Chile’s New Copper Discovery, the Most Important in a Decade

(Image via Marimaca Copper Corp. Click to enlarge.)


Copper has long been an exciting market for traders to watch and prices are climbing steadily as producers work to meet the demand with their supply.

Canadian copper exploration Company Marimaca Copper Corp. (TSX: MARI, OTC: CROJF, Forum) is focused on exploring and developing new sources of copper to feed an increasing demand for this essential commodity.

It aims to do this by advancing its flagship Marimaca project in Chile. Located in a prime jurisdiction, where the Company is tapping into a unique oxide deposit.

Quickly becoming recognized as one of the most significant copper discoveries in Chile in ten years, and the only new discovery globally in five years, Marimaca represents a new type of deposit, one that challenges accepted exploration wisdom. The Company touts this asset as one that promises to open up new frontiers for discoveries elsewhere in its expansive land package, but also in Chile.

Upon the release of the Company’s Preliminary Economic Assessment (PEA), Chief Executive Officer, Luis Tondo stated - “Marimaca is a development stage copper project of the highest quality.”

When news of these PEA results around the largest Chilean oxide copper discovery in a decade hit, the Company’s stock price surged 119%.

The Company doubled down on this excitement in late September when its latest magnetic survey identified several large-scale magnetic anomalies believed to be prospective for Marimaca iron oxide copper gold (IOCG) style deposits. Could this be a new copper district in Chile? More on this impressive news later.

A Standout Project in the Global Copper Developer Universe:

Marimaca is a rare combination of industry leading, low, capital costs and lowest 15% all-in-sustaining cash cost of production. As a result, the returns on invested capital for Marimaca significantly outstrip the vast majority of its peers in the copper world.


(Image via Marimaca Copper Corp.)

According to the PEA, released in early August 2020, its post-tax NPV8 is US$524m, or $10.8/share (CAD), which is more than three times its current share price of $3.15/share (CAD). It is clear that from its PEA, Marimaca represents compelling value without even taking into account the enormous exploration potential in its surrounding land package.

Simple open pit mining:

The average annual steady state copper production over the first six years at the Marimaca project is close to 40,000 tonnes of cathode. The total mine life is expected to be 12 years, with total recovered copper of approximately 430,000 tonnes over the life of mine.

Marimaca is hosted by intrusive rocks while the numerous manto deposits nearby are hosted by volcanics. There has been a lack of new copper exploration discoveries in Chile and this expanding resource represents a high-profile development project, as it is situated in the coastal belt at low elevation close to Antofagasta and Mejillones. Being located in a prime region like this could allow the Company the means to advance future development at a relatively modest capital investment.

There is also ample local infrastructure including roads, powerlines, ports, a sulphuric acid plant, a skilled workforce, and seawater for the Company to benefit from.

Focused exclusively on oxide mineralization, this open pit mine will see the highest-grade feed materials available in first five years of production resulting in improved payback and overall economics.

The average life of mine recovery is estimated to be 75.7% of total copper for heap leach and 40% for dump leach.


Phase 4 metallurgical testing program:

September is proving to be a busy month for the Company, who just released results from its Phase 4 metallurgical testing program, which confirmed previous recovery assumptions in its recently released PEA and also identified areas for optimization and improvement.

CEO Tondo explained for investors in the news release that these assumptions were in respect to copper recovery, which saw acid solubility ratios exceeded for virtually all samples.

“It was a particularly positive surprise that, in several cases, the recoveries exceeded the calculated maximum expected recovery (leaching potential) of the sample material. This is attributed to the presence of black copper oxide species, which have strong leaching profiles but did not report to the soluble copper assays. This provides us with a high level of confidence in our ability to achieve the recovery assumptions applied in the PEA.”


(Plan Showing Location of Drilling Samples Used in Marimaca Geomet Test Work Programs Phases 1 to 4. Click to enlarge. Image via Marimaca Copper Corp. Click to enlarge.)

He continued, “This is a significant de-risking milestone as we continue to move Marimaca towards future development and we are now planning for the next phase of studies, which we hope to commence before the end of 2020. In addition, we are continuing with our extensive exploration program to test the exciting potential in the Marimaca district.”

The Company’s leadership team designed Phase 4 to cover the metallurgical response of Marimaca much more broadly. This provided much more detail with respect to certain mineralisation sub zones and addressed some aspects of variability across the deposit. Each of the zones that the Company has dug into has different copper mineral species. The tests conducted during Phase 3 found that the overall leaching recovery exceeded the acid solubility ratio across all the samples.

This has led to the important step in developing a robust geo-metallurgical model – assessing the leaching characteristics in each subzone and determine their true leaching potential. It is a step that must consider the variability across the deposit, while also providing data to optimize future design.


(Summary of Total Copper Recoveries Vs Acid Soluble Copper Vs Leaching Potential in 0.3m Column Tests. Click to enlarge. Image via Marimaca Copper Corp. Click to enlarge.)

Testing was completed across the Marimaca deposit on three composite samples taken from a variety of areas, totaling four 1.5 metre columns. For Oxide and Combined samples, no additional NaCl was added; for the Combined and Sulphide materials, NaCl was added during agglomeration at a ratio of 15 kg/ton.

The Company stated that the results were favourable, with relatively fast leach kinetics and three of the four columns achieved total copper recoveries more than 70% within 60 days. The management team highlighted one sample that was comprised primarily of oxides (the dominant copper bearing mineral species in the deposit) reached recoveries greater than 80% within approximately 40 days.

