Automated transcript · Written by software from the replay's audio. It can mishear names and figures; the replay is the record.
0:39 recording is going to be pretty quiet. But anyway, really appreciate everyone either sticking around or coming back with us. You know, We're at a very interesting point in time here. We've just got back from a couple of weeks in Europe, attending a conference and meeting with a bunch of our long-term, long-standing investors there. Great follow-up on the back of our financing, which we'll talk about here. Really setting 1st mining up for a very, very exciting 2024. But we wanted to take the opportunity now just to take a step back and reflect a little bit on what are some of the accomplishments of 2023. And I think those help set and drive the tone for where we're going here going forward.
1:29 So I'll keep this a brief presentation and try and keep it maybe to 15 minutes and make sure I have lots of time for questions, because I can see people have already had an hour to be asking them. So, we'll have quite a few we're going to have to work through here. But anyway, again, appreciate everyone's patience. I am going to be making a couple of forward-looking statements in this presentation, so go back and review that at your leisure. You know, again, it's always interesting to come into something like this, having been presenting as often as we have at conferences over the last few months, but particularly focused over the last couple of weeks, because it gives you a chance as you talk to new investors about the story. It just reiterates to me Why I'm so excited and why our team is so excited about what's in front of us at 1st Mining Gold going forward here.
2:24 I think the story is pretty simple on the surface here. 2 multi-million ounce Gold projects in tier 1 jurisdictions with robust economics. And I think importantly, those robust economics get a lot better with a higher Gold price. And that leverage to Gold, as we've been talking to investors, that's one of the key things that people have been focusing in on. We'll talk a little bit more about that just to give it a bit more context here. District scale exploration potential. And one of the things we really want to highlight today is really the progress that James Maxwell and our exploration team have made on fundamentally, I think, cracking the code on a couple of real exploration districts that we have inside this company. It's phenomenally successful.
3:15 Well-financed with our financing second close coming on Thursday. And really, I can already see there are a bunch of our long-term and supportive shareholders here in the webinar. And really just, you know, from the bottom of my heart, we're absolutely delighted and humbled with the support that we've received from, predominantly from our existing shareholders in this financing. It's been great support. And it will end up closing on, I think, just shy of $11 million, which we're very excited about. It gives us a very clear path to go and get some really important things done in 2024.
4:01 I'll be humble about the management team, but I think again, demonstrated very good progress on all of our key strategic priorities here going through 2023. I won't go through the whole story. I think everyone on the webinar probably knows pretty much what the assets are, but I think it never hurts to highlight that while we spend most of our time talking about Springpole and DuParcay, you have to remember that there are significant other assets inside this company, be it our shareholding in Treasury Metals, our shareholding in Big Ridge and our project interest in Hope Brook and our project interest in Ateco. Those assets also have phenomenal leverage to the Gold price.
4:53 So, it's one thing, I think, to look at where their share prices have come down to. It's been a pretty savage fall, as we've all seen, obviously, with 1st mining share price. But you look kind of across the board at developers, I think that gives us some real confidence that as we move, hopefully into a more receptive and better equity market here, coming into 2024, that our opportunities to realize value from some of those other assets means that those can be realized at potentially at multiples of where we're carrying them on the books today. So again, just that other sort of hidden aspect of leverage inside the asset base that we have here, leverage to the Gold price.
5:39 This is something that as we've been talking to a number of investors, this I think is the most exciting thing that we have sitting in front of us with 1st mining right now. This is a list of the top development projects in Canada by size. What we love about this chart is that it shows, number 1, that a lot of the bigger projects are ones that are already in construction. A number of those are going to be finished construction over the course of the next 3 to 6 months. That to us says that projects of this size and scale are the ones that can attract capital even in very difficult markets. And I think that's something to keep in mind as we continue to advance Springpole and DuParquet.
