Marathon Gold Corp T.MOZ

Metals & Mining Gold

Marathon Gold Corporation is a Canada-based gold exploration and development company. The Company’s primary business focus is the exploration and development of its flagship asset, the wholly owned Valentine Gold Project, located in Newfoundland and Labrador, Canada. The project comprises a series of five mineralized deposits along a 32- kilometer system. Its prospects are located along the Valentine Lake Shear Zone and include Frank Zone, Rainbow Zone, Triangle Zone, Victoria Bridge, Narrows, Victory Southwest, Victory Northeast, and the Berry Zone. In addition to the Valentine Gold Project in the Central Region of Newfoundland and Labrador, the Company holds 100% interests in the Bonanza Mine, a former mine located in Baker County in northeastern Oregon, the Gold Reef property, an exploration property consisting of approximately 12 hectares of claims located near Stewart, British Columbia; and a 2% net smelter returns royalty on precious metal sales by the Golden Chest mine in Idaho.

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Marathon Gold Corp > Marathon Gold Closes US$185M Credit Facility

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Comment by Koko391on Apr 03, 2022 11:06am

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Post# 34571080

RE:RE:RE:Marathon Gold Closes US$185M Credit Facility

Here is the latest from CIBC. They consider closing the credit facility to be a POSITIVE development and maintain an OUTPERFORMER ranking (stock is expected to outperform similar stocks in the coverage universe during the next 12-18 months) with a price target of $4.25.

March 31, 2022
Earnings Update MARATHON GOLD CORPORATION
Sprott Credit Facility Closed

Our Conclusion

Marathon reported the closing of its US$185M term loan credit facility with Sprott Resource Lending, previously announced in July 2021. The facility is available to the company up to the end of March 31, 2025, subject to certain conditions, including Valentine’s release from federal environmental assessment.

Marathon is essentially funded for construction with the credit facility and its current cash balance of $87M (as at December 31, 2021). The company plans to procure additional capital (if required) through equity financing and/or equipment leasing. Overall, we view the update positively, as the company further de-risks its flagship Valentine Gold Project towards construction, which we expect to start in Q3/22. The next key catalyst is Valentine’s release from the federal environmental assessment (EA) and receiving other site-specific permits, expected in Q2/22.

Key Points

Key terms of the US$185M credit facility include:

Maturity on June 30, 2028, with a six-month extension option.
The facility will be drawn down in two tranches, US$125M at close and the remaining US$60M on December 31, 2022.
A US$4M initial advance fee is payable upon drawdown of the first tranche. The facility carries an annual interest of 7.75% plus the greater of (i) 3-month LIBOR, and (ii) 0.50%, payable quarterly. The fees and 75% of the interest accrued to the end of March 31, 2025 shall be capitalized.
An additional US$15/oz is payable on the first 1Moz of gold produced by Valentine.
The repayment schedule consists of ten quarterly principal repayments equal to 5% of the outstanding balance commencing on December 31, 2025, with the remaining amount due at maturity.