Automated transcript · Written by software from the replay's audio. It can mishear names and figures; the replay is the record.
14:18 When, particularly on the federal side, when they give comments to us, their clock stops. But it's important to understand right now, they're on the clock. And that clock is now, I think, as of today, 295 days. I might be off by a day or 2. But it's very important that we are there and responsive and turning around these questions and comments as quickly as we can. Because when we hand them responses back, then that clock starts again. So the important thing I think that comes out of this next technical review phase is that a lot of those, well, I think all those comments and questions are going to be public. And so investors and other mining companies and other interested parties are going to be able to have a look at the nature of those and get a real sense of what we think will be coming back.
15:15 That there's still, as I said, some very important work to be done here, but we'll have a much better sense of the nature of those comments and how they get addressed here over the next few months. But that is a back and forth period that we expect is going to go until, you know, probably the end of June. Something like that. And then from that point, when, you know, the information requests are kind of deemed complete, then, you know, that federal clock kind of keeps ticking until, you know, the minister has to make a decision. So, again, that's sort of what informs our timeframes working toward kind of mid December, which is, which is the goal we're working towards today.
16:12 I think in part driven because Steve Lines, his birthday is the 13th of December. He's, he really wants to have a birthday present with an EA approval. But yeah, you know, that said, it's, there are a bunch of those milestones that come along after After that comment period, there is a draft report. There's draft conditions that get circulated for public comment as well. So, you know, you start seeing the nature of what those comments and questions are and what the responses are. And, you know, I think we'll have a very, should have a very good sense of the direction that it's going, kind of by the middle of next year. Gotcha.
16:57 Thank you for that. Now, First Mining also recently established an independent geotechnical and tailings review board for SpringPool. How has their initial feedback influenced your thinking about the cold disposal facility design and what role will they play as you move forward toward the detailed engineering phase? Yeah, it's a very important role. I mean, these are 3 globally recognized experts in tailings and tailings management. I think Our strategy around the co-disposal facility evolved over the course of, you know, really of this moving from the draft to the final environmental assessment phase. And in large part in response to some technical comments and questions that had come back from some of the regulators that had reviewed it. So, it's important for us that we do have an independent group who has looked at this and really asked very important, very good questions, checked a bunch of our assumptions and has provided some really valuable feedback for us that's already kind of been incorporated into some of the design work that's done and going forward. So I just think it gives another level of review, very important, independent technical review
18:28 that can give confidence to everyone looking at the project that, you know, we've taken this design really seriously. As we move forward, I think the goal of the review board is to continue to work with the company, review plans as you move, as you say, from this design into detailed engineering and ultimately into what we hope will be construction and operation. It's a great resource for us to have had these real globally renowned experts working on the project. Let's talk about resources. You did some recent financing. How are you prioritizing capital allocation between SpringPool's advancement to Barquet and your broader project portfolio?
19:19 The real focus for this year is getting SpringFool through the EA process. We see that as really the major milestone. A lot of the funding that we are providing in that process is going to provide capacity to indigenous communities to participate in that environmental assessment process. And we've announced that we'd funded the Anishinaabe-led impact assessment that Cat Lake and Lac Seul are undertaking, and that work's ongoing now. So for us, that's kind of job number 1 this year because we really see the impact of that as you know a major de-risking point and hopefully a major value opportunity for the company.
20:09 And then at DuParcay, we've got some targeted works that we're going to do on the environment side, on the community side, and again, an exploration budget that we would like to have some flexibility in there as well, for sure, to demonstrate the path going. That's going to depend a little bit on funding and how we keep that funded. Those are really the priorities for this year. 2 massive projects with both Springpole and DeepRK events. Could you share your latest thoughts on the optimal corporate structure to maximize value for these assets as they move toward development? I think it comes down to what are some of the structure opportunities to move Springpole in the next stage of development.
