Third Quarter 2026 Results Conference Call and Webcast - NEW FOUND GOLD CORP

Thank you for standing by and welcome to the Newfound Gold Corp third quarter 2026 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If You'd like to withdraw your question, press star one again. Thank you. I'd now like to turn the call over to Fiona Chow, VP Communications and Corporate Development. You may begin. Thank you, Operator. Good morning, everyone, and thank you for joining us to discuss Newfound Gold's results for the third quarter of 2026. Our news release, financial statements, and MD&A for the quarter were released yesterday and are available on our website, on CDAR Plus, and on EDGAR. A replay of this call will also be posted on our site shortly following this call. Before we begin, please note that today's remarks include forward-looking statements, including statements about production, costs, the timing of permitting and development of Queensway, the Pine Cone conversion and expansion, and our future plans and objectives. These statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the cautionary language in our news release and MD&A and to the risk factors set out in our annual information form. And note that all financial numbers mentioned on this call have been rounded to the nearest million dollars. We will also refer to non-IFRS measures, including cash costs, all-in-sustaining costs, average realized gold price, and EBITDA. These measures do not have standardized meanings under IFRS. Definitions and reconciliations are in our MD&A. Also, please note the Queensland Gold Project 2026 PEA is preliminary in nature. It includes inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves, and there's no certainty the PEA will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability. Unless otherwise noted, all dollar figures are in Canadian dollars. On the call with me today are Keith Boyle, our Chief Executive Officer, Hashim Ahmed, our Chief Financial Officer, Jared Saunders, our Vice President of Sustainability, and Yelena Freed, General Counsel and Corporate Secretary. After our prepared remarks, we will open the line for questions. With that, I'll turn the call over to Keith. Thank you, Fiona, and good morning, everyone. Thank you all for joining us. Third quarter 2026 was a transformational quarter for Newfound Gold. In September, we announced commercial production at our 100% owned Hammerdown Gold Mine in central Canada. With that, Newfound Gold is Canada's newest gold producer. Just under a year ago, we acquired the Hammerdown Gold project in the Pine Cove Mill, and in this time, Hammerdown has gone from a development stage asset to a producing mine, feeding the Pinecove Mill. We now have a producing asset and most importantly, permitted mill and tailings facilities at Pine Caves to rapidly advance our flagship queensway gold project to production two to three years faster than building only a standalone mill at queensway let me start as always with safety through september 30th 2026 our hammerdown and pinecone teams worked more than 328 000 person hours this year with a zero-loss time incident. I want to thank our employees and contractors for that result. It's the foundation of everything we do. Turning to production, Hammerdown produced 4,863 ounces of gold in the third quarter, during which we had our first full month of commercial production. We saw an average head grade of 2.77 grams per ton and recovery of 84.2 percent that brings us to 10 670 ounces year to date at the end of q3 consistent with a ramp up through the year q3 alone accounted for 46 of our production for the first nine months we sold 6 935 ounces in the quarter at an average realized price of 4 285 us dollars per ounce generating revenue of $41.6 million. Income from the mine operations was $18.6 million, or 45% of revenue, and EBITDA was positive at $13.1 million. Operating costs were higher than anticipated, with cash costs at $2,887 US dollars per ounce and all-in sustaining costs at $3,279 US dollars per ounce. During the quarter we advanced overburden stripping and pioneering work in the Rambouillian pit, moving up the schedule from early 2027 into Q3 so it could be done in a better seasonal conditions. Grade, infill drilling, fuel surcharges, and water treatment also contributed. I'll walk through the detail shortly, along with the steps we are taking to bring costs down. To confirm, we expect operating costs to come down in the long run. On the corporate side, we also reached the milestone strengthening our corporate profile through the commencement of trading on the Toronto Stock Exchange main board. Post-quarter end, we delivered two major milestones at Queensway. In October, we released a revised PEA and updated mineral resource estimate. The PEA shows an after-tax NPV at a 5% discount rate of $1.73 billion and an after tax internal rate of return of 126%, using a base case full price of $3,600 U.S. per ounce. At the upside case of $4,100 U.S. per ounce, these numbers rise to $2.225 billion and 164 