First Mining Gold (TSX-V: FF) - PFS on Track for H2 2023

First Mining is a Canadian gold developer focused on the development of the Springpole Gold Project in northwestern Ontario and the Duparquet Gold Project in Quebec, two of the largest gold projects in Canada. It is listed on the Toronto Stock Exchange (TSX-V: FF), the OTC markets (OTCQX: FFMGF), and the Frankfurt Stock Exchange (FSE: FMG). The company was founded in 2015 by Mr. Keith Neumeyer, Founding President and CEO of First Majestic Silver Corp. The company is headquartered in Vancouver, Canada.

Merlin-Marr Johnson caught up with Dan Wilton, CEO and Director, First Mining Gold. Mr. Wilton has more than 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 previously a Partner at Pacific Road Capital Management, a mining-focused private equity investment firm with approximately $800M under management. Prior to joining Pacific Road, Dan’s 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. Dan is a Director of Providence Living, a residential care and assisted living provider based in Vancouver, BC. He also serves on the Audit & Finance, and Quality Committees. Dan served on the Board of Providence Heath Care for 11 years, including acting as Vice Chair for 6 years and Chair of the Audit and Financing Committee during the financing and approval process for the New St. Paul’s development. Dan holds a B.Comm (First Class Honors) from Queen’s University and an MBA (with Distinction) from INSEAD in France.

Company Overview

First Mining has commenced a Feasibility Study at the Springpole Gold Project where permitted activities are ongoing with a draft EIS (Environmental Impact Statement) for the project published in June 2022, which is available on the Environmental Assessment portal. The company also acquired a 100% interest in the Duparquet Gold Project in September 2022 and is developing plans to advance the project along with its nearby Duquesne and Pitt Projects in Quebec. The company is the largest shareholder of Treasury Metals which 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, the company owns a growing strategic royalty portfolio along with the Cameron Gold Project in Ontario.

First Mining Gold is a project developer that is currently advancing the Springpole project in Ontario and the Duparquet project in Quebec. The company’s representatives recently attended the BMO conference in Miami, Florida. The overall mood at the conference was highly positive. Interestingly, this is the first time that a number of battery metals and critical minerals people have outnumbered the gold people at the conference. Historically, the mix is always around 80% gold focused. This time around, the conference is largely focused on base metals and critical minerals. There were also a number of generalist investors present at the conference that are trying to figure out how to play the battery metals and critical minerals opportunity. This serves as an opportunity for the company to make introductions and share its story.

Within the battery metals space, there is an increased focus on the lithium, cobalt, rare earths, and graphite side. A lot of people belonging to the supply chain are looking to secure supplies for the battery gigafactories that will be needed for electric cars. From here on, an increase in demand is expected for nickel, copper, and the electrification base metals. 3 months back, Gold prices were trending at $1,650, and about 3 weeks back, the prices jumped to $1,950. Currently, the gold market pricing is at $1,850.

At the conference, 75% of the company’s discussions were with corporates, while the other 25% were focused on traditional investors. There’s a lot of interest from people that are focusing on the next stage of their pipelines. The conference serves as a great opportunity for the company to position itself in strategic markets. Here, the company has an opportunity to meet with people that follow its projects a couple of times a year. This is achieved through the BMO conference or PDAC (Prospective Developers Association of Canada) followed by Beavercreek or Denver Gold show in the fall.

In recent times, there have been several major deals in the gold sector. This includes the deal between Yamana Gold, Pan American, and Agnico Eagle, and the Newmont-Newcrest deal. According to First Mining Gold, once the deals are successfully executed, it will be interesting to focus on what becomes of the non-core assets in these companies. The company anticipates that there will be a meaningful reshaping of some of the asset portfolios in the industry.

Currently, there are a number of mid-tier assets that are approaching the end of their mine life. Some of these assets only have 6-8 years of mine life left. At this point, companies are starting to take an alternative approach, focusing on different parts of the world. It is expected that this development will lead to interesting changes to the mid-tier landscape and provide potential consolidation opportunities. This change is considered a positive development for the industry.

First Mining Gold is looking to develop a large-cap company development pipeline by way of its Springpole and Duparquet projects. There are expectations that a lot of companies would like to have a line of sight on 600,000oz of production capacity in Canada before 2030. The company is optimistic that it can provide a chunk of value, especially since it’s currently trading at sub $10/oz. This, in turn, would lead to the creation of additional companies that have a growth imperative.

