The price tag to build a new mine near Marathon has escalated, but Generation Mining is primed and ready to start construction pending the arrival of key government permits.
The Toronto mine builder released a positive feasibility study for its $1.1-billion Marathon palladium and copper project, located about 10 kilometres inland from the town on the north shore of Lake Superior.
The feasibility study is an update from an earlier one released in March 2021, but with the rising cost of inflation factored in. The company has tweaked and fine-tuned a few things in the project design and factored in the results of almost 19,000 metres of diamond drilling at the deposit.
A feasibility study is a final, detailed economic study assessing whether a deposit can be mined profitably.
The new estimate shows initial capital construction costs to build the mine – known as CAPEX – increasing by 25 per cent ($224 million) from the 2021 study. About 70 per cent of that is due to cost escalation.
The mine offers a quick payback period of 2.3 years on the initial capital with low operating cost and all-in-sustaining capital of US$813 per palladium equivalent ounces.
As with all mine feasibility studies, this is a “robust” one, “even in the current inflationary environment,” said Jamie Levy, the company president-CEO, in a news release.
“This, combined with strong demand for critical minerals, makes the rationale for the project becoming Canada’s next critical minerals mine more compelling than ever before.”
The life of mine stays pretty much the same as forecasted in 2021 at 12.5 years.
A big regulatory hurdle was cleared in November with federal and provincial environment assessment approvals.
Generation Mining is waiting on permits, approvals, licences from both levels of government and the municipality to get started digging out the mine and stockpile near-surface ore for later processing.
“With the receipt of our environmental assessment approvals and our recently announced indicative offtake term sheets, we are advancing to arrange project financing and working hard to obtain the permits necessary to start construction,” said Levy.
Once the greenlight is given, there will be a 24-month construction timeframe following by commissioning and ramp-up to commercial mining production over a six-month period.
Gen Mining expects to start construction sometime later this year.
The company said 800 construction jobs will be created. When in operation, the mine will generate direct employment for more than 400.
Levy emphasized the Marathon Project will be a low-cost, low-emission and “environmentally sensitive” operation.
Gen Mining said it may qualify for a new 30 per cent federal investment tax credit on machinery and equipment used to mine and process critical minerals.
The mine will be a conventional truck-and-shovel open-pit operation. The equipment fleet will be owner-operated. Certain support activities, such as explosives manufacturing and blasting, will be outsourced.
Three open pits will be mined over a 12.5-year mine life with an additional two years of mining pre-production when the pit will be carved out and ore stockpiled for the processing plant.
The primary loading equipment will consist of 660-tonne hydraulic face shovels (29-square-metre bucket size) and large front-end wheel loader (19-square-metre bucket size).
The loading fleet is matched with a fleet of 246 tonne haulage trucks. A fleet of 90 and 45-tonne excavators will excavate the overburden material and will detailed to mine narrow-thickness ore zones in the project’s South Pit.
Peak mining production will be 43-million tonnes per year (118,000 tonnes per day.)
The total amount of material to be moved over the life of the mine is expected to be 460 million tonnes of material including 128 million tonnes of ore.
The pit operation will include a waste rock dump east of the open pits and an ore stockpile west of the pits, next to the crusher.
The copper and platinum group metals concentrate produced at the mine site will be shipped to an off-site smelter for further processing.
“Our team has been working hard to develop the Marathon Project,” said Drew Anwyll, the company COO, “and has successfully optimized and improved confidence in the designs of the process plant, the open pits and the necessary infrastructure for the project. Detailed design will advance, and we will continue to de-risk the project in anticipation of finalizing the project financing and receiving approval of the required permits to commence construction later in 2023.”
The mine site will have access roads, a processing plant, workshops, warehousing, administrative buildings, water treatment plants, explosives plant, and power lines. Off-site, there will be an assay lab, a transload concentrate facility and accomodation units.
The company delivered some good news this week with the announcement that international miner Glencore will take half of the mine’s copper concentrate.
Last November, the company signed a community benefits agreement with Biigtigong Nishnaabeg (Pic River First Nation).
During the consultation process, Gen Mining said 16 Indigenous groups were identified by Ottawa and the province as having a potential interest in the mine project. Seven indicated they were interested in participating in the consultation processes, namely Biigtigong Nishnaabeg First Nation, Pays Plat First Nation, Michipicoten First Nation, Ginoogaming First Nation, Superior North Shore Métis – MNO, Jackfish Métis – Ontario Coalition of Indigenous Peoples and Red Sky Métis Independent Nation.
