Los Azules Drilling and Contracts Point Toward Mid-2027 FID

McEwen Copper closed a US$240 million term loan on 27 August 2026. That headline travelled fast. What it does not tell you is whether the money is flowing into a project that is genuinely ready to build, or one that is still defining itself.

That distinction matters because financing announcements are the easiest part of a mining project to track and the least reliable indicator of construction readiness. The signals that actually confirm whether a project is approaching a final investment decision (FID), the point at which a company formally commits to build, sit deeper: in drilling results, equipment contracts, contractor appointments, and operational evidence from the field.

Here is what the technical and procurement record at Los Azules actually shows about where this project sits on the construction-readiness spectrum, and what the next six months of milestones will tell you about the probability of an on-time FID in mid-2027.

What 5,600 metres of drilling actually tells you about pit design

Geotechnical drilling is different from exploration drilling. Exploration drilling tells you what is in the ground. Geotechnical drilling tells you whether the ground itself can hold the shape of the mine you want to build: how steep the pit walls can be, where you can safely place waste rock, and whether the foundations beneath your processing plant and water infrastructure are stable enough to support decades of operations.

The most recent field season, covering 2025-2026, concluded with more than 5,600 metres of geotechnical and condemnation drilling completed. The company reported that geotechnical outcomes exceeded initial expectations, giving the engineering team a stronger basis for refining open-pit geometry and slope stability assumptions. Pit slope angles across the geotechnical sectors sit in the 32-37 degree range, according to the 2025 feasibility study.

The LOP Project pit slope design guidelines establish the benchmarks that geotechnical practitioners use when assessing rock mass strength and slope stability for open-pit mine feasibility, providing the methodological context against which the 32-37 degree slope angles confirmed at Los Azules can be evaluated.

One result deserves specific attention. Condemnation drilling, which tests whether a proposed facility site sits on top of mineralisation that would be sterilised by building on it, confirmed that the planned North-East rock storage facility location is suitable. That removes a layout risk that could have forced expensive redesign later.

A growing geotechnical record that supports detailed engineering

The single-season result is only part of the picture. Since late 2023, McEwen Copper has conducted several large geotechnical investigation programmes using both sonic and diamond drilling methods to characterise foundations for the plant, waste dumps, and water infrastructure. The cumulative database now stands at 12,468 metres, one of the most extensive geotechnical programmes in Argentina.

That number is worth pausing on. Key data points from the geotechnical record:

• 5,600+ metres drilled in the 2025-2026 campaign, with better-than-expected results for pit design
• 12,468 metres total geotechnical drilling across all programmes since late 2023
• Pit slope angles of 32-37 degrees confirmed across geotechnical sectors
• North-East rock storage facility site confirmed suitable via condemnation drilling
• Sonic and diamond drilling methods used to characterise foundations for plant, waste dumps, and water infrastructure

A project still deciding whether to proceed does not build a geotechnical database of this scale. This is a project being prepared for detailed construction design, and investors evaluating construction readiness should treat it as a risk-reduction signal, not a technical footnote. Geotechnical adequacy is rarely the reason a mine gets built, but it is frequently the reason a mine’s cost and schedule blow out.

Metso contracts and mine fleet tender: the procurement architecture taking shape

When a project awards engineering contracts for its primary processing circuit, something changes. The flowsheet is no longer a variable. The supplier ecosystem is no longer theoretical. The technical optionality that characterised earlier stages gives way to a locked-in processing identity, and the investment question shifts from design risk to execution risk.

Metso has been awarded the engineering scope for the core process equipment packages at Los Azules, encompassing the solvent extraction-electrowinning (SX/EW) circuit, a process that uses chemical solutions to extract copper from leached ore and then deposits it as pure metal using an electrical current, along with sulfuric acid systems and crushing equipment. Together, these represent the core mechanical architecture of the processing plant.

SX/EW processing technology has become the preferred production route for large heap leach copper deposits because it produces refined cathode on site, eliminating the concentrate shipping and smelting costs that erode margins at conventional sulphide operations, a structural cost advantage that is reflected directly in the project’s C1 cost position.

Processing architecture: Los Azules is designed as a heap leach operation with no conventional tailings facilities and 100% renewable power, producing copper cathode on site. Average annual output over a 21-year mine life is targeted at 148,200 tonnes of copper cathode, according to the 2025 feasibility study.

The Metso contracts are not the only procurement workstream in motion. As of August 2026, the tender process for the open-pit mining fleet has reached its concluding phase.

What this means for your assessment: two of the three major equipment procurement streams are either resolved or nearly so. That reduces the procurement execution risk that typically sits between feasibility and construction start, a period where unresolved supplier contracts can delay schedules by quarters.

Operating at altitude in a once-in-two-decades winter

According to the company, the 2025-2026 winter brought snowfall conditions to the Los Azules site that ranked among the most severe recorded in approximately twenty years. Heavy snowfall created sustained challenges across site re-access, logistics, water management, and snowmelt operations. This is not colour. It is evidence.

Delivering more than 5,600 metres of drilling through those conditions required logistics infrastructure, workforce management systems, and site operations capacity that a project team assembles over time, not overnight. The fact that the campaign was completed, and that results came back better than expected, tells you something about the operational maturity of the team managing this site.

