Interview with Phillip Walford, President, CEO and Director of Marathon Gold (TSX: MOZ): Marathon Gold Deposit in Newfoundland Obtaining Excellent Metallurgical Results
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 7/20/2016
Marathon Gold (TSX: MOZ) is a Canadian gold resource development company focused on Marathon Gold
Deposit at the company's wholly owned Valentine Lake Gold Camp located in central west Newfoundland. We
learned from Phillip Walford, President, CEO and Director of Marathon Gold, that the company is
simultaneously advancing two programs: One is a metallurgical program and the second is the drilling to
expand the resources at the Valentine Lake. We learned that the first phase of metallurgical testing is
still in progress but recoveries at Marathon already are looking to be in the 90th percentile which is very
good. The second phase of the metallurgical program is testing for heap leach potential and the recoveries
here look to be significant, and will have a significant impact on the economics for the PEA that the
company plans to start the fourth quarter of this year. Mr. Walford is pretty excited about the summer
program both the metallurgical work and the exploration. The Marathon Gold stock more than doubled since
the PDAC.
Dr. Allen Alper: This is Dr. Allen Alper Editor in Chief of Metals News interviewing Phillip Walford
President and CEO and Director of Marathon Gold. Well I see a lot of exciting things are going on with
Marathon Gold. Could you tell me a little bit about your properties in Newfoundland and what's happening in
your Gold Camp?
Mr. Phillip Walford: I'd love to. We have two things going on that are proving to be very
exciting. One is a metallurgical program that is looking really good. The second is the drilling we're
doing to expand the resources at the Valentine Lake Gold Camp. The metallurgical program is in two phases.
One is looking at the milling flotation cyanidation of a flotation concentrate for the Marathon ores. To
date we've only done it on Leprechaun because Leprechaun's been so much larger. We're finding that there's
a little difference between the Marathon ore and the Leprechaun ore, but we're seeing very similar
recoveries and it's looking really good.
The recoveries at Leprechaun were from 92% to 96% total recovery. It's still a little too early to see what
recovery rate we'll have at Marathon, but it's certainly going to be in the 90s which is very good. The
second phase of the metallurgical program, which has been going on now for over 90 days, is column testing
for heap leach potential. Heap leach has two advantages over milling. The capital costs are much lower and
the operating costs are less than half of a milling scenario. There's a distinct economic advantage there.
Unfortunately, the disadvantage usually is that your recoveries are less. There's a trade-off
between recoveries versus better operational cost and capital cost. That's what's happening so far. Our
program was designed for a 90 day test and we're now beyond 90 days and possibly going as far as 120 days.
The length of time means that we are leaching gold from those columns. We’re still leaching gold from those
columns and recoveries are still going up. That's pretty exciting! It's too early to say what our ultimate
recoveries will be but it's significant.
It will have a significant impact on the economics for the PEA that we would like to do starting the fourth
quarter of this year. Likewise the drilling that we're doing will impact the PEA as well, in that we are
now expanding the resources at the Marathon deposit. We have some other targets too. What we're finding is
that the mineralization at Marathon goes deep just as it does at Leprechaun. We're looking at deposits that
do have some legs to them beyond an open pit. Marathon so far has had some good underground grades. It
doesn't seem to be quite as rich as Leprechaun, but it seems to be much wider - really up to about 50
meters through thickness and width. It's a little different beast, but we're learning a lot about the
mineralization. Our successful metallurgical program and the successful resource development programs that
we're in right now are helping to drive the stock up. We've more than doubled since I talked to you at the
PDAC. I realize of course that the price for gold has also increased significantly, but we are starting to
see more awareness now of what we really have.
I'm pretty excited about the summer program both the metallurgical work and the exploration. It's
been a very exciting time and well worth the perseverance we've had to exhibit to get to this point through
the last few years. It's been really difficult for all gold companies.
Dr. Allen Alper: I'm very impressed with what you are doing and your projects. That really sounds
great! Could you tell me a bit more about your resources?
Mr. Phillip Walford: We have about a million ounces in measured and indicated resources and just
a little under 300,000 ounces in inferred. There are both open pit and underground resources. However the
open pit resources are our prime target initially. We also have an average grade close to two grams which
is fairly high. We're dealing with a pretty reasonably grade ... a nice grade for open pit mining. Our
target is to expand beyond the 1.3 million ounces that we have right now in total measured, indicated and
inferred and get to maybe 1.5 million, 1.6 million. We really don't know yet because we just started
drilling. Then we’ll go ahead and do a new resource and start getting into the planning aspects of the PEA.
Dr. Allen Alper: You're doing great! You're a survivor through a very difficult time and now you're
moving forward very well. I'm really, really impressed. Could you tell me a little bit more about yourself
and your team?
Mr. Phillip Walford: Sure. I'm a P. Geo. I've been a practicing geologist since 1969, getting
a little long in the tooth. I started off initially as a mine geologist. My career has mostly been in the
mining aspects of geology. I’ve done on-site exploration, ore reserves that sort of thing. I’ve worked on
technical problems, liaising with mining people, so I picked up a lot of mining engineering and milling and
heap leach through doing the mine work. I was the Chief Geologist for Lac Minerals.
