Pre-Tax NPV5% of C$1.07 billion, After-Tax NPV5% of
C$588 million
Pre-Tax IRR
of 24.9%, After-Tax IRR of 18.0%
Average LOM Annual Gold
Production of 233 koz with AISC of US$976/oz over 11-year LOM
VANCOUVER, BC, Sept. 7,
2023 /PRNewswire/ - First Mining Gold Corp.
("First Mining" or the "Company") (TSX: FF) (OTCQX:
FFMGF) (FRANKFURT: FMG) is pleased to announce the positive results
of a Preliminary Economic Assessment ("PEA") completed for its
100%-owned Duparquet Gold Project (the "Project" or "Duparquet")
located in the Abitibi region of Quebec,
Canada. The PEA results support a 15,000 tonnes per day open
pit and underground mining operation over an 11-year mine life. The
PEA only considers the Duparquet gold deposit located on the
Beattie, Donchester, Central
Duparquet and Dumico claim blocks and does not include the
Pitt Gold and Duquesne deposits (see
Mineral Resource Estimate section).
PEA Highlights
- C$1.07 billion pre-tax
NPV5% and C$588 million
after-tax NPV5% at US$1,800/oz gold ("Au")
- 24.9% pre-tax IRR; 18.0% after-tax IRR at US$1,800/oz Au
- Annual Life-of-Mine ("LOM") recovered gold production of 233
koz
- Total LOM recovered gold of 2.5 Moz over an 11-year mine
life
- Pre-tax payback of 3.8 years; after-tax payback of 4.8
years
- Initial capital costs estimated at C$706
million; sustaining and underground development capital
costs estimated at C$738 million
- Average annual LOM Total Cash Cost of US$751/oz(1); average annual LOM
All-In Sustaining Costs ("AISC") of US$976/oz(2)
Note: Base case
parameters assume a gold price of US$1,800/oz and an exchange rate
(C$ to US$) of 1.33. All currencies are reported in Canadian
dollars unless otherwise specified. NPV calculated as of the
commencement of construction and excludes all pre-construction
costs.
|
(1)
|
Total Cash Costs
consist of mining costs, processing costs, mine-level G&A,
treatment and refining charges and royalties.
|
(2)
|
AISC includes total
cash costs plus sustaining capital, development capital and closure
costs.
|
"This PEA demonstrates the robust economic potential of the
Duparquet Gold Project," stated Dan
Wilton, CEO of First Mining. "The +200 koz per year
production profile, attractive capital and operating cost profile
and strategic location of the deposit in the heart of the Abitibi
gold belt all contribute to the recognition of Duparquet as one of the most meaningful
development projects in Canada. We
are also pleased to have completed such a robust PEA within a year
of consolidating the ownership of the Project. Importantly,
the Duparquet Gold Project represents a unique opportunity to
address the environmental legacy issues from the historic mining
operations while delivering an important economic development
opportunity for the local and Indigenous communities around the
Project. We look forward to continuing to work with regulators, the
Municipality of Duparquet and other local and Indigenous
communities to advance this parallel track of environmental
stewardship and economic development."
This PEA for the Duparquet Gold Project was prepared by G Mining
Services Inc. of Montreal, Quebec,
in accordance with National Instrument 43-101 Standards of
Disclosure for Mineral Projects ("NI 43-101"), and a technical
report for the PEA will be filed by the Company on SEDAR+ within 45
days of this news release.
PEA Overview
The Duparquet Gold Project, located in the Abitibi region of
Quebec, Canada, is one of the
largest undeveloped gold projects in North America. The Project is located
immediately north of the town of Duparquet which is approximately 50 kilometres
northwest of Rouyn-Noranda,
Quebec, a major mining service centre and home to the only
remaining copper smelter in Canada. Duparquet currently hosts 3.4 million ounces
of gold in the Indicated Mineral Resource category and 2.7 million
ounces of gold in the Inferred Mineral Resource category, as set
out in Table 5 in the Mineral Resource Estimate section.
The PEA evaluates recovery of gold from a 15,000 tonne-per-day
("tpd") open pit and underground mining operation, with a process
plant that includes crushing, grinding, and flotation, producing a
concentrate for sale.
Table 1: Key PEA Assumptions and Project Economics
(1)
Key
Assumptions
|
Unit
|
LOM
|
Gold Price
|
US$/oz
|
US$1,800/oz
|
Exchange
Rate
|
C$:US$
|
1.33
|
Production
Profile
|
Unit
|
LOM
|
Total Open Pit
Tonnage
|
Mt
|
282.0
|
Total Open Pit
Mineralized Material Mined
|
Mt
|
43.6
|
Open Pit Strip
Ratio
|
w:o
|
5.4
|
Total UG Mineralized
Material Mined
|
Mt
|
12.0
|
Total Tailings
Mineralized Material Mined
|
Mt
|
4.1
|
Total Tonnes
Processed
|
Mt
|
59.7
|
Daily
Throughput
|
tpd
|
15,000
|
Mill Grade
|
g/t Au
|
1.51
|
Mine Life
|
Years
|
11 years
|
Gold Recovery to
Concentrate
|
%
|
89.5 %
|
LOM Metal
Recovered
|
koz Au
|
2,595 koz Au
|
Average Annual
Recovered
|
koz Au
|
233 koz Au
|
Operating Costs
(US$/oz)
|
Unit
|
LOM
|
Total Cash Costs
(2)
|
US$/oz
|
$751
|
AISC
(3)
|
US$/oz
|
$976
|
Capital
Expenditures
|
Unit
|
LOM
|
Initial
Capital
|
C$M
|
C$706
|
Sustaining and
Development Capital
|
C$M
|
C$738
|
Closure
Costs
|
C$M
|
$30
|
Estimated Salvage
Value
|
C$M
|
($36)
|
Economics
|
Unit
|
LOM
|
NPV at 5% (pre-tax;
post-tax)
|
C$M
|
C$1,073;
C$588
|
IRR (pre-tax;
post-tax)
|
%
|
24.9%; 18.0%
|
Payback (pre-tax;
post-tax)
|
Years
|
3.8 years; 4.8
years
|
|
|
|
|
(1)
|
The reader is advised
that the PEA is preliminary in nature and is intended to provide
only an initial, high-level review of the Project potential and
design options. The PEA mine plan and economic model include
numerous assumptions and the use of Inferred mineral resources.
