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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
October 18, 2023 |
McEWEN MINING INC.
(Exact name of registrant as specified in
its charter)
Colorado |
|
001-33190 |
|
84-0796160 |
(State or other jurisdiction
of incorporation) |
|
(Commission
File Number) |
|
(IRS Employer Identification No.) |
150 King Street West, Suite 2800
Toronto,
Ontario, Canada
|
M5H 1J9 |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number including area code: |
(866) 441-0690 |
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing
is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of
the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
Common Stock |
|
MUX |
|
New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of
the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth
company ¨
If an emerging
growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01 |
Entry Into a Material Definitive Agreement |
As
previously disclosed in a Current Report on Form 8-K filed with the Securities Exchange Commission (“SEC”) on October
16, 2023, each of McEwen Mining Inc. (the “Company”) and McEwen Copper Inc., a privately-held Alberta, Canada subsidiary
of the Company (“McEwen Copper”), entered into separate but related agreements with with Nuton LLC, a current shareholder
of McEwen Copper and subsidiary of Rio Tinto (“Nuton”). Accordingly, on October 18, 2023, (i) McEwen Copper
and Nuton entered into a definitive private placement subscription agreement (the “Subscription Agreement”) pursuant
to which Nuton purchased 152,615 shares of McEwen Copper from McEwen Copper (the “Nuton Private Placement”) and (ii)
the Company, Minera Andes Inc., a subsidiary of the Company, McEwen Copper and Nuton entered into a definitive share purchase agreement
(the “Share Purchase Agreement”) pursuant to which Nuton purchased 232,000 shares of McEwen Copper from the Company in a secondary
sale (the “Secondary Sale” and together with the Nuton Private Placement, the “Nuton Transactions”).
The
Nuton Transactions closed on October 18, 2023. McEwen Copper received approximately $4 million in proceeds and the Company received
approximately $6 million in proceeds.
In connection with the
Nuton Transactions, McEwen Copper and certain of its affiliates entered into Amendment No. 2 to Nuton Collaboration Agreement, dated October
18, 2023, to amend the Nuton Collaboration Agreement, dated August 30, 2022, as amended by Amendment No. 1 to the Nuton Collaboration
Agreement, dated March 9, 2023, to extend the period of exclusivity over novel, trade secret or patented copper heap leach technologies
until February 1, 2025.
Following
the consummation of the Nuton Transactions, the Company owns 47.7% of McEwen Copper common stock and Nuton owns 14.5% of McEwen Copper
common stock.
Each
of the agreements discussed above may contain customary representations, warranties, conditions and agreements in connection with the
transactions. They are not intended to provide any other factual information about the Company, McEwen Copper, or any other
Company subsidiary. The representations, warranties and covenants contained in the agreements were made only for purposes of such agreements
and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon
by the contracting parties.
The
sales of McEwen Copper common stock were made in transactions not registered with the SEC. Specifically, in the case of the Nuton
Secondary Transaction the offers and sales were exempt from the registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”), including under Sections 4(a)(1) and 4(a)(2) of the Securities Act and regulations, interpretive
statements and letters issued by the SEC or its staff and decisions of courts thereunder and / or Regulation S under the Securities Act;
and in the case of the Nuton Private Placement, pursuant to Section 4(a)(2) of the Securities Act, Regulation S and/or Rule 506 of
Regulation D, each promulgated under the Securities Act. Each of the investors in the offerings in the U.S. was an accredited investor
as defined in Regulation D. In each transaction exempt under Regulation S, the offers and sales were made in offshore transactions and
no directed selling efforts were made in the U.S. In each case, offering restrictions were imposed.
Item 3.02 |
Unregistered Sales of Equity Securities |
The information set forth in Item 1.01 above is
incorporated by reference into this Item 3.02.
Item 9.01 |
Financial Statements and Exhibits. |
(d) |
Exhibits. The following exhibits are furnished or filed with this report, as applicable: |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
McEWEN MINING INC. |
|
|
|
Date: October 24, 2023 |
By: |
/s/ Carmen Diges |
|
|
Carmen Diges, General Counsel |
Exhibit 99.1
Final
SHARE PURCHASE AGREEMENT
by and among
MCEWEN
MINING INC., a company existing under the laws of the State of Colorado (“MUX”)
MINERA
ANDES INC., a company existing under the laws of the Province of Alberta (“Vendor”);
MCEWEN
COPPER INC., a company existing under the laws of the Province of Alberta (the “Company”);
and
NUTON
LLC, a company existing under the laws of the State of Delaware (“Purchaser”).
Dated as of:
October 18, 2023
ANNEX I
TERMS AND CONDITIONS
TABLE OF CONTENTS
Page
Article 1 DEFINITIONS and Interpretation |
1 |
|
|
1.1 |
Definitions |
1 |
1.2 |
Rules of Interpretation |
6 |
1.3 |
Currency |
7 |
1.4 |
Computation of Time |
7 |
1.5 |
Sections that Survive Termination and Closing; Claims Following Termination |
7 |
1.6 |
Exhibits and Schedules |
8 |
|
|
|
Article 2 Purchase of Shares and Purchase PRice |
8 |
|
|
2.1 |
Purchase of Shares |
8 |
2.2 |
Purchase Consideration |
8 |
|
|
|
Article 3 CLOSING |
8 |
|
|
3.1 |
Closing |
8 |
3.2 |
Closing Actions |
8 |
3.3 |
Conditions Precedent to the Closing |
9 |
|
|
|
Article 4 REPRESENTATIONS AND WARRANTIES |
12 |
|
|
4.1 |
Mutual Representations and Warranties |
12 |
4.2 |
Specific Representations and Warranties of Purchaser |
12 |
4.3 |
Specific Representations and Warranties of the McEwen Parties |
14 |
|
|
|
Article 5 Indemnification |
21 |
|
|
5.1 |
Indemnification by the McEwen Indemnifying Parties |
21 |
5.2 |
Indemnification by Purchaser |
22 |
5.3 |
Limitation of Liability for Indemnities |
22 |
5.4 |
Term of Indemnities |
23 |
5.5 |
Indirect and Consequential Damages |
23 |
5.6 |
Third Party Claim Indemnity Procedures |
23 |
5.7 |
Adjustment to Purchase Price |
25 |
|
|
|
Article 6 GENERAL |
25 |
|
|
6.1 |
Notices |
25 |
6.2 |
Amendment |
26 |
6.3 |
Public Disclosure |
26 |
6.4 |
Assignment |
27 |
6.5 |
Governing Law |
27 |
6.6 |
Waiver |
27 |
6.7 |
Severability |
27 |
6.8 |
Benefit of the Agreement |
28 |
6.9 |
No Third Party Rights |
28 |
6.10 |
Entire Agreement |
28 |
6.11 |
Further Assurances |
28 |
6.12 |
Time of the Essence |
28 |
6.13 |
Counterparts and Electronic Execution |
28 |
EXHIBITS
EXHIBIT A |
Material Subsidiaries |
A-1 |
|
|
|
EXHIBIT B |
Los Azules Project |
B-1 |
W
I T N E S S E T H:
WHEREAS
the Company owns, through its indirect wholly-owned subsidiary, ACM, the Los Azules Project (as defined herein) and, through its wholly-owned
subsidiary, NPGUS LLC, a company existing under the laws of the State of Colorado (“NPGUS”), the Elder Creek Project
(as defined herein);
AND
WHEREAS the Vendor is a 48.7% beneficial owner of the Company, indirectly through its wholly-owned subsidiary MAI;
AND
WHEREAS Vendor beneficially and indirectly holds 15,000,000 Common Shares (as defined herein);
AND
WHEREAS Purchaser desires to purchase from Vendor, and Vendor desires to sell to Purchaser, the Purchased Shares (as defined
herein), subject to the terms and conditions of this Agreement;
NOW,
THEREFORE, in consideration of the premises and covenants contained herein, and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), the Parties agree as follows:
Article 1
DEFINITIONS and Interpretation
The terms defined in this
Article 1 shall, for all purposes of this Agreement, have the following meanings:
“ACM” means Andes Corporación
Minera S.A.;
“Affiliate” in reference to
a Party, means any Person, that directly or indirectly controls, is controlled by, or is under common control with, such Party;
“Agreement” means this Share
Purchase Agreement and its exhibits, as amended and modified from time to time;
“Amendment No. 2 to the Nuton Collaboration
Agreement” means the second amendment to the Nuton Collaboration Agreement dated August 30, 2022, dated as of the date
hereof and in the form attached to the Subscription Agreement;
“Anti-Corruption
Laws” has the meaning given to such term in Section 4.3(ss);
“Applicable Laws” means all
applicable domestic or foreign national, federal, provincial, territorial, state, regional and local laws (whether statutory or common
law or equity), rules, ordinances (including zoning and mineral removal ordinances), regulations, grants, concessions, franchises, licences,
orders, directives, judgments, decrees, and other governmental restrictions, including permits and other similar requirements, whether
legislative, municipal, administrative or judicial in nature and in any case, issued, enacted, promulgated, enforced or entered by any
Governmental Authority (including Environmental Laws, mining laws and any applicable securities laws and any applicable rules of
any stock exchange imposing disclosure requirements);
“Authorizations” has the meaning
given to such term in Section 4.3(q);
“Basket” has the meaning given
to such term in Section 5.3(a);
“Business”
means the business conducted by any of the McEwen Copper Companies, which is as of the date hereof primarily the conduct of exploration
and development in relation to the Projects;
“Business Day” means any day
that is not a weekend or a holiday in Toronto, Ontario;
“Cayman Subsidiaries” means,
collectively, International Copper Mining Inc., Los Azules Mining Inc. and San Juan Copper Inc., each of which is a company existing
under the laws of the Cayman Islands;
“Claim” means any actual or
threatened civil, criminal, administrative, regulatory, arbitral or investigative inquiry, action, suit or proceeding and any notice,
demand or claim resulting therefrom or any other claim or demand of whatever nature or kind;
“Claim
Notice” has the meaning given to such term in Section 5.6(a);
“Closing” means the completion
of the actions set out in Sections 3.1 and 3.2 following the satisfaction of the Conditions Precedent;
“Closing Date” has the meaning
given to such term in Section 3.1;
“Closing Time” has the meaning
given to such term in Section 3.1;
“Common Shares” means common
shares in the capital of the Company;
“Company”
has the meaning given to such term in the preamble to this Agreement;
“Conditions Precedent” has
the meaning given to such term in Section 3.3;
“control”
when used to describe a relationship between one Person and any other Person (including the definitions of “Affiliate” and
“Subsidiary”), has the following meanings:
| (a) | a Person controls a body corporate if securities of the body corporate to which are attached more than
50% of the votes that may be cast to elect directors of the body corporate are owned by the Person and the votes attached to those securities
are sufficient, if exercised, to elect a majority of the directors of the body corporate; |
| (b) | a Person controls an unincorporated entity, other than a limited partnership, if more than 50% of the
ownership interests, however designated, into which the entity is divided are owned by that Person and the Person is generally able to
direct the business and affairs of the entity; |
| (c) | a general partner of a limited partnership controls the limited partnership; |
| (d) | a Person who controls an entity is deemed to control any entity that directly or indirectly is controlled,
or deemed to be controlled, by the entity; and |
| (e) | a Person is deemed to beneficially own, for the purposes of subparagraphs (a) or (b); |
| (i) | any securities of the entity that are owned by that Person, and |
| (ii) | any securities of the entity that are owned by any entity directly or indirectly controlled by that Person, |
and the terms “controls”
and “controlled” have corresponding meanings;
“COVID-19 Relief” means any
support payments, loans, benefits, wage or other subsidies or other incentives provided, in each case, as a result of the COVID-19 pandemic
from any Governmental Authority or financial institution;
“Elder
Creek Project” has the meaning given to such term in Section 4.3(r);
“Encumbrance”
means any encumbrance, mortgage, lien, charge, pledge or security interest, whether fixed or floating, or any assignment, lease, option,
right of pre-emption, privilege, usufruct, easement, encroachment, hypothec, pledge, title retention agreement, reservation of title,
servitude, right of way, restrictive covenant, restriction on transfer, right of occupation or other adverse claim or restriction on use,
in any case, regardless of form, whether or not registered or registrable and whether or not consensual or arising by Applicable Laws,
including any or any matter capable of registration, or any other right or claim of any kind or nature whatever which affects ownership
or possession of, or title to, any interest in, or the right to use or occupy, property or assets;
“Environmental
Laws” means Applicable Laws aimed at reclamation or restoration of the environment; abatement of pollution and the corresponding
sanctioning regime; protection of the environment and the natural resources; ensuring public safety from environmental hazards; protection
of cultural or historic resources; management, storage or control of hazardous substances; releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances as wastes into the environment, including ambient air, surface water
and groundwater; and all other Applicable Laws relating to the manufacturing, processing, distribution, use, treatment, storage, disposal,
handling or transport of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances or hazardous wastes;
“GAAP” means generally accepted
accounting principles.
“Governmental Authority” means
any (i) domestic or foreign government, whether national, federal, provincial, territorial, regional, county, state, municipal
or local or other governmental or public department, (ii) any central bank, court, individual arbitrator or arbitration panel, commission,
board, bureau, agency or instrumentality, domestic or foreign, (iii) subdivision or authority of any of the foregoing, (iv) securities
regulatory authority or stock exchange, and (v) quasi-governmental, self-regulatory organization or private body exercising any regulatory,
expropriation or taxing authority under or for the account of any of the foregoing; in each case, having jurisdiction in the relevant
circumstances;
“GST/HST”
has the meaning given to such term in Section 4.3(kk);
“IFRS” means International
Financial Reporting Standards in effect from time to time as adopted in the applicable jurisdiction and applied consistently throughout
the periods involved;
“Indemnified
Party” has the meaning given to such term in Section 5.3(a);
“Indemnifying
Party” has the meaning given to such term in Section 5.3(a);
“International
Jurisdiction” has the meaning given to such term in Section 4.2(b);
“Liabilities”
means, with respect any Person, any and all indebtedness, liabilities, commitments and obligations of any kind of such Person, whether
fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or not accrued, asserted or not asserted, known
or unknown, determined, determinable or otherwise, whenever or however arising (including whether arising out of any contract, tort based
on negligence or strict liability or Applicable Laws);
“Los
Azules Project” has the meaning given to such term in Section 4.3(s);
“Losses”
means, with respect to any Person, any and all losses, Liabilities, Claims, obligations, judgments, fines, settlement payments, awards
or damages of any kind actually suffered or incurred by such Person (together with all reasonably incurred cash disbursements, costs and
expenses, costs of investigation, defence and appeal and reasonable legal fees and expenses), whether or not involving a Third Party Claim;
“MAI” means Minera Andes Inc.;
“Material Adverse Effect” means,
in respect of a Party, any change, event, development, circumstance or effect (or a series of effects which cumulatively result in an
effect) that is or could reasonably be expected to be materially adverse to (a) the business, assets, financial condition or results
of operations of such Party, or (b) the ability of such Party to consummate the transactions contemplated in this Agreement on a
timely basis;
“Material Subsidiaries” means
each of the Subsidiaries set out in EXHIBIT A.
“McEwen
Copper Companies” means, collectively, the Company, ACM, the Cayman Subsidiaries and NPGUS;
“McEwen
Indemnified Parties” has the meaning given to such term in Section 5.2;
“McEwen Indemnifying Parties”
and “McEwen Indemnifying Party” each have the meanings given to such terms in Section 5.1;
“McEwen Parties” means, collectively,
Vendor, MAI and the Company;
“Mineral Claims” means all
interests in material mining claims, concessions, exploration, reconnaissance, exploitation or extraction rights, surface rights, subsurface
rights or similar rights, that are held by the McEwen Copper Companies;
“Mining
Claims” has the meaning given to such term in Section 4.3(t);
“Minimum Claim Amount” has
the meaning given to such term in Section 5.3(b);
“Money
Laundering Laws” has the meaning given to such term in Section 4.3(tt);
“Notice
Period” has the meaning given to such term in Section 5.6(a);
“NPGUS” has the meaning given
to such term in the Recitals;
“Parties”
mean the parties to this Agreement, and “Party” means any one such party, or a particular such party, as the context
requires;
“Person”
means a natural person, partnership, limited partnership, limited liability partnership, corporation, limited liability company, joint
stock company, trust, unincorporated association, joint venture, juridical person or Governmental Authority, and related personal pronouns
have a similarly extended meaning, as the context requires;
“Projects” means, collectively,
the Los Azules Project and the Elder Creek Project;
“Purchase Price” has the meaning
given to such term in Section 2.1;
“Purchased Shares” has the
meaning given to such term in Section 2.1;
“Purchaser”
has the meaning given to such term in the Offer;
“Purchaser Indemnified Parties”
has the meaning given to such term in Section 5.1;
“Sanctioned
Person” has the meaning given to such term in Section 4.3(uu);
“Sanctions
Laws” has the meaning given to such term in Section 4.3(ss);
“Shareholder Agreement” means
the unanimous shareholder agreement dated August 20, 2021 by and among the Company and the shareholders of the Company;
“Subscription Agreement” means
the subscription agreement dated as of the date hereof between the Company and Purchaser, to which the form of this Agreement is attached;
“Subsidiary” in reference to
a Party, means any Person, that is directly or indirectly controlled by, such Party, and for greater certainty, each of the Cayman Subsidiaries,
ACM and NPGUS is a Subsidiary of the Company;
“Tax Act” means the Income
Tax Act (Canada) as amended from time to time, including the regulations promulgated thereunder;
“Tax Authority” means any Governmental
Authority having jurisdiction over the assessment, determination, collection, administration or imposition of any Taxes;
“Tax Return” means all returns,
reports, declarations, elections, notices, filings, forms, statements and other documents (whether in tangible, electronic or other form)
of, or in respect of, Taxes that are required by Applicable Laws to be filed with or supplied to any Tax Authority (including any amendments,
schedules, attachments, supplements, appendices and exhibits thereto).
“Taxes” means all federal,
national, state, provincial, territorial, county, municipal, or local taxes, whether domestic or foreign, and all duties, imposts, levies,
assessments, tariffs and other charges imposed, assessed or collected by a Tax Authority, including (i) any income, gross income,
net income, gross receipts, net worth, business, royalty, capital, capital gains, goods and services, harmonized sales, value added, severance,
stamp, franchise, occupation, premium, capital stock, sales and use, real property, land transfer, personal property, ad valorem, transfer,
licence, profits, windfall profits, payroll, environmental, employment, employer health, pension plan, anti-dumping, countervail, excise,
severance, stamp, occupation or premium tax, (ii) all withholdings on amounts paid to or by the relevant Person, (iii) all employment
insurance premiums, pension plan contributions or premiums, (iv) any fine, penalty, interest, surcharge or addition to tax, (v) any
tax imposed, assessed, or collected or payable pursuant to any tax-sharing agreement or any other contract relating to the sharing or
payment of any such tax, levy, assessment, tariff, duty, deficiency or fee, (vi) claw-backs, repayments, obligations or other liabilities
under or in respect of any COVID-19 Relief and (vii) any tax of a type referred to in this paragraph that is payable by a Person
as a result of being a member of an affiliated, consolidated, combined or unitary group, or as a result of succeeding to such liability
as a result of merger, conversion or asset transfer or as a result of any obligation under any tax sharing arrangement or indemnity agreement;
“Third Party” means any Person
other than a Party hereto or an Affiliate of a Party hereto;
“Third
Party Claim” has the meaning given to such term in Section 5.6(a);
“Transaction Document” means
this Agreement, the Subscription Agreement, Amendment No. 2 to the Nuton Collaboration Agreement and all of the agreements and documents
referred to herein or therein, as the case may be, including all agreements or documents to be delivered at Closing under or pursuant
to this Agreement and at the closing of the transactions contemplated under the Subscription Agreement;
“U.S.
