McEwen grows Los Azules copper count Article from The Northern Miner Magazine
VANCOUVER – With ten drill holes McEwen Mining (MUX-T) has boosted the copper resource at its Los Azules project
in Argentina by 20% compared to the last estimate just eight months ago, and the huge deposit remains open in every
A new resource estimate reduced the deposit's indicated count slightly compared to June estimate, leaving indicated
resources at 310 million tonnes grading 0.65% copper. Inferred resources, however, jumped 29% to reach 1.3 billion
tonnes grading 0.49% copper. Together the indicated and inferred resource tonnes contain 18.4 billion lbs. of copper.
Los Azules is a porphyry system in western San Juan province, which is home to a belt of porphyry copper deposits that
straddle the Chilean-Argentinean border. Some of the copper deposits in this belt rank among the largest in the world,
including Codelco's El Teniente and Andina mines, Anglo American's (AAL-L, AAUKY-Q) Los Bronces mine,
Antofagasta's Los Pelambres mine, and Xstrata's (XTA-L) El Pachon project.
Los Azules was already one of the world's largest undeveloped open-pit copper projects before the latest resource boost,
but until last year drills had not tested for mineralization below 650 metres depth. In 2012 McEwen changed that by drilling
six deep holes.
The results suggest that there remains much mineralization yet to discover at the project. The deep drill holes started to
identify a parallel trend to the west of the known Los Azules orebody, wherein mineralization occurs near surface and at
depth. For example, hole 1291 intersected 160 metres of 0.61% copper from 72 metres depth and then hit into 329 metres
of 0.49% copper from 562 metres downhole.
The depth part is interesting, as most of the 173 holes drilled at Los Azules to date have been shallow and therefore did
not test the deposit's deeper potential. The company will start to test that potential this year, with a 15,000-metre drill
program underway. McEwen says the deep holes completed in 2012 illuminated "many new exploration targets."
McEwen also plans to complete a new preliminary economic #$%$ment (PEA), which is expected in the third quarter of
the year. The new study will consider a large operation than was modeled in the original PEA, incorporate the new resource
tonnes, and #$%$ the potential to process low-grade material that was not considered in a heap leach scenario.
McEwen will also continue with metallurgical studies on producing a copper cathode at Los Azules instead of a
concentrate. Cathode production offers two advantages: it eliminates the need for a concentrate pipeline through Chile
and avoids Argentina's concentrate export tax.
The company is now free to forge ahead apace at Los Azules, after settling a lingering lawsuit in November. The dispute
dated back to 2009 and involved an option agreement between Xstrata and Minera Andes, the company that merged with
U.S. Gold to form McEwen Mining in early 2012. By the time it reached court late last year Xstrata's interest had also
changed hands and the dispute was between McEwen and TNR Gold (TNR-V).
In the settlement McEwen gained clear title to the claim in question; the piece of land is not home to any known mineralization
but would be needed if McEwen were to advance Los Azules to development. TNR retained its right to back-in for
25% ownership of certain claims in the northern half of the property, which are home to roughly 62% of the current Los
Azules resource. TNG can exercise that right after McEwen delivers a positive feasibility study and to earn its stake the
junior would have to pay two times the expenditures attributable to the back-in percentage, or 50% of the expenses on the
claims to that point. TNR also received 1 million share of McEwen.
McEwen's share price was little changed on news of the expanded Los Azules resource estimate, gaining 2¢ to close at
$3.08. The company has a 52-week share price range of $2.02 to $5.83.