Business Wire
New Found Announces Acquisition of Royalty Interests Underlying Keats South and Several Additional Zones at Queensway
Business Wire
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In This Article:

Figure 1. Queensway North plan map including location of Golden Bullet royalty. (Graphic: Business Wire)
Figure 1. Queensway North plan map including location of Golden Bullet royalty. (Graphic: Business Wire)

VANCOUVER, British Columbia, July 30, 2024--(BUSINESS WIRE)--New Found Gold Corp. ("New Found" or the "Company") (TSX-V: NFG, NYSE-A: NFGC) is pleased to announce that it has entered into three royalty purchase agreements (the "Royalty Purchase Agreements") with arm’s length royalty holders (together, the "Vendors" and each, a "Vendor"), whereby New Found will purchase part of each Vendor’s royalty interest.

Highlights:

  • Pursuant to the Royalty Purchase Agreements, the Company will purchase, in aggregate, 0.6% of the Vendors’ 1.6% net smelter returns royalty on the Company’s Golden Bullet property (the "Royalty Interests"). New Found granted the Vendors the Royalty Interests under a Mining Option Agreement dated as of November 11, 2016 (the "Original Agreement").

  • Under the terms of the Royalty Purchase Agreements, as consideration for the Royalty Interests, New Found will pay $650,000 cash consideration and issue 100,000 common shares in the capital of the Company (the "Common Shares") to each Vendor, for an aggregate cash consideration of $1,950,000 and aggregate share consideration of 300,000 Common Shares.

  • The Company has the right to purchase the remaining 1% net smelter returns royalty from the Vendors for an aggregate price equal to $1,000,000 (the "Repurchase Price") by November 12, 2024, payable by (i) an aggregate of $100,000 and (ii) an additional $4,950, in the aggregate, per year until the Repurchase Price has been satisfied.

  • The Golden Bullet property covers a key target area on the Company’s Queensway Project including the extension of Keats South, as well as the TCH, Knob, Bullet, Rocket, and Quarry zones, (Figure 1).

  • This is the second such royalty purchase completed by New Found. In November of 2021, New Found acquired a 0.6% royalty underlying its Keats-Golden Joint-Lotto-Iceberg discovery area, leaving a minimal 0.4% royalty burden.

Greg Matheson, COO of New Found, stated: "Following this transaction, all significant mineralized zones along the Appleton Fault Zone will be covered by a minimal royalty burden. As shown in Figure 1 below, at Golden Bullet, we have the opportunity to remove all royalties by exercising our right to buy back the remaining 1% NSR. Golden Bullet encompasses the recent discovery of deep mineralization at Keats South, as well as several other notable zones along a 5km segment of the Appleton Fault. Immediately to the north, there is a small 0.4% royalty covering our remaining significant zones including Keats, Iceberg, Lotto, and Golden Joint. Too often mineral projects suffer from high royalty burdens, which can have significant negative effects on their future potential. Through careful consideration and working closely with the original optionors, we have avoided this potential pitfall and feel we are in a strong position to maximize the future potential of Queensway."

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