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Marathon Gold Corp
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Marathon Gold releases NI 43-101 estimate on Valentine

2020-01-20 07:38 ET - News Release

Mr. Matt Manson reports

MARATHON GOLD REPORTS POSITIVE MINERAL RESOURCE UPDATE FOR THE VALENTINE GOLD PROJECT

Marathon Gold Corp. has released an updated mineral resource estimate for the Valentine gold project in central Newfoundland following the 2019 infill drill program at the Leprechaun and Marathon deposits. Highlights are as follows:

  • Measured and indicated (M&I) mineral resources of 3.09 million ounces (54.9 million tonnes at 1.75 grams per tonne gold), an increase of 400,000 ounces, or 15 per cent, compared with the previous estimate from October, 2018;
  • Inferred mineral resources of 960,000 ounces (16.8 million tonnes at 1.78 g/t Au), a decrease of 570,000 ounces, or 37 per cent, compared with the previous estimate. This represents an effective conversion of 26 per cent of the project's inferred mineral resources to higher confidence M&I categories and the loss of 11 per cent, with 63 per cent remaining;
  • Total high-grade, open-pit M&I resources of 2.58 million ounces (30.6 million tonnes at 2.62 g/t Au) and low-grade, open-pit M&I resources of 340,000 ounces (22.9 million tonnes at 0.47 g/t Au) available for use in the continuing Valentine gold project prefeasibility study (PFS);
  • Refined geological models, tighter restrictions on high-grade assays and increased drill density for each of the Leprechaun and Marathon deposits yielding a higher confidence estimate that is demonstrated by, among other factors, a 63-per-cent increase in measured resources to 1.90 million ounces (31.7 million tonnes at 1.86 g/t Au) and better overall geostatistical rigour.

Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Matt Manson, president and chief executive officer, commented: "Our 2019 infill drilling at the Valentine gold project was aimed at the upgrade and conversion of in-pit inferred mineral resources, and we are pleased to be reporting today the successful conversion of some 400,000 ounces from this program. The project's total measured and indicated mineral resources now stand at over three million ounces, continuing a trend that started in 2010. Most of the latest increase has come from the Leprechaun deposit, which now contributes over one million ounces of higher confidence mineral resources to the overall project inventory. The new estimate incorporates the results of what is now over 270,000 metres of drilling, with drill spacing averaging 10 to 15 metres on 10-metre sections over the core mineralized areas. Refined geological models and mineralized domains, as well more restrictive capping on the highest-grade assays, have yielded the best constrained estimate achieved at the project to date, particularly in the definition of in-pit, high-grade material. This will now be the focus of our mine planning in the Valentine gold project PFS."

Mineral resource estimate, effective Jan. 10, 2020

The updated mineral resource estimate was authored by John T. Boyd Company utilizing Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards on Mineral Resources and Reserves (2014). Peer review and risk analysis were completed by RPA Inc., which has determined that the new resource models as presented for both the Leprechaun and Marathon deposits are reasonable over all.

                      MEASURED AND INDICATED MINERAL RESOURCES BY DEPOSIT

Category                                        Tonnes               Grade                  Oz
                                                  (mt)            (g/t Au)            (moz Au)

Marathon                  measured               23.15                1.73                1.29
                         indicated               13.04                1.52                0.64
                         total M&I               36.20                1.65                1.92
Leprechaun                measured                8.53                2.23                0.61
                         indicated                8.37                1.73                0.47
                         total M&I               16.90                1.99                1.08
Victory                   measured                   -                   -                   -
                         indicated                1.08                1.47                0.05
                         total M&I                1.08                1.47                0.05
Sprite                    measured                   -                   -                   -
                         indicated                0.68                1.76                0.04
                         total M&I                0.68                1.76                0.04
All deposits              measured               31.69                1.86                1.90
                         indicated               23.17                1.60                1.19
                         total M&I               54.85                1.75                3.09

                                 INFERRED MINERAL RESOURCES BY DEPOSIT
  
Category                                          Tonnes                Grade                   Oz
                                                    (mt)             (g/t Au)             (moz Au)

Marathon                   inferred                10.57                 1.96                 0.67
Leprechaun                 inferred                 2.86                 1.67                 0.15
Victory                    inferred                 2.14                 1.31                 0.09
Sprite                     inferred                 1.19                 1.29                 0.05
All deposits         total inferred                16.77                 1.78                 0.96

