Automated transcript · Written by software from the replay's audio. It can mishear names and figures; the replay is the record.
35:31 I just missed the forward-looking statement slide. Sorry about that, but I'll quickly go through silver. I'm not going to read everything on the slide, but I think the most important things to take away from the silver supply-demand fundamentals is really, you know, We're in a market right now where we're consuming 1.2 billion ounces of silver a year or thereabouts, and the miners are only supplying 830 to 850 million ounces a year, and that's quite a large deficit. Recycling has not really changed very much, despite the price. This price is having 0 effect on recycling. We just came back from Japan on a trip to a smelter and a refinery over in Japan and they're scrambling for supply.
36:16 They can't get enough computer waste. There's just a real lack of available recycled materials, which is quite interesting to really think through. So I don't see there's really any driver of supply coming for the next decade at least. It takes a long time to get a mine up and running and permitting is taking forever as was touched on earlier and we're in a very unique supply-demand fundamental setup for much higher prices in silver which is pretty exciting. And just talking about the company a little bit, in Q1 57% of our revenues from the sale of silver, 33% was from gold, the rest was in the form of lead and zinc. We've got 4 producing mines in Mexico.
37:04 Our goal is to become the largest silver producer in the world and I know that's a lofty goal, but you got to have goals in life and that's our goal to get to. A big, big land package. We're also the only mining company in the world that has our own mint, which we'll talk about as we get through this presentation. ESG is obviously quite important for the mining sector, something we pay a lot of attention to. Our mines are in communities that rely on these assets, rely on these mines. And without these mines, these communities just simply wouldn't exist. And if there's ever a problem in town, it's our guys that get the phone call. You know, the government doesn't come in and fix power lines or fix, you know, pipes under roads. It's always us that comes in and helps out. You know, we help out the schools, supplying computers, medical programs, supplying eyeglasses and, you know, a variety of different things that we do throughout our communities, which we are very proud of and take very seriously. And as a result, as you can see, our scores are in the top quartile of the mining sector.
38:09 Going to our guidance for the year, we put guidance out twice a year, January and July. We actually beat our guidance in Q1, which was nice to see. We came in on a lower cost and also a slightly increase in production. Los Gatos and Santa Elena are really the 2 engines right now behind the company. San Dimas is doing well, but slightly under budget. And La Catata is also slightly under budget, But on a whole basis, on a 4 mine basis, we actually perform better in Q1 than what the guidance would suggest. And we'll get into it on a mine by mine basis. But as you can see, about 30 million silver equivalent ounces made up of about 14, 15 million silver pure ounces and 130,140,000 ounces of gold.
38:59 And Going through the last 5 quarters, you'll see that we have pretty strong 2024. We started the year a little bit on the low note and then as we got through each quarter, we saw quarterly improvements, not only on production, but also on costs. And you look at the Q1 cost numbers, you can see quite a nice little dip there as a result of throughput and some other efficiencies that were going on within the business. And Q1, something obviously we're proud of, it was a record quarter and ended the quarter off with over $450 million in cash, obviously a sizable amount of cash. Our revenues were, you know, close to $250 million. Cash flows were $110 million, record silver production, as I said, lower costs and so on. So it was just a really good bang up quarter. And one thing that investors should note is that this was the Gato's transaction closed in mid-January, so not the full quarter of production hit this quarter. So the full quarter will be Q2, so you know look for a very very strong Q2 as well.
40:14 And Looking at the assets, we're very lucky to have 4 producing mines in 4 neighboring states. This brings a lot of synergies to the business. We could move equipment or people or whatever the case may be between each of the mines, which is quite efficient. And also these 4 states are really the 4 most mining friendly states in Mexico. And it's great to be close to the United States where we've got strong supply chains for natural gas and for other chemicals and other products that come in across the border. So going to Gatos, as you can see looking at this picture, it's a pretty clean operation. It's only been running for about 3 years now.
41:01 It's probably the most modern, well it is the most modern mine that we've ever visited and we're quite pleased to see it on our first trip. It costs about $300 million to build this facility and it's operating at about 4,000 tons a day right now. It says on the slide, you know, 30, almost 3,700 but we're actually getting slightly improved throughputs. As you can see the costs there are quite nice as well. Big land package, 103,000 hectare land package and it's a joint venture with Doha. It is a concentrate producer, it produces silver and lead and zinc. 70% of the production here is in the form of silver. It produces about 13 million ounces of silver equivalent a year and attributable to Firstman Jessick is about 10 million ounces of that number.
41:55 And this is the region as I said it's a very very large land package you can see I'm not sure you can see my cursor but it's pointing to that little black box. That's where the resources are. Currently it's got a 10-year mine life just from that black box and you can see all the other areas on the map that are all interesting geological structures that we're yet to get to. It'll take time, this is a big property, we're not going to be blowing our brains out with a 10-year mine life, there's really no pressure on us to really drill, despite the fact we will be spending about $15 million in exploration at Los Gatos this year, but it doesn't really need additional mine life. We're just going to be defining areas close to the mill and just keeping the mine life steady over the next couple of years and that's really our objective with that exploration spend.
