McEwen Mining Inc (MUX)

[JD400]

COPPER OUTLOOK | MCEWEN MINING $MUX

12February 2022

McEwen Mining is planning to undertake an initial public
offering of McEwen Copper and the Los Azules copper
project, in San Juan, Argentina, later this year after
completing an updated preliminary economic assessment
(PEA), additional resource drilling and the construction of a
road to provide year-round access. Los Azules porphyry
copper-gold deposit is one of the world’s largest
undeveloped copper projects not owned by a major mining
company. The project currently has a total resource of 32.9
billion pounds copper equivalent (29.5Blb copper, 5.5
million ounces gold and 191Moz silver).
Investors are warming to Argentina as an investment
destination on the back of several significant transactions in
the lithium space, as well as in the copper space. The
country is showing the ability to provide metals for the
energy transition, and San Juan province has the potential
to become a hub for copper development through the
advancement of projects such as Los Azules.
“There is a long history of mining in San Juan. Majors active
in the province include Barrick Gold, Shandong Gold,
Glencore, Fortescue Metals and the Lundin Mining group of
companies,” said McEwen Mining chair and chief owner
Rob McEwen. “And we are aware that Anglo American and
Vale have been looking at development opportunities in the
province.
“Factors driving this interest are: one, the abrupt political
shift to the left in Chile and Peru; two, the undeveloped
geological potential of Argentina; three, the improved
prices of metals; and four, the large foreign investments
being made to develop Argentina’s Lithium resources.
“All of these factors are giving greater comfort to foreign
investors and the government is laying-out the
welcome mat.”
Los Azules has been something of an orphan in McEwen
Mining’s portfolio of predominantly gold projects,
particularly through the bear market years where advancing
it towards development seemed like a pipe dream. But with
the copper price rising from a low of about US$2 per pound
two years ago, to over $4 per pound today, and a supply
deficit forecast, a deposit like Los Azules has become a very
attractive asset and one that merits the investment to
advance towards a production decision. Exploring and
developing a porphyry copper deposit is an expensive
business, which is why McEwen Mining is putting the asset
into a new vehicle, McEwen Copper.
The parent company will initially retain 68% ownership
McEwen Copper and a 1.25% net smelter return royalty,

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