Marathon Gold Corporation (“Marathon” or the “Company”;
TSX: MOZ) is pleased to provide an update on progress at
its 100% owned Valentine Gold Project located in central
Newfoundland (the “Project”) for the quarter ended June 30, 2023.
Two full quarters of construction have now been
completed at the Project since major mobilization commenced in
January 2023. During June 2023, the Project exceeded 500,000 hours
of site work completed without a lost time incident. At the end of
the second quarter, overall completion at the Project stood at
35%, with engineering at 87%,
procurement at 60%, and construction at
15%. The Project remains on track for first gold
production in the first quarter of 2025. Currently, 454 Marathon
employees and contractors are employed or providing services to the
Project, 80% of whom are residents of Newfoundland and
Labrador.
Matt Manson, President and CEO, commented:
“Construction at the Valentine Gold Project has moved into summer
months with strong progress being made in each of our principal
work fronts of mining, process plant, and Tailings Management
Facility (”TMF”). During the second quarter our permanent camp was
completed and occupied, and a second mining shift was mobilized. At
the time of this report, earthworks at our process plant site have
been completed and foundations are being poured. We expect to see
continued good progress going into the fall, and the Project
remains on track for first gold in Q1 2025, consistent with our
previous guidance. After almost 10 months since site activities
began, we are pleased to be reporting a safe and environmentally
protected work site, and strong engagement from our Newfoundland
and Labrador based construction team and contracting partners.”
Figure 1: Valentine Process Plant Site, Looking
South, July 2023. TMF: Tailings Management Facility, MMF: Mine
Maintenance Facility
Matt Manson continued: “This second quarter
report includes a description of certain purposeful design
modifications we are making in the process plant following detailed
engineering. These modifications, which include a more operable
layout and a larger Carbon-in-Leach (CIL) recovery circuit, will
give us the opportunity to push past the initial 2.5 Mtpa
throughput currently scheduled for the first three years of the
Project, making more use of the mill’s 4 Mtpa crushing and grinding
design capacity. This is expected to add approximately C$33 million
to the cost of the mill but offers accelerated processing expansion
and increased gold production. As of June 30, 2023, we are
reporting an updated cost to complete of the Project, inclusive of
these modifications, of C$391 million, with C$113 million spent and
C$271 million committed, representing an overall budget adjustment
of C$40.5 million, or 8%.”
Site Progress ReportProcess
Plant Site Preparation and Foundations
Figure 2: Overview of Process Plant Site. July
2023
During the second quarter preparation of the
process plant site progressed steadily (Figures 1 and 2).
Overburden material was removed to bedrock in the area of the main
mill building, reclaim area, grinding mill and recovery circuits,
and tails thickener, and a construction pad of mined rock back-fill
created. Pads have also been completed at the Mine Maintenance
Facility site and ROM stockpile. Each of the principal load bearing
sites, such as the reclaim area, SAG and Ball Mill area, and leach
tank farm were developed with engineered granular back-fill and in
some cases ground improvement cemented rock fill. All have now
successfully achieved geotechnical specifications for mill
foundations (Figure 3). Subsequent to the quarter end, the process
plant site was transferred to the civils contractor for structural
concrete foundation work, marking the end of major process plant
earthworks. At time of writing, foundation work is ongoing at the
SAG and Ball Mill and tailings thickener, and transformers have
been delivered and installed on their footings at the electrical
substation. Marathon publishes monthly timelapse videos of the
progress of the process plant site at https://bit.ly/3QneDhJ.
Figure 3: Concrete Slab and Formwork, SAG/Ball
Mill (top left), Transformer Installation (top right), Tailings
Thickener Concrete Pour (bottom). All July 2023
Mining
Figure 4: Mining at the Leprechaun Pit (left,
looking NE) and Overburden Removal at Marathon Pit (right, looking
SW), July 2023
Mining during the Project’s construction period
is ongoing to generate rock for haul roads, pads and the TMF. As of
June 30 2023, 2.1 Mtonnes of waste rock construction material and
235 ktonnes of overburden material had been moved, consistent with
forecast targets. A second mining shift commenced at the end of
May, and during June 2023 the Project average daily mining volumes
in excess of 16 ktonnes per day, adequately compensating for lower
productivity at the beginning of the quarter attributable to the
spring thaw. Overall, mining productivity and equipment
availability remain excellent. Subsequent to the second quarter,
overburden removal commenced at the Marathon pit ahead of planned
third quarter pre-stripping and mining (Figure 4).
