TD updateMarathon Gold Corp. (MOZ-T) C$2.58 Berry Maiden Resource Arun Lamba, CFA Jamie Carmichael, (Associate)
Event This morning, Marathon announced its maiden Resource estimate for the Berry Deposit at the Valentine Gold Project in central Newfoundland (100%).
Impact: SLIGHTLY POSITIVE Total open pit Inferred Resources were 566 koz at 1.65 g/t, representing 89% of the total estimate (639 koz at 1.75 g/t o/p and u/g). The Resource is based on 42 km of drilling (to end of November 2020). Resources were estimated using a gold price of US$1,500/oz and a cut-off of 0.3 g/t (strip 9.8).
The Resource estimate includes high grade open pit Resources of 494 koz at 2.64 g/t.
The Berry Resource is not part March 2021 Feasibility Study (FS), but could provide another potential source of ore feed and extend the mine life (current mine plan is focused on the Marathon and Leprechaun open pits). Berry remains a focus of the company's exploration program this year, with up to 30 km planned.
Total Measured and Indicated Resources at Valentine remain unchanged (3.14 Moz at 1.72 g/t). Inferred Resources now stand at 1.64 Moz (+64%) at 1.72 g/t, up from 1.00 Moz at 1.70 g/t.
Recall, the FS contemplated a 6.8 ktpd mine (increasing to 11 ktpd in year 4) with average annual gold production of ~146 koz (173 koz/year over the first 10 years) at AISC of US$833/oz over a 13-year life.
At US$1,500/oz Au, the NAV5% of the project was estimated at $600mm ($765mm at US$1,650/oz Au), with an after-Tax IRR of 31.5%. Initial capex is estimated at $305mm.
According to the FS, construction is anticipated to start in January 2022 (subject to receiving permits) and first gold in October 2023 (TD: Q1/24)
As at December 31, the company reported ~$52mm of cash and no debt. Anticipated Timeline Exploration Results — Ongoing
Main Permit — Q4/21E or early-Q1/22E
TD Target $4.00