EX-99.2 3 tm2324718d1_ex99-2.htm EXHIBIT 99.2

 

Exhibit 99.2

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

The following discussion is management’s assessment and analysis of the results and financial condition of New Found Gold Corp. (the “Company” or “NFG”) and should be read in conjunction with the accompanying unaudited condensed interim financial statements for the three and nine months ended September 30, 2023 and September 30, 2022 and related notes. In addition, this MD&A should be read in conjunction with the audited annual financial statements and the related notes for the years ended December 31, 2022 and December 31, 2021. The MD&A covers the three and nine months ended September 30, 2023 and the subsequent period up to November 13, 2023, the date of issue of this MD&A. The financial data was prepared using accounting policies consistent with International Financial Reporting Standards (“IFRS”), as applicable to interim financial reports including International Accounting Standards 34 “Interim Financial Reporting” issued by the International Accounting Standards Board (“IASB”), and all figures are reported in Canadian dollars unless otherwise indicated. Please refer to the cautionary note regarding forward-looking statements and information within this Management’s Discussion & Analysis (“MD&A”) and the Risks Factors discussed in the Company’s most recent Annual Information Form on file with the Canadian provincial securities, regulatory authorities and Form 40-F on file with the U.S. Securities and Exchange Commission (the “SEC”).

 

This MD&A contains forward-looking information and forward-looking statements, within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of applicable Canadian securities legislation, (collectively, “forward-looking statements”), that involve numerous risks and uncertainties. The Company continually seeks to minimize its exposure to business risks, but by the nature of its business and exploration activities and size, will always have some risk. These risks are not always quantifiable due to their uncertain nature. Should one or more of these risks and uncertainties, including those described under the headings “Risks and Uncertainties” and “Cautionary Notes Regarding Forward-Looking Statements” materialize, or should underlying assumptions prove incorrect, then actual results may vary materially from those expressed or implied in forward-looking statements.

 

The technical content disclosed in this MD&A was reviewed and approved by Greg Matheson, P. Geo., Chief Operating Officer, and a Qualified Person as defined under National Instrument 43-101. Mr. Matheson consents to the publication of this MD&A, by NFG. The scientific and technical information in this MD&A relating to the Queensway Project is derived from, and in some instances is a direct extract from, and is based on the assumptions, qualifications and procedures set out in, the report entitled “January 2023 Exploration Update At New Found Gold Corp’s Queensway Gold Project in Newfoundland and Labrador, Canada” with an effective date of January 24, 2023, prepared by R. Eccles P.Geo of Apex Geoscience in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) (the “Queensway Technical Report”). Reference should be made to the full text of the Queensway Technical Report, which is available for review under the Company’s profile on SEDAR+ at www.sedarplus.ca.

 

Description of Business

 

The Company was incorporated on January 6, 2016, under the Business Corporations Act (Ontario). On June 23, 2020, the Company continued as a British Columbia corporation under the Business Corporation Act in the province of British Columbia. The Company’s head office is located at WeWork c/o New Found Gold Corp., 1600 – 595 Burrard Street, Vancouver, British Columbia V7X 1L4, and its registered office is located at Suite 3500, The Stack, 1133 Melville Street, Vancouver, British Columbia V6E 4E5. On August 11, 2020, the Company completed an initial public offering and listed on the TSX Venture Exchange under the symbol “NFG”. On September 29, 2021, the Company also listed its shares on the NYSE American stock exchange under the symbol “NFGC”.

 

The Company is a mineral exploration company engaged in the acquisition, exploration and evaluation of resource properties with a focus on gold properties located in Newfoundland and Labrador, Canada. The Company’s principal objective is to explore and develop the Queensway Project, which is located near Gander, Newfoundland and to identify other properties worthy of investment and exploration. For the purpose of NI 43-101, the Queensway Project is the Company’s only material property.

 

 - 1 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

The Queensway Project is comprised of 96 mineral licenses, including 6,659 claims comprising 166,475 ha of land located near Gander, Newfoundland. The Queensway Project is accessible by main access roads including the Trans-Canada Highway (“TCH”) that passes through the northern portion of the project and has high voltage electric transmission lines running through the project area. The Queensway Project is divided into two blocks, Queensway North (“QWN”) which is designated to the claim group north of Gander Lake and Queensway South (“QWS”) which is the property portion located south of Gander Lake.

 

As of the date of this MD&A, the Company’s Board of Directors consisted of the following: Collin Kettell (Executive Chairman), Vijay Mehta, Denis Laviolette, Ray Threlkeld and Douglas Hurst.

 

Additional information relating to the Company is available on the Company’s website at www.newfoundgold.ca.

 

Project Summary

 

Queensway Project, Newfoundland

 

Ownership

 

The Queensway project consists of licences that were acquired through 1) online map staking with the Government of Newfoundland, 2) the successful completion of a series of Option Agreements (9 Option Agreements), and 3) as part of a current Option Agreement announced on November 3, 2022. Some licences were acquired via a direct purchase agreement. The optioned lands also carry various net smelter royalties which are summarized in the table below. The current Option Agreement increased the property package by 551 individual claims totalling 13,775ha and added 6.1km of strike length on the Appleton Fault Zone. In 2022, NFG conducted additional map staking adding 4 new claims. By the end of Q3 2023 NFG increased the property package by 60 new claims expanding the Queensway project to 6,659 claims for a total of 166,475 ha.

 

 - 2 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Queensway Project mineral licence description and status (reported by blocks of contiguous licences/claims)

 

A)Queensway North Block

 

Licence No.  Title Holder  Location  No. of
Claims
  Area (km²)  Status  Issued Date  Renewal Date  Report Due
Date
  Annual
Minimum
Expenses Due
  Expenses Due
Date
  NSR
Royalty
(%)
  NSR
Buyback
Provision
(%)
006821M  New Found Gold Corp.  Gander River, Central NL  2  0.50  Issued  1999-05-17  2023-05-17  2023-07-17  $4,591.50  2026-05-17  2.5  1
007984M  New Found Gold Corp.  Glenwood, Central NL  50  12.50  Issued  1998-11-13  2023-11-13  2025-01-13    N/A  N/A  0.4  0
022216M  New Found Gold Corp.  Glenwood, Central NL  6  1.50  Issued  2014-06-12  2024-06-12  2024-08-12  $6,731.36  2032-06-12  1.6  1
022491M  New Found Gold Corp.  Gander Lake Area, Central NL  12  3.00  Issued  2014-11-06  2024-11-06  2025-01-06  $13,227.96  2032-11-06  1.6  1
023720M  New Found Gold Corp.  Glenwood, Central NL  4  1.00  Issued  2001-12-31  2024-01-01  2024-02-29  $7,657.67  2026-12-31  1  0
023721M  New Found Gold Corp.  Glenwood, Central NL  2  0.50  Issued  2001-12-31  2024-01-01  2024-02-29  $1,522.60  2025-12-31  1  0
023804M  New Found Gold Corp.  Glenwood, Central NL  12  3.00  Issued  2001-02-19  2023-02-20  2023-04-20  $12,313.65  2026-02-19  1.6  1
023860M  New Found Gold Corp.  Joe Batts Brook, Central NL  11  2.75  Issued  2016-04-07  2026-04-07  2024-06-06  $10,953.23  2033-04-07  0.6  0
023861M  New Found Gold Corp.  Joe Batts Pond, Central NL  16  4.00  Issued  2016-04-07  2026-04-07  2024-06-06  $15,931.97  2033-04-07  1  0
023862M  New Found Gold Corp.  Joe Batts Brook, Central NL  4  1.00  Issued  2016-04-07  2026-04-07  2024-06-06  $3,982.99  2033-04-07  0.6  0
023863M  New Found Gold Corp.  Joe Batts Brook, Central NL  11  2.75  Issued  2016-04-07  2026-04-07  2024-06-06  $10,953.23  2033-04-07  1  0
023864M  New Found Gold Corp.  Joe Batts Brook, Central NL  3  0.75  Issued  2016-04-07  2026-04-07  2024-06-06  $2,987.24  2033-04-07  1  0
023866M  New Found Gold Corp.  Joe Batts Brook, Central NL  4  1.00  Issued  2016-04-07  2026-04-07  2024-06-06  $1,966.33  2033-04-07  1  0.5
023874M  New Found Gold Corp.  Joe Batts Brook, Central NL  8  2.00  Issued  2016-04-11  2026-04-13  2024-06-10  $7,965.98  2033-04-11  1.6  1
023875M  New Found Gold Corp.  Joe Batts Pond, Central NL  3  0.75  Issued  2016-04-12  2026-04-13  2023-06-12  $2,700.00  2029-04-12  1.6  1
023881M  New Found Gold Corp.  Joe Batts Brook, Central NL  7  1.75  Issued  2016-04-21  2026-04-21  2023-06-20  $6,300.00  2029-04-21  1.6  1
023916M  New Found Gold Corp.  Gander Lake Area, Central NL  4  1.00  Issued  2016-05-05  2026-05-05  2024-07-04  $3,982.99  2033-05-05  1.6  1
023962M  New Found Gold Corp.  The Outflow, Central NL  9  2.25  Issued  2016-05-19  2026-05-19  2024-07-18  $7,039.56  2033-05-19  1.6  1
023987M  New Found Gold Corp.  Joe Batts Pond Area, Central NL  11  2.75  Issued  2016-06-07  2026-06-08  2024-08-06  $5,407.41  2033-06-07  1.6  1
024026M  New Found Gold Corp.  Joe Batts Pond Area, Central NL  6  1.50  Issued  2016-06-30  2026-06-30  2024-08-29  $2,949.50  2033-06-30  1.6  1
024031M  New Found Gold Corp.  Joe Batts Pond Area, Central NL  6  1.50  Issued  2016-06-30  2026-06-30  2023-08-29  $5,400.00  2029-06-30  1.6  1
024136M  New Found Gold Corp.  Gander River Area, Central NL  25  6.25  Issued  2016-09-13  2026-09-14  2024-11-12  $30,000.00  2033-09-13  0.4  0
024138M  New Found Gold Corp.  Gander Lake, Central NL  21  5.25  Issued  2016-09-15  2026-09-15  2024-11-14  $25,200.00  2033-09-15  1.6  1
024139M  New Found Gold Corp.  Gander Lake, Central NL  30  7.50  Issued  2016-09-15  2026-09-15  2024-11-14  $36,000.00  2033-09-15  1.6  1
024140M  New Found Gold Corp.  Joe Batts Pond, Central NL  2  0.50  Issued  2016-09-15  2026-09-15  2024-11-14  $2,400.00  2033-09-15  1.6  1
024141M  New Found Gold Corp.  Joe Batts Pond Area, Central NL  2  0.50  Issued  2016-09-15  2026-09-15  2024-11-14  $2,400.00  2033-09-15  1.6  1
024264M  New Found Gold Corp.  Joe Batts Pond Area, Central NL  4  1.00  Issued  2016-10-24  2026-10-26  2024-12-23  $4,800.00  2033-10-24  0.4  0
024265M  New Found Gold Corp.  Appleton, Central NL  12  3.00  Issued  2016-10-24  2026-10-26  2024-12-23  $14,400.00  2033-10-24  0.4  0
024266M  New Found Gold Corp.  Joe Batts Pond, Central NL  128  32.00  Issued  2016-10-24  2026-10-26  2024-12-23  $12,677.96  2032-10-24  0.4  0
024268M  New Found Gold Corp.  Millers Brook, Central NL  56  14.00  Issued  2016-10-24  2026-10-26  2024-12-23  $37,446.05  2032-10-24  1.6  1
024997M  New Found Gold Corp.  Glenwood Area, Central NL  21  5.25  Issued  2017-04-27  2027-04-27  2024-06-26  $10,323.24  2033-04-27  1.6  1
025008M  New Found Gold Corp.  Gander Lake, Central NL  13  3.25  Issued  2017-05-04  2027-05-04  2024-07-03  $12,944.72  2033-05-04  1  0
026074M  New Found Gold Corp.  Joe Batts Brook, Central NL  3  0.75  Issued  2018-05-31  2023-05-31  2024-07-30  $2,087.24  2033-05-31  2.2  1
030714M  New Found Gold Corp.  King's Point, Gander Lake  8  2.00  Issued  2020-05-02  2025-05-02  2024-07-01  $6,710.45  2033-05-02  1  0
035198M  Suraj Amarnani  Fourth Pond  168  42.00  Issued  2022-10-11  2027-10-11  2024-01-09  $33,600.00  2023-11-10  0  0
035681M  New Found Gold Corp.  The Outflow, Central NL  4  1.00  Issued  2023-03-16  2028-03-16  2024-05-15  $800.00  2024-03-16  0  0

 

 - 3 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

B)Queensway South Block

 

Licence No.  Title Holder  Location  No. of
Claims
  Area (km²)  Status  Issued Date  Renewal Date  Report Due
Date
  Annual
Minimum
Expenses Due
  Expenses Due
Date
  NSR
Royalty
(%)
  NSR
Buyback
Provision
(%)
022236M  New Found Gold Corp.  Southwest Gander River, Central NL  5  1.25  Issued  2014-06-12  2024-06-12  2023-08-11  $508.21  2023-06-12  1  0.5
022260M  New Found Gold Corp.  Southwest Gander River, Central NL  1  0.25  Issued  2014-06-13  2024-06-13  2024-08-12  $436.83  2024-06-13  1  0.5
022342M  New Found Gold Corp.  Southwest Gander River, Central NL  1  0.25  Issued  2014-08-25  2024-08-25  2024-10-24  $828.59  2025-08-25  1  0.5
023239M  New Found Gold Corp.  Pauls Pond, Central NL  2  0.50  Issued  2015-08-12  2025-08-12  2024-10-11  $1,187.57  2025-08-12  1  0.5
023495M  New Found Gold Corp.  Northwest Gander River, Central  NL  5  1.25  Issued  2015-11-19  2025-11-19  2024-01-18  $2,448.69  2023-11-19  1  0.5
023498M  New Found Gold Corp.  Northwest Gander River, Central  NL  8  2.00  Issued  2015-11-19  2025-11-19  2024-01-18  $3,882.09  2023-11-19  1  0.5
024435M  New Found Gold Corp.  Greenwood Pond, Central NL  7  1.75  Issued  2016-11-21  2026-11-23  2024-01-22  $1,428.47  2023-11-21  1  0.5
024436M  New Found Gold Corp.  Greenwood Pond, Central NL  3  0.75  Issued  2016-11-21  2026-11-23  2024-01-22  $1,277.65  2024-11-21  1  0.5
024557M  New Found Gold Corp.  Bear Pond, Central NL  250  62.50  Issued  2016-12-12  2026-12-14  2023-02-10  $105,663.21  2022-12-12  1  0
024558M  New Found Gold Corp.  Great Gull River, Central NL  239  59.75  Issued  2016-12-12  2026-12-14  2023-02-10  $100,989.75  2022-12-12  1  0
024559M  New Found Gold Corp.  Northwest Gander River, Central  NL  256  64.00  Issued  2016-12-12  2026-12-14  2023-02-10  $116,036.32  2022-12-12  1  0
024560M  New Found Gold Corp.  Careless Brook, Central NL  121  30.25  Issued  2016-12-12  2026-12-14  2024-02-12  $63,185.40  2023-12-12  1  0
024561M  New Found Gold Corp.  Eastern Pond, Central NL  256  64.00  Issued  2016-12-12  2026-12-14  2023-02-10  $69,687.96  2022-12-12  1  0
024562M  New Found Gold Corp.  Hussey Pond, Central NL  241  60.25  Issued  2016-12-12  2026-12-14  2023-02-10  $109,210.11  2022-12-12  1  0
024563M  New Found Gold Corp.  Eastern Pond, Central NL  236  59.00  Issued  2016-12-12  2026-12-14  2023-02-10  $99,717.74  2022-12-12  1  0
024565M  New Found Gold Corp.  Gander Lake, Central NL  12  3.00  Issued  2016-12-12  2026-12-14  2023-02-10  $1,509.68  2022-12-12  1  0
024566M  New Found Gold Corp.  Gander Lake, Central NL  125  31.25  Issued  2016-12-12  2026-12-14  2023-02-10  $60,031.83  2022-12-12  1  0
024567M  New Found Gold Corp.  Gander Lake, Central NL  106  26.50  Issued  2016-12-12  2026-12-14  2023-02-10  $50,830.46  2022-12-12  1  0
024568M  New Found Gold Corp.  Birch Pond, Central NL  254  63.50  Issued  2016-12-12  2026-12-14  2023-02-10  $107,360.90  2022-12-12  1  0
024569M  New Found Gold Corp.  Southwest Gander River, Central NL  221  55.25  Issued  2016-12-12  2026-12-14  2023-02-10  $106,523.78  2022-12-12  1  0
024570M  New Found Gold Corp.  Dennis Brook, Central NL  117  29.25  Issued  2016-12-12  2026-12-14  2023-02-10  $49,185.49  2022-12-12  1  0
024571M  New Found Gold Corp.  Winter Brook, Central NL  153  38.25  Issued  2016-12-12  2026-12-14  2023-02-10  $15,598.82  2022-12-12  1  0
025766M  New Found Gold Corp.  Pauls Pond, Central NL  163  40.75  Issued  2016-12-12  2026-12-14  2023-02-10  $68,720.03  2022-12-12  1  0
030710M  New Found Gold Corp.  Little Dead Wolf Pond  144  36.00  Issued  2020-05-02  2025-05-02  2024-07-01  $33,831.05  2024-05-02  1  0
030716M  New Found Gold Corp.  Third Berry Hill Pond  224  56.00  Issued  2020-05-02  2025-05-02  2024-07-01  $46,121.42  2024-05-02  0  0
030722M  New Found Gold Corp.  Hunt's Pond  149  37.25  Issued  2020-05-02  2025-05-02  2024-07-01  $35,005.74  2024-05-02  1  0
030726M  New Found Gold Corp.  Joe's Feeder Cove  5  1.25  Issued  2020-05-02  2025-05-02  2024-07-01  $1,347.81  2027-05-02  1  0
030727M  New Found Gold Corp.  Dead Wolf Brook  195  48.75  Issued  2020-05-02  2025-05-02  2024-07-01  $40,150.35  2024-05-02  1  0
030733M  New Found Gold Corp.  Rocky Brook  173  43.25  Issued  2020-05-02  2025-05-02  2024-07-01  $35,620.56  2024-05-02  1  0
030737M  New Found Gold Corp.  Caribou Lake  247  61.75  Issued  2020-05-02  2025-05-02  2024-07-01  $50,857.12  2024-05-02  1  0
030739M  New Found Gold Corp.  Great Gull River  224  56.00  Issued  2020-05-02  2025-05-02  2024-07-01  $39,274.23  2024-05-02  1  0
030740M  New Found Gold Corp.  Ribbon Ponds  1  0.25  Issued  2020-05-02  2025-05-02  2024-07-01  $192.39  2024-05-02  0  0
030741M  New Found Gold Corp.  Southwest Gander River Cove  2  0.50  Issued  2020-05-02  2025-05-02  2024-07-01  $265.12  2025-05-02  1  0
030742M  New Found Gold Corp.  Steeles Brook  32  8.00  Issued  2020-05-02  2025-05-02  2024-07-01  $5,610.61  2024-05-02  1  0
030745M  New Found Gold Corp.  Dead Wolf Brook  101  25.25  Issued  2020-05-02  2025-05-02  2024-07-01  $20,795.83  2024-05-02  1  0
030746M  New Found Gold Corp.  Southwest Islands View  3  0.75  Issued  2020-05-02  2025-05-02  2024-07-01  $672.68  2026-05-02  1  0
030747M  New Found Gold Corp.  Owl Pond  37  9.25  Issued  2020-05-02  2025-05-02  2024-07-01  $7,618.27  2024-05-02  1  0
030748M  New Found Gold Corp.  Southwest Pond  140  35.00  Issued  2020-05-02  2025-05-02  2024-07-01  $28,825.88  2024-05-02  1  0
030752M  New Found Gold Corp.  Miguel's Lake  78  19.50  Issued  2020-05-02  2025-05-02  2024-07-01  $16,060.14  2024-05-02  1  0
030753M  New Found Gold Corp.  Gander Lake  3  0.75  Issued  2020-05-02  2025-05-02  2024-07-01  $37.68  2025-05-02  1  0
030754M  New Found Gold Corp.  Little Gander Lake  172  43.00  Issued  2020-05-02  2025-05-02  2024-07-01  $35,414.66  2024-05-02  0  0
030755M  New Found Gold Corp.  Rocky Brook  30  7.50  Issued  2020-05-02  2025-05-02  2024-07-01  $6,176.98  2024-05-02  0  0
030756M  New Found Gold Corp.  Southwest Pond  88  22.00  Issued  2020-05-02  2025-05-02  2024-07-01  $18,119.14  2024-05-02  1  0
030763M  New Found Gold Corp.  Rocky Brook  45  11.25  Issued  2020-05-02  2025-05-02  2024-07-01  $9,265.46  2024-05-02  0  0
030765M  New Found Gold Corp.  Berry Hill Brook  124  31.00  Issued  2020-05-02  2025-05-02  2024-07-01  $25,531.50  2024-05-02  0  0
030768M  New Found Gold Corp.  Gander Lake Prime  149  37.25  Issued  2020-05-02  2025-05-02  2023-07-03  $39,040.07  2023-05-02  1  0
030771M  New Found Gold Corp.  Northwest Gander River  37  9.25  Issued  2020-05-02  2025-05-02  2024-07-01  $7,618.27  2024-05-02  1  0
030783M  New Found Gold Corp.  Little Dead Wolf Brook  41  10.25  Issued  2020-05-02  2025-05-02  2024-07-01  $9,632.45  2024-05-02  0  0
035087M  New Found Gold Corp.  Gander Lake Prime  2  0.50  Issued  2022-10-13  2027-10-13  2023-12-12  $400.00  2023-10-13  0  0
035338M  New Found Gold Corp.  Gillingham's Pond  53  13.25  Issued  2023-01-05  2028-01-05  2024-03-05  $10,600.00  2024-01-05  0  0
036670M  Alicia Moning  Careless Brook, Central NL  6  1.50  Issued  2023-10-26  2028-10-26  2024-12-25  $1,200.00  2024-10-26  0  0

 

 - 4 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

C)Twin Ponds Block

 

Licence No.  Title Holder  Location  No. of
Claims
  Area (km²)  Status  Issued Date  Renewal Date  Report Due
Date
  Annual
Minimum
Expenses Due
  Expenses Due
Date
  NSR
Royalty
(%)
  NSR
Buyback
Provision
(%)
024270M  New Found Gold Corp.  Island Pond, Central NL  107  26.75  Issued  2016-10-24  2026-10-26  2023-12-25  $13,350.26  2027-10-24  1.6  1
024274M  New Found Gold Corp.  Twin Ponds, Central NL  77  19.25  Issued  2016-10-24  2026-10-26  2023-12-25  $7,295.39  2027-10-24  1.6  1
035048M  Suraj Amarnani  Twin Ponds  42  10.50  Issued  2022-09-29  2027-09-29  2023-11-28  $8,400.00  2023-09-29  0  0

 

D)Ten Mile-Duder Lake Block

 

Licence No.  Title Holder  Location  No. of
Claims
  Area (km²)  Status  Issued Date  Renewal Date  Report Due
Date
  Annual
Minimum
Expenses Due
  Expenses Due
Date
  NSR
Royalty
(%)
  NSR
Buyback
Provision
(%)
035047M  Aidan ONeil  Ten Mile-Duder Lake  209  52.25  Issued  2022-09-29  2027-09-29  2023-11-28  $41,800.00  2023-09-29  0  0
035050M  Josh Vann  Ten Mile Lake  2  0.50  Issued  2022-09-29  2027-09-29  2023-11-28  $400.00  2023-09-29  0  0

  

E)South Pond Block

 

Licence No.  Title Holder  Location  No. of
Claims
  Area (km²)  Status  Issued Date  Renewal Date  Report Due
Date
  Annual
Minimum
Expenses Due
  Expenses Due
Date
  NSR
Royalty
(%)
  NSR
Buyback
Provision
(%)
035197M  Aidan ONeil  South Pond  130  32.50  Issued  2022-10-11  2027-10-11  2024-01-09  $26,000.00  2023-11-10  0  0
035209M  New Found Gold Corp.  South Pond  2  0.50  Issued  2022-11-10  2027-11-10  2024-01-09  $400.00  2023-11-10  0  0

 

F)Bellman's Pond Block

 

Licence No.  Title Holder  Location  No. of
Claims
  Area (km²)  Status  Issued Date  Renewal Date  Report Due
Date
  Annual
Minimum
Expenses Due
  Expenses Due
Date
  NSR
Royalty
(%)
  NSR
Buyback
Provision
(%)
030775M  New Found Gold Corp.  Bellman's Pond  1  0.25  Issued  2020-05-02  2025-05-02  2024-07-01  $221.43  2024-05-02  0  0

 

G)Little Rocky Brook Block

 

Licence No.  Title Holder  Location  No. of
Claims
  Area (km²)  Status  Issued Date  Renewal Date  Report Due
Date
  Annual
Minimum
Expenses Due
  Expenses Due
Date
  NSR
Royalty
(%)
  NSR
Buyback
Provision
(%)
030777M  New Found Gold Corp.  Little Rocky Pond, Gander River  114  28.50  Issued  2020-05-02  2025-05-02  2024-07-01  $26,782.91  2024-05-02  0  0

 

 - 5 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project – Claim Groups

 

 - 6 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project – Queensway North mineral licences, and the separate licences of Twin Ponds, Ten
Mile-Duder Lake, South Pond, Bellman’s Pond, and Little Rocky Brook

 

 - 7 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project – Queensway South mineral licences

 

 - 8 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project – Locations of Gold Prospects

 

 - 9 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Environmental and Exploration Permitting

 

NFG is responsible for obtaining all permits in accordance with the laws of Newfoundland and Labrador to conduct exploration activities at the Queensway Property. Exploration activities require approval from the Mineral Lands Division of the province’s Department of Industry, Energy, and Technology. These specify the activities that are allowed in the area; they are typically valid for one year and can be renewed.

 

The different permits and licence requirements in the province of Newfoundland and Labrador can include:

 

1.Exploration Approvals: An Exploration Approval Permit enables an exploration company to conduct prospecting, rock and soil geochemistry, line cutting, trenching, bulk sampling, airborne and/or ground geophysical surveys, fuel storage, ATV usage, diamond drilling, etc.

 

2.Water Use Licence: Activities that require water to be drawn from surface waterways or from aquifers require a Water Use Licence. These are typically valid for five years and can be renewed. These permits are no longer needed for drilling and trenching activities.

 

3.Licence to Occupy: Required if a camp location was to be used for a period longer than that which was allowed as part of the Exploration Approval Permit. This permit is obtained from the Provincial Department of Crown lands. These are typically valid for five years and can be renewed.

