First Mining Announces Positive Preliminary Economic Assessment for the Duparquet Gold Project, Quebec, Canada Pre-Tax NPV5% of C$1.07 billion, After-Tax NPV5% of C$588 million Pre-Tax IRR of 24.9%, After-Tax IRR of 18.0%
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NEWS RELEASE
First Mining Announces Positive Preliminary Economic Assessment
for the Duparquet Gold Project, Quebec, Canada
Pre-Tax NPV5% of C$1.07 billion, After-Tax NPV5% of C$588 million
Pre-Tax IRR of 24.9%, After-Tax IRR of 18.0%
Average LOM Annual Gold Production of 233 koz with AISC of US$976/oz over 11-year LOM
September 7, 2023 – Vancouver, Canada – First Mining Gold Corp. (“First Mining” or the “Company”)
(TSX: FF) (OTCQX: FFMGF) (FRANKFURT: FMG) is pleased to announce the positive results of a Preliminary
Economic Assessment (“PEA”) completed for its 100% -owned Duparquet Gold Project (the “Project” or
“Duparquet”) located in the Abitibi region of Quebec, Canada. The PEA results support a 15,000 tonnes
per day open pit and underground mining operation over a n 11-year mine life. The PEA only considers
the Duparquet gold deposit located on the Beattie, Donchester, Central Duparquet and Dumico claim
blocks and does not include the Pitt Gold and Duquesne deposits (see Mineral Resource Estimate section).
PEA Highlights
• C$1.07 billion pre-tax NPV5% and C$588 million after-tax NPV5% at US$1,800/oz gold (“Au”)
• 24.9% pre-tax IRR; 18.0% after-tax IRR at US$1,800/oz Au
• Annual Life-of-Mine (“LOM”) recovered gold production of 233 koz
• Total LOM recovered gold of 2.5 Moz over an 11-year mine life
• Pre-tax payback of 3.8 years; after-tax payback of 4.8 years
• Initial capital costs estimated at C$706 million; sustaining and underground development capital costs
estimated at C$738 million
• Average annual LOM Total Cash Cost of US$751/oz(1); average annual LOM All -In Sustaining Costs
(“AISC”) of US$976/oz(2)
Note: Base case parameters assume a gold price of US$1,800/oz and an exchange rate (C$ to US$) of 1.33. All currencies are
reported in Canadian dollars unless otherwise specified. NPV calculated as of the commencement of construction and excludes
all pre-construction costs.
(1) Total Cash Costs consist of mining costs, processing costs, mine-level G&A, treatment and refining charges and royalties.
(2) AISC includes total cash costs plus sustaining capital, development capital and closure costs.
“This PEA demonstrates the robust economic potential of the Duparquet Gold Project,” stated Dan Wilton,
CEO of First Mining. “The +200 koz per year production profile, attractive capital and operating cost profile
and strategic location of the deposit in the hea rt of the Abitibi gold belt all contribute to the recognition
of Duparquet as one of the most meaningful development projects in Canada . We are also pleased to
have completed such a robust PEA within a year of consolidating the ownership of the Project.
Importantly, the Duparquet Gold Project represents a unique opportunity to address the environmental
legacy issues from the historic mining operations while delivering a n important economic development
opportunity for the local and Indigenous communities around the Project. We look forward to continuing
to work with regulators, the Municipality of Duparquet and other local and Indigenous communities to
advance this parallel track of environmental stewardship and economic development.”
This PEA for the Duparquet Gold Project was prepared by G Mining Services Inc. of Montreal, Quebec, in
accordance with National Instrument 43 -101 Standards of Disclosure for Mineral Projects (“NI 43-101”),
and a technical report for the PEA will be filed by the Com pany on SEDAR+ within 45 days of this news
release.
