Rob McEwen, Argentina Copper & President’s ‘Damnit’

‘Viva la libertad, carajo.’ [‘Long live freedom, damnit.’]

— Argentina President Javier Milei 

TCRs, our 35-minute interview with McEwen Mining‘s Robert McEwen came on the same day as new Argentina President Javier Milei‘s jarring defense of capitalism and speech-ending ‘damnit‘ at Davos World Economic Forum. [See please Javier Milei’s Davos Video & Transcript] *

Rob, 73, is a wealthy Canada miner whose Goldcorp at one point (2016) drew and sold 2.8 million gold ounces from Canada’s Red Lake and other mines up north and in Mexico. A Newmont merger in 2019 valued Goldcorp at $10 billion of equity and catapulted the combined miners to the top of the global gold output roster.

We seek in this report to glimpse:

— Rob McEwen’s thinking about copper;

—  the attraction of the Los Azules copper porphyry in Argentina, a property that MUX has owned since 2012 and is now held by 3-year-old private  McEwen Copper;

— how the once-billionaire miner overcame a 6-year crash of McEwen Mining‘s MUX equity value value to $3.50 USD in 2022 from $47.90 in 2016. MUX at $6.60 USD now has a market value of $320 million;

— what Rob McEwen says about Argentina’s anarchist new president, who vows to pursue capitalism at full speed; and McEwen Copper’s $275 million backer Stellantis, an automaker pursuing “carbon net zero” technology in its operation and its vehicles.

— when McEwen Copper, owned 48% by MUX,  and valued at $400 million cash and as much as $800 million by its private stock, will become a standalone pub-co. [All links in this report point to additional, worthwhile material.]

Rob, underlining a theme we have been exploring at The Calandra Report this new year of 2024, notes, “The majors are reaching down into the juniors slowly. People should be buying as there are bargain prices. When MUX was dragging along the floor, we were approached by a couple of majors.”

Rob McEwen and I reconnected in Zürich in April 2023. This chat occurred four days ago (Jan. 18, 2024).

Here are relevant quotes from our conversation. As a copper believer myself (copper, along with gold, platinum, is my personal precious metal list), MUX is on my time-to-buy list (real soon).

— “We have been able to raise about $400 million privately for McEwen Copper (2021 to present). So we feel fortunate. We could not have done that in the public market.”

— “I had always liked our Los Azules copper property (Argentina). But the metal market went into the trash can and bottomed in 2015. At the same time, our precious metals output at MUX was not reaching guidance for a few years. We had nothing in the treasury and the market had a preference for pure plays. So in summer 2021 I said, ‘We need $80 million and I will take 40 to 50 percent.’ We got Rio Tinto (Mining) in, but it took about a year (to get the first $80 million).

 

“So I said, ‘Let’s go to the car companies, and to the Stellantis (subsidiary) in Argentina. Their (vehicle) revenues were trapped in Argentina. So here was a source of (copper) cathode and a way of diversifying part of their portfolio.” [More financing details here please and also here.]

 

Independent engineering/economic studies commissioned by McEwen Copper show Los Azules producing in San Juan Province 322 million pounds of copper cathode and concentrate yearly over 27 -years.  Preliminary economic assessment: 11 billion pounds of indicated-category copper and approximately a $2.2 billion to $2.5 billion capital expenditure to build the enormous mine. Details here please.

 

— “My mandate is how do we raise money, debt and equity. As for Argentina, I am encouraged by the words of the new president (at Davos — see  above); he is a political survivor. He sees the entrepreneurs as the heroes.”

 

I have a positive view on copper because of urbanisation in Asia, in China.