Earnings Call - NEW FOUND GOLD CORP

Explicit Guidance:

• Production Timeline: First gold from the Queensway project is expected to be sent to the expanded Pine Cove mill in the fourth quarter of 2027.
• Capital Expenditure (CapEx): Initial capital for the project is $150 million (up from $155 million last year due to retooling), with high confidence in this figure based on detailed engineering and quotes already obtained.
• Recovery Rates: Hammerdown ore recovery is projected to improve from 85–87% to 92%+ following the circuit retooling at Pine Cove.
• Circuit Capacity: The Pine Cove mill is being retooled and expanded from its current capacity to 1,400 tons per day to accept Queensway material.
• Funding: The company is fully funded through Q3 2026 (specifically "until September of next year" for building Queensway) with $167 million cash, marketable securities, $35 million in available credit, and $17 million in in-the-money warrants, eliminating the need for equity fundraising.
• Permitting: Environmental Project/Preview Report submission to the government is expected shortly, with a regulatory decision anticipated in the early part of the new year.

Business-Segment Outlook:

• Resource & Reserve Update: The Measured and Indicated (M&I) resource increased by 38% (adding ~500,000 ounces), with 97% of Phase 1 production now categorized as M&I, de-risking the starter production.
• Grade Profile: Phase 1 production is targeted to deliver an average head grade of >13 grams per ton (g/t), supported by 5x5 meter grade control drilling.
• Production Profile: The mine plan has been adjusted to provide a "flatter, smoother" production profile, with ~70% of the added gold added to the mine plan to extend the front end and even out Phase 2 production.
• Underground Expansion: Underground ounces have increased by 87% (almost doubled) due to a trade-off study favoring underground extraction over open-pit bottoming, despite higher capital intensity per ounce.
• Processing Strategy: A split processing circuit is planned: 70% high-grade material to a Gravity/CIL circuit (targeting >99% payability) and 30% lower-grade material to a Gravity/Flotation circuit.

Market and Competitive Outlook:

• Operational Efficiency: The company aims to leverage existing Hammerdown operational learnings (selective mining, flitch mining, equipment sizing) to reduce unit costs at Queensway, specifically targeting the high-grade shoot first with smaller equipment before scaling to larger fleets.
• Valuation Expectation: Management anticipates the market will eventually recognize the company's delivery on milestones and cash-flow generation capabilities, contrasting current market sentiment with project fundamentals.

Macro / Industry Outlook:

• Market Conditions: Acknowledges the broader market decline ("market has just pulled us all down") but maintains that the company's internal trajectory is independent of short-term stock price movements.
• No Specific Macro Guidance: No explicit commentary on interest rates, FX, or inflation impacts; focus remains on project-specific execution and cost control.

Strategic Initiatives:

• Circuit Redesign (Pine Cove): Conversion of the Pine Cove mill from a Flotation/CIL circuit to a Gravity/CIL circuit to better process high-grade Hammerdown ore, with full expansion to 1,400 tpd to accept Queensway ore.
• Accelerated Development: Acquiring the Pine Cove mill and tailings facility accelerated Queensway's production timeline by three years compared to building a greenfield facility.
• Feasibility Study: Full Feasibility Study (FSS) for Phase 2 and Phase 3 is scheduled for completion next year, following current infill drilling, geotechnical, and metallurgical work.
• Early Works: Permit to begin early works (shovel in the ground) at Queensway is targeted for Q2 of the current year.
• M&A Integration: Successful integration of Maritime Resources assets (Hammerdown and Pine Cove) to create a synergistic production and processing ecosystem in Newfoundland and Labrador.

Risks and Headwinds to Outlook:

• Regulatory Timing: Progress is contingent on receiving the environmental assessment decision from the government in the early part of the new year.
• Permitting & Development: Future capital commitment depends on securing the final permit for Queensway before full-scale expansion.
  Market Sentiment: Current stock price depression is identified as a downside headwind for investor sentiment, despite the company being fully funded.
• Geotechnical Constraints: Pit wall flattening (strip ratio increase from 6 to 6.5) was required based on geotechnical drilling, impacting open-pit economics.

Management Tone on the Future:

• Confidence Level: High. Repeated emphasis on "de-risked" production, "high confidence" in cost estimates, and certainty regarding funding ("fully funded," "no need to go out to market").
• Strategic Focus: Strong emphasis on operational discipline, specific grade control, and separating high/low-grade streams to maximize "payability."
• Track Record: Highlights consistent delivery of milestones and the strategic foresight in the M&A and mine planning that saved over $300 million in profitability through trade-off studies.

Miscellaneous:

• Geographic Focus: All operations and development are concentrated in Newfoundland and Labrador.
• Payability Economics: Distinction made between selling doré bars (>99% payability) versus concentrate (87–88% payability due to smelter/trader cuts), driving the strategic decision to separate processing streams.