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PEA Overview
The Duparquet Gold Project , located in the Abitibi region of Quebec, Canada, is one of the largest
undeveloped gold projects in North America. The Project is located immediately north of the town of
Duparquet which is approximately 50 kilometres northwest of Rouyn -Noranda, Quebec, a major mining
service centre and home to the only remaining copper smelter in Canada. Duparquet currently hosts 3.4
million ounces of gold in the Indicated Mineral Resource category and 2.7 million ounces of gold in the
Inferred Mineral Resource category, as set out in Table 5 in the Mineral Resource Estimate section.
The PEA evaluates recovery of gold from a 15,000 tonne-per-day (“tpd”) open pit and underground mining
operation, with a process plant that includes crushing, grinding, and flotation, producing a concentrate
for sale.
Table 1: Key PEA Assumptions and Project Economics (1)
Key Assumptions Unit LOM
Gold Price US$/oz US$1,800/oz
Exchange Rate C$:US$ 1.33
Production Profile Unit LOM
Total Open Pit Tonnage Mt 282.0
Total Open Pit Mineralized Material Mined Mt 43.6
Open Pit Strip Ratio w:o 5.4
Total UG Mineralized Material Mined Mt 12.0
Total Tailings Mineralized Material Mined Mt 4.1
Total Tonnes Processed Mt 59.7
Daily Throughput tpd 15,000
Mill Grade g/t Au 1.51
Mine Life Years 11 years
Gold Recovery to Concentrate % 89.5%
LOM Metal Recovered koz Au 2,595 koz Au
Average Annual Recovered koz Au 233 koz Au
Operating Costs (US$/oz) Unit LOM
Total Cash Costs (2) US$/oz $751
AISC (3) US$/oz $976
Capital Expenditures Unit LOM
Initial Capital C$M C$706
Sustaining and Development Capital C$M C$738
Closure Costs C$M $30
Estimated Salvage Value C$M ($36)
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(1) The reader is advised that the PEA is preliminary in nature and is intended to provide only an initial, high-level review of the Project potential
and design options. The PEA mine plan and economic model include numerous assumptions and the use of Inferred mineral resources.
Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would
enable them to be categorized as mineral reserves and to be used in an economic analysis except as allowed for in PEA studies. There is no
guarantee that Inferred resources can be converted to Indicated or Measured resources, and as such, there is no certainty that the PEA or
Project economics described herein will be realized or achieved.
(2) Total Cash costs consist of mining costs, processing costs, mine-level G&A, treatment and refining charges and royalties.
(3) AISC includes total cash costs plus sustaining capital, development capital and closure costs.
Economic Sensitivities
The Project economics and cash flows are highly sensitive to changes in the price of gold.
Table 2: PEA Sensitivity to Gold Price, Operating Costs and Capital Costs
Sensitivity to Gold Price
Gold Price (US$/oz) $1,400 $1,600 $1,800 $2,000 $2,200
Pre-Tax NPV5% C$168 million C$621 million C$1.07 billion C$1.53 billion C$1.98 billion
Pre-Tax IRR 8.5% 17.1% 24.9% 32.0% 38.6%
After-Tax NPV5% C$20 million C$310 million C$588 million C$859 million C$1.12 billion
After-Tax IRR 5.5% 12.1% 18.0% 23.2% 28.0%
Sensitivity to Initial Capital Costs
Initial Capital Costs +20% +10% C$706 million -10% -20%
Pre-Tax NPV5% C$814 million C$949 million C$1.07 billion C$1.18 billion C$1.28 billion
Pre-Tax IRR 16.7% 20.4% 24.9% 30.5% 37.8%
After-Tax NPV5% C$413 million C$503 million C$588 million C$661 million C$723 million
After-Tax IRR 12.0% 14.7% 18.0% 21.9% 26.9%
Sensitivity to Operating Costs
Operating Costs +20% +10% C$2.2 billion -10% -20%
Pre-Tax NPV5% C$761 million C$917 million C$1.07 billion C$1.23 billion C$1.39 billion
Pre-Tax IRR 19.5% 22.2% 24.9% 27.4% 29.9%
After-Tax NPV5% $398 million $494 million C$588 million $680 million $771 million
After-Tax IRR 14.0% 16.0% 18.0% 19.9% 21.7%
Economics Unit LOM
NPV at 5% (pre-tax; post-tax) C$M C$1,073; C$588
IRR (pre-tax; post-tax) % 24.9%; 18.0%
Payback (pre-tax; post-tax) Years 3.8 years; 4.8 years
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Mineral Resource Estimate
In September 2022, the Duparquet Gold Project Mineral Resource Estimate (“MRE”) was updated by
InnovExplo Inc. in accordance with NI 43-101. (See news release of September 12, 2022 for more details)
The Duparquet Gold Project contains 3.44 million ounces o f gold in the Measured & Indicated category,
grading 1.55 g/t Au, and an additional 1.6 million ounces of gold in the Inferred category, grading 1.36 g/t
Au (see Table 3).