Tailings Management Facility (TMF)
Tree clearing for the first phase of the
Project’s TMF was completed during the first quarter of 2023, and
construction commenced in May. The TMF is scheduled to be developed
over a 16 month period, to be ready to receive commissioning water
in the third quarter of 2024. Construction is being undertaken by
Marathon’s principal earthworks contractor JCL Inc. under the
supervision of WSP (formerly Golder Associates Inc.). Initial
earthworks involve overburden removal and the construction of a 4
km downstream toe-road along the leading edge of the TMF berm from
which construction will be staged (Figure 5). Temporary water
management trenches and sedimentation ponds are also being
developed. Advancement of this road is being undertaken from the
southwest and northeast ends of the TMF simultaneously, allowing
construction rock for the main construction effort to be sourced
from the nearby Marathon mining pit. At time of writing, 2.5 km of
toe-road had been completed and work was progressing well.
Figure 5: Construction of the Toe Road for the
Tailings Management Facility. Advancement of the construction
toe-road from the southwest (left) and northeast (right)
simultaneously, July 2023
Permanent Camp, Powerline and Infrastructure
During May 2023, Phase 1 of the Project’s
permanent accommodation complex with 352 beds was completed and
occupancy permits issued. Average occupancy during June was
approximately 250 persons. Subsequent to the quarter end, the Phase
2 double story dormitory was delivered and its assembly commenced
(Figure 6). Ultimate capacity will be 425 beds, sufficient for mine
operations and giving excess capacity if required in support of the
construction schedule.
As of June 30, 2023, right-of-way clearing and
pole installation had been completed by NL Hydro along the full
44.5 km length of the Project’s 66 kV powerline, and by July
conductor stringing had also been completed. Engineering and
procurement for the planned modifications to the Star Lake
generating station hook-up are well advanced, and the line is
expected to be energised on schedule in November. This means that
mill construction and camp operations in 2024 will be on grid
power, minimising the need for diesel generators and limiting
on-site fuel requirements to the mobile mining fleet and the TMF
construction contractor.
During April and May 2023, soft road conditions
on the Project’s 80 km access road from Millertown impacted site
activities, such as the movement of people and the deliveries of
equipment and consumables. During the third and fourth quarters of
2023, upgrades will be performed on the road in areas identified as
the highest priority, so as to provide greater reliability during
the spring 2024 construction season and into mine operations. As a
further mitigation, critical mine deliveries will be scheduled
outside the spring season and a light vehicle traffic management
plan initiated.
Figure 6: Permanent Camp showing installation of
Phase 2 Dorms), July 2023
The 80km road from Millertown to the Valentine
Gold Project is public infrastructure, and with its connection to
the historic Burgeo Highway it provides an alternate
cross-Newfoundland vehicle route. Marathon’s investment in this
road, including the 2022 replacement of the Victoria River Bridge,
creates a significant societal and economic benefit for the
Province of Newfoundland and Labrador.
Mill Design Optimization
The December 2022 Updated Feasibility Study for
the Valentine Gold Project presented a processing schedule and mill
design based on 2.5 Mtpa ore throughput for years 1-3, followed by
an increase to 4 Mtpa in Year 4. This is to be accomplished by
building a mill with a 4 Mtpa crushing and grinding capacity but
operating it initially at an effective 63% utilization (2.5 Mtpa)
with a fine grind and a simple gravity-CIL leach flow sheet. In
this design, throughput expansion is achieved by coarsening the
grind, allowing more ore to be passed through, and making certain
modifications to the mill’s recovery circuits, such as adding more
leach capacity and a regrind and flotation circuit, so as to
maintain gold recoveries on the coarser mill feed.
In the development of the detailed engineering
for the mill, certain design modifications have now been made that
will have the effect of making it easier to ramp up the mill past
its planned 2.5 Mtpa utilization earlier, allowing more ore to be
fed through the initial flow sheet before significant expansion
capital is required to be spent. This will allow the mill’s
operators to fully test the limits of the initial mill design, on
the basis that ore supply is not expected to be a limiting factor.
The modifications are also expected to de-risk operability and
provide for better mill availability.
Mill design changes being implemented are:
- 4Mtpa Grinding Circuit. Improved
layout with a larger footprint giving ease of maintenance and
better operability at higher through-puts;
- 4Mtpa Gravity Circuit. Optimized
for easier expansion past 2.5Mtpa and pre-designed capacity for a
second, parallel gravity concentrator if required;
- >2.5Mtpa CIL Recovery Circuit.
