Marathon Gold Corporation closed a 6.5 year US$185 million term loan credit facility with Sprott Private Resource Lending II (Collector-2) LP (“Sprott”). The proceeds of the Facility are to be used for the construction, development and working capital requirements of Marathon’s Valentine Gold Project located in the central region of Newfoundland and Labrador.

Matt Manson, President and CEO of Marathon, commented: “We are very happy to be announcing today the closing of our previously disclosed US$185 million credit facility with Sprott. This term loan has an attractive overall cost of capital for Marathon, and a carefully tailored structure designed to maximize our success at the Valentine Gold Project. Our financing approach for Valentine from the start has been to arrange the appropriate balance of traditional term loan debt and equity, without excessive leverage. With this Facility, we have now achieved the debt component of our strategy with an experienced and highly commercial resource lender. Following upon the Project’s recent release from provincial environmental assessment, today’s news represents another important milestone in the development of the largest gold mining project in Atlantic Canada.”

Greg Caione, Managing Partner of Sprott, commented: "As one of the largest investors and lenders dedicated to the natural resource sector, Sprott is excited to partner with Marathon’s experienced and accomplished management team. Our financing of Marathon is consistent with our strategy to provide innovative and flexible capital to maximize the value of exceptional projects and support world-class management teams. We look forward to partnering with Marathon on its journey to becoming a Canadian mid-tier producer. Valentine is an exceptional project in an excellent jurisdiction."

Key Facility Terms

• Senior secured term loan facility of US$185 million maturing on June 30, 2028 (the “Maturity Date”), with a 6-month extension option available.

• The Facility will be funded into a debt proceeds account (the “DPA”) in two tranches, being US$125 million at close (the “Initial Advance”) and US$60 million on December 31, 2022. Subject to conditions, the Facility is available to the Company up to the end of March 31, 2025 (the “Availability Period”) on a prescribed schedule. Such conditions include the Project’s release from federal environmental assessment, the perfection of security, a construction decision by Marathon’s Board of Directors and certain other customary covenants and terms.

• A fee of US$4 million (the “Initial Advance Fee”) is payable upon the Initial Advance. Upon first release, the outstanding amount of the Facility will bear an interest of 7.75% plus the greater of (i) 3-month LIBOR, and (ii) 0.50% per annum, payable quarterly. The Initial Advance Fee and 75% of the interest accruing to the end of the Availability Period shall be capitalized.

• US$15/ounce will be payable on the first 1 million ounces of payable gold produced by the Project. No other commitment or arrangement fees shall apply.

• The Facility is to be repaid in ten quarterly principal repayments equal to 5.0% of the outstanding balance commencing on December 31, 2025, with the remaining 50% due at the Maturity Date.