Marathon Gold Corporation (“
Marathon” or the
“
Company”; TSX: MOZ) is pleased to announce that
it intends to mail and file its management information circular
dated December 11, 2023 (the “
Circular”) and
related meeting and proxy materials today in connection with the
special meeting (the “
Marathon Meeting”) of
holders (the “
Marathon
Shareholders”) of common shares of Marathon (the
“
Marathon Shares”) scheduled to be held on January
16, 2024 in connection with its previously announced proposed plan
of arrangement (the “
Arrangement”) with Calibre
Mining Corp. (“
Calibre”). Pursuant to the
arrangement agreement dated November 12, 2023 between Marathon and
Calibre and the accompanying Arrangement, Marathon Shareholders
(other than Calibre) will receive 0.6164 of a Calibre common share
(each whole share, a “
Calibre Share”) for each
Marathon Share held (the “
Consideration”). The
purpose of the Marathon Meeting is to seek approval of the Marathon
Shareholders in respect of the Arrangement.
Materials for the Marathon Meeting, including
the Circular, will be available on SEDAR+ at
www.sedarplus.ca and on the Company's website at
www.marathon-gold.com later today.
Benefits to Marathon Shareholders and
Transaction Highlights
The board of directors of the Company (the
“Marathon Board”) and the independent special
committee of the Board (the “Special Committee”)
consulted with management of Marathon and legal and financial
advisors in evaluating the Arrangement and, in reaching their
respective conclusions and formulating their unanimous
recommendations, reviewed a significant amount of information and
considered a number of factors, as set out in greater detail in the
Circular, including the following anticipated benefits and
transaction highlights relating to the Arrangement:
-
Premium. The Consideration provides Marathon
Shareholders with a meaningful upfront premium of 32% based on spot
and 61% based on Marathon’s and Calibre’s 20-day volume weighted
average prices as at November 10, 2023, the last trading day prior
to announcement of the Arrangement.
-
Increased Scale. The combined company resulting
from the completion of the Arrangement (the “Combined
Company”) will be a high-margin, cash flow focused,
mid-tier gold producer in the Americas1 expected to produce on
average 500 koz (2025 – 2026E average) of gold per year with peer
leading production growth of 80% (2024 – 2026E average)1 upon
adding gold production from the Valentine Gold project (the
“Valentine Gold Project”) – which is expected to
average 195 koz per year from the first 12 years of production
beginning in 20251,4.
-
Improved Balance Sheet and Cash Flow. The Combined
Company will have a strong balance sheet with an estimated combined
cash balance of approximately US$148 million2 and significant free
cash flow generation from Calibre’s existing mines. Annual cash
flow from operations of the Combined Company is estimated at US$380
million (2025 – 2026E)1.
-
Removal of Financing Risk. The Arrangement
provides Marathon with access to the necessary financing to ensure
the completion of the construction of the Valentine Gold Project
without resorting to further encumbering the Valentine Gold Project
with additional streams, royalties, debt or highly dilutive equity
financings in a difficult equity capital market that could be
detrimental to existing Marathon Shareholders.
-
Significant Combined Mineral Endowment. The
Combined Company will have a significant combined mineral endowment
of over 4.0 million ounces of Mineral Reserves, 8.6 million ounces
of Measured and Indicated Mineral Resources (inclusive of Mineral
Reserves) and 4.0 million ounces of Inferred Mineral
Resources3.
- Asset
Diversification and Re-Rating Potential. The Arrangement
offers Marathon Shareholders benefits from asset diversification,
enhanced trading liquidity, broader analyst and institutional
investor following, index inclusions and potential share price
re-rating.
-
Continued Participation. The Arrangement offers
Marathon Shareholders the opportunity to retain significant and
de-risked exposure to the Valentine Gold Project while gaining
exposure to Calibre’s high-quality portfolio of low-cost,
high-grade mines, with further potential upside from near and
long-term growth projects. Immediately upon completion of the
Arrangement, existing Marathon Shareholders, excluding Calibre, are
expected to own in aggregate approximately 35.1% of the Combined
Company.
