MUX creates McEwen Copper and announces $80 million Private Placement

"This is a significant and exciting moment for McEwen Mining because of the value it should release. Currently, the market appears to be giving us little value for our Los Azules copper deposit, despite its impressive size and robust economics at present copper prices. Unfortunately, the scale of the required project development expenditures would require McEwen Mining to issue a massive number of additional shares. This share dilution would not be acceptable. However, we believe that by putting our copper assets, Los Azules and Elder Creek, into a separately listed company exclusively focused on copper, we can create an attractive copper investment vehicle. It will allow us to raise the money necessary to fund progress towards the rapid development of one of the world's largest copper resources. We expect that McEwen Copper will compare very favorably to other single-asset copper developers. Within 12 months of closing this Offering we plan to take the company public. In the interim, we will be investigating ways to make a share distribution to you, MUX shareowners, of a portion of McEwen Mining’s holdings of McEwen Copper in a tax-efficient way," stated Rob McEwen, Chairman and Chief Owner.

McEwen Mining Inc. has announced a non-brokered private placement financing of up to 8,000,000 common shares of its wholly-owned subsidiary McEwen Copper Inc. at a subscription price of US$10.00 per common share, for gross proceeds of up to US$80 million (the "Offering"). McEwen Copper currently has 17,500,000 common shares outstanding.

A lead order to purchase 50% of the Offering has been committed by Rob McEwen, Chairman and Chief Owner of McEwen Mining. His investment corporation, Evanachan Limited, will purchase 4,000,000 common shares of McEwen Copper for US$40 million and is prepared to close on this portion of the Offering immediately.

Subscription for the remaining 4,000,000 common shares is available to qualified accredited investors, subject to a US$2 million minimum investment and certain other conditions. The securities sold in the Offering are private and subject to transfer restrictions until such time they become listed on a public exchange.

Pursuant to this transaction, McEwen Copper will hold a 100% interest in the Los Azules copper project in San Juan, Argentina, and a 100% interest in the Elder Creek exploration property in Nevada, subject to a 1.25% net smelter return (NSR) royalty on both assets payable to McEwen Mining.

Assuming completion of the full amount of the Offering, McEwen Mining will be the controlling shareholder and own 68.6% of McEwen Copper. The new investors, including Rob McEwen, will own 31.4%.

McEwen Copper intends to pursue an initial public listing within 12 months from the closing of this Offering. Proceeds from the Offering will be used exclusively by McEwen Copper to advance the Los Azules project to a pre-feasibility study, construction of a new year-round access road to the project, exploration drilling at Los Azules and Elder Creek, environmental permitting and community relations, and general corporate purposes.

 

The proposed Offering was reviewed and approved by the disinterested members of the board of McEwen Mining. McEwen Mining will retain management direction over McEwen Copper and has engaged consultants with significant expertise and experience developing and operating copper mines in South America.

Los Azules is an advanced large-scale porphyry copper exploration project located in the prolific Andean Cordillera copper belt, 56 miles (90 km) north of Glencore’s El Pachón project and near the border with Chile. In 2017, McEwen Mining completed a positive Preliminary Economic Assessment (PEA) on the project, which is available at www.mcewenmining.com/operations/los-azules. Elder Creek is an early-stage copper-gold porphyry exploration project located in Northern Nevada 6 miles (9 km) from SSR Mining’s Marigold Mine Complex.

The Offering is expected to close by July 30, 2021.

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