Marathon Announces 2010 Q2 Financial Results

TORONTO, Aug. 11 /CNW/ - Marathon PGM Corporation ("Marathon" or the "Company") announced today its financial results for the period ended June 30, 2010.

At June 30, 2010, Marathon had cash and short-term investments of $7.3 million, compared to $10.8 million at December 31, 2009, with operations and project spending in the period amounting to $0.5 million and $3.2 million respectively.

Exploration and development activity in the period ended June 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 initial drilling program at the
        Leprechaun Gold Deposit within the Valentine Lake property, which is
        being followed up with a wide-ranging summer and fall program of
        drilling, trenching and geophysics at Leprechaun and two prospects to
        the northeast and southwest of Leprechaun Pond.
    

Marathon's current cash resources are adequate to fund its general and administrative expenses, exploration, and permitting activities beyond 2010.

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 Gold 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
        expectations and returned numerous occurrences of visible gold and
        several wide, high grade intercepts, including 38.3 g/t over
        9 meters.
    -   In May we commenced the next phase of work at Valentine Lake,
        including:
        -  a drilling program focused on the Leprechaun Gold Deposit, aimed
           at gathering sufficient data to support a new mineral resource
           estimate in the fourth quarter, and
        -  a detailed IP survey, followed by trenching and drilling, to be
           performed along the 2 km long structure hosting the Leprechaun
           Gold Deposit and the Sprite prospect, as well as the Valentine
           East prospect located 13 km along strike to the northeast.
        -  preliminary metallurgical testwork on a representative composite
           sample of ore grading approximately 4g/t gold, which suggest that
           recoveries over 93% may be achieved using a combination of gravity
           separation and cyanide leaching, with gravity recoveries ranging
           from 45% to 58%.
    

Financial Highlights

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

    
                                          Three months            Six months
                                         ended June 30         ended June 30
    -------------------------------------------------------------------------
                                       2010       2009       2010       2009
    -------------------------------------------------------------------------
                                          $          $          $          $

    Exploration expenses                615    194,772      6,216    367,010
    -------------------------------------------------------------------------
    Operating expenses:
      General and administrative
       expenses                     566,278    548,073  1,003,716  1,018,504
      Depreciation                   37,126     27,576     74,252     55,099
      Stock based compensation      407,156    153,791    407,156    194,947
    -------------------------------------------------------------------------
                                  1,010,560    729,440  1,485,124  1,268,550
    -------------------------------------------------------------------------

    Operating loss                1,011,175    924,212  1,491,340  1,635,560
    -------------------------------------------------------------------------

    Interest income                 (15,514)   (20,929)   (25,998)   (60,945)
    Foreign exchange loss               829        432        829        536
    -------------------------------------------------------------------------

    Loss before income taxes        996,490    903,715  1,466,171  1,575,151
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

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.

This press release should be read in conjunction with Marathon's unaudited interim consolidated financial statements for the period ended June 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

Marathon is exploring resource development potential in the immediate vicinity of the Marathon deposit to expand mine life of the planned large tonnage, open pit mining operation. The Marathon deposit is one of the largest PGM-Cu reserves in Canada and is expected to grow with development of additional nearby resources. Marathon's optimized P+P reserve of 91.45 million tonnes grading 0.832 g/t Pd, 0.237 g/t Pt, 0.085 g/t Au, 0.247% Cu and 1.44 g/t Ag, contains 2.44 million ounces of Pd, 696,000 ounces of Pt, 251,000 ounces of Au, 497 million lbs of Cu and 4.23 million ounces of Ag. The Geordie Lake Deposit, located 14km northwest of the Marathon PGM-Cu project, hosts a measured and indicated resource of 32.42 million tonnes grading 0.61g/t Pd, 0.04g/t Pt, 0.05g/t Au, 2.93g/t Ag, and 0.37% Cu, containing 641,000 ounces of Pd, 39,500 ounces Pt, 49,700 ounces Au, 3,057,800 ounces Ag, and 264 million pounds of Cu.

Marathon also has development and exploration stage properties in southeastern Manitoba and western Newfoundland, respectively. Marathon's management plans to build on its experience through the advancement of its properties and by examining other strategic opportunities. Mountain Lake has a 30% interest in the Valentine Lake Gold Property with an option to acquire the remaining 70% interest from Richmont Mines Inc. and a subsequent sub-option and joint venture agreement whereby Marathon PGM Corp. can earn a 50% in the property.

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]