McEwen Mining Inc. (TSX:MUX,NYSE:MUX) announced the results of an updated preliminary economic assessment (PEA) for its Argentina-based Los Azules copper project, commenting that the results show that the project has the potential to become one of the world’s biggest and lowest-cost copper mines.
PEA highlights include:
- Pre-tax Net Present Value (“NPV”) of $3.0 billion (8% discount rate) and an Internal Rate of Return (“IRR”) of 17.6%.
- After-tax NPV of $1.7 billion (8% discount rate) and an IRR of 14.3%.
- Annual copper production during years 1-5 to average 255,000 tonnes (563 million lbs), which would have placed it in the top 3%1 of copper mines in the world during 2012. Life of mine (“LOM”) annual copper production to average 171,000 tonnes (377 million lbs) over 35 years.
- Cash operating costs during years 1-5 to average $0.87/lb copper (net of gold by-product), placing it in the bottom 14%1 in the world during 2012. Cash operating costs over entire mine life to average $1.08/lb copper (net of gold by-product).
- Indicated resource of 5.4 billion pounds of copper and 0.8 million ounces of gold and Inferred resource of 14.3 billion pounds of copper and 2.6 million ounces of gold (please see Table 2 below for resource details).
- Initial capital costs to construct the mine and a 120,000 tonnes per day (“tpd”) process plant have been estimated at $3.9 billion.
- Capital payback on a pre-tax basis has been estimated at 3.8 years at $3.00/lb copper and $1,300/oz gold.