New Found Gold has begun commercial production at its Hammerdown mine in central Newfoundland, Canada, after meeting three operating benchmarks over a sustained period. The company said the milestone was reached on August 19, following 60 consecutive days in which the Pine Cove mill processed an average of about 748 tonnes per day, with gold recovery of 87.7% and an average feed grade of 2.92 grams per tonne.
The announcement, made on Wednesday, lifted New Found's shares by more than 5% to C$1.73 in Toronto, giving the company a market value of roughly C$929.5 million (US$669 million). The stock has traded between C$1.34 and C$3.59 over the past 12 months.
What commercial production means
Commercial production is a formal declaration that a mine has achieved a consistent level of output and processing, typically after a ramp-up period. For New Found, the trigger was the sustained performance at the Pine Cove mill, which is located about 95 km northeast of Hammerdown. The mill is currently configured as a 700-tonne-per-day flotation-leach-Merrill-Crowe circuit.
Hammerdown produced 9,140 ounces of gold in the first eight months of 2026, including 1,989 ounces in August. According to a preliminary economic assessment released in February, the mine could produce 251,287 ounces of gold over a 13-year life at all-in sustaining costs of US$2,429 per ounce. At a 5% discount rate, the project has a post-tax net present value of C$199.2 million, assuming a long-term gold price of US$3,475 per ounce.
Next steps and expansion plans
New Found plans to install a crusher and sorter at Hammerdown, with completion targeted for the fourth quarter of this year. The company says this should reduce crushing costs and raise the grade of ore sent to Pine Cove. It also intends to convert and expand the Pine Cove mill to a 1,400-tonne-per-day gravity-carbon-in-leach circuit, with completion expected by the fourth quarter of 2027.
Chief executive Keith Boyle said in a statement that reaching production on schedule is a major milestone and the next step towards New Found becoming Canada's next mid-tier gold producer. He added that the company would continue to focus on delivering solid gold production while advancing its flagship Queensway project to production.
National Bank of Canada Capital Markets analyst Rabi Nizami said the news shows a renewed operating focus under Boyle's management and gives a positive readthrough for the Queensway project. He noted that the next catalyst would be an updated mineral resource estimate and a preliminary economic assessment for Queensway, expected in the coming weeks. Nizami also said he expects tighter infill drilling to support a higher-confidence short-term mine plan.
Newfoundland's growing gold sector
Hammerdown's move into commercial production adds to Newfoundland's emergence as a gold-producing jurisdiction. It comes less than a year after Equinox Gold's larger Valentine mine reached the same milestone. New Found acquired Hammerdown through its C$292-million purchase of Maritime Resources just over a year ago.
The company's main Queensway project is located near Gander, about 340 km northwest of St. John's. As the mine ramps up, investors will be watching for the upcoming resource update and economic assessment for Queensway, which could shape the company's longer-term outlook.
Key takeaways
- New Found Gold declared commercial production at Hammerdown on August 19 after 60 days of sustained throughput, recovery, and grade.
- The Pine Cove mill processed about 748 tonnes per day with 87.7% gold recovery and an average feed grade of 2.92 g/t during the period.
- Hammerdown produced 9,140 ounces of gold in the first eight months of 2026, with a 13-year mine plan and all-in sustaining costs of US$2,429 per ounce.
- Shares rose more than 5% to C$1.73, and the company plans to expand the mill and add a crusher and sorter.
Common questions
What is commercial production in gold mining?
Commercial production is a formal declaration that a mine has achieved a consistent level of output and processing, typically after a ramp-up period. It signals that the operation is running at a sustainable level and can be expected to generate revenue on an ongoing basis.
Where is the Hammerdown mine located?
Hammerdown is in central Newfoundland, Canada, about 340 km northwest of St. John's. The ore is processed at the Pine Cove mill, which is about 95 km northeast of the mine.
What are the future plans for the Pine Cove mill?
New Found plans to convert and expand the mill from its current 700-tonne-per-day flotation-leach-Merrill-Crowe circuit to a 1,400-tonne-per-day gravity-carbon-in-leach circuit, with completion expected by the fourth quarter of 2027.
For those tracking the gold market, the live gold price remains the key reference point for assessing the value of production from new mines like Hammerdown.