It is common belief that in Chile there is a lack of commitment to greenfield projects with larger capex, compared to Peru or Ecuador. This has resulted in very few copper discoveries and not many additions to early stage projects in Chile's pipeline.
However, Coro Mining's Marimaca project in the Antofagasta region could challenge that belief as it could have the potential for a large-scale open pit copper operation.
After finishing a phase II exploration program at the properties surrounding the main area, the objective of the company is to increase its mineral resource and proceed with a PEA study, which it would hope to complete early next year.
This week, Coro published results from a final batch of assays identifying new multiple high-grade zones within the oxide zone, as well as primary sulfide mineralization at depth.
This updated resource estimate should be ready by 3Q19, and with this data a PEA could be done by Q4, CEO Luis Tondo told BNamericas.
“The PEA will determine the value of the project with confirmed capex and opex. I think capex and opex are going to be lower compared to other projects because we're in a privileged zone with good infrastructure with good water access. We can use seawater for a leaching operation," said Tondo, adding that the electricity lines of the northern SING grid are very close to the property.
Marimaca could also offer workers the opportunity to commute to work daily, rather than the alternative rotational mine camp systems, since the city of Antofagasta is only 60km away, Tondo pointed out.
“The project could be producing 70,000t/y copper and we believe it will have a capital cost of approximately US$400-450mn,” he aded.
To establish its 51% ownership of of Compania Minera Newco Marimaca, Coro had to complete an initial definitive feasibility study.
The results of the feasibility study were published in June 2018, indicating 10,00t/y copper in years 2 to 10, with initial capex at US$22.6mn and cash operating costs averaging US$2.05/lb over a 12-year mine life.
Post-tax IRR is 58.8%, based on a US$3/lb copper price. Proven and probable reserves are 196,800t of copper, with average grades of 0.8%.
“The study was more theoretical at the time, because the scale of what came out of that was relatively low compared to what we believe Marimaca will be later. For example, the scale of feasibility was to produce 10,000t/y of copper cathodes. We think that with the resources that we're identifying now, that figure could increase by a factor of six, seven, or even 10,” said Tondo.
WHAT COMES NEXT?
After finishing the PEA, hopefully in early beginning of 2020, Tondo said that there are two viable development options.
The first option is to carry out a new infill drilling program in 1H19 to obtain the measured and indicated resources and in 2H19 begin a prefeasibility study.
Tondo said that the company is preparing an environmental impact declaration (DIA) to obtain the necessary drilling permits and have them ready by the end of this year.
"Our aim is to identify at least 200Mt with 0.5% copper grade. And that almost puts us at the level of a large-scale project,” he said.
The second option is to sell Marimaca to a bigger miner.
“A project of this magnitude will need capex that for Coro on its own will currently be a big challenge to finance. So we could have a JV or we are even prepared to to sell 100% of the project if there's a good offer,” he said, adding that other bigger companies have already been asking for more information on the project.
Marimaca is an intrusive orebody while the mantos deposits in the region are volcanic.
There is a preconception that in the coastal range, there can only be large volcanic rock projects, but this is changing with Marimaca, said Tondo.
“This shows that there are still good deposits in Chile if one thinks outside the box and leaves out the preconceived geological models. You tend to hear that there are no new projects in Chile, but with this project we're showing that this isn't true.”