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MINING | First Mining Gold
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MINING | First Mining Gold
First Mining Gold’s chairman Keith Neumeyer first began building an asset base for his company in the second half of the 2010s, at a time when the capital markets environment was brutal, particularly for junior resource developers. However, the mining investment industry veteran glimpsed an opportunity to pick up high potential projects in trusted jurisdictions when belief in the mining sector was low, and his team went about compiling a list of 10 projects to pursue. After a rigorous screening process, First Mining bought six of those plus a few more shortly after to total eight acquisitions in a 15-month period. Today, the Toronto, US and Frankfurt-listed company has a diversified portfolio of gold assets across North America with a sharp focus on two assets in Ontario, Canada: The Springpole and Goldlund gold projects.
Next, First Mining brought in new COO
The onset of 2019 brought changes to
Gold and Premier Gold Mines and the Magino
the management team at First Mining,
project by Argonaut Gold. These are all 10-
starting with the appointment of new CEO
30,000 tonnes per day operations which have
Dan Wilton in January. The experienced
been permitted in a two-year timeframe, so I
mining finance executive was joined by Mal
think this is one of the best jurisdictions to be
Karwowska in April, both of whom arrived
operating in.”
from mining-focused private equity firm Pacific Road Capital Management.
Ken Engquist to lead the technical and operational teams as the company looks to drive its two flagship projects forward. Following these managerial changes, Wilton believes that First Mining has the right team set up to execute its vision in Ontario. “I think we are blessed with these projects being where they are,” Wilton tells RGN on a recent business trip to London. “Four of our projects are in the same region of Northwest Ontario, towards the Manitoba border where there is an established resource economy.” Mining, forestry and to a lesser extent power generation are the big drivers of industry in this part of the world, and this means that local permit authorities and regulators have a strong understanding of the mining sector going back several decades. Local regulators are highly cooperative and supportive of mineral development projects according to Wilton, and this is evidenced by Ontario’s recent track record of approving permits for three large-scale open pit gold mines in the last three years. “There was the Côté project by IAMGOLD and Sumitomo, the Hard Rock project by Centerra
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MINING | First Mining Gold
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The Springpole Gold Project Located 110 km Northeast of the town of
that we could take recoveries from around the 80% level to the low 90s through flotation and fine grinding.�
Red Lake in Ontario, the Springpole project is one of the largest undeveloped open pit gold
The outcome of improving the recoveries rate
deposits in Canada, capable of producing
by a margin of 10% is a noteworthy drop in
over 400,000 ounces per year at the peak of
the costs per ounce of the project, with direct
its operation.
operating cash costs estimated at $575 per ounce of gold equivalent, and all-in sustaining
First Mining completed an updated
costs (AISC) valued at $611 per ounce of gold
preliminary economic assessment (PEA)
equivalent.
for the project in October this year, which indicated a 12-year mine life with a post-tax
Although initial capital costs went up to $809
net present value of US$841 million and an
million, the overall message that Wilton
internal rate of return of 22%.
took from the PEA is that Springpole is a big enough gold project to be meaningful for any
“The real goal of that study was to update
mining company in the world during the core
the economics and the production profile
part of its mine life.
to incorporate some metallurgical work we had done in 2018-19. The test work indicated
88
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Fracflow Consultants Inc. Environmental, Hydrogeological and Geotechnical Engineering Consultants
St. John’s, NL / Dartmouth, NS Tel: (709) 739-7270 / (902) 468-1317 Email: ffc_nf@nfld.net www.fracflow.com
Packer Test
Fracflow provides a full range of hydrogeological, geotechnical and environmental baseline services to support open pit and underground mine design and water management, especially in fractured bedrock. Collected physical hydrogeological, fracture geometry and aqueous geochemical data are integrated into 3D flow and transport models for prediction of water quality, pit inflows, dewatering design, ecological impacts and pit lake chemistry, on mine closure. 3D Numerical Modeling
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“We’re happy with the PEA, but there still is a
While detractors of the project might argue
lot of work to do. Last week we announced
that approval could be difficult to secure,
that we will be taking the project through to
owing to the deposit’s position under the
the pre-feasibility stage (PFS) and we need
shallow bay of a lake, First Mining has
to consider our plan for initial capital costs,
collated seven years of environmental
and we’ll look into our production profile and
baseline work that suggests otherwise.
tailings waste management. Overall, the PEA gave us a good sense of what we need to do
This wealth of information is currently being
in the PFS.”
incorporated into a terms of reference (ToR) document ahead of submission to the
Alongside the technical advancement of the
Ontario environmental ministry by the end
Springpole project, First Mining is progressing
of the year. The ToR will effectively form
along the permitting timeline, which is a
the table of contents for the subsequent
lengthy process to undertake in Ontario, but
environmental impact assessment (EIS)
one that is ultimately reliable once all the
document.
required documents are submitted to the authorities.
