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Mining the Northwest: Generation Mining plots the path forward in Marathon

Toronto mine developer looks to raise $665M to build North Shore open-pit palladium, copper mine
Generation Mining Marathon Project
(Generation Mining photo)

The wheels are beginning to turn in planning the development of an open-pit palladium and copper mine outside the town of Marathon.

Toronto's Generation Mining had been holding off revealing its plans until its joint venture partner, South Africa's Sibanye-Stillwater, decided not to buy back into the mining project it had optioned to Gen Mining two summers ago.

Since appearing on the North Shore of Lake Superior in 2019, Generation has been on an aggressive exploration and development track at Marathon. And it appears nothing has changed based on their upcoming plans over the next few months, as outlined in a web call that company management delivered to investors on July 27.

Generation now holds an 81 per cent controlling interest in the project.

Executive chairman Kerry Knoll joined company president-CEO Jamie Levy and chief operating officer Drew Anwyll rolled out what's on their to-do list for this year, the project milestones they intend to pass, and how the mine design and financing will take shape.

By way of projected palladium and precious metals production, Marathon is shaping up to be the seventh largest mine in Canada, ranked between Agnico's Meliadine Mine in Nunavut and New Gold's Rainy River Mine, northwest of Fort Frances.

"It's a fairly substantial -sized mine," Levy said.

Clearing land away for the first of three deposits to be mined, along with construction of the access road, should start by the third quarter of 2022.

The company expects to have environmental assessment approvals completed by then with all the necessary government permits.

The Marathon project will offer 1,000 construction jobs following the initial groundbreaking.

After an 18-month construction period, they'll be mining and mill jobs for 400 when production starts in late 2023 or early 2024.

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The numbers used in the feasibility study are only for one of three deposits, presuming metal prices hold.

Last March's feasibility study released by the company placed a 13-year mine life at Marathon, producing 240,000 ounces of palladium annually. The mine also contains 36 million pounds of copper, 41,000 ounces of platinum with some gold and silver credits.

"We're pretty confident this mine life is going to last a lot longer," said Knoll, with an "immense" amount of mineral potential on their 227-square-kilometre property, much of it unexplored.

The company has been drilling to the west and north of the first deposit, looking for high-grade feeder zones to the pit. Their current 8,000-metre drill program is on hold due to forest fires in the area.

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For decades, Marathon has been an almost turnkey, but neglected, mine project that was held by a succession of companies. Plans to develop it were always waylaid by plunging metal prices, lack of financing and disinterest by the companies. Very little drilling exploration has been done over more than a decade.

Levy said the timing is right for Marathon to enter production. There are very few new sources of palladium and other 'green' metals needed to feed the world electric vehicle market.

Marathon might not substantially move the needle in meeting the global demand, he said, "but it is going to be needed because there is certainly going be demand increasing very soon," alluding to the Biden administration's increasing of emissions standards in the U.S.

Production at Marathon will be structured in such a way that the palladium will be mined first, most of it in the early years of the operation before giving way to predominately copper extraction.

Gen Mining thinks they've covered all the bases to meet the metal needs of the automotive sector.

Palladium is used in catalytic converters to scrub clean the emissions from a gas-powered car. The company is estimating a 10-year window to capitalize on palladium before government emission mandates spur the consumer switch over to the EV market where copper and palladium will be needed for batteries and the fuel cells.

Anwyll called copper the "veins and the arteries" in the greening of the economy - which is driving the 'electrification' of the future.

The presence of small amounts of rhodium in their concentrate samples presents a unique revenue generating opportunity. 

Trading at US$17,850 an ounce, rhodium is an extremely rare platinum group metals used in catalytic converters and other pollution control technologies.

Knoll said many of the smelters they've talked to either won't pay them to recover the rhodium or don't have the ability to do so. He said that'll play a factor in their final decision of a smelter partner.

This year, the company will be awarding a detailed engineering contract shortly, will expanding its technical team, and is mulling over financing options in order to raise $665 million for the mine's construction and equipment.

Knoll believes the array of precious metals in the ground at Marathon provides plenty of flexibility to raise a good chunk of those upfront capital costs through streaming deals, selling royalties or bringing aboard a development partner.

"We are examining all of the above in our next steps to finance this mine," he said. They've already received feelers from six of the biggest metals streaming players in the world, interested in Gen Mining's gold, silver and part of the platinum and copper production.

The North Shore of Lake Superior is booming with mining activity.

With a number of new and existing mines either being planned, are under construction or being expanded in Geraldton, White River and Dubreuilville, Knoll said that bodes well for his company. It'll keep a talent pool of mining engineers and contractors in the area to eventually transition over to their project.

Infrastructure won't be a problem. Either crossing their property or within a stone's throw are the Trans-Canada Highway, a railway line, a municipal airport and a power line that's being upgraded. Downtown Marathon is 10 kilometres from the company's main zone where the first pit will be situated.

From an environmental and ESG ( Environmental, Social & Governance) standpoint, Anwyll said they have "the opportunity to do things right, right from the beginning."

The operation will have a modern water treatment system and they are considering deploying an electric fleet of trolleys and shovels.

Management said they've received great support from communities along the North Shore who stand to benefit from the economic spinoffs. For the Town of Marathon, the mine translates to $24 million in taxes over its operating life, and many millions more generated in provincial and federal mining and corporate taxes.

Gen Mining pledges to support First Nation and Metis business, and hiring local wherever possible. Last spring, the company struck a community benefits agreement with nearby Biigtigong Nishnaabeg First Nation.

"Frankly, it's a great area to be developing a mine," said Anwyll, with "support from Thunder Bay to Wawa."