In August 2023, new updated Mineral Resource Estimates were completed on First Mining’s 100% owned
Pitt Gold and Duquesne projects and have added 1.05 million ounces of gold grading 2.32 g/t Au in the
Inferred category (see Table 4), which will now form part of the larger consolidated Duparquet Gold
Project.
Following the updated Mineral Resource Estimate at Pitt Gold and Duquesne, the consolidated Duparquet
Project now contains 3.44 million ounces of gold in the Measured & Indicated category, grading 1.55 g/t
Au, and an additional 2.68 million ounces of gold in the Inferred category, grading 1.68 g/t Au.
Table 3: Duparquet Deposit Mineral Resource Estimate (Effective September 12, 2022)
Area
(mining
method)
Cut-off
(g/t)
Measured resource Indicated resource Inferred resource
Tonnage
(t)
Au
(g/t) Ounces Tonnage (t) Au
(g/t) Ounces Tonnage (t) Au
(g/t) Ounces
Potential
Open Pit 0.40 163,700 1.37 7,200 59,410,600 1.52 2,909,600 28,333,000 1.07 970,400
Potential
UG Mining 1.50 - - - 5,506,900 2.26 399,300 9,038,900 2.29 665,600
Tailings 0.40 19,900 2.03 1,300 4,105,200 0.93 123,200 - - -
Total 183,600 1.43 8,500 69,022,700 1.55 3,432,100 37,371,900 1.36 1,636,000
Table 4: Pitt Gold and Duquesne Deposits Mineral Resource Estimate (Effective August 31, 2023) (not
included in the PEA)
Area
(mining method)
Cut-off
(g/t)
Pitt Gold Inferred Resource Duquesne Inferred resource
Tonnage (t) Au
(g/t) Ounces Tonnage (t) Au
(g/t) Ounces
Potential
Open Pit 0.50 - - - 6,300,000 1.56 316,000
Potential
UG Mining 1.75 2,691,000 2.67 231,200 5,030,000 3.10 501,400
Total 2,691,000 2.67 231,200 11,330,000 2.24 817,400
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Table 5: Duparquet Gold Project Consolidated Mineral Resource Estimate (Effective August 31, 2023)*
Area Total Measured Resource Total Indicated Resource Total Inferred Resource
(mining method) Tonnage
(t)
Au
Ounces Tonnage (t)
Au
Ounces Tonnage (t)
Au
Ounces
(g/t) (g/t) (g/t)
Potential
Open Pit 163,700 1.37 7,200 59,410,600 1.52 2,909,600 34,633,000 1.16 1,286,400
Potential
UG Mining - - - 5,506,900 2.26 399,300 16,759,900 2.59 1,398,200
Tailings 19,900 2.03 1,300 4,105,200 0.93 123,200 - - -
Total 183,600 1.43 8,500 69,022,700 1.55 3,432,100 51,392,900 1.62 2,684,600
*Refer to respective deposit resource estimate table for cut-off grade
Notes to accompany the Duparquet Gold Project Mineral Resource Estimates:
1. The independent qualified persons for the Duparquet mineral resource estimate, as defined by NI 43 -101, are Marina Iund, P.Geo. , Carl
Pelletier, P.Geo. and Simon Boudreau, P.Eng. from InnovExplo. The effective date of the estimate is September 12, 2022.
