Notes: 1. $/t is based on milling ore throughput of 2.5 Mtpa. 2. $/t is based on heap leach ore throughput of 3.0 Mtpa. 3. $/t is based on total throughput of 5.5 Mtpa. 4. Includes consumables for common elution, carbon regeneration & gold room areas. 5. Includes power for elution and carbon regeneration of carbon from heap leach and mill, gold room, and mine surface loads 6. Figures are rounded, and totals may not add correctly
Capital Cost
The capital cost estimate was based on an engineering, procurement and construction management ("EPCM") implementation approach and typical construction contract packaging.
Equipment pricing was based on quotations and actual equipment costs from recent similar Lycopodium projects considered representative of the Project.
All costs are expressed in US$ unless otherwise stated and are based on the Q1 2018 pricing. The estimate is deemed to have an accuracy of +/- 35%. The capital cost estimate conforms to AACEI (Association for the Advancement of Cost Engineering International) Class 4 estimate standards as prescribed in recommended practice 47R11.
Contingency
Contingencies were applied to the capital cost estimate on a line-by-line basis as an allowance by assessing the level of confidence in the engineering, estimate basis and vendor or contractor information. The contingencies do not cover scope changes, design growth, or the listed qualifications and exclusions. The resultant contingency for the capital estimate is 15% before taxes and duties.
Table 7 - Capital Estimate Summary by Area
Sensitivities
As indicated in Table 8 and Figure 2, project cashflow and NPV are particularly sensitive to changes in the price of gold while relatively less sensitive to changes in recovery, operating costs and capital expenditures. The table below shows the effect on the pre-tax economics of the Project increasing or decreasing the price of gold, capital expenditures, operating costs and mill and heap leach recovery estimates by up to +/- 10%.
Table 8 - Sensitivities, Pre-Tax
Figure 2 - NPV Sensitivity, Pre-Tax
Opportunities for Project Enhancement
The PEA identified several areas where additional work will advance the Project and reduce risk. The major focus of the work planned this year is summarized below:
Drilling is planned to expand and upgrade the Valentine Lake Gold Camp resources. The deposits are open at depth and along strike. Geological and geophysical studies indicate the structure hosting gold mineralization may continue both east and west of the current resources as well as down plunge. Addition of further resources through drilling has the potential to increase the life of mine and resulting economics.The underground resource has not been utilized in the PEA. Infill drilling could contribute an additional 800,000 ounces or more to be extracted using underground mining methods.Additional hydrogeological and geotechnical work will enable better open pit and underground designs.Further metallurgical testing for the mill and the heap leach may result in improved recoveries. Options such as high-pressure grinding rolls ("HPGR") ahead of the heap leach and a coarser grind in the mill could also have the potential to reduce operating costs with little impact on process recovery.Table 9 – Mineral Resource Estimate
Report Filing
The technical report prepared in accordance with National Instrument 43-101 will be filed on SEDAR and the Company's website within two weeks of this news release.
Qualified Persons
This news release has been reviewed and approved by the Qualified Persons noted below. The Qualified Persons have reviewed or verified all information for which they are individually responsible, including sampling, analytical, and test results underlying the information or opinions contained herein.
Neil Lincoln, P.Eng. – Lycopodium Minerals Canada Ltd.: processing, infrastructure, capital and operating cost estimates, economic evaluation and report compilation.Ryda Peung, P.Eng. – Lycopodium Minerals Canada Ltd.: mineral processing, metallurgical testing and recovery methods.Robert Farmer, P.Eng. – John T Boyd Company: mineral resource estimates, mining methods, mining capital and mining operating costs.Roy Eccles, P.Geo. – Apex Geoscience Ltd.: geology, exploration, drilling, sample preparation and data verification.Paul Deering, P.Eng. – Stantec Consulting Ltd. - environmental & social studies, geotechnical, tailings storage facility and heap leach pad design.Cautionary Statement
The PEA was prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”). Readers are cautioned that the PEA is preliminary in nature. It includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Conference Call Details
Marathon Gold is hosting a live Q&A conference call on May 17, 2018 at 10:00 am Eastern time (11:30 pm Newfoundland time and 7:00 am Pacific time) with the Marathon Gold executive team.
Toll-free number (Canada/US): 1-800-952-5114
Local dial-in number: 416-641-6104
International dial-in numbers: https://www.confsolutions.ca/ILT?oss=7P1R8009525114
Passcode: 4667468#
About Marathon
Marathon is a Toronto based gold exploration company rapidly advancing its 100% owned Valentine Lake Gold Camp located in Newfoundland, one of the top mining jurisdictions in the world. The Valentine Lake Gold Camp currently hosts four near-surface, mainly pit-shell constrained, deposits with measured and indicated resources totaling 2,137,400 oz. of gold at 1.99 g/t and inferred resources totaling 1,104,700 oz. of gold at 1.99 g/t. The majority of the resources occur in the Marathon and Leprechaun deposits, which also have resources below the pit shell. Both deposits are open to depth and on strike. Gold mineralization has been traced down over 350 metres vertically at Leprechaun and almost a kilometer at Marathon. The four deposits outlined to date occur over a 20-kilometer system of gold bearing veins, with much of the 24,000-hectare property having had little detailed exploration activity to date. Drilling in winter 2018 is continuing to focus on expanding the Marathon Deposit at surface and to depth as well as exploration drilling along the boggy covered area between the Marathon and Sprite Deposits.
The Valentine Lake Gold Camp is accessible by year-round road and is in close proximity to Newfoundland's electrical grid. Marathon maintains a 50-person all-season camp at the property. Recent metallurgical tests have demonstrated 93% to 98% recoveries via conventional milling and 50% to 70% recoveries via low cost heap leaching at both the Leprechaun and Marathon Deposits.
To find out more information on the Valentine Lake Gold Camp please visit www.marathon-gold.com.
For more information, please contact:
Christopher Haldane Phillip Walford
Investor Relations Manager President and Chief Executive Officer
Tel: 1-416-987-0714 Tel: 1-416-987-0711
E-mail: chaldane@marathon-gold.com E-mail: pwalford@marathon-gold.com
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Except for statements of historical fact relating to Marathon Gold Corporation, certain information contained herein constitutes “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”, “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. 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. These risks and uncertainties include but are not limited to those identified and reported in Marathon Gold Corporation’s public filings, which may be accessed at www.sedar.com. Other than as specifically required by law, we undertake 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, results or otherwise.