An independent preliminary economic assessment study for Generation Mining Ltd.'s Marathon palladium-copper project in northern Ontario outlined a posttax net present value, discounted at 5%, of C$871 million, a 30% internal rate of return, and a 2.5-year payback.
The study is based on a development of the palladium mineral resource at Marathon through open pit mining, according to the Jan. 6 release.
Pre-production capital for Marathon was estimated at C$431 million, with sustaining capital of C$277 million.
The Marathon process plant will treat 5 million tonnes per annum of material for the first five years and expand to 8 mtpa in the sixth year.
The project is expected to produce an average of 194,000 equivalent ounces of palladium per year over a 14-year mine life, including credits for copper, platinum, gold and silver.
Executive Chairman Kerry Knoll said the company plans to fast-track a feasibility study and permitting for Marathon, and expects 2020 to be a "pivotal year" for the company. "This is a project whose time has come," Knoll said in a statement.
In September 2019, Generation outlined a measured and indicated resource at Marathon of 179.2 million tonnes grading 1.24 g/t palladium equivalent for 7.13 million ounces of palladium equivalent.
President and CEO Jamie Levy noted that the study does not cover potential feed from two additional deposits with NI 43-101 mineral resource estimates located on the property, which will require additional work.
Generation acquired a 51% interest in the project from Sibanye Gold Ltd. in July 2019, and holds an option to earn up to 80% interest by spending C$10 million within four years.