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Chile-focused Marimaca Copper (TSX: MARI) said on Tuesday that Assore International Holdings (AIH), a subsidiary of South Africa’s Assore Group, is investing C$68 million ($50m) in the company.
Marimaca, which owns the namesake project in Chile’s Antofagasta region, said the strategic investment was divided into two parts. One is AIH’s acquisition of 9.42 million Marimaca shares from Ndovu Capital, an affiliate of Tembo Capital Mining, at a price of C$4.5 per share, resulting in Tembo Capital receiving C$43.38 million.
The second part involves AIH’s participation in a non-brokered private placement by subscribing to 5.73 million units, fetching C$25.76 million.
After these two transactions, AIH’s ownership of Marimaca would be 14.99% on a non-diluted basis and 18.07% on a partially diluted basis. Prior to the Tembo acquisition and the AIH private placement, the mining investment group had no holdings in Marimaca’s securities.
Investment gives Assore International a 14.99% non-diluted stake in the Canadian copper company.
The Canadian copper explorer and developer also revealed that another, unnamed investor would participate in a private placement, subscribing for one million units at the same pricing terms as the AIH private placement. This will result in gross proceeds of C$4.5 million.
The funds raised from the private placements will be used to progress the development of the company’s flagship project, including a definitive feasibility study (DFS) for the mine. They will also be allocated to cover exploration work at important targets within the Marimaca Copper’s regional land holdings.
“When conflicting investment and project development timelines meet, especially with one of a company’s key investors, it can create challenges for management,” Marimaca’s president and chief executive, Hayden Locke, said in the statement. “With this transaction, Tembo has introduced a new investor that is perfectly aligned with the company’s longer-term objective, to be a copper producer,” Locke said.
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.
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.
Shares in Marimaca jumped on the news and were up 6.3% at C$4.08 each during mid-morning trading in Toronto. This leaves the company with a market capitalization of C$ 386.05 million ($282m).