 

4.Section 39 Permit: When field activities occur within a Protected Public Water Supply Area (PPWSA), restoration requirements and constraints on field activities are stipulated in a “Section 39 Permit” that is typically valid for one year and can be renewed.

 

5.Section 48 Permit: If exploration activities include stream crossings and/or fording, or any work in and around any body of water, the Water Resources Management Division must be contacted to obtain a Section 48 Permit to Alter a Water Body under the Water Resources Act, 2002.

 

6.Forestry Permits: NFG shall contact the nearest Forest Management District Office to obtain the following permits prior to commencing any activity as required.

 

7.A commercial harvesting permit before the start of the exploration program if trees must be cut for access to exploration sites on Crown lands.

 

8.An operating permit if operations are to take place on forest land during the forest fire season (May-September).

 

9.During the forest fire season, a permit to burn must be obtained to ignite a fire on or within 300 m of forest land. NFG has never needed this permit.

 

10.Development Permit: Any activity that meets the definition of development under the Urban and Rural Planning Act, 2000, within a municipal planning area/boundary will require application and permit from the Municipality.

 

The table below summarizes the permits, licences and approvals that have currently been granted to NFG:

 

·Exploration Approvals (prefixed with E).
·Water Use Licences (prefixed with WUL).
·PPWSA Section 39 Permits (prefixed with PRO).
·Section 49 Permits to Alter a Water Body (prefixed with ALT).
·Other environmental permits.

 

 - 10 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Mineral licences 024557M, 024558M, 024561M, 024563M, 024568M, and 024570M, all of which lie in the south of Queensway South, are restricted from exploration activities from mid-May to early-July as this area is a spring habitat for Newfoundland caribou.

 

Mineral licence 035198M in Queensway North encloses two known archaeological sites and covers a portion of the Gander River which has high archaeological potential. As such, the Provincial Archaeology Office recommends a 100 m buffer along the Gander River, and 50 m buffers around the two known sites. The two known archaeological sites in UTM Zone 21N NAD83 are: 1) 662938 m Easting, 5435800.33 m Northing and 2) 670038.33 m Easting, 5439264.60 m Northing.

 

With respect to title, mineral licences: 035047M and 035197M, 035048M and 035198M, and 035050M are owned by Aidan O’Neil, Suraj Amarnani, and Josh Vann respectively. Hence, NFG mineral rights ownership of these licence areas and the mineral occurrences that may occur within them are subject to successful completion of conditions of a single Option Agreement in place.

 

 - 11 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Environmental permits, licences, and approvals.

 

Permit ID Expiry Date Area Activities
E220584 14-Nov-23 QWS Amended DDH at Paul's Pond and HVdc
E220530 16-Nov-23 QWS West Narrows Trenching
E220334 22-Nov-23 QWS Amend MEA for 11 Trenches outside PPWSA
PRO12874-2022 25-Nov-23 QWS Drilling & Trenching at Pauls Pond inside PPWSA
248883 9-Dec-23 QWN Mineral Exploration - TCH Appleton
EA 2106 18-Dec-23 QWN DDH
E220547 19-Dec-23 QWS 8 Trenches inside PPWSA
E210649 13-Jan-24 QWN Seismic Survey & Keats Trench
E210588 5-Feb-24 QWN Barge/Ice Drilling
PRO12988-2023 13-Mar-24 QWN Seismic and Keats Trenching
PRO12995-2023 21-Mar-24 QWS Trenching at West Narrows-Igloo City
E220320 25-May-24 QWN & QWS General Exploration
TVA-2 1-Dec-24 QWN General Exploration
E220608 12-Dec-24 QWN General Exploration VOA option
E230013 16-Jan-25 QWS Mag-VLF QWS
EA 2214 19-Oct-25 QWN Seismic Cutlines and Keats Trench
WUL-21-12147 15-Oct-26 QWS Camp Water Source
PRO11547-2020 20-Dec-26 QWN Mineral Exploration
E230126 9-Jun-25 QWN Trenching (4) at QWN (VOA)
E230127 9-Jun-25 QWS Trenching (9) at QWS (Outside PPWSA)
E230128 9-Jun-25 QWS Trenching (16) at QWS (Inside PPWSA)
E230240 15-Jun-25 QWN 2D Seismic along TCH
E230212 15-Jun-25 QWN Glaciology Test Pits - JBPFZ (H Pond)
ALT12387-2022 5-Feb-24 QWN Barge/Ice Drilling
E230301 10-Jul-25 QWN & QWS Queensway LiDAR Survey
PRO13181-2023 18-Jul-24 QWS Trenching (16) at QWS (Inside PPWSA)
E230319 22-Aug-25 QWS Golden Elbow DDH 1
E230321 22-Aug-25 QWS Golden Elbow Fly DDH 2
E230320 22-Aug-25 QWN VOA DDH
PRO12874-2022 24-Nov-24 QWS Drilling & Trenching at Pauls Pond inside PPWSA
ALT13337-2023 10-Oct-25 QWS Golden Elbow Fly DDH 2
E210699 18-Dec-23 QWN Amend/Extend QWN Drilling
PRO13141-2023 11-Oct-24 QWS Igloo City DDH (Mars)
E230355 19-Oct-25 QWS Till Trend & South Paul's Fly DDH
E230429 19-Oct-25 QWS 036670M Prospecting
GW13369-2023 26-Oct-23 QWS Bernard's Camp Water Wells
287006 26-Oct-23 QWN VOA DDH

 

Project Infrastructure

 

The main access roads include the TCH that passes through the southern portion of the Appleton Fault Zone (“AFZ”) / Joe Batts Pond Fault Zone (“JBPFZ”) claim areas on the QWN, and the Northwest Gander (“NWG”) road that extends along the western portion of the property from the TCH just west of Glenwood, to the south and west of Gander Lake on QWS.

 

 - 12 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Gravel woods access roads originally built for the forestry industry, such as the AFZ access, the JBPFZ access, the JBP road and the roads to the east of the steel bridge across the NWG River and across the bridge to the east of the Southwest Gander River extend through most of the property, with areas in the extreme SE and SW the most difficult to access. The SW area is best accessed by woods roads from Route 360, the Baie D’Espoir highway, that leaves the TCH at Bishop’s Falls, approximately 70km to the west of Glenwood.

 

Transportation availability includes the international airport at Gander which has bush plane and helicopter bases, a helicopter base in Appleton and shipping through the ports of Lewisporte and Botwood, 25km and 70km to the west respectively, and north of the TCH, both with good harbours although problems with winter shipping due to sea and pack ice.

 

Electricity is available from the NL provincial grid, which has three transmission lines through the Queensway Project as follows:

 

1)            A 350 kV HVdc direct current line which passes through the approximate centre of QWS licences;

 

2)Two 138 kV HVac transmission lines to the north of the TCH crossing the AFZ and JBPFZ trends on the QWN licences;

 

3)A 69 kV HVac transmission line that approximately parallels the TCH to the north across the AFZ and JBPFZ trends on the QWN licences and follows the TCH and secondary routes.

 

Historical Work

 

There has been over 29,200 metres of core in 238 holes drilled historically on the Queensway Project by Noranda, Rubicon and various operators from the mid 1980’s through to 2012. Historical core drilling has primarily occurred north of Gander Lake along the two principal fault structures the AFZ and JBPFZ; the exploration drilling has been spread out amongst individual zones with drilling along 5km of the AFZ targeting the Lotto, Powerline, Cokes, Keats, Dome, Trench 26, Road, Knob, Letha and Grouse zones. Drilling at the JBPFZ has focussed along 3km targeting the Pocket Pond and H-Pond zones and one drill hole targeting the 798 Zone. Significantly lesser number of drill holes have also targeted zones south of Gander Lake including the Paul’s Pond showing, Aztec and A-Zone extension and the Goose zone.

 

Throughout the 1980’s through mid-2000’s various operators and prospectors have completed surface geochemical sampling including tills, soils and rock samples. This amounts to roughly 2,500 till samples, over 14,000 soil samples and 6,000 rock samples spread across the large district scale project with concentrations of work around the many showings in the Queensway license group. This work has identified a number of gold in soil or gold in till anomalies that have led to surface gold discoveries or have yet to be explained with follow up exploration. Several locations throughout the project have defined surface float samples containing high grade gold mineralization some of which have led to surface gold occurrences while other locations have not been adequately explored to trace them to source.

 

Various historical ground geophysical surveys have been conducted throughout the Queensway Project with most of this work concentrated either along the AFZ, JBPFZ or in the region of the Paul’s Pond and Greenwood Pond showings in the QWS claim group. Over 50 different geophysical surveys including VLF, EM, MAG and IP have covered ground-based grids throughout the Queensway Project. Various anomalies have been identified and often limited follow up exploration has occurred.

 

A significant number of surface trenches have been conducted at the project with over 330 trenches. Many of the historical trenches have targeted soil and till anomalies with only some of these reaching bedrock; often the trenches not reaching bedrock have left both soil and till anomalies unexplained and open for further interpretation and exploration.

 

 - 13 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Project Geology

 

The Queensway Project is located within the Exploits subzone of the Dunnage zone and lies just to the west of the Gander River Ultramafic Complex (“GRUC”) fault, which is the Dunnage-Gander zones boundary. See figure below:

 

 

 

Queensway Project – Geological context of the Queensway Project Geological map from Colman-Sadd et al., 1990.

 

 - 14 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project- Integrated geological map of lithology, shear zones and gold showings in Queensway North.

 

It mostly comprises Cambrian to Silurian meta-sedimentary rocks of the Davidsville group (Williams et al., 1988; Colman-Sadd et al., 1990; Valverde-Vaquero et al., 2006; van Staal, 2007; O’Reilly et al., 2010). The Davidsville group is divided into the Outflow Formation and the Hunt’s Cove Formation. The property south of Gander Lake also includes the boundary between the Davidsville and Indian Island groups. The latter mainly comprises Silurian siliciclastic rocks, intruded by the Mount Peyton Intrusive suite.

 

There are over 100 gold showings/occurrences on and around the Queensway Project however the most notable mineralized zones in the Queensway Project are the JBPFZ which includes the H-Pond, Pocket Pond, Glass, Logan and Lachlan showings and the AFZ which includes the Dome, Little, Knob, Letha, Lotto, Grouse, Road, Bullet, Trench 26, Cokes, Powerline, Keats and Bowater showings.

 

 - 15 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

A number of gold mineralized occurrences also occur within the QWS claim group including the Greenwood Pond, Hornet, North Pauls Pond, Aztec, Goose, Road Gabbro and LBNL showings.

 

Recent Exploration

 

Queensway Drill Program

 

On August 17, 2020, the Company announced it had initiated a 100,000m HQ-size diamond drilling program at the Queensway Project. The Company announced on January 6, 2021, that it had increased the drilling program started in 2020 to a total of 200,000m; this program was further expanded on October 15, 2021, to 400,000m and once again on January 3, 2023, to 500,000m; this program is ongoing, and the Company currently has 8 drills operating in Q3 2023.

 

In 2020, the Company completed 66 drill holes for a total of 13,400m that expanded the Keats zone and lead to the discovery of Lotto and Golden Joint zones.

 

In 2021, the Company completed an additional 391 drill holes totalling 117,043m largely focused on expanding Keats, Golden Joint, Lotto, 1744 and Pocket Pond zones.

 

In 2022, a total of 187,770m was completed in 676 holes that lead to the discoveries of Keats North, Keats West, Lotto North and further expanded Keats, Golden Joint and Lotto zones in addition to continued systematic testing along the AFZ. The Company has also completed a regional diamond drilling program designed to test high-priority targets at both Twin Ponds and QWS projects; both programs are the first phase of drilling completed by the Company. The QWS program consisted of 33 HQ-sized diamond drill holes totalling 7,255m covering an area 50km south of the Keats Zone with a high concentration of gold anomalies surrounding the southern extension of the AFZ. This program generated encouraging results with twenty-seven holes returning significant gold mineralization and 10 holes across 4 targets containing visible gold. The exploration drilling program was designed to test a variety of targets in and around Paul’s Pond, Goose, Eastern Pond and Greenwood #2 prospects. A first phase of drilling was also completed on the Twin Ponds property consisting of 1,508m in 7 diamond drill holes testing early-stage exploration targets.

 

The current drilling program is designed to test multiple exploration targets and zones along the 9.45km of the AFZ and 12km of the JBP Fault Zone at Queensway North. The primary focus is on the expansion of known zones of mineralization and systematic drilling within the prospective corridor surrounding the AFZ to identify new zones of gold mineralization. Meters have been allocated to regional programs at both QWS and the newly optioned VOA property that added an additional 6.1km of strike on the AFZ. Diamond drilling programs are testing drill-ready targets generated through various exploration activities that have been ongoing over the past few years and follow-up on the results of the 2022 QWS drill program.

 

The majority of drilling to date has occurred along the AFZ with drill counts ranging from 8-15 and a project-wide year-to-date total of 496,426m has been completed in 2,070 holes. The breakdown of meters drilled to date at QWN is as follows: 443 drill holes at the Keats prospect totalling 124,814m, 124 holes at the Keats North prospect totalling 30,269m, 153 holes at the Keats West prospect totalling 30,950m, 118 holes at Iceberg prospect totalling 29,226m, 84 at Iceberg East prospect totally 17,602m, 142 holes at the Golden Joint prospect totalling 35,154m, 110 drill holes at the Lotto prospect totalling 29,218m, 87 drill holes at Lotto North prospect totalling 20,684m, 118 drill holes at the Monte Carlo prospect totalling 25,526m, 104 drill holes at the Zone 36/K2 prospect totalling 17,530m, 49 holes at the Jackpot prospect totalling 8,135m, 67 holes at the Everest prospect totalling 15,644m, 59 drill holes at the Knob/Rocket prospect totally 11,321m and 52 drill holes at the TCH prospect totalling 15,388m, with the balance of 184 drill holes totalling 41,051m completed at other zones/targets along the AFZ including the K2 West, Gambit, Cokes, Little-Powerline, Road, Dome, Grouse Lonely Mountain and Big Dave.

 

 - 16 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

The Company has also completed follow-up drilling along the JBP Fault Zone with 99 holes totalling 26,681m completed to date at the 798, 1744 and Pocket Pond prospects.

 

At QWS, drilling is ongoing targeting the southern extension of the AFZ and meters drilled to date is 14,753m in 66 drill holes.

 

 - 17 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project –Knob to Everest plan map (October 23, 2023)

 

 - 18 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Keats Zone Drilling

 

To date the Company has focused significant drilling efforts at the Keats Zone where a discovery hole in late 2019 (NFGC-19-01) was drilled. In August 2020, as follow-up to the 2019 drill program, NFGC began incrementally stepping out with diamond drilling from NFGC-19-01 identifying a brittle fault zone known as the “Keats-Baseline” (“KBFZ”) that has an east-northeast strike (N55°E) and dips to the southeast at approximately 60°. This brittle fault zone lies to the east of the AFZ and runs slightly oblique to it. The KBFZ forms an extensive damage zone that controls the development of a complex network of brittle, high-grade gold vein arrays that are epizonal in character.

 

Several significant gold assay intercepts have been encountered within multiple individual zones hosted by the KBFZ including 21.4 g/t Au over 8.05m and 14.9 g/t Au over 12.85m in NFGC-21-204 (reported on June 15, 2021), 21.1 g/t Au over 7.20m in NFGC-21-464 (reported on April 11, 2022), 124.4 g/t Au over 17.70m in NFGC-20-59 (reported on May 4, 2021), 9.12 g/t Au over 8.20m and 42.6 g/t Au over 11.75m in NFGC-22-593 (reported on June 6, 2022) and the discovery hole, NFGC-19-01 yielding 86.2 g/t Au over 20.50m (reported on January 28, 2020). The KBFZ has now been defined over a 1.9km strike connecting through to the recent discoveries at Iceberg and Iceberg-East and down to a maximum tested vertical depth of 450m.

 

A variety of fault and vein orientations have been encountered within and surrounding the KBFZ, forming a complex network of high-grade vein splays bifurcating from the KBFZ and the AFZ and producing several high-grade domains that plunge in varying orientations. Two vein orientations dominate, with the most prominent orientation being approximately parallel to the orientation of the KBFZ.

 

Cross-cutting the Keats Main zone and forming important constituents of the KBFZ network are several conjugate brittle faults that are gold-rich and that create lenses of high-grade gold mineralization. Examples of such structures are the Umbra, Penumbra, Solstice, Eclipse, and 421 zones. It is important to note that both the Umbra and Penumbra structures strike north-south and can be traced through the Keats North prospect and play an important role in concentrating gold at Keats North and the northeast end of the Keats Main Zone.

 

In 2023, exploration testing at depths greater than 400m vertical was largely postponed in anticipation of the 3-D seismic data that will assist with targeting deeper, in the meantime the focus remains on near-surface discoveries such as the “421 Zone.” Initially discovered in April 2022, and located at the south end of the Keats Main Zone, the 421 domain of high-grade gold is controlled by the intersection of a series of south-to-southwest dipping gold-bearing structures that cover an area 160m wide with the KBFZ.

 

Early drilling into 421 returned the highlight intervals of 4.49 g/t Au over 3.55m and 7.85 g/t Au 4.85m in NFGC-21-421 (reported on April 11, 2022) and 4.31 g/t Au over 2.25m and 2.57 g/t Au over 10.40m in NFGC-21-467 (reported on April 11, 2022); 11.2 g/t Au over 2.10m in NFGC-22-486 (reported on June 6, 2022), 10.5 g/t Au over 2.30m in NFGC 22-733 (reported on January 18, 2023) and 4.59 g/t Au over 14.90m in NFGC-22-845 (reported on January 18, 2023).

 

More recently at 421, the highlight results of 101 g/t Au over 2.75m in NFGC-23-1089 (reported on July 24, 2023), 11.50 g/t Au over 8.90m in NFGC-23-1182 (reported on July 24, 2023), and 17.8 g/t Au over 8.30m in NFGC-23-1130 (reported on September 20, 2023) were intersected as part of a follow-up program targeting the previously reported high-grade interval of 4.59 g/t Au over 14.90m in NFGC-22-845. These intervals span a high-grade domain approximately 90m wide with vertical depths ranging from 70m-130m within a broader series of gold-bearing structures that is 160m wide that make up the 421 Zone.

 

On August 2, 2023, the Company announced the first results of a program that re-entered and extended several drill holes originally targeting the Keats Main Zone into the Keats Footwall (“FW”) domain, the area between the KBFZ and the AFZ. 104 g/t Au over 2.75m in NFGC-21-393 EXT was intersected in the Keats FW Zone at a vertical depth of 300m. This domain of high-grade located immediately east of the AFZ, is known as the “Paradox” vein. Other notable intervals from this vein include 119 g/t Au over 2.40m in NFGC-21-375 (reported on April 11, 2022) located 190m up-dip, 6.66 g/t Au over 5.90m in NFGC-21-342 (reported on April 11, 2022) located 220m up-dip and 25m along strike to the northeast and 21.9 g/t Au over 2.50m in NFGC-20-73 (reported on March 10, 2021) located a further 25m to the northeast. Paradox vein parallels the AFZ and remains open in all directions while several drill holes from this extension program are pending assays.

 

 - 19 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Additional near-surface drilling at the Keats Zone is underway utilizing a barge on South Hermans Pond. Approximately 10,000m is planned and targeting segments of the KBFZ and adjacent structures that were not reachable by land.

 

On August 16, 2023, NFGC announced the commencement of a trenching program designed to expose nearly 200m of strike over a 70m wide area, roughly corresponding to the known surface expression of the Keats Main Zone. An update provided on August 24, 2023, communicated that the trench is currently 85% completed and that a detailed mapping program is now underway that will provide critical geological information used to validate the current geological model. Accompanying detailed sampling will provide the information necessary for understanding the controls on mineralization at Keats, as well as lend clues to how the Keats Zone formed which will aid in future targeting. Prior to the Keats trench, the Keats Zone had only ever been observed in drill core and modelled in 3D, forming the basis of the Company’s geological model. As expected, the trench has revealed an extensive network of veins as well as the related Keats-Baseline Fault Zone and initial observations closely mirror our working model, but with added detail, including the presence of visible gold in areas where it was not previously identified by nearby drilling.

 

2023 assay results have been reported in press releases dated January 18, 2023, July 24, 2023, August 2, 2023, August 16, 2023, August 24, 2023, and September 20, 2023, found through SEDAR+.

 

 - 20 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Highlighted assay values and drill hole locations from Keats drilling are shown in the tables below:

 

Hole No. From (m) To (m) Interval (m) Au (g/t) Zone
NFGC-21-393 EXT2 450.00 452.75 2.75 104.36 Keats FW
Including 452.00 452.75 0.75 380.00
NFGC-22-7332 22.30 24.60 2.30 10.45 421
Including 22.80 23.30 0.50 46.80
NFGC-22-7741 364.00 366.45 2.45 25.31 Keats Main S
Including 365.00 366.00 1.00 60.50
And 379.80 382.00 2.20 72.66
Including 379.80 380.35 0.55 290.00
NFGC-22-8453 115.00 129.90 14.90 4.59 421
Including 120.00 121.00 1.00 26.17
Including 129.00 129.90 0.90 11.50
NFGC-22-8724 362.55 365.00 2.45 14.44 Keats Main
Including 362.55 363.05 0.50 68.20
NFGC-23-10892 158.15 160.90 2.75 100.65 421
Including 158.15 158.65 0.50 549.19
NFGC-23-11302 102.70 111.00 8.30 17.83 421
Including 102.70 103.35 0.65 66.96
And including 108.00 110.00 2.00 44.33
NFGC-23-11824 185.45 194.35 8.90 11.50 421
Including 187.00 188.00 1.00 80.80

 

Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 170% to 95%, 240% to 70% and 310% to 40% of reported intervals. 4True widths are unknown at this time. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional uncertainty in true width. As of March 1, 2023, composite intervals reported carry a minimum weighted average of 1 g/t Au diluted over a minimum core length of 2m with a maximum of 4m consecutive dilution when at depths above 200m vertical depth and 2m consecutive dilution when below 200m vertical depth. Prior to this date, all composites allowed for 2m consecutive dilution. Included high-grade intercepts are reported as any consecutive interval with grades greater than 10 g/t Au. Grades have not been capped in the averaging and intervals are reported as drill thickness.

 

Hole No.  Azimuth (°) Dip (°) Length (m) UTM E UTM N Prospect
NFGC-21-393 299 -45.5 702 658119 5427261 Keats
NFGC-22-733 354 -66 485 657841 5427082 Keats
NFGC-22-774 300 -45 458 657770 5426683 Keats
NFGC-22-845 300 -45 216 657767 5426977 Keats
NFGC-22-872 116 -46 417 657887 5427611 Keats West
NFGC-23-1089 300 -45 308 657755 5426956 Keats
NFGC-23-1130 300 -45 203 657778 5427033 Keats
NFGC-23-1182 332 -45 322 657775 5426945 Keats

 

 - 21 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

The latest drilling results are shown on the long section, plan map and cross sections below:

 

 

 

Queensway Project – Long section of Iceberg, Keats Main and TCH zones, looking northwest (September 20, 2023)

 

 - 22 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project – Keats Trench plan view map, excavation progress as of September 28, 2023.

 - 23 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project – Keats area plan view map (July 24, 2023)

 

 - 24 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project – Keats cross-section (B-B’), looking northeast, +/- 12.5m (October 18, 2022)

 

 

 

Queensway Project – Keats cross-section (C-C’), looking northeast, +/- 12.5m (October 18, 2022)

 

 - 25 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Keats North Drilling

 

Reconnaissance drilling working in the highly prospective region between the Keats Main and Golden Joint zones (“Keats North”) intersected significant mineralization, now named the “515 Zone”, returning initial intercepts of 9.21 g/t Au over 2.15m and 43.9 g/t Au over 3.85m in NFGC-22-515 (reported on April 13, 2022) approximately 440m north of the Keats Main Zone. Following this discovery, reconnaissance drilling in this region identified additional near-surface high-grade gold mineralization with the intercept of 275 g/t Au over 2.15m in NFGC-22-538 (reported on May 4, 2022) which occurs at a vertical depth of 22m adjacent to the AFZ and is approximately 65m north of the Keats Zone.

 

On August 2, 2022, the Company announced results from continued exploration in the Keats North target region defining multiple high-grade veins that define a corridor over a strike length of approximately 630m long x 150m wide linking up the north end of Keats with the 515 Zone. Noteworthy intervals in these veins include 45.9 g/t Au over 2.75m in NFGC-22-578 (Umbra), 19.3 g/t Au over 2.05m in NFGC-22-610 (Umbra), 40.6 g/t Au over 2.00m in NFGC-22-586 (Enigma), 24.1 g/t Au over 2.20m in NFGC-22-580 (Enigma) and 13.2 g/t Au over 2.05m and 10.7 g/t Au over 2.70m in NFGC-22-559 (Enigma).

 

Ongoing exploration work at the Keats North prospect further defined this complex network of gold-bearing veins and associated structures largely focussed on expanding mineralization to depths of up to 200m vertical at Enigma, Umbra and Penumbra with additional highlight intervals of 18.95 g/t Au over 5.75m in NFGC-22-665 (reported on September 1, 2022), 117 g/t Au over 2.00m in NFGC-22-728 (reported on December 5, 2022), 36.5 g/t Au over 2.15m in NFGC-22-762 (reported on December 5, 2023), 7.63 g/t Au over 5.25m in NFGC-22-700 (reported on December 5, 2022), 28.8 g/t Au over 3.45m in NFGC-22-855 (reported on January 24, 2023), 18.2 g/t Au over 2.65m in NFGC-22-901(reported on April 18, 2023), 14.4 g/t Au over 2.10m in NFGC-22-880 (reported on April 18, 2023) and 16.0 g/t Au over 2.50m and 10.8 g/t Au over 2.15m in NFGC-22-852 (reported on April 18, 2023).

 

These significant intervals along with many others occur largely within and around the Umbra, Penumbra, and Enigma structures, see figure below, however, others fall outside into new structural splays; these zones remain open. Drilling the top 200m vertical at Keats North is largely complete with the exception of a few areas that will be tested using the barge-supported drill rig. Follow-up drilling will focus on expanding these zones to depth.

 

On January 24, 2023, the Company reported a new vein intersected midway between Keats North and Golden Joint reporting 50.3 g/t Au over 2.45m in NFGC-22-766, follow-up drilling is required.

 

2022 and 2023 assay results have been reported in press releases dated April 13, 2022, May 4, 2022, August 2, 2022, September 1, 2022, December 5, 2022, January 24, 2023, and April 18, 2023, found through SEDAR+.

