Deal settles prior to investor acquiring all outstanding company stock
By Devika Patel
Knoxville, Tenn., Sept. 16 - Marathon PGM Corp. said it completed a C$3 million private placement of stock. The deal was announced Sept. 7.
The company sold 974,026 common shares at C$3.08 apiece to Stillwater Mining Co. The per-share price is a 17.43% premium to C$3.73, the closing share price on Sept. 15.
Proceeds will provide the company with additional liquidity to fund its operations and for general working capital purposes prior to closing a larger negotiation with the investor, under which Stillwater will acquire all of the company's outstanding shares. The deal is a 50:50 split of cash and Stillwater shares.
According to the transaction's terms, Stillwater will exchange 0.112 common shares and C$1.775 in cash for each outstanding Marathon PGM share.
Marathon PGM will also distribute shares of its subsidiary, Marathon Gold Corp., to Marathon PGM shareholders before the exchange, which is valued at approximately $118 million, or C$3.55 per Marathon PGM share, which does not take into account the value of the Marathon Gold shares.
Marathon PGM shareholders will receive one-half of a common share of Marathon Gold for each Marathon PGM share held.
"The proposed transaction is structured to allow Marathon Gold to continue utilizing our expertise in finding and delineating ore reserves, and generating value for shareholders by advancing exploration properties," the company's president and chief executive officer Phillip C. Walford said in a press release at pricing.
"In particular, the promising Valentine Lake gold prospect in Newfoundland, currently in the process of being delineated, will remain in Marathon Gold and will continue as an area of interest for the Marathon Gold team. At the same time, the sale of the Marathon PGM assets to Stillwater will realize substantial value for Marathon PGM's shareholders."
Marathon PGM also said it has called a special meeting of shareholders on Nov. 15 to consider and possibly approve the merger.
Based in Toronto, Marathon PGM acquires, explores and develops natural resource properties.
| Issuer: | Marathon PGM Corp.
|
| Issue: | Common shares
|
| Amount: | C$3 million
|
| Shares: | 974,026
|
| Price: | C$3.08
|
| Warrants: | No
|
| Investor: | Stillwater Mining Co.
|
| Announcement date: | Sept. 7
|
| Settlement date: | Sept. 16
|
| Stock symbol: | Toronto: MAR
|
| Stock price: | C$3.73 at close Sept. 15
|
| Market capitalization: | C$118.83 million
|
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