First Mining Gold (FF) - 10Moz Gold Portfolio So Far and Counting

First Mining Gold Corp. is a Canadian gold developer focused on the development of the Springpole Gold Project in northwestern Ontario, one of the largest undeveloped gold projects in Canada. The results of a positive PFS (Preliminary Feasibility Study) for the Springpole Gold Project were announced in January 2021, and permitting activities are underway, leading to the submission of an (EIS) Environmental Impact Statement.

The company is the largest shareholder of Treasury Metals, a company that is advancing the Goliath Gold complex in Ontario. First Mining also has active partnerships with operators advancing other Canadian projects including the Pickle Crow Gold Project (Auteco Minerals) and Hope Brook Gold Project (Big Ridge Gold). In addition, First Mining Gold owns a strategic royalty portfolio along with other wholly-owned properties including Cameron, Duparquet, Duquesne, and Pitt.

Matt Gordon caught up with Dan Wilton, CEO, and Director, First Mining Gold. Mr. Wilton has 25 years of experience in M&A (Mergers and Acquisitions), corporate finance, and principal investing in the mining sector, having executed as principal or advised on more than $10Bn of mergers, acquisitions, and divestitures and more than $1Bn of financings.

Dan was most recently a Partner at Pacific Road Capital Management, a mining-focused private equity investment firm with approximately $800M under management. Prior to joining Pacific Road, his previous roles included Managing Director and Head of the Global Mining and Metals Group at National Bank Financial Inc, Managing Director in Business Development at General Electric based in London, England, and other corporate finance and M&A roles at global financial institutions based in Toronto and New York.

He currently serves as Vice Chair of the Board of Directors and is Chair of the Audit and Finance Committee for Providence Health Care in Vancouver, Canada. Dan holds a B.Comm (First Class Honors) degree from Queen’s University and an MBA (with Distinction) from INSEAD in France.

Company Overview

First Mining Gold has built a portfolio of gold projects in eastern Canada, a tier-1 mining jurisdiction. The company’s strategy is to advance these projects to development either on its own or in conjunction with carefully chosen partners. First Mining Gold was established in 2015 by Mr. Keith Neumeyer, Founding President and CEO of First Majestic Silver Corp. The company is headquartered in Vancouver, Canada.

It is listed on the Toronto Stock Exchange (TSX: FF), the OTC Markets (OTCQX: FFMGF), and the Frankfurt Stock Exchange (FSE: FMG). Coastal Gold Corp, Springpole Mining USA Inc, Cameron Gold Operations Ltd, Gold Canyon Resources Inc, Goldrush Resources Ltd, Spring Stone Limited, and Clifton Star Resources Inc are the company’s subsidiaries.

First Mining Gold is a project developer with a portfolio of projects in Canada including the Springpole project in Ontario. The project is currently moving through Feasibility and Economic assessment. The company is making a notable announcement on its Duparquet project in Quebec.

The Duparquet Gold Project

On April 8, 2016, First Mining Gold completed a business combination transaction with Clifton Star Resources Inc. to acquire the Duquesne Gold project and an interest in the Duparquet Gold Project. The company isn’t diluting its focus from the Springpole Project but adding another pillar to its story. The company has owned a portion of the project ever since it acquired Clifton Star in 2016. It understands the project really well.

The company reached a point where it could get an agreement with partners to bring the Duparquet project together. Notably, the project has an excess of 3Moz indicated resources along with an additional 2Moz of inferred resources. The project is situated in the middle of the Abitibi Greenstone Belt and features an excellent infrastructure. The company is excited to move the project forward.

At the Springpole project, the company recently published a draft on the Environmental Assessment document. The draft is currently being reviewed by the regulators, and the company anticipates that it will start receiving comments on the same in the near future. The company’s team currently has the capacity to work on a project that is currently in its initial stages. The Duparquet Gold Project requires some rethinking. The company is also looking to initiate the environmental baseline work in order to conduct some work that has longer lead times. This would enable the company to scope a highly-robust project in Quebec.

The Duparquet project is going to be one of the company’s core projects. The project provides exposure to the shareholders where the company’s partners are currently expending funds and making significant progress. The project was acquired for about $8M cash and $25M value in First Mining shares, making it a highly accretive deal. On a per ounce per share basis, the project is 30% accretive to the ounces underpinning the company’s share value. This results in a 40% increase in the company’s indicated resources and a 50% increase in inferred resources.

In the past 7-8 years, the Duparquet project went largely unnoticed. Clifton Star had put out a PFS in a starkly different market environment. During this time, the Canadian dollar gold price was at $1,200, which currently stands at $2,200. Even back then, Duparquet was a robust project with a 15% IRR (Internal Rate of Return) at a very low price.

The Duparquet project has had a lot of work done. Between 2008 and 2014, the project saw 260,000m of drilling. First Mining Gold acquired the project for far less than the replacement cost of the drilling. As part of the acquisition, the company also got the project’s surface rights, along with the historical metallurgical work and a detailed environmental baseline work that was carried out around 10-12 years ago. The company anticipates that this asset is going to be highly accretive.