 

 - 26 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Hole No. From (m) To (m) Interval (m) Au (g/t)
NFGC-22-5151 198.50 200.65 2.15 9.21
Including 199.25 199.75 0.50 38.9
And3 209.00 212.85 3.85 43.9
Including 209.00 210.65 1.65 76.0
Including 211.35 212.35 1.00 43.1
NFGC-22-5382 32.45 34.60 2.15 275
Including 33.10 33.90 0.80 738
NFGC-22-5593 131.95 134.00 2.05 13.2
Including 133.00 134.00 1.00 24.7
And3 148.00 150.70 2.70 10.7
Including 148.00 149.70 1.70 14.9
NFGC-22-5701 23.60 26.20 2.60 10.72
Including 25.00 26.20 1.20 22.8
NFGC-22-5774 34.20 36.80 2.60 12.9
Including 36.15 36.80 0.65 48.9
NFGC-22-5783 22.55 25.30 2.75 45.9
Including 22.55 23.35 0.80 142.0
NFGC-22-5801 52.00 54.20 2.20 24.1
Including 53.20 53.70 0.50 105.5
NFGC-22-5863 48.00 50.00 2.00 40.6
Including 49.45 50.00 0.55 147.5
NFGC-22-6101 46.55 48.60 2.05 19.3
Including 47.75 48.30 0.55 65.6
NFGC-22-6652 46.6 52.35 5.75 18.95
Including 48.25 48.85 0.6 162.5
NFGC-22-7003 165.90 171.15 5.25 7.63
Including 168.95 170.55 1.60 18.82

 

 - 27 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

NFGC-22-7282 249.20 251.20 2.00 116.93
Including 250.15 250.80 0.65 358.07
NFGC-22-7541 118.00 122.25 4.25 5.68
Including 118.00 118.80 0.80 14.30
Including 121.50 122.25 0.75 11.65
NFGC-22-7623 52.50 54.65 2.15 36.49
Including 53.35 54.00 0.65 115.00
NFGC-22-7662 206.85 209.30 2.45 50.30
Including 207.20 208.15 0.95 129.50
NFGC-22-7963 230.95 235.10 4.15 7.41
Including 230.95 231.45 0.50 35.90
Including 234.50 235.10 0.60 10.20
And3 240.40 242.65 2.25 17.06
Including 240.40 241.40 1.00 38.10
NFGC-22-8133 22.00 36.10 14.10 2.13
Including 22.55 23.60 1.05 15.67
NFGC-22-8253 120.00 122.00 2.00 20.82
Including 120.00 121.00 1.00 41.33
And3 140.00 142.00 2.00 4.07
And3 198.30 200.85 2.55 11.55
Including 199.90 200.85 0.95 30.91
NFGC-22-8523 161.95 164.45 2.50 16.00
Including 162.90 163.45 0.55 69.10
And3 171.50 173.65 2.15 10.76
Including 172.50 173.05 0.55 40.50
NFGC-22-8553 117.55 121.00 3.45 28.82
Including 117.55 118.65 1.10 85.85
NFGC-22-8802 173.75 175.85 2.10 14.43
Including 174.50 174.95 0.45 64.00
NFGC-22-9013 181.65 184.30 2.65 18.17
Including 182.80 183.20 0.40 98.70

 

Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 170% to 95%, 240% to 70% and 310% to 40% of reported intervals. 4True widths are unknown at this time. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional uncertainty in true width. As of March 1, 2023, composite intervals reported carry a minimum weighted average of 1 g/t Au diluted over a minimum core length of 2m with a maximum of 4m consecutive dilution when at depths above 200m vertical depth and 2m consecutive dilution when below 200m vertical depth. Prior to this date, all composites allowed for 2m consecutive dilution. Included high-grade intercepts are reported as any consecutive interval with grades greater than 10 g/t Au. Grades have not been capped in the averaging and intervals are reported as drill thickness.

 

 - 28 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Hole No. Azimuth (°) Dip (°) Length (m) UTM E UTM N
NFGC-22-515 299 -45.5 281 658344 5428026
NFGC-22-538 300 -45 386 658193 5427710
NFGC-22-559 300 -45 333 658233 5427628
NFGC-22-570 300 -45 72 658199 5427720
NFGC-22-577 300 -45 260 658244 5427852
NFGC-22-578 300 -45 117 658258 5427556
NFGC-22-580 300 -45 110 658188 5427698
NFGC-22-586 300 -45 332 658162 5427669
NFGC-22-610 300 -45 312 658283 5427571
NFGC-22-665 300 -45 159 658226 5427762
NFGC-22-700 300 -45 374 658204 5427616
NFGC-22-728 300 -45 260 658237 5427597
NFGC-22-754 120 -45 134 658092 5427940
NFGC-22-762 300 -45 245 658261 5427727
NFGC-22-766 230 -45 327 658523 5428283
NFGC-22-796 300 -45 353 658218 5427580
NFGC-22-813 300 -62 158 658243 5427825
NFGC-22-825 300 -45 443 658126 5427602
NFGC-22-855 300 -45 410 658180 5427572
NFGC-22-880 300 -45 416 658278 5427862
NFGC-22-901 300 -45 227 658278 5427920

 

A selection of highlight drilling results is shown in the inclined 3-D image below for Keats North:

 

 

 

Queensway Project – Keats, Keats West, and Keats North inclined 3-D plan view map (December 5, 2022)

 

 - 29 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Iceberg and Iceberg East Drilling

 

On March 1, 2023, the Company announced the discovery of a new zone, “Iceberg”.  This zone is found along the highly prolific Keats-Baseline Fault Zone (“KBFZ”), the structure that is host to the Keats Main Zone. Iceberg shares a similar orientation to Keats Main and is comprised of a multitude of intersecting veins concentrating high-grade gold mineralization. Geological characteristics of Iceberg are nearly identical to those observed at Keats Main and the Company’s current interpretation is that Iceberg is the eastern continuation of Keats Main that has been displaced by faulting.

 

This new discovery has expanded rapidly, and step-out drilling has continued to intersect high-grade gold along strike to the east, which is an area now known as Iceberg East. The Iceberg-Iceberg East segment is now defined over a strike length of 665m, spotlighting the continued strength of the gold system within the KBFZ that includes Keats, Iceberg, and Iceberg East – a corridor that now spans 1.9km in strike length. The high-grade gold mineralization starts at surface and is currently extended to a vertical depth of 170m. Minimal exploration work has been completed below 200m vertical depth with the deepest drilling completed to date intersecting the structure and gold mineralization at 270m vertical.

 

Initial drilling collared into mineralization in NFGC-22-1084 with 15.3 g/t Au over 10.75m, while a 25m step-out south intersected 72.2 g/t Au over 9.65m in NFGC-23-1100, and a 25m step-out north intersected 19.7 g/t Au over 5.65m in NFGC-23-1109 (all reported on March 1, 2023). All three intercepts are shallow, occurring at depths of less than 30m from surface. Stepping down 25m from this fence of three discovery holes, drilling then intersected 49.7 g/t Au over 29.85m and 14.6 g/t Au over 3.80m in NFGC-23-1120 (reported on March 13, 2021) followed by the expansion of this zone down-dip to 80m with the highlight intervals of 13.1 g/t Au over 13.90m and 12.6 g/t Au over 7.60m in NFGC-23-1128 and 35.6 g/t Au over 10.65m, 6.88 g/t Au over 20.35m and 10.5 g/t Au over 6.65m in NFGC-23-1141 (both reported on April 4, 2023).

 

On May 31, 2023, the Company announced the largest step-out yet into the KBFZ of 375m, along strike from Iceberg at Iceberg East, intersecting 21.7 g/t Au over 4.45m in NFGC-23-1285. Continued step-out drilling at Iceberg East further expanded this zone by an additional 100m with the intercept of 4.66 g/t Au over 2.70m in NFGC-23-1307 (reported on June 15, 2023) bringing the total strike length of the Iceberg-Iceberg East segment to it’s current 665m. Continued shallow drilling at Iceberg East within the KBFZ has identified additional high-grade, near surface mineralization as demonstrated by the intercepts of 15.5 g/t Au over 7.55m in NFGC-23-1274 (reported on September 28, 2023), 46.8 g/t Au over 10.55m in NFGC-23-1541, 115 g/t Au over 4.10m in NFGC-23-1570 (both reported on September 13, 2023) and 6.65 g/t Au over 10.10m in NFGC-23-1586 and 32.4 g/t Au over 2.55m in NFGC-23-1599 (both reported on October 25, 2023) located at the furthest known extents of the KBFZ.

 

At Iceberg, ongoing step-out drilling continued to demonstrate excellent continuity of the high-grade both along strike and down-dip with several highlight intervals reported in Q2 and Q3 which are summarized in the table below including the stand-out interval of 105 g/t Au over 27.05m in NFGC-23-1210 located 35m from surface at Iceberg and 32m along strike of NFGC-23-1120 and 30m down-dip of NFGC-23-1084. More recently reported along strike to the northeast of NFGC-23-1210, the intervals of 14.5 g/t Au over 27.80m and 34.6 g/t Au over 5.30m in NFGC-23-1312 (reported on July 5, 2023), 14.0 g/t Au over 9.00m in NFGC-23-1088 (reported on October 25, 2023), 29.4 g/t Au over 7.75m in NFGC-23-1380 and 86.9 g/t Au over 5.30m in NFGC-23-1395 (both reported on August 22, 2023) were intersected.

 

Drilling at both Iceberg and Iceberg East has also been highly successful at expanding the high-grade gold mineralization down-dip, while the majority of the exploration completed to date has been focused in the top 150m-200m vertical. Depth continuity is well demonstrated by the reported interval of 19.6 g/t Au over 5.25m in NFGC-23-1217 intersected at a vertical depth of 137m, the deepest intercept at this time which was quickly replaced by NFGC-23-1261A intersecting 26.0 g/t Au over 9.45m extending the drill-defined vertical depth from 137m to 160m (reported on September 8, 2023) followed by 167 g/t Au over 4.70m in NFGC-23-1157 (reported on August 9, 2023) which further extended the high-grade to 170m vertical depth. The highlight intervals of 33.1 g/t Au over 4.80m, 39.2 g/t Au over 4.30m, 1.26 g/t Au over 26.25m and 9.72 g/t Au over 20.25m in NFGC-23-1306 (reported on July 5, 2023) occurring at a vertical depths ranging from 90-145m and 50m down-dip of previously released 49.7 g/t Au over 29.85m in NFGC-23-1120 further demonstrated the good continuity of high-grade to depth at Iceberg.

 

 - 30 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

The Company is pleased with the ongoing success and rapid expansion of both the Iceberg and Iceberg East zones; mineralization ranges in true width from 10-40m, intervals received have demonstrated good continuity of the high-grade along strike and to depth and the KBFZ remains open in all directions while several assays are pending. Exploration will continue to further define these domains of high-grade while also focussing on expansion drilling both along strike and to depth.

 

2023 assay results have been reported in press release dated March 1, 2023, March 13, 2023, April 4, 2023, May 31, 2023, June 5, 2023, June 8, 2023, June 15, 2023, June 28, 2023, July 5, 2023, and August 9, 2023, August 15, 2023, August 22, 2023, September 13, 2023, and October 25, 2023, found through SEDAR+.

 

Highlighted assay values and drill hole locations from Iceberg drilling are shown in the tables below:

 

Hole No. From (m) To (m) Interval (m) Au (g/t) Zone
NFGC-22-10841 7.70 18.45 10.75 15.27 Iceberg
Including 12.40 13.25 0.85 128.29
Including 14.90 15.75 0.85 20.25
Including 16.15 16.75 0.60 22.11
NFGC-23-10881 34.85 43.90 9.05 14.00 Iceberg
Including 35.20 38.75 3.55 31.56
And1 49.70 51.95 2.25 1.23
NFGC-23-11001 36.35 46.00 9.65 72.15 Iceberg
Including 36.35 38.20 1.85 229.48
Including 38.95 39.95 1.00 18.63
Including 41.25 42.10 0.85 13.15
Including 43.45 45.40 1.95 119.63
NFGC-23-11091 17.60 23.25 5.65 19.65 Iceberg
Including 19.00 21.00 2.00 50.52

 

 - 31 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

NFGC-23-11201 53.55 57.35 3.80 14.60 Iceberg
Including 55.75 56.70 0.95 54.50
And1 63.20 93.05 29.85 49.65
Including 63.70 64.75 1.05 56.11
Including 65.75 66.95 1.20 19.63
Including 67.55 68.55 1.00 31.90
Including3 73.10 77.45 4.35 183.28
Including3 78.85 80.35 1.50 31.13
Including3 83.75 84.55 0.80 14.65
Including3 85.55 86.40 0.85 25.50
Including3 90.10 93.05 2.95 158.00
NFGC-23-11282 61.60 69.20 7.60 12.62 Iceberg
Including 67.55 68.50 0.95 91.30
And1 82.10 96.00 13.90 13.09
Including 86.00 88.00 2.00 67.00
Including 88.95 89.60 0.65 44.50
NFGC-23-11412 109.25 129.60 20.35 6.88 Iceberg
Including 117.00 117.60 0.60 10.65
Including 121.40 121.80 0.40 73.10
Including 126.10 126.55 0.45 25.70
Including 128.60 129.60 1.00 66.30
And2 138.85 149.50 10.65 35.58
Including 138.85 140.35 1.50 232.40
Including 143.35 144.10 0.75 20.20
And3 205.35 212.00 6.65 10.47
Including 206.00 206.70 0.70 32.00
Including 209.50 211.10 1.60 24.55
NFGC-23-11542 33.60 38.80 5.20 40.86 Iceberg
Including 35.35 37.80 2.45 83.20
NFGC-23-11571 250.60 255.30 4.70 166.79

 

Iceberg

Including 251.60 253.35 1.75 440.74
And Including 251.60 252.35 0.75 1,010.00

 

 - 32 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

NFGC-23-12011 102.15 109.00 6.85 20.67 Iceberg
Including 102.15 102.75 0.60 193.00
Including 108.40 109.00 0.60 25.70
NFGC-23-12101 59.75 86.80 27.05 105.32 Iceberg
Including 59.75 60.60 0.85 59.00
Including 61.80 62.25 0.45 22.82
Including 63.20 66.35 3.15 38.92
Including3 69.65 70.70 1.05 159.61
Including3 71.20 78.50 7.30 234.69
Including3 80.35 81.35 1.00 756.96
NFGC-23-12171 206.15 211.40 5.25 19.63 Iceberg
Including 206.15 207.05 0.90 107.50
NFGC-23-12221 98.60 105.20 6.60 12.36

Iceberg

 

Including 98.60 99.00 0.40 42.80
Including 103.85 104.70 0.85 63.05
NFGC-23-1261A2 237.55 247.00 9.45 25.98 Iceberg
Including 237.55 238.50 0.95 10.11
Including 239.80 240.40 0.60 372.37
NFGC-23-12641 20.00 26.70 6.70 33.28 Iceberg
Including 20.00 21.90 1.90 85.35
Including 22.65 23.30 0.65 80.80
NFGC-23-12741 80.70 88.25 7.55 15.45 Iceberg East
Including 81.35 84.20 2.85 28.00
Including 87.30 88.25 0.95 29.60
NFGC-23-12732 128.00 138.60 10.60 1.13 Iceberg
NFGC-23-12791 87.20 95.15 7.95 30.79 Iceberg
Including 87.95 89.10 1.15 14.33
Including 90.55 91.35 0.80 243.55
Including 92.10 92.90 0.80 12.92
Including 93.50 94.20 0.70 20.60
NFGC-23-12851 78.00 82.45 4.45 21.70 Iceberg East
Including 79.45 80.25 0.80 115.95
NFGC-23-12861 77.60 86.30 8.70 40.55 Iceberg
Including 79.55 81.40 1.85 176.00
Including 83.50 84.20 0.70 15.45
NFGC-23-12932 79.05 85.05 6.00 4.49 Iceberg East
Including 79.05 79.70 0.65 30.49

 

 - 33 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

NFGC-23-12941 101.10 112.15 11.05 3.09 Iceberg
Including 108.90 109.45 0.55 13.10
And 117.05 125.25 8.20 5.14
Including 117.05 117.80 0.75 45.86
NFGC-23-13062 141.95 146.75 4.80 33.07 Iceberg
Including 141.95 142.90 0.95 160.50
And1 153.15 157.45 4.30 39.23
Including 153.15 154.05 0.90 175.00
And2 162.00 188.25 26.25 1.26
Including 187.60 188.25 0.65 11.50
And2 204.15 224.40 20.25 9.72
Including 204.15 205.50 1.35 130.48
NFGC-23-13121 94.75 122.55 27.80 14.54 Iceberg
Including 99.80 101.05 1.25 214.40
Including 104.95 105.95 1.00 66.00
Including 120.10 120.50 0.40 36.20
And1 127.30 132.60 5.30 34.59
Including 127.85 128.95 1.10 161.14
NFGC-23-13312 136.40 180.50 44.10 1.34 Iceberg
Including1 137.10 137.70 0.60 25.96
And1 214.00 216.30 2.30 19.47
Including 214.30 215.15 0.85 51.52
NFGC-23-1380 45.80 53.55 7.75 29.36 Iceberg
Including 47.00 48.65 1.65 111.48
Including 49.30 50.35 1.05 23.97
NFGC-23-1395 95.00 100.30 5.30 86.86 Iceberg
Including 95.00 96.00 1.00 456.00
NFGC-23-14021 99.30 109.75 10.45 12.51 Iceberg
Including 107.00 107.65 0.65 156.00
Including 109.10 109.75 0.65 14.15
NFGC-23-14663 43.00 58.70 15.70 3.68 Iceberg East
Including 54.80 55.60 0.80 14.60
NFGC-23-14753 62.00 92.55 30.55 4.28 Iceberg East
Including 66.00 66.45 0.45 15.85
Including 67.10 67.80 0.70 19.00
Including 70.10 71.05 0.95 76.46
NFGC-23-14913 15.90 28.70 12.80 4.51 Iceberg East
Including 15.90 16.75 0.85 35.08
Including 20.00 20.70 0.70 12.90
NFGC-23-15172 42.55 53.25 10.70 1.14 Iceberg East
And1 74.00 79.55 5.55 7.95
Including 74.75 75.10 0.35 50.50
Including 78.15 78.95 0.80 21.40
NFGC-23-15411 85.85 96.40 10.55 46.81 Iceberg East
Including 88.55 89.20 0.65 20.13
Including 90.45 94.85 4.40 104.01
NFGC-23-15701 67.00 71.10 4.10 114.52 Iceberg East
Including 68.00 69.75 1.75 265.32
NFGC-23-15862 43.50 53.60 10.10 6.65 Iceberg East
Including 46.50 47.00 0.50 94.18
NFGC-23-15991 50.55 53.10 2.55 32.37 Iceberg East
Including 52.60 53.10 0.50 162.00

 

 - 34 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 170% to 95%, 240% to 70% and 310% to 40% of reported intervals. 4True widths are unknown at this time. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional uncertainty in true width. As of March 1, 2023, composite intervals reported carry a minimum weighted average of 1 g/t Au diluted over a minimum core length of 2m with a maximum of 4m consecutive dilution when at depths above 200m vertical depth and 2m consecutive dilution when below 200m vertical depth. Prior to this date, all composites allowed for 2m consecutive dilution. Included high-grade intercepts are reported as any consecutive interval with grades greater than 10 g/t Au. Grades have not been capped in the averaging and intervals are reported as drill thickness.

 

Hole No. Azimuth (°) Dip (°) Length (m) UTM E UTM N Prospect
NFGC-22-1084 300 -45 62 658429 5427833 Iceberg
NFGC-23-1088 300 -45 251 658450 5427820 Iceberg
NFGC-23-1100 300 -45 140 658423 5427806 Iceberg
NFGC-23-1109 300 -45 116 658466 5427840 Iceberg
NFGC-23-1120 300 -45 191 658443 5427794 Iceberg
NFGC-23-1128 299 -45 236 658463 5427784 Iceberg
NFGC-23-1141 300 -45 297 658488 5427769 Iceberg
NFGC-23-1154 300 -45 158 658407 5427787 Iceberg
NFGC-23-1157 300 -45 350 658459 5427671 Iceberg
NFGC-23-1201 300 -45 215 658451 5427762 Iceberg
NFGC-23-1210 300 -45 236 658473 5427807 Iceberg
NFGC-23-1217 299 -45.5 335 658437 5427683 Iceberg
NFGC-23-1222 299 -45.5 269 658494 5427796 Iceberg
NFGC-23-1261A 297 -45.5 395 658447 5427649 Iceberg
NFGC-23-1264 299 -45.5 203 658488 5427856 Iceberg
NFGC-23-1273 300 -45 377 658472 5427749 Iceberg
NFGC-23-1274 300 -45 407 658750 5428022 Iceberg East
NFGC-23-1279 300 -45 302 658555 5427845 Iceberg
NFGC-23-1285 299 -45.5 326 658798 5428053 Iceberg East
NFGC-23-1286 300 -45 302 658531 5427831 Iceberg
NFGC-23-1293 299 -45.5 318 658844 5428084 Iceberg East
NFGC-23-1294 300 -45 305 658553 5427818 Iceberg
NFGC-23-1306 300 -45 290 658505 5427759 Iceberg
NFGC-23-1312 300 -45 260 658527 5427805 Iceberg
NFGC-23-1331 300 -45 323 658536 5427769 Iceberg
NFGC-23-1380 335 -45 167 658548 5427879 Iceberg
NFGC-23-1395 323 -45.5 188 658555 5427846 Iceberg
NFGC-23-1402 346 -45.5 131 658556 5427846 Iceberg
NFGC-23-1466 56 -78 171 658606 5427990 Iceberg East
NFGC-23-1475 220 -67 180 658681 5428034 Iceberg East
NFGC-23-1491 0 -90 180 658681 5428034 Iceberg East
NFGC-23-1517 300 -65 129 658707 5428022 Iceberg East
NFGC-23-1541 300 -62 150 658615 5427931 Iceberg East
NFGC-23-1570 299 -45.5 108 658730 5428034 Iceberg East
NFGC-23-1586 300 -60 99 658743 5428055 Iceberg East
NFGC-23-1599 299 -45.5 96 658776 5428065 Iceberg East

 

 - 35 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

The latest drilling results from Iceberg are shown on the plan map, long-section and cross-section below:

 

 

Queensway Project – Plan view map of Iceberg area (October 25, 2023)

 

 - 36 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

Queensway Project – Long section of Keats Main, Iceberg and Iceberg East zones, looking northwest (October 25, 2023)

 

 - 37 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

Queensway Project – Iceberg cross-section view, +/-12.5m, looking northwest (August 9, 2023)

 

Keats West Drilling

 

A combination of reconnaissance drilling and targeted drilling looking for the potential extension of the Penumbra vein in the hangingwall to the AFZ (west side) led to the discovery of the Keats West Zone intersecting significant mineralization in NFGC-22-533 reporting 8.70 g/t Au over 6.75m (reported on May, 4, 2022) followed by 17.9 g/t Au over 4.20m in NFGC-22-681 and 10.4 g/t Au over 10.50m in NFGC-22-686 (reported on September 27, 2022).

 

Ongoing exploration drilling at Keats West has uncovered a significant structure that is interpreted to be a thrust fault that dips gently to the south-southwest and hosts both low and high-grade gold mineralization over a considerable thickness with cumulative widths ranging from 10-50 m. This fault zone occurs on the west side of the AFZ, is hosted by an interbedded sequence of black siltstone, siltstone, and greywacke, and consists of a series of stacked veins that contain the gold mineralization and represents an important new discovery for the Company.

 

The mineralization style is epizonal and typical of the other gold prospects found along this segment of the AFZ. Drilling has quickly expanded this system now having intersected significant mineralization over an area that is 315m wide x 305m long. The latest results released on July 19, 2023, saw the expansion of this zone by 65m along strike to the west with the intercept of 5.05 g/t Au over 11.70m in NFGC-22-1027. Broad intervals of gold mineralization spanning up to 80m thick have also been encountered at Keast West as demonstrated by NFGC-22-833 that had an aggregate result of 1.94 g/t Au over 79.75m (reported on March 21, 2023).

 

Ongoing step-out and infill drilling continue to exhibit good continuity of both low and high-grade mineralization within the host structure. There have been several significant highlight intervals received to date including 10.1 g/t Au over 22.50m in NFGC-22-945 (reported on March 21, 2023) occurring 305m down-dip of previously reported 18.6 g/t Au over 15.95m in NFGC-22-773 (reported on November 23, 2022), and 100m down-dip of previously reported 42.6 g/t Au over 32.00m in NFGC-22-960 (reported on November 28, 2022).

 

 - 38 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Additional highlight results received include 4.27 g/t Au over 31.55m in NFGC-22-911, 5.81 g/t Au over 30.05m in NFGC-23-1149 (reported on August 17, 2023), 3.29 g/t Au over 42.35m in NFGC-23-1129 (reported on September 27, 2023), 17.2 g/t Au over 22.90m and 12.0 g/t Au over 18.40m in NFGC-22-1040 and 1.53 g/t Au over 34.75m in NFGC-23-1155 (reported on April 25, 2023), 5.16 g/t Au over 28.65m in NFGC-23-1171 (reported on May 17, 2023), 3.27 g/t Au over 15.05m in NFGC-23-1211 (reported on June 14, 2023), 17.1 g/t Au over 11.35m and 1.82 g/t Au over 40.00m in NFGC-22-931 (reported on October 4, 2023) and 4.43 g/t Au over 43.40m in NFGC-22-1010 (reported on July 19, 2023) that fill-out the Keats West structure and provide further confidence in the robustness and consistency of gold mineralization in this system.

 

Step-out and infill drilling are ongoing at Keats West to expand on this new discovery and to better define the continuity of grade and the controls on the gold mineralization within the host fault that starts at surface and having all intercepts drilled to date occurring above 130m vertical depth.

 

2022 and 2023 assay results have been reported in press release dated May 4, 2022, September 27, 2022, November 23, 2022, November 28, 2022, January 24, 2023, March 21, 2023, April 18, 2023, April 25, 2023, May 17, 2023, June 14, 2023, July 19, 2023, August 17, 2023, September 27, 2023, and October 4, 2023, found through SEDAR+.

