Generation Mining (GENM.TO) finally has clarity on the Marathon PGM project as its joint venture partner Sibanye-Stillwater (SBSW) has elected to not exercise its back-in right on the project. As the feasibility study had been published a few months ago, Sibanye had to decide within 90 days if it wanted to exercise its back-in right to earn a 51% stake in the project but has now provided notice it won’t be doing that.
This means Generation Mining will have to continue to advance the asset on its own and permitting will be the next hurdle for GENM to take. As Sibanye doesn’t have operations in Canada, has no experience with the permitting process and isn’t exactly a mine building company, the decision to not take a more prominent role at this time doesn’t come as a massive surprise. Sibanye hasn’t disclosed either if it wants to continue to fund the activities on a pro rata basis, and time will tell how both partners will move forward.
The share price reacted negatively yesterday, likely also because the news was released mid-day, without a trading halt to ensure a more orderly market. The selling may persist for a little bit longer but it’s also encouraging to see millions of shares were mopped up around the C$0.90 level.
Disclosure: The author has a long position in Generation Mining. Generationis a sponsor of the website. Please read our disclaimer.
