Marathon Gold Corporation TSX:MOZ in joint venture with Mountain Lake Resources Inc TSXV:MOA announced an updated NI 43-101 mineral resource estimate for the Leprechaun deposit of the Valentine Lake project in central Newfoundland. The deposit now has measured and indicated resources of 424,000 ounces gold and inferred resource of 305,000 ounces.
The property is a 50/50 joint venture with Marathon as the project operator. Marathon President/CEO Phillip Walford tells ResourceClips.com, “During the last year we discovered that some of the historic drill holes were not what they should’ve been, and we’ve had to remove them from the database. That’s hurt us a little bit in the resource, in tonnage and grade and also in classification, but overall I think that will be behind us now. This year we’re pretty much mitigating all of that, and we’ve got an aggressive drill program going on. Our real focus now is on the high-grade zones, which really drive this deposit.
If you put $100 an ounce on [our resource], we’re grossly undervalued. And we’ve got about $8 million in cash. But right now everybody is undervalued. It’s just the market—Phillip Walford
“We want to get an open-pit resource out at the end of this drilling season. We’re drilling about 40,000 metres, so we’ll have a lot of information to put into the model. The drill program is underway, and there are three drills turning right now. All in all, we’ve had a little bit of a hiccup, but we’re moving right along, and I think the results that you’ll see in the next little while will show that we’re back on track and moving ahead to make this deposit grow.”
Asked whether Marathon and Mountain Lake intend to take Valentine Lake to production, Walford replies, “We’re doing everything just as we did with Marathon PGM. We’re doing everything to go into production. That’s our focus, and we’re not straying from that.” He adds, “We’ve got enough cash on Valentine to finish the drilling season, so we’re not too worried about that.
“We’re about 50 kilometres south of the town of Millertown, which is near Buchans, and we’re 95 kilometres from the Trans-Canada Highway. You can drive into the property. There’s also a major powerline about 20 kilometres away. Right now we’re on generator power, but for a mining operation we’d go on to grid power, which would save a lot of money.”
Is Marathon fairly valued? “I was just doing the sums actually,” Walford says. “If we include measured, indicated and inferred from the two projects that we’re involved with, we have a resource base of 556,000 ounces [gold]. Half of it’s inferred, half measured and indicated. So it depends on what kind of value you want to put on that. If you put $100 an ounce on [our resource], we’re grossly undervalued. And we’ve got about $8 million in cash. But right now everybody is undervalued. It’s just the market. We’ve been through this with Marathon PGM; we’re just in a market that doesn’t really value mining resource stocks right now, in particular gold.”
He concludes, “I’m really pleased with the way we’re developing it. We made some significant strides forward with exploration, with prospecting and just with surface exploration last year—the first time we did it. We’re going to do more of that. We’re also looking at downhole geophysics—we’re actually trying that out this week. We’ve definitely got a lot better handle on what this deposit’s all about. I’m really quite optimistic and excited about what we’re going to find as we go forward.”
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by Ted Niles