Mr. Matt Manson reports

MARATHON GOLD PROVIDES THIRD QUARTER 2023 CONSTRUCTION REPORT

Marathon Gold Corp. has provided an update on progress at its 100-per-cent-owned Valentine gold project located in central Newfoundland for the quarter ended Sept. 30, 2023. Highlights include:

• The project has marked one full year of construction since early works commenced in October, 2022. More than 800,000 hours of site work have been completed without a lost-time incident.
• The project's overall budget and schedule remain in line with previous guidance, with first gold on track for the first quarter of 2025.
• At quarter-end, overall completion stood at 50 per cent.
• During the quarter, important derisking of the project was achieved with the completion of earthworks at the process plant and significant advancement of earthworks at the tailings management facility. Rock placement for the tailings dam footprint is now 96 per cent complete.
• During the quarter, 1.56 million tonnes of overburden and construction waste rock were mined from the Leprechaun and Marathon pits, with record monthly performance of 580,000 tonnes during September. Project to date, 3.87 million tonnes have been moved, ably supporting the project's construction schedule, and at mining costs trending below budget.
• During the quarter, Marathon was informed by Impact Assessment Agency of Canada that the addition of the Berry deposit to the project's permitted mine plan does not require a new impact assessment under the Impact Assessment Act.
• Currently, 634 Marathon employees and contractors are employed or providing services to the project, 85 per cent of whom are residents of Newfoundland and Labrador.
• The project now has permanent camp capacity of 424 beds and is on track to be connected to NL Hydro grid power by the end of the year, one full year before mill commissioning.

Matt Manson, president and chief executive officer, commented: "The summer construction season has seen rapid progress at the Valentine gold project. We completed earthworks at our process plant, and since August have been preparing concrete foundations and footings for mill equipment and the mill building. Enclosing of the grinding building is on schedule for completion before the end of the year. We have been particularly encouraged by the progress achieved at our tailings management facility, the most important earthworks element of the project. Mining of construction materials is comfortably supporting TMF progress, and we are consistently achieving all requisite engineering and geotechnical standards. Our cost and schedule-to-complete estimates remain consistent with our previous reporting, and our procurement and detailed engineering are approaching completion. Most importantly, we are able to report a consistently safe and environmentally protected work site after one full year of construction."

Site progress report

Process plant site preparation and foundations

During the third quarter, earthworks excavations were completed at the location of the SAG (semi-autogenous grinding) and ball mills, the carbon-in-leach tank farm, the tailings thickener, and the crushed ore stockpile and reclaim area. All load-bearing sites successfully achieved geotechnical specifications for foundations, and the first foundation concrete pours commenced in July. By Sept. 30, 2023, all foundations had been completed, concrete work for the SAG and ball mills' sloped piers was well advanced, and concrete pours for the grinding building's footings and piers were continuing. To date, approximately 5,500 cubic metres of concrete have been poured at the project.

During the quarter, pads were also completed at the mine maintenance facility site, the run-of-mine stockpile and the conveyor alignment. Earthworks excavation of the primary crusher location was completed, and construction of the crusher's mechanically stabilized earth (MSE) retaining wall with gabion baskets had commenced.

Continuing civils works at the process plant site through the fourth quarter will include the completion of the SAG and ball mills' piers, completion of the grinding building wall footings, completion of the MSE wall, and the pouring of lean concrete and foundations for the primary crusher pad. Structural steel for the grinding building's exterior frame has been delivered to site, with enclosing of the building scheduled for the end of the year.

Mining

Mining during the project's construction period is continuing to generate rock for haul roads, pads and the TMF. During the third quarter, overburden removal and mining were transferred to the Marathon pit due to its close proximity to the TMF. Overburden stripped was consistent with forecast, and pioneer mining proceeded quickly to the establishment of the first mining benches. During the third quarter, a total of 1.56 million tonnes of material were moved, representing an average daily mining volume of 17,000 tonnes/day. Project to date, 3.4 million tonnes of waste rock construction material and 481,000 tonnes of overburden material had been mined, slightly exceeding forecast targets. Project to date, cumulative mining costs are $5.44/tonne compared with a budget $5.32/tonne. Mining costs are trending lower as high productivities are achieved consistently, and averaged $4.93/tonne during the third quarter.

