New Found Gold Corp V.NFG

Question

[AlwaysLong683]

The following is from NFG's press release dated August 12, 2021 in the "About NFG" section near the bottom of the document:

".......To date the Company has completed approximately 37.5% of its planned 200,000m drill program at Queensway North.  Nine rigs are in operation at Queensway with the drill count planned to increase to ten rigs by Q3 2021. With a current working capital balance of approximately $68 million, New Found is well funded for this program." 

If NFG is "well-funded for this program", why the need for the equity raise 7 days later on August 17.......?

If NFG has plenty of cash to fund their program until the end of 2021, I think the smart way to go would be for NFG to only raise equity if they think their shares are overvalued (or at least fully valued), Otherwise, I don't think it's a shareholder-freindly thing to do - why raise equity now when it's not needed unless you don't expect the share price to recover to the $12 - $13 range within the next three months or so.........?

[Gangsterme]

Can not help but think someone that spent all or part of the 50$ would have thought this out.....

[AlwaysLong683]

Additional note: NFG uses the same text about the $68M and being "well-funded" in the very same August 17 PR announcing the new $50M equity raise. Also, I believe most companies indicate why the money is needed / what it will be used for in such a press release, but it doesn't appear as if NFG mentions what the money is for in this August 17 PR. Very odd.....

[BetontheFed1]

As an explorer with no cash flow from production for at least another 5 to 8 years you always grab what's offered, especially as the shares taken were at a higher price than the current share price.  Might be why they're holding off releasing any drill results.  If drill results are so-so, then they were smart to do the raise now.

[Kewl002]

My expectation is that we will find out (over the course of time) that everything that is occurring now has to do with finalizing of the listing on the AMEX --- including no "leaks" from mgmt about anything period, preliminary financing approval, execution of the minimum acceptable size share offering possible that will flow to AMEX affiliated exchange trading vehicles, co-ordinated

[AlwaysLong683]

To be clear, I am simply asking a question based on what I view as a questionable decision, not claiming to know the answer - maybe there are good reasons as to why the equity raise needed to be done now, but I doubt anyone posting on this BB knows for sure. Nonetheless, NFG's equity raise news release was issued after market close yesterday (August 17 at 4:21 pm), so today was the first

[Retiredgeo]

I disagree. 4.3 million new shares were snapped up by 8 AM this morning.  The discounted retail price of this offering sucked the share price down but now that it has come and gone the share price should recover.  Easy money for those lucky enough to buy in.

[Bookworm28]

I like NFG, but kinda annoyed (to say the least) that they did a flow-through. Hopefully we get a good pop/rebound tomorrow.

[likeike]

Well Bookworm that is because you are listening to a used car salesman that knows nothing but sell everything and has no grasp of Flow Through Shares. I first participated in some over 30 years ago and they serve their purpose in exploration of all kinds. NFG has no need for a tax writeoff so why not give it to others so you can raise money more cheaply. The downside always has been the

[Little]

They raised 50 million and only increase the shares by about 2 point 4 percent. How many exploration companies can do that.  They are not even 1/2 done drilling. Let me know if I am wrong because this is what I am thinking

[diabase1]

You are right. And I'm thinking they should spend another $10M by taking an interest in ROX!!

[megacopper]

  Yes NFG would be wise to make an investment in ROX similar to what they did with NFLD and LAB so they have those faults covered right through the province. The NFG guys want this money for more than just drilling. 

[likeike]

Yes NFG would be wise to make an investment in ROX similar to what they did with NFLD and LAB so they have those faults covered right through the province. The NFG guys want this money for more than just drilling.  Hey Mega are you and the Rockdoctor convinced ROX may have the goods? I know LAB & NFLD are clearly on the Appleton so why they took a position there but with still no major

[likeike]

Findings today a little disapointing no where near over a 100 g/ton IKE https://stockhouse.com/companies/bullboard?symbol=v.rox&postid=33729296

[rob1237]

NFG is a gift right now.  

[megacopper]

  I don't know 100% for sure the ROX mineralization is identical to that of NFG. That Fault structure goes right through the island. There are several faults and it seems so far the Appleton Fault is the best but it's still early in the exploration phase with all of these companies. The Rock Doctor feels a lot of these faults were most likely connected at one time but have been

[diabase1]

A very nice post Megacopper. Take a look at the magnetic map of Newfoundland. Google Magnetic Map of Newfoundland. It's in an article, so you will have to scroll down, past the Labrador map. The next page is the Newfoundland map. The light blue belt that runs thru Gander Lake is the magnetic low that coincides with the Dog Bay Line and the Grub Line. It trends south from Gander Lake and then

[megacopper]

  Yes you are 100% correct. Thanks for the link.  That should be the sweet spot for the right kind of rocks similar to what NFG is hitting. As you say anywhere along there could host epizonal high grade gold right through that trend from coast to coast. Still early days guys. This fall things should heat up for all of the NL gold juniors. 

[diabase1]

An interesting magnetic map. The Exploits Discoveries Middle Ridge block seems to be within this Belt. 

[cyberman]

thanks for the map link diabase1, handy dandy, for more specific to NFG there's plenty at this link, some light reading too :) https://newfoundgold.ca/wp-content/uploads/2020/08/NFGC-Technical-Report.pdf

[Bookworm28]

You make some valid points. It's inconsequential, given the number of shares. GLTA. 

[Global1966]

Because you know there is a lot more than 200,000 metres needed to drill out the ever growing number of emerging zones and you don't want to be scrambling for cash if and when the big crash comes in equity markets and liquidity dries up. That's my bet anyway

[Beaubie]

 People will give you money when you don't need it and when you needed they won't. Get the cash in the wate coffers now.

[likeike]

Just think about guys a year ago they turned down 50 mill of investment income. That would have caused around 40 million shares of dilution....and some guys  are whining about 4 mill shares....are you kidding me. This is a great raise of cash and I still say HOT DAMN  IKE

[megacopper]

  Yes anytime you can raise $50 million cash like this with very little dilution you take it. It's only an extra 4 million shares. That's a joke. This is great news getting this extra money. Guys are losing sight of the big picture here with NFG and all the gold right up through the central gold belt. These guys want to get positioned so they control as much ground as possible and

[BlueChipper2020]

Likeike and Mega I agree 100%. You raise big time cash from a position of strength and when you do not absolutely need it in the exploration business. Dilution is laughable and watch this price soar back up. Shaking out weak hands is all you saw today. NFG is positioned very strong for the next few years. BC

[eldreco]

Agreed, Ike! To have the SP what it is currently (after a year) and to be able to offer only 4.4 mill shares to achieve $50mill...AND have willing takers - that speaks volumes to me.  A few "raises" at 40 million shares when you are a "penny dreadful" inevitably leads to a consolidation.  We should all be pleased that NFG will likely not have to go back to the well

[rob1237]

at 3.5% dilution the company now has 100 million plus in the bank Drilling-into 2022 with no need for money

[rob1237]

NFG will find more gold. Simple.