New Found Gold (NFGC) - 2025 Q2 - Quarterly Report

Condensed Interim Financial Statements New Found Gold Corp.'s Q2 2025 interim financials show increased assets and equity, reduced net loss, and improved cash flow from a prospectus offering Condensed Interim Statements of Financial Position As of June 30, 2025, total assets and equity significantly increased due to cash, with liabilities rising from a new flow-through share premium | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change ($) | Change (%) | | :-------------------------- | :------------------ | :-------------------- | :--------- | :--------- | | Total Assets | 113,133,217 | 74,019,011 | 39,114,206 | 52.84% | | Cash and cash equivalents | 66,420,308 | 22,317,548 | 44,102,760 | 197.61% | | Total Liabilities | 20,920,060 | 7,448,306 | 13,471,754 | 180.88% | | Total Equity | 92,213,157 | 66,570,705 | 25,642,452 | 38.52% | - The increase in total liabilities is primarily attributable to a new flow-through share premium of $15,487,832 as of June 30, 2025, which was not present at December 31, 2024[2] Condensed Interim Statements of Loss and Comprehensive Loss For H1 2025, the company reported a reduced net loss, driven by lower exploration costs and improved investments, despite increased share-based compensation | Metric (Six months ended June 30) | 2025 ($) | 2024 ($) | Change ($) | Change (%) | | :---------------------------------- | :------- | :------- | :--------- | :--------- | | Exploration and evaluation expenditures | 14,370,837 | 24,289,001 | (9,918,164) | -40.83% | | Share-based compensation | 1,358,932 | 626,389 | 732,543 | 116.95% | | Loss from operating activities | (21,265,759) | (28,749,908) | 7,484,149 | -26.03% | | Realized gains (losses) on disposal of investments | 160,701 | (23,420) | 184,121 | -786.17% | | Unrealized gains (losses) on investments | 633,900 | (1,047,216) | 1,681,116 | -160.53% | | Loss and comprehensive loss for the period | (19,500,643) | (25,277,094) | 5,776,451 | -22.85% | | Loss per share – basic and diluted ($) | (0.10) | (0.13) | 0.03 | -23.08% | Condensed Interim Statements of Cash Flows H1 2025 cash and cash equivalents significantly increased, driven by financing activities, decreased operating outflows, and positive investing cash flow | Cash Flow Activity (Six months ended June 30) | 2025 ($) | 2024 ($) | Change ($) | Change (%) | | :-------------------------------------------- | :------- | :------- | :--------- | :--------- | | Net cash and cash equivalents (used in) operating activities | (18,685,900) | (26,720,194) | 8,034,294 | -30.07% | | Net cash and cash equivalents generated from (used in) investing activities | 2,651,582 | (454,546) | 3,106,128 | -683.36% | | Net cash and equivalents generated from financing activities | 60,177,983 | 25,490,001 | 34,687,982 | 136.08% | | Net increase (decrease) in cash and cash equivalents | 44,102,760 | (1,658,231) | 45,761,000 | -2759.64% | | Cash and cash equivalents at end of period | 66,420,308 | 52,226,578 | 14,193,730 | 27.18% | - The significant increase in cash from financing activities in 2025 was primarily due to the issuance of common shares in a prospectus offering, generating $63,480,000[6] Condensed Interim Statements of Changes in Equity Total equity significantly increased from December 2024 to June 2025, driven by a prospectus offering, partially offset by the period's loss and a flow-through premium | Metric | December 31, 2024 ($) | June 30, 2025 ($) | Change ($) | Change (%) | | :-------------------------------- | :-------------------- | :---------------- | :--------- | :--------- | | Total equity | 66,570,705 | 92,213,157 | 25,642,452 | 38.52% | | Issued in prospectus offering | - | 63,480,000 | 63,480,000 | N/A | | Flow-through premium | - | (16,242,600) | (16,242,600) | N/A | | Total loss and comprehensive loss for the period | (24,991,260) | (19,500,643) | 5,490,617 | -21.97% | - The company issued 28,980,000 common shares in a prospectus offering during the six months ended June 30, 2025, contributing significantly to the increase in share capital[9] Notes to the Condensed Interim Financial Statements These notes detail the company's operations, accounting policies, asset valuations, liabilities, equity, related party transactions, and financial instrument risks for Q2 2025 and 