Mitsubishi invests $20 million in Marimaca Copper
Marimaca Copper Corp. [MARI-TSXV} on Wednesday announced details of a $20 million strategic equity investment by Japanese conglomerate Mitsubishi Corp.
Marimaca said it intends to use the proceeds to progress a definitive feasibility study and permitting workstreams at the company’s Marimaca Copper Project in the Antofagasta region of northern Chile.
The company said it will receive the equity investment by way of a non-brokered private placement. Mitsubishi will subscribe for 4.64 million units consisting of one common share and a common share purchase warrant priced at $4.31 per unit. Each unit will entitle Mitsubishi to purchase one additional share at an exercise price of $5.60 for 2.0 years after closing, which is expected to occur by July 11, 2023.
Following completion, Mitsubishi will hold 5.0% of Marimaca’s issued and outstanding shares, a move that will add to its existing holdings in the Latin American copper industry. The portfolio includes Escondida, Los Pelambres, Antamina, Los Bronces and Quellaveco.
In addition to the shareholding, Mitsubishi will receive certain rights including top-up rights as long as its ownership interest in the company is maintained at a minimum of 2.5%.
Marimaca shares advanced on the news, rising 2.25% or $0.09 to $4.09 on volume of 560,000. The shares are currently trading in a 52-week range of $4.50 and $2.45.
According to a preliminary economic assessment that was released in early September, 2020, Marimaca is a development stage project that is capable of producing 430,00 tonnes of recovered copper over a total mine life of 12 years for an all-in-sustaining cost of US$1.29 per pound.
Marimaca has said the project is expected to benefit from low upfront capital development costs, and due to the favourable geometry of the orebody and relatively simple oxide processing through SX-EW, management believes the project will have very competitive operating costs
The PEA envisages a conventional open pit mine that would focus on oxidized mineralization, one that would utilize a conventional heap leach, SX-EW processing circuit. The company recently said an average of 84% recovery of the total copper was obtained in bottle roll testing completed on ore samples taken from the mineral zones comprising the expected early years of mine life.
The company has previously said the project contains a measured and indicated resource of 70 million tonnes, with an average grade of 0.60% copper. On top of that is an inferred resource of 40 million tonnes of average grad 0.52% copper.
Marimaca expanded its land position, staking new claims and executing several option agreements over ground along strike to the north and south of the Marimaca deposit. With the execution of these agreements, the company said it controls most of the 25 kilometres of prospective strike length of the main regional structures that are believed to be the main controls for mineralization in the district.
“We are pleased that Mitsubishi shares our view that the Marimaca Copper Project is a unique, very high-quality development stage project,’’ said Marimaca President and CEO Hayden Locke. “Its location affords it several advantages including an expectation that it will be among the lowest carbon intensity copper producers in the industry,’’ he said. “It is one of very few new copper projects that has the potential to deliver near term production of meaningful scale.’’