Marathon Announces 2010 Q3 Financial Results

TORONTO, Nov. 12 /CNW/ - Marathon PGM Corporation ("Marathon" or the "Company") announced today its financial results for the period ended September 30, 2010.

At September 30, 2010, Marathon had cash and short-term investments of $8.1 million, compared to $10.9 million at December 31, 2009, with operations and project cash flows in the period amounting to $1.4 million and $5.9 million respectively.

On September 7, 2010, Marathon entered into an acquisition agreement with Stillwater Mining Company ("Stillwater"). Under the terms of the agreement, which is subject to shareholder, court and regulatory approvals and is expected to close in late November 2010, Marathon will:

    
    -   transfer certain capital assets, the rights and title to its
        Valentine Lake, Baie Verte, Steel Mountain, Finger Pond, and Gold
        Reef properties, and up to $6 million in cash to Marathon Gold
        Corporation ("Marathon Gold"), a wholly owned subsidiary of Marathon,
        in exchange for shares in Marathon Gold;
    -   reorganize the share capital of Marathon into two classes of shares,
        Class A and Class B;
    -   redesignate the common shares of Marathon into Class B shares;
    -   exchange, on the basis of 0.5 Marathon Gold shares for each Marathon
        Class B share, all of the common shares of Marathon Gold acquired by
        Marathon as a result of the asset transfers above plus all other
        common shares of Marathon Gold it owns and the Class A shares for the
        Class B shares; and
    -   list the common shares of Marathon Gold for trading on the Toronto
        Stock Exchange.
    

Following completion of this reorganization and the requisite regulatory approvals, a subsidiary of Stillwater will acquire the class A shares under a plan of arrangement for consideration consisting of 0.112 shares of Stillwater and $1.775 cash per class A share.

Exploration and development activity in the period ended September 30, 2010 was focused on:

    
    -   continuing to progress the Marathon PGM-Cu Project toward the
        acquisition of mining permits and continuing consultation with local
        communities, non-governmental organizations, and First Nations
        stakeholders impacted by Marathon's development plans;
    -   completing a drilling program at Geordie Lake and developing a
        revised mineral resource estimate for the deposit; and
    -   completing a highly successful drilling program at the Valentine Lake
        property, including drilling, trenching and geophysics at the
        Leprechaun Gold Deposit and two prospects to the northeast and
        southwest of Leprechaun Pond, with completion of a new mineral
        resource estimate expected before the end of the year.
    

Operational Highlights

Marathon area properties

    
    -   Continuing to make progress on permitting activities at the Marathon
        PGM-Cu project, with submission of the environmental assessment
        expected in the fourth quarter of 2010.
    -   Completing a winter drilling program at Geordie Lake and
        incorporating the results of this work in a new mineral resource
        estimate on the property, which resulted in total combined measured
        and indicated resources for the Marathon PGM-Cu and Geordie Lake
        properties of 147 million tonnes grading 1.0 g/t PGM's and gold and
        0.27% copper, representing an in-situ resource of 4.9 million ounces
        of PGM's and gold and 882 million pounds of copper.
    

Valentine Lake property, central Newfoundland

    
    -   Completing the first phase of an initial drilling program of 33 holes
        over 4,000 meters at the Leprechaun Deposit, part of the Valentine
        Lake property optioned in December 2009 from Mountain Lake Resources
        and host to an existing inferred mineral resource of 443,000 ounces
        of gold. The results of this work exceeded our expectations and
        returned numerous occurrences of visible gold and several wide, high
        grade intercepts, including 38.3 g/t gold over 9 meters.
    -   Completing a summer work program at Valentine Lake in September 2010,
        consisting of 6,910 meters of drilling over a total of 62 holes;
        trenching and channel sampling; geophysics; and prospecting. This
        program was aimed at both enhancing a resource estimate planned for
        the end of the year and identifying additional mineralization and
        high priority drilling targets. Drilling intercepted multiple
        instances of near-surface gold mineralization situated in multiple
        stacked lenses and a high-grade zone 200 meters in length.
    

Financial Highlights

Marathon's losses before tax for the three and nine months ended September 30, 2010 and 2009 are set out below.

    
                               Three months ended     Nine months ended
                                   September 30          September 30
                                       2010       2009       2010       2009
    -------------------------------------------------------------------------
                                          $          $          $          $

    Exploration expenses              6,027     77,414     12,243    444,424
    -------------------------------------------------------------------------

    Operating expenses:
      General and administrative
       expenses                     871,820    340,420  1,875,536  1,358,924
      Depreciation                   35,958     28,434    110,210     83,533
      Stock based compensation            -          -    407,156    194,947
    -------------------------------------------------------------------------
                                    907,778    368,854  2,392,902  1,637,404
    -------------------------------------------------------------------------

    Operating loss                  913,805    446,268  2,405,145  2,081,828
    -------------------------------------------------------------------------

    Interest income                 (16,911)   (14,254)   (42,909)   (75,199)
    Foreign exchange (gain) loss       (358)       (43)       471        493
    -------------------------------------------------------------------------

    Loss before income taxes        896,536    431,971  2,362,707  2,007,122
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Marathon's accounting policy is to capitalize property acquisition and exploration costs on its properties once a mineral resource estimate has been completed. The significant decrease in exploration expenses in 2010 reflects Marathon's practice of capitalizing exploration costs on properties with existing NI43-101 compliant mineral resources, where virtually all of the Company's efforts have been focused this year. The significant increase in general and administrative expenses in the quarter is due to legal, tax, accounting and advisory fees associated with the transaction with Stillwater.

This press release should be read in conjunction with Marathon's unaudited interim consolidated financial statements for the period ended September 30, 2010 and the related Management's Discussion and Analysis, both of which are available on www.sedar.com. Marathon's Web site may be found at http://www.marathonpgm.com.

About Marathon

In September 2010, Stillwater Mining Company and Marathon announced an acquisition agreement with Stillwater acquiring Marathon's platinum group assets and Marathon to spin out its gold assets. Subsequent to shareholder approval of the proposed Stillwater transaction, the new company will be called Marathon Gold Corporation. The Valentine Lake Gold Project will be the main focus of resource development, and the Finger Pond and Baie Verte Projects will be exploration properties.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Except for statements of historical fact relating to the Company, certain information contained herein constitutes "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", "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. 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. These risks and uncertainties include but are not limited to those identified and reported in Management's Discussion and Analysis for the year ended December 31, 2009.

Other than as specifically required by law, we undertake 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.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

    
    On Behalf of Marathon PGM
    "Phillip C. Walford"
    Phillip C. Walford
    President, Chief Executive Officer
    [email protected]

    416-987-0711
    

%SEDAR: 00020574E

For further information: David Leng, P.Geo.: [email protected], Tel: [phone], Fax: [phone]