TNR Gold Corp (TSX-V:TNR, OTC:TRRXF) has issued an update on the Los Azules copper project in San Juan, Argentina, in which it holds a 0.4% net smelter returns (NSR) royalty.
The project is held by McEwen Copper Inc, a subsidiary of McEwen Mining, which announced on August 31 that it closed the third and final tranche of a previously announced private placement offering of up to 8 million McEwen Copper common shares priced at $10 each.
The third tranche is comprised of a $25 million investment by Rio Tinto Limited's copper leaching technology venture, Nuton, and $1.85 million from other investors. The total offering has been increased to nearly 8.2 million common shares, with the amounts raised in the three tranches of the private placement reaching $81.85 million, the company said.
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McEwen Copper is therefore well-funded to advance the Los Azules project, the next steps for which are drilling from October 2022 to June 2023, the completion of an updated preliminary economic assessment in the first quarter of 2023 and the planned IPO of McEwen Copper in the first half of 2023.
In conjunction with the offering, McEwen Copper entered into a collaboration agreement with Nuton to explore the potential application of heap leach technology at Los Azules. This includes testing Nuton technology for compatibility with Los Azules copper mineralization, the company said.
Leaching has many potential economic and environmental benefits over a conventional milling scenario, a McEwen release noted, including lower water and energy consumption, no large tailings storage facility or dam, and typically lower capital and operating costs.
“Los Azules is among the largest undeveloped copper assets in the world,” McEwen Copper CEO Rob McEwen said in a statement. “We recognize the potential opportunity of using Nuton Technologies to produce copper in greater amounts, more rapidly, and with less impact on the environment and water resources. I trust that our relationship with Nuton and Rio Tinto will accelerate the process of realizing the enormous potential of Los Azules.”
Under the terms of the deal, Nuton will invest $25 million in McEwen Copper and acquire 2.5 million common shares for post-closing ownership of 9.73%. McEwen Copper and Nuton will jointly undertake copper leach testing using Nuton tech with samples from Los Azules.
Accordingly, McEwen agreed to grant exclusivity to Nuton for one year in the area of novel, patented or trade secret leaching technology, while it continues its own independent test work and studies with conventional leach technologies.
TNR Gold CEO Kirill Klip told shareholders that the company is "pleased to see sgnificant developments on the Los Azules project and continued support by Rob McEwen of McEwen Copper."
"It's very encouraging to see the opportunity to expand the deposit, and the involvement of Rio Tinto, which may accelerate realizing the enormous potential of the Los Azules Project with Rio Tinto's innovative technology," Klip added.
"The personal commitment from Rob McEwen and his investment of US$40 million enabled the rapid advancement of this deposit to this new phase of development in an appropriate corporate structure. McEwen Copper has raised more than US$81 million and is well positioned for further stages of development of the Los Azules project."
TNR Gold does not have to contribute any capital for the development of Los Azules, Klip noted.
"The essence of our business model is to have industry leaders like McEwen Mining as operators on the projects that will potentially generate royalty cashflows to contribute significant value for our shareholders."
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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