CHICAGO - Platinum group metals producer Stillwater Mining Co. said the agreement for the $118 million purchase of Ontario's Marathon PGM Corp. announced Tuesday would let it boost platinum and palladium production by about 40% within three years.
Marathon is developing the Marathon PGM and copper project near Marathon, Ontario, and is currently in the permitting stage after completing a definitive feasibility study late last year. The Marathon deposit is described as one of the largest PGM-copper reserves in Canada and is expected to support mining up to 200,000 ounces per year of platinum and palladium for up to 12 years, executive said.
Stillwater, which is majority owned by Russia's Norilsk Nickel, has two operating mines in Montana's Beartooth Mountains and is the only US-based producer of PGMs and the largest PGM producers outside of South Africa and Russia.
Stillwater CEO Frank McAllister told investors in a conference call following the announcement that developing an open-pit mine and processing facility at Marathon would cost about about $400 million. In addition to platinum and palladium reserves of more than 3 million ounces, the Marathon deposit has reserves of copper estimated at 500 million pounds.
Sales of byproduct copper and trace amounts of gold and silver in the deposit are expected to offset almost all production costs, McAllister said. The purchase also gives Stillwater control of Marathon's nearby Geordie Lake property and an emerging platinum resource in Manitoba, executives noted.
Under the agreement, Marathon PGM will spin off its gold properties, up to Canadian $6 million in cash and other assets and liabilities to its Marathon Gold subsidiary.
