Marathon Gold Corporation (“Marathon” or the “Company”;
TSX: MOZ) is pleased to provide an update on first quarter
construction progress at its 100% owned Valentine Gold Project
located in central Newfoundland (the “Project”).
Major construction mobilization at the Project
commenced in January 2023, following the commencement of early
works in October 2022. In the first quarter of 2023, 149,289 hours
of work were completed at the Project site with zero lost time
incidents and zero reportable environmental incidents. As of March
31, 2023, 440 Marathon employees and contractors were employed or
providing services to the Project, 72% of whom were residents of
Newfoundland and Labrador.
Matt Manson, President and CEO, commented: “The
first quarter of 2023 represented the first full quarter of
principal construction at the Valentine Gold Project. We are
pleased with the progress we have made to date, in particular with
mining productivity at the Leprechaun pit and the progress of
earthworks at the future process plant site. At time of writing, we
are preparing for the full occupation of our new permanent camp and
the commencement of concrete foundation work at the mill. This is
the first year that we have worked at Valentine through the spring
thaw, and we are grateful to our staff and contractors for their
patience and collaboration as we worked through the short-term
logistical challenges that this entailed. As we move into the
warmer weather months, we are pleased to report that construction
is tracking the overall project development plan well.”
Progress KPIs (to March 31,
2023)
At the end of the first quarter, overall
completion at the Project stood at 27% compared to a plan of 26%,
with engineering at 71%, procurement at 51%, and construction at
9%. The Project remains on schedule for first gold production in
the first quarter of 2025.
Capital costs incurred from the start of early
works in October 2022 to the end of March, 2023 were C$64 million
with C$144 million committed (excluding sunk costs incurred prior
to October 2022). The Project’s cost to complete, including
contingency, was estimated at C$463 million at October 31, 2022 and
C$403 million at March 31, 2023, reflecting a variance trend of
+C$4 million on the estimated cost at completion. Total contingency
draw stood at C$2.6M from a total contingency reserve of C$38.9M.
Unused contingency stood at C$36.2 million. Contingency draws are
approved on a package-by-package basis as construction
proceeds.
Mining
Mining in the Leprechaun pit commenced on
project start-up in October 2022, supplying waste rock material for
the construction of pads and haul roads. Mining productivity
increased steadily during the quarter as multiple production
benches were opened up and high equipment availability was
maintained. In the month of March, the Marathon mining team
produced construction materials at an average rate of 11,851 tonnes
per day against a forecast of 8,500 tonnes per day. During the
quarter, Marathon re-baselined its mining production schedule to
allow for a single mining shift at the higher achieved mining rates
supporting all planned construction activities through to the end
of April. On this basis, project-to-date waste rock production to
the end of the first quarter was 1.35 million tonnes compared to a
forecast of 1.25 million tonnes. Total overburden removed to date
is 0.19 million tonnes compared to a forecast of 0.18 million
tonnes and an original plan of 0.66 million tonnes. Overburden
material encountered in the field is less than was estimated in the
plan, resulting in less material being removed overall. A second
mining shift is planned to commence in May prior to the
commencement of construction at the Tailings Management
Facility.
Mining at the Leprechaun Pit. Both photos April
2023
Commencement of Major
Civils
Major civils works commenced during the first
quarter, focussed on the site of the Project’s process plant and
principal facilities. Overburden was excavated to the bedrock
surface in the area of the plant’s SAG mills, leach tanks and
tailings thickener areas. These areas were then backfilled with
mined waste rock from the Leprechaun pit to create the level
working platform for foundational blinding concrete and concrete
pedestal form work. Overburden excavation is continuing at the
crushed ore reclaim tunnel and crusher sites. Unconsolidated
materials from the site are being relocated to a stockpile to the
northeast of the mill area for future reclamation work. By April,
overburden removal and rock backfill had been completed in the area
of the main mill building. Concrete foundation work is scheduled to
begin later in May. A concrete batch plant has been delivered to
site and installed, and test pours completed.
Overall volumes of overburden encountered at the
process plant site were broadly in line with expectations from site
geotechnical data. Bedrock was encountered closer to surface than
expected in the south of the site, requiring approximately 4 metres
of rock to be removed by blasting. This work is expected to be
completed in early May, at which point the site will have achieved
its design grade for mill construction.
Civils work underway at the future process plant
site. On the left, a NW view showing bedrock blasting on the left
and the haul road and Leprechaun Mining pit in the far background.
On the right, a NE view showing the haul road and overburden
stockpile location in the background. Both photos April 2023.
