest |
To the best of the Company’s knowledge, there are no existing or potential material conflicts of interest between the Company and any of its directors or officers as of the date hereof. However, certain of the Company’s directors and officers are, or may become, directors or officers of other companies with businesses which may conflict with its business. Accordingly, conflicts of interest may arise which could influence these individuals in evaluating possible acquisitions or in generally acting on the Company’s behalf. See also “Risk Factors – Conflicts of Interest”.
Pursuant to the BCBCA, directors and officers of the Company are required to act honestly and in good faith with a view to the best interests of the Company.
Generally, as a matter of practice, directors who have disclosed a material interest in any contract or transaction that the Board is considering will not take part in any Board discussion respecting that contract or transaction. If on occasion such directors do participate in the discussions, they will refrain from voting on any matters relating to matters in which they have disclosed a material interest. In appropriate cases, the Company will establish a special committee of independent directors to review a matter in which directors or officers may have a conflict.
12 | LEGAL PROCEEDINGS AND REGULATORY ACTIONS |
Other than described below, to the Company’s knowledge, there are no legal proceedings or regulatory actions material to the Company to which it is a party, or has been a party to, or of which any of its property is the subject matter of, or was the subject matter of, since the beginning of the financial year ended December 31, 2020, and no such proceedings or actions are known by the Company to be contemplated.
On March 10, 2020, ThreeD Capital Inc (“ThreeD”) and 1313366 Ontario Inc. (“131” and together with ThreeD, the “Claimants”) filed a statement of claim in the Ontario Superior Court of Justice against Collin Kettell, Palisades Goldcorp Ltd. (“Palisades”) and the Company (the “ThreeD Claim”). Pursuant to the ThreeD Claim, the Claimants are challenging the validity of the sale of 17,500,000 Common Shares by the Claimants to Palisades Goldcorp. Ltd. on November 20, 2019.
On November 15, 2019, ThreeD and 131 each entered into share purchase agreements with Palisades (the “Share Purchase Agreements”) under which Palisades agreed to purchase the 13,500,000 Common Shares owned by ThreeD and the 4,000,000 Common Shares owned by 131 for $0.08 per Common Share. The transactions closed on November 20, 2019. As a private company with restrictions on the transfer of its Common Shares, the Company had to approve the proposed transfer, which it did by a consent resolution of the Board.
ThreeD and 131 claim that at the time of negotiation and execution of the Share Purchase Agreements, Palisades and Mr. Kettell were aware of positive drill results from the Company’s 2019 Drill Program and the results were not disclosed to ThreeD and 131 to their detriment. Palisades and Mr. Kettell strongly deny ThreeD and 131’s allegations. ThreeD and 131 have made specific claims for (a) recission of the Share Purchase Agreements on the basis of oppression or unfair prejudice; (b) or alternatively, damages in the amount of $21,000,000 for the alleged improper actions by ThreeD and 131, (c) a declaration that Palisades and Collin Kettell, as shareholder or director and/or officer of the Company, have had acted in a manner that is oppressive, unfairly prejudicial or unfairly disregarded their interests, (d) a declaration that Palisades and Collin Kettell engaged in insider trading contrary to section 138 of the Securities Act (Ontario), (e) unjust enrichment and (f) interests and costs. Palisades and Mr. Kettell refute each of the specific claims made by the Claimants.
The Company filed a statement of defence in response to the ThreeD Claim on June 12, 2020, pursuant to which, among other things, the Company denies that it is a proper party to the ThreeD Claim and the allegations against it therein, including because no relief is claimed against the Company in paragraph 1 of the ThreeD Claim.
The action has now progressed through the production of documents and oral examinations for discovery stages.
On July 12, 2021, the Plaintiffs asked the Company to consent to amendments to the statement of claim under which the plaintiffs broaden their claims to include direct claims of oppressive conduct on the Company’s part, and to increase the damages sought against all of the parties, including the Company, to $229,000,000. The Company is currently considering whether to agree to the amendments. The Company continues to deny any and all liability to the Plaintiffs.
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There have been no penalties or sanctions imposed against the Company by a court or regulatory authority, and the Company has not entered into any settlement agreements before any court relating to provincial or territorial securities legislation or with any securities regulatory authority, since its incorporation.
13 | INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS |
Except as disclosed in this AIF, to the knowledge of the Company, no director or executive officer, or person or company that beneficially owns, or controls and directs, directly or indirectly, more than 10 percent of the any class or series of the voting securities of the Company, or any associate or affiliate of the foregoing, have had any material interest, direct or indirect, in any transaction within the three most recently completed financial years or during the current financial year prior to the date of this AIF that has materially affected or is reasonably expected to materially affect the Company.
Certain directors and/or executive officers have been granted stock options of the Company, and has received consulting fees for services provided to New Found.
14 | TRANSFER AGENT AND REGISTRAR |
New Found’s transfer agent and registrar is Computershare Investor Services Inc. at its principal office in Vancouver, British Columbia.
15 | MATERIAL CONTRACTS |
Except for material contracts entered into in the ordinary course of business, set out below are material contracts to which New Found or any of its subsidiaries are a party to or entered into for the fiscal period ended December 31, 2020 or the date of this AIF:
(1) | the Agency Agreement between New Found and Canaccord Genuity Corp., BMO Nesbitt Burns Inc. and Desjardins Securities Inc., dated July 31, 2020 (the “Agency Agreement”); and |
(2) | the Stock Option Plan. |
The Agency Agreement
The Company entered into the Agency Agreement on July 31, 2020 in connection with its initial public offering in Canada and listing on the TSXV. On August 11, 2020, New Found completed its initial public offering of an aggregate of 21,000,000 Common Shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 14, 2020, the Agents exercised their overallotment option in full to offer and sell an additional 3,150,000 Common Shares for gross proceeds of $4,095,000. New Found paid agents’ fees of $1,793,700 in cash and issued 1,379,768 agents’ warrants exercisable into Common Shares at $1.30 for 12 months from the date of issue in connection with the initial public offering.
The Stock Option Plan
See “Description of Capital Structure – Options” for a summary of the key terms of the Stock Option Plan.
Outside of the above, New Found is not aware of any material contracts of the Company that were entered into (a) within the last financial year and up to the date of this AIF, or (b) before the last financial year but still in effect, and that is required to be filed under Part 12 of NI 51-102 or that would be required to be filed under 51-102 but for the fact that it was previously filed.
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16 | INTERESTS OF EXPERTS |
Information of a scientific or technical nature in respect of the Queensway Project is included in this AIF based upon the Technical Report, with an effective date of May 27, 2021, prepared by René Sterk, M.Sc., MAIG (RPGeo) FAusIMM CP(Geo) MSEG of RSC Consulting Limited and Stefan Kruse, PhD., P.Geo., (APEGNB, PEGNL, EGBC) of Terrane Geoscience Inc. who are each an independent Qualified Person under NI 43-101.
To the best of the Company’s knowledge, after reasonable inquiry, as of the date hereof, the aforementioned individuals and their firms do not beneficially own, directly or indirectly, any Common Shares.
Crowe MacKay LLP, the auditor of the Company’s audited financial statements for the years ended December 31, 2020 and 2019, has advised the Company that it is independent of the Company in accordance with the Code of Professional Conduct of the Chartered Professional Accountants of Ontario.
17 | ADDITIONAL INFORMATION |
Additional information relating to New Found may be found on New Found’s website https://newfoundgold.ca/ or under New Found’s profile on SEDAR at www.sedar.com.
Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of New Found’s securities and securities authorized for issuance under equity compensation plans, is contained in New Found’s Final Long Form Prospectus dated July 31, 2020. Additional financial information in relation to New Found is provided in the Company’s audited financial statements and management’s discussion and analysis for the years ended December 31, 2020 and 2019.
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SCHEDULE “A”
CHARTER OF THE AUDIT COMMITTEE OF NEW FOUND GOLD CORP.
1. | ROLE AND OBJECTIVE |
The Audit Committee (the “Committee”) is appointed by and reports to the Board of Directors (the “Board”) of New Found Gold Corp. (the “Corporation”). The Committee assists the Board in fulfilling its oversight responsibilities relating to financial accounting and reporting process and internal controls for the Corporation.
The Committee and its membership shall to the best of its ability, knowledge and acting reasonably, meet all applicable legal, regulatory and listing requirements, including, without limitation, those of any stock exchange on which the Corporation’s shares are listed, the Business Corporations Act (British Columbia) (the “Act”), and all applicable securities regulatory authorities.
2. | COMPOSITION |
● | The Committee shall be composed of three or more directors as shall be designated by the Board from time to time. |
● | At least two members of the Committee shall be “independent” and each Committee member shall be financially literate (as such terms are defined under applicable securities laws and exchange requirements for audit committee purposes). Each member of the Committee shall be able to read and understand the Corporation’s financial statements, including the Corporation’s statement of financial position, income statement and cash flow statement and any other applicable statements or notes to the financial statements. |
● | Members of the Committee shall be appointed at a meeting of the Board, typically held following the annual shareholders’ meeting. Each member shall serve until his/her successor is appointed unless he/she shall resign or be removed by the Board or he/she shall otherwise cease to be a director of the Corporation. Any member may be removed or replaced at any time by the Board. |
● | Where a vacancy occurs at any time in the membership of the Committee, it may be filled by a vote of a majority of the Board. |
● | The Chair of the Committee may be designated by the Board or, if it does not do so, the members of the Committee may elect a chair by vote of a majority of the full Committee membership. The Chair of the Committee shall be an independent director (as described above). |
● | If the Chair of the Committee is not present at any meeting of the Committee, one of the other members of the Committee present at the meeting shall be chosen by the Committee to preside. |
● | The Chair of the Committee presiding at any meeting shall not have a casting vote. |
● | The Committee shall appoint a secretary (the “Secretary”) who need not be a member of the Committee or a director of the Corporation. The Secretary shall keep minutes of the meetings of the Committee. This role is normally filled by the Secretary of the Corporation. |
3. | MEETINGS |
● | The Committee shall meet at least quarterly, at the discretion of the Chair or a majority of its members, as circumstances dictate or as may be required by applicable legal or listing requirements, provided that meetings of the Committee shall be convened whenever requested by the auditor that is appointed by the shareholders (the “Independent Auditor”) or any member of the Committee in accordance with the Act. |
● | Notice of the time and place of every meeting may be given orally, in writing, by facsimile or by e-mail to each member of the Committee, when possible at least 48 hours prior to the time fixed for such meeting. |
● | A member may in any manner waive notice of the meeting. Attendance of a member at the meeting shall constitute waiver of notice of the meeting, except where a member attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting was not lawfully called. |
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● | Any member of the Committee may participate in the meeting of the Committee by means of conference telephone or other communication equipment, and the member participating in a meeting pursuant to this paragraph shall be deemed, for purposes hereof, to be present in person at the meeting. |
● | A majority of Committee members, present in person, by video-conference, by telephone or by a combination thereof, shall constitute a quorum. |
● | If within one hour of the time appointed for a meeting of the Committee, a quorum is not present, the meeting shall stand adjourned to the same hour on the next business day following the date of such meeting at the same place. If at the adjourned meeting a quorum as hereinbefore specified is not present within one hour of the time appointed for such adjourned meeting, such meeting shall stand adjourned to the same hour on the next business day following the date of such meeting at the same place. If at the second adjourned meeting a quorum as hereinbefore specified is not present, the quorum for the adjourned meeting shall consist of the members then present. |
● | If and whenever a vacancy shall exist, the remaining members of the Committee may exercise all of its powers and responsibilities so long as a quorum remains on the Committee. |
● | At all meetings of the Committee, every question shall be decided by a majority of the votes cast. In case of an equality of votes, the matter will be referred to the Board for decision. Any decision or determination of the Committee reduced to writing and signed by all of the members of the Committee shall be fully effective as if it had been made at a meeting duly called and held. |
● | The CEO and CFO are expected to be available to attend meetings when requested, but a portion of every meeting will be reserved for in camera discussion without the CEO or CFO, or any other member of management, being present. |
● | The Committee may by specific invitation have other resource persons in attendance such officers, directors and employees of the Corporation and its subsidiaries, and other persons, including the Independent Auditor, as it may see fit, from time to time, to attend at meetings of the Committee. |
● | The Board may at any time amend or rescind any of the provisions hereof, or cancel them entirely, with or without substitution. |
● | The Committee shall have the right to determine who shall and who shall not be present at any time during a meeting of the Committee. |
● | Minutes of Committee meetings shall be sent to all Committee members. |
● | The Chair of the Committee shall report periodically the Committee’s findings and recommendations to the Board. |
4. | RESOURCES AND AUTHORITY |
● | The Committee shall have access to such officers and employees of the Corporation and its subsidiaries and to such information with respect to the Corporation and its subsidiaries as it considers being necessary or advisable in order to perform its duties and responsibilities. |
● | The Committee shall have the authority to engage and obtain advice and assistance from internal or external legal, accounting or other advisors and resources, as it deems advisable, at the expense of the Corporation. |
● | The Committee shall have the authority to communicate directly with the Independent Auditor. |
5. | RESPONSIBILITIES |
(a) | Chair |
To carry out its oversight responsibilities, the Chair of the Committee shall undertake the following:
● | provide leadership to the Committee with respect to its functions as described in this Charter and as otherwise may be appropriate, including overseeing the logistics of the operations of the Committee; |
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● | chair meetings of the Committee, unless not present (including in camera sessions), and report to the Board following each meeting of the Committee on the findings, activities and any recommendations of the Committee; |
● | ensure that the Committee meets on a regular basis and at least four times per year; |
● | in consultation with the Committee members, establish a calendar for holding meetings of the Committee; |
● | ensure that Committee materials are available to any director on request; |
● | report annually to the Board on the role of the Committee and the effectiveness of the Committee in contributing to the objectives and responsibilities of the Board as a whole; |
● | foster ethical and responsible decision making by the Committee and its individual members; |
● | encourage Committee members to ask questions and express viewpoints during meetings; |
● | together with the Corporate Governance and Nominating Committee, oversee the structure, composition, membership and activities delegated to the Committee from time to time; |
● | ensure that resources and expertise are available to the Committee so that it may conduct its work effectively and efficiently; |
● | attend each meeting of shareholders to respond to any questions from shareholders as may be put to the Chair; and |
● | perform such other duties and responsibilities as may be delegated to the Chair by the Board from time to time. |
(b) | The Committee |
The Committee has the authority to conduct any investigation appropriate to its responsibilities, and it may request the Independent Auditor as well as any officer of the Corporation, or outside counsel for the Corporation, to attend a meeting of the Committee or to meet with any members of, or advisors to, the Committee. The Committee shall have unrestricted access to the books and records of the Corporation and has the authority to retain, at the expense of the Corporation, special legal, accounting, or other consultants or experts to assist in the performance of the Committee’s duties.
The Committee is hereby delegated the duties and powers specified in Section 225 of the Act and, without limiting these duties and powers, the Committee will carry out the following responsibilities:
Financial Accounting and Reporting Process and Internal Controls
● | review the annual audited financial statements and report thereon to the Board and recommend to the Board whether or not same should be approved prior to their being filed with the appropriate regulatory authorities. The Committee shall also review and approve the interim financial statements prior to their being filed with the appropriate regulatory authorities. The Committee shall discuss significant issues regarding accounting principles, practices, and judgments of management with management and the Independent Auditor as and when the Committee deems it appropriate to do so. The Committee shall satisfy itself that the information contained in the annual audited financial statements is not significantly erroneous, misleading or incomplete and that the audit function has been effectively carried out. |
● | assess the integrity of internal controls and financial reporting procedures and ensure implementation of appropriate controls and procedures. |
● | review the financial statements, management’s discussion and analysis relating to annual and interim financial statements, and press releases and any other public disclosure documents containing financial disclosure before the Corporation publicly discloses this information. |
● | be satisfied that adequate procedures are in place for the review of the Corporation’s public disclosure of financial information extracted or derived from the Corporation’s financial statements, and periodically assess the adequacy of these procedures. |
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● | meet no less frequently than annually with the Independent Auditor and the Chief Financial Officer or, in the absence of a Chief Financial Officer, with the officer of the Corporation in charge of financial matters, to review accounting practices, internal controls and such other matters as the Committee deems appropriate. |
● | inquire of management and the Independent Auditor about significant risks or exposures, both internal and external, to which the Corporation may be subject, and assess the steps management has taken to minimize such risks. |
● | review the post-audit or management letter containing the recommendations of the Independent Auditor and management’s response and subsequent follow-up to any identified weaknesses. |
● | oversee the Corporation’s plans to adopt changes to accounting standards and related disclosure obligations. |
● | in consultation with the Corporate Governance and Nominating Committee, ensure that there is an appropriate standard of corporate conduct including, if necessary, adopting and overseeing a corporate code of ethics for senior financial personnel. |
● | establish procedures for: |
● | the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters; and |
● | the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters. |
● | provide oversight to related party transactions entered into by the Corporation. |
Independent Auditor
● | recommend to the Board for approval by shareholders, the selection, appointment and compensation of the Independent Auditor; |
● | be directly responsible for oversight of the Independent Auditor and the Independent Auditor shall report directly to the Committee. |
● | with reference to the procedures outlined separately in “Procedures for Approval of Non-Audit Services” (attached hereto as Appendix ‘A’), pre-approve all audit and non-audit services not prohibited by law to be provided by the Independent Auditor. |
● | review the Independent Auditor’s audit plan, including scope, procedures, timing and staffing of the audit. |
● | review the results of the annual audit with the Independent Auditor, including matters related to the conduct of the audit, and receive and review the auditor’s interim review reports. |
● | review fees paid by the Corporation to the Independent Auditor and other professionals in respect of audit and non-audit services on an annual basis. |
Other Responsibilities
● | perform any other activities consistent with this Charter and governing law, as the Committee or the Board deems necessary or appropriate; |
● | institute and oversee special investigations, as needed; and |
● | review and assess the adequacy of this Charter annually and submit any proposed revisions to the Board for approval. |
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Appendix A
Policy for Approval of Non-Audit Services
1. | In the event that New Found Gold Corp. (the “Corporation”) or a subsidiary of the Corporation wishes to retain the services of the Corporation’s Independent Auditor for services other than the annual audit (e.g. tax compliance, tax advice or tax planning, to meet the requirements of a regulatory filing or due diligence, to receive advice on various matters, etc.), the Chief Financial Officer of the Corporation shall consult with the Audit Committee of the Board of Directors (the “Committee”), who shall have the authority to approve or disapprove such non-audit services. The Chair of the Committee has the authority to approve or disapprove such non-audit services on behalf of the Committee, and shall advise Committee of such pre-approvals no later than the time of the next meeting of the Committee following such pre-approval having been given. |
2. | The Committee, or the Chair of the Committee, as appropriate, shall confer with the Independent Auditor regarding the nature of the services to be provided and shall not approve any services that would be considered to impair the independence of the Independent Auditor. For greater clarity, the following is a non-exhaustive list of the categories of non-audit services that would be considered to impair the independence of the Independent Auditor: |
(a) | bookkeeping or other services related to or requiring management decisions in connection with the Corporation’s accounting records or financial statements; |
(b) | financial information systems design and implementation; |
(c) | appraisal or valuation services, fairness opinion or contributions-in-kind reports; |
(d) | actuarial services; |
(e) | internal audit outsourcing services; |
(f) | management functions; |
(g) | human resources; |
(h) | broker or dealer, investment adviser or investment banking services; |
(i) | legal services; |
(j) | expert services unrelated to the audit; and |
(k) | any other service that the Canadian Public Accountability Board or any other applicable regulatory authority determines is impermissible. |
3. | The Chief Financial Officer of the Corporation shall maintain a record of non-audit services approved by the Chair of the Committee or the Committee for each fiscal year and provide a report to the Committee any services pre-approved since the last report, at each meeting and no less frequently than on a quarterly basis. |
4. | In accordance with the requirements set forth under the “Exemption for minimal non-audit services” provided by Section 2.3(4) of National Instrument 52-110 — Audit Committees, whereby the Independent Auditor has commenced a service and: |
(a) | the Corporation or the subsidiary entity of the Corporation, as the case may be, and the Independent Auditor did not recognize the services as non-audit services at the time of the engagement; |
(b) | once recognized as non-audit services, the services are promptly brought to the attention of the Committee and approved by the Committee prior to the completion of the audit; and |
(c) | the aggregate fees for the non-audit services not previously approved are immaterial in comparison to the aggregate fees paid by the Corporation to the Corporation’s Independent Auditor during the financial year in which the services are provided, |
such services shall be exempted from the requirements for pre-approval of non-audit services set out in this Policy.
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Exhibit 99.2
NEW FOUND GOLD CORP.
ANNUAL INFORMATION FORM
For the year ended December 31, 2019
Dated: March 5, 2021
TABLE OF CONTENTS | |||
1 | PRELIMINARY NOTES | 1 | |
1.1 | Financial Statements | 1 | |
1.2 | Currency | 1 | |
1.3 | Cautionary Statement Regarding Forward-Looking Information | 1 | |
2 | CORPORATE STRUCTURE | 3 | |
2.1 | Name, address and incorporation | 3 | |
3 | GENERAL DEVELOPMENT OF THE BUSINESS | 3 | |
3.1 | Overview of the Company | 3 | |
3.2 | Business of the Company | 3 | |
3.3 | Three-year History | 4 | |
4 | RISK FACTORS | 8 | |
4.1 | Risks Related to the Company | 8 | |
4.2 | Risks Related to the Company’s Securities | 16 | |
5 | QUEENSWAY PROJECT | 17 | |
5.1 | Summary | 17 | |
5.2 | Property Description and Location | 18 | |
5.3 | Title, Royalties and Encumbrances | 19 | |
5.4 | History | 22 | |
5.5 | Geological Setting, Mineralization and Deposit Types | 26 | |
5.6 | Geological Model | 47 | |
5.7 | Exploration | 52 | |
5.8 | Drilling | 62 | |
5.9 | Sample Preparation, Analysis and Security | 70 | |
5.10 | Mineral Processing and Metallurgical Testing | 73 | |
5.11 | Mineral Resource and Mineral Reserve Estimates | 73 | |
5.12 | Conclusions | 73 | |
5.13 | Recommendations | 74 | |
5.14 | Development Activities Subsequent to the Effective Date of the Queensway Technical Report | 76 | |
6 | OTHER MINERAL PROJECTS | 92 | |
7 | DIVIDENDS AND DISTRIBUTIONS | 93 | |
7.1 | Summary | 93 | |
8 | DESCRIPTION OF CAPITAL STRUCTURE | 93 | |
8.1 | Common Shares | 93 | |
8.2 | Options | 93 | |
8.3 | Warrants | 94 | |
9 | MARKET FOR SECURITIES | 95 | |
9.1 | Trading Price and Volume | 95 | |
9.2 | Prior Sales | 96 | |
10 | ESCROWED SECURITIES | 98 | |
10.1 | Summary | 98 | |
11 | DIRECTORS AND OFFICERS | 99 | |
11.1 | Name, Occupation and Security Holding | 99 | |
11.2 | Directors’ Terms of Office | 100 | |
11.3 | Committees of the Board of Directors | 101 |
11.4 | Audit Committee | 101 | |
11.5 | Nominating and Corporate Governance Committee | 103 | |
11.6 | Compensation Committee | 103 | |
11.7 | Cease Trade Orders, Bankruptcies, Penalties or Sanctions | 103 | |
11.8 | Conflicts of Interest | 104 | |
12 | LEGAL PROCEEDINGS AND REGULATORY ACTIONS | 104 | |
12.1 | Subsequent Events | 104 | |
13 | INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS | 105 | |
14 | TRANSFER AGENT AND REGISTRAR | 105 | |
15 | MATERIAL CONTRACTS | 105 | |
16 | INTERESTS OF EXPERTS | 106 | |
17 | ADDITIONAL INFORMATION | 106 |
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1 PRELIMINARY NOTES
In this Annual Information Form (“AIF”), “New Found” or the “Company” refers to New Found Gold Corp.
All information contained herein is as at December 31, 2019 unless otherwise stated.
1.1 Financial Statements
New Found’s financial statements for the fiscal period ended December 31, 2019 were prepared in accordance with International Financial Reporting Standards (“IFRS”).
This AIF should be read in conjunction with New Found’s audited annual financial statements and notes thereto, as well as the management’s discussion and analysis for the year ended December 31, 2019. The financial statements and management’s discussion and analysis are available at New Found’s website https://newfoundgold.ca/ or under New Found’s profile on SEDAR at www.sedar.com as Schedule “A” and “B”, respectively, in New Found’s Final Long Form Prospectus dated July 31, 2020.
1.2 Currency
All sums of money which are referred to in this AIF are expressed in lawful money of Canada, unless otherwise specified. References to “US$” are to United States Dollars.
1.3 Cautionary Statement Regarding Forward-Looking Information
This AIF contains “forward-looking information” and “forward-looking statements” (referred to together herein as “forward-looking information”). Forward-looking statements and information can generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue”, “plans” or similar terminology. Forward-looking statements and information are not historical facts, are made as of the date of AIF, and include, but are not limited to, statements regarding discussions of results from operations (including, without limitation, statements about the Company’s opportunities, strategies, competition, expected activities and expenditures as the Company pursues its business plan, the adequacy of the Company’s available cash resources and other statements about future events or results), performance (both operational and financial) and business prospects, future business plans and opportunities and statements as to management’s expectations with respect to, among other things, the activities contemplated in this AIF.
Forward-looking statements included or incorporated by reference in this AIF include, without limitation, statements related to the Queensway Project (as such term is defined herein) and the Company’s planned and future exploration on the Queensway Project and its other mineral properties; the Company’s goals regarding exploration and potential development of its projects; the Company’s future business plans; expectations regarding the ability to raise further capital; the market price of gold; expectations regarding any environmental issues that may affect planned or future exploration and development programs and the potential impact of complying with existing and proposed environmental laws and regulations; the ability to retain and/or maintain any require permits, licenses or other necessary approvals for the exploration or development of its mineral properties; government regulation of mineral exploration and development operations in the Provinces of Newfoundland and Labrador and Ontario; the Company’s compensation policy and practices; the Company’s expected reliance on key management personnel, advisors and consultants; effects of the novel COVID19 outbreak as a global pandemic; and the anticipated listing of the Common Shares on the NYSE American LLC.
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These forward-looking statements involve numerous risks and uncertainties and other factors which may cause the actual results, performance or achievements of New Found to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Important factors that may cause actual results to vary include without limitation, the Company may fail to find a commercially viable deposit at any of its mineral properties; there are no resources or mineral reserves on any of the properties in which the Company has an interest; the Company’s plans may be adversely affected by the Company’s reliance on historical data compiled by previous parties involved with its mineral properties; mineral exploration and development are inherently risky; the mineral exploration industry is intensely competitive; additional financing may not be available to the Company when required or, if available, the terms of such financing may not be favourable to the Company; fluctuations in the demand for gold; the Company may not be able to identify, negotiate or finance any future acquisitions successfully, or to integrate such acquisitions with its current business; the Company’s exploration activities are dependent upon the grant of appropriate licenses, concessions, leases, permits and regulatory consents, which may be withdrawn or not granted; the Company’s operations could be adversely affected by possible future government legislation, policies and controls or by changes in applicable laws and regulations; there is no guarantee that title to the properties in which the Company has a material interest will not be challenged or impugned; the Company faces various risks associated with mining exploration that are not insurable or may be the subject of insurance which is not commercially feasible for the Company; public health crises such as the COVID-19 pandemic may adversely impact the Company’s business; the volatility of global capital markets over the past several years has generally made the raising of capital more difficult; compliance with environmental regulations can be costly; social and environmental activism can negatively impact exploration, development and mining activities; the success of the Company is largely dependent on the performance of its directors and officers; the Company’s operations may be adversely affected by First Nations land claims; the Company and/or its directors and officers may be subject to a variety of legal proceedings, the results of which may have a material adverse effect on the Company’s business; the Company may be adversely affected if potential conflicts of interests involving its directors and officers are not resolved in favour of the Company; the Company’s future profitability may depend upon the world market prices of gold; dilution from future equity financing could negatively impact holders of the Company’s securities; failure to adequately meet infrastructure requirements could have a material adverse effect on the Company’s business; the Company’s projects now or in the future may be adversely affected by risks outside the control of the Company; the Company is subject to various risks associated with climate change; and other factors discussed under “Risk Factors”.
In making the forward-looking statements in this AIF, New Found has applied several material assumptions, including without limitation, the assumptions that: the ability to raise any necessary additional capital on reasonable terms to advance exploration and development of the Company’s mineral properties; future prices of gold and other metal prices; the timing and results of exploration and drilling programs; the demand for, and price of gold; that general business and economic conditions will not change in a material adverse manner; the Company’s ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; the geology of the Queensway Project as described in the Queensway Technical Report (as such term is defined herein) ; the accuracy of budgeted exploration and development costs and expenditures; future currency exchange rates and interest rates; operating conditions being favourable such that the Company is able to operate in a safe, efficient and effective manner; the Company’s ability to attract and retain skilled personnel; political and regulatory stability; the receipt of governmental, regulatory and third-party approvals, licenses and permits on favourable terms; obtaining required renewals for existing approvals, licenses and permits on favourable terms; requirements under applicable laws; sustained labour stability; stability in financial and capital goods markets; expectations regarding the level of disruption to exploration at the Queensway Project as a result of COVID 19; availability of equipment.
Certain of the risks and assumptions are described in more detail under the heading “Risk Factors” herein and in New Found’s consolidated audited financial statements and MD&A for the year ended December 31, 2019 in Schedule “A” and “B”, respectively, in New Found’s Final Long Form Prospectus dated July 31, 2020.
The actual results or performance by New Found could differ materially from those expressed in, or implied by, any forward-looking statements relating to those matters. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of the Company. Except as required by law, New Found is under no obligation, and expressly disclaim any obligation, to update, alter or otherwise revise any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
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2 CORPORATE STRUCTURE
2.1 Name, address and incorporation
New Found was incorporated under the Business Corporations Act (Ontario) (the “OBCA”) as Palisade Resources Corp. on January 6, 2016. By articles of amendment effective June 20, 2017, the Company’s name was changed to New Found Gold Corp.
On June 23, 2020, the Company continued into British Columbia under the provisions of the Business Corporations Act, British Columbia, (the “BCBCA”). The Company’s head office is located at Suite 1430 – 800 West Pender Street, Vancouver, British Columbia, V6C 2V6, Canada. The Company’s registered office is located at Suite 2600, Three Bentall Centre, 595 Burrard Street, P.O. Box 49314, Vancouver , British Columbia, V7X 1L3, Canada.
3 GENERAL DEVELOPMENT OF THE BUSINESS
3.1 Overview of the Company
3.1.1 General
New Found is a mineral exploration company involved in the identification, acquisition and exploration of mineral properties primarily in the Provinces of Newfoundland and Labrador and Ontario. The Company’s exploration is focused on discovering and delineating gold resources. The Company has one material property: the Queensway Project located in Newfoundland, Canada. At present, the Queensway Project does not have any known mineral resources or reserves.
Since incorporation, the Company has taken the following steps in developing its business: (i) identified and acquired mineral properties with sufficient merit to warrant exploration; (ii) raised funds to progress the Company’s exploration activities on its mineral properties, as described herein; (iii) completed the “Amended and Restated Technical Report on the Queensway Gold Project, Newfoundland, Canada” with an effective date of July 15, 2020, prepared by Dawn Evans- Lamswood, M.Sc., P.Geo of DEL Exploration in accordance with NI 43-101 (the “Queensway Technical Report”) on the Queensway Project; and (iv) retained directors, officers and employees with the skills required to successfully operate a public mineral exploration company.
As at December 31, 2019, the Company was not a reporting issuer in any jurisdiction and no securities of the Company were listed or posted for trading on any stock exchange. Subsequent to the financial year ended December 31, 2019, on August 11, 2020, the Company completed its initial public offering and the Common Shares (as defined herein) of the Company began trading on the TSX Venture Exchange under the symbol “NFG”.
3.2 Business of the Company
3.2.1 Principal Operations
The Company is a mineral exploration company engaged in the acquisition, exploration and evaluation of resource properties with a focus on gold properties located in the Provinces of Newfoundland and Labrador and Ontario, Canada.
3.2.2 Competitive Conditions
The mineral exploration and mining industry is competitive in all phases of exploration, development and production. The Company competes with a number of other entities and individuals in the search for and the acquisition of attractive mineral properties. As a result of this competition, the Company may not be able to acquire attractive properties in the future on terms it considers acceptable. The Company may also encounter competition from other mining companies in efforts to hire experienced mining professionals. Increased competition could adversely affect the Company’s ability to attract necessary funding or acquire suitable properties or prospects for mineral exploration in the future. See “Risk Factors – Competition and Mineral Exploration”.
3.2.3 Specialized Skills and Knowledge
Various aspects of the Company’s business require specialized skills and knowledge. Such skills and knowledge include, but are not limited to, expertise related to mineral exploration, geology, drilling, permitting, metallurgy, logistical planning, and implementation of exploration programs, as well as legal compliance, finance and accounting. The Company expects to rely upon various legal and financial advisors, consultants and others in the operation and management of its business. See “Risk Factors – Dependence on Management and Key Personnel”.
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3.2.4 Cycles
The Company’s mineral exploration activities may be subject to seasonality due to adverse weather conditions including, without limitation, inclement weather, frozen ground and restricted access due to snow, ice or other weather-related factors. In addition, the mining and mineral exploration business is subject to global economic cycles effecting, among other things, the marketability and price of gold products in the global marketplace.
3.2.5 Employees
At December 31, 2019 and at the date of this AIF, the Company has no employees. The Company relies exclusively on consultants and contractors to carry on its business activities and, in particular, to supervise and carry-out mineral exploration on its Queensway Project and other mineral properties.
3.2.6 Environmental Protection
The Company is currently engaged in exploration activities on its Queensway Project and other mineral properties and such activities are subject to various laws, rules and regulations governing the protection of the environment. Corporate obligations to protect the environment under the various regulatory regimes in which the Company operates may affect the financial position, operational performance and earnings of the Company. A breach of such legislation may result in imposition of fines and penalties. Management believes all of the Company’s activities are in material compliance with all applicable environmental legislation. See “Risk Factors – Environmental Risks”.
3.2.7 Social or Environmental Policies
The Company is committed to conducting its operations in accordance with sound social and environmental practices. At present, the scale of operations has not required the adoption of formal policies. The Company will reevaluate this position if and when necessary.
The Company is subject to the laws and regulations relating to environmental matters in all jurisdictions in which it operates, including provisions relating to property reclamation, discharge of hazardous materials and other matters. The Company may also be held liable should environmental problems be discovered that were caused by former owners and operators of its properties. The Company conducts its mineral exploration activities in compliance with applicable environmental protection legislation.
3.3 Three-year History
3.3.1 Financings and Issuances of the Company’s Securities
November 2019 Private Placement
On November 29, 2019, the Company completed a non-brokered private placement financing of 16,000,000 units at a price of $0.50 per unit for gross proceeds of $8,000,000 (the “November 2019 Private Placement”). Each unit consisted of one Common Share and one common share purchase warrant (the “2019 Warrants”). Each 2019 Warrant entitles the holder thereof to purchase one additional Common Share at a price of $0.75 per Common Share for a three year period expiring on November 29, 2022. In accordance with the terms thereof, 12,000,000 of the 2019 Warrants were exercised on July 21, 2020 and the remaining 4,000,000 of the 2019 Warrants were exercised on August 10, 2020.
July 2019 Private Placement
On July 3, 2019, the Company completed a non-brokered private placement financing of 1,250,000 Common Shares at a price of $0.40 per Common Share for gross proceeds of $500,000.
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June 2019 Private Placement
On June 18, 2019, the Company completed a non-brokered private placement financing of 1,875,000 Common Shares at a price of $0.40 per Common Share for gross proceeds of $750,000.
2019 Property Option Share Issuances
In 2019, New Found issued a total of 442,499 Common Shares in connection with the exercise of certain property option agreements with respect to the Queensway Project.
2018 Property Option Share Issuances
In 2018, New Found issued a total of 42,500 Common Shares in connection with the exercise of certain property option agreements with respect to the Queensway Project.
2017 Property Option Share Issuances
In 2017, New Found issued a total of 223,750 Common Shares in connection with the exercise of certain property option agreements with respect to the Queensway Project.
2017 Private Placement
In 2017, New Found completed a non-brokered private placement financing of 5,585,500 Common Shares at a price of $0.40 per common share for gross proceeds of $2,234,200.
3.3.2 Exercise of Queensway Project Option Agreements
On June 23, 2020, the Company fully exercised the final remaining active option agreement with respect to the Queensway Project, being an option agreement with Unity Resources Inc., Gary Lewis, Donna Lewis, Nigel Lewis, Leonard Lewis, and Aubrey Budgell, entered into in November 2016, which covered 100% of the Unity Property portion of the Queensway Project. As a result, the Company is now the 100% owner of the interests comprising the Queensway Project. Pursuant to the option agreement, an NSR grant of 1.6% is payable to the optionors which can be reduced by 1.0% by paying the optionors $1,000,000. This agreement contains a 2 km area of influence that subjects adjacent lands to the east and north of the subject lands and does not impact the optioned property.
In November 2019, the Company fully exercised an option agreement covering the 100% interest in the JBP Linear Property portion of the Queensway Project, being an option agreement with Roland Quinlan and Eddie Quinlan, entered into in May 2017. Under the terms of the option agreement, the Company paid the optionors a total of $45,000 in cash over a 30-month period and granted an NSR of 1.6% to the optionors which can be reduced by 1.0% by paying the optionors $1,000,000.
In November 2019, the Company fully exercised an option agreement covering the 100% interest in the Golden Bullet Property portion of the Queensway Project, being an option agreement with Roland Quinlan, Eddie Quinlan and Larry Quinlan, executed in November 2016. Under the terms of the option agreement, the Company paid the optionors a total of $125,000 in cash and issued $100,000 in Common Shares to the optionors over a 36-month period. Pursuant to the option agreement, an NSR of 1.6% is payable to the optionors which can be reduced by 1.0% by paying the optionors $1,000,000. This option agreement contains a 2 km area of influence that subjects adjacent lands to an additional 0.6% NSR.
In July 2019, the Company fully exercised an option agreement covering the 100% interest in the Linear and JBP Linear Property portion of the Queensway Project, being an option agreement with Krinor Resources, Kevin Keats and Allan Keats entered into in July 2016. Under the terms of the option agreement, the Company paid the optionors a total of $54,000 and issued 45,000 Common Shares to the optionors over a 36-month period. An NSR of 0.6% is payable to the optionors along with an underlying net smelter royalty of 1.0% covering five of the six claims, which is payable to Paragon Minerals Corp (“Paragon”). This option agreement contains a 2 km area of influence that subjects adjacent lands to the additional 0.6% NSR.
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In April 2019, the Company fully exercised an option agreement covering the 100% interest in the Guinchard Property portion of the Queensway Project, being an option agreement with Wayde Guinchard, Myrtle Guinchard and Peter Rogers executed in April 2017. Under the terms of the option agreement, the Company paid the optionors a total of $45,000 and issued 105,000 Common Shares to the optionors over a 24-month period. Pursuant to the option agreement, an NSR of 1.0% is payable to the optionors which can be reduced by 0.5% by paying the optionors $1,000,000.
In September 2018, the Company acquired a 100% interest in the Lush Property portion of the Queensway Project pursuant to a purchase agreement with Paragon Minerals Corp. The Lush Property is comprised of one map staked licence covering 50 hectares. Under the terms of the purchase agreement, the Company granted an NSR of 0.5% payable to Paragon Minerals Corp along with an underlying NSR 2.0% payable to Tom Lush which can be reduced by 1.0% by paying $1,000,000 to Tom Lush.
In May 2017, the Company acquired a 100% interest in the P-Pond Property via an option agreement with Stephen Stockley, Mark Stockley and Edward Stockley. The P-Pond property is comprised of three map staked licences covering 175 hectares and under the terms of the agreement the Company paid the optionor a total of $30,000 in cash and issued $10,000 worth of Common Shares to the optionor; this option agreement has been fully executed the Company are the sole owner of the property. A net smelter royalty grant of 1.0% is payable to the optionor which can be reduced by 0.5% by paying the optionor $250,000.
In April 2017, the Company acquired a 100% interest in the Guinchard Property via an option agreement with Wayde Guinchard, Myrtle Guinchard and Peter Rogers. The Guinchard property is comprised of five map staked licences covering 625 hectares and under the terms of the agreement the Company agreed is to pay the optionor a total of $45,000 and 105,000 shares over a 24-month period; the option was fully executed in April 2019 and the Company are the sole owner of the property. A net smelter royalty grant of 1.0% is payable to the optionor which can be reduced by 0.5% by paying the optionor $1,000,000.
In October 2016, the Company acquired a 100% interest in the United Gold Property via an option agreement with Noreen Kennedy. The United Gold property is comprised of one map staked licence covering 275 hectares and under the terms of the agreement the company is to pay the optionor a total of $16,500 and $16,500 worth of shares are to be issued over a 6-month period; this option agreement has been fully executed and the Company are the sole owner of the property. A net smelter royalty grant of 0.6% is payable to the optionor.
The Company does not expect any changes to its business during the current financial year.
3.3.3 Recent Events
COVID-19 Developments
The Company continues to have no material disruption to operations or supply chains as a result of the COVID-19 pandemic. Since the onset of COVID-19 in early 2020, the Company has continued to take extraordinary measures to mitigate the possible impact of COVID-19 on its workforce and operations. Some of these measures include: (i) eliminating all non-essential travel to and from the Queensway Project and (ii) reducing physical interaction throughout the organization as much as possible by moving to a work-from-home format. The Company continues to closely monitor the COVID-19 pandemic and is engaged in active operational and financial contingency planning to prudently manage the potential impact of the pandemic on its operations.
NYSE American Listing Application
On February 1, 2021, the Company filed a Form 20-F registration statement with the United States Securities and Exchange Commission (the “SEC”) with the intention of applying to list its Common Shares on the NYSE American stock exchange (“NYSE American”). Subject to the approval of the SEC and the satisfaction of all applicable listing and regulatory requirements, the Company will become a SEC registrant and expects its Common Shares to commence trading in on the NYSE American in 2021.
Exploits Transaction
On December 11, 2020, the Company entered into a purchase and sale agreement with Exploits Discovery Corp. (“Exploits”) pursuant to which the Company sold a 100% interest in two mineral claims representing 12.0 km 2 of land at the Queensway Project for non-cash consideration of 6,562,799 common shares in the capital of Exploits. The Company will also retain a 2% net smelter returns royalty on production from the mineral claims sold to Exploits.
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Initial Public Offering
On August 11, 2020, the Company completed an initial public offering on the TSX Venture Exchange of an aggregate of 21,000,000 Common Shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 14, 2020, Canaccord Genuity Corp., BMO Nesbitt Burns Inc. and Desjardins Securities Inc. (together the “Agents”) exercised their overallotment option in full to offer and sell an additional 3,150,000 Common Shares for gross proceeds of $4,095,000. The Company paid agents’ fees of $1,793,700 in cash and issued 1,379,768 agents’ warrants (“Broker Warrants”) exercisable into Common Shares at $1.30 for 12 months from the date of issue in connection with the initial public offering.
2020 Flow-Through Private Placements
On June 10, 2020, the Company completed the second and final tranche of a non-brokered private placement financing by issuing 68,462 Common Shares that qualified as “flow-through shares” (within the meaning of the Income Tax Act (Canada) (the “Tax Act”)) at a price $1.30 per common share, for gross proceeds of $89,001. In connection with the private placement, the Company issued certain finders non-transferable common share purchase warrants (“Finder Warrants”, together with the Broker Warrants, the “2020 Warrants”), in an aggregate amount of 4,107 Finder Warrants, representing 6% of the Common Shares sourced by certain finders. Each Finder Warrant issued in connection with this private placement entitles the holder thereof to purchase one additional common share at a price of $1.30 per common share for a two-year period expiring on June 10, 2022.
On June 4, 2020, the Company completed the second and final tranche of a non-brokered private placement financing by issuing of 1,227,753 Common Shares that qualified as “flow-through shares” (within the meaning of the Tax Act) at a price $1.50 per common share, for gross proceeds of $1,841,630. In connection with the private placement, the Company issued certain finders an aggregate amount of 28,230 Finder Warrants, representing 6% of the Common Shares sourced by certain finders. Each Finder Warrant issued in connection with this private placement entitles the holder thereof to purchase one additional common share at a price of $1.50 per common share for a two-year period expiring on June 4, 2022.
On May 13, 2020, the Company completed the first tranche of the non-brokered private placement financing by issuing 2,766,844 Common Shares that qualified as “flow-through shares” (within the meaning of the Tax Act) at a price $1.50 per common share, for gross proceeds of $4,150,266. In connection with the private placement, the Company issued an aggregate of 36,052 Finder Warrants, representing 6% of the Common Shares sourced by certain finders. Each Finder Warrant issued in connection with this private placement entitles the holder thereof to purchase one additional common share at a price of $1.50 per common share for a two-year period expiring on May 13, 2022.
On May 12, 2020, the Company completed the first tranche of a non-brokered private placement financing of 797,923 Common Shares that qualified as “flow-through shares” (within the meaning of the Tax Act) at a price $1.30 per common share, for gross proceeds of $1,037,299. In connection with the private placement, the Company issued an aggregate of 39,475 Finder Warrants, representing 6% of the Common Shares sourced by certain finders. Each Finder Warrant issued in connection with this private placement entitles the holder thereof to purchase one additional common share at a price of $1.30 per common share for a two-year period expiring on May 12, 2022.
Novo Transaction and Share Issuance
On March 6, 2020, the Company issued 15,000,000 Common Shares to Novo Resources Corp., a TSXV listed mineral exploration and development corporation (“Novo”), at a subscription price of $1.12 per common share, which was paid to the Company by the issuance of 6,944,444 common shares in the capital of Novo (the “Novo Transaction”). Upon closing of the Novo Transaction, Novo owned approximately 15.97% of the Company’s issued and outstanding Common Shares and New Found owned approximately 3.73% of the issued and outstanding common shares of Novo. Pursuant to the terms of the Novo Transaction, Novo has the right to appoint a director to the Board at any time until March 6, 2023, provided that Novo holds no less than 10% of New Found’s issued and outstanding Common Shares. In connection with Novo’s right to appoint a director to the Board, Novo appointed Dr. Quinton Hennigh as its director nominee. Dr. Hennigh was elected to the Board on June 17, 2020.
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Mr. Eric Sprott, a principal securityholder of the Company, is also a principal securityholder of Novo.
Proposed Mexican Gold Transaction
On January 26, 2020, New Found entered into a binding letter agreement (the “Mexican Gold Agreement”) with Mexican Gold Corp. (“Mexican Gold”), pursuant to which Mexican Gold agreed to acquire all of the Company’s issued and outstanding shares (the “Proposed Mexican Gold Transaction”). The Proposed Mexican Gold Transaction would have constituted a reverse takeover pursuant to TSXV policies as, following completion of the Proposed Mexican Gold Transaction, the Company’s shareholders would have owned approximately 88.4% of the issued and outstanding common shares of the resulting issuer.
On February 19, 2020, the Company mutually agreed with Mexican Gold to terminate the Mexican Gold Agreement and the Proposed Mexican Gold Transaction.
4 RISK FACTORS
The business and operations of New Found are speculative due to the high-risk nature of its business, which is the exploration of mineral properties. The risks listed below are not the only risks and uncertainties that New Found faces. Additional risks and uncertainties not presently known to New Found or that New Found currently considers immaterial may also materially impair its business. These risk factors could materially affect New Found’s business, financial condition and future operating results and could cause actual events to differ materially from those described in forward-looking statements relating to the Company.
If any of the following risks occur, New Found’s business, financial condition and operating results could be materially adversely affected.
4.1 Risks Related to the Company
4.1.1 Exploration Stage Company
The Company is an exploration stage company and cannot give any assurance that a commercially viable deposit, or “reserve,” exists on any properties for which the Company currently has or may have (through potential future joint venture agreements or acquisitions) an interest. Determination of the existence of a reserve depends on appropriate and sufficient exploration work and the evaluation of legal, economic, and environmental factors. If the Company fails to find a commercially viable deposit on any of its properties, its financial condition and results of operations will be materially adversely affected.
4.1.2 No Mineral Resources
Currently, there are no mineral resources (within the meaning of NI 43-101) on any of the properties in which the Company has an interest and the Company cannot give any assurance that any mineral resources will be identified. If the Company fails to identify any mineral resources on any of its properties, its financial condition and results of operations will be materially adversely affected.
4.1.3 No Mineral Reserves
Currently, there are no mineral reserves (within the meaning of NI 43-101) on any of the properties in which the Company has an interest and the Company cannot give assurance that any mineral reserves will be identified. If the Company fails to identify any mineral reserves on any of its properties, its financial condition and results of operations will be materially adversely affected.
4.1.4 Reliability of Historical Information
The Company has relied on, and the disclosure in the Queensway Technical Report is based, in part, upon, historical data compiled by previous parties involved with the Queensway Project. To the extent that any of such historical data is inaccurate or incomplete, the Company’s exploration plans may be adversely affected.
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4.1.5 Mineral Exploration and Development
Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection, the combination of which factors may result in the Company not receiving an adequate return of investment capital.
There is no assurance that the Company’s mineral exploration and any development activities will result in any discoveries of commercial bodies of ore. The long-term profitability of the Company’s operations will in part be directly related to the costs and success of its exploration programs, which may be affected by a number of factors. Substantial expenditures are required to establish reserves through drilling and to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis.
Substantial expenditures are required to establish ore reserves through exploration and drilling, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities and grades to justify commercial operations or that funds required for development can be obtained on a timely basis. Estimates of reserves, mineral deposits and production costs can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In addition, the grade of ore ultimately mined may differ from that indicated by drilling results. Short term factors relating to reserves, such as the need for orderly development of ore bodies or the processing of new or different grades, may also have an adverse effect on mining operations and on the results of operations. Material changes in ore reserves, grades, stripping ratios or recovery rates may affect the economic viability of any project.
4.1.6 Competition and Mineral Exploration
The mineral exploration industry is intensely competitive in all of its phases and the Company must compete in all aspects of its operations with a substantial number of large established mining companies with greater liquidity, greater access to credit and other financial resources, newer or more efficient equipment, lower cost structures, more effective risk management policies and procedures and/or greater ability than the Company to withstand losses. The Company’s competitors may be able to respond more quickly to new laws or regulations or emerging technologies or devote greater resources to the expansion of their operations, than the Company can. In addition, current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties. Competition could adversely affect the Company’s ability to acquire suitable new mineral properties or prospects for exploration in the future. Competition could also affect the Company’s ability to raise financing to fund the exploration and development of its properties or to hire qualified personnel. The Company may not be able to compete successfully against current and future competitors, and any failure to do so could have a material adverse effect on the Company’s business, financial condition or results of operations.
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4.1.7 Additional Funding
The exploration and development of the Company’s mineral properties will require substantial additional capital. When such additional capital is required, the Company will need to pursue various financing transactions or arrangements, including joint venturing of projects, debt financing, equity financing or other means. Additional financing may not be available when needed or, if available, the terms of such financing might not be favourable to the Company and might involve substantial dilution to existing shareholders. The Company may not be successful in locating suitable financing transactions in the time period required or at all. A failure to raise capital when needed would have a material adverse effect on the Company’s business, financial condition and results of operations. Any future issuance of securities to raise required capital will likely be dilutive to existing shareholders. In addition, debt and other debt financing may involve a pledge of assets and may be senior to interests of equity holders. The Company may incur substantial costs in pursuing future capital requirements, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. The ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the gold industry in particular), the Company’s status as a new enterprise with a limited history, the location of the Company’s mineral properties, the price of commodities and/or the loss of key management personnel.
4.1.8 Acquisition of Additional Mineral Properties
If the Company loses or abandons its interests in its mineral properties, there is no assurance that it will be able to acquire another mineral property of merit or that such an acquisition would be approved by the TSXV. There is also no guarantee that the TSXV will approve the acquisition of any additional properties by the Company, whether by way of an option or otherwise, should the Company wish to acquire any additional properties.
4.1.9 Government or Regulatory Approvals
Exploration and development activities are dependent upon the grant of appropriate licences, concessions, leases, permits and regulatory consents, which may be withdrawn or made subject to limitations. There is no guarantee that, upon completion of any exploration, a mining licence will be granted with respect to exploration territory. There can also be no assurance that any exploration licence will be renewed or if so, on what terms. These licences place a range of past, current and future obligations on the Company. In some cases, there could be adverse consequences for breach of these obligations, ranging from penalties to, in extreme cases, suspension or termination of the relevant licence or related contract.
4.1.10 Permits and Government Regulation
The future operations of the Company may require permits from various federal, state, provincial and local governmental authorities and will be governed by laws and regulations governing prospecting, development, mining, production, export, taxes, labour standards, occupational health, waste disposal, land use, environmental protections, mine safety and other matters. Although Canada has a favourable legal and fiscal regime for exploration and mining, including a relatively simple system for the acquisition of mineral titles and relatively low tax burden, possible future government legislation, policies and controls relating to prospecting, development, production, environmental protection, mining taxes and labour standards could cause additional expense, capital expenditures, restrictions and delays in the activities of the Company, the extent of which cannot be predicted. Before development and production can commence on any properties, the Company must obtain regulatory and environmental approvals. There is no assurance that such approvals can be obtained on a timely basis or at all. The cost of compliance, with changes in governmental regulations, has the potential to reduce the profitability of operations. The Company is currently in compliance with all material regulations applicable to its exploration activities.
4.1.11 Limited Operating History
The Company has a limited operating history and its mineral properties are exploration stage properties. As such, the Company will be subject to all of the business risks and uncertainties associated with any new business enterprise, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. The current state of the Company’s mineral properties require significant additional expenditures before any cash flow may be generated. Although the Company possesses an experienced management team, there is no assurance that the Company will be successful in achieving a return on shareholders’ investment and the likelihood of success of the Company must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the establishment of any business. There is no assurance that the Company can generate revenues, operate profitably, or provide a return on investment, or that it will successfully implement its plans.
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An investment in the Company’s securities carries a high degree of risk and should be considered speculative by purchasers. There is no assurance that the Company will be successful in achieving a return on shareholders’ investment and the likelihood of its success must be considered in light of its early stage of operations. You should consider any purchase of the Company’s securities in light of the risks, expenses and problems frequently encountered by all companies in the early stages of their corporate development.
4.1.12 Title Risks
Although the Company has or will receive title opinions for any properties in which it has a material interest, there is no guarantee that title to such properties will not be challenged or impugned. The Company has not conducted surveys on all of the claims in which it holds direct or indirect interests. The Company’s properties may be subject to prior unregistered agreements or transfers or native land claims and title may be affected by unidentified or unknown defects. Title insurance is generally not available for mineral properties and the Company’s ability to ensure that it has obtained secure claims to individual mineral properties or mining concessions may be constrained. A successful challenge to the Company’s title to a property or to the precise area and location of a property could cause delays or stoppages to the Company’s exploration, development or operating activities without reimbursement to the Company. Any such delays or stoppages could have a material adverse effect on the Company’s business, financial condition and results of operations.
4.1.13 Laws and Regulation
The Company’s exploration activities are subject to extensive federal, provincial and local laws and regulations governing prospecting, development, production, exports, taxes, labour standards, occupational health and safety, mine safety and other matters in all the jurisdictions in which it operates. These laws and regulations are subject to change, can become more stringent and compliance can therefore become more costly. The Company applies the expertise of its management, advisors, employees and contractors to ensure compliance with current laws.
4.1.14 Uninsured and Underinsured Risks
The Company faces and will face various risks associated with mining exploration and the management and administration thereof including those associated with being a public company. Some of these risks are not insurable; some may be the subject of insurance which is not commercially feasible for the Company. Those insurances which are purchased will have exclusions and deductibles which may eliminate or restrict recovery in the event of loss. In some cases, the amount of insurance purchased may not be adequate in amount or in limit.
The Company will undertake intermittent assessments of insurable risk to help ensure that the impact of uninsured/underinsured loss is minimized within reason. Risks may vary from time to time within this intermittent period due to changes in such things as operations operating conditions, laws or the climate which may leave the Company exposed to periods of additional uninsured risk.
In the event risk is uninsurable, at its reasonable and sole discretion, the Company may endeavor to implement policies and procedures, as may be applicable and/or feasible, to reduce the risk of related loss.
4.1.15 Public Health Crises such as the COVID-19 Pandemic
The Company’s business, operations and financial condition could be materially and adversely affected by the outbreak of epidemics or pandemics or other health crises, including the current COVID-19 pandemic. To date, there have been a large number of restrictions, business closures, quarantines and a reduction in various activities in a number of countries including Canada, the United States, Europe and China. The pandemic has resulted in travel, gathering and other public health restrictions. While these effects are expected to be temporary, the duration of the various disruptions to businesses locally and internationally and the related financial and other impacts cannot be reasonably estimated at this time. Such public health crises can result in volatility and disruptions in the supply and demand for gold and other minerals, global supply chains and financial markets, as well as declining trade and market sentiment and reduced mobility of people, all of which could affect commodity prices, interest rates, credit ratings, credit risk, share prices and inflation. The risks to the Company of such public health crises also include risks to employee health and safety, additional slowdowns or temporary suspensions of operations in geographic locations impacted by an outbreak, increased labor, transportation and fuel costs, regulatory changes, political or economic instabilities or civil unrest. At this point, the extent to which COVID-19 will or may impact the Company is uncertain and these factors are beyond the Company’s control. Any increase in the severity of the pandemic or future outbreaks of COVID-19, particularly if the number of COVID-19 cases in New Found Land continues to rise, could have a material adverse effect on the Company’s business, results of operations and financial condition.
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4.1.16 Global Economy Risk
The volatility of global capital markets, including the general economic slowdown in the mining sector, over the past several years has generally made the raising of capital by equity or debt financing more difficult. The Company may be dependent upon capital markets to raise additional financing in the future. As such, the Company is subject to liquidity risks in meeting its operating expenditure requirements and future development cost requirements in instances where adequate cash positions are unable to be maintained or appropriate financing is unavailable. These factors may impact the ability to raise equity or obtain loans and other credit facilities in the future and on terms favourable to the Company and its management. If these levels of volatility persist or if there is a further economic slowdown, the Company’s operations, the Company’s ability to raise capital and the trading price of the Company’s securities could be adversely impacted.
In addition, the current outbreak of COVID-19, and any future emergence and spread of similar pathogens, could have a material adverse impact on global economic conditions, which may adversely impact: the market price of the Common Shares, the Company’s operations, its ability to raise debt or equity financing for the purposes of mineral exploration and development, and the operations of the Company’s suppliers, contractors and service providers.
4.1.17 Environmental Risks
The Company’s activities are subject to extensive laws and regulations governing environment protection. The Company is also subject to various reclamation related conditions. Although the Company closely follows and believes it is operating in compliance with all applicable environmental regulations, there can be no assurance that all future requirements will be obtainable on reasonable terms. Failure to comply may result in enforcement actions causing operations to cease or be curtailed and may include corrective measures requiring capital expenditures. Intense lobbying over environmental concerns by non-governmental organizations has caused some governments to cancel or restrict development of mining projects. Current publicized concern over climate change may lead to carbon taxes, requirements for carbon offset purchases or new regulation. The costs or likelihood of such potential issues to the Company cannot be estimated at this time.
The legal framework governing this area is constantly developing, therefore the Company is unable to fully ascertain any future liability that may arise from the implementation of any new laws or regulations, although such laws and regulations are typically strict and may impose severe penalties (financial or otherwise). The proposed activities of the Company, as with any exploration, may have an environmental impact which may result in unbudgeted delays, damage, loss and other costs and obligations including, without limitation, rehabilitation and/or compensation. There is also a risk that the Company’s operations and financial position may be adversely affected by the actions of environmental groups or any other group or person opposed in general to the Company’s activities and, in particular, the proposed exploration and mining by the Company within the Provinces of Newfoundland and Ontario.
4.1.18 Social and Environmental Activism
There is an increasing level of public concern relating to the effects of mining on the nature landscape, in communities and on the environment. Certain non-governmental organizations, public interest groups and reporting organizations (“NGOs”) who oppose resource development can be vocal critics of the mining industry. In addition, there have been many instances in which local community groups have opposed resource extraction activities, which have resulted in disruption and delays to the relevant operation. While the Company seeks to operate in a social responsible manner and believes it has good relationships with local communities in the regions in which it operates, NGOs or local community organizations could direct adverse publicity against and/or disrupt the operations of the Company in respect of one or more of its properties, regardless of its successful compliance with social and environmental best practices, due to political factors, activities of unrelated third parties on lands in which the Company has an interest or the Company’s operations specifically. Any such actions and the resulting media coverage could have an adverse effect on the reputation and financial condition of the Company or its relationships with the communities in which it operations, which could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.
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4.1.19 Dependence on Management and Key Personnel
The success of the Company is currently largely dependent on the performance of its directors and officers. The loss of the services of any of these persons could have a materially adverse effect on the Company’s business and prospects. There is no assurance the Company can maintain the services of its directors, officers or other qualified personnel required to operate its business. As the Company’s business activity grows, the Company will require additional key financial, administrative and mining personnel as well as additional operations staff. There can be no assurance that these efforts will be successful in attracting, training and retaining qualified personnel as competition for persons with these skill sets increase. If the Company is not successful in attracting, training and retaining qualified personnel, the efficiency of its operations could be impaired, which could have an adverse impact on the Company’s operations and financial condition. In addition, the COVID-19 pandemic may cause the Company to have inadequate access to an available skilled workforce and qualified personnel, which could have an adverse impact on the Company’s financial performance and financial condition.
4.1.20 First Nations Land Claims
Certain of the Company’s mineral properties may now or in the future be the subject of First Nations land claims. The legal nature of First Nations land claims is a matter of considerable complexity. The impact of any such claim on the Company’s material interest in the Company’s mineral properties and/or potential ownership interest in the Company’s mineral properties in the future, cannot be predicted with any degree of certainty and no assurance can be given that a broad recognition of First Nations rights in the areas in which the Company’s mineral properties are located, by way of negotiated settlements or judicial pronouncements, would not have an adverse effect on the Company’s activities. Even in the absence of such recognition, the Company may at some point be required to negotiate with and seek the approval of holders of First Nations interests in order to facilitate exploration and development work on the Company’s mineral properties, there is no assurance that the Company will be able to establish practical working relationships with the First Nations in the area which would allow it to ultimately develop the Company’s mineral properties.
4.1.21 Claims and Legal Proceedings
The Company and/or its directors and officers may be subject to a variety of civil or other legal proceedings, with or without merit. From time to time in the ordinary course of its business, the Company may become involved in various legal proceedings, including commercial, employment and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s attention and resources and cause the Company to incur significant expenses. Furthermore, because litigation is inherently unpredictable, the results of any such actions may have a material adverse effect on the Company’s business, operating results or financial condition.
4.1.22 Conflicts of Interest
Most of the Company’s directors and officers and do not devote their full time to the affairs of the Company. All of the directors and officers of the Company are also directors, officers and shareholders of other natural resource or public companies, and as a result they may find themselves in a position where their duty to another company conflicts with their duty to the Company. Although the Company has policies which address such potential conflicts and the BCBCA has provisions governing directors in the event of such a conflict, none of the Company’s constating documents or any of its other agreements contain any provisions mandating a procedure for addressing such conflicts of interest. There is no assurance that any such conflicts will be resolved in favour of the Company. If any such conflicts are not resolved in favour of the Company, the Company may be adversely affected.
4.1.23 Gold and Metal Prices
If the Company’s mineral properties are developed from exploration properties to full production properties, the majority of its revenue will be derived from the sale of gold. Therefore, the Company’s future profitability will depend upon the world market prices of the gold for which it is exploring. The price of gold and other metals are affected by numerous factors beyond the Company’s control, including levels of supply and demand, global or regional consumptive patterns, sales by government holders, metal stock levels maintained by producers and others, increased production due to new mine developments and improved mining and production methods, speculative activities related to the sale of metals, availability and costs of metal substitutes.
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Moreover, gold prices are also affected by macroeconomic factors such as expectations regarding inflation, interest rates and global and regional demand for, and supply of, gold as well as general global economic conditions. These factors may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities. Additionally, the current COVID-19 pandemic and efforts to contain it, including restrictions on travel and other advisories issued may have a significant effect on gold prices.
4.1.24 Negative Cash Flow from Operating Activities
The Company has no history of earnings and had negative cash flow from operating activities since inception. The Company’s mineral properties are in the exploration stage and there are no known mineral resources or reserves and the proposed exploration programs on the Company’s mineral properties are exploratory in nature. Significant capital investment will be required to achieve commercial production from the Company’s existing projects. There is no assurance that any of the Company’s mineral properties will generate earnings, operate profitably or provide a return on investment in the future. Accordingly, the Company will be required to obtain additional financing in order to meet its future cash commitments.
4.1.25 Going Concern Risk
The Company’s financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. The Company’s future operations are dependent upon the identification and successful completion of equity or debt financings and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that the Company will be successful in completing equity or debt financings or in achieving profitability. The financial statements do not give effect to any adjustments relating to the carrying values and classifications of assets and liabilities that would be necessary should the Company be unable to continue as a going concern.
4.1.26 Reporting Issuer Status
The Company is subject to reporting requirements under applicable securities law, the listing requirements of the TSXV and other applicable securities rules and regulations. Compliance with these requirements can increase legal and financial compliance costs, make some activities more difficult, time consuming or costly, and increase demand on existing systems and resources. Among other things, the Company is required to file annual, quarterly and current reports with respect to its business and results of operations and maintain effective disclosure controls and procedures and internal controls over financial reporting. In order to maintain and, if required, improve disclosure controls and procedures and internal controls over financial reporting to meet this standard, significant resources and management oversight is required. As a result, management’s attention may be diverted from other business concerns, which could harm the Company’s business and results of operations. The Company may need to hire additional employees to comply with these requirements in the future, which would increase its costs and expenses.
4.1.27 Risks Associated with Acquisitions
If appropriate opportunities present themselves, the Company may acquire mineral claims, material interests in other mineral claims, and companies that the Company believes are strategic. The Company currently has no understandings, commitments or agreements with respect to any material acquisition, other than as described in this AIF, and no other material acquisition is currently being pursued. There can be no assurance that the Company will be able to identify, negotiate or finance future acquisitions successfully, or to integrate such acquisitions with its current business. The process of integrating an acquired Company or mineral claims into the Company may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for ongoing development of the Company’s business. Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to goodwill and other intangible assets, which could materially adversely affect the Company’s business, results of operations and financial condition.
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4.1.28 Force Majeure
The Company’s projects now or in the future may be adversely affected by risks outside the control of the Company, including the price of gold on world markets, labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods, explosions or other catastrophes, pandemics, epidemics or quarantine restrictions.
4.1.29 Infrastructure
Exploration, development and processing activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important elements of infrastructure, which affect access, capital and operating costs. The lack of availability on acceptable terms or the delay in the availability of any one or more of these items could prevent or delay exploration or development of the Company’s mineral properties. If adequate infrastructure is not available in a timely manner, there can be no assurance that the exploration or development of the Company’s mineral properties will be commenced or completed on a timely basis, if at all. Furthermore, unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of necessary infrastructure could adversely affect its operations.
Exploration operations depend on adequate infrastructure. In particular, reliable power sources, water supply, transportation and surface facilities are necessary to explore and develop mineral projects. Failure to adequately meet these infrastructure requirements or changes in the cost of such requirements could affect the Company’s ability to carry out exploration and future development operations and could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.
4.1.30 Climate Change Risks
The Company acknowledges climate change as an international and community concern and it supports and endorses various initiatives for voluntary actions consistent with international initiatives on climate change. However, in addition to voluntary actions, governments are moving to introduce climate change legislation and treaties at the international, national, state/provincial and local levels. Where legislation already exists, regulation relating to emission levels and energy efficiency is becoming more stringent. Some of the costs associated with reducing emissions can be offset by increased energy efficiency and technological innovation. However, if the current regulatory trend continues, the Company expects that this could result in increased costs at some of its operations in the future.
The Company and the mining industry are facing continued geotechnical challenges, which could adversely impact the Company’s production and profitability. Unanticipated adverse geotechnical and hydrological conditions, such as landslides, floods, seismic activity, droughts and pit wall failures, may occur in the future and such events may not be detected in advance. Geotechnical instabilities and adverse climatic conditions can be difficult to predict and are often affected by risks and hazards outside of the Company’s control, such as severe weather and considerable rainfall. Geotechnical failures could result in limited or restricted access to mine sites, suspension of operations, government investigations, increased monitoring costs, remediation costs, loss of ore and other impacts, which could cause one or more of the Company’s projects to be less profitable than currently anticipated and could result in a material adverse effect on the Company’s business results of operations and financial position.
4.1.31 Information Systems and Cyber Security
The Company’s operations depend on information technology (“IT”) systems. These IT systems could be subject to network disruptions caused by a variety of sources, including computer viruses, security breaches and cyber-attacks, as well as disruptions resulting from incidents such as cable cuts, damage to physical plants, natural disasters, terrorism, fire, power loss, vandalism and theft. The Company’s operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Company’s reputation and results of operations.
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Although to date the Company has not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that the Company will not incur such losses in the future. The Company’s risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. As a result, cyber security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.
4.2 Risks Related to the Company’s Securities
4.2.1 Speculative Nature of Investment Risk
An investment in the Company’s securities carries a high degree of risk and should be considered as a speculative investment. The Company has no history of earnings, limited cash reserves, a limited operating history, has not paid dividends, and is unlikely to pay dividends in the immediate or near future. The likelihood of success of the Company must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the establishment of any business. An investment in the Company’s securities may result in the loss of an investor’s entire investment. Only potential investors who are experienced in high risk investments and who can afford to lose their entire investment should consider an investment in the Company.
4.2.2 Price may not Represent the Company’s Performance or Intrinsic Fair Value
The market price of a publicly-traded stock is affected by many variables not directly related to the corporate performance of the Company, including the market in which it is traded, the strength of the economy generally, the availability of the attractiveness of alternative investments, and the breadth of the public market for the stock. The effect of these and other factors on the market price of the Shares on the TSXV in the future cannot be predicted.
4.2.3 Securities or Industry Analysts
The trading market for the Common Shares could be influenced by research and reports that industry and/or securities analysts may publish about the Company, its business, the market or its competitors. The Company does not have any control over these analysts and cannot assure that such analysts will cover the Company or provide favourable coverage. If any of the analysts who may cover the Company’s business change their recommendation regarding the Company’s stock adversely, or provide more favourable relative recommendations about its competitors, the stock price would likely decline. If any analysts who may cover the Company’s business were to cease coverage or fail to regularly publish reports on the Company, it could lose visibility in the financial markets, which in turn could cause the stock price or trading volume to decline.
4.2.4 Price Volatility of Publicly Traded Securities
The Common Shares are listed on the TSXV. Securities of mineral exploration and development companies, have experienced substantial volatility in the past, often based on factors unrelated to the companies’ financial performance or prospects. These factors include macroeconomic developments in North America and globally and market perceptions of the attractiveness of particular industries.
The price of the Common Shares is also likely to be significantly affected by short-term changes in gold or other mineral prices or in the Company’s financial condition or results of operations. Other factors unrelated to the Company’s performance that may affect the price of the Common Shares include the following: the extent of analytical coverage available to investors concerning the Company’s business may be limited if investment banks with research capabilities do not follow the Company; lessening in trading volume and general market interest in the Common Shares may affect an investor’s ability to trade significant numbers of Common Shares; the size of the Company’s public float may limit the ability of some institutions to invest in the Common Shares; and a substantial decline in the price of the Common Shares that persists for a significant period of time could cause the Common Shares to be delisted from such exchange, further reducing market liquidity. As a result of any of these factors, the market price of the Common Shares at any given point in time may not accurately reflect the Company’s long-term value. Securities class action litigation often has been brought against companies following periods of volatility in the market price of their securities. New Found may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources.
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The market price of the Common Shares is affected by many other variables which are not directly related to the Company’s success and are, therefore, not within New Found’s control. These include other developments that affect the market for all resource sector securities, the breadth of the public market for the Company’s Common Shares and the attractiveness of alternative investments. The effect of these and other factors on the market price of the Common Shares is expected to make the price of the Common Shares volatile in the future, which may result in losses to investors.
4.2.5 Dilution
Future sales or issuances of equity securities could decrease the value of the Common Shares, dilute shareholders’ voting power and reduce future potential earnings per Common Share. New Found may sell additional equity securities in future offerings (including through the sale of securities convertible into Common Shares) and may issue additional equity securities to finance the Company’s operations, development, exploration, acquisitions or other projects. New Found cannot predict the size of future sales and issuances of equity securities or the effect, if any, that future sales and issuances of equity securities will have on the market price of the Common Shares. Common Sales or issuances of a substantial number of equity securities, or the perception that such sales could occur, may adversely affect prevailing market prices for the Common Shares. With any additional sale or issuance of equity securities, investors will suffer dilution of their voting power and may experience dilution in the Company’s earnings per Common Share.
4.2.6 Dividends
To date, the Company has not paid any dividends on the outstanding Common Shares. Any decision to pay dividends on the Common Shares of the Company will be made by the Board on the basis of the Company’s earnings, financial requirements and other conditions. See “Dividends and Distributions”.
4.2.7 TSXV Listing
The Company may fail to meet the continued listing requirements for the Common Shares to be listed on the TSXV. If the TSXV delists the Common Shares from trading on its exchange, the Company could face significant material adverse consequences, including: a limited availability of market quotations for the Common Shares; a determination the Common Shares are a “penny stock” which will require brokers trading in the Common Shares to more stringent rules and possibly resulting in a reduced level of trading activity in the secondary market for the Common Shares; a limited amount of news and analysts coverage for the Company; and a decreased ability to issue additional securities or obtain additional financing in the future.
5 QUEENSWAY PROJECT
5.1 Summary
The scientific and technical information in this section relating to the Queensway Project is derived from, and in some instances is a direct extract from, and is based on the assumptions, qualifications and procedures set out in, the Queensway Technical Report. The Queensway Technical Report was prepared for the Company by Dawn Evans-Lamswood, M.Sc., P.Geo, (the “QP”) of DEL Exploration, a Qualified Person and independent of the Company, as defined in NI 43-101. Such assumptions, qualifications and procedures are not fully described in this AIF and the following summary does not purport to be a complete summary of the Queensway Technical Report. Reference should be made to the full text of the Queensway Technical Report, which is available for review under the Company’s profile on SEDAR at www.sedar.com.
The technical content disclosed in this AIF was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer of the Company and a Qualified Person as defined in NI 43-101.
The technical information in the section 5.1 through to, and including, 5.13 at dated as of the effective date of the Technical Report. The information in section 5.14 is dated as disclosed in each respective sub-section.
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5.2 Property Description and Location
5.2.1 Location and Access
The Queensway Project is located in north central Newfoundland 12 km to the west of Gander and covers 151,030 hectares of land (Figure 1). The Queensway Project is centred within NTS 002D and NTS 002E within the Central Newfoundland Gold Belt. The Queensway Project is comprised of the following three main areas:
1) | Gander Gold North (“GGN”) - located east of the towns of Glenwood-Appleton, to the north of Gander Lake, covering the Appleton Fault Zone (“AFZ”) and Joe Batt’s Pond Deformation Zone (“JBPDZ”) and associated areas around them. GGN comprises of 36 mineral licenses, totaling 15,650 hectares; |
2) | Gander Gold South (“GGS”) - located to the south and west of Gander Lake along the eastern side of the NW Gander River, extending to the east to the Southwest Gander River area and to the west to near the Baie d’Espoir road. GGS comprises of 48 mineral licenses, totaling 130,780 hectares; and |
3) | Twin Ponds / Island Pond (“Twin Ponds”) - located to the west of the Gander River and northwest of Glenwood-Appleton, separated from the other licenced areas on the west side of the Queensway Project. Twin Ponds comprises of 2 mineral licenses totaling 4,600 hectares. |
Access to the Queensway Project is through the Trans-Canada Highway (“TCH”), that passes through the southern portion of the AFZ and JBPDZ claim areas, and the Northwest Gander Road (“NWG Road”) that extends along the western portion of the Queensway Project, to the south and west of Gander Lake. Gravel woods access roads, such as the AFZ access, the JBPDZ access, the JBP road and the roads to the east of the steel bridge across the Northwest Gander River extend through most of the property, with areas in the extreme SE and SW the most difficult to access. Many quad and harvester trails and winter roads are also present in more recently cut over areas providing excellent access for heavy equipment when required.
Transportation availability includes the international airport at Gander, which has bush plane and helicopter bases, a helicopter base in Appleton and shipping through the ports of Lewisporte and Botwood, 25 and 70 km to the west of Gander, respectively, and north of the TCH, both with good harbours although problems persist with winter shipping due to sea and pack ice.
Electricity is available from the Newfoundland provincial grid, which has three transmission lines through the Queensway Project as follows:
1) | A 350 kV HVdc direct current line which passes through the approximate centre of the GGS licences; |
2) | Two 138 kV HVac transmission lines to the north of the TCH crossing the AFZ and JBPDZ trends on the GGN licences; and |
3) | A 69 kV HVac transmission line that approximately parallels the TCH to the north across the AFZ and JBPDZ trends on the GGN licences and follows the TCH and secondary routes. |
In addition, electrical power is supplied, through the provincial grid, to the towns of Glenwood and Appleton which are surrounded by the Queensway Project licences.
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Figure 1. Queensway Project Location Map. Source: New Found, 2020
5.3 Title, Royalties and Encumbrances
5.3.1 Title
The Queensway Project contains 86 map staked mineral licenses containing 6,041 mining claims covering 151,030 hectares.
All of the lands comprising the Queensway Project are map staked crown mineral licenses issued by the Department of Natural Resources Newfoundland, Mines Branch (the “Department”). Mineral licenses are acquired by online staking in the province of Newfoundland. Licenses can consist of 1 to 256 claims per license. Assessment work is required in order to keep them in good standing – the first five years require $200, $250, $300, $350 and $400 per year per claim, respectively. Assessment requirements continue for up to 30 years with increasing costs as time passes as follows: $600 per claim for years 6 through 10, $900 per claim for years 11 through 15, $1200 per claim for years 16 through 20, $2000/claim for years 21 through 30. License renewal fees paid directly to the Department, which also increase as time goes by, are also required every 5 years and annually for years 21 through 30.
The total exploration expenditures required for 2020 to maintain the claims in good standing is $1,603,242 along with $10,775 in license renewal fees. The total exploration expenditures required for 2021 to maintain the claims in good standing is $1,979,605 along with $97,700 in license renewal fees.
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New Found does not own any surface rights on the Queensway Project. Surface rights owners within the Queensway Project boundaries include cabin owners in the JBPDZ and Northwest Gander River areas and the residents of the towns of Appleton and Glenwood. New Found maintains the legal right to access and conduct exploration on all of the lands comprising the Queensway Project lands that lie on crown land without encumbrance with exception of necessary exploration permits for the work being conducted on the Queensway Project.
New Found recently identified an irregularity with respect to the registration of a mineral license at the Queensway Project in the physical Mineral Claims Recorder (“MCR”) of Newfoundland related to an improper recording of a previous transfer of the mineral license (the “License Transfer Irregularity”). New Found has filed rectifying documents with the MCR to resolve the License Transfer Irregularity, which were accepted by MCR on June 24, 2020.
5.3.2 Royalties, Agreements and Encumbrances
The project rights comprising the Queensway Project were acquired by map staking mineral licenses and making staged payments in cash and Common Shares from 2016 through 2019 under separate option agreements (the “Option Agreements”). All of the Option Agreements have been fully exercised resulting in 100% ownership by New Found of the subject mineral licenses comprising the Queensway Project. The lands subject to the Option Agreements (Figure 2) carry various NSR royalties ranging from 0.6% to 2.5% which can be reduced by 0.5% to 1%, at the Company’s option, with payments ranging from $250,000 to $1,000,000 to the optionors under the applicable Option Agreements (Figure 3). The total cost of the NSRs that may be purchased at the Company’s discretion is $5,250,000. In addition to the Option Agreements, New Found also conducted map staking resulting in 49 map staked mineral licenses which are held 100% by the Company.
Figure 2. Map showing the properties covered by the Option Agreements and map staked mineral licenses. Source: New Found, 2020
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Option Agreement |
Completion
Date |
Payment Outstanding | NSR | |
2020 | 2021 | |||
Linear and JPB Linear Project | Fully Executed | 1.6% NSR | ||
Unity Project | Fully Executed | 1.6% NSR with $1M buyback of 1.0% | ||
United Gold | Fully Executed | 0.6% NSR | ||
Golden Bullet | Fully Executed | 1.6% NSR with $1M buyback of 1.0% | ||
Blackmore option | Fully Executed | 0.6% NSR | ||
Guinchard claims | Fully Executed | 1% NSR with $1M buyback of 0.5% | ||
JPB Linear Project | Fully Executed | 1.6% NSR with $1M buyback of 1.0% | ||
P-Pond Project | Fully Executed | 1.0% NSR with $0.25M buyback of 0.5% | ||
Lush Property | Fully Executed | 2.5% NSR with $1.0M buyback of 1.0% |
Figure 3. Summary of Option Agreements. Source: New Found 2020
Between August 2016 and April 2017, the Company acquired a 100% interest of twenty-one licences covering 73,830 hectares through map staking. In April of 2020, an additional twenty-eight mineral licenses were staked totalling 64,175 hectares. In March 2019, New Found completed a financing with GoldSpot Discoveries Corp. (“GoldSpot”), which included the grant of an NSR to GoldSpot covering most of the existing twenty-one staked licenses and parts of the optioned properties. This royalty ranges from 0.4 - 1.0% such that royalties on the subject lands of the agreement do not exceed 1.0% (the “GoldSpot Royalty”). Additional lands staked by New Found in April 2020 are also subject to the GoldSpot Royalty.
After the application of the 0.6% area of influence included in the Linear and JBP Linear Project and the Golden Bullet option agreement, the total NSR royalty for the Queensway Project ranges from 0.6 to 2.5% before the application of NSR buy back provisions. After the application of buy back provisions, the total net smelter royalty ranges from 0.5 to 1.6%.
5.3.3 Environmental and Permitting Liabilities
All exploration activities, including reclamation, must comply with all pertinent federal and provincial laws and regulations, the fundamental requirement of which, is that exploration on crown land must prevent unnecessary or undue degradation or impact on fish and wildlife and requires reclamation if any degradation or impacts occur. All exploration activities in Newfoundland require an Exploration Approval from the Department prior to the start of work. Two Exploration Approvals are in place for the Queensway Project as of the date of the Queensway Technical Report.
The first Exploration Approval is for diamond drilling (50 Holes), surface trenching (50 trenches), ground geophysics, prospecting, geochemistry on the GGN area. The second Exploration Approval is for airborne geophysics, geochemical surveying and prospecting over the entire Queensway Project area prior to April, 2020. The Exploration Approvals expire one year from the date they are approved unless the exploration is completed earlier and is reported as being complete. Any changes to the planned work have to be submitted to the Department and either an amended Exploration Approval is given or a new application has to be made. The additional lands staked in April 2020 will require new Exploration Approvals.
Water removal from ponds, streams and other waterways for trenching (washing trenches) or drilling requires a water use permit, which is granted for 1 year. One water use permit is in place for the GGN claims and related diamond drilling and trenching. The permit is issued until December 5, 2020. This permit can be renewed, or new permit issued to cover ongoing exploration activities.
The 2019 activities on the Queensway Project required the renewal of certain regional prospecting and geochemistry permits; a renewal was required for the JBPDZ trenching permit along with the associated water use permit; additional permits were also acquired for diamond drilling along with a separate water use permit. Any number of individual Exploration Approvals can be applied for; typical delays in permit approval range from 30 to 60 days.
Although the author of the Queensway Technical Report is not a QP with respect to environmental issues, in her opinion, environmental liabilities appear to be limited to ground disturbances related to the trenching carried out in 2017 and again in 2018, which require reclamation at a future date. The JBPDZ area, the area impacted by the trenching, has been heavily logged over recently with extensive networks of woods access roads, both all season and winter only, and cutovers which have been scarified and partially replanted using silviculture. Most of the 2017 trenches and many of the 2018 trenches have been reclaimed as required except for the requirement to replant small trees using silviculture at a future date. Historical trenches, some of which haven’t been reclaimed, on the AFZ, JBPDZ and the GGS area are not the responsibility of New Found under present laws unless the Company conducts additional trenching in those areas. There is little evidence of drilling exploration by previous operators, which have been naturally reclaimed by decades of natural plant growth that have removed most traces of prior activities.
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In the opinion of the QP of the Queensway Technical Report, diamond drilling conducted during 2019 does not present any apparent environmental liabilities. All drill sites have been cleaned of drill cuttings; drill pads have been reclaimed to prevent potential of negative environmental impacts.
Generally, the mineral licenses are available for exploration activities year-round and only subject to the conditions of the Exploration Approvals and water use license; other activities such as construction, road building, camps and water crossings may require additional permits from outside of the Department. Mineral licenses within the southernmost portion of GGS are restricted from exploration activities from mid-May to early-July due to spring habitat for Newfoundland caribou.
There are no significant factors or risks that may affect access, title, or right or ability to perform work on the Queensway Project.
5.4 History
Property ownership with respect to lands comprising the Queensway Project have changed ownership numerous times since prospecting the area began. The following section describes in detail past owners of the land and outlines the history of ownership in the various areas.
5.4.1 Twin Ponds – Island Pond
Set forth below is the chronological history of ownership and exploration at the Twin Ponds portion of the Queensway Project:
· | 1988 - Noranda Inc. (“Noranda”) was the first to conduct mineral exploration in the Twin Ponds area, staking in 1988 and exploring using prospecting and geochemistry into 1990. From 1991 to 1995 no exploration took place and the licenses held by Noranda were eventually cancelled. |
· | 1995 - prospectors Jim Bouzanne, Michael Stacey, and L. Dwyer focused their efforts on the Big Pond area near the New Found current licenses. These licenses were eventually cancelled. |
· | 2002 - Crosshair Exploration & Mining Corp. staked Big Pond, Dan’s Pond, Island Pond Salmon Pond area. Their exploration attracted the attention of Rubicon Minerals Corp. and Paragon Minerals Corp. and regional exploration consisting of prospecting and geochemistry continued until 2004. All licenses were eventually cancelled. |
· | 2007-2015 – prospectors, including Michele and Nath Noel, Gary and Donna Lewis, Nehemiah Pinsent, Larry Quinlan, Gordon Lawrence and Jessica Bjorkman in later years, staked claims and explored the Big Pond, Dan’s Pond and Shirley Lake areas, however all associated licenses were cancelled within 2 years of staking. |
The current licences with respect to the Twin Ponds were optioned to New Found by Nigel Lewis shortly after they were staked in mid-2016. Exploration thus far by New Found has included: airborne EM and high-resolution magnetics and follow up prospecting and limited geochemistry.
5.4.2 Gander Gold South
The GGS portion of the Queensway Project has a long and complex history of ownership. The below description does not refer to specific land claim boundaries but instead discusses the property areas ownership in general terms.
· | 1981 - Minorex Limited held a claim in the Little Gander Pond area. |
· | 1984 - Glenn R. Clark & Associates Limited held licences in the Caribou Lake area. |
· | 1985-1987 – Corona Corporation (“Corona”) held claims in the Hunts Pond and Southwest Gander River Area. |
· | 1985-1988 - Prospector Lewis Murphy and his company Commodore Mining Corp. held exploration licenses in the area. |
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· | 1985-1990 - Noranda claimed Northwest and Southwest Gander Rivers, Gander Lake, Gander River areas. Noranda was the major licence holder with large land packages over the Jumbo Brook, Paul’s Pond and Greenwood Pond areas. These licenses were either surrendered or cancelled in the early 1990’s. |
· | 1986-87 - Kidd Creek Mines Ltd. partnered with Noranda Falconbridge for claims in the Northwest Gander River area as well as the Caribou Lake area east of the claims. |
· | 1988-1992 - Roycefield Resources Ltd. claimed the Beaver Brook area and optioned licenses over antimony discoveries made by Noranda, with the property becoming the Beaver Brook Antimony Mine. |
· | 1988-1989 - BP Resources Canada Ltd. held licences in the Great Bend and Coy Pond areas just south west of the current claims. |
· | 1989-1990 - Prospector Lew Murphy claimed the Bear Pond and Rollins Pond areas. |
· | 1993-1995 - John Clarke claimed the Greenwood Pond and Paul’s Pond area. |
· | 1995 - New Island Minerals Inc. claimed the Northwest Gander River area. |
· | 1995 - Roland Butler, John Clarke, Wayne Pickett and Rod Churchill claimed the Southwest Gander River area. |
· | 1995-2000 - Prospectors Benjamin Critchfield, Denis Walsh and Timothy Froude held licences in the Dead Wolf Pond area. |
· | 1995-2001 - Altius Resources Inc. (“Altius”) claimed the Greenwood Pond area and other areas along the Northwest Gander River. |
· | 1995-2000 - Prospector Lai Lai Chan claimed the Paul’s Pond and Greenwood Pond areas. These claims were tied on to Altius. Robert Stares held ground in the Caribou Lake area. Paul Crocker held claims in the Hunts Pond area. |
· | 1999 - Cornerstone Resources Inc. (“Cornerstone”) claimed the Southwest Gander River area. |
· | 2001 -2002 - Prospector Kevin Keats claimed the Eastern Pond area. Allen Keats held some licenses in the Little Gander Pond area. |
· | 2001 -2002 - South Coast Ventures claimed the Northwest Gander River, Joes Feeder, Steel Bridge, Jumbo Brook, and Greenwood Pond areas. Buchans River Ltd. held minor ground at Hunts Pond. |
· | 2002-2010 – Prospector period with most ground being held by independent prospectors. Lai Lai Chan, Darrin Hicks, Nathaniel Noel and E. Michelle Noel held ground in the Berry Hill area. Roland Quinlan, Fred & Wesley Keats, Brian Rowsell, James & Calvin Crocker held ground in the Dead Wolf Pond, Caribou Pond, and Southwest Gander River area. Stephen Baldwin and the Quinlan’s held minor claims in the Hunts Pond area and Suley Keats Sr., Alexander Duffitt, Gene Hedges held licences in the Little Gander Pond and Southwest Gander River area. The Dead Wolf Pond area was particularly busy by prospectors Eddie Quinlan, Frank Pollett, Glenn Stacey, John Sceviour, Hayward Critchley, and the Crocker family. |
· | 2003-2004 - Most licenses reverted to the original prospectors who held the most promising ground with limited company interest other than Altius. Much of the area remained unclaimed. |
· | 2003-2005 - Candente Resources Corp. (“Candente Resources”) claimed the Eastern, Paul’s Pond and Outflow areas and Paragon Minerals held some ground near Bear Pond. |
· | 2003 – 2011 – Mostly prospectors claims with interest by Altius in the Northwest Gander River, Caribou Lake, Hunts Pond, and Dead Wolf Pond areas, and Cornerstone along the Northwest Gander River. |
· | 2009- 2010 - Golden Dory Resources Corp. claimed the Greenwood Pond area. |
· | 2011 - Metals Creek Resources Corp. claimed the Gander Lake. |
· | 2011- 2012 - Altius allowed many claims to revert back to prospectors or be cancelled for the Northwest and Southwest Gander Rivers and Greenwood Pond. |
· | 2012-2016 - A few prospectors held claims along the Northwest and Southwest Gander Rivers. Fred and Wesley Keats held ground along the Southwest Gander River. Andy Budden, Jeffrey LeDrew, Shane and Robert Stares, and Wayde Guinchard held licences in the Dead Wolf Pond and Southwest Gander River area. Michelle Noel, Fred and Wesley Keats, Brian Rowsell, Clyde McLean, Allen Keats, and Jeffrey Neville all held licences in the Southwest Gander River area. |
· | 2012-2015 – a few prospectors held claims along the Northwest and Southwest Gander Rivers. |
· | 2016-2020 - Vulcan Minerals held ground in the Northwest Gander River more towards the Lizard Pond showing. |
· | 2016 – Present - New Found staked the licenses that make up the bulk of the GGS area and optioned prospectors claims in the Paul’s Pond and Greenwood Pond areas. |
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5.4.3 Gander Gold North
The GGN portion of the Queensway Project was acquired by New Found by option in late 2016 through 2018. The optioned properties covered known gold showings along the AFZ and JBPDZ faults. Continued staking by the Company in 2017 and 2020 added to the claim holdings in the area. Below is the rest of the ownership history for the claims on the property:
· | 1980 - Westfield Minerals Ltd. (“Westfield”) worked the Jonathan’s Pond area. Here they staked a gold showing discovered by government geologists in 1980, the first recorded gold exploration in the area. |
· | 1981 and 1985 - Prospector Lewis Murphy worked the Gander River Ultramafic Belt line (“GRUB Line”) with MD & K Agencies and Newmont Canada. |
· | 1984 - Duval Int’l Corp. for Glenn R. Clark & Associated Limited conducted basic geological mapping, VLF ground surveys, and some till sampling along the GRUB Line north of Jonathan’s Pond. |
· | 1984-1986 - Noranda worked north of Gander Lake, prospecting for gold, dominating exploration activity until joint venturing with Gander River Minerals Ltd. on the more prospective ground from 1992 to 1997 when most claims were cancelled. |
· | 1987-1991 – Falconbridge Ltd. worked the JBPDZ. No records of the results are available. |
· | 1999-2000 - United Carina Resources Corp. with partner Consolidated Pine Channel Gold Corp. worked the AFZ and optioned claims which had been targeted earlier by Noranda and Gander River Minerals. |
· | 1997-1999 - Krinor Resources Inc. worked the AFZ and the JBPDZ zones. Prospector Roland Quinlan began prospecting the area east of Rocky Pond west of Jonathan’s Pond and the Gander River. |
· | 1999 – 2001 - Several local prospectors worked the Gander River, Gander Lake, Millers Brook, Appleton and Joes Batts Pond areas to the north of Gander Lake into the Bellman’s Pond and Jonathans Pond region near the GRUB Line. Cyril Reid, Roland Quinlan and his brothers, Jim Bouzane, and Calvin Crocker among others. |
· | 2001-2011 - Rubicon Minerals Corp. and Paragon Minerals Corp. worked the AFZ and JBPDZ. |
· | 2002-2003 - Crosshair Exploration & Mining Corp. worked ground near Bellman’s Pond and Rocky Pond along with minor activity by WAVE Exploration Corp., and prospectors Gary Lewis and Perry English. |
· | 2004 - 2005 - Spruce Ridge Resources Ltd. explored the Little Harbour and Gander Lake North areas. |
· | 2008 - 2015 - Many properties reverted to the crown and were re-staked by prospectors who targeted the gold showings defined in the earlier exploration activity. |
· | 2011 - Altius explored the Jonathan’s Pond area. |
· | 2016 - Present – New Found explored the AFZ and JBPDZ zones and began optioning gold properties and added staking and options. By 2018 New Found established the current land package. |
5.4.4 Past Exploration
Outside of the academic studies that delineated the geology of the Gander group, Davidsville group and area lithologies, there was very little formal mineral exploration activity for gold in the Queensway Project area until Noranda’s activities in the 1980’s.
· | 1950’s through the 1960’s – NALCO conducted reconnaissance base metal prospecting along the Great Bend portion of the Gander River Ultramafic Complex (1953-1954) and Bell Asbestos examined the complex in 1963. During this time talc, copper, zinc, tungsten, arsenopyrite, and asbestos showings were discovered in the Dead Wolf, Caribou Lake and Hunts Pond areas. |
· | 1970’s through the 1980’s - Early exploration continued with a focus on the potential for base metals and industrial minerals, such as chromite, magnesite and asbestos in the Gander River Ultramafic Complex (“GRUC”). Companies included John’s Manville and International Mogul Mines Ltd. (“International Mogul”). |
· | 1971 – International Mogul, north of Jonathan’s First Pond, drilled a pyrite-chalcopyrite-sphalerite showing to northeast of the Queensway Project. |
· | 1980 - 1981 – Westfield worked in the Jonathan’s Pond area and conducted a follow-up program of rock sampling, prospecting, mapping and trenching to evaluate a gold-arsenopyrite showing reported by geologist Frank Blackwood in 1980, thus beginning gold exploration in the region. |
· | 1983 – early 1990’s - Noranda initiated gold exploration on the GGS and GGN properties using regional till sampling, prospecting, and stream heavy mineral concentrate surveys identifying significant gold in till anomalies both to the north and south of Gander Lake. Follow up exploration, including prospecting, soil geochemistry, ground geophysics, trenching and diamond drilling, defined gold showings including Duder Lake, and Mount Peyton, to the northwest of Gander River, Aztec, the Greenwood Pond and Pauls’ Pond showings to the south of Gander Lake, and the Knob, Bowater and others in the AFZ. The Andromeda gold showing near Rocky lake was discovered in 1991 north of Jonathans Pond. The soil / till geochemistry also indicated a major antimony trend along the northwest Gander River that resulted in the Beaver Brook antimony deposit being discovered during follow up prospecting, trenching and diamond drilling. Gold targets were identified throughout the JBPDZ and AFZ, in the GGN area to the north of the lake, as well as at Paul’s and Greenwood Ponds to the south of Gander Lake in the GGS area. |
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Subsequent exploration by Noranda and other companies and prospectors has resulted in the discovery of many gold showings such as the Dome, Road and Keats/Baseline showings along the AFZ, the H-Pond, Pocket Pond and Lachlan along the JBPDZ, the Goose, Road Gabbro and LBNL showings at Paul’s Pond, and the Aztec, Hornet, A-zone Ext as well as the Greenwood showings near Greenwood Pond. Visible gold was noted in many of these showings.
5.4.5 Historic Drilling
To date there has been over 25,538 metres of core drilled directly on the Queensway Project in 218 holes. All holes were BQ, NQ and HQ size core drilled from the wireline drills available during the time. No rotary or other drilling types have been recorded. No holes have been drilled on the Twin Ponds portion of the property, although there has been 3 holes drilled at the Blue Peter (BP-88-01 to 03) and 4 holes at the Clydesdale (CD-05-01 to 05) showings just off the northern portion of the licences in that area. South of Gander Lake there have been 20 holes completed with over 2,246 metres of core on the Paul’s Pond Area and Greenwood Pond Area.
Older drilling south of Gander Lake includes 5 holes drilled by NALCO in 1955 with an intersection of 14.38% Zn, 4.08% Cu, 0.80% Pb, 0.80% Ag, and 0.0 I oz of Au over a narrow width. Bison Petroleum also drilled in the Gander River Complex in 1969 with a total of 6 holes and 831.8 metres. Two of these holes intersected anomalous silver values with weak base metal and gold numbers. In 1979 Hudson’s Bay Oil and Gas collared one hole at Dead Wolf in the “Effingham Zone” to a depth of 48.19 metres finding no significant mineralization.
The majority of diamond drilling has occurred North of Gander Lake in the AFZ and JBPDZ areas. North of the TCH along the AFZ there are a total of 49 drill holes and over 5,922 metres of core recovered. South of the TCH on the same trend there are 83 drill holes and over 8,403 metres of core recovered. More recent drilling has occurred along the JBPDZ trend which has seen 54 holes completed with a total of over 9,872 metres of core recovered to date.
New Found has been able to verify the location of 37 holes on the Queensway Project to date, as they were found during field work. Of the 37 encountered, most holes lie within a reasonable tolerance of the estimated location describe in logs, or on historical maps. Of the holes found by New Found 10 holes from the Knob Showing on the JBPDZ were determined to be off from the recorded location by a larger variance then deemed acceptable. As a result, the SV series holes drilled by Soldi Ventures in 2012 will need to have their collars found and verified by GPS to determine the correct location.
Historic drilling revealed multiple areas of significant gold enrichment within a proximity to the known major geological structures in the area. The depth of mineralization ranges from surface down to 200m and greater in places. With several of the historical showings subject to limited drilling numerous gold enriched quartz veins have been encountered indicating various orientations. Continuity between showings has in some cases been established for up to 700m for the H Pond showing but, in many cases, significant gaps in drilling do not allow for continuity to be established.
5.4.6 Historic Mineral Resource and Reserve Estimates
In 1994 Gander River Minerals optioned the Knob property including the Knob prospect from Noranda. Drilling by Gander River Minerals allowed for production of a historical resource estimate of 236,391 tonnes grading 10.26 g/t Au containing 77,943 oz Au. This historical estimate was published by Gander River Minerals in the technical document titled “Eighth Year Assessment Report Summary of Diamond Drilling Activities Conducted Within Licence No. 4344 The ‘Knob’ Prospect N.T.S. 20/15” authored by Dean Sheppard, 1994.
The data used in the preparation of the historical resource estimate does not meet the current standards of exploration quality assurance and quality control protocols such that it should not be relied upon to produce a current resource estimate for the Knob prospect. Significant additional drilling and data verification would be required to ensure the quality of historic data meets current standards for use in a resource estimate. Additionally, the methods used in the preparation of the resource as a block long section methodology include certain assumptions of geological continuity and grade variography are not adequate to treat this as a current mineral resource estimate. The historical resource estimate is not classified in accordance with section 1.2 or 1.3 of NI 43-101 and therefore cannot be compared with current mineral resources or mineral reserves as defined in sections 1.2 or 1.3 of NI 43-101 as there has been no work completed to verify and classify such historical resource estimate.
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A Qualified Person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and the Company is not treating the historical estimate as current mineral resources or mineral reserves.
5.5 Geological Setting, Mineralization and Deposit Types
5.5.1 Regional and Local Geology
The island of Newfoundland is the northeastern most part of the Appalachian orogen. It is divided into four major tectonostratigraphic zones, which are (from west to east): Humber, Dunnage, Gander and Avalon. These zones comprise the product of peri-Laurentia and peri-Gondwana micro-continents rifting during the opening of the Iapetus and Rheic oceans, and subsequent collision with oceanic terranes during ocean closure and terrane accretion in the early-to mid-Paleozoic Era.
The western half of the Dunnage zone (Notre Dame subzone) represents a peri-Laurentia continental arc complex. On the eastern side of the Dunnage zone, where the Queensway Project is located, the exploits subzone represents the meta- sedimentary and meta-igneous remnants of a peri-Gondwanan arc/back-arc complex. Cambrian to Silurian supracrustal rocks are intruded by Silurian to Devonian granitoid suites. The Exploits subzone is delineated by the Red Indian line to the west and the GRUB Line to the east. Rocks of the GRUB are Upper Cambrian in age. They represent relics of an ophiolitic complex thrusted upon Middle Cambrian to Lower Ordovician arenites and shales of the Gander Zone, which were deposited on the leading edge of the Gondwanan margin. The GRUB Line and Dog Bay Line are significant continental sutures formed at the closing of the Iapetus Ocean and traceable through Newfoundland and into Great Britain (Figure 4).
Figure 4. Image of major suture zones. Modified from J. C. Pollock et al. Source: New Found 2020
Accretion events started with the Taconic orogeny, between Late Cambrian and Late Ordovician Periods, and the Penobscot orogeny that was in part coeval. The former occurred along the Laurentia margin with the collision of the Notre Dame arc against the continental crust of the Humber zone, while the latter took place along the Gondwana continent. The Penobscot orogeny mainly involved the obduction of ophiolitic complexes on the Gondwana margin. The predominantly Silurian Salinic orogeny consisted in the closure and partial subduction of the basins containing rocks of the Exploits subzone, as Laurentia and Ganderia converged. Ganderia was a passive margin separated of Gondwana by narrow oceanic stretches and the Neoproterozoic arc complex of Avalonia. Avalonia collided with Laurentia during the Acadian orogeny (450-400 Ma) and the final stage of the Appalachian orogeny consisted in the docking of the Meguma zone (Nova Scotia) during the Neoacadian orogeny from Middle Devonian to Early Carboniferous Periods.
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5.5.2 Property Geology
The Queensway Project is located within the Exploits Subzone of the Dunnage-Gander zone and lies just to the west of the GRUC fault, which is the Dunnage-Gander zone’s boundary. It mostly comprises Cambrian to Silurian meta- sedimentary rocks of the Davidsville group. The Davidsville group is divided into the Outflow Formation and the Hunt’s Cove Formation. The portion of the Queensway Project south of Gander Lake also includes the boundary between the Davidsville and Indian Island Groups (Figure 5). The latter mainly comprises Silurian siliciclastic rocks, intruded by the Mount Peyton Intrusive suite. Figure 6 below demonstrates the overall geological zones of the Queensway Project.
Figure 5. Geological context of the Queensway Project. circa 2018: (A) Location of the property with respect to major terranes of Newfoundland, (B) Regional geological context. Source: New Found 2018
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Figure 6. Overall Geological Zones of the Queensway Project. Source: New Found 2020
5.5.3 Structure
Structure is a key aspect of the Queensway Project and critical control of gold mineralization. Most rocks display a penetrative, sub-vertical, axial planar structural fabric (S1) trending NNE-SSW. Local decimetre-scale, open to isoclinal F1 folds have been observed, shallowly-plunging to the north-west. Occasional SW-plunging folds are interpreted to be caused by D2 interference, consistent with other studies.
Variations in the attitude of S1 have been documented. These variations are interpreted as resulting from the development of crosscutting NE-trending dextral fault/shear zones, consistent with a late stage dextral transpression during the main deformation event. Drag folds affecting the main fabric are locally present. Such fault zones are present at outcrop-scale, typically with 0.5 to a few metres offset determined in the presence of quartz veins. The largest example of such shear zone occurs on the north shore of Gander Lake, west of the Gander River. It consists in a 10-20m wide, sub-vertical zone of intense S1 disruption trending at N75.
The S1 fabric is frequently affected by crosscutting D2 structures. Such structures typically consist in early to well- developed kink banding, fault planes and, locally, open folds. They trend N125-N130 and dip around 60°SW. A conjugate, secondary set of faults and kink banding is locally present at approximately 30°. Relative kinematic indicators indicate NW-SE extension and NE-SW compression.
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Most structures observed in the field are of metre to decametre-scale. The lithological homogeneity of rocks over the Queensway Project hinder the identification and delineation of major structures at property scale. Consequently, the Company relies on geophysical data to identify probable structures.
On the macroscopic scale the intersections of the ENE and NNE faults have shown to be favourable locations for gold mineralization historically as shown in Figure 7 below. This is possibly due to increased dilative activity at these points. There are several other areas of the GGN area that show similar intersecting geophysically interpreted structures and could indicate higher potential for gold mineralization.
As part of New Found’s targeting exercise and with the help of GoldSpot Discoveries several areas of high priority and second priority targets have been developed in the GGN area through the use of geophysical interpretation, geochemical interpretation, structural interpretation and machine learning. Priority target areas are shown on Figure 7.
Figure 7. High Priority and Second Priority Tier 1 Targets and intersecting. Source: New Found, 2020
5.5.4 Mineralization
Gold occurrences on the property exist in auriferous quartz veins displaying variable intensity of hydrothermal alteration and sulphide content. In typical showings gold mineralization occurs in mudstone-hosted, conjugate sets of fault-fill and extensional quartz veins with associated hydrothermal alteration. Occasionally veins are hosted in sandstone beds as predominantly extensional veins, as sandstone beds are more competent than mudstone.
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Fault-fill and extensional veins typically show evidence of intense deformation, characterized by boudinage, shearing and folding. They are also affected by late-D1, NE-trending, dextral shear fault zones. In some occurrences, auriferous veins and structures crosscut the main fabric (S1). However, they are also affected by D1-related faults, indicating a late- D1 emplacement timing.
Auriferous quartz veins frequently contain fine-grained pyrite, arsenopyrite and visible gold. Less systematically, they include chalcopyrite, galena and boulangerite. Sulphide content often is higher in the surrounding host rock than in the vein. Iron carbonates can form up to 10% of the vein content, in addition to the alteration halo around the vein. Iron carbonate form subhedral to euhedral crystals in the vein and are present as disseminated anhedral grains in the surrounding mudstone matrix.
There are over 100 gold showings on and around the Queensway Project, however the most notable mineralized zones in the Queensway Project are the JBPDZ, which includes the H-Pond, Pocket Pond, Glass, Logan and Lachlan showings and the AFZ which includes the Dome, Little, Knob, Letha, Lotto, Grouse, Road, Bullet, Trench 26, Cokes, Powerline, Keats and Bowater showings (Figure 8). A number of gold mineralized occurrences also occur within the GGS claim group including the Greenwood Pond, Hornet, North Pauls Pond, Aztec, Goose, Road Gabbro and LBNL showings.
Figure 8. Selected Prospects along the AFZ and JBPDZ. Source: New Found, 2020
* The historical resource estimate disclosed in Figure 8 was published by Gander River Minerals in the technical document titled “Eighth Year Assessment Report Summary of Diamond Drilling Activities Conducted Within Licence No. 4344 The ‘Knob’ Prospect N.T.S. 20/15” authored by Dean Sheppard, 1994. The reader is cautioned that the data used in the preparation of the historical resource estimate does not meet the current standards of exploration quality assurance and quality control protocols such that it should not be relied upon to produce a current resource estimate for the Knob prospect. Significant additional drilling and data verification would be required to ensure the quality of historic data meets current standards for use in a resource estimate. Additionally, the methods used in the preparation of the resource as a block long section methodology include certain assumptions of geological continuity and grade variography that are not adequate to treat this as a current mineral resource estimate. The historical resource estimate is not classified in accordance with section 1.2 or 1.3 of NI 43-101 and therefore cannot be compared with current mineral resources or mineral reserves as defined in sections 1.2 or 1.3 of NI 43-101 as there has been no work completed to verify and classify such historical resource estimate. A Qualified Person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and the Company is not treating the historical estimate as current mineral resources or mineral reserves
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Readers are cautioned that mineralization results presented below are shown as channel lengths, drill intercept lengths and not as true widths of mineralization. In many cases the true width of mineralization is not known at this time. Drill hole coordinates and full listing of significant historical diamond drill hole intercepts can be found in the Queensway Technical Report, which is available for review under the Company’s profile on SEDAR at www.SEDAR.com. Grab sample results presented below are highlighted values and are not indicative of the true grade of mineralization found at each of the mineral prospects and showings.
5.5.5 AFZ
The AFZ is a relatively linear set of faults and vein arrays which has been traced along roughly 5 km on the western side of the GGN claim group. The fault structure has not been identified in outcrop owing to the glacial scouring, however, its presence is easily identifiable in diamond drill core and by observation of satellite imagery which delineates a clear NNE linear depression filled with glacial till and overlain by creeks and ponds. In drill core the fault zone is represented by a 100-200m wide zone of locally intense fault brecciated sedimentary rock and fault gouge and is often filled with large volumes of quartz and iron carbonate. Gold mineralization is spatially associated with the main fault lineament as numerous gold occurrences are found within hundreds of metres of the lineament. The exact structural relationship between the known gold occurrences and the lineament are not yet known. Low gold values have also occurred within drill core that has intersected the main fault lineament.
The AFZ contains a number of gold showings including the Dome, Little, Knob, Letha, Lotto, Grouse, Road, Bullet, Trench 26, Cokes, Powerline, Keats and Bowater (Figure 9, Figure 10, Figure 11 and Figure 12).
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Figure 9. Selected Prospects along the AFZ. Source: New Found, 2018
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Figure 10. Selected Prospects along the AFZ showing drill intercept values Source: New Found, 2020
* The historical resource estimate disclosed in Figure 10 was published by Gander River Minerals in the technical document titled “Eighth Year Assessment Report Summary of Diamond Drilling Activities Conducted Within Licence No. 4344 The ‘Knob’ Prospect N.T.S. 20/15” authored by Dean Sheppard, 1994. The reader is cautioned that the data used in the preparation of the historical resource estimate does not meet the current standards of exploration quality assurance and quality control protocols such that it should not be relied upon to produce a current resource estimate for the Knob prospect. Significant additional drilling and data verification would be required to ensure the quality of historic data meets current standards for use in a resource estimate. Additionally, the methods used in the preparation of the resource as a block long section methodology include certain assumptions of geological continuity and grade variography that are not adequate to treat this as a current mineral resource estimate. The historical resource estimate is not classified in accordance with section 1.2 or 1.3 of NI 43-101 and therefore cannot be compared with current mineral resources or mineral reserves as defined in sections 1.2 or 1.3 of NI 43-101 as there has been no work completed to verify and classify such historical resource estimate. A Qualified Person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and the Company is not treating the historical estimate as current mineral resources or mineral reserves.
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Figure 11. Selected Assay Highlights along the AFZ North Source: New Found, 2020
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Figure 12. Selected Assay Highlights along the AFZ South Source: New Found, 2020
Dome Prospect
The showing is located just to the east of the north end of North Herman’s Pond. It is a sigmoidal shaped, quartz “blowout” with associated narrow (<1 metre wide), brecciated quartz veins and iron carbonate carrying abundant visible gold which appears to be controlled by a dilational structure caused by shearing oblique to the AFZ trend or possibly a crosscutting kink or fold. Host units are dark grey to black mudstones to graphitic shales. Pyrite and arsenopyrite are noted although not always associated with gold values. A 70 metre2 area (7x10 metres), tested by 4 orthogonal channel samples, gave an uncut average grade of 42.9 g/t Au. Trenching expanded the area of the mineralization by locating numerous other sub-parallel veins that contain visible gold on fractures or healed vein margins associated with green to brown sericite. Ten individual veins have been noted to carry visible gold in the trenched area. Fifteen (15) shallow drill holes tested the zone. The first 3 holes drilled in 1999 were drilled 15 metres apart drilling through the quartz “blowout”. Gold intersections from these holes gave values:
LG99-01 - 20.3 g/t Au over 8.6 metres including 70.7 g/t Au over 2.6 metres;
LG99-02 – 10.6 Au over 2.8 metres;
LG99-03 - 10.6 g/t Au over 2.8 metres; and
New FoundC-19-03 – 16.52 g/t Au gold over 6.1 metres including 162.5 g/t Au over 0.6 metres.
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Later drilling away from the main quartz “blowout” gave the following intercept:
LG00-28 - 4.9 g/t Au over 3.7 metres.
The true width of mineralization in New FoundC-19-03 is estimated to be 90% of the reported down hole width based on the geometry of the intersection. Due to the historical nature of drill results from LG99-01, 03 the true width of mineralization is unknown at this time.
Little Prospect
Candente Resources trench #19 tested strong soil anomalies, up to 637 ppb Au and 748 ppm as over a strongly deformed/foliated black shale unit cut by quartz veins, some brecciated, and varying in colour from white to grey. An alteration zone in grey-green shales associated with shearing crosscuts the foliation. The zone is up to 5 metres wide, with boudinaged quartz veining carrying pyrite, arsenopyrite, and possible stibnite and cinnabar. Black shales, to the west of the shear zone are offset by the shear and contain mineralized and Fe carbonate altered quartz veining. A sheared offset with associated quartz veining trends into the main shear. Mineralized quartz veins gave grab sample values up to 8.7 g/t Au. Channel samples outlined a 4 metre wide zone over a 35 metre strike length which averages 8.4 g/t Au in the SE portion of the trench and a channel sample in the NW corner gave assay values of 18.6 g/t Au over 7.5 metres including 116.6 g/t over 1 metres. Black, non-mineralized, shales were encountered to the west of the trench. Two drill holes have tested the zone – LG99-16 which gave low gold values over the interval from 25-32.7 metres and LG03-2 which didn’t intersect any significant gold mineralization.
Knob Prospect
The Knob prospect of mesothermal, auriferous quartz veins hosted in a variably deformed, NE trending shale and greywacke unit, of the Outflow Formation in the Davidsville group. The greywacke is in fault contact with an unmineralized and unaltered shale sequence. The host units strike to the northeast, dip steeply to the northwest, and are overturned and form the structural footwall to the mineralized package. Faulting appears to have offset the mineralized veins.
Two types of quartz veins are noted: 1) pyrite-arsenopyrite-rich veins with low gold values; 2) milky-white massive and smaller, sheeted quartz veins, that contain coarse free gold and minor pyrite, chalcopyrite and a steel-grey mineral identified as boulangerite. Both vein types are shear-controlled and are hosted by structures that crosscut the greywacke at a high angle. The veins are typically less than 50 cm wide and exhibit pinch and swell textures although the relationship between the two types of veins is not known. Extensional veins (tension-gash) are developed in the greywacke in and adjacent to the main shear zones.
Wallrock alteration around the milky-white veins consists of silicification with disseminated pyrite and arsenopyrite, and rusty weathering, intensely deformed zones. Mineralization occurs as free gold in the quartz veins, and is also associated with adjacent, carbonate-altered and arsenopyrite-bearing, sedimentary units that give assay grades of up to 5 g/t Au. Veining occurs in all rock units however it is best developed in greywackes, possibly due to the more competent nature of these units. Selected channel sample Au assay values from trenching include:
T-90-01 - 6.26 g/t Au over 13.0 metres and 81.53 g/t Au over 0.81 metres; and
T-90-01B - 12.08 g/t Au over 2.78 metres and 354.4 g/t Au over 1.10 metres.
Significant Au drill intercepts include:
GLN-90-11 - 38.53 g/t Au over 6.45 metres including. 106 g/t Au over 2.3 metres and 412 g/t Au over 0.58 metres;
GLN-90-13 - 19.82 g/t Au over 2.6 metres including. 32.2 g/t Au over 1.6 metres;
GLN-93-17 - 12.33 g/t Au over 10.67 metres including. 38.14 g/t Au over 2.14 metres and 102.20 g/t Au over 0.76 metres; and
GLN-93-19 - 9.54 g/t Au over 1.52 metres including. 24.02 g/t Au over 0.60 metres.
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Due to the historical nature of drill results from T-90-01,01B,GLN-90-11,13,17,19 the true width of mineralization is unknown at this time. Further drilling would be required to determine the true width of mineralization at the Knob prospect.
Letha Prospect
The Letha prospect, consists of a W-NW trending, narrow quartz vein system, hosted mainly in shale that has extensive thickening (a blow-out) where the vein passes from shale into massive greywacke. The plunge of the quartz “blow-out” (340°/-70°) is defined by the intersection of the northerly dipping vein and northwest dipping greywacke-shale contact. Spectacular coarse visible gold is noted in the “blow-out” as well as in the vein even where it is hosted by shale. Select Au grab sample assay values of 106.3 g/t, 136.5 g/t, 225.6 g/t, were found in visible gold-bearing quartz vein material grab samples. Drilling encountered quartz veining down dip / plunge of the vein exposed in surface trenching.
Significant Au drill intercepts include:
GB-04-07 - 0.48 g/t Au over 1.5 metres including. 0.78 g/t Au over 0.40 metres; and
GB-04-17 - 0.90 g/t Au over 4.8 metres including. 3.79 g/t Au over 0.5 metres.
Due to the historical nature of drill results from GB-04-07,17 the true width of mineralization is unknown at this time. Further drilling would be required to determine the true width of mineralization.
Lotto Prospect
The Lotto zone is located approximately 150-200 metres to the north along strike from the Dome showing. Three trenches exposed strong iron carbonate alteration with associated quartz veining and visible gold hosted in dark grey to black mudstones and graphitic shales. The quartz veining parallels, and crosscuts the Linear trend and contains pyrite, arsenopyrite and chalcopyrite. Visible gold was noted in two of the trenches associated with strong iron carbonate and brecciated quartz veins where grab samples gave Au values of 934.4 g/t and 64.1 g/t. Channel samples gave lower grade Au assay values of 1 g/t over a few metres, with (0.5 metre) zones assaying up to 11.84 g/t Au.
Nine diamond drill holes intersected wide zones of alteration (iron-carbonate) and Au mineralization. The highest grade Au drill intersections were:
LG00-35 - 14.3 g/t Au over 2.1 metres; and
LG99-07 - 10.0 g/t Au over 2.3 metres.
Due to the historical nature of drill results from LG00-35, LG99-07 the true width of mineralization is unknown at this time. Further drilling would be required to determine the true width of mineralization.
Grouse Prospect
The Grouse prospect is a major, complex, mineralized quartz vein system with highly anomalous gold values over significant widths which reach almost 30 metres true thickness with individual veins up to 6 metres wide. Visible gold was encountered for the first time in bedrock with grab samples of quartz vein material assaying 19.4 g /t Au and 12.1 g/t Au. The geology at the Grouse was found to be similar to the Knob prospect with a more massive greywacke member being the favoured structural host for the development of quartz veining which is contained in a 25 metres wide alteration zone. The most prominent vein located along the northern margins of their alteration zone, is orientated east-west and dips north at 50 to 60°. Pyrite / arsenopyrite, is mostly confined to the margins of the veins, while sphalerite, chalcopyrite, galena, and boulangerite are only present in the veins. No visible gold was noted. Drilling has tested the zone 25 metres along strike and to 70 metres down dip. Select channel samples from this zone include 6.9 g/t Au over 0.6 m, 3.6 g/t Au over 0.9 metres and 2.9 g/t Au over 1.0 metres.
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Significant Au drill intercepts include:
GB-04-08 - 0.97 g/t Au over 7.05 metres including. 1.17 g/t Au over 1.20 metres and 1.73 g/t Au over 1.40 metres;
GB-04-09 - 0.63 g/t Au over 36.0 metres including. 1.96 g/t Au over 4.50 metres and 7.49 g/t Au over 0.50 metres; and
GB-04-13 - 0.44 g/t Au over 33.10 metres including. 2.96 g/t Au over 1.10 metres and 4.19 g/t Au over 0.60 metres.
Due to the historical nature of drill results from GB-04-08, 09, 13 the true width of mineralization is unknown at this time. Further drilling would be required to determine the true width of mineralization.
Road Prospect
The Road prospect is located approximately 200-300 metres to the east of the AFZ structure and to the southeast of the Dome showing. It appears to be oriented at a 30 degree angle to the AFZ at approximately 165 degrees. It is a sheared and folded zone of alteration (iron carbonate) up to 3 metres wide containing boudinaged quartz veins that trend north-south along the shear. The main, shallow dipping (40 degrees) quartz vein is up to 0.7 metres wide, averaging about 0.3 metres and carries visible gold with associated arsenopyrite and minor pyrite with associated green and brown sericite, similar to the Dome showing.
Select channel samples gave Au values of 92.6 g/t Au over 1.0 m, and 24.7 g/t Au over 1.2 metres. Five drill holes gave Au highlight values of:
LG99-4 - 15.4 g/t Au over 2.7 metres and 2.5 g/t Au over 3.0 metres.
Due to the historical nature of drill results from LG99-04 the true width of mineralization is unknown at this time. Further drilling would be required to determine the true width of mineralization.
Bullet Prospect
The Bullet prospect is hosted by weakly graphitic, greyish-green shales and siltstone of the Hunts Cove Formation of the Davidsville group. Gold mineralization comprises a narrow, quartz-carbonate vein set developed in a NE trending, steeply south dipping, dextral shear zone. The shear zone has a maximum width of 50 cm and an exposed strike length of 24 metres. The shear dies out to the northeast and to the southwest the shear and quartz veining are offset approximately 1 metre by a sinistral shear zone. Movement along this zone appears to have been coincident with quartz vein development as the vein cuts this shear and was offset by, and folded into, the plane of the shear. Late movement is noted on the shear which hosts the main quartz veins as these veins are broken and reoriented. The veins are generally less then 15 cm thick and are comprised of milky-white quartz with disseminated pyrite, arsenopyrite, boulangerite and minor base metals.
The gold occurs as specks and clusters of free gold. Select channel sample values include 11.9 g/t Au over 0.5 m, 43.2 g/t Au over 0.8 m, and grab sample values of 456 g/t Au, 702 g/t Au, 28.7 g/t Au and 78.4 g/t. Significant drill intercepts include:
GLN-88-04 - 0.89 g/t Au over 4.0 metres including. 1.20 g/t Au over 2.5 metres;
GLN-88-05 - 0.55 g/t Au over 1.8 metres; and
GLN-89-06 - 17.3 g/t Au over 0.3 metres and 4.40 g/t Au over 2.0 metres including. 7.73 g/t Au over 0.7 metres.
Due to the historical nature of drill results from GLN-88-04,05,06 the true width of mineralization is unknown at this time. Further drilling would be required to determine the true width of mineralization.
Trench 26 Prospect
Candente Resources trench #26 tested a strong Au / As soil anomaly located approximately 250 metres to the west of the AFZ, immediately to the west of the access road and approximately 200 metres to the north, along strike of the Powerline showing. The mineralization is hosted in black to graphitic shales with green shales and greywackes and is the furthest to the north that mineralization has been found on the west side of the AFZ. Trenching gave only weak values in the 0.5 to 1 g/t Au range however sampling was difficult and incomplete due to water inflows into the trench.
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Two drill holes tested the zone with assay highlights of:
LG99-20 -1.05 g/t Au over 29.1 metres; and
LG99-24 - gave only weakly anomalous Au values.
Due to the historical nature of drill results from LG-99-20 the true width of mineralization is unknown at this time. Further drilling would be required to determine the true width of mineralization.
Cokes Prospect
Two trenches Candente Resources #’s 15, 16 tested soil anomalies with values up to 1500 ppb Au and > 2200 ppm as on the west side of the AFZ in the area of the Cokes farm. An 8-10 metres wide iron carbonate altered zone with variable quartz veining was located near the contact between a thin (3-4 metres), sheared greywacke bed and grey shales. Units are iron carbonate altered and contain boudinaged, narrow, quartz veins with pyrite, arsenopyrite and minor bladed stibnite in one vein. Grab samples give values up to 11.8 g/t Au with the highest values located in the quartz veins.
Channel samples showed gold values up to 7.5 g/t Au over 1.0 metres. The western extension of Trench 15 and Trench 16 exposed iron carbonate altered greywacke (to the west), in contact with unaltered, contorted, grey shales.
Four drill holes have tested the zone. Reported Au values include:
LG03-03 - 2.7 g/t Au over 2.7 metres; and
LG03-04 - 3.4 g/t Au over 5.9 metres.
Due to the historical nature of drill results from LG03-03,04 the true width of mineralization is unknown at this time. Further drilling would be required to determine the true width of mineralization.
Powerline Prospect
Candente Resources trenches 21-23 tested a strong soil anomaly with values up to 3940 ppb Au and 34,460 ppm As. Iron carbonate alteration zones up to 5 metres wide, with narrow quartz veins, were located in shales and conglomeratic greywacke with acicular arsenopyrite noted in the iron carbonate altered conglomeratic greywacke. To the north, the zone appears to be offset to the east along the crosscutting Herman’s Pond fault structure. Grab samples gave Au values up to 12.4 g/t from the mineralized quartz veins while channel sampling gave Au values of 2.0 g/t over 6.0 metres in the northern portion and 1.4 g/t Au over 7.0 metres (incl. 5.8 g/t Au over 1.0 metres) in the southern portion of Trench 22.
The area was tested by 7 diamond drill holes; only anomalous Au results were found in all holes with up to 1.0g/t Au over 3.1m. Due to the historical nature of drill results from LG99-22 the true width of mineralization is unknown at this time. Further drilling would be required to determine the true width of mineralization.
Keats Prospect
The Keats zone is located approximately one kilometer to the south of the Dome prospect just to the east of South Herman’s Pond. It consists of mainly parallel quartz veins with variable iron carbonate alteration over a width of up to 100 metres hosted by black mudstones and grey greywackes, with some sericite also noted. Visible gold has been found along the east margin of the zone, along the east side of South Herman’s Pond, with float samples assaying up to 1,869 g/t Au and channel samples giving values up to 13.6 g/t Au over 1.0 metres. The baseline portion of the zone consists of disrupted/boudinaged quartz veins over a 30 metres long strike length, open to the north and south and crosscut by shears showing a sinistral sense of movement. Visible gold is noted in many of the quartz veins associated with strong sulphide mineralization (pyrite, arsenopyrite, chalcopyrite, boulangerite).
Six diamond drill holes (LG99-11-13, LG03-5, LG08-48, 49) tested the area, drilling to the west towards South Herman’s Pond. Two holes (LG99-11,12) intersected mineralized zones with visible gold that assayed:
LG99-11 - 8.8 g/t Au over 4.3 metres including a 0.6 metre interval that graded 61.3 g/t Au and second Interval of 9.23 g/t Au over 1.6 metres including 35.4 g/t Au over 0.3 metres; and
LG99-12 – 16.3 g/t Au over 2.3 metres.
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Five of the 6 holes over a 280 metres strike length intersected significant gold mineralization, with one hole drilled to the east away from the mineralization.
Two holes in 2019 targeted the Keats zone with visible gold and notable quartz veining in both holes associated with a previously unidentified fault. Assay highlights from this drilling include:
New FoundC-19-01 – 92.86 g/t Au over 19.0 metres including 285.2 g/t Au over 6.0 metres; and
New FoundC-19-02 – 1.54 g/t Au over 12.0 metres including 5.45 g/t Au over 1.0 metres.
The true width of mineralization in New FoundC-19-01,02 is estimated to be 70% based on the geometry of the intersection. Due to the historical nature of drill results from LG99-11,12 the true width of mineralization is unknown at this time. Further drilling would be required to determine the true width of mineralization.
Bowater Prospect
The Bowater prospect consists of narrow (up to 10 cm wide) extensional and minor shear controlled, milky-white, quartz-pyrite veins and quartz breccia. The quartz is developed in a 12 metres thick, weakly sericitized / carbonate-altered, black, quartz-feldspar-rich, greywacke, a unit in the Outflow Formation of the Davidsville group. Two main vein orientations are noted, a N-NE bedding parallel set and a cross-cutting E-W set.
The gold mineralization is associated with dark grey to white brecciated quartz veins with gold values directly related to pyrite concentration. A southeasterly plunging, open, F2 fold in one of the trenches is thought to have played a role in localizing gold. Graphitic shale which forms the footwall to the greywacke contains up to 20 %, non-auriferous, pyrite. Grab samples give values up to 20 g/t Au.
Select Channel sample assay values from trenching include 8.8 g/t Au over 1.0m and 3.2 g/t Au over 1.0m.
5.5.6 JBPDZ
The JBPDZ is a broad 500 to 1000-metre-wide linear belt of high strain ductile to brittle deformed mudstone containing numerous quartz and iron carbonate veins some of which can be traced for hundreds of metres and are believed to extend over thousands of metres. Gold mineralization has been found along this corridor over a 7 km length to date. Exploration along this corridor has primarily been focussed on the use of surface trenching and diamond drilling to define the mineralized zones. Key showings/zones along this trend are the H-Pond, Pocket Pond, Glass, Logan and Lachlan (Figure 13 and Figure 14).
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Figure 13 - Selected Prospects along the JBPDZ: New Found, 2018
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Figure 14 - Selected Assay Highlights along the JPBDZ. Source: New Found, 2020
H-Pond Prospect
The H-Pond Prospect is located along the trace of the “H-Pond” brook directly underlying the H-Pond brook quartz boulder train. Thirty-two diamond drill holes (totaling 5,765.2 metres) have tested the H-Pond mineralized quartz veins over a strike length of 800 metres and to a depth of 250 metres. The mineralization occurs in multiple, steep northwest dipping, northeast striking quartz veined zones.
The host to the quartz veining is a folded, variably altered, fine to very fine-grained mudstone/shale with slightly grittier siltstone sections. Cutting these deformed and altered sedimentary rocks are abundant quartz-veined zones on average about 5 metres wide but ranging from 1 to 24 metres in width. The veined zones contain on average about 25% quartz vein material. The veining typically consists of variably stylolitic, partly vuggy quartz-iron carbonate veins that contain visible gold in places. Approximately 50% of the veined zones contain individual veins greater than 20 cm thick, while 7% have veins more than 100 cm thick. The zones having the thicker veins also contain the majority of the higher gold grades. Many of the veins are folded and have variable orientations, though the majority trend northeast (040°). The veins have highly variable dips ranging from flat to vertical.
Accompanying the veining are finely disseminated pyrite, coarse granular pyrite and arsenopyrite porphyroblasts (up to 3cm), which often propagate along bedding planes. The porphyroblasts are locally zoned, having pyrite overgrowths around cores of arsenopyrite. In many places, the porphyroblasts have quartz-filled pressure fringes. Some of the finer pyrite appears to replace the iron carbonate granules. Sulphide contents reach a maximum of 15 to 20% marginal to the veins though rarely is there greater than 1 to 2% combined in the veins themselves. Accessory minerals in the veins include iron carbonate, chlorite, sericite, dickite, talc, gypsum along with honey yellow to purple-grey sphalerite, chalcopyrite, galena, boulangerite, and locally visible gold. Visible gold was mainly observed near vein margins or immediately in the adjacent wallrock. The iron carbonate usually occurs along the vein margins as lathy crystals up to 2cm in length.
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Much of the quartz veining is enveloped in a 50 to 75 metre wide, steep northwest dipping package of dark grey, strong sericite-iron carbonate speckled alteration. On the western (hangingwall) side the sericite alteration is more intense and the rock has been bleached to a creamy yellow colour. Some of the iron carbonate granules are locally rimmed or, in some cases, totally replaced by chlorite.
Significant drill intercepts include:
HP-04-01: 0.67 g/t gold over 44.45 metres including 12.39 g/t gold over 0.50 metres;
HP-04-03: 11.70 g/t gold over 3.40 metres including 16.27 g/t gold over 2.40 metres;
HP-04-04: 7.20 g/t gold over 2.60 metres including 8.73 g/t gold over 2.10 metres;
HP-05-09: 2.08 g/t gold over 3.75 metres including 9.02 g/t gold over 0.80 metres;
HP-05-11: 5.47 g/t gold over 2.35 metres including 6.91 g/t gold over 1.85 metres;
HP-05-15: 3.40 g/t gold over 3.80 metres including 9.79 g/t gold over 1.15 metres;
HP-06-29: 2.41 g/t gold over 4.80 metres including 6.58 g/t gold over 1.00 metres;
HP-06-35: 6.15 g/t gold over 2.30 metres including 12.29 g/t gold over 1.05 metres;
New FoundC-19-05: 2.35 g/t gold over 11.0 metres including 6.73 g/t gold over 3.0 metres; and
New FoundC-19-09: 4.39 g/t gold over 9.0 metres including 17.45 g/t gold over 2.0 metres.
The true width of mineralization in drill holes New FoundC-19-05 and New FoundC-19-09 is estimated to be 60-70% based on the geometry of intersection. Due to the historical nature of drill results from HP-04-01. 03, 04, HP-05-09,11,15, HP-06-29,35 the true width of mineralization is unknown at this time. Further drilling would be required to determine the true width of mineralization.
Glass Prospect
A follow up to till sampling in 2017 by New Found resulted in the discovery of the Glass showing located northeast of the H-Pond brook and H-Pond prospect. Largely viewed as a possible parallel zone to the H-Pond prospect the Glass showing was excavated in 2017 and further expanded in 2018 along a roughly 150 metre strike length of the vein array. Mineralization at the Glass showing is very similar to mineralization intercepted in the historic diamond drilling at the H-Pond Prospect. Linear quartz veins with lesser amounts of iron carbonate range in width from 10-60cm and show boudinage habit along its strike and contain localized arsenopyrite, pyrite, boulangerite, magnesium oxide and visible gold. Alteration patterns at the Glass showing are of cryptic alteration halos of iron carbonate extending for 10’s of cm and lesser amounts of sericite along the vein margins.
Pocket Pond Prospect
The Pocket Pond Prospect, consisting of two significant quartz veined zones, is located under the waters of and immediately to the west of East Pocket Pond, approximately 2.0 to 2.5 kilometers southwest of the H-Pond Prospect. Fifteen drill holes (2,529 metres) have been completed at the Pocket Pond Prospect and the mineralization has been exposed in two surface trenches. Drilling has traced mineralized quartz veined zones over a strike length of 950 metres and to a depth of 250 metres.
The Pocket Pond mineralization is hosted by fine-grained altered metasedimentary rocks like at the H-Pond Prospect, although some sections are somewhat grittier (siltstone). Alteration and mineralization are quite similar to that at H-Pond, except that the veins locally contain up to 20% combined pyrite-arsenopyrite and, in places, have abundant gypsum, talc or dickite.
The steep west-dipping (60° to 70°), subparallel zones are approximately 8 to 16 metres wide, composed of 10 to 35% quartz vein material and are about 200 metres apart. The easternmost veined zone intersected by drill hole HP-04-07 was traced to 150 metres below surface by drill hole HP-05-28. HP-04-07 and HP-05-28 are the only two drill holes that have tested the eastern veined zone at the Pocket Pond Prospect.
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Significant drill intercepts include:
HP-04-07: 6.63 g/t gold over 1.70 metres including 25.23 g/t gold over 0.40 metres;
HP-05-28: 5.37 g/t gold over 1.55 metres including 13.99 g/t gold over 0.55 metres;
HP-07-39: 1.89 g/t gold over 12.60 metres including 14.36 g/t gold over 0.50 metres;
HP-08-44: 12.43 g/t gold over 3.50 metres including 84.77 g/t gold over 0.50 metres; and
HP-08-48: 9.16 g/t gold over 14.2 metres including 255.0 g/t gold over 0.50 metres.
Due to the historical nature of drill results from HP-04-07. 03, 04, HP-05-28, HP-07-39, HP-08-44,48 the true width of mineralization is unknown at this time. Further drilling would be required to determine the true width of mineralization.
Lachlan/Logan Prospect
The Lachlan and Logan prospects were initially discovered in 2000 and 2017 respectively and likely represent the same zone of mineralization as they are separated by 10’s of metres. This area of mineralization represents the most southerly known gold showing along the JBPDZ occurring south of the Trans-Canada highway. Three trenches have exposed this zone along a roughly 175 metre strike length; bedrock is variably iron carbonate altered siltstones and shales that are cut by a number of narrow (1-20cm) quartz veins which are north striking and steeply dipping. Locally visible gold has been noted along with significant concentrations of near massive arsenopyrite (clots to 15cm). The Logan showing was channel sampled in 2017 resulting in 5.0g/t Au over 0.5 metres, 5.7 g/t Au over 1.0 metre and 4.4 g/t Au over 1.5 metres. Channel sampling of the Lachlan zone in 2004 by Rubicon Minerals resulted in 8.5g/t Au over 1.0 metre.
5.5.7 GGS
The GGS claim group has witnessed significantly less exploration than the northern portion of the Queensway Project owing partly to the increased glacial cover and distance from major centres. There have, however, been a number of gold discoveries made through basic prospecting, soil and till sampling and surface trenching. Significant gold prospects in this area include the Greenwood Pond, Hornet, North Paul’s Pond, Aztec, Goose, Road Gabbro and LBNL (Figure 15).
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Figure 15. Selected Prospects along GGS. Source: New Found, 2018
Greenwood Pond Prospect & Hornet Showings
The seven Greenwood Pond showings and the Hornet showing consist of altered gabbro with disseminated pyrite and typically <5 % arsenopyrite. It appears that the reported detailed locations for a number of the Greenwood Pond showings are incorrect since attempts to locate the Greenwood #4 to #7 trenches by Altius in 2012 were unsuccessful and New Found geologists tried to locate five of the six showings (except Hornet and Greenwood #1) in 2018 but could only locate Greenwood #2 which had been trenched and left open. Their proximal location is still valid however existing government datasets have misplaced their position and further field recognizances is required.
Gold grab sample assay results include:
Greenwood #1 - 1.8 g/t Au;
Greenwood #2 - 5.27 g/t Au and 23.2 g/t Au;
Greenwood #3 - 2.75 g/t Au;
Greenwood #4 - 1.9 g/t Au;
Greenwood #5 - 2.9 g/t Au;
Greenwood #6 - 3.09 g/t Au; and
Greenwood #7 - 1.5 g/t Au.
Channel sampling on the Greenwood #4 to #7 showings gave generally low Au values with two samples from mineralized gabbro giving 1.74 g/t Au and 1.09 g/t Au over 1.0 metre, and another in greywacke gave 1.2 g/t Au over 1.0 metres. These samples are not sourced to a particular trench or showing and give gold values only. The Hornet showing consists of small, 1-2 cm, quartz-pyrite stringers with vuggy quartz veins in a silicified, fractured and brecciated felsic unit which gave grab sample values to 23.2 g/t Au, and a channel sample that gave 2.86 g/t Au over 1.0 metre. No drilling is reported on either the Greenwood Pond or Hornet showings.
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North Pauls Pond Prospect
The North Pauls Pond prospect consists of quartz veins exposed in trenching, at least 1 metre thick with Au grab sample values of 10.86, 8.96 and 5.24 g/t. Quartz veins with 10-20 % patchy to semi-massive stringers of arsenopyrite are hosted by black, strongly foliated, and possibly tightly folded, fine-grained, Davidsville group siltstones. The highest- grade mineralization is associated with a combined IP/chargeability anomaly and a cluster of angular, gold bearing quartz vein floats that gave grab sample values to 15.25 g/t Au.
The prospect was diamond drilled in 2005 with six holes (1,962m). Significant gold drill intercepts include:
PP-05-01 - 0.58 g/t Au over 0.55 metres in a broader interval of anomalous gold mineralization;
PP-05-02 - 2.1 g/t Au over 0.20 metres and 2.1 g/t Au over 0.55 metres; and
PP-05-06 - 7.1 g/t Au over 0.35 metres and 4.3 g/t Au over 0.50 metres.
Due to the historical nature of drill results from PP-05-01,02,06 the true width of mineralization is unknown at this time. Further drilling would be required to determine the true width of mineralization.
Aztec Prospect
The Aztec Prospect and A-Zone extension prospects occur as epithermal-style quartz veins in an alteration system associated with the fault contact between the Davidsville group and Indian Islands Group. Mineralization consists of low-grade gold values which has been trenched and tested with six diamond-drill holes, and has been traced along strike for approximately 330 metres. The Aztec prospect alteration is believed to be developed in the structural footwall of a fault zone and is comprised of silicified, pyritic conglomerate or breccia. Gold mineralization typically carries <1 g/t Au and is associated with conglomerate. Trench grab samples gave assay values in the 1.01 to 1.03 g/t Au range. The “hydrothermal breccias” exposed on surface, exhibit multiple phases of brecciation and pervasive silicification, with concentric chalcedony rinds, over a thickness of approximately 10 metres. Below the hydrothermal breccia, and structurally beneath the possible sinter is an approximate 70 metres thick zone of variably developed argillic alteration in fine-grained siltstone/sandstone. The alteration intensity appears to decrease away from the structural contact. The alteration zone has a strike length of 330 metres, and a width of 100 metres with a shallow dip to the northwest.
Six drill holes (575 metres) tested the mineralized zone over a 300 metres strike to a depth of <50 metres. Significant Au drill intercepts include:
AZ-88-01 - 0.40 g/t Au over 2.0 metres including 0.61 g/t Au over 1.0 metres;
AZ-88-02 - 0.95 g/t Au over 0.7 metres; and
AZ-88-06 - 0.52 g/t Au over 3.6 metres including 1.27 g/t Au over 0.6 metres.
Due to the historical nature of drill results from AZ-88-01,02,06 the true width of mineralization is unknown at this time. Further drilling would be required to determine the true width of mineralization.
At the A-Zone extension which is parallel to and 500 metres to the east of the Aztec zone, a series of trenches exposed an approximately 30 metres thick, pervasively chloritized, locally potassic-altered, greywacke unit in siltstone cut by thin, discontinuous, extensional quartz-carbonate veins and veinlets carrying arsenopyrite/pyrite. The mineralized zone has a strike length of approximately 250 metres with trench channel samples giving Au values of 2.6 g/t Au over 7.0 metres and 1.0 g/t Au over 13.0 metres. No drilling is reported to have tested this zone.
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Goose Prospect
The Goose Prospect was discovered by Noranda during follow up of float boulders with Au in grab sample values up to 42.1 g/t Au. It is hosted by weakly deformed, grey-green, massive sandstone, limonitic sandstone and green chloritic siltstone of the Davidsville group, with patchy silicification associated with 1-2 cm milky white quartz veins and veinlets. The mineralization is arsenopyrite, pyrite and pyrrhotite as fine to coarse patches in the quartz veins and as disseminations (up to 10%) in the wall rock. The prospect is classified as an arsenopyrite rich quartz vein style of mineralization. Noranda determined that the mineralization was regular along strike, trending at 055°, dipping moderately to the NW, and varying from 2 to 10 metres (average 3 metres) thick over a strike length of 180 m, remaining open along strike and to depth. It was tested by 7 trenches and 8 drill holes over a 100 metres strike length with four diamond-drill holes (291.1 metres) in 1988 and 4 DDH’s (572 metres) in 2004. - Significant gold drill intercepts include:
GZ-88-01 - 3.14 g/t Au over 2.5 metres;
GZ-88-02 - 7.54 g/t Au over 1.0 metres, 1.64 g/t Au over 2.8 metres;
GZ-88-03 - 0.93 g/t Au over 9.8 metres including 1.89 g/t Au over 1.1 metres; and
GZ-88-04 - 0.76 g/t Au over 3.0 metres including 1.4 g/t Au over 1.0 metres.
The 2004 drilling found that gold mineralization was in narrow high grade to wide anomalous intervals such as:
PP-04-01 - 15.68 g/t Au over 0.8 metres, 1.22 g/t Au over 1.11 metres, and 2.14 g/t Au over 1.62 metres;
PP-04-02 - 0.30 g/t Au over 9.45 metres; and
PP-04-04 - 2.14 g/t Au over 0.6 metres.
Due to the historical nature of drill results from GZ-88-01,02,03,04, PP-04-01,02-04 the true width of mineralization is unknown at this time. Further drilling would be required to determine the true width of mineralization.
Road Gabbro Showing
The Road Gabbro showing is hosted in the Botwood Group, close to the Davidsville group contact. The outcrop consists of gabbro with quartz veins carrying pyrite and minor visible gold, which intrude siltstones and shales of the Botwood Group. It was trenched and channel sampled with a select Au assay value of 2.24 g/t Au over 1.0 metres which included visible gold. A grab sample from a chloritized gabbro boulder, with pyrrhotite, silicification and quartz veining, from the rubble piles from the trenching, gave an assay value of 25.4 g/t Au. There has been no reported drilling at this showing to date and it remains largely untested.
LBNL Showing
The showing consists of narrow quartz-arsenopyrite veins in a silicified granitic intrusive. It was discovered in follow up of a soil sample value of 3230 ppb gold. Arsenopyrite forms coarse patches in the veins and sometimes mantles the vein margins. Two of five trenches gave assays >1 g/t Au - LB 02, chloritized greywacke and gabbro - 1.36 g/t Au over 1.0 metre and LB 03, sericitized greywacke with quartz veins - 1.80 g/t Au over 1.0 metre. Angular, pyrite/arsenopyrite bearing, sericitic altered greywacke float, located near the showing gave values of 1.27 and 5.18 g/t Au from six grab samples. No drilling is reported to have tested the showing.
5.6 Geological Model
The gold showings in the Queensway Project area are thought to have been introduced during the main D1 deformation event and emplaced in sedimentary rock through quartz veining associated to tight folds and high strain zones. In the northern portion of the Queensway Project, the subsequent D2 deformation event did not modify significantly the geometry of the stratigraphic sequence and mineralization, though local offsets have been documented.
D1 deformation consisted in a major NW-SE shortening episode resulting in intense flattening, accompanied by tight folding and SE-verging thrusting. Late stage of shortening included dextral transpression resulting in the development of NE-trending faults. Relative crosscutting relationships between auriferous veins and such structures suggest gold mineralization occurred prior as well as synchronously to this change in strain orientation.
D2 deformation induced minor NW- to NNW-trending kink banding, faulting and folding with no significant effect in the northern portion of the Queensway Project. To the south, geophysical data suggests D2 structures progressively change orientation to a more WNW trend and are more prominent. However, further investigation is required to determine the extent to which they affect older geological features.
Gold showings in the Queensway Project are interpreted to be epizonal, epigenetic, sedimentary-hosted orogenic gold mineralization (Figure 16). They display characteristics similar to that of other mesothermal gold occurrences such as Meguma, in Nova Scotia. Gold is thought to have been introduced during the main deformation event and emplaced in sedimentary rock through quartz veining associated to tight folds and high strain zones. Conjugate sets of fault-fill and extensional veins formed with an associated carbonate hydrothermal alteration halo, similar to what is described in other contexts.
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With respect to models for gold mineralization, gold was likely sourced from sedimentary rocks at depth, in which metamorphic breakdown of pyrite to pyrrhotite released sulphur and trace metals contained in pyrite. The presence of mudstone horizons with disseminated pyrite in the Hunt’s Cove and Outflow Formations, as well as, locally, decimetre-size pyrite nodules supports such hypothesis. The presence of sulphide minerals indicate gold likely was mobilized by a gold-sulphur complex; however, the low sulphide content of auriferous veins suggests poor reactivity of the host rock with mineralising fluids. This also accounts for the moderate to weak alteration intensity around the veins.
Crosscutting relationships between auriferous structures and other geological features suggest gold precipitated over a single mineralizing event. Mineralization took place syndeformational- to late-D1 deformation, and no evidence was documented that would argue for D2-related mineralization or remobilization of gold.
No evidence of local intermediate to felsic intrusion has been documented. This includes dykes crosscutting the stratigraphy or any type of geophysical anomaly that could be related to the presence of an intrusion at depth. Consequently, it is interpreted that there is no genetic link between gold mineralization and magmatism in the area.
Figure 16. Continuum model for orogenic gold deposits (from Groves et al., 2003 in Goldfarb et al., 2005). Data suggests the Queensway Project belongs to the epizonal Au-Sb category.
Figures 17 to 20 below show a visual comparison of the mineralogy, texture and genetic character of mineralized drill core from the Keats showing to the Fosterville Mine in Victoria, Australia. In particular is the comparison to the epizonal type of orogenic deposits.
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Figure 17. Left, drill core from the Keats zone (New FoundC-19-01), Queensway Project; right, core from the Eagle zone, Fosterville Mine. Comparison of intense quartz stock work with relict black shale fragments from each deposit. Specks of visible gold are present in quartz veins and their selvages. Gray patches contain fine grained antimony sulfides, boulangerite on left and stibnite on right. Source: New Found.
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Figure 18. Left, drill core from the Keats zone (New FoundC-19-01), Queensway Project; right, hand specimen from the Eagle zone, Fosterville Mine. Comparison of quartz veining displaying relict banding from each deposit. Dark material at the bottom is relict shaley material. Such banding in is probably an original texture resulting from open space filling of quartz sulfides and gold at the time of deposition. Open space filling is indicative of a shallow level of deposition for both deposits. Source: New Found.
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Figure 19. Left, drill core from Keats zone (New FoundC-19-01), Queensway Project; right, core from the Eagle zone, Fosterville Mine. Comparison of vein quartz displaying numerous vugs, or small cavities, lined with quartz crystals from each deposit. Native gold is also visible in each sample. Such open space cavities are indicative of a shallow level of deposition for both deposits. Source: New Found
Figure 20. Left, core from Keats zone (New FoundC-19-01), Queensway Project; right, core from the Eagle zone, Fosterville mine. Comparison of gray and white quartz vein material with numerous small specks of native gold from each deposit. Grey specks are mostly antimony minerals, boulangerite on the left and stibnite on the right. Some gray flecks are particles of black shale caught up in quartz. Such fine gold particles likely formed through rapid precipitation of gold in a shallow epizonal regime within an orogenic system, an indication of a shallow level of deposition for both deposits. Source: New Found
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5.7 Exploration
Exploration on the Queensway Project in 2017 targeted gold mineralization using the following exploration methods: regional and detailed prospecting, geological evaluation of the GGS and GGN areas, trenching and associated geology including a structural study of the trenched areas, a drone survey over the Queensway Project, 798 and Glass trench areas on the JBPDZ and a preliminary interpretation of the airborne geophysical survey carried out in the early summer of 2017. The regional prospecting covered the GGS and TP areas while the detailed prospecting, trenching and drone survey was carried out on the GGN properties. Exploration in 2018 continued additional interpretation of the geophysical data, a significant regional till sampling program, a detailed structural geological survey, soil surveys, regional prospecting and surface trenching. As of December 31, 2019, total exploration expenditures by New Found at the Queensway Project exceed $2.1 Million as defined below.
2019 Exploration Program | |
Diamond Drilling | $565,000 |
2019 Total: | $565,000 |
2018 Exploration Program | |
Till Sampling | $177,254 |
Till Geochem Testing | $22,932 |
LandSat Imagery | $45,495 |
Structural Study | $159,545 |
Prospecting | $150,000 |
Analytical testing | $55,185 |
2018 Total: | $610,411 |
5.7.1 2016 Till Survey - JBPDZ
In November 2016, New Found contracted Overburden Drilling Management (“ODM”) to collect 59 samples of oxidized, C-horizon till from hand-dug shovel pits on a portion of the property that overlies the auriferous JBPDZ Trend. The till samples were analyzed to allow for a detailed study of their composition.
The objective of the program was to detect and delineate gold-grain dispersal trains emanating from undiscovered Au- quartz veins of potential economic significance.
The Queensway Project is extensively covered by a veneer of locally derived glacial till deposited by ice flowing northward from the center of the Newfoundland Ice Cap. The ice flow direction on the property was 020°, subparallel to the underlying stratigraphic and structural trends.
The till excavated from each pit was roughly hand screened into a pail on site at 8 mm to remove most of the large clasts. Approximately 13 kg of the sieved -8 mm fraction, along with a representative handful of the +8 mm pebbles, was packed in a heavy-duty 30 x 50 cm plastic bag sealed with a cable tie. Each sample site was logged, describing its topographic setting, the location and geology of the nearest rock outcrop, the physical characteristics, pebble lithologies and quality of the till and the depth to which the till was sampled.
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The till samples were processed by ODM using procedures which are designed specifically for extracting gold grains and a suitable analytical fraction from samples of oxidized till collected at surface. The weights of all derived sample fractions are recorded together with observations on the physical characteristics of both the samples and any recovered gold grains.
Before processing the samples, a representative 500 g split (~400 g after drying) was removed from the sample and reserved for geochemical analysis. The remaining bulk sample material was wet screened at 2.0 mm and a primary -2.0 mm table concentrate was prepared. Geological observations on the character of the sample were made during both the screening and tabling operations.
The concentrates obtained by tabling are purposely large (typically 300-400 g) and of low grade (10- 25% heavy minerals) in order to achieve a high, 80 to 90 percent recovery rate for every useful indicator mineral of specific gravity (“SG”) >3.2 irrespective of its grain size. Any contained gold grains, which by nature are mostly silt-sized, are separated from the table concentrates by micropanning and are counted, measured and classified as to degree of wear (i.e. distance of glacial transport). The relative abundances of any sulphides or similar indicator minerals or metallic contaminants are also estimated, and the expected gold assay value of the contained gold grains is calculated.
A representative, ~250-300 g subsample of the reserved 500 g split was dry sieved to produce a -0.063 mm silt + clay fraction of sufficient size for geochemical analysis. The sieving was done to completion, i.e. until no more material passed through the sieve, not just until the 30 g of fines normally needed for geochemical analysis were obtained. The samples typically yielded 15 to 30 percent fines. The unused portion of the 500 g split and the +0.063 mm fraction of the sieved portion were archived.
5.7.2 2016 Till Survey – Results
The gold grain content of the till is effectively anomalous over the entire 1.5 x 5 km survey area and the gold background could not be established. The counts ranged from 19 to 1744 grains and averaged 127 grains per sample. Forty-nine samples – 83 percent – yielded gold counts >40 grains including 24 samples – 41 percent – with >100 grains and 3 samples with >300 grains. Approximately 70 percent of all gold grains are pristine to partly modified indicating that most of the gold has been transported <1 km and thus is derived from multiple sources. However, the proportion of pristine + modified grains is highest at the up-ice end of the sampling area, averaging 83 percent on the most southerly traverse and, conversely, the proportion of reshaped grains is highest at the down-ice end, averaging 57 percent in the samples clustered around the 798 Boulder prospect. The increase in reshaped morphologies down-ice indicates that the gold sources are concentrated toward the up-ice end of the survey area.
The overall anomaly was evidently produced by: (1) a plethora of small, auriferous quartz veins (i.e. Bendigo-type veins) that were sufficiently exposed during glaciation to contribute a significant amount of gold to the till; and (2) the mineralized trend being parallel to the 020° ice-flow direction.
5.7.3 2017 Airborne Survey – CGG Canada Services Ltd.
The airborne report by CGG Canada Services Ltd. describes the logistics, data acquisition, processing and presentation of results of a HELITEM35C electromagnetic magnetic (“EM”) airborne geophysical survey carried out between May 12 and June 9, 2017, for New Found, over two blocks near Gander, Newfoundland. The purpose of the survey was to map the geology and structure to assist in detecting zones of gold accumulation. Data was acquired using a HELITEM35C electromagnetic system, supplemented by a high-sensitivity cesium magnetometer. The data was processed to produce images that display the magnetic and conductive properties of the survey area. A GPS electronic navigation system ensured accurate positioning of the geophysical data. The survey was flown in two areas, one included the GGN and GGS claim groups, and the other covered the Twin Ponds claims. Line spacing was 200 metres in an east-west direction with control lines (tie-lines) of 2 km spacing in a north-south direction, at a terrain clearance of 70 metres. A total of 5311.9 line km was surveyed. The HELITEM35c comprises a MULTIPULSE system configuration transmitting in two pulses – the half sine pulse and the square pulse with the square pulse gates providing information from the near surface and the half sine providing information at depth. A preliminary interpretation of the results of the survey, both the EM and magnetics by Brenda Sharpe, P.Geo. a consulting geophysicist is summarized below. See Figure 21 below for the magnetic-EM composite of the 2017 airborne survey.
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Figure 21. Magnetic-EM composite of the 2017 CGG airborne survey. Source: GoldSpot Discoveries 2018
5.7.4 2017 Airborne Survey – Initial Results
Magnetic Data
The Gander area is magnetically quiet except for the regions of magnetic material, and extensive narrow magnetic trends, mainly associated with ultramafic units. The magnetic character follows the general geology NNE-SSW-NE-SW. Cross cutting magnetic features are noted striking NNW-SSE. Culture from the major roads and powerlines is also noted.
NNE-SSW-NE-SW trending, narrow, features, of approximately 10 nanoteslas, occur along the length of the survey, which may reflect mafic units in the Davidsville formation. The Mount Peyton Batholith to the west, just touches the western edge of the survey and is characterized by an increased magnetic response.
The north-eastern edge of the survey is characterized by strong magnetic response indicative of the mafic/ultramafic material in the GRUB Line aligning with the Weir Pond Formation of the Davidsville group.
In the southern half of the survey the boundary between the Hunts Cove and Outflow formations of the Davidsville group, shows clearly in the magnetic data, marked by a possible fault and extensive narrow magnetic features. Further to the north, the overburden likely becomes thicker and the signatures are considerably reduced. The boundary between the Indian Islands Group which has a strong magnetic response and the Outflow formation shows in the south but becomes increasingly disguised to the NE.
The magnetics on the Twin Ponds block, to the NW, clearly shows the boundary between the Ten Mile Lake Formation and the Mt. Peyton Intrusive Suite.
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EM Data
Like the magnetic data discussed above, the general overall fabric trends NNE-SSW-NE-SW. Like the magnetic data, the roads (culture) show up clearly. Strong conductors correlate with Weir Pond formation of the Davidsville group to the east, likely related to the mafic to ultramafic material of the GRUB Line.
In the northern section of the survey, the AFZ, shows a strong contrast with more conductive material to the west and resistive material to the east. Further to the east, along the JBPDZ, conductivity increases to the east, and this continues to the east to a narrow resistive band just to the west of the boundary of the GRUB Line.
To the south of Gander Lake, extensive NNE-SSW sequences of conductive/moderately conductive and resistive material occur in the Davidsville group, continuing to the southern extent of the survey area. In the southern part a series of extensive, very conductive, zones are noted in the Davidsville group, one set flanking the boundary between the Outflow and Hunts Cove Formations, the other near the boundary between the Hunts Cove Formation and Indian Islands Group. Another conductor lies along the western survey boundary in the south and marks the boundary between the Indian Islands Group and a siliciclastic conglomerate of Early Devonian to Pennsylvanian age. Further north this conductor, which trends NE-SW, correlates with the Davidsville/Indian Islands boundary.
The Twin Ponds block to the northwest, is generally weakly conductive with stronger conductive features striking NNE- SSW along the boundary between the Duder Group and the Ten Mile Lake Formation.
5.7.5 2017 Preliminary Airborne Geophysical Interpretation - Results
DTM - Obvious trends in the digital terrain (“DTM”) are lineaments aligned NNE-SSW and a single one aligned NW- SE, where the western most NNE-SSW trend (the AFZ) and the NW-SE trend meet in the vicinity of the Appleton Road, Dome and Lotto showings. Therefore, if any favourable magnetic or EM features lie at similar intersections these could be areas of potential interest. A NE-SW fault if projected further to the southwest would also extend into this region. Other less obvious trends can be identified, also striking NW-SE as well as near NS and NE-SW/ENE-WSW. Faults determined from the topography are likely to be recent and/or reactivated. If these correspond with the later time EM (i.e. with depth) and large-scale magnetic trends – these may be older or are likely to be reactivated.
Magnetics - Overall the magnetic data is flat with the major narrow magnetic highs (brighter) likely mafic dykes or edges of mafic sills. The magnetic expression over this region is quiet apart from the GRUB Line ultramafic rocks and the narrow, short strike length mafic dykes and sills. This makes defining faults significantly more difficult and means potential structures will need to be defined from not only the magnetic data but also the DTM and EM information.
Electromagnetic - The general character is that conductive material flanks both sides of the area. To the east lie a series of NNE-SSW trending west dipping conductors, in the Gander River Complex, and to west the survey flanks the boundary between siltstone and shale (eastern side of boundary – Hunts Cove Formation) and greywacke with siltstone (western side of boundary – Outflow Formation) of the Davidsville group. The Outflow Formation appears to extend further to the east than shown on the mapped geology, with a new boundary drawn on the interpretation map.
A change is also noted in the Hunts Cove from west to east with the western half of the Hunts Cove quite resistive with zones of even lower response, striking NNE-SSW, that may be more resistive bands, airborne induced polarization (“IP”), or even the axis to a dipping feature. This marked change in the EM conditions was also seen in the Fugro DIGHEM survey data. The EM data also indicates zoning in the Hunts Cove Formation and shows many NNE-SSW trends. The eastern half of the Hunts Cove is slightly more conductive possibly related to a topographic low in the area. However, the EM responses dissipate by the later time B-field. An ENE/NE fault which offsets the EM dextrally is seen in the dB/dt and B Field, early time square pulse data, but disappears quickly, suggesting this is a recent occurrence. In the more slightly conductive zone, a few features occur indicative of slightly stronger (sometimes dipping) conductors. The character of these are similar to the EM response over the Outflow formation but with less amplitude, and they dissipate more quickly. Like the western part of the Hunt’s Cove, NNE-SSW lineaments look like resistors/IP effects trending through the area. Between the eastern conductive zone and the GRC the data returns to the more resistive nature as seen on the western side of the Hunts Cove Formation. The faults derived from the EM data show good correlation with the ground geophysics surveys in that many of the proposed faults offset the IP trends outlined in the survey report.
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5.7.6 2018 Geophysical Interpretation-2017 Airborne Survey
Overview
Geophysics is important in the regional understanding of the geology and the gold mineralization but has not yet been of much use in defining or locating gold mineralization. Magnetics show a low magnetic response over the Davidsville group that is overshadowed by very high magnetic responses from the GRUB Line to the east and the Dog Bay Line to the west. Due to this the magnetics are of limited use in defining structure in either the GGN or GGS. The electromagnetic survey has also been of limited use in defining targets for follow up although it helps with the understanding of the geology in both the GGN and GGS. Both the magnetics and EM on the Twin Ponds area of the Queensway Project have been useful in defining geological units and also the structure although no significant gold zones have yet been located.
GGN
Most of the magnetic survey data, especially in the northern regions, shows a quiet magnetic background consistent with the mapped siliciclastic marine sediments of the Davidsville group, and NNE-SSW / NNW-SSE trending narrow magnetic features attributed to low-angle mafic dykes intruding the Davidsville group. The GRUB Line is obvious along the northeastern edge of the geophysical survey as a strong magnetic signature with associated EM zones / lineaments. Later NW-SE striking dykes are located in the Davidsville group close to the GRUB Line.
The magnetic data has been “upward continued” to identify areas of low magnetic intensity, possibly associated with gold mineralization, which are not easily identified in a magnetically quiet environment. It identifies several NNE trending areas of slightly lower magnetic intensity, including the Lotto, Letha, Grouse, H-Pond and Pocket Pond showings, and other areas between the AFZ and JPBDZ not yet explored.
Given the mostly low amplitude response of the magnetic data, structural features have been defined using upward continued magnetic grids, offsets and truncations in dykes and the EM data. The major structural directions determined from the geophysical data is NNW-SSE, NE-SW (dextral), NW-SE and N-S. The magnetic response from culture (a powerline) along the TCH is clearly identified crosscutting the survey.
Similar to the magnetic data, the EM response is relatively weak, with a fabric striking at 030 degrees. The weakly elevated background EM response is attributed to slightly more conductive material in low-lying areas. In a west to east direction, the units are more resistive closer to the AFZ and with an “abrupt” change in elevation (from 100 metres to 70 metres) closer to the JBPDZ, the EM is slightly more conductive. Variations in the data do not always directly correlate with changes in elevation – these may indicate changes in lithology.
Stronger conductive responses are noted immediately to the west of the AFZ and associated with the GRUB Line. The EM data also identified numerous lineaments, with several associated with mineralized areas. The lineaments have an unusual signature possibly an IP response, which may be due to clays, graphitic argillite or alteration. In the interpretation of the EM data, no differentiation has been made between conductive anomalies and potential airborne IP effect zones since along their length, these features can change geometry, appearing as either a conductive or airborne IP anomaly. Where strong and/or isolated IP effects exist, they have been labelled separately in the interpretation layers.
GGS
The magnetic fabric becomes more visible in the GGS and increases to the south. On the western geophysical survey boundary, a mafic unit is attributed to the Mount Peyton Intrusive Suite, and on the eastern survey boundary, the increased magnetic response may be part of the GRC.
An extensive gabbroic unit, striking NE-SW located in the south-central part hosts the Greenwood Pond showings. The unit may be folded and sheared along the fold axis with a strike of NE-SW. This unit is extremely disrupted and crosscut by multiple (proposed) structures and most of the showings occur in areas of reduced magnetic intensity, likely reflecting structures or alteration zones.
Extensive weak to moderate magnetic zones striking at 034 degrees in the south and 024 degrees in the north, lie in the south-central area of the survey and near the eastern survey boundary. The eastern magnetic zone, which approximately correlates with the mapped contact between the Outflow Formation and Hunts Cove Formation of the Davidsville group, is comprised of several narrow, close spaced magnetic lineaments coincident with formational EM conductors. The central zone is weaker than the zone to the east, and is adjacent to a formational conductive zone, rather than coincident, perhaps indicating that 7.5F and 7.5G are limbs of a NE-SW striking fold. Parallel with the eastern 7.5G zone on licences 24570M and 24568M, on the survey boundary is a unit of alternating mafic and felsic material judging by the magnetic signature with the IP zones correlating with the more felsic material.
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Along the western survey boundary, between the Mount Peyton Intrusive Suite mafic units and the gabbroic unit, is a non-magnetic unit which corresponds with a weak to moderate conductive zone which may be part of the Indian Islands Group or Ordovician black shale.
The previously mapped Bear Pond Gabbro lies in a magnetically quiet area, with the response more consistent to that of a sedimentary unit. From the magnetic response, the Great Bend Ophiolite is more extensive than mapped and is possibly folded along a NW-SE axis, as is the southern extent of the gabbroic unit.
The GGS is structurally complex with major structures following the geologic fabric, striking 025 to 040 degrees, and other structures trending subparallel to the Gander River at 060 degrees showing dextral offset, and 095 to 125 degrees, also with dextral offsets, occurring throughout the area. Less commonly approximately 170-180 degrees structures are identified.
The combination of the magnetic and EM data produces a slightly different geologic scenario especially in the southern GGS area. The (proposed) gabbroic unit is essentially along the mapped contact between Indian Islands Group and Davidsville group, and the contact seems to lie closer to the western survey boundary than previously mapped. Likewise, if the extensive eastern magnetic / conductive zone marks the transition between the Outflow Formation and the Hunts Cove Formation, then the contact is approximately 2 km further to the west in the northern part of the GGS area than what was previously mapped.
5.7.7 Twin Ponds
Unlike the GGN area, the magnetic data over the Twin Pond properties shows an elevated magnetic background. The mapped geology suggests that the major lithologies are the Ten Mile Lake formation (“TMLF”), the Duder Group (“DG”) melange / Badger Group (“BG”) and Mount Peyton Intrusive Suite mafic intrusives and these contacts are clearly identifiable in the magnetic data. In addition, a strongly magnetic unit striking NE-SW / NNE-SSW, adjacent to the Reach fault may an extension of a mapped mafic unit located to the northeast along the boundary of the claims. Two sets of dikes are mapped in the TMLF – NE/SW and NW/SE. In the DG/BG the dikes strike closer to a N-S direction, with a few of the NW/SE dikes intruding the units, suggesting these dikes are from a more recent swarm.
The EM data over most of the area is quite resistive, showing little response in the TMLF, except for a strong airborne IP response in Twin Pond itself, which is likely due to a build up of clay / lake bottom sediments. A weak conductive zone is noted at the contact between the DG and TMLF. It exhibits a dip response in the southern part of licence 24270M. To the north of a proposed NW-SE structure, which extends through Twin Pond, the zone is more conductive. Two near NW-SE striking conductors are confined between structures that parallel the Reach Fault. Two other conductive zones strike sub-parallel to the Reach Fault and where they intersect to the north is close to the Clydesdale showing. A weak conductive zone located along a probable structure trending NNW-SSE, if extended to the northwest, would intersect the T-Rex showing. There is no obvious correlation between the magnetic signatures and the locations of the showings.
Several major structural directions are defined, NNE-SSW (Reach Fault direction), NE-SW and NW-SE.
5.7.8 2018 Geophysical Interpretation-2017 Airborne Survey – Results
GGN - AFZ
Determining an indicative signature from either magnetic or EM data over the AFZ showings is difficult due to the proximity of the TCH and associated powerlines, however, potential “anomalies” are identified near the showings, with all showings lying in close proximity to a contact identified from the EM data and reflected in the topography. The mapped geology suggests a contact striking approximately 010 degrees between the Outflow Formation and Hunts Cove Formation of the Davidsville group, and magnetic lineaments support this orientation, however the EM data suggests the contact may be closer to NE-SW, 035 degrees, similar to most other contacts in the AFZ / JBPDZ area. From north to south, drill hole LG99-22 by Herman’s Brook, seems to correspond with this contact and the Lotto Zone also is close to Herman’s Brook and the contact with both in magnetic lows. A strong airborne IP effect lies approximately 700 metres to the northwest of LG99-22. The Dome showing, like the Lotto showing, lies along the contact, and corresponds with a weak airborne IP effect. The Road showing does not give any anomalous values, however between 1.1 km – 1.3 km to the west of the Road showing, near drill hole LG03-02, the EM shows an airborne IP effect and a contact defined from the EM only. To the northwest of the Baseline/Keats showing there is a dramatic change in the Outflow Formation/Hunts Cove Formation contact from flat lying (to the north) to shallow dipping to the east. The contact lies on the western side of South Herman’s Pond, and there is a corresponding weak airborne IP response.
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To the south of the TCH, the Bowater showing lies on strike with a north-south striking, weak magnetic low in mapped Outflow Formation. The EM shows nothing of significance associated with the showing however a strong airborne IP, noted on several lines, lies approximately 750 metres to the east. Strong magnetic lows are noted between the Knob/Bullet and Baseline/Keats showings on opposite sides of the TCH, however these are likely due to cultural effects, the roads, powerlines etc.
Much of the contact area to the south of the Grouse and Letha showings was mapped during the 2018 fieldwork. Although the region shows as a weak magnetic low, the fieldwork did not identify anything of interest in the southern AFZ. A 400 metres magnetic low that has not been explored extends southerly from Letha/Grouse. The zones further to the east also warrant further investigation. Comparison of the vertical derivative of the upward continued RMI with the EM contacts indicates that the EM contacts are likely structural.
Gander Gold North – JBPDZ
A geophysical EM signature is noted in the vicinity of the JBPDZ showings, and similar features are noted in close proximity to the known showings. Although there are a few, well-defined, conductors, the majority of EM anomalous features appear as IP effects which are due to faults, clays, alteration, graphitic material or mineralization, given the geometry of the profiles and how they correspond with features noted in historic ground IP data. The IP effects correlate with stronger IP zones from historic ground IP surveys.
Three resistive, sub-parallel, zones of interest, including the JBPDZ, were investigated during structural geology fieldwork in September 2018. All three areas showed alteration on the northern Gander River shore on these resistive zones. None showed major displacement, so they are alteration zones rather than structural features. The most prospective appears to be the JBPDZ however the central zone was only sampled along the shore.
The JBPDZ showings correlate with EM lineaments and lower magnetic zones, and tentatively with IP chargeability zones of variable strength. The zones may in part be due to graphitic content in the rocks which is also chargeable. The chargeability shows stronger zones to the west, closer to the AFZ. This is likely due to the more resistive EM background, resulting in a stronger chargeability response. These areas warrant further investigation. A third, large scale, structural element, parallel to the AL and JBPDZ is noted along the GRUB Line. Anomalous Au values in rock samples are noted adjacent to this structure in the Millers Brook area.
GGS - Greenwood Pond Area
The gabbroic unit, located in the south-central part, striking 047 degrees, hosts the Greenwood Pond showings, including Greenwood Pond #1-7, Aztec, A zone, Hornet, Road Gabbro, LBNL and Goose, further to the north. The structures in the area are complex but the dominant direction appears to be consistent with the geologic fabric, with most showings lying along regional NE-SW structures with potentially sinistral offset. Aztec, A-Zone and LBNL appear to lie along an ENE regional structure. A second subparallel structure, approximately 2 km to the south, extends through the Jumbo Brook area, close to anomalous Au in till areas and significant Au in soil values.
The North Paul’s Pond showing lies adjacent to an extensive formational conductor, likely graphitic argillite, in a weakly magnetic zone. Goose and LBNL lie adjacent to the formational conductor and a separate, weak, short strike length, near-vertical, conductor seems to correlate with the Goose showing which carries arsenopyrite and may explain the conductor. Several shorter strike length conductors lie on strike with Goose and LBNL to the southwest, parallel with the extensive formational conductive zone. Given their proximity and similarity to the Goose showing these short strike length conductors warrant further investigation. Only one, lies adjacent to the gabbroic unit. Several other conductors on the eastern side of the formational conductor also warrant further investigation.
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Two km to the southeast of the Goose showing, an area of significant historic Au in soil samples lies at the junction of ENE, NE and WSW structures, an example of how a conductor can change geometry from a regular conductor to the south of a NE-SW structure to an IP anomaly to the north of the structure, with the strongest IP response correlating with the anomalous soil samples.
Significant anomalous Au in till samples in the magnetically low area corresponds with lower EM background values and a “gap” in the formational conductor with significant IP responses. This may represent alteration / mineralization and it warrants further investigation.
5.7.9 2018 Structural Geology Survey
Structure is a key aspect of the Queensway Project and is considered to be a critical control of gold mineralization in the area. A structural study of the area was contracted to GoldSpot was carried out in September, 2018 when geologists from GoldSpot visited the property in two groups of two field geologists and were oriented to the area by New Found geologists and prospectors who accompanied them during their traverses.
The intention of the survey was two-fold: (i) to understand the regional structure of the Davidsville group and nearby units. (ii) to evaluate the structural setting of the various gold showings to determine how the mineralization was emplaced and to look for similar structural settings in the Queensway Project that could host similar mineralization.
5.7.10 2018 Structural Geology Survey – Results
Most units display a penetrative, sub-vertical, axial planar structural fabric (S1) trending NNE-SSW. Local decimeter-scale, open to isoclinal F1 folds have been observed, plunging shallowly to the north-west. Occasional SW-plunging folds are interpreted to be caused by D2 interference, consistent with other studies.
Variations in the attitude of S1 are documented and are interpreted as resulting from the development of crosscutting NE- trending dextral fault/shear zones, consistent with a late stage dextral transpression during the main deformation event. Drag folds affecting the main fabric are present. Such fault zones are present at outcrop-scale, typically with 0.5 to a few metres offset determined in the presence of quartz veins. The widest example occurs on the north shore of Gander lake, to the west of the Gander river. It consists of a 10-20m wide, sub-vertical zone of intense S1 disruption trending at N75.
The S1 fabric is frequently affected by crosscutting D2 structures. Such structures consist of early to well-developed kink banding, fault planes and, locally open folds. They trend N125-N130 and dip approximately 60°SW. A conjugate, secondary set of faults / kink banding is locally present at approximately 30°. Relative kinematic indicators indicate NW- SE extension and NE-SW compression.
Most structures observed are of metre to decametre-scale. The lithological homogeneity of rocks in the Queensway Project hinder the identification and delineation of major structures at property scale. Consequently, geophysical data has been used to identify probable structures.
5.7.11 2018 Till Geochemistry
Geochemical till surveys mainly conducted for Au, by Noranda, with follow up reconnaissance and grid soil sampling, which generated prospecting targets by Noranda and later prospectors, resulted in the discovery of showings such as the Dome, Ketas/Baseline, H Pond, Knob and other zones on the GGN area and the Paul’s Pond and Greenwood Pond showings in the GGS area.
A detailed till survey for Au over the JBPDZ in late 2016 defined a large area of anomalous tills along the trend, resulting, with follow up prospecting, in the discovery of significant gold zones, such as the Glass and 1744 area. In the GGS area, regional till surveys by New Found in 2018 generated areas of anomalous Au values, prospective for gold mineralization.
A milder than normal winter in central Newfoundland allowed New Found crews to collect till samples starting in February through to July, 2018. The till locations were based on GPS based grids designed around property boundaries, lakes, rivers, and boggy areas. The regional till survey produced 339 samples (95 % coverage) and the detailed grid produced 276 samples (90% coverage). Sites with samples not taken resulted from excessive organic material, sandy, non-till material, or rocky ground with little till. Efforts were made to sample all sites however areas along the NW Gander River, especially on the detailed grid were sometimes reworked fluvial material and not true tills and were not sampled.
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In the GGN area, 4 till samples (JBPT1 to JBT4-4) were collected in the area of the 2016 1,744 gold grain site identified in late 2016 to validate the results and compare the two analytical methods.
The geochemical samples were sent to Activation Laboratories (“Actlabs”) in Ancaster, Ontario and analyzed using analytical code 1H INAA (INAAGEO) / Total Digestion ICP (TOTAL) techniques for Au and 48 other elements. These techniques included a 4-acid digestion, followed by neutron activation analysis (“INAA”) for Au, and either neutron activation or ICP analysis for the other elements. Twenty-one samples, which gave anomalous gold geochemical results, had larger samples taken at the same time and from the same sample material were later sent to ODM of Nepean, Ontario for heavy mineral and gold grain analysis.
Figure 22 – Queensway Project Overview – Gold in Till Anomalies. Source: New Found, 2020
5.7.12 2018 Till Geochemistry – Results
Of the 615 till samples (356 regional, 276 detailed), 83 samples (64 regional & 19 detailed) gave analysis values > 8 ppb Au (14%) with 8 ppb Au considered a background level for the area. 413 samples gave values below detection of <2 ppb Au. Of the Au anomalous samples, 28 (25 regional & 3 detailed) gave values of 20 ppb Au or higher with the highest values - 133 ppb Au (Regional-33980), 65 ppb Au (Detailed-37338) and 45 ppb Au (Regional-33075).
The till results suggest at least 6 target areas for follow-up prospecting and advanced exploration, from north to south:
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Hunt’s Brook - 33101 - 26 ppb Au, 33098 - 13 ppb Au – Shea Brook area. Just to the west, near the SW Gander River - 33980 - 133 ppb Au;
The Narrows – East NW Gander River - 36212 - 31 ppb Au, 36213 - 22 ppb Au, 36215 - 22 ppb Au.
SE of Paul’s Pond - Larsen’s Falls - 37494 - 35 ppb Au, 36149 - 30 ppb Au, 36745 - 26 ppb Au, 37488 - 25 ppb Au, 36746 - 16 ppb Au;
Bernard’s Brook - Pine Tree Hill - 36533 - 30 ppb Au, 36343 - 30 ppb Au, 36525 - 20 ppb Au , 37531 - 16 ppb Au , 36534 - 12 ppb Au;
South of Eastern Pond - 36245 - 40 ppb Au, 36249 - 23 ppb Au, 36246 - 22 ppb Au, 36247 - 18 ppb Au, 36248 - 16 ppb Au, 36238 - 15 ppb Au; and
Bear Pond - W Great Gull River - 33075 - 45 ppb Au, 33077 - 20 ppb Au, 39018 - 16 ppb Au.
The 2018 ODM gold grain analysis gave varied results. Till sample 33980 from the Shea Brook area gave the highest till value from the 2018 season at 133 ppb Au, however, the 2018 ODM gold grain analysis found no gold grains in the sample classified as a till, leaving unanswered questions such as whether the sample was analyzed correctly at Actlabs or there was an error during sampling or processing.
Ice flow direction is towards the north-northeast with target areas to the south-southwest and further till sampling is required to properly evaluate the results. The target areas, show little to no correlation with mineral occurrences indicating that unknown mineralized areas could exist in the GGS. The recognition of trace cinnabar in the samples in the ODM work requires additional research and review.
In the GGN area, samples JBT1 and JBT3 gave values of 9 ppb Au, JBT2 gave 15 ppb Au and JBT4 gave 18 ppb Au, all above the accepted background level of 8 ppb Au and considering the gold grains in till discovered by ODM in this area indicates significant potential in both the GGN and GGS areas.
5.7.13 2018-Present Prospecting
Prospecting of both outcrop and float boulders, mainly in follow up of till and soil geochemistry, has been the main discovery generator on the property with most gold zones found by prospecting. This is due to good logging road access to all three areas of the Queensway Project, the relatively thin till cover and the fact that most gold mineralization is associated with quartz veining which standardizes the identification of prospective mineralization. In the JBPDZ, recent logging activity, from the main road through the centre of the property, has included scarification which, while intended to help regeneration of the forest, has also had the effect of uprooting many quartz blocks derived from bedrock even in areas where overburden may be 6 metres plus in depth.
A total of 528 prospecting rock samples were taken on the Queensway Project in 2018. Samples were outcrop (309), chips from outcrop (5), subcrop (8) or float samples (206), taken mainly as “grab” samples or “selected” grabs with mineralization, especially visible gold, included in the sample. Forty-one control samples, 24 blanks and 17 standards, were also included for QAQC (defined below) analysis.
Targets in the GGS area, based on historical values and till results were evaluated. These included: Joe’s Feeder; the Narrows at Steel Bridge; Winter Brook; Hussey Pond; SE Paul’s Pond; Greenwood Pond; Jumbo Brook; Eastern Pond and Larson’s Falls. Associated with a structural study by GoldSpot, abnormally low water levels in the late summer, allowed for prospecting to be done along the shore of Gander Lake and the Gander river systems and around historic showings, including the southern AL trend in the Outflow area. In the northwest part of the JBPDZ trend, prospecting evaluated historical results which suggested a continuation or parallel trends.
5.7.14 2018-Present Prospecting – Results
Three hundred and three samples had Au values below detection limit of 1 ppb; seventy-two samples gave values >100 ppb Au including thirty-six >500 ppb Au, twenty-four >1000 ppb Au, eleven >3000 ppb Au, and four samples >10000 ppb Au. The highest value located was X942013 - 44.7 g/t Au, a grab sample from the Glass T2 trench in a sulphide enriched portion of a quartz vein. In general, an increase in Au values is associated with an increase in As values although overall As values are usually <500 ppm. Correlation of base metals and Ag with Au is negligible except for some mineralization along the eastern trend on the JBPDZ where Pb values are elevated and a dark grey sulphide, thought to be boulangerite is noted (Table 9-6).
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GGS - Targeted anomalous tills or geophysical targets. These included, from south to north:
Eastern Pond – thirty-four samples, with four giving values >100 ppb Au with a maximum value of 680 ppb Au, a float sample collected near the eastern shore of Eastern Pond;
Greenwood Pond area – twenty-four samples gave seven values >100 ppb Au including four samples >1000 ppb Au. The highest values - 6590 ppb Au and 1.7 ppm Ag and 3310 ppb Au occur proximal to known mineral occurrences being the Greenwood #6 and the A-zone extension. Sample X942359, from the same area, gave Au below detection limit with 14.2 ppm Ag, the highest in the sample area;
Paul’s Pond – two samples >1000 ppb Au - 1185 ppb Au (LBNL showing) and X942609 - 1150 ppb Au (Goose Showing);
Till target areas C and D – one hundred and seventy samples, mainly along the river near Larsen’s Falls where extensive quartz veining is noted. Four samples gave values >100 ppb Au with float sample 33217 assaying 1910 ppb Au; and
Steel Bridge area to the east of the NW Gander River and along the river, based on anomalous tills - Till target B. 22 samples, including 5 chip samples, with 12 giving results >100 ppb Au and the highest value of 4000 ppb Au and 1660 ppb Au in outcrop along the river to the north of the bridge.
The remaining three areas: (1) NW Gander River forest access road between Yellow Fox Brook and Clarks Brook – twenty-seven samples all gave values <20 ppb Au; (2) the shoreline of Gander Lake and near Careless Cove – thirty-nine samples, ten giving values >100 ppb Au with a high value of 1185 ppb Au from outcrop along the shore of Gander Lake; and (3) the shoreline of Gander lake between the NW Gander River and Hunts Cove, including the SW Gander River, Shea Brook and Joe’s Feeder – forty-six samples with three >1000 ppb Au; 33317 - 3020 ppb Au, 3309 - 1340 ppb Au, and 33316 - 1285 ppb Au, from outcrop of brecciated quartz just west of Joe’s Feeder.
Twin Ponds - targeted conglomerates, gabbro sills, geophysical anomalies or areas on strike from the T-Rex, Clydesdale and Big Pond showings to the north off the New Found licences. Forty-three samples – four values >100 ppb Au, from outcrop with quartz veins at the contact between gabbro and host sediments to the north of Twin Ponds.
GGN – Targets - high till values or gold grain counts; Fault Zones- the AFZ and JBPDZ, in areas where limited work had been carried out, or geophysical anomalies.
South of the TCH along the AFZ and along the north shoreline of Gander Lake – thirty-three samples with seven >100 ppb Au and the highest values - 13,700 ppb Au, 3460 ppb Au, both quartz floats along the eastern shore of the Outflow on the AFZ;
North of the TCH – a cursory examination of historic trenches with X942081, from between the Dome and Lotto Zone giving a value of 14,650 ppb Au;
Between the Lachlan trench and H Pond showing on the JBPDZ – forty-one samples with fourteen giving values >100 ppb Au, eight >1000 ppb Au and two >10,000 ppb Au with all the anomalous values along the JBPDZ. The highest value – 44.7 g/t Au was a grab sample from the Glass trench while a value of 13,250 ppb Au came from a quartz float between the Glass trench and H Pond showing – This sample also had elevated Ag of 1.4 ppm and a low As value near the lower detection limit; and
Eastern and northeastern limits of the GGN licence – Targets - historical soil, till and prospecting results – thirty- two samples with two >100 ppb Au but <500 ppb Au, from quartz float along the JBPDZ.
5.8 Drilling
The 2019 diamond drilling program at the AFZ comprised 586 metres of HQ diameter core in 4 holes completed between October 28, 2019 and November 17, 2019 (Figure 23 and Figure 24 below). Holes New FoundC-19-01 and New FoundC- 19-02 were drilled to target the Keats Zone where historical drilling and trenching suggested gold mineralization was to occur. Holes New FoundC-19-03 and New FoundC-19-04 were drilled from a single setup at the Dome Showing to further evaluate known gold mineralization. The 2019 diamond drilling program was successful in identifying gold mineralization along the AFZ at both the Keats and Dome showings.
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Drilling along the JBPDZ in 2019 was comprised of six holes totaling 1,400m between November 17, 2019 and December 14, 2019 targeting the Glass zone and extensions of the H-Pond zone. Holes New FoundC-19-05, 07, 08, 09, 10 targeted mineralization along both the Glass and H-Pond corridors while New FoundC-19-06 only tested the glass vein system.
The samples with the highest potential for gold were assayed using the ALS Mineral multi analysis screen, gravimetric and ore grade analysis, methods include; Au-AA26 Ore Grade Au 50g FA AA Finish, Au-GRA22 Au 50g FA-GRAV Finish, and Au-SCR24C Au Screen FA Double minus 50g 2-3 Kg.
BHID | UTME (NAD27) | UTMN (NAD27) | ZPT | DIP | BRG | LENGTH (m) | ||||||||||||||||||
NFGC-19-01 | 658148 | 5427245 | 93 | -43.6 | 302.19 | 199 | ||||||||||||||||||
NFGC-19-02 | 658035 | 5427130 | 90 | -43.5 | 299.69 | 270 | ||||||||||||||||||
NFGC-19-03 | 658632 | 5428486 | 85 | -44.7 | 0.39 | 64 | ||||||||||||||||||
NFGC-19-04 | 658632 | 5428486 | 85 | -63.5 | 0.59 | 52 | ||||||||||||||||||
NFGC-19-05 | 664842.5 | 5430309 | 85 | -44.7 | 302.69 | 274 | ||||||||||||||||||
NFGC-19-06 | 664867 | 5430352.5 | 85 | -44.1 | 302.19 | 94.5 | ||||||||||||||||||
NFGC-19-07 | 664891 | 5430400 | 85 | -44.6 | 300.99 | 248 | ||||||||||||||||||
NFGC-19-08 | 664823 | 5430200 | 85 | -44.2 | 299.39 | 262 | ||||||||||||||||||
NFGC-19-09 | 665093 | 5430660 | 85 | -44.2 | 300.89 | 299.6 | ||||||||||||||||||
NFGC-19-10 | 665176 | 5430750 | 85 | -43.7 | 303.99 | 222.2 | ||||||||||||||||||
TOTAL | 1985.3 |
Figure 23 – 2019 Diamond Drill Hole Locations
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Figure 24- Queensway Project – 2019 Diamond Drill Hole Locations. Source: New Found, 2020.
The 2019 diamond drilling program at the AFZ was designed to further evaluate the gold mineralization and quartz veining along the east side of the AFZ trend specifically at the Keats and the Dome Showings. The results of this drilling will be used in conjunction with historical data to plan future exploration along the AFZ trend.
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Drilling along the JBPDZ in 2019 was comprised of six holes totaling 1,400m targeting the Glass zone and extensions of the H-Pond zone. Holes New FoundC-19-05, 07, 08, 09, 10 targeted mineralization along both the Glass and H-Pond corridors while New FoundC-19-06 only tested the glass vein system (Figure 25).
Figure 25 - Queensway Project – Plan View Interpretation of the JBPDZ Drilling with Major Vein Sets as Indicated (Holes New FoundC-19-05 through New FoundC-19-10). Source: New Found, 2020
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New FoundC-19-01
Drilling at New FoundC-19-01 was planned to target 50 metres vertically below historic drill hole LG08-48 at the Keats Zone. A significant gold mineralized zone was intercepted from 96 to 115 metres grading 92.86g/t Au over 19.0 metres including 285.2 g/t Au over 6.0 metres containing considerable visible gold and wall rock sulphidation consisting of pyrite and lesser arsenopyrite. Within the quartz vein material traces of arsenopyrite, chalcopyrite and boulangerite were found. The zone was hosted in dark grey shale belonging to the Davidsville group and the quartz zone is spatially associated with a number of fault structures including one gouge zone up to 60cm in width. This is believed to be a second order structure to the AFZ and was intersected by all of the historic diamond drilling at the Keats zone but previously undocumented.
The vein intersection is the extension of the zone encountered in drill hole LG08-48 (50m above) and believed to be the extension of surface mineralization found in historical United Carina trench #3.
The quartz vein was notably vuggy and exhibiting textures associated with boiling events in epithermal gold zones. Possibly due to a flashing event within the larger mesothermal AFZ system.
A second mineralized fault structure was intersected at 177.5m with associated gold mineralization in lesser quartz stockwork from 177.5 to 180.0m depth grading 3.38g/t Au over 2.5m. Both fault zones intersected in the hole are believed to be secondary to the regional AFZ. Drilling did not continue in order to intersect the primary fault.
Figure 26 - Queensway Project – New FoundC-19-01 Visible Gold in Quartz Circled. Source: New Found, 2020
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Figure 27 - Queensway Project - New FoundC-19-01 Keats Zone Intercept. Source: New Found, 2020
Figure 28 – Individual Assay Results – New FoundC-19-01 – Keats Zone
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New FoundC-19-02
Drilling at New FoundC-19-02 also targeted the Keats zone located 160m south of New FoundC-19-01 and targeting 50m vertically below historic drill hole LG99-12. This hole also intersected the second order fault structure found in New FoundC-19-01 with associated narrower quartz veinlets and wall rock sulphidation (pyrite and arsenopyrite) and visible gold in quartz. The composite grade of the zone was 1.54 g/t Au over 12.0 metres with one metre grading 5.45 g/t Au and containing visible gold. Exhibiting a similar width and structural control to New FoundC-19-01 the results of this hole are promising as the Keats system is showing robust width and a known length up to 300m. Figure 29 below shows a plan view interpretation of the Keats zone with dill holes New Found-19-01 and New FoundC-19-02. Based on the vein intersection angles and overall geometry the true width of mineralization in New FoundC-19-01, 02 is estimated to be 70% of the down hole interval.
Figure 29 - Queensway Project – 2019 Drilling at the Keats Zone. Source: New Found, 2020
New FoundC-19-03
Drilling at New FoundC-19-03 targeted the Dome showing main vein where historical drilling had previously intersected high grade gold mineralization. The main vein was intersected at a depth of 20.9 to 22.0 metres with a second vein from 24.9 to 25.5 metres and gave an overall composite grade of 16.52 g/t Au over 6.1 metres anchored by 162.5 g/t Au over 0.6 metres.
New FoundC-19-04
Drilling at New FoundC-19-04 also targeted the Dome showing main vein and from the same setup but drilling at -60 degrees below New FoundC-19-03; this hole intersected the main Dome vein from 28.3 to 29.7 metres noting visible gold on the margin of the vein. This gave a composite average of 1.14 g/t Au over 8.0 metres including one metre grading 4.61 g/t Au.
At the Dome showing visible gold mineralization appears to be primary confined to the margin of the vein. Of particular note was the apparent vuggy nature of the quartz and similarity to the veining intersected at the Keats zone suggestive that the emplacement mechanisms were similar. Based on the vein intersection angles and overall geometry the true width of mineralization in New FoundC-19-03, 04 is estimated to be 90% and 60% respectively of the down hole interval.
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New FoundC-19-05, 06, 07, 08
New FoundC-19-05, 06, 07, 08 were all drilled to target the Glass vein system which was discovered in 2017 and excavated by New Found in 2017 and again in 2018. All four holes were targeted to intersect the Glass vein system at shallow depths (<25m). The Glass vein system is believed to be a parallel vein system to the H-Pond zone approximately 100m to the west and drill holes New FoundC-19-05, 07 and 08 were extended to intersect both vein systems.
The Glass vein array was noted in holes New FoundC-19-05, 06 and 08 but gave poor gold results and visible mineralization was very limited.
New FoundC-19-05 was successfully intersected a broad vein intercept within the H-Pond zone from 231.0 to 242.0m grading 2.35 g/t over 11.0 metres including 6.73 g/t Au over 3.0 metres as well as a second vein intersection from 268.0 to 269.0m grading 2.75 g/t Au over 1.0 metres. This intercept has extended the known mineralized extents of the H-Pond zone by roughly 150 metres along strike. The vein system was marked by significant iron-carbonate alteration zone. This is also one of the deepest intersections of the H-Pond zone to date.
New FoundC-19-06, 07 and 08 failed to intersect and significant mineralization.
