With S&P Global forecasting a copper deficit of 19 million tonnes by 2035 because of population growth, the renewable energy transition and lack of mine development, there’s money to be made in Canadian copper stocks sitting on prospective resources backed by a development track record, seasoned management, and share-price momentum with a sufficient margin of safety to merit an allocation.
A prime candidate worth considering is Marimaca Copper (TSX:MARI), a Chile-based junior miner developing its wholly owned Marimaca Copper Project, which houses one of the largest copper discoveries of the past decade in a country with the largest copper reserves in the world.
A major copper resource growing towards a definitive feasibility study
Sergio Rivera, Vice President of Exploration, made the initial discovery at the Marimaca Copper Project in Chile’s Coastal Copper Belt in 2016, just 45 km north of Antofagasta, a region that provides the country with more than half of its copper production, and 25 km east of the port town of Mejillones, offering easy access to water, power, mining talent, as well as road and rail networks.
The project boasts an 899,700 tonne measured and indicated (M&I) copper resource (86 per cent of total resource tonnes) and a 141,300 tonne inferred resource as of its May 2023 mineral resource estimate (MRE). The core of the property’s Marimaca Oxide Deposit (MOD) is made up of high-grade, near-surface green oxide mineralization (brochantite, atacamite, chrysocolla), while high-grade zones of oxides, mixed and enriched mineralization extend at depth beneath the green oxide zones.
Potential investors should note the considerable growth from the maiden MRE in 2017, which estimated the project to contain 145,500 tonnes of copper M&I and 99,300 tonnes of copper inferred. We’ll revisit this growth in greater detail in the final section of this article.
The project also offers a low strip ratio, estimated carbon emissions in the lowest 10 per cent of all copper projects globally, and substantial opportunities for resource expansion, all of which are expected to significantly enhance operational economics moving forward.
A five-hole expansion program completed earlier this year focused on sulphide mineralization east of the MOD, particularly from MAD-22, which was drilled from the eastern MOD through the 2022 MRE pit wall, and intersected very high-grade primary copper mineralization – 240 m of 1.01 per cent copper from surface – as well as the border of the magnetic susceptibility high identified in the 2020 geophysical campaign.
Among the program’s drill holes, MAD-24, 25, 26 and 27 intersected an extension of the surface oxide and mixed/enriched copper mineralization, with 25-27 immediately adjacent to the eastern wall of the whittle pit limits of the 2022 MRE. This leads management to believe the drill holes represent a near-surface expression of MAD-22’s high-grade mineralized structures, marking the first instance of consistent sulphide-associated alteration below the MOD.
Rivera believes that “sulphide potential is high” and that “higher-grade remnant feeder structures remain intact in the shallower down-dip zones of the MOD.” These structures afford the company a first-mover advantage as sulphide exploration at Marimaca is limited and shallow, with the deeper extents remaining untested and the oxide/sulphide mineralization consistently reaching depths of over 400 m.
Next steps for the Marimaca Copper Project include further sulphide exploration, permitting and a definitive feasibility study, with funding in place from a world-renown, multi-billion dollar backer.
Mitsubishi is a more than 150-year-old globally integrated business encompassing some 1,700 companies active in 10 sectors, including leadership positions in EVs and renewable energy. The corporation took in US$147 billion in revenue in 2022, registering US$5.9 billion in profit.
The legendary Japanese brand invested C$20 million for a 5 per cent stake in Marimaca Copper in July 2023, with Taro Abe, General Manager of Base Metals at Mitsubishi, citing the Marimaca Copper Project’s potential to “deliver a meaningful new supply of copper in the near term” at a “very low carbon intensity.”
The investment expands Mitsubishi’s presence in the Latin American copper industry, which includes holdings in BHP’s Escondida mine (the world’s biggest copper mine), Antofagasta PLC’s Los Pelambres deposit, Teck Resource’s Antamina mine, and Anglo American’s Los Bronces and Quellaveco, each of them multi-billion dollar operations of strategic importance to the global copper supply chain.
Mitsubishi’s skin in the game represents a vote of confidence in Marimaca Copper stock and its flagship asset’s potential to play a key role in the electrification revolution, as well as management’s ability to transform this potential into reality.
Management that allows you to sleep well at night
A prime mineral resource requires a specialized team to deliver on shareholder value, and that’s exactly what the Marimaca Copper Project has in its corner.
At the company’s helm is President and CEO Hayden Locke, who has developed and led numerous successful mining companies listed on the LSE (London Stock Exchange) and ASX (Australian Stock Exchange). He also brings extensive investment banking experience with J.P. Morgan and mining private equity experience with Barclays Natural Resource Investments, in addition to tenures as Head of Corporate at ASX-listed gold developer Papillon Resources and potash developer Highfield Resources.
Rivera, for his part, is a practicing geologist whose three decades in the field are marked by numerous significant copper discoveries in Chile. He has served as Vice President of Exploration at Marimaca since 2011.
Other notable Marimaca executives include:
- Interim CFO and Managing Director, Jose Antonio Merino, who served as Senior Manager of Business Development and M&A at SQM, a major Chilean mining and chemicals company and one of the world’s largest lithium producers
- Vice President of Projects, Leonardo Hermosilla, who previously served as Director of Projects and Growth, South America for Barrick; General Manager and SVP Copper for SNC-Lavalin Chile; and Project Development Director at Hatch Engineering, where he oversaw the development of the US$4 billion El Morro Project
- Board member Clive Newall, a co-founder, president and director of First Quantum, one of the world’s largest global copper companies
- Board Chair Michael Haworth, who previously served as Head of Mining and Metals Corporate Finance at JP Morgan in London
Backed by talent that knows the mineral resource industry from the field to the trading desk, Marimaca Copper is built to continue its history of successful development and garner increasing market awareness of the value it brings to a portfolio.
A growth trajectory with room to run
Marimaca shares are up by 147.85 per cent over the past five years, well ahead of the iShares S&P/TSX Capped Materials Index ETF’s 49.67 per cent return over the period, because of consistently high rates of resource expansion:
- 2018 M&I resources of 290,500 tonnes copper grew by over 100 per cent from 2017, with 32,700 tonnes of copper inferred, converted down from 99,300 tonnes the year prior
- 2019 M&I resources of 419,900 tonnes grew by over 45 per cent from 2018, with inferred resources growing by over 585 per cent to 224,500 tonnes
- 2022 M&I resources of 669,900 tonnes grew by over 58 per cent from 2019, with inferred resources growing by over 44 per cent to 322,400 tonnes
With the M&I resource up by almost 230,000 tonnes in 2023, thanks to conversions from indicated to M&I, Marimaca is going on seven years of prospective results that justify long-term conviction and enhance the potential of its flagship project as a reliable copper source.
Given copper’s numerous tailwinds and Bloomberg NEF’s estimate that the world’s top 11 copper miners are holding more than US$53 billion in cash for mergers and acquisitions, the highest level in a decade, interested investors have every reason to believe that Marimaca’s operational excellence will continue to deliver outsized returns and amass global relevance on the road to economical mineral extraction.
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