 

Highlighted assay values and drill hole locations from Keats West drilling are shown in the tables below:

 

Hole No. From (m) To (m) Interval (m) Au (g/t)
NFGC-22-5331 98.25 105.00 6.75 8.70
Including 100.65 101.50 0.85 53.3
NFGC-22-643A1 8.20 14.30 6.10 1.88
And1 22.50 25.70 3.20 2.64
And1 39.00 46.00 7.00 1.48
And1 49.00 54.20 5.20 1.85
And1 56.35 65.00 8.65 1.57
NFGC-22-6601 9.00 12.00 3.00 1.97
And1 22.20 26.30 4.10 2.22
And1 36.45 40.90 4.45 1.27
And1 43.90 46.05 2.15 1.67
And1 52.25 68.10 15.85 2.01
Including 67.45 68.10 0.65 11.30
NFGC-22-667A1 6.35 15.20 8.85 3.47
And1 18.40 26.00 7.60 2.48
And1 38.00 44.00 6.00 1.84
And1 48.75 57.30 8.55 1.34
NFGC-22-6811 116.80 121.00 4.20 17.87
Including 116.80 117.25 0.45 15.90
And including 120.30 121.00 0.70 68.80
NFGC-22-6861 100.50 111.00 10.50 10.36
Including 101.30 102.55 1.25 43.84
And including 103.05 103.45 0.40 88.20
NFGC-22-7591 66.80 80.05 13.25 1.82
NFGC-22-7731 11.85 16.20 4.35 2.63
And1 18.60 34.55 15.95 18.62
And Including 24.85 25.85 1.00 252.99
NFGC-22-7841 13.40 37.40 24.00 6.68
Including 18.95 20.45 1.50 37.43
Including 20.85 21.55 0.70 14.90

 

 - 39 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Including 26.00 27.50 1.50 24.70
Including 36.45 37.40 0.95 12.75
NFGC-22-8082 44.00 49.00 5.00 13.90
Including 44.00 45.80 1.80 23.40
Including 46.95 47.35 0.40 20.10
Including 47.70 48.35 0.65 12.05
And2 55.00 62.00 7.00 2.01
NFGC-22-8332 11.00 22.40 11.40 3.25
And2 30.00 65.00 35.00 2.41
And2 74.00 91.35 17.35 1.61
Aggregate2* 11.00 91.35 79.75 1.94
NFGC-22-8431 31.40 38.30 6.90 7.71
Including1 31.80 32.40 0.60 77.10
NFGC-22-8652 101.10 104.65 3.55 61.76
Including 102.70 103.40 0.70 301.09
NFGC-22-8681 78.20 94.45 16.25 2.12
NFGC-22-8751 59.00 74.00 15.00 2.09
NFGC-22-8941 65.00 82.75 17.75 1.41
NFGC-22-9112 56.00 87.55 31.55 4.27
Including 60.70 62.10 1.40 14.66
Including 86.00 87.55 1.55 31.06
NFGC-22-9221 52.00 54.00 2.00 8.13
Including 53.00 54.00 1.00 14.30
And1 63.40 80.00 16.60 3.26
Including 73.30 74.25 0.95 25.23
And1 128.70 150.00 21.30 4.32
Including 133.45 134.20 0.75 14.40
Including 139.55 140.50 0.95 10.25
Including 143.55 144.25 0.70 23.90
NFGC-22-9352 105.90 123.50 17.60 2.07
Including 114.45 114.85 0.40 10.60
NFGC-22-9451 78.10 100.60 22.50 10.05
Including 88.15 88.80 0.65 12.55
Including 90.00 91.00 1.00 12.95
Including 93.70 94.85 1.15 14.24
Including 95.65 96.00 0.35 16.10
Including 99.95 100.60 0.65 221.00
NFGC-22-9601 25.35 35.25 9.90 2.08
And2 39.60 44.20 4.60 1.18
And1 49.90 55.15 5.25 2.14
And3 145.00 177.00 32.00 42.64
Including 151.35 152.30 0.95 14.05
And Including 156.65 157.55 0.90 86.60
And Including 159.40 161.30 1.90 24.06
And Including 162.05 162.95 0.90 29.68
And Including 163.75 164.35 0.60 24.50
And Including 165.70 167.00 1.30 16.26
And Including 170.50 177.00 6.50 171.55
And Including 170.50 173.10 2.60 121.57
And Including 173.70 177.00 3.30 241.54
NFGC-22-9891 9.70 39.10 29.40 2.53
Including 30.00 30.35 0.35 46.90

 

 - 40 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Including 38.75 39.10 0.35 84.00
NFGC-22-9921 17.50 24.15 6.65 2.85
And1 27.00 29.00 2.00 1.44
And1 32.00 39.20 7.20 1.98
NFGC-22-9961 39.40 64.00 24.60 1.28
NFGC-22-10041 36.10 51.50 15.40 2.38
Including 41.00 41.65 0.65 13.42
NFGC-22-10401 40.40 63.30 22.90 17.23
Including 45.85 47.45 1.60 162.12
Including 49.45 49.95 0.50 18.82
Including 58.50 59.00 0.50 161.66
Including 61.95 62.65 0.70 14.18
And1 69.65 88.05 18.40 12.00
Including 71.25 72.10 0.85 12.00
Including 72.55 73.30 0.75 57.67
Including 80.10 80.50 0.40 93.75
Including 82.50 82.85 0.35 53.36
Including 85.75 87.30 1.55 47.87
NFGC-22-10431 7.20 26.60 19.40 2.49
NFGC-22-1049A2 66.40 77.35 10.95 1.40
And3 95.00 107.20 12.20 1.10
NFGC-23-10912 23.50 60.80 37.30 2.19
And 98.00 122.00 24.00 1.73
NFGC-23-11081 94.00 98.65 4.65 8.42
Including 95.00 96.45 1.45 12.47
Including 98.00 98.65 0.65 12.60
NFGC-23-11102 19.65 31.00 11.35 3.23
NFGC-23-11291 14.95 57.30 42.35 3.29
Including 31.15 32.00 0.85 11.35
Including 34.00 35.00 1.00 11.10
NFGC-23-11491 31.25 43.30 12.05 1.06
And1 56.10 86.15 30.05 5.81
Including 56.10 56.85 0.75 23.94
Including 57.90 58.25 0.35 102.04
Including 61.80 63.30 1.50 19.29
Including 80.70 81.65 0.95 31.58
NFGC-23-11553 55.55 90.30 34.75 1.53
NFGC-23-11581 53.25 63.40 10.15 2.71
And1 70.80 83.65 12.85 1.71
NFGC-23-11621 88.75 105.80 17.05 2.55
Including 102.05 103.00 0.95 11.50
NFGC-23-11642 60.00 71.35 11.35 1.15
NFGC-23-11711 29.00 57.65 28.65 5.16
Including 37.20 38.45 1.25 11.43
Including 40.35 43.25 2.90 15.73
NFGC-23-11801 61.95 75.05 13.10 1.58
NFGC-23-11841 44.40 54.85 10.45 7.01
Including 46.00 48.20 2.20 14.85
Including 49.85 50.95 1.10 19.16
NFGC-23-11891 68.00 82.65 14.65 4.02
Including 72.00 72.60 0.60 14.55
Including 82.10 82.65 0.55 38.82

 

 - 41 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

NFGC-23-11931 78.30 91.25 12.95 2.03
NFGC-23-11971 67.70 84.00 16.30 5.57
Including 74.75 75.35 0.60 11.10
Including 77.40 78.65 1.25 25.70
Including 79.90 80.55 0.65 12.35
NFGC-23-12001 51.95 65.90 13.95 3.39
Including 62.80 63.70 0.90 12.10
NFGC-23-1209A1 63.15 82.10 18.95 1.36
NFGC-23-12111 29.00 44.05 15.05 3.27
And1 73.45 90.95 17.50 1.61

 

Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 170% to 95%, 240% to 70% and 310% to 40% of reported intervals. 4True widths are unknown at this time. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional uncertainty in true width. As of March 1, 2023, composite intervals reported carry a minimum weighted average of 1 g/t Au diluted over a minimum core length of 2m with a maximum of 4m consecutive dilution when at depths above 200m vertical depth and 2m consecutive dilution when below 200m vertical depth. Prior to this date, all composites allowed for 2m consecutive dilution. Included high-grade intercepts are reported as any consecutive interval with grades greater than 10 g/t Au. Grades have not been capped in the averaging and intervals are reported as drill thickness. * Aggregate composite of the entire mineralized envelope.

 

Hole No. Azimuth (°) Dip (°) Length (m) UTM E UTM N
NFGC-22-533 -45 120 320 657952 5427747
NFGC-22-643A -53 51 302 658101 5427994
NFGC-22-660 -45 57 281 658101 5427993
NFGC-22-667A -53 45 293 658101 5427994
NFGC-22-681 -63 120 131 658053 5427905
NFGC-22-686 -60 70 206 658053 5427905
NFGC-22-759 -45 76 146 658092 5427940
NFGC-22-773 -45 62 218 658098 5428052
NFGC-22-784 -46 75 230 658098 5428052
NFGC-22-808 -45 120 149 658058 5428076
NFGC-22-833 120 -45.5 221 658033 5428032
NFGC-22-843 65 -52 200 658032 5428032
NFGC-22-865 127 -66 185 658046 5427939
NFGC-22-868 -46 67 326 658048 5427939
NFGC-22-875 39 -52 335 658092 5427942
NFGC-22-894 35 -45 308 658074 5427952
NFGC-22-911 120 -45 352 657991 5428056
NFGC-22-922 37 -56 258 658003 5427818
NFGC-22-935 120 -45 302 657962 5428016
NFGC-22-945 58 -47 237 657949 5427794
NFGC-22-960 -45 120 378 657980 5427948
NFGC-22-989 35 -45 84 658126 5428023
NFGC-22-992 -45 35 117 658138 5428009
NFGC-22-996 35 -45 93 658124 5427976
NFGC-22-1001 120 -45 351 657990 5427884
NFGC-22-1004 35 -45 105 658075   5428004
NFGC-22-1010 115 -45 309 657920 5428041
NFGC-22-1027 115 -45 210 657876 5428065
NFGC-22-1040 56 -53 206 657952 5427847
NFGC-22-1043 15 -65 84 657871 5428010
NFGC-22-1049A 114 -45 315 657909 5427989
NFGC-23-1091 120 -45 296 658005 5427991
NFGC-23-1108 55 -47 233 657906 5427818
NFGC-23-1110 120 -45 176 657873 5428009

 

 - 42 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

NFGC-23-1129 357 -45 170 657989 5427885
NFGC-23-1149 27 -65 115 658004 5427991
NFGC-23-1155 203 -61 179 658124 5427975
NFGC-23-1158 0 -56 122 658003 5427993
NFGC-23-1162 32 -54 137 657981 5427949
NFGC-23-1164 10 -45 119 658034 5428034
NFGC-23-1171 16 -61 155 657952 5427848
NFGC-23-1180 3 -42 155 657951 5427848
NFGC-23-1184 31 -45 173 657952 5427849
NFGC-23-1189 324 -60 197 658002 5427820
NFGC-23-1193 42 -50 350 658048 5427940
NFGC-23-1197 0 -60 113 658003 5427818
NFGC-23-1200 80 -69.5 106 657994 5427819
NFGC-23-1209A 49 -46.5 302 658074 5427953
NFGC-23-1211 325 -57 131 658051 5427965

 

 - 43 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

The latest drilling results for Keats West are shown in the images below:

 

 

Queensway Project – Keats West area plan map (October 4, 2023)

 

 - 44 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

Queensway Project – Keats West inclined 3-D view with main veins plotted only, looking south (March 21, 2023)

 

 

Queensway Project – Keats West 3-D cross-section view, +/- 12.5m, looking east (October 4, 2023)

 

 - 45 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Lotto Zone Drilling

 

The Company has reported several significant gold assay intervals from the Lotto Zone starting with its first drill hole NFGC-20-17 reporting 16.3 g/t Au over 2.20m, 41.2 g/t Au over 4.75m and a third interval of 25.4 g/t Au over 5.15m (reported on October 2, 2020). Following this result, the Lotto Main vein has been systematically tested and expanded by subsequent highlight intercepts of 225 g/t Au over 2.45m in NFGC-21-100 (reported on February 23, 2021), 51.3 g/t Au over 3.20m in NFGC-21-109 (reported on March 23, 2021), 53.3 g/t Au over 3.10m in NFGC-21-115 (reported on March 23, 2021) and 150 g/t over 11.50m in NFGC-21-201 (reported on June 23, 2021).

 

Continued exploration drilling to expand the Lotto Main Vein increased the domain of contained high-grade gold mineralization to 225m vertical depth with NFGC-21-367A reporting 24.3 g/t Au over 2.20m (reported on March 24, 2022) and extended the strike length to over 220m with the intercept of 16.1 g/t Au over 3.60m in NFGC-22-664 (September 13, 2022). This vein has been intersected at depths of up to 325m vertical. Infill drilling targeting a “roll”, an area where there is a drastic change in orientation of the Lotto Main Vein intersected 152 g/t Au over 3.85m in NFGC-22-673 and 13.0 g/t Au over 14.95m in NFGC-22-684 (reported on September 13, 2022).

 

The Lotto Zone is comprised of a north-south striking, steeply east-dipping vein ("Lotto Main Vein") located approximately 200m east of the AFZ and drilling to date on the Lotto Main Vein has confirmed good continuity of a high-grade lens that is interpreted to plunge steeply to the northeast in addition to defining new corridors of high-grade gold contained within the vein. Exploration at Lotto is paused at this time to focus on expanding and discovering new near surface gold mineralization.

 

2022 and 2023 assay results have been reported in press releases dated March 24, 2022, June 8, 2022, September 13, 2022, November 2, 2022, and January 10, 2023, found through SEDAR+.

 

Highlighted assay values and drill hole locations from Lotto drilling are shown in the tables below:

 

Hole No. From (m) To (m) Interval (m)1 Au (g/t) Zone
NFGC-21-2432 243.75 245.75 2.00 10.74 Lotto Main
Including 244.50 245.45 0.95 22.49
NFGC-21-2892 192.95 195.35 2.40 12.57 Lotto Main
Including 193.25 194.55 1.30 21.58
NFGC-21-2952 110.20 112.20 2.00 12.19 Lotto Main
Including 110.55 111.25 0.70 34.81
NFGC-21-2961 228.00 230.60 2.60 15.66 Lotto Main
NFGC-21-3191 176.60 179.00 2.40 20.01 Lotto Main
Including 176.60 177.70 1.10 43.32
And1 315.30 317.35 2.05 23.08 Sunday
NFGC-21-3332 61.40 64.00 2.60 11.67 Lotto Main
Including 62.75 63.25 0.50 58.00
NFGC-21-3381 282.65 284.80 2.15 25.31 Lotto Main
Including 284.05 284.50 0.45 115.25 Lotto Main
NFGC-21-367A1 324.45 326.65 2.20 24.25 Lotto Main
NFGC-21-404A1 217.15 219.20 2.05 31.63 Lotto Main
Including 217.45 218.05 0.60 107.50 Lotto Main
NFGC-22-5521 87.95 89.95 2.00 89.5 Tuesday
Including 88.35 88.75 0.40 442
NFGC-22-6643 66.40 70.00 3.60 16.13 Lotto Main
Including 68.80 69.35 0.55 92.60
NFGC-22-6733 206.15 210.00 3.85 152.08 Lotto Main

 

 - 46 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Including 206.15 208.90 2.75 211.91
NFGC-22-6843 211.45 226.40 14.95 12.98 Lotto Main
Including 216.30 217.00 0.70 25.30
And including 224.30 226.40 2.10 72.35
NFGC-22-7534 204.35 207.65 3.30 11.38 Lotto Main
Including 204.35 205.15 0.80 45.40

 

Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 170% to 95%, 240% to 70% and 310% to 40% of reported intervals. 4True widths are unknown at this time. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional uncertainty in true width. As of March 1, 2023, composite intervals reported carry a minimum weighted average of 1 g/t Au diluted over a minimum core length of 2m with a maximum of 4m consecutive dilution when at depths above 200m vertical depth and 2m consecutive dilution when below 200m vertical depth. Prior to this date, all composites allowed for 2m consecutive dilution. Included high-grade intercepts are reported as any consecutive interval with grades greater than 10 g/t Au. Grades have not been capped in the averaging and intervals are reported as drill thickness.

 

Hole No. Azimuth (°) Dip (°) Length (m) UTM E UTM N
NFGC-21-243 298 -50 323 659064 5428888
NFGC-21-289 299 -45 345 659030 5428958
NFGC-21-295 300 -45 128 659052 5429149
NFGC-21-296 299 -45.5 255 659058 5428943
NFGC-21-319 299 -45.5 342 659010 5428998
NFGC-21-333 299 -45.5 336 658985 5429013
NFGC-21-338 298 -45.5 312 659099 5428890
NFGC-21-367A 298 -47 369 659125 5428876
NFGC-21-404A 299 -48 374 659046 5429007
NFGC-22-552 300 -45 201 658833 5429014
NFGC-22-664 300 -61 174 658919 5429139
NFGC-22-673 263 -68 258 658990 5429097
NFGC-22-684 258 -69 237 658983 5429072
NFGC-22-753 263 -55 396 659046 5429140

 

 - 47 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

The latest results from the Lotto and Lotto North zones are shown in the long section and plan map and Lotto only in cross section below:

 

 

Queensway Project – Lotto – K2 and Jackpot area plan map (October 18, 2023)

 

 - 48 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

Queensway Project – Lotto- Lotto North zones long section, looking northwest (May 10, 2023)

 

 - 49 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

Queensway Project – Lotto cross-section, +/- 12.5m, looking northeast (September 13, 2022)

 

Lotto North

 

The Lotto North prospect is adjacent (north) to the Lotto prospect in QWN on the east side of the AFZ. Systematic grid drilling testing along the eastern side of the AFZ north of Lotto identified this new gold-bearing structural zone in November 2022 first reporting 33.8 g/t Au over 2.35m in NFGC-22-661, 37.4 g/t Au over 2.10m in NFGC-22-690 and 22.2 g/t Au over 2.20m in NFGC-22-717.

 

Continued exploration drilling at Lotto North has defined a series of AFZ-typical epizonal-style gold-bearing veins contained within a north-south striking brittle fault zone immediately north of the Lotto prospect. Additional highlight intervals reported on January 10, 2023 including 16.1 g/t Au over 5.30m in NFGC-22-788, 14.6 g/t Au over 2.95m in NFGC-22-758, 11.1 g/t Au over 2.30m in NFGC-22-818, 4.72 g/t Au over 8.50m in NFGC-22-646 and 7.20 g/t Au over 4.55m in NFGC-22-895 expanded the Lotto North gold mineralization and host structure over a strike length of 340m. On May 10, 2023, results released extended mineralization to 200m vertical depth and brought the mineralization to near-surface with 11.1 g/t Au over 3.55m in NFGC-22-940 and 21.1 g/t Au over 2.15m in NFGC-22-953. The Lotto North structure remains open in all directions and is likely the same structure that hosts the Lotto Main vein but has been offset by late faulting in this region.

 

When combined with the Lotto Main Zone, these high-grade gold-bearing structures have been drill-defined over a total strike length of 630m. Exploration is ongoing to expand on this new discovery and is currently focussed from surface to 200m vertical depth.

 

2022 and 2023 assay results have been reported in press releases dated November 2, 2022 and January 10, 2023 found through SEDAR+.

 

 - 50 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Highlighted assay values and drill hole locations from Lotto North drilling are shown in the tables below:

 

Hole No. From (m) To (m) Interval (m) Au (g/t) Zone
NFGC-22-6462 71.80 80.30 8.50 4.72 Lotto N
Including 71.80 72.55 0.75 38.50
NFGC-22-6612 74.65 77.00 2.35 33.79 Lotto N
Including 74.95 75.30 0.35 225.00
NFGC-22-6901 69.45 71.55 2.10 37.36 Lotto N
Including 70.15 70.85 0.70 109.00
NFGC-22-7171 49.80 52.00 2.20 22.18 Lotto N
Including 49.80 50.80 1.00 48.74
NFGC-22-7582 155.65 158.60 2.95 14.58 Lotto N
Including 157.85 158.60 0.75 53.70
NFGC-22-7882 120.70 126.00 5.30 16.12 Lotto N
Including 122.00 123.55 1.55 49.63  
NFGC-22-8182 50.45 52.75 2.30 11.05 Lotto N
Including 52.40 52.75 0.35 72.10
NFGC-22-8951 174.65 179.20 4.55 7.20 Lotto N
Including 178.60 179.20 0.60 32.56
NFGC-22-9401 80.25 83.80 3.55 11.13 Lotto N
Including 82.15 82.80 0.65 51.70
NFGC-22-9531 77.85 80.00 2.15 21.11 Lotto N
Including 78.25 78.75 0.50 86.70

 

Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 170% to 95%, 240% to 70% and 310% to 40% of reported intervals. 4True widths are unknown at this time. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional uncertainty in true width. As of March 1, 2023, composite intervals reported carry a minimum weighted average of 1 g/t Au diluted over a minimum core length of 2m with a maximum of 4m consecutive dilution when at depths above 200m vertical depth and 2m consecutive dilution when below 200m vertical depth. Prior to this date, all composites allowed for 2m consecutive dilution. Included high-grade intercepts are reported as any consecutive interval with grades greater than 10 g/t Au. Grades have not been capped in the averaging and intervals are reported as drill thickness.

 

Hole No. Azi (°) Dip (°) Length (m) UTM E UTM N Prospect
NFGC-22-646 300 -45 429 659079 5429391 Lotto N
NFGC-22-661 285 -45 396 659079 5429391 Lotto N
NFGC-22-690 270 -42 264 659083 5429446 Lotto N
NFGC-22-717 300 -45 213 659089 5429559 Lotto N
NFGC-22-758 270 -45 234 659123 5429422 Lotto N
NFGC-22-788 240 -45 261 659068 5429628 Lotto N
NFGC-22-818 300 -45 219 658982 5429272 Lotto N
NFGC-22-895 70 -45 243 658848 5429213 Lotto N
NFGC-22-940 90 -45 135 658986 5429330 Lotto N
NFGC-22-953 90 -45 213 658943 5429355 Lotto N

 

 - 51 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Jackpot

 

On June 22, 2023, the Company announced the discovery of a new zone, “Jackpot” located 600m north of Lotto North and 280m east of the AFZ with the discovery hole of 95.7 g/t Au over 3.25m in NFGC-23-1292 at 20m vertical depth. This hole was drilled as part of a targeted program testing an area of interest between Lotto North and Everest.

 

Follow-up drilling designed to efficiently determine the orientation of the vein for continued expansion intercepted 119 g/t Au over 4.10m in NFGC-23-1425 and 147 g/t Au over 2.70m in NFGC-23-1423 (both reported on September 5, 2023) and are located 20m down-dip and 15m along strike, respectively, of previously reported NFGC-23-1292. All three intervals occur at a vertical depth ranging from 20-40m.

 

Expansion drilling has determined that Jackpot is an east-west striking, steeply south-dipping high-grade structure with characteristics similar to the neighbouring Lotto Zone. Additional results received indicate strong high-grade continuity with the intervals of 51.9 g/t Au over 2.85m in NFGC-23-1447, 31.5 g/t Au over 2.50m in NFGC-23-1574, 18.9 g/t Au over 3.00m in NFGC-23-1505, 11.0 g/t Au over 4.70m in NFGC-23-1415, 13.8 g/t Au over 2.75m in NFGC-23-1458, and 4.63 g/t Au over 6.10m in NFGC-23-1464 (all reported on October 18, 2023).

 

An aggressive follow-up drilling program is underway to expand on this new discovery while initial drilling has delineated a mineralized strike length of 185m with a current depth extent of 205m which remains open in all directions.

 

2022 and 2023 assay results have been reported in press releases dated June 22, 2023, September 5, 2023, and October 18, 2023, found through SEDAR+.

 

Hole No. From (m) To (m) Interval (m) Au (g/t) Zone
NFGC-23-12921 27.45 30.70 3.25 95.71 Jackpot
Including 27.45 28.30 0.85 352.58
Including 29.80 30.70 0.90 12.37
And2 202.55 212.55 10.00 1.88
NFGC-23-14151 28.00 32.70 4.70 10.98 Jackpot
Including 28.00 29.30 1.30 38.41
NFGC-23-14231 20.40 23.10 2.70 146.67 Jackpot
Including 20.40 22.50 2.10 188.10
Including 21.40 21.80 0.40 699.00
And Including 22.10 22.50 0.40 241.00
NFGC-23-14252 36.90 41.00 4.10 118.73 Jackpot
Including 36.90 39.00 2.10 229.71
NFGC-23-14471 59.20 62.05 2.85 51.93 Jackpot
Including 59.20 61.10 1.90 77.82
NFGC-23-14581 75.00 77.75 2.75 13.83 Jackpot
Including 76.60 77.30 0.70 49.31
NFGC-23-14641 83.00 89.10 6.10 4.63 Jackpot
Including 83.35 83.95 0.60 38.87
NFGC-23-14882 108.20 117.65 9.45 3.01 Jackpot
Including 110.00 110.70 0.70 25.70
NFGC-23-15051 76.75 79.75 3.00 18.93 Jackpot
Including 78.90 79.75 0.85 61.78
NFGC-23-15741 30.50 33.00 2.50 31.50 Jackpot
Including 31.30 32.15 0.85 90.40

 

 - 52 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Hole No. Azi (°) Dip (°) Length (m) UTM E UTM N Prospect
NFGC-23-1292 300 -45 249 659422 542986 Jackpot
NFGC-23-1415 293 -57.5 96 659422 5429885 Jackpot
NFGC-23-1423 0 -71 72 659418 5429888 Jackpot
NFGC-23-1425 270 -72 74 659417 5429884 Jackpot
NFGC-23-1447 340 -62 99 659393 5429840 Jackpot
NFGC-23-1458 6 -55 114 659414 5429830 Jackpot
NFGC-23-1464 325 -62 123 659412 5429830 Jackpot
NFGC-23-1488 14 -60 177 659394 5429803 Jackpot
NFGC-23-1505 355 -48 111 659372 5429801 Jackpot
NFGC-23-1574 5 -45 60 659436 5429875 Jackpot

 

The latest results from Jackpot Zone are shown in the long section below:

 

 

Queensway Project – Jackpot long section, looking north (October 18, 2023)

 

 - 53 - 

 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Zone 36/K2, Monte Carlo and Everest

 

On January 10, 2023, the Company reported the intersection of broad gold mineralization west of the AFZ and in close proximity to the Zone 36 prospect during systematic drilling stepping north of Lotto North, this interval graded 3.63 g/t Au over 9.50m in NFGC-22-816. In light of the recent discovery at Keats West, the first major discovery made west of the AFZ, exploration drilling had shifted to targeting two structures identified in a lineament study that had orientations similar to the KBFZ. This work led to the discoveries of K2 and Monte Carlo announced on May 10, 2023.

 

At K2, initial highlight intervals of 28.6 g/t Au over 2.00m in NFGC-22-902, 11.2 g/t Au over 4.25m in NFGC-22-959, 8.91 g/t Au over 4.70m in NFGC-22-827, 3.00 g/t Au over 11.00m in NFGC-22-898, 1.88 g/t Au over 14.75m in NFGC-22-892 and 1.44 g/t Au over 18.80m in NFGC-22-986 are controlled by the K2 fault, located 725m north of Lotto on the west side of the AFZ adjacent to Zone 36 (all reported on May 10, 2023).

 

Ongoing exploration at K2 has identified a significant structural zone with similarities to the KBFZ including a similar strike and consisting of a complex network of stockwork-style gold-bearing quartz veins that occur within a broad domain of brittle faulting that now spans a mineralized footprint of 410m long x 395m wide. The K2 structure is interpreted as the master structure whereas Zone 36 is a related vein occurring in close proximity that was originally exposed in trenching.

 

Much of the gold at K2 is found in the “K2 Main” structure, a low-angle gold-bearing fault zone starting at surface that dips 40° to the south and shares a similar orientation to Keats West. K2 Main is made up of a complex network of associated structures forming a mineralized damage zone that averages 65m in thickness.

