Exhibit 99.1
NEWS RELEASE
First Mining Files Technical Report for the Positive Updated
Preliminary Economic Assessment for the Springpole Gold
Project
Pre-Tax NPV5% of US$1.23
billion, Pre-Tax IRR of 26% and AISC of US$552/oz
Average Annual Gold Production of 410,000 ounces in Years 2 through
9
November 7, 2019 – Vancouver, BC – First Mining Gold
Corp. (“First Mining” or the
“Company”) (TSX: FF) (OTCQX: FFMGF) (FRANKFURT:
FMG) is pleased to announce it has filed on SEDAR an independent
Preliminary Economic Assessment (“PEA”) technical
report (the “Report”) for its Springpole Gold Project
(“Springpole” or the “Project”) located in
northwestern Ontario, Canada. The Report, which is entitled
“Preliminary Economic Assessment Update for the Springpole
Gold Project, Ontario, Canada” and has an effective date of
September 1, 2019, was prepared by SRK Consulting (Canada) Inc. in
accordance with National Instrument 43-101 Standards of Disclosure for Mineral
Projects (“NI 43-101”).
Springpole
is one of the largest undeveloped open pit gold projects in North
America. The updated PEA contemplates an open pit mine and milling
operation and reflects updated metallurgical testwork that has
demonstrated the potential for significantly improved recoveries.
The PEA also reflects updated operating and capital cost
estimates.
PEA Highlights
●
$1.23 billion
pre-tax net present value discounted at 5% (“NPV5%”) ($1.75
billion at $1,500/oz gold)
●
$841 million
after-tax NPV5% ($1.22 billion
at $1,500/oz gold)
●
26% pre-tax
internal rate of return (“IRR”) (33% at $1,500/oz
gold), 22% after-tax IRR (28% at $1,500/oz gold)
●
Mine life of 12
years with a 2.5-year pre-production period
●
Average annual gold
production in years 2 through 9 of 410,000 ounces gold and 2.4
million ounces silver; 3.9 million ounces gold and 22 million
ounces silver recovered over the Life of Mine
(“LOM”)
●
Low LOM strip ratio
of 2.1 to 1 with a LOM mill grade of 1.0 g/t gold and 5.3 g/t
silver
●
LOM overall metal
recoveries of 88% for gold and 93% for silver
●
LOM direct
operating cash costs (1) estimated at
$575/oz of gold equivalent ($514/oz of gold on a by-product
basis)
●
LOM all-in
sustaining costs (AISC) (2) estimated at
$611/oz of gold equivalent ($552/oz of gold on a by-product
basis)
●
Initial capital
costs estimated at $809 million, using an owner-operated mining
scenario
●
LOM sustaining
capital costs estimated at $124 million, plus $26 million for
closure costs
Note: Base case parameters assume a gold price of $1,300/oz and a
silver price of $20/oz (the same prices used in the 2017 PEA), and
an exchange rate (C$ to US$) of 0.75. All currencies are reported
in U.S. dollars unless otherwise specified. NPV is calculated as of
the commencement of construction and excludes all pre-construction
costs.
(1) Cash costs consist of mining costs, processing costs,
mine-level G&A, treatment and refining charges and
royalties.
(2) AISC consists of cash costs plus sustaining and closure
costs.
Dan
Wilton, CEO of First Mining, stated “The updated PEA is an
important advancement for the Springpole Gold project, showcasing
the Project’s potential size and scale. Springpole is one of
a small number of advanced stage development assets in Canada that
has the potential to produce in excess of 400,000 ounces of gold
when in production. We are excited with this positive development,
as we continue to advance and de-risk the
Project.”
-1-
Readers are cautioned that the PEA is preliminary in nature and
includes Inferred mineral resources that are too speculative
geologically to have economic considerations applied to them that
would enable them to be categorized as mineral reserves. There is
no certainty that PEA results will be realized. Mineral resources
are not mineral reserves and do not have demonstrated economic
viability.
Important PEA Parameters
|
Key Assumptions
|
|
|
Base
Case Commodity Prices
|
$1,300/oz
Au, $20/oz Ag
|
|
Exchange
Rate (C$ to US$)
|
0.75
|
|
Production Profile
|
|
|
Total
Tonnes Processed (mt)
|
138.5
|
|
Total
Tonnes Waste (mt)
|
319.0
|
|
Mill
Grade - Gold, Silver
|
1.00
g/t Au, 5.28 g/t Ag
|
|
Mine
Life
|
12
years
|
|
Throughput
(tonnes per day)
|
36,000
tpd
|
|
Strip
Ratio (waste:ore)
|
2.1 :
1
|
|
Overall
Recovery - Gold, Silver
|
88% Au,
93% Ag
|
|
LOM
Metal Recovered - Gold, Silver
|
3.9
mozs Au, 21.9 mozs Ag
|
|
Average
Annual Production - Gold, Silver (Years 1 - 11)
|
356
kozs Au, 2.0 mozs Ag
|
|
Peak
Production in Year 5 - Gold, Silver
|
529
kozs Au, 2.9 mozs Ag
|
|
Average
Annual Production Years 2 to 9 - Gold, Silver
|
410
kozs Au, 2.4 mozs Ag
|
|
Unit Operating Costs
(1)
|
|
|
LOM
Average Cash Cost (2)
|
$575/oz
gold eq., $514/oz gold (by-product)
|
|
LOM
Cash Cost plus Sustaining Cost (AISC) (3)
|
$611/oz
gold eq., $552/oz gold (by-product)
|
|
Project Economics - $1,300/oz Gold Price
|
|
|
NPV5%
- Pre-Tax, After-Tax
|
$1.23
billion, $841 million
|
|
IRR -
Pre-Tax, After-Tax
|
26%,
22%
|
|
Payback
Period from Production Date
|
3.4
years
|
|
LOM
Cash Flow - Pre-Tax, After-Tax
|
$2.10
billion, $1.49 billion
|
-2-
|
Project Economics - $1,500/oz Gold Price
|
|
|
NPV5%
- Pre-Tax, After-Tax
|
$1.75
billion, $1.22 billion
|
|
IRR -
Pre-Tax, After-Tax
|
33%,
28%
|
|
Payback
Period from Production Date
|
2.9
years
|
|
LOM
Cash Flow - Pre-Tax, After-Tax
|
$2.88
billion, $2.05
billion
|
(1) All unit operating costs are shown on both equivalent as well
as net of silver by-product credits
(2) Cash costs consist of mining costs, processing costs,
mine-level G&A, treatment and refining charges and
royalties
(3) AISC includes cash costs plus sustaining capital and closure
costs
Economic Sensitivities
The
Project economics and cash flows are highly sensitive to changes in
the price of gold.