Person” has the meaning given to such term in Section 4.2; and
“Vendor”
means MUX in its capacity as beneficial owner of the Purchased Shares.
| 1.2 | Rules of Interpretation |
The following rules of
interpretation shall apply in this Agreement unless something in the subject matter or context is inconsistent therewith:
| (1) | the singular includes the plural and vice-versa; |
| (2) | where a word or phrase is defined, its other grammatical forms shall be deemed to have corresponding meanings; |
| (3) | the headings in this Agreement form no part of this Agreement and are deemed to have been inserted for
convenience only and shall not affect the construction or interpretation of any of its provisions; |
| (4) | all references in this Agreement shall be read with such changes in number and gender that the context
may require; |
| (5) | references to “Articles,” “Sections”, “Recitals” and “Exhibits”
refer to articles, sections and recitals of and exhibits to this Agreement; |
| (6) | the use of the words “including” or “includes” followed by a specific example
or examples shall not be construed as limiting the meaning of the general wording preceding it; |
| (7) | the rule of construction that, in the event of ambiguity, the contract shall be interpreted against
the Party responsible for the drafting or preparation of the Agreement, shall not apply; |
| (8) | the words “herein,” “hereof” and “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular Section or other subdivision; |
| (9) | any reference to a statute is a reference to the applicable statute and to any regulations made pursuant
thereto and includes all amendments made thereto and in force, from time to time, and any statute or regulation that has the effect of
supplementing or superseding such statute or regulation; |
| (10) | unless something in the subject matter or context is inconsistent therewith or unless otherwise provided,
a reference to a specific agreement or document is to that agreement or document in its current form or as the same may from time to time
be amended, novated, supplemented or replaced; |
| (11) | all calculations and computations made pursuant to this Agreement shall be carried out in accordance with
IFRS consistently applied to the extent that such principles are not inconsistent with the provisions of this Agreement; and |
| (12) | the words “written” or “in writing” include printing, typewriting or any electronic
means of communication capable of being visibly reproduced at the point of reception including fax or email. |
Unless otherwise indicated,
all references to moneys hereunder are references to U.S. dollars and all obligations hereunder shall be denominated in U.S. dollars.
In this Agreement, unless
something in the subject matter or context is inconsistent therewith, a “day” shall refer to a calendar day and in calculating
all time periods the first day of a period is not included and the last day is included, and in the event that any date on which any action
is required to be taken hereunder is not a Business Day, such action will be required to be taken on the next succeeding day which is
a Business Day.
| 1.5 | Sections that Survive Termination and Closing; Claims Following Termination |
| (a) | If this Agreement is terminated, no Party shall have any further liabilities or obligations under this
Agreement, except that the following provisions of this Agreement shall survive the termination of this Agreement in accordance with their
terms and otherwise to the full extent necessary for their enforcement and the protection of the Party in whose favor they run: Section 1.1,
Section 1.2, Section 1.3, Section 1.4, Section 1.5, Article 5 and Article 6 (other than Section 6.4),
along with any other provisions of this Agreement which expressly or by their nature survive the termination hereof. |
| (b) | All covenants in this Agreement shall survive the Closing until the latest date permitted by Applicable
Law or such shorter period as may be indicated by the context or expressly provided herein. |
| (c) | Nothing in this Section 1.5 shall relieve any Party from liability for damages arising out of any
breach of this Agreement occurring prior to termination of this Agreement. |
| 1.6 | Exhibits and Schedules |
The following exhibits and
schedules are attached to and incorporated in this Agreement by this reference:
Exhibit A |
Material Subsidiaries |
|
|
Exhibit B |
Los Azules Project |
Article 2
Purchase of Shares and Purchase PRice
Subject
to the terms and conditions set forth herein, at the Closing Time, Vendor shall and shall cause MAI to sell, assign and transfer to Purchaser
232,000 Common Shares (the “Purchased Shares”), representing approximately 0.8% percent of the total issued
and outstanding Common Shares in the Company, free and clear of any Encumbrances, and Purchaser shall purchase the Purchased Shares for
a purchase price of $6,032,000 (the “Purchase Price”), which shall be paid and satisfied by Purchaser in the form of
cash consideration in the manner described in Section 2.2.
| 2.2 | Purchase Consideration |
At
the Closing Time, the Purchase Price for the Purchased Shares shall be paid and satisfied by the Purchaser to the Vendor by wire
transfer in immediately available funds to the Vendor’s bank account, as directed by the Vendor, and upon receipt of such funds,
the Vendor will deliver or cause to be delivered the Purchased Shares to the Purchaser, to be paid and satisfied in accordance with Section 3.2,
and the steps in Section 3.2(a) through Section 3.2(b) (inclusive) shall occur in sequence, with each step immediately
following the preceding step, at the Closing.
Article 3
CLOSING
Subject to Section 3.3,
the Closing shall take place at the offices of the Company or by electronic exchange of documents, instruments and funds (except for documents
or instruments requiring originals), as applicable, between the parties or their respective counsel on October 18, 2023
(the “Closing Date”) or such other date as agreed in writing by the Parties at 1:00 p.m. (Eastern time)
or such other time as agreed in writing by the Parties (the “Closing Time”). The Closing shall take place concurrently
with the closing of the transactions described in the Subscription Agreement.
Subject to Section 3.3, at the
Closing Time, the following events shall occur:
| (a) | Purchaser shall pay the Purchase Price for the Purchased Shares to the Vendor by wire transfer in immediately
available funds to the Vendor’s bank account, as directed by the Vendor; |
| (b) | Vendor shall deliver to Purchaser a letter acknowledging receipt of the funds; |
| (i) | cancel share certificate no. 33 registered in the name of MAI, representing 15,000,000 Common Shares,
delivered by Vendor to the Company pursuant to Section 3.3(b)(iii); |
| (ii) | issue a share certificate in the name of MAI representing 14,768,000 Common Shares; |
| (iii) | issue and deliver to Purchaser a share certificate in the name of Purchaser representing the Purchased
Shares; and |
| (iv) | deliver to Purchaser a certified copy of the updated central securities register of the Company, which
reflects the transfer of the Purchased Shares to Purchaser. |
| 3.3 | Conditions Precedent to the Closing |
The respective obligations
of the Parties to effect the Closing are subject to the prior satisfaction or waiver by the relevant Parties of the following conditions
precedent (the “Conditions Precedent”).
| (a) | The obligation of Vendor to effect the Closing is subject to the prior satisfaction or waiver by it of
each of the following Conditions Precedent: |
| (i) | all representations and warranties of Purchaser hereunder shall be true and correct in all respects as
of the Effective Date and as of the Closing with the same effect as though made at such date (except for representations and warranties
given as of a particular time, in which case such representations and warranties must be true and correct in all respects as at the specified
time); |
| (ii) | Purchaser shall have performed or complied with all of the obligations and covenants under this Agreement
required to be performed or complied with by it at or prior to the Closing; |
| (iii) | consummation of the transactions contemplated by this Agreement shall not have been restrained, enjoined
or otherwise prohibited or made illegal by Applicable Laws. No action or proceeding shall be pending or threatened by any Governmental
Authority to restrain, enjoin or otherwise prevent the consummation of the transactions contemplated by this Agreement, or to recover
any material damages or obtain other material relief as a result of such transactions, or that otherwise relates to the application of
Applicable Laws; and |
| (iv) | Vendor shall have received each of the following: |
| A. | an officer’s certificate of Purchaser, dated as of the Closing Date, in form and substance satisfactory
to Vendor, as to: (1) its constating documents in effect as of the Closing Date; (2) resolutions of its board of directors approving
the entering into and completion of the transactions contemplated under this Agreement and the other Transaction Documents to which it
is a party; (3) incumbency and signatures of its officers executing this Agreement or any other Transaction Documents to which it
is a party; and (4) the satisfaction of the conditions set forth Sections 3.3(a)(i) and 3.3(a)(ii); |
| B. | the Subscription Agreement and the U.S. Investor Questionnaire attached to the Subscription Agreement,
in each case duly executed by Purchaser; and |
| C. | such further documents, agreements, instruments and assurances as may be reasonably required by Vendor
prior to the Closing Date in order to give effect to the transactions contemplated by this Agreement. |
| (b) | The obligation of Purchaser to effect the Closing is subject to the prior satisfaction or waiver by Purchaser
of each of the following Conditions Precedent: |
| (i) | all representations and warranties of the McEwen Parties hereunder shall be true and correct in all respects
as of the Effective Date and as of the Closing with the same effect as though made at such date (except for representations and warranties
given as of a particular time, in which case such representations and warranties must be true and correct in all respects as at the specified
time); |
| (ii) | each of the McEwen Parties shall have performed or complied with all of the obligations and covenants
under this Agreement required to be performed or complied with by such Person at or prior to the Closing; |
| (iii) | Vendor shall have delivered share certificate no. 33, representing 15,000,000 Common Shares to the Company,
and an original copy of an instrument of transfer in respect of the transfer of the Purchased Shares duly executed by Vendor in favour
of Purchaser; |
| (iv) | the consent of the shareholders of the Company to the transactions contemplated herein, including the
transfer of the Purchased Shares from Vendor to Purchaser, shall have been provided in accordance with the Shareholder Agreement; |
| (v) | consummation of the transactions contemplated by this Agreement shall not have been restrained, enjoined
or otherwise prohibited or made illegal by Applicable Laws. No action or proceeding shall be pending or threatened by any Governmental
Authority to restrain, enjoin or otherwise prevent the consummation of the transactions contemplated by this Agreement, or to recover
any material damages or obtain other material relief as a result of such transactions, or that otherwise relates to the application of
Applicable Laws; |
| (vi) | all of the conditions precedent to the closing of the transactions described in the Subscription Agreement
shall have been satisfied or waived; and |
| (vii) | Purchaser shall have received each of the following: |
| A. | an officer’s certificate of the Vendor, dated as of the Closing Date, in form and substance satisfactory
to Purchaser, as to: (1) its constating documents in effect as of the Closing Date; (2) resolutions of its board of directors
approving the entering into and completion of the transactions contemplated under this Agreement and the other Transaction Documents to
which it is a party; (3) incumbency and/or specimen signatures of its directors executing this Agreement or any other Transaction
Documents to which it is a party; and (4) the satisfaction of the conditions set forth Sections 3.3(b)(i) and 3.3(b)(ii); |
| B. | an officer’s certificate of the Company, dated as of the Closing Date, in form and substance satisfactory
to Purchaser, as to: (1) its constating documents in effect as of the Closing Date; (2) resolutions of its board of directors
approving (a) the entering into and completion of the transactions contemplated under this Agreement and the other Transaction Documents
to which it is a party and (b) the transfer of the Purchased Shares from Vendor to Purchaser and cancellation and issuance of share
certificates described in Section 3.2(c); (3) incumbency and/or specimen signatures of its directors executing this Agreement
or any other Transaction Documents to which it is a party; and (4) the satisfaction of the conditions set forth Sections 3.3(b)(i),
3.3(b)(ii), 3.3(b)(iii) and 3.3(b)(iv); |
| C. | an officer’s certificate of ACM, dated as of the Closing Date, in form and substance satisfactory
to Purchaser, as to: (1) its constating documents in effect as of the Closing Date; (2) resolutions of its board of directors
approving the entering into and completion of the transactions contemplated under the Transaction Documents to which it is a party; and
(3) incumbency and/or specimen signatures of its directors executing this any Transaction Documents to which it is a party; |
| D. | certified copy of the central securities register of the Company which evidences the share ownership in
the Company immediately prior to Closing, including Vendor as the registered holder of 15,000,000 Common Shares; |
| E. | certified copies of the constating documents and share registers of each of the Cayman Subsidiaries and
NPGUS in effect as of the Closing Date; |
| F. | a certificate of status, a certificate of good standing or their equivalent with respect to each of Vendor
and the McEwen Copper Companies other than ACM; |
| G. | a copy of the instrument of transfer in respect of the transfer of the Purchased Shares duly executed
by Vendor in favour of Purchaser; |
| H. | a legal opinion prepared by Vargas Galindez dated as of the Closing Date, in form and substance satisfactory
to Purchaser, acting reasonably (the “Vargas Opinion”); |
| I. | a legal opinion prepared by external counsel to the Cayman Subsidiaries dated as of the Closing Date,
in form and substance satisfactory to Purchaser, acting reasonably, with respect to each of the Cayman Subsidiaries’ organizational
status, good standing, share capitalization, no outstanding litigation and other matters customary in transactions similar to the transactions
contemplated by this Agreement; |
| J. | the Subscription Agreement, duly executed by the Company; |
| K. | Amendment No. 2 to the Nuton Collaboration Agreement, duly executed by the Company, the Vendor and
Robert R. McEwen; and |
| L. | such further documents, agreements, instruments and assurances as may be reasonably required by Purchaser
prior to the Closing Date in order to give effect to the transactions contemplated by this Agreement. |
Article 4
REPRESENTATIONS AND WARRANTIES
| 4.1 | Mutual Representations and Warranties |
Purchaser
hereby represents and warrants to the McEwen Parties (which representations and warranties will survive the Closing) and each of
the McEwen Parties hereby represents and warrants to Purchaser (which representations and warranties will survive the Closing) that:
| (a) | it has the requisite corporate power, legal capacity and competence to enter into and execute this Agreement
and each Transaction Document to which it is a party and to take all actions required or transactions contemplated pursuant hereto and
thereto and it is duly incorporated and validly subsisting under the laws of its jurisdiction of incorporation; |
| (b) | it has taken all corporate steps and proceedings necessary to duly approve the transactions contemplated
by this Agreement and each Transaction Document to which it is a party, and all necessary approvals and consents by its directors, shareholders
and others have been obtained to authorize execution and performance of this Agreement and each Transaction Document to which it is a
party on behalf of it, and in the case of the Company, the Company has obtained a written consent in respect of the transfer of the Purchased
Shares contemplated hereunder signed by all of the shareholders of the Company in accordance with the Shareholder Agreement; |
| (c) | the entering into of this Agreement and each Transaction Document to which it is a party and the transactions
contemplated hereby and thereby do not result in the violation of any of the terms and provisions of any law applicable to, or, if applicable,
the constating documents of, it or of any agreement, written or oral, to which it may be a party or by which it is or may be bound; and |
| (d) | it has duly executed and delivered this Agreement and each Transaction Document to which it is a party
and each such agreement or document constitutes a valid and binding agreement of it enforceable against it in accordance with its terms. |
| 4.2 | Specific Representations and Warranties of Purchaser |
Purchaser
hereby represents and warrants to the McEwen Parties (which representations and warranties will survive the Closing) that:
| (a) | Purchaser is resident in the jurisdiction set out in the preamble to this Agreement; |
| (b) | If the Purchaser is resident outside of the U.S. or Canada: |
| (i) | Purchaser is knowledgeable of, or has been independently advised as to, the applicable securities laws
having application in the jurisdiction in which Purchaser is resident (the “International Jurisdiction”) which would
apply to the purchase and sale of the Purchased Shares; |
| (ii) | Purchaser is acquiring the Purchased Shares pursuant to exemptions from prospectus or equivalent requirements
under applicable securities laws or, if such is not applicable, Purchaser is permitted to acquire the Purchased Shares under the Applicable
Laws of the International Jurisdiction without the need to rely on any exemptions; |
| (iii) | the Applicable Laws of the authorities in the International Jurisdiction do not require Vendor or the
Company to make any filings or seek any approvals of any kind from any securities regulator in the International Jurisdiction in connection
with the offer, issue, sale or resale of any of the Purchased Shares, |
| (iv) | the acquisition of the Purchased Shares by Purchaser does not trigger: |
| A. | any obligation to prepare and file a prospectus or similar document, or any other report with respect
to such purchase, in the International Jurisdiction; or |
| B. | any continuous disclosure reporting obligation of the Company in the International Jurisdiction; and |
| (v) | Purchaser will, if requested by Vendor, deliver to Vendor a certificate or opinion of local counsel from
the International Jurisdiction which will confirm the matters referred to in paragraphs (c), (d) and (e) above, to the satisfaction
of Vendor, acting reasonably; |
| (c) | Purchaser is not aware of any advertisement of any of the Purchased Shares and is not acquiring the Purchased
Shares as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications
published in any newspaper, magazine or similar media, or broadcast over radio or television, or any seminar or meeting whose attendees
have been invited by general solicitation or general advertising; and |
| (d) | no person has made to Purchaser any written or oral representations: |
| (i) | that any person will resell
or repurchase any of the Purchased Shares, |
| (ii) | that any person will refund
the purchase price of any of the Purchased Shares, or |
| (iii) | as to the future price or value
of any of the Purchased Shares; and |
| (e) | there is no person acting or purporting to act in connection with the acquisition of the Purchased Shares
for or on behalf of Purchaser who is entitled to any brokerage or finder’s fee payable by Vendor. If any such person establishes
a claim that any fee or other compensation is payable by the Company in connection with this acquisition of the Purchased Shares, Purchaser
covenants to indemnify and hold harmless Vendor with respect thereto and with respect to all costs reasonably incurred in the defence
thereof. |
In
this Agreement, the term “U.S. Person” has the meaning ascribed thereto in Regulation S, and for the purpose of this
Agreement includes: (i) any person in the United States; (ii) any natural person resident in the United States; (iii) any
partnership or corporation organized or incorporated under the laws of the United States; (iv) any partnership or corporation organized
outside the United States by a U.S. Person principally for the purpose of investing in securities not registered under the 1933
Act, unless it is organized or incorporated, and owned, by accredited investors who are not natural persons, estates or trusts; or (v) any
estate or trust of which any executor, administrator or trustee is a U.S. Person.