Tailings management facility (TMF)

The project's TMF will be a thickened tailings facility with a capacity of 31.6 million tonnes. It is formed by constructing a perimeter-zoned rockfill embankment dam, which will be raised in six phases during the first 10 years of the project. The upstream face of the dam will be lined with a geomembrane which is anchored into low-permeability foundation till, and which will extend approximately 100 metres upstream of the dam toe and overlay granular crushed rock filter layers.

Construction of the phase 1 main dam commenced in July with preparation of the till and bedrock foundation, and subsequent placement of mine waste rock (zone 6 material with -minus 600-millimetre sizing). As of Sept. 30, 2023, 98 per cent of the main dam footprint had been excavated, and 96 per cent of the zone 6 rockfill had been placed, having achieved geotechnical subgrade approval.

Production and placement of the upstream filter layers, which consists of two zones of crushed rock (zone 1 material at minus 25 mm, and zone 2 material at minus 75 mm) commenced in late August. As of Sept. 30, 2023, 90 per cent of the subgrade material underlying the upstream filter layer had been excavated, and 27 per cent of the zone 1 and zone 2 crushed granular fill had been placed.

Geomembrane liner deliveries commenced during the quarter, with installation scheduled to commence in the second quarter of 2024.

During the quarter, the final dormitory of the permanent camp was completed and approved for occupancy, bringing total bed capacity to 424. Average camp occupancy during September was between 280 and 340 persons. Excess camp capacity is available if required in support of the construction schedule.

The project's 66-kilovolt power line has been completed over its full 40-kilometre length and ready to be connected to the on-site transformer station. Subsequent to the quarter-end, modifications to the NL Hydro Star Lake generating station hook-up commenced, as well as installation of the project site's power distribution network. The project site is expected to be energized, on budget and on schedule, prior to the end of the year. This means that mill construction and camp operations in 2024 will be on grid power, minimizing the need for diesel generators and limiting on-site fuel requirements to the mobile mining fleet and the TMF construction contractor. Ninety-one per cent of NL Hydro's power is generated from renewable, hydroelectric sources, giving the Valentine gold project a comparatively low-carbon footprint compared with similarly sized mining projects.

During the third quarter, upgrades to the project's 80 km access road from Millertown commenced, so as to provide greater reliability during the spring 2024 construction season and into mine operations. This work has included culvert installation, ditching, raising of the road bed and applying new road top coats of crushed rock. This work is being carried out by a local contractor based in the community of Millertown and is proceeding well.

The 80 km road from Millertown to the Valentine gold project is public infrastructure, and with its connection to the historic Burgeo Highway it provides an alternative cross-Newfoundland vehicle route. Marathon's investment in this road, including the 2022 replacement of the Victoria River Bridge, creates a significant societal and economic benefit for the province of Newfoundland and Labrador.

Engineering and procurement

Detailed engineering is substantially complete on all aspects of the project, with the exception of additional design hours to accommodate certain changes to mill building design in the areas of concrete, structural and layout design described in Marathon's second quarter report (see Marathon news release dated Aug. 2, 2023).

Procurement stands at approximately 72 per cent complete. Marathon reports procurement on the basis of all project goods and services on an earned progress basis. All long-lead items, including major mill components and the project's mobile mining fleet, have been procured. The SAG and ball mills, including motors, are expected to be delivered to the site in the first quarter of 2024. Major construction packages remaining outstanding at the quarter-end were the structural, mechanical and piping, and electrical and instrumentation packages for the mill.

Schedule and budget

The project remains on schedule to achieve mill commissioning in the fourth quarter of 2024 and first gold in the first quarter of 2025. The project's critical path is the development of the process plant, including its foundations, building enclosure, equipping and commissioning as well as the TMF. Earthworks associated with the development of the TMF are scheduled over two summer construction seasons and one winter season so as to allow operating tailings commissioning in the second half of 2024.

