New Found Gold Corp. [NFG-TSXV] shares were active Wednesday August 12 after the newly-listed company released an update on the exploration effort at its Queensway Project in central Newfoundland.
The shares jumped 5.7% or 0.08 to $1.48 on volume of 2.17 million, making New Found Gold one of the most active issues on the TSX Venture Exchange.
Backed by an investor group that includes Robert McEwen and Eric Sprott, the junior has just completed an initial public offering that raised $27.3 million from the sale of 21 million common shares priced at $1.30 per share.
The offering was led by Canaccord Genuity Corp and BMO Capital Markets. The underwriters have been granted an over-allotment option of up to 3.15 million shares that could add an additional $4.1 million to the proceeds of the offering.
New Found Gold is 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.
Following completion of the IPO and prior to the exercise of the over-allotment option, New Found has 138.8 million shares issued and working capital of $72 million, including 6.94 million shares of Novo Resources Corp. [NVO-TSXV; NSRPF-OTCQX], a company that is focused on developing gold projects in the Pilbara region of Western Australia.
New Found’s principal objective is to explore and develop the Queensway Project, which is located near Gander, Nfld. “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,” said New Found Executive Chairman Collin Kettell.
He said the company is set to launch a 100,000-metre drill program after recently intercepting 19.0 metres of 92.9 g/t gold in the first hole of a maiden drill program. Mineralization in this gold intercept is now 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.
“This similarity was recognized by Dr. Qunton Hennigh during his initial review and site visit in January, 2020,” Kettell said in a news release Wednesday. Hennigh is a New Found director and Chairman and President of Novo Resources.
Kettell went on to said that the company is excited to embark on this major drill program to follow up on the above mentioned interval and test multiple targets as summarized in New Found’s prospectus.
The prospectus says the Queensway Project consists of 86 mineral licenses, including 6,041 claims, comprising 151,030 hectares of land located near Gander. The company acquired those rights by map staking mineral licenses and making a series of staged payments in cash and common shares from 2016 to 2019 under nine separate option agreements.