First Mining Finance Files NI 43-101 Preliminary Economic Assessment for its Springpole Gold Project
VANCOUVER, British Columbia, Oct. 30, 2017 (GLOBE NEWSWIRE) -- First Mining Finance Corp. (“First Mining” or the “Company”) (TSX:FF) (OTCQX:FFMGF) (FRANKFURT:FMG) 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, can be found under First Mining’s SEDAR profile at www.sedar.com, and on First Mining’s website at www.firstminingfinance.com.
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.
- 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.
Readers are cautioned that the PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Actual results may vary, perhaps materially. The Company is not aware of any environmental, permitting, legal, title, taxation, socio-political, marketing or other issue which may materially affect this estimate of mineral resources. The projections, forecasts and estimates presented in the PEA constitute forward-looking statements and readers are urged not to place undue reliance on such forward-looking statements. Additional cautionary and forward-looking statement information is detailed at the end of this news release.
Dr. Chris Osterman, P.Geo., CEO of First Mining, is the “qualified person” for the purposes of NI 43-101, and he has reviewed and approved the scientific and technical disclosure contained in this news release.
ABOUT FIRST MINING FINANCE CORP.
First Mining is a mineral property company that is evolving from a holder of mineral assets to a project developer. The Company currently holds a portfolio of 25 mineral assets in Canada, Mexico and the United States with a focus on gold. The core assets include the Springpole Gold Project, the Goldlund Gold Project, the Cameron Gold Project and the Pickle Crow Gold Project, all located in Ontario, and the Hope Brook Gold Project in Newfoundland.
ON BEHALF OF FIRST MINING FINANCE CORP.
Cautionary Note Regarding Forward-Looking Statements
This news release includes certain "forward-looking information” and "forward-looking statements” (collectively "forward-looking statements”) within the meaning of applicable Canadian and United States securities legislation including the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date of this news release. Forward-looking statements are frequently, but not always, identified by words such as "expects”, "anticipates”, "believes”, “plans”, “projects”, "intends”, "estimates”, “envisages”, "potential”, "possible”, “strategy”, “goals”, “objectives”, or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions.
Forward-looking statements in this news release relate to future events or future performance and reflect current estimates, predictions, expectations or beliefs regarding future events and include, but are not limited to, statements with respect to: (i) the PEA representing a viable development option for the Project; (ii) construction of a mine at the Project and related actions; (iii) estimates of the capital costs of constructing mine facilities and bringing a mine into production, of sustaining capital and the duration of financing payback periods; (iv) the estimated amount of future production, both produced and metal recovered; and (vi) life of mine estimates and estimates of operating costs and total costs, net cash flow, net present value and economic returns from an operating mine constructed at the Project. All forward-looking statements are based on First Mining's or its consultants' current beliefs as well as various assumptions made by them and information currently available to them. The most significant assumptions are set forth above, but generally these assumptions include: (i) the presence of and continuity of metals at the Project at estimated grades; (ii) the geotechnical and metallurgical characteristics of rock conforming to sampled results, including the quantities of water and the quality of the water that must be diverted or treated during mining operations; (iii) the capacities and durability of various machinery and equipment; (iv) the availability of personnel, machinery and equipment at estimated prices and within the estimated delivery times; (v) currency exchange rates; (vi) metals sales prices and exchange rate assumed; (vii) appropriate discount rates applied to the cash flows in the economic analysis; (viii) tax rates and royalty rates applicable to the proposed mining operation; (ix) the availability of acceptable financing under assumed structure and costs; (x) metallurgical performance; (xi) reasonable contingency requirements; (xii) success in realizing proposed operations; (xiii) receipt of permits and other regulatory approvals on acceptable terms; and (xiv) the fulfillment of environmental assessment commitments and arrangements with local communities. Although the Company’s management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Many forward-looking statements are made assuming the correctness of other forward looking statements, such as statements of net present value and internal rates of return, which are based on most of the other forward-looking statements and assumptions herein. The cost information is also prepared using current values, but the time for incurring the costs will be in the future and it is assumed costs will remain stable over the relevant period.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking statements will not be achieved or that assumptions do not reflect future experience. We caution readers not to place undue reliance on these forward-looking statements as a number of important factors could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates assumptions and intentions expressed in such forward-looking statements. These risk factors may be generally stated as the risk that the assumptions and estimates expressed above do not occur as forecast, but specifically include, without limitation: (i) variations in rates of recovery and extraction; (ii) the geotechnical characteristics of the rock mined or through which infrastructure is built differing from that predicted, the quantity of water that will need to be diverted or treated during mining operations being different from what is expected to be encountered during mining operations or post closure, or the rate of flow of the water being different; (iii) developments in world metals markets; (iv) risks relating to fluctuations in the Canadian dollar relative to the US dollar; (v) increases in the estimated capital and operating costs or unanticipated costs; (vi) difficulties attracting the necessary work force; (vii) availability of necessary financing and any increases in financing costs or adverse changes to the terms of available financing, if any; (viii) tax rates or royalties being greater than assumed; (ix) changes in development or mining plans due to changes in logistical, technical or other factors; (x) changes in project parameters as plans continue to be refined; (xi) risks relating to receipt of permits and regulatory approvals; (xii) delays in stakeholder negotiations (including negotiations with affected First Nation groups); (xiii) changes in regulations applying to the development, operation, and closure of mining operations from what currently exists; (xiv) the effects of competition in the markets in which First Mining operates; (xv) operational and infrastructure risks; (xvi) management’s discretion to alter the Company’s short and long term business plans; and (xvii) the additional risks described in First Mining's Annual Information Form for the year ended December 31, 2016 filed with the Canadian securities regulatory authorities under the Company’s SEDAR profile at www.sedar.com, and in First Mining’s Annual Report on Form 40-F filed with the SEC on EDGAR.
First Mining cautions that the foregoing list of factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions with respect to First Mining, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. First Mining does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by the Company or on our behalf, except as required by law.
Cautionary Note to United States Investors
This news release has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of U.S. securities laws. Unless otherwise indicated, all resource and reserve estimates included in this press release have been prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101”) and the Canadian Institute of Mining, Metallurgy, and Petroleum 2014 Definition Standards on Mineral Resources and Mineral Reserves. NI 43-101 is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Canadian standards, including NI 43-101, differ significantly from the requirements of the United States Securities and Exchange Commission ("SEC”), and mineral resource and reserve information contained herein may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, the term "resource” does not equate to the term "reserves”. Under U.S. standards, mineralization may not be classified as a "reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. The SEC's disclosure standards normally do not permit the inclusion of information concerning "measured mineral resources”, "indicated mineral resources” or "inferred mineral resources” or other descriptions of the amount of mineralization in mineral deposits that do not constitute "reserves” by U.S. standards in documents filed with the SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. U.S. investors should also understand that "inferred mineral resources” have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an "inferred mineral resource” will ever be upgraded to a higher category. Under Canadian rules, estimated "inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies except in rare cases. Investors are cautioned not to assume that all or any part of an "inferred mineral resource” exists or is economically or legally mineable. Disclosure of "contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute "reserves” by SEC standards as in-place tonnage and grade without reference to unit measures. The requirements of NI 43-101 for identification of "reserves” are also not the same as those of the SEC, and reserves reported by the Company in compliance with NI 43-101 may not qualify as "reserves” under SEC standards. Accordingly, information concerning mineral deposits set forth herein may not be comparable with information made public by companies that report in accordance with U.S. standards.