Inferred mineral resources are considered too speculative
geologically to have the economic considerations applied to them
that would enable them to be categorized as mineral reserves and to
be used in an economic analysis except as allowed for in PEA
studies. There is no guarantee that Inferred resources can be
converted to Indicated or Measured resources, and as such, there is
no certainty that the PEA or Project economics described herein
will be realized or achieved.
|
(2)
|
Total Cash costs
consist of mining costs, processing costs, mine-level G&A,
treatment and refining charges and royalties.
|
(3)
|
AISC includes total
cash costs plus sustaining capital, development capital and closure
costs.
|
Economic Sensitivities
The Project economics and cash flows are highly sensitive to
changes in the price of gold.
Table 2: PEA Sensitivity to Gold Price, Operating Costs and
Capital Costs
Sensitivity to Gold Price
Gold Price
(US$/oz)
|
$1,400
|
$1,600
|
$1,800
|
$2,000
|
$2,200
|
Pre-Tax
NPV5%
|
C$168
million
|
C$621
million
|
C$1.07
billion
|
C$1.53
billion
|
C$1.98
billion
|
Pre-Tax IRR
|
8.5 %
|
17.1 %
|
24.9 %
|
32.0 %
|
38.6 %
|
After-Tax
NPV5%
|
C$20 million
|
C$310
million
|
C$588
million
|
C$859
million
|
C$1.12
billion
|
After-Tax
IRR
|
5.5 %
|
12.1 %
|
18.0 %
|
23.2 %
|
28.0 %
|
Sensitivity to Initial Capital Costs
Initial Capital
Costs
|
+20 %
|
+10 %
|
C$706
million
|
-10 %
|
-20 %
|
Pre-Tax
NPV5%
|
C$814
million
|
C$949
million
|
C$1.07
billion
|
C$1.18
billion
|
C$1.28
billion
|
Pre-Tax IRR
|
16.7 %
|
20.4 %
|
24.9 %
|
30.5 %
|
37.8 %
|
After-Tax
NPV5%
|
C$413
million
|
C$503
million
|
C$588
million
|
C$661
million
|
C$723
million
|
After-Tax
IRR
|
12.0 %
|
14.7 %
|
18.0 %
|
21.9 %
|
26.9 %
|
Sensitivity to Operating Costs
Operating
Costs
|
+20 %
|
+10 %
|
C$2.2
billion
|
-10 %
|
-20 %
|
Pre-Tax
NPV5%
|
C$761
million
|
C$917
million
|
C$1.07
billion
|
C$1.23
billion
|
C$1.39
billion
|
Pre-Tax IRR
|
19.5 %
|
22.2 %
|
24.9 %
|
27.4 %
|
29.9 %
|
After-Tax
NPV5%
|
$398 million
|
$494 million
|
C$588
million
|
$680 million
|
$771 million
|
After-Tax
IRR
|
14.0 %
|
16.0 %
|
18.0 %
|
19.9 %
|
21.7 %
|
Mineral Resource
Estimate
In September 2022, the Duparquet
Gold Project Mineral Resource Estimate ("MRE") was updated by
InnovExplo Inc. in accordance with NI 43-101. (See news release of
September 12, 2022 for more details)
The Duparquet Gold Project contains 3.44 million ounces of gold in
the Measured & Indicated category, grading 1.55 g/t Au, and an
additional 1.6 million ounces of gold in the Inferred category,
grading 1.36 g/t Au (see Table 3).
In August 2023, new updated
Mineral Resource Estimates were completed on First Mining's 100%
owned Pitt Gold and Duquesne projects
and have added 1.05 million ounces of gold grading 2.32 g/t Au in
the Inferred category (see Table 4), which will now form part of
the larger consolidated Duparquet Gold Project.
Following the updated Mineral Resource Estimate at Pitt Gold and
Duquesne, the consolidated Duparquet
Project now contains 3.44 million ounces of gold in the
Measured & Indicated category, grading 1.55 g/t Au, and an
additional 2.68 million ounces of gold in the Inferred category,
grading 1.68 g/t Au.