Site Preparation and Permanent
Camp
The pad for the permanent camp was completed on
December 25, 2022. Additional pads have been created for the
low-grade ore stockpile, which is currently being utilized for the
concrete batch plant, and laydown yards. To date, 10.5 kilometres
of site roads have been completed, including the 5.2 kilometres of
production haul road connecting the Leprechaun and Marathon mining
pit areas to the centrally located process plant and major
facilities site.
Tree clearing and grubbing had been completed
over a total of 274 hectares to the end of March 2023, including at
the Leprechaun mining pit, Marathon pit, principal haul road,
permanent camp, site roads, the fresh water intake right-of-way,
overburden stockpile areas, the mill and major facilities site, the
Tailings Management Facility (“TMF”) site, and the route of the
planned access road realignment around the TMF.
By quarter end, all 39 modules for the permanent
camp’s Phase 1 accommodation and 64 modules for common facilities
were delivered to site and successfully installed. Interior
fittings and appointments, furnishings, plumbing and electrical,
piping and drainage, roof sealing, the installation of arctic
corridors and accessible access were well advanced. Subsequent to
the quarter end, the camp’s fresh water intake and water treatment
facilities had been completed and commissioned, and dorms prepared
for occupation. Transfer from the temporary construction camp to
Phase 1 of the permanent camp, with 352 beds, is scheduled for the
commencement of a second mining shift in mid-May. The delivery and
installation of Phase 2 of the camp, which consists of two-story
dormitory wing that will increase camp capacity to 425 beds, is
scheduled to commence in June 2023.
Left. Temporary Construction camp, January 2023.
Right, Permanent Camp under construction, April 2023
Logistics and
Infrastructure
Upgrades to the 80 kilometre long access road
from the community of Millertown to the Project site completed
since construction commenced include the straightening and
realignment of certain road curves, the replacement of culverts,
levelling and grading, and the replacement of the Victoria River
Bridge. The road was used successfully during the first quarter for
the safe shipment of goods and personnel. Subsequent to the quarter
end, Marathon experienced challenging seasonal thaw conditions on
the road that restricted its use for heavy loads such as fuel and
the safe transport of staff. For the last week of April into the
beginning of May, site personnel have been transported by
helicopter and road shipments were reduced to allow drainage and
road remediation work. This has temporarily impacted mining and
earthworks at site, with camp construction continuing unaffected.
Full mobilization at site is expected to recommence in the second
week of May. Marathon is working to minimise the impact of the
road’s reduced availability on the Project’s budget and schedule,
and critical path construction activities are not expected to be
impacted.
Construction of the Project’s 66 kV powerline
connection to the Star Lake Generating Station commenced with
right-of-way clearing in October 2022 under the management of NL
Hydro. By the end of March 31, 2023 tree clearing and grubbing had
been completed on the full 44.5 kilometres of right-of-way and 100%
of poles had been delivered to the powerline easement with
installation well advanced.
As of March 31, 2023, powerline engineering
stood at 100% completion, procurement at 100% completion and
construction completion at 50%. First delivery of power to the
Project site has been scheduled for November 2023 to allow for the
requisite modifications to the Star Lake Station, which will
commence this summer. This schedule is well in advance of Project
startup.
Left and Middle. Right-of-way clearance and
transmission poles on the 44.5 km long powerline route. Right.
Shipment of camp water tank by road. Both photos April 2023
Engineering and Procurement
At the end of March 2023, overall engineering
completion stood at 71% compared to a plan of 81%. The shortfall
relates, principally, to delays in process plant engineering due to
resource availability in addition to rework on certain construction
packages and layouts. The progress of engineering is not expected
to affect critical path construction activities.
At the end of March 2023, procurement stood at
51% compared to a plan of 39%. Procurement reporting reflects all
goods and services, including labour, to be procured during the
full period of mine construction. Procurement has been completed on
camp and camp services, tree removal, civils and concrete works,
engineering, construction management, power supply, mobile mining
equipment, heavy equipment rental, fuel storage and supply,
drilling equipment, explosives supply, concrete batch plant, road
maintenance, communications, assay lab, utilities water treatment,
modular crushing plant. Within the process plant, procurement has
been completed on the Ball and SAG mill, thickeners, screens, jaw
crusher, motors, conveyors, the ADR plant and assorted mill
fittings. Subsequent to the quarter end, procurement was completed
on the pre-engineered mill buildings, the HV substation, the
e-houses with MCCs and switchgears, the transformers, and onsite
power distribution.