The project’s current owners are a diverse group of shareholders. It has a complicated ownership structure between the Beattie Goldmine project and the Donchester project located next door. Notably, Clifton Star had optioned both the projects to move forward, but it was held by a different group of shareholders that had different priorities. One of the shareholder groups did not have the inclination to move the project forward on its own.

Since the 1950s, shareholders have had ownership of the project in one form or another. There have been a couple of attempts to move the project forward. Clifton tried advancing the project but was unable to make some back-ended option payments in 2015. During this time, the equity markets were going through a challenging phase. This served as an opportunity for First Mining Gold. The acquisition of the Duparquet project serves as a long-term relationship with the group of shareholders that have project ownership.

During the first meeting, it was determined that First Mining Gold and the shareholders have a common vision for the project. The parties involved agreed to move the project forward by way of thoughtful development. Part of this vision was to provide liquidity to some of the shareholders, while others would gain exposure to other gold projects in the company’s portfolio, including the Springpole project. Over the past 3.5 years, the company has built trust with the group of shareholders. The parties involved are now working as partners to define a plan and move forward.

The company anticipates that there is a real vote of confidence in the team. A large part of the discussions over the past 2 years has been centred around working together to move the project forward. Within the same time frame as Steve Lines, the permitting and the environmental team joined the company there have been parallels between the Duparquet project and the hard rock project that Steve and the team permitted over the last 6.5-7 years prior to joining First Mining Gold.

Hard rock was a small underground mine featuring arsenopyrite concentrate with a roaster. The project has left an environmental legacy that gave everyone, including the permitting authorities conviction to move it forward as a development project. It was decided that the best way to afford the scale of the required environmental program is to clean up its historical legacy. First Mining Gold’s team was responsible for taking the project through Scoping Study and construction permits. The project is currently under construction. The team’s past experience has been useful in moving the project ahead.

Over the course of the next 12 months, First Mining Gold will be working on environmental baseline work and trade-off studies around development opportunities. This will be followed by a Scoping Study and possible exploration. The advanced stage work is expected to cost anywhere between $5M-$10M. The company anticipates that it won’t need additional drilling in order to go into the PFS.

Due to extensive historical work and available data, the company anticipates that it can advance the project fairly quickly. The company is also looking to continue working on the environmental assessment process for the Springpole project.

Targets 2022 and Beyond

First Mining Gold is currently looking at various financing options. The company is looking at financing from a rationale and a timing perspective in order to get some value from its royalty portfolio. It has a significant number of ounces in Quebec without a royalty.

This aspect provides exceptional financial flexibility moving forward. The company is looking to discuss its strategy with the shareholders and demonstrate a compelling game plan moving ahead. The company anticipates that the project’s accretive nature would garner strong support among shareholders.

There are a lot of similarities between the Duparquet project and the Springpole project. Notably, the Springpole project is one of the highest-grade open pit projects in Canada. The open-pit resource has a 1.5g grade with an associated strip ratio. Inside the 5Moz resource across all categories, the project is a higher-grade, lower strip starter operation. It has already been drilled for indicated resources, ensuring that the capital start-up plan will be potentially lower.

The project is difficult to start on a small scale because the orebody needs to be mined at a certain size. As per the company, the Springpole project is likely to go down a partnership path with larger mining companies simply due to the project’s size and scale. Meanwhile, the Duparquet project could be started at a smaller scale and expanded over time.

The company has received strong support from the mining community around the project area, which has been present since the 1930s. Although, the company would still need to conduct extensive work in order to build its social licence. It is important to note that the conversations with the local community have been highly encouraging so far.

Between 2013 and 2014, extensive test work was carried out on the Duparquet project. The test work demonstrates the possibility of up to 90% recoveries.  By using flotation processes, the recoveries can be increased to 95% with a 5% mass pull. The detailed information on the project’s recoveries and test work data are available on First Mining Gold’s website.

Clifton Star Resources had also carried out a detailed PFS on the project. Extensive variability testing was conducted through different zones with flotation and ultimately pressure oxidation was selected as the main avenue to test the oxidation in order to deal with the refractory issues.

The net recoveries from the project are in excess of 90%. Further treatment allows even higher recoveries. Interestingly, the Duparquet Project adds to the company’s portfolio that is located down the track and adds to the owned pit project. Both the projects are located 10km-15km to the east. These are class Archean, narrow-vein, high-grade underground projects. The Duquesne is a past-producing project with a significant potential for high-grade satellite feed. The company anticipates that the infrastructure would allow a significant value add-on to an integrated process.

First Mining Gold needs to carry out extensive work for the trade-off studies. It is currently looking at the historical data set and past work. From a project development purview, the company is years ahead thanks to the past work.

For the Duparquet project, It is looking to take a different approach than its past background, capacity, and skill set for project scoping. The company’s core philosophy is “There’s always a better way to do things”. One needs to keep looking at different alternatives in order to find the best way, whether it's environmental issues, financing, or project evaluation.

First Mining Gold is looking to enter production at the Duparquet project. It has a team that can scope the project without capital constraints, unlike the Springpole project.

To find out more, go to the First Mining Gold website