On July 6, 2021 McEwen Mining announced the creation of the wholly-owned subsidiary, McEwen Copper Inc., which holds 100% interests in the Los Azules project in Argentina and in the Elder Creek exploration property in Nevada. Both assets are subject to a 1.25% net smelter return (NSR) royalty payable to McEwen Mining.
McEwen Copper started with 17.5 million common shares outstanding held by McEwen Mining. A private placement financing has been initiated, of up to 8 million shares of McEwen Copper at US$10 per share. The first tranche of the placement was closed with Rob McEwen for $40 million, a second tranche was closed for $15 million, and a third tranche was completed in August, 2022 for $26.9 million, and included a $25 million investment by Nuton, a Rio Tinto venture. Following the completion of the $81.9 million oversubscribed offering, ownership in McEwen Copper is now 68% McEwen Mining and 32% new shareholders.
In connection with the Offering, McEwen Copper entered into a collaboration agreement with Nuton to advance our understanding of the potential application of heap leach technology at Los Azules, including the testing of Nuton® Technologies for compatibility with Los Azules copper mineralization. Leaching has many potential economic and environmental benefits over a conventional milling scenario, including lower water and energy consumption, no dam or large tailings storage facility, and typically lower capital and operating costs.
In 2022 we have resolved the critical issue of road access to Los Azules by the development of a lower altitude access road that provides us with the opportunity for year-round work at the site. The diagram below illustrates the important elevation difference between our exploration road (shown in blue) that allows 5 to 6-month access to site and our new access road (shown in orange) that, in combination, will provide 12-month access. Having two roads into Los Azules represents an important development for the project, making it safer, less expensive and faster to advance and complete our fieldwork.