| 4.3 | Specific Representations and Warranties of the McEwen Parties |
Each
of the McEwen Parties hereby represents and warrants to Purchaser (which representations and warranties will survive the Closing)
that:
| (a) | each of the McEwen Copper Companies is validly subsisting under the laws of its jurisdiction of incorporation,
licensed, registered or qualified as an extra-provincial or foreign corporation in all jurisdictions where the character of its properties
owned or leased or the nature of the activities conducted by it make such licensing, registration or qualification necessary and carries
and shall carry on its business in the ordinary course and in compliance in all material respects with all Applicable Laws of each such
jurisdiction; |
| (b) | neither of Vendor or the Company is in breach of any securities laws; |
| (c) | at the time of closing on the Closing Date, the Purchased Shares will be duly and validly created, authorized
and issued; will be validly issued as fully paid as non-assessable Common Shares in the capital of the Company; |
| (d) | Vendor is the beneficial owner of the Purchased Shares, which are registered in the name of Minera Andes
Inc., with good and marketable title thereto free and clear of all Encumbrances; |
| (e) | the Company is authorized to issue an unlimited number of Common Shares and an unlimited number of Class B
common shares; and as of the date of this Agreement, 30,785,000 Common Shares are issued and outstanding and no Class B common shares
are issued and outstanding; |
| (f) | as of the Closing Date, there exist no options, warrants, rights of conversion or other rights, contracts
or commitments that could require the Company to issue any Common Shares or other securities other than the pre-emptive rights set out
in the Shareholder Agreement and the 40,000 options that the Company has agreed to grant to Michael Meding upon the completion of an initial
public offering of the Company, pursuant to the employment agreement between the Company and Michael Meding dated February 7, 2022; |
| (g) | except for Michael Meding, Alex Aguado and Stephen McGibbon, the Company has no employees or independent
contractors, and neither of such employees are entitled to any bonus, increase in compensation or other benefit that is contingent on
the Closing. The Company has provided copies of the employment agreements between the Company and each of Michael Meding and Alex Aguado,
and there are no other agreements, whether written or oral, between either of such employees and the Company; |
| (h) | purchase and sale of the Purchased Shares in accordance with the terms herein and the fulfilment of the
terms hereof does not and will not conflict with or constitute a breach of or default under (i) the constating documents of the McEwen
Copper Companies, (ii) any Applicable Laws, order or ruling or (iii) any agreement, contract or indenture, including any covenants
or provisions respecting the Company’s right to issue additional equity, or any pre-emptive right or similar rights therein, to
which any of the McEwen Copper Companies (as defined below) is a party or by which it is bound, or to which any of the property or assets
of the McEwen Copper Companies is subject; |
| (i) | Exhibit “A” accurately shows (i) each direct and indirect subsidiary of the Company;
(ii) the registered and beneficial holders of all of the issued and outstanding shares in the capital of each of the McEwen Copper
Companies; and (iii) the numbers and classes of shares currently held by each such holder and the percentage in the outstanding capital
of each of such subsidiaries. The Company has no assets other than the holding of the shares of each of the McEwen Copper Companies; |
| (j) | International Copper Mining Inc. has no assets other than the holding of the shares of each of Los Azules
Mining Inc. and San Juan Copper Inc., and neither of Los Azules Mining Inc. and San Juan Copper Inc. has assets other than shares of ACM;
and none of the Cayman Subsidiaries operated or engaged in, or operates or engages in, any business activities, operations or management
other than business activities, operations or management related to the Los Azules Project; |
| (k) | the Company has not operated or engaged in, and is not operating or engaged in, any business activities
or operations other than those related to the Los Azules Project and the Elder Creek Project; |
| (l) | except as publicly disclosed by the Issuer and/or MUX, none of the shareholders of the Company have any
agreements or side letters with the Company granting such shareholders any rights in respect of the Company, including the right to nominate
directors for appointment to the board of directors of the Company or any approval rights with respect to any transactions of the McEwen
Copper Companies (including, without limitation, granting of offtake, royalty, stream or similar rights with respect to the Los Azules
Project); |
| (m) | there are no circumstances, developments or events that would constitute or reasonably be expected to
constitute a Material Adverse Effect in respect of any of the McEwen Copper Companies; |
| (n) | other than as set out in the Vargas Opinion, there are no: (i) Claims pending or, to the knowledge
of the Company, threatened against any of the Company or the Material Subsidiaries before or by any governmental authority; and (ii) outstanding
judgments, orders, decrees, writs, injunctions, decisions, rulings or awards against any of the Company or the Material Subsidiaries or
affecting any of the Company, the Material Subsidiaries, the Los Azules Project or the Elder Creek Project; |
| (o) | a complete copy of the articles, bylaws, minute books, share registers and other corporate records of
the Company and the Material Subsidiaries have been provided to the Purchaser. Such books and records have been maintained in accordance
with Applicable Laws and contain complete and accurate records of all matters required to be dealt with in such books and records, in
each case, in all material respects; |
| (p) | the Company directly or indirectly owns all of the issued and outstanding securities of the other McEwen
Copper Companies, free and clear of any encumbrances and defects, and has no other subsidiaries. All of the outstanding equity interests
in the McEwen Copper Companies have been duly authorized and validly issued and all of such equity interests are outstanding as fully
paid and non-assessable shares. There exist no options, warrants, purchase rights, or other contracts or commitments that would require
the Vendor, Company or any other person to sell, transfer or otherwise dispose of any equity interests of the other McEwen Copper Companies
or for the issue or allotment of any unissued shares in the capital of the other McEwen Copper Companies or any other security convertible
into or exchangeable for any such shares. Except as publicly disclosed by the Issuer and/or MUX, none of the McEwen Copper Companies has
any obligations (including any obligation to provide any guarantee, security, support, indemnification, assumption or endorsement of or
any similar commitment with respect to the obligations, liabilities or indebtedness of any other person) including, without limitation,
the obligations of MUX under the amended and restated credit agreement dated May 19, 2023 between MUX and Evanachan Limited as lender
and as Administrative Agent; |
| (q) | each of the McEwen Copper Companies has been duly incorporated or established and is validly existing
and in good standing under the laws of its respective jurisdiction of organization with all requisite corporate power and authority to
own, use, lease and operate its properties and conduct its business in the manner currently conducted, and is duly qualified to transact
business in each jurisdiction where it carries its business; |
| (r) | the McEwen Copper Companies (i) are conducting their business operations in material compliance with
Applicable Laws, including without limitation those of the country, state, province, municipality or other local or foreign jurisdiction
in which such entity carries on business or conducts its activities; (ii) have received and hold all material permits, by-laws, licenses,
waivers, exemptions, consents, certificates, registrations, rights, rights of way, entitlements and other approvals which are required
from any governmental or regulatory authority or any other person necessary to the conduct of their business and activities as currently
conducted, and to the conduct of their business as proposed to be conducted pursuant to the use of funds proposal underlying the proposed
placement, including but not limited to those required under applicable mining and environmental laws (“Authorizations”);
and (iii) are in material compliance with all terms and conditions of such Authorizations, and such Authorizations are in full force
and effect in all material respects; and (iv) have not received any notice of the modification, suspension, revocation, cancellation
or non-renewal of, or any intention to modify, suspend, revoke, cancel or not renew or any proceeding relating to the modification, suspension,
revocation, cancellation or non-renewal of any such Authorizations, and no Authorizations will be subject to modification, suspension,
revocation, cancellation or non-renewal as a result of the execution and delivery of this Agreement or the Closing; |
| (s) | except to the extent qualified by the Vargas Opinion, which Purchaser acknowledges having received, the
McEwen Copper Companies (i) own, hold or lease all such properties as are necessary to the conduct of their respective businesses
as currently operated, and to the conduct of their business as proposed to be conducted pursuant to the use of funds proposal underlying
the proposed placement; and (ii) have good and marketable title under Applicable Laws to all real property and good and marketable
title to all personal property owned by them that constitute the Los Azules Project and the Elder Creek Project and to all material personal
property owned by them in the conduct of their business on the Los Azules Project and the Elder Creek Project, in each case free and clear
of all liens, encumbrances and defects; and any real property and buildings to be held under lease or sublease by the McEwen Copper Companies
are held by them under valid, subsisting and enforceable leases; (A) the “Los Azules Project” means the Los Azules
project owned by ACM and located in the San Juan Province, Argentina, which involves exploration, development and other operations on
the mineral properties, claims and any other mineral rights in the area set out in the map in Exhibit “B” hereto, and
which includes the project described in the technical report entitled “SEC S-K 229.1304 Initial Assessment Individual Disclosure
for the Los Azules Project, Argentina” with an effective reporting date of September 1, 2017 prepared by Mining Plus; and (B) the
“Elder Creek Project” means the project commonly known as the Elder Creek project, which is owned by NPGUS and located
near Elder Creek, Nevada, USA, which involves exploration, development and other operations on the mineral properties, claims and any
other mineral rights comprising such project; |
| (t) | except to the extent qualified by the opinion of Vargas Opinion, all interests in material mining claims,
concessions, exploration, reconnaissance, exploitation or extraction rights, surface rights, subsurface rights or similar rights, (“Mining
Claims”) that are held by the McEwen Copper Companies, held by way of Authorizations or otherwise, are in good standing, are
valid and enforceable, are free and clear of any encumbrances and no royalty is payable in respect of any of them, except as disclosed
in the Vargas Opinion; |
| (u) | no other material property rights are necessary for the conduct of the business as currently conducted,
or for the conduct of the business as proposed to be conducted pursuant to the use of funds proposal underlying the proposed placement,
in each case by the McEwen Copper Companies; |
| (v) | except as provided in the Vargas Opinion, there are no material restrictions on the ability of the McEwen
Copper Companies to use, transfer or otherwise exploit any such property rights; |
| (w) | except as provided in the Vargas Opinion, there are no Claims to which any of the McEwen Copper Companies
is a party or of which any property, including Authorizations and Mining Claims, of any of the McEwen Copper Companies is the subject;
and, no such proceedings are threatened or pending by governmental authorities or any other person; there is no agreement, judgment, injunction,
order or decree binding upon the any of the McEwen Copper Companies that has or would reasonably be expected to have the effect of prohibiting,
restricting or materially impairing any business practice of any of the McEwen Copper Companies; |
| (x) | no dispute between any of the McEwen Copper Companies and any local, native or indigenous group exists
or to the knowledge of the Company is threatened or reasonably likely with respect to the Los Azules Project and the Elder Creek Project
or the business activities of any of the McEwen Copper Companies; |
| (y) | the Company’s draft unaudited financial statements for the periods ending December 31, 2021
and December 31, 2022, copies of which the Company has provided to the Purchaser, have been prepared in accordance with IFRS and
present fairly the consolidated financial position and results of operation and changes in the financial position of the Company and its
Material Subsidiaries and such accounts fairly present in all material respects the financial condition, financial performance and cash
flows of the Company for the periods ended December 31, 2021 and December 31, 2022; neither the Company nor the Material Subsidiaries
have any material liabilities, obligations, indebtedness or commitments, whether accrued, absolute, contingent or otherwise required to
be disclosed under IFRS, which are not disclosed in the Company’s financial statements, and the Company and the Material Subsidiaries
have conducted their respective businesses in the ordinary course since December 31, 2022 until the Closing Date; |
| (z) | the audited consolidated financial statements for ACM for the period ending December 31, 2022,
a copy of which has been provided to the Purchaser, are prepared in accordance with Argentine GAAP and present fairly the consolidated
financial position and results of operation and changes in the financial position of ACM and its subsidiaries and such accounts fairly
present in all material respects the financial condition, financial performance and cash flows of ACM for the periods indicated; as at
the Closing Date, neither ACM nor its subsidiaries have any material liabilities, obligations, indebtedness or commitments, whether accrued,
absolute, contingent or otherwise required to be disclosed under Argentine GAAP, which are not disclosed in ACM’s financial
statements and each of ACM and its subsidiaries have conducted their respective businesses in the ordinary course since December 31,
2022 until the Closing Date; |
| (aa) | the McEwen Copper Companies have filed all Tax Returns required to be filed under Applicable Laws when
due and all such Tax Returns were correct and complete in all respects; |
| (bb) | any deductions taken or claimed in computing the income of any of McEwen Copper Companies for Tax purposes
have been taken or claimed in accordance with Applicable Law; |
| (cc) | there are no Encumbrances on any of the assets of the McEwen Copper Companies that arose in connection
with any failure (or any alleged failure) to pay any Tax when due; |
| (dd) | all Taxes required to be paid under Applicable Laws have been paid by each of the McEwen Copper Companies
or an adequate reserve under IFRS has been recorded in respect thereof in the accounting records of the McEwen Copper Companies, and each
of the McEwen Copper Companies has made adequate and timely installments of all Taxes required to be made by it under Applicable Laws.
None of the McEwen Copper Companies has incurred any liability, whether actual or contingent, for Taxes or engaged in any transaction
or event that would result in any liability, whether actual or contingent, for Taxes or realized any income or gain for Tax purposes otherwise
than in the usual and ordinary course of its business; |
| (ee) | there are no notices of assessment or reassessment of, or notices of audits, investigations or Claims
with respect to, unpaid liabilities for Taxes issued by any Tax Authority which have been received by any of the McEwen Copper Companies.
There are no assessments, proceedings, investigations, audits or Claims now pending or, to the knowledge of the Company, threatened against
any of the McEwen Copper Companies in respect of any Taxes and there are no matters under discussion, investigation, audit or appeal with
any Tax Authority in respect of any of the McEwen Copper Companies. The Company is not aware of any contingent liability of any of the
McEwen Copper Companies for Taxes or any grounds that could prompt an assessment or reassessment for Taxes; |
| (ff) | each of the McEwen Copper Companies has deducted, withheld, collected and remitted within the time limits
required by Applicable Laws all amounts required by Applicable Laws to have been deducted, withheld, collected and remitted in connection
with amounts paid or owing to any employee, independent contractor, creditor, shareholder or other third party; |
| (gg) | none of the McEwen Copper Companies are party to any agreement, waiver or arrangement with any Tax Authority
that relates to any extension of time with respect to the filing of any Tax Return, any payment of Taxes or any assessment; |
| (hh) | no facts, circumstances or events exist or have existed that have resulted in, or may result in, the application
of any of sections 15, 17, 67, 78 to 80.04 of the Tax Act (or any similar provision of an Applicable Law of any province or territory
of Canada) to any of the McEwen Copper Companies; |
| (ii) | none of the McEwen Copper Companies are subject to liability for Taxes of any other person. None of the
McEwen Copper Companies have acquired property from any person in circumstances where any such company could become liable for Taxes of
such person. None of the McEwen Copper Companies have entered into any agreement with, or provided any undertaking to, any person pursuant
to which it has assumed liability for the payment of income Taxes owing by such person; |
| (jj) | none of the McEwen Copper Companies has ever been required to file any Tax Return with, and has never
been liable to pay any Taxes to, any Tax Authority in any jurisdiction in which it is not currently filing any Tax Returns. No Claim has
ever been made by a Tax Authority in a jurisdiction where any of the McEwen Copper Companies does not file Tax Returns that the McEwen
Copper Companies is or may be subject to the imposition of any Tax by that jurisdiction; |
| (kk) | any of the McEwen Copper Companies that are required to be registered (i) with the Canada Revenue
Agency under Subdivision d of Division V of Part IX of the Excise Tax Act (Canada) for the purposes of goods and services
sales tax and the harmonized sales tax (“GST/HST”), or (ii) under any Applicable Law of a province in respect
of sales tax are so registered, and any such registration numbers have been provided to the Purchaser. Any input tax credits, rebates
and similar refunds claimed by the McEwen Copper Companies for GST/HST or provincial sales tax purposes were calculated in accordance
with Applicable Laws; |
| (ll) | the McEwen Copper Companies have complied with all information reporting and record keeping requirements
under Applicable Laws, including retention and maintenance of required records with respect thereto; |
| (mm) | none of the McEwen Copper Companies have owned any (i) real or immovable property situated in Canada
(as defined in the Tax Act), (ii) Canadian resource properties (as defined in the Tax Act), (iii) timber resource properties
(as defined in the Tax Act), or (iv) options in respect or, or interests in, or for civil law, a right in, property described in
any of (i) to (iii), whether or not the property exists; |
| (nn) | none of the McEwen Copper Companies have engaged in any “reportable transaction” as defined
in subsection 237.3(1) of the Tax Act or any “notifiable transaction” as defined in proposed subsection 237.4(1) of
the Tax Act (as such provisions are proposed to be amended or introduced), as applicable, by the legislative proposals released by the
Minister of Finance (Canada) on August 9, 2022; |
| (oo) | all transactions entered into by the McEwen Copper Companies have been entered into on an arm’s
length basis and the consideration (if any) charged, received or paid by the McEwen Copper Companies, as the case may be, on all transactions
entered into by it has been equal to the consideration which might have been expected to be charged, received or paid, as applicable,
been independent persons dealing at arm’s length and no notice or inquiry by any Tax Authority has been made in connection with
any such transactions. The McEwen Copper Companies have complied in all material respects with relevant transfer pricing laws (including
section 247 of the Tax Act), including preparing contemporaneous documentation and other documents contemplated thereby; |
| (pp) | none of the McEwen Copper Companies have applied for, filed for, or otherwise claimed any COVID-19 Relief; |
| (qq) | none of the McEwen Copper Companies will be required to include any item of income in, or exclude any
item or deduction from, taxable income for any taxation year or portion thereof ending after the Closing Date as a result of the use of
an improper method of accounting for a taxation year ending before the Closing Date; |
| (rr) | none of the McEwen Copper Companies are insolvent or in liquidation or administration or subject to any
other insolvency procedure and no receiver, manager, trustee, custodian or analogous officer has been appointed in respect of all or any
part of its property, undertaking or assets; neither steps have been taken nor legal, legislative or administrative proceedings have been
started or threatened to wind up, dissolve, make dormant, or eliminate any of McEwen Copper Companies; and the Company does not have any
knowledge of any event or circumstance that could reasonably be expected to lead to or result in the winding up, liquidation, dissolution,
elimination or insolvency of any of the McEwen Copper Companies; |
| (ss) | none of the McEwen Copper Companies and, to the Company’s knowledge, none of their respective directors,
officers, supervisors, managers, employees, or agents has: (A) violated any Applicable Laws relating to anti-bribery and anti-corruption,
including the Corruption of Foreign Public Officials Act (Canada), the Criminal Code (Canada), Foreign Corrupt Practices
Act of 1977 (United States) or any other applicable anti-corruption laws of any relevant jurisdiction (“Anti-Corruption Laws”)
or Applicable Laws relating to export control, or economic and financial sanctions laws (“Sanctions Laws”), (B) made,
given, authorized, made, or offered anything of value, including any payment, facilitation payment, loan, reward, gift, contribution,
expenditure or other advantage, directly or indirectly, (i) to any person in violation of the Anti-Corruption Laws, or (ii) to
or for the benefit of a government official in order to improperly influence any act or decision of a government official, induce a government
official to do or omit to do any act in violation of their lawful duty or secure any improper advantage, or (C) used any corporate
funds, or made any direct or indirect unlawful payment from corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; |
| (tt) | the operations of the McEwen Copper Companies are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the money laundering statutes of all applicable jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental
authority (“Money Laundering Laws”) and no action, suit or proceeding by or before any court of governmental authority
or any arbitrator nongovernmental authority involving any of the McEwen Copper Companies with respect to the Money Laundering Laws is
pending or, to the knowledge of the Company, threatened; |
| (uu) | none of the McEwen Copper Companies nor any of their respective directors, officers, supervisors, managers,
employees, or agents is (i) a person currently identified, listed or designated under the Sanctions Laws, (ii) a person located,
organized, resident, doing business or operating in a country or territory that is, or whose government is, the subject of Sanctions Laws
which prohibit a person resident in, or a national of, Canada, the United States, the United Kingdom, or the European Union from doing
business with or in that jurisdiction, or (iii) a person directly or indirectly owned or controlled by, or acting for the benefit
or on behalf of, a person described in clause (i) or (ii) (a “Sanctioned Person”). None of the McEwen Copper
Companies (i) has assets or operations located in a jurisdiction in violation of Sanctions Laws, or (ii) directly or indirectly
derives revenues from or engages in investments, dealings, activities or transactions with any Sanctioned Person or which otherwise violate
Sanctions Laws; |
| (vv) | the data or information with respect to the business and activities of the McEwen Copper Companies disclosed
on the EDGAR system by Vendor is complete and correct in all material respects and does not contain any untrue statement of material fact
or omit to state a material fact necessary in order to make the statement contained therein not misleading in the circumstances; and |
| (ww) | the data or information made available to Purchaser by or on behalf of Vendor or the Company: (i) does
not, when taken as a whole, create a false impression of the development and operations of the Los Azules Project and the Elder Creek
Project as at the date of this Agreement, (ii) was, to the knowledge of the Company at the time when such data or information was created
by or for the Company, accurate in all material respects, and (iii) was prepared in good faith for the purposes of informing the
Purchaser about the business and activities of the McEwen Copper Companies and in doing so, the Company has not: |
| (iv) | omitted anything that the Company, acting reasonably, considers is material from such data or information;
or |
| (v) | included anything that the Company, acting reasonably, considers is materially misleading in such data
or information. |
Article 5
Indemnification
| 5.1 | Indemnification by the McEwen Indemnifying Parties |
Subject
to the terms of this Article 5, Vendor and the Company (together, the “McEwen Indemnifying Parties”, and each
a “McEwen Indemnifying Party”) shall jointly and severally indemnify and hold harmless Purchaser and its officers,
directors, employees and other representatives (collectively, the “Purchaser Indemnified Parties”) from and against
any and all Claims asserted against any of them, or any Losses incurred or suffered by any of them, or any Losses of the Company which
result in a decrease in the value of the Common Shares held by Purchaser, and directly or indirectly arising from or in connection with:
| (a) | any breach or inaccuracy of any representation or warranty made by the McEwen Parties in Sections 4.1
or 4.3; |
| (b) | any breach or inaccuracy of any representation or warranty made by the Company in the Subscription Agreement;
and |
| (c) | any failure of any of the McEwen Parties to perform or observe any covenant or agreement to be performed
or observed by any of them under this Agreement. |
If any of the McEwen Indemnifying Parties indemnifies
the Purchaser Indemnified Parties pursuant to this Agreement, or the Company indemnifies the Purchaser Indemnified Parties pursuant to
the Subscription Agreement, in respect of any matter, the McEwen Indemnifying Parties shall not subsequently be liable to indemnify the
other Purchaser Indemnified Parties for the same matter, to the extent that doing so would result in a duplicate recovery.
