Mitsubishi Buys into Stillwater’s Marathon Project


Site view of Stillwater Mining’s Marathon PGM project in Ontario, and an early-stage conceptual view of
the mine layout. (Photos courtesy of Stillwater Mining)
Stillwater Mining announced in late March 2012 an agreement with Mitsubishi Corp. whereby Mitsubishi will acquire a 25% interest in Stillwater’s Marathon platinum group metals (PGM) and copper project in northwest Ontario for approximately $81.25 million. Mitsubishi also will meet the venture’s first cash call of $13.6 mil-lion, for a combined total cash payment of $94.6 million.

Mitsubishi will be responsible for fund-ing its 25% share of operating, capital and exploration expenditures on the Marathon properties and has agreed to cooperate and support efforts to secure project financing. Under a related supply agreement, Mitsu-bishi also will have an option to purchase up to 100% of Marathon’s PGM production.

The Marathon deposit is located about 10 km north of the town of Marathon, Ontario, near the north shore of Lake Superior. Stillwater acquired the property in November 2010. The town of Marathon is situated on the Trans-Canada Highway about 300 km east of the city of Thunder Bay. The project is currently in the environmental assessment and permitting stage.

Once approved, the Marathon project would include development of an open-pit mine and milling operation, with one pri-mary pit and several smaller satellite pits. Concentrates produced at Marathon would be transported off-site to a third-party smelter and refinery for final processing. Initial projections suggest the mine would produce about 200,000 oz/y of PGMs (mostly palladium) and 37 million lb/y of copper over a mine life of about 11.5 years.

Pre-production capital cost of the Marathon project is currently estimated at between $550 million and $650 million, with first production of PGMs and copper in about 2016, subject to orderly receipt of approvals. Outside of amounts provided through project financing, Stillwater and Mitsubishi will be responsible for separate-ly funding their respective interests in the project. To date, Stillwater has invested about $159 million in the properties.

Commenting on the transaction, Still-water Chairman and CEO Frank McAllister said, “For a number of years we at Stillwater have recognized the critical need to grow and diversify the company’s production, which at present is limited to our PGM operations along the J-M Reef in Montana. Conse-quently, we were very pleased to acquire Marathon in 2010. We recognized early on that the development of Marathon likely would require raising new capital and/or bringing in a partner. In this regard, we are delighted to have the support of Mitsubishi.”

As featured in Womp 2012 Vol 05 - www.womp-int.com