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Geology
The Valentine Lake Gold Project is located 55 km south of the town of Buchans, in Central Newfoundland. The Valentine Lake Property is very large - 25 km in length, host to the Leprechaun Pond Gold Deposit as well as numerous gold showing over a strike length of 14 km. The Leprechaun Pond gold resource is primarily associated with quartz-tourmaline veins hosted in sheared granite. Other lithologies (metasediments, volcanics, etc) known to host gold mineralization have not undergone detailed exploration to date. The Property is bounded by major structures which has developed a competency difference between lithologies. This is similar to other gold mining districts where differences in competency act as a channel for phases of mineralization. The pervasive quartz-tourmaline association with gold mineralization seen throughout Valentine Lake is similar to other granite hosted gold deposits.
Option and Joint Venture Agreement
The Valentine Lake Gold Project is an Option and Joint Venture Agreement with Mountain Lake Resources. Pursuant to the OJVA, Marathon has been granted an option to earn a 50% interest in the Valentine Lake Gold Property, in Central Newfoundland. Currently Richmont owns 70% of the Property and MOA owns 30%. MOA has an option to purchase back all of Richmont’s interest for $3,000,000 over the next three years. Marathon can earn the 50% interest through funding MOA’s purchase of Richmont’s interest in the Valentine Lake Property and committing to a total of $3,000,000 in exploration and development expenditures over the next three years. Marathon has agreed to spend at least $500,000 in exploration and development by May 1, 2010 and escrow $100,000 upon signing the OJVA to fund a payment by MOA to Richmont. Marathon must spend an additional $500,000 on exploration and development by December 31, 2010 and escrow an additional $250,000 by January 4, 2011 for a payment to Richmont.
Leprechaun Pond Resource
Valentine Lake hosts the Leprechaun Pond Gold Deposit, which has an NI 43-101 compliant underground inferred mineral resource of 1,314,780 tonnes grading 10.50 grams per tonne (g/t) gold using a 5 g/t gold minimum cut-off and a 3 metre minimum width for a total estimated mineral resource of 443,000 ounces of gold. Cutting individual assays to 58 g/t gold, the average grade is 8.51 g/t gold, for a total estimated mineral resource of 359,000 ounces of gold at the cut grade. The Deposit is open at depth and along strike. The resource estimate of the Valentine Lake Property presented in the NI 43-101 Technical Report dated January 12, 2005 was performed by Larry Pilgrim, P. Geo. a Qualified Person (see: NI 43-101 Valentine Lake Technical Report).
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