Marimaca Announces US$15.5 Million Investment from Osisko Gold Royalties
09 September 2022 - 7:01AM
Marimaca Copper Corp. (“Marimaca Copper” or the “Company”)
(TSX: MARI) is pleased to announce a US$15.5 million
investment from Osisko Gold Royalties (“Osisko”) for a 1.0% Net
Smelter Return royalty (the “Osisko NSR”) (the “Investment”) on
certain claims covering the Marimaca Oxide Deposit (“MOD” or “the
Project”) and some claims immediately adjacent to it. Proceeds from
the Investment will be used to advance permitting, a Definitive
Feasibility Study (the “DFS”) for the MOD and for general corporate
and administrative expenses. Osisko’s royalty will effectively
replace certain existing royalties on the Project. Marimaca has
pre-existing rights to retire some of the existing royalties
covering the MOD and as such the Investment limits the expected
incremental royalty burden on the Project. Importantly, these
existing rights include a buyback right for 1% of the royalties
outstanding on the Marimaca 1-23 claims, which forms the majority
of the mineable resources and projected copper production for the
Project1.
Highlights
- Significant
financing in challenging equity markets with only very modest
incremental royalty exposure on the MOD1,2
- Given ability to
buyback pre-existing royalties, no expected net change to royalty
burden on the Marimaca 1-23 claims2, which comprises the majority
of the projected copper production for the MOD1
- Total additional
royalty burden on the MOD estimated to be approximately
0.39%1,2
- NSR will apply to
concessions covering the current resource and concessions
immediately adjacent to the MOD
- The Investment
allows Marimaca to continue to progress various workstreams,
including permitting
- Represents a strong
endorsement for the Marimaca Project from a leading public royalty
company with well-respected technical expertise
Hayden Locke, President & CEO of
Marimaca Copper, commented:
“Osisko is renowned for its technical
capabilities, and we therefore see this significant investment,
following extensive due diligence, as a strong endorsement of the
Marimaca Oxide Project and the work completed by our technical
teams.
“Given the current challenging equity market
conditions, we believe this financing also delivers meaningful
value to our existing investors, lowering overall dilution while
providing us with a strong balance sheet to continue with the
development of the Project. In retaining the buyback rights, we
have effectively monetized an asset of the Company while adding
only a minor incremental royalty burden to the Company’s assets
overall.
“We remain on track for the first mineral
resource update towards the end of September or early October,
which we believe will deliver a step change in the scale of the
Marimaca Project.”
Details of the Transaction
Marimaca, together with certain of its
wholly-owned Chilean subsidiaries, and Osisko entered into an
Investment Agreement and a Royalty Agreement whereby Marimaca
granted a 1.0% NSR to Osisko on concessions that currently host the
Marimaca Oxide Deposit as well as certain rights including a right
of first refusal with respect to any royalty, stream, or similar
interest in connection with project financing of the Marimaca
project for cash consideration of US$15.5 million in aggregate.
Under the Investment Agreement, Marimaca has
agreed to exercise certain buyback rights in respect of royalties
granted under the 1-23 Purchase Agreement and La Atomica option
agreement prior to commercial production which total US$6.0 million
in aggregate.
About Marimaca
Marimaca Copper is a Canadian publicly-listed
exploration and development company focused on exploring for and
developing new copper deposits in Chile. The Company’s shares trade
on the Toronto Stock Exchange (“TSX”) under the symbol “MARI”.
The Company’s principal asset is the Marimaca
Project, an oxide, open-pit, heap leach copper project located in
the Antofagasta Region of northern Chile. In August 2020, Marimaca
Copper released a Preliminary Economic Assessment (“PEA”) for the
Marimaca Project which confirmed its potential to be a low capital
cost, high margin, copper mine.
Contact InformationFor further
information please visit www.marimaca.com or contact:
Tavistock +44 (0) 207 920
3150Emily Moss / Adam
Baynesmarimaca@tavistock.co.uk
Forward Looking Statements
This news release includes certain
“forward-looking statements” under applicable Canadian securities
legislation. There can be no assurance that such statements will
prove to be accurate, and actual results and future events could
differ materially from those anticipated in such statements.
Forward-looking statements reflect the beliefs, opinions and
projections on the date the statements are made and are based upon
a number of assumptions and estimates that, while considered
reasonable by Marimaca Copper, are inherently subject to
significant business, economic, competitive, political and social
uncertainties and contingencies. Many factors, both known and
unknown, could cause actual results, performance or achievements to
be materially different from the results, performance or
achievements that are or may be expressed or implied by such
forward-looking statements and the parties have made assumptions
and estimates based on or related to many of these factors. Such
factors include, without limitation: risks related to share price
and market conditions, the inherent risks involved in the mining,
exploration and development of mineral properties, the
uncertainties involved in interpreting drilling results and other
geological data, fluctuating metal prices, the possibility of
project delays or cost overruns or unanticipated excessive
operating costs and expenses, uncertainties related to the
necessity of financing, the availability of and costs of financing
needed in the future as well as those factors disclosed in the
annual information form of the Company dated March 28, 2022, the
final short form base prospectus and other filings made by the
Company with the Canadian securities regulatory authorities (which
may be viewed at www.sedar.com). Accordingly, readers should
not place undue reliance on forward-looking statements. Marimaca
Copper undertakes no obligation to update publicly or otherwise
revise any forward-looking statements contained herein whether as a
result of new information or future events or otherwise, except as
may be required by law.
Neither the Toronto Stock Exchange nor the
Investment Industry Regulatory Organization of Canada accepts
responsibility for the adequacy or accuracy of this
release.
1 Based on the Mineral Resource Estimate
released in December 2019 and the August 2020 Preliminary Economic
Assessment2 Post the exercise of its right to buyback 1% of the
royalty on Marimaca 1-23 and 0.5% on La Atomica
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