New FoundC-19-09, 10 were both drilled along strike of the H-Pond and Glass vein systems along the JBP fault zone and drilling in an area with very high gold in till results (1744 zone) and a significant number of visible gold bearing float samples which were interpreted to be derived from the JBP fault zone. Both holes were successful in intersecting new vein systems. The broad quartz intercept in New FoundC-19-09 shows a nearly identical alteration and sulphide pattern to the intercept in New FoundC-19-05 from the H-Pond zone. The intercept in New FoundC-19-09 is believed to be an extension of the H-Pond by roughly 500m along strike. New FoundC-19-09 intersected 4.39 g/t Au over 9.0 metres including 17.45 g/t Au over 2.0 metres from the well altered vein set thought to be the extension of the H-Pond zone. An intercept near the top of New FoundC-19-10 with unknown correlation to New FoundC-19-09 intersected 1.07 g/t Au over 4.0 metres and several lesser zones. Based on the vein intersection angles and overall geometry the true width of mineralization in New FoundC-19-05, 09, 10 is estimated to be 70% of the down hole interval.
The 2019 drilling campaign was successful in identifying auriferous quartz veined zones of sufficient size, tenor and textural characteristics to warrant additional exploration. Based on the drill results to date, the Appleton Fault Trend has an enormous potential to host an Epizonal style Orogenic gold deposit with mineralization styles similar to those of Fosterville in Australia. The occurrence of vuggy veins with free gold and a blend of antimony mineral species including stibnite and boulangerite suggest a flash boiling event on a near mesothermal orogenic gold system such as seen at Fosterville.
Significant composite gold assay results are shown in Figure 30; the true widths of the mineralization in the below table is not known but estimated to be from 60-80% of the down hole composite width based on intersection angles and correlation to historical drilling.
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Hole ID | From | To | Length(m) | Au (g/t) | Zone | |||||||||||||
NFGC-19-01 | 83.0 | 83.7 | 0.7 | 2.46 | Keats | |||||||||||||
NFGC-19-01 | 95.0 | 115.5 | 20.5 | 86.17 | ||||||||||||||
incl | 96.0 | 115.0 | 19.0 | 92.86 | Keats | |||||||||||||
incl | 105.0 | 111.0 | 6.0 | 285.20 | ||||||||||||||
NFGC-19-01 | 117.5 | 118.5 | 1.0 | 1.56 | Keats | |||||||||||||
NFGC-19-01 | 146.5 | 147.5 | 1.0 | 1.30 | Keats | |||||||||||||
NFGC-19-01 | 177.5 | 180.0 | 2.5 | 3.38 | Keats | |||||||||||||
NFGC-19-02 | 142.0 | 154.0 | 12.0 | 1.54 | ||||||||||||||
incl | 142.0 | 143.0 | 1.0 | 5.45 | Keats | |||||||||||||
NFGC-19-02 | 253.0 | 254.0 | 1.0 | 1.07 | Keats | |||||||||||||
NFGC-19-03 | 20.4 | 26.5 | 6.1 | 16.52 | Dome | |||||||||||||
incl | 20.9 | 21.5 | 0.6 | 162.50 | ||||||||||||||
NFGC-19-04 | 26.0 | 34.0 | 8.0 | 1.14 | Dome | |||||||||||||
incl | 29.0 | 30.0 | 1.0 | 4.61 | ||||||||||||||
NFGC-19-05 | 231.0 | 242.0 | 11.0 | 2.35 | ||||||||||||||
incl | 231.0 | 234.0 | 3.0 | 6.73 | H-Pond | |||||||||||||
NFGC-19-05 | 268.0 | 269.0 | 1.0 | 2.75 | H-Pond | |||||||||||||
NFGC-19-06 | NSV | |||||||||||||||||
NFGC-19-07 | NSV | |||||||||||||||||
NFGC-19-08 | NSV | |||||||||||||||||
NFGC-19-09 | 15.5 | 16.5 | 1.0 | 1.65 | H-Pond | |||||||||||||
NFGC-19-09 | 120.0 | 122.0 | 2.0 | 1.13 | H-Pond | |||||||||||||
NFGC-19-09 | 162.0 | 171.0 | 9.0 | 4.39 | H-Pond | |||||||||||||
incl | 165.0 | 167.0 | 2.0 | 17.45 | H-Pond | |||||||||||||
NFGC-19-10 | 22.0 | 26.0 | 4.0 | 1.07 | H-Pond | |||||||||||||
NFGC-19-10 | 66.0 | 68.0 | 2.0 | 1.59 | H-Pond | |||||||||||||
NFGC-19-10 | 180.0 | 185.0 | 5.0 | 0.62 | H-Pond |
Figure 30 - 2019 Diamond Drill Hole Significant Gold Composite Intercepts
5.9 Sample Preparation, Analysis and Security
All analytical data for New Found’s Queensway Project after May of 2018 is obtained and reported under a formal quality assurance and quality control (“QAQC”) program, monitored by Greg Matheson P.Geo New Found’s Qualified Person for QAQC as defined by NI 43-101.
An independent review of the QAQC program by the QP of the Queensway Technical Report confirms that it utilizes CIM Best Practices Guidelines and NI 43-101 standards of disclosure. The program is designed to suit the Queensway Project and is guided by the level of confidence in the laboratory, anticipated grades in samples, distribution of mineralization, geology and other factors. The procedure for sample collection, processing and analyzing is defined in the sections below.
Check analysis of New Found samples collected prior to May 2018 was completed by sending selected and random samples to ALS for secondary lab validation. No issues with the historical New Found samples were noted.
Samples collected since May 2018, under the adoption of New Found’s formal QAQC policy have shown with a high level of confidence that the analytical results produced from ALS are an accurate representation of the mineralized content within the sampled rock.
The insertion of a blank or standard occurred every 10 samples switching between the blank and standard reference material using 3 different standards, OREAS 218, 224 and 255 for all rock and core samples. The blank consisted of a unmineralized red sandstone from a roadcut near Botwood, NL whereas the standards were purchased from Analytical Solutions Ltd. Of Mulmur, ON who provided the OREAS certified reference materials. Detailed QAQC policy and results can be seen in section 12 below.
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It is the opinion of the QP of the Queensway Technical Report, that the sample preparation, analyses and security employed by New Found is adequate and meets the CIM best practices.
ALS and EA are accredited by the International Accreditation Service, which conforms with requirements of ISO/IEC 17025:2005. There is no relationship between the laboratories used and New Found.
5.9.1 Analytical Methods
EA – Pre 2018
Assay preparation procedures at EA for standard New Found samples involve crushing of the entire sample to approximately 80% passing -10 mesh. The complete sample is riffle split down to approximately 250g of material. The remainder of the sample is bagged, labelled and stored as a coarse reject. The 250g split is pulverised using a ring mill pulveriser to approximately 95% -150 mesh material. Analysis is conducted on a 30g pulp split with fire assay followed by ICP-AES finish.
EA metallic screen assay preparation procedure is to crush the sample to approximately 80% passing -10 mesh. The entire sample is pulverized to approximately 95% in 200-300g portions. All pulverised material is passed through a 150 mesh screen. The total fraction (+150 mesh) is fire assayed as one sample and the weight recorded. A 30g sample from the -150 mesh is weighed and fire assayed. The two fire assay results (+150 and -150 mesh) are calculated and the weighted average gold result is reported.
ALS
Assay preparation procedures at ALS for standard New Found samples involve crushing of the entire sample to 85% passing 2mm then riffle splitting a 1000g pulp to be pulverized to 85% passing 75 microns. Analysis is conducted on a 30g pulp split with fire assay followed by ICP-AES finish. Samples reporting above 10 ppm in ICP analysis are subject to a 30g gravimetric fire assay.
Samples noted to contain visible gold or anticipated to carry high assay grade (including core samples) are subject to a metallic screen analysis. ALS metallic screen assay preparation procedures involve the crushing of the entire sample to 70% passing 6mm and pulverising up to a 3kg split to 85% passing 75 microns. The sample is then dry screened at 100 micron. Duplicate 50g fire assays with AAS finish are completed on splits of the undersize fraction and the entire oversize fraction is assayed. Total gold content is calculated based on the individual assays and weight fractions.
5.9.2 Sample Security and Transportation
The security of samples is a major component of the sampling process. The collection, packaging, transport, and receipt of samples are conducted under a strict and traceable chain of custody. The collection and packaging of samples for shipping is undertaken by contractors of New Found under the supervision of New Found’s site geologist, Mike Regular P.Geo. Samples are collected and promptly stored in a dedicated, secure storage room under lock and key pending shipment to the laboratory. For shipment, several individual sealed samples are placed into labelled shipping boxes and are securely closed with shipping tape.
All of New Found samples were transported directly to EA in Springdale, Newfoundland, upon completion of sampling, prior to May 2018. Since May 2018, New Found has been using ALS in Vancouver B.C. All 2018 sampling was directly supervised by Mike Regular, P.Geo., and all samples were handled and shipped by Mike Regular, P.Geo. Rock samples are shipped by commercial courier to ALS Minerals preparation facilities in either Sudbury, ON or Timmins, ON. Drill Core samples are shipped by commercial courier to ALS preparation facilities in either Timmins, ON or Moncton, NB.
Samples are shipped on a regular basis to ALS. Upon receipt by the lab, the samples are logged in and checked against New Found’s submittal form and chain of custody document for any discrepancies.
The Company maintains secure physical chain of custody documentation with its transportation suppliers.
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5.9.3 Quality Assurance and Quality Control
New Found’s QAQC program is designed to systematically monitor and evaluate sample collection and handling from the field or core shack to the assay laboratory to prevent mishandling and/or tampering of the samples and to eliminate potential sources of uncertainty and issues in the final assay results.
New Found’s personnel ensure that four quality control samples are included in every 40 samples, representing 10% of the total samples, which meets the industry standard. All control samples are submitted to the laboratory without any additional identification marks apart from the sample tag number.
The control process is that every 10th sample submitted is a controlled sample. A standard or blank is inserted every tenth sample in alternating order.
Certified Reference Material (“CRM”); and
Blank.
This control insertion cycle is repeated until all samples are submitted to the lab for analysis. Additionally, for a minimum of 1 sample per batch submitted, or a minimum of 1 sample per 100 samples submitted, the pulps are set aside to be submitted to the check lab once enough samples have accumulated.
Samples New Found submitted to EA prior to May 2018 did not utilize a formal QAQC program, samples were submitted to the lab without the use of certified reference materials, blanks or duplicate samples. QAQC monitoring was left to the lab’s in-house QAQC controls to detect any issues with the analytical testing. Further check analysis in 2018 as indicated above has shown the samples collected by New Found prior to May 2018 are of an industry standard analytical quality and analytical control.
The different types of QAQC samples that are used within New Found:
Standards or CRM are samples of known or accepted value that are submitted to assess the accuracy of a laboratory. A difference from the expected CRM result indicates a bias within or between the assay batches. Standard samples may be purchased commercially or may be prepared internally, and it is recommended to utilize standards that span the potential range of likely assay values. These CRMs used to date were produced by Ore Research and Exploration Pty Ltd. of Bayswater, Australia and include the following CRM codes: OREAS 218, 224 and 255.
Blanks are samples without gold mineralization are submitted with each batch of samples sent to the laboratory. The blank material is collected form a location known to be devoid of any mineralization or purchased from a reputed supplier. Results from these samples indicates any contamination introduced during the sample preparation or analysis procedures.
Lab Check Samples: lab check samples check the analytical precision of the laboratory relative to another laboratory. Check assays through a secondary laboratory does not determine which laboratory is more accurate. Pulp samples from the primary laboratory are retrieved and submitted as a batch to the secondary laboratory for analysis. The selection to the second laboratory is done after ensuing that is uses an assaying technique identical to the principal laboratory.
As part of the 2018 prospecting and surface exploration program at the Queensway Project, the Company utilized three certified reference materials as well as blank rock material in its sample stream. All samples during this time were submitted to ALS laboratories with preparation completed in Sudbury, Ontario and analysis completed in Vancouver, British Columbia. Overall, the standard reference materials performed very well with no samples reaching a warning limit.
The blank materials submitted to the laboratory also performed well with only one sample showing a gold value above the lower detection limit of the laboratory.
The QP of the Queensway Technical Report declares that the results presented by New Found and conducted by its analytical provider would be satisfactory for use in the Queensway Technical Report.
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5.9.4 Data Verification
QP Dawn Evans-Lamswood visited the site between February 13th and 14th, 2020. The visit included reviewing the Queensway Project geology, project data, drill cores, core processing techniques and viewing the claim areas. Inclement weather conditions prevented the author from visiting individual drill collars.
Historic diamond drill core was not available for review at the time of the visit as the majority of historic core is stored at the provincial core library in Buchans, NL.
During the site visit the QP of the Queensway Technical Report conducted independent sampling of several intervals from the 2019 drilling program. Selected intervals were sawn in one quarter core and bagged for analysis at Eastern Analytical laboratories in Springdale, NL. The results of the verification analysis show a good correlation to the sampling conducted by New Found (Figure 31).
HolelD | From | To | Width | Sample Type |
DEL Sample
ID |
DEL Sample
Grade g/t |
NFGC Sample ID |
NFGC Sample
Grade g/t |
||||||||||||||||||
NFGC-19-01 | 95.00 | 96.00 | 1.00 | 1/4 Core | X942757 | 1.09 | X943095 | 1.33 | ||||||||||||||||||
NFGC-19-02 | 143.00 | 144.00 | 1.00 | 1/4 Core | X942758 | 0.19 | X943374 | 0.43 | ||||||||||||||||||
NFGC-19-02 | 197.00 | 198.00 | 1.00 | 1/4 Core | X942759 | 0.03 | X943435 | 0.05 | ||||||||||||||||||
NFGC-19-03 | 20.90 | 21.50 | 0.60 | 1/4 Core | X942761 | 206.95 | X943534 | 162.50 | ||||||||||||||||||
NFGC-19-04 | 27.00 | 28.00 | 1.00 | 1/4 Core | X942762 | 0.29 | X943612 | 0.55 |
Figure 31 - Results of Independent Sample Validation: Source New Found, 2020
The digital database prepared by New Found, and provided to QP Dawn Evans-Lamswood, relied on the industry professionalism of information supplied by New Found. As the database was limited in size no discrepancies were noted to source data. As this was found to be the case, New Found has obviously undertaken taken significant internal QAQC while producing the data.
New Found personnel have handled the data with the utmost regards to accurate transfer of the verified data entry. The QP of the Queensway Technical Report has conducted a number of checks of the digital database against the primary assay certificate records and no errors were found. The QP of the Queensway Technical Report believes that the data is adequate to support drill planning and targeting and for use in the Technical Report.
5.10 Mineral Processing and Metallurgical Testing
New Found has no knowledge of any historical mineral processing/metallurgical testing of the Gold mineralization on the Queensway Project.
5.11 Mineral Resource and Mineral Reserve Estimates
There are no current mineral resources or mineral reserves on the Queensway Project.
5.12 Conclusions
The Queensway Project is mostly composed of rocks of the Davidsville group (Barry’s pond, Hunt’s Cove, and Outflow Formations), which is dominated by mudstone. However, some portions include siltstone and/or sandstone making up to 50% of the layering. Open to isoclinal, shallowly NE-plunging F1 folds are frequent but the overall sequence appears to be rather monoclinal. No regional scale fold has been identified to date. The D2 deformation has little to no impact on pre-existing structures. Gold mineralization is interpreted to be syn- to late-D1 deformation. On both lithological and structural perspectives, a good analog for the Queensway Project is the Bendigo-Castlemaine goldfields in Victoria, Australia. Mudstone, containing pyrite nodules locally, is a favourable source rock for sulphur and gold, provided that metamorphism was high enough at depth to lead to pyrite breakdown and fluid devolatilization that would enable gold mobilization and upward migration. Gold occurrences over the Queensway Project show there is good potential and both fault zones bounding the Davidsville group (i.e., the Dog Bay line and Gander River Complex line) can be considered as first-order structure, in the vicinity of which second-order structures could host gold mineralization.
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The historic exploration programs appear to have been generally well planned and carried out in a prudent and careful manner although many of the programs have not been carried through to fruition, due to issues such as funding or other projects taking precedence. Historic geochemical and geophysical surveys, trench channel sampling and mapping, and drill hole logging and sampling has been done by trained and professional personnel. Overall, to the extent known, there are no significant risks and uncertainties that could reasonably be expected to affect the reliability or confidence in the historic exploration information.
New Found exploration from 2016 to the present has been early stage exploration – compilation, prospecting, geochemistry, airborne geophysics, trenching and drilling. The Company has defined new gold showings such as the Glass and the area of highly anomalous gold in tills along the JBPDZ in the GGN area and has defined areas of anomalous gold in tills in the GGS area outside of the known gold showings. Targets generated through New Found exploration to date, including the 2019 drilling program, plus historical targets requiring further evaluation should be further explored including proposed trenching and diamond drilling by New Found.
Significant potential exists for the expansion of the known zones through diamond drilling both along strike and down dip of existing intercepts as well as other favourable geological targets such as the linear soil anomalies near to the AFZ. Very few drill holes have reached below 100m vertical depth and significant distances exist between the known mineralized zones with no drilling.
The GGS portion of the project contains similar geological environment to the GGN area of the project and combined present over 105 km of strike length potential to discover mineralized structures either along the AFZ or JPBFZ or similar structural controls.
5.13 Recommendations
The QP’s recommendation include continued exploration for both regional grass roots work in follow up of regional targets, any prospecting targets generated in the past 3 years and the gold in till anomalies located in the GGS area, plus more detailed exploration including both trenching and diamond drilling on, and in the vicinity of, known gold showings on both the AFZ and the JBPDZ.
The QP’s recommendations include a significant exploration program comprised primarily of till geochemistry, airborne geophysics, surface trenching and diamond drilling (the “Exploration Program”) (Figure 32). The drilling program is designed to meet two objectives: (1) drill test established, known targets, and (2) to drill test the JBPDZ and AFZ for areas of mineralization. The phase 1 drilling program includes an estimated 25,000 metres of diamond drilling. A total of $4,500,000 is estimated for the diamond drilling based on an all-in cost of $180/m which includes costs on coring, assaying, extra hourly charges, logistics, and supervision. These holes will be primarily drilled in the AFZ and JBPDZ areas, holes will be designed to test known gold mineralized zones as well as testing for new zones. Specifically drilling should target extensions of the mineralized zone intersected in New FoundC-19-01. Contingent on the result of the phase 1 drilling program, additional exploratory drilling and inferred resource definition drilling will occur in the phase 2 drilling program. The phase 2 drilling program is planned at 75,000 metres of diamond drilling and a total of $13,500,000 is estimated for the phase 2 drilling program at an all in cost of $180/m.
A trenching program is recommended for the GGN claims to re-expose the known surface gold occurrences along the AFZ and JBPDZ and follow their surface extensions.
A second phase of till sampling is also recommended to better refine the areas of anomalous gold concentrations found during the 2018 till sampling program (the “Till Sampling Program”). The Till Sampling Program would cover an additional 750 sites at an estimated cost of $750,000. Subsequent to the Till Sampling Program, additional trenching, mapping and diamond drilling is anticipated for the GGS area; this regional diamond drilling program should be roughly 2,000 metres at an all in cost of $180 per metre. The GGS trenching program consisting of trenching and diamond drilling will be contingent on a successful delineation of targets formed by the Till Sampling Program.
After the completion of the airborne gravity geophysical survey in March 2020, the Company is recommended to pursue advanced geophysical interpretation to identify the structural, lithological and alteration characteristics of the GGN area.
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If successful in outlining these characteristics, the author of the Queensway Technical Report recommends a second phase of airborne gravity to cover the licenses in the GSS area at total estimated program cost of $1,200,000.
After successful completion of the recommended work programs, adequate knowledge of the mineralization controls should be known allowing for more detailed and directed programs allowing for definition and delineation of a possible resource zone.
Unit | Year 1 | Year 2 | ||||||||||||||
Queensway Project | Costs | Q3-Q4- 2020 | Q1-Q4 -2021 | |||||||||||||
Till Sampling Program | ||||||||||||||||
Follow Up Till Sampling Program | $ | 750,000 | ||||||||||||||
Regional Prospecting/Geological Mapping | $ | 300,000 | $ | 300,000 | ||||||||||||
Geophysical Anomaly Investigation | $ | 50,000 | ||||||||||||||
GGN Gravity Geophysical Interpretation | $ | 200,000 | ||||||||||||||
GGS Gravity Survey | $ | 1,200,000 | ||||||||||||||
GGN Trenching Program | $ | 200,000 | ||||||||||||||
GGS Trenching Program | $ | 100,000 | $ | 225,000 | ||||||||||||
Drilling Program | ||||||||||||||||
Drill Hole Relogging | $ | 500/day | $ | 50,000 | - | |||||||||||
Diamond Drilling Phase 1(JBPDZ and AFZ) 25,000m | ||||||||||||||||
Core Drilling (HQ size) | $ | 110/m | $ | 2,750,000 | ||||||||||||
Assaying and Geochemistry | $ | 30/m | $ | 750,000 | ||||||||||||
Logging and Supervision | $ | 30/m | $ | 750,000 | ||||||||||||
Contingency | $ | 10/m | $ | 250,000 | ||||||||||||
Regional Drilling Program 2,000m | ||||||||||||||||
Core Drilling (HQ size) | $ | 110/m | $ | 220,000 | ||||||||||||
Assaying and Geochemistry | $ | 30/m | $ | 60,000 | ||||||||||||
Logging and Supervision | $ | 30/m | $ | 60,000 | ||||||||||||
Contingency | $ | 10/m | $ | 20,000 | ||||||||||||
Diamond Drilling Phase 2 (JBPDZ and AFZ) 75,000m | ||||||||||||||||
Core Drilling (HQ size) | $ | 110/m | $ | 8,250,000 | ||||||||||||
Assaying and Geochemistry | $ | 30/m | $ | 2,250,000 | ||||||||||||
Logging and Supervision | $ | 30/m | $ | 2,250,000 | ||||||||||||
Contingency | $ | 10/m | $ | 750,000 | ||||||||||||
Total: | $ | 6,150,000 | $ | 15,585,000 |
Figure 32 - Cost estimates for Recommended Exploration Program for the Queensway Project
f
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5.14 Development Activities Subsequent to the Effective Date of the Queensway Technical Report
5.14.1 Current Drill Campaign
On August 17, 2020, New Found announced that it had initiated a 100,000m HQ size diamond drilling program at the Queensway Project. Drilling started at the Little-Powerline trend and would progress through various targets within the QWN property including an initial 12,000m planned for the Keats Zone. New Found announced on January 6, 2021, that it has now increased the drilling program started in 2020 to a total of 200,000m and plan to continue this program through to 2022 with eight drill rigs. In 2020, New Found completed 66 drill holes targeting the Little-Powerline, Lotto, Dome and Keats zones for total of 13,400m.
Figure 33 - Queensway North – Plan Map of Initial 2020 Drilling Grid Lines/Zones
5.14.2 2020 Trenching Campaign
New Found began surface excavation of a number of targets starting in July 2020 and completed 16 trenches of varying size; all of the excavation to date has occurred along the Appleton Fault Zone and includes trenching of the Little Zone, Hornet Zone, Road Zone as well as the discovery of two new zones (Regular Zone and Zone 36). Zone 36 is located 2.5 Km north-west of the Keats Zone as shown in the above figure and has been exposed along 120m of strike length and shows mineralization of Arsenopyrite, Pyrite, Chalcopyrite, Boulangerite and Visible Gold.
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5.14.3 2020 Field Program
Starting in June 2020, New Found initiated a field recognisance program within the QWS mineral licenses. The objective of this program is to conduct geological mapping, structural analysis, prospecting and the collection of C horizon till samples to be processed for gold grain analysis.
Initial results from the 2020 field program detailed till survey were released on August 27, 2020 where New Found had announced that it had found a new fertile gold region 45 km south of the current Queensway North drill targets. The newly defined Eastern Pond target is comprised of two areas where recent till results have shown highly anomalous total gold grain counts including a high percentage of pristine gold grains, and yielded several sub-crop samples up to 15.0 g/t Au.
One till sample yielded 216 gold grains, 163 (75%) of them classified as pristine. A second cluster of samples yielded up to 155 gold grains with 127 (82%) of these classified as pristine. The pristine morphology of these grains indicates that they have not travelled far from their bedrock source.
To date the Eastern Pond target is defined by sub-crop and till sample results over an approximately 4 km of strike length (see Figures 34 and 35 below).
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Figure 34 - Queensway South Project: Location of the newly defined Eastern Pond Anomaly at Queensway South
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Figure 35 - Queensway South Project: Eastern Pond anomaly and preliminary till results
Sample ID | Easting | Northing | Total Gold Grains | Pristine Gold Grains | ||||||||||||
41674 | 629784 | 5382499 | 216 | 163 | ||||||||||||
41656 | 630332 | 5381175 | 155 | 127 |
Figure 36 - Queensway South Project: Eastern Pond target till samples
Field crews were remobilized to the Eastern Pond area in late 2020 to conduct follow up work including prospecting, geological mapping and the collection of additional till samples to further vector the Company’s exploration towards bedrock sources. Follow up work at Eastern Pond in late 2020 resulted in the collection of rock samples, additional tills samples and two trenches were excavated. Results of this work are pending at the date of this Registration Statement.
5.14.4 2020 Drill Campaign
New Found announced on August 17, 2020, that it had initiated a 100,000m diamond drilling program at the Queensway Gold Project. The drilling program is designed to test multiple exploration targets and zones along the 5 km of the Appleton Fault Zone and JBP Fault Zone.
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Drilling to date has focused along the Appleton Fault zone with four drilling rigs active at the project as of the date of this Registration Statement. Approximately 13,400m of drilling has been completed in 66 holes targeting the Little-Powerline, Dome, Road, Keats and Lotto zones.
Drilling gold assay highlights released to date include a new high-grade discovery at the Lotto Zone announced on October 2, 2020. Drill hole NFGC-20-17 intersected two separate near surface, intervals of intense quartz veining with significant sulfide and visible gold returning assays of 41.2 g/t Au over 4.75m starting at 35 metres down hole depth and 25.4 g/t Au over 5.15 metres starting at 57 metres down hole depth (see Figures 37 below). The orientation of these veins is uncertain and true widths may vary from 50% to 80%. On January 14, 2021, New Found announced the discovery of a new zone named the “Sunday Zone” proximal to the Lotto zone along the hanging wall of the Appleton Fault Zone. The new discovery represents the first known occurrence of gold mineralization along the primary Appleton Fault structure with an intercept in drill hole NFGC-20-44 grading 18.1g/t Au over 6.5m at a down hole depth of 239m, further to the released results on October 2, 2020, New Found received additional assay results from drill hole NFGC-20-17 at a depth of 29.8m included an interval of 16.3/g/t Au over 2.20m highlighting the potential for shallow gold mineralization at Lotto. The results of drill holes NFGC-20-17/44 are shown in the Figure 38 below. Drilling at the Lotto zone continued in 2020 and results of that work are pending at the time of this AIF.
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Figure 37 - Queensway Project – Plan Map of 2020 Drilling Program (Lotto/Sunday Zone – Jan 14, 2021)
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The location and assay intervals reported from NFGC-20-17 are shown in Figure 38:
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-20-44
|
238.55
242.10 |
245.05
245.05 |
6.5
2.95 |
18.1
38.7 |
Sunday | |||||||||||||
NFGC-20-17 | 29.80 | 32.0 | 2.20 | 16.3 | Lotto | |||||||||||||
NFGC-20-17
Including |
35.25
35.25 |
40.00
36.9 |
4.75
1.65 |
41.2
108.7 |
Lotto | |||||||||||||
NFGC-20-17
Including Including |
56.95
56.95 61.0 |
70.75
62.1 61.8 |
13.8
5.15 0.8 |
10.1
25.4 138.3 |
Lotto |
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-44 | 300 | -45 | 294 | 658956 | 5429030 | |||||||||||||||
NFGC-20-17 | 302 | -46 | 354 | 658931 | 5428990 |
Figure 38 - The location and assay intervals reported from NFGC-20-17
Along with drilling at the Lotto Zone, New Found have focused its drilling efforts at the Keats zone where a discovery hole in late 2019 (NFGC-19-01) was drilled. New Found planned to conduct an initial 12,000m of drilling at the Keats zone using two parallel exploration strategies. New Found plan to continue 10m step outs both along strike and dip of the discovery hole NFGC-19-01 and in parallel to these planned holes, New Found are also conducting a 50m grid drilling program along roughly 950m of strike length and to vertical depths of 500m to test the geology and gold potential of the controlling geological structure, the Keats-Baseline fault. Three drills are currently active at the Keats Zone and one drill is active at the Lotto zone.
Initial assay results from five drill holes at the Keats zones have been released with four holes released on Oct 27, 2020 which were drilled as the first 10m step-outs from drill hole NFGC-19-01 and one additional hole was released on Nov 16, 2020 as a 60m step-out along strike of drill hole NFGC-19-01. On December 15, 2020, New Found announced results of a further four additional 10m step-outs from drill hole NFGC-19-01 and two additional 25m and 50m stepouts along section line 4750N located 50m south of drill hole NFGC-19-01. Further on January 11, 2021, New Found released results from an additional four holes at Keats with two step outs from NFGC-19-01 with one hole 50m north on section line 4850N and one hole 50m south along section line 4750N. Combined this represents fifteen drill holes completed in 2020 with partial results received and released to date along over 100m of strike length within the Keats zone.
Gold assay results highlight from the first fifteen holes drilled at the Keats Zone are shown in the Figure 39 below.
Logging of the core drilled to date along with assay results received so far indicate that the veining and high-grade gold mineralization demonstrates good continuity along strike and down dip.
Further to the drilled 10m pattern around NFGC-19-01, New Found is actively drilling a roughly 50m grid pattern along the Keats-Baseline fault zone to better assess the broader geological and gold mineralization potential of the primary Keats zone.
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Hole No. | From (m) | To (m) |
Interval
(m) |
Au (g/t) | Zone | |||||||||||||
NFGC-20-18
Incl. |
92.0
98.9 |
99.9
99.9 |
7.9
1.0 |
24.1
167.6 |
Keats Main | |||||||||||||
NFGC-20-19
Incl. Incl. |
89.65
96.0 102.0 |
108.5
107.25 107.25 |
18.85
11.25 5.25 |
31.2
50.7 100.6 |
Keats Main | |||||||||||||
NFGC-20-19 | 151.0 | 152.9 | 1.90 | 4.4 | Keats FW | |||||||||||||
NFGC-20-21
Incl. |
101.65
109.55 |
120.0
118.5 |
18.35
8.95 |
15.8
29.4 |
Keats Main | |||||||||||||
NFGC-20-23
Incl. And Incl. |
82.65
93.65 93.65 101.8 118.85 |
124.0
108.2 94.0 104.4 123.4 |
41.35
14.55 0.35 2.60 4.55 |
22.3
57.4 1120 140.8 15.2 |
Keats Main | |||||||||||||
NFGC-20-26
Incl. Incl. |
44.7
67.0 73.5 |
73.85
73.85 73.85 |
29.15
6.85 0.35 |
11.8
44.5 824 |
Keats Main | |||||||||||||
NFGC-20-26 | 194.4 | 197.6 | 3.20 | 1.09 | Keats FW | |||||||||||||
NFGC-20-26 | 219.7 | 222.3 | 2.60 | 2.02 | Keats FW | |||||||||||||
NFGC-20-25 | 80 | 85.7 | 5.7 | 1.5 | Keats Main | |||||||||||||
NFGC-20-25
incl. |
99.8
101.65 |
101.95
101.95 |
2.15
0.3 |
7.31
25.8 |
Keats Main | |||||||||||||
NFGC-20-28 | 88.5 | 93 | 4.5 | 1.64 | Keats Main | |||||||||||||
NFGC-20-28
incl. |
106.95
109.4 |
111
110.4 |
4.05
1 |
40.1
119.8 |
Keats Main | |||||||||||||
NFGC-20-29
incl. |
104
113.65 |
120.85
117.55 |
16.85
3.9 |
25
103.2 |
Keats Main | |||||||||||||
NFGC-20-30
incl. incl. |
97.4
119.65 120.25 |
129.4
125.75 122.25 |
32
6.1 2 |
2.59
10.3 26.1 |
Keats Main | |||||||||||||
NFGC-20-32
incl. incl. |
103
118.9 119.9 |
132
132 125.35 |
29
13.1 5.45 |
20.8
45.3 82.7 |
Keats Main | |||||||||||||
NFGC-20-34
incl. |
109.4
120.1 |
152.6
122.45 |
43.2
2.35 |
2.39
29.3 |
Keats Main | |||||||||||||
NFGC-20-33
And |
151.9
164.4 |
156
172.2 |
4.0
7.8 |
2.59
1.78 |
Keats Main | |||||||||||||
NFGC-20-36
And Incl. And |
75.4
88.8 96.4 117.7 |
77.4
107.7 105.3 123.8 |
2.0
18.9 8.9 6.1 |
7.22
3.29 5.15 1.11 |
Keats Main | |||||||||||||
NFGC-20-41
Incl. And And Incl. |
11.7
13 32 45 49.3 |
22.1
16.7 35.5 60.9 55.6 |
10.4
3.7 3.5 15.9 6.3 |
22.5
58.9 1.36 31.4 67.7 |
Keats Main | |||||||||||||
NFGC-20-43
And Incl. And |
109.7
119.8 122.3 145.6 |
114
138 130 147.8 |
4.3
18.2 7.7 2.2 |
1.54
10.0 20.7 1.29 |
Keats Main |
Figure 39 - Gold assay results highlight from the first fifteen holes drilled at the Keats Zone
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The orientation of the veining is uncertain and true widths are estimated to be in the 70% to 80% range
A coordinate table and plan map and for Keats drill holes announced as of the date of this AIF are shown in Figures 40 and 41, respectively, below:
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-18 | 300 | -45 | 278 | 658223 | 5427467 | |||||||||||||||
NFGC-20-19 | 300 | -45 | 154 | 658232 | 5427462 | |||||||||||||||
NFGC-20-21 | 300 | -45 | 190 | 658236 | 5427449 | |||||||||||||||
NFGC-20-23 | 300 | -45 | 185 | 658240 | 5427458 | |||||||||||||||
NFGC-20-26 | 300 | -45 | 269 | 658151 | 5427444 | |||||||||||||||
NFGC-20-25 | 300 | -45 | 147 | 658217 | 5427459 | |||||||||||||||
NFGC-20-28 | 300 | -45 | 150 | 658213 | 5427450 | |||||||||||||||
NFGC-20-29 | 300 | -45 | 186 | 658222 | 5427445 | |||||||||||||||
NFGC-20-30 | 300 | -45 | 167 | 658195 | 5427419 | |||||||||||||||
NFGC-20-32 | 300 | -45 | 269 | 658151 | 5427444 | |||||||||||||||
NFGC-20-34 | 300 | -45 | 213 | 658258 | 5427440 | |||||||||||||||
NFGC-20-33 | 300 | -45 | 297 | 658238 | 5427394 | |||||||||||||||
NFGC-20-36 | 300 | -45 | 150 | 658245 | 5427466 | |||||||||||||||
NFGC-20-41 | 300 | -45 | 195 | 658232 | 5427514 | |||||||||||||||
NFGC-20-43 | 300 | -45 | 182 | 658239 | 5427435 |
Figure 40 – Coordinate Table for Keats drill holes
84
Figure 41 - Queensway Project – Plan Map of 2020 Drilling Program (Keats Zone -Jan 11, 2021)
85
On February 11, 2021, New Found released the results of assay results from drilling at the Keats Zone.
· Highlights from these results are summarized if Figure 42 below.
Keats Zone Summary Results | ||||||||||||||||
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | ||||||||||||
NFGC-20-37 | 9.0 | 19.3 | 10.3 | 25.0 | ||||||||||||
NFGC-20-38 | 105.8 | 111.6 | 5.8 | 19.8 | ||||||||||||
NFGC-20-40A | 107.4 | 114.7 | 7.3 | 19.3 | ||||||||||||
NFGC-20-45 | 46.6 | 60.4 | 13.8 | 28.4 | ||||||||||||
and | 68.0 | 71.3 | 3.3 | 20.6 | ||||||||||||
and | 83.3 | 85.3 | 2.0 | 17.1 | ||||||||||||
NFGC-20-46 | 112.7 | 115.6 | 2.9 | 13.7 | ||||||||||||
NFGC-20-56 | 25.6 | 57.9 | 32.3 | 6.18 | ||||||||||||
Including | 25.6 | 31.0 | 5.4 | 15.7 |
Figure 42 – Highlights of Keats Zone assay results
Note that the exact orientation of the veins is uncertain but believed to be steeply dipping thus implying true widths of the highgrade zone to be in the 70% to 80% range of reported drill lengths. At Keats while mineralization remains open in all directions, New Found observed a clear trend in the highest grade material forming a zone with a shallow plunge to the south along the Keats Baseline Fault.
High-grade assay intervals received to date at Keats have correlated directly with the observation of significant visible gold in drill core. The Company is utilizing the observation of visible gold in drill core as the primary method to guide step-out drilling at Queensway.
Assay results received from drilling to date have outlined an approximate 115m strike length of a thick, high-grade zone of gold mineralization at Keats. Logging and interpretation of drill core in step out holes to the north and south of this 115m interval have expanded the potential continuation of this zone to at least 260m of strike. This target zone remains open in both directions along strike and to depth.
To the north the high-grade zone daylights at rock surface (under approximately 10m of glacial till), where broad intervals of near-surface high grade gold have previously been reported. Hole NFGC-20-41 for example was drilled in this area and returned two near surface intervals: 22.5 g/t Au over 10.4m and 31.4 g/t Au over 15.9m, with the first interval starting at 11.7m down hole (see above).
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Keats Drill Hole Interval Details
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-20-37 | 9.0 | 19.3 | 10.3 | 25.0 | ||||||||||||||
And | 22.7 | 28.6 | 5.9 | 5.18 | ||||||||||||||
And | 32.8 | 40.7 | 7.9 | 2.82 | Keats Main | |||||||||||||
And | 43.8 | 45.8 | 2.0 | 13.2 | ||||||||||||||
And | 151.6 | 153.6 | 2.0 | 1.21 | Keats FW | |||||||||||||
NFGC-20-38 | 90.0 | 94.8 | 4.8 | 0.97 | ||||||||||||||
And | 101.5 | 103.8 | 2.3 | 1.13 | Keats Main | |||||||||||||
And | 105.8 | 133.2 | 27.4 | 5.64 | ||||||||||||||
Including | 105.8 | 111.6 | 5.8 | 19.8 | ||||||||||||||
And | 159.4 | 161.7 | 2.3 | 1.33 | Keats FW | |||||||||||||
NFGC-20-40A | 93.4 | 95.7 | 2.3 | 1.91 | ||||||||||||||
And | 107.4 | 114.7 | 7.3 | 19.3 | ||||||||||||||
And | 120.5 | 123.4 | 2.9 | 1.73 | Keats Main | |||||||||||||
And | 129.9 | 132.2 | 2.3 | 5.03 | ||||||||||||||
And | 144.5 | 146.8 | 2.3 | 3.75 | ||||||||||||||
And | 171.9 | 174.0 | 2.1 | 1.09 | Keats FW | |||||||||||||
NFGC-20-45 | 22.5 | 25.0 | 2.5 | 2.1 | Keats HW | |||||||||||||
And | 46.6 | 60.4 | 13.8 | 28.4 | ||||||||||||||
And | 68.0 | 71.3 | 3.3 | 20.6 | Keats Main | |||||||||||||
And | 83.3 | 85.3 | 2.0 | 17.1 | ||||||||||||||
NFGC-20-46 | 92.8 | 95.0 | 2.2 | 7.32 | ||||||||||||||
And | 112.7 | 115.6 | 2.9 | 13.7 | ||||||||||||||
Including | 114.0 | 114.5 | 0.5 | 59.8 | Keats Main | |||||||||||||
And | 133.5 | 135.5 | 2.0 | 5.23 | ||||||||||||||
NFGC-20-49 | NSV | |||||||||||||||||
NFGC-20-53 | 20.6 | 23.4 | 2.8 | 1.07 | ||||||||||||||
And | 32.6 | 35.0 | 2.4 | 2.20 | ||||||||||||||
And | 53.4 | 55.9 | 2.5 | 2.59 | ||||||||||||||
And | 58.6 | 62.0 | 3.4 | 3.24 | Keats Main | |||||||||||||
And | 70.0 | 74.3 | 4.3 | 1.83 | ||||||||||||||
And | 75.8 | 78.1 | 2.3 | 3.64 | ||||||||||||||
And | 90.0 | 92.4 | 2.4 | 4.72 | ||||||||||||||
NFGC-20-54 | 69.5 | 80.5 | 11.0 | 1.98 | ||||||||||||||
Including | 69.5 | 70.5 | 1.0 | 6.68 | ||||||||||||||
And | 85.4 | 94.1 | 8.7 | 2.02 | Keats Main | |||||||||||||
Including | 85.4 | 85.9 | 0.5 | 18.9 | ||||||||||||||
NFGC-20-56 | 25.6 | 57.9 | 32.3 | 6.18 | ||||||||||||||
Including | 25.6 | 31.0 | 5.4 | 15.7 | Keats Main | |||||||||||||
And | 62.3 | 68.7 | 6.4 | 3.52 | ||||||||||||||
Including | 66.0 | 68.3 | 2.3 | 6.69 |
Hole No. |
Azimuth
(°) |
Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-37 | 300 | -45 | 344 | 658224 | 5427518 | |||||||||||||||
NFGC-20-38 | 300 | -45 | 176 | 658254 | 5427461 | |||||||||||||||
NFGC-20-40A | 300 | -45 | 204 | 658249 | 5427453 | |||||||||||||||
NFGC-20-45 | 300 | -45 | 164 | 658240 | 5427509 | |||||||||||||||
NFGC-20-46 | 300 | -45 | 169 | 658267 | 5427493 | |||||||||||||||
NFGC-20-49 | 300 | -45 | 234 | 658309 | 5427468 | |||||||||||||||
NFGC-20-53 | 300 | -45 | 188 | 658254 | 5427513 | |||||||||||||||
NFGC-20-54 | 300 | -45 | 198 | 658160 | 5427439 | |||||||||||||||
NFGC-20-56 | 300 | -45 | 118 | 658226 | 5427505 |
Figure 43. Reported and pending holes at Keats Zone.
87
Note that the exact orientation of the veins is uncertain but believed to be steeply dipping thus implying true widths of the high-grade zone to be in the 70% to 80% range of reported drill lengths.
On February 23, 2021, New Found released results from received assay results from drilling at the Lotto Zone.
· Highlights from these results are summarized below:
Table 1: Lotto summary results
Hole No. | From (m) | To (m) |
Interval
(m)* |
Au (g/t) | ||||||||||||
NFGC-20-20 | 100.3 | 103.3 | 3.00 | 5.31 | ||||||||||||
NFGC-20-27 | 222.9 | 224.9 | 2.00 | 31.3 | ||||||||||||
NFGC-20-50 | 43.7 | 45.8 | 2.10 | 65.3 | ||||||||||||
NFGC-21-100 | 118.0 | 120.5 | 2.45 | 224.7 | ||||||||||||
Previously Reported | ||||||||||||||||
NFGC-20-17 | 35.3 | 40.0 | 4.75 | 41.2 | ||||||||||||
And | 57.0 | 62.1 | 5.15 | 25.4 |
* Note that the true width of the mineralization is uncertain, but host structures are interpreted to be steeply dipping implying true widths in the range of 70% of reported intercepts. Intervals are calculated at a 1 g/t Au cut-off grade and minimum width of 2m, grades have not been capped in the averaging, maximum dilution allowed is 2m.
The intercept in NFGC-21-100 included over 250 disseminated flakes of visible gold and fine fracture coatings, with similar mineralogy to other high-grade drill intervals along the Appleton Fault.
High-grade intercepts to date at Lotto are interpreted to primarily occur in a network of secondary, generally north south striking, structures. Veining on some of these structures is interpreted as continuous over up to at least 300m of strike and open.
Thickening and higher grades appear to correlate to fault splays and the intersection of subvertical structures. The high-grade intervals in Holes 17, 50, and 100 are interpreted to occur over such a vertically oriented zone. Drilling at Lotto will continue to step-out to depth on identified zones, and will also test for additional high-grade zones focused on projected structural intersections and fault splays.
Drilling is also targeting the Lotto Baseline Fault for gold mineralization similar to that being drilled in the Keats Baseline Fault. Keats also exhibits a series of mineralized secondary structures surrounding the broader Keats Baseline Zone mineralization. Drill definition of high grade gold in secondary structures at Lotto will be utilized to vector to targets in the Lotto Baseline Fault itself.
88
To the north the high-grade zone daylights at rock surface (under approximately 10m of glacial till), where broad intervals of near-surface high grade gold have previously been reported. Hole NFGC-20-41 for example was drilled in this area and returned two near surface intervals: 22.5 g/t Au over 10.4m and 31.4 g/t Au over 15.9m, with the first interval starting at 11.7m down hole.
Figure 44 - Lotto Zone location and other target areas along the Appleton Fault Zone
89
Figure 45. Interpreted faults, veining and assay results at Lotto
90
Drill Hole Details
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||||
NFGC-20-20 | 100.25 | 103.25 | 3.00 | 5.3 | Lotto | |||||||||||||||
Including | 100.60 | 101.30 | 0.70 | 15.6 | Lotto | |||||||||||||||
NFGC-20-22 | 91.50 | 99.90 | 8.40 | 1.3 | Lotto | |||||||||||||||
NFGC-20-24 | 35.00 | 37.00 | 2.00 | 2.0 | Lotto | |||||||||||||||
42.30 | 45.40 | 3.10 | 1.3 | Lotto | ||||||||||||||||
138.10 | 140.30 | 2.20 | 1.2 | Lotto | ||||||||||||||||
NFGC-20-27 | 156.00 | 158.10 | 2.10 | 1.7 | Lotto | |||||||||||||||
222.90 | 224.90 | 2.00 | 31.3 | Lotto | ||||||||||||||||
NFGC-20-31 | 45.70 | 52.00 | 6.30 | 1.0 | Lotto | |||||||||||||||
NFGC-20-35 | NSV | Lotto | ||||||||||||||||||
NFGC-20-39 | NSV | Lotto | ||||||||||||||||||
NFGC-20-42 | 40.50 | 42.80 | 2.30 | 1.2 | Lotto | |||||||||||||||
108.00 | 112.55 | 4.55 | 1.4 | Lotto | ||||||||||||||||
NFGC-20-44 | 70.15 | 72.15 | 2.00 | 2.1 | Lotto | |||||||||||||||
**238.55 | 245.05 | 6.50 | 18.1 | Lotto | ||||||||||||||||
NFGC-20-47 | 15.25 | 18.00 | 2.75 | 1.4 | Lotto | |||||||||||||||
29.35 | 31.35 | 2.00 | 1.1 | Lotto | ||||||||||||||||
34.45 | 37.60 | 3.15 | 2.5 | Lotto | ||||||||||||||||
42.00 | 45.10 | 3.10 | 1.1 | Lotto | ||||||||||||||||
NFGC-20-50 | 43.65 | 45.75 | 2.10 | 65.3 | Lotto | |||||||||||||||
NFGC-20-100 | 118.00 | 120.45 | 2.45 | 224.7 | Lotto |
* Note that the true width of the mineralization is uncertain, but host structures are interpreted to be steeply dipping implying true widths in the range of 70% of reported intercepts. Intervals are calculated at a 1 g/t Au cut-off grade and minimum width of 2m, grades have not been capped in the averaging, maximum dilution allowed is 2m.
** Interval previously released on January 14, 2021.
Figure 46. Summary of results
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||
NFGC-20-17 | 302 | -46 | 354 | 658 931 | 5 428 990 | |||||||||||
NFGC-20-20 | 300 | -45 | 190 | 658 973 | 5 428 962 | |||||||||||
NFGC-20-22 | 300 | -45 | 214 | 658 963 | 5 428 996 | |||||||||||
NFGC-20-24 | 300 | -45 | 258 | 658 936 | 5 428 954 | |||||||||||
NFGC-20-27 | 300 | -45 | 465 | 658 946 | 5 428 920 | |||||||||||
NFGC-20-31 | 300 | -45 | 258 | 658 878 | 5 428 902 | |||||||||||
NFGC-20-35 | 300 | -45 | 240 | 658 921 | 5 428 876 | |||||||||||
NFGC-20-39 | 300 | -45 | 164 | 658 885 | 5 429 156 | |||||||||||
NFGC-20-42 | 300 | -45 | 177 | 658 933 | 5 429 100 | |||||||||||
NFGC-20-44 | 300 | -45 | 294 | 658 956 | 5 429 030 | |||||||||||
NFGC-20-47 | 300 | -45 | 98 | 658 922 | 5 428 995 | |||||||||||
NFGC-20-50 | 300 | -45 | 92 | 658 927 | 5 428 981 | |||||||||||
NFGC-21-100 | 300 | -45 | 258 | 658 979 | 5 428 930 |
Figure 47. Details of drill holes.
91
Sampling, Sub-sampling and Laboratory
True width of the mineralization is uncertain, but host structures are interpreted to be steeply dipping implying true widths in the range of 70% of reported intercepts. Selected intervals were submitted on a rush basis including the reported interval for NFGC-21-100. Additional assays for these holes will be reported once received. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cutoff of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
6 OTHER MINERAL PROJECTS
The Company owns a 100% interest in the Lucky Strike Project in Kirkland Lake, Ontario, comprising 11,441 hectares, as well as a portfolio of mining and royalty interests throughout northeastern Ontario. The Company acquired the rights to the Lucky Strike Project by map staking mineral licenses and making staged payments in cash and Common Shares from 2016 through 2019 under two fully-executed option agreements.
On May 27, 2016, the Company optioned the primary Lucky Strike Project property from Ashley Gold Mines Ltd. (“Ashley Gold”) under a property option agreement, which was ultimately amended in May 2019, and fully exercised in November 2019. Under the terms of this agreement, the Company paid $115,000 and issued Common Shares equivalent to $80,000 to Ashley Gold. The option agreement included an underlying 1% NSR payable to Wallbridge Mining Company, which covers a small portion of the applicable claims, with most of the claims carrying no NSR.
On July 26, 2017, the Company optioned the Vallillee extension claims west of the primary Lucky Strike Project and this option agreement was fully executed July 2018. Under the terms of the agreement the Company paid $40,000 and issued a 2% NSR in favour of the optionors.
In April 2020, the Company staked an additional 70 unpatented mining cells on the west side of the Lucky Strike Project. These lands carry no NSR.
On May 7, 2020, the Company completed a claim purchase agreement with Eric Marion to purchase 21 unpatented mining claim cells adjacent to the east of the Lucky Strike Project. Under the terms of the agreement the Company paid $25,000. The claims carry no NSR.
For the purpose of NI 43-101, the Lucky Strike Project is not a material property of the Company.
92
7 DIVIDENDS AND DISTRIBUTIONS
7.1 Summary
The Company has not, since the date of its incorporation, declared or paid any dividends or other distributions on its Common Shares, and does not currently have a policy with respect to the payment of dividends or other distributions. The Company does not currently pay dividends and does not intend to pay dividends in the foreseeable future. The declaration and payment of any dividends in the future is at the discretion of the Board and will depend on numerous factors, including compliance with applicable laws, financial performance, working capital requirements of the Company and its subsidiaries and such other factors as its directors consider appropriate. There can be no assurance that the Company will pay dividends under any circumstances. See “Risk Factors – Risks Related to the Company – Dividends”.
8 DESCRIPTION OF CAPITAL STRUCTURE
8.1 Common Shares
The Company’s authorized share capital consists of an unlimited number of common shares without par value (the “Common Shares”). As at December 31, 2019, there were 78,924,249 Common Shares issued and outstanding. As of the date of this AIF, there are 149,064,285 Common Shares issued and outstanding.
All of the Common Shares rank equally as to voting rights, participation in a distribution of the assets of the Company on a liquidation, dissolution or winding-up of the Company and entitlement to any dividends declared by the Company. The holders of the Common Shares are entitled to receive notice of, and to attend and vote at, all meetings of shareholders (other than meetings at which only holders of another class or series of shares are entitled to vote). Each Common Share carries the right to one vote. In the event of the liquidation, dissolution or winding-up of the Company, or any other distribution of the assets of the Company among its shareholders for the purpose of winding-up its affairs, the holders of the Common Shares will be entitled to receive, on a pro rata basis, all of the assets remaining after the payment by the Company of all of its liabilities. The holders of Common Shares are entitled to receive dividends as and when declared by the Board in respect of the Common Shares on a pro rata basis. The Common Shares do not have pre-emptive rights, conversion rights or exchange rights and are not subject to redemption, retraction purchase for cancellation or surrender provisions. There are no sinking or purchase fund provisions, no provisions permitting or restricting the issuance of additional securities or any other material restrictions, and there are no provisions which are capable of requiring a security holder to contribute additional capital.
Any alteration of the rights, privileges, restrictions and conditions attaching to the Common Shares under the Company’s Articles must be approved by at least two-thirds of the Common Shares voted at a meeting of the Company’s shareholders.
8.2 Options
New Found has a stock option plan (the “Plan”) pursuant to which the Board of Directors may grant stock options (the “Options”) to any director, senior officer, management company, employee or consultant of the Company (including any subsidiary of the Company), as the Board of Directors may determine, exercisable for of up to a maximum of 10% of the issued and outstanding Common Shares at the time of grant. Every Option granted has a term not exceeding 10 years after the date of grant.
As of the date of his AIF, New Found had the following Options outstanding:
Common | Exercise Price | |||||||||||||
Shares Under | (C$ per | |||||||||||||
Options | Common | Vesting | ||||||||||||
Holder of Options | Granted | Share) | Grant Date | Conditions | Expiry Date | |||||||||
Executive and other officers of | 250,000 | $ | 0.40 | October 1, 2018 | Fully vested | September 30, 2023 | ||||||||
New Found, as a group (1) | 1,725,000 | $ | 0.50 | December 17, 2019 | Fully vested | December 17, 2024 | ||||||||
1,200,000 | $ | 1.00 | April 15, 2020 | Fully vested | April 15, 2025 | |||||||||
200,000 | $ | 1.075 | May 23, 2020 | Fully vested | May 23, 2025 |
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Common | Exercise Price | |||||||||||||
Shares Under | (C$ per | |||||||||||||
Options | Common | Vesting | ||||||||||||
Holder of Options | Granted | Share) | Grant Date | Conditions | Expiry Date | |||||||||
2,375,000 | $ | 1.40 | August 11, 2020 | Fully vested | August 11, 2025 | |||||||||
5,080,000 | $ | 4.10 | December 31, 2020 | Fully vested | December 31, 2025 | |||||||||
Total | 10,830,000 | |||||||||||||
Directors (who are not also executive officers) of New Found, as a group (2) | 650,000 | $ | 0.50 | December 17, 2019 | Fully vested | December 17, 2024 | ||||||||
50,000 | $ | 1.00 | April 15, 2020 | Fully vested | April 15, 2025 | |||||||||
25,000 | $ | 1.075 | May 23, 2020 | Fully vested | May 23, 2025 | |||||||||
250,000 | $ | 1.40 | August 11, 2020 | Fully vested | August 11, 2025 | |||||||||
200,000 | $ | 4.10 | December 31, 2020 | Fully vested | December 31, 2025 | |||||||||
Total | 1,175,000 | |||||||||||||
Consultants of New Found, as a group | 75,000 | $ | 0.15 | January 31, 2017 | Fully vested | February 20, 2022 | ||||||||
210,000 | $ | 0.50 | December 17, 2019 | Fully vested | December 17, 2024 | |||||||||
250,000 | $ | 1.00 | April 15, 2020 | Fully vested | April 15, 2025 | |||||||||
340,000 | $ | 1.40 | August 11, 2020 | Fully vested | August 11, 2025 | |||||||||
115,000 | $ | 2.07 | September 3, 2020 | Fully vested | September 3, 2025 | |||||||||
25,000 | $ | 2.15 | October 1, 2020 | Fully vested | October 1, 2025 | |||||||||
962,500 | $ | 4.10 | December 31, 2020 | Fully vested | December 31, 2025 | |||||||||
Total | 1,977,500 | |||||||||||||
Any other person or company,other than the Agent | 100,000 | $ | 2.07 | September 3, 2020 | Fully vested | September 3, 2025 | ||||||||
TOTAL OPTIONS | 14,082,500 |
Notes:
(1) | Total of four persons, being Collin Kettell the Executive Chairman, Greg Matheson the Chief Operating Officer, Craig Roberts the Chief Executive Officer and Denis Laviolette the President. |
(2) | Total of two persons, being John Anderson and Quinton Hennigh. |
8.3 Warrants
As of the date of this AIF, there were there were 653,578 common share purchase warrants outstanding, comprised of: (i) 4,107 Finder Warrants entitling the holder thereof to acquire one common share at price of $1.30 per common share until June 10, 2022; (ii) 25,845 Finder Warrants entitling the holder thereof to acquire one common share at a price of $1.50 per common share until June 4, 2022; (iii) 36,052 Finder Warrants entitling the holder thereof to acquire one common share at a price of $1.50 per common share until May 13, 2022; (iv) 35,667 Finder Warrants entitling the holder thereof to acquire one common share at a price of $1.30 per common share, until May 12, 2022; (v) 476,307 Broker Warrants entitling the holder thereof to acquire one common share at a price of $1.30 per common share until August 11, 2021; and (vi) 75,600 Broker Warrants entitling the holder thereof to acquire one common share at a price of $1.30 per common share until August 13, 2021.
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The following table sets forth the aggregate number of warrants, outstanding as at the date of this AIF:
Exercise Price | ||||||||||||||
(C$ per | Market Value of | |||||||||||||
Number of | Common | Common Shares | ||||||||||||
Holder of Warrants | Warrants Held | Share) | Issue Date | Under Warrants(1) | Expiry Date | |||||||||
Executive and other officers of New Found, as a group | Nil. | N/A | N/A | N/A | N/A | |||||||||
Directors (who are not also executive officers) of New Found, as a group | Nil. | N/A | N/A | N/A | N/A | |||||||||
Consultants of New Found, as a group | Nil. | N/A | N/A | N/A | N/A | |||||||||
Any other person or company, other than the Agents | 4,107 | (2) | $ | 1.30 | June 10, 2020 | N/A | June 10, 2022 | |||||||
25,845 | (3) | $ | 1.50 | June 4, 2020 | N/A | June 4, 2022 | ||||||||
36,052 | (4) | $ | 1.50 | May 13, 2020 | N/A | May 13, 2022 | ||||||||
35,667 | (5) | $ | 1.30 | May 12, 2020 | N/A | May 12, 2022 | ||||||||
476,307 | (6) | $ | 1.30 | August 11, 2020 | N/A | August 11, 2021 | ||||||||
75,600 | (7) | $ | 1.30 | August 13, 2020 | N/A | August 13,2021 | ||||||||
TOTAL | 653,578 |
Notes:
(1) | Market value of the Common Shares under warrants are not reasonably ascertainable on the grant date or another date given that the Common Shares are not and have never been publicly traded or listed. |
(2) | Finder Warrants issued in connection with 2020 Flow-Through Private Placements. |
(3) | Finder Warrants issued in connection with 2020 Flow-Through Private Placements. |
(4) | Finder Warrants issued in connection with 2020 Flow-Through Private Placements. |
(5) | Finder Warrants issued in connection with 2020 Flow-Through Private Placements. |
(6) | Broker Warrants issued in connection with Company’s Initial Public Offering. |
(7) | Broker Warrants issued in connection with Company’s Initial Public Offering. |
9 MARKET FOR SECURITIES
9.1 Trading Price and Volume
As of the fiscal year ended December 31, 2019, no securities of New Found were traded or quoted on any marketplace.
New Found’s Common Shares are currently listed for trading through the facilities of the TSX Venture Exchange under the symbol “NFG” and on the OTC under the symbol “NFGFF”. No other securities of New Found are traded or quoted on any marketplace.
During the period from August 11, 2020 until the date of this AIF, the Common Shares traded on the TSX Venture Exchange as follows based on information available from Bloomberg:
TSX VENTURE EXCHANGE | ||||||||||||
Month | Volume | High (Cnd$) | Low (Cnd$) | |||||||||
August 2020 | 18,520,969 | 2.01 | 1.24 | |||||||||
September 2020 | 9,288,028 | 2.56 | 1.85 | |||||||||
October 2020 | 13,142,070 | 4.50 | 2.15 | |||||||||
November 2020 | 6,905,260 | 4.90 | 3.60 | |||||||||
December 2020 | 10,831,311 | 4.74 | 3.52 | |||||||||
January 2021 | 4,453,432 | 4.40 | 3.16 | |||||||||
February 1 to 17, 2021 | 2,524,214 | 3.60 | 3.21 |
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OTC | ||||||||||||
Month | Volume | High (Cnd$) | Low (Cnd$) | |||||||||
September 2020 | 1,230,256 | 2.51 | 1.87 | |||||||||
October 2020 | 4,485,669 | 5.00 | 2.19 | |||||||||
November 2020 | 2,467,114 | 5.17 | 3.61 | |||||||||
December 2020 | 1,540,241 | 4.72 | 3.52 | |||||||||
January 2021 | 1,602,246 | 4.44 | 3.18 | |||||||||
February 1 to 17, 2021 | 1,216,254 | 3.81 | 3.20 |
9.2 Prior Sales
The following table summarizes the issuances of Common Shares and securities that are convertible or exchangeable into Common Shares in the 12 months prior to the date of this AIF:
Issue Date | Type of Security |
Number
Issued |
Issue Price | Exercise Price | Description of Issuance | |||||||||||
January 11, 2021 | Common Shares | 275,954 | $ | 1.30 | N/A | Issued pursuant to the exercise of 2020 Warrants | ||||||||||
January 6, 2021 | Common Shares | 3,808 | $ | 1.30 | N/A | Issued pursuant to the exercise of 2020 Warrants | ||||||||||
January 6, 2021 | Common Shares | 100,000 | $ | 0.50 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
December 31, 2020 | Options | 6,242,500 | N/A | $ | 4.10 | Options issued pursuant to the Stock Option Plan | ||||||||||
December 31, 2020 | Common Shares | 2,075,000 | $ | 1.40 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
December 31, 2020 | Common Shares | 1,395,000 | $ | 1.075 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
December 31, 2020 | Common Shares | 100,000 | $ | 1.00 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
December 31, 2020 | Common Shares | 1,135,000 | $ | 0.50 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
December 23, 2020 | Common Shares | 700,000 | $ | 1.00 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
December 16, 2020 | Common Shares | 100,000 | $ | 0.15 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
November 12, 2020 | Common Shares | 75,000 | $ | 0.15 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
November 2, 2020 | Common Shares | 2,385 | $ | 1.50 | N/A | Issued pursuant to the exercise of 2020 Warrants | ||||||||||
October 27, 2020 | Common Shares | 450,000 | $ | 0.50 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
October 13, 2020 | Common Shares | 50,000 | $ | 1.075 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
October 6, 2020 | Common Shares | 551,907 | $ | 1.30 | N/A | Issued pursuant to the exercise of 2020 Warrants | ||||||||||
October 1, 2020 | Options | 25,000 | N/A | $ | 2.15 | Options issued pursuant to the Stock Option Plan |
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Issue Date | Type of Security |
Number
Issued |
Issue Price | Exercise Price | Description of Issuance | |||||||||||
September 3, 2020 | Options | 215,000 | N/A | $ | 2.07 | Options issued pursuant to the Stock Option Plan | ||||||||||
August 27, 2020 | Common Shares | 50,000 | $ | 0.40 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
August 14, 2020 | Common Shares | 50,000 | $ | 0.40 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
August 13, 2020 | Broker Warrants | 188,999 | N/A | $ | 1.30 | Issued to the Agents’ in connection with the exercise of the over-allotment option grants to the Agents pursuant to the Company’s initial public offing. | ||||||||||
August 13, 2020 | Common Shares | 3,150,000 | $ | 1.30 | N/A | Issued pursuant to the exercise of the Agents’ overallotment option granted pursuant to the Company’s initial public offering. | ||||||||||
August 12, 2020 | Common Shares | 4,000,000 | $ | 0.75 | N/A | Issued pursuant to the exercise of 2019 Warrants | ||||||||||
August 11, 2020 | Options | 5,040,000 | N/A | $ | 1.40 | Options issued pursuant to the Stock Option Plan | ||||||||||
August 11, 2020 | Broker Warrants | 1,190,769 | N/A | $ | 1.30 | Issued to the Agents in connection with the Company’s initial public offering | ||||||||||
August 11, 2020 | Common Shares | 21,000,000 | $ | 1.30 | N/A | Issued pursuant the Company’s initial public offering | ||||||||||
July 21, 2020 | Common Shares | 12,000,000 | $ | 0.75 | N/A | Issued pursuant to the exercise of 2019 Warrants | ||||||||||
July 17, 2020 | Common Shares | 100,000 | $ | 0.15 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
June 30, 2020 | Common Shares | 1,000,000 | $ | 0.15 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
June 10, 2020 | Finder Warrant | 4,107 | N/A | $ | 1.30 | Finder Warrants issued to certain finders in connection with 2020 Flow-Through Private Placements | ||||||||||
June 10, 2020 | Common Shares | 68,462 | $ | 1.30 | N/A | Issued pursuant to 2020 Flow-Through Private Placements | ||||||||||
June 4, 2020 | Finder Warrant | 28,230 | N/A | $ | 1.50 | Finder Warrants issued to certain finders in connection with 2020 Flow-Through Private Placements | ||||||||||
June 4, 2020 | Common Shares | 1,227,753 | $ | 1.50 | N/A | Issued pursuant to 2020 Flow-Through Private Placements | ||||||||||
May 23, 2020 | Options | 1,670,000 | N/A | $ | 1.075 | Options issued pursuant to the Stock Option Plan | ||||||||||
May 22, 2020 | Common Shares | 85,000 | $ | 0.50 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
May 19, 2020 | Common Shares | 250,000 | $ | 0.50 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
May 14, 2020 | Common Shares | 580,000 | $ | 0.15 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan |
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Issue Date | Type of Security |
Number
Issued |
Issue Price | Exercise Price | Description of Issuance | |||||||||||
May 13, 2020 | Finder Warrant | 36,052 | N/A | $ | 1.50 | Finder Warrants issued to certain finders in connection with 2020 Flow-Through Private Placements | ||||||||||
May 13, 2020 | Common Shares | 2,766,844 | $ | 1.50 | N/A | Issued pursuant to first tranche of 2020 Flow-Through Private Placements | ||||||||||
May 12, 2020 | Finder Warrant | 39,475 | N/A | $ | 1.30 | Finder Warrants issued to certain finders pursuant to 2020 Flow-Through Private Placements | ||||||||||
May 12, 2020 | Common Shares | 797,923 | $ | 1.30 | N/A | Issued pursuant to 2020 Flow-Through Private Placements | ||||||||||
April 29, 2020 | Common Shares | 200,000 | $ | 0.50 | N/A | Issued pursuant to exercise of Options issued under the Stock Option Plan | ||||||||||
April 13, 2020 | Common Shares | 800,000 | $ | 0.50 | N/A | Issued pursuant to the exercise of Options issued under the Stock Option Plan | ||||||||||
April 15, 2020 | Options | 2,300,000 | N/A | $ | 1.00 | Options issued pursuant to the Stock Option Plan | ||||||||||
March 6, 2020 | Common Shares | 15,000,000 | $ | 1.12 | N/A | Issued pursuant to Novo Transaction |
10 ESCROWED SECURITIES
10.1 Summary
For the fiscal year ended December 31, 2019 there were no securities of New Found subject to escrow or to a contractual restriction on transfer.
Subsequent to the fiscal year ended December 31, 2019, in connection with the initial public offering of the Company’s Common Shares, Palisade Goldcorp Ltd, Novo Resources Corp., 2176423 Ontario Inc. (a corporation controlled by Eric Sprott), Collin Kettell, Denis Laviolette and Craig Roberts (collectively, the “Principals”), entered into an escrow agreement (the “Escrow Agreement”) with Computershare Trust Company of Canada, as escrow agent (the “Escrow Agent”), pursuant to which the Principals deposited 90,199,500 Common Shares into escrow (the “Escrowed Securities”) with the Escrow Agent, representing approximately 63% of the issued and outstanding Common Shares as of the date of this AIF.
In accordance with NP 46-201, the Escrowed Securities will be subject to a three-year escrow and subject to the following release scheduled:
Date | Amount of Escrowed Securities Released | |
On the August 11, 2020 (the “Listing Date”) | 1/10th of the Escrowed Securities | |
6 months after the Listing Date | 1/6th of the remaining Escrowed Securities | |
12 months after the Listing Date | 1/5th of the remaining Escrowed Securities | |
18 months after the Listing Date | 1/4th of the remaining Escrowed Securities | |
24 months after the Listing Date | 1/3rd of the remaining Escrowed Securities | |
30 months after the Listing Date | 1/2 of the remaining Escrowed Securities | |
36 months after the Listing Date | the remaining Escrowed Securities |
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Additionally, securities of New Found may be subject to additional escrow restrictions and restrictions on transfer pursuant to NP 46-201, or if required by the TSXV (in accordance with TSXV Policy 5.4) or other applicable regulations of any other stock exchange on which the securities of New Found may be listed for trading in the future.
11 DIRECTORS AND OFFICERS
11.1 Name, Occupation and Security Holding
The name, municipality of residence, positions held with the Company, and principal occupation within the five preceding years as at the date of this AIF each director and executive officer of New Found are as follows:
Number and | ||||||||
Percentage of | ||||||||
Position(s) and Office(s) | Principal Occupation(s) During | Common | ||||||
Name and Residence | with New Found | Past Five Years | Director Since | Shares Held | ||||
COLLIN KETTELL, Puerto Rico, United States |
Executive Chairman and Director | Executive Chairman (since March 2020) and former CEO (2016 -2020), New Found.; CEO, Victory Metals Inc., since January 2019; Executive Chairman, Palisades Goldcorp Ltd., since August 2019; Founder; Director, Golden Planet Mining Corp., since January 2021; previously, CEO, Palisade Global Investments Ltd. All of the foregoing companies are mineral exploration and development companies. | January 21, 2016 |
4,280,000 (1) (2.87%) |
||||
CRAIG ROBERTS(7) British Columbia, Canada |
Chief Executive Officer and Director | CEO and Director, New Found Gold Corp., since March 2020 and December 2019, respectively; CEO and Director, Ethos Gold Corp., since 2018; Director, K2 Gold Corporation, since 2016; Director, Global Battery Metals Ltd., since 2016. All of the foregoing companies are mineral exploration and development companies. | December 17, 2019 | 2,200,000 (2) (1.48%) | ||||
DENIS LAVIOLETTE, Ontario, Canada |
President and Director | President and Director of New Found since 2016; Executive Chairman, Goldspot Discoveries Inc since 2016. | January 21, 2016 | 3,500,000 (3) (2.35%) | ||||
GREG MATHESON, Ontario, Canada |
Chief Operating Officer | COO of New Found since 2019; former Manager of Exploration, Northern Gold Mining Inc., former Senior Project Manager, Oban Mining Corp. All of the foregoing companies are mineral exploration and development companies. | - | Nil (4) | ||||
MICHAEL KANEVSKY, British Columbia, Canada |
Chief Financial Officer | CFO of New Found since 2019; CFO of Mexican Gold Corp; CFO of Palisades Goldcorp Ltd. All of the foregoing companies are mineral exploration and development companies. | - | Nil |
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Number and | ||||||||
Percentage of | ||||||||
Position(s) and Office(s) | Principal Occupation(s) During | Common | ||||||
Name and Residence | with New Found | Past Five Years | Director Since | Shares Held | ||||
JOHN ANDERSON(8), British Columbia, Canada |
Director | Executive Chairman of Triumph Gold Corp. since December 2014; Director of Triumph Gold Corp. since January 2010; director of Mexican Gold from 2017 to present. All of the foregoing companies are mineral exploration and development companies | April 20, 2018 | Nil (5) | ||||
DR. QUINTON HENNIGH(9) | Director | President and Chairman of Novo Resources Corp, since 2009, director of New Found, since 2020; Director of Irving Resources Inc. since 2015; Director of Kuya Silver Corporation (formally Miramont Resources Corp.) since 2017; Director of Precipitate Gold Corp since 2010; Director of Condor Resources Inc. since 2020; Director of Tristar Gold Inc. since 2015. All of the foregoing companies are involved in one or all of: mineral exploration, development, production and the capital markets. | June 17, 2020 | 130,600(6) (0.09%) |
Notes:
(2) | Mr. Kettell is the principal securityholder of Palisades Goldcorp Ltd., which directly holds the 45,566,425 Common Shares of the Company (or 32.7% of the issued and outstanding Common Shares as of the date of this AIF). As of the date of this AIF, Mr. Kettell also holds 4,280,000 Options, entitling him to acquire an additional 4,280,000 Common Shares. |
(2) | As of the date of this AIF, Mr. Roberts also holds 3,175,000 Options, entitling him to acquire an additional 3,175,000 Common Shares. |
(3) | As of the date of this AIF, Mr. Laviolette also holds 2,750,000 Options, entitling him to acquire an additional 2,750,000 Common Shares. |
(4) | As of the date of this AIF, Mr. Matheson also holds 625,000 Options, entitling him to acquire an additional 625,000 Common Shares. |
(5) | As of the date of this AIF, Mr. Anderson also holds 625,000 Options, entitling him to acquire an additional 450,000 Common Shares. |
(6) | As of the date of this AIF, Dr. Quinton Hennigh also held 550,000 Options, entitling him to acquire an additional; 300,000 Common Shares. |
(7) | Member of the Audit Committee. |
(8) | Member of the Audit Committee. |
(8) | Member of the Audit Committee. Dr. Hennigh is the Chairman of this committee. |
11.2 Directors’ Terms of Office
The term of office for each director of New Found expires at the next annual general meeting of shareholders of the Company.
The members of board committees are appointed by the Board of Directors as soon as possible following each annual general meeting of shareholders of the Company.
The officers of New Found are appointed by the Board of Directors and hold office for such period and on such terms as the Board of Directors may determine.
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11.3 Committees of the Board of Directors
The committees of the Board of Directors of New Found and the directors serving on each of the committees are described below:
11.4 Audit Committee
11.4.1 Overview
The Company has formed an Audit Committee comprised of John Anderson (Chair), Dr. Quinton Hennigh and Craig Roberts, all of whom are “financially literate” as defined in National Instrument 52-110 – Audit Committees (“NI 52-110”). Mr. Anderson and Dr. Hennigh are considered “independent” and Mr. Roberts, as Chief Executive officer of the Company, is not considered “independent”, pursuant to NI 52-110.
The Audit Committee provides assistance to the Board in fulfilling its obligations relating to the integrity of the internal financial controls and financial reporting of the Company. The external auditors of the Company report directly to the Audit Committee. The Audit Committee’s primary duties and responsibilities include: (i) reviewing and reporting to the Board on the annual audited financial statements (including the auditor’s report thereon) and unaudited interim financial statements and any related management’s discussion and analysis, if any, and other financial disclosure related thereto that may be required to be reviewed by the Audit Committee pursuant to applicable legal and regulatory requirements; (ii) reviewing material changes in accounting policies and significant changes in accounting practices and their impact on the financial statements; (iii) overseeing the audit function, including engaging in required discussions with the Company’s external auditor and reviewing a summary of the annual audit plan at least annually, overseeing the independence of the Company’s external auditor, overseeing the Company’s internal auditor, and pre-approving any non-audit services to the Company; (iv) reviewing and discussing with management the appointment of key financial executives and recommending qualified candidates to the Board; (v) reviewing with management and the Company’s external auditors, at least annually, the integrity of the internal controls over financial reporting and disclosure; (vi) reviewing management reports related to legal or compliance matters that may have a material impact on the Company and the effectiveness of the Company’s compliance policies; and (vii) establishing whistleblowing procedures and investigating any complaints or concerns it deems necessary.
The full text of the Audit Committee Charter is attached to this AIF as Schedule “A”.
11.4.2 Relevant Education and Experience
Each member of the Audit Committee has adequate education and experience that is relevant to their performance as an Audit Committee member and, in particular, the requisite education and experience that have provided the member with:
(a) | an understanding of the accounting principles used by the Company to prepare its financial statements and the ability to assess the general application of those principles in connection with estimates, accruals and reserves; |
(b) | experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements or experience actively supervising individuals engaged in such activities; and |
(c) an understanding of internal controls and procedures for financial reporting.
John Anderson
Mr. Anderson has over 20 years of Capital market experience specializing in the resource sector and been involved in publicly traded companies and has served on the audit committee for public companies, including Triumph Gold Corp. Mr. Anderson is very familiar with managing junior listed companies, including financing and compliance with reporting requirements. Mr. Anderson has experience with various operational and reporting requirements, including the reporting of internal financial reporting requirements and economic projections. Based on his experience, Mr. Anderson has an understanding of financial reporting requirements respecting financial statements sufficient enough to enable him to discharge his duties as an Audit Committee member.
Dr. Quinton Hennigh
Dr. Quinton Hennigh is an economic geologist with more than 25 years of exploration experience with major gold mining firms. Dr. Hennigh has various experience with budgeting, economic assessments, and financial reporting through roles at various publicly traded companies. Dr. Hennigh is familiar with managing junior mining companies, including financing and compliance with reporting requirements. Based on his experience, Dr. Hennigh has an understanding of financial reporting requirements respecting financial statements sufficient enough to enable him to discharge his duties as an Audit Committee member
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Craig Roberts
Mr. Roberts is a mining engineer with over 35 years of operations, consulting and investment banking experiences and has been involved in publicly traded companies and has served on the audit committee for public companies, including K2 Gold Corp. Mr. Roberts is very familiar with managing junior listed companies, including financing and compliance with reporting requirements. Based on his experience, Mr. Roberts has an understanding of financial reporting requirements respecting financial statements sufficient enough to enable him to discharge his duties as an Audit Committee member.
11.4.3 Pre-Approval Policies and Procedures
The Audit Committee mandate requires that the Audit Committee pre-approve any retainer of the auditor of the Company to perform any non-audit services to the Company that it deems advisable in accordance with applicable legal and regulatory requirements and policies and procedures of the Board. The Audit Committee is permitted to delegate pre-approval authority to one of its members; however, the decision of any member of the Audit Committee to whom such authority has been delegated must be presented to the full Audit Committee at its next scheduled meeting.
11.4.4 Reliance on Certain Exemptions
The Company has relied upon the exemption provided by section 6.1 of NI 52-110, pursuant to which the Company is not required to comply with Part 3 (Composition of the Audit Committee) and Part 5 (Reporting Obligations) of NI 52-110.
11.4.5 External Auditor Service Fees by Category
The fees billed by the Company’s external auditors in each of the last two fiscal years for audit and non-audit related services provided to the Company or its subsidiaries (if any) were as follows:
Financial Year Ending | Audit Fees | Audit Related Fees(1) | Tax Fees(2) | All Other Fees(3) | ||||||||||||
December 31, 2019 | $ | 15,000 | $ | Nil. | $ | Nil | $ | Nil | ||||||||
December 31, 2018 | $ | 25,000 | $ | Nil. | $ | Nil | $ | Nil |
Notes:
(1) | Fees charged for assurance and related services that are reasonably related to the performance of an audit, and not included under Audit Fees. |
(2) | Fees charged for tax compliance, tax advice and tax planning services. |
(3) | Fees for services other than disclosed in any other column. |
On October 9, 2020, New Found appointed Deloitte LLP as the auditor of the Company. At the request of the Company, DNTW Toronto LLP resigned as the auditor of the Company. There were no reservations in DNTW Toronto LLP’s audit reports for the fiscal year ended December 31, 2019 and there are no reportable events, as such term is defined in National Instrument 51-102, between New Found and DNTW Toronto LLP. New Found filed the required reporting package in accordance with National Instrument 51-102 on October 14, 2020.
On October 28, 2020, New Found appointed Crowe MacKay LLP as the auditor of the Company. At the request of the Company, Deloitte LLP resigned as the auditor of the Company. There were no reportable events, as such term is defined in National Instrument 51-102, between New Found and Deloitte LLP. New Found filed the required reporting package in accordance with National Instrument 51-102 on November 10, 2020.
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11.5 Nominating and Corporate Governance Committee
The Company has formed a nominating and corporate governance committee (the “Nominating and Corporate Governance Committee”) comprised of Craig Roberts (Chair), Collin Kettell and John Anderson. Mr. Anderson is considered “independent” and Craig Roberts, as Chief Executive Officer, and Collin Kettell, as Executive Chairman, are not considered “independent”, pursuant to NI 52-110. In consultation with the Board, the Nominating and Corporate Governance Committee identifies and recommends to the Board potential nominees for election or re-election to the Board as well as individual directors to serve as members and chairs of each committee. The Nominating and Corporate Governance Committee establishes and reviews with the Board the appropriate skills and characteristics required of members of the Board, taking into consideration the Board’s short-term needs and long-term succession plans. In addition, the Nominating and Corporate Governance Committee develops, and annually updates, a long-term plan for the Board’s composition, taking into consideration the characteristics of independence, age, skills, experience and availability of service to the Company of its members, as well as opportunities, risks, and strategic direction of the Company
11.6 Compensation Committee
The Company has formed a Compensation Committee comprised of John Anderson (Chair), Collin Kettell and Craig Roberts. John Anderson is considered “independent” and Collin Kettell, as Executive Chairman, and Craig Roberts, as Chief Executive Officer, are not considered “independent”, pursuant to NI 52-110.
Each member of the Compensation Committee has business and other experience which is relevant to their position as a member of the Compensation Committee. By virtue of their differing professional backgrounds, business experience, knowledge of the Company’s industry, knowledge of corporate governance practices and, where appropriate, service on compensation committees of other reporting issuers and experience interacting with external consultants and advisors, the members of the Compensation Committee are able to make decisions on the suitability of the Company’s compensation policies and practices. See “Directors and Executive Officers - Director and Executive Officer Biographies” for a description of each Compensation Committee members experience and education.
The charter of the Compensation Committee provides that it is responsible for, among other things, the following matters:
· reviewing and approving corporate goals and objectives relevant to the compensation of the CEO and other executive officers, evaluating the performance of the CEO and the other executive officers in light of those goals and objectives and approving their annual compensation levels, including salaries, bonuses, and stock option grants based on such evaluation; and
· reviewing the compensation of directors for service on the Board and its committees and recommending to the Board the annual Board member compensation package, including retainer, committee member and chair retainers, Board and committee meeting attendance fees and any other form of compensation, such as stock option grants or stock awards.
While the Board is ultimately responsible for determining all forms of compensation to be awarded to the CEO, other executive officers and directors, the Compensation Committee will when appropriate review the Company’s compensation philosophy, policies, plans and guidelines and recommend any changes to the Board. See “Executive Compensation” for a discussion of, among other things, the process by which the Compensation Committee in collaboration with the Board determines the compensation of the Company’s directors and officers.
11.7 Cease Trade Orders, Bankruptcies, Penalties or Sanctions
To the knowledge of the Company, none of the Company’s directors or executive officers is, as of the date of this AIF, or was within 10 years before the date of this AIF, a director, chief executive officer or chief financial officer of any company (including the Company) that (a) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant issuer access to any exemption under securities legislation, that was in effect for a period or more than 30 consecutive days (an “Order”) that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer of such issuer, or (b) was subject to an Order that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.
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None of the Company’s directors or executive officers, nor, to its knowledge, any shareholder holding a sufficient number of its securities to affect materially the control of the Company (a) is, as at the date of this AIF, or has been within the 10 years before the date of this AIF, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, or (b) has, within the 10 years before the date of this AIF, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of such director, executive officer or shareholder.
None of the Company’s directors or executive officers, nor, to its knowledge, any shareholder holding a sufficient number of its securities to affect materially the control of the Company, has been subject to (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.
11.8 Conflicts of Interest
To the best of the Company’s knowledge, there are no existing or potential material conflicts of interest between the Company and any of its directors or officers as of the date hereof. However, certain of the Company’s directors and officers are, or may become, directors or officers of other companies with businesses which may conflict with its business. Accordingly, conflicts of interest may arise which could influence these individuals in evaluating possible acquisitions or in generally acting on the Company’s behalf. See also “Risk Factors – Conflicts of Interest”.
Pursuant to the BCBCA, directors and officers of the Company are required to act honestly and in good faith with a view to the best interests of the Company.
Generally, as a matter of practice, directors who have disclosed a material interest in any contract or transaction that the Board is considering will not take part in any board discussion respecting that contract or transaction. If on occasion such directors do participate in the discussions, they will refrain from voting on any matters relating to matters in which they have disclosed a material interest. In appropriate cases, the Company will establish a special committee of independent directors to review a matter in which directors or officers may have a conflict.
See also “Risk Factors – Risks Related to the Company – The directors and officers may have conflicts of interest with the Company”.
12 LEGAL PROCEEDINGS AND REGULATORY ACTIONS
Other than described below, to the Company’s knowledge, there are no legal proceedings or regulatory actions material to the Company to which it is a party, or has been a party to, or of which any of its property is the subject matter of, or was the subject matter of, since the beginning of the financial year ended December 31, 2019, and no such proceedings or actions are known by the Company to be contemplated.
12.1 Subsequent Events
On March 10, 2020, ThreeD Capital Inc (“ThreeD”) and 1313366 Ontario Inc. (“131” and together with ThreeD, the “Claimants”) filed a statement of claim in the Ontario Superior Court of Justice against Collin Kettell, Palisades Goldcorp Ltd. (“Palisades”) and the Company (the “ThreeD Claim”). Pursuant to the ThreeD Claim, the Claimants are challenging the validity of the sale of 17,500,000 Common Shares by the Claimants to Palisades Goldcorp. Ltd. on November 20, 2019.
On November 15, 2019, ThreeD and 131 each entered into share purchase agreements with Palisades (the “Share Purchase Agreements”) under which Palisades agreed to purchase the 13,500,000 Common Shares owned by ThreeD and the 4,000,000 Common Shares owned by 131 for $0.08 per Common Share. The transactions closed on November 20, 2019. As a private company with restrictions on the transfer of its Common Shares, the Company had to approve the proposed transfer, which it did by a consent resolution of the Board.
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ThreeD and 131 claim that at the time of negotiation and execution of the Share Purchase Agreements, Palisades and Mr. Kettell were aware of positive drill results from the Company’s 2019 Drill Program and the results were not disclosed to ThreeD and 131 to their detriment. Palisades and Mr. Kettell strongly deny ThreeD and 131’s allegations. ThreeD and 131 have made specific claims for (a) recission of the Share Purchase Agreements on the basis of oppression or unfair prejudice; (b) or alternatively, damages in the amount of $21,000,000 for the alleged improper actions by ThreeD and 131, (c) a declaration that Palisades and Collin Kettell, as shareholder or director and/or officer of the Company, have had acted in a manner that is oppressive, unfairly prejudicial or unfairly disregarded their interests, (d) a declaration that Palisades and Collin Kettell engaged in insider trading contrary to section 138 of the Securities Act (Ontario), (e) unjust enrichment and (f) interests and costs. Palisades and Mr. Kettell refute each of the specific claims made by the Claimants.
The Company filed a statement of defence in response to the ThreeD Claim on June 12, 2020, pursuant to which, among other things, the Company denies that it is a proper party to the ThreeD Claim and the allegations against it therein, including because no relief is claimed against the Company in paragraph 1 of the ThreeD Claim.
The Claimants, Palisades and the Company have completed documentary productions and have scheduled oral examinations for discovery to be conducted from May 28, 2021 to June 4, 2021.
There have been no penalties or sanctions imposed against the Company by a court or regulatory authority, and the Company has not entered into any settlement agreements before any court relating to provincial or territorial securities legislation or with any securities regulatory authority, since its incorporation.
13 INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
Except as disclosed in this AIF, to the knowledge of the Company, no director or executive officer, or person or company that beneficially owns, or controls and directs, directly or indirectly, more than 10 percent of the any class or series of the voting securities of the Company, or any associate or affiliate of the foregoing, have had any material interest, direct or indirect, in any transaction within the three most recently completed financial years or during the current financial year prior to the date of this AIF that has materially affected or is reasonably expected to materially affect the Company.
Certain directors and/or executive officers have been granted stock options of the Company, and has received consulting fees for services provided to New Found.
14 TRANSFER AGENT AND REGISTRAR
New Found’s transfer agent and registrar is Computershare Investor Services Inc. at its principal office in Vancouver, British Columbia.
15 MATERIAL CONTRACTS
Except for material contracts entered into in the ordinary course of business, set out below are material contracts to which New Found or any of its subsidiaries are a party to or entered into for the fiscal period ended December 31, 2019 or the date of this AIF.
(1) | the Agency Agreement between New Found, Canaccord Genuity Corp., BMO Nesbitt Burns Inc. and Desjardins Securities Inc. (together the “Agents”), dated July 31, 2020 (the “Agency Agreement”); and |
(2) | the Stock Option Plan. |
The Agency Agreement
The Company entered into the Agency Agreement on July 31, 2020 in connection with its initial public offering in Canada and listing on the TSXV. On August 11, 2020, New Found completed its initial public offering of an aggregate of 21,000,000 Common Shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 14, 2020, the Agents exercised their overallotment option in full to offer and sell an additional 3,150,000 Common Shares for gross proceeds of $4,095,000. New Found paid agents’ fees of $1,793,700 in cash and issued 1,379,768 agents’ warrants exercisable into Common Shares at $1.30 for 12 months from the date of issue in connection with the initial public offering.
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The Stock Option Plan
See “Description of Capital Structure - Options” for a summary of the key terms of the Stock Option Plan.
Outside of the above, New Found is not aware of any material contracts of the Company that were entered into (a) within the last financial year and up to the date of this AIF, or (b) before the last financial year but still in effect, and that is required to be filed under Part 12 of NI 51-102 or that would be required to be filed under 51-102 but for the fact that it was previously filed.
16 INTERESTS OF EXPERTS
Information of a scientific or technical nature in respect of the Queensway Project is included in this AIF based upon the Queensway Technical Report, with an effective date of June 20, 2020, prepared by Dawn Evans-Lamswood, M.Sc. P.Geo. of DEL Exploration. who is an independent Qualified Person under NI 43-101.
To the best of the Company’s knowledge, after reasonable inquiry, as of the date hereof, the aforementioned individual and his firm do not beneficially own, directly or indirectly, any Common Shares.
DNTW Toronto LLP, the auditor of the annual financial statements of New Found included in this AIF, has advised the Company that it is independent of the Company in accordance with the Code of Professional Conduct of the Chartered Professional Accountants of Ontario.
17 ADDITIONAL INFORMATION
Additional information relating to New Found may be found on New Found’s website https://newfoundgold.ca/ or under New Found’s profile on SEDAR at www.sedar.com.
Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of New Found’s securities and securities authorized for issuance under equity compensation plans, is contained in New Found’s Final Long Form Prospectus dated July 31, 2020. Additional financial information in relation to New Found is provided in Schedule “A” and Schedule “B” of New Found’s Final Long Form Prospectus dated July 31, 2020.
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SCHEDULE “A”
CHARTER OF THE AUDIT COMMITTEE OF NEW FOUND GOLD CORP.
1. ROLE AND OBJECTIVE
The Audit Committee (the “Committee”) is appointed by and reports to the Board of Directors (the “Board”) of New Found Gold Corp. (the “Corporation”). The Committee assists the Board in fulfilling its oversight responsibilities relating to financial accounting and reporting process and internal controls for the Corporation.
The Committee and its membership shall to the best of its ability, knowledge and acting reasonably, meet all applicable legal, regulatory and listing requirements, including, without limitation, those of any stock exchange on which the Corporation’s shares are listed, the Business Corporations Act (British Columbia) (the “Act”), and all applicable securities regulatory authorities.
2. COMPOSITION
· | The Committee shall be composed of three or more directors as shall be designated by the Board from time to time. |
· | At least two members of the Committee shall be “independent” and each Committee member shall be financially literate (as such terms are defined under applicable securities laws and exchange requirements for audit committee purposes). Each member of the Committee shall be able to read and understand the Corporation’s financial statements, including the Corporation’s statement of financial position, income statement and cash flow statement and any other applicable statements or notes to the financial statements. |
· | Members of the Committee shall be appointed at a meeting of the Board, typically held following the annual shareholders’ meeting. Each member shall serve until his/her successor is appointed unless he/she shall resign or be removed by the Board or he/she shall otherwise cease to be a director of the Corporation. Any member may be removed or replaced at any time by the Board. |
· | Where a vacancy occurs at any time in the membership of the Committee, it may be filled by a vote of a majority of the Board. |
· | The Chair of the Committee may be designated by the Board or, if it does not do so, the members of the Committee may elect a chair by vote of a majority of the full Committee membership. The Chair of the Committee shall be an independent director (as described above). |
· | If the Chair of the Committee is not present at any meeting of the Committee, one of the other members of the Committee present at the meeting shall be chosen by the Committee to preside. |
· | The Chair of the Committee presiding at any meeting shall not have a casting vote. |
· | The Committee shall appoint a secretary (the “Secretary”) who need not be a member of the Committee or a director of the Corporation. The Secretary shall keep minutes of the meetings of the Committee. This role is normally filled by the Secretary of the Corporation. |
3. MEETINGS
· | The Committee shall meet at least quarterly, at the discretion of the Chair or a majority of its members, as circumstances dictate or as may be required by applicable legal or listing requirements, provided that meetings of the Committee shall be convened whenever requested by the auditor that is appointed by the shareholders (the “Independent Auditor”) or any member of the Committee in accordance with the Act. |
· | Notice of the time and place of every meeting may be given orally, in writing, by facsimile or by e-mail to each member of the Committee, when possible at least 48 hours prior to the time fixed for such meeting. |
· | A member may in any manner waive notice of the meeting. Attendance of a member at the meeting shall constitute waiver of notice of the meeting, except where a member attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting was not lawfully called. |
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· | Any member of the Committee may participate in the meeting of the Committee by means of conference telephone or other communication equipment, and the member participating in a meeting pursuant to this paragraph shall be deemed, for purposes hereof, to be present in person at the meeting. |
· | A majority of Committee members, present in person, by video-conference, by telephone or by a combination thereof, shall constitute a quorum. |
· | If within one hour of the time appointed for a meeting of the Committee, a quorum is not present, the meeting shall stand adjourned to the same hour on the next business day following the date of such meeting at the same place. If at the adjourned meeting a quorum as hereinbefore specified is not present within one hour of the time appointed for such adjourned meeting, such meeting shall stand adjourned to the same hour on the next business day following the date of such meeting at the same place. If at the second adjourned meeting a quorum as hereinbefore specified is not present, the quorum for the adjourned meeting shall consist of the members then present. |
· | If and whenever a vacancy shall exist, the remaining members of the Committee may exercise all of its powers and responsibilities so long as a quorum remains on the Committee. |
· | At all meetings of the Committee, every question shall be decided by a majority of the votes cast. In case of an equality of votes, the matter will be referred to the Board for decision. Any decision or determination of the Committee reduced to writing and signed by all of the members of the Committee shall be fully effective as if it had been made at a meeting duly called and held. |
· | The CEO and CFO are expected to be available to attend meetings when requested, but a portion of every meeting will be reserved for in camera discussion without the CEO or CFO, or any other member of management, being present. |
· | The Committee may by specific invitation have other resource persons in attendance such officers, directors and employees of the Corporation and its subsidiaries, and other persons, including the Independent Auditor, as it may see fit, from time to time, to attend at meetings of the Committee. |
· | The Board may at any time amend or rescind any of the provisions hereof, or cancel them entirely, with or without substitution. |
· | The Committee shall have the right to determine who shall and who shall not be present at any time during a meeting of the Committee. |
· | Minutes of Committee meetings shall be sent to all Committee members. |
· | The Chair of the Committee shall report periodically the Committee’s findings and recommendations to the Board. |
4. RESOURCES AND AUTHORITY
· | The Committee shall have access to such officers and employees of the Corporation and its subsidiaries and to such information with respect to the Corporation and its subsidiaries as it considers being necessary or advisable in order to perform its duties and responsibilities. |
· | The Committee shall have the authority to engage and obtain advice and assistance from internal or external legal, accounting or other advisors and resources, as it deems advisable, at the expense of the Corporation. |
· | The Committee shall have the authority to communicate directly with the Independent Auditor. |
5. RESPONSIBILITIES
(a) Chair
To carry out its oversight responsibilities, the Chair of the Committee shall undertake the following:
· | provide leadership to the Committee with respect to its functions as described in this Charter and as otherwise may be appropriate, including overseeing the logistics of the operations of the Committee; |
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· | chair meetings of the Committee, unless not present (including in camera sessions), and report to the Board following each meeting of the Committee on the findings, activities and any recommendations of the Committee; |
· | ensure that the Committee meets on a regular basis and at least four times per year; |
· | in consultation with the Committee members, establish a calendar for holding meetings of the Committee; |
· | ensure that Committee materials are available to any director on request; |
· | report annually to the Board on the role of the Committee and the effectiveness of the Committee in contributing to the objectives and responsibilities of the Board as a whole; |
· | foster ethical and responsible decision making by the Committee and its individual members; |
· | encourage Committee members to ask questions and express viewpoints during meetings; |
· | together with the Corporate Governance and Nominating Committee, oversee the structure, composition, membership and activities delegated to the Committee from time to time; |
· | ensure that resources and expertise are available to the Committee so that it may conduct its work effectively and efficiently; |
· | attend each meeting of shareholders to respond to any questions from shareholders as may be put to the Chair; and |
· | perform such other duties and responsibilities as may be delegated to the Chair by the Board from time to time. |
(b) The Committee
The Committee has the authority to conduct any investigation appropriate to its responsibilities, and it may request the Independent Auditor as well as any officer of the Corporation, or outside counsel for the Corporation, to attend a meeting of the Committee or to meet with any members of, or advisors to, the Committee. The Committee shall have unrestricted access to the books and records of the Corporation and has the authority to retain, at the expense of the Corporation, special legal, accounting, or other consultants or experts to assist in the performance of the Committee’s duties.
The Committee is hereby delegated the duties and powers specified in Section 225 of the Act and, without limiting these duties and powers, the Committee will carry out the following responsibilities:
Financial Accounting and Reporting Process and Internal Controls
· | review the annual audited financial statements and report thereon to the Board and recommend to the Board whether or not same should be approved prior to their being filed with the appropriate regulatory authorities. The Committee shall also review and approve the interim financial statements prior to their being filed with the appropriate regulatory authorities. The Committee shall discuss significant issues regarding accounting principles, practices, and judgments of management with management and the Independent Auditor as and when the Committee deems it appropriate to do so. The Committee shall satisfy itself that the information contained in the annual audited financial statements is not significantly erroneous, misleading or incomplete and that the audit function has been effectively carried out. |
· | assess the integrity of internal controls and financial reporting procedures and ensure implementation of appropriate controls and procedures. |
· | review the financial statements, management’s discussion and analysis relating to annual and interim financial statements, and press releases and any other public disclosure documents containing financial disclosure before the Corporation publicly discloses this information. |
· | be satisfied that adequate procedures are in place for the review of the Corporation’s public disclosure of financial information extracted or derived from the Corporation’s financial statements, and periodically assess the adequacy of these procedures. |
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· | meet no less frequently than annually with the Independent Auditor and the Chief Financial Officer or, in the absence of a Chief Financial Officer, with the officer of the Corporation in charge of financial matters, to review accounting practices, internal controls and such other matters as the Committee deems appropriate. |
· | inquire of management and the Independent Auditor about significant risks or exposures, both internal and external, to which the Corporation may be subject, and assess the steps management has taken to minimize such risks. |
· | review the post-audit or management letter containing the recommendations of the Independent Auditor and management’s response and subsequent follow-up to any identified weaknesses. |
· | oversee the Corporation’s plans to adopt changes to accounting standards and related disclosure obligations. |
· | in consultation with the Corporate Governance and Nominating Committee, ensure that there is an appropriate standard of corporate conduct including, if necessary, adopting and overseeing a corporate code of ethics for senior financial personnel. |
· | establish procedures for: |
· | the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters; and |
· | the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters. |
· | provide oversight to related party transactions entered into by the Corporation. |
Independent Auditor
· | recommend to the Board for approval by shareholders, the selection, appointment and compensation of the Independent Auditor; |
· | be directly responsible for oversight of the Independent Auditor and the Independent Auditor shall report directly to the Committee. |
· | with reference to the procedures outlined separately in “Procedures for Approval of Non-Audit Services” (attached hereto as Appendix ‘A’), pre-approve all audit and non-audit services not prohibited by law to be provided by the Independent Auditor. |
· | review the Independent Auditor’s audit plan, including scope, procedures, timing and staffing of the audit. |
· | review the results of the annual audit with the Independent Auditor, including matters related to the conduct of the audit, and receive and review the auditor’s interim review reports. |
· | review fees paid by the Corporation to the Independent Auditor and other professionals in respect of audit and non-audit services on an annual basis. |
Other Responsibilities
· | perform any other activities consistent with this Charter and governing law, as the Committee or the Board deems necessary or appropriate; |
· | institute and oversee special investigations, as needed; and |
· | review and assess the adequacy of this Charter annually and submit any proposed revisions to the Board for approval. |
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Appendix A
Policy for Approval of Non-Audit Services
1. | In the event that New Found Gold Corp. (the “Corporation”) or a subsidiary of the Corporation wishes to retain the services of the Corporation’s Independent Auditor for services other than the annual audit (e.g. tax compliance, tax advice or tax planning, to meet the requirements of a regulatory filing or due diligence, to receive advice on various matters, etc.), the Chief Financial Officer of the Corporation shall consult with the Audit Committee of the Board of Directors (the “Committee”), who shall have the authority to approve or disapprove such non-audit services. The Chair of the Committee has the authority to approve or disapprove such non-audit services on behalf of the Committee, and shall advise Committee of such pre-approvals no later than the time of the next meeting of the Committee following such pre-approval having been given. |
2. | The Committee, or the Chair of the Committee, as appropriate, shall confer with the Independent Auditor regarding the nature of the services to be provided and shall not approve any services that would be considered to impair the independence of the Independent Auditor. For greater clarity, the following is a non- exhaustive list of the categories of non-audit services that would be considered to impair the independence of the Independent Auditor: |
(a) | bookkeeping or other services related to or requiring management decisions in connection with the Corporation’s accounting records or financial statements; |
(b) | financial information systems design and implementation; |
(c) | appraisal or valuation services, fairness opinion or contributions-in-kind reports; |
(d) | actuarial services; |
(e) | internal audit outsourcing services; |
(f) | management functions; |
(g) | human resources; |
(h) | broker or dealer, investment adviser or investment banking services; |
(i) | legal services; |
(j) | expert services unrelated to the audit; and |
(k) | any other service that the Canadian Public Accountability Board or any other applicable regulatory authority determines is impermissible. |
3. | The Chief Financial Officer of the Corporation shall maintain a record of non-audit services approved by the Chair of the Committee or the Committee for each fiscal year and provide a report to the Committee any services pre-approved since the last report, at each meeting and no less frequently than on a quarterly basis. |
4. | In accordance with the requirements set forth under the “Exemption for minimal non-audit services” provided by Section 2.3(4) of National Instrument 52-110 — Audit Committees, whereby the Independent Auditor has commenced a service and: |
(a) | the Corporation or the subsidiary entity of the Corporation, as the case may be, and the Independent Auditor did not recognize the services as non-audit services at the time of the engagement; |
(b) | once recognized as non-audit services, the services are promptly brought to the attention of the Committee and approved by the Committee prior to the completion of the audit; and |
(c) | the aggregate fees for the non-audit services not previously approved are immaterial in comparison to the aggregate fees paid by the Corporation to the Corporation’s Independent Auditor during the financial year in which the services are provided, |
such services shall be exempted from the requirements for pre-approval of non-audit services set out in this Policy.
A-1
Exhibit 99.3
Management’s Discussion and Analysis |
For the year ended December 31, 2020 and 2019 |
The following discussion is management’s assessment and analysis of the results and financial condition of New Found Gold Corp. (the “Company” or “NFG”) and should be read in conjunction with the accompanying audited financial statements and related notes. The financial data was prepared using accounting policies consistent with International Financial Reporting Standards (“IFRS”) and all figures are reported in Canadian dollars unless otherwise indicated. Please refer to the cautionary note regarding forward-looking statements and information within this Management’s Discussion & Analysis (“MD&A”) and the Risks Factors discussed in the Company’s most recent Annual Information Form on file with the Canadian provincial securities regulatory authorities.
This MD&A contains forward-looking information and forward-looking statements, within the meaning of applicable Canadian securities legislation, (collectively, “forward-looking statements”), that involve numerous risks and uncertainties. The Company continually seeks to minimize its exposure to business risks, but by the nature of its business and exploration activities and size, will always have some risk. These risks are not always quantifiable due to their uncertain nature. Should one or more of these risks and uncertainties, including those described under the headings “Risks and Uncertainties” and “Cautionary Notes Regarding Forward-Looking Statements” materialize, or should underlying assumptions prove incorrect, then actual results may vary materially from those expressed or implied in forward-looking statements. The effective date of this report is April 29, 2021.
The scientific and technical information contained in this MD&A has been reviewed and approved by the Company’s Chief Operating Officer, Greg Matheson, P.Geo., a Qualified Person as defined by National Instrument 43-101- Standards of Disclosure for Mineral Projects (“NI 43-101”). The scientific and technical information in this MD&A relating to the Queensway Project is derived from, and in some instances is a direct extract from, and is based on the assumptions, qualifications and procedures set out in, the report entitled “Technical Report on the Queensway Gold Project, Newfoundland, Canada” with an effective date of April 15, 2020, prepared in accordance with NI 43-101 (the “Queensway Technical Report”). Reference should be made to the full text of the Queensway Technical Report, which is available for review under the Company’s profile on SEDAR at www.sedar.com.
Description of Business
The Company was incorporated on January 6, 2016, under the Business Corporations Act (Ontario). On June 23, 2020, the Company continued as a British Columbia corporation under the Business Corporation Act in the province of British Columbia. The Company’s head office is located at 1430 – 800 West Pender Street, Vancouver, British Columbia V6C 2V6, and its registered office is located at Suite 2600 – 595 Burrard Street, Vancouver, British Columbia V7X 1L3. On August 11, 2020, the Company completed an initial public offering and listed on the TSX Venture Exchange under the symbol “NFG”.
The Company is a mineral exploration company engaged in the acquisition, exploration and evaluation of resource properties with a focus on gold properties located in the Provinces of Newfoundland and Labrador and Ontario, Canada. The Company’s principal objective is to explore and develop the Queensway Project, which is located near Gander, Newfoundland and to identify other properties worthy of investment and exploration. For the purpose of NI 43-101, the Queensway Project is the Company’s only material property.
The Queensway Project is comprised of 86 mineral licenses, including 6,041 claims comprising 151,030 hectares of land located near Gander, Newfoundland. The Queensway Project is accessible by main access roads including the Trans-Canada Highway (“TCH”) that passes through the southern portion of the project and has high voltage electric transmission lines running through the project area. In addition, the Company owns a 100% interest in the Lucky Strike project in Kirkland Lake, Ontario comprising 11,684 hectares, as well as a portfolio of mining and royalty interests throughout northeastern Ontario. The Lucky Strike Property is located 10km north of Larder Lake, Ontario and is comprised of 639 single cell un-patented mining claims. The Company is well financed to advance its planned exploration activities on the projects as intended.
As of the date of this MD&A, the Company’s Board of Directors consisted of the following: Collin Kettell (Executive Chairman), Craig Roberts, Denis Laviolette, John Anderson and Quinton Hennigh.
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Management’s Discussion and Analysis |
For the year ended December 31, 2020 and 2019 |
Additional information relating to the Company is available on the Company’s website at www.newfoundgold.ca.
Project Summary
Queensway Project, Newfoundland
Ownership
The Queensway Project contains nine optioned claim packages along with mineral licenses map staked by NFG. The Company acquired the rights to the Queensway Project by map staking mineral licenses and making a series of staged payments in cash and common shares of the Company from 2016 through 2020 under nine separate option agreements. All of the option agreements have been fully exercised resulting in 100% ownership by NFG of the mineral licenses related to such option agreements. In addition to the nine option agreements, NFG also conducted map staking resulting in 49 map staked mineral licenses which are held 100% by NFG. The optioned lands also carry various net smelter royalties and the option agreements are described in detail below and their location can be seen in the figure below.
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Management’s Discussion and Analysis |
For the year ended December 31, 2020 and 2019 |
Queensway Project – Option Agreement Claim Groups
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Management’s Discussion and Analysis |
For the year ended December 31, 2020 and 2019 |
Queensway Project – Royalties Agreements and Encumbrances |
1. | Linear and JBP Linear Property, NL - In July 2016, the Company acquired a 100% interest in the Linear and JBP Linear Property via an option agreement with Krinor Resources, Kevin Keats and Allan Keats. The Linear and JBP Linear property is comprised of six map staked licences covering 2,150 hectares and under the terms of the agreement the Company is to pay the optionor a total of $54,000 and issue 45,000 shares over a 36-month period; the agreement was fully executed in July 2019. A net smelter royalty grant of 0.6% is payable to the optionor along with an underlying net smelter royalty of 1.0% covering five of the six claims is payable to Paragon Minerals Corporation. This agreement contains a 2 km area of influence that subjects adjacent lands to the additional 0.6% net smelter royalty. |
2. | Unity Property, NL - In September 2016, the Company acquired a 100% interest in the Unity Property via an option agreement with Unity Resources Inc., Gary Lewis, Donna Lewis, Nigel Lewis, Leonard Lewis, and Aubrey Budgell. The unity property is comprised of ten map staked licences covering 8,150 hectares and under the terms of the agreement the Company is to pay the optionor a total of $90,000 over a 60-month period; the agreement was fully executed in June 2020. A net smelter royalty grant of 1.6% is payable to the optionor which can be reduced by 1.0% by paying the optionor $ 1,000,000. This agreement contains a 2 km area of influence that subjects adjacent lands but is bounded to areas east and north of the subject lands and does not impact any other optioned property. |
3. | United Gold Property, NL - In October 2016, the Company acquired a 100% interest in the United Gold Property via an option agreement with Noreen Kennedy. The United Gold property is comprised of one map staked licence covering 275 hectares and under the terms of the agreement the Company is to pay the optionor a total of $16,500 and $ 16,500 worth of shares are to be issued over a 6-month period; this option agreement has been fully executed and the Company is the sole owner of the property. A net smelter royalty grant of 0.6% is payable to the optionor. |
4. | Golden Bullet Property, NL - In November 2016, the Company acquired a 100% interest in the Golden Bullet Property via an option agreement with Roland Quinlan, Eddie Quinlan and Larry Quinlan. The Golden Bullet property is comprised of four map staked licences covering 1,200 hectares and under the terms of the agreement the Company is to pay the optionor a total of $125,000 and $100,000 worth of common shares of NFG are to be issued over a 36-month period; the option was fully executed in November 2019 resulting in a 100% ownership by NFG. A net smelter royalty grant of 1.6% is payable to the optionor which can be reduced by 1.0% by paying the optionor $1,000,000. This agreement contains a 2 km area of influence that subjects adjacent lands but is limited to lands acquired after the agreement date. |
5. | Blackmore Property, NL - In December 2016, the Company acquired a 100% interest in the Blackmore Property via an option agreement with Neal Blackmore. The Blackmore property is comprised of two map staked licences covering 175 hectares and under the terms of the agreement the Company is to pay the optionor a total of $10,000; this option agreement has been fully executed and the Company is the sole owner of the property. A net smelter royalty grant of 0.6% is payable to the optionor. |
6. | Guinchard Property, NL - In April 2017, the Company acquired a 100% interest in the Guinchard Property via an option agreement with Wayde Guinchard, Myrtle Guinchard and Peter Rogers. The Guinchard property is comprised of five map staked licences covering 625 hectares and under the terms of the agreement the Company is to pay the optionor a total of $45,000 and 105,000 shares over a 24-month period; the option was fully executed in April 2019 and the Company is the sole owner of the property. A net smelter royalty grant of 1.0% is payable to the optionor which can be reduced by 0.5% by paying the optionor $1,000,000. |
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Management’s Discussion and Analysis |
For the year ended December 31, 2020 and 2019 |
7. | JBP Linear Property, NL - In May 2017, the Company acquired a 100% interest in the JBP Linear Property via an option agreement with Roland Quinlan and Eddie Quinlan. The JBP Linear property is comprised of five map staked licences covering 1250 hectares and under the terms of the agreement the Company is to pay the optionor a total of $45,000 over a 24-month period; the option was fully executed in November 2019 and the Company is the sole owner of the property; although claim transfers are pending at the time of the report. A net smelter royalty grant of 1.6% is payable to the optionor which can be reduced by 1.0% by paying the optionor $1,000,000. |
8. | P-Pond Property, NL - In May 2017, the Company acquired a 100% interest in the P-Pond Property via an option agreement with Stephen Stockley, Mark Stockley and Edward Stockley. The P-Pond property is comprised of three map staked licences covering 175 hectares and under the terms of the agreement the Company is to pay the optionor a total of $30,000 and $10,000 worth of shares are to be issued over a 12-month period; this option agreement has been fully executed and the Company is the sole owner of the property. A net smelter royalty grant of 1.0% is payable to the optionor which can be reduced by 0.5% by paying the optionor $250,000. |
9. | Lush Property, NL - In September 2018, the Company acquired a 100% interest in the Lush Property via a purchase agreement with Paragon Minerals Corp. The Lush property is comprised of one map staked licence covering 50 hectares. Under the terms of the purchase agreement the Company is to grant a net smelter royalty of 0.5% payable to Paragon Minerals Corp along with an underlying net smelter royalty of 2.0% payable to Tom Lush which can be reduced by 1.0% by paying $1,000,000 to Tom Lush. |
10. | Queensway Map Staked Lands, NL - Between August 2016 and April 2017, the Company acquired a 100% interest of twenty-one licences covering 73,830 hectares through map staking. In April of 2020, an additional twenty-eight mineral licenses were staked totalling 64,175 hectares shown in the figure above. |
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Management’s Discussion and Analysis |
For the year ended December 31, 2020 and 2019 |
Queensway Project – Overall Project Showing Gold Occurrences and Fault Projects
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Management’s Discussion and Analysis |
For the year ended December 31, 2020 and 2019 |
Environmental and Exploration Permitting
All exploration activities, including reclamation, must comply with all pertinent federal and provincial laws and regulations, the fundamental requirement of which, is that exploration on crown land must prevent unnecessary or undue degradation or impact on fish and wildlife and requires reclamation if any degradation or impacts that occur. All exploration activities in Newfoundland and Labrador require an Exploration Approval from the Department of Natural Resources prior to the start of work. In this, approval requirements for the exploration are listed with contacts for the various entities given. Five Exploration Approvals are in place as of the date of this MD&A along with other associated provincial permits.
The first Exploration Approval is for diamond drilling (750 Holes) on the Queensway North (“QWN”) area shown on the map above; this approval expires on October 8, 2021. The second is for airborne geophysics, over the entire Queensway Project and expires on September 24, 2021. The third Exploration Approval is for trenching within the Queensway South (“QWS”) area shown on the map above and expires on October 16, 2021. A fourth Exploration Approval covers geochemical sampling and prospecting over the entire Queensway Project and expires on August 12, 2021. A fifth Exploration Approval covers diamond drilling within the GGS area near Eastern Pond and expires on October 16, 2021. Any changes to the planned work have to be submitted to the Department of Natural Resources and either an amended approval is given or a new application has to be made.
Water removal from ponds/streams etc. for trenching (washing trenches) or drilling requires a Water Use License. One water use permit is in place for the QWN claims and related diamond drilling and trenching. Two water use licenses are in place for the GGS claims to cover trenching and diamond drilling.
A number of secondary permits and authorizations are held by the company to conduct its exploration activities related to the cutting of wood, construction of access trails and modifications to water bodies.
In October 2020 the Company submitted an environmental registration document with the Newfoundland Ministry of Environment for review related to its diamond drilling activities on the QWN claim group. The Company was released from the environmental review on December 12, 2020 subject to several operating/reporting conditions.
Generally, the mineral licenses are available for exploration activities year-round and only subject to the conditions of the exploration approvals and water use license; other activities such as construction, road building, camps and water crossings may require additional permits from outside of the mines department. Mineral licenses within the southernmost portion of Gander Gold South (“GGS”), specifically licenses 024557M, 024558M, 024561M, 024563M, 024568M, and 024570M are restricted from exploration activities from mid-May to early-July due to spring habitat for Newfoundland caribou.
Project Infrastructure
The main access roads include the TCH that passes through the southern portion of the Appleton Fault Zone (“AFZ”) / Joe Batts Pond Deformation Zone (“JBPDZ”) claim areas on the QWN, and the Northwest Gander (“NWG”) road that extends along the western portion of the property from the TCH just west of Glenwood, to the south and west of Gander Lake on the GGS. Gravel woods access roads originally built for the forestry industry, such as the AFZ access, the JBPDZ access, the JBP road and the roads to the east of the steel bridge across the NWG River and across the bridge to the east of the Southwest Gander River extend through most of the property, with areas in the extreme SE and SW the most difficult to access. The SW area is best accessed by woods roads from Route 360, the Baie D’Espoir highway, that leaves the TCH at Bishop’s Falls, approximately 70 km to the west of Glenwood.
Transportation availability includes the international airport at Gander which has bush plane and helicopter bases, a helicopter base in Appleton and shipping through the ports of Lewisporte and Botwood, 25 km and 70 km to the west respectively, and north of the TCH, both with good harbours although problems with winter shipping due to sea and pack ice.
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Management’s Discussion and Analysis |
For the year ended December 31, 2020 and 2019 |
Electricity is available from the NL provincial grid, which has three transmission lines through the Queensway Project as follows:
1) | A 350 kV HVdc direct current line which passes through the approximate centre of the GGS licences; |
2) | Two 138 kV HVac transmission lines to the north of the TCH crossing the AFZ and JBPDZ trends on the QWN licences; |
3) | A 69 kV HVac transmission line that approximately parallels the TCH to the north across the AFZ and JBPDZ trends on the QWN licences and follows the TCH and secondary routes. |
In addition, electrical power is supplied, through the provincial grid, to the towns of Glenwood and Appleton which are surrounded by the NFG Queensway licences.
Historical Work
To date there has been over 25,538 metres of core in 218 holes drilled historically on the Queensway Project by Noranda, Rubicon and various operators from the mid 1980’s through to 2012. Historical core drilling has primarily occurred north of Gander Lake along the two principal fault structures the AFZ and JBPDZ; the exploration drilling has been spread out amongst individual zones with drilling along 5 km of the AFZ targeting the Lotto, Powerline, Cokes, Keats, Dome, Trench 26, Road, Knob, Letha and Grouse Zones. Drilling at the JBPDZ has focussed along 3 km targeting the Pocket Pond and H-Pond zones and one drill hole targeting the 798 zone. Significantly lesser number of drill holes have also targeted zones south of Gander Lake including the Pauls Pond showing, Aztec and A-Zone extension and the Goose zone.
Throughout the 1980’s through mid-2000’s various operators and prospectors have completed surface geochemical sampling including tills, soils and rock samples. This amounts to roughly 1,200 till samples, over 60,000 soil samples and 4,000 rock samples spread across the large district scale project with concentrations of work around the many showings in the Queensway license group. This work has identified a number of gold in soil or gold in till anomalies that have led to surface gold discoveries or have yet to be explained with follow up exploration. Several locations throughout the project have defined surface float samples containing high grade gold mineralization some of which have led to surface gold occurrences while other locations have not been adequately explored to trace them to source.
Various historical ground geophysical surveys have been conducted throughout the Queensway Project with most of this work concentrated either along the AFZ, JBPDZ or in the region of the Paul’s Pond and Greenwood Pond showings in the QWS claim group. Over 50 different geophysical surveys including VLF, EM, MAG and IP have covered ground-based grids throughout the Queensway Project. Various anomalies have been identified and often limited follow up exploration has occurred.
A significant number of surface trenches have been conducted at the project with over 330 trenches. Many of the historical trenches have targeted soil and till anomalies with only some of these reaching bedrock; often the trenches not reaching bedrock have left both soil and till anomalies unexplained and open for further interpretation and exploration.
In 1994 Gander River Minerals optioned the Knob property including the Knob prospect from Noranda Exploration Co Ltd. Drilling by Gander River Minerals allowed for production of a historical resource estimate of 236,391 tonnes grading 10.26 g/t Au. This historical estimate was published by Gander River Minerals in the technical document titled “Eighth Year Assessment Report Summary of Diamond Drilling Activities Conducted Within Licence No. 4344 The ‘Knob’ Prospect N.T.S. 20/15” authored by Dean Sheppard, 1994 (Geofile 002D_0296).
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Management’s Discussion and Analysis |
For the year ended December 31, 2020 and 2019 |
The data used in the preparation of the historical resource estimate does not meet the current standards of exploration quality assurance and quality control protocols such that it should not be relied upon to produce a current resource estimate for the Knob prospect. Significant additional drilling and data verification would be required to ensure the quality of historic data meets current standards for use in a resource estimate. Additionally, the methods used in the preparation of the resource as a block long section methodology include certain assumptions of geological continuity and grade variography are not adequate to treat this as a current mineral resource estimate.
A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and the issuer is not treating the historical estimate as current mineral resources or mineral reserves.
Project Geology
The Queensway Project is located within the Exploits subzone of the Dunnage zone and lies just to the west of the Gander River Ultramafic Complex (“GRUC”) fault, which is the Dunnage-Gander zones boundary. See figure below:
Queensway Project – Geological Overview Map
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Management’s Discussion and Analysis |
For the year ended December 31, 2020 and 2019 |
It mostly comprises Cambrian to Silurian meta-sedimentary rocks of the Davidsville group (Williams et al., 1988; Colman-Sadd et al., 1990; Valverde-Vaquero et al., 2006; van Staal, 2007; O’Reilly et al., 2010). The Davidsville group is divided into the Outflow Formation and the Hunt’s Cove Formation. The property south of Gander Lake also includes the boundary between the Davidsville and Indian Island groups. The latter mainly comprises Silurian siliciclastic rocks, intruded by the Mount Peyton Intrusive suite.
There are over 100 gold showings/occurrences on and around the Queensway Project however the most notable mineralized zones in the Queensway Project are the JBPDZ which includes the H-Pond, Pocket Pond, Glass, Logan and Lachlan showings and the AFZ which includes the Dome, Little, Knob, Letha, Lotto, Grouse, Road, Bullet, Trench 26, Cokes, Powerline, Keats and Bowater showings. A number of gold mineralized occurrences also occur within the QWS claim group including the Greenwood Pond, Hornet, North Pauls Pond, Aztec, Goose, Road Gabbro and LBNL showings.
Recent Exploration
NFG’s Current Drill Campaign
On August 17, 2020 the Company announced it had initiated a 100,000m HQ size diamond drilling program at the Queensway Project. Drilling started at the Little-Powerline trend and would progress through various targets within the QWN property including an initial 12,000m planned for the Keats Zone. The Company announced on January 6, 2021 that it has now increased the drilling program started in 2020 to a total of 200,000m and plans to continue this program through to 2022 with eight drill rigs. In 2020 the Company completed 66 drill holes targeting the Little-Powerline, Lotto, Dome and Keats zones for a total of 13,400m.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Queensway North – Plan Map of Initial 2020 Drilling Grid Lines/Zones
2020 Trenching Campaign
NFG began surface excavation of a number of targets starting in July 2020 and completed 16 trenches of varying size; all of the excavation to date has occurred along the Appleton Fault Zone and includes trenching of the Little Zone, Hornet Zone, Road Zone as well as the discovery of two new zones (Regular Zone and Zone 36). Zone 36 is located 2.5 Km north-west of the Keats Zone as shown in the above figure and has been exposed along 120m of strike length and shows mineralization of Arsenopyrite, Pyrite, Chalcopyrite, Boulangerite and Visible Gold.
2020 Field Program
Starting in June 2020, the Company initiated a field recognisance program within the QWS mineral licenses. The objective of this program is to conduct geological mapping, structural analysis, prospecting and the collection of C horizon till samples to be processed for gold grain analysis.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Initial results from the 2020 field program detailed till survey were reported on August 27, 2020 where the Company had announced it had found a new fertile gold region 45 km south of the current Queensway North drill targets. The newly defined Eastern Pond target is comprised of two areas where recent till results have shown highly anomalous total gold grain counts including a high percentage of pristine gold grains and yielded several sub-crop samples up to 15.0 g/t Au.
One till sample yielded 216 gold grains, 163 (75%) of them classified as pristine. A second cluster of samples yielded up to 155 gold grains with 127 (82%) of these classified as pristine. The pristine morphology of these grains indicates that they have not travelled far from their bedrock source.
To date the Eastern Pond target is defined by sub-crop and till sample results over an approximately 4 km of strike length (see Figures below).
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Queensway South Project: Location of the Eastern Pond Till Anomaly at Queensway South
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Queensway South Project: Eastern Pond anomaly and preliminary till results
Sample ID | Easting | Northing | Total Gold Grains | Pristine Gold Grains | ||||||||||||||
41674 | 629784 | 5382499 | 216 | 163 | ||||||||||||||
41656 | 630332 | 5381175 | 155 | 127 |
Queensway South Project: Eastern Pond target till samples
Field crews were remobilized to the Eastern Pond area in late 2020 to conduct follow up work including prospecting, geological mapping and the collection of additional till samples to further vector the Company’s exploration towards bedrock sources. Follow up work at Eastern Pond in late 2020 resulted in the collection of rock samples, additional tills samples and two trenches were excavated.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
NFG’s Current Drill Campaign
The company announced on August 17, 2020 that it had initiated a 100,000m diamond drilling program at its Queensway Gold Project, this program was expanded to 200,000m on January 6, 2021. The drilling program is designed to test multiple exploration targets and zones along the 5 km of the Appleton Fault Zone and 12 km of the JBP Fault Zone.
Drilling to date has focussed along the Appleton Fault zone with seven drilling rigs active at the project as the date of the MD&A. Approximately 37,900m of drilling has been completed in 173 holes targeting the Little-Powerline, Dome, Road, Keats, Knob, 1744 and Lotto zones.
The majority of drilling to date has occurred at three zones along the Appleton Fault; the Keats Zone with 102 drill holes, the Lotto Zone with 21 drill holes and the Knob Zone with 16 drill holes with the balance of 23 drill holes completed at other zones along the Appleton Fault. The Company is also targeting the 1744 zone along the JBP Fault zone with 11 holes completed to date.
The Company has reported a number of significant gold assay intervals from the Lotto Zone starting with its first drill hole NFGC-20-17 reporting 16.3/g/t Au over 2.20m, 41.2 g/t Au over 4.75m and a third interval of 25.4 g/t Au over 5.15 m. On January 14, 2021 the Company announced the discovery of a new zone named the “Sunday Zone” proximal to the Lotto zone along the hanging wall of the Appleton Fault zone. The new discovery represents the first known occurrence of gold mineralization along the primary Appleton Fault structure with an intercept in drill hole NFGC- 20-44 grading 18.1g/t Au over 6.5m at a down hole depth of 239m. Additional gold mineralized intercepts were reported on February 23, 2021 and March 23, 2021 highlighted by drill holes NFGC-21-100 reporting 224.7 g/t Au over 2.45m, NFGC-21-109 reporting 51.3 g/t Au over 3.20m and NFGC-21-115 reporting 53.3 g/t Au over 3.10m.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
A complete list of drill holes and assay highlights from the Lotto zone are shown below:
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||||
NFGC-20-17 | 29.80 | 32.0 | 2.20 | 16.3 | Lotto | |||||||||||||||
And | 35.25 | 40.00 | 4.75 | 41.2 | Lotto | |||||||||||||||
Including | 35.25 | 36.9 | 1.65 | 108.7 | ||||||||||||||||
And | 56.95 | 70.75 | 13.8 | 10.1 | ||||||||||||||||
Including | 56.95 | 62.1 | 5.15 | 25.4 | Lotto | |||||||||||||||
Including | 61.0 | 61.8 | 0.8 | 138.3 | ||||||||||||||||
NFGC-20-20 | 100.25 | 103.25 | 3.00 | 5.31 | Lotto | |||||||||||||||
Including | 100.60 | 101.30 | 0.70 | 15.6 | Lotto | |||||||||||||||
NFGC-20-22 | 91.50 | 99.90 | 8.40 | 1.30 | Lotto | |||||||||||||||
NFGC-20-24 | 35.00 | 37.00 | 2.00 | 2.00 | Lotto | |||||||||||||||
And | 42.30 | 45.40 | 3.10 | 1.30 | Lotto | |||||||||||||||
And | 138.10 | 140.30 | 2.20 | 1.20 | Lotto | |||||||||||||||
NFGC-20-27 | 156.00 | 158.10 | 2.10 | 1.70 | Lotto | |||||||||||||||
And | 222.90 | 224.90 | 2.00 | 31.3 | Lotto | |||||||||||||||
NFGC-20-31 | 45.70 | 52.00 | 6.30 | 1.04 | Lotto | |||||||||||||||
NFGC-20-35 | NSV | Lotto | ||||||||||||||||||
NFGC-20-39 | NSV | Lotto | ||||||||||||||||||
NFGC-20-42 | 40.5 | 42.8 | 2.30 | 1.23 | Lotto | |||||||||||||||
And | 108.00 | 112.55 | 4.55 | 1.40 | Lotto | |||||||||||||||
NFGC-20-44 | 70.15 | 72.15 | 2.00 | 2.09 | Lotto | |||||||||||||||
And | 238.55 | 245.05 | 6.50 | 18.1 | Sunday | |||||||||||||||
NFGC-20-47 | 15.25 | 18.00 | 2.75 | 1.43 | Lotto | |||||||||||||||
And | 29.35 | 31.35 | 2.00 | 1.06 | Lotto | |||||||||||||||
And | 34.45 | 37.60 | 3.15 | 2.54 | Lotto | |||||||||||||||
And | 42.00 | 45.10 | 3.10 | 1.14 | Lotto | |||||||||||||||
NFGC-20-50 | 43.65 | 45.75 | 2.10 | 65.3 | Lotto | |||||||||||||||
NFGC-20-100 | 118.0 | 120.45 | 2.45 | 224.7 | Lotto | |||||||||||||||
NFGC-21-109 | 152.70 | 161.50 | 8.80 | 19.3 | Lotto | |||||||||||||||
Including | 154.20 | 157.40 | 3.20 | 51.3 | ||||||||||||||||
NFGC-21-115 | 180.70 | 189.10 | 8.40 | 20.3 | Lotto | |||||||||||||||
Including | 186.00 | 189.10 | 3.10 | 53.3 |
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
A plan map and coordinate table for Lotto drill holes reported to date are shown below:
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-17 | 302 | -46 | 354 | 658931 | 5428990 | |||||||||||||||
NFGC-20-20 | 300 | -45 | 190 | 658973 | 5428962 | |||||||||||||||
NFGC-20-22 | 300 | -45 | 214 | 658963 | 5428996 | |||||||||||||||
NFGC-20-24 | 300 | -45 | 258 | 658936 | 5428954 | |||||||||||||||
NFGC-20-27 | 300 | -45 | 465 | 658946 | 5428920 | |||||||||||||||
NFGC-20-31 | 300 | -45 | 258 | 658878 | 5428902 | |||||||||||||||
NFGC-20-35 | 300 | -45 | 240 | 658921 | 5428876 | |||||||||||||||
NFGC-20-39 | 300 | -45 | 164 | 658885 | 5429156 | |||||||||||||||
NFGC-20-42 | 300 | -45 | 177 | 658933 | 5429100 | |||||||||||||||
NFGC-20-44 | 300 | -45 | 294 | 658956 | 5429030 | |||||||||||||||
NFGC-20-47 | 300 | -45 | 98 | 658922 | 5428995 | |||||||||||||||
NFGC-20-50 | 300 | -45 | 92 | 658927 | 5428981 | |||||||||||||||
NFGC-21-100 | 300 | -45 | 258 | 658979 | 5428930 | |||||||||||||||
NFGC-21-109 | 300 | -45 | 252 | 659012 | 5428912 | |||||||||||||||
NFGC-21-115 | 300 | -45 | 225 | 659034 | 5428895 |
The orientation of the veining is uncertain and true widths are estimated to be in the 70% to 80% range.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Queensway Project – Plan Map of Current Drilling Program (Lotto/Sunday Zone – March 23, 2021)
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Queensway Project – Cross Section of Current Drilling Program (Lotto Zone – March 23, 2021)
Along with drilling at the Lotto Zone the company has focussed its drilling efforts at the Keats zone where a discovery hole in late 2019 (NFGC-19-01) was drilled. To date the company has completed 88 holes at Keats using multiple parallel exploration strategies. Initially the company planned and has conducted 10m step outs both along strike and dip of the discovery hole NFGC-19-01 and in parallel to this drilling, the Company is also conducting a 50m grid drilling program along roughly 950m of strike length and to vertical depths of 500m to test the geology and gold potential of the controlling geological structure, the Keats-Baseline fault.
Initial assay results from five drill holes at the Keats zones were reported in press release dated October 27, 2020, with further assay results reported on November 16, 2020; December 15, 2020; January 11, 2021; February 9, 2021; March 1, 2021; March 9, 2021; March 16, 2021; March 30, 2021; April 5, 2021; April 20, 2021; and April 27, 2021 representing fifty-nine drill holes.
The Keats zone continues to see a steady increase in both strike length and depth with latest step-out results reported on April 27, 2021 indicating the down plunge of the high-grade zone has now increased to 350m starting at the bedrock surface as shown in the long section below.
Logging of the core drilled to date along with assay results received so far indicate that the veining and high-grade gold mineralization demonstrates good continuity along strike and down dip.
Gold assay results highlight from the first fifty-nine holes drilled at the Keats Zone are shown in the table below.
- 19 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-20-18 | 92.0 | 99.9 | 7.90 | 24.1 | Keats Main | |||||||||||||
Including | 98.9 | 99.9 | 1.00 | 167.6 | ||||||||||||||
NFGC-20-19 | 89.65 | 108.5 | 18.85 | 31.2 | ||||||||||||||
Including | 96.0 | 107.25 | 11.25 | 50.7 | Keats Main | |||||||||||||
Including | 102.0 | 107.25 | 5.25 | 100.6 | ||||||||||||||
And | 151.0 | 152.9 | 1.90 | 4.40 | Keats FW | |||||||||||||
NFGC-20-21 | 101.65 | 120.0 | 18.35 | 15.8 | Keats Main | |||||||||||||
Including | 109.55 | 118.5 | 8.95 | 29.4 | ||||||||||||||
NFGC-20-23 | 82.65 | 124.0 | 41.35 | 22.3 | ||||||||||||||
Including | 93.65 | 108.2 | 14.55 | 57.4 | ||||||||||||||
Including | 93.65 | 94.0 | 0.35 | 1120 | Keats Main | |||||||||||||
And | 101.8 | 104.4 | 2.60 | 140.8 | ||||||||||||||
Including | 118.85 | 123.4 | 4.55 | 15.2 | ||||||||||||||
NFGC-20-25 | 80.0 | 85.7 | 5.70 | 1.5 | ||||||||||||||
And | 99.8 | 101.95 | 2.15 | 7.31 | Keats Main | |||||||||||||
Including | 101.65 | 101.95 | 0.30 | 25.8 | ||||||||||||||
NFGC-20-26 | 44.7 | 73.85 | 29.15 | 11.8 | ||||||||||||||
Including | 67.0 | 73.85 | 6.85 | 44.5 | Keats Main | |||||||||||||
Including | 73.5 | 73.85 | 0.35 | 824 | ||||||||||||||
And | 194.4 | 197.6 | 3.20 | 1.09 | Keats FW | |||||||||||||
And | 219.7 | 222.3 | 2.60 | 2.02 | ||||||||||||||
NFGC-20-28 | 88.5 | 93.0 | 4.50 | 1.64 | ||||||||||||||
And | 106.95 | 111.0 | 4.05 | 40.1 | Keats Main | |||||||||||||
Including | 109.4 | 110.4 | 1.00 | 119.8 | ||||||||||||||
NFGC-20-29 | 104.0 | 120.85 | 16.85 | 25.0 | ||||||||||||||
Including | 113.65 | 117.55 | 3.90 | 103.2 | Keats Main | |||||||||||||
NFGC-20-30 | 97.4 | 129.4 | 32.0 | 2.59 | ||||||||||||||
Including | 119.65 | 125.75 | 6.10 | 10.3 | Keats Main | |||||||||||||
Including | 120.25 | 122.25 | 2.00 | 26.1 | ||||||||||||||
NFGC-20-32 | 103.0 | 132.0 | 29.0 | 20.8 | ||||||||||||||
Including | 118.9 | 132.0 | 13.1 | 45.3 | Keats Main | |||||||||||||
Including | 119.9 | 125.35 | 5.45 | 82.7 | ||||||||||||||
NFGC-20-33 | 151.9 | 156.0 | 4.00 | 2.59 | ||||||||||||||
And | 164.4 | 172.2 | 7.80 | 1.78 | Keats Main | |||||||||||||
NFGC-20-34 | 109.4 | 152.6 | 43.2 | 2.39 | ||||||||||||||
Including | 120.1 | 122.45 | 2.35 | 29.3 | Keats Main | |||||||||||||
NFGC-20-36 | 75.4 | 77.4 | 2.00 | 7.22 | ||||||||||||||
And | 88.8 | 107.7 | 18.9 | 3.29 | ||||||||||||||
Including | 96.4 | 105.3 | 8.90 | 5.15 | Keats Main | |||||||||||||
And | 117.7 | 123.8 | 6.10 | 1.11 | ||||||||||||||
NFGC-20-37 | 9.0 | 19.3 | 10.3 | 25.0 | ||||||||||||||
And | 22.7 | 28.6 | 5.9 | 5.18 | ||||||||||||||
And | 32.8 | 40.7 | 7.9 | 2.82 | Keats Main | |||||||||||||
And | 43.8 | 45.8 | 2.0 | 13.2 | ||||||||||||||
And | 151.6 | 153.6 | 2.0 | 1.21 | Keats FW | |||||||||||||
NFGC-20-38 | 90.0 | 94.8 | 4.8 | 0.97 | ||||||||||||||
And | 101.5 | 103.8 | 2.3 | 1.13 | ||||||||||||||
And | 105.8 | 133.2 | 27.4 | 5.64 | Keats Main | |||||||||||||
Including | 105.8 | 111.6 | 5.8 | 19.8 | ||||||||||||||
And | 159.4 | 161.7 | 2.4 | 1.33 | Keats FW | |||||||||||||
NFGC-20-40A | 93.4 | 95.7 | 2.3 | 1.91 | Keats Main |
- 20 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019 |
And | 107.4 | 114.7 | 7.3 | 19.3 | |||||||||||||||
And | 120.5 | 123.4 | 2.9 | 1.73 | |||||||||||||||
And | 129.9 | 132.2 | 2.3 | 5.03 | |||||||||||||||
And | 144.5 | 146.8 | 2.3 | 3.75 | |||||||||||||||
And | 171.9 | 174.0 | 2.1 | 1.09 | Keats FW | ||||||||||||||
NFGC-20-41 | 11.7 | 22.1 | 10.4 | 22.5 | |||||||||||||||
Including | 13.0 | 16.7 | 3.70 | 58.9 | |||||||||||||||
And | 32.0 | 35.5 | 3.50 | 1.36 | Keats Main | ||||||||||||||
And | 45.0 | 60.9 | 15.9 | 31.4 | |||||||||||||||
Including | 49.3 | 55.6 | 6.30 | 67.7 | |||||||||||||||
NFGC-20-43 | 109.7 | 114.0 | 4.30 | 1.54 | |||||||||||||||
And | 119.8 | 138.0 | 18.2 | 10.0 | |||||||||||||||
Including | 122.3 | 130.0 | 7.70 | 20.7 | Keats Main | ||||||||||||||
And | 145.6 | 147.8 | 2.20 | 1.29 | |||||||||||||||
NFGC-20-45 | 22.5 | 25.0 | 2.5 | 2.1 | Keats HW | ||||||||||||||
And | 46.6 | 60.4 | 13.8 | 28.4 | |||||||||||||||
And | 68.0 | 71.3 | 3.3 | 20.6 | Keats Main | ||||||||||||||
And | 83.3 | 85.3 | 2.0 | 17.1 | |||||||||||||||
NFGC-20-46 | 92.8 | 95.0 | 2.2 | 7.32 | |||||||||||||||
And | 112.7 | 115.6 | 2.9 | 13.7 | |||||||||||||||
Including | 114.0 | 144.5 | 0.5 | 59.8 | Keats Main | ||||||||||||||
And | 133.5 | 135.5 | 2.0 | 5.23 | |||||||||||||||
NFGC-20-48 | 129.00 | 132.60 | 3.60 | 6.39 | |||||||||||||||
And | 141.00 | 143.20 | 2.20 | 1.15 | Keats Main | ||||||||||||||
And | 164.50 | 167.10 | 2.60 | 1.38 | Keats FW | ||||||||||||||
NFGC-20-49 | 175.90 | 180.85 | 4.95 | 5.55 | |||||||||||||||
Including | 177.70 | 178.70 | 1.00 | 21.2 | Keats FW | ||||||||||||||
NFGC-20-52 | 107.70 | 109.80 | 2.10 | 136.7 | |||||||||||||||
And | 114.40 | 128.5 | 14.10 | 31.5 | Keats Main | ||||||||||||||
And | 132.20 | 137.75 | 5.55 | 13.7 | |||||||||||||||
NFGC-20-53 | 20.6 | 23.4 | 2.8 | 1.07 | |||||||||||||||
And | 32.6 | 35.0 | 2.4 | 2.20 | |||||||||||||||
And | 53.4 | 55.9 | 2.5 | 2.59 | |||||||||||||||
And | 58.6 | 62.0 | 3.4 | 3.24 | Keats Main | ||||||||||||||
And | 70.0 | 74.3 | 4.3 | 1.83 | |||||||||||||||
And | 75.8 | 78.1 | 2.3 | 3.64 | |||||||||||||||
And | 90.0 | 92.4 | 2.4 | 4.72 | |||||||||||||||
NFGC-20-54 | 69.5 | 80.5 | 11.0 | 1.98 | |||||||||||||||
Including | 69.5 | 70.5 | 1.0 | 6.68 | |||||||||||||||
And | 85.4 | 94.1 | 8.7 | 2.02 | Keats Main | ||||||||||||||
Including | 85.4 | 85.9 | 0.5 | 18.9 | |||||||||||||||
NFGC-20-56 | 25.6 | 57.9 | 32.3 | 6.18 | |||||||||||||||
Including | 25.6 | 31.0 | 5.4 | 15.7 | Keats Main | ||||||||||||||
And | 62.3 | 68.7 | 6.4 | 3.52 |
- 21 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019 |
Including | 66.0 | 68.3 | 2.3 | 6.69 | |||||||||||||||
NFGC-20-57 | 69.70 | 73.45 | 3.75 | 12.88 | |||||||||||||||
Including | 71.00 | 73.45 | 2.45 | 19.25 | Keats Main | ||||||||||||||
And | 129.00 | 132.85 | 3.85 | 2.88 | |||||||||||||||
And | 142.10 | 144.45 | 2.35 | 1.79 | Keats FW | ||||||||||||||
And | 146.45 | 148.50 | 2.05 | 8.85 | |||||||||||||||
NFGC-20-60 | 136.90 | 160.35 | 23.45 | 2.44 | |||||||||||||||
Including | 136.90 | 140.30 | 3.40 | 8.46 | Keats Main | ||||||||||||||
NFGC-20-62 | NSR | Keats | |||||||||||||||||
NFGC-20-65 | 170.00 | 172.90 | 2.90 | 1.04 | Keats Main | ||||||||||||||
NFGC-20-67 | 123.90 | 125.90 | 2.00 | 10.26 | Keats Main | ||||||||||||||
NFGC-20-69 | 109.40 | 113.55 | 4.15 | 1.58 | |||||||||||||||
And | 122.20 | 127.85 | 5.65 | 4.21 | |||||||||||||||
Including | 122.20 | 125.15 | 2.95 | 6.16 | Keats Main | ||||||||||||||
And | 129.95 | 132.95 | 3.00 | 1.43 | |||||||||||||||
NFGC-20-70 | 56.40 | 67.50 | 11.10 | 1.89 | |||||||||||||||
Including | 61.80 | 62.40 | 0.60 | 12.15 | |||||||||||||||
And | 77.45 | 80.80 | 3.35 | 1.92 | Keats Main | ||||||||||||||
And | 92.75 | 95.25 | 2.50 | 3.80 | |||||||||||||||
NFGC-20-72 | 133.50 | 139.80 | 6.30 | 2.89 | |||||||||||||||
Including | 133.50 | 136.80 | 3.30 | 4.48 | Keats Main | ||||||||||||||
And | 143.40 | 147.00 | 3.60 | 1.50 | |||||||||||||||
And | 187.20 | 189.45 | 2.25 | 1.31 | Keats FW | ||||||||||||||
NFGC-20-73 | 25.80 | 28.00 | 2.20 | 7.28 | |||||||||||||||
Including | 26.55 | 27.00 | 0.45 | 30.1 | Keats Main | ||||||||||||||
And | 191.50 | 194.00 | 2.50 | 21.9 | |||||||||||||||
Including | 191.50 | 192.15 | 0.65 | 83.4 | Keats FW | ||||||||||||||
And | 292.40 | 293.75 | 1.35 | 2.74 | Keats FW | ||||||||||||||
NFGC-20-74 | 44.00 | 46.00 | 2.00 | 32.27 | |||||||||||||||
And | 49.15 | 70.50 | 21.35 | 3.36 | Keats Main | ||||||||||||||
And | 81.70 | 85.75 | 4.05 | 45.59 | |||||||||||||||
NFGC-21-78 | 102.00 | 105.70 | 3.70 | 2.43 | |||||||||||||||
And | 113.20 | 115.50 | 2.30 | 18.22 | Keats Main | ||||||||||||||
NFGC-21-79 | 107.35 | 113.80 | 6.45 | 1.00 | |||||||||||||||
And | 133.75 | 141.65 | 7.90 | 22.7 | Keats Main | ||||||||||||||
NFGC-21-80 | 49.45 | 88.50 | 39.05 | 25.8 | |||||||||||||||
Including | 62.70 | 72.80 | 10.10 | 58.5 | |||||||||||||||
And | 78.65 | 88.50 | 9.85 | 39.5 | Keats Main | ||||||||||||||
And | 93.15 | 95.45 | 2.30 | 41.6 | |||||||||||||||
NFGC-21-84 | 87.00 | 89.25 | 2.25 | 1.15 | |||||||||||||||
And | 102.40 | 106.50 | 4.10 | 1.31 | Keats Main | ||||||||||||||
And | 155.00 | 157.15 | 2.15 | 1.12 | Keats FW | ||||||||||||||
NFGC-21-85 | 108.45 | 111.40 | 2.95 | 49.41 | Keats Main | ||||||||||||||
NFGC-21-86 | 141.95 | 150.00 | 8.05 | 5.65 | Keats Main |
- 22 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019 |
And | 171.90 | 174.25 | 2.35 | 1.09 | |||||||||||||||
NFGC-21-87 | 4.70 | 9.35 | 4.65 | 27.77 | |||||||||||||||
And | 20.45 | 30.70 | 10.25 | 2.51 | Keats Main | ||||||||||||||
And | 79.00 | 81.00 | 2.00 | 2.03 | |||||||||||||||
NFGC-21-88 | 152.20 | 154.60 | 2.40 | 1.02 | Keats FW | ||||||||||||||
NFGC-21-90 | 20.00 | 28.05 | 8.05 | 2.45 | Keats Main | ||||||||||||||
And | 35.35 | 39.20 | 3.85 | 24.5 | |||||||||||||||
NFGC-21-97 | 135.00 | 137.65 | 2.65 | 1.31 | Keats HW | ||||||||||||||
And | 153.65 | 156.00 | 2.35 | 1.04 | |||||||||||||||
And | 162.65 | 167.00 | 4.35 | 1.21 | Keats Main | ||||||||||||||
And | 174.95 | 181.40 | 6.45 | 37.15 | |||||||||||||||
NFGC-21-101 | 180.85 | 189.30 | 8.45 | 17.87 | Keats Main | ||||||||||||||
NFGC-21-103 | 192.00 | 206.55 | 14.55 | 2.36 | |||||||||||||||
And | 216.90 | 219.50 | 2.60 | 2.02 | Keats Main | ||||||||||||||
And | 235.15 | 245.40 | 10.25 | 8.89 | |||||||||||||||
Including | 236.50 | 240.00 | 3.50 | 19.28 | |||||||||||||||
NFGC-21-104 | 214.5 | 225.9 | 11.4 | 29.1 | Keats Main | ||||||||||||||
And | 254.4 | 255.0 | 0.6 | 7.35 | |||||||||||||||
NFGC-21-106 | 218.75 | 227.35 | 8.60 | 3.59 | Keats Main | ||||||||||||||
Including | 220.70 | 223.20 | 2.50 | 9.49 | |||||||||||||||
And | 286.40 | 288.80 | 2.40 | 1.24 | Keats FW | ||||||||||||||
NFGC-21-111 | 229.00 | 238.20 | 9.20 | 1.48 | Keats Main | ||||||||||||||
And | 278.00 | 280.70 | 2.70 | 1.49 | |||||||||||||||
NFGC-21-113 | 47.00 | 49.55 | 2.55 | 12.52 | Keats Main | ||||||||||||||
NFGC-21-114 | 212.35 | 216.85 | 4.50 | 8.13 | Keats Main | ||||||||||||||
Including | 212.35 | 214.50 | 2.15 | 15.58 | |||||||||||||||
NFGC-21-118 | 211.15 | 224.80 | 13.65 | 61.8 | Keats Main | ||||||||||||||
Including | 212.10 | 213.05 | 0.95 | 565 | |||||||||||||||
NFGC-21-119 | 152.50 | 154.50 | 2.00 | 1.05 | Keats Main | ||||||||||||||
And | 176.20 | 183.15 | 6.95 | 15.57 | |||||||||||||||
And | 218.85 | 221.00 | 2.15 | 1.45 | Keats FW | ||||||||||||||
NFGC-21-122 | 8.10 | 10.00 | 1.90 | 24.75 | |||||||||||||||
And | 25.00 | 27.00 | 2.00 | 1.97 | Keats Main | ||||||||||||||
And | 34.70 | 49.60 | 14.90 | 69.15 | |||||||||||||||
Including | 34.70 | 43.85 | 9.15 | 106.46 | |||||||||||||||
NFGC-21-123 | 167.60 | 169.60 | 2.00 | 2.46 | Keats FW | ||||||||||||||
And | 260.00 | 262.50 | 2.50 | 8.41 | |||||||||||||||
NFGC-21-137 | 71.50 | 78.70 | 7.20 | 261.33 | Keats Main | ||||||||||||||
And | 87.50 | 92.50 | 5.00 | 4.13 | |||||||||||||||
And | 114.00 | 116.00 | 2.00 | 1.56 | Keats FW | ||||||||||||||
And | 135.00 | 137.00 | 2.00 | 3.45 | |||||||||||||||
NFGC-21-143 | 239.00 | 246.90 | 7.90 | 6.21 | |||||||||||||||
Including | 239.00 | 241.50 | 2.50 | 16.93 | Keats Main | ||||||||||||||
And | 256.45 | 268.00 | 11.55 | 46.95 | |||||||||||||||
Including | 257.45 | 265.90 | 8.45 | 63.71 | |||||||||||||||
And | 281.90 | 288.00 | 6.10 | 1.01 | |||||||||||||||
And | 324.00 | 326.00 | 2.00 | 1.12 | Keats FW |
- 23 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019 |
The orientation of the veining is uncertain and true widths are estimated to be in the 70% to 80% range.
A plan map and coordinate table for Keats drill holes press released to date are shown below:
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-18 | 300 | -45 | 278 | 658223 | 5427467 | |||||||||||||||
NFGC-20-19 | 300 | -45 | 154 | 658232 | 5427462 | |||||||||||||||
NFGC-20-21 | 300 | -45 | 190 | 658236 | 5427449 | |||||||||||||||
NFGC-20-23 | 300 | -45 | 185 | 658240 | 5427458 | |||||||||||||||
NFGC-20-26 | 300 | -45 | 269 | 658151 | 5427444 | |||||||||||||||
NFGC-20-25 | 300 | -45 | 147 | 658217 | 5427459 | |||||||||||||||
NFGC-20-28 | 300 | -45 | 150 | 658213 | 5427450 | |||||||||||||||
NFGC-20-29 | 300 | -45 | 186 | 658222 | 5427445 | |||||||||||||||
NFGC-20-30 | 300 | -45 | 167 | 658195 | 5427419 | |||||||||||||||
NFGC-20-32 | 300 | -45 | 269 | 658151 | 5427444 | |||||||||||||||
NFGC-20-33 | 300 | -45 | 297 | 658238 | 5427394 | |||||||||||||||
NFGC-20-34 | 300 | -45 | 213 | 658258 | 5427440 | |||||||||||||||
NFGC-20-36 | 300 | -45 | 150 | 658245 | 5427466 | |||||||||||||||
NFGC-20-37 | 300 | -45 | 344 | 658224 | 5427518 | |||||||||||||||
NFGC-20-38 | 300 | -45 | 176 | 658254 | 5427461 | |||||||||||||||
NFGC-20-40A | 300 | -45 | 204 | 658249 | 5427453 | |||||||||||||||
NFGC-20-41 | 300 | -45 | 195 | 658232 | 5427514 | |||||||||||||||
NFGC-20-43 | 300 | -45 | 182 | 658239 | 5427435 | |||||||||||||||
NFGC-20-45 | 300 | -45 | 164 | 658240 | 5427509 | |||||||||||||||
NFGC-20-46 | 300 | -45 | 169 | 658267 | 5427493 | |||||||||||||||
NFGC-20-48 | 300 | -45 | 198 | 658247 | 5427430 | |||||||||||||||
NFGC-20-49 | 300 | -45 | 234 | 658309 | 5427468 | |||||||||||||||
NFGC-20-52 | 300 | -45 | 192 | 658243 | 5427445 | |||||||||||||||
NFGC-20-53 | 300 | -45 | 188 | 658254 | 5427513 | |||||||||||||||
NFGC-20-54 | 300 | -45 | 198 | 658160 | 5427439 | |||||||||||||||
NFGC-20-56 | 300 | -45 | 118 | 658226 | 5427505 | |||||||||||||||
NFGC-20-57 | 300 | -45 | 150 | 658145 | 5427436 | |||||||||||||||
NFGC-20-60 | 300 | -45 | 200 | 658256 | 5427425 | |||||||||||||||
NFGC-20-62 | 300 | -45 | 218 | 658291 | 5427537 | |||||||||||||||
NFGC-20-65 | 300 | -45 | 266 | 658335 | 5427512 | |||||||||||||||
NFGC-20-67 | 300 | -45 | 189 | 658216 | 5427437 | |||||||||||||||
NFGC-20-69 | 300 | -45 | 187 | 658225 | 5427432 | |||||||||||||||
NFGC-20-70 | 300 | -45 | 192 | 658249 | 5427504 | |||||||||||||||
NFGC-20-72 | 300 | -45 | 189 | 658234 | 5427427 | |||||||||||||||
NFGC-20-73 | 300 | -45 | 297 | 658058 | 5427383 | |||||||||||||||
NFGC-20-74 | 300 | -45 | 238 | 658229 | 5427491 | |||||||||||||||
NFGC-21-78 | 300 | -45 | 168 | 658183 | 5427426 | |||||||||||||||
NFGC-21-79 | 300 | -45 | 192 | 658199 | 5427403 | |||||||||||||||
NFGC-21-80 | 300 | -45 | 200 | 658239 | 5427486 | |||||||||||||||
NFGC-21-84 | 300 | -45 | 170 | 658253 | 5427490 | |||||||||||||||
NFGC-21-85 | 300 | -45 | 157 | 658148 | 5427388 | |||||||||||||||
NFGC-21-86 | 300 | -45 | 231 | 658209 | 5427397 | |||||||||||||||
NFGC-21-87 | 300 | -45 | 125 | 658218 | 5427535 | |||||||||||||||
NFGC-21-88 | 300 | -45 | 256 | 658029 | 5427284 | |||||||||||||||
NFGC-21-90 | 300 | -45 | 182 | 658235 | 5427540 | |||||||||||||||
NFGC-21-97 | 300 | -45 | 225 | 658195 | 5427347 | |||||||||||||||
NFGC-21-101 | 300 | -45 | 221 | 658206 | 5427341 | |||||||||||||||
NFGC-21-103 | 300 | -45 | 261 | 658227 | 5427328 | |||||||||||||||
NFGC-21-104 | 300 | -45 | 255 | 658208 | 5427295 | |||||||||||||||
NFGC-21-106 | 300 | -45 | 326 | 658221 | 5427289 | |||||||||||||||
NFGC-21-111 | 300 | -45 | 297 | 658242 | 5427276 | |||||||||||||||
NFGC-21-113 | 300 | -45 | 143 | 658210 | 5427497 | |||||||||||||||
NFGC-21-114 | 300 | -45 | 264 | 658249 | 5427316 | |||||||||||||||
NFGC-21-118 | 300 | -45 | 633 | 658189 | 5427285 | |||||||||||||||
NFGC-21-119 | 300 | -45 | 279 | 658185 | 5427331 | |||||||||||||||
NFGC-21-122 | 300 | -45 | 140 | 658240 | 5427523 | |||||||||||||||
NFGC-21-123 | 120 | -45 | 723 | 657821 | 5427519 | |||||||||||||||
NFGC-21-137 | 300 | -45 | 152 | 658185 | 5427454 | |||||||||||||||
NFGC-21-143 | 300 | -45 | 343 | 658192 | 5427240 |
- 24 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019 |
Queensway Project – Plan Map of Drilling Program (Keats Zone -Apr 27, 2021)
- 25 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019 |
Queensway Project – Long Section of Drilling Program (Keats Zone -Apr 27, 2021)
QA/QC
True widths of the new exploration intercepts reported in this press release have yet to be determined but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cutoff of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in the MD&A was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019 |
NFG’s 2019 Drill Campaign
The 2019 diamond drilling program at the AFZ comprised 586 metres of HQ diameter core in four holes completed between October 28, 2019 and November 17, 2019. Holes NFGC-19-01 and NFGC-19-02 were drilled to target the Keats Zone where historical drilling and trenching suggested gold mineralization was to occur. Holes NFGC-19-03 and NFGC-19-04 were drilled from a single setup at the Dome Showing to further evaluate known gold mineralization. The 2019 drill program was successful in identifying gold mineralization along the AFZ at both the Keats and Dome showings.
Drilling along the JBP Fault Zone in 2019 was comprised of six holes totalling 1,400m between November 17, 2019 and December 14, 2019 targeting the Glass zone and extensions of the H-Pond zone. Holes NFGC-19-05, 07, 08, 09, 10 targeted mineralization along both the Glass and H-Pond corridors while NFGC-19-06 only tested the Glass vein system, drill hole locations are show in the figure and table below:
BHID | UTME(NAD27) | UTMN (NAD27) | ZPT | DIP | BRG | LENGTH (m) | |||||||||||||
NFGC-19-01 | 658148 | 5427245 | 93 | -43.6 | 302.19 | 199 | |||||||||||||
NFGC-19-02 | 658035 | 5427130 | 90 | -43.5 | 299.69 | 270 | |||||||||||||
NFGC-19-03 | 658632 | 5428486 | 85 | -44.7 | 0.39 | 64 | |||||||||||||
NFGC-19-04 | 658632 | 5428486 | 85 | -63.5 | 0.59 | 52 | |||||||||||||
NFGC-19-05 | 664842.5 | 5430309 | 85 | -44.7 | 302.69 | 274 | |||||||||||||
NFGC-19-06 | 664867 | 5430352.5 | 85 | -44.1 | 302.19 | 94.5 | |||||||||||||
NFGC-19-07 | 664891 | 5430400 | 85 | -44.6 | 300.99 | 248 | |||||||||||||
NFGC-19-08 | 664823 | 5430200 | 85 | -44.2 | 299.39 | 262 | |||||||||||||
NFGC-19-09 | 665093 | 5430660 | 85 | -44.2 | 300.89 | 299.6 | |||||||||||||
NFGC-19-10 | 665176 | 5430750 | 85 | -43.7 | 303.99 | 222.2 | |||||||||||||
TOTAL | 1985.3 |
The 2019 diamond drilling program at the AFZ was designed to further evaluate the gold mineralization and quartz veining along the east side of the Appleton Fault Trend specifically at the Keats and the Dome Showings. Drilling along the JBP Fault Zone in 2019 was comprised of six holes totalling 1,400m targeting the Glass zone and extensions of the H-Pond zone. Holes NFGC-19-05, 07, 08, 09, 10 targeted mineralization along both the Glass and H-Pond corridors while NFGC-19-06 only tested the Glass vein system.
NFGC-19-01 was planned to target 50 m vertically below historic drill hole LG08-48 at the Keats Zone. A significant gold mineralized zone was intercepted from 96 to 115 m grading 92.86g/t Au over 19.0 m including 285.2 g/t Au over 6.0 m containing considerable visible gold and wall rock sulphidation consisting of pyrite and lesser arsenopyrite. Within the quartz vein material traces of arsenopyrite, chalcopyrite and boulangerite were found. The zone was hosted in dark grey shale belonging to the Davidsville group and the quartz zone is spatially associated with a number of fault structures including one gouge zone up to 60cm in width. This is believed to be a second order structure to the Appleton fault and was intersected by all of the historic diamond drilling at the Keats zone but previously undocumented.
The vein intersection is the extension of the zone encountered in drill hole LG08-48 (50m above) and believed to be the extension of surface mineralization found in historical United Carina trench #3.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019 |
The quartz vein was notably vuggy and exhibiting textures associated with boiling events in epithermal gold zones. Possibly due to a flashing event within the larger mesothermal Appleton fault zone system.
A second mineralized fault structure was intersected at 177.5m with associated gold mineralization in lesser quartz stockwork from 177.5 to 180.0m depth grading 3.38g/t Au over 2.5m. Both fault zones intersected in the hole are believed to be secondary to the regional Appleton fault zone. Drilling did not continue in order to intersect the primary fault.
NFGC-19-02 also targeted the Keats zone located 160m south of NFGC-19-01 and targeting 50m vertically below historic drill hole LG99-12. This hole also intersected the second order fault structure found in NFGC-19-01 with associated narrower quartz veinlets and wall rock sulphidation (pyrite and arsenopyrite) and visible gold in quartz. The composite grade of the zone was 1.54 g/t Au over 12.0 m with one meter grading 5.45 g/t Au and containing visible gold. Exhibiting a similar width and structural control to NFGC-19-01.
Queensway Project – Plan Map of 2019 Drilling Program at the Keats Zone
NFGC-19-03 targeted the Dome showing main vein where historical drilling had previously intersected high grade gold mineralization. The main vein was intersected at a depth of 20.9 to 22.0 m with a second vein from 24.9 to 25.5 m and gave an overall composite grade of 16.52 g/t Au over 6.1m anchored by 162.5 g/t Au over 0.6 m.
NFGC-19-04 also targeted the Dome showing main vein and from the same setup but drilling at -60 degrees below NFGC-19-03; this hole intersected the main Dome vein from 28.3 to 29.7 m noting visible gold on the margin of the vein. This gave a composite average of 1.14 g/t Au over 8.0 m including one meter grading 4.61 g/t Au.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019 |
At the Dome showing visible gold mineralization appears to be primary confined to the margin of the vein. Of particular note was the apparent vuggy nature of the quartz and similarity to the veining intersected at the Keats zone suggestive that the emplacement mechanisms were similar.
NFGC-19-05, 06, 07, 08 were all drilled to target the Glass vein system which was discovered in 2017 and excavated by NFG in 2017 and again in 2018. All four holes were targeted to intersect the Glass vein system at shallow depths (<25m). The Glass vein system is believed to be a parallel vein system to the H-Pond zone approximately 100m to the west and drill holes NFGC-19-05, 07 and 08 were extended to intersect both vein systems.
The Glass vein array was noted in holes NFGC-19-05, 06 and 08 but gave poor gold results and visible mineralization was very limited.
NFGC-19-05 was successfully intersected a broad vein intercept within the H-Pond zone from 231.0 to 242.0m grading 2.35 g/t over 11.0 m including 6.73 g/t Au over 3.0 m as well as a second vein intersection from 268.0 to 269.0m grading 2.75 g/t Au over 1.0 m. This intercept has extended the known mineralized extents of the H-Pond zone by roughly 150 m along strike. The vein system was marked by significant iron-carbonate alteration zone. This is also one of the deepest intersections of the H-Pond zone to date.
NFGC-19-06, 07 and 08 failed to intersect any significant mineralization.
NFGC-19-09, 10 were both drilled along strike of the H-Pond and Glass vein systems along the JBPDZ and drilling in an area with very high gold in till results (1744 zone) and a significant number of visible gold bearing float samples which were interpreted to be derived from the JBPDZ. Both holes were successful in intersecting new vein systems as shown in figures below. The broad quartz intercept in NFGC-19-09 shows a nearly identical alteration and sulphide pattern to the intercept in NFGC-19-05 from the H-Pond zone. The intercept in NFGC-19-09 is believed to be an extension of the H-Pond by roughly 500m along strike. NFGC-19-09 intersected 4.39 g/t Au over 9.0 metres including 17.45 g/t Au over 2.0 metres from the well altered vein set thought to be the extension of the H-Pond zone. An intercept near the top of NFGC-19-10 with unknown correlation to NFGC-19-09 intersected 1.07 g/t Au over 4.0 metres and several lesser zones.
The 2019 drilling campaign was successful in identifying auriferous quartz veined zones of sufficient size, tenor and textural characteristics to warrant additional exploration. Based on the drill results to date, the Appleton Fault Trend has potential to host an Epizonal style Orogenic gold deposit with mineralization styles similar to those of the Fosterville Mine in Australia. The occurrence of vuggy veins with free gold and a blend of antimony mineral species including stibnite and boulangerite suggest a flash boiling event on a near mesothermal orogenic gold system such as seen at Fosterville.
Significant composite gold assay results are shown in the table below; the true widths of the mineralization in the below table is not known but estimated to be from 60-80% of the down hole composite width based on intersection angles and correlation to historical drilling.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019 |
2019 Diamond Drill Hole Significant Gold Composite Intercepts
Hole ID | From | To | Length(m) | Au (g/t) | Zone | |||||||||||||||
NFGC-19-01 | 83.0 | 83.7 | 0.7 | 2.46 | Keats | |||||||||||||||
NFGC-19-01 | 95.0 | 115.5 | 20.5 | 86.17 | ||||||||||||||||
incl | 96.0 | 115.0 | 19.0 | 92.86 | Keats | |||||||||||||||
incl | 105.0 | 111.0 | 6.0 | 285.20 | ||||||||||||||||
NFGC-19-01 | 117.5 | 118.5 | 1.0 | 1.56 | Keats | |||||||||||||||
NFGC-19-01 | 146.5 | 147.5 | 1.0 | 1.30 | Keats | |||||||||||||||
NFGC-19-01 | 177.5 | 180.0 | 2.5 | 3.38 | Keats | |||||||||||||||
NFGC-19-02 | 142.0 | 154.0 | 12.0 | 1.54 | Keats | |||||||||||||||
incl | 142.0 | 143.0 | 1.0 | 5.45 | ||||||||||||||||
NFGC-19-02 | 253.0 | 254.0 | 1.0 | 1.07 | Keats | |||||||||||||||
NFGC-19-03 | 20.4 | 26.5 | 6.1 | 16.52 | Dome | |||||||||||||||
incl | 20.9 | 21.5 | 0.6 | 162.50 | ||||||||||||||||
NFGC-19-04 | 26.0 | 34.0 | 8.0 | 1.14 | Dome | |||||||||||||||
incl | 29.0 | 30.0 | 1.0 | 4.61 | ||||||||||||||||
NFGC-19-05 | 231.0 | 242.0 | 11.0 | 2.35 | H-Pond | |||||||||||||||
incl | 231.0 | 234.0 | 3.0 | 6.73 | ||||||||||||||||
NFGC-19-05 | 268.0 | 269.0 | 1.0 | 2.75 | H-Pond | |||||||||||||||
NFGC-19-06 | NSV | |||||||||||||||||||
NFGC-19-07 | NSV | |||||||||||||||||||
NFGC-19-08 | NSV | |||||||||||||||||||
NFGC-19-09 | 15.5 | 16.5 | 1.0 | 1.65 | H-Pond | |||||||||||||||
NFGC-19-09 | 120.0 | 122.0 | 2.0 | 1.13 | H-Pond | |||||||||||||||
NFGC-19-09 | 162.0 | 171.0 | 9.0 | 4.39 | H-Pond | |||||||||||||||
incl | 165.0 | 167.0 | 2.0 | 17.45 | H-Pond | |||||||||||||||
NFGC-19-10 | 22.0 | 26.0 | 4.0 | 1.07 | H-Pond | |||||||||||||||
NFGC-19-10 | 66.0 | 68.0 | 2.0 | 1.59 | H-Pond | |||||||||||||||
NFGC-19-10 | 180.0 | 185.0 | 5.0 | 0.62 | H-Pond |
2020 Airborne Gravity Survey
In March of 2020, NFG contracted CGG Canada Services Ltd. based in Ottawa, Ontario to conduct a 1,705 km HeliFALCON Airborne Gravity Gradiometer and Aeromagnetic Survey over the licenses in the QWN license group. This highly advanced gravity and magnetic system has been deployed by the Company to further aid in the definition of geological and structural controls of mineralization.
After post processing the final data files were received in late April 2020. This data is currently under interpretation by a contract geophysicist to better define structures, geology and potential mineral target areas.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Queensway Project – Vertical Gravity GD Plan View
Queensway Project – Vertical Gravity Gradient GDD Plan View
- 31 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Lucky Strike Project, Ontario
The Lucky Strike Project is located 10 km north of Larder Lake, Ontario and covers favourable and underexplored structural corridors associated with the Larder Cadillac Deformation Zone.
The project is comprised of 639 single cell un-patented mining claims.
Land History
The current mineral cells comprising the Lucky Strike Project were acquired from the completion of two option agreements, one purchase agreement and online staking.
On May 27th, 2016 the Company optioned the primary Lucky Strike Project property from Ashley Gold Mines Ltd. which was further amended in May 2019 and fully executed in November 2019. Under the terms of the agreement the Company paid $115,000 and issued common shares equivalent to $80,000. The option agreement included an underlying royalty payable to Wallbridge mining covers some of the claims with most of the claims carrying no NSR.
On July 26th, 2017 the Company optioned the Vallillee extension claims west of the primary Lucky Strike land package and this option agreement was fully executed October 2018. Under the terms of the agreement the Company paid $40,000 and issued a 2% NSR in favour of the optionors.
In April 2020, the Company staked an additional 70 unpatented mining cells on the west side of the Lucky Strike Project. These lands carry no NSR.
On May 7th, 2020, the Company completed a claim purchase agreement with Big Bar Gold to purchase 21 unpatented mining claim cells adjacent to the east of the Lucky Strike Project. Under the terms of the agreement the Company paid $25,000. The claims carry no NSR.
Lucky Strike Project – Project Location map, fault systems and Adjacent Projects
- 32 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Environmental and Exploration Permitting
The Company was issued an exploration plan by the Ontario MNDM on July 13, 2017, to cover exploration activities including mechanized trenching and mechanized diamond drilling and this permit is set to expire in July 2020. Application was made in May 2020 for new permits to cover mechanized trenching, mechanized diamond drilling and approval is pending.
Project Geology
The Lucky Strike Project is covered by the Lower Blake River Group which are dominated by intermediate to mafic, massive volcanic flows. The volcanic flows have been intruded by diorite-gabbro intrusions which are up to 7 kilometres by 1.5 kilometre in size. In the Walsh-FP area a syenite-syenite porphyry intrudes the mafic-intermediate volcanics and hosts the gold-bearing quartz-ankerite veins of the Walsh Mine. The long axis of this syenite intrusion strikes approximately north-south and extends for 3.5 kilometres on the property and another 3 kilometres south of the property and is generally 0.5 kilometres wide. Two major regional faults cross the property, the Misema-Misty Lake Fault and the Mulven Fault, striking roughly in a northeast-southwest direction. These structures have been speculated as being as a continuation of the Kirkland Main Break Fault system which hosted the seven historic gold mines of the Kirkland Lake Gold camp. The Victoria Creek Deformation Zone, possibly a splay off the Misema-Misty Lake Fault and a control on the Victoria Creek and Upper Beaver Mines, lies just south of the property with splay structures extending onto the property.
- 33 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
The schedules below summarize the carrying costs of acquisition and exploration costs incurred to date for each exploration and evaluation asset that the Company is continuing to explore as at December 31, 2020 and December 31, 2019:
Newfoundland | ||||||||||||||||
Queensway | Other | Ontario | Total | |||||||||||||
Year ended December 31, 2020 | $ | $ | $ | $ | ||||||||||||
Exploration and evaluation assets | ||||||||||||||||
Balance as at December 31, 2019 | 658,700 | 16,500 | 425,516 | 1,100,716 | ||||||||||||
Additions | ||||||||||||||||
Acquisition costs | 75,000 | - | 25,000 | 100,000 | ||||||||||||
Staking costs | 37,230 | 2,100 | 3,600 | 42,930 | ||||||||||||
Disposal of exploration and evaluation assets | (75,000 | ) | (2,750 | ) | - | (77,750 | ) | |||||||||
Impairment of exploration and evaluation assets | (10,000 | ) | (2,750 | ) | (153,912 | ) | (163,912 | ) | ||||||||
Balance as at December 31, 2020 | 685,930 | 13,100 | 300,204 | 999,234 | ||||||||||||
Exploration and evaluation expenditures | ||||||||||||||||
Cumulative exploration expense - December 31, 2019 | 2,633,775 | - | 837,133 | 3,470,908 | ||||||||||||
Assays | 848,000 | 963 | 209,159 | 1,058,122 | ||||||||||||
Drilling | 2,560,406 | - | - | 2,560,406 | ||||||||||||
Geochemistry | - | - | 5,330 | 5,330 | ||||||||||||
Geophysics | 838,235 | - | - | 838,235 | ||||||||||||
Office & general | 47,130 | 499 | 714 | 48,343 | ||||||||||||
Property taxes, mining leases and rent | 46,217 | - | 5,812 | 52,029 | ||||||||||||
Reclamation | 163,598 | - | - | 163,598 | ||||||||||||
Salaries & consulting | 1,801,863 | 37,870 | 115,985 | 1,955,718 | ||||||||||||
Supplies & equipment | 879,816 | 6,470 | 80,803 | 967,089 | ||||||||||||
Travel & accommodations | 225,550 | 49 | 150 | 225,749 | ||||||||||||
Trenching | 231,635 | - | 31,865 | 263,500 | ||||||||||||
Exploration cost recovery | (30,680 | ) | - | - | (30,680 | ) | ||||||||||
7,611,770 | 45,851 | 449,818 | 8,107,439 | |||||||||||||
Cumulative exploration expense – December 31, 2020 | 10,245,545 | 45,851 | 1,286,951 | 11,578,347 |
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Newfoundland | ||||||||||||||||
Queensway | Other | Ontario | Total | |||||||||||||
Year ended December 31, 2019 | $ | $ | $ | $ | ||||||||||||
Exploration and evaluation assets | ||||||||||||||||
Balance as at December 31, 2018 | 276,330 | 107,835 | 293,516 | 677,681 | ||||||||||||
Additions | ||||||||||||||||
Acquisition costs | 382,370 | - | 132,000 | 514,370 | ||||||||||||
Impairment of exploration and evaluation assets | - | (91,335 | ) | - | (91,335 | ) | ||||||||||
Balance as at December 31, 2019 | 658,700 | 16,500 | 425,516 | 1,100,716 | ||||||||||||
Exploration and evaluation expenditures | ||||||||||||||||
Cumulative exploration expense - December 31, 2018 | 1,982,032 | - | 831,337 | 2,813,369 | ||||||||||||
Assays | 37,456 | - | 1,937 | 39,393 | ||||||||||||
Drilling | 250,260 | - | - | 250,260 | ||||||||||||
Geophysics | 153,934 | - | - | 153,934 | ||||||||||||
Property taxes, mining leases and rent | 45,500 | - | 3,859 | 49,359 | ||||||||||||
Salaries & consulting | 92,831 | - | - | 92,831 | ||||||||||||
Supplies & equipment | 102,112 | - | - | 102,112 | ||||||||||||
Travel & accommodations | 9,350 | - | - | 9,350 | ||||||||||||
Exploration cost recovery | (39,700 | ) | - | - | (39,700 | ) | ||||||||||
651,743 | - | 5,796 | 657,539 | |||||||||||||
Cumulative exploration expense – December 31, 2019 | 2,633,775 | - | 837,133 | 3,470,908 |
Overall Performance and Results of Operations
Total assets increased to $73,536,928 at December 31, 2020, from $9,355,036 at December 31, 2019, primarily as a result of an increase in cash of $40,394,487 and investments of $20,975,060, which were received from a private placement financing completed in March 2020, and as consideration for the sale of exploration and evaluation assets in December 2020. The most significant assets at December 31, 2020 were cash of $47,731,125 (December 31, 2019: $7,336,638), investments of $21,089,997 (December 31, 2019: $114,937), property, plant and equipment of $1,377,129 (December 31, 2019: $29,149), prepaid expenses and deposits of $1,258,203 (December 31, 2019: $436,436), and exploration and evaluation assets of $999,234 (December 31, 2019: $1,100,716). Cash increased by $40,394,487 during the year ended December 31, 2020 as a result of an initial public offering completed in August 2020 for gross proceeds of $31,395,000, private placement financings completed in June 2020 for gross proceeds of $7,118,196, and proceeds received from the exercises of warrants of $12,721,057 and stock options of $7,036,624, partially offset by cash used in operating activities of $13,218,539, purchases of property, plant and equipment of $ 1,446,440 and share issuance costs of $3,032,606 in connection with the initial public offering and private placement financings.
- 35 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Year ended December 31, 2020 and 2019
During the year ended December 31, 2020, loss from operating activities increased by $34,421,879 to $38,347,288 compared to $3,925,409 for the year ended December 31, 2019. The increase in loss from operating activities is largely due to:
- | An increase of $7,449,900 in exploration and evaluation expenditures. Exploration and evaluation expenditures were $8,107,439 for the year ended December 31, 2020 compared to $657,539 for the year ended December 31, 2019. The Company initiated a 100,000 meter diamond drilling program and completed approximately 13,400 meters of drilling in 66 holes as well as completed a 1,705 km airborne gravity survey, trenching, structural analysis, prospecting, till sampling and geological mapping at its Queensway Project during the year ended December 31, 2020 compared to the completion of a diamond drill program comprised of 10 holes totalling 1,986 meters and machine learning analysis of geophysical data at its Queensway Project during the year ended December 31, 2019. |
- | An increase of $24,326,807 in share-based compensation. Share-based compensation was $26,457,335 for the year ended December 31, 2020 compared to $2,130,528 for the year ended December 31, 2019. A total of 15,492,500 fully vested stock options with a value of $26,457,335 were granted during the year ended December 31, 2020 compared to 5,605,000 fully vested stock options granted during the year ended December 31, 2019. |
- | An increase of $960,714 in salaries and consulting fees. Salaries and consulting fees were $1,948,113 for the year ended December 31, 2020 compared to $987,399 for the year ended December 31, 2019. The increase is due to increased executive management levels and related compensation paid to key management personnel during the year ended December 31, 2020. |
- | An increase of $758,421 in corporate development and investor relations. Corporate development and investor relations was $758,421 for the year ended December 31, 2020 compared to $Nil for the year ended December 31, 2019. The Company undertook a greater amount of activities relating to promotion of the Company’s projects during the year ended December 31, 2020 compared to no similar activities undertaken during the year ended December 31, 2019. |
- | An increase of $602,595 in professional fees. Professional fees were $677,243 for the year ended December 31, 2020 compared to $74,648 for the year ended December 31, 2019. The increase is due to higher legal fees incurred as a result of increased corporate activity and in relation to a proposed transaction to have all of the issued and outstanding shares of the Company acquired by Mexican Gold Mining Corp. The proposed transaction with Mexican Gold Corp. was terminated by mutual agreement during the year ended December 31, 2020. |
Other items
For the year ended December 31, 2020, other income was $5,812,849 compared to other expenses of $94,623 for the year ended December 31, 2019. The $5,907,472 change is largely due to:
- | An increase of $4,384,953 in gain on sale of exploration and evaluation assets. Gain on sale of exploration and evaluation assets was $4,384,953 for the year ended December 31, 2020 compared to $Nil for the year ended December 31, 2019. The increase is due to the sale of certain Newfoundland exploration and evaluation assets for non-cash consideration comprised of investments with a fair value of $4,462,703 during the year ended December 31, 2020. |
- 36 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
- | An increase of $1,772,188 in settlement of flow-through share premium. Settlement of flow-through share premium was $1,772,188 for the year ended December 31, 2020 compared to $Nil for the year ended December 31, 2019. The Company incurred $6,443,941 of qualifying Canadian exploration expenses and derecognized $1,772,188 of its flow-through share premium liability during the year ended December 31, 2020. |
- | An increase of $342,109 in net change in unrealized loss on investments. Net change in unrealized loss on investments was $223,754 for the year ended December 31, 2020 compared to an unrealized gain of $118,355 for the year ended December 31, 2019. The increase is due to changes in the fair values of equity investments held at December 31, 2020. |
- | An increase of $75,327 in impairment of exploration and evaluation assets. Impairment of exploration and evaluation assets was $166,662 for the year ended December 31, 2020 compared to $91,335 for the year ended December 31, 2019. The increase is due to impairment recognized on certain Newfoundland and Ontario properties that the Company is no longer continuing to explore during the year ended December 31, 2020. |
The Company recorded loss and comprehensive loss of $32,534,439 or $0.29 basic and diluted loss per share for the year ended December 31, 2020 (December 31, 2019: $4,020,032 or $0.07 basic and diluted loss per share).
SELECT ANNUAL INFORMATION
Selected annual information from the audited financial statements for the years ended December 31, 2020, 2019, and 2018 is presented in the table below. The financial data below has been prepared in accordance with IFRS and is reported in Canadian dollars.
December 31, | December 31, | December 31, | ||||||||||
2020 | 2019 | 2018 | ||||||||||
Selected Annual Financial Information | $ | $ | $ | |||||||||
Total Assets | 73,536,928 | 9,355,036 | 1,783,497 | |||||||||
Operating expenses | (3,782,514 | ) | (1,137,342 | ) | (795,279 | ) | ||||||
Share-based compensation | (26,457,335 | ) | (2,130,528 | ) | (122,361 | ) | ||||||
Exploration and evaluation expenditures | (8,107,439 | ) | (657,539 | ) | (1,742,415 | ) | ||||||
Impairment of exploration and evaluation assets | (166,662 | ) | (91,335 | ) | (71,755 | ) | ||||||
Net realized (loss) on disposal of investments | - | (120,734 | ) | (216,570 | ) | |||||||
Net change in unrealized (losses) gains on investments | (223,754 | ) | 118,355 | (699,231 | ) | |||||||
Gain on sale of exploration and evaluation assets | 4,384,953 | - | 2,300,840 | |||||||||
Net loss comprehensive loss | (32,534,439 | ) | (4,020,032 | ) | (1,334,928 | ) | ||||||
Loss per share – basic and diluted | (0.29 | ) | (0.07 | ) | (0.02 | ) |
(1) Operating expenses is comprised of corporate development & investor relations, depreciation, office & sundry, professional fees, salaries and consulting, transfer agent & regulatory fees, and travel.
- 37 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Three months ended December 31, 2020 and 2019
During the three months ended December 31, 2020, loss from operating activities increased by $20,593,940 to $23,705,633 compared to $3,111,693 for the three months ended December 31, 2019. The increase in loss from operating activities is largely due to:
- | An increase of $4,175,097 in exploration and evaluation expenditures. Exploration and evaluation expenditures were $4,552,196 for the three months ended December 31, 2020 compared to exploration and evaluation expenditures of $377,099 for the three months ended December 31, 2019. The Company continued its 100,000 meter diamond drilling program during the three months ended December 31, 2020 and completed approximately 10,450 meters of drilling in 51 holes, and incurred higher salaries and consulting fees, and supplies & equipment costs due to an increase in exploration activity at its Queensway Project compared to completion of a diamond drilling program comprised of 10 holes totalling 1,986 meters drilled at its Queensway project during the three months ended December 31, 2019. |
- | An increase of $15,809,093 in share-based compensation. Share-based compensation was $17,939,621 for the three months ended December 31, 2020 compared to $2,130,528 for the three months ended December 31, 2019. A total of 6,267,500 fully vested stock options with a value of $17,939,621 were granted during the three months ended December 31, 2020 compared to 5,605,000 fully vested stock options granted during the three months ended December 31, 2019. |
Other items
For the three months ended December 31, 2020, other expenses were $1,934,089 compared to other income of $29,109 for the three months ended December 31, 2019. The $1,963,198 change is largely due to:
- | An increase of $7,463,161 in net change in unrealized loss on investments. Net change in unrealized loss on investments was $7,386,849 for the three months ended December 31, 2020 compared to $76,312 in unrealized gain on investments for the three months ended December 31, 2019. The increase is due to changes in the fair values of equity investments held at December 31, 2020. |
The increase was partially offset by the following:
- | An increase of $4,384,953 in gain on sale of exploration and evaluation assets. Gain on sale of exploration and evaluation assets was $4,384,953 for the three months ended December 31, 2020 compared to $Nil for the three months ended December 31, 2019. The increase is due to the sale of certain Newfoundland exploration and evaluation assets for non-cash consideration comprised of investments with a fair value of $4,462,703 during the three months ended December 31, 2020. |
- | An increase of $1,185,090 in settlement of flow-through share premium. Settlement of flow-through share premium was $1,185,090 for the three months ended December 31, 2020 compared to $Nil for the three months ended December 31, 2019. The Company incurred $4,309,165 of qualifying Canadian exploration expenses and derecognized $1,185,090 of its flow-through share premium liability during the three months ended December 31, 2020. |
The Company recorded loss and comprehensive loss of $25,639,722 or $0.18 basic and diluted loss per share for the three months ended December 31, 2020 (December 31, 2019: $3,082,583 or $0.05 basic and diluted loss per share).
- 38 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Summary of Quarterly Results
2020 | 2019 | |||||||||||||||||||||||||||||||
Dec. 31 | Sep. 30 | Jun. 30 | Mar. 31 | Dec. 31 | Sep. 30 | Jun. 30 | Mar. 31 | |||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Revenues | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Income (loss) and comprehensive income (loss) for the period | (25,639,722 | )(2) | (10,986,378 | )(3) | 10,700,940 | (4) | (6,609,279 | )(5) | (3,082,583 | )(6) | (85,022 | )(7) | (355,709 | )(8) | (496,717 | ) | ||||||||||||||||
Earnings (loss) per Common Share Basic(1) | (0.18 | ) | (0.09 | ) | 0.11 | (0.08 | ) | (0.05 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | |||||||||||||||||
Earnings (loss) per Common Share Diluted(1) | (0.18 | ) | (0.09 | ) | 0.09 | (0.08 | ) | (0.05 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) |
(1) | Per share amounts are rounded to the nearest cent, therefore aggregating quarterly amounts may not reconcile to year-to- date per share amounts. | |
(2) | Increase of loss and comprehensive loss from prior quarter primarily driven by an increase in share-based compensation of $12,454,708, net change in unrealized losses on investments of $4,854,539, and exploration and evaluation expenditures of $2,298,723, partially offset by an increase in gain on sale of exploration and evaluation assets of $4,384,953, amortization of flow-through premium liability of $699,109, and a decrease of salaries and consulting fees of $217,685. | |
(3) | Increase of loss and comprehensive loss from prior quarter primarily driven by an increase in net change in unrealized losses on investments of $17,431,256, share-based compensation of $2,452,112, exploration and evaluation expenditures of $1,683,057, salaries and consulting fees of $372,083, and corporate development and investor relations of $159,108, partially offset by amortization of flow-through premium liability of $384,864. | |
(4) | Decrease from prior quarter primarily driven by an increase in net change in unrealized gains on investments of $20,102,487, amortization of flow-through premium liability of $101,117, and a decrease in exploration and evaluation expenditures of $160,937, partially offset by an increase in share-based compensation of $3,032,801. | |
(5) | Increase from prior quarter primarily driven by increases in professional fees of $104,545, exploration and evaluation expenditures of $354,254 and net change in unrealized losses on investments of $5,279,853, partially offset by a decrease in share-based compensation of $2,130,528. | |
(6) | Increase from prior quarter primarily driven by increases in salaries and consulting fees of $407,399, share-based compensation of $2,130,528, professional fees of $71,652, exploration and evaluation expenditures of $390,984 and impairment of exploration and evaluation assets of $46,335 partially offset by an increase in net change in unrealized gain on investments of $74,854. | |
(7) | Decrease from prior quarter primarily driven by decrease in salaries and consulting fees of $142,500, exploration and evaluation expenditures of $68,678 and impairment of exploration and evaluation assets of $45,000. | |
(8) | Decrease from prior quarter primarily driven by a decrease in exploration and evaluation expenditures of $184,723. |
Liquidity and Capital Resources
As at December 31, 2020, the Company had cash of $47,731,125 to settle current liabilities of $635,083.
The Company does not currently have a recurring source of revenue and has historically incurred negative cash flows from operating activities. As at December 31, 2020, the Company has working capital of $70,525,482 consisting primarily of cash, investments, prepaid expenses and deposits and sales taxes recoverable. The Company’s exploration and evaluation assets presently have no proven or probable reserves, and on the basis of information to date, it has not yet determined whether these properties contain economically recoverable resources.
The recoverability of amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production.
The sources of funds currently available to the Company for its acquisition and exploration projects are solely due from equity financing.
The Company does not have bank debt or banking credit facilities in place as at the date of this report.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
April 2021 Financing – Net Proceeds of $14,474,276
On April 8, 2021, the Company completed a non-brokered private placement financing of 2,957,000 flow-through common shares at a price of $5.25 per common share for gross proceeds of $14,999,250. Finders’ fees paid were $524,974 in cash. The premium received on the flow-through shares issued was determined to be $1,971,330.
Intended Use of | Over/(Under)- | ||||||||
Proceeds | Actual Use of | Expenditure at | |||||||
(Estimated) | Proceeds | March 31, 2021 | |||||||
Uses of Funds: | $ | $ | $ | ||||||
Queensway Project work program | 14,999,250 | - | (14,999,250 | ) | |||||
Total Uses | 14,999,250 | - | (14,999,250 | ) |
August 2020 Initial Public Offering – Net Proceeds of $28,488,581
On August 11, 2020, the Company completed an initial public offering of 21,000,000 common shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 14, 2020, its agents exercised their overallotment option in full to offer and sell an additional 3,150,000 common shares for gross proceeds of $4,095,000. The Company paid share issuance costs of $2,906,419 in cash and issued 1,379,768 agents’ warrants with a fair value of $771,769. The agents’ warrants are exercisable into common shares of the Company at $1.30 for 12 months from the date of issue in connection with the initial public offering.
Intended Use of | Over/(Under)- | ||||||||||
Proceeds | Actual Use of | Expenditure at | |||||||||
(Estimated) | Proceeds | December 31, 2020 | |||||||||
Uses of Funds: | $ | $ | $ | ||||||||
Queensway Project work program | 21,735,000 | - | (21,735,000 | ) | |||||||
General and administrative expenses | 4,505,000 | - | (4,505,000 | ) | |||||||
Working Capital to fund ongoing operations | 5,155,000 | - | (5,155,000 | ) | |||||||
Total Uses | 31,395,000 | - | (31,395,000 | ) |
June 2020 Financings – Net Proceeds of $6,992,009
On June 4, 2020, the Company completed a non-brokered private placement financing of 3,994,597 flow-through common shares at a price of $1.50 per common share for gross proceeds of $5,991,896. Finders’ fees paid were $69,394 in cash and the issuance of 64,282 warrants exercisable into common shares of the Company at $1.50 per share for two years from date of issue with a fair value of $25,912. The premium received on the flow-through shares issued was determined to be $1,690,704.
On June 10, 2020, the Company completed a non-brokered private placement financing of 866,385 flow-through common shares at a price of $1.30 per common share for gross proceeds of $1,126,300. Finders’ fees paid were $56,793 in cash and the issuance of 43,582 warrants exercisable into common shares of the Company at $1.30 per share for two years from the date of issue with a fair value of $16,271. The premium received on the flow-through shares issued was determined to be $259,915.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | December 31, 2020 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Queensway Project work program | 7,118,196 | 6,443,941 | (674,255 | ) | ||||||||
Total Uses | 7,118,196 | 6,443,941 | (674,255 | ) |
The Company used $6,443,941 of the proceeds for qualifying Canadian exploration expenses at its Queensway project during the year ended December 31, 2020.
Prior Financings
November 2019 Financing – Net Proceeds of $8,000,000
In November 2019, the Company completed a non-brokered private placement of 16,000,000 units at a price of $0.50 per unit for total proceeds of $8,000,000. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase an additional common share at a price of $0.75 per share for three years from the issuance date. The Company intends to use these proceeds towards continued exploration work at its Queensway Project, general and administrative expenditures and working capital purposes to fund ongoing operations.
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | December 31, 2020 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Queensway Project work program | 3,000,000 | 3,000,000 | - | |||||||||
General and administrative expenses | 2,000,000 | 2,000,000 | - | |||||||||
Working capital to fund ongoing operations | 3,000,000 | 2,421,997 | (578,003 | ) | ||||||||
Total Uses | 8,000,000 | 7,421,997 | (578,003 | ) |
The Company used $532,231 of the proceeds towards the Company’s diamond drill program, which commenced in November 2019 and comprised 10 holes totalling 1,986 meters drilled, $565,500 was used towards the Company’s airborne gravity survey completed during Q1 2020, and $3,228,995 was used towards exploration expenditures at its Queensway Project. The Company used $2,000,000 of the proceeds for general and administrative expenditures related to consulting and executive management compensation, professional fees, filing fees, travel and office and sundry. The Company used $2,421,997 of the proceeds for working capital purposes to fund ongoing operations.
July 2019 Financing – Net Proceeds of $500,000
In July 2019, the Company completed a non-brokered private placement of 1,250,000 common shares at a price of $0.40 per share for gross proceeds of $500,000.
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | December 31, 2020 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Working capital to fund ongoing operations | 500,000 | 500,000 | - | |||||||||
Total Uses | 500,000 | 500,000 | - |
The Company used these proceeds for working capital purposes to fund ongoing operations.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
June 2019 Financing – Net Proceeds of $ 750,000
In June 2019, the Company completed a non-brokered private placement of 1,875,000 common shares at a price of $0.40 per share for gross proceeds of $750,000.
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | December 31, 2020 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Working capital to fund ongoing operations | 750,000 | 750,000 | - | |||||||||
Total Uses | 750,000 | 750,000 | - |
The Company used these proceeds for working capital purposes to fund ongoing operations.
Outstanding Share Data
On March 6, 2020, the Company completed a private placement consisting of 15,000,000 common shares in exchange for non-cash consideration of 6,944,444 common shares of Novo Resources Corp. (TSXV: NVO) at a price of $2.41 per share for gross proceeds of $16,736,110.
On June 4, 2020, the Company completed a non-brokered private placement financing of 3,994,597 flow-through common shares at a price of $1.50 per common share for gross proceeds of $5,991,896. Finders’ fees paid were $69,394 in cash and the issuance of 64,282 warrants exercisable into common shares of the Company at $1.50 per share for two years from date of issue with a fair value of $25,912. The premium received on the flow-through shares issued was determined to be $1,690,704.
On June 10, 2020, the Company completed a non-brokered private placement financing of 866,385 flow-through common shares at a price of $1.30 per common share for gross proceeds of $1,126,300. Finders’ fees paid were $56,793 in cash and the issuance of 43,582 warrants exercisable into common shares of the Company at $1.30 per share for two years from the date of issue with a fair value of $16,271. The premium received on the flow-through shares issued was determined to be $259,915.
On August 11, 2020, the Company completed an initial public offering of 21,000,000 common shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 14, 2020, its agents exercised their overallotment option in full to offer and sell an additional 3,150,000 common shares for gross proceeds of $4,095,000. The Company paid share issuance costs of $2,906,419 in cash and issued 1,379,768 agents’ warrants with a fair value of $771,769. The agents’ warrants are exercisable into common shares of the Company at $1.30 per share for 12 months from the date of issue in connection with the initial public offering.
