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Generation Mining Closes Marathon PGM property Acquisition

Mining News - Published on Mon, 15 Jul 2019

Image Source: Generation Mining
Generation Mining Limited has, through a wholly-owned subsidiary, completed the acquisition of a 51% initial interest in the Marathon palladium project located near Marathon, Ontario, from Stillwater Canada Inc, a wholly owned subsidiary of Sibanye Gold Limited and entered into a joint venture agreement with respect to the Property. Gen Mining can increase its interest in the Property and joint venture to 80% by spending USD 10 million and preparing a Preliminary Economic Assessment within four years.

On July 9, 2019, the proceeds of the previously completed $8 million bought deal private placement financing led by Haywood Securities Inc. were released from escrow, and the 28,572,000 outstanding subscription receipts were converted into an aggregate of 28,572,000 common shares and 14,286,000 common share purchase warrants, each such warrant exercisable for one common share at a price of USD 0.45 per share until July 9, 2021. For more information on the private placement.

On Closing, Gen Mining paid to Stillwater USD 2.9 million in cash and issued 11,053,795 common shares of Gen Mining at a deemed price per common share of USD 0.2714, for a total consideration payment to Stillwater of USD 5,999,999.96 for the initial 51% interest. Gen Mining is now the operator of the joint venture and the Property and will assume all liabilities of the Property in such operatorship capacity.

During the Second Earn-In Period, Gen Mining must sole-fund all expenditures in respect of the Property and related activities. Once Gen Mining has earned the Second Interest, the parties will fund expenditures on a pro rata basis in order to maintain their respective interests in the joint venture, subject to normal dilution provisions. If Gen Mining does not earn into the Second Interest, then for a period of 90 days after the termination of the Second Earn-In Period, Stillwater shall have a one-time option to re-acquire from Gen Mining a 31% participating interest in the joint venture for CADN 1.00 and become operator under the joint venture at such time.

Upon a feasibility study being prepared and the management committee of the joint venture making a positive commercial production decision, as long as Stillwater has a minimum 20% interest in the Property, then Stillwater will have 90 days to exercise an option to increase its participating interest in the joint venture from its current percentage up to 51% by agreeing to fund an amount of the total capital costs as estimated in the feasibility study, multiplied by the Percentage Differential, in addition to its pro rata proportion of costs that it would fund at its current participating interest level. Should this option be exercised, Stillwater would also take over operatorship of the project at such time.

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Posted By : Sanju Moirangthem on Mon, 15 Jul 2019
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