McEwen Mining (NYSE: MUX) (TSX: MUX) said on Thursday that its McEwen Copper unit has secured an additional $35 million investment from Nuton, a leaching technology venture created by Rio Tinto, to support the feasibility study for its Los Azules copper project in San Juan, Argentina.
In June, McEwen Copper announced a private placement financing of up to $70 million through the issuance of approximately 2.33 million shares at $30 per share. Under the first tranche, the McEwen unit received a $14 million investment its parent company and a $5 million investment from Rob McEwen, its chairman and chief owner.
Nuton’s $35 million investment represents the second tranche of that financing, with the purchase of nearly 1.17 million shares. Two other investors also participated in this tranche for a total of $2 million.
Together with the first tranche, McEwen Copper has now raised a total of $56 million for the Los Azules project.
Los Azules project
Los Azules is an open-pit copper deposit located 80 km northwest of the town of Calingasta and 6 km east of the border with Chile at an elevation of 3,500 metres in the Andes Mountains. The extent of mineralization along strike exceeds 4 km and the distance across strike is approximately 2.2 km.
The copper resource contains 10.9 billion lb. in ore that grades 0.40% copper in the indicated category and 26.7 billion lb. in material averaging 0.31% copper in the inferred category. This resource is expected to support average production of 322 million lb. of copper in cathodes per year over a projected 27-year life.
According to a June 2023 preliminary economic assessment, Los Azules would have an estimated after-tax net present value (at a discount rate of 8%) of $2.7 billion and internal rate of return of 21.2%, based on an assumed copper price of $3.75/lb. Its payback period is 3.2 years.
McEwen Copper is currently working a bankable feasibility study for the project, which is scheduled for publication in the first half of 2025.
Shareholding update
The copper subsidiary was created by McEwen Mining in mid-2021 with a view of maximizing the value of its copper assets. A year later, it received its first investment from Nuton, while also establishing a partnership with the Rio venture to assess the potential application of its heap leach technology at Los Azules.
According to the companies, heap leaching would offer superior economic and environmental benefits over the conventional milling methods. The project is also expected to be powered by 100% renewable energy, with a commitment to reach carbon neutrality by 2038.
Following the latest round of financing, Nuton now owns 17.2% of McEwen Copper on a fully diluted basis, nearly doubling its initial shareholding. Its other notable shareholders are: McEwen Mining (46.4%), Stellantis (18.3%), Rob McEwen (12.7%) and Victor Smorgon Group 3.0%.
With the new share issuances, McEwen Copper now has approximately 32.8 million common shares outstanding, giving it a post-money market value of $984 million.
Source: MINING.COM – Read More