Table 3: Duparquet Deposit Mineral Resource Estimate
(Effective September 12,
2022)
Area
(mining
method)
|
Cut-off
(g/t)
|
Measured
resource
|
Indicated
resource
|
Inferred
resource
|
|
Tonnage
(t)
|
Au
(g/t)
|
Ounces
|
Tonnage
(t)
|
Au
(g/t)
|
Ounces
|
Tonnage
(t)
|
Au
(g/t)
|
Ounces
|
|
|
|
|
Potential
Open Pit
|
0.40
|
163,700
|
1.37
|
7,200
|
59,410,600
|
1.52
|
2,909,600
|
28,333,000
|
1.07
|
970,400
|
|
Potential
UG Mining
|
1.50
|
-
|
-
|
-
|
5,506,900
|
2.26
|
399,300
|
9,038,900
|
2.29
|
665,600
|
|
Tailings
|
0.40
|
19,900
|
2.03
|
1,300
|
4,105,200
|
0.93
|
123,200
|
-
|
-
|
-
|
|
Total
|
|
183,600
|
1.43
|
8,500
|
69,022,700
|
1.55
|
3,432,100
|
37,371,900
|
1.36
|
1,636,000
|
|
Table 4: Pitt Gold and Duquesne Deposits Mineral Resource
Estimate (Effective August 31,
2023) (not included in the PEA)
Area
(mining
method)
|
Cut-off
(g/t)
|
Pitt Gold Inferred
Resource
|
Duquesne Inferred
resource
|
|
Tonnage
(t)
|
Au
(g/t)
|
Ounces
|
Tonnage
(t)
|
Au
(g/t)
|
Ounces
|
|
|
|
|
Potential
Open Pit
|
0.50
|
-
|
-
|
-
|
6,300,000
|
1.56
|
316,000
|
|
Potential
UG Mining
|
1.75
|
2,691,000
|
2.67
|
231,200
|
5,030,000
|
3.10
|
501,400
|
|
Total
|
|
2,691,000
|
2.67
|
231,200
|
11,330,000
|
2.24
|
817,400
|
|
Table 5: Duparquet Gold Project Consolidated Mineral Resource
Estimate (Effective August 31,
2023)*
Area
|
Total Measured
Resource
|
Total Indicated
Resource
|
Total Inferred
Resource
|
(mining
method)
|
Tonnage
(t)
|
Au
|
Ounces
|
Tonnage
(t)
|
Au
|
Ounces
|
Tonnage
(t)
|
Au
|
Ounces
|
|
(g/t)
|
(g/t)
|
(g/t)
|
Potential
Open Pit
|
163,700
|
1.37
|
7,200
|
59,410,600
|
1.52
|
2,909,600
|
34,633,000
|
1.16
|
1,286,400
|
Potential
UG Mining
|
-
|
-
|
-
|
5,506,900
|
2.26
|
399,300
|
16,759,900
|
2.59
|
1,398,200
|
Tailings
|
19,900
|
2.03
|
1,300
|
4,105,200
|
0.93
|
123,200
|
-
|
-
|
-
|
Total
|
183,600
|
1.43
|
8,500
|
69,022,700
|
1.55
|
3,432,100
|
51,392,900
|
1.62
|
2,684,600
|
*Refer to respective
deposit resource estimate table for cut-off grade
|
Notes to accompany the Duparquet Gold Project Mineral Resource
Estimates:
1.
|
The independent
qualified persons for the Duparquet mineral resource estimate, as
defined by NI 43-101, are Marina Iund, P.Geo., Carl Pelletier,
P.Geo. and Simon Boudreau, P.Eng. from InnovExplo. The effective
date of the estimate is September 12, 2022.
|
2.
|
The independent
qualified persons for the Pitt Gold and Duquesne mineral resource
estimates, as defined by NI 43 101, are Olivier Vadnais-Leblanc,
P.Geo., Carl Pelletier, P.Geo., and Simon Boudreau, P.Eng. from
InnovExplo. The effective date of the estimate is August 31,
2023.
|
3.
|
These mineral resources
are not mineral reserves, as they do not have demonstrated economic
viability. There is currently insufficient data to define these
Inferred mineral resources as Indicated or Measured mineral
resources and it is uncertain if further exploration will result in
upgrading them to an Indicated or Measured mineral resource
category. The mineral resource estimate follows current CIM
Definition Standards.
|
4.
|
The results are
presented in situ and undiluted and have reasonable prospects of
eventual economical extraction.
|
5.
|
In-pit and Underground
estimates encompass sixty (60) mineralized domains and one dilution
envelop using the grade of the adjacent material when assayed or a
value of zero when not assayed; The tailings estimate encompass
four (4) zones.
|
6.
|
Duparquet: In-pit and
Underground: High-grade capping of 25 g/t Au; Tailings: High-grade
capping of 13.0 g/t Au for Zone 1, 3.5 g/t Au for Zone 2, 1.7 g/t
Au for Zone 3 and 2.2 g/t Au for Zone 4. High-grade capping
supported by statistical analysis was done on raw assay data before
compositing.
|
7.
|
Pitt Gold: Underground:
High-grade capping of 20 g/t Au. High-grade capping supported by
statistical analysis was done on composited assays.
|
8.
|
Duquesne: In-pit and
Underground: High-grade capping of 55 g/t Au. High-grade capping
supported by statistical analysis was done on composited
assays.
|
9.
