New Found Gold Corp. [NFG-TSXV] has released impressive preliminary results from drilling on the Keats Zone at its Queensway Project in central Newfoundland.
The latest results are assays from the first four holes of an ongoing 100,000-metre program that was launched after the company recently 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 underwriters exercised an over-allotment option of 3.15 million shares that added an additional $4.1 million to the proceeds of the offering.
On October 27, 2020, reaction to the drilling news sent the shares up 13.7% or 41 cents to $3.40 on volume of 4.5 million. On Wednesday October 28, investors took some profits off the table, and the shares fell 7.3% or 25 cents to $3.15 on volume of 370,391.
New Found said the four holes were drilled as part of a 10-metre step-out pattern around discovery hole NFGC-19-01, which returned 19.0 metres of 92.9 g/t gold. Mineralization in this gold intercept has 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.
Highlights from four holes released on October 27, 2020, include 22.3 g/t gold over 41.35 metres and 31.2 g/t gold over 18.85 metres.
“We are very pleased that our initial step-out drilling at Keats is demonstrating strong continuity of veining and high-grade gold mineralization,” said New Found Chief Operating Officer Greg Matheson. “Historic work and more recent drilling at Keats have demonstrated gold mineralization over at least 300 metres of strike and the target remains open along strike and to depth,” he said. “Our program will continue systematic step out drilling to test this larger target area.”
The company is backed by an investor group that includes Robert McEwen and Eric Sprott.