With an option to acquire up to 100% of the PGM production, Mitsubishi will work to secure project financing for Marathon and be responsible for funding its 25% share of operating, capital and exploration expenditures on the project.
Stillwater has already invested about $159m in these properties until now as part of the development work.
Stillwater’s chairman and CEO Frank McAllister said the Marathon Project ranks as one of the few PGM plays in North America, and Mitsubishi’s financial commitment highlights the significant potential value contained in this resource opportunity.
"The transaction brings to the project a strategic investment by an exceptional and globally integrated business partner and at the same time allows us to be prudent in balancing the cash requirements of our various growth projects," Allister added.
The Marathon deposit is located about 10km north of the town of Marathon, Ontario, near the north shore of Lake Superior, and is currently in the environmental assessment and permitting stage.
The project would include development of an open-pit mine and milling operation, and concentrates produced at Marathon would be transported off-site to a third-party smelter and refinery for final processing.
The mine is expected to produce about 200,000 ounces of PGMs (mostly palladium) and 37 million pounds of copper a year, having a mine life of about 11.5 years,
According to the deal, Stillwater will hold 75% stake in the Marathon assets while the remaining held by Mitsubishi.
Preproduction at the project is projected to cost between $550m and $650m, with first production of PGMs and copper expected in about 2016, Stillwater Mining said.
The transaction is expected to be closed within few weeks.
