New Found Gold – ABC up for TSXV:NFG by carbon8ed

New Found Gold (TSXV: NFG ) is carving out an ABC up pattern with the ABC completed and the C to D leg underway. NFG announced today a bought deal private placement for $50MM dollars. The financing is being done as “flow through” which provides a tax benefit to the Canadian investors who participate and is typically, as in this case, priced above the market. Notably, this financing is being done without warrants which is an indication of strong demand.

The Palantir announcement this week that they recently purchased $51MM in gold bars and are willing to accept payment in gold from their customers going forward signals a sea change in the gold market. We see new, deep-pocketed participants arriving that were not previously involved in the gold market. They have enormous assets to protect.

I see this financing as consistent with the Palantir announcement. There is big money that wants to have an allocation to a sector of the market that is tiny on a relative basis. One of the most efficient ways, from that perspective, is this type of bought deal where they can get substantial exposure without having to buy in the market. The fundamentals and technicals appear mutually supportive here and the extreme negative sentiment in the gold market is icing on an already rich cake.

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