|
In-pit and Underground:
For Duparquet, the estimate used a sub-block model in GEOVIA SURPAC
2021 with a unit block size of 5m x 5m x 5m and a minimum block
size of 1.25m x 1.25m x1.25m. For Pitt Gold and Duquesne, the
estimates used a sub-block model in GEOVIA SURPAC 2023 with a unit
block size of 6m x 6m x 6m and a minimum block size of 1.5m x 0.5m
x0.5m. Grade interpolations were obtained by ID2 using hard
boundaries. Duparquet Tailings: The estimate used a block model in
GEOVIA GEMS with a block size of 5m x 5m x 1m. Grade interpolation
was obtained by ID2 using hard boundaries.
|
10.
|
In-pit and Underground:
For Duparquet, a density value of 2.73 g/cm3 was used for the
mineralized domains and the envelope. For Pitt Gold and Duquesne, a
density value of 2.7 g/cm3 was used for the mineralized domains and
the envelope. A density value of 2.00 g/cm3 was used for the
overburden. A density value of 1.00 g/cm3 was used for the
excavation solids (drifts and stopes) assumed to be filled with
water. Tailings: A fixed density of 1.45 g/cm3 was used in zones
and waste.
|
11.
|
In-pit and Underground:
For Duparquet, the mineral resource estimate is classified as
Measured, Indicated and Inferred. The measured category is defined
by blocks having a volume of at least 25% within an envelope built
at a distance of 10 m around existing channel samples. The
Indicated category is defined by blocks meeting at least one (1) of
the following conditions: Blocks falling within a 15-m buffer
surrounding existing stopes and/or blocks for which the average
distance to composites is less than 45 m. A clipping polygon was
generated to constrain Indicated resources for each of the sixty
(60) mineralized domains. Only the blocks for which reasonable
geological and grade continuity have been demonstrated were
selected. All remaining interpolated blocks were classified as
Inferred resources. Blocks interpolated in the envelope were all
classified as Inferred resources. Tailings: The Measured and
Indicated categories were defined based on the drill hole spacing
(Measured: Zones 1 and 2 = 30m x 30m grid; Indicated: Zone 3 = 100m
x 100m grid and Zone 4 = 200m x 200m grid). For Pitt Gold and
Duquesne, the mineral resource estimate are completely classified
as Inferred due to a lack of confidence in certain drill hole
collar and underground development locations.
|
12.
|
The Mineral Resource
Estimate for Duquesne and Pitt Gold was prepared using 3D block
modelling and the inverse distance squared ("ID2") interpolation
method.
|
13.
|
The mineral resources
are categorized as Inferred based on drill spacing, as well as
geological and grade continuity. A maximum distance to the closest
composite of 75 m for Inferred in all zones for Duquesne of 210 m
for Inferred in all zones for Pitt Gold.
|
14.
|
The reasonable prospect
for an eventual economical extraction is met by having used
reasonable cut-off grades both for a potential open pit and
underground extraction scenarios (minimum mining width of 2m) and
constraining volumes (Deswik optimized shapes and Whittle optimized
pit-shells).
|
15.
|
In-pit and Underground:
The mineral resource estimate is locally pit-constrained with a
bedrock slope angle of 50° and an overburden slope angle of 30°.
The out-pit mineral resource met the reasonable prospect for
eventual economic extraction by having constraining volumes applied
to any blocks (potential underground extraction scenario) using
DSO. Duparquet resources is reported at a rounded cut-off grade of
0.4 g/t Au (in-pit and tailings) and 1.5 g/t Au (UG). The cut-off
grades were calculated using the following parameters: mining cost
= CA$70.00 (UG); processing cost = CA$11.9 (tailing) to CA$17.0
(pit& UG); G&A = CA$8.75; refining and selling costs = CA$
5.00; gold price = US$ 1,650/oz; USD:CAD exchange rate = 1.31; and
mill recovery = 93.9%. The cut-off grades should be re-evaluated in
light of future prevailing market conditions (metal prices,
exchange rates, mining costs etc.). Duquesne resources are reported
at a rounded cut-off grade of 0.5 g/t Au (in-pit) and Pitt Gold and
Duquesne resources are reported at a rounded cut-off grade of 1.75
g/t Au (UG). The cut-off grades were calculated using the following
parameters: mining cost = CA$84.86 (UG); processing cost =
CA$21.010; G&A = CA$11.75; refining and selling costs = CA$
5.00; gold price = US$ 1,800/oz; USD:CAD exchange rate = 1.3; and
mill recovery = 90%. The cut-off grades should be re-evaluated in
light of future prevailing market conditions (metal prices,
exchange rates, mining costs etc.).
|
16.
|
The number of metric
tons was rounded to the nearest thousand and ounces were rounded to
the nearest hundred, following the recommendations in NI 43 101.
Any discrepancies in the totals are due to rounding
effects.
|
17.
|
The qualified persons
are not aware of any known environmental, permitting, legal,
title-related, taxation, socio-political, or marketing issues, or
any other relevant issue not reported herein, that could materially
affect the Mineral Resource Estimate.
|
The database used for the Duparquet MRE contains 904 holes
totalling 270,119m and 173,831
sampled intervals. The resource area has an E-W strike length
of 4.5 km, a width of approximately 1 km, and a vertical extent of
1,050 m below surface. A total of 60
mineralized zones wireframes have been created for the
Duparquet deposit.
The database used for the Duquesne MRE contains 1,011
underground drill holes for a total of 51,957.43m and 393 surface Diamond Drill Holes
("DDH") totaling 103,888.19m.