 

The mineralization style at K2 consists of a series of stockwork and fault-fill style quartz veins with orientations that parallel K2 Main and crosscut it forming a broad domain of gold mineralized brittle faults. These veins are extensive, many of them are projected to make their way to surface, and additional drilling is required to fully define this network.

 

One such vein constituent of the greater K2 structure is “Stibnite” vein that has returned several significant intervals including 4.50 g/t Au over 12.95m in NFGC-23-1303, 6.51 g/t Au over 5.05m in NFGC-23-1387 and 13.7 g/t Au over 3.90m in NFGC-23-1391 (all reported on August 28, 2023). Stibnite is a near-surface high-grade vein that has been traced over a current strike length of 105m. This vein contains significant amounts of stibnite, an antimony-bearing sulphide mineral as reflected by the antimony assay results of 0.95% Sb over 12.95m in NFGC-23-1303 and 0.04% Sb over 3.90m in NFGC-23-1391. This is the first time this mineral association has been observed at Queensway North. Initial results from K2 also indicate high-grade potential, which is well demonstrated by the interval of 198 g/t Au over 2.00m in NFGC-22-952 (reported August 28, 2023)

 

Exploration will remain focussed on expanding K2, which remains open in all directions and at depth, where limited drilling has been conducted below 150m vertical.

 

On May 10, 2023, the Company announced another new discovery on the west side of the AFZ a further 850m south of K2, a zone now named “Monte Carlo”. The discovery high-grade results of 12.3 g/t Au over 8.05m in NFGC-23-1151 and 13.0 g/t Au over 4.75m in NFGC-23-1145 were found to be hosted by an east-west striking brittle fault zone that is associated with continuous quartz veining and gold mineralization and at the time, had been intersected over a strike length of 150m.

 

Targeted follow-up drilling has since intersected multiple high-grade gold intervals including 91.9 g/t Au over 2.00m in NFGC-23-1690, 23.5 g/t Au over 2.05m and 18.9 g/t Au over 2.70m in NFGC-23-1683, and 14.9 g/t Au over 2.80m in NFGC-22-1045 (all reported on October 11, 2023) and expanded the strike length to 520m and the depth extent to 160m vertical.

 

 - 54 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Exploration continues at Monte Carlo with a focus on expanding the highest-grade segment of the fault down dip, which currently remains open.

 

The Company’s ongoing systematic grid drilling program working on the east side of the AFZ also intersected a new zone of veining grading 36.7 g/t Au over 3.70m in NFGC-22-888 and 28.7 g/t Au over 2.30m in NFGC-22-930 (both reported on May 10, 2023). This zone is named “Everest” and is located 1.5km northeast of Lotto. Mineralization is spatially associated with a shear zone and is within close proximity to the AFZ.

 

Drilling is ongoing at both K2 and Monte Carlo to expand these discoveries both along strike and to depth.

 

2023 assay results have been reported in press release dated January 10, 2023, May 10, 2023, August 28, 2023, and October 11, 2023, found through SEDAR+.

 

Highlighted assay values and drill hole locations from Monte Carlo, K2/ Zone 36 and Everest drilling are shown in the tables below:

 

Hole No. From (m) To (m) Interval (m) Au (g/t) Sb (%) Zone
NFGC-22-10252 10.95 21.05 10.10 2.67   Monte Carlo
And3 50.90 59.85 8.95 2.25  
NFGC-22-10452 32.35 35.15 2.80 14.91   Monte Carlo
Including 32.35 34.30 1.95 19.13  
NFGC-22-10703 13.00 28.25 15.25 1.66   Monte Carlo
NFGC-23-11351 49.30 55.55 6.25 7.49   Monte Carlo
Including 49.30 49.65 0.35 40.00  
Including 54.30 55.05 0.75 33.00  
NFGC-23-11451 61.80 66.55 4.75 13.04   Monte Carlo
Including 61.80 62.35 0.55 79.90  
Including 64.15 64.55 0.40 20.10  
NFGC-23-11511 63.25 71.30 8.05 12.28   Monte Carlo
Including 65.00 65.60 0.60 51.30  
Including 67.70 68.10 0.40 111.00  
NFGC-23-16831 36.20 38.25 2.05 23.52   Monte Carlo
Including 36.20 36.75 0.55 80.95  
And1 51.55 54.25 2.70 18.85  
Including 52.00 52.35 0.35 131.10  
NFGC-23-16871 103.70 105.85 2.15 18.95   Monte Carlo
Including 104.90 105.40 0.50 77.73  
NFGC-23-16902 166.75 168.75 2.00 91.86   Monte Carlo
Including 166.75 167.85 1.10 166.89  
NFGC-22-8162 271.70 281.20 9.50 3.63   K2
Including 277.30 277.80 0.50 17.15  
NFGC-22-8272 269.00 273.70 4.70 8.91   K2
Including 269.00 271.30 2.30 13.80  
NFGC-22-8921 135.25 150.00 14.75 1.88   K2
NFGC-22-8982 176.00 187.00 11.00 3.00   K2
Including 182.20 183.00 0.80 14.80  
NFGC-22-9022 59.00 61.00 2.00 28.58   K2
Including 59.00 60.00 1.00 48.80  
NFGC-22-9381 45.20 57.10 11.90 1.94   K2
And4 93.30 100.60 7.30 2.01  

 

 - 55 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

And2 107.60 118.50 10.90 1.23    
NFGC-22-9522 187.00 189.00 2.00 197.78   K2
Including 188.20 188.60 0.40 988.70  
NFGC-22-9592 131.00 135.25 4.25 11.23   K2
Including 131.00 132.50 1.50 12.93  
Including 133.20 134.80 1.60 13.45  
And4 206.95 215.00 8.05 1.09  
NFGC-22-9863 43.70 62.50 18.80 1.44   K2
And1 90.85 100.40 9.55 1.72  
NFGC-22-9522 187.00 189.00 2.00 197.78   K2
Including 188.20 188.60 0.40 988.70  
NFGC-22-10021 132.30 143.90 11.60 1.62   K2
NFGC-22-10131 202.95 209.00 6.05 6.47 <0.01 K2
Including 204.50 205.20 0.70 27.50 <0.01
NFGC-23-13031 22.35 35.30 12.95 4.50 0.95 K2
Including 23.20 24.35 1.15 21.12 1.12
Including 25.00 25.45 0.45 12.05 10.45
NFGC-23-13101 30.00 42.55 12.55 2.32 <0.01  
Including 40.85 41.60 0.75 10.10 <0.01
NFGC-23-13151 22.00 35.00 13.00 2.38 <0.01 K2
Including 34.30 35.00 0.70 10.75 <0.01
NFGC-23-13871 19.90 24.95 5.05 6.51 0.02 K2
Including 22.85 23.55 0.70 27.70 0.05
NFGC-23-13911 6.00 9.90 3.90 13.72 0.04 K2
Including 7.50 8.00 0.50 20.60 0.21
Including 8.50 9.90 1.40 26.93 0.02
NFGC-22-8882 166.05 169.75 3.70 36.65   Everest
Including 166.05 166.65 0.60 13.00  
Including 169.00 169.75 0.75 166.50  
NFGC-22-9184 161.95 164.70 2.75 18.60   Everest
Including 161.95 162.95 1.00 44.23  
NFGC-22-9303 104.80 107.10 2.30 28.68   Everest
Including 105.40 105.90 0.50 131.50  

 

Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 170% to 95%, 240% to 70% and 310% to 40% of reported intervals. 4True widths are unknown at this time. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional uncertainty in true width. Composite intervals reported carry a minimum weighted average of 1 g/t Au diluted over a minimum core length of 2m with a maximum of 4m consecutive dilution when above 200m vertical depth and 2m consecutive dilution when below 200m vertical depth. Included high-grade intercepts are reported as any consecutive interval with grades greater than 10 g/t Au. Grades have not been capped in the averaging and intervals are reported as drill thickness.

 

Hole No. Azimuth (°) Dip (°) Length (m) UTM E UTM N Prospect
NFGC-22-816 300 -45 291 659185 5429676 K2
NFGC-22-827 300 -45 390 659188 5429731 Everest
NFGC-22-888 300 -45 272 659547 5430506 Everest
NFGC-22-892 300 -45 242 658967 5429766 K2
NFGC-22-898 260 -44 230 658965 5429766 K2
NFGC-22-902 120 -45 218 658970 5429767 K2
NFGC-22-930 300 -45 299 659506 5430530 Everest
NFGC-22-938 359 -47 158 659051 5429922 K2

 

 - 56 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

NFGC-22-940 90 -45 135 658986 5429330 Everest
NFGC-22-943 300 -47 221 658359 5429317 Monte Carlo
NFGC-22-952 300 -45 360 659249 5429986 K2
NFGC-22-959 35 -66 293 658934 5429699 K2
NFGC-22-1002 320 -60 194 658974 5429719 K2
NFGC-22-1013 320 -60 317 659000 5429765 K2
NFGC-22-1025 315 -45 182 658278 5429116 Monte Carlo
NFGC-22-1045 120 -45 242 658658 5429190 Monte Carlo
NFGC-22-1070 280 -45 230 658588 5429172 Monte Carlo
NFGC-23-1135 332 -45 185 658657 5429192 Monte Carlo
NFGC-23-1145 5 -42 173 658659 5429192 Monte Carlo
NFGC-23-1147 270 -53 189 659036 5429590 Everest
NFGC-23-1151 300 -45 164 658657 5429196 Monte Carlo
NFGC-23-1303 345 -60 227 658956 5430041 K2
NFGC-23-1310 25 -45 65 658957 5430041 K2
NFGC-23-1315 270 -60 53 658956 5430041 K2
NFGC-23-1387 345 -45 50 658939 5430042 K2
NFGC-23-1391 345 -45 53 658907 5430027 K2
NFGC-23-1683 0 -45 80 658625 5429206 Monte Carlo
NFGC-23-1687 325 -42 146 658632 5429149 Monte Carlo
NFGC-23-1690 25 -45 219 658618 5429078 Monte Carlo

 

The latest results from the K2/Zone 36, Monte Carlo, and Everest zones are shown in the long sections and plan map below:

 

 - 57 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project – Dome- Everest plan view map (October 11, 2023)

 

 - 58 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project- K2 inclined 3-D view (looking southeast)

 

 - 59 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project – K2/Zone 36 long section, looking northwest (August 28, 2023)

 - 60 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project – Monte Carlo long section, looking northwest (October 11, 2023)

 

Golden Joint Drilling

 

On June 30, 2021, the Company announced the discovery of a new high-grade zone in the footwall of the AFZ approximately 1km north of Keats named the “Golden Joint” with initial highlight intervals of 10.4 g/t Au over 4.85m in NFGC-21-171 and 430 g/t Au over 5.25m in NFGC-21-241. Further assay results were published on September 28, 2021, with a notable intersection in NFGC-21-386 yielding 70.7 g/t Au over 5.25m. On January 19, 2022, the results reported showed the expansion of the Golden Joint Main Zone to a vertical depth of ~305m with drill hole NFGC-21-401 intersecting 98.1g/t Au over 3.85m and a vein-defined strike length of ~250m. Infill drilling results reported on March 24, 2022, identified a domain of significant high-grade in NFGC-21-462 which returned 69.2 g/t Au over 14.15m.

 

Drilling to date at the Golden Joint Hanging Wall (“HW”) Zone, located immediately east of the Golden Joint Main Zone has extended the zone over a strike length of 185m and to a vertical depth of 150m. Highlight intervals include 64.9 g/t Au over 2.10m and 17.4 g/t Au over 2.45m in NFGC-21-225 reported on September 30, 2021, 33.1 g/t Au over 2.10m in NFGC-21-274 reported on January 6, 2022, 4.96 g/t Au over 6.20m in NFGC-21-187 reported on January 6, 2022 and the latest reported result on March 24, 2022 of 13.4 g/t Au over 2.10m in NFGC-21-264.

 

 - 61 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

The Golden Joint prospect is comprised of two sub-parallel vein systems (Main Zone and HW Zone) and is located between the Keats and Lotto zones. Golden Joint Main Zone, consists of an approximately north-south striking, steeply west-dipping quartz vein and associated brittle fault in the footwall to the AFZ whereas the HW Zone forms a network of stock-work style veining that is largely constrained to a thick bed of greywacke and is more distal to the AFZ. The Golden Joint Main vein carries high-grade gold mineralization and has a vertical depth of 305 m, and a strike length of 250 m. The vein has been intersected at depths as great as 385 m and remains open down-dip.

 

A drilling program at Golden Joint utilizing a barge drill was recently completed that was designed to test the upper 100m of the Golden Joint Zone that was not reachable from land. This program successfully expanded the Golden Joint Zone to surface and initial results received indicate strong continuity of high-grade gold to surface with the highlight intervals of 66.2 g/t Au over 2.65m and 24.0 g/t Au over 2.10m in NFGC-23-1482 located 14m and 34m below surface respectively and 16.5 g/t Au over 7.40m in NFGC-23-1535 occurring a further 65m below surface (all reported on October 23, 2023).

 

Several assays are pending from the shallow infill program and Golden Joint is now drill defined from surface down to a vertical depth of 385m, future exploration will focus on expanding mineralization to depth, where it remains open.

 

2022 assay results have been reported in press release dated January 6, 2022, January 19, 2022, March 24, 2022, and October 23, 2023, found through SEDAR+.

 

Highlighted assay values and drill hole locations from Golden Joint drilling are shown in the tables below:

 

Hole No. From (m) To (m) Interval (m) Au (g/t) Zone
NFGC-21-2642 102.00 104.10 2.10 13.35 HW
NFGC-21-2743 164.65 166.75 2.10 33.10 HW
NFGC-21-3861 424.75 430.00 5.25 70.65 Main
NFGC-21-4013 450.15 454.00 3.85 98.13 Main
NFGC-21-4623 325.75 339.90 14.15 69.15 Main
Including 325.75 330.70 4.95 40.36 Main
Including 326.30 327.25 0.95 182.50
And including 333.30 339.90 6.60 117.85
Including 333.30 334.25 0.95 96.10
Including 335.85 337.15 1.30 190.63
Including 338.00 339.90 1.90 228.03
NFGC-23-11232 150.55 152.70 2.15 26.55 Main
Including 150.55 150.85 0.30 190.24
NFGC-23-14821 15.90 18.00 2.10 24.01 Main
Including 17.00 17.35 0.35 140.00
And1 44.70 47.35 2.65 66.16
Including 45.95 46.80 0.85 194.00
NFGC-23-15282 86.70 98.70 12.00 2.46 Main
Including 86.70 87.60 0.90 23.90
NFGC-23-15353 116.50 123.90 7.40 16.54 Main
Including 116.50 117.10 0.60 165.13
Including 122.15 122.75 0.60 13.09
Including 123.50 123.90 0.40 29.08
NFGC-23-15492 41.85 50.00 8.15 3.98 Main
Including 45.00 46.15 1.15 17.10
NFGC-23-15853 85.95 88.60 2.65 67.48 Main
Including 85.95 87.60 1.65 107.98  

 

 - 62 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

NFGC-23-15972 170.05 172.20 2.15 21.85 Main
Including 170.05 171.70 1.65 28.37

 

Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 170% to 95%, 240% to 70% and 310% to 40% of reported intervals. 4True widths are unknown at this time. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional uncertainty in true width. As of March 1, 2023, composite intervals reported carry a minimum weighted average of 1 g/t Au diluted over a minimum core length of 2m with a maximum of 4m consecutive dilution when at depths above 200m vertical depth and 2m consecutive dilution when below 200m vertical depth. Prior to this date, all composites allowed for 2m consecutive dilution. Included high-grade intercepts are reported as any consecutive interval with grades greater than 10 g/t Au. Grades have not been capped in the averaging and intervals are reported as drill thickness.

 

Hole No. Azimuth (°) Dip (°) Length (m) UTM E UTM N Prospect
NFGC-21-264 297 -45 438 658595 5428386 Golden Joint
NFGC-21-274 294 -49 552 658616 5428373 Golden Joint
NFGC-21-386 298.5 -46.5 582 658634 5428306 Golden Joint
NFGC-21-401 298.5 -46.5 492 658613 5428319 Golden Joint
NFGC-21-462 298 -47.5 486 658590 5428331 Golden Joint
NFGC-23-1123 32 -45 240 658352 5428137 Golden Joint
NFGC-23-1482 150 -66 92 658404 5428351 Golden Joint
NFGC-23-1528 122 -51 107 658364 5428357 Golden Joint
NFGC-23-1535 88 -60 149 658361 5428358 Golden Joint
NFGC-23-1549 84 -45 62 658396 5428325 Golden Joint
NFGC-23-1585 355 -44 189 658504 5428381 Golden Joint
NFGC-23-1597 280 -48 225 658504 5428381 Golden Joint

 

The latest results from the Golden Joint prospect are shown in the long section, plan map and cross-section below:

 

 - 63 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project – Golden Joint – Lotto North plan map (October 23, 2023)

 

 - 64 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project – Golden Joint – Lotto North long section, looking northwest (October 23, 2023)

 

 - 65 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project – Golden Joint cross-section, +/- 12.5m, looking northeast (February 16, 2023)

 

TCH, Knob (Rocket Vein) and Grouse

 

The Trans-Canada Highway (TCH) prospect is located between Cokes and Knob.

 

On January 18, 2023, the Company announced results from its drilling at the TCH prospect where systematic reconnaissance grid drilling south of the Trans-Canada highway along the eastern side of the AFZ identified a new gold-bearing zone called “TCH (Trans Canada Highway)” with intercepts of 79.6 g/t Au over 2.00m in NFGC-22-863, 10.5 g/t Au over 2.45m in NFGC-22-642 and 1.02 g/t Au over 10.70m in NFGC-22-703. This structure is located in the footwall to the AFZ and has been intersected over a strike length of 190m and down to a vertical depth of 300m.

 

At the TCH prospect, mineralization has been identified in structures located in both the hangingwall (TCW) and footwall (TCH) of the AFZ. Epizonal-style veining is associated with significant brittle faulting and silicification in the siltstones. Follow-up exploration drilling is planned in this region in search of Keats West-like structures west of the AFZ.

 

 - 66 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Also announced on January 18, 2023, were results from targeted drilling at the Knob prospect which identified a new vein now called “Rocket” located 100m to the northeast. The highlight interval of 12.6 g/t Au over 4.45m in NFGC-22-704 was intersected at a vertical depth of 65m. Subsequent follow-up drilling expanded on this discovery intersecting 49.5 g/t Au over 2.30m in NFGC-22-704 48m along strike (reported on June 20, 2023).

 

Further north, exploration at Knob-Quarry, targeting a series of approximately east-west striking structures similar in orientation to the KBFZ identified significant gold mineralization hosted in and around the greywacke, a coarser-grained sedimentary rock that occurs at Queensway interbedded with the shales and adjacent to the AFZ, with highlight interval NFGC-22-906 returning 20.2 g/t Au over 3.35m (reported on June 20, 2023). This interval is located 150m from the surface and 250m east of the AFZ.

 

The Knob zone is a historical discovery with mineralization hosted within an east-west striking structure largely constrained to greywacke which has been traced over a strike length of 160m and has seen minimal modern-day drilling. Limited drilling has been completed in the Knob prospect area due to access issues and other drilling priorities. No immediate follow-up work is scheduled at this time and is pending suitable access.

 

On September 20, 2023, the Company announced the results of a first pass program at the Grouse Zone located 2km south of Keats, a historic showing discovered by trenching and tested by limited drilling in the early 2000s. This initial program identified significant gold mineralization akin to the Knob Zone consisting of massive to stockwork-style quartz veins developed within and around a thick bed of greywacke hosted by an east-west striking fault zone located 300m east of the AFZ. Highlight intervals of this program include 3.56 g/t Au over 4.90m in NFGC-22-1005, 1.34 g/t Au over 9.70m in NFGC-22-1047 and 2.32 g/t Au over 5.55m in NFGC-22-1053, along with the presence of visible gold and several additional significant intervals. Mineralization has been identified over an area 100m along strike, starting near surface and reaching a depth of 80m.

 

The Grouse Zone is now the southernmost gold zone drilled at Queensway North. Measuring from Grouse north to the Everest Zone spans 6.1km of strike where high-grade gold mineralization has been identified through near-surface drilling, indicating that the gold mineralization footprint of the AFZ continues a full 2.7km south of Keats.

 

2022 and 2023 assay results have been reported in press releases February 24, 2022, January 18, 2023, and September 20, 2023, found through SEDAR+.

 

Highlighted assay values and drill hole locations from TCH and Rocket (Knob) drilling are shown in the tables below:

 

Hole No. From (m) To (m) Interval (m) Au (g/t) Zone
NFGC-22-6422 303.45 305.90 2.45 10.45 TCH
Including 303.80 304.35 0.55 14.46
Including 305.40 305.90 0.50 32.43
NFGC-22-7034 183.00 193.70 10.70 1.02 TCH
NFGC-22-8634 427.10 429.10 2.00 79.62 TCH
Including 427.10 427.80 0.70 226.46
NFGC-22-7041 86.60 91.05 4.45 12.63

Knob

(Rocket Vein)

Including 88.00 88.45 0.45 118.50
NFGC-22-9064 192.95 196.30 3.35 20.15 Quarry
Including 192.95 193.25 0.30 215.00
NFGC-22-9501 23.50 25.80 2.30 49.45

Knob

(Rocket Vein)

Including 24.90 25.40 0.50 227.00
NFGC-22-10051 16.60 21.50 4.90 3.56 Grouse
Including 18.25 18.80 0.55 17.41

 

 - 67 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

And3 43.85 45.85 2.00 8.51  
Including 43.85 44.85 1.00 17.01
And3 50.40 52.60 2.20 6.77
Including 51.20 51.75 0.55 19.14
NFGC-22-10473 61.35 71.05 9.70 1.34 Grouse
NFGC-22-10534 74.60 76.90 2.30 2.74 Grouse
And1 89.20 94.75 5.55 2.32
And4 136.10 138.10 2.00 2.67

 

Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 170% to 95%, 240% to 70% and 310% to 40% of reported intervals. 4True widths are unknown at this time. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional uncertainty in true width. As of March 1, 2023, composite intervals reported carry a minimum weighted average of 1 g/t Au diluted over a minimum core length of 2m with a maximum of 4m consecutive dilution when at depths above 200m vertical depth and 2m consecutive dilution when below 200m vertical depth. Prior to this date, all composites allowed for 2m consecutive dilution. Included high-grade intercepts are reported as any consecutive interval with grades greater than 10 g/t Au. Grades have not been capped in the averaging and intervals are reported as drill thickness.

 

Hole No. Azimuth (°) Dip (°) Length (m) UTM E UTM N Prospect
NFGC-22-642 300 -45 500 657636 5426511 TCH
NFGC-22-703 300 -45 284 657594 5426495 TCH
NFGC-22-704 100 -50 107 657192 5425868 Rocket
NFGC-22-863 300 -45 472 657573 5426335 TCH
NFGC-22-906 165 -45 335 657285 5425980 Knob
NFGC-22-950 120 -45 185 657218 5425818 Knob
NFGC-22-1005 200 -45 128 656814 5425185 Grouse
NFGC-22-1047 204 -42 125 656836 5425243 Grouse
NFGC-22-1053 230 -45 143 656835 5425243 Grouse

 

 - 68 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

The latest results from the TCH, Knob (Rocket Vein) and Grouse are shown the plan map below:

 

 

 

Queensway Project – Knob – Keats Main South plan map (September 20, 2023)

 - 69 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

JBP Drilling

 

On March 9, 2022, the Company announced results from reconnaissance diamond drilling designed to test for epizonal style high-grade gold mineralization along the JBPFZ. This initial phase of drilling focused on a +3.5km segment of the JBPFZ encompassing 1744 and Pocket Pond target areas following up on historic drill results, high-grade float samples and Au-in-till anomalies as well as testing new conceptual targets. This program to date has produced a number of salient results including 31.9 g/t Au over 2.05m in NFGC-21-180 at 1744 and 25.4 g/t Au over 2.25m in NFGC-21-304 at Pocket Pond.

 

Further work is needed to define mineralization at 1744, but preliminary interpretation suggest that gold may be hosted in two subparallel zones that dip steeply toward the northwest; these zones consist of discrete domains of brittle deformation associated with folding within a green siltstone unit. Gold is hosted in irregular massive to vuggy stylolitic veins with trace pyrite, chalcopyrite, arsenopyrite and boulangerite and has the same NH4 muscovite alteration signature seen elsewhere along the AFZ.

 

At Pocket Pond, drilling has identified mineralization like that seen in the 1744 area, characteristic of the JBP structural trend of epizonal-style, with irregular stylolitic massive to vuggy veins that are spatially associated with brittle faulting and folding in a green siltstone unit Continuity of grade has been difficult to establish; preliminary interpretation suggests that some of the Pocket Pond veins may dip steeply to the northwest.

 

Continued exploration drilling is planned for the JBPFZ in 2023 to expand on these discoveries in addition to test several unexplored targets along this trend.

 

2022 assay results have been reported in press release on March 9, 2022, found through SEDAR+.

 

Highlighted assay values and drill hole locations from the JBP drilling are shown in the tables below:

 

Hole No. From (m) To (m) Interval (m)1 Au (g/t) Zone
NFGC-21-1801 32.00 34.05 2.05 31.88 1744
NFGC-21-1951 283.70 286.50 2.80 16.66 1744
NFGC-21-2021 145.85 147.90 2.05 17.10 1744
NFGC-21-2072 60.00 66.00 6.00 8.66 1744
Including 63.55 66.00 2.45 19.66
NFGC-21-2302 87.00 89.00 2.00 8.92 Pocket Pond
NFGC-21-2452 152.60 154.80 2.20 7.26 Pocket Pond
NFGC-21-3042 81.60 83.85 2.25 25.40 Pocket Pond
And 90.50 96.35 5.85 5.46
Including 90.50 93.85 3.35 8.94

 

1Note that the host structures are interpreted to be steeply dipping and true widths are generally estimated to be 20% to 70% of reported intervals.2 True widths are unknown at this time. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional uncertainty in true width. Intervals are calculated at a 1 g/t Au cut-off grade; grades have not been capped in the averaging.

