My thesisI saw some historical analysis of free cash flows of gold miners. That has stayed pretty constant over the years despite marked increase in gold price. Most of the ore being mined is large deposits of relatively low grade about 1-2 g/t. (including credit metals). And inflation has made it more and more costly to process every ton of rock. Equipment costs more, labor, energy, taxes. And the deposits are deeper. The risk is that gold price keeps going up but miners will make the same or less. The ONLY answer to this is to get more dollars out of every ton of rock. One way is to pray that gold prices keep rising. But a better way is to find a huge deposit near surface with really high grade like in the "old days". That is why Swan deposit at Fosterville is such a bonanza - it is not shallow but it is very high grade.
That is the promise of NFG Keats and Iceberg discoveries (and many others). The maiden resource estimate will make that abundantly more clear. They may be approaching an ounce per ton of gold at some relatively cheap to mine shallow mineralized zones. 2 grams of AuEq/ ton makes for $160 a ton rock at current $2600 gold price. An ounce of gold/ton (31 grams) makes for $2600 a ton rock. The cash flow just increases exponentially because the cost to process a ton of rock has a big fixed component. I think this is what attracted Eric Sprott to this project. He has always maintained that grade is highly important, even as new very large relatively low grade deposits are being mined profitably (at current prices) by Agnico Eagle and other majors. And as shuttered intermediate grade mines are being re-opened. NFC has potential to be higher grade than many current and planned projects and that leverage could make for very impressive cash flow. Just due to the marked different in $ for every ton of rock mined and processesd.