(Kitco News) - On Thursday, Marimaca Copper (TSX: MARI) announced a US$15.5 million investment from Osisko Gold Royalties for a 1.0% NSR royalty on certain claims covering the Marimaca oxide deposit (MOD) and some claims immediately adjacent to it.
The company said that Osisko's royalty will effectively replace certain existing royalties on the project, adding that proceeds from the investment will be used to advance permitting, a definitive feasibility study for the MOD and for general corporate and administrative expenses.
President and CEO Hayden Locke 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."
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 principal asset is the Marimaca project, an oxide, open-pit, heap leach copper project located in the Antofagasta Region of northern Chile.
The company indicated that in August 2020, it released a preliminary economic assessment for the Marimaca project which confirmed its potential to be a low capital cost, high margin, copper mine.
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