Marimaca Copper (MARI) - Osisko Investment Validates Project

Marimaca Copper Corp. is a Canadian copper company, focused on the Marimaca copper oxide project located in the Antofagasta region of Chile. The project is an open-pit, low capital and low-risk operation, boasting as the only major copper discovery globally in the last five years. The company, like various other Chilean mining companies, experienced relief as the country voted against a suggested new constitution. The rejection of the proposed new Chilean constitution by the country’s population has positioned the Chilean mining environment again as an attractive international investment opportunity.

The company announced on the 22nd of August 2022, that it had concluded its Infill and MAMIX drilling campaigns on the August. The drill campaigns consisted of a total of 38,570 m of drilling through 177 drill holes, with the final assay results of the campaigns outstanding. Marimaca Copper Corp. plans to publish an updated mineral resource estimate of the project at the end of Q3 2022. The mineral resource estimate will consist of all drilling data up to the end of June 2022, with drilling conducted thereafter planned to be incorporated in a mineral resource estimate update scheduled for early 2023.

Marimaca Copper Corp. announced on the 9th of September 2022 that Osisko Gold Royalties Ltd. had invested USD$ 15.5 million into the company for a 1.0% net smelter return (NSR) royalty on certain claims covering the Marimaca project. The company states that the significant financing in a challenging equity market will enable the buyback of various royalties held on the project. The previous royalties originating from previous purchase and option agreements total USD$ 6 million and will result in the total change in royalty burden on the project being approximately 0.39%. The investment will be used to advance permitting at the Marimaca project as well as the creation of a Definitive Feasibility Study for the project and general corporate and administrative expenses.

The company believes that the investment by Osisko Gold Royalties Ltd. shows the commitment of a leading public royalty company with well-respected technical expertise toward the Marimaca project.

Marimaca Copper Corp. is currently also underway with the completion of a proof-of-concept study led by 5Q Technologies. The proof-of-concept is aimed at evaluating the potential for improving and optimising the recovery of the deeper transitional material of the project’s MAMIX zone. The company has also completed its 2022 geotechnical diamond drilling campaign, which will be implemented towards its planned 2023 feasibility study.

Chilean constitution rejection

Marimaca Copper Corp., like various other Chilean mining companies, experienced relief as the country voted against a suggested new constitution. The rejection of the proposed new Chilean constitution by the country’s population has positioned the Chilean mining environment again as an attractive international investment opportunity. The now rejected constitution, which would have enabled the nationalisation of mining operations, shows that even though the population of the country wants change, they do not want it at such a high cost according to Locke.

“It's actually an incredibly strong result for Chile because what we know is that 80% of people voted for a new constitution, but 62% of people voted against what was considered to be quite a radical new constitution. Hence, what we know is that the people of Chile do want change, but they don't want change at any cost, which is an amazing message to send to the rest of the world. But Chile is not like many of the other countries in South America, it's far more sophisticated; the people understand what they're voting for, they think deeply about it and they're not going to make bad decisions for their country.”

Osisko Gold Royalties Ltd.

Marimaca Copper Corp. announced on the 9th of September 2022 that Osisko Gold Royalties Ltd. had invested USD$ 15.5 million into the company for a 1.0% net smelter return (NSR) royalty on certain claims covering the Marimaca project. The company states that the significant financing in a challenging equity market will enable the buyback of various royalties held on the project. The previous royalties originating from previous purchase and option agreements total USD$ 6 and result in the total change in royalty burden on the project being approximately 0.39%. Locke explains the investment as follows:

“The structure that we've come to with Osisko, allows us to monetize the value of that buyback right in a very tax-efficient manner and has not forced us to go out and raise equity in what is a very challenging market. Why did we do it now? Well, we did a huge drilling campaign this year, and like all junior companies that don't have any income coming in, money going out the door and the balance sheet is in constant need of topping up to ensure we have enough to continue to move the project forward.”

