McEwen Copper: Update on Assay Results at Los Azules

Rhea-AI Summary

McEwen Copper Inc., majority-owned by McEwen Mining Inc. (NYSE: MUX), announces assay results from the 2022-2023 season, highlighting significant copper grades. The company is fully funded for the current drilling campaign, seeking additional funding for feasibility engineering. The Los Azules project progresses towards a feasibility study by Q1 2025, with a record-setting drill season underway.

Insights

Geologist

The assay results reported by McEwen Copper Inc. are indicative of significant mineralization, particularly within the Enriched zone of the Los Azules project. The continuity and extension of mineralization are critical factors that can influence the project's economic viability. The reported grades, such as 0.63% Cu over 446 meters, are substantial considering the average grade of copper deposits globally, which often hover below 0.5% Cu. The distinction between Enriched and Primary zones is important, as enriched deposits are typically formed closer to the surface and can be less expensive to mine due to the higher copper concentrations and reduced overburden removal.

The technical aspects of the drilling campaign and the subsequent resource categorization from Inferred to Indicated suggest a maturing project that may soon reach a stage where a decision on mining feasibility can be made. The investment by Nuton and Stellantis underscores the project's potential and the strategic importance of copper as a critical mineral in the global transition to greener technologies. The geological data should be considered in the context of the Feasibility Study, which will provide a more detailed economic analysis of the project.

Market Analyst

From a market perspective, the reported drilling results by McEwen Copper Inc. represent a positive development for the company and its stakeholders. The increase in Measured and Indicated resources can lead to a revaluation of the company's assets and potentially attract further investment. The timing of these results aligns with a growing demand for copper, fueled by its essential role in electric vehicles, renewable energy infrastructure and other green technologies.

Investors should note that the project is still in the exploration and pre-feasibility stage and thus carries the inherent risks associated with mining investments, including commodity price fluctuations and operational risks. However, the involvement of a Rio Tinto venture and Stellantis, combined with the positive political climate in Argentina towards mining, could mitigate some of these risks. The market will likely monitor the progress towards the Feasibility Study closely, as it will provide a clearer picture of the project's financial and operational parameters.

Financial Analyst

Examining the financial implications, the assay results may have a positive impact on McEwen Mining Inc.'s stock valuation, as the parent company of McEwen Copper Inc. The confirmation of high-grade copper over significant intervals enhances the Los Azules project's prospects and could lead to future revenue growth. Investors should consider the project's stage and the capital required to reach production when evaluating the company's financial health and future cash flow projections.

The investments by Nuton and Stellantis not only provide necessary capital for the ongoing drilling campaign but also validate the project's potential. However, the search for additional funding for feasibility-level engineering and pre-construction work indicates that McEwen Copper Inc. will likely incur more expenses before reaching production. Long-term investors might be drawn to the project's growth potential, while short-term investors could be wary of the time required to realize returns.

Remaining assays from the 2022-2023 season, highlights include:

446 m of 0.63% Cu, including 76 m of 0.92% Cu (AZ23228MET)

TORONTO, Feb. 26, 2024 (GLOBE NEWSWIRE) -- McEwen Copper Inc., 47.7% owned by McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is pleased to announce assay results from the final unreleased drill holes of the last season (2022-2023). The results from this period not only validate previous drilling results but also confirm the continuity of mineralization and extend the mineralization.

Selected Highlights:

• Hole AZ23205MET returned 257 m of 0.76% Cu within the Enriched zone.
  
  
• Hole AZ23228MET returned 446 m of 0.63% Cu in the Enriched zone, including 76 m of 0.92% Cu.
  
  
• Hole AZ23230MET returned 250 m of 0.68% Cu in the Enriched zone, including 192 m of 0.83% Cu.
  

The objective of the 2022-2023 drilling campaign was to collect information needed as the project advances towards the completion of a Feasibility Study in Q1 2025. Work continues during this field season (2023-2024) and includes resource drilling that will convert the initial 5-year pit resources to Measured and Indicated categories and will further upgrade resources from Inferred to Indicated. In addition to resource drilling, geotechnical, metallurgical, hydrogeological, exploration, and condemnation drilling are also being performed.

With the closing in October 2023 of a US$10.0 million investment by Nuton, a Rio Tinto venture, and the ARS $42 billion investment by Stellantis, the Los Azules Project is fully funded for the 2023-2024 drilling campaign. McEwen Copper is currently seeking funding to support feasibility-level engineering and pre-construction work. Another record-setting drill season is underway at Los Azules with over 62,000 meters of drilling, of which 43,000 meters have been completed to date.