The DDH intervals used for the interpretation contain 66,411
assays taken from the 1404 drill holes and surface channels
(71,034.71m of core). A total of 389
mineralized zones wireframes have been created for the Duquesne deposit. Mineralized zones average
thickness in the deposit varies between 0.69
m and 4.28 m with an
interpreted average thickness of 1.89
m.
The database used for the Pitt Gold MRE contains 163 surface
diamond drill holes totaling 70,364.67m. A total of 119 mineralized
zones wireframes have been created for the Pitt Gold deposit.
Mineralized zones average thickness in the deposit varies between
0.71 m and 3.03 m with an interpreted average thickness of
1.56 m.
Capital Costs
The capital cost estimate for the proposed open pit operation in
the PEA is based on the scheduled plant throughput rates, as well
as a review of similar sized open pit gold operations.
Table 6: Capital Cost Details
Total Capital
Cost
|
C$M
|
Infrastructure
|
$10
|
Power &
Electrical
|
$15
|
Water
|
$37
|
Surface
Operations
|
$5
|
Mining
|
$102
|
Process
Plant
|
$190
|
Indirect
|
$90
|
Owner's Cost
|
$54
|
Construction
cost
|
$503
|
Contingency
|
$126
|
Pre-Production
|
$57
|
Working
Capital
|
$20
|
Initial
Capital
|
$706
|
Sustaining and
Development Capital
|
$738
|
Closure
Costs
|
$30
|
Salvage
Value
|
($36)
|
Total
Capital
|
$1,438
|
Mining Capital Costs
The open pit mining activities for the Project were assumed to
be undertaken by an equipment financed fleet. Mining capital costs
were estimated based on a detailed equipment schedule matched to
the mining production schedule. Total initial mining capital was
estimated at C$102 million, inclusive
of capitalized stripping, and equipment. The capital expenditure
for the underground, which starts at year 1 of open pit operations,
is $404 million of which C$255 million is attributed to mine
development.
Processing Capital Costs
The process plant was designed using conventional processing
unit operations. It will nominally treat 15,000 tpd or 679 dry
tonne/hour based on 92% availability. The primary crushing plant
design is based on 75% availability. The plant will operate two
shifts per day, 365 days per year, and will produce a high-grade
gold concentrate for sale to smelters.
Initial capital costs for the processing facility were estimated
to be C$190 million, excluding
contingency. No major plant re-build or expansion was considered
during the LOM, with sustaining capital set to maintain the
equipment in operating condition.
Operating Costs
Table 7: Operating Cost Details
Operating Costs per
Tonne
|
Unit
|
LOM
|
Mining Costs – OP (inc.
historic tailings)
|
C$/t mined
|
C$3.16
|
Mining Costs – OP (inc.
historic tailings)
|
C$/t
processed
|
C$20.85
|
Mining Costs –
UG
|
C$/t
processed
|
C$44.26
|
Processing
Costs
|
C$/t
processed
|
C$10.59
|
G&A
Costs
|
C$/t
processed
|
C$2.90
|
Total Operating
Costs
|
C$/t
processed
|
C$78.60
|
Other
Costs
|
|
LOM
|
Transport
Costs
|
C$/t
|
$30
|
Treatment
Charges
|
C$/dmt
|
$75
|
Refining
Charges
|
US$/oz
|
$5
|
Mining Costs
The PEA contemplates open pit and underground mining undertaken
by an equipment financed fleet. An average unit mining cost of
C$3.16 per tonne of material mined
from the open pit was used in the economics. The cost estimate was
built from first principles with detailed haulage profiles, and is
based on experience of similar sized open pit operations and local
conditions. The open pit mining costs consider variations in
haulage profiles by month and by year and variable equipment
requirements necessary to meet the plant production.
Underground mining cost was also estimated using first
principles with supplier's quotations for equipment, consumables,
contractor work, and is based on experience with underground
operations with similar size and environment. The underground
mining costs of $44.26 per tonne of
mineralized material mined from underground includes $2,257 per metre of OPEX development. A
sustaining development cost of $16.64
per tonne is required to maintain production which is excluded from
the operation costs.
Processing Costs
An average cost of C$10.59 per
tonne of processed material was used in the PEA, based on the
selected process flowsheet. This includes tailings handling,
labour, consumables, maintenance, and supplies. A power cost of
C$0.0524/kWh was assumed.
Mining
Open pit mining would occur in year one concurrent with
underground development. Over the LOM, the open pit will
deliver an average of 10,400 tpd of mineralized material to the
mill. The annual peak of mineralized material delivered to the mill
is 12,670 tpd in year 8. Underground production is expected to
begin in year two with an average underground production rate of
3,500 tpd. Over an 11-year mine life, A total of 59.7 Mt of
mineralized material (including pre-production) will be mined,
which includes 4.1 Mt of historical tailings. The current LOM
plan focuses on achieving consistent processing feed production
rates, mining of higher-grade material early in the schedule, and
balancing grade and strip ratios.
Mining Methods
The Duparquet Project is planned as a mix of conventional open
pit mine and a long hole (transversal – longitudinal – uppers)
underground mine.
Open pit mining will be done with the use of diesel equipment
including drilling rigs and haul trucks coupled with hydraulic
shovels. The Project consists of seven (7) pits with Pit 1 having
three (3) phases. The LOM will last for 11 years including a
pre-production and construction period where waste will be mined
for construction purposes (dams, roads, etc.) and mineralized
material will be stockpiled ahead of the process plant
commissioning.
