Stillwater Mining Company's takeover of Marathon PGM could create an entity capable of achieving sizeable annual pgm production, according to a new report.

The American firm has made an equal offer of stock and cash worth $118 million for its Canadian target, while also potentially taking up an interest in Marathon's gold properties.

If the deal goes through, minefund.com notes that Stillwater will gain access to Marathon's copper-palladium project, which is located in north-west Ontario.

The news provider speculated that the new company could subsequently offer pgm output of 815,000 oz per year by 2013, at an estimated cash cost of $291/oz.

"On the face of it, the deal is a steal for Stillwater," read one section of the report.

"The pgm-only reserve base would be around 25 million ounces, offering a stellar mine life of 31 years. Marathon has platinum and palladium reserves of 4.5 million ounces."

Stillwater Mining Company, which is the only platinum and palladium producer in the US, currently has two major mining projects - the flagship Stillwater Mine and the East Boulder Mine.

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