Generation’s first-phase Marathon palladium drill program off to strong start

The first phase of drilling this year at Generation Mining’s (TSX: GENM) Marathon palladium-copper project in northwestern Ontario has expanded mineralization by 150 metres from the closest previous hole, revealing higher copper grades.

The company is pursuing a multiphase program at the 260-sq.-km Marathon property, with contractor Boart Longyear drilling 8,000 metres on priority targets at the Biiwobik prospect to better define the extent of the Powerline and Chonolith domains. The work will help determine the potential to expand the deposit or develop a fourth pit, or even to extend the mine life beyond the March 2023 updated feasibility study’s 12.5 years.

Generation Mining’s CEO Jamie Levy welcomed the results as “a great start.” “These significant intercepts mark a substantial step-out of 150 metres from previous drilling and indicates that the overall copper grade appears to increase in this direction,” he said in a Tuesday release.

Marathon, one of the few undeveloped palladium projects in North America, could help meet rising demand for copper and palladium, both essential in the manufacturing of hybrid and electric vehicles.

Among the highlight drill results was hole MB-24-058, which cut 8 metres grading 0.85% copper, 2.48 grams palladium per tonne, 0.57 grams platinum, 0.22 grams gold for a copper-equivalent grade of 3.06%. The intersection is within a broader 30-metre interval grading 0.41% copper, 1.02 grams palladium, 0.24 grams platinum and 0.1 gram gold for 1.33% copper equivalent.

Hole MB-24-059 cut 5 metres at 0.56% copper, 1.12 grams palladium, 0.21 grams platinum, and 0.15 gram gold for 1.59% copper equivalent. It was also encountered within a 22-metre interval grading 0.19% copper, 0.9 gram palladium, 0.24 gram platinum, and 0.1 gram gold for 0.98% copper equivalent.

Other results from the 2024 Biiwobik drilling program include hole MB-24-054, which showcased diverse mineralization styles. This hole returned 34 metres of oxide cumulates with up to 0.13% copper, 1.37 grams palladium, 0.23 gram platinum, and 0.1 gram gold, along with an 11-metre interval of massive sulphides with higher values of 0.39% copper and 0.5 gram palladium.

The drilling supports the company’s theory that massive sulphides accumulated in feeder conduits, and help refine its process for selecting high-grade targets. The recent exploration extended the mineralization 450 metres north of the resource-stage Marathon deposit, confirming that it remains open to the north and at depth.

Future programs will focus on expanding this zone and potentially adding to the inferred resource.

The updated feasibility study forecasts production over a 13-year life of 2.1 million oz. palladium, 517 million lb. copper, and smaller amounts of platinum, gold, and silver, totalling 3.6 million oz. of palladium-equivalent.

The project’s post-tax net present value (6% discount) is estimated at C$1.2 billion with a 25.8% internal rate of return and a payback period of 2.3 years, assuming palladium at $1,800 per oz. and copper at $3.70 per lb. Initial capital costs are projected at $1.1 billion, with 58% of revenue from palladium and 29% from copper.

Located 300 km east of Thunder Bay and just north of Lake Superior, the Marathon project involves building, operating, decommissioning and remediation of three open pits to produce copper concentrates. In March last year, it finalized an offtake agreement with Glencore (LSE: GLEN), which will buy 50% of the concentrates produced at Marathon.

The project hosts open pit proven and probable reserves of 127.6 million tonnes containing 2.3 million oz. palladium at 0.65 gram per tonne and 530 million lb. copper at 0.21%. It also hosts 285,000 oz. gold at 0.07 gram, 806,000 oz. platinum at 0.2 gram and 6.8 million oz. silver at 1.6 grams.

At C26¢ per share, the company’s Toronto-quoted equity is down about 56% over the past 12 months, having touched C58¢ and C17¢. It has a market capitalization of C$61.4 million ($44.8m).