Sibanye hands Marathon option to Gen Mining
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CEO Neal Froneman said the option agreement would unlock immediate value for the group. In passing the baton, Sibanye believes the Marathon project would be better off under the stewardship of a focused exploration company that would "ensure appropriate investment" for the asset.
Froneman said the transaction would allow Sibanye to maintain its attention on its core US PGM operations in Montana, where it was busy with an expansion.
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Under terms of the agreement Gen Mining can acquire a 51% interest in the project and advance the asset through further economic studies.
Sibanye will receive upfront proceeds of US$2.3 million (C$3 million) in cash and 11.05 million shares at C$$0.2714 a share in CSE-lister Gen Mining, which would give the company an equity interest of 12.9% upon the expected closing in July.
The companies in April signed a binding letter to option Marathon to Gen Mining. At the time, CEO Jamie Levy said that Marathon was "one of the few large undeveloped palladium deposits in North America", with potential "near-term development" along with "potentially considerable exploration upside".
The property comprises 44 mining leases and 82 attached claims. It 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, Sibanye acquired the asset when it bought Stillwater for $2.2 billion.