TNR Gold Corp (TSX-V:TNR, OTC:TRRXF) has updated on progress at the Los Azules copper project in Argentina held by McEwen Mining - an asset which could be bigger and more valuable than stated previously and where TNR holds a net smelter returns (NSR) royalty.
The company has a 0.4% NSR royalty on the property, including a 0.04% NSR held on behalf of a shareholder.
It cited a release from McEwen Mining on May 4 this year, which noted that Goldman Sachs forecasts that copper has only two years of supply growth left (2022 and 2023) and sees an open-ended supply decline starting from 2024.
"They see copper playing a big, critical role as an essential component in the global push to electrify transportation and to contain/reverse global warming," said McEwen. "They are not alone in thinking about copper this way. McKinsey's research is estimating that by 2030 copper demand will be outstripping supply by five to eight million tons per year."
READ: TNR Gold says sale of Josemaria Resources to Lundin Mining has now closed
McEwen Mining also highlighted that it had developed a second road at a lower altitude at the project to allow year-round access and that McLennan Design were designing systems and selecting innovative technologies to make the project regenerative.
"Additional drilling is confirming the mineralization size and grade compared to historic intercepts used to estimate the 2017 PEA [preliminary economic assessment] mineral resource estimate," it added.
"Whittle Consulting's Enterprise Optimization work, which will be outlined in our forthcoming updated PEA expected in Q1 2023, suggests that both the size and value of the Los Azules project have the potential to be significantly larger than was described in the 2017 PEA," said McEwen.
"Their analysis has provided important focus and direction for the detailed work underway, including guidance for drilling programs, metallurgical test work and trade-off studies for mining, processing and infrastructure."
A PEA in 2017 had a base case assuming a $3 per pound (lb) copper price with a 36-year mine-life operation and an after-tax net present value (NPV) of $2.2 billion. Today copper is above $4 per pound, noted McEwen.
McEwen also provided a timetable of planned events at Los Azules:
- Private placement financing - 2022
- Updated Preliminary Economic Assessment (PEA) - Q1 2023
- Initial public offering (IPO) - post updated PEA
- Prefeasibility Study (PFS) - H1 2024
TNR Gold Corp is working to become the green energy metals royalty and gold company. In the last 26 years, TNR, through its lead generator business model, has been successful in generating high-quality exploration projects around the globe.
Contact the writer at giles@proactiveinvestors.com