I recommend to go and read about the recent acquisition of the Greenstone mine by Equinox Gold. It really shines a good light on what we can expect to see with regards to future deals with FFMG's assets. Equinox Gold purchased the remaining 40% interest it did not own in the Greenstone mine for $995m. Take a close look at the operating metrics for the Greenstone project and then compare them to what we have in Sprinpole:
Greenstone Mine:
- 5.05 million ounces life-of-mine gold production.
- More than 400,000 ounces average annual gold production for the first five years.
- More than 360,000 ounces average annual gold production over the initial 14-year mine life.
- 5.54 million ounces of Proven and Probable Mineral Reserves grading 1.27 grams per tonne gold.
- $1.23 billion initial capital (C$1.53 billion at spot rate of USD:CAD 1.25), including $125 million for the mining fleet of which approximately $100 million could be leased to reduce the upfront cash spend.
- 14-year initial mine life with expansion potential from underground and near-mine deposits.
- 800 local and 1,300 regional jobs during construction, 500 jobs during operations, plus numerous opportunities for indirect and support businesses in the region.
Springpole Mine:
- Probable Reserves of 3.8 million ounces gold at 0.97 g/t, 20.5
million ounces silver at 5.2 g/t and M&I resources of around 5 million ounces gold.
-Average annual gold production of 335,000 ounces in years 1
through 9 and LOM production of around 287 000 ounces annually.
-Length of mine 11,3 years with potential expansion in near mine deposits.
-$718 million initial capital costs and another $55m in sustaining capex.
-Around 700 jobs created during life of mine (think I read this in the draft EA)
Benchmarking against Greenstone, a fully EA permitted Springpole would definitely be a $1 billion+ acquisition if it comes to wanting a 100% interest in the project. Both projects are quite similar. It really does not matter that the Springpole deposit sits under a lake. It's just a technical issue which bigger miners are very familiar with in Canada. Equinox also made agreements with several First Nations to develop the mine, so there really is no obstacle with FN's unless you completely ignore them and their needs. Cat Lake (and other FN's) will 100% be onboard with Springpole when they see other FN's getting good jobs and new infrastructure from other mining projects.
Also look at what the CEO of Equinox Gold commented about the Greenstone acquisition:
“Opportunities to own gold mines like Greenstone are incredibly rare in our industry, and the Greenstone Mine will now be the foundation for long-term value creation in our company."
This is probably the biggest thing investors are missing in the FFMG story. They really don't seem to understand how incredibly rare these bigger 5m+ oz. gold deposits are. With recent acquisitions like these, you can be 100% sure the bigger players are very well aware of FFMG's assets. What I think they are waiting for is the EA permit submission because given the current bad sentiment in the sector I think they are still in no rush to acquire assets. Another reason could also be that they know Keith will instantly counter with a better offer from First Majestic if they try to do a hostile takeover. FM still owns close to 2% of FFMG I believe, at least according to their investor presentation, and Keith is not exactly known to gently step aside in such a situation. It is very possible FFMG has already received offers for deals but turned them down because of Keith being very greedy with the assets (as he should). Dan did say in an interview they have signed several non-disclosure agreements with companies over the years so for sure there has been a lot of talks already behind the scenes.
AI
