Generation Mining Ltd.’s shares rallied Monday after the Canadian company finalized a deal to sell copper concentrate from its Marathon palladium-copper project in northwestern Ontario to resources giant Glencore PLC.
In morning trading, the shares were 9.4% higher, at 58 Canadian cents (42 U.S. cents), narrowing the year-to-date drop to 26%.
Under the offtake agreement, Generation Mining said that Glencore would buy an average of 50% of the total copper concentrate produced from the project, which is expected to be treated by Glencore’s Horne smelter in the neighboring province of Quebec.
The company said the term sheet includes expected specifications for the polymetallic copper concentrate to be produced at Marathon and treatment and refining charges. The agreement also provides additional benefits for Generation Mining, including metal payment terms, credit support from Glencore for the project’s environmental reclamation financial surety requirements, and working capital facilities, Generation Mining said.
Generation Mining said it has also finalized an offtake term sheet with a European copper group that will buy the balance of the concentrate produced by the Marathon project.
The company said that as it drives the project to construction and production, it expects to enter into final, binding offtake agreements for 100% of the production in conjunction with the completion of its project financing, which is expected later this year.