Toronto-listed Marathon Gold on Thursday announced a formal decision to proceed to construction of the Valentine gold project, in Newfoundland and Labrador, following the recent successful completion of the project’s provincial and federal environmental assessments.

The company also announced a new cost to completion figure of C$470-million to C$490-million, including early works to be carried out in the fourth quarter. This compares with the C$305-million initial capital cost contained within the project’s April 2021 feasibility study.

“After more than three years of environmental assessment we have now been approved by the regulators to move forward with its development,” said president and CEO Matt Manson.

He said the company’s decision to proceed with construction of the Valentine project considered the impact of almost two years of market inflation on the project’s costs, as well as a necessarily cautious approach to project management, contingency and scheduling.

The new cost assessment incorporates market inflation, as well as the reallocation of costs previously characterised as sustaining capital items into the initial capital period. The new assessment also incorporates certain scope changes relating, principally, to updated staffing levels and the impact of moving from the 22-month construction schedule contained within the feasibility study to the current 28-month construction schedule.

Chairperson George Faught said the board was “firmly convinced” that Valentine is a mine that needs to be built.

“The detailed work completed by the Marathon team over the past two years, combined with the number of successful permitting milestones achieved, including the full release from provincial and federal environmental assessment, supports our collective decision to build the largest gold mine in Atlantic Canada.

“We are also convinced of the exploration upside and long-term potential that the Valentine gold project holds and are grateful for the support of all the stakeholders involved with us as we commence with this much anticipated capital project.”

Marathon is assessing the potential for Berry to comprise a third mining pit in the project’s production schedule. This new “3-Pit” mine plan is expected to show an increased mineral reserve, an extended mine life, and a higher gold production profile compared to the existing plan.

The new study will constitute an updated feasibility study and will include the updated life-of-mine capital and operating cost assessments, and an updated financial evaluation.

The updated study will develop the incremental design and costs associated with the development of a Berry pit and waste rock facility. However, it will not require any changes to the mill flow sheet or processing strategy, its camp, its major facilities, its road and power infrastructure, the tailings management facility design, or the site’s overall footprint.

The future addition of the Berry deposit to the project will require supplemental environmental assessment and permitting. Marathon currently assesses between 18 and 24 months will be required to complete this process. This allows sufficient time to bring Berry ore into the project’s mine plan upon the commissioning of the mill.