I'm Charlotte McCloud with the Investing News Network and this is Measured and Indicated, an executive interview series we're producing in partnership with the New York Stock Exchange. We're at the Precious Metals Summit in Beaver Creek and here today with me is Keith Boyle, CEO of New Found Gold. Thank you so much for being here.
Thank you, Charlotte.
Great to have you here and just to set the stage for our conversation here, I'm going to start with a little bit of a broad question for you. Where would you place gold in the cycle today?
Um, I would place it in what I would call the consolidation phase. Uh, look, gold is money. Uh my believe, gold's money and it follows well the devaluation of the Fiat currencies and so, um, you know, it did go up very quickly at the end of last year, uh through $5,000 and then it's come off since. And so I think we're in that consolidation phase before the next leg up and uh everything points to the direction that there's a next leg up.
Yeah, I think that is certainly how everybody feels and for that next leg that we we think is coming, is there any particular catalyst that you would expect to kick it off or or maybe more that confluence of factors that you're talking about?
If I knew the answer to that question, Charlotte, I probably wouldn't be sitting here with you right now.
That's probably, that's probably true. That's a very fair answer. All right. Well, good to know the state of the gold market in your mind and let's take a look at what's going on at the company as well. So, New Found Gold just declared commercial production at the Hammerdown Gold mine in Newfoundland. So, I wonder if you can talk about how you're defining commercial production and how much has been produced so far in 2026?
So in, I'll uh, I'll back up. So we released a PEA on Hammerdown back in March. And it outlined, you know, the production that we wanted to achieve. And so, um, through the year we ramped up that production. We built the mine and ramped up the production. And for us, it was important to be, I'll say on the conservative side to declare commercial production because there's just too many little variables when you have a small mine, single asset company and so forth. So, we wanted 60 days of getting the production rate, the grade, and the recovery at the mill so that once we hit that 60 days, uh we were in commercial production. So, Hammerdown is scheduled to produce about 20 to 25,000 ounces a year at an all-in sustaining cost of about $2,500, which should generate about 40 million bucks on average a a year of cash flow for us.
So that's the the future and I assume for 2026 is a lower number because you're you're ramping up.
Of course, annualized 20 to 25, yes.
Okay. Well, very exciting to have that going on. And we also want to talk about the Queensway gold project. So it sounds like it's on the way to production as well. Can you talk about the current status?
You bet. So Queensway is our flagship. And uh, the reason that we're able to advance the production quickly, we're we're targeting quarter four of 2027. So in about just over a year from now, first or to the mill, uh, the newly expanded Pine Cove mill, um, uh, in the fourth quarter of next year. And for us that's, we were able to advance it because we bought the mill. And so that that's uh what it is. We've uh, been um doing the transition from uh, Merrill Crow to a new gravity CIL circuit at Pine Cove and then the expansion will come uh starting in next year through to the end of uh, of 27. So Queensway looking to produce, you know, somewhere in the neighborhood of 100,000 ounces a year for that first three years because it's phased, start small first, and then with the cash flow from that 100,000 ounce a year producer, well, we're looking at over $300 million dollars a year. So that's a significant amount and we'll use that money to then grow the production to, you know, as high as 200,000 ounces. So that for us, that's, that's what we're focused on, but Hammerdown was a real help for us to get to that production.
I was going to ask, so this is the flagship, but it is actually coming online second, but that's the reason, that's the reason why.
That's the reason why. Yep.
Okay. Well, good to have that context. So, first or targeted for Q4 of next year, I believe is what you said and fully funded to that point.
Fully funded.
And then after that point, what is what would be the plan there for funding?
Well, then, well, then we're producing 100,000 ounces a year uh at Queensway. So we're looking corporately at about 100 to 125,000 ounces. And that'll generate over that $300 million dollars. So call it a billion dollars over three years, we'll use some of that money to then build a mill right at Queensway. And that'll be a larger mill to then mill the lower grade material. And so we'll, that's why we see that bump in production to over 200,000 ounces a year as a company. And from there, um it's all about the exploration uh after that to start filling in the back end of the mine life.
Yeah, I was going to ask you about the benefits of the phased approach. I think that we can certainly see how that's playing out, but anything further you'd add on that note?
Yeah, I mean, we did it because it was all about shareholder return. Um the CAPEX for phase one is 155 million. You can't go out and buy a uh 200,000 ounce a year producer for 155 million. Not going to happen. And so for us, it was using the the cash flow from that smaller start to unlock the higher production. So that that really it was all about shareholder return.
