Marathon Gold Corporation (“Marathon” or the “Company”;
TSX: MOZ) is pleased to report that it has amended and
restated its term loan facility (the “Amended & Restated
Facility” or “Facility”) first entered into on March 31, 2022 with
Sprott Resource Corporation (“Sprott”). Amongst other amendments
described herein, the Facility has been increased to US$225 million
from US$185 million. The proceeds of the Facility are to be used
for the construction, development and working capital requirements
of Marathon’s Valentine Gold Project located in the central region
of Newfoundland and Labrador (the “Project” or “Valentine”).
Matt Manson, President and CEO of Marathon,
commented: “We are very happy to be announcing today this amended
and restated credit facility with Sprott. Since March 2022, when we
announced our initial credit facility, we have received federal and
provincial approvals to proceed to construction, commenced our site
early works, and issued an Updated Feasibility Study describing a
3-pit mine plan with an extended mine life, increased production
profile and updated capital and operating costs. The new credit
facility increases the available credit to Marathon to US$225
million, while keeping the overall cost of borrowing to a rate
consistent with the original agreement. Within this framework, the
new facility bears a reduced interest margin, and a commensurate
increase in the back-ended production linked payment, with no
upfront arrangement or commitment fees.”
Mr. Manson continued: “Sprott has been a
constructive and collaborative partner for the development of
Valentine since we started our financing discussions with them in
2021. Our approach from the start has been to arrange the
appropriate balance of traditional term loan debt and equity,
without excessive leverage. This new credit facility is consistent
with that approach. With the Project’s construction now well
underway, and this significant component of our financing
completed, we are on track with the development of what will be the
largest gold mining operation in Atlantic Canada.”
Greg Caione, Senior Managing Partner, Private
Strategies, Sprott Inc., commented: "As one of the largest
investors and lenders dedicated to the natural resource sector,
Sprott is excited to continue its partnership with Marathon’s
experienced and accomplished management team. The increase of the
Facility amount, and amended terms, is consistent with our strategy
to provide innovative and flexible capital to maximize the value of
exceptional projects and support world-class management teams. We
commend the management team on the progressive milestones achieved
during 2022, culminating in the release of the Updated Feasibility
Study in December 2022. We are confident in Marathon’s ability to
bring the project into production and look forward to successive
accomplishments over the coming years, including additional
exploration success at the Valentine property."
Key Facility Terms
- Senior secured
term loan facility of US$225 million maturing on December 31, 2027
(the “Maturity Date”), with a 6-month extension option available at
Marathon’s discretion.
- US$125 million
of the Facility was funded to a debt proceeds account (the “DPA”)
on March 31, 2022. On January 24, 2023, Marathon requested the
second and final advance of US$100 million to complete the DPA
funding.
- The Facility is
available to the Company up to the end of March 31, 2025 (the
“Release Period”). The first US$50 million in the DPA is available
to Marathon immediately, with subsequent releases available on
satisfaction of a cost-to-complete covenant and certain other
customary terms and conditions.
- The Facility
will bear an interest of 7.0% plus the greater of (i) 3-month
LIBOR, and (ii) 2.50% per annum, payable quarterly. An initial
interest amount of US$4.45 million (the “Initial Interest Amount”)
representing interest on the funds advanced to the DPA since March
31, 2022, as well as 75% of the interest accruing to June 30, 2025,
shall be capitalized.
- US$17/ounce
will be payable on 1.6 million ounces of payable gold produced by
the Project starting on July 31, 2025.
- In connection
with entering into the increased Facility, Marathon will issue to
Sprott 10 million warrants with a strike price of C$1.35 and a term
of 5 years.
- There are no
other commitment or arrangement fees applicable.
- 50% of the
Facility is to be repaid in nine unequal quarterly installments
commencing on September 30, 2025, with the remaining 50% due on the
Maturity Date.
