McEwen Copper closes US$240 million term loan facility
McEwen Mining Inc.’s [MUX-TSX, NYSE] 46.3%-owned subsidiary McEwen Copper Inc. has closed a US$240 million senior secured four-year term loan facility with a syndicate of lenders. Participants include Sprott Natural Resources Investment Partners for $112 million, Rob McEwen, Chairman and CEO of the company, for $85 million, and other lenders for $43 million.
The proceeds of the term loan will be used to continue advancing engineering and early works at the Los Azules copper project in San Juan, Argentina, and for general corporate purposes. A final investment decision and full project financing is expected in mid-2027, with commercial copper cathode production targeted for 2030, subject to project financing and customary approvals.
The principal amount of the term loan will bear interest at 12.0% annually, payable monthly, with a four-year term and the principal amount due on maturity. The term loan can be repaid in full or in part prior to maturity upon payment of the remaining principal and accrued interest plus a fee equal to 5.0% of the remaining principal. In connection with the term loan, lenders also received 15,000 five-year McEwen Copper common share purchase warrants for each $1.0 million of principal, with an exercise price of $40 a share.
Los Azules is a shovel-ready project designed to be one of the world’s first regenerative copper mines and carbon neutral by 2038. The project is located in San Juan province, Argentina – a region that hosts some of the country’s largest copper deposits.
McEwen Inc. has a 46.3% interest in McEwen Copper. Based on McEwen Copper’s last financing in October, 2024, the implied value of McEwen Inc.’s ownership interest was $456 million. Since then, the value of Los Azules has improved for three key reasons. The copper price is 50% higher. The company has completed a feasibility study using a US$4.35 per pound copper price. Also, Los Azules received approval under Argentina’s Large Investment Regime, which significantly improves the economics of the project.
On Friday, McEwen Inc. shares gained 0.900% or 27 cents to $30.29. The shares trade in a 52-week range of $40.07 and $14.99.
McEwen also owns a 1.25% net smelter royalty on Los Azules. Based on the 2025 feasibility study and using a recent copper spot price of US$6.50 per pound, McEwen’s royalty is projected to generate approximately $584 million from the initial case and $860 million from the potential Nuton extension, for a combined undiscounted pretax royalty cash flow of approximately $1.4 billion.
McEwen also recently purchased 27.3% of Paragon Advanced Labs Inc. [PALS-TSXV], a newly-listed public company that is deploying PhotonAssay units around the world, a technology that the company believes is poised to become the new industry standard for assaying precious and base metals, with Paragon aiming to be one of the leading service providers. On Friday, the shares rose 4.17% or 13 cents to $3.25.