Marimaca surges to 15-year high on strong copper hits in Chile

[Ben Graham]

Marimaca Copper (TSX: MARI; ASX: MC2) shares soared to a new 15-year high Thursday on the release of copper sulphide drill results as high as 6 metres grading 12% copper at its Pampa Medina project in northern Chile.

That intercept, drilled from 594 metres depth in hole SMRD-13, included 26 metres at 4.1% copper and 100 metres grading 1.3% copper, Marimaca said in a statement. Another hole, SMD-02, cut 132 metres at 1% copper from 278 metres, including 40 metres grading 2.1% copper.

The project is about 25 km west of the company’s main Marimaca Oxide Deposit (MOD) and 1,250 km north of the capital Santiago.

“Game changer, particularly for the sulphide intercepts,” Canaccord Genuity analyst Dalton Baretto said in a note. “The Pampa Medina discovery could be very synergistic with the main Marimaca Oxide Deposit, given [its] proximity and the ability to share infrastructure [and] we see options for a larger project and a longer mine life (and perhaps even a potential relocation of infrastructure should this project prove up at scale).“

The thick, high-grade intercepts offer the potential for a much larger scale copper system, Marimaca President and CEO Hayden Locke said in a release.

“These results add a new dimension to our strategy and, we believe, strengthen our potential to be a globally significant copper producer in time,” he said.

Upcoming feasibility

The Vancouver-based company is working on a feasibility study for its main MOD project, expected to be released by the fourth quarter.

Just one month ago, it received C$24.4 million in private placement financing to fund the study. However, a previously planned preliminary economic assessment for Pampa Medina is to be paused while the company assesses the drill results.

Marimaca shares surged 25% to a new 15-year high of C$9.09 apiece Thursday at mid-afternoon, for a market capitalization of C$967.95 million.

Another significant result at Pampa Medina includes hole SMRD-12, which cut 56 metres grading 1.4% copper from 566 metres depth.

Infrastructure advantages

Pampa Medina’s infrastructural context offers particular benefits for the project, including proximity to other mines and its low altitude and relatively flat surroundings which could provide sufficient space for potential facilities. The port of Mejillones is also about 25 km west, Marimaca said.

About 40 km southwest is Capstone Copper’s (TSX: CS; ASX: CSC) Mantos Blancos project and Antofagasta Minerals’ (LSE: ANTO) Cachorro project is about 40 km to the northeast. South32’s (ASX: S32) Sierra Gorda project is 64 km east, and just northeast of that is BHP’s (NYSE, LSE, ASX: BHP) Spence mine.

The company’s ongoing drill program comprises 10,000 meters across 14 diamond holes, and is aimed at defining the limits of the prospective sedimentary units at Pampa Medina.