8-K: McEwen Copper's Los Azules Study Confirms Robust Project

McEwen Copper Inc. announces positive feasibility study results for its Los Azules copper project, confirming strong economics and leading ESG performance.

Summary

• The Los Azules copper project has an after-tax Net Present Value (NPV) at an 8% discount rate of $2.9 billion and an Internal Rate of Return (IRR) of 19.8%.
• The project is projected to have a payback period of 3.9 years after taxes.
• Average copper cathode production is estimated at 204,800 tonnes per year (451 million lbs/yr) during the first five years of operation.
• Over the 21-year life of mine, average annual production is expected to be 148,200 tonnes per year (327 million lbs/yr).
• Initial capital cost is estimated at $3.17 billion.
• Operating costs are projected at a C1 cash cost of $1.71/lb and an All-in Sustaining Cost (AISC) of $2.11/lb.
• Proven & Probable Mineral Reserves total 10.2 billion lbs of copper (1.02 billion tonnes at 0.45% Cu).
• The project is designed for low environmental impact, featuring 72% lower mine-to-metal carbon intensity than the industry average, 100% renewable power, 74% less water use than conventional milling, and no tailings dam.
• The Environmental Impact Statement (EIA) for construction and operation was approved by the San Juan Provincial Government in December 2024.
• Los Azules was accepted into Argentina's Large Investment Incentive Regime (RIGI) in September 2025, providing tax, foreign exchange, and customs stability for 30 years.

Sentiment

Score: 9

Explanation: The feasibility study confirms robust economics, strong production, and leading ESG performance for the Los Azules project, significantly de-risking the project through regulatory approvals and strategic financing partnerships. The project is well-positioned for future growth and contributes to the clean energy transition.

Positives

• Strong after-tax economics with an NPV(8%) of $2.9 billion and an IRR of 19.8%, demonstrating high profitability.
• Rapid payback period of 3.9 years, indicating efficient capital recovery.
• Significant copper production capacity, averaging 204,800 tonnes/year (451M lbs/yr) for the first five years, an increase of 50 million lbs per year compared to the 2023 PEA.
• Competitive operating costs with a C1 cash cost of $1.71/lb and AISC of $2.11/lb.
• Substantial Proven & Probable Mineral Reserves of 10.2 billion lbs Cu, supporting a 21-year mine life.
• Leading ESG performance, including 72% lower carbon intensity, 100% renewable power, 74% less water consumption, and no tailings dam, with a goal for carbon neutrality by 2038.
• Significant de-risking through regulatory approvals: EIA approved in December 2024 and acceptance into Argentina's RIGI in September 2025, providing long-term stability and incentives.
• Strategic partnerships with IFC for potential debt financing and preliminary finance proposals from Tier-1 OEMs and European ECAs exceeding $1.1 billion for equipment and infrastructure.
• Future growth opportunities, including the potential to extend mine life by 30+ years using Nuton leaching technology for primary ores and exploration of four new porphyry targets starting in Q4 2025.

Negatives

• The heap leach process, while environmentally beneficial, results in lower overall copper recovery (70.8%), slightly higher unit costs, and less immediate cashflow due to extended leach cycles compared to conventional milling.
• The mineral resource price assumption of $4.80/lb was set at 113% of the mineral reserve price of $4.25/lb.

Risks

• Fluctuations in the market price of precious and base metals.
• Mining industry risks inherent to exploration, development, and production.
• Political, economic, social, and security risks associated with foreign operations, particularly in Argentina.
• The ability to receive or receive in a timely manner permits or other approvals required for operations.
• The risk that Argentina's Large Investment Incentive Regime (RIGI) may be curtailed, extinguished, or amended.
• Risks associated with the construction of mining operations and commencement of production, including projected costs.
• Risks related to litigation.
• The state of the capital markets and ability to secure financing.
• Environmental risks and hazards.
• Uncertainty as to the calculation of mineral resources and reserves.
• Foreign exchange volatility, foreign exchange controls, and foreign currency risk.

Future Outlook

The Los Azules project targets construction in 2026, with SX/EW startup in 2029 and first copper production in 2030. Future growth opportunities include extending mine life by 30+ years through Nuton leaching technology for primary sulfides and exploring four new porphyry targets (Tango, Porfido Norte, Franca, Mercedes) starting in Q4 2025. The company aims for carbon neutrality (Scopes 1 & 2) by 2038.

