Brad Aelicks: Diligence Report 2020.08.19
In Nov 2019, as a private company, New Found Gold Corp announced one of the highest grade most significant gold intercepts ever drilled in the province. Hole 19-01 was reported with a 19.0 meter intercept of 92.86 grams per tonne gold. The hole sparked a surge of chatter in the geological community but as a private company there was no knock-on effect in the market. However, after months of structuring and positioning, that is all about to change. New Found Gold has assembled one of the highest pedigree Board of Directors, advisory boards, and institutional and influential shareholder bases possible.
Having all the details taken care of the company came public and commenced trading August 11th on the TSX Venture exchange with the trading symbol NFG. A very impressive +$31 million raise on their listing has set the stage for a 100,000 meter aggressive 2 stage drilling program to reveal the true value of the discovery that lies within NFG’s Queensway project in the Central Newfoundland Gold Belt. The discovery and the wave of news that is sure to follow has sparked a staking rush, a flood of financing to a host of other Newfoundland explorers and a bonanza of exploration programs kicking off across the mineral belts of the province.
If you haven’t rushed to your trading platforms yet, lets start with a look at the geological setting of Central Newfoundland which provides great support that the exploration boom by NFG and others is sure to produce continued exciting results as these programs evolve over the next couple of seasons.
Anyone that has been invested in the junior exploration sector knows that deep and long active structures are one of the most important commonalities in big mineral deposits. The Central Newfoundland Gold Belt may be one of the most deep seated structurally prepared environments on the planet. During a period known as the Taconic orogeny that lasted from 480-430 million years ago, the continental plates of Laurentia and Gondwana collided closing the ocean that had laid between them called the Iapetus Ocean. The islands we now know as Newfoundland, Ireland and Great Britain were crushed between the continental plates and deep crustal breaks that remained as active fluid conduits for millions of years were created. The image below shows the 5 recognized major tectonic breaks that have been traced back to their origin over 400 million years ago and are identifiable across the continents for thousands of kilometers.
These deep crustal breaks have been found to be important mineralizing structures for numerous multi million-ounce gold deposits along these very trends. Dalradian’s Curraghinalt gold deposit in Northern Ireland, Oceana Gold’s Haile Deposit in Southern Carolina and Marathon Gold’s Valentine Lake deposit which lies just southwest of NFG’s Queensway discovery each provide evidence that these structures can be an integral conduit for gold deposits.
New Found Gold’s massive property (1500sq km’s) covers some 105 km’s of this structural corridor but most of the current and historical work has focused on the Queensway North portion of the project covering only 10% of the overall trend and is illustrated as the breakout below blown up from the shaded circle in the larger image.
The project is so big we will have to zoom in again to the area between two of the major crustal structures, the Dog Bay Line and the Grub Line to see their related parallel fault and deformation zones which are known as the Appleton Fault and the JBP Fault. This image is still just the Northern 10% of the project.
To date exploration efforts by previous operators and NFG have shown over 16 known zones of high-grade gold mineralization which span only a 5km section of the Appleton Fault and a 3km section of the JBP fault in the Queensway North project. Soil sampling, till sampling and geophysical surveys indicate an extremely high likelihood that the mineral system is much larger than the area illustrated above. Here is a sampling of the high-grade intercepts from the two separate structures.
The Knob zone located on the Appleton Fault has also demonstrated continuity between historical holes with a small but important historical resource defined previously by Noranda of 78,000 oz. Au @ 10.3 g/t. As NFG ramps up its two stage 100,000 metre drilling program detailed in an August 17th news release, it will be accompanied by a raft of additional news as the company plans to continue to evaluate the potential of the remaining 90% of the project by following up and expanding areas of high gold in till samples and priority geophysical anomalies. Here are the highlights of the first stage drilling and trenching.
New Found Gold Corp has 141 million shares issued, their trading at Cdn $1.60 so a $225 million market cap. Not particularly cheap but this project is known to host so many mineralized areas within dozens of structures paralleling and crisscrossing each other that NFG will be discovering high grade shoots and new ore panels for years to come. This is a tier one exploration asset. The launch of A 100,000m drilling campaign using 4 to 5 drills ensures a steady diet of news to the market for at least the next 16 months. Having a war chest north of $30 million also means we shouldn’t see NFG back to the market for more funding for the foreseeable future.
