Deep Drilling Program Uncovers Significant Gold Zones at Queensway Project

New Found Gold Corp. (NFG:TSX.V;  NFGC:NYSE.American) has announced the initial results from its deep drilling program at the Queensway Project in Newfoundland. The results from 11 diamond drill holes indicate the discovery of nine new gold zones spanning a 3-kilometer strike length and extending the known vertical extent of gold mineralization to 820 meters. These findings confirm the presence of high-grade epizonal-style gold mineralization, with individual gold assay values reaching up to 57.1 grams per tonne gold (g/t Au). The company's deep drilling commenced in March 2024, focusing on targets derived from 3-D seismic interpretations, and has completed 14,940 meters of drilling across 15 holes.

The drilling revealed that the mineralization encountered at depth exhibits the same characteristics as the Appleton Fault Zone (AFZ) gold system at the surface, with broad quartz vein domains ranging in downhole length from six meters to 66 meters. Visible gold was identified in six of the nine newly discovered zones, and the consistent lithological and structural framework observed at depth will enhance the interpretation of 3-D seismic data. This continuity suggests a robust and extensive gold system, providing a strong basis for future exploration and development efforts at the Queensway Project.

Digging For Gold

The gold market has recently seen significant movements driven by various economic factors and expert insights.

According to David Gottle from DailyFX on July 11, "Gold prices are higher again on Thursday as the market hopes that the United States will see lower interest rates this year keeps demand solid and allows traders to dream again of record highs." He also noted that "the metal hit record highs above US$2,400/ounce back in May. The London Bullion Market Association price hit US$2,427.30 and hasn't retreated far since." The optimism around lower interest rates has been a key driver, as "gold famously yields nothing so tends to do better when rates fall, taking broader paper yields with them."

Technical Analyst Clive Maund wrote, "New Found Gold has made the biggest gold discovery of the past 20 years at its Queensway property in Newfoundland, and that surely must work to its advantage as gold embarks on its biggest ever bull market, and most importantly from our point of view, it will work to the great advantage of its shareholders."

Dean Popplewell, writing for Seeking Alpha on July 11, highlighted that "gold prices are supported by rate cut expectations and central bank buying." He observed positive trends in gold ETFs, stating, "Gold ETFs see positive flows, suggesting bullish momentum."

Popplewell also mentioned that central banks are expected to maintain robust gold purchases, with a World Gold Council survey indicating "29% of respondents planning to increase their gold reserves within the next 12 months — the highest percentage since the survey began in 2018."

He concluded that "these factors indicate that the current bull run in gold may have plenty of momentum left."

Further insights were provided by a write-up on FXEmpire on July 11, which reported that "gold prices climb as traders anticipate softer inflation data, potentially influencing Fed's interest rate decisions for the rest of the year." The article emphasized the short-term bullish outlook for gold, noting that "prices potentially breaking US$2,400 if CPI data comes in below expectations."

The influence of Federal Reserve Chair Jerome Powell's testimony was also acknowledged, as it "sparked renewed interest in gold." Market dynamics have shifted, with "the CME FedWatch tool showing markets now expect a 71% chance of a September rate cut, up from near-even odds a month ago." According to Zain Vawda, market analyst at MarketPulse by OANDA, "a softer-than-expected CPI could push gold above US$2,400."

New Found's Golden Catalysts

The latest drilling results have provided significant catalysts for New Found Gold Corp. The discovery of nine new gold zones not only extends the vertical extent of mineralization but also enhances the understanding of the geological framework at Queensway.

Melissa Render, VP of Exploration, emphasized that these initial deep drilling results "confirm our overarching thesis that Queensway is a deep-rooted mineralized gold system." The findings will enable the company to refine its geological models and enhance its deep targeting capabilities.

Additionally, the ongoing directional drilling program, utilizing advanced techniques from Devico AS, aims to expedite follow-up on these new discoveries. Render noted the importance of these initial deep targets derived from seismic data, highlighting that the company's team is now better positioned to conduct faster and more cost-effective drilling to hone in on deeper gold mineralization. With cash and marketable securities of approximately $54 million as of July 2024, New Found Gold believes it is well-funded to continue its ambitious 650,000-meter drill program, providing a strong foundation for future exploration and potential growth.

What The Experts Are Saying...

According to Technical Analyst Clive Maund on March 27, "New Found Gold has made the biggest gold discovery of the past 20 years at its Queensway property in Newfoundland, and that surely must work to its advantage as gold embarks on its biggest ever bull market, and most importantly from our point of view, it will work to the great advantage of its shareholders."

Alberto Abaterusso, writing for Seeking Alpha in May, highlighted the company's strategic position, stating, "New Found Gold Corp. receives a 'Buy' rating: strong upside potential from exploration in Canada's Newfound province near Gander City, and gold is poised for a bull market." Abaterusso further emphasized the growth opportunities at the Queensway project, saying, "Exploration and testing activities at the company's Queensway gold project in the province of Newfoundland continue to provide opportunities for higher share prices, and this could gain momentum as gold prices rise on expected strong safe-haven demand in the U.S. amid the looming recession."

Yahoo! Finance, on May 23, reported on the stock's strong performance within its sector. "New Found Gold Corp. is currently sporting a Zacks Rank of #2 (Buy)," indicating positive analyst sentiment.

The report also mentioned that "over the past 90 days, the Zacks Consensus Estimate for NFGC's full-year earnings has moved 1.6% higher. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive." Additionally, it was noted that "Based on the most recent data, NFGC has returned 5.1% so far this year. At the same time, Basic Materials stocks have gained an average of 0.4%. This means that New Found Gold Corp. is performing better than its sector in terms of year-to-date returns."

Ownership and Share Structure

According to Reuters, 4.93% of the company is held by management and insiders.

CEO Collin Kettell owns 2.67%, with 5.16 million shares. Founder and President Denis Laviolette owns 1.13%, with 2.18 million.

40.49 % is with strategic investors. Palisades Goldcorp Ltd. has 22.49%, with 43.39 million shares. Sprott Mining Inc. has 12.60%, with 24.30 million, and holding company 2176423 Ontario Ltd. has 5.40%, with 10.41 million.

3.77% is held by institutions.

Van Eck Associates Corporation is the largest institutional investor, owning 2.53%, with 4.81 million shares.

The rest is in retail. 

The company has a free float of 54.59%, representing 105.3 million shares traded on the market.

The stock's trading range for the 52-week period is between CA$3.66 and CA$6.93, reflecting the market's valuation of the company's performance and prospects.

Important Disclosures:

1. James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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