TD UpdateMarathon Gold Corp. (MOZ-T) C$1.74 Federal EA Permit Received for Valentine Arun Lamba, CFA Kulvir Gill, CFA (Associate)
Event Yesterday evening, Marathon announced that it has been fully released from the federal Environmental Assessment (EA) process for its Valentine Gold Project (100%) in central Newfoundland (provincial approval in March).
Impact: POSITIVE
The completion of the EA process for Valentine is a significant milestone, in our view.
Permitting is ongoing for initial construction activities such as tree clearing, quarrying, earthworks, accommodation camp installation, road upgrades, and culvert installations. The completion of the federal EA now allows permits to be acquired for on-site activities pertaining to federal jurisdiction.
The release from the federal EA includes certain conditions with which Marathon must comply during the construction of the project. The conditions principally reflect the implementation of certain monitoring and mitigation programs previously outlined in the project’s Environmental Impact Statement and are designed to address potential environmental effects in different areas (water quality, fish habitat, etc.). Marathon must also develop and implement follow-up and monitoring programs to verify the accuracy of the EA (additional details here).
Recall, in July, Marathon announced the results of an updated Resource Estimate (Action Note). M&I Resources increased to 3.96 Moz at 1.90 g/t (with the main deposits being defined by (1) Berry 1.09 Moz; (2) Leprechaun at 1.08 Moz; and (3) Marathon at 1.70 Moz). Resources were estimated using US$1,800/oz Au.
Marathon is planning to complete an updated Feasibility Study (FS), which will include a new reserve update (recall Marathon/Leprechaun resources declined by 0.27 Moz in the last update) in Q4/22. The updated FS is expected to include Berry (although a permit amended would be required for Berry).
As a reminder, Management previously reported that it expects that LOM capital and operating costs to be at least 15-20% higher than the April 2021 FS. We currently model pre-production capex of $400mm (April 2021 FS: $305mm).
Following the release of the updated FS, the company will look to complete project financing. As a reminder, earlier this year, Marathon secured a US$185mm credit facility from a non-bank lender. We currently model first gold at Valentine in Q1/25.
Marathon last reported $62mm of cash and no debt (June 30).