Published: March 6, 2023 |

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Marathon Gold Corporation has released an update on construction progress at its 100 percent owned Valentine Gold Project located in central Newfoundland. In December, 2022 Marathon released the results of an updated feasibility study for the project, describing a 3 pit-mine plan based on the Marathon, Leprechaun, and Berry Mineral Deposits.

Site early works commenced in October 2022. Major construction mobilization commenced in January 2023, with full site occupancy scheduled for April. At present, 442 Marathon employees and contractors are employed or providing services at the project site, 73 percent of whom were residents of Newfoundland and Labrador. Since October, 184,363 hours of work have been completed at the site with zero lost time incidents and zero reportable environmental incidents.

“We are providing today the first of what will be quarterly progress reports on construction at the Valentine Gold Project. We are appreciative of the team maintaining a safe working site since the commencement of our early works in October, despite challenging central Newfoundland winter conditions. Our permanent camp, which will initially have 352 beds, is nearing completion and will be available to support the major construction activities around the mill, which have commenced, and at the tailings management facility, which are scheduled to begin in the second quarter,” said Matt Manson, president and CEO.

“We are particularly encouraged by the progress of our mining ramp-up as we produce construction materials from the Leprechaun pit. After a winter start-up with a new team using new equipment and field-based maintenance services, we saw production rates achieved in February which will successfully support our construction schedule. We continue to see the sector-wide inflationary pressures reported by our peers, especially in labor and contractor rates, and are working to mitigate these through our procurement practices and scope control. Overall, this has been a solid start-up for what will be Atlantic Canada’s largest gold mine,” added Manson.

The project is maintaining its overall schedule for first ore delivered to the mill by the end of 2024 and first gold production in the first quarter of 2025. As of the end of January, 2023 overall completion at the project stood at 21 percent compared to a plan of 19 percent, with engineering at 61 percent compared to a plan of 68 percent, procurement at 41 percent compared to 32 percent, and construction at 5 percent compared to 8 percent.

EARLY WORKS COMPLETED

Early works activities between October and December focused on the construction of haul roads and pads, the establishment of a temporary construction camp, tree clearing and grubbing, earthworks associated with the project’s fresh water intake from the Victoria Reservoir, upgrades to the project’s access road from the community of Millertown, and replacement of the Victoria River Bridge.

The pad for the permanent camp was completed on December 25, 2022. Additional pads have been created for the low-grade ore stockpile, which will be utilized for the concrete batch plant, and laydown yards. To date, 10.5 kilometers of site roads have been completed, including the 5.2 kilometers of production haul road connecting the Leprechaun and Marathon mining pit areas to the centrally located process plant and major facilities site. Access to the process plant site was achieved on January 27, 2023.

Tree clearing and grubbing had been completed over a total of 193 hectares to the end of January, 2023, including at the Leprechaun mining pit, principal haul road, permanent camp, site roads, the fresh water intake right-of-way, overburden stockpile areas, the mill and major facilities site, the tailings management facility (TMF) site, and the route of the planned access road realignment around the TMF.

ENGINEERING AND PROCUREMENT

At the end of January 2023, overall engineering completion stood at 61 percent compared to a plan of 68 percent. The shortfall relates, principally, to delays in process plant engineering due to resource availability, including amongst vendors in the supply chain, in addition to rework on certain construction packages and layouts.

Procurement, at 41 percent compared to a plan of 32 percent, reflects completion of contracts for camp and camp services, tree removal, earthworks, engineering, construction management, power supply and substations, mobile mining equipment, fuel storage and supply, drilling equipment, explosives supply, concrete batch plant, road maintenance, communications, assay lab and utilities water treatment. Procurement is ongoing, amongst others, on HV substation installation, field fabricated tanks, civils and concrete works, pre-engineered mill buildings, and onsite power distribution.

Within the process plant, procurement has been completed on the ball and SAG mill, thickeners, screens, jaw crusher, motors, conveyors, the ADR plant and assorted mill fittings. Plant procurement is ongoing on electrical/instrumentation and piping/mechanical packages.

MINING

Mining activities since start-up in October 2022 have focused on the removal of overburden and the development of the Leprechaun pit as a source of waste rock for construction materials. Mining is operated by Marathon personnel, utilizing two CAT 6020B excavators, five CAT 777 haul trucks, two CAT 745 articulated haul trucks, CAT 374 and 349 excavators, a CAT 966 loader, CAT D10 and D9 dozers, a CAT 16M grader, two blasthole drill rigs, and assorted light duty and support vehicles. A temporary dome-shop maintenance facilities and fueling station have been established at site.

Quartz-Tourmaline-Pyrite vein mineralization was encountered in blasthole chips during mining for the first time on February 21, 2023.

CAMP

The project’s permanent camp was acquired in late 2021 and has been in storage in the community of Badger. Between December 2022 and February, 2023 all 39 modules for the camp’s phase 1 accommodation and 64 modules for common facilities were delivered to site and successfully installed. Interior fittings and appointments, plumbing and electrical, piping and drainage, roof sealing, the installation of arctic corridors and the provision of accessible access is ongoing. Phase 1 of the permanent camp, with 352 beds, is expected to be completed and occupied in early April. Phase 2 of the camp, which consists of two-story dormitory wing that will increase camp capacity to 425 beds, is scheduled to be delivered and installed in June, 2023.

