Toronto-listed Marathon Gold has presented an updated feasibility study for the Valentine gold project, in Newfoundland and Labrador, outlining plans for a three-pit mine plan with increased mineral reserves, an extended mine life and a higher production profile.
The study incorporates the same conventional openpit mining and milling strategy employed in the April 2021 feasibility study, but is based on three pits: the Marathon, Leprechaun and Berry deposits.
Marathon already has federal and provincial approval to mine at the Leprechaun and Marathon deposits – with early construction work having already started – and it will now work towards including the Berry deposits.
The addition of the Berry deposit will “significantly improve” the project’s production profile, president and CEO Matt Manson said in a statement.
In terms of direct, high-grade ‘mill feed’ (ore with a cut-off grade of 0.7 g/t gold), Marathon is now forecasting 195 000 oz/y over 12 years, compared with 179 000 oz/y over nine years previously. All-in sustaining cost (AISC) will average at $1 007/oz.
In the first three years, production will average 200 000 oz/y at an AISC of $890/oz.
“This is expected to generate substantial cash flow in the early years of mining,” said Manson.
“Our approach to mining Valentine is to present a large project with a high strip, supported by a high-grade mineral resource that we have focused on derisking, openpits optimised on cautious gold price cases of between $950/oz and $1350/oz, and a real-market operating cost build-up,” he said.
Other aspects of the mine design, such as the site layout, basic mill flow-sheet, mill expansion strategy, thickened tailings deposition strategy, 400-person camp, and low-cost site power via the NL Hydro power grid, remain as previously conceived.
The cost-to-complete estimate for Valentine is C$463-million, which is slightly below the C$470-million to C$490-million estimate guided in September.
“Since early works at the project have already commenced, our updated capital and operating cost estimates benefit from a level of procurement, labour force development and engineering design that is at a higher level than typical for a feasibility-level study,” noted Manson.
Marathon has more than 24 months during construction to bring Berry into the permitted mine plan in time for it to contribute to the first year of operations. The regulatory process that assesses the deposit will be primarily at the provincial level.
“The Valentine gold project is well on its way to being the largest gold mine in Atlantic Canada. It will be the most important new mining project in Newfoundland and Labrador since Voisey’s Bay, and a major contributor to the socio-economic wellbeing of Newfoundland’s central region.”