During the year ended December 31, 2020, 9,195,000 stock options were exercised at a weighted average price of $0.72 per share for gross proceeds of $7,036,624.
During the year ended December 31, 2020, 16,554,292 warrants were exercised at a weighted average price of $0.75 for gross proceeds of $12,721,057.
During the year ended December 31, 2020, 2,300,000 stock options were granted at an exercise price of $1.00 and an expiry date of April 18, 2025.
During the year ended December 31, 2020, 1,670,000 stock options were granted at an exercise price of $1.075 with an expiry date of May 23, 2025.
- 42 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
During the year ended December 31, 2020, 5,040,000 stock options were granted at an exercise price of $1.40 and an expiry date of August 11, 2025.
During the year ended December 31, 2020, 215,000 stock options were granted at an exercise price of $2.07 and an expiry date of September 3, 2025.
During the year ended December 31, 2020, 25,000 stock options were granted at an exercise price of $2.15 and an expiry date of October 1, 2025.
During the year ended December 31, 2020, 6,242,500 stock options were granted at an exercise price of $4.10 and an expiry date of December 31, 2025.
Subsequent to December 31, 2020, the Company completed a non-brokered private placement of 2,857,000 flow-through common shares at a price of $5.25 per common share for gross proceeds of $14,999,250. The Company paid finder’s fees of $524,974 in cash.
Subsequent to December 31, 2020, 335,000 stock options were exercised at a weighted average exercise price of $0.59 for gross proceeds of $196,200.
Subsequent to December 31, 2020, 291,830 warrants were exercised at a weighted average exercise price of $1.31 for gross proceeds of $381,539.
As at December 31, 2020, there were 148,684,523 common shares issued and outstanding. As at the date of this report, there were 152,168,353 common shares issued and outstanding.
As at December 31, 2020, there were 14,182,500 stock options and 933,340 warrants outstanding. As at the date of this report, there were 13,847,500 stock options and 641,510 warrants outstanding.
Related Party Transactions
All transactions with related parties have occurred in the normal course of operations and on terms and conditions that are similar to those of transactions with unrelated parties and are measured at the amount of consideration paid or received. A summary of the Company’s related party transactions with corporations having similar directors and officers, being Goldspot Discoveries Inc. and Mexican Gold Mining Corp., is as follows:
Year ended December 31, | ||||||||
2020 | 2019 | |||||||
$ | $ | |||||||
Amounts paid to Goldspot Discoveries Inc. (i) for administration, exploration and evaluation | (147,690 | ) | (163,500 | ) | ||||
Amounts paid to Mexican Gold Mining Corp. (ii) for legal fees | (127,234 | ) | - | |||||
Issuance of common shares to Goldspot Discoveries Inc. in a private placement | - | (750,000 | ) | |||||
Options exercised by members of key management | 5,753,625 | 375,000 |
(i) | Goldspot Discoveries Inc. is a related entity having the following common director and officer to the Company: Denis Laviolette, Director and President. |
(ii) | Mexican Gold Mining Corp. is a related entity having the following common director and officer to the Company: John Anderson, Director, Michael Kanevsky, Chief Financial Officer. On January 26, 2020 the Company entered into a binding letter agreement with Mexican Gold Mining Corp. (“MGMC”) to have all of the issued and outstanding shares of the Company acquired by MGMC. On February 19, 2020, the Company announced that the binding letter agreement was mutually terminated. |
There are no ongoing contractual commitments resulting from these transactions with related parties.
- 43 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Key Management Personnel Compensation
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers.
During the year ended December 31, 2020, key management personnel compensation totaled $23,887,832 (2019 - $2,392,822) comprised of salaries, consulting, and bonuses of $1,452,053 (2019 - $786,899) paid to the Chief Financial Officer, the Chief Operating Officer and companies controlled by the Company’s Chief Executive Officer and Executive Chairman, $20,000 (2019 - $Nil) paid to directors, and share-based compensation of $22,415,779 (2019 - $1,605,923) relating to 13,310,000 (2019 – 4,225,000) stock options granted to directors and officers of the Company.
As at December 31, 2020, $Nil is included in accounts payable and accrued liabilities for amounts owed to key management personnel (2019 - $21,667 owed to the Chief Operating Officer).
Under the terms of their management agreements, certain officers of the Company are entitled to 18 months of base pay in the event of their agreements being terminated without cause.
Risks and Uncertainties
The risks and uncertainties described in this section are considered by management to be the most important in the context of the Company’s business. The risks and uncertainties below are not inclusive of all the risks and uncertainties the Company may be subject to and other risks may exist. The Company is in the business of acquiring, exploring and evaluating gold properties. It is exposed to a number of risks and uncertainties that are common to other gold mining companies. The industry is capital intensive at all stages and is subject to variations in commodity prices, market sentiment, inflation and other risks.
Exploration Stage Company
The Company is an exploration stage company and cannot give any assurance that a commercially viable deposit, or “reserve,” exists on any properties for which the Company currently has or may have (through potential future joint venture agreements or acquisitions) an interest. Determination of the existence of a reserve depends on appropriate and sufficient exploration work and the evaluation of legal, economic, and environmental factors. If the Company fails to find a commercially viable deposit on any of its properties, its financial condition and results of operations will be materially adversely affected.
No Mineral Resources
Currently, there are no mineral resources (within the meaning of NI 43-101) on any of the properties in which the Company has an interest and the Company cannot give any assurance that any mineral resources will be identified. If the Company fails to identify any mineral resources on any of its properties, its financial condition and results of operations will be materially adversely affected.
No Mineral Reserves
Currently, there are no mineral reserves (within the meaning of NI 43-101) on any of the properties in which the Company has an interest and the Company cannot give assurance that any mineral reserves will be identified. If the Company fails to identify any mineral reserves on any of its properties, its financial condition and results of operations will be materially adversely affected.
- 44 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Reliability of Historical Information
The Company has relied on, and the disclosure in the Queensway Technical Report is based, in part, upon, historical data compiled by previous parties involved with the Queensway Project. To the extent that any of such historical data is inaccurate or incomplete, the Company’s exploration plans may be adversely affected.
Mineral Exploration and Development
Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection, the combination of which factors may result in the Company not receiving an adequate return of investment capital.
There is no assurance that the Company’s mineral exploration and any development activities will result in any discoveries of commercial bodies of ore. The long-term profitability of the Company’s operations will in part be directly related to the costs and success of its exploration programs, which may be affected by a number of factors. Substantial expenditures are required to establish reserves through drilling and to develop the mining and processing facilities and infrastructure at any site chosen for mining.
Substantial expenditures are required to establish ore reserves through exploration and drilling, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities and grades to justify commercial operations or that funds required for development can be obtained on a timely basis.
Estimates of reserves, mineral deposits and production costs can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In addition, the grade of ore ultimately mined may differ from that indicated by drilling results. Short term factors relating to reserves, such as the need for orderly development of ore bodies or the processing of new or different grades, may also have an adverse effect on mining operations and on the results of operations. Material changes in ore reserves, grades, stripping ratios or recovery rates may affect the economic viability of any project.
Competition and Mineral Exploration
The mineral exploration industry is intensely competitive in all of its phases and the Company must compete in all aspects of its operations with a substantial number of large established mining companies with greater liquidity, greater access to credit and other financial resources, newer or more efficient equipment, lower cost structures, more effective risk management policies and procedures and/or greater ability than the Company to withstand losses. The Company’s competitors may be able to respond more quickly to new laws or regulations or emerging technologies or devote greater resources to the expansion of their operations, than the Company can. In addition, current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties. Competition could adversely affect the Company’s ability to acquire suitable new mineral properties or prospects for exploration in the future. Competition could also affect the Company’s ability to raise financing to fund the exploration and development of its properties or to hire qualified personnel. The Company may not be able to compete successfully against current and future competitors, and any failure to do so could have a material adverse effect on the Company’s business, financial condition or results of operations.
- 45 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Additional Funding
The exploration and development of the Company’s mineral properties will require substantial additional capital. When such additional capital is required, the Company will need to pursue various financing transactions or arrangements, including joint venturing of projects, debt financing, equity financing or other means. Additional financing may not be available when needed or, if available, the terms of such financing might not be favorable to the Company and might involve substantial dilution to existing shareholders. The Company may not be successful in locating suitable financing transactions in the time period required or at all. A failure to raise capital when needed would have a material adverse effect on the Company’s business, financial condition and results of operations. Any future issuance of securities to raise required capital will likely be dilutive to existing shareholders. In addition, debt and other debt financing may involve a pledge of assets and may be senior to interests of equity holders. The Company may incur substantial costs in pursuing future capital requirements, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. The ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the gold and copper industries in particular), the Company’s status as a new enterprise with a limited history, the location of the Company’s mineral properties, the price of commodities and/or the loss of key management personnel.
Permits and Government Regulation
The future operations of the Company may require permits from various federal, state, provincial and local governmental authorities and will be governed by laws and regulations governing prospecting, development, mining, production, export, taxes, labour standards, occupational health, waste disposal, land use, environmental protections, mine safety and other matters.
Although Canada has a favorable legal and fiscal regime for exploration and mining, including a relatively simple system for the acquisition of mineral titles and relatively low tax burden, possible future government legislation, policies and controls relating to prospecting, development, production, environmental protection, mining taxes and labour standards could cause additional expense, capital expenditures, restrictions and delays in the activities of the Company, the extent of which cannot be predicted.
Before development and production can commence on any properties, the Company must obtain regulatory and environmental approvals. There is no assurance that such approvals can be obtained on a timely basis or at all. The cost of compliance, with changes in governmental regulations, has the potential to reduce the profitability of operations. The Company is currently in compliance with all material regulations applicable to its exploration activities.
Limited Operating History
The Company has a limited operating history and its mineral properties are exploration stage properties. As such, the Company will be subject to all of the business risks and uncertainties associated with any new business enterprise, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. The current state of the Company’s mineral properties require significant additional expenditures before any cash flow may be generated. Although the Company possesses an experienced management team, there is no assurance that the Company will be successful in achieving a return on shareholders’ investment and the likelihood of success of the Company must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the establishment of any business. There is no assurance that the Company can generate revenues, operate profitably, or provide a return on investment, or that it will successfully implement its plans.
- 46 -
Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
An investment in the Company’s securities carries a high degree of risk and should be considered speculative by purchasers. There is no assurance that we will be successful in achieving a return on shareholders’ investment and the likelihood of our success must be considered in light of our early stage of operations. You should consider any purchase of the Company’s securities in light of the risks, expenses and problems frequently encountered by all companies in the early stages of their corporate development.
Title Risks
Although the Company has or will receive title opinions for any properties in which it has a material interest, there is no guarantee that title to such properties will not be challenged or impugned. The Company has not conducted surveys on all of the claims in which it holds direct or indirect interests. The Company’s properties may be subject to prior unregistered agreements or transfers or native land claims and title may be affected by unidentified or unknown defects. Title insurance is generally not available for mineral properties and the Company’s ability to ensure that it has obtained secure claims to individual mineral properties or mining concessions may be constrained. A successful challenge to the Company’s title to a property or to the precise area and location of a property could cause delays or stoppages to the Company’s exploration, development or operating activities without reimbursement to the Company. Any such delays or stoppages could have a material adverse effect on the Company’s business, financial condition and results of operations.
Laws and Regulation
The Company’s exploration activities are subject to extensive federal, provincial and local laws and regulations governing prospecting, development, production, exports, taxes, labour standards, occupational health and safety, mine safety and other matters in all the jurisdictions in which it operates. These laws and regulations are subject to change, can become more stringent and compliance can therefore become more costly. The Company applies the expertise of its management, advisors, employees and contractors to ensure compliance with current laws.
Uninsured and Underinsured Risks
The Company faces and will face various risks associated with mining exploration and the management and administration thereof Some of these risks are not insurable; some may be the subject of insurance which is not commercially feasible for the Company. Those insurances which are purchased will have exclusions and deductibles which may eliminate or restrict recovery in the event of loss. In some cases, the amount of insurance purchased may not be adequate in amount or in limit.
The Company will undertake intermittent assessments of insurable risk to help ensure that the impact of uninsured/underinsured loss is minimized within reason. Risks may vary from time to time within this intermittent period due to changes in such things as operations operating conditions, laws or the climate which may leave the Company exposed to periods of additional uninsured risk. In the event risk is uninsurable, at its reasonable and sole discretion, the Company may endeavor to implement policies and procedures, as may be applicable and/or feasible, to reduce the risk of related loss.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Public Health Crises such as the COVID-19 Pandemic
In December 2019, a novel strain of coronavirus known as COVID-19 surfaced in Wuhan, China and has spread around the world causing significant business and social disruption. COVID-19 was declared a worldwide pandemic by the World Health Organization on March 11, 2020. The speed and extent of the spread of COVID-19 and the duration and intensity of resulting business disruption and related financial and social impact, are uncertain. Such adverse effects related to COVID-19 and other public health crises may be material to the Company. The impact of COVID-19 and efforts to slow the spread of COVID-19 could severely impact the exploration and any development of the Queensway Project and the Company’s other mineral projects. To date, a number of governments have declared states of emergency and have implemented restrictive measures such as travel bans, quarantine and self-isolation. If the exploration and any development of the Queensway Project and other mineral projects is disrupted or suspended as a result of these or other measures, it may have a material adverse impact on the Company’s financial position and results of operations.
COVID-19 and efforts to contain it may have broad impacts on the Company’s supply chain or the global economy, which could have a material adverse effect on the Company’s financial position. While governmental agencies and private sector participants are seeking to mitigate the adverse effects of COVID-19, and the medical community is seeking to develop vaccines and other treatment options, the efficacy and timing of such measures is uncertain.
Global Economy Risk
The volatility of global capital markets, including the general economic slowdown in the mining sector, over the past several years has generally made the raising of capital by equity or debt financing more difficult. The Company may be dependent upon capital markets to raise additional financing in the future. As such, the Company is subject to liquidity risks in meeting its operating expenditure requirements and future development cost requirements in instances where adequate cash positions are unable to be maintained or appropriate financing is unavailable. These factors may impact the ability to raise equity or obtain loans and other credit facilities in the future and on terms favourable to the Company and its management. If these levels of volatility persist or if there is a further economic slowdown, the Company’s operations, the Company’s ability to raise capital could be adversely impacted.
In addition, the current outbreak of COVID-19, and any future emergence and spread of similar pathogens, could have a material adverse impact on global economic conditions, which may adversely impact: the Company’s operations, its ability to raise debt or equity financing for the purposes of mineral exploration and development, and the operations of the Company’s suppliers, contractors and service providers.
Environmental Risks
The Company’s activities are subject to extensive laws and regulations governing environment protection. The Company is also subject to various reclamation related conditions. Although the Company closely follows and believes it is operating in compliance with all applicable environmental regulations, there can be no assurance that all future requirements will be obtainable on reasonable terms. Failure to comply may result in enforcement actions causing operations to cease or be curtailed and may include corrective measures requiring capital expenditures. Intense lobbying over environmental concerns by non-governmental organizations has caused some governments to cancel or restrict development of mining projects. Current publicized concern over climate change may lead to carbon taxes, requirements for carbon offset purchases or new regulation. The costs or likelihood of such potential issues to the Company cannot be estimated at this time.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
The legal framework governing this area is constantly developing, therefore the Company is unable to fully ascertain any future liability that may arise from the implementation of any new laws or regulations, although such laws and regulations are typically strict and may impose severe penalties (financial or otherwise). The proposed activities of the Company, as with any exploration, may have an environmental impact which may result in unbudgeted delays, damage, loss and other costs and obligations including, without limitation, rehabilitation and/or compensation. There is also a risk that the Company’s operations and financial position may be adversely affected by the actions of environmental groups or any other group or person opposed in general to the Company’s activities and, in particular, the proposed exploration and mining by the Company within the Provinces of Newfoundland and Ontario.
Social and Environmental Activism
There is an increasing level of public concern relating to the effects of mining on the nature landscape, in communities and on the environment. Certain non-governmental organizations, public interest groups and reporting organizations (“NGOs”) who oppose resource development can be vocal critics of the mining industry. In addition, there have been many instances in which local community groups have opposed resource extraction activities, which have resulted in disruption and delays to the relevant operation. While the Company seeks to operate in a social responsible manner and believes it has good relationships with local communities in the regions in which it operates, NGOs or local community organizations could direct adverse publicity against and/or disrupt the operations of the Company in respect of one or more of its properties, regardless of its successful compliance with social and environmental best practices, due to political factors, activities of unrelated third parties on lands in which the Company has an interest or the Company’s operations specifically. Any such actions and the resulting media coverage could have an adverse effect on the reputation and financial condition of the Company or its relationships with the communities in which it operations, which could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.
Dependence on Management and Key Personnel
The success of the Company is currently largely dependent on the performance of its directors and officers. The loss of the services of any of these persons could have a materially adverse effect on the Company’s business and prospects. There is no assurance the Company can maintain the services of its directors, officers or other qualified personnel required to operate its business. As the Company’s business activity grows, the Company will require additional key financial, administrative and mining personnel as well as additional operations staff. There can be no assurance that these efforts will be successful in attracting, training and retaining qualified personnel as competition for persons with these skill sets increase. If the Company is not successful in attracting, training and retaining qualified personnel, the efficiency of its operations could be impaired, which could have an adverse impact on the Company’s operations and financial condition. In addition, the COVID-19 pandemic may cause the Company to have inadequate access to an available skilled workforce and qualified personnel, which could have an adverse impact on the Company’s financial performance and financial condition.
First Nations Land Claims
Certain of the Company’s mineral properties may now or in the future be the subject of First Nations land claims. The legal nature of First Nations land claims is a matter of considerable complexity. The impact of any such claim on the Company’s material interest in the Company’s mineral properties and/or potential ownership interest in the Company’s mineral properties in the future, cannot be predicted with any degree of certainty and no assurance can be given that a broad recognition of First Nations rights in the areas in which the Company’s mineral properties are located, by way of negotiated settlements or judicial pronouncements, would not have an adverse effect on the Company’s activities. Even in the absence of such recognition, the Company may at some point be required to negotiate with and seek the approval of holders of First Nations interests in order to facilitate exploration and development work on the Company’s mineral properties, there is no assurance that the Company will be able to establish practical working relationships with the First Nations in the area which would allow it to ultimately develop the Company’s mineral properties.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Claims and Legal Proceedings
The Company and/or its directors and officers may be subject to a variety of civil or other legal proceedings, with or without merit. From time to time in the ordinary course of its business, the Company may become involved in various legal proceedings, including commercial, employment and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s attention and resources and cause the Company to incur significant expenses. Furthermore, because litigation is inherently unpredictable, the results of any such actions may have a material adverse effect on the Company’s business, operating results or financial condition.
Conflicts of Interest
Most of the Company’s directors and officers do not devote their full time to the affairs of the Company. All of the directors and some of the officers of the Company are also directors, officers and shareholders of other natural resource or public companies, and as a result they may find themselves in a position where their duty to another company conflicts with their duty to the Company. Although the Company has policies which address such potential conflicts and the OBCA has provisions governing directors in the event of such a conflict, none of the Company’s constating documents or any of its other agreements contain any provisions mandating a procedure for addressing such conflicts of interest. There is no assurance that any such conflicts will be resolved in favour of the Company. If any such conflicts are not resolved in favour of the Company, the Company may be adversely affected.
Gold and Metal Prices
If the Company’s mineral properties are developed from exploration properties to full production properties, the majority of our revenue will be derived from the sale of gold. Therefore, the Company’s future profitability will depend upon the world market prices of the gold for which it is exploring. The price of gold and other metals are affected by numerous factors beyond the Company’s control, including levels of supply and demand, global or regional consumptive patterns, sales by government holders, metal stock levels maintained by producers and others, increased production due to new mine developments and improved mining and production methods, speculative activities related to the sale of metals, availability and costs of metal substitutes.
Moreover, gold prices are also affected by macroeconomic factors such as expectations regarding inflation, interest rates and global and regional demand for, and supply of, gold as well as general global economic conditions. These factors may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities. Additionally, the current COVID-19 pandemic and efforts to contain it, including restrictions on travel and other advisories issued may have a significant effect on gold prices.
Negative Cash Flow from Operating Activities
The Company has no history of earnings and had negative cash flow from operating activities since inception. The Company’s mineral properties are in the exploration stage and there are no known mineral resources or reserves and the proposed exploration programs on the Company’s mineral properties are exploratory in nature. Significant capital investment will be required to achieve commercial production from the Company’s existing projects. There is no assurance that any of the Company’s mineral properties will generate earnings, operate profitably or provide a return on investment in the future. Accordingly, the Company will be required to obtain additional financing in order to meet its future cash commitments.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Going Concern Risk
The Company’s financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. The Company’s future operations are dependent upon the identification and successful completion of equity or debt financings and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that the Company will be successful in completing equity or debt financings or in achieving profitability. The financial statements do not give effect to any adjustments relating to the carrying values and classifications of assets and liabilities that would be necessary should the Company be unable to continue as a going concern.
Risks Associated with Acquisitions
If appropriate opportunities present themselves, the Company may acquire mineral claims, material interests in other mineral claims, and companies that the Company believes are strategic. The Company currently has no understandings, commitments or agreements with respect to any material acquisition, other than as described in this MD&A, and no other material acquisition is currently being pursued. There can be no assurance that the Company will be able to identify, negotiate or finance future acquisitions successfully, or to integrate such acquisitions with its current business. The process of integrating an acquired Company or mineral claims into the Company may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for ongoing development of the Company’s business. Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to goodwill and other intangible assets, which could materially adversely affect the Company’s business, results of operations and financial condition.
Force Majeure
The Company’s projects now or in the future may be adversely affected by risks outside the control of the Company, including the price of gold on world markets, labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods, explosions or other catastrophes, pandemics, epidemics or quarantine restrictions.
Infrastructure
Exploration, development and processing activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important elements of infrastructure, which affect access, capital and operating costs. The lack of availability on acceptable terms or the delay in the availability of any one or more of these items could prevent or delay exploration or development of the Company’s mineral properties. If adequate infrastructure is not available in a timely manner, there can be no assurance that the exploration or development of the Company’s mineral properties will be commenced or completed on a timely basis, if at all. Furthermore, unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of necessary infrastructure could adversely affect our operations.
Exploration operations depend on adequate infrastructure. In particular, reliable power sources, water supply, transportation and surface facilities are necessary to explore and develop mineral projects. Failure to adequately meet these infrastructure requirements or changes in the cost of such requirements could affect the Company’s ability to carry out exploration and future development operations and could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Climate Change Risks
The Company acknowledges climate change as an international and community concern and it supports and endorses various initiatives for voluntary actions consistent with international initiatives on climate change. However, in addition to voluntary actions, governments are moving to introduce climate change legislation and treaties at the international, national, state/provincial and local levels. Where legislation already exists, regulation relating to emission levels and energy efficiency is becoming more stringent. Some of the costs associated with reducing emissions can be offset by increased energy efficiency and technological innovation. However, if the current regulatory trend continues, the Company expects that this could result in increased costs at some of its operations in the future.
The Company and the mining industry are facing continued geotechnical challenges, which could adversely impact the Company’s production and profitability. Unanticipated adverse geotechnical and hydrological conditions, such as landslides, floods, seismic activity, droughts and pit wall failures, may occur in the future and such events may not be detected in advance. Geotechnical instabilities and adverse climatic conditions can be difficult to predict and are often affected by risks and hazards outside of the Company’s control, such as severe weather and considerable rainfall. Geotechnical failures could result in limited or restricted access to mine sites, suspension of operations, government investigations, increased monitoring costs, remediation costs, loss of ore and other impacts, which could cause one or more of the Company’s projects to be less profitable than currently anticipated and could result in a material adverse effect on the Company’s business results of operations and financial position.
Information Systems and Cyber Security
The Company’s operations depend on information technology (“IT”) systems. These IT systems could be subject to network disruptions caused by a variety of sources, including computer viruses, security breaches and cyber-attacks, as well as disruptions resulting from incidents such as cable cuts, damage to physical plants, natural disasters, terrorism, fire, power loss, vandalism and theft. The Company’s operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Company’s reputation and results of operations.
Although to date the Company has not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that the Company will not incur such losses in the future. The Company’s risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. As a result, cyber security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.
Critical Accounting Policies and Estimates
The Company prepares its financial statements in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”).
The preparation of the financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
The financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant assumptions about the future and other sources of estimation uncertainty that management has made at year end that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to the following:
(i) Critical accounting estimates
Valuation of Options Granted and Warrants Issued
The fair value of common share purchase options granted and warrants issued is determined at the issue date using the Black-Scholes option pricing model. The Black-Scholes model involves six key inputs to determine the fair value of an option, which are: risk-free interest rate, exercise price, market price at the grant date, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are or could be affected by significant factors that are out of the Company’s control. The Company is also required to estimate the future forfeiture rate of options based on historical information in its calculation of share-based payments expense. These estimates impact the values of stock-based compensation expense, share capital, and reserves.
Computation of Income Taxes
The determination of tax expense for the period and deferred tax assets and liabilities involves significant estimation and judgment by management. In determining these amounts, management interprets tax legislation in a variety of jurisdictions and make estimates of the expected timing of the reversal of deferred tax assets and liabilities. Management also makes estimates of future earnings which affect the extent to which potential future tax benefits may be used.
The Company is subject to assessments by taxation authorities, which may interpret legislation differently. These differences may affect the final amount or the timing of the payment of taxes. We provide for such differences where known based on our best estimate of the probable outcome of these matters.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Shares Issued to Acquire Exploration and Evaluation Assets
From time to time, the Company issues common shares in the course of acquiring exploration and evaluation assets. When shares are issued without cash consideration, the transaction is recognized at the fair value of the assets received. In the event that the fair value of the assets cannot be reliably determined, the Company will recognize the transaction at the fair value of the shares issued. These estimates impact the value of share capital and exploration and evaluation assets.
Valuation of flow-through premium
The determination of the valuation of flow-through premium and warrants in equity units is subject to significant judgment and estimates. The flow-through premium is valued as the estimated premium that investors pay for the flow-through feature, being the portion in excess of the market value of shares without the flow-through feature issued in concurrent private placement financing.
(ii) Critical accounting judgments
Impairment of Exploration and Evaluation Assets
Management is required to assess impairment in respect to the Company’s intangible mineral property interests. The triggering events are defined in IFRS 6. In making the assessment, management is required to make judgments on the status of each project and the future plans towards finding commercial reserves. The carrying value of each exploration and evaluation asset is reviewed regularly for conditions that may suggest impairment. This review requires significant judgment. Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the property’s value; whether there has been an accumulation of costs significantly in excess of the amounts originally expected for the property’s acquisition, development or cost of holding; and whether exploration activities produced results that are not promising such that no more work is being planned in the foreseeable future. If impairment is determined to exist, a formal estimate of the recoverable amount is performed and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount.
Management has determined that there were indicators of impairment as at December 31, 2020 and has impaired $166,662 (December 31, 2019 - $91,355) in exploration and evaluation assets.
Initial application of standards, interpretations and amendments to standards and interpretations in the reporting period
In October 2018, the International Accounting Standards Board amended IFRS 3, Business Combinations, seeking to clarify whether an acquisition transaction results in the acquisition of an asset or the acquisition of a business. The amendments are effective for acquisition transactions on or after January 1, 2020, although earlier application was permitted. The amended standard has a narrower definition of a business, which could result in the recognition of fewer business combinations than under the previous standard; the implication of this is that amounts which may have been recognized as goodwill in a business combination under the previous standard may now be recognized as allocations to net identifiable assets acquired under the amended standard (with an associated effect in an entity’s results of operations that would differ from the effect of goodwill having been recognized). We have applied the standard prospectively from January 1, 2020. The effects of the amended standard on our financial performance and disclosure will be dependent on the facts and circumstances of any future acquisition transactions and have not been material in the current fiscal year.
Financial Risk Management
The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board approves and monitors the risk management processes.
Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company does not have financial instruments that potentially subject the Company to credit risk. Overall the Company’s credit risk has not changed significantly from the prior year. Sales taxes recoverable are due from the Canada Revenue Agency and the Company places its cash with financial institutions with high credit ratings, therefore in management’s judgment, credit risk is low.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has in place a planning and budgeting process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. The Company has historically relied on issuance of shares to fund exploration programs and may require doing so again in the future. As at December 31, 2020, the Company has total liabilities of $635,083 and cash of $47,731,125 which is available to discharge these liabilities (December 31, 2019 – total liabilities of $392,849 and cash of $7,336,638). Accordingly, in management’s judgment, liquidity risk is low.
There have been no changes in management’s methods for managing liquidity risk during the years ended December 31, 2020 and 2019.
Market Risk
Market risk is the risk that changes in market prices, such as commodity prices, interest rates and foreign exchange rates will affect the Company’s net earnings or the value of financial instruments. The objective of the Company is to manage and mitigate market risk exposures within acceptable limits, while maximizing returns.
Currency Risk
Financial instruments that impact the Company’s net earnings or other comprehensive income due to currency fluctuation include cash accounts denominated in US dollars and investments denominated in Australian dollars. Fluctuations in the exchange rate between the US dollar and the Canadian dollar, and the Australian dollar and the Canadian dollar at December 31, 2020 would not have a material impact on the Company’s net earnings and other comprehensive income.
Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. As the Company deposits its short-term investments into fixed rate guaranteed investment certificates with one year maturities or less, the Company is not exposed to interest rate risk.
Commodity Price risk
Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company’s property has exposure to predominantly gold. Commodity prices, especially gold, greatly affect the value of the Company and the potential value of its property and investments.
Equity Price Risk
Equity price risk is the risk that the fair value of or future cash flows from the Company’s financial instruments will significantly fluctuate because of changes in market prices. The Company is exposed to market risk in trading its investments in unfavorable market conditions which could result in dispositions of investments at less than favorable prices. Additionally, the Company adjusts its investments to fair value at the end of each reporting period. This process could result in write-downs of the Company’s investments over one or more reporting periods, particularly during periods of overall market instability. The sensitivity of the Company’s net income (loss) to changes in market prices at December 31, 2020 would change the Company’s net income (loss) by $2,109,000 as a result of a 10% change in the market price of its investments.
There have been no changes in management’s methods for managing market risks during the years ended December 31, 2020 and 2019.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Capital management
The Company’s objectives when managing capital are:
• To safeguard our ability to continue as a going concern in order to develop and operate our current projects;
• Pursue strategic growth initiatives; and
• To maintain a flexible capital structure which lowers the cost of capital.
In assessing our capital structure, we include in our assessment the components of equity consisting of common shares, stock options and warrants, and deficit that as at December 31, 2020 totalled $72,901,845 (December 31, 2019 - $8,962,187). In order to facilitate the management of capital requirements, the Company prepares annual expenditure budgets and continuously monitors and reviews actual and forecasted cash flows. The annual and updated budgets are monitored and approved by the Board of Directors.
To maintain or adjust the capital structure, the Company may, from time to time, issue new shares, issue new debt, repay debt or dispose of non-core assets. The Company’s current capital resources are sufficient to carry out our exploration plans and support operations through the current operating period.
The Company is not subject to any capital requirements imposed by a regulator.
There were no changes in the Company’s approach to capital management during the year ended December 31, 2020.
Cautionary Notes Regarding Forward-Looking Statements
This MD&A contains forward looking statements which reflect management’s expectations regarding the Company’s future growth, results from operations (including, without limitation, statements about the Company’s opportunities, strategies, competition, expected activities and expenditures as the Company pursues its business plan, the adequacy of the Company’s available cash resources and other statements about future events or results), performance (both operational and financial) and business prospects, future business plans and opportunities. Wherever possible, words such as “predicts”, “projects”, “targets”, “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. These forward-looking statements include, among other things, statements relating to; the Queensway Project and the Company’s planned and future exploration on the Queensway Project and its other mineral properties; the Company’s goals regarding exploration and potential development of its projects; the Company’s future business plans; expectations regarding the ability to raise further capital; the market price of gold; expectations regarding any environmental issues that may affect planned or future exploration and development programs and the potential impact of complying with existing and proposed environmental laws and regulations; the ability to retain and/or maintain any require permits, licenses or other necessary approvals for the exploration or development of its mineral properties; government regulation of mineral exploration and development operations in the Provinces of Newfoundland and Labrador and Ontario; the Company’s compensation policy and practices; the Company’s expected reliance on key management personnel, advisors and consultants; effects of the novel COVID-19 outbreak as a global pandemic.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
Forward-looking statements are not a guarantee of future performance and is based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this Prospectus including, without limitation, assumptions about: the ability to raise any necessary additional capital on reasonable terms to advance exploration and development of the Company’s mineral properties; future prices of gold and other metal prices; the timing and results of exploration and drilling programs; the demand for, and price of gold; that general business and economic conditions will not change in a material adverse manner; the Company’s ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; the geology of the Queensway Project as described in the Queensway Technical Report; the accuracy of budgeted exploration and development costs and expenditures; future currency exchange rates and interest rates; operating conditions being favourable such that the Company is able to operate in a safe, efficient and effective manner; the Company’s ability to attract and retain skilled personnel; political and regulatory stability; the receipt of governmental, regulatory and third-party approvals, licenses and permits on favourable terms; obtaining required renewals for existing approvals, licenses and permits on favourable terms; requirements under applicable laws; sustained labour stability; stability in financial and capital goods markets; expectations regarding the level of disruption to exploration at the Queensway Project as a result of COVID 19; availability of equipment.
Furthermore, such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of the Company to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking statements. Such risks include, without limitation: the Company may fail to find a commercially viable deposit at any of its mineral properties; there are no resources or mineral reserves on any of the properties in which the Company has an interest; the Company’s plans may be adversely affected by the Company’s reliance on historical data compiled by previous parties involved with its mineral properties; mineral exploration and development are inherently risky; the mineral exploration industry is intensely competitive; additional financing may not be available to the Company when required or, if available, the terms of such financing may not be favourable to the Company; fluctuations in the demand for gold; the Company may not be able to identify, negotiate or finance any future acquisitions successfully, or to integrate such acquisitions with its current business; the Company’s exploration activities are dependent upon the grant of appropriate licenses, concessions, leases, permits and regulatory consents, which may be withdrawn or not granted; the Company’s operations could be adversely affected by possible future government legislation, policies and controls or by changes in applicable laws and regulations; there is no guarantee that title to the properties in which the Company has a material interest will not be challenged or impugned; the Company faces various risks associated with mining exploration that are not insurable or may be the subject of insurance which is not commercially feasible for the Company; public health crises such as the COVID-19 pandemic may adversely impact the Company’s business; the volatility of global capital markets over the past several years has generally made the raising of capital more difficult; compliance with environmental regulations can be costly; social and environmental activism can negatively impact exploration, development and mining activities; the success of the Company is largely dependent on the performance of its directors and officers; the Company’s operations may be adversely affected by First Nations land claims; the Company and/or its directors and officers may be subject to a variety of legal proceedings, the results of which may have a material adverse effect on the Company’s business; the Company may be adversely affected if potential conflicts of interests involving its directors and officers are not resolved in favour of the Company; the Company’s future profitability may depend upon the world market prices of gold; there is no existing public market for the Company’s securities and an active and liquid one may never develop, which could impact the liquidity of the Company’s securities; dilution from future equity financing could negatively impact holders of the Company’s securities; failure to adequately meet infrastructure requirements could have a material adverse effect on the Company’s business; the Company’s projects now or in the future may be adversely affected by risks outside the control of the Company; the Company is subject to various risks associated with climate change; other factors discussed under “Risk and Uncertainties”.
Although the Company has attempted to identify important factors that could cause actual actions, events, conditions, results, performance or achievements to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events, conditions, results, performance or achievements to differ from those anticipated, estimated or intended.
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Management’s Discussion and Analysis
For the year ended December 31, 2020 and 2019
The Company cautions that the foregoing lists of important assumptions and factors are not exhaustive. Other events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward-looking statements contained herein. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking statements.
Forward-looking statements contained herein are made as of the date of this MD&A and the Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as and to the extent required by applicable securities laws.
Off-Balance Sheet Arrangements
The Company does not utilize off-balance sheet arrangements.
Proposed Transactions
There are no proposed transactions at the date of this report.
Management’s Report on Internal Control over Financial Reporting
In connection with National Instrument 52-109 Certification of Disclosure in Issuer’s Annual and Interim Filings (“NI 52-109”) adopted in December 2008 by each of the securities commissions across Canada, the Chief Executive Officer and Chief Financial Officer of the Company will file a Venture Issuer Basic Certificate with respect to the financial information contained in the financial statements and respective accompanying Management’s Discussion and Analysis. The Venture Issuer Basic Certification does not include representations relating to the establishment and maintenance of disclosure controls and procedures and internal control over financial reporting, as defined in NI 52-109.
Additional Information
Additional information relating to the Company is available on SEDAR at www.sedar.com.
- 58 -
Exhibit 99.4
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 2020 AND 2019
(Expressed in Canadian Dollars)
|
Crowe MacKay LLP 1100 - 1177 West Hastings St. Vancouver, BC V6E 4T5 Main +1 (604) 687-4511 Fax +1 (604) 687-5805 www.crowemackay.ca |
Independent Auditor's Report
To the Shareholders of New Found Gold Corp.
Opinion
We have audited the financial statements of New Found Gold Corp. ("the Company"), which comprise the statements of financial position as at December 31, 2020 and December 31, 2019 and the statements of loss and comprehensive loss, cash flows and changes in equity for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2020 and December 31, 2019, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.
Basis for Opinion
We conducted our audit in accordance with generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other Information
Management is responsible for the other information. The other information comprises:
• Management's Discussion and Analysis
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We obtained the other information prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor's report. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• | Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. |
• | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. |
• | Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. |
• | Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. |
• | Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. |
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
The engagement partner on the audit resulting in this independent auditor's report is Pejman Mahlooji.
"Crowe MacKay LLP"
Chartered Professional Accountants
Vancouver, Canada
April 29, 2021
New Found Gold Corp.
Statements of Financial Position
(Expressed in Canadian Dollars)
December 31, | December 31, | |||||||||||
2020 | 2019 | |||||||||||
Note | $ | $ | ||||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash | 47,731,125 | 7,336,638 | ||||||||||
Investments, at fair value | 5 | 21,089,997 | 114,937 | |||||||||
Amounts receivable | 2,837 | 46,085 | ||||||||||
Prepaid expenses and deposits | 6 | 1,258,203 | 436,436 | |||||||||
Sales taxes recoverable | 1,024,369 | 291,075 | ||||||||||
Right-of-use assets | 54,034 | - | ||||||||||
Total current assets | 71,160,565 | 8,225,171 | ||||||||||
Non-current assets | ||||||||||||
Exploration and evaluation assets | 3 | 999,234 | 1,100,716 | |||||||||
Property and equipment | 4 | 1,377,129 | 29,149 | |||||||||
Total non-current assets | 2,376,363 | 1,129,865 | ||||||||||
Total Assets | 73,536,928 | 9,355,036 | ||||||||||
LIABILITIES | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable and accrued liabilities | 9 | 396,451 | 392,849 | |||||||||
Flow-through share premium | 7 | 185,431 | - | |||||||||
Lease liabilities | 53,201 | - | ||||||||||
Total current liabilities | 635,083 | 392,849 | ||||||||||
EQUITY | ||||||||||||
Share capital | 8 | 87,668,764 | 10,735,862 | |||||||||
Reserves | 8 | 24,208,662 | 4,667,467 | |||||||||
Deficit | (38,975,581 | ) | (6,441,142 | ) | ||||||||
Total equity | 72,901,845 | 8,962,187 | ||||||||||
Total Equity and Liabilities | 73,536,928 | 9,355,036 |
NATURE OF OPERATIONS (Note 1)
COMMITMENTS (Note 14)
SUBSEQUENT EVENTS (Note 17)
These financial statements are authorized for issue by the Board of Directors on April 29, 2021. They are signed on the Company’s behalf by:
“Collin Kettell” | , Director |
“John Anderson” | , Director |
The accompanying notes are an integral part of these financial statements.
- 1 -
New Found Gold Corp.
Statements of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)
Year ended December 31, | |||||||||||||
2020 | 2019 | ||||||||||||
Note | $ | $ | |||||||||||
Expenses | |||||||||||||
Corporate development and investor relations | 758,421 | - | |||||||||||
Depreciation | 129,957 | 12,492 | |||||||||||
Exploration and evaluation expenditures | 3,9 | 8,107,439 | 657,539 | ||||||||||
Office and sundry | 105,067 | 31,859 | |||||||||||
Professional fees | 9 | 677,243 | 74,648 | ||||||||||
Salaries and consulting | 9 | 1,948,113 | 987,399 | ||||||||||
Share-based compensation | 8,9 | 26,457,335 | 2,130,528 | ||||||||||
Transfer agent and regulatory fees | 91,487 | 390 | |||||||||||
Travel | 72,226 | 30,554 | |||||||||||
Loss from operating activities | (38,347,288 | ) | (3,925,409 | ) | |||||||||
Settlement of flow-through share premium | 7 | 1,772,188 | - | ||||||||||
Foreign exchange (loss) | (12,214 | ) | (909 | ) | |||||||||
Gain on sale of exploration and evaluation assets | 3 | 4,384,953 | - | ||||||||||
Impairment of exploration and evaluation assets | 3 | (166,662 | ) | (91,335 | ) | ||||||||
Interest expense | (3,544 | ) | - | ||||||||||
Interest income | 61,882 | - | |||||||||||
Net realized (losses) on disposal of investments | 5 | - | (120,734 | ) | |||||||||
Net change in unrealized (losses) gains on investments | 5 | (223,754 | ) | 118,355 | |||||||||
Loss and comprehensive loss for the year | (32,534,439 | ) | (4,020,032 | ) | |||||||||
Loss per share – basic and diluted ($) | 10 | (0.29 | ) | (0.07 | ) | ||||||||
Weighted average number of common shares outstanding – basic and diluted | 112,657,850 | 60,041,181 |
The accompanying notes are an integral part of these financial statements.
- 2 -
New Found Gold Corp.
Statements of Cash Flows
(Expressed in Canadian Dollars)
Year ended December 31, | ||||||||
2020 | 2019 | |||||||
$ | $ | |||||||
Cash flows from operating activities | ||||||||
Loss for the year | (32,534,439 | ) | (4,020,032 | ) | ||||
Adjustments for: | ||||||||
Depreciation | 129,957 | 12,492 | ||||||
(Gain) on sale of exploration and evaluation assets | (4,384,953 | ) | - | |||||
Impairment of exploration and evaluation assets | 166,662 | 91,335 | ||||||
Interest expense | 3,544 | - | ||||||
Settlement of flow-through share premium | (1,772,188 | ) | - | |||||
Share-based compensation | 26,457,335 | 2,130,528 | ||||||
Net realized losses on disposal of investments | - | 120,734 | ||||||
Net change in unrealized losses (gains) on investments | 223,754 | (118,355 | ) | |||||
(11,710,328 | ) | (1,783,298 | ) | |||||
Change in non-cash working capital items: | ||||||||
Decrease in amounts receivable | 43,248 | 118,765 | ||||||
(Increase) in prepaid expenses and deposits | (821,767 | ) | (367,806 | ) | ||||
(Increase) in sales taxes recoverable | (733,294 | ) | (181,661 | ) | ||||
Increase (decrease) in accounts payable and accrued liabilities | 3,602 | (435,457 | ) | |||||
Net cash used in operating activities | (13,218,539 | ) | (2,649,457 | ) | ||||
Cash flows from investing activities | ||||||||
Purchases of exploration and evaluation assets | (100,000 | ) | (307,370 | ) | ||||
Expenditures on claims staking | (42,930 | ) | - | |||||
Proceeds on disposal of investments | - | 280,786 | ||||||
Purchases of property, plant and equipment | (1,446,440 | ) | - | |||||
Net cash used in investing activities | (1,589,370 | ) | (26,584 | ) | ||||
Cash flows from financing activities | ||||||||
Issuance of common shares in initial public offering | 31,395,000 | - | ||||||
Issuance of common shares in private placements | 7,118,196 | 9,250,000 | ||||||
Share issue costs | (3,032,606 | ) | - | |||||
Stock options exercised | 7,036,624 | 439,500 | ||||||
Warrants exercised | 12,721,057 | - | ||||||
Lease payments | (32,331 | ) | - | |||||
Interest expense on lease liabilities | (3,544 | ) | - | |||||
Net cash generated from financing activities | 55,202,396 | 9,689,500 | ||||||
Net increase in cash | 40,394,487 | 7,013,459 | ||||||
Cash at beginning of year | 7,336,638 | 323,179 | ||||||
Cash at end of year | 47,731,125 | 7,336,638 |
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS (Note 11)
The accompanying notes are an integral part of these financial statements.
- 3 -
New Found Gold Corp.
Statements of Changes in Equity
(Expressed in Canadian Dollars)
Share capital | Reserves | ||||||||||||||||||
Equity settled | |||||||||||||||||||
share-based | |||||||||||||||||||
Number | Amount | payments | Warrants | Deficit | Total equity | ||||||||||||||
of shares | $ | $ | $ | $ | $ | ||||||||||||||
Balance at December 31, 2018 | 56,351,750 | 2,845,700 | 530,601 | - | (2,421,110 | ) | 955,191 | ||||||||||||
Issued pursuant to acquisition of exploration and evaluation assets | 517,499 | 207,000 | - | - | - | 207,000 | |||||||||||||
Share-based compensation | - | - | 2,130,528 | - | - | 2,130,528 | |||||||||||||
Shares issued in private placement | 19,125,000 | 6,997,542 | - | 2,252,458 | - | 9,250,000 | |||||||||||||
Stock options exercised | 2,930,000 | 685,620 | (246,120 | ) | - | - | 439,500 | ||||||||||||
Total comprehensive loss for the year | - | - | - | - | (4,020,032 | ) | (4,020,032 | ) | |||||||||||
Balance at December 31, 2019 | 78,924,249 | 10,735,862 | 2,415,009 | 2,252,458 | (6,441,142 | ) | 8,962,187 | ||||||||||||
Shares issued in initial public offering | 24,150,000 | 31,395,000 | - | - | - | 31,395,000 | |||||||||||||
Shares issued in private placement | 15,000,000 | 16,736,110 | - | - | - | 16,736,110 | |||||||||||||
Flow-through shares issued in private placements | 4,860,982 | 7,118,196 | - | - | - | 7,118,196 | |||||||||||||
Share issue costs | - | (3,032,606 | ) | - | - | - | (3,032,606 | ) | |||||||||||
Agents’ warrants issued | - | (813,952 | ) | - | 813,952 | - | - | ||||||||||||
Flow-through share premium | - | (1,957,619 | ) | - | - | - | (1,957,619 | ) | |||||||||||
Share-based compensation | - | - | 26,457,335 | - | - | 26,457,335 | |||||||||||||
Stock options exercised | 9,195,000 | 12,204,631 | (5,168,007 | ) | - | - | 7,036,624 | ||||||||||||
Warrants exercised | 16,554,292 | 15,283,142 | - | (2,562,085 | ) | - | 12,721,057 | ||||||||||||
Total comprehensive loss for the year | - | - | - | - | (32,534,439 | ) | (32,534,439 | ) | |||||||||||
Balance at December 31, 2020 | 148,684,523 | 87,668,764 | 23,704,337 | 504,325 | (38,975,581 | ) | 72,901,845 |
The accompanying notes are an integral part of these financial statements.
- 4 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
1. | NATURE OF OPERATIONS |
New Found Gold Corp. (the “Company”) was incorporated on January 6, 2016, under the Business Corporations Act in the Province of Ontario. On June 23, 2020, the Company continued as a British Columbia corporation under the Business Corporations Act in the Province of British Columbia. The Company’s registered office is located at Suite 2600 – 595 Burrard Street, Vancouver, British Columbia V7X 1L3.
The Company is a mineral exploration company engaged in the acquisition, exploration and evaluation of resource properties with a focus on gold properties located in the Provinces of Newfoundland and Labrador and Ontario, Canada. The Company’s exploration and evaluation assets presently have no proven or probable reserves, and on the basis of information to date, it has not yet determined whether these properties contain economically recoverable resources. The recoverability of amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production.
On March 11, 2020, the World Health Organization declared the global outbreak of a novel coronavirus identified as “COVID-19” a global pandemic. In order to combat the spread of COVID-19, governments worldwide have enacted emergency measures including travel bans, legally enforced or self-imposed quarantine periods, social distancing and business and organization closures. These measures have caused material disruptions to businesses, governments and other organizations resulting in an economic slowdown and increased volatility in national and global equity and commodity markets. Central banks and governments, including Canadian federal and provincial governments, have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of any interventions. Significant economic and social impacts have limited the Company’s ability to continue its exploration and evaluation activities as intended. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company and its operations in future periods.
These financial statements were approved by the Board of Directors of the Company on April 29, 2021.
2. | SIGNIFICANT ACCOUNTING POLICIES |
The principal accounting policies applied in the preparation of these financial statements are set out below.
a) Statement of compliance
The Company’s financial statements, including comparatives, have been prepared in accordance with and using accounting policies in compliance with the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”), effective for the Company’s reporting for the year ended December 31, 2020 and 2019.
b) Basis of presentation
These financial statements have been prepared on a historical cost basis except for financial instruments classified as subsequently measured at fair value. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information.
- 5 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
2. | SIGNIFICANT ACCOUNTING POLICIES (continued) |
c) Foreign currencies
The presentation and functional currency of the Company is the Canadian dollar. Transactions in currencies other than the Canadian dollar are recorded at the rates of exchange prevailing on the dates of transactions. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
d) Exploration, evaluation and development expenditures
Costs incurred before the Company has obtained the legal right to explore are expensed as incurred. Once the legal right to explore has been acquired, the Company capitalizes the costs of acquiring rights or licenses, including those purchased from other parties or staked directly by the Company, until such time as the lease expires, it is abandoned, sold or considered impaired in value. Indirect administrative costs and costs of surveying, exploratory drilling, sampling, materials, fuel, equipment rentals or payments to contractors are expensed as incurred.
Exploration and evaluation properties are not amortized during the exploration and evaluation stage.
The Company does not have revenue from mining operations. The Company recognizes gains or losses on the sale of exploration and evaluation assets in accordance with the terms of the purchase and sale agreements. Gains or losses are recognized when a mining option is executed and the cost is derecognized in accordance with the percentage interest sold.
At each reporting date the carrying amounts of the Company’s exploration and evaluation assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period.
For the purposes of impairment testing, exploration and evaluation assets are allocated to cash generating units (“CGU”) to which the exploration activity relates. Each of the Company’s properties is considered to be a separate CGU. Where an impairment loss subsequently reverses, the carrying amount of the asset (or CGU) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or CGU) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.
e) Cash and cash equivalents
Cash and cash equivalents include short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. The Company does not have any cash equivalents as at December 31, 2020 and 2019.
f) Decommissioning liabilities
The Company recognizes liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of exploration and evaluation assets and equipment when those obligations result from the acquisition, construction, development or normal operation of assets. The net present value of future rehabilitation costs is capitalized to exploration and evaluation assets along with a corresponding increase in the rehabilitation provision in the period incurred.
- 6 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
2. | SIGNIFICANT ACCOUNTING POLICIES (continued) |
f) Decommissioning liabilities (continued)
Pre-tax discount rates that reflect the time value of money are used to calculate the net present value. The rehabilitation asset is depreciated on the same basis as exploration and evaluation assets. The Company’s estimates of reclamation costs could change as a result of changes in regulatory requirements, discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to exploration and evaluation assets and the rehabilitation provision. The Company’s estimates are reviewed annually for changes in regulatory requirements, discount rates, effects of inflation and changes in estimates. Changes in the net present value, excluding changes in the Company’s estimates of reclamation costs, are charged to profit or loss for the period. There are no decommissioning liabilities for the periods presented.
g) Property, plant and equipment
Property, plant and equipment is recorded at cost less accumulated depreciation calculated using the straight-line method over the estimated useful lives of 25 years for Property & Buildings, 2 years for Geological Equipment, 2 years for Computer Equipment, and 30% declining balance method for vehicles. Depreciation of an asset begins once it is available for use.
Long-lived assets are comprised of property, plant and equipment. At the end of each reporting period the carrying amounts of the Company’s long-lived assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and value in use.
Fair value is determined as the amount that would be obtained by the sale of the asset in any arm’s length transaction between knowledgeable and willing parties. Fair value of mineral assets is generally determined as the present value of the estimated cash flows expected to arise from the continued use of the asset, including an expansion projects. Value in use is determined as the present value of the estimated future cash flows expected to arise from the continued use of the asset in its present form and from its ultimate disposal.
Impairment is assessed at the CGU level, which is identified as the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets.
Non-financial assets that have been impaired are tested for possible reversal of the impairment whenever events or changes in circumstances indicate that the impairment may have reversed. When a reversal of a previous impairment is recorded, the reversal amount is adjusted for depreciation that would have been recorded had the impairment not taken place.
h) Leases
The Company recognizes assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value.
The Company, as a lessee, has recognized right-of-use assets representing its rights to use the underlying assets and lease liabilities representing its obligation to make lease payments for the lease agreements entered after the transition date which are not short term or low value leases. The right-of-use asset is measured at cost, which is equal to the initial lease liability adjusted for any lease payments at or before the commencement date, less any lease incentives received. It is subsequently measured at cost less any accumulated depreciation and impairment losses and adjusted for re-measurements of the lease liability. Right-of-use assets are depreciated over the term of the lease.
- 7 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
2. | SIGNIFICANT ACCOUNTING POLICIES (continued) |
h) Leases (continued)
A lease liability is measured at the present value of remaining lease payments, discounted at the Company’s incremental borrowing rate. It is subsequently increased by the interest cost on the lease liability, less the lease payments made. Lease liabilities are re-measured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or in the assessment of whether an extension option is reasonably certain to be exercised. The Company’s estimated weighted average incremental borrowing rate for the year ended December 31, 2020 is 12%.
i) Share-based payment transactions
Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of the goods or services received or the fair value of the equity instruments issued if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The amount recognized as an expense is adjusted to reflect the number of awards expected to vest. The offset to the recorded cost is to equity settled share-based payments reserve.
Consideration received on the exercise of stock options is recorded as share capital and the related equity settled share-based payments reserve is transferred to share capital. Charges for options that are forfeited/cancelled before vesting are transferred from equity settled share-based payment reserve to deficit. Charges for options that are expired remain in equity settled share-based payment reserve.
Where the terms and conditions of options are modified before they vest, the changes in fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
j) Valuation of equity units issued in private placements
The Company follows the pro-rata allocation method with respect to the measurement of shares and warrants issued as private placement units. This values each component at fair value and allocates total proceeds received between shares and warrants based on the pro rata relative values of the components. The fair value of the common shares is based on the closing quoted bid price on the issue date and the fair value of the common share purchase warrants is determined at the issue date using the Black- Scholes pricing model. In the event of a modification in warrants issued as private placement units, no re-measurement adjustment is recognized within equity.
k) Financial instruments
Financial assets and liabilities are recognized when the entity becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are derecognized when the rights to receive cash flows have expired or substantially all risks and rewards of ownership have been transferred. Gains and losses on derecognition are generally recognized in profit and loss.
Financial assets are classified and measured either at amortized cost, fair value through other comprehensive income ("FVOCI") or fair value through profit or loss ("FVTPL") based on the business model in which they are held and the characteristics of their contractual cash flows. Financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest are measured at amortized cost at the end of the subsequent accounting periods. All other financial assets including equity investments are measured at their fair values at the end of subsequent accounting periods, with any change taken through profit or loss or other comprehensive income.
- 8 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
2. | SIGNIFICANT ACCOUNTING POLICIES (continued) |
k) Financial instruments (continued)
All financial instruments are initially recognized at fair value on the statement of financial position. Subsequent measurement of financial instruments is based on their classification. Financial assets and liabilities classified at FVTPL are measured at fair value with changes in those fair values recognized in profit or loss for the period. Financial assets and liabilities classified at amortized cost are measured at amortized cost using the effective interest method.
The following table sets out the classifications of the Company’s financial assets and liabilities:
IFRS requires an expected credit loss model for calculating the impairment of financial assets.
The expected credit loss model requires an entity to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in initial recognition. Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods, if the amount of the loss decreases and the decrease can be objectively related to an event occurring after the impairment was recognized.
Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods, if the amount of the loss decreases and the decrease can be objectively related to an event occurring after the impairment was recognized.
l) Investments
Purchases and sales of investments are recognized on the settlement date. Realized gains and losses on disposal of investments and unrealized gains and losses in the fair value of investments are reflected in the statement of loss and comprehensive loss. Upon disposal of an investment, previously recognized unrealized gains or losses are reversed so as to recognize the full realized gain or loss in the period of disposition. All transaction costs associated with the acquisition and disposition of investments are expensed to the statement of loss and comprehensive loss as incurred. Interest income and other income are recorded on an accrual basis.
The fair value of investments is determined as follows:
(a) | Securities that are traded in an active market and for which no sales restrictions apply, are presented at fair value based on quoted closing trade prices at the date of statement of financial position. If there were no trades on the date of the statement of financial position, these securities are presented at the closing price on the last date the security traded. These investments are included in Level 1 of the fair value hierarchy. |
(b) | Securities that are traded in an active market, but which are escrowed or otherwise restricted as to their sale or transfer, are recorded at amounts discounted from market value to a maximum of 10%. In determining the discount for such investments, the Company considers the nature and length of the restriction. These investments are included in Level 2 of the fair value hierarchy. |
- 9 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
2. | SIGNIFICANT ACCOUNTING POLICIES (continued) |
l) Investments (continued)
(c) | Securities that are not traded in an active market or are valued based on unobservable market inputs are included in the Level 3 of the fair value hierarchy. The Company did not have any Level 3 investments as at December 31, 2020, and 2019. |
m) Flow-through shares
The Company will from time to time issue flow-through common shares to finance a significant portion of its exploration program. Pursuant to the terms of the flow-through share agreements, these shares transfer the tax deductibility of qualifying resource expenditures to investors. On issuance, the Company bifurcates the flow-through share into i) a flow-through share premium, equal to the estimated premium, if any, investors pay for the flow-through feature, which is recognized as a liability, and ii) share capital. Upon expenditures being incurred, the Company derecognizes the liability and recognizes a deferred tax liability for the amount of tax reduction renounced to the shareholders. The premium is recognized as recovery of flow-through premium liability and the related deferred tax is recognized as a tax provision.
Proceeds received from the issuance of flow-through shares are required to be used only for Canadian resource property exploration expenditures within a two-year period. The Company may also be subject to a Part XII.6 tax on flow-through proceeds renounced under the Look-back Rule, in accordance with the Government of Canada flow-through regulations. When applicable, this tax is accrued as an expense until paid.
n) Earnings and loss per share
The Company presents basic and diluted earnings and loss per share data for its common shares, calculated by dividing the earnings attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted earnings or loss per share does not adjust the earnings or loss attributable to common shareholders or the weighted average number of common shares outstanding when the effect is anti-dilutive.
o) Income taxes
Income tax on the profit or loss for the years presented comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.
Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year end, adjusted for amendments to tax payable with regards to previous years.
Deferred tax is provided using the statement of financial position liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at year end applicable to the period of expected realization or settlement.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.
- 10 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
2. | SIGNIFICANT ACCOUNTING POLICIES (continued) |
p) Significant Accounting Estimates and Judgments
The preparation of these financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.
These financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates may be pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant assumptions about the future and other sources of estimation uncertainty that management has made at year end that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to the following:
(i) | Critical accounting estimates |
Valuation of Options Granted and Warrants Issued
The fair value of common share purchase options granted and warrants issued is determined at the issue date using the Black-Scholes option pricing model. The Black-Scholes model involves six key inputs to determine the fair value of an option, which are: risk-free interest rate, exercise price, market price at the grant date, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are or could be affected by significant factors that are out of the Company’s control. The Company is also required to estimate the future forfeiture rate of options based on historical information in its calculation of share-based payments expense. These estimates impact the values of stock-based compensation expense, share capital, and reserves.
Computation of Income Taxes
The determination of tax expense for the period and deferred tax assets and liabilities involves significant estimation and judgment by management. In determining these amounts, management interprets tax legislation in a variety of jurisdictions and make estimates of the expected timing of the reversal of deferred tax assets and liabilities. Management also makes estimates of future earnings which affect the extent to which potential future tax benefits may be used.
The Company is subject to assessments by taxation authorities, which may interpret legislation differently. These differences may affect the final amount or the timing of the payment of taxes. We provide for such differences where known based on our best estimate of the probable outcome of these matters.
Shares Issued to Acquire Exploration and Evaluation Assets
From time to time, the Company issues common shares in the course of acquiring exploration and evaluation assets. When shares are issued without cash consideration, the transaction is recognized at the fair value of the assets received. In the event that the fair value of the assets cannot be reliably determined, the Company will recognize the transaction at the fair value of the shares issued. These estimates impact the value of share capital and exploration and evaluation assets.
- 11 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
2. | SIGNIFICANT ACCOUNTING POLICIES (continued) |
p) Significant Accounting Estimates and Judgments (continued)
(i) | Critical accounting estimates (continued) |
Valuation of flow-through premium
The determination of the valuation of flow-through premium and warrants in equity units is subject to significant judgment and estimates. The flow-through premium is valued as the estimated premium that investors pay for the flow-through feature, being the portion in excess of the market value of shares without the flow-through feature issued in concurrent private placement financing.
(ii) | Critical accounting judgments |
Impairment of Exploration and Evaluation Assets
Management is required to assess impairment in respect to the Company’s intangible mineral property interests. The triggering events are defined in IFRS 6. In making the assessment, management is required to make judgments on the status of each project and the future plans towards finding commercial reserves. The carrying value of each exploration and evaluation asset is reviewed regularly for conditions that may suggest impairment. This review requires significant judgment. Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the property’s value; whether there has been an accumulation of costs significantly in excess of the amounts originally expected for the property’s acquisition, development or cost of holding; and whether exploration activities produced results that are not promising such that no more work is being planned in the foreseeable future. If impairment is determined to exist, a formal estimate of the recoverable amount is performed and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount.
Management has determined that there were indicators of impairment as at December 31, 2020 and has impaired $166,662 (December 31, 2019 - $91,335) in exploration and evaluation assets. Refer to Note 3 for further information.
q) Initial application of standards, interpretations and amendments to standards and interpretations in the reporting period
In October 2018, the International Accounting Standards Board amended IFRS 3, Business Combinations, seeking to clarify whether an acquisition transaction results in the acquisition of an asset or the acquisition of a business. The amendments are effective for acquisition transactions on or after January 1, 2020, although earlier application was permitted. The amended standard has a narrower definition of a business, which could result in the recognition of fewer business combinations than under the previous standard; the implication of this is that amounts which may have been recognized as goodwill in a business combination under the previous standard may now be recognized as allocations to net identifiable assets acquired under the amended standard (with an associated effect in an entity’s results of operations that would differ from the effect of goodwill having been recognized). The Company has applied the standard prospectively from January 1, 2020. The effects of the amended standard on its financial performance and disclosure will be dependent on the facts and circumstances of any future acquisition transactions and have not been material in the current fiscal year.
r) New and amended IFRS standards not yet effective
New accounting standards and interpretations have been published that are not mandatory for the current period and have not been adopted early. These standards are not expected to have a material impact on the Company.
- 12 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
3. EXPLORATION AND EVALUATION ASSETS
The schedules below summarize the carrying costs of acquisition costs and exploration expenditures incurred to date for each exploration and evaluation asset that the Company is continuing to explore as at December 31, 2020 and December 31, 2019:
Newfoundland | |||||||||||||
Queensway(i) | Other(ii) | Ontario (iii) | Total | ||||||||||
Year ended December 31, 2020 | $ | $ | $ | $ | |||||||||
Exploration and evaluation assets | |||||||||||||
Balance as at December 31, 2019 | 658,700 | 16,500 | 425,516 | 1,100,716 | |||||||||
Additions | |||||||||||||
Acquisition costs | 75,000 | - | 25,000 | 100,000 | |||||||||
Staking costs | 37,230 | 2,100 | 3,600 | 42,930 | |||||||||
Disposal of exploration and evaluation assets | (75,000 | ) | (2,750 | ) | - | (77,750 | ) | ||||||
Impairment of exploration and evaluation assets | (10,000 | ) | (2,750 | ) | (153,912 | ) | (166,662 | ) | |||||
Balance as at December 31, 2020 | 685,930 | 13,100 | 300,204 | 999,234 | |||||||||
Exploration and evaluation expenditures | |||||||||||||
Cumulative exploration expense - December 31, 2019 | 2,633,775 | - | 837,133 | 3,470,908 | |||||||||
Assays | 848,000 | 963 | 209,159 | 1,058,122 | |||||||||
Drilling | 2,560,406 | - | - | 2,560,406 | |||||||||
Geochemistry | - | - | 5,330 | 5,330 | |||||||||
Geophysics | 838,235 | - | - | 838,235 | |||||||||
Office & general | 47,130 | 499 | 714 | 48,343 | |||||||||
Property taxes, mining leases and rent | 46,217 | - | 5,812 | 52,029 | |||||||||
Reclamation | 163,598 | - | - | 163,598 | |||||||||
Salaries & consulting | 1,801,863 | 37,870 | 115,985 | 1,955,718 | |||||||||
Supplies & equipment | 879,816 | 6,470 | 80,803 | 967,089 | |||||||||
Travel & accommodations | 225,550 | 49 | 150 | 225,749 | |||||||||
Trenching | 231,635 | - | 31,865 | 263,500 | |||||||||
Exploration cost recovery | (30,680 | ) | - | - | (30,680 | ) | |||||||
7,611,770 | 45,851 | 449,818 | 8,107,439 | ||||||||||
Cumulative exploration expense – December 31, 2020 | 10,245,545 | 45,851 | 1,286,951 | 11,578,347 |
- 13 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
3. EXPLORATION AND EVALUATION ASSETS (continued)
Newfoundland | |||||||||||||
Queensway(i) | Other(ii) | Ontario (iii) | Total | ||||||||||
Year ended December 31, 2019 | $ | $ | $ | $ | |||||||||
Exploration and evaluation assets | |||||||||||||
Balance as at December 31, 2018 | 276,330 | 107,835 | 293,516 | 677,681 | |||||||||
Additions | |||||||||||||
Acquisition costs | 382,370 | - | 132,000 | 514,370 | |||||||||
Impairment of exploration and evaluation assets | - | (91,335 | ) | - | (91,335 | ) | |||||||
Balance as at December 31, 2019 | 658,700 | 16,500 | 425,516 | 1,100,716 | |||||||||
Exploration and evaluation expenditures | |||||||||||||
Cumulative exploration expense - December 31, 2018 | 1,982,032 | - | 831,337 | 2,813,369 | |||||||||
Assays | 37,456 | - | 1,937 | 39,393 | |||||||||
Drilling | 250,260 | - | - | 250,260 | |||||||||
Geophysics | 153,934 | - | - | 153,934 | |||||||||
Property taxes, mining leases and rent | 45,500 | - | 3,859 | 49,359 | |||||||||
Salaries & consulting | 92,831 | - | - | 92,831 | |||||||||
Supplies & equipment | 102,112 | - | - | 102,112 | |||||||||
Travel & accommodations | 9,350 | - | - | 9,350 | |||||||||
Exploration cost recovery | (39,700 | ) | - | (39,700 | ) | ||||||||
651,743 | - | 5,796 | 657,539 | ||||||||||
Cumulative exploration expense – December 31, 2019 | 2,633,775 | - | 837,133 | 3,470,908 |
(i) Queensway Project – Gander, Newfoundland
As at December 31, 2020, the Company owns a 100% interest in 86 (2019 – 64) mineral licenses including 6,041 (2019 – 3,547) claims comprising 151,030 (2019 – 88,675) hectares of land located in Gander, Newfoundland. The project rights were acquired by map staking mineral licenses and making staged payments in cash and common shares of the Company from 2016 through 2019 under nine separate, fully executed option agreements. The optioned lands carry various net smelter return (“NSR”) royalties ranging from 0.6% to 2.0% which can be reduced to 0.5% to 1.0%, at the Company’s option, with payments ranging from $250,000 to $1,000,000 to the optionors. The total cost of the NSR’s that may be purchased at the Company’s discretion is $5,250,000.
During the year ended December 31, 2020, the Company recorded an impairment of $10,000 (2019 - $Nil) in acquisition costs related to projects no longer being explored.
Disposal of Newfoundland Properties
During the year ended December 31, 2020, the Company recognized a gain on disposal of certain Newfoundland exploration and evaluation assets of $4,384,953. The Company received total non-cash consideration comprised of investments having a fair value of $4,462,703, and derecognized exploration and evaluation assets at their carrying value of $77,750. The Company retained a 2% net smelter returns royalty on future production from the mineral claims.
- 14 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
3. EXPLORATION AND EVALUATION ASSETS (continued)
(ii) Other Projects - Newfoundland
Impairment of Newfoundland Properties
During the year ended December 31, 2020, the Company recorded an impairment of $2,750 (2019 - $91,335) in acquisition costs related to projects no longer being explored.
(iii) Ontario Projects
As at December 31, 2020, the Company owns a 100% interest in the Lucky Strike project in Kirkland Lake, Ontario comprising 11,684 hectares, as well as a portfolio of mining and royalty interests throughout northeastern Ontario. The project rights were acquired by map staking mineral licenses and making staged payments in cash and common shares of the Company from 2016 through 2019 under a fully executed option agreement. The optioned lands carry an NSR ranging from 1% to 2%.
During the year ended December 31, 2020, the Company recorded an impairment of $153,912 (2019 - $Nil) in acquisition costs related to projects no longer being explored.
4. PROPERTY AND EQUIPMENT
Property and | Computer | Geological | ||||||||||||||
Buildings | Equipment | Equipment | Vehicles | Total | ||||||||||||
$ | $ | $ | $ | $ | ||||||||||||
Cost | ||||||||||||||||
Balance at December 31, 2019 | - | - | - | 45,949 | 45,949 | |||||||||||
Additions | 836,009 | 15,860 | 336,020 | 258,551 | 1,466,440 | |||||||||||
Balance at December 31, 2020 | 836,009 | 15,860 | 336,020 | 304,500 | 1,492,389 | |||||||||||
Accumulated Depreciation | ||||||||||||||||
Balance at December 31, 2019 | - | - | - | 16,800 | 16,800 | |||||||||||
Depreciation | 6,998 | 4,090 | 45,474 | 41,898 | 98,460 | |||||||||||
Balance at December 31, 2020 | 6,998 | 4,090 | 45,474 | 58,698 | 115,260 | |||||||||||
Carrying Amount | ||||||||||||||||
At December 31, 2019 | - | - | - | 29,149 | 29,149 | |||||||||||
At December 31, 2020 | 829,011 | 11,770 | 290,546 | 245,802 | 1,377,129 |
5. | INVESTMENTS |
The Company classifies its investments at FVTPL. Realized gains and losses on disposal of investments and unrealized gains and losses in the fair value of investments are reflected in the statement of loss and comprehensive loss in the period in which they occur.
- 15 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
5. | INVESTMENTS (continued) |
Investments consisted of the following as at December 31, 2020 and 2019:
December | December | |||||||
31, 2020 | 31, 2019 | |||||||
$ | $ | |||||||
Exploits Discovery Corp.(i) | 3,957,368 | - | ||||||
MetalsTech Limited | 604,852 | 114,937 | ||||||
Novo Resources Corp. | 16,527,777 | - | ||||||
Investments, end of year | 21,089,997 | 114,937 |
(i) | The Exploits Discovery Corp. investment is subject to certain resale restrictions expiring December 8, 2021 and trading restrictions expiring April 8, 2021 and was discounted in the amount of $439,708. |
An analysis of investments including related gains and losses for the year ended December 31, 2020 and 2019 is as follows:
Year ended December 31, | ||||||||
2020 | 2019 | |||||||
$ | $ | |||||||
Investments, beginning of year | 114,937 | 398,102 | ||||||
Investments received in private placement | 16,736,110 | - | ||||||
Investments received in sale of exploration and evaluation assets | 4,462,704 | - | ||||||
Disposition of investments | - | (280,786 | ) | |||||
Realized (loss) on investments | - | (120,734 | ) | |||||
Unrealized (loss) gain on investments | (223,754 | ) | 118,355 | |||||
Investments, end of year | 21,089,997 | 114,937 |
6. | PREPAID EXPENSES AND DEPOSITS |
December 31, | December 31, | |||||||
2020 | 2019 | |||||||
$ | $ | |||||||
Prepaid expenses | 761,595 | 6,570 | ||||||
Mineral license deposits | 496,608 | 429,866 | ||||||
Prepaid expenses and deposits, end of year | 1,258,203 | 436,436 |
7. | FLOW-THROUGH SHARE PREMIUM |
Issued | Issued | |||||||||||
June 4, 2020 | June 10, 2020 | Total | ||||||||||
$ | $ | $ | ||||||||||
Balance at December 31, 2019 | - | - | - | |||||||||
Liability incurred on flow-through shares issued | 1,697,704 | 259,915 | 1,957,619 | |||||||||
Settlement of flow-through share premium on expenditures incurred | (1,536,893 | ) | (235,295 | ) | (1,772,188 | ) | ||||||
Balance at December 31, 2020 | 160,811 | 24,620 | 185,431 |
- 16 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
7. | FLOW-THROUGH SHARE PREMIUM (continued) |
Flow-through share arrangements entitle the holder of the flow-through share to a 100% tax deduction in respect of qualifying Canadian exploration expenses as defined in the Income Tax Act, Canada (“Qualifying CEE”). At December 31, 2020, the Company incurred $6,443,941 in Qualifying CEE and amortized a total of $1,772,188 of its flow-through liabilities.
The flow-through premium liability does not represent a cash liability to the Company and is to be fully amortized to the statement of loss and comprehensive loss pro-rata with the amount of qualifying expenditures that will be incurred.
As at December 31, 2020, the Company must spend another $674,255 of Qualifying CEE within one year to satisfy its remaining flow-through obligations.
8. | SHARE CAPITAL AND RESERVES |
Authorized Share Capital
At December 31, 2020, the authorized share capital comprised an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.
Details of Common Shares Issued in 2020
During the year ended December 31, 2020, 9,195,000 stock options were exercised at a weighted average exercise price of $0.77 per share for gross proceeds of $7,036,624.
During the year ended December 31, 2020, 16,554,292 warrants were exercised at a weighted average exercise price of $0.77 per share for gross proceeds of $12,721,057.
On March 6, 2020, the Company completed a private placement consisting of 15,000,000 common shares in exchange for non-cash consideration of 6,944,444 common shares of Novo Resources Corp. (TSXV: NVO) at a price of $2.41 per share for gross proceeds of $16,736,110.
On June 4, 2020, the Company completed a non-brokered private placement financing of 3,994,597 flow-through common shares at a price of $1.50 per common share for gross proceeds of $5,991,896. Finders’ fees paid were $69,394 in cash and the issuance of 64,282 warrants exercisable into common shares of the Company at $1.50 per share for two years from the date of issue with a fair value of $25,912. The premium received on the flow-through shares issued was determined to be $1,697,704.
On June 10, 2020, the Company completed a non-brokered private placement financing of 866,385 flow-through common shares at a price of $1.30 per common share for gross proceeds of $1,126,300. Finders’ fees paid were $56,793 in cash and the issuance of 43,582 warrants exercisable into common shares of the Company at $1.30 per share for two years from the date of issue with a fair value of $16,271. The premium received on the flow-through shares issued was determined to be $259,915.
On August 11, 2020, the Company completed an initial public offering of 21,000,000 common shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 13, 2020, its agents exercised their overallotment option in full to offer and sell an additional 3,150,000 common shares for gross proceeds of $4,095,000. The Company paid share issuance costs of $2,906,419 in cash and issued 1,379,768 agents’ warrants with a fair value of $771,769. The agents’ warrants are exercisable into common shares of the Company at $1.30 per share for 12 months from the date of issue in connection with the initial public offering.
- 17 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
8. | SHARE CAPITAL AND RESERVES (continued) |
Details of Common Shares Issued in 2019
During fiscal 2019, the Company issued 517,499 common shares at $0.40 per share totaling $207,000, pursuant to the acquisition of exploration and evaluation assets in accordance with the terms of certain property option agreements.
During fiscal 2019, 2,930,000 stock options were exercised at $0.15 per share for gross proceeds of $439,500.
On June 18, 2019, the Company completed a non-brokered private placement financing of 1,875,000 common shares at $0.40 per share for gross proceeds of $750,000.
On July 3, 2019, the Company completed a non-brokered private placement financing of 1,250,000 common shares at $0.40 per share for gross proceeds of $500,000.
On November 29, 2019, the Company completed a non-brokered private placement financing of 16,000,000 units at $0.50 per unit for gross proceeds of $8,000,000. Each unit consisted of one common share and one warrant. The warrants were valued at $2,252,458. Each warrant entitles the holder to purchase one additional common share at a price of $0.75 per share for three years from the issuance date.
Share Purchase Option Compensation Plan
The Company has a share purchase option plan (the “Plan”) approved by the Company’s shareholders that allows it to grant share purchase options, subject to regulatory terms and approval, to its officers, directors, employees and service providers. The Plan is based on the maximum number of eligible shares not exceeding 10% in the aggregate and 5% with respect to any one optionee of the Company’s outstanding common shares at the time of grant. If outstanding share purchase options are exercised or expire, and/or the number of issued and outstanding common shares of the Company increases, then the share purchase options available to grant under the Plan increase proportionately. The exercise price and vesting terms of each share purchase option is set by the Board of Directors at the time of grant. Share purchase options granted are subject to a four-month hold period and exercisable for a period determined by the Board of Directors which cannot exceed five years.
The continuity of share purchase options for the year ended December 31, 2020 is as follows:
Outstanding | Outstanding | Exercisable | ||||||||||||||||||||||||||
Exercise | December | Cancelled/ | December | December | ||||||||||||||||||||||||
Expiry date | Price | 31, 2019 | Granted | Exercised | Expired | 31, 2020 | 31, 2020 | |||||||||||||||||||||
February 20, 2022 | $ | 0.15 | 1,930,000 | - | (1,855,000 | ) | - | 75,000 | 75,000 | |||||||||||||||||||
September 30, 2023 | $ | 0.40 | 350,000 | - | (100,000 | ) | - | 250,000 | 250,000 | |||||||||||||||||||
December 17, 2024 | $ | 0.50 | 5,605,000 | - | (2,920,000 | ) | - | 2,685,000 | 2,685,000 | |||||||||||||||||||
April 18, 2025 | $ | 1.00 | - | 2,300,000 | (800,000 | ) | - | 1,500,000 | 1,500,000 | |||||||||||||||||||
May 23, 2025 | $ | 1.075 | - | 1,670,000 | (1,445,000 | ) | - | 225,000 | 225,000 | |||||||||||||||||||
August 11, 2025 | $ | 1.40 | - | 5,040,000 | (2,075,000 | ) | - | 2,965,000 | 2,965,000 | |||||||||||||||||||
September 3, 2025 | $ | 2.07 | - | 215,000 | - | - | 215,000 | 215,000 | ||||||||||||||||||||
October 1, 2025 | $ | 2.15 | - | 25,000 | - | - | 25,000 | 25,000 | ||||||||||||||||||||
December 31, 2025 | $ | 4.10 | - | 6,242,500 | - | - | 6,242,500 | 6,242,500 | ||||||||||||||||||||
7,885,000 | 15,492,500 | (9,195,000 | ) | - | 14,182,500 | 14,182,500 | ||||||||||||||||||||||
Weighted average exercise price $ | 0.41 | 2.40 | 0.77 | - | 2.36 | 2.36 | ||||||||||||||||||||||
Weighted average contractual remaining life (years) | 4.22 | 5.0 | - | - | 4.58 | 4.58 |
- 18 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
8. | SHARE CAPITAL AND RESERVES (continued) |
The continuity of share purchase options for the year ended December 31, 2019 is as follows:
Outstanding | Outstanding | Exercisable | ||||||||||||||||||||||||||
Exercise | December | Cancelled/ | December | December | ||||||||||||||||||||||||
Expiry date | Price | 31, 2018 | Granted | Exercised | Expired | 31, 2019 | 31, 2019 | |||||||||||||||||||||
February 20, 2022 | $ | 0.15 | 4,860,000 | - | (2,930,000 | ) | - | 1,930,000 | 1,930,000 | |||||||||||||||||||
September 30, 2023 | $ | 0.40 | 350,000 | - | - | - | 350,000 | 350,000 | ||||||||||||||||||||
December 17, 2024 | $ | 0.50 | - | 5,605,000 | - | - | 5,605,000 | 5,605,000 | ||||||||||||||||||||
5,210,000 | 5,605,000 | (2,930,000 | ) | - | 7,885,000 | 7,885,000 | ||||||||||||||||||||||
Weighted average exercise price $ | 0.17 | 0.50 | 0.15 | - | 0.41 | 0.41 | ||||||||||||||||||||||
Weighted average contractual remaining life (years) | 3.18 | 5.0 | - | - | 4.22 | 4.22 |
The weighted average fair value of share purchase options exercised during the year ended December 31, 2020 is $0.56 (2019 - $0.15). The weighted average share price of options exercised at the date of exercise during the year ended December 31, 2020 is $3.12 (2019 – $0.49).
The weighted average fair value of share purchase options granted during the year ended December 31, 2020 is $1.71 (2019 - $0.38).
Options were priced based on the Black-Scholes option pricing model using the following weighted average assumptions to estimate the fair value of options granted:
Year ended December 31, | ||||||||
2020 | 2019 | |||||||
Risk-free interest rate | 0.39 | % | 1.64 | % | ||||
Expected option life in years | 5.0 | 5.0 | ||||||
Expected share price volatility(i) | 96.82 | % | 103 | % | ||||
Grant date share price | $ | 2.39 | $ | 0.50 | ||||
Expected forfeiture rate | - | - | ||||||
Expected dividend yield | Nil | Nil |
(i) | The expected share price volatility is based on the average historical share price of comparable companies over the life of the option. |
- 19 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
8. | SHARE CAPITAL AND RESERVES (continued) |
Warrants
The continuity of warrants for the year ended December 31, 2020 is as follows:
Outstanding | Outstanding | |||||||||||||||||||||||
Exercise | December | Cancelled/ | December | |||||||||||||||||||||
Expiry date | Price | 31, 2019 | Issued | Exercised | Expired | 31, 2020 | ||||||||||||||||||
August 11, 2021 | $ | 1.30 | - | 1,190,769 | (476,307 | ) | - | 714,462 | ||||||||||||||||
August 13, 2021 | $ | 1.30 | - | 188,999 | (75,600 | ) | - | 113,399 | ||||||||||||||||
May 12, 2022 | $ | 1.30 | - | 39,475 | - | - | 39,475 | |||||||||||||||||
May 13, 2022 | $ | 1.50 | - | 36,052 | - | - | 36,052 | |||||||||||||||||
June 4, 2022 | $ | 1.50 | - | 28,230 | (2,385 | ) | - | 25,845 | ||||||||||||||||
June 10, 2022 | $ | 1.30 | - | 4,107 | - | - | 4,107 | |||||||||||||||||
November 29, 2022 | $ | 0.75 | 16,000,000 | - | (16,000,000 | ) | - | - | ||||||||||||||||
16,000,000 | 1,487,632 | (16,554,292 | ) | - | 933,340 | |||||||||||||||||||
Weighted average exercise price $ | 0.75 | 1.31 | 0.77 | - | 1.31 | |||||||||||||||||||
Weighted average contractual remaining life (years) | 2.92 | 1.07 | - | - | 0.70 |
The continuity of warrants for the year ended December 31, 2019 is as follows:
Outstanding | Outstanding | |||||||||||||||||||||||
Exercise | December 31, | Cancelled/ | December 31, | |||||||||||||||||||||
Expiry date | Price | 2018 | Issued | Exercised | Expired | 2019 | ||||||||||||||||||
November 29, 2022 | $ | 0.75 | - | 16,000,000 | - | - | 16,000,000 | |||||||||||||||||
- | 16,000,000 | - | - | 16,000,000 | ||||||||||||||||||||
Weighted average exercise price $ | - | 0.75 | - | - | 0.75 | |||||||||||||||||||
Weighted average contractual remaining life (years) | - | 3.0 | - | - | 2.92 |
The weighted average fair value of warrants exercised during the year ended December 31, 2020 is $0.15 (2019 - $Nil). The weighted average share price of warrants exercised at the date of exercise during the year ended December 31, 2020 is $1.41 (2019 – $Nil).
The weighted average fair value of warrants issued during the year ended December 31, 2020 is $0.55 (2019 - $0.14).
- 20 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
8. | SHARE CAPITAL AND RESERVES (continued) |
Warrants were priced based on the Black-Scholes option pricing model using the following weighted average assumptions to estimate the fair value of warrants issued:
Year ended December 31, | ||||||||
2020 | 2019 | |||||||
Risk-free interest rate | 0.26 | % | 1.56 | % | ||||
Expected option life in years | 1.07 | 3.0 | ||||||
Expected share price volatility(i) | 91.94 | % | 75.03 | % | ||||
Grant date share price | $ | 1.41 | $ | 0.50 | ||||
Expected forfeiture rate | - | - | ||||||
Expected dividend yield | Nil | Nil |
(i) | The expected share price volatility is based on the average historical share price of comparable companies over the life of the warrant. |
9. | RELATED PARTY BALANCES AND TRANSACTIONS |
All transactions with related parties have occurred in the normal course of operations and on terms and conditions that are similar to those of transactions with unrelated parties and are measured at the amount of consideration paid or received. A summary of the Company’s related party transactions with corporations having similar directors and officers, being Goldspot Discoveries Inc. and Mexican Gold Mining Corp., is as follows:
Year ended December 31, | ||||||||
2020 | 2019 | |||||||
$ | $ | |||||||
Amounts paid to Goldspot Discoveries Inc. (i) for administration, exploration and evaluation | (147,690 | ) | (163,500 | ) | ||||
Amounts paid to Mexican Gold Mining Corp. (ii) for legal fees | (127,234 | ) | - | |||||
Issuance of common shares to Goldspot Discoveries Inc. in a private placement | - | (750,000 | ) | |||||
Options exercised by members of key management | 5,753,625 | 375,000 |
(i) | Goldspot Discoveries Inc. is a related entity having the following common director and officer to the Company: Denis Laviolette, Director and President. |
(ii) | Mexican Gold Mining Corp. is a related entity having the following common director and officer to the Company: John Anderson, Director, Michael Kanevsky, Chief Financial Officer. On January 26, 2020 the Company entered into a binding letter agreement with Mexican Gold Mining Corp. (“MGMC”) to have all of the issued and outstanding shares of the Company acquired by MGMC. On February 19, 2020, the Company announced that the binding letter agreement was mutually terminated. |
There are no ongoing contractual commitments resulting from these transactions with related parties.
Key management personnel compensation
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers.
During the year ended December 31, 2020, key management personnel compensation totaled $23,887,832 (2019 - $2,392,822) comprised of salaries, consulting, and bonuses of $1,452,053 (2019 - $786,899) paid to the Chief Financial Officer, the Chief Operating Officer and companies controlled by the Company’s Chief Executive Officer and Executive Chairman, $20,000 (2019 - $Nil) paid to directors, and share-based compensation of $22,415,779 (2019 - $1,605,923) relating to 13,310,000 (2019 – 4,225,000) stock options granted to directors and officers of the Company.
- 21 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
9. | RELATED PARTY BALANCES AND TRANSACTIONS (continued) |
As at December 31, 2020, $Nil is included in accounts payable and accrued liabilities for amounts owed to key management personnel (2019 - $21,667 owed to the Chief Operating Officer).
Under the terms of their management agreements, certain officers of the Company are entitled to 18 months of base pay in the event of their agreements being terminated without cause.
10. | LOSS PER SHARE |
Year ended December 31, | ||||||||
2020 | 2019 | |||||||
Loss attributable to common shareholders ($) | 32,534,439 | 4,020,032 | ||||||
Weighted average number of common shares outstanding | 112,657,850 | 60,041,181 | ||||||
Loss per share attributed to common shareholders | $ | 0.29 | $ | 0.07 |
Diluted loss per share did not include the effect of 14,182,500 (2019 – 7,885,000) share purchase options and 933,340 (2019 – 16,000,000) common share purchase warrants as they are anti-dilutive.
11. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS |
Year ended December 31, | ||||||||
2020 | 2019 | |||||||
$ | $ | |||||||
Non-cash investing and financing activities: | ||||||||
Investments received for exploration and evaluation assets | 4,462,703 | - | ||||||
Investments received for private placement | 16,736,110 | - | ||||||
Issuance of shares pursuant to the acquisition of exploration and evaluation assets | 207,000 | |||||||
Agents warrants issued in private placements | 42,183 | 2,252,458 | ||||||
Agents warrants issued in initial public offering | 771,769 | - | ||||||
Right-of-use assets | 54,034 | - | ||||||
Cash paid for income taxes | - | - | ||||||
Cash paid for interest | - | - |
12. | SEGMENTED INFORMATION |
The Company’s operations are limited to a single reportable segment, being mineral exploration and evaluation. All of the Company’s evaluation and exploration assets are located in Canada.
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New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
13. | INCOME TAXES |
The recovery of income taxes shown in the statements of loss (income) and comprehensive loss (income) differs from the amounts obtained by applying statutory rates to the loss before provision for income taxes due to the following:
2020 | 2019 | |||||||
$ | $ | |||||||
(Loss) income before income taxes | (32,534,439 | ) | (4,020,032 | ) | ||||
Income tax (recovery) expense at statutory rate | (8,784,000 | ) | (1,065,000 | ) | ||||
Permanent and other differences | 6,697,000 | 584,000 | ||||||
Change in unrecognized deductible temporary differences | 2,087,000 | 481,000 | ||||||
Income tax recovery | - | - | ||||||
Statutory tax rate | 27.00 | % | 26.50 | % |
Deferred income taxes reflect the net tax effects of differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:
2020 | 2019 | |||||||
$ | $ | |||||||
Deferred income tax assets | ||||||||
Investments | 94,000 | 63,000 | ||||||
Exploration and evaluation assets | 840,000 | 456,000 | ||||||
Non-capital tax loss carryforward | 410,000 | 300,000 | ||||||
Net capital loss carryforward | 46,000 | 8,000 | ||||||
Other | 655,000 | (1,000 | ) | |||||
Capital asset | 30,000 | |||||||
2,075,000 | 826,000 | |||||||
Unrecognized deferred tax asset | (2,075,000 | ) | (826,000 | ) | ||||
- | - |
As at December 31, 2020, the Company has Canadian non-capital loss carry forwards of $1,517,270 that may be available for tax purposes. The Company’s non-capital losses expire as follows:
Expiry Date | $ | ||||
2036 | 89 | ||||
2037 | - | ||||
2038 | - | ||||
2039 | 1,084,955 | ||||
2040 | 432,226 | ||||
1,517,270 |
- 23 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
14. | COMMITMENTS |
The following table summarizes the Company’s long-term commitments as at December 31, 2020:
4-5 | More than | |||||||||||||||||||
1 Year | 2 Years | 3 Years | Years | 5 Years | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
Lease obligations | 53,201 | - | - | - | - |
The Company is required to spend approximately $1,844,956 over the next 12 months to keep all claims owned in good standing.
The following table summarizes the Company’s long-term commitments as at December 31, 2019:
4-5 | More than | |||||||||||||||||||
1 Year | 2 Years | 3 Years | Years | 5 Years | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
Option payments for exploration and evaluation assets | - | 75,000 | - | - | - |
15. | FINANCIAL INSTRUMENTS |
The Company thoroughly examines the various financial instrument risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include credit risk, liquidity risk, currency risk, and interest rate risk. Where material, these risks are reviewed and monitored by the Board of Directors.
(a) Fair Values
Financial assets and liabilities measured at fair value are recognized according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy are as follows:
Level 1 – | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | |
Level 2 – | Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. | |
Level 3 – | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
The Company’s only financial instrument measured at fair value are its investments, for which the fair value is determined using closing prices at the statement of financial position date with any unrealized gain or loss recognized in profit or loss.
The carrying values of other financial instruments, including cash, deposits and amounts receivable, and accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of these financial instruments.
- 24 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
15. | FINANCIAL INSTRUMENTS (continued) |
(a) Fair Values (continued)
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||
Recurring measurements | Carrying amount | Fair value | ||||||||||||||||||
Investments, at fair value | ||||||||||||||||||||
December 31, 2020 | 21,089,997 | 17,132,629 | 3,957,368 | - | 21,089,997 | |||||||||||||||
December 31, 2019 | 114,937 | 114,937 | - | - | 114,937 |
(b) Financial Instrument Risk Exposure
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company does not have financial instruments that potentially subject the Company to credit risk. Overall, the Company’s credit risk has not changed significantly from the prior year. Sales taxes recoverable are due from the Canada Revenue Agency and the Company places its cash with financial institutions with high credit ratings, therefore in management’s judgment, credit risk is low.
There have been no changes in management’s methods for managing credit risk during the years ended December 31, 2020 and 2019.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has in place a planning and budgeting process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. The Company has historically relied on issuance of shares to fund exploration programs and may require doing so again in the future. As at December 31, 2020, the Company has total liabilities of $635,083 and cash of $47,731,125 which is available to discharge these liabilities (December 31, 2019 – total liabilities of $392,849 and cash of $7,336,638). Accordingly, in management’s judgment, liquidity risk is low.
There have been no changes in management’s methods for managing liquidity risk during the years ended December 31, 2020 and 2019.
Market risk
(i) Currency risk
Financial instruments that impact the Company’s net earnings or other comprehensive income due to currency fluctuation include cash accounts denominated in US dollars and investments denominated in Australian dollars. Fluctuations in the exchange rate between the US dollar and the Canadian dollar, and the Australian dollar and the Canadian dollar at December 31, 2020 would not have a material impact on the Company’s net earnings and other comprehensive income.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. As the Company deposits its short-term investments into fixed rate guaranteed investment certificates with one-year maturities or less, the Company is not exposed to interest rate risk.
- 25 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
15. | FINANCIAL INSTRUMENTS (continued) |
(b) | Financial Instrument Risk Exposure (continued) |
Market risk (continued)
(iii) Commodity price risk
Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company’s property has exposure to predominantly gold. Commodity prices, especially gold, greatly affect the value of the Company and the potential value of its property and investments.
(iv) Equity price risk
Equity price risk is the risk that the fair value of or future cash flows from the Company’s financial instruments will significantly fluctuate because of changes in market prices. The Company is exposed to market risk in trading its investments in unfavorable market conditions which could result in dispositions of investments at less than favorable prices. Additionally, the Company adjusts its investments to fair value at the end of each reporting period. This process could result in write-downs of the Company’s investments over one or more reporting periods, particularly during periods of overall market instability. The sensitivity of the Company’s net income (loss) to changes in market prices at December 31, 2020 would change the Company’s net income (loss) by $2,109,000 as a result of a 10% change in the market price of its investments.
There have been no changes in management’s methods for managing market risks during the years ended December 31, 2020 and 2019.
16. | CAPITAL MANAGEMENT |
The Company’s objectives when managing capital are:
● | To safeguard our ability to continue as a going concern in order to develop and operate our current projects; |
● | Pursue strategic growth initiatives; and |
● | To maintain a flexible capital structure which lowers the cost of capital. |
In assessing our capital structure, we include in our assessment the components of equity consisting of common shares, stock options and warrants, and deficit that as at December 31, 2020 totalled $72,901,845 (December 31, 2019 - $8,962,187). In order to facilitate the management of capital requirements, the Company prepares annual expenditure budgets and continuously monitors and reviews actual and forecasted cash flows. The annual and updated budgets are monitored and approved by the Board of Directors. To maintain or adjust the capital structure, the Company may, from time to time, issue new shares, issue new debt, repay debt or dispose of non-core assets. The Company’s current capital resources are sufficient to carry out our exploration plans and support operations through the current operating period.
The Company is not subject to any capital requirements imposed by a regulator.
There were no changes in the Company’s approach to capital management during the years ended December 31, 2020 and 2019.
- 26 -
New Found Gold Corp.
Notes to the Financial Statements
For the years ended December 31, 2020 and 2019
(Expressed in Canadian Dollars Unless Otherwise Noted)
17. | SUBSEQUENT EVENTS |
Private Placement
Subsequent to December 31, 2020, the Company completed a non-brokered private placement of 2,857,000 flow-through common shares at a price of $5.25 per common share for gross proceeds of $14,999,250. The Company paid finder’s fees of $524,974 in cash.
Stock Options Exercised
Subsequent to December 31, 2020, 335,000 stock options were exercised at a weighted average exercise price of $0.59 for gross proceeds of $196,200.
Warrants Exercised
Subsequent to December 31, 2020, 291,830 warrants were exercised at a weighted average exercise price of $1.31 for gross proceeds of $381,539.
- 27 -
Exhibit 99.5
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
The following discussion is management’s assessment and analysis of the results and financial condition of New Found Gold Corp. (the “Company” or “NFG”) and should be read in conjunction with the accompanying unaudited condensed interim financial statements and related notes. The financial data was prepared using accounting policies consistent with International Financial Reporting Standards (“IFRS”) and all figures are reported in Canadian dollars unless otherwise indicated. Please refer to the cautionary note regarding forward-looking statements and information within this Management’s Discussion & Analysis (“MD&A”) and the Risks Factors discussed in the Company’s most recent Annual Information Form on file with the Canadian provincial securities regulatory authorities.
This MD&A contains forward-looking information and forward-looking statements, within the meaning of applicable Canadian securities legislation, (collectively, “forward-looking statements”), that involve numerous risks and uncertainties. The Company continually seeks to minimize its exposure to business risks, but by the nature of its business and exploration activities and size, will always have some risk. These risks are not always quantifiable due to their uncertain nature. Should one or more of these risks and uncertainties, including those described under the headings “Risks and Uncertainties” and “Cautionary Notes Regarding Forward-Looking Statements” materialize, or should underlying assumptions prove incorrect, then actual results may vary materially from those expressed or implied in forward-looking statements. The effective date of this report is August 27, 2021.
The technical content disclosed in this MD&A was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer, and a Qualified Person as defined under National Instrument 43-101. Mr. Matheson consents to the publication of this MD&A, by NFG. The scientific and technical information in this MD&A relating to the Queensway Project is derived from, and in some instances is a direct extract from, and is based on the assumptions, qualifications and procedures set out in, the report entitled “43-101 Technical Report for the Queensway Project, Newfoundland, Canada” with an effective date of May 27, 2021, prepared in accordance with NI 43-101 (the “Queensway Technical Report”). Reference should be made to the full text of the Queensway Technical Report, which is available for review under the Company’s profile on SEDAR at www.sedar.com.
Description of Business
The Company was incorporated on January 6, 2016, under the Business Corporations Act (Ontario). On June 23, 2020, the Company continued as a British Columbia corporation under the Business Corporation Act in the province of British Columbia. The Company’s head office is located at 1430 – 800 West Pender Street, Vancouver, British Columbia V6C 2V6, and its registered office is located at Suite 2600 – 595 Burrard Street, Vancouver, British Columbia V7X 1L3. On August 11, 2020, the Company completed an initial public offering and listed on the TSX Venture Exchange under the symbol “NFG”.
The Company is a mineral exploration company engaged in the acquisition, exploration and evaluation of resource properties with a focus on gold properties located in the Provinces of Newfoundland and Labrador and Ontario, Canada. The Company’s principal objective is to explore and develop the Queensway Project, which is located near Gander, Newfoundland and to identify other properties worthy of investment and exploration. For the purpose of NI 43-101, the Queensway Project is the Company’s only material property.
The Queensway Project is comprised of 86 mineral licenses, including 6,041 claims comprising 151,030 hectares of land located near Gander, Newfoundland. The Queensway Project is accessible by main access roads including the Trans-Canada Highway (“TCH”) that passes through the southern portion of the project and has high voltage electric transmission lines running through the project area. In addition, the Company owns a 100% interest in the Lucky Strike project in Kirkland Lake, Ontario comprising 11,684 hectares, as well as a portfolio of mining and royalty interests throughout northeastern Ontario. The Lucky Strike Property is located 10km north of Larder Lake, Ontario and is comprised of 639 single cell un-patented mining claims. The Company is well financed to advance its planned exploration activities on the projects as intended.
As of the date of this MD&A, the Company’s Board of Directors consisted of the following: Collin Kettell (Executive
Chairman), Craig Roberts, Denis Laviolette, Douglas Hurst and Quinton Hennigh.
- 1 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Additional information relating to the Company is available on the Company’s website at www.newfoundgold.ca.
Project Summary
Queensway Project, Newfoundland
Ownership
The Queensway Project contains nine optioned claim packages along with mineral licenses map staked by NFG. The Company acquired the rights to the Queensway Project by map staking mineral licenses and making a series of staged payments in cash and common shares of the Company from 2016 through 2019 under nine separate option agreements. All of the option agreements have been fully exercised resulting in 100% ownership by NFG of the mineral licenses related to such option agreements. In addition to the nine option agreements, NFG also conducted map staking resulting in 49 map staked mineral licenses, which are held 100% by NFG. The optioned lands also carry various net smelter royalties, the option agreements are described in detail below, and their location can be seen in the figure below.
Queensway Project – Option Agreement Claim Groups
- 2 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Queensway Project – Royalties Agreements and Encumbrances
1. | Linear and JBP Linear Property, NL - In July 2016, the Company acquired a 100% interest in the Linear and JBP Linear Property via an option agreement with Krinor Resources, Kevin Keats and Allan Keats. The Linear and JBP Linear property is comprised of six map staked licences covering 2,150 hectares and under the terms of the agreement the Company is to pay the optionor a total of $54,000 and issue 45,000 shares over a 36-month period; the agreement was fully executed in July 2019. A net smelter royalty grant of 0.6% is payable to the optionor along with an underlying net smelter royalty of 1.0% covering five of the six claims is payable to Paragon Minerals Corporation. This agreement contains a 2 km area of influence that subjects adjacent lands to the additional 0.6% net smelter royalty. |
2. | Unity Property, NL - In September 2016, the Company acquired a 100% interest in the Unity Property via an option agreement with Unity Resources Inc., Gary Lewis, Donna Lewis, Nigel Lewis, Leonard Lewis, and Aubrey Budgell. The unity property is comprised of ten map staked licences covering 8,150 hectares and under the terms of the agreement the Company is to pay the optionor a total of $90,000 over a 60-month period; the agreement was fully executed in June 2020. A net smelter royalty grant of 1.6% is payable to the optionor which can be reduced by 1.0% by paying the optionor $1,000,000. This agreement contains a 2 km area of influence that subjects adjacent lands but is bounded to areas east and north of the subject lands and does not impact any other optioned property. |
3. | United Gold Property, NL - In October 2016, the Company acquired a 100% interest in the United Gold Property via an option agreement with Noreen Kennedy. The United Gold property is comprised of one map staked licence covering 275 hectares and under the terms of the agreement the Company is to pay the optionor a total of $16,500 and $16,500 worth of shares are to be issued over a 6-month period; this option agreement has been fully executed and the Company is the sole owner of the property. A net smelter royalty grant of 0.6% is payable to the optionor. |
4. | Golden Bullet Property, NL - In November 2016, the Company acquired a 100% interest in the Golden Bullet Property via an option agreement with Roland Quinlan, Eddie Quinlan and Larry Quinlan. The Golden Bullet property is comprised of four map staked licences covering 1,200 hectares and under the terms of the agreement the Company is to pay the optionor a total of $125,000 and $100,000 worth of common shares of NFG are to be issued over a 36-month period; the option was fully executed in November 2019 resulting in a 100% ownership by NFG. A net smelter royalty grant of 1.6% is payable to the optionor which can be reduced by 1.0% by paying the optionor $1,000,000. This agreement contains a 2 km area of influence that subjects adjacent lands but is limited to lands acquired after the agreement date. |
5. | Blackmore Property, NL - In December 2016, the Company acquired a 100% interest in the Blackmore Property via an option agreement with Neal Blackmore. The Blackmore property is comprised of two map staked licences covering 175 hectares and under the terms of the agreement the Company is to pay the optionor a total of $10,000; this option agreement has been fully executed and the Company is the sole owner of the property. A net smelter royalty grant of 0.6% is payable to the optionor. |
6. | Guinchard Property, NL - In April 2017, the Company acquired a 100% interest in the Guinchard Property via an option agreement with Wayde Guinchard, Myrtle Guinchard and Peter Rogers. The Guinchard property is comprised of five map staked licences covering 625 hectares and under the terms of the agreement the Company is to pay the optionor a total of $45,000 and 105,000 shares over a 24-month period; the option was fully executed in April 2019 and the Company is the sole owner of the property. A net smelter royalty grant of 1.0% is payable to the optionor which can be reduced by 0.5% by paying the optionor $1,000,000. |
- 3 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
7. | JBP Linear Property, NL - In May 2017, the Company acquired a 100% interest in the JBP Linear Property via an option agreement with Roland Quinlan and Eddie Quinlan. The JBP Linear property is comprised of five map staked licences covering 1250 hectares and under the terms of the agreement the Company is to pay the optionor a total of $45,000 over a 24-month period; the option was fully executed in November 2019 and the Company is the sole owner of the property; although claim transfers are pending at the time of the report. A net smelter royalty grant of 1.6% is payable to the optionor which can be reduced by 1.0% by paying the optionor $1,000,000. |
8. | P-Pond Property, NL - In May 2017, the Company acquired a 100% interest in the P-Pond Property via an option agreement with Stephen Stockley, Mark Stockley and Edward Stockley. The P-Pond property is comprised of three map staked licences covering 175 hectares and under the terms of the agreement the Company is to pay the optionor a total of $30,000 and $10,000 worth of shares are to be issued over a 12-month period; this option agreement has been fully executed and the Company is the sole owner of the property. A net smelter royalty grant of 1.0% is payable to the optionor which can be reduced by 0.5% by paying the optionor $250,000. |
9. | Lush Property, NL - In September 2018, the Company acquired a 100% interest in the Lush Property via a purchase agreement with Paragon Minerals Corp. The Lush property is comprised of one map staked licence covering 50 hectares. Under the terms of the purchase agreement the Company is to grant a net smelter royalty of 0.5% payable to Paragon Minerals Corp along with an underlying net smelter royalty of 2.0% payable to Tom Lush which can be reduced by 1.0% by paying $1,000,000 to Tom Lush. |
10. | Queensway Map Staked Lands, NL - Between August 2016 and April 2017, the Company acquired a 100% interest of twenty-one licences covering 73,830 hectares through map staking. In April of 2020, an additional twenty-eight mineral licenses were staked totalling 64,175 hectares shown in the figure above. |
- 4 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Queensway Project – Overall Project Showing Gold Occurrences
- 5 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Queensway Project – Locations of Prospects along the AFZ and JBPFZ.
- 6 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Environmental and Exploration Permitting
All exploration activities, including reclamation, must comply with all pertinent federal and provincial laws and regulations, the fundamental requirement of which, is that exploration on crown land must prevent unnecessary or undue degradation or impact on fish and wildlife and requires reclamation if any degradation or impacts that occur. All exploration activities in Newfoundland and Labrador require an Exploration Approval from the Department of Natural Resources prior to the start of work. In this, approval requirements for the exploration are listed with contacts for the various entities given. Six Exploration Approvals are in place at the Queensway Project as of the date of this MD&A along with other associated provincial permits.
The first Exploration Approval is for diamond drilling (750 Holes) on the Queensway North (“QWN”) area shown on the map above; this approval expires on October 8, 2021. The second is for airborne geophysics, over the entire Queensway Project and expires on September 24, 2021. The third and fourth Exploration Approvals are for trenching within the Queensway South (“QWS”) area shown on the map above and expire on October 16, 2021 and June 17, 2022. A fifth Exploration Approval covers geochemical sampling and prospecting over the entire Queensway Project and expires on June 10, 2022. A sixth Exploration Approval covers diamond drilling within the GGS area near Eastern Pond and expires on October 16, 2021. Any changes to the planned work have to be submitted to the Department of Natural Resources and either an amended approval is given or a new application has to be made.
Water removal from ponds/streams etc. for trenching (washing trenches) or drilling requires a Water Use License. One water use permit is in place for the QWN claims and related diamond drilling and trenching. Two water use licenses are in place for the GGS claims to cover trenching and diamond drilling.
A number of secondary permits and authorizations are held by the Company to conduct its exploration activities related to the cutting of wood, construction of access trails and modifications to water bodies.
In October 2020, the Company submitted an environmental registration document with the Newfoundland Ministry of Environment for review related to its diamond drilling activities on the QWN claim group. The Company was released from the environmental review on December 12, 2020 subject to several operating/reporting conditions including:
• | Limitations on the percentage of land disturbance within protected public supply areas (“PPWSAs”) |
• | Requirements for the capping or sealing of drill holes in and outside of PPWSAs |
• | The establishment of a water-sampling program |
• | The development of a waste management plan |
• | The maintenance of buffers at certain shoreline, outflow, waterbodies and wetland sites and restrictions on vegetation clearing near bird habitats; and |
• | The development of a women’s employment plan |
To date, all of our operating conditions have been met, and we are in compliance with all reporting conditions.
Generally, the mineral licenses are available for exploration activities year-round and only subject to the conditions of the exploration approvals and water use license; other activities such as construction, road building, camps and water crossings may require additional permits from outside of the mines department. Mineral licenses within the southernmost portion of Gander Gold South (“GGS”), specifically licenses 024557M, 024558M, 024561M, 024563M, 024568M, and 024570M are restricted from exploration activities from mid-May to early-July due to spring habitat for Newfoundland caribou.
- 7 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Project Infrastructure
The main access roads include the TCH that passes through the southern portion of the Appleton Fault Zone (“AFZ”) / Joe Batts Pond Deformation Zone (“JBPDZ”) claim areas on the QWN, and the Northwest Gander (“NWG”) road that extends along the western portion of the property from the TCH just west of Glenwood, to the south and west of Gander Lake on the GGS. Gravel woods access roads originally built for the forestry industry, such as the AFZ access, the JBPDZ access, the JBP road and the roads to the east of the steel bridge across the NWG River and across the bridge to the east of the Southwest Gander River extend through most of the property, with areas in the extreme SE and SW the most difficult to access. The SW area is best accessed by woods roads from Route 360, the Baie D’Espoir highway, that leaves the TCH at Bishop’s Falls, approximately 70 km to the west of Glenwood.
Transportation availability includes the international airport at Gander which has bush plane and helicopter bases, a helicopter base in Appleton and shipping through the ports of Lewisporte and Botwood, 25 km and 70 km to the west respectively, and north of the TCH, both with good harbours although problems with winter shipping due to sea and pack ice.
Electricity is available from the NL provincial grid, which has three transmission lines through the Queensway Project as follows:
1) | A 350 kV HVdc direct current line which passes through the approximate centre of the GGS licences; |
2) | Two 138 kV HVac transmission lines to the north of the TCH crossing the AFZ and JBPDZ trends on the QWN licences; |
3) | A 69 kV HVac transmission line that approximately parallels the TCH to the north across the AFZ and JBPDZ trends on the QWN licences and follows the TCH and secondary routes. |
In addition, electrical power is supplied, through the provincial grid, to the towns of Glenwood and Appleton which are surrounded by the NFG Queensway licences.
Historical Work
To date there has been over 29,200 metres of core in 238 holes drilled historically on the Queensway Project by Noranda, Rubicon and various operators from the mid 1980’s through to 2012. Historical core drilling has primarily occurred north of Gander Lake along the two principal fault structures the AFZ and JBPDZ; the exploration drilling has been spread out amongst individual zones with drilling along 5 km of the AFZ targeting the Lotto, Powerline, Cokes, Keats, Dome, Trench 26, Road, Knob, Letha and Grouse Zones. Drilling at the JBPDZ has focussed along 3 km targeting the Pocket Pond and H-Pond zones and one drill hole targeting the 798 zone. Significantly lesser number of drill holes have also targeted zones south of Gander Lake including the Pauls Pond showing, Aztec and A-Zone extension and the Goose zone.
Throughout the 1980’s through mid-2000’s various operators and prospectors have completed surface geochemical sampling including tills, soils and rock samples. This amounts to roughly 2,500 till samples, over 14,000 soil samples and 6,000 rock samples spread across the large district scale project with concentrations of work around the many showings in the Queensway license group. This work has identified a number of gold in soil or gold in till anomalies that have led to surface gold discoveries or have yet to be explained with follow up exploration. Several locations throughout the project have defined surface float samples containing high grade gold mineralization some of which have led to surface gold occurrences while other locations have not been adequately explored to trace them to source.
Various historical ground geophysical surveys have been conducted throughout the Queensway Project with most of this work concentrated either along the AFZ, JBPDZ or in the region of the Paul’s Pond and Greenwood Pond showings in the QWS claim group. Over 50 different geophysical surveys including VLF, EM, MAG and IP have covered ground-based grids throughout the Queensway Project. Various anomalies have been identified and often limited follow up exploration has occurred.
- 8 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
A significant number of surface trenches have been conducted at the project with over 330 trenches. Many of the historical trenches have targeted soil and till anomalies with only some of these reaching bedrock; often the trenches not reaching bedrock have left both soil and till anomalies unexplained and open for further interpretation and exploration.
Project Geology
The Queensway Project is located within the Exploits subzone of the Dunnage zone and lies just to the west of the Gander River Ultramafic Complex (“GRUC”) fault, which is the Dunnage-Gander zones boundary. See figure below:
Queensway Project – Geological
context of the Queensway Project Geological map from Colman-Sadd et al.,
1990. A) Location of the major terranes of Newfoundland. B) Regional
geological context.
- 9 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
It mostly comprises Cambrian to Silurian meta-sedimentary rocks of the Davidsville group (Williams et al., 1988; Colman-Sadd et al., 1990; Valverde-Vaquero et al., 2006; van Staal, 2007; O’Reilly et al., 2010). The Davidsville group is divided into the Outflow Formation and the Hunt’s Cove Formation. The property south of Gander Lake also includes the boundary between the Davidsville and Indian Island groups. The latter mainly comprises Silurian siliciclastic rocks, intruded by the Mount Peyton Intrusive suite.
There are over 100 gold showings/occurrences on and around the Queensway Project however the most notable mineralized zones in the Queensway Project are the JBPDZ which includes the H-Pond, Pocket Pond, Glass, Logan and Lachlan showings and the AFZ which includes the Dome, Little, Knob, Letha, Lotto, Grouse, Road, Bullet, Trench 26, Cokes, Powerline, Keats and Bowater showings. A number of gold mineralized occurrences also occur within the QWS claim group including the Greenwood Pond, Hornet, North Pauls Pond, Aztec, Goose, Road Gabbro and LBNL showings.
Recent Exploration
NFG’s Current Drill Campaign
On August 17, 2020 the Company announced it had initiated a 100,000m HQ size diamond drilling program at the Queensway Project. The Company announced on January 6, 2021 that it has now increased the drilling program started in 2020 to a total of 200,000m and plans to continue this program through to 2022 with up to ten drill rigs. In 2020 the Company completed 66 drill holes targeting the Little-Powerline, Lotto, Dome and Keats zones for a total of 13,400m.
- 10 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Queensway North – Plan Map of Initial 2020 Drilling Grid Lines/Zones
2020 Trenching Campaign
NFG began surface excavation of a number of targets starting in July 2020 and completed 16 trenches of varying size; all of the excavation to date has occurred along the Appleton Fault Zone and includes trenching of the Little Zone, Hornet Zone, Road Zone as well as the discovery of two new zones (Regular Zone and Zone 36). Zone 36 is located 2.5 Km north-west of the Keats Zone as shown in the above figure and has been exposed along 120m of strike length and shows mineralization of Arsenopyrite, Pyrite, Chalcopyrite, Boulangerite and Visible Gold.
- 11 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020 |
2020 Field Program
Starting in June 2020, the Company initiated a field recognisance program within the QWS mineral licenses. The objective of this program is to conduct geological mapping, structural analysis, prospecting and the collection of C horizon till samples to be processed for gold grain analysis.
Initial results from the 2020 field program detailed till survey were reported on August 27, 2020 where the Company had announced it had found a new fertile gold region 45 km south of the current Queensway North drill targets. The Eastern Pond target is comprised of two areas where recent till results have shown highly anomalous total gold grain counts including a high percentage of pristine gold grains and yielded several sub-crop samples up to 15.0 g/t Au.
One till sample yielded 216 gold grains, 163 (75%) of them classified as pristine. A second cluster of samples yielded up to 155 gold grains with 127 (82%) of these classified as pristine. The pristine morphology of these grains indicates that they have not travelled far from their bedrock source.
To date the Eastern Pond target is defined by sub-crop and till sample results over an approximately 4 km of strike length (see Figures below).
- 12 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020 |
Queensway South Project: Location of the Eastern Pond Anomaly at Queensway South
- 13 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020 |
Queensway South Project: Eastern Pond anomaly and preliminary till results
Sample ID | Easting | Northing | Total Gold Grains | Pristine Gold Grains | ||||||||||||||
41674 | 629784 | 5382499 | 216 | 163 | ||||||||||||||
41656 | 630332 | 5381175 | 155 | 127 |
Queensway South Project: Eastern Pond target till samples
Field crews were remobilized to the Eastern Pond area in late 2020 to conduct follow up work including prospecting, geological mapping and the collection of additional till samples to further vector the Company’s exploration towards bedrock sources. Follow up work at Eastern Pond in late 2020 resulted in the collection of rock samples, additional tills samples and two trenches were excavated.
- 14 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020 |
2021 Field Program
In June 2021 field crews were mobilized to conduct early-stage exploration work throughout the Queensway Project including till sampling, geological mapping, rock sampling and trenching. The goal of this program will be to aid in the development of drilling targets for a planned diamond drilling program in late 2021/early 2022.
NFG’s Current Drill Campaign
The company announced on August 17, 2020 that it had initiated a 100,000m diamond drilling program at its Queensway Gold Project, this program was expanded to 200,000m on January 6, 2021. The drilling program is designed to test multiple exploration targets and zones along the 5 km of the Appleton Fault Zone and 12 km of the JBP Fault Zone.
Drilling to date has focussed along the Appleton Fault zone with nine drilling rigs active at the project as the date of the MD&A. Approximately 61,734m of drilling has been completed in 267 holes targeting the Little-Powerline, Cokes, Dome, Road, Golden Joint, Keats, Knob, Grouse, 1744, Pocket Pond and Lotto zones.
The majority of drilling to date has occurred at three zones along the Appleton Fault; the Keats Zone with 137 drill holes, the Lotto Zone with 28 drill holes, the Knob Zone with 16 drill holes and the Golden Joint zone with 14 drill holes with the balance of 40 drill holes completed at other zones/targets along the Appleton Fault. The Company is also targeting the 1744 and Pocket Pond zone along the JBP Fault zone with 32 holes completed to date.
The Company has reported a number of significant gold assay intervals from the Lotto Zone starting with its first drill hole NFGC-20-17 reporting 16.3/g/t Au over 2.20m, 41.2 g/t Au over 4.75m and a third interval of 25.4 g/t Au over 5.15 m. On January 14, 2021 the Company announced the discovery of a new zone named the “Sunday Zone” proximal to the Lotto zone along the hanging wall of the Appleton Fault zone. The new discovery represents the first known occurrence of gold mineralization along the primary Appleton Fault structure with an intercept in drill hole NFGC-20-44 grading 18.1g/t Au over 6.5m at a down hole depth of 239m. Additional gold mineralized intercepts were reported on February 23, 2021,March 23, 2021, June 23, 2021 highlighted by drill holes NFGC-21-100 reporting 224.7 g/t Au over 2.45m, NFGC-21-109 reporting 51.3 g/t Au over 3.20m, NFGC-21-115 reporting 53.3 g/t Au over 3.10m and the latest results from NFGC-21-201 reporting 150.3g/t over 11.5m.
- 15 -
Management’s Discussion and Analysis |
For the three and six months ended June 30, 2021 and 2020 |
A complete list of drill holes and assay highlights from the Lotto zone are shown below:
Hole No. | From (m) | To (m) |
Interval
(m)* |
Au (g/t) | Zone | |||||||||||||
NFGC-20-17 | 29.80 | 32.00 | 2.20 | 16.30 | Lotto | |||||||||||||
And | 35.25 | 40.00 | 4.75 | 41.20 | Lotto | |||||||||||||
Including | 35.25 | 36.90 | 1.65 | 108.70 | ||||||||||||||
And | 56.95 | 70.75 | 13.80 | 10.10 | ||||||||||||||
Including | 56.95 | 62.10 | 5.15 | 25.40 | Lotto | |||||||||||||
Including | 61.00 | 61.80 | 0.80 | 138.30 | ||||||||||||||
NFGC-20-20 | 100.25 | 103.25 | 3.00 | 5.31 | Lotto | |||||||||||||
Including | 100.60 | 101.30 | 0.70 | 15.60 | Lotto | |||||||||||||
NFGC-20-22 | 91.50 | 99.90 | 8.40 | 1.30 | Lotto | |||||||||||||
NFGC-20-24 | 35.00 | 37.00 | 2.00 | 2.00 | Lotto | |||||||||||||
And | 42.30 | 45.40 | 3.10 | 1.30 | Lotto | |||||||||||||
And | 138.10 | 140.30 | 2.20 | 1.20 | Lotto | |||||||||||||
NFGC-20-27 | 156.00 | 158.10 | 2.10 | 1.70 | Lotto | |||||||||||||
And | 222.90 | 224.90 | 2.00 | 31.30 | Lotto | |||||||||||||
NFGC-20-31 | 45.70 | 52.00 | 6.30 | 1.04 | Lotto | |||||||||||||
NFGC-20-35 | NSV | Lotto | ||||||||||||||||
NFGC-20-39 | NSV | Lotto | ||||||||||||||||
NFGC-20-42 | 40.50 | 42.80 | 2.30 | 1.23 | Lotto | |||||||||||||
And | 108.00 | 112.55 | 4.55 | 1.40 | Lotto | |||||||||||||
NFGC-20-44 | 70.15 | 72.15 | 2.00 | 2.09 | Lotto | |||||||||||||
And | 238.55 | 245.05 | 6.50 | 18.10 | Sunday | |||||||||||||
NFGC-20-47 | 15.25 | 18.00 | 2.75 | 1.43 | Lotto | |||||||||||||
And | 29.35 | 31.35 | 2.00 | 1.06 | Lotto | |||||||||||||
And | 34.45 | 37.60 | 3.15 | 2.54 | Lotto | |||||||||||||
And | 42.00 | 45.10 | 3.10 | 1.14 | Lotto | |||||||||||||
NFGC-20-50 | 43.65 | 45.75 | 2.10 | 65.30 | Lotto | |||||||||||||
NFGC-20-51 | 66.80 | 68.80 | 2.00 | 1.17 | Lotto | |||||||||||||
And | 121.20 | 123.30 | 2.10 | 1.03 | Lotto | |||||||||||||
And | 170.15 | 172.80 | 2.65 | 1.36 | ||||||||||||||
NFGC-21-89 | 66.80 | 69.10 | 2.30 | 1.10 | ||||||||||||||
And | 80.85 | 99.65 | 18.80 | 1.64 | Lotto | |||||||||||||
Including | 81.95 | 88.65 | 6.70 | 2.43 | ||||||||||||||
NFGC-21-96 | 169.55 | 171.65 | 2.10 | 1.38 | Lotto | |||||||||||||
And | 216.90 | 219.00 | 2.10 | 1.68 | ||||||||||||||
NFGC-20-100 | 118.00 | 120.45 | 2.45 | 224.70 | Lotto | |||||||||||||
NFGC-21-109 | 152.70 | 161.50 | 8.80 | 19.30 | Lotto |
- 16 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020 |
Including | 154.20 | 157.40 | 3.20 | 51.30 | ||||||||||||||
NFGC-21-115 | 180.70 | 189.10 | 8.40 | 20.30 | Lotto | |||||||||||||
Including | 186.00 | 189.10 | 3.10 | 53.30 | ||||||||||||||
NFGC-21-201 | 196.65 | 208.15 | 11.50 | 150.30 | ||||||||||||||
And | 205.00 | 207.45 | 2.45 | 683.10 | Lotto | |||||||||||||
Including | 210.00 | 214.00 | 4.00 | 1.83 |
A plan map and coordinate table for Lotto drill holes reported to date are shown below:
Hole No. | Azimuth | Dip (°) | Length | UTM E | UTM N | |||||||||||||||
(°) | (m) | |||||||||||||||||||
NFGC-20-17 | 302 | -46 | 354 | 658931 | 5428990 | |||||||||||||||
NFGC-20-20 | 300 | -45 | 190 | 658973 | 5428962 | |||||||||||||||
NFGC-20-22 | 300 | -45 | 214 | 658963 | 5428996 | |||||||||||||||
NFGC-20-24 | 300 | -45 | 258 | 658936 | 5428954 | |||||||||||||||
NFGC-20-27 | 300 | -45 | 465 | 658946 | 5428920 | |||||||||||||||
NFGC-20-31 | 300 | -45 | 258 | 658878 | 5428902 | |||||||||||||||
NFGC-20-35 | 300 | -45 | 240 | 658921 | 5428876 | |||||||||||||||
NFGC-20-39 | 300 | -45 | 164 | 658885 | 5429156 | |||||||||||||||
NFGC-20-42 | 300 | -45 | 177 | 658933 | 5429100 | |||||||||||||||
NFGC-20-44 | 300 | -45 | 294 | 658956 | 5429030 | |||||||||||||||
NFGC-20-47 | 300 | -45 | 98 | 658922 | 5428995 | |||||||||||||||
NFGC-20-50 | 300 | -45 | 92 | 658927 | 5428981 | |||||||||||||||
NFGC-20-51 | 300 | -45 | 235 | 658908 | 5429056 | |||||||||||||||
NFGC-21-89 | 300 | -45 | 294 | 658968 | 5429052 | |||||||||||||||
NFGC-21-96 | 300 | -45 | 238 | 658923 | 5428933 | |||||||||||||||
NFGC-21-100 | 300 | -45 | 258 | 658979 | 5428930 | |||||||||||||||
NFGC-21-109 | 300 | -45 | 252 | 659012 | 5428912 | |||||||||||||||
NFGC-21-115 | 300 | -45 | 225 | 659034 | 5428895 | |||||||||||||||
NFGC-21-201 | 300 | -45 | 241 | 659058 | 5428890 |
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be in the 80% to 90% range at Lotto. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
- 17 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020 |
Queensway Project – Plan Map of Current Drilling Program (Lotto/Sunday Zone – June 23, 2021)
- 18 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020 |
Queensway Project – Long Section of Current Drilling Program (Lotto Zone – June 23, 2021)
- 19 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020 |
Queensway Project – Cross Section of Current Drilling Program (Lotto Zone – March 23, 2021)
Along with drilling at the Lotto Zone the Company has focussed its drilling efforts at the Keats zone where a discovery hole in late 2019 (NFGC-19-01) was drilled. To date the Company has completed 137 holes at Keats using multiple parallel exploration strategies. Initially the company planned and has conducted 10m step outs both along strike and dip of the discovery hole NFGC-19-01 and in parallel to this drilling, the Company is also conducting a 50m grid drilling program along roughly 950m of strike length and to vertical depths of 500m to test the geology and gold potential of the controlling geological structure, the Keats-Baseline fault.
Initial assay results from five drill holes at the Keats zones were reported in press release dated October 27, 2020, with further assay results reported on November 16, 2020; December 15, 2020; January 11, 2021; February 9, 2021; March 1, 2021; March 9, 2021; March 16, 2021; March 30, 2021; April 5, 2021; April 20, 2021; April 27, 2021; May 4, 2021 and May 21,2021, June 15, 2021 and July 5, 2021 representing ninety-five drill holes.
The Keats zone continues to see a steady increase in both strike length and depth with latest step-out results reported on June 15, 2021 indicating the down plunge of the high-grade zone has now increased to 465m starting at the bedrock surface as shown in the long section below.
Logging of the core drilled to date along with assay results received so far indicate that the veining and high-grade gold mineralization demonstrates good continuity along strike and down dip.
Gold assay results highlight from the first ninety-five holes drilled at the Keats Zone are shown in the table below.
- 20 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-20-18 | 92.00 | 99.90 | 7.90 | 24.10 | Keats Main | |||||||||||||
Including | 98.90 | 99.90 | 1.00 | 167.60 | ||||||||||||||
NFGC-20-19 | 89.65 | 108.50 | 18.85 | 31.20 | ||||||||||||||
Including | 96.00 | 107.25 | 11.25 | 50.70 | Keats Main | |||||||||||||
Including | 102.00 | 107.25 | 5.25 | 100.60 | ||||||||||||||
And | 151.00 | 152.90 | 1.90 | 4.40 | Keats FW | |||||||||||||
NFGC-20-21 | 101.65 | 120.00 | 18.35 | 15.80 | Keats Main | |||||||||||||
Including | 109.55 | 118.50 | 8.95 | 29.40 | ||||||||||||||
NFGC-20-23 | 82.65 | 124.00 | 41.35 | 22.30 | ||||||||||||||
Including | 93.65 | 108.20 | 14.55 | 57.40 | ||||||||||||||
Including | 93.65 | 94.00 | 0.35 | 1120.00 | Keats Main | |||||||||||||
And | 101.80 | 104.40 | 2.60 | 140.80 | ||||||||||||||
Including | 118.85 | 123.40 | 4.55 | 15.20 | ||||||||||||||
NFGC-20-25 | 80.00 | 85.70 | 5.70 | 1.50 | ||||||||||||||
And | 99.80 | 101.95 | 2.15 | 7.31 | Keats Main | |||||||||||||
Including | 101.65 | 101.95 | 0.30 | 25.80 | ||||||||||||||
NFGC-20-26 | 44.70 | 73.85 | 29.15 | 11.80 | ||||||||||||||
Including | 67.00 | 73.85 | 6.85 | 44.50 | Keats Main | |||||||||||||
Including | 73.50 | 73.85 | 0.35 | 824.00 | ||||||||||||||
And | 194.40 | 197.60 | 3.20 | 1.09 | Keats FW | |||||||||||||
And | 219.70 | 222.30 | 2.60 | 2.02 | ||||||||||||||
NFGC-20-28 | 88.50 | 93.00 | 4.50 | 1.64 | ||||||||||||||
And | 106.95 | 111.00 | 4.05 | 40.10 | Keats Main | |||||||||||||
Including | 109.40 | 110.40 | 1.00 | 119.80 | ||||||||||||||
NFGC-20-29 | 104.00 | 120.85 | 16.85 | 25.00 | Keats Main | |||||||||||||
Including | 113.65 | 117.55 | 3.90 | 103.20 | ||||||||||||||
NFGC-20-30 | 97.40 | 129.40 | 32.00 | 2.59 | ||||||||||||||
Including | 119.65 | 125.75 | 6.10 | 10.30 | Keats Main | |||||||||||||
Including | 120.25 | 122.25 | 2.00 | 26.10 | ||||||||||||||
NFGC-20-32 | 103.00 | 132.00 | 29.00 | 20.80 | ||||||||||||||
Including | 118.90 | 132.00 | 13.10 | 45.30 | Keats Main | |||||||||||||
Including | 119.90 | 125.35 | 5.45 | 82.70 | ||||||||||||||
NFGC-20-33 | 151.90 | 156.00 | 4.00 | 2.59 | Keats Main | |||||||||||||
And | 164.40 | 172.20 | 7.80 | 1.78 | ||||||||||||||
NFGC-20-34 | 109.40 | 152.60 | 43.20 | 2.39 | Keats Main | |||||||||||||
Including | 120.10 | 122.45 | 2.35 | 29.30 |
- 21 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
NFGC-20-36 | 75.40 | 77.40 | 2.00 | 7.22 | Keats Main | |||||||||||||
And | 88.80 | 107.70 | 18.90 | 3.29 | ||||||||||||||
Including | 96.40 | 105.30 | 8.90 | 5.15 | ||||||||||||||
And | 117.70 | 123.80 | 6.10 | 1.11 | ||||||||||||||
NFGC-20-37 | 9.00 | 19.30 | 10.30 | 25.00 | ||||||||||||||
And | 22.70 | 28.60 | 5.90 | 5.18 | Keats Main | |||||||||||||
And | 32.80 | 40.70 | 7.90 | 2.82 | ||||||||||||||
And | 43.80 | 45.80 | 2.00 | 13.20 | ||||||||||||||
And | 151.60 | 153.60 | 2.00 | 1.21 | Keats FW | |||||||||||||
NFGC-20-38 | 90.00 | 94.80 | 4.80 | 0.97 | ||||||||||||||
And | 101.50 | 103.80 | 2.30 | 1.13 | Keats Main | |||||||||||||
And | 105.80 | 133.20 | 27.40 | 5.64 | ||||||||||||||
Including | 105.80 | 111.60 | 5.80 | 19.80 | ||||||||||||||
And | 159.40 | 161.70 | 2.40 | 1.33 | Keats FW | |||||||||||||
NFGC-20-40A | 93.40 | 95.70 | 2.30 | 1.91 | ||||||||||||||
And | 107.40 | 114.70 | 7.30 | 19.30 | ||||||||||||||
And | 120.50 | 123.40 | 2.90 | 1.73 | Keats Main | |||||||||||||
And | 129.90 | 132.20 | 2.30 | 5.03 | ||||||||||||||
And | 144.50 | 146.80 | 2.30 | 3.75 | ||||||||||||||
And | 171.90 | 174.00 | 2.10 | 1.09 | Keats FW | |||||||||||||
NFGC-20-41 | 11.70 | 22.10 | 10.40 | 22.50 | ||||||||||||||
Including | 13.00 | 16.70 | 3.70 | 58.90 | ||||||||||||||
And | 32.00 | 35.50 | 3.50 | 1.36 | Keats Main | |||||||||||||
And | 45.00 | 60.90 | 15.90 | 31.40 | ||||||||||||||
Including | 49.30 | 55.60 | 6.30 | 67.70 | ||||||||||||||
NFGC-20-43 | 109.70 | 114.00 | 4.30 | 1.54 | ||||||||||||||
And | 119.80 | 138.00 | 18.20 | 10.00 | Keats Main | |||||||||||||
Including | 122.30 | 130.00 | 7.70 | 20.70 | ||||||||||||||
And | 145.60 | 147.80 | 2.20 | 1.29 | ||||||||||||||
NFGC-20-45 | 22.50 | 25.00 | 2.50 | 2.10 | Keats HW | |||||||||||||
And | 46.60 | 60.40 | 13.80 | 28.40 | ||||||||||||||
And | 68.00 | 71.30 | 3.30 | 20.60 | Keats Main | |||||||||||||
And | 83.30 | 85.30 | 2.00 | 17.10 | ||||||||||||||
NFGC-20-46 | 92.80 | 95.00 | 2.20 | 7.32 | ||||||||||||||
And | 112.70 | 115.60 | 2.90 | 13.70 | Keats Main | |||||||||||||
Including | 114.00 | 144.50 | 0.50 | 59.80 | ||||||||||||||
And | 133.50 | 135.50 | 2.00 | 5.23 |
- 22 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
NFGC-20-48 | 129.00 | 132.60 | 3.60 | 6.39 | Keats Main | |||||||||||||
And | 141.00 | 143.20 | 2.20 | 1.15 | ||||||||||||||
And | 164.50 | 167.10 | 2.60 | 1.38 | Keats FW | |||||||||||||
NFGC-20-49 | 175.90 | 180.85 | 4.95 | 5.55 | Keats FW | |||||||||||||
Including | 177.70 | 178.70 | 1.00 | 21.20 | ||||||||||||||
NFGC-20-52 | 107.70 | 109.80 | 2.10 | 136.70 | ||||||||||||||
And | 114.40 | 128.50 | 14.10 | 31.50 | Keats Main | |||||||||||||
And | 132.20 | 137.75 | 5.55 | 13.70 | ||||||||||||||
NFGC-20-53 | 20.60 | 23.40 | 2.80 | 1.07 | ||||||||||||||
And | 32.60 | 35.00 | 2.40 | 2.20 | ||||||||||||||
And | 53.40 | 55.90 | 2.50 | 2.59 | ||||||||||||||
And | 58.60 | 62.00 | 3.40 | 3.24 | Keats Main | |||||||||||||
And | 70.00 | 74.30 | 4.30 | 1.83 | ||||||||||||||
And | 75.80 | 78.10 | 2.30 | 3.64 | ||||||||||||||
And | 90.00 | 92.40 | 2.40 | 4.72 | ||||||||||||||
NFGC-20-54 | 69.50 | 80.50 | 11.00 | 1.98 | ||||||||||||||
Including | 69.50 | 70.50 | 1.00 | 6.68 | Keats Main | |||||||||||||
And | 85.40 | 94.10 | 8.70 | 2.02 | ||||||||||||||
Including | 85.40 | 85.90 | 0.50 | 18.90 | ||||||||||||||
NFGC-20-56 | 25.60 | 57.90 | 32.30 | 6.18 | ||||||||||||||
Including | 25.60 | 31.00 | 5.40 | 15.70 | Keats Main | |||||||||||||
And | 62.30 | 68.70 | 6.40 | 3.52 | ||||||||||||||
Including | 66.00 | 68.30 | 2.30 | 6.69 | ||||||||||||||
NFGC-20-57 | 69.70 | 73.45 | 3.75 | 12.88 | Keats Main | |||||||||||||
Including | 71.00 | 73.45 | 2.45 | 19.25 | ||||||||||||||
And | 129.00 | 132.85 | 3.85 | 2.88 | ||||||||||||||
And | 142.10 | 144.45 | 2.35 | 1.79 | Keats FW | |||||||||||||
And | 146.45 | 148.50 | 2.05 | 8.85 | ||||||||||||||
NFGC-20-59 | 38.65 | 43.30 | 4.65 | 131.09 | ||||||||||||||
And | 60.55 | 64.80 | 4.25 | 1.10 | ||||||||||||||
And | 67.55 | 69.60 | 2.05 | 1.00 | Keats Main | |||||||||||||
And | 71.75 | 89.45 | 17.70 | 124.44 | ||||||||||||||
And | 94.80 | 97.55 | 2.75 | 1.68 | ||||||||||||||
NFGC-20-60 | 136.90 | 160.35 | 23.45 | 2.44 | Keats Main | |||||||||||||
Including | 136.90 | 140.30 | 3.40 | 8.46 | ||||||||||||||
NFGC-20-62 | NSV | Keats | ||||||||||||||||
NFGC-20-63 | 15.95 | 18.00 | 2.05 | 1.33 | Keats Main |
- 23 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
And | 105.00 | 107.00 | 2.00 | 1.59 | Keats FW | |||||||||||||
And | 214.95 | 217.30 | 2.35 | 3.26 | ||||||||||||||
NFGC-20-64 | 93.00 | 95.10 | 2.10 | 1.01 | Keats Main | |||||||||||||
And | 112.60 | 115.10 | 2.50 | 2.77 | ||||||||||||||
NFGC-20-65 | 170.00 | 172.90 | 2.90 | 1.04 | Keats Main | |||||||||||||
NFGC-20-67 | 123.90 | 125.90 | 2.00 | 10.26 | Keats Main | |||||||||||||
NFGC-20-69 | 109.40 | 113.55 | 4.15 | 1.58 | Keats Main | |||||||||||||
And | 122.20 | 127.85 | 5.65 | 4.21 | ||||||||||||||
Including | 122.20 | 125.15 | 2.95 | 6.16 | ||||||||||||||
And | 129.95 | 132.95 | 3.00 | 1.43 | ||||||||||||||
NFGC-20-70 | 56.40 | 67.50 | 11.10 | 1.89 | Keats Main | |||||||||||||
Including | 61.80 | 62.40 | 0.60 | 12.15 | ||||||||||||||
And | 77.45 | 80.80 | 3.35 | 1.92 | ||||||||||||||
And | 92.75 | 95.25 | 2.50 | 3.80 | ||||||||||||||
NFGC-20-72 | 133.50 | 139.80 | 6.30 | 2.89 | ||||||||||||||
Including | 133.50 | 136.80 | 3.30 | 4.48 | Keats Main | |||||||||||||
And | 143.40 | 147.00 | 3.60 | 1.50 | ||||||||||||||
And | 187.20 | 189.45 | 2.25 | 1.31 | Keats FW | |||||||||||||
NFGC-20-73 | 25.80 | 28.00 | 2.20 | 7.28 | Keats Main | |||||||||||||
Including | 26.55 | 27.00 | 0.45 | 30.10 | ||||||||||||||
And | 191.50 | 194.00 | 2.50 | 21.90 | Keats FW | |||||||||||||
Including | 191.50 | 192.15 | 0.65 | 83.40 | ||||||||||||||
And | 292.40 | 293.75 | 1.35 | 2.74 | Keats FW | |||||||||||||
NFGC-20-74 | 44.00 | 46.00 | 2.00 | 32.27 | ||||||||||||||
And | 49.15 | 70.50 | 21.35 | 3.36 | Keats Main | |||||||||||||
And | 81.70 | 85.75 | 4.05 | 45.59 | ||||||||||||||
NFGC-20-75 | 132.00 | 135.45 | 3.45 | 9.78 | Keats Main | |||||||||||||
And | 139.00 | 141.00 | 2.00 | 2.21 | ||||||||||||||
NFGC-21-77 | NSV | Keats Main | ||||||||||||||||
NFGC-21-78 | 102.00 | 105.70 | 3.70 | 2.43 | Keats Main | |||||||||||||
And | 113.20 | 115.50 | 2.30 | 18.22 | ||||||||||||||
NFGC-21-79 | 107.35 | 113.80 | 6.45 | 1.00 | Keats Main | |||||||||||||
And | 133.75 | 141.65 | 7.90 | 22.70 | ||||||||||||||
NFGC-21-80 | 49.45 | 88.50 | 39.05 | 25.80 | Keats Main | |||||||||||||
Including | 62.70 | 72.80 | 10.10 | 58.50 | ||||||||||||||
And | 78.65 | 88.50 | 9.85 | 39.50 | ||||||||||||||
And | 93.15 | 95.45 | 2.30 | 41.60 |
- 24 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
NFGC-21-81 | 19.40 | 21.70 | 2.30 | 1.72 | ||||||||||||||
And | 46.55 | 49.40 | 2.85 | 1.19 | Keats Main | |||||||||||||
And | 65.90 | 68.30 | 2.40 | 1.00 | ||||||||||||||
And | 136.00 | 138.15 | 2.15 | 1.33 | Keats FW | |||||||||||||
NFGC-21-82 | 140.00 | 145.00 | 5.00 | 3.54 | Keats Main | |||||||||||||
And | 160.85 | 167.95 | 7.10 | 3.52 | ||||||||||||||
NFGC-21-84 | 87.00 | 89.25 | 2.25 | 1.15 | Keats Main | |||||||||||||
And | 102.40 | 106.50 | 4.10 | 1.31 | ||||||||||||||
And | 155.00 | 157.15 | 2.15 | 1.12 | Keats FW | |||||||||||||
NFGC-21-85 | 108.45 | 111.40 | 2.95 | 49.41 | Keats Main | |||||||||||||
NFGC-21-86 | 141.95 | 150.00 | 8.05 | 5.65 | Keats Main | |||||||||||||
And | 171.90 | 174.25 | 2.35 | 1.09 | ||||||||||||||
NFGC-21-87 | 4.70 | 9.35 | 4.65 | 27.77 | ||||||||||||||
And | 20.45 | 30.70 | 10.25 | 2.51 | Keats Main | |||||||||||||
And | 79.00 | 81.00 | 2.00 | 2.03 | ||||||||||||||
NFGC-21-88 | 152.20 | 154.60 | 2.40 | 1.02 | Keats FW | |||||||||||||
NFGC-21-90 | 20.00 | 28.05 | 8.05 | 2.45 | Keats Main | |||||||||||||
And | 35.35 | 39.20 | 3.85 | 24.50 | ||||||||||||||
NFGC-21-91 | 143.00 | 145.50 | 2.50 | 1.30 | Keats Main | |||||||||||||
NFGC-21-93 | 17.80 | 19.80 | 2.00 | 1.98 | Keats Main | |||||||||||||
NFGC-21-94B | 166.45 | 176.35 | 9.90 | 6.18 | Keats Main | |||||||||||||
Including | 169.75 | 173.55 | 3.80 | 11.69 | ||||||||||||||
NFGC-21-95 | 19.15 | 21.70 | 2.55 | 1.50 | Keats FW | |||||||||||||
And | 48.20 | 53.20 | 5.00 | 2.36 | ||||||||||||||
NFGC-21-97 | 135.00 | 137.65 | 2.65 | 1.31 | Keats HW | |||||||||||||
And | 153.65 | 156.00 | 2.35 | 1.04 | ||||||||||||||
And | 162.65 | 167.00 | 4.35 | 1.21 | Keats Main | |||||||||||||
And | 174.95 | 181.40 | 6.45 | 37.15 | ||||||||||||||
NFGC-21-98 | 137.00 | 139.30 | 2.30 | 1.09 | Keats FW | |||||||||||||
NFGC-21-99 | 182.00 | 184.00 | 2.00 | 1.03 | Keats Main | |||||||||||||
And | 196.00 | 199.65 | 3.65 | 1.11 | ||||||||||||||
NFGC-21-101 | 180.85 | 189.30 | 8.45 | 17.87 | Keats Main | |||||||||||||
NFGC-21-103 | 192.00 | 206.55 | 14.55 | 2.36 | Keats Main | |||||||||||||
And | 216.90 | 219.50 | 2.60 | 2.02 | ||||||||||||||
And | 235.15 | 245.40 | 10.25 | 8.89 | ||||||||||||||
Including | 236.50 | 240.00 | 3.50 | 19.28 | ||||||||||||||
NFGC-21-104 | 214.50 | 225.90 | 11.40 | 29.10 | Keats Main |
- 25 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
And | 254.40 | 255.00 | 0.60 | 7.35 | ||||||||||||||
NFGC-21-105B | 179.65 | 190.30 | 10.65 | 1.18 | ||||||||||||||
And | 195.75 | 198.00 | 2.25 | 1.26 | Keats Main | |||||||||||||
And | 241.25 | 244.05 | 2.80 | 1.68 | ||||||||||||||
And | 256.00 | 258.00 | 2.00 | 41.84 | ||||||||||||||
NFGC-21-106 | 218.75 | 227.35 | 8.60 | 3.59 | Keats Main | |||||||||||||
Including | 220.70 | 223.20 | 2.50 | 9.49 | ||||||||||||||
And | 286.40 | 288.80 | 2.40 | 1.24 | Keats FW | |||||||||||||
NFGC-21-108 | 197.00 | 199.00 | 2.00 | 6.53 | Keats North | |||||||||||||
NFGC-21-111 | 229.00 | 238.20 | 9.20 | 1.48 | Keats Main | |||||||||||||
And | 278.00 | 280.70 | 2.70 | 1.49 | ||||||||||||||
NFGC-21-113 | 47.00 | 49.55 | 2.55 | 12.52 | Keats Main | |||||||||||||
NFGC-21-114 | 212.35 | 216.85 | 4.50 | 8.13 | Keats Main | |||||||||||||
Including | 212.35 | 214.50 | 2.15 | 15.58 | ||||||||||||||
NFGC-21-116 | 25.40 | 35.95 | 10.55 | 2.10 | Keats Main | |||||||||||||
Including | 25.40 | 28.20 | 2.80 | 4.82 | ||||||||||||||
NFGC-21-118 | 211.15 | 224.80 | 13.65 | 61.80 | Keats Main | |||||||||||||
Including | 212.10 | 213.05 | 0.95 | 565.00 | ||||||||||||||
NFGC-21-119 | 152.50 | 154.50 | 2.00 | 1.05 | Keats Main | |||||||||||||
And | 176.20 | 183.15 | 6.95 | 15.57 | ||||||||||||||
And | 218.85 | 221.00 | 2.15 | 1.45 | Keats FW | |||||||||||||
NFGC-21-120 | 9.65 | 21.70 | 12.05 | 12.65 | Keats Main | |||||||||||||
Including | 9.65 | 13.25 | 3.60 | 35.76 | ||||||||||||||
And | 22.90 | 25.00 | 2.10 | 1.33 | ||||||||||||||
And | 28.20 | 33.00 | 4.80 | 1.98 | ||||||||||||||
And | 36.00 | 38.00 | 2.00 | 2.66 | ||||||||||||||
And | 40.30 | 46.00 | 5.70 | 5.16 | ||||||||||||||
NFGC-21-122 | 8.10 | 10.00 | 1.90 | 24.75 | Keats Main | |||||||||||||
And | 25.00 | 27.00 | 2.00 | 1.97 | ||||||||||||||
And | 34.70 | 49.60 | 14.90 | 69.15 | ||||||||||||||
Including | 34.70 | 43.85 | 9.15 | 106.46 | ||||||||||||||
NFGC-21-123 | 167.60 | 169.60 | 2.00 | 2.46 | Keats FW | |||||||||||||
And | 260.00 | 262.50 | 2.50 | 8.41 | ||||||||||||||
NFGC-21-125 | 82.60 | 84.90 | 2.30 | 4.92 | Keats FW | |||||||||||||
NFGC-21-127 | 37.00 | 51.00 | 14.00 | 1.47 | Keats Main | |||||||||||||
Including | 37.00 | 39.00 | 2.00 | 6.11 | ||||||||||||||
NFGC-21-129 | 59.75 | 66.00 | 6.25 | 1.37 | Keats Main |
- 26 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
And | 71.00 | 75.30 | 4.30 | 2.54 | ||||||||||||||
And | 122.95 | 125.00 | 2.05 | 1.21 | Keats FW | |||||||||||||
And | 128.00 | 130.15 | 2.15 | 1.28 | ||||||||||||||
NFGC-21-131 | 9.65 | 11.85 | 2.20 | 1.00 | ||||||||||||||
And | 27.70 | 49.80 | 22.10 | 2.31 | Keats Main | |||||||||||||
Including | 27.70 | 32.65 | 4.95 | 7.75 | ||||||||||||||
NFGC-21-132 | 159.00 | 161.50 | 2.50 | 1.06 | Keats Main | |||||||||||||
And | 164.60 | 171.75 | 7.15 | 1.90 | ||||||||||||||
NFGC-21-133 | 44.00 | 46.00 | 2.00 | 11.26 | Keats Main | |||||||||||||
And | 65.75 | 71.00 | 5.25 | 1.79 | ||||||||||||||
NFGC-21-135 | 209.45 | 223.90 | 14.45 | 2.77 | Keats Main | |||||||||||||
And | 295.10 | 298.15 | 3.05 | 1.40 | ||||||||||||||
NFGC-21-136 | 230.10 | 237.45 | 7.35 | 1.02 | Keats Main | |||||||||||||
And | 254.65 | 257.30 | 2.65 | 1.85 | ||||||||||||||
And | 288.00 | 290.65 | 2.65 | 1.23 | Keats FW | |||||||||||||
NFGC-21-137 | 71.50 | 78.70 | 7.20 | 261.33 | Keats Main | |||||||||||||
And | 87.50 | 92.50 | 5.00 | 4.13 | ||||||||||||||
And | 114.00 | 116.00 | 2.00 | 1.56 | Keats FW | |||||||||||||
And | 135.00 | 137.00 | 2.00 | 3.45 | ||||||||||||||
NFGC-21-139 | 47.90 | 50.10 | 2.20 | 1.02 | ||||||||||||||
And | 80.00 | 88.90 | 8.90 | 2.19 | Keats Main | |||||||||||||
Including | 80.00 | 82.45 | 2.45 | 5.30 | ||||||||||||||
And | 153.60 | 155.70 | 2.10 | 2.05 | Keats FW | |||||||||||||
NFGC-21-141 | 219.60 | 232.30 | 12.70 | 1.87 | Keats Main | |||||||||||||
And | 238.00 | 245.00 | 7.00 | 11.17 | ||||||||||||||
And | 248.55 | 251.25 | 2.70 | 2.01 | ||||||||||||||
And | 301.55 | 304.25 | 2.70 | 1.61 | ||||||||||||||
NFGC-21-143 | 239.00 | 246.90 | 7.90 | 6.21 | ||||||||||||||
Including | 239.00 | 241.50 | 2.50 | 16.93 | ||||||||||||||
And | 256.45 | 268.00 | 11.55 | 46.95 | Keats Main | |||||||||||||
Including | 257.45 | 265.90 | 8.45 | 63.71 | ||||||||||||||
And | 281.90 | 288.00 | 6.10 | 1.01 | ||||||||||||||
And | 324.00 | 326.00 | 2.00 | 1.12 | Keats FW | |||||||||||||
NFGC-21-153 | 288.40 | 292.45 | 4.05 | 1.16 | Keats Main | |||||||||||||
NFGC-21-156 | 22.00 | 24.25 | 2.25 | 3.12 | Keats Main | |||||||||||||
And | 54.95 | 70.35 | 15.40 | 1.00 | ||||||||||||||
And | 110.65 | 113.00 | 2.35 | 1.52 | Keats FW |
- 27 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
And | 151.50 | 154.30 | 2.80 | 1.31 | ||||
And | 175.40 | 178.00 | 2.60 | 1.41 | ||||
And | 215.85 | 218.55 | 2.70 | 2.54 | ||||
And | 246.60 | 253.15 | 6.55 | 1.32 | ||||
NFGC-21-165 | 266.70 | 268.80 | 2.10 | 1.09 | Keats Main | |||
And | 296.45 | 298.50 | 2.05 | 20.74 | ||||
NFGC-21-182 | 285.85 | 321.25 | 35.40 | 106.20 | Keats Main | |||
Including | 291.00 | 316.60 | 25.60 | 146.24 | ||||
And | 345.00 | 361.90 | 16.90 | 1.07 | ||||
NFGC-21-189 | 150.00 | 152.00 | 2.00 | 1.73 | Keats Main | |||
And | 156.70 | 161.80 | 5.10 | 23.78 | ||||
NFGC-21-190 | NSV | Keats North | ||||||
NFGC-21-196 | 169.90 | 172.35 | 2.45 | 96.51 | Keats Main | |||
NFGC-21-197 | 219.30 | 221.70 | 2.40 | 1.04 | ||||
And | 239.85 | 250.90 | 11.05 | 2.12 | Keats Main | |||
And | 254.45 | 262.70 | 8.25 | 3.67 | ||||
Including | 257.55 | 260.00 | 2.45 | 8.13 | ||||
NFGC-21-204 | 244.45 | 252.50 | 8.05 | 21.36 | Keats Main | |||
And | 283.15 | 296.00 | 12.85 | 14.92 |
Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 85% to 95% of reported intervals. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
A plan map and coordinate table for Keats drill holes press released to date are shown below:
Hole No. | Azimuth (°) | Dip (°) |
Length
(m) |
UTM E | UTM N | ||||||||||||||
NFGC-20-18 | 300 | -45 | 278 | 658223 | 5427467 | ||||||||||||||
NFGC-20-19 | 300 | -45 | 154 | 658232 | 5427462 | ||||||||||||||
NFGC-20-21 | 300 | -45 | 190 | 658236 | 5427449 | ||||||||||||||
NFGC-20-23 | 300 | -45 | 185 | 658240 | 5427458 | ||||||||||||||
NFGC-20-26 | 300 | -45 | 269 | 658151 | 5427444 | ||||||||||||||
NFGC-20-25 | 300 | -45 | 147 | 658217 | 5427459 | ||||||||||||||
NFGC-20-28 | 300 | -45 | 150 | 658213 | 5427450 | ||||||||||||||
NFGC-20-29 | 300 | -45 | 186 | 658222 | 5427445 | ||||||||||||||
NFGC-20-30 | 300 | -45 | 167 | 658195 | 5427419 | ||||||||||||||
NFGC-20-32 | 300 | -45 | 269 | 658151 | 5427444 | ||||||||||||||
NFGC-20-33 | 300 | -45 | 297 | 658238 | 5427394 |
- 28 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
NFGC-20-34 | 300 | -45 | 213 | 658258 | 5427440 | |||||
NFGC-20-36 | 300 | -45 | 150 | 658245 | 5427466 | |||||
NFGC-20-37 | 300 | -45 | 344 | 658224 | 5427518 | |||||
NFGC-20-38 | 300 | -45 | 176 | 658254 | 5427461 | |||||
NFGC-20-40A | 300 | -45 | 204 | 658249 | 5427453 | |||||
NFGC-20-41 | 300 | -45 | 195 | 658232 | 5427514 | |||||
NFGC-20-43 | 300 | -45 | 182 | 658239 | 5427435 | |||||
NFGC-20-45 | 300 | -45 | 164 | 658240 | 5427509 | |||||
NFGC-20-46 | 300 | -45 | 169 | 658267 | 5427493 | |||||
NFGC-20-48 | 300 | -45 | 198 | 658247 | 5427430 | |||||
NFGC-20-49 | 300 | -45 | 234 | 658309 | 5427468 | |||||
NFGC-20-52 | 300 | -45 | 192 | 658243 | 5427445 | |||||
NFGC-20-53 | 300 | -45 | 188 | 658254 | 5427513 | |||||
NFGC-20-54 | 300 | -45 | 198 | 658160 | 5427439 | |||||
NFGC-20-56 | 300 | -45 | 118 | 658226 | 5427505 | |||||
NFGC-20-57 | 300 | -45 | 150 | 658145 | 5427436 | |||||
NFGC-20-59 | 300 | -45 | 159 | 658243 | 5427495 | |||||
NFGC-20-60 | 300 | -45 | 200 | 658256 | 5427425 | |||||
NFGC-20-62 | 300 | -45 | 218 | 658291 | 5427537 | |||||
NFGC-20-63 | 300 | -45 | 346 | 657986 | 5427309 | |||||
NFGC-20-64 | 300 | -45 | 150 | 658208 | 5427442 | |||||
NFGC-20-65 | 300 | -45 | 266 | 658335 | 5427512 | |||||
NFGC-20-67 | 300 | -45 | 189 | 658216 | 5427437 | |||||
NFGC-20-69 | 300 | -45 | 187 | 658225 | 5427432 | |||||
NFGC-20-70 | 300 | -45 | 192 | 658249 | 5427504 | |||||
NFGC-20-72 | 300 | -45 | 189 | 658234 | 5427427 | |||||
NFGC-20-73 | 300 | -45 | 297 | 658058 | 5427383 | |||||
NFGC-20-74 | 300 | -45 | 238 | 658229 | 5427491 | |||||
NFGC-20-75 | 300 | -45 | 175 | 658205 | 5427413 | |||||
NFGC-21-77 | 300 | -45 | 309 | 658302 | 5427416 | |||||
NFGC-21-78 | 300 | -45 | 168 | 658183 | 5427426 | |||||
NFGC-21-79 | 300 | -45 | 192 | 658199 | 5427403 | |||||
NFGC-21-80 | 300 | -45 | 200 | 658239 | 5427486 | |||||
NFGC-21-81 | 300 | -45 | 259 | 658104 | 5427414 | |||||
NFGC-21-82 | 300 | -45 | 223 | 658190 | 5427364 | |||||
NFGC-21-84 | 300 | -45 | 170 | 658253 | 5427490 | |||||
NFGC-21-85 | 300 | -45 | 157 | 658148 | 5427388 |
- 29 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
NFGC-21-86 | 300 | -45 | 231 | 658209 | 5427397 | |||||
NFGC-21-87 | 300 | -45 | 125 | 658218 | 5427535 | |||||
NFGC-21-88 | 300 | -45 | 256 | 658029 | 5427284 | |||||
NFGC-21-90 | 300 | -45 | 182 | 658235 | 5427540 | |||||
NFGC-21-91 | 299 | -46 | 186 | 658169 | 5427376 | |||||
NFGC-21-93 | 300 | -45 | 110 | 658230 | 5427558 | |||||
NFGC-21-94B | 300 | -45 | 234 | 658201 | 5427357 | |||||
NFGC-21-95 | 300 | -45 | 230 | 658272 | 5427606 | |||||
NFGC-21-97 | 300 | -45 | 225 | 658195 | 5427347 | |||||
NFGC-21-98 | 299 | -45 | 470 | 658328 | 5427745 | |||||
NFGC-21-99 | 299 | -45 | 285 | 658176 | 5427314 | |||||
NFGC-21-101 | 300 | -45 | 221 | 658206 | 5427341 | |||||
NFGC-21-103 | 300 | -45 | 261 | 658227 | 5427328 | |||||
NFGC-21-104 | 300 | -45 | 255 | 658208 | 5427295 | |||||
NFGC-21- 105B |
300 | -45 | 288 | 658232 | 5427340 | |||||
NFGC-21-106 | 300 | -45 | 326 | 658221 | 5427289 | |||||
NFGC-21-108 | 120 | -45 | 248 | 658327 | 5427746 | |||||
NFGC-21-111 | 300 | -45 | 297 | 658242 | 5427276 | |||||
NFGC-21-113 | 300 | -45 | 143 | 658210 | 5427497 | |||||
NFGC-21-114 | 300 | -45 | 264 | 658249 | 5427316 | |||||
NFGC-21-116 | 300 | -45 | 113 | 658188 | 5427509 | |||||
NFGC-21-118 | 300 | -45 | 633 | 658189 | 5427285 | |||||
NFGC-21-119 | 300 | -45 | 279 | 658185 | 5427331 | |||||
NFGC-21-120 | 300 | -45 | 109 | 658228 | 5427529 | |||||
NFGC-21-122 | 300 | -45 | 140 | 658240 | 5427523 | |||||
NFGC-21-123 | 120 | -45 | 723 | 657821 | 5427519 | |||||
NFGC-21-125 | 300 | -45 | 107 | 658257 | 5427527 | |||||
NFGC-21-127 | 300 | -45 | 122 | 658246 | 5427534 | |||||
NFGC-21-129 | 300 | -45 | 161 | 658198 | 5427475 | |||||
NFGC-21-131 | 300 | -45 | 138 | 658175 | 5427487 | |||||
NFGC-21-132 | 300 | -45 | 234 | 658221 | 5427391 | |||||
NFGC-21-133 | 300 | -45 | 149 | 658166 | 5427465 | |||||
NFGC-21-135 | 300 | -45 | 336 | 658179 | 5427269 | |||||
NFGC-21-136 | 300 | -45 | 312 | 658179 | 5427247 | |||||
NFGC-21-137 | 300 | -45 | 152 | 658185 | 5427454 | |||||
NFGC-21-139 | 300 | -45 | 170 | 658139 | 5427423 | |||||
NFGC-21-141 | 300 | -45 | 318 | 658190 | 5427263 |
- 30 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
NFGC-21-143 | 300 | -45 | 343 | 658192 | 5427240 | |||||
NFGC-21-153 | 300 | -45 | 351 | 658233 | 5427217 | |||||
NFGC-21-156 | 300 | -45 | 275 | 658069 | 5427405 | |||||
NFGC-21-165 | 300 | -45 | 345 | 658181 | 5427196 | |||||
NFGC-21-182 | 300 | -48 | 381 | 658181 | 5427196 | |||||
NFGC-21-189 | 300 | -45 | 205 | 658174 | 5427359 | |||||
NFGC-21-190 | 300 | -45 | 282 | 658537 | 5427639 | |||||
NFGC-21-196 | 300 | -45 | 206 | 658179 | 5427342 | |||||
NFGC-21-197 | 300 | -55 | 353 | 658149 | 5427243 | |||||
NFGC-21-204 | 297 | -56 | 404 | 658145 | 5427194 |
Queensway Project – Plan Map of Drilling Program (Keats/Cokes Zone - July 5, 2021)
- 31 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Queensway Project – Long Section of Drilling Program (Keats Zone – May 21, 2021)
On June 29, 2021 the Company announced the discovery of a new high grade zone along the hangingwall of the Appleton Fault Zone named the Golden Joint. Comprised of two sub-parallel vein systems (Main Zone and HW zone) and located between the Keats and Lotto zones this new discovery has yielded several notable high-grade intervals including NFGC-21-171 (10.36g/t Au over 4.85m) and NFGC-21-241 (430.2g/t Au over 5.25m). To date the Company has completed 14 holes at the Golden Joint and announced assay results from four as presented in the table below:
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-21-171 | 223.45 | 228.30 | 4.85 | 10.36 | Golden Joint | |||||||||||||
NFGC-21-187 | 114.10 | 119.65 | 5.55 | 1.49 | ||||||||||||||
and | 125.45 | 131.65 | 6.20 | 4.96 | Golden Joint HW | |||||||||||||
including | 127.65 | 131.65 | 4.00 | 7.08 | ||||||||||||||
and | 272.00 | 274.00 | 2.00 | 5.39 | Golden Joint | |||||||||||||
NFGC-21-199 | 36.00 | 38.00 | 2.00 | 2.85 | ||||||||||||||
and | 46.00 | 48.00 | 2.00 | 2.31 | Golden Joint HW | |||||||||||||
and | 64.00 | 66.00 | 2.00 | 12.70 | ||||||||||||||
and | 195.55 | 197.55 | 2.00 | 2.77 | Golden Joint | |||||||||||||
and | 199.00 | 201.00 | 2.00 | 4.53 | ||||||||||||||
NFGC-21-241 | 207.85 | 213.10 | 5.25 | 430.17 | Golden Joint |
- 32 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 70% to 90% of reported intervals. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
A plan map and coordinate table for Golden Joint drill holes press released to date are shown below:
Hole No. |
Azimuth
(°) |
Dip (°) |
Length
(m) |
UTM E | UTM N | ||||||||||||||
NFGC-21-171 | 300 | -45 | 312 | 658547 | 5428356 | ||||||||||||||
NFGC-21-187 | 300 | -50 | 431 | 658548 | 5428356 | ||||||||||||||
NFGC-21-199 | 300 | -45 | 263 | 658526 | 5428398 | ||||||||||||||
NFGC-21-241 | 299 | -45.5 | 303 | 658523 | 5428341 |
- 33 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Queensway Project –Golden Joint to Lotto Corridor Map (July 5, 2021)
- 34 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
In addition to the drilling conducted at the Keats, Lotto and Golden Joint the Company has recently conducted first pass drilling at several other prospects along the Appleton Fault zone including the Road, Cokes, Knob and Grouse as announced on July 5, 2021. Several of these zones have yielded significant gold drill intercepts including the Cokes NFGC-21-157 (2.40g/t Au over 23.7m) starting near the bedrock surface and the Road NFGC-20-71 (35.36g/t Au over 2.70m and 9.06g/t Au over 2.95m). Additional drilling is being planned for several of these zones and other prospects and targets along the Appleton Fault Zone. Results announced to date from the Road, Cokes, Knob and Grouse prospects are presented in the tables below:
Road Zone:
Interval | ||||||||||||||||||||
Hole No. | From (m) | To (m) | (m)* | Au (g/t) | Zone | |||||||||||||||
NFGC-20-71 | 23.50 | 26.20 | 2.70 | 35.36 | ||||||||||||||||
And | 48.80 | 51.75 | 2.95 | 9.06 | Road | |||||||||||||||
And | 113.40 | 115.40 | 2.00 | 1.03 | ||||||||||||||||
NFGC-20-76 | 57.55 | 59.65 | 2.10 | 1.03 | Road |
Cokes Zone:
Interval | ||||||||||||||||||||
Hole No. | From (m) | To (m) | (m)* | Au (g/t) | Zone | |||||||||||||||
NFGC-21-146 | 23.00 | 26.00 | 3.00 | 1.49 | Cokes | |||||||||||||||
And | 79.00 | 81.00 | 2.00 | 1.60 | ||||||||||||||||
NFGC-21-154 | 6.40 | 8.40 | 2.00 | 1.37 | ||||||||||||||||
And | 15.70 | 22.25 | 6.55 | 1.40 | Cokes | |||||||||||||||
And | 27.00 | 34.65 | 7.65 | 2.60 | ||||||||||||||||
NFGC-21-157 | 10.00 | 33.70 | 23.70 | 2.40 | ||||||||||||||||
Including | 20.60 | 24.75 | 4.15 | 6.43 | Cokes | |||||||||||||||
And | 55.20 | 68.35 | 13.15 | 1.69 | ||||||||||||||||
And | 105.00 | 109.50 | 4.50 | 2.04 |
Knob/Grouse Zones:
Interval | ||||||||||||||||||||
Hole No. | From (m) | To (m) | (m)* | Au (g/t) | Zone | |||||||||||||||
NFGC-21-107 | 12.65 | 15.00 | 2.35 | 1.61 | Knob | |||||||||||||||
And | 24.00 | 28.40 | 4.40 | 1.06 | ||||||||||||||||
NFGC-21-112 | NSV | Knob | ||||||||||||||||||
NFGC-21-117 | 30.90 | 34.45 | 3.55 | 1.39 | Knob | |||||||||||||||
And | 42.55 | 44.60 | 2.05 | 1.34 | ||||||||||||||||
NFGC-21-121 | 29.00 | 31.15 | 2.15 | 1.08 | Knob | |||||||||||||||
NFGC-21-124 | 39.30 | 42.65 | 3.35 | 1.43 | Knob | |||||||||||||||
And | 46.00 | 48.00 | 2.00 | 1.00 | ||||||||||||||||
And | 169.00 | 171.00 | 2.00 | 2.00 | ||||||||||||||||
NFGC-21-126 | NSV | Knob | ||||||||||||||||||
NFGC-21-128 | NSV | Knob | ||||||||||||||||||
NFGC-21-134 | NSV | Knob | ||||||||||||||||||
NFGC-21-147 | 76.60 | 78.75 | 2.15 | 1.76 | Knob | |||||||||||||||
NFGC-21-152 | NSV | Knob | ||||||||||||||||||
NFGC-21-159 | 42.85 | 45.30 | 2.45 | 2.91 | Knob | |||||||||||||||
And | 54.00 | 56.00 | 2.00 | 8.78 | Knob | |||||||||||||||
NFGC-21-168 | NSV | Grouse | ||||||||||||||||||
NFGC-21-178 | NSV | Grouse |
- 35 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
A coordinate table for Road, Cokes, Knob and Grouse drill holes press released to date is shown below:
Road Zone:
Dip | Length | |||||||||||||||||||
Hole No. | Azimuth (°) | (°) | (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-71 | 50 | -45 | 204 | 658925 | 5428323 | |||||||||||||||
NFGC-20-76 | 50 | -60 | 225 | 658925 | 5428322 |
Cokes Zone:
Dip | Length | |||||||||||||||||||
Hole No. | Azimuth (°) | (°) | (m) | UTM E | UTM N | |||||||||||||||
NFGC-21-146 | 300 | -45 | 300 | 657817 | 5427521 | |||||||||||||||
NFGC-21-154 | 50 | -60 | 95 | 657652 | 5427514 | |||||||||||||||
NFGC-21-157 | 120 | -45 | 165 | 657642 | 5427535 |
Knob/Grouse Zones:
Dip | Length | |||||||||||||||||||
Hole No. | Azimuth (°) | (°) | (m) | UTM E | UTM N | |||||||||||||||
NFGC-21-107 | 120 | -45 | 95 | 657087 | 5425765 | |||||||||||||||
NFGC-21-112 | 120 | -45 | 190 | 657047 | 5425761 | |||||||||||||||
NFGC-21-117 | 120 | -45 | 123 | 657140 | 5425764 | |||||||||||||||
NFGC-21-121 | 300 | -45 | 233 | 657257 | 5425862 | |||||||||||||||
NFGC-21-124 | 120 | -45 | 259 | 657228 | 5425875 | |||||||||||||||
NFGC-21-126 | 120 | -45 | 233 | 656933 | 5425746 | |||||||||||||||
NFGC-21-128 | 120 | -45 | 206 | 657354 | 5425190 | |||||||||||||||
NFGC-21-134 | 0 | -45 | 123 | 657164 | 5425687 | |||||||||||||||
NFGC-21-147 | 300 | -45 | 239 | 657075 | 5425583 | |||||||||||||||
NFGC-21-152 | 300 | -60 | 227 | 657076 | 5425582 | |||||||||||||||
NFGC-21-159 | 300 | -45 | 188 | 657051 | 5425540 | |||||||||||||||
NFGC-21-168 | 300 | -45 | 176 | 657001 | 5425509 | |||||||||||||||
NFGC-21-178 | 180 | -45 | 239 | 656929 | 5425322 |
- 36 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Sampling, Sub-sampling and Laboratory
Host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85% to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. In some areas infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cut-off of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia, or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this MD&A was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer, and a Qualified Person as defined under National Instrument 43-101. Mr. Matheson consents to the publication of this MD&A, by NFG.
2020 Airborne Gravity Survey
In March of 2020, NFG contracted CGG Canada Services Ltd. based in Ottawa, Ontario to conduct a 1,705 km HeliFALCON Airborne Gravity Gradiometer and Aeromagnetic Survey over the licenses in the QWN license group. This highly advanced gravity and magnetic system has been deployed by the Company to further aid in the definition of geological and structural controls of mineralization.
After post processing the final data files were received in late April 2020. This data is currently under interpretation by a contract geophysicist to better define structures, geology and potential mineral target areas.
- 37 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Queensway Project – Vertical Gravity GD Plan View
Queensway Project – Vertical Gravity Gradient GDD Plan View
- 38 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Lucky Strike Project, Ontario
The Lucky Strike Project is located 10 km north of Larder Lake, Ontario and covers favourable and underexplored structural corridors associated with the Larder Cadillac Deformation Zone.
The project is comprised of 639 single cell un-patented mining claims.
Land History
The current mineral cells comprising the Lucky Strike Project were acquired from the completion of two option agreements, one purchase agreement and online staking.
On May 27th, 2016 the Company optioned the primary Lucky Strike Project property from Ashley Gold Mines Ltd. which was further amended in May 2019 and fully executed in November 2019. Under the terms of the agreement the Company paid $115,000 and issued common shares equivalent to $80,000. The option agreement included an underlying royalty payable to Wallbridge mining covers some of the claims with most of the claims carrying no NSR.
On July 26th, 2017 the Company optioned the Vallillee extension claims west of the primary Lucky Strike land package and this option agreement was fully executed October 2018. Under the terms of the agreement the Company paid $40,000 and issued a 2% NSR in favour of the optionors.
In April 2020, the Company staked an additional 70 unpatented mining cells on the west side of the Lucky Strike Project. These lands carry no NSR.
On May 7th, 2020, the Company completed a claim purchase agreement with Big Bar Gold to purchase 21 unpatented mining claim cells adjacent to the east of the Lucky Strike Project. Under the terms of the agreement the Company paid $25,000. The claims carry no NSR.
Lucky Strike Project – Project Location map, fault systems and Adjacent Projects
- 39 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Environmental and Exploration Permitting
The Company has been issued five active exploration permits/plans by the Ontario MNDM which covers all areas of current exploration focus on the property. The permits allows for exploration activities on the property including mechanized stripping, mechanized diamond drilling and geophysical surveys with a generator. The five permits/plans are applicable for 3 years and will expire between November 22, 2021 and January 24, 2024.
Project Geology
The Lucky Strike Project is covered by the Lower Blake River Group which are dominated by intermediate to mafic, massive volcanic flows. The volcanic flows have been intruded by diorite-gabbro intrusions which are up to 7 kilometres by 1.5 kilometre in size. In the Walsh-FP area a syenite-syenite porphyry intrudes the mafic-intermediate volcanics and hosts the gold-bearing quartz-ankerite veins of the Walsh Mine. The long axis of this syenite intrusion strikes approximately north-south and extends for 3.5 kilometres on the property and another 3 kilometres south of the property and is generally 0.5 kilometres wide. Two major regional faults cross the property, the Misema-Misty Lake Fault and the Mulven Fault, striking roughly in a northeast-southwest direction. These structures have been speculated as being as a continuation of the Kirkland Main Break Fault system which hosted the seven historic gold mines of the Kirkland Lake Gold camp. The Victoria Creek Deformation Zone, possibly a splay off the Misema-Misty Lake Fault and a control on the Victoria Creek and Upper Beaver Mines, lies just south of the property with splay structures extending onto the property.
- 40 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
The schedules below summarize the carrying costs of acquisition and exploration costs incurred to date for each exploration and evaluation asset that the Company is continuing to explore as at June 30, 2021 and December 31, 2020:
Newfoundland | ||||||||||||||||
Queensway | Other | Ontario | Total | |||||||||||||
Six months ended June 30, 2021 | $ | $ | $ | $ | ||||||||||||
Exploration and evaluation assets | ||||||||||||||||
Balance as at December 31, 2020 | 685,930 | 13,100 | 300,204 | 999,234 | ||||||||||||
Additions | ||||||||||||||||
Staking costs | 14,675 | - | - | 14,675 | ||||||||||||
Impairment of exploration and evaluation assets | - | - | (28,604 | ) | (28,604 | ) | ||||||||||
Balance at June 30, 2021 | 700,605 | 13,100 | 271,600 | 985,305 | ||||||||||||
Exploration and evaluation expenditures | ||||||||||||||||
Cumulative exploration expense - December 31, 2020 | 10,245,545 | 45,851 | 1,286,951 | 11,578,347 | ||||||||||||
Assays | 2,777,282 | - | 6,796 | 2,784,078 | ||||||||||||
Drilling | 7,880,535 | - | - | 7,880,535 | ||||||||||||
Environmental studies | 158,684 | - | - | 158,684 | ||||||||||||
Geophysics | 2,170,422 | - | 69,498 | 2,239,920 | ||||||||||||
Mapping & imaging | 93,337 | - | - | 93,337 | ||||||||||||
Office & general | 246,082 | - | - | 246,082 | ||||||||||||
Property taxes, mining leases and rent | 30,452 | - | 132 | 30,584 | ||||||||||||
Reclamation | 220,340 | - | - | 220,340 | ||||||||||||
Salaries & consulting | 2,476,829 | 6,520 | 34,225 | 2,517,574 | ||||||||||||
Supplies & equipment | 1,616,007 | - | 16,533 | 1,632,540 | ||||||||||||
Technical reports | 278,350 | - | 22,479 | 300,829 | ||||||||||||
Travel & accommodations | 221,812 | - | 678 | 222,490 | ||||||||||||
Trenching | 200 | - | 6,840 | 7,040 | ||||||||||||
Exploration cost recovery | (76,500 | ) | - | - | (76,500 | ) | ||||||||||
18,093,832 | 6,520 | 157,181 | 18,257,533 | |||||||||||||
Cumulative exploration expense – June 30, 2021 | 28,339,377 | 52,371 | 1,444,132 | 29,835,880 |
- 41 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Newfoundland | ||||||||||||||||
Queensway | Other | Ontario | Total | |||||||||||||
Six months ended June 30, 2020 | $ | $ | $ | $ | ||||||||||||
Exploration and evaluation assets | ||||||||||||||||
Balance as at December 31, 2019 | 658,700 | 16,500 | 425,516 | 1,100,716 | ||||||||||||
Additions | ||||||||||||||||
Acquisition costs | 75,000 | - | 25,000 | 100,000 | ||||||||||||
Balance as at June 30, 2020 | 733,700 | 16,500 | 450,516 | 1,200,716 | ||||||||||||
Exploration and evaluation expenditures | ||||||||||||||||
Cumulative exploration expense - December 31, 2019 | 2,542,344 | - | 837,133 | 3,379,477 | ||||||||||||
Assays | 104,487 | 414 | 211 | 105,112 | ||||||||||||
Geophysics | 611,523 | - | - | 611,523 | ||||||||||||
Office | 821 | - | - | 821 | ||||||||||||
Property taxes, mining leases and rent | 26,020 | - | 400 | 26,420 | ||||||||||||
Salaries & consulting | 297,543 | 8,300 | 36,613 | 342,456 | ||||||||||||
Supplies & equipment | 164,539 | - | 18,631 | 183,170 | ||||||||||||
Travel & accommodations | 26,439 | - | 76 | 26,515 | ||||||||||||
Trenching | 13,510 | - | 31,865 | 45,375 | ||||||||||||
Exploration cost recovery | (30,680 | ) | - | - | (30,680 | ) | ||||||||||
1,214,202 | 8,714 | 87,796 | 1,310,712 | |||||||||||||
Cumulative exploration expense – June 30, 2020 | 3,756,546 | 8,714 | 924,929 | 4,690,189 |
Overall Performance and Results of Operations
Total assets increased to $95,143,240 at June 30, 2021, from $73,536,928 at December 31, 2020, primarily as a result of an increase in investments of $36,298,929, property and equipment of $911,605, sales taxes recoverable of $722,325, and prepaid expenses and deposits of $488,652, partially offset by a decrease in cash of $16,995,841. The most significant assets at June 30, 2021 were cash of $30,735,284 (December 31, 2020: $47,731,125), investments of $57,388,926 (December 31, 2020: $21,089,997), prepaid expenses and deposits of $1,746,855 (December 31, 2020: $1,258,203), sales taxes recoverable of $1,746,694 (December 31, 2020: $1,024,369), property and equipment of $2,288,734 (December 31, 2020: $1,377,129), and exploration and evaluation assets of $985,305 (December 31, 2020: $999,234). Cash decreased by $16,995,841 during the six months ended June 30, 2021 as a result of cash used in operating activities of $19,644,677, purchases of investments of $12,850,001, and purchases of property and equipment of $1,082,903, partially offset by proceeds received from a private placement financing completed in April 2021 for gross proceeds of $14,999,250 net of share issue costs of $587,641, proceeds from disposals of investments of $1,313,462, proceeds received from stock options exercised of $610,388, and proceeds received from warrants exercised of $502,794.
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Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Six months ended June 30, 2021 and 2020
During the six months ended June 30, 2021, loss from operating activities increased by $22,304,878 to $28,020,945 compared to $5,716,067 for the six months ended June 30, 2020. The increase in loss from operating activities is largely due to:
- | An increase of $16,946,821 in exploration and evaluation expenditures. Exploration and evaluation expenditures were $18,257,533 for the six months ended June 30, 2021 compared to $1,310,712 for the six months ended June 30, 2020. The Company continued its 200,000 meter diamond drilling program at its Queensway project and completed approximately 46,279 meters of drilling in 193 holes and incurred higher salaries and consulting fees, geophysics, assay and supplies and equipment costs during the six months ended June 30, 2021 compared to completing a 1,705 km airborne gravity survey at its Queensway project and less exploration activities during the six months ended June 30, 2020. |
- | An increase of $3,906,540 in share-based compensation. Share-based compensation was $6,939,341 for the six months ended June 30, 2021 compared to $3,032,801 for the six months ended June 30, 2020. The increase is due to 1,299,000 fully vested stock options granted and the partial vesting of 270,000 stock options granted with a value of $6,939,341 during the six months ended June 30, 2021 compared to 3,970,000 fully vested stock options with a value of $3,032,801 granted during the six months ended June 30, 2020. |
- | An increase of $494,307 in salaries and consulting fees. Salaries and consulting fees were $1,262,439 for the six months ended June 30, 2021 compared to $768,132 for the six months ended June 30, 2020. The increase is due to more consulting services incurred, higher executive management levels, related compensation and performance bonuses paid to key management personnel during the six months ended June 30, 2021. |
- | An increase of $469,450 in corporate development and investor relations. Corporate development and investor relations was $624,885 for the six months ended June 30, 2021 compared to $155,435 for the six months ended June 30, 2020. The Company undertook a greater amount of activities relating to promotion of the Company’s Queensway project during the six months ended June 30, 2021 compared to fewer corporate development and investor relations activities undertaken during the six months ended June 30, 2020. |
- | An increase of $200,938 in professional fees. Professional fees were $481,574 for the six months ended June 30, 2021 compared to $280,636 for the six months ended June 30, 2020. The increase is due to a greater amount of legal fees incurred as a result of increased corporate activity during the six months ended June 30, 2021 |
Other items
For the six months ended June 30, 2021, other income was $26,368,505 compared to $9,796,986 for the six months ended June 30, 2020. The $16,571,519 increase is largely due to:
- | An increase of $14,874,871 in net change in unrealized gains on investments. Net change in unrealized gains on investments was $24,570,276 for the six months ended June 30, 2021 compared to $9,695,405 in unrealized gains on investments for the six months ended June 30, 2020. The increase is due to changes in the fair values of investments held at June 30, 2021. |
- | An increase of $1,476,610 in settlement of flow-through share premium. Settlement of flow-through share premium was $1,577,727 for the six months ended June 30, 2021 compared to $101,117 for the six months ended June 30, 2020. The Company incurred $11,267,811 of qualifying Canadian exploration expenses and derecognized $1,577,727 of its flow-through share premium liability during the six months ended June 30, 2021, compared to incurring $367,677 of qualifying Canadian exploration expenses and derecognizing $101,117 of its flow-through share premium liability during the six months ended June 30, 2020. |
- 43 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
The Company recorded loss and comprehensive loss of $1,652,440 or $0.01 basic and diluted loss per share for the six months ended June 30, 2021 (six months ended June 30, 2020: income and comprehensive income of $4,080,919 or $0.05 basic and $0.04 diluted earnings per share).
Three months ended June 30, 2021 and 2020
During the three months ended June 30, 2021, loss from operating activities increased by $15,449,343 to $19,761,617 compared to $4,312,274 for the three months ended June 30, 2020. The increase in loss from operating activities is largely due to:
- | An increase of $10,679,101 in exploration and evaluation expenditures. Exploration and evaluation expenditures were $11,261,823 for the three months ended June 30, 2021 compared to $582,722 for the three months ended June 30, 2020. The Company continued its 200,000 meter diamond drilling program during the three months ended June 30, 2021 and completed approximately 30,143 meters of drilling in 121 holes and incurred higher salaries and consulting fees, geophysics, assay and supplies and equipment costs during the three months ended June 30, 2021 compared to less exploration activities during the three months ended June 30, 2020. |
- | An increase of $3,906,540 in share-based compensation. Share-based compensation was $6,939,341 for the three months ended June 30, 2021 compared to $3,032,801 for the three months ended June 30, 2020. The increase is due to 1,299,000 fully vested stock options granted and partial vesting of 270,000 stock options granted with a value of $6,939,341 during the three months ended June 30, 2021 compared to 3,970,000 fully vested stock options with a value of $3,032,801 granted during the three months ended June 30, 2020. |
- | An increase of $433,368 in salaries and consulting fees. Salaries and consulting fees were $761,118 for the three months ended June 30, 2021 compared to $327,750 for the three months ended June 30, 2020. The increase is due to more consulting services incurred and bonuses paid to key management personnel during the three months ended June 30, 2021. |
Other items
For the three months ended June 30, 2021, other income was $23,500,521 compared to $14,999,655 for the three months ended June 30, 2020. The $8,500,866 increase is largely due to:
- | An increase of $7,231,632 in net change in unrealized gains on investments. Net change in unrealized gains on investments was $22,130,578 for the three months ended June 30, 2021 compared to $14,898,946 in unrealized gains on investments for the three months ended June 30, 2020. The increase is due to changes in the fair values of investments held at June 30, 2021. |
- | An increase of $1,291,179 in settlement of flow-through share premium. Settlement of flow-through share premium was $1,392,296 for the three months ended June 30, 2021 compared to $101,117 for the three months ended June 30, 2020. The Company incurred $10,593,556 of qualifying Canadian exploration expenses and derecognized $1,392,296 of its flow-through share premium liability during the three months ended June 30, 2021, compared to incurring $367,677 of qualifying Canadian exploration expenses and derecognizing $101,117 of its flow-through share premium liability during the three months ended June 30, 2020. |
The Company recorded income and comprehensive income of $3,738,904 or $0.02 basic and $0.02 diluted earnings per share for the three months June 30, 2021 (three months ended June 30, 2020: income and comprehensive income of $10,687,381 or $0.11 basic and $0.09 diluted earnings per share).
- 44 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Summary of Quarterly Results
2021 | 2020 | 2019 | ||||||||||||||||||||||||||||||
Jun. 30 | Mar. 31 | Dec. 31 | Sep. 30 | Jun. 30 | Mar. 31 | Dec. 31 | Sep. 30 | |||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Revenues | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Income (loss) and comprehensive income (loss) for the period | 3,738,904 | (2) | (5,391,344 | )(3) | (25,639,722 | )(4) | (11,110,168 | )(5) | 10,687,381 | (6) | (6,606,462 | )(7) | (3,082,583 | )(8) | (85,022 | ) | ||||||||||||||||
Earnings (loss) per Common Share Basic(1) |
0.02 | (0.04 | ) | (0.18 | ) | (0.09 | ) | 0.11 | (0.08 | ) | (0.05 | ) | (0.00 | ) | ||||||||||||||||||
Earnings (loss) per Common Share Diluted(1) |
0.02 | (0.04 | ) | (0.18 | ) | (0.09 | ) | 0.10 | (0.08 | ) | (0.05 | ) | (0.00 | ) |
(1) | Per share amounts are rounded to the nearest cent, therefore aggregating quarterly amounts may not reconcile to year-to-date per share amounts. |
(2) | Increase of income and comprehensive income from prior quarter primarily driven by increase in net change in unrealized gains on investments of $19,690,880, and amortization of flow-through premium liability of $1,206,865, partially offset by an increase in share-based compensation of $6,939,341, exploration and evaluation expenditures of $4,266,113, salaries and consulting fees of $259,797, and a decrease in net realized gains on disposals of investments of $216,346. |
(3) | Decrease of loss and comprehensive loss from prior quarter primarily driven by a decrease in share-based compensation of $17,939,621, gain on sale of exploration and evaluation assets of $4,384,953, amortization of flow-through premium liability of $999,659, an increase in net change in unrealized gains on investments of $9,826,547 and net realized gains on disposals of investments of $204,230, partially offset by an increase in exploration and evaluation expenditures of $2,443,514. |
(4) | Increase of loss and comprehensive loss from prior quarter primarily driven by an increase in share-based compensation of $12,454,708, net change in unrealized losses on investments of $4,854,539, and exploration and evaluation expenditures of $2,298,723, partially offset by an increase in gain on sale of exploration and evaluation assets of $4,384,953, amortization of flow-through premium liability of $699,109, and a decrease of salaries and consulting fees of $217,685. |
(5) | Increase of loss and comprehensive loss from prior quarter primarily driven by an increase in net change in unrealized losses on investments of $17,431,256, share-based compensation of $2,452,112, exploration and evaluation expenditures of $1,666,095, salaries and consulting fees of $371,083, and corporate development and investor relations of $289,109, partially offset by amortization of flow-through premium liability of $384,864. |
(6) | Decrease from prior quarter primarily driven by an increase in net change in unrealized gains on investments of $20,102,487, amortization of flow-through premium liability of $101,117, and a decrease in exploration and evaluation expenditures of $145,268, partially offset by an increase in share-based compensation of $3,032,801. |
(7) | Increase from prior quarter primarily driven by increases in professional fees of $104,545, exploration and evaluation expenditures of $350,891 and net change in unrealized losses on investments of $5,279,853, partially offset by a decrease in share-based compensation of $2,130,528. |
(8) | Increase from prior quarter primarily driven by increases in salaries and consulting fees of $407,399, share-based compensation of $2,130,528, professional fees of $71,652, exploration and evaluation expenditures of $390,984 and impairment of exploration and evaluation assets of $46,335 partially offset by an increase in net change in unrealized gain on investments of $74,854. |
Liquidity and Capital Resources
As at June 30, 2021, the Company had cash of $30,735,284 to settle current liabilities of $3,401,033.
The Company does not currently have a recurring source of revenue and has historically incurred negative cash flows from operating activities. As at June 30, 2021, the Company has working capital of $88,468,168 consisting primarily of cash, investments, prepaid expenses and deposits, and sales taxes recoverable. The Company’s exploration and evaluation assets presently have no proven or probable reserves, and on the basis of information to date, it has not yet determined whether these properties contain economically recoverable resources.
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Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
The recoverability of amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production.
The sources of funds currently available to the Company for its acquisition and exploration projects are solely due from equity financing.
The Company does not have bank debt or banking credit facilities in place as at the date of this report.
April 2021 Financing – Net Proceeds of $14,411,609
On April 8, 2021, the Company completed a non-brokered private placement financing of 2,857,000 flow-through common shares at a price of $5.25 per common share for gross proceeds of $14,999,250. The Company paid share issuance costs of $587,641 in cash of which $524,974 were finder’s fees. The premium received on the flow-through shares issued was determined to be $1,971,330.
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | June 30, 2021 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Queensway Project work program | 14,999,250 | 10,593,556 | (4,405,694 | ) | ||||||||
Total Uses | 14,999,250 | 10,593,556 | (4,405,694 | ) |
The Company used $10,593,556 of the proceeds for qualifying Canadian exploration expenses at its Queensway project during the six months ended June 30, 2021.
Prior Financings
August 2020 Initial Public Offering – Net Proceeds of $28,488,581
On August 11, 2020, the Company completed an initial public offering of 21,000,000 common shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 14, 2020, its agents exercised their overallotment option in full to offer and sell an additional 3,150,000 common shares for gross proceeds of $4,095,000. The Company paid share issuance costs of $2,906,419 in cash and issued 1,379,768 agents’ warrants with a fair value of $771,769. The agents’ warrants are exercisable into common shares of the Company at $1.30 for 12 months from the date of issue in connection with the initial public offering.
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | June 30, 2021 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Queensway Project work program | 21,735,000 | 6,404,085 | (15,330,915 | ) | ||||||||
General and administrative expenses | 4,505,000 | 2,970,812 | (1,534,188 | ) | ||||||||
Working Capital to fund ongoing operations | 5,155,000 | - | (5,155,000 | ) | ||||||||
Total Uses | 31,395,000 | 9,374,897 | (22,020,103 | ) |
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Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
June 2020 Financings – Net Proceeds of $6,992,009
On June 4, 2020, the Company completed a non-brokered private placement financing of 3,994,597 flow-through common shares at a price of $1.50 per common share for gross proceeds of $5,991,896. Finders’ fees paid were $69,394 in cash and the issuance of 64,282 warrants exercisable into common shares of the Company at $1.50 per share for two years from date of issue with a fair value of $25,912. The premium received on the flow-through shares issued was determined to be $1,690,704.
On June 10, 2020, the Company completed a non-brokered private placement financing of 866,385 flow-through common shares at a price of $1.30 per common share for gross proceeds of $1,126,300. Finders’ fees paid were $56,793 in cash and the issuance of 43,582 warrants exercisable into common shares of the Company at $1.30 per share for two years from the date of issue with a fair value of $16,271. The premium received on the flow-through shares issued was determined to be $259,915.
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | June 30, 2021 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Queensway Project work program | 7,118,196 | 7,118,196 | - | |||||||||
Total Uses | 7,118,196 | 7,118,196 | - |
The Company used $674,255 of the proceeds for qualifying Canadian exploration expenses at its Queensway project during the six months ended June 30, 2021.
Outstanding Share Data
During the six months ended June 30, 2021, 716,750 stock options were exercised at a weighted average price of $0.85 per share for gross proceeds of $610,388.
During the six months ended June 30, 2021, 383,448 warrants were exercised at a weighted average price of $1.31 for gross proceeds of $502,794.
On April 8, 2021, the Company completed a non-brokered private placement financing of 2,857,000 flow-through common shares at a price of $5.25 per common share for gross proceeds of $14,999,250. The Company paid share issuance costs of $587,641 in cash of which $524,974 were finder’s fees. The premium received on the flow-through shares issued was determined to be $1,971,330.
Subsequent to June 30, 2021, the Company completed a bought deal financing of 5,048,500 flow-through common shares at a price of $11.39 per flow-through share for gross proceeds of $57,502,415 which includes the full exercise of the Underwriters' over-allotment option. The Company paid the Underwriters a cash fee of $2,734,547 in connection with the financing.
Subsequent to June 30, 2021, 534,500 stock options were exercised at a weighted average exercise price of $1.04 for gross proceeds of $553,620.
Subsequent to June 30, 2021, 35,000 stock options with an exercise price of $6.79 expired.
Subsequent to June 30, 2021, 476,307 warrants were exercised at an exercise price of $1.30 for gross proceeds of $619,199.
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Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
As at June 30, 2021, there were 152,641,721 common shares issued and outstanding. As at the date of this report, there were 158,701,028 shares issued and outstanding.
As at June 30, 2021, there were 15,034,750 stock options and 549,892 warrants outstanding. As at the date of this report, there were 14,465,250 stock options and 73,585 warrants outstanding.
