First Mining Gold () () () claims that its flagship Springpole project can really change the landscape of Northwestern Ontario, becoming the center of gravity by attracting all exploration and related ounces to the district.

With two active partnerships and five wholly owned properties, First Mining Gold is firmly established in Eastern Canada, operating in three of the country’s most promising gold jurisdictions: Ontario, Quebec and Newfoundland.

Although the company has a diverse portfolio, it remains focused on advancing the Springpole project through development and production. Earlier this year, a pre-feasibility study was completed on the Ontario project, First Mining is now conducting an environmental assessment, a key element in moving the project forward.

According to Dan Wilton, CEO of First Mining, Springpole is shaping up to be a key strategic property in the global gold industry due to its large-scale gold resources of over four million ounces and estimated annual production of over four million ounces. of 300,000 ounces.

Proactive recently spoke with Wilton to see how the year looks for the gold developer and what the next step is for their program.

PROACTIVE: 2021 has been a busy year for the company, what are the main milestones so far?

Dan Wilton (DW): Really, the biggest milestone was the release of our Pre-Feasibility Study (PFS) on Springpole, which had been in the works for just over a year. We announced at the end of January and tabled the report in early March, which we are very excited about. I think this identifies Springpole as a really key strategic project in the gold industry. The PFS shows a very, very robust project at a gold price of $ 1,600, with a NPV (net present value) of just under US $ 1 billion and a payback period of just under US $ 1 billion. two and a half years after tax. based.

It is important to note that this is one of the very few projects capable of producing more than 300,000 ounces per year. On a large scale, it is large enough to be significant for the world’s largest gold producers. A project with All-Inclusive Sustaining Costs (AISC) in the lower quartile of the cost curve and initial capital costs of US $ 718 million.

We are very excited about the results of PFS and are currently moving on to a new round of optimizations and trade-off studies before launching the feasibility study early next year.

Another really important step was to bring in Steve Lines, and subsequently Steve’s whole team. Before Steve joined us in December as Vice President of Environmental and Community Relations, he and his team spent six and a half years pushing the Hard Rock Project in Ontario through the process of environmental assessment, from scoping to building permits. We are really delighted to have a team of this caliber.

First Mining has projects in Ontario, Quebec and Newfoundland, why were these jurisdictions important to the company?

DW: Most of our projects were acquired in 2015, 2016, during a real downturn in the gold sector, especially for developers. One of the key criteria that Keith Neumeyer, our founder and president, had in identifying potential resources for the acquisition was jurisdiction. And what are the established and well understood jurisdictions for the development of mining projects?

I would say, certainly Ontario and Quebec; Newfoundland, a little less simply because it has not had the volume of projects authorized in recent years.

But Ontario and Quebec, on the other hand, are two of the most prolific licensing jurisdictions in the world. You can compare the background of the licensing authorities in these locations to anywhere in the world.

Most of our portfolio and certainly the projects that we are very actively pursuing are in Ontario. I think this shows the importance of competence in some of the work that we have done over the last year and a half to attract partners in a number of our projects. I think that the quality of the partners that we have succeeded in attracting is partly due to the quality of the jurisdictions where our projects are located. These projects are in large jurisdictions, and I think they should be worth a premium. So we have a long way to go to close the valuation gap there.

But we have plans in some of the best places to develop mines in the world.

In addition to exploration, your company has partnerships and royalty streams, how does this set you apart from other gold explorers?

DW: We would characterize ourselves a lot as a developer, in terms of the core business skills and the way we move projects forward. Now the challenge for developers has been that this was probably the hardest sector to attract capital to the gold sector in recent years. But I think we are making very good progress.

What sets us apart is the quality of the asset base and the fact that all of our projects are in level one jurisdictions. I think the fact that we’re really fully funded to get our Springpole project through the EA process; we have over $ 50 million in cash and marketable securities, and an additional $ 100 million of more value in these strategic partnerships, which I think gives us enormous financial flexibility going forward.

And we still have other projects, our project, for example, in northwestern Ontario, as well as a few projects in Quebec that we own 100% and that will give us a very, very good option.

Most importantly, we have this key strategic project in Springpole. A project equivalent to 5 million ounces of gold, exceeding 4 million ounces of resources, there are 3.8 million ounces of reserves that go into a mining plan … And above all, it is on the edge of a truly under-explored greenstone belt.

We believe that the exploration [of the Greenstone Belt] That’s what’s going to show how you make this project even better, how you make it even bigger, how you get that average annual production, from 330,000 ounces per year to over 400,000, potentially over 500,000. It’s just a matter of finding a little more higher grade gold in the area.

We’re just going to have such a center of gravity with Springpole that we can really change the strategic landscape in this region of northwestern Ontario.

Springpole is described as one of the largest undeveloped open pit gold deposits in Canada. There is also money there, how is that going to influence how you develop it?

DW: It doesn’t really change the game plan, except for the fact that I think it just gives us more funding flexibility. As you know, we already demonstrated this last year, when we signed a silver streaming deal with First Majestic Silver (), which has the right to acquire 50% of the silver production of Springpole with continuous payment in this type of typical cash flow. type structure. This gave us US $ 22.5 million in milestone financing, of which we already have US $ 17.5 million in the bank. It really was a game-changer for us in terms of [giving First Mining] that long-term strategic funding, and the money was a really big part of getting us there.

The target price range right now for the project is $ 1600 gold, and we are at $ 1700 and changing, how is this rise and the historically high gold price benefiting the project?

DW: I think it cuts in two ways. First, the project is very robust at $ 1,600 gold. I think the upward leverage is very strong. We have sensitivities in our reports going up to $ 1,800 or $ 2,000 an ounce and you know, every $ 100 in the price of gold adds well over $ 100 million of value to the NPV, so it starts to increase very, very quickly. But as important as that is, our project also shows an IRR (internal rate of return) above 15% at a gold price of $ 1,300. So it’s robust on the downside, which tells me it’s something that is going to be able to recover its capital throughout a cycle.

The price of gold, unfortunately, does not always increase. But I think when you look at the macro picture of the current situation in the industry cycle and the situation in the financial markets, I think it’s a very, very robust time for gold.

You mentioned the environmental assessment, what else is on your agenda for the rest of 2021?

DW: Yeah, it’s a busy schedule. The real number one goal for us is to complete the environmental assessment (EA) document and ultimately submit that draft EA document to the ministry in late 2021 or early 2022. The timeline will be dictated somewhat by our ability to move forward through consultations with our aboriginal communities. If there was a real impact of COVID, it’s that normally when we do consultations in the communities, you go to the communities and have meetings and talk about the project, and those communities have been largely closed. for one year. And leadership in the community is rightly focused on the health of the population.

But we’re coming out of it now, we’ve got a really good dynamic with a number of our communities and people are getting organized and starting to work on the data, but it’s important that, we get closer to that EA, at the end of the day. , as partners with our communities, and that’s where that will be a very important way forward.

We submitted our terms of reference for the EA last year, and these are now under final review in discussions, we are optimistic that in July we should be able to get our mandate, which is the scope of this EA, approved, and then keep moving forward with the compilation.

So once that is submitted it starts more formal timelines in the process. This will start an additional government review, a review with our communities, a review with rights holders and stakeholders in the region, and we hope, hopefully, move this process forward quickly.

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