Newfoundland’s mining company New Found Gold Corp (CVE: NFG) (NYSEAMERICAN: NFGC) recently intercepted short intervals of rich gold mineralization near its flagship project.
The most notable new assay results come from the Kingsway operation’s Pistachio zone. The best core sample pulled from that area consisted of 104.6 grams per tonne gold over 2.1 metres; including 290.7 g/t Au in a 0.75-metre section.
Another notable assay from the site’s “Jackpot” zone contained 73.3 g/t Au over 1 metre. Kingsway, acquired from Labrador Gold Corp (CVE: LAB) in July, sits adjacent to New Found’s flagship Queensway operation in the north. The new cores were taken from what’s known as the Appleton Fault Zone (AFZ), which extends through both gold projects.
“Today’s results at Kingsway demonstrate the potential to delineate additional high-grade gold mineralization along this newly acquired segment of the AFZ,” VP of Exploration, Melissa Render, said in a statement.
She explained that acquiring the adjacent mine site has increased the strike length along the AFZ by over 100 per cent.
“The acquisition of Labrador Gold’s Kingsway Project provides us with 13.5 kilometres of sparsely tested strike on the AFZ and an extensive pipeline of near-surface targets with several existing discoveries that exhibit gold mineralization characteristics identical to those observed at Queensway,” Render added.
Along with the large-scale Valentine Gold Mine being developed by Calibre Mining Corp (TSE: CXB) (OTCMKTS: CXBMF), these Central Newfoundland properties have drawn significant attention from investors.
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Iceberg Research says ‘where is the resource estimate?’
New Found has pulled numerous high-grade drill results from Queensway and its newly acquired adjacent project. One such notable intercept assayed last month contained 300 g/t Au over 5.1 metres.
However, the company recently attracted criticism for completing extensive amounts of drilling without releasing a resource estimate. The short seller firm Iceberg Research thinks that New Found has been deliberately misleading investors.
Iceberg says the lack of consistent gold mineralization throughout the Queensway property isn’t feasible for development. Drill results from the vast 1,660-kilometre site have been cherry picked, Iceberg believes.
Also, the firm says it is suspicious that New Found spent C$41 million on drill campaigns last year but won’t put together a C$300,000-dollar resource estimate.
“Any attempts to bring Queensway into production are likely to face major obstacles,” Iceberg concluded in its September report.
Nonetheless, Iceberg’s opinion on the matter hasn’t deterred many investors from taking an interest in Queensway.
The renowned Canadian precious metals investor, Eric Sprott, retains a 19 per cent stake in the company. He upped his stake by C$5 million within the past 12 months.
Certain investors have given New Found a Buy rating and high share target price too. Roth MKM set its target at C$9.00 in April, a highly optimistic prediction considering that they are currently only worth C$3.42.
Despite the optimism of some and all-time high price of gold, New Found shares have been sliding lately, dropping by over 43.5 per cent within the past year.
Calibre Mining is a sponsor of Mugglehead news coverage
rowan@mugglehead.com