6:28 The closer we get them to major milestones, to fine mind plans, environmental assessment approvals, construction decisions, the more that those really strategic assets end up attracting capital, either from construction finance providers, as you've seen in a few cases here, but as often as not, it's attracted people coming in to buy those projects. And you had that with Blackwater, which is sort of a combination of those things, but the project was bought and then Construction Finance put in place. You had that with Greenstone, with Equinox and Orion buying that. You've had that with Back River, with B2 coming in to buy that. Cote was already inside a multi-asset company.
7:16 You've seen that most recently with Valentine and Marathon Gold getting bought by Calibre. I think it just really emphasises the strategic nature of these larger projects in tier-one jurisdictions. So this alone I think is very exciting. You can see how our projects benchmark against a number of ones that have attracted capital and the benchmark pretty well. But what gets us really excited is that when you look at those projects that have now, you know, are most of the way through construction or when those ones are constructed, you look at the universe of what's kind of left to potentially acquire and build in any sort of any sort of timeframe in Canada, this is what you're left with. And you've got sitting inside this company, 2 of the top 10 development projects in Canada, including what we think is one of the 2 most advanced with SpringPool.
8:16 Certainly in terms of progress through both a federal and provincial environmental assessment process, and the timeframes that we think to getting those EA approvals. So, you know, again, I think we've been saying this for almost 5 years that I've been here. Our goal is to have these projects ready to go at the time when the industry needs them the most. And that for us is, I think, exactly where we are heading into a gold market where we've seen, you know, have a push to all-time highs. And I think, you know, setting up a base potentially for significant, significant increases from here. So just to reflect a little bit on what some of the key achievements have been for us in 2023.
9:05 First and foremost, continuing to move SpringPool forward. Steve Lines and our environmental assessment team, our community relations team, I think have done a very, very good job of what is actually, I think, much of the hardest work of the EA process. And a lot of people don't appreciate that either. When we're sitting with SpringPoll today, you know, having submitted the draft environmental assessment in May of 2022. It's been reviewed by every regulator that needs to review it. We've received comments back. And the last year hasn't just been, okay, we got these comments now, we'll take those on board. It's an active back and forth process where you're coming to agreement on, is what we have in this draft EA sufficient?
9:58 Is the quantity and quality of baseline data collection adequate for them to make a decision? And are there any other issues that we need to discuss that may form conditions of an environmental assessment approval? So those discussions have been going on for 18 months. By the time we submit our final EA, still targeting submitting that final EA next summer, you can rest assured that we're very, very well advanced on all of those discussions. So I think that's what gives us the confidence of being able to go through that final phase of the final EA in good time. We've also done an enormous amount of work in the background on feasibility study work for Springpole. I think we're about 85% done the feasibility study, but importantly through most of the really important elements that we need to understand around mine plan, around tailings design, around waste rock co-disposal, around process plant design, equipment selection, things like that. So really our combined team has done an enormous amount of work on that and sets us up very well to really push the button on finalizing that feasibility study at the right time.
11:20 Right now, we're kind of targeting that probably for 2025, around the same time as the EA approval. But luckily have spent the time, the effort and the capital to get that work done. So we know very clearly where we're going. So that's at Springpole again, I think some great progress and momentum on the project there. And importantly, I think this year was really a turning point for DuParcay. I think everyone needs to remember we only acquired 100% control of this project a little bit more than a year ago. So to go from that to announcing a positive PEA on DuParcay in September, had some very, very good relationship building with the municipality, the local community at DuParc, and with certainly the government ministries in Quebec, as they've kind of got to know the project.
12:19 Still, I think it sets us up for an interesting 2024 of getting, really getting our plan together in terms of what is the path forward, does it look like that PEA, which was certainly demonstrating a large and robust project. But we think there are some other opportunities at DuParcay that might allow the company to start a little bit smaller. There's still some important investigation to go there, but I think some very exciting things going on. And on top of that, very importantly, we've consolidated that land package with the acquisition of the ground from IM Gold. And I think you're going to see over the course of the next few months the real importance of that in terms of our exploration success at DuParcay.