-
Limited Conditions and Short Timeline to Closing.
The Arrangement is subject to a limited number of customary closing
conditions and is expected to close by the end of January
2024.
-
Calibre Private Placement. The recently completed
private placement (the “Financing”) by Calibre for
gross proceeds to Marathon of $40 million provided Marathon with
the immediate additional funding needed for the continued
construction of the Valentine Gold Project. The Financing was not
contingent upon successful completion of the Arrangement.
-
Special Committee. The Special Committee
considered a number of other alternatives, including advanced
discussions with other potential acquirors and other financing
alternatives for the construction of the Valentine Gold Project and
determined the Arrangement to be in the best interests of
Marathon.
The Arrangement
The Arrangement will be completed pursuant to a
court-approved plan of arrangement under the Canada Business
Corporations Act. The Arrangement is subject to the approval of at
least 66-⅔% of the votes cast by Marathon Shareholders present or
represented by proxy at the Marathon Meeting. The issuance of
Calibre Shares as the Consideration in connection with the
Arrangement is subject to the approval of a majority of the votes
cast by the shareholders of Calibre at a special meeting of Calibre
shareholders to be held on January 16, 2024.
Completion of the Arrangement is subject to
shareholder and court approvals and the satisfaction or waiver of
certain other conditions. The Toronto Stock Exchange has
conditionally approved the listing of the Calibre Shares to be
issued under the Arrangement, subject to the filing of certain
documents following the closing of the Arrangement. The Arrangement
has also been cleared under the Competition Act (Canada) by the
Commissioner of Competition. It is currently expected that the
effective date of the Arrangement will occur in late January
2024.
Special Committee and Marathon Board
Recommendation
The Special Committee, after consulting with
management of Marathon and legal and financial advisors in
evaluating the Arrangement, and taking into account the reasons
described in detail in the Circular, unanimously recommended that
the Marathon Board approve the Arrangement.
The Marathon Board, after consulting with
management of Marathon and legal and financial advisors in
evaluating the Arrangement and taking into account the reasons
described in detail in the Circular, acting on the unanimous
recommendation of the Special Committee unanimously determined that
the Arrangement is in the best interests of Marathon.
Accordingly, the Marathon
Board UNANIMOUSLY recommends that the Marathon Shareholders
vote "FOR" the
Arrangement.
Receipt of Interim Court
Order
The Company is also announcing that on December
11, 2023, it was granted an interim order (the
"Interim Order") by the Ontario
Superior Court of Justice (Commercial List) regarding the
Arrangement. The Interim Order authorizes Marathon to proceed with
various matters, including the holding of the Marathon Meeting to
consider and vote on the proposed Arrangement.
Marathon Meeting and Voting
The Marathon Meeting is scheduled to be held at
10:00 a.m. (Toronto time) on January 16, 2024 at the offices of
Norton Rose Fulbright Canada LLP at 222 Bay Street, Suite 3000,
Toronto, Ontario, Canada M5K 1E7.
Your vote is important regardless of the number
of Marathon Shares you own. As a Marathon Shareholder, it is very
important that you read the Circular and related materials with
respect to the Marathon Meeting carefully and then vote your
Marathon Shares.
You are eligible to vote your Marathon Shares if
you were a Marathon Shareholder of record at the close of business
on November 27, 2023.
Marathon Shareholders are encouraged to vote in
advance of the Marathon Meeting using one of the voting methods
described below well in advance of the proxy voting deadline.
The proxy voting deadline is 10:00 a.m.
(Toronto time) on January 12, 2024, or if the Marathon
Meeting is adjourned, not less than 48 hours (excluding
Saturdays, Sundays and holidays) before the time
set for any reconvened meeting at which the proxy or voting
instruction form is to be used.
