Rob McEwen, the founder of Goldcorp (G) Inc., says his McEwen Mining Inc. (MUX) may sell a copper project and use the proceeds to help finance its plan to become one of the world’s biggest gold producers.

“All the big players” in the copper industry have expressed an interest in the Los Azules deposit in Argentina, McEwen said at a Nov. 15 investor presentation in New York. “Arms of the Chinese government” are among those who’ve been in contact, he said, without giving details.

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Goldcorp Inc. founder Rob McEwen said, “The project is very large for a company with our size and balance sheet.” Photographer: Michael Nagle/Bloomberg

“The project is very large for a company with our size and balance sheet,” McEwen, 62, said in a telephone interview yesterday. “You would rather go in with someone who knows how to do that.”

Selling Los Azules would free up cash for McEwen Mining’s precious-metals exploration projects in Argentina, Mexico and the U.S. as producers find it difficult to raise funds. In Canada , where more than 400 gold miners are based, producers announced $2.53 billion of equity sales this year, down from $3.51 billion in the same period a year earlier, according to data compiled by Bloomberg.

McEwen Mining said it settled a lawsuit over Los Azules that had brought its ownership into question, allowing the Toronto-based company to realize the project’s full potential.

“We put a data room together,” McEwen said last week. “We’ll be inviting people who have expressed an interest down there in January.”

Mining Finance

While cash from selling the project would be welcome, McEwen says his company can still raise more funds, even though it’s “not the friendliest time” for getting mining finance. McEwen Mining said last month it plans to raise about $60 million in a rights offering, backstopped by its CEO, who according to its website has a 25 percent stake in the company.

Los Azules is worth about $535 million, based partly on the deposit’s 15 billion pounds of copper resources, and will cost almost five times that to develop, said Aleksandra Bukacheva, a Toronto-based analyst at Fraser Mackenzie Ltd.

“A junior precious-metals company is unlikely to come up with the $2.5 billion on its own needed to develop a copper mine at Los Azules,” Bukacheva, who has a hold rating on the stock, said by phone.

The site may appeal to Japan ’s Sumitomo Metal Mining Co., Korea Resources Corp. and other Asian companies keen to secure copper supplies, she said. Many of the largest copper producers, such as Xstrata Plc (XTA) and BHP Billiton Ltd., might not be interested because they’re already developing or expanding comparable deposits in South America, according to Bukacheva.

Goldcorp’s Success

Katelyn Kim at Korea Resources’ Toronto office didn’t immediately return a call from Bloomberg seeking comment. Ryota Sekine, a vice president and director of Seattle-based Sumitomo Metal Mining America Inc., wasn’t immediately available to comment. The publicity department of China ’s National Development and Reform Commission couldn’t immediately comment on the matter. Three calls to the office of Yao Jian, a spokesman for China’s Ministry of Commerce, went unanswered.

McEwen, the founder of his eponymous company, is trying to repeat his success at Vancouver-based Goldcorp, a Canadian gold producer he established about two decades ago and one that earlier this month briefly surpassed Toronto-based Barrick Gold Corp. (ABX) to become the world’s largest producer of the metal.

The Canadian businessman switched from a career in investment to mining in 1990. He was CEO for 13 years, during which time the company announced six acquisitions valued at a combined $2.26 billion, according to data compiled by Bloomberg.

U.S. Gold

He created McEwen Mining by renaming U.S. Gold Corp. after its C$747 million acquisition of Minera Andes Inc. in January, combining two companies of which he was CEO.

“I think he will ultimately achieve a good deal of success,’ said Aaron Kennon, the New York-based co-founder and CEO of Clear Harbor Asset Management LLC. ‘‘He may have picked a couple of difficult jurisdictions early on that he later realized were more challenging than he would have hoped -- and Argentina is one of those areas.’’

Argentina placed restrictions on mining companies last year to make them keep export revenue in the country. McEwen Mining is spending cash from its stake in the San Jose mine in the country on exploration at Los Azules, Ian Ball, a senior vice president at the company, said at the New York presentation.

The company said last week that it settled a lawsuit with Vancouver-based TNR Gold Corp. (TNR) over Los Azules, allowing McEwen Mining to boost exploratory drilling at the site and examine parts of the project in Argentina’s San Juan province that were previously contested.

Operating Mines

McEwen Mining owns the El Gallo silver and gold mine in Mexico, which is in production. It also has a 49 percent stake in San Jose, another operating gold and silver mine, with the other 51 percent held by London-based Hochschild Mining Plc. (HOC) In addition to Los Azules, McEwen Mining is developing the Gold Bar and Tonkin gold projects in Nevada .

While the company says it plans to increase annual gold production to 290,000 ounces by 2015 from 105,000 ounces now, its CEO says that could be exceeded. McEwen Mining will target qualification for the Standard & Poor’s 500 index during 2015 and will probably seek an acquisition before then, McEwen said.

McEwen Mining, which rose 0.6 percent to C$3.54 at 9:42 a.m. in Toronto trading , has dropped 38 percent since the closing of the U.S. Gold-Minera Andes deal. In that time, the S&P/TSX Global Gold Sector Index (SPTSGD) has fallen 19 percent, while the price of gold for immediate delivery in London has declined 0.5 percent. For McEwen, the underperformance of gold-mining equities presents a clear buying opportunity.

‘The disparity between gold and stocks is enormous right now,” he said. “We haven’t seen it grow this big in the last 11 years.”

To contact the reporters on this story: Simon Casey in New York at scasey4@bloomberg.net ; Christopher Donville in Vancouver at cjdonville@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net