Marimaca Copper (TSX: MARI; ASX: MC2) has surged by double digits after announcing on Wednesday a $24.4-million (US$17.7-million) private placement to fund its feasibility-stage namesake project in Chile.
The offering comprises approximately 5.31 million common shares priced at $4.60 per share, issued exclusively to institutional investors. Two of Marimaca's cornerstone shareholders, Assore International Holdings and Ithaki, will buy most of the shares at 2.25 million each. A blue chip fund is expected to purchase the remaining portion.
The stock was at $5.40 on Thursday afternoon in Toronto after opening at $4.88 on Wednesday, a 13% gain that takes the Toronto-based copper miner's market capitalization to roughly $546 million.
Net proceeds from the offering will be used to advance the company's Marimaca copper project in northern Chile's Antofagasta region. The deposit is hailed as one of the most significant copper oxide discoveries in years in the world's top copper-producing nation. BMO Capital Markets said the company could have raised more money.
"The placement does not come as much of a surprise; however, given the company's ASX listing, there was a view that a more meaningful amount could have been placed in this market," BMO mining analyst Rene Cartier wrote in a new on Wednesday. "We were previously modeling an equity raise of 10 million shares at $4.50 in the quarter, with the pricing announced slightly better but the overall size smaller."
Since its discovery in 2016, Marimaca has been consistently growing the project's resource, which now totals 200 million tonnes in the measured and indicated categories grading 0.45% copper for 900,000 tonnes of contained copper, plus 37 million tonnes in the inferred category grading 0.38% copper for 141,000 tonnes.
According to a 2022 preliminary economic assessment, the open-pit mine is expected to produce 40,000 tonnes of copper cathodes annually during its first six years of operation, starting in 2028. Over the 12-year mine life, total recovered copper is estimated at 430,000 tonnes.
Marimaca is currently progressing the project through the definitive feasibility phase, with a technical report anticipated in the middle of this year.
The company is also aiming to obtain environmental approval from the Chilean government by year-end for the mine. Its copper extraction is designed around the less carbon-intensive heap leaching method.
The placement's funds will also be allocated to support the company's exploration efforts across its district-scale land package. It includes the 150-sq.-km Sierra de Medina property block located 25 km from the Marimaca deposit.