Voting Methods |
Internet |
Telephone |
Mail |
RegisteredShareholdersShares held
in own nameand represented by aphysical certificate orDRS Advice
and have a13-digit control number. |
Vote online at www.meeting-vote.com |
1-888-489-5760 |
Return the completed Form of Proxy or Voting Instruction Form in
the enclosed postage paid envelope. |
Beneficial ShareholdersShares
held with a broker, bank or otherintermediary and have a
16-digit control number. |
Vote online at http://www.proxyvote.com |
Canada:1-800-474-7493 (EN)or1-800-474-7501 (FR)USA:
1-800-454-8683 |
Shareholder Questions and
Assistance
For more information, or if you have any
questions or require assistance voting your Marathon Shares, please
contact our proxy solicitation agent and shareholder communications
advisor, Laurel Hill Advisory Group, at 1-877-452-7184 toll-free in
North America, or outside North America at 1-416-304-0211, or by
email at assistance@laurelhill.com.
Qualified Persons
Disclosure of a scientific or technical nature
with respect to Marathon and its assets in this news release has
been approved by Mr. Gil Lawson, P. Eng. (Ont.), Chief Operating
Officer for Marathon and Mr. David Ross, P.Geo (NL), Vice
President, Geology & Exploration for Marathon. Mr. Lawson and
Mr. Ross are qualified persons under National Instrument 43-101
Standards of Disclosure for Mineral Projects (“NI
43101”). Mr. Roy Eccles, P.Geo. (NL), of APEX Geoscience
Ltd. is a Qualified Person for purposes of NI 43101, is independent
of Marathon, and has reviewed and takes responsibility for
Marathon’s updated 2022 Mineral Resource Estimate prepared by John
T. Boyd Company.
Darren Hall, MAusIMM, President and Chief
Executive Officer of Calibre, is a “qualified person” as set out
under NI 43-101 and has reviewed and approved the scientific and
technical information in this news release with respect to Calibre
and its assets. Mr. Hall has verified the data disclosed in this
news release and no limitations were imposed on his verifications
process.
United States Cautionary
Language
None of the securities to be issued pursuant to
the Arrangement have been or will be registered under the United
States Securities Act of 1933, as amended (the “U.S.
Securities Act”), or any state securities laws, and any
securities issuable pursuant to the Arrangement are anticipated to
be issued in reliance upon available exemptions from such
registration requirements pursuant to Section 3(a)(10) of the U.S.
Securities Act and applicable exemptions under state securities
laws. This press release does not constitute an offer to sell or
the solicitation of an offer to buy any securities.
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 & Labrador, one of the top
mining jurisdictions in the world. The Valentine Gold 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 Valentine Gold Project was released from
federal and provincial environmental assessment in 2022 and
construction commenced in October 2022.
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:
(i) expectations regarding whether the proposed Arrangement will be
consummated, including whether conditions to the consummation of
the Arrangement will be satisfied, or the timing for completing the
transaction and receiving the required Shareholder, regulatory and
court approvals, (ii) expectations regarding the potential benefits
of the Arrangement and the ability of the Combined Company
following the Arrangement to successfully achieve business
objectives, including integrating the companies or the effects of
unexpected costs, liabilities or delays, (iii) expectations
regarding additional mineral resources, project development and
future production, (iv) expectations regarding financial strength,
free cash flow generation, trading liquidity, and capital markets
profile of the Combined Company, (v) expectations regarding future
exploration and development, growth potential for Marathon’s and
Calibre’s operations, (vi) the Combined Company’s ability to
successfully advance the Valentine Gold Project and anticipated
benefits thereof; and (vii) statements as to management's
expectations with respect to, among other things, the matters and
activities contemplated in this news release.
Forward-looking statements necessarily involve
assumptions, risks and uncertainties, certain of which are beyond
Marathon’s control. These forward-looking statements are qualified
in their entirety by cautionary statements and risk factor
disclosure contained in filings made by Marathon and Calibre with
the Canadian securities regulators, including the Circular,
Marathon’s and Calibre’s respective annual information forms,
Marathon’s financial statements and related MD&A for the
financial year ended December 31, 2022, and its interim financial
statements and related MD&A for the three and nine months ended
September 30, 2023, and Calibre’s financial statements and related
MD&A for the financial year ended December 31, 2022, and its
interim financial statements and related MD&A for the three and
nine months ended September 30, 2023, all filed with the securities
regulatory authorities in certain provinces of Canada and available
under each of Marathon’s and Calibre’s respective profiles at
www.sedarplus.com. The risk factors are not exhaustive of the
factors that may affect Marathon’s and Calibre’s forward-looking
statements.
