New Found Gold Corp V.NFG

Rough Scoping of QWN 5% Discounted NPV after tax

[nozzpack]

I use V Lake 2022 FS as my projection basis.

Its After tax NPV5 at $2500 POG is $1.7 Billion cad.

That is based on Reserves of 2.7 m ounces grading 1,6 grams per ton .

My calculations , including the top 7 QWN prospects at drilled pit depths equivalent to those of V Lake ( 260 m ) , estimate just over 15 million ounces of Reserves for those 7 prospects , with an average grade of 11 grams per ton .
 

That is, those 7 prospects contain 6 times more revenue producing ounces as V Lake ( 15 m/ 2.7 m )
from whence the QWN after tax NPV 5 becomes about $10 billion cad.

But, there is more to that difference .
 

Because of low grades, V Lake needs a 10,000 tpd mill which costs over $800 million.

At 11 grams per ton , QWN can get by with 1500 tpd for equivalent production of 200,000 ounces per year.

Further high grades means lower cash costs .

Roughly speaking , QWN 7 best Prospects should produce a after tax NPV 5 of about $11 billion at $2500 POG and reseves of 15 m ounces 

Typically, producers now trade at about 0.75 times the NPV....

If you wish to be more conservative, Napkin Math estimates close to 7 million ounces of Reserves....about $5 billion after tax NPV5.

These are extraordinary numbers for just a portion of QWN and largely excludes depths below 300 meters ..

[suregold2]

For those commenting on stripping problems, take a look at the link below for the Hammerdown project. It has a strip ratio of 20:1, which is massive as compared to most open pit projects in Canada with strip rations of 6 or less. Yet the total cost to mine is just $4.31 per tonne of rock moved. Thus even at a 20 strip ratio, QWN mining cost will be negligible in the total ASIC! If strip ratio were

[nozzpack]

Grade is always important in gold mining. It covers a lot of costs. The HammerDown open pit mine has a grade of 4.6 grams per ton which is among the top decile of open pit grades. Keats Main once Keats Trench is included could have a grade 20 grams or more. Mining costs are much lower for open pit mining relative to Underground. The rule of thumb used to be that the UG grade should be twice

[BGraham2]

............"Anyway, here in NL all of our gold mines have been open pit."........... Nugget Pond and Hammerdown - weren't they UG??

[nozzpack]

HD started as an open pit. These were vertical veins whose base was thicker at depth . Maximun depth was something like 200 meters. POG was $400 and milling capacity was limited , so they went underground to depths of about 200 meters ..same for Nuggett Pond. Today, those would have been open pits ......V Lake average pit depth is 260 meters. Same with Goldboro. Pine cove, Stoger, Deer Cove