Makes a lot of sense. And you mentioned future exploration, there's, there's drilling at Queensway at the moment, some infill, some exploration drilling. So, can you talk a little bit more about that and the importance of that ongoing exploration as a company that's also mining?
Yeah. So over the last 18 months, we've really been focused on the infill and grade control and everything to do with the project, geotechnical, hydrogeological, et cetera. So it was really to get us Queensway advancing. But uh this summer, uh Melissa and her team uh started now looking further a field at some of the targets that had been generated from preliminary exploration or some drilling in the past. And so we'll keep uh, you know, uh looking at those targets and testing them to see, uh, well to find, you know, this is where luck comes into play, to find uh the next deposit that not only extends mine life, but could add to our overall 200,000 ounce a year producer.
Yes. And and just a quick follow up there. So for you moving forward for growth, would you be focused on exploration or the M&A angle? Because I know among the larger gold producers, there's certainly that focus on M&A versus going out and actually exploring.
Well, luckily, a large producer needs to do both, uh, just because if they want significant growth that'll affect their share price, they've got to buy. For us, what we're looking at is we're saying, well, look, we have one mine, well we'll have two mines, if you will, a couple hundred hundred thousand ounces of production. Uh we, our discovery cost now is about 100 bucks an ounce. To buy something is $5 to $700 an ounce. We're going to put the drills to the ground. And you never stop looking for M&A, but really, it makes all the sense in the world that if there, Mother Nature put something there, we we best unlock the best value for our shareholders by finding it.
Certainly, I think that does make a lot of sense. And I think relatedly, so you came to New Found Gold from Reunion Gold, where you were helping advance a discovery toward a sale. So how how does a company make a decision to sell versus advance the assets itself? Is there anything you can share on that note?
Well sure, like at Reunion, we had the team that could develop it. Yeah. So we put the team in place that could develop it. And along came an offer. It's not our decision, it's shareholders' decision whether or not they want to take that offer. And, you know, New Found is no different. Look, we have a team, we're executing on the, on the plan that we have and we're delivering on what we've promised. But if, uh, you know, a large or mid-tier operator came along and said, Hey, we want to buy you and put the right offer on the table, uh, that the shareholders accept, it's not our decision, it's the shareholders. Who am I to to argue that? We can execute, we're fully funded, we can execute. So that's the best shareholder value because they'll have to pay the premium for that.
Yeah, great, great way to explain that. I think that was uh that's very enlightening. I wonder if we can talk about the company's share price performance. So, often I hear when a company goes from being a developer to a producer, they get a share price re-rating. So and maybe perhaps especially in today's gold price environment. So, are you expecting that still to come?
Uh, I am. So, uh, Pierre Lassonde famously put out the Lassonde curve way back when. And uh, you know, you get the discovery, you get the big gain in value you in the hype. And then as you do the more drilling, you really don't get more value because you're in filling, you're, you're defining a deposit. And then you get at the bottom of the curve where, well, now you have to put together the technical studies and you have to show and then all of the risk around executing it comes up. And so that's where you then get to the bottom of the curve. We're kind of at the other side. We're just starting to come up the other side. Um commercial production at Hammerdown being one huge step in that direction. And so we do see a re-rate uh coming, you know, considering that uh in 2028, once Queensway's in production, we're looking at, you know, at these gold prices, uh over $300 million dollars a year of cash flow, a multiple of 10, 8, 10, 12 is normal, which would be a 3, 4 billion dollar company. Well, we're a one right now. So we would expect a re-rate, you know, in the, in the 18 to 24 months, uh the next 18 to 24 months uh in that neighborhood.
It sounds sounds reasonable. And I believe the company also recently did an uplisting to the TSX. So is that fitting in there? Maybe you can talk about the expected impact of that?
Well, I mean, we're growing up, you know, we're growing, like, you know, we were a child, we've become a mining company now and now we're growing into a larger mining company. The TSX is a good fit for that. And we'll also become eligible for some of the uh, indices which will get us even more, uh, you know, more volume and and more interest in our share price, which helps with that re-rate.
Yeah, so going, going through the life cycle. All right. Well, I think we can wrap it up there unless you had any final thoughts that you would want to leave investors with today?
No, I think uh, you know, for investors do your homework. Do your homework and uh however, I I'll say that uh you know, New Found is in that that sweet spot of the Lassonde curve that uh we, we would expect and we're we've delivered on everything we've promised and we'll continue to.
Well, thank you so much for coming on today to talk about the company and the market. This was great.
Thanks, Charlotte.
Of course. And once again, I'm Charlotte McCloud with the Investing News Network and this is Keith Boyle with New Found Gold.