Management Comments

• "The Los Azules Feasibility Study is more than a technical milestone its a blueprint for the future of copper mining. We have delivered a plan for a long-life asset that will play a role in the worlds clean-energy transition. Copper is the foundation of electrification and the modern world, and Los Azules is ready to contribute to that global supply chain responsibly, efficiently, and profitably." Rob McEwen, Chairman and Chief Owner of McEwen Inc.
• "With this Feasibility Study, our team has transformed the geological potential of Los Azules into a clear, actionable development plan. This work gives us confidence in the projects design, costs, and schedule, providing the foundation for the next stage of growth. Having significant experience with large-scale construction and mining operations in Argentina, I am confident that we have the right plan, the right team, and the right partnerships to develop Los Azules. Together with our local communities and government partners, we aim to create Argentinas first regenerative copper mine a model for responsible and innovative mining." Michael Meding, Vice President of McEwen Copper and General Manager of Los Azules.

Industry Context

The Los Azules project is positioned to become a significant supplier of responsibly produced copper, critical for the global energy transition. Its design for low environmental impact, including 100% renewable power and no tailings dam, sets it apart in the industry. Based on S&P Global data for 2024, Los Azules' projected annual production would rank it 26th worldwide, placing it in the top 6% of all 423 copper producers, and 10th globally in total Mineral Resources among undeveloped copper porphyry deposits.

Comparison to Industry Standards

• Projected annual production would rank 26th worldwide, placing it in the top 6% of all 423 copper producers (based on S&P Global 2024 data).
• Ranks 10th globally in terms of total Mineral Resources among all undeveloped copper porphyry deposits.
• 72% lower mine-to-metal carbon intensity than the industry average (1,082 kg CO2-e/t Cu vs. 4,026 kg CO2-e/t Cu industry average using Skarn Associates E1 metric).
• 74% less water use than conventional milling operations (158 L/s LOM average vs. approximately 600 L/s).
• 48% lower electricity demand than a conventional concentrator (119 MW vs. 230 MW).
• AISC of $2.11/lb positions it competitively within the global copper cost curve.

Legal Proceedings

• Risks related to litigation are a factor that could cause results or future events to differ materially from current expectations.

Related Party Transactions

• McEwen Inc. owns a 46.4% interest in McEwen Copper Inc.
• Nuton (a Rio Tinto venture) holds a 17.2% equity stake in McEwen Copper and is a strategic partner evaluating its proprietary technology for the project.
• Stellantis, the world's fifth-largest automaker, is a strategic shareholder with an 18.3% interest in McEwen Copper, including a copper cathode and concentrates purchase rights agreement.
• Rob McEwen, Chairman and Chief Owner of McEwen Inc., has a 12.7% ownership in McEwen Copper.

Stakeholder Impact

• **Shareholders (McEwen Inc. & McEwen Copper)**: Positive impact due to strong economic projections, de-risked project, and potential for long-term value creation and future dividend policy (as per Rob McEwen's objective for MUX).
• **Employees**: Potential for job creation during construction and operation phases of a long-life mine.
• **Local Communities (San Juan, Argentina)**: Positive impact through economic contribution, local employment, and commitment to sustainable practices and net positive impacts on the greater Andean ecosystem.
• **Government (San Juan Provincial & Argentina)**: Positive impact through RIGI benefits, tax revenues, and a model for responsible mining.
• **Customers (e.g., Stellantis)**: Secure supply of high-purity, responsibly produced copper cathodes, critical for the global energy transition.
• **Suppliers/Partners (e.g., Komatsu, Sandvik, YPF Luz, IFC)**: Opportunities for equipment supply, infrastructure development, and financing.

Next Steps

• File the FS NI 43-101 Technical Report within 45 days of October 7, 2025.
• Water concession application is currently under review with the provincial government.
• Target construction start in 2026.
• Target SX/EW startup in 2029.
• Target first copper production in 2030.
• Start exploration of new porphyry targets (Tango, Porfido Norte, Franca, Mercedes) in Q4 2025.
• Evaluate Nuton leaching technology for primary ores to potentially extend mine life by 30+ years.
• Complete fully mass balanced results from Nuton Phase 2a program in Q4 2025.
• Further evaluate trolley-assist haulage, conveyor waste haulage, and In-Pit Crush and Convey (IPCC) during the detailed engineering stage to reduce the mine's carbon footprint.

Key Dates

Recommendation

The Los Azules Feasibility Study presents a highly attractive copper project with robust economics (NPV $2.9B, IRR 19.8%, 3.9-year payback) and significant production capacity. The project is substantially de-risked by key regulatory approvals (EIA, RIGI) and strong strategic partnerships, including potential financing from IFC and Tier-1 OEMs. Its commitment to leading ESG performance, including 100% renewable power and no tailings dam, positions it favorably in a market increasingly focused on sustainable sourcing. The identified future growth opportunities, such as Nuton technology and exploration targets, provide significant upside potential beyond the base case. Given the strong fundamentals, de-risking milestones, and long-term demand for responsibly produced copper, the stock represents a compelling investment opportunity.

Keywords

copper, Los Azules, McEwen Copper, mining, feasibility study, Argentina, ESG, renewable energy, SX/EW, heap leach, mineral reserves, carbon neutral, RIGI, IFC, Nuton