 

Hole No. Azimuth (°) Dip (°) Length (m) UTM E UTM N Prospect
NFGC-21-180 300 -45 245 665204 5430850 1744
NFGC-21-195 300 -45 304 665267 5430870 1744
NFGC-21-202 300 -45 245 665190 5430887 1744
NFGC-21-207 299 -45.5 341 665232 5430862 1744
NFGC-21-230 119 -45.5 182 663403 5428873 Pocket Pond
NFGC-21-245 120 -45 251 663365 5428880 Pocket Pond
NFGC-21-304 121 -45.5 182 663432 5428898 Pocket Pond

 

 - 70 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

The latest results from the JBPFZ covering both 1744 and Pocket Pond target areas are shown in the long sections and plan maps below:

 

 

 

Queensway Project – 1744 long section, looking northwest (February 16, 2023)

 

 - 71 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project – 1744 plan map (February 16, 2023)

 - 72 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Queensway Project – Pocket Pond long section, looking northwest (February 16, 2023)

 - 73 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

Queensway Project – Pocket Pond plan map (February 16, 2023)

 

Queensway North – 3-D Seismic Program

 

On March 7, 2023, the Company announced the commencement of a 3-D seismic survey being conducted by HiSeis, an Australian based leader in 3-D seismic technology, responsible for conducting similar surveys at numerous projects globally for the mining sector, including at Agnico Eagle’s Fosterville Mine. This is the first survey of its kind to be conducted on the island of Newfoundland and one of the first in North America. Its implementation will not only aid in the geologic understanding of the Queensway Project but of the entire central Newfoundland gold belt.

 

The survey was planned to cover an area 5.8km wide and spanning 8km of strike length along the AFZ and JBPFZ, encompassing known significant mineralized zones such as Keats, Keats West, Iceberg, Golden Joint and Lotto, as well as large areas that remain undrilled. This technology provides high-resolution penetration up to 3km below surface, with coarser resolution to 8km depth.

 

 - 74 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Drilling completed by the Company to date has primarily focused shallowly on the first 200m from surface and within a 200m window on either side of the AFZ. By collecting seismic data across the known zones, the Company will be able to effectively train a 3D dataset, with the goal of identifying similar looking, prospective zones both outside of this narrow window and at depth.

 

On August 21, 2023, the Company reported that the seismic program acquisition phase had been completed and the program will move into its final phase of data cleaning, compilation and interpretation. This work is expected to provide deliverables in Q1, 2024. The survey utilized approximately 20,000 energy source points spaced at 12.5m intervals along 260km of source lines, as well as approximately 25,000 geophone receiver stations, generating 3-D seismic data across a 47km2 grid. Source lines were spaced at 100m intervals and perpendicular receiver lines were constructed at 100m interims to optimize resolution from 200-1,000m in depth, with good resolution penetrating to 3,000m.

 

The details of the seismic program have been reported in press release on March 7, 2023, and June 26, 2023, found through SEDAR+.

 

 

 - 75 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Region Covered by the Seismic Survey

 

 

Example images of 3-D Seismic Data: Above: Raw seismic reflection data, Below: Modelled and interpreted seismic reflection data

 

^Note that these images are not data collected at the Queensway Project and are for representation purposes

 

Regional Exploration – Queensway South

 

Starting in June 2020, the Company initiated a field reconnaissance program within the QWS mineral licenses. The objective of this program was to conduct geological mapping, structural analysis, prospecting and the collection of C horizon till samples to be processed for gold grain analysis. This work has continued each field season through to 2023 and has evolved to include soil sampling and trenching. The goal of these field programs has been to aid in the development of drilling targets for testing in an inaugural diamond drill program which began in 2022.

 

Highlight results from these field activities include the results from the 2020 field program detailed till survey which were reported in August 27, 2020, where the Company had announced it had found a new fertile gold region 45km south of the current QWN drill targets.

 

The Eastern Pond target is comprised of two areas where recent till results have shown highly anomalous total gold grain counts including a high percentage of pristine gold grains and yielded several sub-crop samples up to 15.0 g/t Au.

 

One till sample yielded 216 gold grains, 163 (75%) of them classified as pristine. A second cluster of samples yielded up to 155 gold grains with 127 (82%) of these classified as pristine. The pristine morphology of these grains indicates that they have not travelled far from their bedrock source.

 

 - 76 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

To date the Eastern Pond target is defined by sub-crop and till sample results over an approximately 4km of strike length. Five other gold in till anomalies have been discovered to date within QWS and warrant follow up exploration including Pauls Pond.

 

At Pauls Pond, an area located approximately 50km south of the Keats Zone, continued prospecting, till and soil sampling and trenching identified an area with a high concentration of gold anomalies on both sides of the interpreted extension of the AFZ.

 

In August 2022, a diamond drill was mobilized to the Pauls Pond area to test drill-ready targets generated from the previous field programs, this was the first ever drilling program conducted by NFGC. This program consisted of 7,255m drilled in 33 holes over 7 target areas including Aztec, Bernards Pond, Devil’s Trench, Eastern Pond, Goose, Greenwood, and Paul’s Pond.

 

Twenty-seven of thirty-three drill holes hit significant gold mineralization while ten drill holes contained visible gold across four target areas in this initial drill program. Several new discoveries were made along an 18.5km corridor that were prioritized due to the amount of gold found in the surficial environment; specific targets tested occur on both sides of the AFZ and exhibit a combination of favourable characteristics including elevated Au-in-grab, till and soil samples.

 

At Pauls Pond, seventeen drillholes were completed leading to three new discoveries: “Astronaut”, “Nova” and “Nebula” as well as the expansion of the historic “Goose” zone. Astronaut and Nova are parallel structures located west of the AFZ that have been traced over 1,600m and 250m of strike length, respectively. At Astronaut and Nova, eight out of nine holes drilled contained visible gold, including highlight interval of 19.0 g/t Au over 3.15m in NFGC-QS-22-20. The Company believes these two zones connect through to the Goose zone, which if confirmed would expand this mineralized corridor to 2.5km in strike length.

 

Nebula, the third discovery in the Pauls Pond area, is located on the east side of the AFZ and drill testing of a prominent Au-in-soil anomaly with two holes identified significant mineralization that is associated with a near-surface shear zone that returned an initial highlight result of 3.70 g/t Au over 4.30m in NFGC-QS-22-25.

 

On the east side of the AFZ drill testing of two trenched Au-in soil and till anomalies led to two new discoveries, “Devils Pond” and “Devils Pond South”. These zones are located 12km apart and all drillholes at both targets intersected broad domains of highly anomalous gold including highlight intervals of 0.47 g/t Au over 8.00m and 0.37 g/t Au over 28.00m in NFGC-QS-22-15 at Devils Pond and 1.01 g/t Au over 8.80m in NFGC-QS-22-30 at Devils Pond South.

 

On July 26, 2023, the Company announced the commencement of a Phase II diamond drilling program consisting of approximately 10,000m to follow up on results of its inaugural 2022 program and test new targets along an 18.5km long stretch of the AFZ at QWS.

 

2023 assay results have been reported in press releases on May 25, 2023, and July 26, 2023, found through SEDAR+.

 

 - 77 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Highlighted assay values and drill hole locations from the Queensway South drilling are shown in the tables below:

 

Hole No. From (m) To (m) Interval (m) Au (g/t) Zone
NFGC-QS-22-18 183.00 190.10 7.10 2.13 Astronaut
Including* 186.00 189.70 3.70 3.85
NFGC-QS-22-19 197.00 207.00 10.00 1.03 Astronaut
Including* 199.90 201.95 2.05 4.29
Including^ 199.90 200.55 0.65 11.47
NFGC-QS-22-20 227.45 232.30 4.85 12.35 Astronaut
Including* 227.45 230.60 3.15 18.95
Including^ 229.10 229.85 0.75 72.60
NFGC-QS-22-21 37.00 52.20 15.20 0.81 Nova
Including* 37.00 46.50 9.50 1.09
NFGC-QS-22-22 206.15 209.70 3.55 5.17 Astronaut
Including* 207.30 209.30 2.00 8.88
Including^ 208.30 209.30 1.00 14.69
NFGC-QS-22-25* 18.55 22.85 4.30 3.70 Nebula
Including 18.55 21.60 3.05 4.92
Including 22.25 22.85 0.60 1.29
NFGC-QS-22-30 70.00 78.80 8.80 1.01 Devils Pond South
Including* 72.00 78.80 6.80 1.17

 

At Queensway South, host structures are interpreted to be steeply dipping and true widths are unknown at this time, additional drilling is required to assess the true width of intersected vein structures. Composite intervals reported carry a minimum weighted average of 0.25 g/t Au diluted over a minimum core length of 2m with a maximum of 4m consecutive dilution. Included high-grade intercepts are reported as any consecutive interval with grades greater than 1 g/t Au. *Composite intervals reported carry a minimum weighted average of 1 g/t Au diluted over a minimum core length of 2m with a maximum of 4m consecutive dilution. ^Included high-grade intercepts are reported as any consecutive interval with grades greater than 10 g/t Au. Grades have not been capped in the averaging and intervals are reported as drill thickness.

 

Hole No. Azimuth (°) Dip (°) Length (m) UTM E UTM N Prospect
NFGC-QS-22-18 125 -45 335 636772 5391456 Pauls Pond
NFGC-QS-22-19 125 -45 290 636528 5391234 Pauls Pond
NFGC-QS-22-20 125 -45 383 636731 5391485 Pauls Pond
NFGC-QS-22-21 125 -45 275 636434 5391138 Pauls Pond
NFGC-QS-22-22 125 -45 272 636333 5391070 Pauls Pond
NFGC-QS-22-25 135 -45 218 638312 5392358 Pauls Pond
NFGC-QS-22-30 115 -45 101 634043 5385020 Devils Pond South

 

 - 78 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

Queensway Project: Gold occurrences in rocks and tills and major prospects

 

 - 79 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

 

Regional drill targets at QWS

 

 - 80 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

 

Goose – Nebula plan view map

 

Regional Exploration – VOA Option

 

In November 2022, the Company entered into an option agreement which gained approximately 6.1km of strike on the AFZ. Beginning in early 2023 a regional exploration program was launched which involved first-pass soil sampling, mapping and prospecting with the intention of identifying drill-targets for testing in Q3 2023.

 

Sampling, Sub-sampling and Laboratory

 

All drilling recovers HQ core. Drill core is split in half using a diamond saw or a hydraulic splitter for rare intersections with incompetent core.

 

A geologist examines the drill core and marks out the intervals to be sampled and the cutting line. Sample lengths are mostly 1.0 meter and adjusted to respect lithological and/or mineralogical contacts and isolate narrow (<1.0m) veins or other structures that may yield higher grades.

 

Technicians saw the core along the defined cutting line. One-half of the core is kept as a witness sample and the other half is submitted for analysis. Individual sample bags are sealed and placed into totes, sealed and marked with the contents.

 

 - 81 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

NFG submits samples for gold determination by fire assay to ALS Canada Ltd. (“ALS”) and by photon assay to MSALABS (“MSA”) since June 2022. ALS and MSA operate under a commercial contract with New Found.

 

Drill core samples are shipped to ALS for sample preparation in Sudbury, Ontario, Thunder Bay, Ontario, or Moncton, New Brunswick. ALS is an ISO-17025 accredited laboratory for the fire assay method.

 

Drill core samples are also submitted to MSA in Val-d’Or, Quebec. MSA operates numerous laboratories worldwide and maintains ISO-17025 accreditation for many metal determination methods. MSA is an ISO-17025 accredited laboratory for the photon assay method.

 

At ALS, the entire sample is crushed to approximately 70% passing 2mm. A 3,000-g split is pulverized. “Routine” samples do not have visible gold (VG) identified and are not within a mineralized zone. Routine samples are assayed for gold by 30-g fire assay with an inductively-couple plasma spectrometry (ICP) finish. If the initial 30-g fire assay gold result is over 1 g/t, the remainder of the 3,000-g split is screened at 106 microns for screened metallics assay. For the screened metallics assay, the entire coarse fraction (sized greater than 106 microns) is fire assayed and two splits of the fine fraction (sized less than 106 microns) are fire assayed. The three assays are combined on a weight-averaged basis. Samples that have VG identified or fall within a mineralized interval are automatically submitted for screened metallic assay for gold.

 

At MSA, the entire sample is crushed to approximately 70% passing 2mm. For “routine” samples that do not have VG identified and are not within a mineralized zone, the samples are riffle split to fill two 450g jars for photon assay. The assays reported from both jars are combined on a weight-averaged basis. If one of the jars assays greater than 1 g/t, the remaining crushed material is weighed into multiple jars and are submitted for photon assay.

 

For samples that have VG identified or are within a mineralized zone, the entire crushed sample is weighed into multiple jars and are submitted for photon assay. The assays from all jars are combined on a weight-averaged basis.

 

All samples prepared at ALS or MSA are also analyzed for a multi-element ICP package (ALS method code ME-ICP61) at ALS Vancouver.

 

Drill program design, Quality Assurance/Quality Control and interpretation of results are performed by qualified persons employing a rigorous Quality Assurance/Quality Control program consistent with industry best practices. Standards and blanks account for a minimum of 10% of the samples in addition to the laboratory’s internal quality assurance programs.

 

Quality Control data are evaluated on receipt from the laboratories for failures. Appropriate action is taken if assay results for standards and blanks fall outside allowed tolerances. All results stated have passed New Found’s quality control protocols.

 

New Found’s quality control program also includes submission of the second half of the core for approximately 2% of the drilled intervals. In addition, approximately 1% of sample pulps for mineralized samples are submitted for re-analysis to a second ISO-accredited laboratory for check assays.

 

The Company does not recognize any factors of drilling, sampling or recovery that could materially affect the accuracy or reliability of the assay data disclosed.

 

 - 82 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

The assay data disclosed in this news release have been verified by the Company’s Qualified Person against the original assay certificates.

 

The Company notes that it has not completed any economic evaluations of its Queensway Project and that the Queensway Project does not have any resources or reserves.

 

Lucky Strike Project, Ontario

 

On May 25, 2023, the Company disposed of its 100% interest in the Lucky Strike project near Kirkland Lake, Ontario comprising 11,684 hectares to Kirkland Lake Discoveries Corp. (TSXV: KLDC) for total non-cash consideration comprised of 28,612,500 common shares and 1.0% net smelter return royalty on future production from the mineral claims. The investment represents 32.29% of the issued and outstanding common shares of Kirkland Lake Discoveries Corp. NFG exercised its right to nominate two additional directors to the board of directors of Kirkland Lake Discoveries Corp. and the companies have a director and officer in common, being Denis Laviolette, Director and President.

 

 - 83 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

The schedules below summarize the carrying costs of acquisition costs and exploration expenditures incurred to date for each exploration and evaluation asset that the Company is continuing to explore as at September 30, 2023 and December 31, 2022:

 

   Newfoundland     
Nine months ended September 30, 2023  Queensway
$
   Other
$
   Ontario
$
   Total
$
 
Exploration and evaluation assets                    
Balance as at December 31, 2022   8,616,693    47,916    272,000    8,936,609 
Additions                    
Acquisition costs   8,034    -    -    8,034 
Claim staking and license renewal costs   5,365    -    -    5,365 
Disposals                    
Disposal of exploration and evaluation assets   -    -    (264,000)   (264,000)
Impairment of exploration and evaluation assets   -    -    (8,000)   (8,000)
Balance as at September 30, 2023   8,630,092    47,916    -    8,678,008 
                     
Exploration and evaluation expenditures                    
Cumulative exploration expense - December 31, 2022   121,302,318    539,998    3,428,034    125,270,350 
Assays   11,652,871    14,401    -    11,667,272 
Drilling   32,427,943    -    -    32,427,943 
Environmental studies   1,004,980    -    -    1,004,980 
Geochemistry   641,513    -    -    641,513 
Geophysics   639,268    -    -    639,268 
Imagery and mapping   491,554    6,854    -    498,408 
Metallurgy   792,495    -    -    792,495 
Office and general   644,792    -    144    644,936 
Optimization studies   86,053    -    -    86,053 
Permitting   212,731    -    -    212,731 
Property taxes, mining leases and rent   127,560    -    5,040    132,600 
Reclamation   1,686,212    -    -    1,686,212 
Salaries and consulting   9,854,749    10,103    13,850    9,878,702 
Seismic survey   7,515,148    -    -    7,515,148 
Supplies and equipment   3,846,967    -    480    3,847,447 
Technical reports   55,025    -    -    55,025 
Travel and accommodations   1,157,388    309    155    1,157,852 
Trenching   710,003    -    -    710,003 
Exploration cost recovery   (45,450)   -    -    (45,450)
    73,501,802    31,667    19,669    73,553,138 
Cumulative exploration expense – September 30, 2023   194,804,120    571,665    3,447,703    198,823,488 

 

 - 84 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

   Newfoundland         
Nine months ended September 30, 2022  Queensway
$
   Other
$
   Ontario
$
   Total
$
 
Exploration and evaluation assets                    
Balance as at December 31, 2021   8,236,181    17,700    271,600    8,525,481 
Additions                    
Claim staking and license renewal cost   2,499    120    400    3,019 
Balance at September 30, 2022   8,238,680    17,820    272,000    8,528,500 
                     
Exploration and evaluation expenditures                    
Cumulative exploration expense – December 31, 2021   51,439,957    59,646    2,350,201    53,849,804 
Assays   7,285,954    4,994    233,314    7,524,262 
Drilling   25,705,255    1,081,599    449,063    27,235,917 
Environmental studies   284,644    -    -    284,644 
Geochemistry   32,541    -    -    32,541 
Geophysics   1,388,844    -    177,916    1,566,760 
Imagery and mapping   67,830    -    -    67,830 
Office and general   345,429    50    4,004    349,483 
Property taxes, mining leases and rent   70,807    -    2,227    73,034 
Petrography   9,372    -    -    9,372 
Reclamation   280,050    -    -    280,050 
Salaries and consulting   7,325,725    16,900    134,329    7,476,954 
Supplies and equipment   3,934,174    67,853    27,565    4,029,592 
Technical reports   385,786    -    9,567    395,353 
Travel and accommodations   988,035    245    8,953    997,233 
Exploration cost recovery   (60,000)   -    -    (60,000)
    48,044,446    1,171,641    1,046,938    50,263,025 

Cumulative exploration expense – September 30, 2022

   99,484,403    1,231,287    3,397,139    104,112,829 

 

Overall Performance and Results of Operations

 

Total assets decreased to $58,372,521 at September 30, 2023, from $110,687,512 at December 31, 2022, primarily as a result of a decrease in cash of $56,198,301 and investments of $3,848,108, partially offset by an increase in investment in Kirkland Lake Discoveries Corp. of $4,197,034 and increases in secured notes of $2,474,800 and sales taxes recoverable of $554,088. The most significant assets at September 30, 2023 were cash of $25,966,972 (December 31, 2022: $82,165,273), investments of $3,653,047 (December 31, 2022: $7,501,155), sales taxes recoverable of $3,698,376 (December 31, 2022: $3,144,288), exploration and evaluation assets of $8,678,008 (December 31, 2022: $8,936,609), investment in Kirkland Lake Discoveries Corp. of $4,197,034 (December 31, 2022: $Nil), property and equipment of $7,656,495 (December 31, 2022: $7,267,014) and secured notes of $2,474,800 (December 31, 2022: $Nil). Cash decreased by $56,198,301 during the nine months ended September 30, 2023 primarily as a result of cash used in operating activities of $74,659,821 and purchases of secured notes of $2,464,000 and property and equipment of $1,246,559, partially offset by gross proceeds from the issuance of common shares through the Company’s ATM prospectus offering of $22,980,338, net of share issue costs of $540,123.

 

Nine months ended September 30, 2023 and 2022

 

During the nine months ended September 30, 2023, loss from operating activities increased by $23,043,295 to $81,072,107 compared to $58,028,812 for the nine months ended September 30, 2022. The increase in loss from operating activities is largely due to:

 

 - 85 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

-An increase of $23,290,113 in exploration and evaluation expenditures. Exploration and evaluation expenditures were $73,553,138 for the nine months ended September 30, 2023 compared to $50,263,025 for the nine months ended September 30, 2022. The Company continued its 500,000 meter diamond drilling program completing approximately 161,595 meters of drilling in 795 holes, completed a 3D seismic survey program, commenced a trenching program of the Keats Main zone to examine bedrock surface geology and incurred higher costs in connection with the Company’s increase in exploration activity at its Queensway Project during the nine months ended September 30, 2023 compared to completing approximately 140,933 meters of drilling in 493 holes during the nine months ended September 30, 2022.

 

Other items

 

For the nine months ended September 30, 2023, other income was $21,725,641 compared to other expenses of $7,301,889 for the nine months ended September 30, 2022. The $29,027,530 change is largely due to:

 

-An increase of $7,158,463 in settlement of flow-through share premium. Settlement of flow-through share premium was $19,644,699 for the nine months ended September 30, 2023 compared to $12,486,236 for the nine months ended September 30, 2022. The Company incurred $69,750,091 of qualifying Canadian exploration expenses and derecognized $19,644,699 of its flow-through share premium liability during the nine months ended September 30, 2023.

 

-An increase of $4,217,935 in gain on sale of exploration and evaluation assets. Gain on sale of exploration and evaluation assets was $4,217,935 for the nine months ended September 30, 2023 compared to $Nil for the nine months ended September 30, 2022. The increase is due to the sale of the Lucky Strike project for total non-cash consideration having a fair value of $4,657,482 consisting of 28,612,500 common shares of Kirkland Lake Discoveries Corp. and a 1.0% net smelter return royalty on future production from the mineral claims. The Company recognized $175,547 of professional fees in connection with the transaction and derecognized the Lucky Strike project at its carrying value of $264,000 during the nine months ended September 30, 2023.

 

-An increase of $1,538,021 in interest income. Interest income was $2,218,248 for the nine months ended September 30, 2023 compared to $680,227 for the nine months ended September 30, 2022. The increase is due to higher interest rates paid on the Company’s interest-bearing cash balances during the nine months ended September 30, 2023 compared to lower interest rates paid on the Company’s interest-bearing cash balances during the nine months ended September 30, 2022.

 

-A decrease of $11,729,650 in net change in unrealized losses on investments. Net change in unrealized losses on investments was $4,022,608 for the nine months ended September 30, 2023 compared to $15,752,258 for the nine months ended September 30, 2022. The decrease is due to changes in the fair values of investments held at September 30, 2023.

 

-A decrease of $4,675,084 in net realized losses on investments. Net realized losses on investments was $Nil for the nine months ended September 30, 2023 compared to $4,675,084 for the nine months ended September 30, 2022. The decrease is due to no disposals of investments during the nine months ended September 30, 2023 compared to $4,675,084 in net realized losses in relation to the disposal of certain investments during the nine months ended September 30, 2022.

 

The Company recorded loss and comprehensive loss of $59,346,466 or $0.34 basic and diluted loss per share for the nine months ended September 30, 2023 (September 30, 2022: $65,330,701 or $0.39 basic and diluted loss per share).

 

 - 86 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Three months ended September 30, 2023 and 2022

 

During the three months ended September 30, 2023, loss from operating activities increased by $6,821,746 to $29,502,720 compared to $22,680,974 for the three months ended September 30, 2022. The increase in loss from operating activities is largely due to:

 

-An increase of $7,226,438 in exploration and evaluation expenditures. Exploration and evaluation expenditures were $26,945,212 for the three months ended September 30, 2023 compared to $19,718,774 for the three months ended September 30, 2022. The Company continued its 500,000 meter diamond drilling program and completed approximately 47,033 meters of drilling in 292 holes and incurred higher costs in connection with the Company’s 3D seismic survey program, commencement of a trenching program of the Keats Main zone to examine bedrock surface geology and increased exploration activity at its Queensway Project during the three months ended September 30, 2023 compared to completing approximately 65,467 meters of drilling in 233 holes during the three months ended September 30, 2022.

 

The increase in loss from operating activities was partially offset by:

 

-A decrease of $610,757 in share-based compensation. Share-based compensation was $285,222 for the three months ended September 30, 2023 compared to $895,979 for the three months ended September 30, 2022. The decrease is due to no stock options granted and the continued vesting of previously granted stock options with a value of $285,222 during the three months ended September 30, 2023 compared to 360,000 stock options granted and the continued vesting of previously granted stock options with a value of $895,979 during the three months ended September 30, 2022.

 

Other items

 

For the three months ended September 30, 2023, other income was $6,145,204 compared to $4,053,586 for the three months ended September 30, 2022. The $2,091,618 change is largely due to:

 

-An increase of $2,326,369 in settlement of flow-through share premium. Settlement of flow-through share premium was $7,256,740 for the three months ended September 30, 2023 compared to $4,930,371 for the three months ended September 30, 2022. The Company incurred $25,023,242 of qualifying Canadian exploration expenses and derecognized $7,256,740 of its flow-through share premium liability during the three months ended September 30, 2023.

 

-A decrease of $1,037,858 in net realized losses on investments. Net change in realized losses on investments were $Nil for the three months ended September 30, 2023 compared to $1,037,858 for the three months ended September 30, 2022. The decrease is due to no disposals of investments during the three months ended September 30, 2023 compared to $1,037,858 in net realized losses in relation to the disposal of certain investments during the three months ended September 30, 2022.

 

The increase in other income was partially offset by:

 

-An increase of $1,291,168 in net change in unrealized losses on investments. Net change in unrealized losses on investments was $1,581,984 for the three months ended September 30, 2023 compared to $290,816 for the three months ended September 30, 2022. The increase is due to changes in the fair values of investments held at September 30, 2023.

 

The Company recorded loss and comprehensive loss of $23,357,516 or $0.13 basic and diluted loss per share for the three months September 30, 2023 (three months ended September 30, 2022: $18,627,388 or $0.11 basic and diluted loss per share).

 

 - 87 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Summary of Quarterly Results

 

   2023   2022   2021 
   Sep. 30
$
   Jun. 30
$
   Mar. 31
$
   Dec. 31
$
   Sep. 30
$
   Jun. 30
$
   Mar. 31
$
   Dec. 31
$
 
Revenues  -   -   -   -   -   -   -   - 
Loss and comprehensive loss for the period   (23,357,516)(2)   (15,936,607)(3)   (20,052,343)(4)   (24,658,958)(5)   (18,627,388)(6)   (24,294,494)(7)   (22,408,819)(8)   (13,698,269)
Loss per common share (basic and diluted)(1)   (0.13)   (0.09)   (0.11)   (0.14)   (0.11)   (0.15)   (0.14)   (0.09)

 

(1)Per share amounts are rounded to the nearest cent, therefore aggregating quarterly amounts may not reconcile to year-to-date per share amounts.
(2)Increase in loss and comprehensive loss from prior quarter primarily driven by an increase in exploration and evaluation expenditures of $1,984,071, an increase in salaries and consulting of $382,246, an increase in net unrealized losses on investments of $1,052,805, partially offset by a decrease in gain on sale of exploration and evaluation assets of $4,217,935.
(3)Decrease in loss and comprehensive loss from prior quarter primarily driven by an increase in gain on sale of exploration and evaluation assets of $4,217,935, an increase in settlement of flow-through share premium of $1,382,266, a decrease in net unrealized losses on investments of $1,382,266 and a decrease in professional fees of $382,614, partially offset by an increase in exploration and evaluation expenditures of $3,314,356.
(4)Decrease in loss and comprehensive loss from prior quarter primarily driven by a decrease in share-based compensation of $6,514,473 and an increase in settlement of flow-through share premium of $774,982, partially offset by an increase in net unrealized losses on investments of $2,724,750 and an increase in exploration and evaluation expenditures of $489,264.
(5)Increase in loss and comprehensive loss from prior quarter primarily driven by an increase in exploration and evaluation expenditures of $1,438,747, an increase in share-based compensation of $6,148,741, partially offset by a decrease in net realized losses on sale of investments of $1,037,858 and an increase in net unrealized gains on investments of $1,104,121.
(6)Decrease in loss and comprehensive loss from prior quarter primarily driven by a decrease in net realized losses on disposal of investments of $2,599,368 and a decrease in net unrealized losses on investments of $4,916,027, partially offset by an increase in exploration and evaluation expenditures of $2,438,298.
(7)Increase in loss and comprehensive loss from prior quarter primarily driven by an increase in net realized losses on disposal of investments of $3,637,226 and an increase in exploration and evaluation expenditures of $4,016,701, partially offset by an increase in settlement of flow-through share premium of $1,024,289 and a decrease in net unrealized losses on investments of $5,047,756.
(8)Increase in loss and comprehensive loss from prior quarter primarily driven by an increase in net unrealized losses on investments of $7,843,296 and an increase in exploration and evaluation expenditures of $1,168,935, partially offset by an increase in settlement of flow-through share premium $348,526.