2024 1. Nature of Operations and Going Concern New Found Gold Corp.'s going concern status depends on securing financing due to an accumulated deficit and negative operating cash flows, despite a working capital surplus - 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[12] | Metric | June 30, 2025 ($) | | :------------------------------------ | :---------------- | | Accumulated deficit | (329,265,075) | | Shareholders' equity | 92,213,157 | | Working capital surplus | 48,450,351 | | Negative cash flow from operating activities (six months) | (18,685,900) | - Management is actively targeting sources of additional financing, including through the issuance of shares, to assure continuation of operations and exploration programs, as the company's ability to continue as a going concern depends on generating such financing[14] 2. Material Accounting Policy Information Interim financials follow IFRS (IAS 34) and consistent policies; new standards had no material impact, but IFRS 18 (effective 2027) impact is undetermined - The condensed interim financial statements have been prepared in accordance 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")[17] - The policies applied in these condensed interim financial statements are the same as those applied in the most recent annual financial statements and were consistently applied to all the periods presented[19] - IFRS 18 "Presentation and Disclosure in Financial Statements" is not yet effective (January 1, 2027) and its effects on the Company's financial statements have not yet been determined, though other new standards had no material impact[24][25] 3. Exploration and Evaluation Assets Exploration and evaluation assets remained stable at $34.57 million as of June 30, 2025, with expenditures significantly decreasing to $14.37 million, primarily in drilling and consulting | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change ($) | Change (%) | | :-------------------------------- | :---------------- | :-------------------- | :--------- | :--------- | | Exploration and evaluation assets | 34,573,359 | 34,505,484 | 67,875 | 0.20% | | Exploration expenditures (six months) | 14,370,837 | 24,289,001 | (9,918,164) | -40.83% | | Exploration Expenditure Category (Six months ended June 30, 2025) | Amount ($) | | :------------------------------------------------ | :--------- | | Drilling | 4,488,229 | | Salaries and consulting | 4,251,874 | | Assays | 1,464,176 | | Supplies and equipment | 642,923 | | Geophysics | 518,817 | | Metallurgy | 434,983 | | Preliminary economic assessment | 428,151 | | Office and general | 419,186 | | Travel and accommodations | 382,406 | | Technical reports | 243,460 | | Waste rock geochemistry | 227,566 | | Resource estimate | 251,480 | | Environmental studies | 290,245 | | Engineering and evaluation studies | 158,097 | | Reclamation | 125,816 | | Imagery and mapping | 69,185 | | Trenching | 53,465 | | Geochemistry | 34,048 | | Permitting and studies | 33,580 | | Exploration cost recovery | (146,850) | | Total | 14,370,837 | 3.1. Queensway Project – Gander, Newfoundland The 100%-owned Queensway Project in Newfoundland and Labrador, covering 175,450 hectares, integrated Kingsway Project in 2024, and actively manages various NSR royalties - As at June 30, 2025, the Company owned a 100% interest in 103 mineral licenses including 7,018 claims comprising 175,450 hectares of land located near Gander, Newfoundland and Labrador[29] - On July 9, 2024, the Company acquired a 100% interest in LabGold's Kingsway Project, located near Gander, Newfoundland and Labrador, which is considered part of the Queensway Project, for 5,263,157 common shares valued at $20,000,000[34] - The Queensway Project carries various net smelter return ("NSR") royalties ranging from 0.4% to 3.00%, many of which include buy-back provisions. The Company also purchased 0.6% of a 1.6% NSR royalty for $1,950,000 cash and 300,000 common shares in July 2024, and the remaining 1.0% NSR for $1,000,000 cash during 2024[30][31][32] 4. Property and Equipment Property and equipment carrying amount slightly decreased to $7.72 million as of June 30, 2025, with $134,256 in additions and $353,571 in depreciation | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change ($) | Change (%) | | :-------------------- | :---------------- | :-------------------- | :--------- | :--------- | | Carrying Amount | 7,718,834 | 7,938,149 | (219,315) | -2.76% | | Additions (six months) | 134,256 | N/A | N/A | N/A | | Depreciation (six months) | 353,571 | N/A | N/A | N/A | 5. Investments Total investments increased to $1.04 million as of June 30, 2025, driven by warrant fair value gains, offsetting decreased equities, with substantial realized and unrealized gains | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change ($) | Change (%) | | :---------------- | :---------------- | :-------------------- | :--------- | :--------- | | Total Investments | 1,042,454 | 926,019 | 116,435 | 12.57% | | Equities held | 327,264 | 779,019 | (451,755) | -58.00% | | Warrants held | 715,190 | 147,000 | 568,190 | 386.52% | | Investment Gains/Losses (Six months ended June 30) | 2025 ($) | 2024 ($) | Change ($) | | :------------------------------------------------- | :------- | :------- | :--------- | | Realized gains (losses) on investments | 160,701 | (23,420) | 184,121 | | Unrealized gains (losses) on investments | 633,900 | (1,047,216) | 1,681,116 | 5.1. Equities Held Equities held decreased to $327,264 as of June 30, 2025, primarily due to Labrador Gold Corp. share disposal, while other holdings were maintained or increased | Equity | June 30, 2025 Fair Value ($) | December 31, 2024 Fair Value ($) | | :-------------------- | :----------------------------- | :------------------------------- | | Exploits Discovery Corp. | 207,873 | 187,086 | | Maritime Resources Corp. | 119,391 | - | | Labrador Gold Corp. | - | 591,933 | | Total Equities | 327,264 | 779,019 | - Investments in Exploits Discovery Corp. and Labrador Gold Corp. represent investments in public companies that are quoted on an active exchange and are measured using the quoted market price of these companies[39] 5.2. Warrants Held Warrants held fair value significantly increased to $715,190 as of June 30, 2025, exercisable into Maritime Resources Corp. shares and valued using a Black-Scholes model | Warrant | June 30, 2025 Fair Value ($) | December 31, 2024 Fair Value ($) | | :-------------------- | :----------------------------- | :------------------------------- | | Maritime Resources Corp. | 715,190 | 147,000 | | Total Warrants | 715,190 | 147,000 | - Each warrant is exercisable into one common share of Maritime Resources Corp. at a price of $0.70 per warrant until August 14, 2025, subject to extension[40] - Warrants without a quoted market price are valued using a Black-Scholes option pricing model, incorporating assumptions like risk-free interest rate, expected dividend yield, expected volatility, and expected remaining life[42] 6. Investment in Kirkland Lake Discoveries Corp. The company holds a 25.42% ownership in KLDC as of June 30, 2025, maintaining significant influence, with KLDC's loss share decreasing and no impairment indicators - The Company holds a 25.42% ownership interest in Kirkland Lake Discoveries Corp. ("KLDC") as at June 30, 2025, and continues to have significant influence over KLDC[44][45] | Metric (Six months ended June 30) | 2025 ($) | 2024 ($) | Change ($) | Change (%) | | :-------------------------------- | :------- | :------- | :--------- | :--------- | | Share of KLDC's loss for the period | (57,792) | (740,380) | 682,588 | -92.19% | | Net Carrying amount – June 30, 2025 | 1,458,008 | N/A | N/A | N/A | | Estimated fair value of investment | 1,144,500 | N/A | N/A | N/A | - The Company performs an impairment indicator assessment on its investment in KLDC at each period end, and at June 30, 2025, there were no indicators of impairment[46] 7. Secured Notes The company fully disposed of secured notes in H1 2025 for $2,778,000 gross proceeds, realizing a $55,911 gain, with these FVTPL notes initially from Maritime Resources Corp - During the six months ended June 30, 2025, the Company sold the Notes for gross proceeds of $2,778,000 (US**$2,000,000**)[51] | Metric | December 31, 2024 ($) | June 30, 2025 ($) | | :-------------------------- | :-------------------- | :---------------- | | Secured notes | 2,817,554 | - | | Realized gain on disposal | N/A | 55,911 | - The secured notes were classified as a financial instrument at fair value through profit and loss ("FVTPL") in accordance with IFRS 9 "Financial Instruments"[49] 