Sibanye CEO Neal Froneman
Exploration and development company Generation Mining (Gen Mining) has entered into a definitive agreement with gold and platinum miner Sibanye-Stillwater to earn a majority stake in the Marathon project, in northern Ontario, Canada.
South Africa-headquartered Sibanye CEO Neal Froneman said on Wednesday that handing over control of the Marathon project to a focused exploration company would ensure appropriate investment for the asset.
In terms of the agreement Gen Mining would acquire a 51% interest in the Marathon project and advance the asset through further economic studies.
The companies first announced a potential transaction in April, when Gen Mining signed a letter of intent with Sibanye to earn into the property, which comprises 44 mining leases and 82 contiguous claims.
At the time, Gen Mining CEO Jamie Levy said that Marathon was “one of the few large undeveloped palladium deposits in North America”.
The property was developed from 1985 to 2010 by various companies and was eventually owned by Marathon PGM Corporation, which Stillwater Mining acquired for $118-million in 2010. In 2017, the property fell into the hands of Sibanye when it bought Stillwater for $2.2-billion.
In terms of the definitive acquisition agreement, Sibanye would receive upfront proceeds in the form of C$3-million in cash and 11 053 795 shares at C$$0.2714 a share in CSE-listed Gen Mining, which would give the company an equity interest of 12.9% upon closing in July.
Froneman commented that the transaction would unlock value for Sibanye-Stillwater and allow it to maintain its attention on its core US platinum group metals operations.