McEwen Mining Inc. [MUX-TSX, NYSE] has provided production guidance for 2021 of an expected 141,000 to 160,400 gold equivalent ounces (GEOs) and is discussing one of its most valuable yet underappreciated assets, the 100%-owned Los Azules copper project in Argentina. Beyond the potential of the company’s gold and silver assets, Los Azules provides McEwen with large indirect exposure to the growth of the electric vehicle market, renewable energy and the continuing urbanization of Asia.
Rob McEwen, Chairman and chief owner, stated: “According to a study (preliminary economic assessment published in 2017), Los Azules has the potential to generate strong returns at a $3/lb copper price. Here are some of the highlights: a 36-year mine life; capex of $2.4-billion, a payback in 3.6 years and annual production in the first 13 years of 410 million pounds of copper at a cost of $1.14 per pound. In terms of value, using today’s metal prices of gold at US$1,834/oz, silver atUS$26.17/oz and copper at US$3.51/lb, that approximately 522 pounds of copper are equal to one ounce of gold or 70 ounces of silver, and 7.5 pounds of copper are equal to one ounce of silver.”
Los Azules has Indicated resources of 10.2 billion lbs copper, 1.7 million oz gold, 57.3 million lbs molybdenum and 55.7 million oz silver. Inferred resources are 19.3 billion lbs copper, 3.8 million oz gold, 194.0 million lbs Mo and 135.4 million oz silver.
“We are concurrently working on two alternatives to fund the advancement and development of Los Azules,” said McEwen. “One alternative is to joint venture with a senior industry player to bring the project into production. The other alternative is to spin out Los Azules into a separate company and raise funds for it to aggressively advance the project towards a production decision. With the increasing copper price, we have received a heightened level of interest in Los Azules from major mining companies.”
“We are forecasting our 2021 gold equivalent production to be in the range of 141,000 to 160,400 gold equivalent ounces using a gold:silver ratio of 75:1. These production levels represent a 21% to 38% improvement over 2020,” added McEwen.