“Argentina’s new president is taking important initiatives to unlock the country’s potential to become a significant supplier of critical minerals to the world, to combat climate change and at the same time strengthening the economy,” said Rob McEwen, Chairman and Chief Owner.

“McEwen Copper’s Los Azules project is progressing at light speed towards completing a feasibility study by Q1 2025 and it has already delivered significant economic benefits to the neighbouring communities. It is a very large copper resource, where recent exploration drilling suggests it definitely has room to grow,” said Michael Meding, Vice President and General Manager of McEwen Copper.

Table 1 - Remaining 2022-2023 Los Azules metallurgical drilling results. All intercepts are approximate true thickness.

Hole-ID	Section	Predominant Mineral Zone	From (m)	To (m)	Length (m)	Cu %	Au (g/t)	Ag (g/t)	Comment
AZ23199MET	31	Total	100.0	271.0	171.0	0.80	0.06	1.56
		Enriched	100.0	271.0	171.0	0.80	0.06	1.56	Incl. 156.0m of 0.85% Cu
		Primary
AZ23200MET	34-33	Total	94.0	394.5	300.5	0.43	0.04	2.89
		Enriched	94.0	394.5	300.5	0.43	0.04	2.89	Incl. 172.0m of 0.59% Cu
		Primary
AZ23204MET	39	Total	116.0	312.0	196.0	0.50	0.12	1.83
		Enriched	116.0	275.5	159.5	0.54	0.13	1.87	Incl. 38.0m of 1.01% Cu
		Primary	275.5	312.0	36.5	0.34	0.07	1.67
AZ23205MET	31	Total	105.0	374.7	269.7	0.73	0.08	1.77
		Enriched	105.0	362.0	257.0	0.76	0.09	1.94
		Primary	362.0	374.7	12.7	0.28	0.05	1.30
AZ23226AMET	33	Total	90.0	275.3	185.3	0.47	0.03	0.91
		Enriched	90.0	275.3	185.3	0.47	0.03	0.91	Incl. 38.0m of 0.66% Cu
		Primary
AZ23228MET	47	Total	170.0	616.0	446.0	0.63	0.07	3.58
		Enriched	170.0	430.0	260.0	0.72	0.07	4.18	Incl. 76.0m of 0.92% Cu
		Primary	430.0	616.0	186.0	0.49	0.07	2.74	Incl. 52.0m of 0.80% Cu
AZ23229MET	50-51	Total	92.0	262.4	170.4	0.46	0.04	1.80
		Enriched	92.0	262.4	170.4	0.46	0.04	1.80	Incl. 76.4m of 0.52% Cu
		Primary
AZ23230MET	30	Total	104.0	438.2	334.2	0.59	0.06	3.66
		Enriched	104.0	354.0	250.0	0.68	0.06	3.67	Incl. 192.0m of 0.83% Cu
		Primary	354.0	438.2	84.2	0.31	0.07	3.61
AZ23232MET	48-49	Total	94.0	464.0	370.0	0.40	0.04	0.95
		Enriched	94.0	414.0	320.0	0.44	0.05	1.02	Incl. 76.0m of 0.58% Cu
		Primary	414.0	464.0	50.0	0.12	0.03	0.45
GTK2315MET	52-53	Total	69.0	521.2	452.2	0.29	0.05	1.09
		Enriched	69.0	260.0	191.0	0.45	0.04	0.86	Incl. 76.0m of 0.70% Cu
		Primary	260.0	521.2	261.2	0.18	0.05	1.26
GTK2316MET	30	Total	94.0	319.1	225.1	0.38	0.02	0.88
		Enriched	94.0	319.1	225.1	0.38	0.02	0.88	Incl. 48.0m of 0.64% Cu
		Primary
GTK2317MET	28-27	Total	156.0	326.0	170.0	0.42	0.02	2.15
		Enriched	156.0	326.0	170.0	0.42	0.02	2.15	Incl. 58.0m of 0.49% Cu
		Primary
AZ23210MET	30	Total	110.0	415.0	305.0	0.64	0.07	1.62
		Enriched	110.0	352.0	242.0	0.73	0.07	1.59
		Primary	352.0	415.0	63.0	0.28	0.06	1.73
AZ23223MET	32	Total	142.0	376.0	234.0	0.40	0.03	0.52
		Enriched	142.0	376.0	234.0	0.40	0.03	0.52	Incl. 76.0m of 0.57% Cu
		Primary
AZ23227MET	34	Total	69.0	334.0	265.0	0.68	0.07	1.27
		Enriched	69.0	284.0	215.0	0.73	0.06	1.30	Incl. 137.0m of 0.80% Cu
		Primary	284.0	334.0	50.0	0.44	0.09	1.13	Incl. 22.0m of 0.65% Cu

