MARATHON — Generation Mining has devised a new mine plan for its proposed Marathon open-pit mine in northwestern Ontario that will reduce its construction costs, help the project economics and improve cash flow earlier in its mining life.
With money tight to obtain financing to build a mine and inflation still being a real issue, Gen Mining embarked on this cost-shaving exercise back in June.
Gen Mining’s deposit is located 10 kilometres north of town of Marathon and contains palladium and copper with platinum, gold, silver and other metals in the mix.
In a recent news release, the company said they’ve evaluated various options that allows them to extract a higher grade part of the ore body closer to the surface while reducing the strip ratio by 36 million tonnes for the first three years of operation.
Strip ratio is the amount of waste material (known as overburden) that must be removed to extract a given amount of ore.
The new mine plan delivers an extra 78,000 ounces of palladium, 34,000 ounces of platinum and 2 million pounds of copper during the first three years while generating additional revenues of $190 million.
The initial capital estimate to build the mine has been reduced by $89 million to $961 million.
The company also made some adjustments in the layout of the buildings on site and with the size and deferral of some equipment.
Gen Mining has lined up close to $800 million in project financing through a combination of debt financing and an investment by Wheaton Precious Metals. The company is still on the hunt for more financing and has not yet made a decision to proceed with construction.
Marathon is a unique project in Northern Ontario and Canada as a very advanced palladium and copper project that’s in the final stages of obtaining all its government permits.
While obtaining permits and raising money has taken longer than expected, CEO Jamie Levy told Northern Ontario Business last summer that he has never wavered in his faith that the mine will eventually get built. He expects construction to start sometime in 2025.
If it comes to fruition, the mine holds the promise of creating 1,200 construction jobs and 400 full-time positions once operating. The delay in construction, Levy said, offers an advantage when it comes to freeing up construction labour as three gold mine projects in the area at Gogama, Greenstone and Dubreuilville are now finished.