By KELLY LOUISEIZE
Marathon - Every mining company has variables determining whether or not the property can be mined at a profit.
For Marathon PGM, those variables have become clearer as a result of round after round of drilling, and pit resource calculations.
With confirmed preliminary estimates and known resources in place “it looks like there is something here that could be mined at a profit,” Phillip Walford president and CEO of Marathon PGM says.
The land package the company is working on encircles the Marathon airport.
Marathon drilled 32 drill holes totalling 3,700 metres in 2004 and 102 holes totalling 14,000 m in 2005. Those samples were added to prior results totalling 61,304 m.
Intrusive rocks of the Coldwell Complex revealed high grade mineral zones of copper, gold, palladium and platinum and other metals.
The last time the resources were assessed, Walford used a platinum grade cut-off of .08 grams per tonne. Anything grading below that was deemed uneconomical to extract, but other high-value minerals were not included in the equation.
To examine the values of a variety of minerals in each resource block (a defined area of the ore body – picture a big cube of rock), Marathon hired Eugene Puritch, a professional engineer with Brampton-based P&E Mining Consultants Inc. Puritch took a two-year average value of gold, platinum and copper and plugged it into a pit resource software program called Whittle.
The program identifies mineral blocks with values then applies mining costs to it.
Processing costs of $8.60 per tonne, including $0.71 in administrative fees, concentrate shipping costs of 38 cents per tonne and smeltering treatment charges of $2.31 per tonne milled basis were incorporated.
It was estimated the break-even point or the cut-off for Marathon PGM’s net return would be $12 Cdn per tonne. That means blocks worth less than the $12 dollars per tonne would not be included in the resource.
The estimate is also based on concentrate recoveries of 92 per cent of copper, 60 per cent of gold, 76 per cent of platinum and 80 per cent of palladium, in line with the Lakefield’s report for 2005.
The study did not figure in the mining production costs (the cost of going in to break and haul the rock out) or capital expenses.
But the report still provides a rough outline of what could be mined at a profit, he says.
“This is a big jump from previous resources in that this one has a lot of economics applied to it,” he says. “So we are getting a lot closer to (production).”
The company will be undertaking a preliminary assessment report to fine-tune the economics of the deposit. This will also set the company up for future exploration, environmental, metallurgical and social initiatives. The latter refers to developing relationships with First Nations. The report is expected to be complete by June.
“This is a major step along the way,” he says.
Over the last two years Marathon PGM has spent approximately $3.5 million in exploration.
Another $1.5 million will be spent on the property as targets to the south require further investigation. Exploration teams have only covered three kilometres of the 13-km property.
Walford anticipates the company will be “doing more work of that nature to increase the recovery of platinum and palladium over the next two years.”
The communities of Pic River First Nation and Marathon, which are faced with impending mine closures, are watching the company’s progress carefully. The Golden Giant Mine in Marathon, for example, has already closed. The David Bell Mine, part of the Hemlo Gold Camp, is scheduled to close in 2009. Williams is set to close in 2011.
“We want to do a good job and make sure this thing is viable for the shareholders and communities and we are not going to make any unreasonable promises,” Walford says.
Benton Resources Corp. adjoins Marathon’s property, while MetalCORP Ltd. and Discovery PGM Exploration Ltd. property lies to the west.
