Marimaca Copper (TSX-V: MARI) - 98% Increase in Resource Size

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 Hayden Locke, President, and CEO, Marimaca Copper. Hayden has extensive experience as a mining executive with a significant part of his career spent in the development and leadership of successful LSE and ASX-listed mining companies. He has previously worked with J.P Morgan and Barclays Natural Resource Investments. As of 2018, he has served as the CEO at Emmerson Plc, a Morocco-based potash development company where he currently holds the Director position.

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). 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 northern Chile. It is a very unique development-stage copper project, with industry-leading low-capital costs, highly-competitive cash costs, and outstanding return on invested capital.

Recently, the company identified broad-width and higher-grade mineralization at the Marimaca project. These widths and grades were much higher than expected. The discovery serves as an opportunity for the company to grow the project’s scale. Due to the recent findings, the company has decided to delay the Feasibility Study. The company had anticipated that the results would have been captured in an updated open pit, however, in order to achieve the desired result, the company would need to carry out additional work. Following this, the company would ideally get into infill drilling in order to develop a resource, which would be captured in the open pit. The company is looking to develop the largest scale project that can be taken into the Feasibility Study. The results will ensure that the Marimaca project has a decent mine life and a potentially larger scale.

Drill Operations

The company is yet to quantify the amount of drilling that needs to be carried out. Based on rough estimates on the mineralized envelope, the company is looking to turn the resource into an indicated category, which would require a 50m by 50m drill spacing. It has several re-entry holes that can be drilled. Overall, the company is looking to drill between 15,000m-20,000m, which is expected to cost around $4M-$6M.

At the same time, the company is looking to move the other aspects of the project forward. It will infill drill the mine, and take the inferred resource to the indicated category in order to prepare it for the Feasibility Study. Essentially, the company has plans to conduct extensive drilling over the next 4-5 months. It anticipates that the targets will be met by the end of Q1 next year, going into Q2. This would lead to an updated resource which would serve as a logical point to start the Feasibility Study. The company is currently working internally with its geology team to put out some confident exploration targets. The exploration targets will be defined within the next two months. It is looking to ensure that the results are captured in an updated open pit.

Marimaca Copper is focused on the central-southern area of the Marimaca oxide deposit, which is represented by a red dotted line in the current pit outline. So far, the company has been successful in expanding the scale of the lower-grade halo around the model. There is a lot of material here that will be captured through a mine plan in the future.

The company is looking to initiate the infill drill program hoping that it will be captured in the updated MRE (Mineral Resource Estimate). In order to gain a high level of confidence, the company still needs to conduct extensive drilling along with met work. The company is fully funded to carry out the operations. It does not have any budget-related problems, and it intends to deploy the funds in a well-planned manner.

The company has demonstrated results from a couple of sections in order to highlight the importance of the drill holes. This serves as an outline of the PEA open pit, represented in brown-orange color. At the extension, the company hit 80m at nearly 0.8%. It is important to note that two-thirds of the grades were found directly below the open pit. The orange dotted line was previously interpreted as the top of the sulphides, and as a result, it wasn’t captured in the previous resource.

The drill hole led to the conclusion that a large portion of the area that was previously defined as sulphide is now coming out as mixed leachable material. The company anticipates that the deposit potentially contains high-value rock. It is looking to spend money in order to quantify the asset’s importance.

Targets 2022 and Beyond

The Marimaca project is very unique in the copper development space. It has a very low capital cost which carries significantly lower financial risks compared to other big projects that often require billions in capital costs. As a result, these companies need to bring in a strategic partner in order to move the project forward.

Marimaca Copper stands out among its peers as it has the capacity to self-finance the project. Since the asset is based in Chile, it offers low-cost operations with significantly lower execution risk. Furthermore, the project can be developed into a mine in a relatively short timeline. The typical timeline from discovery to development can be up to 20 years. In the case of the Marimaca project, the company can carry out a little bit of work in order to lock down the scale of development that will be built in the future. Following this, the company can move into a Feasibility Study with a much shorter development timeline, a unique selling point for the asset.

Many copper companies, especially the ones with big porphyry developments have a $200M market cap. It can be difficult to finance a billion-dollar equity check with a $200M market cap. It can also lead to substantial shareholder dilution. For Marimaca Copper, the current market cap is at $400M and the company has an equity check between $80M-$120M. As a result, it does require significant selling in order to finance the project.

Several groups have approached the company showing interest in the Marimaca project. This demonstrates that debt is available in the market. A lot of people are looking to gain exposure to copper and are finding it hard to enter the market. The company has demonstrated that the project can be financed through debt.   The interest in copper is evident from Sandfire Resources’ transaction on the MATSA Copper Operations, where $1.2Bn was raised in equity. The offering was oversubscribed by a factor of three, showcasing the fund availability in the market.

According to the company, the development stories that are currently in the market have much longer timelines. The risk appetite currently in the market is still lower than a producer landscape. However, if the company can demonstrate that the project can be taken to production, it will have funds available from the market. In this case, the company can fund the project without bringing in a strategic partner.

To find out more, go to the Marimaca Copper website