New Found Gold is set to acquire Maritime Resources in a transaction worth roughly $292 million, which would result in a multi-asset gold producer based in central Newfoundland and Labrador.  

The merged company will unite New Found’s Queensway gold project, located 15 kilometres west of Gander, and Maritime’s Hammerdown gold project, situated about 15 kilometres northwest of Springdale. Queensway is slated to begin production in 2027, while Hammerdown is targeting first output later this year and plans to ramp up to full capacity by early 2026.  

The two projects, located about 180 kilometres apart, are expected to benefit from shared facilities such as Maritime’s Pine Cove mill and its Nugget Pond hydrometallurgical gold plant, which will provide off-site processing for Queensway. Mineralized stockpiles are already being processed at the Pine Cove mill, which restarted operations in February following a two-year period of care and maintenance. 

“This acquisition positions New Found Gold as an emerging producer with gold production expected to commence next year,” said Keith Boyle, CEO and director of New Found Gold, in a Sept. 5 news release. “The synergies obtained by this combination derisks Queensway, providing access to a milling facility and near-term cash flow to support Phase I development, setting the stage for Queensway to commence production in 2027.” 

In the same release, Garett Macdonald, president, CEO and director of Maritime Resources, said “Bringing the two company’s assets together will unlock operational synergies, generating cash flow by utilizing both Maritime gold plants to fund future growth at Hammerdown, Queensway, and aggressive exploration across all land holdings.” 

Under the agreement, Maritime shareholders will receive 0.75 of a New Found share for each Maritime share they own. After the deal closes, New Found investors will hold 69 per cent of the merged company, while Maritime shareholders will own 31 per cent. 

The transaction is expected to be finalized in the fourth quarter of this year. 

The Hammerdown project 

A 2022 feasibility study for the fully permitted Hammerdown open-pit project outlined annual production of 50,000 ounces of gold at an all-in sustaining cost (AISC) of US$912 per ounce. The study also projected an after-tax net present value of $251 million at a base case of US$2,500 per ounce of gold. Proven and probable reserves are reported at 1.9 million tonnes, grading 4.46 grams of gold per tonne, for a total of 272,000 contained ounces. 

Hammerdown previously operated as an underground mine under Richmont Mines from 2000 to 2004, producing 143,000 ounces of gold at a cutoff grade of 8.2 grams per tonne. Operations were halted in 2004 due to low gold prices. 

The Queensway project 

According to a July preliminary economic assessment (PEA), Queensway is planned as a 15-year operation expected to produce 1.5 million ounces of gold at an AISC of US$1,256 per ounce. The PEA outlined a staged development plan for the project, starting with a small, high-grade open-pit mine using toll milling, followed by a larger operation that will incorporate both open-pit and underground mining. 

The project sets out a first stage with $155 million in capital expenditure, producing an average of 69,300 ounces per year over the initial four years. This will be followed by a second-stage expansion costing $442 million, which will raise output to approximately 172,200 ounces annually.