Human Resources
At the end of March 31, 2023, 440 persons were
employed directly or contracted to the Project. Marathon collects
diversity employment data on the basis of voluntary declaration. On
this basis, 14% of the persons employed by the Project are female,
5% are Indigenous persons, 4% are visible minorities and 1% are
persons with disabilities. 24% are residents of the six communities
within Project’s socio-economic area of influence (Millertown,
Buchans, Buchans Junction, Grand Falls-Windsor, Badger and Bishop’s
Falls) and 72% are residents of the province of Newfoundland and
Labrador.
Direct employment within the Marathon Project
team currently stands at 104 persons, of which 16% are female, 4%
are Indigenous persons, 0% are visible minorities and 0% are
persons with disabilities. 53% of the Company’s employees are
residents of the Project’s six local communities and 99% are
provincial residents.
Ongoing Construction Permitting and
Berry Environmental Assessment
The Valentine Gold Project was subject to the
Newfoundland and Labrador Environmental Protection Act (“NL EPA”),
associated Environmental Assessment Regulations, and the Canadian
Environmental Assessment Act (“CEAA, 2012”). In September 2020,
Marathon submitted an Environmental Impact Statement (“EIS”) to the
Impact Assessment Agency of Canada (“IAAC”) and the NL Department
of Environment and Climate Change (EA Division) to meet the
requirements of CEAA (2012) and the NL EPA respectively, in
accordance with the project-specific guidelines issued by the
federal and provincial governments. The scope of assessment for the
EIS included the site access road, Marathon Complex (pit, waste
rock facility and associated infrastructure), Leprechaun Complex,
Processing Plant/TMF Complex, and associated site infrastructure.
The Valentine Gold Project was released from the provincial
Environmental Assessment (“EA”) process on March 17, 2022, and the
federal EA process on August 24, 2022.
Upon release from the provincial and federal EA
processes, numerous approval, authorization, and permit
applications were prepared and submitted for approval. Major
permits and authorizations issued prior to construction start up in
October included the Mining Lease, the Surface Lease, the Approval
of the Early Works Development and Rehabilitation & Closure
Plan, the Approval of the Construction Environmental Protection
Plan, the Early Works Certificate of Approval for Construction, all
issued by the NL Departments of Environment and Climate Change and
Industry, Energy, and Technology. Important authorisations issued
at the federal level was the Federal Fisheries Act Authorization
from Fisheries and Oceans Canada
Permitting for specific site activities will
continue throughout the mine development process in accordance with
the construction schedule. At the end of March 2023, overall
permitting progress stood at 83% complete, with site permitting
proceeding fully consistent with, and in support of, construction.
Recent permits received include additional approvals associated
with the completion of the permanent camp, and approvals for the
concrete batch plant. Approval for the Life-of-Mine Development and
Rehabilitation & Closure Plans, as well as posting of the next
tranche of financial assurance associated with these plans, will be
completed in the second quarter of 2023.
In January 2023, Marathon submitted
documentation to the provincial and federal regulators regarding
two changes to the Project, a communications tower and a small area
of stream infill associated with the Process Plant pad layout.
Marathon received a letter from the provincial regulator in
February approving the communication tower. The federal regulator’s
review is ongoing. Approval to proceed with the communications
tower is expected in the second quarter of 2023. The stream infill
was approved by the Department of Fisheries and Oceans (“DFO”) in
February 2023.
The Berry Complex will be subject to further EA
requirements to identify, assess and mitigate potential
environmental effects during all project phases, including
construction, operation, decommissioning, rehabilitation and
closure and post-closure. From the provincial EA perspective, the
addition of the Berry Complex will be considered a new undertaking
requiring EA registration. Federally, the Berry Complex addition
will be considered a change to the Designated Project, requiring a
similar submission, as described in the federal regulator’s
Decision Statement conditions. Marathon is completing an effects
assessment for the Berry Complex and conducting consultation with
both the provincial and federal regulators in support of filing an
EA registration late in the second quarter of this year. Engagement
with communities, Indigenous groups, and other stakeholders will be
conducted prior to submission. Regulatory review of the Berry
Complex is expected to proceed through 2023 and 2024, consistent
with the permitting and development schedule set out in the
December 2022 Updated FS, which assumes first Berry ore in the
second quarter of 2025.
Environmental Management and
Compliance
Marathon has developed and is implementing a
detailed Environmental and Social Management System (“ESMS”) which
is designed to manage all environmental and social aspects of the
Project, ensure fulfillment of regulatory compliance obligations,
and to address related risks and opportunities. With the
commencement of construction, Marathon has implemented follow-up
and monitoring plans, which have been developed to confirm the
effects predicted in the EA associated with the construction
activities and progress to date. Monitoring to date primarily
includes water sampling (surface and groundwater), ARD/ML sampling,
and caribou monitoring, with all results indicating regulatory
compliance and consistency with the effects predicted in the
EA.
