Marimaca Copper targets 2026 build start on delivering DFS

Marimaca Copper’s (TSX: MARI; ASX: MC2) definitive feasibility study (DFS) confirms the Chilean oxide project at the low end of capital intensity among South American copper builds.

The DFS, released on Monday, outlines a 13-year, open-pit, heap-leach copper project near Antofagasta, northern Chile, producing copper cathode at an initial 50,000 tonnes per year. At a long-term copper price of $4.30 per lb., the study returns a post-tax net present value, at 8% discount, of $709 million and a 31% internal rate of return, with 2.5 years’ payback.

Marimaca pegs pre-production capital at $587 million, implying capital intensity of about $11,700 per annual tonne of copper capacity. That is on the low-end of the global scale, according to Locke. On the recent three-month Comex average of $5.05 per lb., the post-tax NPV rises to $1.1 billion and the IRR to 39%.

Given the IRR of 31% and capital intensity of about $11,700 per tonne of annual copper capacity, the project stacks up favourably against peers such as Los Andes Copper’s (TSXV: LA) Vizcachitas 2023 pre-feasibility study at roughly $13,300 per tonne and 24% IRR, and Capstone Copper’s (TSX: CS; ASX: CSC) Santo Domingo feasibility study at a capital intensity of about $21,900 per tonne.

The project “is very financeable,” CEO Haydn Locke told The Northern Miner Tuesday, adding that he has “no doubt” it will be a mine. Marimaca is running the debt process “to ground now,” he said, with independent technical experts reviewing the study. “We’ve already gone out for expressions of interest and we were frankly inundated with responses,” he said.

Marimaca shares trading in Toronto closed C$0.02 higher Tuesday at C$11.46. It has a market capitalization of C$1.2 billion.

Finance package

Locke proposed a capital structure that focuses on debt while avoiding over-leverage. He suggested having between $300 and $350 million in debt, with equity between $225 and $275 million. This setup would result in the project being about 60% levered against pre-production capital.

The financing plan and schedule assume no major hiccups in permitting or the supply chain. Locke cautioned the DFS is “a snapshot in time” and said design and pricing will tighten through detailed engineering. “We’re not yet ready to build this project,” he said. “The objective really is we want to be in a position to start construction sometime during the course of 2026.”

The company has a supportive shareholder register including Greenstone, Assore International and Mitsubishi.

Strong metrics

The cost profile relies on low operating intensity. Cash operating costs average $1.45 per lb. over the first five steady-state years and $1.68 per lb. over the first 10 years, including ramp-up. The all-in sustaining cost is pegged at $1.97 per lb. over the first five steady-state years, $2.09 per lb. in steady state, and $2.12 per lb. for the first decade.

The plan assumes that water and power come to the mine gate through build-own-operate-transfer contracts. This moves costs from upfront capital to operating expenses.

Proven and probable reserves total 179 million tonnes grading 0.42% copper for 750,000 tonnes contained copper. The life-of-mine strip ratio is 0.8:1.

Permitting

Permitting is on a defined track, Locke underlined. Marimaca’s environmental submission is proceeding via Chile’s so-called DIA path. It’s used when a proponent shows the project has no material environmental or social impacts.

The company answered the first round of questions in July and expects follow-ups limited to earlier issues.

“We are now optimistic that we will have our environmental approval by the end of 2025,” Locke said. He adds that another six to nine months would then be needed for sectoral permits before full construction.

DFS details

The flowsheet is conventional: three-stage crushing to 12.5 mm, agglomeration and acid cure by mineral sub-domain, dynamic heap leach, and solvent extraction and electrowinning sized for 50,000 tonnes per year. A second stage debottleneck of the tertiary circuit and two more heap cells planned. Metallurgical test work spans seven stages with 4-metre columns and a solvent extraction pilot plant.

Water is recycled seawater from the Bay of Mejillones via about 32-km of pipeline at 208 litres per second and one pump station. No operations camp is required given the site’s proximity to the town of Mejillones and city of Antofagasta.

Acid kicker

Sulphuric acid costs remain a key variable for a leach project. The DFS assumes $90 per tonne acid flat and leans on Cochilco’s outlook for easing Chilean market tightness from 2028.

Marimaca is evaluating establishing its own sulphur burner in Mejillones and has an option to acquire a used acid plant in Chile for $2.5 million. The company’s analysis suggests self-supply could reduce delivered acid costs to well below $90 per tonne in most scenarios. Locke said the strategy is to lock down 50 – 60% of acid through own production and a local burner, with the balance under term contracts or spot.

Hub and spoke

The district plan is to add satellite oxide feed and test for sulphides at depth. Marimaca is moving forward with a hub-and-spoke strategy centered on the Marimaca Oxide Deposit (MOD). Satellite deposits, like Pampa Medina and Madrugador, are ready as initial growth options. A 10,000-metre Pampa Medina drill program is in progress.

Recent drilling at Pampa Medina supports that intent. A BMO Capital Markets note on Aug. 15 reported that hole SMRD-16 extended high-grade mineralization 300 meters west. It showed broad copper zones over 1% and several high-grade intervals at depth.

“In our view, we see the opportunity for Pampa Medina to bolster mine life, and the potential to increase the scale of copper production at an integrated project,” mining analyst Rene Cartier said.

For Locke, Marimaca presents a career-making opportunity. “It’s a great starting point,” he said. “I have set an objective to the team that we should be ready to build by Q3 of 2026.”