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NFLD: New Assets & Poised for Discovery

What you need to know:
• Exploits recently acquired a sizeable land package in Ontario and Quebec as it repositions itself to explore high ROI projects in Tier 1 jurisdictions.
• The assets hold ~680Koz of historical gold resources across Ontario and Quebec, reducing exploration risk as it looks to expand these resources.
• NFLD has commenced work at the Hawkins Project (Ontario) and two of its three Quebec assets, with drilling expected this fall.
• At just ~US$5/oz per historical gold ounce in the ground, Exploits trades at a 68% discount to its peer group average of ~US$16/oz.

Exploits Discovery Corp. (NFLD:CSE, NFLDF:OTC) is a Canadian gold exploration company advancing its core assets in top jurisdictions in Ontario and Quebec. The assets include the Hawkins Project in Ontario and the Quebec asset package, comprised of Wilson, Fenton, and Benoist, all of which host historical resource estimates totalling ~680Koz of gold. The Company also controls a strategic land package in Newfoundland, situated adjacent to New Found Gold’s Queensway Project. We are initiating coverage on Exploits Discovery Corp. with a BUY rating and target price of $0.10/share.

Investment Thesis Summary
Large Exploration Potential in Top Jurisdictions. Exploits controls ~64,000ha of prospective land across Ontario and Quebec, offering rare exposure to Canada’s most prolific greenstone belts. The assets collectively have ~680Koz of historical gold resources, supporting lower risk exploration as the Company looks to bring the existing resources up to compliance and expand their footprint.

Low-Hanging Fruit & Scalability. Exploration work has already started at Hawkins, Wilson, and Fenton, initially focusing on data reconciliation and preliminary exploration activities. This work will lead to the derivation of drill targets for a drill program this fall. The Company sees low-hanging fruit for resource expansion along strike of the historic resources and will target these areas in the near term. We believe NFLD’s four properties across Ontario and Quebec show the potential of a multi-million-ounce resource package.

Strategic Land Positioning in Newfoundland. Exploits holds 35,000ha of land in Newfoundland’s most active gold corridor, directly adjacent to New Found Gold’s Queensway Project. One of NFLD’s properties sits meters from a proposed pit in New Found Gold’s recently announced PEA ($743M after-tax NPV5%). We see high potential for these assets to be monetized, and in the meantime, the neighbour continues to increase their value.

Leadership & Ownership. NFLD is led by CEO Jeff Swinoga, a seasoned executive with prior senior leadership roles at Torex Gold, Hudbay Minerals, First Mining Gold, and North American Palladium, and he most recently co-led EY Canada’s Mining & Metals practice. The Company is backed by Eric Sprott (~14% ownership) and has a clean share structure.

Significant Cash Position & Valuation Disconnect. Exploits trades at just US$5/oz based on the Company’s historical resource estimates, which is well below the group average of US$16/oz, despite holding a large multi-asset portfolio. Sitting with ~$4M in cash, NFLD is one of the most cashed-up sub-$10M market cap explorers, providing significant upside if exploration is successful.