 

Liquidity and Capital Resources

 

As at September 30, 2023, the Company had cash of $25,966,972 to settle current liabilities of $10,400,553. As at September 30, 2023, the Company must also spend another $1,443,624 of Qualifying CEE by December 31, 2023 to satisfy its remaining current flow-through liability of $418,651.

 

The Company does not currently have a recurring source of revenue and has historically incurred negative cash flows from operating activities. As at September 30, 2023, the Company had a working capital of $24,818,994 consisting primarily of cash. Subsequent to September 30, 2023, the Company completed a bought deal prospectus offering for gross proceeds of $56,006,250.

 

The Company’s exploration and evaluation assets presently have no proven or probable reserves, and on the basis of information to date, it has not yet determined whether these properties contain economically recoverable resources. The recoverability of amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production.

 

 - 88 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Although the Company presently has sufficient financial resources to cover its existing obligations, the Company expects to require further funding in the longer term to fund its planned programs for the next year. Management is actively targeting sources of additional financing through alliances with financial, exploration and mining entities, or other business and financial transactions which would assure continuation of the Company’s operations and exploration programs. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing. These items give rise to material uncertainties which may cast a significant doubt on the company’s ability to continue as a going concern.

 

The sources of funds currently available to the Company for its acquisition and exploration projects are solely from equity financing. The Company does not have bank debt or banking credit facilities in place as at the date of this report.

 

As at September 30, 2023, the Company had the following commitments (in addition to those disclosed elsewhere in this MD&A):

 

   Total
$
   1 Year
$
   1-3 Years
$
   4-5 Years
$
   After
5 Years
$
 
Lease obligations   345,312    95,618    23,898    24,980    200,816 
Total contractual obligations   345,312    95,618    23,898    24,980    200,816 

 

Property Option Agreement

 

On November 2, 2022, the Company entered into a definitive property option agreement to acquire a 100% interest in five mineral licenses located near Gander, Newfoundland. Under the terms of this agreement, the Company may exercise the option by issuing an aggregate of 487,078 common shares in the capital the Company and making aggregate cash payments of $2,350,000 to the optionors as follows:

 

·$200,000 (paid) and 39,762 common shares (issued) on the later of (i) staking confirmation date as defined in the Option Agreement and (ii) the receipt of the TSX-Venture Exchange’s approval;
·$200,000 (paid subsequent to September 30, 2023) and 39,762 common shares (issued subsequent to September 30, 2023) on or before November 2, 2023;
·$250,000 and 69,583 common shares on or before November 2, 2024;
·$300,000 and 89,463 common shares on or before November 2, 2025;
·$600,000 and 129,224 common shares on or before November 2, 2026; and
·$800,000 and 119,284 common shares on or before November 2, 2027.

 

At-the-Market Distributions (“ATM”) Program

 

In August 2022, the Company filed a prospectus supplement to its short form base shelf prospectus, pursuant to which the Company may, at its discretion and from time-to-time, sell common shares of the Company for aggregate gross proceeds of up to US$100,000,000. The sale of common shares is to be made through “at-the-market distributions” ("ATM"), as defined in the Canadian Securities Administrators’ National Instrument 44-102 Shelf Distributions, directly on the TSX Venture Exchange and the NYSE American stock exchange.

 

 - 89 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Assuming net proceeds of the maximum of US$100,000,000 (less commissions) on or before the expiry of the prospectus on August 22, 2024, the Company intends to use the net proceeds of the offering as follows:

 

Uses of Funds:

Intended Use of Proceeds

(Estimated)

$

Exploration and drilling at the Queensway Project and commissioning of mineral resource estimate US$51,000,000 to US$85,000,000
General, corporate and administrative expenses US$10,000,000 to US$15,000,000
Total Uses US$100,000,000 (less commission)

 

Although the Company intends to use the net proceeds from the offering as set forth above, the actual allocation of the net proceeds may vary from those allocations set out above, depending on the amount raised, the time periods in which the proceeds are raised and future developments in relation to the Company’s projects and unforeseen events.

 

During the nine months ended September 30, 2023, the Company sold 3,552,224 common shares of the Company under the ATM program at an average price of $6.47 per share for gross proceeds of $22,980,338 or net proceeds of $22,440,215, and paid an aggregate commission of $540,123.

 

As at the date of this report, the Company has completed $25,530,015 of the ATM program.

 

As at September 30, 2023, the Company has used $600,000 of the ATM proceeds for general, corporate and administrative expenses, $406,668 for exploration at the Queensway Project, and $24,523,347 remained unspent.

 

Prior Financings

 

November 6, 2023 Financing – Gross Proceeds of $56,006,250

 

On November 6, 2023, the Company completed a bought-deal prospectus offering of 7,725,000 charity flow-through common shares at a price of $7.25 per common share for gross proceeds of $56,006,250. The Company has granted the underwriters an option, exercisable at the offering price up to 30 days following the closing of the offering, to purchase up to an additional 1,158,750 flow-through common shares in connection with the offering.

 

The Company intends to use the gross proceeds from the offering to continue its exploration and drilling activities at its Queensway Project. As at the date of this report, the Company has not yet utilized the proceeds.

 

December 14, 2022 Financing – Net Proceeds of $47,282,373

 

On December 14, 2022, the Company completed a bought-deal prospectus offering of 6,250,000 flow-through common shares at a price of $8.00 per common share for gross proceeds of $50,000,000. The Company paid share issuance costs of $2,717,627 in cash of which $2,104,250 was paid to the underwriters. The premium received on the flow-through shares issued was determined to be $14,500,000.

 

Uses of Funds: 

Intended Use of
Proceeds

(Estimated)

$

  

Actual Use of
Proceeds

$

  

Over/(Under)-
Expenditure at

September 30, 2023

$

 
 Queensway Project work program   50,000,000    48,556,376    (1,443,624)
Total Uses   50,000,000    48,556,376    (1,443,624)

 

As at September 30, 2023, the Company must spend another $1,443,624 of Qualifying CEE by December 31, 2023 to satisfy its remaining current flow-through liability of $418,651.

 

 - 90 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

November 2021 Financing – Net Proceeds of $47,384,035

 

On November 24, 2021, the Company completed a non-brokered private placement financing of 5,000,000 flow-through common shares of the Company at a price of $9.60 per common share for gross proceeds of $48,000,000. The Company paid share issuance costs of $615,965 in cash of which $480,000 were finder’s fees. The premium received on the flow-through shares issued was determined to be $12,600,000.

 

Uses of Funds:  Intended Use of
Proceeds (Estimated)
$
   Actual Use of
Proceeds
$
   Over/(Under)-
Expenditure at
September 30, 2023
$
 
Queensway Project work program   48,000,000    48,000,000    - 
Total Uses   48,000,000    48,000,000    - 

 

August 2020 Initial Public Offering – Net Proceeds of $28,488,581

 

On August 11, 2020, the Company completed an initial public offering of 21,000,000 common shares at a price of $1.30 per share for gross proceeds of $27,300,000 and on August 14, 2020, its agents exercised their overallotment option in full to offer and sell an additional 3,150,000 common shares for gross proceeds of $4,095,000.

 

The Company paid share issuance costs of $2,906,419 in cash and issued 1,379,768 agents’ warrants with a fair value of $771,769. The agents’ warrants are exercisable into common shares of the Company at $1.30 for 12 months from the date of issue in connection with the initial public offering.

 

Uses of Funds:  Intended Use of
Proceeds
(Estimated)
$
   Actual Use of
Proceeds
$
   Over/(Under)-
Expenditure at
September 30, 2023
$
 
Queensway Project work program   21,735,000    21,735,000    - 
General and administrative expenses   4,505,000    4,505,000    - 
Working Capital to fund ongoing operations   5,155,000    5,155,000    - 
Total Uses   31,395,000    31,395,000    - 

 

Outstanding Share Data

 

During the nine months ended September 30, 2023, 178,500 stock options were exercised at a weighted average exercise price of $0.74 per share for gross proceeds of $131,630.

 

Subsequent to September 30, 2023, the Company completed a bought-deal prospectus offering of 7,725,000 charity flow-through common shares at a price of $7.25 per common share for gross proceeds of $56,006,250.

 

Subsequent to September 30, 2023, the Company issued 39,762 common shares pursuant to the acquisition of exploration and evaluation assets in accordance with the terms of certain property option agreements.

 

Subsequent to September 30, 2023, 1,125 unvested stock options with an exercise price of $5.68 per share expired.

 

As at September 30, 2023, there were 179,108,250 common shares issued and outstanding. As at the date of this report, there were 186,873,012 shares issued and outstanding.

 

 - 91 - 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

As at September 30, 2023, there were 12,305,000 stock options and no warrants outstanding. As at the date of this report, there were 12,303,875 stock options and no warrants outstanding.

 

Related Party Transactions

 

All transactions with related parties have occurred in the normal course of operations and on terms and conditions that are similar to those of transactions with unrelated parties and are measured at the amount of consideration paid or received. A summary of the Company’s related party transactions is as follows:

 

   Three months ended
September 30,
   Nine months ended
September 30,
 
   2023
$
   2022
$
   2023
$
   2022
$
 
Amounts paid to EarthLabs Inc. (i) for exploration and evaluation   4,500    13,011    13,500    262,237 
Amounts paid to DigiGeoData Inc. (i) for corporate development and investor relations   -    1,800    -    1,800 
Amounts paid to Notz Capital Corp. (ii) for corporate development and investor relations   43,506    -    60,359    - 

 

(i)EarthLabs Inc. is a related entity having the following common director and officer to the Company: Denis Laviolette, Director and President. DigiGeoData Inc. is a subsidiary of EarthLabs Inc.
(ii)Notz Capital Corp. is a related entity of the Executive Chairman and Chief Executive Officer.

 

As at September 30, 2023 and December 31, 2022, there were no amounts payable to related parties for exploration and evaluation expenditures or corporate development and investor relations.

 

There are no ongoing contractual commitments resulting from these transactions with related parties.

 

Key management personnel compensation

 

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers.

 

Three months ended September 30, 2023  Salaries and
Consulting
$
   Share-based
compensation
$
   Bonus
$
   Total
$
 
Executive Chairman and Chief Executive Officer   97,200    -    129,600    226,800 
President   68,040    -    90,720    158,760 
Chief Financial Officer   29,160    -    38,880    68,040 
Chief Operating Officer   63,180    -    84,240    147,420 
Chief Development Officer   84,240    51,718    112,320    248,278 
Non-executive directors   54,000    -    -    54,000 
Total   395,820    51,718    455,760    903,298 

 

 - 92 - 

 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Three months ended September 30, 2022  Salaries and
Consulting
$
   Share-based
compensation
$
   Bonus
$
   Total
$
 
Executive Chairman and Chief Executive Officer   90,000    -    -    90,000 
President   63,000    -    -    63,000 
Chief Financial Officer   27,000    -    -    27,000 
Chief Operating Officer   58,500    -    -    58,500 
Chief Development Officer   104,000    -    -    104,000 
Non-executive directors   24,000    -    -    24,000 
Total  366,500   -   -   366,500 
                 
Nine months ended September 30, 2023  Salaries and
Consulting
$
   Share-based
compensation
$
   Bonus
$
   Total
$
 
Executive Chairman and Chief Executive Officer   291,600    -    129,600    421,200 
President   204,120    -    90,720    294,840 
Chief Financial Officer   87,480    -    38,880    126,360 
Chief Operating Officer   189,540    -    84,240    273,780 
Chief Development Officer   252,720    195,364    112,320    560,404 
Non-executive directors   162,000    -    -    162,000 
Total  1,187,460   195,364   455,760   1,838,584 
                 
Nine months ended September 30, 2022  Salaries and
Consulting
$
   Share-based
compensation
$
   Bonus
$
   Total
$
 
Executive Chairman and Chief Executive Officer   270,000    -    90,000    360,000 
Former Chief Executive Officer   105,000    -    -    105,000 
President   189,000    -    63,000    252,000 
Chief Financial Officer   81,000    -    27,000    108,000 
Chief Operating Officer   175,500    -    58,500    234,000 
Chief Development Officer   104,000    -    -    104,000 
Non-executive directors   78,400    -    -    78,400 
Total  1,002,900   -   238,500   1,241,400 

 

As at September 30, 2023, there was $51,123 payable to key management personnel in respect of key management compensation and expense reimbursements included in accounts payable and accrued liabilities (December 31, 2022 - $276,016). The amounts are unsecured, non-interest bearing and without fixed terms of repayment.

 

Under the terms of their management agreements, certain officers of the Company are entitled to 18 months of base pay in the event of their agreements being terminated without cause.

 

Risks and Uncertainties

 

The risks and uncertainties described in this section are considered by management to be the most important in the context of the Company's business. The risks and uncertainties below are not inclusive of all the risks and uncertainties the Company may be subject to and other risks may exist. The Company is in the business of acquiring, exploring and evaluating gold properties. It is exposed to a number of risks and uncertainties that are common to other gold mining companies. The industry is capital intensive at all stages and is subject to variations in commodity prices, market sentiment, inflation and other risks.

 

 - 93 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Exploration Stage Company

 

The Company is an exploration stage company and cannot give any assurance that a commercially viable deposit, or “reserve,” exists on any properties for which the Company currently has or may have (through potential future joint venture agreements or acquisitions) an interest. Determination of the existence of a reserve depends on appropriate and sufficient exploration work and the evaluation of legal, economic, and environmental factors. If the Company fails to find a commercially viable deposit on any of its properties, its financial condition and results of operations will be materially adversely affected.

 

No Mineral Resources

 

Currently, there are no mineral resources (within the meaning of NI 43-101) on any of the properties in which the Company has an interest and the Company cannot give any assurance that any mineral resources will be identified. If the Company fails to identify any mineral resources on any of its properties, its financial condition and results of operations will be materially adversely affected.

 

Reliability of Historical Information

 

The Company has relied on, and the disclosure in the Queensway Technical Report is based, in part, upon, historical data compiled by previous parties involved with the Queensway Project. To the extent that any of such historical data is inaccurate or incomplete, the Company’s exploration plans may be adversely affected.

 

Mineral Exploration and Development

 

Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection, the combination of which factors may result in the Company not receiving an adequate return of investment capital. There is no assurance that the Company’s mineral exploration and any development activities will result in any discoveries of commercial bodies of ore. The long-term profitability of the Company’s operations will in part be directly related to the costs and success of its exploration programs, which may be affected by a number of factors. Substantial expenditures are required to establish reserves through drilling and to develop the mining and processing facilities and infrastructure at any site chosen for mining. Substantial expenditures are required to establish ore reserves through exploration and drilling, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities and grades to justify commercial operations or that funds required for development can be obtained on a timely basis.

 

Estimates of reserves, mineral deposits and production costs can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In addition, the grade of ore ultimately mined may differ from that indicated by drilling results. Short term factors relating to reserves, such as the need for orderly development of ore bodies or the processing of new or different grades, may also have an adverse effect on mining operations and on the results of operations. Material changes in ore reserves, grades, stripping ratios or recovery rates may affect the economic viability of any project.

 

 - 94 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Competition and Mineral Exploration

 

The mineral exploration industry is intensely competitive in all of its phases and the Company must compete in all aspects of its operations with a substantial number of large established mining companies with greater liquidity, greater access to credit and other financial resources, newer or more efficient equipment, lower cost structures, more effective risk management policies and procedures and/or greater ability than the Company to withstand losses. The Company's competitors may be able to respond more quickly to new laws or regulations or emerging technologies or devote greater resources to the expansion of their operations, than the Company can. In addition, current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties. Competition could adversely affect the Company's ability to acquire suitable new mineral properties or prospects for exploration in the future. Competition could also affect the Company's ability to raise financing to fund the exploration and development of its properties or to hire qualified personnel. The Company may not be able to compete successfully against current and future competitors, and any failure to do so could have a material adverse effect on the Company's business, financial condition or results of operations.

 

Additional Funding

 

The exploration and development of the Company’s mineral properties will require substantial additional capital. When such additional capital is required, the Company will need to pursue various financing transactions or arrangements, including joint venturing of projects, debt financing, equity financing or other means. Additional financing may not be available when needed or, if available, the terms of such financing might not be favorable to the Company and might involve substantial dilution to existing shareholders. The Company may not be successful in locating suitable financing transactions in the time period required or at all. A failure to raise capital when needed would have a material adverse effect on the Company’s business, financial condition and results of operations. Any future issuance of securities to raise required capital will likely be dilutive to existing shareholders. In addition, debt and other debt financing may involve a pledge of assets and may be senior to interests of equity holders. The Company may incur substantial costs in pursuing future capital requirements, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs.

 

The ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the gold and copper industries in particular), the Company’s status as a new enterprise with a limited history, the location of the Company’s mineral properties, the price of commodities and/or the loss of key management personnel.

 

Permits and Government Regulation

 

The future operations of the Company may require permits from various federal, state, provincial and local governmental authorities and will be governed by laws and regulations governing prospecting, development, mining, production, export, taxes, labour standards, occupational health, waste disposal, land use, environmental protections, mine safety and other matters.

 

Although Canada has a favorable legal and fiscal regime for exploration and mining, including a relatively simple system for the acquisition of mineral titles and relatively low tax burden, possible future government legislation, policies and controls relating to prospecting, development, production, environmental protection, mining taxes and labour standards could cause additional expense, capital expenditures, restrictions and delays in the activities of the Company, the extent of which cannot be predicted. Before development and production can commence on any properties, the Company must obtain regulatory and environmental approvals. There is no assurance that such approvals can be obtained on a timely basis or at all. The cost of compliance, with changes in governmental regulations, has the potential to reduce the profitability of operations. The Company is currently in compliance with all material regulations applicable to its exploration activities.

 

 - 95 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Limited Operating History

 

The Company has a limited operating history and its mineral properties are exploration stage properties. As such, the Company will be subject to all of the business risks and uncertainties associated with any new business enterprise, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. The current state of the Company’s mineral properties require significant additional expenditures before any cash flow may be generated. Although the Company possesses an experienced management team, there is no assurance that the Company will be successful in achieving a return on shareholders’ investment and the likelihood of success of the Company must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the establishment of any business. There is no assurance that the Company can generate revenues, operate profitably, or provide a return on investment, or that it will successfully implement its plans.

 

An investment in the Company’s securities carries a high degree of risk and should be considered speculative by purchasers. There is no assurance that we will be successful in achieving a return on shareholders’ investment and the likelihood of our success must be considered in light of our early stage of operations. You should consider any purchase of the Company’s securities in light of the risks, expenses and problems frequently encountered by all companies in the early stages of their corporate development.

 

Title Risks

 

Although the Company has or will receive title opinions for any properties in which it has a material interest, there is no guarantee that title to such properties will not be challenged or impugned. The Company has not conducted surveys on all of the claims in which it holds direct or indirect interests. The Company’s properties may be subject to prior unregistered agreements or transfers or native land claims and title may be affected by unidentified or unknown defects. Title insurance is generally not available for mineral properties and the Company's ability to ensure that it has obtained secure claims to individual mineral properties or mining concessions may be constrained.

 

A successful challenge to the Company’s title to a property or to the precise area and location of a property could cause delays or stoppages to the Company’s exploration, development or operating activities without reimbursement to the Company. Any such delays or stoppages could have a material adverse effect on the Company’s business, financial condition and results of operations.

 

Laws and Regulation

 

The Company’s exploration activities are subject to extensive federal, provincial and local laws and regulations governing prospecting, development, production, exports, taxes, labour standards, occupational health and safety, mine safety and other matters in all the jurisdictions in which it operates. These laws and regulations are subject to change, can become more stringent and compliance can therefore become more costly. The Company applies the expertise of its management, advisors, employees and contractors to ensure compliance with current laws.

 

Uninsured and Underinsured Risks

 

The Company faces and will face various risks associated with mining exploration and the management and administration thereof. Some of these risks are not insurable; some may be the subject of insurance which is not commercially feasible for the Company. Those insurances which are purchased will have exclusions and deductibles which may eliminate or restrict recovery in the event of loss. In some cases, the amount of insurance purchased may not be adequate in amount or in limit.

 

 - 96 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

The Company will undertake intermittent assessments of insurable risk to help ensure that the impact of uninsured/underinsured loss is minimized within reason. Risks may vary from time to time within this intermittent period due to changes in such things as operations operating conditions, laws or the climate which may leave the Company exposed to periods of additional uninsured risk.

 

In the event risk is uninsurable, at its reasonable and sole discretion, the Company may endeavor to implement policies and procedures, as may be applicable and/or feasible, to reduce the risk of related loss.

 

Global Economy Risk

 

The volatility of global capital markets over the past several years has generally made the raising of capital by equity or debt financing more difficult. The Company may be dependent upon capital markets to raise additional financing in the future. As such, the Company is subject to liquidity risks in meeting its operating expenditure requirements and future development cost requirements in instances where adequate cash positions are unable to be maintained or appropriate financing is unavailable.

 

These factors may impact the ability to raise equity or obtain loans and other credit facilities in the future and on terms favourable to the Company and its management.

 

Our business, financial condition and results of operations may be negatively affected by economic and other consequences from Russia’s military action against Ukraine and the sanctions imposed in response to that action

 

In late February 2022, Russia launched a large-scale military attack on Ukraine. The invasion significantly amplified already existing geopolitical tensions among Russia, Ukraine, Europe, NATO and the West, including Canada. In response to the military action by Russia, various countries, including Canada, the United States, the United Kingdom and European Union issued broad-ranging economic sanctions against Russia. Such sanctions included, among other things, a prohibition on doing business with certain Russian companies, large financial institutions, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for Worldwide Interbank Financial Telecommunications, or SWIFT, the electronic banking network that connects banks globally; a ban of oil imports from Russia to the United States; and restrictive measures to prevent the Russian Central Bank from undermining the impact of the sanctions. Additional sanctions may be imposed in the future.

 

Such sanctions (and any future sanctions) and other actions against Russia may adversely impact, among other things, the Russian economy and various sectors of the economy, including but not limited to, financials, energy, metals and mining, engineering and defense and defense-related materials sectors; result in a decline in the value and liquidity of Russian securities; result in boycotts, tariffs, and purchasing and financing restrictions on Russia’s government, companies and certain individuals; weaken the value of the ruble; downgrade the country’s credit rating; freeze Russian securities and/or funds invested in prohibited assets and impair the ability to trade in Russian securities and/or other assets; and have other adverse consequences on the Russian government, economy, companies and region. Further, several large corporations and U.S. states have announced plans to divest interests or otherwise curtail business dealings with certain Russian businesses.

 

The ramifications of the hostilities and sanctions may not be limited to Russia, Ukraine and Russian and Ukrainian companies and may spill over to and negatively impact other regional and global economic markets (including Europe, Canada and the United States), companies in other countries (particularly those that have done business with Russia and Ukraine) and on various sectors, industries and markets for securities and commodities globally, such as oil and natural gas. Accordingly, the actions discussed above and the potential for a wider conflict could increase financial market volatility and cause severe negative effects on regional and global economic markets, industries, and companies. In addition, Russia may take retaliatory actions and other countermeasures, including cyberattacks and espionage against other countries and companies around the world, which may negatively impact such countries and companies.

 

 - 97 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

The extent and duration of the military action or future escalation of such hostilities, the extent and impact of existing and future sanctions, market disruptions and volatility, and the result of any diplomatic negotiations cannot be predicted.

 

While we expect any direct impacts to our business to be limited, the indirect impacts on the economy and on the mining industry and other industries in general could negatively affect our business and may make it more difficult for us to raise equity or debt financing. In addition, the impact of other current macro-economic factors on our business, which may be exacerbated by the war in Ukraine – including inflation, supply chain constraints and geopolitical events – is uncertain. If these levels of volatility persist or if there is a further economic slowdown, the Company's operations, the Company's ability to raise capital could be adversely impacted.

 

Environmental Risks

 

The Company’s activities are subject to extensive laws and regulations governing environment protection. The Company is also subject to various reclamation related conditions. Although the Company closely follows and believes it is operating in compliance with all applicable environmental regulations, there can be no assurance that all future requirements will be obtainable on reasonable terms. Failure to comply may result in enforcement actions causing operations to cease or be curtailed and may include corrective measures requiring capital expenditures. Intense lobbying over environmental concerns by non-governmental organizations has caused some governments to cancel or restrict development of mining projects. Current publicized concern over climate change may lead to carbon taxes, requirements for carbon offset purchases or new regulation. The costs or likelihood of such potential issues to the Company cannot be estimated at this time.

 

The legal framework governing this area is constantly developing, therefore the Company is unable to fully ascertain any future liability that may arise from the implementation of any new laws or regulations, although such laws and regulations are typically strict and may impose severe penalties (financial or otherwise). The proposed activities of the Company, as with any exploration, may have an environmental impact which may result in unbudgeted delays, damage, loss and other costs and obligations including, without limitation, rehabilitation and/or compensation.

 

There is also a risk that the Company’s operations and financial position may be adversely affected by the actions of environmental groups or any other group or person opposed in general to the Company’s activities and, in particular, the proposed exploration and mining by the Company within the Provinces of Newfoundland and Ontario.

 

Social and Environmental Activism

 

There is an increasing level of public concern relating to the effects of mining on the nature landscape, in communities and on the environment. Certain non-governmental organizations, public interest groups and reporting organizations (“NGOs”) who oppose resource development can be vocal critics of the mining industry. In addition, there have been many instances in which local community groups have opposed resource extraction activities, which have resulted in disruption and delays to the relevant operation.

 

While the Company seeks to operate in a social responsible manner and believes it has good relationships with local communities in the regions in which it operates, NGOs or local community organizations could direct adverse publicity against and/or disrupt the operations of the Company in respect of one or more of its properties, regardless of its successful compliance with social and environmental best practices, due to political factors, activities of unrelated third parties on lands in which the Company has an interest or the Company’s operations specifically. Any such actions and the resulting media coverage could have an adverse effect on the reputation and financial condition of the Company or its relationships with the communities in which it operations, which could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.

