'I'm really excited about how that excess cash flow gets re-deployed' - First Mining Gold Dan Wilton
Gold producers are sitting on a surprise windfall due to high metal prices, said First Mining Gold CEO Dan Wilton.
Last week Wilton spoke to Kitco at the Vancouver Resource Investment Conference 2023.
First Mining Gold (TSX:FF) is a Canadian gold developer focused on the development of the Springpole gold project in northwestern Ontario and the Duparquet gold project in Quebec, two of the largest gold projects in Canada. At Springpole, the company commenced a feasibility study, and permitting activities are also ongoing.
Wilton noted the turnaround in markets from a dismal end to 2022, with gold shooting up strongly in the new year, staying above $1,900 ounce for several days.
"I think gold is playing catch up," said Wilton, who added that markets are looking past the central banks and the strong U.S. dollar, which slowed gold. "We are at a pivot point with interest rates."
Wilton added that "unprecedented gold buying from central banks" also supports the metal.
Gold producers were not expecting the metal to be trading at these levels.
"The producers ran their budgets for 2023 ... at $1,500 to $1,600 an ounce gold, so you have gold producers today sitting with $400 to $500 per ounce of excess free cash flow—genuinely free cash flow," said Wilton.
"I think that is what I'm really excited about: how that gets redeployed either given back to shareholders or redeployed by the companies themselves that need to bolster their development pipelines because they just haven't invested in exploration and development for a decade,” he added
Coverage of Vancouver Resource Investors Conference 2023 sponsored by First Mining Gold.