Generation Mining signs MOA with Biigtigong Nishnaabeg for Marathon project

Generation Mining (TSX: GENM; OTC: GENMF) has signed a memorandum of agreement with the Biigtigong Nishnaabeg (BN) First Nation that covers the […]
The local First Nation will benefit significantly from the Marathon palladium-copper project. Credit: Generation MIning.

Generation Mining (TSX: GENM; OTC: GENMF) has signed a memorandum of agreement with the Biigtigong Nishnaabeg (BN) First Nation that covers the company’s Marathon palladium-copper project. The property is located 10 km from the town of Marathon in northern Ontario, and is in the midst of an environmental impact assessment review.

Recognizing that the BN First Nation has businesses that can contribute as the mining project advances, the company has made four commitments. 1) It will collaborate on sustainable community-based business opportunities;  2) It will support local businesses with training, professional development, long-term employment, and growth; 3) It will support partnerships to help the BN First Nation members to gain management experience in the mining industry; and 4) It will support the BN First Nation reach their goals of growing their businesses sustainably. Additionally, some contracts will be sole-sourced to BN First Nation businesses to further maximize economic benefits for the local community.

Feasibility study and streaming deal

Generation Mining’s focus is on its 100%-owned Marathon project for which it released a feasibility study last year. After taxes, the net present value at a 6% discount rate is $1.1 billion and the internal rate of return will be 29.7%.

The initial capital cost to production is $665 million, plus sustaining capital of $1.1 billion and closure costs of $66 million. Payback will occur in 2.3 years. The company announced a streaming deal in December with Wheaton Precious Metals (TSX: WPM) that will account for part of the cost - $240 million.

All-in sustaining costs per ounce palladium-equivalent are estimated to be US$687. Price assumptions of US$1,725 per oz. palladium and US$3.20 per lb. copper were used in the study.

The Marathon mine is expected to have a life of 13 years after two years of construction. During the life of the project, production is estimated at 2 million oz. palladium, 493 million lb. copper, plus platinum (934,000 oz.), gold 183,000 oz.) and silver (3.8 million oz.).

Total measured and indicated resources are 244.9 million tonnes grading 0.53 g/t palladium and 0.2% copper. The inferred resource is 33.8 million tonnes at 0.4 g/t palladium and 0.22% copper. Within the resources, are proven and probable reserves of 117.7 million tonnes grading 0.619 g/t palladium and 0.21% copper.

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