RBC maintains outperform rating in August 25th update August 25th, 2019:
Price Target: CAD 1.80
Investment summary
Our Outperform (Speculative Risk) rating is premised on our constructive outlook on the underlying fundamentals of Valentine Lake, scarcity of comparable pre-development stage projects, and takeover potential. Marathon is an exploration-stage gold company advancing its flagship Valentine Lake project in Newfoundland.
• Valentine Lake expected to be a high-return project. In our view, Valentine Lake has the potential to be developed into a high-return project given the asset's above-average grade for an open-pit operation, solid scale, and exploration upside. The recent optimized PEA outlined average annual production of 225 Koz at mine-site AISC of $666/oz over a 12+ year life.
• Further resource growth expected. We expect Marathon to continue to grow resources at Valentine Lake through its ongoing drill program, specifically expanding the Marathon deposit along strike and testing for additional discoveries across its 240 km2 land package.
• Scarcity of comparable assets increases takeover potential. We believe Marathon is a higher potential takeover target given Valentine Lake is one of only a handful of exploration-stage assets with fundamental characteristics for which the larger precious metals producers are
looking, including the potential production profile, mine life, and cost structure located in a geopolitically stable and mining-friendly jurisdiction.