2. The independent qualified persons for the Pitt Gold and Duquesne mineral resource estimates, as defined by NI 43 101, are Olivier
Vadnais-Leblanc, P.Geo., Carl Pelletier, P.Geo., and Simon Boudreau, P.Eng. from InnovExplo. The effective date of the estimate is August
31, 2023.
3. These mineral resources are not mineral reserves, as they do not have demonstrated economic viability. There is currently insufficient data
to define these Inferred mineral resources as Indicated or Measured mineral resources and it is uncertain if further exploration will result
in upgrading them to an Indicated or Measured mineral resource category. The mineral resource estimate follows current CIM D efinition
Standards.
4. The results are presented in situ and undiluted and have reasonable prospects of eventual economical extraction.
5. In-pit and Underground estimates encompass sixty (60) mineralized domains and one dilution envelop using the grade of the adjace nt
material when assayed or a value of zero when not assayed; The tailings estimate encompass four (4) zones.
6. Duparquet: In-pit and Underground: High-grade capping of 25 g/t Au; Tailings: High-grade capping of 13.0 g/t Au for Zone 1, 3.5 g/t Au for
Zone 2, 1.7 g/t Au for Zone 3 and 2.2 g/t Au for Zone 4. High-grade capping supported by statistical analysis was done on raw assay data
before compositing.
7. Pitt Gold: Underground: High-grade capping of 20 g/t Au. High-grade capping supported by statistical analysis was done on composited
assays.
8. Duquesne: In-pit and Underground: High-grade capping of 55 g/t Au. High-grade capping supported by statistical analysis was done on
composited assays.
9. In-pit and Underground: For Duparquet, the estimate used a sub-block model in GEOVIA SURPAC 2021 with a unit block size of 5m x 5m x
5m and a minimum block size of 1.25m x 1.25m x1.25m. For Pitt Gold and Duquesne, the estimates used a sub -block model in GEOVIA
SURPAC 2023 with a unit block size of 6m x 6m x 6m and a minimum block size of 1.5m x 0.5m x0.5m. Grade interpolations were obtained
by ID2 using hard boundaries. Duparquet Tailings: The estimate used a block model in GEOVIA GEMS with a block size of 5m x 5m x 1m.
Grade interpolation was obtained by ID2 using hard boundaries.
10. In-pit and Underground: For D uparquet, a density value of 2.73 g/cm3 was used for the mineralized domains and the envelope. For Pitt
Gold and Duquesne, a density value of 2.7 g/cm3 was used for the mineralized domains and the envelope. A density value of 2.00 g/ cm3
was used for the overburden. A density value of 1.00 g/cm3 was used for the excavation solids (drifts and stopes) assumed to be filled with
water. Tailings: A fixed density of 1.45 g/cm3 was used in zones and waste.
11. In-pit and Underground: For Duparquet, t he mineral resou rce estimate is classified as Measured, Indicated and Inferred. The measured
category is defined by blocks having a volume of at least 25% within an envelope built at a distance of 10 m around existing channel samples.
The Indicated category is defined by blocks meeting at least one (1) of the following conditions: Blocks falling within a 15 -m buffer
surrounding existing stopes and/or blocks for which the average distance to composites is less than 45 m. A clipping polygon was generated
to constrain Indicated resources for each of the sixty (60) mineralized domains. Only the blocks for which reasonable geological and grade
continuity have been demonstrated were selected. All remaining interpolated blocks were classified as Inferred resources. Blo cks
interpolated in the envelope were all classified as Inferred resources. Tailings: The Measured and Indicated categories were defined based
on the drill hole spacing (Measured: Zones 1 and 2 = 30m x 30m grid; Indicated: Zone 3 = 100m x 100m grid and Zone 4 = 200m x 200m
grid). For Pitt Gold and Duquesne, the mineral resource estimate are completely classified as Inferred due to a lack of confidence in certain
drill hole collar and underground development locations.