42:50 Santa Elena is another strong horse in our portfolio, another big land package. I'll get to it on the coming slides, but it had another record year. We had in 2023, we produced just under 10 million ounces on a silver equivalency basis. In 2024, we just broke through 10 million ounces. So it was really nice to see another record year back to back. We got a big drill program, as you can see on the slide. We converted this over to LNG a couple of years ago, which helped our ESG score, but virtually 100% of the power at this operation comes from LNG. As you can see on this slide, we're really focused on the pink and blue areas.
43:37 The Santa Elena main vein and the mill is right where that X is. And the Yerma Tannials where that red dot is. And that's where most of the, well, virtually all the production's been coming out of over the last couple of years and will continue to over the next year or so as we get into other areas, which I'll discuss on the next slide. You can see we own all the colored blocks. What we don't own is this black square. This black square is the cheapest. That was the old Silvercrest. That was just recently purchased from Coor. Mining, as most people that are listening to this presentation likely know, Coor paid $1.7 billion for that mine, which is pretty interesting. We've done very limited exploration up in this area. We've done a couple minor holes just for some look and sees, but since our major discoveries down in this region in the blue and pink areas. This has really been the focus for the last couple of years.
44:36 And as you can see on this slide here, the ermitannial, which was discovered back in 2015, 2016, came into production in 2021. This has been the main ore supply for the mill and this is really the reason why we continually had record production because of the grades in this area. We're now developing over into the ermitannial luna. This Luna area will become into production towards the end of this year, early 2026. And we're currently working on developing this area and getting this into the mill. We had a major discovery last year, which is pretty exciting, which we actually put a news release out this morning, which actually announces a second discovery called San Quintinio, which I believe is on the next slide.
45:26 But this area here, if you can see my cursor, called Ermitaño-Navidad, is turning out to be quite an interesting, very, very high-grade discovery. It's quite close to Ermitanyo. We're actually putting a plan together to develop ramps down into the system, and it's actually, the system's actually pointing up towards the Ermitanyo structure, which is quite helpful, because obviously we'll get that into the mill more quickly as we develop this part of this structure. When we brought ermitannial into production in 2021, we had a maiden resource at that time of 56 million ounces. Our geos think that this area here called Navidad is likely similar in size to that area.
46:13 And this was in the news release today, the Santa Nina Discovery, as you can see on the slides, and we've got, you know, 2 grams, 4 grams, 8 grams, you know, gold and very nice silver intersections as well. This is actually between Ermitano and Winter and Navidad discoveries, You can see on this slide here, it's on this map here, you can see Santa Elena, Santa Nina and Navidad and hermitanio all here. It's all within about a 5 kilometer area and that's really been the reason that's this is the primary reason why we've not been focusing up at the list cheapest because just the success ratio that we've been having down in this region it really makes no sense we're developing ounces down here at a very very rapid pace so we want to get these ounces into the mill as quickly as possible to maintain the current throughput levels.
47:12 So jumping along to San Dimas, Many people know this mine has been in our portfolio since 2018. It's been an operating mine for over 200 years. It's really the most important gold silver mine in the state of Mexico. It's big land package as well, over 70,000 hectares, produces you know 10 to 13 million ounces of silver equivalent a year, 50-50 gold silver. It's been a very, very important asset in our portfolio since we bought it. As you can see, we beat our costs. If you go back to the guidance slide, which is nice to see, that's one of the lowest cost quarters we've had in the last year. So it's reverting back to its norm. We'd like to see throughput increase a little bit and ounce production increase a little bit as well. But we're working on those exact things for 2025 to end the year on a very positive note.
48:08 Oops sorry oops what's going on here okay I'm clicking the screen too quickly. Lincoln Tata I'll quickly just cover Lincoln Tata despite the fact I'm not on that slide. Lincoln Tata is you know it's a hundred percent silver mine sorry you can't see the presentation, but it's one of our slightly higher cost mines, but it's an important asset in our portfolio. It's been in our portfolio since 2005. It's been a real cash flow engine for us since we bought it. And that's very important asset. It produces around 3 million ounces silver a year, of which all those ounces are pure ounces as I said. So jumping to the mint, we've been selling retail products to our investors and shareholders since 2008 and it's something we've been having a lot of fun with, except over the last couple of years, we had challenges getting the metal to our customers. You would go onto our website and you would see sold out, sold out, sold out. And it was really a fact that the mints just were simply not producing the metal that we needed to supply to our customers. So I pulled the pin on all of it and made the decision in 2023 to open up our own mint.