Results are summarized in three schematic cross sections (Figures 2, 3, and 4), which include simplified interpretations of the Overburden, Leached, Enriched and Primary zones. The Enriched mineral zone refers to a copper deposit enriched by precipitation-derived water circulation that carries copper minerals downward through the rocks to accumulate in a thick, often horizontal “blanket”. Immediately above the Enriched zone is the Leached zone, from which copper was removed and transported. Weathering and oxidation often contribute to this process. Below the Enriched zone, the Primary (or Hypogene) zone is formed by ascending copper-rich thermal fluids, originating from a much deeper magmatic source. The green line indicates the pit floor of the 30-year pit shell from the 2023 NI 43-101 Preliminary Economic Assessment (PEA).

Figure 1 presents a plan view of the location of three sections and the holes reported. Adjacent cross sections are located 50 m apart from each other, starting with the lowest numbered section at the south end of the deposit and progressing to the north.

Figure 1 – Plan View Location of Cross-sections and Drill Holes in the Deposit

Figure 2 displays an intercept of 446 m grading 0.63% Cu (AZ23228MET) and includes 76 m grading 0.92% Cu within the Enriched zone. This hole extends higher-grade mineralization further to the west within the Enriched zone.

Figure 2 - Section 47 - Drilling, Mineralized Zones and 30-year PEA Pit (Looking North)

Figure 3 highlights a 257 m interval grading 0.76% Cu (AZ23205MET). Both this hole and hole AZ23199MET (171 m grading 0.80% Cu) directly to the west confirm the continuity and grade of the Enriched zone on this section.

Figure 3 - Section 31 - Drilling, Mineralized Zones and 30-year PEA Pit (Looking North)

Figure 4 presents an intercept of 250.0 m of 0.68% Cu in hole AZ23230MET. This hole validates mineralization in the center of this section. Hole AZ23210MET displays an intercept of 242.0 m of 0.73% Cu and extends higher grade mineralization in the Enriched zone to the east. Hole GTK2316 contains an intercept of 225.1 m of 0.38% Cu. These three new holes validate the continuity and strength of mineralization on this section.

Figure 4 - Section 30 - Drilling, Mineralized Zones and 30-year PEA Pit (Looking North)

Technical information

The technical content of this press release has been reviewed and approved by Darren King, Director of Exploration of McEwen Copper, who serves as the qualified person (QP) under the definitions of National Instrument 43-101.

All samples were collected in accordance with generally accepted industry standards. Drill core samples, usually taken at 2 m intervals, were split and submitted to the Alex Stewart International laboratory located in the Province of Mendoza, Argentina, for the following assays: gold determination using fire fusion assay and an atomic absorption spectroscopy finish (Au4-30); a 39 multi-element suite using ICP-OES analysis (ICP-AR 39); copper content determination using a sequential copper analysis (Cu-Sequential LMC-140). An additional 19-element analysis (ICP-ORE) was performed for samples with high sulphide content and that exceeded the limits of the ICP-OES analysis.

The company conducts a Quality Assurance/Quality Control program in accordance with NI 43-101 and industry best practices, using a combination of standards and blanks on approximately one out of every 25 samples. Results are monitored as final certificates are received, and any re-assay requests are sent back immediately. Pulp and preparation sample analyses are also performed as part of the QAQC process. Approximately 5% of the sample pulps are sent to a secondary laboratory for control purposes. In addition, the laboratory performs its own internal QAQC checks, with results made available on certificates for Company review.

Table 2 – Hole Locations and Lengths for Los Azules Drilling Results

HOLE-ID	Azimuth	Dip	Length	Loc X	Loc Y	Loc Z
AZ23199MET	250	-67	271.0	2383430	6558947	3659
AZ23226AMET	250	-77	275.3	2383311	6559016	3656
AZ23228MET	70	-60	616.0	2382837	6559585	3625
AZ23229MET	70	-70	262.4	2382846	6559746	3616
AZ23230MET	70	-73	438.2	2383344	6558864	3664
AZ23232MET	45	-70	464.0	2383226	6559780	3632
GTK2315MET	38	-70	521.2	2383192	6559976	3639
GTK2316MET	250	-78	319.1	2383348	6558863	3664
GTK2317MET	90	-70	326.0	2383561	6558835	3665
AZ23200MET	90	-70	394.5	2383467	6559120	3657
AZ23204MET	250	-76	312	2383292	6559323	3643
AZ23205MET	250	-74	374.7	2383504	6558973	3660
AZ23210MET	250	-76	415	2383533	6558930	3664
AZ23223MET	66	-73	376	2383253	6558932	3670
AZ23227MET	70	-79	334	2383305	6559059	3654
Coordinates listed in Table 2 based on Gauss Kruger - POSGAR 94 Zone 2

ABOUT MCEWEN COPPER

McEwen Copper is a well-funded, private company which owns 100% of the large, advanced-stage Los Azules copper project, located in the San Juan province, Argentina. McEwen Copper is a 47.7% owned private subsidiary of McEwen Mining, which is listed on NYSE and TSX under the ticker MUX.

