Marathon has been ahead of the curve on the gold rush into Newfoundland. How have you seen activity in the province evolve to where it is today?
After being spun out from the acquisition of Marathon PGM, one of the first projects that the company got involved in was the Valentine Gold project. There had been gold showings in the Valentine Lake area of central Newfoundland going back as far as the 80s, but in 2010, Marathon did a series of deals where it ended up owning 100% of the asset. Since 2010, there has been a consistent program of drilling. Therefore, by 2020 there were over 4 million ounces there, and the mine was ready to be built. As of summer 2021, we have a feasibility study done, we are in the homestretch of our environmental assessment permitting process, we are building a team, and we know that the economics of the project are very strong.
It will be a two pit open pit mine producing 173,000 ounces per year with a 13 year mine life and a lot of exploration potential to push that further. I hope our work has opened people's eyes to the potential of Newfoundland to find gold deposits at scale, and now we are seeing the biggest staking rush in the world. Of the crop of gold explorers and developers in Newfoundland we are the most advanced with our project in the final stretches of permitting and it is ready to be built. I do not think we are going to be the only larger scale gold mine that is developed in the near to medium term future in Newfoundland.
When the company brought you on as CEO in 2019, it represented a shift from a focus on exploration to a combined explorer developer model. How are you going about executing that strategy?
The way it typically goes is you get your resource and mine design, lock it in, and you do that for the period of time when you are going through the permitting, financing, and environmental assessment. You then get back to exploration when you put the asset into production. We have chosen not to do that, and instead we are doubling down on exploration. That is because there is so much prospectivity here. Marathon’s prior management team did a good job focusing the exploration, principally on two areas: the Leprechaun and Marathon deposits, which are the bulk of our 4.8 million ounce resource, and the core of the mine plan. We locked in those two deposits, but we realized there was a lot of good exploration potential along the Shear Zone belt. That strategy was rewarded with a discovery early on at our Berry deposit, which is now at 650,000 ounces. This discovery has the potential to add significant years of production to the mine plan down the road, so we are trying to take a hybrid approach where we are showing the fixed projects, but we are also running an exploration project alongside it, and showing you what the future of the project is going to be. The market has warmed to that, as it is still one that is interested in growth, exploration, and good drill results.
What are the keys to developing a mine on budget and on schedule?
The key to coming in on budget with a mine development is coming in on schedule. If you are not on schedule, it is very expensive to be coming in late on a multi hundred million dollar capital project.
Our best schedule for building Valentine is to start early on all the infrastructure such as installing the Newfoundland hydropower line, the communication towers for broadband, making sure the road is in the best possible condition, and bridges are taken care of. That will all be well established before we break ground at the site with civil works. If you can order these things in the correct way, then you do not get surprised with schedule issues mid build, and you have the highest probability of coming in on budget.