Marathon PGM (MAR-V) plans to begin construction of its open-pit platinum group metals-copper mine near Marathon, Ontario, 300 km east of Thunder Bay, by the fourth quarter of 2007.
The company is currently in the middle of the permitting process for the project, which could reach production by the fourth quarter of 2008.
Marathon chair James Frank said the company is being aggressive with the timeframe.
“But we’ve beefed up our team,” says Frank.
This so-called beefing up includes the addition of vice-president of exploration, David Good, who did his Ph.D. thesis on the Marathon deposit.
The deposit has measured and indicated resources of 49.3 million tonnes grading 0.91 grams per tonne palladium, 0.24 grams per tonne platinum, 0.09 grams per tonne gold and 0.31% copper.
Marathon is calling the deposit Canada’s largest undeveloped PGM-copper resource. The bulk of PGM mines are located in South Africa, with only two large-scale mines in North America: Stillwater Mines‘ (SWC-N) underground mine in Montana and North American Palladium‘s (PDL-T, PAL-X) open-pit mine in Lac des Iles, Ontario, 85 km north of Thunder Bay.
Compare Marathon with Lac des Iles: According to 2005 data, proven and probable reserves at Lac des Iles were about 13.5 million tonnes grading 2.13 grams per tonne palladium, 0.22 grams per tonne platinum, 0.16 grams per tonne gold, 0.7% copper and 0.6% gold (using a cut-off grade of 1.1 grams per tonne palladium).
Measured and indicated resources were 29 million tonnes grading 1.51 palladium, 0.18 platinum, 0.11 gold, 0.05% copper and 0.06 % nickel.
Marathon expects the mine life to be about 9 years.
The company is focusing more on the PGMs, despite the hefty copper byproduct it will use to reduce cash costs. In any case, the variety of precious and base metals will help the company should prices drop for either.
“It’s a cushion other producers don’t have,” says Frank.
The projected production will be 18,000 tonnes per day at the mill with a strip ratio of 4 to 1.
The production rate for Lac des Iles in 2004 was about 46,000 tonnes per day with a strip ratio of 2.68 to 1.
Using an 18-month trailing average metal price scenario the cash operating cost for PGMs will be US$88 per oz. for the first four years and US$91 per oz for the life of mine average.
One issue to watch out for is Marathon is on land that has been claimed as traditional land by a local First Nations band.
So far Marathon has had “cordial relations” with the band, says Frank.
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