McEwen Copper, a subsidiary of McEwen Mining (NYSE: MUX; TSX: MUX), has closed the third and final tranche of its previously announced private placement of common shares priced at US$10 each.
This financing tranche comprised a US$25 million investment by Rio Tinto’s (NYSE: RIO; LSE: RIO; ASX: RIO) copper leaching technology venture, Nuton, and US$1.9 million from other investors. This brings the total amount raised under the offering to US$81.9 million.
The company recently completed a 10-for-1 share consolidation in order to stay listed on the New York Stock Exchange. The exchange has warned the company on Jan. 5 that the average trading price of its shares had fallen below the required $1-per-share level for the previous 30 trading days.
The proceeds of the financing will go towards the advanced-stage Los Azules project in San Juan, Argentina, where McEwen Copper plans to conduct drilling from October 2022 to June 2023 and complete an updated preliminary economic assessment (PEA) in early 2023.
The Los Azules copper project sits in the Andes Mountains at an elevation of 3,500 metres. Credit: McEwen Mining
The project’s most recent PEA completed in 2017 indicated a US$2.2 billion after-tax net present value (discounted at 8%) and 20.1% internal rate of return. During the first 10 years of the 36-year operation, it is anticipated to be the world’s 25th largest copper producer.
In connection with the financing, McEwen Copper has also entered into a collaboration agreement with Nuton to advance its understanding of the potential application of heap leach technology at Los Azules.
“Los Azules is among the largest undeveloped copper assets in the world. We recognize the potential opportunity of using Nuton Technologies to produce copper in greater amounts, more rapidly, and with less impact on the environment and water resources. I trust that our relationship with Nuton and Rio Tinto will accelerate the process of realizing the enormous potential of Los Azules,” McEwen Copper CEO Rob McEwen commented.
McEwen shares closed the day at $3.88, giving the company a market cap of $140.9 million.
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