In a July 26 research note, analyst Eric Zaunscherb reported that Marathon Gold Corp. (MOZ:TSX; MGDPF:OTC.MKTS ) released high-grade drill results from its Marathon deposit at its flagship Valentine Lake gold project in Newfoundland. The results "demonstrate the potential of an underground scenario" and "support a decrease in strip ratio at the Marathon pit," he wrote.
The company has been infill drilling to potentially decrease the Marathon pit's 5:1 open-pit strip ratio, noted Zaunscherb. Marathon is one of three deposits that comprise the open pits delineated in the recent preliminary economic assessment (PEA). Another aim of drilling is to convert Inferred ounces into Measured and Indicated ones.
Marathon Gold designed hole MA-18-295 to intersect the margin of the main Marathon deposit and help define mineralization in a corridor along the deposit's footwall. The hole demonstrated "continuity of high-grade, en echelon-stacked, quartz-tourmaline-pyrite veins with visible gold," Zaunscherb relayed.
The report summarized notable findings. Result highlights from the hole include 7.97 grams per ton (7.97 g/ton) over 56 meters (56m; true width) including 57.74 g/ton over 5m and 48.12 g/ton over 2m at depths of about 450–490m.
Hole MA-18-297 exhibited that mineralization extended to the footwall from the main area of mineralization. Highlights were similar to those of Hole MA-18-295: 4.97g/ton over 3m and 3.6 g/ton over 3m, at depths of about 470–510m.
Zaunscherb indicated that "highlights from both holes were intercepted approximately 150m below the bottom of the current PEA pit shell," suggesting the potential for underground mining.
Marathon Gold is continuing its infill drilling at high-grade targets and doing metallurgical work for the heap-leach and milling options. Results from either could be a near-term catalyst, along with expected prospecting and trenching findings from the area southwest of the Victory deposit, near the Sprite deposit.
Canaccord Genuity has a Speculative Buy rating and a CA$1.60 per share price target on Marathon Gold, whose stock is currently trading at a significant, "unwarranted" discount to its covered peers, Zaunscherb wrote, at around CA$0.85 per share.[NLINSERT]
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Disclosures from Canaccord Genuity, Marathon Gold Corp., Flash Update, July 26, 2018
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Required Company-Specific Disclosures (as of date of this publication):
Marathon Gold Corporation currently is, or in the past 12 months was, a client of Canaccord Genuity or its affiliated companies. During this period, Canaccord Genuity or its affiliated companies provided investment banking services to Marathon Gold Corporation.
In the past 12 months, Canaccord Genuity or its affiliated companies have received compensation for Investment Banking services from Marathon Gold Corporation.
In the past 12 months, Canaccord Genuity or any of its affiliated companies have been lead manager, co-lead manager or co-manager of a public offering of securities of Marathon Gold Corporation or any publicly disclosed offer of securities of Marathon Gold Corporation or in any related derivatives.
Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking services from Marathon Gold Corporation in the next three months.
An analyst has visited the material operations of Marathon Gold Corporation. Partial payment was received for the related travel costs.
Disclosures are available here.