Los Azules Copper Project (Phase 1 Base Case 175 ktpa Cu) PEA: $2.23B NPV, 21.5% IRR
McEwen Mining Inc.'s Los Azules Copper Project (Phase 1 Base Case 175 ktpa Cu) in San Juan Province, Argentina (Andes, near Chile border) has a Preliminary Economic Assessment (PEA) outlining an after-tax NPV of $2.23B, an after-tax IRR of 21.5%, and initial capital of $2.45B. The mine plan runs 17 years at about 175 ktpa Cu cathode per year.
McEwen Mining Inc.'s Los Azules Copper Project (Phase 1 Base Case 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 $2.23B 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 $2.23B using a 8% discount rate. After-tax IRR is 21.5%. Initial capital expenditure is estimated at $2.45B, with life-of-mine sustaining capital of $1.88B. The study models a payback period of 3.4 years. All-in sustaining costs are pegged at 1.54 USD/lb Cu. Economics are based on Copper $3.75/lb; Gold $1,700/oz; Silver $20.00/oz (long-term pricing used in project economic analysis); resource pit used $4.00/lb Cu..
Production and mine plan. The project envisions an open-pit operation. Life of mine is 17 years. Average annual production is approximately 175 ktpa Cu cathode. Metallurgical recovery averages 73%. The open-pit strip ratio is 1.29.
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
- 21.5%
higher than 50% of 30 projects we track
- NPV after-tax
- $2.23B
higher than 85% of 39 projects we track
- Initial capex
- $2.45B
110% of NPV
costlier than 74% of 43 projects we track
- Payback
- 3.4yrs
slower than 34% of 29 projects we track
- Mine life
- 17yrs
- Discount rate
- 8%
- Study price assumption
- Copper $3.75/lb; Gold $1,700/oz; Silver $20.00/oz (long-term pricing used in project economic analysis); resource pit used $4.00/lb Cu.
- Spot copper today
- $6.62/lb
A US$2.45B build against a US$1.17B market capitalisation is the fact that governs everything else here. The capex is roughly 2.1 times the company's entire equity value, and at 110% of NPV the study effectively asks investors to fund the asset twice over. A small-cap cannot write that cheque from the balance sheet, and a diversified portfolio of 46 projects does not change the arithmetic: this is a project-finance and partner-scale problem, and the realistic routes are a joint-venture sell-down, streaming, or equity issued at a discount to the current price. Each of those transfers value away from existing holders, which is the real cost of the headline return.
That return is respectable rather than exceptional. The 21.5% after-tax IRR sits above the roughly 15% hurdle developers typically need to attract project finance, and it ranks in the upper half of the 30 copper projects we track. The US$2.23B after-tax NPV ranks above 85% of the 39 copper projects we track, and payback of 3.4 years is moderate, quicker than 66% of the 29 we track. Those are genuine strengths, but they are study outputs, not cash.
The qualifier is the study itself. This is a PEA, scoping-level, potentially carrying inferred material and a capital estimate with a plus or minus 50% band, so the US$2.45B could move materially in either direction before a feasibility study fixes it. The 17-year mine life is the counterweight: it suggests a durable asset rather than a short, capital-hungry one, and Argentina's San Juan province is a recognised Andean copper address. Note also that the study assumes US$3.75/lb copper against a live spot of US$6.62/lb, so the economics carry real upside if that gap holds. The question that decides this: can the company fund a build worth more than twice its own value without handing the project to whoever signs the cheque?
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.