| 5.2 | Indemnification by Purchaser |
Subject
to Section 5.3 below, Purchaser shall indemnify and hold harmless the McEwen Parties and their respective officers, directors,
employees and other representatives (collectively, the “McEwen Indemnified Parties”) for, and will pay the amount of,
any Losses incurred by them and arising from or in connection with any breach of:
| (a) | any representation or warranty made by Purchaser in Sections 4.1 or 4.2; and |
| (b) | any failure of Purchaser to perform or observe any covenant or agreement to be performed or observed by
it under this Agreement. |
If
Purchaser indemnifies the McEwen Indemnified Parties pursuant to this Agreement in respect of any matter, Purchaser shall not subsequently
be liable to indemnify the other McEwen Indemnified Parties for the same matter, to the extent that doing so would result in a duplicate
recovery.
| 5.3 | Limitation of Liability for Indemnities |
| (a) | Except in the case of fraud, neither a McEwen Indemnifying Party nor Purchaser, as the case may be, as
indemnifying Parties hereunder (each an “Indemnifying Party”), shall be liable to the Purchaser Indemnified Parties
or the McEwen Indemnified Parties, as the case may be (each, an “Indemnified Party”), for any Losses with respect the
matters contained in Section 5.1(a), or Section 5.2(a), as applicable, unless and until the aggregate Losses for which the applicable
Indemnifying Party would be otherwise be liable is greater than $50,000 (the “Basket”), after which the applicable
Indemnifying Party shall be liable for all Losses (including the Basket). |
| (b) | Except in the case of fraud, an Indemnifying Party shall not be liable to the applicable Indemnified Party
for any Losses with respect to the matters contained in Section 5.1(a) or 5.2(a), as applicable, except to the extent such individual
Loss (or series of related Losses arising from a common set of facts) exceeds $10,000 (a “Minimum Claim Amount”), and
any such individual Losses (or series of related Losses arising from a common set of facts) not in excess of the Minimum Claim Amount
will not be aggregated for purposes of calculating the Basket in Section 5.3(a), provided, however, that any Losses arising out of
multiple breaches of a single representation and warranty which breaches are of the same, or substantially the same, character shall be
aggregated and, if and when such Losses exceeds the Minimum Claim Amount in the aggregate, and any further Losses arising out of a breach
of such representation and warranty which are of the same, or substantially the same, character as such earlier Losses, shall not be subject
to the limitation in this Section 5.3(b). |
The right to indemnity for
breaches or inaccuracies of representations and warranties under this Article 5 shall not terminate:
| (a) | with respect to the representations and warranties in Section 4.1 at any time after Closing; |
| (b) | with respect to the representations and warranties in Section 4.2 until the second anniversary of
the Closing Date; |
| (c) | with respect to the representations and warranties in Sections 4.3(aa) to 4.3(qq) until the date that
is 90 days after the expiration of the applicable statute of limitations relating thereto; and |
| (d) | with respect to all other representations and warranties in Section 4.3, and the representations
and warranties under the Subscription Agreement, until the third anniversary of the Closing Date, |
provided, further, that notwithstanding any termination
of the underlying representation or warranty in accordance with this Section 5.4, with respect to any pending Claim for indemnity
hereunder which shall have been made prior to the applicable termination date, the right to indemnity shall not terminate until the final
determination and satisfaction of such Claim.
| 5.5 | Indirect and Consequential Damages |
Except in the case of fraud,
no Party shall be liable to any other Party, nor any successor in interest or beneficiary or assignee of this Agreement, for any consequential,
incidental, indirect, special or punitive damages arising out of this Agreement or any breach thereof (it being understood that amounts
owing or alleged to be owing by a Person to a Third Party on account of Claims by Third Parties constitute actual damages to that Person
regardless of whether the Third Party’s Claim for that amount includes consequential, incidental, indirect, special or punitive
damages); provided that consequential, incidental, indirect, special or punitive damages shall not include direct financial loss suffered
by a Party or an Indemnified Party, including diminution of value and loss of profits, and direct financial loss and loss of profits shall
be recoverable except where restricted by principles of remoteness under Applicable Law. In the case of fraud, the limitations on indemnification
(including as to duration and amount) set forth in Sections 5.3 and 5.4 shall not apply to any claim for indemnification pursuant to this
Article 5.
| 5.6 | Third Party Claim Indemnity Procedures |
| (a) | In the event that any written Claim for which an Indemnifying Party may have liability to any Indemnified
Party hereunder is asserted against or sought to be collected from any Indemnified Party by a Third Party (a “Third Party Claim”),
such Indemnified Party shall promptly, but in no event more than ten (10) Business Days following such Indemnified Party’s
receipt of a Third Party Claim, notify the Indemnifying Parties in writing of such Third Party Claim, the amount or the estimated amount
of damages sought thereunder to the extent then reasonably ascertainable (which estimate shall not be conclusive of the final amount of
such Third Party Claim), any other remedy sought thereunder, any relevant time constraints relating thereto and, to the extent practicable,
any other material details pertaining thereto (a “Claim Notice”). However, the failure to give prompt notice will not
affect the rights or obligations of the Indemnifying Party except and only to the extent that, as a result of such failure, the Indemnifying
Party was prejudiced by such failure. The Indemnifying Party shall have ten (10) Business Days (or such lesser number of days set
forth in the Claim Notice as may be required by court proceedings in the event of a litigated matter) after receipt of the Claim Notice
(the “Notice Period”) to notify the Indemnified Party that it desires to defend the Indemnified Party against such
Third Party Claim, and if such notification is not provided, it shall be deemed to have elected not to defend the Indemnified Party in
respect of the Third Party Claim. |
| (b) | In the event that the Indemnifying Party notifies the Indemnified Party within the Notice Period that
it desires to defend the Indemnified Party against a Third Party Claim, the Indemnifying Party shall have the right to defend the Indemnified
Party by appropriate proceedings and shall have the power to direct and control such defence at its expense; provided that the Indemnified
Party will have the right to approve defence counsel, which approval will not be unreasonably withheld. Once the Indemnifying Party has
duly assumed the defence of a Third Party Claim, the Indemnified Party shall have the right, but not the obligation, to participate in
any such defence and to employ a single separate counsel of its choosing for this purpose; provided that the cost of such counsel shall
be at its expense, unless the Indemnified Party shall have reasonably concluded, based on the advice of outside counsel, that representation
of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them, in which case
the Indemnified Party may participate in such defence and employ separate counsel at the Indemnifying Party’s expense; and provided
further that provided that the power to control an direct such defence shall remain with the Indemnifying Party. The Indemnifying Party
shall not, without the prior written consent of the Indemnified Party, settle, compromise or offer to settle or compromise any Third Party
Claim if such settlement (i) does not include an unconditional written release by the claimant or plaintiff of the Indemnified Party
from all liability in respect of such Third Party Claim or (ii) would result in (A) the imposition of a consent order, injunction
or decree that would restrict the future activity or conduct of the Indemnified Party or any Person related thereto; or (B) a finding
or admission of a violation of Applicable Law, wrongdoing or violation of the rights of any Person by the Indemnified Party or any Person
related thereto. |
| (c) | In the event that the Indemnified Party shall in good faith determine (i) that the conduct of the
defense of any action, proceeding or claim subject to indemnification hereunder or any proposed settlement of any such action, proceeding
or claim by the Indemnifying Party could reasonably be expected to (A) affect adversely the Indemnified Party’s tax liability
or the ability of any Affiliate of the Indemnified Party who is a party to this Agreement to conduct its business or (B) be inconsistent
with the position of the Indemnified Party with respect to its taxation status in any jurisdiction (including without limitation whether
it should file any tax return), or (ii) that the Indemnified Party may have available to it one or more defenses or counterclaims
that are in addition to, or inconsistent with, one or more of those that may be available to the Indemnifying Party in respect of such
action, proceeding or claim or any litigation relating thereto, the Indemnified Party shall have the right at all times to take over and
assume control over the defense, settlement, negotiations or litigation relating to any such action, proceeding or claim at the sole cost
of the Indemnifying Party, provided, that, the Indemnified Party shall not settle any such action, proceeding or claim without the written
consent of the Indemnifying Party. |
| (d) | If the Indemnifying Party elects not to, or is deemed to elect not to, defend the Indemnified Party against
a Third Party Claim, whether by not giving the Indemnified Party timely notice of its desire to so defend or otherwise, the Indemnified
Party shall have the right, but not the obligation, to assume its own defence, it being understood that the Indemnified Party’s
right to indemnification for a Third Party Claim shall not be adversely affected by assuming the defence of such Third Party Claim. The
Indemnified Party (i) may defend such Third Party Claim and (ii) may not enter into a settlement thereof without obtaining approval
of the Indemnifying Party (which approval shall not be unreasonably withheld, delayed or conditioned) unless the Indemnified Party will
not be seeking indemnification from the Indemnifying Party for any amounts paid pursuant to such settlement thereof or for any other consequences
of such Third Party Claim. |
| (e) | The Indemnified Party and the Indemnifying Party shall cooperate in order to ensure the proper and adequate
defence of a Third Party Claim, including by providing access to each other’s relevant business records and other documents and
employees. Further, the applicable Party conducting the defence of a Third Party Claim shall keep the other Party apprised of material
developments from time to time. |
| (f) | The Indemnified Party and the Indemnifying Party shall use commercially reasonable efforts to avoid production
of confidential information (consistent with Applicable Law) and to cause all communications among employees, counsel and others representing
any party to a Third Party Claim to be made so as to preserve any applicable solicitor-client or litigation privileges. For the avoidance
of doubt, nothing in this Section shall be construed as a waiver by an Indemnified Party or an Indemnifying Party of any privilege,
including any privilege associated with separate counsel as described herein. |
| 5.7 | Adjustment to Purchase Price |
| (a) | All amounts payable by the McEwen Parties to the Purchaser Indemnified Parties pursuant to Section 5.1
will be deemed to be a decrease to the Purchase Price. All amounts payable by Purchaser to the McEwen Indemnified Parties pursuant to
Section 5.2 will be deemed to be an increase to the Purchase Price. |
Article 6
GENERAL
| (a) | All notices and other required or permitted communications (each a “Notice”) to
the Parties shall be in writing, and shall be addressed respectively as follows: |
If to a McEwen
Party:
McEwen Mining
Inc.
S. 2800, 150 King
Street West
Toronto, ON
M5H 1J9
Attention: General
Counsel
Email: notice@mcewenmining.com
If to Purchaser:
Nuton LLC
4700 Daybreak
Parkway,
South Jordan,
Utah 84009,
United States
Attention: Adam
Burley; Melanie Grayson
Email:
adam.burley@riotinto.com; melanie.grayson@riotinto.com
With a copy (which
shall not constitute notice) to:
McCarthy Tétrault
LLP
Suite 5300,
66 Wellington Suite West
Toronto, ON M5K
1E6
Canada
Attention: Shea
Small
Email: ssmall@mccarthy.ca
| (b) | All Notices shall be given: |
| (ii) | by electronic communication, capable of producing a printed transmission; |
| (iii) | by registered or certified mail, return receipt requested; or |
| (iv) | by overnight or other express courier service. |
| (c) | All Notices shall be effective and shall be deemed given on the date of receipt at the principal address
if received during normal business hours on a Business Day in the jurisdiction of the recipient, and, if not received during normal business
hours, on the next Business Day in the jurisdiction of the recipient following receipt, or if by electronic communication, on the date
of such communication if received by the recipient during normal business hours on a Business Day in the jurisdiction of the recipient,
and, if not received during normal business hours, on the next Business Day in the jurisdiction of the recipient following receipt. Any
change of address may be made by Notice to the other Parties. |
This Agreement may only be
amended by the written agreement of all the Parties hereto or, as applicable, their successors and permitted assigns.
A Party shall not issue any
press release or make any other public statement or disclosure with respect to this Agreement without the consent of the other Parties
(which consent shall not be unreasonably withheld, conditioned or delayed); provided, however, that the foregoing shall be subject to
each Party’s overriding obligation to make any disclosure or filing in accordance with Applicable Laws, including applicable securities
laws, and if, in its reasonable opinion, such disclosure or filing is required and the other Party has not reviewed or commented on the
disclosure or filing, the Party shall use its reasonable best efforts to give the other Party prior oral or written notice and a reasonable
opportunity to review or comment on the disclosure or filing (other than with respect to confidential information contained in such disclosure
or filing). The Party making such disclosure shall give reasonable consideration to any comments made by the other Party or its counsel,
and if such prior notice is not possible, shall give such notice immediately following the making of such disclosure or filing.
No Party may assign or transfer
any right, benefit, interest or obligation in or under this Agreement without the prior express written consent of the other Parties,
which consent may not be unreasonably withheld; provided that in the case of any assignment or transfer, the assigning or transferring
Party shall remain liable for all of its obligations hereunder, including indemnity obligations.
This
Agreement and all matters related hereto or arising herefrom are governed by the laws of the Province of Ontario and the federal
laws of Canada applicable therein. Each of the Parties irrevocably attorns to the exclusive jurisdiction of the courts of the Province
of Ontario in all matters related to, or arising from, this Agreement.
| (a) | No failure on the part of a Party to exercise, no delay in exercising, and no course of dealing with respect
to, any right, power or privilege established by this Agreement shall operate as a waiver thereof. |
| (b) | Except as otherwise expressly provided for herein, no waiver of any provision of this Agreement or consent
to any departure by any Party from any provision of this Agreement shall be effective unless it is confirmed in writing. The waiver or
consent shall be effective only in the specific instance, for the specific purpose and for the specific length of time for which it is
given. |
| (c) | The single or partial exercise of any right, power or privilege established by this Agreement shall not
preclude any other exercise thereof. |
Each of the provisions contained
in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof
by a court of competent jurisdiction in any jurisdiction shall not affect the validity or enforceability of that provision in any other
jurisdiction, or affect the validity or enforceability of any other provision hereof. To the extent permitted by Applicable Laws, the
parties waive any provision of law which renders any provision of this Agreement invalid or unenforceable in any respect. The Parties
shall engage in good faith negotiations to replace any provision which is declared invalid or unenforceable with a valid and enforceable
provision, the economic effect of which comes as close as possible to that of the invalid or unenforceable provision which it replaces.
| 6.8 | Benefit of the Agreement |
This
Agreement shall enure to the benefit of and be binding upon the Parties hereto and their respective successors and permitted assigns,
provided that any transfer of or any Encumbrance upon any rights under this Agreement not made in accordance with this Agreement shall
be null and void and of no force or effect.
Except
as expressly provided in this Agreement, nothing herein expressed or implied is intended or shall be construed to confer upon or
to give any Person not a Party hereto any rights to remedies under or by reason of this Agreement.
This Agreement and the other
Transaction Documents constitute the entire agreement between the Parties and supersede all prior agreements, understandings, negotiations
and discussions, whether oral or written, of the Parties and their respective affiliates, as applicable, related to such matters.
Each of the Parties shall
promptly do, make, execute or deliver, or cause to be done, made, executed or delivered, all such further acts, documents and things as
any other Party hereto may reasonably require from time to time in order to give full effect to the provisions of this Agreement and shall
use reasonable efforts and take all such steps as may be reasonably within its power to implement to their full extent the provisions
of this Agreement.
Time is of the essence of
this Agreement.
| 6.13 | Counterparts and Electronic Execution |
This
Agreement may be executed in any number of counterparts, and it shall not be necessary that the signatures of all Parties be contained
on any counterpart. Each counterpart shall be deemed an original, but all counterparts together shall constitute one and the same
instrument. Counterparts may be delivered by electronic transmission and the Parties adopt any signatures so received as original signatures
of the Parties.
[Rest of this page intentionally
left in blank]
IN WITNESS WHEREOF the Parties hereto have duly
executed this Agreement as of the date and year first above written.
|
McEwen Copper Inc. |
|
|
|
|
|
Per: |
/s/ Robert R. McEwen |
|
|
Name: |
Robert R. McEwen |
|
|
Title: |
Director and President |
|
|
|
|
|
McEwen Mining Inc. |
|
|
|
|
|
Per: |
/s/ Robert R. McEwen |
|
|
Name: |
Robert R. McEwen |
|
|
Title: |
Chief Executive Officer |
|
|
|
|
|
MINERA ANDES INC. |
|
|
|
|
|
Per: |
/s/ Robert R. McEwen |
|
|
Name: |
Robert R. McEwen |
|
|
Title: |
Director and President |
|
|
|
|
|
NUTON LLC |
|
|
|
|
|
Per: |
/s/ Adam Burley |
|
|
Name: |
Adam Burley |
|
|
Title: |
CEO & President |
EXHIBIT A
Material Subsidiaries
McEwen Copper Shareholders | |
Number of
Shares | | |
Percentage of
Ownership | |
Minera Andes Inc. | |
| 15,000,000 | | |
| 48.7250284 | |
FCA Argentina (Stellantis) | |
| 6,000,000 | | |
| 19.4900113 | |
Nuton LLC | |
| 4,100,000 | | |
| 13.3181744 | |
Evanachan (Rob McEwen) | |
| 4,000,000 | | |
| 12.9933409 | |
Other Shareholders | |
| 1,685,000 | | |
| 5.47344486 | |
EXHIBIT B
Los Azules Project
List of Properties:
| |
Name | |
Docket Number |
1. | |
Azul 1 | |
520-0279-M98 |
2. | |
Azul 2 | |
520-0280-M98 |
3. | |
Mirta | |
1124.0141-M-09 |
4. | |
Escorpio II | |
0154-F28-C-96 |
5. | |
Azul 3 | |
1124.0121-A-06 |
6. | |
Azul Este | |
1124.186-A-07 |
7. | |
Azul Norte | |
1124.668-M-07 |
8. | |
Azul 4 | |
1124.473-M-08 |
9. | |
Escorpio I | |
1124.0153-C-1996 |
10. | |
Escorpio III | |
0155-C-96 |
11. | |
Escorpio IV | |
425.213-C-2003 |
12. | |
Totora | |
414.1324-C-05 |
13. | |
Totora II | |
520.0496-C-99 |
14. | |
Mercedes | |
0644-M-96 |
15. | |
Sofia | |
1124.167-A-10 |
16. | |
Azul 5 | |
1124.119-A-09 |
17. | |
Marcela | |
1124.495-A-09 |
18. | |
Agostina | |
1124.108-A-10 |
19. | |
Rosario | |
1124.169-A-10 |
20. | |
Gina | |
1124.168-A-10 |
21. | |
Cecilia | |
1124.035-A-12 |
22. | |
Grupo Minero | |
1124.553-A-2018 |
23. | |
Road easement for Mercedes mine | |
520-0439-97 |
24. | |
Southern Access Road Easement for Mercedes mine | |
520-0680-M-96 |
25. | |
Northern Access Road Easement for Azul 1 and Azul 2 mines | |
1124.218-A-2018 |
26. | |
Power Line Easement | |
1124-354-A-2018 |
27. | |
Camp Easement “Candadito” | |
1124.660-M-12 |
28. | |
Occupation Easement “Campo Illanes Mery” | |
1124.544-2022 |
29. | |
“Campo Estomonte” Easement | |
1124.231-A-2010 |
30. | |
“Cortez Monroy Ranch”, which is a real estate property of 18,000 hectares that ACM acquired from CCM S.A, by means of public deed dated March 3, 2010. The Cortez Monroy Ranch is located in Calingasta Department and would overlap with the following ACM Mines: “Escorpio IV”, “Mercedes”, “Azul 1”, “Mirta” and “Azul 2” and partially with the ACM Mines “Totora I”, “Totora II”, “Escorpio I”, “Escorpio II” “Azul Este” and “Azul Norte” | |
|
Maps:
Exhibit 99.2
Final
McEWEN COPPER INC.
(the “Issuer”)
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(COMMON SHARES)
INSTRUCTIONS TO SUBSCRIBER
| 1. | You must complete all the information in the
boxes on page ii and sign where indicated with an “X”. |
| 2. | You
must complete and sign Exhibit "A" - “U.S. Investor Questionnaire”
that starts on page A-1. The purpose of this form is to determine whether you meet the
standards for participation in a private placement under applicable U.S. securities laws.
In order for the Issuer to satisfy its obligations under applicable U.S. securities laws,
you may be required to provide additional evidence to verify the information you have provided
in Exhibit "A" - “U.S. Investor Questionnaire” that starts on
page A-1. |
| 3. | A completed and signed copy of the Subscription
Agreement must be delivered to: |
McEwen Copper Inc.
