New Found Gold raises $56 million from bought deal
New Found Gold Corp. [TSXV-NFG] said Monday it has raised $56 million from a bought deal financing and will use the proceeds to fund exploration at its Queensway project in Newfoundland.
The bought deal offering consisted of 7.72 million flow-through common shares that qualify as “flow-through shares” under the Income Tax Act (Canada) priced at $7.25 per flow-through share.
The offering included significant participation by existing shareholders, representing approximately 50% of the issued shares from the offering. Key shareholders include Palisades Goldcorp., a resource-focused merchant bank founded by New Found Chairman and CEO Colin Kettell.
Last year, Novo Resources Corp. [TSX-NVO, OTCQX-NSRPF] agreed to sell its 15 million New Found Gold shares to a corporation controlled by Bay Street financier Eric Sprott for $125.9 million.
The sale was expected to increase Sprott’s stake in New Found to 31%.
New Found shares fell 0.38% or $0.02 to $5.16. and currently trade in a 52-week range of $7.60 and $4.41.
The Queensway project covers approximately 1,500 square kilometres with the initial exploration focused on areas that can be accessed by the Trans-Canada Highway, about 15 kilometres west of Gander, Newfoundland.
The project is divided by Gander Lake into Queensway North and Queensway South.
The company is currently undertaking a 500,000-metre drill program at Queensway and is well funded for the program. Drilling is focused on a 9.5-kilometre corridor along the Appleton fault, and a 12.4-kilometre corridor along the JBP fault.
So far, New Found has discovered three robust structurally controlled high-grade deposits: Keats, Lotto, Golden Joint. These occur along an approximately 2.0-kilometre corridor of the Appleton Fault Zone on Queensway North.
On April 13, 2022, the company reported a new high-grade gold discovery between the Keats and Golden Joint zones, located approximately 440 metres north of the Keats zone.
Hole NFGC-22-515 was the first hole drilled as part of a planned systematic program to drill test along the Appleton Fault Zone. It returned 9.21 g/t over 2.15 metres and 43.9 g/t over 3.85 metres.
New Found says the mineralized envelope now covers an area spanning 4.1 kilometres in strike length and is 400 metres wide. The company is aggressively drilling at Queensway North to further unlock discovery potential, while work is also underway to define additional drill targets on approximately 70 kilometres of prospective strike along the Appleton and JBP fault structures on the southern portion of the Queensway property.
Prior to closing the latest bought deal financing, New Found said it was well funded to pursue exploration with $7.14 million in cash and marketable securities.