Marimaca Announces Sale of Non-Core Ivan Plant for up to US$17.0 million
04 Mars 2022 - 1:00PM
Marimaca Copper Corp. (“Marimaca Copper” or the
“Company”) (TSX: MARI) is
pleased to announce that it has entered into a binding agreement to
sell certain non-core Rayrock assets, including the Ivan SX-EW
Processing Plant and associated mining claims, to 5Q SpA (“5Q”), a
privately-held specialist mineral processing company based in
Santiago, Chile, for total consideration of up to US$11.0 million,
plus up to US$6.0m in contingent payments. Details of the
transaction are outlined below.
Transaction Details
Total Consideration
- Up to $11.0 million in
total consideration to Marimaca
- US$150,000 upon
signing
- US$350,000 upon approval of
the Ivan Rayrock technical permits
- US$1.8 million – US$2.1
million on the 12-month anniversary of the
transaction*, determined by LME
copper price
- US$2.7 million – US$3.1
million on the 18-month anniversary of the
transaction*, determined by LME
copper price
- US$4.1 million – US$5.2
million on the 24-month anniversary of the
transaction*, determined by LME
copper price
- A 1.5% NSR on future
production from the Ivan underground ore body
Contingent Payments
- Up to $6.0 million in contingent payments based on
potential future stockpile acquisitions to be processed through the
Ivan Plant, based on the amount of contained copper in the
stockpiles acquired
- US$1.0m for stockpiles
containing 5,000t - 10,000t total copper
- US$2.0m for stockpiles
containing 10,000t - 20,000t total copper
- US$4.0m for stockpiles
containing 20,000t - 30,000t total copper
- US$6.0m for stockpiles
containing >30,000t total copper
Hayden Locke, President and CEO of
Marimaca Copper, commented:
“The sale of the Ivan Plant is in-line with our
strategy of advancing and developing the Marimaca Project on a
standalone basis. Since the Company acquired the Ivan Plant in
2017, the Marimaca Project has continued to grow and evolve to a
point whereby the Ivan Plant is no longer a core component of the
Project’s optimal development path.”
“We are very pleased to conclude this
transaction with 5Q. The Ivan SX-EW Plant is an excellent fit with
5Q, and the 5Q team has an exceptional track record of processing
stockpiled oxide and mixed ores in Chile. We hope to see the Ivan
Plant become a successful and core part of their business.”
Overview
Marimaca acquired the Ivan SX-EW processing
plant in 2017. The plant was previously operated by Compañía Minera
Milpo S.A.A ("Milpo") from 1995-2012. Since 2012 the plant has been
non-operational. The plant has an installed capacity of 10,000
tonnes per annum of copper cathode. The Ivan Plant has been
considered non-core by Marimaca since the completion of the 2020
Preliminary Economic Assessment (“PEA”), which considered a
standalone 40,000 tonne per annum copper cathode plant at the
Marimaca Project Site (see announcement dated August 4, 2020).
Future development scenarios considered for the DFS (planned for H2
2022) are expected to consider development scenarios larger than
40,000 tonnes per annum copper cathode capacity. The Ivan Plant is
located approximately 20km south of the Marimaca Project. The sale
includes approximately 11,000ha of mining claims held in Minera
Rayrock Ltda associated with the historic Ivan Mine.
Total Consideration Detail
Details of the total purchase price are outlined
in the table below.
|
Amount (USD) + LME Cu
Benchmark(1) |
|
|
|
Low |
Mid |
High |
|
Time Thresholds*(2) |
Payment |
<$3.70/lb |
$3.70-$4.50/lb |
>$4.50/lb |
Timing |
Earliest |
Latest |
1 |
$150,000 |
$150,000 |
$150,000 |
Fixed |
On signing |
On signing |
2 |
$350,000 |
$350,000 |
$350,000 |
Fixed |
Permit Approval |
Permit Approval |
3 |
$1,821,000 |
$2,000,000 |
$2,107,000 |
Fixed |
12-month anniversary |
12-month anniversary |
4 |
$2,702,000 |
$3,000,000 |
$3,179,000 |
Variable |
6 months post Payment 3 |
9 months post Payment 3 |
5 |
$4,110,000 |
$4,800,000 |
$5,214,000 |
Variable |
6 months post Payment 4 |
9 months post Payment 4 |
(1) Based
on average price over defined lookback period(2)
Payment timing for Payments 4 and 5 determined by certain
defined operating thresholds
The transaction is expected to close in the
first quarter of 2022.
Contact InformationFor further
information please visit www.marimaca.com or contact:
Tavistock +44 (0) 207
920 3150Jos Simson/Oliver Lamb / Nick
Elwesmarimaca@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 29, 2021, 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.
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