Generation Mining - Nearing Construction at Marathon Palladium-Copper Project in Canada

• Generation Mining aims to start construction on its next critical metal project in North America by the second quarter of 2024, pending permit approvals and project financing.
• They have secured funding worth CAD$540 million. They are also exploring funding from the Canadian government's initiative for critical metal projects.
• While copper is a significant revenue generator, Generation Mining is also focused on the Palladium market. The demand for Palladium is expected to remain due to its use in catalytic converters, pharmaceuticals, and technology processes.

About Generation Mining

Generation Mining is focused on developing the Marathon Palladium-Copper Project located in Northwestern Ontario, Canada. This strategic mineral asset contains one of the largest undeveloped palladium and copper resources in North America.

A March 2023 Feasibility Study outlines a 13-year mine life producing an average of 166,000 ounces per year of palladium and 41 million pounds per year of copper. Over the life-of-mine, Marathon is projected to produce over 2.1 million ounces of palladium, 517 million pounds of copper, 485,000 ounces of platinum, 158,000 ounces of gold, and 3.16 million ounces of silver in payable metals.

With an estimated after-tax NPV of C$1.16 billion using a 6% discount rate, Marathon represents one of the most valuable palladium-copper development projects in Canada. Generation Mining owns a 100% interest in the large 22,000 hectare property, providing complete exposure to the upside potential from advancing Marathon towards production.

Generation Mining is aiming to start construction on its Marathon palladium-copper project in Q2 2024. The company has made significant progress in de-risking and financing the project over the past year. With palladium prices down from recent highs but fundamentals still strong, Generation Mining represents an attractive investment opportunity.

Interview with President & CEO, Jamie Levy

The Marathon Project: Large Scale, Low Cost Palladium and Copper Production

The Marathon project is located near the town of Marathon in northwestern Ontario, approximately 10km from the Trans-Canada Highway. The project contains one of North America's largest undeveloped platinum group metal mineral resources.

According to the feasibility study, the Marathon project has total proven and probable reserves of 7.1 million ounces of palladium, 1.1 million ounces of platinum, 796 million pounds of copper and 219,000 ounces of gold. The project is expected to produce 166,000 ounces of palladium per year and 41 million pounds of copper per year. Over the life-of-mine, Marathon is projected to produce over 2.1 million ounces of palladium, 517 million pounds of copper, 485,000 ounces of platinum, 158,000 ounces of gold, and 3.16 million ounces of silver in payable metals.

With an initial capital expenditure of $665 million, Marathon is projected to have an all-in sustaining cost of just $814 per ounce of palladium equivalent, allowing it to generate strong margins even during periods of lower palladium prices. At current metal prices, the after-tax net present value (NPV) is estimated to be $1.07 billion with an internal rate of return (IRR) of 30%.

Nearing Final Approvals and Project Financing

Generation Mining has made significant progress towards construction readiness over the past year. It received federal and provincial environmental approvals in 2021. It also signed an early works agreement with the Biigtigong First Nation.

The company has arranged $640 million in project financing, including:

• A $240 million palladium stream with Wheaton Precious Metals
• A $400 million debt facility led by Société Générale and Export Development Canada

It is also in discussions regarding possible funding from Canadian government programs targeting critical minerals projects.

With these financings, Generation Mining has reduced its funding gap. It is looking to finalize remaining permits and additional funding arrangements by the end of 2023. The aim is to start early construction works over the 2023/2024 winter season.

An Experienced Team to Build and Operate

Generation Mining has assembled an experienced team to develop and operate the Marathon project, led by CEO Jamie Levy and COO Drew Anwyll.

Anwyll previously oversaw the successful development of Detour Lake, one of Canada’s largest gold mines. Additional team members from Detour have joined Generation Mining.

The company has shortlisted engineering firms with mine development expertise to act as lead engineer and EPCM contractor. These include Ausenco and G-Mining Services.

De-Risking Through Drilling and Engineering

In 2022, Generation Mining completed 20,000 meters of geotechnical drilling to provide detailed subsurface data for pit, plant and infrastructure design. This will help avoid excessive overburden during construction.

The company also advanced detailed engineering to over 40% completion prior to engaging an EPCM partner. Completing detailed engineering to 70-80% will further de-risk execution.

Long Term Palladium Fundamentals Remain Strong

The palladium price has fallen from over $3,000/oz in early 2022 to around $1,300/oz currently. However, Generation Mining believes the long term outlook remains strong.

Palladium is primarily used in catalytic converters for gasoline vehicles. While electric vehicle adoption is increasing, widespread gasoline vehicle replacement globally is still years away. Many jurisdictions are likely to see a transition period with hybrids and plug-in hybrids, which use even more palladium.

At the same time, palladium supply is constrained and heavily concentrated in Russia and South Africa. With Russia facing sanctions and South Africa facing power shortages, existing palladium mines are struggling to maintain production. There is limited potential for new mine supply.

With strong long term fundamentals but the price down from 2022 highs, now represents an attractive entry point for investors looking to gain exposure to palladium.

Key Upcoming Catalysts

With Marathon rapidly advancing towards construction, Generation Mining offers investors near-term re-rating potential. Upcoming catalysts include:

• Finalizing remaining permits (H1 2023)
• Securing additional financing arrangements (H1 2023)
• Announcing EPCM contract award (H1 2023)
• Starting early construction works (Q4 2023/Q1 2024)
• Making a construction decision (Q2 2024)

Trading at just a fraction of its feasibility study NPV, Generation Mining offers substantial upside for investors positioning ahead of these de-risking milestones. The company expects to create significant value over the next 18-24 months as it transitions from developer to producer.

The Investment Thesis

Leverage to Palladium Price Upside

Palladium prices have pulled back substantially from their highs above $3,000/oz in early 2022, creating an attractive entry point. With palladium fundamentals still strong, prices could rebound sharply as auto manufacturing recovers and supply constraints persist. Marathon provides leveraged exposure to a palladium price recovery.

Near-Term Construction Catalysts

As outlined above, Generation Mining is rapidly approaching key de-risking milestones over the next 6-12 months. Starting construction and making a final investment decision would significantly re-rate the stock, providing near-term appreciation potential.

Low-Cost Production

With all-in sustaining costs projected at just $814/oz palladium equivalent, Marathon will be profitable even in lower palladium price environments. The project's low costs and long mine life provide resilience.

Strong Financial Returns

At base case assumptions, Marathon generates a robust after-tax NPV of $1.07 billion and 30% IRR. The project is primed to deliver strong financial returns over its 13-year lifespan.

World-Class Mining Jurisdiction

Northern Ontario is one of the world's leading mining jurisdictions, with extensive infrastructure and a skilled local workforce. Investors can have confidence in the region's mining capabilities.

Overall, with its near-term catalysts, leverage to palladium, low costs, attractive economics and location in a top mining jurisdiction, Generation Mining offers an appealing risk/reward proposition for investors. The current valuation represents a discounted entry point ahead of construction.