McEwen in talks to sell Argentina copper interest
McEwen Mining Inc. [MUX-TSX, NYSE] is in talks to sell an interest in its wholly-owned Los Azules project in Argentina in a bid to capitalize on the recent spike in the price of copper, published reports say.
Los Azules is an advanced-stage porphyry copper exploration project located in the cordilleran region of San Juan Province, Argentina near the border with Chile. It currently ranks as one of the world’s largest undeveloped high-grade open pit copper projects and features significant growth potential, McEwen has said.
Inferred resources at the site stand at 962 million tonnes, containing 10.2 billion pounds of copper, 55.7 million ounces of silver, and 1.7 million ounces of gold.
“The market seems to prefer a pure copper play as opposed to a large copper project in a smaller precious metals company,” said McEwen Mining CEO Rob McEwen during an interview with Bloomberg News Service.
“With the interest in copper prices, there is more interest.”
McEwen has described Los Azules as “one of the larger undeveloped copper projects in the world not owned by a major,” with the potential to produce 415 million pounds of copper annually on average for the first 10 years, according to a 2017 preliminary economic assessment.
Average cash production costs for the first 10 years are pegged at US$1.11 per pound.
After hitting a near record high of US$4.67 a pound in May, 2021, copper is currently trading at US$4.27 a pound following a sharp correction down to US$4.16 in June, 2021.
McEwen said he is holding talks with another mining company as part of a proposal that could see a portion of the copper project sold privately and then taken public within 12 months.
On Wednesday, McEwen shares rose 3.7% or $0.06 to $1.70 on volume of 299,140. The shares are currently trading in a 52-week range of $2.07 and $1.15.
McEwen is a gold and silver producer with a focus on the Americas, including the U.S., Canada, Mexico and Argentina.
The company’s key assets are the San Jose mine in Santa Cruz, Argentina, the Black Fox mine in Timmins, Ontario, the El Gallo Fenix project in Mexico, the Gold Bar mine in Nevada.
Any sale of a all or part of the Los Azules copper project would allow McEwen to focus more closely on its precious metals assets.
The company has said it expects to produce between 141,000 and 160,400 ounces of gold equivalent ounces (GEOS) this year an amount that would represent a 21% to 38% improvement over 2020.
That includes 37,000 and 45,000 GEOs this year from its Gold Bar mine in Nevada.