Generation Mining nears $1B copper project funding

Generation Mining (TSX: GENM; US-OTC: GENMF) has assembled almost all its financing for the $1-billion capex Marathon copper-palladium project in northern Ontario.  

The $969 million total includes $200 million this week from the Canadian Infrastructure Bank (CIB), $424 million in senior debt from several lenders and a $240-million streaming deal with Wheaton Precious Metals (NYSE, TSX, LSE: WPM). That leaves about $150 million to be potentially raised through equity this fall, according to Haywood Securities mining analyst Pierre Vaillancourt. Construction would start in next year’s first half.

“With permitting and most of the financing complete, Generation is in good position to move the project forward,” Vaillancourt said in a note on Tuesday. “With copper at about $6.30 per lb. and palladium at $1,250 an oz., economics for Marathon are compelling, supported by strong copper revenues.” 

Marathon, located on the north shore of Lake Superior, would be one of Ontario’s first critical minerals projects to enter production in years with its planned 2028 start. It would be one of North America’s few sources of palladium for hybrid and electric vehicles, and a top-five copper producer in the province. Generation has locked in offtake agreements for half of its 42-million-lb.-a-year copper output to Glencore (LSE:GLEN) to and the rest to an undisclosed European integrated group.

Federal funds

“It’s really, really rare that a company with a $200-million market cap is attempting to build an almost $1-billion capex mine,” Generation Chairman Kerry Knoll told The Northern Miner in a video call Tuesday. “Fortunately, the federal government, which wasn’t really there historically to help the mining industry, has stepped up in a big way.”

The Generation deal with CIB follows the fund’s $55-million bridge loan for Torngat Metals’ Strange Lake rare earths project and Nouveau Monde Graphite’s (NYSE: NMG, TSX: NOU) $459-million debt financing earlier this year. The CIB, a government lender with $18 billion supporting development across Canada, has a renewed focus on junior miners and has pivoted this year from base metals and gold to critical minerals.

The CIB is providing $110 million in subordinated construction debt and a $90-million standby facility to cover overruns at Marathon. That was just days after Generation obtained the senior debt from Export Development Canada, ING Capital and Société Générale. The junior had previously secured $145 million in equipment leasing facilities.

“It’s definitely very helpful to have the subordinated debt from a Crown Corporation to validate the worthiness of this project,” President and CEO Jamie Levy said in the same video call. “The subordinated debt was necessary for this project to happen.”

28% IRR

Located near the namesake town, Marathon is about 300 km east of Thunder Bay. In addition to the copper, it would annually produce 168,000 oz. of palladium, 38,000 oz. of platinum, 12,000 oz. of gold and 240,000 oz. of silver, over its 13-year life, according to an updated 2025 feasibility study. The study showed an after-tax net present value of $1.07 billion and an internal rate of return of 28%, with estimated construction costs of $992 million.

Under the 2021 streaming deal, Wheaton will get the first 150,000 oz. of payable gold and 67% of yellow metal production over the remaining life of the mine. It will also receive 22% of payable platinum up to 120,000 oz. and 15% for the remaining life. Wheaton has provided Generation the first $40 million with the rest available during construction.

Glencore could process the concentrate at its Horne smelter in western Quebec and Canadian Copper Refinery outside Montreal – together Canada’s only complete copper-smelter and refinery chain.

Generation closed a $34.5-million bought deal in January and has $40 million in cash, according to its March earnings statement. Host community Biigtigong Nishnaabeg First Nation has also injected $750,000 under a February private placement. Generation’s executives are confident in the company’s ability to attract the needed investment based on due diligence undertaken by its institutional lenders since Marathon received its final construction permit in May 2025.

Shares in Generation Mining have gained 8.3% over the past month to 65¢ apiece on Thursday, valuing the company at $210 million. The stock has traded in a 52-week range of 28¢ to 92¢.

Ready to go

In anticipation of completed financing, Knoll said the company’s detailed engineering work started in January for a September preconstruction start. Generation and its construction contractor Ausenco Engineering Canada have been negotiating final pricing and making downpayments on certain long-lead items.

“We’re about one third of the way through the spend, in terms of negotiating a final price on things, for example, the heavy equipment, the transformers,” said Knoll. “The good news is that we’re a little bit under the feasibility estimates at this point. Of course, there is still more to go and there will be some negative surprises, there always are, but we’re getting some positive surprises, which is fantastic.”

Knoll said Generation has soil sampling, prospecting and mapping work planned this summer. The trend is 30 km long with mineralization spots along the way, including the Geordie and Sally deposits. He said it could hold potential for underground mining, as opposed to the outcrops discovered to date.

“Down the road, we would love to expand this mine so it could last for numerous generations but that’s a long way away from getting into production and is not permitted,” Levy said regarding potential on the company’s 364-sq.-km land package. “Our focus now is getting this project built from what is permitted in our environmental assessment.”