Springpole Economic Sensitivity to Gold Price
|
Gold
Price (US$/oz)
|
$1,200
|
$1,300
|
$1,400
|
$1,500
|
|
Pre-Tax
NPV5%
|
$972
million
|
$1.23 billion
|
$1.49
billion
|
$1.75
billion
|
|
Pre-Tax
IRR
|
23%
|
26%
|
30%
|
33%
|
|
After-Tax
NPV5%
|
$652
million
|
$841 million
|
$1.03
billion
|
$1.22
billion
|
|
After-Tax
IRR
|
19%
|
22%
|
25%
|
28%
|
Springpole Economic Sensitivity to Capital Costs
|
Initial
Capital Costs
|
+10%
|
$809 million
|
-10%
|
|
Pre-Tax
NPV5%
|
$1.15
billion
|
$1.23 billion
|
$1.32
billion
|
|
Pre-Tax
IRR
|
24%
|
26%
|
29%
|
|
After-Tax
NPV5%
|
$773
million
|
$841 million
|
$909
million
|
|
After-Tax
IRR
|
19%
|
22%
|
24%
|
Springpole Economic Sensitivity to Operating Costs
|
Operating
Costs
|
+10%
|
$2.36 billion
|
-10%
|
|
Pre-Tax
NPV5%
|
$1.07
billion
|
$1.23 billion
|
$1.39
billion
|
|
Pre-Tax
IRR
|
24%
|
26%
|
28%
|
|
After-Tax
NPV5%
|
$726
million
|
$841 million
|
$956
million
|
|
After-Tax
IRR
|
20%
|
22%
|
24%
|
For
further detail regarding the updated PEA for Springpole, First
Mining encourages readers to review the full Report, which is
available under First Mining’s SEDAR profile
and on the Company’s website at www.firstmininggold.com, and
refers readers to the Company’s news release dated
October
16, 2019, which contains a summary of the results of the
updated PEA.
-3-
Qualified Person
Hazel
Mullin, P.Geo., Director, Data Management and Technical Services of
First Mining, is a “Qualified Person” for the purposes
of NI 43-101, and she has reviewed and approved the scientific and
technical disclosure contained in this news release.
About First Mining Gold Corp.
First
Mining Gold Corp. is an emerging development company with a
diversified portfolio of gold projects in North America. Having
assembled a large resource base of 7.4 million ounces of gold in the
Measured and Indicated
categories and 3.8 million
ounces of gold in the Inferred category in mining friendly
jurisdictions of eastern Canada, First Mining is now focused on
advancing its material assets towards a construction decision and,
ultimately, to production. The Company currently holds a portfolio
of 24 mineral assets in Canada, Mexico and the United
States.
ON BEHALF OF FIRST MINING GOLD CORP.
Daniel
W. Wilton
Chief Executive Officer and Director
For further information, please contact:
Mal
Karwowska |
Vice President, Corporate Development & Investor
Relations
Direct:
604.639.8824 | Toll Free:
1.844.306.8827 | Email:
info@firstmininggold.com
www.firstmininggold.com
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 estimated amount and grade of Mineral Resources at the
Springpole Gold Project; (ii) the PEA representing a viable
development option for the Project; (iii) construction of a mine at
the Project and related actions, including dewatering activities;
(iv) the potential for the Project to become one of Canada’s
largest gold mines when in production; (v) 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; (vi) the estimated amount of future production,
both produced and metal recovered; and (vii) 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.
-4-
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) risks relating to variations in the mineral content
within the material identified as Mineral Resources from that
predicted; (ii) variations in rates of recovery and extraction;
(iii) 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; (iv) developments in world
metals markets; (v) risks relating to fluctuations in the Canadian
dollar relative to the US dollar; (vi) increases in the estimated
capital and operating costs or unanticipated costs; (vii)
difficulties attracting the necessary work force; (viii)
availability of necessary financing and any increases in financing
costs or adverse changes to the terms of available financing, if
any; (ix) tax rates or royalties being greater than assumed; (x)
changes in development or mining plans due to changes in
logistical, technical or other factors; (xi) changes in project
parameters as plans continue to be refined; (xii) risks relating to
receipt of permits and regulatory approvals; (xiii) delays in
stakeholder negotiations (including negotiations with affected
First Nation groups); (xiv) changes in regulations applying to the
development, operation, and closure of mining operations from what
currently exists; (xv) the effects of competition in the markets in
which First Mining operates; (xvi) operational and infrastructure
risks; (xvii) management’s discretion to alter the
Company’s short and long term business plans; and the
additional risks described in First Mining's Annual Information
Form for the year ended December 31, 2018 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 news release have been prepared in accordance with 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 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.
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