Stillwater Mining Company (NYSE: SWC) ("Stillwater") and Marathon PGM Corporation (TSX: MAR) ("Marathon PGM") announced that they have entered into a definitive agreement (the "Agreement") pursuant to which Stillwater, by way of a plan of arrangement, will acquire all of the outstanding shares of Marathon PGM. 

The deal to buy Marathon PGM is a 50:50 split of cash and Stillwater shares, based on Stillwater's closing share price at September 3, 2010. According to the terms of the transaction, Stillwater will exchange 0.112 common shares of its stock and Cd$1.775 in cash for each outstanding share of Marathon PGM. Under the provisions of the Agreement, Marathon PGM will also distribute shares of its subsidiary, Marathon Gold Corporation ("Marathon Gold"), to Marathon PGM shareholders before the exchange with Stillwater. Marathon PGM's platinum group metal ("PGM") assets include the Marathon PGM/Copper Project. Total consideration payable by Stillwater for the transaction is valued at approximately US$118 million or Cd$3.55 per Marathon PGM share, which does not take into account the value of the Marathon Gold shares.  

The transaction has been unanimously approved by the Boards of Directors of both companies and is expected to be completed by the end of November 2010 pending regulatory and exchange approvals, customary closing conditions and the approval of the Marathon PGM shareholders. Haywood Securities Inc. has provided an opinion to the Marathon PGM Board of Directors that the consideration to be received by Marathon PGM shareholders under the transaction is fair, from a financial point of view, to the Marathon PGM shareholders (other than Stillwater), and the Board of Directors of Marathon PGM recommends that holders of Marathon PGM shares vote in favour of the transaction. The officers and directors of Marathon PGM have executed support agreements in favour of the plan of arrangement.  

The transaction is expected to increase Stillwater's annual platinum and palladium production by approximately 40% within three years. Based on PGM and copper prices as of September 3, 2010, the transaction will be immediately accretive on a net asset value per share and reserve per share basis and is expected to be highly accretive to Stillwater's cash flow once the Marathon PGM/Copper Project begins production, which as noted is planned to occur within three years. Stillwater intends to fund the development of the Marathon PGM/Copper Project with current cash balances and future free cash flow but may seek long term financing if conditions and opportunities so warrant. The Marathon PGM/Copper Project reserves are situated on one of Canada's largest PGM-Cu resources, which Stillwater believes hold significant potential for further growth in reserves and future production.

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