Generation advances on Ontario palladium news
Generation Mining Ltd. [GENM-TSX; GENMF-OTCQB] on Monday May 10 released results from winter drilling on targets which are immediately adjacent to its Marathon palladium-copper deposit in northwestern Ontario.
The company recently completed a positive feasibility study which contemplates the development of an open-pit mining operation with robust project economics over a 13-year mine-life. In that period, the mine is expected to deliver 1.9 million ounces of palladium, 467 million pounds of copper, 537,000 ounces of platinum, 151,000 ounces of gold and 2.8 million ounces of silver.
The study forecasts an internal rate of return (after-tax) of 29.7% and a net present value (6.0%) of $1.07 billion based on a long term-price of US$1,725 per ounce for palladium and US$3.20 a pound for copper.
Current exploration activities are focused on evaluating the potential for high grade, ramp accessible resources which could, in the future, potentially extend the life of the proposed operation.
On Monday, Generation described the results from the first few holes as “very encouraging.” The 3,000-metre winter program was cut short to 2,000 metres due to early spring conditions. However, four holes were drilled and three were fully completed.
Highlights includes three high-grade intercepts consisting of 3.19 g/t palladium over 4.0 metres in Hole 553 from 470 to 474 metres, 4.3 g/t palladium over 4.0 metres in Hole 554 from 410 to 414 metres, also in Hole 554, 3.06 g/t palladium over 4.0 metres from 450 metres to 454 metres.
These intercepts sit within a broad zone of mineralization at least 100 metres wide and approximately 50 to 100 metres thick and some 300 metres down-dip from the western margins of the Marathon Deposit.
On Monday, shares advanced 4.8% or $0.05 to $1.08 on volume of 319,690.
The company plans to increase its summer drill program to approximately 8,000 metres.
“We continue to have a great deal of success by drilling step-out holes along the feeder zone corridor,” said CEO Jamie Levy. “We are very excited to hit high-grade down-dip from the Marathon Deposit and we are beginning to see the potential to define the resource in this area.”
The Marathon palladium project hosts the largest platinum group metal resources in North America.
Generation acquired a 51% stake in the Marathon property from Sibanye Stillwater [SBGL-NYSE ADRs] in July, 2019. It can increase its interest to 80% by spending $10 million over four years. More than $3 million has already been spent. However, Stillwater has certain back-in rights that can bring its interest in the property back to 51% after Generation Mining has earned 80%.
The Marathon property is lcated about 215 km east of Thunder Bay and 8 km north of Marathon, Ontario, northwestern Ontario.