Marathon Gold’s Valentine project nears federal EA decision, early site work to begin in Q3

Having recently completed its environmental assessment (EA) process with the government of Newfoundland and Labrador, Marathon Gold (TSX: MOZ) says the federal EA for its Valentine project is also approaching a ministerial decision.

Site-specific permitting pertaining to provincial jurisdiction, including acquisition of mining lease, has already commenced. Concurrently, Marathon has been notified by the Impact Assessment Agency of Canada (IAAC), which is overseeing the federal EA process, that it had completed its technical review of the project’s environmental impact statement.

IAAC will then complete and issue a draft EA report for the Valentine project for a 30-day public comment period. This is expected to begin shortly. Following this review period, the Minister of Environment and Climate Change Canada will be in a position to make a determination on the acceptability of the project for development. Approval would represent the completion of the federal EA process.

An aerial view of the mining camp at Marathon Gold’s Valentine Lake gold project. Credit: Marathon Gold

Subject to this regulatory schedule and receipt of sufficient permits, the company expects begin site early works in the third quarter, supporting full site mobilization by the end of the year. First gold pour is anticipated in late 2024.

An updated mineral resource estimate is also in the pipeline, scheduled for completion by mid-year. This update will incorporate results of last year’s reverse circulation drilling at the Marathon and Leprechaun deposits, as well as 100,000 metres of exploration drilling at the Berry deposit. An overall increase in open-pit measured plus indicated resources is anticipated, Marathon says.

However, due to cost inflation and construction market volatility, the company estimates that life-of-mine capital and operating costs for the Valentine mine project would increase 15-20% compared to the April 2021 feasibility study, which outlined an open pit mining and conventional milling operation with a 13-year mine life with a 31.5% after-tax rate of return.

To incorporate the updated mineral resource and higher cost estimate, Marathon is preparing a new technical report for the Valentine project, expected in the fourth quarter of this year.

The net result of this program of work will be a project permitted for construction, with site development activities underway, and a new longer-term vision for Atlantic Canada’s largest gold mine,” said Matt Manson, president and CEO of Marathon Gold.

The company recently announced the closing of a US$185M term loan credit facility with Sprott Private Resource Lending II, which will be used for the Valentine project’s development costs and working capital requirements.