Capital costs incurred from the start of early works in October, 2022, to the end of September, 2023, were $190-million with $318-million committed (excluding sunk costs of $71-million incurred prior to October, 2022). The project's cost to complete, including contingency, was estimated at $463-million as at Oct. 31, 2022, and $318-million at Sept. 30, 2023. As at Sept. 30, 2023, Marathon had approved contingency draws of $13.2-million from a total contingency reserve of $38.9-million. Unused contingency stood at $25.7-million, or 66 per cent. Contingency draws are approved on a package-by-package basis as construction proceeds. During the quarter, $3.9-million of unused contingency on finalized construction packages was transferred to the management reserve, which now stands at $4.1-million.

Human resources

At the end of Sept. 30, 2023, 634 persons were employed directly or contracted to the project. Marathon collects diversity employment data on the basis of voluntary declaration. On this basis, 15 per cent of the persons employed by the project are female and 8 per cent are indigenous persons. Twenty-three per cent are residents of the six communities within the project's socio-economic area of influence (Millertown, Buchans, Buchans Junction, Grand Falls Windsor, Badger and Bishop's Falls) and 85 per cent are residents of the province of Newfoundland and Labrador.

Construction permitting and berry environmental assessment

The Valentine gold project was released from its Newfoundland and Labrador environmental assessment (EA) on March 17, 2022, and its federal EA process on Aug. 24, 2022. Permitting for specific site activities has continued throughout the mine development process in accordance with the construction schedule. At the end of Sept. 30, 2023, overall permitting progress stood at 97 per cent complete, with site permitting proceeding smoothly in support of the construction schedule.

The Berry complex (pit, waste rock facility and associated infrastructure) is subject to further EA requirements to identify, assess and mitigate potential environmental effects during all project phases, including construction, operation, decommissioning, rehabilitation and closure, and postclosure. Marathon filed EA registration materials for Berry with the Newfoundland and Labrador Department of Environment and Climate Change, EA division, (NLDECC), and the Impact Assessment Agency of Canada (IAAC) on Aug. 11, 2023, following the completion of an effects assessment and consultation with both the provincial and federal regulators, indigenous groups, communities, and stakeholder organizations.

In late August, 2023, Marathon was informed by IAAC that changes to the project to accommodate Berry do not require a new impact assessment under the Impact Assessment Act (IAA). This means that, federally, the addition of the Berry complex is considered a change to the designated project referenced in the August, 2022, decision statement of the Minister of Environment and Climate Change Canada, and potential amendments to the decision statement are now being considered. Provincially, the assessment of Berry is considered a new undertaking and requires the submission of a new EA registration with the NLDECC. Marathon expects to be notified shortly by the NL Minister of Environment and Climate Change if additional information is required to complete the provincial assessment process, which is expected take the form of an environmental preview report.

Marathon anticipates the Berry review processes will be completed during 2023 and 2024, well in advance of the scheduled commencement of mining at Berry in the second quarter of 2025.

Qualified persons

Disclosure of a scientific or technical nature in this news release has been approved by Paolo Toscano, PEng (Ontario), senior vice-president, projects, engineering and construction, for Marathon, James Powell, PEng (Newfoundland and Labrador), vice-president, regulatory and government affairs, for Marathon, and David Ross, PGeo (Newfound and Labrador), vice-president, geology and exploration, for Marathon. Mr. Toscano, Mr. Powell and Mr. Ross are qualified persons under National Instrument 43-101.

About Marathon Gold Corp.

Marathon is a Toronto-based gold company advancing its 100-per-cent-owned Valentine gold project located in the central region of Newfoundland and Labrador, one of the top mining jurisdictions in the world. The project comprises a series of five mineralized deposits along a 32-kilometre system. A December, 2022, updated feasibility study outlined an open-pit mining and conventional milling operation producing 195,000 ounces of gold a year for 12 years within a 14.3-year mine life. The project was released from federal and provincial environmental assessment in 2022 and construction commenced in October, 2022. The project has estimated proven mineral reserves of 1.43 million ounces (23.36 million tonnes at 1.89 grams per tonne) and probable mineral reserves of 1.27 Moz (28.22 Mt at 1.40 g/t). Total measured mineral resources (inclusive of the mineral reserves) comprise 2.06 Moz (29.23 Mt at 2.19 g/t) with indicated mineral resources (inclusive of the mineral reserves) of 1.90 Moz (35.40 Mt at 1.67 g/t). Additional inferred mineral resources are 1.10 Moz (20.75 Mt at 1.65 g/t Au).

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