Toronto-headquartered Marathon Gold has unveiled an updated preliminary economic assessment (PEA) for the Valentine Lake Gold Camp, in Newfoundland, announcing a 44% increase in the recovered gold and improved economics.
Compared with the May 2018 PEA, Valentine Lake will deliver 827 000 oz more recovered gold at 2.72-million ounces, producing an average of 225 100 oz/y over a 12-year mine life. The previous study estimated total recovered gold of 1.89-million ounces, for 188 500 oz/y over a ten-year life.
The updated study calculated an after-tax net present value (NPV) of $493-million using a 5% discount rate. The financial model shows an after- tax internal rate of return (IRR) of 30% and a capital payback period of 2.5 years. The May study estimated an NPV of $597-million and an IRR of 34%.
Marathon president and CEO Phillip Walford explained that the updated study benefited from 20 000 m of additional drilling since February, 9 000 metallic screen assays on historical drill core since the last PEA resource, and an internal review of the project.
“For example, initial and sustaining capital costs have been cut by leasing the mining fleet instead of purchasing it. The very positive improvements in production and mine life are attributable to this year’s successful drilling programme to extend the openpit resources at the Marathon deposit, a major gold deposit that continues to grow thereby driving expansion of the project. Early near-surface higher grade resources with a low strip ratio at the Marathon deposit enable high gold production in the early years of the operation and a fast payback of capital,” he said.
Walford added that the PEA had capitalised on several opportunities identified in the May PEA, and there was still room for further improvements to the mine plan and economics for the 2019 prefeasibility study.