MUX McEwen Mining Inc

Item 1.01  Entry into a Material Definitive Agreement.

On March 31, 2022, McEwen Mining Inc. (the “Company”) agreed to borrow an additional $15 million from Evanachan Limited (“Evanachan”), an Ontario corporation and an affiliate of the Company’s Chairman and Chief Executive Officer and the beneficial owner of more than 5% of its common stock, Robert McEwen. The loan is evidenced by a subordinated promissory note of that date executed by the Company in favor of Evanachan (the “Note”), a copy of which is filed with this report as Exhibit 10.1. The principal amount of the loan bears interest at the rate of 8% per annum, payable monthly in arrears. The principal and any accrued but unpaid interest are due and payable in full on September 30, 2025. The Note is unsecured.

On April 1, 2022, and, among other reasons, to permit execution and delivery of the Note, the Company entered into a Second Amended and Restated Credit Agreement (“Credit Agreement”) with Sprott Private Resource Lending II (Collector), LP as administrative agent (“Agent”) and lender and Evanachan (collectively with Agent, the “Lenders”). The Credit Agreement amends the credit facility and related agreement in the amount of $50 million previously executed June 25, 2020 (the “Original Credit Agreement”). The Credit Agreement is filed with this report as Exhibit 10.2.

The loan represented by the Credit Agreement continues to bear interest at the rate of 9.75% per year with interest payments due monthly in arrears. The maturity date of the loan has been extended from August 31, 2023 under the Original Credit Agreement to March 31, 2025 under the Credit Agreement. In addition to extension of the maturity date and allowance of the execution and delivery of the Note, the Credit Agreement contains the following modifications from the provisions of the Original Credit Agreement:

Remaining provisions of the Original Credit Agreement remain substantially unchanged.

The shares issued to the Agent were valued at a total of one percent of the principal amount of the loan, or $500,000, and the number of shares issued to the Lenders was determined based on the closing price of the Company’s common stock on the New York Stock Exchange, the Company’s principal Exchange, on the five days preceding the execution of the Credit Agreement. The shares were issued pursuant to exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Act”), and from the prospectus delivery requirements under Canadian securities law.

The Credit Agreement contains representations and warranties, affirmative and negative covenants customary for financings of this type, including, but not limited to, limitations on additional borrowings, additional investments and asset sales.  Until the loan is repaid, the Company continues to be restricted from paying distributions to its shareholders.

The Credit Agreement is not intended to provide any factual information about the Company. The representations, warranties, and covenants contained in the Credit Agreement were made only for purposes of the Credit Agreement, including the allocation of risk between the parties, and as of specific dates, were solely for the benefit of the parties to the Credit Agreement, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Credit Agreement.

The preceding summaries of the Note and the Credit Agreement are qualified in their entirety by reference to the full text of the documents, copies of which are filed with this report.