The investment from Osisko has placed the company in a stronger financial position, with Locke estimating that the company has a cash position of approximately USD$ 20 million. The investment not only lessens the previous royalty burdens but will also assist the company in continuing with its exploration initiatives.

“With the additional money, we are slightly over USD$ 20 million. We have some land payments remaining, option payments that will be the last lot of option payments that secure all of the titles for us, but really, the money that we're getting in will finish all of the project-related drilling, there's some condemnation drilling, there's some more Geotech, there's some geohydrological, but what we're really going to be focused on in the coming 6-9 months is moving forward on our permitting, and that's a huge work stream but we're really focused on that because that is the critical path for the project.”

The company believes that the investment by Osisko Gold Royalties Ltd. shows the commitment of a leading public royalty company with well-respected technical expertise toward the Marimaca project. Locke explains that through the Osisko Gold Royalties Ltd. investment, various parties that previously were not interested in the company have started to reach out, he accredits this to the inherent trust and respect associated with a large corporation such as Osisko Gold Royalties Ltd.

“Yes, and the other benefit is that Osisko is a very well-respected group and has an exceptional technical track record. We've already received several incoming phone calls saying, You weren't on our radar before but you are now as a result of their announcement, because if they liked the project then there's something for us to look at.”

Recent initiatives

Marimaca Copper Corp. announced on the 22nd of August 2022, that it had concluded its Infill and MAMIX drilling campaigns. The drill campaigns consisted of a total of 38,570 m of drilling through 177 drill holes, with the final assay results of the campaigns outstanding.

The company is currently underway completing a proof-of-concept study led by 5Q Technologies, which is aimed at evaluating the potential for improving and optimising the recovery of the deeper transitional material of the project’s MAMIX zone. The initial laboratory results of the study are expected in the near term and will allow the company to then, if it so chooses, advance to the next phase of the study with a larger sample size.

The company has also completed its 2022 geotechnical diamond drilling campaign, which will be implemented towards its planned 2023 feasibility study.

The company also announced that Leonardo Hermosilla had joined Marimaca Copper Corp. as the Vice President of Projects. Hermosilla will be based out of the company’s Santiago office and will provide senior technical leadership as the Marimaca Project advances toward the 2023 Feasibility Study and a construction decision. Hermosilla has more than 30 years of experience in mine development and construction. He previously held senior positions at Kingsgate Consolidated Ltd., Hatch Engineering and Barrick Gold Corp.

Future plans

Marimaca Copper Corp. plans to implement the Osisko Gold Royalties Ltd. investment towards the permitting of the Marimaca project as well as the creation of a Definitive Feasibility Study for the project and general corporate and administrative expenses. Locke explains that the company plans to implement the funds to expedite the project’s advancement.

“We're not going to go out and rush, we're not going to be super aggressive, but we are of the view that we want to move forward and ensure that we're shortening that timeline, especially on the permitting side: that is money well spent regardless of when you spend it. As I say to our team internally, every 6 months that we delay is another USD$ 50 million of NPV for us. Time is our enemy in terms of return for our investors.”

Locke explains that the company is not actively searching for other projects and that it remains focused to advance the project to production. The recently acquired funds are not planned to be spent on acquiring new projects.

“We've had a lot of people come in and offer, so we're always looking for opportunities to try and create value. But one of the things I say when people bring us opportunities is that I don't want to dilute what I think is one of the better if not the best undeveloped copper asset by looking at something else. It would have to be a pretty damn good project for us to consider doing something else.”

Marimaca Copper Corp. further plans to publish an updated mineral resource estimate (MRE) of the Marimaca project at the end of Q3 2022. The company is underway with the geological interpretation and resource modelling needed to enable the mineral resource estimate. The MRE will consist of all drilling data up to the end of June 2022, with drilling conducted thereafter planned to be incorporated in an MRE update scheduled for early 2023.

To find out more, go to the Marimaca website