First Mining Gold Corp. [FF-TSX; FFMGF-OTCQX; FMG-FSE] on Wednesday January 20 announced positive results in a pre-feasibility study (PFS) at its 100%-owned Springpole Gold Project in northwestern Ontario. The PFS supports a 30,000 tonnes-per-day open pit mining operation over a 11.3-year mine life, the company said in a press release.
First Mining shares advanced on the news, rising 6.4% or $0.025 to 41.5 cents on volume of 2.1 million. The shares are currently trading in a 52-week range of 60 cents and 11.5 cents.
The Springpole Gold Project is one of the largest undeveloped open pit gold projects in North America. The project is located approximately 100 km northeast of Red Lake, and currently hosts an indicated gold resources of 4.6 million ounces. On top of that is an inferred resource of 300,000 ounces.
However, the PFS is based on a declaration of 3.8 million ounces of gold and 20.5 million ounces of silver in proven and probable reserves (121.6 million tonnes at 0.97 g/t gold and 5.23 g/t silver). The study foresees average annual life of mine production of 287,000 ounces of gold, including an average of 335,000 ounces during years one to nine.
The PFS also envisages an estimated initial capital cost of US$718 million, US$55 million in sustaining capital and US$29 million of closure costs.
The overall mine life is expected to be 11.3 years with primary mining and processing during the first nine years and processing of lower-grade stockpiles for the balance of the mine life. All-in-sustaining costs are estimated at US$577 per ounce in years one to nine and US$645 an ounce over the life of the mine.
“The PFS is an important milestone for the company as we continue to advance and de-risk the Springpole Gold Project,” said First Mining CEO Dan Wilton. “First Mining is declaring mineral reserves in for the first time ever on the Springpole Gold Project, reflecting the culmination of a year of detailed data collection, trade-off studies, and engineering and technical de-risking work done by First Mining and our partners on our project team,” said.
The PFS envisages that the access road may be completed prior to commencement of construction and is not part of the study.