The Facility contains additional terms and
conditions customary for a transaction of this nature, such as
representations, warranties, borrower covenants, permitted
encumbrances, assignment rights and events of default, as well as
voluntary prepayment conditions, including prepayment upon change
of control. A copy of the Facility agreement will be made available
on SEDAR.
About Marathon
Marathon (TSX:MOZ) is a Toronto based gold
company advancing its 100%-owned Valentine Gold Project located in
the central region of Newfoundland and Labrador, one of the top
mining jurisdictions in the world. The Project comprises a
series of five mineralized deposits along a 32-kilometre system. A
December 2022 Updated Feasibility Study outlined an open pit mining
and conventional milling operation producing 195,000 ounces of gold
a year for 12 years within a 14.3-year mine life. The Project was
released from federal and provincial environmental assessment in
2022 and construction commenced in October 2022. The Project has
estimated Proven Mineral Reserves of 1.43 Moz (23.36 Mt at 1.89
g/t) and Probable Mineral Reserves of 1.27 Moz (28.22 Mt at 1.40
g/t). Total Measured Mineral Resources (inclusive of the Mineral
Reserves) comprise 2.06 Moz (29.23 Mt at 2.19 g/t) with Indicated
Mineral Resources (inclusive of the Mineral Reserves) of 1.90 Moz
(35.40 Mt at 1.67 g/t). Additional Inferred Mineral Resources are
1.10 Moz (20.75 Mt at 1.65 g/t Au). Please see the NI 43-101
Technical Report “Valentine Gold Project, NI 43-101 Technical
Report and Feasibility Study” effective November 30, 2022,
Marathon’s Annual Information Form for the year ended December 31,
2021 and other filings made with Canadian securities regulatory
authorities available at www.sedar.com for further details and
assumptions relating to the Valentine Gold Project.
About Sprott
Sprott is an alternative asset manager and
global leader in mining and real asset investments. Through its
subsidiaries in Canada, the US and Asia, Sprott is dedicated to
providing investors with best in-class investment strategies that
include Exchange Listed Products, Alternative Asset Management and
Private Resource Investments. The Corporation also operates
Merchant Banking and Brokerage business in both Canada and the US.
Sprott is based in Toronto with offices in New York, Carlsbad, and
Vancouver and the shares of its parent company, Sprott Inc., are
listed on the New York Stock Exchange under the symbol (NYSE:SII)
and Toronto Stock Exchange under the symbol (TSX:SII).
For more information, please
contact:
Amanda MalloughManager, Investor RelationsTel: 416
855-8202amallough@marathon-gold.com |
Matt MansonPresident & CEOmmanson@marathon-gold.com |
Julie RobertsonCFOjrobertson@marathon-gold.com |
To find out more information on Marathon Gold
Corporation and the Valentine Gold Project, please visit
www.marathon-gold.com.
Cautionary Statement Regarding
Forward-Looking Information
Certain information contained in this news
release, constitutes forward-looking information within the meaning
of Canadian securities laws (“forward-looking statements”). All
statements in this news release, other than statements of
historical fact, which address events, results, outcomes or
developments that Marathon expects to occur are forward-looking
statements. Forward-looking statements include statements that are
predictive in nature, depend upon or refer to future events or
conditions, or include words such as “expects”, “anticipates”,
“plans”, “believes”, “estimates”, “considers”, “intends”,
“targets”, or negative versions thereof and other similar
expressions, or future or conditional verbs such as “may”, “will”,
“should”, “would” and “could”. We provide forward-looking
statements for the purpose of conveying information about our
current expectations and plans relating to the future, and readers
are cautioned that such statements may not be appropriate for other
purposes. More particularly and without restriction, this news
release contains forward-looking statements and information about
the FS and the results therefrom (including IRR, NPV5%, Capex, FCF,
AISC and other financial metrics and economic analysis), the
realization of mineral reserve and mineral resource estimates, the
future financial or operating performance of the Company and the
Project, capital and operating costs, the ability of the Company to
obtain all government approvals, permits and third-party consents
in connection with the Company’s exploration, development and
operating activities, the potential impact of COVID-19 on the
Company, the Company’s ability to successfully advance the Project
and anticipated benefits thereof, economic analyses for the
Valentine Gold Project, processing and recovery estimates and
strategies, future exploration and mine plans, objectives and
expectations and corporate planning of Marathon, future
environmental impact statements and the timetable for completion
and content thereof and statements as to management's expectations
with respect to, among other things, the matters and activities
contemplated in this news release.