Production drilling and mining operations will take place on a
10 m bench height. The primary
production equipment includes 12m³ diesel-hydraulic shovel coupled
with 65 tonnes Drammis trucks for the mineralized material and 22m³
diesel-hydraulic production shovels coupled with 200 tonnes off
highway mining trucks for the waste. An owner mining operation is
planned with overburden stripping, topographic drilling activities,
and supply of explosives outsourced to contractors.
For the underground mine, long hole stopping, both transverse
and longitudinal with cemented rockfill ("CRF") is the preferred
mining method. Mineralized material will be removed from the stopes
using a high production sized load-haul-dump ("LHD"). The
underground mine's main declines will be accessible from surface
through a single portal located north of the site.
In addition to the open pit and underground mines, a portion of
the historical tailings will be transported and processed at the
mill. A maximum of 750,000 t of material will be processed
yearly.
Metallurgical Testing
The PEA reflects gold recoveries that were a result of the
extensive metallurgical test work completed by Clifton Star
Resources Inc. ("Clifton Star") during 2012 to 2014. The test work
involved several rounds of bench scale and pilot plant testing of
flotation concentration. In addition, Clifton Star completed extensive metallurgical
test work on follow-on processing to treat the sulfide concentrates
with fine grinding and alkaline leaching, bio-oxidation, and
pressure oxidation but was not included in the PEA flowsheet.
Based on the test work carried out and trade-off studies
conducted as part of the PEA, the Project was scoped with a
flowsheet that includes comminution circuit and rougher and cleaner
flotation to produce a high-grade gold concentrate for sale.
This flowsheet is based on a primary grind size of 80% passing
("P80") of 150 microns ("µm") ahead of flotation. The
gold recoveries to the flotation concentrate expected and used for
the economics presented in the PEA are 89.5% to a concentrate
grading approximately 36 g/t Au. First Mining plans to undertake
follow-up metallurgical test work to investigate additional
opportunities to further increase recoveries and believes that this
remains an important focus area for further improving the economics
of the Project.
Processing
The preliminary process plant design for the Duparquet Project
is based on a robust metallurgical flowsheet to treat gold bearing
material to produce gold concentrate. The flowsheet is based on
previous metallurgical test work by Clifton
Star, industry standards and conventional unit
operations.
The process plant is designed to nominally treat 15,000 tpd of
mineralized material and reprocessing of existing tailings. The
flowsheet will consist of primary crushing, SAG and ball mill
grinding, rougher and cleaner gold flotation circuits, concentrate
dewatering and load out facilities. Flotation tailings will be
dewatered in a thickener to produce a tailings slurry for storage
onsite. The process plant will include reagents, air systems and
utilities to support the operation.
Figure 1 represents the overall flowsheet for the Duparquet Gold
Project.
Site Infrastructure
The Project is located immediately north of the town of
Duparquet with much of the site
infrastructure optimized to utilize existing infrastructure within
the town of Duparquet. No camp is
planned on site and the administrative offices, the light vehicle
truck shop and warehouse, among others are considered off site. The
operation buildings, which will include the security office,
offices for technical personnel, the conference rooms, a change
room, an infirmary and a lunchroom, will be located at site
entrance. An on-site temporary workshop is included in the initial
capital with the permanent truck shop planned in year 4. The assay
lab, the fuel storage (200,000 litres) and the explosive
magazine among other essential infrastructure are also considered
on site.
The infrastructure and process plant platform will be located on
the north side of the pits. The waste rock stockpiles will be
located on each side of the pits. A haul road is planned to connect
the pits to the waste stockpiles, overburden stockpiles, process
plant and Tailings Storage Facility.
Tailings Storage
Facility
The Tailings Storage Facility ("TSF") design will take advantage
of the existing topographic and ground conditions in the eastern
part of the Project site. The TSF will provide enough capacity for
34.5 million cubic meters of tailings. A tailings deposit basin
will be created by building a main dam at the downstream end of the
valley and the tailings dams will be constructed in phases to
minimize the initial capital. The process plant tailings will
be pumped to the TSF through a 4 km pipeline and will be
thickened prior to deposition. The reclaim water system will
consist of a reclaim barge equipped with two reclaim water
pumps.
Power Infrastructure
Approximately 22.7MW of electrical demand will be supplied via a
new 120 kV overhead transmission line, built to connect to the
provincial grid's 120 kV line approximately 15 km to the southeast
in Reneault Hydro-Québec substation. Main distribution network is
made at 13.8 kV from the main substation where two (2) fully
redundant power transformers are installed. Distribution to the
equipment is made at 4.16 kV and 600V.
Environment &
Community
The PEA has considered and incorporated the opportunity to
leverage the Duparquet Gold Project development with the
reclamation of the brownfield site conditions including the removal
and reprocessing of over 4.1 Mt of uncontained historical mine
tailings. With such measures incorporated into the PEA mine plan,
in combination with the ability of the Project to collect and treat
historically impacted groundwater via the excavation and dewatering
of the open pit, the Project is positioned to deliver both
environmental benefits and socio-economic benefits via employment,
contracting and revenue for the Municipality of Duparquet. The PEA is anticipated to be
refined and optimized based on consultation and input to be
received by government, the Municipality of Duparquet and
other local and regional stakeholders, and local First Nation
community.
