By NICK STEWART
The potential for one of the largest mines in Ontario may be sitting just outside of Marathon, according to Phil Walford, president and CEO of Marathon PGM Corporation.
Work is moving full steam on the development of a feasibility study for the company’s Marathon PGM-Cu Project site, located 10 kilometres northwest of the town.
“If this was in operation right now, it would be the largest in terms of moving materials in Ontario. The base case is 1,800 tonnes of ore and three times that amount in waste,” Walford says.
“Now we’re possibly looking at a higher production rate once we add 180 holes to our database, and if they enlarge our resource, they might increase it to 2,200 tonnes per day of ore, so it would be no small operation.”
Led by the Toronto-based Micon International Ltd., the feasibility study is well underway, with environmental work moving forward and metallurgical testing in its final phases.
This study is expected to be completed in second quarter of 2008, though Walford says the company is hoping for an April completion date.
Should results of the study turn up positive, a production decision can be made, potentially leading to a year of detailed engineering to be followed by another year and a half of construction. Should financing and permitting progress smoothly, this means the mine could be in production as early as 2010.
Walford says the company’s expectations for the project now exceeds their expectations from a year ago, when an economic assessment showed a total measured and indicated resource of 49.3 million tonnes grading 0.91 grams per tonne (g/t) palladium, 0.24 g/t platinum, 0.09 g/t gold and 0.31 per cent copper.
After adding drill results from its 25,000-metre 2006 drill program, the company was able to increase that resource by 38 per cent this spring. That total now contains a measured resource of 39.2 million tonnes containing 1.6 million ounces of PGMs and gold with 285 million pounds of copper, and an indicated resource of 28.9 million tonnes containing 1.1 million ounces of PGMs and gold with 178 million pounds of copper.
An additional 15 million tonnes of low-grade ore will have to be extracted as part of the open pitting process, Walford says. While it would have no real value on its own, it too can be stockpiled, processed and eventually sold.
These factors have effectively stretched the potential mine life from nine years to 13.
However, this economic assessment doesn’t factor in the 180 holes that have been drilled in the meantime, leading Walford to believe the numbers may improve even further in the coming months.
“It’s a four-dimensional problem, in that it’s not just with the pit and not just the geometry but also the grade and economics as well. I can make some guesses, but until we’re able to run the model, we won’t know how much of an impact some of this is going to have.”
Having already completed the planned 35,000-metre drill program for the year, the company has begun to pursue an additional 3,000 metres of drilling.
However, work is expected to come to a halt in the coming weeks so that drill results can be entered by mid-October. At that time, Marathon PGM will begin revising its resource numbers, which in turn will act as the basis for the ore reserves for its feasibility study.
Production at the property would eventually mean creating separate open pits at the Malachite and Main Zones, though mineralization is currently being traced between the two. While the average grade of PGMs in this zone, known as the W Horizon, is roughly 1.5 g/t, it can reach up to 100 g/t in small localized lenses.
As a result, this zone may well play into the early life of the potential mine, providing rapid payback and expanding the size of the Main Zone pit. Recent drilling has worked to determine the continuity of the mineralization between the two zones, though more drilling will be required in the spring for further confirmation.
The company has recently begun spreading its wings beyond Ontario, with exploration in a Newfoundland property, while earning interest in a Manitoba property. This fits into the company’s strategy of developing a pipeline of properties to ready itself for future expansion.
www.marathonpgm.com
