Generation Mining (GENM.TO) is still working through the entire permitting process but the company’s management team isn’t sitting on its hands. It has engaged a construction-focused engineering firm to work on potential design optimizations for the Marathon Palladium-Copper project in Ontario. This could hopefully help the company to reduce the initial capex and the operating expenses, as the optimization study will focus on the efficiency of the designs.

Additionally, Generation Mining is also evaluation the possibility to change up the pit sequencing which could hopefully boost the cash flows earlier on in the mine life (which should be NPV and IRR accretive) by maximizing the grade and deferring stripping requirements to much later in the mine life.

The Marathon project is obviously suffering from the lower palladium price (which is currently trading around $878 per ounce) and although the higher copper price is a nice advantage, it does not fully compensate for the lower palladium price versus the palladium price that was used in the most recent feasibility study.

Disclosure: The author has a long position in Generation Mining. Generation Mining was a sponsor of the website within the past 12 months. Please read the disclaimer.

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