First Mining Gold (TSX:FF) - Gold Developer Eyes $200/oz in the Ground Upside

Aug 22, 2024

Ask episode

Chapters

Transcript

Episode notes

Interview with Dan Wilton, CEO of First Mining Gold Corp.

Our previous interview: https://www.cruxinvestor.com/posts/first-mining-gold-tsxff-de-risking-multi-million-ounce-tier-one-canadian-gold-assets-5126

Recording date: 20th August 2024

First Mining Gold (TSX:FF) is strategically positioned to capitalize on the current strength in the gold market, with two large-scale development projects in tier-one jurisdictions. CEO Dan Wilton recently discussed the company's prospects, highlighting the advancing Spring Pole project in Ontario and the broader gold market dynamics.

The flagship Springpole project is nearing a crucial milestone, with the final Environmental Assessment (EA) submission targeted for October 2024. Wilton emphasized the project's robust economics, particularly in the current gold price environment: "At $2,500 this is a shoot the lights out economic project with all-in sustaining costs that are benchmarked in the lowest quartile of the industry in a tier-one jurisdiction that is capable of producing 300,000 ounces plus a year."

Recent M&A activity in the gold sector, such as Goldfields' C$2.1 billion acquisition of Osisko Mining, provides a valuable benchmark for First Mining's assets. Wilton noted, "5 million ounce plus gold projects in Canada are the most strategic and sought-after gold projects in the world, and when they get acquired they get acquired at significant values and we've got two of those in our portfolio."

The gold market's strength, driven initially by central bank buying and more recently by renewed interest from North American investors, enhances the appeal of development-stage projects. Wilton pointed out a potential opportunity: "You've got it broadly a basket of gold developers that's still sitting down down on the year you know down certainly over a two-year time frame that we kind of charted in our investor deck down 50%." This disconnect between gold prices and developer valuations could present an attractive entry point for investors.

First Mining is open to strategic partnerships, particularly for the Spring Pole project. Such a partnership could provide technical expertise, development capital, and potentially trigger a market re-rating of the project's value. The company is approaching several key catalysts that could drive value:
Submission of the final EA for Spring Pole (October 2024)
Progress towards EA approval (targeted for end of 2025)
Potential strategic partnership announcements
Advancement of the Duparquet project

Wilton argues that First Mining's current market valuation significantly discounts its assets' potential value: "I would assert that it's not worth $6 an ounce anymore as it's trading out in the market today I would assert that it's worth something a lot more like the $200 an ounce that Goldfields just paid for Windfall."

The broader gold mining industry faces challenges with depleting reserves and a lack of new discoveries, potentially driving M&A interest in companies with large, development-stage assets. As Wilton stated, "This development sector is going to be a core core focus I think for the industry and it's a great opportunity for investors to get in ahead of that realization right now."

In conclusion, First Mining Gold offers investors exposure to large-scale gold development projects in a favorable price environment. With key milestones approaching and potential for strategic partnerships, the company could see significant value realization in the near to medium term. However, investors should carefully consider the risks and monitor the company's progress in advancing its projects and securing necessary funding.

View First Mining Gold's company profile: https://www.cruxinvestor.com/companies/first-mining-gold