Throughout the next 12 months, First Mining will maintain close consultation with key indigenous groups regarding the content
90
MINING | First Mining Gold of the EIS, ahead of a formal submission of
important vote of confidence from what I
the document by the end of 2020. At around
think is one of the best engineering groups in
the same time, the company hopes to have
the world for a gold project of this size.”
completed the PFS for Springpole.
The Goldlund Project
“Then the project goes through the
First Mining’s secondary focus in Ontario
environmental assessment process which in
is the Goldlund gold project, located
Ontario typically takes between 18 months
approximately 60 km Northeast of the town
and two years. This timeline would keep us
of Dryden. The property has a strike length
on track for a construction decision in 2023
of over 50 km and has shown strong district
and financing around the same time,” Wilton
scale potential.
projects. The current resource estimate stands at Global engineering firm Ausenco will
809,200 ounces of gold at 1.96 g/t in the
complete the Springpole PFS, in an
Indicated resource category and 876,954
interesting deal that will see First Mining pay
ounces of gold at 1.49 g/t in the Inferred
the Australian company in shares for their
resource category, although there is
engineering work.
significant exploration potential and several targets identified across the property.
“It’s an interesting model for alignment with our technical partners, and I think it’s an
“We probably under-sell the fact that the
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MINING | First Mining Gold Goldlund deposit as it sits right now is one of the highest- grade open pit projects in Canada. You’re talking about 800,000 ounces of Indicated resources at 2 g/t and approximately 870,000 ounces of Inferred resources at 1.5 g/t that falls into an open pit and we think there is a lot of room to grow that just in the Goldlund Main Zone.” In addition to the high-grade mineralisation present at Goldlund, the project is blessed with excellent infrastructural links. The property is located next to a provincial highway with existing power lines 20 km away. However, the real value driver at the Goldlund project is its district scale potential. This outlook has been evidenced by a string of exciting results from regional prospects, most notably at the Miller target over the last two years. Miller is located approximately 10 km Northeast and along strike of the current resource area and has been the primary focus of the company’s 2019 drill programme at Goldlund, with visible gold often observed. The prospect is not currently included in the resource estimate. “I think Miller is a real example of one of a number of similar type targets that we can test along the big strike of this property,” says Wilton. “Ultimately, we think Goldlund could become a large gold district feeding one central mill.”
“We probably under-sell the that the Goldlund deposit is of the highest grade open pi projects in Canada right now we think there is a lot of roo grow that just in the Main Z Dan Wilton, CEO and directo First Mining Gold
e fact s one it w and om to Zone� or
Resource Global Network
MINING | First Mining Gold
First Mining has maintained a strong
Having demonstrated the district scale
relationship with its drilling partner from
potential of the project via successful drill
the Springpole project and has retained
programmes at several deposits, First Mining
Winnipeg-based Rodren Drilling’s excellent
is returning to the Goldlund Main Zone for
services for the Goldlund campaigns.
Resource Global Network expansion and infill drilling, which will contribute towards a better understanding of the resource estimate there. “At some point soon, we will need to wrap some economics around this project and take it through a PEA, which shouldn’t be difficult or take long. We have an opportunity here to demonstrate the robust nature of the project, especially with the grade and strip ratio we think we can achieve in an open pit.”
A big year ahead First Mining is on the brink of a massive year in the development of its headline gold assets in Ontario, with the submission of the EIS and PFS for Springpole earmarked for 2020, while Goldlund is also set to receive more substantial economic assessment next year. Hitting these milestones will serve to significantly de-risk the projects and demonstrate to the market that quantifiable progress is being made, which should pave the way for greater recognition of this unique opportunity to invest in world-class gold assets in a trusted jurisdiction.
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Published by Anderson Murray Media Ltd
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