Mike Fagan,
Editor
July 26, 2021
Generation Mining (TSX: GENM)(OTC: GENMF) — currently trading around C$0.90 per share — has announced it will remain operator of its flagship, 80.7%-owned Marathon palladium-copper project in northwestern Ontario, Canada.
With JV partner, Sibanye-Stillwater, electing to maintain its current 19.3% ownership by not exercising its back-in rights — Generation will continue to advance Marathon with the aim of bringing the project into production as an important North American source of critical green-energy, base, and precious metals.
Next steps include environmental assessment and permitting, final negotiations with First Nations, detailed engineering, and project financing.
Generation Mining's CEO Jamie Levy commented via press release:
“We are thrilled to have clarity on this key issue, which removes a perceived encumbrance on the Marathon Project. Sibanye-Stillwater has been an excellent partner. We look forward to advancing Marathon to production and I think our shareholders will ultimately benefit from this decision. This project’s time has come to be developed and being a Canadian-based company looking to produce critical minerals and green metals is a very exciting place for all of our stakeholders.”
A Feasibility Study from March estimates Marathon’s NPV (at 6% discount rate) at ~C$1.07 billion with a payback of 2.3 years and an IRR of 30%. The mine would produce an estimated 245,000 palladium equivalent ounces per year over a 13-year mine life at an All In Sustaining Cost (AISC) of US$809 per palladium-equivalent ounce. Up front capital costs are estimated at C$665 million.
And keep in mind that that study was done using a palladium price of US$1,725 per ounce and a copper price of US$3.20 per pound. As you’re likely aware, both metals are currently in the midst of significant uptrends with palladium trading around US$2,670/oz and copper well north of US$4/lb.
Factoring in those higher metal prices, Generation is sitting on 80.7% of a deposit that should eventually be valued much higher than the current C$1.07 billion as estimated in the most recent Feasibility Study.
And remember, Marathon is already considered the largest undeveloped platinum group metals (PGM) mineral resource in North America with payable metals of:
- 1.9M oz palladium
- 467M lbs copper
- 537,000 oz platinum
- 151,000 oz gold
- 2.8M oz silver
For speculators, Generation Mining is well-funded with ~C$12 million cash on-hand and offers exposure to the above metals via a large PGM asset in a Tier-1 jurisdiction with active drilling and still a great minority partner in Sibanye-Stillwater.
Look for plenty of news flow from Generation Mining in 2H 2021 and into 2022.
Our own Gerardo Del Real of Junior Resource Monthly sat down with Generation Mining executive chairman, Kerry Knoll, to discuss Sibanye’s decision to remain a minority partner and what that means in terms of next-steps — with Generation Mining as operator — for advancing Marathon toward mine construction and eventual production. CLICK HERE TO LISTEN. Transcript is also available.
Be sure to also check out our feature report on Generation Mining here.
Yours in profits,
Mike Fagan
Editor, Resource Stock Digest
Mike Fagan has mining in his blood. As a teenager he staked countless gold and silver properties in Nevada alongside his dad, Brian Fagan, who created the Prospect Generator model that’s still widely used today in the resource space. One of those staking projects was put into production by a major Canadian mining company — a truly rare and profitable experience. That background uniquely qualifies him as a mining stock speculator. One of the most well-known names in the business, Mike is now putting that experience to use for the benefit of Resource Stock Digest and Hard Asset Digest readers.