49:23 And we opened it up in March of 2024. It took about a year to build it and get the personnel in place. And now we're producing all kinds of wonderful products. I would suggest those people that would have any interest in buying silver, go to firstmint.com and have a look at our products. First quarter was a great quarter, almost $8 million in revenue. We had, in 2024, we had about 5% of our total silver production go through the mint. In Q1, we had 7% of our production go through the mint. Our goal is to get 10% of our annual sale or annual silver production through the Mint on an annualized basis. Or at least that's our target for 2025. Jumping along to our liquidity, I talked about our strong treasury earlier, but if you add up all our liquid assets, our marketable securities, our credit lines, and everything else, it comes up to be you know whopping over 500 million US dollars, which is a pretty strong place to be. It's the strongest balance sheet we've ever had in the history of the company, thanks to the current metal prices.
50:31 We're hoping to end the year off on a very strong note as well. So look forward to seeing even further improvements throughout 2025. Going to our shareholder list, These are the top 10 shareholders in the company, the Electrum Group out of New York, that's Tom Kaplan, and a variety of other important investors as well. I'm no longer on the list. I got bumped out by a couple of these institutions, unfortunately, but if we had the top 20 list on the slide on the screen here, I'd be on that list, of course, as my shareholding also always increases on an annual basis, shows our market cap there and then different research coverages that we had. One thing interesting of note is the institutional and the retail shareholder base flipped on its head before they lost Gatto's acquisition.
51:27 We're about 55% retail and about 45% institutional. Now as you can see on this slide we're completely reversed from that as a result of some really good strong institutional support that came into the company as a result of the Gato's acquisition. And we do pay a dividend 1% of revenue so the idea there is it's really fixed to silver prices. Now as the revenue of the business increases due to metal price increases, our dividend increases and it's something we're very pleased to pay and we've been doing it for the last couple years and maybe eventually we could potentially even increase our dividends at some point going forward. And some catalysts coming forward for 2025 I think it's really just going to be well of course the exploration program you know record exploration 270,000 meters of drilling over 30 rigs active within the business. You know, it's a big, big program, you know, very focused on Navidad, but also at San Dimas and the other assets as well.
52:29 So look for continued positive expiration results for the year, But I think really the balance sheet and the financial statements are really going to be a key driver for the business going forward, at least for the next couple of quarters as we really meet our guidance as I covered earlier in the presentation, as shareholders wake up to see the real value that the company is bringing to its shareholders. I think the company still has not gone through a re-rating as a result of the GATO's transaction. We did create quite a liquidity event for many of the GATO shareholders, which we've been seeing. We're getting through all of that and I think we're going to start seeing some share price improvement early. So I'm hoping to see that throughout the year as a result of our financial results that come out throughout the next few quarters.
53:18 And that's really it for my presentation. Awesome. Thank you so much, Keith. Really appreciate it. If you could just close off your screen share, I'll throw it to Dan to give a presentation for First Mining. Then we'll get to questions. I know there's a bunch of good ones in the chat. I will get to them very shortly. Yeah, no, I will try and keep it reasonably brief here. And thanks to Keith and to Florian for I think some great information. We've done this presentation together a few times. What I love about it is, you start with the macro view, you get a real view on where you think Gold and Silver are going. You look at an investment opportunity like First Majestic, which is a growing cash flowing, real day-to-day leverage to that Silver price by virtue of the fact that they're selling Silver every day and making more Silver every day.
54:09 And then you have first mining, which is a very highly leveraged fundamental value play to Gold. So for those of you who don't know the story that well, we'll go through it quickly here, make sure we leave quite a bit of time for questions. So We own a portfolio of Gold assets in Canada and are advancing 2 of the largest undeveloped Gold projects in the country. Our Springpole Gold project in Northwestern Ontario, we believe, is likely the next major mining project in Canada to get its environmental assessment decision, targeting that at the end of December. And we have a very robust project in Quebec at Duparquet, where even this morning we're putting out very interesting exploration results and continuing to see that this deposit, which is a past producer, you can see some of the historic infrastructure there in the bottom right hand.
55:11 But this is a project that we believe is going to continue to grow and demonstrate its importance and relevance in that really critical strategic gold area in the Abitibi in Quebec. I have a number of other projects in the portfolio that really we were blessed to have by virtue of the foresight of Keith, who is the founder of First Mining Gold. But Keith and the original team had an original view of acquiring gold assets at a time when the market was really on its knees in 2015 and acquired 8 projects or companies over the course of about 12 months and gave us this portfolio of assets. And so we have quite systematically over the last 5 years brought partners in on a number of these other projects. We really focused our efforts on advancing Springpole and then acquiring DuParquet, but have turned these other portfolio assets now into more than $70 million worth of cash, which is an important thing. We don't get a lot of credit for that, and a lot of people don't appreciate it, but that's a significant portion of the money that we've been able to put in the ground to move our projects forward.
56:28 So we're sitting today with a market cap of about 180 million Canadian, a little bit less than $10M of cash on hand. And then a number of marketable securities and these other future cash and share payments that we've done from those deals on the portfolio assets and some of the value of those JV interests. So our shareholder base is predominantly retail. It's really you know high net worth individuals and a lot of people who followed Keith really throughout his career. Lots of first majestic shareholders and you know lots of shareholders of both and a growing list of analysts coverage there. But management and directors do own 4.8% of First Mining. And Keith would be the largest in that, I think, owning today a little bit more than 3% of the company.
