Can you highlight some of the latest developments at Generation Mining’s Marathon project?
Generation Mining is actively developing our 100%-owned Marathon palladium-copper project in northwestern Ontario. We completed a feasibility study in March 2021, which demonstrated a 30% IRR, a C$1.07 billion NPV and a 2.3-year payback at a US$1,725 palladium and US$3.20 copper price. The study showed that it would produce approximately 245,000 oz/y of palladium equivalent, and putting this into a gold equivalent, it would be about 300,000 oz/y. The Marathon project is significant and would rank in the top 10 precious metal mines in Canada. The capex to build the mine was listed at C$665 million, which is quite reasonable for a mine this size. Generation recently signed a C$240 million streaming deal with Wheaton Precious Metals to help fund the construction, and is actively seeking project debt.
Can you elaborate on the permitting process?
We still have four main jobs to complete moving forward, the first one with the longest timeline being seeking approval of our environmental assessment (EA). We are doing permitting alongside the EA review so that we are ready to go with the permits as soon as possible after EA approval. There are a lot of different permitting routes mining companies in Canada can be in, and the one Generation Mining is in is called a joint review panel, which was jointly appointed by the Province of Ontario and the Federal Government. This panel has a defined amount of time to review the project as they look at the submissions we have given them and come back with questions. When we get to the point where there are no more questions, community hearings with all the interested parties will follow. The panel will make a recommendation to the various ministers of the environment, federally and provincially, who will then make their decision within 90 days, and if positive, the company will be in the position to attain permits. We expect this entire process to take us into the middle of 2022.
How is Generation Mining developing community relations and how are these evolving?
Generation Mining has signed a letter of intent with a large First Nation group close to our site, the Biigtigong Nishnaabeg, and are in the process of concluding a full community benefit agreement with them. We are also in discussion with the Pays Platt First Nation, where we are reasonably close to getting to the letter of intent stage. We are also working with other peripheral First Nation groups who are interested in the environmental impacts of the project. We have close relationships with the surrounding communities and the Mayor of Thunder Bay has announced that the Council is backing our project. The town of Marathon is also very supportive towards both mining in general and our project. Can you elaborate on the ease of access to the Marathon project?
The project has fabulous access with the Trans-Canada Highway coming through the property, and the town of Marathon very close by. The Marathon Airport is actually on our property and there is a CPR (Canadian Pacific Railway) main line coming through the town. The government of Ontario has also spent approximately C$1 billion building the East West Tie power line across Northern Ontario, connecting the South with Thunder Bay to have a truly single grid across the province. This powerline goes right over the Marathon property, allowing us to make use of the grid which only has a 4% carbon footprint. We will thus be producing some of the cleanest palladium worldwide.
Can you elaborate on Generation Mining’s financing situation to push forward the project?
At the end of August 2021, Generation Mining had approximately C$12 million in the bank and we are fully funded for the permitting process. We do however need to raise another C$50 million to get to construction, including the detailed engineering of the project and ordering equipment which has long lead times such as the mining fleet. We are taking a non-diluting financing approach and looking for bridge financing, such as streaming, royalties, or debt-equity to get us to construction.