Mr. Jim Kirke reports
MARATHON GOLD ANNOUNCES Q3 2017 FINANCIAL RESULTS
Marathon Gold Corp. has released its financial results for the period ended Sept. 30, 2017.
At Sept. 30, 2017, Marathon had $17.4-million in cash and cash equivalents compared with $8.5-million at Dec. 31, 2016.
Marathon completed the following activities in the period ended Sept. 30, 2017, and subsequently to the date of this press release:
- Buyback of net smelter returns royalty: On Nov. 14, 2017, Marathon bought back a net smelter returns royalty on the Valentine Lake property, which consists of a 3-per-cent royalty on gold production and a 2-per-cent royalty on base metals production and which covers a land package which includes all of the current resources associated with the Valentine Lake project, for cash consideration of $8.7-million (U.S.).
- Financing: On May 25, 2017, Marathon closed a bought-deal prospectus financing underwritten by a syndicate of underwriters led by RBC Capital Markets. Marathon issued a total of 6.9 million common shares at a price of $1.03 per common share and 9.2 million flow-through shares at a price of $1.25 per flow-through share, for aggregate gross proceeds of $18.6-million.
- These proceeds have financed and are currently financing an aggressive continuing infill and extension drilling program at the Marathon and Leprechaun deposits and detailed prospecting focused on the northeastern part of the Valentine Lake property where there are indications of gold mineralization but limited historical exploration activity. Additional work will include advanced environmental studies which will be used in economic studies on the project and for permitting and a preliminary economic assessment (PEA), which is under way.
In addition, Marathon obtained proceeds of $2.8-million from the exercise of warrants and stock options during the nine-month period ended Sept. 30, 2017, and subsequently to the date of this press release.
Mineral resource estimate: In February, 2017, Marathon released an updated mineral resource estimate and the supporting National Instrument 43-101 technical report for the Valentine Lake property, incorporating the results of drilling on the property since the completion of the previous resource estimate in 2015 through February, 2017. With completion of the updated resource, the Valentine Lake property hosted a total measured and indicated resource of 1.4 million ounces of gold at a grade of 1.91 grams per tonne and an additional inferred resource of 800,000 ounces at a grade of 2.24 g/t. Compared with the previous global resource estimate, the global measured and indicated resource increased by 400,000 ounces or 31 per cent, while the global inferred resource increased by 600,000 ounces or 284 per cent.
In the third quarter of 2017, Marathon began work on a revised mineral resource estimate for the entire Valentine Lake property, which is under way and nearing completion. In addition to incorporating the results of 2017 drilling at the Marathon and Leprechaun deposits, the resource estimate will reflect a remodeling of the Leprechaun deposit undertaken to better reflect the revised geological model of this deposit. Management had originally expected to complete the updated resource estimate in October, 2017, but the Marathon deposit resource update model identified a few areas that warranted additional drilling to better define the grade and resource content. Drilling in these areas is close to complete, and management expects that the resource, incorporating these additional holes, will be completed by the end of November, 2017. This resource estimate will serve as the foundation for the PEA.
Drilling: Drill programs, which ran from January to March and June to December, 2016, January to March, 2017, and May, 2017, to date, focused on expanding and upgrading the Leprechaun and Marathon deposit resources, with three drills currently operating at the Marathon deposit. Since May 22, 2017, Marathon has completed a total of 91 holes covering 43,250 metres out of a planned program of 60,000 metres of infill and extension drilling at Leprechaun and Marathon, of which a total of 63 holes covering 29,074 metres have been assayed and reported.
The results of operations for the three- and nine-month periods ended Sept. 30, 2017, and 2016 are summarized in the associated table and reflect increases in staff compensation costs and director fees following an independent benchmarking review of Marathon's compensation practices; a performance bonus awarded to management and employees driven by the sharp increase in mineral resources at the Valentine Lake gold camp and related to performance in 2015 and 2016; stock options issued in the second and third quarter of 2017; and professional fees associated with changes to Marathon's shareholder rights plan, stock option plan, and corporate governance practices and policies.
Three months ended Sept. 30 Nine months ended Sept. 30
2017 2016 2017 2016
Exploration expenses $22,075 $21,573 $108,689 $21,573
General and administrative expenses 509,906 279,357 2,093,174 764,540
Other finance expense - - 111,589 6,741
Interest (income) (41,605) (1,532) (66,659) (4,605)
Foreign exchange (gain) (812) (3,814) 4,413 21,010
Loss before tax 489,564 295,584 2,251,206 809,259
Income tax (recovery) (222,347) - (2,096,487) (415,151)
Loss for the period attributable
to Marathon Gold shareholders 267,217 295,584 154,719 394,108
This press release should be read in conjunction with Marathon's unaudited condensed interim consolidated financial statements for the periods ended Sept. 30, 2017, and 2016 and the related management's discussion and analysis, both of which are available on SEDAR.
About Marathon Gold Corp.
Marathon is a gold exploration company rapidly advancing its 100-per-cent-owned Valentine Lake gold camp located in Newfoundland, one of the top mining jurisdictions in the world. The Valentine Lake gold camp currently hosts four near-surface, mainly pit-shell-constrained gold resources totalling 1,388,200 ounces gold at 1.91 g/t (measured and indicated) and 766,500 ounces gold at 2.24 g/t (inferred) (February, 2017).
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