57:16 So, Keith, you're still showing up on our list as top 10. In fact, I think if we had it listed out by individual shareholders, I think you're still number 1. Florian touched on this before, and I think It's interesting. His chart was really looking really only the top 3 lines here with the Gold price that we all know has really started reacting. This is going back to 22. You've had Gold producers, large cap and small cap, really start that reacting from the beginning of January of this year. Really quite a catch-up. What you haven't really seen is this developer bucket. So us and a number of other project developers in Canada who represent this line, really most of us have barely started to move in reaction to this Gold price.
58:09 We're trading today still sub US$10 an ounce. And this is with world-class scale, significantly advanced and de-risked projects in tier 1 jurisdictions. We've never seen a gap this big in my career. I've been doing this 30 plus years. Never seen a gap this big in the valuation between large cap producers, even mid cap producers and developers. And historically, this gap usually gets closed by the M&A market. So it's usually larger producers come to acquire these projects when they really need them. And while we wring our hands a little bit and say, oh, we haven't seen this really robust acquisition of projects in Canada, the reality is that over the last 5 years, almost every 5 million ounce project in Canada that has received its environmental assessment approvals has been acquired or funded at values of US$500M or more.
59:15 And we've continued to see that. I mean, you had this acquisition of Osisko Mining, which had the Windfall Project in Quebec, that's Goldfields acquiring 50% of that project at a value of 2.2 billion. Back River, Greenstone, Blackwater, these are major projects. You know, Magino, Valentine as well, major projects that have all been acquired over the last 5 years. And what that has left us with is the situation in the industry where 5 years ago, there was quite a bit of choice if you were a Gold producer and you wanted to acquire an advanced stage project, put something into production in Canada. Today, that choice is really limited. And I think we're happy to have 2 of the top projects on this list.
1:00:05 But the other thing that we point out here is that if you screen this list by advancement on environmental assessment or permitting processes, The reality is here, I think there are maybe 3 projects that could see a shovel go in the ground in Canada between now and 2030. And we think Spring Pool is certainly amongst those 3. So there's a lot of the projects on this list that haven't really even started in an environmental assessment process. You know, Florian has made some good comments, Keith as well around, you know, one of the things that investors have become concerned about particularly with North American Canadian assets is this permitting timeframe, permitting risk. That's something that we are really starting to see that awareness switch has really been flipped amongst politicians in Canada, amongst the general public, amongst regulators.
1:01:10 You know, coming through the tariffs and some of that disruption as we have over the last few months, There is a real, I think, grassroots desire to see these projects move forward more quickly. The reality is we're going to hear a lot in the next few months about governments, you know, aiming to speed up permitting processes. It's not gonna help us very much at SpringPool, honestly, because we're sort of at the front of the queue, but I think it could have a really big impact on how quickly we may be able to move forward DuParcay in the future. And just so we talk about sort of how we see the value in the company. Call it net asset value based on our technical reports, our preliminary economic assessment at DuParcay and our pre-feasibility study at Springpole.
1:01:59 Those reflect a value of about $1.80 a share. And we're trading today at about $0.16 a share. So a big gap there. Typically, historically, you'd see projects that get through environmental assessment processes trading at, we call it 0.4 to 0.6 times that fundamental value. We're still a long way just to play catch up on that value. But the important thing to understand, and this is why these development projects give such good leverage to the Gold price, is that that $1.82 a share really represents Springpole with those economics run at a $1,600 Gold price. So less than half of the spot price today and with DuParcay run at an $1,800 Gold price. When you adjust those for the changes in Gold price in the environment that we're seeing, particularly as think back to Florian's view of, call it a near-term consolidation around $3,000, We're starting to see long-term consensus averages working their way up into that $26, $27, $2800 value. Some of them are now, even from analysts, are at $3,000.
1:03:10 Every $100 in the Gold price is $250M of after-tax net present value for our projects. So when you go back to that $1.82 and look at that at a $2,500 Gold price, that's in excess of $4. You look at that at a $3,000 Gold price, it's in excess of $6 a share of fundamental value. And again, you can buy these shares for $0.16 today. So I'll just talk a little bit about the projects here, give you a bit of a sense of some of the timeline and catalysts. So this shows our Spring Pool Gold project located in northwestern Ontario. One of the things that's really unique about Spring Pool is it's one of very few big projects capable of producing more than 300,000 ounces a year. That's sort of how we had it scoped in our pre-feasibility study.