Optimized for easier expansion past 2.5Mtpa, with an additional
large leach and aeration tank, larger CIL tanks, and pre-installed
concrete foundations and piping for additional leach and detox
tanks; and
- Future
Flotation and Regrind Circuits. Not originally contemplated for
Phase 1 construction and no change. Process plant pad has been
built to accommodate modular addition, if and when required.
Figure 7: 4 Mtpa Process Plant Design, 60% 3D
Model, July 2023. Illustrated: Grinding circuit with larger and
more operable footprint, CIL recovery circuit designed now with
larger tanks, additional large leach tank (blue) and concrete
foundations and piping for bolt-on additional tanks (green). Future
potential flotation and regrind circuit (green) unchanged.
A short video describing the mill design can be
found at https://bit.ly/3DXtybb
Schedule and Budget
Capital costs incurred from the start of early
works in October 2022 to the end of June 2023 were C$113 million
with C$ 271 million committed (excluding sunk costs of C$71 million
incurred prior to October 2022). The Project’s cost to complete,
including contingency, was estimated at C$463 million as at October
31, 2022 and C$391 million at June 30, 2023, reflecting a variance
trend against budget of +C$40.5 million, or 8%. C$33 million of
this variance is related to the design modifications in the process
plant described above. As at the end of June 2023, Marathon had
approved contingency draws of C$7.3 million from a total
contingency reserve of C$38.9 million. Unused contingency stood at
C$31.6 million. Contingency draws are approved on a
package-by-package basis as construction proceeds.
The Project’s critical path construction
activity is the development of the process plant, including its
foundations, building enclosure, equipping, and commissioning as
well as the TMF (Figure 7). Earthworks associated with the
development of the TMF are scheduled over two summer construction
seasons and one winter season so as to allow operating tailings
commissioning in the second half of 2024. The project remains on
schedule to achieve mill commissioning in Q4 2024 and first gold in
Q1 2025.
Figure 8: Valentine Gold Project Construction
Schedule, July 2023
Marathon maintains a risk register and cost
trend analysis in its project control practices. Costs for goods
and services procured in variance to the Project’s control budget
are identified as cost trends until contracted and are subject to
potential re-bidding or scope assessment. Contracted cost variances
to budget may form approved contingency draws or, in the absence of
an appropriate contingency allowance, an adjustment to the
Project’s estimated cost at completion. A management reserve has
been created for savings achieved on goods and services procured
below budget.
Human Resources
At the end of June 30 2023, 454 persons were
employed directly or contracted to the Project. Marathon collects
diversity employment data on the basis of voluntary declaration. On
this basis, 18% of the persons employed by the Project are female
and 4% are Indigenous persons. 28% are residents of the six
communities within the Project’s socio-economic area of influence
(Millertown, Buchans, Buchans Junction, Grand Falls Windsor, Badger
and Bishop’s Falls) and 80% are residents of the province of
Newfoundland and Labrador.
Direct employment within Marathon Gold
Corporation currently stands at 168 persons, of which 18% are
female and 4% are Indigenous persons. 47% of the Company’s
employees are residents of the Project’s six local communities and
92% are provincial residents.
Construction Permitting and Berry
Environmental Assessment
The Valentine Gold Project was subject to the
Newfoundland and Labrador Environmental Protection Act (“NL EPA”),
associated Environmental Assessment Regulations, and the Canadian
Environmental Assessment Act (“CEAA, 2012”). In September 2020,
Marathon submitted an Environmental Impact Statement (“EIS”) to the
Impact Assessment Agency of Canada (“IAAC”) and the NL Department
of Environment and Climate Change (EA Division) to meet the
requirements of CEAA (2012) and the NL EPA respectively, in
accordance with the project-specific guidelines issued by the
federal and provincial governments. The scope of assessment for the
EIS included the site access road, Marathon Complex (pit, waste
rock facility and associated infrastructure), Leprechaun Complex,
Processing Plant/TMF Complex, and associated site infrastructure.
The Valentine Gold Project was released from the provincial
Environmental Assessment (“EA”) process on March 17, 2022, and the
federal EA process on August 24, 2022.
Upon release from the provincial and federal EA
processes, numerous approval, authorization, and permit
applications were prepared and submitted for approval. Major
permits and authorizations issued prior to construction start up in
October included the Mining Lease, the Surface Lease, the Approval
of the Early Works Development and Rehabilitation & Closure
Plan, the Approval of the Construction Environmental Protection
Plan, the Early Works Certificate of Approval for Construction, all
issued by the NL Departments of Environment and Climate Change and
Industry, Energy, and Technology. The important authorization
issued at the federal level was the Federal Fisheries Act
Authorization from Fisheries and Oceans Canada.
