First Mining Announces US$22.5 Million Funding Agreement to Advance the Springpole Gold Project First Mining Signs Definitive Agreement to Sell a 50% Silver Stream on the Springpole Gold Project to First Majestic Silver
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OTCQX: FFMGF
FRANKFURT: FMG
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NEWS RELEASE
First Mining Announces US$22.5 Million Funding Agreement
to Advance the Springpole Gold Project
First Mining Signs Definitive Agreement to Sell a
50% Silver Stream on the Springpole Gold Project to First Majestic Silver
June 11, 2020 – Vancouver, Canada – First Mining Gold Corp. (“First Mining” or the “Company”) (TSX:
FF) ( OTCQX: FFMGF ) ( FRANKFURT: FMG ) is pleased to announce that it has entered into a funding
agreement (the “Agreement”) with First Majestic Silver Corp. (“First Majestic”) (TSX: FR) (NYSE: AG) in
relation to the Company’s 100%-owned Springpole Gold Project (“Springpole” or the “Project”) located in
Ontario, Canada. Under the terms of the Agreement, First Majestic will pay First Mining total
consideration of US$22.5 million for the right to purchase 50% of the payable silver produced from
Springpole for the life of the Project (the “Stream”). Further details are set out below under “Silver Stream
Agreement Details”.
“We are excited to enhance our strategic partnership with First Majestic to fund Springpole through the
completion of the Pre-Feasibility and Environmental Assessment processes”, stated Dan Wilton, CEO of
First Mining Gold. “This agreement is the result of a year -long process to explore non-dilutive financing
alternatives with a number of different parties. This silver stream sale leverages Springpole’s potential by-
product revenue, strengthens our balance sheet, and provides a less dilutive source of funding to support
our continued advancement of one of the largest undeveloped open-pit gold deposits in North America.”
Benefits of the Transaction
• Secures a less dilutive source of funding to advance Springpole through a key de -risking phase, with
the advancement of technical studies, environmental permitting, and community consultation
• Provides First Mining with sufficient capital to fund Springpole development through the completion
of a Pre-Feasibility Study (“PFS”) for Springpole and the Environmental Assessment processes, as well
as corporate G&A through 2023
• Leaves the Springpole project substantially unencumbered while maintaining robust potential cash
costs and all-in sustaining costs
• Increases strategic relationship with First Majestic to leverage their significant technical and operating
expertise for the benefit of Springpole development
Silver Stream Agreement Details
First Mining’s wholly-owned subsidiary, Gold Canyon Resources Inc., which owns 100% of Springpole, has
entered into a definitive silver purchase agreement with First Majestic. The key terms of the Agreement
are as follows:
Silver Stream
• First Majestic will purchase 50% of the payable silver that will be produced from Springpole by First
Mining for the life of the Project
First Mining Consideration
• US$10 million on closing of the Agreement, with US$2.5 million payable in cash and the remaining
$7.5 million payable in common shares of First Majestic (the “First Majestic Shares”) based on the
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volume-weighted average trading price (“VWAP”) of the First Majestic Shares on the Toronto Stock
Exchange (the “TSX”) for the 20 trading days up to the day immediately prior to the closing date
• US$7.5 million upon First Mining publicly announcing the completion of a positive PFS for Springpole,
with US$3.75 million payable in cash and US$3.75 million payable in First Majestic Shares (based on
20-day VWAP)
• US$5 million upon First Mining receiving approval of a Federal or Provincial Environmental
Assessment for the Project , with US$2.5 million payable in cash and the balance in First Majestic
Shares (based on 20-day VWAP)
• The First Majestic Shares shall be subject to a statutory four month and one day hold period pursuant
to applicable Canadian securities laws
Buyback Right
• First Mining has the right to repurchase 50% of the Stream for US$22.5 millio n at any time prior to
the commencement of commercial production at Springpole
Warrant Issuance to First Majestic
• As part of the Agreement , First Mining will issue 30 million common share purchase warrants
(“Warrants”) to First Majestic on the closing date. Each Warrant will entitle First Majestic to purchase
one common share of First Mining at an exercise price of $0.40 for a period of five years
Future Silver Stream Cash Payments
• First Majestic will make ongoing cash payments to First Mining equal to 33% of the lesser of the
average spot price of silver for the applicable calendar quarter, and the spot price of silver at the time
of delivery, subject to a price cap of US$7.50 per ounce of silver (the “Price Cap”)
• The Price Cap is subject to annual inflation escalation of 2%, commencing at the start of the third year
of commercial production at the Project
Technical Committee
• First Mining and First Majestic will form a three-member technical committee (the “Technical
Committee”) comprised of two members from First Mining and one member from First Majestic. The
Technical Committee will advise First Mining on metallurgical testing, process flow sheet development
and through the completion of PFS and Feasi bility studies for Springpole, leveraging First Majestic’s
operating experience, intellectual property, and infrastructure
Other Details
• First Mining has granted a right of first refusal to First Majestic with respect to any future silver stream
financings for Springpole
Transaction Conditions and Timing
First Majestic will need to obtain TSX approval to list the First Majestic Shares that are part of the
consideration, and First Mining will need to obtain TSX approval to list the common shares of First Mining
issuable upon exercise of the Warrants. The transaction is expected to close in early July 2020.