21:14 We've always said that's something that's genuinely best discussed at the time when you're closer to being able to make that decision. We've got a lot of work to do over the next year, I think, to demonstrate what that development path is going to look like. But I think the more and more that we think about it as a team and as a board, I think there's a real opportunity with SpringPool potentially to bring in a partner who could help with some of that next stage of funding. But if you look at some comparable mine developments in Canada, you've had those partners come in with significant capital to earn into a 50% or 51% interest in the project, like hundreds of millions of dollars.
22:07 And so that would go a long way to basically demonstrating that the project would be funded with a well-capitalized partner who could bring other resources, not just funding, to drive the project forward. So that's something that I think we're interested in. We'll continue to pursue the timing of that. You know, there's a bit of a balance of the timing of bringing that partner in versus demonstrating how we are advancing the projects. That's something that I think could be interesting. We do think that there is value in having these 2 significant projects inside first mining. It's certainly something that Keith's always been pretty adamant about.
22:59 He doesn't like single asset companies. He likes to have something where there's multiple opportunities, multiple shots on that. And I think we still have that the the challenge of that obviously is that you need to keep these projects funded in order to keep them moving forward. And I think in kind of goes to I know one of the questions that I saw that someone had asked before in the registration but for for all that we don't get a lot of credit for this we have turned our portfolio of projects into more than $60 million of non-diluted cash over the last 4 or 5 years. There's not a lot of other groups who've been able to do something like that. So that's, we're blessed with the resource endowment that we had, but you know, I have made a lot of progress with a great partner at Pickle Crow, with Ateco, now Firefly Metals.
24:00 You know, We've made some great progress at Hope Brook with our partner, Big Ridge Gold. Obviously everything with Gold London, Goliath in Treasury Metals, now NexGold, there's I think significant value opportunities there still for us to be able to realize some more, hopefully significant non-dilutive capital into the company to help keep us funded through 2025 and beyond. So that's the goal. We're working hard at it. We continue to work hard at it, but yeah. No, I think that's important for shareholders to recognize that I think we've done a pretty good job of trying to minimize the dilution. Now, you know, we've also had to raise equity. And, you know, that's part of us having had the capital to be able to advance these projects as we have.
25:01 Well, let's address that, because John has a question in the chat here. It was rather recent, right? So that's why quite a few questions similar. So I'm trying to compose it all in 1 if I can here. But how far Will the current cash balance take you, you said 2025 and beyond? Well, the current cash balance plus what we're hoping to realize through some other continued monetization of the asset portfolio, We would expect to be able to keep us through 2025. That's the goal. It's dependent on a couple of things coming right in terms of being able to realize some value for some of the other assets that we have. But that's certainly the goal.
25:54 Let's talk about value because we did shift this from Tuesday to Thursday and we had a ton of questions in the registration. I do want to address many of them now, just in case some individuals are not able to attend. Can you provide comparables to current Gold-inferred etc. And just other companies at similar stages to you, to First Mining? Where do you sit on that scale? When we think about comparable projects, we think about large-scale Gold projects in Canada. That's really the comparable set that we measure ourselves against. We have a very good slide in our corporate presentation that lays out how that landscape has changed over the last 5 years.
26:49 We've come through this period where there was an abundance of these large projects that were being moved into production. Almost every one of those now has been bought by a larger mining company. Most recently, if you look at Goldfields buying a Cisco, when we think a little bit about a partnership project, partnership path for SpringPool, it's in part guided by that. They committed $600M to earn into a 50% interest and then bought the balance of the project a year later for $2.2Bn. Some pretty meaningful value. It's a very different project. That's a high-grade underground project. In terms of ounces, in terms of production profile, it's not that different.
27:40 If we think about the other groups of comparable projects, The other ones on that slide, when you compare where those are in some kind of permitting process versus where Spring Pool is, you pretty quickly get to categorize those as really advancing permits or advancing a development story. And those that are still drilling out resource and haven't really started. Another important comparable for us was O3 Mining, which is getting acquired by Agnico. I just saw they mailed the takeover bid this morning. At a value of $75 or $80 an ounce, I think it's An interesting project. It's got probably lower grade than DuParcay, but located closer to some of Agnico's existing infrastructure, which is important.