8. Flow-Through Share Premium A new flow-through share premium liability of $16,242,600 was incurred in Q2 2025, with $754,768 settled, requiring $53,738,085 in CEE by December 31, 2026 | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :------------------------------------------------- | :---------------- | :-------------------- | | Liability incurred on flow-through shares issued | 16,242,600 | - | | Settlement of flow-through share premium on expenditures incurred | (754,768) | (6,519,848) | | Balance at June 30, 2025 | 15,487,832 | - | - During the six months ended June 30, 2025, the Company incurred $2,618,815 in Qualifying CEE and amortized a total of $754,768 of its flow-through share premium liabilities[54] - As at June 30, 2025, the Company must spend another $53,738,085 of Qualifying CEE by December 31, 2026, to satisfy its remaining current flow-through share premium liability of $15,487,832[55] 9. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities decreased to $5.35 million as of June 30, 2025, with the reclamation provision also decreasing to $2.38 million due to incurred costs | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change ($) | Change (%) | | :------------------------------------ | :---------------- | :-------------------- | :--------- | :--------- | | Accounts payable and accrued liabilities | 5,352,606 | 7,325,203 | (1,972,597) | -26.93% | | Reclamation provision | 2,378,988 | 2,426,378 | (47,390) | -1.95% | - The reclamation provision is based on known requirements under provincial environmental protection laws and regulations, with reclamation costs incurred during the period being $118,462[57][58] 10. Share Capital and Reserves Share capital and reserves significantly increased, with common shares outstanding rising to 229.7 million as of June 30, 2025, driven by a $63.48 million prospectus offering and stock option exercises | Metric | June 30, 2025 | December 31, 2024 | Change | | :------------------------------------ | :------------ | :---------------- | :----- | | Common Shares Outstanding (Number) | 229,737,994 | 200,457,994 | 29,280,000 | | Share Capital (Amount) | $385,392,707 | $341,346,716 | $44,045,991 | | Reserves (Amount) | $36,085,525 | $34,988,421 | $1,097,104 | - The company completed a prospectus offering on June 12, 2025, issuing 28,980,000 common shares for aggregate gross proceeds of $63,480,000[60] - The company has a Share Purchase Option Plan allowing grants up to 10% of outstanding common shares and adopted a Share Unit Compensation Plan, both subject to regulatory and corporate approvals[66][67] 10.1. Details of Common Shares Issued During the Six Months Ended June 30, 2025 In H1 2025, 28,980,000 common shares were issued via a prospectus offering for $63,480,000 gross proceeds, incurring $3,808,862 in costs, and 300,000 options were exercised for $617,453 - On June 12, 2025, the Company completed a bought deal offering of 24,610,000 flow-through common shares and 4,370,000 non-flow-through common shares, for aggregate gross proceeds of $63,480,000[60] - The Company incurred share issuance costs of $3,808,862 in cash and recognized a flow-through share premium of $16,242,600[60] - During the six months ended June 30, 2025, 300,000 stock options were exercised at a weighted average exercise price of $1.19 per share for gross proceeds of $617,453[61] 10.2. Details of Common Shares Issued During the Year Ended December 31, 2024 In 2024, 5,857,242 common shares were issued via an ATM program for $27,522,494, plus shares for Kingsway Project acquisition, royalty interests, and a legal claim settlement - During the year ended December 31, 2024, the Company sold 5,857,242 common shares under the ATM program for gross proceeds of $27,522,494[63] - On July 9, 2024, the Company issued 5,263,157 common shares with a value of $20,000,000 for the acquisition of the Kingsway Project[65] - The Company issued 300,000 common shares with a value of $1,011,000 for the acquisition of certain royalty interests on August 8, 2024, and 370,000 common shares with a value of $1,750,100 for a legal claim settlement on June 26, 2024[64][65] 10.3. Share Purchase Option Compensation Plan The shareholder-approved Share Purchase Option Plan grants options to eligible participants, limited to 10% of outstanding shares in aggregate