Advisors and Counsel
Cormark Securities Inc. is acting as the Company’s financial advisor and Cassels, Brock & Blackwell LLP is
acting as the Company’s legal advisor.
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Conference Call and Webcast
Management of First Mining will host a webcast on Friday, June 12, 2020 at 7 a.m. Pacific time / 10 a.m.
Eastern time to discuss the merits of the Stream transaction, First Mining’s recent developments, and to
answer shareholder questions. Shareholders, analysts, investors, and media are invited to join the live
webcast by registering using the following link:
https://us02web.zoom.us/webinar/register/1515918221588/WN_UEgMChWtSRuiKLkb3iWjEQ
After registering, you will receive a confirmation email containing details to access the webinar via
conference call or webcast.
A replay of the webcast will be available on First Mining’s website following the conclusion of the call.
Qualified Person
Hazel Mullin, P.Geo., Director, Data Management and Technical Services of First Mining, is a “Qualified
Person” for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI
43-101”), and she has reviewed and approved the scientific and technical disclosure contained in this
news release.
Springpole Gold Project
Springpole is one of the largest undeveloped open pit gold assets in Canada, with permitting and a Pre -
Feasibility Study underway. The Project covers 41,943 hectares in northwestern Ontario, located
approximately 110 kilometres northeast of Red Lake. Springpole currently hosts 4.67 million ounces gold
in the Indicated category and 0.23 million ounces gold in the Inferred category , and the results of a
Preliminary Economic Assessment study published in 2019 (“PEA”) showcased the Project’s size and scale.
The study highlights an open pit mine and milling operation with the potential to produce an average of
410,000 ounces of gold annually when in production (years two to nine). First Mining acquired the Project
in November 2015 through its acquisition of Gold Canyon Resources Inc.
For additional details, including a description of data verification and QA/QC procedures, refer to the
technical report titled “Preliminary Economic Assessment Update for the Springpole Gold Project, Ontario,
Canada”, dated November 5, 2019, which was prepared for First Mining by SRK Consulting (Canada) Inc.
in accordance with NI 43 -101, and which is available under First Mining’s SEDAR profile at
www.sedar.com. First Mining notes that the PEA is preliminary in nature, in that it includes inferred
mineral resources that are considered too speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as mineral rese rves, and that there is no
certainty that the PEA will be realized.
About First Mining Gold Corp.
First Mining is a Canadian gold developer focused on the development and permitting of the Springpole
Gold Project in northwestern Ontario. Springpole is one of the largest undeveloped gold projects in
Canada, currently hosting a mineral resource base of 4.67 million ounces of gold in the Indicated category
and 0.23 million ounces of gold in the Inferred category. A Pre-Feasibility Study is underway, with
completion targeted in early 2021, and permitting is on -going with submission of the EIS targeted for
2021. The Company is also in the process of closing its announced transaction with Treasury Metals Inc.,
after which it will hold a large equity position in Treasury that is advancing the Goliath -Goldlund gold
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project towards construction. First Mining’s eastern Canadian property portfolio also includes Pickle Crow
(being advanced in partnership with Auteco Minerals Ltd.), Cameron, Hope Brook, Duparquet, Duquesne,
and Pitt.
First Mining was created in 2015 by Mr. Keith Neumeyer, founding President and CEO of First Majestic
Silver Corp.
ON BEHALF OF FIRST MINING GOLD CORP.
Daniel W. Wilton
Chief Executive Officer and Director
For further information, please contact:
Spiros Cacos | Vice President, Investor Relations
Direct: 1.604.639.8827 | Toll Free: 1.844.306.8827 | Email: [email protected]
www.firstmininggold.com
Cautionary Note Regarding Forward-Looking Statements
This news release includes certain "forward -looking information” and "forward -looking statements” (collectively
"forward-looking statements”) within the meaning of applicable Canadian and United States securities legislation
including the United States Pri vate Securities Litigation Reform Act of 1995. These forward -looking statements are
made as of the date of this news release. Forward -looking statements are frequently, but not always, identified by
words such as "expects”, "anticipates”, "believes”, “plan s”, “projects”, "intends”, "estimates”, “envisages”,
"potential”, "possible”, “strategy”, “goals”, “objectives”, or variations thereof or stating that certain actions, events
or results "may", "could", "would", "might" or "will" be taken, occur or be achie ved, or the negative of any of these
terms and similar expressions.