150 King Street West, S. 2800
Toronto, ON M5H 1J9
| Attention: | Carmen Diges |
| Email: | cdiges@mcewenmining.com |
| 4. | Payment
by wire transfer in the amount of the Subscription Amount to the following account: |
Wire Transfer
Instructions:
Beneficiary Information:
McEwen Copper Inc.
150 King Street West, Suite 2800, PO Box 24
Toronto, Ontario,
M5H 1J9
Banking Information:
Royal Bank of Canada
200 Bay Street, Toronto, Canada
SWIFT: ROYCCAT2
Intermediary Information:
JP Morgan Chase Bank
New York NY
ABA 021000021
SWIFT: CHASUS33
Account Details:
Account – 4065686
Bank – 0003
Branch - 00002
McEWEN COPPER INC.
PRIVATE
PLACEMENT SUBSCRIPTION AGREEMENT
The
undersigned (the “Subscriber”) hereby subscribes for the number of common shares in the capital of McEwen Copper
Inc. (the “Issuer”) set out below in accordance with the terms set out in the Investor Term Sheet attached as Exhibit “B”.
The Subscriber and the Issuer hereby agree to be bound by the terms and conditions set forth in the attached “Terms and Conditions
of Subscription for Common Shares” (the “Terms and Conditions”).
Subscriber
Information |
|
Common
Shares to be Issued to the Subscriber |
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Number
of Common Shares: 152,615 |
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(the
“Common Shares”) |
Nuton
LLC |
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(Name
of Subscriber) |
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Subscription
Amount: US$3,967,990 |
X |
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(the
“Subscription Amount”) |
(Signature
of Authorized Signatory – if the Subscriber is not an Individual) |
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Adam
Burley, CEO & President |
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If
the Subscriber is subscribing as an agent on behalf of a beneficial purchaser (check the appropriate box): |
(Name
and Title of Authorized Signatory – if the Subscriber is not an Individual) |
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4700
Daybreak Parkway, South Jordan, UT 84009 |
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|
¨ the
Subscriber is a trust company or trust corporation or a registered adviser acting on behalf of a fully managed account and deemed
under applicable securities laws to be purchasing as principal, or |
(Subscriber’s
Address, including postal or zip code) |
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|
|
+44-774-863-2596 |
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|
¨ the
following information is true and correct and, as applicable, Exhibit “A” hereto has been completed for each beneficial
purchaser: |
(Telephone
Number) |
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adam.burley@riotinto.com |
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|
(Email
Address) |
|
(Name
of Beneficial Purchaser) |
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(Address
of Beneficial Purchaser) |
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(Beneficial
Purchaser’s Telephone Number) |
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(Beneficial
Purchaser’s E-Mail Address) |
Register
the Common Shares as set forth below: |
|
Deliver
the Common Shares as set forth below: |
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|
Nuton
LLC |
|
|
Shea
Small |
|
(Name
to Appear on Share Certificate) |
|
(Attention
- Name) |
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(Account
Reference, if applicable) |
|
(Account
Reference, if applicable) |
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Suite 5300,
TD Bank Tower, 66 Wellington Street West, |
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Toronto ON M5K
1E6 |
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(Address,
including postal or zip code) |
|
(Street Address, including
postal or zip code – no PO Boxes permitted) |
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+1-647-283-8424 |
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(Telephone
Number) |
ACCEPTANCE
The Issuer hereby accepts the Subscription (as
defined herein) on the terms and conditions contained in this private placement subscription agreement (this “Agreement”)
as of the 18th day of October, 2023.
McEWEN
COPPER INC. |
|
|
|
|
Per: |
/s/
Robert R. McEwen |
|
|
Authorized
Signatory |
|
TERMS AND CONDITIONS OF
SUBSCRIPTION FOR COMMON SHARES
1.1 On
the basis of the representations and warranties, and subject to the terms and conditions, set forth in this Agreement, the Subscriber
hereby subscribes for the Common Shares for the Subscription Amount shown on page iii of this Agreement (such subscription of the
Common Shares being the “Subscription”) by way of a private placement offering (the “Offering”),
and the Issuer agrees to issue and deliver the Common Shares to the Subscriber, effective upon the Closing Date.
2.1 The
Subscription Amount must accompany this Subscription and be paid by wire transfer to the Issuer pursuant to the wire instructions provided
by the Issuer in the Instructions to Subscriber on page i. The Subscriber authorizes the Issuer to treat the Subscription Amount
as an interest free loan until the closing of the Offering (the “Closing”). The Closing shall take place concurrently
with the closing of the transactions described in the Share Purchase Agreement.
2.2 The
Subscriber acknowledges and agrees that this Agreement, the Subscription Amount and an other documents delivered in connection herewith
will be held by or on behalf of the Issuer. In the event that this Agreement is not accepted by the Issuer for whatever reason, which
the Issuer expressly reserves the right to do, the Issuer will return the Subscription Amount (without interest thereon) to the Subscriber
at the address of the Subscriber as set forth on page ii of this Agreement, or as otherwise directed by the Subscriber, in writing,
to the Issuer, prior to the return of the Subscription Amount by the Issuer.
| 3. | Documents
Required from Subscriber |
3.1 The
Subscriber must complete, sign and return to the Issuer the following documents:
| (b) | the
U.S. Investor Questionnaire (the “Questionnaire”) attached as Exhibit "A"
that starts on page A-1, along with any additional evidence that may be requested by
the Issuer to verify the information provided in the Questionnaire; and |
| (c) | such other supporting documentation that
the Issuer may request to establish the Subscriber’s eligibility to participate in
the Offering. |
The Subscriber acknowledges and agrees that the
Issuer will not consider the Subscription for acceptance unless the Subscriber has provided all of such documents to the Issuer.
3.2 As
soon as practicable upon any request by the Issuer, the Subscriber will complete, sign and return to the Issuer any additional
documents, questionnaires, notices and undertakings the Issuer may reasonably require or otherwise, may be required by any Governmental
Authority or Applicable Laws.
| 4. | CLOSING
DATE AND CONDITIONS TO CLOSING |
4.1 Subject
to the satisfaction of the conditions set forth below in Section 4.2, the date of the Closing (the “Closing Date”)
shall be no later than October 19, 2023, or such other date as may be determined by mutual agreement between the Issuer and the
Subscriber.
4.2 The
Subscription is subject to the following conditions for the benefit of the Subscriber (any of which may be waived by the Subscriber in
its sole discretion):
| (a) | the Issuer having obtained all necessary
approvals and consents for the Offering; |
| (b) | the
Issuer having obtained and provided to the Subscriber waivers for the purposes of the transactions
contemplated herein from the shareholders of the Issuer in respect of the pre-emptive rights
set out in the unanimous shareholder agreement of the Issuer dated August 20, 2021 (the
“Shareholder Agreement”), or the Issuer having provided notice
to the shareholders of the Issuer under the pre-emptive rights provisions of the Shareholder
Agreement and the relevant exercise period having expired, or the Issuer having provided
notice in writing to the Subscriber outlining in reasonable detail the extent to which the
shareholders of the Issuer have exercised such pre-emptive rights, as applicable; |
| (c) | the offer and sale of the Common Shares
being exempt from the registration requirements under the U.S. Securities Act of 1933, as
amended (the “1933 Act”), the laws of any U.S. state or other applicable
jurisdiction; |
| (d) | the Issuer having delivered to the Subscriber: |
| (i) | an
original share certificate representing the Common Shares (“Certificate”); |
| (ii) | the Share Purchase Agreement, substantially
in the form attached hereto as Exhibit “C”, duly executed by the Subscriber,
Minera Andes Inc. and the Issuer; |
| (iii) | the second amendment to the Nuton Collaboration
Agreement, substantially in the form attached hereto as Exhibit “D” (“Amendment
No.2 to the Nuton Collaboration Agreement”), duly executed by the Issuer, MUX and
Robert R. McEwen; |
| (iv) | a certificate of status for the Issuer
dated no earlier than one business day prior to the Closing Date; and |
| (v) | a certificate of an officer of the Issuer
certifying the articles and by-laws of the Issuer and the directors’ resolutions of
the Issuer approving the transactions contemplated by this Agreement; |
| (e) | the
Subscriber having received a legal opinion prepared by Vargas Galindez dated as of
the Closing Date (the “Vargas Opinion”), in form and substance satisfactory
to the Subscriber, acting reasonably; |
| (f) | the
Subscriber having received a legal opinion prepared by external counsel to the Cayman Subsidiaries
dated as of the Closing Date, in form and substance satisfactory to the Subscriber,
acting reasonably, with respect to each of the Cayman Subsidiaries’ organizational
status, good standing, share capitalization, no outstanding litigation and other matters
customary in transactions similar to the transactions contemplated by this Agreement; |
| (g) | the
issue and sale of the Common Shares being exempt from the requirement to file a prospectus
and the requirement to deliver an offering memorandum under applicable securities laws relating
to the sale of the Common Shares, or the Issuer having received such orders, consents or
approvals as may be required to permit such sale without the requirement to file a prospectus
or deliver an offering memorandum; and |
| (h) | all of the Conditions Precedent (as defined
in the Share Purchase Agreement) under the Share Purchase Agreement having been satisfied
or waived. |
| 5. | Acknowledgements
and Agreements of the Subscriber |
5.1 The
Subscriber acknowledges and agrees that:
| (a) | no offering memorandum, prospectus or
registration statement has been filed by the Issuer with any securities commission or any
other regulatory authority in connection with the issuance of the Common Shares; |
| (b) | the Subscriber has not received, nor has
the Subscriber requested nor had any need to receive, or been provided with a prospectus,
offering memorandum, registration statement or any document purporting to describe the business
and affairs of the Issuer which has been prepared for review by prospective purchasers to
assist in making an investment decision in respect of the Common Shares and that the Subscriber’s
decision, or, if applicable, the decision of others for whom the undersigned is contracting
hereunder, to enter into this Agreement and to subscribe for the Common Shares is based entirely
upon this Agreement and publicly available information concerning the Issuer and not upon
any other verbal or written representation as to fact or otherwise made by or on behalf of
the Issuer; |
| (c) | the Issuer’s constating documents
contain restrictions on the transfer of the Common Shares, which provide that no Common Shares
may be transferred without the prior approval of the board of directors of the Issuer; |
| (d) | the
Issuer is not a “reporting issuer” as that term is defined in applicable Canadian
securities laws, does not file periodic reports with the U.S. Securities and Exchange Commission,
nor will it become a reporting issuer in any jurisdiction in Canada or elsewhere upon completion
of the Offering and, as a result: |
| (i) | unless
the Issuer becomes a reporting issuer at a later date, the Issuer will not be subject to
the continuous disclosure requirements of any securities laws, including any requirement
relating to the production and filing of audited financial statements or other financial
information, and |
| (ii) | any
applicable hold periods under applicable securities laws may never expire, and the Common
Shares may be subject to restrictions on resale for an indefinite period of time; |
| (e) | the issuance of the Common Shares will
be made pursuant to exemptions from the registration and prospectus requirements of applicable
securities laws and therefore: |
| (i) | the Subscriber is restricted from using
those civil remedies which would otherwise be available to the Subscriber under applicable
securities laws but for the fact that such issuance is being made pursuant to such exemptions; |
| (ii) | the Subscriber may not receive information
about the Issuer that would otherwise be required to be provided to it under applicable securities
laws, |
| (iii) | the Issuer is relieved from certain obligations
that would otherwise apply under applicable securities laws, |
| (iv) | no
securities commission or similar regulatory authority has reviewed or passed on the merits
of the Common Shares, |
| (v) | there is no government or other insurance
covering the Common Shares, and |
| (vi) | there are risks associated with the purchase
of the Common Shares, including that the Subscriber may lose the Subscriber’s entire
investment; |
| (f) | an
investment in the Issuer is highly speculative and only investors who can afford the loss
of their entire investment should consider investing in the Issuer and the Common
Shares; |
| (g) | any
subscription monies paid by the Subscriber for the Common Shares is being raised as
“seed” or “risk” capital for the Issuer, which is in a speculative
stage, and there is no market for the Common Shares whatsoever; |
| (h) | none of the Common Shares have been or
will be registered under the 1933 Act, or under any securities or “blue sky”
laws of any state of the United States, and, unless so registered, may not be offered or
sold in the United States or, directly or indirectly, to any U.S. Person (as defined in Section 6.2)
except in accordance with the provisions of Regulation S under the 1933 Act (“Regulation
S”), pursuant to an effective registration statement under the 1933 Act, or pursuant
to an exemption from, or in a transaction not subject to, the registration requirements of
the 1933 Act, and in each case only in accordance with any other applicable federal, state,
provincial and foreign securities laws; |
| (i) | the Issuer has not undertaken, and will
have no obligation, to register any of the Common Shares under the 1933 Act or any other
securities laws; |
| (j) | the
Issuer will refuse to register the transfer of any of the Common Shares not made pursuant
to an effective registration statement under the 1933 Act or pursuant to an available exemption
from the registration requirements of the 1933 Act, and in each case will only register such
transfer in accordance with Applicable Laws; |
| (k) | it
will hold harmless the Issuer from any loss or damage it may suffer as a result of the Subscriber’s
failure to correctly complete this Agreement or the Questionnaire; |
| (l) | it
and its advisor(s) have had a reasonable opportunity to ask questions of, and receive
answers from, the Issuer in connection with the distribution of the Common Shares hereunder,
and to obtain additional information to the extent possessed or obtainable by the Issuer
without unreasonable effort or expense; |
| (m) | the
books and records of the Issuer were available upon reasonable notice for inspection, subject
to certain confidentiality restrictions, by the Subscriber during reasonable business hours
at the Issuer’s principal place of business, and all documents, records and books in
connection with the distribution of the Common Shares hereunder have been made available
by the Issuer for inspection by the Subscriber, its legal counsel and/or its advisor(s),
if requested by the Subscriber; |
| (n) | any
resale, assignment, transfer, hypothecation or pledge of any of the Common Shares by the
Subscriber will be subject to: (i) resale restrictions contained in the securities laws
applicable to the Issuer, the Subscriber and any proposed transferee; and (ii) the Issuer’s
constating documents and it is the responsibility of the Subscriber to find out what those
restrictions are and to comply with such restrictions before selling any of the Common Shares; |
| (o) | it
consents to the placement of a legend or legends on the Certificate and any other document
evidencing any of the Common Shares setting forth the restrictions on transferability and
sale thereof contained in this Agreement, including the following: |
“THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER CONTAINED IN THE CONSTATING DOCUMENTS OR UNANIMOUS SHAREHOLDER AGREEMENT OF
THE COMPANY.
UNLESS PERMITTED UNDER SECURITIES LEGISLATION,
THE HOLDER OF THE SECURITIES REPRESENTED HEREBY MUST NOT TRADE THE SECURITIES BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE
LATER OF (I) [CLOSING DATE] AND (II) THE DATE THAT THE COMPANY BECOMES A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY
IN CANADA.
THE SHARES THAT ARE REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED
OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR THE COMPANY RECEIVES
AN OPINION OF COUNSEL FOR THE COMPANY THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE.”;
| (p) | it has been advised to consult its own
legal, tax and other advisors with respect to the Offering and the risks of an investment
in the Common Shares and with respect to applicable resale restrictions, and it is solely
responsible (and the Issuer is not in any way responsible) for compliance with: |
| (i) | any
Applicable Laws of the jurisdiction in which the Subscriber is resident in connection
with the distribution of the Common Shares hereunder, and |
| (ii) | any applicable resale restrictions; |
| (q) | there
may be material tax consequences to the Subscriber of an acquisition or disposition of the
Common Shares and the Issuer gives no opinion and makes no representation to the Subscriber
with respect to the tax consequences to the Subscriber under federal, state, provincial,
local or foreign tax laws that may apply to the Subscriber’s acquisition or disposition
of any of the Common Shares; |
| (r) | it is subscribing for the Common Shares
for investment purposes and for Subscriber’s own account, with the intention of holding
the Common Shares, with no present intention of dividing or allowing others to participate
in this investment or of reselling or otherwise participating, directly or indirectly, in
a distribution of the Common Shares; |
| (s) | there is no market for any of the Common
Shares and no market for any of the Common Shares may ever exist; and |
| (t) | this Agreement is not enforceable by the
Subscriber unless it has been accepted by the Issuer and the Issuer reserves the right to
reject this Subscription for any reason. |
| 6. | Representations
and Warranties of the Subscriber |
6.1 The
Subscriber hereby represents and warrants to the Issuer (which representations and warranties will survive the Closing) that:
| (a) | the Subscriber is resident in the jurisdiction
set out on page ii of this Agreement; |
| (b) | if the Subscriber is resident outside
of the U.S. or Canada: |
| (i) | the
Subscriber is knowledgeable of, or has been independently advised as to, the applicable securities
laws having application in the jurisdiction in which the Subscriber is resident (the “International
Jurisdiction”) which would apply to the offer and sale of the Common Shares, |
| (ii) | the
Subscriber is acquiring the Common Shares pursuant to exemptions from prospectus or
equivalent requirements under applicable securities laws or, if such is not applicable, the
Subscriber is permitted to acquire the Common Shares under the Applicable Laws of the International
Jurisdiction without the need to rely on any exemptions, |
| (iii) | the
Applicable Laws of the authorities in the International Jurisdiction do not require
the Issuer to make any filings or seek any approvals of any kind from any securities regulator
in the International Jurisdiction in connection with the offer, issue, sale or resale of
any of the Common Shares, |
| (iv) | the
acquisition of the Common Shares by the Subscriber does not trigger: |
| (A) | any obligation to prepare and file a prospectus
or similar document, or any other report with respect to such purchase, in the International
Jurisdiction, or |
| (B) | any continuous disclosure reporting obligation
of the Issuer in the International Jurisdiction, and |
| (v) | the Subscriber will, if requested by the
Issuer, deliver to the Issuer a certificate or opinion of local counsel from the International
Jurisdiction which will confirm the matters referred to in subparagraphs (ii), (iii) and
(iv), above, to the satisfaction of the Issuer, acting reasonably; |
| (c) | the Subscriber has the legal capacity
and competence to enter into and execute this Agreement and to take all actions required
pursuant hereto and, if the Subscriber is a corporate entity, it is duly incorporated and
validly subsisting under the laws of its jurisdiction of incorporation and all necessary
approvals by its directors, shareholders and others have been obtained to authorize execution
and performance of this Agreement on behalf of the Subscriber; |
| (d) | the entering into of this Agreement and
the transactions contemplated hereby do not result in the violation of any of the terms and
provisions of any law applicable to, or, if applicable, the constating documents of, the
Subscriber or of any agreement, written or oral, to which the Subscriber may be a party or
by which the Subscriber is or may be bound; |
| (e) | the Subscriber has duly executed and delivered
this Agreement and it constitutes a valid and binding agreement of the Subscriber enforceable
against the Subscriber in accordance with its terms; |
| (f) | the
Subscriber has received and carefully read this Agreement; |
| (g) | the
Subscriber acknowledges receipt of a copy of the unanimous shareholder agreement of the Issuer
and acknowledges that it is a condition of becoming a shareholder of the Issuer that the
Subscriber must become a party to such unanimous shareholder agreement; |
| (h) | the
Subscriber is aware that an investment in the Issuer is speculative and involves certain
risks, including the possible loss of the entire investment; |
| (i) | the Subscriber is not aware of any advertisement
of any of the Common Shares and is not acquiring the Common Shares as a result of any form
of general solicitation or general advertising, including advertisements, articles, notices
or other communications published in any newspaper, magazine or similar media, or broadcast
over radio or television, or any seminar or meeting whose attendees have been invited by
general solicitation or general advertising; |
| (j) | the Subscriber has made an independent
examination and investigation of an investment in the Common Shares and the Issuer and agrees
that the Issuer will not be responsible in any way for the Subscriber’s decision to
invest in the Common Shares and the Issuer; |
| (k) | no person has made to the Subscriber any
written or oral representations: |
| (i) | that any person will resell or repurchase
any of the Common Shares, |
| (ii) | that any person will refund the purchase
price of any of the Common Shares, or |
| (iii) | as to the future price or value of any
of the Common Shares; and |
| (l) | there
is no person acting or purporting to act in connection with the Offering for or on behalf
of the Subscriber who is entitled to any brokerage or finder’s fee payable by the Issuer.
