First Mining Gold (TSX:FF)- CEO Believes They Are a Standout in a Dwindling Field of Advanced Assets
Interview with Dan Wilton, CEO of First Mining Gold Corp.
Our previous interview:
Recording date: 28th of November, 2024
The gold mining sector presents what industry leaders describe as a “once in a generation” investment opportunity, particularly in the development space. While producing gold companies have seen their valuations soar, with gold prices maintaining levels well above $2,000 per ounce, development-stage companies with substantial resources remain significantly undervalued, creating a compelling entry point for investors.
At the heart of this opportunity lies a critical supply-demand imbalance. Major gold producers are facing dwindling reserves, typically holding only 7-8 years of production in reserve, while the timeline to bring new mines into production has nearly doubled to 19.8 years. This creates urgent pressure for producers to acquire advanced-stage projects, particularly those that have navigated significant portions of the permitting process.
First Mining Gold exemplifies this opportunity, controlling two projects exceeding 5 million ounces in premier Canadian jurisdictions – putting it in an elite group of only about 12 such projects globally that meet major mining companies’ acquisition criteria. The company’s Spring Pole project is among the most advanced large gold projects approaching environmental approval in Canada, with final approval targeted for the end of 2025.
The company has demonstrated strong financial management, raising $60 million through non-core asset sales over five years while minimizing shareholder dilution. Spring Pole’s economics are particularly attractive in the current gold price environment, with every $100 increase in gold price adding $250 million to the project’s after-tax NPV. The company’s second major asset, Duparquet, provides additional optionality through potential optimization and development scenarios.
Historical precedent suggests significant upside potential – similar-sized projects have typically been acquired or funded at valuations exceeding $500 million once receiving environmental assessment approvals. First Mining Gold’s current market valuation reflects the broader disconnect between producer and developer valuations, suggesting substantial room for value appreciation.
The investment thesis is strengthened by several key factors:
Strong gold price environment above $2,000/oz
Scarcity of large-scale projects in favorable jurisdictions
Strategic imperative for major producers to replace reserves
Advanced stage of permitting at Spring Pole
Demonstrated ability to raise non-dilutive capital
Multiple paths to value creation across two major assets
As First Mining’s CEO Dan Wilton notes, “We’re sitting today at a one in a generation discrepancy and dislocation between the value of producers and the value of developers, which is only going to get worse because the producers have by and large not been investing in increasing their own capacity.”
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It’s really heartbreaking to see how inflation and recession impact low-income families. The cost of living keeps rising, and many struggle just to meet basic needs, let alone save or invest. It’s a reminder of the importance of finding ways to create financial opportunities. You've helped me a lot sir Brian! Imagine i invested $50,000 and received $190,500 after 14 days
Exploration stocks gold and their assets in ground are cheap like chips until the majors buck up and pay the piper nearing environmental approval and production. Now the majors are drooling over cheap gold assets like Swiss cheese on Bratwurst.
Environmental permitting can be ran concurrent with other activities such as exploration but most companies probably don't have the money to allocate much in the early years which would delay them longer term. Water monitoring is most important to start early.
Saludos viejo ánimo
Problem for investors is that the sector is horribly unpredictable.
"Producers have done really well" – yet the two biggest producers (which would/will be the first port of call for many investors) are performing miserably price-wise. NEM's management in particular have been a disaster for investors – they have an exception talent at killing their own share price. Hours of amusement for AEM management.
"We all want takeovers – yeah, look at Osisko and Goldfields". Tell that to investors in Argonaut or Marathon, which were taken over at prices fractional to prior levels. If FM is taken now at a 5% premium, I don't think investors will be hugely happy.
With certain exceptions, expenditure in the current market has been a waste of time and money – in this instance, 5 years of resource and asset growth for FM, and the result has basically been a straight line down for those 5 years. Management was better off not diluting (C$100m shelf offering Dec 2023, I believe), not spending and instead taking a 24 month holiday at Butlins, Skegness. Missed opportunity – the big slide rocks, and after one year they could even have become Redcoats.
Dan Wilton is promoting the company for few years already, but the shares don't perform at all..
Much talks, but no actual results unfortunately
Good interview. Nice hard questions. Always a pleasure watching your videos
The price trend here is catastrophic