 

 - 98 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Dependence on Management and Key Personnel

 

The success of the Company is currently largely dependent on the performance of its directors and officers. The loss of the services of any of these persons could have a materially adverse effect on the Company’s business and prospects. There is no assurance the Company can maintain the services of its directors, officers or other qualified personnel required to operate its business. As the Company’s business activity grows, the Company will require additional key financial, administrative and mining personnel as well as additional operations staff. There can be no assurance that these efforts will be successful in attracting, training and retaining qualified personnel as competition for persons with these skill sets increase. If the Company is not successful in attracting, training and retaining qualified personnel, the efficiency of its operations could be impaired, which could have an adverse impact on the Company’s operations and financial condition.

 

First Nations Land Claims

 

Certain of the Company’s mineral properties may now or in the future be the subject of First Nations land claims. The legal nature of First Nations land claims is a matter of considerable complexity. The impact of any such claim on the Company’s material interest in the Company’s mineral properties and/or potential ownership interest in the Company’s mineral properties in the future, cannot be predicted with any degree of certainty and no assurance can be given that a broad recognition of First Nations rights in the areas in which the Company’s mineral properties are located, by way of negotiated settlements or judicial pronouncements, would not have an adverse effect on the Company’s activities.

 

Even in the absence of such recognition, the Company may at some point be required to negotiate with and seek the approval of holders of First Nations interests in order to facilitate exploration and development work on the Company’s mineral properties, there is no assurance that the Company will be able to establish practical working relationships with the First Nations in the area which would allow it to ultimately develop the Company’s mineral properties.

 

Claims and Legal Proceedings

 

The Company and/or its directors and officers may be subject to a variety of civil or other legal proceedings, with or without merit. From time to time in the ordinary course of its business, the Company may become involved in various legal proceedings, including commercial, employment and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s attention and resources and cause the Company to incur significant expenses. Furthermore, because litigation is inherently unpredictable, the results of any such actions may have a material adverse effect on the Company’s business, operating results or financial condition.

 

On November 15, 2019, ThreeD Capital Inc. (“ThreeD”) and 1313366 Ontario Inc. (“131” and together with ThreeD, the “Plaintiffs”) each entered into share purchase agreements (the “Share Purchase Agreements”) with Palisades Goldcorp Ltd. (“Palisades”) under which Palisades agreed to purchase the 13,500,000 common shares owned by ThreeD and the 4,000,000 common shares owned by 131 for $0.08 per common share. The transactions closed on November 20, 2019. As a private company with restrictions on the transfer of its common shares, the Company had to approve the proposed transfer, which it did by a consent resolution of the Board.

 

On March 10, 2020, ThreeD and 131 filed a statement of claim in the Ontario Superior Court of Justice against Collin Kettell, Palisades and the Company (the “ThreeD Claim”). Pursuant to the ThreeD Claim, the Plaintiffs are challenging the validity of the sale of 17,500,000 common shares by the Plaintiffs to Palisades on November 20, 2019.

 

 - 99 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

ThreeD and 131 claim that at the time of negotiation and execution of the Share Purchase Agreements, Palisades and Mr. Kettell were aware of positive drill results from the Company’s 2019 Drill Program and the results were not disclosed to ThreeD and 131 to their detriment. Palisades and Mr. Kettell strongly deny ThreeD and 131’s allegations. ThreeD and 131 have made specific claims for (a) recission of the Share Purchase Agreements on the basis of oppression or unfair prejudice; (b) or alternatively, damages in the amount of $21,000,000 for the alleged improper actions by ThreeD and 131, (c) a declaration that Palisades and Collin Kettell, as shareholder or director and/or officer of the Company, have had acted in a manner that is oppressive, unfairly prejudicial or unfairly disregarded their interests, (d) a declaration that Palisades and Collin Kettell engaged in insider trading contrary to section 138 of the Securities Act (Ontario), (e) unjust enrichment and (f) interests and costs. Palisades and Mr. Kettell refute each of the specific claims made by the Plaintiffs.

 

The Company filed a statement of defence in response to the ThreeD Claim on June 12, 2020, pursuant to which, among other things, the Company denies that it is a proper party to the ThreeD Claim and the allegations against it therein, including because no relief is claimed against the Company in paragraph 1 of the ThreeD Claim.

 

The action has now progressed through the production of documents and oral examinations for discovery stages. In early 2022, the Plaintiffs formally amended their statement of claim to increase the amount claimed to $229,000,000 and to advance a direct claim of oppressive conduct against the Company. While continuing to deny any and all liability to the Plaintiffs, the Company has amended its defence to include specific denials of the new allegations of oppressive conduct against it. The parties completed an additional round of examinations for discovery in January 2023, following which the plaintiffs set the action down for trial. The parties had a mediation meeting on October 3, 2023, but were unable to settle the case. The Company anticipates that the case will not go to trial before 2026.

 

The outcome of this claim cannot be determined at this time and therefore no amount has been accrued for in the financial statements for the nine months ended September 30, 2023.

 

Conflicts of Interest

 

Most of the Company’s directors and officers do not devote their full time to the affairs of the Company. All of the directors and some of the officers of the Company are also directors, officers and shareholders of other natural resource or public companies, and as a result they may find themselves in a position where their duty to another company conflicts with their duty to the Company. Although the Company has policies which address such potential conflicts and the OBCA has provisions governing directors in the event of such a conflict, none of the Company’s constating documents or any of its other agreements contain any provisions mandating a procedure for addressing such conflicts of interest. There is no assurance that any such conflicts will be resolved in favour of the Company. If any such conflicts are not resolved in favour of the Company, the Company may be adversely affected.

 

Gold and Metal Prices

 

If the Company’s mineral properties are developed from exploration properties to full production properties, the majority of our revenue will be derived from the sale of gold. Therefore, the Company’s future profitability will depend upon the world market prices of the gold for which it is exploring. The price of gold and other metals are affected by numerous factors beyond the Company’s control, including levels of supply and demand, global or regional consumptive patterns, sales by government holders, metal stock levels maintained by producers and others, increased production due to new mine developments and improved mining and production methods, speculative activities related to the sale of metals, availability and costs of metal substitutes. Moreover, gold prices are also affected by macroeconomic factors such as expectations regarding inflation, interest rates and global and regional demand for, and supply of, gold as well as general global economic conditions. These factors may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities.

 

 - 100 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Negative Cash Flow from Operating Activities

 

The Company has no history of earnings and had negative cash flow from operating activities since inception. The Company’s mineral properties are in the exploration stage and there are no known mineral resources or reserves and the proposed exploration programs on the Company’s mineral properties are exploratory in nature. Significant capital investment will be required to achieve commercial production from the Company’s existing projects. There is no assurance that any of the Company’s mineral properties will generate earnings, operate profitably or provide a return on investment in the future. Accordingly, the Company will be required to obtain additional financing in order to meet its future cash commitments.

 

Going Concern Risk

 

The Company’s financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. The Company’s future operations are dependent upon the identification and successful completion of equity or debt financings and the achievement of profitable operations at an indeterminate time in the future. There can be no assurances that the Company will be successful in completing equity or debt financings or in achieving profitability. The financial statements do not give effect to any adjustments relating to the carrying values and classifications of assets and liabilities that would be necessary should the Company be unable to continue as a going concern. These items give rise to material uncertainties which may cast a significant doubt on the Company’s ability to continue as a going concern.

 

Risks Associated with Acquisitions

 

If appropriate opportunities present themselves, the Company may acquire mineral claims, material interests in other mineral claims, and companies that the Company believes are strategic. The Company currently has no understandings, commitments or agreements with respect to any material acquisition, other than as described in this MD&A, and no other material acquisition is currently being pursued. There can be no assurance that the Company will be able to identify, negotiate or finance future acquisitions successfully, or to integrate such acquisitions with its current business. The process of integrating an acquired Company or mineral claims into the Company may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for ongoing development of the Company’s business. Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to goodwill and other intangible assets, which could materially adversely affect the Company’s business, results of operations and financial condition.

 

Force Majeure

 

The Company’s projects now or in the future may be adversely affected by risks outside the control of the Company, including the price of gold on world markets, labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods, explosions or other catastrophes, pandemics, epidemics or quarantine restrictions.

 

Infrastructure

 

Exploration, development and processing activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important elements of infrastructure, which affect access, capital and operating costs. The lack of availability on acceptable terms or the delay in the availability of any one or more of these items could prevent or delay exploration or development of the Company’s mineral properties. If adequate infrastructure is not available in a timely manner, there can be no assurance that the exploration or development of the Company’s mineral properties will be commenced or completed on a timely basis, if at all.

 

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Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Furthermore, unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of necessary infrastructure could adversely affect our operations.

 

Exploration operations depend on adequate infrastructure. In particular, reliable power sources, water supply, transportation and surface facilities are necessary to explore and develop mineral projects. Failure to adequately meet these infrastructure requirements or changes in the cost of such requirements could affect the Company’s ability to carry out exploration and future development operations and could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.

 

Climate Change Risks

 

The Company acknowledges climate change as an international and community concern and it supports and endorses various initiatives for voluntary actions consistent with international initiatives on climate change. However, in addition to voluntary actions, governments are moving to introduce climate change legislation and treaties at the international, national, state/provincial and local levels. Where legislation already exists, regulation relating to emission levels and energy efficiency is becoming more stringent. Some of the costs associated with reducing emissions can be offset by increased energy efficiency and technological innovation. However, if the current regulatory trend continues, the Company expects that this could result in increased costs at some of its operations in the future.

 

The Company and the mining industry are facing continued geotechnical challenges, which could adversely impact the Company’s production and profitability. Unanticipated adverse geotechnical and hydrological conditions, such as landslides, floods, seismic activity, droughts and pit wall failures, may occur in the future and such events may not be detected in advance. Geotechnical instabilities and adverse climatic conditions can be difficult to predict and are often affected by risks and hazards outside of the Company’s control, such as severe weather and considerable rainfall. Geotechnical failures could result in limited or restricted access to mine sites, suspension of operations, government investigations, increased monitoring costs, remediation costs, loss of ore and other impacts, which could cause one or more of the Company’s projects to be less profitable than currently anticipated and could result in a material adverse effect on the Company’s business results of operations and financial position.

 

Information Systems and Cyber Security

 

The Company’s operations depend on information technology (“IT”) systems. These IT systems could be subject to network disruptions caused by a variety of sources, including computer viruses, security breaches and cyber-attacks, as well as disruptions resulting from incidents such as cable cuts, damage to physical plants, natural disasters, terrorism, fire, power loss, vandalism and theft.

 

The Company’s operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Company’s reputation and results of operations.

 

Although to date the Company has not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that the Company will not incur such losses in the future. The Company’s risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. As a result, cyber security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.

 

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Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Critical Accounting Policies and Estimates

 

The Company prepares its financial statements using accounting policies consistent with IFRS as issued by the International Accounting Standards Board (“IASB”).

 

The preparation of the financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.

 

The financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

Significant assumptions about the future and other sources of estimation uncertainty that management has made at period end that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to the following:

 

(i)            Critical accounting estimates

 

Valuation of Secured Notes

 

The fair value of secured notes at the issue date and the period end date is determined using the Hull-White model of interest rate uncertainty within a FINCAD Callable / Puttable Bond Model. The model involves various inputs to determine the fair value of the secured notes, including coupon rate, credit spread, mean reversion, rate volatility, riskless rates and redemption prices. Certain of the inputs are estimates that involve considerable judgment and are, or could be, affected by significant factors that are out of the Company’s control. These estimates impact the value of the secured notes recognized in the statement of financial position and revaluation adjustments recognized in the statement of loss and comprehensive loss during the period.

 

Valuation of Options Granted and Warrants Issued

 

The fair value of common share purchase options granted and warrants issued is determined at the issue date using the Black-Scholes option pricing model. The Black-Scholes model involves six key inputs to determine the fair value of an option, which are: risk-free interest rate, exercise price, market price at the grant date, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are or could be affected by significant factors that are out of the Company’s control. The Company is also required to estimate the future forfeiture rate of options based on historical information in its calculation of share-based payments expense. These estimates impact the values of stock-based compensation expense, share capital, and reserves.

 

Fair Value of Financial Derivatives

 

Investments in warrants that are not traded on a recognized securities exchange do not have a readily available market value. When there are sufficient and reliable market inputs, a Black-Scholes option pricing model is used. The Black-Scholes model involves six key inputs to determine the fair value of a warrant, which include: risk free interest rate, exercise price, market price at the grant date, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are or could be affected by significant factors that are out of the Company’s control.

 

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Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Fair Value of Investments in Private Companies

 

The determination of fair value requires judgment and is based on market information, where available and appropriate. All privately-held investments are initially recorded at the transaction price, being the fair value at the time of acquisition. Thereafter, at each reporting period, the fair value of an investment may be adjusted using one or more of the valuation indicators described below.

 

Company-specific information is considered when determining whether the fair value of a privately-held investment should be adjusted upward or downward at the end of each reporting period. In addition to company-specific information, the Company will take into account trends in general market conditions and the share performance of comparable publicly-traded companies when valuing privately-held investments.

 

The absence of the occurrence of any of these events, any significant change in trends in general market conditions, or any significant change in share performance of comparable publicly-traded companies indicates generally that the fair value of the investment has not materially changed.

 

Computation of Income Taxes

 

The determination of tax expense for the period and deferred tax assets and liabilities involves significant estimation and judgment by management. In determining these amounts, management interprets tax legislation in a variety of jurisdictions and make estimates of the expected timing of the reversal of deferred tax assets and liabilities. Management also makes estimates of future earnings which affect the extent to which potential future tax benefits may be used.

 

The Company is subject to assessments by taxation authorities, which may interpret legislation differently. These differences may affect the final amount or the timing of the payment of taxes. We provide for such differences where known based on our best estimate of the probable outcome of these matters.

 

Shares Issued to Acquire Exploration and Evaluation Assets

 

From time to time, the Company issues common shares in the course of acquiring exploration and evaluation assets. When shares are issued without cash consideration, the transaction is recognized at the fair value of the assets received. In the event that the fair value of the assets cannot be reliably determined, the Company will recognize the transaction at the fair value of the shares issued. These estimates impact the value of share capital and exploration and evaluation assets.

 

Valuation of flow-through premium

 

The determination of the valuation of flow-through premium is subject to significant judgment and estimates. The flow-through premium is valued as the estimated premium that investors pay for the flow-through feature, being the portion in excess of the market value of shares without the flow-through feature.

 

Reclamation provision

 

The valuation of any reclamation provision is subject to significant judgement and estimates. Assumptions, based on the current economic environment, are made to estimate the future liability. These estimates take into account any material changes to the assumptions that occur when reviewed regularly by management and are based on current regulatory requirements. Significant changes in estimates of discount rate, contamination, restoration standards and techniques will result in changes to the provision from period to period. Actual reclamation and closure costs will ultimately depend on future market prices for the costs which will reflect the market condition at the time the expenditures are actually incurred. The final cost of the reclamation provision currently recognized may be higher or lower than currently provided for.

 

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Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

(ii)            Critical accounting judgments

 

Impairment of Exploration and Evaluation Assets

 

Management is required to assess impairment in respect to the Company’s mineral property interests. The triggering events are defined in IFRS 6. In making the assessment, management is required to make judgments on the status of each project and the future plans towards finding commercial reserves. The carrying value of each exploration and evaluation asset is reviewed regularly for conditions that may suggest impairment. This review requires significant judgment.

 

Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the property’s value; whether there has been an accumulation of costs significantly in excess of the amounts originally expected for the property’s acquisition, development or cost of holding; and whether exploration activities produced results that are not promising such that no more work is being planned in the foreseeable future. If impairment is determined to exist, a formal estimate of the recoverable amount is performed and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount.

 

Management has determined that there were indicators of impairment as at June 30, 2023 and has impaired $8,000 (December 31, 2022 - $Nil) in exploration and evaluation assets. There were no additional indicators of impairment noted at September 30, 2023.

 

Determination of whether the Company has significant influence over investees

 

Significant influence is presumed to exist where the Company has between 20% and 50% of the voting rights, but can also arise where the Company has less than 20%, if the Company has the power to participate in the financial and operating policy decisions affecting the entity. Determination of whether the Company has significant influence over investees requires an assessment of the activities of the investee that significantly affect the investee's returns, including strategic, operational and financing decision-making, appointment, remuneration and termination of the key management personnel and when decisions related to those activities can be influenced by the Company.

 

Based on assessments of the relevant facts and circumstances, primarily, the Company's ownership interests, board representation and ability to influence operating, strategic and financing decisions, the Company concluded that it has significant influence over Kirkland Lake Discoveries Corp.

 

Impairment assessment for investment in associates

 

At each balance sheet date, management considers whether there is objective evidence of impairment in associates, including one or more loss events that would evidence a significant or prolonged decline in the fair value of the investment in an associate below the carrying value. The net investment in an associate is impaired and impairment losses are incurred if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the net investment and that loss event or events have a negative impact on the estimated future cash flows from the net investment that can be reliably estimated. If there is such evidence, management determines the amount of impairment to record, if any, in relation to the associate.

 

The Company had significant influence over Kirkland Lake Discoveries Corp. during the period from May 25, 2023 to September 30, 2023 and as a result has accounted for it as an investment in associate during this period. Management has determined there were no indicators of impairment as at September 30, 2023.

 

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Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Presentation of financial statements as a going concern

 

Presentation of the financial statements as a going concern which assumes that the Company will continue in operation for the foreseeable future, obtain additional financing as required, and will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due involves significant judgment by management.

 

Financial Risk Management

 

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board approves and monitors the risk management processes.

 

Credit risk

 

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company is subject to the credit through its investment in Maritime secured notes, in which case the maximum exposure to the credit risk is the full value of the secured notes of $2,474,800 at September 30, 2023. Sales taxes recoverable are due from the Canada Revenue Agency and the Company places its cash with financial institutions with high credit ratings, therefore in management’s judgment, credit risk related to sales taxes recoverable and cash is low.

 

There have been no changes in management’s methods for managing credit risk since December 31, 2022.

 

Liquidity risk

 

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has in place a planning and budgeting process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. The Company has historically relied on issuance of shares to fund exploration programs and may require doing so again in the future. As at September 30, 2023, the Company has total liabilities of $10,469,285 and cash of $25,966,972 which is available to discharge these liabilities (December 31, 2022 – total liabilities of $27,213,612 and cash of $82,165,273). As at September 30, 2023, the Company must also spend another $1,443,624 of Qualifying CEE by December 31, 2023 to satisfy its remaining current flow-through liability of $418,651.

 

There have been no changes in management’s methods for managing liquidity risk since December 31, 2022.

 

Market risk

 

Market risk is the risk that changes in market prices, such as commodity prices, interest rates and foreign exchange rates will affect the Company’s net earnings or the value of financial instruments. The objective of the Company is to manage and mitigate market risk exposures within acceptable limits, while maximizing returns.

 

(i)Currency risk

 

Financial instruments that impact the Company’s net earnings or other comprehensive income due to currency fluctuation include cash accounts, secured notes, interest receivable, investments and accounts payable and accrued liabilities denominated in US dollars. The sensitivity of the Company’s net loss to changes in the exchange rate between the US dollar and the Canadian dollar at September 30, 2023 would change the Company’s net loss by $400,243 as a result of a 10% change in the exchange rate.

 

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Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

(ii)Interest rate risk

 

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. As the Company deposits its cash into demand accounts with minimal interest rates, the interest rate risk is not significant. Interest receivable on secured notes is subject to interest rate fluctuations, the interest rate risk is not material.

 

(iii)Commodity price risk

 

Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company’s property has exposure to predominantly gold. Commodity prices, especially gold, greatly affect the value of the Company and the potential value of its property and investments.

 

(iv)Equity price risk

 

Equity price risk is the risk that the fair value of or future cash flows from the Company’s financial instruments will significantly fluctuate because of changes in market prices. The Company is exposed to market risk in trading its investments in unfavorable market conditions which could result in dispositions of investments at less than favorable prices. Additionally, the Company adjusts its investments to fair value at the end of each reporting period. This process could result in write-downs of the Company’s investments over one or more reporting periods, particularly during periods of overall market instability. The sensitivity of the Company’s net loss to changes in market prices at September 30, 2023 would change the Company’s net loss by $365,304 as a result of a 10% change in the market price of its investments.

 

There have been no changes in management’s methods for managing market risks since December 31, 2022.

 

Capital management

 

The Company’s objectives when managing capital are:

 

·To safeguard our ability to continue as a going concern in order to develop and operate our current projects;
·Pursue strategic growth initiatives; and
·To maintain a flexible capital structure which lowers the cost of capital.

 

In assessing our capital structure, we include in our assessment the components of equity consisting of common shares, stock options and warrants, and deficit that as at September 30, 2023 totalled $47,903,236 (December 31, 2022 - $83,473,900). In order to facilitate the management of capital requirements, the Company prepares annual expenditure budgets and continuously monitors and reviews actual and forecasted cash flows. The annual and updated budgets are monitored and approved by the Board of Directors. To maintain or adjust the capital structure, the Company may, from time to time, issue new shares, issue new debt, repay debt or dispose of non-core assets. The Company’s current capital resources are sufficient to carry out our exploration plans and support operations through the current operating period.

 

The Company is not subject to any capital requirements imposed by a regulator.

 

There were no changes in the Company’s approach to capital management during the nine months ended September 30, 2023.

 

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Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

Disclosure Controls and Procedures

 

The Company’s management, with the participation of its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), has evaluated the effectiveness of the Company’s disclosure controls and procedures. Based upon the results of that evaluation, the Company’s CEO and CFO have concluded that, as of September 30, 2023, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by the Company in reports it files is recorded, processed, summarized and reported, within the appropriate time periods and is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

 

Internal Control over Financial Reporting

 

The Company’s management has determined that there have been no significant changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

Any system of internal control over financial reporting, no matter how well designed, has inherent limitations. As a result, even those systems determined to be effective can only provide reasonable assurance regarding the preparation of financial statements.

 

Cautionary Notes Regarding Forward-Looking Statements

 

This MD&A contains forward looking statements which reflect management's expectations regarding the Company’s future growth, results from operations (including, without limitation, statements about the Company’s opportunities, strategies, competition, expected activities and expenditures as the Company pursues its business plan, the adequacy of the Company’s available cash resources and other statements about future events or results), performance (both operational and financial) and business prospects, future business plans and opportunities. Wherever possible, words such as “predicts”, “projects”, “targets”, “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. These forward-looking statements include, among other things, statements relating to the Queensway Project and the Company’s planned and future exploration on the Queensway Project and its other mineral properties; the Company’s goals regarding exploration and potential development of its projects; the Company’s future business plans; expectations regarding the ability to raise further capital; the market price of gold; expectations regarding any environmental issues that may affect planned or future exploration and development programs and the potential impact of complying with existing and proposed environmental laws and regulations; the ability to retain and/or maintain any require permits, licenses or other necessary approvals for the exploration or development of its mineral properties; government regulation of mineral exploration and development operations in the Provinces of Newfoundland and Labrador and Ontario; the Company’s compensation policy and practices; the Company’s expected reliance on key management personnel, advisors and consultants; effects of the conflict in Ukraine.

 

Forward-looking statements are not a guarantee of future performance and is based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances.

 

 - 108 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

As of the date of this MD&A, without limitation, assumptions about: the ability to raise any necessary additional capital on reasonable terms to advance exploration and development of the Company’s mineral properties; future prices of gold and other metal prices; the timing and results of exploration and drilling programs; the demand for, and price of gold; that general business and economic conditions will not change in a material adverse manner; the Company’s ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; the geology of the Queensway Project as described in the Queensway Technical Report; the accuracy of budgeted exploration and development costs and expenditures; future currency exchange rates and interest rates; operating conditions being favourable such that the Company is able to operate in a safe, efficient and effective manner; the Company’s ability to attract and retain skilled personnel; political and regulatory stability; the receipt of governmental, regulatory and third-party approvals, licenses and permits on favourable terms; obtaining required renewals for existing approvals, licenses and permits on favourable terms; requirements under applicable laws; sustained labour stability; stability in financial and capital goods markets; availability of equipment.

 

Furthermore, such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of the Company to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking statements. Such risks include, without limitation: the Company may fail to find a commercially viable deposit at any of its mineral properties; there are no resources or mineral reserves on any of the properties in which the Company has an interest; the Company’s plans may be adversely affected by the Company’s reliance on historical data compiled by previous parties involved with its mineral properties; mineral exploration and development are inherently risky; the mineral exploration industry is intensely competitive; additional financing may not be available to the Company when required or, if available, the terms of such financing may not be favourable to the Company; fluctuations in the demand for gold; the Company may not be able to identify, negotiate or finance any future acquisitions successfully, or to integrate such acquisitions with its current business; the Company’s exploration activities are dependent upon the grant of appropriate licenses, concessions, leases, permits and regulatory consents, which may be withdrawn or not granted; the Company’s operations could be adversely affected by possible future government legislation, policies and controls or by changes in applicable laws and regulations; there is no guarantee that title to the properties in which the Company has a material interest will not be challenged or impugned; the Company faces various risks associated with mining exploration that are not insurable or may be the subject of insurance which is not commercially feasible for the Company; the volatility of global capital markets over the past several years has generally made the raising of capital more difficult; compliance with environmental regulations can be costly; social and environmental activism can negatively impact exploration, development and mining activities; the success of the Company is largely dependent on the performance of its directors and officers; the Company’s operations may be adversely affected by First Nations land claims; the Company and/or its directors and officers may be subject to a variety of legal proceedings, the results of which may have a material adverse effect on the Company’s business; the Company may be adversely affected if potential conflicts of interests involving its directors and officers are not resolved in favour of the Company; the Company’s future profitability may depend upon the world market prices of gold; dilution from future equity financing could negatively impact holders of the Company’s securities; failure to adequately meet infrastructure requirements could have a material adverse effect on the Company’s business; the Company’s projects now or in the future may be adversely affected by risks outside the control of the Company; the Company is subject to various risks associated with climate change; other factors discussed under “Risk and Uncertainties”.

 

Although the Company has attempted to identify important factors that could cause actual actions, events, conditions, results, performance or achievements to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events, conditions, results, performance or achievements to differ from those anticipated, estimated or intended.

 

 - 109 - 

 

 

 

Management’s Discussion and Analysis 

For the three and nine months ended September 30, 2023 and 2022

 

The Company cautions that the foregoing lists of important assumptions and factors are not exhaustive. Other events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward-looking statements contained herein. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking statements.

 

Forward-looking statements contained herein are made as of the date of this MD&A and the Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as and to the extent required by applicable securities laws.

 

Off-Balance Sheet Arrangements

 

The Company does not utilize off-balance sheet arrangements.

 

Proposed Transactions

 

There are no proposed transactions at the date of this report.

 

Additional Information

 

Additional information relating to the Company is available on SEDAR+ at www.sedarplus.ca.

 

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