If any such person establishes a claim that any fee or other compensation is payable by the
Issuer in connection with this subscription for the Common Shares, the Subscriber covenants
to indemnify and hold harmless the Issuer with respect thereto and with respect to all costs
reasonably incurred in the defence thereof. |
6.2 In
this Agreement, the term “U.S. Person” has the meaning ascribed thereto in Regulation S, and for the purpose of this
Agreement includes: (i) any person in the United States; (ii) any natural person resident in the United States; (iii) any
partnership or corporation organized or incorporated under the laws of the United States; (iv) any partnership or corporation organized
outside the United States by a U.S. Person principally for the purpose of investing in securities not registered under the 1933 Act,
unless it is organized or incorporated, and owned, by accredited investors who are not natural persons, estates or trusts; or (v) any
estate or trust of which any executor, administrator or trustee is a U.S. Person.
| 7. | Representations
and Warranties will be Relied Upon |
7.1 The
Subscriber acknowledges that its representations and warranties contained herein and in the Questionnaire are made by it with the intention
that such representations and warranties will be relied upon by the Issuer in determining the Subscriber’s eligibility to subscribe
for the Common Shares under Applicable Laws, or (if applicable) the eligibility of others on whose behalf the Subscriber is contracting
hereunder to subscribe for the Common Shares under Applicable Laws. The Subscriber further agrees that, as at the Closing, it will be
representing and warranting that its representations and warranties contained herein and in the Questionnaire are true and correct as
at the Closing with the same force and effect as if they had been made by the Subscriber on the Closing, and that they will survive the
subscription by the Subscriber of the Common Shares and will continue in full force and effect notwithstanding any subsequent disposition
by the Subscriber of the Common Shares.
| 8. | REPRESENTATIONS
AND WARRANTIES OF THE ISSUER |
8.1 The
Issuer hereby represents and warrants to the Subscriber (which representations and warranties will survive the Closing) that:
| (a) | each
of the Issuer and the Material Subsidiaries (as defined herein) is validly subsisting under
the laws of its jurisdiction of incorporation, licensed, registered or qualified as an extra-provincial
or foreign corporation in all jurisdictions where the character of its properties owned or
leased or the nature of the activities conducted by it make such licensing, registration
or qualification necessary and carries and shall carry on its business in the ordinary course
and in compliance in all material respects with all Applicable Laws of each such jurisdiction; |
| (b) | on the Closing Date, the Issuer will have
taken all corporate steps and proceedings necessary to duly approve the transactions contemplated
under this Agreement, including its execution and delivery, and the execution and delivery
of Amendment No.2 to the Nuton Collaboration Agreement, the Share Purchase Agreement and
each other agreement contemplated by this Agreement; |
| (c) | on the Closing Date, the Issuer will have
caused Andes Corporation Minera S.A (“ACM”) to have taken all corporate
steps and proceedings necessary to duly approve the transactions contemplated under this
Agreement, including the execution and delivery of each agreement contemplated by this Agreement
to which ACM is a party; |
| (d) | the Issuer is not in default of any securities
laws; |
| (e) | at the time of closing on the Closing
Date, the Common Shares will be duly and validly created, authorized and issued; will be
validly issued as fully paid as non-assessable Common Shares in the capital of the Issuer; |
| (f) | the issuance and delivery of the Common
Shares by the Issuer to the Subscriber does not and will not constitute a breach of or default
under the constating documents of the Issuer or any law, regulation, order or ruling applicable
to the Issuer or any agreement, contract or indenture to which the Issuer is a party or by
which it is bound; |
| (g) | for
the purposes of the transactions contemplated herein, the Issuer has obtained waivers from
the shareholders of the Issuer in respect of the pre-emptive rights set out in the Shareholder
Agreement, or the Issuer has provided notice to the shareholders of the Issuer under the
pre-emptive rights provisions of the Shareholder Agreement and the relevant exercise period
has expired, or the Issuer has provided notice in writing to the Subscriber outlining
in reasonable detail the extent to which the shareholders of the Issuer have exercised such
pre-emptive rights, as applicable; |
| (h) | the Issuer is authorized to issue an unlimited
number of Common Shares and an unlimited number of Class B common shares; and as of
the date of this Agreement, 30,785,000 Common Shares are issued and outstanding and no Class B
common shares are issued and outstanding; |
| (i) | as of the Closing Date, there exist no
options, warrants, rights of conversion or other rights, contracts or commitments that could
require the Issuer to issue any Common Shares or other securities other than the pre-emptive
rights set out in the Shareholder Agreement and the 40,000 options that the Issuer has agreed
to grant to Michael Meding upon the completion of an initial public offering of the Issuer,
pursuant to the employment agreement between the Issuer and Michael Meding dated February 7,
2022; |
| (j) | except for Michael Meding, Alex Aguado
and Stephen McGibbon, the Issuer has no employees or independent contractors, and neither
of such employees are entitled to any bonus, increase in compensation or other benefit that
is contingent on the Closing. The Issuer has provided copies of the employment agreements
between the Issuer and each of Michael Meding and Alex Aguado, and there are no other agreements,
whether written or oral, between either of such employees and the Issuer; |
| (k) | the
issuance and sale of the Common Shares by the Issuer and the fulfilment of the terms hereof
does not and will not conflict with or constitute a breach of or default under (i) the
constating documents of the Issuer or its Material Subsidiaries (as defined below), (ii) any
Applicable Laws, order or ruling or (iii) any agreement, contract or indenture,
including any covenants or provisions respecting the Issuer’s right to issue additional
equity, or any pre-emptive right or similar rights therein, to which the Issuer or any of
its Material Subsidiaries (as defined below) is a party or by which it is bound, or to which
any of the property or assets of the Issuer or any of its Material Subsidiaries (as defined
below) is subject; |
| (l) | each of this Agreement, Amendment No.2
to the Nuton Collaboration Agreement, the Share Purchase Agreement, and each other agreement
of the Issuer and its affiliates contemplated hereby, when signed by the Issuer or such affiliates,
as the case may be, constitutes a binding and enforceable obligation of the Issuer or such
affiliates, as applicable, enforceable in accordance with its respective terms; |
| (m) | Exhibit “E” accurately
shows (i) each direct and indirect subsidiary of the Issuer (collectively, “Material
Subsidiaries”); (ii) the registered and beneficial holders of all of the issued
and outstanding shares in the capital of each of the Material Subsidiaries; and (iii) the
numbers and classes of shares currently held by each such holder and the percentage in the
outstanding capital of each Material Subsidiary. The Issuer has no assets other than the
holding of the shares of each of the Material Subsidiaries; |
| (n) | International Copper Mining Inc. has no
assets other than the holding of the shares of each of Los Azules Mining Inc. and San Juan
Copper Inc., and neither of Los Azules Mining Inc. and San Juan Copper Inc. has assets other
than shares of ACM; and none of International Copper Mining Inc., Los Azules Mining Inc.
and San Juan Copper Inc. (together, the “Cayman Subsidiaries”) operated
or engaged in, or operates or engages in, any business activities, operations or management
other than business activities, operations or management related to the Los Azules Project; |
| (o) | the Issuer has not operated or engaged
in, and is not operating or engaged in, any business activities or operations other than
those related to the Los Azules Project and the Elder Creek Project; |
| (p) | except as publicly disclosed by the Issuer
and/or MUX, none of the shareholders of the Issuer have any agreements or side letters with
the Issuer granting such shareholders any rights in respect of the Issuer, including the
right to nominate directors for appointment to the board of directors of the Issuer or any
approval rights with respect to any transactions of the Issuer or the Material Subsidiaries
(including, without limitation, granting of offtake, royalty, stream or similar rights with
respect to the Los Azules Project); |
| (q) | there
are no circumstances, developments or events that would constitute or reasonably be expected
to constitute a material adverse effect in respect of any of the Issuer or the Material Subsidiaries; |
| (r) | other
than as set out in the Vargas opinion, there are no: (i) Claims pending or, to
the knowledge of the Issuer, threatened against any of the Issuer or the Material Subsidiaries
before or by any governmental authority; and (ii) outstanding judgments, orders, decrees,
writs, injunctions, decisions, rulings or awards against any of the Issuer or the Material
Subsidiaries or affecting any of the Issuer, the Material Subsidiaries, the Los Azules Project
or the Elder Creek Project; |
| (s) | a
complete copy of the articles, bylaws, minute books, share registers and other corporate
records of the Issuer and the Material Subsidiaries have been provided to the Subscriber.
Such books and records have been maintained in accordance with Applicable Laws and
contain complete and accurate records of all matters required to be dealt with in such books
and records, in each case, in all material respects; |
| (t) | the
Issuer owns all of the issued and outstanding securities of the Material Subsidiaries, free
and clear of any encumbrances and defects, and has no other subsidiaries. All of the outstanding
equity interests in the Material Subsidiaries have been duly authorized and validly issued
and all of such equity interests are outstanding as fully paid and non-assessable shares.
There exist no options, warrants, purchase rights, or other contracts or commitments that
would require the Issuer or any other person to sell, transfer or otherwise dispose of any
equity interests of the Material Subsidiaries or for the issue or allotment of any unissued
shares in the capital of the Material Subsidiaries or any other security convertible into
or exchangeable for any such shares. Except as publicly disclosed by the Issuer and/or MUX,
none of the Issuer or the Material Subsidiaries has any obligations (including any obligation
to provide any guarantee, security, support, indemnification, assumption or endorsement of
or any similar commitment with respect to the obligations, liabilities or indebtedness of
any other person) including, without limitation, the obligations of MUX under the amended
and restated credit agreement dated May 19, 2023 between MUX and Evanachan Limited
as lender and as Administrative Agent; |
| (u) | each of the Material Subsidiaries has
been duly incorporated or established and is validly existing and in good standing under
the laws of its respective jurisdiction of organization with all requisite corporate power
and authority to own, use, lease and operate its properties and conduct its business in the
manner currently conducted, and is duly qualified to transact business in each jurisdiction
where it carries its business; |
| (v) | the
Issuer and its Material Subsidiaries (i) are conducting their business operations in
material compliance with Applicable Laws, including without limitation those of the
country, state, province, municipality or other local or foreign jurisdiction in which such
entity carries on business or conducts its activities; (ii) have received and hold all
material permits, by-laws, licenses, waivers, exemptions, consents, certificates, registrations,
rights, rights of way, entitlements and other approvals which are required from any governmental
or regulatory authority or any other person necessary to the conduct of their business and
activities as currently conducted, and to the conduct of their business as proposed to be
conducted pursuant to the use of funds proposal underlying the proposed placement, including
but not limited to those required under applicable mining and environmental laws (“Authorizations”);
and (iii) are in material compliance with all terms and conditions of such Authorizations,
and such Authorizations are in full force and effect in all material respects; and (iv) have
not received any notice of the modification, suspension, revocation, cancellation or non-renewal
of, or any intention to modify, suspend, revoke, cancel or not renew or any proceeding relating
to the modification, suspension, revocation, cancellation or non-renewal of any such Authorizations,
and no Authorizations will be subject to modification, suspension, revocation, cancellation
or non-renewal as a result of the execution and delivery of this Agreement or the Closing; |
| (w) | except
to the extent qualified by the Vargas Opinion, which the Subscriber acknowledges having received,
the Issuer and each of its Material Subsidiaries (i) own, hold or lease all such properties
as are necessary to the conduct of their respective businesses as currently operated, and
to the conduct of their business as proposed to be conducted pursuant to the use of funds
proposal underlying the proposed placement; and (ii) have good and marketable title
under Applicable Laws to all real property and good and marketable title to all personal
property owned by them that constitute the Los Azules Project and the Elder Creek Project
and to all material personal property owned by them in the conduct of their business on the
Los Azules Project and the Elder Creek Project, in each case free and clear of all liens,
encumbrances and defects; and any real property and buildings to be held under lease or sublease
by the Issuer and the Material Subsidiaries are held by them under valid, subsisting and
enforceable leases; (A) the “Los Azules Project” means the Los Azules
project owned by ACM and located in the San Juan Province, Argentina, which involves exploration,
development and other operations on the mineral properties, claims and any other mineral
rights listed in, and depicted by the maps in, Exhibit “F” hereto, and which
includes the project described in the technical report entitled “SEC S-K 229.1304 Initial
Assessment Individual Disclosure for the Los Azules Project, Argentina” with an effective
reporting date of September 1, 2017 prepared by Mining Plus; and (B) the “Elder
Creek Project” means the project commonly known as the Elder Creek project, which
is owned by NPGUS LLC and located near Elder Creek, Nevada, USA, which involves exploration,
development and other operations on the mineral properties, claims and any other mineral
rights comprising such project; |
| (x) | except to the extent qualified by the
Vargas Opinion, all interests in material mining claims, concessions, exploration, reconnaissance,
exploitation or extraction rights, surface rights, subsurface rights or similar rights, (“Mining
Claims”) that are held by the Issuer or any of the Material Subsidiaries, held
by way of Authorizations or otherwise, are in good standing, are valid and enforceable, are
free and clear of any encumbrances and no royalty is payable in respect of any of them, except
as disclosed in the Vargas Opinion; |
| (y) | no other material property rights are
necessary for the conduct of the business as currently conducted, or for the conduct of the
business as proposed to be conducted pursuant to the use of funds proposal underlying the
proposed placement, in each case by the Issuer and the Material Subsidiaries; |
| (z) | except as provided in the Vargas Opinion,
there are no material restrictions on the ability of the Issuer and the Material Subsidiaries
to use, transfer or otherwise exploit any such property rights; |
| (aa) | except as set out in the Vargas Opinion,
there are no Claims to which the Issuer or any of its Material Subsidiaries is a party or
of which any property, including Authorizations and Mining Claims, of the Issuer or any of
its Material Subsidiaries is the subject; and, no such proceedings are threatened or pending
by governmental authorities or any other person; there is no agreement, judgment, injunction,
order or decree binding upon the Issuer or its Material Subsidiaries that has or would reasonably
be expected to have the effect of prohibiting, restricting or materially impairing any business
practice of the Issuer or its Material Subsidiaries; |
| (bb) | no dispute between the Issuer or the
Material Subsidiaries and any local, native or indigenous group exists or to the knowledge
of the Issuer is threatened or reasonably likely with respect to the Los Azules Project and
the Elder Creek Project or the business activities of the Issuer and the Material Subsidiaries; |
| (cc) | the Issuer’s draft unaudited financial
statements for the periods ending December 31, 2021 and December 31, 2022, copies
of which the Issuer has provided to the Subscriber, have been prepared in accordance with
International Financial Reporting Standards (“IFRS”) and present fairly
the consolidated financial position and results of operation and changes in the financial
position of the Issuer and its Material Subsidiaries and such accounts fairly present in
all material respects the financial condition, financial performance and cash flows of the
Issuer for the periods ended December 31, 2021 and December 31, 2022; neither the
Issuer nor the Material Subsidiaries have any material liabilities, obligations, indebtedness
or commitments, whether accrued, absolute, contingent or otherwise required to be disclosed
under IFRS, which are not disclosed in the Issuer’s financial statements, and the Issuer
and the Material Subsidiaries have conducted their respective businesses in the ordinary
course since December 31, 2022 until the Closing Date; |
| (dd) | the audited consolidated financial
statements for ACM for the period ending December 31, 2022, a copy of which has been
provided to the Subscriber, are prepared in accordance with Argentine GAAP and
present fairly the consolidated financial position and results of operation and changes in
the financial position of ACM and its subsidiaries and such accounts fairly present in all
material respects the financial condition, financial performance and cash flows of ACM for
the periods indicated; as at the Closing Date, neither ACM nor its subsidiaries have any
material liabilities, obligations, indebtedness or commitments, whether accrued, absolute,
contingent or otherwise required to be disclosed under Argentine GAAP, which are not
disclosed in ACM’s financial statements and each of ACM and its subsidiaries have conducted
their respective businesses in the ordinary course since December 31, 2022 until the
Closing Date; |
| (ee) | the
Issuer and the Material Subsidiaries have filed all Tax Returns required to be filed under
Applicable Laws when due and all such Tax Returns were correct and complete in all respects
and have paid all taxes required to be paid by them and any other assessment, fine or penalty
levied against them, to the extent that any of the foregoing is due and payable; |
| (ff) | any deductions taken or claimed in computing
the income of any of the Issuer or the Material Subsidiaries for Tax purposes have been taken
or claimed in accordance with Applicable Law; |
| (gg) | there are no Encumbrances on any of the
assets of the Issuer or of the Material Subsidiaries that arose in connection with any failure
(or any alleged failure) to pay any Tax when due; |
| (hh) | all
Taxes required to be paid under Applicable Laws have been paid by each of the Issuer
and the Material Subsidiaries or an adequate reserve under IFRS has been recorded in respect
thereof in the accounting records of the Issuer or the Material Subsidiaries, and each of
the Issuer and the Material Subsidiaries has made adequate and timely installments of all
Taxes required to be made by it under Applicable Laws. Neither the Issuer nor any of the
Material Subsidiaries has incurred any liability, whether actual or contingent, for Taxes
or engaged in any transaction or event that would result in any liability, whether actual
or contingent, for Taxes or realized any income or gain for Tax purposes otherwise than in
the usual and ordinary course of its business; |
| (ii) | there
are no notices of assessment or reassessment of, or notices of audits, investigations or
Claims with respect to, unpaid liabilities for Taxes issued by any Tax Authority which have
been received by any of the Issuer or the Material Subsidiaries. There are no assessments,
proceedings, investigations, audits or Claims now pending or, to the knowledge of the Issuer,
threatened against any of the Issuer or the Material Subsidiaries in respect of any Taxes
and there are no matters under discussion, investigation, audit or appeal with any Tax Authority
in respect of any of the Issuer or the Material Subsidiaries. The Issuer is not aware of
any contingent liability of any of the Issuer or the Material Subsidiaries for Taxes or any
grounds that could prompt an assessment or reassessment for Taxes; |
| (jj) | each
of the Issuer and the Material Subsidiaries has deducted, withheld, collected and
remitted within the time limits required by Applicable Laws all amounts required by Applicable
Laws to have been deducted, withheld, collected and remitted in connection with amounts paid
or owing to any employee, independent contractor, creditor, shareholder or other third party; |
| (kk) | none
of the Issuer or the Material Subsidiaries are party to any agreement, waiver or arrangement
with any Tax Authority that relates to any extension of time with respect to the filing of
any Tax Return, any payment of Taxes or any assessment; |
| (ll) | no
facts, circumstances or events exist or have existed that have resulted in, or may result
in, the application of any of sections 15, 17, 67, 78 to 80.04 of the Tax Act (or any similar
provision of an Applicable Law of any province or territory of Canada) to any of the
Issuer or the Material Subsidiaries; |
| (mm) | none
of the Issuer or the Material Subsidiaries are subject to liability for Taxes of any
other person. None of the Issuer or the Material Subsidiaries have acquired property from
any person in circumstances where any such company could become liable for Taxes of such
person. None of the Issuer or the Material Subsidiaries have entered into any agreement with,
or provided any undertaking to, any person pursuant to which it has assumed liability for
the payment of income Taxes owing by such person; |
| (nn) | none
of the Issuer or the Material Subsidiaries has ever been required to file any Tax
Return with, and has never been liable to pay any Taxes to, any Tax Authority in any jurisdiction
in which it is not currently filing any Tax Returns. No Claim has ever been made by a Tax
Authority in a jurisdiction where any of the Issuer or the Material Subsidiaries does not
file Tax Returns that the Issuer or the Material Subsidiaries is or may be subject to the
imposition of any Tax by that jurisdiction; |
| (oo) | any
of the Issuer or the Material Subsidiaries that are required to be registered (i) with
the Canada Revenue Agency under Subdivision d of Division V of Part IX of the Excise
Tax Act (Canada) for the purposes of goods and services sales tax and the harmonized
sales tax (“GST/HST”), or (ii) under any Applicable Law of a province
in respect of sales tax are so registered, and any such registration numbers have been provided
to the Subscriber. Any input tax credits, rebates and similar refunds claimed by the Issuer
or the Material Subsidiaries for GST/HST or provincial sales tax purposes were calculated
in accordance with Applicable Laws; |
| (pp) | the
Issuer and the Material Subsidiaries have complied with all information reporting and record
keeping requirements under Applicable Laws, including retention and maintenance of required
records with respect thereto; |
| (qq) | neither the Issuer nor any of the Material
Subsidiaries have owned any (i) real or immovable property situated in Canada (as defined
in the Tax Act), (ii) Canadian resource properties (as defined in the Tax Act), (iii) timber
resource properties (as defined in the Tax Act), or (iv) options in respect or, or interests
in, or for civil law, a right in, property described in any of (i) to (iii), whether
or not the property exists; |
| (rr) | none
of the Issuer or the Material Subsidiaries have engaged in any “reportable transaction”
as defined in subsection 237.3(1) of the Tax Act or any “notifiable transaction”
as defined in proposed subsection 237.4(1) of the Tax Act (as such provisions are proposed
to be amended or introduced), as applicable, by the legislative proposals released by the
Minister of Finance (Canada) on August 9, 2022; |
| (ss) | all
transactions entered into by the Issuer and the Material Subsidiaries have been entered
into on an arm’s length basis and the consideration (if any) charged, received or paid
by the Issuer or the Material Subsidiaries, as the case may be, on all transactions entered
into by it has been equal to the consideration which might have been expected to be charged,
received or paid, as applicable, been independent persons dealing at arm’s length and
no notice or inquiry by any Tax Authority has been made in connection with any such transactions.
