Earnings Call - NEW FOUND GOLD CORP

Financial Performance:

• Company is fully funded with $167 million in cash, marketable securities, a $35 million remaining drawdown facility on warrants, and $17 million in in-the-money warrants, covering capital requirements through September 2026.
• Revised Pre-Feasibility Study (PEA) estimates an initial capital expenditure of $150 million for the Queensway project (Phase 1), with significant additional capital required for underground expansion (Phase 2/3) and mill conversion.
• Hammerdown gold mine production utilizes a retooled Pine Cove mill, targeting improved gold recovery rates of ~92% (up from 85-87%) for the new Gravity CIL circuit.
• Revenue optimization is driven by processing high-grade ore (13.4 g/t) through a Gravity CIL circuit to produce dore gold, securing >99% payability versus ~87-88% payability for lower-grade flotation concentrate.
• Resource model shows a 38% increase in M&I resources, adding ~500,000 ounces, with 70% of new ounces incorporated into the mine plan to create a flatter production profile.

Guidance and Future Outlook:

• Queensway first gold production is scheduled for Q4 2027, feeding into the expanded Pine Cove mill (increased capacity to 1,400 tons/day).
• Environmental Project Review submission expected in Q1 2027, with potential government decision in early 2028.
• Early works permit and ground-breaking at Queensway targeted for Q2 2027.
• Feasibility Study for Phase 2 and 3 (underground expansion) planned for completion in 2027 following infill drilling and metallurgical testing.
• Long-term strategy emphasizes transitioning to underground mining once open-pit resources are depleted, leveraging defined high-grade shoots to improve economics.

Business Segments and Product Lines:

• Hammerdown Gold Mine: In production, supplying 700 tons/day of 2.5–3.0 g/t ore to the Pine Cove mill; operations are de-risked with 97% of Phase 1 production in Measured and Indicated categories.
• Pine Cove Mill: Currently undergoing retooling from Flotation to Gravity CIL; will be expanded to 1,400 tons/day to accept Queensway feed.
• Queensway Gold Project: In development; utilizes Grade Control Drilling at 5x5 meter spacing to isolate high-grade veins (13+ g/t) from lower-grade stockwork.
• Processing Circuits: Implementation of two distinct circuits: a dedicated Gravity CIL circuit for high-grade material (dore production) and a Gravity Flotation circuit for lower-grade material (concentrate production).

Market and Competitive Landscape:

• Acquisition of the fully permitted Pine Cove mill and tailings facility accelerated Queensway production timeline by approximately three years compared to building new infrastructure.
• Operational learnings from Hammerdown regarding selective mining (bench face flitches), equipment sizing, and grade control are being directly applied to Queensway to minimize dilution and maximize yield.
• Market focus remains on high-grade gold assets; the company aims to differentiate through superior grade control and processing technology to maximize gold payability.

Risks and Challenges:

• Underground Economics: Converting the bottom of the open pit to underground mining involves higher per-ounce capital costs, though trade-off studies indicate significant long-term profit increase (>300M USD) by utilizing existing ramp infrastructure.
• Permitting and Development: Execution relies on receiving environmental assessments and early works permits in 2027; delays could impact the Q4 2027 production target.
  Dilution and Grade: Mitigation strategy relies heavily on tight-spacing grade control drilling (5x5m) to prevent dilution of the high-grade core during mining.
• Market Volatility: Management noted recent share price weakness despite strong operational milestones and a fully funded balance sheet.

Management Commentary and Tone:

• Tone is highly confident and operational-focused, emphasizing de-risking through detailed engineering, infill drilling, and leveraging existing infrastructure.
• CEO Keith Boyle highlighted the company's "fully funded" status as a primary advantage, negating the need for immediate equity dilution.
• Management expressed strong conviction in the revised PEA, citing that the high-grade focus and dual-circuit strategy significantly improve project economics despite increased capital intensity.

Analyst Questions and Answers:

• Resource Conversion: Confirmed that 38% resource growth resulted in a 17% mine plan expansion (adding ~200k oz), smoothing the production curve rather than creating a jagged profile.
• Mining Methodology: Questioned the shift to underground; management explained that excavating the last slice of the open pit becomes uneconomical compared to ramping down to the underground high-grade shoot, as the ramp cost is sunk regardless.
• Capital Efficiency: Clarified that the $150M initial capex is based on detailed engineering and contractor quotes for the Pine Cove retooling and Queensway expansion, ensuring high confidence in the budget.
• Payability: Explained the strategic decision to separate circuits: Gravity CIL yields >99% payability (dore), while Flotation yields ~87-88% payability (concentrate), justifying the higher capital cost for the high-grade circuit.

Other Key Points:

• The company acquired Maritime Resources primarily for the permitted Pine Cove mill and tailings, not the Hammerdown mine itself.
• Geological confirmation of high-grade cores was achieved through aggressive grade control drilling at the end of the previous year and start of the current year.
• Future expansion plans involve a dual-equipment fleet strategy: smaller selective equipment for high-grade zones initially, transitioning to larger fleets for bulk material movement in Phase 2.
• A 300% increase in underground ounces (87% increase total) was added to the mine plan, significantly altering the long-term resource base despite higher initial capital outlay.