TNR Gold Corp (TSX-V:TNR, OTC:TRRXF) recently provided significant updates on its Los Azules copper project in Argentina. The company highlighted the recent $70 million financing round announced by McEwen Copper with Rob McEwen himself investing $5 million and McEwen Mining contributing another $14 million. This comes after substantial previous investments by Rob McEwen, Rio Tinto, and Stellantis.
TNR Gold's Executive Chairman Kirill Klip discussed potential valuations for the company’s net smelter return royalty from Los Azules, drawing comparisons with similar deals in the industry. The project is projected to bring TNR Gold close to $6 million annually in royalty revenue, with the potential for significant increases based on market conditions and resource expansions.
Proactive: What can you share with us about a $70 million financing announced by McEwen Copper for Los Azules?
Kirill Klip: It's another very important milestone for the development of the giant Los Azules copper, gold and silver project in Argentina. As you know, we are building TNR Gold, the green energy metals royalty and gold company, and we have an NSR royalty on the entire Los Azules copper project in Argentina.
We now have another significant development for the project. Rob McEwen has announced a financing round of $70 million. Most importantly for all shareholders of TNR Gold and our investors, Rob McEwen is personally participating again in this financing, with an investment of $5 million. McEwen Mining is joining him with an additional $14 million. This round of investment follows previous contributions by Rob McEwen, totaling over $40 million, Rio Tinto's $65 million, and a major European automaker, Stellantis, investing over $275 million. We have also seen reports on Bloomberg indicating that a major energy company in Argentina is interested in investing in Los Azules. It will be very interesting to see the final round of investors in McEwen Copper this time.
This latest financing is helping to advance the project to a bankable feasibility study. That's due for completion in the first quarter of next year, right?
Yeah, this is correct. It's so important because of the timing. As you know, timing means everything in markets and for mining. We're celebrating these days and groundbreaking victory for the new president of Argentina, Javier Milei. Argentina's Congress approved his groundbreaking pro reform, measures for legislation in order to cut red tape for the projects like Los Azules. We are talking about measures aimed at providing tax cuts and other additional benefits for the projects. All investors in Argentina are now receiving the most business-friendly message from the country.
In the meantime, there's been a new update from Fundamental Research Corporation on TNR gold. What does that say about the project?
Fundamental Research Corp has updated its coverage of TNR Gold. It issued a previous update in September, and since then our company was up 40%. Now they have reiterated their Buy rating and a higher target price. All our shareholders should check out the reports themselves. I have to mention that this report doesn't provide the view of the management, as always, but it provides a very good matrix for valuation for all shareholders and investors for their own due diligence of our company.
Looking at valuations Kirill, with the M&A activity in the royalties space, what does that say about the potential valuations for your NSR royalty from Los Azules?
With all of this news from Argentina about positive business friendly environment over there. With all of the milestones reached by the team or Rob McEwen who are doing wonderful job over there –they just finished the feasibility drilling and may soon release another increase in resource for this project – we are basically moving closer to potential valuations. Previously I discussed that our royalty could be valued as high as $30 million, based on the deal which was done by Osisko Gold on the Sol Gold project in Ecuador. Robert McEwen estimated that his own royalty on Los Azules Copper could be valued as high as $100 million.
Looking at fundamentals, you can easily understand why we are talking about such important numbers today. Goldman Sachs issued an investment note predicting copper prices to reach $6 per pound this year. Copper hit an all-time high of $5.19 per pound in May. We are discussing Los Azules, which could bring TNR Gold close to $6 million in potential royalty revenue annually. This is based on the increased production of 180,000 tonnes of copper annually in Argentina over a 27-year mine life.
We are looking forward to all the upcoming news, and it will be very interesting to see new investors coming into McEwen Copper to advance this giant project, especially with the recent pro-business news from Argentina.