13:09 On to that, James Maxwell and our exploration team, I think have done an amazing job in getting to understand, getting our hands on the DuParcay project. We're well through now almost 10,000m of a drill program. The first couple of holes are out and I think importantly, in a newly modelled zone, having some exploration success demonstrating real growth of the resource with results that I don't think anyone really appreciated when those came out. 6.5g over 4.5m are bona fide underground grades that we found really in the first 2 or 3 holes drilled at DuParcay.
13:56 To be targeting new mineralisation, I think really only speaks to the expansion potential that we see there. And on top of that in the Bertucci, I think a very interesting year here where now in the areas around Springpole, we've demonstrated based on all of the work that was done in 2022 with geophysics, real data compilation, going back and understanding the number of historic occurrences that we had in the Bertucci, but to be able to actually turn drills on targets and I think very successfully demonstrate in 3 different areas what is an unquestionable gold endowment in this district, including again 0.92 grams per ton over 114 meters. I mean, we don't get 100 gram meter holes all that often in this business.
14:49 So to have that at saddle, which is not a new discovery, but we certainly hadn't seen intercepts of that size and width, I think again, speaks to that each of these satellite opportunities we think could have 1 or 2 million ounce plus potential in the Bertucci, just demonstrating the value of this district that we put together. The other thing we've done is, you know, continue to very conscious of the, you know, the share structure and where we are. We've continued to work the portfolio to provide cash to be able to move the projects forward. And whether it's the sale of the royalties, we've sold off a few other non-core Lithium claims in Manitoba and Ontario to a couple of Lithium developers in both of those deals. Took back some share consideration.
15:43 Took back a royalty as well. So lots of opportunity coming from those in the future. But I think just demonstrating that we continue to make progress on the portfolio. And as I said, with the royalties that we sold towards the end of last year and beginning of this year, I think when you look at that in the context of how we've avoided dilution with that, I think we've done a good job for the shareholders there. And then closing this equity offering just to kind of finish off the year here. We talked about this before. I won't harp on it, but it is, I think, important just to understand the size and scale of this leverage to the Gold price in this environment that we're in. You've got to remember the $2Bn of value that we talk about having in an asset value we have in the company, that really reflects Springpole at a $1,600 Gold price and reflects DuParquet at an $1,800 Gold price. And it doesn't give a whole lot of value for the cash and other assets that we have in the company as well. So you fast forward through that again, you look at what the impact is. You can see here the after-tax NPV at DuParcay goes up from $1,800M to $2,000M, goes up by almost $300M Canadian dollars.
17:06 Every $100 on the Gold price at SpringPool is about $150M after-tax NPV US. So you can see right there at $2,000 under our current study, that's 1.6 billion US after tax NPV. So that number that we're talking about there in terms of asset value, Springpole alone at a $2,000 value justifies that. Let alone, were we trading, I think as developers have historically in that 0.4 to 0.6 times that fundamental value range when we get projects to a permitted state. I think that speaks to the upside that we have here. You can see it is not a stretch in an increasing Gold environment where we could see well in excess of the types of returns that we're showing here. So very exciting times. What's coming ahead in 2024?
18:06 Really, really focused on submission of the final environmental assessment, environmental impact statement document for Spring Pool, which is targeted for the summer of 2024. And we're well on track to execute on that. We'll continue on the 20,000m plus drill program at DuParcay to build on the discovery success that we've had in 2023. Keep your eyes peeled for some exploration results, which I think we'll hope to have out before the end of the year. But that will still likely only be 7 or 8 in total of the 17 holes that we've drilled there. So lots coming out in sort of January, February, March timeframe to continue to demonstrate the resource growth that we really believe is there at DuParcay and then gives us some time to really scope where the next phase of that program is really going to deliver.
18:57 We should, in fact, we put out this morning some of the results of the exploration program at the Bertucci, including some very exciting high-grade discoveries, not far from where we had that very significant drill hole earlier this year. That alone, I think, continues to build out, whether it's saddle, whether it's Bronco, a number of those targets in the Bertucci is really meaningful upside opportunities. Continue to work on on community relations at Springpole and at DuParcay, and continue to make progress on that front. The preparation of the feasibility study, I think we'll have some targeted work that we will aim to do this year, but really targeting the bulk of that work probably being done in the first half of 2025.