28:41 So, you know, the ones that if I had to kind of put the real comparable projects on that list for us. I would like to compare ourselves to Skeena that has the Eskay Creek project. It's got much higher grade than Spring Pole and is more advanced from a feasibility study standpoint, but not necessarily more advanced from a permitting standpoint. We'll see. I think there's a good chance we could have our environmental assessment approvals around the same time that they do. You've got Troilus, which has a very, very big Copper-Gold project in Quebec, with considerably lower grade than SpringPool, although it has some other interesting benefits to it.
29:31 Beyond that, there are other names on that list, But again, who has advanced projects as far as we have, and that gets to be a very short list. Now, I noticed many of the comparables, there's many that got bought out and there's a lot of people wondering, has the company had any interest from other companies on merger acquisition possibilities? If so, how would that be in the interest of long-time shareholders that are in it for the long haul? So yes, we've had interest from both merger and potential acquisition or potential partners over the last number of years. We've signed a number of confidentiality agreements. You had a number of people in data rooms and looking at the at the company in the projects.
30:25 So that activity is, is always ongoing has, you know, really has been since well, really since we put out our pre-feasibility study in 2021. So, but the person asking the question is asking the right question. Like what type of that activity is going to be in the best interest of a long-term shareholder? Because I think we all share the view that, you know, a 50% premium to the current share price would be a very, very disappointing outcome for all of us. We've got this massive disconnect right now between the fundamental value of our assets and our market cap.
31:14 We've been trying to close that gap for years. And I hope the folks In the session here today will understand it's not through lack of effort It's it's not through lack of telling the story. There's You know, I think to some extent with Spring Pool being the dominant asset it was always going to be a bit of a show-me story. It was always even from when this project was first discovered in its current form there was always a bit of skepticism about are you gonna be able to get it permitted? Well, we're gonna have an answer to that question in 12 months. And it felt like a bit of a daunting task starting down the path to really get those answers in 2019 when I joined.
32:07 But the one thing I can tell you is we'd much rather be where we are today than where we were then. We really have done a ton of work to, I think, demonstrate the value of these assets. But at some point, we, it's why we kind of think a partnership angle might be a good one is you get that external sort of stamp of credibility and you get capital to advance the project. And it helps bring about this change in perception about the project that will then manifest itself in a lot more of that fundamental value showing up in our share price right now. So there's still a lot of work for us to do on that front. And you can rest assured that there is no 1 more frustrated by that than me, except for maybe Keith.
33:01 Keith's incredibly frustrated by it. But you know, our solution to that has been continue buying shares, keep adding to your position, take advantage of these opportunities. You know, We're in a once in a generation disconnect in value right now. I've been doing this for 30 plus years and have never seen a disconnect in value like this before. And it never persists. And you're starting to see that now with the M&A market starting to close that value gap. And if you go back 2 years ago and said, are we ever going to see a 50% premium paid for a mining asset again? Everyone would have said no, never. Now this is where in the world of the at-market mergers, you're never gonna see a premium acquisition again.
33:53 Well, you know what? We've had 2 acquisitions at 50% plus premiums in Canada in the last 3 months. So there's more of that coming. And why? Because the producing companies are starting to recognize that they need to add ounces or replace ounces that they're mining. And those ounces, they're never going to be able to get them more cheaply than they can buy them today. So it's coming. We've always kind of said we want to have the projects ready for when the industry needs them the most, and I think that industry needs them the most point is very much coming here in 2025. To drive home this disconnect and to address a question in the chat here, what is First Mining's market cap? And between the 2 projects, Springpole and DuParcay, how many confirmed ounces of Gold and how many potential ounces are there?
34:54 The Market cap today would be about CAD$130M. And the total number of ounces, and I don't have the resource statement in front of me to have the breakout of measured and indicated but you know the measured and indicated ounces are let's call it 8 and a half million and you know the inferred resources are about 4 million and I might be off a little bit on that. I just don't have the statement in front of me. But In a total resource calculation, this is exceptional value here.
