Jamie Levy, President and CEO of Generation Mining Limited (TSX:GENM, OTCQB: GENMF), joins me for an update on their fully-permitted and shovel-ready Marathon Copper-Palladium Project in Northwestern Ontario. We talk resources, key metrics from the Feasibility Study, options for the upcoming mine financing, and the potential for funding support from the province of Ontario.
We start off talking about he robust resources at Marathon with 1.1 billion lbs of copper, ~4 million ounces of palladium, and 1.3 million ounces of platinum, with some additional co-credits from gold and silver. Jamie highlights the importance of developing domestic sources of these strategic metals in Canada, and the interest from the provincial and federal governments on expediting the construction of new mines and sources of supply in country.
The Feasibility Study estimated a Net Present Value (using a 6% discount rate) of C$1.07 billion, an Internal Rate of Return of 28%, and a 1.9-year payback based on the 3-yr trailing average metal prices at the effective date of the Technical Report. Over the anticipated 13-year mine life, the Marathon Project is expected to produce 2,161,000 ounces of palladium, 532 million lbs of copper, 488,000 ounces of platinum, 160,000 ounces of gold and 3,051,000 ounces of silver in payable metals.
We discuss the capital stack coming together starting off with the Wheaton Precious Metals stream, which consisted of an early deposit of $40 million (received) and then an upcoming $200M construction payment for 100% gold and 22% platinum production. Endeavour Financing has also helped set up a mandate letter for banking syndicate of Export Development Canada, ING Capital LLC and Societe Generale to arrange a Senior Secured Project Finance Facility of up to $540M. Conditional on final diligence and debt capacity. Additionally, there are ongoing discussions for $200M of deeply subordinated debt, and the potential for government grants.
Wrapping up we discussed the experience of the team in developing and building prior mines, and why they'd prefer to build Marathon internally, but are still open to the options of JV partners or a project scale if it was the best value creation for shareholders.
If you have any questions for Jamie regarding Generation Mining, then please email those in to me at Shad@kereport.com.
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