BILLINGS – Stillwater Mining Co. is buying Marathon PGM Corp. for $118 million to gain control of the Canadian company’s Ontario precious metals reserve and other properties, the companies announced Tuesday.
Stillwater said the acquisition of Marathon would allow it to increase its platinum and palladium production by about 40 percent within three years.
Columbus-based Stillwater is the only U.S. producer of platinum group metals, from two mines in southern Montana’s Beartooth Mountains.
Marathon is headquartered in Toronto. It has been developing the Marathon PGM-Cu project near the town of Marathon, Ontario, for the last several years.
The deal is expected to be completed by the end of November pending regulatory and shareholder approvals. Stillwater plans to begin production at the Marathon site within three years.
“As the Marathon PGM/Copper project is one of the few near-term PGM (platinum group metals) development opportunities on this continent, it solidifies our position as North America’s leading PGM producer,” Stillwater CEO Frank McAllister said in a statement.
Through the acquisition, Stillwater also gains control over a second Ontario project, Marathon’s Geordie Lake property, and an emerging platinum resource in Manitoba known as the Bird River property.
Stillwater shares fell 60 cents, or 3.9 percent, to $14.68 in Tuesday morning trading.
The company in July reported a second-quarter profit of $14.6 million on revenue of $134.9 million. That compared with a profit of $4.6 million in the second quarter of 2009 on revenue of $94.8 million.