Osisko Gold Royalties (TSX: OR; NYSE: OR:US) has acquired a 1% net smelter return (NSR) royalty covering the currently known mineralization and prospective exploration areas that constitute the Marimaca copper project. Total consideration paid to the project owner Marimaca Copper (TSX: MARI; OTCPK: CROJF:US) is US$15.5 million.
Located in northern Chile near Antofagasta, Marimaca is an open-pit, heap-leach project that hosts a resource of 70.4 million tonnes grading 0.60% copper for 420,000 tonnes of copper in the measured and indicated categories. There are also 43 million tonnes grading 0.52% copper for 225,000 tonnes copper in the inferred category.
These resources date from December 2019 and were more recently reported in a preliminary economic assessment (PEA) published by Marimaca Copper in August 2020. The PEA envisioned a low-cost copper operation that will be developed over eight phases in one single continuous pit. It has a post-tax net present value (at 8% discount) of US$524 million and an internal rate of return of 33.5%.
The newly created royalty acquired by Osisko covers about 13.1 sq. km of the existing resource and prospective, near-resource targets. Osisko has also been granted certain rights including a right of first refusal with respect to any royalty, stream or similar interest in connection with financing the Marimaca project.
The project is located 35 km from the operating Mantos Blancos copper mine held by Capstone Copper (OTCPK: CSCCF:US), where Osisko also owns a silver stream.
Osisko believes the Marimaca project is one of the top undeveloped copper projects currently owned by a single-asset developer. The 2020 PEA highlighted annual copper cathode production of 36,000 tonnes over a 12-year period.
According to Osisko, the project remains on track for a resource update in the near future, incorporating over 41,000 metres of drilling results in 2022. The company also anticipates the start of a definitive feasibility study on the project later this year.
Osisko shares were trading at $13.26 apiece as of mid-afternoon on Friday in Toronto. Its shares have traded in a 52-week window of $11.90 and $18.59. It has a market cap of $2.4 billion.