Knights under-21s coach Tony Gleeson hailed his side for displaying a "Newcastle spirit" that very nearly took them to the club's first Jersey Flegg title since 1992.
Newcastle suffered a heart-breaking one-point loss to Penrith in golden-point extra-time of the competition's grand final at CommBank Stadium in Parramatta on Sunday.
Holding an 18-6 lead with seven minutes left to play in regulation time, the Knights looked on track for an historic win but the Panthers crossed twice to send the game beyond 70 minutes.
Penrith centre Samuel Lane's 68th-minute try and the subsequent conversion levelled the scores at 18-all as the full-time siren sounded.
In the first half of extra-time Penrith missed a field-goal attempt from 20 metres out and in front of the goal-posts. Knights fullback Fletcher Sharpe missed from similar range in the second.
Dolphins-bound Panthers haflback Isaiya Katoa nailed the match-winner from 25 metres to give his side an unlikely 19-18 win a few minutes into golden point.
It was a crushing blow for the Knights who had defended for their lives in the second half despite the late tries.
"It's a pretty devastating way to lose," Gleeson said.
"Unfortunately we just couldn't hang one. Penrith were very resilient.
"I couldn't be prouder of the effort from the players, every single one of them walked off the park absolutely gassed. The fact they were able to hold them out for as long as they did with the amount of possession that went against them was an outstanding effort.
"They've been doing that all year, just turning up for each other. We've used 45 players but no matter who has pulled that jersey on, they've played with a similar spirit and character to today."
Newcastle had beaten Penrith three times this year and went into the game after a week off. They trailed 6-0 early after nine minutes but scored three unanswered tries to take an 18-6 lead.
Skipper Thomas Cant crossed for their first and had a hand in their second. The back-rower found space on the halfway line and dummied to beat Penrith's fullback before converting his own try to level the scores at six-all after 20 minutes.
Two-game NRL centre Krystian Mapapalangi went close to scoring on multiple occasions in the first half but couldn't crack the line.
Six minutes after half-time, Cant found space again after latching onto a pass from five-eighth Kurt Donoghoe. He sprinted 20 metres downfield from halfway before passing to his fullback Sharpe who ran in untouched.
Donoghoe crossed from close range in the 58th minute to help Newcastle to a 12-point lead with 12 minutes to play. The Panthers threw everything at the Knights in the second half and were held out on multiple occasions until Mavrik Geyer - the son of Panthers legend Mark - scored to reduce the deficit to six points.
That swung the momentum and Lane, despite finding space out on the right edge, was able to bring the ball around closer to the goal-posts to help Penrith level the scores and send the game into extra-time.
