Marimaca Copper Expanding Known Resources With New Drill Programme

• Marimaca Copper is developing the Marimaca oxide copper project in Northern Chile and focusing on exploration at the Mercedes site.
• Channel sampling at Mercedes has shown promising results, with intersections comparable to the original Marimaca deposit.
• The company is balancing exploration with advancing the definitive feasibility study and permitting process for the main Marimaca project.
• Mitsubishi Corp is a strategic partner, supporting exploration while prioritizing the development of the Marimaca oxide deposit.
• The company sees potential for resource growth and improved project economics through exploration success.

The Growing Case for Copper Investment

As the world accelerates its transition towards a more sustainable and electrified future, copper stands at the forefront of this transformation. This essential metal, known for its excellent conductivity and durability, is poised to play a pivotal role in the global push for green energy and infrastructure development. For investors, understanding the dynamics of the copper market and identifying promising opportunities within it has become increasingly crucial.

The Copper Demand Landscape

The demand for copper is being driven by several interconnected factors, chief among them being the global commitment to reducing carbon emissions and the subsequent push for electrification across various sectors. This shift is not limited to a single region or country but is a worldwide phenomenon, creating a sustained and growing demand for copper.

Hayden Locke, President and CEO of Marimaca Copper, highlights this trend:

"What's interesting is China was stockpiling copper, but they have started to reduce those stockpiles. One of the things I presented at the conference today was just the scale of transmission investment, particularly by China, but also the rest of the world, which will be the big driver of demand for copper over the next 5 to 10 years.

This observation underscores the global nature of the copper demand surge. Unlike previous commodity booms that were primarily driven by a single country's growth, such as China's rapid urbanization, the current copper demand is fueled by a concerted global effort towards electrification and sustainable infrastructure.

Supply Challenges & Market Implications

While demand projections for copper remain robust, the supply side of the equation presents significant challenges. Developing new copper mines is a time-consuming and capital-intensive process, often taking a decade or more from discovery to production. This long lead time creates a potential supply gap that could affect copper prices in the coming years. Locke notes:

"The only way it's going to be supplied is if the price goes up."

This statement reflects the industry consensus that higher copper prices are necessary to incentivize the development of new projects and expand existing operations to meet the projected demand.

Interview with Hayden Locke, CEO of Marimaca Copper

The Role of Exploration in Meeting Future Demand

Given the long development timelines for new copper projects, ongoing exploration efforts are crucial for identifying and developing the copper resources needed to meet future demand. Companies engaged in active exploration programs, such as Marimaca Copper, play a vital role in this process.

Marimaca's focus on exploration at its Mercedes site, adjacent to its main Marimaca oxide copper project, exemplifies this approach. Locke explains, "We have an exceptional exploration team who, now that the primary drilling is done at Marimaca, are not fully utilized. So we're now turning our attention back to this enormous land package."

This strategy of continuous exploration serves multiple purposes:

1. Resource Growth: It has the potential to increase the company's overall resource base, potentially extending mine life or increasing production capacity.
2. Project Economics: Discovering additional high-grade zones or satellite deposits can improve the overall economics of the main project.
3. Investor Appeal: Exploration success can serve as a catalyst for attracting new investors and maintaining interest in the company.

The Importance of Strategic Partnerships

In the capital-intensive copper mining industry, strategic partnerships can play a crucial role in project development. Marimaca Copper's partnership with Mitsubishi Corp illustrates this dynamic. While Mitsubishi supports exploration efforts, its primary focus is on developing the main Marimaca oxide deposit.

Locke elaborates on this relationship:

"Mitsubishi is a large non-operated investor in the copper industry in Chile. So, they don't have any project development or project direct operational experience. So they are backing us as a management team to take this project into production, and they would like to be a significant minority shareholder in that project as we go to development."

Such partnerships can provide crucial financial support and industry expertise, helping to de-risk projects and improve their chances of successful development.

Balancing Exploration & Development

For junior mining companies, striking the right balance between continued exploration and advancing flagship projects towards production is crucial. Marimaca Copper's approach demonstrates this balancing act.

While the company continues to focus on completing the definitive feasibility study and permitting process for its main Marimaca project, it is simultaneously pursuing targeted exploration efforts. This strategy aims to create additional shareholder value while maintaining progress toward production.

Locke outlines this approach: "We're still completely focused on taking the project through the definitive feasibility study, through permitting. None of that is changing. But we have an exceptional exploration team... As I alluded to, we're now turning our attention back to that enormous land package."

The Global Copper Landscape

The copper market is influenced by a complex interplay of global economic factors, technological advancements, and geopolitical considerations. While the long-term outlook for copper demand remains strong, short-term price fluctuations are common.

Recent market dynamics have seen copper prices retreat from all-time highs, settling around $4.40 per pound. However, industry experts and company executives like Locke remain optimistic about the copper market's long-term fundamentals.

