McEwen Mining Inc. (NYSE:MUX) today released its second-quarter production results, also announcing that the company is conducting an impairment test of its Los Azules project in Argentina in light of the recently announced acquisition of Lumina Copper Corp. (TSXV:LCC) by First Quantum Minerals Ltd. (TSX:FM). The Taca Taca copper project in Argentina is Lumina’s only significant asset.
As quoted in the press release:
While there are some notable differences between Taca Taca and Los Azules, we believe the similarities in project scale and location within Argentina warrant consideration for the Lumina transaction to be a triggering event for impairment analysis. Our preliminary analysis, which places a substantial weighting on the announcement day value of the Lumina transaction to value Los Azules, indicates a pre-tax asset impairment charge in the range of approximately $90-135 million(1). The actual amount, when we have completed the final impairment assessment, will be reported in our quarterly 10-Q which is due to be filed on August 7, 2014.
McEwen Mining Chairman, Chief Owner and CEO Rob McEwen said:
With First Quantum acquiring Lumina Copper and their Taca Taca project, Los Azules moves to the forefront in terms of world-class, undeveloped, high-grade copper assets not owned by a major mining company. As we have said in the past, Taca Taca serves as a good proxy for the value of Los Azules and we believe this transaction demonstrates value in projects located in Argentina.