Forward-looking statements in this news release relate to future events or future performance and reflect current
estimates, predictions, expectations or beliefs regarding future events and include, but are not limited to, statements
with respect to: (i) the Company’s focus on advancing its assets towards production;(ii) realizing the value of the
Company’s gold projects for the Company’s shareholders ; . (iii) future prices of gold, silver , base metals and certain
other commodities; (iv) the timing and amount of estimated future production; and (iv) the potential to enhance the
economics of the Springpole through enhancing processing or other technologies. All forward-looking statements are
based on First Mining's or its consultants' current beliefs as well as various assumptions made by them and
information currently available to them. There can be no assurance that such statements will prove to be accurate,
and actual results and future ev ents could differ materially from those anticipated in such statements. Forward -
looking statements reflect the beliefs, opinions and projections on the date the statements are made and are based
upon a number of assumptions and estimates that, while consid ered reasonable by the respective parties, are
inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies.
Many factors, both known and unknown, could cause actual results, performance or achieve ments to be materially
different from the results, performance or achievements that are or may be expressed or implied by such forward -
looking statements and the parties have made assumptions and estimates based on or related to many of these
factors. Such factors include, without limitation: failure to obtain regulatory approval; demand for the Units and FT
Units; fluctuations in the spot and forward price of gold, silver, base metals or certain other commodities; fluctuations
in the currency markets (such as the Canadian dollar versus the U.S. dollar); changes in national and local
government, legislation, taxation, controls, regulations and political or economic developments; risks and hazards
associated with the business of mineral exploration, developme nt and mining (including environmental hazards,
industrial accidents, unusual or unexpected formations, pressures, cave -ins and flooding); the presence of laws and
regulations that may impose restrictions on mining; employee relations; relationships with a nd claims by local
communities, indigenous populations and other stakeholders; availability and increasing costs associated with
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mining inputs and labour; the speculative nature of mineral exploration and development; title to properties.; and
the additional risks described in the Company’s Annual Information Form for the year ended December 31, 2019 filed
with the Canadian securities regulatory authorities under the Company’s SEDAR profile at www.sedar.com, and in
the Company’s Annual Report on Form 40-F filed with the SEC on EDGAR.
First Mining cautions that the foregoing list of factors that may affect future results is not exhaustive. When relying
on our forward -looking statements to make decisions with respect to First Mining, investors and others shoul d
carefully consider the foregoing factors and other uncertainties and potential events. First Mining does not undertake
to update any forward -looking statement, whether written or oral, that may be made from time to time by the
Company or on our behalf, except as required by law.
Cautionary Note to United States Investors
This news release has been prepared in accordance with the requirements of the securities laws in effect in Canada,
which differ from the requirements of U.S. securities laws. Unless othe rwise indicated, all resource and reserve
estimates included in this news release have been prepared in accordance with NI 43-101 and the Canadian Institute
of Mining, Metallurgy, and Petroleum 2014 Definition Standards on Mineral Resources and Mineral Res erves. NI 43-
101 is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure
an issuer makes of scientific and technical information concerning mineral projects. Canadian standards, including
NI 43 -101, differ significantly from the requirements of the SEC, and mineral resource and reserve information
contained herein may not be comparable to similar information disclosed by U.S. companies. In particular, and
without limiting the generality of the fore going, the term "resource” does not equate to the term "reserves”. Under
U.S. standards, mineralization may not be classified as a "reserve” unless the determination has been made that the
mineralization could be economically and legally produced or extrac ted at the time the reserve determination is
made. The SEC's disclosure standards normally do not permit the inclusion of information concerning "measured
mineral resources”, "indicated mineral resources” or "inferred mineral resources” or other descriptions of the amount
of mineralization in mineral deposits that do not constitute "reserves” by U.S. standards in documents filed with the
SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be
converted into reserves. U.S. investors should also understand that "inferred mineral resources” have a great amount
of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be
assumed that all or any par t of an "inferred mineral resource” will ever be upgraded to a higher category. Under
Canadian rules, estimated "inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies
except in rare cases. Investors are cautioned not to assume that all or any part of an "inferred mineral resource”
exists or is economically or legally mineable. Disclosure of "contained ounces” in a resource is permitted disclosure
under Canadian regulations; however, the SEC normally only permits issuer s to report mineralization that does not
constitute "reserves” by SEC standards as in -place tonnage and grade without reference to unit measures. The
requirements of NI 43 -101 for identification of "reserves” are also not the same as those of the SEC, and reserves
reported by the Company in compliance with NI 43 -101 may not qualify as "reserves” under SEC standards.
Accordingly, information concerning mineral deposits set forth herein may not be comparable with information made
public by companies that report in accordance with U.S. standards.