1:04:05 We're about 90% of the way through a feasibility study here. That work will likely get completed after we get the environmental assessment decision at the end of December. And we have a 70,000 hectare land package around the project with some very interesting and perspective exploration. They won't dwell on the numbers here, but it's a large and very robust mine. It's a significant capital project. And I think importantly, it has the opportunity to drive a lot of infrastructure and much needed infrastructure up towards some of the communities that we're working with around Springpool. So all season roads, really delivering on road and power infrastructure to help open up that area of northwestern Ontario over the longer term. So we've been a lot of work that's gone into the scoping of this project.
1:05:00 You know, the deposit does sit right now in the Bay of the Lake. The development plan involves building dikes and dewatering this this Bay of the Lake for an open pit. You know, we've been studying the aquatic habitat here for more than 15 years. Just an enormous amount of work to go into understand potential impacts on water quality, on geochemistry, to make sure that we can very safely develop, build, operate, and close this mine without negative consequences over the long term to the environment. So anyone who wants to learn more about this, there is a 15,500 page environmental assessment, final environmental assessment document on our website is a lot of detail you can get into. And we often hear the question, oh, is this done in other places in Canada?
1:05:54 The reality is in the far north, there are a lot of open pit mines. Most open pit mines have to deal with this kind of water because the surface in northern Canada is about 50% water. So we're not doing anything here that really hasn't been done before in different regions, although obviously needs to be tailored to the specific context of where we're developing. So just a bit about where we are on this environmental assessment process. We know about timelines on these things because we've been in that process since 2018, but really sort of put it into, put the real push on our EA process starting in late 2020.
1:06:42 Important to understand, we submitted a draft environmental assessment in 2022. We've been talking with regulators about this, that document for 2 and a half years and had a lot of really good feedback that we incorporated into the final EA, which we submitted in November of last year. We're through a public comment period on that now, and we're just in this period of back and forth information requests. We've received lots of information requests and clarification from regulators, federal and provincial, from the indigenous communities that we're working with around the project. Lots of really good work that's being done right now. But ultimately, we aim to be through that comment response period, particularly on the federal side over the next couple of months. And then at that point, the regulators move on to finish their own review and write up that decision document. So targeting that decision again, federally targeting it towards the end of December. So major, major milestones and catalysts coming up for the project there. I won't go into the exploration, but just to say that, you know, we think that there is obviously lots of room over the longer term to see the project grow.
1:08:02 And DuParcay, again, this is 19km of strike on the Porcupine Destor fault. Why is that important? I mean, this, you can see the location of DuParcay here. This is literally the middle of the Abitibi Gold Belt, one of the most prolific and sought-after Gold districts in the world. More than 200Moz of Gold produced in the Abitibi in the last 100 plus years. And lots of Gold produced out of DuParcay. So this was actually one of the largest Gold producing mines in Quebec in the 1930s. And we've got a very robust PEA that we did on this project in 2023 that shows, again, 200,000oz a year plus of production. Very attractive, all in sustaining costs and cash costs in the project. And that's really only looking at producing 2.5 million ounces from what is, you know, a 3.5 million ounce measured and indicated plus 2.5 million ounce inferred resource sitting at DuParcay. So again, we also continue to think that that resource is going to grow and had some good exploration results this morning.
1:09:09 Really filling in the gaps on this project. One of the things to understand is what we acquired when we bought this project in 2022 is more than 270,000m of drilling on this deposit. Very well understood. There's been a lot of work that's been done on it. It was taken to a pre-feasibility study in 2014. It really is in terms of understanding the project, a really advanced stage. But what we're most excited about is the fact that we know that it's going to continue to grow. The only reason we don't have resource adept in this eastern part of the deposit is it hasn't been drilled. So we're now systematically going through, connecting some of these dots here on some of the more shallow mineralization, extending some of that resource to depth, including finding what we think are new and higher-grade zones on the edges of the deposit, both the north and the south, which is exciting and more to come on that in the near future here. And then again, filling in a lot of these gaps here and extending the mineralization.
1:10:19 So we think this is going to obviously continue to grow. Lots of good work that's going on and you'll continue to see more results coming out on DuParcay as we sort of chart the path forward there. But in the interest of time, I think at that point, I will stop my screen share and I'll turn it back over to Romeo so we can get to a few questions. Awesome. Thank you so much, Dan. And for those interested in DeepRack, we do have a webinar on Friday with the geological team. I'll send the invite in the chat so you guys can sign up for it. One question. Florian, I'll actually shoot it to you first, if you're still around. This is one that came early in the hour. And somebody asked, what happens with gold prices when the US reinstates physical gold back onto the balance sheet on July 1st under Basel III. They're curious if you think that's going to lead to a higher gold price or if that's already been baked in by the market?
1:11:11 Yeah, interesting question and Definitely an important question. Well, I think generally speaking, we can expect the reclassification of gold as a Tier 1 asset under the Basel III, most likely to put upward pressure on gold prices over the next few months and years. You can also make the argument that to a certain extent it is already priced in. That might be true. But I think what we're going to see is continuous increased demand from banks, especially the US banks, but also other financial institutions are most likely to increase their holdings because gold is now 100% marked at its value as a tier 1 asset.
