New Found Gold (TSXV: NFG; NYSEA: NFGC) is raising $56 million to continue exploration and drilling at its Queensway high-grade gold project 15 km west of Gander, N.L.
The property covers 1,662 sq. km along two fault zones. High-grade targets have been identified along 9.5 km of the Appleton Fault and 12.4 km of the JBP Fault.
A syndicate of underwriters led by BMO Capital Markets and Canaccord Genuity have agreed to buy, on a bought deal basis, more than 7.7 million charity flow-through shares of New Found at a price of $7.25 per share. The underwriters have been granted an additional 15% over-allotment, which if exercised in full, would add approximately $8.4 million more to the gross amount.
New Found is executing a 500,000-metre drill program at Queensway, which is pre-resource. Work has returned bonanza assays from several targets, including Monte Carlo, Keats, Iceberg, Lotto and Golden Joint. In fact, 17 zones have been identified along the Appleton Fault.
The best assay from that program was 430 grams gold per tonne over 5.3 metres in the Golden Joint zone, and the longest was 35.4 metres that returned 106 grams gold from the Keats Main zone.
Shares in New Found were down 13.1% to $5.17 on Tuesday afternoon in Toronto, valuing the company at $925.9 million. Its shares traded in a 52-week range of $4.41 and $7.60.
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