Yes, I actually follow Felix Zulauf quite a bit myself since he has been more or less spot on with market developments in the last few years. He has been calling for 2500 gold this year, but he has also been anticipating a dip first in gold before we reach those levels. I also expect at least a minor correction here soon in Q2 because we are getting very overbought short term, but this is a temporary thing no doubt. If this dip comes and mining shares will not make new lows then I'm 100% confident we have bottomed out. The next leg up to new highs in gold will give the final spark to this sector in my opinion and bring in big money. My own estimate for this year is that we will close somewhere between 2500-3000$/oz simply because the Fed will be forced to pivot completely at some point.
One thing FFMG investors really need to keep in mind here is that we don't actually need the gold price to do anything else than stay above lets say 2000$ an ounce simply because the projects are already economical as it is. It is of course a nice thing if it keeps rising but the gold price will not be a dealbreaker for these projects anymore. Major mining companies use quite conservative gold price estimates anyway when they evaluate projects like Springpole and Duparquet, probably in the range of 1600-1800$/oz. The rising gold price will for sure bring more money into the sector which is a good thing overall.
What we need right now for FFMG shares to really "get going" is in my opinion the following:
1) Final submission of the EA.
2) Community agreements in place with Cat Lake
3) Detailed plans how Duparquet could get going as a starter pit operation
4) JV agreements with other miners to develop Springpole & Duparquet and maybe Cameron
5) New highs in gold prices and improving sentiment in miners
All of these things will occur (in my opinion) in 2024-2025, so I am very confident myself that we are now starting a long term trend to the upside with FFMG. We are way past the most "boring" phase now. The road to reach my own target price range of CAD 1-1.5 will be very bumpy that's for sure so it is important to keep a cool head here. I know there are probably still many retail investors who bought the stock in the last year or so and are sitting on large losses and they will most likely sell the stock when they are able to get their money out. That is why we will see occasional big dips in the price along the way, to the upside, that's for sure.
My own "dream scenario" for 2024-2025 is that we will get a JV announcement with a major/midtier producer regarding Duparquet and get that starter pit operation going in the next 2-4 years. That in of itself would be a massive catalyst because it would imply near term cash flows which could then be used over time to grow not only the Duparquet deposit but would also enable flexible financing to develop Springpole into a mine.
Springpole I think will need not only the final EA submission but also a community agreement in place with Cat Lake to really take all of the perceived risk away from it, although I think the risks associated with the project are completely overblown by investors. The community agreement will be reached at some point because, as I have stated before, Cat Lake is in desperate need of new roads, infrastructure and jobs to their region. There is no way these things will be built without Springpole getting developed, and both Cat Lake and the government know this very well. It's just a matter of negotiating the terms and conditions and FFMG has the perfect team in place to achieve this with all parties involved.
Other than that, the share price could very well suddenly explode to the upside for no other reason than being extremely undervalued with regards to the historical NAV valuations and sentiment improving. In 2020, the share price suddenly rose 4-5x after the "corona dip" simply because a big institution was buying a big block of shares, so you never really know what the catalyst will be. What is certain is that sentiment has been so negative in the last few years so we know shares have been moving from weak hands into strong hands during this time. When the sector turns, the shares could 5-10x very fast simply because the amount of large blocks of shares wont be available for those who want to buy i.e. big institutions or family offices and the like. If somebody suddenly wants to buy 50m shares in a short time the price to pay for that might be in the 30-50 cent range.
Time will tell if we will be rewarded big time with FFMG, but I really think we have all of the ingredients now in place to make this happen. In the end, what we are all really investing here is in Keith himself as an exceptional mining entrepreneur.