The Issuer and the Material Subsidiaries have complied in all material respects with relevant
transfer pricing laws (including section 247 of the Tax Act), including preparing contemporaneous
documentation and other documents contemplated thereby; |
| (tt) | there are no liens for taxes on the assets
of the Issuer or the Material Subsidiaries, there are no audits of any of the tax returns
of the Issuer or the Material Subsidiaries reasonably expected to have a material adverse
effect on the properties, business or assets of the Issuer or the Material Subsidiaries which
are pending, and there are no Claims which have been or may be asserted relating to any such
tax returns which, if determined adversely, would result in the assertion by any government
agency of any deficiency which would have a material adverse effect on the properties, business
or assets of the Issuer or the Material Subsidiaries; |
| (uu) | none
of the Issuer or the Material Subsidiaries have applied for, filed for, or otherwise
claimed any COVID-19 Relief; |
| (vv) | none
of the Issuer or the Material Subsidiaries will be required to include any item of
income in, or exclude any item or deduction from, taxable income for any taxation year or
portion thereof ending after the Closing Date as a result of the use of an improper method
of accounting for a taxation year ending before the Closing Date; |
| (ww) | neither
the Issuer nor any of its Material Subsidiaries are insolvent or in liquidation or administration
or subject to any other insolvency procedure and no receiver, manager, trustee, custodian
or analogous officer has been appointed in respect of all or any part of its property, undertaking
or assets; neither steps have been taken nor legal, legislative or administrative proceedings
have been started or threatened to wind up, dissolve, make dormant, or eliminate the
Issuer or any of its Material Subsidiaries; and the Issuer does not have any knowledge of
any event or circumstance that could reasonably be expected to lead to or result in the winding
up, liquidation, dissolution, elimination or insolvency of the Issuer or any Material Subsidiary; |
| (xx) | neither
the Issuer nor its subsidiaries and, to the Issuer’s knowledge, none of their respective
directors, officers, supervisors, managers, employees, or agents has: (A) violated any
Applicable Laws relating to anti-bribery and anti-corruption, including the Corruption
of Foreign Public Officials Act (Canada), the Criminal Code (Canada), Foreign
Corrupt Practices Act of 1977 (United States) or any other applicable anti-corruption
laws of any relevant jurisdiction (“Anti-Corruption Laws”) or Applicable
Laws relating to export control, or economic and financial sanctions laws (“Sanctions
Laws”), (B) made, given, authorized, made, or offered anything of value,
including any payment, facilitation payment, loan, reward, gift, contribution, expenditure
or other advantage, directly or indirectly, (i) to any person in violation of the Anti-Corruption
Laws, or (ii) to or for the benefit of a government official in order to improperly
influence any act or decision of a government official, induce a government official to do
or omit to do any act in violation of their lawful duty or secure any improper advantage,
or (C) used any corporate funds, or made any direct or indirect unlawful payment from
corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; |
| (yy) | the operations of the Issuer and its
subsidiaries are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the money laundering statutes of all applicable
jurisdictions, the rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any governmental authority
(“Money Laundering Laws”) and no action, suit or proceeding by or before
any court of governmental authority or any arbitrator non-governmental authority involving
the Issuer or its subsidiaries with respect to the Money Laundering Laws is pending or, to
the knowledge of the Issuer, threatened; |
| (zz) | neither the Issuer nor its subsidiaries
nor any of their respective directors, officers, supervisors, managers, employees, or agents
is (i) a person currently identified, listed or designated under the Sanctions Laws,
(ii) a person located, organized, resident, doing business or operating in a country
or territory that is, or whose government is, the subject of Sanctions Laws which prohibit
a person resident in, or a national of, Canada, the United States, the United Kingdom, or
the European Union from doing business with or in that jurisdiction, or (iii) a person
directly or indirectly owned or controlled by, or acting for the benefit or on behalf of,
a person described in clause (i) or (ii) (a “Sanctioned Person”).
Neither the Issuer nor any of its subsidiaries (i) has assets or operations located
in a jurisdiction in violation of Sanctions Laws, or (ii) directly or indirectly derives
revenues from or engages in investments, dealings, activities or transactions with any Sanctioned
Person or which otherwise violate Sanctions Laws; |
| (aaa) | the
data or information with respect to the business and activities of the Issuer and Material
Subsidiaries disclosed on the EDGAR system by MUX is complete and correct in all material
respects and does not contain any untrue statement of material fact or omit to state a material
fact necessary in order to make the statement contained therein not misleading in the circumstances;
and |
| (bbb) | the
data or information made available to Subscriber by or on behalf of the Issuer: (i) does
not, when taken as a whole, create a false impression of the development and operations of
the Los Azules Project and the Elder Creek Project as at the date of this Agreement, (ii) was,
to the knowledge of the Issuer at the time when such data or information was created
by or for the Issuer, accurate in all material respects, and (iii) was prepared in good
faith for the purposes of informing the Subscriber about the business and activities of the
Issuer and Material Subsidiaries and in doing so, the Issuer has not: |
| (i) | omitted anything that the Issuer, acting
reasonably, considers is material from such data or information; or |
| (ii) | included anything that the Issuer, acting
reasonably, considers is materially misleading in such data or information. |
9.1 The
Issuer shall indemnify and hold harmless the Subscriber and its officers, directors, employees and other representatives (the
“Subscriber Indemnified Parties”) from and against any and all claims asserted against any of them, or any Losses
incurred or suffered by any of them, or any Losses of the Issuer which result in a decrease in the value of the Common Shares held by
the Subscriber, and directly or indirectly arising from or in connection with:
| (a) | any
breach or inaccuracy of any representation or warranty made by the Issuer in this Agreement;
and |
| (b) | any
failure of the Issuer to perform or observe any covenant or agreement to be performed or
observed by it under this Agreement. |
If the Issuer indemnifies the Subscriber Indemnified
Parties pursuant to this Agreement, or Minera Andes Inc. or MUX indemnifies the Subscriber Indemnified Parties pursuant to the Share
Purchase Agreement, in respect of any matter the Issuer shall not subsequently be liable to indemnify the other Subscriber Indemnified
Parties for the same matter, to the extent that doing so would result in a duplicate recovery.
10.1 The
Subscriber hereby waives, to the fullest extent permitted by law, any rights of withdrawal, rescission or compensation for damages to
which the Subscriber may be entitled in connection with the distribution of any of the Common Shares.
| 11. | Escrow
OR LOCK-UP of COMMON Shares |
11.1 The
Subscriber acknowledges that the Issuer is not currently a reporting issuer in any jurisdiction. If the Issuer completes an initial public
offering that results in the Common Shares or other securities in the capital of the Issuer becoming listed on a stock exchange in Canada
or the United States of America, or the Issuer completes a reverse takeover, statutory merger or amalgamation, arrangement, share exchange,
business combination or other similar transaction which results in a class of shares of the issuer resulting from such transaction being
listed (the “Resulting Issuer”) on a stock exchange in Canada or the United States of America and the shareholders
of the Issuer receiving such listed securities of the Resulting Issuer and/or cash in exchange for their Common Shares (in each case,
a “Liquidity Event”), the Common Shares may be required to be escrowed or locked-up, either at the request of the
Issuer’s selling agent or underwriter for a period not to exceed 180 days in connection with the Liquidity Event, or otherwise
pursuant to the rules of any stock exchange, securities commission or other securities regulatory authority having jurisdiction,
and the Subscriber agrees to sign any such escrow or lock-up agreement and abide by any such restrictions as may be so imposed, provided
such restrictions are the same as those imposed on the other shareholders of the Resulting Issuer who hold more than 2% of the shares
of the Resulting Issuer.
| 12. | Collection
of Personal Information |
12.1 The
Subscriber acknowledges and consents to the fact that the Issuer is collecting the Subscriber’s personal information for the purpose
of fulfilling this Agreement and completing the Offering. The Subscriber acknowledges that its personal information (and, if applicable,
the personal information of any person on whose behalf the Subscriber is contracting hereunder) may be included in record books in connection
with the Offering and may be disclosed by the Issuer to: (i) stock exchanges or securities regulatory authorities; (ii) the
Issuer’s registrar and transfer agent; (iii) Canadian or U.S. tax authorities; (iv) the U.S. Financial Crimes
Enforcement Network and authorities pursuant, among other legislation, to the Proceeds of Crime (Money Laundering) and Terrorist Financing
Act (Canada); and (v) any other parties involved in the Offering, including the Issuer’s counsel. By executing this Agreement,
the Subscriber is deemed to be consenting to the foregoing collection, use and disclosure of the Subscriber’s personal information
(and, if applicable, the personal information of any other person on whose behalf the Subscriber is contracting hereunder) for the foregoing
purposes and to the retention of such personal information for as long as permitted or required by Applicable Laws. Notwithstanding that
the Subscriber may be purchasing the Common Shares as agent on behalf of an undisclosed principal, the Subscriber agrees to provide,
on request, particulars as to the nature and identity of such undisclosed principal, and any interest that such undisclosed principal
has in the Issuer, all as may be required by the Issuer in order to comply with the foregoing. Furthermore, the Subscriber is hereby
notified that:
| (a) | the Issuer may deliver to any securities
commission having jurisdiction over the Issuer, the Subscriber or this Subscription, including
any Canadian provincial securities commissions, the United States Securities and Exchange
Commission and/or any state securities commissions (collectively, the “Commissions”),
certain personal information pertaining to the Subscriber, including the Subscriber’s
full name, residential address and telephone number, the number of securities of the Issuer
owned by the Subscriber, the number of Common Shares purchased by the Subscriber, the total
Subscription Amount paid, the prospectus exemption relied on by the Issuer and the date of
distribution of the Common Shares; |
| (b) | such information is being collected indirectly
by the Commissions under the authority granted to them in applicable securities laws; |
| (c) | such
information is being collected for the purposes of the administration and enforcement of
applicable securities laws; and |
| (d) | in Ontario, the Administrative Support
Clerk, Suite 1903, Box 55, 20 Queen Street West, Toronto ON, M5H 3S8, Telephone: (416)
593-3684 is the public official who can answer questions about the collection of personal
information. |
13.1 The
Subscriber acknowledges and agrees that all costs and expenses incurred by the Subscriber (including any fees and disbursements of any
legal counsel or tax or financial advisors retained by the Subscriber) relating to the subscription of the Common Shares will be paid
by the Subscriber.
| 14. | Delivery
of Subscription Agreement |
14.1 The
Issuer and the Issuer’s counsel will be entitled to rely on delivery by DocuSign or other means of electronic communication of
an executed copy of this Agreement, and acceptance by the Issuer of such copy will be equally effective to create a valid and binding
agreement between the Subscriber and the Issuer in accordance with the terms hereof. If less than a complete copy of this Agreement is
delivered to the Issuer or the Issuer’s counsel prior to or at Closing, the Issuer and the Issuer’s counsel are entitled
to assume that the Subscriber accepts and agrees to all of the terms and conditions of the pages not delivered prior to or at Closing
as written herein, unaltered.
15.1 This
Agreement and all matters related hereto or arising herefrom are governed by the laws of the Province of Ontario and the federal laws
of Canada applicable therein. Each of the Issuer and the Subscriber irrevocably attorns to the exclusive jurisdiction of the courts of
the Province of Ontario in all matters related to, or arising from, this Agreement.
16.1 This
Agreement, including the representations, warranties and covenants contained herein, will survive and continue in full force and effect
and be binding upon the Issuer and the Subscriber, notwithstanding the completion of the subscription of the Common Shares by the Subscriber.
17.1 This
Agreement is not transferable or assignable.
18.1 The
invalidity or unenforceability of any particular provision of this Agreement will not affect or limit the validity or enforceability
of the remaining provisions of this Agreement.
19.1 This
Agreement and the other Transaction Documents (as defined in the Share Purchase Agreement) constitute the entire agreement between the
parties and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties and
their respective affiliates, as applicable, related to such matters. The parties have not relied and are not relying on any other information,
discussion or understanding in entering into this Agreement.
20.1 All
notices and other communications hereunder will be in writing and will be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication, including DocuSign, electronic mail or other means of electronic communication capable of producing
a printed copy. Notices to the Subscriber will be directed to the address of the Subscriber set forth on page iii of this
Agreement and notices to the Issuer will be directed to the address of the Issuer set forth on the first page of this Agreement.
| 21. | Counterparts
and Electronic Means |
21.1 This
Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, will constitute an original and
all of which together will constitute one instrument. Delivery of an executed copy of this Agreement by DocuSign or other means of electronic
communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement as of the Closing Date.
| 22. | Schedules,
Exhibits and Appendices |
22.1 The
schedules, exhibits and appendices attached hereto form part of this Agreement.
SCHEDULE
“A”
DEFINITIONS
The terms defined in this
Schedule “A” shall, for all purposes of this Agreement, have the following meanings:
“Applicable
Laws” means all applicable domestic or foreign national, federal, provincial, territorial, state, regional and local laws (whether
statutory or common law or equity), rules, ordinances (including zoning and mineral removal ordinances), regulations, grants, concessions,
franchises, licences, orders, directives, judgments, decrees, and other governmental restrictions, including permits and other similar
requirements, whether legislative, municipal, administrative or judicial in nature and in any case, issued, enacted, promulgated, enforced
or entered by any Governmental Authority (including environmental laws, mining laws and any applicable securities laws and any
applicable rules of any stock exchange imposing disclosure requirements);
“Claim” means any material
actual or threatened civil, criminal, administrative, regulatory, arbitral or investigative inquiry, action, suit or proceeding and any
notice, demand or claim resulting therefrom or any other claim or demand of whatever nature or kind;
“COVID-19 Relief” means any
support payments, loans, benefits, wage or other subsidies or other incentives provided, in each case, as a result of the COVID-19 pandemic
from any Governmental Authority or financial institution;
“Encumbrance” means any encumbrance,
mortgage, lien, charge, pledge or security interest, whether fixed or floating, or any assignment, lease, option, right of pre-emption,
privilege, usufruct, easement, encroachment, hypothec, pledge, title retention agreement, reservation of title, servitude, right of way,
restrictive covenant, restriction on transfer, right of occupation or other adverse claim or restriction on use, in any case, regardless
of form, whether or not registered or registrable and whether or not consensual or arising by Applicable Laws, including any or any matter
capable of registration, or any other right or claim of any kind or nature whatever which affects ownership or possession of, or title
to, any interest in, or the right to use or occupy, property or assets;
“Governmental Authority” means
any (i) domestic or foreign government, whether national, federal, provincial, territorial, regional, county, state, municipal
or local or other governmental or public department, (ii) any central bank, court, individual arbitrator or arbitration panel, commission,
board, bureau, agency or instrumentality, domestic or foreign, (iii) subdivision or authority of any of the foregoing, (iv) securities
regulatory authority or stock exchange, and (v) quasi-governmental, self-regulatory organization or private body exercising any
regulatory, expropriation or taxing authority under or for the account of any of the foregoing; in each case, having jurisdiction in
the relevant circumstances;
“Liabilities”
means, with respect any person, any and all indebtedness, liabilities, commitments and obligations of any kind of such person, whether
fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or not accrued, asserted or not asserted, known
or unknown, determined, determinable or otherwise, whenever or however arising (including whether arising out of any contract, tort based
on negligence or strict liability or Applicable Laws);
“Losses”
means, with respect to any person, any and all losses, Liabilities, Claims, obligations, judgments, fines, settlement payments, awards
or damages of any kind actually suffered or incurred by such person (together with all reasonably incurred cash disbursements, costs
and expenses, costs of investigation, defence and appeal and reasonable legal fees and expenses), whether or not involving any Third
Party Claim;
“MAI” means Minera Andes Inc.;
“MUX” means McEwen Mining
Inc.;
“person”
means a natural person, partnership, limited partnership, limited liability partnership, corporation, limited liability company, joint
stock company, trust, unincorporated association, joint venture, juridical person or Governmental Authority, and related personal pronouns
have a similarly extended meaning, as the context requires;
“Share Purchase Agreement”
means the share purchase agreement dated October [●], 2023 among the Issuer, MAI, MUX, and the Subscriber;
“Tax Act” means the Income
Tax Act (Canada) as amended from time to time, including the regulations promulgated thereunder;
“Tax Authority” means any
Governmental Authority having jurisdiction over the assessment, determination, collection, administration or imposition of any Taxes;
“Tax Returns” means all returns,
elections, claims for refunds, designations, reports, declarations, statements, bills, schedules, estimates, information returns, forms,
or other written information (whether in tangible electronic or other form) made, prepared or filed or required to be made, prepared
or filed in respect of Taxes under Applicable Laws, including any schedule or attachment thereto, and including any amendment thereof;
“Taxes” means all federal,
national, state, provincial, territorial, county, municipal, or local taxes, whether domestic or foreign, and all duties, imposts, levies,
assessments, tariffs and other charges imposed, assessed or collected by a Tax Authority, including (i) any income, gross income,
net income, gross receipts, net worth, business, royalty, capital, capital gains, goods and services, harmonized sales, value added,
severance, stamp, franchise, occupation, premium, capital stock, sales and use, real property, land transfer, personal property, ad valorem,
transfer, licence, profits, windfall profits, payroll, environmental, employment, employer health, pension plan, anti-dumping, countervail,
excise, severance, stamp, occupation or premium tax, (ii) all withholdings on amounts paid to or by the relevant person, (iii) all
employment insurance premiums, pension plan contributions or premiums, (iv) any fine, penalty, interest, surcharge or addition to
tax, (v) any tax imposed, assessed, or collected or payable pursuant to any tax-sharing agreement or any other contract relating
to the sharing or payment of any such tax, levy, assessment, tariff, duty, deficiency or fee, (vi) claw-backs, repayments, obligations
or other liabilities under or in respect of any COVID-19 Relief and (vii) any tax of a type referred to in this paragraph that is
payable by a person as a result of being a member of an affiliated, consolidated, combined or unitary group, or as a result of succeeding
to such liability as a result of merger, conversion or asset transfer or as a result of any obligation under any tax sharing arrangement
or indemnity agreement;
“Third
Party” means any person other than a party hereto or an affiliate of a party hereto; and
“Third Party Claim” means
any Claim for which the Issuer may have liability to any Subscriber Indemnified Party hereunder is asserted against or sought to be collected
from any Subscriber Indemnified Party by a Third Party.