The Valentine camp, including accommodation rooms, kitchen and common facilities, offices, and training rooms, has been modified to be fully electrically powered as opposed to its original propane-heat configuration. This is to take advantage of the low cost and renewable hydro-electric power available to the project, and reduce the project’s overall carbon impact during its life. The camp will operate on diesel gen-sets until site electrical power distribution has been provided.

Upon occupation of the phase 1 permanent camp, the temporary construction camp will be decommissioned. Facilities at the project’s exploration camp, such as the core and logging facilities, offices, and sample handling facilities will be preserved in their current location to support the project’s ongoing exploration activities.

COMMENCEMENT OF MAJOR CIVILS

Major civils mobilization commenced on January 30, 2023. Work during February focused on the preparation of the process plant and major facilities site. Following the completion of tree clearing and grubbing, the site was drained with ditching, and overburden removal and stockpiling commenced. Removal of overburden and the completion of a pad for construction is expected to continue through to the end of March, whereupon foundational and concrete forming work will commence. No bedrock blasting is currently contemplated. Major civils work at the TMF is scheduled to commence in April.

Marathon intends to continue civils work at the plant site through the spring break-up period of April to May, when site and access road conditions in the region traditionally deteriorate. In support of this plan, fuel and supplies are being stockpiled at site, the concrete batch plant is being pre-located, and allowances are being made for light vehicle use only for the access road for personnel movements, and an enhanced road maintenance response as required.

INFRASTRUCTURE

Road upgrades during October and November 2022 included the realignment of certain road curves to allow for safer transit of large loads, the replacement of culverts, leveling and grading, and the replacement of the Victoria River Bridge.

Construction of the project’s 66 kV powerline connection to the Star Lake generating station commenced with right-of-way clearing in October 2022 under the management of NL Hydro. Tree clearing and grubbing has been completed on 32 kilometers of right-of-way and 75 percent of poles have been delivered to the powerline easement. At January 31, 2023, powerline engineering stood at 95 percent completion, procurement at 100 percent and construction completion at 27 percent. Modifications to the Star Lake Generating Station are scheduled to commence this summer. First delivery of power to the project site is scheduled for October 2023, well in advance of project startup.

HUMAN RESOURCES

Currently, 442 persons are employed directly or contracted to the project. Direct employment within Marathon currently stands at 138 persons. 45 percent of the company’s employees are residents of the project’s six local communities and 91 percent are provincial residents.

ONGOING CONSTRUCTION PERMITTING AND BERRY ENVIRONMENTAL ASSESSMENT

The Valentine Gold Project was released from the provincial environmental assessment (EA) process on March 17, 2022, and the federal EA process on August 24, 2022.

Upon release from the provincial and federal EA processes, numerous approval, authorization, and permit applications were prepared and submitted for approval. Major permits and authorizations issued prior to construction start up in October included the mining lease, the surface lease, the approval of the early works development and rehabilitation & closure plan, the approval of the construction environmental protection plan, the early works certificate of approval for construction, all issued by the NL Departments of Environment and Climate Change and Industry, Energy, and Technology. Important authorizations issued at the federal level was the Federal Fisheries Act Authorization from Fisheries and Oceans Canada

Permitting for specific site activities will continue throughout the mine development process in accordance with the construction schedule. At the end of January 2023, overall permitting progress stood at 71 percent compared to a plan of 93 percent, although site permitting is proceeding fully consistent with, and in support of, the progression of site works. Recent permits received include approvals associated with the completion of the permanent camp, such as building accessibility and national building code approvals and wastewater treatment permits, as well as site-wide freshwater water intake permits, wetland infilling/dredging approvals, and approval for eight permanent sedimentation ponds. Approval for the life-of-mine development and rehabilitation & closure plans are expected shortly.

The Berry Complex is expected to be subject to further EA requirements to identify, assess, and mitigate potential environmental effects during all project phases, including construction, operation, decommissioning, rehabilitation, and closure and post-closure. From the provincial EA perspective, the addition of the Berry Complex will be considered a new undertaking requiring EA registration. Federally the Berry Complex addition would be considered a change to the designated project, requiring a similar submission, as described in the federal regulator’s decision statement conditions. Marathon has been developing an effects assessment for the Berry Complex and conducting consultation with both the provincial and federal regulators in support of filing an EA registration in the second quarter of this year. Regulatory review of the Berry Complex is expected to proceed through 2023 and 2024, consistent with the permitting and development schedule set out in the December 2022 updated FS, which assumes first Berry ore in the second quarter of 2025.

About Marathon
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 five mineralized deposits along a 32-kilometer system. A December 2022 updated feasibility study outlined an open pit mining and conventional milling operation. The project was released from federal and provincial environmental assessment in 2022 and construction commenced in October 2022.

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