Stillwater's Marathon project to get huge investment

March 29, 2012

Mitsubishi Corporation announced that it plans to invest US$94.9 million in Stillwater Mining’s Marathon PGM and copper project, an investment that Stillwater president Frank McAllister said “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.”

The Marathon project is north of Marathon, Ontario, 300 km (186 miles) east of the city of Thunder Bay. The investment will give the Mitsubishi Corp. a 25 percent interest in the project, and the option to purchase up to 100 percent of its PGM production.

“This agreement brings a world-class partner to a first-class PGM asset. 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,” McAllistet said.
Stillwater has invested $159 million in Marathon.

Currently in the environmental assessment and permitting stage, the project would include development of an openpit mine and milling operation with one primary pit and several smaller satellite pits. An environmental assessment was planned to be submitted in April with review of the documents expected to take another year. Once the environmental assessment has been reviewed and approved, the formal permitting process should be able to proceed.

Initial projections forecast the mine would produce about 6.2 t/a (200,000 ozpy) of PGMs (mainly palladium) and 37 million lbs/year of copper over a mine life of 11.5 years. Mining and processing is anticipated to be at a rate of 20 kt/a (22,000 stpd). As of November 24, 2009, proven and probable reserves include 497 million lbs of copper, 76 t (2,447,000 oz) of palladium, 21.6 t (696,000 oz) of platinum, 7.8 t (251,000 gold oz), and 131.7 t (4,235,000 oz) of silver.

Marathon is expected to increase Stillwater’s future PGM production by 30 percent and add a portfolio-diversifying copper component.
Concentrates produced at Marathon would be transported off-site to a third-party smelter and refinery for final processing.

Preproduction capital cost of the project is currently forecast to be in the range of $550 million to $650 million, although that figure is expected to increase due to higher labor and materials costs.

Stillwater is continuing with baseline environmental and socio-economic studies and is engaged with federal and provincial regulatory entities and First Nations communities to secure the required permits and approvals for mine construction and operation. All federal and provincial approvals are expected in 2014, after which it is expected to take 18 to 24 months to build the mine. Commercial production would commence in 2016.
The operation anticipates creating 130 to 250 permanent full-time life-of-mine positions and three spin-off jobs in the region for each full-time position. The project is located in close proximity to population centers, the Trans-Canada Highway, an electrical transmission corridor, rail lines, Great Lake port facilities and a regional airport.

Under the Mitsubishi agreement, Stillwater will own 75 percent and Mitsubishi will own 25 percent of the Marathon properties.



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