Published: June 3, 2021 |

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Marathon Gold Corporation released an update on its plans regarding the continued exploration and development of the Valentine Gold Project in central Newfoundland.

“The revised strategy for the Valentine Gold Project is about both doubling-down on our successful exploration efforts with more drilling, and establishing the best possible conditions for the successful delivery of the Valentine Gold Mine. We intend to push hard on our current EA and permitting process based on our existing project scope, and we plan to commence construction, on schedule, in early 2022,” said Matt Manson, Marathon’s president and CEO.

“However, we will be focused initially on the key infrastructure elements necessary for overall success: power, roads, camp and communications. This allows us to de-risk the construction of the more substantial site works, such as the tailings impoundment and the mine facilities, resulting in a mid-year mobilization for our civils work and the synchronizing of the construction schedule to the most favorable seasons. With infrastructure, full financing, and permits in hand, our strategy is to progress under the best possible project road map rather than the fastest. All the while, we will be increasing rather than decreasing our exploration activities, and testing our mineral resource inventory with an RC grade control program,” added Manson.

“By the time we commence major site works in 2022, we intend to better understand the full scale of the property’s mineral resource potential, to have validated the quality of our mineral resource estimate, and to have significantly de-risked the project for successful construction,” concluded Manson.

Marathon recently published a feasibility study (FS) for the project demonstrating robust economics for a conventional open pit mining and milling operation with low initial capital cost and high rate of return. An environmental assessment (EA) for the project is ongoing with federal and provincial regulators, and is expected to be completed later this year. Marathon’s 2021 exploration program continues to deliver strong results, with a recent mineral resource estimate for the new Berry Deposit demonstrating mine life extension potential for the project. On this basis, Marathon released the following:

• Expanding Exploration and Resource Drilling
An additional 50,000 metres of drilling will be targeted at the Berry Deposit, to be completed over the next 15 months. Together with drilling completed in 2020, and the 30,000 meters of drilling already budgeted for 2021, this will bring the total drilling inventory at Berry to approximately 120,000 metres by mid-2022, sufficient to establish Berry’s resource potential over its full 1.5 kilometer long extent. Marathon will also continue to aggressively pursue additional opportunities for resource growth elsewhere within the Valentine Lake property.
 
• Testing the Mineral Resource
Marathon will commence a reverse circulation drill program of approximately 8,000 metres on the Leprechaun and Marathon Deposits, designed to test resource reconciliation and grade distribution broadly over both deposits. The program will comprise 6 x 12 meter drill spacings to a depth of up to 50 meters, and will commence later this month. Results will be available by the third quarter of this year.
 
• Environmental Assessment Proceeding with No Change to Project Scope
Consistent with the company’s previously stated plans, Marathon will seek to complete the current EA process expeditiously, with no changes to the project scope or the mine plan described in the FS and the project’s environmental impact statement. This is based on two open pits at Marathon and Leprechaun and a central 2.5 to 4 million tonne per annum mill. Following release from the EA, and upon project approval, Marathon will commence applications for the site-specific sectoral permits required for the construction of this mine design.
 
• De-risking and Re-ordering Mine Construction
The FS contemplates project construction commencing immediately upon receipt of sufficient permits, with first gold pour in October 2023. With a view to optimizing the conditions for a successful on-budget and on-schedule project build, Marathon is assessing an execution strategy of first commencing construction on the project’s essential infrastructure elements, such as the NL Hydro powerline, site communication systems, camp facilities, and upgrades to access roads and bridges. With this well in hand, site-based construction would commence later in 2022. A development budget and schedule for this de-risked execution strategy, including a revised date of first gold production, will be prepared by the company in the fourth quarter of this year in support of a construction decision by the company’s board of directors. Detailed engineering in support of this work has already commenced.

Update on Project Financing and EPC Contract

The April 21, 2021 FS estimates an initial capital cost for the Valentine Gold Project of C$305 million. Full project financing will include additional provisions for working capital, financing and interest costs, mine closure guarantees, cost overrun facilities, and corporate costs. Marathon intends to finance the project with a combination of debt and equity. The company is currently engaged with a consortium of financial institutions under an indicative term sheet and mandate letter for a senior term loan facility.

Marathon is also engaged in discussions for a potential engineering, procurement and construction (EPC) contract for the Valentine Gold Project. The EPC contract, covering a substantial proportion of project scope and with fixed pricing provisions, would be designed to provide additional cost certainty on capital budget and the de-risking of project delivery. Discussions relating to this contract are ongoing.

Update on Communities and First Nations

On December 9, 2020 Marathon completed cooperation agreements with six central Newfoundland communities located close to the project. These are Buchans, Buchans Junction, Millertown, Badger, Grand Falls-Windsor, and Bishop’s Falls. The six agreements identify the interests of each community in employment, business opportunities, community investment, and environmental protection.

More recently, on May 4, 2021, Marathon completed a social and economic agreement (SEA) with the Qalipu Mi’kmaq First Nation. The SEA addresses matters such as access to employment and contracting opportunities by Qalipu members and businesses, education and training, environmental stewardship and monitoring, and community investment. A separate process is ongoing with the Miawpukek First Nation with a view to establishing ongoing engagement on similar terms.

Prior to the completion of the EA process, Marathon also expects to conclude a benefits agreement with the Province of Newfoundland and Labrador, which will include commitments on provincial employment and purchasing, with a focus on gender equity, diversity and inclusivity in the workplace. Negotiations towards the completion of the benefits agreement are ongoing. 

About Marathon Gold
Marathon is a Toronto based gold company advancing its 100 percent owned Valentine Gold Project located in the Central Region of Newfoundland and Labrador, one of the top mining jurisdictions in the world. The project comprises a series of four mineralized deposits along a 20-kilometre system.

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