Permitting for specific site activities will
continue throughout the mine development process in accordance with
the construction schedule. At the end of June 30, 2023, overall
permitting progress stood at 89% complete, with site permitting
proceeding fully consistent with, and in support of,
construction.
The Berry Complex will be subject to further EA
requirements to identify, assess and mitigate potential
environmental effects during all project phases, including
construction, operation, decommissioning, rehabilitation and
closure and post-closure. From the provincial EA perspective, the
addition of the Berry Complex will be considered a new undertaking
requiring EA registration. Federally, the Berry Complex addition
will be considered a change to the Designated Project, requiring a
similar submission, as described in the federal regulator’s
Decision Statement conditions. Marathon has completed an effects
assessment for the Berry Complex and is conducting consultation
with both the provincial and federal regulators, communities,
Indigenous groups, and stakeholder groups ahead of filing the EA
documentation, expected shortly. Regulatory review of the Berry
Complex is expected to proceed through 2023 and 2024, consistent
with the permitting and development schedule set out in the
December 2022 Updated FS, which assumes first Berry ore in the
second quarter of 2025.
Qualified Persons
Disclosure of a scientific or technical nature
in this news release has been approved by Mr. Tim Williams,
FAusIMM, Chief Operating Officer of Marathon, Mr. Paolo Toscano,
P.Eng. (Ont.), Vice President, Projects for Marathon, Mr. James
Powell, P.Eng. (NL), Vice President, Regulatory and Government
Affairs for Marathon and Mr. David Ross, P.Geo. (NL), Vice
President of Geology and Exploration for Marathon. Mr. Williams,
Mr. Toscano, Mr. Powell and Mr. Ross are qualified persons under
National Instrument (“NI”) 43-101.
About Marathon
Marathon (TSX:MOZ) is a Toronto based gold
company advancing its 100%-owned Valentine Gold Project located in
the central region of Newfoundland and Labrador, one of the top
mining jurisdictions in the world. The Project comprises a
series of five mineralized deposits along a 32-kilometre system. A
December 2022 Updated Feasibility Study outlined an open pit mining
and conventional milling operation producing 195,000 ounces of gold
a year for 12 years within a 14.3-year mine life. The Project was
released from federal and provincial environmental assessment in
2022 and construction commenced in October 2022. The Project has
estimated Proven Mineral Reserves of 1.43 Moz (23.36 Mt at 1.89
g/t) and Probable Mineral Reserves of 1.27 Moz (28.22 Mt at 1.40
g/t). Total Measured Mineral Resources (inclusive of the Mineral
Reserves) comprise 2.06 Moz (29.23 Mt at 2.19 g/t) with Indicated
Mineral Resources (inclusive of the Mineral Reserves) of 1.90 Moz
(35.40 Mt at 1.67 g/t). Additional Inferred Mineral Resources are
1.10 Moz (20.75 Mt at 1.65 g/t Au). Please see the NI 43-101
Technical Report “Valentine Gold Project, NI 43-101 Technical
Report and Feasibility Study” effective November 30, 2022,
Marathon’s Annual Information Form for the year ended December 31,
2021 and other filings made with Canadian securities regulatory
authorities available at www.sedar.com for further details and
assumptions relating to the Valentine Gold Project.
For more information, please
contact:
Amanda MalloughManager, Investor RelationsTel: 416
855-8202amallough@marathon-gold.com |
Matt MansonPresident & CEOmmanson@marathon-gold.com |
Julie RobertsonCFOjrobertson@marathon-gold.com |
To find out more information on Marathon Gold
Corporation and the Valentine Gold Project, please visit
www.marathon-gold.com.
Cautionary Statement Regarding
Forward-Looking Information
Certain information contained in this news
release, constitutes forward-looking information within the meaning
of Canadian securities laws (“forward-looking statements”). All
statements in this news release, other than statements of
historical fact, which address events, results, outcomes or
developments that Marathon expects to occur are forward-looking
statements. Forward-looking statements include statements that are
predictive in nature, depend upon or refer to future events or
conditions, or include words such as “expects”, “anticipates”,
“plans”, “believes”, “estimates”, “considers”, “intends”,
“targets”, or negative versions thereof and other similar
expressions, or future or conditional verbs such as “may”, “will”,
“should”, “would” and “could”. We provide forward-looking
statements for the purpose of conveying information about our
current expectations and plans relating to the future, and readers
are cautioned that such statements may not be appropriate for other
purposes. More particularly and without restriction, this news
release contains forward-looking statements and information about
the FS and the results therefrom (including IRR, NPV5%, Capex, FCF,
AISC and other financial metrics and economic analysis), the
realization of mineral reserve and mineral resource estimates, the
future financial or operating performance of the Company and the
Project, capital and operating costs, the ability of the Company to
obtain all government approvals, permits and third-party consents
in connection with the Company’s exploration, development and
operating activities, the potential impact of COVID-19 on the
Company, the Company’s ability to successfully advance the Project
and anticipated benefits thereof, economic analyses for the
Valentine Gold Project, processing and recovery estimates and
strategies, future exploration and mine plans, objectives and
expectations and corporate planning of Marathon, future
environmental impact statements and the timetable for completion
and content thereof and statements as to management's expectations
with respect to, among other things, the matters and activities
contemplated in this news release.
