McEwen Copper provides update on Los Azules in Argentina

The McEwen Copper division, 81% owned by McEwen Mining (TSX: MUX; NYSE: MUX) is advancing work on the Los Azules project in Argentina’s San Juan province, having closed the first tranche of a US$40 million private placement. The second tranche is expected to close shortly.

The company is preparing a 53,000-metre drill program to upgrade inferred resources to the indicated category. The first of two drill rigs are expected to arrive in November, and the full complement of ten rigs by January 2022.

Crews are building a road to access the Los Azules site. About 78 km or three-quarters of the length has been done, with the remainder to be completed in the second half of 2022.

The project is located at an elevation of 3,500 metres in the Andes Mountains, on the border of Argentina and Chile.

The preliminary economic assessment for Los Azules gave the project a 36-year life at an initial capex of US$2.4 billion. The after-tax net present value, with an 8% discount rate, is US$2.2 billion, and the after-tax internal rate of return is 20.1%. The project will pay for itself 3.6 years after production begins.

Los Azules hosts an indicated resource of 962 million tonnes grading 0.48% copper, 1.8 grams silver per tonne and 0.06 gram gold per tonne. In terms of contained metals, there are 10.2 billion lb. of copper, 55.7 million oz. of silver and 1.7 million oz. of gold.

The inferred portion is 2.7 billion tonnes grading 0.33% copper (19.3 billion contained lb.), 1.6 grams silver per tonne (135.4 million contained oz.), and 0.04 gram gold per tonne (3.8 million contained ounces).

The PEA was prepared in 2017 using US$3 per lb. copper, US$17 per oz. silver, and  US$1,300 per oz. gold.

The first phase of development will create an open pit mine at a rate of 80,000 tonnes per day, and the second phase will increase the rate to 120,000 tonnes per day. The on site mill will produce concentrate by SAG-pebble-ball milling, followed by flotation, thickening and filtering. Life-of-mine recovery of copper to concentrate is expected to be 91% at a concentrate grade of 30% copper.