VANCOUVER, British Columbia, July 02, 2020 (GLOBE NEWSWIRE) -- Marimaca Copper Corp. (“Marimaca Copper” or the “Company”) (MARI.TO) is pleased to announce that Greenstone Resources II L.P. (“Greenstone”) has exercised its conversion option (the "Conversion") pursuant to the US$12.0 million convertible loan facility associated with certain of Marimaca Copper’s subsidiaries, Sociedad Contractual Minera Berta (“SCM Berta”) and Rising Star Copper Limited (“RSC”). These subsidiaries hold an interest in the Nora project, which consists of a processing plant and certain mining concessions, which are not connected to the Marimaca deposit. The conversion occurred at the RSC level, resulting in Greenstone now holding a 75% equity stake in the Nora project and Marimaca Copper holding the remaining 25% interest.
As a result of the Conversion, Marimaca Copper no longer controls RSC or SCM Berta and will de-consolidate those operations from its financial position and operating results effective June 30, 2020. Going forward, Marimaca Copper’s interest in RSC and SCM Berta will be accounted for using the equity method which should result in a strengthening of the Company’s financial position as a majority of the outstanding debt presented on the Company’s balance sheet is associated with SCM Berta. As at March 31, 2020, approximately $19.2 million of the Company’s outstanding debt was related to SCM Berta.
The Conversion is in line with the Company’s 19 April 2018 News Release which announced the strategic decision by the Company to focus exclusively on the Marimaca project, and for the unconnected Berta mine and Nora processing plant to be financed at the project level with no recourse or further dilution to Marimaca Copper. In February 2019, the Berta mine was sold to Santiago Metals Proyecto 4 Ltda. (refer to News Release dated 19 February 2019).