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First Mining's updated assessment improves value of Springpole gold project

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Essential Metals & Mining Insights - September 2021


First Mining's updated assessment improves value of Springpole gold project

First Mining Gold Corp.'s updated preliminary economic assessment for its Springpole gold-silver project in Ontario outlined a posttax net present value of US$841 million, discounted at 5%, with an internal rate of return of 22% and a 3.4-year payback period from production.

The study, which is based off a gold price of US$1,300 per ounce and a silver price of US$20 per ounce, considers an open-pit mine and milling operation, reflecting updated metallurgical test work that has demonstrated the potential for improved recoveries.

A 2017 preliminary economic assessment for the project outlined an after-tax net present value of US$792 million, at a 5% discount rate, with payback of 3.5 years and an internal rate of return of 26.2% for the base-case scenario.

The company added Oct. 16 that Springpole is expected to have a 2.5-year pre-production period, with a total of 3.9 million ounces gold and 22 million ounces silver to be recovered over a 12-year mine life.

Average annual gold production over the mine life increased to 356,000 ounces of gold and 2.0 million ounces of silver, from 296,500 ounces of gold and 1.6 million ounces of silver anticipated previously.

Initial capital costs are estimated at US$809 million, with life-of-mine sustaining capital costs of US$124 million, up from initial capex of US$586 million and sustaining capex of US$117 million. Expected closure costs also rose to US$26 million from US$20 million.

Meanwhile, all-in sustaining costs are pegged at US$611/oz of gold equivalent, and direct operating cash costs at US$575/oz of gold equivalent.