Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe


Resource Update on Canadian Gold Property Due Early Q1/20
Research Report

Share on Stocktwits


The status and review of a few aspects of this project are provided in a Canaccord Genuity report.

In a Dec. 18 research note, Canaccord Genuity analyst Eric Zaunscherb provided updates on Marathon Gold Corp.'s (MOZ:TSX; MGDPF:OTCMKTS) Valentine gold project, including the imminent resource estimate, prefeasibility study and exploration.

Regarding the resource update for Valentine in central Newfoundland, it is expected in early 2020. Marathon will incorporate in it about 270 kilometers worth of new drilling and 190,000 assay results, "25% of which are from metallic screening, an indication of a significant proportion of high-grade gold mineralization," Zaunscherb noted.

The resource update is delayed from the original year-end 2019 target, which "reflects a combination of change in priority and increased geostatistical rigor," purported Zaunscherb. "Management's focus at Valentine has shifted from maximizing ounces to maximizing grade and margin while minimizing risk."

On schedule, however, is completion of the prefeasibility study, anticipated in mid-2020, Zaunscherb relayed. With it, Marathon aims to develop a project with maximal profitability and minimal risk.

As such, the study will outline a mining operation using a conventional mill and starting at a lower throughput rate but higher grades then ramping up. Cash flow would be the primarily funding source "to capture economies of scale on lower-grade ores," the analyst noted. With a smaller plant to start, initial capex will be lower and the environmental footprint smaller, thereby affording better economics.

With this low to high grade input scenario, Zaunscherb highlighted, exploration becomes more important as high-grade ore discovered in the future could replace the low-grade ore stockpiles slated for mining later in the plan. This would postpone a required expansion of the operation and boost its economics.

The Sprite zone at Valentine could provide such high-grade ore, noted Zaunscherb. "Although Sprite will not be included in the prefeasibility study, it may find itself in the future feasibility study after follow-up 2020 drilling," he added. Recent drill results from Sprite include 7.6 grams per ton (7.6 g/t) gold over 22 meters (22m), in hole VL-19-786; 10.43 g/t gold over 5m and 4.8 g/t over 6m in hole VL-19-776; and 7.25 g/t gold over 10m in hole VL-19-780.

Canaccord Genuity has a Speculative Buy rating and a CA$2.50 per share target price on Marathon Gold, whose stock is currently trading at around CA$1.65 per share. "We give the company highest consideration at the exploration and development stage based on Valentine's size, scalability and low risk location, which make it a strong candidate for potential mergers and acquisitions activities," Zaunscherb commented.


1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from Canaccord Genuity, Marathon Gold Corp., December 18, 2019

Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst's personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst's coverage universe and (ii) no part of the authoring analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research, and (iii) to the best of the authoring analyst's knowledge, she/he is not in receipt of material non-public information about the issuer

Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons of Canaccord Genuity Inc. and therefore may not be subject to the FINRA Rule 2241 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

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 comanager 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.

Disclosures are available here.

Want to read more about Gold investment ideas?
Get Our Streetwise Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe