McEwen Mining Inc. (NYSE and TSX: MUX) announces a
non-brokered private placement financing of up to
8,000,000 common shares of its wholly-owned
subsidiary
McEwen Copper Inc. at a subscription
price of
US$10.00 per common share, for gross
proceeds of up to
US$80 million (the
"
Offering"). McEwen Copper currently has
17,500,000 common shares outstanding.
A lead order to purchase 50% of the Offering has
been committed by Rob McEwen, Chairman and Chief Owner of McEwen
Mining. His investment corporation, Evanachan Limited, will
purchase 4,000,000 common shares of McEwen Copper
for US$40 million and is prepared to close on this
portion of the Offering immediately.
Subscription for the remaining
4,000,000 common shares is available to qualified
accredited investors, subject to a
US$2 million minimum investment and certain
other conditions. The securities sold in the Offering are private
and subject to transfer restrictions until such time they become
listed on a public exchange.
Pursuant to this transaction, McEwen Copper will
hold a 100% interest in the Los Azules copper
project in San Juan, Argentina, and a 100% interest in the
Elder Creek exploration property in Nevada,
subject to a 1.25% net smelter return (NSR) royalty on both assets
payable to McEwen Mining.
Assuming completion of the full amount of the
Offering, McEwen Mining will be the controlling shareholder and own
68.6% of McEwen Copper. The new investors,
including Rob McEwen, will own 31.4%.
McEwen Copper intends to pursue an initial
public listing within 12 months from the closing of this Offering.
Proceeds from the Offering will be used exclusively by McEwen
Copper to advance the Los Azules project to a pre-feasibility
study, construction of a new year-round access road to the project,
exploration drilling at Los Azules and Elder Creek, environmental
permitting and community relations, and general corporate
purposes.
"This is a significant and exciting
moment for McEwen Mining because of the value it should release.
Currently, the market appears to be giving us little value for our
Los Azules copper deposit, despite its impressive size and robust
economics at present copper prices. Unfortunately, the scale of the
required project development expenditures would require McEwen
Mining to issue a massive number of additional shares. This share
dilution would not be acceptable. However, we believe that by
putting our copper assets, Los Azules and Elder Creek, into a
separately listed company exclusively focused on copper, we can
create an attractive copper investment vehicle. It will allow us to
raise the money necessary to fund progress towards the rapid
development of one of the world's largest copper resources. We
expect that McEwen Copper will compare very favorably to other
single-asset copper developers. Within 12 months of closing this
Offering we plan to take the company public. In the interim, we
will be investigating ways to make a share distribution to you, MUX
shareowners, of a portion of McEwen Mining’s holdings of McEwen
Copper in a tax-efficient way," stated Rob McEwen,
Chairman and Chief Owner.
The proposed Offering was reviewed and approved
by the disinterested members of the board of McEwen Mining. McEwen
Mining will retain management direction over McEwen Copper and has
engaged consultants with significant expertise and experience
developing and operating copper mines in South America.
Los Azules is an advanced large-scale porphyry
copper exploration project located in the prolific Andean
Cordillera copper belt, 56 miles (90 km) north of Glencore’s El
Pachón project and near the border with Chile. In 2017, McEwen
Mining completed a positive Preliminary Economic Assessment (PEA)
on the project, which is available at
www.mcewenmining.com/operations/los-azules. Elder Creek is an
early-stage copper-gold porphyry exploration project located in
Northern Nevada 6 miles (9 km) from SSR Mining’s Marigold Mine
Complex.
The Offering is expected to close by July 30,
2021.
This news release and the information included
herein do not constitute an offer to buy or the solicitation of an
offer to subscribe for or to buy any of the securities described
herein, nor shall there be any sale of these securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
CAUTION STATEMENT CONCERNING
FORWARD-LOOKING INFORMATION
This news release contains certain
forward-looking statements and information, including
"forward-looking statements" within the meaning of the private
securities litigation reform act of 1995. The forward-looking
statements are intended to be subject to the safe harbor provided
by section 27a of the securities act of 1933, section 21e of the
securities exchange act of 1934 and private securities litigation
reform act of 1995.
This news release contains certain
forward-looking statements and information, including
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. The forward-looking
statements and information expressed, as at the date of this news
release, McEwen Mining Inc.'s (the "Company") estimates, forecasts,
projections, expectations or beliefs as to future events and
results. Forward-looking statements and information are necessarily
based upon a number of estimates and assumptions that, while
considered reasonable by management, are inherently subject to
significant business, economic and competitive uncertainties, risks
and contingencies, and there can be no assurance that such
statements and information will prove to be accurate. Therefore,
actual results and future events could differ materially from those
anticipated in such statements and information. Risks and
uncertainties that could cause results or future events to differ
materially from current expectations expressed or implied by the
forward-looking statements and information include, but are not
limited to, effects of the COVID-19 pandemic, fluctuations in the
market price of precious metals, mining industry risks, political,
economic, social and security risks associated with foreign
operations, the ability of the corporation to receive or receive in
a timely manner permits or other approvals required in connection
with operations, risks associated with the construction of mining
operations and commencement of production and the projected costs
thereof, risks related to litigation, the state of the capital
markets, environmental risks and hazards, uncertainty as to
calculation of mineral resources and reserves, and other risks.
Readers should not place undue reliance on forward-looking
statements or information included herein, which speak only as of
the date hereof. The Company undertakes no obligation to reissue or
update forward-looking statements or information as a result of new
information or events after the date hereof except as may be
required by law. See McEwen Mining's Annual Report on Form 10-K for
the fiscal year ended December 31, 2020, and other filings with the
Securities and Exchange Commission, under the caption "Risk
Factors", for additional information on risks, uncertainties and
other factors relating to the forward-looking statements and
information regarding the Company. All forward-looking statements
and information made in this news release are qualified by this
cautionary statement.
The NYSE and TSX have not reviewed and do not
accept responsibility for the adequacy or accuracy of the contents
of this news release, which has been prepared by management of
McEwen Mining Inc.
ABOUT MCEWEN MINING
McEwen Mining is a diversified gold and silver producer and
explorer focused in the Americas with operating mines in Nevada,
Canada, Mexico and Argentina.
CONTACT INFORMATION: |
Investor Relations:(866)-441-0690 Toll
Free(647)-258-0395Mihaela Iancu ext.
320info@mcewenmining.com |
|
150 King Street WestSuite 2800, P.O. Box 24Toronto, ON, CanadaM5H
1J9 |
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