Since acquiring the Duparquet Gold Project in September of 2022,
First Mining has prioritized meeting the people, communities and
government representatives on project planning in an open and
transparent manner. First Mining published the Mines d'Or Duparquet
website to share project information and has recently finished
renovations required to open a First Mining community relations
office in Duparquet. The Project
provides an opportunity to address historical environmental aspects
at the Project site to improve long-term sustainability, economic
activity and support sustainable municipal planning and
development.
The Municipality of Duparquet
is in the Abitibi-Témiscamingue region which has been shaped
primarily by natural resource-based industries, including mining,
and forestry, where the mining industry accounts for 1 in 7 jobs in
the region.
Project Enhancement
Opportunities
The PEA identified several opportunities to enhance the
economics of the Duparquet Gold Project and will be investigated as
First Mining continues to advance the Project. These opportunities
include:
- Exploration Drilling – opportunity to expand the
resource with drilling regionally along 19 km of First Mining's
property over the Destor-Porcupine
fault zone; First Mining is in the process of completing an initial
5,000 metre drill program at the Project and intends to start a
Phase II drill program later in 2023
- Infill Drilling – opportunity to expand the resource and
increase the grade profile at the Project
- Silver Mineralization – opportunity to incorporate
silver mineralization into the economics; the PEA does not
contemplate any payable silver ounces
- Additional Technical Studies – opportunity to optimize
project economics by reducing sustaining capital, development
capital and operating costs
- Incorporating New Mineral Resource – opportunity to
improve project economics by incorporating new mineral resource
estimates into the mine plan from nearby Pitt and Duquesne deposits, which form part of the larger
Duparquet Gold Project
- Regional Consolidation – opportunity to consolidate
refractory deposits in the region to create a central processing
facility to treat feed from other regional mines
- Test work on Historical Tailings – opportunity to
optimize the blending of the old tailings through the process with
additional test work
- Metallurgical Test work – opportunity to improve
metallurgical recoveries and concentrate grade with additional
metallurgical test work
- Water Management – opportunity to optimize water
treatment and services estimate with additional studies
- Tailings – opportunity to optimize tailings and design
and cost estimates with additional studies
- Infrastructure – opportunity to optimize town
infrastructure in project design
Qualified Persons and NI 43-101
Technical Report
The PEA for the Duparquet Gold Project summarized in this news
release was prepared by G Mining Services Inc. and will be
incorporated in a NI 43-101 technical report which will be
available under the Company's SEDAR profile at www.sedarplus.ca ,
and on the Company's website, within 45 days of this news release.
The affiliation and areas of responsibility for each of the
Qualified Persons involved in preparing the PEA, upon which the
technical report will be based, are as follows:
Table 7: Qualified Persons for PEA NI 43-101
Qualified
Persons
|
Company
|
Area of
Expertise
|
Carl Michaud,
P.Eng.
|
G Mining Services
Inc.
|
Operating Cost
Estimation, Economic Analysis
and Mine Engineering
|
Alexandre Dorval, P.
Eng.
|
G Mining Services
Inc.
|
Open pit Mine
Engineering
|
Marina Iund.
P.Geo.
|
InnovExplo
Inc.
|
Duparquet
MRE
|
Olivier
Vadnais-Leblanc, P.Geo.
|
InnovExplo
Inc.
|
Duquesne and Pitt Gold
MRE
|
Carl Pelletier.
P.Geo.
|
InnovExplo
Inc.
|
Duparquet, Duquesne and
Pitt Gold MRE
|
Simon Boudreau, P.
Eng.
|
InnovExplo
Inc.
|
Duparquet, Duquesne and
Pitt Gold MRE
|
Neil Lincoln, P.
Eng.
|
G Mining Services
Inc.
|
Mineral Processing and
Recovery Methods
|
Philip Rodrigue, P.
Eng.
|
G Mining Services
Inc.
|
Infrastructure and
Capital Cost Estimation
|
Sheldon Smith MES, P.
Geo
|
Stantec Consulting
Ltd.
|
Environmental and
Permitting
|
Each QP has reviewed and approved the content of this news
release.
The Company cautions that the results of the PEA are preliminary
in nature and include 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. There is no certainty that the
results of the PEA will be realized.
Data Verification
The Qualified Persons responsible for the preparation of the PEA
and the technical report in respect thereof have verified the data
disclosed in this news release, including sampling, analytical, and
test data underlying the information contained in this news
release. Geological, mine engineering and metallurgical reviews
included, among other things, reviewing mapping, core logs, and
re-logging existing drill holes, review of geotechnical and
hydrological studies, environmental and community factors, the
development of the life of mine plan, capital and operating costs,
transportation, taxation and royalties, and review of existing
metallurgical test work. In the opinion of the Qualified Persons,
the data, assumptions, and parameters used to estimate Mineral
Resources and Mineral Reserves, the metallurgical model, the
economic analysis, and the PEA are sufficiently reliable for those
purposes. The technical report in respect of the PEA, when filed,
will contain more detailed information concerning individual
responsibilities, associated quality assurance and quality control,
and other data verification matters, and the key assumptions,
parameters and methods used by the Company.
Non-IFRS Financial
Measures
The Company has included certain non-IFRS financial measures in
this news release, such as Initial Capital Costs, Total Cash Costs
and All-In Sustaining Costs, which are not measures recognized
under IFRS and do not have a standardized meaning prescribed by
IFRS. As a result, these measures may not be comparable to similar
measures reported by other companies. Each of these measures used
are intended to provide additional information to the user and
should not be considered in isolation or as a substitute for
measures prepared in accordance with IFRS.