percent, respectively. In addition, the measured and indicated resources grew by 38 percent. Last week, we submitted the Environmental Preview Report for Queensway Phase 1, a key step in provincial permitting, and expect a decision from the Minister of Environment, Conservation, and Climate Change for the province of Newfoundland and Labrador in late 2026 or early 2027. During the quarter, our balance sheet remains strong, and we ended the quarter with $167.1 million in cash and $166.3 million in working capital. Queensway Phase 1 is fully funded and we remain on schedule to deliver first queen's way mineralized material to pinecone in the fourth quarter of 2027. let me now turn to the operations in more detail at hammerdown q3 production is driven by higher mining and processing rates we mine 97 000 tons of mineralized materials and about 1.2 million tons of waste for total material movement of 1.3 million times pine cold process 66,000 tons of mineralized material during the quarter with a head grade of 2.77 grams per ton gold 31% above our year-to-date average of 2 point 12 but slightly below mine plan recovery of eighty four point two percent was in line with the year- to-date average of eighty three point Ounces sold of 6,935 exceeded production, as they included about 900 ounces delivered in July against custom prepayments we received in June. Third quarter all-in sustaining costs were $904 U.S. per ounce above the 2026 Hammerdown PPA. About 825 U.S. dollars per ounce of that gap is explained by five items. The largest was the strip ratio. Our strip ratio was at 12.4 to 1, about 30% above the PDA's 9.6 to 1 number. That was because we started mining the Rambouillien pit in Q3. This work lifts total material movement from 12,000 to 16,000 tons per day, as planned in the PEA for 2027. We pulled it forward from the first quarter of 27, so that overburden stripping and pioneering could be done before the winter. That is the right call for the mine, but carries a cost in this quarter. It's added approximately $350 per ounce U.S. to the all-in-sustaining cost for the portal. Next, the head grade was about 11% below the PDA. There was a trench, commonly known as a goodbye cut, taken out in the 1990s. It was unexpectedly larger than what had been recorded, and therefore higher grade ounces did not materialize. The grade reconciliation between actual to resource model is excellent at less than 5%. So overall, the grade added about $135 per ounce to the all-in-sustaining cost for the quarter. Other items impacting operating costs were instill drilling of the inferred blocks in the Stage 2 pit at about $180 per ounce, fuel surcharges on external service contracts of about $85 per ounce, higher mill labor costs, about $45 per ounce and extra water treatment at Pine Cove, which is about $30 per ounce. So, we're now assessing how elevated fuel and water treatment costs affect our ability to reach PA level metrics and how to close this gap in future quarters. We have clear levers to bring costs down. First, the permanent onsite crusher and sorter at Hammerdown. We expect substantial completion this quarter with commissioning and ramp up through the first half of 2027. is expected to reduce crushing costs and send higher grade material to the mill, improving both grade and unit costs. Second, the infill and location verification drilling at Hammerdown is complete with 30,896 meters drilled in 340 poles. Those infill costs decrease substantially and the data will support an updated hammerdown resource estimate in county 27. third the pinecone circuit conversion in july we received the permit amendment to convert the pine coal from its current flotation leach and merrill crow circuit to a gravity carbon and leach recent test boards suggest that this can lift hammerdown recoveries from 87 percent to 92 percent the conversion is on schedule for completion in q4 of 2027. we will apply separately for the permit to expand throughput to 1400 tons per day as part of the queensway permitting process subsequent to being released from the environmental process the conversion is an important part of our hub and scope strategy pineco will become one processing hub serving both hammerdown and queensway phase one our focus for hammerdown and pine coal through the rest of 26 and into 27 is straightforward steady state production the crusher sorter implementation completion of grade control drilling and advancement of the off-site melt conversion turning to queensway our flagship project the revised 2026 pea and updated mineral resource we released last month are the result of about 18 months of drilling engineering and technical work at a base case full price of 3 600 an ounce u.s the pea shows an after tax net present value at five percent of 1.73 billion more than double the previous study and an after-tax internal rate of a return of 126%. At $4,100 per ounce, the NPV rises to $2.2 billion and the IRR to 164%. After-tax payback is under one year. The mine plan assumes a 15-year mine life with a phased open-pit underground operation