Marathon’s and Calibre’s forward-looking
statements are based on the applicable assumptions and factors
management considers reasonable as of the date hereof, based on the
information available to management of Marathon and Calibre at such
time. Marathon and Calibre do not assume any obligation to update
forward-looking statements if circumstances or management’s
beliefs, expectations or opinions should change other than as
required by applicable securities laws. There can be no assurance
that forward-looking statements will prove to be accurate, and
actual results, performance or achievements could differ materially
from those expressed in, or implied by, these forward-looking
statements. Accordingly, undue reliance should not be placed on
forward-looking statements.
Foot Notes
- Based on
consensus estimates (2025 – 2026E average) sources from Refinitiv,
public disclosure of Marathon and Calibre, respectively, and
available broker estimates
- Calibre cash
position and Marathon cash position, FX USD:CAD of 0.72:1 as at
September 30, 2023.
- See Mineral
Resource and Reserve Statements & Notes for Calibre and
Marathon at the end of this press release and at www.sedarplus.ca
and www.calibremining.com and www.marathon-gold.com.
- See Marathon news
release dated December 7, 2022.
Technical Data: Tables and
Notes
All estimates have been prepared using CIM (2014)
definitions. Mineral resources that are not mineral reserves do not
have demonstrated economic viability. Mineral Resources are
inclusive of Mineral Reserves. Numbers may not add due to
rounding.
Calibre Mining Mineral Resource and
Reserve Tables Nicaragua Mineral Resource and Reserve Statements –
December 31, 2022 (or as noted
below)1,2,3,4,5,6 All notes with
parametres are at the end of this press release.
|
Tonnage |
Grade |
Grade |
Contained Au |
Contained Ag |
|
(kt) |
(g/t Au) |
(g/t Ag) |
(koz) |
(koz) |
Probable Reserves |
6,269 |
5.37 |
16.25 |
1,082 |
3,275 |
El Limon Complex |
3,714 |
5.50 |
5.21 |
657 |
622 |
La Libertad Complex |
2,556 |
5.18 |
32.29 |
426 |
2,654 |
Measured &
IndicatedResources(Inclusive of probable
reserves) |
16,806 |
3.37 |
8.98 |
1,823 |
4,814 |
El Limon Complex |
13,313 |
2.97 |
2.05 |
1,270 |
877 |
La Libertad Complex |
3,493 |
4.92 |
35.38 |
553 |
3,937 |
Inferred Resources |
59,056 |
1.30 |
7.09 |
2,462 |
13,460 |
El Limon Complex |
1,597 |
4.26 |
3.27 |
218 |
167 |
La Libertad Complex |
6,433 |
3.65 |
41.19 |
754 |
8,487 |
Primavera (January 31, 2017) |
44,974 |
0.54 |
1.15 |
782 |
1,661 |
Cerro Aeropuerto (April 11, 2011) |
6,052 |
3.64 |
16.16 |
708 |
3,145 |
USA Mineral Resource and Reserve
Statements – December 31, 20227,8,9,10
All notes with parameters are at the end of this press release.