35:53 Think about where the Canadian dollar is too. We talk about a Gold price at all-time highs, while the Gold price at $1.43 Canadian dollar is at definite all-time highs. You're still buying these ounces for less than $10 an ounce in the ground. And the reality is you're seeing companies at the same point of advancement, or maybe not as advanced as us, selling those ounces for $75 to $250 an ounce. There's another good example of a company in Australia called De Grey Mining. I think they have about 12 million ounces, about 6 million ounces in reserves.
36:40 So kind of comparing that to what's in some of our mine plans. And it just sold for 3.3 billion US. At a feasibility stage, it doesn't have its permits yet. It actually looks a lot like DuParquet. It's refractory, the average grade of an open pit is about 1.5g. There's a lot that's interesting about that, but it just goes to show that the value of these ounces gets recognised. Even if the market's not recognising it now, our real job is to have the industry recognize that over the next 12 months. There's a timely industry question in the chat from Warren here with Barrick's dispute with Mallee.
37:30 Will we see majors focusing on safer jurisdictions, specifically Canadian deposits? The short answer is yes. The short answer is, if you ask any of them where they would want to have their deposits, it would be in entirely consistent top 3 countries. It would be Canada, US, Australia. These are the premier jurisdictions in the world. For all the people who wring our hands about Canada and permitting mines and things take a long time. I do want to give a shout out to our colleagues and friends in the province of Ontario, particularly because Ontario has got an excellent track record of permitting projects. When you look over the last 10 years at the number of large Gold projects that they permitted, I don't think you can point to anywhere else in the world that's permitted as many projects as Ontario has.
38:30 They know what they're doing, which is great. And I think it doesn't take too many situations and Barrick's not the only one in Mali that's had issues. You've literally had people detained by the government, like mining company executives detained by the government. It's getting harder everywhere. And you look around the world, you look at the kind of state of global trade and what was a push for 50 years of globalization, and that's all being reeled in, right? So for all that there are challenges and frustrations around timeframes to develop projects in places like Canada and the US.
39:22 I think when you are at the tail end of those processes there is extraordinary value in having got to the finish line in those kinds of in those permitting processes to have assets that can be moved forward in a jurisdiction like Canada. So you know where we it's not just speculation we're seeing I think you're seeing you know a number of companies start to recognize that there's a very limited number of things that are going to be built in Canada in the next 5 to 7 years. I think Spring Poll is on that list. I would like to get your take on ETFs. There's a couple of questions regarding them. One was saying, what would it take to get back on the junior ETF that you were once in?
40:13 And then when do you target inclusion in gold related ETFs? So A few individuals interested in being included in an ETF. Just your thoughts and comments. Yeah. It's really that point of index inclusion. The reality is a lot of those indexes have shifted their inclusion requirements or their goals since first mining was in them in 2017 to 2019. They focus much more on producers now and developers that it has been harder to get in. The real threshold for us to be included is liquidity. So in most cases, we'd qualify for market cap, although we'd be on the low end of market cap. But it would be liquidity demonstrating that you can you are trading a million dollars US a day or more over like a 9 month period. So that's that's pretty extraordinary from where we are today. I mean, you know, we trade a couple of million shares on average in Canada and then, you know, call it half that again in the US.
41:30 But I think the prospect for us to get re-included would need, I could see the path where it would happen. But that's probably some time down the track when, let's say, we have a partner that's coming into spring pool that our values being recognized, you start having institutional investors playing a more far more significant role in in the share structure and wanting to be owning more. You know, we've got a, I think a natural path. If you look at a lot of other companies that have those much higher market caps, But at our kind of stage of development, they would tend to have, you know, 50% ish, if not more institutional shareholding.
42:29 And you know, I think that's something that we certainly can aspire to here moving forward. And again, a big part of it is going to be us hitting our milestones and, you know, demonstrating the path forward with Spring Pool and with DuPort King. Thank you, Dan. Going to the chat, an individual is wondering if you could speak on the current status of your relationship with the Cat Lake First Nation and their role in the SpringPool project. I'm not going to say much about that. What I would say is that we announced that we had come to an agreement to fund the Anishinaabe-led impact assessment with Cat Lake and Lac Seul.
