Marathon discovers new gold trend at Victory deposit

Prospecting and trenching southwest of Marathon Gold's (TSX: MOZ) Victory deposit in central Newfoundland have uncovered a new 1500-metre-long gold trend.

A channel sample returned 2.71 grams gold per tonne over 9 metres, while grab samples from newly exposed outcrop and trenches returned 53.2 grams gold, 29.95 grams gold, 23.02 grams gold, 17.34 grams gold, 8.59 grams gold, 8.09 grams gold, 4.79 grams gold, 4.65 grams gold, 4.36 grams gold and 3.85 grams gold.

The company says trenching over the 1500-metre strike length, proximal to the Valentine Lake Thrust Fault, exposed multiple zones of en-echelon stacked, gentle southwest dipping QTP-gold veining that is "identical" to the mineralizing system found elsewhere throughout Marathon's Valentine Lake gold camp, including its Marathon, Leprechaun, Victory and Sprite deposits.

"The new extension of gold showings in trenches is very encouraging in providing an opportunity to further increase the open-pit resources in the Victory area," Phillip Walford, Marathon's president and CEO, told The Northern Miner.

A drill rig has been mobilized to further explore the new gold zone and prospecting and trenching are continuing in the southwest Victory gold trend area.

The Victory deposit, which hosts 126,000 ounces of gold grading 1.5 grams gold, is about six kilometres northeast of the company's Marathon deposit, which contains 2 million ounces of gold grading 2 grams gold per tonne.

Marathon's 240-sq.-km Valentine Lake Gold camp currently hosts four known, near-surface deposits with measured and indicated resources totaling 2.14 million oz. gold at 1.99 grams gold and inferred resources totaling 1.11 million oz. gold at the same grade. All of the deposits are open to expansion.

The majority of the gold resource defined so far is at the Marathon and Leprechaun deposits. The Marathon deposit was discovered five years ago and the Leprechaun deposit in the late 1990s.

Marathon Gold's Valentine Lake gold project in Newfoundland. Credit: Marathon Gold.

A recent preliminary economic assessment envisioned production of 188,500 ounces of gold a year over the first decade, with a payback of just under three years. The study estimated a post-tax net present value of US$367 million and an internal rate of return of 25.3%.

"Given the recent uncovering of each deposit (Marathon and Leprechaun), combined with the lack of significant exploration in the area prior to Marathon's involvement, we see significant expansion potential beyond the 3.2 million ounces currently defined in the last resource estimate, with more than 18 kilometres of strike length still to be explored," writes Mick Carew of Haywood Securities.

"The recent results [of prospecting and trenching near the Victory deposit] demonstrate the expansion potential of the Valentine Lake project area, with a large proportion of the northeast-southwest striking structure associated with gold mineralization at Valentine Lake still untested ... these results suggest the Victory resource could expand both in terms of grade and total ounces."

Further drilling on the extensions of Marathon's current deposits is part of the company's plan, "but new areas for open-pit resources could help us to reach our goal faster," Walford says via email.

"We want to see our current average production rate from the recent PEA move from 189,000 ounces of gold on average over ten years to 200,000-plus ounces over ten years just on open pit material."