Sprott invests $13.6 million in New Found Gold
Noted mining financier Eric Sprott has increased his stake in New Found Gold Corp. [NFG-TSXV; NFGFF-OTC], a mineral exploration firm involved in the acquisition, exploration and evaluation of resource properties in Newfoundland, Labrador and Ontario. According to information on its website, New Found is currently the largest mineral claimholder in Newfoundland and Labrador.
Sprott is raising his stake after the company recently released results from an ongoing 200,000-metre diamond drill program at its 100%-owned Queensway Project, located on the Trans-Canada Highway, 15 km west of Gander, Nfld.
Sprott, through an Ontario numbered company, has acquired 2.86 million common shares of New Found via a concurrent private placement and share purchase, of which 1.9 million shares were flow-through shares (at $5.25 per share) and 957,000 shares (at $3.84 per share) for $13.6 million.
Sprott now beneficially owns 27.9 million shares, representing approximately 18.4% of the outstanding shares, up from a previous holding of 25.1 million shares or 16.8%.
New Found shares advanced on the news, rising 2.2% or 11 cents to $5.12 on volume of 145,880. The shares are currently trading in a 52-week range of $5.25 and $1.24.
The junior recently released impressive results from drilling on the Keats Zone at its Queensway Project in central Newfoundland.
The program was launched after the company recently completed an initial public offering that raised $31.4 million from the sale of shares priced at $1.30 each.
The company said drilling at Keats continues to expand a zone of high-grade gold mineralization. It said drilling results, including a highlight intersection of 61.8 g/t gold over 13.7 metres, are evidence of the continuation of a very strong 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, 2.0 kilometres to the north, and by other recent high-grade drill intercepts along the Appletone Fault Zone,” said New Found CEO Craig Roberts.
The Queensway Project comprises 151,030 hectares. It has logging roads crosscutting the project, high voltage electric power lines running through the project area, and access to skilled workers.
Mineralization at Queensway been interpreted as epizonal style gold mineralization similar to that found in the high-grade Swan Zone at Kirkland Lake Gold Ltd.’s [KL-TSX, NYSE, KLA-ASX] Fosterville mine in Victoria, Australia.