Notes to the mineral resources

The January, 2020, Valentine gold project mineral resource estimate is based on a total database of over 270,000 metres drilled and 190,000 assays, approximately 25 per cent of which have been processed by metallic screen. In-pit mineral resources have been determined by the whittle method based on an estimate of their reasonable prospects for economic extraction, using certain assumptions for gold recovery, costs for mining, processing and sale, and a $1,300 (U.S.)/ounce gold price. All in-pit mineral resources apply a bottom cut-off grade of 0.30 g/t Au. Additional underground mineral resources are defined as material outside of the whittle pit shell at a bottom cut-off of 1.663 g/t Au. The reader is reminded that mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, socio-political, marketing or other relevant issues including risks set forth in Marathon's annual information form for the year ended Dec. 31, 2018, and other filings made with Canadian securities regulatory authorities and available at SEDAR.

Mineral resources above a cut-off grade of 0.7 g/t Au are characterized as high grade to be processed as priority mill feed in the PFS mine plan. Mineral resources between cut-off grades of 0.3 g/t Au and 0.7 g/t Au are characterized as low grade for stockpiling and potential processing later in the mine life. All mineral resources have been estimated assuming a mill recovery formula of 85.5 per cent at the bottom cut-off up to 97 per cent at 3.5 g/t Au.

                            MEASURED AND INDICATED MINERAL RESOURCES BY TYPE  
 
                                  Open pit                   Underground                            Total
Category      Tonnes      Grade         Oz   Tonnes      Grade        Oz    Tonnes       Grade         Oz
                (mt)   (g/t Au)   (moz Au)     (mt)   (g/t Au)  (moz Au)      (mt)    (g/t Au)   (moz Au)
High grade
Measured       18.05       2.79       1.62     0.59       4.40      0.08     18.64        2.84       1.70
Indicated      12.58       2.38       0.96     0.71       3.70      0.08     13.29        2.45       1.05
Total M&I      30.63       2.62       2.58     1.30       4.02      0.17     31.93        2.68       2.75
Low grade
Measured       13.05       0.47       0.20        -          -         -     13.05        0.47       0.20
Indicated       9.88       0.46       0.15        -          -         -      9.88        0.46       0.15
Total M&I      22.92       0.47       0.34        -          -         -     22.92        0.47       0.34
Total M&I
Measured       31.10       1.81       1.81     0.59       4.40      0.08     31.69        1.86       1.90
Indicated      22.46       1.54       1.11     0.71       3.70      0.08     23.17        1.60       1.19
Total M&I      53.56       1.70       2.92     1.30       4.02      0.17     54.85        1.75       3.09

                                       INFERRED MINERAL RESOURCES BY TYPE  

                                         Open pit                       Underground                         Total
Category       Tonnes       Grade              Oz      Tonnes      Grade         Oz    Tonnes      Grade       Oz
                 (mt)    (g/t Au)        (moz Au)        (mt)   (g/t Au)   (moz Au)      (mt)   (g/t Au) (moz Au)
High grade
Inferred         7.67        2.31            0.57        2.28       3.90       0.29      9.95       2.68     0.86
Low grade
Inferred         6.81        0.46            0.10           -          -          -      6.81       0.46     0.10
Total
inferred
Inferred        14.48        1.44            0.67        2.28       3.90       0.29     16.77       1.78     0.96

The mineral resources presented were estimated using a block model with a block size of six m by six m by six m subblocked to a minimum block size of two m by two m by two m using ID3 methods for grade estimation. Geological models were developed for each deposit and used to define several distinct mineralized domains. Search ellipsoids were determined for each domain by variography and oriented such as to be consistent with the shallowly dipping, stacked en echelon quartz-tourmaline-pyrite-gold vein sets that are the dominant source of gold mineralization at the project. Measured resources were classified on the first pass of the estimation based on a maximum of six composites and a minimum of four within 15 m of the nearest neighbour (1.5 times average section spacing). Indicated mineral resources were classified on passes 1 or 2 of the estimation based on a maximum of six composites and a minimum of three within 25 m of the nearest neighbour (2.5 times average section spacing). Inferred mineral resources were classified on passes 1, 2 or 3 of the estimation based on a maximum of six composites and a minimum of two within the full ellipsoid search area.

