Los Azules Copper Project – NI 43-101 Case Including Inferred PEA: $2.66B NPV, 21.2% IRR
McEwen Mining Inc.'s Los Azules Copper Project – NI 43-101 Case Including Inferred in San Juan Province, Argentina has a Preliminary Economic Assessment (PEA) outlining an after-tax NPV of $2.66B, an after-tax IRR of 21.2%, and initial capital of $2.46B. The proposed mine plan runs 27 years.
McEwen Mining Inc.'s Los Azules Copper Project – NI 43-101 Case Including Inferred has reported Preliminary Economic Assessment (PEA) results for the copper project in San Juan Province, Argentina. The study headlines an after-tax net present value of $2.66B at a 8% discount rate. It reflects McEwen Mining Inc.'s (MUX.TO) latest disclosed economics for the asset.
Economics. The after-tax NPV is $2.66B using a 8% discount rate. After-tax IRR is 21.2%. Initial capital expenditure is estimated at $2.46B, with life-of-mine sustaining capital of $2.24B. The study models a payback period of 3.2 years. All-in sustaining costs are pegged at 1.64 USD/lb Cu. Economics are based on Copper (Cu) - $3.75/pound; Gold (Au) - $1,700/ounce; Silver (Ag) - $20.00/ounce.
Production and mine plan. The project envisions an open-pit operation. Life of mine is 27 years. Metallurgical recovery averages 73%. The open-pit strip ratio is 1.16.
Resources and ownership. The company holds a 51.9% interest in the project.
These figures are extracted from McEwen Mining Inc.'s technical disclosures and reflect the most recent PEA on file. Compare this project against other developers and producers in our project economics database, and always verify the numbers against the original technical report before making any investment decision.
Our Analysis
- IRR after-tax
- 21.2%
higher than 48% of 27 projects we track
- NPV after-tax
- $2.66B
higher than 86% of 36 projects we track
- Initial capex
- $2.46B
93% of NPV
costlier than 75% of 40 projects we track
- Payback
- 3.2yrs
slower than 31% of 26 projects we track
- Mine life
- 27yrs
- Discount rate
- 8%
- Study price assumption
- Copper (Cu) - $3.75/pound; Gold (Au) - $1,700/ounce; Silver (Ag) - $20.00/ounce
- Spot copper today
- $6.75/lb
A US$2.46B initial build against a company worth roughly US$1.19B is the fact that governs everything else here. The capex is about 2.1x the entire market capitalisation, and at 93% of NPV it consumes nearly all of the value the study identifies. No small-cap board writes that cheque from the balance sheet. The realistic routes are a partner or offtaker carrying a large share, a joint-venture sell-down, heavy debt against a project-finance package, or equity issued at a discount to a depressed share price. Each of those transfers value away from existing holders, and the last one does so most bluntly. Note also that this sits within a portfolio of 35 projects the company tracks, so the decision is not existential for the company, but it is also not a build the company can quietly absorb.
The economics themselves are respectable rather than exceptional. A 21.2% after-tax IRR sits above the roughly 15% threshold developers typically need to attract project finance, which is the comparison that matters, but it ranks higher than only 48% of the 27 copper projects we track: firmly mid-pack. The after-tax NPV of US$2.66B ranks higher than 86% of 36 peers, and payback of 3.2 years is moderate, quicker than 69% of the 26 projects we track. That combination of a large NPV and a mid-table IRR is what a long-life, capital-hungry asset looks like: 27 years of production, with the return spread thin relative to the money committed. The 8% discount rate is a reporting convention and says nothing about whether this clears an investment hurdle.
Two caveats deserve weight. This is a scoping-level PEA, capital estimates at that stage carry a plus or minus 50% band, and inferred material may be included, so the US$2.46B could move materially in either direction. And the study assumes copper at US$3.75/lb against a live spot of US$6.75/lb, so the modelled returns may understate what today's market would deliver, though no study underwrites a build on spot. San Juan is a workable jurisdiction, but permitting and provincial terms remain part of the timeline. The question that decides this project is not the IRR: it is who funds US$2.46B, and on what terms existing shareholders keep their stake.
Our take, benchmarked against the project economics in the Mining Stocks database. Figures are estimates drawn from company technical reports — not investment advice; always verify against the source filing.