In a news release, Generation Mining Ltd. (GENM:TSX; GENMF:OTCQB; 9GN:FSE) announced the results of a feasibility study on its Marathon asset in Ontario, Canada.
"This study confirms that the Marathon palladium and copper project is a substantial mining project that is expected to provide a very robust return on investment," President and CEO Jamie Levy said in the release. "We expect the palladium supply in particular to remain in deficit for the foreseeable future as Europe, China and other regions roll out tougher emissions standards."
The study calculates an after-tax internal rate of return (IRR) of 29.7% and a net present value at a 6% discount (NPV6%) of CA$1.07 billion. These figures are based on long-term metals prices of US$1,725 per ounce for palladium and US$3.20 per pound for copper. Payback is estimated to be 2.3 years.
When using current spot metal prices (US$2,395 per ounce for palladium and US$3.99 a pound for copper), the study shows an after-tax IRR of 47%, an NPV6% of CA$2.02 billion and a payback period of 1.5 years.
Initial capex is estimated to be CA$665 million net of equipment financing. Average life-of-mine cash costs are an estimated US$687 per palladium equivalent ounce2 (Pd eq oz2). All-in sustaining costs are calculated at US$809 per Pd eq oz2.
The study forecasts quantities of payable metals at 1.9 million ounces of palladium and 467 million pounds of copper, along with 537,000 ounces of platinum, 151,000 ounces of gold and 2.8 million ounces of silver.
"With the consensus outlook for palladium and copper strong for the next decade," commented Executive Chairman Kerry Knoll, "this is a project whose time has come. With little new PGM mine capacity being scheduled to come on stream over the next few years, Gen Mining plans to advance the environmental approval process, detailed engineering and mine financing during the remainder of 2021. We anticipate being able to begin construction next year subject to permitting approvals and financing arrangements."
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