The McEwen Copper division, 81% owned by McEwen Mining (TSX: MUX; NYSE: MUX) is advancing work on the Los Azules project 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 10 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 in San Juan Province, Argentina, is located at an elevation of 3,500 metres in the Andes Mountains, on the border with 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 8% discount, 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 g/t silver and 0.06 g/t gold. 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 g/t silver (135.4 million contained oz.), and 0.04 g/t gold (3.8 million contained oz.)
The PEA was prepared in 2017 using US$3/lb. copper, US$17/oz. silver, and US$1,300/oz. gold. The first phase of development will create an open pit mine at a rate of 80,000-t/d, and the second phase will increase the rate to 120,000 t/d. 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.
Learn more at www.McEwenMining.com.