Locke comments on the current market situation:

"Copper price down a little bit, but the long-term thematics are very much intact, and people want to see resource growth."

This perspective highlights the importance for investors to look beyond short-term price movements and focus on the underlying drivers of copper demand and the quality of individual projects and companies in the sector.

The Role of Copper in the Energy Transition

Copper's unique properties make it indispensable in the global push for renewable energy and electrification. Its use spans across various applications, including:

1. Renewable Energy: Solar panels, wind turbines, and energy storage systems all require significant amounts of copper.
2. Electric Vehicles: Electric cars use up to three times more copper than traditional internal combustion engines.
3. Grid Infrastructure: The expansion and modernization of electricity grids to accommodate renewable energy sources and increased electrification demand substantial copper inputs.
4. Energy Efficiency: Copper's excellent conductivity properties make it crucial for improving energy efficiency in various applications.

As countries worldwide strive to meet their carbon reduction targets, the demand for these copper-intensive technologies is expected to grow substantially, underpinning the long-term bullish outlook for copper.

Challenges & Considerations for Investors

While the copper market presents significant opportunities, investors should also be aware of the challenges and risks inherent in the mining sector:

1. Project Development Risks: Mining projects can face delays, cost overruns, and technical challenges during development.
2. Geopolitical Risks: Copper assets are often located in jurisdictions with political or regulatory risks.
3. Market Volatility: Copper prices can be volatile, influenced by global economic conditions, trade tensions, and currency fluctuations.
4. Environmental and Social Considerations: Mining companies are increasingly scrutinized for their environmental and social impacts, necessitating robust ESG (Environmental, Social, and Governance) practices.

The copper market is at an exciting juncture, with strong long-term demand drivers balanced against supply-side challenges. For investors, this presents opportunities to participate in a sector crucial to the global energy transition and infrastructure development.

Companies like Marimaca Copper, focusing on both near-term production and ongoing exploration, represent a balanced approach that can create value in this dynamic market. As the world continues its push towards electrification and sustainable development, copper will likely remain a critical component of the global economy, offering potential rewards for well-informed and patient investors.

The Investment Thesis for Marimaca Copper

• Strong project fundamentals: Chile's Marimaca oxide copper project boasts favorable economics and a strategic location.
• Exploration upside: Ongoing exploration at Mercedes and other targets could significantly increase resource base and project value.
• Experienced management team: Led by industry veterans with a track record of creating shareholder value through exploration and development.
• Strategic partnership: Backing from Mitsubishi Corp provides financial support and validates project potential.
• Favorable copper market outlook: Well-positioned to benefit from long-term copper demand growth driven by global electrification trends.
• Clear path to production: Advancing definitive feasibility study and permitting process for the main Marimaca project.
• Potential for resource growth: Exploration success could lead to extended mine life or increased production capacity.
• Actionable advice: Consider Marimaca Copper as a long-term investment in the copper sector, with potential for both near-term catalysts through exploration success and longer-term value creation as the project advances towards production.

The copper market is poised for significant growth driven by global electrification and infrastructure development trends. Marimaca Copper represents an opportunity to invest in a company with a balanced exploration and project development approach in this dynamic sector. While risks inherent to the mining industry remain, the long-term fundamentals for copper appear strong, supported by increasing demand and supply constraints. Investors should consider copper-focused companies like Marimaca as part of a diversified portfolio strategy to gain exposure to the ongoing energy transition and infrastructure boom.

Macro Analysis

The global push for electrification and sustainable development is reshaping the demand landscape for copper, creating a compelling macro thematic for investors. This trend is underpinned by several key factors:

1. Global Commitment to Carbon Reduction: Countries worldwide are setting ambitious targets to reduce carbon emissions, driving investment in renewable energy and electrification projects that are copper-intensive.
2. Electric Vehicle Revolution: The rapid growth of the electric vehicle market is significantly increasing copper demand, as EVs require substantially more copper than traditional vehicles.
3. Grid Infrastructure Upgrades: Modernizing and expanding electricity grids to accommodate renewable energy sources and increased electrification is driving substantial copper demand.
4. Urbanization and Infrastructure Development: Ongoing urbanization, particularly in developing economies, continues to drive copper demand for construction and infrastructure projects.
5. Technological Advancements: The increasing use of copper in high-tech applications, including 5G networks and data centers, is creating new sources of demand.
6. Supply Constraints: The long lead times for developing new copper mines, combined with declining ore grades at existing operations, are creating potential supply shortages.

These factors collectively indicate a sustained period of strong copper demand, potentially outpacing supply growth. This imbalance could lead to higher copper prices in the medium to long term, benefiting well-positioned copper producers and developers.

Locke's quote succinctly captures the essence of this opportunity:

"This is a global phenomena. We're not talking about one jurisdiction, we're talking about every jurisdiction, every developed jurisdiction in tandem, and that will create a wave of demand. If we're coming close to achieving any of these electrification goals, a lot more copper will be demanded."