1:12:05 It used to be marked down by 50% and classified as a lower tier asset. So that will change as of July 1st, 2025. And definitely the market might have priced in that to a certain extent. And of course, it's meeting that strong physical demand from China at the same time. So it's going to be very interesting. I think the central bank activity has clearly signaled the confidence in gold's role as a monetary asset. And this will further support the price. And the only central bank basically that came out and said something negative about gold was the ECB of course, my friends here in the Eurozone.
1:12:51 They basically expressed their worries that gold could instabilize, gold's volatility could instabilize the system, which I think is totally absurd. So, bring it together, I think overall a certain part of it might be priced in already, but we will see more upward pressure through this reclassification over the coming, probably, 6 to 24 months. Great. Thanks so much. Keith, I've got one from you, but it's about first mining. So I'll let Dan get in after you've had a chance to speak. Somebody notes as a long time first bank shareholder, obviously they want the share price moving higher. They want to know, in your opinion, what needs to happen first for that? Is that a higher sustained gold price or a company specific event like that spring pull permitting being finalized? I was just looking for your take on that. Well, I think Dan covered it quite well on one of the slides where he looked at the developers and we're not quite in that category yet. We're kind of in this zone where we're kind of pre-development in a way.
1:13:51 So I think over the next 6 to 12 months, I would expect to see a re-rating as a result of us getting through this EA process and starting the permitting process. And then we could be elevated up into that next tier that Dan pointed out on that slide. And, you know, you see the big uptick, you know, going from $9 an ounce where we're currently trading to I think it was $70 an ounce on the next tier up. So that's a pretty big move. And, you know, obviously there's no guarantees in life, but that's why I like buying the stock at these prices, despite the fact that I hate seeing it at these prices. It's ridiculous, whereas trading, when I put the company together back in 2015, 2016, we had a market cap of $600 million. Fortunately, back then I was able to raise a substantial amount of money to pay for the company's business for the next few years after that.
1:14:42 But, mining is a very cash-intensive industry and business, and if you don't have revenues, you've got to keep raising capital. And we're raising capital at prices that none of us really like but you know at the same time we're advancing 2 of the most important gold mines in Canada. So you know you know I think what we're doing with shareholders' money is great. That's why I keep supporting the company and keep supporting Dan. Because if people want to sell their shares at these prices, then it's unfortunate. But I'll remain to be a buyer and keep adding to my position as time goes along. Great. Thanks, Keith. Dan, I don't know if you had any additional thoughts on that. No, I think that's it. I think one of the things about being a value buyer and fundamentally that's kind of what Keith was when he put this thing together is we've had to work through a lot of things with these assets and they still to this day have a bit of legacy perception and the number of people who kind of think they know if they haven't really dug into it.
1:15:51 You know I think that's starting to change but it's still you have to kind of overcome that inertia and particularly with everything around Springpole and and the development plan. There's been at you know originally I think a healthy degree of skepticism about the ability to get there, but I think we've done the work and I think people can actually see that now and make a judgment. So I totally agree with Keith that this is just a huge opportunity. Perception is going to catch up with the reality at some point. When that does, it's a very clear difference in the value and starts reflecting what we really think the fundamental value of these projects are. Great.
1:16:36 Keith, I got a couple of questions for you. 1, summarizing a number of questions from the chat, people are looking for your take on how the environment is for regulation in Mexico right now. Are there any changes in the Shinebomb administration? What does it mean for companies like First Majestic? Well, there's huge changes. We've received 2 major permits just in the last 2, well, 4 weeks. It was interesting because we were contacted by the government, or at least Canamex was contacted. Canamex is the body that all the miners belong to and they're kind of our voice at the federal level. And they were contacted by the new administration and they said, hey, show us all the permits that you've been trying to get for the last 5 years and the ones that are critical.
1:17:24 So we submitted our list and all the other mining companies submitted their list and there was hundreds and hundreds and hundreds of permits that were obviously submitted to the government to review. And they've been ticking them off one at a time. And a lot of mining companies have been news releasing if you've been paying attention that they've received this permit and that permit. And we haven't news released, us getting permits because we're such a big company and you know getting a permit for a tailings dam expansion is not exactly you know something material that shareholders are very interested in but for us you know as a producer you know we need 10-year you know tailings dam life and we're looking you know 5 years into the future So we need that permit in place to expand that tailings dam for another 5 to 10 years. So they're important permits long term. And these are the types of permits that we've been getting. So it's a big improvement from the last administration.
1:18:15 Great. No, I appreciate that extra context. Also summarizing a number of comments, I think Keith, folks are just looking for a small update on Jarrett Canyon, so I'll throw it to you for that. Yeah, sure. Well, last year it was a bit disappointing. The contractor imploded upon himself. He brought bad equipment to site and I actually don't know all the details, but what I do know is they didn't achieve their objective. So we were supposed to drill 25,000 meters of drilling last year and we only reached 4,000. So it was almost a non-event and quite disappointing. So we've now got new contractors starting in the next couple of weeks going back and doing that same program. We've also have an independent third party doing a mine plan study to rebuild the mine plan to get it back up and running. We're also doing a capital expense review on what it's going to take to get the mill back up and running again. We need to winterize it so we don't have the same challenges we had back at late 2022 when that big winter storm came through and basically shut the mill down.
