McEwen Mining’s (TSX:MUX) copper unit is reportedly in talks with Rio Tinto (ASX:RIO) and other potential investors over a financing package of up to US$4 billion ($5.6 billion) for its flagship Los Azules Copper Project in Argentina.
According to Bloomberg, McEwen Copper is considering several funding options for the San Juan province project, which it is targeting to bring into production in 2030.
Among the options is a US$600 million equity investment from existing shareholders, McEwen Copper’s Managing Director Michael Meding told Bloomberg.
This could include Rio Tinto-backed Nuton, which owns around 17% of McEwen Copper and has been involved in evaluating its proprietary copper leaching technology for Los Azules.
Another US$600 million could come from a new equity investor, potentially a trading house or industrial group from Europe or Asia, alongside possible investments from specialised mining funds, Meding says.
Parent company McEwen currently has a 46.3% interest in the project.
‘Generational’ copper asset
Los Azules is considered one of the world’s largest undeveloped copper porphyry deposits.
A Feasibility Study last year outlined a 21-year mine life with average annual copper cathode production of approximately 148,200 tonnes.
The project has already received approval for its Environmental Impact Statement covering construction and exploitation. It also qualified for Argentina’s Large Investment Incentive Regime (RIGI), which provides eligible projects with potential tax, customs, and foreign exchange benefits.
Initial development costs for Los Azules are estimated at US$3.17 billion.
Funding options
To fund construction, McEwen Copper is looking at a combination of investments from existing and new partners, global lenders, and specialised mining funds.
The company is also planning an initial public offering that could raise around US$300 million.
The broader financing package under discussion could total as much as US$4 billion, according to Bloomberg.
Meding says the timing of a final investment decision will depend partly on the board’s confidence in the financing plan.
Another consideration in selecting a larger strategic partner will be ensuring that any deal allows McEwen Copper to maintain Los Azules’ development schedule and its targeted 2030 production start.
Write to Jackson Chen at Mining.com.au
Image: McEwen