Certain Non-IFRS financial measures used in this news release
and common to the gold mining industry are defined below.
Total Cash Costs and Total Cash Costs per Gold Ounce
Total Cash Costs are reflective of the cost of production. Total
Cash Costs reported in the PEA include mining costs, processing,
water & waste management costs, on-site general &
administrative costs, treatment & refining costs, royalties and
silver stream credits. Total Cash Costs per Ounce is calculated as
Total Cash Costs divided by total LOM recovered gold ounces.
All-in Sustaining Costs ("AISC") and AISC per Gold
Ounce
AISC is reflective of all of the expenditures that are required
to produce an ounce of gold from operations. AISC reported in the
PEA includes Total Cash Costs, sustaining capital and closure
costs. AISC per Ounce is calculated as AISC divided by total LOM
recovered gold ounces.
Qualified Persons
Mr. Louis Martin P.Geo., (OGQ
0364), a consultant of First Mining, is a "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 Gold
Corp.
First Mining is a gold developer advancing two of the largest
gold projects in Canada, the
Springpole Gold Project in northwestern Ontario, where we have commenced a Feasibility
Study and permitting activities are on-going with a draft
Environmental Impact Statement ("EIS") for the project published in
June 2022, and the Duparquet Project
in Quebec, a PEA stage development
project located on the Destor-Porcupine Fault Zone in the prolific
Abitibi region. First Mining also owns the Cameron Gold Project in
Ontario and a portfolio of gold
project interests including the Pickle Crow Gold Project
(being advanced in partnership with Auteco Minerals
Ltd.), the Hope Brook Gold Project (being advanced in
partnership with Big Ridge Gold Corp.), and a large equity interest
in Treasury Metals Inc.
First Mining was established in 2015 by Mr. Keith Neumeyer, founding President and CEO of
First Majestic Silver Corp.
ON BEHALF OF FIRST MINING GOLD CORP.
Daniel W. Wilton
Chief Executive Officer and Director
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", "opportunities",
"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 expression Forward-looking statements in
this news release include, but are not limited to, statements with
respect to: (i) the results of the PEA; (ii) the economic potential
and merits of the Project; (iii) the estimated amount and grade of
Mineral Resources at the Project; (iv) the PEA representing a
viable development option for the Project; (v) construction of a
mine at the Project; (vi) the Project being one of the most
meaningful development projects in Canada; (vii) estimates of capital and
operating costs; (viii) the estimated amount of future production
from the Project (ix) life of mine estimates and economic returns
from the Project; * environmental benefits of the Project; (xi)
Project enhancement opportunities; and (xii) timing of filing a
technical report for the PEA on SEDAR+.
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. 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. There
can be no assurance that such statements will prove to be accurate,
and actual results and future events could differ materially from
those anticipated in such statements. Forward-looking statements
reflect the beliefs, opinions and projections on the date the
statements are made and are based upon a number of assumptions and
estimates that, while considered reasonable by the respective
parties, are inherently subject to significant business, economic,
competitive, political and social uncertainties and contingencies.
Such factors include, without limitation the Company's business,
operations and financial condition potentially being materially
adversely affected by the outbreak of epidemics, pandemics or other
health crises, such as COVID-19, and by reactions by government and
private actors to such outbreaks; risks to employee health and
safety as a result of the outbreak of epidemics, pandemics or other
health crises, such as COVID-19, that may result in a slowdown or
temporary suspension of operations at some or all of the Company's
mineral properties as well as its head office; fluctuations in
the spot and forward price of gold, silver, base metals or certain
other commodities; fluctuations in the currency markets (such as
the Canadian dollar versus the U.S. dollar); changes in national
and local government, legislation, taxation, controls, regulations
and political or economic developments; risks and hazards
associated with the business of mineral exploration, development
and mining (including environmental hazards, industrial accidents,
unusual or unexpected formations, pressures, cave-ins and
flooding); the presence of laws and regulations that may impose
restrictions on mining; employee relations; relationships with and
claims by local communities, indigenous populations and other
stakeholders; availability and increasing costs associated with
mining inputs and labour; the speculative nature of mineral
exploration and development; title to properties; and the
additional risks described in the Company's Annual Information Form
for the year ended December 31, 2022
filed with the Canadian securities regulatory authorities under the
Company's SEDAR+ profile at www.sedarplus.ca, and in the
Company'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
The Company is a "foreign private issuer" as defined in Rule
3b-4 under the United States
Securities Exchange Act of 1934, as amended, and is eligible to
rely upon the Canada-U.S. Multi-Jurisdictional Disclosure System,
and is therefore permitted to prepare the technical information
contained herein in accordance with the requirements of the
securities laws in effect in Canada, which differ from the requirements of
the securities laws currently in effect in the United States. 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.
Technical disclosure contained in this news release has not
been prepared in accordance with the requirements of United States securities laws and uses terms
that comply with reporting standards in Canada with certain estimates prepared in
accordance with NI 43-101.
NI 43-101 is a rule developed by the Canadian Securities
Administrators that establishes standards for all public disclosure
an issuer makes of scientific and technical information concerning
the issuer's material mineral projects.
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SOURCE First Mining Gold Corp.