[open] McEwen Mining- Undervalued but with looming Catalysts

Pending Award of tax advantaged status under Argentina's RIGI program and completion of the DFS for Los Azules will pave way for McEwen Copper's IPO

As summer 2025 wanes into fall, McEwen Mining (MUX) has significant impending catalysts that may spur big upward adjustments to share market valuations for both McEwen Copper ( the 100% owner of the large Los Azules copper project ), and its parent McEwen Mining.

The impending catalysts are the expected

• award of RIGI tax status in Argentina to McEwen Copper’s Los Azules project

• completion of the Definitive Feasibility Study for the Los Azules project.

• completion of the McEwen Copper IPO

These catalysts may combine to drive big gains in valuation of both McEwen Copper and McEwen Mining which owns 46% of McEwen Copper.

The extent of the current undervaluation is substantial and can be inferred from recent market valuation of the comparable ‘Vicuna’ copper project owned by BHP / Lundin.

This article will use available resource sizing and market valuation data to measure the undervaluation of McEwen Copper, and the gain in prospect for current investors in McEwen Mining (MUX) — with over 50% upside potential by 2026.

Perspective: Goldman Sash’s calls Copper, the new Oil

It is wise an investor keeps the ‘big picture’ in mind.

For an example, the Prominent investor Goldman Sach’s has a view that can paraphrased as “Copper is the new Oil.” and critical to ‘electrification’ projects such as for build out of AI data centers, photovoltaic energy generation, and build out of electrical infrastructure for military, industrial, commercial, and residential modernization projects. In short rising demand for copper will challenge supply growth.

The charts below from Goldman’s report suggest copper prices will ‘forced materially’ higher…

Accelerating global electrification will rely on Copper as the best conductor of electricity, for electric vehicles, for AI data centers, and industrial equipment.

About Vicuna, the copper rich JV of BHP and Lundin

The transaction between BHP and Lundin combined their two projects — Josemaria and Fruta de Sol — into the new entity Vicuna, with attributable value of US$ 4.5 Billion based on observed market pricing ( i.e. for Josemaria @ $1.3 billion and Fruta de Sol @ $3.12 billion) .

This valuation provides a very interesting valuation benchmark for McEwen's comparable Los Azules project — and implies that today (1Aug’25) McEwen is substantially undervalued.

The Argentine copper mining industry had a major consolidating event in January 2025 when BHP merged interests with Lundin to combine the Josemaria and Filo Del Sole copper projects.

Insight ==> A significant consolidation of ownership of the Argentine copper mining resulted— essentially leaving McEwen Copper as the “last man standing” with a large Agentine copper project that is not already controlled by a major global mining operation.

Hence with the upcoming IPO of McEwen Copper there will be 38 Billion pounds of copper up for grabs…. why not get in to McEwen Mining ahead of that?

Better yet, given that the three major positive catalysts will occur in the quarters ahead, the increases in share price valuation for McEwen (and McEwen Copper) may soon result from these catalysts.

Analysis for Vicuna’s projects vs McEwen’s Los Azules

Given the above statistics on resources, and the observed market pricing for Vicuna, a valuation for Los Azules can be inferred.

Recent pricing and transaction in market imply Vicuna has valuation of about $US 4.5 Billion for its 89.2 billion pounds CU implying $US 0.05248 per pound of Copper resource.

Applying this unit value for copper implies $US 2.0410 billion valuation to the Los Azules project based on valuation of the comparable Vicuna project.

Upside Room for Los Azules

An earlier 2024 round of investment into McEwen Copper by RioTinto / Stellantis & McEwen mining showed a market valuation of $US 894 million for McEwen Copper.

In contrast, the more recent valuation metrics for Vicuna imply a valuation of US$ 2,041 million when applied for McEwen Copper.

With McEwen Mining owing 46% of McEwen Copper, the US$ 2.0410 billion valuation for McEwen Copper implies US$ 938.86 value for McEwen Mining.

However, the total current share capitalization for McEwen is US$ 548 million - or only 58% of the implied value for its ownership of McEwen Copper.

Thus, McEwen Mining can appreciate by 80+% to reflect the valuation support give it by ownership of McEwen Copper.

Market Driving Catalysts On Horizon

As Warren Buffet commented: ‘short term the market is a voting machine, long term the market is a weighing machine.’ In the case of McEwen’s Los Azules project the market is about to be compelled by the 3 catalysts to better weigh McEwen Copper’s value.

McEwen copper has applied for award of RIGI status by Argentina's government. Conferral of RIGI standing is reported by McEwen to add some US $900 million to the value of the Los Azules project. This award decision is currently expect by fall 2025 and may immediately give a boost to McEwen Mining shares.

With the ( probable ) award of RIGI standing, McEwen Copper will be able to more accurately complete its ‘Definitive Feasibility Study’ ( the final most detailed valuation stage ) and thus be able to complete McEwen Copper’s equity IPO.

As explained above, this IPO is likely to drive McEwen Copper’s valuation closer to the valuation justified by the comparable Vicuna project, ie. toward $US 2.041 Billion.

The IPO valuation will also be reflected by moving the valuation of the 46% stake held as an asset on McEwen Mining’s balance sheet, toward $939 million, ( i.e. = 46% x US$ 2.041 billion )

Note, also that Los Azules are not closely comparable because while it an Vicuna are in the same Argentine province, Los Azules is at lower altitude (helping costs), has a higher resource tonnage of copper, at higher grade, closer to vital infrastructure, and at lower cash cost to produce copper cathodes. So used of Vicuna valuation metrics probably understates Los Azules.

Impact on McEwen Minings (MUX) valuation

For starters, consider that the current total share capital valuation of MUX is US$ 548 million. The potential value to be reflected on MUX’s balance sheet for its share of McEwen copper, i.e. US$ 939 million is 70% above the current pricing ( 8/2/2025 ) for MUX.

Then add on the indications of current market value for MUX’s producing gold mines and gold reserves (Fox Complex in Timmins camp, Gold Bar Complex, and Timberline Complex, both in Nevada.). Not to mention MUX 3.7% stake in Goliath (GOTRF). These ‘extra’ McEwen. properties may be work another $7 per share as MUX suggests.

Seems to imply in my opinion to a double in MUX shares from here may be produced as these catalysts play out….