Related Party Transactions
All transactions with related parties have occurred in the normal course of operations and on terms and conditions that are similar to those of transactions with unrelated parties and are measured at the amount of consideration paid or received. A summary of the Company’s related party transactions with corporations having similar directors and officers, being Goldspot Discoveries Inc. and Mexican Gold Mining Corp., is as follows:
Six months ended June 30, | ||||||||
2021 | 2020 | |||||||
$ | $ | |||||||
Amounts paid to Goldspot Discoveries Inc. (i) for administration, exploration and evaluation | (578,749 | ) | (69,511 | ) | ||||
Amounts paid to Mexican Gold Mining Corp. (ii) for legal fees | - | (127,234 | ) | |||||
Options exercised by members of key management | 90,000 | 500,000 |
(i) | Goldspot Discoveries Inc. is a related entity having the following common director and officer to the Company: Denis Laviolette, Director and President. |
(ii) | Mexican Gold Mining Corp. is a related entity having the following common director and officer to the Company: John Anderson, Director, Michael Kanevsky, Chief Financial Officer. On January 26, 2020 the Company entered into a binding letter agreement with Mexican Gold Mining Corp. (“MGMC”) to have all of the issued and outstanding shares of the Company acquired by MGMC. On February 19, 2020, the Company announced that the binding letter agreement was mutually terminated. |
As at June 30, 2021, $541,732 is included in accounts payable and accrued liabilities for amounts owed to GoldSpot Discoveries Inc. (December 31, 2020 - $Nil owed to related corporations).
There are no ongoing contractual commitments resulting from these transactions with related parties.
Key Management Personnel Compensation
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers.
Salaries and | Share-based | Six months ended | ||||||||||||||
Consulting | compensation | Bonus | June 30, 2021 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Executive Chairman | 150,000 | 1,291,220 | 100,000 | 1,541,220 | ||||||||||||
Chief Executive Officer | 150,000 | 1,291,220 | 100,000 | 1,541,220 | ||||||||||||
President | 105,000 | 1,291,220 | 70,000 | 1,466,220 | ||||||||||||
Chief Financial Officer | 27,000 | - | - | 27,000 | ||||||||||||
Chief Operating Officer | 97,500 | 544,192 | 65,000 | 706,692 | ||||||||||||
Non-executive directors | 32,129 | 1,546,426 | - | 1,578,555 | ||||||||||||
Total | 561,629 | 5,964,278 | 335,000 | 6,860,907 |
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Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Salaries and | Share-based | Six months ended | ||||||||||||||
Consulting | compensation | Bonus | June 30, 2020 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Executive Chairman | 119,069 | 1,183,282 | - | 1,302,351 | ||||||||||||
Chief Executive Officer | 100,000 | 1,434,601 | 250,000 | 1,784,601 | ||||||||||||
President | 90,000 | 113,932 | - | 203,932 | ||||||||||||
Chief Financial Officer | 23,400 | - | - | 23,400 | ||||||||||||
Chief Operating Officer | 65,000 | - | - | 65,000 | ||||||||||||
Non-executive directors | - | 56,966 | - | 56,966 | ||||||||||||
Total | 397,469 | 2,788,781 | 250,000 | 3,436,250 |
As at June 30, 2021, $16,250 is included in accounts payable and accrued liabilities for amounts owed to the Chief Operating Officer. (December 31, 2020 - $Nil owed to key management personnel).
Under the terms of their management agreements, certain officers of the Company are entitled to 18 months of base pay in the event of their agreements being terminated without cause.
Risks and Uncertainties
The risks and uncertainties described in this section are considered by management to be the most important in the context of the Company's business. The risks and uncertainties below are not inclusive of all the risks and uncertainties the Company may be subject to and other risks may exist. The Company is in the business of acquiring, exploring and evaluating gold properties. It is exposed to a number of risks and uncertainties that are common to other gold mining companies. The industry is capital intensive at all stages and is subject to variations in commodity prices, market sentiment, inflation and other risks.
Exploration Stage Company
The Company is an exploration stage company and cannot give any assurance that a commercially viable deposit, or “reserve,” exists on any properties for which the Company currently has or may have (through potential future joint venture agreements or acquisitions) an interest. Determination of the existence of a reserve depends on appropriate and sufficient exploration work and the evaluation of legal, economic, and environmental factors. If the Company fails to find a commercially viable deposit on any of its properties, its financial condition and results of operations will be materially adversely affected.
No Mineral Resources
Currently, there are no mineral resources (within the meaning of NI 43-101) on any of the properties in which the Company has an interest and the Company cannot give any assurance that any mineral resources will be identified. If the Company fails to identify any mineral resources on any of its properties, its financial condition and results of operations will be materially adversely affected.
No Mineral Reserves
Currently, there are no mineral reserves (within the meaning of NI 43-101) on any of the properties in which the Company has an interest and the Company cannot give assurance that any mineral reserves will be identified. If the Company fails to identify any mineral reserves on any of its properties, its financial condition and results of operations will be materially adversely affected.
- 49 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Reliability of Historical Information
The Company has relied on, and the disclosure in the Queensway Technical Report is based, in part, upon, historical data compiled by previous parties involved with the Queensway Project. To the extent that any of such historical data is inaccurate or incomplete, the Company’s exploration plans may be adversely affected.
Mineral Exploration and Development
Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection, the combination of which factors may result in the Company not receiving an adequate return of investment capital.
There is no assurance that the Company’s mineral exploration and any development activities will result in any discoveries of commercial bodies of ore. The long-term profitability of the Company’s operations will in part be directly related to the costs and success of its exploration programs, which may be affected by a number of factors. Substantial expenditures are required to establish reserves through drilling and to develop the mining and processing facilities and infrastructure at any site chosen for mining.
Substantial expenditures are required to establish ore reserves through exploration and drilling, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities and grades to justify commercial operations or that funds required for development can be obtained on a timely basis.
Estimates of reserves, mineral deposits and production costs can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In addition, the grade of ore ultimately mined may differ from that indicated by drilling results. Short term factors relating to reserves, such as the need for orderly development of ore bodies or the processing of new or different grades, may also have an adverse effect on mining operations and on the results of operations. Material changes in ore reserves, grades, stripping ratios or recovery rates may affect the economic viability of any project.
Competition and Mineral Exploration
The mineral exploration industry is intensely competitive in all of its phases and the Company must compete in all aspects of its operations with a substantial number of large established mining companies with greater liquidity, greater access to credit and other financial resources, newer or more efficient equipment, lower cost structures, more effective risk management policies and procedures and/or greater ability than the Company to withstand losses. The Company's competitors may be able to respond more quickly to new laws or regulations or emerging technologies or devote greater resources to the expansion of their operations, than the Company can. In addition, current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties. Competition could adversely affect the Company's ability to acquire suitable new mineral properties or prospects for exploration in the future. Competition could also affect the Company's ability to raise financing to fund the exploration and development of its properties or to hire qualified personnel. The Company may not be able to compete successfully against current and future competitors, and any failure to do so could have a material adverse effect on the Company's business, financial condition or results of operations.
- 50 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Additional Funding
The exploration and development of the Company’s mineral properties will require substantial additional capital. When such additional capital is required, the Company will need to pursue various financing transactions or arrangements, including joint venturing of projects, debt financing, equity financing or other means. Additional financing may not be available when needed or, if available, the terms of such financing might not be favorable to the Company and might involve substantial dilution to existing shareholders. The Company may not be successful in locating suitable financing transactions in the time period required or at all. A failure to raise capital when needed would have a material adverse effect on the Company’s business, financial condition and results of operations. Any future issuance of securities to raise required capital will likely be dilutive to existing shareholders. In addition, debt and other debt financing may involve a pledge of assets and may be senior to interests of equity holders. The Company may incur substantial costs in pursuing future capital requirements, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. The ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the gold and copper industries in particular), the Company’s status as a new enterprise with a limited history, the location of the Company’s mineral properties, the price of commodities and/or the loss of key management personnel.
Permits and Government Regulation
The future operations of the Company may require permits from various federal, state, provincial and local governmental authorities and will be governed by laws and regulations governing prospecting, development, mining, production, export, taxes, labour standards, occupational health, waste disposal, land use, environmental protections, mine safety and other matters.
Although Canada has a favorable legal and fiscal regime for exploration and mining, including a relatively simple system for the acquisition of mineral titles and relatively low tax burden, possible future government legislation, policies and controls relating to prospecting, development, production, environmental protection, mining taxes and labour standards could cause additional expense, capital expenditures, restrictions and delays in the activities of the Company, the extent of which cannot be predicted.
Before development and production can commence on any properties, the Company must obtain regulatory and environmental approvals. There is no assurance that such approvals can be obtained on a timely basis or at all. The cost of compliance, with changes in governmental regulations, has the potential to reduce the profitability of operations. The Company is currently in compliance with all material regulations applicable to its exploration activities.
Limited Operating History
The Company has a limited operating history and its mineral properties are exploration stage properties. As such, the Company will be subject to all of the business risks and uncertainties associated with any new business enterprise, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. The current state of the Company’s mineral properties require significant additional expenditures before any cash flow may be generated. Although the Company possesses an experienced management team, there is no assurance that the Company will be successful in achieving a return on shareholders’ investment and the likelihood of success of the Company must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the establishment of any business. There is no assurance that the Company can generate revenues, operate profitably, or provide a return on investment, or that it will successfully implement its plans.
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Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
An investment in the Company’s securities carries a high degree of risk and should be considered speculative by purchasers. There is no assurance that we will be successful in achieving a return on shareholders’ investment and the likelihood of our success must be considered in light of our early stage of operations. You should consider any purchase of the Company’s securities in light of the risks, expenses and problems frequently encountered by all companies in the early stages of their corporate development.
Title Risks
Although the Company has or will receive title opinions for any properties in which it has a material interest, there is no guarantee that title to such properties will not be challenged or impugned. The Company has not conducted surveys on all of the claims in which it holds direct or indirect interests. The Company’s properties may be subject to prior unregistered agreements or transfers or native land claims and title may be affected by unidentified or unknown defects. Title insurance is generally not available for mineral properties and the Company's ability to ensure that it has obtained secure claims to individual mineral properties or mining concessions may be constrained. A successful challenge to the Company’s title to a property or to the precise area and location of a property could cause delays or stoppages to the Company’s exploration, development or operating activities without reimbursement to the Company. Any such delays or stoppages could have a material adverse effect on the Company’s business, financial condition and results of operations.
Laws and Regulation
The Company’s exploration activities are subject to extensive federal, provincial and local laws and regulations governing prospecting, development, production, exports, taxes, labour standards, occupational health and safety, mine safety and other matters in all the jurisdictions in which it operates. These laws and regulations are subject to change, can become more stringent and compliance can therefore become more costly. The Company applies the expertise of its management, advisors, employees and contractors to ensure compliance with current laws.
Uninsured and Underinsured Risks
The Company faces and will face various risks associated with mining exploration and the management and administration thereof Some of these risks are not insurable; some may be the subject of insurance which is not commercially feasible for the Company. Those insurances which are purchased will have exclusions and deductibles which may eliminate or restrict recovery in the event of loss. In some cases, the amount of insurance purchased may not be adequate in amount or in limit.
The Company will undertake intermittent assessments of insurable risk to help ensure that the impact of uninsured/underinsured loss is minimized within reason. Risks may vary from time to time within this intermittent period due to changes in such things as operations operating conditions, laws or the climate which may leave the Company exposed to periods of additional uninsured risk. In the event risk is uninsurable, at its reasonable and sole discretion, the Company may endeavor to implement policies and procedures, as may be applicable and/or feasible, to reduce the risk of related loss.
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Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Public Health Crises such as the COVID-19 Pandemic
In December 2019, a novel strain of coronavirus known as COVID-19 surfaced in Wuhan, China and has spread around the world causing significant business and social disruption. COVID-19 was declared a worldwide pandemic by the World Health Organization on March 11, 2020. The speed and extent of the spread of COVID-19 and the duration and intensity of resulting business disruption and related financial and social impact, are uncertain. Such adverse effects related to COVID-19 and other public health crises may be material to the Company. The impact of COVID-19 and efforts to slow the spread of COVID-19 could severely impact the exploration and any development of the Queensway Project and the Company’s other mineral projects. To date, a number of governments have declared states of emergency and have implemented restrictive measures such as travel bans, quarantine and self-isolation. If the exploration and any development of the Queensway Project and other mineral projects is disrupted or suspended as a result of these or other measures, it may have a material adverse impact on the Company’s financial position and results of operations.
COVID-19 and efforts to contain it may have broad impacts on the Company’s supply chain or the global economy, which could have a material adverse effect on the Company’s financial position. While governmental agencies and private sector participants are seeking to mitigate the adverse effects of COVID-19, and the medical community is seeking to develop vaccines and other treatment options, the efficacy and timing of such measures is uncertain.
Global Economy Risk
The volatility of global capital markets, including the general economic slowdown in the mining sector, over the past several years has generally made the raising of capital by equity or debt financing more difficult. The Company may be dependent upon capital markets to raise additional financing in the future. As such, the Company is subject to liquidity risks in meeting its operating expenditure requirements and future development cost requirements in instances where adequate cash positions are unable to be maintained or appropriate financing is unavailable. These factors may impact the ability to raise equity or obtain loans and other credit facilities in the future and on terms favourable to the Company and its management. If these levels of volatility persist or if there is a further economic slowdown, the Company's operations, the Company's ability to raise capital could be adversely impacted.
In addition, the current outbreak of COVID-19, and any future emergence and spread of similar pathogens, could have a material adverse impact on global economic conditions, which may adversely impact: the Company’s operations, its ability to raise debt or equity financing for the purposes of mineral exploration and development, and the operations of the Company’s suppliers, contractors and service providers.
Environmental Risks
The Company’s activities are subject to extensive laws and regulations governing environment protection. The Company is also subject to various reclamation related conditions. Although the Company closely follows and believes it is operating in compliance with all applicable environmental regulations, there can be no assurance that all future requirements will be obtainable on reasonable terms. Failure to comply may result in enforcement actions causing operations to cease or be curtailed and may include corrective measures requiring capital expenditures. Intense lobbying over environmental concerns by non-governmental organizations has caused some governments to cancel or restrict development of mining projects. Current publicized concern over climate change may lead to carbon taxes, requirements for carbon offset purchases or new regulation. The costs or likelihood of such potential issues to the Company cannot be estimated at this time.
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Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
The legal framework governing this area is constantly developing, therefore the Company is unable to fully ascertain any future liability that may arise from the implementation of any new laws or regulations, although such laws and regulations are typically strict and may impose severe penalties (financial or otherwise). The proposed activities of the Company, as with any exploration, may have an environmental impact which may result in unbudgeted delays, damage, loss and other costs and obligations including, without limitation, rehabilitation and/or compensation. There is also a risk that the Company’s operations and financial position may be adversely affected by the actions of environmental groups or any other group or person opposed in general to the Company’s activities and, in particular, the proposed exploration and mining by the Company within the Provinces of Newfoundland and Ontario.
Social and Environmental Activism
There is an increasing level of public concern relating to the effects of mining on the nature landscape, in communities and on the environment. Certain non-governmental organizations, public interest groups and reporting organizations (“NGOs”) who oppose resource development can be vocal critics of the mining industry. In addition, there have been many instances in which local community groups have opposed resource extraction activities, which have resulted in disruption and delays to the relevant operation. While the Company seeks to operate in a social responsible manner and believes it has good relationships with local communities in the regions in which it operates, NGOs or local community organizations could direct adverse publicity against and/or disrupt the operations of the Company in respect of one or more of its properties, regardless of its successful compliance with social and environmental best practices, due to political factors, activities of unrelated third parties on lands in which the Company has an interest or the Company’s operations specifically. Any such actions and the resulting media coverage could have an adverse effect on the reputation and financial condition of the Company or its relationships with the communities in which it operations, which could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.
Dependence on Management and Key Personnel
The success of the Company is currently largely dependent on the performance of its directors and officers. The loss of the services of any of these persons could have a materially adverse effect on the Company’s business and prospects. There is no assurance the Company can maintain the services of its directors, officers or other qualified personnel required to operate its business. As the Company’s business activity grows, the Company will require additional key financial, administrative and mining personnel as well as additional operations staff. There can be no assurance that these efforts will be successful in attracting, training and retaining qualified personnel as competition for persons with these skill sets increase. If the Company is not successful in attracting, training and retaining qualified personnel, the efficiency of its operations could be impaired, which could have an adverse impact on the Company’s operations and financial condition. In addition, the COVID-19 pandemic may cause the Company to have inadequate access to an available skilled workforce and qualified personnel, which could have an adverse impact on the Company’s financial performance and financial condition.
First Nations Land Claims
Certain of the Company’s mineral properties may now or in the future be the subject of First Nations land claims. The legal nature of First Nations land claims is a matter of considerable complexity. The impact of any such claim on the Company’s material interest in the Company’s mineral properties and/or potential ownership interest in the Company’s mineral properties in the future, cannot be predicted with any degree of certainty and no assurance can be given that a broad recognition of First Nations rights in the areas in which the Company’s mineral properties are located, by way of negotiated settlements or judicial pronouncements, would not have an adverse effect on the Company’s activities. Even in the absence of such recognition, the Company may at some point be required to negotiate with and seek the approval of holders of First Nations interests in order to facilitate exploration and development work on the Company’s mineral properties, there is no assurance that the Company will be able to establish practical working relationships with the First Nations in the area which would allow it to ultimately develop the Company’s mineral properties.
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Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Claims and Legal Proceedings
The Company and/or its directors and officers may be subject to a variety of civil or other legal proceedings, with or without merit. From time to time in the ordinary course of its business, the Company may become involved in various legal proceedings, including commercial, employment and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s attention and resources and cause the Company to incur significant expenses. Furthermore, because litigation is inherently unpredictable, the results of any such actions may have a material adverse effect on the Company’s business, operating results or financial condition.
Conflicts of Interest
Most of the Company’s directors and officers do not devote their full time to the affairs of the Company. All of the directors and some of the officers of the Company are also directors, officers and shareholders of other natural resource or public companies, and as a result they may find themselves in a position where their duty to another company conflicts with their duty to the Company. Although the Company has policies which address such potential conflicts and the OBCA has provisions governing directors in the event of such a conflict, none of the Company’s constating documents or any of its other agreements contain any provisions mandating a procedure for addressing such conflicts of interest. There is no assurance that any such conflicts will be resolved in favour of the Company. If any such conflicts are not resolved in favour of the Company, the Company may be adversely affected.
Gold and Metal Prices
If the Company’s mineral properties are developed from exploration properties to full production properties, the majority of our revenue will be derived from the sale of gold. Therefore, the Company’s future profitability will depend upon the world market prices of the gold for which it is exploring. The price of gold and other metals are affected by numerous factors beyond the Company’s control, including levels of supply and demand, global or regional consumptive patterns, sales by government holders, metal stock levels maintained by producers and others, increased production due to new mine developments and improved mining and production methods, speculative activities related to the sale of metals, availability and costs of metal substitutes.
Moreover, gold prices are also affected by macroeconomic factors such as expectations regarding inflation, interest rates and global and regional demand for, and supply of, gold as well as general global economic conditions. These factors may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities. Additionally, the current COVID-19 pandemic and efforts to contain it, including restrictions on travel and other advisories issued may have a significant effect on gold prices.
Negative Cash Flow from Operating Activities
The Company has no history of earnings and had negative cash flow from operating activities since inception. The Company’s mineral properties are in the exploration stage and there are no known mineral resources or reserves and the proposed exploration programs on the Company’s mineral properties are exploratory in nature. Significant capital investment will be required to achieve commercial production from the Company’s existing projects. There is no assurance that any of the Company’s mineral properties will generate earnings, operate profitably or provide a return on investment in the future. Accordingly, the Company will be required to obtain additional financing in order to meet its future cash commitments.
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Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Going Concern Risk
The Company’s financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. The Company’s future operations are dependent upon the identification and successful completion of equity or debt financings and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that the Company will be successful in completing equity or debt financings or in achieving profitability. The financial statements do not give effect to any adjustments relating to the carrying values and classifications of assets and liabilities that would be necessary should the Company be unable to continue as a going concern.
Risks Associated with Acquisitions
If appropriate opportunities present themselves, the Company may acquire mineral claims, material interests in other mineral claims, and companies that the Company believes are strategic. The Company currently has no understandings, commitments or agreements with respect to any material acquisition, other than as described in this MD&A, and no other material acquisition is currently being pursued. There can be no assurance that the Company will be able to identify, negotiate or finance future acquisitions successfully, or to integrate such acquisitions with its current business. The process of integrating an acquired Company or mineral claims into the Company may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for ongoing development of the Company’s business. Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to goodwill and other intangible assets, which could materially adversely affect the Company’s business, results of operations and financial condition.
Force Majeure
The Company’s projects now or in the future may be adversely affected by risks outside the control of the Company, including the price of gold on world markets, labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods, explosions or other catastrophes, pandemics, epidemics or quarantine restrictions.
Infrastructure
Exploration, development and processing activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important elements of infrastructure, which affect access, capital and operating costs. The lack of availability on acceptable terms or the delay in the availability of any one or more of these items could prevent or delay exploration or development of the Company’s mineral properties. If adequate infrastructure is not available in a timely manner, there can be no assurance that the exploration or development of the Company’s mineral properties will be commenced or completed on a timely basis, if at all. Furthermore, unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of necessary infrastructure could adversely affect our operations.
Exploration operations depend on adequate infrastructure. In particular, reliable power sources, water supply, transportation and surface facilities are necessary to explore and develop mineral projects. Failure to adequately meet these infrastructure requirements or changes in the cost of such requirements could affect the Company’s ability to carry out exploration and future development operations and could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.
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Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Climate Change Risks
The Company acknowledges climate change as an international and community concern and it supports and endorses various initiatives for voluntary actions consistent with international initiatives on climate change. However, in addition to voluntary actions, governments are moving to introduce climate change legislation and treaties at the international, national, state/provincial and local levels. Where legislation already exists, regulation relating to emission levels and energy efficiency is becoming more stringent. Some of the costs associated with reducing emissions can be offset by increased energy efficiency and technological innovation. However, if the current regulatory trend continues, the Company expects that this could result in increased costs at some of its operations in the future.
The Company and the mining industry are facing continued geotechnical challenges, which could adversely impact the Company’s production and profitability. Unanticipated adverse geotechnical and hydrological conditions, such as landslides, floods, seismic activity, droughts and pit wall failures, may occur in the future and such events may not be detected in advance. Geotechnical instabilities and adverse climatic conditions can be difficult to predict and are often affected by risks and hazards outside of the Company’s control, such as severe weather and considerable rainfall. Geotechnical failures could result in limited or restricted access to mine sites, suspension of operations, government investigations, increased monitoring costs, remediation costs, loss of ore and other impacts, which could cause one or more of the Company’s projects to be less profitable than currently anticipated and could result in a material adverse effect on the Company’s business results of operations and financial position.
Information Systems and Cyber Security
The Company’s operations depend on information technology (“IT”) systems. These IT systems could be subject to network disruptions caused by a variety of sources, including computer viruses, security breaches and cyber-attacks, as well as disruptions resulting from incidents such as cable cuts, damage to physical plants, natural disasters, terrorism, fire, power loss, vandalism and theft. The Company’s operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Company’s reputation and results of operations.
Although to date the Company has not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that the Company will not incur such losses in the future. The Company’s risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. As a result, cyber security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.
Critical Accounting Policies and Estimates
The Company prepares its financial statements in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”).
The preparation of the financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.
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Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
The financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant assumptions about the future and other sources of estimation uncertainty that management has made at year end that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to the following:
(i) | Critical accounting estimates |
Valuation of Options Granted and Warrants Issued
The fair value of common share purchase options granted and warrants issued is determined at the issue date using the Black-Scholes option pricing model. The Black-Scholes model involves six key inputs to determine the fair value of an option, which are: risk-free interest rate, exercise price, market price at the grant date, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are or could be affected by significant factors that are out of the Company’s control. The Company is also required to estimate the future forfeiture rate of options based on historical information in its calculation of share-based payments expense. These estimates impact the values of share-based compensation expense, share capital, and reserves.
Fair Value of Financial Derivatives
Investments in warrants that are not traded on a recognized securities exchange do not have a readily available market value. When there are sufficient and reliable market inputs, a Black-Scholes option pricing model is used. The Black-Scholes model involves six key inputs to determine the fair value of a warrant, which include: risk free interest rate, exercise price, market price at the grant date, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are or could be affected by significant factors that are out of the Company’s control.
Computation of Income Taxes
The determination of tax expense for the period and deferred tax assets and liabilities involves significant estimation and judgment by management. In determining these amounts, management interprets tax legislation in a variety of jurisdictions and make estimates of the expected timing of the reversal of deferred tax assets and liabilities. Management also makes estimates of future earnings which affect the extent to which potential future tax benefits may be used.
The Company is subject to assessments by taxation authorities, which may interpret legislation differently. These differences may affect the final amount or the timing of the payment of taxes. We provide for such differences where known based on our best estimate of the probable outcome of these matters.
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Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Shares Issued to Acquire Exploration and Evaluation Assets
From time to time, the Company issues common shares in the course of acquiring exploration and evaluation assets. When shares are issued without cash consideration, the transaction is recognized at the fair value of the assets received. In the event that the fair value of the assets cannot be reliably determined, the Company will recognize the transaction at the fair value of the shares issued. These estimates impact the value of share capital and exploration and evaluation assets.
Valuation of Flow-Through Premium
The determination of the valuation of flow-through premium and warrants in equity units is subject to significant judgment and estimates. The flow-through premium is valued as the estimated premium that investors pay for the flow-through feature, being the portion in excess of the market value of shares without the flow-through feature issued in concurrent private placement financing.
(ii) | Critical accounting judgments |
Impairment of Exploration and Evaluation Assets
Management is required to assess impairment in respect to the Company’s intangible mineral property interests. The triggering events are defined in IFRS 6. In making the assessment, management is required to make judgments on the status of each project and the future plans towards finding commercial reserves. The carrying value of each exploration and evaluation asset is reviewed regularly for conditions that may suggest impairment. This review requires significant judgment. Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the property’s value; whether there has been an accumulation of costs significantly in excess of the amounts originally expected for the property’s acquisition, development or cost of holding; and whether exploration activities produced results that are not promising such that no more work is being planned in the foreseeable future. If impairment is determined to exist, a formal estimate of the recoverable amount is performed and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount. Management has determined that there were indicators of impairment as at June 30, 2021 and has impaired $28,604 (June 30, 2020 - $Nil) in exploration and evaluation assets.
Financial Risk Management
The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board approves and monitors the risk management processes.
Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company does not have financial instruments that potentially subject the Company to credit risk. Overall the Company’s credit risk has not changed significantly from the prior year. Sales taxes recoverable are due from the Canada Revenue Agency and the Company places its cash with financial institutions with high credit ratings, therefore in management’s judgment, credit risk is low.
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Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has in place a planning and budgeting process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. The Company has historically relied on issuance of shares to fund exploration programs and may require doing so again in the future. As at June 30, 2021, the Company has total liabilities of $3,401,033 and cash of $30,735,284 which is available to discharge these liabilities (December 31, 2020 – total liabilities of $635,083 and cash of $47,731,125). Accordingly, in management’s judgment, liquidity risk is low.
There have been no changes in management’s methods for managing liquidity risk since December 31, 2020.
Market Risk
Market risk is the risk that changes in market prices, such as commodity prices, interest rates and foreign exchange rates will affect the Company’s net earnings or the value of financial instruments. The objective of the Company is to manage and mitigate market risk exposures within acceptable limits, while maximizing returns.
(i) Currency Risk
Financial instruments that impact the Company’s net earnings or other comprehensive income due to currency fluctuation include cash accounts denominated in US dollars. Fluctuations in the exchange rate between the US dollar and the Canadian dollar at June 30, 2021 would not have a material impact on the Company’s net earnings and other comprehensive income.
(ii) Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. As the Company deposits its short-term investments into fixed rate guaranteed investment certificates with one year maturities or less, the Company is not exposed to interest rate risk.
(iii) Commodity Price risk
Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company’s property has exposure to predominantly gold. Commodity prices, especially gold, greatly affect the value of the Company and the potential value of its property and investments.
(iv) Equity Price Risk
Equity price risk is the risk that the fair value of or future cash flows from the Company’s financial instruments will significantly fluctuate because of changes in market prices. The Company is exposed to market risk in trading its investments in unfavorable market conditions which could result in dispositions of investments at less than favorable prices. Additionally, the Company adjusts its investments to fair value at the end of each reporting period. This process could result in write-downs of the Company’s investments over one or more reporting periods, particularly during periods of overall market instability. The sensitivity of the Company’s net income (loss) to changes in market prices at June 30, 2021 would change the Company’s net income (loss) by $5,738,893 as a result of a 10% change in the market price of its investments.
There have been no changes in management’s methods for managing market risks since December 31, 2020.
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Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Capital management
The Company’s objectives when managing capital are:
• | To safeguard our ability to continue as a going concern in order to develop and operate our current projects; |
• | Pursue strategic growth initiatives; and |
• | To maintain a flexible capital structure which lowers the cost of capital. |
In assessing our capital structure, we include in our assessment the components of equity consisting of common shares, stock options and warrants, and deficit that as at June 30, 2021 totalled $91,742,207 (December 31, 2020 - $72,901,845). In order to facilitate the management of capital requirements, the Company prepares annual expenditure budgets and continuously monitors and reviews actual and forecasted cash flows. The annual and updated budgets are monitored and approved by the Board of Directors.
To maintain or adjust the capital structure, the Company may, from time to time, issue new shares, issue new debt, repay debt or dispose of non-core assets. The Company’s current capital resources are sufficient to carry out our exploration plans and support operations through the current operating period.
The Company is not subject to any capital requirements imposed by a regulator.
There were no changes in the Company’s approach to capital management during the six months ended June 30, 2021.
Cautionary Notes Regarding Forward-Looking Statements
This MD&A contains forward looking statements which reflect management's expectations regarding the Company’s future growth, results from operations (including, without limitation, statements about the Company’s opportunities, strategies, competition, expected activities and expenditures as the Company pursues its business plan, the adequacy of the Company’s available cash resources and other statements about future events or results), performance (both operational and financial) and business prospects, future business plans and opportunities. Wherever possible, words such as “predicts”, “projects”, “targets”, “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. These forward-looking statements include, among other things, statements relating to; the Queensway Project and the Company’s planned and future exploration on the Queensway Project and its other mineral properties; the Company’s goals regarding exploration and potential development of its projects; the Company’s future business plans; expectations regarding the ability to raise further capital; the market price of gold; expectations regarding any environmental issues that may affect planned or future exploration and development programs and the potential impact of complying with existing and proposed environmental laws and regulations; the ability to retain and/or maintain any require permits, licenses or other necessary approvals for the exploration or development of its mineral properties; government regulation of mineral exploration and development operations in the Provinces of Newfoundland and Labrador and Ontario; the Company’s compensation policy and practices; the Company’s expected reliance on key management personnel, advisors and consultants; effects of the novel COVID-19 outbreak as a global pandemic.
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Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
Forward-looking statements are not a guarantee of future performance and is based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this MD&A including, without limitation, assumptions about: the ability to raise any necessary additional capital on reasonable terms to advance exploration and development of the Company’s mineral properties; future prices of gold and other metal prices; the timing and results of exploration and drilling programs; the demand for, and price of gold; that general business and economic conditions will not change in a material adverse manner; the Company’s ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; the geology of the Queensway Project as described in the Queensway Technical Report; the accuracy of budgeted exploration and development costs and expenditures; future currency exchange rates and interest rates; operating conditions being favourable such that the Company is able to operate in a safe, efficient and effective manner; the Company’s ability to attract and retain skilled personnel; political and regulatory stability; the receipt of governmental, regulatory and third-party approvals, licenses and permits on favourable terms; obtaining required renewals for existing approvals, licenses and permits on favourable terms; requirements under applicable laws; sustained labour stability; stability in financial and capital goods markets; expectations regarding the level of disruption to exploration at the Queensway Project as a result of COVID 19; availability of equipment.
Furthermore, such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of the Company to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking statements. Such risks include, without limitation: the Company may fail to find a commercially viable deposit at any of its mineral properties; there are no resources or mineral reserves on any of the properties in which the Company has an interest; the Company’s plans may be adversely affected by the Company’s reliance on historical data compiled by previous parties involved with its mineral properties; mineral exploration and development are inherently risky; the mineral exploration industry is intensely competitive; additional financing may not be available to the Company when required or, if available, the terms of such financing may not be favourable to the Company; fluctuations in the demand for gold; the Company may not be able to identify, negotiate or finance any future acquisitions successfully, or to integrate such acquisitions with its current business; the Company’s exploration activities are dependent upon the grant of appropriate licenses, concessions, leases, permits and regulatory consents, which may be withdrawn or not granted; the Company’s operations could be adversely affected by possible future government legislation, policies and controls or by changes in applicable laws and regulations; there is no guarantee that title to the properties in which the Company has a material interest will not be challenged or impugned; the Company faces various risks associated with mining exploration that are not insurable or may be the subject of insurance which is not commercially feasible for the Company; public health crises such as the COVID-19 pandemic may adversely impact the Company’s business; the volatility of global capital markets over the past several years has generally made the raising of capital more difficult; compliance with environmental regulations can be costly; social and environmental activism can negatively impact exploration, development and mining activities; the success of the Company is largely dependent on the performance of its directors and officers; the Company’s operations may be adversely affected by First Nations land claims; the Company and/or its directors and officers may be subject to a variety of legal proceedings, the results of which may have a material adverse effect on the Company’s business; the Company may be adversely affected if potential conflicts of interests involving its directors and officers are not resolved in favour of the Company; the Company’s future profitability may depend upon the world market prices of gold; there is no existing public market for the Company’s securities and an active and liquid one may never develop, which could impact the liquidity of the Company’s securities; dilution from future equity financing could negatively impact holders of the Company’s securities; failure to adequately meet infrastructure requirements could have a material adverse effect on the Company’s business; the Company’s projects now or in the future may be adversely affected by risks outside the control of the Company; the Company is subject to various risks associated with climate change; other factors discussed under “Risk and Uncertainties”.
Although the Company has attempted to identify important factors that could cause actual actions, events, conditions, results, performance or achievements to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events, conditions, results, performance or achievements to differ from those anticipated, estimated or intended.
- 62 -
Management’s Discussion and Analysis
For the three and six months ended June 30, 2021 and 2020
The Company cautions that the foregoing lists of important assumptions and factors are not exhaustive. Other events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward-looking statements contained herein. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking statements.
Forward-looking statements contained herein are made as of the date of this MD&A and the Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as and to the extent required by applicable securities laws.
Off-Balance Sheet Arrangements
The Company does not utilize off-balance sheet arrangements.
Proposed Transactions
There are no proposed transactions at the date of this report.
Management’s Report on Internal Control over Financial Reporting
In connection with National Instrument 52-109 Certification of Disclosure in Issuer’s Annual and Interim Filings (“NI 52-109”) adopted in December 2008 by each of the securities commissions across Canada, the Chief Executive Officer and Chief Financial Officer of the Company will file a Venture Issuer Basic Certificate with respect to the financial information contained in the financial statements and respective accompanying Management’s Discussion and Analysis. The Venture Issuer Basic Certification does not include representations relating to the establishment and maintenance of disclosure controls and procedures and internal control over financial reporting, as defined in NI 52-109.
Additional Information
Additional information relating to the Company is available on SEDAR at www.sedar.com.
- 63 -
Exhibit 99.6
CONDENSED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2021 AND 2020
(Unaudited - Expressed in Canadian Dollars)
New Found Gold Corp.
Condensed Interim Statements of Financial Position
(Unaudited - Expressed in Canadian Dollars)
June 30, | December 31, | |||||||||||
2021 | 2020 | |||||||||||
Note | $ | $ | ||||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash | 30,735,284 | 47,731,125 | ||||||||||
Investments, at fair value | 5 | 57,388,926 | 21,089,997 | |||||||||
Amounts receivable | 2,837 | 2,837 | ||||||||||
Prepaid expenses and deposits | 6 | 1,746,855 | 1,258,203 | |||||||||
Sales taxes recoverable | 1,746,694 | 1,024,369 | ||||||||||
Rights-of-use assets | 55,767 | 54,034 | ||||||||||
Financing costs | 192,838 | - | ||||||||||
Total current assets | 91,869,201 | 71,160,565 | ||||||||||
Non-current assets | ||||||||||||
Exploration and evaluation assets | 3 | 985,305 | 999,234 | |||||||||
Property and equipment | 4 | 2,288,734 | 1,377,129 | |||||||||
Total non-current assets | 3,274,039 | 2,376,363 | ||||||||||
Total Assets | 95,143,240 | 73,536,928 | ||||||||||
LIABILITIES | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable and accrued liabilities | 9 | 2,764,361 | 396,451 | |||||||||
Flow-through share premium | 7 | 579,034 | 185,431 | |||||||||
Lease liabilities | 57,638 | 53,201 | ||||||||||
Total current liabilities | 3,401,033 | 635,083 | ||||||||||
EQUITY | ||||||||||||
Share capital | 8 | 101,878,614 | 87,668,764 | |||||||||
Reserves | 8 | 30,491,614 | 24,208,662 | |||||||||
Deficit | (40,628,021 | ) | (38,975,581 | ) | ||||||||
Total equity | 91,742,207 | 72,901,845 | ||||||||||
Total Equity and Liabilities | 95,143,240 | 73,536,928 | ||||||||||
NATURE OF OPERATIONS (Note 1) | ||||||||||||
COMMITMENTS (Note 13) | ||||||||||||
SUBSEQUENT EVENTS (Note 16) |
These financial statements are authorized for issue by the Board of Directors on August 27, 2021. They are signed on the Company’s behalf by:
“Collin Kettell” | , Director | |
“Douglas Hurst” | , Director |
The accompanying notes are an integral part of these condensed interim financial statements.
- 1 -
New Found Gold Corp.
Condensed Interim Statements of (Loss) Income and Comprehensive (Loss) Income
(Unaudited - Expressed in Canadian Dollars)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||
Note | $ | $ | $ | $ | ||||||||||||||||
Expenses | ||||||||||||||||||||
Corporate development and investor relations | 351,209 | 155,435 | 624,885 | 155,435 | ||||||||||||||||
Depreciation | 125,284 | 4,794 | 220,126 | 6,980 | ||||||||||||||||
Exploration and evaluation expenditures | 3,9 | 11,261,823 | 582,722 | 18,257,533 | 1,310,712 | |||||||||||||||
Office and sundry | 52,543 | 24,298 | 94,535 | 45,093 | ||||||||||||||||
Professional fees | 9 | 169,493 | 102,941 | 481,574 | 280,636 | |||||||||||||||
Salaries and consulting | 9 | 761,118 | 327,750 | 1,262,439 | 768,132 | |||||||||||||||
Share-based compensation | 9 | 6,939,341 | 3,032,801 | 6,939,341 | 3,032,801 | |||||||||||||||
Transfer agent and regulatory fees | 62,699 | 49,739 | 102,405 | 55,239 | ||||||||||||||||
Travel | 38,107 | 31,794 | 38,107 | 61,039 | ||||||||||||||||
Loss from operating activities | (19,761,617 | ) | (4,312,274 | ) | (28,020,945 | ) | (5,716,067 | ) | ||||||||||||
Settlement of flow-through share premium | 7 | 1,392,296 | 101,117 | 1,577,727 | 101,117 | |||||||||||||||
Foreign exchange loss | (2,715 | ) | (2,893 | ) | (2,067 | ) | (2,021 | ) | ||||||||||||
Impairment of exploration and evaluation assets | 3 | (28,604 | ) | - | (28,604 | ) | - | |||||||||||||
Interest expense | (1,436 | ) | - | (2,876 | ) | - | ||||||||||||||
Interest income | 22,518 | 2,485 | 61,935 | 2,485 | ||||||||||||||||
Net realized gains (losses) on disposal of investments | 5 | (12,116 | ) | - | 192,114 | - | ||||||||||||||
Net change in unrealized gains on investments | 5 | 22,130,578 | 14,898,946 | 24,570,276 | 9,695,405 | |||||||||||||||
(Loss) income and comprehensive (loss) income for the period | 3,738,904 | 10,687,381 | (1,652,440 | ) | 4,080,919 | |||||||||||||||
(Loss) earnings per share – basic ($) | 0.02 | 0.11 | (0.01 | ) | 0.05 | |||||||||||||||
(Loss) earnings per share – diluted ($) | 0.02 | 0.09 | (0.01 | ) | 0.04 | |||||||||||||||
Weighted average number of shares outstanding | ||||||||||||||||||||
Basic | 10 | 152,036,031 | 97,481,889 | 150,540,230 | 90,306,501 | |||||||||||||||
Diluted | 10 | 162,650,447 | 122,529,753 | 150,540,230 | 115,354,365 |
The accompanying notes are an integral part of these condensed interim financial statements.
- 2 -
New Found Gold Corp.
Condensed Interim Statements of Cash Flows
(Unaudited - Expressed in Canadian Dollars)
Six months ended June 30, | ||||||||
2021 | 2020 | |||||||
$ | $ | |||||||
Cash flows from operating activities | ||||||||
(Loss) income for the period | (1,652,440 | ) | 4,080,919 | |||||
Adjustments for: | ||||||||
Depreciation | 220,126 | 6,980 | ||||||
Impairment of exploration and evaluation assets | 28,604 | - | ||||||
Interest expense | 2,876 | - | ||||||
Settlement of flow-through share premium | (1,577,727 | ) | (101,117 | ) | ||||
Share-based compensation | 6,939,341 | 3,032,801 | ||||||
Net realized (gains) on disposal of investments | (192,114 | ) | - | |||||
Net change in unrealized (gains) on investments | (24,570,276 | ) | (9,695,405 | ) | ||||
(20,801,610 | ) | (2,675,822 | ) | |||||
Change in non-cash working capital items: | ||||||||
Decrease in amounts receivable | - | 43,248 | ||||||
(Increase) in prepaid expenses and deposits | (488,652 | ) | (426,632 | ) | ||||
(Increase) decrease in sales taxes recoverable | (722,325 | ) | 96,454 | |||||
Increase in accounts payable and accrued liabilities | 2,367,910 | 110,211 | ||||||
(Increase) in other | - | (317,654 | ) | |||||
Net cash used in operating activities | (19,644,677 | ) | (3,170,195 | ) | ||||
Cash flows from investing activities | ||||||||
Purchase of exploration and evaluation assets | - | (100,000 | ) | |||||
Expenditures on claims staking | (14,675 | ) | (38,505 | ) | ||||
Proceeds on disposal of investments | 1,313,462 | - | ||||||
Purchases of investments | (12,850,001 | ) | - | |||||
Purchases of property and equipment | (1,082,903 | ) | (189,403 | ) | ||||
Net cash used in investing activities | (12,634,117 | ) | (327,908 | ) | ||||
Cash flows from financing activities | ||||||||
Issuance of common shares in private placements | 14,999,250 | 7,118,196 | ||||||
Share issue costs | (587,641 | ) | (126,187 | ) | ||||
Stock options exercised | 610,388 | 904,500 | ||||||
Warrants exercised | 502,794 | - | ||||||
Financing costs | (192,838 | ) | - | |||||
Lease payments | (46,124 | ) | - | |||||
Interest expense on lease liabilities | (2,876 | ) | - | |||||
Net cash generated from financing activities | 15,282,953 | 7,896,509 | ||||||
Net (decrease) increase in cash | (16,995,841 | ) | 4,398,406 | |||||
Cash at beginning of period | 47,731,125 | 7,336,638 | ||||||
Cash at end of period | 30,735,284 | 11,735,044 |
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS (Note 11)
The accompanying notes are an integral part of these condensed interim financial statements.
- 3 -
New Found Gold Corp.
Condensed Interim Statements of Changes in Equity
(Unaudited - Expressed in Canadian Dollars)
Share capital | Reserves | ||||||||||||
Equity settled | |||||||||||||
Number | Amount |
share-based
payments |
Warrants | Deficit | Total equity | ||||||||
of shares | $ | $ | $ | $ | $ | ||||||||
Balance at December 31, 2019 | 78,924,249 | 10,735,862 | 2,415,009 | 2,252,458 | (6,441,142 | ) | 8,962,187 | ||||||
Shares issued in private placement | 15,000,000 | 16,736,110 | - | - | - | 16,736,110 | |||||||
Flow-through shares issued in private placements | 4,860,982 | 7,118,196 | - | - | - | 7,118,196 | |||||||
Share issue costs | - | (126,187 | ) | - | - | - | (126,187 | ) | |||||
Agents’ warrants issued | - | (42,183 | ) | - | 42,183 | - | - | ||||||
Flow-through share premium | - | (1,957,619 | ) | - | - | - | (1,957,619 | ) | |||||
Share-based compensation | - | - | 3,032,801 | - | - | 3,032,801 | |||||||
Stock options exercised | 2,915,000 | 1,544,670 | (640,170 | ) | - | - | 904,500 | ||||||
Total comprehensive income for the period | - | - | - | - | 4,080,919 | 4,080,919 | |||||||
Balance at June 30, 2020 | 101,700,231 | 34,008,849 | 4,807,640 | 2,294,641 | (2,360,223 | ) | 38,750,907 | ||||||
Shares issued in initial public offering | 24,150,000 | 31,395,000 | - | - | - | 31,395,000 | |||||||
Share issue costs | - | (2,906,419 | ) | - | - | - | (2,906,419 | ) | |||||
Agents’ warrants issued | - | (771,769 | ) | - | 771,769 | - | - | ||||||
Share-based compensation | - | - | 23,424,534 | - | - | 23,424,534 | |||||||
Stock options exercised | 6,280,000 | 10,659,961 | (4,527,837 | ) | - | - | 6,132,124 | ||||||
Warrants exercised | 16,554,292 | 15,283,142 | - | (2,562,085 | ) | - | 12,721,057 | ||||||
Total comprehensive loss for the period | - | - | - | - | (36,615,358 | ) | (36,615,358 | ) | |||||
Balance at December 31, 2020 | 148,684,523 | 87,668,764 | 23,704,337 | 504,325 | (38,975,581 | ) | 72,901,845 | ||||||
Flow-through shares issued in private placements | 2,857,000 | 14,999,250 | - | - | - | 14,999,250 | |||||||
Share issue costs | - | (587,641 | ) | - | - | - | (587,641 | ) | |||||
Flow-through share premium | - | (1,971,330 | ) | - | - | - | (1,971,330 | ) | |||||
Share-based compensation | - | - | 6,939,341 | - | - | 6,939,341 | |||||||
Stock options exercised | 716,750 | 1,045,554 | (435,166 | ) | - | - | 610,388 | ||||||
Warrants exercised | 383,448 | 724,017 | - | (221,223 | ) | - | 502,794 | ||||||
Total comprehensive loss for the period | - | - | - | - | (1,652,440 | ) | (1,652,440 | ) | |||||
Balance at June 30, 2021 | 152,641,721 | 101,878,614 | 30,208,512 | 283,102 | (40,628,021 | ) | 91,742,207 |
The accompanying notes are an integral part of these condensed interim financial statements.
- 4 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
1. | NATURE OF OPERATIONS |
New Found Gold Corp. (the “Company”) was incorporated on January 6, 2016, under the Business Corporations Act in the Province of Ontario. On June 23, 2020, the Company continued as a British Columbia corporation under the Business Corporations Act in the Province of British Columbia. The Company’s registered office is located at Suite 2600 – 595 Burrard Street, Vancouver, British Columbia V7X 1L3.
The Company is a mineral exploration company engaged in the acquisition, exploration and evaluation of resource properties with a focus on gold properties located in the Provinces of Newfoundland and Labrador and Ontario, Canada. The Company’s exploration and evaluation assets presently have no proven or probable reserves, and on the basis of information to date, it has not yet determined whether these properties contain economically recoverable resources. The recoverability of amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production.
On March 11, 2020, the World Health Organization declared the global outbreak of a novel coronavirus identified as “COVID-19” a global pandemic. In order to combat the spread of COVID-19, governments worldwide have enacted emergency measures including travel bans, legally enforced or self-imposed quarantine periods, social distancing and business and organization closures. These measures have caused material disruptions to businesses, governments and other organizations resulting in an economic slowdown and increased volatility in national and global equity and commodity markets. Central banks and governments, including Canadian federal and provincial governments, have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of any interventions. Significant economic and social impacts have limited the Company’s ability to continue its exploration and evaluation activities as intended. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company and its operations in future periods.
These condensed interim financial statements were approved by the Board of Directors of the Company on August 27, 2021.
2. | SIGNIFICANT ACCOUNTING POLICIES |
The principal accounting policies applied in the preparation of these financial statements are set out below.
a) Statement of compliance
The Company’s condensed interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as applicable to interim financial reports including International Accounting Standards 34 “Interim Financial Reporting”.
These condensed interim financial statements do not include all the information and note disclosures required by IFRS for annual financial statements and should be read in conjunction with the annual financial statements for the year ended December 31, 2020, which have been prepared in accordance with IFRS, as issued by the International Accounting Standards Board (“IASB”) and included in Part I of the Handbook of the Chartered Professional Accountants of Canada and consistent with interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).
The policies applied in these condensed interim financial statements are the same as those applied in the most recent annual financial statements and were consistently applied to all the periods presented.
- 5 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
2. | SIGNIFICANT ACCOUNTING POLICIES (continued) |
b) | Basis of presentation |
These condensed interim financial statements have been prepared on a historical cost basis except for financial instruments classified as subsequently measured at fair value. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information.
c) | Significant Accounting Estimates and Judgments |
The preparation of these condensed interim financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.
These condensed interim financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates may be pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant assumptions about the future and other sources of estimation uncertainty that management has made at year end that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to the following:
(i) | Critical accounting estimates |
Valuation of Options Granted and Warrants Issued
The fair value of common share purchase options granted and warrants issued is determined at the issue date using the Black-Scholes option pricing model. The Black-Scholes model involves six key inputs to determine the fair value of an option, which are: risk-free interest rate, exercise price, market price at the grant date, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are or could be affected by significant factors that are out of the Company’s control. The Company is also required to estimate the future forfeiture rate of options based on historical information in its calculation of share-based payments expense. These estimates impact the values of share-based compensation expense, share capital, and reserves.
Fair Value of Financial Derivatives
Investments in warrants that are not traded on a recognized securities exchange do not have a readily available market value. When there are sufficient and reliable market inputs, a Black-Scholes option pricing model is used. The Black-Scholes model involves six key inputs to determine the fair value of a warrant, which include: risk free interest rate, exercise price, market price at the grant date, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are or could be affected by significant factors that are out of the Company’s control.
- 6 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
2. | SIGNIFICANT ACCOUNTING POLICIES (continued) |
c) | Significant Accounting Estimates and Judgments (continued) |
(i) | Critical accounting estimates (continued) |
Computation of Income Taxes
The determination of tax expense for the period and deferred tax assets and liabilities involves significant estimation and judgment by management. In determining these amounts, management interprets tax legislation in a variety of jurisdictions and make estimates of the expected timing of the reversal of deferred tax assets and liabilities. Management also makes estimates of future earnings which affect the extent to which potential future tax benefits may be used.
The Company is subject to assessments by taxation authorities, which may interpret legislation differently. These differences may affect the final amount or the timing of the payment of taxes. We provide for such differences where known based on our best estimate of the probable outcome of these matters.
Shares Issued to Acquire Exploration and Evaluation Assets
From time to time, the Company issues common shares in the course of acquiring exploration and evaluation assets. When shares are issued without cash consideration, the transaction is recognized at the fair value of the assets received. In the event that the fair value of the assets cannot be reliably determined, the Company will recognize the transaction at the fair value of the shares issued. These estimates impact the value of share capital and exploration and evaluation assets.
Valuation of Flow-Through Premium
The determination of the valuation of flow-through premium and warrants in equity units is subject to significant judgment and estimates. The flow-through premium is valued as the estimated premium that investors pay for the flow-through feature, being the portion in excess of the market value of shares without the flow-through feature issued in concurrent private placement financing.
(ii) | Critical accounting judgments |
Impairment of Exploration and Evaluation Assets
Management is required to assess impairment in respect to the Company’s intangible mineral property interests. The triggering events are defined in IFRS 6. In making the assessment, management is required to make judgments on the status of each project and the future plans towards finding commercial reserves. The carrying value of each exploration and evaluation asset is reviewed regularly for conditions that may suggest impairment. This review requires significant judgment. Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the property’s value; whether there has been an accumulation of costs significantly in excess of the amounts originally expected for the property’s acquisition, development or cost of holding; and whether exploration activities produced results that are not promising such that no more work is being planned in the foreseeable future. If impairment is determined to exist, a formal estimate of the recoverable amount is performed and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount. Management has determined that there were indicators of impairment as at June 30, 2021 and has impaired $28,604 (June 30, 2020 - $Nil) in exploration and evaluation assets. Refer to Note 3 for further information.
- 7 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
3. EXPLORATION AND EVALUATION ASSETS
The schedules below summarize the carrying costs of acquisition costs and exploration expenditures incurred to date for each exploration and evaluation asset that the Company is continuing to explore as at June 30, 2021 and December 31, 2020:
Newfoundland | ||||||||||||||||
Queensway(i) | Other | Ontario(ii) | Total | |||||||||||||
Six months ended June 30, 2021 | $ | $ | $ | $ | ||||||||||||
Exploration and evaluation assets | ||||||||||||||||
Balance as at December 31, 2020 | 685,930 | 13,100 | 300,204 | 999,234 | ||||||||||||
Additions | ||||||||||||||||
Staking costs | 14,675 | - | - | 14,675 | ||||||||||||
Impairment of exploration and evaluation assets | - | - | (28,604 | ) | (28,604 | ) | ||||||||||
Balance at June 30, 2021 | 700,605 | 13,100 | 271,600 | 985,305 | ||||||||||||
Exploration and evaluation expenditures | ||||||||||||||||
Cumulative exploration expense - December 31, 2020 | 10,245,545 | 45,851 | 1,286,951 | 11,578,347 | ||||||||||||
Assays | 2,777,282 | - | 6,796 | 2,784,078 | ||||||||||||
Drilling | 7,880,535 | - | - | 7,880,535 | ||||||||||||
Environmental studies | 158,684 | - | - | 158,684 | ||||||||||||
Geophysics | 2,170,422 | - | 69,498 | 2,239,920 | ||||||||||||
Mapping & imaging | 93,337 | - | - | 93,337 | ||||||||||||
Office & general | 246,082 | - | - | 246,082 | ||||||||||||
Property taxes, mining leases and rent | 30,452 | - | 132 | 30,584 | ||||||||||||
Reclamation | 220,340 | - | - | 220,340 | ||||||||||||
Salaries & consulting | 2,476,829 | 6,520 | 34,225 | 2,517,574 | ||||||||||||
Supplies & equipment | 1,616,007 | - | 16,533 | 1,632,540 | ||||||||||||
Technical reports | 278,350 | - | 22,479 | 300,829 | ||||||||||||
Travel & accommodations | 221,812 | - | 678 | 222,490 | ||||||||||||
Trenching | 200 | - | 6,840 | 7,040 | ||||||||||||
Exploration cost recovery | (76,500 | ) | - | - | (76,500 | ) | ||||||||||
18,093,832 | 6,520 | 157,181 | 18,257,533 | |||||||||||||
Cumulative exploration expense – June 30, 2021 | 28,339,377 | 52,371 | 1,444,132 | 29,835,880 |
- 8 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
3. | EXPLORATION AND EVALUATION ASSETS (continued) |
Newfoundland | ||||||||||||||||
Queensway(i) | Other | Ontario(ii) | Total | |||||||||||||
Six months ended June 30, 2020 | $ | $ | $ | $ | ||||||||||||
Exploration and evaluation assets | ||||||||||||||||
Balance as at December 31, 2019 | 658,700 | 16,500 | 425,516 | 1,100,716 | ||||||||||||
Additions | ||||||||||||||||
Acquisition costs | 75,000 | - | 25,000 | 100,000 | ||||||||||||
Balance as at June 30, 2020 | 733,700 | 16,500 | 450,516 | 1,200,716 | ||||||||||||
Exploration and evaluation expenditures | ||||||||||||||||
Cumulative exploration expense - December 31, 2019 | 2,542,344 | - | 837,133 | 3,379,477 | ||||||||||||
Assays | 104,487 | 414 | 211 | 105,112 | ||||||||||||
Geophysics | 611,523 | - | - | 611,523 | ||||||||||||
Office | 821 | - | - | 821 | ||||||||||||
Property taxes, mining leases and rent | 26,020 | - | 400 | 26,420 | ||||||||||||
Salaries & consulting | 297,543 | 8,300 | 36,613 | 342,456 | ||||||||||||
Supplies & equipment | 164,539 | - | 18,631 | 183,170 | ||||||||||||
Travel & accommodations | 26,439 | - | 76 | 26,515 | ||||||||||||
Trenching | 13,510 | - | 31,865 | 45,375 | ||||||||||||
Exploration cost recovery | (30,680 | ) | - | - | (30,680 | ) | ||||||||||
1,214,202 | 8,714 | 87,796 | 1,310,712 | |||||||||||||
Cumulative exploration expense – June 30, 2020 | 3,756,546 | 8,714 | 924,929 | 4,690,189 |
(i) Queensway Project – Gander, Newfoundland
As at June 30, 2021, the Company owns a 100% interest in 86 (December 31, 2020 – 86) mineral licenses including 6,041 (December 31, 2020 – 6,041) claims comprising 151,030 (December 31, 2020 – 151,030) hectares of land located in Gander, Newfoundland. The project rights were acquired by map staking mineral licenses and making staged payments in cash and common shares of the Company from 2016 through 2019 under nine separate, fully executed option agreements. The Queensway Project carries various net smelter return (“NSR”) royalties ranging from 0.6% to 2.5% which can be reduced to 0.5% to 1.6%, at the Company’s option, with payments ranging from $250,000 to $ 1,000,000 to the optionors. The total cost of the NSR’s that may be purchased at the Company’s discretion is $5,250,000.
(ii) Ontario Projects
As at June 30, 2021, the Company owns a 100% interest in the Lucky Strike project in Kirkland Lake, Ontario comprising 11,684 (December 31, 2020 – 11,684) hectares, as well as a portfolio of mining and royalty interests throughout northeastern Ontario. The project rights were acquired by map staking mineral licenses and making staged payments in cash and common shares of the Company from 2016 through 2019 under a fully executed option agreement. The optioned lands carry an NSR ranging from 1% to 2%.
During the six months ended June 30, 2021, the Company recorded an impairment of $28,604 (six months ended June 30, 2020 - $Nil) in acquisition costs related to Ontario projects no longer being explored.
- 9 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
4. PROPERTY AND EQUIPMENT
Property and | Computer | Geological | ||||||||||||||||||
Buildings | Equipment | Equipment | Vehicles | Total | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
Cost | ||||||||||||||||||||
Balance at January 1, 2020 | - | - | - | 45,949 | 45,949 | |||||||||||||||
Additions | 836,009 | 15,860 | 336,020 | 258,551 | 1,446,440 | |||||||||||||||
Balance at December 31, 2020 | 836,009 | 15,860 | 336,020 | 304,500 | 1,492,389 | |||||||||||||||
Additions | 449,247 | 13,429 | 451,067 | 169,160 | 1,082,903 | |||||||||||||||
Balance at June 30, 2021 | 1,285,256 | 29,289 | 787,087 | 473,660 | 2,575,292 | |||||||||||||||
Accumulated Depreciation | ||||||||||||||||||||
Balance at January 1, 2020 | - | - | - | 16,800 | 16,800 | |||||||||||||||
Depreciation | 6,998 | 4,090 | 45,474 | 41,898 | 98,460 | |||||||||||||||
Balance at December 31, 2020 | 6,998 | 4,090 | 45,474 | 58,698 | 115,260 | |||||||||||||||
Depreciation | 20,684 | 5,006 | 89,310 | 56,298 | 171,298 | |||||||||||||||
Balance at June 30, 2021 | 27,682 | 9,096 | 134,784 | 114,996 | 286,558 | |||||||||||||||
Carrying Amount | ||||||||||||||||||||
At December 31, 2020 | 829,011 | 11,770 | 290,546 | 245,802 | 1,377,129 | |||||||||||||||
At June 30, 2021 | 1,257,574 | 20,193 | 652,303 | 358,664 | 2,288,734 |
5. | INVESTMENTS |
The Company classifies its investments at fair value through profit or loss. Realized gains and losses on disposal of investments and unrealized gains and losses in the fair value of investments are reflected in profit or loss in the period in which they occur.
Investments consists of the following as at June 30, 2021 and December 31, 2020:
June 30, 2021 | December 31, 2020 | |||||||
$ | $ | |||||||
Equities held (i) | 46,676,739 | 21,089,997 | ||||||
Warrants held (ii) | 10,712,187 | - | ||||||
Total Investments | 57,388,926 | 21,089,997 |
- 10 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
5. INVESTMENTS (continued)
(i) Equities held
The Company held the following equities as at June 30, 2021 and December 31, 2020:
Fair Value | |||||||||
Cost | June 30, 2021 | ||||||||
Quantity | $ | $ | |||||||
Exploits Discovery Corp.(1) | 13,229,466 | 8,462,704 | 13,327,577 | ||||||
Labrador Gold Corp. | 12,555,556 | 8,850,000 | 19,461,112 | ||||||
Novo Resources Corp. | 6,645,000 | 16,014,450 | 13,888,050 | ||||||
Total Equities | 33,327,154 | 46,676,739 |
(1) 6,562,799 shares of the Exploits Discovery Corp. investment is subject to certain resale restrictions expiring December 8, 2021 and was discounted in the amount of $695,657 at June 30, 2021.
Fair Value | |||||||||
December 31, | |||||||||
Cost | 2020 | ||||||||
Quantity | $ | $ | |||||||
Exploits Discovery Corp.(1) | 6,562,799 | 4,462,703 | 3,957,368 | ||||||
MetalsTech Limited | 3,000,000 | 586,920 | 604,852 | ||||||
Novo Resources Corp. | 6,944,444 | 16,736,110 | 16,527,777 | ||||||
Total Equities | 21,785,733 | 21,089,997 |
(1) 6,562,799 shares of the Exploits Discovery Corp. investment is subject to certain resale restrictions expiring December 8, 2021 and was discounted in the amount of $439,708 at December 31, 2020.
(ii) Warrants held
The Company held the following warrants as at June 30, 2021 and December 31, 2020:
Fair Value | |||||||||||
Cost | June 30, 2021 | ||||||||||
Quantity | $ | $ | |||||||||
Exploits Discovery Corp. | 6,666,667 | - | 3,830,144 | ||||||||
Labrador Gold Corp. | 6,277,778 | - | 6,882,043 | ||||||||
Total Warrants | - | 10,712,187 |
The Company did not hold any investments in warrants as at December 31, 2020.
Warrants held by the Company are classified at fair value through profit or loss, with any gains or losses arising on remeasurement recognized in profit or loss. Warrants that do not have a quoted market price are valued using a Black-Scholes option pricing model using assumptions including risk free interest rate, expected dividend yield, expected volatility, and expected remaining life of the warrant, which are supported by observable market conditions.
- 11 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
5. | INVESTMENTS (continued) |
An analysis of investments including related gains and losses for the six months ended June 30, 2021 and 2020 is as follows:
Six months ended June 30, | ||||||||
2021 | 2020 | |||||||
$ | $ | |||||||
Investments, beginning of period | 21,089,997 | 114,937 | ||||||
Investments received in private placement | - | 16,736,110 | ||||||
Purchase of investments | 12,850,001 | - | ||||||
Disposition of investments | (1,313,462 | ) | - | |||||
Realized gain on investments | 192,114 | - | ||||||
Unrealized gain (loss) on investments | 24,570,276 | 9,695,405 | ||||||
Investments, end of period | 57,388,926 | 26,546,452 |
6. | PREPAID EXPENSES AND DEPOSITS |
June 30, | December 31, | |||||||
2021 | 2020 | |||||||
$ | $ | |||||||
Prepaid expenses | 1,258,242 | 761,595 | ||||||
Mineral license deposits | 488,613 | 496,608 | ||||||
Prepaid expenses and deposits, end of period | 1,746,855 | 1,258,203 |
7. | FLOW-THROUGH SHARE PREMIUM |
Issued | Issued | Issued | ||||||||||||||
June 4, 2020 | June 10, 2020 | April 8, 2021 | Total | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Balance at December 31, 2019 | - | - | - | - | ||||||||||||
Liability incurred on flow-through shares issued | 1,697,704 | 259,915 | - | 1,957,619 | ||||||||||||
Settlement of flow-through share premium on expenditures incurred | (1,536,893 | ) | (235,295 | ) | - | (1,772,188 | ) | |||||||||
Balance at December 31, 2020 | 160,811 | 24,620 | - | 185,431 | ||||||||||||
Liability incurred on flow-through shares issued | - | - | 1,971,330 | 1,971,330 | ||||||||||||
Settlement of flow-through share premium on expenditures incurred | (160,811 | ) | (24,620 | ) | (1,392,296 | ) | (1,577,727 | ) | ||||||||
Balance at June 30, 2021 | - | - | 579,034 | 579,034 |
Flow-through share arrangements entitle the holder of the flow-through share to a 100% tax deduction in respect of qualifying Canadian exploration expenses as defined in the Income Tax Act, Canada (“Qualifying CEE”). As at June 30, 2021, the Company incurred $11,267,811 in Qualifying CEE and amortized a total of $1,577,727 of its flow-through liabilities.
- 12 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
7. | FLOW-THROUGH SHARE PREMIUM (continued) |
The flow-through premium liability does not represent a cash liability to the Company and is to be fully amortized to the statement of loss and comprehensive loss pro-rata with the amount of qualifying expenditures that will be incurred.
As at June 30, 2021, the Company must spend another $4,405,694 of Qualifying CEE within one year to satisfy the remaining flow-through obligations.
8. | SHARE CAPITAL AND RESERVES |
Authorized Share Capital
At June 30, 2021, the authorized share capital comprised an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.
Details of Common Shares Issued in 2021
During the six months ended June 30, 2021, 716,750 stock options were exercised at a weighted average exercise price of $0.85 per share for gross proceeds of $610,388.
During the six months ended June 30, 2021, 383,448 warrants were exercised at a weighted average exercise price of $1.31 per share for gross proceeds of $502,794.
On April 8, 2021, the Company completed a non-brokered private placement financing of 2,857,000 flow-through common shares at a price of $5.25 per common share for gross proceeds of $14,999,250. The Company paid share issuance costs of $587,641 in cash of which $524,974 were finder’s fees. The premium received on the flow-through shares issued was determined to be $1,971,330.
Details of Common Shares Issued in 2020
During fiscal 2020, 9,195,000 stock options were exercised at a weighted average exercise price of $0.77 per share for gross proceeds of $7,036,624.
During fiscal 2020, 16,554,292 warrants were exercised at a weighted average exercise price of $0.77 per share for gross proceeds of $12,721,057.
On March 6, 2020, the Company completed a private placement financing consisting of 15,000,000 common shares in exchange for non-cash consideration of 6,944,444 common shares of Novo Resources Corp. (TSXV: NVO) at a price of $2.41 per share for gross proceeds of $16,736,110.
On June 4, 2020, the Company completed a non-brokered private placement financing of 3,994,597 flow-through common shares at a price of $1.50 per common share for gross proceeds of $5,991,896. Finders’ fees paid were $69,394 in cash and the issuance of 64,282 warrants exercisable into common shares of the Company at $1.50 per share for two years from the date of issue with a fair value of $25,912. The premium received on the flow-through shares issued was determined to be $1,697,704.
On June 10, 2020, the Company completed a non-brokered private placement financing of 866,385 flow-through common shares at a price of $1.30 per common share for gross proceeds of $1,126,300. Finders’ fees paid were $56,793 in cash and the issuance of 43,582 warrants exercisable into common shares of the Company at $1.30 per share for two years from the date of issue with a fair value of $16,271. The premium received on the flow-through shares issued was determined to be $259,915.
- 13 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
8. | SHARE CAPITAL AND RESERVES (continued) |
On August 11, 2020, the Company completed an initial public offering of 21,000,000 common shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 13, 2020, its agents exercised their overallotment option in full to offer and sell an additional 3,150,000 common shares for gross proceeds of $4,095,000. The Company paid share issuance costs of $2,906,419 in cash and issued 1,379,768 agents’ warrants with a fair value of $771,769. The agents’ warrants are exercisable into common shares of the Company at $1.30 per share for 12 months from the date of issue in connection with the initial public offering.
Share Purchase Option Compensation Plan
The Company has a share purchase option plan (the “Plan”) approved by the Company’s shareholders that allows it to grant share purchase options, subject to regulatory terms and approval, to its officers, directors, employees and service providers. The Plan is based on the maximum number of eligible shares not exceeding 10% in the aggregate and 5% with respect to any one optionee of the Company’s outstanding common shares at the time of grant. If outstanding share purchase options are exercised or expire, and/or the number of issued and outstanding common shares of the Company increases, then the share purchase options available to grant under the Plan increase proportionately. The exercise price and vesting terms of each share purchase option is set by the Board of Directors at the time of grant. Share purchase options granted are subject to a four-month hold period and exercisable for a period determined by the Board of Directors which cannot exceed five years.
The continuity of share purchase options for the six months ended June 30, 2021 is as follows:
(i) Subject to shareholder approval.
- 14 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
8. | SHARE CAPITAL AND RESERVES (continued) |
The continuity of share purchase options for the six months ended June 30, 2020 is as follows:
Outstanding | Outstanding | Exercisable | ||||||||||||||||||||||||||
Exercise | December | Cancelled/ | June | June | ||||||||||||||||||||||||
Expiry date | Price | 31, 2019 | Granted | Exercised | Expired | 30, 2020 | 30, 2020 | |||||||||||||||||||||
February 20, 2022 | $ | 0.15 | 1,930,000 | - | (1,580,000 | ) | - | 350,000 | 350,000 | |||||||||||||||||||
September 30, 2023 | $ | 0.40 | 350,000 | - | - | - | 350,000 | 350,000 | ||||||||||||||||||||
December 17, 2024 | $ | 0.50 | 5,605,000 | - | (1,335,000 | ) | - | 4,270,000 | 4,270,000 | |||||||||||||||||||
April 18, 2025 | $ | 1.00 | - | 2,300,000 | - | - | 2,300,000 | 2,300,000 | ||||||||||||||||||||
May 23, 2025 | $ | 1.075 | - | 1,670,000 | - | - | 1,670,000 | 1,670,000 | ||||||||||||||||||||
7,885,000 | 3,970,000 | (2,915,000 | ) | - | 8,940,000 | 8,940,000 | ||||||||||||||||||||||
Weighted average exercise price $ | 0.41 | 1.03 | 0.31 | - | 0.72 | 0.72 | ||||||||||||||||||||||
Weighted average contractual remaining life (years) | 4.22 | 4.84 | - | - | 4.48 | 4.48 |
The weighted average fair value of share purchase options exercised during the six months ended June 30, 2021 is $0.61 (six months ended June 30, 2020 – $0.31).
The weighted average fair value of share purchase options granted during the six months ended June 30, 2021 is $6.01 (six months ended June 30, 2020 – $0.76).
The weighted average share price of share purchase options exercised at the date of exercise during the six months ended June 30, 2021 is $8.21 (six months ended June 30, 2020 – $1.30).
Options were priced based on the Black- Scholes option pricing model using the following weighted average assumptions to estimate the fair value of options granted:
Six months ended June 30, | ||||||||
2021 | 2020 | |||||||
Risk-free interest rate | 0.95 | % | 0.42 | % | ||||
Expected option life in years | 5.0 | 5.0 | ||||||
Expected share price volatility(i) | 91.1 | % | 100 | % | ||||
Grant date share price | $ | 7.066 | $ | 1.0375 | ||||
Expected forfeiture rate | - | - | ||||||
Expected dividend yield | Nil | Nil |
(i) | The expected share price volatility is based on the average historical share price of comparable companies over the life of the option. |
- 15 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
8. | SHARE CAPITAL AND RESERVES (continued) |
Warrants
The continuity of warrants for the six months ended June 30, 2021 is as follows:
Outstanding | Outstanding | |||||||||||||||||||||||
Exercise | December | Cancelled/ | June | |||||||||||||||||||||
Expiry date | Price | 31, 2020 | Issued | Exercised | Expired | 30, 2021 | ||||||||||||||||||
August 11, 2021 | $ | 1.30 | 714,462 | - | (238,155 | ) | - | 476,307 | ||||||||||||||||
August 13, 2021 | $ | 1.30 | 113,399 | - | (113,399 | ) | - | - | ||||||||||||||||
May 12, 2022 | $ | 1.30 | 39,475 | - | (6,230 | ) | - | 33,245 | ||||||||||||||||
May 13, 2022 | $ | 1.50 | 36,052 | - | (11,672 | ) | - | 24,380 | ||||||||||||||||
June 4, 2022 | $ | 1.50 | 25,845 | - | (9,885 | ) | - | 15,960 | ||||||||||||||||
June 10, 2022 | $ | 1.30 | 4,107 | - | (4,107 | ) | - | - | ||||||||||||||||
933,340 | - | (383,448 | ) | - | 549,892 | |||||||||||||||||||
Weighted average exercise price $ | 1.31 | - | 1.31 | - | 1.31 | |||||||||||||||||||
Weighted average contractual remaining life (years) | 0.70 | - | - | - | 0.22 |
The continuity of warrants for the six months ended June 30, 2020 is as follows:
The weighted average fair value of warrants exercised during the six months ended June 30, 2021 is $0.58 (six months ended June 30, 2020 - $Nil).
The weighted average fair value of warrants issued during the six months ended June 30, 2021 is $Nil (six months ended June 30, 2020 - $0.38).
The weighted average share price of warrants exercised at the date of exercise during the six months ended June 30, 2021 is $6.11 (six months ended June 30, 2020 – $Nil).
- 16 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
8. | SHARE CAPITAL AND RESERVES (continued) |
Warrants were priced based on the Black-Scholes option pricing model using the following weighted average assumptions to estimate the fair value of warrants issued:
Six months ended June 30, | ||||||||
2021 | 2020 | |||||||
Risk-free interest rate | - | 0.29 | % | |||||
Expected option life in years | - | 2.0 | ||||||
Expected share price volatility(i) | - | 84 | % | |||||
Grant date share price | - | 1.0375 | ||||||
Expected forfeiture rate | - | - | ||||||
Expected dividend yield | Nil | Nil |
(i) | The expected share price volatility is based on the average historical share price of comparable companies over the life of the option. |
9. | RELATED PARTY BALANCES AND TRANSACTIONS |
All transactions with related parties have occurred in the normal course of operations and on terms and conditions that are similar to those of transactions with unrelated parties and are measured at the amount of consideration paid or received. A summary of the Company’s related party transactions with corporations having similar directors and officers, being Goldspot Discoveries Inc. and Mexican Gold Mining Corp., is as follows:
Six months ended June 31, | ||||||||
2021 | 2020 | |||||||
$ | $ | |||||||
Amounts paid to Goldspot Discoveries Inc. (i) for administration, exploration and evaluation | (578,749 | ) | (69,511 | ) | ||||
Amounts paid to Mexican Gold Mining Corp. (ii) for legal fees | - | (127,234 | ) | |||||
Options exercised by members of key management | 90,000 | 500,000 |
(i) | Goldspot Discoveries Inc. is a related entity having the following common director and officer to the Company: Denis Laviolette, Director and President. |
(ii) | Mexican Gold Mining Corp. is a related entity having the following common director and officer to the Company: John Anderson, Director, Michael Kanevsky, Chief Financial Officer. On January 26, 2020 the Company entered into a binding letter agreement with Mexican Gold Mining Corp. (“MGMC”) to have all of the issued and outstanding shares of the Company acquired by MGMC. On February 19, 2020, the Company announced that the binding letter agreement was mutually terminated. |
As at June 30, 2021, $541,732 is included in accounts payable and accrued liabilities for amounts owed to GoldSpot Discoveries Inc. (December 31, 2020 - $Nil owed to related corporations).
There are no ongoing contractual commitments resulting from these transactions with related parties.
Key management personnel compensation
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers.
- 17 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
9. | RELATED PARTY BALANCES AND TRANSACTIONS (continued) |
Salaries and | Share-based |
Six months
ended |
||||||||||||||
Consulting | compensation | Bonus | June 30, 2021 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Executive Chairman | 150,000 | 1,291,220 | 100,000 | 1,541,220 | ||||||||||||
Chief Executive Officer | 150,000 | 1,291,220 | 100,000 | 1,541,220 | ||||||||||||
President | 105,000 | 1,291,220 | 70,000 | 1,466,220 | ||||||||||||
Chief Financial Officer | 27,000 | - | - | 27,000 | ||||||||||||
Chief Operating Officer | 97,500 | 544,192 | 65,000 | 706,692 | ||||||||||||
Non-executive directors | 32,129 | 1,546,426 | - | 1,578,555 | ||||||||||||
Total | 561,629 | 5,964,278 | 335,000 | 6,860,907 |
Salaries and | Share-based |
Six months
ended |
||||||||||||||
Consulting | compensation | Bonus | June 30, 2020 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Executive Chairman | 119,069 | 1,183,282 | - | 1,302,351 | ||||||||||||
Chief Executive Officer | 100,000 | 1,434,601 | 250,000 | 1,784,601 | ||||||||||||
President | 90,000 | 113,932 | - | 203,932 | ||||||||||||
Chief Financial Officer | 23,400 | - | - | 23,400 | ||||||||||||
Chief Operating Officer | 65,000 | - | - | 65,000 | ||||||||||||
Non-executive directors | - | 56,966 | - | 56,966 | ||||||||||||
Total | 397,469 | 2,788,781 | 250,000 | 3,436,250 |
As at June 30, 2021, $16,250 is included in accounts payable and accrued liabilities for amounts owed to the Chief Operating Officer (December 31, 2020 - $Nil owed to key management personnel).
Under the terms of their management agreements, certain officers of the Company are entitled to 18 months of base pay in the event of their agreements being terminated without cause.
10. | BASIC AND DILUTED EARNINGS PER COMMON SHARE |
Diluted earnings per common share is calculated based on the following weighted average number of common shares outstanding:
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Basic weighted average number of common shares outstanding | 152,036,031 | 97,481,889 | 150,540,230 | 90,306,501 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Share purchase options | 10,143,967 | 8,940,000 | - | 8,940,000 | ||||||||||||
Share purchase warrants | 470,449 | 16,107,864 | - | 16,107,864 | ||||||||||||
Diluted weighted average number of common shares outstanding | 162,650,447 | 122,529,753 | 150,540,230 | 115,354,365 |
The following table lists the number of share purchase options and warrants excluded from the computation of diluted earnings per share because the exercise prices exceeded the average market value of the Company’s common share or are anti-dilutive during the respective periods as follows:
- 18 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
10. | BASIC AND DILUTED EARNINGS PER COMMON SHARE (continued) |
Three months ended June 30, | Six months ended June 30 | ||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||
Share purchase options | 443,000 | - | 14,791,750 | - | |||||||||||||
Share purchase warrants | - | - | 549,892 | - | |||||||||||||
Total | 443,000 | - | 15,341,642 | - |
11. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS |
Six months ended June 30, | |||||||
2021 | 2020 | ||||||
$ | $ | ||||||
Non-cash investing and financing activities: | |||||||
Agents warrants issued in private placements | - | 42,183 | |||||
Investments received for private placement | - | 16,736,110 | |||||
Right-of-use assets | 55,767 | - | |||||
Cash paid for income taxes | - | - | |||||
Cash paid for interest | - | - |
12. | SEGMENTED INFORMATION |
The Company’s operations are limited to a single reportable segment, being mineral exploration and evaluation. All of the Company’s evaluation and exploration assets are located in Canada.
13. | COMMITMENTS |
The following table summarizes the Company’s long-term commitments as at June 30, 2021:
4-5 | More than | |||||||||||||||||||
1 Year | 2 Years | 3 Years | Years | 5 Years | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
Lease obligations | 57,638 | - | - | - | - |
The Company is required to spend approximately $1,443,589 over the next 12 months to keep all claims owned in good standing.
The following table summarizes the Company’s long-term commitments as at December 31, 2020:
4-5 | More than | |||||||||||||||||||
1 Year | 2 Years | 3 Years | Years | 5 Years | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
Lease obligations | 53,201 | - | - | - | - |
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New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
14. | FINANCIAL INSTRUMENTS |
The Company thoroughly examines the various financial instrument risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include credit risk, liquidity risk, currency risk, and interest rate risk. Where material, these risks are reviewed and monitored by the Board of Directors.
(a) Fair Values
Financial assets and liabilities measured at fair value are recognized according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy are as follows:
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2 – Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
The Company’s financial instruments measured at fair value are its investments, which include equities and warrants held. The fair value of equities held is determined using closing prices at the statement of financial position date with any unrealized gain or loss recognized in profit or loss. The Company’s warrants held are not traded on an active exchange and are valued using the Black-Scholes option pricing model using assumptions including risk free interest rate, expected dividend yield, expected volatility and expected remaining life of the warrant which are supported by observable market conditions and as such are classified within level 2 of the fair value hierarchy.
The carrying values of other financial instruments, including cash, deposits and amounts receivable, and accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of these financial instruments.
There was no movement between levels during the six months ended June 30, 2021.
(b) Financial Instrument Risk Exposure
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company does not have financial instruments that potentially subject the Company to credit risk. Overall, the Company’s credit risk has not changed significantly from the prior year. Sales taxes recoverable are due from the Canada Revenue Agency and the Company places its cash with financial institutions with high credit ratings, therefore in management’s judgment, credit risk is low.
There have been no changes in management’s methods for managing credit risk during the six months ended June 30, 2021 and 2020.
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New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
14. | FINANCIAL INSTRUMENTS (continued) |
(b) Financial Instrument Risk Exposure (continued)
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has in place a planning and budgeting process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. The Company has historically relied on issuance of shares to fund exploration programs and may require doing so again in the future. As at June 30, 2021, the Company has total liabilities of $3,401,033 and cash of $30,735,284 which is available to discharge these liabilities (December 31, 2020 – total liabilities of $635,083 and cash of $47,731,125). Accordingly, in management’s judgment, liquidity risk is low.
There have been no changes in management’s methods for managing liquidity risk since December 31, 2020.
Market risk
(i) Currency risk
Financial instruments that impact the Company’s net earnings or other comprehensive income due to currency fluctuation include cash accounts denominated in US dollars. Fluctuations in the exchange rate between the US dollar and the Canadian dollar at June 30, 2021 would not have a material impact on the Company’s net earnings and other comprehensive income.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. As the Company deposits its short-term investments into fixed rate guaranteed investment certificates with one-year maturities or less, the Company is not exposed to interest rate risk.
(iii) Commodity price risk
Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company’s property has exposure to predominantly gold. Commodity prices, especially gold, greatly affect the value of the Company and the potential value of its property and investments.
(iv) Equity price risk
Equity price risk is the risk that the fair value of or future cash flows from the Company’s financial instruments will significantly fluctuate because of changes in market prices. The Company is exposed to market risk in trading its investments in unfavorable market conditions which could result in dispositions of investments at less than favorable prices. Additionally, the Company adjusts its investments to fair value at the end of each reporting period. This process could result in write-downs of the Company’s investments over one or more reporting periods, particularly during periods of overall market instability. The sensitivity of the Company’s net income (loss) to changes in market prices at June 30, 2021 would change the Company’s net income (loss) by $5,738,893 as a result of a 10% change in the market price of its investments.
There have been no changes in management’s methods for managing market risks since December 31, 2020.
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New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and six months ended June 30, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
15. | CAPITAL MANAGEMENT |
The Company’s objectives when managing capital are:
· | To safeguard our ability to continue as a going concern in order to develop and operate our current projects; |
· | Pursue strategic growth initiatives; and |
· | To maintain a flexible capital structure which lowers the cost of capital. |
In assessing our capital structure, we include in our assessment the components of equity consisting of common shares, stock options and warrants, and deficit that as at June 30, 2021 totalled $91,742,207 (December 31, 2020 - $72,901,845). In order to facilitate the management of capital requirements, the Company prepares annual expenditure budgets and continuously monitors and reviews actual and forecasted cash flows. The annual and updated budgets are monitored and approved by the Board of Directors. To maintain or adjust the capital structure, the Company may, from time to time, issue new shares, issue new debt, repay debt or dispose of non-core assets. The Company’s current capital resources are sufficient to carry out our exploration plans and support operations through the current operating period.
The Company is not subject to any capital requirements imposed by a regulator.
There were no changes in the Company’s approach to capital management during the six months ended June 30, 2021.
16. | SUBSEQUENT EVENTS |
Prospectus Offering
Subsequent to June 30, 2021, the Company completed a bought deal financing of 5,048,500 flow-through common shares at a price of $11.39 per flow-through share for gross proceeds of $57,502,415 which includes the full exercise of the Underwriters' over-allotment option. The Company paid the Underwriters a cash fee of $2,734,547 in connection with the financing.
Stock Options Exercised
Subsequent to June 30, 2021, 534,500 stock options were exercised at a weighted average exercise price of $1.04 for gross proceeds of $553,620.
Stock Options Expired
Subsequent to June 30, 2021, 35,000 stock options with an exercise price of $6.79 expired.
Warrants Exercised
Subsequent to June 30, 2021, 476,307 warrants were exercised at an exercise price of $1.30 for gross proceeds of $619,199.
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Exhibit 99.7
Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
The following discussion is management’s assessment and analysis of the results and financial condition of New Found Gold Corp. (the “Company” or “NFG”) and should be read in conjunction with the accompanying unaudited condensed interim financial statements and related notes. The financial data was prepared using accounting policies consistent with International Financial Reporting Standards (“IFRS”) and all figures are reported in Canadian dollars unless otherwise indicated. Please refer to the cautionary note regarding forward-looking statements and information within this Management’s Discussion & Analysis (“MD&A”) and the Risks Factors discussed in the Company’s most recent Annual Information Form on file with the Canadian provincial securities regulatory authorities.
This MD&A contains forward-looking information and forward-looking statements, within the meaning of applicable Canadian securities legislation, (collectively, “forward-looking statements”), that involve numerous risks and uncertainties. The Company continually seeks to minimize its exposure to business risks, but by the nature of its business and exploration activities and size, will always have some risk. These risks are not always quantifiable due to their uncertain nature. Should one or more of these risks and uncertainties, including those described under the headings “Risks and Uncertainties” and “Cautionary Notes Regarding Forward-Looking Statements” materialize, or should underlying assumptions prove incorrect, then actual results may vary materially from those expressed or implied in forward-looking statements. The effective date of this report is May 26, 2021.
The scientific and technical information contained in this MD&A has been reviewed and approved by the Company’s Chief Operating Officer, Greg Matheson, P.Geo., a Qualified Person as defined by National Instrument 43-101- Standards of Disclosure for Mineral Projects (“NI 43-101”). The scientific and technical information in this MD&A relating to the Queensway Project is derived from, and in some instances is a direct extract from, and is based on the assumptions, qualifications and procedures set out in, the report entitled “Technical Report on the Queensway Gold Project, Newfoundland, Canada” with an effective date of April 15, 2020, prepared in accordance with NI 43-101 (the “Queensway Technical Report”). Reference should be made to the full text of the Queensway Technical Report, which is available for review under the Company’s profile on SEDAR at www.sedar.com.
Description of Business
The Company was incorporated on January 6, 2016, under the Business Corporations Act (Ontario). On June 23, 2020, the Company continued as a British Columbia corporation under the Business Corporation Act in the province of British Columbia. The Company’s head office is located at 1430 – 800 West Pender Street, Vancouver, British Columbia V6C 2V6, and its registered office is located at Suite 2600 – 595 Burrard Street, Vancouver, British Columbia V7X 1L3. On August 11, 2020, the Company completed an initial public offering and listed on the TSX Venture Exchange under the symbol “NFG”.
The Company is a mineral exploration company engaged in the acquisition, exploration and evaluation of resource properties with a focus on gold properties located in the Provinces of Newfoundland and Labrador and Ontario, Canada. The Company’s principal objective is to explore and develop the Queensway Project, which is located near Gander, Newfoundland and to identify other properties worthy of investment and exploration. For the purpose of NI 43-101, the Queensway Project is the Company’s only material property.
The Queensway Project is comprised of 86 mineral licenses, including 6,041 claims comprising 151,030 hectares of land located near Gander, Newfoundland. The Queensway Project is accessible by main access roads including the Trans-Canada Highway (“TCH”) that passes through the southern portion of the project and has high voltage electric transmission lines running through the project area. In addition, the Company owns a 100% interest in the Lucky Strike project in Kirkland Lake, Ontario comprising 11,684 hectares, as well as a portfolio of mining and royalty interests throughout northeastern Ontario. The Lucky Strike Property is located 10km north of Larder Lake, Ontario and is comprised of 639 single cell un-patented mining claims. The Company is well financed to advance its planned exploration activities on the projects as intended.
As of the date of this MD&A, the Company’s Board of Directors consisted of the following: Collin Kettell (Executive Chairman), Craig Roberts, Denis Laviolette, Douglas Hurst and Quinton Hennigh.
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Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
Additional information relating to the Company is available on the Company’s website at www.newfoundgold.ca.
Project Summary
Queensway Project, Newfoundland
Ownership
The Queensway Project contains nine optioned claim packages along with mineral licenses map staked by NFG. The Company acquired the rights to the Queensway Project by map staking mineral licenses and making a series of staged payments in cash and common shares of the Company from 2016 through 2019 under nine separate option agreements. All of the option agreements have been fully exercised resulting in 100% ownership by NFG of the mineral licenses related to such option agreements. In addition to the nine option agreements, NFG also conducted map staking resulting in 49 map staked mineral licenses, which are held 100% by NFG. The optioned lands also carry various net smelter royalties, the option agreements are described in detail below, and their location can be seen in the figure below.
Queensway Project – Option Agreement Claim Groups
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Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
Queensway Project – Royalties Agreements and Encumbrances
1. | Linear and JBP Linear Property, NL - In July 2016, the Company acquired a 100% interest in the Linear and JBP Linear Property via an option agreement with Krinor Resources, Kevin Keats and Allan Keats. The Linear and JBP Linear property is comprised of six map staked licences covering 2,150 hectares and under the terms of the agreement the Company is to pay the optionor a total of $54,000 and issue 45,000 shares over a 36-month period; the agreement was fully executed in July 2019. A net smelter royalty grant of 0.6% is payable to the optionor along with an underlying net smelter royalty of 1.0% covering five of the six claims is payable to Paragon Minerals Corporation. This agreement contains a 2 km area of influence that subjects adjacent lands to the additional 0.6% net smelter royalty. |
2. | Unity Property, NL - In September 2016, the Company acquired a 100% interest in the Unity Property via an option agreement with Unity Resources Inc., Gary Lewis, Donna Lewis, Nigel Lewis, Leonard Lewis, and Aubrey Budgell. The unity property is comprised of ten map staked licences covering 8,150 hectares and under the terms of the agreement the Company is to pay the optionor a total of $90,000 over a 60-month period; the agreement was fully executed in June 2020. A net smelter royalty grant of 1.6% is payable to the optionor which can be reduced by 1.0% by paying the optionor $1,000,000. This agreement contains a 2 km area of influence that subjects adjacent lands but is bounded to areas east and north of the subject lands and does not impact any other optioned property. |
3. | United Gold Property, NL - In October 2016, the Company acquired a 100% interest in the United Gold Property via an option agreement with Noreen Kennedy. The United Gold property is comprised of one map staked licence covering 275 hectares and under the terms of the agreement the Company is to pay the optionor a total of $16,500 and $ 16,500 worth of shares are to be issued over a 6-month period; this option agreement has been fully executed and the Company is the sole owner of the property. A net smelter royalty grant of 0.6% is payable to the optionor. |
4. | Golden Bullet Property, NL - In November 2016, the Company acquired a 100% interest in the Golden Bullet Property via an option agreement with Roland Quinlan, Eddie Quinlan and Larry Quinlan. The Golden Bullet property is comprised of four map staked licences covering 1,200 hectares and under the terms of the agreement the Company is to pay the optionor a total of $125,000 and $100,000 worth of common shares of NFG are to be issued over a 36-month period; the option was fully executed in November 2019 resulting in a 100% ownership by NFG. A net smelter royalty grant of 1.6% is payable to the optionor which can be reduced by 1.0% by paying the optionor $1,000,000. This agreement contains a 2 km area of influence that subjects adjacent lands but is limited to lands acquired after the agreement date. |
5. | Blackmore Property, NL - In December 2016, the Company acquired a 100% interest in the Blackmore Property via an option agreement with Neal Blackmore. The Blackmore property is comprised of two map staked licences covering 175 hectares and under the terms of the agreement the Company is to pay the optionor a total of $10,000; this option agreement has been fully executed and the Company is the sole owner of the property. A net smelter royalty grant of 0.6% is payable to the optionor. |
6. | Guinchard Property, NL - In April 2017, the Company acquired a 100% interest in the Guinchard Property via an option agreement with Wayde Guinchard, Myrtle Guinchard and Peter Rogers. The Guinchard property is comprised of five map staked licences covering 625 hectares and under the terms of the agreement the Company is to pay the optionor a total of $45,000 and 105,000 shares over a 24-month period; the option was fully executed in April 2019 and the Company is the sole owner of the property. A net smelter royalty grant of 1.0% is payable to the optionor which can be reduced by 0.5% by paying the optionor $1,000,000. |
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Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
7. | JBP Linear Property, NL - In May 2017, the Company acquired a 100% interest in the JBP Linear Property via an option agreement with Roland Quinlan and Eddie Quinlan. The JBP Linear property is comprised of five map staked licences covering 1250 hectares and under the terms of the agreement the Company is to pay the optionor a total of $45,000 over a 24-month period; the option was fully executed in November 2019 and the Company is the sole owner of the property; although claim transfers are pending at the time of the report. A net smelter royalty grant of 1.6% is payable to the optionor which can be reduced by 1.0% by paying the optionor $1,000,000. |
8. | P-Pond Property, NL - In May 2017, the Company acquired a 100% interest in the P-Pond Property via an option agreement with Stephen Stockley, Mark Stockley and Edward Stockley. The P-Pond property is comprised of three map staked licences covering 175 hectares and under the terms of the agreement the Company is to pay the optionor a total of $30,000 and $10,000 worth of shares are to be issued over a 12-month period; this option agreement has been fully executed and the Company is the sole owner of the property. A net smelter royalty grant of 1.0% is payable to the optionor which can be reduced by 0.5% by paying the optionor $250,000. |
9. | Lush Property, NL - In September 2018, the Company acquired a 100% interest in the Lush Property via a purchase agreement with Paragon Minerals Corp. The Lush property is comprised of one map staked licence covering 50 hectares. Under the terms of the purchase agreement the Company is to grant a net smelter royalty of 0.5% payable to Paragon Minerals Corp along with an underlying net smelter royalty of 2.0% payable to Tom Lush which can be reduced by 1.0% by paying $1,000,000 to Tom Lush. |
10. | Queensway Map Staked Lands, NL - Between August 2016 and April 2017, the Company acquired a 100% interest of twenty-one licences covering 73,830 hectares through map staking. In April of 2020, an additional twenty-eight mineral licenses were staked totalling 64,175 hectares shown in the figure above. |
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Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
Queensway Project – Overall Project Showing Gold Occurrences and Fault Projects
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Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
Environmental and Exploration Permitting
All exploration activities, including reclamation, must comply with all pertinent federal and provincial laws and regulations, the fundamental requirement of which, is that exploration on crown land must prevent unnecessary or undue degradation or impact on fish and wildlife and requires reclamation if any degradation or impacts that occur. All exploration activities in Newfoundland and Labrador require an Exploration Approval from the Department of Natural Resources prior to the start of work. In this, approval requirements for the exploration are listed with contacts for the various entities given. Five Exploration Approvals are in place as of the date of this MD&A along with other associated provincial permits.
The first Exploration Approval is for diamond drilling (750 Holes) on the Queensway North (“QWN”) area shown on the map above; this approval expires on October 8, 2021. The second is for airborne geophysics, over the entire Queensway Project and expires on September 24, 2021. The third Exploration Approval is for trenching within the Queensway South (“QWS”) area shown on the map above and expires on October 16, 2021. A fourth Exploration Approval covers geochemical sampling and prospecting over the entire Queensway Project and expires on August 12, 2021. A fifth Exploration Approval covers diamond drilling within the GGS area near Eastern Pond and expires on October 16, 2021. Any changes to the planned work have to be submitted to the Department of Natural Resources and either an amended approval is given or a new application has to be made.
Water removal from ponds/streams etc. for trenching (washing trenches) or drilling requires a Water Use License. One water use permit is in place for the QWN claims and related diamond drilling and trenching. Two water use licenses are in place for the GGS claims to cover trenching and diamond drilling.
A number of secondary permits and authorizations are held by the Company to conduct its exploration activities related to the cutting of wood, construction of access trails and modifications to water bodies.
In October 2020, the Company submitted an environmental registration document with the Newfoundland Ministry of Environment for review related to its diamond drilling activities on the QWN claim group. The Company was released from the environmental review on December 12, 2020 subject to several operating/reporting conditions including:
· | Limitations on the percentage of land disturbance within protected public supply areas (“PPWSAs”) |
· | Requirements for the capping or sealing of drill holes in and outside of PPWSAs |
· | The establishment of a water-sampling program |
· | The development of a waste management plan |
· | The maintenance of buffers at certain shoreline, outflow, waterbodies and wetland sites and restrictions on vegetation clearing near bird habitats; and |
· | The development of a women’s employment plan |
To date, all of our operating conditions have been met, and we are in compliance with all reporting conditions.
Generally, the mineral licenses are available for exploration activities year-round and only subject to the conditions of the exploration approvals and water use license; other activities such as construction, road building, camps and water crossings may require additional permits from outside of the mines department. Mineral licenses within the southernmost portion of Gander Gold South (“GGS”), specifically licenses 024557M, 024558M, 024561M, 024563M, 024568M, and 024570M are restricted from exploration activities from mid-May to early-July due to spring habitat for Newfoundland caribou.
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Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
Project Infrastructure
The main access roads include the TCH that passes through the southern portion of the Appleton Fault Zone (“AFZ”) / Joe Batts Pond Deformation Zone (“JBPDZ”) claim areas on the QWN, and the Northwest Gander (“NWG”) road that extends along the western portion of the property from the TCH just west of Glenwood, to the south and west of Gander Lake on the GGS. Gravel woods access roads originally built for the forestry industry, such as the AFZ access, the JBPDZ access, the JBP road and the roads to the east of the steel bridge across the NWG River and across the bridge to the east of the Southwest Gander River extend through most of the property, with areas in the extreme SE and SW the most difficult to access. The SW area is best accessed by woods roads from Route 360, the Baie D’Espoir highway, that leaves the TCH at Bishop’s Falls, approximately 70 km to the west of Glenwood.
Transportation availability includes the international airport at Gander which has bush plane and helicopter bases, a helicopter base in Appleton and shipping through the ports of Lewisporte and Botwood, 25 km and 70 km to the west respectively, and north of the TCH, both with good harbours although problems with winter shipping due to sea and pack ice.
Electricity is available from the NL provincial grid, which has three transmission lines through the Queensway Project as follows:
1) | A 350 kV HVdc direct current line which passes through the approximate centre of the GGS licences; |
2) | Two 138 kV HVac transmission lines to the north of the TCH crossing the AFZ and JBPDZ trends on the QWN licences; |
3) | A 69 kV HVac transmission line that approximately parallels the TCH to the north across the AFZ and JBPDZ trends on the QWN licences and follows the TCH and secondary routes. |
In addition, electrical power is supplied, through the provincial grid, to the towns of Glenwood and Appleton which are surrounded by the NFG Queensway licences.
Historical Work
To date there has been over 25,538 metres of core in 218 holes drilled historically on the Queensway Project by Noranda, Rubicon and various operators from the mid 1980’s through to 2012. Historical core drilling has primarily occurred north of Gander Lake along the two principal fault structures the AFZ and JBPDZ; the exploration drilling has been spread out amongst individual zones with drilling along 5 km of the AFZ targeting the Lotto, Powerline, Cokes, Keats, Dome, Trench 26, Road, Knob, Letha and Grouse Zones. Drilling at the JBPDZ has focussed along 3 km targeting the Pocket Pond and H-Pond zones and one drill hole targeting the 798 zone. Significantly lesser number of drill holes have also targeted zones south of Gander Lake including the Pauls Pond showing, Aztec and A-Zone extension and the Goose zone.
Throughout the 1980’s through mid-2000’s various operators and prospectors have completed surface geochemical sampling including tills, soils and rock samples. This amounts to roughly 1,200 till samples, over 60,000 soil samples and 4,000 rock samples spread across the large district scale project with concentrations of work around the many showings in the Queensway license group. This work has identified a number of gold in soil or gold in till anomalies that have led to surface gold discoveries or have yet to be explained with follow up exploration. Several locations throughout the project have defined surface float samples containing high grade gold mineralization some of which have led to surface gold occurrences while other locations have not been adequately explored to trace them to source.
Various historical ground geophysical surveys have been conducted throughout the Queensway Project with most of this work concentrated either along the AFZ, JBPDZ or in the region of the Paul’s Pond and Greenwood Pond showings in the QWS claim group. Over 50 different geophysical surveys including VLF, EM, MAG and IP have covered ground-based grids throughout the Queensway Project. Various anomalies have been identified and often limited follow up exploration has occurred.
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Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
A significant number of surface trenches have been conducted at the project with over 330 trenches. Many of the historical trenches have targeted soil and till anomalies with only some of these reaching bedrock; often the trenches not reaching bedrock have left both soil and till anomalies unexplained and open for further interpretation and exploration.
In 1994 Gander River Minerals optioned the Knob property including the Knob prospect from Noranda Exploration Co Ltd. Drilling by Gander River Minerals allowed for production of a historical resource estimate of 236,391 tonnes grading 10.26 g/t Au. This historical estimate was published by Gander River Minerals in the technical document titled “Eighth Year Assessment Report Summary of Diamond Drilling Activities Conducted Within Licence No. 4344 The ‘Knob’ Prospect N.T.S. 20/15” authored by Dean Sheppard, 1994 (Geofile 002D_0296).
The data used in the preparation of the historical resource estimate does not meet the current standards of exploration quality assurance and quality control protocols such that it should not be relied upon to produce a current resource estimate for the Knob prospect. Significant additional drilling and data verification would be required to ensure the quality of historic data meets current standards for use in a resource estimate. Additionally, the methods used in the preparation of the resource as a block long section methodology include certain assumptions of geological continuity and grade variography are not adequate to treat this as a current mineral resource estimate.
A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and the issuer is not treating the historical estimate as current mineral resources or mineral reserves.
Project Geology
The Queensway Project is located within the Exploits subzone of the Dunnage zone and lies just to the west of the Gander River Ultramafic Complex (“GRUC”) fault, which is the Dunnage-Gander zones boundary. See figure below:
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Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
Queensway Project – Geological Overview Map
It mostly comprises Cambrian to Silurian meta-sedimentary rocks of the Davidsville group (Williams et al., 1988; Colman-Sadd et al., 1990; Valverde-Vaquero et al., 2006; van Staal, 2007; O’Reilly et al., 2010). The Davidsville group is divided into the Outflow Formation and the Hunt’s Cove Formation. The property south of Gander Lake also includes the boundary between the Davidsville and Indian Island groups. The latter mainly comprises Silurian siliciclastic rocks, intruded by the Mount Peyton Intrusive suite.
There are over 100 gold showings/occurrences on and around the Queensway Project however the most notable mineralized zones in the Queensway Project are the JBPDZ which includes the H-Pond, Pocket Pond, Glass, Logan and Lachlan showings and the AFZ which includes the Dome, Little, Knob, Letha, Lotto, Grouse, Road, Bullet, Trench 26, Cokes, Powerline, Keats and Bowater showings. A number of gold mineralized occurrences also occur within the QWS claim group including the Greenwood Pond, Hornet, North Pauls Pond, Aztec, Goose, Road Gabbro and LBNL showings.
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Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
Recent Exploration
NFG’s Current Drill Campaign
On August 17, 2020 the Company announced it had initiated a 100,000m HQ size diamond drilling program at the Queensway Project. Drilling started at the Little-Powerline trend and would progress through various targets within the QWN property including an initial 12,000m planned for the Keats Zone. The Company announced on January 6, 2021 that it has now increased the drilling program started in 2020 to a total of 200,000m and plans to continue this program through to 2022 with eight drill rigs. In 2020 the Company completed 66 drill holes targeting the Little-Powerline, Lotto, Dome and Keats zones for a total of 13,400m.
Queensway North – Plan Map of Initial 2020 Drilling Grid Lines/Zones
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Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
2020 Trenching Campaign
NFG began surface excavation of a number of targets starting in July 2020 and completed 16 trenches of varying size; all of the excavation to date has occurred along the Appleton Fault Zone and includes trenching of the Little Zone, Hornet Zone, Road Zone as well as the discovery of two new zones (Regular Zone and Zone 36). Zone 36 is located 2.5 Km north-west of the Keats Zone as shown in the above figure and has been exposed along 120m of strike length and shows mineralization of Arsenopyrite, Pyrite, Chalcopyrite, Boulangerite and Visible Gold.
2020 Field Program
Starting in June 2020, the Company initiated a field recognisance program within the QWS mineral licenses. The objective of this program is to conduct geological mapping, structural analysis, prospecting and the collection of C horizon till samples to be processed for gold grain analysis.
Initial results from the 2020 field program detailed till survey were reported on August 27, 2020 where the Company had announced it had found a new fertile gold region 45 km south of the current Queensway North drill targets. The newly defined Eastern Pond target is comprised of two areas where recent till results have shown highly anomalous total gold grain counts including a high percentage of pristine gold grains and yielded several sub-crop samples up to 15.0 g/t Au.
One till sample yielded 216 gold grains, 163 (75%) of them classified as pristine. A second cluster of samples yielded up to 155 gold grains with 127 (82%) of these classified as pristine. The pristine morphology of these grains indicates that they have not travelled far from their bedrock source.
To date the Eastern Pond target is defined by sub-crop and till sample results over an approximately 4 km of strike length (see Figures below).
- 11 -
Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
Queensway South Project: Location of the newly defined Eastern Pond Anomaly at Queensway South
- 12 -
Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
Queensway South Project: Eastern Pond anomaly and preliminary till results
Sample ID | Easting | Northing | Total Gold Grains | Pristine Gold Grains | ||||||||||||||
41674 | 629734 | 5382499 | 216 | 163 | ||||||||||||||
41656 | 630332 | 5381175 | 155 | 127 |
Queensway South Project: Eastern Pond target till samples
Field crews were remobilized to the Eastern Pond area in late 2020 to conduct follow up work including prospecting, geological mapping and the collection of additional till samples to further vector the Company’s exploration towards bedrock sources. Follow up work at Eastern Pond in late 2020 resulted in the collection of rock samples, additional tills samples and two trenches were excavated.
- 13 -
Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
NFG’s Current Drill Campaign
The company announced on August 17, 2020 that it had initiated a 100,000m diamond drilling program at its Queensway Gold Project, this program was expanded to 200,000m on January 6, 2021. The drilling program is designed to test multiple exploration targets and zones along the 5 km of the Appleton Fault Zone and 12 km of the JBP Fault Zone.
Drilling to date has focussed along the Appleton Fault zone with seven drilling rigs active at the project as the date of the MD&A. Approximately 46,621m of drilling has been completed in 206 holes targeting the Little-Powerline, Dome, Road, Keats, Knob, 1744 and Lotto zones.
The majority of drilling to date has occurred at three zones along the Appleton Fault; the Keats Zone with 116 drill holes, the Lotto Zone with 24 drill holes and the Knob Zone with 16 drill holes with the balance of 30 drill holes completed at other zones along the Appleton Fault. The Company is also targeting the 1744 and Pocket Pond zone along the JBP Fault zone with 20 holes completed to date.
The Company has reported a number of significant gold assay intervals from the Lotto Zone starting with its first drill hole NFGC-20-17 reporting 16.3/g/t Au over 2.20m, 41.2 g/t Au over 4.75m and a third interval of 25.4 g/t Au over 5.15 m. On January 14, 2021 the Company announced the discovery of a new zone named the “Sunday Zone” proximal to the Lotto zone along the hanging wall of the Appleton Fault zone. The new discovery represents the first known occurrence of gold mineralization along the primary Appleton Fault structure with an intercept in drill hole NFGC- 20-44 grading 18.1g/t Au over 6.5m at a down hole depth of 239m. Additional gold mineralized intercepts were reported on February 23, 2021 and March 23, 2021 highlighted by drill holes NFGC-21-100 reporting 224.7 g/t Au over 2.45m, NFGC-21-109 reporting 51.3 g/t Au over 3.20m and NFGC-21-115 reporting 53.3 g/t Au over 3.10m.
A complete list of drill holes and assay highlights from the Lotto zone are shown below:
- 14 -
Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||||
NFGC-20-17 | 29.80 | 32.0 | 2.20 | 16.3 | Lotto | |||||||||||||||
And | 35.25 | 40.00 | 4.75 | 41.2 | ||||||||||||||||
Including | 35.25 | 36.9 | 1.65 | 108.7 | Lotto | |||||||||||||||
And | 56.95 | 70.75 | 13.8 | 10.1 | ||||||||||||||||
Including | 56.95 | 62.1 | 5.15 | 25.4 | Lotto | |||||||||||||||
Including | 61.0 | 61.8 | 0.8 | 138.3 | ||||||||||||||||
NFGC-20-20 | 100.25 | 103.25 | 3.00 | 5.31 | Lotto | |||||||||||||||
Including | 100.60 | 101.30 | 0.70 | 15.6 | Lotto | |||||||||||||||
NFGC-20-22 | 91.50 | 99.90 | 8.40 | 1.30 | Lotto | |||||||||||||||
NFGC-20-24 | 35.00 | 37.00 | 2.00 | 2.00 | Lotto | |||||||||||||||
And | 42.30 | 45.40 | 3.10 | 1.30 | Lotto | |||||||||||||||
And | 138.10 | 140.30 | 2.20 | 1.20 | Lotto | |||||||||||||||
NFGC-20-27 | 156.00 | 158.10 | 2.10 | 1.70 | Lotto | |||||||||||||||
And | 222.90 | 224.90 | 2.00 | 31.3 | Lotto | |||||||||||||||
NFGC-20-31 | 45.70 | 52.00 | 6.30 | 1.04 | Lotto | |||||||||||||||
NFGC-20-35 | NSV | Lotto | ||||||||||||||||||
NFGC-20-39 | NSV | Lotto | ||||||||||||||||||
NFGC-20-42 | 40.5 | 42.8 | 2.30 | 1.23 | Lotto | |||||||||||||||
And | 108.00 | 112.55 | 4.55 | 1.40 | Lotto | |||||||||||||||
NFGC-20-44 | 70.15 | 72.15 | 2.00 | 2.09 | Lotto | |||||||||||||||
And | 238.55 | 245.05 | 6.50 | 18.1 | Sunday | |||||||||||||||
NFGC-20-47 | 15.25 | 18.00 | 2.75 | 1.43 | Lotto | |||||||||||||||
And | 29.35 | 31.35 | 2.00 | 1.06 | Lotto | |||||||||||||||
And | 34.45 | 37.60 | 3.15 | 2.54 | Lotto | |||||||||||||||
And | 42.00 | 45.10 | 3.10 | 1.14 | Lotto | |||||||||||||||
NFGC-20-50 | 43.65 | 45.75 | 2.10 | 65.3 | Lotto | |||||||||||||||
NFGC-20-100 | 118.0 | 120.45 | 2.45 | 224.7 | Lotto | |||||||||||||||
NFGC-21-109 | 152.70 | 161.50 | 8.80 | 19.3 | Lotto | |||||||||||||||
Including | 154.20 | 157.40 | 3.20 | 51.3 | ||||||||||||||||
NFGC-21-115 | 180.70 | 189.10 | 8.40 | 20.3 | Lotto | |||||||||||||||
Including | 186.00 | 189.10 | 3.10 | 53.3 |
- 15 -
Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
A plan map and coordinate table for Lotto drill holes reported to date are shown below:
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-17 | 302 | -46 | 354 | 658931 | 5428990 | |||||||||||||||
NFGC-20-20 | 300 | -45 | 190 | 658973 | 5428962 | |||||||||||||||
NFGC-20-22 | 300 | -45 | 214 | 658963 | 5428996 | |||||||||||||||
NFGC-20-24 | 300 | -45 | 258 | 658936 | 5428954 | |||||||||||||||
NFGC-20-27 | 300 | -45 | 465 | 658946 | 5428920 | |||||||||||||||
NFGC-20-31 | 300 | -45 | 258 | 658878 | 5428902 | |||||||||||||||
NFGC-20-35 | 300 | -45 | 240 | 658921 | 5428876 | |||||||||||||||
NFGC-20-39 | 300 | -45 | 164 | 658885 | 5429156 | |||||||||||||||
NFGC-20-42 | 300 | -45 | 177 | 658933 | 5429100 | |||||||||||||||
NFGC-20-44 | 300 | -45 | 294 | 658956 | 5429030 | |||||||||||||||
NFGC-20-47 | 300 | -45 | 98 | 658922 | 5428995 | |||||||||||||||
NFGC-20-50 | 300 | -45 | 92 | 658927 | 5428981 | |||||||||||||||
NFGC-21-100 | 300 | -45 | 258 | 658979 | 5428930 | |||||||||||||||
NFGC-21-109 | 300 | -45 | 252 | 659012 | 5428912 | |||||||||||||||
NFGC-21-115 | 300 | -45 | 225 | 659034 | 5428895 |
The orientation of the veining is uncertain and true widths are estimated to be in the 70% to 80% range.
- 16 -
Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
Queensway Project – Plan Map of Current Drilling Program (Lotto/Sunday Zone – March 23, 2021)
- 17 -
Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
Queensway Project – Cross Section of Current Drilling Program (Lotto Zone – March 23, 2021)
Along with drilling at the Lotto Zone the company has focussed its drilling efforts at the Keats zone where a discovery hole in late 2019 (NFGC-19-01) was drilled. To date the company has completed 88 holes at Keats using multiple parallel exploration strategies. Initially the company planned and has conducted 10m step outs both along strike and dip of the discovery hole NFGC-19-01 and in parallel to this drilling, the Company is also conducting a 50m grid drilling program along roughly 950m of strike length and to vertical depths of 500m to test the geology and gold potential of the controlling geological structure, the Keats-Baseline fault.
Initial assay results from five drill holes at the Keats zones were reported in press release dated October 27, 2020, with further assay results reported on November 16, 2020; December 15, 2020; January 11, 2021; February 9, 2021; March 1, 2021; March 9, 2021; March 16, 2021; March 30, 2021; April 5, 2021; April 20, 2021; April 27, 2021; May 4, 2021 and May 21,2021 representing sixty-seven drill holes.
The Keats zone continues to see a steady increase in both strike length and depth with latest step-out results reported on May 21,2021 indicating the down plunge of the high-grade zone has now increased to 425m starting at the bedrock surface as shown in the long section below.
Logging of the core drilled to date along with assay results received so far indicate that the veining and high-grade gold mineralization demonstrates good continuity along strike and down dip.
Gold assay results highlight from the first sixty-seven holes drilled at the Keats Zone are shown in the table below.
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-20-18 | 92.0 | 99.9 | 7.90 | 24.1 | Keats Main | |||||||||||||
Including | 98.9 | 99.9 | 1.00 | 167.6 | ||||||||||||||
NFGC-20-19 | 89.65 | 108.5 | 18.85 | 31.2 | Keats Main | |||||||||||||
Including | 96.0 | 107.25 | 11.25 | 50.7 | ||||||||||||||
Including | 102.0 | 107.25 | 5.25 | 100.6 | ||||||||||||||
And | 151.0 | 152.9 | 1.90 | 4.40 | Keats FW |
- 18 -
Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
NFGC-20-21 | 101.65 | 120.0 | 18.35 | 15.8 | ||||||||||||||
Including | 109.55 | 118.5 | 8.95 | 29.4 | Keats Main | |||||||||||||
NFGC-20-23 | 82.65 | 124.0 | 41.35 | 22.3 | ||||||||||||||
Including | 93.65 | 108.2 | 14.55 | 57.4 | ||||||||||||||
Including | 93.65 | 94.0 | 0.35 | 1120 | Keats Main | |||||||||||||
And | 101.8 | 104.4 | 2.60 | 140.8 | ||||||||||||||
Including | 118.85 | 123.4 | 4.55 | 15.2 | ||||||||||||||
NFGC-20-25 | 80.0 | 85.7 | 5.70 | 1.5 | ||||||||||||||
And | 99.8 | 101.95 | 2.15 | 7.31 | Keats Main | |||||||||||||
Including | 101.65 | 101.95 | 0.30 | 25.8 | ||||||||||||||
NFGC-20-26 | 44.7 | 73.85 | 29.15 | 11.8 | ||||||||||||||
Including | 67.0 | 73.85 | 6.85 | 44.5 | Keats Main | |||||||||||||
Including | 73.5 | 73.85 | 0.35 | 824 | ||||||||||||||
And | 194.4 | 197.6 | 3.20 | 1.09 | ||||||||||||||
And | 219.7 | 222.3 | 2.60 | 2.02 | Keats FW | |||||||||||||
NFGC-20-28 | 88.5 | 93.0 | 4.50 | 1.64 | ||||||||||||||
And | 106.95 | 111.0 | 4.05 | 40.1 | Keats Main | |||||||||||||
Including | 109.4 | 110.4 | 1.00 | 119.8 | ||||||||||||||
NFGC-20-29 | 104.0 | 120.85 | 16.85 | 25.0 | ||||||||||||||
Including | 113.65 | 117.55 | 3.90 | 103.2 | Keats Main | |||||||||||||
NFGC-20-30 | 97.4 | 129.4 | 32.0 | 2.59 | ||||||||||||||
Including | 119.65 | 125.75 | 6.10 | 10.3 | Keats Main | |||||||||||||
Including | 120.25 | 122.25 | 2.00 | 26.1 | ||||||||||||||
NFGC-20-32 | 103.0 | 132.0 | 29.0 | 20.8 | ||||||||||||||
Including | 118.9 | 132.0 | 13.1 | 45.3 | Keats Main | |||||||||||||
Including | 119.9 | 125.35 | 5.45 | 82.7 | ||||||||||||||
NFGC-20-33 | 151.9 | 156.0 | 4.00 | 2.59 | ||||||||||||||
And | 164.4 | 172.2 | 7.80 | 1.78 | Keats Main | |||||||||||||
NFGC-20-34 | 109.4 | 152.6 | 43.2 | 2.39 | ||||||||||||||
Including | 120.1 | 122.45 | 2.35 | 29.3 | Keats Main | |||||||||||||
NFGC-20-36 | 75.4 | 77.4 | 2.00 | 7.22 | ||||||||||||||
And | 88.8 | 107.7 | 18.9 | 3.29 | ||||||||||||||
Including | 96.4 | 105.3 | 8.90 | 5.15 | Keats Main | |||||||||||||
And | 117.7 | 123.8 | 6.10 | 1.11 | ||||||||||||||
NFGC-20-37 | 9.0 | 19.3 | 10.3 | 25.0 | ||||||||||||||
And | 22.7 | 28.6 | 5.9 | 5.18 | ||||||||||||||
And | 32.8 | 40.7 | 7.9 | 2.82 | Keats Main | |||||||||||||
And | 43.8 | 45.8 | 2.0 | 13.2 | ||||||||||||||
And | 151.6 | 153.6 | 2.0 | 1.21 | Keats FW | |||||||||||||
NFGC-20-38 | 90.0 | 94.8 | 4.8 | 0.97 | ||||||||||||||
And | 101.5 | 103.8 | 2.3 | 1.13 | ||||||||||||||
And | 105.8 | 133.2 | 27.4 | 5.64 | Keats Main | |||||||||||||
Including | 105.8 | 111.6 | 5.8 | 19.8 | ||||||||||||||
And | 159.4 | 161.7 | 2.4 | 1.33 | Keats FW |
- 19 -
Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
NFGC-20-40A | 93.4 | 95.7 | 2.3 | 1.91 | ||||||||||||||
And | 107.4 | 114.7 | 7.3 | 19.3 | ||||||||||||||
And | 120.5 | 123.4 | 2.9 | 1.73 | Keats Main | |||||||||||||
And | 129.9 | 132.2 | 2.3 | 5.03 | ||||||||||||||
And | 144.5 | 146.8 | 2.3 | 3.75 | ||||||||||||||
And | 171.9 | 174.0 | 2.1 | 1.09 | Keats FW | |||||||||||||
NFGC-20-41 | 11.7 | 22.1 | 10.4 | 22.5 | ||||||||||||||
Including | 13.0 | 16.7 | 3.70 | 58.9 | ||||||||||||||
And | 32.0 | 35.5 | 3.50 | 1.36 | Keats Main | |||||||||||||
And | 45.0 | 60.9 | 15.9 | 31.4 | ||||||||||||||
Including | 49.3 | 55.6 | 6.30 | 67.7 | ||||||||||||||
NFGC-20-43 | 109.7 | 114.0 | 4.30 | 1.54 | ||||||||||||||
And | 119.8 | 138.0 | 18.2 | 10.0 | ||||||||||||||
Including | 122.3 | 130.0 | 7.70 | 20.7 | Keats Main | |||||||||||||
And | 145.6 | 147.8 | 2.20 | 1.29 | ||||||||||||||
NFGC-20-45 | 22.5 | 25.0 | 2.5 | 2.1 | Keats HW | |||||||||||||
And | 46.6 | 60.4 | 13.8 | 28.4 | ||||||||||||||
And | 68.0 | 71.3 | 3.3 | 20.6 | Keats Main | |||||||||||||
And | 83.3 | 85.3 | 2.0 | 17.1 | ||||||||||||||
NFGC-20-46 | 92.8 | 95.0 | 2.2 | 7.32 | ||||||||||||||
And | 112.7 | 115.6 | 2.9 | 13.7 | ||||||||||||||
Including | 114.0 | 144.5 | 0.5 | 59.8 | Keats Main | |||||||||||||
And | 133.5 | 135.5 | 2.0 | 5.23 | ||||||||||||||
NFGC-20-48 | 129.00 | 132.60 | 3.60 | 6.39 | ||||||||||||||
And | 141.00 | 143.20 | 2.20 | 1.15 | Keats Main | |||||||||||||
And | 164.50 | 167.10 | 2.60 | 1.38 | Keats FW | |||||||||||||
NFGC-20-49 | 175.90 | 180.85 | 4.95 | 5.55 | ||||||||||||||
Including | 177.70 | 178.70 | 1.00 | 21.2 | Keats FW | |||||||||||||
NFGC-20-52 | 107.70 | 109.80 | 2.10 | 136.7 | ||||||||||||||
And | 114.40 | 128.5 | 14.10 | 31.5 | Keats Main | |||||||||||||
And | 132.20 | 137.75 | 5.55 | 13.7 | ||||||||||||||
NFGC-20-53 | 20.6 | 23.4 | 2.8 | 1.07 | ||||||||||||||
And | 32.6 | 35.0 | 2.4 | 2.20 | ||||||||||||||
And | 53.4 | 55.9 | 2.5 | 2.59 | ||||||||||||||
And | 58.6 | 62.0 | 3.4 | 3.24 | Keats Main | |||||||||||||
And | 70.0 | 74.3 | 4.3 | 1.83 | ||||||||||||||
And | 75.8 | 78.1 | 2.3 | 3.64 | ||||||||||||||
And | 90.0 | 92.4 | 2.4 | 4.72 | ||||||||||||||
NFGC-20-54 | 69.5 | 80.5 | 11.0 | 1.98 | ||||||||||||||
Including | 69.5 | 70.5 | 1.0 | 6.68 | ||||||||||||||
And | 85.4 | 94.1 | 8.7 | 2.02 | Keats Main | |||||||||||||
Including | 85.4 | 85.9 | 0.5 | 18.9 | ||||||||||||||
NFGC-20-56 | 25.6 | 57.9 | 32.3 | 6.18 | ||||||||||||||
Including | 25.6 | 31.0 | 5.4 | 15.7 | Keats Main |
- 20 -
Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
And | 62.3 | 68.7 | 6.4 | 3.52 | ||||||||||||||
Including | 66.0 | 68.3 | 2.3 | 6.69 | ||||||||||||||
NFGC-20-57 | 69.70 | 73.45 | 3.75 | 12.88 | Keats Main | |||||||||||||
Including | 71.00 | 73.45 | 2.45 | 19.25 | ||||||||||||||
And | 129.00 | 132.85 | 3.85 | 2.88 | ||||||||||||||
And | 142.10 | 144.45 | 2.35 | 1.79 | Keats FW | |||||||||||||
And | 146.45 | 148.50 | 2.05 | 8.85 | ||||||||||||||
NFGC-20-59 | 38.65 | 43.30 | 4.65 | 131.09 | ||||||||||||||
And | 60.55 | 64.80 | 4.25 | 1.10 | ||||||||||||||
And | 67.55 | 69.60 | 2.05 | 1.00 | Keats Main | |||||||||||||
And | 71.75 | 89.45 | 17.70 | 124.44 | ||||||||||||||
And | 94.80 | 97.55 | 2.75 | 1.68 | ||||||||||||||
NFGC-20-60 | 136.90 | 160.35 | 23.45 | 2.44 | ||||||||||||||
Including | 136.90 | 140.30 | 3.40 | 8.46 | Keats Main | |||||||||||||
NFGC-20-62 | NSR | Keats | ||||||||||||||||
NFGC-20-63 | 15.95 | 18.00 | 2.05 | 1.33 | Keats Main | |||||||||||||
And | 105.00 | 107.00 | 2.00 | 1.59 | ||||||||||||||
And | 214.95 | 217.30 | 2.35 | 3.26 | Keats FW | |||||||||||||
NFGC-20-64 | 93.00 | 95.10 | 2.10 | 1.01 | ||||||||||||||
And | 112.60 | 115.10 | 2.50 | 2.77 | Keats Main | |||||||||||||
NFGC-20-65 | 170.00 | 172.90 | 2.90 | 1.04 | Keats Main | |||||||||||||
NFGC-20-67 | 123.90 | 125.90 | 2.00 | 10.26 | Keats Main | |||||||||||||
NFGC-20-69 | 109.40 | 113.55 | 4.15 | 1.58 | ||||||||||||||
And | 122.20 | 127.85 | 5.65 | 4.21 | ||||||||||||||
Including | 122.20 | 125.15 | 2.95 | 6.16 | Keats Main | |||||||||||||
And | 129.95 | 132.95 | 3.00 | 1.43 | ||||||||||||||
NFGC-20-70 | 56.40 | 67.50 | 11.10 | 1.89 | ||||||||||||||
Including | 61.80 | 62.40 | 0.60 | 12.15 | ||||||||||||||
And | 77.45 | 80.80 | 3.35 | 1.92 | Keats Main | |||||||||||||
And | 92.75 | 95.25 | 2.50 | 3.80 | ||||||||||||||
NFGC-20-72 | 133.50 | 139.80 | 6.30 | 2.89 | ||||||||||||||
Including | 133.50 | 136.80 | 3.30 | 4.48 | Keats Main | |||||||||||||
And | 143.40 | 147.00 | 3.60 | 1.50 | ||||||||||||||
And | 187.20 | 189.45 | 2.25 | 1.31 | Keats FW | |||||||||||||
NFGC-20-73 | 25.80 | 28.00 | 2.20 | 7.28 | ||||||||||||||
Including | 26.55 | 27.00 | 0.45 | 30.1 | Keats Main | |||||||||||||
And | 191.50 | 194.00 | 2.50 | 21.9 | ||||||||||||||
Including | 191.50 | 192.15 | 0.65 | 83.4 | Keats FW | |||||||||||||
And | 292.40 | 293.75 | 1.35 | 2.74 | Keats FW | |||||||||||||
NFGC-20-74 | 44.00 | 46.00 | 2.00 | 32.27 | ||||||||||||||
And | 49.15 | 70.50 | 21.35 | 3.36 | Keats Main | |||||||||||||
And | 81.70 | 85.75 | 4.05 | 45.59 | ||||||||||||||
NFGC-21-78 | 102.00 | 105.70 | 3.70 | 2.43 | ||||||||||||||
And | 113.20 | 115.50 | 2.30 | 18.22 | Keats Main |
- 21 -
Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
NFGC-21-79 | 107.35 | 113.80 | 6.45 | 1.00 | ||||||||||||||
And | 133.75 | 141.65 | 7.90 | 22.7 | Keats Main | |||||||||||||
NFGC-21-80 | 49.45 | 88.50 | 39.05 | 25.8 | ||||||||||||||
Including | 62.70 | 72.80 | 10.10 | 58.5 | ||||||||||||||
And | 78.65 | 88.50 | 9.85 | 39.5 | Keats Main | |||||||||||||
And | 93.15 | 95.45 | 2.30 | 41.6 | ||||||||||||||
NFGC-21-84 | 87.00 | 89.25 | 2.25 | 1.15 | ||||||||||||||
And | 102.40 | 106.50 | 4.10 | 1.31 | Keats Main | |||||||||||||
And | 155.00 | 157.15 | 2.15 | 1.12 | Keats FW | |||||||||||||
NFGC-21-85 | 108.45 | 111.40 | 2.95 | 49.41 | Keats Main | |||||||||||||
NFGC-21-86 | 141.95 | 150.00 | 8.05 | 5.65 | ||||||||||||||
And | 171.90 | 174.25 | 2.35 | 1.09 | Keats Main | |||||||||||||
NFGC-21-87 | 4.70 | 9.35 | 4.65 | 27.77 | ||||||||||||||
And | 20.45 | 30.70 | 10.25 | 2.51 | Keats Main | |||||||||||||
And | 79.00 | 81.00 | 2.00 | 2.03 | ||||||||||||||
NFGC-21-88 | 152.20 | 154.60 | 2.40 | 1.02 | Keats FW | |||||||||||||
NFGC-21-90 | 20.00 | 28.05 | 8.05 | 2.45 | ||||||||||||||
And | 35.35 | 39.20 | 3.85 | 24.5 | Keats Main | |||||||||||||
NFGC-21-97 | 135.00 | 137.65 | 2.65 | 1.31 | Keats HW | |||||||||||||
And | 153.65 | 156.00 | 2.35 | 1.04 | ||||||||||||||
And | 162.65 | 167.00 | 4.35 | 1.21 | Keats Main | |||||||||||||
And | 174.95 | 181.40 | 6.45 | 37.15 | ||||||||||||||
NFGC-21-101 | 180.85 | 189.30 | 8.45 | 17.87 | Keats Main | |||||||||||||
NFGC-21-103 | 192.00 | 206.55 | 14.55 | 2.36 | ||||||||||||||
And | 216.90 | 219.50 | 2.60 | 2.02 | ||||||||||||||
And | 235.15 | 245.40 | 10.25 | 8.89 | Keats Main | |||||||||||||
Including | 236.50 | 240.00 | 3.50 | 19.28 | ||||||||||||||
NFGC-21-104 | 214.5 | 225.9 | 11.4 | 29.1 | ||||||||||||||
And | 254.4 | 255.0 | 0.6 | 7.35 | Keats Main | |||||||||||||
NFGC-21-105B | 179.65 | 190.30 | 10.65 | 1.18 | ||||||||||||||
And | 195.75 | 198.00 | 2.25 | 1.26 | ||||||||||||||
And | 241.25 | 244.05 | 2.80 | 1.68 | Keats Main | |||||||||||||
And | 256.00 | 258.00 | 2.00 | 41.84 | ||||||||||||||
NFGC-21-106 | 218.75 | 227.35 | 8.60 | 3.59 | ||||||||||||||
Including | 220.70 | 223.20 | 2.50 | 9.49 | Keats Main | |||||||||||||
And | 286.40 | 288.80 | 2.40 | 1.24 | Keats FW | |||||||||||||
NFGC-21-111 | 229.00 | 238.20 | 9.20 | 1.48 | ||||||||||||||
And | 278.00 | 280.70 | 2.70 | 1.49 | Keats Main | |||||||||||||
NFGC-21-113 | 47.00 | 49.55 | 2.55 | 12.52 | Keats Main | |||||||||||||
NFGC-21-114 | 212.35 | 216.85 | 4.50 | 8.13 | ||||||||||||||
Including | 212.35 | 214.50 | 2.15 | 15.58 | Keats Main | |||||||||||||
NFGC-21-118 | 211.15 | 224.80 | 13.65 | 61.8 | ||||||||||||||
Including | 212.10 | 213.05 | 0.95 | 565 | Keats Main | |||||||||||||
NFGC-21-119 | 152.50 | 154.50 | 2.00 | 1.05 | Keats Main |
- 22 -
Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
And | 176.20 | 183.15 | 6.95 | 15.57 | ||||||||||||||
And | 218.85 | 221.00 | 2.15 | 1.45 | Keats FW | |||||||||||||
NFGC-21-122 | 8.10 | 10.00 | 1.90 | 24.75 | ||||||||||||||
And | 25.00 | 27.00 | 2.00 | 1.97 | ||||||||||||||
And | 34.70 | 49.60 | 14.90 | 69.15 | Keats Main | |||||||||||||
Including | 34.70 | 43.85 | 9.15 | 106.46 | ||||||||||||||
NFGC-21-123 | 167.60 | 169.60 | 2.00 | 2.46 | ||||||||||||||
And | 260.00 | 262.50 | 2.50 | 8.41 | Keats FW | |||||||||||||
NFGC-21-131 | 9.65 | 11.85 | 2.20 | 1.00 | ||||||||||||||
And | 27.7 | 49.8 | 22.1 | 2.31 | Keats Main | |||||||||||||
Including | 27.70 | 32.65 | 4.95 | 7.75 | ||||||||||||||
NFGC-21-133 | 44.00 | 46.00 | 2.00 | 11.26 | ||||||||||||||
And | 65.75 | 71.00 | 5.25 | 1.79 | Keats Main | |||||||||||||
NFGC-21-137 | 71.50 | 78.70 | 7.20 | 261.33 | ||||||||||||||
And | 87.50 | 92.50 | 5.00 | 4.13 | Keats Main | |||||||||||||
And | 114.00 | 116.00 | 2.00 | 1.56 | ||||||||||||||
And | 135.00 | 137.00 | 2.00 | 3.45 | Keats FW | |||||||||||||
NFGC-21-139 | 47.90 | 50.10 | 2.20 | 1.02 | ||||||||||||||
And | 80.00 | 88.90 | 8.90 | 2.19 | Keats Main | |||||||||||||
Including | 80.00 | 82.45 | 2.45 | 5.30 | ||||||||||||||
And | 153.60 | 155.70 | 2.10 | 2.05 | Keats FW | |||||||||||||
NFGC-21-143 | 239.00 | 246.90 | 7.90 | 6.21 | ||||||||||||||
Including | 239.00 | 241.50 | 2.50 | 16.93 | ||||||||||||||
And | 256.45 | 268.00 | 11.55 | 46.95 | Keats Main | |||||||||||||
Including | 257.45 | 265.90 | 8.45 | 63.71 | ||||||||||||||
And | 281.90 | 288.00 | 6.10 | 1.01 | ||||||||||||||
And | 324.00 | 326.00 | 2.00 | 1.12 | Keats FW | |||||||||||||
NFGC-21-182 | 285.85 | 321.25 | 35.40 | 106.20 | ||||||||||||||
Including | 291.00 | 316.60 | 25.60 | 146.24 | Keats Main | |||||||||||||
And | 345.00 | 361.90 | 16.90 | 1.07 |
Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 60% to 80% of reported intervals. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
- 23 -
Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
A plan map and coordinate table for Keats drill holes press released to date are shown below:
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-18 | 300 | -45 | 278 | 658223 | 5427467 | |||||||||||||||
NFGC-20-19 | 300 | -45 | 154 | 658232 | 5427462 | |||||||||||||||
NFGC-20-21 | 300 | -45 | 190 | 658236 | 5427449 | |||||||||||||||
NFGC-20-23 | 300 | -45 | 185 | 658240 | 5427458 | |||||||||||||||
NFGC-20-26 | 300 | -45 | 269 | 658151 | 5427444 | |||||||||||||||
NFGC-20-25 | 300 | -45 | 147 | 658217 | 5427459 | |||||||||||||||
NFGC-20-28 | 300 | -45 | 150 | 658213 | 5427450 | |||||||||||||||
NFGC-20-29 | 300 | -45 | 186 | 658222 | 5427445 | |||||||||||||||
NFGC-20-30 | 300 | -45 | 167 | 658195 | 5427419 | |||||||||||||||
NFGC-20-32 | 300 | -45 | 269 | 658151 | 5427444 | |||||||||||||||
NFGC-20-33 | 300 | -45 | 297 | 658238 | 5427394 | |||||||||||||||
NFGC-20-34 | 300 | -45 | 213 | 658258 | 5427440 | |||||||||||||||
NFGC-20-36 | 300 | -45 | 150 | 658245 | 5427466 | |||||||||||||||
NFGC-20-37 | 300 | -45 | 344 | 658224 | 5427518 | |||||||||||||||
NFGC-20-38 | 300 | -45 | 176 | 658254 | 5427461 | |||||||||||||||
NFGC-20-40A | 300 | -45 | 204 | 658249 | 5427453 | |||||||||||||||
NFGC-20-41 | 300 | -45 | 195 | 658232 | 5427514 | |||||||||||||||
NFGC-20-43 | 300 | -45 | 182 | 658239 | 5427435 | |||||||||||||||
NFGC-20-45 | 300 | -45 | 164 | 658240 | 5427509 | |||||||||||||||
NFGC-20-46 | 300 | -45 | 169 | 658267 | 5427493 | |||||||||||||||
NFGC-20-48 | 300 | -45 | 198 | 658247 | 5427430 | |||||||||||||||
NFGC-20-49 | 300 | -45 | 234 | 658309 | 5427468 | |||||||||||||||
NFGC-20-52 | 300 | -45 | 192 | 658243 | 5427445 | |||||||||||||||
NFGC-20-53 | 300 | -45 | 188 | 658254 | 5427513 | |||||||||||||||
NFGC-20-54 | 300 | -45 | 198 | 658160 | 5427439 | |||||||||||||||
NFGC-20-56 | 300 | -45 | 118 | 658226 | 5427505 | |||||||||||||||
NFGC-20-57 | 300 | -45 | 150 | 658145 | 5427436 | |||||||||||||||
NFGC-20-59 | 300 | -45 | 159 | 658243 | 5427495 | |||||||||||||||
NFGC-20-60 | 300 | -45 | 200 | 658256 | 5427425 | |||||||||||||||
NFGC-20-62 | 300 | -45 | 218 | 658291 | 5427537 | |||||||||||||||
NFGC-20-63 | 300 | -45 | 346 | 657986 | 5427309 | |||||||||||||||
NFGC-20-64 | 300 | -45 | 150 | 658208 | 5427442 | |||||||||||||||
NFGC-20-65 | 300 | -45 | 266 | 658335 | 5427512 | |||||||||||||||
NFGC-20-67 | 300 | -45 | 189 | 658216 | 5427437 | |||||||||||||||
NFGC-20-69 | 300 | -45 | 187 | 658225 | 5427432 | |||||||||||||||
NFGC-20-70 | 300 | -45 | 192 | 658249 | 5427504 | |||||||||||||||
NFGC-20-72 | 300 | -45 | 189 | 658234 | 5427427 | |||||||||||||||
NFGC-20-73 | 300 | -45 | 297 | 658058 | 5427383 | |||||||||||||||
NFGC-20-74 | 300 | -45 | 238 | 658229 | 5427491 | |||||||||||||||
NFGC-21-78 | 300 | -45 | 168 | 658183 | 5427426 | |||||||||||||||
NFGC-21-79 | 300 | -45 | 192 | 658199 | 5427403 | |||||||||||||||
NFGC-21-80 | 300 | -45 | 200 | 658239 | 5427486 | |||||||||||||||
NFGC-21-84 | 300 | -45 | 170 | 658253 | 5427490 | |||||||||||||||
NFGC-21-85 | 300 | -45 | 157 | 658148 | 5427388 | |||||||||||||||
NFGC-21-86 | 300 | -45 | 231 | 658209 | 5427397 | |||||||||||||||
NFGC-21-87 | 300 | -45 | 125 | 658218 | 5427535 | |||||||||||||||
NFGC-21-88 | 300 | -45 | 256 | 658029 | 5427284 | |||||||||||||||
NFGC-21-90 | 300 | -45 | 182 | 658235 | 5427540 | |||||||||||||||
NFGC-21-97 | 300 | -45 | 225 | 658195 | 5427347 | |||||||||||||||
NFGC-21-101 | 300 | -45 | 221 | 658206 | 5427341 |
- 24 -
Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
NFGC-21-103 | 300 | -45 | 261 | 658227 | 5427328 | |||||||||||||||
NFGC-21-104 | 300 | -45 | 255 | 658208 | 5427295 | |||||||||||||||
NFGC-21-105B | 300 | -45 | 288 | 658232 | 5427340 | |||||||||||||||
NFGC-21-106 | 300 | -45 | 326 | 658221 | 5427289 | |||||||||||||||
NFGC-21-111 | 300 | -45 | 297 | 658242 | 5427276 | |||||||||||||||
NFGC-21-113 | 300 | -45 | 143 | 658210 | 5427497 | |||||||||||||||
NFGC-21-114 | 300 | -45 | 264 | 658249 | 5427316 | |||||||||||||||
NFGC-21-118 | 300 | -45 | 633 | 658189 | 5427285 | |||||||||||||||
NFGC-21-119 | 300 | -45 | 279 | 658185 | 5427331 | |||||||||||||||
NFGC-21-122 | 300 | -45 | 140 | 658240 | 5427523 | |||||||||||||||
NFGC-21-123 | 120 | -45 | 723 | 657821 | 5427519 | |||||||||||||||
NFGC-21-131 | 300 | -45 | 138 | 658175 | 5427487 | |||||||||||||||
NFGC-21-133 | 300 | -45 | 149 | 658166 | 5427465 | |||||||||||||||
NFGC-21-137 | 300 | -45 | 152 | 658185 | 5427454 | |||||||||||||||
NFGC-21-139 | 300 | -45 | 170 | 658139 | 5427423 | |||||||||||||||
NFGC-21-143 | 300 | -45 | 343 | 658192 | 5427240 | |||||||||||||||
NFGC-21-182 | 300 | -48 | 381 | 658181 | 5427196 |
Queensway Project – Plan Map of Drilling Program (Keats Zone – May 21, 2021)
- 25 -
Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
Queensway Project – Long Section of Drilling Program (Keats Zone – May 21, 2021)
QA/QC
True widths of the intercepts reported in this press release have yet to be determined but are estimated to be 60% to 80% of reported core lengths. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cutoff of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30- gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in the MD&A was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101.
- 26 -
Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
NFG’s 2019 Drill Campaign
The 2019 diamond drilling program at the AFZ comprised 586 metres of HQ diameter core in four holes completed between October 28, 2019 and November 17, 2019. Holes NFGC-19-01 and NFGC-19-02 were drilled to target the Keats Zone where historical drilling and trenching suggested gold mineralization was to occur. Holes NFGC-19-03 and NFGC-19-04 were drilled from a single setup at the Dome Showing to further evaluate known gold mineralization. The 2019 drill program was successful in identifying gold mineralization along the AFZ at both the Keats and Dome showings.
Drilling along the JBP Fault Zone in 2019 was comprised of six holes totalling 1,400m between November 17, 2019 and December 14, 2019 targeting the Glass zone and extensions of the H-Pond zone. Holes NFGC-19-05, 07, 08, 09, 10 targeted mineralization along both the Glass and H-Pond corridors while NFGC-19-06 only tested the Glass vein system, drill hole locations are show in the figure and table below:
BHID | UTME (NAD27) | UTMN (NAD27) | ZPT | DIP | BRG | LENGTH (m) | ||||||||||||||||||
NFGC-19-01 | 658148 | 5427245 | 93 | -43.6 | 302.19 | 199 | ||||||||||||||||||
NFGC-19-02 | 658035 | 5427130 | 90 | -43.5 | 299.69 | 270 | ||||||||||||||||||
NFGC-19-03 | 658632 | 5428486 | 85 | -44.7 | 0.39 | 64 | ||||||||||||||||||
NFGC-19-04 | 658632 | 5428486 | 85 | -63.5 | 0.59 | 52 | ||||||||||||||||||
NFGC-19-05 | 664842.5 | 5430309 | 85 | -44.7 | 302.69 | 274 | ||||||||||||||||||
NFGC-19-06 | 664867 | 5430352.5 | 85 | -44.1 | 302.19 | 94.5 | ||||||||||||||||||
NFGC-19-07 | 664891 | 5430400 | 85 | -44.6 | 300.99 | 248 | ||||||||||||||||||
NFGC-19-08 | 664823 | 5430200 | 85 | -44.2 | 299.39 | 262 | ||||||||||||||||||
NFGC-19-09 | 665093 | 5430660 | 85 | -44.2 | 300.89 | 299.6 | ||||||||||||||||||
NFGC-19-10 | 665176 | 5430750 | 85 | -43.7 | 303.99 | 222.2 | ||||||||||||||||||
TOTAL | 1985.3 |
The 2019 diamond drilling program at the AFZ was designed to further evaluate the gold mineralization and quartz veining along the east side of the Appleton Fault Trend specifically at the Keats and the Dome Showings. Drilling along the JBP Fault Zone in 2019 was comprised of six holes totalling 1,400m targeting the Glass zone and extensions of the H-Pond zone. Holes NFGC-19-05, 07, 08, 09, 10 targeted mineralization along both the Glass and H-Pond corridors while NFGC-19-06 only tested the Glass vein system.
NFGC-19-01 was planned to target 50 m vertically below historic drill hole LG08-48 at the Keats Zone. A significant gold mineralized zone was intercepted from 96 to 115 m grading 92.86g/t Au over 19.0 m including 285.2 g/t Au over 6.0 m containing considerable visible gold and wall rock sulphidation consisting of pyrite and lesser arsenopyrite. Within the quartz vein material traces of arsenopyrite, chalcopyrite and boulangerite were found. The zone was hosted in dark grey shale belonging to the Davidsville group and the quartz zone is spatially associated with a number of fault structures including one gouge zone up to 60cm in width. This is believed to be a second order structure to the Appleton fault and was intersected by all of the historic diamond drilling at the Keats zone but previously undocumented.
The vein intersection is the extension of the zone encountered in drill hole LG08-48 (50m above) and believed to be the extension of surface mineralization found in historical United Carina trench #3.
- 27 -
Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
The quartz vein was notably vuggy and exhibiting textures associated with boiling events in epithermal gold zones. Possibly due to a flashing event within the larger mesothermal Appleton fault zone system.
A second mineralized fault structure was intersected at 177.5m with associated gold mineralization in lesser quartz stockwork from 177.5 to 180.0m depth grading 3.38g/t Au over 2.5m. Both fault zones intersected in the hole are believed to be secondary to the regional Appleton fault zone. Drilling did not continue in order to intersect the primary fault.
NFGC-19-02 also targeted the Keats zone located 160m south of NFGC-19-01 and targeting 50m vertically below historic drill hole LG99-12. This hole also intersected the second order fault structure found in NFGC-19-01 with associated narrower quartz veinlets and wall rock sulphidation (pyrite and arsenopyrite) and visible gold in quartz. The composite grade of the zone was 1.54 g/t Au over 12.0 m with one meter grading 5.45 g/t Au and containing visible gold. Exhibiting a similar width and structural control to NFGC-19-01.
Queensway Project – Plan Map of 2019 Drilling Program at the Keats Zone
NFGC-19-03 targeted the Dome showing main vein where historical drilling had previously intersected high grade gold mineralization. The main vein was intersected at a depth of 20.9 to 22.0 m with a second vein from 24.9 to 25.5 m and gave an overall composite grade of 16.52 g/t Au over 6.1m anchored by 162.5 g/t Au over 0.6 m.
NFGC-19-04 also targeted the Dome showing main vein and from the same setup but drilling at -60 degrees below NFGC-19-03; this hole intersected the main Dome vein from 28.3 to 29.7 m noting visible gold on the margin of the vein. This gave a composite average of 1.14 g/t Au over 8.0 m including one meter grading 4.61 g/t Au.
- 28 -
Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
At the Dome showing visible gold mineralization appears to be primary confined to the margin of the vein. Of particular note was the apparent vuggy nature of the quartz and similarity to the veining intersected at the Keats zone suggestive that the emplacement mechanisms were similar.
NFGC-19-05, 06, 07, 08 were all drilled to target the Glass vein system which was discovered in 2017 and excavated by NFG in 2017 and again in 2018. All four holes were targeted to intersect the Glass vein system at shallow depths (<25m). The Glass vein system is believed to be a parallel vein system to the H-Pond zone approximately 100m to the west and drill holes NFGC-19-05, 07 and 08 were extended to intersect both vein systems.
The Glass vein array was noted in holes NFGC-19-05, 06 and 08 but gave poor gold results and visible mineralization was very limited.
NFGC-19-05 was successfully intersected a broad vein intercept within the H-Pond zone from 231.0 to 242.0m grading 2.35 g/t over 11.0 m including 6.73 g/t Au over 3.0 m as well as a second vein intersection from 268.0 to 269.0m grading 2.75 g/t Au over 1.0 m. This intercept has extended the known mineralized extents of the H-Pond zone by roughly 150 m along strike. The vein system was marked by significant iron-carbonate alteration zone. This is also one of the deepest intersections of the H-Pond zone to date.
NFGC-19-06, 07 and 08 failed to intersect any significant mineralization.
NFGC-19-09, 10 were both drilled along strike of the H-Pond and Glass vein systems along the JBPDZ and drilling in an area with very high gold in till results (1744 zone) and a significant number of visible gold bearing float samples which were interpreted to be derived from the JBPDZ. Both holes were successful in intersecting new vein systems as shown in figures below. The broad quartz intercept in NFGC-19-09 shows a nearly identical alteration and sulphide pattern to the intercept in NFGC-19-05 from the H-Pond zone. The intercept in NFGC-19-09 is believed to be an extension of the H-Pond by roughly 500m along strike. NFGC-19-09 intersected 4.39 g/t Au over 9.0 metres including 17.45 g/t Au over 2.0 metres from the well altered vein set thought to be the extension of the H-Pond zone. An intercept near the top of NFGC-19-10 with unknown correlation to NFGC-19-09 intersected 1.07 g/t Au over 4.0 metres and several lesser zones.
The 2019 drilling campaign was successful in identifying auriferous quartz veined zones of sufficient size, tenor and textural characteristics to warrant additional exploration. Based on the drill results to date, the Appleton Fault Trend has potential to host an Epizonal style Orogenic gold deposit with mineralization styles similar to those of the Fosterville Mine in Australia. The occurrence of vuggy veins with free gold and a blend of antimony mineral species including stibnite and boulangerite suggest a flash boiling event on a near mesothermal orogenic gold system such as seen at Fosterville.
Significant composite gold assay results are shown in the table below; the true widths of the mineralization in the below table is not known but estimated to be from 60-80% of the down hole composite width based on intersection angles and correlation to historical drilling. A total of 1,952 drill core intervals were selected for assay analysis in the 2019 drilling program ranging in width of 0.3 to 1.0 meters, the highlighted results do not include composite intervals below a minimum grade width (g/t Au x m) of 2.0 as these are not deemed significant to the project.
QA/QC
True widths of the new exploration intercepts reported have yet to be determined, but are estimated to be 70% to 80% of reported core lengths or as otherwise stated. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cutoff of 1.0 g/t Au. All HQ split core assays reported were obtained by either whole sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia or by entire sample screened metallic screen fire assay at Eastern Analytical in Spring dale Newfoundland. The whole sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au.
- 29 -
Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by us as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
2019 Diamond Drill Hole Significant Gold Composite Intercepts
Hole ID | From | To | Length(m) | Au (g/t) | Zone | |||||
NFGC-19-01 | 83.0 | 83.7 | 0.7 | 2.46 | Keats | |||||
NFGC-19-01 | 95.0 | 115.5 | 20.5 | 86.17 | ||||||
incl | 96.0 | 115.0 | 19.0 | 92.86 | Keats | |||||
incl | 105.0 | 111.0 | 6.0 | 285.20 | ||||||
NFGC-19-01 | 117.5 | 118.5 | 1.0 | 1.56 | Keats | |||||
NFGC-19-01 | 146.5 | 147.5 | 1.0 | 1.30 | Keats | |||||
NFGC-19-01 | 177.5 | 180.0 | 2.5 | 3.38 | Keats | |||||
NFGC-19-02 | 142.0 | 154.0 | 12.0 | 1.54 | Keats | |||||
incl | 142.0 | 143.0 | 1.0 | 5.45 | ||||||
NFGC-19-02 | 253.0 | 254.0 | 1.0 | 1.07 | Keats | |||||
NFGC-19-03 | 20.4 | 26.5 | 6.1 | 16.52 | Dome | |||||
incl | 20.9 | 21.5 | 0.6 | 162.50 | ||||||
NFGC-19-04 | 26.0 | 34.0 | 8.0 | 1.14 | Dome | |||||
incl | 29.0 | 30.0 | 1.0 | 4.61 | ||||||
NFGC-19-05 | 231.0 | 242.0 | 11.0 | 2.35 | H-Pond | |||||
incl | 231.0 | 234.0 | 3.0 | 6.73 | ||||||
NFGC-19-05 | 268.0 | 269.0 | 1.0 | 2.75 | H-Pond | |||||
NFGC-19-06 | NSV | |||||||||
NFGC-19-07 | NSV | |||||||||
NFGC-19-08 | NSV | |||||||||
NFGC-19-09 | 15.5 | 16.5 | 1.0 | 1.65 | H-Pond | |||||
NFGC-19-09 | 120.0 | 122.0 | 2.0 | 1.13 | H-Pond | |||||
NFGC-19-09 | 162.0 | 171.0 | 9.0 | 4.39 | H-Pond | |||||
incl | 165.0 | 167.0 | 2.0 | 17.45 | H-Pond | |||||
NFGC-19-10 | 22.0 | 26.0 | 4.0 | 1.07 | H-Pond | |||||
NFGC-19-10 | 66.0 | 68.0 | 2.0 | 1.59 | H-Pond | |||||
NFGC-19-10 | 180.0 | 185.0 | 5.0 | 0.62 | H-Pond |
2020 Airborne Gravity Survey
In March of 2020, NFG contracted CGG Canada Services Ltd. based in Ottawa, Ontario to conduct a 1,705 km HeliFALCON Airborne Gravity Gradiometer and Aeromagnetic Survey over the licenses in the QWN license group. This highly advanced gravity and magnetic system has been deployed by the Company to further aid in the definition of geological and structural controls of mineralization.
- 30 -
Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
After post processing the final data files were received in late April 2020. This data is currently under interpretation by a contract geophysicist to better define structures, geology and potential mineral target areas.
Queensway Project – Vertical Gravity GD Plan View
Queensway Project – Vertical Gravity Gradient GDD Plan View
- 31 -
Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
Lucky Strike Project, Ontario
The Lucky Strike Project is located 10 km north of Larder Lake, Ontario and covers favourable and underexplored structural corridors associated with the Larder Cadillac Deformation Zone.
The project is comprised of 639 single cell un-patented mining claims.
Land History
The current mineral cells comprising the Lucky Strike Project were acquired from the completion of two option agreements, one purchase agreement and online staking.
On May 27th, 2016 the Company optioned the primary Lucky Strike Project property from Ashley Gold Mines Ltd. which was further amended in May 2019 and fully executed in November 2019. Under the terms of the agreement the Company paid $115,000 and issued common shares equivalent to $80,000. The option agreement included an underlying royalty payable to Wallbridge mining covers some of the claims with most of the claims carrying no NSR.
On July 26th, 2017 the Company optioned the Vallillee extension claims west of the primary Lucky Strike land package and this option agreement was fully executed October 2018. Under the terms of the agreement the Company paid $40,000 and issued a 2% NSR in favour of the optionors.
In April 2020, the Company staked an additional 70 unpatented mining cells on the west side of the Lucky Strike Project. These lands carry no NSR.
On May 7th, 2020, the Company completed a claim purchase agreement with Big Bar Gold to purchase 21 unpatented mining claim cells adjacent to the east of the Lucky Strike Project. Under the terms of the agreement the Company paid $25,000. The claims carry no NSR.
Lucky Strike Project – Project Location map, fault systems and Adjacent Projects
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Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
Environmental and Exploration Permitting
The Company was issued an exploration plan by the Ontario MNDM on July 13, 2017, to cover exploration activities including mechanized trenching and mechanized diamond drilling and this permit is set to expire in July 2020. Application was made in May 2020 for new permits to cover mechanized trenching, mechanized diamond drilling and approval is pending.
Project Geology
The Lucky Strike Project is covered by the Lower Blake River Group which are dominated by intermediate to mafic, massive volcanic flows. The volcanic flows have been intruded by diorite-gabbro intrusions which are up to 7 kilometres by 1.5 kilometre in size. In the Walsh-FP area a syenite-syenite porphyry intrudes the mafic-intermediate volcanics and hosts the gold-bearing quartz-ankerite veins of the Walsh Mine. The long axis of this syenite intrusion strikes approximately north-south and extends for 3.5 kilometres on the property and another 3 kilometres south of the property and is generally 0.5 kilometres wide. Two major regional faults cross the property, the Misema-Misty Lake Fault and the Mulven Fault, striking roughly in a northeast-southwest direction. These structures have been speculated as being as a continuation of the Kirkland Main Break Fault system which hosted the seven historic gold mines of the Kirkland Lake Gold camp. The Victoria Creek Deformation Zone, possibly a splay off the Misema-Misty Lake Fault and a control on the Victoria Creek and Upper Beaver Mines, lies just south of the property with splay structures extending onto the property.
The schedules below summarize the carrying costs of acquisition and exploration costs incurred to date for each exploration and evaluation asset that the Company is continuing to explore as at March 31, 2021 and December 31, 2020:
Newfoundland | ||||||||||||||||
Queensway | Other | Ontario | Total | |||||||||||||
Three months ended March 31, 2021 | $ | $ | $ | $ | ||||||||||||
Exploration and evaluation assets | ||||||||||||||||
Balance as at December 31, 2020 and March 31, 2021 | 685,930 | 13,100 | 300,204 | 999,234 | ||||||||||||
Exploration and evaluation expenditures | ||||||||||||||||
Cumulative exploration expense - December 31, 2020 | 10,245,545 | 45,851 | 1,286,951 | 11,578,347 | ||||||||||||
Assays | 1,171,023 | - | 6,796 | 1,177,819 | ||||||||||||
Drilling | 3,115,705 | - | - | 3,115,705 | ||||||||||||
Geophysics | 832,416 | - | - | 832,416 | ||||||||||||
Office & general | 114,746 | - | - | 114,746 | ||||||||||||
Technical reports | - | - | 22,479 | 22,479 | ||||||||||||
Property taxes, mining leases and rent | 19,002 | - | - | 19,002 | ||||||||||||
Reclamation | 87,935 | - | - | 87,935 | ||||||||||||
Salaries & consulting | 970,650 | 6,520 | 2,900 | 980,070 | ||||||||||||
Supplies & equipment | 655,763 | - | 7,278 | 663,041 | ||||||||||||
Travel & accommodations | 58,952 | - | 45 | 58,997 | ||||||||||||
Exploration cost recovery | (76,500 | ) | - | - | (76,500 | ) | ||||||||||
6,949,692 | 6,520 | 39,498 | 6,995,710 | |||||||||||||
Cumulative exploration expense – March 31, 2021 | 17,195,237 | 52,371 | 1,326,449 | 18,574,057 |
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Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
Newfoundland | ||||||||||||||||
Queensway | Other | Ontario | Total | |||||||||||||
Three months ended March 31, 2020 | $ | $ | $ | $ | ||||||||||||
Exploration and evaluation assets | ||||||||||||||||
Balance as at December 31, 2019 and March 31. 2020 | 658,700 | 16,500 | 425,516 | 1,100,716 | ||||||||||||
Exploration and evaluation expenditures | ||||||||||||||||
Cumulative exploration expense - December 31, 2019 | 2,633,775 | - | 837,133 | 3,470,908 | ||||||||||||
Assays | 87,215 | - | 211 | 87,426 | ||||||||||||
Geophysics | 552,008 | - | - | 552,008 | ||||||||||||
Office & general | 546 | - | - | 546 | ||||||||||||
Property taxes, mining leases and rent | 12,520 | - | - | 12,520 | ||||||||||||
Salaries & consulting | 59,415 | - | 7,500 | 66,915 | ||||||||||||
Supplies & equipment | 24,609 | - | - | 24,609 | ||||||||||||
Travel & accommodations | 17,595 | - | - | 17,595 | ||||||||||||
Exploration cost recovery | (30,266 | ) | - | - | (30,266 | ) | ||||||||||
723,642 | - | 7,711 | 731,353 | |||||||||||||
Cumulative exploration expense – March 31, 2020 | 3,357,417 | - | 844,844 | 4,202,261 |
Overall Performance and Results of Operations
Total assets decreased to $70,137,442 at March 31, 2021, from $73,536,928 at December 31, 2020, primarily as a result of a decrease in cash of $6,323,119, partially offset by an increase in investments of $1,670,568, prepaid expenses and deposits of $674,411, and property and equipment of $490,095. The most significant assets at March 31, 2021 were cash of $41,408,006 (December 31, 2020: $47,731,125), investments of $22,760,565 (December 31, 2020: $21,089,997), prepaid expenses and deposits of $1,932,614 (December 31, 2020: $1,258,203), property and equipment of $1,867,224 (December 31, 2020: $1,377,129), and exploration and evaluation assets of $999,234 (December 31, 2020: $999,234). Cash decreased by $6,323,119 during the three months ended March 31, 2021 as a result of cash used in operating activities of $7,172,262 and purchases of property and equipment of $563,556, partially offset by proceeds received from disposals of investments of $973,360, proceeds received from warrants exercised of $381,539, and proceeds received from stock options exercised of $81,050.
Three months ended March 31, 2021 and 2020
During the three months ended March 31, 2021, loss from operating activities increased by $6,852,718 to $8,259,328 compared to $1,406,610 for the three months ended March 31, 2020. The increase in loss from operating activities is largely due to:
- | An increase of $6,264,357 in exploration and evaluation expenditures. Exploration and evaluation expenditures were $6,995,710 for the three months ended March 31, 2021 compared to $731,353 for the three months ended March 31, 2020. The Company continued its 200,000 meter diamond drilling program during the three months ended March 31, 2021 and completed approximately 16,811 meters of drilling in 71 holes, and incurred higher salaries and consulting fees, and supplies & equipment costs due to an increase in exploration activity at its Queensway Project compared to completing a 1,705 km airborne gravity survey at its Queensway project during the three months ended March 31, 2020. |
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Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
- | An increase of $273,676 in corporate development and investor relations. Corporate development and investor relations was $273,676 for the three months ended March 31, 2021 compared to $Nil for the three months ended March 31, 2020. The Company undertook a greater amount of activities relating to promotion of the Company’s projects during the three months ended March 31, 2021 compared to no similar activities undertaken during the three months ended March 31, 2020. |
Other items
For the three months ended March 31, 2021, other income was $2,867,984 compared to other expenses of $5,202,669 for the three months ended March 31, 2020. The $8,070,653 change is largely due to:
- | An increase of $7,643,239 in net change in unrealized gains on investments. Net change in unrealized gains on investments was $2,439,698 for the three months ended March 31, 2021 compared to $5,203,541 in unrealized losses on investments for the three months ended March 31, 2020. The increase is due to changes in the fair values of equity investments held at March 31, 2021. |
- | An increase of $204,230 in net realized gains on disposal of investments. Net realized gains on disposal of investments was $204,230 for the three months ended March 31, 2021 compared to $Nil for the three months ended March 31, 2020. |
- | An increase of $185,431 in settlement of flow-through share premium. Settlement of flow-through share premium was $185,431 for the three months ended March 31, 2021 compared to $Nil for the three months ended March 31, 2020. The Company incurred $674,255 of qualifying Canadian exploration expenses and derecognized $185,431 of its flow-through share premium liability during the three months ended March 31, 2021. |
The Company recorded loss and comprehensive loss of $5,391,344 or $0.04 basic and diluted loss per share for the three months ended March 31, 2021 (three months ended March 31, 2020: $6,609,279 or $0.08 basic and diluted loss per share).
Summary of Quarterly Results
2021 | 2020 | 2019 | ||||||||||||||||||||||||||||||
Mar. 31 | Dec. 31 | Sep. 30 | Jun. 30 | Mar. 31 | Dec. 31 | Sep. 30 | Jun. 30 | |||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Revenues | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Income (loss) and comprehensive income (loss) for the period | (5,391,344 | )(2) | (25,639,722 | )(3) | (10,986,378 | )(4) | 10,700,940 | (5) | (6,609,279 | )(6) | (3,082,583 | )(7) | (85,022 | )(8) | (355,709 | ) | ||||||||||||||||
Earnings (loss) per Common Share Basic(1) | (0.04 | ) | (0.18 | ) | (0.09 | ) | 0.11 | (0.08 | ) | (0.05 | ) | (0.00 | ) | (0.01 | ) | |||||||||||||||||
Earnings (loss) per Common Share Diluted(1) | (0.04 | ) | (0.18 | ) | (0.09 | ) | 0.09 | (0.08 | ) | (0.05 | ) | (0.00 | ) | (0.01 | ) |
(1) | Per share amounts are rounded to the nearest cent, therefore aggregating quarterly amounts may not reconcile to year-to- date per share amounts. |
(2) | Decrease of loss and comprehensive loss from prior quarter primarily driven by a decrease in share-based compensation of $17,939,621, gain on sale of exploration and evaluation assets of $4,384,953, amortization of flow-through premium liability of $999,659, an increase in net change in unrealized gains on investments of $9,826,547 and net realized gains on disposals of investments of $204,230, partially offset by an increase in exploration and evaluation expenditures of $2,443,514. |
(3) | Increase of loss and comprehensive loss from prior quarter primarily driven by an increase in share-based compensation of $12,454,708, net change in unrealized losses on investments of $4,854,539, and exploration and evaluation expenditures of $2,298,723, partially offset by an increase in gain on sale of exploration and evaluation assets of $4,384,953, amortization of flow-through premium liability of $699,109, and a decrease of salaries and consulting fees of $217,685. |
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Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
(4) | Increase of loss and comprehensive loss from prior quarter primarily driven by an increase in net change in unrealized losses on investments of $17,431,256, share-based compensation of $2,452,112, exploration and evaluation expenditures of $1,683,057, salaries and consulting fees of $372,083, and corporate development and investor relations of $159,108, partially offset by amortization of flow-through premium liability of $384,864. |
(5) | Decrease from prior quarter primarily driven by an increase in net change in unrealized gains on investments of $20,102,487, amortization of flow-through premium liability of $101,117, and a decrease in exploration and evaluation expenditures of $160,937, partially offset by an increase in share-based compensation of $3,032,801. |
(6) | Increase from prior quarter primarily driven by increases in professional fees of $104,545, exploration and evaluation expenditures of $354,254 and net change in unrealized losses on investments of $5,279,853, partially offset by a decrease in share-based compensation of $2,130,528. |
(7) | Increase from prior quarter primarily driven by increases in salaries and consulting fees of $407,399, share-based compensation of $2,130,528, professional fees of $71,652, exploration and evaluation expenditures of $390,984 and impairment of exploration and evaluation assets of $46,335 partially offset by an increase in net change in unrealized gain on investments of $74,854. |
(8) | Decrease from prior quarter primarily driven by decrease in salaries and consulting fees of $142,500, exploration and evaluation expenditures of $68,678 and impairment of exploration and evaluation assets of $45,000. |
Liquidity and Capital Resources
As at March 31, 2021, the Company had cash of $41,408,006 to settle current liabilities of $2,164,352.
The Company does not currently have a recurring source of revenue and has historically incurred negative cash flows from operating activities. As at March 31, 2021, the Company has working capital of $65,106,632 consisting primarily of cash, investments, prepaid expenses and deposits and sales taxes recoverable. The Company’s exploration and evaluation assets presently have no proven or probable reserves, and on the basis of information to date, it has not yet determined whether these properties contain economically recoverable resources.
The recoverability of amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production.
The sources of funds currently available to the Company for its acquisition and exploration projects are solely due from equity financing.
The Company does not have bank debt or banking credit facilities in place as at the date of this report.
Investments
In April 2021, the Company participated in a non-brokered private placement in Labrador Gold Corp. consisting of 7,000,000 units at a price of $0.55 per unit for a gross investment of $3,850,000. Each unit consists of one common share and one-half common share purchase warrant. Each whole warrant entitles the Company to acquire one common share at an exercise price of $0.75 for two years from the date of issue.
In May 2021, the Company participated in a non-brokered private placement in Exploits Discovery Corp. consisting of 6,666,667 units at a price of $0.60 per unit for a gross investment of $4,000,000. Each unit consists of one common share and one common share purchase warrant. Each whole warrant entitles the Company to acquire one common share at an exercise price of $0.70 for two years from the date of issue.
In May 2021, the Company participated in a non-brokered private placement in Labrador Gold Corp. consisting of 5,555,556 units at a price of $0.90 per unit for a gross investment of $5,000,000. Each unit consists of one common share and one-half common share purchase warrant. Each whole warrant entitles the Company to acquire one common share at an exercise price of $1.05 for two years from the date of issue.
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Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
April 2021 Financing – Net Proceeds of $14,474,276
On April 8, 2021, the Company completed a non-brokered private placement financing of 2,857,000 flow-through common shares at a price of $5.25 per common share for gross proceeds of $14,999,250. Finders’ fees paid were $524,974 in cash. The premium received on the flow-through shares issued was determined to be $1,971,330.
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | March 31, 2021 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Queensway Project work program | 14,999,250 | - | (14,999,250 | ) | ||||||||
Total Uses | 14,999,250 | - | (14,999,250 | ) |
Prior Financings
August 2020 Initial Public Offering – Net Proceeds of $28,488,581
On August 11, 2020, the Company completed an initial public offering of 21,000,000 common shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 14, 2020, its agents exercised their overallotment option in full to offer and sell an additional 3,150,000 common shares for gross proceeds of $4,095,000. The Company paid share issuance costs of $2,906,419 in cash and issued 1,379,768 agents’ warrants with a fair value of $771,769. The agents’ warrants are exercisable into common shares of the Company at $1.30 for 12 months from the date of issue in connection with the initial public offering.
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | March 31, 2021 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Queensway Project work program | 21,735,000 | 6,159,236 | (15,575,764 | ) | ||||||||
General and administrative expenses | 4,505,000 | 422,882 | (4,082,118 | ) | ||||||||
Working Capital to fund ongoing operations | 5,155,000 | - | (5,155,000 | ) | ||||||||
Total Uses | 31,395,000 | 6,582,118 | (24,812,882 | ) |
June 2020 Financings – Net Proceeds of $6,992,009
On June 4, 2020, the Company completed a non-brokered private placement financing of 3,994,597 flow-through common shares at a price of $1.50 per common share for gross proceeds of $5,991,896. Finders’ fees paid were $69,394 in cash and the issuance of 64,282 warrants exercisable into common shares of the Company at $1.50 per share for two years from date of issue with a fair value of $25,912. The premium received on the flow-through shares issued was determined to be $1,690,704.
On June 10, 2020, the Company completed a non-brokered private placement financing of 866,385 flow-through common shares at a price of $1.30 per common share for gross proceeds of $1,126,300. Finders’ fees paid were $56,793 in cash and the issuance of 43,582 warrants exercisable into common shares of the Company at $1.30 per share for two years from the date of issue with a fair value of $16,271. The premium received on the flow-through shares issued was determined to be $259,915.
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Management’s Discussion and Analysis |
For the three months ended March 31, 2021 and 2020 |
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | March 31, 2021 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Queensway Project work program | 7,118,196 | 7,118,196 | - | |||||||||
Total Uses | 7,118,196 | 7,118,196 | - |
The Company used $674,255 of the proceeds for qualifying Canadian exploration expenses at its Queensway project during the three months ended March 31, 2021.
Outstanding Share Data
During the three months ended March 31, 2021, 115,000 stock options were exercised at a weighted average price of $0.70 per share for gross proceeds of $81,050.
During the three months ended March 31, 2021, 291,830 warrants were exercised at a weighted average price of $1.31 for gross proceeds of $381,539.
Subsequent to March 31, 2021, the Company completed a non-brokered private placement of 2,857,000 flow-through common shares at a price of $5.25 per common share for gross proceeds of $14,999,250. The Company paid finder’s fees of $524,974 in cash.
Subsequent to March 31, 2021, 389,500 stock options were exercised at a weighted average exercise price of $0.94 for gross proceeds of $365,090.
Subsequent to March 31, 2021, 1,369,000 stock options were granted at an exercise price of $6.79 and an expiry date of April 29, 2026.
Subsequent to March 31, 2021, 200,000 stock options, that are subject to shareholder approval, were granted at an exercise price of $8.62 and an expiry date of May 17, 2026.
Subsequent to March 31, 2021, 11,911 warrants were exercised at a weighted average exercise price of $1.48 for gross proceeds of $17,636
As at March 31, 2021, there were 149,091,353 common shares issued and outstanding. As at the date of this report, there were 152,349,764 common shares issued and outstanding.
As at March 31, 2021, there were 14,067,500 stock options and 641,510 warrants outstanding. As at the date of this report, there were 15,247,000 stock options and 629,599 warrants outstanding.
Related Party Transactions
All transactions with related parties have occurred in the normal course of operations and on terms and conditions that are similar to those of transactions with unrelated parties and are measured at the amount of consideration paid or received. A summary of the Company’s related party transactions with corporations having similar directors and officers, being Goldspot Discoveries Inc. and Mexican Gold Mining Corp., is as follows:
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Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
Three months ended March 31, | ||||||||
2021 | 2020 | |||||||
$ | $ | |||||||
Amounts paid to Goldspot Discoveries Inc. (i) for administration, exploration and evaluation | (99,340 | ) | (4,500 | ) | ||||
Amounts paid to Mexican Gold Mining Corp. (ii) for legal fees | - | (127,234 | ) | |||||
Options exercised by members of key management | 50,000 | - |
(i) | Goldspot Discoveries Inc. is a related entity having the following common director and officer to the Company: Denis Laviolette, Director and President. |
(ii) | Mexican Gold Mining Corp. is a related entity having the following common director and officer to the Company: John Anderson, Director, Michael Kanevsky, Chief Financial Officer. On January 26, 2020 the Company entered into a binding letter agreement with Mexican Gold Mining Corp. (“MGMC”) to have all of the issued and outstanding shares of the Company acquired by MGMC. On February 19, 2020, the Company announced that the binding letter agreement was mutually terminated. |
As at March 31, 2021, $112,254 is included in accounts payable and accrued liabilities for the amounts owed to GoldSpot Discoveries Inc. (December 31, 2020 - $Nil owed to related corporations).
There are no ongoing contractual commitments resulting from these transactions with related parties.
Key Management Personnel Compensation
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers.
Three months | Three months | |||||||||||||||
Salaries and | ended March | Salaries and | ended March | |||||||||||||
Consulting | 31, 2021 | Consulting | 31, 2020 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Executive Chairman | 75,000 | 75,000 | 44,070 | 44,070 | ||||||||||||
Chief Executive Officer | 75,000 | 75,000 | 275,000 | 275,000 | ||||||||||||
President | 52,500 | 52,500 | 37,500 | 37,500 | ||||||||||||
Chief Financial Officer | 13,500 | 13,500 | 30,000 | 30,000 | ||||||||||||
Chief Operating Officer | 48,750 | 48,750 | 32,500 | 32,500 | ||||||||||||
Non-executive directors | 12,000 | 12,000 | - | - | ||||||||||||
Total | 276,750 | 276,750 | 419,070 | 419,070 |
Under the terms of their management agreements, certain officers of the Company are entitled to 18 months of base pay in the event of their agreements being terminated without cause.
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Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
Risks and Uncertainties
The risks and uncertainties described in this section are considered by management to be the most important in the context of the Company's business. The risks and uncertainties below are not inclusive of all the risks and uncertainties the Company may be subject to and other risks may exist. The Company is in the business of acquiring, exploring and evaluating gold properties. It is exposed to a number of risks and uncertainties that are common to other gold mining companies. The industry is capital intensive at all stages and is subject to variations in commodity prices, market sentiment, inflation and other risks.
Exploration Stage Company
The Company is an exploration stage company and cannot give any assurance that a commercially viable deposit, or “reserve,” exists on any properties for which the Company currently has or may have (through potential future joint venture agreements or acquisitions) an interest. Determination of the existence of a reserve depends on appropriate and sufficient exploration work and the evaluation of legal, economic, and environmental factors. If the Company fails to find a commercially viable deposit on any of its properties, its financial condition and results of operations will be materially adversely affected.
No Mineral Resources
Currently, there are no mineral resources (within the meaning of NI 43-101) on any of the properties in which the Company has an interest and the Company cannot give any assurance that any mineral resources will be identified. If the Company fails to identify any mineral resources on any of its properties, its financial condition and results of operations will be materially adversely affected.
No Mineral Reserves
Currently, there are no mineral reserves (within the meaning of NI 43-101) on any of the properties in which the Company has an interest and the Company cannot give assurance that any mineral reserves will be identified. If the Company fails to identify any mineral reserves on any of its properties, its financial condition and results of operations will be materially adversely affected.
Reliability of Historical Information
The Company has relied on, and the disclosure in the Queensway Technical Report is based, in part, upon, historical data compiled by previous parties involved with the Queensway Project. To the extent that any of such historical data is inaccurate or incomplete, the Company’s exploration plans may be adversely affected.
Mineral Exploration and Development
Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection, the combination of which factors may result in the Company not receiving an adequate return of investment capital.
There is no assurance that the Company’s mineral exploration and any development activities will result in any discoveries of commercial bodies of ore. The long-term profitability of the Company’s operations will in part be directly related to the costs and success of its exploration programs, which may be affected by a number of factors. Substantial expenditures are required to establish reserves through drilling and to develop the mining and processing facilities and infrastructure at any site chosen for mining.
Substantial expenditures are required to establish ore reserves through exploration and drilling, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities and grades to justify commercial operations or that funds required for development can be obtained on a timely basis.
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Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
Estimates of reserves, mineral deposits and production costs can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In addition, the grade of ore ultimately mined may differ from that indicated by drilling results. Short term factors relating to reserves, such as the need for orderly development of ore bodies or the processing of new or different grades, may also have an adverse effect on mining operations and on the results of operations. Material changes in ore reserves, grades, stripping ratios or recovery rates may affect the economic viability of any project.
Competition and Mineral Exploration
The mineral exploration industry is intensely competitive in all of its phases and the Company must compete in all aspects of its operations with a substantial number of large established mining companies with greater liquidity, greater access to credit and other financial resources, newer or more efficient equipment, lower cost structures, more effective risk management policies and procedures and/or greater ability than the Company to withstand losses. The Company’s competitors may be able to respond more quickly to new laws or regulations or emerging technologies or devote greater resources to the expansion of their operations, than the Company can. In addition, current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties. Competition could adversely affect the Company’s ability to acquire suitable new mineral properties or prospects for exploration in the future. Competition could also affect the Company’s ability to raise financing to fund the exploration and development of its properties or to hire qualified personnel. The Company may not be able to compete successfully against current and future competitors, and any failure to do so could have a material adverse effect on the Company’s business, financial condition or results of operations.
Additional Funding
The exploration and development of the Company’s mineral properties will require substantial additional capital. When such additional capital is required, the Company will need to pursue various financing transactions or arrangements, including joint venturing of projects, debt financing, equity financing or other means. Additional financing may not be available when needed or, if available, the terms of such financing might not be favorable to the Company and might involve substantial dilution to existing shareholders. The Company may not be successful in locating suitable financing transactions in the time period required or at all. A failure to raise capital when needed would have a material adverse effect on the Company’s business, financial condition and results of operations. Any future issuance of securities to raise required capital will likely be dilutive to existing shareholders. In addition, debt and other debt financing may involve a pledge of assets and may be senior to interests of equity holders. The Company may incur substantial costs in pursuing future capital requirements, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. The ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the gold and copper industries in particular), the Company’s status as a new enterprise with a limited history, the location of the Company’s mineral properties, the price of commodities and/or the loss of key management personnel.
Permits and Government Regulation
The future operations of the Company may require permits from various federal, state, provincial and local governmental authorities and will be governed by laws and regulations governing prospecting, development, mining, production, export, taxes, labour standards, occupational health, waste disposal, land use, environmental protections, mine safety and other matters.
Although Canada has a favorable legal and fiscal regime for exploration and mining, including a relatively simple system for the acquisition of mineral titles and relatively low tax burden, possible future government legislation, policies and controls relating to prospecting, development, production, environmental protection, mining taxes and labour standards could cause additional expense, capital expenditures, restrictions and delays in the activities of the Company, the extent of which cannot be predicted.
Before development and production can commence on any properties, the Company must obtain regulatory and environmental approvals. There is no assurance that such approvals can be obtained on a timely basis or at all. The cost of compliance, with changes in governmental regulations, has the potential to reduce the profitability of operations. The Company is currently in compliance with all material regulations applicable to its exploration activities.
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Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
Limited Operating History
The Company has a limited operating history and its mineral properties are exploration stage properties. As such, the Company will be subject to all of the business risks and uncertainties associated with any new business enterprise, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. The current state of the Company’s mineral properties require significant additional expenditures before any cash flow may be generated. Although the Company possesses an experienced management team, there is no assurance that the Company will be successful in achieving a return on shareholders’ investment and the likelihood of success of the Company must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the establishment of any business. There is no assurance that the Company can generate revenues, operate profitably, or provide a return on investment, or that it will successfully implement its plans.
An investment in the Company’s securities carries a high degree of risk and should be considered speculative by purchasers. There is no assurance that we will be successful in achieving a return on shareholders’ investment and the likelihood of our success must be considered in light of our early stage of operations. You should consider any purchase of the Company’s securities in light of the risks, expenses and problems frequently encountered by all companies in the early stages of their corporate development.
Title Risks
Although the Company has or will receive title opinions for any properties in which it has a material interest, there is no guarantee that title to such properties will not be challenged or impugned. The Company has not conducted surveys on all of the claims in which it holds direct or indirect interests. The Company’s properties may be subject to prior unregistered agreements or transfers or native land claims and title may be affected by unidentified or unknown defects. Title insurance is generally not available for mineral properties and the Company’s ability to ensure that it has obtained secure claims to individual mineral properties or mining concessions may be constrained. A successful challenge to the Company’s title to a property or to the precise area and location of a property could cause delays or stoppages to the Company’s exploration, development or operating activities without reimbursement to the Company. Any such delays or stoppages could have a material adverse effect on the Company’s business, financial condition and results of operations.
Laws and Regulation
The Company’s exploration activities are subject to extensive federal, provincial and local laws and regulations governing prospecting, development, production, exports, taxes, labour standards, occupational health and safety, mine safety and other matters in all the jurisdictions in which it operates. These laws and regulations are subject to change, can become more stringent and compliance can therefore become more costly. The Company applies the expertise of its management, advisors, employees and contractors to ensure compliance with current laws.
Uninsured and Underinsured Risks
The Company faces and will face various risks associated with mining exploration and the management and administration thereof Some of these risks are not insurable; some may be the subject of insurance which is not commercially feasible for the Company. Those insurances which are purchased will have exclusions and deductibles which may eliminate or restrict recovery in the event of loss. In some cases, the amount of insurance purchased may not be adequate in amount or in limit.
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Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
The Company will undertake intermittent assessments of insurable risk to help ensure that the impact of uninsured/underinsured loss is minimized within reason. Risks may vary from time to time within this intermittent period due to changes in such things as operations operating conditions, laws or the climate which may leave the Company exposed to periods of additional uninsured risk. In the event risk is uninsurable, at its reasonable and sole discretion, the Company may endeavor to implement policies and procedures, as may be applicable and/or feasible, to reduce the risk of related loss.
Public Health Crises such as the COVID-19 Pandemic
In December 2019, a novel strain of coronavirus known as COVID-19 surfaced in Wuhan, China and has spread around the world causing significant business and social disruption. COVID-19 was declared a worldwide pandemic by the World Health Organization on March 11, 2020. The speed and extent of the spread of COVID-19 and the duration and intensity of resulting business disruption and related financial and social impact, are uncertain. Such adverse effects related to COVID-19 and other public health crises may be material to the Company. The impact of COVID-19 and efforts to slow the spread of COVID-19 could severely impact the exploration and any development of the Queensway Project and the Company’s other mineral projects. To date, a number of governments have declared states of emergency and have implemented restrictive measures such as travel bans, quarantine and self-isolation. If the exploration and any development of the Queensway Project and other mineral projects is disrupted or suspended as a result of these or other measures, it may have a material adverse impact on the Company’s financial position and results of operations.
COVID-19 and efforts to contain it may have broad impacts on the Company’s supply chain or the global economy, which could have a material adverse effect on the Company’s financial position. While governmental agencies and private sector participants are seeking to mitigate the adverse effects of COVID-19, and the medical community is seeking to develop vaccines and other treatment options, the efficacy and timing of such measures is uncertain.
Global Economy Risk
The volatility of global capital markets, including the general economic slowdown in the mining sector, over the past several years has generally made the raising of capital by equity or debt financing more difficult. The Company may be dependent upon capital markets to raise additional financing in the future. As such, the Company is subject to liquidity risks in meeting its operating expenditure requirements and future development cost requirements in instances where adequate cash positions are unable to be maintained or appropriate financing is unavailable. These factors may impact the ability to raise equity or obtain loans and other credit facilities in the future and on terms favourable to the Company and its management. If these levels of volatility persist or if there is a further economic slowdown, the Company’s operations, the Company’s ability to raise capital could be adversely impacted.
In addition, the current outbreak of COVID-19, and any future emergence and spread of similar pathogens, could have a material adverse impact on global economic conditions, which may adversely impact: the Company’s operations, its ability to raise debt or equity financing for the purposes of mineral exploration and development, and the operations of the Company’s suppliers, contractors and service providers.
Environmental Risks
The Company’s activities are subject to extensive laws and regulations governing environment protection. The Company is also subject to various reclamation related conditions. Although the Company closely follows and believes it is operating in compliance with all applicable environmental regulations, there can be no assurance that all future requirements will be obtainable on reasonable terms. Failure to comply may result in enforcement actions causing operations to cease or be curtailed and may include corrective measures requiring capital expenditures. Intense lobbying over environmental concerns by non-governmental organizations has caused some governments to cancel or restrict development of mining projects. Current publicized concern over climate change may lead to carbon taxes, requirements for carbon offset purchases or new regulation. The costs or likelihood of such potential issues to the Company cannot be estimated at this time.
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Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
The legal framework governing this area is constantly developing, therefore the Company is unable to fully ascertain any future liability that may arise from the implementation of any new laws or regulations, although such laws and regulations are typically strict and may impose severe penalties (financial or otherwise). The proposed activities of the Company, as with any exploration, may have an environmental impact which may result in unbudgeted delays, damage, loss and other costs and obligations including, without limitation, rehabilitation and/or compensation. There is also a risk that the Company’s operations and financial position may be adversely affected by the actions of environmental groups or any other group or person opposed in general to the Company’s activities and, in particular, the proposed exploration and mining by the Company within the Provinces of Newfoundland and Ontario.
Social and Environmental Activism
There is an increasing level of public concern relating to the effects of mining on the nature landscape, in communities and on the environment. Certain non-governmental organizations, public interest groups and reporting organizations (“NGOs”) who oppose resource development can be vocal critics of the mining industry. In addition, there have been many instances in which local community groups have opposed resource extraction activities, which have resulted in disruption and delays to the relevant operation. While the Company seeks to operate in a social responsible manner and believes it has good relationships with local communities in the regions in which it operates, NGOs or local community organizations could direct adverse publicity against and/or disrupt the operations of the Company in respect of one or more of its properties, regardless of its successful compliance with social and environmental best practices, due to political factors, activities of unrelated third parties on lands in which the Company has an interest or the Company’s operations specifically. Any such actions and the resulting media coverage could have an adverse effect on the reputation and financial condition of the Company or its relationships with the communities in which it operations, which could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.
Dependence on Management and Key Personnel
The success of the Company is currently largely dependent on the performance of its directors and officers. The loss of the services of any of these persons could have a materially adverse effect on the Company’s business and prospects. There is no assurance the Company can maintain the services of its directors, officers or other qualified personnel required to operate its business. As the Company’s business activity grows, the Company will require additional key financial, administrative and mining personnel as well as additional operations staff. There can be no assurance that these efforts will be successful in attracting, training and retaining qualified personnel as competition for persons with these skill sets increase. If the Company is not successful in attracting, training and retaining qualified personnel, the efficiency of its operations could be impaired, which could have an adverse impact on the Company’s operations and financial condition. In addition, the COVID-19 pandemic may cause the Company to have inadequate access to an available skilled workforce and qualified personnel, which could have an adverse impact on the Company’s financial performance and financial condition.
First Nations Land Claims
Certain of the Company’s mineral properties may now or in the future be the subject of First Nations land claims. The legal nature of First Nations land claims is a matter of considerable complexity. The impact of any such claim on the Company’s material interest in the Company’s mineral properties and/or potential ownership interest in the Company’s mineral properties in the future, cannot be predicted with any degree of certainty and no assurance can be given that a broad recognition of First Nations rights in the areas in which the Company’s mineral properties are located, by way of negotiated settlements or judicial pronouncements, would not have an adverse effect on the Company’s activities. Even in the absence of such recognition, the Company may at some point be required to negotiate with and seek the approval of holders of First Nations interests in order to facilitate exploration and development work on the Company’s mineral properties, there is no assurance that the Company will be able to establish practical working relationships with the First Nations in the area which would allow it to ultimately develop the Company’s mineral properties.
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Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
Claims and Legal Proceedings
The Company and/or its directors and officers may be subject to a variety of civil or other legal proceedings, with or without merit. From time to time in the ordinary course of its business, the Company may become involved in various legal proceedings, including commercial, employment and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s attention and resources and cause the Company to incur significant expenses. Furthermore, because litigation is inherently unpredictable, the results of any such actions may have a material adverse effect on the Company’s business, operating results or financial condition.
Conflicts of Interest
Most of the Company’s directors and officers do not devote their full time to the affairs of the Company. All of the directors and some of the officers of the Company are also directors, officers and shareholders of other natural resource or public companies, and as a result they may find themselves in a position where their duty to another company conflicts with their duty to the Company. Although the Company has policies which address such potential conflicts and the OBCA has provisions governing directors in the event of such a conflict, none of the Company’s constating documents or any of its other agreements contain any provisions mandating a procedure for addressing such conflicts of interest. There is no assurance that any such conflicts will be resolved in favour of the Company. If any such conflicts are not resolved in favour of the Company, the Company may be adversely affected.
Gold and Metal Prices
If the Company’s mineral properties are developed from exploration properties to full production properties, the majority of our revenue will be derived from the sale of gold. Therefore, the Company’s future profitability will depend upon the world market prices of the gold for which it is exploring. The price of gold and other metals are affected by numerous factors beyond the Company’s control, including levels of supply and demand, global or regional consumptive patterns, sales by government holders, metal stock levels maintained by producers and others, increased production due to new mine developments and improved mining and production methods, speculative activities related to the sale of metals, availability and costs of metal substitutes.
Moreover, gold prices are also affected by macroeconomic factors such as expectations regarding inflation, interest rates and global and regional demand for, and supply of, gold as well as general global economic conditions. These factors may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities. Additionally, the current COVID-19 pandemic and efforts to contain it, including restrictions on travel and other advisories issued may have a significant effect on gold prices.
Negative Cash Flow from Operating Activities
The Company has no history of earnings and had negative cash flow from operating activities since inception. The Company’s mineral properties are in the exploration stage and there are no known mineral resources or reserves and the proposed exploration programs on the Company’s mineral properties are exploratory in nature. Significant capital investment will be required to achieve commercial production from the Company’s existing projects. There is no assurance that any of the Company’s mineral properties will generate earnings, operate profitably or provide a return on investment in the future. Accordingly, the Company will be required to obtain additional financing in order to meet its future cash commitments.
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Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
Going Concern Risk
The Company’s financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. The Company’s future operations are dependent upon the identification and successful completion of equity or debt financings and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that the Company will be successful in completing equity or debt financings or in achieving profitability. The financial statements do not give effect to any adjustments relating to the carrying values and classifications of assets and liabilities that would be necessary should the Company be unable to continue as a going concern.
Risks Associated with Acquisitions
If appropriate opportunities present themselves, the Company may acquire mineral claims, material interests in other mineral claims, and companies that the Company believes are strategic. The Company currently has no understandings, commitments or agreements with respect to any material acquisition, other than as described in this MD&A, and no other material acquisition is currently being pursued. There can be no assurance that the Company will be able to identify, negotiate or finance future acquisitions successfully, or to integrate such acquisitions with its current business. The process of integrating an acquired Company or mineral claims into the Company may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for ongoing development of the Company’s business. Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to goodwill and other intangible assets, which could materially adversely affect the Company’s business, results of operations and financial condition.
Force Majeure
The Company’s projects now or in the future may be adversely affected by risks outside the control of the Company, including the price of gold on world markets, labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods, explosions or other catastrophes, pandemics, epidemics or quarantine restrictions.
Infrastructure
Exploration, development and processing activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important elements of infrastructure, which affect access, capital and operating costs. The lack of availability on acceptable terms or the delay in the availability of any one or more of these items could prevent or delay exploration or development of the Company’s mineral properties. If adequate infrastructure is not available in a timely manner, there can be no assurance that the exploration or development of the Company’s mineral properties will be commenced or completed on a timely basis, if at all. Furthermore, unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of necessary infrastructure could adversely affect our operations.
Exploration operations depend on adequate infrastructure. In particular, reliable power sources, water supply, transportation and surface facilities are necessary to explore and develop mineral projects. Failure to adequately meet these infrastructure requirements or changes in the cost of such requirements could affect the Company’s ability to carry out exploration and future development operations and could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.
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Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
Climate Change Risks
The Company acknowledges climate change as an international and community concern and it supports and endorses various initiatives for voluntary actions consistent with international initiatives on climate change. However, in addition to voluntary actions, governments are moving to introduce climate change legislation and treaties at the international, national, state/provincial and local levels. Where legislation already exists, regulation relating to emission levels and energy efficiency is becoming more stringent. Some of the costs associated with reducing emissions can be offset by increased energy efficiency and technological innovation. However, if the current regulatory trend continues, the Company expects that this could result in increased costs at some of its operations in the future.
The Company and the mining industry are facing continued geotechnical challenges, which could adversely impact the Company’s production and profitability. Unanticipated adverse geotechnical and hydrological conditions, such as landslides, floods, seismic activity, droughts and pit wall failures, may occur in the future and such events may not be detected in advance. Geotechnical instabilities and adverse climatic conditions can be difficult to predict and are often affected by risks and hazards outside of the Company’s control, such as severe weather and considerable rainfall. Geotechnical failures could result in limited or restricted access to mine sites, suspension of operations, government investigations, increased monitoring costs, remediation costs, loss of ore and other impacts, which could cause one or more of the Company’s projects to be less profitable than currently anticipated and could result in a material adverse effect on the Company’s business results of operations and financial position.
Information Systems and Cyber Security
The Company’s operations depend on information technology (“IT”) systems. These IT systems could be subject to network disruptions caused by a variety of sources, including computer viruses, security breaches and cyber-attacks, as well as disruptions resulting from incidents such as cable cuts, damage to physical plants, natural disasters, terrorism, fire, power loss, vandalism and theft. The Company’s operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Company’s reputation and results of operations.
Although to date the Company has not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that the Company will not incur such losses in the future. The Company’s risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. As a result, cyber security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.
Critical Accounting Policies and Estimates
The Company prepares its financial statements in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”).
The preparation of the financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.
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Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
The financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant assumptions about the future and other sources of estimation uncertainty that management has made at year end that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to the following:
(i) Critical accounting estimates
Valuation of Options Granted and Warrants Issued
The fair value of common share purchase options granted and warrants issued is determined at the issue date using the Black-Scholes option pricing model. The Black-Scholes model involves six key inputs to determine the fair value of an option, which are: risk-free interest rate, exercise price, market price at the grant date, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are or could be affected by significant factors that are out of the Company’s control. The Company is also required to estimate the future forfeiture rate of options based on historical information in its calculation of share-based payments expense. These estimates impact the values of stock-based compensation expense, share capital, and reserves.
Computation of Income Taxes
The determination of tax expense for the period and deferred tax assets and liabilities involves significant estimation and judgment by management. In determining these amounts, management interprets tax legislation in a variety of jurisdictions and make estimates of the expected timing of the reversal of deferred tax assets and liabilities. Management also makes estimates of future earnings which affect the extent to which potential future tax benefits may be used.