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12. The Mineral Resource Estimate for Duquesne and Pitt Gold was prepared using 3D block modelling and the inverse distance squared (“ID2”)
interpolation method.
13. The mineral resources are categorized as Inferred based on drill spacing, as well as geological and grade continuity. A maximum distance to
the closest composite of 75 m for Inferred in all zones for Duquesne of 210 m for Inferred in all zones for Pitt Gold.
14. The reasonable prospect for an eventual economical extraction is met by having used reasonable cut -off grades both for a potential open
pit and underground extraction scenarios (minimum mining width of 2m) and constraining volumes (Deswik optimized shapes and Whittle
optimized pit-shells).
15. In-pit and Underground: The mineral resource estimate is locally pit-constrained with a bedrock slope angle of 50° and an overburden slope
angle of 30°. The out-pit mineral resource met the reasonable prospect for eventual economic extraction by having constraining volumes
applied to any blocks (potential underground extraction scenario) using DSO. Duparquet resources is reported at a rounded cut-off grade
of 0.4 g/t Au (in -pit and tailings) and 1.5 g/t Au (UG). The cut -off grades were calculated using the following parameters: mining cost =
CA$70.00 (UG); processing cost = CA$11.9 (tailing) to CA$17.0 (pit& UG); G&A = CA$8.75; refining and selling costs = CA$ 5.00; gold price =
US$ 1,650/oz; USD:CAD exchange rate = 1.31; and mill recovery = 93.9%. The cut -off grades should be re -evaluated in light of future
prevailing market conditions (metal prices, exchange rates, mining costs etc.). Duquesne resources are reported at a rounded cut-off grade
of 0.5 g/t Au (in-pit) and Pitt Gold and Duquesne resources are reported at a rounded cut-off grade of 1.75 g/t Au (UG). The cut-off grades
were calculated using the following parameters: mining cost = CA$84.86 (UG); processing cost = CA$21.010; G&A = CA$11.75; refining and
selling costs = CA$ 5.00; gold price = US$ 1,800/oz; USD:CAD exchange rate = 1.3; and mill recovery = 90%. The cut-off grades should be re-
evaluated in light of future prevailing market conditions (metal prices, exchange rates, mining costs etc.).
16. The number of metric tons was rounded to the nearest thousand and ounces w ere rounded to the nearest hundred, following the
recommendations in NI 43 101. Any discrepancies in the totals are due to rounding effects.
17. The qualified persons are not aware of any known environmental, permitting, legal, title -related, taxation, socio -political, or marketing
issues, or any other relevant issue not reported herein, that could materially affect the Mineral Resource Estimate.
The database used for the Duparquet MRE contains 904 holes totalling 270,119m and 173,831 sampled
intervals. The resource area has an E -W strike length of 4.5 km, a width of approximate ly 1 km, and a
vertical extent of 1,050 m below surface. A total of 60 mineralized zones wireframes have been created
for the Duparquet deposit.
The database used for the Duquesne MRE contains 1,011 underground drill holes for a total of 51,957.43m
and 39 3 surface Diamond Drill Holes (“DDH”) totaling 103,888.19m. The DDH intervals used for the
interpretation contain 66,411 assays taken from the 1404 drill holes and surface channels (71,034.71m of
core). A total of 389 mineralized zones wireframes have bee n created for the Duquesne deposit.
Mineralized zones average thickness in the deposit varies between 0.69 m and 4.28 m with an interpreted
average thickness of 1.89 m.
The database used for the Pitt Gold MRE contains 163 surface diamond drill holes totaling 70,364.67m. A
total of 119 mineralized zones wireframes have been created for the Pitt Gold deposit. Mineralized zones
average thickness in the deposit varies between 0.71 m and 3.03 m with an interpreted average thickness
of 1.56 m.
Capital Costs
The capital cost estimate for the proposed open pit operation in the PEA is based on the scheduled plant
throughput rates, as well as a review of similar sized open pit gold operations.
