Marimaca extends bornite zone, shares jump

Marimaca Copper (TSX: MARI; ASX: MC2) pushed farther into a high-grade bornite zone at Pampa Medina in northern Chile, strengthening the case that the satellite discovery could add scale to the wider copper district near its namesake oxide project.

Hole SPRD-05 cut 16 metres grading 5.7% copper and 62.6 grams silver per tonne starting at 704 metres downhole, including 4 metres of 11.32% copper and 144 grams silver from 706 metres, Marimaca said Monday in a statement. Nearby hole SPRD-04 returned 22 metres grading 1.97% copper and 9.2 grams silver from 610 metres. The new drilling sits inside a 3-km-by-1.5-km target area being tested on 150-metre spacing.

Thicknesses and grades “encountered to date across the Pampa Medina deposit are in line with or better than other sedimentary-hosted deposits currently in operation around the world, based on the infill drilling conducted to date,” Canaccord Genuity Capital Markets mining analyst Dalton Baretto said in a Monday note. “Both holes also encountered near-surface oxide mineralization, which will increase the broader regional oxide potential.”

Pampa Medina sits about 25 km from Marimaca’s planned initial oxide development, where last year’s feasibility study outlined a 13-year operation producing 50,000 tonnes of copper cathode a year from probable and proven reserves of 179 million tonnes grading 0.42% copper. The mine, which requires an expected initial capital outlay of $587 million (C$798 million), has a post-tax net present value of $709 million at an 8% discount rate and a 31% internal rate of return at a $4.30 per lb. copper price.

Marimaca’s Toronto-listed shares gained more than 12% in early Monday afternoon trading to C$7.92 apiece. Its market capitalization is about C$1 billion ($719 million).

District upside

A larger oxide-sulphide inventory at Pampa Medina could enhance the company’s district strategy around existing infrastructure near the towns of Mejillones and Antofagasta. The company last month signed an agreement with a large acid producer in the port city of Mejillones, about 25 km by road from the project site, to study refurbishing, relocating, integrating and operating an acid plant.

Marimaca’s broader SPRD-05 intercept assayed 96 metres grading 1.19% copper and 11.7 grams silver from 692 metres depth, including 60 metres of 1.8% copper and 18.4 grams silver from 694 metres. Marimaca drilled the hole about 650 metres northwest of earlier hole SMRD-13, which the company has used as a marker for the same ultra-high-grade corridor.

“We have always said that continuity will be the maker of the Pampa Medina deposit and our drilling completed to date gives us confidence that we are dealing with a deposit of genuine district significance,” said Marimaca Vice-President of Exploration Sergio Rivera.

Pampa Medina remains open in almost all directions, Marimaca says. It plans to freeze data for a maiden resource after finishing the current 150-metre-spaced delineation program, part of about 30,000 metres of current planned drilling. It then expects to step out to northern and western targets while continuing work across the broader Sierra de Medina package, where it controls about 145 sq. km of ground.

Marimaca is pivoting towards development just as majors are picking up the pace of construction activity in Chile and Argentina. Work on the ground is intensifying at BHP (ASX: BHP) and Lundin Mining’s (TSX: LUN) Vicuña joint venture, while First Quantum Minerals (TSX: FM) is advancing La Granja and Taca Taca and Chilean state-run copper miner Codelco is working with Freeport-McMoRan (NYSE: FCX) to expand El Abra for $7.5 billion.