Key Takeaways
McEwen Copper has signed an agreement with an international financial institution to manage a $2.4 billion loan, a major step toward funding its Los Azules copper project in Argentina. The debt represents 60 percent of the total $4 billion financing required to develop one of the world's largest untapped copper resources.
"I've already signed an agreement with an entity that handles the entire debt financing package with international export development agencies," Michael Meding, McEwen Copper's vice president and general manager, told Reuters. The firm did not name the institution but said an announcement was forthcoming.
The financing is structured with a 60-40 debt-to-equity split, leaving $1.6 billion to be secured from equity partners. The company is in talks with existing partner Rio Tinto, parent company McEwen Mining (MUX), and other industrial groups to raise the funds.
The development comes as McEwen Copper plans for an initial public offering of around $300 million toward the end of the year, with a target of October, November, or December. The move aims to capitalize on strong copper prices, which recently traded up 2.72% to $5.63 per pound.
Situated 3,500 meters above sea level in the Andean province of San Juan, Los Azules is among the world's 10 largest undeveloped copper projects. It is positioned to become the first mine in Argentina to produce copper cathodes, with a projected start date around 2029 or 2030. A recent feasibility study outlined a 22-year mine life, with the potential to extend to 33 years.
During its first five years of operation, the mine is expected to produce an average of approximately 204,800 metric tons of copper cathodes annually.
The project has already attracted significant investment from major industry players. Rio Tinto holds a 17.2% stake in Los Azules through its Nuton LLC technology venture, which has invested $100 million. Automaker Stellantis holds an 18.3% stake after investing around $275 million to secure raw materials for electric vehicle batteries.
McEwen Copper's parent, McEwen Mining, has seen its shares rise about 14.3% since the beginning of the year. The company recently reported quarterly earnings of $0.47 per share, beating consensus estimates of $0.32, though its revenue of $74.05 million missed analyst expectations.
This article is for informational purposes only and does not constitute investment advice.