43:17 That work is ongoing. We were invited into the community of Cat Lake last year for, you know, for an information session in the community and got a lot of good questions and a very nice welcome. So what I can say is we really appreciate the community of Cat Lake and all the indigenous communities we're working with, doing all the work that they are doing now with their advisors, going through this final environmental assessment. And, you know, it's an enormous amount of work and it takes a lot of capacity from the communities at a really important time of year where they're often dealing with many, many other priorities.
44:12 So we really appreciate all the work that all of the communities and their advisors are doing at this point. Thank you. An individual is wondering if you can confirm, is the company currently looking for financing and if so, what kind? Equity, debt, royalty, offtake, JV, or not looking for financing anytime soon? Ah, you know, we're always looking at what the options are, but we're not actively out trying to find financing at this point in time. We said before, we've got a couple of other things that we are prioritizing in terms of potentially monetizing some of the other assets that we have in the portfolio today that I think would be the priority rather than going out to try and seek financing. But those other discussions with mining companies about potential strategic investment or potential partnerships.
45:23 Those conversations take a while and so we continue to have a number of those conversations ongoing. Another individual is asking, same topic a little different, in the event of the sale of SpringPool or any first mining asset, would receiving a royalty as part of the consideration be an option? Would you entertain that? Yes, certainly would. That was one of the real keys to success at Canadian Malartic for Asisco and basically gave birth to Asisco Gold Royalties. The shareholders did pretty well by holding on to those royalties. It's always an option. I think if you look at what we've done with some of our other partnership assets, that's been a pretty important part of the story.
46:12 Particularly, we ended up taking some of those royalties and selling them in total for about 17 million dollars a couple of years ago that provided a very important piece of funding for our programs in the middle of that work a couple of years ago. So it's always one of the things that you'd think about. You'd like to hold on to that long tail exposure to the project and a royalty is a great way to do it. I got a few more questions and we're running low on time here, but you mentioned the disconnect. What concerns do you have regarding the depressed share price we're currently seeing?
47:01 Well, I mean, I've got a lot of concerns about the depressed share price. I don't think we're going out to raise capital anytime immediately here, but at the same time, we've got a Gold price at or near all-time highs and a Canadian dollar at certainly cyclical lows. The economics of our projects, I think, would look extraordinarily strong in this current environment and it's just not reflected in the share price itself. I do think I would be more concerned if it was just first mining and we were very much an outlier. Sadly, we're not.
47:54 There's a whole list of project developers with good projects in Canada that are trading at $10 an ounce. It's still been the lack of willingness of investors to be coming into this development space, which has been a pretty consistent theme for the 6 years that I've been here. It's changing slowly, and with every other one that gets bought, there's a bunch of investors who made some money and will be looking for what that next opportunity is. So we start to see that. In our financing that we did in October, we had 19 institutions come into that financing, not in huge size, but important that they're starting and looking at ways that they can build positions on top of that. So I expect we'll continue to see that here.
48:46 The one real concern about a low share price is, is there someone that's going to take advantage of that and, you know, like I say, show up with a bid at a 50% premium to our current share price and our shareholders would sell to it. I mean, I know that I wouldn't and I'd be reasonably certain that Keith wouldn't. Really in that case, it just, all it does is put a timeframe on you having to surface the rest of that value because the asset is, you know, essentially being taken off the market one way or the other. So, I've experienced this a few times in my career, you know, particularly in my corporate finance days where I served as an advisor in a number of hostile takeover defences and ultimately those are processes that just mean you have to basically create that competitive tension or start the auction, if you will, but you're just starting from a lower price, it doesn't mean you don't get to the right price in the end.
49:52 And that's something that I think we'd be reasonably confident in. But the other thing I think everyone needs to understand is you just don't get that kind of hostile activity in the mining sector very often. People need to have done detailed technical due diligence to understand your assets and what you have. Typically, when they do that, there's confidentiality agreements that prohibit that kind of activity. And so, you know, it's not something that that keeps me up at night very often anyway, but more and more as you start seeing other projects getting acquired at, you know, 50, 75 dollars an ounce, Just kind of when you have something that you think is worth even multiples of that, you know, it just does kind of make us put even more focus on how do we close that value gap that we're seeing between the share price and the fundamental value of the assets.
