McEwen Copper Inc. announced results from the recently completed Phase 1 copper heap leaching metallurgical tests undertaken at SGS Chile Limitada in Santiago, Chile. The test results were produced utilizing conventional bio-heap leaching technology and generated an average copper recovery of 76.0%. This represents an increase of 3.2% over the recovery rate used in the June 2023 Preliminary Economic Assessment (PEA) for Los Azules. These test results were reviewed by Jim Sorensen and Michael McGlynn at Samuel Engineering Inc., who are responsible for the development and oversight of the metallurgical programs. Based on the Phase 1 test results available at the time and prior historical column test work, the PEA used an average copper recovery of 72.8% by employing conventional bio-heap leach technology. Final results of Phase 1 show an increase in the average recovery to 76.0% in approximately 230 days of leaching over the planned 27-year life of the project. Average net acid consumption was also reduced by 8.3% relative to the PEA. The potential impact of the 3.2% increase in average recovery and 8.3% reduction in net acid consumption can be illustrated by selectively adjusting the PEA Base Case financial model, which results in a life of mine copper cathode production increase of 172,000 tonnes and an after-tax NPV increase of approximately $262 million. This disclosure should not be taken to modify or update the conclusions of the PEA. Located in San Juan, Argentina, the Los Azules deposit consists primarily of secondary copper mineralization (supergene zone of predominantly chalcocite), with minimal oxide copper content. Additionally, there is a deeper primary copper (hypogene zone of predominantly chalcopyrite with some zones of significant bornite). Preliminary results from the Phase 1 program along with historical metallurgical testing at Los Azules were used to support the 2023 Preliminary Economic Assessment (PEA), which proposed an environmentally friendly heap leach alternative to a conventional copper concentrator. The testing program is now advancing with two
additional phases (2 & 3) currently underway to support the Feasibility Study (FS). Drilling activities related to the current study work started in 2021 and are continuing into 2024. The leach testing protocols are based on conventional bio-leaching methods used extensively in commercial applications for supergene copper mineralization. The current phases, 2 & 3, are being conducted at SGS Chile and Alfred H. Knight (ASMIN Industrial Limitada) laboratories, both located in Santiago, Chile. The Phase 1 program was initiated using drill core from drilling programs completed prior to 2021, but not older than 2015, for a total of 21 column tests. Started in 2022, Phase 1 has now been completed and final results received. Preliminary results of this work and prior historical leach testing information were used for the PEA metallurgical assumptions. The Phase 2 program utilizes drill core from the 2022-2023 drilling campaign and focuses on deposit-wide variability testing, leaching protocol optimization and scalability. A total of 34 column tests are in progress, with results expected in Second Quarter 2024. The Phase 3 program is also started, utilizing additional drill core material from the ongoing 2023-2024 drilling program. Phase 3 testing is focusing on the material of the initial 5-year mine plan, as delineated in the PEA. A total of 33 additional column tests are planned as part of this final confirmatory testing program, with results anticipated in Fourth Quarter 2024. The combined metallurgical programs comprise a total of 88 column tests to be used for the FS metallurgical design basis and geo-metallurgical model.
Copper assaying is conducted using a sequential method to determine the relative amounts of acid soluble (CuAS) and cyanide soluble (CuCN) copper mineralization (oxides and secondary sulfides). When combined, these two partial assay methods are generally considered readily soluble copper (CuSOL), extractable with conventional heap leaching technologies. Copper assayed that does not report to these two partial assay methods is classified as residual copper (CuRES) and is considered copper that requires additional time or is potentially not recoverable with conventional heap leaching technologies. The finalized results from the Phase 1 metallurgy program for tests completed at minus ½" and ¾" crush sizes confirmed that soluble copper (CuSOL) component recovery is 100% for all leachable resources. The sulfuric acid consumption has also been updated with the Phase 1 final results. The averaged net sulfuric acid consumption reported in the PEA was 18 kilograms per ton of ore processed. The finalized Phase 1 testing now indicates a reduction of 8.3% to 16.5 kilograms per ton. The primary reason for the reduction of acid consumption is minimizing excess acid in the leaching solutions and operating the columns at a pH closer to 2.0 pH than the historic column work at 1.2 pH, which minimizes acid consumption by excess unmineralized gangue material dissolution. This lowered acid requirement may also improve the project economics, both NPV and IRR, by reducing the operating costs for copper produced and increasing revenue from the same tonnes mined. Copper bioleaching has been a commercially applied technology at altitudes similar to the Los Azules site and as much as 1,000 meters higher for several decades, in multiple locations around the world. Testing is conducted in conventional leach test columns by inoculation of the columns with naturally occurring bacterial ferrooxidans and thiooxidans prior to introduction of the leach solution. Bacterial cultures for the inoculum were sourced from the testing laboratories and adapted to the Los Azules leach material. Ferrooxidans convert the ferrous iron in solution to ferric iron, while thiooxidans convert the sulfur produced in the copper sulfide leaching activity to sulfuric acid/sulfate. Ferric iron is the key chemical component necessary for leaching of copper sulfide material. Bioactivity in the tests is monitored by measurement of the ferrous/ferric ratios and electrochemical oxidation potential in the leaching solutions.