and 5% for any single optionee within twelve months - The Company has a share purchase option plan (the "Option Plan") approved by shareholders, allowing grants to officers, directors, employees, and service providers[66] - The Option Plan is based on the maximum number of eligible shares not exceeding 10% in the aggregate and 5% with respect to any one optionee of the Company's outstanding common shares in any twelve-month period[66] 10.4. Share Unit Compensation Plan The Share Unit Plan for RSUs, DSUs, and PSUs is capped at 10% of outstanding shares with the Option Plan, subject to shareholder approval at the next AGM - The Company adopted a share unit plan (the "Share Unit Plan") to grant incentive awards consisting of restricted share units ("RSUs"), deferred share units ("DSUs"), and performance share units ("PSUs") to officers, directors, employees, and service providers[67] - The Share Unit Plan, in conjunction with the Option Plan, cannot exceed 10% of the issued and outstanding common shares of the Company and is subject to shareholder approval at the Company's next Annual General Meeting of Shareholders on August 20, 2025[67] 10.5. Share Purchase Options As of June 30, 2025, outstanding share purchase options decreased to 8,038,000 (from 10,556,750) with a weighted average exercise price of $3.14, with 3,770,000 granted and 300,000 exercised in H1 2025 | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Outstanding Options (Number) | 8,038,000 | 10,556,750 | | Exercisable Options (Number) | 5,391,542 | N/A | | Weighted Average Exercise Price ($) | 3.14 | 3.97 | | Weighted Average Contractual Remaining Life (Years) | 2.94 | 1.50 | | Option Activity (Six months ended June 30, 2025) | Number of Options | | :----------------------------------------------- | :---------------- | | Granted | 3,770,000 | | Exercised | (300,000) | | Cancelled/Forfeited/Expired | (5,988,750) | | Weighted Average Fair Value (Six months ended June 30) | 2025 ($) | 2024 ($) | | :----------------------------------------------------- | :------- | :------- | | Fair value of share purchase options granted | 0.98 | 3.06 | | Fair value of share purchase options exercised | 0.74 | 0.38 | | Closing share price at the date of exercise | 2.04 | 4.24 | 11. Related Party Balances and Transactions Related party transactions include administrative, exploration, and investor relations services, with key management personnel compensation significantly increasing to $4.19 million in H1 2025, including termination benefits | Related Party Transaction (Six months ended June 30) | 2025 ($) | 2024 ($) | | :------------------------------------------------- | :------- | :------- | | Amounts paid to PJH Consulting, LLC (administrative services) | 42,520 | - | | Amounts paid to EarthLabs Inc. (exploration and evaluation) | - | 9,000 | | Amounts paid to Notz Capital Corp. (corporate development and investor relations) | 46,921 | 87,964 | | Key Management Personnel Compensation (Six months ended June 30) | 2025 ($) | 2024 ($) | | :--------------------------------------------------------------- | :------- | :------- | | Salaries and Consulting | 1,692,294 | 794,140 | | Share-based compensation | 1,464,653 | 59,297 | | Bonus | 1,031,760 | 455,760 | | Total | 4,188,707 | 1,309,197 | - Key management personnel compensation for 2025 includes termination benefits of $424,080 for Collin Kettell and $505,440 for Greg Matheson, in accordance with their management agreements[76][77] 12. Basic and Diluted Loss Per Common Share For H1 2025, basic and diluted loss per common share improved to $(0.10) from $(0.13), with anti-dilutive options excluded from diluted EPS due to net loss | Metric (Six months ended June 30) | 2025 | 2024 | | :---------------------------------------- | :--- | :--- | | Loss per share – basic and diluted ($) | (0.10) | (0.13) | | Weighted average number of common shares outstanding - Basic and diluted | 204,465,204 | 187,534,833 | - For the three and six months ended June 30, 2025 and 2024, the Company incurred net loss and comprehensive loss. As such, diluted loss per share excludes any potential conversion of 8,038,000 (2024 - 12,186,000) share purchase options as they are anti-dilutive[81] 13. Supplemental Disclosure with Respect to Cash Flows H1 2025 supplemental cash flow highlights