DFO visited the Project site in March 2023 to
inspect construction activities associated with Marathon’s
Fisheries Act Authorization, with no concerns identified. Regulator
visits are expected in in the second quarter of 2023 associated
with caribou monitoring, compliance with the Federal EA Decision
Statement, and the Real Time Water Quality Monitoring systems
installed and monitoring by the NL Department of Environment and
Climate Change – Water Resources Management Division.
Marathon submitted its inaugural annual report
to IAAC on March 31, 2023, which describes activities undertaken by
Marathon to comply with each of the Conditions in the federal
Decision Statement during the 2022 reporting period. This report is
available to the public at
https://marathon-gold.com/environmental-social-and-governance/environmental/.
Trends and Risks
Marathon maintains a risk register and cost
trend analysis in its project control practices. Costs for goods
and services procured in variance to the Project’s control budget
are identified as cost trends until contracted and are subject to
potential re-bidding or scope assessment. Contracted cost variances
to budget may form approved contingency draws or, in the absence of
an appropriate contingency allowance, an adjustment to the
Project’s estimated cost at completion. A management reserve has
been created for savings achieved on goods and services procured
below budget. As at the end of March 31, 2023, Marathon had
approved contingency draws of C$2.6M from a total contingency
reserve of C$38.9M. The Project’s forecast cost to complete was
C$403 million, representing a variance trend of +C$4 million
compared to the original budget. Unused contingency stood at C$36.2
million.
Qualified Persons
Disclosure of a scientific or technical nature
in this news release has been approved by Mr. Tim Williams,
FAusIMM, Chief Operating Officer of Marathon, Mr. Paolo Toscano,
P.Eng. (Ont.), Vice President, Projects for Marathon, Mr. James
Powell, P.Eng. (NL), Vice President, Regulatory and Government
Affairs for Marathon and Mr. David Ross, P.Geo. (NL), Vice
President of Geology and Exploration for Marathon. Mr. Williams,
Mr. Toscano, Mr. Powell and Mr. Ross are qualified persons under
National Instrument (“NI”) 43-101.
About Marathon
Marathon (TSX:MOZ) is a Toronto based gold
company advancing its 100%-owned Valentine Gold Project located in
the central region of Newfoundland and Labrador, one of the top
mining jurisdictions in the world. The Project comprises a
series of five mineralized deposits along a 32-kilometre system. A
December 2022 Updated Feasibility Study outlined an open pit mining
and conventional milling operation producing 195,000 ounces of gold
a year for 12 years within a 14.3-year mine life. The Project was
released from federal and provincial environmental assessment in
2022 and construction commenced in October 2022. The Project has
estimated Proven Mineral Reserves of 1.43 Moz (23.36 Mt at 1.89
g/t) and Probable Mineral Reserves of 1.27 Moz (28.22 Mt at 1.40
g/t). Total Measured Mineral Resources (inclusive of the Mineral
Reserves) comprise 2.06 Moz (29.23 Mt at 2.19 g/t) with Indicated
Mineral Resources (inclusive of the Mineral Reserves) of 1.90 Moz
(35.40 Mt at 1.67 g/t). Additional Inferred Mineral Resources are
1.10 Moz (20.75 Mt at 1.65 g/t Au). Please see the NI 43-101
Technical Report “Valentine Gold Project, NI 43-101 Technical
Report and Feasibility Study” effective November 30, 2022,
Marathon’s Annual Information Form for the year ended December 31,
2021 and other filings made with Canadian securities regulatory
authorities available at www.sedar.com for further details and
assumptions relating to the Valentine Gold Project.
For more information, please
contact:
Amanda MalloughManager, Investor RelationsTel: 416
855-8202amallough@marathon-gold.com |
Matt MansonPresident & CEOmmanson@marathon-gold.com |
Julie RobertsonCFOjrobertson@marathon-gold.com |
|
|
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To find out more information on Marathon Gold
Corporation and the Valentine Gold Project, please visit
www.marathon-gold.com.
