Marimaca Copper is focusing its efforts on getting a detailed picture of the resources and value of its Marimaca copper project in northern Chile. Next year it will be better positioned to formally consider various development routes, or purchase or JV offers, CEO Luis Tondo said.
The Canadian junior, currently carrying out drilling work at the Atacama property, plans to announce a PEA in early 2020.
If put into production, Marimaca, which is 60km from Antofagasta city and benefits from nearby existing infrastructure such as power lines, roads and a seawater pipeline, could produce up to 70,000t/y of copper.
The average copper grade at the fracture controlled and intrusive hosted deposit – which Marimaca Coppersays challenges accepted exploration wisdom – is 0.5%.
Depending on scale, the open pit, heap leach oxide project would require US$400-450mn in initial investment, largely thanks to its location as well as factors like its relatively thin overburden.
“We’ve got the funds to finish this year’s study phase, in accordance with our plans,” Tondo said. “What I don’t want to do, for example, is to have to address a situation in which someone comes along who wants to buy and I still don’t know the exact quantity I have. I won’t sell if I don’t know what I’m selling.”
The company, which has also located primary sulfide mineralization at depth, expects to tighten its focus on development options – a sale or a JV or self-funding an initially smaller operation – next year.
Tondo added the company would consider offers from both mid-tier and bigger players. “We’re open to everything,” he said.
“The idea is to finish this stage of establishing the resources and to conduct the first economic evaluation of the project. From there, we’ll have an idea of what its potential is,” Tondo said.
Marimaca Copperis 70% controlled by two British investment funds, Greenstone Resources and Tembo Capital. The balance is held by institutional investors in Canada, and individual investors.
Copper prices, meanwhile, have been losing ground since April-May, with fallout from US-China trade tensions a factor. However, Moody’s investors service, in a report on Chilean corporate credit quality, says fundamentals are strong despite uncertainties related to future demand growth.
“While a global economic deceleration in 2019-20 will dampen copper demand accordingly, declining ore grades, and challenges related to water scarcity and energy intensity will continue to constrain copper supplies and increase production costs,” Moody’s said.
"Even so, a lack of new copper projects that will materially change supply in coming years will contribute to the deficit. Labor negotiations and no major production increase for 2019-20 will help keep copper supplies roughly balanced with demand.”