Copper market’s biggest whale fuels speculation of a major shift
The world’s single biggest buyer of copper, State Grid Corp. of China, has slowed its purchases of copper wire this year.
Marimaca Copper (TSX: MARI) has secured a C$20 million ($15.1m) investment from Mitsubishi Corporation via a private placement that would see the Japanese firm own 5% of its equity capital. Proceeds of the investment will be used to accelerate the development of Marimaca’s flagship copper project located in the Antofagasta region of Chile.
Shares of Marimaca Copper rose 2.2% by 12:15 p.m. EDT Wednesday on the back of Mitsubishi’s investment. The company has a market capitalization of C$361.2 million ($274m).
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.
A preliminary economic assessment published in 2020 gave Marimaca a post-tax net present value (at an 8% discount) of $640 million and a 38% internal rate of return, assuming a $3.45/lb flat long-term copper price. The payback period is estimated at 2.4 years.
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.
“We are pleased that Mitsubishi shares our view that the Marimaca copper project is a unique, very high-quality, development-stage project,” Marimaca CEO Hayden Locke said in a news release. “Its location affords it several advantages, including an expectation that it will be among the lowest carbon intensity copper producers in the industry.”
“Mitsubishi’s investment significantly de-risks our next phase of development and provides funding to accelerate progress toward the definitive feasibility study and permitting,” Locke said.
“We look forward to working together with the Marimaca team as it moves into the next phase of studies and permitting with the hope we can fully utilize our deep experience in the Chilean copper industry to further enhance this project,” added Taro Abe, general manager of Mitsubishi’s base metals department.
Mitsubishi is a major investor in the Latin American copper industry with a portfolio of existing investments including Escondida, Los Pelambres, Antamina, Los Bronces and Quellaveco.
