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Saturday, Jun 15, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

Gold

New Found Gold and Labrador Gold ink property purchase agreement ahead of acquisition

The deal includes a non-solicitation clause, a right for New Found to match any superior proposal, and a termination fee of CAD$500,000

New Found Gold and Labrador Gold ink property purchase agreement ahead of acquisition
Working at the Labrador Gold Kingsway project. Image via Labrador Gold.

New Found Gold Corp. (TSXV: NFG) (NYSE-A: NFGC) and Labrador Gold Corp. (TSXV: LAB) (OTCQX: NKOSF) (FNRL 2N6) signed a property purchase agreement, which is a step in the path leading to New Found’s acquisition of Labrador Gold in the future.

Announced on Tuesday, the CAD$20 million all-share deal will bring LabGold’s Kingsway Project in Gander, Newfoundland and Labrador, and other related assets that LabGold owns. LabGold must obtain approval from 66.6 per cent of the votes cast by holders of its common shares at a shareholder meeting for the deal to go through.

The agreement includes deal-protection provisions such as customary non-solicitation clauses, a right for New Found to match any superior proposal, and a termination fee of CAD$500,000 that LabGold will pay under customary circumstances. Directors, officers, and certain shareholders of LabGold, who collectively own approximately 2.35 per cent of LabGold’s common shares, have entered into voting support agreements.

Under these agreements, they have committed to vote all the LabGold shares they own or control in favor of the transaction.

“We recognize the transformative exploration contributions by the LabGold team, making several early discoveries at Kingsway, and we look forward to continuing exploration and drilling aimed at unlocking its full potential,” Greg Matheson, COO of New Found, said.

“Kingsway today is reminiscent of Queensway when New Found acquired the project back in 2016 with numerous early discoveries and large swaths of underexplored structures that later evolved into significant mineralized zones.”

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Read more: Calibre Mining remains on track to deliver on its 2024 guidance of between 275-300K ounces

Exploration has led to several-high grade gold discoveries

LabGold has explored the Kingsway Project, which spans 7,775 hectares with 311 mineral claims and borders New Found’s Queensway Project along several edges. This project shares numerous geological characteristics with the Queensway Project, including a presumed strike length of over 12 km along the Appleton Fault Zone (AFZ).

Over the past several years, this exploration has led to several high-grade gold discoveries at the Kingsway Project, such as Big Vein, Pristine, and Golden Glove, which exhibit mineralizing styles similar to those at the Queensway Project.

New Found will also apply its extensive geologic knowledge of the central Newfoundland Gold Belt and the Appleton Fault Zone (AFZ) to the Kingsway Project. The aim is to expand existing discovery areas and identify new mineralized zones. Furthermore, the integration of the Kingsway Project with New Found’s existing projects increases the potential to establish the district scale of the Queensway Project.

“The combined projects have over 20km of strike length along the Appleton Fault Zone, which more than doubles the existing strike length currently within the Queensway North project,” Matheson said. “Our exploration and operations team at New Found is well suited to explore this geological domain and mineralization style and we expect to unleash that expertise in realizing the potential at Kingsway.”

The additional 12 km of strike along the AFZ will facilitate the identification and development of further zones of mineralization. Additionally, New Found is equipped to conduct the efficient exploration necessary to unlock the mineral potential of the Kingsway Project due to possessing substantial financial resources, exploration infrastructure and an experienced team.

Read more: Calibre secures commissioning contract for Valentine plant; signs gold supply deal with Asahi

Read more: BMO underwriters agree to invest C$100M in Calibre Mining

Newfoundland has been ripe for exploration

New Found Gold isn’t the only company makes waves in Newfoundland and Labrador.

Earlier this month, mid-tier gold producer Calibre Mining Corp (TSX: CXB) (OTCQX: CXBMF) announced that it is concentrating on identifying new targets and expanding resources in areas that have been previously drilled.

As an international mid-tier gold producer, the company updated its activities at the Valentine gold project in Newfoundland this week. The 2024 exploration budget will support regional geophysics, drilling, till/sediment sampling, and trenching across the operation’s 250-square-kilometre land package.

Calibre is conducting an 8,000-metre maiden drill program southwest of Valentine’s Leprechaun/Frank corridor. Earlier this year, high-grade drill results near the Leprechaun deposit, including 46.5 g/t gold over 5.3 metres, inspired this new mining endeavour.

The gold producer is also carrying out a 50,000-metre ore control reverse circulation drill program at the Leprechaun and Marathon deposits. Historically, the Leprechaun pit has yielded drill results with grades as high as 16.6 g/t Au over 8.1 metres. Also, bonanza-grade core samples from the Marathon pit have included results such as 150.3 g/t Au over 4.3 metres.

The site encompasses five major deposits and contains an estimated 4 million ounces of measured and indicated gold.

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 Calibre Mining is a sponsor of Mugglehead news coverage

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