The company has been developing the projects for the past 4 years, advancing them for the time when the industry needs them the most. Development projects are expected to be a scarce resource in the near future. In the investor deck, the company is looking at the largest undeveloped projects in Canada. Currently, it has 2 of the top 15 projects in Canada. Once the projects reach the construction phase in the next 3 years, First Mining Gold will likely have 2 of the top 8 projects in Canada.

Targets 2023 and Beyond

The Feasibility Study work will form the basis of the technical updates. Currently, the company has completed about 75% of the Feasibility Study. It is cognizant that there’s still a lot of work to be done to bring the study together. The constituent component pieces have now started to come together. The company is looking to publish an updated technical study before the end of 2023, which is currently running as per the schedule.

Going through the environmental assessment process, there has been some scope changes in the project. The company has incorporated a lot of the views from the permitting and environmental consulting advisors into the project design. The advisors are credited with getting the majority of big gold mining projects in Ontario over the last 20 years. The company is looking to provide a snapshot of the project as it gears up for the final EIA (Environmental Impact Assessment) approval.

First Mining Gold is putting together the EIA document. It is looking to submit the document by mid-2024. The EIA approval process is expected to take around 12 months. By the time the approval is granted, the company would have a completed Feasibility Study by the end of 2024. Ideally, the company is looking to publish the study by the end of the year.

The company has carried out a lot of trade-off work. The upcoming Feasibility Study isn’t necessarily expected to incorporate the trade-off work, however, it will provide a snapshot of the final project. The company needs to carry out additional field data collection and drilling, particularly around geotechnical work. This is the main reason why the project won’t have a final Feasibility Study at this time.

Due to this year’s budget constraints, the company pushed the geotechnical work off so that it can work on separately funding and executing it either by late- 2023 or early next year. The company would need to carry out the last piece of data collection to finalize the project's design and scope. This would be incorporated into a final Feasibility Study, that would also provide the estimates for the project OpEx (Operational Expenditures) and CapEx (Capital Expenditures).

ESG Considerations

First Mining Gold has signed engagement agreements with 2 indigenous communities. The communities have reviewed the EIA draft and have already provided a fair amount of feedback. The company can incorporate the comments into the final document for three of the Shared Territory Protocol Nations around the Springpole asset. These communities hold a lot of importance for the company.

The company has agreed to support an indigenous assessment. It is currently in the process of scoping out the assessment. The process is led by the communities, where they can study and determine the critical factors that are important to them. The company seeks to ensure that it understands all the issues surrounding traditional land use and knowledge so that it can be incorporated into the final EIA. The company is trying to determine the exact timelines for the study and the work. Currently, the company is making good progress on this front.

The communities have retained advisors. The company is hopeful that it can keep progressing with the work as it is crucial to the scoping of the project. It is looking forward to the feedback and input from the communities.

The engagement with the indigenous communities provides them the capacity and support to have external advisors review the EIA draft. Based on the feedback, the company will incorporate the required changes that are identified as critical in the assessment. It is important to note that this is one of the first indigenous-led assessments in Canada. The company anticipates that over time, this will become the norm.

The company is excited to participate in the assessment process as it sets a new standard for the industry. The feedback will help the company understand the key changes that are important to the community. The company is looking to ensure that the voices of the indigenous community are heard. It considers the indigenous assessment as an important part of the process.

Cash Position

Recently, the company sold its portfolio of 19 royalties for $6.7M. First Mining Gold has about $15M in current cash flow and $10M in marketable securities along with upcoming cash and share payments. The company has an account for another $18M along with project interests at Hope Brook and Pickle Crow. Auteco Minerals, the company’s partner at the Pickle Crow asset recently raised $9M in capital and is looking forward to a drill program. Here, the company is in a carried interest position through to a construction decision.

Big Ridge Gold, the partner at the Hope Brooke project is about to publish a resource update. The 25,000m drilling program has had good exploration success. It is currently $12M into a $20M earn-in spend. The company has partners on these projects and in Treasury Metals. Notably, Treasury Metals recently published a new PFS (Pre-Feasibility Study), that shows that the company is able to maintain an NPV (Net Present Value) that is greater than the CapEx. It has continued to demonstrate project advancements. Over the last 3 years, First Mining Gold’s partners have spent between $60M-$80M on these projects. The company believes in the potential of these projects and it currently has residual share positions or project interests in these assets.

Once the gold market improves, these companies will start gaining traction along with better recognition. First Mining Gold anticipates that there is a lot of upside in these positions which can potentially be turned into cash down the line. This will provide the company with the flexibility to continue advancing both the Springpole and Duparquet assets.

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