What happened

Shares of McEwen Mining (MUX 4.13%) zoomed today, closing Monday up 15.2%. The gold and silver stock just made progress on an initial public offering it's planning in the coming year.

So what

On July 6, McEwen Mining created a subsidiary called McEwen Mining Copper to create a pure-play copper company to primarily develop its Los Azules copper mine in Argentina, and announced its plan to raise $80 million through a private offering of shares. McEwen Mining eventually intends to launch an IPO for McEwen Mining Copper within 12 months of closing the share sales.

The morning of Aug. 23, McEwen Mining took its first concrete step toward the IPO by raising $40 million via a sale of the subsidiary's shares to CEO Rob McEwen.

McEwen Mining plans to raise the remaining funds from private investors by Sept. 30. Once the entire offering is closed, it will publicly list McEwen Mining Copper within the next 12 months, and own a 68.6% stake in the subsidiary.

So why has this development got investors excited?

A person charging an electric car at a charging station.

Image source: Getty Images.

Gold and silver miner McEwen Mining believes the market is not giving the company its due for its Los Azules copper deposit, "despite its impressive size and robust economics at present copper prices." For perspective, copper prices have been sizzling this year, hitting record highs roughly three months ago before they started to cool off on concerns from China.

Copper is primarily used in heating and electrical equipment, but demand for the metal has boomed alongside the transition from fossil fuels to clean energy. Copper is used widely in the solar industry, and is an essential component for electric car batteries and chargers.

Now what

The prospects for copper are undeniably promising, but McEwen Mining is long way off from monetizing its copper assets as Los Azules hasn't even entered the pre-feasibility stage. Meanwhile, McEwen Mining is a loss-making company with negative free cash flows and significantly high production costs. In short, it's not a copper stock yet, and there are far better, worthy, and cheap gold stocks to buy right now.