Marathon Gold Corporation's (TSX: MOZ) Valentine Lake project is the largest gold resource in Atlantic Canada with four near-surface deposits called Marathon, Leprechaun, Victory and Sprite.
The majority of the resources are found in the Marathon and Leprechaun deposits, which also have resources below the current open-pit shell. Gold mineralization has been traced down over 350 metres vertically at Leprechaun and 1 km at Marathon.
Last year the junior grew the Valentine Lake camp's pit-constrained indicated resources by 46% to 2.69 million ounces of gold contained within 45.15 million tonnes grading 1.85 grams gold per tonne and boosted inferred resources by 51% to 1.53 million ounces of gold in 26.86 million tonnes grading 1.77 grams gold per tonne.
"We've rapidly increased the resource over the last year and we see lots of potential to continue to do that," says Marathon Gold President and CEO Phillip Walford, adding that the average discovery cost of just $10 per oz. is "probably one of the best in the business."
The four deposits identified so far occur over a 20-km system of gold-bearing veins, and much of the 240 sq. km property has yet to be explored.
A preliminary economic assessment (PEA) completed in 2018 estimates that the project would support an open-pit mine life of 12 years producing a total of 2.73 million ounces of gold, or 225,100 ounces of gold annually, at all-in sustaining costs of US$666 per ounce. The PEA did not incorporate any of the underground resources at Marathon.
Pre-production capex of US$355 million could be paid off in 2.5 years, given that the Marathon deposit's near-surface higher grade resources will allow for higher gold production in the early years. Both open pits at Marathon and Leprechaun would generate significant tonnage of mill feed above 4 grams gold in the first two years of operations to help keep the gold production a higher levels.
The PEA estimates an after-tax net present value at a 5% discount rate of US$493 million and a post-tax internal rate of return of 30%. The mine plan envisions two gold recovery operations: a milling-flotation-carbon-in-leach plant and a heap-leach plant, with the option of adding high-pressure grinding rolls ahead of the heap leach and a coarser grind in the mill that could reduce operating costs.
Results of metallurgical test work on material from Marathon and Leprechaun to optimize mill and heap leach recoveries will be ready in the second quarter of the year, with a prefeasibility study expected before year-end.
Meanwhile, the company is preparing the project description which it must submit to regulators at the provincial and federal level.
The majority of the work in 2019 however will be drilling of one kind or the other-from resource and conversion drilling to infill, geotechnical, metallurgical, and condemnation drilling.
The 2019 program will focus on infill drilling at the Marathon and Leprechaun deposits to reduce inferred resources in the pit shells. Exploration drilling at the Sprite "Gap Area" will take place after the infill drilling is completed.
In early February, Marathon released results from the first drill holes of its 2019 exploration drill campaign that Walford says support the company's geological model.
The holes intersected wide zones of quartz-tourmaline-pyrite-gold veining with abundant visible gold in the open-pit core of the main mineralized corridor in the Marathon deposit.
The holes confirm the lateral continuity of the higher-grade gold mineralization between adjacent drill holes at shallow depths.
Hole MA-18-348 returned 3.92 grams gold over 23 metres from 14 metres downhole, including 8.98 grams gold over 4 metres, and hole MA-18-349 cut several good zones, with 2.10 grams gold over 29 metres from 201 metres downhole, including 5.43 grams gold over 4 metres.
Says Walford: "It's important that we can demonstrate to everyone that the higher-grade zones have continuity both along strike and across the zone and it looks like it's doing just that."
- The preceding Joint-Venture Article is PROMOTED CONTENT sponsored by Marathon Gold Corporation, and compiled in cooperation with The Northern Miner. Visit www.marathon-gold.com for more information.