Cautionary Statement Regarding
Forward-Looking Information
Certain information contained in this news
release, constitutes forward-looking information within the meaning
of Canadian securities laws (“forward-looking statements”). All
statements in this news release, other than statements of
historical fact, which address events, results, outcomes or
developments that Marathon expects to occur are 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”, “estimates”, “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. More particularly and without restriction, this news
release contains forward-looking statements and information about
the FS and the results therefrom (including IRR, NPV5%, Capex, FCF,
AISC and other financial metrics and economic analysis), the
realization of mineral reserve and mineral resource estimates, the
future financial or operating performance of the Company and the
Project, capital and operating costs, the ability of the Company to
obtain all government approvals, permits and third-party consents
in connection with the Company’s exploration, development and
operating activities, the potential impact of COVID-19 on the
Company, the Company’s ability to successfully advance the Project
and anticipated benefits thereof, economic analyses for the
Valentine Gold Project, processing and recovery estimates and
strategies, future exploration and mine plans, objectives and
expectations and corporate planning of Marathon, future
environmental impact statements and the timetable for completion
and content thereof and statements as to management's expectations
with respect to, among other things, the matters and activities
contemplated in this news release.
Forward-looking statements involve known and
unknown risks, uncertainties and assumptions and accordingly,
actual results and future events could differ materially from those
expressed or implied in such statements. You are hence cautioned
not to place undue reliance on forward-looking statements. In
respect of the forward-looking statements concerning the
interpretation of exploration results and the impact on the
Project’s mineral resource estimate, the Company has provided such
statements in reliance on certain assumptions it believes are
reasonable at this time, including assumptions as to the continuity
of mineralization between drill holes. A mineral resource that is
classified as “inferred” or “indicated” has a great amount of
uncertainty as to its existence and economic and legal feasibility.
It cannot be assumed that any or part of an “inferred mineral
resource” or an “indicated mineral resource” will ever be upgraded
to a higher category of mineral resource. Investors are cautioned
not to assume that all or any part of mineral deposits in these
categories will ever be converted into proven and probable mineral
reserves.
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.
Factors that could cause future results or events to differ
materially from current expectations expressed or implied by the
forward-looking statements include risks and uncertainties relating
to the interpretation of drill results, the geology, grade and
continuity of mineral deposits and conclusions of economic
evaluations; uncertainty as to estimation of mineral resources;
inaccurate geological and metallurgical assumptions (including with
respect to the size, grade and recoverability of mineral
resources); the potential for delays or changes in plans in
exploration or development projects or capital expenditures, or the
completion of feasibility studies due to changes in logistical,
technical or other factors; the possibility that future
exploration, development, construction or mining results will not
be consistent with the Company’s expectations; risks related to the
ability of the current exploration program to identify and expand
mineral resources; risks relating to possible variations in grade,
planned mining dilution and ore loss, or recovery rates and changes
in project parameters as plans continue to be refined; operational
mining and development risks, including risks related to accidents,
equipment breakdowns, labour disputes (including work stoppages and
strikes) or other unanticipated difficulties with or interruptions
in exploration and development; risks related to the inherent
uncertainty of production and cost estimates and the potential for
unexpected costs and expenses; risks related to commodity and power
prices, foreign exchange rate fluctuations and changes in interest
rates; the uncertainty of profitability based upon the cyclical
nature of the mining industry; risks related to failure to obtain
adequate financing on a timely basis and on acceptable terms or
delays in obtaining governmental or other stakeholder approvals or
in the completion of development or construction activities; risks
related to environmental regulation and liability, government
regulation and permitting; risks relating to the Company’s ability
to attract and retain skilled staff; risks relating to the timing
of the receipt of regulatory and governmental approvals for
continued operations and future development projects; political and
regulatory risks associated with mining and exploration; risks
relating to the potential impacts of the COVID-19 pandemic on the
Company and the mining industry; changes in general economic
conditions or conditions in the financial markets; and other risks
described in Marathon’s documents filed with Canadian securities
regulatory authorities, including the Annual Information Form for
the year ended December 31, 2021.
You can find further information with respect to
these and other risks in Marathon’s Annual Information Form for the
year ended December 31, 2021 and other filings made with Canadian
securities regulatory authorities available at www.sedar.com. Other
than as specifically required by law, Marathon undertakes 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 or results
otherwise.
Photos accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/683aed72-7128-430a-a1e1-5cde3f91ef4d
https://www.globenewswire.com/NewsRoom/AttachmentNg/f887956f-8122-4763-ba7e-a77410a13fc7
https://www.globenewswire.com/NewsRoom/AttachmentNg/19c5fadd-6631-41ec-ae3b-fa59ce17f514
https://www.globenewswire.com/NewsRoom/AttachmentNg/fc23ebe0-4fc1-4aaa-a321-c8e503586e1e
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