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Generation Mining Feasibility Study suggests 13 year life for Marathon Palladium-Copper Project

Mar 4, 2021

Generation Mining Limited has announced the results of the Feasibility Study for the Marathon Palladium and Copper Project (the “Project”) located near the Town of Marathon in Northwestern Ontario. The Feasibility Study supports an open pit mining operation with a robust rate of return over a 13-year mine life.

Feasibility Study Highlights:

  • Robust economics: Internal Rate of Return (“IRR”) (after-tax) of 29.7% and a Net Present Value (“NPV”) (6%) of $1.07 billion based on a long-term price of US$1,725/oz for palladium and US$3.20/lb for copper
  • Using spot metal prices1: IRR of 47%, NPV6% of $2.02 billion and payback of 1.5 years using spot prices of US$2,395/oz for palladium and US$3.99/lb for copper
  • Quick payback on low Initial Capital: $665 million (US$520 million) net of equipment financing and a 2.3-year payback period
  • Low operating costs and attractive AISC: LOM average cash costs of US$687/Pd Eq. oz2 and all-in sustaining costs (AISC) of US$809/Pd Eq. oz2
  • Payable metals: 1.9 M oz palladium, 467 M lbs copper, 537,000 oz platinum, 151,000 oz gold and 2.8 M oz silver
  • First three years of production following commercial production: $979 million of free cash flow, Payable metal: 588,000 oz of palladium and 122 M lbs of copper from approximately 270,000 tonnes of Cu-Pd concentrate shipped
  • The Project is expected to generate direct corporate taxes and duties to the provincial and federal governments of $944 million


Spot Price on 22 February 2021: Pd = US$2,395/oz; Cu = US$3.99/lb; Pt = US$1,268/oz; Au = US$ 1,807/oz; Ag = US$27.45/oz; Pd, Pt, Au and Ag prices sourced LBMA; Cu price sourced on LME Copper; C$/US$ exchange rate = 1.266, sourced Bank of Canada prior week average ending 22 Feb. 2021

2 Pd eq grade is calculated based on: (Pd US$1,725/31.10348 x Pd grade g/t  +Cu US$3.20/2204.6 x Cu grade %/100+Au US$1,400/31.10348 x Au grade g/t+ Pt US$1,000/31.10348 x Pt grade g/t+Ag US$20/31.10348 x Ag grade g/t))/ (Pd US$1,725/31.10348)

Jamie Levy, President and CEO of Gen Mining commented, “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. 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. We are excited about the opportunity to create jobs and economic stimulus to Canada, Ontario and to the communities surrounding Marathon.”

“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.”

Drew Anwyll, P.Eng, Chief Operating Officer, said, “The process plant was designed at a capacity of 9.2 Mt per year with the flowsheet realizing improved metallurgical recoveries compared to past proposed designs; in addition, the mine plan includes strategic sequencing of the open pit that targets the higher grade palladium in the first half of the mine life. With these key design elements, and a realistic initial capital, we have a Project that demonstrates exceptional financial results and a quick payback period of 2.3 years.”

Gen Mining owns an 80% interest in the Project, with the remaining interest owned by Sibanye Stillwater Limited (“Sibanye-Stillwater”). Sibanye-Stillwater has certain back-in rights that allow it to increase its interest in the Project to 51% in certain circumstances and subject to certain conditions (see News Release of July 9, 2019 for details). The Feasibility Study has not yet been approved by the Joint Venture management committee and Sibanye-Stillwater and as a next step, Sibanye-Stillwater and the management committee are planning to review the Feasibility Study.

The Feasibility Study was prepared by G Mining Services Inc. (“GMS”), along with contributions from Ausenco Engineering Canada Inc. (“Ausenco”), Haggarty Technical Services (“HTS”), Knight Piésold Ltd. (“KP”), WESC Inc. and P&E Mining Consultants Inc. (“P&E”).

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