Oct 31 2017
First Mining Finance Corp. is pleased to announce that, further to the Company’s news release dated September 21, 2017, the Company has filed on SEDAR an independent Preliminary Economic Assessment (“PEA”) technical report for its Springpole Gold Project (the “Project”) in northwestern Ontario, Canada that was prepared by SRK Consulting (Canada) Inc. in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”). The report, which is titled “Preliminary Economic Assessment Update for the Springpole Gold Project, Ontario, Canada” and is dated October 16, 2017.
The PEA describes the potential technical and economic viability of establishing a conventional open-pit gold mine-and-mill complex for the Project. The base case scenario utilizes long-term metal prices of $1,300 per ounce (“oz”) of gold (“Au”) and $20 per oz of silver (“Ag”).
The PEA was prepared on a 100% ownership basis and all amounts in this news release are stated in U.S. dollars (“USD”) unless otherwise noted.
PEA Highlights:
- Initial capital expenditure of $586 million and sustaining capital expenditures of $117 million for total estimated capital expenditures of $703 million over the projected 12-year mine life (LOM). In addition, closure and reclamation costs are estimated at $20 million.
- Pre-tax Net Present Value (“NPV”) at a 5% discount rate of $1.159 billion calculated at the beginning of the two-year construction period and a pre-tax Internal Rate of Return (“IRR”) of 32.3% for the base case.
- After-tax NPV at a 5% discount rate of $792 million and after-tax IRR of 26.2% for the base case.
- Estimated payback of initial capital in 3.5 years from the commencement of commercial production.
- Estimated 12-year LOM operation supporting a 36,000 tonne-per-day (“tpd”) process plant that includes crushing, grinding, carbon-in-pulp leaching as well as gold recovery via activated carbon to produce doré bullion.
- LOM strip ratio of 2.1 to 1.
- Average annual payable production projected to be 296,500 oz Au and 1,632,000 oz Ag for LOM with average production for the nine years at full capacity of 357,100 oz Au and 2,038,800 oz Ag per annum.
- Estimated cash costs of $619/oz gold equivalent (“AuEq”) (cash costs include on-site mining, processing and G&A costs, treatment and refining charges and royalties).
- “All-in” cash costs (in addition to cash costs including initial/sustaining capital and mine closure) estimated at $806/oz of AuEq.
- Recommends moving forward with a pre-feasibility study.
Keith Neumeyer, First Mining’s Chairman, said, “This updated PEA study for our Springpole project represents a significant improvement in both economics and annual and total ounces of gold and silver produced when compared with the previous PEA completed for Gold Canyon in 2013. The PEA demonstrates that Springpole has excellent margins with low cash costs of US$619 per ounce of gold equivalent and an average annual payable production of 322,000 ounces of gold equivalent, over the life of mine. On that basis, once in production as contemplated by the PEA, Springpole would be one of the largest gold mines in North America. We believe advancing Springpole is the best way to add considerable value for our shareholders, and we are excited to move to the next priority items for the project, which are permitting and completing a pre-feasibility study.”
For further detail regarding the updated PEA for Springpole, First Mining encourages readers to review the full text of the NI 43-101 PEA technical report, which is available on SEDAR and on the Company’s website, and refers readers to the Company’s news release dated September 21, 2017, which contains a comprehensive summary of the PEA results.