According to the PFS, over a 12-year mine life the operation would produce an average 175,000 ounces a year of gold in years 1-9 from high-grade feed and 54,000oz/year in years 10-12 from the processing of low-grade stockpiles with a life of mine all-in sustaining cost of US$739/oz following an initial capital cost of C$272 million.
The project yields an after-tax internal rate of return of 36% and has a net present value of $472 million at a 5% discount rate with a payback of 1.8 years based on a US$1,350/oz gold price, increasing to 49% and $671 million at US$1,550/oz gold.
"We have taken the approach of identifying the optimum starting point for mining at Valentine, emphasising highest rate of return and lowest risk, while recognising that the large resource inventory and extensive exploration potential along strike and at depth offers plenty of opportunity for mine life extension," said president and CEO Matt Manson.
Initial mill capacity of 6,800 tonnes per day based on gravity-leaching would be expanded to 11,000tpd in year four based on gravity-flotation-leaching with average life of mine recovery gold recovery of 93%.
The PFS contemplates openpit mining from the Marathon and Leprechaun deposits only. Ore with a cut-off grade of 0.70g/t will be prioritized for mill processing. Ore between 0.70g/t and 0.33g/t will be stockpiled for processing at the end of the mine life.
Each deposit will be developed in three phases, with the Marathon pit achieving a maximum dimension of 1,250m by 700m by 294m deep, and the Leprechaun pit achieving 1,050m by 650m by 306m deep. LOM strip ratios will be 6.7 at Marathon, 9.1 at Leprechaun and 7.6 overall. Dual-lane haul road allowances will support a diesel-powered mining fleet that will include 32 90-tonne payload trucks.
Valentine Lake has proven and probable mineral reserves of 41.05 million tonnes grading 1.41 grams per tonne for 1.87Moz contained gold.
Marathon had $28 million in cash at the end of 2019 and will now focus on submitting its environmental impact statement and starting feasibility-level studies.
Shares in Marathon Gold opened up 2% Monday at $1.11, valuing the company at $199 million.