The Company is subject to assessments by taxation authorities, which may interpret legislation differently. These differences may affect the final amount or the timing of the payment of taxes. We provide for such differences where known based on our best estimate of the probable outcome of these matters.
Shares Issued to Acquire Exploration and Evaluation Assets
From time to time, the Company issues common shares in the course of acquiring exploration and evaluation assets. When shares are issued without cash consideration, the transaction is recognized at the fair value of the assets received. In the event that the fair value of the assets cannot be reliably determined, the Company will recognize the transaction at the fair value of the shares issued. These estimates impact the value of share capital and exploration and evaluation assets.
Valuation of flow-through premium
The determination of the valuation of flow-through premium and warrants in equity units is subject to significant judgment and estimates. The flow-through premium is valued as the estimated premium that investors pay for the flow-through feature, being the portion in excess of the market value of shares without the flow-through feature issued in concurrent private placement financing.
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Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
(ii) Critical accounting judgments
Impairment of Exploration and Evaluation Assets
Management is required to assess impairment in respect to the Company’s intangible mineral property interests. The triggering events are defined in IFRS 6. In making the assessment, management is required to make judgments on the status of each project and the future plans towards finding commercial reserves. The carrying value of each exploration and evaluation asset is reviewed regularly for conditions that may suggest impairment. This review requires significant judgment. Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the property’s value; whether there has been an accumulation of costs significantly in excess of the amounts originally expected for the property’s acquisition, development or cost of holding; and whether exploration activities produced results that are not promising such that no more work is being planned in the foreseeable future. If impairment is determined to exist, a formal estimate of the recoverable amount is performed and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount. Management has determined that there were no indicators of impairment as at March 31, 2021.
Financial Risk Management
The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board approves and monitors the risk management processes.
Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company does not have financial instruments that potentially subject the Company to credit risk. Overall the Company’s credit risk has not changed significantly from the prior year. Sales taxes recoverable are due from the Canada Revenue Agency and the Company places its cash with financial institutions with high credit ratings, therefore in management’s judgment, credit risk is low.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has in place a planning and budgeting process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. The Company has historically relied on issuance of shares to fund exploration programs and may require doing so again in the future. As at March 31, 2021, the Company has total liabilities of $2,164,352 and cash of $41,408,006 which is available to discharge these liabilities (December 31, 2020 – total liabilities of $635,083 and cash of $47,731,125). Accordingly, in management’s judgment, liquidity risk is low.
There have been no changes in management’s methods for managing liquidity risk since December 31, 2020.
Market Risk
Market risk is the risk that changes in market prices, such as commodity prices, interest rates and foreign exchange rates will affect the Company’s net earnings or the value of financial instruments. The objective of the Company is to manage and mitigate market risk exposures within acceptable limits, while maximizing returns.
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Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
Currency Risk
Financial instruments that impact the Company’s net earnings or other comprehensive income due to currency fluctuation include cash accounts denominated in US dollars and investments denominated in Australian dollars. Fluctuations in the exchange rate between the US dollar and the Canadian dollar, and the Australian dollar and the Canadian dollar at March 31, 2021 would not have a material impact on the Company’s net earnings and other comprehensive income.
Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. As the Company deposits its short-term investments into fixed rate guaranteed investment certificates with one year maturities or less, the Company is not exposed to interest rate risk.
Commodity Price risk
Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company’s property has exposure to predominantly gold. Commodity prices, especially gold, greatly affect the value of the Company and the potential value of its property and investments.
Equity Price Risk
Equity price risk is the risk that the fair value of or future cash flows from the Company’s financial instruments will significantly fluctuate because of changes in market prices. The Company is exposed to market risk in trading its investments in unfavorable market conditions which could result in dispositions of investments at less than favorable prices. Additionally, the Company adjusts its investments to fair value at the end of each reporting period. This process could result in write-downs of the Company’s investments over one or more reporting periods, particularly during periods of overall market instability. The sensitivity of the Company’s net income (loss) to changes in market prices at March 31, 2021 would change the Company’s net income (loss) by $2,030,719 as a result of a 10% change in the market price of its investments.
There have been no changes in management’s methods for managing market risks since December 31, 2020.
Capital management
The Company’s objectives when managing capital are:
· | To safeguard our ability to continue as a going concern in order to develop and operate our current projects; |
· | Pursue strategic growth initiatives; and |
· | To maintain a flexible capital structure which lowers the cost of capital. |
In assessing our capital structure, we include in our assessment the components of equity consisting of common shares, stock options and warrants, and deficit that as at March 31, 2021 totalled $67,973,090 (December 31, 2020 - $72,901,845). In order to facilitate the management of capital requirements, the Company prepares annual expenditure budgets and continuously monitors and reviews actual and forecasted cash flows. The annual and updated budgets are monitored and approved by the Board of Directors.
To maintain or adjust the capital structure, the Company may, from time to time, issue new shares, issue new debt, repay debt or dispose of non-core assets. The Company’s current capital resources are sufficient to carry out our exploration plans and support operations through the current operating period.
The Company is not subject to any capital requirements imposed by a regulator.
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Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
There were no changes in the Company’s approach to capital management during the three months ended March 31, 2021.
Cautionary Notes Regarding Forward-Looking Statements
This MD&A contains forward looking statements which reflect management’s expectations regarding the Company’s future growth, results from operations (including, without limitation, statements about the Company’s opportunities, strategies, competition, expected activities and expenditures as the Company pursues its business plan, the adequacy of the Company’s available cash resources and other statements about future events or results), performance (both operational and financial) and business prospects, future business plans and opportunities. Wherever possible, words such as “predicts”, “projects”, “targets”, “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. These forward-looking statements include, among other things, statements relating to; the Queensway Project and the Company’s planned and future exploration on the Queensway Project and its other mineral properties; the Company’s goals regarding exploration and potential development of its projects; the Company’s future business plans; expectations regarding the ability to raise further capital; the market price of gold; expectations regarding any environmental issues that may affect planned or future exploration and development programs and the potential impact of complying with existing and proposed environmental laws and regulations; the ability to retain and/or maintain any require permits, licenses or other necessary approvals for the exploration or development of its mineral properties; government regulation of mineral exploration and development operations in the Provinces of Newfoundland and Labrador and Ontario; the Company’s compensation policy and practices; the Company’s expected reliance on key management personnel, advisors and consultants; effects of the novel COVID- 19 outbreak as a global pandemic.
Forward-looking statements are not a guarantee of future performance and is based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this MD&A including, without limitation, assumptions about: the ability to raise any necessary additional capital on reasonable terms to advance exploration and development of the Company’s mineral properties; future prices of gold and other metal prices; the timing and results of exploration and drilling programs; the demand for, and price of gold; that general business and economic conditions will not change in a material adverse manner; the Company’s ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; the geology of the Queensway Project as described in the Queensway Technical Report; the accuracy of budgeted exploration and development costs and expenditures; future currency exchange rates and interest rates; operating conditions being favourable such that the Company is able to operate in a safe, efficient and effective manner; the Company’s ability to attract and retain skilled personnel; political and regulatory stability; the receipt of governmental, regulatory and third-party approvals, licenses and permits on favourable terms; obtaining required renewals for existing approvals, licenses and permits on favourable terms; requirements under applicable laws; sustained labour stability; stability in financial and capital goods markets; expectations regarding the level of disruption to exploration at the Queensway Project as a result of COVID 19; availability of equipment.
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Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
Furthermore, such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of the Company to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking statements. Such risks include, without limitation: the Company may fail to find a commercially viable deposit at any of its mineral properties; there are no resources or mineral reserves on any of the properties in which the Company has an interest; the Company’s plans may be adversely affected by the Company’s reliance on historical data compiled by previous parties involved with its mineral properties; mineral exploration and development are inherently risky; the mineral exploration industry is intensely competitive; additional financing may not be available to the Company when required or, if available, the terms of such financing may not be favourable to the Company; fluctuations in the demand for gold; the Company may not be able to identify, negotiate or finance any future acquisitions successfully, or to integrate such acquisitions with its current business; the Company’s exploration activities are dependent upon the grant of appropriate licenses, concessions, leases, permits and regulatory consents, which may be withdrawn or not granted; the Company’s operations could be adversely affected by possible future government legislation, policies and controls or by changes in applicable laws and regulations; there is no guarantee that title to the properties in which the Company has a material interest will not be challenged or impugned; the Company faces various risks associated with mining exploration that are not insurable or may be the subject of insurance which is not commercially feasible for the Company; public health crises such as the COVID-19 pandemic may adversely impact the Company’s business; the volatility of global capital markets over the past several years has generally made the raising of capital more difficult; compliance with environmental regulations can be costly; social and environmental activism can negatively impact exploration, development and mining activities; the success of the Company is largely dependent on the performance of its directors and officers; the Company’s operations may be adversely affected by First Nations land claims; the Company and/or its directors and officers may be subject to a variety of legal proceedings, the results of which may have a material adverse effect on the Company’s business; the Company may be adversely affected if potential conflicts of interests involving its directors and officers are not resolved in favour of the Company; the Company’s future profitability may depend upon the world market prices of gold; there is no existing public market for the Company’s securities and an active and liquid one may never develop, which could impact the liquidity of the Company’s securities; dilution from future equity financing could negatively impact holders of the Company’s securities; failure to adequately meet infrastructure requirements could have a material adverse effect on the Company’s business; the Company’s projects now or in the future may be adversely affected by risks outside the control of the Company; the Company is subject to various risks associated with climate change; other factors discussed under “Risk and Uncertainties”.
Although the Company has attempted to identify important factors that could cause actual actions, events, conditions, results, performance or achievements to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events, conditions, results, performance or achievements to differ from those anticipated, estimated or intended.
The Company cautions that the foregoing lists of important assumptions and factors are not exhaustive. Other events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward-looking statements contained herein. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking statements.
Forward-looking statements contained herein are made as of the date of this MD&A and the Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as and to the extent required by applicable securities laws.
Off-Balance Sheet Arrangements
The Company does not utilize off-balance sheet arrangements.
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Management’s Discussion and Analysis
For the three months ended March 31, 2021 and 2020
Proposed Transactions
There are no proposed transactions at the date of this report.
Management’s Report on Internal Control over Financial Reporting
In connection with National Instrument 52-109 Certification of Disclosure in Issuer’s Annual and Interim Filings (“NI 52-109”) adopted in December 2008 by each of the securities commissions across Canada, the Chief Executive Officer and Chief Financial Officer of the Company will file a Venture Issuer Basic Certificate with respect to the financial information contained in the financial statements and respective accompanying Management’s Discussion and Analysis. The Venture Issuer Basic Certification does not include representations relating to the establishment and maintenance of disclosure controls and procedures and internal control over financial reporting, as defined in NI 52-109.
Additional Information
Additional information relating to the Company is available on SEDAR at www.sedar.com.
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Exhibit 99.8
CONDENSED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED
MARCH 31, 2021 AND 2020
(Unaudited - Expressed in Canadian Dollars)
New Found Gold Corp.
Condensed Interim Statements of Financial Position
(Unaudited - Expressed in Canadian Dollars)
March 31, | December 31, | |||||||||||
2021 | 2020 | |||||||||||
Note | $ | $ | ||||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash | 41,408,006 | 47,731,125 | ||||||||||
Investments, at fair value | 5 | 22,760,565 | 21,089,997 | |||||||||
Amounts receivable | 79,337 | 2,837 | ||||||||||
Prepaid expenses and deposits | 6 | 1,932,614 | 1,258,203 | |||||||||
Sales taxes recoverable | 1,057,810 | 1,024,369 | ||||||||||
Rights-of-use assets | 32,652 | 54,034 | ||||||||||
Total current assets | 67,270,984 | 71,160,565 | ||||||||||
Non-current assets | ||||||||||||
Exploration and evaluation assets | 3 | 999,234 | 999,234 | |||||||||
Property and equipment | 4 | 1,867,224 | 1,377,129 | |||||||||
Total non-current assets | 2,866,458 | 2,376,363 | ||||||||||
Total Assets | 70,137,442 | 73,536,928 | ||||||||||
LIABILITIES | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable and accrued liabilities | 9 | 2,132,962 | 396,451 | |||||||||
Flow-through share premium | 7 | - | 185,431 | |||||||||
Lease liabilities | 31,390 | 53,201 | ||||||||||
Total current liabilities | 2,164,352 | 635,083 | ||||||||||
EQUITY | ||||||||||||
Share capital | 8 | 88,352,290 | 87,668,764 | |||||||||
Reserves | 8 | 23,987,725 | 24,208,662 | |||||||||
Deficit | (44,366,925 | ) | (38,975,581 | ) | ||||||||
Total equity | 67,973,090 | 72,901,845 | ||||||||||
Total Equity and Liabilities | 70,137,442 | 73,536,928 |
NATURE OF OPERATIONS (Note 1)
COMMITMENTS (Note 13)
SUBSEQUENT EVENTS (Note 16)
These financial statements are authorized for issue by the Board of Directors on May 26, 2021. They are signed on the Company’s behalf by:
“Collin Kettell” | , Director |
“Douglas Hurst” | , Director |
The accompanying notes are an integral part of these condensed interim financial statements.
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New Found Gold Corp.
Condensed Interim Statements of Loss and Comprehensive Loss
(Unaudited - Expressed in Canadian Dollars)
Three months ended March 31, | ||||||||||||
2021 | 2020 | |||||||||||
Note | $ | $ | ||||||||||
Expenses | ||||||||||||
Corporate development and investor relations | 273,676 | - | ||||||||||
Depreciation | 94,842 | 2,186 | ||||||||||
Exploration and evaluation expenditures | 3,9 | 6,995,710 | 731,353 | |||||||||
Office and sundry | 41,992 | 20,249 | ||||||||||
Professional fees | 9 | 312,081 | 177,695 | |||||||||
Salaries and consulting | 9 | 501,321 | 441,382 | |||||||||
Transfer agent and regulatory fees | 39,706 | 4,500 | ||||||||||
Travel | - | 29,245 | ||||||||||
Loss from operating activities | (8,259,328 | ) | (1,406,610 | ) | ||||||||
Settlement of flow-through share premium | 7 | 185,431 | - | |||||||||
Foreign exchange gain | 648 | 872 | ||||||||||
Interest expense | (1,440 | ) | - | |||||||||
Interest income | 39,417 | - | ||||||||||
Net realized gains on disposal of investments | 5 | 204,230 | - | |||||||||
Net change in unrealized gains (losses) on investments | 5 | 2,439,698 | (5,203,541 | ) | ||||||||
Loss and comprehensive loss for the period | (5,391,344 | ) | (6,609,279 | ) | ||||||||
Loss per share – basic and diluted ($) | 10 | (0.04 | ) | (0.08 | ) | |||||||
Weighted average number of common shares outstanding – basic and diluted | 149,024,029 | 83,209,963 |
The accompanying notes are an integral part of these condensed interim financial statements.
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New Found Gold Corp.
Condensed Interim Statements of Cash Flows
(Unaudited - Expressed in Canadian Dollars)
Three months ended March 31, | ||||||||
2021 | 2020 | |||||||
$ | $ | |||||||
Cash flows from operating activities | ||||||||
Loss for the period | (5,391,344 | ) | (6,609,279 | ) | ||||
Adjustments for: | ||||||||
Depreciation | 94,842 | 2,186 | ||||||
Interest expense | 1,440 | - | ||||||
Settlement of flow-through share premium | (185,431 | ) | - | |||||
Net realized (gains) on disposal of investments | (204,230 | ) | - | |||||
Net change in unrealized (gains) losses on investments | (2,439,698 | ) | 5,203,541 | |||||
(8,124,421 | ) | (1,403,552 | ) | |||||
Change in non-cash working capital items: | ||||||||
(Increase) in amounts receivable | (76,500 | ) | (39,802 | ) | ||||
(Increase) in prepaid expenses and deposits | (674,411 | ) | (68,220 | ) | ||||
(Increase) in sales taxes recoverable | (33,441 | ) | (142,759 | ) | ||||
Increase in accounts payable and accrued liabilities | 1,736,511 | 120,396 | ||||||
Net cash used in operating activities | (7,172,262 | ) | (1,533,937 | ) | ||||
Cash flows from investing activities | ||||||||
Proceeds on disposal of investments | 973,360 | - | ||||||
Purchases of property and equipment | (563,556 | ) | - | |||||
Net cash generated from investing activities | 409,804 | - | ||||||
Cash flows from financing activities | ||||||||
Stock options exercised | 81,050 | - | ||||||
Warrants exercised | 381,539 | - | ||||||
Lease payments | (21,810 | ) | - | |||||
Interest expense on lease liabilities | (1,440 | ) | - | |||||
Net cash generated from financing activities | 439,339 | - | ||||||
Net (decrease) in cash | (6,323,119 | ) | (1,533,937 | ) | ||||
Cash at beginning of period | 47,731,125 | 7,336,638 | ||||||
Cash at end of period | 41,408,006 | 5,802,701 |
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS (Note 11)
The accompanying notes are an integral part of these condensed interim financial statements.
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New Found Gold Corp.
Condensed Interim Statements of Changes in Equity
(Unaudited - Expressed in Canadian Dollars)
Share capital | Reserves | |||||||||||||||||||||||
Equity settled | ||||||||||||||||||||||||
share-based | ||||||||||||||||||||||||
Number | Amount | payments | Warrants | Deficit | Total equity | |||||||||||||||||||
of shares | $ | $ | $ | $ | $ | |||||||||||||||||||
Balance at December 31, 2019 | 78,924,249 | 10,735,862 | 2,415,009 | 2,252,458 | (6,441,142 | ) | 8,962,187 | |||||||||||||||||
Shares issued in private placement | 15,000,000 | 16,736,110 | - | - | - | 16,736,110 | ||||||||||||||||||
Total comprehensive loss for the period | - | - | - | - | (6,609,279 | ) | (6,609,279 | ) | ||||||||||||||||
Balance at March 31, 2020 | 93,924,249 | 27,471,972 | 2,415,009 | 2,252,458 | (13,050,421 | ) | 19,089,018 | |||||||||||||||||
Shares issued in initial public offering | 24,150,000 | 31,395,000 | - | - | - | 31,395,000 | ||||||||||||||||||
Flow-through shares issued in private placements | 4,860,982 | 7,118,196 | - | - | - | 7,118,196 | ||||||||||||||||||
Share issue costs | - | (3,032,606 | ) | - | - | - | (3,032,606 | ) | ||||||||||||||||
Agents’ warrants issued | - | (813,952 | ) | - | 813,952 | - | - | |||||||||||||||||
Flow-through share premium | - | (1,957,619 | ) | - | - | - | (1,957,619 | ) | ||||||||||||||||
Share-based compensation | - | - | 26,457,335 | - | - | 26,457,335 | ||||||||||||||||||
Stock options exercised | 9,195,000 | 12,204,631 | (5,168,007 | ) | - | - | 7,036,624 | |||||||||||||||||
Warrants exercised | 16,554,292 | 15,283,142 | - | (2,562,085 | ) | - | 12,721,057 | |||||||||||||||||
Total comprehensive loss for the period | - | - | - | - | (25,925,160 | ) | (25,925,160 | ) | ||||||||||||||||
Balance at December 31, 2020 | 148,684,523 | 87,668,764 | 23,704,337 | 504,325 | (38,975,581 | ) | 72,901,845 | |||||||||||||||||
Stock options exercised | 115,000 | 141,472 | (60,422 | ) | - | - | 81,050 | |||||||||||||||||
Warrants exercised | 291,830 | 542,054 | - | (160,515 | ) | - | 381,539 | |||||||||||||||||
Total comprehensive loss for the period | - | - | - | - | (5,391,344 | ) | (5,391,344 | ) | ||||||||||||||||
Balance at March 31, 2021 | 149,091,353 | 88,352,290 | 23,643,915 | 343,810 | (44,366,925 | ) | 67,973,090 |
The accompanying notes are an integral part of these condensed interim financial statements.
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New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three months ended March 31, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
1. | NATURE OF OPERATIONS |
New Found Gold Corp. (the “Company”) was incorporated on January 6, 2016, under the Business Corporations Act in the Province of Ontario. On June 23, 2020, the Company continued as a British Columbia corporation under the Business Corporations Act in the Province of British Columbia. The Company’s registered office is located at Suite 2600 – 595 Burrard Street, Vancouver, British Columbia V7X 1L3.
The Company is a mineral exploration company engaged in the acquisition, exploration and evaluation of resource properties with a focus on gold properties located in the Provinces of Newfoundland and Labrador and Ontario, Canada. The Company’s exploration and evaluation assets presently have no proven or probable reserves, and on the basis of information to date, it has not yet determined whether these properties contain economically recoverable resources. The recoverability of amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production.
On March 11, 2020, the World Health Organization declared the global outbreak of a novel coronavirus identified as “COVID-19” a global pandemic. In order to combat the spread of COVID-19, governments worldwide have enacted emergency measures including travel bans, legally enforced or self-imposed quarantine periods, social distancing and business and organization closures. These measures have caused material disruptions to businesses, governments and other organizations resulting in an economic slowdown and increased volatility in national and global equity and commodity markets. Central banks and governments, including Canadian federal and provincial governments, have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of any interventions. Significant economic and social impacts have limited the Company’s ability to continue its exploration and evaluation activities as intended. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company and its operations in future periods.
These condensed interim financial statements were approved by the Board of Directors of the Company on May 26, 2021.
2. | SIGNIFICANT ACCOUNTING POLICIES |
The principal accounting policies applied in the preparation of these financial statements are set out below.
a) | Statement of compliance |
The Company’s condensed interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as applicable to interim financial reports including International
Accounting Standards 34 “Interim Financial Reporting”.
These condensed interim financial statements do not include all the information and note disclosures required by IFRS for annual financial statements and should be read in conjunction with the annual financial statements for the year ended December 31, 2020, which have been prepared in accordance with IFRS, as issued by the International Accounting Standards Board (“IASB”) and included in Part I of the Handbook of the Chartered Professional Accountants of Canada and consistent with interpretations of the International
Financial Reporting Interpretations Committee (“IFRIC”).
The policies applied in these condensed interim financial statements are the same as those applied in the most recent annual financial statements and were consistently applied to all the periods presented.
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New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three months ended March 31, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
2. | SIGNIFICANT ACCOUNTING POLICIES (continued) |
b) | Basis of presentation |
These condensed interim financial statements have been prepared on a historical cost basis except for financial instruments classified as subsequently measured at fair value. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information.
c) | Significant Accounting Estimates and Judgments |
The preparation of these condensed interim financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.
These condensed interim financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates may be pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant assumptions about the future and other sources of estimation uncertainty that management has made at year end that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to the following:
(i) | Critical accounting estimates |
Valuation of Options Granted and Warrants Issued
The fair value of common share purchase options granted and warrants issued is determined at the issue date using the Black-Scholes option pricing model. The Black-Scholes model involves six key inputs to determine the fair value of an option, which are: risk-free interest rate, exercise price, market price at the grant date, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are or could be affected by significant factors that are out of the Company’s control. The Company is also required to estimate the future forfeiture rate of options based on historical information in its calculation of share-based payments expense. These estimates impact the values of share-based compensation expense, share capital, and reserves.
Computation of Income Taxes
The determination of tax expense for the period and deferred tax assets and liabilities involves significant estimation and judgment by management. In determining these amounts, management interprets tax legislation in a variety of jurisdictions and make estimates of the expected timing of the reversal of deferred tax assets and liabilities. Management also makes estimates of future earnings which affect the extent to which potential future tax benefits may be used.
The Company is subject to assessments by taxation authorities, which may interpret legislation differently. These differences may affect the final amount or the timing of the payment of taxes. We provide for such differences where known based on our best estimate of the probable outcome of these matters.
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New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three months ended March 31, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
2. | SIGNIFICANT ACCOUNTING POLICIES (continued) |
c) | Significant Accounting Estimates and Judgments (continued) |
(i) | Critical accounting estimates (continued) |
Shares Issued to Acquire Exploration and Evaluation Assets
From time to time, the Company issues common shares in the course of acquiring exploration and evaluation assets. When shares are issued without cash consideration, the transaction is recognized at the fair value of the assets received. In the event that the fair value of the assets cannot be reliably determined, the Company will recognize the transaction at the fair value of the shares issued. These estimates impact the value of share capital and exploration and evaluation assets.
Valuation of flow-through premium
The determination of the valuation of flow-through premium and warrants in equity units is subject to significant judgment and estimates. The flow-through premium is valued as the estimated premium that investors pay for the flow-through feature, being the portion in excess of the market value of shares without the flow-through feature issued in concurrent private placement financing.
(ii) | Critical accounting judgments |
Impairment of Exploration and Evaluation Assets
Management is required to assess impairment in respect to the Company’s intangible mineral property interests. The triggering events are defined in IFRS 6. In making the assessment, management is required to make judgments on the status of each project and the future plans towards finding commercial reserves. The carrying value of each exploration and evaluation asset is reviewed regularly for conditions that may suggest impairment. This review requires significant judgment. Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the property’s value; whether there has been an accumulation of costs significantly in excess of the amounts originally expected for the property’s acquisition, development or cost of holding; and whether exploration activities produced results that are not promising such that no more work is being planned in the foreseeable future. If impairment is determined to exist, a formal estimate of the recoverable amount is performed and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount. Management has determined that there were no indicators of impairment as at March 31, 2021.
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New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three months ended March 31, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
3. | EXPLORATION AND EVALUATION ASSETS |
The schedules below summarize the carrying costs of acquisition costs and exploration expenditures incurred to date for each exploration and evaluation asset that the Company is continuing to explore as at March 31, 2021 and December 31, 2020:
Newfoundland | ||||||||||||||||
Queensway(i) | Other | Ontario(ii) | Total | |||||||||||||
Three months ended March 31, 2021 | $ | $ | $ | $ | ||||||||||||
Exploration and evaluation assets | ||||||||||||||||
Balance as at December 31, 2020 and March 31, 2021 | 685,930 | 13,100 | 300,204 | 999,234 | ||||||||||||
Exploration and evaluation expenditures | ||||||||||||||||
Cumulative exploration expense - December 31, 2020 | 10,245,545 | 45,851 | 1,286,951 | 11,578,347 | ||||||||||||
Assays | 1,171,023 | - | 6,796 | 1,177,819 | ||||||||||||
Drilling | 3,115,705 | - | - | 3,115,705 | ||||||||||||
Geophysics | 832,416 | - | - | 832,416 | ||||||||||||
Office & general | 114,746 | - | - | 114,746 | ||||||||||||
Technical reports | - | - | 22,479 | 22,479 | ||||||||||||
Property taxes, mining leases and rent | 19,002 | - | - | 19,002 | ||||||||||||
Reclamation | 87,935 | - | - | 87,935 | ||||||||||||
Salaries & consulting | 970,650 | 6,520 | 2,900 | 980,070 | ||||||||||||
Supplies & equipment | 655,763 | - | 7,278 | 663,041 | ||||||||||||
Travel & accommodations | 58,952 | - | 45 | 58,997 | ||||||||||||
Exploration cost recovery | (76,500 | ) | - | - | (76,500 | ) | ||||||||||
6,949,692 | 6,520 | 39,498 | 6,995,710 | |||||||||||||
Cumulative exploration expense – March 31, 2021 | 17,195,237 | 52,371 | 1,326,449 | 18,574,057 |
Newfoundland | ||||||||||||||||
Queensway(i) | Other | Ontario (ii) | Total | |||||||||||||
Three months ended March 31, 2020 | $ | $ | $ | $ | ||||||||||||
Exploration and evaluation assets | ||||||||||||||||
Balance as at December 31, 2019 and March 31, 2020 | 658,700 | 16,500 | 425,516 | 1,100,716 | ||||||||||||
Exploration and evaluation expenditures | ||||||||||||||||
Cumulative exploration expense - December 31, 2019 | 2,633,775 | - | 837,133 | 3,470,908 | ||||||||||||
Assays | 87,215 | - | 211 | 87,426 | ||||||||||||
Geophysics | 552,008 | - | - | 552,008 | ||||||||||||
Office & general | 546 | - | - | 546 | ||||||||||||
Property taxes, mining leases and rent | 12,520 | - | - | 12,520 | ||||||||||||
Salaries & consulting | 59,415 | - | 7,500 | 66,915 | ||||||||||||
Supplies & equipment | 24,609 | - | - | 24,609 | ||||||||||||
Travel & accommodations | 17,595 | - | - | 17,595 | ||||||||||||
Exploration cost recovery | (30,266 | ) | - | (30,266 | ) | |||||||||||
723,642 | - | 7,711 | 731,353 | |||||||||||||
Cumulative exploration expense – March 31, 2020 | 3,357,417 | - | 844,844 | 4,202,261 |
- 8 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three months ended March 31, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
3. | EXPLORATION AND EVALUATION ASSETS (continued) |
(i) | Queensway Project – Gander, Newfoundland |
As at March 31, 2021, the Company owns a 100% interest in 86 (March 31, 2020 – 64) mineral licenses including 6,041 (March 31, 2020 – 3,547) claims comprising 151,030 (March 31, 2020 – 88,675) hectares of land located in Gander, Newfoundland. The project rights were acquired by map staking mineral licenses and making staged payments in cash and common shares of the Company from 2016 through 2019 under nine separate, fully executed option agreements. The optioned lands carry various net smelter return (“NSR”) royalties ranging from 0.6% to 2.0% which can be reduced to 0.5% to 1.0%, at the Company’s option, with payments ranging from $250,000 to $1,000,000 to the optionors. The total cost of the NSR’s that may be purchased at the Company’s discretion is $5,250,000.
(ii) | Ontario Projects |
As at March 31, 2021, the Company owns a 100% interest in the Lucky Strike project in Kirkland Lake, Ontario comprising 11,684 hectares, as well as a portfolio of mining and royalty interests throughout northeastern Ontario. The project rights were acquired by map staking mineral licenses and making staged payments in cash and common shares of the Company from 2016 through 2019 under a fully executed option agreement. The optioned lands carry an NSR ranging from 1% to 2%.
4. | PROPERTY AND EQUIPMENT |
Property and | Computer | Geological | ||||||||||||||||||
Buildings | Equipment | Equipment | Vehicles | Total | ||||||||||||||||
Cost | $ | $ | $ | $ | $ | |||||||||||||||
Balance at January 1, 2020 | - | - | - | 45,949 | 45,949 | |||||||||||||||
Additions | 836,009 | 15,860 | 336,020 | 258,551 | 1,466,440 | |||||||||||||||
Balance at December 31, 2020 | 836,009 | 15,860 | 336,020 | 304,500 | 1,492,389 | |||||||||||||||
Additions | 280,031 | 3,434 | 161,093 | 118,998 | 563,556 | |||||||||||||||
Balance at March 31, 2021 | 1,116,040 | 19,294 | 497,113 | 423,498 | 2,055,945 |
Accumulated Depreciation | ||||||||||||||||||||
Balance at January 1, 2020 | - | - | - | 16,800 | 16,800 | |||||||||||||||
Depreciation | 6,998 | 4,090 | 45,474 | 41,898 | 98,460 | |||||||||||||||
Balance at December 31, 2020 | 6,998 | 4,090 | 45,474 | 58,698 | 115,260 | |||||||||||||||
Depreciation | 7,523 | 1,982 | 36,681 | 27,275 | 73,461 | |||||||||||||||
Balance at March 31, 2021 | 14,521 | 6,072 | 82,155 | 85,973 | 188,721 | |||||||||||||||
Carrying Amount | ||||||||||||||||||||
At December 31, 2020 | 829,011 | 11,770 | 290,546 | 245,802 | 1,377,129 | |||||||||||||||
At March 31, 2021 | 1,101,519 | 13,222 | 414,958 | 337,525 | 1,867,224 |
5. | INVESTMENTS |
The Company classifies its investments at FVTPL. Realized gains and losses on disposal of investments and unrealized gains and losses in the fair value of investments are reflected in the statement of loss and comprehensive loss in the period in which they occur.
- 9 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three months ended March 31, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
5. | INVESTMENTS (continued) |
Investments consisted of the following as at March 31, 2021 and December 31, 2020:
March 31,
2021 |
December 31,
2020 |
|||||
$ | $ | |||||
Exploits Discovery Corp.(i) | 2,805,597 | 3,957,368 | ||||
MetalsTech Limited | 352,218 | 604,852 | ||||
Novo Resources Corp. | 19,602,750 | 16,527,777 | ||||
Investments, end of period | 22,760,565 | 21,089,997 |
(i) | The Exploits Discovery Corp. investment is subject to certain resale restrictions expiring December 8, 2021 and trading restrictions expiring April 8, 2021 and was discounted in the amount of $311,733. |
An analysis of investments including related gains and losses for the three months ended March 31, 2021 and 2020 is as follows:
Three months ended March 31, | ||||||
2021 | 2020 | |||||
$ | $ | |||||
Investments, beginning of period | 21,089,997 | 114,937 | ||||
Investments received in private placement | - | 16,736,110 | ||||
Disposition of investments | (973,360 | ) | - | |||
Realized gain on investments | 204,230 | - | ||||
Unrealized gain (loss) on investments | 2,439,698 | (5,203,541 | ) | |||
Investments, end of period | 22,760,565 | 11,647,506 |
6. | PREPAID EXPENSES AND DEPOSITS |
March 31, | December 31, | |||||
2021 | 2020 | |||||
$ | $ | |||||
Prepaid expenses | 1,444,001 | 761,595 | ||||
Mineral license deposits | 488,613 | 496,608 | ||||
Prepaid expenses and deposits, end of period | 1,932,614 | 1,258,203 |
- 10 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three months ended March 31, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
7. | FLOW-THROUGH SHARE PREMIUM |
Issued | Issued | |||||||||||
June 4, 2020 | June 10, 2020 | Total | ||||||||||
$ | $ | $ | ||||||||||
Balance at December 31, 2019 | - | - | - | |||||||||
Liability incurred on flow-through shares issued | 1,697,704 | 259,915 | 1,957,619 | |||||||||
Settlement of flow-through share premium on expenditures incurred | (1,536,893 | ) | (235,295 | ) | (1,772,188 | ) | ||||||
Balance at December 31, 2020 | 160,811 | 24,620 | 185,431 | |||||||||
Settlement of flow-through share premium on expenditures incurred | (160,811 | ) | (24,620 | ) | (185,431 | ) | ||||||
Balance at March 31, 2021 | - | - | - |
Flow-through share arrangements entitle the holder of the flow-through share to a 100% tax deduction in respect of qualifying Canadian exploration expenses as defined in the Income Tax Act, Canada (“Qualifying CEE”). As at March 31, 2021, the Company incurred $647,255 in Qualifying CEE and amortized a total of $185,431 of its flow-through liabilities, satisfying its remaining flow-through obligations.
The flow-through premium liability does not represent a cash liability to the Company and is to be fully amortized to the statement of loss and comprehensive loss pro-rata with the amount of qualifying expenditures that will be incurred.
8. | SHARE CAPITAL AND RESERVES |
Authorized Share Capital
At March 31, 2021, the authorized share capital comprised an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.
Details of Common Shares Issued in 2021
During the three months ended March 31, 2021, 115,000 stock options were exercised at a weighted average exercise price of $0.70 per share for gross proceeds of $81,050.
During the three months ended March 31, 2021, 291,830 warrants were exercised at a weighted average exercise price of $1.31 per share for gross proceeds of $381,539.
Details of Common Shares Issued in 2020
During fiscal 2020, 9,195,000 stock options were exercised at a weighted average exercise price of $0.77 per share for gross proceeds of $7,036,624.
During fiscal 2020, 16,554,292 warrants were exercised at a weighted average exercise price of $0.77 per share for gross proceeds of $12,721,057.
On March 6, 2020, the Company completed a private placement consisting of 15,000,000 common shares in exchange for non-cash consideration of 6,944,444 common shares of Novo Resources Corp. (TSXV: NVO) at a price of $2.41 per share for gross proceeds of $16,736,110.
- 11 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three months ended March 31, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
8. | SHARE CAPITAL AND RESERVES (continued) |
On June 4, 2020, the Company completed a non-brokered private placement financing of 3,994,597 flow-through common shares at a price of $1.50 per common share for gross proceeds of $5,991,896. Finders’ fees paid were $69,394 in cash and the issuance of 64,282 warrants exercisable into common shares of the Company at $1.50 per share for two years from the date of issue with a fair value of $25,912. The premium received on the flow-through shares issued was determined to be $1,697,704.
On June 10, 2020, the Company completed a non-brokered private placement financing of 866,385 flow-through common shares at a price of $1.30 per common share for gross proceeds of $1,126,300. Finders’ fees paid were $56,793 in cash and the issuance of 43,582 warrants exercisable into common shares of the Company at $1.30 per share for two years from the date of issue with a fair value of $16,271. The premium received on the flow-through shares issued was determined to be $259,915.
On August 11, 2020, the Company completed an initial public offering of 21,000,000 common shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 13, 2020, its agents exercised their overallotment option in full to offer and sell an additional 3,150,000 common shares for gross proceeds of $4,095,000. The Company paid share issuance costs of $2,906,419 in cash and issued 1,379,768 agents’ warrants with a fair value of $771,769. The agents’ warrants are exercisable into common shares of the Company at $1.30 per share for 12 months from the date of issue in connection with the initial public offering.
Share Purchase Option Compensation Plan
The Company has a share purchase option plan (the “Plan”) approved by the Company’s shareholders that allows it to grant share purchase options, subject to regulatory terms and approval, to its officers, directors, employees and service providers. The Plan is based on the maximum number of eligible shares not exceeding 10% in the aggregate and 5% with respect to any one optionee of the Company’s outstanding common shares at the time of grant. If outstanding share purchase options are exercised or expire, and/or the number of issued and outstanding common shares of the Company increases, then the share purchase options available to grant under the Plan increase proportionately. The exercise price and vesting terms of each share purchase option is set by the Board of Directors at the time of grant. Share purchase options granted are subject to a four-month hold period and exercisable for a period determined by the Board of Directors which cannot exceed five years.
The continuity of share purchase options for the three months ended March 31, 2021 is as follows:
Outstanding | Outstanding | Exercisable | ||||||||||||||||||||||||
Exercise | December 31, | Cancelled/ | March 31, | March 31, | ||||||||||||||||||||||
Expiry date | Price | 2020 | Granted | Exercised | Expired | 2021 | 2021 | |||||||||||||||||||
February 20, 2022 | $ | 0.15 | 75,000 | - | - | - | 75,000 | 75,000 | ||||||||||||||||||
September 30, 2023 | $ | 0.40 | 250,000 | - | - | - | 250,000 | 250,000 | ||||||||||||||||||
December 17, 2024 | $ | 0.50 | 2,685,000 | - | (100,000 | ) | - | 2,585,000 | 2,585,000 | |||||||||||||||||
April 18, 2025 | $ | 1.00 | 1,500,000 | - | - | - | 1,500,000 | 1,500,000 | ||||||||||||||||||
May 23, 2025 | $ | 1.075 | 225,000 | - | - | - | 225,000 | 225,000 | ||||||||||||||||||
August 11, 2025 | $ | 1.40 | 2,965,000 | - | - | - | 2,965,000 | 2,965,000 | ||||||||||||||||||
September 3, 2025 | $ | 2.07 | 215,000 | - | (15,000 | ) | - | 200,000 | 200,000 | |||||||||||||||||
October 1, 2025 | $ | 2.15 | 25,000 | - | - | - | 25,000 | 25,000 | ||||||||||||||||||
December 31, 2025 | $ | 4.10 | 6,242,500 | - | - | - | 6,242,500 | 6,242,500 | ||||||||||||||||||
14,182,500 | - | (115,000 | ) | - | 14,067,500 | 14,067,500 | ||||||||||||||||||||
Weighted average exercise price $ | 2.36 | - | 0.70 | - | 2.37 | 2.37 | ||||||||||||||||||||
Weighted average contractual remaining life (years) | 4.58 | - | - | - | 4.33 | 4.33 |
- 12 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three months ended March 31, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
8. | SHARE CAPITAL AND RESERVES (continued) |
The continuity of share purchase options for the three months ended March 31, 2020 is as follows:
Outstanding | Outstanding Exercisable | |||||||||||||||||||||||||
Exercise | December 31, | Cancelled/ | March 31, | March 31, | ||||||||||||||||||||||
Expiry date | Price | 2019 | Granted | Exercised | Expired | 2020 | 2020 | |||||||||||||||||||
February 20, 2022 | $ | 0.15 | 1,930,000 | - | - | - | 1,930,000 | 1,930,000 | ||||||||||||||||||
September 30, 2023 | $ | 0.40 | 350,000 | - | - | - | 350,000 | 350,000 | ||||||||||||||||||
December 17, 2024 | $ | 0.50 | 5,605,000 | - | - | - | 5,605,000 | 5,605,000 | ||||||||||||||||||
7,885,000 | - | - | - | 7,885,000 | 7,885,000 | |||||||||||||||||||||
Weighted average exercise price $ | 0.41 | - | - | - | 0.41 | 0.41 | ||||||||||||||||||||
Weighted average contractual remaining life (years) | 4.22 | - | - | - | 3.97 | 3.97 |
The weighted average fair value of share purchase options exercised during the three months ended March 31, 2021 is $0.53 (three months ended March 31, 2020 - $Nil). The weighted average share price of options exercised at the date of exercise during the three months ended March 31, 2021 is $4.29 (three months ended March 31, 2020 – $Nil).
Warrants
The continuity of warrants for the three months ended March 31, 2021 is as follows:
Outstanding | Outstanding | |||||||||||||||||||||||
Exercise | December 31, | Cancelled/ | March 31, | |||||||||||||||||||||
Expiry date | Price | 2020 | Issued | Exercised | Expired | 2021 | ||||||||||||||||||
August 11, 2021 | $ | 1.30 | 714,462 | - | (238,155 | ) | - | 476,307 | ||||||||||||||||
August 13, 2021 | $ | 1.30 | 113,399 | - | (37,799 | ) | - | 75,600 | ||||||||||||||||
May 12, 2022 | $ | 1.30 | 39,475 | - | (5,076 | ) | - | 34,399 | ||||||||||||||||
May 13, 2022 | $ | 1.50 | 36,052 | - | (3,300 | ) | - | 32,752 | ||||||||||||||||
June 4, 2022 | $ | 1.50 | 25,845 | - | (7,500 | ) | - | 18,345 | ||||||||||||||||
June 10, 2022 | $ | 1.30 | 4,107 | - | - | - | 4,107 | |||||||||||||||||
933,340 | - | (291,830 | ) | - | 641,510 | |||||||||||||||||||
Weighted average exercise price $ | 1.31 | - | 1.31 | - | 1.32 | |||||||||||||||||||
Weighted average contractual remaining life (years) | 0.70 | - | - | - | 0.47 |
The continuity of warrants for the three months ended March 31, 2020 is as follows:
Outstanding | Outstanding | |||||||||||||||||||||||
Exercise | December 31, | Cancelled/ | March 31, | |||||||||||||||||||||
Expiry date | Price | 2019 | Issued | Exercised | Expired | 2020 | ||||||||||||||||||
November 29, 2022 | $ | 0.75 | 16,000,000 | - | - | - | 16,000,000 | |||||||||||||||||
16,000,000 | - | - | - | 16,000,000 | ||||||||||||||||||||
Weighted average exercise price $ | 0.75 | - | - | - | 0.75 | |||||||||||||||||||
Weighted average contractual remaining life (years) | 2.92 | - | - | - | 2.67 |
- 13 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three months ended March 31, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
8. | SHARE CAPITAL AND RESERVES (continued) |
The weighted average fair value of warrants exercised during the three months ended March 31, 2021 is $0.55 (three months ended March 31, 2020 - $Nil). The weighted average share price of warrants exercised at the date of exercise during the three months ended March 31, 2021 is $4.15 (three months ended March 31, 2020 – $Nil).
9. | RELATED PARTY BALANCES AND TRANSACTIONS |
All transactions with related parties have occurred in the normal course of operations and on terms and conditions that are similar to those of transactions with unrelated parties and are measured at the amount of consideration paid or received. A summary of the Company’s related party transactions with corporations having similar directors and officers, being Goldspot Discoveries Inc. and Mexican Gold Mining Corp., is as follows:
(i) | Goldspot Discoveries Inc. is a related entity having the following common director and officer to the Company: Denis Laviolette, Director and President. |
(ii) | Mexican Gold Mining Corp. is a related entity having the following common director and officer to the Company: John Anderson, Director, Michael Kanevsky, Chief Financial Officer. On January 26, 2020 the Company entered into a binding letter agreement with Mexican Gold Mining Corp. (“MGMC”) to have all of the issued and outstanding shares of the Company acquired by MGMC. On February 19, 2020, the Company announced that the binding letter agreement was mutually terminated. |
As at March 31, 2021, $112,254 is included in accounts payable and accrued liabilities for the amounts owed to GoldSpot Discoveries Inc. (December 31, 2020 - $Nil owed to related corporations).
There are no ongoing contractual commitments resulting from these transactions with related parties.
Key management personnel compensation
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers.
Three months | Three months | |||||||||||
Salaries and | ended March 31, | Salaries and | ended March 31, | |||||||||
Consulting | 2021 | Consulting | 2020 | |||||||||
$ | $ | $ | $ | |||||||||
Executive Chairman | 75,000 | 75,000 | 44,070 | 44,070 | ||||||||
Chief Executive Officer | 75,000 | 75,000 | 275,000 | 275,000 | ||||||||
President | 52,500 | 52,500 | 37,500 | 37,500 | ||||||||
Chief Financial Officer | 13,500 | 13,500 | 30,000 | 30,000 | ||||||||
Chief Operating Officer | 48,750 | 48,750 | 32,500 | 32,500 | ||||||||
Non- executive directors | 12,000 | 12,000 | - | - | ||||||||
Total | 276,750 | 276,750 | 419,070 | 419,070 |
Under the terms of their management agreements, certain officers of the Company are entitled to 18 months of base pay in the event of their agreements being terminated without cause.
- 14 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three months ended March 31, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
10. | LOSS PER SHARE |
Three months ended March 31, | ||||||||
2021 | 2020 | |||||||
Loss attributable to common shareholders ($) | 5,391,344 | 6,609,279 | ||||||
Weighted average number of common shares outstanding | 149,024,029 | 83,209,963 | ||||||
Loss per share attributed to common shareholders | $ | 0.04 | $ | 0.08 |
Diluted loss per share did not include the effect of 14,067,500 (three months ended March 31, 2020 – 7,885,000) share purchase options and 641,510 (three months ended March 31, 2020 – 16,000,000) common share purchase warrants as they are anti-dilutive.
11. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS |
Three months ended March 31, | ||||||||
2021 | 2020 | |||||||
$ | $ | |||||||
Non-cash investing and financing activities: | ||||||||
Investments received for private placement | - | 16,736,110 | ||||||
Right-of-use assets | 32,652 | - | ||||||
Cash paid for income taxes | - | - | ||||||
Cash paid for interest | - | - |
12. | SEGMENTED INFORMATION |
The Company’s operations are limited to a single reportable segment, being mineral exploration and evaluation. All of the Company’s evaluation and exploration assets are located in Canada.
13. | COMMITMENTS |
The following table summarizes the Company’s long-term commitments as at March 31, 2021:
4-5 | More than | |||||||||||||||||||
1 Year | 2 Years | 3 Years | Years | 5 Years | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
Lease obligations | 31,390 | - | - | - | - |
The Company is required to spend approximately $1,454,079 over the next 12 months to keep all claims owned in good standing.
The following table summarizes the Company’s long-term commitments as at December 31, 2020:
4-5 | More than | |||||||||||||||||||
1 Year | 2 Years | 3 Years | Years | 5 Years | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
Lease obligations | 53,201 | - | - | - | - |
- 15 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three months ended March 31, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
14. | FINANCIAL INSTRUMENTS |
The Company thoroughly examines the various financial instrument risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include credit risk, liquidity risk, currency risk, and interest rate risk. Where material, these risks are reviewed and monitored by the Board of Directors.
(a) Fair Values
Financial assets and liabilities measured at fair value are recognized according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy are as follows:
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2 – Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
The Company’s only financial instrument measured at fair value are its investments, for which the fair value is determined using closing prices at the statement of financial position date with any unrealized gain or loss recognized in profit or loss.
The carrying values of other financial instruments, including cash, deposits and amounts receivable, and accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of these financial instruments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||
Recurring measurements | Carrying amount | Fair value | ||||||||||||||||||
Investments, at fair value | ||||||||||||||||||||
March 31, 2021 | 22,760,565 | 19,954,968 | 2,805,597 | - | 22,760,565 | |||||||||||||||
December 31, 2020 | 21,089,997 | 17,132,629 | 3,957,368 | - | 21,089,997 |
(b) Financial Instrument Risk Exposure
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company does not have financial instruments that potentially subject the Company to credit risk. Overall, the Company’s credit risk has not changed significantly from the prior year. Sales taxes recoverable are due from the Canada Revenue Agency and the Company places its cash with financial institutions with high credit ratings, therefore in management’s judgment, credit risk is low.
There have been no changes in management’s methods for managing credit risk during the three months ended March 31, 2021 and 2020.
- 16 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three months ended March 31, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
14. | FINANCIAL INSTRUMENTS (continued) |
(b) Financial Instrument Risk Exposure (continued)
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has in place a planning and budgeting process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. The Company has historically relied on issuance of shares to fund exploration programs and may require doing so again in the future. As at March 31, 2021, the Company has total liabilities of $2,164,352 and cash of $41,408,006 which is available to discharge these liabilities (December 31, 2020 – total liabilities of $635,083 and cash of $47,731,125). Accordingly, in management’s judgment, liquidity risk is low.
There have been no changes in management’s methods for managing liquidity risk since December 31, 2020.
Market risk
(i) Currency risk
Financial instruments that impact the Company’s net earnings or other comprehensive income due to currency fluctuation include cash accounts denominated in US dollars and investments denominated in Australian dollars. Fluctuations in the exchange rate between the US dollar and the Canadian dollar, and the Australian dollar and the Canadian dollar at March 31, 2021 would not have a material impact on the Company’s net earnings and other comprehensive income.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. As the Company deposits its short-term investments into fixed rate guaranteed investment certificates with one-year maturities or less, the Company is not exposed to interest rate risk.
(iii) Commodity price risk
Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company’s property has exposure to predominantly gold. Commodity prices, especially gold, greatly affect the value of the Company and the potential value of its property and investments.
(iv) Equity price risk
Equity price risk is the risk that the fair value of or future cash flows from the Company’s financial instruments will significantly fluctuate because of changes in market prices. The Company is exposed to market risk in trading its investments in unfavorable market conditions which could result in dispositions of investments at less than favorable prices. Additionally, the Company adjusts its investments to fair value at the end of each reporting period. This process could result in write-downs of the Company’s investments over one or more reporting periods, particularly during periods of overall market instability. The sensitivity of the Company’s net income (loss) to changes in market prices at March 31, 2021 would change the Company’s net income (loss) by $2,030,719 as a result of a 10% change in the market price of its investments.
There have been no changes in management’s methods for managing market risks since December 31, 2020.
- 17 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three months ended March 31, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
15. | CAPITAL MANAGEMENT |
The Company’s objectives when managing capital are:
• | To safeguard our ability to continue as a going concern in order to develop and operate our current projects; |
• | Pursue strategic growth initiatives; and |
• | To maintain a flexible capital structure which lowers the cost of capital. |
In assessing our capital structure, we include in our assessment the components of equity consisting of common shares, stock options and warrants, and deficit that as at March 31, 2021 totalled $67,973,090 (December 31, 2020 - $72,901,845). In order to facilitate the management of capital requirements, the Company prepares annual expenditure budgets and continuously monitors and reviews actual and forecasted cash flows. The annual and updated budgets are monitored and approved by the Board of Directors. To maintain or adjust the capital structure, the Company may, from time to time, issue new shares, issue new debt, repay debt or dispose of non-core assets. The Company’s current capital resources are sufficient to carry out our exploration plans and support operations through the current operating period.
The Company is not subject to any capital requirements imposed by a regulator.
There were no changes in the Company’s approach to capital management during the three months ended March 31, 2021.
16. | SUBSEQUENT EVENTS |
Investments
In April 2021, the Company participated in a non-brokered private placement in Labrador Gold Corp. consisting of 7,000,000 units at a price of $0.55 per unit for a gross investment of $3,850,000. Each unit consists of one common share and one-half common share purchase warrant. Each whole warrant entitles the Company to acquire one common share at an exercise price of $0.75 for two years from the date of issue.
In May 2021, the Company participated in a non-brokered private placement in Exploits Discovery Corp. consisting of 6,666,667 units at a price of $0.60 per unit for a gross investment of $4,000,000. Each unit consists of one common share and one common share purchase warrant. Each whole warrant entitles the Company to acquire one common share at an exercise price of $0.70 for two years from the date of issue.
In May 2021, the Company participated in a non-brokered private placement in Labrador Gold Corp. consisting of 5,555,556 units at a price of $0.90 per unit for a gross investment of $5,000,000. Each unit consists of one common share and one-half common share purchase warrant. Each whole warrant entitles the Company to acquire one common share at an exercise price of $1.05 for two years from the date of issue.
Private Placement
Subsequent to March 31, 2021, the Company completed a non-brokered private placement of 2,857,000 flow-through common shares at a price of $5.25 per common share for gross proceeds of $14,999,250. The Company paid finder’s fees of $524,974 in cash.
Stock Options Exercised
Subsequent to March 31, 2021, 389,500 stock options were exercised at a weighted average exercise price of $0.94 for gross proceeds of $365,090.
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New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three months ended March 31, 2021 and 2020
(Unaudited - Expressed in Canadian Dollars Unless Otherwise Noted)
16. | SUBSEQUENT EVENTS (continued) |
Stock Options Granted
Subsequent to March 31, 2021, 1,369,000 stock options were granted at an exercise price of $6.79 and an expiry date of April 29, 2026.
Subsequent to March 31, 2021, 200,000 stock options, that are subject to shareholder approval, were granted at an exercise price of $8.62 and an expiry date of May 17, 2026.
Warrants Exercised
Subsequent to March 31, 2021, 11,911 warrants were exercised at a weighted average exercise price of $1.48 for gross proceeds of $17,636.
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Exhibit 99.9
Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
The following discussion is management’s assessment and analysis of the results and financial condition of New Found Gold Corp. (the “Company” or “NFG”) and should be read in conjunction with the accompanying unaudited condensed interim financial statements and related notes. The financial data was prepared using accounting policies consistent with International Financial Reporting Standards (“IFRS”) and all figures are reported in Canadian dollars unless otherwise indicated.
This MD&A contains forward-looking information and forward-looking statements, within the meaning of applicable Canadian securities legislation, (collectively, “forward-looking statements”), that involve numerous risks and uncertainties. The Company continually seeks to minimize its exposure to business risks, but by the nature of its business and exploration activities and size, will always have some risk. These risks are not always quantifiable due to their uncertain nature. Should one or more of these risks and uncertainties, including those described under the headings “Risks and Uncertainties” and “Cautionary Notes Regarding Forward-Looking Statements” materialize, or should underlying assumptions prove incorrect, then actual results may vary materially from those expressed or implied in forward-looking statements. The effective date of this report is November 27, 2020.
The scientific and technical information contained in this MD&A has been reviewed and approved by the Company’s Chief Operating Officer, Greg Matheson, P.Geo., a Qualified Person as defined by National Instrument 43-101- Standards of Disclosure for Mineral Projects (“NI 43-101”). The scientific and technical information in this MD&A relating to the Queensway Project is derived from, and in some instances is a direct extract from, and is based on the assumptions, qualifications and procedures set out in, the report entitled “Technical Report on the Queensway Gold Project, Newfoundland, Canada” with an effective date of April 15, 2020, prepared in accordance with NI 43-101 (the “Queensway Technical Report”). Reference should be made to the full text of the Queensway Technical Report, which is available for review under the Company’s profile on SEDAR at www.sedar.com.
Description of Business
The Company was incorporated on January 6, 2016, under the Business Corporations Act (Ontario). On June 23, 2020, the Company continued as a British Columbia corporation under the Business Corporation Act in the province of British Columbia. The Company’s head office is located at 1430 – 800 West Pender Street, Vancouver, British Columbia V6C 2V6, and its registered office is located at Suite 2600 – 595 Burrard Street, Vancouver, British Columbia V7X 1L3.On August 11, 2020, the Company completed an initial public offering and listed on the TSX Venture Exchange under the symbol “NFG”.
The Company is a mineral exploration company engaged in the acquisition, exploration and evaluation of resource properties with a focus on gold properties located in the Provinces of Newfoundland and Labrador and Ontario, Canada. The Company’s principal objective is to explore and develop the Queensway Project, which is located near Gander, Newfoundland and to identify other properties worthy of investment and exploration. For the purpose of NI 43-101, the Queensway Project is the Company’s only material property.
The Queensway Project is comprised of 86 mineral licenses, including 6,041 claims comprising 151,030 hectares of land located near Gander, Newfoundland. The Queensway Project is accessible by main access roads including the Trans-Canada Highway (“TCH”) that passes through the southern portion of the project and has high voltage electric transmission lines running through the project area. In addition, the Company owns a 100% interest in the Lucky Strike project in Kirkland Lake, Ontario comprising 11,631 hectares, as well as a portfolio of mining and royalty interests throughout northeastern Ontario. The Lucky Strike Property is located 10km north of Larder Lake, Ontario and is comprised of 639 single cell un-patented mining claims. The Company is well financed to advance its planned exploration activities on the projects as intended.
As of the date of this MD&A, the Company’s Board of Directors consisted of the following: Collin Kettell (Executive Chairman), Craig Roberts, Denis Laviolette, John Anderson and Quinton Hennigh.
Additional information relating to the Company is available on the Company’s website at www.newfoundgold.ca.
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Project Summary
Queensway Project, Newfoundland
Ownership
The Queensway Project contains nine optioned claim packages along with mineral licenses map staked by NFG. The Company acquired the rights to the Queensway Project by map staking mineral licenses and making a series of staged payments in cash and common shares of the Company from 2016 through 2020 under nine separate option agreements. All of the option agreements have been fully exercised resulting in 100% ownership by NFG of the mineral licenses related to such option agreements.. In addition to the nine option agreements, NFG also conducted map staking resulting in 49 map staked mineral licenses which are held 100% by NFG. The optioned lands also carry various net smelter royalties and the option agreements are described in detail below and their location can be seen in the figure below.
Queensway Project – Royalties Agreements and Encumbrances
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
1. | Linear and JBP Linear Property, NL - In July 2016, the Company acquired a 100% interest in the Linear and JBP Linear Property via an option agreement with Krinor Resources, Kevin Keats and Allan Keats. The Linear and JBP Linear property is comprised of six map staked licences covering 2,150 hectares and under the terms of the agreement the Company is to pay the optionor a total of $54,000 and issue 45,000 shares over a 36-month period; the agreement was fully executed in July 2019. A net smelter royalty grant of 0.6% is payable to the optionor along with an underlying net smelter royalty of 1.0% covering five of the six claims is payable to Paragon Minerals Corporation. This agreement contains a 2 km area of influence that subjects adjacent lands to the additional 0.6% net smelter royalty. |
2. | Unity Property, NL - In September 2016, the Company acquired a 100% interest in the Unity Property via an option agreement with Unity Resources Inc., Gary Lewis, Donna Lewis, Nigel Lewis, Leonard Lewis, and Aubrey Budgell. The unity property is comprised of ten map staked licences covering 8,150 hectares and under the terms of the agreement the Company is to pay the optionor a total of $90,000 over a 60-month period; the agreement was fully executed in June 2020. A net smelter royalty grant of 1.6% is payable to the optionor which can be reduced by 1.0% by paying the optionor $ 1,000,000. This agreement contains a 2 km area of influence that subjects adjacent lands but is bounded to areas east and north of the subject lands and does not impact any other optioned property. |
3. | United Gold Property, NL - In October 2016, the Company acquired a 100% interest in the United Gold Property via an option agreement with Noreen Kennedy. The United Gold property is comprised of one map staked licence covering 275 hectares and under the terms of the agreement the Company is to pay the optionor a total of $16,500 and $ 16,500 worth of shares are to be issued over a 6-month period; this option agreement has been fully executed and the Company is the sole owner of the property. A net smelter royalty grant of 0.6% is payable to the optionor. |
4. | Golden Bullet Property, NL - In November 2016, the Company acquired a 100% interest in the Golden Bullet Property via an option agreement with Roland Quinlan, Eddie Quinlan and Larry Quinlan. The Golden Bullet property is comprised of four map staked licences covering 1,200 hectares and under the terms of the agreement the Company is to pay the optionor a total of $125,000 and $100,000 worth of common shares of NFG are to be issued over a 36-month period; the option was fully executed in November 2019 resulting in a 100% ownership by NFG. A net smelter royalty grant of 1.6% is payable to the optionor which can be reduced by 1.0% by paying the optionor $1,000,000. This agreement contains a 2 km area of influence that subjects adjacent lands but is limited to lands acquired after the agreement date. |
5. | Blackmore Property, NL - In December 2016, the Company acquired a 100% interest in the Blackmore Property via an option agreement with Neal Blackmore. The Blackmore property is comprised of two map staked licences covering 175 hectares and under the terms of the agreement the Company is to pay the optionor a total of $10,000; this option agreement has been fully executed and the Company is the sole owner of the property. A net smelter royalty grant of 0.6% is payable to the optionor. |
6. | Guinchard Property, NL - In April 2017, the Company acquired a 100% interest in the Guinchard Property via an option agreement with Wayde Guinchard, Myrtle Guinchard and Peter Rogers. The Guinchard property is comprised of five map staked licences covering 625 hectares and under the terms of the agreement the Company is to pay the optionor a total of $45,000 and 105,000 shares over a 24-month period; the option was fully executed in April 2019 and the Company is the sole owner of the property. A net smelter royalty grant of 1.0% is payable to the optionor which can be reduced by 0.5% by paying the optionor $1,000,000. |
7. | JBP Linear Property, NL - In May 2017, the Company acquired a 100% interest in the JBP Linear Property via an option agreement with Roland Quinlan and Eddie Quinlan. The JBP Linear property is comprised of five map staked licences covering 1250 hectares and under the terms of the agreement the Company is to pay the optionor a total of $45,000 over a 24-month period; the option was fully executed in November 2019 and the Company is the sole owner of the property; although claim transfers are pending at the time of the report. A net smelter royalty grant of 1.6% is payable to the optionor which can be reduced by 1.0% by paying the optionor $1,000,000. |
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
8. | P-Pond Property, NL - In May 2017, the Company acquired a 100% interest in the P-Pond Property via an option agreement with Stephen Stockley, Mark Stockley and Edward Stockley. The P-Pond property is comprised of three map staked licences covering 175 hectares and under the terms of the agreement the Company is to pay the optionor a total of $30,000 and $10,000 worth of shares are to be issued over a 12-month period; this option agreement has been fully executed and the Company is the sole owner of the property. A net smelter royalty grant of 1.0% is payable to the optionor which can be reduced by 0.5% by paying the optionor $250,000. |
9. | Lush Property, NL - In September 2018, the Company acquired a 100% interest in the Lush Property via a purchase agreement with Paragon Minerals Corp. The Lush property is comprised of one map staked licence covering 50 hectares. Under the terms of the purchase agreement the Company is to grant a net smelter royalty of 0.5% payable to Paragon Minerals Corp along with an underlying net smelter royalty of 2.0% payable to Tom Lush which can be reduced by 1.0% by paying $1,000,000 to Tom Lush. |
10. | Queensway Map Staked Lands, NL - Between August 2016 and April 2017, the Company acquired a 100% interest of twenty-one licences covering 73,830 hectares through map staking. In April of 2020, an additional twenty-eight mineral licenses were staked totalling 64,175 hectares shown in the figure below: |
Environmental and Exploration Permitting
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
All exploration activities, including reclamation, must comply with all pertinent federal and provincial laws and regulations, the fundamental requirement of which, is that exploration on crown land must prevent unnecessary or undue degradation or impact on fish and wildlife and requires reclamation if any degradation or impacts that occur. All exploration activities in Newfoundland and Labrador require an Exploration Approval from the Department of Natural Resources prior to the start of work. In this, approval requirements for the exploration are listed with contacts for the various entities given. Two Exploration Approvals are in place as of the date of this MD&A.
The first Exploration Approval is for diamond drilling (50 Holes), surface trenching (50 trenches), ground geophysics, prospecting and geochemistry on the Gander Gold North (“GGN”) area. The second is for airborne geophysics, geochemical surveying and prospecting over the entire Queensway Project pre April 2020 shown as existing licenses above. The approvals expire one year from the date they are approved unless the exploration is completed earlier and is reported as being complete. Both permits will expire on December 5, 2020. Any changes to the planned work have to be submitted to the Department of Natural Resources and either an amended approval is given or a new application has to be made. Lands staked in April, 2020 will require new exploration approvals and are not covered by the existing exploration approvals.
Water removal from ponds/streams etc. for trenching (washing trenches) or drilling requires a Water Use Permit which is granted for 1 year. One water use permit is in place for the GGN claims and related diamond drilling and trenching. The permit is issued until December 5, 2020. This permit can be renewed, or new permit issued to cover ongoing exploration activities.
Generally, the mineral licenses are available for exploration activities year-round and only subject to the conditions of the exploration approvals and water use license; other activities such as construction, road building, camps and water crossings may require additional permits from outside of the mines department. Mineral licenses within the southernmost portion of Gander Gold South (“GGS”), specifically licenses 024557M, 024558M, 024561M, 024563M, 024568M, and 024570M are restricted from exploration activities from mid-May to early-July due to spring habitat for Newfoundland caribou.
Project Infrastructure
The main access roads include the TCH that passes through the southern portion of the Appleton Fault Zone (“ AFZ”) / Joe Batts Pond Deformation Zone (“JBPDZ”) claim areas on the GGN, and the Northwest Gander (“NWG”) road that extends along the western portion of the property from the TCH just west of Glenwood, to the south and west of Gander Lake on the GGS. Gravel woods access roads originally built for the forestry industry, such as the AFZ access, the JBPDZ access, the JBP road and the roads to the east of the steel bridge across the NWG River and across the bridge to the east of the Southwest Gander River extend through most of the property, with areas in the extreme SE and SW the most difficult to access. The SW area is best accessed by woods roads from Route 360, the Baie D’Espoir highway, that leaves the TCH at Bishop’s Falls, approximately 70 km to the west of Glenwood.
Transportation availability includes the international airport at Gander which has bush plane and helicopter bases, a helicopter base in Appleton and shipping through the ports of Lewisporte and Botwood, 25 km and 70 km to the west respectively, and north of the TCH, both with good harbours although problems with winter shipping due to sea and pack ice.
Electricity is available from the NL provincial grid, which has three transmission lines through the Queensway Project as follows:
1) | A 350 kV HVdc direct current line which passes through the approximate centre of the GGS licences; |
2) | Two 138 kV HVac transmission lines to the north of the TCH crossing the AFZ and JBPDZ trends on the GGN licences; |
3) | A 69 kV HVac transmission line that approximately parallels the TCH to the north across the AFZ and JBPDZ trends on the GGN licences and follows the TCH and secondary routes. |
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
In addition, electrical power is supplied, through the provincial grid, to the towns of Glenwood and Appleton which are surrounded by the NFG Queensway licences.
Historical Work
To date there has been over 25,538 metres of core in 218 holes drilled historically on the Queensway Project by Noranda, Rubicon and various operators from the mid 1980’s through to 2012. Historical core drilling has primarily occurred north of Gander Lake along the two principal fault structures the AFZ and JBPDZ; the exploration drilling has been spread out amongst individual zones with drilling along 5 km of the AFZ targeting the Lotto, Powerline, Cokes, Keats, Dome, Trench 26, Road, Knob, Letha and Grouse Zones. Drilling at the JBPDZ has focussed along 3 km targeting the Pocket Pond and H-Pond zones and one drill hole targeting the 798 zone. Significantly lesser number of drill holes have also targeted zones south of Gander Lake including the Pauls Pond showing, Aztec and A-Zone extension and the Goose zone.
Throughout the 1980’s through mid-2000’s various operators and prospectors have completed surface geochemical sampling including tills, soils and rock samples. This amounts to roughly 1,200 till samples, over 60,000 soil samples and 4,000 rock samples spread across the large district scale project with concentrations of work around the many showings in the Queensway license group. This work has identified a number of gold in soil or gold in till anomalies that have led to surface gold discoveries or have yet to be explained with follow up exploration. Several locations throughout the project have defined surface float samples containing high grade gold mineralization some of which have led to surface gold occurrences while other locations have not been adequately explored to trace them to source.
Various historical ground geophysical surveys have been conducted throughout the Queensway Project with most of this work concentrated either along the AFZ, JBPDZ or in the region of the Paul’s Pond and Greenwood Pond showings in the GGS claim group. Over 50 different geophysical surveys including VLF, EM, MAG and IP have covered ground-based grids throughout the Queensway Project. Various anomalies have been identified and often limited follow up exploration has occurred.
A significant number of surface trenches have been conducted at the project with over 330 trenches. Many of the historical trenches have targeted soil and till anomalies with only some of these reaching bedrock; often the trenches not reaching bedrock have left both soil and till anomalies unexplained and open for further interpretation and exploration.
In 1994 Gander River Minerals optioned the Knob property including the Knob prospect from Noranda Exploration Co Ltd. Drilling by Gander River Minerals allowed for production of a historical resource estimate of 236,391 tonnes grading 10.26 g/t Au. This historical estimate was published by Gander River Minerals in the technical document titled “Eighth Year Assessment Report Summary of Diamond Drilling Activities Conducted Within Licence No. 4344 The ‘Knob’ Prospect N.T.S. 20/15” authored by Dean Sheppard, 1994 (Geofile 002D_0296).
The data used in the preparation of the historical resource estimate does not meet the current standards of exploration quality assurance and quality control protocols such that it should not be relied upon to produce a current resource estimate for the Knob prospect. Significant additional drilling and data verification would be required to ensure the quality of historic data meets current standards for use in a resource estimate. Additionally, the methods used in the preparation of the resource as a block long section methodology include certain assumptions of geological continuity and grade variography are not adequate to treat this as a current mineral resource estimate.
A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and the issuer is not treating the historical estimate as current mineral resources or mineral reserves.
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Project Geology
The Queensway Project is located within the Exploits subzone of the Dunnage zone and lies just to the west of the Gander River Ultramafic Complex (“GRUC”) fault, which is the Dunnage-Gander zones boundary. See figure below:
Queensway Project – Geological Overview Map
It mostly comprises Cambrian to Silurian meta-sedimentary rocks of the Davidsville group (Williams et al., 1988; Colman-Sadd et al., 1990; Valverde-Vaquero et al., 2006; van Staal, 2007; O’Reilly et al., 2010). The Davidsville group is divided into the Outflow Formation and the Hunt’s Cove Formation. The property south of Gander Lake also includes the boundary between the Davidsville and Indian Island groups. The latter mainly comprises Silurian siliciclastic rocks, intruded by the Mount Peyton Intrusive suite.
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
There are over 100 gold showings/occurrences on and around the Queensway Project however the most notable mineralized zones in the Queensway Project are the JBPDZ which includes the H-Pond, Pocket Pond, Glass, Logan and Lachlan showings and the AFZ which includes the Dome, Little, Knob, Letha, Lotto, Grouse, Road, Bullet, Trench 26, Cokes, Powerline, Keats and Bowater showings. A number of gold mineralized occurrences also occur within the GGS claim group including the Greenwood Pond, Hornet, North Pauls Pond, Aztec, Goose, Road Gabbro and LBNL showings.
Recent Exploration
NFG’s 2020 Drill Campaign
On August 17, 2020 the Company announced it had initiated a 100,000m HQ size diamond drilling program at the Queensway Project. This program is anticipated to be conducted over a 12-15 month period into 2021. Drilling started at the Little-Powerline trend and would progress through various targets within the Northern Queensway property including an initial 12,000m planned for the Keats Zone.
Queensway North – Plan Map of Initial 2020 Drilling Grid Lines/Zones
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
2020 Trenching Campaign
NFG began surface excavation of a number of targets starting in July 2020 and to date has completed 16 trenches of varying size; all of the excavation to date has occurred along the Appleton Fault Zone and includes trenching of the Little Zone, Hornet Zone, Road Zone as well as the discovery of two new zones (Regular Zone and Zone 36). Zone 36 is located 2.5 Km north-west of the Keats Zone and has been exposed along 120m of strike length and shows mineralization of Arsenopyrite, Pyrite, Chalcopyrite, Boulangerite and Visible Gold.
2020 Field Program
Starting in June 2020, the Company initiated a field recognisance program within the Queensway South mineral licenses. The objective of this program is to conduct geological mapping, structural analysis, prospecting and the collection of C horizon till samples to be processed for gold grain analysis.
Initial results from the 2020 field program detailed till survey were released on August 27, 2020 where the company had announced it had found a new fertile gold region 45 km south of the current Queensway North drill targets. The newly defined Eastern Pond target is comprised of two areas where recent till results have shown highly anomalous total gold grain counts including a high percentage of pristine gold grains, and yielded several sub-crop samples up to 15.0 g/t Au.
One till sample yielded 216 gold grains, 163 (75%) of them classified as pristine. A second cluster of samples yielded up to 155 gold grains with 127 (82%) of these classified as pristine. The pristine morphology of these grains indicates that they have not travelled far from their bedrock source
To date the Eastern Pond target is defined by sub-crop and till sample results over an approximately 4 km of strike length (see Figures below).
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Queensway South Project: Location of the newly defined Eastern Pond Anomaly at Queensway South
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Queensway South Project: Eastern Pond anomaly and preliminary till results
Sample ID | Easting | Northing | Total Gold Grains | Pristine Gold Grains | ||||||||||||||
41674 | 629784 | 5382499 | 216 | 163 | ||||||||||||||
41656 | 630332 | 5381175 | 155 | 127 |
Queensway South Project: Eastern Pond target till samples
Field crews have been remobilized to the Eastern Pond area to conduct follow up work including prospecting, geological mapping and the collection of additional till samples to further vector the Company’s exploration towards bedrock sources. It is anticipated that trenching of the Eastern Pond Target will occur in late fall to expose subcrop mineralization located at the target.
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
NFG’s 2020 Drill Campaign
The company announced on August 17, 2020 that it had initiated a 100,000m diamond drilling program at its Queensway Gold Project. The drilling program is designed to test multiple exploration targets and zones along the 5 km of the Appleton Fault Zone and JBP Fault Zone.
Drilling to date has focussed along the Appleton Fault zone with four drilling rigs active at the project as of the date of this MD&A. Approximately 8,000m of drilling has been completed in 40 holes targeting the Little, Keats and Lotto zones.
Drilling assay highlights released to date include a new high-grade discovery at the Lotto Zone announced on October 2, 2020. Drill hole NFGC-20-17 intersected Two separate near surface, intervals of intense quartz veining with significant sulfide and visible gold returning assays of 41.2 g/t Au over 4.75m starting at 35 m down hole depth and 25.4 g/t Au over 5.15 m starting at 57 m down hole depth (see Figure below). The orientation of these veins is uncertain and true widths may vary from 50% to 80%.
Similar to the high-grade gold mineralization at Keats, the high-grade gold mineralization at Lotto displays characteristics suggestive of an epizonal orogenic depositional environment.
Queensway Project – Plan Map of 2020 Drilling Program (Lotto Zone – Oct 2, 2020)
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
The location and assay intervals reported from NFGC-20-17 are shown in the table below:
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | ||||||||||||||
NFGC-20-17 | 35.25 | 40.00 | 4.75 | 41.2 | |||||||||||||||
Including | 35.25 | 36.9 | 1.65 | 108.7 | Lotto | ||||||||||||||
NFGC-20-17 | 56.95 | 70.75 | 13.8 | 10.1 | |||||||||||||||
Including | 5695 | 62.1 | 5.15 | 25.4 | Lotto | ||||||||||||||
Including | 61.0 | 61.8 | 0.8 | 138.3 |
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | ||||||||||||||
NFGC-20-17 | 302 | -46 | 354 | 658931 | 5428890 |
Along with drilling at the Lotto Zone the company has focussed its drilling efforts at the Keats zone where a discovery hole in late 2019 (NFGC-19-01) was drilled. The company has planned to conduct an initial 12,000m of drilling at the Keats zone using two parallel exploration strategies. Initially the company has and plans to continue 10m step outs both along strike and dip of the discovery hole NFGC-19-01 and in parallel to these planned holes the company is also conducting a 50m grid drilling program along roughly 950m of strike length and to vertical depths of 500m to test the geology and gold potential of the controlling geological structure, the Keats-Baseline fault. Three drills are currently active at the Keats Zone and one drill is active at the Lotto zone.
Initial assay results from five drill holes at the Keats zones have been released with four holes released on Oct 27, 2020 which were drilled as the first 10m step-outs from drill hole NFGC-19-01 and one additional hole was released on Nov 16, 2020 as a 60m step-out along strike of drill hole NFGC-19-01.
Assay results highlight from the first four holes drilled as 10m step-out from drill hole NFGC-19-01 (NFGC-20- 18,19,21,23) are shown in the table below.
Logging of the core drilled to date along with assay results received so far indicate that the veining and high-grade gold mineralization demonstrates good continuity along strike and down dip.
Further to the drilled 10m pattern around NFGC-19-01, the company is actively drilling a roughly 50m grid pattern along the Keats-Baseline fault zone to better assess the broader geological and gold mineralization potential of the primary Keats zone.
The first hole released to date from the 50m grid drilling program NFGC-20-26 was successful in intersecting a significant mineralized interval within the Keats Baseline fault roughly 60m south of and on strike of NFGC-19-01. Assay results from NFGC-20-26 are shown in the table below.
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Hole No. | From (m) | To (m) | Interval (m) | Au (g/t) | Zone | |||||||||||||
NFGC-20-18 | 92.0 | 99.9 | 7.9 | 24.1 | ||||||||||||||
Incl. | 98.9 | 99.9 | 1.0 | 167.6 | Keats Main | |||||||||||||
NFGC-20-19 | 89.65 | 108.5 | 18.85 | 31.2 | ||||||||||||||
Incl. | 96.0 | 107.25 | 11.25 | 50.7 | Keats Main | |||||||||||||
Incl. | 102.0 | 107.25 | 5.25 | 100.6 | ||||||||||||||
NFGC-20-19 | 151.0 | 152.9 | 1.90 | 4.4 | Keats FW | |||||||||||||
NFGC-20-21 | 101.65 | 120.0 | 18.35 | 15.8 | ||||||||||||||
Incl. | 109.55 | 118.5 | 8.95 | 29.4 | Keats Main | |||||||||||||
NFGC-20-23 | 82.65 | 124.0 | 41.35 | 22.3 | ||||||||||||||
Incl. | 93.65 | 108.2 | 14.55 | 57.4 | ||||||||||||||
93.65 | 94.0 | 0.35 | 1120 | Keats Main | ||||||||||||||
101.8 | 104.4 | 2.60 | 140.8 | |||||||||||||||
Incl. | 118.85 | 123.4 | 4.55 | 15.2 | ||||||||||||||
NFGC-20-26 | 44.7 | 73.85 | 29.15 | 11.8 | ||||||||||||||
Incl. | 67.0 | 73.85 | 6.85 | 44.5 | Keats Main | |||||||||||||
Incl. | 73.5 | 73.85 | 0.35 | 824 | ||||||||||||||
NFGC-20-26 | 194.4 | 197.6 | 3.20 | 1.09 | Keats FW | |||||||||||||
NFGC-20-26 | 219.7 | 222.3 | 2.60 | 2.02 | Keats FW |
The orientation of the veining is uncertain and true widths are estimated to be in the 70% to 80% range
A plan map and coordinate table for drill holes NFGC-20-18,19,21,23,26 are shown below:
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-18 | 300 | -45 | 278 | 658223 | 5427467 | |||||||||||||||
NFGC-20-19 | 300 | -45 | 154 | 658232 | 5427462 | |||||||||||||||
NFGC-20-21 | 300 | -45 | 190 | 658236 | 5427449 | |||||||||||||||
NFGC-20-23 | 300 | -45 | 185 | 658240 | 5427458 | |||||||||||||||
NFGC-20-26 | 300 | -45 | 269 | 658151 | 5427444 |
- 14 -
Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Queensway Project – Plan Map of 2020 Drilling Program (Keats Zone - Nov 16, 2020)
QA/QC
True widths of the new exploration intercepts reported in this press release have yet to be determined, but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cutoff of 1.0 g/t Au. All HQ split core assays reported were obtained by either whole sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia. The whole sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
- 15 -
Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101.
NFG’s 2019 Drill Campaign
The 2019 diamond drilling program at the AFZ comprised 586 metres of HQ diameter core in four holes completed between October 28, 2019 and November 17, 2019. Holes NFGC-19-01 and NFGC-19-02 were drilled to target the Keats Zone where historical drilling and trenching suggested gold mineralization was to occur. Holes NFGC-19-03 and NFGC-19-04 were drilled from a single setup at the Dome Showing to further evaluate known gold mineralization. The 2019 drill program was successful in identifying gold mineralization along the AFZ at both the Keats and Dome showings.
Drilling along the JBP Fault Zone in 2019 was comprised of six holes totalling 1,400m between November 17, 2019 and December 14, 2019 targeting the Glass zone and extensions of the H-Pond zone. Holes NFGC-19-05, 07, 08, 09, 10 targeted mineralization along both the Glass and H-Pond corridors while NFGC-19-06 only tested the Glass vein system, drill hole locations are show in the figure and table below:
- 16 -
Management’s Discussion and Analysis
For the three and nine months ended September 30, 2020 and 2019
Queensway Project – Plan Map of 2019 Drilling Program
- 17 -
Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
BHID | UTME(NAD27) | UTMN (NAD27) | ZPT | DIP | BRG | LENGTH (m) | |||||||||||||||||||
NFGC-19-01 | 658148 | 5427245 | 93 | -43.6 | 302.19 | 199 | |||||||||||||||||||
NFGC-19-02 | 658035 | 5427130 | 90 | -43.5 | 299.69 | 270 | |||||||||||||||||||
NFGC-19-03 | 658632 | 5428486 | 85 | -44.7 | 0.39 | 64 | |||||||||||||||||||
NFGC-19-04 | 658632 | 5428486 | 85 | -63.5 | 0.59 | 52 | |||||||||||||||||||
NFGC-19-05 | 664842.5 | 5430309 | 85 | -44.7 | 302.69 | 274 | |||||||||||||||||||
NFGC-19-06 | 664867 | 5430352.5 | 85 | -44.1 | 302.19 | 94.5 | |||||||||||||||||||
NFGC-19-07 | 664891 | 5430400 | 85 | -44.6 | 300.99 | 248 | |||||||||||||||||||
NFGC-19-08 | 664823 | 5430200 | 85 | -44.2 | 299.39 | 262 | |||||||||||||||||||
NFGC-19-09 | 665093 | 5430660 | 85 | -44.2 | 300.89 | 299.6 | |||||||||||||||||||
NFGC-19-10 | 665176 | 5430750 | 85 | -43.7 | 303.99 | 222.2 | |||||||||||||||||||
TOTAL | 1985.3 |
New Valley Company Ltd. Of Springdale, NL carried out the diamond drilling using an EF-50 skid rig equipped to drill HQ size core. Drill sites and moves were made possible with a dozer. The drill crew placed all core in labelled wooden boxes which were collected daily by New Found Gold personnel. All collars were marked with pickets and foresighted by NFG personnel using GPS receivers. All completed holes were plugged and cemented and finally marked with a metal post to identify the hole and act as a hazard warning. Downhole dip data was collected using the Reflex EZ Shot by the drill crews near the beginning and end of each hole with a 50m spacing between tests where possible. Core was also oriented using the Reflex HQ ACT-III system.
All completed diamond drill holes were plugged and cemented with the casing being left. A metal flag post was attached to the collar and labelled to identify each drill hole. Downhole hole orientation data was obtained by drill crews using the Reflex EZ-Gyro Single Shot. Where possible core was also orientated using the Reflex HQ ACT-III system.
All core was logged by NFG personnel in a core logging facility at Gander, NL. Samples were sawn in half and sent for sample preparation to ALS Minerals in either Timmins, ON or Moncton, NB with analysis being done in Vancouver, BC. Where visible gold was noted, or high values of gold suspected, samples were analysed using the pulp metallic method otherwise a standard Au + 41 element ICP method was used. The insertion of a blank or standard occurred every 10 samples switching between the blank and standard reference material using 3 different standards, OREAS 218, 224 and 255. The blank consisted of an un-mineralized red sandstone from a roadcut near Botwood, NL.
The samples with the highest potential for gold were assayed using the ALS Mineral multi analysis screen, gravimetric and ore grade analysis, methods include; Au-AA26 Ore Grade Au 50g FA AA Finish, Au-GRA22 Au 50g FA-GRAV Finish, and Au-SCR24C Au Screen FA Double minus 50g 2-3 Kg.
The 2019 diamond drilling program at the AFZ was designed to further evaluate the gold mineralization and quartz veining along the east side of the Appleton Fault Trend specifically at the Keats and the Dome Showings. The results of this drilling will be used in conjunction with historical data to plan future exploration along the Appleton trend. Drilling along the JBP Fault Zone in 2019 was comprised of six holes totalling 1,400m targeting the Glass zone and extensions of the H-Pond zone. Holes NFGC-19-05, 07, 08, 09, 10 targeted mineralization along both the Glass and H-Pond corridors while NFGC-19-06 only tested the Glass vein system.
- 18 -
Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
NFGC-19-01 was planned to target 50 m vertically below historic drill hole LG08-48 at the Keats Zone. A significant gold mineralized zone was intercepted from 96 to 115 m grading 92.86g/t Au over 19.0 m including 285.2 g/t Au over 6.0 m containing considerable visible gold and wall rock sulphidation consisting of pyrite and lesser arsenopyrite. Within the quartz vein material traces of arsenopyrite, chalcopyrite and boulangerite were found. The zone was hosted in dark grey shale belonging to the Davidsville group and the quartz zone is spatially associated with a number of fault structures including one gouge zone up to 60cm in width. This is believed to be a second order structure to the Appleton fault and was intersected by all of the historic diamond drilling at the Keats zone but previously undocumented.
The vein intersection is the extension of the zone encountered in drill hole LG08-48 (50m above) and believed to be the extension of surface mineralization found in historical United Carina trench #3.
The quartz vein was notably vuggy and exhibiting textures associated with boiling events in epithermal gold zones. Possibly due to a flashing event within the larger mesothermal Appleton fault zone system.
A second mineralized fault structure was intersected at 177.5m with associated gold mineralization in lesser quartz stockwork from 177.5 to 180.0m depth grading 3.38g/t Au over 2.5m. Both fault zones intersected in the hole are believed to be secondary to the regional Appleton fault zone. Drilling did not continue in order to intersect the primary fault.
NFGC-19-02 also targeted the Keats zone located 160m south of NFGC-19-01 and targeting 50m vertically below historic drill hole LG99-12. This hole also intersected the second order fault structure found in NFGC-19-01 with associated narrower quartz veinlets and wall rock sulphidation (pyrite and arsenopyrite) and visible gold in quartz. The composite grade of the zone was 1.54 g/t Au over 12.0 m with one meter grading 5.45 g/t Au and containing visible gold. Exhibiting a similar width and structural control to NFGC-19-01 the results of this hole are promising as the Keats system is showing robust width and a known length up to 300m.
- 19 -
Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Queensway Project – Plan Map of 2019 Drilling Program at the Keats Zone
NFGC-19-03 targeted the Dome showing main vein where historical drilling had previously intersected high grade gold mineralization. The main vein was intersected at a depth of 20.9 to 22.0 m with a second vein from 24.9 to 25.5 m and gave an overall composite grade of 16.52 g/t Au over 6.1m anchored by 162.5 g/t Au over 0.6 m.
NFGC-19-04 also targeted the Dome showing main vein and from the same setup but drilling at -60 degrees below NFGC-19-03; this hole intersected the main Dome vein from 28.3 to 29.7 m noting visible gold on the margin of the vein. This gave a composite average of 1.14 g/t Au over 8.0 m including one meter grading 4.61 g/t Au.
At the Dome showing visible gold mineralization appears to be primary confined to the margin of the vein. Of particular note was the apparent vuggy nature of the quartz and similarity to the veining intersected at the Keats zone suggestive that the emplacement mechanisms were similar.
NFGC-19-05, 06, 07, 08 were all drilled to target the Glass vein system which was discovered in 2017 and excavated by NFG in 2017 and again in 2018. All four holes were targeted to intersect the Glass vein system at shallow depths (<25m). The Glass vein system is believed to be a parallel vein system to the H-Pond zone approximately 100m to the west and drill holes NFGC-19-05, 07 and 08 were extended to intersect both vein systems.
The Glass vein array was noted in holes NFGC-19-05, 06 and 08 but gave poor gold results and visible mineralization was very limited.
- 20 -
Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
NFGC-19-05 was successfully intersected a broad vein intercept within the H-Pond zone from 231.0 to 242.0m grading 2.35 g/t over 11.0 m including 6.73 g/t Au over 3.0 m as well as a second vein intersection from 268.0 to 269.0m grading 2.75 g/t Au over 1.0 m. This intercept has extended the known mineralized extents of the H-Pond zone by roughly 150 m along strike. The vein system was marked by significant iron-carbonate alteration zone. This is also one of the deepest intersections of the H-Pond zone to date.
NFGC-19-06, 07 and 08 failed to intersect any significant mineralization.
NFGC-19-09, 10 were both drilled along strike of the H-Pond and Glass vein systems along the JBPDZ and drilling in an area with very high gold in till results (1744 zone) and a significant number of visible gold bearing float samples which were interpreted to be derived from the JBPDZ. Both holes were successful in intersecting new vein systems as shown in figures below. The broad quartz intercept in NFGC-19-09 shows a nearly identical alteration and sulphide pattern to the intercept in NFGC-19-05 from the H-Pond zone. The intercept in NFGC-19-09 is believed to be an extension of the H-Pond by roughly 500m along strike. NFGC-19-09 intersected 4.39 g/t Au over 9.0 metres including 17.45 g/t Au over 2.0 metres from the well altered vein set thought to be the extension of the H-Pond zone. An intercept near the top of NFGC-19-10 with unknown correlation to NFGC-19-09 intersected 1.07 g/t Au over 4.0 metres and several lesser zones.
The 2019 drilling campaign was successful in identifying auriferous quartz veined zones of sufficient size, tenor and textural characteristics to warrant additional exploration. Based on the drill results to date, the Appleton Fault Trend has potential to host an Epizonal style Orogenic gold deposit with mineralization styles similar to those of the Fosterville Mine in Australia. The occurrence of vuggy veins with free gold and a blend of antimony mineral species including stibnite and boulangerite suggest a flash boiling event on a near mesothermal orogenic gold system such as seen at Fosterville.
Significant composite gold assay results are shown in the table below; the true widths of the mineralization in the below table is not known but estimated to be from 60-80% of the down hole composite width based on intersection angles and correlation to historical drilling.
- 21 -
Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
2019 Diamond Drill Hole Significant Gold Composite Intercepts
Hole ID | From | To | Length(m) | Au (g/t) | Zone | |||||||||||||||
NFGC-19-01 | 83.0 | 83.7 | 0.7 | 2.46 | Keats | |||||||||||||||
NFGC-19-01 | 95.0 | 115.5 | 20.5 | 86.17 | ||||||||||||||||
incl | 96.0 | 115.0 | 19.0 | 92.86 | Keats | |||||||||||||||
incl | 105.0 | 111.0 | 6.0 | 285.20 | ||||||||||||||||
NFGC-19-01 | 117.5 | 118.5 | 1.0 | 1.56 | Keats | |||||||||||||||
NFGC-19-01 | 146.5 | 147.5 | 1.0 | 1.30 | Keats | |||||||||||||||
NFGC-19-01 | 177.5 | 180.0 | 2.5 | 3.38 | Keats | |||||||||||||||
NFGC-19-02 | 142.0 | 154.0 | 12.0 | 1.54 | ||||||||||||||||
incl | 142.0 | 143.0 | 1.0 | 5.45 | Keats | |||||||||||||||
NFGC-19-02 | 253.0 | 254.0 | 1.0 | 1.07 | Keats | |||||||||||||||
NFGC-19-03 | 20.4 | 26.5 | 6.1 | 16.52 | ||||||||||||||||
incl | 20.9 | 21.5 | 0.6 | 162.50 | Dome | |||||||||||||||
NFGC-19-04 | 26.0 | 34.0 | 8.0 | 1.14 | Dome | |||||||||||||||
incl | 29.0 | 30.0 | 1.0 | 4.61 | ||||||||||||||||
NFGC-19-05 | 231.0 | 242.0 | 11.0 | 2.35 | H-Pond | |||||||||||||||
incl | 231.0 | 234.0 | 3.0 | 6.73 | ||||||||||||||||
NFGC-19-05 | 268.0 | 269.0 | 1.0 | 2.75 | H-Pond | |||||||||||||||
NFGC-19-06 | NSV | |||||||||||||||||||
NFGC-19-07 | NSV | |||||||||||||||||||
NFGC-19-08 | NSV | |||||||||||||||||||
NFGC-19-09 | 15.5 | 16.5 | 1.0 | 1.65 | H-Pond | |||||||||||||||
NFGC-19-09 | 120.0 | 122.0 | 2.0 | 1.13 | H-Pond | |||||||||||||||
NFGC-19-09 | 162.0 | 171.0 | 9.0 | 4.39 | H-Pond | |||||||||||||||
incl | 165.0 | 167.0 | 2.0 | 17.45 | H-Pond | |||||||||||||||
NFGC-19-10 | 22.0 | 26.0 | 4.0 | 1.07 | H-Pond | |||||||||||||||
NFGC-19-10 | 66.0 | 68.0 | 2.0 | 1.59 | H-Pond | |||||||||||||||
NFGC-19-10 | 180.0 | 185.0 | 5.0 | 0.62 | H-Pond |
2020 Airborne Gravity Survey
In March of 2020, NFG contracted CGG Canada Services Ltd. based in Ottawa, Ontario to conduct a 1,705 km HeliFALCON Airborne Gravity Gradiometer and Aeromagnetic Survey over the licenses in the north part of the Queensway Project. This highly advanced gravity and magnetic system has been deployed by the Company to further aid in the definition of geological and structural controls of mineralization.
After post processing the final data files were received in late April 2020. This data is currently under interpretation by a contract geophysicist to better define structures, geology and potential mineral target areas.
- 22 -
Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Queensway Project – Vertical Gravity GD Plan View
Queensway Project – Vertical Gravity Gradient GDD Plan View
- 23 -
Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Lucky Strike Project, Ontario
The Lucky Strike Project is located 10 km north of Larder Lake, Ontario and covers favourable and underexplored structural corridors associated with the Larder Cadillac Deformation Zone.
The project is comprised of 639 single cell un-patented mining claims.
Land History
The current mineral cells comprising the Lucky Strike Project were acquired from the completion of two option agreements, one purchase agreement and online staking.
On May 27th, 2016 the Company optioned the primary Lucky Strike Project property from Ashley Gold Mines Ltd. which was further amended in May 2019 and fully executed in November 2019. Under the terms of the agreement the Company paid $115,000 and issued common shares equivalent to $80,000. The option agreement included an underlying royalty payable to Wallbridge mining covers some of the claims with most of the claims carrying no NSR.
On July 26th, 2017 the Company optioned the Vallillee extension claims west of the primary Lucky Strike land package and this option agreement was fully executed July 2018. Under the terms of the agreement the Company paid $40,000 and issued a 2% NSR in favour of the optionors.
In April 2020, the Company staked an additional 70 unpatented mining cells on the west side of the Lucky Strike Project. These lands carry no NSR.
On May 7th, 2020, the Company completed a claim purchase agreement with Big Bar Gold to purchase 21 unpatented mining claim cells adjacent to the east of the Lucky Strike Project. Under the terms of the agreement the Company paid $25,000. The claims carry no NSR.
Lucky Strike Project – Project Location map, fault systems and Adjacent Projects
- 24 -
Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Environmental and Exploration Permitting
The Company was issued an exploration plan by the Ontario MNDM on July 13, 2017, to cover exploration activities including mechanized trenching and mechanized diamond drilling and this permit is set to expire in July 2020. Application was made in May 2020 for new permits to cover mechanized trenching, mechanized diamond drilling and approval is pending.
Project Geology
The Lucky Strike Project is covered by the Lower Blake River Group which are dominated by intermediate to mafic, massive volcanic flows. The volcanic flows have been intruded by diorite-gabbro intrusions which are up to 7 kilometres by 1.5 kilometre in size. In the Walsh-FP area a syenite-syenite porphyry intrudes the mafic-intermediate volcanics and hosts the gold-bearing quartz-ankerite veins of the Walsh Mine. The long axis of this syenite intrusion strikes approximately north-south and extends for 3.5 kilometres on the property and another 3 kilometres south of the property and is generally 0.5 kilometres wide. Two major regional faults cross the property, the Misema-Misty Lake Fault and the Mulven Fault, striking roughly in a northeast-southwest direction. These structures have been speculated as being as a continuation of the Kirkland Main Break Fault system which hosted the seven historic gold mines of the Kirkland Lake Gold camp. The Victoria Creek Deformation Zone, possibly a splay off the Misema-Misty Lake Fault and a control on the Victoria Creek and Upper Beaver Mines, lies just south of the property with splay structures extending onto the property.
The schedules below summarize the carrying costs of acquisition and exploration costs incurred to date for each exploration and evaluation asset that the Company is continuing to explore as at September 30, 2020 and December 31, 2019:
Newfoundland | ||||||||||||||||
Queensway | Other | Ontario | Total | |||||||||||||
Nine months ended September 30, 2020 | $ | $ | $ | $ | ||||||||||||
Exploration and evaluation assets | ||||||||||||||||
Balance as at December 31, 2019 | 658,700 | 16,500 | 425,516 | 1,100,716 | ||||||||||||
Additions | ||||||||||||||||
Acquisition costs | 75,000 | - | 25,000 | 100,000 | ||||||||||||
Balance as at September 30, 2020 | 733,700 | 16,500 | 450,516 | 1,200,716 | ||||||||||||
Exploration and evaluation expenditures | ||||||||||||||||
Cumulative exploration expense - | ||||||||||||||||
December 31, 2019 | 2,542,344 | - | 837,133 | 3,379,477 | ||||||||||||
Assays | 166,287 | 414 | 36,980 | 203,681 | ||||||||||||
Drilling | 623,351 | - | 120,773 | 744,124 | ||||||||||||
Geochemistry | - | - | 5,330 | 5,330 | ||||||||||||
Geophysics | 692,424 | - | - | 692,424 | ||||||||||||
Office | 21,909 | - | 629 | 22,538 | ||||||||||||
Property taxes, mining leases and rent | 34,120 | - | 2,800 | 36,920 | ||||||||||||
Salaries & consulting | 844,736 | 8,300 | 106,010 | 959,046 | ||||||||||||
Supplies & equipment | 527,773 | - | 79,953 | 607,726 | ||||||||||||
Travel | 144,416 | - | 69 | 144,485 | ||||||||||||
Trenching | 142,070 | - | 31,865 | 173,935 | ||||||||||||
Exploration cost recovery | (30,680 | ) | - | - | (30,680 | ) | ||||||||||
3,166,406 | 8,714 | 384,409 | 3,559,529 | |||||||||||||
Cumulative exploration expense –September 30, 2020 | 5,708,750 | 8,714 | 1,221,542 | 6,939,006 |
- 25 -
Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Newfoundland | ||||||||||||||||
Queensway | Other | Ontario | Total | |||||||||||||
Nine months ended September 30, 2019 | $ | $ | $ | $ | ||||||||||||
Exploration and evaluation assets | ||||||||||||||||
Balance as at December 31, 2018 | 276,330 | 107,835 | 293,516 | 677,681 | ||||||||||||
Additions | ||||||||||||||||
Acquisition costs | 132,370 | - | 62,000 | 194,370 | ||||||||||||
Impairment of exploration and evaluation assets | - | (45,000 | ) | - | (45,000 | ) | ||||||||||
Balance as at September 30, 2019 | 408,700 | 62,835 | 355,516 | 827,051 | ||||||||||||
Exploration and evaluation expenditures | ||||||||||||||||
Cumulative exploration expense - December 31, 2018 | 1,890,601 | - | 831,337 | 2,721,938 | ||||||||||||
Assays | 6,648 | - | 1,502 | 8,150 | ||||||||||||
Geophysics | 136,969 | - | - | 136,969 | ||||||||||||
Property taxes, mining leases and rent | 34,700 | - | 3,512 | 38,212 | ||||||||||||
Salaries & consulting | 81,867 | - | - | 81,867 | ||||||||||||
Supplies & equipment | 47,703 | - | - | 47,703 | ||||||||||||
Travel & accommodations | 4,360 | - | - | 4,360 | ||||||||||||
Exploration cost recovery | (36,821 | ) | - | - | (36,821 | ) | ||||||||||
275,426 | - | 5,014 | 280,440 | |||||||||||||
Cumulative exploration expense – September 30, 2019 | 2,166,027 | - | 836,351 | 3,002,378 |
Overall Performance and Results of Operations
Total assets increased to $75,716,327 at September 30, 2020, from $9,355,036 at December 31, 2019, primarily as a result of an increase in investments of $23,899,205 which were received for a private placement financing completed in March 2020 and an increase in cash of $40,525,362 during the nine months ended September 30, 2020. The most significant assets at September 30, 2020, were cash of $47,862,000 (December 31, 2019: $7,336,638), investments of $24,014,142 (December 31, 2019: $114,937), exploration and evaluation assets of $1,200,716 (December 31, 2019: $1,100,716), prepaid expenses and deposits of $1,352,869 (December 31, 2019: $436,436), and property, plant and equipment of $845,420 (December 31, 2019: $29,149). Cash increased by $40,525,362 during the nine months ended September 30, 2020 as a result of an initial public offering completed in August 2020 for gross proceeds of $31,395,000, private placement financings completed in June 2020 for gross proceeds of $7,118,196, and proceeds received from the exercises of warrants of $12,000,000 and stock options of $959,500, partially offset by cash used in operating activities of $6,911,648 and share issuance costs of $3,032,606 in connection with the initial public offering and private placement financings.
Nine months ended September 30, 2020 and 2019
During the nine months ended September 30, 2020, loss from operating activities increased by $13,962,471 to $14,776,187 compared to $813,716 for the nine months ended September 30, 2019. The increase in loss from operating activities is largely due to:
- | An increase of $3,279,089 in exploration and evaluation expenditures. Exploration and evaluation expenditures were $3,559,529 for the nine months ended September 30, 2020 compared to $280,440 for the nine months ended September 30, 2019. The Company commenced its 100,000 meter drilling program and completed a 1,705 km airborne gravity survey at its Queensway Project, and incurred higher salaries and consulting fees, and supplies & equipment costs due to an increase in exploration activity at its Queensway Project during the nine months ended September 30, 2020 compared to machine learning analysis of geophysical data at its Queensway Project and lower expenditures incurred due to less exploration activity during the nine months ended September 30, 2019. |
- 26 -
Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
- | An increase of $8,517,714 in share-based compensation. Share-based compensation was $8,517,714 for the nine months ended September 30, 2020 compared to $Nil for the nine months ended September 30, 2019. A total of 9,225,000 fully vested stock options with a value of $8,517,714 were granted during the nine months ended September 30, 2020 compared to no stock options granted during the nine months ended September 30, 2019. |
- | An increase of $977,965 in salaries and consulting fees. Salaries and consulting fees were $1,466,965 for the nine months ended September 30, 2020 compared to $489,000 for the nine months ended September 30, 2019. The increase is due to increased executive management levels and related compensation paid to key management personnel during the nine months ended September 30, 2020. |
- | An increase of $382,115 in professional fees. Professional fees were $383,613 for the nine months ended September 30, 2020 compared to $1,498 for the nine months ended September 30, 2019. The increase is due to higher legal fees incurred as a result of increased corporate activity and in relation to a proposed transaction to have all of the issued and outstanding shares of the Company acquired by Mexican Gold Mining Corp. The proposed transaction with Mexican Gold Corp. was terminated by mutual agreement during the nine months ended September 30, 2020. |
- | An increase of $599,979 in corporate development and investor relations. Corporate development and investor relations was $599,979 for the nine months ended September 30, 2020 compared to $Nil for the nine months ended September 30, 2019. The Company undertook a greater amount of activities relating to promotion of the Company’s projects during the nine months ended September 30, 2020 compared to no similar activities undertaken during the nine months ended September 30, 2019. |
Other items
For the nine months ended September 30, 2020, other income was $7,746,938 compared to other expenses of $123,732 for the nine months ended September 30, 2019. The $7,870,670 change is largely due to:
- | An increase of $7,121,052 in net change in unrealized gain on investments. Net change in unrealized gain on investments was $7,163,095 for the nine months ended September 30, 2020 compared to $42,043 for the nine months ended September 30, 2019. The increase is due to changes in the fair values of equity investments held at September 30, 2020. |
- | An increase of $587,098 in settlement of flow-through share premium. Settlement of flow-through share premium was $587,098 for the nine months ended September 30, 2020 compared to $Nil for the nine months ended September 30, 2019. The Company incurred $2,134,776 of qualifying Canadian exploration expenses and derecognized $587,098 of its flow-through share premium liability during the nine months ended September 30, 2020. |
The Company recorded loss and comprehensive loss of $7,029,249 or $0.07 basic and diluted loss per share for the nine months ended September 30, 2020 (nine months ended September 30, 2019: $937,448 or $0.02 basic and diluted loss per share).
- 27 -
Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Three months ended September 30, 2020 and 2019
During the three months ended September 30, 2020, loss from operating activities increased by $8,973,623 to $9,060,120 compared to $86,497 for the three months ended September 30, 2019. The increase in loss from operating activities is largely due to:
- | An increase of $2,262,683 in exploration and evaluation expenditures. Exploration and evaluation expenditures were $2,248,817 for the three months ended September 30, 2020 compared to exploration cost recovery of $13,866 for the three months ended September 30, 2019. The Company commenced its 100,000 meter drilling program at its Queensway project and incurred higher salaries and consulting fees, and supplies & equipment costs due to an increase in exploration activity at its Queensway Project during the three months ended September 30, 2020 compared to lower expenditures incurred due to less exploration activity during the three months ended September 30, 2019. |
- | An increase of $5,484,913 in share-based compensation. Share-based compensation was $5,484,913 for the three months ended September 30, 2020 compared to $Nil for the three months ended September 30, 2019. A total of 5,255,000 fully vested stock options with a value of $5,484,913 were granted during the three months ended September 30, 2020 compared to no stock options granted during the three months ended September 30, 2019. |
- | An increase of $444,544 in corporate development and investor relations. Corporate development and investor relations was $444,544 for the three months ended September 30, 2020 compared to $Nil for the three months ended September 30, 2019. The Company undertook a greater amount of activities relating to promotion of the Company’s projects during the three months ended September 30, 2020 compared to no similar activities undertaken during the three months ended September 30, 2019. |
Other items
For the three months ended September 30, 2020, other expenses was $2,050,048 compared to other income of $1,475. The $2,051,523 change is largely due to:
- | An increase of $2,533,769 in net change in unrealized loss on investments. Net change in unrealized loss on investments was $2,532,310 for the three months ended September 30, 2020 compared to $1,459 in unrealized gain on investments for the three months ended September 30, 2019. The increase is due to changes in the fair values of equity investments held at September 30, 2020. |
- | An increase of $485,981 in settlement of flow-through share premium. Settlement of flow-through share premium was $485,981 for the three months ended September 30, 2020 compared to $Nil for the three months ended September 30, 2019. The Company incurred $1,483,535 of qualifying Canadian exploration expenses and derecognized $485,981 of its flow-through share premium liability during the three months ended September 30, 2020. |
The Company recorded loss and comprehensive loss of $11,110,168 or $0.09 basic and diluted loss per share for the three months ended September 30, 2020 (three months ended September 30, 2019: $85,022 or $0.00 basic and diluted loss per share).
- 28 -
Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Summary of Quarterly Results
2020 | 2019 | 2018 | ||||||||||||||||||||||||||||||
Sep. 30 | Jun. 30 | Mar. 31 | Dec. 31 | Sep. 30 | Jun. 30 | Mar. 31 | Dec. 31 | |||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Revenues | - | - | - | - | - | - | - | |||||||||||||||||||||||||
Income (loss) and comprehensive income (loss) for the period | (11,110,168 | )(2) | 10,687,381 | (3) | (6,606,462 | )(4) | (3,082,583 | )(5) | (85,022 | )(6) | (355,709 | )(7) | (496,717 | )(8) | (1,202,531 | ) | ||||||||||||||||
Earnings (loss) per Common Share Basic(1) | (0.09 | ) | 0.11 | (0.08 | ) | (0.05 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | (0.02 | ) | |||||||||||||||||
Earnings (loss) per Common Share Diluted(1) | (0.09 | ) | 0.09 | (0.08 | ) | (0.05 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | (0.02 | ) |
(1) | Per share amounts are rounded to the nearest cent, therefore aggregating quarterly amounts may not reconcile to year-to- date per share amounts. |
(2) | Increase of loss and comprehensive loss from prior quarter primarily driven by an increase in net change in unrealized losses on investments of $17,431,256, share-based compensation of $2,452,112, exploration and evaluation expenditures of $1,666,095, salaries and consulting fees of $371,083, and corporate development and investor relations of $289,109, partially offset by amortization of flow-through premium liability of $384,864. |
(3) | Decrease from prior quarter primarily driven by an increase in net change in unrealized gains on investments of $20,102,487, amortization of flow-through premium liability of $101,117, and a decrease in exploration and evaluation expenditures of $145,268, partially offset by an increase in share-based compensation of $3,032,801. |
(4) | Increase from prior quarter primarily driven by increases in professional fees of $104,545, exploration and evaluation expenditures of $350,891 and net change in unrealized losses on investments of $5,279,853, partially offset by a decrease in share-based compensation of $2,130,528. |
(5) | Increase from prior quarter primarily driven by increases in salaries and consulting fees of $407,399, share-based compensation of $2,130,528, professional fees of $71,652, exploration and evaluation expenditures of $390,984 and impairment of exploration and evaluation assets of $46,335 partially offset by an increase in net change in unrealized gain on investments of $74,854. |
(6) | Decrease from prior quarter primarily driven by decrease in salaries and consulting fees of $142,500, exploration and evaluation expenditures of $68,678 and impairment of exploration and evaluation assets of $45,000. |
(7) | Decrease from prior quarter primarily driven by a decrease in exploration and evaluation expenditures of $184,723. |
(8) | Decrease from prior quarter primarily driven by decreases in share-based compensation of $122,361, exploration and evaluation expenditures of $351,942 and impairment of exploration and evaluation assets of $71,755. The Company realized net losses on disposal of investments of $120,734 and net change in unrealized losses on investments of $217,287. |
Liquidity and Capital Resources
As at September 30, 2020, the Company had cash of $47,862,000 to settle current liabilities of $2,047,094.
The Company does not currently have a recurring source of revenue and has historically incurred negative cash flows from operating activities. As at September 30, 2020, the Company has working capital of $73,032,421 consisting primarily of cash, investments, prepaid expenses and deposits and sales taxes recoverable. The Company’s exploration and evaluation assets presently have no proven or probable reserves, and on the basis of information to date, it has not yet determined whether these properties contain economically recoverable resources.
The recoverability of amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production.
The sources of funds currently available to the Company for its acquisition and exploration projects are solely due from equity financing.
The Company does not have bank debt or banking credit facilities in place as at the date of this report.
- 29 -
Management’s Discussion and Analysis
For the three and nine months ended September 30, 2020 and 2019
August 2020 Initial Public Offering – Net Proceeds of $28,488,581
On August 11, 2020, the Company completed an initial public offering of 21,000,000 common shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 14, 2020, its agents exercised their overallotment option in full to offer and sell an additional 3,150,000 common shares for gross proceeds of $4,095,000. The Company paid share issuance costs of $2,906,419 in cash and issued 1,379,768 agents’ warrants with a fair value of $749,067. The agents’ warrants are exercisable into common shares of the Company at $1.30 for 12 months from the date of issue in connection with the initial public offering.
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | September 30, 2020 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Queensway Project work program | 21,735,000 | - | (21,735,000 | ) | ||||||||
General and administrative expenses | 4,505,000 | - | (4,505,000 | ) | ||||||||
Working Capital to fund ongoing operations | 5,155,000 | - | (5,155,000 | ) | ||||||||
Total Uses | 31,395,000 | - | (31,395,000 | ) |
June 2020 Financings – Net Proceeds of $6,992,009
On June 4, 2020, the Company completed a non-brokered private placement financing of 3,994,597 flow-through common shares at a price of $1.50 per common share for gross proceeds of $5,991,896. Finders’ fees paid were $69,394 in cash and the issuance of 64,282 warrants exercisable into common shares of the Company at $1.50 per share for two years from date of issue with a fair value of $25,912. The premium received on the flow-through shares issued was determined to be $1,690,704.
On June 10, 2020, the Company completed a non-brokered private placement financing of 866,385 flow-through common shares at a price of $1.30 per common share for gross proceeds of $1,126,300. Finders’ fees paid were $56,793 in cash and the issuance of 43,582 warrants exercisable into common shares of the Company at $1.30 per share for two years from the date of issue with a fair value of $16,271. The premium received on the flow-through shares issued was determined to be $259,915.
The Company intends to use the proceeds from these financings towards continued exploration work at its Queensway Project.
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | September 30, 2020 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Queensway Project work program | 7,118,196 | 1,695,200 | (5,422,996 | ) | ||||||||
Total Uses | 7,118,196 | 1,695,200 | (5,422,996 | ) |
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Management’s Discussion and Analysis
For the three and nine months ended September 30, 2020 and 2019
Prior Financings
November 2019 Financing – Net Proceeds of $8,000,000
In November 2019, the Company completed a non-brokered private placement of 16,000,000 units at a price of $0.50 per unit for total proceeds of $8,000,000. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase an additional common share at a price of $0.75 per share for three years from the issuance date. The Company intends to use these proceeds towards continued exploration work at its Queensway Project, general and administrative expenditures and working capital purposes to fund ongoing operations.
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | September 30, 2020 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Queensway Project work program | 3,000,000 | 2,489,023 | (510,977 | ) | ||||||||
General and administrative expenses | 2,000,000 | 2,000,000 | - | |||||||||
Working capital to fund ongoing operations | 3,000,000 | 1,190,025 | (1,809,975 | ) | ||||||||
Total Uses | 8,000,000 | 5,679,048 | (2,320,952 | ) |
The Company used $532,231 of the proceeds towards the Company’s diamond drill program, which commenced in November 2019 and comprised 10 holes totalling 1,986 meters drilled, $565,500 was used towards the Company’s airborne gravity survey completed during Q1 2020, and $1,207,495 was used towards exploration expenditures at its Queensway Project. The Company used $2,000,000 of the proceeds for general and administrative expenditures related to consulting and executive management compensation, professional fees, filing fees, travel and office and sundry. The Company used $847,075 of the proceeds for working capital purposes to fund ongoing operations.
July 2019 Financing – Net Proceeds of $500,000
In July 2019, the Company completed a non-brokered private placement of 1,250,000 common shares at a price of $0.40 per share for gross proceeds of $500,000.
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | September 30, 2020 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Working capital to fund ongoing operations | 500,000 | 500,000 | - | |||||||||
Total Uses | 500,000 | 500,000 | - |
The Company used these proceeds for working capital purposes to fund ongoing operations.
June 2019 Financing – Net Proceeds of $ 750,000
In June 2019, the Company completed a non-brokered private placement of 1,875,000 common shares at a price of $0.40 per share for gross proceeds of $750,000.
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | September 30, 2020 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Working capital to fund ongoing operations | 750,000 | 750,000 | - | |||||||||
Total Uses | 750,000 | 750,000 | - |
The Company used these proceeds for working capital purposes to fund ongoing operations.
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Management’s Discussion and Analysis
For the three and nine months ended September 30, 2020 and 2019
Outstanding Share Data
On March 6, 2020, the Company completed a private placement consisting of 15,000,000 common shares in exchange for non-cash consideration of 6,944,444 common shares of Novo Resources Corp. (TSXV: NVO) at a price of $2.41 per share for gross proceeds of $16,736,110.
On June 4, 2020, the Company completed a non-brokered private placement financing of 3,994,597 flow-through common shares at a price of $1.50 per common share for gross proceeds of $5,991,896. Finders’ fees paid were $69,394 in cash and the issuance of 64,282 warrants exercisable into common shares of the Company at $1.50 per share for two years from date of issue with a fair value of $25,912. The premium received on the flow-through shares issued was determined to be $1,690,704.
On June 10, 2020, the Company completed a non-brokered private placement financing of 866,385 flow-through common shares at a price of $1.30 per common share for gross proceeds of $1,126,300. Finders’ fees paid were $56,793 in cash and the issuance of 43,582 warrants exercisable into common shares of the Company at $1.30 per share for two years from the date of issue with a fair value of $16,271. The premium received on the flow-through shares issued was determined to be $259,915.
On August 11, 2020, the Company completed an initial public offering of 21,000,000 common shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 14, 2020, its agents exercised their overallotment option in full to offer and sell an additional 3,150,000 common shares for gross proceeds of $4,095,000. The Company paid share issuance costs of $2,906,419 in cash and issued 1,379,768 agents’ warrants exercisable into common shares of the Company at $1.30 for 12 months from the date of issue in connection with the initial public offering.
During the nine months ended September 30, 2020, 3,115,000 stock options were exercised at a weighted average price of $0.31 per share for gross proceeds of $959,500.
During the nine months ended September 30, 2020, 16,000,000 warrants were exercised at a price of $0.75 for gross proceeds of $12,000,000.
During the nine months ended September 30, 2020, 2,300,000 stock options were granted at an exercise price of $1.00 and an expiry date of April 18, 2025.
During the nine months ended September 30, 2020, 1,670,000 stock options were granted at an exercise price of $1.075 with an expiry date of May 23, 2025.
During the nine months ended September 30, 2020, 5,040,000 stock options were granted at an exercise price of $1.40 and an expiry date of August 11, 2025.
During the nine months ended September 30, 2020, 215,000 stock options were granted at an exercise price of $2.07 and an expiry date of September 3, 2025.
Subsequent to September 30, 2020, 575,000 stock options were exercised at a weighted average price of $0.50 for gross proceeds of $290,000.
Subsequent to September 30, 2020, 554,292 warrants were exercised at a price of $1.30 for gross proceeds of $721,057.
Subsequent to September 30, 2020, 25,000 stock options were granted at an exercise price of $2.15 and an expiry date of October 1, 2025.
As at September 30, 2020, there were 142,050,231 common shares issued and outstanding. As at the date of this report, there were 143,179,523 common shares issued and outstanding
As at September 30, 2020 there were 13,995,000 stock options and 1,487,632 warrants outstanding. As at the date of this report, there were 13,445,000 stock options and 933,340 warrants outstanding.
- 32 -
Management’s Discussion and Analysis
For the three and nine months ended September 30, 2020 and 2019
Related Party Transactions
All transactions with related parties have occurred in the normal course of operations and on terms and conditions that are similar to those of transactions with unrelated parties and are measured at the amount of consideration paid or received. A summary of the Company’s related party transactions with corporations having similar directors and officers, being Goldspot Discoveries Inc., is as follows:
Nine months ended September 30, | ||||||||
2020 | 2019 | |||||||
$ | $ | |||||||
Amounts paid to Goldspot Discoveries Inc. (i) for administration, exploration | ||||||||
and evaluation | 123,815 | 154,500 | ||||||
Options exercised by members of key management | 500,000 | - |
(i) | Goldspot Discoveries Inc. is a related entity having the following common director and officer to the Company: Denis Laviolette, Director and President. |
Key Management Personnel Compensation
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers.
During the nine months ended September 30, 2020, key management personnel compensation totaled $8,776,770 (nine months ended September 30, 2019 - $377,500) comprised of salaries and consulting of $1,349,653 (nine months ended September 30, 2019 - $377,500) paid to the Chief Financial Officer, the Chief Operating Officer and companies controlled by the Company’s Chief Executive Officer and Executive Chairman, and share-based compensation of $7,427,117 (nine months ended September 30, 2019 - $Nil) relating to 8,030,000 (nine months ended September 30, 2019 – Nil) stock options granted to directors and officers of the Company.
As at September 30, 2020, $27,083 is included in accounts payable and accrued liabilities for amounts owed to the Chief Operating Officer (nine months ended September 30, 2019 - $12,242).
On January 26, 2020 the Company entered into a binding letter agreement with Mexican Gold Mining Corp. (“MGMC”) to have all of the issued and outstanding shares of the Company acquired by MGMC. On February 19, 2020, the Company announced that the binding letter agreement was mutually terminated. During the nine months ended September 30, 2020, the Company paid $127,234 to MGMC for legal fees incurred in connection with the transaction which was terminated.
There are no ongoing contractual commitments resulting from these transactions with related parties.
Risks and Uncertainties
The risks and uncertainties described in this section are considered by management to be the most important in the context of the Company’s business. The risks and uncertainties below are not inclusive of all the risks and uncertainties the Company may be subject to and other risks may exist. The Company is in the business of acquiring, exploring and evaluating gold properties. It is exposed to a number of risks and uncertainties that are common to other gold mining companies. The industry is capital intensive at all stages and is subject to variations in commodity prices, market sentiment, inflation and other risks.
- 33 -
Management’s Discussion and Analysis
For the three and nine months ended September 30, 2020 and 2019
Exploration Stage Company
The Company is an exploration stage company and cannot give any assurance that a commercially viable deposit, or “reserve,” exists on any properties for which the Company currently has or may have (through potential future joint venture agreements or acquisitions) an interest. Determination of the existence of a reserve depends on appropriate and sufficient exploration work and the evaluation of legal, economic, and environmental factors. If the Company fails to find a commercially viable deposit on any of its properties, its financial condition and results of operations will be materially adversely affected.
No Mineral Resources
Currently, there are no mineral resources (within the meaning of NI 43-101) on any of the properties in which the Company has an interest and the Company cannot give any assurance that any mineral resources will be identified. If the Company fails to identify any mineral resources on any of its properties, its financial condition and results of operations will be materially adversely affected.
No Mineral Reserves
Currently, there are no mineral reserves (within the meaning of NI 43-101) on any of the properties in which the Company has an interest and the Company cannot give assurance that any mineral reserves will be identified. If the Company fails to identify any mineral reserves on any of its properties, its financial condition and results of operations will be materially adversely affected.
Reliability of Historical Information
The Company has relied on, and the disclosure in the Queensway Technical Report is based, in part, upon, historical data compiled by previous parties involved with the Queensway Project. To the extent that any of such historical data is inaccurate or incomplete, the Company’s exploration plans may be adversely affected.
Mineral Exploration and Development
Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection, the combination of which factors may result in the Company not receiving an adequate return of investment capital.
There is no assurance that the Company’s mineral exploration and any development activities will result in any discoveries of commercial bodies of ore. The long-term profitability of the Company’s operations will in part be directly related to the costs and success of its exploration programs, which may be affected by a number of factors. Substantial expenditures are required to establish reserves through drilling and to develop the mining and processing facilities and infrastructure at any site chosen for mining.
Substantial expenditures are required to establish ore reserves through exploration and drilling, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities and grades to justify commercial operations or that funds required for development can be obtained on a timely basis.
- 34 -
Management’s Discussion and Analysis
For the three and nine months ended September 30, 2020 and 2019
Estimates of reserves, mineral deposits and production costs can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In addition, the grade of ore ultimately mined may differ from that indicated by drilling results. Short term factors relating to reserves, such as the need for orderly development of ore bodies or the processing of new or different grades, may also have an adverse effect on mining operations and on the results of operations. Material changes in ore reserves, grades, stripping ratios or recovery rates may affect the economic viability of any project.
Competition and Mineral Exploration
The mineral exploration industry is intensely competitive in all of its phases and the Company must compete in all aspects of its operations with a substantial number of large established mining companies with greater liquidity, greater access to credit and other financial resources, newer or more efficient equipment, lower cost structures, more effective risk management policies and procedures and/or greater ability than the Company to withstand losses. The Company’s competitors may be able to respond more quickly to new laws or regulations or emerging technologies or devote greater resources to the expansion of their operations, than the Company can. In addition, current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties. Competition could adversely affect the Company’s ability to acquire suitable new mineral properties or prospects for exploration in the future. Competition could also affect the Company’s ability to raise financing to fund the exploration and development of its properties or to hire qualified personnel. The Company may not be able to compete successfully against current and future competitors, and any failure to do so could have a material adverse effect on the Company’s business, financial condition or results of operations.
Additional Funding
The exploration and development of the Company’s mineral properties will require substantial additional capital. When such additional capital is required, the Company will need to pursue various financing transactions or arrangements, including joint venturing of projects, debt financing, equity financing or other means. Additional financing may not be available when needed or, if available, the terms of such financing might not be favorable to the Company and might involve substantial dilution to existing shareholders. The Company may not be successful in locating suitable financing transactions in the time period required or at all. A failure to raise capital when needed would have a material adverse effect on the Company’s business, financial condition and results of operations. Any future issuance of securities to raise required capital will likely be dilutive to existing shareholders. In addition, debt and other debt financing may involve a pledge of assets and may be senior to interests of equity holders. The Company may incur substantial costs in pursuing future capital requirements, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. The ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the gold and copper industries in particular), the Company’s status as a new enterprise with a limited history, the location of the Company’s mineral properties, the price of commodities and/or the loss of key management personnel.
Permits and Government Regulation
The future operations of the Company may require permits from various federal, state, provincial and local governmental authorities and will be governed by laws and regulations governing prospecting, development, mining, production, export, taxes, labour standards, occupational health, waste disposal, land use, environmental protections, mine safety and other matters.
Although Canada has a favorable legal and fiscal regime for exploration and mining, including a relatively simple system for the acquisition of mineral titles and relatively low tax burden, possible future government legislation, policies and controls relating to prospecting, development, production, environmental protection, mining taxes and labour standards could cause additional expense, capital expenditures, restrictions and delays in the activities of the Company, the extent of which cannot be predicted.
- 35 -
Management’s Discussion and Analysis
For the three and nine months ended September 30, 2020 and 2019
Before development and production can commence on any properties, the Company must obtain regulatory and environmental approvals. There is no assurance that such approvals can be obtained on a timely basis or at all. The cost of compliance, with changes in governmental regulations, has the potential to reduce the profitability of operations. The Company is currently in compliance with all material regulations applicable to its exploration activities.
Limited Operating History
The Company has a limited operating history and its mineral properties are exploration stage properties. As such, the Company will be subject to all of the business risks and uncertainties associated with any new business enterprise, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. The current state of the Company’s mineral properties require significant additional expenditures before any cash flow may be generated. Although the Company possesses an experienced management team, there is no assurance that the Company will be successful in achieving a return on shareholders’ investment and the likelihood of success of the Company must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the establishment of any business. There is no assurance that the Company can generate revenues, operate profitably, or provide a return on investment, or that it will successfully implement its plans.
An investment in the Company’s securities carries a high degree of risk and should be considered speculative by purchasers. There is no assurance that we will be successful in achieving a return on shareholders’ investment and the likelihood of our success must be considered in light of our early stage of operations. You should consider any purchase of the Company’s securities in light of the risks, expenses and problems frequently encountered by all companies in the early stages of their corporate development.
Title Risks
Although the Company has or will receive title opinions for any properties in which it has a material interest, there is no guarantee that title to such properties will not be challenged or impugned. The Company has not conducted surveys on all of the claims in which it holds direct or indirect interests. The Company’s properties may be subject to prior unregistered agreements or transfers or native land claims and title may be affected by unidentified or unknown defects. Title insurance is generally not available for mineral properties and the Company’s ability to ensure that it has obtained secure claims to individual mineral properties or mining concessions may be constrained. A successful challenge to the Company’s title to a property or to the precise area and location of a property could cause delays or stoppages to the Company’s exploration, development or operating activities without reimbursement to the Company. Any such delays or stoppages could have a material adverse effect on the Company’s business, financial condition and results of operations.
Laws and Regulation
The Company’s exploration activities are subject to extensive federal, provincial and local laws and regulations governing prospecting, development, production, exports, taxes, labour standards, occupational health and safety, mine safety and other matters in all the jurisdictions in which it operates. These laws and regulations are subject to change, can become more stringent and compliance can therefore become more costly. The Company applies the expertise of its management, advisors, employees and contractors to ensure compliance with current laws.
Uninsured and Underinsured Risks
The Company faces and will face various risks associated with mining exploration and the management and administration thereof Some of these risks are not insurable; some may be the subject of insurance which is not commercially feasible for the Company. Those insurances which are purchased will have exclusions and deductibles which may eliminate or restrict recovery in the event of loss. In some cases, the amount of insurance purchased may not be adequate in amount or in limit.
- 36 -
Management’s Discussion and Analysis
For the three and nine months ended September 30, 2020 and 2019
The Company will undertake intermittent assessments of insurable risk to help ensure that the impact of uninsured/underinsured loss is minimized within reason. Risks may vary from time to time within this intermittent period due to changes in such things as operations operating conditions, laws or the climate which may leave the Company exposed to periods of additional uninsured risk. In the event risk is uninsurable, at its reasonable and sole discretion, the Company may endeavor to implement policies and procedures, as may be applicable and/or feasible, to reduce the risk of related loss.
Public Health Crises such as the COVID-19 Pandemic
In December 2019, a novel strain of coronavirus known as COVID-19 surfaced in Wuhan, China and has spread around the world causing significant business and social disruption. COVID-19 was declared a worldwide pandemic by the World Health Organization on March 11, 2020. The speed and extent of the spread of COVID-19 and the duration and intensity of resulting business disruption and related financial and social impact, are uncertain. Such adverse effects related to COVID-19 and other public health crises may be material to the Company. The impact of COVID-19 and efforts to slow the spread of COVID-19 could severely impact the exploration and any development of the Queensway Project and the Company’s other mineral projects. To date, a number of governments have declared states of emergency and have implemented restrictive measures such as travel bans, quarantine and self-isolation. If the exploration and any development of the Queensway Project and other mineral projects is disrupted or suspended as a result of these or other measures, it may have a material adverse impact on the Company’s financial position and results of operations.
COVID-19 and efforts to contain it may have broad impacts on the Company’s supply chain or the global economy, which could have a material adverse effect on the Company’s financial position. While governmental agencies and private sector participants are seeking to mitigate the adverse effects of COVID-19, and the medical community is seeking to develop vaccines and other treatment options, the efficacy and timing of such measures is uncertain.
Global Economy Risk
The volatility of global capital markets, including the general economic slowdown in the mining sector, over the past several years has generally made the raising of capital by equity or debt financing more difficult. The Company may be dependent upon capital markets to raise additional financing in the future. As such, the Company is subject to liquidity risks in meeting its operating expenditure requirements and future development cost requirements in instances where adequate cash positions are unable to be maintained or appropriate financing is unavailable. These factors may impact the ability to raise equity or obtain loans and other credit facilities in the future and on terms favourable to the Company and its management. If these levels of volatility persist or if there is a further economic slowdown, the Company’s operations, the Company’s ability to raise capital could be adversely impacted.
In addition, the current outbreak of COVID-19, and any future emergence and spread of similar pathogens, could have a material adverse impact on global economic conditions, which may adversely impact: the Company’s operations, its ability to raise debt or equity financing for the purposes of mineral exploration and development, and the operations of the Company’s suppliers, contractors and service providers.
Environmental Risks
The Company’s activities are subject to extensive laws and regulations governing environment protection. The Company is also subject to various reclamation related conditions. Although the Company closely follows and believes it is operating in compliance with all applicable environmental regulations, there can be no assurance that all future requirements will be obtainable on reasonable terms. Failure to comply may result in enforcement actions causing operations to cease or be curtailed and may include corrective measures requiring capital expenditures. Intense lobbying over environmental concerns by non-governmental organizations has caused some governments to cancel or restrict development of mining projects. Current publicized concern over climate change may lead to carbon taxes, requirements for carbon offset purchases or new regulation. The costs or likelihood of such potential issues to the Company cannot be estimated at this time.
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Management’s Discussion and Analysis
For the three and nine months ended September 30, 2020 and 2019
The legal framework governing this area is constantly developing, therefore the Company is unable to fully ascertain any future liability that may arise from the implementation of any new laws or regulations, although such laws and regulations are typically strict and may impose severe penalties (financial or otherwise). The proposed activities of the Company, as with any exploration, may have an environmental impact which may result in unbudgeted delays, damage, loss and other costs and obligations including, without limitation, rehabilitation and/or compensation. There is also a risk that the Company’s operations and financial position may be adversely affected by the actions of environmental groups or any other group or person opposed in general to the Company’s activities and, in particular, the proposed exploration and mining by the Company within the Provinces of Newfoundland and Ontario.
Social and Environmental Activism
There is an increasing level of public concern relating to the effects of mining on the nature landscape, in communities and on the environment. Certain non-governmental organizations, public interest groups and reporting organizations (“NGOs”) who oppose resource development can be vocal critics of the mining industry. In addition, there have been many instances in which local community groups have opposed resource extraction activities, which have resulted in disruption and delays to the relevant operation. While the Company seeks to operate in a social responsible manner and believes it has good relationships with local communities in the regions in which it operates, NGOs or local community organizations could direct adverse publicity against and/or disrupt the operations of the Company in respect of one or more of its properties, regardless of its successful compliance with social and environmental best practices, due to political factors, activities of unrelated third parties on lands in which the Company has an interest or the Company’s operations specifically. Any such actions and the resulting media coverage could have an adverse effect on the reputation and financial condition of the Company or its relationships with the communities in which it operations, which could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.
Dependence on Management and Key Personnel
The success of the Company is currently largely dependent on the performance of its directors and officers. The loss of the services of any of these persons could have a materially adverse effect on the Company’s business and prospects. There is no assurance the Company can maintain the services of its directors, officers or other qualified personnel required to operate its business. As the Company’s business activity grows, the Company will require additional key financial, administrative and mining personnel as well as additional operations staff. There can be no assurance that these efforts will be successful in attracting, training and retaining qualified personnel as competition for persons with these skill sets increase. If the Company is not successful in attracting, training and retaining qualified personnel, the efficiency of its operations could be impaired, which could have an adverse impact on the Company’s operations and financial condition. In addition, the COVID-19 pandemic may cause the Company to have inadequate access to an available skilled workforce and qualified personnel, which could have an adverse impact on the Company’s financial performance and financial condition.
First Nations Land Claims
Certain of the Company’s mineral properties may now or in the future be the subject of First Nations land claims. The legal nature of First Nations land claims is a matter of considerable complexity. The impact of any such claim on the Company’s material interest in the Company’s mineral properties and/or potential ownership interest in the Company’s mineral properties in the future, cannot be predicted with any degree of certainty and no assurance can be given that a broad recognition of First Nations rights in the areas in which the Company’s mineral properties are located, by way of negotiated settlements or judicial pronouncements, would not have an adverse effect on the Company’s activities. Even in the absence of such recognition, the Company may at some point be required to negotiate with and seek the approval of holders of First Nations interests in order to facilitate exploration and development work on the Company’s mineral properties, there is no assurance that the Company will be able to establish practical working relationships with the First Nations in the area which would allow it to ultimately develop the Company’s mineral properties.
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Management’s Discussion and Analysis
For the three and nine months ended September 30, 2020 and 2019
Claims and Legal Proceedings
The Company and/or its directors and officers may be subject to a variety of civil or other legal proceedings, with or without merit. From time to time in the ordinary course of its business, the Company may become involved in various legal proceedings, including commercial, employment and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s attention and resources and cause the Company to incur significant expenses. Furthermore, because litigation is inherently unpredictable, the results of any such actions may have a material adverse effect on the Company’s business, operating results or financial condition.
Conflicts of Interest
Most of the Company’s directors and officers do not devote their full time to the affairs of the Company. All of the directors and some of the officers of the Company are also directors, officers and shareholders of other natural resource or public companies, and as a result they may find themselves in a position where their duty to another company conflicts with their duty to the Company. Although the Company has policies which address such potential conflicts and the OBCA has provisions governing directors in the event of such a conflict, none of the Company’s constating documents or any of its other agreements contain any provisions mandating a procedure for addressing such conflicts of interest. There is no assurance that any such conflicts will be resolved in favour of the Company. If any such conflicts are not resolved in favour of the Company, the Company may be adversely affected.
Gold and Metal Prices
If the Company’s mineral properties are developed from exploration properties to full production properties, the majority of our revenue will be derived from the sale of gold. Therefore, the Company’s future profitability will depend upon the world market prices of the gold for which it is exploring. The price of gold and other metals are affected by numerous factors beyond the Company’s control, including levels of supply and demand, global or regional consumptive patterns, sales by government holders, metal stock levels maintained by producers and others, increased production due to new mine developments and improved mining and production methods, speculative activities related to the sale of metals, availability and costs of metal substitutes.
Moreover, gold prices are also affected by macroeconomic factors such as expectations regarding inflation, interest rates and global and regional demand for, and supply of, gold as well as general global economic conditions. These factors may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities. Additionally, the current COVID-19 pandemic and efforts to contain it, including restrictions on travel and other advisories issued may have a significant effect on gold prices.
Negative Cash Flow from Operating Activities
The Company has no history of earnings and had negative cash flow from operating activities since inception. The Company’s mineral properties are in the exploration stage and there are no known mineral resources or reserves and the proposed exploration programs on the Company’s mineral properties are exploratory in nature. Significant capital investment will be required to achieve commercial production from the Company’s existing projects. There is no assurance that any of the Company’s mineral properties will generate earnings, operate profitably or provide a return on investment in the future. Accordingly, the Company will be required to obtain additional financing in order to meet its future cash commitments.
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-
Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Going Concern Risk
The Company’s financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. The Company’s future operations are dependent upon the identification and successful completion of equity or debt financings and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that the Company will be successful in completing equity or debt financings or in achieving profitability. The financial statements do not give effect to any adjustments relating to the carrying values and classifications of assets and liabilities that would be necessary should the Company be unable to continue as a going concern.
Risks Associated with Acquisitions
If appropriate opportunities present themselves, the Company may acquire mineral claims, material interests in other mineral claims, and companies that the Company believes are strategic. The Company currently has no understandings, commitments or agreements with respect to any material acquisition, other than as described in this MD&A, and no other material acquisition is currently being pursued. There can be no assurance that the Company will be able to identify, negotiate or finance future acquisitions successfully, or to integrate such acquisitions with its current business. The process of integrating an acquired Company or mineral claims into the Company may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for ongoing development of the Company’s business. Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to goodwill and other intangible assets, which could materially adversely affect the Company’s business, results of operations and financial condition.
Force Majeure
The Company’s projects now or in the future may be adversely affected by risks outside the control of the Company, including the price of gold on world markets, labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods, explosions or other catastrophes, pandemics, epidemics or quarantine restrictions.
Infrastructure
Exploration, development and processing activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important elements of infrastructure, which affect access, capital and operating costs. The lack of availability on acceptable terms or the delay in the availability of any one or more of these items could prevent or delay exploration or development of the Company’s mineral properties. If adequate infrastructure is not available in a timely manner, there can be no assurance that the exploration or development of the Company’s mineral properties will be commenced or completed on a timely basis, if at all. Furthermore, unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of necessary infrastructure could adversely affect our operations.
Exploration operations depend on adequate infrastructure. In particular, reliable power sources, water supply, transportation and surface facilities are necessary to explore and develop mineral projects. Failure to adequately meet these infrastructure requirements or changes in the cost of such requirements could affect the Company’s ability to carry out exploration and future development operations and could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Climate Change Risks
The Company acknowledges climate change as an international and community concern and it supports and endorses various initiatives for voluntary actions consistent with international initiatives on climate change. However, in addition to voluntary actions, governments are moving to introduce climate change legislation and treaties at the international, national, state/provincial and local levels. Where legislation already exists, regulation relating to emission levels and energy efficiency is becoming more stringent. Some of the costs associated with reducing emissions can be offset by increased energy efficiency and technological innovation. However, if the current regulatory trend continues, the Company expects that this could result in increased costs at some of its operations in the future.
The Company and the mining industry are facing continued geotechnical challenges, which could adversely impact the Company’s production and profitability. Unanticipated adverse geotechnical and hydrological conditions, such as landslides, floods, seismic activity, droughts and pit wall failures, may occur in the future and such events may not be detected in advance. Geotechnical instabilities and adverse climatic conditions can be difficult to predict and are often affected by risks and hazards outside of the Company’s control, such as severe weather and considerable rainfall. Geotechnical failures could result in limited or restricted access to mine sites, suspension of operations, government investigations, increased monitoring costs, remediation costs, loss of ore and other impacts, which could cause one or more of the Company’s projects to be less profitable than currently anticipated and could result in a material adverse effect on the Company’s business results of operations and financial position.
Information Systems and Cyber Security
The Company’s operations depend on information technology (“IT”) systems. These IT systems could be subject to network disruptions caused by a variety of sources, including computer viruses, security breaches and cyber-attacks, as well as disruptions resulting from incidents such as cable cuts, damage to physical plants, natural disasters, terrorism, fire, power loss, vandalism and theft. The Company’s operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Company’s reputation and results of operations.
Although to date the Company has not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that the Company will not incur such losses in the future. The Company’s risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. As a result, cyber security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.
Critical Accounting Policies and Estimates
The Company prepares its financial statements in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”).
The preparation of the financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
The financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant assumptions about the future and other sources of estimation uncertainty that management has made at year end that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to the following:
(i) Critical accounting estimates
Valuation of Options Granted and Warrants Issued
The fair value of common share purchase options granted and warrants issued is determined at the issue date using the Black-Scholes option pricing model. The Black-Scholes model involves six key inputs to determine the fair value of an option, which are: risk-free interest rate, exercise price, market price at the grant date, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are or could be affected by significant factors that are out of the Company’s control. The Company is also required to estimate the future forfeiture rate of options based on historical information in its calculation of share-based payments expense. These estimates impact the values of stock-based compensation expense, share capital, and reserves.
Computation of Income Taxes
The determination of tax expense for the period and deferred tax assets and liabilities involves significant estimation and judgment by management. In determining these amounts, management interprets tax legislation in a variety of jurisdictions and make estimates of the expected timing of the reversal of deferred tax assets and liabilities. Management also makes estimates of future earnings which affect the extent to which potential future tax benefits may be used.
The Company is subject to assessments by taxation authorities, which may interpret legislation differently. These differences may affect the final amount or the timing of the payment of taxes. We provide for such differences where known based on our best estimate of the probable outcome of these matters.
Shares Issued to Acquire Exploration and Evaluation Assets
From time to time, the Company issues common shares in the course of acquiring exploration and evaluation assets. When shares are issued without cash consideration, the transaction is recognized at the fair value of the assets received. In the event that the fair value of the assets cannot be reliably determined, the Company will recognize the transaction at the fair value of the shares issued. These estimates impact the value of share capital and exploration and evaluation assets.
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Flow-Through Shares
On issuance of flow-through shares, the Company bifurcates the flow-through share into i) a flow-through share premium, equal to the estimated premium, if any, investors pay for the flow-through feature, which is recognized as a liability and; ii) share capital. Upon qualifying expenditures being incurred, the Company derecognizes the liability and recognizes a deferred tax liability for the amount of the tax reduction renounced to the shareholders. The premium is recognized as other income and the related deferred tax is recognized as a tax provision.
To the extent that the Company has deferred tax assets in the form of tax loss carry-forwards and other unused tax credits as at the reporting
(ii) Critical accounting judgments
Impairment of Exploration and Evaluation Assets
Management is required to assess impairment in respect to the Company’s intangible mineral property interests. The triggering events are defined in IFRS 6. In making the assessment, management is required to make judgments on the status of each project and the future plans towards finding commercial reserves. The carrying value of each exploration and evaluation asset is reviewed regularly for conditions that may suggest impairment. This review requires significant judgment. Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the property’s value; whether there has been an accumulation of costs significantly in excess of the amounts originally expected for the property’s acquisition, development or cost of holding; and whether exploration activities produced results that are not promising such that no more work is being planned in the foreseeable future. If impairment is determined to exist, a formal estimate of the recoverable amount is performed and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount.
Management has determined that there were no indicators of impairment as at September 30, 2020 in exploration and evaluation assets.
Initial application of standards, interpretations and amendments to standards and interpretations in the reporting period
In October 2018, the International Accounting Standards Board amended IFRS 3, Business Combinations, seeking to clarify whether an acquisition transaction results in the acquisition of an asset or the acquisition of a business. The amendments are effective for acquisition transactions on or after January 1, 2020, although earlier application was permitted. The amended standard has a narrower definition of a business, which could result in the recognition of fewer business combinations than under the previous standard; the implication of this is that amounts which may have been recognized as goodwill in a business combination under the previous standard may now be recognized as allocations to net identifiable assets acquired under the amended standard (with an associated effect in an entity’s results of operations that would differ from the effect of goodwill having been recognized). We have applied the standard prospectively from January 1, 2020. The effects of the amended standard on our financial performance and disclosure will be dependent on the facts and circumstances of any future acquisition transactions and have not been material in the current fiscal year.
Financial Risk Management
The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board approves and monitors the risk management processes.
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company does not have financial instruments that potentially subject the Company to credit risk. Overall the Company’s credit risk has not changed significantly from the prior year. Sales taxes recoverable are due from the Canada Revenue Agency and the Company places its cash with financial institutions with high credit ratings, therefore in management’s judgment, credit risk is low.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has in place a planning and budgeting process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. The Company has historically relied on issuance of shares to fund exploration programs and may require doing so again in the future. As at September 30, 2020, the Company has total liabilities of $2,047,094 and cash of $47,862,000 which is available to discharge these liabilities (December 31, 2019 – total liabilities of $392,849 and cash of $7,336,638). Accordingly, in management’s judgment, liquidity risk is low.
There have been no changes in management’s methods for managing liquidity risk since December 31, 2019.
Market Risk
Market risk is the risk that changes in market prices, such as commodity prices, interest rates and foreign exchange rates will affect the Company’s net earnings or the value of financial instruments. The objective of the Company is to manage and mitigate market risk exposures within acceptable limits, while maximizing returns.
Currency Risk
Financial instruments that impact the Company’s net earnings or other comprehensive income due to currency fluctuation include cash accounts denominated in US dollars and investments denominated in Australian dollars. Fluctuations in the exchange rate between the US dollar and the Canadian dollar at September 30, 2020 would not have a material impact on the Company’s net earnings and other comprehensive income. The sensitivity of the Company’s net earnings and other comprehensive income to changes in the exchange rate between the Canadian dollar and the Australian dollar at September 30, 2020 would change the Company’s net loss (income) by $47,248 as a result of a 10% change in the Canadian dollar exchange rate relative to the Australian dollar.
Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. As the Company deposits its short-term investments into fixed rate guaranteed investment certificates with one year maturities or less, the Company is not exposed to interest rate risk.
Commodity Price risk
Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company’s property has exposure to predominantly gold. Commodity prices, especially gold, greatly affect the value of the Company and the potential value of its property and investments.
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Equity Price Risk
Equity price risk is the risk that the fair value of or future cash flows from the Company’s financial instruments will significantly fluctuate because of changes in market prices. The Company is exposed to market risk in trading its investments in unfavorable market conditions which could result in dispositions of investments at less than favorable prices. Additionally, the Company adjusts its investments to fair value at the end of each reporting period. This process could result in write-downs of the Company’s investments over one or more reporting periods, particularly during periods of overall market instability. The sensitivity of the Company’s net income (loss) to changes in market prices at September 30, 2020 would change the Company’s net income (loss) by $2,401,414 as a result of a 10% change in the market price of its investments.
There have been no changes in management’s methods for managing market risks since December 31, 2019.
Capital management
The Company’s objectives when managing capital are:
• | To safeguard our ability to continue as a going concern in order to develop and operate our current projects; |
• | Pursue strategic growth initiatives; and |
• | To maintain a flexible capital structure which lowers the cost of capital. |
In assessing our capital structure, we include in our assessment the components of equity consisting of common shares, stock options and warrants, and deficit that as at September 30, 2020 totalled $73,669,233 (December 31, 2019 - $8,962,187). In order to facilitate the management of capital requirements, the Company prepares annual expenditure budgets and continuously monitors and reviews actual and forecasted cash flows. The annual and updated budgets are monitored and approved by the Board of Directors.
To maintain or adjust the capital structure, the Company may, from time to time, issue new shares, issue new debt, repay debt or dispose of non-core assets. The Company’s current capital resources are sufficient to carry out our exploration plans and support operations through the current operating period.
The Company is not subject to any capital requirements imposed by a regulator.
There were no changes in the Company’s approach to capital management during the nine months ended September 30, 2020.
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Cautionary Notes Regarding Forward-Looking Statements
This MD&A contains forward looking statements which reflect management’s expectations regarding the Company’s future growth, results from operations (including, without limitation, statements about the Company’s opportunities, strategies, competition, expected activities and expenditures as the Company pursues its business plan, the adequacy of the Company’s available cash resources and other statements about future events or results), performance (both operational and financial) and business prospects, future business plans and opportunities. Wherever possible, words such as “predicts”, “projects”, “targets”, “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. These forward-looking statements include, among other things, statements relating to; the Queensway Project and the Company’s planned and future exploration on the Queensway Project and its other mineral properties; the Company’s goals regarding exploration and potential development of its projects; the Company’s future business plans; expectations regarding the ability to raise further capital; the market price of gold; expectations regarding any environmental issues that may affect planned or future exploration and development programs and the potential impact of complying with existing and proposed environmental laws and regulations; the ability to retain and/or maintain any require permits, licenses or other necessary approvals for the exploration or development of its mineral properties; government regulation of mineral exploration and development operations in the Provinces of Newfoundland and Labrador and Ontario; the Company’s compensation policy and practices; the Company’s expected reliance on key management personnel, advisors and consultants; effects of the novel COVID - 19 outbreak as a global pandemic.
Forward-looking statements are not a guarantee of future performance and is based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this Prospectus including, without limitation, assumptions about: the ability to raise any necessary additional capital on reasonable terms to advance exploration and development of the Company’s mineral properties; future prices of gold and other metal prices; the timing and results of exploration and drilling programs; the demand for, and price of gold; that general business and economic conditions will not change in a material adverse manner; the Company’s ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; the geology of the Queensway Project as described in the Queensway Technical Report; the accuracy of budgeted exploration and development costs and expenditures; future currency exchange rates and interest rates; operating conditions being favourable such that the Company is able to operate in a safe, efficient and effective manner; the Company’s ability to attract and retain skilled personnel; political and regulatory stability; the receipt of governmental, regulatory and third-party approvals, licenses and permits on favourable terms; obtaining required renewals for existing approvals, licenses and permits on favourable terms; requirements under applicable laws; sustained labour stability; stability in financial and capital goods markets; expectations regarding the level of disruption to exploration at the Queensway Project as a result of COVID 19; availability of equipment.
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Furthermore, such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of the Company to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking statements. Such risks include, without limitation: the Company may fail to find a commercially viable deposit at any of its mineral properties; there are no resources or mineral reserves on any of the properties in which the Company has an interest; the Company’s plans may be adversely affected by the Company’s reliance on historical data compiled by previous parties involved with its mineral properties; mineral exploration and development are inherently risky; the mineral exploration industry is intensely competitive; additional financing may not be available to the Company when required or, if available, the terms of such financing may not be favourable to the Company; fluctuations in the demand for gold; the Company may not be able to identify, negotiate or finance any future acquisitions successfully, or to integrate such acquisitions with its current business; the Company’s exploration activities are dependent upon the grant of appropriate licenses, concessions, leases, permits and regulatory consents, which may be withdrawn or not granted; the Company’s operations could be adversely affected by possible future government legislation, policies and controls or by changes in applicable laws and regulations; there is no guarantee that title to the properties in which the Company has a material interest will not be challenged or impugned; the Company faces various risks associated with mining exploration that are not insurable or may be the subject of insurance which is not commercially feasible for the Company; public health crises such as the COVID-19 pandemic may adversely impact the Company’s business; the volatility of global capital markets over the past several years has generally made the raising of capital more difficult; compliance with environmental regulations can be costly; social and environmental activism can negatively impact exploration, development and mining activities; the success of the Company is largely dependent on the performance of its directors and officers; the Company’s operations may be adversely affected by First Nations land claims; the Company and/or its directors and officers may be subject to a variety of legal proceedings, the results of which may have a material adverse effect on the Company’s business; the Company may be adversely affected if potential conflicts of interests involving its directors and officers are not resolved in favour of the Company; the Company’s future profitability may depend upon the world market prices of gold; there is no existing public market for the Company’s securities and an active and liquid one may never develop, which could impact the liquidity of the Company’s securities; dilution from future equity financing could negatively impact holders of the Company’s securities; failure to adequately meet infrastructure requirements could have a material adverse effect on the Company’s business; the Company’s projects now or in the future may be adversely affected by risks outside the control of the Company; the Company is subject to various risks associated with climate change; other factors discussed under “Risk and Uncertainties”.
Although the Company has attempted to identify important factors that could cause actual actions, events, conditions, results, performance or achievements to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events, conditions, results, performance or achievements to differ from those anticipated, estimated or intended.
The Company cautions that the foregoing lists of important assumptions and factors are not exhaustive. Other events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward-looking statements contained herein. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking statements.
Forward-looking statements contained herein are made as of the date of this MD&A and the Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as and to the extent required by applicable securities laws.
Off-Balance Sheet Arrangements
The Company does not utilize off-balance sheet arrangements.
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Management’s Discussion and Analysis |
For the three and nine months ended September 30, 2020 and 2019 |
Proposed Transactions
There are no proposed transactions at the date of this report.
Additional Information
Additional information relating to the Company is available on SEDAR at www.sedar.com.
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Exhibit 99.10
CONDENSED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2020 AND 2019
(Unaudited - Expressed in Canadian Dollars)
New Found Gold Corp.
Condensed Interim Statements of Financial Position
(Unaudited - Expressed in Canadian Dollars)
September 30, | December 31, | |||||||||||
2020 | 2019 | |||||||||||
Note | $ | $ | ||||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash | 47,862,000 | 7,336,638 | ||||||||||
Investments, at fair value | 5 | 24,014,142 | 114,937 | |||||||||
Amounts receivable | 2,837 | 46,085 | ||||||||||
Prepaid expenses and deposits | 6 | 1,352,869 | 436,436 | |||||||||
Sales taxes recoverable | 400,850 | 291,075 | ||||||||||
Right-of-use assets | 37,493 | - | ||||||||||
Total current assets | 73,670,191 | 8,225,171 | ||||||||||
Non-current assets | ||||||||||||
Exploration and evaluation assets | 3 | 1,200,716 | 1,100,716 | |||||||||
Property and equipment | 4 | 845,420 | 29,149 | |||||||||
Total non-current assets | 2,046,136 | 1,129,865 | ||||||||||
Total Assets | 75,716,327 | 9,355,036 | ||||||||||
LIABILITIES | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable and accrued liabilities | 9 | 637,770 | 392,849 | |||||||||
Flow-through share premium | 7 | 1,370,521 | - | |||||||||
Lease liabilities | 38,803 | - | ||||||||||
Total current liabilities | 2,047,094 | 392,849 | ||||||||||
EQUITY | ||||||||||||
Share capital | 8 | 76,099,181 | 10,735,862 | |||||||||
Reserves | 8 | 11,040,443 | 4,667,467 | |||||||||
Deficit | (13,470,391 | ) | (6,441,142 | ) | ||||||||
Total equity | 73,669,233 | 8,962,187 | ||||||||||
Total Equity and Liabilities | 75,716,327 | 9,355,036 | ||||||||||
NATURE OF OPERATIONS (Note 1) | ||||||||||||
COMMITMENTS (Note 13) | ||||||||||||
SUBSEQUENT EVENTS (Note 16) |
These financial statements are authorized for issue by the Board of Directors on November 27, 2020. They are signed on the Company’s behalf by:
“Collin Kettell” | , Director |
“John Anderson” | , Director |
The accompanying notes are an integral part of these condensed interim financial statements.
- 1 -
New Found Gold Corp.
Condensed Interim Statements of Loss and Comprehensive Loss
(Unaudited - Expressed in Canadian Dollars)
Three months ended | Nine months ended | |||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||
Note | $ | $ | $ | $ | ||||||||||||||||
Expenses | ||||||||||||||||||||
Corporate development and investor relations | 444,544 | - | 599,979 | - | ||||||||||||||||
Depreciation | 41,051 | 3,123 | 48,031 | 9,369 | ||||||||||||||||
Exploration and evaluation expenditures (recovery) | 3,9 | 2,248,817 | (13,866 | ) | 3,559,529 | 280,440 | ||||||||||||||
Office and sundry | 17,156 | 4,742 | 62,249 | 19,664 | ||||||||||||||||
Professional fees | 9 | 102,977 | 1,498 | 383,613 | 1,498 | |||||||||||||||
Salaries and consulting | 9 | 698,833 | 91,000 | 1,466,965 | 489,000 | |||||||||||||||
Share-based compensation | 8,9 | 5,484,913 | - | 8,517,714 | - | |||||||||||||||
Transfer agent and regulatory fees | 21,829 | - | 77,068 | 338 | ||||||||||||||||
Travel | - | - | 61,039 | 13,407 | ||||||||||||||||
Loss from operating activities | (9,060,120 | ) | (86,497 | ) | (14,776,187 | ) | (813,716 | ) | ||||||||||||
Settlement of flow-through share premium | 7 | 485,981 | - | 587,098 | - | |||||||||||||||
Foreign exchange (loss) gain | (7,155 | ) | 16 | (9,176 | ) | (41 | ) | |||||||||||||
Impairment of exploration and evaluation assets | - | - | - | (45,000 | ) | |||||||||||||||
Interest expense | (1,268 | ) | - | (1,268 | ) | - | ||||||||||||||
Interest income | 4,704 | - | 7,189 | - | ||||||||||||||||
Net realized losses on disposal of investments | - | - | - | (120,734 | ) | |||||||||||||||
Net change in unrealized gains (losses) on investments | 5 | (2,532,310 | ) | 1,459 | 7,163,095 | 42,043 | ||||||||||||||
Loss and comprehensive loss for the period | (11,110,168 | ) | (85,022 | ) | (7,029,249 | ) | (937,448 | ) | ||||||||||||
Loss per share – basic and diluted ($) | 10 | (0.09 | ) | (0.00 | ) | (0.07 | ) | (0.02 | ) |
The accompanying notes are an integral part of these condensed interim financial statements.
- 2 -
New Found Gold Corp.
Condensed Interim Statements of Cash Flows
(Unaudited - Expressed in Canadian Dollars)
Nine months ended September 30, | ||||||||
2020 | 2019 | |||||||
$ | $ | |||||||
Cash flows from operating activities | ||||||||
Loss for the period | (7,029,249 | ) | (937,448 | ) | ||||
Adjustments for: | ||||||||
Settlement of flow-through share premium | (587,098 | ) | - | |||||
Depreciation | 48,031 | 9,369 | ||||||
Impairment of exploration and evaluation assets | - | 45,000 | ||||||
Interest expense | 1,268 | |||||||
Share-based compensation | 8,517,714 | - | ||||||
Net realized losses on disposal of investments | - | 120,734 | ||||||
Net change in unrealized gains on investments | (7,163,095 | ) | (42,043 | ) | ||||
(6,212,429 | ) | (804,388 | ) | |||||
Change in non-cash working capital items: | ||||||||
Decrease in amounts receivable | 43,248 | 156,763 | ||||||
(Increase) decrease in prepaid expenses and deposits | (877,613 | ) | 1,259 | |||||
(Increase) in sales taxes recoverable | (109,775 | ) | (71,308 | ) | ||||
Increase (decrease) in accounts payable and accrued liabilities | 244,921 | (571,538 | ) | |||||
Net cash used in operating activities | (6,911,648 | ) | (1,289,212 | ) | ||||
Cash flows from investing activities | ||||||||
Purchase of exploration and evaluation assets | (100,000 | ) | (127,370 | ) | ||||
Expenditures on claims staking | (38,820 | ) | - | |||||
Proceeds on disposal of investments | - | 280,786 | ||||||
Purchases of property, plant and equipment | (851,710 | ) | - | |||||
Net cash (used in) generated from investing activities | (990,530 | ) | 153,416 | |||||
Cash flows from financing activities | ||||||||
Issuance of common shares in initial public offering | 31,395,000 | - | ||||||
Issuance of common shares in private placements | 7,118,196 | 1,250,000 | ||||||
Share issue costs | (3,032,606 | ) | - | |||||
Stock options exercised | 959,500 | 64,500 | ||||||
Warrants exercised | 12,000,000 | - | ||||||
Lease payments | (11,282 | ) | - | |||||
Interest expense on lease liabilities | (1,268 | ) | - | |||||
Net cash generated from financing activities | 48,427,540 | 1,314,500 | ||||||
Net increase in cash | 40,525,362 | 178,704 | ||||||
Cash at beginning of period | 7,336,638 | 323,179 | ||||||
Cash at end of period | 47,862,000 | 501,883 |
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS (Note 11)
The accompanying notes are an integral part of these condensed interim financial statements.
- 3 -
New Found Gold Corp.
Condensed Interim Statements of Changes in Equity
(Unaudited - Expressed in Canadian Dollars)
Share capital | Reserves | |||||||||||||||||||||||
Equity settled | ||||||||||||||||||||||||
share-based | ||||||||||||||||||||||||
Number | Amount | payments | Warrants | Deficit | Total equity | |||||||||||||||||||
of shares | $ | $ | $ | $ | $ | |||||||||||||||||||
Balance at December 31, 2018 | 56,351,750 | 2,845,700 | 530,601 | - | (2,421,110 | ) | 955,191 | |||||||||||||||||
Issued pursuant to acquisition of exploration and evaluation assets | 167,500 | 67,000 | - | - | - | 67,000 | ||||||||||||||||||
Shares issued in private placement | 3,125,000 | 1,250,000 | - | - | - | 1,250,000 | ||||||||||||||||||
Stock options exercised | 430,000 | 100,620 | (36,120 | ) | - | - | 64,500 | |||||||||||||||||
Total comprehensive loss for the period | - | - | - | - | (937,448 | ) | (937,448 | ) | ||||||||||||||||
Balance at September 30, 2019 | 60,074,250 | 4,263,320 | 494,481 | - | (3,358,558 | ) | 1,399,243 | |||||||||||||||||
Issued pursuant to acquisition of exploration and evaluation assets | 349,999 | 140,000 | - | - | - | 140,000 | ||||||||||||||||||
Share-based compensation | - | - | 2,130,528 | - | - | 2,130,528 | ||||||||||||||||||
Shares issued in private placement | 16,000,000 | 5,747,542 | - | 2,252,458 | - | 8,000,000 | ||||||||||||||||||
Stock options exercised | 2,500,000 | 585,000 | (210,000 | ) | - | - | 375,000 | |||||||||||||||||
Total comprehensive loss for the period | - | - | - | - | (3,082,584 | ) | (3,082,584 | ) | ||||||||||||||||
Balance at December 31, 2019 | 78,924,249 | 10,735,862 | 2,415,009 | 2,252,458 | (6,441,142 | ) | 8,962,187 | |||||||||||||||||
Shares issued in initial public offering | 24,150,000 | 31,395,000 | - | - | - | 31,395,000 | ||||||||||||||||||
Shares issued in private placement | 15,000,000 | 16,736,110 | - | - | - | 16,736,110 | ||||||||||||||||||
Flow-through shares issued in private placements | 4,860,982 | 7,118,196 | - | - | - | 7,118,196 | ||||||||||||||||||
Share issue costs | - | (3,032,606 | ) | - | - | - | (3,032,606 | ) | ||||||||||||||||
Agents’ warrants issued | - | (791,250 | ) | - | 791,250 | - | - | |||||||||||||||||
Flow-through share premium | - | (1,957,619 | ) | - | - | - | (1,957,619 | ) | ||||||||||||||||
Share-based compensation | - | - | 8,517,714 | - | - | 8,517,714 | ||||||||||||||||||
Stock options exercised | 3,115,000 | 1,643,030 | (683,530 | ) | - | - | 959,500 | |||||||||||||||||
Warrants exercised | 16,000,000 | 14,252,458 | - | (2,252,458 | ) | - | 12,000,000 | |||||||||||||||||
Total comprehensive loss for the period | - | - | - | - | (7,029,249 | ) | (7,029,249 | ) | ||||||||||||||||
Balance at September 30, 2020 | 142,050,231 | 76,099,181 | 10,249,193 | 791,250 | (13,470,391 | ) | 73,669,233 |
The accompanying notes are an integral part of these condensed interim financial statements.
- 4 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and nine months ended September 30, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
1. | NATURE OF OPERATIONS |
New Found Gold Corp. (the “Company”) was incorporated on January 6, 2016, under the Business Corporations Act in the Province of Ontario. On June 23, 2020, the Company continued as a British Columbia corporation under the Business Corporations Act in the Province of British Columbia. The Company’s registered office is located at Suite 2600 – 595 Burrard Street, Vancouver, British Columbia V7X 1L3.
The Company is a mineral exploration company engaged in the acquisition, exploration and evaluation of resource properties with a focus on gold properties located in the Provinces of Newfoundland and Labrador and Ontario, Canada. The Company’s exploration and evaluation assets presently have no proven or probable reserves, and on the basis of information to date, it has not yet determined whether these properties contain economically recoverable resources. The recoverability of amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production.
On March 11, 2020, the World Health Organization declared the global outbreak of a novel coronavirus identified as “COVID-19” a global pandemic. In order to combat the spread of COVID-19, governments worldwide have enacted emergency measures including travel bans, legally enforced or self-imposed quarantine periods, social distancing and business and organization closures. These measures have caused material disruptions to businesses, governments and other organizations resulting in an economic slowdown and increased volatility in national and global equity and commodity markets. Central banks and governments, including Canadian federal and provincial governments, have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of any interventions. Significant economic and social impacts have limited the Company’s ability to continue its exploration and evaluation activities as intended. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company and its operations in future periods.
These condensed interim financial statements were approved by the Board of Directors of the Company on November 27, 2020.
2. | SIGNIFICANT ACCOUNTING POLICIES |
The principal accounting policies applied in the preparation of these financial statements are set out below.
a) Statement of compliance
The Company’s condensed interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as applicable to interim financial reports including International
Accounting Standards 34 “Interim Financial Reporting”.
These condensed interim financial statements do not include all the information and note disclosures required by IFRS for annual financial statements and should be read in conjunction with the annual financial statements for the year ended December 31, 2019, which have been prepared in accordance with IFRS, as issued by the International Accounting Standards Board (“IASB”) and included in Part I of the Handbook of the Chartered Professional Accountants of Canada and consistent with interpretations of the International
Financial Reporting Interpretations Committee (“IFRIC”).
The policies applied in these condensed interim financial statements are the same as those applied in the most recent annual financial statements and were consistently applied to all the periods presented.
- 5 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and nine months ended September 30, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
2. | SIGNIFICANT ACCOUNTING POLICIES (continued) |
b) Basis of presentation
These condensed interim financial statements have been prepared on a historical cost basis except for financial instruments classified as subsequently measured at fair value. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information.
c) Significant accounting estimates and judgments
The preparation of these condensed interim financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.
These condensed interim financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates may be pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant assumptions about the future and other sources of estimation uncertainty that management has made at year end that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to the following:
(i) | Critical accounting estimates |
Valuation of Options Granted and Warrants Issued
The fair value of common share purchase options granted and warrants issued is determined at the issue date using the Black-Scholes option pricing model. The Black-Scholes model involves six key inputs to determine the fair value of an option, which are: risk-free interest rate, exercise price, market price at the grant date, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are or could be affected by significant factors that are out of the Company’s control. The Company is also required to estimate the future forfeiture rate of options based on historical information in its calculation of share-based payments expense. These estimates impact the values of stock-based compensation expense, share capital, and reserves.
Computation of Income Taxes
The determination of tax expense for the period and deferred tax assets and liabilities involves significant estimation and judgment by management. In determining these amounts, management interprets tax legislation in a variety of jurisdictions and make estimates of the expected timing of the reversal of deferred tax assets and liabilities. Management also makes estimates of future earnings which affect the extent to which potential future tax benefits may be used. The Company is subject to assessments by taxation authorities, which may interpret legislation differently. These differences may affect the final amount or the timing of the payment of taxes. We provide for such differences where known based on our best estimate of the probable outcome of these matters.
- 6 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and nine months ended September 30, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
2. | SIGNIFICANT ACCOUNTING POLICIES (continued) |
Shares Issued to Acquire Exploration and Evaluation Assets
From time to time, the Company issues common shares in the course of acquiring exploration and evaluation assets. When shares are issued without cash consideration, the transaction is recognized at the fair value of the assets received. In the event that the fair value of the assets cannot be reliably determined, the Company will recognize the transaction at the fair value of the shares issued. These estimates impact the value of share capital and exploration and evaluation assets.
Flow-Through Shares
On issuance of flow-through shares, the Company bifurcates the flow-through share into i) a flow-through share premium, equal to the estimated premium, if any, investors pay for the flow-through feature, which is recognized as a liability and; ii) share capital. Upon qualifying expenditures being incurred, the Company derecognizes the liability and recognizes a deferred tax liability for the amount of tax reduction renounced to the shareholders. The premium is recognized as other income and the related deferred tax is recognized as a tax provision. To the extent that the Company has deferred tax assets in the form of tax loss carry-forwards and other unused tax credits as at the reporting.
(ii) | Critical accounting judgments |
Impairment of Exploration and Evaluation Assets
Management is required to assess impairment in respect to the Company’s intangible mineral property interests. The triggering events are defined in IFRS 6. In making the assessment, management is required to make judgments on the status of each project and the future plans towards finding commercial reserves. The carrying value of each exploration and evaluation asset is reviewed regularly for conditions that may suggest impairment. This review requires significant judgment. Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the property’s value; whether there has been an accumulation of costs significantly in excess of the amounts originally expected for the property’s acquisition, development or cost of holding; and whether exploration activities produced results that are not promising such that no more work is being planned in the foreseeable future. If impairment is determined to exist, a formal estimate of the recoverable amount is performed and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount. Management has determined that there were no indicators of impairment as at September 30, 2020.
d) | Initial application of standards, interpretations and amendments to standards and interpretations in the reporting period |
In October 2018, the International Accounting Standards Board amended IFRS 3, Business Combinations, seeking to clarify whether an acquisition transaction results in the acquisition of an asset or the acquisition of a business. The amendments are effective for acquisition transactions on or after January 1, 2020, although earlier application was permitted. The amended standard has a narrower definition of a business, which could result in the recognition of fewer business combinations than under the previous standard; the implication of this is that amounts which may have been recognized as goodwill in a business combination under the previous standard may now be recognized as allocations to net identifiable assets acquired under the amended standard (with an associated effect in an entity’s results of operations that would differ from the effect of goodwill having been recognized). We have applied the standard prospectively from January 1, 2020. The effects of the amended standard on our financial performance and disclosure will be dependent on the facts and circumstances of any future acquisition transactions and have not been material in the current fiscal year.
- 7 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and nine months ended September 30, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
3. | EXPLORATION AND EVALUATION ASSETS |
The schedules below summarize the carrying costs of acquisition costs and exploration expenditures incurred to date for each exploration and evaluation asset that the Company is continuing to explore as at September 30, 2020 and December 31, 2019:
Newfoundland | |||||||||||||||||
Queensway(i) | Other | Ontario (ii) | Total | ||||||||||||||
Nine months ended September 30, 2020 | $ | $ | $ | $ | |||||||||||||
Exploration and evaluation assets | |||||||||||||||||
Balance as at December 31, 2019 | 658,700 | 16,500 | 425,516 | 1,100,716 | |||||||||||||
Additions | |||||||||||||||||
Acquisition costs | 75,000 | - | 25,000 | 100,000 | |||||||||||||
Balance as at September 30, 2020 | 733,700 | 16,500 | 450,516 | 1,200,716 | |||||||||||||
Exploration and evaluation expenditures | |||||||||||||||||
Cumulative exploration expense - December 31, 2019 | 2,542,344 | - | 837,133 | 3,379,477 | |||||||||||||
Assays | 166,287 | 414 | 36,980 | 203,681 | |||||||||||||
Drilling | 623,351 | - | 120,773 | 744,124 | |||||||||||||
Geochemistry | - | - | 5,330 | 5,330 | |||||||||||||
Geophysics | 692,424 | - | - | 692,424 | |||||||||||||
Office & general | 21,909 | - | 629 | 22,538 | |||||||||||||
Property taxes, mining leases and rent | 34,120 | - | 2,800 | 36,920 | |||||||||||||
Salaries & consulting | 844,736 | 8,300 | 106,010 | 959,046 | |||||||||||||
Supplies & equipment | 527,773 | - | 79,953 | 607,726 | |||||||||||||
Travel & accommodations | 144,416 | - | 69 | 144,485 | |||||||||||||
Trenching | 142,070 | - | 31,865 | 173,935 | |||||||||||||
Exploration cost recovery | (30,680 | ) | - | - | (30,680 | ) | |||||||||||
3,166,406 | 8,714 | 384,409 | 3,559,529 | ||||||||||||||
Cumulative exploration expense – September 30, 2020 | 5,708,750 | 8,714 | 1,221,542 | 6,939,006 |
- 8 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and nine months ended September 30, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
3. | EXPLORATION AND EVALUATION ASSETS (continued) | ||||||||||||||||
Newfoundland | |||||||||||||||||
Queensway(i) | Other | Ontario (ii) | Total | ||||||||||||||
Nine months ended September 30, 2019 | $ | $ | $ | $ | |||||||||||||
Exploration and evaluation assets | |||||||||||||||||
Balance as at December 31, 2018 | 276,330 | 107,835 | 293,516 | 677,681 | |||||||||||||
Additions | |||||||||||||||||
Acquisition costs | 132,370 | - | 62,000 | 194,370 | |||||||||||||
Impairment of exploration and evaluation assets | - | (45,000 | ) | - | (45,000 | ) | |||||||||||
Balance as at September 30, 2019 | 408,700 | 62,835 | 355,516 | 827,051 | |||||||||||||
Exploration and evaluation expenditures | |||||||||||||||||
Cumulative exploration expense - December 31, 2018 | 1,890,601 | - | 831,337 | 2,721,938 | |||||||||||||
Assays | 6,648 | - | 1,502 | 8,150 | |||||||||||||
Geophysics | 136,969 | - | - | 136,969 | |||||||||||||
Property taxes, mining leases and rent | 34,700 | - | 3,512 | 38,212 | |||||||||||||
Salaries & consulting | 81,867 | - | - | 81,867 | |||||||||||||
Supplies & equipment | 47,703 | - | - | 47,703 | |||||||||||||
Travel & accommodations | 4,360 | - | - | 4,360 | |||||||||||||
Exploration cost recovery | (36,821 | ) | - | (36,821 | ) | ||||||||||||
275,426 | - | 5,014 | 280,440 | ||||||||||||||
Cumulative exploration expense – September 30, 2019 | 2,166,027 | - | 836,351 | 3,002,378 |
(i) Queensway Project – Gander, Newfoundland
As at September 30, 2020, the Company owns a 100% interest in 86 mineral licenses including 6,041 claims comprising 151,030 hectares of land located in Gander, Newfoundland. The project rights were acquired by map staking mineral licenses and making staged payments in cash and common shares of the Company from 2016 through 2019 under nine separate, fully executed option agreements. The optioned lands carry various net smelter return (“NSR”) royalties ranging from 0.6% to 2.0% which can be reduced to 0.5% to 1.0%, at the Company’s option, with payments ranging from $250,000 to $1,000,000 to the optionors. The total cost of the NSR’s that may be purchased at the Company’s discretion is $5,250,000.
(ii) Ontario Projects
As at September 30, 2020, the Company owns a 100% interest in the Lucky Strike project in Kirkland Lake, Ontario comprising 11,631 hectares, as well as a portfolio of mining and royalty interests throughout northeastern Ontario. The project rights were acquired by map staking mineral licenses and making staged payments in cash and common shares of the Company from 2016 through 2019 under a fully executed option agreement. The optioned lands carry an NSR of 1%.
- 9 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and nine months ended September 30, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
4. | PROPERTY AND EQUIPMENT |
Property and | Computer | Geological | ||||||||||||||
Buildings | Equipment | Equipment | Vehicles | Total | ||||||||||||
Cost | $ | $ | $ | $ | $ | |||||||||||
Balance at December 31, 2019 | - | - | - | 45,949 | 45,949 | |||||||||||
Additions | 329,461 | 15,860 | 249,026 | 257,363 | 851,710 | |||||||||||
Balance at September 30, 2020 | 329,461 | 15,860 | 249,026 | 303,312 | 897,659 | |||||||||||
Accumulated Depreciation | ||||||||||||||||
Balance at December 31, 2019 | - | - | - | 16,800 | 16,800 | |||||||||||
Depreciation | 1,450 | 2,108 | 11,561 | 20,320 | 35,439 | |||||||||||
Balance at September 30, 2020 | 1,450 | 2,108 | 11,561 | 37,120 | 52,239 | |||||||||||
Carrying Amount | ||||||||||||||||
At December 31, 2019 | - | - | - | 29,149 | 29,149 | |||||||||||
At September 30, 2020 | 328,011 | 13,752 | 237,465 | 266,192 | 845,420 |
5. | INVESTMENTS |
The Company classifies its investments as subsequently measured at FVTPL. Realized gains and losses on disposal of investments and unrealized gains and losses in the fair value of investments are reflected in the statement of income (loss) and comprehensive income (loss) in the period in which they occur.
The fair value and cost of investments as at September 30, 2020 and December 31, 2019 are as follows:
Fair Value | Cost | |||||||
$ | $ | |||||||
September 30, 2020 | 24,014,142 | 17,323,030 | ||||||
December 31, 2019 | 114,937 | 586,920 |
An analysis of investments including related gains and losses for the nine months ended September 30, 2020 and 2019 is as follows:
Nine months ended September 30, | ||||||
2020 | 2019 | |||||
$ | $ | |||||
Investments, beginning of period | 114,937 | 398,102 | ||||
Investments acquired in private placement | 16,736,110 | - | ||||
Disposition of investments | - | (280,786 | ) | |||
Realized (loss) on investments | - | (120,734 | ) | |||
Unrealized gain on investments | 7,163,095 | 42,043 | ||||
Investments, end of period | 24,014,142 | 38,625 |
- 10 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and nine months ended September 30, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
6. | PREPAID EXPENSES AND DEPOSITS |
September 30, | December 31, | ||||||
2020 | 2019 | ||||||
$ | $ | ||||||
Prepaid expenses | 813,331 | 6,570 | |||||
Mineral license deposits | 539,538 | 429,866 | |||||
Prepaid expenses and deposits, end of period | 1,352,869 | 436,436 |
7. | FLOW-THROUGH SHARE PREMIUM |
Issued | Issued | |||||||||
June 4, 2020 | June 10, 2020 | Total | ||||||||
$ | $ | $ | ||||||||
Balance at December 31, 2019 | - | - | - | |||||||
Liability incurred on flow-through shares issued | 1,697,704 | 259,915 | 1,957,619 | |||||||
Settlement of flow-through share premium on expenditures incurred | (587,098 | ) | - | (587,098 | ) | |||||
Balance at September 30, 2020 | 1,110,606 | 259,915 | 1,370,521 |
Flow-through share arrangements entitle the holder of the flow-through share to a 100% tax deduction in respect of qualifying Canadian exploration expenses as defined in the Income Tax Act, Canada (“Qualifying CEE”). At September 30, 2020, the Company incurred $2,134,776 (December 31, 2020 - $Nil) in Qualifying CEE and amortized a total of $587,098 of its flow-through liabilities.
The flow-through premium liability does not represent a cash liability to the Company and is to be fully amortized to the statement of comprehensive income (loss) pro-rata with the amount of qualifying expenditures that will be incurred.
As at September 30, 2020, the Company must spend another $4,983,420 of Qualifying CEE within two years to satisfy its remaining flow-through obligations.
8. | SHARE CAPITAL AND RESERVES |
Authorized Share Capital
At September 30, 2020, the authorized share capital comprised an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.
Details of Common Shares Issued in 2020
During the nine months ended September 30, 2020, 3,115,000 stock options were exercised at a weighted average exercise price of $0.31 per share for gross proceeds of $959,500.
During the nine months ended September 30, 2020, 16,000,000 warrants were exercised at a weighted average exercise price of $0.75 per share for gross proceeds of $12,000,000.
On March 6, 2020, the Company completed a private placement consisting of 15,000,000 common shares in exchange for non-cash consideration of 6,944,444 common shares of Novo Resources Corp. (TSXV: NVO) at a price of $2.41 per share for gross proceeds of $16,736,110.
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New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and nine months ended September 30, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
8. | SHARE CAPITAL AND RESERVES (continued) |
On June 4, 2020, the Company completed a non-brokered private placement financing of 3,994,597 flow-through common shares at a price of $1.50 per common share for gross proceeds of $5,991,896. Finders’ fees paid were $69,394 in cash and the issuance of 64,282 warrants exercisable into common shares of the Company at $1.50 per share for two years from the date of issue with a fair value of $25,912. The premium received on the flow-through shares issued was determined to be $1,690,704.
On June 10, 2020, the Company completed a non-brokered private placement financing of 866,385 flow-through common shares at a price of $1.30 per common share for gross proceeds of $1,126,300. Finders’ fees paid were $56,793 in cash and the issuance of 43,582 warrants exercisable into common shares of the Company at $1.30 per share for two years from the date of issue with a fair value of $16,271. The premium received on the flow-through shares issued was determined to be $259,915.
On August 11, 2020, the Company completed an initial public offering of 21,000,000 common shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 14, 2020, its agents exercised their overallotment option in full to offer and sell an additional 3,150,000 common shares for gross proceeds of $4,095,000. The Company paid share issuance costs of $2,906,419 in cash and issued 1,379,768 agents’ warrants with a fair value of $749,067. The agents’ warrants are exercisable into common shares of the Company at $1.30 for 12 months from the date of issue in connection with the initial public offering.
Details of Common Shares Issued in 2019
During fiscal 2019, the Company issued 517,499 common shares at $0.40 per share totaling $207,000, pursuant to the acquisition of exploration and evaluation assets in accordance with the terms of certain property option agreements.
During fiscal 2019, 2,930,000 stock options were exercised at $0.15 per share for gross proceeds of $439,500
On June 18, 2019, the Company completed a non-brokered private placement financing of 1,875,000 common shares at $0.40 per share for gross proceeds of $750,000.
On July 3, 2019, the Company completed a non-brokered private placement financing of 1,250,000 common shares at $0.40 per share for gross proceeds of $500,000.
On November 29, 2019, the Company completed a non-brokered private placement financing of 16,000,000 units at $0.50 per unit for gross proceeds of $8,000,000. Each unit consisted of one common share and one warrant. The warrants were valued at $2,252,458. Each warrant entitles the holder to purchase one additional common share at a price of $0.75 per share for three years from the issuance date.
Share Purchase Option Compensation Plan
The Company has a share purchase option plan (the “Plan”) approved by the Company’s shareholders that allows it to grant share purchase options, subject to regulatory terms and approval, to its officers, directors, employees and service providers. The Plan is based on the maximum number of eligible shares not exceeding 10% in the aggregate and 5% with respect to any one optionee of the Company’s outstanding common shares at the time of grant. If outstanding share purchase options are exercised or expire, and/or the number of issued and outstanding common shares of the Company increases, then the share purchase options available to grant under the Plan increase proportionately. The exercise price and vesting terms of each share purchase option is set by the Board of Directors at the time of grant. Share purchase options granted are subject to a four-month hold period and exercisable for a period determined by the Board of Directors which cannot exceed five years.
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New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and nine months ended September 30, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
8. | SHARE CAPITAL AND RESERVES (continued) |
The continuity of share purchase options for the nine months ended September 30, 2020 is as follows:
Outstanding | Outstanding | Exercisable | ||||||||||||||||||||||||||
Exercise | December 31, | Cancelled/ | September 30, | September 30, | ||||||||||||||||||||||||
Expiry date | Price | 2019 | Granted | Exercised | Expired | 2020 | 2020 | |||||||||||||||||||||
February 20, 2022 | $ | 0.15 | 1,930,000 | - | (1,680,000 | ) | - | 250,000 | 250,000 | |||||||||||||||||||
September 30, 2023 | $ | 0.40 | 350,000 | - | (100,000 | ) | - | 250,000 | 250,000 | |||||||||||||||||||
December 17, 2024 | $ | 0.50 | 5,605,000 | - | (1,335,000 | ) | - | 4,270,000 | 4,270,000 | |||||||||||||||||||
April 18, 2025 | $ | 1.00 | - | 2,300,000 | - | - | 2,300,000 | 2,300,000 | ||||||||||||||||||||
May 23, 2025 | $ | 1.075 | - | 1,670,000 | - | - | 1,670,000 | 1,670,000 | ||||||||||||||||||||
August 11, 2025 | $ | 1.40 | - | 5,040,000 | - | 5,040,000 | 5,040,000 | |||||||||||||||||||||
September 3, 2025 | $ | 2.07 | - | 215,000 | - | 215,000 | 215,000 | |||||||||||||||||||||
7,885,000 | 9,225,000 | (3,115,000 | ) | - | 13,995,000 | 13,995,000 | ||||||||||||||||||||||
Weighted average exercise price $ | 0.41 | 1.26 | 0.31 | - | 0.99 | 0.99 | ||||||||||||||||||||||
Weighted average contractual remaining life (years) | 4.22 | 4.75 | - | - | 4.50 | 4.50 |
The continuity of share purchase options for the nine months ended September 30, 2019 is as follows:
Outstanding | Outstanding | Exercisable | ||||||||||||||||||||||||||
Exercise | December 31, | Cancelled/ | September 30, | September 30, | ||||||||||||||||||||||||
Expiry date | Price | 2018 | Granted | Exercised | Expired | 2019 | 2019 | |||||||||||||||||||||
February 20, 2022 | $ | 0.15 | 4,860,000 | - | (430,000 | ) | - | 4,430,000 | 4,430,000 | |||||||||||||||||||
September 30, 2023 | $ | 0.40 | 350,000 | - | - | - | 350,000 | 350,000 | ||||||||||||||||||||
5,210,000 | - | (430,000 | ) | - | 4,780,000 | 4,780,000 | ||||||||||||||||||||||
Weighted average exercise price $ | 0.17 | - | 0.15 | - | 0.17 | 0.17 | ||||||||||||||||||||||
Weighted average contractual remaining life (years) | 3.18 | - | - | - | 2.39 | 2.39 |
The weighted average fair value of share purchase options exercised during the nine months ended September 30, 2020 is $0.22 (nine months ended September 30, 2019 - $0.08).
The weighted average fair value of share purchase options granted during the nine months ended September 30, 2020 is $0.92 (nine months ended September 30, 2019 - $Nil).
Options were priced based on the Black-Scholes option pricing model using the following weighted average assumptions to estimate the fair value of options granted:
Nine months ended September 30, | ||||||||
2020 | 2019 | |||||||
Risk-free interest rate | 0.40 | % | - | |||||
Expected option life in years | 5.0 | - | ||||||
Expected share price volatility(i) | 99.25 | % | - | |||||
Grant date share price | 1.26 | - | ||||||
Expected forfeiture rate | - | - | ||||||
Expected dividend yield | - | - |
(i) | The expected share price volatility is based on the average historical share price of comparable companies over the life of the option. |
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New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and nine months ended September 30, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
8. | SHARE CAPITAL AND RESERVES (continued) |
Warrants
The continuity of warrants for the nine months ended September 30, 2020 is as follows:
Outstanding | Outstanding | |||||||||||||||||||||||
Exercise | December 31, | Cancelled/ | September 30, | |||||||||||||||||||||
Expiry date | Price | 2019 | Issued | Exercised | Expired | 2020 | ||||||||||||||||||
August 11, 2021 | $ | 1.30 | - | 1,379,768 | - | - | 1,379,768 | |||||||||||||||||
May 12, 2022 | $ | 1.30 | - | 39,475 | - | - | 39,475 | |||||||||||||||||
May 13, 2022 | $ | 1.50 | - | 36,052 | - | - | 36,052 | |||||||||||||||||
June 4, 2022 | $ | 1.50 | - | 28,230 | - | - | 28,230 | |||||||||||||||||
June 10, 2022 | $ | 1.30 | - | 4,107 | - | - | 4,107 | |||||||||||||||||
November 29, 2022 | $ | 0.75 | 16,000,000 | - | (16,000,000 | ) | - | - | ||||||||||||||||
16,000,000 | 1,487,632 | (16,000,000 | ) | - | 1,487,632 | |||||||||||||||||||
Weighted average exercise price $ | 0.75 | 1.31 | 0.75 | - | 1.31 | |||||||||||||||||||
Weighted average contractual remaining life (years) | 2.92 | 0.92 | - | - | 0.92 |
The Company did not have any warrants outstanding at September 30, 2019.
The weighted average fair value of warrants exercised during the nine months ended September 30, 2020 is $0.14 (nine months ended September 30, 2019 - $Nil).
The weighted average fair value of warrants issued during the nine months ended September 30, 2020 is $0.53 (nine months ended September 30, 2019 - $Nil).
Warrants were priced based on the Black-Scholes option pricing model using the following weighted average assumptions to estimate the fair value of warrants issued:
Nine months ended September 30, | ||||||||
2020 | 2019 | |||||||
Risk-free interest rate | 0.25 | % | - | |||||
Expected option life in years | 1.07 | - | ||||||
Expected share price volatility(i) | 91.93 | % | - | |||||
Grant date share price | 1.38 | - | ||||||
Expected forfeiture rate | - | - | ||||||
Expected dividend yield | - | - |
(i) | The expected share price volatility is based on the average historical share price of comparable companies over the life of the option. |
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New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and nine months ended September 30, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
9. | RELATED PARTY BALANCES AND TRANSACTIONS |
All transactions with related parties have occurred in the normal course of operations and on terms and conditions that are similar to those of transactions with unrelated parties and are measured at the amount of consideration paid or received. A summary of the Company’s related party transactions with corporations having similar directors and officers, being Goldspot Discoveries Inc., is as follows:
Nine months ended September 30, | ||||||||
2020 | 2019 | |||||||
$ | $ | |||||||
Amounts paid to Goldspot Discoveries Inc. (i) for administration, exploration and evaluation | 123,815 | 154,500 | ||||||
Options exercised by members of key management | 500,000 | - |
(i) | Goldspot Discoveries Inc. is a related entity having the following common director and officer to the Company: Denis Laviolette, Director and President. |
Key management personnel compensation
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers.
During the nine months ended September 30, 2020, key management personnel compensation totaled $8,776,770 (nine months ended September 30, 2019 - $377,500) comprised of salaries and consulting of $1,349,653 (nine months ended September 30, 2019 - $377,500) paid to the Chief Financial Officer, the
Chief Operating Officer and companies controlled by the Company’s Chief Executive Officer and Executive
Chairman, and share-based compensation of $7,427,117 (nine months ended September 30, 2019 - $Nil) relating to 8,030,000 (nine months ended September 30, 2019 – Nil) stock options granted to directors and officers of the Company.
As at September 30, 2020, $27,083 is included in accounts payable and accrued liabilities for amounts owed to the Chief Operating Officer (nine months ended September 30, 2019 - $12,242).
On January 26, 2020 the Company entered into a binding letter agreement with Mexican Gold Mining Corp.
(“MGMC”) to have all of the issued and outstanding shares of the Company acquired by MGMC. On
February 19, 2020, the Company announced that the binding letter agreement was mutually terminated. During the nine months ended September 30, 2020, the Company paid $127,234 to MGMC for legal fees incurred in connection with the transaction which was terminated.
There are no ongoing contractual commitments resulting from these transactions with related parties.
10. | LOSS PER SHARE | ||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||
Loss attributable to common shareholders ($) | 11,110,168 | 85,022 | 7,029,249 | 937,448 | |||||||||||||
Weighted average number of common shares outstanding | 126,598,583 | 58,030,006 | 102,445,597 | 57,860,349 | |||||||||||||
Loss per share attributed to common shareholders | $ | 0.09 | $ | 0.00 | $ | 0.07 | $ | 0.02 |
- 15 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and nine months ended September 30, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
10. | LOSS PER SHARE (continued) |
Diluted loss per share did not include the effect of 13,995,000 (2019 – 4,780,000) share purchase options and 1,487,632 (2019 – Nil) common share purchase warrants as they are anti-dilutive.
11. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS |
Nine months ended September 30, | ||||||||
2020 | 2019 | |||||||
$ | $ | |||||||
Non-cash investing and financing activities: | ||||||||
Investments received for private placement | 16,736,110 | - | ||||||
Agents warrants issued in private placements | 791,250 | - | ||||||
Cash paid for income taxes | - | - | ||||||
Cash paid for interest | - | - |
12. | SEGMENTED INFORMATION |
The Company’s operations are limited to a single reportable segment, being mineral exploration and evaluation. All of the Company’s evaluation and exploration assets are located in Canada.
13. | COMMITMENTS |
The Company is required to spend approximately $1,481,005 over the next 12 months to keep all claims owned in good standing.
14. | FINANCIAL INSTRUMENTS |
The Company thoroughly examines the various financial instrument risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include credit risk, liquidity risk, currency risk, and interest rate risk. Where material, these risks are reviewed and monitored by the Board of Directors.
(a) Fair Values
Financial assets and liabilities measured at fair value are recognized according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy are as follows:
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2 – Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
The Company’s only financial instrument measured at fair value are its investments, for which the fair value is determined using closing prices at the statement of financial position date with any unrealized gain or loss recognized in profit or loss.
- 16 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and nine months ended September 30, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
14. | FINANCIAL INSTRUMENTS (continued) |
The carrying values of other financial instruments, including cash, deposits and amounts receivable, and accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of these financial instruments.
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||
Recurring measurements | Carrying amount | Fair value | |||||||||||||||||
Investments, at fair value | |||||||||||||||||||
September 30, 2020 | 24,014,142 | 24,014,142 | - | - | 24,014,142 | ||||||||||||||
December 31, 2019 | 114,937 | 114,937 | - | - | 114,937 |
(b) Financial Instrument Risk Exposure
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company does not have financial instruments that potentially subject the Company to credit risk. Overall, the Company’s credit risk has not changed significantly from the prior year. Sales taxes recoverable are due from the Canada Revenue Agency and the Company places its cash with financial institutions with high credit ratings, therefore in management’s judgment, credit risk is low.
There have been no changes in management’s methods for managing credit risk since December 31, 2019.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has in place a planning and budgeting process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. The Company has historically relied on issuance of shares to fund exploration programs and may require doing so again in the future. As at September 30, 2020, the Company has total liabilities of $2,047,094 and cash of $47,862,000 which is available to discharge these liabilities (December 31, 2019 – total liabilities of $392,849 and cash of $7,336,638). Accordingly, in management’s judgment, liquidity risk is low.
There have been no changes in management’s methods for managing liquidity risk since December 31, 2019.
Market risk
(i) Currency risk
Financial instruments that impact the Company’s net earnings or other comprehensive income due to currency fluctuation include cash accounts denominated in US dollars and investments denominated in Australian dollars. Fluctuations in the exchange rate between the US dollar and the Canadian dollar at September 30, 2020 would not have a material impact on the Company’s net earnings and other comprehensive income. The sensitivity of the Company’s net earnings and other comprehensive income to changes in the exchange rate between the Canadian dollar and the Australian dollar at September 30, 2020 would change the company’s net loss (income) by $47,248 as a result of a 10% change in the Canadian dollar exchange rate relative to the Australian dollar.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. As the Company deposits its short-term investments into fixed rate guaranteed investment certificates with one-year maturities or less, the Company is not exposed to interest rate risk.
- 17 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and nine months ended September 30, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
14. | FINANCIAL INSTRUMENTS (continued) |
(iii) Commodity price risk
Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company’s property has exposure to predominantly gold. Commodity prices, especially gold, greatly affect the value of the Company and the potential value of its property and investments.
(iv) Equity price risk
Equity price risk is the risk that the fair value of or future cash flows from the Company’s financial instruments will significantly fluctuate because of changes in market prices. The Company is exposed to market risk in trading its investments in unfavorable market conditions which could result in dispositions of investments at less than favorable prices. Additionally, the Company adjusts its investments to fair value at the end of each reporting period. This process could result in write-downs of the Company’s investments over one or more reporting periods, particularly during periods of overall market instability. The sensitivity of the Company’s net income (loss) to changes in market prices at September 30, 2020 would change the Company’s net income (loss) by $2,401,414, as a result of a 10% change in the market price of its investments.
