Stillwater Mining and Marathon PGM Corp. have entered into a definitive agreement whereby Stillwater will acquire all of Marathon’s outstanding shares. Marathon’s primary asset is its PGM-copper project located near the north shore of Lake Superior about 10 km north of the town of Marathon, Ontario. Stillwater plans to develop an open-pit mine and concentrator at the project, and will produce 200,000 oz/y of platinum and palladium, with first production to begin in 2014. Current measured and indicated resources would support that production rate for up to 12 years.

The transaction, announced September 7, calls for payment by Stillwater based on a 50:50 split of cash and Stillwater shares, valuing Marathon at about $118 million at the time of the announcement. Two weeks later, in a presentation at the Denver Gold Forum, Stillwater Chairman and CEO Frank McAllister reported that due to an increase in Stillwater’s share price, the value of the transaction had increased to $133 million.

Stillwater expects to finalize a bankable feasibility study of the Marathon project within the next few months and anticipates project development will take about three years.

Economic models of the Marathon project suggest that, at current prices, by-product credits generated from copper sales could be sufficient to offset the cost of PGM mining, McAllister said. Potential to extend the life of the project exists to the west and at depth at Marathon and at the nearby Geordie Lake project, but this will need to be confirmed over time.

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