To better constrain zones of high- and low-grade in the block model and minimize the risk of grade smearing, subdomaining of the QTPV mineralized domain, the dominant domain for gold content, was investigated for both the Leprechaun and Marathon deposits. While this proved an effective approach at the Leprechaun deposit, the estimation of contained ounces at the Marathon deposit proved highly sensitive to the nature of the subdomain boundaries chosen, given the more widely distributed high-grade zones at Marathon. Consequently, both deposit models were based ultimately on a single QTPV domain with more rigorous spatial restriction of high-grade assays and hard capping of potential high-grade outliers to restrict smearing. Grade caps were determined for each domain using cumulative frequency (lognormal) probability analysis. The geostatistical results achieved by this method include average block model grades below both the raw drill hole average grades and the composite average grades for each domain, and coefficients of variance (CVs) of approximately 2.5 in the QTPV domains of both deposits. This represents a significant improvement in the overall quality of the estimate.

 
                                              CAPPING AND BLOCK MODEL STATISTICS
                                                                                   Block
                                                  Average  Average       Block     model
                    Minimum   Maximum  Average        1 m    block       model     coeff                         Outlier
                     sample    sample   sample  composite    model    standard        of       Cap    Threshold     hard
Domain     Samples    grade     grade    grade      grade    grade   deviation  variance  (g/t Au)  restriction      cap
                                      (g/t Au)   (g/t Au) (g/t Au)                                              (g/t Au)
Marathon
Deposit
QTPV        40,512     0.01  1,313.71     1.28       1.18     0.83         2.1       2.5      45.0   13x15x2.7m    150.0
MD           2,213     0.01     63.57     0.38       0.28     0.13         0.4       3.3       5.5      10x5x5m     17.0
QEPOR       19,367     0.01      3.52     0.06       0.05     0.04        0.04       1.0       1.5 24.6x21.3x2m      2.1
Leprechaun
deposit
QTPV        21,217     0.01    375.78     1.75       1.39     0.83         2.1       2.6      52.0      10x5x5m    115.0
MD           1,809     0.01     82.43     0.74       0.54     0.25         0.8       3.1      11.0     20x10x5m     20.0
SED            560     0.01     27.64     1.02       0.67     0.36         0.9       2.4      10.0     10x20x2m     13.0
TRJ          5,635     0.01     43.70     0.09       0.07     0.04         0.0       1.2       1.5     15x10x2m      1.5

Prefeasibility study mine plan

The Valentine gold project PFS is being conducted by Ausenco Engineering Canada Inc. as lead consultant. Moose Mountain Technical Services is acting as mining consultant, Golder Associates Ltd. as tailings consultant, Stantec Consulting Ltd. as environmental consultant and Terrane Geoscience Inc. as geotechnical consultant.

As reported on Dec. 16, 2019, trade-off studies have now been completed to determine the optimum scope and development plan for the project. The October, 2018, preliminary economic assessment outlined a mine plan with a combined three-million-tonne-per-year mill and three-million-tonne-year heap leach pad for mineral processing. The PFS will present a simpler mine plan based on a single stream of ore feeding a conventional mill with no heap leach. The updated mineral resource estimate makes available a total inventory of in-pit M&I mineral resources for use in this study of up to 2.58 million ounces (30.6 million tonnes at 2.62 g/t Au) of high-grade resources and 340,000 ounces (22.9 million tonnes at 0.47 g/t Au) of low-grade resources. It is expected that only in-pit mineral resources in the Leprechaun and Marathon deposits will be utilized for mine planning at this time, within pit shells optimized for maximum rate of return.

The PFS remains on schedule for delivery in the second quarter of 2020.

NI 43-101 technical report

The updated mineral resource reported today has been prepared for use in the Valentine gold project PFS, currently under preparation. Marathon expects to file an updated technical report prepared in accordance with the requirements of National Instrument 43-101 -- Standards of Disclosure for Mineral Projects -- for the Valentine gold project at the conclusion of the PFS, including a description of the updated mineral resource estimate.

Qualified person

Disclosure of a scientific or technical nature in this news release was prepared under the supervision of Sherry Dunsworth, MSc, PGeo (Newfoundland), senior vice-president of exploration. Ms. Dunsworth has verified the data disclosed including sampling, analytical and test data underlying the information contained in this news release. This included a site inspection, drill database verification and independent analytical testwork. The qualified person responsible for the preparation of the January, 2020, Valentine gold project mineral resource estimate is Robert Farmer, PEng, of John T Boyd Company. Mr. Farmer is considered to be independent of Marathon for purposes of NI 43-101.