There have been no changes in management’s methods for managing market risks since December 31, 2019.
15. | CAPITAL MANAGEMENT |
The Company’s objectives when managing capital are:
• | To safeguard our ability to continue as a going concern in order to develop and operate our current projects; |
• | Pursue strategic growth initiatives; and |
• | To maintain a flexible capital structure which lowers the cost of capital. |
In assessing our capital structure, we include in our assessment the components of equity consisting of common shares, stock options and warrants, and deficit that as at September 30, 2020 totalled $73,669,233 (December 31, 2019 - $8,962,187). In order to facilitate the management of capital requirements, the Company prepares annual expenditure budgets and continuously monitors and reviews actual and forecasted cash flows. The annual and updated budgets are monitored and approved by the Board of Directors. To maintain or adjust the capital structure, the Company may, from time to time, issue new shares, issue new debt, repay debt or dispose of non-core assets. The Company’s current capital resources are sufficient to carry out our exploration plans and support operations through the current operating period.
The Company is not subject to any capital requirements imposed by a regulator.
There were no changes in the Company’s approach to capital management during the nine months ended September 30, 2020.
16. | SUBSEQUENT EVENTS |
Stock Options Exercised
Subsequent to September 30, 2020, 575,000 stock options were exercised at a weighted average price of $0.50 for gross proceeds of $290,000.
- 18 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the three and nine months ended September 30, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
16. | SUBSEQUENT EVENTS (continued) |
Stock Options Granted
Subsequent to September 30, 2020, 25,000 stock options were granted at an exercise price of $2.15 and an expiry date of October 1, 2025.
Warrants Exercised
Subsequent to September 30, 2020, 554,292 warrants were exercised at a price of $1.30 for gross proceeds of $721,057.
- 19 -
Exhibit 99.11
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
The following discussion is management’s assessment and analysis of the results and financial condition of New Found Gold Corp. (the “Company” or “NFG”) and should be read in conjunction with the accompanying unaudited condensed interim financial statements and related notes. The financial data was prepared using accounting policies consistent with International Financial Reporting Standards (“IFRS”) and all figures are reported in Canadian dollars unless otherwise indicated.
This MD&A contains forward-looking information and forward-looking statements, within the meaning of applicable Canadian securities legislation, (collectively, “forward-looking statements”), that involve numerous risks and uncertainties. The Company continually seeks to minimize its exposure to business risks, but by the nature of its business and exploration activities and size, will always have some risk. These risks are not always quantifiable due to their uncertain nature. Should one or more of these risks and uncertainties, including those described under the headings “Risks and Uncertainties” and “Cautionary Notes Regarding Forward-Looking Statements” materialize, or should underlying assumptions prove incorrect, then actual results may vary materially from those expressed or implied in forward-looking statements. The effective date of this report is August 26, 2020.
The scientific and technical information contained in this MD&A has been reviewed and approved by the Company’s Chief Operating Officer, Greg Matheson, P.Geo., a Qualified Person as defined by National Instrument 43-101- Standards of Disclosure for Mineral Projects (“NI 43-101”). The scientific and technical information in this MD&A relating to the Queensway Project is derived from, and in some instances is a direct extract from, and is based on the assumptions, qualifications and procedures set out in, the report entitled “Technical Report on the Queensway Gold Project, Newfoundland, Canada” with an effective date of April 15, 2020, prepared in accordance with NI 43-101 (the “Queensway Technical Report”). Reference should be made to the full text of the Queensway Technical Report, which is available for review under the Company’s profile on SEDAR at www.sedar.com.
Description of Business
The Company was incorporated on January 6, 2016, under the Business Corporations Act (Ontario). On June 23, 2020, the Company continued as a British Columbia corporation under the Business Corporation Act in the province of British Columbia. The Company’s head office is located at 1430 – 800 West Pender Street, Vancouver, British Columbia V6C 2V6, and its registered office is located at Suite 2600 – 595 Burrard Street, Vancouver, British Columbia V7X 1L3.On August 11, 2020, the Company completed an initial public offering and listed on the TSX Venture Exchange under the symbol “NFG”.
The Company is a mineral exploration company engaged in the acquisition, exploration and evaluation of resource properties with a focus on gold properties located in the Provinces of Newfoundland and Labrador and Ontario, Canada. The Company’s principal objective is to explore and develop the Queensway Project, which is located near Gander, Newfoundland and to identify other properties worthy of investment and exploration. For the purpose of NI 43-101, the Queensway Project is the Company’s only material property.
The Queensway Project is comprised of 86 mineral licenses, including 6,041 claims comprising 151,030 hectares of land located near Gander, Newfoundland. The Queensway Project is accessible by main access roads including the Trans-Canada Highway (“TCH”) that passes through the southern portion of the project and has high voltage electric transmission lines running through the project area. In addition, the Company owns a 100% interest in the Lucky Strike project in Kirkland Lake, Ontario comprising 11,441 hectares, as well as a portfolio of mining and royalty interests throughout northeastern Ontario. The Lucky Strike Property is located 10km north of Larder Lake, Ontario and is comprised of 548 single cell un-patented mining claims. The Company is well financed to advance its planned exploration activities on the projects as intended.
As of the date of this MD&A, the Company’s Board of Directors consisted of the following: Collin Kettell (Executive Chairman), Craig Roberts, Denis Laviolette, John Anderson and Quinton Hennigh.
Additional information relating to the Company is available on the Company’s website at www.newfoundgold.ca.
- 1 -
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Project Summary
Queensway Project, Newfoundland
Ownership
The Queensway Project contains nine optioned claim packages along with mineral licenses map staked by NFG. The Company acquired the rights to the Queensway Project by map staking mineral licenses and making a series of staged payments in cash and common shares of the Company from 2016 through 2020 under nine separate option agreements. All of the option agreements have been fully exercised resulting in 100% ownership by NFG of the mineral licenses related to such option agreements. During Q2 2020 the Company completed all the requirements under the Unity Option agreement resulting in a 100% ownership of the Queensway Project. In addition to the nine option agreements, NFG also conducted map staking resulting in 49 map staked mineral licenses which are held 100% by NFG. The optioned lands also carry various net smelter royalties and the option agreements are described in detail below and their location can be seen in the figure below.
Queensway Project – Royalties Agreements and Encumbrances
- 2 -
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
1. | Linear and JBP Linear Property, NL - In July 2016, the Company acquired a 100% interest in the Linear and JBP Linear Property via an option agreement with Krinor Resources, Kevin Keats and Allan Keats. The Linear and JBP Linear property is comprised of six map staked licences covering 2,150 hectares and under the terms of the agreement the Company is to pay the optionor a total of $54,000 and issue 45,000 shares over a 36-month period; the agreement was fully executed in July 2019. A net smelter royalty grant of 0.6% is payable to the optionor along with an underlying net smelter royalty of 1.0% covering five of the six claims is payable to Paragon Minerals Corporation. This agreement contains a 2 km area of influence that subjects adjacent lands to the additional 0.6% net smelter royalty. |
2. | Unity Property, NL - In September 2016, the Company acquired a 100% interest in the Unity Property via an option agreement with Unity Resources Inc., Gary Lewis, Donna Lewis, Nigel Lewis, Leonard Lewis, and Aubrey Budgell. The unity property is comprised of ten map staked licences covering 8,150 hectares and under the terms of the agreement the Company is to pay the optionor a total of $90,000 over a 60-month period; the agreement was fully executed in June 2020. A net smelter royalty grant of 1.6% is payable to the optionor which can be reduced by 1.0% by paying the optionor $1,000,000. |
3. | United Gold Property, NL - In October 2016, the Company acquired a 100% interest in the United Gold Property via an option agreement with Noreen Kennedy. The United Gold property is comprised of one map staked licence covering 275 hectares and under the terms of the agreement the Company is to pay the optionor a total of $16,500 and $16,500 worth of shares are to be issued over a 6-month period; this option agreement has been fully executed and the Company is the sole owner of the property. A net smelter royalty grant of 0.6% is payable to the optionor. This agreement contains a 2 km area of influence that subjects adjacent lands but is bounded to areas east and north of the subject lands and does not impact any other optioned property. |
4. | Golden Bullet Property, NL - In November 2016, the Company acquired a 100% interest in the Golden Bullet Property via an option agreement with Roland Quinlan, Eddie Quinlan and Larry Quinlan. The Golden Bullet property is comprised of four map staked licences covering 1,200 hectares and under the terms of the agreement the Company is to pay the optionor a total of $125,000 and $100,000 worth of common shares of NFG are to be issued over a 36-month period; the option was fully executed in November 2019 resulting in a 100% ownership by NFG. A net smelter royalty grant of 1.6% is payable to the optionor which can be reduced by 1.0% by paying the optionor $1,000,000. This agreement contains a 2 km area of influence that subjects adjacent lands but is limited to lands acquired after the agreement date. |
5. | Blackmore Property, NL - In December 2016, the Company acquired a 100% interest in the Blackmore Property via an option agreement with Neal Blackmore. The Blackmore property is comprised of two map staked licences covering 175 hectares and under the terms of the agreement the Company is to pay the optionor a total of $10,000; this option agreement has been fully executed and the Company is the sole owner of the property. A net smelter royalty grant of 0.6% is payable to the optionor. |
6. | Guinchard Property, NL - In April 2017, the Company acquired a 100% interest in the Guinchard Property via an option agreement with Wayde Guinchard, Myrtle Guinchard and Peter Rogers. The Guinchard property is comprised of five map staked licences covering 625 hectares and under the terms of the agreement the Company is to pay the optionor a total of $45,000 and 105,000 shares over a 24-month period; the option was fully executed in April 2019 and the Company is the sole owner of the property. A net smelter royalty grant of 1.0% is payable to the optionor which can be reduced by 0.5% by paying the optionor $1,000,000. |
7. | JBP Linear Property, NL - In May 2017, the Company acquired a 100% interest in the JBP Linear Property via an option agreement with Roland Quinlan and Eddie Quinlan. The JBP Linear property is comprised of five map staked licences covering 1250 hectares and under the terms of the agreement the Company is to pay the optionor a total of $45,000 over a 24-month period; the option was fully executed in November 2019 and the Company is the sole owner of the property; although claim transfers are pending at the time of the report. A net smelter royalty grant of 1.6% is payable to the optionor which can be reduced by 1.0% by paying the optionor $1,000,000. |
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Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
8. | P-Pond Property, NL - In May 2017, the Company acquired a 100% interest in the P-Pond Property via an option agreement with Stephen Stockley, Mark Stockley and Edward Stockley. The P-Pond property is comprised of three map staked licences covering 175 hectares and under the terms of the agreement the Company is to pay the optionor a total of $30,000 and $10,000 worth of shares are to be issued over a 12-month period; this option agreement has been fully executed and the Company is the sole owner of the property. A net smelter royalty grant of 1.0% is payable to the optionor which can be reduced by 0.5% by paying the optionor $250,000. |
9. | Lush Property, NL - In September 2018, the Company acquired a 100% interest in the Lush Property via a purchase agreement with Paragon Minerals Corp. The Lush property is comprised of one map staked licence covering 50 hectares. Under the terms of the purchase agreement the Company is to grant a net smelter royalty of 0.5% payable to Paragon Minerals Corp along with an underlying net smelter royalty of 2.0% payable to Tom Lush which can be reduced by 1.0% by paying $1,000,000 to Tom Lush. |
10. | Queensway Map Staked Lands, NL - Between August 2016 and April 2017, the Company acquired a 100% interest of twenty-one licences covering 73,830 hectares through map staking. In April of 2020, an additional twenty-eight mineral licenses were staked totalling 64,175 hectares shown in the figure below: |
Environmental and Exploration Permitting
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Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
All exploration activities, including reclamation, must comply with all pertinent federal and provincial laws and regulations, the fundamental requirement of which, is that exploration on crown land must prevent unnecessary or undue degradation or impact on fish and wildlife and requires reclamation if any degradation or impacts that occur. All exploration activities in Newfoundland and Labrador require an Exploration Approval from the Department of Natural Resources prior to the start of work. In this, approval requirements for the exploration are listed with contacts for the various entities given. Two Exploration Approvals are in place as of the date of this MD&A.
The first Exploration Approval is for diamond drilling (50 Holes), surface trenching (50 trenches), ground geophysics, prospecting and geochemistry on the Gander Gold North (“GGN”) area. The second is for airborne geophysics, geochemical surveying and prospecting over the entire Queensway Project pre April 2020 shown as existing licenses above. The approvals expire one year from the date they are approved unless the exploration is completed earlier and is reported as being complete. Both permits will expire on December 5, 2020. Any changes to the planned work have to be submitted to the Department of Natural Resources and either an amended approval is given or a new application has to be made. Lands staked in April, 2020 will require new exploration approvals and are not covered by the existing exploration approvals.
Water removal from ponds / streams etc. for trenching (washing trenches) or drilling requires a Water Use Permit which is granted for 1 year. One water use permit is in place for the GGN claims and related diamond drilling and trenching. The permit is issued until December 5, 2020. This permit can be renewed, or new permit issued to cover ongoing exploration activities.
Generally, the mineral licenses are available for exploration activities year-round and only subject to the conditions of the exploration approvals and water use license; other activities such as construction, road building, camps and water crossings may require additional permits from outside of the mines department. Mineral licenses within the southernmost portion of Gander Gold South (“GGS”), specifically licenses 024557M, 024558M, 024561M, 024563M, 024568M, and 024570M are restricted from exploration activities from mid-May to early-July due to spring habitat for Newfoundland caribou.
Project Infrastructure
The main access roads include the TCH that passes through the southern portion of the Appleton Fault Zone (“AFZ”) / Joe Batts Pond Deformation Zone (“JBPDZ”) claim areas on the GGN, and the Northwest Gander (“NWG”) road that extends along the western portion of the property from the TCH just west of Glenwood, to the south and west of Gander Lake on the GGS. Gravel woods access roads originally built for the forestry industry, such as the AFZ access, the JBPDZ access, the JBP road and the roads to the east of the steel bridge across the NWG River and across the bridge to the east of the Southwest Gander River extend through most of the property, with areas in the extreme SE and SW the most difficult to access. The SW area is best accessed by woods roads from Route 360, the Baie D’Espoir highway, that leaves the TCH at Bishop’s Falls, approximately 70 km to the west of Glenwood.
Transportation availability includes the international airport at Gander which has bush plane and helicopter bases, a helicopter base in Appleton and shipping through the ports of Lewisporte and Botwood, 25 km and 70 km to the west respectively, and north of the TCH, both with good harbours although problems with winter shipping due to sea and pack ice.
Electricity is available from the NL provincial grid, which has three transmission lines through the Queensway Project as follows:
1) | A 350 kV HVdc direct current line which passes through the approximate centre of the GGS licences; |
2) | Two 138 kV HVac transmission lines to the north of the TCH crossing the AFZ and JBPDZ trends on the GGN licences; |
3) | A 69 kV HVac transmission line that approximately parallels the TCH to the north across the AFZ and JBPDZ trends on the GGN licences and follows the TCH and secondary routes. |
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Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
In addition, electrical power is supplied, through the provincial grid, to the towns of Glenwood and Appleton which are surrounded by the NFG Queensway licences.
Historical Work
To date there has been over 25,538 metres of core in 218 holes drilled historically on the Queensway Project by Noranda, Rubicon and various operators from the mid 1980’s through to 2012. Historical core drilling has primarily occurred north of Gander Lake along the two principal fault structures the AFZ and JBPDZ; the exploration drilling has been spread out amongst individual zones with drilling along 5 km of the AFZ targeting the Lotto, Powerline, Cokes, Keats, Dome, Trench 26, Road, Knob, Letha and Grouse Zones. Drilling at the JBPDZ has focussed along 3 km targeting the Pocket Pond and H-Pond zones and one drill hole targeting the 798 zone. Significantly lesser number of drill holes have also targeted zones south of Gander Lake including the Pauls Pond showing, Aztec and A-Zone extension and the Goose zone.
Throughout the 1980’s through mid-2000’s various operators and prospectors have completed surface geochemical sampling including tills, soils and rock samples. This amounts to roughly 1,200 till samples, over 60,000 soil samples and 4,000 rock samples spread across the large district scale project with concentrations of work around the many showings in the Queensway license group. This work has identified a number of gold in soil or gold in till anomalies that have led to surface gold discoveries or have yet to be explained with follow up exploration. Several locations throughout the project have defined surface float samples containing high grade gold mineralization some of which have led to surface gold occurrences while other locations have not been adequately explored to trace them to source.
Various historical ground geophysical surveys have been conducted throughout the Queensway Project with most of this work concentrated either along the AFZ, JBPDZ or in the region of the Paul’s Pond and Greenwood Pond showings in the GGS claim group. Over 50 different geophysical surveys including VLF, EM, MAG and IP have covered ground-based grids throughout the Queensway Project. Various anomalies have been identified and often limited follow up exploration has occurred.
A significant number of surface trenches have been conducted at the project with over 330 trenches. Many of the historical trenches have targeted soil and till anomalies with only some of these reaching bedrock; often the trenches not reaching bedrock have left both soil and till anomalies unexplained and open for further interpretation and exploration.
In 1994 Gander River Minerals optioned the Knob property including the Knob prospect from Noranda Exploration Co Ltd. Drilling by Gander River Minerals allowed for production of a historical resource estimate of 236,391 tonnes grading 10.26 g/t Au. This historical estimate was published by Gander River Minerals in the technical document titled “Eighth Year Assessment Report Summary of Diamond Drilling Activities Conducted Within Licence No. 4344 The ‘Knob’ Prospect N.T.S. 20/15” authored by Dean Sheppard, 1994 (Geofile 002D_0296).
The data used in the preparation of the historical resource estimate does not meet the current standards of exploration quality assurance and quality control protocols such that it should not be relied upon to produce a current resource estimate for the Knob prospect. Significant additional drilling and data verification would be required to ensure the quality of historic data meets current standards for use in a resource estimate. Additionally, the methods used in the preparation of the resource as a block long section methodology include certain assumptions of geological continuity and grade variography are not adequate to treat this as a current mineral resource estimate.
A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and the issuer is not treating the historical estimate as current mineral resources or mineral reserves.
- 6 -
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Project Geology
The Queensway Project is located within the Exploits subzone of the Dunnage zone and lies just to the west of the Gander River Ultramafic Complex (“GRUC”) fault, which is the Dunnage-Gander zones boundary. See figure below:
Queensway Project – Geological Overview Map
It mostly comprises Cambrian to Silurian meta-sedimentary rocks of the Davidsville group (Williams et al., 1988; Colman-Sadd et al., 1990; Valverde-Vaquero et al., 2006; van Staal, 2007; O’Reilly et al., 2010). The Davidsville group is divided into the Outflow Formation and the Hunt’s Cove Formation. The property south of Gander Lake also includes the boundary between the Davidsville and Indian Island groups. The latter mainly comprises Silurian siliciclastic rocks, intruded by the Mount Peyton Intrusive suite.
- 7 -
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
There are over 100 gold showings/occurrences on and around the Queensway Project however the most notable mineralized zones in the Queensway Project are the JBPDZ which includes the H-Pond, Pocket Pond, Glass, Logan and Lachlan showings and the AFZ which includes the Dome, Little, Knob, Letha, Lotto, Grouse, Road, Bullet, Trench 26, Cokes, Powerline, Keats and Bowater showings. A number of gold mineralized occurrences also occur within the GGS claim group including the Greenwood Pond, Hornet, North Pauls Pond, Aztec, Goose, Road Gabbro and LBNL showings.
Recent Exploration
NFG’s 2020 Drill Campaign
On August 17, 2020 the Company announced it had initiated a 100,000m HQ size diamond drilling program at the Queensway Project. This program is anticipated to be conducted over a 12-15 month period into 2021. Drilling started at the Little-Powerline trend and would progress through various targets within the Northern Queensway property including an initial 12,000m planned for the Keats Zone.
Queensway North – Plan Map of Initial 2020 Drilling Grid Lines/Zones
- 8 -
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Queensway North – Plan Map of Initial 2020 Drilling at Little-Powerline Trend
2020 Trenching Campaign
NFG began surface excavation of a number of targets starting in July 2020 and to date has completed 16 trenches of varying size; all of the excavation to date has occurred along the Appleton Fault Zone and includes trenching of the Little Zone, Hornet Zone, Road Zone as well as the discovery of two new zones (Regular Zone and Zone 36). Zone 36 is located 2.5 Km north-west of the Keats Zone and has been exposed along 120m of strike length and shows mineralization of Arsenopyrite, Pyrite, Chalcopyrite, Boulangerite and Visible Gold.
2020 Field Program
Starting in June 2020 the company initiated a field recognisance program within the Queensway South mineral licenses. The objective of this program is to conduct geological mapping, structural analysis, prospecting and the collection of C horizon till samples to be processed for gold grain analysis.
- 9 -
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
NFG’s 2019 Drill Campaign
The 2019 diamond drilling program at the AFZ comprised 586 metres of HQ diameter core in four holes completed between October 28, 2019 and November 17, 2019. Holes NFGC-19-01 and NFGC-19-02 were drilled to target the Keats Zone where historical drilling and trenching suggested gold mineralization was to occur. Holes NFGC-19-03 and NFGC-19-04 were drilled from a single setup at the Dome Showing to further evaluate known gold mineralization. The 2019 drill program was successful in identifying gold mineralization along the AFZ at both the Keats and Dome showings.
Drilling along the JBP Fault Zone in 2019 was comprised of six holes totalling 1,400m between November 17, 2019 and December 14, 2019 targeting the Glass zone and extensions of the H-Pond zone. Holes NFGC-19-05, 07, 08, 09, 10 targeted mineralization along both the Glass and H-Pond corridors while NFGC-19-06 only tested the Glass vein system, drill hole locations are show in the figure and table below:
Queensway Project – Plan Map of 2019 Drilling Program
- 10 -
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
BHID |
UTME
(NAD27) |
UTMN
(NAD27) |
ZPT | DIP | BRG |
LENGTH
(m) |
||||||||||||||||||
NFGC-19-01 | 658148 | 5427245 | 93 | -43.6 | 302.19 | 199 | ||||||||||||||||||
NFGC-19-02 | 658035 | 5427130 | 90 | -43.5 | 299.69 | 270 | ||||||||||||||||||
NFGC-19-03 | 658632 | 5428486 | 85 | -44.7 | 0.39 | 64 | ||||||||||||||||||
NFGC-19-04 | 658632 | 5428486 | 85 | -63.5 | 0.59 | 52 | ||||||||||||||||||
NFGC-19-05 | 664842.5 | 5430309 | 85 | -44.7 | 302.69 | 274 | ||||||||||||||||||
NFGC-19-06 | 664867 | 5430352.5 | 85 | -44.1 | 302.19 | 94.5 | ||||||||||||||||||
NFGC-19-07 | 664891 | 5430400 | 85 | -44.6 | 300.99 | 248 | ||||||||||||||||||
NFGC-19-08 | 664823 | 5430200 | 85 | -44.2 | 299.39 | 262 | ||||||||||||||||||
NFGC-19-09 | 665093 | 5430660 | 85 | -44.2 | 300.89 | 299.6 | ||||||||||||||||||
NFGC-19-10 | 665176 | 5430750 | 85 | -43.7 | 303.99 | 222.2 | ||||||||||||||||||
TOTAL | 1985.3 |
New Valley Company Ltd. Of Springdale, NL carried out the diamond drilling using an EF-50 skid rig equipped to drill HQ size core. Drill sites and moves were made possible with a dozer. The drill crew placed all core in labelled wooden boxes which were collected daily by New Found Gold personnel. All collars were marked with pickets and foresighted by NFG personnel using GPS receivers. All completed holes were plugged and cemented and finally marked with a metal post to identify the hole and act as a hazard warning. Downhole dip data was collected using the Reflex EZ Shot by the drill crews near the beginning and end of each hole with a 50m spacing between tests where possible. Core was also oriented using the Reflex HQ ACT-III system.
All completed diamond drill holes were plugged and cemented with the casing being left. A metal flag post was attached to the collar and labelled to identify each drill hole. Downhole hole orientation data was obtained by drill crews using the Reflex EZ-Gyro Single Shot. Where possible core was also orientated using the Reflex HQ ACT-III system.
All core was logged by NFG personnel in a core logging facility at Gander, NL. Samples were sawn in half and sent for sample preparation to ALS Minerals in either Timmins, ON or Moncton, NB with analysis being done in Vancouver, BC. Where visible gold was noted, or high values of gold suspected, samples were analysed using the pulp metallic method otherwise a standard Au + 41 element ICP method was used. The insertion of a blank or standard occurred every 10 samples switching between the blank and standard reference material using 3 different standards, OREAS 218, 224 and 255. The blank consisted of an un-mineralized red sandstone from a roadcut near Botwood, NL.
The samples with the highest potential for gold were assayed using the ALS Mineral multi analysis screen, gravimetric and ore grade analysis, methods include; Au-AA26 Ore Grade Au 50g FA AA Finish, Au-GRA22 Au 50g FA-GRAV Finish, and Au-SCR24C Au Screen FA Double minus 50g 2-3 Kg.
The 2019 diamond drilling program at the AFZ was designed to further evaluate the gold mineralization and quartz veining along the east side of the Appleton Fault Trend specifically at the Keats and the Dome Showings. The results of this drilling will be used in conjunction with historical data to plan future exploration along the Appleton trend. Drilling along the JBP Fault Zone in 2019 was comprised of six holes totalling 1,400m targeting the Glass zone and extensions of the H-Pond zone. Holes NFGC-19-05, 07, 08, 09, 10 targeted mineralization along both the Glass and H-Pond corridors while NFGC-19-06 only tested the Glass vein system.
- 11 -
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
NFGC-19-01 was planned to target 50 m vertically below historic drill hole LG08-48 at the Keats Zone. A significant gold mineralized zone was intercepted from 96 to 115 m grading 92.86g/t Au over 19.0 m including 285.2 g/t Au over 6.0 m containing considerable visible gold and wall rock sulphidation consisting of pyrite and lesser arsenopyrite. Within the quartz vein material traces of arsenopyrite, chalcopyrite and boulangerite were found. The zone was hosted in dark grey shale belonging to the Davidsville group and the quartz zone is spatially associated with a number of fault structures including one gouge zone up to 60cm in width. This is believed to be a second order structure to the Appleton fault and was intersected by all of the historic diamond drilling at the Keats zone but previously undocumented.
The vein intersection is the extension of the zone encountered in drill hole LG08-48 (50m above) and believed to be the extension of surface mineralization found in historical United Carina trench #3.
The quartz vein was notably vuggy and exhibiting textures associated with boiling events in epithermal gold zones. Possibly due to a flashing event within the larger mesothermal Appleton fault zone system.
A second mineralized fault structure was intersected at 177.5m with associated gold mineralization in lesser quartz stockwork from 177.5 to 180.0m depth grading 3.38g/t Au over 2.5m. Both fault zones intersected in the hole are believed to be secondary to the regional Appleton fault zone. Drilling did not continue in order to intersect the primary fault.
NFGC-19-02 also targeted the Keats zone located 160m south of NFGC-19-01 and targeting 50m vertically below historic drill hole LG99-12. This hole also intersected the second order fault structure found in NFGC-19-01 with associated narrower quartz veinlets and wall rock sulphidation (pyrite and arsenopyrite) and visible gold in quartz. The composite grade of the zone was 1.54 g/t Au over 12.0 m with one meter grading 5.45 g/t Au and containing visible gold. Exhibiting a similar width and structural control to NFGC-19-01 the results of this hole are promising as the Keats system is showing robust width and a known length up to 300m.
-12-
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Queensway Project – Plan Map of 2019 Drilling Program at the Keats Zone
NFGC-19-03 targeted the Dome showing main vein where historical drilling had previously intersected high grade gold mineralization. The main vein was intersected at a depth of 20.9 to 22.0 m with a second vein from 24.9 to 25.5 m and gave an overall composite grade of 16.52 g/t Au over 6.1m anchored by 162.5 g/t Au over 0.6 m.
NFGC-19-04 also targeted the Dome showing main vein and from the same setup but drilling at -60 degrees below NFGC-19-03; this hole intersected the main Dome vein from 28.3 to 29.7 m noting visible gold on the margin of the vein. This gave a composite average of 1.14 g/t Au over 8.0 m including one meter grading 4.61 g/t Au.
At the Dome showing visible gold mineralization appears to be primary confined to the margin of the vein. Of particular note was the apparent vuggy nature of the quartz and similarity to the veining intersected at the Keats zone suggestive that the emplacement mechanisms were similar.
NFGC-19-05, 06, 07, 08 were all drilled to target the Glass vein system which was discovered in 2017 and excavated by NFG in 2017 and again in 2018. All four holes were targeted to intersect the Glass vein system at shallow depths (<25m). The Glass vein system is believed to be a parallel vein system to the H-Pond zone approximately 100m to the west and drill holes NFGC-19-05, 07 and 08 were extended to intersect both vein systems.
The Glass vein array was noted in holes NFGC-19-05, 06 and 08 but gave poor gold results and visible mineralization was very limited.
-13-
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
NFGC-19-05 was successfully intersected a broad vein intercept within the H-Pond zone from 231.0 to 242.0m grading 2.35 g/t over 11.0 m including 6.73 g/t Au over 3.0 m as well as a second vein intersection from 268.0 to 269.0m grading 2.75 g/t Au over 1.0 m. This intercept has extended the known mineralized extents of the H-Pond zone by roughly 150 m along strike. The vein system was marked by significant iron-carbonate alteration zone. This is also one of the deepest intersections of the H-Pond zone to date.
NFGC-19-06, 07 and 08 failed to intersect any significant mineralization.
NFGC-19-09, 10 were both drilled along strike of the H-Pond and Glass vein systems along the JBPDZ and drilling in an area with very high gold in till results (1744 zone) and a significant number of visible gold bearing float samples which were interpreted to be derived from the JBPDZ. Both holes were successful in intersecting new vein systems as shown in figures below. The broad quartz intercept in NFGC-19-09 shows a nearly identical alteration and sulphide pattern to the intercept in NFGC-19-05 from the H-Pond zone. The intercept in NFGC-19-09 is believed to be an extension of the H-Pond by roughly 500m along strike. NFGC-19-09 intersected 4.39 g/t Au over 9.0 metres including 17.45 g/t Au over 2.0 metres from the well altered vein set thought to be the extension of the H-Pond zone. An intercept near the top of NFGC-19-10 with unknown correlation to NFGC-19-09 intersected 1.07 g/t Au over 4.0 metres and several lesser zones.
The 2019 drilling campaign was successful in identifying auriferous quartz veined zones of sufficient size, tenor and textural characteristics to warrant additional exploration. Based on the drill results to date, the Appleton Fault Trend has potential to host an Epizonal style Orogenic gold deposit with mineralization styles similar to those of the Fosterville Mine in Australia. The occurrence of vuggy veins with free gold and a blend of antimony mineral species including stibnite and boulangerite suggest a flash boiling event on a near mesothermal orogenic gold system such as seen at Fosterville.
Significant composite gold assay results are shown in the table below; the true widths of the mineralization in the below table is not known but estimated to be from 60-80% of the down hole composite width based on intersection angles and correlation to historical drilling.
- 14 -
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
2019 Diamond Drill Hole Significant Gold Composite Intercepts
Hole ID | From | To | Length(m) | Au (g/t) | Zone | |||||||||||||
NFGC-19-01 | 83.0 | 83.7 | 0.7 | 2.46 | Keats | |||||||||||||
NFGC-19-01 | 95.0 | 115.5 | 20.5 | 86.17 | ||||||||||||||
incl | 96.0 | 115.0 | 19.0 | 92.86 | Keats | |||||||||||||
incl | 105.0 | 111.0 | 6.0 | 285.20 | ||||||||||||||
NFGC-19-01 | 117.5 | 118.5 | 1.0 | 1.56 | Keats | |||||||||||||
NFGC-19-01 | 146.5 | 147.5 | 1.0 | 1.30 | Keats | |||||||||||||
NFGC-19-01 | 177.5 | 180.0 | 2.5 | 3.38 | Keats | |||||||||||||
NFGC-19-02 | 142.0 | 154.0 | 12.0 | 1.54 | Keats | |||||||||||||
incl | 142.0 | 143.0 | 1.0 | 5.45 | ||||||||||||||
NFGC-19-02 | 253.0 | 254.0 | 1.0 | 1.07 | Keats | |||||||||||||
NFGC-19-03 | 20.4 | 26.5 | 6.1 | 16.52 | Dome | |||||||||||||
incl | 20.9 | 21.5 | 0.6 | 162.50 | ||||||||||||||
NFGC-19-04 | 26.0 | 34.0 | 8.0 | 1.14 | Dome | |||||||||||||
incl | 29.0 | 30.0 | 1.0 | 4.61 | ||||||||||||||
NFGC-19-05 | 231.0 | 242.0 | 11.0 | 2.35 | H-Pond | |||||||||||||
incl | 231.0 | 234.0 | 3.0 | 6.73 | ||||||||||||||
NFGC-19-05 | 268.0 | 269.0 | 1.0 | 2.75 | H-Pond | |||||||||||||
NFGC-19-06 | NSV | |||||||||||||||||
NFGC-19-07 | NSV | |||||||||||||||||
NFGC-19-08 | NSV | |||||||||||||||||
NFGC-19-09 | 15.5 | 16.5 | 1.0 | 1.65 | H-Pond | |||||||||||||
NFGC-19-09 | 120.0 | 122.0 | 2.0 | 1.13 | H-Pond | |||||||||||||
NFGC-19-09 | 162.0 | 171.0 | 9.0 | 4.39 | H-Pond | |||||||||||||
incl | 165.0 | 167.0 | 2.0 | 17.45 | H-Pond | |||||||||||||
NFGC-19-10 | 22.0 | 26.0 | 4.0 | 1.07 | H-Pond | |||||||||||||
NFGC-19-10 | 66.0 | 68.0 | 2.0 | 1.59 | H-Pond | |||||||||||||
NFGC-19-10 | 180.0 | 185.0 | 5.0 | 0.62 | H-Pond |
2020 Airborne Gravity Survey
In March of 2020, NFG contracted CGG Canada Services Ltd. based in Ottawa, Ontario to conduct a 1,705 km HeliFALCON Airborne Gravity Gradiometer and Aeromagnetic Survey over the licenses in the north part of the Queensway Project. This highly advanced gravity and magnetic system has been deployed by the Company to further aid in the definition of geological and structural controls of mineralization.
After post processing the final data files were received in late April 2020. This data is currently under interpretation by a contract geophysicist to better define structures, geology and potential mineral target areas.
-15-
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Queensway Project – Vertical Gravity GD Plan View
Queensway Project – Vertical Gravity Gradient GDD Plan View
-16-
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Lucky Strike Project, Ontario
The Lucky Strike Project is located 10 km north of Larder Lake, Ontario and covers favourable and underexplored structural corridors associated with the Larder Cadillac Deformation Zone.
The project is comprised of 639 single cell un-patented mining claims.
Land History
The current mineral cells comprising the Lucky Strike Project were acquired from the completion of two option agreements, one purchase agreement and online staking.
On May 27th, 2016 the Company optioned the primary Lucky Strike Project property from Ashley Gold Mines Ltd. which was further amended in May 2019 and fully executed in November 2019. Under the terms of the agreement the Company paid $115,000 and issued common shares equivalent to $80,000. The option agreement included an underlying royalty payable to Wallbridge mining covers some of the claims with most of the claims carrying no NSR.
On July 26th, 2017 the Company optioned the Vallillee extension claims west of the primary Lucky Strike land package and this option agreement was fully executed July 2018. Under the terms of the agreement the Company paid $40,000 and issued a 2% NSR in favour of the optionors.
In April 2020, the Company staked an additional 70 unpatented mining cells on the west side of the Lucky Strike Project. These lands carry no NSR.
On May 7th, 2020, the Company completed a claim purchase agreement with Big Bar Gold to purchase 21 unpatented mining claim cells adjacent to the east of the Lucky Strike Project. Under the terms of the agreement the Company paid $25,000. The claims carry no NSR.
Lucky Strike Project – Project Location map, fault systems and Adjacent Projects
-17-
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Environmental and Exploration Permitting
The Company was issued an exploration plan by the Ontario MNDM on July 13, 2017, to cover exploration activities including mechanized trenching and mechanized diamond drilling and this permit is set to expire in July 2020. Application was made in May 2020 for new permits to cover mechanized trenching, mechanized diamond drilling and approval is pending.
Project Geology
The Lucky Strike Project is covered by the Lower Blake River Group which are dominated by intermediate to mafic, massive volcanic flows. The volcanic flows have been intruded by diorite-gabbro intrusions which are up to 7 kilometres by 1.5 kilometre in size. In the Walsh-FP area a syenite-syenite porphyry intrudes the mafic-intermediate volcanics and hosts the gold-bearing quartz-ankerite veins of the Walsh Mine. The long axis of this syenite intrusion strikes approximately north-south and extends for 3.5 kilometres on the property and another 3 kilometres south of the property and is generally 0.5 kilometres wide. Two major regional faults cross the property, the Misema-Misty Lake Fault and the Mulven Fault, striking roughly in a northeast-southwest direction. These structures have been speculated as being as a continuation of the Kirkland Main Break Fault system which hosted the seven historic gold mines of the Kirkland Lake Gold camp. The Victoria Creek Deformation Zone, possibly a splay off the Misema-Misty Lake Fault and a control on the Victoria Creek and Upper Beaver Mines, lies just south of the property with splay structures extending onto the property.
The schedules below summarize the carrying costs of acquisition and exploration costs incurred to date for each exploration and evaluation asset that the Company is continuing to explore as at June 30, 2020 and December 31, 2019:
Newfoundland | ||||||||||||||||
Queensway | Other | Ontario | Total | |||||||||||||
Six months ended June 30, 2020 | $ | $ | $ | $ | ||||||||||||
Exploration and evaluation assets | ||||||||||||||||
Balance as at December 31, 2019 | 658,700 | 16,500 | 425,516 | 1,100,716 | ||||||||||||
Additions | ||||||||||||||||
Acquisition costs | 75,000 | - | 25,000 | 100,000 | ||||||||||||
Balance as at June 30, 2020 | 733,700 | 16,500 | 450,516 | 1,200,716 | ||||||||||||
Exploration and evaluation expenditures | ||||||||||||||||
Cumulative exploration expense - December 31, 2019 | 2,542,344 | - | 837,133 | 3,379,477 | ||||||||||||
Assays | 104,487 | 414 | 211 | 105,112 | ||||||||||||
Geophysics | 611,523 | - | - | 611,523 | ||||||||||||
Office | 821 | - | - | 821 | ||||||||||||
Property taxes, mining leases and rent | 26,020 | - | 400 | 26,420 | ||||||||||||
Salaries & consulting | 297,543 | 8,300 | 36,613 | 342,456 | ||||||||||||
Supplies & equipment | 164,539 | - | 18,631 | 183,170 | ||||||||||||
Travel | 26,439 | - | 76 | 26,515 | ||||||||||||
Trenching | 13,510 | - | 31,865 | 45,375 | ||||||||||||
Exploration cost recovery | (30,680 | ) | - | - | (30,680 | ) | ||||||||||
1,214,202 | 8,714 | 87,796 | 1,310,712 | |||||||||||||
Cumulative exploration expense – June 30, 2020 | 3,756,546 | 8,714 | 924,929 | 4,690,189 |
-18-
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Newfoundland | ||||||||||||||||
Queensway | Other | Ontario | Total | |||||||||||||
Six months ended June 30, 2019 | $ | $ | $ | $ | ||||||||||||
Exploration and evaluation assets | ||||||||||||||||
Balance as at December 31, 2018 | 276,330 | 107,835 | 293,516 | 677,681 | ||||||||||||
Additions | ||||||||||||||||
Acquisition costs | 50,520 | - | 62,000 | 112,520 | ||||||||||||
Impairment of exploration and evaluation assets | - | (45,000 | ) | - | (45,000 | ) | ||||||||||
Balance as at June 30, 2019 | 326,850 | 62,835 | 355,516 | 745,201 | ||||||||||||
Exploration and evaluation expenditures | ||||||||||||||||
Cumulative exploration expense - December 31, 2018 | 1,890,601 | - | 831,337 | 2,721,938 | ||||||||||||
Assays | 6,030 | - | - | 6,030 | ||||||||||||
Geophysics | 162,375 | - | - | 162,375 | ||||||||||||
Property taxes, mining leases and rent | 25,761 | - | 1,548 | 27,309 | ||||||||||||
Salaries & consulting | 75,046 | - | - | 75,046 | ||||||||||||
Supplies & equipment | 19,490 | - | - | 19,490 | ||||||||||||
Travel | 4,056 | - | - | 4,056 | ||||||||||||
292,758 | - | 1,548 | 294,306 | |||||||||||||
Cumulative exploration expense – June 30, 2019 | 2,183,359 | - | 832,885 | 3,016,244 |
Overall Performance and Results of Operations
Total assets increased to $41,110,469 at June 30, 2020, from $9,355,036 at December 31, 2019, primarily as a result of an increase in investments of $26,431,515 which were received for a private placement financing completed in March 2020 and an increase in cash of $4,398,406 during the six months ended June 30, 2020. The most significant assets at June 30, 2020, were cash of $11,735,044 (December 31, 2019: $7,336,638), investments of $26,546,452 (December 31, 2019: $114,937), exploration and evaluation assets of $1,200,716 (December 31, 2019: $1,100,716, and prepaid expenses, deposits and other receivables of $1,413,848 (December 31, 2019: $727,511). Cash increased by $4,398,406 during the six months ended June 30, 2020 as a result of private placement financings completed in June 2020 for gross proceeds of $7,118,196, and proceeds received from the exercise of stock options of $904,500, partially offset by cash used in operating activities of $3,170,195.
Six months ended June 30, 2020 and 2019
During the six months ended June 30, 2020, loss from operating activities increased by $4,988,848 to $5,716,067 compared to $727,219 for the six months ended June 30, 2019. The increase in loss from operating activities is largely due to:
- | An increase of $1,016,406 in exploration and evaluation expenditures. Exploration and evaluation expenditures were $1,310,712 for the six months ended June 30, 2020 compared to $294,306 for the six months ended June 30, 2019. The Company completed a 1,705 km airborne gravity survey and incurred higher salaries and consulting fees, and supplies & equipment costs due to an increase in exploration activity at its Queensway Project during the six months ended June 30, 2020 compared to machine learning analysis of geophysical data at its Queensway Project and lower expenditures incurred due to less exploration activity during the six months ended June 30, 2019. |
-19-
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
- | An increase of $3,032,801 in share-based compensation. Share-based compensation was $3,032,801 for the six months ended June 30, 2020 compared to $Nil for the six months ended June 30, 2019. A total of 3,970,000 fully vested stock options with a value of $3,032,801 were granted during the six months ended June 30, 2020 compared to no stock options granted during the six months ended June 30, 2019. |
- | An increase of $370,132 in salaries and consulting fees. Salaries and consulting fees were $768,132 for the six months ended June 30, 2020 compared to $398,000 for the six months ended June 30, 2019. The increase is due to increased executive management levels and related compensation paid to key management personnel during the six months ended June 30, 2020. |
- | An increase of $280,636 in professional fees. Professional fees were $280,636 for the six months ended June 30, 2020 compared to $Nil for the six months ended June 30, 2019. The increase is due to higher legal fees incurred as a result of increased corporate activity and in relation to a proposed transaction to have all of the issued and outstanding shares of the Company acquired by Mexican Gold Mining Corp. The proposed transaction with Mexican Gold Corp. was terminated by mutual agreement during the six months ended June 30, 2020. |
Other items
For the six months ended June 30, 2020, other income was $9,796,986 compared to other expenses of $125,207 for the six months ended June 30, 2019. The $9,922,193 change is largely due to:
- | An increase of $9,654,821 in net change in unrealized gain on investments. Net change in unrealized gain on investments was $9,695,405 for the six months ended June 30, 2020 compared to $40,584 for the six months ended June 30, 2019. The increase is due to changes in the fair values of equity investments held at June 30, 2020. |
The Company recorded income and comprehensive income of $4,080,919 or 0.05 basic earnings per share and 0.04 diluted earnings per share for the six months ended June 30, 2020 (June 30, 2019: $852,426 loss and comprehensive loss or 0.02 basic and diluted loss per share).
Three months ended June 30, 2020 and 2019
During the three months ended June 30, 2020, loss from operating activities increased by $4,013,103 to $4,312,274 compared to $299,171 for the three months ended June 30, 2019. The increase in loss from operating activities is largely due to:
- | An increase of $527,930 in exploration and evaluation expenditures. Exploration and evaluation expenditures were $582,722 for the three months ended June 30, 2020 compared to $54,792 for the three months ended June 30, 2019. The Company incurred higher salaries and consulting fees, and supplies and equipment costs at its Queensway Project due to an increase in exploration activity during the three months ended June 30, 2020 compared to lower expenditures incurred due to less exploration activity during the three months ended June 30, 2019. |
- | An increase of $3,032,801 in share-based compensation. Share-based compensation was $3,032,801 for the three months ended June 30, 2020 compared to $Nil for the three months ended June 30, 2019. A total of 3,970,000 fully vested stock options with a value of $3,032,801 were granted during the three months ended June 30, 2020 compared to no stock options granted during the three months ended June 30, 2019. |
- | An increase of $102,941 in professional fees. Professional fees were $102,841 for the three months ended June 30, 2020 compared to $Nil for the three months ended June 30, 2019. The increase is due to higher legal fees incurred as a result of increased corporate activity during the three months ended June 30, 2020. |
-20-
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Other items
For the three months ended June 30, 2020, other income was $14,999,655 compared to other expenses of $56,538. The $15,056,193 change is largely due to:
- | An increase of $14,910,427 in net change in unrealized gain on investments. Net change in unrealized gain on investments was $14,898,946 for the three months ended June 30, 2020 compared to $11,481 in unrealized loss on investments for the three months ended June 30, 2019. The increase is due to changes in the fair values of equity investments held at June 30, 2020. |
The Company recorded income and comprehensive income of $10,687,381 or 0.11 basic earnings per share and 0.09 diluted earnings per share for the three months ended June 30, 2020 (June 30, 2019: $355,709 loss and comprehensive loss or 0.01 basic and diluted loss per share).
Summary of Quarterly Results
2020 | 2019 | 2020 | |||||||||||||||||||||||
Jun. 30 | Mar. 31 | Dec. 31 | Sep. 30 | Jun. 30 | Mar. 31 | Dec. 31 | Sep. 30 | ||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Revenues | - | - | - | - | - | - | - | - | |||||||||||||||||
Income (loss) and | |||||||||||||||||||||||||
comprehensive income | |||||||||||||||||||||||||
(loss) for the period | 10,687,381 | (1) | (6,606,462 | )(2) | (3,082,583 | )(3) | (85,022 | )(4) | (355,709 | )(5) | (496,717 | )(6) | (1,202,531 | )(7) | (1,021,224 | ) | |||||||||
Earnings (loss) per | |||||||||||||||||||||||||
Common Share Basic | 0.11 | (0.08 | ) | (0.05 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | (0.02 | ) | (0.02 | ) | ||||||||||
Earnings (loss) per | |||||||||||||||||||||||||
Common Share Diluted | 0.09 | (0.08 | ) | (0.05 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | (0.02 | ) | (0.02 | ) |
(1) | Decrease from prior quarter primarily driven by an increase in net change in unrealized gains on investments of $20,102,487, amortization of flow-through premium liability of $101,117, and a decrease in exploration and evaluation expenditures of $145,268, partially offset by an increase in share-based compensation of $3,032,801. |
(2) | Increase from prior quarter primarily driven by increases in professional fees of $104,545, exploration and evaluation expenditures of $350,891 and net change in unrealized losses on investments of $5,279,853, partially offset by a decrease in share-based compensation of $2,130,528. |
(3) | Increase from prior quarter primarily driven by increases in salaries and consulting fees of $407,399, share-based compensation of $2,130,528, professional fees of $71,652, exploration and evaluation expenditures of $390,984 and impairment of exploration and evaluation assets of $46,335 partially offset by an increase in net change in unrealized gain on investments of $74,854. |
(4) | Decrease from prior quarter primarily driven by decrease in salaries and consulting fees of $142,500, exploration and evaluation expenditures of $68,678 and impairment of exploration and evaluation assets of $45,000. |
(5) | Decrease from prior quarter primarily driven by a decrease in exploration and evaluation expenditures of $184,723. |
(6) | Decrease from prior quarter primarily driven by decreases in share-based compensation of $122,361, exploration and evaluation expenditures of $351,942 and impairment of exploration and evaluation assets of $71,755. The Company realized net losses on disposal of investments of $120,734 and net change in unrealized losses on investments of $217,287. |
(7) | Increase from prior quarter primarily driven by increase in share based compensation of $122,361. |
- 21 -
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Liquidity and Capital Resources
As at June 30, 2020, the Company had cash of $11,735,044 to settle current liabilities of $2,359,562.
The Company does not currently have a recurring source of revenue and has historically incurred negative cash flows from operating activities. As at June 30, 2020, the Company has working capital of $39,195,121 consisting primarily of cash, investments, prepaid expenses and deposits and sales taxes recoverable. The Company’s exploration and evaluation assets presently have no proven or probable reserves, and on the basis of information to date, it has not yet determined whether these properties contain economically recoverable resources.
The recoverability of amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production.
The sources of funds currently available to the Company for its acquisition and exploration projects are solely due from equity financing.
The Company does not have bank debt or banking credit facilities in place as at the date of this report.
June 2020 Financings – Net Proceeds of $6,992,009
On June 4, 2020, the Company completed a non-brokered private placement financing of 3,994,597 flow-through common shares at a price of $1.50 per common share for gross proceeds of $5,991,896. Finders’ fees paid were $69,394 in cash and the issuance of 64,282 warrants exercisable into common shares of the Company at $1.50 per share for two years from date of issue with a fair value of $25,912. The premium received on the flow-through shares issued was determined to be $1,690,704.
On June 10, 2020, the Company completed a non-brokered private placement financing of 866,385 flow-through common shares at a price of $1.30 per common share for gross proceeds of $1,126,300. Finders’ fees paid were $56,793 in cash and the issuance of 43,582 warrants exercisable into common shares of the Company at $1.30 per share for two years from the date of issue with a fair value of $16,271. The premium received on the flow-through shares issued was determined to be $259,915.
The Company intends to use the proceeds from these financings towards continued exploration work at its Queensway Project.
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | June 30, 2020 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Queensway Project work program | 7,118,196 | 229,554 | (6,888,642 | ) | ||||||||
Total Uses | 7,118,196 | 229,554 | (6,888,642 | ) |
Prior Financings
November 2019 Financing – Net Proceeds of $8,000,000
In November 2019, the Company completed a non-brokered private placement of 16,000,000 units at a price of $0.50 per unit for total proceeds of $8,000,000. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase an additional common share at a price of $0.75 per share for three years from the issuance date. The Company intends to use these proceeds towards continued exploration work at its Queensway Project, general and administrative expenditures and working capital purposes to fund ongoing operations.
- 22 -
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | June 30, 2020 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Queensway Project work program | 3,000,000 | 1,765,696 | (1,234,304 | ) | ||||||||
General and administrative expenses | 2,000,000 | 1,716,315 | (283,685 | ) | ||||||||
Working capital to fund ongoing operations | 3,000,000 | 820,507 | (2,179,493 | ) | ||||||||
Total Uses | 8,000,000 | 4,302,518 | (3,697,482 | ) |
The Company used $532,321 of the proceeds towards the Company’s diamond drill program, which commenced in November 2019 and comprised 10 holes totalling 1,986 meters drilled, $565,500 was used towards the Company’s airborne gravity survey, and $367,677 related to trenching, salaries and wages, and supplies & equipment at its Queensway Project. The Company used $1,716,315 of the proceeds for general and administrative expenditures related to consulting and executive management compensation of $1,227,198 and professional fees, filing fees, travel and office and sundry of $489,118.
July 2019 Financing – Net Proceeds of $500,000
In July 2019, the Company completed a non-brokered private placement of 1,250,000 common shares at a price of $0.40 per share for gross proceeds of $500,000.
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | June 30, 2020 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Working capital to fund ongoing operations | 500,000 | 500,000 | - | |||||||||
Total Uses | 500,000 | 500,000 | - |
The Company used these proceeds for working capital purposes to fund ongoing operations.
June 2019 Financing – Net Proceeds of $750,000
In June 2019, the Company completed a non-brokered private placement of 1,875,000 common shares at a price of $0.40 per share for gross proceeds of $750,000.
Intended Use of | Over/(Under)- | |||||||||||
Proceeds | Actual Use of | Expenditure at | ||||||||||
(Estimated) | Proceeds | June 30, 2020 | ||||||||||
Uses of Funds: | $ | $ | $ | |||||||||
Working capital to fund ongoing operations | 750,000 | 750,000 | - | |||||||||
Total Uses | 750,000 | 750,000 | - |
The Company used these proceeds for working capital purposes to fund ongoing operations.
Outstanding Share Data
On March 6, 2020, the Company completed a private placement consisting of 15,000,000 common shares in exchange for non-cash consideration of 6,944,444 common shares of Novo Resources Corp. (TSXV: NVO) at a price of $2.41 per share for gross proceeds of $16,736,110.
- 23 -
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
On June 4, 2020, the Company completed a non-brokered private placement financing of 3,994,597 flow-through common shares at a price of $1.50 per common share for gross proceeds of $5,991,896. Finders’ fees paid were $69,394 in cash and the issuance of 64,282 warrants exercisable into common shares of the Company at $1.50 per share for two years from date of issue with a fair value of $25,912. The premium received on the flow-through shares issued was determined to be $1,690,704.
On June 10, 2020, the Company completed a non-brokered private placement financing of 866,385 flow-through common shares at a price of $1.30 per common share for gross proceeds of $1,126,300. Finders’ fees paid were $56,793 in cash and the issuance of 43,582 warrants exercisable into common shares of the Company at $1.30 per share for two years from the date of issue with a fair value of $16,271. The premium received on the flow-through shares issued was determined to be $259,915.
On August 11, 2020, the Company completed an initial public offering of an aggregate of 21,000,000 common shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 14, 2020, its agents exercised their overallotment option in full to offer and sell an additional 3,150,000 common shares for gross proceeds of $4,095,000. The Company paid agents’ fees of $1,793,700 in cash and issued 1,379,768 agents’ warrants exercisable into common shares of the Company at $1.30 for 12 months from the date of issue in connection with the initial public offering.
During the six months ended June 30, 2020, 2,915,000 stock options were exercised at a weighted average price of $0.31 per share for gross proceeds of $904,500.
During the six months ended June 30, 2020 2,300,000 stock options were granted at an exercise price of $1.00 and an expiry date of April 18, 2025.
During the six months ended June 30, 1,670,000 stock options were granted at an exercise price of $1.075 with an expiry date of May 23, 2025.
Subsequent to June 30, 2020, 150,000 stock options were exercised at a weighted average price of $0.23 for gross proceeds of $35,000.
Subsequent to June 30, 2020, 5,040,000 stock options were granted at an exercise price of $1.40 and an expiry date of August 11, 2025.
Subsequent to June 30, 2020, 16,000,000 warrants were exercised at a price of $0.75 for gross proceeds of $12,000,000.
As at June 30, 2020, there were 101,700,231 common shares issued and outstanding. As at the date of this report, there were 142,000,231 common shares issued and outstanding
As at June 30, 2020 there were 8,940,000 stock options and 16,107,864 warrants outstanding. As at the date of this report, there were 13,830,000 stock options and 1,487,632 warrants outstanding.
- 24 -
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Related Party Transactions
All transactions with related parties have occurred in the normal course of operations and on terms and conditions that are similar to those of transactions with unrelated parties and are measured at the amount of consideration paid or received. A summary of the Company’s related party transactions with corporations having similar directors and officers, being Goldspot Discoveries Inc., is as follows:
Six months ended June 30, | ||||||||
2020 | 2019 | |||||||
$ | $ | |||||||
Amounts paid to Goldspot Discoveries Inc. (i) for administration, exploration and evaluation | 69,511 | 150,000 | ||||||
Options exercised by members of key management | 500,000 | - |
(i) | Goldspot Discoveries Inc. is a related entity having the following common director and officer to the Company: Denis Laviolette, Director and President. |
Key Management Personnel Compensation
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers.
During the six months ended June 30, 2020, key management personnel compensation totaled $3,805,437 (six months ended June 30, 2019 - $305,000) comprised of salaries and consulting of $702,069 (six months ended June 30, 2019 - $305,000) paid to the Chief Financial Officer, the Chief Operating Officer and companies controlled by the Company’s Chief Executive Officer and Executive Chairman, and share-based compensation of $3,3033,857 (six months ended June 30, 2019 - $Nil) relating to 3,970,000 (six months ended June 30, 2019 – Nil) stock options granted to directors and officers of the Company.
As at June 30, 2020, $21,667 is included in accounts payable and accrued liabilities for amounts owed to the Chief Operating Officer (six months ended June 30, 2019 - $12,242).
As at June 30, 2020, $69,511 (six months ended June 30, 2019 - $7,875) is included in accounts payable and accrued liabilities for amounts owed to Goldspot Discoveries Inc., a related company having a common director and officer (Denis Laviolette, Director and President of both entities).
On January 26, 2020 the Company entered into a binding letter agreement with Mexican Gold Mining Corp. (“MGMC”) to have all of the issued and outstanding shares of the Company acquired by MGMC. On February 19, 2020, the Company announced that the binding letter agreement was mutually terminated. During the six months ended June 30, 2020, the Company paid $127,234 to MGMC for legal fees incurred in connection with the transaction which was terminated.
There are no ongoing contractual commitments resulting from these transactions with related parties.
Risks and Uncertainties
The risks and uncertainties described in this section are considered by management to be the most important in the context of the Company’s business. The risks and uncertainties below are not inclusive of all the risks and uncertainties the Company may be subject to and other risks may exist. The Company is in the business of acquiring, exploring and evaluating gold properties. It is exposed to a number of risks and uncertainties that are common to other gold mining companies. The industry is capital intensive at all stages and is subject to variations in commodity prices, market sentiment, inflation and other risks.
- 25 -
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Exploration Stage Company
The Company is an exploration stage company and cannot give any assurance that a commercially viable deposit, or “reserve,” exists on any properties for which the Company currently has or may have (through potential future joint venture agreements or acquisitions) an interest. Determination of the existence of a reserve depends on appropriate and sufficient exploration work and the evaluation of legal, economic, and environmental factors. If the Company fails to find a commercially viable deposit on any of its properties, its financial condition and results of operations will be materially adversely affected.
No Mineral Resources
Currently, there are no mineral resources (within the meaning of NI 43-101) on any of the properties in which the Company has an interest and the Company cannot give any assurance that any mineral resources will be identified. If the Company fails to identify any mineral resources on any of its properties, its financial condition and results of operations will be materially adversely affected.
No Mineral Reserves
Currently, there are no mineral reserves (within the meaning of NI 43-101) on any of the properties in which the Company has an interest and the Company cannot give assurance that any mineral reserves will be identified. If the Company fails to identify any mineral reserves on any of its properties, its financial condition and results of operations will be materially adversely affected.
Reliability of Historical Information
The Company has relied on, and the disclosure in the Queensway Technical Report is based, in part, upon, historical data compiled by previous parties involved with the Queensway Project. To the extent that any of such historical data is inaccurate or incomplete, the Company’s exploration plans may be adversely affected.
Mineral Exploration and Development
Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection, the combination of which factors may result in the Company not receiving an adequate return of investment capital.
There is no assurance that the Company’s mineral exploration and any development activities will result in any discoveries of commercial bodies of ore. The long-term profitability of the Company’s operations will in part be directly related to the costs and success of its exploration programs, which may be affected by a number of factors. Substantial expenditures are required to establish reserves through drilling and to develop the mining and processing facilities and infrastructure at any site chosen for mining.
Substantial expenditures are required to establish ore reserves through exploration and drilling, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities and grades to justify commercial operations or that funds required for development can be obtained on a timely basis.
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Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Estimates of reserves, mineral deposits and production costs can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In addition, the grade of ore ultimately mined may differ from that indicated by drilling results. Short term factors relating to reserves, such as the need for orderly development of ore bodies or the processing of new or different grades, may also have an adverse effect on mining operations and on the results of operations. Material changes in ore reserves, grades, stripping ratios or recovery rates may affect the economic viability of any project.
Competition and Mineral Exploration
The mineral exploration industry is intensely competitive in all of its phases and the Company must compete in all aspects of its operations with a substantial number of large established mining companies with greater liquidity, greater access to credit and other financial resources, newer or more efficient equipment, lower cost structures, more effective risk management policies and procedures and/or greater ability than the Company to withstand losses. The Company’s competitors may be able to respond more quickly to new laws or regulations or emerging technologies or devote greater resources to the expansion of their operations, than the Company can. In addition, current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties. Competition could adversely affect the Company’s ability to acquire suitable new mineral properties or prospects for exploration in the future. Competition could also affect the Company’s ability to raise financing to fund the exploration and development of its properties or to hire qualified personnel. The Company may not be able to compete successfully against current and future competitors, and any failure to do so could have a material adverse effect on the Company’s business, financial condition or results of operations.
Additional Funding
The exploration and development of the Company’s mineral properties will require substantial additional capital. When such additional capital is required, the Company will need to pursue various financing transactions or arrangements, including joint venturing of projects, debt financing, equity financing or other means. Additional financing may not be available when needed or, if available, the terms of such financing might not be favorable to the Company and might involve substantial dilution to existing shareholders. The Company may not be successful in locating suitable financing transactions in the time period required or at all. A failure to raise capital when needed would have a material adverse effect on the Company’s business, financial condition and results of operations. Any future issuance of securities to raise required capital will likely be dilutive to existing shareholders. In addition, debt and other debt financing may involve a pledge of assets and may be senior to interests of equity holders. The Company may incur substantial costs in pursuing future capital requirements, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. The ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the gold and copper industries in particular), the Company’s status as a new enterprise with a limited history, the location of the Company’s mineral properties, the price of commodities and/or the loss of key management personnel.
Permits and Government Regulation
The future operations of the Company may require permits from various federal, state, provincial and local governmental authorities and will be governed by laws and regulations governing prospecting, development, mining, production, export, taxes, labour standards, occupational health, waste disposal, land use, environmental protections, mine safety and other matters.
Although Canada has a favorable legal and fiscal regime for exploration and mining, including a relatively simple system for the acquisition of mineral titles and relatively low tax burden, possible future government legislation, policies and controls relating to prospecting, development, production, environmental protection, mining taxes and labour standards could cause additional expense, capital expenditures, restrictions and delays in the activities of the Company, the extent of which cannot be predicted.
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Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Before development and production can commence on any properties, the Company must obtain regulatory and environmental approvals. There is no assurance that such approvals can be obtained on a timely basis or at all. The cost of compliance, with changes in governmental regulations, has the potential to reduce the profitability of operations. The Company is currently in compliance with all material regulations applicable to its exploration activities.
Limited Operating History
The Company has a limited operating history and its mineral properties are exploration stage properties. As such, the Company will be subject to all of the business risks and uncertainties associated with any new business enterprise, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. The current state of the Company’s mineral properties require significant additional expenditures before any cash flow may be generated. Although the Company possesses an experienced management team, there is no assurance that the Company will be successful in achieving a return on shareholders’ investment and the likelihood of success of the Company must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the establishment of any business. There is no assurance that the Company can generate revenues, operate profitably, or provide a return on investment, or that it will successfully implement its plans.
An investment in the Company’s securities carries a high degree of risk and should be considered speculative by purchasers. There is no assurance that we will be successful in achieving a return on shareholders’ investment and the likelihood of our success must be considered in light of our early stage of operations. You should consider any purchase of the Company’s securities in light of the risks, expenses and problems frequently encountered by all companies in the early stages of their corporate development.
Title Risks
Although the Company has or will receive title opinions for any properties in which it has a material interest, there is no guarantee that title to such properties will not be challenged or impugned. The Company has not conducted surveys on all of the claims in which it holds direct or indirect interests. The Company’s properties may be subject to prior unregistered agreements or transfers or native land claims and title may be affected by unidentified or unknown defects. Title insurance is generally not available for mineral properties and the Company’s ability to ensure that it has obtained secure claims to individual mineral properties or mining concessions may be constrained. A successful challenge to the Company’s title to a property or to the precise area and location of a property could cause delays or stoppages to the Company’s exploration, development or operating activities without reimbursement to the Company. Any such delays or stoppages could have a material adverse effect on the Company’s business, financial condition and results of operations.
Laws and Regulation
The Company’s exploration activities are subject to extensive federal, provincial and local laws and regulations governing prospecting, development, production, exports, taxes, labour standards, occupational health and safety, mine safety and other matters in all the jurisdictions in which it operates. These laws and regulations are subject to change, can become more stringent and compliance can therefore become more costly. The Company applies the expertise of its management, advisors, employees and contractors to ensure compliance with current laws.
Uninsured and Underinsured Risks
The Company faces and will face various risks associated with mining exploration and the management and administration thereof Some of these risks are not insurable; some may be the subject of insurance which is not commercially feasible for the Company. Those insurances which are purchased will have exclusions and deductibles which may eliminate or restrict recovery in the event of loss. In some cases, the amount of insurance purchased may not be adequate in amount or in limit.
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Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
The Company will undertake intermittent assessments of insurable risk to help ensure that the impact of uninsured/underinsured loss is minimized within reason. Risks may vary from time to time within this intermittent period due to changes in such things as operations operating conditions, laws or the climate which may leave the Company exposed to periods of additional uninsured risk. In the event risk is uninsurable, at its reasonable and sole discretion, the Company may endeavor to implement policies and procedures, as may be applicable and/or feasible, to reduce the risk of related loss.
Public Health Crises such as the COVID-19 Pandemic
In December 2019, a novel strain of coronavirus known as COVID-19 surfaced in Wuhan, China and has spread around the world causing significant business and social disruption. COVID-19 was declared a worldwide pandemic by the World Health Organization on March 11, 2020. The speed and extent of the spread of COVID-19 and the duration and intensity of resulting business disruption and related financial and social impact, are uncertain. Such adverse effects related to COVID-19 and other public health crises may be material to the Company. The impact of COVID-19 and efforts to slow the spread of COVID-19 could severely impact the exploration and any development of the Queensway Project and the Company’s other mineral projects. To date, a number of governments have declared states of emergency and have implemented restrictive measures such as travel bans, quarantine and self-isolation. If the exploration and any development of the Queensway Project and other mineral projects is disrupted or suspended as a result of these or other measures, it may have a material adverse impact on the Company’s financial position and results of operations.
COVID-19 and efforts to contain it may have broad impacts on the Company’s supply chain or the global economy, which could have a material adverse effect on the Company’s financial position. While governmental agencies and private sector participants are seeking to mitigate the adverse effects of COVID-19, and the medical community is seeking to develop vaccines and other treatment options, the efficacy and timing of such measures is uncertain.
Global Economy Risk
The volatility of global capital markets, including the general economic slowdown in the mining sector, over the past several years has generally made the raising of capital by equity or debt financing more difficult. The Company may be dependent upon capital markets to raise additional financing in the future. As such, the Company is subject to liquidity risks in meeting its operating expenditure requirements and future development cost requirements in instances where adequate cash positions are unable to be maintained or appropriate financing is unavailable. These factors may impact the ability to raise equity or obtain loans and other credit facilities in the future and on terms favourable to the Company and its management. If these levels of volatility persist or if there is a further economic slowdown, the Company’s operations, the Company’s ability to raise capital could be adversely impacted.
In addition, the current outbreak of COVID-19, and any future emergence and spread of similar pathogens, could have a material adverse impact on global economic conditions, which may adversely impact: the Company’s operations, its ability to raise debt or equity financing for the purposes of mineral exploration and development, and the operations of the Company’s suppliers, contractors and service providers.
Environmental Risks
The Company’s activities are subject to extensive laws and regulations governing environment protection. The Company is also subject to various reclamation related conditions. Although the Company closely follows and believes it is operating in compliance with all applicable environmental regulations, there can be no assurance that all future requirements will be obtainable on reasonable terms. Failure to comply may result in enforcement actions causing operations to cease or be curtailed and may include corrective measures requiring capital expenditures. Intense lobbying over environmental concerns by non-governmental organizations has caused some governments to cancel or restrict development of mining projects. Current publicized concern over climate change may lead to carbon taxes, requirements for carbon offset purchases or new regulation. The costs or likelihood of such potential issues to the Company cannot be estimated at this time.
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Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
The legal framework governing this area is constantly developing, therefore the Company is unable to fully ascertain any future liability that may arise from the implementation of any new laws or regulations, although such laws and regulations are typically strict and may impose severe penalties (financial or otherwise). The proposed activities of the Company, as with any exploration, may have an environmental impact which may result in unbudgeted delays, damage, loss and other costs and obligations including, without limitation, rehabilitation and/or compensation. There is also a risk that the Company’s operations and financial position may be adversely affected by the actions of environmental groups or any other group or person opposed in general to the Company’s activities and, in particular, the proposed exploration and mining by the Company within the Provinces of Newfoundland and Ontario.
Social and Environmental Activism
There is an increasing level of public concern relating to the effects of mining on the nature landscape, in communities and on the environment. Certain non-governmental organizations, public interest groups and reporting organizations (“NGOs”) who oppose resource development can be vocal critics of the mining industry. In addition, there have been many instances in which local community groups have opposed resource extraction activities, which have resulted in disruption and delays to the relevant operation. While the Company seeks to operate in a social responsible manner and believes it has good relationships with local communities in the regions in which it operates, NGOs or local community organizations could direct adverse publicity against and/or disrupt the operations of the Company in respect of one or more of its properties, regardless of its successful compliance with social and environmental best practices, due to political factors, activities of unrelated third parties on lands in which the Company has an interest or the Company’s operations specifically. Any such actions and the resulting media coverage could have an adverse effect on the reputation and financial condition of the Company or its relationships with the communities in which it operations, which could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.
Dependence on Management and Key Personnel
The success of the Company is currently largely dependent on the performance of its directors and officers. The loss of the services of any of these persons could have a materially adverse effect on the Company’s business and prospects. There is no assurance the Company can maintain the services of its directors, officers or other qualified personnel required to operate its business. As the Company’s business activity grows, the Company will require additional key financial, administrative and mining personnel as well as additional operations staff. There can be no assurance that these efforts will be successful in attracting, training and retaining qualified personnel as competition for persons with these skill sets increase. If the Company is not successful in attracting, training and retaining qualified personnel, the efficiency of its operations could be impaired, which could have an adverse impact on the Company’s operations and financial condition. In addition, the COVID-19 pandemic may cause the Company to have inadequate access to an available skilled workforce and qualified personnel, which could have an adverse impact on the Company’s financial performance and financial condition.
First Nations Land Claims
Certain of the Company’s mineral properties may now or in the future be the subject of First Nations land claims. The legal nature of First Nations land claims is a matter of considerable complexity. The impact of any such claim on the Company’s material interest in the Company’s mineral properties and/or potential ownership interest in the Company’s mineral properties in the future, cannot be predicted with any degree of certainty and no assurance can be given that a broad recognition of First Nations rights in the areas in which the Company’s mineral properties are located, by way of negotiated settlements or judicial pronouncements, would not have an adverse effect on the Company’s activities. Even in the absence of such recognition, the Company may at some point be required to negotiate with and seek the approval of holders of First Nations interests in order to facilitate exploration and development work on the Company’s mineral properties, there is no assurance that the Company will be able to establish practical working relationships with the First Nations in the area which would allow it to ultimately develop the Company’s mineral properties.
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Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Claims and Legal Proceedings
The Company and/or its directors and officers may be subject to a variety of civil or other legal proceedings, with or without merit. From time to time in the ordinary course of its business, the Company may become involved in various legal proceedings, including commercial, employment and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s attention and resources and cause the Company to incur significant expenses. Furthermore, because litigation is inherently unpredictable, the results of any such actions may have a material adverse effect on the Company’s business, operating results or financial condition.
Conflicts of Interest
Most of the Company’s directors and officers do not devote their full time to the affairs of the Company. All of the directors and some of the officers of the Company are also directors, officers and shareholders of other natural resource or public companies, and as a result they may find themselves in a position where their duty to another company conflicts with their duty to the Company. Although the Company has policies which address such potential conflicts and the OBCA has provisions governing directors in the event of such a conflict, none of the Company’s constating documents or any of its other agreements contain any provisions mandating a procedure for addressing such conflicts of interest. There is no assurance that any such conflicts will be resolved in favour of the Company. If any such conflicts are not resolved in favour of the Company, the Company may be adversely affected.
Gold and Metal Prices
If the Company’s mineral properties are developed from exploration properties to full production properties, the majority of our revenue will be derived from the sale of gold. Therefore, the Company’s future profitability will depend upon the world market prices of the gold for which it is exploring. The price of gold and other metals are affected by numerous factors beyond the Company’s control, including levels of supply and demand, global or regional consumptive patterns, sales by government holders, metal stock levels maintained by producers and others, increased production due to new mine developments and improved mining and production methods, speculative activities related to the sale of metals, availability and costs of metal substitutes.
Moreover, gold prices are also affected by macroeconomic factors such as expectations regarding inflation, interest rates and global and regional demand for, and supply of, gold as well as general global economic conditions. These factors may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities. Additionally, the current COVID-19 pandemic and efforts to contain it, including restrictions on travel and other advisories issued may have a significant effect on gold prices.
Negative Cash Flow from Operating Activities
The Company has no history of earnings and had negative cash flow from operating activities since inception. The Company’s mineral properties are in the exploration stage and there are no known mineral resources or reserves and the proposed exploration programs on the Company’s mineral properties are exploratory in nature. Significant capital investment will be required to achieve commercial production from the Company’s existing projects. There is no assurance that any of the Company’s mineral properties will generate earnings, operate profitably or provide a return on investment in the future. Accordingly, the Company will be required to obtain additional financing in order to meet its future cash commitments.
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Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Going Concern Risk
The Company’s financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. The Company’s future operations are dependent upon the identification and successful completion of equity or debt financings and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that the Company will be successful in completing equity or debt financings or in achieving profitability. The financial statements do not give effect to any adjustments relating to the carrying values and classifications of assets and liabilities that would be necessary should the Company be unable to continue as a going concern.
Risks Associated with Acquisitions
If appropriate opportunities present themselves, the Company may acquire mineral claims, material interests in other mineral claims, and companies that the Company believes are strategic. The Company currently has no understandings, commitments or agreements with respect to any material acquisition, other than as described in this MD&A, and no other material acquisition is currently being pursued. There can be no assurance that the Company will be able to identify, negotiate or finance future acquisitions successfully, or to integrate such acquisitions with its current business. The process of integrating an acquired Company or mineral claims into the Company may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for ongoing development of the Company’s business. Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to goodwill and other intangible assets, which could materially adversely affect the Company’s business, results of operations and financial condition.
Force Majeure
The Company’s projects now or in the future may be adversely affected by risks outside the control of the Company, including the price of gold on world markets, labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods, explosions or other catastrophes, pandemics, epidemics or quarantine restrictions.
Infrastructure
Exploration, development and processing activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important elements of infrastructure, which affect access, capital and operating costs. The lack of availability on acceptable terms or the delay in the availability of any one or more of these items could prevent or delay exploration or development of the Company’s mineral properties. If adequate infrastructure is not available in a timely manner, there can be no assurance that the exploration or development of the Company’s mineral properties will be commenced or completed on a timely basis, if at all. Furthermore, unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of necessary infrastructure could adversely affect our operations.
Exploration operations depend on adequate infrastructure. In particular, reliable power sources, water supply, transportation and surface facilities are necessary to explore and develop mineral projects. Failure to adequately meet these infrastructure requirements or changes in the cost of such requirements could affect the Company’s ability to carry out exploration and future development operations and could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.
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Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Climate Change Risks
The Company acknowledges climate change as an international and community concern and it supports and endorses various initiatives for voluntary actions consistent with international initiatives on climate change. However, in addition to voluntary actions, governments are moving to introduce climate change legislation and treaties at the international, national, state/provincial and local levels. Where legislation already exists, regulation relating to emission levels and energy efficiency is becoming more stringent. Some of the costs associated with reducing emissions can be offset by increased energy efficiency and technological innovation. However, if the current regulatory trend continues, the Company expects that this could result in increased costs at some of its operations in the future.
The Company and the mining industry are facing continued geotechnical challenges, which could adversely impact the Company’s production and profitability. Unanticipated adverse geotechnical and hydrological conditions, such as landslides, floods, seismic activity, droughts and pit wall failures, may occur in the future and such events may not be detected in advance. Geotechnical instabilities and adverse climatic conditions can be difficult to predict and are often affected by risks and hazards outside of the Company’s control, such as severe weather and considerable rainfall. Geotechnical failures could result in limited or restricted access to mine sites, suspension of operations, government investigations, increased monitoring costs, remediation costs, loss of ore and other impacts, which could cause one or more of the Company’s projects to be less profitable than currently anticipated and could result in a material adverse effect on the Company’s business results of operations and financial position.
Information Systems and Cyber Security
The Company’s operations depend on information technology (“IT”) systems. These IT systems could be subject to network disruptions caused by a variety of sources, including computer viruses, security breaches and cyber-attacks, as well as disruptions resulting from incidents such as cable cuts, damage to physical plants, natural disasters, terrorism, fire, power loss, vandalism and theft. The Company’s operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Company’s reputation and results of operations.
Although to date the Company has not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that the Company will not incur such losses in the future. The Company’s risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. As a result, cyber security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.
Critical Accounting Policies and Estimates
The Company prepares its financial statements in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”).
The preparation of the financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.
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Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
The financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant assumptions about the future and other sources of estimation uncertainty that management has made at year end that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to the following:
(i) Critical accounting estimates
Valuation of Options Granted and Warrants Issued
The fair value of common share purchase options granted and warrants issued is determined at the issue date using the Black-Scholes option pricing model. The Black-Scholes model involves six key inputs to determine the fair value of an option, which are: risk-free interest rate, exercise price, market price at the grant date, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are or could be affected by significant factors that are out of the Company’s control. The Company is also required to estimate the future forfeiture rate of options based on historical information in its calculation of share-based payments expense. These estimates impact the values of stock-based compensation expense, share capital, and reserves.
Valuation of Investments in Restricted Securities
Investments in securities issued directly by an issuer are often restricted under securities law. The Company values such securities at fair value based on market prices, and applies a discount between 0% and 10% depending on the circumstances. The Company holds an investment in Novo Resources Corp., which is traded on the TSX Venture Exchange and is restricted until July 7, 2020. Management has judged that due to the time remaining on the restriction and nature of the restriction, size of the position, and the liquidity of the stock, to apply no discount to the investment as at June 30, 2020
Computation of Income Taxes
The determination of tax expense for the period and deferred tax assets and liabilities involves significant estimation and judgment by management. In determining these amounts, management interprets tax legislation in a variety of jurisdictions and make estimates of the expected timing of the reversal of deferred tax assets and liabilities. Management also makes estimates of future earnings which affect the extent to which potential future tax benefits may be used.
The Company is subject to assessments by taxation authorities, which may interpret legislation differently. These differences may affect the final amount or the timing of the payment of taxes. We provide for such differences where known based on our best estimate of the probable outcome of these matters.
Shares Issued to Acquire Exploration and Evaluation Assets
From time to time, the Company issues common shares in the course of acquiring exploration and evaluation assets. When shares are issued without cash consideration, the transaction is recognized at the fair value of the assets received. In the event that the fair value of the assets cannot be reliably determined, the Company will recognize the transaction at the fair value of the shares issued. These estimates impact the value of share capital and exploration and evaluation assets.
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Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Flow-Through Shares
On issuance of flow-through shares, the Company bifurcates the flow-through share into i) a flow-through share premium, equal to the estimated premium, if any, investors pay for the flow-through feature, which is recognized as a liability and; ii) share capital. Upon qualifying expenditures being incurred, the Company derecognizes the liability and recognizes a deferred tax liability for the amount of the tax reduction renounced to the shareholders. The premium is recognized as other income and the related deferred tax is recognized as a tax provision.
To the extent that the Company has deferred tax assets in the form of tax loss carry-forwards and other unused tax credits as at the reporting
(ii) Critical accounting judgments
Impairment of Exploration and Evaluation Assets
Management is required to assess impairment in respect to the Company’s intangible mineral property interests. The triggering events are defined in IFRS 6. In making the assessment, management is required to make judgments on the status of each project and the future plans towards finding commercial reserves. The carrying value of each exploration and evaluation asset is reviewed regularly for conditions that may suggest impairment. This review requires significant judgment. Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the property’s value; whether there has been an accumulation of costs significantly in excess of the amounts originally expected for the property’s acquisition, development or cost of holding; and whether exploration activities produced results that are not promising such that no more work is being planned in the foreseeable future. If impairment is determined to exist, a formal estimate of the recoverable amount is performed and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount.
Management has determined that there were no indicators of impairment as at June 30, 2020 in exploration and evaluation assets.
Financial Risk Management
The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board approves and monitors the risk management processes.
Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company does not have financial instruments that potentially subject the Company to credit risk. Overall the Company’s credit risk has not changed significantly from the prior year. Sales taxes recoverable are due from the Canada Revenue Agency and the Company places its cash with financial institutions with high credit ratings, therefore in management’s judgment, credit risk is low.
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Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has in place a planning and budgeting process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. The Company has historically relied on issuance of shares to fund exploration programs and may require doing so again in the future. As at June 30, 2020, the Company has total liabilities of $2,359,562 and cash of $11,735,044 which is available to discharge these liabilities (December 31, 2019 – total liabilities of $392,849 and cash of $7,336,638). Accordingly, in management’s judgment, liquidity risk is low.
There have been no changes in management’s methods for managing liquidity risk since December 31, 2019.
Market Risk
Market risk is the risk that changes in market prices, such as commodity prices, interest rates and foreign exchange rates will affect the Company’s net earnings or the value of financial instruments. The objective of the Company is to manage and mitigate market risk exposures within acceptable limits, while maximizing returns.
Currency Risk
Financial instruments that impact the Company’s net earnings or other comprehensive income due to currency fluctuation include cash accounts denominated in US dollars and investments denominated in Australian dollars. Fluctuations in the exchange rate between the US dollar and the Canadian dollar at June 30, 2020 would not have a material impact on the Company’s net earnings and other comprehensive income. The sensitivity of the Company’s net earnings and other comprehensive income to changes in the exchange rate between the Canadian dollar and the Australian dollar at June 30 31, 2020 would change the Company’s net loss (income) by $36,890 as a result of a 10% change in the Canadian dollar exchange rate relative to the Australian dollar.
Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. As the Company deposits its short-term investments into fixed rate guaranteed investment certificates with one year maturities or less, the Company is not exposed to interest rate risk.
Commodity Price risk
Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company’s property has exposure to predominantly gold. Commodity prices, especially gold, greatly affect the value of the Company and the potential value of its property and investments.
Equity Price Risk
Equity price risk is the risk that the fair value of or future cash flows from the Company’s financial instruments will significantly fluctuate because of changes in market prices. The Company is exposed to market risk in trading its investments in unfavorable market conditions which could result in dispositions of investments at less than favorable prices. Additionally, the Company adjusts its investments to fair value at the end of each reporting period. This process could result in write-downs of the Company’s investments over one or more reporting periods, particularly during periods of overall market instability. The sensitivity of the Company’s net income (loss) to changes in market prices at June 30, 2020 would change the Company’s net income (loss) by $2,618,055 as a result of a 10% change in the market price of its investments.
There have been no changes in management’s methods for managing market risks since December 31, 2019.
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Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Capital management
The Company’s objectives when managing capital are:
· | To safeguard our ability to continue as a going concern in order to develop and operate our current projects; | |
· | Pursue strategic growth initiatives; and | |
· | To maintain a flexible capital structure which lowers the cost of capital. |
In assessing our capital structure, we include in our assessment the components of equity consisting of common shares, stock options and warrants, and deficit that as at June 30, 2020 totalled $38,750,907 (December 31, 2019 - $8,962,187). In order to facilitate the management of capital requirements, the Company prepares annual expenditure budgets and continuously monitors and reviews actual and forecasted cash flows. The annual and updated budgets are monitored and approved by the Board of Directors.
To maintain or adjust the capital structure, the Company may, from time to time, issue new shares, issue new debt, repay debt or dispose of non-core assets. The Company’s current capital resources are sufficient to carry out our exploration plans and support operations through the current operating period.
The Company is not subject to any capital requirements imposed by a regulator.
There were no changes in the Company’s approach to capital management during the six months ended June 30, 2020.
Cautionary Notes Regarding Forward-Looking Statements
This MD&A contains forward looking statements which reflect management’s expectations regarding the Company’s future growth, results from operations (including, without limitation, statements about the Company’s opportunities, strategies, competition, expected activities and expenditures as the Company pursues its business plan, the adequacy of the Company’s available cash resources and other statements about future events or results), performance (both operational and financial) and business prospects, future business plans and opportunities. Wherever possible, words such as “predicts”, “projects”, “targets”, “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. These forward-looking statements include, among other things, statements relating to; the Queensway Project and the Company’s planned and future exploration on the Queensway Project and its other mineral properties; the Company’s goals regarding exploration and potential development of its projects; the Company’s future business plans; expectations regarding the ability to raise further capital; the market price of gold; expectations regarding any environmental issues that may affect planned or future exploration and development programs and the potential impact of complying with existing and proposed environmental laws and regulations; the ability to retain and/or maintain any require permits, licenses or other necessary approvals for the exploration or development of its mineral properties; government regulation of mineral exploration and development operations in the Provinces of Newfoundland and Labrador and Ontario; the Company’s compensation policy and practices; the Company’s expected reliance on key management personnel, advisors and consultants; effects of the novel COVID- 19 outbreak as a global pandemic.
- 37 -
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Forward-looking statements are not a guarantee of future performance and is based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this Prospectus including, without limitation, assumptions about: the ability to raise any necessary additional capital on reasonable terms to advance exploration and development of the Company’s mineral properties; future prices of gold and other metal prices; the timing and results of exploration and drilling programs; the demand for, and price of gold; that general business and economic conditions will not change in a material adverse manner; the Company’s ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; the geology of the Queensway Project as described in the Queensway Technical Report; the accuracy of budgeted exploration and development costs and expenditures; future currency exchange rates and interest rates; operating conditions being favourable such that the Company is able to operate in a safe, efficient and effective manner; the Company’s ability to attract and retain skilled personnel; political and regulatory stability; the receipt of governmental, regulatory and third-party approvals, licenses and permits on favourable terms; obtaining required renewals for existing approvals, licenses and permits on favourable terms; requirements under applicable laws; sustained labour stability; stability in financial and capital goods markets; expectations regarding the level of disruption to exploration at the Queensway Project as a result of COVID 19; availability of equipment.
Furthermore, such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of the Company to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking statements. Such risks include, without limitation: the Company may fail to find a commercially viable deposit at any of its mineral properties; there are no resources or mineral reserves on any of the properties in which the Company has an interest; the Company’s plans may be adversely affected by the Company’s reliance on historical data compiled by previous parties involved with its mineral properties; mineral exploration and development are inherently risky; the mineral exploration industry is intensely competitive; additional financing may not be available to the Company when required or, if available, the terms of such financing may not be favourable to the Company; fluctuations in the demand for gold; the Company may not be able to identify, negotiate or finance any future acquisitions successfully, or to integrate such acquisitions with its current business; the Company’s exploration activities are dependent upon the grant of appropriate licenses, concessions, leases, permits and regulatory consents, which may be withdrawn or not granted; the Company’s operations could be adversely affected by possible future government legislation, policies and controls or by changes in applicable laws and regulations; there is no guarantee that title to the properties in which the Company has a material interest will not be challenged or impugned; the Company faces various risks associated with mining exploration that are not insurable or may be the subject of insurance which is not commercially feasible for the Company; public health crises such as the COVID-19 pandemic may adversely impact the Company’s business; the volatility of global capital markets over the past several years has generally made the raising of capital more difficult; compliance with environmental regulations can be costly; social and environmental activism can negatively impact exploration, development and mining activities; the success of the Company is largely dependent on the performance of its directors and officers; the Company’s operations may be adversely affected by First Nations land claims; the Company and/or its directors and officers may be subject to a variety of legal proceedings, the results of which may have a material adverse effect on the Company’s business; the Company may be adversely affected if potential conflicts of interests involving its directors and officers are not resolved in favour of the Company; the Company’s future profitability may depend upon the world market prices of gold; there is no existing public market for the Company’s securities and an active and liquid one may never develop, which could impact the liquidity of the Company’s securities; dilution from future equity financing could negatively impact holders of the Company’s securities; failure to adequately meet infrastructure requirements could have a material adverse effect on the Company’s business; the Company’s projects now or in the future may be adversely affected by risks outside the control of the Company; the Company is subject to various risks associated with climate change; other factors discussed under “Risk and Uncertainties”.
- 38 -
Management’s Discussion and Analysis
For the six months ended June 30, 2020 and 2019
Although the Company has attempted to identify important factors that could cause actual actions, events, conditions, results, performance or achievements to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events, conditions, results, performance or achievements to differ from those anticipated, estimated or intended.
The Company cautions that the foregoing lists of important assumptions and factors are not exhaustive. Other events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward-looking statements contained herein. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking statements.
Forward-looking statements contained herein are made as of the date of this MD&A and the Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as and to the extent required by applicable securities laws.
Off-Balance Sheet Arrangements
The Company does not utilize off-balance sheet arrangements.
Proposed Transactions
There are no proposed transactions at the date of this report.
Additional Information
Additional information relating to the Company is available on SEDAR at www.sedar.com.
- 39 -
Exhibit 99.12
CONDENSED INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED
JUNE 30, 2020 AND 2019
(Unaudited - Expressed in Canadian Dollars)
NOTICE OF NO AUDITOR REVIEW OF CONDENSED
INTERIM FINANCIAL STATEMENTS
In accordance with National Instrument 51-102 Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of these condensed interim financial statements they must be accompanied by a notice indicating that these condensed interim financial statements have not been reviewed by an auditor.
The accompanying unaudited condensed interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management. The Company’s external auditors have not performed a review of these condensed interim financial statements.
New Found Gold Corp.
Interim Statements of Financial Position
(Unaudited - Expressed in Canadian Dollars)
June 30, | December 31, | |||||||||||
2020 | 2019 | |||||||||||
Note | $ | $ | ||||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash | 11,735,044 | 7,336,638 | ||||||||||
Investments, at fair value | 5 | 26,546,452 | 114,937 | |||||||||
Amounts receivable | 2,837 | 46,085 | ||||||||||
Prepaid expenses and deposits | 901,573 | 436,436 | ||||||||||
Sales taxes recoverable | 194,621 | 291,075 | ||||||||||
Other | 317,654 | - | ||||||||||
Total current assets | 39,698,181 | 8,225,171 | ||||||||||
Non-current assets | ||||||||||||
Exploration and evaluation assets | 3 | 1,200,716 | 1,100,716 | |||||||||
Property and equipment | 4 | 211,572 | 29,149 | |||||||||
Total non-current assets | 1,412,288 | 1,129,865 | ||||||||||
Total Assets | 41,110,469 | 9,355,036 | ||||||||||
LIABILITIES | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable and accrued liabilities | 8 | 503,060 | 392,849 | |||||||||
Flow-through share premium | 6 | 1,856,502 | - | |||||||||
Total current liabilities | 2,359,562 | 392,849 | ||||||||||
EQUITY | ||||||||||||
Share capital | 7 | 34,008,849 | 10,735,862 | |||||||||
Reserves | 7 | 7,102,281 | 4,667,467 | |||||||||
Deficit | (2,360,223 | ) | (6,441,142 | ) | ||||||||
Total equity | 38,750,907 | 8,962,187 | ||||||||||
Total Equity and Liabilities | 41,110,469 | 9,355,036 | ||||||||||
NATURE OF OPERATIONS (Note 1) | ||||||||||||
COMMITMENTS (Note 12) | ||||||||||||
SUBSEQUENT EVENTS (Note 15) |
These financial statements are authorized for issue by the Board of Directors on August 26, 2020. They are signed on the Company’s behalf by:
“Collin Kettell” | , | Director |
“John Anderson” | , | Director |
The accompanying notes are an integral part of these condensed interim financial statements.
- 1 -
New Found Gold Corp.
Interim Statements of Income (Loss) and Comprehensive Income (Loss)
(Unaudited - Expressed in Canadian Dollars)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||
Note | $ | $ | $ | $ | ||||||||||||||||
Expenses | ||||||||||||||||||||
Advertising | 155,435 | - | 155,435 | - | ||||||||||||||||
Depreciation | 4,794 | 3,123 | 6,980 | 6,246 | ||||||||||||||||
Exploration and evaluation expenditures | 3,8 | 582,722 | 54,792 | 1,310,712 | 294,306 | |||||||||||||||
Filing fees | 49,739 | 338 | 55,239 | 338 | ||||||||||||||||
Office and sundry | 24,298 | 5,686 | 45,093 | 14,922 | ||||||||||||||||
Professional fees | 8 | 102,941 | - | 280,636 | - | |||||||||||||||
Salaries and consulting | 8 | 327,750 | 233,500 | 768,132 | 398,000 | |||||||||||||||
Share-based compensation | 8 | 3,032,801 | - | 3,032,801 | - | |||||||||||||||
Travel | 31,794 | 1,732 | 61,039 | 13,407 | ||||||||||||||||
Loss from operating activities | (4,312,274 | ) | (299,171 | ) | (5,716,067 | ) | (727,219 | ) | ||||||||||||
Settlement of flow-through share premium | 6 | 101,117 | - | 101,117 | - | |||||||||||||||
Foreign exchange loss | (2,893 | ) | (57 | ) | (2,021 | ) | (57 | ) | ||||||||||||
Impairment on exploration and evaluation assets | - | (45,000 | ) | - | (45,000 | ) | ||||||||||||||
Interest income | 2,485 | - | 2,485 | - | ||||||||||||||||
Net realized losses on disposal of investments | - | - | - | (120,734 | ) | |||||||||||||||
Net change in unrealized gains (losses) on investments | 5 | 14,898,946 | (11,481 | ) | 9,695,405 | 40,584 | ||||||||||||||
Income (loss) and comprehensive income (loss) for the period | 10,687,381 | (355,709 | ) | 4,080,919 | (852,426 | ) | ||||||||||||||
Earnings (loss) per share – basic ($) | 9 | 0.11 | (0.01 | ) | 0.05 | (0.02 | ) | |||||||||||||
Earnings (loss) per share – diluted ($) | 9 | 0.09 | (0.01 | ) | 0.04 | (0.02 | ) |
The accompanying notes are an integral part of these condensed interim financial statements.
- 2 -
New Found Gold Corp.
Interim Statements of Cash Flows
(Unaudited - Expressed in Canadian Dollars)
Six months ended June 30, | ||||||||
2020 | 2019 | |||||||
$ | $ | |||||||
Cash flows from operating activities | ||||||||
Income (loss) for the period | 4,080,919 | (852,426 | ) | |||||
Adjustments for: | ||||||||
Settlement of flow-through share premium | (101,117 | ) | - | |||||
Depreciation | 6,980 | 6,246 | ||||||
Impairment of exploration and evaluation assets | - | 45,000 | ||||||
Share-based compensation | 3,032,801 | - | ||||||
Net realized losses on disposal of investments | - | 120,734 | ||||||
Net change in unrealized gains on investments | (9,695,405 | ) | (40,584 | ) | ||||
(2,675,822 | ) | (721,030 | ) | |||||
Change in non-cash working capital items: | ||||||||
Decrease in amounts receivable | 43,248 | 162,013 | ||||||
(Increase) decrease in prepaid expenses and deposits | (426,632 | ) | 2,457 | |||||
Decrease (increase) in sales taxes recoverable | 96,454 | (68,775 | ) | |||||
Increase (decrease) in accounts payable and accrued liabilities | 110,211 | (478,416 | ) | |||||
(Increase) in other | (317,654 | ) | - | |||||
Net cash used in operating activities | (3,170,195 | ) | (1,103,751 | ) | ||||
Cash flows from investing activities | ||||||||
Purchase of exploration and evaluation assets | (100,000 | ) | (90,520 | ) | ||||
Expenditures on claims staking | (38,505 | ) | - | |||||
Proceeds on disposal of investments | - | 280,785 | ||||||
Purchases of property, plant and equipment | (189,403 | ) | - | |||||
Net cash (used in) generated from investing activities | (327,908 | ) | 190,265 | |||||
Cash flows from financing activities | ||||||||
Issuance of common shares in private placements | 7,118,196 | 750,000 | ||||||
Share issue costs | (126,187 | ) | - | |||||
Stock options exercised | 904,500 | 64,500 | ||||||
Net cash generated from financing activities | 7,896,509 | 814,500 | ||||||
Net increase (decrease) increase in cash | 4,398,406 | (98,986 | ) | |||||
Cash at beginning of period | 7,336,638 | 323,179 | ||||||
Cash at end of period | 11,735,044 | 224,193 |
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS (Note 9) |
The accompanying notes are an integral part of these condensed interim financial statements.
- 3 -
New Found Gold Corp.
Interim Statements of Changes in Equity
(Unaudited - Expressed in Canadian Dollars)
Share capital | Reserves | |||||||||||||||||||||||
Equity settled | ||||||||||||||||||||||||
share-based | ||||||||||||||||||||||||
Number | Amount | payments | Warrants | Deficit | Total equity | |||||||||||||||||||
of shares | $ | $ | $ | $ | $ | |||||||||||||||||||
Balance at December 31, 2018 | 56,351,750 | 2,845,700 | 530,601 | - | (2,421,110 | ) | 955,191 | |||||||||||||||||
Issued pursuant to acquisition of exploration and evaluation assets | 167,500 | 22,000 | - | - | - | 22,000 | ||||||||||||||||||
Shares issued in private placement | 1,875,000 | 750,000 | - | - | - | 750,000 | ||||||||||||||||||
Stock options exercised | 430,000 | 100,620 | (36,120 | ) | - | - | 64,500 | |||||||||||||||||
Total comprehensive (loss) for the period | - | - | - | - | (852,426 | ) | (852,426 | ) | ||||||||||||||||
Balance at June 30, 2019 | 58,824,250 | 3,718,320 | 494,481 | - | (3,273,536 | ) | 939,265 | |||||||||||||||||
Issued pursuant to acquisition of exploration and evaluation assets | 349,999 | 185,000 | - | - | - | 185,000 | ||||||||||||||||||
Share-based compensation | - | - | 2,130,528 | - | - | 2,130,528 | ||||||||||||||||||
Shares issued in private placement | 17,250,000 | 6,247,542 | - | 2,252,458 | - | 8,500,000 | ||||||||||||||||||
Stock options exercised | 2,500,000 | 585,000 | (210,000 | ) | - | - | 375,000 | |||||||||||||||||
Total comprehensive (loss) for the period | - | - | - | - | (3,167,606 | ) | (3,167,606 | ) | ||||||||||||||||
Balance at December 31, 2019 | 78,924,249 | 10,735,862 | 2,415,009 | 2,252,458 | (6,441,142 | ) | 8,962,187 | |||||||||||||||||
Shares issued in private placement | 15,000,000 | 16,736,110 | - | - | - | 16,736,110 | ||||||||||||||||||
Flow-through shares issued in private placement | 4,860,982 | 7,118,196 | - | - | - | 7,118,196 | ||||||||||||||||||
Share issue costs | - | (126,187 | ) | - | - | - | (126,187 | ) | ||||||||||||||||
Agents’ warrants issued | - | (42,183 | ) | - | 42,183 | - | - | |||||||||||||||||
Flow-through share premium | - | (1,957,619 | ) | - | - | - | (1,957,619 | ) | ||||||||||||||||
Share-based compensation | - | - | 3,032,801 | - | - | 3,032,801 | ||||||||||||||||||
Stock options exercised | 2,915,000 | 1,544,670 | (640,170 | ) | - | - | 904,500 | |||||||||||||||||
Total comprehensive income for the period | - | - | - | - | 4,080,919 | 4,080,919 | ||||||||||||||||||
Balance at June 30, 2020 | 101,700,231 | 34,008,849 | 4,807,640 | 2,294,641 | (2,360,223 | ) | 38,750,907 |
The accompanying notes are an integral part of these condensed interim financial statements.
- 4 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the six months ended June, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
1. | NATURE OF OPERATIONS |
New Found Gold Corp. (the “Company”) was incorporated on January 6, 2016, under the Business Corporations Act in the Province of Ontario. On June 23, 2020, the Company continued as a British Columbia corporation under the Business Corporation Act in the province of British Columbia. The Company’s registered office is located at Suite 2600 – 595 Burrard Street, Vancouver, British Columbia V7X 1L3.
The Company is a mineral exploration company engaged in the acquisition, exploration and evaluation of resource properties with a focus on gold properties located in the Provinces of Newfoundland and Labrador and Ontario, Canada. The Company’s exploration and evaluation assets presently have no proven or probable reserves, and on the basis of information to date, it has not yet determined whether these properties contain economically recoverable resources. The recoverability of amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production.
On March 11, 2020, the World Health Organization declared the global outbreak of a novel coronavirus identified as “COVID-19” a global pandemic. In order to combat the spread of COVID-19, governments worldwide have enacted emergency measures including travel bans, legally enforced or self-imposed quarantine periods, social distancing and business and organization closures. These measures have caused material disruptions to businesses, governments and other organizations resulting in an economic slowdown and increased volatility in national and global equity and commodity markets. Central banks and governments, including Canadian federal and provincial governments, have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of any interventions. Significant economic and social impacts have limited the Company’s ability to continue its exploration and evaluation activities as intended. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company and its operations in future periods.
These condensed interim financial statements were approved by the Board of Directors of the Company on August 26, 2020.
2. | SIGNIFICANT ACCOUNTING POLICIES |
The principal accounting policies applied in the preparation of these financial statements are set out below.
a) Statement of compliance
The Company’s condensed interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as applicable to interim financial reports including International Accounting Standards 34 “Interim Financial Reporting”.
These condensed interim financial statements do not include all the information and note disclosures required by IFRS for annual financial statements and should be read in conjunction with the annual financial statements for the year ended December 31, 2019, which have been prepared in accordance with IFRS, as issued by the International Accounting Standards Board (“IASB”) and included in Part I of the Handbook of the Chartered Professional Accountants of Canada.
The policies applied in these condensed interim financial statements are the same as those applied in the most recent annual financial statements and were consistently applied to all the periods presented.
- 5 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the six months ended June, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
2. | SIGNIFICANT ACCOUNTING POLICIES (continued) |
b) Basis of presentation
These condensed financial statements have been prepared on a historical cost basis except for financial instruments classified as subsequently measured at fair value. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information.
c) Significant accounting estimates and judgments
The preparation of these condensed interim financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.
These condensed interim financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates may be pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant assumptions about the future and other sources of estimation uncertainty that management has made at year end that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to the following:
(i) Critical accounting estimates
Valuation of Options Granted and Warrants Issued
The fair value of common share purchase options granted and warrants issued is determined at the issue date using the Black-Scholes option pricing model. The Black-Scholes model involves six key inputs to determine the fair value of an option, which are: risk-free interest rate, exercise price, market price at the grant date, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are or could be affected by significant factors that are out of the Company’s control. The Company is also required to estimate the future forfeiture rate of options based on historical information in its calculation of share-based payments expense. These estimates impact the values of stock-based compensation expense, share capital, and reserves.
Valuation of Investments in Restricted Securities
Investments in securities issued directly by an issuer are often restricted under securities law. The Company values such securities at fair value based on market prices and applies a discount between 0% and 10% depending on the circumstances. The Company holds an investment in Novo Resources Corp., which is traded on the TSX Venture Exchange and is restricted until July 7, 2020. Management has judged that due to the time remaining on the restriction and nature of the restriction, size of the position, and the liquidity of the stock, to apply no discount to the investment as at June 30, 2020.
- 6 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the six months ended June, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
2. | SIGNIFICANT ACCOUNTING POLICIES (continued) |
Computation of Income Taxes
The determination of tax expense for the period and deferred tax assets and liabilities involves significant estimation and judgment by management. In determining these amounts, management interprets tax legislation in a variety of jurisdictions and make estimates of the expected timing of the reversal of deferred tax assets and liabilities. Management also makes estimates of future earnings which affect the extent to which potential future tax benefits may be used. The Company is subject to assessments by taxation authorities, which may interpret legislation differently. These differences may affect the final amount or the timing of the payment of taxes. We provide for such differences where known based on our best estimate of the probable outcome of these matters.
Shares Issued to Acquire Exploration and Evaluation Assets
From time to time, the Company issues common shares in the course of acquiring exploration and evaluation assets. When shares are issued without cash consideration, the transaction is recognized at the fair value of the assets received. In the event that the fair value of the assets cannot be reliably determined, the Company will recognize the transaction at the fair value of the shares issued. These estimates impact the value of share capital and exploration and evaluation assets.
Flow-Through Shares
On issuance of flow-through shares, the Company bifurcates the flow-through share into i) a flow-through share premium, equal to the estimated premium, if any, investors pay for the flow-through feature, which is recognized as a liability and; ii) share capital. Upon qualifying expenditures being incurred, the Company derecognizes the liability and recognizes a deferred tax liability for the amount of tax reduction renounced to the shareholders. The premium is recognized as other income and the related deferred tax is recognized as a tax provision. To the extent that the Company has deferred tax assets in the form of tax loss carry-forwards and other unused tax credits as at the reporting.
(ii) Critical accounting judgments
Impairment of Exploration and Evaluation Assets
Management is required to assess impairment in respect to the Company’s intangible mineral property interests. The triggering events are defined in IFRS 6. In making the assessment, management is required to make judgments on the status of each project and the future plans towards finding commercial reserves. The carrying value of each exploration and evaluation asset is reviewed regularly for conditions that may suggest impairment. This review requires significant judgment. Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the property’s value; whether there has been an accumulation of costs significantly in excess of the amounts originally expected for the property’s acquisition, development or cost of holding; and whether exploration activities produced results that are not promising such that no more work is being planned in the foreseeable future. If impairment is determined to exist, a formal estimate of the recoverable amount is performed and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount. Management has determined that there were no indicators of impairment as at June 30, 2020.
- 7 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the six months ended June, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
3. | EXPLORATION AND EVALUATION ASSETS |
The schedules below summarize the carrying costs of acquisition and exploration costs incurred to date for each exploration and evaluation asset that the Company is continuing to explore as at June 30, 2020 and December 31, 2019:
Newfoundland | ||||||||||||||||
Queensway(i) | Other | Ontario (ii) | Total | |||||||||||||
Six months ended June 30, 2020 | $ | $ | $ | $ | ||||||||||||
Exploration and evaluation assets | ||||||||||||||||
Balance as at December 31, 2019 | 658,700 | 16,500 | 425,516 | 1,100,716 | ||||||||||||
Additions | ||||||||||||||||
Acquisition costs | 75,000 | - | 25,000 | 100,000 | ||||||||||||
Balance as at June 30, 2020 | 733,700 | 16,500 | 450,516 | 1,200,716 | ||||||||||||
Exploration and evaluation expenditures | ||||||||||||||||
Cumulative exploration expense - December 31, 2019 | 2,542,344 | - | 837,133 | 3,379,477 | ||||||||||||
Assays | 104,487 | 414 | 211 | 105,112 | ||||||||||||
Geophysics | 611,523 | - | - | 611,523 | ||||||||||||
Office | 821 | - | - | 821 | ||||||||||||
Property taxes, mining leases and rent | 26,020 | - | 400 | 26,420 | ||||||||||||
Salaries & consulting | 297,543 | 8,300 | 36,613 | 342,456 | ||||||||||||
Supplies & equipment | 164,539 | - | 18,631 | 183,170 | ||||||||||||
Travel | 26,439 | - | 76 | 26,515 | ||||||||||||
Trenching | 13,510 | - | 31,865 | 45,375 | ||||||||||||
Exploration cost recovery | (30,680 | ) | - | - | (30,680 | ) | ||||||||||
1,214,202 | 8,714 | 87,796 | 1,310,712 | |||||||||||||
Cumulative exploration expense – June 30, 2020 | 3,756,546 | 8,714 | 924,929 | 4,690,189 |
- 8 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the six months ended June, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
3. | EXPLORATION AND EVALUATION ASSETS (continued) |
Newfoundland | ||||||||||||||||
Queensway(i) | Other | Ontario (ii) | Total | |||||||||||||
Six months ended June 30, 2019 | $ | $ | $ | $ | ||||||||||||
Exploration and evaluation assets | ||||||||||||||||
Balance as at December 31, 2018 | 276,330 | 107,835 | 293,516 | 677,681 | ||||||||||||
Additions | ||||||||||||||||
Acquisition costs | 50,520 | - | 62,000 | 112,520 | ||||||||||||
Impairment of exploration and evaluation assets | - | (45,000 | ) | - | (45,000 | ) | ||||||||||
Balance as at June 30, 2019 | 326,850 | 62,835 | 355,516 | 745,201 | ||||||||||||
Exploration and evaluation expenditures | ||||||||||||||||
Cumulative exploration expense - December 31, 2018 | 1,890,601 | - | 831,337 | 2,721,938 | ||||||||||||
Assays | 6,030 | - | - | 6,030 | ||||||||||||
Geophysics | 162,375 | - | - | 162,375 | ||||||||||||
Property taxes, mining leases and rent | 25,761 | - | 1,548 | 27,309 | ||||||||||||
Salaries & consulting | 75,046 | - | - | 75,046 | ||||||||||||
Supplies & equipment | 19,490 | - | - | 19,490 | ||||||||||||
Travel | 4,056 | - | - | 4,056 | ||||||||||||
292,758 | - | 1,548 | 294,306 | |||||||||||||
Cumulative exploration expense – June 30, 2019 | 2,183,359 | - | 832,885 | 3,016,244 |
(i) Queensway Project – Gander, Newfoundland
As at June 30, 2020, the Company owns a 100% interest in 86 mineral licenses including 6,041 claims comprising 151,030 hectares of land located in Gander, Newfoundland. The project rights were acquired by map staking mineral licenses and making staged payments in cash and common shares of the Company from 2016 through 2019 under nine separate, fully executed option agreements. The optioned lands carry various net smelter return (“NSR”) royalties ranging from 0.6% to 2.0% which can be reduced to 0.5% to 1.0%, at the Company’s option, with payments ranging from $250,000 to $1,000,000 to the optionors. The total cost of the NSR’s that may be purchased at the Company’s discretion is $5,250,000.
(ii) Ontario Projects
As at June 30, 2020, the Company owns a 100% interest in the Lucky Strike project in Kirkland Lake, Ontario comprising 11,441 hectares, as well as a portfolio of mining and royalty interests throughout northeastern Ontario. The project rights were acquired by map staking mineral licenses and making staged payments in cash and common shares of the Company from 2016 through 2019 under a fully executed option agreement. The optioned lands carry an NSR of 1%.
- 9 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the six months ended June, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
4. | EQUIPMENT |
Computer | Geological | |||||||||||||||
Equipment | Equipment | Vehicles | Total | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Cost | ||||||||||||||||
Balance at December 31, 2019 | - | - | 45,949 | 45,949 | ||||||||||||
Additions | 3,551 | 72,414 | 113,438 | 189,403 | ||||||||||||
Balance at June 30, 2020 | 3,551 | 72,414 | 159,387 | 235,352 | ||||||||||||
Accumulated Depreciation | ||||||||||||||||
Balance at December 31, 2019 | - | - | 16,800 | 16,800 | ||||||||||||
Depreciation | 407 | 885 | 5,688 | 6,980 | ||||||||||||
Balance at June 30, 2020 | 407 | 885 | 22,488 | 23,780 | ||||||||||||
Carrying Amount | ||||||||||||||||
At December 31, 2019 | - | - | 29,149 | 29,149 | ||||||||||||
At June 30, 2020 | 3,144 | 71,529 | 136,899 | 211,572 |
5. | INVESTMENTS |
The Company classifies its investments as subsequently measured at FVTPL. Realized gains and losses on disposal of investments and unrealized gains and losses in the fair value of investments are reflected in the statement of income (loss) and comprehensive income (loss) in the period in which they occur.
The fair value and cost of investments as at June 30, 2020 and December 31, 2019 are as follows:
Fair Value | Cost | ||||||||
$ | $ | ||||||||
June 30, 2020 | 26,546,452 | 17,323,030 | |||||||
December 31, 2019 | 114,937 | 586,920 |
An analysis of investments including related gains and losses for the six months ended June 30, 2020 and 2019 is as follows:
Six months ended June 30, | ||||||||
2020 | 2019 | |||||||
$ | $ | |||||||
Investments, beginning of period | 114,937 | 398,102 | ||||||
Investments acquired in private placement | 16,736,110 | - | ||||||
Disposition of investments | - | (280,785 | ) | |||||
Realized (loss) on investments | - | (120,734 | ) | |||||
Unrealized gain on investments | 9,695,405 | 40,584 | ||||||
Investments, end of period | 26,546,452 | 37,167 |
- 10 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the six months ended June, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
6. | FLOW-THROUGH SHARE PREMIUM |
Issued | Issued | |||||||||||
June 4, 2020 | June 10, 2020 | Total | ||||||||||
$ | $ | $ | ||||||||||
Balance at December 31, 2019 | - | - | - | |||||||||
Liability incurred on flow-through shares issued | 1,697,704 | 259,915 | 1,957,619 | |||||||||
Settlement of flow-through share premium on expenditures incurred | (101,117 | ) | - | (101,117 | ) | |||||||
Balance at June 30, 2020 | 1,596,587 | 259,915 | 1,856,502 |
Flow-through share arrangements entitle the holder of the flow-through share to a 100% tax deduction in respect of qualifying Canadian exploration expenses as defined in the Income Tax Act, Canada (“Qualifying CEE”). At June 30, 2020, the Company incurred $367,677 (December 31, 2020 - $Nil) in Qualifying CEE and amortized a total of $101,117 of its flow-through liabilities.
The flow-through premium liability does not represent a cash liability to the Company and is to be fully amortized to the statement of comprehensive income (loss) pro-rata with the amount of qualifying expenditures that will be incurred.
As at June 30, 2020, the Company must spend another $6,750,519 of Qualifying CEE within two years to satisfy its remaining flow-through obligations.
7. | SHARE CAPITAL AND RESERVES |
Authorized Share Capital
At June 30, 2020, the authorized share capital comprised an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.
Details of Common Shares Issued in 2020
During the six months ended June 30, 2020, 2,915,000 stock options were exercised at a weighted average exercise price of $0.31 per share for gross proceeds of $904,500.
On March 6, 2020, the Company completed a private placement consisting of 15,000,000 common shares in exchange for non-cash consideration of 6,944,444 common shares of Novo Resources Corp. (TSXV: NVO) at a price of $2.41 per share for gross proceeds of $16,736,110.
On June 4, 2020, the Company completed a non-brokered private placement financing of 3,994,597 flow-through common shares at a price of $1.50 per common share for gross proceeds of $5,991,896. Finders’ fees paid were $69,394 in cash and the issuance of 64,282 warrants exercisable into common shares of the Company at $1.50 per share for two years from date of issue with a fair value of $25,912. The premium received on the flow-through shares issued was determined to be $1,690,704.
On June 10, 2020, the Company completed a non-brokered private placement financing of 866,385 flow-through common shares at a price of $1.30 per common share for gross proceeds of $1,126,300. Finders’ fees paid were $56,793 in cash and the issuance of 43,582 warrants exercisable into common shares of the Company at $1.30 per share for two years from the date of issue with a fair value of $16,271. The premium received on the flow-through shares issued was determined to be $259,915.
- 11 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the six months ended June, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
7. | SHARE CAPITAL AND RESERVES (continued) |
Details of Common Shares Issued in 2019
During fiscal 2019, the Company issued 517,499 common shares at $0.40 per share totaling $207,000, pursuant to the acquisition of exploration and evaluation assets in accordance with the terms of certain property option agreements.
On March 7, 2019, 430,000 stock options were exercised at $0.15 per share for gross proceeds of $64,500.
On June 18, 2019, the Company completed a non-brokered private placement financing of 1,875,000 common shares at $0.40 per share for gross proceeds of $750,000.
On July 3, 2019, the Company completed a non-brokered private placement financing of 1,250,000 common shares at $0.40 per share for gross proceeds of $500,000.
On December 12, 2019, 2,500,000 stock options were exercised at $0.15 per share for gross proceeds of $375,000.
On November 29, 2019, the Company completed a non-brokered private placement financing of 16,000,000 units at $0.50 per unit for gross proceeds of $8,000,000. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one additional common share at a price of $0.75 per share for three years from the issuance date.
Share Purchase Option Compensation Plan
The Company has a share purchase option plan (the “Plan”) approved by the Company’s shareholders that allows it to grant share purchase options, subject to regulatory terms and approval, to its officers, directors, employees and service providers. The Plan is based on the maximum number of eligible shares not exceeding 10% in the aggregate and 5% with respect to any one optionee of the Company’s outstanding common shares at the time of grant. If outstanding share purchase options are exercised or expire, and/or the number of issued and outstanding common shares of the Company increases, then the share purchase options available to grant under the Plan increase proportionately. The exercise price and vesting terms of each share purchase option is set by the Board of Directors at the time of grant. Share purchase options granted are subject to a four- month hold period and exercisable for a period determined by the Board of Directors which cannot exceed five years.
The continuity of share purchase options for the six months ended June 30, 2020 is as follows:
Outstanding | Outstanding | Exercisable | ||||||||||||||||||||||||||
Exercise | December | Cancelled/ | June | June | ||||||||||||||||||||||||
Expiry date | Price | 31, 2019 | Granted | Exercised | Expired | 30, 2020 | 30, 2020 | |||||||||||||||||||||
February 20, 2022 | $ | 0.15 | 1,930,000 | - | (1,580,000 | ) | - | 350,000 | 350,000 | |||||||||||||||||||
September 30, 2023 | $ | 0.40 | 350,000 | - | - | - | 350,000 | 350,000 | ||||||||||||||||||||
December 17, 2024 | $ | 0.50 | 5,605,000 | - | (1,335,000 | ) | - | 4,270,000 | 4,270,000 | |||||||||||||||||||
April 18, 2025 | $ | 1.00 | - | 2,300,000 | - | - | 2,300,000 | 2,300,000 | ||||||||||||||||||||
May 23, 2025 | $ | 1.075 | - | 1,670,000 | - | - | 1,670,000 | 1,670,000 | ||||||||||||||||||||
7,885,000 | 3,970,000 | (2,915,000 | ) | - | 8,940,000 | 8,940,000 | ||||||||||||||||||||||
Weighted average exercise price $ | 0.41 | 1.03 | 0.31 | - | 0.72 | 0.72 | ||||||||||||||||||||||
Weighted average contractual remaining life (years) | 4.22 | 4.84 | - | - | 4.48 | 4.48 |
- 12 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the six months ended June, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
7. | SHARE CAPITAL AND RESERVES (continued) |
The continuity of share purchase options for the six months ended June 30, 2019 is as follows:
Outstanding | Outstanding | Exercisable | ||||||||||||||||||||||||||
Exercise | December | Cancelled/ | June | June | ||||||||||||||||||||||||
Expiry date | Price | 31, 2018 | Granted | Exercised | Expired | 30, 2019 | 30, 2019 | |||||||||||||||||||||
February 20, 2022 | $ | 0.15 | 4,860,000 | - | (430,000 | ) | - | 4,430,000 | 4,430,000 | |||||||||||||||||||
September 30, 2023 | $ | 0.40 | 350,000 | - | - | - | 350,000 | 350,000 | ||||||||||||||||||||
5,210,000 | - | (430,000 | ) | - | 4,780,000 | 4,780,000 | ||||||||||||||||||||||
Weighted average exercise price $ | 0.17 | - | 0.15 | - | 0.17 | 0.17 | ||||||||||||||||||||||
Weighted average contractual remaining life (years) | 3.18 | - | - | - | 2.65 | 2.65 |
The weighted average fair value of share purchase options exercised during the six months ended June 30, 2020 is $0.31 (six months ended June 30, 2019 - $0.15).
The weighted average fair value of share purchase options granted during the six months ended June 30, 2020 is $0.76 (six months ended June 30, 2019 - $Nil).
Options were priced based on the Black-Scholes option pricing model using the following weighted average assumptions to estimate the fair value of options granted:
Six months ended June 30, | ||||||||
2020 | 2019 | |||||||
Risk-free interest rate | 0.42 | % | - | |||||
Expected option life in years | 5.0 | - | ||||||
Expected share price volatility(i) | 100 | % | - | |||||
Grant date share price | 1.0375 | - | ||||||
Expected forfeiture rate | - | - | ||||||
Expected dividend yield | - | - |
(i) | The expected share price volatility is based on the average historical share price of comparable companies over the life of the option. |
Warrants
The continuity of warrants for the six months ended June 30, 2020 is as follows:
Outstanding | Outstanding | |||||||||||||||||||||||
Exercise | December | Cancelled/ | June | |||||||||||||||||||||
Expiry date | Price | 31, 2019 | Issued | Exercised | Expired | 30, 2020 | ||||||||||||||||||
May 12, 2022 | $ | 1.30 | - | 39,475 | - | - | 39,475 | |||||||||||||||||
May 13, 2022 | $ | 1.50 | - | 36,052 | - | - | 36,052 | |||||||||||||||||
June 4, 2022 | $ | 1.50 | - | 28,230 | - | - | 28,230 | |||||||||||||||||
June 10, 2022 | $ | 1.30 | - | 4,107 | - | - | 4,107 | |||||||||||||||||
November 29, 2022 | $ | 0.75 | 16,000,000 | - | - | - | 16,000,000 | |||||||||||||||||
16,000,000 | 107,864 | - | - | 16,107,864 | ||||||||||||||||||||
Weighted average exercise price $ | 0.75 | 1.42 | - | - | 0.75 | |||||||||||||||||||
Weighted average contractual remaining life (years) | 2.92 | 1.89 | - | - | 2.41 |
- 13 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the six months ended June, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
7. | SHARE CAPITAL AND RESERVES (continued) |
The Company did not have any warrants outstanding for the six months ended June 30, 2019.
The weighted average fair value of warrants issued during the six months ended June 30, 2020 is $0.38 (six months ended June 30, 2019 - $Nil).
Warrants were priced based on the Black-Scholes option pricing model using the following weighted average assumptions to estimate the fair value of warrants issued:
Six months ended June 30, | ||||||||
2020 | 2019 | |||||||
Risk-free interest rate | 0.29 | % | - | |||||
Expected option life in years | 2.0 | - | ||||||
Expected share price volatility(i) | 84 | % | - | |||||
Grant date share price | 1.0375 | - | ||||||
Expected forfeiture rate | - | - | ||||||
Expected dividend yield | - | - |
(i) | The expected share price volatility is based on the average historical share price of comparable companies over the life of the option. |
8. | RELATED PARTY BALANCES AND TRANSACTIONS |
All transactions with related parties have occurred in the normal course of operations and on terms and conditions that are similar to those of transactions with unrelated parties and are measured at the amount of consideration paid or received. A summary of the Company’s related party transactions with corporations having similar directors and officers, being Goldspot Discoveries Inc., is as follows:
Six months ended June 30, | ||||||||
2020 | 2019 | |||||||
$ | $ | |||||||
Amounts paid to Goldspot Discoveries Inc. (i) for administration, exploration and evaluation | 69,511 | 150,000 | ||||||
Options exercised by members of key management | 500,000 | - |
(i) | Goldspot Discoveries Inc. is a related entity having the following common director and officer to the Company: Denis Laviolette, Director and President. |
Key management personnel compensation
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers.
During the six months ended June 30, 2020, key management personnel compensation totaled $3,805,437 (six months ended June 30, 2019 - $305,000) comprised of salaries and consulting of $702,069 (six months ended June 30, 2019 - $305,000) paid to the Chief Financial Officer, the Chief Operating Officer and companies controlled by the Company’s Chief Executive Officer and Executive Chairman, and share-based compensation of $3,3033,857 (six months ended June 30, 2019 - $Nil) relating to 3,970,000 (six months ended June 30, 2019 – Nil) stock options granted to directors and officers of the Company.
As at June 30, 2020, $21,667 is included in accounts payable and accrued liabilities for amounts owed to the Chief Operating Officer (six months ended June 30, 2019 - $12,242).
- 14 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the six months ended June, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
8. | RELATED PARTY BALANCES AND TRANSACTIONS (continued) |
As at June 30, 2020, $69,511 (six months ended June 30, 2019 - $7,875) is included in accounts payable and accrued liabilities for amounts owed to Goldspot Discoveries Inc., a related company having a common director and officer (Denis Laviolette, Director and President of both entities).
On January 26, 2020 the Company entered into a binding letter agreement with Mexican Gold Mining Corp. (“MGMC”) to have all of the issued and outstanding shares of the Company acquired by MGMC. On February 19, 2020, the Company announced that the binding letter agreement was mutually terminated. During the six months ended June 30, 2020, the Company paid $127,234 to MGMC for legal fees incurred in connection with the transaction which was terminated.
There are no ongoing contractual commitments resulting from these transactions with related parties.
9. | EARNINGS (LOSS) PER SHARE |
Three months ended June 30, | ||||||||||||||||
2020 | 2019 | |||||||||||||||
Basic | Diluted | Basic | Diluted | |||||||||||||
Earnings (loss) attributable to common shareholders ($) | 10,687,381 | 10,687,381 | (355,709 | ) | (355,709 | ) | ||||||||||
Weighted average number of common shares outstanding | 97,481,889 | 122,529,753 | 56,726,609 | 56,726,609 | ||||||||||||
Earnings (loss) per share attributed to common shareholders | $ | 0.11 | $ | 0.09 | $ | (0.01 | ) | $ | (0.01 | ) |
Six months ended June 30, | ||||||||||||||||
2020 | 2019 | |||||||||||||||
Basic | Diluted | Basic | Diluted | |||||||||||||
Earnings (loss) attributable to common shareholders ($) | 4,080,919 | 4,080,919 | (852,426 | ) | (852,426 | ) | ||||||||||
Weighted average number of common shares outstanding | 90,306,501 | 115,354,365 | 56,755,769 | 56,755,769 | ||||||||||||
Earnings (loss) per share attributed to common shareholders | $ | 0.05 | $ | 0.04 | $ | (0.02 | ) | $ | (0.02 | ) |
Diluted earnings per share included the effect of 8,940,000 (2019 – 4,780,000) share purchase options and 16,107,864 (2019 – Nil) common share purchase warrants.
10. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS |
Six months ended June 30, | ||||||||
2020 | 2019 | |||||||
$ | $ | |||||||
Non-cash investing and financing activities: | ||||||||
Investments received for private placement | 16,736,110 | - | ||||||
Agents warrants issued in private placements | 42,183 | |||||||
Cash paid for income taxes | - | - | ||||||
Cash paid for interest | - | - |
- 15 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the six months ended June, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
11. | SEGMENTED INFORMATION |
The Company’s operations are limited to a single reportable segment, being mineral exploration and evaluation. All of the Company’s evaluation and exploration assets are located in Canada.
12. | COMMITMENTS |
The Company is required to spend approximately $1,603,242 over the next 12 months to keep all claims owned in good standing.
13. | FINANCIAL INSTRUMENTS |
The Company thoroughly examines the various financial instrument risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include credit risk, liquidity risk, currency risk, and interest rate risk. Where material, these risks are reviewed and monitored by the Board of Directors.
(a) Fair Values
Financial assets and liabilities measured at fair value are recognized according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy are as follows:
Level 1 – | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
Level 2 – | Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. |
Level 3 – | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
The Company’s only financial instrument measured at fair value are its investments, for which the fair value is determined using closing prices at the statement of financial position date with any unrealized gain or loss recognized in profit or loss.
The carrying values of other financial instruments, including cash, deposits and amounts receivable, and accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of these financial instruments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||
Recurring measurements | Carrying amount | Fair value | ||||||||||||||||||
Investments, at fair value | ||||||||||||||||||||
June 30, 2020 | 26,546,452 | 26,546,452 | - | - | 26,546,452 | |||||||||||||||
December 31, 2019 | 114,937 | 114,937 | - | - | 114,937 |
- 16 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the six months ended June, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
13. | FINANCIAL INSTRUMENTS (continued) |
(b) Financial Instrument Risk Exposure
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company does not have financial instruments that potentially subject the Company to credit risk. Overall, the Company’s credit risk has not changed significantly from the prior year. Sales taxes recoverable are due from the Canada Revenue Agency and the Company places its cash with financial institutions with high credit ratings, therefore in management’s judgment, credit risk is low.
There have been no changes in management’s methods for managing credit risk since December 31, 2019.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has in place a planning and budgeting process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. The Company has historically relied on issuance of shares to fund exploration programs and may require doing so again in the future. As at June 30, 2020, the Company has total liabilities of $2,359,562 and cash of $11,735,044 which is available to discharge these liabilities (December 31, 2019 – total liabilities of $392,849 and cash of $7,336,638). Accordingly, in management’s judgment, liquidity risk is low.
There have been no changes in management’s methods for managing liquidity risk since December 31, 2019.
Market risk
(i) Currency risk
Financial instruments that impact the Company’s net earnings or other comprehensive income due to currency fluctuation include cash accounts denominated in US dollars and investments denominated in Australian dollars. Fluctuations in the exchange rate between the US dollar and the Canadian dollar at June 30, 2020 would not have a material impact on the Company’s net earnings and other comprehensive income. The sensitivity of the Company’s net earnings and other comprehensive income to changes in the exchange rate between the Canadian dollar and the Australian dollar at June 30, 2020 would change the company’s net loss (income) by $36,890 as a result of a 10% change in the Canadian dollar exchange rate relative to the Australian dollar.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. As the Company deposits its short-term investments into fixed rate guaranteed investment certificates with one-year maturities or less, the Company is not exposed to interest rate risk.
(iii) Commodity price risk
Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company’s property has exposure to predominantly gold. Commodity prices, especially gold, greatly affect the value of the Company and the potential value of its property and investments.
- 17 -
New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the six months ended June, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
13. | FINANCIAL INSTRUMENTS (continued) |
(iv) Equity price risk
Equity price risk is the risk that the fair value of or future cash flows from the Company’s financial instruments will significantly fluctuate because of changes in market prices. The Company is exposed to market risk in trading its investments in unfavorable market conditions which could result in dispositions of investments at less than favorable prices. Additionally, the Company adjusts its investments to fair value at the end of each reporting period. This process could result in write-downs of the Company’s investments over one or more reporting periods, particularly during periods of overall market instability. The sensitivity of the Company’s net income (loss) to changes in market prices at June 30, 2020 would change the Company’s net income (loss) by $2,618,055 as a result of a 10% change in the market price of its investments.
There have been no changes in management’s methods for managing market risks since December 31, 2019.
14. | CAPITAL MANAGEMENT |
The Company’s objectives when managing capital are:
· | To safeguard our ability to continue as a going concern in order to develop and operate our current projects; | |
· | Pursue strategic growth initiatives; and | |
· | To maintain a flexible capital structure which lowers the cost of capital. |
In assessing our capital structure, we include in our assessment the components of equity consisting of common shares, stock options and warrants, and deficit that as at June 30, 2020 totalled $38,750,907 (December 31, 2019 - $8,962,187). In order to facilitate the management of capital requirements, the Company prepares annual expenditure budgets and continuously monitors and reviews actual and forecasted cash flows. The annual and updated budgets are monitored and approved by the Board of Directors. To maintain or adjust the capital structure, the Company may, from time to time, issue new shares, issue new debt, repay debt or dispose of non-core assets. The Company’s current capital resources are sufficient to carry out our exploration plans and support operations through the current operating period.
The Company is not subject to any capital requirements imposed by a regulator.
There were no changes in the Company’s approach to capital management during the six months ended June 30, 2020.
15. | SUBSEQUENT EVENTS |
Initial Public Offering
On August 11, 2020, the Company completed an initial public offering of an aggregate of 21,000,000 common shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 14, 2020, its agents exercised their overallotment option in full to offer and sell an additional 3,150,000 common shares for gross proceeds of $4,095,000. The Company paid agents’ fees of $1,793,700 in cash and issued 1,379,768 agents’ warrants exercisable into common shares of the Company at $1.30 for 12 months from the date of issue in connection with the initial public offering.
Stock Options Exercised
Subsequent to June 30, 2020, 150,000 stock options were exercised at a weighted average price of $0.23 for gross proceeds of $35,000.
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New Found Gold Corp.
Notes to the Condensed Interim Financial Statements
For the six months ended June, 2020 and 2019
(Unaudited - Expressed in Canadian Dollars)
15. | SUBSEQUENT EVENTS (continued) |
Stock Options Granted
Subsequent to June 30, 2020, 5,040,000 stock options were granted at an exercise price of $1.40 and an expiry date of August 11, 2025.
Warrants Exercised
Subsequent to June 30, 2020, 16,000,000 warrants were exercised at a price of $0.75 for gross proceeds of $12,000,000.
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Exhibit 99.13
Suite 1430, 800 West Pender Street
Vancouver, British Columbia V6C 2V6
Phone: 604-562-9664
Management Information Circular
Dated this 13th day of August 2021
20210813 New Found Gold Corp.
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Who We Are
New Found Gold Corp. is a mineral exploration and development company that is focused on advancing its 100%-owned Queensway gold project, located 15km west of Gander, Newfoundland, Canada. The Company trades under the symbol “NFG” on the TSX Venture Exchange and “NFGFF” on the OTCQB.
Table of Contents
Who We Are | ii |
Notice of Annual General and Special Meeting of Shareholders | iii |
General Information | 5 |
Voting Information | 6 |
Business of the Meeting | 9 |
Corporate Governance Practices | 14 |
Compensation Discussion and Analysis | 18 |
Audit Committee | 30 |
Interest of Informed Persons in Material Transactions | 32 |
Interest of Certain Persons in Matters to be Acted Upon | 33 |
Other Matters | 33 |
Additional Information | 33 |
Schedule “A” – Board Mandate | 34 |
Schedule “B” – Stock Option Plan | 39 |
Schedule “C” – Audit Committee Mandate | 49 |
20210813 New Found Gold Corp.
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Notice of Annual General and Special Meeting of Shareholders
NOTICE IS HEREBY GIVEN that the annual general and special meeting (the “Meeting”) of the shareholders of New Found Gold Corp. (the “Company” or “New Found”) will be held at 9:00 a.m. (Pacific Time) on Friday, September 17, 2021 at Suite 2600, 595 Burrard Street, Vancouver, British Columbia.
The purpose of the Meeting will be to:
1. | receive and consider the audited annual consolidated financial statements of the Company for the fiscal period ended December 31, 2020, with the report of the auditors therein; |
2. | elect five directors and fix their terms of office; |
3. | appoint Crowe MacKay LLP as auditors of the Company for the ensuing year and authorize the directors to fix their remuneration; |
4. | consider and, if thought fit, pass an ordinary resolution to ratify, confirm, and approve the Company’s Stock Option Plan as described in the Information Circular; |
5. | consider, and if thought fit by disinterested shareholders, pass an ordinary resolution to approve a grant of 200,000 stock options to Douglas Hurst which occurred on May 17, 2021 at a time when the maximum number of shares issuable under the Stock Option Plan exceeded 10% of the number of shares issued and outstanding; and |
6. | transact any other business as may properly come before the Meeting or any adjournments thereof. |
You have the right to vote your shares if you were a New Found shareholder on August 13, 2021, the record date for the Meeting which was fixed by resolution of the Board of Directors of the Company.
Impact of COVID-19
The Company is carefully monitoring the public health recommendations and orders related to the COVID-19 pandemic and our first priority is the health and safety of our communities, shareholders, employees, and other stakeholders. To mitigate risk and to comply with all recommendations, orders, safety measures and protocols related to COVID-19, shareholders are encouraged to vote their proxy by mail, internet, or telephone and to listen to the live Meeting via conference call using the dial-in number below. Please see information in the Information Circular on how to vote. To be valid, your proxy must be received by Computershare, the Company’s transfer agent, no later than 9:00 a.m. (Pacific Time) on September 15, 2021, or not later than 48 hours before the time of any adjourned Meeting (excluding Saturdays, Sundays, and holidays). The Chair of the Meeting has the discretion to accept late proxies. The Company is providing the dial-in number to the Meeting so that shareholders or proxyholders can listen to the live Meeting. Shareholders listening to the live Meeting will only be entitled to vote by proxy and will only be counted in quorum if they send their proxies to the Company, as described above. The dial-in number for the live Meeting is an accommodation for shareholders and proxyholders who wish to hear the live Meeting without attending in person because of COVID-19.
If any shareholder does wish to attend the Meeting in person, please contact Penny Johnson at penny@pjaconsulting.ca in order for New Found to determine whether arrangements can be made that comply with all recommendations, regulations, and orders related to the COVID-19 pandemic in effect at the time of the Meeting. No shareholder who is experiencing any symptoms of COVID-19, including fever, cough, or difficulty breathing will be permitted to attend the Meeting in person.
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The Company may take additional precautionary measures in relation to the Meeting as necessary in response to further developments related to the COVID-19 pandemic and shall comply with all applicable health and safety recommendations, regulations, and orders related thereto. In the event it is not possible or advisable to hold the Meeting in person, the Company will announce alternative arrangements for the Meeting as promptly as practicable, which may include holding the Meeting entirely by electronic means.
Shareholders may use the following information to listen to the Meeting via conference call.
Dial-in Number: | +1 647-794-5613 |
Access Code: | 922 860 763# |
If you have any questions relating to the Meeting, please contact the Company by email at contact@newfoundgold.ca.
Dated at Vancouver, British Columbia this 13th day of August 2021.
BY ORDER OF THE BOARD OF DIRECTORS
“Craig A. Roberts”
Craig A. Roberts
Chief Executive Officer and Director
20210813 New Found Gold Corp.
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MANAGEMENT INFORMATION CIRCULAR |
MANAGEMENT INFORMATION CIRCULAR
General Information
Information contained in this Management Information Circular (the “Information Circular” or “Circular”) is as of August 13, 2021 (the “Record Date”) unless otherwise indicated. All dollar amounts referenced herein are in Canadian Dollars (“ CAD”), unless otherwise specified. The exchange rate as at December 31, 2020 was CAD$1.00 = US$0.7854.
This Information Circular has been approved by the board of directors of the Company (the “Board” or “Directors”).
The Company is carefully monitoring the public health recommendations and orders related to the COVID-19 pandemic and our first priority is the health and safety of our communities, shareholders, employees and other stakeholders. To mitigate risk and to comply with all recommendations, orders, safety measures and protocols related to COVID-19, shareholders are encouraged to vote their proxy by mail, internet, or telephone and to listen to the live Meeting via conference call using the dial-in number below. Please see information in the Information Circular on how to vote. To be valid, your proxy must be received by Computershare, the Company’s transfer agent, no later than 9:00 a.m. (Pacific Time) on September 15, 2021, or not later than 48 hours before the time of any adjourned Meeting (excluding Saturdays, Sundays, and holidays). The Chair of the Meeting has the discretion to accept late proxies. The Company is providing the dial-in number to the Meeting so that shareholders or proxyholders can listen to the live Meeting. Shareholders listening to the live Meeting will only be entitled to vote by proxy and will only be counted in quorum if they send their proxies to the Company, as described above. The dial-in number for the live Meeting is an accommodation for shareholders and proxyholders who wish to hear the live Meeting without attending in person because of COVID-19. Shareholders (registered and non-registered) are reminded that there are a number of voting methods available to them in advance of the meeting which are outlined in the "Voting Information" section of this Circular. All Meeting materials and voting instructions may also be found on the Company's SEDAR profile at www.sedar.com, and on the Company's website at https://newfoundgold.ca.
If any shareholder does wish to attend the Meeting in person, please contact Penny Johnson at penny@pjaconsulting.ca in order for New Found to determine whether arrangements can be made that comply with all recommendations, regulations, and orders related to the COVID-19 pandemic in effect at the time of the Meeting. No shareholder who is experiencing any symptoms of COVID-19, including fever, cough, or difficulty breathing will be permitted to attend the Meeting in person.
The Company may take additional precautionary measures in relation to the Meeting as necessary in response to further developments related to the COVID-19 pandemic and shall comply with all applicable health and safety recommendations, regulations, and orders related thereto. In the event it is not possible or advisable to hold the Meeting in person, the Company will announce alternative arrangements for the Meeting as promptly as practicable, which may include holding the Meeting entirely by electronic means.
Shareholders may use the following information to listen to the Meeting via conference call. Callers will be asked for their name upon dialing into the conference call and to identify whether they are a shareholder:
Dial-in Number: | +1 647-794-5613 |
Access Code: | 922 860 763# |
20210813 |
New Found Gold Corp.
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MANAGEMENT INFORMATION CIRCULAR
Voting Information
The Company is authorized to issue an unlimited number of common shares without par value. On the Record Date of August 13, 2021, 153,652,528 common shares were issued and outstanding, each share carrying the right to one vote. On any poll, the persons named in the form of proxy will vote the shares in respect of which they are appointed. Where instructions are given by the shareholder in respect of voting for or against any resolution, the proxy holders will do so in accordance with such instructions.
Only shareholders of record on the close of business on the Record Date, who complete and deliver a form of proxy in the manner and subject to the provisions set out under the headings Record Date and Appointment and Revocation of Proxies will be entitled to have their shares voted at the Meeting or any adjournment thereof. Telephone voting can be completed at 1-866-732-VOTE (1-866-732-8683) and internet voting can be completed at www.investorvote.com.
To the knowledge of the Directors and senior officers of the Company there are no persons or companies beneficially owning, or controlling or directing, directly or indirectly, shares carrying 10% or more of the voting rights attached to all outstanding shares of the Company except as follows:
Percentage of | ||||||||
Outstanding | ||||||||
Name and Address | Number of Shares | Common Shares(1) | ||||||
Palisades Goldcorp Ltd.(2) | 46,566,425 | 30.3 | % | |||||
Eric Sprott(3) | 30,241,200 | 19.7 | % |
(1) | Based on 153,652,528 outstanding Common Shares as of August 13, 2021. |
(2) | The principal securityholder of Palisades Goldcorp Ltd. is Collin Kettell. |
(3) | Mr. Sprott directly holds 1,900,000 of his securities in the Company and 28,341,200 of his securities through 2176423 Ontario Inc., a wholly-owned corporation. |
New Found urges shareholders to review this Information Circular prior to voting.
Solicitation of Proxies
This Information Circular is furnished in connection with the solicitation of proxies by the management of the Company for use at the Meeting (and at any adjournment thereof) to be held on Friday, September 17, 2021 at the time and place and for the purposes set forth in the accompanying Notice of Meeting.
The Company will bear the expense of this solicitation. It is expected that the solicitation will be made by mail, but regular employees or representatives of the Company (none of whom shall receive any extra compensation for these activities) may also solicit by telephone, facsimile, and in person and arrange for intermediaries to send this Information Circular and the form of proxy to their principals at the expense of the Company.
Record Date
The Company has set the close of business on August 13, 2021 as the Record Date for determining which shareholders shall be entitled to receive notice of the Meeting and to vote at the Meeting. Only shareholders of record as of the Record Date shall be entitled to receive notice of the Meeting and to vote at the Meeting.
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MANAGEMENT INFORMATION CIRCULAR
Appointment and Revocation of Proxies
The persons named in the form of proxy are designated as proxy holders by management of the Company. A shareholder wishing to appoint some other person (who need not be a shareholder) to represent him or her at the meeting may do so either by inserting such person’s name in the blank space provided in the form of proxy or by completing another proper form of proxy and, in either case, delivering the completed form of proxy to Computershare Investor Services Inc., 8th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1, not less than 48 hours (excluding Saturdays, Sundays, and holidays) prior to the time of the Meeting unless the person who is the chair of the Meeting (the “Chair”) elects to exercise his or her discretion to accept proxies received subsequently. Telephone voting can be completed at 1-866-732-VOTE (1-866-732-8683) and internet voting can be completed at www.investorvote.com.
Provisions Relating to Voting of Proxies
The shares represented by proxy will be voted or withheld from voting by the designated proxy holder in accordance with the instructions of the shareholder appointing him or her on any ballot that may be called for and, if the shareholder specifies a choice with respect to any matter to be acted upon, the shares will be voted accordingly. If there are no instructions provided by the shareholder, those shares will be voted in favour of all proposals set out in this Circular. The form of proxy gives the person named in it the discretion to vote as they see fit on any amendments or variations to matters identified in the Notice of Meeting, or any other matters which may properly come before the Meeting. At the time of printing of this Circular, the management of the Company knows of no other matters which may come before the Meeting other than those referred to in the Notice of Meeting.
Revocation of Proxies
Any registered shareholder who has returned a form of proxy may revoke it at any time before it has been exercised. In addition to revocation in any other manner permitted by law, a proxy may be revoked by instrument in writing, including a proxy bearing a later date, executed by the registered shareholder or by an attorney authorized in writing or, if the registered shareholder is a corporation, under its corporate seal or by an officer or attorney thereof duly authorized.
The instrument revoking the proxy must be deposited at (i) the registered office of the Company, Suite 2600, 595 Burrard Street, Vancouver, British Columbia V7X 1L3, at any time up to and including the last business day preceding the date of the Meeting or any adjournment thereof duly authorized; or (ii) provided at the Meeting to the Chair of the Meeting. Only registered shareholders have the right to revoke a proxy. Non-registered shareholders who wish to change their vote must, at least seven (7) days before the Meeting, arrange for their respective intermediaries to revoke the proxy on their behalf.
Advice to Beneficial Shareholders of Common Shares
A substantial number of shareholders do not hold common shares in their own names (“Beneficial Shareholders”). You are a Beneficial shareholder if the shares you own are registered in the name of an intermediary such as a bank, a trust company, a securities broker, a trustee, or other nominee and not in your name. Only proxies deposited by shareholders whose names appear on the records of the Company as the registered holders of common shares can be recognized and acted upon at the Meeting. In Canada, the vast majority of such common shares are registered in the name of the shareholder’s broker or an agent of that broker like CDS & Co. (the registration name for The Canadian Depository for Securities Limited, which acts as nominee for many Canadian brokerage firms). Common shares held by brokers or their agents or nominees can only be voted upon the instructions of the Beneficial Shareholders. Therefore, Beneficial Shareholders should ensure that instructions respecting the voting of their common shares are communicated to the appropriate person well in advance of the Meeting.
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MANAGEMENT INFORMATION CIRCULAR
There are two kinds of Beneficial Shareholders, (i) those who object to their names being made known to the Company, referred to as objecting beneficial owners (“OBOs”), and (ii) those who do not object to the Company knowing who they are, referred to as non-objecting beneficial owners (“NOBOs”). The Company has distributed copies of the Notice of Meeting and the form of proxy to the clearing agencies and intermediaries for distribution to OBOs and NOBOs.
Applicable regulatory policies require intermediaries/brokers to seek voting instructions from Beneficial Shareholders in advance of shareholders’ meetings. Every intermediary/broker has its own mailing procedures and provides its own return instructions to clients, which should be carefully followed by Beneficial Shareholders to ensure that their common shares are voted at the Meeting.
Although a Beneficial Shareholder may not be recognized directly at the Meeting for the purposes of voting common shares registered in the name of the Beneficial Shareholder’s broker (or agent of the broker), a Beneficial Shareholder may attend the Meeting as proxy holder for the registered shareholder and vote the common shares in that capacity. Beneficial Shareholders who wish to attend the Meeting and indirectly vote their common shares as proxy holder for the registered shareholder should enter their own names in the blank space on the form of proxy provided to them and return the same to their broker (or the broker’s agent) in accordance with the instructions provided by such broker (or agent), well in advance of the Meeting. Alternatively, a Beneficial Shareholder may request in writing that their broker send to the Beneficial Shareholder a legal proxy which would enable the Beneficial Shareholder to attend at the Meeting and vote their common shares.
If the Company or its agent has sent these materials directly to you, your name, address and information about your holding of securities has been obtained in accordance with applicable securities regulatory requirements from the nominee holding on your behalf. By choosing to send the Notice of Meeting, and if applicable, the Meeting Materials to you directly, the Company (and not the nominee holding on your behalf) has assumed responsibility for delivering materials to you and executing your proper voting instructions. Please return your voting instructions as specified in the request for voting instructions. The Company intends to pay for intermediaries to forward the proxy-related materials and the request for voting instructions made by intermediary to OBOs.
Voting of Shares and Exercise of Discretion of Proxies
On any poll, the persons named in the form of proxy provided to registered shareholders will vote the shares in respect of which they are appointed and, where instructions are given by the shareholder in respect of voting for or against any resolutions will do so in accordance with such instructions.
In the absence of any direction in the proxy, it is intended that such shares will be voted in favour of the motions proposed to be made at the Meeting as stated under the headings in this Information Circular. The form of proxy, when properly signed, confers discretionary authority with respect to amendments or variations to any matters which may properly be brought before the Meeting. At the date of this Information Circular, management of the Company is not aware that any such amendments, variations or other matters are to be presented for action at the Meeting. However, if any other matters, which are not now known to management, should properly come before the Meeting, the proxies hereby solicited will be exercised on such matters in accordance with the best judgment of the proxy holders.
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MANAGEMENT INFORMATION CIRCULAR
Business of the Meeting
1. Financial Statements
The audited annual consolidated financial statements of the Company for the year ended December 31, 2020 and the report of the auditors thereon will be placed before the shareholders at the Meeting.
The audited annual consolidated financial statements and management’s discussion and analysis of the Company for the year ended December 31, 2020 are available upon request from the Company or they can be found on SEDAR at www.sedar.com or on the Company’s website at www.newfoundgold.ca.
2. Election of Directors
The Board has set the number of directors at five. All of the five nominated Directors have confirmed their willingness to serve on New Found’s Board. The term of office of each of the present Directors expires at the Meeting. The nominees proposed for election as directors were recommended to the Board by the Nominating and Corporate Governance Committee of the Board (“NCG Committee”).
Shareholders can vote for all of the proposed nominees, vote for some of the proposed nominees and withhold for others, or withhold for all of the proposed nominees. Unless otherwise instructed, the persons named in the form of proxy intend to vote for the election of each of these nominees. Management does not contemplate that any of these nominees will be unable to serve as a director. Each director elected will hold office until the next annual general meeting of the Company or until his successor is elected or appointed, unless his office is earlier vacated in accordance with the articles of incorporation of the Company or with the provisions of the British Columbia Business Corporations Act.
Director nominees are:
Douglas John Hurst | Collin Kettell |
Craig A. Roberts | Denis Laviolette |
Quinton Hennigh |
Each of the nominees is well qualified and demonstrates the competencies, character, and commitment that is complementary to New Found’s needs and culture and has expressed his willingness to serve on the Board. Further information on each of the nominees can be found under the heading Director Profiles starting on page 7.
The Board recommends that the shareholders vote FOR each of the above nominees proposed for election as directors, as disclosed in this Circular. Unless instructed in the form of proxy to the contrary, the persons named in the form of proxy intend to vote FOR each of the nominees proposed for election as directors, as disclosed in this Circular.
3. Appointment of Auditors
Crowe MacKay LLP has been New Found’s independent auditor since October 2020. Upon the recommendation of the Audit Committee, shareholders will be asked to approve the re-appointment of Crowe MacKay LLP as auditor and also to authorize the Board to set the auditor’s remuneration. Crowe MacKay LLP conducts the annual audit of New Found’s financial statements and provides audit-related, tax, and other services, and reports to the Audit Committee of the Board.
The Board recommends that shareholders vote FOR the appointment of Crowe MacKay LLP as auditors for the Company at a remuneration to be fixed by the Directors, as disclosed in this Circular. Unless instructed in the form of proxy to the contrary, the persons named in the form of proxy intend to vote FOR the appointment of Crowe MacKay LLP as auditors for the Company at a remuneration to be fixed by the Directors, as disclosed in this Circular.
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4. Ratification, Confirmation, and Approval of the Stock Option Plan
The Company’s stock option plan (the “Stock Option Plan”) is a key component of the Company’s compensation program and is used to attract, motivate, and retain high calibre employees. Please see the description of the Stock Option Plan under the headings Equity Compensation Plan Information in this Information Circular for a more detailed description of the Stock Option Plan.
Resolution to Ratify, Confirm, and Approve the Stock Option Plan
At the Meeting, shareholders will be asked to consider and, if thought fit, pass an ordinary resolution to ratify, confirm and approve the Stock Option Plan, as disclosed in this Circular, substantially in the following form:
"WHEREAS:
A. | the Company has a Stock Option Plan for Directors, Employees, and Consultants which reserves for the grant of options under the Stock Option Plan up to a maximum of 10% of the issued shares of the Company from time to time; |
B. | the shareholders of the Company last approved the Stock Option Plan, by a majority of votes cast, at the Company’s Annual General Meeting held on June 17, 2020; and |
C. | rules of the TSX Venture Exchange provide that the Company’s Stock Option Plan must be approved by the shareholders of the Company annually. |
BE IT RESOLVED THAT the continuation of the Stock Option Plan as disclosed in this Circular, be and is hereby ratified, confirmed, and approved."
If continuation of the Stock Option Plan is not approved at the Meeting, the Company will not be permitted to grant further options until shareholder approval is obtained. However, all options previously granted and unexercised will continue unaffected.
The Board recommends that shareholders vote FOR the resolution to ratify, confirm, and approve the continuation of the Stock Option Plan. Unless instructed in the form of proxy to the contrary, the persons named in the form of proxy intend to vote FOR the approval of the resolution to ratify, confirm, and approve the continuation of the Stock Option Plan.
5. Consideration of Stock Option Grant
On May 17, 2021 the Company granted stock options to Douglas Hurst, a Director of the Company, at a time when the maximum number of shares issuable under the Stock Option Plan exceeded 10% of the number of shares issued and outstanding. Upon the recommendation of the Compensation Committee, disinterested shareholders will be asked to pass an ordinary resolution to approve a grant of 200,000 stock options to Douglas Hurst which occurred on May 17, 2021.
Grant Resolution
Pursuant to the rules of the TSX Venture Exchange, the approval of the grant of 200,000 stock options to Douglas Hurst, as described above, requires disinterested shareholder approval. Disinterested shareholder approval is the approval by a majority of the votes cast on the ordinary resolution by all shareholders at the Meeting, excluding the votes attached to Common Shares beneficially owned by insiders (as defined under the rules of the TSX Venture Exchange) of the Company and their associates (as defined under the rules of the TSX Venture Exchange) who hold grants subject to the Stock Option Plan.
Based on the present shareholdings of the insiders and their associates, we anticipate that a total of up to 93,023 Common Shares will be excluded from voting on the Grant Resolution (as defined below), representing approximately 0.061% of the issued and outstanding Common Shares as of August 13, 2021. Accordingly, at the Meeting, the Company’s disinterested shareholders will be asked to consider, and if thought fit, to pass with or without amendment, an ordinary resolution as follows (the “Grant Resolution”):
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MANAGEMENT INFORMATION CIRCULAR
"BE IT RESOLVED AS AN ORDINARY RESOLUTION, with votes of insiders and their associates excluded therefrom, THAT:
A. | The grant of 200,000 stock options of New Found Gold Corp. (the “Company”) to Douglas Hurst which occurred on May 17, 2021, exercisable for an aggregate of up to 200,000 Common Shares of the Company, with price for options at $8.62 and with expiry date fuve years from the date of grant, as described in this Information Circular, be and is hereby ratified, confirmed and approved; and |
B. | Any one director or officer of the Company is authorized and directed on behalf of the Company, to take all necessary steps and proceedings and to execute, deliver and file any and all declarations, agreements, documents and other instruments, and do all such other acts and things that may be necessary or desirable to give effect to the foregoing resolutions” |
If the Grant Resolution is not approved by disinterested shareholders at the Meeting, the grants of 200,000 stock options to Douglas Hurst will automatically be cancelled on the one-year anniversary of their grant date, unless approved by shareholders prior to such time.
The Board recommends that disinterested shareholders vote FOR the resolution to approve a grant of 200,000 stock options to Douglas Hurst which occurred on May 17, 2021. Unless instructed in the form of proxy to the contrary, the persons named in the form of proxy intend to vote FOR the approval of the resolution to approve a grant of 200,000 stock options to Douglas Hurst which occurred on May 17, 2021.
6. Other Business
At the date of this Information Circular, management of the Company is not aware of any other matters to be presented for action at the Meeting. However, if any other matters which are not now known to management should properly come before the Meeting, the proxies hereby solicited will be exercised on such matters in accordance with the best judgment of the proxy holders.
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MANAGEMENT INFORMATION CIRCULAR
Director Profiles
The following profiles provide information about the nominees including their background, occupation, meeting attendance, and other public company boards on which they serve. All information is as of August 13, 2021, unless otherwise indicated, and has been furnished by the respective nominees and from information available on SEDI at www.sedi.com.
(1) Quinton Hennigh was appointed Director June 23, 2021 and attended 100% of the Board Meetings after that date.
(1) No Board meetings were held in 2021 after Douglas Hurst was appointed as Director.
COLLIN KETTELL
Puerto Rico, United States Executive Director since January 2016 Other Public Company Directorships: |
Executive Chairman (since March 2020), and former CEO (2016-2020) of New Found Gold; CEO of Nevada King Gold Corp. (formerly Victory Metals Ltd.), since January 2019; Executive Chairman, Palisades Goldcorp Ltd., since August 2019; former CEO, Palisade Global Investments Ltd. | ||
Nevada King Gold | Meetings Attended in 2020 | ||
New Found Common Shares held: | Board | 6 of 6 | 100% |
5,155,000 | Committee Meetings Attended | ||
Compensation Committee | 1 of 1 | 100% |
DENIS LAVIOLETTE
Ontario, Canada Independent Director since January 2016 Other Public Company Directorships: |
Director, New Found, since May 2021; Chairman, Northern Vertex Mining Corp. since February 2021; Director, Calibre Mining Corp., since 2017; Director, Newcore Gold Ltd., since 2017; former Director, Northern Empire Resources Corp., 2015-2018; former Director, Kirkland Lake Gold Ltd., | ||
Goldspot Discoveries Corp., Xtra-Gold Resources Corp. | Meetings Attended in 2020 | ||
New Found Common Shares held: | Board | 6 of 6 | 100% |
2,625,000 | Committee Meetings Attended | ||
Compensation Committee | 1 of 1 | 100% |
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CRAIG A. ROBERTS
British Columbia, Canada Executive Director since December 2019 Other Public Company Directorships: |
CEO and Director, New Found Gold, since March 2020 and December 2019, respectively; Chairman and Director (formerly CEO), Ethos Gold Corp., since 2018; Director, Nevada King Gold Corp. (formerly Victory Metals Ltd.); Director, K2 Gold Corporation, since 2016; Director, Global Battery Metals Ltd., since 2016. | ||
Ethos Gold Corp., Global Battery Metals, | Meetings Attended in 2020 | ||
Nevada King Gold, and K2 Gold | Board | 6 of 6 | 100% |
New Found Common Shares held: | Committee Meetings Attended | ||
2,200,000 | Compensation Committee | 1 of 1 | 100% |
To the knowledge of the Company, none of the Company’s directors or executive officers is, as of the date of this Circular, or was within 10 years before the date of this Circular, a director, chief executive officer or chief financial officer of any company (including the Company) that (a) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant issuer access to any exemption under securities legislation, that was in effect for a period or more than 30 consecutive days (an “Order”) that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer of such issuer, or (b) was subject to an Order that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.
None of the Company’s directors or executive officers, nor, to its knowledge, any shareholder holding a sufficient number of its securities to affect materially the control of the Company (a) is, as at the date of this Circular, or has been within the 10 years before the date of this Circular, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, or (b) has, within the 10 years before the date of this Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of such director, executive officer or shareholder.
None of the Company’s directors or executive officers, nor, to its knowledge, any shareholder holding a sufficient number of its securities to affect materially the control of the Company, has been subject to (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.
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Committees of the Board of Directors
As at the date of this Information Circular, there are three committees of the Board (the “Committees”) set out below.
The following table sets out the members of such Committees as at the date of this Information Circular. After the Meeting, the Board shall reconstitute the composition of the Committees.
Corporate Governance Practices
In consultation with the Board, the NCG Committee establishes and reviews with the Board the appropriate skills and characteristics required of members of the Board, taking into consideration the Board’s short -term needs and long-term succession plans. In addition, the NCG Committee develops, and annually updates, a long-term plan for the Board’s composition, taking into consideration the characteristics of independence, age, skills, experience and availability of service to the Company of its members, as well as opportunities, risks, and strategic direction of the Company. The Company’s corporate governance policies and mandates may be viewed on the Company’s website at: https://newfoundgold.ca.
Board of Directors
Independence
On an annual basis, the NCG Committee assists the Board in assessing each Director’s independence and reviews the relationship each Director has with the Company to determine whether their independence is maintained. When a Director has no direct or indirect material relationship with the Company which could interfere with the Director’s independent judgment, that Director is considered independent. The Board has determined that a majority of the Directors nominated are independent.
Meetings of Independent Directors
The Canadian Securities Administrator’s corporate governance guidance suggests that independent Directors hold regularly scheduled meetings at which non-independent Directors and members of Management are not in attendance. The Directors endeavour to meet in camera without members of management and executive directors at the end of each Board or Committee meeting.
The Audit Committee consists of two independent Directors and meets quarterly. A Compensation Committee, and a NCG Committee, consisting of at least one independent Director, were established in 2020.
Generally, as a matter of practice, directors who have disclosed a material interest in any contract or transaction that the Board is considering will not take part in any Board discussion respecting that contract or transaction. If on occasion such directors do participate in the discussions, they will refrain from voting on any matters relating to matters in which they have disclosed a material interest. In appropriate cases, the Company will establish a special committee of independent directors to review a matter in which directors or officers may have a conflict.
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Role of Chair and Lead Director
The Chair, with the assistance of the Lead Director (if one is appointed from time to time), is responsible for the management, development, and effective performance of the Board and leads the Board to ensure that it fulfills its duties to be effective in setting and implementing direction and strategy, and to work closely with the CEO to ensure the strategy agreed by the Board is put into effect.
Board Mandate
The full text of the Board Mandate is attached as Schedule “A”.
Position Descriptions
The Board has adopted written position descriptions for its Chair, the Lead Director (if applicable), and the Chair of each of the Committees. The position descriptions are in line with each of the Committee mandates, which are also reviewed and updated from time to time by its members. The Compensation Committee and the CEO have developed a position description for the CEO which has been approved by the Board. The Compensation Committee annually reviews and monitors the achievement of corporate objectives that the CEO is responsible to meet.
Orientation and Continuing Education
Each new director participates in the Company’s initial orientation program and each director participates in the Company’s continuing director development programs.
Ethical Business Conduct
A Code of Business Conduct and Ethics (“Code”) has been adopted by the Board of Directors to summarize the standards of business conduct that guides the Company’s actions. This Code applies to all directors, officers, employees, and consultants of the Company and its subsidiaries. The Company has issued this Code to deter wrongdoing and to promote:
· | honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; |
· | avoidance of conflicts of interest with the interests of the Company, including disclosure to an appropriate person of any material transaction or relationship that reasonably could be expected to give rise to such a conflict; |
· | confidentiality of corporate information; |
· | protection and proper use of corporate assets and opportunities; |
· | compliance with applicable governmental laws, rules and regulations; |
· | the prompt internal reporting of any violations of this Code to an appropriate person or person identified in the Code; and |
· | accountability for adherence to the Code. |
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Board Assessment and Renewal, and Nomination of Directors
The Board undertakes a robust annual assessment process that includes:
· | Director reviews conducted through one-on-one conversations between the Chair of the Board and the Chair of the NCG Committee; |
· | an informal discussion by the Chair with Directors on a selective basis, as required, to fully understand any concerns raised or recommendations advanced by such Director, and the preparation by the Chair of the NCG Committee of a report to, and discussion among, the full Board which includes matters concerning the size of the Board and each Committee of the Board, and whether changes in size, personnel, or responsibilities are warranted; |
· | a review and discussion of various emerging corporate governance issues and best practices, including those related to Board composition, Director term limits, “overboarding”, and diversity (Board and executive officers); and |
· | the Board and each Committee of the Board complete an annual review and assessment of its respective mandate or charter to determine if changes are warranted. |
The Company does not currently have any term limits, retirement policies, or similar mechanisms in place for the renewal or replacement of its Directors.
In considering and identifying new Directors for nomination, the NCG Committee will hold a series of meetings to identify the particular skills and qualifications needed of new recruits, having regard to the Company's business and objectives, as well as the then-existing composition of the Board. Once a list of key attributes, skills, and competencies for a potential new Director is identified, the NCG Committee then creates a list of possible candidates for consideration and evaluation, which are then presented to the full Board for further discussion and evaluation. If, and as needed, the NCG Committee may engage internal or external consultants to assist in identifying, evaluating, and/or selecting appropriate Board candidates, including to ensure a diversity of potential candidates are identified. Only after rigorous discussion by the NCG Committee and the Board is a short-list of potential Board candidates created, following which the Board works together with the NCG Committee to develop the best plan to recruit the preferred candidate(s).
In addition, the Board satisfies itself that the Board, its committees, and the individual directors are performing effectively by conducting informal assessments from time to time (including by the Chair of the Board and/or the NCG Committee).
Board Leadership and Diversity
The Company is committed to workplace diversity and fostering a culture of inclusion across all aspects of the Company, its operations, and offices. The Board’s objective is to select the most qualified and highest functioning Directors from diverse backgrounds. Board nominees will be chosen based on the abilities, skills, and experience required from time to time, while recognizing that a more diverse Board can result in a more effective Board. The NCG Committee will consider candidates on merit against objective criteria and with due regard for the benefits of diversity in the Board’s composition.
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The Company understands the benefits of a diversified work force, including promoting the level of female representation and other types of diversity, and diversity is one of many factors that are used in consideration for hires and promotions. In identifying and considering potential candidates for executive appointments, the Board also considers factors such as years of service, regional background, merit, experience, and qualification. In addition, the relative diversity of the Company's executive team is also driven by other factors, many of which are outside of the control of the Company, including the level of staff turnover, the candidates that are available with the necessary skills and experiences required to satisfy the Company’s needs, and requirements for the position when hiring and promotion opportunities arise, and various other factors. The Board does not set specific gender representation targets when identifying potential candidates to executive officer positions, but does consider diversity, and where possible, seeks to ensure a representative list of women is included among the group of prospective candidates for executive positions.
As at August 13, 2021, none of our Directors or executive officers are women.
Compensation Assessments
The Board determines Director and senior officer compensation by the recommendation of the Compensation Committee. With consultation from the CEO, the Committee is responsible for:
· | reviewing and approving corporate goals and objectives relevant to the compensation of the CEO and other executive officers, evaluating the performance of the CEO and the other executive officers in light of those goals and objectives and approving their annual compensation levels, including salaries, bonuses, and stock option grants based on such evaluation; and |
· | reviewing the compensation of directors for service on the Board and its committees and recommending to the Board the annual Board member compensation package, including retainer, committee member and chair retainers, Board and committee meeting attendance fees and any other form of compensation, such as stock option grants or stock awards. |
While the Board is ultimately responsible for determining all forms of compensation to be awarded to the CEO, other executive officers and directors, the Compensation Committee will when appropriate review the Company’s compensation philosophy, policies, plans and guidelines and recommend any changes to the Board.
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Compensation Discussion and Analysis
The following information of the Company is provided in accordance with Form 51-102F6V – Statement of Executive Compensation – Venture Issuers (“Form 51-102F6V”). Information contained in this Statement of Executive Compensation is as of December 31, 2020, unless otherwise indicated and all dollar amounts referenced herein are in Canadian Dollars, unless otherwise specified.
Director and NEO Compensation
The named executive officers (NEOs) of the Company for the financial year ended December 31, 2020 were Collin Kettell, Executive Chairman; Craig A. Roberts, Chief Executive Officer; Denis Laviolette, President; Michael Kanevsky, Chief Financial Officer; Greg Matheson, Chief Operating Officer; John Anderson, Director; and Quinton Hennigh, Director.
Particulars of compensation, excluding compensation securities, for each NEO and Director in the two most recently completed financial years is set out in the table below:
TABLE OF COMPENSATION EXCLUDING COMPENSATION SECURITIES | ||||||||||||||||||||||||
Salary, | ||||||||||||||||||||||||
consulting | ||||||||||||||||||||||||
fee, retainer | Committee | Value of all | ||||||||||||||||||||||
or
commission |
Bonus |
or meeting
fees |
Value of
perquisites |
other
compensation |
Total
compensation |
|||||||||||||||||||
Name and position | Year | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||
Collin Kettell(1) | 2020 | 269,070 | 75,000 | Nil | Nil | Nil | 344,070 | |||||||||||||||||
Executive Chairman and
Director |
2019
|
9,967 | 152,432 | N/A | N/A | Nil | 162,399 | |||||||||||||||||
Craig A. Roberts(2) | 2020 | 250,000 | 325,000 | Nil | Nil | Nil | 575,000 | |||||||||||||||||
CEO and Director | 2019 | N/A | N/A | N/A | N/A | Nil | N/A | |||||||||||||||||
Denis Laviolette(3) | 2020 | 195,000 | 75,000 | Nil | Nil | Nil | 270,000 | |||||||||||||||||
President and Director | 2019 | 290,000 | N/A | N/A | N/A | Nil | 290,000 | |||||||||||||||||
Michael Kanevsky(4) | 2020 | 72,900 | Nil | Nil | Nil | Nil | 72,900 | |||||||||||||||||
CFO | 2019 | 94,500 | N/A | N/A | N/A | Nil | 94,500 | |||||||||||||||||
Greg Matheson(5) | 2020 | 157,083 | 33,000 | Nil | Nil | Nil | 190,083 | |||||||||||||||||
COO | 2019 | 130,000 | N/A | N/A | N/A | Nil | 130,000 | |||||||||||||||||
John Anderson(6) | 2020 | 10,000 | Nil | Nil | Nil | Nil | 10,000 | |||||||||||||||||
Director | 2019 | N/A | N/A | N/A | N/A | Nil | N/A | |||||||||||||||||
Quinton Hennigh(7) | 2020 | 10,000 | Nil | Nil | Nil | Nil | 10,000 | |||||||||||||||||
Director | 2019 | N/A | N/A | N/A | N/A | Nil | N/A |
(1) | Collin Kettell was appointed as Director and Executive Chairman on January 21, 2016. |
(2) | Craig A. Roberts was appointed as Director on December 17, 2019 and was appointed CEO on March 6, 2020 and received no compensation for his role as Director. |
(3) | Denis Laviolette was appointed as Director and President on January 21, 2016. |
(4) | Michael Kanevsky was appointed as CFO on February 1, 2019. |
(5) | Greg Matheson was appointed as COO on April 1, 2019. |
(6) | John Anderson was appointed as Director on April 20, 2018 and ceased to be a Director on May 10, 2021. |
(7) | Quinton Hennigh was appointed as Director on June 23, 2020. |
For 2020, annual compensation for Directors who are not NEOs was a $24,000 cash retainer.
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Stock Options and Other Compensation Securities
Compensation securities granted or issued to each NEO and Director in 2020 for services provided or to be provided, directly or indirectly, to the Company or any of its subsidiaries is set out in the table below:
COMPENSATION SECURITIES | |||||||||||||||
Number of | Closing | ||||||||||||||
compensation | price of | Closing | |||||||||||||
securities, | security or | price of | |||||||||||||
number of | underlying | security or | |||||||||||||
underlying | security on | underlying | |||||||||||||
Type of | securities, and | Date of | Exercise | date of | security at | ||||||||||
Name and
Position |
compensation
security(1) |
percentage of
class |
issue or
grant |
price
($) |
grant
($)(2) |
year end
($) |
Expiry
date |
||||||||
Collin Kettell(4) Executive Chairman and Director
|
Stock option | 100,000 (0.71%) | 2020-04-15 | 1.00 | N/A | 4.07 | 2025-04-15 | ||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
100,000, 0.07%) | |||||||||||||||
Stock option | 1,395,000 (9.84) | 2020-05-23 | 1.075 | N/A | 4.07 | 2025-05-23 | |||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
1,395,000, 0.94%) | |||||||||||||||
Stock option | 1,735,000 | 2020-08-11 | 1.40 | 1.40 | 4.07 | 2025-08-11 | |||||||||
(12.23%) | |||||||||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
1,735,000, 1.17%) | |||||||||||||||
Stock option | 4,280,000 | 2020-12-31 | 4.10 | 4.07 | 4.07 | 2025-12-31 | |||||||||
(30.18%) | |||||||||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
4,280,000, 2.88%) | |||||||||||||||
Stock option | 1,800,000 | 2020-04-15 | 1.00 | N/A | 4.07 | 2025-04-15 | |||||||||
(12.69%) | |||||||||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
1,800,000, 1.21%) | |||||||||||||||
Stock option | 125,000 (0.88%) | 2020-05-23 | 1.075 | N/A | 4.07 | 2025-05-23 | |||||||||
(underlying | |||||||||||||||
Craig A. Roberts(5) CEO and Director
|
common shares: | ||||||||||||||
125,000, 0.08%) | |||||||||||||||
Stock option | 1,250,000 | 2020-08-11 | 1.40 | 1.40 | 4.07 | 2025-08-11 | |||||||||
(8.81%) | |||||||||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
1,250,000, 0.84%) | |||||||||||||||
Stock option | 700,000 (4.94%) | 2020-12-31 | 4.10 | 4.07 | 4.07 | 2025-12-31 | |||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
700,000, 0.47%) |
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COMPENSATION SECURITIES | |||||||||||||||
Number of | Closing | ||||||||||||||
compensation | price of | Closing | |||||||||||||
securities, | security or | price of | |||||||||||||
number of | underlying | security or | |||||||||||||
underlying | security on | underlying | |||||||||||||
Type of | securities, and | Date of | Exercise | date of | security at | ||||||||||
Name and | compensation | percentage of | issue or | price | grant | year end | Expiry | ||||||||
Position | security(1) | class | grant | ($) | ($)(2) | ($) | date | ||||||||
Stock option | 100,000 (0.71%) | 2020-04-15 | 1.00 | N/A | 4.07 | 2025-04-15 | |||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
100,000, 0.07%) | |||||||||||||||
Stock option | 50,000 (0.35%) | 2020-05-23 | 1.075 | N/A | 4.07 | 2025-05-23 | |||||||||
(underlying | |||||||||||||||
Denis | common shares: | ||||||||||||||
Laviolette(6) | 50,000, 0.03%) | ||||||||||||||
President and | Stock option | 1,000,000 | 2020-08-11 | 1.40 | 1.40 | 4.07 | 2025-08-11 | ||||||||
Director | (7.05%) | ||||||||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
Stock option | 1,000,000, 0.67%) | 2020-12-31 | 4.10 | 4.07 | 4.07 | 2025-12-31 | |||||||||
50,000 (0.35%) | |||||||||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
50,000, 0.03%) | |||||||||||||||
Stock option | 25,000 (0.18%) | 2020-05-23 | 1.075 | N/A | 4.07 | 2025-05-23 | |||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
25,000, 0.02%) | |||||||||||||||
Greg Matheson(7) COO
|
Stock option | 125,000 (0.88%) | 2020-08-11 | 1.40 | 1.40 | 4.07 | 2025-08-11 | ||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
125,000, 0.08%) | |||||||||||||||
Stock option | 50,000 (0.35%) | 2020-12-31 | 4.10 | 4.07 | 4.07 | 2025-12-31 | |||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
50,000, 0.03%) | |||||||||||||||
Stock option | 50,000 (0.35%) | 2020-04-15 | 1.00 | N/A | 4.07 | 2025-04-15 | |||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
50,000, 0.03%) | |||||||||||||||
John Anderson(3)(8) Director
|
Stock option | 25,000 (0.18%) | 2020-05-23 | 1.075 | N/A | 4.07 | 2025-05-23 | ||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
25,000, 0.02%) | |||||||||||||||
Stock option | 50,000 (0.35%) | 2020-08-11 | 1.40 | 1.40 | 4.07 | 2025-08-11 | |||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
50,000, 0.03%) | |||||||||||||||
Stock option | 50,000 (0.35%) | 2020-12-31 | 4.10 | 4.07 | 4.07 | 2025-12-31 | |||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
50,000, 0.03%) |
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COMPENSATION SECURITIES | |||||||||||||||
Number of | Closing | ||||||||||||||
compensation | price of | Closing | |||||||||||||
securities, | security or | price of | |||||||||||||
number of | underlying | security or | |||||||||||||
underlying | security on | underlying | |||||||||||||
Type of | securities, and | Date of | Exercise | date of | security at | ||||||||||
Name
and
Position |
compensation
security(1) |
percentage
of
class |
issue
or
grant |
price
($) |
grant
($)(2) |
year
end
($) |
Expiry
date |
||||||||
Quinton Hennigh(9) Director
|
Stock option | 200,000 (1.41%) | 2020-08-11 | 1.40 | 1.40 | 4.07 | 2025-08-11 | ||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
200,000, 0.13%) | |||||||||||||||
Stock option | 150,000 (1.06%) | 2020-12-31 | 4.10 | 4.07 | 4.07 | 2025-12-31 | |||||||||
(underlying | |||||||||||||||
common shares: | |||||||||||||||
150,000, 0.10%) |
(1) | Stock options vest 100% upon date of grant and may be exercised according to the Stock Option Plan. No compensation securities were repriced, cancelled, replaced, or otherwise materially modified in the most recently completed financial year. |
(2) | The Company began trading on the TSX Venture Exchange on August 11, 2020. |
(3) | John Anderson ceased to be a director on May 10, 2021. |
(4) | Collin Kettell held 5,530,000 compensation securities as of December 31, 2020. |
(5) | Craig Roberts held 3,975,000 compensation securities as of December 31, 2020. |
(6) | Denis Laviolette held 3,011,000 compensation securities as of December 31, 2020. |
(7) | Greg Matheson held 635,000 compensation securities as of December 31, 2020. |
(8) | John Anderson held 625,000 compensation securities as of December 31, 2020. |
(9) | Quinton Hennigh 650,000 compensation securities as of December 31, 2020. |
Compensation securities exercised in 2020 by the NEOs and Directors:
EXERCISE OF COMPENSATION SECURITIES BY DIRECTORS AND NEOs | ||||||||||||||||
Difference | ||||||||||||||||
between | ||||||||||||||||
Closing | price and | |||||||||||||||
Exercise | price per | closing | Total | |||||||||||||
Number of | price | security | price on | value on | ||||||||||||
Type of | underlying | per | on date of | date of | exercise | |||||||||||
Name
and
Position |
compensation
security |
securities
exercised |
security
($) |
Date
of
exercise |
exercise
$(1) |
exercise
$(1) |
date
($) |
|||||||||
Collin Kettell, | Stock option | 200,000 | 0.50 | 2020-04-29 | N/A | N/A | N/A | |||||||||
Stock option | 1,050,000 | 0.50 | 2020-12-31 | 4.07 | 3.57 | 3,748,500 | ||||||||||
Executive | ||||||||||||||||
Stock option | 100,000 | 1.00 | 2020-12-31 | 4.07 | 3.07 | 307,000 | ||||||||||
Chairman and | ||||||||||||||||
Stock option | 1,395,000 | 1.075 | 2020-12-31 | 4.07 | 2.995 | 4,178,025 | ||||||||||
Director | ||||||||||||||||
Stock option | 1,735,000 | 1.40 | 2020-12-31 | 4.07 | 2.67 | 4,632,450 | ||||||||||
Craig A. | Stock option | 800,000 | 0.50 | 2020-04-13 | N/A | N/A | N/A | |||||||||
Roberts | Stock option | 700,000 | 1.00 | 2020-12-23 | 4.28 | 3.28 | 2,296,000 | |||||||||
CEO and | ||||||||||||||||
Director |
(1) The Company began trading on the TSX Venture Exchange on August 11, 2020.
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Stock Option Plans and Other Incentive Plans
Stock Option Plan
On June 17, 2020, the Company shareholders approved the Stock Option Plan. The purpose of the Stock Option Plan is to provide the Company with a share-related mechanism to attract, retain and motivate qualified directors, officers, employees, and consultants, to reward those individuals from time to time for their contributions toward the long-term goals of the Company and to enable and encourage those individuals to acquire common shares as long-term investments. The Company is required to obtain shareholder approval of the Stock Option Plan on a yearly basis in accordance with the policies of the TSXV. The general terms and conditions of the Stock Option Plan are reflected in the disclosure below.
Administration | The Stock Option Plan is administered by the Board, or such director or other senior officer or employee of the Company as may be designated as administrator by the Board. The Board or such committee may make, amend and repeal at any time, and from time to time, such regulations not inconsistent with the Stock Option Plan. |
Number of Shares | The maximum number of common shares issuable under the Stock Option Plan shall not exceed 10% of the number of common shares issued and outstanding as of each the date on which the Board grants the option (the “Award Date”). The number of common shares underlying Options that have been cancelled, that have expired without being exercised in full, and that have been issued upon exercise of options shall not reduce the number of common shares issuable under the Stock Option Plan and shall again be available for issuance thereunder. |
Securities | Each option entitles the holder thereof (an “Option Holder”) to purchase one common share at an exercise price determined by the Board. |
Participation | Any director, senior officer, management company, employee or consultant of the Company (including any subsidiary of the Company), as the Board may determine. |
Exercise Price | The exercise price of an option will be determined by the Board in its sole discretion, provided that the exercise price will not be less than the Discounted Market Price (as defined in the policies of the TSXV) (or, if the common shares are not listed for trading on the TSXV, then the permittable discounted market price on such exchange or quotation system on which the common shares are then listed or quoted for trading) or such other price as may be required or permitted by the TSXV from time to time. |
The Board may, at the time an Option is awarded or upon renegotiation of the same, attach restrictions relating to the exercise of the Option, including vesting provisions. Any such restrictions shall be recorded in the applicable written agreement between the Company and an Option Holder giving effect to an award of Options. | |
Exercise Period | The exercise period of an option will be the period from and including the Award Date through to and including the expiry date that will be determined by the Board at the time of grant (the “Expiry Date”), provided that the Expiry Date of an Option will be no later than the tenth anniversary of the Award Date of the Option, provided that such date does not fall within a Blackout Period (as defined in the Stock Option Plan). |
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Cessation of Employment | Subject to certain limitations, in the event that an Option Holder ceases employment with the Company, other than by reason of death, the Expiry Date of the option will be 90 days after the date which the Option Holder ceases employment (the “Termination Date”), unless the Option Holder is terminated for cause, in which case the Expiry Date will be the Termination Date. |
In the event that an Option Holder should die while he or she is still director, senior officer, management company, employee or consultant of the Company, the Expiry Date will be 12 months from the date of death of the Option Holder. | |
Subject to certain limitations, any unvested option which vests on or after the Termination Date (or date of death, if applicable) but prior to the Expiry Date, will be exercisable by the Option Holder until the Expiry Date. Any unvested Option held by an Option Holder who ceases employment as a result of termination for cause, will not vest and will terminate as of the Termination Date. | |
In the event that the Option Holder holds his or her Option as an employee or consultant retained by the Company to provide Investor Relations Activities (as defined in the TSXV’s Corporate Finance Manual), and ceases to be an employee or consultant of the Company other than by reason of death, the Expiry Date will be the date such Option Holder ceases to be an employee or consultant of the Company. | |
Acceleration Events | If the Company seeks shareholder approval for a transaction which would constitute an Acceleration Event (as defined in the Stock Option Plan) or third party makes a bona fide formal offer to the Company or its shareholders which would constitute an Acceleration Event, the Board may (i) permit the Option Holders to exercise their options, as to all or any of such options that have not previously been exercised (regardless of any vesting restrictions), but in no event later than the Expiry Date of the option, so that the Option Holders may participate in such transaction; and (ii) require the acceleration of the time for the exercise of the Options and of the time for the fulfilment of any conditions or restrictions on such exercise. |
Notwithstanding any other provision of the Stock Option Plan or the terms of any option, if at any time when options remains unexercised and the Company completes any transaction which constitutes an Acceleration Event, all outstanding unvested options will automatically vest. | |
Any proposed acceleration of vesting provisions is subject to the policies and necessary approvals of the TSXV, if applicable. | |
Acceleration Events | The maximum number of common shares which may be issuable, at any time, to Insiders (as defined in the Stock Option Plan) under the Stock Option Plan, together with any other share-based compensation arrangements of the Company, will be 10% of the total number of common shares issued and outstanding. The maximum number of common shares which may be issued, within any one-year period, to Insiders under the Stock Option Plan, together with any other share-based compensation arrangements of the Company, will be 10% of the total number of common shares issued and outstanding. The total number of options awarded to any one individual in any twelve-month period will not exceed 5% of the issued and outstanding common shares of the Company at the Award Date unless the Company has obtained disinterested shareholder approval as required by the TSXV. |
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The total number of options awarded to any one consultant of the Company in any twelve-month period will not exceed 2% of the issued and outstanding common shares of the Company at the Award Date unless consent is obtained from the TSXV. | |
The total number of options awarded to all persons retained by the Company to provide Investor Relations Activities will not exceed 2% of the issued and outstanding common shares of the company, in any twelvemonth period, calculated at the Award Date unless consent is obtained from the TSXV. Options granted to persons retained to provide Investor Relations Activities will vest in stages over not less than twelve months with no more than one quarter of the options vesting in any three-month period. | |
Amendments | Subject to certain exceptions and any applicable regulatory approval, the Board may amend the Stock Option Plan and the terms and conditions of any option previously awarded or thereafter to be awarded for the purpose of complying with any changes in any relevant law, TSXV policy, rule or regulation applicable to the Stock Option Plan, any option or the common shares, or for any other purpose which the Board may deem desirable or necessary and may be permitted by all relevant laws, rules and regulations, provided that any such amendment will not materially impair any right of any Option Holder pursuant to any Option awarded prior to such amendment. |
The Board may only amend the provisions of the Stock Option Plan relating to the following if the Board obtains the approval of the shareholders of the Company: (i) persons eligible to be granted options under the Stock Option Plan; (ii) the maximum number or percentage of common shares reserved for issuance upon exercise of options available under the Stock Option Plan; (iii) the limitations on grants of options to any one person, Insiders, consultants, or persons involved in Investor Relations Activities; (iv) the method for determining the exercise price for Options; (v) the maximum term of Options; (vi) the expiry and termination provisions applicable to Options; or (vii) amendments to the amendment provisions of the Stock Option Plan. | |
Disinterested shareholders of the Company must approve any amendment to options held by an Insider at the time of the amendment that would have the effect of decreasing the exercise price of such Options. | |
Termination | The Board may terminate the Stock Option Plan any time provided that such termination shall not alter the terms or conditions of any option or impair any right of any Option Holder pursuant to any option awarded prior to the date of such termination and notwithstanding such termination, the Company, such options and such Option Holders shall continue to be governed by the provisions of the Stock Option Plan. |
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Further particulars of the Stock Option Plan are contained under the headings Ratification, Confirmation, and Approval of Stock Option Plan and Equity Compensation Plan Information, and the entire Stock Option Plan is included as Schedule “B”.
Employment, Consulting, and Management Agreements
As of the date of this Circular, other than as described below, we do not have any contract, agreement, plan or arrangement that provides for payments to the Named Executive Officers at, following, or in connection with any termination (whether voluntary, involuntary or constructive), resignation, retirement, a change in control of the Company or a change in a director or Named Executive Officer's responsibilities.
For the purposes of this section “Change of Control” means change in control of the Company, which includes the acquisition by a person of 50% or more of the voting securities of the Company, the removal of 50% or more of the incumbent members of the Board, or a transaction the result of which is that the current voting shareholders of the Company own less than 50% of the voting shares of the resulting or successor corporation, or the sale of all or substantially all of the Company’s assets.
The material terms of the 2020 NEO employment agreements were as follows:
Argentum Management Services Agreement
Collin Kettell, Executive Chairman and Director, provides management services to the Company through Argentum Capital Corp. (“Argentum”) . The Company entered into a management services agreement with Argentum dated March 1, 2020, with respect to the provision of certain management and administrative consulting services provided by Argentum to the Company (the “Argentum Agreement”). Pursuant to the terms and conditions of the Argentum Agreement, Argentum provides certain management consulting services to the Company and its subsidiaries as may be requested by and at the direction of the Board from time to time, including: (i) guidance, advice and services with respect to strategic planning, future growth, projects and business activities; (ii) guidance and advice in relation to the day to day operation and business of the Company; (iii) guidance and advice concerning proposed acquisitions, divestitures, joint ventures and business combinations, (iv) guidance and advice concerning any mineral properties owned by the Company or interests in mineral properties acquired by the Company and other mutually agreed services. Argentum is paid a base fee rate of $25,000 per month (the “Argentum Base Fee”), subject to annual review by the Board. Argentum is also eligible for an incentive fee and the grant of Options pursuant to the Stock Option agreement as determined by the Board at its discretion.
Under the terms of the Argentum Agreement, at any time within 60 days following a Change of Control, Argentum or the Company may elect to terminate the Argentum Agreement. Upon such termination, the Company is obliged to compensate Argentum (i) a termination fee equal to 24 months of the Argentum Base Fee, (ii) an amount equal to any incentive fee paid to Argentum within the 24 months preceding termination in connection with a Change of Control and (iii) any accrued liabilities owing to Argentum under the Argentum Agreement. The estimated incremental payments to Argentum that would result from a Change of Control occurring as at December 31, 2020 would be $600,000.
Flotsam Management Services Agreement
Craig Roberts, Chief Executive Officer, provides management services to the Company through Flotsam Cove Holdings Ltd. (“Flotsam”). The Company entered into a management services agreement with Flotsam dated March 1, 2020, with respect to the provision of certain management and administrative consulting services provided by Flotsam to the Company (the “Flotsam Agreement”). Pursuant to the terms and conditions of the Flotsam Agreement, Flotsam provides certain management consulting services to the Company and its subsidiaries as may be requested by and at the direction of the Board from time to time, including: (i) guidance, advice and services with respect to strategic planning, future growth, projects and business activities; (ii) guidance and advice in relation to the day to day operation and business of the Company; (iii) guidance and advice concerning proposed acquisitions, divestitures, joint ventures and business combinations, (iv) guidance and advice concerning any mineral properties owned by the Company or interests in mineral properties acquired by the Company and other mutually agreed services.
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Flotsam is paid a base fee rate of $25,000 per month (the “Flotsam Base Fee”), subject to annual review by the Board. Pursuant to the Flotsam Agreement, Flotsam received a bonus of $250,000 on March 30, 2020 and then paid $400,000 to exercise 800,000 Options at an exercise price of $0.50 to purchase 800,000 common shares. On April 15, 2020, the Company then granted Mr. Roberts an additional 800,000 Options at an exercise price of $1.00 per share. Flotsam is also eligible for an incentive fee at the Board’s discretion. Under the terms of the Flotsam Agreement, upon closing of the Novo Transaction, Mr. Roberts was granted 1,000,000 additional Options on April 15, 2020 pursuant to the Stock Option Plan. In addition, under the Flotsam Agreement, it was agreed, as soon as at least 900,000 additional Options are available under the Stock Option Plan, to grant Mr. Roberts an additional 900,000 Options.
Under the terms of the Flotsam Agreement, at anytime within 60 days following a Change of Control of the Company, Flotsam or the Company may elect to terminate the Flotsam Agreement. Upon such termination, the Company is obliged to compensate Flotsam (i) a termination fee equal to 24 months of the Flotsam Base Fee, (ii) an amount equal to any incentive fee paid to Flotsam within the 24 months preceding termination in connection with a Change of Control and (iii) any accrued liabilities owing to Flotsam under the Flotsam Agreement. The estimated incremental payments to Flotsam that would result from a Change of Control occurring as at December 31, 2020 would be $600,000.
Bruno Management Services Agreement
Denis Laviolette, President and Director, provides his management services to the Company through Bruno Management Services Corporation (“Bruno”). The Company entered into a management services agreement with Bruno dated March 1, 2020, with respect to the provision of certain management and administrative consulting services provided by Bruno to the Company (the “Bruno Agreement”). Pursuant to the terms and conditions of the Bruno Agreement, Bruno provides certain management consulting services to the Company and its subsidiaries as may be requested by and at the direction of the Board from time to time, including: (i) guidance, advice and services with respect to strategic planning, future growth, projects and business activities; (ii) guidance and advice in relation to the day to day operation and business of the Company; (iii) guidance and advice concerning proposed acquisitions, divestitures, joint ventures and business combinations, (iv) guidance and advice concerning any mineral properties owned by the Company or interests in mineral properties acquired by the Company, (v) guidance and advice in connection with the communications with our shareholders and responding to shareholder inquiries and other mutually agreed services.
Bruno is paid a base fee rate of $17,500 per month (the “Bruno Base Fee”), subject to annual review by the Board. Bruno is also eligible for an incentive fee and the grant of Options as determined by the Board at its discretion.
Under the terms of the Bruno Agreement, at any time within 60 days following a Change of Control, Bruno or the Company may elect to terminate the Bruno Agreement. Upon such termination, the Company is obliged to compensate Bruno (i) a termination fee equal to 24 months of the Bruno Base Fee, (ii) an amount equal to any incentive fee paid to Bruno within the 24 months preceding termination in connection with a Change of Control and (iii) any accrued liabilities owing to Bruno under the Bruno Agreement. The estimated incremental payments to Bruno that would result from a Change of Control occurring as at December 31, 2020 would be $420,000.
BM Strategic Management Services Agreement
Michael Kanevsky, Chief Financial Officer, provides his services to the Company through a third-party management services agreement with BM Strategic (the “BM Strategic Management Services Agreement”). Pursuant to the terms of the BM Strategic Management Services Agreement, BM Strategic provides all CFO services to the Company.
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Separation Event Benefits
The following table presents the estimated total change of control and termination benefits of its 2020 NEOs, assuming the separation event occurred on December 31, 2020.
Separation Event | ||||||||||||||
Termination | Change of | |||||||||||||
Termination | without Cause | Control | ||||||||||||
NEO | Resignation | with Cause | $ | $ | ||||||||||
Collin Kettell Executive Chairman and Director | Nil | Nil | 450,000 | 600,000 | ||||||||||
Craig A. Roberts CEO and Director | Nil | Nil | 450,000 | 600,000 | ||||||||||
Denis Laviolette President and Director | Nil | Nil | 315,000 | 420,000 | ||||||||||
Michael Kanevsky CFO | Nil | Nil | Nil | Nil | ||||||||||
Greg Matheson COO | Nil | Nil | 292,500 | 390,000 |
The Board determines Director and NEO compensation by the recommendation of the Compensation Committee on an annual basis. The Compensation Committee consists of three independent Directors and, with consultation from the CEO:
· | reviews and assesses the overall compensation strategy of the Company based on industry standards and characteristic needs and objectives of the Company, including consultation with independent experts; |
· | sets compensation parameters; |
· | assesses the CEO’s performance against pre-agreed objectives; |
· | reviews performance assessments of other senior officers, new executive appointments, terminations, and employment agreements; |
· | makes recommendations to the Board on salary changes, short-term and long-term incentive plans, or benefit plans; and |
· | reviews and recommends disclosure pertaining to all the foregoing. |
Compensation Philosophy and Objectives
The objective of the Company’s compensation program is to attract and continue to retain NEOs that have the necessary attributes, experience, skills, and competencies that represent the best fit for the Company and to ensure that the compensation for its NEOs is appropriate and aligned with shareholder interests. The Compensation Committee reviews director and NEO compensation on an annual basis.
The Company’s general philosophy is that compensation for non-executive Directors and NEOs should be a mix of cash (base salary and short-term incentive bonus) and equity (stock options) with short term incentive and stock option combined components being more heavily weighted than base salary.
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Compensation Elements
The compensation of the NEOs consists of three main components: base salary, short-term incentive compensation (discretionary annual cash bonuses), and long-term incentives, currently in the form of stock options. Each element of compensation is a subjective decision by the Board based on recommendations of the Compensation Committee. The following discussion describes the components of compensation and discusses how each component relates to the Company’s overall executive compensation objective.
The Company has not established at this time any pension plans or deferred compensation plans for directors and executive officers that provide for payments or benefits at, following, or in connection with retirement.
Base Salary
The base salary for each executive is established by the Board, on the recommendation of the Compensation Committee, based upon the position held by such executive, competitive market conditions, such executive’s related responsibilities, experience and the NEO’s skill base, the functions performed by such executive and the salary ranges for similar positions. Individual and corporate performance will also be taken into account in determining base salary levels for executives.
