The first economic assessment of Marathon Gold’s (TSX: MOZ) Valentine Lake gold project in Newfoundland could host a “very robust” and “low cost” operation, president and CEO Phillip Walford says.
The much anticipated study outlined an 11-year mine life and life-of-mine production of 1.90 million oz. gold, or 188,500 oz. per year, at average cash costs and all-in sustaining costs of US$557 per oz. and US$595 per oz. gold, respectively.
Pre-production capital is forecast at US$380 million and could be paid back in just under three years.
The after tax net present value at a 5% discount rate is an estimated US$367 million, and the post-tax internal rate of return would be 25%. The study used a base-case US$1,250 per oz. gold price.
“The preliminary economic assessment (PEA) is a milestone, and it does show that there is a potential mining operation there because of the strong economics,” Walford says in an interview.
Continue reading at The Northern Miner.