Table 6: Capital Cost Details
Total Capital Cost C$M
Infrastructure $10
Power & Electrical $15
Water $37
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Surface Operations $5
Mining $102
Process Plant $190
Indirect $90
Owner’s Cost $54
Construction cost $503
Contingency $126
Pre-Production $57
Working Capital $20
Initial Capital $706
Sustaining and Development Capital $738
Closure Costs $30
Salvage Value ($36)
Total Capital $1,438
Mining Capital Costs
The open pit mining activities for the Project were assumed to be undertaken by an equipment financed
fleet. Mining capital costs were estimated based on a detailed equipment schedule matched to the mining
production schedule. Total initial mining capital was estimated at C$102 million, inclusive of capitalized
stripping, and equipment. The capital expenditure for the underground, which starts at year 1 of open pit
operations, is $404 million of which C$255 million is attributed to mine development.
Processing Capital Costs
The process plant was designed using conventional processing unit operations. It will nominally treat
15,000 tpd or 679 dry tonne/hour based on 92% availability. The primary crushing plant design is based
on 75% availability. The plant will operate two shifts per day, 365 days per year, and will produce a high-
grade gold concentrate for sale to smelters.
Initial capital costs for the processing facility were estimated to be C$190 million, excluding contingency.
No major plant re-build or expansion was considered during the LOM , with sustaining capital set to
maintain the equipment in operating condition.
Operating Costs
Table 7: Operating Cost Details
Operating Costs per Tonne Unit LOM
Mining Costs – OP (inc. historic tailings) C$/t mined C$3.16
Mining Costs – OP (inc. historic tailings) C$/t processed C$20.85
Mining Costs – UG C$/t processed C$44.26
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Mining Costs
The PEA contemplates open pit and underground mining undertaken by an equipment financed fleet. An
average unit mining cost of C$ 3.16 per tonne of material mined from the open pit was used in the
economics. The cost estimate was built from first principles with detailed haulage profiles, and is based
on experience of similar sized open pit operations and local conditions. The open pit mining costs consider
variations in haulage profiles by month and by year and variable equipment requirements necessary to
meet the plant production.
Underground mining cost was also estimated using first principles with supplier’s quotations for
equipment, consumables, contractor work, and is based on experience with underground operations with
similar size and environment. The underground mining costs of $44.26 per tonne of mineralized material
mined from underground inc ludes $2,257 per metre of OPEX development. A sustaining development
cost of $16.64 per tonne is required to maintain production which is excluded from the operation costs.
Processing Costs
An average cost of C$10.59 per tonne of processed material was use d in the PEA, based on the selected
process flowsheet. This includes tailings handling, labour, consumables, maintenance, and supplies. A
power cost of C$0.0524/kWh was assumed.
Mining
Open pit mining would occur in year one concurrent with underground development. Over the LOM, the
open pit will deliver an average of 10,400 tpd of mineralized material to the mill. The annual peak of
mineralized material delivered to the mill is 12,670 tpd in year 8. Underground production is expected to
begin in year two with an average underground production rate of 3,500 tpd. Over an 11-year mine life,
A total of 59.7 Mt of mineralized material (including pre-production) will be mined, which includes 4.1 Mt
of historical tailings. The current LOM plan focuses on achieving consistent processing feed production
rates, mining of higher-grade material early in the schedule, and balancing grade and strip ratios.
Mining Methods
The Duparquet Project is planned as a mix of conventional open pit mine and a long hole (transversal –
longitudinal – uppers) underground mine.
Open pit mining will be done with the use of diesel equipment inclu ding drilling rigs and haul trucks
coupled with hydraulic shovels. The Project consists of seven (7) pits with Pit 1 having three (3) phases.
Processing Costs C$/t processed C$10.59
G&A Costs C$/t processed C$2.90
Total Operating Costs C$/t processed C$78.60
Other Costs LOM
Transport Costs C$/t $30
Treatment Charges C$/dmt $75
Refining Charges US$/oz $5