Acknowledgments

Marathon acknowledges the financial support of the Junior Exploration Assistance Program, Department of Natural Resources, government of Newfoundland and Labrador.

Note on historical disclosure of mineral resources at the Valentine gold project:

  • Technical report dated December, 2010: measured mineral resources of 2.1 million tonnes at 2.77 g/t Au for 190,000 ounces Au; indicated mineral resources of 1.2 million tonnes at 2.36 g/t Au for 90,000 ounces Au; inferred mineral resources of 4.4 million tonnes at 2.01 g/t Au for 280,000 ounces Au;
  • Technical report dated October, 2012: measured mineral resources of 3.0 million tonnes at 2.30 g/t Au for 220,000 ounces Au; indicated mineral resources of 6.5 million tonnes at 2.19 g/t Au for 460,000 ounces Au; inferred mineral resources of 2.0 million tonnes at 2.30 g/t Au for 140,000 ounces Au;
  • Technical report dated June, 2013, Valentine Hill East: indicated mineral resources of 800,000 tonnes at 1.67 g/t Au for 40,000 ounces Au; inferred mineral resources of 200,000 tonnes at 1.47 g/t Au for 90,000 ounces Au;
  • Technical report dated August, 2013, Leprechaun deposit: measured mineral resources of 3.6 million tonnes at 2.26 g/t Au for 260,000 ounces Au; indicated mineral resources of 7.0 million tonnes at 2.29 g/t Au for 510,000 ounces Au; inferred mineral resources of 1.56 million tonnes at 2.79 g/t Au for 140,000 ounces Au;
  • Valentine Hill East: indicated mineral resources of 800,000 tonnes at 1.67 g/t Au for 40,000 ounces Au; inferred mineral resources of 200,000 tonnes at 1.47 g/t Au for 90,000 ounces Au;
  • Technical report dated April, 2015: measured mineral resources of 3.6 million tonnes at 2.26 g/t Au for 260,000 ounces Au; indicated mineral resources of 11.4 million tonnes at 2.18 g/t Au for 80,000 ounces Au; inferred mineral resources of 2.2 million tonnes at 2.85 g/t Au for 200,000 ounces Au;
  • Technical report dated February, 2017: measured mineral resources of 5.3 million tonnes at 1.97 g/t Au for 340,000 ounces; indicated mineral resources of 17.3 million tonnes at 1.90 g/t Au for 1.05 million ounces Au; inferred mineral resources of 10.7 million tonnes at 2.24 g/t Au for 770,000 ounces Au;
  • Technical report dated November, 2017: measured mineral resources of 13.5 million tonnes at 2.14 g/t Au for 930,000 ounces Au; indicated mineral resources of 17.0 million tonnes at 1.68 g/t Au for 920,000 ounces Au; inferred mineral resources of 19.0 million tonnes at 1.65 g/t Au for 1.01 million ounces Au;
  • Technical report dated May, 2018: measured mineral resources of 13.9 million tonnes at 2.25 g/t Au for 1.00 million ounces Au; indicated mineral resources of 19.5 million tonnes at 1.81 g/t Au for 1.13 million ounces Au; inferred mineral resources of 17.3 million tonnes at 1.99 g/t Au for 1.10 million ounces Au;
  • Technical report dated October, 2018: measured mineral resources of 16.6 million tonnes at 2.18 g/t Au for 1.17 million ounces Au; indicated mineral resources of 28.5 million tonnes at 1.66 g/t Au for 1.53 million ounces Au; inferred mineral resources of 26.9 million tonnes at 1.77 g/t Au for 1.53 million ounces Au.

About Marathon Gold Corp.

Marathon is a Toronto-based gold company rapidly advancing its 100-per-cent-owned Valentine gold project located in central Newfoundland, one of the top mining jurisdictions in the world. The Valentine gold project comprises a series of mineralized deposits along a 20-kilometre system of gold-bearing quartz-tourmaline-pyrite veins. The project is accessible by year-round road and is in close proximity to the provincial electrical grid. To date, four gold deposits at Valentine have been delineated, including the large Leprechaun and Marathon deposits.

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