TORONTO, Aug. 31, 2022 (GLOBE NEWSWIRE) — McEwen Copper Inc., a subsidiary of McEwen Mining Inc. (NYSE:MUX) (TSX:MUX), is pleased to announce the closing of the third and final tranche of the previously announced private placement offering (the “Offering”) of up to 8,000,000 common shares of McEwen Copper Inc. priced at US$10.00 per common share. The third tranche is comprised of a $25 million investment by Rio Tinto’s copper leaching technology venture, Nuton (“Nuton” or the “Investor“), and $1.85 million from other investors. The total Offering has been increased to 8,185,000 common shares, with the amounts raised in the three tranches of the private placement totalling $81.85 million.
McEwen Copper is well-funded to advance its Los Azules Project, located in the mining friendly province of San Juan, Argentina. The next milestones are the upcoming drilling season from October 2022 to June 2023, the completion of an updated preliminary economic assessment (PEA) in early Q1 2023, and the planned IPO of McEwen Copper in H1 2023.
In connection with the Offering, McEwen Copper entered into a collaboration agreement with Nuton (the “Nuton Collaboration Agreement”) 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 large tailings storage facility or dam, and typically lower capital and operating costs.
McEwen Copper Chief Executive Rob McEwen said: “Los Azules is among the largest undeveloped copper assets in the world. We recognize the potential opportunity of using Nuton Technologies to produce copper in greater amounts, more rapidly, and with less impact on the environment and water resources. I trust that our relationship with Nuton and Rio Tinto will accelerate the process of realizing the enormous potential of Los Azules.”
Rio Tinto Chief Executive Copper Bold Baatar said: “This agreement will allow us to evaluate the potential to commercially deploy Rio Tinto’s innovative Nuton Technologies for copper leaching in McEwen Copper’s planned development of Los Azules. Our Nuton Technologies have the capacity to unlock increased copper production for Rio Tinto and our partners, with a low carbon footprint and leading environmental performance.”
The principal terms of the Nuton Collaboration Agreement include:
- Nuton will invest $25 million in McEwen Copper, acquiring 2.5 million common shares at $10.00 per common share, for post-closing ownership of 9.73%.
- McEwen Copper and Nuton will jointly undertake copper leach testing using Nuton Technologies with samples from Los Azules. McEwen Copper has agreed to grant exclusivity to Nuton for one year in the area of novel, patented or trade secret leaching technology, while it will continue its independent test work and studies using conventional leach technologies.
- Nuton will have the right to select one nominee who will be appointed as a director or observer to the Board of McEwen Copper. This right will continue for as long as Nuton holds greater than 7.5% of the issued and outstanding shares of McEwen Copper.
- McEwen Copper and its controlling shareholders will not complete a liquidity event (such as the planned IPO) until after March 31, 2023.
- McEwen Copper has agreed to limit related party transactions in certain situations until the earlier of the planned IPO (or alternative liquidity event) or Nuton ceasing to hold 7.5%.
- Customary standstill and lock-up agreement between the Investor and its affiliates and McEwen Copper and its affiliates.
- Other customary representations and warranties.
