New Found Gold probes ‘elephant’ potential of Queensway project

Success begets success; in the mining industry, jurisdictions that continually reward exploration companies for their efforts will attract more attention and more exploration. 

In Newfoundland and Labrador, a number of gold projects in stages between initial drilling to mine development — including Matador Mining’s (US-OTC: MZZMF; ASX: MZZ) Cape Ray gold project and Marathon Gold’s (TSX: MOZ; UT-OTC: MGDPF) Valentine project — have spurred further exploration, tripling the number of active companies in the province. 

“There’s a whole group of companies that are very aggressively pursuing their claims here on the island, particularly. And you’ll see that in the numbers too,” says Ed Moriarity, executive director of local industry association Mining NL. “The number of claims in good standing have gone [from] 90,000 last year or the year before to over 192,000.” 

Moriarity says that the number of companies carrying out active exploration in the province has jumped to the mid-70s today from the mid-20s in 2017. Spending on drilling and exploration for this year is forecast at $150 million, comparable with historic highs. 

Newfoundland and Labrador’s mining industry has seen the cycle of past booms like any other jurisdiction, says Moriarity — but this time is different. 

“I think the key thing this time around is the greater awareness of the opportunities here. The fact that we’ve had some really good success with a lot of the companies early on, that’s attracted attention.” 

Big investment, big expectations 

Leading the province’s discoveries attracting attention is New Found Gold’s (TSXV: NFG; NYSE-AM: NFGC) Queensway project near the community of Appleton in Central Newfoundland’s historically productive Dunnage Zone. 

Queensway’s orogenic gold deposit is hosted in middle Ordovician sediments, straddling two major faults in the area — Appleton and JBP. Results from the ongoing 400,000-metre drilling program have turned up results ranging up to 25.6 metres grading 146.2 grams gold starting at 291 metres depth (hole 21-182 in the Keats zone, reported in May 2021). That geological setting and ore grade, along with the scale of strike distance, present new possibilities for discoveries in Newfoundland and Labrador. 

“Starting at the Queensway North, all the way down to the bottom of Queensway South, we control 100 kilometres of, essentially, the collision between two continental plates,” says Collin Kettell a cofounder and chairman of New Found Gold, who also stepped into the role of CEO in April.  

“Literally the first drill hole that we ever drilled went into the Keats zone, which just turned out to be a fantastic discovery. We drilled down into something that’s completely changed the narrative on what is possible and that’s what gets people so excited.” 

That first hole into Keats, drilled in late 2019 and reported in early 2020, returned 19 metres of 92.86 grams gold per tonne from 96 metres depth. Keats has continued to deliver standout results, most recently with a May 2022 near-surface intercept of 2.2 metres grading 275 grams gold. 

Prospecting dynasty 

The Keats zone derives its name from the Keats-Stares family, a fourth-generation prospecting dynasty in the province and winners of the 2007 Prospectors and Developers Association of Canada Bill Dennis Award for Canadian discovery or prospecting success. 

Kettell and New Found Gold cofounder and president Denis Laviolette, a production and exploration geologist, visited the future Queensway project in 2016 to pan for gold with members of the Keats family at a particular mineral occurrence, who were keen to show the property’s potential.  

“I had never panned gold before,” says Kettell, who is also founder and executive chairman of Pallisades Goldcorp. “Denis had many times, but I actually panned gold at the Dome showing…  and we decided that that was what we were going to focus on.” 

From that first showing, Queensway’s potential is being compared to world-class orogenic gold deposits such as Agnico Eagle Mines’ (TSX: AEM; NYSE: AEM) Fosterville mine, the largest gold producer in Australia’s Victoria state. 

“Eric Sprott, the name synonymous with everything exploration and mining, has made his largest ever investment into New Found Gold,” Kettell says. “He became a billionaire through his investment in the Fosterville mine in Australia — and that’s recent in investor’s minds because it happened in 2015 to 2018. And that set Eric off on a mission to find another one.” 

Kettell says Sprott — who has reportedly invested $125.9 million in New Found Gold shares — believes Queensway has the potential to be “many times bigger” than Fosterville. 

With the Keats, Lotto and Golden Joint zones identified within Queensway, continuing to expand known zones and knowledge about the size of the deposit is the ongoing goal of drilling. At Golden Joint and Lotto, drill results shared by the company in March both showed gold at depth, with Golden Joint intercepting 14.2 metres grading 69.15 grams gold per tonne from 225 metres depth. At Lotto, the main high-grade gold vein was intercepted over 2.2 metres grading 24.25 grams gold from 324 metres depth. 

“Despite the fact that we’ve already drilled 160,000 metres, we’ve hardly scratched the surface.” says Kettell.  “So far, we’ve only focused on roughly three kilometers. We’re stepping off of the known zones to figure out how big they are and how many ounces they might contain. About half the drill rigs are stepping out into unknown territory and looking for other zones.” 

Kettell adds he’s always wanted to be associated with an “elephant” discovery, and Queensway seems to qualify as one. 

“We certainly did the right things, but it’s just an incredibly fortunate situation to be in,” he says. “We have more ground than we will ever be able to properly test, arguably within our lifetimes, but certainly within the lifetime of the company.”