What factors encouraged Marathon to greenlight construction of the Valentine gold project? 

This decision reflects the progress Marathon has made on its Valentine project, which is a greenfield open pit gold mine that has gone through a full federal and provincial environmental assessment. This is a relatively rare thing, because many larger mines in Canada are brownfield sites on top of historical mining districts. 

Following the completion of the environmental assessment process, we felt it was important for the company to make a statement as much for the investment market as for the stakeholders and all supporters that had been advocating for the project. 

We spent the last couple of years drilling and doing exploration, discovering what is going to be a third pit called Berry, and we are going to be reflecting that in an updated feasibility study.

What is driving inflationary pressure for mining companies today? 

The biggest issue is labor. The mining industry went into covid with a chronic labor and skill shortage, and the pandemic compounded the issue. If you are building a new mine, you are inevitably hiring and if you want employees to move you must incentivize them. Salaries are up markedly, and to be competitive in this tight labor market you must offer compelling benefits and rotations, which impacts headcount. Marathon’s burden rate on our people is 45%, whereas 10 years ago, it would have been 25%. Moreover, labor is reflected in every cost, every contractor bid you get and logistics cost.

What is the size of the resource at Valentine?

Marathon has a compelling geological property in that the other gold plays in Newfoundland are structurally hosted, high grade narrow veins. This is a big bulk tonnage deposit. It has a different deformational style, different host rock, and it is at a different scale. We are currently sitting at 5 million oz in all categories and about 1.85 g/t. The existing mine plan is two pits and Berry will be the third, with reasonable expectation of adding additional pits because we see the potential for our deposit style to continue the whole way through the project. We also believe there is an underground future.

What are the most critical factors in achieving successful mine development?

In the process of building a mine, the most important thing is schedule. If you are behind schedule, you will be over budget. And if you want to be on budget, you have got to be on schedule. 

What we need to think about as mine developers is delivery times, pricing, order books, cycles of availability of labor and forward curves of diesel. All those things are improving. However, the narrative is always based on company stock price and gold prices. Miners must look beyond that.

What agreements does Marathon have in place to establish license to operate?

There are six communities that we consider to be in our social and economic area of influence. We have cooperation agreements with all six, and they deal principally with employment contracting. We also signed a benefits agreement with the province that commits Marathon to 85% provincial hiring during the build and 90% during operations. We are meeting those targets now. Our relationship with communities is very much based upon the economic potential of the project and long mine life, which will lead to long-term compensation. 

What milestones would you like to achieve over the next 12 months?

Marathon is currently in project financing mode. We have a good cash balance, debt arranged, and equipment leasing arranged. This helps de-risk the build. We would like to finish the year fully completed in early works, and fully mobilized at site. There is also significant exploration occurring, so continuing to tell our story about resource growth during the build is a big priority for us. We are going to be replacing ounces, adding new discoveries, telling stories about future pits and future underground mines. Newfoundland is a very richly endowed metallogenic province. While it has been prospected of a lot over the years, it has not been explored in a very systematic way.