The stir that the Queensway project intercept has made in the market, has helped revive the entire Newfoundland mining and exploration industry. The province is host to numerous world class deposits within this structural belt. Not the least of which is Marathon Gold’s (MOZ on TSX) Valentine lake deposit which released a new resource estimate as part of their pre feasibility study on April 4th 2020 demonstrating 4 million ounces at 1.77 g/t gold in 4 different zones of measured, indicated and inferred categories. MOZ trades at $2.50 per share and has 205 million shares outstanding. They recently announced a 45,000m drill program to expand their resources and closed a $34 million bought deal financing to advance the Valentine Lake property towards feasibility.
So, if New Found Gold and Marathon Gold are the main dishes at the banquet there are numerous side dishes being prepared that appear to be just as tasty. With little doubt that Newfoundland can deliver world class deposits from this remarkable structural setting, junior explorers are having no problem funding property acquisitions and staking binges. At AheadoftheHerd.com we’ll be watching every move to see who’s acquired what how much money is being raised and what the work programs have potential to discover.
Some of the early movers on trend with either NFG or MOZ include the following.
Sokoman Minerals SIC on TSXV maybe the most advanced and cheapest. 122 million shares issued trading at $0.13. Their Moosehead project is due east of the Queensway project on a parallel structure and the opposite side of a heat driving intrusive. They also lie on trend and to the North of the Valentine Lake deposit. The are awaiting permits for phase 6 drilling as the first 5 phases continue to deliver eye popping results like 2018 Phase 1 Hole 01 11.90m of 44.96gpt gold The company is managed by a quality local geologist without a national following which is why the stock can’t seem to break out but they have attracted funding from legendary investor Eric Sprott on some earlier rounds. Sokoman also has multiple other strategically located projects within the belt making this company worth the time doing some diligence.
Global Vanadium Corp GLV on the TSXV has just announced the acquisition of the Stoney Lake property which lies due south and on trend with Sokoman’s Moosehead project and just north of Sokoman’s Twilight project all on the Valentine Lake trend. The company just announced a $2.5 million raise to fund the acquisition and exploration on the property. The super tight share structure, 18 million shares, saw the stock rocket from $0.25 to $0.90 but still is only a $17 million market cap. The project is early stage but is known to have numerous anomalous to high grade gold showings.
Mariner Resources RNR on the CSE is a newly listed company that has clearly demonstrated its commitment to the Central Newfoundland Gold Belt. In recent weeks Mariner has announced the acquisition of over 6 properties in the belt including the Great Bend property, True Grit, Shirley Lake and Mount Peyton properties, the Gazeebow property which claims to be 35 km north of and on trend with the North Queensway discovery and finally the Dog Bay properties which have historical drill results including 3.35m at 10.22gpt gold. The company is so new that it doesn’t have a web site that I could find set up to review the land package. It has 20,300,000 shares issued and trades by appointment only bid at $0.50
Labrador Gold Corp LAB on the TSXV has a very strategic land package called Kingsway on trend to the north of …wait for it … yes you guessed it, Queensway. With 86 million shares issued and a $0.47 price their market cap is well north of the first two but is justified by the land package at Kingsway. LAB also has a secondary focus in the eastern part of the province with earlier stage projects. Having raised $7 million in financing and warrant exercises the company is in good shape for the season and is completing all the basics of geophysics, soil sampling and till sampling before planning a fall drilling program.
Golden Ridge Resources GLDN on TSXV has been an early mover after the NFG discovery announcement, acquiring multiple projects including their Williams property which actually lies inside the Queensway South property of New Found Gold. The project has numerous mineral showings some with impressive numbers and clearly covers some of the structural domain over the Appleton Fault, as discussed in the NFG piece above. They have also acquired six other properties including a large land package associated with the Heritage property. The Heritage property has shown Bonanza-grade mineralization identified in drill core up to 47 grams per tonne Au and 10,516 g/t Ag. GLDN just completed a $2.15 million funding and had over a million in the treasury. After rolling the stock back 5 for 1 the 37 million shares issued and $0.24 price has under a $10 million market cap. GLDN also has 3 excellent projects in the golden triangle of BC. another hot bed of exploration activity we will be covering.
New Found Gold
Shares Outstanding 134,800,231m
Market cap Cdn$219.7m
Until Next Time
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This article is not a solicitation to purchase shares and is not a paid advertorial. It has been authored by career geologist and financier Brad Aelicks as a free service to encourage investors to follow the rapidly evolving mining districts capturing the attention and funding of the finance community. Mr. Aelicks has received no compensation for this report and invests for his own account holding a large portfolio of junior explorers including a starter position in all of the above-mentioned companies other than Marathon Gold. Any readers of the enclosed materials are encouraged to do their own due diligence and consult their registered representatives to confirm suitability should they find anything of interest to them.
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