In June 2020; Marimaca Copper released a Mineral Resource Estimate (MRE) for the Marimaca project of 70 million tonnes, with an average grade of 0.60% total copper, within the measured and indicated categories (approximately 420Kt of contained copper) and 40 million tonnes, with an average grade of 0.52% total copper, within the inferred category (approximately 224kt of contained copper).

These MRE results represent a nearly 100% increase from the MRE released in April 2018 and is some of the most solid proof that makes the project one of the most significant copper oxide discoveries in Chile in the last decade.

Metallurgy is one of the key de-risking milestones to address in the development of any mining project, and upon the release of that report, Marimaca’s Executive Chairman Michael Haworth commented that the Company had already completed multiple phases of test work to specifically assess the deposit’s metallurgical characteristics.

“The results have been very pleasing, especially with respect to the materials which approximately comprise the first five years of the potential mine life, which is the all-important payback period. The results show recoveries of over 84% of total copper, on average, in laboratory scale testing. Perhaps most importantly, these results exceeded the expected acid solubility ratio of the ore samples tested. This means that some of the minor copper bearing minerals, which weren’t initially identified as acid soluble, are also amenable to acid leaching and gives us great optimism for the potential for higher recoveries in an eventual heap leaching operation.”

A Potential New IOCG District:


(District Map Showing Seven High Potential Marimaca Style Deposit Targets. Map via Marimaca Copper Corp. Click to enlarge.)

During the Company’s summer work program, the Marimaca team flew a high resolution, drone mounted, magnetic survey at Marimaca, which highlighted a large magnetic anomaly in the interpreted down dip extension of the Marimaca Oxide Deposit.

After completing a broader magnetic survey, the Company discovered a regional structure greater than 25 km in size. Four large scale magnetic anomalies were confirmed inside, believed to be prospective for Marimaca style deposits. Each one as big as, or larger than the Marimaca Sulphide Target (175 million m3), meaning each potential target could have more copper than Marimaca, for which the recently completed PEA showed a post-tax NPV8 of US$584m or $10.8/share (CAD) on an unfunded basis – well in excess of its current share price of $3.15/share (CAD).

In the news release, Marimaca Copper’s Vice President of Exploration, Sergio Rivera commented that the clarity of the magnetic anomaly gave the team a clear impetus to expand the size of its survey to identify new targets with in this now expanded land package.

“The results are exceptional,” he said. “There are several large - scale magnetic anomalies adjacent to the important Naguayán Fault to the north of Marimaca which exhibit similar geometry and spatial relationship with regional structures. Perhaps most exciting is that many of the target areas are covered by gravel, suggesting that any near surface oxide mineralization associated with these magnetic anomalies is likely to be blind.”

He continued, “We believe we have the potential to discover a new copper district in Chile and we are mobilizing geological teams for follow-up work prior to drilling. At the Marimaca Sulphide Target, we will complete an Induced Polarization survey to further define the best locations for drilling. We will also commence surface geological work to help prioritize the new targets identified in the magnetic survey for follow-up work and we look forward to drill testing these as soon as possible.”

The success of this exploration work has allowed the Company to develop an exploration model which it believes can target repetitions of Marimaca’s IOCG style mineralization in its claims package.


Looking ahead:

With the success of the Phase 4 metallurgical testing program complete, Marimaca now has a robust geometallurgical model which, in turn, will allow a detailed life of mine analysis of metallurgical recoveries for future studies.

The Company intends to focus on optimizing this very exciting copper project, as it moves into the next phases of study. Phase 5 is expected to commence in Q3 2020.

Overseeing this fresh vision is Marimaca’s new President, Hayden Locke, who was appointed to the role in July 2020.

A highly experienced mining executive, he spent the latter part of his career developing and leading successful LSE and ASX-listed mining companies. Prior to that, he worked in investment banking with J.P. Morgan and mining private equity with Barclays Natural Resource Investments.

In a media update, he called this an exciting time in the Company’s development.

“The Marimaca Copper Project is one of only a handful of new copper discoveries that has been made in the last five years, and the ongoing, untested, exploration potential within the Company’s claims package, as evidenced by the recent announcement with respect to the magnetic anomaly at the Marimaca Project, is extremely compelling.”

He added, “I look forward to working with [Executive Chairman, Mr. Michael Haworth], Luis and the broader Marimaca Copper team as we continue to progress the Marimaca Project and assess the exceptional exploration potential in its extensive land package.”


Stock price surge:


(Marimaca Copper Corp. stock chart – March 2020 – Sept 2020. Click to enlarge.)

As mentioned earlier, Marimaca Copper came out of the infamous March 2020 market crater like a waking sleeping giant, peaking at $3.50 a share in early August and hasn’t looked back from that neighbourhood as it returns to its prime market territory with the returning popularity of copper.


Investment summary:

Marimaca’s large scale, simple, open pit deposit is an exciting means to tap into a unique oxide copper deposit with very low capital and operational costs. This region of Chile represents an unbeatable location with an abundance of skilled workers and easy access to all infrastructure required to build the project, which materially reduces the execution and financing risk of this project.

Marimaca represents a standout project in the global copper space with industry leading capital and operating costs providing economics that set it apart from its peers in the copper development universe.

To find out more about Marimaca Copper Corp. and its operations, visit the Company’s website here and watch the video below.




FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.