McEwen Mining going to private investors for $95 Million

McEwen Mining Inc. has announced the pricing of $95 million in aggregate principal amount of its convertible senior notes due 2030 in a private placement to qualified institutional buyers. The company has also granted the initial purchasers an option to acquire an additional $15 million in notes within 13 days of the initial issuance. The offering is expected to close on February 11, 2025, subject to customary closing conditions.

Key Transaction Highlights:

• $95 million raised (potentially $110 million if the additional notes are fully exercised).

• Initial conversion price of $11.25 per share, a 30% premium over McEwen Mining’s closing share price of $8.65 on February 6, 2025.

• Capped call transactions to synthetically increase the effective conversion price to $17.30 per share, representing a 100% premium.

• 5.25% interest rate with semi-annual payments.

• Strategic benefits, including refinancing of $20 million in higher-interest debt.

The notes will be senior, unsecured obligations of McEwen Mining, paying interest semi-annually on February 15 and August 15, beginning August 15, 2025. The maturity date is August 15, 2030, unless converted, redeemed, or repurchased earlier.

Prior to May 15, 2030, the notes will be convertible only under specific circumstances. After that date, noteholders may convert at any time until two trading days before the maturity date. The initial conversion rate is 88.9284 shares per $1,000 principal amount, translating to an $11.25 conversion price, subject to adjustments.

McEwen Mining may redeem the notes for cash starting August 21, 2028, if its stock price reaches 130% of the conversion price for at least 20 trading days within a 30-day period.

Use of Proceeds:

• $13.1 million allocated for capped call transactions.

• Debt repayment of existing obligations under the company’s credit agreement.

• General corporate purposes.

McEwen Mining has also entered into privately negotiated capped call transactions to mitigate dilution upon conversion of the notes. If the additional notes are sold, the company will use part of the proceeds to enter into additional capped call transactions.

The notes will be available only to qualified institutional buyers and will not be registered under the Securities Act. They cannot be sold in the U.S. unless an applicable exemption applies.

About McEwen Mining McEwen Mining Inc. is a gold and silver producer with operations in Nevada, Canada, Mexico, and Argentina. The company also holds a 46.4% interest in McEwen Copper, which owns the Los Azules copper project in Argentina. McEwen Mining is focused on increasing the productivity and lifespan of its assets, aiming to enhance shareholder value. Chairman and Chief Owner Rob McEwen has a $225 million personal investment in the company and takes an annual salary of $1.

By Kevin Vincent, Senior Contributing Editor to Mining Life Online and Mining Life & Exploration News.

Tags: Northern Ontario / Deals & Financial / Gold / All Articles