producing 1.744 million ounces of coal. That is an average of about 116,000 ounces a year, peaking at about 190,000 ounces a years in 2032. Life of mine cash costs are estimated at $985 per ounce, with all in sustaining costs of $1,375 per ounce. Phase one starts with very high rates, averaging 13.41 grams per ton, against the life of mine average of 2.09 grams per ton and recovery of 91.5 percent. Capital efficiency is the defining feature. Phase 1 initial capital is about $150 million in line with the 2025 PPA. Cash flow from phase 1 is designed to fund phase 2 and phase 2 to fund the phase 3. Growth capital over the life of mine is 832 million and sustaining capital is 971. the revised mine plan keeps the phase approach of the 2025 pea but makes several key changes phase one now uses pine cove expanded and converted to a gravity carbon and leach as its mill mining starts with contractors in phase one and moves to owner mining later in phase two the mine plan adds zones from the afz peripheral area including dropkick underground ounces rise 86 percent and the underground mining moves up from phase three to phase two starting in 2030. the updated resource supports the revised 2026 PEA measured and indicated resources grew 38 percent to 1.92 million ounces and in 27.3 million tons, grading 2.19 grams per ton. Inferred resources totaled 606,000 ounces in 12.5 million tons at 1.51 grams per tons. The dropkick zone, about 11 kilometers north of the afc core contributed to that growth in its first inclusion in the mineral resource and importantly it speaks to the long strike potential for growth at queensway beyond the afs core area we will be filing the technical report to support the revised pea and updated mre by early december within 45 days of the release on the permitting front we submitted the environmental preview report for queensway phase one on november 3rd and it has was subsequently registered by the ministry of environment conservation and climate change for the province of newfoundland labrador the epr responds to the information request and feedback from government review public comment and our engagement activities including an open house in the town of appleton central newfoundlands The EPR is now in a 35-day review by the Environmental Assessment Committee and the public. Under provincial legislation, a decision is due within 45 days of submission with a possible 14-day extension. Based on this timeline, we expect the decision by the end of this year or early in 2027. After release from the environmental assessment, we will apply for the provincial and federal permits needed and work with the province on a surface and mining lease through mid-2027. Subject to those permits, our key milestones are contractor mobilization at Queensway in Q1 of 2027, early works in Q2 2027 including clearing, overburden removal, the sound burb, tight roads and water management. structures mining starting in Q3 2027 with the aim of building a stockpile for phase one production first Queensway mineralized material to an expanded 1,400 tons a pine cove mill in Q4 of 2027 engineering continues under our EPCM contract with WSP Canada alongside procurement of long lead items and major contracts Turning to exploration and de-risking, at the end of Q3, we had four rigs active at Queensway and had completed 61,557 meters of diamond drilling in 439 drills. Our 2026 Queensway work program has focused on converting inferred indicated resources in the Phase II pits and underground grade control drilling at the peak. drilling for the phase two pits and continued drilling at drop tick and regional targets. Drilling was slower than planned this quarter due to contractor re-maintenance and deep directional drilling challenges in the underground portion of the ASZ core. In July, we also reported strong channel and infill results from the water zone in the ASA core. Highlights included 23.7 grams per ton over 15.88 meters in channel sampling and 43.5 grams per ton over 4.7 meters in infill drilling those results match the resource block model well and support our phase 2 open pit and underground mine planning finally i would like to say a few words of thanks to our employees our contractors and local communities without which we would not be here today as Canada's newest gold producer. Throughout my career I've worked across Canada and many other countries. This is the best jurisdiction I've worked in, thanks in large part to the people. This company has a solid commitment to hire and source locally whenever possible. Our workforce is over 90% from the province and over 60% from central Newfoundland. We are bringing responsible development along with economic benefits and new opportunities for the communities in which we operate, including the town of Ackleton right next door to Queensway, Glenwood, Gander and the nearby communities in Springdale and in Kings Point near Hammerdown Gold Line and in Baber and Mingsbite near Pine Cove. With that, I'll hand over to Hashim Ahmed to walk through the financials. Thank you, Keith, and