Key workforce and logistics facts from the campaign:

• At its busiest point during the field season, the site workforce surpassed 500 people
• Around 90% of those workers were recruited from within San Juan province
• Winter conditions required special attention to re-access, logistics, water management, and snowmelt operations
• The full drilling programme was completed despite the conditions

Local employment and the social licence dimension

The 90% provincial sourcing figure carries two kinds of significance. For construction planning, it demonstrates that a local workforce experienced in Andean mining conditions is available at scale, reducing one of the practical risks that high-altitude projects face during multi-year build programmes.

For the project’s social licence, it signals a genuine employment footprint in the host province. McEwen Copper has also stated that it stands ready to work alongside the San Juan provincial government and local communities, contributing heavy machinery and water management works to address the downstream effects of snowmelt from this exceptionally severe winter. The company has further observed that runoff from this season’s snowpack could help restore hydroelectric reservoir levels and replenish aquifers across the region, which have been depleted through several consecutive years of drought, positioning the project’s presence as a contributor to the regional water cycle rather than simply a draw on it.

High-altitude Andean mining sites carry operational risk that desk-based feasibility analysis cannot fully capture. Evidence of field-level execution capability under stress conditions is one of the more reliable indicators that a project team can manage a multi-year construction programme.

Reading the milestone sequence: how close is a construction decision?

Consider what has been resolved. The 2025 feasibility study is complete. The Environmental Impact Assessment (EIA), the formal regulatory approval confirming a project’s environmental management plan, was approved in December 2024. McEwen Copper secured admission to Argentina’s RIGI large-investment regime, a government programme offering fiscal incentives for large-scale capital projects, in September 2025. In May 2026, Société Générale was named as the exclusive financial advisor to lead the project debt financing process. The US$240 million term loan closed on 27 August 2026 and is being deployed toward FID preparation. Metso contracts are awarded. The mine fleet tender is in its final stage.

Anchor timeline: The company is targeting an FID around mid-2027, with commercial copper cathode output scheduled to begin in 2030.

The next major catalyst is the EPCM contractor selection, expected in Q4 2026. An EPCM (Engineering, Procurement and Construction Management) contractor is the firm that integrates all equipment suppliers, civil and mechanical contractors, and regulatory workstreams into a unified construction plan. Appointing one effectively completes the project execution architecture and enables a credible construction schedule and cost estimate to be finalised.

The EPCM contractor role in large-scale mining projects extends well beyond construction management: the appointed firm becomes the integrating entity responsible for aligning supplier lead times, civil and mechanical subcontractors, and regulatory inspection schedules into a single coherent build programme, which is why its selection is the milestone that makes a credible FID cost estimate possible.

Los Azules is advancing more concretely toward construction than most copper assets at a comparable stage. Proven and probable reserves of 10.2 billion pounds of copper, combined with C1 cash costs of US$1.71 per pound, place it among the more competitive undeveloped copper projects globally.

That said, a formal construction commitment still depends on factors outside the project’s own technical control, including copper market conditions and broader capital-market dynamics. No specific construction start date has been publicly committed. What has been committed is the money, the contracts, and the organisational behaviour of a team that expects to build.

What the next six months will confirm

The question for investors is no longer whether Los Azules has a viable resource. The 10.2 billion pounds of copper in proven and probable reserves, with an additional 5.4 billion pounds in measured and indicated resources, settled that. The question is whether the execution infrastructure being assembled right now will produce a credible construction cost and schedule estimate in time for a mid-2027 FID.

Three milestones in H2 2026 and early 2027 will tell you the most:

1. EPCM contractor selection (expected Q4 2026): This is the single most important near-term data point. An appointed EPCM contractor means the project has a construction manager capable of producing an integrated schedule and cost estimate, the document a board needs to approve an FID.
2. Mine fleet tender conclusion (final stage): Completing this resolves the last major equipment procurement workstream and removes a source of cost uncertainty from FID preparation.
3. Early EPCM-led schedule and cost work (H1 2027): Once the EPCM contractor is in place, the first outputs of their work, preliminary construction schedules and cost estimates, will be the clearest signal of whether a mid-2027 FID is on track.

Los Azules has moved from being a project defined by its resource to one defined by its execution programme. An investor who understands which milestones are execution-confirming (the EPCM appointment, the mine fleet award) versus which are financing-adjacent (the term loan deployment, the debt advisor engagement) is better positioned to assess FID probability than one treating all announcements as equivalent signals.

Mining capital delivery has historically underperformed relative to feasibility-stage cost estimates, with major projects regularly running 20-40% over budget by the time construction completes; the quality of front-end engineering work done between feasibility and FID is one of the stronger predictors of whether a project stays within its sanctioned cost envelope.

The copper price environment remains a relevant external variable. At C1 costs of US$1.71 per pound, the project carries margin at current prices, but the FID decision will ultimately be made in the context of where the copper market sits in mid-2027, not today.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. The FID and production timelines referenced are company targets and remain subject to market conditions, permitting progression, and capital-market dynamics.