19:54 And continue to work on the portfolio to make sure that we can keep the company well financed and progressing towards what we think are these real value catalysts that we're going to be hitting here over the course of the next 12 months. So with that, I think we'll move to the Q&A. I appreciate there's a few questions already piled up from the early start. Just to sum it up, I think it's been a very successful year in terms of what we've delivered. Appreciate some of the big milestones for this company still sit, you know, 12 to 18 months away, if you talk about EA approval at Springpole, but we continue to make really good progress and every day is a step closer to the goal. So yeah, with that, why don't we dive into the Q&A?
20:50 Sounds good, Dan. And like you said, we do have a lot of them. So I'm going to try and avoid asking the same question twice here. There have been a few questions in regards to additional dilution and they're wondering if another raise is likely to happen? Well I think this raise that we've done now, I think gets us reasonably set up to get through most of 2024. We are going to need to continue to monetize some of the other assets. And I think that's the real question for us is, what is our opportunity potentially to turn a few of the other assets in the portfolio that we get no value in our share price for right now into cash to continue to stretch out that runway. So we're working hard on a number of fronts there.
21:39 In a perfect world, we'd love to be in a position where we are well-financed all the way to that construction decision. And we're going to continue to work on that as well. So yeah, I appreciate that. Rest assured that management and the board are as sensitive to dilution as any of the shareholders. Remember that we're all big shareholders. Of this financing, almost $2M of the $10M plus came from board and management. Most of that, Keith and me. We're very, very aligned and understand what that impact of dilution is. I want to stay on this thread a bit because there's a few questions in regards to your comment about extracting value from other projects.
22:29 One being, Would it be one of the 2 major projects? Are you willing to sell one of the larger projects or do you intend to keep both in the portfolio? You know, I think that's a good question. We actually have our whole team here for a big strategy session this week and we need to talk about questions like that. I think we still have a lot of room to demonstrate the value of these projects before you look to be cashed out of them. But would that prevent us from entertaining potentially an earn-in transaction where someone might offer to spend the next $100M or $150M of capital to advance SpringPool, I think we'd have to consider something like that.
23:25 I think there's always a value at which we'd consider selling the projects. It's nowhere near kind of where we are right now. But the other thing that gets us most excited is just there is still an enormous amount of value to unlock here. And again, you think about the leverage to the gold price. I think sort of the last thing that we want to have happen here is to be cashed out at this point. I think what you really want to see is an ability, even if there are some of those types of transactions, that takes risk out of it, but allows the shareholders to continue to benefit from the growth of the asset and the growth, demonstrate the growth in that value. So, we need to keep an open mind and you can rest assured that, again, with the alignment that the board and management has with the shareholders, we're going to do the thing that's right for all shareholders here.
24:23 Great. Thank you. And that covers the JV question too. An individual is wondering your thoughts given the Gold price recently, as well as he's comparing Sprott Junior Gold mining ETF to the performance of 1st Mine. And just wondering if you could get comments on the performance of your stock. Well, I think we've seen the Gold price run and I think we've had a bit of a pullback here in the last couple of days, but I think this is symptomatic of what is going to be a continued progression up that we've seen going really since September or October. I think we're going into a higher Gold price environment, but I would say that we haven't really seen capital flows coming into the sector yet to a large degree. You've seen some movement in the producers.
25:23 We haven't seen much of that capital flow really starting to come down to the developers. And usually it takes a couple of months of adjusting to a new gold price environment before you see that capital come down. And I would point to, you know, point to 2020 as a case where we did see the gold price move pretty sharply in a short period of time. And it was really, you know, you saw the producers start to move pretty quickly and they're moving off artificial lows from panic selling around the COVID pandemic. But it was about 2 to 3 months later that you started seeing some of that interest trickle down into the developer space.
