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Marathon Gold (TSX: MOZ) has received further financial backing from existing shareholder and Canadian businessman Pierre Lassonde, who intends to participate in a private placement of the company’s common shares.

The private placement is priced at C$2.85 per share — a near 20% premium over the market price at press time — for gross proceeds of C$8.65 million.

Lassonde, known for his role in co-founding Franco-Nevada Corp. during the 1980s, will purchase C$7.5 million of those shares, while the remaining shares are subscribed for by Trinity Capital Partners and members of Marathon’s board and management team.

Funds raised from the financing will be used by Marathon to continue its exploration program at the Valentine gold project in central Newfoundland, which comprises a series of mineralized deposits along a 20 km trend.

An April 2020 pre-feasibility study outlined an open-pit mining and conventional milling operation over a 12-year mine life, with a 36% after-tax rate of return and an average gold production profile of 175,000 ounces per year for the first nine years. 

Marathon is currently aiming to complete the project’s environmental assessment process in the second half of 2021, break ground for construction in early 2022, and begin production in the second half of 2023.

Shares of Marathon Gold advanced 2.9% by noon EST Thursday. The Newfoundland-focused gold miner has a market capitalization of C$510.5 million.