Canada's Marathon Copper-Palladium Mine Completes C$1.3 Billion Financing, Pre-Construction Works to Begin in Q4

en.Wedoany.com Reported - On September 14, Generation Mining announced that it had secured the final C$340 million in financing for the Marathon copper-palladium project in northwestern Ontario, bringing the total project construction financing package to approximately C$1.3 billion. The new funds include C$200 million in underwritten financing, C$40 million in a private placement, and C$100 million in subordinated unsecured convertible notes, with the Canada Growth Fund contributing approximately C$140 million in total and the Canada Infrastructure Bank contributing C$50 million. The project's board of directors plans to meet to make a final investment decision following the completion of the relevant financings, with pre-construction works targeted to begin in the fourth quarter of 2026.

This C$340 million round represents the final portion of Marathon's construction financing. Generation Mining had previously obtained a US$310 million senior secured project financing credit facility from Export Development Canada, ING Capital, and Societe Generale, equivalent to approximately C$424 million; it also has approximately C$200 million in undrawn metal stream financing from Wheaton Precious Metals and approximately C$145 million in equipment leasing capacity. Together with this round of financing, these funds constitute a construction financing package of approximately C$1.3 billion.

Of the new C$340 million, C$200 million is an underwritten offering at a price of C$0.64 per share, with plans to issue 312.5 million common shares, expected to close on or about September 21; the Canada Growth Fund will also subscribe for 62.5 million shares through a private placement at C$0.64 per share, contributing C$40 million. A further C$100 million is in convertible notes, with the Canada Growth Fund and the Canada Infrastructure Bank each contributing C$50 million. The transactions remain subject to exchange, shareholder, and other regulatory approvals.

The overall financing package also includes a C$185 million cost overrun facility, of which C$95 million is covered by this round of financing and C$90 million comes from a previously arranged subordinated debt facility with the Canada Infrastructure Bank; in addition, the project construction capital budget includes a C$119 million contingency and a total of C$78 million in mine closure, fisheries compensation guarantees, and letters of credit.

In conjunction with the financing close, Generation Mining also reached terms with Glencore for a long-term copper concentrate offtake agreement. Once Marathon is in production, Glencore will purchase polymetallic copper concentrate containing copper, palladium, platinum, gold, and silver. The contract has a minimum term of 14 years, commencing September 1, 2028; for the first two full years after commercial production, and after the 13th year of the contract, Glencore will purchase 100% of the project's concentrate production, while in the intervening years it will purchase approximately 50% of annual production under an agreed mechanism. The concentrate is planned to be sent to Glencore's Horne smelter and CCR refinery in Rouyn-Noranda, Quebec, for further processing.

The Marathon project has entered the construction readiness phase. Generation Mining awarded the EPCM contract to Ausenco in March of this year and has since advanced procurement of major equipment and construction packages. As of August, major equipment and engineering packages for which quotes had been received accounted for approximately 30% of the project's estimated capital cost, with quotes generally within the feasibility study budget. The project has already obtained the major permits required for construction.

Marathon has a planned mine life of approximately 13 years. The 2025 updated feasibility study shows that the project is expected to have a net present value of C$1.07 billion, an internal rate of return of 28%, and a payback period of approximately 1.9 years; over the mine life, it is expected to produce approximately 2.161 million ounces of palladium, 532 million pounds of copper, 488,000 ounces of platinum, 160,000 ounces of gold, and 3.051 million ounces of silver. The company expects steady-state average annual production of approximately 42 million pounds of copper, 168,000 ounces of palladium, and 38,000 ounces of platinum.