Now that Marathon PGM (MAR-T) has completed a feasibility study for its platinum group metal-copper project, the company is looking for a way to fund the $586-million open-pit operation.
The study says the Marathon PGM-copper project, located 10 km north of the Ontario town it’s named after, could produce 42 million lbs. copper, 201,000 oz. PGM+gold and 310,000 oz. silver per year over 10 years. The processing plant would be designed to take in 22,000 tonnes of ore per day.
The project has a net present value of $77 million (using an 8% discount rate), an after tax internal rate of return of 12.4% and a payback period of 4.7 years.
Cash costs, net of credits would be (-US$53) per oz. PGM+gold or about US28¢ per lb. copper.
The study estimated the project would bring in a pre-tax cash flow of $51 million.
The project has proven and probable reserves of 79 million tonnes grading 0.27% copper, 0.08 gram gold per tonne, 0.23 gram platinum, 0.76 gram palladium and 1.58 grams silver (plus rhodium) for 465 million lbs. copper and 2.7 million oz. PGM+gold.
The study used the following long term commodity prices: US$1.75 per lb. copper, US$1,750 per oz. platinum, US$400 per oz. palladium, US$800 per oz. gold and US$12 per oz. silver.
A Canada-U.S. exchange rate of $1.20 was used.
The feasibility did not consider resources just outside of the Marathon pit design and at Geordie Lake because of economic constraints. The company hopes to mine these areas at a later stage in the mining process.
Geordie Lake deposit is located 14 km west of Marathon. It has has measured and indicated resources of 25.99 million tonnes grading 0.55 gram palladium per tonne, 0.03 gram platinum, 0.05 gram gold, 0.35% copper and 2.35 grams silver. This represents 457,000 oz. palladium, 46,000 oz. gold, 195.7 million lbs. copper and 1.9 million oz. silver.
Marathon PGM currently has $17 million in the bank and is considering joint ventures, royalty arrangements, project equity and debt instruments to develop the proposed mine.
Marathon PGM shares were trading at 36¢ today, down 2.5¢, on a trading volume of 176,200 shares. The company has nearly 28.7 million shares outstanding and a market cap of $10.3 million. Marathon PGM shares have a 52-week trading high of $5.40 reached on Feb. 29 and a low of 25¢, reached in November.
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