Generation Mining targets Q3 construction start for Marathon

Generation Mining’s (TSX: GENM) Marathon palladium-copper development in northern Ontario is among few critical minerals projects in Canada to recently seal both government approval and local Indigenous support. 
 
In late November, the federal and provincial governments approved Marathon’s environmental assessment (EA), marking major progress for the project. 
 
“I believe we’re the only mining company to go through an EA process [with a joint review panel] in Ontario and get approved. And that’s a very high level of process for a company to go through,” said Generation CEO Jamie Levy, who was also the CEO of Pine Point Mining, before it was sold to Osisko Metals (TSXV: OSK). 
 
“It’s a great milestone for us but it’s not a time for us to celebrate. There are 300-400 conditions to meet in the EA and numerous other permits we need before we can start production.” 

 
The EA process was started in 2010 by Marathon’s previous owner, Sibanye-Stillwater (NYSE: SBSW; JSE: SSW). Generation acquired a 51% interest in Marathon from Sibanye in 2019 and 100% in January 2022. 
 
The approval came just six weeks before the federal government green lit the EA of Galaxy Resources' James Bay lithium project in Quebec. Galaxy became part of Allkem (TSX: AKE; ASX: AKE) in a merger last year. 
 
Marathon, located 10 km north of the eponymous town and 300 km east of Thunder Bay, hosts open pit proven and probable reserves of 2.3 million oz. palladium at 0.62 g/t and 532 lbs. copper grading 0.2% held in 117.7 million tonnes of material, according to a 2021 feasibility study. It also hosts 255,000 oz. gold at 0.06 g/t, 756,000 oz. platinum at 0.2 grams and 5.3 million oz. silver at 1.41 grams.  

At palladium-equivalent cash costs of US$687 per oz. and all-in sustaining costs of US$809 per oz., the operation will consist of three open pits and have a mine life of 13 years.  

Upfront capital costs are pegged at $665 million, a number Levy said could go up by 20% to 30% due to inflation and rising costs of fuel, lumber and steel. He hopes to give investors and lenders a more specific amount of the higher capex within two to three months in an updated feasibility study. 

In terms of financing, Generation has received interest from a banking syndicate led by Export Development Canada for US$400 million ($541.4 million), and it has a streaming deal reached in December 2021 with Wheaton Precious Metals (TSX: WPM; NYSE: WPM) for $240 million.