|
Tonnage |
Grade |
Grade |
Contained Au |
Contained Ag |
|
(kt) |
(g/t Au) |
(g/t Ag) |
(koz) |
(koz) |
Proven & Probable Reserves |
19,788 |
0.37 |
|
264 |
|
Pan Mine |
19,788 |
0.37 |
|
264 |
|
Measured & Indicated Resources (Inclusive of
probable reserves) |
98,212 |
0.88 |
6.44 |
2,780 |
9,399 |
Pan Mine |
33,790 |
0.33 |
|
359 |
|
Gold Rock (Mar 31, 2020) |
18,996 |
0.66 |
|
403 |
|
Golden Eagle (Mar 31, 2020) |
45,426 |
1.38 |
6.44 |
2,018 |
9,399 |
Inferred Resources |
11,643 |
0.75 |
4.43 |
281 |
765 |
Pan Mine |
3,246 |
0.40 |
|
42 |
|
Gold Rock (Mar 31, 2020) |
3,027 |
0.87 |
|
84 |
|
Golden Eagle (Mar 31, 2020) |
5,370 |
0.90 |
4.43 |
155 |
765 |
Notes: Calibre Mining Mineral Resource
and Reserve Statements
Note 1 and 2 - La Libertad Complex Mineral
Resource and Reserve Notes
- For additional information see “NI 43-101 Technical Report on
the La Libertad Complex, Nicaragua” dated March 29, 2022, and
effective December 31, 2021, which is available under Calibre’s
profile on www.sedarplus.ca
Note 3 and 4 – El Limon Complex Mineral
Resource and
Reserve Notes
- For additional information see “NI 43-101 Technical Report on
the El Limón Complex, León and Chinadego Departments, Nicaragua”
dated March 30, 2021 and effective December 31, 2021, which is
available under Calibre’s profile on www.sedarplus.ca
Note 5 – Cerro Aeropuerto (Borosi) Mineral
Resource Notes
- The effective date of the Mineral Resource is April 11,
2011.
- For additional information ‘NI 43-101 Technical Report and
Resource Estimation of the Cerro Aeropuerto and La Luna Deposits,
Borosi Concessions, Nicaragua’ by Todd McCracken, dated April 11,
2011.
Note 6 – Primavera (Borosi) Mineral
Resource Notes
- The effective date of the Mineral Resource is January 31,
2017.
Note 7 and 8 – Pan Open Pit Mineral
Resource and Reserve
Notes
- Mineral Reserves
stated above are contained within and are not additional to the
Mineral Resource, the exception being leach pad inventory. Mineral
Resources are based on 100% ownership.
- For additional
information “NI 43-101 Updated Technical Report on Resources and
Reserves, Pan Gold Project, White Pine County, Nevada” dated March
16, 2023, and effective December 31, 2022, which is available
under Calibre’s profile on www.sedarplus.ca
Note 9 – Gold Rock Mineral Resource
Notes
- The effective date of the Mineral Resource is March 31,
2020.
Note 10 – Golden Eagle Mineral Resource
Notes
- The effective date of the Mineral Resource is March 31,
2020
Marathon Gold Mineral Resource and
Reserve Table1,2 All notes with
parametres are at the end of this press release.
|
Tonnage |
Grade |
Contained Au |
|
(kt) |
(g/t Au) |
(koz) |
Proven & Probable Reserves |
51,600 |
1.62 |
2,700 |
Marathon |
21,300 |
1.56 |
1,100 |
Leprechaun |
15,100 |
1.73 |
800 |
Berry |
15,100 |
1.60 |
800 |
Measured & Indicated Resources(Inclusive of
Mineral Reserves) |
64,624 |
1.90 |
3,955 |
Leprechaun |
15,589 |
2.15 |
1,078 |
Sprite |
701 |
1.74 |
39 |
Berry |
17,159 |
1.97 |
1,086 |
Marathon |
30,090 |
1.76 |
1,701 |
Victory |
1,085 |
1.46 |
51 |
Inferred Resources |
20,752 |
1.65 |
1,100 |
Leprechaun |
4,856 |
1.58 |
246 |
Sprite |
1,250 |
1.26 |
51 |
Berry |
5,332 |
1.49 |
255 |
Marathon |
6,984 |
2.02 |
454 |
Victory |
2,330 |
1.26 |
95 |
Notes: Marathon Gold Mineral Resource
and Reserve Statements
- The Mineral
Resource has an effective date of June 15, 2022
(Marathon/Leprechaun/Berry) and November 20, 2020
(Sprite/Victory).
- For additional
information see “Valentine Gold Project, NI 43-101 Technical Report
and Feasibility Study, Newfoundland and Labrador, Canada” dated
December 20, 2022, with an effective date of November 30, 2022
which is available under Marathon’s profile at
www.sedarplus.ca
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