50:52 Thank you Dan. I'm gonna piggyback 2 questions. 1 I'm gonna read verbatim as submitted and then I think it's a good way to tie up this this event on tons of questions in this this event today So thank you everyone for submitting them. The question verbatim here, tell me why I should remain committed to the stock when we are a year away from the best case scenario of receiving permit approval. And I just want to add on top of that, to make this your closing remarks, as we close out 2024, what are the key catalysts and milestones investors should be watching for across your portfolio in the coming year? Well, The first thing I will say is I appreciate almost more than anyone in this session today the challenge and frustration that many or most of the shareholders have had around timeframes and around kind of where the where the current share price is.
51:56 You know, we've got a significant chunk of my net worth in this company and we're, you know, we're very, very committed. So when it when it comes down to, you know, how do we how do I keep the faith? I mean, I keep the faith in large part because of, you know, we know, I know we have a great team that's here working on this. That team is very, very committed to getting through these milestones and I think have done an extraordinary job in moving this company and our projects to the points that they're at right now. And it's not recognized by the market but we know that it will and it will turn quickly when it does.
52:42 So I think if you're sitting here today, you know, I don't know who would be, you know, selling stock at 12 cents when you've got what we think justifiably at this gold price and Canadian dollar is more than $5 a share of net asset value in this company. And I think we're coming to a point where if there were any, you know, if there's any one thing that is going to change the public investor sentiment about this company, it is that environmental assessment approval. And we've talked about that already. There's a pretty clear path in terms of how we're gonna see that proceed.
53:30 I think it's a major, major undertaking, but at the same time, even if that is not recognized by the markets, I'm very confident that is something that gets recognized by the industry and that goes to open up other opportunities for us to fund and move Springpole forward And similarly, you know with DuParcay I We're certainly not getting rewarded for the quality of drill results that we have been putting out. I think when people see the breadth and quality of what those results are as we move into the new year, and the growth trajectory we can see on that asset.
54:23 It's really unique. It really is. And I'm 100% confident that DuParc in and of itself is worth multiples of our current market cap. So keeping the faith is, you know, I understand it's challenging and I say this to a lot of our shareholders, and I've been saying it for a long time, being right but early feels a lot like being wrong. And we've been right, but early for a long time. So everything else in the macro environment has gone away, I do think it is an inevitability that the value of these assets gets recognized in the share price or in the gold industry, one way or another.
55:16 And I think those major catalysts, I mean, you know, I would have said the weight was worth it when we were suggesting people invest in 2019 and 2020. And I think the weight's going to be worth it. I really do. I think what we have here are, you know, the types of multiples of share price return that you don't get to see very often. And I think on a on a risk adjusted basis, it's still an exceptional opportunity. And those catalysts, you know, from when I started in 2019, those catalysts, even if I thought they were 5 years out, turns out, you know, they were 7 years out. Today, they're 1 year out.
56:02 And so I think, you know, this is, this is a time when it's just a great opportunity to, I think, be accumulating a position at, you know, irrationally low levels. Because you can see a pretty clear path to how that value can get surfaced in the next, you know, certainly 12 to 24 months. Dan, thank you so much for doing this. Thank you everyone in attendance. If you did come in a little late, this is being recorded. Our team will have it up within the next couple of hours here. But happy holidays everyone. Dan, thank you so much. I hope you enjoy your Christmas and we'll be chatting again soon. Yeah, thanks Kylan. Thanks everyone for joining us and and as always we didn't get to your questions here today We'll forward them on to the great Paul Morris who will be in touch and following up and you'll know where to get Paul And all at first mining gold comm so much appreciated everyone Thanks very much and hope everyone gets time for a little bit of rest and relaxation and hopefully, you know, some quality time with friends and family and loved ones and We'll be back in front of you here, hopefully pretty early in 2025.
