Marimaca Copper gets $68M injection from South Africa’s Assore

Chile-focused Marimaca Copper (TSX: MARI) said on Tuesday that South Africa’s Assore Group, is investing $68 million in the company through its subsidiary Assore International Holdings.

Marimaca, which owns the namesake project in Chile’s Antofagasta region, said the strategic investment was divided into two parts. One is Assore’s acquisition of 9.4 million Marimaca shares from Ndovu Capital, an affiliate of Tembo Capital Mining, at a price of $4.50 per share, for a total of $43.4 million to Tembo Capital. 

The second part involves Assore’s participation in a non-brokered private placement by subscribing to 5.7 million units for a total of nearly $25.8 million.

After these two transactions, Assore International’s ownership of Marimaca would be 14.99% on a non-diluted basis and 18.07% on a partially diluted basis. Prior to the Tembo acquisition and the Assore private placement, the mining investment group had no holdings in Marimaca’s securities.

The Canadian copper explorer and developer also revealed that another, unnamed investor would participate in a private placement, subscribing for 1 million units at the same pricing terms as the Assore funding. This will bring in an additional $4.5 million.

The funds raised will be used to advance Marimaca’s flagship project, including a definitive feasibility study for the mine. They will also be allocated to cover exploration work at important targets within the Marimaca’s regional land holdings.

“When conflicting investment and project development timelines meet, especially with one of a company’s key investors, it can create challenges for management,” Marimaca’s president and chief executive, Hayden Locke, said in a statement. “With this transaction, Tembo has introduced a new investor that is perfectly aligned with the company’s longer-term objective, to be a copper producer.”

Since its discovery in 2016, Marimaca has more than doubled the deposit’s resource, most recently estimated at 200 million tonnes grading 0.45% copper for 900,000 tonnes of metal in the measured and indicated category. It also contains an inferred resource of 37 million tonnes grading 0.38% copper for 141,000 tonnes.

During the first six years of mining, the open-pit, heap-leach project is expected to deliver 40,000 tonnes of copper cathodes annually. Total recovered copper over the entire 12-year mine life is approximately 430,000 tonnes.

Shares in Marimaca jumped on the news and were up 6.3% at $4.08 each during mid-morning trading in Toronto. This leaves the company with a market capitalization of $386.1 million.