Forward-looking statements involve known and
unknown risks, uncertainties and assumptions and accordingly,
actual results and future events could differ materially from those
expressed or implied in such statements. You are hence cautioned
not to place undue reliance on forward-looking statements. In
respect of the forward-looking statements concerning the
interpretation of exploration results and the impact on the
Project’s mineral resource estimate, the Company has provided such
statements in reliance on certain assumptions it believes are
reasonable at this time, including assumptions as to the continuity
of mineralization between drill holes. A mineral resource that is
classified as “inferred” or “indicated” has a great amount of
uncertainty as to its existence and economic and legal feasibility.
It cannot be assumed that any or part of an “inferred mineral
resource” or an “indicated mineral resource” will ever be upgraded
to a higher category of mineral resource. Investors are cautioned
not to assume that all or any part of mineral deposits in these
categories will ever be converted into proven and probable mineral
reserves.
By its nature, this information is subject to
inherent risks and uncertainties that may be general or specific
and which give rise to the possibility that expectations,
forecasts, predictions, projections or conclusions will not prove
to be accurate, that assumptions may not be correct and that
objectives, strategic goals and priorities will not be achieved.
Factors that could cause future results or events to differ
materially from current expectations expressed or implied by the
forward-looking statements include risks and uncertainties relating
to the interpretation of drill results, the geology, grade and
continuity of mineral deposits and conclusions of economic
evaluations; uncertainty as to estimation of mineral resources;
inaccurate geological and metallurgical assumptions (including with
respect to the size, grade and recoverability of mineral
resources); the potential for delays or changes in plans in
exploration or development projects or capital expenditures, or the
completion of feasibility studies due to changes in logistical,
technical or other factors; the possibility that future
exploration, development, construction or mining results will not
be consistent with the Company’s expectations; risks related to the
ability of the current exploration program to identify and expand
mineral resources; risks relating to possible variations in grade,
planned mining dilution and ore loss, or recovery rates and changes
in project parameters as plans continue to be refined; operational
mining and development risks, including risks related to accidents,
equipment breakdowns, labour disputes (including work stoppages and
strikes) or other unanticipated difficulties with or interruptions
in exploration and development; risks related to the inherent
uncertainty of production and cost estimates and the potential for
unexpected costs and expenses; risks related to commodity and power
prices, foreign exchange rate fluctuations and changes in interest
rates; the uncertainty of profitability based upon the cyclical
nature of the mining industry; risks related to failure to obtain
adequate financing on a timely basis and on acceptable terms or
delays in obtaining governmental or other stakeholder approvals or
in the completion of development or construction activities; risks
related to environmental regulation and liability, government
regulation and permitting; risks relating to the Company’s ability
to attract and retain skilled staff; risks relating to the timing
of the receipt of regulatory and governmental approvals for
continued operations and future development projects; political and
regulatory risks associated with mining and exploration; risks
relating to the potential impacts of the COVID-19 pandemic on the
Company and the mining industry; changes in general economic
conditions or conditions in the financial markets; and other risks
described in Marathon’s documents filed with Canadian securities
regulatory authorities, including the Annual Information Form for
the year ended December 31, 2022.
You can find further information with respect to
these and other risks in Marathon’s Annual Information Form for the
year ended December 31, 2022 and other filings made with Canadian
securities regulatory authorities available at www.sedar.com. Other
than as specifically required by law, Marathon undertakes no
obligation to update any forward-looking statement to reflect
events or circumstances after the date on which such statement is
made, or to reflect the occurrence of unanticipated events, whether
as a result of new information, future events or results
otherwise.
Photos accompanying this announcement are available
at:https://www.globenewswire.com/NewsRoom/AttachmentNg/91241ec6-2390-453e-aafa-4dbeeded9130
https://www.globenewswire.com/NewsRoom/AttachmentNg/4594dcb5-61ad-4a81-873a-63e80fa4fe50
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