Certainly in my position as the Chief Geologist for Lac Minerals and Vice President too, I got a
very good worldwide gold experience in different environments and different ways of mining and extracting
the gold. From Lac I went into a junior company. I helped start the San Francisco mine in Mexico when I was
a VP-Exploration for GeoMaque. We bought the project from Penoles. There was about a quarter of a million
ounces or so there and I expanded that to over a million ounces before things got bad in 2003 and we had to
shut the mine down. That was a heap leach operation and it's very similar actually to what we're dealing
with here. This is why I've tested this material for heap leach.
One of the ores at the San Francisco mine and the best grade was granite that had quartz pyrite
tourmaline veins in it and looks identical to what we're dealing with at Marathon. That's why we tried
leaching and this material is not oxidized in both cases. The San Francisco mineralization was only
oxidized down a few meters and that was it. The mineralization at the Valentine Lake Project is leaching
just like, if not better than, the San Francisco material. The experiences that I've had have helped me
recognize situations both geological and operational in tackling deposits or in developing deposits and
moving them forward.
Dr. Allen Alper: You have a great background. I'm very impressed with you and frankly with your
background and also with your personality. You seem like a great guy.
Mr. Phillip Walford: Thank you. There are others on the team that are very important. Sherry
Dunsworth, the VP of Exploration, has worked with me for over 10 years. She has her masters in structural
geology. She lives on the island of Newfoundland and brought the Valentine Lake Project to my attention.
It's not just geology but she's also superb at managing the camp, managing the people, foreseeing problems
and solving them. She also is well connected to the Newfoundland government and to people in Newfoundland.
That's served us very, very well over the last six years or so that we've been active in Newfoundland. A
lot of the credit for the success of the project there goes to her too.
Dr. Allen Alper: That sounds great. Could you also tell me a little bit about your finances and your
capital structure?
Mr. Phillip Walford: We have a little over 100 million in shares out right now. It's a lot more
than I ever thought it would be. We've been raising money to keep the project going just at a minimal
level. But even so with low prices the dilution catches up to you a bit. We don't have any debt. We've
never ever had any problems in raising money. That's because of the quality of the project and because the
people that are behind us are long term holders. They've assembled the usual just under 10%, and in one
case over 10% of the shares.
They've always participated in finances and I'm one of them. I'm not at 10% by any stretch of
imagination but I'm one of the people that continue to participate in all the finances and so do most of
our larger shareholders. Some of the funds are private family funds as well as other individuals and
institutions. We just had great support and you can't move ahead in tough times without that kind of
support.
Dr. Allen Alper: That's great. It's good to have that support. It's been a tough four years. Now
things seem to be coming up. Those who supported you in hard times will be getting the rewards in good
times. It looks like things are even going to get better.
Mr. Phillip Walford: I agree with you. I think things are going to get better. I think we've had
quite a move in our share price over the last two months. Part of that has been because of gold price but a
lot of it is because analysts and others, investment bankers are realizing what we have. They're realizing
too that there aren't a lot of good projects in North America with the kinds of grades that we have in
excellent mining jurisdictions, in a good place to go into production. I think if the gold price continues
the way it does our time is approaching.
Dr. Allen Alper: That sounds great. I'm very happy for you and your team that your hard work is
paying off. Could you tell me the primary reasons for high-net-worth investors to invest in your company?
Mr. Phillip Walford: Well in some cases it goes back almost 10 years. The company started as
Marathon PGM and we had a property in Marathon, Ontario, which we sold to Stillwater. Some of these
shareholders sold their Stillwater shares when the purchase took place and they bought Marathon shares.
They bought more Marathon Gold shares. They are long termers and they said, "Okay well look you've done it
before we think you can do it again." They like the project that we're involved with and they have faith in
the company. That's really what's carried us through.
I don't promise things that I know I can't do. We've never done that. We're technically able and
we do what we say we're going to do. We don't make promises we cannot keep.
Dr. Allen Alper: That sounds great. It is very good to have a reputation for doing the right things
and to be able to be trusted. That's great! Is there anything else you'd like to add?
Mr. Phillip Walford: We've had a struggle over the last four years as all juniors have and
certainly we've enjoyed a bit of support. The project now is at a really exciting stage because we
understand the geology, we understand what's going on. We still have more to learn, but it's starting to
come together and it's coming together at the right time. It's coming together when the market is turning
on gold and I think we're going to see a rather interesting time over the next six months or so.
Dr. Allen Alper: That’s excellent!
http://www.marathon-gold.com/
Marathon Gold Corporation
357 Bay Street, Suite 800
Toronto, Ontario
Canada M5H 2T7
Office: +1 (416) 987-2366
Christopher Haldane
Investor Relations Manager
Office: +1 (416) 987-0714
Fax: +1 (416) 861-1925
chaldane@marathon-gold.com
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