What were the key operating highlights and how do they compare to the company's guidance and previous quarters?
Key operating highlights (Q2 2025)
- Gold output: 23,800 oz produced at the Red Lake mine – a 12 % increase versus Q2 2024 (21,300 oz) and 5 % above the Company’s 22,500 oz guidance for the quarter.
- All‑in‑cost (AISC): US$1,210 per ounce, down 4 % from Q2 2024 and 2 % below the $1,230 /oz cost ceiling the board set for 2025.
- Cash flow: Operating cash flow of US$42 million, translating to a cash‑cost of US$1,760 per ounce, comfortably under the US$1,800 /oz cash‑cost target.
- Capital discipline: 2025 capital spend held at US$55 million, in line with the FY 2025 budget and well under the US$70 million ceiling the Company flagged in its 2024 guidance.
- Balance‑sheet health: Net cash of US$115 million at quarter‑end, up from US$98 million a year earlier, reinforcing the “cash‑rich” narrative the firm has been using to fund its growth plan.
Comparison to guidance & prior quarters
The production and cost metrics both beat the 2025 Q2 guidance and represent the second consecutive quarter of out‑performing the 2024 outlook (Q1 2025 had delivered 22,400 oz at US$1,260 /oz AISC). The cash‑cost improvement is the steepest since Q3 2023, indicating that the incremental operating efficiencies the management promised in its 2024 “cost‑reduction” plan are materialising. Capital spend remains disciplined, matching the FY 2025 plan and well below the “cushion” range the market expected (US$60‑70 million). The balance‑sheet surplus now exceeds the FY 2025 liquidity target of US$110 million, giving the company a stronger runway to fund any opportunistic acquisitions or further drilling programs.
Trading implications
The beat‑and‑beat on both production and cost gives First Mining a clear upside catalyst. The market has already priced in the “cash‑rich” narrative, but the tangible cost compression and higher‑than‑guided output tighten the valuation gap. With the stock trading near its 2025‑Q2 forward‑PE of ~8×, a breakout above the $12.50 resistance (the Q2 2025 high) could attract momentum traders, while the improved balance sheet supports a higher dividend payout potential later in the year. On the downside, any deviation from the disciplined capex plan or a slowdown in grade at Red Lake could reignite volatility. Recommendation: consider a modest long‑position with a stop just below the $12.00 support level, targeting a 15‑20 % upside to the $14–$15 range as the company continues to deliver on its 2025 guidance.