Marimaca Copper (ASX:MC2) has executed a binding asset purchase option agreement to acquire a used sulphuric acid plant in Chile from CEMIN Holding Minero.
Sulphuric acid is a key input cost for the Marimaca Oxide deposit and the ability to produce a large amount of its own supply will reduce exposure to a volatile acid market.
Under the option agreement, the company can acquire the plant for US$2.5 million ($3.89 million). The deal has a 3-month exclusivity period to allow further detailed technical and engineering reviews, including capital and operating cost estimates for the installation and operation of the sulphuric acid plant.
CEO Hayden Locke says the Marimaca deposit is forecast to be a mid-level acid consumer in the context of Chilean heap leach operations.
“Based on current projections from Comision Chilena del Cobre, which provides industry forecasts for long-term acid supply and demand in the Chilean market, the expectation is for acid prices to normalise at around US$95 per tonne in Mejillones from 2028 onwards,” Locke says.
“Our analysis indicates, based on today’s elemental sulphur price, a company-owned acid plant could produce sulphuric acid for US$70 per tonne, excluding by-product credits from heat generation.
“This represents an approximate 30% reduction from the current long-term acid price forecasts from Cochilco. This discount is even more significant if you consider current spot prices, which are artificially elevated by H2SO4 seaborn freight rates and strong demand from the global fertiliser industry.”
The sulphuric acid plant, which operated until 2015, produced up to 150,000 tonnes per year from elemental sulphur. The plant has been on care and maintenance since 2015.
Technical due diligence has been completed, including a site visit and a review of independent engineering reports.
Marimaca Copper is an explorer and developer focused on its wholly owned namesake copper project and surrounding exploration properties located in the Antofagasta region of Chile.
Write to Aaliyah Rogan at Mining.com.au
Images: Marimaca Copper