26:11 And when that happened, it doesn't take a lot to be able to see our share price, you know, really start moving substantially. And in that time, you just got to keep in mind, the share price went from about 20 cents to 55 cents in the course of, you know, a couple of months. And I think the bulk of that over the course of 2 or 3 weeks, and that was largely as a result of, you know, there was 1 shareholder who was looking to accumulate a sizable position. So when we have those capital flows coming back in, going back to
32:44 If we were to increase the reserves, would it require an additional, an updated PFS? I think if we were to, yeah, if we were to put out an updated resource, I think that does make your existing technical report no longer current. So yeah, I think you would have to, you'd ultimately kind of coordinate the timing of an update of a resource or reserve with the release of the feasibility study. That makes sense. John's wondering, when is the soonest we could expect to see spring poll get permitted? So we're targeting, call it fall of 2025 for environmental assessment approval.
33:35 And then, a little bit of it is just is capital dependent. I think from there, it's but probably 9 to 12 months for all of your permits to be received for construction. Now, there are some of those things that can come sooner. There's some of the longer lead time items that you can start that can facilitate construction and that's likely sort of along the lines of access roads and power infrastructure. But ultimately, I think there's a chance that we could shrink that time frame if we did have a little more capital that we could spend over the course of the next 12 to 18 months to prepare. But right now, the base case really is getting ourselves to the environmental assessment approval. And we start that follow-on permitting work from there, targeting 12 months. And we think that's something that's realistic.
34:33 Switching to DuParcay, Warren's wondering, you made a comment, something, I'll just read it verbatim here. You commented on DuParcay on something smaller at this location. Can you discuss the existing tailings at this location? Yes, Warren, the existing tailings are actually part of the mine plan at DuParquet and always have been. Those tailings were deposited from the 1930s to the 1950s from the old Beattie and Donchester mines. They average about 0.9g Gold. So there's actually still quite a bit of Gold in them. And part of that is that processing technology wasn't quite as good in the 30s and 40s as it is today.
35:21 We know that that Gold recovers. We just need to do a little bit more work to understand exactly what that flow sheet would look like. But there's 4Mt there that would basically be free digging. It's already ground up. So reasonably low cost to process. But that's when we talk about starting smaller. We've always talked, and look, since we put out our 1st resource on DuParcay, we've always been intrigued by the grade tonnage curve. We knew that there is kind of a central core of the deposit that has quite a bit higher grade than the average deposit. You see that in our mine plan on the PEA in the first couple of years, you know, the grade is kind of 1.5 to 1.8.
36:06 We think there's an opportunity, you know, potentially to more selectively mine that to get to grades that are, you know, 2 grams plus. And one of the things that we are really coming to an understanding of in the area at DuParcay, and this is the advantage of being square in the middle of the Abitibi, is that within 150 kilometres of this project, we probably got 10 operating mills. Not all of which are flotation mills, but some of them are. I think that's leading us just to ask the question of, is there somewhere here between those and you'll recall, we updated our resource at Pitt and Duquesne as well, which are just on the Eastern side of our property package. Those are both conventional deposits.
37:03 And you know, just kind of want to understand is what's the grade sensitivity there? We know our friends at IAMGOLD are producing from a deposit called Fayol, which is only about 20km east of Duquesne, and they are processing that at their Westwood plant right now. So there's certainly opportunities for potentially toll milling, partnering with someone who has a mill or, you know, potentially acquiring a mill, which would mean that starting at a certain scale you may not need to build a mill and at a certain scale, you know, it certainly it can expedite a permitting process. So we're in early stages of investigation. This is really kind of an intriguing trade-off study that kind of came out of the PEA.
38:00 So that's, I think, an important piece of work for us over the course of the next few months, is just understanding what the options are. And this is entirely driven by, you know, the infrastructure that's in the area. And that's the real opportunity at DuParcay, is you've got a project that's, you know, 50 kilometers from a town of 50,000 people that has a copper smelter in the middle of it. You're in the middle of one of the great mining districts in the world. We see it already in terms of our operating, you know, our operating costs and particularly relationship and amazing skill and quality of the drill contractors that we have working at DuParquet right now. There's a reason why everyone wants to be in the Abitibi, and we're certainly getting a real appreciation of that right now.
