Northwest gold deposit has pit potential: Twelve-year mine life pegged for First Mining's Springpole project.

• Position: MINING

A consultant for First Mining Finance said there's good potential to build an open-pit gold and silver mine under a lake in northwestern Ontario.

The Vancouver mine developer released a preliminary economic assessment (PEA) for its Springpole Project that shows a 12-year mine life for its deposit located 110 kilometres northeast of Red Lake.

The report's authors, SRK Consulting, recommend moving to a pre-feasibility study.

The Springpole project is located in a remote area and covers 32,448 hectares. It's regarded by First Mining as "one of Canada's largest undeveloped gold projects."

The deposit contains 139.1 million tonnes of gold and silver-bearing rock in the indicated category at a grade of 1.04 grams per tonne (g/t) of gold and 5.4 g/t of silver.

The PEA maps out a single pit shoveland-truck operation with a milling, crushing, grinding and carbon-in-pulp leaching operation.

Building a mine and processing mill complex will be $586-million endeavour with $117 million in spending over the mine's life.

The development is based on prices of $1,300 per ounce of gold and $20 per ounce of silver.

First Mining picked up Springpole from Gold Canyon Resources in 2015, which had performed a PEA back in 2013 and conducted much of the project's exploration drilling.

The recoveries are projected to be 80 per cent for gold and 85 per cent for silver.

The average annual production is pegged at 296,500 ounces gold and 1,632,000 ounces silver.

Before carving out the pit, a portion of Springpole Lake would have to be drained since the deposit is under a bay.

Approximately 21.7 million cubic metres of water--or six per cent of the lake's surface area--would have...