NEWFOUNDLAND – An updated preliminary economic assessment of Marathon Gold’s Valentine Lake project in Newfoundland, which was based on 20,000 metres of additional drilling since February, among other work, demonstrates stronger economics than an earlier PEA completed in May.
The new PEA estimates the project will produce 2.72 million oz. of gold, an average of 225,100 oz. per year, over a 12-year mine life. The earlier study outlined a mine life of 10.2 years, for total production of 1.90 million oz. of gold, or an average annual production of 188,500 oz.
Both studies use a gold price of US$1,250 per oz.
Valentine Lake’s measured and indicated resources in the updated study jump by 35% to 45.15 million tonnes; the grade declines by 7% to 1.85 g/t gold per tonne; and the total contained ounces increases by 26% to 2.69 million oz. of gold. Inferred resource tonnes increase by 55% to 26.86 million tonnes; the grade declines by 11% to 1.77 g/t gold; and the contained ounces increase by 30% to 1.53 million oz. of gold.
The latest study lowers preproduction capex by US$25 million to US$355 million and trims the post-tax payback period from 2.8 years to 2.5 years. Initial and sustaining capital costs were cut by leasing the mining fleet rather than buying it, while early near surface higher grade resources with a low strip ratio enable higher gold production in the early years of the operation and a fast payback.
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