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First Mining Gold unlocking value with strategic transactions, while advancing one of the largest open-pit deposits in Canada

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  • Springpole project hosts 4.67 million indicated ounces of gold
  • Focused on a portfolio of assets in quality jurisdictions
  • Experienced team

What First Mining Gold does: 

First Mining Gold Corp (TSE:FF) (OTCQX:FFMGF) was created by chairman Keith Neumeyer, who founded mining majors First Majestic Silver Corp and co-founded copper-focused First Quantum Minerals Ltd. First Mining Gold went public in April, 2015.

Its 13 projects cover approximately 190,000 hectares and range from Preliminary Economic Assessment (PEA) stage to as early as grassroots exploration stage.

The company’s main focus currently is the development and permitting of its Springpole gold project, a 41,943-hectare project near the prolific Red Lake area in Ontario, which is among the largest undeveloped open-pit gold deposits in Canada.

First Mining’s other ‘Tier One’ assets are the Cameron gold project and Pickle Crow gold asset, both in Ontario, Canada, and the Hope Brook gold project in Newfoundland which comprises seven claims that cover 26,650 hectares.

Pickle Crow, where the group is partnered with Auteco Minerals, is one of Canada’s highest-grade historical gold mines. It operated from 1935 until 1966, reportedly producing almost 1.5 million ounces of gold at an average grade of 16.1 grams per ton (g/t). Under the terms of a March 2020 deal, Auteco can earn a full 80% interest in Pickle Crow by spending a total of C$10 million on exploration over five years, making cash payments to First Mining totaling C$4.1 million, and issuing 125 million shares.

In August 2020, First Mining closed a deal with gold junior Treasury Metals Inc. to merge the Goldlund – a First Mining Gold project - and Goliath properties in Ontario. First Mining became the largest shareholder in Treasury Metals, which will operate the project going forward.

How is it doing:

First Mining Gold published a positive pre-feasibility study (PFS) for its Springpole gold project in Ontario on January 20, 2021, marking a major milestone in the development of the asset, which is one of the largest undeveloped open pit projects in Canada. 

The study envisages recovering gold and silver from a 30,000 tonne-per-day (tpd) operation, with a process plant, which includes crushing, grinding and flotation.  Initial capital costs were put at US$718 million, while the pre-tax net present value (NPV), using a gold price of US$1,600 per ounce, was pegged at US$1.5 billion. With gold at US$1,800 per ounce, that figure lifts to US$1.9 billion. The pre-tax internal rate of return (IRR) was put at 36.4% with a life of mine of 11.3 years.

The after-tax payback period for the Springpole project was put at 2.4 years in the report, while the all-in sustaining costs (AISC) for the first nine years was stated as US$577 per ounce. AISC for the rest of the life of mine were put at US$645 per ounce.

Significantly, the PFS included a declaration, for the first time, of mineral reserves for Springpole. Proven and probable reserves were put at 3.8 million ounces (Moz) of gold and 20.5 Moz of silver.

The first nine years would see primary mining and processing to produce 335,000 ounces a year of the yellow metal, while the remainder of the mine life would see lower-grade stockpiles exploited. Mining would occur as a series of phases within the ultimate pit with a maximum depth of around 350 metres, reported the company.

Also noteworthy, the group said, is the fact the deposit sits underneath a small portion of Springpole Lake. Two dewatering dikes (coffer dams), with a total length of around 940 metres, will need to be constructed to allow this area (around 6% of the entire surface area of the lake) to be dewatered, said the company.

Material news also came in December last year, when the company said it had added more resource ounces and consolidated its ground at the 49,600 hectare Cameron gold project in northwest Ontario, by purchasing the East Cedartree claims from Metalore Resources.

The East Cedartree claims added another 3,200 hectares and 212 claims of prospective mineral tenure in the middle of the project and, in addition, the claims host an indicated resource of 93,000 ounces of gold at 1.4 g/t gold and inferred at 95,300 ounces of gold, also at 1.4 g/t. These will add to the measured and indicated (M&I) resource of 274,000 ounces at 2.5 grams per ton (g/t) gold, back in 2016.

First Mining was paying C$3 million in cash and issuing 3 million of its shares to Metalore and the deal is expected to close on December 9 this year.

The company said it was currently undertaking prioritization and review of the numerous exploration targets at Cameron while it advances discussions with local Indigenous communities, and hopes to commence a drill program in 2021.

And in the boardroom, last November, First Mining announced a couple of new executive appointments with the addition of Leanne Hall to its board of directors and Richard Huang as vice president, corporate development. 

Hall is CEO of Creative Fire and she led Deloitte’s Indigenous practice, which served over 275 communities across Canada. She was also a director for the Canadian Council for Aboriginal Business and is a current member of the board of governors at Wilfrid Laurier University in Kitchener, Ontario. She is also a WXN Top 100 Most Powerful Women in Canada award winner.

Huang has more than 10 years of experience in corporate finance, M&A and capital markets in the mining and resource sector. Previously, Huang held roles at the investment banking group of National Bank covering the mining sector and worked at the equity capital markets group at Scotiabank.

Inflection points:

  • Start of drilling at Cameron project
  • Goliath-Goldlund development
  • More Pickle Crow drilling news

What the boss says:

Unveiling the positive pre-feasibility study for Springpole in January, Dan Wilton, CEO of First Mining said: “We look forward to the project’s continual improvement through collaboration with our local and Indigenous communities of interest as we advance Springpole through the federal and provincial Environmental Assessment processes.”

He added: “The team’s recent and significant experience successfully permitting the Hardrock project in Ontario and other similar open-pit mining projects in Canada requiring in-lake cofferdams and associated dewatering will serve us well as we continue to advance Springpole.”

Contact the author at [email protected]

Story by ProactiveInvestors


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