Date Closed

February 24, 2023

Lead Office

Vancouver

On February 24, 2023, FCA Argentina S.A., the Argentine unit of global automaker Stellantis N.V. (“Stellantis”), acquired a 14.2% shareholding in McEwen Copper Inc. (“McEwen Copper”), which will be used to fund the construction of McEwen’s Los Azules copper project in San Juan, Argentina, for consideration of approximately $30 billion Argentine pesos. In connection with its investment, Stellantis was granted a copper offtake option on the Los Azules project proportionate to its shareholding percentage. The two-part transaction consists of a private placement of 2,850,000 common shares, and the purchase of 1,250,000 common shares indirectly owned by McEwen Mining in a secondary sale. With the closing of the investment, McEwen Copper will have 28,885,000 common shares outstanding, its shareholders are: McEwen Mining Inc. 51.9%, Stellantis 14.2%, Nuton 14.2%, Rob McEwen 13.8%, Victor Smorgon Group 3.5%, and other shareholders 2.4%.

The Los Azules project is projected to produce 100,000 tons of copper cathodes per year starting in 2027. It was ranked in the top 10 largest undeveloped copper deposits in the world by Mining Intelligence (2022). Its current copper resources are estimated at 10.2 billion pounds at a grade of 0.48% Cu (Indicated category) and an additional 19.3 billion pounds at a grade of 0.33% Cu (Inferred category). It is estimated that the Los Azules project will be operational for at least 33 years after the start of production.

Stellantis is a leading automobile and mobility provider, products and services include Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS Automobiles, Fiat, Jeep®, Lancia, Maserati, Opel, Peugeot, RAM, Vauxhall, Free2Move and Leasys. Stellantis plans to become carbon net zero by 2038. Copper is an essential raw material for vehicle electrification, and mass electrification is a key component of Stellantis’s decarbonization plan. This strategic investment by Stellantis in one of the largest copper projects currently under development for this commodity will secure part of its copper demand from 2027 onwards.

McCarthy Tétrault advised FCA Argentina S.A., the Argentine unit of Stellantis, with a team led by Shawn Doyle that included Peter Quon, Alexandra Comber, Josh Friedman (Corporate), Jeremy Ho, Matthew Kraemer, Colton Dennis (Tax), Michael Caldecott (Competition/Antitrust & Foreign Investment), and Alex Trieber (Employment).