Canada’s Marathon Gold (TSX: MOZ) is moving ahead with its proposed Valentine open-pit gold mine in central Newfoundland as the company’s board has approved construction.
“The company’s decision to proceed with construction of the Valentine Gold project considers the impact of almost two years of market inflation on the project’s costs, as well as a necessarily cautious approach to project management, contingency and scheduling,” President and CEO Matt Manson said in the statement.
Marathon now expects that building the gold mine would cost between C$470 million and C$490-million, including early works to be carried out in the fourth quarter.
The new figure compares with the C$305 million initial capital cost outlined in the project’s March 2021 feasibility study, which outlined a conventional surface mine with two open pits and 13-year milling operation.
The fresh cost estimate also incorporates certain scope changes relating, principally, to updated staffing levels and the impact of moving from the 22-month construction schedule contained within the feasibility study to the current 28-month construction schedule.
Marathon said it was assessing the new Berry deposit’s potential to become a third mining pit. The “3-Pit” mine plan is expected to show an increased mineral reserve, an extended mine life, and a higher gold production profile compared to the existing plan.
Berry’s evaluation will constitute an updated feasibility study and will include the updated life-of-mine capital and operating cost assessments, and an updated financial evaluation, Marathon said.
The company estimates the study will take between 18 and 24 months — enough to bring Berry into the project’s mine plan after commissioning the mill. Valentine is considered the largest undeveloped gold project in Atlantic Canada. It’s located about 80 km southwest of the communities of Millertown and Buchans.