1:19:23 So we can't have that happen again. So that's all coming to place and we expect to have all our news releases on the results from drilling and We hope to have some economic studies completed by the end of 2025. Great. Thank you. Dan, one question. John from the chat asks, is the Springpole mine still on the list to be fast-tracked permitting-wise, or has the recent federal government lack of change put that in jeopardy? No, so it was on a proposed list by the Conservative Party in terms of priority projects that they would have looked to a fast track. So that was kind of the context of that. I think we are seeing very similar thoughts being put forward by the new federal government.
1:20:15 I think the one thing that came out of that election is sort of everyone recognizing that For Canada have a degree of its own economic independence We need to do a better job at permitting and developing, you know, responsibly developing the natural resources that we have in the country. And I think everyone kind of recognizes that. The one thing I would say is I don't know that there's, you know, there's a miraculous fast track that's gonna happen. This isn't gonna be like the US where Trump says, okay, in 14 days, you're going to get your permits. I think for us, you know, we're sort of at the tail end of what has been a long process. And what we're proud of is that, you know, we've been providing a lot of capacity and trying to work really collaboratively with a lot of the communities that are going through a major assessment of this project right now. And that in Canada is going to be a really important part of if we are going to, you know, look for ways to shorten permitting timeframes, in my mind it comes down to primarily how are we going to provide incentives and capacity to Indigenous communities to participate early and often in these projects.
1:21:30 So we've had the good fortune of having spent a couple of days this week with the technical teams and senior leadership with a couple of communities we're working with and, you know, really appreciate all the work and the toll that this work takes on those communities, because it takes a lot of capacity to move through and understand these huge projects that are going to have big impacts on the communities. So it's important that that stuff gets done right. But for us, where I think that becomes interesting is a lot more on what's the path forward to DuParquet. Because there was a scenario that we might take a different approach to developing a DuParquet if we thought that was gonna be another 8 year combined federal and provincial process versus what I think now what the federal government is saying is we're trying to eliminate duplication.
1:22:29 We're trying to stay in our lane of jurisdiction, and we're going to rely very heavily on the provinces to do that stuff. And so you've seen Ontario make some very strong statements about, you know, its path forward in trying to move it forward. But I think everyone understands that, yeah, we're going to need, really need to make sure that whatever the context of this you know fast tracking is it's primarily it's going to need to involve early engagement and capacity funding opportunities and outlining the economic opportunities for the indigenous communities around it first. Great, thank you, Dan. I got one question on macro for silver that I'll throw to Florian and then close it off by throwing the same question to Keith. Ian asks, how long can the silver deficit continue before price inelasticity forces the silver price higher? Florian, I'll throw it to you first.
1:23:25 Good luck, Florian. Well, I mean, it's a classic example of the fact that markets can stay longer oversold or longer overbought than anyone can imagine. Right. And I mean, gold at 3,300 and a gold silver ratio at 100. It's I think none of us here would have thought that this is possible. But here we are. I mean, the global silver market is projected to remain in a structural deficit the fifth year in a row now. I think we have a shortfall of around 117 million ounces And we have supply growth and a modest demand contraction. But well, I mean, there is a fundamental undersupply and I think it will not take another few years. It is probably just a question of a few months, maybe up to 12 months, Because you have to remember 75% of the silver is produced as a byproduct.
1:24:19 So that means it's rather inelastic at this part of the supply and then the other 25% basically coming from primary silver producers. And I don't see any new silver producers coming online over the next 12 months. I mean, Keith maybe might know more than me, but I think the above ground inventories are continuously declining. So yeah, I think price inelasticity is likely to push silver prices higher over the next 5 to 12 months. I wouldn't be surprised if silver shows suddenly up over the next few months. I mean, it's still lagging, but it will come. I don't think it will take another few years. I think within the next 12 months, you're going to see much more higher silver prices than today.
1:25:12 Thanks, Florian. Keith, I don't know if you have any additional thoughts beyond that. Well, you know, the trading ratio is pretty shocking. You know, when the miners are producing, you know, for every 1 ounce of gold worldwide, only 7 ounces of silver. You know, there's supposed to be 16 ounces of silver in the Earth's crust, according to the scientists. And, you know, we can't even, you know, get to 16, you know, and having a 7 there. It's it's, you know, we're trading at over a hundred. I think around a hundred to 1. If someone could explain that to me, I would love to listen to them. But you know, part of the issue is, you know, it's it's the banking system in the way that the whole system works is, you know, the miners deliver our gold and silver to the banks, you know, and the banks then take it and do whatever they want to do with it. And in the case of silver, it goes into industry. In the case of gold, it goes into central banks, vaults, and private investors, and so on and so forth.