Los Azules is being designed to be distinctly different from conventional copper mines, consuming significantly less water, emitting much lower carbon levels and progressing to be carbon neutral by 2038, being powered by 100% renewable energy once in operation. The project’s recently updated Preliminary Economic Assessment (PEA) projects a long life of mine, a short payback period, low production costs per pound, high annual copper production, and an after-tax IRR of 21.1%.

ABOUT MCEWEN MINING

McEwen Mining is a gold and silver producer with operations in Nevada, Canada, Mexico and Argentina. McEwen Mining also holds a 47.7% interest in McEwen Copper, which is developing the large, advanced-stage Los Azules copper project in Argentina. The company’s goal is to improve the productivity and life of its assets with the objective of increasing the share price and providing a yield. Rob McEwen, Chairman and Chief Owner, has a personal investment in the company of US$220 million. His annual salary is US$1.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This news release contains certain forward-looking statements and information, including "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements and information expressed, as at the date of this news release, McEwen Mining Inc.'s (the "Company") estimates, forecasts, projections, expectations or beliefs as to future events and results. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, risks and contingencies, and there can be no assurance that such statements and information will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements and information. Risks and uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the forward-looking statements and information include, but are not limited to, effects of the COVID-19 pandemic, fluctuations in the market price of precious metals, mining industry risks, political, economic, social and security risks associated with foreign operations, the ability of the corporation to receive or receive in a timely manner permits or other approvals required in connection with operations, risks associated with the construction of mining operations and commencement of production and the projected costs thereof, risks related to litigation, the state of the capital markets, environmental risks and hazards, uncertainty as to calculation of mineral resources and reserves, and other risks. Readers should not place undue reliance on forward-looking statements or information included herein, which speak only as of the date hereof. The Company undertakes no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. See McEwen Mining's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and other filings with the Securities and Exchange Commission, under the caption "Risk Factors", for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information regarding the Company. All forward-looking statements and information made in this news release are qualified by this cautionary statement.

The NYSE and TSX have not reviewed and do not accept responsibility for the adequacy or accuracy of the contents of this news release, which has been prepared by the management of McEwen Mining Inc.

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FAQ

What are the highlights of the assay results from the 2022-2023 season for McEwen Copper Inc. (NYSE: MUX)?

Highlights include 446 m of 0.63% Cu, with 76 m of 0.92% Cu in hole AZ23228MET.

Who owns McEwen Copper Inc. (NYSE: MUX)?

McEwen Copper Inc. is majority-owned by McEwen Mining Inc. (NYSE: MUX).

What is the current funding status of the Los Azules project?

The Los Azules project is fully funded for the 2023-2024 drilling campaign.

When is the feasibility study expected to be completed for the Los Azules project?

The feasibility study for the Los Azules project is expected to be completed by Q1 2025.

How much drilling has been completed at Los Azules so far?

Over 43,000 meters of drilling have been completed out of a total of 62,000 meters at Los Azules.

Who is overseeing the technical aspects of the drilling campaign at Los Azules?

Darren King, Director of Exploration at McEwen Copper, is the qualified person (QP) overseeing the technical aspects of the drilling campaign.

What is the significance of the Enriched mineral zone at Los Azules?

The Enriched mineral zone at Los Azules refers to a copper deposit enriched by precipitation-derived water circulation, contributing to higher copper concentrations.

Where were the drill core samples analyzed for the Los Azules project?

The drill core samples were analyzed at the Alex Stewart International laboratory in the Province of Mendoza, Argentina.

What quality assurance measures are in place for the drilling program at Los Azules?

The company conducts a Quality Assurance/Quality Control program in accordance with NI 43-101 and industry best practices, including standards, blanks, and re-assay requests.

What is the purpose of the 2022-2023 drilling campaign at Los Azules?

The objective of the 2022-2023 drilling campaign is to collect information necessary for the project's advancement towards completing a Feasibility Study by Q1 2025.