TNR Gold is celebrating the release of a new economic report on its copper royalty project, Los Azules in Argentina.
The project’s operator, McEwen Mining Inc (TSX:MUX, NYSE:MUX), unveiled an updated Preliminary Economic Assessment (PEA) for Los Azules that showcased promising results, according to the company.
The PEA revealed a substantial increase in copper reserves, with estimated indicated resources of 10.9 billion pounds and inferred resources of 26.7 billion pounds.
The base case scenario for the project encompasses open-pit mining, heap leach extraction, and solvent extraction-electrowinning (SX/EW) processes. It anticipates an average annual copper cathode production of 401 million pounds during the initial five years of operation, reaching a total recoverable copper output of 8.68 billion pounds over the mine's 27-year lifespan.
Impressively, the after-tax net present value (NPV) stands at $2.66 billion, alongside an internal rate of return (IRR) of 21.2% and a payback period of 3.2 years, assuming a copper price of $3.75 per pound. The project's initial capital expenditure is estimated at $2.46 billion, with average cash costs projected at $1.07 per pound of copper.
Beyond economic viability, Los Azules demonstrates environmental responsibility. The estimated carbon intensity for Scope 1&2 GHG emissions is notably lower than the industry average, while water consumption is significantly reduced compared to conventional mining operations, according to McEwen.
The results were a boon for TNR Gold, which holds a 0.4% NSR on the project, of which 0.04% of the 0.4% NSR royalty is held on behalf of a shareholder.
CEO Kirill Klip told shareholders that the company was pleased by the “significant developments” McEwen has made to advance Los Azules towards feasibility, including bringing Stellantis as a strategic partner in the future development of the giant project.
“Strong team performance is accelerating the McEwen Copper Los Azules program in 2023,” Klip said in a statement.
“The 2023 Los Azules project PEA results highlight the potential to create very robust leach project, while reducing environmental footprint and greater environmental and social stewardship sets the project apart from other potential mine developments.
“It's very encouraging to see an updated independent mineral resource estimate that has increased significantly. Together with Nuton, McEwen Copper is exploring new technologies that save energy, water, time and capital, advancing Los Azules towards the goal of the leading environmental performance.”
Klip also highlighted the involvement of Rio Tinto, which the CEO believes may also “accelerate realizing the enormous potential of the Los Azules project.”
“An additional investment of US$30 million in McEwen Copper was also invested by Rio Tinto's Venture Nuton in 2023 after its initial investment of US$25 million in 2022," Klip added.
"TNR Gold's vision is aligned with the leaders of innovation among automakers like Stellantis, with the aim of decarbonizing mobility, and our mining industry leaders like Rob McEwen's vision 'to build a mine for the future, based on regenerative principles that can achieve net zero carbon emissions by 2038'.”
Los Azules was ranked in the top 10 largest undeveloped copper deposits in the world by Mining Intelligence (2022).
TNR Gold does not have to contribute any capital for the development of Los Azules.
Contact Angela at angela@proactiveinvestors.com
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