TSX-listed Marimaca Copper's 100%-owned project of the same name in Antofagasta, Chile is advancing towards production of high-quality copper cathode at a rapid pace.

The company is currently focused on delivering a definitive feasibility study for late 2024, with president and chief executive, Hayden Locke and his team "targeting the 50,000 tonnes per annum mark".

Since it was originally discovered in 2016, Marimaca has built up a land package in the region of 66,000ha and completed over 120,000m of drilling.

ESG star in the making

The project is envisaged as a sustainable green-copper mine that will use recycled water from the nearby Bay of Mejillones and be powered by renewable energy. Carbon impacts will be further reduced through the application of heap leaching processing methods, while there will also be very minimal impact on biodiversity, given the project's location in Chile's arid Atacama coastal desert region.

A low strip ratio means less diesel per tonne of material needing to be moved to get the copper to the back end of the project, and an SXEW processing method means the smelting and refining of copper concentrates stage is skipped, so lowering the overall carbon intensity. In addition, with most of the project land government-owned or controlled, the potential for conflict or need for negotiations with other land users is much diminished.

The Antofagasta region is set up for mining and offers ready access to key infrastructure, translating to a strong execution risk profile for the project. Specifically, the conurbations of Mejillones and Antofagasta are just 25km and 40km distant respectively, meaning paved road access to a rich reservoir of skilled labour and no requirement for a project camp to house the workforce. Mejillones is one of the largest mining support ports in Chile and responsible for significant sulphuric acid imports, as well as exports of copper cathode and concentrate from mines nearby.

Importantly, the town is also blessed with several permitted seawater intake systems used for cooling by its power plants. This has given rise to an option agreement for Marimaca to secure future seawater supply, further elevating the project's ESG credentials in a region where freshwater is a precious commodity.

Extended mine life potential

Marimaca is primarily an iron oxide copper gold (IOCG)-type deposit, which is unusual for the Chilean Coastal Cordillera where it is hosted. And an IOCG deposit of this scale is highly anomalous, such that the project can be considered a truly ground-breaking endeavour.

The company's regional exploration strategy for 2024 is informed by a comprehensive review and reinterpretation of historical geological information and will lead to it further exploring the discovery potential of the Sierra de Medina property block, which, along with satellite discoveries made in 2021, is serving to reignite the exploration pipeline and provide credible optionality for an extended mine life from 14-16 years to 20-25 years.

Sierra de Medina is located some 25km from the primary Marimaca Oxide deposit, which is continuing to advance towards production in strategic partnership with cornerstone long-term investor Mitsubishi Corporation and has multi-national engineering firm, Ausenco leading its definitive feasibility study (DFS).

Alluring economics

Locke characterised the cost and execution risk of Marimaca as low, with the project marked by industry-leading CapEx and manageable OpEx.

He explained that the expectation for Marimaca is that it will be no more than $10,000/tonne in respect of capital intensity, which makes for good reading. This is largely down to the fact that it is at a low elevation on the coastal belt and not in the higher cost high Andes, a location that demands larger scale projects to hit the necessary economic thresholds.

The company is fully financed for all permitting and DFS requirements, with Locke describing the project as "incredibly robust".

By way of evidence, he pointed to preliminary economic assessment downside scenarios that were run based on copper at $2.50/lb, which still delivered an internal rate of return of 20%, a figure the president and chief executive described as "remarkable".

Informed by such downside protection, Locke is confident on the financing aspect. Further to the DFS, the intention is that the next phase of capital costs will "take us into further de-risking, detailed design and engineering, infill drilling, and potentially a pilot plant", he explained.

This tightening up of DFS estimates will allow for momentum to be continued towards a final investment decision.

Copper/Chile pedigree

In respect of management capabilities and the provision of reassurance that Marimaca has both copper and Chile pedigree to see the project to fruition, the company has the key building blocks in place.

The board makeup includes Clive Newall, one of the founders of Canadian copper giant, First Quantum Minerals, while vice president of projects is Leonardo Hermosilla who has over three decades of experience in mine development and construction in Chile.

Don't believe the hype

Locke views Chile as an "amazing jurisdiction", an assessment backed up by Mining Journal's investment risk index which awards it ‘BBB', making this well-established tier one location number one in Latin America.

He is also sanguine regarding concerns about the current Chile Government's much publicised rhetoric around nationalisation and higher taxes in pursuit of a greater share of the mining pie.  The Gabriel Boric-headed administration's vote-winning oratory not amounted to anything substantial to date that could provide cause for concern.

Moreover, regardless of political stripes, all parties share an understanding of the importance of mining as a driver of socio-economic development in Chile, and that it would be self-defeating to turn the screw on foreign investment in such a way that plugs were pulled on projects at scale. In addition, as within all mining countries, prevailing forces differ region by region. For its part, Marimaca benefits from being in Antofagasta, the largest copper-producing province in the world's largest copper-producing country.

That said, Locke is cognisant of the need to engage early and proactively with both politicians and what is a highly unionised workforce to ensure win-win outcomes, and so the company prioritises transparency in a jurisdiction that values and demands it.

Copper inherently strong

As to wider forces at play, Locke is a firm believer in the copper price rise to come, and that higher prices will sustain in the medium to long term. That the increase has taken longer than anticipated to start he puts down to the global macroeconomic climate.

The chief executive believes the copper price narrative is driven by significant underinvestment in supply and a lack of new discoveries. And he considers the fact that copper has held its price – rather than plummeted like some other metals in the face of the global economic malaise – is a testament to this profound supply side story.

The Marimaca Copper Project is the only globally significant copper discovery in the last ten years and comes replete with substantial exploration potential. It has already been considerably de-risked, with the management team now focused on permitting, delivering the DFS, and bringing together the right team. As it moves the project forward in the best risk-adjusted manner, it remains on track for production in 2028.