non-cash investing/financing, including interest income in shares and issuance costs in payables, with decreased cash paid for interest and significantly reduced cash received | Non-Cash/Cash Flow Item (Six months ended June 30) | 2025 ($) | 2024 ($) | | :------------------------------------------------- | :------- | :------- | | Interest income received in common shares of Maritime Resources Corp. | 74,468 | - | | Share issuance costs included in accounts payable and accrued liabilities | 204,175 | 97,163 | | Cash paid for interest | 9,473 | 12,699 | | Cash received for interest | 306,635 | 1,640,614 | 14. Settlement of Legal Claim On June 5, 2024, a legal claim challenging a 2019 share sale was settled, with plaintiffs receiving 3,750,000 common shares, and the company issuing 370,000 shares valued at $1,750,100 - On June 5, 2024, the Company entered into a Settlement Agreement with ThreeD Capital Inc. and 1313366 Ontario Inc., resolving a lawsuit challenging a 2019 share sale[87] - The Plaintiffs received a total of 3,750,000 common shares of the Company from the Defendants as part of the settlement[87] - The Company issued 370,000 common shares to the Plaintiffs with a total value of $1,750,100, recorded in the statement of loss and comprehensive loss for the year ended December 31, 2024[87] 15. Financial Instruments The company's financial instruments, primarily investments, are measured at fair value through profit or loss within a hierarchy, with credit, liquidity, and market risk management unchanged since December 31, 2024 - The Company's financial instruments measured at fair value are its investments, which includes equities, warrants and Notes held, classified according to a fair value hierarchy (Level 1 for equities, Level 2 for warrants and Notes)[88][89] - The Company manages credit risk (low due to high-rated financial institutions), liquidity risk (relies on share issuance for funding), and market risk (currency, interest rate, commodity price, and equity price risk)[92][94][96] - There have been no changes in management's methods for managing credit, liquidity, or market risks since December 31, 2024[93][95][102] 15.1. Fair Values Investments are measured at fair value, with equities as Level 1 and warrants (and former secured notes) as Level 2, with no fair value hierarchy movements in H1 2025 | Financial Instrument (June 30, 2025) | Carrying Amount ($) | Level 1 ($) | Level 2 ($) | Level 3 ($) | | :----------------------------------- | :------------------ | :---------- | :---------- | :---------- | | Investments | 1,042,454 | 327,264 | 715,190 | - | | Financial Instrument (December 31, 2024) | Carrying Amount ($) | Level 1 ($) | Level 2 ($) | Level 3 ($) | | :--------------------------------------- | :------------------ | :---------- | :---------- | :---------- | | Investments | 926,019 | 779,019 | 147,000 | - | | Secured notes | 2,817,554 | - | 2,817,554 | - | - Equities held are measured using quoted market prices (Level 1), while warrants and secured notes (now disposed) are valued using models like Black-Scholes or Hull-White with observable market conditions (Level 2)[88] 15.2. Financial Instrument Risk Exposure The company faces various financial instrument risks, including low credit, managed liquidity, and market risks (currency, commodity, equity price), with quantified sensitivities for currency and equity price fluctuations - Credit risk is low as sales taxes recoverable are due from the Canada Revenue Agency and cash is placed with financial institutions with high credit ratings[92] - Liquidity risk is managed through a planning and budgeting process, with the company historically relying on share issuance to fund exploration programs[94] - Market risks include currency risk (10% change in US$/CAD exchange rate would impact net loss by $200,091), commodity price risk (gold prices significantly affect value), and equity price risk (10% change in market price of investments would impact net loss by $104,245)[97][99][101] 16. Subsequent Event Subsequent to June 30, 2025, 1,000,000 share purchase options were exercised at $1.40 per share, generating $1,400,000 gross proceeds - Subsequent to June 30, 2025, 1,000,000 share purchase options with an exercise price of $1.40 per share were exercised for gross proceeds of $1,400,000[103]