What are the recent developments at the Marathon project since we last spoke in 2022?

In the last year, we have executed a community benefit agreement with our partners, Biigtigong Nishnaabeg First Nation. The environmental assessment (EA) was approved, which allowed us to commence the permitting process. Finally, our closure plan as well as a species-at-risk permit were approved.

What was the most challenging part of the closure plan approval process?

The approval of our closure plan for the Marathon palladium-copper project is the conclusion of months of work to define the social, environmental, and technical elements of the closure plan to achieve the land use envisioned for the property after mining concludes, including establishing a self-sustaining ecosystem, re-establishing access through the area for traditional land use and providing future economic development opportunities. The Marathon project is a valuable and strategic asset containing critical metals needed to support the transition to a greener economy. We are grateful for the incredible stakeholder support including the First Nation community of Biigtigong Nishnaabeg, the town of Marathon, and the Ontario government.

What were the main findings of the updated 2023 Feasibility Study?

The Feasibility Study Update estimated a Net Present Value of C$1.16 billion, an Internal Rate of Return of 25.8%, and a 2.3-year payback. A lot of the updates had to do with the supply chain and the current inflationary environment. We had some scope changes, including increasing the throughput from 25,000 to 27,000 t/d with a larger mill.

Many contractors and suppliers who were busy working on the Côté Lake, Magino, and Greenstone projects are now becoming available again. We hope this new increase in supply in the region will further reduce costs compared to our previous estimates.

How do you assess the supply and demand fundamentals for palladium?

At today’s prices, most of the platinum group metal (PGM) projects in production globally are not profitable, except for places like Norilsk, Russia, where PGMs are a by-product of nickel mining. Should prices continue at these depressed levels, the unprofitable mines may have to stop production, which will reduce supply, thus pushing prices back up.

Our narrative has always been that the vehicle energy transition would involve hybrid vehicles, due to the limitations and costs of purely battery electric vehicles (BEV). Hybrids still have an internal combustion engine (ICE) and require more palladium for their catalytic converters than traditional ICE vehicles. Many people cannot afford a BEV, and their range is often insufficient for many commuters. Thus, we think there will still be demand for ICE and hybrid cars for some time. There is a huge amount of critical minerals needed to complete the transition to BEVs, and it seems like there is still a very long way to go. In either case, the Marathon project has a built-in hedge as it is also a copper project. Thus, if the BEV transition occurs faster than anticipated, we can expect copper prices to increase accordingly, offsetting any decrease in palladium prices.

How could the permitting process be streamlined for development-stage companies like Generation Mining?

There is a tremendous amount of support for developers at the highest levels of government, but we would like to see this support extend further down the chain of command to the various authorities. At the moment we have to deal with a huge number of departments and branches. We are happy to see the Ontario Ministry of Mines trying to simplify this process and listening to suggestions from industry players.

As part of its Critical Minerals Strategy, the federal government has put forward billions of dollars in grants, loans, and tax credits. If initiatives like the Strategic Innovation Fund (SIF) are successful, they will significantly boost the Canadian mining industry. As one of the few critical mineral projects currently going through the permitting process, we hope to take advantage of some of this support to get fully financed.

What are the next steps for the Marathon project?

We aim to be fully permitted in Q1 2024. We will continue to work on financing and detailed engineering to have the project ready to begin construction in 2024.