Generation Mining (GENM.C) has only completed the purchase of an initial 51% stake in the Marathon PGM project in Ontario for less than a quarter, and the company is already firing on all cylinders with a 12,000 meter drill program in progress and the recent publication of an updated resource estimate using more reliable cutoff grades based on the changed metal price and expected operating expenses environment. The updated resource estimates exclude the Geordie resource, and Generation Mining has now engaged P&E consultants to recalculate the Geordie resource while also providing a maiden resource on the Sally zone, so the recently announced resource estimates will be expanded by several millions of tonnes in the not so distant future.
Generation Mining has provided a resource estimate based on two cutoff grades using a C$13/t rock value and a C$25/t rock value. Obviously the C$13 NSR cutoff value has the best result with a total of 3.24 million ounces of palladium, almost 1.1 Million ounces of platinum, 390,000 ounces of gold, 9.3 million ounces of silver and just short of 800 million pounds of copper for a 7.13 million ounce palladium-equivalent resource in the measured and indicated resources. The average rock value of that M&I resource using $1575 Pd, $940 Pt, $1500 gold, $18 silver and $2.61/lb copper is US$48.70/t (the gross value, so excluding recoveries and payabilities).
A good result considering the cutoff grade based on a rock value of C$13/t, but just to err on the cautious side, perhaps it’s safer to use the resource with a higher cutoff grade using C$25/t as cutoff value. That resource is just a bit smaller (5.83Moz PdEq) but the average PdEq grade is more than 20% higher which makes this resource more robust. And after all, even after using the higher cutoff grade, the Marathon project still contains 2.74Moz Palladium, 850,000 ounces platinum, 300,000 ounces gold, 6.3Moz silver and in excess of 600 million pounds of copper.
Generation Mining is also working on a PEA on the Marathon Deposit, and given the current strong palladium prices, we have no doubt the outcome of the PEA will be very positive.
Disclosure: The author has a long position in Generation Mining, which also is a sponsor of the website.
