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| With gold soaring and gold development plays far outpacing the metal itself, investors are scouring the sector for companies that have yet to make big moves.
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| They don’t have to look too hard to find First Mining Gold (FF.TO; FFMGF.OTC) as perhaps the best opportunity of them all, for these three reasons:
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| 1) More gold: No less than two five-million-ounce gold deposits...
2) Still cheap: Far undervalued compared to peers, but poised to move...
3) Yet ahead of the pack: Much further down the road to development
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| This is a weird metals and mining bull market, in that gold itself has far outpaced the mining stocks...and the equities are just beginning to catch up now.
That means that some premier opportunities have been temporarily overlooked.
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| As you’re about to see, First Mining Gold is still comparatively undervalued...yet has such a head start on other companies that it appears primed for a big re-rating at any time.
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| The story is quite remarkable....
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| Big Gold...Low Valuation
...Huge Head Start
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| The most obvious and exciting aspect of First Mining’s story is its tremendous, still underappreciated value.
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| Thanks to its Springpole gold project in Ontario and its Duparquet gold project in Quebec, First Mining owns no less than two, five-million-ounce-plus gold deposits.
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| Here’s the exciting part: Both projects offer compelling economics at the very conservative gold prices used in their economic studies — just $1,600/oz. for Springpole and $1,800/oz. for Duparquet.
As you well know, gold is hovering around $4,000/oz. right now!
At those lower gold prices, First Mining’s net asset value per share is around C$1.50 in its latest reports. The company hasn’t even estimated the economics of its projects at current gold prices...but others have.
In fact, one analyst recently provided these projections to his readers:
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- Springpole PFS at $3,700 gold and $40 silver gives it a NAV of US$4.6 billion or C$6.4 billion, or C$4.95/share
- Duparquet PEA at $3,700/oz gold equals a NAV of C$3.1 billion, or C$2.38/share
Add them up and First Mining’s assets have a NAVPS of C$7.33/share. And it’s currently trading below C$0.30.
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| Primed To Catch Up
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| As noted, First Mining has lagged most of its peers so far as the mining sector races to catch up with the amazing gains in gold.
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| But the degree of its undervaluation — and the scope of its potential catch-up — is what presents mouth-watering potential.
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| Consider just one metric, market value per ounce of gold resource. As you can see below, First Mining is still trading for just about $20 per ounce of gold — while other emerging developers are trading for nearly four times that level.
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| First Mining could multiply its market value/ounce of gold resource by seven times, just by continuing to advance its projects.
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| And simply by continuing to advance along the development curve as its doing (and doing better than others, as you’ll soon see), First Mining’s value per ounce of gold could explode by seven times or more by getting to just the average valuation of an advanced developer!
Using another metric of price/net asset value, you can also see the remarkable re-rating opportunity ahead....
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| On a standard price/net asset value basis, First Mining’s share price stands to multiply to get to industry averages.
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| First Mining’s price/NAV is currently only about one-fifth that of an advanced developer’s average.
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| What’s really interesting is that not only is First Mining Gold also severely undervalued on a price/net asset value basis...but that NAV should increase dramatically as the gold price continues to soar.
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| Which brings up the next exciting factor....
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| Extreme Leverage To Gold
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| For a window into the value First Mining Gold brings to the table, consider that its current market cap is only around US$260 million.
Then ponder the two charts below, which show the sensitivity analyses of Springpole’s January 2021 prefeasibility study and Duparquet’s September 2023 preliminary economic assessment.
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| Click image to enlarge
Even at base-case gold prices of $1,600/oz. and $1,800/oz., First Mining Gold’s two development-stage projects have combined, after-tax NPVs of almost US$1.6 billion.
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| At a gold price of just $2,000/oz. — only about half of the current gold price — Springpole alone has an after-tax NPV, discounted at 5%, of US$1.6 billion, or about six times First Mining’s entire current market value.
And all of this isn’t even considering the estimated value of Duparquet, which a PEA put at US$1.1 billion...four times First Mining’s entire market value...at a gold price of just $2,200!
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| What is that valuation going to be at tomorrow’s gold prices...or even today’s?
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| Again, we’re talking a vast, vast multiple of First Mining’s current market value.
And as you’re about to see, the company’s assets not only give it some of the premier development-stage assets in Canada, but they’re only going to get better.
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| Two Development Stage Projects Make
First Mining A Premier Take-Out Target
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| The value of First Mining’s two core projects is about more than just economic forecasts.
Springpole boasts a global gold inventory of 5.2 million ounces (4.9 million ounces indicated and 0.3 million ounces inferred). Duparquet hosts 6.0 million gold ounces (3.4 million indicated ounces and 2.6 million inferred ounces).
Better yet, both projects are near infrastructure and are located, respectively, within Ontario and Quebec, two of the most mining friendly jurisdictions on the planet.
For proof that multi-million-ounce gold projects in Canada have value to mid-tier and senior producers, take a look at the chart below of recent M&A activity on such projects.
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| Click image to enlarge
This chart of major gold project transactions in Canada since 2020 underscores the takeout potential for First Mining Gold.
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| Since 2020 alone, major gold deposits have traded hands for as much as C$2.2 billion (in the case of Gold Fields’ offer for the rest of the Windfall project and Osisko Mining it didn’t already own).
With two of the 10 developable, five-million-ounce+ gold projects in Canada, First Mining Gold is could get taken out at a considerable multiple of its current market cap and share price.
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| Plus:
Ahead Of The Pack Toward Development
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| Adding to Springpole’s allure is the fact that First Mining has already submitted an Environmental Impact Statement on the project, and it’s currently in the public comment phase.
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| Consider this: Springpole is the only development-stage, five-million-ounce deposit that is this far advanced in the permitting process.
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| The key environmental permitting process can take seven years or more for a gold project. With other projects barely beginning that process, this puts First Mining in a premier position once the major miners start looking for big acquisitions.
In the meantime, with a decision on the EIS expected within months, First Mining’s shares could quickly re-rate on a price to NAV basis from 0.12x currently to as much as 0.6x once the EIS is approved.
This is a huge catalyst that now lies just ahead.
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| And More:
Huge Exploration Upside At Duparquet
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| Better still, even a re-rating of that magnitude wouldn’t account for the good work First Mining is doing right now with the drill bit at Duparquet.
This gold project sits in the heart of the Abitibi Greenstone Belt — home to over 200 million ounces of gold production and counting.
The company has completed more than 16,000 meters of drilling at Duparquet so far, and the drills are still turning.
A key target is the exciting new Miroir target, where the company has just completed 20 drill holes across 4,450 meters.
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| The results have been extremely encouraging, with recently reported Hole 64 hitting 3.23 g/t gold over 25.9 meters.
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| With intersections like that and a cash position bolstered by recent raises of C$37 million, First Mining is set to grow Duparquet’s already world-class gold resource.
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| Time To Act In This Fast-Moving Gold Market
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| At current trading levels and given the current state of the gold market, First Mining Gold represents a phenomenal value.
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| But this laggard is set to become a leader in the days ahead as key catalysts — and a rollicking metals and mining market — could spark a major revaluation.
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| Add it all up, and you’ll want to start doing your homework on this multi-million-ounce, Canada-based gold story today.
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| CLICK HERE
To Learn More about First Mining Gold Corp.
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