Video: Marimaca Copper confirms Chile discovery as one of decade’s largest

Developer Marimaca Copper (TSX: MARI; US-OTC: CROJF) has released an updated resource estimate for its namesake project in the Antofagasta region of northern Chile, confirming it as one of the biggest copper discoveries of the past 10 years.

The Vancouver-based company reports a 98% increase in the measured and indicated resource tonnage of the Marimaca Oxide Deposit (MOD). It entails 139.6 million tonnes grading 0.48% total copper (0.3% acid soluble copper) for about 665,000 tonnes of contained metal.

The inferred resource grew by 92% to 82.7 million tonnes grading 0.39% total copper (0.16% acid-soluble copper) for about 323,000 tonnes of metal. The company used a US$4 per lb. copper price to estimate the new resource.

President and CEO Haydn Locke tells The Northern Miner the significant project milestone opens the door for the first phase development’s production scale to increase in future development studies. He suggests the company will consider higher production cases of 50,000 and 60,000 tonnes per year copper cathode in its feasibility study for the project, compared with the 36,000 tonnes per year life-of-mine average laid out in the June 2020 preliminary economic assessment (PEA).

Importantly, Locke says the high-grade core, which comprises the first six years of the PEA mine life, is expected to remain intact and accessible in a scaled-up development scenario. It includes about 50 million tonnes grading 0.7% total copper starting from surface in green oxide for about 350,000 tonnes of contained metal.

The mine plan calls for a low strip ratio of 1:1 maintained in constraining the pit shell, with all resources captured in a single continuous pit. “Low pre-strip and LOM strip ratio drive significant cost advantages,” says Locke in an interview.

“Our economic studies to date showed relatively low sensitivity to changes in the underlying copper price assumption, indicating a high return on investment of 2021 and 2022 drilling campaigns as they pertained to resource growth for the MOD,” says Locke.

In August 2020, the company released a PEA for Marimaca, which confirmed its potential to be a low capital cost, high-margin copper mine. Locke points out that it is significantly aided by its location with easy access to infrastructure, including power, transport and water, as well as a highly-skilled local workforce and simple logistics.

According to the PEA, Marimaca has a low capital cost of US$285 million. Operating costs also fall in the bottom 15% of the all-in sustaining cost curve at US$1.29 per lb. over the mine life, which provides a cash margin of 65% at US$3.70 per lb. copper.

Exploration upside

Locke sees clear opportunities for additional resource expansion. Marimaca says mineralization at the MOD remains open to the east, southeast, and down-plunge, while satellite targets discovered in 2021, less than 5 km away from the open pit – Mercedes, Cindy, and Robles – provide high-probability targets for further mine life extension.

The executive points to a significant amount of remaining 2022 drilling to be captured in another planned early 2023 resource update, targeting most of the tonnes to be captured in the measured and indicated categories to support the eventual upgrade to reserves.

Importantly, Locke says the team has identified the potential for a new, higher-grade green oxide zone in the shallow north and north-eastern areas of the MOD, which could have positive grade implications for the final resource estimate early next year.

“We have completed another 28,000 metres of drilling for which we are waiting on results. These will be released over the coming months and incorporated into a final MRE in early 2023, which will form the basis of our development plans for the project,” says Locke.

Sergio Rivera, Marimaca’s VP of exploration, made the initial discovery in 2017. His hunch that this area could host significant mineralization was confirmed only a few months later when a one-in-a-hundred-year rainfall washed the Atacama dust away to reveal the green-coloured mountainside at Marimaca.

Early in September, Osisko Gold Royalties (TSX: OR; NYSE: OR) acquired a 1% net smelter return royalty covering the then-known mineralization and prospective exploration areas that constitute the project for US$15.5 million.