TNR Gold Corp (TSX-V:TNR, OTC:TRRXF) executive chairman Kirill Klip talked with Proactive about the latest developments at the company, following McEwen Copper’s announcement that its Los Azules copper project in Argentina has joined the country’s Large Investment Incentive Regime.
Klip said the inclusion marks a “major milestone” for TNR Gold’s green energy metals, royalty, and gold business, paving the way for the upcoming feasibility study and potential construction decision.
He emphasized that the regime provides crucial legal and fiscal stability, noting “we are talking about the most important thing in mining — certainty.”
Proactive: Hello, you’re watching Proactive. Joining me is TNR Gold executive chairman Kirill Klip. Kirill, very good to speak with you. McEwen Copper has announced that its Los Azules project in Argentina has joined Argentina's Large Investment Incentive Regime. Tell us more about that, because it sounds like good news.
Kirill Klip: Yes, good afternoon. We have another major milestone for our green energy metals, royalty, and gold company, TNR Gold. Rob McEwen announced that Argentina accepted the giant Los Azules copper project into the program of Argentina's large incentives. So now we have a clear way toward the feasibility study and the following construction decision, hopefully.
What are some of the key benefits of the regime? What do they mean for the project?
These benefits are crucial for the economic assessment of the project. The most important thing in mining is certainty — legal certainty. We’re talking about a 30-year plan. Los Azules has a mine life of 27 years, and now we can count on stability in Argentina.
Another very important aspect is the reduction of the tax rate to 25%, the reduction of the dividend tax rate by up to 50%, and a very favorable foreign exchange regime and smoother customs transition of goods. All these are important for this giant copper, gold, and silver project, and they can now be incorporated into the upcoming feasibility study.
So what are the next steps as you move toward that feasibility study and eventual construction of the project?
It’s very important that Rob McEwen and his team can now incorporate all these economic benefits into the upcoming feasibility study. We expect an increased mineral resource because the previous preliminary economic assessment, released in June 2023, only included drilling results up to December 2022.
Hopefully, this very large project — already among the ten largest copper projects in the world — could become even larger. It currently hosts 10.9 billion pounds of copper in the indicated category and 26.7 billion pounds in the inferred category. Rob McEwen compares it to a giant gold project with around 50 million ounces of gold equivalent.
Financing is also coming together. The IFC has supported McEwen Copper through a key collaboration. Another positive aspect?
Yes, this was another very important development for Los Azules. The IFC has made a collaboration agreement with McEwen Copper, paving the way for project financing. The IFC could become an equity partner and also the lead lender for the project’s construction.
It’s a vote of confidence for the project and for Argentina as a whole. Rob McEwen also aims to produce not copper concentrate, but copper plate ready for direct use by other producers.
Can you comment on M&A activity in the royalty space and what that means for the potential valuation for TNR Gold’s NSR on Los Azules?
Yes. With rising gold and copper prices, we’re seeing a lot of M&A activity among royalty companies. It’s a small space with only a few dozen players, and there’s strong interest in our NSR royalty on Los Azules.
Rob McEwen estimated his royalty could be as high as $100 million, which gives us a potential valuation of over $30 million for our NSR royalty. That might even be conservative.
Fundamental Research recently issued a new report on TNR Gold, increasing our share price target from $0.28 to $0.30. They estimate that at current copper prices, we could be talking about potential $10 million per year in cash royalty generation when the project reaches production.
We’ve already delivered a 100% plus increase in TNR Gold’s share price this year, and now we’re working toward another major milestone — another 100% increase in market valuation, hopefully this year.
Quotes have been lightly edited for clarity and style