1:26:07 But those banks are technically short that metal for a period of time before they can actually deliver it to the consumer, wherever that may be. So in the case of BMW or Tesla or Samsung or Sony, they have an order in with HSBC to sell them 50 million ounces of silver over the next 12 months at a fixed price of 33 bucks or whatever. And so that bank has a short position in the COMEX to counteract that long, that trade that they have to deliver into. And if the market gets too far offside, if all of a sudden, you know, I think we're going to see $40 by the end of the year, but $40 is going to start to hurt some of these banks. So what do they do? Do they have to go into the paper markets and cover the short? Does the compliance walk into the trading desk and tap the guy on the shoulder and say, hey, what's going on here?
1:26:59 We have this liability in our books. What do these trading departments do? And then all of a sudden, you know, they can't deliver X metal, you know, X amount of metal to, you know, you know, the port wherever it's going. And then, and, you know, that same compliance guy walks up to the trader and say, what the hell? You're short so much paper, we can't even deliver the metal. Go buy some metal. Fill this trade. So those are the kinds of things I think are going to happen, because these deficits are not going to go away. The ball is rolling. We're not going to turn the lights off on the planet. We're actually turning more lights on. We're electrifying the planet. There's 3 billion people in the world that don't have electricity.
1:27:45 They want electricity. They want refrigerators and cell phones and all the nice gadgets we have. And we need to build nuclear plants. We need to build electrical infrastructure. And we're going to be building a lot more gadgets. So, you know, the consumption is going to continually climb. And I don't see any new supply coming online over the next 10 to 20 years. I can't disagree with you there. Now I know we're at the end of time. I did want to give the 3 speakers just an opportunity to tell investors why they might take this opportunity to look at their company. So I'll give you all 30 seconds, starting with you, Keith, then Dan, and then Florian to talk about Midas right at the end. Hundreds of people in the room, let them know why they should look at First Majestic. Sure, because there's lots of things. I could spend more than 30 seconds on that. But hey, look, We're the third largest silver producer trading in North America.
1:28:36 I think we're likely probably one of the most undervalued because of the acquisition we've just done. We've created a huge liquidity event, as I tried to touch on in my presentation. So we issued quite a lot of shares, you know, for the Los Gatos transaction and a lot of those shareholders had never seen liquidity before. They'd never seen a profit before. So, all of a sudden, you know, there's a huge shareholder base, some of which have added to their position. You know, some sold maybe half and some have gone out of the position completely. But nevertheless, it did create a large liquidity event. So you know, since that transaction closed, the stock has pretty well gone sideways. I remember the last time silver was at $30, our stock was $25 a share. And now the stock is $6 or $7.
1:29:22 So I think there's a huge opportunity for a re-rating coming. It's just a matter of time. For me, we have 2 of the largest undeveloped Gold projects in Canada and one of the most advanced from any kind of permitting and environmental assessment process. We're trading at significantly depressed long-term values and have massive leverage to the Gold price going forward. So lots of catalysts coming up over the course of the next 6 to 12 months and a really good time to be looking to investing in in first money. Yeah. Finally my company Midas Touch Consulting.
1:30:08 I'm the managing director and I've been in the precious metals markets now for the last 25 years. I've seen basically every and any intraday chart of gold. I'm a technical guy. I'm a trader. I'm a speculative investor myself. So I'm on your side, the investor side. I've done all the mistakes in investing in mining stocks. And I learned slowly but surely the lessons and I publish weekly, daily and even monthly in-depth research on gold, silver, also on Bitcoin. We've been very early with the digital assets as well. I focus on those 2 because I believe in sound money. I laid out my macro big picture in the beginning and I think that gold, silver, mining stocks, certain other commodity plays and also Bitcoin is a great combination to basically secure your wealth and profit from what's happening and what's coming in the future. So that's what we're doing. Everything is free and available on our website, MidasTouch-Consulting.com, and also a sub-stack where I publish the daily gold call and also silver call.
1:31:19 And we have a Telegram channel. I think there was a question in the chat here. It is supposed to be in English. I mean, the Germans, unfortunately, sometimes just continue to talk in German, but generally it's international mastermind group of mining and gold and silver investors from all over the world, exchanging ideas, exchanging news. And I can just invite everyone to join us there. Awesome. Thank you so much, Florian. One thing I'll say, just because he would hate if I didn't. Anyone with questions for First Mining Gold can contact Paul Morris. His email address is paul.firstmininggold.com. I know he'll be watching this video, so I thought I'd throw that in there at the end. But Keith, Dan, Florian, thank you so much. This was a really great conversation. Thanks everybody for joining us. Like I said, I'm going to be giving the transcript of the chat to the respective companies so they can get back to you for the questions I wasn't able to get to. I think this was a really great 90 minute session, so really appreciate everybody for joining us. Hope everybody has a great end of their day.
