First Mining Gold Corp (TSE:FF) (OTCQX:FFMGF) (FRA:FMG) has reported a positive pre-feasibility study (PFS) for its Springpole gold project in Ontario, marking a major milestone in the development of the asset, which is one of the largest undeveloped open pit projects in Canada.
The study envisages recovering gold and silver from a 30,000 tonne-per-day (tpd) operation, with a process plant, which includes crushing, grinding and flotation.
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Initial capital costs were put at US$718 million, while the pre-tax net present value (NPV), using a gold price of US$1,600 per ounce, was pegged at US$1.5 billion. With gold at US$1,800 per ounce, that figure lifts to US$1.9 billion.
The pre-tax internal rate of return (IRR) was put at 36.4% with a life of mine of 11.3 years.
The first nine years would see primary mining and processing to produce 335,000 ounces a year of the yellow metal, while the remainder of the mine life would see lower-grade stockpiles exploited.
Significantly, the PFS includes a declaration, for the first time, of mineral reserves for Springpole. Proven and probable reserves were put at 3.8 million ounces (Moz) of gold and 20.5 Moz of silver.
"The results of the PFS confirm that Springpole has the potential to become a strategically significant, highly profitable gold mine in one of the most attractive mining jurisdictions in North America," said Dan Wilton, CEO of First Mining.
"We look forward to the project's continual improvement through collaboration with our local and Indigenous communities of interest as we advance Springpole through the federal and provincial Environmental Assessment processes," he added.
"The team's recent and significant experience successfully permitting the Hardrock project in Ontario and other similar open pit mining projects in Canada requiring in-lake cofferdams and associated dewatering will serve us well as we continue to advance Springpole."
The after-tax payback period for the Springpole project was put at 2.4 years in the report, while the all-in sustaining costs (AISC) for the first nine years was stated as US$577 per ounce. AISC for the rest of the life of mine were put at US$645 per ounce.
Mining would occur as a series of phases within the ultimate pit with a maximum depth of around 350 metres, reported the company.
Also noteworthy is the fact the deposit sits underneath a small portion of Springpole Lake. Two dewatering dikes (coffer dams), with a total length of around 940 metres, will need to be constructed to allow this area (around 6% of the entire surface area of the lake) to be dewatered, said the company.
Shares in Toronto added 6.4% to stand at C$0.42 each.
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