Interview with Dan Wilton, CEO of First Mining Gold Corp. (TSX: FF)

First Mining Gold Corp. (formed in 2015) is a North American gold development company with a diverse portfolio of gold projects. First Mining Gold Corp. has a large resource base of 7.4Moz gold in the Measured and Indicated categories, and 3.8Moz of gold in the Inferred category. Its assets are in 'mining-friendly' jurisdictions: Eastern Canada, Western America and Northern Mexico (one in the south). First Mining Gold Corp. is focussed on advancing its assets towards production. It holds a portfolio of 24 mineral assets. Is 24 too many? Will it look to cash in on some of these soon?

What was the business plan on day one? Wilton says it was to find value in projects that companies had given up on. By adopting a roll-up strategy, and trying to excite the market with promising, underdeveloped projects, First Mining Gold Corp. hoped to create something of a PR frenzy via aggressive promotion. How has it worked out? Investors may be worried, based on market performance. First Mining Gold Corp. had a share price of C$0.41 in March 2019, but sits at C$0.21 today; this from a company that reached C$1.18 in July 2016. The market cap stands at around C$124M today.

So, why this decline? Wilton seems to be aware that First Mining Gold Corp. has suffered from its legacy as a promotional entity. As is always the case in mining, investors have long memories, and a full transition to becoming a project development company seems to have gone unnoticed. Wilton remarks that the stock has good liquidity, but this will mean little to investors if the share price continues on its current trajectory. Wilton states that First Mining Gold Corp. needs to find a way to maintain investor enthusiasm throughout the project development phase. The story of project development seems less attractive to the market, but is this because if the way the story has been told?

One worrying stat is the CAPEX needed to get First Mining Gold in to production: c. C$800-850M. Wilton states the fundamental value of First Mining Gold Corp. will come by reaching "value milestones" and de-risking the project. Investors will wonder why Wilton is so hell-bent on starting with a portfolio of this size, but Wilton sees the opportunity as too good to pass up. Could First Mining Gold Corp. have started smaller and scaled up? Wilton states that history has shown single asset projects to be risky...

Wilton talks through their two main projects, and the plans for 2020: raising capital and getting permitted. First Mining Gold is currently finalising the second half of its private placement: c. C$5M. Wilton plans to spend the money on conducting a PFS, and edging the two main projects closer to permitting, construction, and eventual production. We think Wilton needs to give the market more detail in the meantime about what the company is doing to work towards these permits and to further develop these projects. This vacuum of information is being filled by negative sentiment at the moment. Investors need to be made comfortable that this play isn't set up to fail. Let's see how First Mining Gold proceeds in 2020. It's sure to be interesting.

What did you make of Dan Wilton? Is 24 assets too many? How can First Mining Gold Corp. get the share price moving back in the right direction?  

Company page: https://firstmininggold.com/

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