The 2020 base salaries for each NEO at December 31, 2020 were as follows:
2020 Base Salary | ||||
Name and Principal Position | $ | |||
Collin Kettell, Executive Chairman | 300,000 | |||
Craig A. Roberts, Chief Executive Officer | 300,000 | |||
Denis Laviolette, President | 210,000 | |||
Michael Kanevsky, CFO | 72,900 | |||
Greg Matheson, COO | 195,000 |
Short-term Incentive
In determining to award performance bonuses, including the amounts thereof, the Board of Directors uses its discretion and takes into consideration the Company’s annual achievements, without assigning any quantifiable weight or factor in respect of any particular achievement or corporate milestone. Short-term incentive awards were granted to NEOs in 2020 based on the Compensation Committee’s assessment of the Company’s performance for the year and are disclosed in the “Table of Compensation Excluding Compensation Securities”, above.
Long-term Incentive
Long-term incentives for NEOs and directors take the form of stock options which are granted under the direction of the Compensation Committee in accordance with the Company’s shareholder approved stock option plan. The value of stock options granted to NEOs is determined on both qualitative and quantitative levels. Changes in executive positions or roles and ongoing contribution to the Company are factors which affect the decision-making process. Outstanding stock options and previous grants are reviewed by the Compensation Committee on an annual basis and again when considering new stock option grants. The terms of the stock option plan are also reviewed from time to time by the Compensation Committee and changes suggested are discussed with NEOs prior to approval by the Board, then regulatory and shareholder approval as necessary (see “Stock Option Plan and Other Incentive Plans” above).
While the Board considers amounts paid by other companies in similar industries at similar stages of development in determining compensation, no specifically selected peer group was identified in 2020.
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Securities Authorized for Issuance Under Equity Compensation Plans
Equity Compensation Plan Information
The following table provides information regarding all compensation plans under which equity securities of the Company are authorized for issuance as at December 31, 2020:
Number of | Weighted- | Number of | ||||||||
securities to be | average exercise | securities | ||||||||
issued upon | price of | remaining | ||||||||
exercise of | outstanding | available for future | ||||||||
outstanding | options, | issuance under | ||||||||
options, | warrants, and | equity | ||||||||
warrants, and | rights | compensation | ||||||||
Plan Category | rights | $ | plans | |||||||
Equity compensation plans approved by securityholders | 5,685,667 | 1.57 | 8,669,070 | (1)(2) | ||||||
Equity compensation plans not approved by securityholders | Nil | N/A | N/A | |||||||
Total | 5,685,667 | 1.57 | 8,669,070 |
(1) | This number is 10% of the issued and outstanding shares of the Company, less the number of outstanding stock options. |
(2) Pursuant to the terms of the RSU Plan, the maximum number of shares which may be reserved for issuance under the RSU Plan is the lesser of (i) 2,000,000 shares and (ii) in combination with the aggregate number of shares which may be issuable under any and all of the Company’s equity incentive plans in existence from time to time, 10% of the total number of issued and outstanding shares.
Stock Option Plan:
The following is a summary of the principal terms of the Stock Option Plan and the entire Stock Option Plan is included as Schedule “B”.
The Stock Option Plan (the “Plan”) pursuant to which the Board of Directors may grant stock options (the “Options”) to any director, senior officer, management company, employee or consultant of the Company (including any subsidiary of the Company), as the Board of Directors may determine, exercisable to acquire Common Shares up to a maximum of 10% of the issued and outstanding Common Shares at the time of grant. Every Option granted has a term not exceeding 10 years after the date of grant.
As at August 13, 2021, there are 14,465,250 common shares reserved for issuance on the exercise of stock options, representing approximately 94% of the available Option Limit and 10% of the 153,652,528 currently outstanding common shares. Stock options that expire without being exercised are automatically available for the purpose of granting stock options under the Stock Option Plan.
At December 31, 2020, stock options totaling 14,182,500 common shares on exercise of the options had been granted under the Stock Option Plan, representing approximately 9.54% of the issued and outstanding common shares of the Company and representing approximately 95.4% of the available Option Limit. As at December 31, 2020, 9,630,000 total options had been granted to Directors and insiders of the Company, representing approximately 6.5% of the total outstanding shares.
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Audit Committee
Overview
The Company has formed an Audit Committee comprised of Douglas Hurst (Chair), Dr. Quinton Hennigh and Denis Laviolette, all of whom are “financially literate” as defined in National Instrument 52-110 – Audit Committees (“NI 52-110”) . Mr. Hurst and Dr. Hennigh are considered “independent” and Mr. Laviolette, as President of the Company, is not considered “independent”, pursuant to NI 52-110.
The Audit Committee provides assistance to the Board in fulfilling its obligations relating to the integrity of the internal financial controls and financial reporting of the Company. The external auditors of the Company report directly to the Audit Committee. The Audit Committee’s primary duties and responsibilities include: (i) reviewing and reporting to the Board on the annual audited financial statements (including the auditor’s report thereon) and unaudited interim financial statements and any related management’s discussion and analysis, if any, and other financial disclosure related thereto that may be required to be reviewed by the Audit Committee pursuant to applicable legal and regulatory requirements; (ii) reviewing material changes in accounting policies and significant changes in accounting practices and their impact on the financial statements; (iii) overseeing the audit function, including engaging in required discussions with the Company’s external auditor and reviewing a summary of the annual audit plan at least annually, overseeing the independence of the Company’s external auditor, overseeing the Company’s internal auditor, and pre-approving any non-audit services to the Company; (iv) reviewing and discussing with management the appointment of key financial executives and recommending qualified candidates to the Board; (v) reviewing with management and the Company’s external auditors, at least annually, the integrity of the internal controls over financial reporting and disclosure; (vi) reviewing management reports related to legal or compliance matters that may have a material impact on the Company and the effectiveness of the Company’s compliance policies; and (vii) establishing whistleblowing procedures and investigating any complaints or concerns it deems necessary.
The full text of the Audit Committee Charter is attached as Schedule “C”.
Composition of the Audit Committee
Each member of the Audit Committee has adequate education and experience that is relevant to their performance as an Audit Committee member and, in particular, the requisite education and experience that have provided the member with:
(a) | an understanding of the accounting principles used by the Company to prepare its financial statements and the ability to assess the general application of those principles in connection with estimates, accruals and reserves; |
(b) | experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements or experience actively supervising individuals engaged in such activities; and |
(c) | an understanding of internal controls and procedures for financial reporting. |
Relevant Education and Experience |
Douglas Hurst
Mr. Hurst has over 30 years of experience in the mining and natural resource industries having acted as geologist, consultant, mining analyst, senior executive and board member. Mr. Hurst was previously a mining analyst with McDermid St. Lawrence Securities Ltd. and Sprott Securities Inc. and a contract analyst to Pacific International Securities Inc. and Octagon Capital Corporation. He was a founding executive of International Royalty Corporation, which was purchased by Royal Gold, Inc. for $700 million. Recently, Mr. Hurst was one of the founders of Newmarket Gold Inc., which was purchased for approximately $1 billion by Kirkland Lake Gold Ltd in November 2016. Mr. Hurst holds a Bachelor of Science in Geology from McMaster University (1986). Based on his experience, Mr. Hurst has an understanding of financial reporting requirements respecting financial statements sufficient enough to enable him to discharge his duties as an Audit Committee member.
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Dr. Quinton Hennigh
Dr. Quinton Hennigh is an economic geologist with more than 25 years of exploration experience with major gold mining firms. Dr. Hennigh has various experience with budgeting, economic assessments, and financial reporting through roles at various publicly traded companies. Dr. Hennigh is familiar with managing junior mining companies, including financing and compliance with reporting requirements. Based on his experience, Dr. Hennigh has an understanding of financial reporting requirements respecting financial statements sufficient enough to enable him to discharge his duties as an Audit Committee member.
Denis Laviolette
Mr. Laviolette is an intermediate level mining and exploration professional with approximately 10 years of experience in exploration, advanced mine operations, start-up mine management, QA/QC, grass roots exploration, financing and acquisitions, working in Northern Ontario (Timmins, Kirkland Lake and Red Lake), Norway and Ghana. Mr. Laviolette received his B.Sc., Earth Science (Geology) from Brock University, in St. Catharines, Ontario. He is currently employed as Vice President for Palisade Global Investments. His responsibilities at Palisade Global Investments include market/portfolio analysis, reviewing and vetting assets from a technical perspective and providing valuation estimates, analyzing, and summarizing technical reports on resources, feasibility and corporate financial statements.
Audit Committee Oversight
At no time since the commencement of the Company’s most recently completed financial year was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by the Board.
Pre-approval Policies and Procedures |
The Audit Committee mandate requires that the Audit Committee pre-approve any retainer of the auditor of the Company to perform any non-audit services to the Company that it deems advisable in accordance with applicable legal and regulatory requirements and policies and procedures of the Board. The Audit Committee is permitted to delegate pre-approval authority to one of its members; however, the decision of any member of the Audit Committee to whom such authority has been delegated must be presented to the full Audit Committee at its next scheduled meeting.
External Auditor Service Fees (by Category) |
The fees billed by the Company’s external auditors in each of the last two fiscal years for audit and non-audit related services provided to the Company or its subsidiaries (if any) were as follows:
Financial Year Ending | Audit Fees | Audit-Related Fees(1) | Tax Fees(2) | All Other Fees(3) | |||||||||||
December 31, 2020 | $ | 170,000 | $ | 42,800 | $ | Nil | $ | Nil | |||||||
December 31, 2019 | $ | 15,000 | $ | Nil | $ | Nil | $ | Nil |
(1) | Fees charged for assurance and related services that are reasonably related to the performance of an audit, and not included under Audit Fees. |
(2) | Fees charged for tax compliance, tax advice and tax planning services. |
(3) | Fees for services other than disclosed in any other column. |
On October 9, 2020, New Found appointed Deloitte LLP as the auditor of the Company. At the request of the Company, DNTW Toronto LLP resigned as the auditor of the Company. There were no reservations in DNTW Toronto LLP’s audit reports for the fiscal year ended December 31, 2019 and there are no reportable events, as such term is defined in National Instrument 51-102, between New Found and DNTW Toronto LLP. New Found filed the required reporting package in accordance with National Instrument 51-102 on October 14, 2020.
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On October 28, 2020, New Found appointed Crowe MacKay LLP as the auditor of the Company. At the request of the Company, Deloitte LLP resigned as the auditor of the Company. There were no reportable events, as such term is defined in National Instrument 51-102, between New Found and Deloitte LLP. New Found filed the required reporting package in accordance with National Instrument 51-102 on November 10, 2020.
Reliance on Certain Exemptions |
The Company has relied upon the exemption provided by section 6.1 of NI 52-110, pursuant to which the Company is not required to comply with Part 3 (Composition of the Audit Committee) and Part 5 (Reporting Obligations) of NI 52-110.
Interest of Informed Persons in Material Transactions
Except as disclosed in this Information Circular, to the knowledge of the Company, no director or executive officer, or person or company that beneficially owns, or controls and directs, directly or indirectly, more than 10 percent of the any class or series of the voting securities of the Company, or any associate or affiliate of the foregoing, have had any material interest, direct or indirect, in any transaction within the three most recently completed financial years or during the current financial year prior to the date of this Information Circular that has materially affected or is reasonably expected to materially affect the Company.
Certain directors and/or executive officers have been granted stock options of the Company and have received consulting fees for services provided to New Found.
Except for material contracts entered into in the ordinary course of business, set out below are material contracts to which New Found are a party to or entered into for the fiscal period ended December 31, 2020 or the date of this Information Circular:
(1) | the Agency Agreement between New Found and Canaccord Genuity Corp., BMO Nesbitt Burns Inc. and Desjardins Securities Inc., dated July 31, 2020 (the “Agency Agreement”); and |
(2) | the Stock Option Plan. |
The Agency Agreement
The Company entered into the Agency Agreement on July 31, 2020 in connection with its initial public offering in Canada and listing on the TSXV. On August 11, 2020, New Found completed its initial public offering of an aggregate of 21,000,000 Common Shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 14, 2020, the Agents exercised their overallotment option in full to offer and sell an additional 3,150,000 Common Shares for gross proceeds of $4,095,000. New Found paid agents’ fees of $1,793,700 in cash and issued 1,379,768 agents’ warrants exercisable into Common Shares at $1.30 for 12 months from the date of issue in connection with the initial public offering.
The Stock Option Plan
See “Description of Capital Structure - Options” for a summary of the key terms of the Stock Option Plan.
Outside of the above, New Found is not aware of any material contracts of the Company that were entered into (a) within the last financial year and up to the date of this Information Circular, or (b) before the last financial year but still in effect, and that is required to be filed under Part 12 of NI 51-102 or that would be required to be filed under 51-102 but for the fact that it was previously filed.
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Interest of Certain Persons in Matters to be Acted Upon
No person who has been a director or an executive officer of the Company at any time since the beginning of the Company’s last financial year, no proposed nominee of management of the Company for election as a director of the Company, and no associate or affiliate of the foregoing persons, has any material interest, direct or indirect, by way of beneficial ownership or otherwise, in the matters to be acted upon at the Meeting other than the election of directors or the approval of the Stock Option Plan.
Other Matters
It is not known whether any other matters will come before the Meeting other than those set forth above and in the Notice of Meeting, but if any other matters do arise, the persons named in the proxy intend to vote on any poll, in accordance with their best judgment, exercising discretionary authority with respect to amendments or variations of matters set out in the Notice of Meeting and other matters which may properly come before the Meeting or any adjournment.
Additional Information
Additional information relating to the Company is on SEDAR at www.sedar.com or on the Company’s website at http://www.newfoundgold.ca. Shareholders may contact the Company to request copies of financial statements and MD&A as follows:
By phone: 604-562-9664
By email: contact@newfoundgold.ca
Financial information as at December 31, 2020 is provided in the Company’s audited annual consolidated financial statements and MD&A for its most recently completed financial year, filed on SEDAR.
DATED August 13, 2021
“Craig A. Roberts”
Craig A. Roberts
Chief Executive Officer and Director
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Schedule “A” – Board Mandate
NEW FOUND GOLD CORP.
BOARD OF DIRECTORS MANDATE
1. PURPOSE
The members of the Board of Directors (the “Board”) have the duty to supervise the management of the business and affairs of New Found Gold Corp. (the “Company”). The Board, directly and through its committees and the Chair of the Board (the “Chair”), shall provide direction to senior management, generally through the Chief Executive Officer, to pursue the best interests of the Company.
2. DUTIES AND RESPONSIBILITIES
The Board shall have the specific duties and responsibilities outlined below.
Strategic Planning
Strategic Plans
The Board will adopt a strategic plan for the Company. The Board shall review and, if advisable, approve the Company’s strategic planning process and the Company’s annual strategic plan. In discharging this responsibility, the Board shall review the plan in light of management’s assessment of emerging trends, the competitive environment, the opportunities for the business of the Company, risk issues, and significant business practices and products.
Business and Capital Plans
The Board shall review and, if advisable, approve the Company’s annual business and capital plans as well as policies and processes generated by management relating to the authorization of major investments and significant allocation of capital.
Monitoring
The Board shall review management’s implementation of the Company’s strategic, business and capital plans. The Board shall review and, if advisable, approve any material amendments to, or variances from, these plans.
Risk Management
General
The Board shall review reports provided by management of principal risks associated with the Company’s business and operations, review the implementation by management of appropriate systems to manage these risks, and review reports by management relating to the operation of, and any material deficiencies in, these systems.
Verification of Controls
The Board shall verify that internal, financial, non-financial and business control and management information systems have been established by management.
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Human Resource Management
General
At least annually, the Board shall review a report of the Compensation Committee concerning the Company’s approach to human resource management and recommendations for executive compensation.
Succession Review
At least annually, the Board shall review the succession plans of the Company for the Chair, the Lead Director (if applicable), the Chief Executive Officer and other executive officers, including the appointment, training and monitoring of such persons.
Integrity of Senior Management
The Board shall, to the extent feasible, satisfy itself as to the integrity of the Chief Executive Officer and other executive officers of the Company and that the Chief Executive Officer and other senior officers strive to create a culture of integrity throughout the Company.
Corporate Governance
General
At least annually, the Board shall review a report of the Nominating and Corporate Governance Committee concerning the Company’s approach to corporate governance.
Director Independence
At least annually, the Board shall review a report of the Nominating and Corporate Governance Committee that evaluates the director independence standards established by the Board and the Board’s ability to act independently from management in fulfilling its duties.
Ethics Reporting
The Board has adopted a written Code of Business Conduct and Ethics (the “Code”) applicable to directors, officers and employees of the Company. At least annually, the Board shall review the report of the Nominating and Corporate Governance Committee relating to compliance with, or material deficiencies from, the Code and approve changes it considers appropriate. The Board shall review reports from the Nominating and Corporate Governance Committee concerning investigations and any resolutions of complaints received under the Code.
Board of Directors Mandate Review
At least annually, the Board shall review and assess the adequacy of this Mandate to ensure compliance with any rules of regulations promulgated by any regulatory body and approve any modifications to this Mandate as considered advisable.
Communications
Shareholders
The Company endeavors to keep its shareholders informed of its progress through quarterly interim reports, periodic press releases and investor presentations. Directors and management shall meet with the Company’s shareholders at the annual general meeting and shall be available to respond to questions at that time.
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3. COMPOSITION
General
The composition and organization of the Board, including: the number, qualifications and remuneration of directors; the number of Board meetings; quorum requirements; meeting procedures and notices of meetings shall comply with the requirements of the Business Corporations Act (British Columbia) (the “BCBCA”), the Securities Act (British Columbia) (the “Act”) and the articles of the Company, subject to any exemptions or relief that may be granted from such requirements.
Each director must have an understanding of the Company’s principal operational and financial objectives, plans and strategies, and financial position and performance. Directors must have sufficient time to carry out their duties and not assume responsibilities that would materially interfere with, or be incompatible with, Board membership. Directors who experience a significant change in their personal circumstances, including a change in their principal occupation, are expected to advise the chair of the Nominating and Corporate Governance Committee.
Chair of the Board
The Chair shall be an independent director unless the Board determines that it is in the best interest of the Company to have a non-independent Chair. “Independent” shall have the meaning, as the context requires, given to it in National Policy 58-201 Corporate Governance Guidelines, as may be amended from time to time. If the Chair is not independent, then the independent directors shall select a director who will act as “Lead Director” and who will assume responsibility for providing leadership to enhance the effectiveness and independence of the Board. The Chair, if independent, or the Lead Director if the Chair is not independent, shall act as the effective leader of the Board and ensure that the Board’s agenda will enable it to successfully carry out its duties.
4. COMMITTEES OF THE BOARD
The Board has established the following committees: the Compensation Committee, the Audit Committee, and the Nominating and Corporate Governance Committee. Subject to applicable law, the Board may establish other Board committees or merge or dispose of any Board committee.
Committee Mandates
The Board has approved mandates for each Board committee and shall approve mandates for each new Board committee. Each mandate shall be reviewed by the Nominating and Corporate Governance Committee and any suggested amendments brought to the Board for consideration and approval.
Delegation to Committees
The Board has delegated to the applicable committee those duties and responsibilities set out in each committee’s mandate.
Consideration of Committee Recommendations
As required by applicable law, by applicable committee mandate or as the Board may consider advisable, the Board shall consider for approval the specific matters delegated for review to Board committees.
Board/Committee Communication
To facilitate communication between the Board and each Board committee, each committee chair shall provide a report to the Board on material matters considered by the committee at the first Board meeting after the committee’s meeting.
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5. MEETINGS
The Board will meet at least once in each quarter, with additional meetings held as deemed advisable. The Chair is primarily responsible for the agenda and for supervising the conduct of the meeting. Any director may propose the inclusion of items on the agenda, request the presence of, or a report by any member of senior management, or at any Board meeting raise subjects that are not on the agenda for that meeting.
Meetings of the Board shall be conducted in accordance with the Company’s articles.
Secretary and Minutes
The Corporate Secretary, his or her designate or any other person the Board requests shall act as secretary of Board meetings. Minutes of Board meetings shall be recorded and maintained by the Corporate Secretary and subsequently presented to the Board for approval.
Meetings Without Management
The independent members of the Board shall hold regularly scheduled meetings, or portions of regularly scheduled meetings, at which non-independent directors and members of management are not present.
Directors’ Responsibilities
Each director is expected to attend all meetings of the Board and any committee of which he or she is a member. Directors will be expected to have read and considered the materials sent to them in advance of each meeting and to actively participate in the meetings.
Access to Management and Outside Advisors
The Board shall have unrestricted access to management and employees of the Company. The Board shall have the authority to retain and terminate external legal counsel, consultants or other advisors to assist it in fulfilling its responsibilities and to set and pay the respective reasonable compensation of these advisors without consulting or obtaining the approval of any officer of the Company. The Company shall provide appropriate funding, as determined by the Board, for the services of these advisors.
Service on Other Boards and Audit Committee
Directors may serve on the boards of other public companies so long as these commitments do not materially interfere and are compatible with their ability to fulfill their duties as a member of the Board. Directors must advise the Chair in advance of accepting an invitation to serve on the board of another public company.
6. MANAGEMENT
Position Descriptions for Directors
The Board will approve position descriptions for the Chair, the Lead Director (if applicable) and the chair of each Board committee. At least annually, the Board shall review such position descriptions.
Position Description for CEO
The Board will approve a position description for the Chief Executive Officer, which includes delineating management’s responsibilities. The Board has also approved the corporate goals and objectives that the Chief Executive Officer has responsibility for meeting. At least annually, the Board shall review a report of the Compensation Committee reviewing this position description and such corporate goals and objectives.
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7. DIRECTOR DEVELOPMENT AND EVALUATION
Each new director shall participate in the Company’s initial orientation program and each director shall participate in the Company’s continuing director development programs. The Board shall review the Company’s initial orientation program and continuing director development programs.
8. NO RIGHTS CREATED
This Mandate is a statement of broad policies and is intended as a component of the flexible governance framework within which the Board, assisted by its committees, directs the affairs of the Company. While it should be interpreted in the context of all applicable laws, regulations and listing requirements, as well as in the context of the Company’s articles, it is not intended to establish any legally binding obligations.
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Schedule “B” – Stock Option Plan
NEW FOUND GOLD CORP.
STOCK OPTION PLAN
1.1 DEFINITIONS
As used herein, unless anything in the subject matter or context is inconsistent therewith, the following terms shall have the meanings set forth below:
“Administrator ” means the Board or such director or other senior officer or employee of the Company as may be designated as Administrator by the Board from time to time;
“Affiliate” means an affiliate of the Company within the meaning of Section 1.3 of National Instrument 45-106 – Prospectus and Registration Exemptions, as may be amended or replaced from time to time.
“Award Date” means, in respect of a particular Option, the date on which the Board grants the Option;
“Blackout Period” means an interval of time during which the Company has determined, in accordance with its insider -trading policy, that one or more Plan participants may not exercise an Option or sell Shares of the Company because they may be in possession of undisclosed material information pertaining to the Company, or when in anticipation of the release of quarterly or annual financials, to avoid potential conflicts associated with the Company’s insider-trading policy or applicable securities legislation, (which, for greater certainty, does not include the period during which a cease trade order is in effect to which the Company or in respect of an Insider, that Insider, is subject);
“Board” means the board of directors of the Company;
“Company” means New Found Gold Corp. and any subsidiary thereof, as the context may require;
“Consultant” means any individual, corporation, incorporated association or organization, body corporate, partnership, trust, association, or any other entity other than an individual who:
(a) | is engaged to provide, on an ongoing bona fide basis, consulting, technical, management or other services to the Company or any Affiliate of the Company other than services provided in relation to a “distribution” (as defined in the Securities Act (British Columbia)); |
(b) | provides the services under a written contract with the Company or any Affiliate of the Company; |
(c) | in the reasonable opinion of the Company, spends or will spend a significant amount of time and attention on the affairs and business of the Company or any Affiliate of the Company; and |
(d) | has a relationship with the Company or any Affiliate of the Company that enables the individual to be knowledgeable about the business and affairs of the Company or is otherwise permitted by applicable securities laws or regulations to be granted Options as a Consultant or as an equivalent thereof. |
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“Discounted Market Price” means the last closing price of the Shares before the date of the Option grant (less the applicable discount), unless in accordance with the policies of the Exchange, the Company issues a news release to fix the Exercise Price.
“Director” means a director, senior officer and Management Company Employees of the Company or a subsidiary of the Company;
“Employee” means (i) an individual considered an employee under the Income Tax Act, Canada (and for whom income tax, employment insurance and CPP deductions must be made at source); (ii) an individual who works full-time for the Company or any of its subsidiaries providing services normally provided by an employee and who is subject to the same control and direction by the Company over the details and methods of work as an employee of the Company, but for whom income tax deductions are not made at source; or (iii) an individual who works for the Company or any of its subsidiaries on a continuing and regular basis for a minimum amount of time per week providing services normally provided by an employee and who is subject to the same control and direction by the Company over the details and methods of work as an employee of the Company, but for whom income tax deductions are not made at source;
“Exchange” means the TSX Venture Exchange or any other Canadian stock exchange on which the Shares are listed;
“Exercise Notice” means the notice respecting the exercise of an Option, in the form set out as Schedule “A” hereto, duly executed by the Option Holder;
“Exercise Period” means the period during which a particular Option may be exercised, being the period from and including the Award Date through to and including the Expiry Date;
“Exercise Price” means the price at which an Option may be exercised as determined in accordance with section 3.7;
“Expiry Date” means the date determined in accordance with section 3.3 and after which a particular Option cannot be exercised;
“Exchange Hold Period” has the meaning ascribed thereto in Policy 1.1 of the policy manual of the Exchange;
“Insider” means a Director, a director or senior officer of a company that is an Insider or subsidiary of the Company, or a person that beneficially owns or controls, directly or indirectly, voting shares carrying more than 10% of the voting rights attached to all outstanding voting shares of the Company;
“Investor Relations Activities” has the meaning ascribed thereto in the Exchange’s Corporate Finance Manual;
“Management Company Employee” means an individual employed by a company providing management services to the Company, which are required for the ongoing successful operation of the business enterprise of the Company, but excluding a person engaged in Investor Relations Activities;
“Option” means an option to acquire Shares, awarded to a Director, Employee or Consultant pursuant to the Plan;
“Option Agreement” means the written agreement between the Company and an Option Holder giving effect to an award of Options;
“Option Holder” means a current or former Director, Employee or Consultant who holds an unexercised and unexpired Option or, where applicable, the Personal Representative of such person;
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“Person” means any individual, partnership, joint venture, syndicate, sole proprietorship, company or corporation with or without share capital, trust, trustee, executor, administrator, or other legal personal representatives, regulatory body or agency, government or governmental agency, authority or entity howsoever designated or constituted;
“Personal Representative” means (i) in the case of a deceased Option Holder, the executor or administrator of the deceased duly appointed by a court or public authority having jurisdiction to do so; and (ii) in the case of an Option Holder who for any reason is unable to manage his or her affairs, the person entitled by law to act on behalf of such Option Holder;
“Plan” means this stock option plan, as it may be amended from time to time;
“Securities Act” means the Securities Act (British Columbia), as it may be amended from time to time;
“Share” or “Shares” means, as the case may be, one or more common shares in the capital of the Company; and
“subsidiary” has the meaning ascribed to that term in the Securities Act.
1.2 CHOICE OF LAW
The Plan is established under, and the provisions of the Plan shall be interpreted and construed solely in accordance with, the laws of the Province of British Columbia and the federal laws of Canada applicable therein.
1.3 HEADINGS
The headings used herein are for convenience only and are not to affect the interpretation of the Plan.
1.4 AMENDED AND RESTATED
This Plan amends and restates in its entirety, as of June 17, 2020, the 2017 stock option plan of the Company, approved by the Company’s shareholders in January 2017 (the “Original Plan”) . Any reference to “Plan” or “Palisades Resource Corp. 2017 Stock Option Plan” in the Original Plan and any document delivered in connection therewith, or pursuant thereto, will mean this Plan, as amended and restated hereby.
ART ICLE II
PURPOSE AND PARTICIPATION
2.1 PURPOSE
The purpose of the Plan is to provide the Company with an equity-based mechanism to attract, retain and motivate Directors, Employees and Consultants, to reward them by the grant of Options under the Plan from time to time for their contributions toward the long term goals of the Company and to enable and encourage them to acquire Shares as long term investments.
This Plan amends and restates in its entirety, as of June 17, 2020, the 2017 stock option plan of the Company, approved by the Company’s shareholders in January 2017 (the “Original Plan”) . Any reference to “Plan” or “Palisades Resource Corp. 2017 Stock Option Plan” in the Original Plan and any document delivered in connection therewith, or pursuant thereto, will mean this Plan, as amended and restated hereby.
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2.2 PARTICIPATION
The Board shall, from time to time, in its sole discretion, determine those Directors, Employees and Consultants, if any, to whom Options are to be awarded and, subject to section 3.2 and 3.5, the number of Options so awarded. For greater certainty, it is the responsibility of the Company and the Option Holder to ensure and confirm that the Optionee is a bona fide Director, Employee or Consultant, as the case may be. In determining the number of Options to be awarded to participant under the Plan, the Board may take into account the following criteria:
(a) | the person’s remuneration as at the Award Date in relation to the total remuneration payable by the Company to all of its Employees and Consultants as at the Award Date; |
(b) | the length of time that the person has provided services to the Company; and |
(c) | the nature and quality of work performed by the person. |
Options awarded to a Director, Employee or Consultant pursuant to the Plan may, at the request of such Director, Employee or Consultant, be granted to a corporation, incorporated association or organization, body corporate, partnership, trust, association or any other entity other than an individual that is wholly-owned by such Director, Employee or Consultant.
2.3 DOCUMENTATION
Upon first receiving an award of Options under the Plan, the Administrator shall provide a copy of the Plan to each Option Holder. Thereafter, a copy of any amendment to the Plan shall be promptly provided by the Administrator to each Option Holder.
Each Option awarded under the Plan shall be embodied in an Option Agreement which shall give effect to the provisions of the Plan.
2.4 PARTICIPATION VOLUNTARY
The participation of any Director, Employee or Consultant in the Plan is entirely voluntary and not obligatory and shall not be interpreted as conferring any rights or privileges, other than those rights and privileges expressly provided in the Plan. In particular, participation in the Plan does not constitute a condition of employment, appointment or engagement to provide services, or constitute a commitment on the part of the Company to continued employment, appointment or engagement to provide services, and neither the Plan nor any grant of Options under the Plan shall be construed as granting an Option Holder a right to be retained as an Employee or a Consultant or a claim or right to any future grant of options under the Plan. Neither the Plan nor any action taken hereunder shall interfere with the right of the Company to terminate the employment, appointment or provision of services of such Option Holder at any time. The payment of any sum of money in cash in lieu of notice of termination of employment, appointment or provision of services shall not be considered as extending the period of employment, appointment or the provision of services for the purposes of the Plan.
ARTICLE III
TERMS AND CONDITIONS OF OPTIONS
3.1 BOARD TO ALLOT SHARES
The Shares to be issued to Option Holders upon the exercise of Options shall be allotted and authorized for issuance by the Board prior to the exercise thereof.
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3.2 NUMBER OF SHARES
The maximum number of Shares issuable under the Plan shall not exceed 10% of the number of Shares issued and outstanding as of each Award Date. Notwithstanding the foregoing, the number of Shares underlying Options that have been cancelled, that have expired without being exercised in full, and that have been issued upon exercise of Options shall not reduce the number of Shares issuable under the Plan and shall again be available for issuance hereunder.
3.3 TERM OF OPTION
Subject to sections 3.4 and 3.6, the Expiry Date of an Option shall be the date so fixed by the Board at the time the particular Option is awarded, provided that such date shall not be later than the tenth anniversary of the Award Date of the Option.
3.4 EXTENSION OF OPTIONS EXPIRING DURING BLACKOUT PERIOD
Should the Expiry Date for an Option fall within a Blackout Period, or within nine (9) business days following the expiration of a Blackout Period, such Expiry Date shall be automatically extended without any further act or formality to that day which is the tenth (10th) business day after the end of the Blackout Period, such tenth business day to be considered the Expiry Date for such Option for all purposes under the Plan.
3.5 LIMITATIONS
The maximum number of Shares which may be issuable, at any time, to Insiders under the Plan, together with any other Share-based compensation arrangements of the Company, shall be 10% of the total number of Shares issued and outstanding. The maximum number of Shares which may be issued, within any one-year period, to Insiders under the Plan, together with any other Share-based compensation arrangements of the Company, shall be 10% of the total number of Shares issued and outstanding.
The total number of Options awarded to any one individual in any twelve month period shall not exceed 5% of the issued and outstanding Shares of the Company at the Award Date unless the Company has obtained disinterested shareholder approval as required by the Exchange).
The total number of Options awarded to any one Consultant of the Company in any twelve month period shall not exceed 2% of the issued and outstanding Shares of the Company at the Award Date unless consent is obtained from the Exchange.
The total number of Options awarded to all persons retained by the Company to provide Investor Relations Activities shall not exceed 2% of the issued and outstanding Shares of the Company, in any twelve month period, calculated at the Award Date unless consent is obtained from the Exchange. Options granted to persons retained to provide Investor Relations Activities will vest in stages over not less than 12 months with no more than one quarter of the options vesting in any 3 month period.
3.6 TERMINATION OF OPTION
An Option Holder may exercise an Option, in whole or in part, at any time and from time to time during the Exercise Period, provided that, with respect to the exercise of part of an Option, the Board may at any time and from time to time fix limits, vesting requirements or restrictions in respect of which an Option Holder may exercise part of any Option held by the Option Holder. Any Option or part thereof not exercised within the Exercise Period shall terminate and become null, void and of no further force and effect as of 5:00 p.m. (Vancouver time) on the Expiry Date. Unless otherwise determined by the Board (but subject to the ten-year limit set forth in section 3.3), the Expiry Date of an Option shall be the earlier of the date so fixed by the Board on the Award Date referred to in section 3.3 above, and the date established, if applicable, in subsections (a) and (b) below.
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(a) | Death. In the event that an Option Holder should die while he or she is still a Director, Employee or Consultant, as the case may be, the Expiry Date shall be 12 months from the date of death of the Option Holder. |
(b) | Cessation of Service or Employment. In the event that an Option Holder ceases to be a Director, Employee or Consultant of the Company other than by reason of death, the Expiry Date of the Option shall be the 90th day following the date the Option Holder ceases to be a Director, Employee or Consultant (such date that the Option Holder ceases to be a Director, Employee or Consultant, the “Termination Date”), unless the Option Holder ceases to be such as a result of termination for cause, in which case the Expiry Date shall be the Termination Date. |
For the purposes of this section 3.6, the date on which an Option Holder ceases to be a Director, Employee or Consultant, as the case may be, is deemed to be the date of resignation or notice of termination of the Option Holder’s service or employment, as the case may be. Furthermore, an unvested Option (or any portion thereof) which vests on or after the Termination Date (or date of death, if applicable) but prior to the Expiry Date, in the circumstances set forth in clauses (a) and (b) above, other than as a result of termination for cause, shall be exercisable by the Option Holder (or the Option Holder’s Personal Representative, in the event of the death of the Option Holder) until the Expiry Date. An unvested Option (or any portion thereof) held by an Option Holder who ceases to be a Director, Employee or Consultant, as the case may be, as a result of termination for cause, shall cease to vest and shall terminate and be of no further force and effect as at the Termination Date.
(c) | Ceasing to Perform Investor Relations Activities. Notwithstanding paragraph (b) immediately above, in the event that the Option Holder holds his or her Option as an Employee or Consultant retained by the Company to provide Investor Relations Activities, and such Option Holder ceases to be an Employee or Consultant of the Company other than by reason of death, the Expiry Date shall be the date such Option Holder ceases to be an Employee or Consultant of the Company. |
For greater certainty, this section 3.6 shall still apply in the event of that the Option Holder dies or ceases to otherwise be a Director, Employee or Consultant, as the case may be.
3.7 EXERCISE PRICE
The Exercise Price shall be that price per Share, as determined by the Board in its sole discretion, at which an Option Holder may purchase a Share upon the exercise of an Option, provided that, if the Shares are listed for trading on the Exchange, the Exercise Price shall not be less than Discounted Market Price (or, if the Shares are not listed for trading on the Exchange, then the permittable discounted market price on such other exchange or quotation system on which the Shares are then listed or quoted for trading) or such other price as may be required or permitted by the Exchange from time to time. If the Shares are listed on the Exchange and on one or more other exchanges, the Exercise Price must be calculated based upon the applicable closing price or average price of the Shares, as applicable, on the exchange on which the majority of the trading volume of the Shares occurs, subject to the policies of the Exchange.
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3.8 ASSIGNMENT OF OPTIONS
Options may not be assigned or transferred, provided however that the Personal Representatives of an Option Holder may, to the extent permitted by section 4.1, exercise the Option within the Exercise Period.
3.9 | ADJUSTMENTS AND CHANGE OF CONTROL |
(a) | If at any time while an Option remains unexercised with respect to any Shares underlying the Option, the Shares are consolidated, subdivided, converted, exchanged, reclassified or in any way substituted for (any of the foregoing events, a “Share Capital Event”), the Option, to the extent that it has not been exercised, shall be adjusted by the Board in accordance with such Share Capital Event in the manner the Board in its sole discretion deems appropriate. No fractional shares shall be issued upon the exercise of the Options and accordingly, if as a result of the Share Capital Event, an Option Holder would become entitled to a fractional share, such Option Holder shall have the right to purchase only the next lowest whole number of shares and no payment or other adjustment will be made with respect to the fractional interest so disregarded. Additionally, no lots of Shares in an amount less than 100 Shares shall be issued upon the exercise of the Options unless such amount of Shares represents the balance left to be exercised under the Options. |
(b) | If at any time when an Option remains unexercised with respect to any Shares underlying the Option: |
(i) | the Company seeks approval from its shareholders for a transaction which, if completed, would constitute an Acceleration Event; or |
(ii) | a third party makes a bona fide formal offer or proposal to the Company or its shareholders which, if accepted, would constitute an Acceleration Event; |
the Company shall notify the Option Holder in writing of such transaction, offer or proposal as soon as practicable and: (i) the Board may permit the Option Holder to exercise the Option, as to all or any of the Shares in respect of which such Option has not previously been exercised (regardless of any vesting restrictions), during the period specified in the notice (but in no event later than the Expiry Date of the Option), so that the Option Holder may participate in such transaction, offer or proposal; and (ii) the Board may require the acceleration of the time for the exercise of the Option and of the time for the fulfilment of any conditions or restrictions on such exercise. Any proposed acceleration of vesting provisions is subject to the policies and necessary approvals of the Exchange, if applicable.
For the purposes of this Plan an Acceleration Event means:
(i) | the acquisition by any person or any persons acting jointly or in concert, directly or indirectly, of beneficial ownership of more than 50% of the outstanding voting securities of the Company, by means of a take-over bid or otherwise; |
(ii) | any plan of arrangement, amalgamation, consolidation, merger or other business combination of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company would be converted into cash, securities or other property, other than a merger of the Company in which shareholders immediately prior to the merger have the same proportionate ownership of stock of the surviving corporation immediately after the merger; |
(iii) | any sale, lease exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company; |
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(iv) | the approval by the shareholders of the Company of any plan of liquidation or dissolution of the Company; or |
(v) | any other transaction that is deemed to be an “Acceleration Event” for the purposes of this Plan by the Board in its sole discretion. |
(c) | Notwithstanding any other provision of this Plan or the terms of any Option, if at any time when an Option remains unexercised with respect to any Shares underlying the Option the Corporation completes any transaction which constitutes an Acceleration Event, all outstanding unvested Options shall automatically vest. |
3.10 | EXERCISE RESTRICTIONS |
The Board may, at the time an Option is awarded or upon renegotiation of the same, attach restrictions relating to the exercise of the Option, including vesting provisions. Any such restrictions shall be recorded in the applicable Option Agreement.
ARTICLE IV
EXERCISE OF OPTION
4.1 EXERCISE OF OPTION
An Option may be exercised only by the Option Holder or Personal Representative. An Option Holder or Personal Representative may exercise an Option in whole or in part, subject to any applicable exercise restrictions, at any time or from time to time during the Exercise Period up to 5:00 p.m. (Vancouver time) on the Expiry Date by delivering to the Administrator an Exercise Notice, the applicable Option Agreement and a certified cheque or bank draft payable to the Company in an amount equal to the aggregate Exercise Price of the Shares to be purchased pursuant to the exercise of the Option.
4.2 ISSUE OF SHARE CERTIFICATES
As soon as practicable following the receipt of the Exercise Notice, the Administrator shall cause to be delivered to the Option Holder a certificate for the Shares so purchased. If the number of Shares so purchased is less than the number of Shares subject to the Option Certificate surrendered, the Administrator shall forward a new Option Certificate to the Option Holder concurrently with delivery of the aforesaid share certificate for the balance of the Shares available under the Option.
4.3 CONDITION OF ISSUE
The issue of Shares by the Company pursuant to the exercise of an Option is subject to this Plan and compliance with the laws, rules and regulations of all regulatory bodies applicable to the issuance and distribution of such Shares and to the listing requirements of any stock exchange or exchanges on which the Shares may be listed. The Option Holder agrees to comply with all such laws, rules and regulations and agrees to furnish to the Company any information, report and/or undertakings required to comply with and to fully cooperate with the Company in complying with such laws, rules and regulations. The Company shall not be required to issue any Shares to an Option Holder pursuant to the exercise of Options if such issuance would violate the securities laws of any applicable jurisdiction.
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ARTICLE V
ADMINISTRATION
5.1 ADMINISTRATION
The Plan shall be administered by the Board, or an Administrator on the instructions of the Board or such committee of the Board formed in respect of matters relating to the Plan. The Board or such committee may make, amend and repeal at any time and from time to time such regulations not inconsistent with this Plan as it may deem necessary or advisable for the proper administration and operation of this Plan and such regulations shall form part of this Plan. The Board may delegate to the Administrator or any Director, Employee or officer of the Company such administrative duties and powers as it may see fit.
5.2 Withholding Taxes
Subject to the policies of the Exchange, notwithstanding anything else in this Plan, the Company may take such steps as are considered necessary or appropriate for the withholding of any taxes which the Company is required by any law or regulation of any governmental authority whatsoever to withhold in connection with the exercise of an Option including, without limiting the generality of the foregoing, the withholding of all or any portion of any payment or the withholding of the issue of Shares to be issued under the Plan, until such time as the Option Holder has paid the Company for any amount which the Company is required to withhold with respect to such taxes or other amounts. Without limitation to the foregoing, the Board may adopt administrative rules under the Plan which provide for the sale of Shares (or a portion thereof) in the market upon the issuance of such Shares under the provisions of the Plan to satisfy withholding obligations under the Plan.
5.3 INTERPRETATION
The interpretation by the Board or its authorized committee of any of the provisions of this Plan and any determination by it pursuant thereto shall be final and conclusive and shall not be subject to any dispute by any Option Holder. No member of the Board or any person acting pursuant to authority delegated by the Board hereunder shall be liable for any action or determination in connection with this Plan made or taken in good faith and each member of the Board and each such person shall be entitled to indemnification with respect to any such action or determination in the manner provided for by the Company.
ARTICLE VI
AMENDMENT AND TERMINATION
6.1 | AMENDMENT |
(a) | Subject to paragraphs (b) and (c) and any applicable regulatory approval, the Board may from time to time amend this Plan and the terms and conditions of any Option previously awarded or thereafter to be awarded and, without limiting the generality of the foregoing, may make such amendments for the purpose of complying with any changes in any relevant law, Exchange policy, rule or regulation applicable to this Plan, any Option or the Shares, or for any other purpose which the Board may deem desirable or necessary and may be permitted by all relevant laws, rules and regulations, provided always that any such amendment shall not materially impair any right of any Option Holder pursuant to any Option awarded prior to such amendment. |
(b) | Notwithstanding any provisions to the contrary, the Board may only amend the provisions of this Plan relating to the following if the Board obtains the approval of the Shareholders of the Company in respect thereof: |
(i) | persons eligible to be granted Options under this Plan; |
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(ii) | the maximum number or percentage of Shares reserved for issuance upon exercise of Options available under this Plan; |
(iii) | the limitations on grants of Options to any one person, Insiders, Consultants, or persons involved in Investor Relations Activities; |
(iv) | the method for determining the Exercise Price for Options; |
(v) | the maximum term of Options; |
(vi) | the expiry and termination provisions applicable to Options; or |
(vii) | any amendment to this section 6.1. |
(c) | Disinterested shareholders of the Company must approve any amendment to Options held by an Insider at the time of the amendment that would have the effect of decreasing the Exercise Price of such Options. |
6.2 SHAREHOLDER APPROVAL
This Plan must be approved by the Company’s shareholders annually, at a duly called meeting of the shareholders.
6.3 Exchange Hold Period’s and Resale Restrictions
If required by the policies of the Exchange, the certificate representing the Options and any certificate representing Shares issued upon the exercise of such Options (if exercised prior to the expiry of the Exchange Hold Period) will bear the following Exchange Hold Period legend:
“Without prior written approval of TSX Venture Exchange and compliance with all applicable securities legislation, the securities represented by this certificate may not be sold, transferred, hypothecated or otherwise traded on or through the facilities of TSX Venture Exchange or otherwise in Canada or to or for the benefit of a Canadian resident until [insert date that is four months and a day after the distribution date].”
6.4 TERMINATION
The Board may terminate this Plan at any time provided that such termination shall not alter the terms or conditions of any Option or impair any right of any Option Holder pursuant to any Option awarded prior to the date of such termination and notwithstanding such termination, the Company, such Options and such Option Holders shall continue to be governed by the provisions of this Plan.
6.5 AGREEMENT
The Company and every person to whom an Option is awarded hereunder shall be bound by and subject to the terms and conditions of this Plan.
6.6 EFFECTIVE DATE
Subject to receipt of all applicable regulatory approvals, this Plan becomes effective on the date of its approval by the shareholders of the Company.
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Schedule “C” – Audit Committee Mandate
NEW FOUND GOLD CORP.
AUDIT COMMITTEE CHARTER
1. ROLE AND OBJECTIVE
The Audit Committee (the “Committee”) is appointed by and reports to the Board of Directors (the “Board”) of New Found Gold Corp. (the “Corporation”). The Committee assists the Board in fulfilling its oversight responsibilities relating to financial accounting and reporting process and internal controls for the Corporation.
The Committee and its membership shall to the best of its ability, knowledge and acting reasonably, meet all applicable legal, regulatory and listing requirements, including, without limitation, those of any stock exchange on which the Corporation’s shares are listed, the Business Corporations Act (British Columbia) (the “Act”), and all applicable securities regulatory authorities.
2. COMPOSITION
· | The Committee shall be composed of three or more directors as shall be designated by the Board from time to time. |
· | At least two members of the Committee shall be “independent” and each Committee member shall be financially literate (as such terms are defined under applicable securities laws and exchange requirements for audit committee purposes). Each member of the Committee shall be able to read and understand the Corporation’s financial statements, including the Corporation’s statement of financial position, income statement and cash flow statement and any other applicable statements or notes to the financial statements. |
· | Members of the Committee shall be appointed at a meeting of the Board, typically held following the annual shareholders’ meeting. Each member shall serve until his/her successor is appointed unless he/she shall resign or be removed by the Board or he/she shall otherwise cease to be a director of the Corporation. Any member may be removed or replaced at any time by the Board. |
· | Where a vacancy occurs at any time in the membership of the Committee, it may be filled by a vote of a majority of the Board. |
· | The Chair of the Committee may be designated by the Board or, if it does not do so, the members of the Committee may elect a chair by vote of a majority of the full Committee membership. The Chair of the Committee shall be an independent director (as described above). |
· | If the Chair of the Committee is not present at any meeting of the Committee, one of the other members of the Committee present at the meeting shall be chosen by the Committee to preside. |
· | The Chair of the Committee presiding at any meeting shall not have a casting vote. |
· | The Committee shall appoint a secretary (the “Secretary”) who need not be a member of the Committee or a director of the Corporation. The Secretary shall keep minutes of the meetings of the Committee. This role is normally filled by the Secretary of the Corporation. |
3. MEETINGS
· | The Committee shall meet at least quarterly, at the discretion of the Chair or a majority of its members, as circumstances dictate or as may be required by applicable legal or listing requirements, provided that meetings of the Committee shall be convened whenever requested by the auditor that is appointed by the shareholders (the “Independent Auditor”) or any member of the Committee in accordance with the Act. |
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· | Notice of the time and place of every meeting may be given orally, in writing, by facsimile or by e-mail to each member of the Committee, when possible at least 48 hours prior to the time fixed for such meeting. |
· | A member may in any manner waive notice of the meeting. Attendance of a member at the meeting shall constitute waiver of notice of the meeting, except where a member attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting was not lawfully called. |
· | Any member of the Committee may participate in the meeting of the Committee by means of conference telephone or other communication equipment, and the member participating in a meeting pursuant to this paragraph shall be deemed, for purposes hereof, to be present in person at the meeting. |
· | A majority of Committee members, present in person, by video-conference, by telephone or by a combination thereof, shall constitute a quorum. |
· | If within one hour of the time appointed for a meeting of the Committee, a quorum is not present, the meeting shall stand adjourned to the same hour on the next business day following the date of such meeting at the same place. If at the adjourned meeting a quorum as hereinbefore specified is not present within one hour of the time appointed for such adjourned meeting, such meeting shall stand adjourned to the same hour on the next business day following the date of such meeting at the same place. If at the second adjourned meeting a quorum as hereinbefore specified is not present, the quorum for the adjourned meeting shall consist of the members then present. |
· | If and whenever a vacancy shall exist, the remaining members of the Committee may exercise all of its powers and responsibilities so long as a quorum remains on the Committee. |
· | At all meetings of the Committee, every question shall be decided by a majority of the votes cast. In case of an equality of votes, the matter will be referred to the Board for decision. Any decision or determination of the Committee reduced to writing and signed by all of the members of the Committee shall be fully effective as if it had been made at a meeting duly called and held. |
· | The CEO and CFO are expected to be available to attend meetings when requested, but a portion of every meeting will be reserved for in camera discussion without the CEO or CFO, or any other member of management, being present. |
· | The Committee may by specific invitation have other resource persons in attendance such officers, directors and employees of the Corporation and its subsidiaries, and other persons, including the Independent Auditor, as it may see fit, from time to time, to attend at meetings of the Committee. |
· | The Board may at any time amend or rescind any of the provisions hereof, or cancel them entirely, with or without substitution. |
· | The Committee shall have the right to determine who shall and who shall not be present at any time during a meeting of the Committee. |
· | Minutes of Committee meetings shall be sent to all Committee members. |
· | The Chair of the Committee shall report periodically the Committee’s findings and recommendations to the Board. |
4. RESOURCES AND AUTHORITY
· | The Committee shall have access to such officers and employees of the Corporation and its subsidiaries and to such information with respect to the Corporation and its subsidiaries as it considers being necessary or advisable in order to perform its duties and responsibilities. |
· | The Committee shall have the authority to engage and obtain advice and assistance from internal or external legal, accounting or other advisors and resources, as it deems advisable, at the expense of the Corporation. |
· | The Committee shall have the authority to communicate directly with the Independent Auditor. |
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5. RESPONSIBILITIES
A. Chair
To carry out its oversight responsibilities, the Chair of the Committee shall undertake the following:
· | provide leadership to the Committee with respect to its functions as described in this Charter and as otherwise may be appropriate, including overseeing the logistics of the operations of the Committee; |
· | chair meetings of the Committee, unless not present (including in camera sessions), and report to the Board following each meeting of the Committee on the findings, activities and any recommendations of the Committee; |
· | ensure that the Committee meets on a regular basis and at least four times per year; |
· | in consultation with the Committee members, establish a calendar for holding meetings of the Committee; |
· | ensure that Committee materials are available to any director on request; |
· | report annually to the Board on the role of the Committee and the effectiveness of the Committee in contributing to the objectives and responsibilities of the Board as a whole; |
· | foster ethical and responsible decision making by the Committee and its individual members; |
· | encourage Committee members to ask questions and express viewpoints during meetings; |
· | together with the Corporate Governance and Nominating Committee, oversee the structure, composition, membership and activities delegated to the Committee from time to time; |
· | ensure that resources and expertise are available to the Committee so that it may conduct its work effectively and efficiently |
· | attend each meeting of shareholders to respond to any questions from shareholders as may be put to the Chair; and |
· | perform such other duties and responsibilities as may be delegated to the Chair by the Board from time to time. |
B. The Committee
The Committee has the authority to conduct any investigation appropriate to its responsibilities, and it may request the Independent Auditor as well as any officer of the Corporation, or outside counsel for the Corporation, to attend a meeting of the Committee or to meet with any members of, or advisors to, the Committee. The Committee shall have unrestricted access to the books and records of the Corporation and has the authority to retain, at the expense of the Corporation, special legal, accounting, or other consultants or experts to assist in the performance of the Committee’s duties.
The Committee is hereby delegated the duties and powers specified in Section 225 of the Act and, without limiting these duties and powers, the Committee will carry out the following responsibilities:
Financial Accounting and Reporting Process and Internal Controls
· | review the annual audited financial statements and report thereon to the Board and recommend to the Board whether or not same should be approved prior to their being filed with the appropriate regulatory authorities. The Committee shall also review and approve the interim financial statements prior to their being filed with the appropriate regulatory authorities. The Committee shall discuss significant issues regarding accounting principles, practices, and judgments of management with management and the Independent Auditor as and when the Committee deems it appropriate to do so. The Committee shall satisfy itself that the information contained in the annual audited financial statements is not significantly erroneous, misleading or incomplete and that the audit function has been effectively carried out. |
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· | assess the integrity of internal controls and financial reporting procedures and ensure implementation of appropriate controls and procedures. |
· | review the financial statements, management’s discussion and analysis relating to annual and interim financial statements, and press releases and any other public disclosure documents containing financial disclosure before the Corporation publicly discloses this information. |
· | be satisfied that adequate procedures are in place for the review of the Corporation’s public disclosure of financial information extracted or derived from the Corporation’s financial statements, and periodically assess the adequacy of these procedures. |
· | meet no less frequently than annually with the Independent Auditor and the Chief Financial Officer or, in the absence of a Chief Financial Officer, with the officer of the Corporation in charge of financial matters, to review accounting practices, internal controls and such other matters as the Committee deems appropriate. |
· | inquire of management and the Independent Auditor about significant risks or exposures, both internal and external, to which the Corporation may be subject, and assess the steps management has taken to minimize such risks. |
· | review the post-audit or management letter containing the recommendations of the Independent Auditor and management’s response and subsequent follow-up to any identified weaknesses. |
· | oversee the Corporation’s plans to adopt changes to accounting standards and related disclosure obligations. |
· | in consultation with the Corporate Governance and Nominating Committee, ensure that there is an appropriate standard of corporate conduct including, if necessary, adopting and overseeing a corporate code of ethics for senior financial personnel. |
· | establish procedures for: |
· | the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters; and |
· | the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters. |
· | provide oversight to related party transactions entered into by the Corporation. |
Independent Auditor
· | recommend to the Board for approval by shareholders, the selection, appointment and compensation of the Independent Auditor; |
· | be directly responsible for oversight of the Independent Auditor and the Independent Auditor shall report directly to the Committee. |
· | with reference to the procedures outlined separately in “Procedures for Approval of Non-Audit Services” (attached hereto as Appendix `A’), pre-approve all audit and non-audit services not prohibited by law to be provided by the Independent Auditor. |
· | review the Independent Auditor’s audit plan, including scope, procedures, timing and staffing of the audit. |
· | review the results of the annual audit with the Independent Auditor, including matters related to the conduct of the audit, and receive and review the auditor’s interim review reports. |
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· | review fees paid by the Corporation to the Independent Auditor and other professionals in respect of audit and non-audit services on an annual basis. |
Other Responsibilities
· | perform any other activities consistent with this Charter and governing law, as the Committee or the Board deems necessary or appropriate; |
· | institute and oversee special investigations, as needed; and |
· | review and assess the adequacy of this Charter annually and submit any proposed revisions to the Board for approval. |
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Appendix A
Policy for Approval of Non Audit Services
1. | In the event that New Found Gold Corp. (the “Corporation”) or a subsidiary of the Corporation wishes to retain the services of the Corporation’s Independent Auditor for services other than the annual audit (e.g. tax compliance, tax advice or tax planning, to meet the requirements of a regulatory filing or due diligence, to receive advice on various matters, etc.), the Chief Financial Officer of the Corporation shall consult with the Audit Committee of the Board of Directors (the “Committee”), who shall have the authority to approve or disapprove such non-audit services. The Chair of the Committee has the authority to approve or disapprove such non-audit services on behalf of the Committee, and shall advise Committee of such pre-approvals no later than the time of the next meeting of the Committee following such pre-approval having been given. |
2. | The Committee, or the Chair of the Committee, as appropriate, shall confer with the Independent Auditor regarding the nature of the services to be provided and shall not approve any services that would be considered to impair the independence of the Independent Auditor. For greater clarity, the following is a non-exhaustive list of the categories of non-audit services that would be considered to impair the independence of the Independent Auditor: |
(a) | bookkeeping or other services related to or requiring management decisions in connection with the Corporation’s accounting records or financial statements; |
(b) | financial information systems design and implementation; |
(c) | appraisal or valuation services, fairness opinion or contributions-in-kind reports; |
(d) | actuarial services; |
(e) | internal audit outsourcing services; |
(f) | management functions; |
(g) | human resources; |
(h) | broker or dealer, investment adviser or investment banking services; |
(i) | legal services; |
(j) | expert services unrelated to the audit; and |
(k) | any other service that the Canadian Public Accountability Board or any other applicable regulatory authority determines is impermissible. |
3. | The Chief Financial Officer of the Corporation shall maintain a record of non-audit services approved by the Chair of the Committee or the Committee for each fiscal year and provide a report to the Committee any services pre-approved since the last report, at each meeting and no less frequently than on a quarterly basis. |
4. | In accordance with the requirements set forth under the “Exemption for minimal non-audit services” provided by Section 2.3(4) of National Instrument 52-110 — Audit Committees, whereby the Independent Auditor has commenced a service and: |
(a) | the Corporation or the subsidiary entity of the Corporation, as the case may be, and the Independent Auditor did not recognize the services as non-audit services at the time of the engagement; |
(b) | once recognized as non-audit services, the services are promptly brought to the attention of the Committee and approved by the Committee prior to the completion of the audit; and |
(c) | the aggregate fees for the non-audit services not previously approved are immaterial in comparison to the aggregate fees paid by the Corporation to the Corporation’s Independent Auditor during the financial year in which the services are provided, such services shall be exempted from the requirements for pre-approval of non-audit services set out in this Policy. |
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Exhibit 99.14
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
September 15, 2021
Item 3: | News Release |
A news release was disseminated on September 15, 2021 through Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The company announced recently received assay results from twenty-nine holes drilled at the Keats Zone (“Keats”), located along the Appleton Fault Zone. These holes were completed as part of the Company’s ongoing 200,000m diamond drill program at its 100% owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached as schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company at 604-562-9664 or croberts@newfoundgold.ca.
Item 9: | Date of Report |
September 15, 2021
Schedule "A" |
New Found Intercepts More High-Grade Gold at Keats; Extends Zone 200m Vertically Towards Surface
Vancouver, BC, Sept 15, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce recently received assay results from twenty-nine holes drilled at the Keats Zone (“Keats”), located along the Appleton Fault Zone. These holes were completed as part of the Company’s ongoing 200,000m diamond drill program at its 100% owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Highlights
• | Highlight intervals are summarized below. Additional results are provided in Table 2. |
Hole No. |
From
(m) |
To (m) |
Interval
(m)* |
Au (g/t) | Zone | |||||||||||||
NFGC-21-145 | 39.00 | 41.50 | 2.50 | 21.29 | Keats Main | |||||||||||||
NFGC-21-170 | 101.55 | 106.40 | 4.85 | 31.80 | Keats Main | |||||||||||||
NFGC-21-184 | 140.25 | 143.25 | 3.00 | 36.52 | Keats Main | |||||||||||||
NFGC-21-250 | 170.75 | 177.80 | 7.05 | 32.65 | Keats Main | |||||||||||||
NFGC-21-251 | 227.00 | 229.00 | 2.00 | 137.49 | Keats Main | |||||||||||||
NFGC-21-257 | 229.50 | 232.55 | 3.05 | 24.12 | Keats Main | |||||||||||||
NFGC-21-310 | 279.25 | 281.45 | 2.20 | 104.59 | Keats Main |
* Note that the true width of the mineralization is uncertain, but host structures are interpreted to be steeply dipping implying true widths in the range of 85% to 95% of reported intercepts. Intervals are calculated at a 1 g/t Au cut-off grade and minimum width of 2m; grades have not been capped in the averaging.
• | The interval of 104.59 g/t Au over 2.20m in NFGC-21-310 is the furthest south drill interval reported to date along the south-westerly plunging core dilatational zone extending drill definition of this zone (see Figures 1 and 2). |
• | Recent intercept highlights of 31.80 g/t Au over 4.85m in NFGC-21-170 and 36.52 g/t Au over 3.00m in NFGC-21-184 up dip of the core dilatational zone within the Keats fault demonstrate strong vertical continuity of the Keats Main Zone to surface. |
• | The Keats high-grade zone vertical profile now exceeds 200m up dip of the core dilatational zone and is open to surface and along strike to the northeast and southwest. |
• | Drill hole NFGC-21-257 intersected a new zone of high-grade gold mineralization in the hanging wall of the Keats fault near surface; the interval graded 9.18g/t Au over 2.70m. |
• | Future exploration at Keats will continue to expand the Keats Main zone along strike and down plunge but also focus on targeting specific zones in both the hanging wall and foot wall of the Keats fault. |
NEWFOUND GOLD CORP. | |
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 1 |
Denis Laviolette, President of New Found, stated: "The high-grade zones along the Appleton Fault continue to see significant expansion. Today’s announcement demonstrates further continuity of high-grade gold mineralization at Keats including between the core dilatational zone and surface; a vertical distance of 200m. Last week we announced that we doubled the drilled depth of the high-grade Lotto vein system with strong vertical continuity, and we are now seeing similar vertical continuity at Keats above the plunging dilation zone. We are pleased to see high-grade zones that start at surface and extend for these distances along strike and to depth, remaining open in all directions for further expansion. The addition of a new hanging wall zone at Keats near surface adds to the growing list of discoveries made this past year along the Appleton Fault. These discoveries continue to support our belief in the high potential for additional discoveries along approximately 7.8km of strike on the Appleton Fault, within a prospective corridor of approximately 500m on each side of the Appleton Fault.”
NEWFOUND GOLD CORP. | |
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 2 |
Figure 1. Keats Plan View
NEWFOUND GOLD CORP. | |
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 3 |
Figure 2. Keats Long Section
NEWFOUND GOLD CORP. | |
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 4 |
Figure 3. 3D Keats Composite Cross-Section (A to A’ looking north, 150m clipping)
Drill-hole Details
Hole No. |
From
(m) |
To (m) |
Interval
(m)* |
Au (g/t) | Zone | |||||||||||||
NFGC-21-92 | 176.00 | 178.00 | 2.00 | 1.92 | Keats South | |||||||||||||
NFGC-21-120** | 9.65 | 21.70 | 12.05 | 12.65 | ||||||||||||||
Including | 9.65 | 13.25 | 3.60 | 35.76 | ||||||||||||||
And** | 22.90 | 25.00 | 2.10 | 1.33 | Keats Main | |||||||||||||
And** | 28.20 | 33.00 | 4.80 | 1.98 | ||||||||||||||
And** | 36.00 | 38.00 | 2.00 | 2.66 | ||||||||||||||
And** | 40.30 | 46.00 | 5.70 | 5.16 | ||||||||||||||
And | 95.00 | 98.00 | 3.00 | 1.69 | Keats FW | |||||||||||||
NFGC-21-140 | 95.50 | 103.45 | 7.95 | 3.59 | Keats Main | |||||||||||||
Including | 100.15 | 102.45 | 2.30 | 9.69 | ||||||||||||||
And | 164.25 | 166.60 | 2.35 | 1.01 | Keats FW | |||||||||||||
NFGC-21-145 | 39.00 | 41.50 | 2.50 | 21.29 | Keats Main | |||||||||||||
And | 81.00 | 83.35 | 2.35 | 13.04 | Keats FW | |||||||||||||
NFGC-21-148A | 233.50 | 256.35 | 22.85 | 1.15 | Keats Main | |||||||||||||
NFGC-21-149 | 48.05 | 53.60 | 5.55 | 2.46 | ||||||||||||||
And | 62.55 | 67.35 | 4.80 | 9.22 | Keats Main | |||||||||||||
And | 72.80 | 77.45 | 4.65 | 1.82 | ||||||||||||||
NFGC-21-163 | 73.80 | 85.40 | 11.60 | 4.92 | Keats Main |
NEWFOUND GOLD CORP. | |
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 5 |
Hole No. |
From
(m) |
To (m) |
Interval
(m)* |
Au (g/t) | Zone | |||||||||||||
Including | 77.65 | 80.65 | 3.00 | 13.30 | ||||||||||||||
And | 154.00 | 156.75 | 2.75 | 1.40 | Keats FW | |||||||||||||
NFGC-21-164 | 247.80 | 250.00 | 2.20 | 1.37 | ||||||||||||||
And | 261.00 | 263.00 | 2.00 | 1.23 | Keats Main | |||||||||||||
And | 267.45 | 270.00 | 2.55 | 1.65 | ||||||||||||||
And | 272.30 | 277.20 | 4.90 | 1.77 | ||||||||||||||
NFGC-21-170 | 70.00 | 72.70 | 2.70 | 1.96 | ||||||||||||||
And | 90.70 | 93.00 | 2.30 | 1.02 | Keats Main | |||||||||||||
And | 101.55 | 106.40 | 4.85 | 31.80 | ||||||||||||||
NFGC-21-173 | 115.60 | 117.80 | 2.20 | 1.39 | Keats Main | |||||||||||||
And | 126.90 | 128.95 | 2.05 | 4.09 | ||||||||||||||
NFGC-21-174 | 273.60 | 277.05 | 3.45 | 1.79 | Keats Main | |||||||||||||
And | 300.00 | 306.00 | 6.00 | 1.57 | ||||||||||||||
And | 340.90 | 343.00 | 2.10 | 1.85 | Keats FW | |||||||||||||
NFGC-21-184 | 140.25 | 143.25 | 3.00 | 36.52 | Keats Main | |||||||||||||
And | 151.30 | 154.00 | 2.70 | 1.02 | ||||||||||||||
NFGC-21-188A | NSV | Keats Main | ||||||||||||||||
NFGC-21-194 | NSV | Keats North | ||||||||||||||||
NFGC-21-198 | 141.85 | 144.30 | 2.45 | 1.03 | Keats Main | |||||||||||||
And | 154.50 | 156.55 | 2.05 | 4.23 | ||||||||||||||
NFGC-21-200 | NSV | Keats Main | ||||||||||||||||
NFGC-21-203 | 157.35 | 162.15 | 4.80 | 2.71 | ||||||||||||||
Including | 157.35 | 159.90 | 2.55 | 4.14 | Keats Main | |||||||||||||
And | 173.50 | 176.00 | 2.50 | 1.08 | ||||||||||||||
And | 242.60 | 245.65 | 3.05 | 1.12 | Keats FW | |||||||||||||
NFGC-21-212 | 71.60 | 74.75 | 3.15 | 2.64 | Keats Main | |||||||||||||
And | 90.00 | 92.65 | 2.65 | 1.77 | ||||||||||||||
NFGC-21-222 | 242.00 | 245.70 | 3.70 | 1.20 | ||||||||||||||
And | 260.00 | 262.85 | 2.85 | 1.33 | Keats Main | |||||||||||||
And | 290.95 | 293.20 | 2.25 | 1.19 | ||||||||||||||
And | 334.95 | 337.00 | 2.05 | 1.51 | ||||||||||||||
NFGC-21-223 | 21.00 | 23.65 | 2.65 | 1.05 | Keats Main | |||||||||||||
And | 88.40 | 90.60 | 2.20 | 1.23 | Keats FW | |||||||||||||
NFGC-21-227 | 42.30 | 44.30 | 2.00 | 1.71 | Keats Main | |||||||||||||
NFGC-21-229 | NSV | Keats Main | ||||||||||||||||
NFGC-21-236 | 48.75 | 51.05 | 2.30 | 2.28 | Keats Main | |||||||||||||
And | 61.65 | 64.00 | 2.35 | 1.91 | ||||||||||||||
NFGC-21-247 | 43.55 | 45.90 | 2.35 | 1.01 | Keats Main |
NEWFOUND GOLD CORP. | |
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 6 |
Hole No. |
From
(m) |
To (m) |
Interval
(m)* |
Au (g/t) | Zone | |||||||||||||
And | 51.35 | 62.00 | 10.65 | 3.37 | ||||||||||||||
Including | 52.85 | 55.05 | 2.20 | 10.10 | ||||||||||||||
And | 64.40 | 66.50 | 2.10 | 1.46 | ||||||||||||||
And | 77.00 | 79.60 | 2.60 | 1.31 | ||||||||||||||
And | 83.55 | 85.55 | 2.00 | 1.30 | ||||||||||||||
And | 90.65 | 93.00 | 2.35 | 1.05 | Keats FW | |||||||||||||
And | 160.00 | 162.05 | 2.05 | 2.02 | ||||||||||||||
NFGC-21-250 | 170.75 | 177.80 | 7.05 | 32.65 | ||||||||||||||
Including | 171.60 | 175.90 | 4.30 | 52.36 | Keats Main | |||||||||||||
And | 183.05 | 188.80 | 5.75 | 2.01 | ||||||||||||||
NFGC-21-251 | 227.00 | 229.00 | 2.00 | 137.49 | Keats Main | |||||||||||||
NFGC-21-257 | 62.30 | 65.00 | 2.70 | 9.18 | Keats HW | |||||||||||||
And | 229.50 | 236.00 | 6.50 | 16.04 | Keats Main | |||||||||||||
Including | 229.50 | 232.55 | 3.05 | 24.12 | ||||||||||||||
NFGC-21-283 | 235.40 | 237.55 | 2.15 | 1.05 | ||||||||||||||
And | 239.30 | 246.85 | 7.55 | 1.21 | ||||||||||||||
And | 253.40 | 255.45 | 2.05 | 1.08 | Keats Main | |||||||||||||
And | 268.55 | 270.95 | 2.40 | 1.10 | ||||||||||||||
And | 272.35 | 274.55 | 2.20 | 6.96 | ||||||||||||||
NFGC-21-310 | 279.25 | 281.45 | 2.20 | 104.59 | Keats Main |
Table 2: Summary of results reported in this release
* Note that the true width of the mineralization is uncertain, but host structures are interpreted to be steeply dipping implying true widths in the range of 85% to 95% of reported intercepts. Intervals are calculated at a 1 g/t Au cut-off grade and minimum width of 2m, grades have not been capped in the averaging. ** Results released on July 5, 2021, from NFGC-21-120 updated with additional secondary zone results.
Hole No. |
Azimuth
(°) |
Dip (°) |
Length
(m) |
UTM E | UTM N | |||||||||||||||
NFGC-21-92 | 300 | -45 | 346 | 657836 | 5427049 | |||||||||||||||
NFGC-21-120 | 300 | -45 | 109 | 658228 | 5427529 | |||||||||||||||
NFGC-21-140 | 300 | -45 | 182 | 658159 | 5427410 | |||||||||||||||
NFGC-21-145 | 300 | -45 | 209 | 658117 | 5427435 | |||||||||||||||
NFGC-21-148A | 300 | -45 | 333 | 658182 | 5427224 | |||||||||||||||
NFGC-21-149 | 300 | -45 | 141 | 658158 | 5427455 | |||||||||||||||
NFGC-21-163 | 300 | -45 | 233 | 658092 | 5427392 | |||||||||||||||
NFGC-21-164 | 300 | -45 | 288 | 658204 | 5427216 | |||||||||||||||
NFGC-21-170 | 300 | -45 | 171 | 658114 | 5427379 | |||||||||||||||
NFGC-21-173 | 300 | -45 | 188 | 658135 | 5427367 | |||||||||||||||
NFGC-21-174 | 300 | -45 | 366 | 658205 | 5427215 |
NEWFOUND GOLD CORP. | |
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 7 |
Hole No. |
Azimuth
(°) |
Dip (°) |
Length
(m) |
UTM E | UTM N | |||||||||||||||
NFGC-21-184 | 300 | -45 | 196 | 658157 | 5427354 | |||||||||||||||
NFGC-21-188A | 300 | -45 | 269 | 658292 | 5427337 | |||||||||||||||
NFGC-21-194 | 300 | -45 | 365 | 658587 | 5427560 | |||||||||||||||
NFGC-21-198 | 300 | -45 | 227 | 658164 | 5427343 | |||||||||||||||
NFGC-21-200 | 297 | -55 | 395 | 658170 | 5427203 | |||||||||||||||
NFGC-21-203 | 300 | -45 | 314 | 658144 | 5427333 | |||||||||||||||
NFGC-21-212 | 298.5 | -45.5 | 194 | 658126 | 5427401 | |||||||||||||||
NFGC-21-222 | 297 | -55 | 350 | 658133 | 5427195 | |||||||||||||||
NFGC-21-223 | 299 | -45.5 | 112 | 658241 | 5427551 | |||||||||||||||
NFGC-21-227 | 299 | -45.5 | 146 | 658253 | 5427545 | |||||||||||||||
NFGC-21-229 | 297 | -55.5 | 356 | 658130 | 5427165 | |||||||||||||||
NFGC-21-236 | 299 | -45.5 | 251 | 658130 | 5427457 | |||||||||||||||
NFGC-21-247 | 299 | -45.5 | 182 | 658147 | 5427476 | |||||||||||||||
NFGC-21-250 | 298 | -46 | 205 | 658207 | 5427368 | |||||||||||||||
NFGC-21-251 | 118 | -75 | 334 | 657951 | 5427310 | |||||||||||||||
NFGC-21-257 | 118 | -78 | 346 | 657951 | 5427310 | |||||||||||||||
NFGC-21-283 | 300 | -45 | 392 | 658148 | 5427216 | |||||||||||||||
NFGC-21-310 | 300 | -45 | 386 | 658112 | 5427179 |
Table 3: Details of drill holes reported in this release
NEWFOUND GOLD CORP. | |
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 8 |
Photos of Drill Core
Figure 4. Photos of mineralization from NFGC-21-310, approximately 279m down hole depth
Note that these photos are not intended to be representative of gold mineralization in hole NFGC-21-310.
Queensway 200,000m Drill Program Update
Approximately 44 percent of the 200,000 meters have been drilled to date with approximately 20,000 meters of core pending assay results. Nine core rigs are currently operating, with a tenth scheduled to start in Q3 2021.
Sampling, Sub-sampling and Laboratory
True widths of the intercepts reported in this press release have yet to be determined but are estimated to be 85% to 95% of reported core lengths. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cut-off of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia, or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
NEWFOUND GOLD CORP. | |
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 9 |
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer, and a Qualified Person as defined under National Instrument 43-101. Mr. Matheson consents to the publication of this news release dated Sept 15, 2021, by New Found. Mr. Matheson certifies that this news release fairly and accurately represents the information for which he is responsible.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. The Company is currently undertaking a 200,000m drill program at Queensway. Nine rigs are currently in operation at Queensway with the drill count planned to increase to ten rigs in Q3 2021. With a current working capital balance of approximately $111 million, New Found is well funded for this program.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company, please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: "Craig Roberts"
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
NEWFOUND GOLD CORP. | |
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 10 |
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions
This press release contains certain "forward-looking statements" within the meaning of Canadian securities legislation, relating to further exploration and drilling on the Company’s Queensway gold project in Newfoundland, interpretation of results of the drilling program and funding of the drilling program. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words "expects," "plans," "anticipates," "believes," "intends," "estimates," "projects," "aims," "potential," "goal," "objective," "prospective," and similar expressions, or that events or conditions "will," "would," "may," "can," "could" or "should" occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management's beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated with possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company's exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company's business and prospects. The reader is urged to refer to the Company's Annual Information Form and Management’s discussion and Analysis, publicly available through the Canadian Securities Administrators' System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
NEWFOUND GOLD CORP. | |
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 11 |
Exhibit 99.15
FORM 51-102F3 | |
MATERIAL CHANGE REPORT | |
Item 1: | Name and Address of Company |
New Found Gold Corp. (the “Company”) | |
Suite 1430, 800 West Pender Street | |
Vancouver, British Columbia | |
Canada V6C 2V6 | |
Item 2: | Date of Material Change |
September 8, 2021 | |
Item 3: | News Release |
A news release was disseminated on September 8, 2021 through Canada Newswire and a copy was subsequently filed on SEDAR. | |
Item 4: | Summary of Material Change |
The company provided announced recently received assay results from seven holes drilled at the Lotto Zone (“Lotto”), located approximately 2 km north of the Keats Zone discovery. These holes were completed as part of the Company’s ongoing 200,000 m diamond drill program at its 100% owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 5 km west of Gander, Newfoundland. | |
Item 5: | Full Description of Material Change |
Please see the news release attached as schedule “A” for a full description of the material change. | |
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable. | |
Item 7: | Omitted Information |
Not applicable. | |
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company at 604-562-9664 or croberts@newfoundgold.ca. | |
Item 9: | Date of Report |
September 8, 2021 |
Schedule "A"
New Found
Intercepts 111.4 g/t Au over 2.65 m and
76.8 g/t Au over 2.80 m at Lotto Main Vein:
Doubles the Vertical Depth to 200 m
Vancouver, BC, Sept 8, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce recently received assay results from seven holes drilled at the Lotto Zone (“Lotto”), located approximately 2 km north of the Keats Zone discovery. These holes were completed as part of the Company’s ongoing 200,000 m diamond drill program at its 100% owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Highlights
• | Highlight intervals are summarized below. Additional results are provided in Table 2. |
Hole No. |
From
(m) |
To (m) |
Interval
(m)* |
Au (g/t) | Zone | |||||||||||||
NFGC-21-233 | 169.20 | 171.85 | 2.65 | 111.36 | Lotto Main | |||||||||||||
NFGC-21-278 | 131.35 | 133.40 | 2.05 | 15.54 | Lotto Main | |||||||||||||
NFGC-21-311 | 294.65 | 297.45 | 2.80 | 76.81 | Lotto Main | |||||||||||||
Including | 294.65 | 296.55 | 1.90 | 112.51 |
* Note that the true width of the mineralization is uncertain, but host structures are interpreted to be steeply dipping implying true widths in the range of 80% to 90% of reported intercepts. Intervals are calculated at a 1 g/t Au cut-off grade and minimum width of 2 m; grades have not been capped in the averaging.
• | The interval of 76.81 g/t Au over 2.80 m in NFGC-21-311 is almost 90 m vertically deeper than the previously reported interval in NFGC-21-201 which yielded 683.1 g/t Au over 2.45 m (see press release dated June 23, 2021) and has doubled the depth of the Main Vein to over 200 m vertically, starting at surface and open to depth. |
• | The high-grade intervals reported to date occur in a steeply (78°) east-dipping vein that is part of a network of north-south striking vein arrays that are spatially associated with the Lotto Baseline Fault Zone, a splay of the Appleton Fault Zone. Recent drilling has defined the vein network over a 340 m x 325 m area that remains open in all directions (see the plan view, 2D cross section, 3D composite cross section and long section in Figures 1, 2, 3 and 4 below). |
• | The Company continues to test new targets at Lotto with current exploration focused on extending the Lotto Main Vein to depth and along strike. |
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 1 |
• | The mineralization drilled at Lotto is often characterized by massive and vuggy textured veins containing very fine visible gold, arsenopyrite, chalcopyrite, boulangerite and ammonium-illite which are common traits found in epizonal systems, similar to the high-grade gold mineralization encountered at Keats (Figure 5). |
Greg Matheson, P.Geo. COO of New Found, stated: "The Lotto Main Vein structure continues to show strong continuity and consistent widths of high-grade gold mineralization from two to ten plus meters width downhole (note that true widths are estimated at 80% to 90% of reported drill interval widths). While numerous secondary mineralized structures exist outside the Main Vein structure, we have started to target expansion of the Main Vein at depth with significant intercepts of 111.36 g/t over 2.65 m (NFGC-21-233) and 76.81 g/t Au over 2.80 m (NFGC-21-311). NFGC-21-311 is the deepest hole drilled to date and demonstrates significant persistence of continuity of the Lotto Main Vein to depth. The grades and widths at Lotto are outstanding and we are very excited to be consistently hitting these high-grade intervals as we step out to depth and along strike.”
Figure 1. Lotto Plan View
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 2 |
Figure 2. Lotto Long Section (see B-B' on Plan View, Figure 1)
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 3 |
Figure 3. Lotto Cross Section (looking north, 12.5 m clipping, see A-A’ on Plan View, Figure 1)
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 4 |
Figure 4. 3D Lotto Composite Cross-Section (looking north, 325 m clipping)
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 5 |
Drill-hole Details
Hole No. |
From
(m) |
To (m) |
Interval
(m)* |
Au (g/t) | Zone | |||||||||||||
NFGC-21-109 | 146.55 | 148.60 | 2.05 | 6.17 | Lotto | |||||||||||||
And** | 152.70 | 161.50 | 8.80 | 19.30 | Lotto Main | |||||||||||||
Including | 154.20 | 157.40 | 3.20 | 51.30 | ||||||||||||||
And | 179.00 | 181.00 | 2.00 | 1.03 | Lotto | |||||||||||||
NFGC-21-205 | 216.00 | 219.00 | 3.00 | 4.75 | Lotto Main | |||||||||||||
NFGC-21-211 | NSV | Lotto Main | ||||||||||||||||
NFGC-21-233 | 169.20 | 171.85 | 2.65 | 111.36 | Lotto Main | |||||||||||||
NFGC-21-278 | 131.35 | 133.40 | 2.05 | 15.54 | Lotto Main | |||||||||||||
NFGC-21-285 | 163.40 | 167.30 | 3.90 | 6.99 | Lotto Main | |||||||||||||
NFGC-21-311 | 294.65 | 297.45 | 2.80 | 76.81 | Lotto Main | |||||||||||||
Including | 294.65 | 296.55 | 1.90 | 112.51 |
Table 2: Summary of results reported in this release
* Note that the true width of the mineralization is uncertain, but host structures are interpreted to be steeply dipping implying true widths in the range of 80% to 90% of reported intercepts. Intervals are calculated at a 1 g/t Au cut-off grade and minimum width of 2m, grades have not been capped in the averaging. ** Results released on March 23, 2021, from NFGC-21-109 updated with additional secondary zone results.
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-21-109 | 300 | -45 | 252 | 659012 | 5428912 | |||||||||||||||
NFGC-21-205 | 299 | -46 | 254 | 659059 | 5428890 | |||||||||||||||
NFGC-21-211 | 297 | -45.5 | 426 | 658943 | 5428864 | |||||||||||||||
NFGC-21-233 | 298 | -45.5 | 342 | 659024 | 5428935 | |||||||||||||||
NFGC-21-278 | 299 | -45.5 | 207 | 658984 | 5428985 | |||||||||||||||
NFGC-21-285 | 298 | -45.5 | 201 | 659006 | 5428970 | |||||||||||||||
NFGC-21-311 | 299 | -45.5 | 321 | 659107 | 5428914 |
Table 3: Details of drill holes reported in this release
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 6 |
Photos of Drill Core
Figure 5. Photos of mineralization from NFGC-21-311, approximately 296 m down hole depth
Note that these photos are not intended to be representative of gold mineralization in hole NFGC-21-311.
Queensway 200,000m Drill Program Update
Approximately 38 percent of the 200,000 meters have been drilled to date with approximately 21,000 meters of core pending assay results. Nine core rigs are currently operating, with a tenth scheduled to start in Q3 2021.
Sampling, Sub-sampling and Laboratory
True widths of the intercepts reported in this press release have yet to be determined but are estimated to be 80% to 90% of reported core lengths. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cut-off of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia, or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality
Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 7 |
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer, and a Qualified Person as defined under National Instrument 43-101. Mr. Matheson consents to the publication of this news release dated Sept 8, 2021, by New Found. Mr. Matheson certifies that this news release fairly and accurately represents the information for which he is responsible.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. The Company is currently undertaking a 200,000 m drill program at Queensway. Nine rigs are currently in operation at Queensway with the drill count planned to increase to ten rigs in Q3 2021. With a current working capital balance of approximately $115 million, New Found is well funded for this program.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company, please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: "Craig Roberts"
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 8 |
Forward-Looking Statement Cautions
This press release contains certain "forward-looking statements" within the meaning of Canadian securities legislation, relating to further exploration and drilling on the Company’s Queensway gold project in Newfoundland, interpretation of results of the drilling program and funding of the drilling program. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words "expects," "plans," "anticipates," "believes," "intends," "estimates," "projects," "aims," "potential," "goal," "objective," "prospective," and similar expressions, or that events or conditions "will," "would," "may," "can," "could" or "should" occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management's beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated with possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company's exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company's business and prospects. The reader is urged to refer to the Company's Annual Information Form and Management’s discussion and Analysis, publicly available through the Canadian Securities Administrators' System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 9 |
Exhibit 99.16
EARLY WARNING REPORT
(Form 62-103F1)
Made Pursuant To
NATIONAL INSTRUMENT 62-103
The Early Warning System and Related Take-Over Bid and
Insider Reporting Issues
Item 1 – Security and Reporting Issuer
1.1 | State the designation of securities to which this report relates and the name and address of the head office of the issuer of the securities. |
Securities: | Common Shares (“Shares”) |
Issuer: | New Found Gold Corp., (the “Corporation”) | |
800 West Pender Street, Suite 1430 | ||
Vancouver, BC | ||
V6C 2V6 |
1.2 | State the name of the market in which the transaction or other occurrence that triggered the requirement to file this report took place. |
Not applicable. See item 2.2.
Item 2 – Identity of the Acquiror
2.1 | State the name and address of the acquiror. |
2176423 Ontario Ltd. (“2176423 Ontario”)
200 Bay Street, Suite 2600
Royal Bank Plaza, South Tower
Toronto, Ontario M5J 2J1
2.2 | State the date of the transaction or other occurrence that triggered the requirement to file this report and briefly describe the transaction or other occurrence. |
On April 8, 2021, Eric Sprott and 2176423 Ontario, a corporation which he beneficially owns, acquired (the “Acquisition”) ownership of 2,857,000 Shares through a concurrent private placement from the Corporation for 1,900,000 flow-through Shares and a purchase by share purchase agreement for 957,000 Shares.
1
2.3 | State the names of any joint actors. |
Not applicable. See item 2.2.
Item 3 – Interest in Securities of the Reporting Issuer
3.1 | State the designation and number or principal amount of securities acquired or disposed of that triggered the requirement to file the report and the change in the acquiror’s securityholding percentage in the class of securities. |
The Acquisition, being the first since New Found Gold’s initial public offering, requires the filing of an early warning report. See items 2.2 and 3.4
3.2 | State whether the acquiror acquired or disposed ownership of, or acquired or ceased to have control over, the securities that triggered the requirement to file the report. |
Mr. Sprott acquired beneficial ownership of the Shares. See item 2.2.
3.3 | If the transaction involved a securities lending arrangement, state that fact. |
Not applicable.
3.4 | State the designation and number or principal amount of securities and the acquiror’s securityholding percentage in the class of securities, immediately before and after the transaction or other occurrence that triggered the requirement to file this report. |
Prior to the Acquisition, Mr. Sprott beneficially owned and controlled 25,101,300 shares representing approximately 16.8% of the outstanding Shares on a non-diluted basis.
After giving effect to the acquisition, Mr. Sprott beneficially owns and controls 27,958,300 Shares representing approximately 18.4% issued and outstanding Shares on a non-diluted basis.
3.5 | State the designation and number or principal amount of securities and the acquiror’s securityholding percentage in the class of securities referred to in Item 3.4 over which |
(a) | the acquiror, either alone or together with any joint actors, has ownership and control, |
See item 3.4.
(b) | the acquiror, either alone or together with any joint actors, has ownership but control is held by persons or companies other than the acquiror or any joint actor, and |
Not applicable.
2
(c) | the acquiror, either alone or together with any joint actors, has exclusive or shared control but does not have ownership. |
Not applicable.
3.6 | If the acquiror or any of its joint actors has an interest in, or right or obligation associated with, a related financial instrument involving a security of the class of securities in respect of which disclosure is required under this item, describe the material terms of the related financial instrument and its impact on the acquiror’s securityholdings. |
Not applicable.
3.7 | If the acquiror or any of its joint actors is a party to a securities lending arrangement involving a security of the class of securities in respect of which disclosure is required under this item, describe the material terms of the arrangement including the duration of the arrangement, the number or principal amount of securities involved and any right to recall the securities or identical securities that have been transferred or lent under the arrangement. |
State if the securities lending arrangement is subject to the exception provided in section 5.7 of NI 62-104.
Not applicable.
3.8 | If the acquiror or any of its joint actors is a party to an agreement, arrangement or understanding that has the effect of altering, directly or indirectly, the acquiror’s economic exposure to the security of the class of securities to which this report relates, describe the material terms of the agreement, arrangement or understanding. |
Not applicable.
Item 4 – Consideration Paid
4.1 | State the value, in Canadian dollars, of any consideration paid or received per security and in total. |
$5.25 per flow-through Share and $3.84 per Share pursuant to the share purchase agreement for total consideration of $13,649,880.
4.2 | In the case of a transaction or other occurrence that did not take place on a stock exchange or other market that represents a published market for the securities, including an issuance from treasury, disclose the nature and value, in Canadian dollars, of the consideration paid or received by the acquiror. |
See item 4.1.
4.3 | If the securities were acquired or disposed of other than by purchase or sale, describe the method of acquisition or disposition. |
Not applicable.
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Item 5 – Purpose of the Transaction
State the purpose or purposes of the acquiror and any joint actors for the acquisition or disposition of securities of the reporting issuer. Describe any plans or future intentions which the acquiror and any joint actors may have which relate to or would result in any of the following:
(a) | the acquisition of additional securities of the reporting issuer, or the disposition of securities of the reporting issuer; |
(b) | a corporate transaction, such as a merger, reorganization or liquidation, involving the reporting issuer or any of its subsidiaries; |
(c) | a sale or transfer of a material amount of the assets of the reporting issuer or any of its subsidiaries; |
(d) | a change in the board of directors or management of the reporting issuer, including any plans orintentions to change the number or term of directors or to fill any existing vacancy on the board; |
(e) | a material change in the present capitalization or dividend policy of the reporting issuer; |
(f) | a material change in the reporting issuer’s business or corporate structure; |
(g) | a change in the reporting issuer’s charter, bylaws or similar instruments or another action which might impede the acquisition of control of the reporting issuer by any person or company; |
(h) | a class of securities of the reporting issuer being delisted from, or ceasing to be authorized to be quoted on, a marketplace; |
(i) | the issuer ceasing to be a reporting issuer in any jurisdiction of Canada; |
(j) | a solicitation of proxies from securityholders; and/or |
(k) | an action similar to any of those enumerated above. |
The Shares were acquired for investment purposes. Mr. Sprott has a long-term view of the investment and may acquire additional securities either on the open market or through private acquisitions or sell the securities either on the open market or through private dispositions in the future depending on market conditions, reformulation of plans and/or other relevant factors. Mr. Sprott currently has no other plans or intentions that relate to, or would result in the matters listed in clauses (a) to (k), above. Depending on market conditions, general economic and industry conditions, the Corporation’s business and financial condition and/or other relevant factors, Mr. Sprott may develop such plans or intentions in the future.
Item 6 – Agreements, Arrangements, Commitments or Understandings With Respect to Securities of the Reporting Issuer
Describe the material terms of any agreements, arrangements, commitments or understandings between the acquiror and a joint actor and among. those persons and any person with respect to securities of the class of securities to which this report relates, including but not limited to the transfer or the voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Include such information for any of the securities that are pledged or otherwise subject to a contingency, the occurrence of which would give another person voting power or investment power over such securities, except that disclosure of standard default and similar provisions contained in loan agreements need not be included.
Not applicable.
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Item 7 – Change in material fact
If applicable, describe any change in a material fact set out in a previous report filed by the acquiror under the early warning requirements or Part 4 in respect of the reporting issuer’s securities.
Not applicable
Item 8 – Exemption
If the acquiror relies on an exemption from requirements in securities legislation applicable to formal bids for the transaction, state the exemption being relied on and describe the facts supporting that reliance.
Not applicable.
Item 9 – Certification
I, as the acquiror, certify to the best of my knowledge, information and belief, that the statements made in this report are true and complete in every respect.
Date: April 8, 2021
“Eric Sprott” | |
Eric Sprott, President | |
2176423 Ontario Ltd. |
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Exhibit 99.17
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“New Found” or the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
August 24, 2021
Item 3: | News Release |
A news release was disseminated on August 24, 2021 through Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
On August 24, 2021, New Found closed its previously-announced offering of 5,048,500 flow-through common shares of the Company (the “Flow-Through Shares”) that will qualify as “flow-through shares” (within the meaning of subsection 66(15) of the Income Tax Act (Canada)) at a price of $11.39 per Flow-Through Share (the “Offering Price”) for gross proceeds of $57,502,415 (the “Offering”) which includes the full exercise of the Underwriters’ (as defined herein) over-allotment option.
Item 5: | Full Description of Material Change |
On August 24, 2021, New Found closed its previously-announced offering of 5,048,500 Flow-Through Shares at the Offering Price for gross proceeds of $57,502,415 which includes the full exercise of the Underwriters’ over-allotment option.
The Offering was completed pursuant to an underwriting agreement dated August 19, 2021, entered into among the Company and a syndicate of underwriters led by Canaccord Genuity Corp. and BMO Capital Markets and including CIBC World Markets Inc., Desjardins Securities Inc. and Clarus Securities Inc. (collectively, the “Underwriters”). Mr. Eric Sprott participated for roughly 19.9% of the financing to maintain his interest in the Company.
The gross proceeds of the Offering will be used by the Company to incur eligible “Canadian exploration expenses” that will qualify as “flow-through mining expenditures” as such terms are defined in the Income Tax Act (Canada) (the “Qualifying Expenditures”) related to the Company’s Queensway Project located in Newfoundland, Canada and on the Company’s Lucky Strike Project located in Ontario, Canada on or before December 31, 2022. All Qualifying Expenditures will be renounced in favour of the subscribers effective December 31, 2021.
The Company will have approximately $118-million in working capital post-closing of the Offering.
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The Flow-Through Shares were offered by way of a prospectus supplement in each of the Provinces of Canada (other than the Province of Quebec) and were also offered by way of private placement in the United States. Copies of the prospectus supplement and documents incorporated by reference therein are available electronically on SEDAR (www.sedar.com) under New Found’s issuer profile.
The securities to be offered pursuant to the Offering have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer & Director at 604.562.9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
August 24, 2021
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Exhibit 99.18
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“New Found” or the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
August 17, 2021
Item 3: | News Release |
A news release was disseminated on August 17, 2021 through Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
On August 17, 2021, New Found entered into an agreement with Canaccord Genuity Corp. and BMO Capital Markets on behalf of a syndicate of underwriters (collectively, the “Underwriters”), pursuant to which the Underwriters have agreed to purchase, on a “bought deal” basis, 4,390,000 flow-through common shares of the Company (the “Flow-Through Shares”) that will qualify as “flow-through shares” (within the meaning of subsection 66(15) of the Income Tax Act (Canada)) at a price of $11.39 per Flow-Through Share (the “Offering Price”) for gross proceeds of $50,002,100 (the “Offering”).
Item 5: | Full Description of Material Change |
On August 17, 2021, New Found entered into an agreement with Canaccord Genuity Corp. and BMO Capital Markets on behalf of the Underwriters, pursuant to which the Underwriters have agreed to purchase, on a “bought deal” basis, 4,390,000 Flow-Through Shares at the Offering Price for gross proceeds of $50,002,100.
The Company has granted the Underwriters an option, exercisable at the Offering Price for a period of 30 days following the Closing Date (as defined herein), to purchase up to an additional 15% of the number of Flow-Through Shares sold under the Offering to cover over-allotments, if any and for market stabilization purposes. The Offering is expected to close on or about August 24, 2021 (the “Closing Date”) and is subject to the Company receiving all necessary regulatory approvals.
The gross proceeds of the Offering will be used by the Company to incur eligible “Canadian exploration expenses” that will qualify as “flow-through mining expenditures” as such terms are defined in the Income Tax Act (Canada) (the “Qualifying Expenditures”) related to the Company’s Queensway Project located in Newfoundland, Canada and on the Company’s Lucky Strike Project located in Ontario, Canada on or before December 31, 2022. All Qualifying Expenditures will be renounced in favour of the subscribers effective December 31, 2021.
1
The Flow-Through Shares will be offered by way of a prospectus supplement in each of the Provinces of Canada (other than the Province of Quebec) and may also be offered by way of private placement in the United States and such other jurisdictions as agreed between the parties.
The securities to be offered pursuant to the Offering have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer & Director at 604.562.9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
August 19, 2021
2
Exhibit 99.19
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
August 12, 2021
Item 3: | News Release |
A news release was disseminated on August 12, 2021 through Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The company provided an update on its 100%-owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached as schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company at 604-562-9664 or croberts@newfoundgold.ca.
Item 9: | Date of Report |
August 12, 2021
Schedule “A”
New Found Provides Exploration Update and
Provides 3D Modelling of Keats-Lotto Trend
Vancouver, BC, August 12, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to provide an update on its 100%-owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15km west of Gander, Newfoundland.
Highlights
· | Nine drills are currently running on Queensway north, eight on the Appleton fault zone and one on the JBP fault zone. To date a total of 301 holes have been completed, totalling 75,025m or approximately 37.5% of the planned 200,000m drill program. Of this total, results have been received and reported for 34,398m with results for 40,627m still pending. |
· | At Keats three drills are continuing step out holes down plunge to the south and one drill is focused on mineralization and veining between the high-grade dilation zone and surface. Two drills are turning at the newly discovered Golden Joint, while one drill is continuing step-outs at Lotto. |
· | Drilling is now underway at Zone 36, a recently discovered grass roots target located on the west side of the Appleton Fault, approximately 700m north of Lotto (see Figure 1). The presence of vuggy quartz, antimony sulphosalts, and visible gold is suggestive that it has a similar epizonal style of mineralization to the Keats and Lotto zones. Limited surface sampling of the zone resulted in grab samples up to 47.0 g/t Au and channel samples up to 18.9g/t Au over 1.0m. |
· | One drill is sequentially testing multiple targets along the JBP fault zone approximately 5km to the east of the Appleton fault zone. Assays are pending from drilling at 1744, H-Pond, and Pocket Pond. |
· | Drill intervals including from Keats, Golden Joint and Lotto have been submitted for assay on a rush basis. The Company has continued to experience significant backups at the assay laboratories but expects to receive and release further assay results in the coming weeks. |
· | The Company is pleased to share a recently released video showing a discussion of preliminary 3-D modelling of high-grade gold found at Keats, Lotto, and Golden Joint along 2 Km of the Appleton Fault Zone. Click here to watch the video: 3D Model of Appleton Fault North - New Found Gold. |
Greg Matheson, P.Geo., COO New Found, stated: “Despite a lag in assay results, drilling at Queensway has continued uninterrupted. Three drills are currently focused on step-out holes down plunge at Keats, with several sample intervals from this drilling having been sent to the lab on a rush basis. A fourth drill is focused on better understanding the mineralization above the main plunge and towards surface with several intervals also being sent to the lab on a rush basis. The Keats zone continues to demonstrate great continuity and remains open in all directions and at depth. We anticipate additional results from this Keats drilling as well as from the Lotto and Golden Joint in the near future.”
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Figure 1. Appleton Fault Zone targets, Queensway North
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Sampling, Sub-sampling and Laboratory
Host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85% to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. In some areas infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cut-off of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia, or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer, and a Qualified Person as defined under National Instrument 43-101. Mr. Matheson consents to the publication of this news release dated August 12, 2021, by New Found. Mr. Matheson certifies that this news release fairly and accurately represents the information for which he is responsible.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15km west of Gander, Newfoundland, and just 18km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. Queensway is host to an extensive epizonal orogenic gold system, one capable of generating very high-grade gold mineralization. To date, New Found has discovered three robust structurally controlled high-grade gold deposits: Keats, Lotto and Golden Joint. More than 15 additional targets are or will be drill tested along 7.8km of strike length on the Appleton fault and 12.4km of strike on the JBP fault. To date the Company has completed approximately 37.5% of its planned 200,000m drill program at Queensway North. Nine rigs are in operation at Queensway with the drill count planned to increase to ten rigs by Q3 2021. With a current working capital balance of approximately $68 million, New Found is well funded for this program.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
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Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company, please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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Forward Looking Statement Cautions
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation relating to further exploration and drilling on the Company’s Queensway gold project in Newfoundland; interpretation of results of the drilling program and funding of the drilling program; future discoveries of high-grade gold mineralization; the merits of the Queensway project. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “target,” “suggestive,” “probability,” “appear,” “pursuit,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated with possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s Annual Information Form and Management’s discussion and Analysis, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
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Exhibit 99.20
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
July 6, 2021
Item 3: | News Release |
A news release was disseminated on July 6, 2021 through Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company provided an update concerning generative exploration results from multiple targets along the prolific Appleton Fault Zone (“AFZ”) on its 100%-owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached as schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company at 604-562-9664 or croberts@newfoundgold.ca.
Item 9: | Date of Report |
July 6, 2021
Schedule “A” |
New Found Provides Appleton Fault Zone Exploration Update
Vancouver, BC, July 6, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to provide an update concerning generative exploration results from multiple targets along the prolific Appleton Fault Zone (“AFZ”) on its 100%-owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15km west of Gander, Newfoundland.
Queensway is host to an extensive epizonal orogenic gold system, one capable of generating very high-grade gold mineralization. To date, New Found has discovered three robust structurally controlled high-grade gold deposits: Keats, Lotto, and Golden Joint. High-grade gold mineralization is typically comprised of intense quartz stockwork veining with abundant fine particles of visible gold. Although sulphide contents of such mineralization are generally very low, particles of the lead-antimony sulfosalt, boulangerite, occur ubiquitously with native gold. Lower grade gold intercepts are often encountered in the vicinity of such high-grade mineralization often occurring in altered sedimentary host rocks adjacent to quartz veins along with moderately abundant disseminated sulphides including pyrite and arsenopyrite. When such low-grade mineralization is encountered in drilling, it can help point to high-grade mineralization nearby.
New Found, with the help of GoldSpot Discoveries Corp., continually refines its geologic model to maximize the chances of making further high-grade discoveries along the AFZ. Numerous new targets have been the subject of recent drilling, and the Company believes additional high-grade discoveries will be made as it advances its ongoing 200,000m diamond drill program. This news release provides a comprehensive overview of recent exploration results from the AFZ corridor within the North Queensway Project.
AFZ Exploration Highlights
New Found has made significant progress advancing multiple targets along the Appleton Fault Zone on Queensway North. Figure 1 below shows the Keats, Lotto, and Golden Joint discovery areas along with additional primary generative targets.
The high-grade discoveries at the Keats, Lotto, and Golden Joint Zones have each been made by following up on lower grade intervals of gold mineralization from initial drilling in the target area. In addition to the presence of gold mineralization these discovery areas also display areas of alteration and pathfinder elements that appear to be associated with high-grade epizonal style gold mineralization. Significant areas of white mica alteration along with boulangerite and chalcopyrite mineralization occur proximate to higher grade gold.
The generative targets being pursued typically have significant presence of these styles of alteration and pathfinder elements coincident with significant gold mineralization. Based on our interpretation, we believe these areas have a significantly enhanced probability of hosting high-grade epizonal mineralization.
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Highlights of initial drilling on these generative targets is summarized the Tables below, additional drill results from this work provided in Drillhole Details section.
Figure 1. Appleton Fault Zone targets, Queensway North
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New Appleton Fault Zone Generative Drill Results
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85% to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
Denis Laviolette, President of New Found, stated, “Our understanding of the genesis of high-grade gold mineralization along the Appleton fault continues to evolve. Following up on intervals of lower grade gold mineralization associated with specific styles of alteration and pathfinder minerals and elements was a key step in our discoveries of high grade at Keats, Lotto, and recently Golden Joint. There are now more than 15 additional areas along the Appleton fault that have returned significant gold mineralization that we believe are prospective for high grade epizonal style discovery. We are continuing with interpretation work and additional drilling in the pursuit of finding additional zones of high-grade epizonal style gold along 7.8km of strike along the Appleton Fault Zone.
The Appleton fault is a deep crustal structure and plumbing conduit persists for over 7km of strike distance through Queensway North. With our discovery success and continued generation and advancement of new targets, our confidence continues to build that with further drilling we will make additional discoveries of high-grade epizonal gold mineralization along the Appleton Fault Zone.”
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Previously Released Appleton Fault Zone Generative Drill Results
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85%to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
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Keats to Lotto Corridor
New Found’s three advancing high-grade epizonal discoveries to date occur along an approximately 2km corridor of the Appleton Fault Zone, shown in the long section in Figure 2 below.
Figure 2. Long section along the Keats to Lotto corridor
In addition to the Keats, Lotto, and Golden Joint discoveries, exploration is continuing on multiple additional target areas across an approximately 800m wide corridor on the east side of the Appleton fault that demonstrates significant gold mineralization coincident with alteration and mineralization styles that are commonly found proximate to high-grade epizonal style mineralization. The generative target areas in this corridor include Keats North, Dome, Road, Golden Joint HW, and Sunday (see Figure 1). Notable drill intervals in these generative targets on the east side of the Appleton include 6.53g/t over 2.0m at Keats North, approximately 200m north of where the main Keats high-grade zone appears to sub crop, 35.4g/t over 2.7m at Road, 38.7g/t over 2.95m at Sunday, and 12.7g/t over 2.0m at Golden Joint HW.
Generative targets along an approximately 500m wide corridor on the west side of the Appleton Fault include Cokes and Little-Powerline which have both returned encouraging drill intervals, as well as Trench 26 and Zone 36 where significant gold mineralization, alteration, and indicator minerals have been noted in trenching to be followed up shortly with drilling.
Keats Area (Keats Main, Keats FW, Keats North, Cokes)
Recently received Keats drill intervals along with intervals returned from Keats North and Cokes are shown on the plan map and long section in Figures 3 and 4 below.
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Figure 3. Keats Area Plan View
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85%to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 6 |
Figure 4. Keats Long Section
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85%to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 7 |
Keats Main
Highlight intervals from recently received Keats drilling include:
Zone | Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | ||||||||||||||
Keats Main | NFGC-21-120 | 9.65 | 21.70 | 12.05 | 12.65 | Keats Main | ||||||||||||||
Including | 9.65 | 13.25 | 3.60 | 35.76 | ||||||||||||||||
Keats Main | NFGC-21-189 | 156.70 | 161.80 | 5.10 | 23.78 | Keats Main | ||||||||||||||
Keats Main | NFGC-21-196 | 169.90 | 172.35 | 2.45 | 96.51 | Keats Main |
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85%to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
· | The intervals of 96.5g/t Au over 2.45m in hole NFGC-21-196 and 23.8g/t Au over 5.10m in NFGC-21-189 occur above the primary dilative corridor of the Keats Fault Zone which still yields significant gold mineralization. |
Keats North
Drill holes NFGC-21-98 and NFGC-21-108 were drilled on a fence line approximately 200m north of the main Keats discovery (see Figure 3). Highlight intervals include:
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Name | Zone | ||||||||||||||||
NFGC-21-98 | 136.00 | 138.85 | 2.85 | 1.02 | Keats North | Main | ||||||||||||||||
NFGC-21-108 | 197.00 | 199.00 | 2.00 | 6.53 | Keats North | Main |
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85% to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
· | The Company believes that Hole NFGC-21-108 intersected the primary Keats Baseline fault structure. |
Additional drilling is planned to further test the structure in this area.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 8 |
Cokes
The Cokes target is on the west side of the Appleton fault approximately 300m from the main Keats Zone, which is being drilled on the east side of the Appleton fault. Highlight intervals include:
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Name | Zone | ||||||||||||||
NFGC-21-157 | 18.85 | 33.70 | 14.85 | 3.61 | ||||||||||||||||
Including | 20.60 | 24.75 | 4.15 | 6.43 | Cokes | Main | ||||||||||||||
And | 55.20 | 67.00 | 11.80 | 1.80 | ||||||||||||||||
And | 105.00 | 109.50 | 4.50 | 2.04 | ||||||||||||||||
NFGC-21-146 | 23.00 | 26.00 | 3.00 | 1.49 | Cokes | Main | ||||||||||||||
And | 79.00 | 81.00 | 2.00 | 1.60 | ||||||||||||||||
NFGC-21-154 | 15.70 | 22.25 | 6.55 | 1.40 | Cokes | Main | ||||||||||||||
And | 27.00 | 34.65 | 7.65 | 2.60 |
**Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85% to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
· | Notable in the drilling at the Cokes target is a pervasive alteration sequence, several brittle and ductile structural elements and higher sulphide content representing a different style of mineralization from the Keats but suggestive that a robust mineral system has developed on the west side of the Appleton Fault. |
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 9 |
Golden Joint to Lotto Corridor
Target locations and recent results the from Golden Joint to Lotto corridor are summarized in Figure 5 below.
Figure 5. Golden Joint to Lotto Corridor Plan Map
**Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85% to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 10 |
Golden Joint & Golden Joint HW
New Found recently reported results from the Golden Joint discovery with the following highlights (see New Found’s June 29, 2021, news release):
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-21-171 | 223.45 | 228.30 | 4.85 | 10.36 | Golden Joint | |||||||||||||
NFGC-21-241 | 207.85 | 213.10 | 5.25 | 430.17 | Golden Joint |
**Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85% to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
· | The high-grade discovery interval of 430.2g/t Au over 5.25m was intersected within a newly discovered gold zone along the hanging wall of the Appleton Fault. |
· | Based on the recent drilling, New Found’s current interpretation is that the Lotto Baseline Fault extends approximately 1km from the Lotto area to the Golden Joint area (see Figure 5). The vein systems in the Golden Joint appear to occur near the confluence (“joint”) of the Lotto Baseline and Appleton Faults, but controls on the high-grade gold mineralization at Golden Joint are currently unclear. |
Results from the parallel Golden Joint Hanging Wall Zone have also included several significant intervals with highlights including:
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-21-187 | 114.10 | 119.65 | 5.55 | 1.49 | Golden Joint HW | |||||||||||||
And | 125.45 | 131.65 | 6.20 | 4.96 | ||||||||||||||
NFGC-21-199 | 36.00 | 38.00 | 2.00 | 2.85 | Golden Joint HW | |||||||||||||
And | 46.00 | 48.00 | 2.00 | 2.31 | ||||||||||||||
And | 64.00 | 66.00 | 2.00 | 12.70 |
**Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85% to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 11 |
Road
Highlight results from holes drilled into the Road target are summarized below.
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-20-71 | 23.50 | 26.20 | 2.70 | 35.36 | ||||||||||||||
And | 48.80 | 51.75 | 2.95 | 9.06 | Road | |||||||||||||
And | 113.40 | 115.40 | 2.00 | 1.03 | ||||||||||||||
NFGC-20-76 | 57.55 | 59.65 | 2.10 | 1.03 | Road |
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85%to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
· | The Road target is exposed at surface and is the furthest east of the Appleton fault where significant gold mineralization has been found to date but may be related to extensions of the Lotto Zone 550m to the northwest. |
· | Drill hole NFGC-20-71 returned three mineralized vein zones with results including 35.4g/t Au over 2.70m and 9.1g/t Au over 2.95m. |
· | The presence of quartz breccia veins in a separate NW trending fault corridor are suggestive of a similar style of emplacement and mineralogy to the nearby Keats and Lotto Zones. |
Dome
Highlight results from Dome are summarized below.
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-20-55 | 84.00 | 87.60 | 3.60 | 1.96 | Dome | |||||||||||||
NFGC-20-58 | 67.20 | 69.20 | 2.00 | 1.46 | Dome | |||||||||||||
NFGC-20-61 | NSV | Dome | ||||||||||||||||
NFGC-20-66 | 103.75 | 106.30 | 2.55 | 1.64 | Dome | |||||||||||||
And | 115.45 | 122.55 | 7.10 | 2.03 | ||||||||||||||
NFGC-20-68 | 101.70 | 104.00 | 2.30 | 1.01 | Dome |
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85%to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
· | Further drilling is being planned at Dome to follow up on these results, again targeting higher-grade epizonal style gold mineralization. |
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 12 |
Lotto and Sunday
· | New Found recently reported results from the Lotto discovery with the following highlights (see New Found’s June 23, 2021, news release): |
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-21-89 | 80.85 | 99.65 | 18.80 | 1.64 | ||||||||||||||
NFGC-21-201 | 205.00 | 207.45 | 2.45 | 683.14 | Lotto Main | |||||||||||||
Within | 196.65 | 208.15 | 11.50 | 150.28 |
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85%to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
· | The interval 683.1g/t Au over 2.45m within 150.3 g/t Au over 11.5m in NFGC-21-201 is the best result to date from the main Lotto discovery and step-out drilling from this interval is now underway (see Figure 6). |
· | The high-grade intervals reported to date occur in an interpreted north-south striking vein set, one of a network of multiple secondary north-south striking vein sets interpreted to date over a 300m x 200m area which remains open in all directions. |
· | The Company continues to test multiple additional targets at Lotto outside of the initial vein target, including follow up drilling on the Sunday Zone interval of 38.7g/t over 2.95m interpreted to be located in the hanging wall of the main Appleton Fault. |
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 13 |
Figure 6. Lotto Cross Section
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85%to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
Other Appleton Fault Zone Target Areas
Zone 36
· | Surface trenching in 2020 along an area of high Au soil values resulted in the discovery of Zone 36, approximately 700m north of Lotto on the west side of the Appleton Fault (see Figure 7 below). |
· | Zone 36 is represented by two parallel northwest trending veins and a third more prominent sub-parallel vein system showing areas of brecciation and was exposed along surface for 140m along strike. |
· | The presence of vuggy quartz, antimony sulphosalts, and visible gold is suggestive that it has a similar epizonal style of mineralization to the Keats and Lotto Zones. |
· | Limited surface sampling of the Zone resulted in grab samples up to 47.0 g/t Au and channel samples up to 18.9g/t Au over 1.0m. |
· | Initial drilling of this target is planned for 2021. |
NEWFOUND GOLD CORP.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 14 |
Figure 7. Exploration of Zone 36 showing broad quartz veined zone
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 15 |
Knob and Grouse
The Knob area was the subject of significant historic drilling by Noranda. Due to winter conditions to date the Company has been unable to safely reach drill pad locations to target the focus of the historic Noranda drilling. Drilling to date by New Found has been peripheral to this target area and has tested for extensions of the historically drilled mineralization, as well as testing additional target zones. Highlight of drill results to date include:
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-21-107 | 12.65 | 15.00 | 2.35 | 1.61 | Knob | |||||||||||||
And | 24.00 | 28.40 | 4.40 | 1.06 | ||||||||||||||
NFGC-21-112 | NSV | Knob | ||||||||||||||||
NFGC-21-117 | 30.90 | 34.45 | 3.55 | 1.39 | Knob | |||||||||||||
And | 42.55 | 44.60 | 2.05 | 1.34 | ||||||||||||||
NFGC-21-121 | 29.00 | 31.15 | 2.15 | 1.08 | Knob | |||||||||||||
NFGC-21-124 | 39.30 | 42.65 | 3.35 | 1.43 | Knob | |||||||||||||
And | 46.00 | 48.00 | 2.00 | 1.00 | ||||||||||||||
And | 169.00 | 171.00 | 2.00 | 2.00 | ||||||||||||||
NFGC-21-126 | NSV | Knob | ||||||||||||||||
NFGC-21-128 | NSV | Knob | ||||||||||||||||
NFGC-21-134 | NSV | Knob | ||||||||||||||||
NFGC-21-147 | 76.60 | 78.75 | 2.15 | 1.76 | Knob | |||||||||||||
NFGC-21-152 | NSV | Knob | ||||||||||||||||
NFGC-21-159 | 42.85 | 45.30 | 2.45 | 2.91 | Knob | |||||||||||||
And | 54.00 | 56.00 | 2.00 | 8.78 | Knob | |||||||||||||
NFGC-21-168 | NSV | Grouse | ||||||||||||||||
NFGC-21-178 | NSV | Grouse |
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85% to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
· | The Knob and Grouse Zones are stratigraphically controlled to a coarse greywacke/conglomerate unit and the Company successfully extended the known extents of this unit along strike intersecting visible gold mineralization in several holes including NFGC-21-159 which intercepted 8.78g/t Au over 2.0m, 200m south of the Knob Zone within the coarse-grained unit. |
· | Further surface exploration is planned for the 2021 field season to better refine the geology of this region with the goal of generating new drill targets as significant potential exists. |
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 16 |
Drillhole Details
Keats Main and Keats FW
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-20-75 | 132.00 | 135.45 | 3.45 | 9.78 | Keats Main | |||||||||||||
And | 139.00 | 141.00 | 2.00 | 2.21 | ||||||||||||||
NFGC-21-77 | NSV | Keats Main | ||||||||||||||||
NFGC-21-81 | 19.40 | 21.70 | 2.30 | 1.72 | Keats Main | |||||||||||||
And | 46.55 | 49.40 | 2.85 | 1.19 | ||||||||||||||
And | 65.90 | 68.30 | 2.40 | 1.00 | ||||||||||||||
And | 136.00 | 138.15 | 2.15 | 1.33 | Keats FW | |||||||||||||
NFGC-21-82 | 140.00 | 145.00 | 5.00 | 3.54 | Keats Main | |||||||||||||
And | 160.85 | 167.95 | 7.10 | 3.52 | ||||||||||||||
NFGC-21-93 | 17.80 | 19.80 | 2.00 | 1.98 | Keats Main | |||||||||||||
NFGC-21-99 | 182.00 | 184.00 | 2.00 | 1.03 | Keats Main | |||||||||||||
And | 196.00 | 199.65 | 3.65 | 1.11 | ||||||||||||||
NFGC-21-116 | 25.40 | 35.95 | 10.55 | 2.10 | Keats Main | |||||||||||||
Including | 25.40 | 28.20 | 2.80 | 4.82 | ||||||||||||||
NFGC-21-120 | 9.65 | 21.70 | 12.05 | 12.65 | Keats Main | |||||||||||||
Including | 9.65 | 13.25 | 3.60 | 35.76 | ||||||||||||||
And | 22.90 | 25.00 | 2.10 | 1.33 | ||||||||||||||
And | 28.20 | 33.00 | 4.80 | 1.98 | ||||||||||||||
And | 36.00 | 38.00 | 2.00 | 2.66 | ||||||||||||||
And | 40.30 | 46.00 | 5.70 | 5.16 | ||||||||||||||
NFGC-21-129 | 59.75 | 66.00 | 6.25 | 1.37 | Keats Main | |||||||||||||
And | 71.00 | 75.30 | 4.30 | 2.54 | ||||||||||||||
And | 122.95 | 125.00 | 2.05 | 1.21 | Keats FW | |||||||||||||
And | 128.00 | 130.15 | 2.15 | 1.28 | ||||||||||||||
NFGC-21-132 | 159.00 | 161.50 | 2.50 | 1.06 | Keats Main | |||||||||||||
And | 164.60 | 171.75 | 7.15 | 1.90 | ||||||||||||||
NFGC-21-136 | 230.10 | 237.45 | 7.35 | 1.02 | Keats Main | |||||||||||||
And | 254.65 | 257.30 | 2.65 | 1.85 | ||||||||||||||
And | 288.00 | 290.65 | 2.65 | 1.23 | Keats FW | |||||||||||||
NFGC-21-153 | 288.40 | 292.45 | 4.05 | 1.16 | ||||||||||||||
NFGC-21-156 | 22.00 | 24.25 | 2.25 | 3.12 | Keats Main | |||||||||||||
And | 54.95 | 70.35 | 15.40 | 1.00 | ||||||||||||||
And | 110.65 | 113.00 | 2.35 | 1.52 | Keats FW | |||||||||||||
And | 151.50 | 154.30 | 2.80 | 1.31 | ||||||||||||||
And | 175.40 | 178.00 | 2.60 | 1.41 | ||||||||||||||
And | 215.85 | 218.55 | 2.70 | 2.54 | ||||||||||||||
And | 246.60 | 253.15 | 6.55 | 1.32 | ||||||||||||||
NFGC-21-189 | 150.00 | 152.00 | 2.00 | 1.73 | Keats Main | |||||||||||||
And | 156.70 | 161.80 | 5.10 | 23.78 | ||||||||||||||
NFGC-21-196 | 169.90 | 172.35 | 2.45 | 96.51 | Keats Main | |||||||||||||
NFGC-21-197 | 219.30 | 221.70 | 2.40 | 1.04 | Keats Main | |||||||||||||
And | 239.85 | 250.90 | 11.05 | 2.12 | ||||||||||||||
And | 254.45 | 262.70 | 8.25 | 3.67 | ||||||||||||||
Including | 257.55 | 260.00 | 2.45 | 8.13 |
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85% to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 17 |
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-75 | 300 | -45 | 175.5 | 658205 | 5427413 | |||||||||||||||
NFGC-21-77 | 300 | -45 | 308.6 | 658302 | 5427416 | |||||||||||||||
NFGC-21-81 | 300 | -45 | 258.5 | 658104 | 5427414 | |||||||||||||||
NFGC-21-82 | 300 | -45 | 223.2 | 658190 | 5427364 | |||||||||||||||
NFGC-21-93 | 300 | -45 | 110.0 | 658230 | 5427558 | |||||||||||||||
NFGC-21-99 | 299 | -45 | 285.0 | 658176 | 5427314 | |||||||||||||||
NFGC-21-116 | 300 | -45 | 113.0 | 658188 | 5427509 | |||||||||||||||
NFGC-21-120 | 300 | -45 | 108.7 | 658228 | 5427529 | |||||||||||||||
NFGC-21-129 | 300 | -45 | 161.3 | 658198 | 5427475 | |||||||||||||||
NFGC-21-132 | 300 | -45 | 234.0 | 658221 | 5427391 | |||||||||||||||
NFGC-21-136 | 300 | -45 | 312.0 | 658179 | 5427247 | |||||||||||||||
NFGC-21-153 | 300 | -45 | 351.0 | 658233 | 5427217 | |||||||||||||||
NFGC-21-156 | 300 | -45 | 275.0 | 658069 | 5427405 | |||||||||||||||
NFGC-21-189 | 300 | -45 | 204.6 | 658174 | 5427359 | |||||||||||||||
NFGC-21-196 | 300 | -45 | 206.0 | 658179 | 5427342 | |||||||||||||||
NFGC-21-197 | 300 | -55 | 353.0 | 658149 | 5427243 |
Keats North
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-21-98 | 137.00 | 139.30 | 2.30 | 1.09 | Keats FW | |||||||||||||
NFGC-21-108 | 197.00 | 199.00 | 2.00 | 6.53 | Keats | |||||||||||||
NFGC-21-190 | NSV | Keats |
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85%to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-21-98 | 299 | -45 | 470.0 | 658328 | 5427745 | |||||||||||||||
NFGC-21-108 | 120 | -45 | 248.0 | 658327 | 5427746 | |||||||||||||||
NFGC-21-190 | 300 | -45 | 282.0 | 658537 | 5427639 |
Cokes
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-21-146 | 23.00 | 26.00 | 3.00 | 1.49 | ||||||||||||||
And | 79.00 | 81.00 | 2.00 | 1.60 | Cokes | |||||||||||||
NFGC-21-154 | 6.40 | 8.40 | 2.00 | 1.37 | ||||||||||||||
And | 15.70 | 22.25 | 6.55 | 1.40 | Cokes | |||||||||||||
And | 27.00 | 34.65 | 7.65 | 2.60 | ||||||||||||||
NFGC-21-157 | 10.00 | 33.70 | 23.70 | 2.40 | ||||||||||||||
Including | 20.60 | 24.75 | 4.15 | 6.43 | ||||||||||||||
And | 55.20 | 68.35 | 13.15 | 1.69 | Cokes | |||||||||||||
And | 105.00 | 109.50 | 4.50 | 2.04 |
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85% to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 18 |
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-21-146 | 300 | -45 | 300.0 | 657817 | 5427521 | |||||||||||||||
NFGC-21-154 | 50 | -60 | 94.6 | 657652 | 5427514 | |||||||||||||||
NFGC-21-157 | 120 | -45 | 165.0 | 657642 | 5427535 |
Lotto
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-21-83 | 67.95 | 70.00 | 2.05 | 1.04 | Lotto | |||||||||||||
And | 87.20 | 90.05 | 2.85 | 1.45 | ||||||||||||||
NFGC-21-102 | 48.40 | 54.85 | 6.45 | 2.15 | Lotto | |||||||||||||
NFGC-21-110 | 140.70 | 142.70 | 2.00 | 1.54 | Lotto | |||||||||||||
And | 174.85 | 177.90 | 3.05 | 1.27 |
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85% to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-21-83 | 300 | -45 | 357.2 | 658964 | 5429025 | |||||||||||||||
NFGC-21-102 | 295 | -45 | 363.0 | 659045 | 5429179 | |||||||||||||||
NFGC-21-110 | 300 | -45 | 183.1 | 658999 | 5428946 |
Dome
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-20-55 | 84.00 | 87.60 | 3.60 | 1.96 | Dome | |||||||||||||
NFGC-20-58 | 67.20 | 69.20 | 2.00 | 1.46 | Dome | |||||||||||||
NFGC-20-61 | NSV | Dome | ||||||||||||||||
NFGC-20-66 | 103.75 | 106.30 | 2.55 | 1.64 | Dome | |||||||||||||
And | 115.45 | 122.55 | 7.10 | 2.03 | ||||||||||||||
NFGC-20-68 | 101.70 | 104.00 | 2.30 | 1.01 | Dome |
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85% to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-55 | 300 | -45 | 138.0 | 658752 | 5428685 | |||||||||||||||
NFGC-20-58 | 300 | -45 | 147.0 | 658764 | 5428707 | |||||||||||||||
NFGC-20-61 | 300 | -45 | 306.3 | 658777 | 5428728 | |||||||||||||||
NFGC-20-66 | 300 | -45 | 171.0 | 658739 | 5428665 | |||||||||||||||
NFGC-20-68 | 300 | -60 | 231.0 | 658740 | 5428665 |
Road
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-20-71 | 23.50 | 26.20 | 2.70 | 35.36 | ||||||||||||||
And | 48.80 | 51.75 | 2.95 | 9.06 | Road | |||||||||||||
And | 113.40 | 115.40 | 2.00 | 1.03 | ||||||||||||||
NFGC-20-76 | 57.55 | 59.65 | 2.10 | 1.03 | Road |
*Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85%to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 19 |
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-71 | 50 | -45 | 204.0 | 658925 | 5428323 | |||||||||||||||
NFGC-20-76 | 50 | -60 | 225.0 | 658925 | 5428322 |
Knob
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-21-107 | 12.65 | 15.00 | 2.35 | 1.61 | Knob | |||||||||||||
And | 24.00 | 28.40 | 4.40 | 1.06 | ||||||||||||||
NFGC-21-112 | NSV | Knob | ||||||||||||||||
NFGC-21-117 | 30.90 | 34.45 | 3.55 | 1.39 | Knob | |||||||||||||
And | 42.55 | 44.60 | 2.05 | 1.34 | ||||||||||||||
NFGC-21-121 | 29.00 | 31.15 | 2.15 | 1.08 | Knob | |||||||||||||
NFGC-21-124 | 39.30 | 42.65 | 3.35 | 1.43 | Knob | |||||||||||||
And | 46.00 | 48.00 | 2.00 | 1.00 | ||||||||||||||
And | 169.00 | 171.00 | 2.00 | 2.00 | ||||||||||||||
NFGC-21-126 | NSV | Knob | ||||||||||||||||
NFGC-21-128 | NSV | Knob | ||||||||||||||||
NFGC-21-134 | NSV | Knob | ||||||||||||||||
NFGC-21-147 | 76.60 | 78.75 | 2.15 | 1.76 | Knob | |||||||||||||
NFGC-21-152 | NSV | Knob | ||||||||||||||||
NFGC-21-159 | 42.85 | 45.30 | 2.45 | 2.91 | Knob | |||||||||||||
And | 54.00 | 56.00 | 2.00 | 8.78 | Knob | |||||||||||||
NFGC-21-168 | NSV | Grouse | ||||||||||||||||
NFGC-21-178 | NSV | Grouse |
Note that the host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85% to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-21-107 | 120 | -45 | 95.0 | 657087 | 5425765 | |||||||||||||||
NFGC-21-112 | 120 | -45 | 190.2 | 657047 | 5425761 | |||||||||||||||
NFGC-21-117 | 120 | -45 | 123.0 | 657140 | 5425764 | |||||||||||||||
NFGC-21-121 | 300 | -45 | 233.0 | 657257 | 5425862 | |||||||||||||||
NFGC-21-124 | 120 | -45 | 258.8 | 657228 | 5425875 | |||||||||||||||
NFGC-21-126 | 120 | -45 | 233.0 | 656933 | 5425746 | |||||||||||||||
NFGC-21-128 | 120 | -45 | 206.0 | 657354 | 5425190 | |||||||||||||||
NFGC-21-134 | 0 | -45 | 123.3 | 657164 | 5425687 | |||||||||||||||
NFGC-21-147 | 300 | -45 | 239.2 | 657075 | 5425583 | |||||||||||||||
NFGC-21-152 | 300 | -60 | 227.0 | 657076 | 5425582 | |||||||||||||||
NFGC-21-159 | 300 | -45 | 188.0 | 657051 | 5425540 | |||||||||||||||
NFGC-21-168 | 300 | -45 | 176.0 | 657001 | 5425509 | |||||||||||||||
NFGC-21-178 | 180 | -45 | 239.0 | 656929 | 5425322 |
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 20 |
200,000m Drill Campaign Update
A total of 267 holes totalling approximately 61,700m of drilling has been completed to date, representing approximately 31% of the planned 200,000m program. Results for 150 holes totalling approximately 34,200m have been received and reported to date. Eight rigs are currently turning, with a ninth on site and tenth to arrive by Q3 2021.
NYSE American Listing Update
New Found has been cleared to apply to list its common shares on the NYSE American. The Company expects to commence trading on the NYSE American in early Q3 2021 upon receipt of final approval from the SEC and the NYSE American.
Sampling, Sub-sampling, and Laboratory
Host structures along the Appleton Fault Zone are generally interpreted to be steeply dipping and true widths are estimated to be 85% to 95% of reported widths at Keats, 80% to 90% at Lotto, 70% to 90% at Golden Joint, 65% to 75% at Dome, unknown at Cokes, 85% to 95% at Road, unknown at Little-Powerline, and unknown at Knob. In some areas infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Assays are uncut, and calculated intervals are reported over a minimum length of 2m using a lower cut-off of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia, or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer, and a Qualified Person as defined under National Instrument 43-101. Mr. Matheson consents to the publication of this news release dated July 6, 2021, by New Found. Mr. Matheson certifies that this news release fairly and accurately represents the information for which he is responsible.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 21 |
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15km west of Gander, Newfoundland, and just 18km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. The Company is currently undertaking a 200,000m drill program at Queensway. Eight rigs are currently in operation at Queensway with the drill count planned to increase to ten rigs by Q3 2021. With a current working capital balance of approximately $80 million, New Found is well funded for this program.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company, please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P. Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 22 |
Forward Looking Statement Cautions
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation relating to further exploration and drilling on the Company’s Queensway gold project in Newfoundland; interpretation of results of the drilling program and funding of the drilling program; future discoveries of high-grade gold mineralization; the merits of the Queensway project; and the listing of the Company’s common shares on the NYSE American and the timing related thereto. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts’ they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “target,“ “suggestive,” “probability,” “appear,” “pursuit,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated with possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, uncertainties related to the listing on the NYSE American, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s Annual information Form and Management’s discussion and Analysis, publicly available through the Canadian Securities Administrators ‘System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 23 |
Exhibit 99.21
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
June 30, 2021
Item 3: | News Release |
A news release was disseminated on June 30, 2021 through Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company provided assay results from four holes drilled at the Golden Joint zone, a brand new discovery located approximately 1km north of the Keats Zone and approximately 850m south of the Lotto Zone. These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached as schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company at 604-562-9664 or croberts@newfoundgold.ca.
Item 9: | Date of Report |
June 30, 2021
Schedule “A”
New Found Intercepts 430.2 g/t Au Over 5.25m
in New Discovery at Golden Joint Zone,
1km North of Keats
Vancouver, BC, June 30, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce assay results from four holes drilled at the Golden Joint zone, a brand new discovery located approximately 1km north of the Keats Zone and approximately 850m south of the Lotto Zone. These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15km west of Gander, Newfoundland.
Highlights
· | Highlight intervals are summarized below. Additional results are provided in Table 2. |
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-21-171 | 223.45 | 228.30 | 4.85 | 10.36 | Golden Joint | |||||||||||||
NFGC-21-241 | 207.85 | 213.10 | 5.25 | 430.17 | Golden Joint |
· | The intercept of 430.2 g/t Au over 5.25m in hole NFGC-21-241 represents a grade x width (“metal factor”) value of 2,258 g/t Au x meters**, the second highest value encountered to date on the Queensway project. Furthermore, over 700 grains of gold were observed in this 5.25m intercept, representing the most per meter seen to date anywhere at the Queensway Project. |
· | The new Golden Joint discovery occurs in two to three sub parallel vein systems located approximately 1km North of the Keats Zone and 850m South of the Lotto Zone (see Figures 1, 2, and 3). |
· | Results from the parallel Golden Joint HW (hanging wall) zone approximately 150m east of the main Golden Joint Zone also returned several significant intervals often including visible gold mineralization, including 12.7 g/t Au over 2.0m in hole NFGC-21-199 (see Figure 2). Drilling will step out on these intervals to further test the Golden Joint HW Zone. Note that the Golden Joint HW intervals are not plotted on Figure1. |
· | Currently two drills rigs are operating at Golden Joint, focused on stepping out from discovery hole NFGC-21-241. Additional assays are pending. |
*Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 70% to 90% of reported intervals. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
** Note: the reported grade x width metal factors are not adjusted to an estimated true width. For estimated true widths equal to 70% to 90% of reported widths, adjusted metal factors would be 70% to 90% of unadjusted reported values.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 1 |
Greg Matheson, COO of New Found, stated: “Following a high-grade hole at Lotto reported last week, the Golden Joint discovery further affirms that the Appleton Fault is host to multiple areas of high-grade, near surface gold mineralization. As our team has theorized all along, the Keats zone is not the only area of significant gold mineralization. Hole NFGC-21-241 at the Golden Joint appears epizonal in nature and is very similar to the high-grade gold mineralization observed at the Keats Zone, which is located 1km to the South.”
Figure 1. Golden Joint location and long-section
Note: Golden Joint HW intervals not included on this long-section (see Table 2)
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 2 |
Figure 2. Golden Joint Main and Golden Joint HW plan view
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 3 |
Figure 3. Golden Joint location along the Appleton Fault Zone.
NEWFOUND GOLD CORP.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 4 |
Photos from Hole NFGC-21-241 high-grade interval
Figure 4. Example gold mineralization from NFGC-21-241 (207.85 to 213.1 m)
Note that these photos are not intended to be representative of gold mineralization in hole NFGC-21-241.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 5 |
Figure 4 (continued). Example gold mineralization from NFGC-21-241 (207.85 to 213.1 m)
Note that these photos are not intended to be representative of gold mineralization in hole NFGC-21-241.
NEWFOUND GOLD CORP.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 6 |
Figure 4 (continued). Example gold mineralization from NFGC-21-241 (207.85 to 213.1 m)
Note that these photos are not intended to be representative of gold mineralization in hole NFGC-21-241.
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 7 |
Figure 4 (continued). Core photo from NFGC-21-241 (including veining from 207.85 to 213.1 m)
Note that these photos are not intended to be representative of gold mineralization in hole NFGC-21-241.
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 8 |
Drillhole Details
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-21-171 | 223.45 | 228.30 | 4.85 | 10.36 | Golden Joint | |||||||||||||
NFGC-21-187 | 114.10 | 119.65 | 5.55 | 1.49 | ||||||||||||||
And | 125.45 | 131.65 | 6.20 | 4.96 | Golden Joint HW | |||||||||||||
Including | 127.65 | 131.65 | 4.00 | 7.08 | ||||||||||||||
And | 272.00 | 274.00 | 2.00 | 5.39 | Golden Joint | |||||||||||||
NFGC-21-199 | 36.00 | 38.00 | 2.00 | 2.85 | ||||||||||||||
And | 46.00 | 48.00 | 2.00 | 2.31 | Golden Joint HW | |||||||||||||
And | 64.00 | 66.00 | 2.00 | 12.70 | ||||||||||||||
And | 195.55 | 197.55 | 2.00 | 2.77 | Golden Joint | |||||||||||||
And | 199.00 | 201.00 | 2.00 | 4.53 | ||||||||||||||
NFGC-21-241 | 207.85 | 213.10 | 5.25 | 430.17 | Golden Joint |
Table 2: Summary of results reported in this release
*Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 70% to 90% of reported intervals. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-21-171 | 300 | -45.0 | 312 | 658547 | 5428356 | |||||||||||||||
NFGC-21-181 | 300 | -50.0 | 431 | 658548 | 5428356 | |||||||||||||||
NFGC-21-199 | 300 | -45.0 | 263 | 658526 | 5428398 | |||||||||||||||
NFGC-21-241 | 299 | -45.5 | 303 | 658523 | 5428341 |
Table 3: Details of drill holes reported in this release
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 9 |
Sampling, Sub-sampling and Laboratory
True widths of the intercepts reported in this press release have yet to be determined but are estimated to be 70% to 90% of reported core lengths. Reported grades have not been capped. Assays are uncut, and calculated intervals are reported over a minimum length of 2m using a lower cut-off of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia, or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control, and interpretation of results are performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer, and a Qualified Person as defined under National Instrument 43-101. Mr. Matheson consents to the publication of this news release dated June 30, 2021, by New Found. Mr. Matheson certifies that this news release fairly and accurately represents the information for which he is responsible.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15km west of Gander, Newfoundland, and just 18km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. The Company is currently undertaking a 200,000m drill program at Queensway. Eight rigs are currently in operation at Queensway with the drill count planned to increase to ten rigs by Q3 2021. With a current working capital balance of approximately $76 million, New Found is well funded for this program.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 10 |
Contact
To contact the Company, please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further exploration and drilling on the Company’s Queensway gold project in Newfoundland, interpretation of results of the drilling program and funding of the drilling program. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated with possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s Annual Information Form and Management’s discussion and Analysis, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 11 |
Exhibit 99.22
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
June 23, 2021
Item 3: | News Release |
A news release was disseminated on June 23, 2021 through Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company provided assay results from four holes drilled at the Lotto Zone (“Lotto”), located approximately 2km north of the Keats Zone discovery. These holes were complete as part of the Company’s ongoing 200,00m diamond drill program at its 100% owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached as schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company at 604-562-9664 or croberts@newfoundgold.ca.
Item 9: | Date of Report |
June 23, 2021
Schedule “A”
New Found Intercepts
150.3 g/t Au over 11.5m at Lotto
Vancouver, BC, June 23, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce recently received assay results from four holes drilled at the Lotto Zone (“Lotto”), located approximately 2km north of the Keats Zone discovery. These holes were completed as part of the Company’s ongoing 200,000m diamond drill program at its 100% owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15km west of Gander, Newfoundland.
Highlights
· | Highlight intervals are summarized below. Additional results are provided in Table 2. |
Hole No. | From (m) | To (m) |
Interval
(m)* |
Au (g/t) | Zone | |||||||||||||
NFGC-21-89 | 80.85 | 99.65 | 18.80 | 1.64 | ||||||||||||||
NFGC-21-201 | 205.00 | 207.45 | 2.45 | 683.14 | Lotto Main | |||||||||||||
Within | 196.65 | 208.15 | 11.50 | 150.28 |
* Note that the true width of the mineralization is uncertain,
but host structures are interpreted to be steeply
dipping implying true widths in the range of 70% to 90% of reported intercepts. Intervals
are calculated at a 1
g/t Au cut-off grade and minimum width of 2m, grades have not been capped in the averaging.
· | The interval 683.1g/t Au over 2.45m within 150.3 g/t Au over 11.5m in NFGC-21-201 yields a grade x width (“g x w”) of 1,728 g/t Au x m more than 3x the previous highest g x w interval previously encountered at Lotto (hole NFGC-21-100, 2.45m at 224.7 g/t Au yielding 550 g/t Au x m). |
· | The drilling at Lotto has defined a zone of high-grade gold mineralization with good continuity to a depth of approximately 100m and open. This mineralization is hosted in an approximately 65o dipping vein filled structure (see the plan view, cross section, and long section in Figures 1, 2, and 3 below). The mineralization drilled at Lotto displays epizonal features that are similar to the high-grade gold mineralization encountered at Keats. |
· | The high-grade intervals reported to date occur in an interpreted north-south striking vein set, one of a network of multiple secondary north-south striking vein sets interpreted to date over a 300m x 200m area and open (see Figure 2) and open in all directions. The Company continues to test multiple additional targets at Lotto outside of the initial vein target. |
· | The interval of 18.8m at 1.64g/t in Hole NFGC-21-89 is approximately 80m northeast of the section plotted in Figure 2 and demonstrates potential for significant lateral extent to the gold mineralization in this vein. |
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 1 |
Greg Matheson, P.Geo., COO of New Found, stated: “The outstanding result from hole NFGC-21-201 demonstrates the potential for the definition of a significant discovery at Lotto. The grade x width of 1,728 g/t Au x m in NFGC-21-201 interval is comparable to the original high-grade discovery hole drilled in late 2019 at the Keats Zone 2km to the south of Lotto (hole NFGC-19-01:92.9 g/t Au over 19.0m, or a grade x width of 1,764g/t Au x m). We are continuing to test the high-grade zone at Lotto with step-out drilling along strike and to depth.
Lotto and Keats are just two of several high priority targets identified over 7.8km of strike along the Appleton Fault on the northern portion of the Queensway project. As we continue to explore these showings, we now have demonstrated that the high-grade intercepts are not isolated to just the Keats Zone and this takes us a significant step further in confirming the presence of repeated zones of high grade epizonal style mineralization along the Appleton Fault Zone.”
Figure 1. Lotto Plan View
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 2 |
Figure 2. Lotto Cross Section (looking north, 20m clipping, see A-A’ on Plan View, Figure 1)
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 3 |
Figure 3. Lotto Long Section (see B-B’ on Plan View, Figure 1)
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 4 |
Drill-hole Details
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-20-51 | 66.80 | 68.80 | 2.00 | 1.17 | Lotto Main | |||||||||||||
And | 121.20 | 123.30 | 2.10 | 1.03 | Lotto FW | |||||||||||||
And | 170.15 | 172.80 | 2.65 | 1.36 | ||||||||||||||
NFGC-21-89 | 66.80 | 69.10 | 2.30 | 1.10 | ||||||||||||||
And | 81.95 | 88.65 | 6.70 | 2.43 | Lotto Main | |||||||||||||
Within | 80.85 | 99.65 | 18.80 | 1.64 | ||||||||||||||
NFGC-21-96 | 169.55 | 171.65 | 2.10 | 1.38 | Lotto FW | |||||||||||||
And | 216.90 | 219.00 | 2.10 | 1.68 | ||||||||||||||
NFGC-21-201 | 205.00 | 207.45 | 2.45 | 683.14 | ||||||||||||||
Within | 196.65 | 208.15 | 11.50 | 150.28 | Lotto Main | |||||||||||||
And | 210.00 | 214.00 | 4.00 | 1.83 |
Table 2: Summary of results reported in this release
* Note that the true width of the mineralization is uncertain, but host structures are interpreted to be steeply dipping implying true widths in the range of 70%to 90% of reported intercepts. Intervals are calculated at a 1 g/t Au cut-off grade and minimum width of 2m, grades have not been capped in the averaging. |
Hole No. | Azimuth (°) | Dip (°) | Interval (m)* | UTM E | UTM N | |||||||||||||||
NFGC-20-51 | 300 | -45 | 235 | 658908 | 5429056 | |||||||||||||||
NFGC-21-89 | 300 | -45 | 294 | 658968 | 5429052 | |||||||||||||||
NFGC-21-96 | 300 | -45 | 238 | 658923 | 5428933 | |||||||||||||||
NFGC-21-201 | 300 | -45 | 241 | 659058 | 5428890 |
Table 3: Details of drill holes reported in this release
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 5 |
Photos of Drill Core
Figure 4. Photos of mineralization from NFGC-21-201, approximately 207m down hole depth
Note that these photos are not intended to be representative of gold mineralization in hole NFGC-21-201.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 6 |
Queensway 200,000m Drill Program Update
Approximately 55,000m of the 200,000m have been drilled to date; roughly 28,000m of core is pending assays. Eight rigs are currently turning, with a ninth on site and tenth to arrive by end of July.
Sampling, Sub-sampling and Laboratory
True widths of the intercepts reported in this press release have yet to be determined but are estimated to be 60% to 80% of reported core lengths. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Assays are uncut, and calculated intervals are reported over a minimum length of 2m using a lower cut-off of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia, or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control, and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer, and a Qualified Person as defined under National Instrument 43-101. Mr. Matheson consents to the publication of this news release dated June 23, 2021, by New Found. Mr. Matheson certifies that this news release fairly and accurately represents the information for which he is responsible.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15km west of Gander, Newfoundland, and just 18km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. The Company is currently undertaking a 200,000m drill program at Queensway. Eight rigs are currently in operation at Queensway with the drill count planned to increase to ten rigs by July 2021. With a current working capital balance of approximately $82 million, New Found is well funded for this program.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 7 |
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company, please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further exploration and drilling on the Company’s Queensway gold project in Newfoundland, interpretation of results of the drilling program and funding of the drilling program. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated with possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s Annual Information Form and Management’s discussion and Analysis, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
NEWFOUND GOLD CORP. |
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Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 8 |
Exhibit 99.23
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
June 15, 2021
Item 3: | News Release |
A news release was disseminated on June 15, 2021 through Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company provided assay results from an additional nine holes drilled at the Keats Zone (“Keats”). These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached as schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company at 604-562-9664 or croberts@newfoundgold.ca.
Item 9: | Date of Report |
June 15, 2021
Schedule “A”
New Found Intercepts 21.4 g/t Au over 8.05m and
14.9 g/t Au over 12.9m in 40m step-out at Keats,
Extends High-Grade Zone to 465m Down-Plunge
Vancouver, BC, June 15, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV:NFG, OTC: NFGFF) is pleased to announce assay results from an additional nine holes drilled at the Keats Zone (“Keats”). These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100% owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15km west of Gander, Newfoundland.
Highlights
· | Highlights include: |
Hole No. | From (m) | To (m) |
Interval (m)* |
Au (g/t) | Zone | |||||||||||||||
NFGC-21-94B | 169.75 | 173.55 | 3.80 | 11.69 | Keats Main | |||||||||||||||
NFGC-21-141 | 238.00 | 245.00 | 7.00 | 11.17 | Keats Main | |||||||||||||||
NFGC-21-165 | 296.45 | 298.50 | 2.05 | 20.74 | Keats Main | |||||||||||||||
NFGC-21-204 | 244.45 | 252.50 | 8.05 | 21.36 | ||||||||||||||||
And | 283.15 | 296.00 | 12.85 | 14.92 | Keats Main |
Table 1: Highlights
*Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 60% to 80% of reported intervals. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging. This table shows highlight intervals, a number of these holes returned additional intervals of gold mineralization as reported in Table 2 below.
· | The intervals of 21.4 g/t Au over 8.05m and 14.9 g/t Au over 12.9m in NFGC-21-204 is a 40m down-plunge step-out to the south from the previously furthest south high-grade intercept (hole NFGC-21-182, 146.2 g/t Au over 25.6m, see New Found news release dated May 21, 2021) and is the deepest assay interval returned to date at Keats (see Figure 1). |
· | The high-grade zone at Keats has now been drill defined over 465m in the down-plunge direction. The zone remains open and step-out drilling is continuing to the south, vertically above and below this zone, and to the north. |
Greg Matheson COO of New Found, stated: “The two intervals in NFGC-21-204 of 21.4 g/t Au over 8.05m and 14.9 g/t Au over 12.9m in a further 40m step-out down plunge demonstrates that the zone of high-grade gold at Keats is continuing and remains open to depth. The intervals in holes NFGC-21-94B, 141 and 165 provide further evidence of the continuity of the high-grade gold mineralization at Keats. The style of mineralization and spatial distribution of the high-grade gold continues to demonstrate features consistent with the emplacement of high-grade gold in an epizonal event. We now have four drills running at Keats continuing step-out drilling to the south as well as infilling the high-grade zone defined to date.”
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 1 |
Note: Au g/t x m calculations include all Keats Main intervals for each hole as reported in Table 2.
Highlight Keats Main Zone drill intervals:
Interva1 | Au | Interval | Au | Interval | Au | Interval | Au | |||||||||||||||||||||||||||||||||||||||
Hole | (m)* | (g/t) | Hole | (m)* | (g/t) | Hole | (m)* | (g/t) | Hole | (m)* | (g/t) | |||||||||||||||||||||||||||||||||||
19-01 | 19.0 | 92.9 | 20-38 | 5.8 | 19.8 | 20-56 | 32.3 | 6.2 | 21-103 | 3.5 | 19.3 | |||||||||||||||||||||||||||||||||||
20-18 | 7.9 | 24.1 | 20-40A | 7.3 | 19.3 | 20-59 | 4.7 | 131.1 | 21-104 | 11.4 | 29.1 | |||||||||||||||||||||||||||||||||||
20-19 | 18.9 | 31.2 | 20-41 | 10.4 | 22.5 | And | 17.7 | 124.4 | 21-105B | 2.0 | 41.8 | |||||||||||||||||||||||||||||||||||
20-21 | 18.4 | 15.8 | And | 15.9 | 31.4 | 21-74 | 4.1 | 45.6 | 21-118 | 13.7 | 61.8 | |||||||||||||||||||||||||||||||||||
20-23 | 41.4 | 22.3 | 20-43 | 18.2 | 10.0 | 21-79 | 7.9 | 22.7 | 21-119 | 7.0 | 15.6 | |||||||||||||||||||||||||||||||||||
20-26 | 6.9 | 44.5 | 20-45 | 13.8 | 28.4 | 21-80 | 39.1 | 25.8 | 21-122 | 9.2 | 106.5 | |||||||||||||||||||||||||||||||||||
20-28 | 4.1 | 40.1 | And | 3.3 | 20.6 | And | 2.3 | 41.6 | 21-137 | 7.2 | 261.3 | |||||||||||||||||||||||||||||||||||
20-29 | 16.9 | 25.0 | And | 2.0 | 17.1 | 21-85 | 3.0 | 49.4 | 21-143 | 2.5 | 16.9 | |||||||||||||||||||||||||||||||||||
20-30 | 6.1 | 10.3 | 20-46 | 2.9 | 13.7 | 21-87 | 4.7 | 27.8 | And | 8.4 | 63.7 | |||||||||||||||||||||||||||||||||||
20-32 | 13.1 | 45.3 | 20-52 | 2.1 | 136.7 | 21-90 | 3.9 | 24.5 | 21-182 | 25.6 | 146.2 | |||||||||||||||||||||||||||||||||||
20-34 | 2.4 | 29.3 | And | 14.1 | 31.5 | 21-97 | 6.5 | 37.1 | 21-204 | 8.1 | 21.4 | |||||||||||||||||||||||||||||||||||
20-37 | 10.3 | 25.0 | And | 5.6 | 13.7 | 21-101 | 8.5 | 17.9 | And | 12.9 | 14.9 |
Figure 1. Keats Main Zone Long Section
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 2 |
Figure 2. Keats Plan View
*With reference to Figures 1 and 2 and the accompanying highlight table above, note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 60% to 80% of reported intervals. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 3 |
Core Photos, Holes NFGC-21-165 and NFGC-21-204
From NFGC-21-165 drill core interval approximately 297m down hole
From NFGC-21-204 drill core interval approximately 290m down hole
Figure 3. Example gold mineralization from NFGC-21-165 and NFGC-21-204
Note that these photos are not intended to be representative of gold mineralization in holes NFGC-21-165 and 204.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 4 |
Drillhole Details
Hole No. | From (m) | To (m) |
Interval (m)* |
Au (g/t) | Zone | |||||||||||||||
NFGC-21-91 | 143.00 | 145.50 | 2.50 | 1.30 | Keats Main | |||||||||||||||
NFGC-21.94B | 169.75 | 173.55 | 3.80 | 11.69 | ||||||||||||||||
Within | 166.45 | 176.35 | 9.90 | 6.18 | Keats Main | |||||||||||||||
NFGC-21-95 | 19.15 | 21.70 | 2.55 | 1.50 | ||||||||||||||||
And | 48.20 | 53.20 | 5.00 | 2.36 | Keats FW | |||||||||||||||
NFGC-21-125 | 82.60 | 84.90 | 2.30 | 4.92 | Keats FW | |||||||||||||||
NFGC-21-127 | 37.00 | 39.00 | 2.00 | 6.11 | ||||||||||||||||
Within | 37.00 | 51.00 | 14.00 | 1.47 | Keats Main | |||||||||||||||
NFGC-21-135 | 209.45 | 223.90 | 14.45 | 2.77 | ||||||||||||||||
And | 295.10 | 298.15 | 3.05 | 1.40 | Keats Main | |||||||||||||||
NFGC-21-141 | 219.60 | 232.30 | 12.70 | 1.87 | ||||||||||||||||
And | 238.00 | 245.00 | 7.00 | 11.17 | Keats Main | |||||||||||||||
And | 248.55 | 251.25 | 2.70 | 2.01 | ||||||||||||||||
And | 301.55 | 304.25 | 2.70 | 1.61 | ||||||||||||||||
NFGC-21-165 | 266.70 | 268.80 | 2.10 | 1.09 | ||||||||||||||||
And | 296.45 | 298.50 | 2.05 | 20.74 | Keats Main | |||||||||||||||
NFGC-21-204 | 244.45 | 252.50 | 8.05 | 21.36 | ||||||||||||||||
And | 283.15 | 296.00 | 12.85 | 14.92 | Keats Main |
Table 2: Summary of results reported in this release
*Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 60% to 80% of reported intervals. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
Hole No. | Azimuth (°) | Dip(°) | Interval (m)* | UTME | UTMN | |||||||||||||||
NFGC-21-91 | 299 | -46 | 186 | 658169 | 5427376 | |||||||||||||||
NFGC-21-94B | 300 | -45 | 234 | 658201 | 5427357 | |||||||||||||||
NFGC-21-95 | 300 | -45 | 230 | 658272 | 5427606 | |||||||||||||||
NFGC-21-125 | 300 | -45 | 107 | 658257 | 5427527 | |||||||||||||||
NFGC-21-127 | 300 | -45 | 122 | 658246 | 5427534 | |||||||||||||||
NFGC-21-135 | 300 | -45 | 336 | 658179 | 5427269 | |||||||||||||||
NFGC-21-141 | 300 | -45 | 318 | 658190 | 5427263 | |||||||||||||||
NFGC-21-165 | 300 | -45 | 345 | 658181 | 5427196 | |||||||||||||||
NFGC-21-204 | 297 | -56 | 404 | 658145 | 5427194 |
Table 3: Location details of drill holes reported on in this release
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 5 |
Sampling, Sub-sampling and Laboratory
True widths of the intercepts reported in this press release have yet to be determined but are estimated to be 60% to 80% of reported core lengths. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cut-off of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia, or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer, and a Qualified Person as defined under National Instrument 43-101. Mr. Matheson consents to the publication of this news release dated June 15, 2021, by New Found. Mr. Matheson certifies that this news release fairly and accurately represents the information for which he is responsible.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15km west of Gander, Newfoundland, and just 18km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. The Company is currently undertaking a 200,000m drill program at Queensway. Eight rigs are currently in operation at Queensway with the drill count planned to increase to ten rigs by Q2 2021. With a current working capital balance of approximately $86 million, New Found is well funded for this program.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 6 |
Contact
To contact the Company, please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further exploration and drilling on the Company’s Queensway gold in Newfoundland, interpretation of results of the drilling program and funding of the drilling program. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could,” or “should,” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in those forward-looking statements include risk associated with possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s Annual Information Form and Management’s discussion and Analysis, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 7 |
Exhibit 99.24
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
May 17, 2021
Item 3: | News Release |
A news release was disseminated on May 17, 2021 through Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company announced it has granted incentive stock options to a director of the Company to acquire 200,000 common shares in the capital of the Company at an exercise price of $8.62 in accordance with the Company’s 10% rolling incentive stock option plan.
Item 5: | Full Description of Material Change |
The Company announced t has granted incentive stock options to a director of the Company to acquire 200,000 common shares in the capital of the Company at an exercise price of $8.62 (the “Options”) in accordance with the Company’s 10% rolling incentive stock option plan. The Options are exercisable for a five-year term expiring May 17, 2026. The grant of the Options is subject to disinterested shareholder approval and approval of the TSX Venture Exchange. The Company intends to seek such shareholder approval at its next annual meeting of shareholders.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director at 604.562.9664 or croberts@newfoundgold.ca.
Item 9: | Date of Report |
May 26, 2021
Exhibit 99.21(b)
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
May 21, 2021
Item 3: | News Release |
A news release was disseminated on May 21, 2021 through Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company announced assay results from an additional four holes drilled at the Keats Zone. These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project located on the Trans-Canada Highway 15km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached as schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director at 604.562.9664 or croberts@newfoundgold.ca.
Item 9: | Date of Report |
May 26, 2021
Schedule “A” |
New Found Intercepts 146.2 g/t Au over 25.6m in
65m step-out to South at Keats, Extends High-Grade
Zone to 425m Down-Plunge
Vancouver, BC, May 21, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce assay results from an additional four holes drilled at the Keats Zone (“Keats”). These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15km west of Gander, Newfoundland.
Highlights
· | Highlights include: |
Hole No. | From (m) | To (m) |
Interval
(m)* |
Au (g/t) | Zone | |||||||||||||
NFGC-21-131 | 27.70 | 32.65 | 4.95 | 7.75 | Keats Main | |||||||||||||
Within | 27.70 | 49.80 | 22.10 | 2.31 | ||||||||||||||
NFGC-21-133 | 44.00 | 46.00 | 2.00 | 11.26 | Keats Main | |||||||||||||
NFGC-21-139 | 80.00 | 82.45 | 2.45 | 5.30 | Keats Main | |||||||||||||
And | 153.60 | 155.70 | 2.10 | 2.05 | Keats FW | |||||||||||||
NFGC-21-182 | 291.00 | 316.60 | 25.60 | 146.24 | ||||||||||||||
Within | 285.85 | 321.25 | 35.40 | 106.20 | Keats Main | |||||||||||||
And | 345.00 | 361.90 | 16.90 | 1.07 |
*Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 60% to 80% of reported intervals. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging. This table shows highlight intervals, a number of these holes returned additional intervals of gold mineralization as reported in Table 2 below.
· | The interval of 146.2 g/t Au over 25.6m in NFGC-21-182 is a 65m down-plunge step-out to the south from the previously furthest south high-grade intercept (hole NFGC-21-143, 63.7 g/t Au over 8.4m and 16.9 g/t Au over 2.5m, see New Found news release April 27, 2021) and is the deepest assay interval returned to date at Keats (see Figure 1). |
· | The high-grade zone at Keats has now been drill defined over 425m in the down-plunge direction. The zone remains open and step-out drilling is continuing to the south, vertically above and below this zone, and to the north. |
Denis Laviolette President of New Found, stated: “The interval of 146.2g/t over 25.6m in hole NFGC-21-182 has a grade x width of over 3,700 g/t Au x m, the highest to date on this metric at Keats, benchmarked against a long list of outstanding holes. Very significantly, as a step out 65m down plunge and as the furthest down-plunge hole and the deepest assay interval returned to date at Keats, this hole demonstrates that the outstanding zone of high-grade gold at Keats is continuing and perhaps strengthening with depth. We couldn’t be more excited to be continuing to intercept such a phenomenal interval on such a large step-out down plunge at Keats and this continues to build our confidence that Keats is a very significant high-grade gold discovery. ”
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 1 |
Note: Au g/t x m calculations include all Keats Main intervals for each hole as reported in Table 2.
Interval | Au | Interval | Au | Interval | Au | Interval | Au | |||||||||||||||||||||||||||||||||||
Hole | (m) | (g/t) | Hole | (m) | (g/t) | Hole | (m) | (g/t) | Hole | (m) | (g/t) | |||||||||||||||||||||||||||||||
19-01 | 19.0 | 92.9 | 20-38 | 5.8 | 19.8 | 20-56 | 32.3 | 6.2 | 21-103 | 3.5 | 19.3 | |||||||||||||||||||||||||||||||
20-18 | 7.9 | 24.1 | 20-40A | 7.3 | 19.3 | 20-59 | 4.7 | 131.1 | 21-104 | 11.4 | 29.1 | |||||||||||||||||||||||||||||||
20-19 | 18.9 | 31.2 | 20-41 | 10.4 | 22.5 | And | 17.7 | 124.4 | 21-105B | 2.0 | 41.8 | |||||||||||||||||||||||||||||||
20-21 | 18.4 | 15.8 | And | 15.9 | 31.4 | 21-74 | 4.1 | 45.6 | 21-118 | 13.7 | 61.8 | |||||||||||||||||||||||||||||||
20-23 | 41.4 | 22.3 | 20-43 | 18.2 | 10.0 | 21-79 | 7.9 | 22.7 | 21-119 | 7.0 | 15.6 | |||||||||||||||||||||||||||||||
20-26 | 6.9 | 44.5 | 20-45 | 13.8 | 28.4 | 21-80 | 39.1 | 25.8 | 21-122 | 9.2 | 106.5 | |||||||||||||||||||||||||||||||
20-28 | 4.1 | 40.1 | And | 3.3 | 20.6 | And | 2.3 | 41.6 | 21-137 | 7.2 | 261.3 | |||||||||||||||||||||||||||||||
20-29 | 16.9 | 25.0 | And | 2.0 | 17.1 | 21-85 | 3.0 | 49.4 | 21-143 | 2.5 | 16.9 | |||||||||||||||||||||||||||||||
20-30 | 6.1 | 10.3 | 20-46 | 2.9 | 13.7 | 21-87 | 4.7 | 27.8 | And | 8.4 | 63.7 | |||||||||||||||||||||||||||||||
20-32 | 13.1 | 45.3 | 20-52 | 2.1 | 136.7 | 21-90 | 3.9 | 24.5 | 21-182 | 25.6 | 146.2 | |||||||||||||||||||||||||||||||
20-34 | 2.4 | 29.3 | And | 14.1 | 31.5 | 21-97 | 6.5 | 37.1 | ||||||||||||||||||||||||||||||||||
20-37 | 10.3 | 25.0 | And | 5.6 | 13.7 | 21-101 | 8.5 | 17.9 |
Figure 1. Keats Main Zone Long Section
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 2 |
Figure 2. Keats Plan View
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 3 |
Core Photos, Hole NFGC-21-182
Figure 3. Example gold mineralization from NFGC-21-182
From drill core interval between 285m and 321m down hole. Note that these photos are not intended to be representative of gold mineralization in hole NFGC- 21-182.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 4 |
Figure 3 (continued). Example gold mineralization from NFGC-21-182
From drill core interval between 285m and 321m down hole. Note that these photos are not intended to be representative of gold mineralization in hole NFGC- 21-182.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 5 |
Drillhole Details
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||||
NFGC-21-131 | 9.65 | 11.85 | 2.20 | 1.00 | ||||||||||||||||
And | 27.70 | 32.65 | 4.95 | 7.75 | Keats Main | |||||||||||||||
Within | 27.70 | 49.80 | 22.10 | 2.31 | ||||||||||||||||
NFGC-21-133 | 44.00 | 46.00 | 2.00 | 11.26 | Keats Main | |||||||||||||||
And | 65.75 | 71.00 | 5.25 | 1.79 | ||||||||||||||||
NFGC-21-139 | 47.90 | 50.10 | 2.20 | 1.02 | ||||||||||||||||
And | 80.00 | 82.45 | 2.45 | 5.30 | Keats Main | |||||||||||||||
Within | 80.00 | 88.90 | 8.90 | 2.19 | ||||||||||||||||
And | 153.60 | 155.70 | 2.10 | 2.05 | Keats FW | |||||||||||||||
NFGC-21-182 | 291.00 | 316.60 | 25.60 | 146.24 | ||||||||||||||||
Within | 285.85 | 321.25 | 35.40 | 106.20 | Keats Main | |||||||||||||||
And | 345.00 | 361.90 | 16.90 | 1.07 |
Table 2: Summary of results reported in this release.
*Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 60% to 80% of reported intervals. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-21-131 | 300 | -45 | 138 | 658175 | 5427487 | |||||||||||||||
NFGC-21-133 | 300 | -45 | 149 | 658166 | 5427465 | |||||||||||||||
NFGC-21-139 | 300 | -45 | 170 | 658139 | 5427423 | |||||||||||||||
NFGC-21-182 | 300 | -48 | 381 | 658181 | 5427196 |
Table 3: Location details of drill holes reported on in this release.
Sampling, Sub-sampling and Laboratory
True widths of the intercepts reported in this press release have yet to be determined but are estimated to be 60% to 80% of reported core lengths. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional variability in true width. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cut-off of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia, or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 6 |
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer, and a Qualified Person as defined under National Instrument 43-101. Mr. Matheson consents to the publication of this news release dated May 21, 2021 by New Found. Mr. Matheson certifies that this news release fairly and accurately represents the information for which he is responsible.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15km west of Gander, Newfoundland, and just 18km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. The Company is currently undertaking a 200,000m drill program at Queensway. Seven rigs are currently in operation at Queensway with the drill count planned to increase to ten rigs by Q2 2021. With a current working capital balance of approximately $79 million, New Found is well funded for this program.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company, please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 7 |
Forward-Looking Statement Cautions
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective, “and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should1 occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 8 |
Exhibit 99.25
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
May 11, 2021
Item 3: | News Release |
A news release was disseminated on May 11, 2021 through Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company announced the appointment of Mr. Douglas Hurst as a director of the Company effective immediately.
Item 5: | Full Description of Material Change |
The Company announced the appointment of Mr. Douglas Hurst as a director of the Company effective immediately.
Mr. Hurst was part of the founding group of Newmarket Gold, which, following discovery of the high-grade Swan Zone at the company’s Fosterville mine, was sold to Kirkland Lake Gold in 2016 for approximately $1 billion.
He is a serially successful mining entrepreneur and executive. He founded International Royalty Corporation, which was sold to Royal Gold for approximately $700 million in 2010.
Mr. Hurst holds a Bachelor of Science in geology from McMaster University (1986) and has over 30 years of experience in the mining industry as a geologist, consultant, mining analyst, and senior executive. He was a mining analyst with McDermid St. Lawrence, Sprott Securities and a contract analyst to Pacific International Securities and Octagon Capital up until 1995. From 1995 to 2003 Mr. Hurst operated D.S. Hurst Inc. a company offering corporate, evaluation and financing consulting services to the mining industry. He was a founder and executive of International Royalty Corporation from 2003 to 2006, and a director until 2010 when the company was purchased by Royal Gold for approximately $700 million. Mr. Hurst was also part of the founding group of Newmarket Gold, which was sold to Kirkland Lake Gold in 2016 for approximately $1 billion. Mr. Hurst currently serves as the Chairman of Northern Vertex Mining and as a director of both Calibre Mining and Newcore Gold.
The Company also announced the resignation of Mr. John Anderson as a director of the Company effectively immediately.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer & Director at 604.562.9664 or croberts@newfoundgold.ca.
Item 9: | Date of Report |
May 12, 2021
Exhibit 99.26
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
May 4, 2021
Item 3: | News Release |
A news release was disseminated on May 4, 2021 through Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company provided assay results from an additional four holes drilled at the Keats Zone. These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project, located on the Trans-Canada Highway 15km west of Gander, Newfoundland
Item 5: | Full Description of Material Change |
Please see the news release attached as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer & Director at 604.562.9664 or croberts@newfoundgold.ca.
Item 9: | Date of Report |
May 4, 2021
Schedule “A” |
New Found Intercepts 124.4 g/t Au Over 17.7m and
131.1 g/t Au over 4.65m at Keats
Vancouver, BC, May 4, 2021: New Found Gold Corp. (“New Found” or the “Company) (TSXV: NFG, OTC: NFGFF) is pleased to announce assay results from an additional four holes drilled at the Keats Zone (“Keats”). These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15km west of Gander, Newfoundland.
Highlights
· | Highlights include: |
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | ||||||||||||
NFGC-20-59 | 38.65 | 43.30 | 4.65 | 131.09 | ||||||||||||
And | 71.75 | 89.45 | 17.70 | 124.44 | ||||||||||||
NFGC-20-63 | 15.95 | 18.00 | 2.05 | 1.33 | ||||||||||||
NFGC-20-64 | 112.60 | 115.10 | 2.50 | 2.77 | ||||||||||||
NFGC-21-105B | 256.00 | 258.00 | 2.00 | 41.84 | ||||||||||||
*Note that the host structures are interpreted to be steeply dipping and true widths are estimated to be 70% to 80% of reported intervals. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging. This table shows highlight intervals, a number of these holes returned additional intervals of gold mineralization as reported in Table 2 below.
· | The intervals of 131.1 g/t Au over 4.65m and 124.4 g/t over 17.7m in Hole NFGC-20-59 start at a vertical depth of approximately 27m and continue to approximately 63m vertical depth. These intervals provide further drill confirmation of a broad zone of near surface, high-grade gold mineralization at the north end of Keats (Figure 1). |
· | The interval of 41.8 g/t over 2.00m in hole NFGC-21-105B provides further drill confirmation of the continuity of high-grade gold mineralization from sub-crop at bedrock surface at the north of Keats to the furthest interval 350m down plunge at approximately 170m vertical depth (see NFGC-21 -143, 16.9 g/t Au over 2.5m and 63.7 g/t over 8.45m, Figure 1). |
· | Step-out drilling at Keats continues down plunge. Holes NFGC-21-165 and NFGC-21-182 are the deepest holes completed to date testing to approximately 425m in the down plunge direction. Infill drilling also continues particularly targeting between the plunging dilation zone and surface (Figure 1). |
Greg Matheson, P.Geo., Chief Operating Officer of New Found, stated: “The outstanding intervals of 131.1 g/t Au over 4.65m plus 124.4 g/t over 17.7m in Hole NFGC-20-59 yield the highest width x grade of any hole to date at Keats (cumulative +2800 m*g/t). These intervals provide further drill confirmation of the substantial zone of near surface high-grade gold mineralization at the north end of Keats. We continue our infill and step-out drilling at Keats and look forward to reporting further results in the near future.’’
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 1 |
Note: Au g/t x m calculations include all Keats Main intervals for each hole as reported in Table 2.
Interval | Au | Interval | Au | Interval | Au | Interval | Au | ||||||||||||||||||||||||||||||
Hole | (m) | (g/t) | Hole | (m) | (g/t) | Hole | (m) | (g/t) | Hole | (m) | (g/t) | ||||||||||||||||||||||||||
19-01 | 19.0 | 92.9 | 20-38 | 5.8 | 19.8 | 20-56 | 32.3 | 6.2 | 21-103 | 3.5 | 19.3 | ||||||||||||||||||||||||||
20-18 | 7.9 | 24.1 | 20-40A | 7.3 | 19.3 | 20-59 | 4.7 | 131.1 | 21-104 | 11.4 | 29.1 | ||||||||||||||||||||||||||
20-19 | 18.9 | 31.2 | 20-41 | 10.4 | 22.5 | And | 17.7 | 124.4 | 21-105B | 2.0 | 41.8 | ||||||||||||||||||||||||||
20-21 | 18.4 | 15.8 | And | 15.9 | 31.4 | 21-74 | 4.1 | 45.6 | 21-118 | 13.7 | 61.8 | ||||||||||||||||||||||||||
20-23 | 41.4 | 22.3 | 20-43 | 18.2 | 10.0 | 21-79 | 7.9 | 22.7 | 21-119 | 7.0 | 15.6 | ||||||||||||||||||||||||||
20-26 | 6.9 | 44.5 | 20-45 | 13.8 | 28.4 | 21-80 | 39.1 | 25.8 | 21-122 | 9.2 | 106.5 | ||||||||||||||||||||||||||
20-28 | 4.1 | 40.1 | And | 3.3 | 20.6 | And | 2.3 | 41.6 | 21-137 | 7.2 | 261.3 | ||||||||||||||||||||||||||
20-29 | 16.9 | 25.0 | And | 2.0 | 17.1 | 21-85 | 3.0 | 49.4 | 21-143 | 2.5 | 16.9 | ||||||||||||||||||||||||||
20-30 | 6.1 | 10.3 | 20-46 | 2.9 | 13.7 | 21-87 | 4.7 | 27.8 | And | 8.4 | 63.7 | ||||||||||||||||||||||||||
20-32 | 13.1 | 45.3 | 20-52 | 2.1 | 136.7 | 21-90 | 3.9 | 24.5 | |||||||||||||||||||||||||||||
20-34 | 2.4 | 29.3 | And | 14.1 | 31.5 | 21-97 | 6.5 | 37.1 | |||||||||||||||||||||||||||||
20-37 | 10.3 | 25.0 | And | 5.6 | 13.7 | 21-101 | 8.5 | 17.9 |
Figure 1. Keats Main Zone Long Section
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 2 |
Figure 2. Keats Plan View
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 3 |
Drillhole Details
Hole No. | From (m) | To (m) |
Interval
(m)* |
Au (g/t) | Zone | |||||||||||||
NFGC-20-59 | 38.65 | 43.30 | 4.65 | 131.09 | ||||||||||||||
And | 60.55 | 64.80 | 4.25 | 1.10 | ||||||||||||||
And | 67.55 | 69.60 | 2.05 | 1.00 | Keats Main | |||||||||||||
And | 71.75 | 89.45 | 17.70 | 124.44 | ||||||||||||||
And | 94.80 | 97.55 | 2.75 | 1.68 | ||||||||||||||
NFGC-20-63 | 15.95 | 18.00 | 2.05 | 1.33 | Keats Main | |||||||||||||
And | 105.00 | 107.00 | 2.00 | 1.59 | ||||||||||||||
And | 214.95 | 217.30 | 2.35 | 3.26 | Keats FW | |||||||||||||
NFGC-20-64 | 93.00 | 95.10 | 2.10 | 1.01 | ||||||||||||||
And | 112.60 | 115.10 | 2.50 | 2.77 | Keats Main | |||||||||||||
NFGC-21-105B | 179.65 | 190.30 | 10.65 | 1.18 | ||||||||||||||
And | 195.75 | 198.00 | 2.25 | 1.26 | ||||||||||||||
And | 241.25 | 244.05 | 2.80 | 1.68 | Keats Main | |||||||||||||
And | 256.00 | 258.00 | 2.00 | 41.84 |
Table 2: Summary of results reported in this release.
*Note that the host structures are interpreted to be steeply dipping and true widths are estimated to be 70% to 80% of reported intervals. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-59 | 300 | -45 | 159 | 658243 | 5427495 | |||||||||||||||
NFGC-20-63 | 300 | -45 | 346 | 657986 | 5427309 | |||||||||||||||
NFGC-20-64 | 300 | -45 | 150 | 658208 | 5427442 | |||||||||||||||
NFGC-21-105B | 300 | -45 | 288 | 658232 | 5427340 |
Table 3: Location details of drill holes reported on in this release.
Sampling, Sub-sampling and Laboratory
True widths of the intercepts reported in this press release have yet to be determined but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cut-off of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia, or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 4 |
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P Geo., Chief Operating Officer, and a Qualified Person as defined under National Instrument 43-101. Mr. Matheson consents to the publication of this news release dated May 4, 2021 by New Found. Mr. Matheson certifies that this news release fairly and accurately represents the information for which he is responsible.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15km west of Gander, Newfoundland, and just 18km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. The Company is currently undertaking a 200,000m drill program at Queensway. Seven rigs are currently in operation at Queensway with the drill count planned to increase to ten rigs by the end of May 2021. With a current working capital balance of approximately $74 million, New Found is well funded for this program.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company, please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, PEng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 5 |
Forward-Looking Statement Cautions
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 6 |
Exhibit 99.27
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
April 27, 2021
Item 3: | News Release |
A news release was disseminated on April 27, 2021 through Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company provided assay results from an additional four holes drilled at the Keats Zone. These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project, located on the Trans-Canada Highway 15km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer & Director at 604.562.9664 or croberts@newfoundgold.ca.
Item 9: | Date of Report |
April 27, 2021
Schedule “A”
New Found Intercepts
63.7 g/t Au over 8.45m and 16.9 g/t Au
Over 2.5m
in 50m Step-out to South at Keats
Vancouver, BC, April 27, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce assay results from an additional four holes drilled at the Keats Zone (“Keats”). These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15km west of Gander, Newfoundland.
Highlights
• | Highlights include: |
Hole No. | From (m) | To (m) |
Interval
(m)* |
Au (g/t) | Zone | |||||||||||||
NFGC-21-111 | 229.00 | 238.20 | 9.20 | 1.48 | Keats Main | |||||||||||||
NFGC-21-113 | 47.00 | 49.55 | 2.55 | 2.52 | Keats Main | |||||||||||||
NFGC-21-123 | 260.00 | 262.50 | 2.50 | 8.41 | Keats FW | |||||||||||||
NFGC-21-143 | 239.00 | 241.50 | 2.50 | 16.93 | Keats Main | |||||||||||||
And | 257.45 | 265.90 | 8.45 | 63.71 |
*Note that the host structures are interpreted to be steeply dipping and true widths are estimated to be 70% to 80% of reported intervals. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging. This table shows highlight intervals, a number of these holes returned additional intervals of gold mineralization as reported in Table 2 below.
• | The intervals of 63.7 g/t Au over 8.45m plus 16.9 g/t over 2.5m in Hole NFGC-21-143 extend the drill confirmed high-grade zone at Keats to 350m in the down plunge direction where it remains open (Figure 1). The combined width x grade of these two intervals is an outstanding 581mxg/t. |
• | The interval of 12.5 g/t over 2.55m in hole NFGC-21-113 further expands the drill defined near surface high grade mineralization at the north end of Keats (Figure 1). |
• | Hole NFGC-21-123 returned 8.4 g/t Au over 2.5m in the Keats footwall veining, providing further confirmation of significant gold mineralization in the footwall of the primary Keats Baseline Fault (Figures 1 and 2). Holes extended into the footwall area consistently return significant gold mineralization above the 1 g/t threshold utilized for reporting results, and multiple intervals now demonstrate potential to drill define higher grade zones in this footwall area. |
Greg Matheson, P.Geo., Chief Operating Officer of New Found, stated: “The intervals of 63.7 g/t Au over 8.45m and 16.9 g/t over 2.5m in Hole NFGC-21-143 extend the Keats high-grade zone approximately 50m down plunge from the deepest previously reported hole NFGC-21-118, which returned 61.8 g/t over 13.7m. We are very encouraged that we continue to hit high grade as we step out in this direction, with the zone remaining wide open in the down plunge direction. The interpreted south plunging dilation zone is now drill defined over 350m down plunge and two drills are continuing step-outs in this direction, with results pending from several additional holes in the down plunge direction (Figure 1). Drilling has also continued to intercept high-grade gold mineralization outside of this dilation zone within the broader host Keats Baseline fault zone, particularly between this dilation zone and surface, and one drill is dedicated to infilling this area. We are excited that the size of the drill defined high grade gold mineralization at Keats continues to build with the ongoing step out and infill drilling.”
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 1 |
Note: Au g/t x m calculations include all Keats Main intervals for each hole as reported in Table 2.
Highlight Keats Main Zone drill intervals for reference
Interval | Au | Interval | Au | Interval | Au | Interval | Au | |||||||||||||||||||||||||||||||||||
Hole | (m) | (g/t) | Hole | (m) | (g/t) | Hole | (m) | (g/t) | Hole | (m) | (g/t) | |||||||||||||||||||||||||||||||
19-01 | 19.0 | 92.9 | 20-37 | 10.3 | 25.0 | 20-52 | 2.1 | 136.7 | 21-90 | 3.9 | 24.5 | |||||||||||||||||||||||||||||||
20-18 | 7.9 | 24.1 | 20-38 | 5.8 | 19.8 | And | 14.1 | 31.5 | 21-97 | 6.5 | 37.1 | |||||||||||||||||||||||||||||||
20-19 | 18.9 | 31.2 | 20-40A | 7.3 | 19.3 | And | 5.6 | 13.7 | 21-101 | 8.5 | 17.9 | |||||||||||||||||||||||||||||||
20-21 | 18.4 | 15.8 | 20-41 | 10.4 | 22.5 | 20-56 | 32.3 | 6.2 | 21-103 | 3.5 | 19.3 | |||||||||||||||||||||||||||||||
20-23 | 41.4 | 22.3 | And | 15.9 | 31.4 | 21-74 | 4.1 | 45.6 | 21-104 | 11.4 | 29.1 | |||||||||||||||||||||||||||||||
20-26 | 6.9 | 44.5 | 20-43 | 18.2 | 10.0 | 21-79 | 7.9 | 22.7 | 21-118 | 13.7 | 61.8 | |||||||||||||||||||||||||||||||
20-28 | 4.1 | 40.1 | 20-45 | 13.8 | 28.4 | 21-80 | 39.1 | 25.8 | 21-119 | 7.0 | 15.6 | |||||||||||||||||||||||||||||||
20-29 | 16.9 | 25.0 | And | 3.3 | 20.6 | And | 2.3 | 41.6 | 21-122 | 9.2 | 106.5 | |||||||||||||||||||||||||||||||
20-30 | 6.1 | 10.3 | And | 2.0 | 17.1 | 21-85 | 3.0 | 49.4 | 21-137 | 7.2 | 261.3 | |||||||||||||||||||||||||||||||
20-32 | 13.1 | 45.3 | 20-46 | 2.9 | 13.7 | 21-87 | 4.7 | 27.8 | 21-143 | 2.5 | 16.9 | |||||||||||||||||||||||||||||||
20-34 | 2.4 | 29.3 | And | 8.4 | 63.7 |
Figure 1. Keats Main Zone Long Section
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 2 |
Figure 2. Keats Plan View
Drillhole Details
Hole No. | From (m) | To (m) |
Interval
(m)* |
Au (g/t) | Zone | |||||||||||||
NFGC-21-111 | 229.00 | 238.20 | 9.20 | 1.48 | Keats Main | |||||||||||||
And | 278.00 | 280.70 | 2.70 | 1.49 | ||||||||||||||
NFGC-21-113 | 47.00 | 49.55 | 2.55 | 12.52 | Keats Main | |||||||||||||
NFGC-21-123 | 167.60 | 169.60 | 2.00 | 2.46 | Keats FW | |||||||||||||
And | 260.00 | 262.50 | 2.50 | 8.41 | Keats FW | |||||||||||||
NFGC-21-143 | 239.00 | 241.50 | 2.50 | 16.93 | ||||||||||||||
within | 239.00 | 246.90 | 7.90 | 6.21 | ||||||||||||||
And | 257.45 | 265.90 | 8.45 | 63.71 | Keats Main | |||||||||||||
within | 256.45 | 268.00 | 11.55 | 46.95 | ||||||||||||||
And | 281.90 | 288.00 | 6.10 | 1.01 | ||||||||||||||
And | 324.00 | 326.00 | 2.00 | 1.12 | Keats FW |
Table 2: Summary of results reported in this release.
*Note that the host structures are interpreted to be steeply dipping and true widths are estimated to be 70% to 80% of reported intervals. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 3 |
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-21-111 | 300 | -45 | 297 | 658242 | 5427276 | |||||||||||||||
NFGC-21-113 | 300 | -45 | 143 | 658210 | 5427497 | |||||||||||||||
NFGC-21-123 | 120 | -45 | 723 | 657821 | 5427519 | |||||||||||||||
NFGC-21-143 | 300 | -45 | 343 | 658192 | 5427240 |
Table 3: Location details of drill holes reported on in this release.
Sampling, Sub-sampling and Laboratory
True widths of the intercepts reported in this press release have yet to be determined but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cut-off of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia, or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer, and a Qualified Person as defined under National Instrument 43-101. Mr. Matheson consents to the publication of this news release dated April 27, 2021 by New Found. Mr. Matheson certifies that this news release fairly and accurately represents the information for which he is responsible.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. The Company is currently undertaking a 200,000m drill program at Queensway. Seven rigs are currently in operation with the eighth expected to start in the next several weeks. With a current working capital balance of approximately $75 million, New Found is well funded for this program.
Please see the Company’s website at www.newfoundqold.ca and the Company’s SEDAR profile at www.sedar.com.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 4 |
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company, please visit the Company’s website, www.newfoundqold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,’’ “anticipates,” “believes,’’ “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 5 |
Exhibit 99.28
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
April 20, 2021
Item 3: | News Release |
A news release was disseminated on April 20, 2021 through Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company provided assay results from an additional seven holes drilled at the Keats Zone. These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project, located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached as schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer & Director at 604.562.9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
April 20, 2021
Schedule “A”
Keats Infill Drilling Returns 261.3 g/t Au over 7.2m,
Queensway Program Expanded to 10 Drills
Vancouver, BC, April 20, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce assay results from an additional seven holes drilled at the Keats Zone (“Keats”). These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Highlights
· | Highlights include: |
Hole No. | From (m) | To (m) |
Interval (m)* |
Au (g/t) | ||||||||||||
NFGC-20-57 | 71.00 | 73.45 | 2.45 | 19.25 | ||||||||||||
NFGC-20-60 | 136.90 | 140.30 | 3.40 | 8.46 | ||||||||||||
NFGC-20-62 | NSR | |||||||||||||||
NFGC-21-103 | 236.50 | 240.00 | 3.50 | 19.28 | ||||||||||||
NFGC-21-106 | 220.70 | 223.20 | 2.50 | 9.49 | ||||||||||||
NFGC-21-114 | 212.35 | 214.50 | 2.15 | 15.58 | ||||||||||||
NFGC-21-137 | 71.50 | 78.70 | 7.20 | 261.33 |
*Note that the host structures are interpreted to be steeply dipping and true widths are estimated to be 70% to 80% of reported intervals. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging. This table shows highlight intervals, a number of these holes returned additional intervals of gold mineralization and as reported in Table 2 below. |
· | The outstanding interval of 261.3 g/t Au over 7.2m in Hole NFGC-21-137 yields a grade x width of 1,882 m*g/t Au which is the highest result to date from the Keats drilling in terms of this metric, exceeding the 1,761 m*g/t Au from the 92.7 g/t Au over 19.0m intersected in NFGC-19-01. |
· | Holes NFGC-21-137 and NFGC-20-57 provide further confirmation of the vertical extent of high-grade mineralization at shallow depths above the interpreted south-plunging dilational zone (Figure 1). |
· | Holes NFGC-20-60, 103, 106, and 114 continue build definition of high-grade gold mineralization to depth within the host Keats baseline fault zone (Figure 1). |
· | The Company has decided to increase the drill count at Queensway North from 8 to 10 drills. The 8th and 9th drills are on site and scheduled to start by the end of April, with the 10th drill anticipated to start by mid-May. |
Denis Laviolette, President of New Found, stated: “The 261.3 g/t Au over 7.2 m in NFGC-21-137 is an exceptional and exciting result further defining the extent of a wide zone of near-surface high-grade gold mineralization at Keats. Drilling at Keats has defined a thickened, south plunging dilational zone infilled with veining and high-grade gold mineralization within the plane of the Keats Baseline Fault and open to depth. Drilling is also indicating that veining and high-grade gold mineralization continues outside of this dilational zone within the broad host fault zone, particularly between this dilational zone and surface. Mineralization remains open in all directions and drilling continues to step-out and infill at Keats.”
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 1 |
Note: Au g/t x m calculations include all Keats Main intervals for each hole as reported in Table 2.
Highlight Keats Main Zone drill intervals for reference
Interval | Au | Interval | Au | Interval | Au | Interval | Au | |||||||||||||||||||||||||||||||||||
Hole | (m) | (g/t) | Hole | (m) | (g/t) | Hole | (m) | (g/t) | Hole | (m) | (g/t) | |||||||||||||||||||||||||||||||
19-01 | 19.0 | 92.9 | 20-34 | 2.4 | 29.3 | 20-46 | 2.9 | 13.7 | 21-87 | 4.7 | 27.8 | |||||||||||||||||||||||||||||||
20-18 | 7.9 | 24.1 | 20-37 | 10.3 | 25.0 | 21-52 | 2.1 | 136.7 | 21-90 | 3.9 | 24.5 | |||||||||||||||||||||||||||||||
20-19 | 18.9 | 31.2 | 20-38 | 5.8 | 19.8 | And | 14.1 | 31.5 | 21-97 | 6.5 | 37.1 | |||||||||||||||||||||||||||||||
20-21 | 18.4 | 15.8 | 20-40A | 7.3 | 19.3 | And | 5.6 | 13.7 | 21-101 | 8.5 | 17.9 | |||||||||||||||||||||||||||||||
20-23 | 41.4 | 22.3 | 20-41 | 10.4 | 22.5 | 20-56 | 32.3 | 6.2 | 21-103 | 3.5 | 19.3 | |||||||||||||||||||||||||||||||
20-26 | 6.9 | 44.5 | And | 15.9 | 31.4 | 21-74 | 4.1 | 45.6 | 21-104 | 11.4 | 29.1 | |||||||||||||||||||||||||||||||
20-28 | 4.1 | 40.1 | 20-43 | 18.2 | 10.0 | 21-79 | 7.9 | 22.7 | 21-118 | 13.7 | 61.8 | |||||||||||||||||||||||||||||||
20-29 | 16.9 | 25.0 | 20-45 | 13.8 | 28.4 | 21-80 | 39.1 | 25.8 | 21-119 | 7.0 | 15.6 | |||||||||||||||||||||||||||||||
20-30 | 6.1 | 10.3 | And | 3.3 | 20.6 | And | 2.3 | 41.6 | 21-122 | 9.2 | 106.5 | |||||||||||||||||||||||||||||||
20-32 | 13.1 | 45.3 | And | 2.0 | 17.1 | 21-85 | 3.0 | 49.4 | 21-137 | 7.2 | 261.3 |
Figure 1. Keats Main Zone Long Section
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 2 |
Figure 2. Keats Plan View
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 3 |
Drillhole Details
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-20-57 | 71.00 | 73.45 | 2.45 | 19.3 | Keats Main | |||||||||||||
Within | 69.70 | 73.45 | 3.75 | 12.9 | ||||||||||||||
And | 129.00 | 132.85 | 3.85 | 2.9 | Keats FW | |||||||||||||
And | 142.10 | 144.45 | 2.35 | 1.8 | ||||||||||||||
And | 146.45 | 148.50 | 2.05 | 8.8 | ||||||||||||||
NFGC-20-60 | 136.90 | 140.30 | 3.40 | 8.5 | Keats Main | |||||||||||||
Within | 136.90 | 160.35 | 23.45 | 2.4 | ||||||||||||||
NFGC-20-62 | NSR | Keats | ||||||||||||||||
NFGC-21-103 | 192.00 | 206.55 | 14.55 | 2.4 | Keats Main | |||||||||||||
And | 216.90 | 219.50 | 2.60 | 2.0 | ||||||||||||||
And | 236.50 | 240.00 | 3.50 | 19.3 | ||||||||||||||
Within | 235.15 | 245.40 | 10.25 | 8.9 | ||||||||||||||
NFGC-21-106 | 220.70 | 223.20 | 2.50 | 9.5 | Keats Main | |||||||||||||
Within | 218.75 | 227.35 | 8.60 | 3.6 | ||||||||||||||
And | 286.40 | 288.80 | 2.40 | 1.2 | Keats FW | |||||||||||||
NFGC-21-114 | 212.35 | 214.50 | 2.15 | 15.6 | Keats Main | |||||||||||||
Within | 212.35 | 216.85 | 4.50 | 8.1 | ||||||||||||||
NFGC-21-137 | 71.50 | 78.70 | 7.20 | 261.3 | Keats Main | |||||||||||||
And | 87.50 | 92.50 | 5.00 | 4.1 | ||||||||||||||
And | 114.00 | 116.00 | 2.00 | 1.6 | Keats FW | |||||||||||||
And | 135.00 | 137.00 | 2.00 | 3.5 |
Table 2: Summary of results reported in this release.
*Note that the host structures are interpreted to be steeply dipping and true widths are estimated to be 70% to 80% of reported intervals. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging. |
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-57 | 300 | -45 | 150 | 658145 | 5427436 | |||||||||||||||
NFGC-20-60 | 300 | -45 | 200 | 658256 | 5427425 | |||||||||||||||
NFGC-20-62 | 300 | -45 | 218 | 658291 | 5427537 | |||||||||||||||
NFGC-21-103 | 300 | -45 | 261 | 658227 | 5427328 | |||||||||||||||
NFGC-21-106 | 300 | -45 | 326 | 658221 | 5427289 | |||||||||||||||
NFGC-21-114 | 300 | -45 | 264 | 658249 | 5427316 | |||||||||||||||
NFGC-21-137 | 300 | -45 | 152 | 658185 | 5427454 |
Table 3: Location details of drill holes reported on in this release.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 4 |
Drilling Update, Expansion to 10 Drills
Since commencing its 200,000m drill program in August 2020, New Found has completed 160 diamond drill holes for a total of 35,756 meters. There are currently 7 drills operating on the Queensway Project. To support the planned grid drilling at the Keats and Lotto discoveries and to pursue the planned drilling of multiple targets along 7.8km of the Appleton Fault Zone and 12.4km along the JBP Fault Zone, as well as to execute on the planned regional drilling along these corridors, the Company has decided to increase the drill count at Queensway North to 10 drills. The 8th and 9th drills are on site and anticipated to start by the end of April, with the 10th drill anticipated to start by mid-May.
Sampling, Sub-sampling and Laboratory
True widths of the intercepts reported in this press release have yet to be determined but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cut-off of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia, or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer, and a Qualified Person as defined under National Instrument 43-101. Mr. Matheson consents to the publication of this news release dated April 20, 2021 by New Found. Mr. Matheson certifies that this news release fairly and accurately represents the information for which he is responsible.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. The Company is currently undertaking a 200,000-m drill program at Queensway. Seven rigs are currently in operation with the eighth expected to start in the next several weeks. With a current working capital balance of approximately $75 million, New Found is well funded for this program.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 5 |
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company, please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,’’ “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 6 |
Exhibit 99.29
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“New Found” or the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
April 8, 2021
Item 3: | News Release |
A news release was disseminated on April 8, 2021 through Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
On April 8, 2021, New Found completed its previously announced non-brokered private placement of 2,857,000 common shares of the Company that qualify as “flow-through shares” for the purposes of the Income Tax Act (Canada) (the “FT Shares”) at a price of $5.25 per FT Share (the “Financing”), for gross proceeds to New Found of $14,999,250.
Item 5: | Full Description of Material Change |
On April 8, 2021, New Found the Financing for gross proceeds to New Found of $14,999,250.
The FT Shares have a hold period of four months and one day from closing, expiring on August 9, 2021. On closing, a cash finders’ fee equal to 3.5% of the gross proceeds of the Financing was paid to Clarus Securities Inc.
Mr. Eric Sprott purchased 2,857,000 shares as a result of this Financing and following closing holds approximately 18.4% of the issued shares of the Company. The gross proceeds from the issuance of the FT Shares will be used for “Canadian exploration expenses” and will qualify as “flow through mining expenditures” (the “Qualifying Expenditures”), as those terms are defined in the Income Tax Act (Canada), which will be renounced to the initial purchasers of the FT Shares with an effective date no later than December 31, 2021 in an aggregate amount not less than the gross proceeds raised from the issue of the FT Shares. If the Qualifying Expenditures are reduced by the Canada Revenue Agency or the Company fails to renounce Qualifying Expenditures in an amount equal to the gross proceeds, the Company will indemnify each initial purchaser of FT Shares for any additional taxes payable.