38:52 So that's kind of the thinking behind the potential Start Smaller. But ultimately, an important part of any mind plan is that we are going to need to process those tailings. And that's something that again, needs a little bit more work to understand that as well, and how those could integrate into a mine plan. So again, lots of work going on and just kind of for us understanding what the options that all of that infrastructure in the area might give to us for a path forward. Thank you. Warren has a question about the Challenger grab samples. He was just wondering if existing miners in the past have ever found or any samples hidden around 25.6g per tonne Gold before?
39:43 Yes. Well, we actually found a 40-something gram per tonne just to the south and west of Springpole last year. There's lots of high-grade around there, Warren, honestly. Not so much at Saddle. It had been explored with a few drill holes in the 80s, maybe early 90s. I hadn't really seen anything since then. Just to the south of that, around the Soldor property that we have, property that we have. Soldor was basically a high-grade, a very high-grade, more or less a trench. They produced a few hundred ounces, putting high-grade material through a stamp mill. That would have been probably in that similar 0.5 ounce to ounce type material.
40:37 So you go up to the Argosy mine, which is a past producer just on the sort of North shore of Birch Lake, argosy produced at 11 or 12 grams. You know, the things that have been looked for in the Bertucci in the past, not surprisingly, are the same things that they've looked for and found in Red Lake. And that, we'll get James Maxwell on a webinar here in the new year and get him to kind of explain it. It's that bias around the exploration perspective that means that, you know, we really believe that there are 1 or 2 great bears sitting somewhere in this property package.
41:25 And the reason people haven't found them is because people haven't looked for them, because it was an unconventional style of mineralization, like Springpole is, sitting inside what people from the 30s to today understood or knew about mineralization in a greenstone belt, Arkene Greenstone Belt. I think it opens up just a massive amount of exploration opportunity when we've got 70,000 hectares really covering what we think are the best structural controlling areas of this entire greenstone belt for us to continue to find more. But, you know, am I excited that you've got, you know, a surface grab sample at 25 grams, you know, a few hundred meters away from where we drilled 100 meters of 0.9. Yeah, I'm excited about that. Like, you know, that's the beginning of something that, you know, really should capture people's attention.
42:23 And James and Caroline and our exploration team are doing an amazing job, very systematically generating and using the data to continue to hone in on these targets. But it's going to take more investment to continue to move it forward, for sure. But I think from where we are here, the most important thing is you've just undeniably demonstrated the gold potential of this district scale belt that we control. And that has real value when you put that beside, you know, another significant deposit like Spring Pool. Thank you, Dan. In hopes to avoid repetitiveness, I do believe we actually addressed all the questions here.
43:11 Thank you all for that, attended the event today. The recording will be available most likely tomorrow, But any last closing remarks from you, Dan, before we close things off here? Yeah, I think first and foremost, I see the names of the people who are asking the questions and the people who are attending. I just really want to say thank you. We have such an amazing and engaged shareholder base, and that's never been clearer to me than over the course of the last month as we've been working on this financing. And just the real support and positivity that's come out of so many of our shareholders and the real belief in the projects and the team and the way we're going forward. We take it very seriously. We are absolutely blessed to have all of you with us on this journey here. So just want to take the opportunity to say thank you. We're, I hope you can tell, very excited about 2024.
44:09 Lots of really, really exciting things to come on that front. And, you know, one of the things that certainly points been made here a couple of times, one of our 2024 goals is to have kind of more frequent discussions like these, but going into more specific topics and make sure that the investor base gets to know the broader team that we have here at 1st Mining. So we'll have a couple of those other topics here coming forward over the next few months, but really just hope everyone has a chance to hopefully relax over the holidays. Hopefully we're watching gold hit all time highs again. It's pretty exciting over the last week and really looking forward to an exciting 2024. So thanks very much, everyone, for joining us today.
45:00 Perfect. And thank you, Dan. Appreciate it.