Exhibit "A"
U.S. INVESTOR QUESTIONNAIRE
Capitalized terms used in this U.S. Investor
Questionnaire (this "Questionnaire") and not specifically defined have the meaning ascribed to them in the Private Placement
Subscription Agreement (the "Agreement") between the undersigned (or, if the undersigned is purchasing the Common Shares
as agent on behalf of a disclosed beneficial purchaser, such beneficial purchaser) (in any case, the "Subscriber") and
McEwen Copper Inc. (the "Issuer") to which this Exhibit "A" is attached.
In connection with the purchase by the Subscriber
of the Common Shares, the Subscriber hereby represents, warrants and certifies to the Issuer that the Subscriber:
| (i) | is acquiring the Common Shares for investment
purposes and for its own account, and pursuant to one or more exemptions from the registration
requirements under applicable U.S. federal and state law; |
| (ii) | is
resident in the jurisdiction set out as at the "Subscriber's Address" set out on
page ii of the Agreement; and |
| (iii) | has not been provided with any offering
memorandum in connection with the purchase of the Common Shares. |
In connection with the acquisition of the Common
Shares, the Subscriber hereby represents, warrants and certifies to, and covenants and agrees with, the Issuer that the Subscriber meets
one or more of the following criteria:
I. SUBSCRIBERS
PURCHASING UNDER THE "ACCREDITED INVESTOR" EXEMPTION
The Subscriber is an "accredited investor"
as such term is defined in Regulation D promulgated under the 1933 Act, by virtue of satisfying the indicated criterion below (YOU
MUST PLACE A CHECK-MARK ON THE APPROPRIATE LINE(S))
¨ |
|
I
certify that I am an accredited investor because I have an individual net worth1, or my spouse or spousal equivalent
and I have a combined net worth, in excess of $1,000,000.
|
¨ |
|
I certify that I am an accredited investor
because I had individual income (exclusive of any income attributable to my spouse or spousal equivalent) of more than $200,000 in
each of the past two years, or joint income with my spouse or spousal equivalent of more than $300,000 in each of those years, and
I reasonably expect to reach the same income level in the current year.2
|
1 For
purposes of this Questionnaire, (i) “net worth” means the excess of total assets at fair market value, including home furnishings
and automobiles, over total liabilities; (ii) Subscriber may not count the value of Subscriber’s primary residence in net worth,
and if the amount of debt on Subscriber’s primary residence exceeds its value, Subscriber must count the excess against net worth;
and (iii) Subscriber does not need to count as a liability debt secured by the Subscriber’s primary residence up to the value of
the residence, unless the amount of such debt exceeds the amount that was outstanding 60 days prior, other than debt resulting from the
acquisition of the primary residence.
2
For purposes of this Questionnaire, “individual income” means adjusted gross income, as reported for Federal
income tax purposes, less any income attributable to a spouse or to property owned by a spouse, increased by the following amounts (but
not including any amounts attributable to a spouse or to property owned by a spouse): (i) the amount of any tax-exempt interest income
under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”); (ii) the amount of losses
claimed as a limited partner in a limited partnership as reported on Schedule E of Form 1040; (iii) the amount of any deduction, including
the allowance for depletion, under Section 611 et seq. of the Code; (iv) amounts contributed to an Individual Retirement Account
(as defined in the Code) or Keogh retirement plan; (v) alimony paid; and (vi) any elective contributions to a cash or deferred arrangement
under Code §401(k). For purposes of this Subscription Agreement, “joint income” means adjusted gross income, as reported
for Federal income tax purposes, including any income attributable to a spouse or to property owned by a spouse, increased by the foregoing
items (i) through (vi), (including any amounts attributable to a spouse or to property owned by a spouse).
¨ |
|
I certify that I am a natural person who
holds, in good standing, one of the following professional licenses: the General Securities Representative license (Series 7),
the Private Securities Offerings Representative license (Series 82), or the Investment Adviser Representative license (Series 65).
|
¨ |
|
I certify that I am a “family client,”
as defined in Rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”),
of a family office (meeting the requirements of a family office as identified below in Section 3 of this Questionnaire), and
whose prospective investment in Issuer is directed by a Family Officer Director (as defined below).
|
¨ |
|
The
Subscriber hereby certifies that it is an accredited investor because it is a bank as defined in 1933 Act §3(a)(2) or a
savings and loan association or other institution as defined in 1933 Act §3(a)(5)(A), acting in its individual or fiduciary
capacity. |
¨ |
|
The Subscriber hereby certifies that it is
an accredited investor because it is a broker-dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934
(“1934 Act”).
|
¨ |
|
The Subscriber hereby certifies that it is
an accredited investor because it is an insurance company as defined in 1933 Act §2(13).
|
¨ |
|
The Subscriber hereby certifies that it is
an accredited investor because it is an investment company registered under the Investment Company Act of 1940 (the “1940
Act”) or a business development company as defined in 1940 Act §2(a)(48).
|
¨ |
|
The Subscriber hereby certifies that it is
an accredited investor because it is a Small Business Investment Company licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958.
|
¨ |
|
The Subscriber hereby certifies that it is
an accredited investor because it is a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality
of a state or its political subdivisions, for the benefit of its employees, and such plan has total assets in excess of $5 million.
|
¨ |
|
The Subscriber hereby certifies that it is
an accredited investor because it is a self-directed plan in which investment decisions are made solely by persons that are accredited
investors
|
¨ |
|
The Subscriber hereby certifies that it is
an accredited investor because it is a private business development company as defined in Section 202(a)(22) of the Advisers
Act.
|
¨ |
|
The Subscriber hereby certifies that it is
an accredited investor because it is (i) an organization described in Code §501(c)(3), a corporation, a limited liability
company, a Massachusetts or similar business trust, or a partnership, (ii) was not formed for the specific purpose of acquiring
the Common Shares, and (iii) has total assets in excess of $5,000,000.
|
¨ |
|
The Subscriber hereby certifies that it is
an accredited investor because it is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring
the Common Shares, whose purchase is directed by a sophisticated person. As used in the foregoing sentence, a “sophisticated
person” is one who has such knowledge and experience in financial and business matters that it is capable of evaluating the
merits and risks of the prospective investment.
|
¨ |
|
The Subscriber hereby certifies that it is
an accredited investor because all of its equity owners are accredited investors.
|
¨ |
|
The Subscriber hereby certifies that it is
an investment adviser registered pursuant to Section 203 of the Advisers Act or registered pursuant to the laws of a state.
|
¨ |
|
The Subscriber hereby certifies that it is
an investment adviser relying on the exemption from registering with the SEC under Section 203(l) or (m) of the Advisers
Act.
|
¨ |
|
The Subscriber hereby certifies that it is
a “Rural Business Investment Company” as defined in Section 384A of the Consolidated Farm and Rural Development
Act.
|
x |
|
The Subscriber hereby certifies that it is
an entity of a type not specifically identified listed in this Questionnaire, that it is not formed for the specific purpose of acquiring
the Common Shares and owns “investments” in excess of $5 million. For purposes of this clause, "investments"
is defined in Rule 2a51-1 adopted under the 1940 Act.
|
¨ |
|
The Subscriber hereby certifies that it is
a “family office”, as defined in Rule 202(a)(11)(G)- 1 under the Advisers Act, that: (i) has assets under management
in excess of $5 million; (ii) is not formed for the specific purpose of acquiring the Common Shares; and (iii) has a person
directing the prospective investment who has such knowledge and experience in financial and business matters so that the family office
is capable of evaluating the merits and risks of the prospective investment in the Common Shares (a “Family Office Director”).
|
The Subscriber agrees that the above representations
and warranties will be true and correct both as of the execution of this Questionnaire and as of the Closing and acknowledges that they
will survive the completion of the issue of the Common Shares.
The Subscriber acknowledges that the foregoing
representations and warranties are made by the Subscriber with the intent that they be relied upon in determining the suitability of
the Subscriber to acquire the Common Shares and that this Questionnaire is incorporated into and forms part of the Agreement and the
undersigned undertakes to immediately notify the Issuer of any change in any statement or other information relating to the Subscriber
set forth herein which takes place prior to the closing time of the purchase and sale of any of the Common Shares.
The Subscriber undertakes to immediately notify
the Issuer of any change in any statement or other information relating to the Subscriber set forth in the Agreement or in this Questionnaire
which takes place prior to the Closing.
By completing this Questionnaire, the Subscriber
authorizes the indirect collection of this information by each applicable regulatory authority or regulator and acknowledges that such
information is made available to the public under applicable laws.
DATED as of _______ day of October, 2023.
|
|
|
Print Name of Subscriber (or person signing as agent of the Subscriber)
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By: |
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Signature |
|
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|
Print Name of Subscriber
(or person signing as agent of the Subscriber) |
Exhibit "B"
term sheet
Binding
Term Sheet for Subscription of Shares
This binding term sheet (this “Term
Sheet”) sets out the principal terms and conditions of a strategic purchase (the “Transaction”) by Nuton LLC
(“Nuton”) of equity from McEwen Copper Inc. (the “Company,” and together with Nuton, the
“Parties”), and constitutes a commitment by the Parties to negotiate in good faith and enter into the applicable definitive
agreements. This Term Sheet is not an exhaustive list of all the terms and conditions of the Transaction. The principal terms and conditions
outlined herein remain subject to further change based on continuing negotiation between the Parties.
Issuer: | McEwen Copper Inc., a private Alberta company, 51.9%-owned by
McEwen Mining Inc. (MUX: NYSE, TSX). |
| |
| The
Company owns a 100% interest in the development stage Los Azules copper property, located
in San Juan, Argentina and a 100% interest in the Elder Creek copper exploration property
in Nevada (Elder Creek is subject to an earn-in agreement with Rio Tinto).
The Company
currently has 28,885,000 common shares outstanding (basic and fully diluted).
Significant
shareholders, in addition to the Parent Company, are: 13.8% Rob McEwen, 14.2% Nuton LLC (a Rio Tinto Venture), 14.2% Stellantis, 3.5%
Victor Smorgon Group, ~2.4% Other Investors.
The significant
shareholders and the number of common shares outstanding will change with the closing of the Company’s forthcoming transaction
with Stellantis.
|
Placement: | 152,615 of the Issuer’s Common Shares (for aggregate
gross proceeds of US$3,967,990) to Investor (the “Shares”), resulting in pro forma
shareholding (post-current equity financing round) in the Issuer of 14.5% |
| |
| Notice of the proposed issuance of the Issuer’s Common Shares having been delivered
to shareholders on or about October 10, 2023, pursuant to the unanimous shareholder agreement of the Issuer dated
August 10, 2021 (the “Unanimous Shareholders Agreement”). |
Subscription Price: |
US$26.00 per common share, being the same price as the current
equity financing round by the Issuer |
|
|
Expected Closing: |
No later than October 19, 2023 |
|
|
Use of Proceeds: |
To advance the Los Azules mining project and for general corporate
purposes |
|
|
Reps and Warranties: |
Customary reps and warranties for a deal of this size |
|
|
|
and nature (and equal to those provided to Stellantis) |
|
|
Rights and Obligations |
Existing Unanimous Shareholder Agreement |
|
|
|
Existing Nuton Collaboration Agreement and Amendment No. 1
and new Amendment No. 2, which extends Nuton’s exclusivity period until February 1, 2025 |
|
|
|
Existing Copper Cathodes and Concentrates Purchase Rights
Agreement |
|
|
Offering Jurisdiction: |
The issuance of the Shares will take place by and/or |
|
|
|
by way of a non-brokered private sale to qualified investors
in all the provinces of Canada, excluding Quebec, to Qualified Institutional Buyers (as such term is defined in the United States
Securities Act of 1933) in the United States and otherwise in those jurisdictions where the Offering can lawfully be made without
subjecting the Company to registration or continuous disclosure requirements in such jurisdictions. Subscribers must be “accredited
investors” (as defined in National Instrument 45-106 - Prospectus Exemptions (“NI 45-106”) |
|
|
Hold Period: |
The Company is not a reporting issuer in any province or
territory of Canada. As such, the Shares will not be transferable under the laws of Canada, except pursuant to applicable statutory
exemptions, until the date that is four months and a day after the date the Company becomes a reporting issuer in any province or
territory of Canada (subject to any control person distribution restrictions) in accordance with National Instrument 45-102 –
Resale of Securities. |
Electronic
Signatures and Counterparts: |
Each party
to this Term Sheet may sign the Term Sheet and transmit the signed copy to the other party hereto who agrees to accept it as if such
document bore original signatures. This Term Sheet may be executed in counterparts, each of which is deemed to be an original and
all of which taken together constitute one and the same instrument. |
Binding Agreement: |
The Parties acknowledge the binding nature of this Term
Sheet and agree to be bound by the obligations set forth herein from the date indicated below. |
If you agree to the foregoing, please sign and
date this Term Sheet in the space provided below to confirm the mutual agreements set forth herein and return a signed copy to Nuton
LLC.
Exhibit "C"
Share purchase agreement
Exhibit "D"
AMENDMENT NO.2 TO THE NUTON COLLABORATION AGREEMENT
Pursuant to Section 7.09 of the Nuton Collaboration
Agreement dated August 30, 2022 (the “NCA”) by and among Nuton LLC, a Delaware Limited Liability Company (“Nuton”
or “Investor”), McEwen Copper Inc., a Colorado Corporation (the “Corporation”), McEwen Mining Inc.
(“McEwen Mining”), a corporation incorporated under the laws of the Province of Alberta, Canada, and Robert R. McEwen,
an individual acting in his personal capacity (“Robert R. McEwen”) (collectively, the “Parties”),
the Parties enter into this Amendment No. 2 to the NCA (“Amendment No. 2”) as of October 18, 2023.
Capitalized terms not defined below have the meanings set forth in the NCA.
WHEREAS,
the Corporation has entered into a subscription agreement (the “October 2023 Subscription Agreement”)
dated as of the date hereof, pursuant to which the Investor will acquire 152,615 Common Shares (as defined herein) in the capital of
the Corporation (the “October 2023 Subscription”).
WHEREAS,
the Parties have agreed to additional rights and obligations as part of the October 2023 Subscription and now desire to amend the
terms of the NCA to reflect such agreement.
WHEREAS,
Section 7.09 of the NCA provides that the NCA may be amended by agreement in writing by each of the Parties.
NOW
THEREFORE, in consideration of the foregoing and the mutual covenants and agreements below and for other good and valuable consideration
to which none of the Parties would otherwise be entitled, the receipt and sufficiency of which is irrevocably acknowledged, it is agreed
by and among the Parties as follows:
| 1) | The end date of the exclusivity described
in Section 4.02 shall be modified to February 1, 2025. |
| 2) | The modification of Section 4.02
in Amendment No. 1 to the NCA shall be terminated. |
[Remainder of page intentionally left
blank]
Exhibit "E"
MATERIAL SUBSIDIARIES
McEwen
Copper Shareholders |
|
Number
of
Shares |
|
Percentage
of
Ownership |
|
|
Minera Andes Inc. |
|
15,000,000 |
|
48.72502842 |
|
FCA Argentina (Stellantis) |
|
6,000,000 |
|
19.49001137 |
|
Nuton LLC |
|
4,100,000 |
|
13.31817444 |
|
Evanachan (Rob McEwen) |
|
4,000,000 |
|
12.99334091 |
|
Other Shareholders |
|
1,685,000 |
|
5.47344486 |
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Exhibit "F"
Los Azules Project
List of Properties:
| |
Name | |
Docket
Number |
1. | |
Azul 1 | |
520-0279-M98 |
2. | |
Azul 2 | |
520-0280-M98 |
3. | |
Mirta | |
1124.0141-M-09 |
4. | |
Escorpio II | |
0154-F28-C-96 |
5. | |
Azul 3 | |
1124.0121-A-06 |
6. | |
Azul Este | |
1124.186-A-07 |
7. | |
Azul Norte | |
1124.668-M-07 |
8. | |
Azul 4 | |
1124.473-M-08 |
9. | |
Escorpio I | |
1124.0153-C-1996 |
10. | |
Escorpio III | |
0155-C-96 |
11. | |
Escorpio IV | |
425.213-C-2003 |
12. | |
Totora | |
414.1324-C-05 |
13. | |
Totora II | |
520.0496-C-99 |
14. | |
Mercedes | |
0644-M-96 |
15. | |
Sofia | |
1124.167-A-10 |
16. | |
Azul 5 | |
1124.119-A-09 |
17. | |
Marcela | |
1124.495-A-09 |
18. | |
Agostina | |
1124.108-A-10 |
19. | |
Rosario | |
1124.169-A-10 |
20. | |
Gina | |
1124.168-A-10 |
21. | |
Cecilia | |
1124.035-A-12 |
22. | |
Grupo Minero | |
1124.553-A-2018 |
23. | |
Road easement for Mercedes mine | |
520-0439-97 |
24. | |
Southern Access Road Easement for Mercedes
mine | |
520-0680-M-96 |
25. | |
Northern Access Road Easement for Azul
1 and Azul 2 mines | |
1124.218-A- 2018 |
26. | |
Power Line Easement | |
1124-354-A- 2018 |
27. | |
Camp Easement “Candadito” | |
1124.660-M-12 |
28. | |
Occupation Easement “Campo
Illanes Mery” | |
1124.544-2022 |
29. | |
“Campo Estomonte” Easement | |
1124.231-A-2010 |
30. | |
“Cortez Monroy Ranch”,
which is a real estate property of 18,000 hectares that ACM acquired from CCM S.A, by means of public deed dated March 3, 2010.
The Cortez Monroy Ranch is located in Calingasta Department and would overlap with the following ACM Mines: “Escorpio IV”,
“Mercedes”, “Azul 1”, “Mirta” and “Azul 2” and partially with the ACM Mines “Totora
I”, “Totora II”, “Escorpio I”, “Escorpio II” “Azul Este” and “Azul Norte | |
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Maps:
Exhibit 99.3
AMENDMENT NO. 2 TO
NUTON COLLABORATION AGREEMENT
Pursuant
to Section 7.09 of the Nuton Collaboration Agreement dated August 30, 2022 (the “NCA”) by and among Nuton
LLC, a Delaware Limited Liability Company (“Nuton” or “Investor”), McEwen Copper Inc., a Colorado
Corporation (the “Corporation”), McEwen Mining Inc. (“McEwen Mining”), a corporation incorporated
under the laws of the Province of Alberta, Canada, and Robert R. McEwen, an individual acting in his personal capacity (“Robert
R. McEwen”) (collectively, the “Parties”), the Parties enter into this Amendment No. 2 to the NCA (“Amendment
No. 2”) as of October 18, 2023. Capitalized terms not defined below have
the meanings set forth in the NCA.
WHEREAS,
the Corporation has entered into a subscription agreement (the “October 2023 Subscription Agreement”) dated as
of the date hereof, pursuant to which the Investor will acquire 152,615 Common Shares (as defined herein) in the capital of the Corporation
(the “October 2023 Subscription”).
WHEREAS,
the Parties have agreed to additional rights and obligations as part of the October 2023 Subscription and now desire to amend the
terms of the NCA to reflect such agreement.
WHEREAS,
Section 7.09 of the NCA provides that the NCA may be amended by agreement in writing by each of the Parties.
NOW
THEREFORE, in consideration of the foregoing and the mutual covenants and agreements below and for other good and valuable consideration
to which none of the Parties would otherwise be entitled, the receipt and sufficiency of which is irrevocably acknowledged, it is agreed
by and among the Parties as follows:
(1) The
end date of the exclusivity described in Section 4.02 shall be modified to February 1, 2025.
(2) The
modification of Section 4.02 in Amendment No. 1 to the NCA shall be terminated.
[Remainder of page intentionally left
blank]
IN WITNESS WHEREOF the Parties hereto have duly
executed this Amendment No. 2 as of the date and year first above written.
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McEwen Copper Inc. |
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Per: |
/s Robert R. McEwen |
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Name: |
Robert McEwen |
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Title: |
Director and President |
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McEwen Mining Inc. |
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Per: |
/s/ Robert R. McEwen |
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Name: |
Robert R. McEwen |
|
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Title: |
Chief Executive Officer |
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/s/ Robert R. McEwen |
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Robert R. McEwen |
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NUTON LLC |
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Per: |
/s/ Adam Burley |
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Name: |
Adam Burley |
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Title: |
CEO & President |
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