Los Azules is a 100% owned advanced-stage porphyry copper exploration project located in the cordilleran region of San Juan Province, Argentina near the border with Chile. Los Azules is one of the world's largest, undeveloped, high-grade, open pit copper projects, which contains significant growth potential. In May 2013, McEwen Mining announced an updated NI 43-101 mineral resource estimate for Los Azules. This season, a total of 15,800 meters of drilling was completed.
The resource contains 14.3 billion pounds of copper (inferred) and 5.4 billion pounds of copper (indicated). Gold resources are 840,000 ounces indicated, and 2.58 million ounces inferred. Silver resources are 22.9 million ounces indicated, and 85.8 million ounces inferred.
Drilling this season represents the first time a meaningful amount of deeper drilling has occurred at Los Azules. Prior to this year the deepest drill hole was 650 meters. This season there has been a total of 6 holes that exceeded 700 meters. This deeper drilling has begun to identify a potential parallel trend, west of the original Los Azules ore-body. Copper mineralization discovered within this trend occurs near surface and also at depth (down to 1,050 meters below surface). This is significant because it may indicate that previous shallow drilling, which makes up the majority of the Los Azules resource, failed to adequately test the deeper potential of the deposit. As a result, many new exploration targets have emerged.
This updated resource estimate will form the basis of a new Preliminary Economic Assessment (PEA), which is expected to be completed in the third quarter of 2013. This PEA will evaluate the possibility of: (1) increasing the daily throughput; (2) producing copper cathode instead of a concentrate and (3) processing low-grade mineralized material not previously considered, via a heap leach.
The advantages of being able to produce a copper cathode rather than a copper concentrate is two fold: First, it would eliminate the capital intensive, concentrate pipeline through Chile; and second, it would reduce the applicable export tax by 50%.
Mineral Resource Estimate Greater than 0.35%
Details on the parameters of the resource estimate are as follows:
· The resource estimate is based on data from 185 drill holes comprising a total length of 59,518 meters of drilling completed to the end of March 2013.
· There were a total of 27,688 individual samples selected for analysis. The samples were collected and analyzed in accordance with industry standards. Splits from the drill core samples were submitted to either Alex Stewart in Mendoza or ALS Chemex or ACME in Santiago, Chile for fire assay and ICP analysis. Accuracy of results is tested through the systematic inclusion of standards, blanks and check assays.
· The May 2013 mineral resource estimate for the Los Azules Copper Project was prepared under the direction of Robert Sim P.Geo. of SIM Geological Inc. The mineral resource estimate uses drill hole sample assay results and the interpretation of a geologic model that relates to the spatial distribution of copper in the deposit. Interpolation characteristics were defined based on the geology, drill hole spacing and geostatistical analysis of the data. Block grade estimates were done using Ordinary Kriging (OK) with a nominal block size measuring 20 meters long, 20 meters wide and 15 meters high. Resources are classified according to their proximity to sample data locations and are reported, as required under NI 43-101, according to the CIM Definition Standards for Mineral Resources and Mineral Reserves.
· Mineral resources, which are not mineral reserves, do not have demonstrated economic viability.
· The quantity and grade of reported Inferred resources are uncertain in nature and there has been insufficient exploration to classify these inferred resources as Indicated or Measured, and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured category.
· As required under NI 43-101, reasonable prospects for economic viability of the mineral resources has been exhibited by the application of a resource limiting pit shell built about copper grades in the model using a projected metal price of US$2.75 per lb. Cu, mining costs of US$1.00 per tonne, milling and G&A costs of US$4.25 per tonne, 100% recoveries and an average pit slope of 34 degrees.
Los Azules Resource Map
Location of Los Azules
Los Azules is 6 km east of the Chilean-Argentine border, is accessible by road and is at an elevation of 3,500 meters above sea level. Due to snow conditions on two mountain passes on the access road to the site, seasonal exploration typically commences in November and terminates in late April.
The belt of porphyry copper deposits that Los Azules is on, contains some of the world's largest copper deposits, including Codelco's El Teniente and Andina mines, Anglo American's Los Bronces mine, Antofagasta PLC's Los Pelambres mine and Xstrata's El Pachón project, among others.
Los Azules technical information and figure on this page were derived from the news release titled “McEwen Mining's Los Azules Copper Project Continues to Grow!” released on May 15, 2013 by McEwen Mining. To access the news release click here.
All resource and reserve estimates reported by McEwen Mining Inc. are calculated in accordance with 43-101 and the Canadian Institute of Mining and Metallurgy Classification system. These standards differ significantly from the requirements of the U.S. Securities and Exchange Commission. Mineral resources which are not mineral reserves do not have demonstrated economic viability.
For more information on Los Azules, please see the latest technical report titled "Los Azules Porphyry Copper Project, San Juan Province, Argentina" with an effective date of June 15, 2012. The report was prepared by D. Ernest Winkler, PE, Robert Sim, PGEO, Bruce Davis, PHD, FAUSIMM and James K. Duff, PGEO, each, but Mr. Duff are considered independent of the Company as defined in Section 1.5 of NI 43-101. To access the report click here.