Los Azules Copper Project – NI 43-101 Including Inferred (175 ktpa Cu) PEA: $2.66B NPV, 21.2% IRR
McEwen Mining Inc.'s Los Azules Copper Project – NI 43-101 Including Inferred (175 ktpa Cu) in San Juan Province, Argentina (Andes, near Chile border) 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 mine plan runs 27 years at about 175 ktpa Cu cathode per year.
McEwen Mining Inc.'s Los Azules Copper Project – NI 43-101 Including Inferred (175 ktpa Cu) has reported Preliminary Economic Assessment (PEA) results for the copper project in San Juan Province, Argentina (Andes, near Chile border). 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 $3.75/lb; Gold $1,700/oz; Silver $20.00/oz..
Production and mine plan. The project envisions an open-pit operation. Life of mine is 27 years. Average annual production is approximately 175 ktpa Cu cathode. 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 50% of 30 projects we track
- NPV after-tax
- $2.66B
higher than 87% of 39 projects we track
- Initial capex
- $2.46B
93% of NPV
costlier than 77% of 43 projects we track
- Payback
- 3.2yrs
slower than 34% of 29 projects we track
- Mine life
- 27yrs
- Discount rate
- 8%
- Study price assumption
- Copper $3.75/lb; Gold $1,700/oz; Silver $20.00/oz.
- Spot copper today
- $6.62/lb
A $2.46B build against a US$1.17B market capitalisation is the fact that governs everything else here. The capex is roughly 2.1x the entire equity value of the company, and 93% of the after-tax NPV. A company this size cannot fund that from cash flow or a standard debt package; the realistic routes are a partner or offtaker carrying a large share, a joint-venture sell-down, or heavy equity issuance. Each of those transfers value away from existing holders, and the dilution maths matters more to the outcome than any line in the study. The mitigating factor is the portfolio: this is one of 46 projects the company tracks, not a single-asset developer betting the company on one hole in the ground, which broadens the financing options but also means the asset has to compete internally for capital.
The economics themselves are respectable without being exceptional. A 21.2% after-tax IRR ranks in the upper half of the 30 copper projects we track, and it clears the roughly 15% after-tax threshold developers typically need to attract project finance. Payback of 3.2 years is moderate, faster than 66% of the 29 copper peers we track, which matters because it shortens the window in which the balance sheet is exposed. The after-tax NPV of $2.66B ranks above 87% of the 39 copper projects we track. The 8% discount rate is a reporting convention, not a hurdle, and carries no signal.
Two caveats should temper the numbers. This is a scoping-level PEA, which may rest on inferred resources and typically carries a capital estimate accurate to plus or minus 50%, so the $2.46B could move materially in either direction. And the study assumes copper at $3.75/lb against a live spot of $6.62/lb, so the returns are built on a price well below today's market, leaving genuine upside if spot holds. The jurisdiction is a known Andean copper belt, though Argentina carries permitting and capital-controls risk that a diversified major would price in. The question that decides this: can the company bring in a partner on terms that fund the build without gutting existing holders?
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.