good morning, everyone. Q3 is the first quarter to include a period of commercial production at Hammerdown. It is also the first corner with depreciation and depletion of the Hammerdown and Pine Cope assets, which began on July 1st, 2026. Therefore, this quarter's results are not directly comparable with the third quarter of 2025, which predates the acquisition of maritime resources or with earlier quarters of 2026. Given this, revenue was 42 million up from 16 million in Q2 2026 and 10 million in q1 2026 We sold 6,935 ounces at an average realized price of 4,285 U.S. dollars, or 5,996 Canadian dollars per ounce. Year-to-date revenue is 68 million at an averaged realized price, or 4,459 U. S. dollars per ounce. Cost of sales was $23 million which included $9 million of depreciation and depletion up from about $0.1 million in Q2 as the company announced commercial production at Hammerdown. Cash operating costs were driven mainly by contractor costs of $13 million. Income from mining operations was 19 million or 45 percent of revenue compared with 2 million in q2 total cash costs during the quarter were 20 million and all in sustaining costs were 22 million or 4040 us dollars and 4588 canadian dollars per ounce Exploration and evaluation spending was $15 million, which was flat compared to the second quarter, and up 9% year-over-year, reflecting the expanded Queensway drilling program. Queensway accounted for 92% of that spend. Cooperate G&A was $3 million, essentially unchanged from Q3 2025. Share-based compensation was $2 million, a non-cash item. With Hammerdown now profitable, we recorded a current income and mining tax expense of $2 million. The net result was a loss of $7 million, or $0.02 per share, compared with $13 million, or $.06 per share a year ago, and $11 million loss in Q2 2026. Note that before taxes, we recorded income of two million this quarter. I would also like to highlight if Vita was a positive 13 million compared to the negative 13 million in Q3 2025. Operating cash flow before working capital changes was 11 million. Driven by hammerdowns mine operating income and partly offset by points with exploration and corporate costs. Working capital used $18 million. That reflects lower payables, inventory bills, and delivery of about 900 ounces against repayment received in June. As a result, cash used in operating activity was $7 million. We invested $19 million in property, plant, and equipment, mainly at Hammerdown, Pine Cove, and Coonsburg. Financing activities used in net one million, mainly interest on the credit facility, partly offset by warrant exercises. We ended the quarter with a strong balance sheet and 167 million in cash, down from 194 million at June 30th, mainly due to increased capital spending. WORKING CAPITAL WAS $167 MILLION AND TOTAL ASSETS WERE $706 MILLION. ON DEBT, WE HAVE DRAWN THE $70 MILLION FIRST TRANCH OF OUR $105 MILLION EDGEPOINT FACILITY AT A FIXED RATE OF 8.75%. THE $35 MILLION SECOND TRANCE REMAINS AVAILABLE at our auctions until May 15, 2027, subject to conditions precedence. We are in compliance with all governance. Taken together, our cash, the undrawn tranche, and growing hammer-down cash flow give us a strong position to fund Queensway Phase 1 and our 2026 and 2027 priorities. With that, I'll turn the call back to Keith. Thank you, Ashim. To sum up, Q3 was the quarter Newfound Gold became Canada's newest gold producer. Our priorities for the rest of 26 and into 2027 are clear. Keith hammered down city-state production and commissioning the crusher and sorter to lower costs and with grade to the mill. Advanced Queensway Phase 1 through permitting and engineering, targeting first mineralized material to pine cove in q4 of 2027 file the queensway technical report and continue the drill program complete the pine co conversion and begin exploring the hammerdown gold project land package we have a producing mine a central mill a fully funded phase one mine plan for Queensway, and a strong balance sheet, all in Newfoundland, Labrador, a top mining jurisdiction. That is a solid platform on our path to becoming Canada's next mid-tier gold producer. I want to thank our employees, contractors, communities, shareholders, including our cornerstone shareholder, Sprott, for their continued support. With that, operator, We're happy to take questions. Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, simply press star1 again. If you are listening via the webcast and would like to ask questions, please type your question in the Q&A box on your screen. Your first audio question today comes from a line of Mike Neuser from Roth Capital Partners. Please go ahead. Well, thanks for taking my call. Congratulations on commercial production and the technical report on Queensway. It's a little bit, as you transition, you know, thinking ahead, don't want to be over my skis. Do you have any guidance on exploration drilling at Hammerdown and Queensway? I know you've talked about a percentage between exploration and infill. But could you provide any thoughts on the next year? Hi, Mike. Thanks for your question. Well, for those that are on the line, there is Keith Boyle. We're right in the middle of our budget process, so you can expect some of that guidance in the future. But, you know, I mean, we're transitioning to a producing company. And so, however, we have some very good targets that we do want to follow up on. Do you – I think you've got a lot of targets with both projects. You mentioned that in the past that Dropkick was open to expansion. Do you think that we might see an updated MRE on Queensway later in 2027? The short answer is yes, because what the work we're doing now, the drilling and the infill drilling that we're doing now with some exploration is geared to provide or to move to a feasibility study next year. Okay. And with regards to Pine Cove and the work at Hammerdown, I don't mean to put you on the spot, but I know that you're dedicating additional resources and that Hammerdown has really been uninvested as far as outside of the main deposit there that you are mining. Do you think we might be able to see an updated MRE there as well? All right, yeah, we'll be providing an updated MRE for Hammerdown, especially given all the infill drilling that we did do. That infill grilling was below stage one pit, and we really did it to ensure that, or de-risk the stage two pit, because it had previously been mined out underground and so we just wanted to make sure that what the resource blocks that were adjacent to those old workings were in fact still there and so that was the infill drilling that we did but as far as step out drilling and some of the other targets to the south or in the periphery are you still going to be following up on those in the new year yeah that's better be that'll be part of the plan for the new year. Okay. Well, I think you've invested in a strong foundation for going into the winter and should come out strong next year, and best of luck. Thanks, Mike. Again, if you'd like to ask an audio question, please press star 1 on your telephone keypad. We'll pause for just a moment before we move on to our web questions. And there are no further phone questions at this time. I will turn the call back over to Fiona for some web questions. Yes, thank you very much, Operator. So we have a series of questions from Eleanor Mazinski at SCP Capital. We'll begin with the first question, which was, what was the mind grade for the quarter? Keith? The mind grade pour the quarter. Oh, I don't have that one at the tip of my fingers. um but let me get we'll we'll search that one down and we'll get back in okay and the second question was was any ore extracted at room billion uh there was a minor part of it or as as we did the initial stripping overburden stripping and uh and you know the first blasts but very little. Okay, the next question on Rumbillion again. Can you speak to splits on waste, tons, mines between the two areas? Sorry, can you ask that question again? Yes. She was asking about Rumbillian, if we can speak to split on waste tons, mines between those two areas. Yeah, I don't, I'll have to get back to you on that one too, Eleanor. Sorry, I've got just the total number. Okay, great. Next question from her is if we can speak to the reconciliation to date to the block model now that the infill program and results have been completed. So the results of the infills have not been included in the resource model as yet. That still has to be done. We're still waiting on assays for that. But I can tell you that the reconciliation to the block model to date is 3%, minus 3%. All right. And then her last question, she's asking if there are any mine schedule changes with the new infill information that's expected to lift the grade profile ahead of the sorter being commissioned. No, no. the mine plan right now is to continue we're still too early in the uh in the pit um to really have a lot of flexibility to change we did bring forward rumbullion so we'll be able to then pick the highest grade that we do mine at any one time but generally speaking it's a pretty it's very small pit so it doesn't doesn't have a lot of flex ability to change the mine plant that way going back to the first question going back to the first question eleanor the mine grade was 2.02 so we did stockpile uh we did start by some lower grade material okay great thank you and uh that is the end of the questions that we have received oh wait i'm sorry another follow-up has come from eleanor uh she's asking for the asic If a 10% increase is safe to assume into next year, the implied lift from removing additional stripping and infilling that is now complete. I think it's early stages to respond on that one, Eleanor, and so we will be releasing guidance in due course. All right. And just checking back, it looks like those are all the questions that we've received from today. We thank everyone who has dialed in for Newfoundgold's first quarterly earnings call. Thank you very much. Goodbye. This concludes today's conference call. Thank you for participating. You may now disconnect.