Marathon Gold Corp. [MOZ-TSX; MGDPF-OTC] has added two years of mine life and 827,000 ounces of gold to the mix in an updated Preliminary Economic Assessment of its Valentine Lake gold project in Newfoundland.
The project’s after-tax Net Present Value rose to US$493.2 million from US$366.7 million, discounted at 5% with an Internal Rate of Return climbing to 30% from 25%.
The Valentine Gold Camp currently hosts four near-surface, mainly pit-shell constrained, deposits. The majority of the resources occur in the Marathon and Leprechaun deposits, which also have resources below the pit shell. Both deposits are open at depth and on strike.
Gold mineralization has been traced down over 350 metres vertically at Leprechaun and almost a kilometre at Marathon.
The four deposits outlined to date occur in a 30-km gold trend on the property, with much of the 24,000-hectare property having had little detailed exploration activity to date.
The Valentine Lake Gold Camp is accessible by year-round roads and is located in close proximity to Newfoundland’s electrical grid. Marathon maintains a 50-person all-season camp at the property.
The Preliminary Economic Assessment study is based on an initial 12-year mine life and foresees average annual production of 225,000 ounces of gold at a life-of-mine, all-in sustaining cost, of US$665 an ounce. Pre-production capital is estimated at $355 million, the company said.
“This updated study has benefitted from 20,000 metres of additional drilling since February 2018, 9,000 historical screen assays on historical drill core since the last PEA resource, and an internal review of the project,” the company said.
It went on to say that the measured and indicated resource tonnes increased by 35% to 45.1 million tonnes, the grade declined by 7% to 1.854 g/t gold and the total contained ounces of gold increased by 26% to 2.7 million ounces. Meanwhile, the inferred resource tonnes increased by 55% to 26.8 million tonnes, the grade decreased by 11% to 1.774 g/t gold and the contained ounces of gold increased by 30% to 1.53 million ounces of gold.
Additional drilling in 2019 will focus on extending the higher-grade zones in the pit shells as well as infilling open material to move inferred resources into indicated and measured resources.
The Valentine Lake Project consists of two gold recovery operations: They include a milling/flotation/carbon and lead plant. The mill will process 3 million tonnes per annum of high-grade mineralized material
The heap leach pad will process 3 million tonnes per annual of low-grade mineralized material from open pit operations and will consist of crushing, heap leaching and carbon-in-column gold absorption. The loaded carbon from the heap leach facility will be sent to the mill for gold recovery.
On Friday, Marathon Gold shares were up 1 cent to 80 cents. The 52-week range is 73 cents and $1.28.