Thursday 17th April 2014

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Rapid Resource Development

Marathon Moves Quickly In Nfld and Idaho

By Ted Niles

In November 2010 Stillwater Mining Company TSX:SWC.U acquired Marathon PGM Corporation for its eponymous copper-palladium project in northwestern Ontario. The transaction earned Marathon PGM shareholders $118 million and saw the company’s remaining gold assets spun out into Marathon Gold Corporation TSX:MOZ. “Our background is rapid resource development,” says President and CEO Phillip Walford, “developing resources, then into reserves. We did that at Marathon PGM and, if anything, we’re doing it faster here.”

“Here” being the new company’s flagship Valentine Lake gold project, located 55 kilometres south of the town of Buchans, Newfoundland, which Marathon holds in 50/50 joint venture with Mountain Lake Resources Inc TSXV:MOA. Prior to Marathon, the property’s other joint venture partner was Richmont Mines Inc TSX:RIC. “Richmont looked at it from an underground mining point of view and basically walked on it,” Walford comments. “Then we came along and had a look. While Richmont was looking at Valentine from an underground-mining perspective, what I could see there was really, to start with anyway, an open pit. That was our concept, and it seems to be working.”

Marathon Moves Quickly In Nfld and Idaho

Since Marathon’s earn-in period began in December 2009 (which it completed January 2011), it has been the operator at Valentine Lake and in December 2010 produced from the property’s Leprechaun deposit its first NI 43-101 resource estimate of 277,000 ounces gold in the measured and indicated categories and 285,000 ounces inferred. Confirming Walford’s view that the project’s strength is in an open-pit scenario, 74% of the measured and indicated ounces occur within 150 metres of surface. He remarks, “We’ve got about 17 kilometres of strike length along the structure that has gold currents all the way along it. Our resource right now only represents about 800 metres of that. I’m not saying that it is all going to be ore or anything like it, but there’s lots of potential here. I firmly believe this is a multimillion ounce property.”

Marathon’s current 25,000-metre drill program consists of infill and exploration drilling at the Leprechaun deposit as well as exploration drilling at the project’s other main deposit, Valentine East. “We will be doing a new global resource, plus an open-pit resource,” Walford states, “to be completed in early November 2011. From there we have commissioned a preliminary economic assessment, and that will be completed sometime in 2Q 2012.”

September 8 assays of the Leprechaun deposit include

  • 32.24 grams per tonne gold over 3 metres (including 94.2 g/t over 1 metre)
  • 2.31 g/t over 17 metres
  • 10.16 g/t over 3 metres (including 29.9 g/t over 1 metre)
  • 1.93 g/t over 18 metres

August 30 assays included

  • 1.88 g/t gold over 34 metres (including 6.32 g/t over 5 metres)
  • 4.01 g/t over 13 metres (including 11 g/t over 3 metres)
  • 2.38 g/t over 17 metres
  • 7.19 g/t over 5 metres
  • 2.7 g/t over 15 metres (including 10.69 g/t over 3 metres)

Walford comments, “The deposit is starting to expand to the north and south, and that’s exactly what we want. We will see, I think, a very important increase in the total resource on the Leprechaun deposit. It will be very clear in the next two years how important this property is.”

Our background is rapid resource development; developing resources, then into reserves. We did that at Marathon PGM and, if anything, we’re doing it faster here —Phillip Walford

At an earlier stage of development, but no less important to Walford, is the company’s Golden Chest mine in the Coeur D’Alene mining district of Idaho. Golden Chest is a 50/50 joint venture with New Jersey Mining Company OTCQX:NJMC and has a non-NI 43-101 compliant “inferred geologic resource” of 231,000 ounces gold, which Newmont put together in the 1980s. “The thing that is very important with Golden Chest,” Walford relates, “is that we have about two square miles of property, but the core is patented claims. Those patented claims mean that we have the timber rights, the surface rights and the mineral rights. We do not have to permit to do work on the property, to do exploration, to make roads. If this was load claims it would be much more difficult to work in. The patented claims give us a huge advantage.”

This year’s program at Golden Chest consists of underground and surface drilling of 10,000 metres with New Jersey Mining as the operator. September 7 assays include

  • 5.15 g/t gold over 40 metres (including 137 g/t over 1.2 metres)
  • 1.48 g/t over 45.7 metres
  • 2.96 g/t over 16.7 metres
  • 1.51 g/t over 29 metres
  • 1.58 g/t over 28.6 metres.

Walford comments, “We think the potential to make a fairly decent-sized pit is there, and there’s underground potential as well. The underground vein system goes down over 200 metres beyond the bottom level, and it still seems to be going. We’re probably going to put a lot of effort into it next year in drilling and in underground development.” Walford expects a resource for Golden Chest no later than January 2012.

Walford, whose background is in mining geology, has no trouble with the idea of Marathon going into production itself. However, given the experience with Marathon PGM—that it was bought out by Stillwater following the feasibility stage—and that capital costs for Valentine Lake “would probably be lower,” he is prepared for either eventuality.

“Both properties are moving ahead at the pace we want them to,” Walford concludes. “So we’re pretty excited. These properties look like winners, and we’re starting to get attention on the street.”

Marathon Gold Corporation TSX:MOZ has 22.9 million shares trading at $1.34 for a $30.7 million market cap.


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