Mr. Eric Sprott is an insider of the Company, and Mr. Sprott’s participation in the Financing constituted a “related party transaction” within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (“61-101”) and TSX Venture Exchange Policy 5.9 – Protection of Minority Security Holders in Special Transactions. However, the directors of the Company determined that the exemptions from formal valuation and minority approval requirements provided for respectively under subsections 5.5(a) and 5.7(1)(a) of 61-101 can be relied on as neither the fair market value of the FT Shares issued to Mr. Eric Sprott nor the fair market value of the consideration paid exceed 25% of the Company’s market capitalization. None of the Company’s directors have expressed any contrary views or disagreements with respect to the foregoing. A material change report in respect of this related party transaction could not be filed earlier than 21 days prior to the closing of the Financing due to the fact that the terms Financing were not confirmed at that time.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer & Director at 604.562.9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
April 16, 2021
Exhibit 99.30
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
April 7, 2021
Item 3: | News Release |
The news release was disseminated on April 7, 2021, through the news dissemination services of Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company provided assay results from an additional ten holes drilled at the Keats Zone. These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project, located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached as schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
April 7, 2021
Schedule “A” |
Keats Infill Drilling Returns 106.5 g/t Au over
9.15m and 45.6 g/t Au over 4.05m
Vancouver, BC, April 7, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce assay results from an additional ten holes drilled at the Keats Zone (“Keats”). These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Highlights
• | Highlights include: |
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | ||||||||||||
NFGC-20-74 | 44.00 | 46.00 | 2.00 | 32.27 | ||||||||||||
And | 49.15 | 70.50 | 21.35 | 3.36 | ||||||||||||
And | 81.70 | 85.75 | 4.05 | 45.59 | ||||||||||||
NFGC-21-85 | 108.45 | 111.40 | 2.95 | 49.41 | ||||||||||||
NFGC-21-119 | 176.20 | 183.15 | 6.95 | 15.57 | ||||||||||||
NFGC-21-122 | 8.10 | 10.00 | 1.90 | 24.75 | ||||||||||||
And | 34.70 | 49.60 | 14.90 | 69.15 | ||||||||||||
Incl | 34.70 | 43.85 | 9.15 | 106.46 |
*Note that the host structures are interpreted to be steeply dipping and true widths are estimated to be 70% to 80% of reported intervals. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
• | Multiple intervals encountered in drill holes NFGC-21-74 and NFGC-21-122 provide further confirmation of high-grade, near surface gold mineralization at the north end of Keats. These results include 45.6g/t Au over 4.05m in hole NFGC-21-74 and 69.2g/t Au over 14.9m in hole NFGC-21-122 (Figure 1). |
• | The intervals of 49.4 g/t Au over 2.95m in drill hole NFGC-21-85 and 15.6 g/t Au over 6.95m NFGC 21-119 provide further confirmation of the continuity of the Keats high grade zone in the down-plunge direction (Figure 1). |
Greg Matheson, P.Geo., COO of New Found, stated: “Similar to the results the Company disclosed on March 29, 2021, these results continue to infill between our deepest interval disclosed to date (61.8 g/t Au over 13.65m in NFGC-21-118) and the near-surface, high-grade results up-plunge (see Figure 1). Current drilling at Keats is focused on extending the high-grade zone down plunge, providing further definition of the near surface, high-grade mineralization, and testing additional zones of high-grade mineralization including in footwall veining.”
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 1 |
Highlight Keats Main Zone drill intervals for reference
Hole | Interval | Au | Hole | Interval | Au | Hole | Interval | Au | Hole | Interval | Au | |||||||||||||||||||||||||||||||||||
(m) | (g/t) | (m) | (g/t) | (m) | (g/t) | (m) | (g/t) | |||||||||||||||||||||||||||||||||||||||
19-01 | 19.0 | 92.9 | 20-34 | 2.4 | 29.3 | 20-46 | 2.9 | 13.7 | 21-85 | 3.0 | 49.4 | |||||||||||||||||||||||||||||||||||
20-18 | 7.9 | 24.1 | 20-37 | 10.3 | 25.0 | 21-52 | 2.1 | 136.7 | 21-87 | 4.7 | 27.8 | |||||||||||||||||||||||||||||||||||
20-19 | 18.9 | 31.2 | 20-38 | 5.8 | 19.8 | And | 14.1 | 31.5 | 21-90 | 3.9 | 24.5 | |||||||||||||||||||||||||||||||||||
20-21 | 18.4 | 15.8 | 20-40A | 7.3 | 19.3 | And | 5.6 | 13.7 | 21-97 | 6.5 | 37.1 | |||||||||||||||||||||||||||||||||||
20-23 | 41.4 | 22.3 | 20-41 | 10.4 | 22.5 | 20-56 | 32.3 | 6.2 | 21-101 | 8.5 | 17.9 | |||||||||||||||||||||||||||||||||||
20-26 | 6.9 | 44.5 | And | 15.9 | 31.4 | 20-74 | 4.1 | 45.6 | 21-104 | 11.4 | 29.1 | |||||||||||||||||||||||||||||||||||
20-28 | 4.1 | 40.1 | 20-43 | 18.2 | 10.0 | 21-78 | 2.3 | 18.2 | 21-118 | 13.7 | 61.8 | |||||||||||||||||||||||||||||||||||
20-29 | 16.9 | 25.0 | 20-45 | 13.8 | 28.4 | 21-79 | 7.9 | 22.7 | 21-119 | 7.0 | 15.6 | |||||||||||||||||||||||||||||||||||
20-30 | 6.1 | 10.3 | And | 3.3 | 20.6 | 21-80 | 39.1 | 25.8 | 21-122 | 9.2 | 106.5 | |||||||||||||||||||||||||||||||||||
20-32 | 13.1 | 45.3 | And | 2.0 | 17.1 | And | 2.3 | 41.6 |
Figure 1. Keats Main Zone Long Section
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 2 |
Figure 2. Keats Plan View
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 3 |
Drillhole Details
Hole No. | From (m) | To (m) |
Interval
(m)* |
Au (g/t) | Zone | ||||||||||||||
NFGC-20-67 | 123.90 | 125.90 | 2.00 | 10.26 | Keats Main | ||||||||||||||
NFGC-20-69 | 109.40 | 113.55 | 4.15 | 1.58 | Keats Main | ||||||||||||||
And | 122.20 | 127.85 | 5.65 | 4.21 | |||||||||||||||
Incl | 122.20 | 125.15 | 2.95 | 6.16 | |||||||||||||||
And | 129.95 | 132.95 | 3.00 | 1.43 | |||||||||||||||
NFGC-20-70 | 56.40 | 67.50 | 11.10 | 1.89 | Keats Main | ||||||||||||||
incl | 61.80 | 62.40 | 0.60 | 12.15 | |||||||||||||||
And | 77.45 | 80.80 | 3.35 | 1.92 | |||||||||||||||
And | 92.75 | 95.25 | 2.50 | 3.80 | |||||||||||||||
NFGC-20-72 | 133.50 | 139.80 | 6.30 | 2.89 | Keats Main | ||||||||||||||
Incl | 133.50 | 136.80 | 3.30 | 4.48 | |||||||||||||||
And | 143.40 | 147.00 | 3.60 | 1.50 | |||||||||||||||
And | 187.20 | 189.45 | 2.25 | 1.31 | Keats FW | ||||||||||||||
NFGC-20-74 | 44.00 | 46.00 | 2.00 | 32.27 | Keats Main | ||||||||||||||
And | 49.15 | 70.50 | 21.35 | 3.36 | |||||||||||||||
And | 81.70 | 85.75 | 4.05 | 45.59 | |||||||||||||||
NFGC-21-84 | 87.00 | 89.25 | 2.25 | 1.15 | Keats Main | ||||||||||||||
And | 102.40 | 106.50 | 4.10 | 1.31 | |||||||||||||||
And | 155.00 | 157.15 | 2.15 | 1.12 | Keats FW | ||||||||||||||
NFGC-21-85 | 108.45 | 111.40 | 2.95 | 49.41 | Keats Main | ||||||||||||||
NFGC-21-88 | 152.20 | 154.60 | 2.40 | 1.02 | Keats FW | ||||||||||||||
NFGC-21- | 152.50 | 154.50 | 2.00 | 1.05 | Keats Main | ||||||||||||||
119 | |||||||||||||||||||
And | 176.20 | 183.15 | 6.95 | 15.57 | |||||||||||||||
And | 218.85 | 221.00 | 2.15 | 1.45 | Keats FW | ||||||||||||||
NFGC-21- | 8.10 | 10.00 | 1.90 | 24.75 | Keats Main | ||||||||||||||
122 | |||||||||||||||||||
And | 25.00 | 27.00 | 2.00 | 1.97 | |||||||||||||||
And | 34.70 | 49.60 | 14.90 | 69.15 | |||||||||||||||
Incl | 34.70 | 43.85 | 9.15 | 106.46 |
Table 2: Summary of results reported in this release.
*Note that the host structures are interpreted to be steeply dipping and true widths are estimated to be 70% to 80% of reported intervals. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-67 | 300 | -45 | 189 | 658216 | 5427437 | |||||||||||||||
NFGC-20-69 | 300 | -45 | 187 | 658225 | 5427432 | |||||||||||||||
NFGC-20-70 | 300 | -45 | 192 | 658249 | 5427504 | |||||||||||||||
NFGC-20-72 | 300 | -45 | 189 | 658234 | 5427427 | |||||||||||||||
NFGC-20-74 | 300 | -45 | 238 | 658229 | 5427491 | |||||||||||||||
NFGC-21-84 | 300 | -45 | 170 | 658253 | 5427490 | |||||||||||||||
NFGC-21-85 | 300 | -45 | 157 | 658148 | 5427388 | |||||||||||||||
NFGC-21-88 | 300 | -45 | 256 | 658029 | 5427284 | |||||||||||||||
NFGC-21-119 | 300 | -45 | 279 | 658185 | 5427331 | |||||||||||||||
NFGC-21-122 | 300 | -45 | 140 | 658240 | 5427523 |
Table 3: Location details of drill holes reported on in this release.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 4 |
Sampling, Sub-sampling and Laboratory
True widths of the intercepts reported in this press release have yet to be determined but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cut-off of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia, or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer, and a Qualified Person as defined under National Instrument 43-101. Mr. Matheson consents to the publication of this news release dated April 7, 2021 by New Found. Mr. Matheson certifies that this news release fairly and accurately represents the information for which he is responsible.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. The Company is currently undertaking a 200,000-m drill program at Queensway, with a planned increase from the current six drill rigs to eight drill rigs in Q1, 2021. New Found currently has working capital of approximately $64 million. On closing of the $15 million flow through financing announced March 18, 2021 the Company would have an estimated $79 million of working capital.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 5 |
Contact
To contact the Company, please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions , or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 6 |
Exhibit 99.31
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
March 29, 2021
Item 3: | News Release |
The news release was disseminated on March 29, 2021, through the news dissemination services of Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company provided assay results from an additional six holes drilled at the Keats Zone. These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project, located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached as schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
March 29, 2021
Schedule “A” |
Keats Infill Drilling Returns 37.2 g/t Au over 6.45m
and 17.9 g/t Au over 8.45m
Vancouver, BC, March 29, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce assay results from an additional six holes drilled at the Keats Zone (“Keats”). These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Highlights
• | Highlights include: |
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | ||||||||||||
NFGC-21-78 | 113.20 | 115.50 | 2.30 | 18.22 | ||||||||||||
NFGC-21-86 | 141.95 | 150.00 | 8.05 | 5.6 | ||||||||||||
NFGC-21-87 | 4.70 | 9.35 | 4.65 | 27.8 | ||||||||||||
And | 20.45 | 30.70 | 10.25 | 2.5 | ||||||||||||
NFGC-21-97 | 174.95 | 181.40 | 6.45 | 37.1 | ||||||||||||
NFGC-21-101 | 180.85 | 189.30 | 8.45 | 17.9 |
*Note that the host structures are interpreted to be steeply dipping and true widths are estimated to be 70% to 80% of reported intervals. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
• | The intervals of 37.2 g/t Au over 6.45m and 17.9 g/t Au over 8.45m in drill holes NFGC-21-97 and NFGC 21-101 provide further confirmation of the continuity of the Keats high grade zone in the down-plunge direction (Figure 1). |
• | Drill hole NFGC-21-87 returned 27.8 g/t Au over 4.65 m starting at 4.7m down-hole depth plus 2.51 g/t Au over 10.3 m starting at 20.5m down-hole depth, providing further confirmation of high-grade gold at bedrock surface at the north end of Keats. |
Greg Matheson, P.Geo., COO of New Found, stated: “These results are significant in that they provide confirmation of the continuity of high-grade gold mineralization between our deeper results down plunge including the recently released 61.8 g/t Au over 13.65m in NFGC-21-118 and the more closely spaced drilled near-surface, high-grade results up-plunge (see Figure 1). Additional results in this area roughly centered around fence line 4700N are anticipated shortly. Current drilling at Keats is focused on extending the high-grade zone down plunge, providing further definition of the near surface, high-grade mineralization, and testing additional zones of high-grade mineralization including in the footwall veining.”
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 1 |
Highlight – Keats Main Zone Drill Intervals
Interval | Au | Interval | Au | Interval | Au | Interval | Au | ||||||||||||||||||||||
Hole | (m) | (g/t) | Hole | (m) | (g/t) | Hole | (m) | (g/t) | Hole | (m) | (g/t) | ||||||||||||||||||
19-01 | 19.0 | 92.9 | 20-32 | 13.1 | 45.3 | 20-45 | 13.8 | 28.4 | 21-79 | 7.9 | 22.7 | ||||||||||||||||||
20-18 | 7.9 | 24.1 | 20-34 | 2.4 | 29.3 | And | 3.3 | 20.6 | 21-80 | 39.1 | 25.8 | ||||||||||||||||||
20-19 | 18.9 | 31.2 | 20-37 | 10.3 | 25.0 | And | 2.0 | 17.1 | And | 2.3 | 41.6 | ||||||||||||||||||
20-21 | 18.4 | 15.8 | 20-38 | 5.8 | 19.8 | 20-46 | 2.9 | 13.7 | 21-87 | 4.7 | 27.8 | ||||||||||||||||||
20-23 | 41.4 | 22.3 | 20-40A | 7.3 | 19.3 | 21-52 | 2.1 | 136.7 | 21-90 | 3.9 | 24.5 | ||||||||||||||||||
20-26 | 6.9 | 44.5 | 20-41 | 10.4 | 22.5 | And | 14.1 | 31.5 | 21-97 | 6.5 | 37.1 | ||||||||||||||||||
20-28 | 4.1 | 40.1 | And | 15.9 | 31.4 | And | 5.6 | 13.7 | 21-101 | 8.5 | 17.9 | ||||||||||||||||||
20-29 | 16.9 | 25.0 | 20-43 | 18.2 | 10.0 | 20-56 | 32.3 | 6.2 | 21-104 | 11.4 | 29.1 | ||||||||||||||||||
20-30 | 6.1 | 10.3 | 21-78 | 2.3 | 18.2 | 21-118 | 13.7 | 61.8 |
Figure 1. Keats Main Zone Long Section
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 2 |
Figure 2. Keats Plan View
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 3 |
Drillhole Details
Table 2: Summary of results reported in this news release.
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-21-65 | 170.00 | 172.90 | 2.90 | 1.04 | Keats Main | |||||||||||||
NFGC-21-78 | 102.00 | 105.70 | 3.70 | 2.43 | ||||||||||||||
And | 113.20 | 115.50 | 2.30 | 18.2 | Keats Main | |||||||||||||
NFGC-21-86 | 141.95 | 150.00 | 8.05 | 5.65 | ||||||||||||||
And | 171.90 | 174.25 | 2.35 | 1.09 | Keats Main | |||||||||||||
NFGC-21-87 | 4.70 | 9.35 | 4.65 | 27.8 | ||||||||||||||
And | 20.45 | 30.70 | 10.25 | 2.51 | Keats Main | |||||||||||||
And | 79.00 | 81.00 | 2.00 | 2.03 | ||||||||||||||
NFGC-21-97 | 135.00 | 137.65 | 2.65 | 1.31 | Keats HW | |||||||||||||
And | 153.65 | 156.00 | 2.35 | 1.04 | ||||||||||||||
And | 162.65 | 167.00 | 4.35 | 1.21 | Keats Main | |||||||||||||
And | 174.95 | 181.40 | 6.45 | 37.2 | ||||||||||||||
NFGC-21-101 | 180.85 | 189.30 | 8.45 | 17.9 | Keats Main |
*Note that the host structures are interpreted to be steeply dipping and true widths are estimated to be 70% to 80% of reported intervals. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
Table 3: Location details of drill holes reported on in this news release.
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-21-65 | 300 | -45 | 266 | 658335 | 5427512 | |||||||||||||||
NFGC-21-78 | 300 | -45 | 168 | 658183 | 5427426 | |||||||||||||||
NFGC-21-86 | 300 | -45 | 231 | 658209 | 5427397 | |||||||||||||||
NFGC-21-87 | 300 | -45 | 125 | 658218 | 5427535 | |||||||||||||||
NFGC-21-97 | 300 | -45 | 225 | 658195 | 5427347 | |||||||||||||||
NFGC-21-101 | 300 | -45 | 221 | 658206 | 5427341 |
Sampling, Sub-sampling and Laboratory
True widths of the intercepts reported in this press release have yet to be determined but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cut-off of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia, or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 4 |
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer, and a Qualified Person as defined under National Instrument 43-101. Mr. Matheson consents to the publication of this news release dated March 29, 2021 by New Found. Mr. Matheson certifies that this news release fairly and accurately represents the information for which he is responsible.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. The Company is currently undertaking a 200,000-m drill program at Queensway, with a planned increase from the current six drill rigs to eight drill rigs in Q1, 2021. New Found currently has working capital of approximately $67 million. On closing of the $15 million flow through financing announced March 18, 2021 the Company would have an estimated $82 million of working capital.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company, please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 5 |
Forward-Looking Statement Cautions
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “ plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events . The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 6 |
Exhibit 99.32
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
March 23, 2021
Item 3: | News Release |
The news release was disseminated on March 23, 2021, through the news dissemination services of Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company provided recently received assay results from two holes drilled at the Lotto Zone. These holes were completed as part of the Company’s ongoing 200,000 m diamond drill program at its 100% owned Queensway Project, located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached as schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
March 23, 2021
Schedule “A” |
New Found Intercepts 51.3 g/t Au over 3.20m and 53.3
g/t Au over 3.10m in Step-outs to Depth at Lotto
Vancouver, BC, March 23, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce recently received assay results from two holes drilled at the Lotto Zone (“Lotto”). These holes were completed as part of the Company’s ongoing 200,000 m diamond drill program at its 100% owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Highlights
• | These drill results are summarized below: |
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | ||||||||||||
This release: | ||||||||||||||||
NFGC-21-109 | 154.20 | 157.40 | 3.20 | 51.3 | ||||||||||||
Within | 152.70 | 161.50 | 8.80 | 19.3 | ||||||||||||
NFGC-21-115 | 186.00 | 189.10 | 3.10 | 53.3 | ||||||||||||
Within | 180.70 | 189.10 | 8.40 | 20.3 | ||||||||||||
Previously reported Lotto interval highlights: | ||||||||||||||||
NFGC-20-17 | 35.25 | 40.00 | 4.75 | 41.2 | ||||||||||||
And | 56.95 | 62.10 | 5.15 | 25.4 | ||||||||||||
NFGC-20-20 | 100.25 | 103.25 | 3.00 | 5.3 | ||||||||||||
NFGC-20-27 | 222.90 | 224.90 | 2.00 | 31.3 | ||||||||||||
NFGC-20-50 | 43.65 | 45.75 | 2.10 | 65.3 | ||||||||||||
NFGC-21-100 | 118.00 | 120.45 | 2.45 | 224.7 | ||||||||||||
Previously reported “Sunday Zone” interval: | ||||||||||||||||
NFGC-20-44 | 242.10 | 245.05 | 2.95 | 38.7 | ||||||||||||
Within | 238.55 | 245.05 | 6.50 | 18.1 |
* Note that the true width of the mineralization is uncertain, but host structures are interpreted to be steeply dipping implying true widths in the range of 70% of reported intercepts. Intervals are calculated at a 1 g/t Au cut-off grade and minimum width of 2m, grades have not been capped in the averaging.
• | As illustrated in Figure 1, the intercepts in NFGC-21-109 and NFGC-21-115 confirm good continuity of high-grade gold mineralization to a vertical depth of approximately 130m where it remains open. |
• | These intervals occur in an interpreted north-south strking vein set, one of a network of multiple secondary north-south striking vein sets interpreted to date over a 300m x 200m area and open (see Figure 2). |
• | High grade interpreted to be focused on fault splays and structural intersections in plan view. Drilling to date indicates similar patterns in cross section, with spays in veining also interpreted in the vertical direction. |
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 1 |
• | Continuity is also developing along strike. The high-grade intervals in the Company’s original Lotto discovery hole (NFGC-21-17, which returned 41.2 g/t Au over 4.75m starting at 35m down hole and 25.4g/t over 5.15m starting at 57m down hole) are interpreted to occur in the same north-south vein set along strike to the north. |
Denis Laviolette, President of New Found, stated: “We are very exceed by the continuity of high-grade gold how developing on this north-south striking vein set at Lotto. The two reported step-out intervals were drilled below the high grade interval in Hole NFGC-21-100 (224.7 g/t Au over 2.45m, see February 23, 2021 news release) confirming the high grade mineralization to 130m vertical depth where it remains open. In fact the veining appears to be broadening and strengthening with depth, and drilling to step out further to depth will commence shortly. To date we have interpreted approximately 300m of north-south strike on this vein set which appears to bisect the Lotto Baseline fault zone, as illustrated in Figure 2. Drilling will also continue to step out laterally along strike to further test in this direction.
Bigger picture at Lotto, as shown in Figure 2 we have interpreted multiple other north-south striking secondary veining and we will continue to drill test these other vein sets for similar high-grade gold mineralization. One of these interpreted north-south striking vein sets approximately 100m to the west returned 18.1 g/t Au over 6.5m (Hole NFGC-2044) where it intersected the main Appleton Fault (see January 14, 2021 news release), confirming the potential for additional zones of high grade gold in this parallel veining. Finally at Lotto we are also targeting the more primary Lotto Baseline fault and the Appleton faults. The Lotto Baseline fault appears analogous to the Keats Baseline fault which is host to the high grade discovery at Keats and we are utilizing our developing understanding of the controls on mineralization at Keats in targeting gold mineralization the Lotto Baseline fault.”
Figure 1: Lotto Cross-section 6450N (looking north, 20m clipping)
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 2 |
Figure 2: Lotto Plan View
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 3 |
Drill-hole Details
Table 2: Summary of results reported in this release
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||||
NFGC-21-109 | 154.20 | 157.40 | 3.20 | 51.3 | Lotto | |||||||||||||||
Within | 152.70 | 161.50 | 8.80 | 19.3 | ||||||||||||||||
NFGC-21-115 | 186.00 | 189.10 | 3.10 | 53.3 | Lotto | |||||||||||||||
Within | 180.70 | 189.10 | 8.40 | 20.3 |
* Note that the true width of the mineralization is uncertain, but host structures are interpreted to be steeply dipping implying true widths in the range of 70% of reported intercepts. Intervals are calculated at a 1 g/t Au cut-off grade and minimum width of 2m, grades have not been capped in the averaging.
Table 3: Details of drill holes reported in this release
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-21-109 | 300 | -45 | 252 | 659012 | 5428912 | |||||||||||||||
NFGC-21-115 | 300 | -45 | 225 | 659034 | 5428895 |
Sampling, Sub-sampling and Laboratory
True width of the mineralization is uncertain, but host structures are interpreted to be steeply dipping implying true widths in the range of 70% of reported intercepts. Selected intervals are submitted on a rush basis including the reported intervals for NFGC-21-109 and NFGC-115. Additional assays for these holes will be reported once received. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cutoff of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101. Mr Matheson consents to the publication of this announcement dated March 23, 2021, by New Found. Mr Matheson certifies that this announcement fairly and accurately represents the information for which he is responsible.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 4 |
Filing of Short Form Shelf Prospectus
New Found is pleased to announce that it has filed a preliminary short form base shelf prospectus (the “Base Shelf Prospectus”) with securities regulatory authorities in Alberta, British Columbia and Ontario. The Base Shelf Prospectus when made final will qualify the offering of up to $100 million of New Found’s common shares, warrants, subscription receipts, units, debt securities and share purchase contracts during the 25-month period that the Base Shelf Prospectus remains effective. The Base Shelf Prospectus is intended to give New Found the flexibility to take advantage of financing opportunities when market conditions are favourable. The terms of such future offerings, if any, will be established at the time of such offerings. At the time any of the securities covered by the Base Shelf Prospectus are offered for sale, a prospectus supplement containing specific information about the terms of any such offering will filed with the applicable securities regulatory authorities.
Marketing Agreement
New Found also announces that it has retained Future Money Trends LLC (“FMT”) to conduct marketing services for the Company. FMT is an affiliate of Gold Standard Media LLC (“GSM”). As noted in the Company’s October 2, 2020 news release, GSM has also been retained by the Company to provide marketing services. FMT and GSM are headed by Kenneth Ameduri, who manages a marketing team headquartered in Austin, Texas. FMT has been successfully marketing public companies since 2010. The term of the agreement is for six months ending September 16, 2021. FMT will be paid US$200,000 in advance for these services.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. The Company is currently undertaking a 200,000-m drill program at Queensway, with a planned increase from the current six drill rigs to eight drill rigs in Q1, 2021. New Found currently has working capital of approximately $68 million. On closing of the $15 million flow through offering financing announced March 18, 2021 the Company would have an estimated $83 million of working capital.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 5 |
Contact
To contact the Company, please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfbundgold.ca
Phone:(604)562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” "intends," "estimates," "projects," "aims," "potential," "goal," "objective," "prospective," and similar expressions, or that events or conditions “will,” “would,” "may," "can," "could" or "should" occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if managements beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 6 |
Exhibit 99.33
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
March 16, 2021
Item 3: | News Release |
The news release was disseminated on March 16, 2021, through the news dissemination services of Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company announced assay results from three holes drilled at Keats Zone. These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at the Company’s 100%-owned Queensway Project located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached hereto as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
March 18, 2021
Schedule “A” |
Keats Step-Out Returns 61.8 g/t Au over 13.7m,
Extends High-Grade Zone to 285m Down-Plunge
Vancouver, BC, March 16, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce assay results from three holes drilled at Keats Zone (“Keats”). These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Highlights
• | Highlights of these results include: |
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | ||||||||||||
NFGC-21-79 | 133.75 | 141.65 | 7.9 | 22.7 | ||||||||||||
NFGC-21-90 | 35.35 | 39.20 | 3.9 | 24.5 | ||||||||||||
NFGC-21-118 | 211.15 | 224.80 | 13.7 | 61.8 | ||||||||||||
Incl | 212.10 | 213.05 | 1.0 | 565 |
*Note that the host structures are interpreted to be steeply dipping and true widths are estimated to be 70% to 80% of reported intervals. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
• | The interval of 61.8 g/t Au over 13.7m in NFGC-21-118 is a 21m down-plunge step-out to the south from the previously furthest south intercept of 29.1 g/t Au over 11.4m in hole NFGC-21-104 (see NFG press release March 1, 2021) and is the deepest intercept drilled to date at Keats. |
• | Drill hole NFGC-21-118 is still being drilled and is targeted to intersect the Appleton Fault Zone. The hole is currently at a depth of 581m. Assay results from the balance of this hole will be reported when received. |
• | The interval of 24.5g/t Au over 3.85m in drill hole NFGC-21-90 is a 15m step-out to the north from the previously furthest north high-grade intercept. This interval is at approximately 25m vertical depth extending the high grade near surface mineralization in this area. |
• | The intercept of 22.7g/t Au over 7.9m in NFGC-21-79 further confirms the continuity of the high-grade envelope within the Keats-Baseline fault. |
• | The Keats high-grade zone has now been drill defined over 285m in the down-plunge direction. The zone remains open and step-out drilling is continuing to the south, vertically above and below this zone, and to the north. |
Craig Roberts, P.Eng. CEO of New Found, stated: “Drilling at Keats continues to expand the impressive zone of high-grade gold mineralization. The interval of 61.8g/t Au over 13.7m is the furthest south and deepest drill intercept to date and indicates the continuation of a very strong gold mineralizing system capable of producing broad intervals of high-grade gold in this direction. Our excitement continues to grow with this success at Keats, further bolstered by our high-grade discovery at Lotto 2km to the north, and by other recent high-grade drill intercepts along the Appleton Fault Zone. We have recently managed to significantly shorten our turn around time on assays and this in combination with the ramp up to eight drills will significantly accelerate our volume of assay results and news flow. We look forward to reporting further results from Keats, Lotto, and our testing of +12 additional high-grade targets along +20km of the Appleton and JBP Fault Zones.”
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 1 |
Highlights - Previously Released Keats Main Zone Drill Intervals
Hole | Interval | Au | Hole | Interval | Au | Hole | Interval | Au | Hole | Interval | Au | |||||||||||||||||||||||||||||||
(m) | (g/t) | (m) | (g/t) | (m) | (g/t) | (m) | (g/t) | |||||||||||||||||||||||||||||||||||
19-01 | 19.0 | 92.9 | 20-29 | 16.9 | 25.0 | 20-40A | 7.3 | 19.3 | 21-52 | 2.1 | 136.7 | |||||||||||||||||||||||||||||||
20-18 | 7.9 | 24.1 | 20-30 | 6.1 | 10.3 | 20-41 | 10.4 | 22.5 | and | 14.1 | 31.5 | |||||||||||||||||||||||||||||||
20-19 | 18.9 | 31.2 | 20-32 | 13.1 | 45.3 | and | 15.9 | 31.4 | and | 5.6 | 13.7 | |||||||||||||||||||||||||||||||
20-21 | 18.4 | 15.8 | 20-33 | 4.0 | 2.6 | 20-43 | 18.2 | 10.0 | 20-56 | 32.3 | 6.2 | |||||||||||||||||||||||||||||||
20-23 | 41.4 | 22.3 | 20-34 | 2.4 | 29.3 | 20-45 | 13.8 | 28.4 | 21-80 | 39.1 | 25.8 | |||||||||||||||||||||||||||||||
20-25 | 2.2 | 7.3 | 20-36 | 8.9 | 5.2 | and | 3.3 | 20.6 | and | 2.3 | 41.6 | |||||||||||||||||||||||||||||||
20-26 | 6.9 | 44.5 | 20-37 | 10.3 | 25.0 | and | 2.0 | 17.1 | 21-104 | 11.4 | 29.1 | |||||||||||||||||||||||||||||||
20-28 | 4.1 | 40.1 | 20-38 | 5.8 | 19.8 | 20-46 | 2.9 | 13.7 |
Figure 1. Keats Main Zone Long Section
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 2 |
Figure 2. Keats Plan View
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 3 |
Figure 3. Visible gold mineralization in quartz associated with boulangerite and chalcopyrite in hole NFGC-21-118 at 212.5m depth
Drillhole Details
Table 2: Summary of results reported in this news release
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||||
NFGC-21-79 | 107.35 | 113.80 | 6.45 | 1.00 | Keats | |||||||||||||||
And | 133.75 | 141.65 | 7.90 | 22.7 | Keats | |||||||||||||||
NFGC-21-90 | 20.00 | 28.05 | 8.05 | 2.45 | Keats | |||||||||||||||
And | 35.35 | 39.20 | 3.85 | 24.5 | Keats | |||||||||||||||
NFGC-21-118 | 211.15 | 224.80 | 13.65 | 61.8 | Keats | |||||||||||||||
Including | 212.10 | 213.05 | 0.95 | 565 |
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 4 |
Table 3: Location details of drill holes reported on in this news release
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-21-79 | 300 | -45 | 192 | 658 199 | 5 427 403 | |||||||||||||||
NFGC-21-90 | 300 | -45 | 182 | 658 235 | 5 427 540 | |||||||||||||||
NFGC-21-118* | 300 | -45 | *581 | 658 189 | 5 427 285 |
*Drill hole ongoing
Sampling, Sub-sampling and Laboratory
True widths of the intercepts reported in this press release have yet to be determined but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cutoff of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101. Mr Matheson consents to the publication of this news release dated March 16, 2021 by New Found Gold. Mr Matheson certifies that this news release fairly and accurately represents the information for which he is responsible.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. With working capital of approximately C$69M the Company is well financed to continue its current 200,000-m drill program, with a planned increase from the current six drill rigs to eight drill rigs in Q1, 2021. New Found has a proven capital markets and mining team with major shareholders including Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), other institutional ownership (8%), and management, directors, and insiders (4%).
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 5 |
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company, please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “ believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 6 |
Exhibit 99.30(b)
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
March 18, 2021
Item 3: | News Release |
The news release was disseminated on March 18, 2021, through the news dissemination services of Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company announced a non-brokered private placement of 2,857,000 common shares of the Company that qualify as “flow-through shares” for the purposes of the Income Tax Act (Canada) (the “FT Shares”) at a price of $5.25 per FT Share (the “Financing”) for gross proceeds to the Company of $14,999,250. The FT Shares have a hold period of four months and one day from closing. On closing, a cash finders’ fee equal to 3.5% of the gross proceeds of the Financing will be paid.
Item 5: | Full Description of Material Change |
The Company announced a non-brokered private placement of 2,857,000 common shares of the Company that qualify as “flow-through shares” for the purposes of the Income Tax Act (Canada) (the “FT Shares”) at a price of $5.25 per FT Share (the “Financing”) for gross proceeds to the Company of $14,999,250. Mr. Eric Sprott is purchasing a total of 2,857,000 shares as a result of the Financing. The FT Shares have a hold period of four months and one day from closing. On closing, a cash finders’ fee equal to 3.5% of the gross proceeds of the Financing will be paid to Clarus Securities Inc.
The gross proceeds from the issuance of the FT Shares will be used for “Canadian exploration expenses” and will qualify as “flow-through mining expenditures” (the “Qualifying Expenditures”), as those terms are defined in the Income Tax Act (Canada), which will be renounced to the initial purchasers of the FT Shares with an effective date no later than December 31, 2021 in an aggregate amount not less than the gross proceeds raised from the issue of the FT Shares, and, if the Qualifying Expenditures are reduced by the Canada Revenue Agency, the Company will indemnify each initial purchaser of FT Shares for any additional taxes payable by such subscriber as a result of the Company’s failure to renounce the Qualifying Expenditures as agreed. Closing of the financing is subject to customary conditions including finalization of definitive documentation and approval of the TSX Venture Exchange.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
March 18, 2021
Exhibit 99.34
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
March 10, 2021
Item 3: | News Release |
The news release was disseminated on March 10, 2021, through the news dissemination services of Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company announced partial assay results from intervals in five holes drilled at the Keats Zone. These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project, located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached hereto as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
March 10, 2021
Schedule “A” |
|
New Found Intercepts 24.0g/t over 46.0m and
27.0g/t over 30.1m at Keats, High-grade Gold
Mineralization Discovered in Footwall Veins
Vancouver, BC, March 10, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce partial assay results from intervals in five holes drilled at the Keats Zone (“Keats”). These holes were drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Highlights
· | The drill interval highlights are summarized below: |
From | Interval | |||||||||||||||||
Hole No. | (m) | To (m) | (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-20-52 | 107.7 | 109.8 | 2.1 | 136.7 | Keats | |||||||||||||
And | 114.4 | 128.5 | 14.1 | 31.5 | Keats | |||||||||||||
And | 132.2 | 137.8 | 5.6 | 13.7 | Keats | |||||||||||||
NFGC-20-52** | 107.7 | 137.8 | 30.1 | 27.0 | Keats | |||||||||||||
NFGC-21-80 | 49.5 | 88.5 | 39.1 | 25.8 | ||||||||||||||
Including | 62.7 | 72.8 | 10.1 | 58.5 | Keats | |||||||||||||
Including | 78.7 | 88.5 | 9.9 | 39.5 | ||||||||||||||
And | 93.2 | 95.5 | 2.3 | 41.6 | Keats | |||||||||||||
NFGC-21-80** | 49.5 | 95.5 | 46.0 | 24.0 | Keats | |||||||||||||
NFGC-20-49 | 175.9 | 180.9 | 5.0 | 5.6 | Keats FW | |||||||||||||
Including | 177.7 | 178.7 | 1.0 | 21.2 | ||||||||||||||
NFGC-20-73 | 25.8 | 28.0 | 2.2 | 7.3 | Keats | |||||||||||||
And | 191.5 | 194.0 | 2.5 | 21.9 | Keats FW | |||||||||||||
Including | 191.5 | 192.2 | 0.7 | 83.4 | ||||||||||||||
And | 292.4 | 293.8 | 1.4 | 2.7 | Keats FW |
* Note that the host structures are interpreted to be steeply dipping and true widths are estimated to be 70% to 80% of reported intervals. Except as noted, reported intervals are calculated at a 1 g/t Au cut-off grade. Grades have not been capped in the averaging. **Includes intervening intervals assaying below the 1g/t Au cut-off grade.
• | The 46m interval averaging 24.0g/t Au in NFGC-21 -80 is the broadest high-grade drill intercept to date at Keats. |
• | Hole 20-52 intersected three separate high-grade intervals over 30.1m, including an interval of 31.5g/t over 14.1m. |
• | Importantly multiple intervals of high-grade gold mineralization were also intercepted within the Keats Footwall veins which lie between the Keats Baseline Fault and the Appleton Fault Zone. NFGC-20-73 encountered a footwall vein at 191.5m down hole that returned 21.9g/t Au over 2.50m including a 0.65m interval displaying visible gold that assayed 83.4 g/t Au. NFGC 20-49 encountered a footwall vein at 178m down hole that returned 5.55 g/t Au over 4.95m including an interval displaying visible gold that assayed 21.2g/t Au over 1.0m. |
• | NFGC-20-73 was terminated at 293.8m with the final 1.35m interval returning 2.73g/t Au. This hole is now being deepened to test the extent of this gold mineralization. |
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 1 |
Greg Matheson, Chief Operating Officer of New Found, stated: “Holes 52 and 80 provide further confirmation of the impressive widths of high-grade, near surface gold mineralization in the Keats Baseline Fault Drilling is now focused on stepping out to the north, south and to depth. Drilling to date at Keats has also encountered multiple veins in the footwall of the Keats Baseline Fault, typically returning assays in the 0.5 to +3.0g/t range. The high-grade intervals recently encountered in this secondary veining is very encouraging. The initial high-grade discovery hole (92.9g/t over 19m in NFGC-19-01) in the Keats Baseline Fault was drilled below veining that returned multi-gram assays and that occurred within much longer intervals (up to +100m) of halo gold mineralization. In addition to the high-grade assays reported, Hole NFGC-20-73 returned a cumulative 125m that assayed above 0.1 g/t, indicating a broad anomalous gold halo within the Keats Baseline footwall. We will continue to step-out on these intervals to test for additional zones of high-grade gold mineralization between the Keats Baseline fault and the Appleton Fault”
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 2 |
Figure 1. Keats plan view
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 3 |
Figure 2. Keats Baseline Fault long-section
Figure 3. Visible Gold Mineralization in Quartz – NFGC-21-80 at 82.35m depth
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 4 |
Table 2: Summary of results reported in this news release
Hole No. | From (m) | To (m) |
Interval
(m)* |
Au (g/t) | Zone | |||||||||||||
NFGC-20-48 | 129.0 | 132.6 | 3.6 | 6.39 | Keats | |||||||||||||
And | 141.0 | 143.2 | 2.2 | 1.15 | Keats | |||||||||||||
And | 164.5 | 167.1 | 2.6 | 1.38 | Keats FW | |||||||||||||
NFGC-20-49 | 175.9 | 180.9 | 5.0 | 5.55 | Keats FW | |||||||||||||
Including | 177.7 | 178.7 | 1.0 | 21.2 | ||||||||||||||
NFGC-20-52 | 107.7 | 109.8 | 2.1 | 136.7 | Keats | |||||||||||||
And | 114.4 | 128.5 | 14.1 | 31.5 | Keats | |||||||||||||
And | 132.2 | 137.8 | 5.6 | 13.7 | Keats | |||||||||||||
NFGC-20-73 | 25.8 | 28.0 | 2.2 | 7.26 | Keats | |||||||||||||
Including | 26.6 | 27.0 | 0.5 | 30.1 | ||||||||||||||
And | 191.5 | 194.0 | 2.5 | 21.9 | Keats FW | |||||||||||||
Including | 191.5 | 192.2 | 0.7 | 83.4 | ||||||||||||||
And | 292.4 | 293.8 | 1.35 | 2.73 | Keats FW | |||||||||||||
NFGC-21-80 | 49.5 | 88.5 | 39.1 | 25.8 | ||||||||||||||
Including | 62.7 | 72.8 | 10.1 | 58.5 | Keats | |||||||||||||
Including | 78.7 | 88.5 | 9.9 | 39.5 | ||||||||||||||
And | 93.2 | 95.5 | 2.3 | 41.6 | Keats |
*Note that the host structures are interpreted to be steeply dipping and true widths are estimated to be 70% to 80% of reported intervals. Reported intervals are calculated at a 1 g/t Au cut-off grade. Grades have not been capped in the averaging.
Table 3: Details of drill holes reported on in this news release
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||
NFGC-20-48 | 300 | -45 | 198 | 658 247 | 5 427 430 | |||||||||||
NFGC-20-49 | 300 | -45 | 234 | 658 309 | 5 427 468 | |||||||||||
NFGC-20-52 | 300 | -45 | 192 | 658 243 | 5 427 445 | |||||||||||
NFGC-20-73 | 300 | -45 | 297 | 658 058 | 5 427 383 | |||||||||||
NFGC-21-80 | 300 | -45 | 200 | 658 239 | 5 427 486 |
Sampling, Sub-sampling and Laboratory
True widths of the new exploration intercepts reported in this press release have yet to be determined but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cutoff of 1.0 g/t Au with exception of drill hole NFGC-20-73 which terminated in mineralization. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 5 |
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101. Mr Matheson consents to the publication of this announcement dated March 10, 2021 by New Found Gold. Mr. Matheson certifies that this announcement fairly and accurately represents the information for which he is responsible.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. With working capital of approximately C$68M the Company is well financed to continue its current 200,000-m drill program, with a planned increase from the current six drill rigs to eight in Q1, 2021. New Found has a proven capital markets and mining team with major shareholders including Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), other institutional ownership (8%), and management, directors, and insiders (4%).
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company, please visit the Company’s website, www.newfoundagold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 6 |
Forward-Looking Statement Cautions
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 7 |
Exhibit 99.35
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
March 1, 2021
Item 3: | News Release |
The news release was disseminated on March 1, 2021, through the news dissemination services of Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company announced assay results from an interval drilled approximately 125m down plunge to the south of previously reported intervals at the Keats Zone (“Keats”), doubling the known extent of the high-grade gold mineralization at Keats. This hole was drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project, located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached hereto as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
March 1, 2021
Schedule “A” |
Keats Step-Out Returns 29.1 g/t Au over 11.4m,
Extends High-Grade Zone to 250m Down Plunge
Vancouver, BC, March 1, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce assay results from an interval drilled approximately 125m down plunge to the south of previously reported intervals at the Keats Zone (“Keats”), doubling the known extent of the high-grade gold mineralization at Keats. This hole was drilled as part of the Company’s ongoing 200,000m diamond drill program at its 100%-owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Highlights
· | A broad interval of intense quartz veining containing visible gold and sulphide mineralization within the Keats-Baseline fault was submitted on a rush basis and returned the following interval: |
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | ||||
NFGC-21-104 | 214.5 | 225.9 | 11.4 | 29.1 |
*Note that the host structures are interpreted to be steeply dipping and true widths are estimated to be 70% to 80% of reported intervals. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.
· | After Hole 21-104 was terminated at 255m, visible gold was observed in the bottom 0.6 meters of the hole. This 0.6m interval was sent for assay and returned 7.35 g/t Au. The Company plans to deepen NFGC-21-104 to determine the extent of this additional gold mineralization. |
· | Keats high-grade zone is now drill defined over approximately 250m in the down plunge direction (Figure 1) along a continuous dilative envelope that is being targeted within the Keats Baseline Fault. The dilative envelope has been intersected at the bedrock surface in previously reported intervals and shows an approximately 30° plunge to the south. |
· | Gold mineralization persists laterally and vertically throughout the Keats-Baseline fault with the largest concentrations to date found within the plunging envelope. |
· | Step-out drilling down plunge to the south is continuing. Grid drilling to test the vertical extent of high-grade is also ongoing, with high-grade mineralization confirmed over +140m vertically to date. |
Denis Laviolette, President of New Found, stated: “We are excited by the expanding footprint of high-grade gold mineralization at Keats, confirmed by partial assay results for 26 holes to date and the logging and interpretation of vein intervals in an additional 34 holes. To date the zone is interpreted to be at least 250m in the down plunge direction, appears to have a vertical extent of at least 140m, with estimated true widths typically in the 10m range and up to 30m+. High-grade gold mineralization is open down plunge and vertically, and step-out and infill drilling is continuing.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 1 |
Our growing understanding at Keats and Lotto is adding to our excitement about the potential for the broader Appleton and JPB corridors. The odds of us drilling into the two best economic accumulations of gold on the project 2km apart with our first drillholes seems highly improbable. Ramping up to eight drills will allow us to both continue infill and step out drilling at Keats and Lotto, and to test multiple high-grade targets along 20km of prospective strike at Queensway North. Overall, we are working with over 100km of prospective strike within a 1,500km2 project, and we believe New Found is just scratching the surface of this district scale property.”
Figure 1. Keats long-section (results released and pending)
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 2 |
Figure 2. Keats plan view
Keats
Keats continues to deliver robust widths of vein hosted gold mineralization with substantial visible gold in quartz vein networks. Grades are moderately variable, consistent with most orogenic gold systems. The 250m down plunge dimension noted in this release is measured from the furthest north high-grade interval reported to date (hole NFGC-20-37, 10.3m at 25g/t Au starting at 9.0 m down hole, see Company’s February 11, 2021 news release) to the interval of 11.4m at 29.1 g/t Au reported for hole NFGC-21-104 in this release. The Company has dedicated three drill rigs for ongoing drilling at Keats that will continue infill drilling and to test the zone in both the horizontal and vertical directions, including to the south of NFGC-21-104.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 3 |
Queensway Project Exploration Strategy Update
Queensway North
New Found has recently completed down-hole 3D optical and acoustic televiewer measurements and is now processing this data to obtain precise interpretation of faulting, folding and vein interactions. Over the next few months the interpretations from this work will be merged with 3D EM, gravity, and magnetic data-inversions to characterize specific geological conditions present at Keats, Lotto and other showings that correlate to gold mineralization. Signatures developed in this work will be utilized in the targeting of potential new zones of gold mineralization along the Appleton and JBP fault zones.
Keats, Lotto, Knob, Dome, Road, and other zones represent the product of a very sparse preliminary patchwork of historical greenfields exploration programs. New Found has been fortunate to generate impressive drill results starting with its very first hole at Keats. Broader systematic testing recently resulted in the discovery of high-grade gold mineralization at Lotto (see the Company’s February 23, 2021 news release), where 41.2g/t Au over 4.75m and 25.4g/t over 5.15 m was intercepted in hole NFGC-20-17, the Company’s first hole targeting the Lotto Zone.
Keats and Lotto cover a very small footprint on extensive prospective trends along the Appleton and JBP faults, and New Found Gold believes there is vast discovery potential along these trends. As a first step to more comprehensively testing these trends, the Company is pleased to announce the commencement of a systematic plan that will see approximately 20km of strike length along the Appleton and JBP faults tested with first pass reconnaissance drill hole fences. This drilling will be guided by vectoring methods developed from a large volume of geological information, and vectoring methods developed based on the success to date on Queensway North.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 4 |
Figure 3. Queensway North Targeting Map
The Appleton and JBP have been subdivided into named blocks shown in Figure 3. Many of these blocks are undrilled to date.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 5 |
Queensway South
New Found is also continuing work on over 70km of strike of the Appleton and JBP faults on Queensway South (Figure 4). Six gold in till anomalies have been defined through a large-scale gold in till survey, including a number that are coincident with the Appleton and JBP structures (Figure 4). Field work in 2021 will continue towards developing additional drill targets on Queensway South.
Figure 4. Queensway North and South
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 6 |
Drill-hole Details
Table 2: Summary of results reported in this news release.
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||
NFGC-21-104 | 214.5 | 225.9 | 11.4 | 29.1 | Keats | |||||
254.4 | 255.0 | 0.6 | 7.35 | Keats |
Table 3: Details of drill holes reported on in this news release.
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||
NFGC-21-104 | 300 | -45 | 255 | 658 208 | 5 427 295 |
Sampling, Sub-sampling and Laboratory
True widths of the new exploration intercepts reported in this press release have yet to be determined but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cut-off of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101. Mr Matheson consents to the publication of this announcement dated March 1, 2021 by New Found Gold. Mr Matheson certifies that this announcement fairly and accurately represents the information for which he is responsible.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 7 |
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. With working capital of approximately C$70M the Company is well financed to continue its current 200,000-m drill program, with a planned increase from the current five drill rigs to eight drill rigs in Q1, 2021. New Found has a proven capital markets and mining team with major shareholders including Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), other institutional ownership (8%), and management, directors, and insiders (4%).
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company, please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 |
PAGE 8 |
Exhibit 99.36
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
February 23, 2021
Item 3: | News Release |
The news release was disseminated on February 23, 2021, through the news dissemination services of Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company announced recently received drill results from the Lotto Zone, drilled as part of the Company’s ongoing 200,000 m diamond drill program at its 100% owned Queensway Project, located on the Trans-Canada Highway 15 km west of Gander, Newfoundland..
Item 5: | Full Description of Material Change |
Please see the news release attached hereto as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
February 23, 2021
Schedule “A” |
New Found Intercepts 224.7 g/t Au over 2.45m at Lotto
Vancouver, BC, February 23, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce recently received drill results from the Lotto Zone (“Lotto”), drilled as part of the Company’s ongoing 200,000 m diamond drill program at its 100% owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15 km west of Gander, Newfoundland (Figure 1).
Highlights
· | Highlights from these drill intercepts are summarized below. |
Table 1: Lotto summary results
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | ||||||||||||
NFGC-20-20 | 100.3 | 103.3 | 3.00 | 5.31 | ||||||||||||
NFGC-20-27 | 222.9 | 224.9 | 2.00 | 31.3 | ||||||||||||
NFGC-20-50 | 43.7 | 45.8 | 2.10 | 65.3 | ||||||||||||
NFGC-21-100 | 118.0 | 120.5 | 2.45 | 224.7 | ||||||||||||
Previously Reported | ||||||||||||||||
NFGC-20-17 | 35.3 | 40.0 | 4.75 | 41.2 | ||||||||||||
And | 57.0 | 62.1 | 5.15 | 25.4 |
* Note that the true width of the mineralization is uncertain, but host structures are interpreted to be steeply dipping implying true widths in the range of 70% of reported intercepts. Intervals are calculated at a 1 g/t Au cut-off grade and minimum width of 2m, grades have not been capped in the averaging, maximum dilution allowed is 2m.
· | The intercept in NFGC-21-100 included over 250 disseminated flakes of visible gold and fine fracture coatings, with similar mineralogy to other high-grade drill intervals along the Appleton Fault. |
· | High-grade intercepts to date at Lotto are interpreted to primarily occur in a network of secondary, generally north-south striking, structures. Veining on some of these structures is interpreted as continuous over up to at least 300m of strike and open (Figure 2). |
· | Thickening and higher grades appear to correlate to fault splays and the intersection of subvertical structures. The high-grade intervals in Holes 17, 50, and 100 are interpreted to occur over such a vertically oriented zone. Drilling at Lotto will continue to step-out to depth on identified zones, and will also test for additional high-grade zones focused on projected structural intersections and fault splays. |
· | Drilling is also targeting the Lotto Baseline Fault for gold mineralization similar to that being drilled in the Keats Baseline Fault. Keats also exhibits a series of mineralized secondary structures surrounding the broader Keats Baseline Zone mineralization. Drill definition of high grade gold in secondary structures at Lotto will be utilized to vector to targets in the Lotto Baseline Fault itself. |
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 1 |
Greg Matheson, Chief Operating Officer of New Found, stated: “Hole NFGC-21-100 returned some of the highest grades found to date at Queensway and as such is an outstanding result. Multiple high grade drill intervals have now been encountered in a network of secondary structures, with high grade interpreted to be focused on fault splays and structural intersections. This interpretation is guiding the step out drilling on high grade intervals at Lotto as well as helping to identify additional targets of this type. This network of secondary faults has been projected over an approximately 300m x 200m area at Lotto and remains open in all directions.
The Lotto Baseline Fault appears analogous to the Keats Baseline Fault and we continue to pursue possible high grade mineralization in this broader, more primary structure. Drilling at Queensway will continue to test a corridor up to 500 m wide encompassing +12 high-grade targets identified along the east side of the Appleton Fault Zone from Lotto to the Keats discovery 2 km to the south, and then another 2km south to the area of Knob (see Figure 1). The understanding of controls on high-grade mineralization being advanced at Lotto and Keats will help guide us as we explore this 4km corridor.”
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 2 |
Figure 1: Lotto Zone location and other target areas along the Appleton Fault Zone
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 3 |
Figure 2: Interpreted faults, veining and assay results at Lotto
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 4 |
Drill-hole Details
Table 2: Summary of results reported in this release
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-20-20 | 100.25 | 103.25 | 3.00 | 5.3 | Lotto | |||||||||||||
Including | 100.60 | 101.30 | 0.70 | 15.6 | Lotto | |||||||||||||
NFGC-20-22 | 91.50 | 99.90 | 8.40 | 1.3 | Lotto | |||||||||||||
NFGC-20-24 | 35.00 | 37.00 | 2.00 | 2.0 | Lotto | |||||||||||||
42.30 | 45.40 | 3.10 | 1.3 | Lotto | ||||||||||||||
138.10 | 140.30 | 2.20 | 1.2 | Lotto | ||||||||||||||
NFGC-20-27 | 156.00 | 158.10 | 2.10 | 1.7 | Lotto | |||||||||||||
222.90 | 224.90 | 2.00 | 31.3 | Lotto | ||||||||||||||
NFGC-20-31 | 45.70 | 52.00 | 6.30 | 1.0 | Lotto | |||||||||||||
NFGC-20-35 | NSV | Lotto | ||||||||||||||||
NFGC-20-39 | NSV | Lotto | ||||||||||||||||
NFGC-20-42 | 40.50 | 42.80 | 2.30 | 1.2 | Lotto | |||||||||||||
108.00 | 112.55 | 4.55 | 1.4 | Lotto | ||||||||||||||
NFGC-20-44 | 70.15 | 72.15 | 2.00 | 2.1 | Lotto | |||||||||||||
**238.55 | 245.05 | 6.50 | 18.1 | Lotto | ||||||||||||||
NFGC-20-47 | 15.25 | 18.00 | 2.75 | 1.4 | Lotto | |||||||||||||
29.35 | 31.35 | 2.00 | 1.1 | Lotto | ||||||||||||||
34.45 | 37.60 | 3.15 | 2.5 | Lotto | ||||||||||||||
42.00 | 45.10 | 3.10 | 1.1 | Lotto | ||||||||||||||
NFGC-20-50 | 43.65 | 45.75 | 2.10 | 65.3 | Lotto | |||||||||||||
NFGC-20-100 | 118.00 | 120.45 | 2.45 | 224.7 | Lotto |
* Note that the true width of the mineralization is uncertain, but host structures are interpreted to be steeply dipping implying true widths in the range of 70% of reported intercepts. Intervals are calculated at a 1 g/t Au cut-off grade and minimum width of 2m, grades have not been capped in the averaging, maximum dilution allowed is 2m.
** Interval previously released on January 14, 2021.
Table 3: Details of drill holes reported in this release
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-17 | 302 | -46 | 354 | 658 931 | 5 428 990 | |||||||||||||||
NFGC-20-20 | 300 | -45 | 190 | 658 973 | 5 428 962 | |||||||||||||||
NFGC-20-22 | 300 | -45 | 214 | 658 963 | 5 428 996 | |||||||||||||||
NFGC-20-24 | 300 | -45 | 258 | 658 936 | 5 428 954 | |||||||||||||||
NFGC-20-27 | 300 | -45 | 465 | 658 946 | 5 428 920 | |||||||||||||||
NFGC-20-31 | 300 | -45 | 258 | 658 878 | 5 428 902 | |||||||||||||||
NFGC-20-35 | 300 | -45 | 240 | 658 921 | 5 428 876 | |||||||||||||||
NFGC-20-39 | 300 | -45 | 164 | 658 885 | 5 429 156 | |||||||||||||||
NFGC-20-42 | 300 | -45 | 177 | 658 933 | 5 429 100 | |||||||||||||||
NFGC-20-44 | 300 | -45 | 294 | 658 956 | 5 429 030 | |||||||||||||||
NFGC-20-47 | 300 | -45 | 98 | 658 922 | 5 428 995 | |||||||||||||||
NFGC-20-50 | 300 | -45 | 92 | 658 927 | 5 428 981 | |||||||||||||||
NFGC-21-100 | 300 | -45 | 258 | 658 979 | 5 428 930 |
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 5 |
Expansion of Queensway Drill Program
New Found also announces that a fifth drill is now operating on the Queensway Project, with three additional drills expected to arrive over the next several weeks.
Sampling, Sub-sampling and Laboratory
True width of the mineralization is uncertain, but host structures are interpreted to be steeply dipping implying true widths in the range of 70% of reported intercepts. Selected intervals were submitted on a rush basis including the reported interval for NFGC-21-100. Additional assays for these holes will be reported once received. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cutoff of 1.0 g/t Au. All HQ split core assays reported were obtained by either complete sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia or by entire sample screened metallic screen fire assay at Eastern Analytical in Springdale, Newfoundland. The complete sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101. Mr Matheson consents to the publication of this announcement dated 23 February by New Found Gold. Mr Matheson certifies that this announcement fairly and accurately represents the information for which he is responsible.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. With working capital of approximately C$72M the Company is well financed to continue its current 200,000-m drill program, with a planned increase from the current four drill rigs to eight drill rigs in Q1, 2021. New Found has a proven capital markets and mining team with major shareholders including Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), other institutional ownership (8%), and management, directors, and insiders (4%).
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 6 |
Acknowledgements
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company, please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
NEWFOUND GOLD CORP.
Suite 1430, 800 West Pender Street, Vancouver, BC, V6C 2V6 | PAGE 7 |
Exhibit 99.37
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
February 11, 2021
Item 3: | News Release |
The news release was disseminated on February 11, 2021, through the news dissemination services of Canada Newswire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company announced recently received assay results from drilling at the Keats Zone, part of the Company’s ongoing 200,000m diamond drill program at its 100% owned Queensway Project, located on the Trans-Canada Highway 15 km west of Gander, Newfoundland..
Item 5: | Full Description of Material Change |
Please see the news release attached hereto as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
February 11, 2021
Schedule “A”
New
Found Gold Corp.
Suite 1430, 800 West Pender Street Vancouver, BC, V6C 2V6 |
New Found Intercepts 28.4 g/t Au over 13.8m
and 25.0 g/t Au over 10.3m at Keats,
Provides Exploration Overview
Vancouver, BC, February 11, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce recently received assay results from drilling at the Keats Zone (“Keats”), part of the Company’s ongoing 200,000 m diamond drill program at its 100% owned Queensway Project (“Queensway”), located on the Trans-Canada Highway 15 km west of Gander, Newfoundland.
Highlights
· | Highlights from these results are summarized below and in Figure 1. |
Keats Zone Summary Results | ||||||||||||||||
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | ||||||||||||
NFGC-20-37 | 9.0 | 19.3 | 10.3 | 25.0 | ||||||||||||
NFGC-20-38 | 105.8 | 111.6 | 5.8 | 19.8 | ||||||||||||
NFGC-20-40A | 107.4 | 114.7 | 7.3 | 19.3 | ||||||||||||
NFGC-20-45 | 46.6 | 60.4 | 13.8 | 28.4 | ||||||||||||
and | 68.0 | 71.3 | 3.3 | 20.6 | ||||||||||||
and | 83.3 | 85.3 | 2.0 | 17.1 | ||||||||||||
NFGC-20-46 | 112.7 | 115.6 | 2.9 | 13.7 | ||||||||||||
NFGC-20-56 | 25.6 | 57.9 | 32.3 | 6.18 | ||||||||||||
Including | 25.6 | 31.0 | 5.4 | 15.7 |
Note that the exact orientation of the veins is uncertain but believed to be steeply dipping thus implying true widths of the high-grade zone to be in the 70% to 80% range of reported drill lengths.
· | At Keats while mineralization remains open in all directions, we have observed a clear trend in the highest grade material forming a zone with a shallow plunge to the south along the Keats Baseline Fault. |
· | High-grade assay intervals received to date at Keats have correlated directly with the observation of significant visible gold in drill core. The Company is utilizing the observation of visible gold in drill core as the primary method to guide step-out drilling at Queensway. |
· | Assay results received from drilling to date have outlined an approximate 115m strike length of a thick, high-grade zone of gold mineralization at Keats. Logging and interpretation of drill core in step out holes to the north and south of this 115m interval have expanded the potential continuation of this zone to at least 260m of strike. This target zone remains open in both directions along strike and to depth. |
· | To the north the high-grade zone daylights at rock surface (under approximately 10m of glacial till), where broad intervals of near-surface high grade gold have previously been reported. Hole NFGC-20-41 for example was drilled in this area and returned two near surface intervals: 22.5 g/t Au over 10.4m and 31.4 g/t Au over 15.9m, with the first interval starting at 11.7m down hole (see the Company’s January 11, 2021 news release). |
Denis Laviolette, President of New Found, stated: “Drilling to date at Keats is delineating a high grade, near surface zone with significant extent and size potential. We are continuing to step out on it to the north, to the south, and to depth. At the Lotto Zone 2 km north of Keats, step-outs from hole NFGC-20-17 (41.2 g/t Au over 4.75m and 25.4 g/t Au over 5.15 m, see the Company’s October 2, 2020 news release) appear to be delineating a new zone of near surface, high-grade gold. The Company believes that historical exploration at the Knob prospect located 2 km south of Keats which includes a historical resource outlined by Noranda has significant room for expansion and drilling is scheduled to start on this target shortly. Additional drills are being mobilized to the site to double the rig count from four to eight with the increase focused on exploring some of the more than fifteen high-grade gold zones along the Appleton and JBP faults and the many kilometers of strike along these fault zones that have not been drill tested to date. Numerous high-grade boulders and float samples located along the parallel JBP fault, 5 km to the east have yet to be sourced and recent geophysical interpretations are pointing toward a number of targets along a twelve kilometer section of this fault that warrant drilling.”
Figure 1. Reported and pending holes at Keats Zone
Figure 2. Example gold mineralization from hole NFGC-20-45
Figure 3. Example gold mineralization from hole NFGC-20-40A
Drill Hole Interval Details
Hole No. | From (m) | To (m) | Interval (m)* | Au (g/t) | Zone | |||||||||||||
NFGC-20-37 | 9.0 | 19.3 | 10.3 | 25.0 | Keats Main | |||||||||||||
And | 22.7 | 28.6 | 5.9 | 5.18 | ||||||||||||||
And | 32.8 | 40.7 | 7.9 | 2.82 | ||||||||||||||
And | 43.8 | 45.8 | 2.0 | 13.2 | ||||||||||||||
And | 151.6 | 153.6 | 2.0 | 1.21 | Keats FW | |||||||||||||
NFGC-20-38 | 90.0 | 94.8 | 4.8 | 0.97 | Keats Main | |||||||||||||
And | 101.5 | 103.8 | 2.3 | 1.13 | ||||||||||||||
And | 105.8 | 133.2 | 27.4 | 5.64 | ||||||||||||||
Including | 105.8 | 111.6 | 5.8 | 19.8 | ||||||||||||||
And | 159.4 | 161.7 | 2.3 | 1.33 | Keats FW | |||||||||||||
NFGC-20- 40A | 93.4 | 95.7 | 2.3 | 1.91 | Keats Main | |||||||||||||
And | 107.4 | 114.7 | 7.3 | 19.3 | ||||||||||||||
And | 120.5 | 123.4 | 2.9 | 1.73 | ||||||||||||||
And | 129.9 | 132.2 | 2.3 | 5.03 | ||||||||||||||
And | 144.5 | 146.8 | 2.3 | 3.75 | ||||||||||||||
And | 171.9 | 174.0 | 2.1 | 1.09 | Keats FW | |||||||||||||
NFGC-20-45 | 22.5 | 25.0 | 2.5 | 2.1 | Keats HW | |||||||||||||
And | 46.6 | 60.4 | 13.8 | 28.4 | Keats Main | |||||||||||||
And | 68.0 | 71.3 | 3.3 | 20.6 | ||||||||||||||
And | 83.3 | 85.3 | 2.0 | 17.1 | ||||||||||||||
NFGC-20-46 | 92.8 | 95.0 | 2.2 | 7.32 | Keats Main | |||||||||||||
And | 112.7 | 115.6 | 2.9 | 13.7 | ||||||||||||||
Including | 114.0 | 114.5 | 0.5 | 59.8 | ||||||||||||||
And | 133.5 | 135.5 | 2.0 | 5.23 | ||||||||||||||
NFGC-20-49 | NSV | |||||||||||||||||
NFGC-20-53 | 20.6 | 23.4 | 2.8 | 1.07 | Keats Main | |||||||||||||
And | 32.6 | 35.0 | 2.4 | 2.20 | ||||||||||||||
And | 53.4 | 55.9 | 2.5 | 2.59 | ||||||||||||||
And | 58.6 | 62.0 | 3.4 | 3.24 | ||||||||||||||
And | 70.0 | 74.3 | 4.3 | 1.83 | ||||||||||||||
And | 75.8 | 78.1 | 2.3 | 3.64 | ||||||||||||||
And | 90.0 | 92.4 | 2.4 | 4.72 | ||||||||||||||
NFGC-20-54 | 69.5 | 80.5 | 11.0 | 1.98 | Keats Main | |||||||||||||
Including | 69.5 | 70.5 | 1.0 | 6.68 | ||||||||||||||
And | 85.4 | 94.1 | 8.7 | 2.02 | ||||||||||||||
Including | 85.4 | 85.9 | 0.5 | 18.9 | ||||||||||||||
NFGC-20-56 | 25.6 | 57.9 | 32.3 | 6.18 | Keats Main | |||||||||||||
Including | 25.6 | 31.0 | 5.4 | 15.7 | ||||||||||||||
And | 62.3 | 68.7 | 6.4 | 3.52 | ||||||||||||||
Including | 66.0 | 68.3 | 2.3 | 6.69 |
Azimuth | ||||||||||||||||||||
Hole No. | (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-37 | 300 | -45 | 344 | 658224 | 5427518 | |||||||||||||||
NFGC-20-38 | 300 | -45 | 176 | 658254 | 5427461 | |||||||||||||||
NFGC-20-40A | 300 | -45 | 204 | 658249 | 5427453 | |||||||||||||||
NFGC-20-45 | 300 | -45 | 164 | 658240 | 5427509 | |||||||||||||||
NFGC-20-46 | 300 | -45 | 169 | 658267 | 5427493 | |||||||||||||||
NFGC-20-49 | 300 | -45 | 234 | 658309 | 5427468 | |||||||||||||||
NFGC-20-53 | 300 | -45 | 188 | 658254 | 5427513 | |||||||||||||||
NFGC-20-54 | 300 | -45 | 198 | 658160 | 5427439 | |||||||||||||||
NFGC-20-56 | 300 | -45 | 118 | 658226 | 5427505 |
QA/QC
True widths of the new exploration intercepts reported in this press release have yet to be determined but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cutoff of 1.0 g/t Au. All HQ split core assays reported were obtained by either whole sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia. The whole sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Any samples that returned over-limit values (>100 g/t silver) were analyzed with the Ag-OG62 procedure (Ag by HF-HNO3 -HClO4 digestion with HCl leach, ICP-AES or AAS finish). Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. With working capital of approximately C$72M the Company is well financed to continue its current 200,000m program, with a planned increase from the current four drills to eight drills in Q1, 2021. New Found has a proven capital markets and mining team with major shareholders including Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), other institutional ownership (8%), and management, directors, and insiders (4%).
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgments
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions:
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made, and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
Exhibit 99.38
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
January 14, 2021
Item 3: | News Release |
The news release was disseminated on January 14, 2021, through the news dissemination services of Canada NewsWire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company announced a new high-grade gold discovery at its 100% owned Queensway Project, 15 km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached hereto as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
February 1, 2021
Schedule “A”
New Found Gold Corp. Suite 1430, 800 West Pender Street Vancouver, BC, V6C 2V6 |
New Found Intercepts 18.1 g/t Au over 6.5m
including 38.7 g/t Over 2.95m in New “Sunday
Zone” Discovery in the Appleton Fault Hanging
Wall, 2 km North of Keats Zone
Vancouver, BC, January 14, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce a new high-grade gold discovery at its 100% owned Queensway Project (“Queensway”), 15 km west of Gander, Newfoundland.
Highlights
· | An interval in what is interpreted to be on the hanging wall side of the main Appleton Fault displaying a broad quartz breccia vein, sulfide mineralization and/or visible gold starting at a down hole depth of 239 m was assayed on a rush basis returning 6.5m @ 18.1g/t Au including 2.95m @ 38.7g/t Au (see Figures 1 and 2). This new discovery has been named the “Sunday Zone”. | |
· | To date the Company has focused drilling targets along a 2km corridor typically 200m to 400m to the east of the main Appleton Fault with only five holes to date having intersected the main Appleton fault. This is the first discovery interval drilled in or immediately adjacent to the main Appleton Fault structure and opens a new target zone along the Appleton Fault itself. | |
· | This discovery hole was drilled as a step-out 50m to the north of two altered and mineralized intervals that returned up to 1.3 g/t Au in the hanging wall and footwall of the main Appleton Fault in drill hole NFGC-20-17, which was extended to depth to drill test the Appleton Fault itself (see the Company’s October 2, 2020 news release). | |
· | A number of observed features of this new discovery interval including the style of alteration and mineralization and the affiliation of high-grade gold with a breccia unit are reminiscent of what has been observed in high-grade drill intervals at Keats. |
Greg Matheson, P.Geo., Chief Operating Officer of New Found, stated: “We are excited to have intersected this new high-grade discovery on the hanging wall side of the Appleton Fault itself. Our work to date has focused on targets offset from the main Appleton Fault Zone including the Keats Baseline Zone, which are likely affiliated with a network of secondary structures related to the primary regional Appleton Fault. This opens the entire Appleton Fault itself as a primary target for high-grade gold mineralization, adding significantly to the already extensive prospective target area at Queensway North.
A program of follow-up step-out drilling to this discovery interval is now underway. The recent decision to increase our drill count from four to eight drills early in 2021, and to expand our current program to 200,000m, will allow us to aggressively follow up on this new discovery without detracting from plan to continue grid drilling of multiple defined high grade targets along 5 km of strike on the Appleton Fault Zone and 3 km of strike on the JBP fault Zone.”
Lotto Zone Hole NFGC-20-17 Update
On October 2, 2020, the Company announced two separate intervals in its first hole at the Lotto Zone, 2 km north of the Keats Zone. As reported NFGC-20-17 returned 41.2 g/t Au over 4.75m starting at 35 m down hole depth and 25.4 g/t Au over 5.15 m starting at 57 m down hole depth. The Company has now received assay results for an additional high-grade interval in NFGC-20-17 of 16.3g/t Au over 2.2m starting at 30 m down hole depth, with three high-grade intervals now reported between 30m and 62 m down hole depth. The Company is continuing to drill at the Lotto Zone including step-out holes from the NFGC-20-17 and intervals from this drilling have been submitted to the lab for assay on a rush basis.
Figure 1. Sunday Zone / Lotto Zone map
Figure 2. Photo of reported NFGC-20-44 interval, orange indicates visible gold mineralization
Drill Collar and Interval Summaries
Hole No. | From (m) | To (m) |
Interval
(m)* |
Au (g/t) | Zone | |||||
NFGC-20-44 | 238.55 | 245.05 | 6.5 | 18.1 | Sunday | |||||
Including | 242.10 | 245.05 | 2.95 | 38.7 | ||||||
NFGC-20-17 | 29.80 | 32.0 | 2.20 | 16.3 | Lotto | |||||
Previously Reported Results | ||||||||||
NFGC-20-17 | 35.25 | 40.00 | 4.75 | 41.2 | Lotto | |||||
Including | 35.25 | 36.9 | 1.65 | 108.7 | ||||||
NFGC-20-17 | 56.95 | 70.75 | 13.8 | 10.1 | Lotto | |||||
Including | 56.95 | 62.1 | 5.15 | 25.4 | ||||||
Including | 61.0 | 61.8 | 0.8 | 138.3 |
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-44 | 300 | -45 | 294 | 658956 | 5429030 | |||||||||||||||
NFGC-20-17 | 302 | -46 | 354 | 658931 | 5428990 |
Note that the exact orientation of the veins and the true width of the reported intervals is uncertain at this time.
QA/QC
True widths of the new exploration intercepts reported in this press release have yet to be determined but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cutoff of 1.0 g/t Au. All HQ split core assays reported were obtained by either whole sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia. The whole sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Any samples that returned over-limit values (>100 g/t silver) were analyzed with the Ag-OG62 procedure (Ag by HF-HNO3 -HClO4 digestion with HCl leach, ICP-AES or AAS finish). Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101.
About New Found Gold Corp
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. With working capital of approximately C$67M the Company is well financed to continue its current 200,000m program, with a planned increase from the current four drills to eight drills by February 2021. New Found has a proven capital markets and mining team with major shareholders including Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), other institutional ownership (8%), and management, directors, and insiders (4%). Approximately 65% of the Company’s issued and outstanding shares are subject to escrow or 180-day lock up agreements.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
New Found Gold at the 2021 Cordilleran Roundup
New Found Gold will be attending the 2021 AME Remote Roundup with a Core Shack booth January 18-22. Visit New Found Gold’s virtual booth for the following presentations: Greg Matheson, P.Geo. our Chief Operating Officer will be presenting the Queensway Project on January 18 and 21 at 10:30 am PST, and Denis Laviolette, P.Geo, President, and Craig Roberts, P.Eng., Chief Executive Officer will provide a corporate presentation on January 20 at 10:30 am.
Acknowledgments
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions:
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
Exhibit 99.39
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
January 11, 2021
Item 3: | News Release |
The news release was disseminated on January 11, 2021, through the news dissemination services of Canada NewsWire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company announced partial results from four diamond drill holes recently completed at the Keats Zone and six initial holes drilled at the Little-Powerline Zone, drilled as part of the Company’s ongoing 200,000 m diamond drill program at its 100% owned Queensway Project, 15 km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached hereto as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
January 11, 2021
Schedule “A”
New Found Gold Corp. Suite 1430, 800 West Pender Street Vancouver, BC, V6C 2V6 |
50 Meter Step-Out Hole at Keats Intercepts Broad,
Shallow, High-Grade Intervals:
22.5 g/t Au over 10.4m and 31.4 g/t Au over 15.9m
Vancouver, BC, January 11, 2021: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce partial results from four diamond drill holes recently completed at the Keats Zone (“Keats”) and six initial holes drilled at the Little-Powerline Zone (“Little-Powerline”), drilled as part of the Company’s ongoing 200,000 m diamond drill program at its 100% owned Queensway Project (“Queensway”), 15 km west of Gander, Newfoundland.
Keats Zone Highlights
· | Intervals displaying significant quartz veining, sulfide mineralization and/or visible gold are assayed on a rush basis. Recent results received for four holes at Keats are summarized below and in Figure 1. |
Keats Zone Summary Results
From | To | Interval | Au Grade | ||||||||||||||
(m) | (m) | (m) | (g/t) | ||||||||||||||
NFGC-20-41 | 11.7 | 22.1 | 10.4 | 22.5 | |||||||||||||
and | 45.0 | 60.9 | 15.9 | 31.4 | |||||||||||||
NFGC-20-43 | 119.8 | 138.0 | 18.2 | 10.0 | |||||||||||||
including | 122.3 | 130.0 | 7.7 | 20.7 | |||||||||||||
NFGC-20-33 | 151.9 | 156.0 | 4.0 | 2.59 | |||||||||||||
NFGC-20-36 | 96.4 | 105.3 | 8.9 | 5.16 |
· | Two shallow high-grade intervals in hole NFGC-20-41 (22.5 g/t Au over 10.4m and 31.4 g/t Au over 15.9m) have extended the Keats Zone 50m to the north of discovery hole NFGC-19-01 (Figure 1). |
· | Importantly, high-grade mineralization in NFGC-20-41 starts just 12m down hole at the bedrock surface. |
Greg Matheson, P.Geo., Chief Operating Officer of New Found, stated: “Veining in drilling to date at the Keats Zone is characterized by quartz and sulfide mineralization displaying consistent broad thicknesses in the range of 10m to 40m. Intervals of visible gold have been consistently encountered within broader mineralized vein intervals with assays to date returning consistent high-grade Au tenors. Good continuity is evident between holes with approximately 100m of strike now confirmed on this exciting high-grade zone. The zone remains open along strike and to depth, with geophysics, surface sampling, and wide-spaced drilling indicating at least 300m of prospective strike. Increasing our drill count from four to eight drills early in 2021 will help us to ramp-up the grid drilling at Keats and to also test multiple other high-grade targets along 5 km of strike on the Appleton Fault Zone and 3 km of strike on the JBP Fault Zone.”
Note that the exact orientation of the veins is uncertain but believed to be steeply dipping thus implying true widths of the high-grade zone to be in the 70% to 80% range of reported drill lengths.
Little-Powerline Zone Highlights
· | First pass drilling at the Little Powerline Zone, located on the west side of the Appleton Fault approximately one km northwest of the Keats Zone, has returned early promising results including: |
Little-Powerline Zone Summary Results
From | To | Interval | Au Grade | Ag Grade | |||||||||||||||
(m) | (m) | (m) | (g/t) | (g/t) | |||||||||||||||
NFGC-20-11 | 21.3 | 38.5 | 17.2 | 1.28 | |||||||||||||||
NFGC-20-12 | 16.9 | 26.5 | 9.6 | 2.61 | |||||||||||||||
including | 23.2 | 25.5 | 2.3 | 7.75 | |||||||||||||||
NFGC-20-14 | 11.0 | 13.0 | 2.0 | 253.8 | |||||||||||||||
and | 57.0 | 58.0 | 1.0 | 94.9 |
· | Holes NFGC-20-11 and NFGC-20-12 returned significant intervals of near surface gold mineralization including 1.28 g/t Au over 17.2m and 2.61 g/t Au over 9.6m, respectively. The latter interval includes a high-grade interval of 7.75 g/t Au over 2.3m. |
· | Interestingly and unexpectedly, hole NFGC-20-14 returned two intercepts of high-grade silver mineralization including 253.8 g/t Ag over 2.0 m. This is the first instance of high-grade silver being identified on the Queensway property. |
· | Silver mineralization is located proximal to the Little-Powerline gold bearing structures but is believed to be a separate, earlier mineralizing system. Further geological investigation is ongoing to determine the significance of these intervals and to develop a follow up plan for additional drilling. |
Note that the exact orientation of the veins is uncertain but believed to be steeply dipping thus implying true widths of the high-grade zone to be in the 70% to 80% range of reported drill lengths.
Keats Zone Drill Collar and Interval Summaries
Hole No. |
Azimuth
|
Dip (°) |
Length
|
UTM E | UTM N | |||||||||||||||
NFGC-20-33 | 300 | -45 | 297 | 658238 | 5427394 | |||||||||||||||
NFGC-20-36 | 300 | -45 | 150 | 658245 | 5427466 | |||||||||||||||
NFGC-20-41 | 300 | -45 | 195 | 658232 | 5427514 | |||||||||||||||
NFGC-20-43 | 300 | -45 | 182 | 658239 | 5427435 |
Hole No. |
From
(m) |
To (m) |
Interval
(m) |
Au (g/t) | Zone | |||||||||||||
NFGC-20-33 | 151.9 | 156 | 4.0 | 2.59 |
Keats Main |
|||||||||||||
And | 164.4 | 172.2 | 7.8 | 1.78 | ||||||||||||||
NFGC-20-36 | 75.4 | 77.4 | 2.0 | 7.22 |
Keats Main |
|||||||||||||
And | 88.8 | 107.7 | 18.9 | 3.29 | ||||||||||||||
Incl. | 96.4 | 105.3 | 8.9 | 5.15 | ||||||||||||||
And | 117.7 | 123.8 | 6.1 | 1.11 | ||||||||||||||
NFGC-20-41 | 11.7 | 22.1 | 10.4 | 22.5 |
Keats Main |
|||||||||||||
Incl. | 13 | 16.7 | 3.7 | 58.9 | ||||||||||||||
And | 32 | 35.5 | 3.5 | 1.36 | ||||||||||||||
And | 45 | 60.9 | 15.9 | 31.4 | ||||||||||||||
Incl. | 49.3 | 55.6 | 6.3 | 67.7 | ||||||||||||||
NFGC-20-43 | 109.7 | 114 | 4.3 | 1.54 |
Keats Main |
|||||||||||||
And | 119.8 | 138 | 18.2 | 10.0 | ||||||||||||||
Incl. | 122.3 | 130 | 7.7 | 20.7 | ||||||||||||||
And | 145.6 | 147.8 | 2.2 | 1.29 |
Little-Powerline Zone Drill Collar and Interval Summaries
Hole No. |
Azimuth
|
Dip (°) |
Length
|
UTM E | UTM N | |||||||||||||||
NFGC-20-11 | 300 | -45 | 74 | 657891 | 5428491 | |||||||||||||||
NFGC-20-12 | 300 | -45 | 150 | 657900 | 5428459 | |||||||||||||||
NFGC-20-13 | 300 | -45 | 89 | 657891 | 5428520 | |||||||||||||||
NFGC-20-14 | 120 | -45 | 90 | 657827 | 5828581 | |||||||||||||||
NFGC-20-15 | 300 | -45 | 172 | 657933 | 5428470 | |||||||||||||||
NFGC-20-16 | 300 | -45 | 195 | 657956 | 5428360 |
Hole No. |
From
|
To (m) |
Interval
|
Au (g/t) | Zone | |||||||||||
NFGC-20-11 | 21.3 | 38.5 | 17.2 | 1.28 | Little-Powerline | |||||||||||
NFGC-20-12 | 16.9 | 26.5 | 9.6 | 2.61 | Little-Powerline | |||||||||||
Incl. | 23.2 | 25.5 | 2.3 | 7.75 | ||||||||||||
NFGC-20-13 | NSR | Little-Powerline | ||||||||||||||
NFGC-20-14 | NSR Au, see Ag results below | Little-Powerline | ||||||||||||||
NFGC-20-15 | NSR | Little-Powerline | ||||||||||||||
NFGC-20-16 | NSR | Little-Powerline |
NSR = No Significant Au Results
Anomalous Ag results from Little-Powerline
Hole No. |
From
|
To (m) |
Interval
|
Ag (g/t) | Zone | ||||||||||||||
NFGC-20-14 | 11.0 | 13.0 | 2.0 | 253.8 | Little-Powerline | ||||||||||||||
And | 57.0 | 58.0 | 1.0 | 94.9 |
QA/QC
True widths of the new exploration intercepts reported in this press release have yet to be determined but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cutoff of 1.0 g/t Au. All HQ split core assays reported were obtained by either whole sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia. The whole sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Any samples that returned over-limit values (>100 g/t silver) were analyzed with the Ag-OG62 procedure (Ag by HF-HNO3 -HClO4 digestion with HCl leach, ICP-AES or AAS finish). Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101.
About New Found Gold Corp
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. With working capital of approximately C$67M the Company is well financed to continue its current 200,000m program, with a planned increase from the current four drills to eight drills by February 2021. New Found has a proven capital markets and mining team with major shareholders including Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), other institutional ownership (8%), and management, directors, and insiders (4%). Approximately 65% of the Company’s issued and outstanding shares are subject to escrow or 180-day lock up agreements.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
New Found Gold at the 2021 Cordilleran Roundup
New Found Gold will be attending the 2021 AME Remote Roundup with a Core Shack booth January 18-22. Visit New Found Gold’s virtual booth for the following presentations: Greg Matheson, P.Geo., our Chief Operating Officer, will be presenting the Queensway Project on January 18 and 21 at 10:30 am PST, and Denis Laviolette, P.Geo, President, and Craig Roberts, P.Eng., Chief Executive Officer, will provide a corporate presentation on January 20 at 10:30 am.
Acknowledgments
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions:
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
Exhibit 99.40
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
January 6, 2021
Item 3: | News Release |
The news release was disseminated on January 6, 2021, through the news dissemination services of Canada NewsWire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company announced that it is expanding the current Queensway drill program from 100,000 meters to 200,000 meters and is increasing the rig count from four to eight drills.
Item 5: | Full Description of Material Change |
The Company announced it is expanding the current Queensway drill program from 100,000 meters to 200,000 meters and is increasing the rig count from four to eight drills.
Highlights
• | The decision to double the current drill program to 200,000 meters was made following an analysis of the multiple high-grade gold intercepts reported from drilling to date and further review of the multiple drill-ready targets defined along 5 km of strike of the Appleton Fault Zone and 3 km of strike of the JBP Fault Zone. | |
• | To the end of December 2020, approximately 13,400 meters of drilling has been completed. | |
• | With this expansion to 200,000 meters of drilling, the revised budget for the Queensway program commencing January 1, 2021 is approximately $35 million. | |
• | The Company currently has approximately $67 million in working capital and is well funded to support this expanded program. | |
• | Following the holiday break, drilling has now resumed at the Queensway with four drill rigs currently on site. The Company is advancing arrangements for four additional drills and anticipates finalizing contracts and mobilizing these drills by February 2021. | |
• | There is currently a significant backlog of samples from the 2020 drilling at the assay lab including a significant number of samples submitted on a rush basis. Additional results are expected by next week. |
QA/QC
True widths of the new exploration intercepts reported in the press release have yet to be determined but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cutoff of 1.0 g/t Au. All HQ split core assays reported were obtained by either whole sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia. The whole sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in the press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
January 7, 2021
Exhibit 99.41
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
December 31, 2020
Item 3: | News Release |
The news release was disseminated on January 4, 2021, through the news dissemination services of Canada NewsWire and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company announced that Executive Chairman Collin Kettell has exercised 4,280,000 options for an aggregate investment of $4,553,625 and CEO Craig Roberts has exercised 700,000 options for an aggregate investment of $700,000 increasing working capital of the Company by $5.25M to approximately $67M. In addition, the Company announced that it has granted stock options exercisable for a total of 6,242,500 common shares in the capital of the Company, to certain officers, directors, employees, and consultants of the Company. These stock options have an exercise price of $4.10 per option and expire on December 31, 2025.
Item 5: | Full Description of Material Change |
The Company announced that Executive Chairman Collin Kettell has exercised 4,280,000 options at a weighted average exercise price of $1.06 per share for an aggregate investment of $4,553,625 and CEO Craig Roberts has exercised 700,000 options at an exercise price of $1.00 for an aggregate investment of $700,000. As a result of the exercises, working capital of the Company has increased by $5.25M to approximately $67M. These investments were made without selling any Company shares to cover the $5.25M cost of exercising the options or the tax liabilities resulting from the exercise.
In addition, the Company announced that it has granted stock options exercisable for a total of 6,242,500 common shares in the capital of the Company, to certain officers, directors, employees, and consultants of the Company. These stock options have an exercise price of $4.10 per option and expire on December 31, 2025. The options are governed by the terms and conditions of the Company’s amended and restated stock option plan. Following the grant of the stock options, the Company has a total of 14,182,500 stock options outstanding, representing approximately 9.54 percent of the outstanding common shares of the Company. This stock option grant is subject to TSX Venture Exchange approval.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
January 4, 2021
Exhibit 99.42
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
December 15, 2020
Item 3: | News Release |
The news release attached hereto as Schedule “A” announcing the material change described herein was disseminated through the news dissemination services of Canada NewsWire on December 15, 2020, and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company announced partial results from six additional holes drilled at the Keats Zone as part of the Company’ ongoing 100,000m diamond drill program at its 100% owned Queensway Project, 15 km west of Gander, Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached hereto as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
December 17, 2020
Schedule “A”
New Found Gold Corp.
Suite 1430, 800 West Pender Street Vancouver, BC, V6C 2V6 |
New Found Gold Intercepts 45.3 g/t Au over 13.1m and 25.0 g/t Au over 16.85m in Step-Out Drilling at Keats Zone, Queensway Project, Newfoundland
Vancouver, BC, December 15, 2020: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce partial results from six additional holes drilled at the Keats Zone (“Keats”) drilled as part of the Company’ ongoing 100,000m diamond drill program at its 100% owned Queensway Project (“Queensway”), 15 km west of Gander, Newfoundland.
Highlights
· | Intervals displaying significant quartz veining, sulfide mineralization and/or visible gold are assayed on a rush basis. Recent results received for six holes at Keats are summarized below and in Figure 1. |
Grade | Interval | Targeting Relative | ||||||||
(g/t Au) | (m) | to NFGC-19-01 | ||||||||
NFGC-20-32 | 45.3 | 13.1 | 10m south, 10m below | |||||||
NFGC-20-29 | 25.0 | 16.9 | 10m south | |||||||
NFGC-20-28 | 40.1 | 4.1 | 10m south, 10m above | |||||||
NFGC-20-25 | 7.3 | 2.2 | 10m above | |||||||
NFGC-20-34 | 29.3 | 2.4 | 25m below 19-01 | |||||||
NFGC-20-30 | 10.3 | 6.1 | 50m south of 19-01 | |||||||
NFGC-19-01 | 92.9 | 19.0 | Previously reported |
· | These intervals reported above start at down-hole depths ranging from 80m to 132m. |
· | The interval reported in hole NFGC-20-30 is 50m south of NFGC-19-01 and is the second interval reported on this fence line. This intercept is approximately 50m vertically below the interval of 44.5 g/t Au over 6.85m previously reported in hole 20-26 (see November 16, 2020 news release). |
· | Intervals from holes completed 50m north of NFGC-19-01 (fence line 4850N) have been submitted on a rush basis and the Company anticipates reporting these results by early January. |
· | Of 36 holes completed to date at the Keats Zone the Company has now received full or partial results for 12 holes (including NFGC-19-01), including the six holes reported in this release. For other Keats Zone results please refer to the Company’s October 27 and November 16, 2020 news releases. |
Greg Matheson, P.Geo., Chief Operating Officer of New Found, stated: “Veining observed in drill holes to date at Keats is characterized by quartz-sulfide mineralization displaying thicknesses typically in the 20m to 40m range with good continuity between holes. Intervals displaying visible gold have consistently been encountered within these broader vein intervals. Assays received to date have typically returned high-grade results albeit with some variability in thickness and grades likely due to the nugget effect. The Keats Zone has been confirmed by geophysics, surface sampling, and wide spaced drilling over more than 300m of strike and remains open along strike in both directions and to depth. Our current drill program continues to step-out and test this zone laterally and to depth.”
Figure 1. Drill hole collar and interval locations
Figure 2. Example gold mineralization in Keats hole NFGC-20-28
(note this is not intended to be representative of the gold mineralization in this hole)
Drill Collar and Interval Summaries
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-25 | 300 | -45 | 147 | 658217 | 5427459 | |||||||||||||||
NFGC-20-28 | 300 | -45 | 150 | 658213 | 5427450 | |||||||||||||||
NFGC-20-29 | 300 | -45 | 186 | 658222 | 5427445 | |||||||||||||||
NFGC-20-30 | 300 | -45 | 167 | 658195 | 5427419 | |||||||||||||||
NFGC-20-32 | 300 | -45 | 269 | 658151 | 5427444 | |||||||||||||||
NFGC-20-34 | 300 | -45 | 213 | 658258 | 5427440 | |||||||||||||||
NFGC-19-01 | 300 | -45 | 199 | 658226 | 5427453 |
Hole No. | From (m) | To (m) | Interval (m) | Au (g/t) | Zone | |||||||||||||
NFGC-20-25 | 80 | 85.7 | 5.7 | 1.5 | Keats Main | |||||||||||||
NFGC-20-25 | 99.8 | 101.95 | 2.15 | 7.31 | Keats Main | |||||||||||||
incl. | 101.65 | 101.95 | 0.3 | 25.8 | ||||||||||||||
NFGC-20-28 | 88.5 | 93 | 4.5 | 1.64 | Keats Main | |||||||||||||
NFGC-20-28 | 106.95 | 111 | 4.05 | 40.1 | Keats Main | |||||||||||||
incl. | 109.4 | 110.4 | 1 | 119.8 | ||||||||||||||
NFGC-20-29 | 104 | 120.85 | 16.85 | 25 | Keats Main | |||||||||||||
incl. | 113.65 | 117.55 | 3.9 | 103.2 | ||||||||||||||
NFGC-20-30 | 97.4 | 129.4 | 32 | 2.59 | ||||||||||||||
incl. | 119.65 | 125.75 | 6.1 | 10.3 | Keats Main | |||||||||||||
incl. | 120.25 | 122.25 | 2 | 26.1 | ||||||||||||||
NFGC-20-32 | 103 | 132 | 29 | 20.8 | ||||||||||||||
incl. | 118.9 | 132 | 13.1 | 45.3 | Keats Main | |||||||||||||
incl. | 119.9 | 125.35 | 5.45 | 82.7 | ||||||||||||||
NFGC-20-34 | 109.4 | 152.6 | 43.2 | 2.39 | Keats Main | |||||||||||||
incl. | 120.1 | 122.45 | 2.35 | 29.3 |
Note that the exact orientation of the veins is uncertain but believed to be steeply dipping thus implying true widths of the high-grade zone to be in the 70% to 80% range of reported drill lengths.
Table 1. Drill hole collar and interval summaries.
QA/QC
True widths of the new exploration intercepts reported in this press release have yet to be determined but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cutoff of 1.0 g/t Au. All HQ split core assays reported were obtained by either whole sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia. The whole sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101.
About New Found Gold Corp
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. With working capital of approximately C$61.5 million the Company is well financed for aggressive exploration with an initial planned drill program of 100,000 meters. New Found has a proven capital markets and mining team with major shareholders include Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), other institutional ownership (8%), and management, directors and insiders (4%). Approximately 65% of the Company’s issued and outstanding shares are subject to escrow or 180-day lock up agreements.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgments
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions:
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
Exhibit 99.43
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
December 11, 2020
Item 3: | News Release |
The news release attached hereto as Schedule “A” announcing the material change described herein was disseminated through the news dissemination services of CNW Group on December 11, 2020, and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
The Company announced it has entered into a purchase and sale agreement (the “Agreement”) with Exploits Discovery Corp. (“Exploits”) providing for the sale by the Company to Exploits of a 100% interest in two mineral claims (the “Mineral Claims”) (the “Transaction”). As consideration for the purchase of the Mineral Claims, Exploits will issue to the Company 6,562,799 common shares in the capital of Exploits (the “Consideration Shares”) and the Company will also retain a 2% net smelter returns royalty on production from the Mineral Claims. Pursuant to the terms of the Agreement, the Company has agreed not to transfer or dispose of the Consideration Shares for a period of one year following the closing date of the Transaction, other than in the event of a change of control of Exploits. Upon completion of the Transaction, the Company will own approximately 9.9% of the issued and outstanding Exploits Shares. The Transaction is subject to certain closing conditions, including the approval of the TSX Venture Exchange and the Canadian Securities Exchange. It is anticipated that the closing of the Transaction will occur on or about December 15, 2020. In addition, the Company announced it has completed approximately 11,900 m of core drilling at Queensway North, including 36 holes at the Keats Zone target.
Item 5: | Full Description of Material Change |
Please see the news release attached hereto as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
December 11, 2020
Schedule “A”
New Found Gold Corp. | ||
Suite 1430, 800 West Pender Street | ||
Vancouver, BC, V6C 2V6 |
New Found Announces Sale of Mineral Claims
to Exploits Discovery Corp. and Provides
Queensway North Drilling Update
Vancouver, BC, December 11, 2020: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce that it has entered into a purchase and sale agreement (the “Agreement”) with Exploits Discovery Corp. (“Exploits”) (CSE:NFLD) providing for the sale by New Found to Exploits of a 100% interest in two mineral claims (the “Mineral Claims”) representing approximately 12.0 km² of land (the “Transaction”). The primary claim is Jonathan’s Pond (11.25 km2, shown in Figure 1 below), and the second is a 75 Ha claim on Glover Island 210 km to the west of the Queensway project. As consideration for the purchase of the Mineral Claims, Exploits will issue to New Found 6,562,799 common shares in the capital of Exploits (the “Consideration Shares”) and New Found will also retain a 2% net smelter returns royalty on production from the Mineral Claims.
Figure 1. Jonathan’s Pond claim
New Found Gold Corp. | ||
Suite 1430, 800 West Pender Street | ||
Vancouver, BC, V6C 2V6 |
Pursuant to the terms of the Agreement, New Found has agreed not to transfer or dispose of the Consideration Shares for a period of one year following the closing date of the Transaction, other than in the event of a change of control of Exploits. Upon completion of the Transaction, New Found will own approximately 9.9% of the issued and outstanding Exploits Shares.
The Transaction is subject to certain closing conditions, including the approval of the TSX Venture Exchange in the case of New Found and the Canadian Securities Exchange in the case of Exploits. It is anticipated that the closing of the Transaction will occur on or about December 15, 2020.
Stated Collin Kettell, Executive Chairman of New Found, “We are pleased to partner with Exploits on the Jonathan’s Pond project. Consolidating the Johnathan’s Pond area into a contiguous claim package will facilitate efficient exploration in this area. While New Found is primarily focused on high-grade gold targets along the Appleton and JPB fault structures to the west of this project and in a different geological setting, Jonathan’s Pond does exhibit high-grade gold at surface. In exchange for these claims New Found is receiving share consideration of approximately $4.8 million (based on Exploit’s closing share price on December 10), and our resulting approximately 9.9% ownership of Exploits will provide exposure for New Found to the large land package that Exploits has acquired in Central Newfoundland.”
Queensway North Drilling Update
To date New Found has completed approximately 11,900 m of core drilling at Queensway North, including 36 holes at the Keats Zone target. The Company has now moved into its new 7,000 ft2 core-logging facility which has capacity for a significant expansion of the drill program should a decision be made to do so.
As previously noted, selected assay intervals are forwarded to the assay lab on a rush basis and a whole sample metallic screen assay method is specified by New Found when samples contain notable mineralization, visible gold, or at the lab when any samples return initial fire assay values greater than 1.0 g/t Au. The lab has the capacity to process a total of approximately 60 metallic screens per day. New Found has several thousand samples now awaiting or undergoing metallic screening resulting in significant backlog and time delay including for the drill intervals submitted on a rush basis. The Company anticipates receiving and reporting additional results from step out holes around NFGC-19-01 in the coming two weeks, as well as from the Little-Powerline and Lotto Zones. Initial intervals from other holes including those drilled on grid line 4850N (50 m north of NFGC-19-01) that were submitted on a rush basis are anticipated in early January 2021.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101.
About New Found Gold Corp
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The Queensway Project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. With working capital of approximately C$65.5 million the Company is well financed for aggressive exploration with an initial planned drill program of 100,000 meters. New Found has a proven capital markets and mining team with major shareholders include Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), other institutional ownership (8%), and management, directors and insiders (4%). Approximately 65% of the Company’s issued and outstanding shares are subject to escrow or 180-day lock up agreements.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
New Found Gold Corp. | ||
Suite 1430, 800 West Pender Street | ||
Vancouver, BC, V6C 2V6 |
Acknowledgments
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions:
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation with respect to the Transaction and the Company, including the proposed closing date of the Transaction. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated with obtaining the required approvals for the Transaction, satisfying the other conditions to the Transaction, possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
Exhibit 99.44
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
November 16, 2020
Item 3: | News Release |
The news release attached hereto as Schedule “A” announcing the material change described herein was disseminated through the news dissemination services of CNW/PRNewswire and Newsfile Corp. on November 16, 2020, and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
On November 16, 2020, the Company announced initial results from hole NFGC-20-26 at the Keats Zone drilled as part of the Company’s ongoing 100,000 m diamond drill program at its 100% owned Queensway High-Grade Gold Project in Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached hereto as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
November 16, 2020
Schedule “A”
New Found Gold Corp. Suite 1430, 800 West Pender Street Vancouver, BC, V6C 2V6 |
New Found Intercepts 44.5 g/t Au over 6.85m in 60m
Step-Out at Keats Zone, Queensway Project,
Newfoundland
Vancouver, BC, November 16, 2020: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce initial results from hole NFGC-20-26 at the Keats Zone (“Keats”), drilled as part of the Company’s ongoing 100,000m diamond drill program at its 100% owned Queensway High-Grade Gold Project (“Queensway”), 15km west of Gander, Newfoundland.
Highlights
· | An interval of drill core in Hole NFGC-20-26 displaying abundant quartz veining, sulfides and visible gold was assayed on a rush basis returning 44.5 g/t Au over 6.85m within a longer interval of 11.8 g/t Au over 29.15m, starting at 45 m down hole (note that the exact orientation of the veins is uncertain but believed to be steeply dipping thus implying true widths in the 70% to 80% range of reported drill lengths). |
· | The reported interval in NFGC-20-26 is located on fence line 4750N and is approximately 60m south-west of the discovery interval in hole NFGC-19-01 (see Figure 1). Two additional holes have now been completed on fence line 4750N and intervals from these holes have been submitted for assay on a rush basis. |
· | The high-grade interval in NFGC-20-26 displays characteristics suggestive of an epizonal orogenic depositional environment. |
· | The 10 m step out pattern from NFGC-19-01 roughly centered on fence line 4800N is continuing with ten holes additional to those already reported now completed (Figure 1). Intervals from each of these holes have been submitted or are being prepared for submission for assay on a rush basis. |
· | Four holes on fence line 4850N approximately 50m north of NFGC-19-01 have now been completed and intervals from these holes have also been submitted for assay on a rush basis (see Figure 1). |
Denis Laviolette President of New Found, stated: “We are delighted to intersect this significant interval of high-grade gold mineralization 60m south of discovery hole NFGC-19-01. Historic work and more recent drilling at Keats have demonstrated gold mineralization over at least 300m of strike and the Keats target remains open in each direction along strike and to depth. We are continuing to drill on grid lines at 50m spacing to the north and south of NFGC-19-01 and anticipate further results from this drilling in the next several weeks. In addition, the closer spaced drilling around NFGC-19-01 is yielding outstanding results and giving us valuable information about the spatial distribution and geometry of the high-grade gold mineralization. Our recent hole at Lotto Zone 2 km north of Keats (41.2 g/t Au over 4.75m and 25.4 g/t Au over 5.15m) has confirmed the potential for multiple high-grade zones along the 5km of the Appleton Fault Zone that will be grid drilled in our current 100,000m program.”
Figure 1. Drill hole collar and interval locations
Figure 2. Example of high-grade gold mineralization in Keats hole NFGC-20-26 (note this is not intended to be representative of the gold mineralization in NFGC-20-26).
Drill Collar and Interval Summaries
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-26 | 300 | -45 | 269 | 658151 | 5427444 |
Hole No. | From (m) | To (m) | Interval (m) | Au (g/t) | Zone | |||||||||||||||
NFGC-20-26 | 44.7 | 73.85 | 29.15 | 11.8 | ||||||||||||||||
Incl. | 67.0 | 73.85 | 6.85 | 44.5 | Keats Main | |||||||||||||||
Incl. | 73.5 | 73.85 | 0.35 | 824 | ||||||||||||||||
NFGC-20-26 | 194.4 | 197.6 | 3.20 | 1.09 | Keats FW | |||||||||||||||
NFGC-20-26 | 219.7 | 222.3 | 2.60 | 2.02 | Keats FW |
Table 1. Drill hole collar and interval summaries
QA/QC
True widths of the new exploration intercepts reported in this press release have yet to be determined but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cutoff of 1.0 g/t Au. All HQ split core assays reported were obtained by either whole sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia. The whole sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101.
About New Found Gold Corp
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. With working capital of approximately C$75 million the Company is well financed for aggressive exploration with an initial planned drill program of 100,000 meters. New Found has a proven capital markets and mining team with major shareholders include Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), other institutional ownership (8%), and management, directors and insiders (4%). Approximately 65% of the Company’s issued and outstanding shares are subject to escrow or 180-day lock up agreements.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgments
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions:
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
Exhibit 99.45
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
October 27, 2020
Item 3: | News Release |
The news release attached hereto as Schedule “A” announcing the material change described herein was disseminated through the news dissemination services of CNW/PRNewswire and Newsfile Corp. on October 27, 2020, and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
On October 27, 2020, the Company announced preliminary results from the first four 2020 drill holes at the Keats Zone as part of an ongoing 100,000 m diamond drill program at its 100% owned Queensway High-Grade Gold Project in Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached hereto as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
October 27, 2020
Schedule “A”
New Found Gold Corp. | |
Suite 1430, 800 West Pender Street | |
Vancouver, BC, V6C 2V6 |
New Found Intercepts 22.3 g/t Au over 41.35m and 31.2 g/t Au over 18.85m in Initial Step-Out Drilling at Keats Zone, Queensway Project, Newfoundland
Vancouver, BC, October 27, 2020: New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG, OTC: NFGFF) is pleased to announce preliminary results from the first four 2020 drill holes (NFGC-20-18, 19, 21, and 23) at the Keats Zone (“Keats”) as part of an ongoing 100,000 m diamond drill program at its 100% owned Queensway High-Grade Gold Project (“Queensway”), 15 km west of Gander, Newfoundland.
Highlights
• | Holes NFGC-20-18, 19, 21, and 23 were drilled as part of a 10 m step out pattern around discovery hole NFGC-19-01 (a 3 hole x 3 hole pattern centered on NFGC-19-01) with the intention of establishing the geometry and orientation of veins making up the high-grade gold mineralizing system (Figure 1). |
• | Intervals from these holes displaying significant quartz veining, sulfide mineralization and visible gold and were assayed on a rush basis and returned the following results: |
Targeting | ||||||||||
Interval | Au Grade | Relative to | ||||||||
(m) | (g/t) | NFGC 19-01 | ||||||||
NFGC-20-18 | 7.9 | 24.1 | 10 m north, 10 m above | |||||||
NFGC-20-19 | 18.85 | 31.2 | 10 m north, same elevation | |||||||
NFGC-20-23 | 41.35 | 22.3 | 10 m north and 10 m below | |||||||
including | 21.25 | 39.8 | 10 m north and 10 m below | |||||||
including | 11.35 | 68.6 | 10 m north and 10 m below | |||||||
NFGC-20-21 | 18.35 | 15.8 | 10 m below | |||||||
NFGC-19-01 | 19.0 | 92.9 | Previously reported |
The exact orientation of the veins is uncertain but believed to be steeply dipping thus implying true widths of the high-grade zone to be in the 70% to 80% range of reported drill lengths.
• | These intervals start at down hole depths ranging from 82.7 m to 101.7 m. |
• | An additional four holes (NFGC-20-25, 28, 29 and 32, see Figure 1) have been completed as 10 m step outs from NFGC-19-01 and intervals from these holes have also been submitted for assay on a rushed basis. |
• | Pending drill holes include step out drilling 50 m to the north and south of NFGC-19-01. |
Greg Matheson, P.Geo., Chief Operating Officer of New Found, stated: “We are very pleased that our initial step-out drilling at Keats is demonstrating strong continuity of veining and high-grade gold mineralization. Our 10 m step out pattern around Hole NFGC-19-01 is providing valuable information about the orientation of veining and grade distribution. Historic work and more recent drilling at Keats have demonstrated gold mineralization over at least 300 m of strike and the target remains open along strike and to depth. Our program will continue systematic step out drilling to test this larger target area.”
Figure 1. Drill hole collar and interval locations
Figure 2. Example gold mineralization in Keats hole NFGC-20-23
Drill Collar and Interval Summaries
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-20-18 | 300 | -45 | 278 | 658223 | 5427467 | |||||||||||||||
NFGC-20-19 | 300 | -45 | 154 | 658232 | 5427462 | |||||||||||||||
NFGC-20-21 | 300 | -45 | 190 | 658236 | 5427449 | |||||||||||||||
NFGC-20-23 | 300 | -45 | 185 | 658240 | 5427458 |
Hole No. | From (m) | To (m) |
Interval
(m) |
Au (g/t) | Zone | |||||||||||||
NFGC-20-18 | 92.0 | 99.9 | 7.9 | 24.1 | Keats Main | |||||||||||||
Incl. | 98.9 | 99.9 | 1.0 | 167.6 | ||||||||||||||
NFGC-20-19 | 89.65 | 108.5 | 18.85 | 31.2 | ||||||||||||||
Incl. | 96.0 | 107.25 | 11.25 | 50.7 | Keats Main | |||||||||||||
Incl. | 102.0 | 107.25 | 5.25 | 100.6 | ||||||||||||||
NFGC-20-19 | 151.0 | 152.9 | 1.90 | 4.4 | Keats FW | |||||||||||||
NFGC-20-21 | 101.65 | 120.0 | 18.35 | 15.8 | ||||||||||||||
Incl. | 109.55 | 118.5 | 8.95 | 29.4 | Keats Main | |||||||||||||
NFGC-20-23 | 82.65 | 124.0 | 41.35 | 22.3 | ||||||||||||||
Incl. | 89.45 | 110.7 | 21.25 | 39.8 | ||||||||||||||
Incl. | 93.65 | 105.0 | 11.35 | 68.6 | Keats Main | |||||||||||||
93.65 | 94.0 | 0.35 | 1120 | |||||||||||||||
101.8 | 104.4 | 2.60 | 140.8 | |||||||||||||||
Incl. | 118.85 | 123.4 | 4.55 | 15.2 |
Table 1. Drill hole collar and interval summaries.
QA/QC
True widths of the new exploration intercepts reported in this press release have yet to be determined but are estimated to be 70% to 80% of reported core lengths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 meters using a lower cutoff of 1.0 g/t Au. All HQ split core assays reported were obtained by either whole sample metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia. The whole sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101.
About New Found Gold Corp
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. With working capital of approximately C$75 million the Company is well financed for aggressive exploration with an initial planned drill program of 100,000 meters. New Found has a proven capital markets and mining team with major shareholders include Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), other institutional ownership (8%), and management, directors and insiders (4%). Approximately 65% of the Company’s issued and outstanding shares are subject to escrow or 180-day lock up agreements.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgments
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Phone: (604) 562 9664
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions:
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
Exhibit 99.46
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“NFG” or the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
September 9, 2020
Item 3: | News Release |
News release was disseminated on September 9, 2020, through Newsfile Corp. and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
On September 9, 2020, the Company announced it has commenced drilling on the Keats “Discovery” Zone at its Queensway Project, Central Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
September 10, 2020
Schedule “A”
New Found Gold Corp.
Suite 1430, 800 West Pender Street Vancouver, BC, V6C 2V6 |
New Found Gold Commences Drilling at Keats
“Discovery” Zone Queensway Project, Newfoundland
Vancouver, BC, September 9, 2020, New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG) is pleased to announce it has commenced drilling on the Keats “Discovery” Zone at its Queensway Project, Central Newfoundland.
Highlights
• | An initial 12,000 m program at Keats has commenced following up on the intercept of 19.0 m of 92.9 g/t Au starting at 96 m drilled in hole NFGC-19-01 by New Found in late 2019. |
• | A second core drill has been added to the Queensway North program and has commenced drilling at the Keats Zone on September 8. The first rig has completed six holes at the Little/Powerline Zone and is now drilling at the Lotto Zone. |
• | Initial drilling at Keats will include eight holes on a 10 m x 10 m grid pattern around the intercept in NFGC-19-01 with the objective of determining the initial spatial trend of the high-grade gold mineralization intercepted in NFGC-19-01. |
• | Due to the very high-grade nature of the mineralization a significant number of gold ounces can be contained in relatively small volumes of rock. |
• | Other holes will be drilled to test the extent of the mineralization along 950m of strike length and to vertical depths of 500m. |
• | The NFGC-19-01 interval demonstrates an epizonal style of mineralization similar to that found at the high-grade Swan Zone at Kirkland Lake’s Fosterville mine in Victoria State, Australia (see the Company’s IPO prospectus on SEDAR and the Company’s August 12, 2020, news release). At the Swan Zone close spaced drilling is required to define the geometry of the high-grade gold mineralization and New Found has designed its drill program on the basis that Keats may be analogous. Note that the comparison to Fosterville’s Swan Zone is made as a model for the genesis of gold mineralization at Keats, it is not made to imply resource potential at Queensway. |
Denis Laviolette, P.Geo., President of New Found, stated: “We are excited to now be stepping out from the high-grade NFGC-19-01 discovery interval. The initial holes will be relatively shallow, drilled to approximately 200 m in depth, and we anticipate completing a number of step-out intervals in short order. Two drills are now active at Queensway North and we will be adding a third in the next several weeks. This will accelerate our program to grid drill much of the 5 km trend along the Appleton Fault Zone defined by numerous high-grade gold occurrences, and as well to initiate drilling on the parallel JBP Fault Zone.”
Overview of the Keats Zone
The Keats Zone is centered approximately 1 km north of the Trans-Canada highway, a 15-minute drive from Gander, Newfoundland (population ~15,000). The target area occurs in a broad fault zone parallel to the primary Appleton Fault with multiple quartz veins hosted in shale and other sediments (see Figure 1 below).
Figure 1. Appleton Fault Zone targets
The Keats-Baseline fault zone is coincident with a chargeability anomaly from a 1999 induced polarization (“IP”) survey that persists for approximately 2,000 m along strike until the survey data runs out. The initial drilling will test 950 m of this strike length (see Figure 2 below).
Figure 2. Keats Zone target area
Gold occurs in quartz veining as well as disseminations in the host sediments. Mineralization includes arsenopyrite, pyrite, chalcopyrite, boulangerite, and visible gold, illustrated by the photo of core from hole NFGC-19-01 in Figure 3 below. Note that this photo is of a selected interval from NFGC-19-01 and is not intended to be representative of gold mineralization found on the property. Survey information for NFGC-19-01 is provided in Table 1 below.
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-19-01 | 300 | -45 | 199 | 658148 | 5427245 |
Table 1. Location, azimuth, dip, and length of hole NFGC-19-01
Figure 3. Keats Zone drill hole NFGC-19-01 @ 106.5 m down hole
QA/QC
True widths of the new exploration intercepts reported in this press release have yet to be determined but are estimated to typically be 70%-80% of reported core lengths; all channel sample true widths are estimated to be close to the reported widths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 metres using a lower cutoff of 3.0 g/t Au. All HQ core assays reported were obtained by either whole sample rock metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia. The whole sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Corporation as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland, and just 18 km from Gander International Airport. The project is intersected by the Trans-Canada Highway, and has logging roads crosscutting the project, high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. With working capital of approximately C$75 million the Company is well financed for aggressive exploration with an initial planned drill program of 100,000 meters. New Found has a proven capital markets and mining team with major shareholders include Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), other institutional ownership (8%), and management, directors and insiders (4%). Approximately 65% of the Company’s issued and outstanding shares are subject to escrow or 180-day lock up agreements.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgments
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions:
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
Exhibit 99.47
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“NFG” or the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
September 3, 2020
Item 3: | News Release |
News release was disseminated on September 3, 2020, through Newsfile Corp. and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
On September 3, 2020, the Company announced it has received all permits required to commence drilling at its Keats “Discovery” Zone at its Queensway Project, Central Newfoundland. In addition, the Company announced it has granted stock options exercisable for a total of 215,000 common shares in the capital of the Company, to certain officers, directors, employees, and consultants of the Company.
Item 5: | Full Description of Material Change |
Please see the news release attached as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
September 3, 2020
Schedule “A”
New Found Gold Corp. | |
Suite 1430, 800 West Pender Street | |
Vancouver, BC, V6C 2V6 | |
New Found Receives Final Permits and Mobilizes for
Drilling at Keats “Discovery” Zone Queensway Project,
Newfoundland
Vancouver, BC, September 3, 2020, New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG) is pleased to announce it has now received all permits required to commence drilling at its Keats “Discovery” Zone at its Queensway Project, Central Newfoundland. Preparatory surface work is now under way and the first drill will be mobilized to the area shortly.
Craig Roberts, P.Eng., Chief Executive Officer of New Found, stated: “We are excited to return to the Keats Zone to follow up on the discovery made in November 2019 when New Found intersected 19.0 m of 92.9 g/t Au at approximately 75 m depth in hole NFGC-19-01. Since this program we have made significant progress towards understanding the geology, controls of mineralization, and likely genesis of this high-grade gold interval and we are excited to be moving into a program to grid drill this zone. More detail on the targeting and planned program at Keats will be provided in the coming days.”
Option Grant
New Found announces that it has granted stock options exercisable for a total of 215,000 common shares in the capital of the Company, to certain officers, directors, employees, and consultants of the Company. These stock options have an exercise price of $2.07 per option and expire on September 3, 2025. The options are governed by the terms and conditions of the Company’s Amended and Restated Stock Option Plan. Following the grant of the stock options, the Company has a total of 13,995,000 stock options outstanding, representing approximately 9.85% of the outstanding common shares of the Company. This stock option grant is subject to TSX Venture Exchange approval.
QA/QC
True widths of the new exploration intercepts reported in this press release have yet to be determined but are estimated to typically be 70%-80% of reported core lengths; all channel sample true widths are estimated to be close to the reported widths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 metres using a lower cutoff of 3.0 g/t Au. All HQ core assays reported were obtained by either whole sample rock metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia. The whole sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with National Instrument 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Company as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument 43-101.
About New Found Gold Corp
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland. The project is intersected by the Trans-Canada Highway and located just 18 km from Gander International Airport, has logging roads crosscutting the project, has high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. With working capital of approximately C$75 million the Company is well financed for aggressive exploration with an initial planned drill program of 100,000 meters. New Found has a proven capital markets and mining team with major shareholders include Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), other institutional ownership (8%), and management, directors and insiders (4%). Approximately 65% of the Company’s issued and outstanding shares are subject to escrow or 180-day lock up agreements.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgments
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Email: croberts@newfoundgold.ca
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions:
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
Exhibit 99.48
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“NFG” or the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
August 27, 2020
Item 3: | News Release |
News release was disseminated on August 27, 2020, through Newsfile Corp. and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
On August 27, 2020, the Company announced its 2020 infill gold-grains-in-till sampling program has defined a new discovery area named the Eastern Pond target on its Queensway South project.
Item 5: | Full Description of Material Change |
Please see the news release attached as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
September 1, 2020
Schedule “A”
New Found Gold Corp.
Suite 1430, 800 West Pender Street Vancouver, BC, V6C 2V6 |
New Found Gold Identifies New Fertile Gold Region 45 km South of Current Queensway North Drill Targets
Vancouver, BC – August 27, 2020, New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG) is pleased to announce that its 2020 infill gold-grains-in-till sampling program has defined a new discovery area named the Eastern Pond target on its Queensway South project (see Figure 1 for location).
Highlights:
• | The newly defined Eastern Pond target is comprised of two areas where recent till results have shown highly anomalous total gold grain counts including a high percentage of pristine gold grains, and yielded several sub-crop samples up to 15.0 g/t Au. |
• | Importantly, the Eastern Pond target constitutes a new fertile gold region centered along regional faults approximately 45 km south of the current Queensway North drill program area. |
• | Neither of the new till or sub-crop sample result areas correlate to any known gold in bedrock sources, and as such represent a true grassroot discovery. |
• | One till sample yielded 216 gold grains, 163 (75%) of them classified as pristine. A second cluster of samples yielded up to 155 gold grains with 127 (82%) of these classified as pristine. The pristine morphology of these grains indicates that they have not travelled far from their bedrock source (Averill 2001). |
• | To date the Eastern Pond target is defined by sub-crop and till sample results over an approximately 4 km of strike length (see Figures 1 and 2 below). |
Greg Matheson, Chief Operating Officer of New Found stated: “This is a true grass roots find that greatly enhances the prospectivity of the large gold-in-till anomalies identified in 2018 over 60 km of strike on Queensway South. We will now trench the Eastern Pond target and plan to move a drill into the area this fall. Our 2020 field work continues on Queensway South and we look forward to further results from our ongoing infill sampling work on the other large gold-in-till anomalies defined by our regional sampling.”
Queensway South Field Work Overview
The Queensway South project area extends 60 km south-west from Gander Lake and covers the projected Appleton and JBP fault structures, believed to be primary controls for gold mineralization on the Queensway Project (see Figure 1). These structures have been defined by high resolution magnetic and EM geophysical surveys.
Figure 1: Location of the newly defined Eastern Pond Anomaly at Queensway South
Almost all of the project area is covered by a thin layer of glacial till, typically two to six meters in thickness. A regional scale till sampling program on a 2 km x 2 km grid completed in 2018 covered the entire Queensway South project area and identified six large gold-in-till geochemical anomalies covering areas up to 5 km x 2 km coincident with the regional fault structures (shown on Figure 1).
Follow up sampling to infill on 250 m x 500 m sample spacing is now well advanced. Preliminary results of the till gold grain analyses completed by Overburden Drilling Management Limited (“ODM”) from the Eastern Pond target area have now been received. ODM, based in Ottawa, are recognized specialists in sampling and analyzing glacial till material including for gold, and are providing consulting and analytical services to support New Found’s large scale till sampling program at Queensway. Microscope photographs of selected recovered gold grains from the Eastern Pond target till sample 41656 are included in Figure 3.
Field crews will be remobilized to the Eastern Pond area to conduct follow up work including prospecting, geological mapping and the collection of additional till samples to further vector the Company’s exploration towards bedrock sources.
Figure 2: Eastern Pond anomaly and preliminary till results
Sample ID | Easting | Northing | Total Gold Grains | Pristine Gold Grains | ||||||||||||||
41674 | 629784 | 5382499 | 216 | 163 | ||||||||||||||
41656 | 630332 | 5381175 | 155 | 127 |
Table 1: Eastern Pond target till samples
Figure 3 – Microscopic photographs of the recovered gold grains from the Eastern Pond target till sample 41656
QA/QC
Till sampling program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with NI 43-101 and CIM best practices. The Company inserts duplicate till samples for every 30th sample of the sample stream. Till samples are processed by ODM through gravity separation by first tabling the samples for the purposes of recovering and classifying gold grains of all sizes up to 2.0mm. Concentrates are then panned and examined under a binocular microscope to count, measure and classify gold grains by their morphology.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument NI 43-101.
About New Found Gold Corp.
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland. The project is intersected by the Trans-Canada Highway, is located just 18 km from Gander international airport, has logging roads crosscutting the project, has high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. With working capital of approximately C$75 million the Company is well financed for aggressive exploration with an initial planned 100,000 meter drill program in two phases now underway. New Found has a proven capital markets and mining team with major shareholders include Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), other institutional ownership (8%), and management, directors and insiders (4%). Approximately 65% of the Company’s issued and outstanding shares are subject to escrow or 180-day lock up agreements.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgments
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions:
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
Exhibit 99.49
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“NFG” or the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
August 14, 2020
Item 3: | News Release |
News release was disseminated on August 14, 2020, through Newsfile Corp. and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
On August 14, 2020, the Company announced that, further to its successfully completed initial public offering (the “Offering”) of an aggregate of 21,000,000 common shares of NFG at a price of CDN$1.30 per common share, the Agents (defined below) have sold an additional 3,150,000 common shares pursuant to their exercise in full of the over-allotment option (the “Over-Allotment Option”) granted by NFG, generating additional gross proceeds to NFG of CDN$4,095,000.
The common shares of NFG are listed on the TSX Venture Exchange under the symbol “NFG”. With the closing of the Over-Allotment Option, there are 141,950,231 common shares of NFG issued and outstanding.
Item 5: | Full Description of Material Change |
On August 14, 2020, the Company announced that, further to its successfully completed initial public offering (the “Offering”) of an aggregate of 21,000,000 common shares of NFG at a price of CDN$1.30 per common share, the Agents (defined below) have sold an additional 3,150,000 common shares pursuant to their exercise in full of the over-allotment option (the “Over-Allotment Option”) granted by NFG, generating additional gross proceeds to NFG of CDN$4,095,000.
The common shares of NFG are listed on the TSX Venture Exchange under the symbol “NFG”. With the closing of the Over-Allotment Option, there are 141,950,231 common shares of NFG issued and outstanding.
Canaccord Genuity Corp. and BMO Capital Markets acted as co-lead agents for the Offering with respect to a syndicate that included Desjardins Securities Inc. (the “Agents”).
No securities regulatory authority has either approved or disapproved of the contents of this news release. The common shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws. Accordingly, the common shares may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of NFG in any jurisdiction in which such offer, solicitation or sale would be unlawful.
1
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
August 21, 2020
2
Exhibit 99.46(b)
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“NFG” or the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
August 12, 2020
Item 3: | News Release |
News release was disseminated on August 12, 2020, through Newsfile Corp. and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
On August 12, 2020, the Company announced that, further to its successfully completed initial public offering (the “Offering”) of an aggregate of 21,000,000 common shares of NFG at a price of $1.30 per common share, the Agents (defined below) have exercised their over-allotment option (the “Over-Allotment Option”) in full and have agreed to offer and sell an additional 3,150,000 common shares of NFG at a price of $1.30 per common share, for additional gross proceeds to NFG of $4,095,000. Closing of the purchase of such additional common shares is anticipated to occur on August 14, 2020.
The common shares of NFG are listed on the TSX Venture Exchange under the symbol “NFG”. Following the closing of the Over-Allotment Option, there will be 141,950,231 common shares of NFG issued and outstanding.
Item 5: | Full Description of Material Change |
On August 12, 2020, the Company announced that, further to its successfully completed initial public offering (the “Offering”) of an aggregate of 21,000,000 common shares of NFG at a price of $1.30 per common share, the Agents (defined below) have exercised their over-allotment option (the “Over-Allotment Option”) in full and have agreed to offer and sell an additional 3,150,000 common shares of NFG at a price of $1.30 per common share, for additional gross proceeds to NFG of $4,095,000. Closing of the purchase of such additional common shares is anticipated to occur on August 14, 2020.
The common shares of NFG are listed on the TSX Venture Exchange under the symbol “NFG”. Following the closing of the Over-Allotment Option, there will be 141,950,231 common shares of NFG issued and outstanding.
Canaccord Genuity Corp. and BMO Capital Markets acted as co-lead agents for the Offering with respect to a syndicate that included Desjardins Securities Inc. (the “Agents”). No securities regulatory authority has either approved or disapproved of the contents of this news release. The common shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws. Accordingly, the common shares may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of NFG in any jurisdiction in which such offer, solicitation or sale would be unlawful.
1
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
August 21, 2020
2
Exhibit 99.46(c)
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“NFG” or the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
August 12, 2020
Item 3: | News Release |
News release was disseminated on August 12, 2020, through Newsfile Corp. and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
On August 11, 2020, the Company provided an update on its corporate activities and ongoing exploration activities at its Queensway Project located in Central Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
August 21, 2020
1
SCHEDULE “A”
Suite 1430 – 800 West Pender Street, Vancouver, BC V6C 2V6
THIS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES
New Found Gold Provides Update & Summarizes
Ongoing Activities at Queensway Project,
Newfoundland
Vancouver, BC – August 12, 2020, New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG) is pleased to announce an update on corporate activities and on its ongoing exploration activities at its Queensway Project, located in Central Newfoundland.
Highlights:
• | As previously announced, New Found has successfully completed its IPO led by Canaccord Genuity and BMO Nesbitt Burns issuing an aggregate of 21,000,000 common shares at a price of $1.30 per share for total gross proceeds of C$27,300,000. |
• | Post the IPO and prior to any exercise of the over-allotment option, New Found has 138.8 million shares issued and working capital of C$72 million (including 6.94 million Novo Resources shares priced at August 10 close). |
• | 90.1 million shares are subject to escrow or 180-day lock up agreements. There are 1,298,632 broker warrants issued and no other outstanding warrants. |
• | The Company has a strong and supportive shareholder base including Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), additional institutional ownership (8%), and management and insiders (4%). |
• | New Found is the largest mineral claimholder in the Province of Newfoundland & Labrador. The Company is fully funded for its Phases 1 and 2 drilling program at Queensway totaling 100,000 meters, budgeted at C$21.6 million and targeted for completion by the end of 2021. |
• | Details on the Company’s Queensway project and exploration plans are provided in the Company’s prospectus dated July 31, 2020 and filed on SEDAR. |
Collin Kettell, Executive Chairman of New Found stated: “After five years of privately funded exploration expenditures in excess of $10 million, we have now advanced the Queensway Project to an exciting stage where we are a listed company. A 100,000 m drill program will be initiated shortly, backed by $72 million in working capital. In late 2019, we intercepted 19.0 m of 92.9 g/t gold in the first hole of our maiden drill program at Queensway. We are excited to be embarking on this major drill program to follow up on this interval and to test the multiple targets as summarized in our prospectus.”
Craig Roberts, P.Eng., Chief Executive Officer stated: “We appreciate the support and trust the investment community has placed in our board, management team and exploration crews and we will work hard to execute our programs with effectiveness and efficiency. New Found will deliver a steady stream of drill results to the market through the planned 12+ months Phase 1 and Phase 2 programs. We would like to thank all of our stakeholders, including the communities of Gander and Appleton, as well as the local and provincial government representatives in Newfoundland for the support they have provided. We look forward to working together with all stakeholders as we advance the Queensway project through this next exciting phase of exploration.”
Ongoing Exploration Activity
An extensive program of field work began at the Queensway project in June and is ongoing, with a crew of more than 30 geologists, prospectors, and support personnel on site. The Company has been conducting a large-scale regional reconnaissance program at Queensway South, mapping geology, structure, and mineralization. The Company is also conducting an extensive till sampling program to further refine the gold in till anomalies discovered in 2018. These till anomalies all lie outside of areas with known gold occurrences.
An aggressive plan of surface excavation at Queensway North has been ongoing and has exposed and expanded several of the historic gold showings along the Appleton fault zone. It has also led to the discovery of two new zones of surface mineralization. The goal of this work is to further evaluate the surface showings, mineralization, and structure and best prepare for the upcoming drilling program.
The Company is actively preparing sites for drill pads in anticipation of launching a major drill program. This drilling will include closely spaced follow up to hole NFGC-19-01 at the Keats Zone, which intersected 19.0 m of 92.9 g/t gold starting at 96 m down. This intercept has an estimated true width of 70%, with further details regarding this hole provided in the table below.
Hole No. | Azimuth (°) | Dip (°) | Length (m) | UTM E | UTM N | |||||||||||||||
NFGC-19-01 | 300 | -45 | 199 | 658148 | 5427245 |
Highlights of the Queensway Project
Advantageous Location: New Found’s Queensway project is located on the Trans-Canada Highway, a 15-minute drive west of Gander, Newfoundland. A network of maintained forestry roads crisscross the project and provide excellent access for year-round exploration and drilling. The high-grade discovery hole at Keats (NFGC 19-01) is located less than 1 km from the highway.
The nearby Town of Gander has a population of 14,000, an international airport, and several industrial supply and support services. A significant number of the geologists and prospectors employed by the Company reside in Gander. Basing out of Gander has facilitated the Company’s strategy to minimize Covid-19 risks. Permitting is straight forward and the Government of Newfoundland and Labrador is supportive of mining development.
District Scale: Typically, major gold districts occur on deep, extensive fault or fracture systems that tap into gold-rich magmatic fluids at depth. The Queensway project is located on an approximately 105 km long NE-SW trending section of a fracture zone created through the collision of the North American and African plates approximately 450 million years ago. The Appleton and JBP fault structures are deep seated gold mineralizing structures created in this collision event (see figure below).
The 5 km of strike along the Appleton Fault Zone and the 3 km along the JBP Fault Zone that is the initial focus of drilling (see figure) is a small portion of the +100 km of prospective structure on these faults. An extensive till survey conducted by New Found over the last several years has identified approximately six large gold in soil anomalies coincident with the Appleton and JBP faults (see teal areas on the figure above). Some of these anomalies are up to 5 km in length and several km in width. The Phase 1 work includes additional till sampling on tighter line spacing, followed by trenching and drilling.
High Grade, Near Surface Targets: All drilling to date has been shallow, almost all of it to less than 100 m of depth. The surface sampling and drill intercepts in the figure below illustrate the high-grade nature of the gold mineralization. Along with this sampling and drilling work, high resolution geophysics, detailed structural mapping, till sampling, and trenching have been key in defining the initial drill target areas.
The high-grade and shallow nature of the mineralization means that the initial target areas can be tested with relatively shallow holes, resulting in relatively low drilling costs and shorter times for hole completion. The orogenic style mineralization has potential to extend to significant depth and the Company anticipates that drill hole lengths will increase over time as the Company pursues gold mineralization to depth.
Epizonal Style Mineralization: The mineralization in the 19.0 m at 92.9 g/t gold intercept at Keats Zone is now interpreted as epizonal style gold mineralization similar to that found at the high-grade Swan Zone at Kirkland Lake Gold’s Fosterville mine in Victoria, Australia. This similarity was recognized by Dr. Quinton Hennigh during his initial review and site visit in January 2020. Dr. Hennigh previously completed significant due diligence on the Swan Zone for Kirkland Lake Gold. Epizonal type of mineralization is emplaced near surface when a rock fracture perhaps due to a seismic event taps into very high temperature and pressure gold rich magmatic fluids at depth. These fluids move to surface in an explosive event and gold is precipitated rapidly as the fluid temperature and pressure suddenly drops. There are certain mineralogical and textural signatures of this epizonal type of mineralization. The Keats high-grade gold mineralization at Queensway is visually almost identical to that found in the Fosterville Swan Zone. An example is the “pin prick” very fine visible gold that results from the rapid gold precipitation. Additional detail on this comparison can be found on the corporate presentation and in the Addendum to this press release.
Left, core from Keats zone, Queensway Project; right, core from the Eagle zone, Fosterville Mine. Comparison of gray and white quartz vein material with numerous small specks of native gold from each deposit. Grey specks are mostly antimony minerals, boulangerite on the left and stibnite on the right. Some gray flecks are particles of black shale caught up in quartz. Such fine gold particles likely formed through rapid precipitation of gold in a shallow epizonal regime within an orogenic system, an indication of a shallow level of deposition for both deposits.
Note that the photos above and the Addendum to this release are of selected intervals and are not necessarily representative of the mineralization hosted on the Queensway property.
To the Company’s knowledge drilling along the JBP fault including by Rubicon in the mid-2000’s has not yet intersected epizonal style high-grade gold mineralization. However a high grade surface boulder (798 g/t) recovered to the north of the historic drilling at JBP provides some evidence that the JBP fault is also prospective for epizonal type gold mineralization. New Found will utilize its new understanding of the epizonal genetic model to explore for this type of epizonal mineralization along the JBP Fault Zone.
Board and Management
The Board of Directors and management team of the Company have been reconstituted to include the following individuals:
Collin Kettell – Founder & Executive Chairman: Collin is the Founder & Executive Chairman of Palisades Goldcorp Ltd., Canada’s new resource focused merchant bank, with $220M AUM and growing. He comes from a family with deep ties to the mining industry, including co-founding AuEx Ventures, the company responsible for discovering the Long Canyon deposit, a project ultimately acquired by Newmont for $2.3B. Collin is the Founder & Executive Chairman of Nevada King Mining Ltd., the fifth largest mineral claim holder in the State of Nevada; Co-Founder & CEO of Victory Metals (TSX- V:VMX); and Co-Founder of Goldspot Discoveries (TSX-V:SPOT).
Craig Roberts, P.Eng. – Chief Executive Officer & Director: Craig is a mining engineer with over 30 years of operations, consulting and investment banking experience. Includes work on feasibility studies for numerous mining projects worldwide, investment banking/due diligence roles in over 200 institutional equity financings. Significant experience advising management and boards on merger and acquisition transactions. Mr. Roberts has a degree in Mining Engineering from the University of British Columbia and an M.Phil. in Management Studies from Oxford University.
Denis Laviolette – Founder, President & Director: Denis has 10 years of experience in mining and capital markets; worked as a production and exploration geologist in Timmins, Kirkland Lake, Red Lake, Norway and Ghana. Later worked as a mining analyst with Pinetree Capital. Founder, Director and Executive Chairman of Goldspot Discoveries Inc. (TSX.V: SPOT) and also currently serves as a Director for Xtra-Gold Resources Corp. (TSE: XTG).
Dr. Quinton Hennigh – P.Geo., Director: Quinton is an economic geologist with 25 years of exploration experience, mainly gold related. Led exploration teams for Homestake Mining Company, Newcrest Mining Ltd. and Newmont Mining Corp. Founder, Chairman and President of Novo Resources, Founder and Director of Irving Resources. Lead role in a number of discoveries including significant involvement in high grade Swan Zone discovery at Fosterville.
John Anderson – Director: John has over 25 years of capital market experience specializing in the resource sector. A founder and financier of a number of startup companies with experience on the TSX. NYSE, NASDAQ, London AIM and Swiss Stock exchanges; Founder of Deep 6 PLC, American Eagle Oil and Gas,Inc. Founding general partner in Aquastone Capital LLC. Executive Chairman of Triumph Gold Corp. and Chairman of EXM Farming Corp.
Greg Matheson P.Geo. – Chief Operating Officer. Greg is a professional geologist with over 14 years experience managing grass roots exploration through to advanced exploration projects; former exploration manager of Northern Gold Mining, senior project manager for Oban Mining and Osisko Mining. Responsible for the discovery and delineation of the >2.0 Moz. Garrison Gold project in NE Ontario from early stage exploration through trial production mining
Michael Kanevsky CPA, CA – Chief Financial Officer
Michael is a Chartered Professional Accountant with expertise in corporate reporting, financial processes and risk management. Began his professional career in the audit and assurance practice at Deloitte and is the CFO of Mexican Gold Corp., Palisades Gold Corp. and several private mining companies
Ken Rattee, – V.P. Exploration. Ken has over 36 years’ experience in base and precious metal mineral exploration in various management roles; former chief geologist for Kirkland Lake Gold’s Macassa Mine. Extensive experience developing, supervising and implementing exploration campaigns including for Lac Minerals, Kirkland Lake Gold, Kinross Gold and Barrick Gold.
Option Grant
New Found announces that it has granted stock options exercisable for a total of 5,040,000 common shares in the capital of the Company, to certain officers, directors, employees, and consultants of the Company. These stock options have an exercise price of $1.40 per option and expire on August 12, 2025. The options are governed by the terms and conditions of the Company’s Amended and Restated Stock Option Plan. Following the grant of the stock options, the Company has a total of 13,830,000 stock options outstanding, representing approximately 9.96% of the outstanding common shares of the Company. This stock option grant is subject to TSX Venture Exchange approval.
QA/QC
True widths of the new exploration intercepts reported in this press release have yet to be determined but are estimated to be 70% of reported core lengths. Additional drilling is planned for the immediate area which will enable the true width determination. Assays are uncut, and calculated intervals are reported over a minimum length of 2 metres using a lower cutoff of 3.0 g/t Au. All HQ core assays reported were obtained by either whole sample rock metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia. The whole sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with NI 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Corporation as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument NI 43-101.
About New Found Gold Corp
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland. The project is intersected by the Tran’s Canada Highway, is located just 18 km from Gander international airport, has logging roads crosscutting the project, has high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. The Company is well financed for aggressive exploration with an initial planned drill program of 100,000 meters. New Found has a proven capital markets and mining team with major shareholders include Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), other institutional ownership (8%), and management, directors and insiders (4%). Approximately 65% of the Company’s issued and outstanding shares are subject to escrow or 180-day lock up agreements.
Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Contact
To contact the Company please visit the Company’s website, www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement Cautions:
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
ADDENDUM
Comparison of Queensway and Fosterville Swan Zone Geology and Mineralization
While no two mineral systems are ever identical, there is strong evidence to suggest the Central Newfoundland Gold Belt has many similarities to the Bendigo goldfields in Victoria state, Australia which New Found Gold is using as an early geological model. Bendigo goldfields has produced over 22 Moz of gold over its >150yr mining history. Fosterville Mine (Kirkland Lake Gold) is currently in production as the world’s highest grade and one of the lowest-cost primary gold mines
Comparable Features | Bendigo Gold Belt, Australia | Central Gold Belt, Newfoundland |
Host Lithology | Cambro-Ordovician | Middle Ordovician turbidites (shales, siltstones sandstones) |
to Devonian turbidites | ||
(sandstones, siltstones, shales) | ||
Structural features | Classic saddle reef fold structures | Fault hosted orogenic gold deposits |
AND fault hosted deposits | ||
(e.g. Fosterville Swan Zone) | ||
Metamorphic Grade | Sub-greenschist to greeenschist | Sub-greenschist to greeenschist |
Visible gold is common as | ||
Mineralogy | Visible gold is common as | disseminations in |
disseminations in | quartz-carbonate veining | |
quartz-carbonate veining | ||
Accessory minerals include pyrite, arsenopyrite, chalcopyrite, sphalerite, stibnite and boulangerite | ||
Accessory minerals include | ||
arsenopyrite, pyrite, sphalerite | ||
stibnite and boulangerite | ||
Mining History | Victoria Goldfields originally | First gold occurrence noted |
discovered in 1850’s and | In early 1980’s; now entering | |
produced over 22 Moz | discovery phase |
Left, core from the Keats zone, Queensway Project; right, core from the Eagle zone, Fosterville Mine. Comparison of intense quartz stock work with relict black shale fragments from each deposit. Specks of visible gold are present in quartz veins and their selvages. Gray patches contain fine grained antimony sulfides, boulangerite on left and stibnite on right.
Left, core from the Keats zone, Queensway Project; right, hand specimen from the Eagle zone, Fosterville Mine. Comparison of quartz veining displaying relict banding from each deposit. Dark material at the bottom is relict shaley material. Such banding is probably an original texture resulting from open space filling of quartz sulfides and gold at the time of deposition. Open space filling is indicative of a shallow level of deposition for both deposits.
Left, core from Keats zone, Queensway Project; right, core from the Eagle zone, Fosterville Mine. Comparison of vein quartz displaying numerous vugs, or small cavities, lined with quartz crystals from each deposit. Native gold is also visible in each sample. Such open space cavities are indicative of a shallow level of deposition for both deposits.
Left, core from Keats zone, Queensway Project; right, core from the Eagle zone, Fosterville Mine. Comparison of gray and white quartz vein material with numerous small specks of native gold from each deposit. Grey specks are mostly antimony minerals, boulangerite on the left and stibnite on the right. Some gray flecks are particles of black shale caught up in quartz. Such fine gold particles likely formed through rapid precipitation of gold in a shallow epizonal regime within an orogenic system, an indication of a shallow level of deposition for both deposits.
Exhibit 99.46(d)
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“NFG” or the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
August 11, 2020
Item 3: | News Release |
News release was disseminated on August 11, 2020, through GlobeNewswire and copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
On August 11, 2020, the Company announced the successful closing of its initial public offering (the “Offering”) of an aggregate of 21,000,000 common shares at a price of $1.30 per share (the “Offering Price”) for total gross proceeds of $27,300,000.
The common shares of the Company will commence trading today on the TSX Venture Exchange under the symbol “NFG”.
Item 5: | Full Description of Material Change |
On August 11, 2020, the Company announced the successful closing of its initial public offering (the “Offering”) of an aggregate of 21,000,000 common shares at a price of $1.30 per share (the “Offering Price”) for total gross proceeds of $27,300,000.
The common shares of the Company will commence trading today on the TSX Venture Exchange under the symbol “NFG”.
Canaccord Genuity Corp. and BMO Capital Markets acted as co-lead agents for the Offering with respect to a syndicate that included Desjardins Securities Inc. (the “Agents”).
NFG has granted the Agents an over-allotment option (the “Over-Allotment Option”), exercisable in whole or in part, at the sole discretion of the Agents, at any time and from time to time, for a period of 30 days following the closing of the Offering, to purchase up to an additional 3,150,000 common shares from NFG at the Offering Price for additional gross proceeds to the Company of $4,095,000 if the Over-Allotment-Option is exercised in full.
No securities regulatory authority has either approved or disapproved of the contents of this news release. The common shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws. Accordingly, the common shares may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of NFG in any jurisdiction in which such offer, solicitation or sale would be unlawful.
1
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604.562.9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
August 21, 2020
2
Exhibit 99.46(e)
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“NFG” or the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
August 17, 2020
Item 3: | News Release |
News release was disseminated on August 17, 2020, through Newsfile Corp. and a copy was subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
On August 17, 2020, the Company announced it has commenced drilling at its Queensway Project located in Central Newfoundland.
Item 5: | Full Description of Material Change |
Please see the news release attached as Schedule “A” for a full description of the material change.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer and Director of the Company, at 604-562-9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
August 21, 2020
1
Schedule “A”
New Found Gold Corp.
|
New Found Gold Commences 100,000-Meter Drill Program
at Queensway Project, Newfoundland
Vancouver, BC – August 17, 2020, New Found Gold Corp. (“New Found” or the “Company”) (TSXV: NFG) is pleased to announce it has commenced drilling at its Queensway Project, located in Central Newfoundland.
Highlights:
• | Diamond drilling commenced at the Little/Powerline Zone, along the Appleton Fault Zone, on Monday, August 17 (see Figure 1). |
• | An initial six holes (800 m) are planned at the Little/Powerline Zone to follow up on surface mapping and sampling including a channel sample of 18.6 g/t Au over 7.5 meters. |
• | Following completion of the initial six holes at Little/Powerline the first drill will be moved to the Keats Zone to follow up on the discovery intercept of 19.0 m of 92.9 g/t gold starting at 96 m down hole. An initial 12,000 m of drilling is planned at Keats. |
• | The Company plans to ramp up to 4 drills by the end of September resulting in approximately 2,000 m per week of core production. |
• | Drill plans are now developed for seven additional gold bearing targets: 1744, Pocket Pond, Logan/Lochlan, Zone 36, Lotto, Road, and Cokes Zones (see locations on Figure 1). |
• | Recent trenching has uncovered new mineralization in three areas with one new zone (Zone 36) demonstrating visible gold coincident with mineralization and textures typical of epizonal type mineralization. Zone 36 is located 2.5km north of discovery hole NFGC-19-01, along the Appleton Fault structure (see Figure 1). |
Collin Kettell, Executive Chairman of New Found, stated: “We are excited to begin our 100,000 m drill program at Queensway. Historical exploration has confirmed there are multiple near surface high-grade gold targets along 5 km of the Appleton Fault Zone trend and we are planning to grid drill much of this 5 km long target area.”
Craig Roberts, P.Eng., Chief Executive Officer, stated: “New Found is well advanced with the logistical infrastructure to support this major drilling program. We have purchased a seven-thousand square foot warehouse in Gander for core logging and processing and are outfitting it now. Additionally, we are finalizing the purchase of a one-acre industrial site where we will install core storage sheds. Our 30-plus person exploration team has been working in the field since June to advance and refine targeting ahead of the drill program.”
Queensway Project Drill Program Overview
Drilling will initially focus on the multiple targets on the Appleton Fault Zone (Figure 1) on Queensway North. The Company plans to add a second drill on the Appleton targets by the first week of September. A third rig is scheduled to commence work on the parallel JBP Fault Zone on Queensway North in mid-September. A fourth rig is planned for late September and will be available for initial drill testing of the large gold in till anomalies coincident with the Appleton and JBP fault structures identified on Queensway South (detail on these targets is provided in the Company’s August 12 news release). The Company has been conducting a large-scale reconnaissance program on the Queensway South project area to develop specific drill targets within these areas.
2
Additional drill targets will be developed and refined based on ongoing field work and continued review of the Company’s substantial database of exploration results and analysis incorporating the extensive work conducted by New Found over the last three years. Drill targets are defined by till sampling, trenching, high resolution geophysics, detailed structural mapping, surface sampling and previous drill intersections.
Appleton Fault Zone Drilling and Trenching
Targets at the Appleton Fault Zone include the primary Appleton fault structure as well as a network of secondary faults extending approximately 700 m perpendicular to the strike direction. Local drill grids for the initial target areas are shown on Figure 1. Given the extent of the high-grade gold mineralization identified to date the Company anticipates drilling fences on a 50 to 100 m spacing along much of this five-kilometer trend.
Figure 1: Multiple showings and zones along 5 kilometers of the Appleton Fault Zone, including drill samples, surface samples, channel samples, grab samples
3
Little/Powerline Zone Target, Appleton Fault Zone
The Little/Powerline Zone was discovered by trenching in 1999 based on soil geochemistry and prospecting. The zone is defined by a 400m long soil anomaly with some of the highest soil values on the Queensway North area with up to 3,840ppb Au.
Channel sample results from 1999 include 18.6 g/t Au over 7.5m and 3.0 g/t Au over 7.0m. Mineralization occurs within and along the margins of several parallel vein sets with up to 15% sulfide mineralization (arsenopyrite and pyrite). A new trench was recently completed at Little/Powerline by New Found extending the surface exposure of the zone by 35m. The zone shows considerable width of mineralization with good continuity along the 70m of strike exposed by trenching to date. A strong EM conductor coincident with the veining extends for over 200m north of the surface exposure following the high gold in soil anomaly (see Figure 2).
The drilling now underway at the Little/Powerline Zone will initially test this target over 200m of strike length.
Figure 2: Planned drill holes at the Little/Powerline Zone
4
Planned Drilling on other Appleton Fault Zone Targets
Following the completion of six holes at Little/Powerline the drill will be moved to the Keats Zone to follow up on hole NFGC-19-01 drilled by New Found in late 2019. NFGC-19-01 intersected 19.0 m of 92.9 g/t gold starting at 96 m down hole (this intercept has an estimated true width of 70%). Drill targets and plans are now also developed for the 1744, Pocket Pond, Logan/Lochlan, Zone 36, Lotto, Road, and Cokes Zones (see Figure 1 above). Drilling will proceed sequentially on these targets as additional drills are added.
Appleton Fault Zone Trenching Program
Starting in early July 2020 the Company began with the excavation of surface targets along the Appleton Fault Zone. To date eleven trenches have been opened-up with overburden cleared to allow geological mapping and sampling. Several new zones or extensions of mineralization have now been exposed: Zone 36, Regular Trench, Hornet, Little, and Road.
In late July, the Company exposed a new vein with over 120m strike length, named Zone 36. It comprises a north-west trending set of two parallel veins west of the Appleton Fault primary EM contact. Chalcopyrite, arsenopyrite, pyrite, boulangerite and visible gold have been found along the veins, with some areas exhibiting mineralization and textures consistent with epizonal style mineralization.
5
Trench 36, exhibits mineralization and textures consistent with epizonal deposition
Covid-19 Protocols
The Company has strict Covid-19 protocols including a 14-day mandatory isolation on arriving on the island. A significant portion of New Found’s operating personnel are from Gander. New Found is renting two houses in Gander for staff who are not locally based. The Company is focused on hiring locally and does not allow fly in, fly out arrangements for outside personnel.
QA/QC
True widths of the new exploration intercepts reported in this press release have yet to be determined but are estimated to typically be 70%-80% of reported core lengths; all channel sample true widths are estimated to be close to the reported widths. Assays are uncut, and calculated intervals are reported over a minimum length of 2 metres using a lower cutoff of 3.0 g/t Au. All HQ core assays reported were obtained by either whole sample rock metallic screen/fire assay or standard 30-gram fire-assaying with ICP finish at ALS Minerals in Vancouver, British Columbia. The whole sample metallic screen assay method is selected by the geologist when samples contain coarse gold or any samples displaying gold initial fire assay values greater than 1.0 g/t Au. Drill program design, Quality Assurance/Quality Control and interpretation of results is performed by qualified persons employing a Quality Assurance/Quality Control program consistent with NI 43-101 and industry best practices. Standards and blanks are included with every 20 samples for Quality Assurance/Quality Control purposes by the Corporation as well as the lab. Approximately 5% of sample pulps are sent to secondary laboratories for check assays.
6
Qualified Person
The technical content disclosed in this press release was reviewed and approved by Greg Matheson, P.Geo., Chief Operating Officer and a Qualified Person as defined under National Instrument NI 43-101.
About New Found Gold Corp
New Found holds a 100% interest in the Queensway Project, located 15 km west of Gander, Newfoundland. The project is intersected by the Trans-Canada Highway, is located just 18 km from Gander international airport, has logging roads crosscutting the project, has high voltage electric power lines running through the project area, and easy access to a highly skilled workforce. With working capital of approximately C$75 million the Company is well financed for aggressive exploration with an initial planned drill program of 100,000 meters. New Found has a proven capital markets and mining team with major shareholders include Palisades Goldcorp (33%), Eric Sprott (18%), Novo Resources (11%), Rob McEwen (7%), other institutional ownership (8%), and management, directors and insiders (4%). Approximately 65% of the Company’s issued and outstanding shares are subject to escrow or 180-day lock up agreements. Please see the Company’s website at www.newfoundgold.ca and the Company’s SEDAR profile at www.sedar.com.
Acknowledgments
New Found acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, Government of Newfoundland and Labrador.
Contact
To contact the Company please visit the Company’s website at www.newfoundgold.ca and make your request through our investor inquiry form. Our management has a pledge to be in touch with any investor inquiries within 24 hours.
New Found Gold Corp.
Per: “Craig Roberts”
Craig Roberts, P.Eng., Chief Executive Officer
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
7
Forward-Looking Statement Cautions:
This press release contains certain “forward-looking statements” within the meaning of Canadian securities legislation, relating to further the exploration and drilling on the Company’s Queensway gold project in Newfoundland. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are statements that are not historical facts; they are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “aims,” “potential,” “goal,” “objective,” “prospective,” and similar expressions, or that events or conditions “will,” “would,” “may,” “can,” “could” or “should” occur, or are those statements, which, by their nature, refer to future events. The Company cautions that Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except to the extent required by applicable securities laws and the policies of the TSX Venture Exchange, the Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause future results to differ materially from those anticipated in these forward-looking statements include risks associated possible accidents and other risks associated with mineral exploration operations, the risk that the Company will encounter unanticipated geological factors, the possibility that the Company may not be able to secure permitting and other governmental clearances necessary to carry out the Company’s exploration plans, the risk that the Company will not be able to raise sufficient funds to carry out its business plans, and the risk of political uncertainties and regulatory or legal changes that might interfere with the Company’s business and prospects. The reader is urged to refer to the Company’s reports, publicly available through the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com for a more complete discussion of such risk factors and their potential effects.
8
Exhibit 99.50
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1: | Name and Address of Company |
New Found Gold Corp. (“NFG” or the “Company”)
Suite 1430, 800 West Pender Street
Vancouver, British Columbia
Canada V6C 2V6
Item 2: | Date of Material Change |
July 31, 2020
Item 3: | News Release |
News release was disseminated on July 31, 2020 through GlobeNewswire and copies were subsequently filed on SEDAR.
Item 4: | Summary of Material Change |
On July 31, 2020, the Company announced that it has obtained a receipt for its final prospectus filed with the securities regulatory authorities in the provinces of British Columbia, Alberta and Ontario, in connection with the initial public offering (the “Offering”) of a minimum of 11,538,462 common shares and a maximum of 21,000,000 common shares in the capital of NFG at a price of $1.30 per share (the “Offering Price”) for minimum gross proceeds of $15,000,000 and maximum gross proceeds of $27,300,000 to the Company
Item 5: | Full Description of Material Change |
On July 31, 2020, the Company announced that it has obtained a receipt for its final prospectus filed with the securities regulatory authorities in the provinces of British Columbia, Alberta and Ontario, in connection with the Offering of a minimum of 11,538,462 common shares and a maximum of 21,000,000 common shares in the capital of NFG at the Offering Price for minimum gross proceeds of $15,000,000 and maximum gross proceeds of $27,300,000 to the Company A copy of the final prospectus in respect of the Offering is available on SEDAR at www.sedar.com.
Canaccord Genuity Corp. and BMO Capital Markets are acting as co-lead agents for the Offering with respect to a syndicate that includes Desjardins Securities Inc.
NFG has granted the agents an over-allotment option (the “Over-Allotment Option”), exercisable in whole or in part, at the sole discretion of the agents, at any time and from time to time, for a period of 30 days following the closing of the Offering, to purchase up to an additional 15% of the common shares issued pursuant to the Offering from NFG at the Offering Price.
1
The closing of the Offering is expected to occur on or about August 11, 2020 (the “Closing Date”) and is subject to customary closing conditions, including the receipt of all necessary regulatory approvals. NFG has received conditional listing approval of the TSX Venture Exchange (the “TSXV”) for the listing of its common shares being issued and sold pursuant to the Offering. Listing remains subject to NFG fulfilling customary TSXV requirements. The common shares are expected to commence trading on the TSXV under the symbol “NFG” on the Closing Date.
No securities regulatory authority has either approved or disapproved of the contents of this news release. The common shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws. Accordingly, the common shares may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Item 6: | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
Item 7: | Omitted Information |
Not applicable.
Item 8: | Executive Officer |
For further information, please contact Craig Roberts, Chief Executive Officer & Director at 604.562.9664 or croberts@newfoundgold.ca
Item 9: | Date of Report |
August 10, 2020
2
Exhibit 99.51
New Found Gold Corp.
|
To: |
Deloitte LLP, Chartered Professional Accountants
Crowe MacKay LLP, Chartered Professional Accountants |
|
Re: |
New Found Gold Corp. (the “Company”)
Notice of Change of Auditor (the “Notice”) |
In compliance with Section 4.11 of National Instrument 51-102 – Continuous Disclosure Obligations (“NI 51-102”), please be advised as follows:
1. | The Company has decided to change its auditor from Deloitte LLP, Chartered Professional Accountants, of Suite 1500, 885 West Georgia Street, Vancouver, British Columbia, V6C 3E8, to Crowe MacKay LLP, Chartered Professional Accountants, of Suite 1100, 1177 West Hastings Street, Vancouver, British Columbia, V6E 4T5. |
2. | The date of said change of auditor is October 28, 2020. |
3. | Deloitte LLP, Chartered Professional Accountants, has resigned at the request of the Company. |
4. | The resignation of Deloitte LLP, Chartered Professional Accountants, and the appointment of Crowe MacKay LLP, Chartered Professional Accountants, have been approved by the Company’s Board of Directors. |
5. | None of the reports of Deloitte LLP, Chartered Professional Accountants, on any of the Company’s financial statements relating to the “relevant period” (as such term is defined in section 4.11(1) of NI 51-102) expressed a modified opinion. |
6. | There has not been a “reportable event” (as such term is defined in section 4.11(1) of NI 51-102), which occurred in connection with the audit of the financial years ended December 31, 2019, and December 31, 2018, or for any period subsequent thereto. |
Please review this Notice and prepare a letter identifying whether you agree, disagree and the reasons why, or have no basis to agree or disagree with each statement contained in this Notice, addressing your response to the relevant securities regulatory authorities (list of addresses attached hereto). Please deliver the response to the Company within seven (7) days from the date of this Notice.
This Notice and your reply will be part of the reporting package that will be filed with the applicable regulator or relevant securities administrators.
Dated this 28th day of October, 2020.
NEW FOUND GOLD CORP. | |
/s/ Michael Kanevsky | |
Michael Kanevsky | |
Chief Financial Officer |
New Found Gold Corp.
|
List of Addresses
Alberta Securities Commission
Suite 600, 250 – 5th Street SW
Calgary, Alberta, T2P 0R4
British Columbia Securities Commission
P.O. Box 10142, Pacific Centre
701 West Georgia Street
Vancouver, British Columbia, V7Y 1L2
Ontario Securities Commission
20 Queen Street West, 22nd Floor
Toronto, Ontario, M5H 3S8
Exhibit 99.52
New Found Gold Corp.
Suite 1430, 800 West Pender Street Vancouver, BC, V6C 2V6
|
To: | DNTW Toronto LLP, Chartered Professional Accountants |
Deloitte LLP, Chartered Professional Accountants | |
Re: | New Found Gold Corp. (the “Company”) |
Notice of Change of Auditor (the “Notice”) |
In compliance with Section 4.11 of National Instrument 51-102 – Continuous Disclosure Obligations (“NI 51-102”), please be advised as follows:
1. | The Company has decided to change its auditor from DNTW Toronto LLP, Chartered Professional Accountants, of Suite 703, 45 Sheppard Avenue East, Toronto, Ontario, M2N 5W9, to Deloitte LLP, Chartered Professional Accountants, of Suite 1500, 885 West Georgia Street, Vancouver, British Columbia, V6C 3E8. |
2. | The date of said change of auditor is October 9, 2020. |
3. | DNTW Toronto LLP, Chartered Professional Accountants, has resigned at the request of the Company. |
4. | The resignation of DNTW Toronto LLP, Chartered Professional Accountants, and the appointment of Deloitte LLP, Chartered Professional Accountants, have been approved by the Company’s Board of Directors. |
5. | None of the reports of DNTW Toronto LLP, Chartered Professional Accountants, on any of the Company’s financial statements relating to the “relevant period” (as such term is defined in section 4.11(1) of NI 51-102) expressed a modified opinion. |
6. | There has not been a “reportable event” (as such term is defined in section 4.11(1) of NI 51-102), which occurred in connection with the audit of the financial years ended December 31, 2019, and December 31, 2018, or for any period subsequent thereto. |
Please review this Notice and prepare a letter identifying whether you agree, disagree and the reasons why, or have no basis to agree or disagree with each statement contained in this Notice, addressing your response to the relevant securities regulatory authorities (list of addresses attached hereto). Please deliver the response to the Company within seven (7) days from the date of this Notice.
This Notice and your reply will be part of the reporting package that will be filed with the applicable regulator or relevant securities administrators.
Dated this 9th day of October, 2020.
NEW FOUND GOLD CORP.
/s/ Michael Kanevsky |
Michael Kanevsky
Chief Financial Officer
New Found Gold Corp.
Suite 1430, 800 West Pender Street Vancouver, BC, V6C 2V6
|
List of Addresses
Alberta Securities Commission
Suite 600, 250 – 5th Street SW
Calgary, Alberta, T2P 0R4
British Columbia Securities Commission
P.O. Box 10142, Pacific Centre
701 West Georgia Street
Vancouver, British Columbia, V7Y 1L2
Ontario Securities Commission
20 Queen Street West, 22nd Floor
Toronto, Ontario, M5H 3S8
Exhibit 99.53
July 19, 2021 |
510 Burrard St, 3rd Floor Vancouver BC, V6C 3B9 www.computershare.com |
To: All Canadian Securities Regulatory Authorities
Subject: NEW FOUND GOLD CORP.
Dear Sir/Madam:
We advise of the following with respect to the upcoming Meeting of Security Holders for the subject Issuer:
Meeting Type : | Annual General and Special Meeting | ||
Record Date for Notice of Meeting : | August 13, 2021 | ||
Record Date for Voting (if applicable) : | August 13, 2021 | ||
Beneficial Ownership Determination Date : | August 13, 2021 | ||
Meeting Date : | September 17, 2021 | ||
Meeting Location (if available) : | Vancouver, BC | ||
Issuer sending proxy related materials directly to NOBO: | Yes | ||
Issuer paying for delivery to OBO: | No | ||
Notice and Access (NAA) Requirements: | |||
NAA for Beneficial Holders | No | ||
NAA for Registered Holders | No | ||
Voting Security Details: | |||
Description | CUSIP Number | ISIN | |
COMMON CLASS | 64440N103 | CA64440N1033 |
Sincerely,
Computershare
Agent for NEW FOUND GOLD CORP.
Exhibit 99.54
(the “Company”)
STATEMENT OF EXECUTIVE COMPENSATION
For the fiscal year ended December 31, 2020
Dated June 29, 2021
GENERAL
The following information of the Company is provided in accordance with Form 51-102F6V – Statement of Executive Compensation – Venture Issuers (“Form 51-102F6V”).
Information contained in this Statement of Executive Compensation is as of December 31, 2020, unless otherwise indicated and all dollar amounts referenced herein are in Canadian Dollars, unless otherwise specified.
Director and Named Executive Officer Compensation
The named executive officers (NEOs) and directors of the Company for the financial year ended December 31, 2020, were Collin Kettell, Executive Chairman; Craig A. Roberts, Chief Executive Officer; Denis Laviolette, President; Michael Kanevsky, Chief Financial Officer; Greg Matheson, Chief Operating Officer; John Anderson, Director; and Quinton Hennigh, Director.
Particulars of compensation, excluding options and compensation securities, paid to each NEO and director in the two most recently completed financial years is set out in the table below:
TABLE OF COMPENSATION EXCLUDING COMPENSATION SECURITIES
Salary, | ||||||||||||||||||||||
consulting | ||||||||||||||||||||||
fee, retainer | Committee | |||||||||||||||||||||
or | or meeting | Value of | Total | |||||||||||||||||||
commission | Bonus | fees | perquisites | compensation | ||||||||||||||||||
Name and position | Year | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||
Collin Kettell(1) | 2020 | 269,070 | 75,000 | Nil | Nil | 344,070 | ||||||||||||||||
Executive Chairman and Director | 2019 | 9,967 | 152,432 | N/A | N/A | 162,399 | ||||||||||||||||
Craig A. Roberts(2) | 2020 | 250,000 | 325,000 | Nil | Nil | 575,000 | ||||||||||||||||
CEO and Director | 2019 | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||
Denis Laviolette(3) | 2020 | 195,000 | 75,000 | Nil | Nil | 270,000 | ||||||||||||||||
President and Director | 2019 | 290,000 | N/A | N/A | N/A | 290,000 | ||||||||||||||||
Michael Kanevsky(4) | 2020 | 72,900 | Nil | Nil | Nil | 72,900 | ||||||||||||||||
CFO | 2019 | 94,500 | N/A | N/A | N/A | 94,500 | ||||||||||||||||
Greg Matheson(5) | 2020 | 157,083 | 33,000 | Nil | Nil | 190,083 | ||||||||||||||||
COO | 2019 | 130,000 | N/A | N/A | N/A | 130,000 | ||||||||||||||||
John Anderson(6) | 2020 | 10,000 | Nil | Nil | Nil | 10,000 | ||||||||||||||||
Director | 2019 | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||
Quinton Hennigh(7) | 2020 | 10,000 | Nil | Nil | Nil | 10,000 | ||||||||||||||||
Director | 2019 | N/A | N/A | N/A | N/A | N/A |
(1) | Collin Kettell was appointed as Director and Executive Chairman on January 21, 2016. |
(2) | Craig A. Roberts was appointed as Director on December 17, 2019 and was appointed CEO on March 6, 2020. |
(3) | Denis Laviolette was appointed as Director and President on January 21, 2016. |
1
(4) | Michael Kanevsky was appointed as CFO on February 1, 2019. |
(5) | Greg Matheson was appointed as COO on April 1, 2019. |
(6) | John Anderson was appointed as Director on April 20, 2018 and ceased to be a Director on May 10, 2021. |
(7) | Quinton Hennigh was appointed as Director on June 23, 2020. |
For 2020, annual compensation for Directors who are not NEOs was a $24,000 cash retainer.
Stock Options and Other Compensation Securities
Compensation securities granted or issued to each NEO and director in 2020 for services provided or to be provided, directly or indirectly, to the Company or any of its subsidiaries is set out in the table below:
COMPENSATION SECURITIES
Number of | Closing | |||||||||||||||||||||||
compensation | price of | Closing | ||||||||||||||||||||||
securities, | security or | price of | ||||||||||||||||||||||
number of | underlying | security or | ||||||||||||||||||||||
underlying | security on | underlying | ||||||||||||||||||||||
Type of | securities, and | Date of | Exercise | date of | security at | |||||||||||||||||||
Name and | compensation | percentage of | issue or | price | grant | year end | Expiry | |||||||||||||||||
Position | security(1) | class | grant | ($) | ($)(2) | ($) | date | |||||||||||||||||
Stock option | 100,000 (0.71%) | 2020-04-15 | 1.00 | N/A | 4.07 | 2025-04-15 | ||||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
100,000, 0.07%) | ||||||||||||||||||||||||
Stock option | 1,395,000 (9.84) | 2020-05-23 | 1.075 | N/A | 4.07 | 2025-05-23 | ||||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
Collin Kettell | Stock option | 1,395,000, 0.94%) | 2020-08-11 | 1.40 | 1.40 | 4.07 | 2025-08-11 | |||||||||||||||||
Executive Chairman | 1,735,000 | |||||||||||||||||||||||
and Director | (12.23%) | |||||||||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
1,735,000, 1.17%) | ||||||||||||||||||||||||
Stock option | 4,280,000 | 2020-12-31 | 4.10 | 4.07 | 4.07 | 2025-12-31 | ||||||||||||||||||
(30.18%) | ||||||||||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
4,280,000, 2.88%) | ||||||||||||||||||||||||
Stock option | 1,800,000 | 2020-04-15 | 1.00 | N/A | 4.07 | 2025-04-15 | ||||||||||||||||||
(12.69%) | ||||||||||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
1,800,000, 1.21%) | ||||||||||||||||||||||||
Stock option | 125,000 (0.88%) | 2020-05-23 | 1.075 | N/A | 4.07 | 2025-05-23 | ||||||||||||||||||
(underlying | ||||||||||||||||||||||||
Craig A. Roberts | common shares: | |||||||||||||||||||||||
CEO and Director | 125,000, 0.08%) | |||||||||||||||||||||||
Stock option | 1,250,000 | 2020-08-11 | 1.40 | 1.40 | 4.07 | 2025-08-11 | ||||||||||||||||||
(8.81%) | ||||||||||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
1,250,000, 0.84%) | ||||||||||||||||||||||||
Stock option | 700,000 (4.94%) | 2020-12-31 | 4.10 | 4.07 | 4.07 | 2025-12-31 | ||||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
700,000, 0.47%) |
2
COMPENSATION SECURITIES
Number of | Closing | |||||||||||||||||||||||
compensation | price of | Closing | ||||||||||||||||||||||
securities, | security or | price of | ||||||||||||||||||||||
number of | underlying | security or | ||||||||||||||||||||||
underlying | security on | underlying | ||||||||||||||||||||||
Type of | securities, and | Date of | Exercise | date of | security at | |||||||||||||||||||
Name and | compensation | percentage of | issue or | price | grant | year end | Expiry | |||||||||||||||||
Position | security(1) | class | grant | ($) | ($)(2) | ($) | date | |||||||||||||||||
Stock option | 100,000 (0.71%) | 2020-04-15 | 1.00 | N/A | 4.07 | 2025-04-15 | ||||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
100,000, 0.07%) | ||||||||||||||||||||||||
Stock option | 50,000 (0.35%) | 2020-05-23 | 1.075 | N/A | 4.07 | 2025-05-23 | ||||||||||||||||||
(underlying | ||||||||||||||||||||||||
Denis Laviolette | common shares: | |||||||||||||||||||||||
President and | 50,000, 0.03%) | |||||||||||||||||||||||
Director | 1,000,000 | 2020-08-11 | 1.40 | 1.40 | 4.07 | 2025-08-11 | ||||||||||||||||||
Stock option | (7.05%) | |||||||||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
1,000,000, 0.67%) | ||||||||||||||||||||||||
Stock option | 50,000 (0.35%) | 2020-12-31 | 4.10 | 4.07 | 4.07 | 2025-12-31 | ||||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
50,000, 0.03%) | ||||||||||||||||||||||||
Greg Matheson | Stock option | 25,000 (0.18%) | 2020-05-23 | 1.075 | N/A | 4.07 | 2025-05-23 | |||||||||||||||||
COO | (underlying | |||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
25,000, 0.02%) | ||||||||||||||||||||||||
Stock option | 125,000 (0.88%) | 2020-08-11 | 1.40 | 1.40 | 4.07 | 2025-08-11 | ||||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
125,000, 0.08%) | ||||||||||||||||||||||||
Stock option | 50,000 (0.35%) | 2020-12-31 | 4.10 | 4.07 | 4.07 | 2025-12-31 | ||||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
50,000, 0.03%) | ||||||||||||||||||||||||
Stock option | 50,000 (0.35%) | 2020-04-15 | 1.00 | N/A | 4.07 | 2025-04-15 | ||||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
50,000, 0.03%) | ||||||||||||||||||||||||
Stock option | 25,000 (0.18%) | 2020-05-23 | 1.075 | N/A | 4.07 | 2025-05-23 | ||||||||||||||||||
(underlying | ||||||||||||||||||||||||
John Anderson(3) | common shares: | |||||||||||||||||||||||
Director | 25,000, 0.02%) | |||||||||||||||||||||||
Stock option | 50,000 (0.35%) | 2020-08-11 | 1.40 | 1.40 | 4.07 | 2025-08-11 | ||||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
50,000, 0.03%) | ||||||||||||||||||||||||
Stock option | 50,000 (0.35%) | 2020-12-31 | 4.10 | 4.07 | 4.07 | 2025-12-31 | ||||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
50,000, 0.03%) |
3
COMPENSATION SECURITIES
Number of | Closing | |||||||||||||||||||||||
compensation | price of | Closing | ||||||||||||||||||||||
securities, | security or | price of | ||||||||||||||||||||||
number of | underlying | security or | ||||||||||||||||||||||
underlying | security on | underlying | ||||||||||||||||||||||
Type of | securities, and | Date of | Exercise | date of | security at | |||||||||||||||||||
Name and | compensation | percentage of | issue or | price | grant | year end | Expiry | |||||||||||||||||
Position | security(1) | class | grant | ($) | ($)(2) | ($) | date | |||||||||||||||||
Stock option | 200,000 (1.41%) | 2020-08-11 | 1.40 | 1.40 | 4.07 | 2025-08-11 | ||||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
Quinton Hennigh, | 200,000, 0.13%) | |||||||||||||||||||||||
Director | Stock option | 150,000 (1.06%) | 2020-12-31 | 4.10 | 4.07 | 4.07 | 2025-12-31 | |||||||||||||||||
(underlying | ||||||||||||||||||||||||
common shares: | ||||||||||||||||||||||||
150,000, 0.10%) |
(1) | Stock options vest 100% upon date of grant. |
(2) | The Company began trading on the TSX Venture Exchange on August 11, 2020. |
(3) | John Anderson ceased to be a director on May 10, 2021. |
Compensation securities exercised by NEOs and directors in 2020 are set out in the table below:
EXERCISE OF COMPENSATION SECURITIES BY DIRECTORS AND NEOs
Difference | ||||||||||||||||||||||||||
between | ||||||||||||||||||||||||||
Closing | price and | |||||||||||||||||||||||||
Exercise | price per | closing | ||||||||||||||||||||||||
Number of | price | security | price on | Total | ||||||||||||||||||||||
Type of | underlying | per | on date of | date of | value on | |||||||||||||||||||||
Name and | compensation | securities | security | Date of | exercise | exercise | exercise | |||||||||||||||||||
Position | security | exercised | ($) | exercise | ($)(1) | ($)(1) | date ($) | |||||||||||||||||||
Stock option | 200,000 | 0.50 | 2020-04-29 | N/A | N/A | N/A | ||||||||||||||||||||
Collin Kettell, | Stock option | 1,050,000 | 0.50 | 2020-12-31 | 4.07 | 3.57 | 3,748,500 | |||||||||||||||||||
Executive Chairman | Stock option | 100,000 | 1.00 | 2020-12-31 | 4.07 | 3.07 | 307,000 | |||||||||||||||||||
Stock option | 1,395,000 | 1.075 | 2020-12-31 | 4.07 | 2.995 | 4,178,025 | ||||||||||||||||||||
Stock option | 1,735,000 | 1.40 | 2020-12-31 | 4.07 | 2.67 | 4,632,450 | ||||||||||||||||||||
Craig A. Roberts | Stock option | 800,000 | 0.50 | 2020-04-13 | N/A | N/A | N/A | |||||||||||||||||||
CEO and Director | Stock option | 700,000 | 1.00 | 2020-12-23 | 4.28 | 3.28 | 2,296,000 |
(1) | The Company began trading on the TSX Venture Exchange on August 11, 2020. |
Stock Option Plans and Other Incentive Plans
On June 17, 2020, the Company shareholders approved the Stock Option Plan. The purpose of the Stock Option Plan is to provide the Company with a share-related mechanism to attract, retain and motivate qualified directors, officers, employees, and consultants, to reward those individuals from time to time for their contributions toward the long term goals of the Company and to enable and encourage those individuals to acquire common shares as long term investments. The Company is required to obtain shareholder approval of the Stock Option Plan on a yearly basis in accordance with the policies of the TSXV. The general terms and conditions of the Stock Option Plan are reflected in the disclosure below.
4
Administration | The Stock Option Plan is administered by the Board, or such director or other senior officer or employee of the Company as may be designated as administrator by the Board. The Board or such committee may make, amend and repeal at any time, and from time to time, such regulations not inconsistent with the Stock Option Plan. | |
Number of Shares | The maximum number of common shares issuable under the Stock Option Plan shall not exceed 10% of the number of common shares issued and outstanding as of each the date on which the Board grants the option (the “Award Date”). The number of common shares underlying Options that have been cancelled, that have expired without being exercised in full, and that have been issued upon exercise of options shall not reduce the number of common shares issuable under the Stock Option Plan and shall again be available for issuance thereunder. | |
Securities | Each option entitles the holder thereof (an “Option Holder”) to purchase one common share at an exercise price determined by the Board. | |
Participation | Any director, senior officer, management company, employee or consultant of the Company (including any subsidiary of the Company), as the Board may determine. | |
Exercise Price | The exercise price of an option will be determined by the Board in its sole discretion, provided that the exercise price will not be less than the Discounted Market Price (as defined in the policies of the TSXV) (or, if the common shares are not listed for trading on the TSXV, then the permittable discounted market price on such exchange or quotation system on which the common shares are then listed or quoted for trading) or such other price as may be required or permitted by the TSXV from time to time. | |
Exercise Period | The exercise period of an option will be the period from and including the Award Date through to and including the expiry date that will be determined by the Board at the time of grant (the “Expiry Date”), provided that the Expiry Date of an Option will be no later than the tenth anniversary of the Award Date of the Option, provided that such date does not fall within a Blackout Period (as defined in the Stock Option Plan). | |
Cessation of Employment | Subject to certain limitations, in the event that an Option Holder ceases employment with the Company, other than by reason of death, the Expiry Date of the option will be 90 days after the date which the Option Holder ceases employment (the “Termination Date”), unless the Option Holder is terminated for cause, in which case the Expiry Date will be the Termination Date. | |
In the event that an Option Holder should die while he or she is still director, senior officer, management company, employee or consultant of the Company, the Expiry Date will be 12 months from the date of death of the Option Holder. |
5
Subject to certain limitations, any unvested option which vests on or after the Termination Date (or date of death, if applicable) but prior to the Expiry Date, will be exercisable by the Option Holder until the Expiry Date. Any unvested Option held by an Option Holder who ceases employment as a result of termination for cause, will not vest and will terminate as of the Termination Date. | ||
In the event that the Option Holder holds his or her Option as an employee or consultant retained by the Company to provide Investor Relations Activities (as defined in the TSXV’s Corporate Finance Manual), and ceases to be an employee or consultant of the Company other than by reason of death, the Expiry Date will be the date such Option Holder ceases to be an employee or consultant of the Company. | ||
Acceleration Events | If the Company seeks shareholder approval for a transaction which would constitute an Acceleration Event (as defined in the Stock Option Plan) or third party makes a bona fide formal offer to the Company or its shareholders which would constitute an Acceleration Event, the Board may (i) permit the Option Holders to exercise their options, as to all or any of such options that have not previously been exercised (regardless of any vesting restrictions), but in no event later than the Expiry Date of the option, so that the Option Holders may participate in such transaction; and (ii) require the acceleration of the time for the exercise of the Options and of the time for the fulfilment of any conditions or restrictions on such exercise. | |
Notwithstanding any other provision of the Stock Option Plan or the terms of any option, if at any time when options remains unexercised and the Company completes any transaction which constitutes an Acceleration Event, all outstanding unvested options will automatically vest. | ||
Any proposed acceleration of vesting provisions is subject to the policies and necessary approvals of the TSXV, if applicable. | ||
Limitations | The maximum number of common shares which may be issuable, at any time, to Insiders (as defined in the Stock Option Plan) under the Stock Option Plan, together with any other share-based compensation arrangements of the Company, will be 10% of the total number of common shares issued and outstanding. The maximum number of common shares which may be issued, within any one-year period, to Insiders under the Stock Option Plan, together with any other share-based compensation arrangements of the Company, will be 10% of the total number of common shares issued and outstanding. The total number of options awarded to any one individual in any twelve-month period will not exceed 5% of the issued and outstanding common shares of the Company at the Award Date unless the Company has obtained disinterested shareholder approval as required by the TSXV. | |
The total number of options awarded to any one consultant of the Company in any twelve-month period will not exceed 2% of the issued and outstanding common shares of the Company at the Award Date unless consent is obtained from the TSXV. |
6
The total number of options awarded to all persons retained by the Company to provide Investor Relations Activities will not exceed 2% of the issued and outstanding common shares of the company, in any twelvemonth period, calculated at the Award Date unless consent is obtained from the TSXV. Options granted to persons retained to provide Investor Relations Activities will vest in stages over not less than twelve months with no more than one quarter of the options vesting in any three-month period. | ||
Amendments | Subject to certain exceptions and any applicable regulatory approval, the Board may amend the Stock Option Plan and the terms and conditions of any option previously awarded or thereafter to be awarded for the purpose of complying with any changes in any relevant law, TSXV policy, rule or regulation applicable to the Stock Option Plan, any option or the common shares, or for any other purpose which the Board may deem desirable or necessary and may be permitted by all relevant laws, rules and regulations, provided that any such amendment will not materially impair any right of any Option Holder pursuant to any Option awarded prior to such amendment. | |
The Board may only amend the provisions of the Stock Option Plan relating to the following if the Board obtains the approval of the shareholders of the Company: (i) persons eligible to be granted options under the Stock Option Plan; (ii) the maximum number or percentage of common shares reserved for issuance upon exercise of options available under the Stock Option Plan; (iii) the limitations on grants of options to any one person, Insiders, consultants, or persons involved in Investor Relations Activities; (iv) the method for determining the exercise price for Options; (v) the maximum term of Options; (vi) the expiry and termination provisions applicable to Options; or (vii) amendments to the amendment provisions of the Stock Option Plan. | ||
Disinterested shareholders of the Company must approve any amendment to options held by an Insider at the time of the amendment that would have the effect of decreasing the exercise price of such Options. | ||
Termination | The Board may terminate the Stock Option Plan any time provided that such termination shall not alter the terms or conditions of any option or impair any right of any Option Holder pursuant to any option awarded prior to the date of such termination and notwithstanding such termination, the Company, such options and such Option Holders shall continue to be governed by the provisions of the Stock Option Plan. |
External Management Companies
Other than as disclosed below under “Employment, Consulting and Management Agreements”, the Company has not entered into any agreement with any external management company that employs or retains one or more of the NEOs or Directors and, other than as disclosed below, the Company has not entered into any understanding, arrangement or agreement with any external management company to provide executive management services to the Company, directly or indirectly, in respect of which any compensation was paid by the Company.
7
Employment, Consulting and Management Agreements
As of the date of this Registration Statement, other than as described below, we do not have any contract, agreement, plan or arrangement that provides for payments to the Named Executive Officers at, following, or in connection with any termination (whether voluntary, involuntary or constructive), resignation, retirement, a change in control of the Company or a change in a director or Named Executive Officer's responsibilities.
For the purposes of this section “Change of Control” means change in control of the Company, which includes the acquisition by a person of 50% or more of the voting securities of the Company, the removal of 50% or more of the incumbent members of the Board, or a transaction the result of which is that the current voting shareholders of the Company own less than 50% of the voting shares of the resulting or successor corporation, or the sale of all or substantially all of the Company’s assets.
Argentum Management Services Agreement
Collin Kettell, Executive Chairman and Director, provides management services to the Company through Argentum Capital Corp. (“Argentum”). The Company entered into a management services agreement with Argentum dated March 1, 2020, with respect to the provision of certain management and administrative consulting services provided by Argentum to the Company (the “Argentum Agreement”). Pursuant to the terms and conditions of the Argentum Agreement, Argentum provides certain management consulting services to the Company and its subsidiaries as may be requested by and at the direction of the Board from time to time, including: (i) guidance, advice and services with respect to strategic planning, future growth, projects and business activities; (ii) guidance and advice in relation to the day to day operation and business of the Company; (iii) guidance and advice concerning proposed acquisitions, divestitures, joint ventures and business combinations, (iv) guidance and advice concerning any mineral properties owned by the Company or interests in mineral properties acquired by the Company and other mutually agreed services. Argentum is paid a base fee rate of $25,000 per month (the “Argentum Base Fee”), subject to annual review by the Board. Argentum is also eligible for an incentive fee and the grant of Options pursuant to the Stock Option agreement as determined by the Board at its discretion.
Under the terms of the Argentum Agreement, at any time within 60 days following a Change of Control, Argentum or the Company may elect to terminate the Argentum Agreement. Upon such termination, the Company is obliged to compensate Argentum (i) a termination fee equal to 24 months of the Argentum Base Fee, (ii) an amount equal to any incentive fee paid to Argentum within the 24 months preceding termination in connection with a Change of Control and (iii) any accrued liabilities owing to Argentum under the Argentum Agreement. The estimated incremental payments to Argentum that would result from a Change of Control occurring as at December 31, 2020 would be $600,000.
Flotsam Management Services Agreement
Craig Roberts, Chief Executive Officer, provides management services to the Company through Flotsam Cove Holdings Ltd. (“Flotsam”). The Company entered into a management services agreement with Flotsam dated March 1, 2020, with respect to the provision of certain management and administrative consulting services provided by Flotsam to the Company (the “Flotsam Agreement”). Pursuant to the terms and conditions of the Flotsam Agreement, Flotsam provides certain management consulting services to the Company and its subsidiaries as may be requested by and at the direction of the Board from time to time, including: (i) guidance, advice and services with respect to strategic planning, future growth, projects and business activities; (ii) guidance and advice in relation to the day to day operation and business of the Company; (iii) guidance and advice concerning proposed acquisitions, divestitures, joint ventures and business combinations, (iv) guidance and advice concerning any mineral properties owned by the Company or interests in mineral properties acquired by the Company and other mutually agreed services.
Flotsam is paid a base fee rate of $25,000 per month (the “Flotsam Base Fee”), subject to annual review by the Board. Pursuant to the Flotsam Agreement, Flotsam received a bonus of $250,000 on March 30, 2020 and then paid $400,000 to exercise 800,000 Options at an exercise price of $0.50 to purchase 800,000 common shares. On April 15, 2020, the Company then granted Mr. Roberts an additional 800,000 Options at an exercise price of $1.00 per share. Flotsam is also eligible for an incentive fee at the Board’s discretion. Under the terms of the Flotsam Agreement, upon closing of the Novo Transaction, Mr. Roberts was granted 1,000,000 additional Options on April 15, 2020 pursuant to the Stock Option Plan. In addition, under the Flotsam Agreement, it was agreed, as soon as at least 900,000 additional Options are available under the Stock Option Plan, to grant Mr. Roberts an additional 900,000 Options.
8
Under the terms of the Flotsam Agreement, at anytime within 60 days following a Change of Control of the Company, Flotsam or the Company may elect to terminate the Flotsam Agreement. Upon such termination, the Company is obliged to compensate Flotsam (i) a termination fee equal to 24 months of the Flotsam Base Fee, (ii) an amount equal to any incentive fee paid to Flotsam within the 24 months preceding termination in connection with a Change of Control and (iii) any accrued liabilities owing to Flotsam under the Flotsam Agreement. The estimated incremental payments to Flotsam that would result from a Change of Control occurring as at December 31, 2020 would be $600,000.
Bruno Management Services Agreement
Denis Laviolette, President and Director, provides his management services to the Company through Bruno Management Services Corporation (“ Bruno”). The Company entered into a management services agreement with Bruno dated March 1, 2020, with respect to the provision of certain management and administrative consulting services provided by Bruno to the Company (the “Bruno Agreement”). Pursuant to the terms and conditions of the Bruno Agreement, Bruno provides certain management consulting services to the Company and its subsidiaries as may be requested by and at the direction of the Board from time to time, including: (i) guidance, advice and services with respect to strategic planning, future growth, projects and business activities; (ii) guidance and advice in relation to the day to day operation and business of the Company; (iii) guidance and advice concerning proposed acquisitions, divestitures, joint ventures and business combinations, (iv) guidance and advice concerning any mineral properties owned by the Company or interests in mineral properties acquired by the Company, (v) guidance and advice in connection with the communications with our shareholders and responding to shareholder inquiries and other mutually agreed services.
Bruno is paid a base fee rate of $17,500 per month (the “Bruno Base Fee”), subject to annual review by the Board. Bruno is also eligible for an incentive fee and the grant of Options as determined by the Board at its discretion.
Under the terms of the Bruno Agreement, at any time within 60 days following a Change of Control, Bruno or the Company may elect to terminate the Bruno Agreement. Upon such termination, the Company is obliged to compensate Bruno (i) a termination fee equal to 24 months of the Bruno Base Fee, (ii) an amount equal to any incentive fee paid to Bruno within the 24 months preceding termination in connection with a Change of Control and (iii) any accrued liabilities owing to Bruno under the Bruno Agreement. The estimated incremental payments to Bruno that would result from a Change of Control occurring as at December 31, 2020 would be $420,000.
BM Strategic Management Services Agreement
Michael Kanevsky, Chief Financial Officer, provides his services to the Company through a third-party management services agreement with BM Strategic (the “BM Strategic Management Services Agreement”). Pursuant to the terms of the BM Strategic Management Services Agreement, BM Strategic provides all CFO services to the Company.
9
Separation Event Benefits
The following table presents the estimated total change of control and termination benefits of its 2020 NEOs, assuming the separation event occurred on December 31, 2020, including any amounts attributable to option benefits using the TSXV closing price of $4.10 as at December 31, 2020.
Separation Event | ||||||||||||||
Termination | Change of | |||||||||||||
Termination | without Cause | Control | ||||||||||||
NEO | Resignation | with Cause | $ | $ | ||||||||||
Collin Kettell
Executive Chairman and Director |
Nil | Nil | 450,000 | 600,000 | ||||||||||
Craig A. Roberts
CEO and Director |
Nil | Nil | 450,000 | 600,000 | ||||||||||
Denis Laviolette
President and Director |
Nil | Nil | 315,000 | 420,000 | ||||||||||
Michael Kanevsky
CFO |
Nil | Nil | Nil | Nil | ||||||||||
Greg Matheson
COO |
Nil | Nil | 292,500 | 390,000 |
Oversight and Description of Director and Named Executive Officer Compensation
During 2020 the following events occurred which impacted compensation for directors and NEOs:
· | The common shares of the company commenced trading on the TSX Venture Exchange under the symbol “NFG” on August 11, 2020. |
· | On March 11, 2020, the World Health Organization declared the global outbreak of a novel coronavirus identified as “COVID-19” a global pandemic. The Company continues to closely monitor developments in the pandemic, including the potential impact on the Company's operations. The impact of COVID-19 is uncertain and COVID-19 could have a significant impact on exploration and development projects. |
· | The Company formed an Audit Committee (the “Audit Committee”) on June 22, 2020, comprised of Douglas Hurst (Chair), Dr. Quinton Hennigh and Denis Laviolette, all of whom are “financially literate” as defined in National Instrument 52-110 – Audit Committees (“NI 52-110”). Mr. Hurst and Dr. Hennigh are considered “independent” and Mr. Laviolette, as President of the Company, is not considered “independent”, pursuant to NI 52-110. |
The Audit Committee provides assistance to the Board in fulfilling its obligations relating to the integrity of our internal financial controls and financial reporting. Our external auditors report directly to the Audit Committee. The Audit Committee’s primary duties and responsibilities include: (i) reviewing and reporting to the Board on the annual audited financial statements (including the auditor’s report thereon) and unaudited interim financial statements and any related management’s discussion and analysis, if any, and other financial disclosure related thereto that may be required to be reviewed by the Audit Committee pursuant to applicable legal and regulatory requirements; (ii) reviewing material changes in accounting policies and significant changes in accounting practices and their impact on the financial statements; (iii) overseeing the audit function, including engaging in required discussions with our external auditor and reviewing a summary of the annual audit plan at least annually, overseeing the independence of our external auditor, overseeing our internal auditor, and pre-approving any non-audit services to the Company; (iv) reviewing and discussing with management the appointment of key financial executives and recommending qualified candidates to the Board; (v) reviewing with management and our external auditors, at least annually, the integrity of the internal controls over financial reporting and disclosure; (vi) reviewing management reports related to legal or compliance matters that may have a material impact on us and the effectiveness of our compliance policies; and (vii) establishing whistleblowing procedures and investigating any complaints or concerns it deems necessary.
10
· | The Company formed a Compensation Committee on June 22, 2020, comprised of Collin Kettell (Chair), Douglas Hurst and Craig Roberts. Douglas Hurst is considered “independent” and Collin Kettell, as Executive Chairman, and Craig Roberts, as Chief Executive Officer, are not considered “independent”, pursuant to NI 52-110. |
Each member of the Compensation Committee has business and other experience which is relevant to their position as a member of the Compensation Committee. By virtue of their differing professional backgrounds, business experience, knowledge of the Company’s industry, knowledge of corporate governance practices and, where appropriate, service on compensation committees of other reporting issuers and experience interacting with external consultants and advisors, the members of the Compensation Committee are able to make decisions on the suitability of the Company’s compensation policies and practices.
The charter of the Compensation Committee provides that it is responsible for, among other things, the following matters:
· | reviewing and approving corporate goals and objectives relevant to the compensation of the CEO and other executive officers, evaluating the performance of the CEO and the other executive officers in light of those goals and objectives and approving their annual compensation levels, including salaries, bonuses, and stock option grants based on such evaluation; and |
· | reviewing the compensation of directors for service on the Board and its committees and recommending to the Board the annual Board member compensation package, including retainer, committee member and chair retainers, Board and committee meeting attendance fees and any other form of compensation, such as stock option grants or stock awards. |
While the Board is ultimately responsible for determining all forms of compensation to be awarded to the CEO, other executive officers and directors, the Compensation Committee will when appropriate review the Company’s compensation philosophy, policies, plans and guidelines and recommend any changes to the Board.
Base Salary:
The base salary for each executive is established by the Board, on the recommendation of the Compensation Committee, based upon the position held by such executive, competitive market conditions, such executive’s related responsibilities, experience and the NEO’s skill base, the functions performed by such executive and the salary ranges for similar positions in comparable companies. Individual and corporate performance will also be taken into account in determining base salary levels for executives.
The 2020 base salaries for each NEO at December 31, 2020 were as follows:
2020 Base Salary | ||||
Name and Principal Position | $ | |||
Collin Kettell, Executive Chairman | 300,000 | |||
Craig A. Roberts, Chief Executive Officer | 300,000 | |||
Denis Laviolette, President | 210,000 | |||
Michael Kanevsky, CFO | 72,900 | |||
Greg Matheson, COO | 195,000 |
11
Short-term Incentive Awards:
In determining to award performance bonuses, including the amounts thereof, the Board of Directors uses its discretion and takes into consideration the Company’s annual achievements, without assigning any quantifiable weight or factor in respect of any particular achievement or corporate milestone. Short-term incentive awards were granted to NEOs in 2020 based on the Compensation Committee’s assessment of the Company’s performance for the year and are disclosed in the “Table of Compensation Excluding Compensation Securities”, above.
Long-term Incentive Awards:
Long-term incentives for NEOs and directors take the form of stock options which are granted under the direction of the Compensation Committee in accordance with the Company’s shareholder approved stock option plan. The value of stock options granted to NEOs is determined on both qualitative and quantitative levels. Changes in executive positions or roles and ongoing contribution to the Company are factors which affect the decision-making process. Outstanding stock options and previous grants are reviewed by the Compensation Committee on an annual basis and again when considering new stock option grants. The terms of the stock option plan are also reviewed from time to time by the Compensation Committee and changes suggested are discussed with NEOs prior to approval by the Board, then regulatory and shareholder approval as necessary (see “Stock Option Plan and Other Incentive Plans” above).
While the Board considers amounts paid by other companies in similar industries at similar stages of development in determining compensation, no specifically selected peer group was identified in 2020.
Pension Disclosure
The Company does not have a deferred compensation plan or pension plan that provides for payments or benefits at, following, or in connection with retirement.
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