Generation Mining Files Preliminary Economic Assessment for Marathon Palladium Project

TORONTO, Feb. 19, 2020 (GLOBE NEWSWIRE) -- Further to its press release dated January 6, 2020, Generation Mining Limited (CSE:GENM) (“Gen Mining” or the “Company”) is pleased to announce that it has filed on SEDAR its independent Preliminary Economic Assessment study (“PEA”) on the Marathon Palladium and Copper Project (the “Project”) located in Northern Ontario, the results of which were previously announced.

The PEA was prepared in accordance with National Instrument 43-101. Gen Mining acquired a 51% interest in the Project from Sibayne Stillwater in July, 2019, and has an option to earn up to an 80% interest by spending $10 million within four years (see Gen Mining’s news release dated July 11, 2019). The PEA provides a compelling base case assessment for the development of the Marathon Palladium Mineral Resource by open pit mining.

Highlights (all dollar amounts in Canadian dollars on a 100% project ownership basis unless otherwise indicated, USD metal prices used in the PEA are $1,300/oz Au, $16/oz Ag, $900/oz Pt, $1,275/oz Pd and $3/lb Cu).

• The Project would produce an average of 194,000 palladium-equivalent ounces per year over a 14-year mine life (including credits for copper, platinum, gold and silver). Constituent metals that make up 194,000 Palladium Equivalent ounces per year are 8,680 oz Au, 151,220 oz Ag, 24,400 oz Pt, 105,740 oz and 25.59 million lbs of Cu per year, respectively. Net Smelter Revenue or NSR is calculated in CAD using a CAD:USD exchange rate of 1.32 and based on an average two year trailing palladium price of USD 1,275 per ounce. Process plant recoveries are estimated at Au:73.2%, Ag:71.5%, Pt:74.5%, Pd=82.9% and for Cu:92% during the first 5 years falling to 90% thereafter.
• The Project generates an after-tax internal rate or return (IRR) of 30.0% and an after-tax net present value (NPV)of $871 million at a 5% discount rate at Nov 30/19 two-year trailing average metal prices (base case).
• The Project generates an after-tax net present value of $1,541 million and an internal rate of return of 45.8% at a 5% discount rate at recent spot metal prices (final LBMA London price fix for precious metals; final LME bid price for copper, Dec 31, 2019)
• The Project would generate base case after-tax cashflows of $520 million in years 1-3, resulting in a 2.5-year payback period.
• Actual palladium production will average 107,000 ounces annually over the mine life, at a Cash Cost Per Ounce of $US504 and an All-In Sustaining Cost (AISC) of $US586 per ounce, net of by-product credits.
• The PEA used only Measured and Indicated Mineral Resources in the Marathon Deposit in its calculations, and did not include the Geordie and Sally Deposits which are located on the same property (see News Release dated December 2, 2019). The Marathon Deposit has no outstanding royalties or financing streams registered against it.

For more information, please refer to the full PEA and Gen Mining’s press release dated January 6, 2020, both of with are available under Gen Mining’s profile on SEDAR.