TORONTO, Nov. 27, 2013 /CNW/ - Marathon Gold Corporation ("Marathon" or the "Company") (TSX: MOZ) announced today that Juniper Resources ("Juniper") has exercised its right to mine the Skookum Lode at the Golden Chest Mine in north-eastern Idaho, USA under a lease agreement with Golden Chest LLC ("GCLLC"), the owner of the property. GCLLC is owned by Marathon and New Jersey Mining Company ("NJMC"), who hold interests of 52.22% and 47.78% respectively.
Under the terms of the lease, Juniper will mine the Skookum Lode over a period of 36 months. During this period, Juniper will pay quarterly instalments of US $125,000 on a promissory note due to the original vendor of the Golden Chest property, with the first such instalment falling due on December 15, 2013, and will pay Marathon and NJMC an advance royalty payment of US $200,000 on or before November 29, 2013 and quarterly 2% net smelter returns royalty payments, with the allocation of each payment being based on the interests of Marathon and NJMC in GCLLC at the time of each payment.
- The deal is non-dilutive to existing shareholders
- It monetizes a development asset which would require additional exploration and development spending to be brought into production, at a time when the equity markets are particularly weak
- The agreement called for an advanced royalty payment of US $200,000 to be divided between Marathon Gold (52.2% ownership) and NJMC (47.8% ownership).
- The payment of installments against the Beasley note by Juniper removes a significant holding cost from the property over a period of 3 years and could result in Juniper paying as much as US$1,500,00 over the life of the agreement
- The terms of the option allow Marathon and NJMC to continue exploration activity in other parts of the property
"The exercise of this lease will provide ongoing cash flow to Marathon over the length of the lease and it will free up money that would otherwise be required to fund annual payments to the vendor of the Golden Chest mine. This savings and the additional royalty funds will allow us to focus developing additional resources on the Valentine Lake Property and move it towards a PEA," commented Phillip Walford, President and CEO of Marathon.
Phillip Walford P.Geo, President and CEO of Marathon, is Marathon's Qualified Person. Mr. Walford has reviewed the contents for accuracy and has approved this new release on behalf of Marathon.
About the Golden Chest Mine
The Golden Chest Mine is located two miles east of Murray, Idaho within the gold belt of the Coeur d'Alene Mining District. The mine has over 3,900 m of underground workings and has the permits necessary to drill and operate on the deposit. The property includes 24 patented mining claims and 70 unpatented mining claims covering 515 hectares. The patented claims that cover the mine workings have mineral and surface rights enabling the Joint-Venture to work easily on the Mine property.
The Golden Chest Mine has an existing NI 43-101 compliant open-pit and underground resource estimate. The open-pit resource includes a measured resource of 1,317,000 tonnes grading 1.47 g/t Au, an indicated resource of 3,054,000 tonnes grading 1.64 g/t Au, and an additional inferred resource of 2,369,000 tonnes grading 1.33 g/t Au, all estimated using a 0.3 g/t cutoff. The underground resource includes an indicated resource of 196,600 tonnes grading 3.11 g/t Au and an additional inferred resource of 738,300 tonnes grading 3.48 g/t Au, all estimated using a 2.0 g/t cutoff.
About Marathon Gold Corporation
Marathon is a Toronto based gold resource development company focused on the Valentine Lake property in central Newfoundland. Marathon's mission is to rapidly advance the Valentine Lake project towards advanced exploration and pre-development stages. For more information visit: www.marathon-gold.com.
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Except for statements of historical fact relating to Marathon Gold Corporation, certain information contained herein constitutes "forward-looking statements". Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipates", "plans", "believes", "considers", "intends", "targets", or negative versions thereof and other similar expressions, or future or conditional verbs such as "may", "will", "should", "would" and "could". We provide forward-looking statements for the purpose of conveying information about our current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. These risks and uncertainties include but are not limited to those identified and reported in Marathon Gold Corporation's public filings, which may be accessed at www.sedar.com. Other than as specifically required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results otherwise.
SOURCE: Marathon Gold Corporation
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