Marimaca Copper (TSX-V: MARI) - 2023 Focus is on Permit and DFS

Marimaca Copper Corp. is a Canadian copper exploration company focused on exploring and developing new copper resources to supply an increasing global demand for this essential commodity. The company's flagship asset is the Marimaca Copper Project in Chile's Antofagasta region. It is the only copper discovery made globally within the last five years. It is a low-risk project that offers substantial exploration potential.

Matt Gordon caught up with Nico Cookson, Head of Corporate Development, Marimaca Copper. Mr. Cookson joined Marimaca Copper in September 2021. He has significant experience in the mining sector across capital markets, principal investment, and advisory. Prior to joining Marimaca, he worked in mining-focused private equity at Appian Capital Advisory LLP and in the mining investment banking group at RBC Capital Markets.

Company Overview

Marimaca Copper (formerly known as Coro Mining Corp.) is a copper exploration and development company. It was founded in 2004 and is headquartered in Canada. The company is listed on the Toronto Stock Exchange (TSX-V: MARI) and the OTC Markets (OTCQX: MARIF). Compañía Minera Cielo Azul Ltda, Minera San Jorge S.A., Minera Coro Chile Limitada, Minera Rayrock Ltda., Machair Investment Ltd., Rising Star Copper Limited, and Sea To Sky Holdings Ltd. are the company's subsidiaries. The Marimaca Project has been one of the most important copper oxide discoveries in northern Chile for over a decade. The company believes that it has the potential to be one of the best open-pit copper oxide projects globally.

Marimaca Copper is developing the Marimaca Oxide Project in Antofagasta, Chile. The October 2022 resource update led to a big step change in the project’s overall scale. According to the company, the change in scale generated a lot of interest in the market. In recent times, there has been a lot of interest in the copper space as the market is expected to pick up in early 2024. Currently, Marimaca seems to be one of the only quality projects out there with a reasonable production timeline. The company is looking to deliver copper in 2026-2027. The company is engaging with existing and potential investors that are looking for ways to play the copper development space.

Chile’s Mining Landscape

Following last year’s September referendum, a lot of pressing questions around Chile have settled down. The voting decision resulted in significant investor comfort. It is important to note that there are still questions about the tightening of the permitting regime in Chile and how easy it is to get projects permitted, given the challenges faced by other projects along the process. In general, people are feeling comfortable with the idea of investing in Chile. The new royalty regime is currently going through the process of gaining control and has become a lot more muted relative to the first iterations that were previously seen. In recent times, an increasing number of people are getting comfortable with Chile as an investable jurisdiction.

Recent Developments

One of the major developments last year was the water options agreement. This agreement guarantees a life of mine water supply for the Marimaca Project. Water is a sensitive issue in Chile for a lot of projects, and acquiring this agreement serves as a big de-risking milestone for the company. From an ESG (Environmental, Social, and Governance) perspective, the company will be using seawater for the life of operations, as a result, having a secured water supply once it reaches the build phase and operational phase is a landmark achievement for the company.

In 2022, the company carried out a 41,000m infill drill campaign. Half of the drill results were used to update the resource in October. Notably, the first half of the results were targeted at growing tons at the Marimaca oxide project, which the company successfully achieved. The company delivered a big step change in the scale of the resource. The remaining drill results weren’t captured in the September resource. The company intends on updating its models to publish a new resource in April. It does not expect a massive change in the scale of the resource. The company will be focused on converting all the existing Inferred tons into the M&I (Measured and Indicated) category for mine planning purposes. Sergio Rivera, the company’s geologist along with the mining team are working diligently on resource conversion.

The company is also working towards submitting permitting applications and the DFS (Definitive Feasibility Study) towards the end of the year. Permitting represents the critical path for Marimaca, and the company is focused on it this year. Half of the time is being spent on de-risking-type work streams. By the end of 2022, the company delivered a surprising drill hole called  MAD-22 which was found to intersect sulphides just down dip of the oxides on the eastern margin of the pit. Notably, this was the first time the company observed a decent sulphide intersection at the Marimaca project.

Given the scale of the oxide deposit, the company anticipated the presence of a sulphide feeder zone, which was first seen in the MAD-22 drill hole. The company is looking to follow up with a small sulphide exploration program in 2023 that will be executed alongside the planned resource update.

While it’s still early days for the sulphide exploration at Marimaca, the company is going full steam ahead on the oxide as it seeks to enter oxide production by 2026. Depending on the size of the sulphides, this could be a potential game changer for the company. It has allocated a small budget for the same in the first half of 2023. The majority of the cash position this year will be spent on de-risking the work streams. The company is trying to gain a better understanding of the sulphide component.

According to the company, if the asset was in production, it would use the cash flow from the operations to fund a broader exploration program. Notably, there is a big land package around Marimaca that is yet to be explored. It is important to note that this is a new discovery that was made in 2016, and the team has done a commendable job in putting together a fantastic land package 25km north and south along the coast of the project itself. However, there’s still a lot more work to be done, including exploration. The company is focused on continual de-risking of the oxides because it is one of the most important aspects of the project from a present value perspective.

From a strategy purview, the company is looking to demonstrate that the project is starkly different compared to the post-PEA (Preliminary Economic Assessment) stage. The PEA was an exceptionally robust study with 36,000t of copper cathode production for a 12-year mine life. It had a very high margin along with first-quartile cash costs. Given the nature of the orebody itself, accessing the tons would make for a very low-cost operation as the strip ratio is below 1:1.

Going into the DFS, the company is looking to demonstrate that the asset has a significantly larger scale. On the oxides front, the company has a scope to carry out a 55,000t-60,000t yearly production for a 15-year mine life. It anticipates that there could potentially be something larger sitting below the oxides that is yet to be discovered. The project features a big system which was the result of a significant mineralizing event. Over the past 12 months, the company has been focused on development. The mining team is excited to kickstart exploration again.

Based on the final draft of the production profile, the company will determine where the royalty will come from. If the production is below 50,000t, the company will fall under the existing tax regime. It’s an economic trade-off between producing 60,000t-70,000t versus 49,000t. This is because of a proposed law in Chile where once the yearly production surpasses 50,000t, the average royalty load would increase from 2% to 5%. It is important to note that the law is yet to be enacted.

Marimaca Copper is looking forward to 2023. The company signed a deal with Osisko Mining last year, where the latter would finance the operations. Marimaca Copper is all set from a financial perspective and it is looking forward to kickstarting the sulphide exploration program and publishing a new resource.

To find out more, go to the Marimaca Copper website