Forward-looking statements involve known and
unknown risks, uncertainties and assumptions and accordingly,
actual results and future events could differ materially from those
expressed or implied in such statements. You are hence cautioned
not to place undue reliance on forward-looking statements. In
respect of the forward-looking statements concerning the
interpretation of exploration results and the impact on the
Project’s mineral resource estimate, the Company has provided such
statements in reliance on certain assumptions it believes are
reasonable at this time, including assumptions as to the continuity
of mineralization between drill holes. A mineral resource that is
classified as “inferred” or “indicated” has a great amount of
uncertainty as to its existence and economic and legal feasibility.
It cannot be assumed that any or part of an “inferred mineral
resource” or an “indicated mineral resource” will ever be upgraded
to a higher category of mineral resource. Investors are cautioned
not to assume that all or any part of mineral deposits in these
categories will ever be converted into proven and probable mineral
reserves.
By its nature, this information is subject to
inherent risks and uncertainties that may be general or specific
and which give rise to the possibility that expectations,
forecasts, predictions, projections or conclusions will not prove
to be accurate, that assumptions may not be correct and that
objectives, strategic goals and priorities will not be achieved.
Factors that could cause future results or events to differ
materially from current expectations expressed or implied by the
forward-looking statements include risks and uncertainties relating
to the interpretation of drill results, the geology, grade and
continuity of mineral deposits and conclusions of economic
evaluations; uncertainty as to estimation of mineral resources;
inaccurate geological and metallurgical assumptions (including with
respect to the size, grade and recoverability of mineral
resources); the potential for delays or changes in plans in
exploration or development projects or capital expenditures, or the
completion of feasibility studies due to changes in logistical,
technical or other factors; the possibility that future
exploration, development, construction or mining results will not
be consistent with the Company’s expectations; risks related to the
ability of the current exploration program to identify and expand
mineral resources; risks relating to possible variations in grade,
planned mining dilution and ore loss, or recovery rates and changes
in project parameters as plans continue to be refined; operational
mining and development risks, including risks related to accidents,
equipment breakdowns, labour disputes (including work stoppages and
strikes) or other unanticipated difficulties with or interruptions
in exploration and development; risks related to the inherent
uncertainty of production and cost estimates and the potential for
unexpected costs and expenses; risks related to commodity and power
prices, foreign exchange rate fluctuations and changes in interest
rates; the uncertainty of profitability based upon the cyclical
nature of the mining industry; risks related to failure to obtain
adequate financing on a timely basis and on acceptable terms or
delays in obtaining governmental or other stakeholder approvals or
in the completion of development or construction activities; risks
related to environmental regulation and liability, government
regulation and permitting; risks relating to the Company’s ability
to attract and retain skilled staff; risks relating to the timing
of the receipt of regulatory and governmental approvals for
continued operations and future development projects; political and
regulatory risks associated with mining and exploration; risks
relating to the potential impacts of the COVID-19 pandemic on the
Company and the mining industry; changes in general economic
conditions or conditions in the financial markets; and other risks
described in Marathon’s documents filed with Canadian securities
regulatory authorities, including the Annual Information Form for
the year ended December 31, 2021.
You can find further information with respect to
these and other risks in Marathon’s Annual Information Form for the
year ended December 31, 2021 and other filings made with Canadian
securities regulatory authorities available at www.sedar.com. Other
than as specifically required by law, Marathon undertakes no
obligation to update any forward-looking statement to reflect
events or circumstances after the date on which such statement is
made, or to reflect the occurrence of unanticipated events, whether
as a result of new information, future events or results
otherwise.
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