In an interview with the Investing News Network (INN), CEO of First Mining Gold (TSX:FF) Jeff Swinoga cast doubt on any fears of “peak gold,” saying that a lack of major gold discoveries in the past few years was mainly because of majors divesting assets to lower debt.
“[There’s] been a lot of talk about peak gold, how we’re not going to find another large gold deposit…I’m not sure if that’s true, but what I do know is that we are running into a supply deficit,” said Swinoga.
He said that over the past few years major producers have been divesting assets and decreasing debt levels, which has resulted in a reduction in production profiles and exploration projects.
And now, “they’re having to mine lower grades going forward, which means that they’ve increased their costs, and what we’re seeing is with production falling off that there’s a lack of replenishment into their production profile.”
He said that his own company, First Mining Gold, with its portfolio of gold assets across North America, was well positioned to weather the dearth of new projects as the supply deficit sets in.
On peak gold, however, Swinoga said that he wasn’t so sure it was a thing at the moment, but it was coming.
“I’m not sure that we’re there now but I certainly see it on the horizon … if we don’t find anymore major gold deposits then we are going to get a supply deficit.”
He said that even if major discoveries were made today, the damage has been done as it will take too long to bring them into production.
“I think peak gold is coming up if we haven’t hit it already… we’ve got all these gold projects (so) I’m very happy that we’re not in that situation.”
Watch the full interview above, or scroll down and read the full transcript below.
INN: So, it’s day 2 of the symposium how do you feel about it so far?
Jeff Swinoga: I really like the forum, I really like the how they setup the format. It’s a great way to meet investors and talk about our projects and the large resource base that we have. So, I’m finding it a great venue to be quite honest.
INN: And yesterday you hosted a workshop that was a titled: “Mining road map: discovery to reclamation” What can you tell me about what you spoke about?
JS: Well, it’s a workshop format so what we did was we first talked about the company. We talked about our large and diversified portfolio of gold assets. Within there, we’ve got Springpole. Springpole is one of the largest undeveloped gold projects. It’s actually the largest in Ontario. So very significant, very large, very attractive, low cost as well. So, what we did is we did a teach-in about how we expect to develop Springpole over time. Just some of the metrics on Springpole, for example it’s got a 12-year mine life, 800 million after tax present value, over 26 percent IRR. It’s got a 300,000 per year production profile. A cost of about US$700 all in sustaining costs. So it’s large, attractive, it’s in Ontario, which is a 110 km east of the Red Lake mine, which is Goldcorp’s (TSX:G) company maker. So, we’re very happy to have it we’re going through an environmental assessment right now. We actually showed a video, it’s on our website if people want to see it but shows how we plan to develop over time and put it to reclamation. So, it was a great way to talk about some of the geology, how we found it, some of the history, talk about again the metrics and then how we plan to develop it. It was great.
INN: And how far away from operation do you think it is?
JS: Well, the road map we’re going to take about probably 2 years to go through the environmental assessment. We’re going to look at doing a pre-feasibility study early next year or into next year. We’re doing some metallurgical testing later this year and then we’re going again to permitting, constructions going to take up to a year. So, we see first gold in 5 years, which is pretty reasonable, it’s been drilled out, it’s already sizeable, I don’t think we need to drill much more like five million almost five million. It’s huge. So, the goal here is to de-risk it, focus on the work with the local communities, indigenous cultures, create engagement. So, in 5 years we’re going to have first gold. It’s going to be great.
INN: So, what have attendees at the symposium been asking you about?
JS: Well, it’s actually very interesting because I’ve got to tell you, not a lot of people know about Springpole. They don’t know how sizeable it is, we got questions about how we look to engage locals and indigenous cultures and I’ve had the opportunity to talk about how we want to step back and look at a holistic approach to this and how we do things in Ontario. Because not only that we have Springpole, again it’s almost five million ounces, but we’ve got three other projects in Ontario. We’ve got Goldline, we’ve got Cameron, we’ve got Pickle Crow. So, we look at how we want conduct ourselves going forward and how we want to create engagement and talk about future jobs and all the things that come with these great projects and how the vision is to become a very large gold-producing company in Canada. It’s good, great opportunity to talk about how we want to do that. We’ve got a values-based culture. We use these values for making decisions, for communication strategy and all that leads to is building long-term trust and that trust between government officials, shareholders, local community, indigenous and it’s great it’s been a really good format …read more
From:: Investing News Network