McEwen Copper Announces $70 Million Financing to Advance the Los Azules Copper Project
McEwen Copper, a wholly-owned subsidiary of McEwen Mining (NYSE and TSX: MUX), has announced a non-brokered private placement financing to raise up to US$70 million. This will involve issuing up to 2,333,333 common shares at a price of US$30.00 per share. Key participants include McEwen Mining, committing up to US$14 million, and Rob McEwen, committing up to US$5 million. The financing aims to support the development of the Los Azules copper project, with a bankable feasibility study expected by the end of Q1 2025. Pre-existing shareholders have anti-dilution and pre-emptive rights, and the securities from this offering are subject to transfer restrictions until publicly listed. Post-offering, McEwen Mining and Rob McEwen's ownership will adjust to 45.8% and 12.5% respectively.
- Up to US$70 million raised through non-brokered private placement.
- Significant commitment from McEwen Mining (US$14 million) and Rob McEwen (US$5 million).
- Financing to advance Los Azules copper project, with feasibility study due Q1 2025.
- Transfer restrictions on securities until public listing.
- Potential ownership dilution for existing shareholders.
Insights
The announcement of the $70 million financing for McEwen Copper is significant. This new capital will be used to advance the Los Azules copper project, specifically aiming towards a bankable feasibility study by Q1 2025. Such studies are critical in the mining industry as they provide detailed analysis of a project's economic viability, which can influence investor decisions and future funding opportunities.
From a financial perspective, the involvement of McEwen Mining and Rob McEwen themselves in the financing, committing 27% of the total offering, suggests strong insider confidence in the project's potential. This can be reassuring for potential investors, as it implies that those with the most information about the project are willing to commit significant capital.
However, the anti-dilution and pre-emptive rights of existing shareholders could complicate the final investment amounts and the private nature of the securities means they will be subject to transfer restrictions. Long-term retail investors should consider the potential dilution and how it may affect their holdings.
In summary, this financing round solidifies the company's commitment to advancing the Los Azules project, with the potential to enhance the company's future revenue streams once the feasibility study confirms economic viability.
The copper market has been garnering considerable attention due to its critical role in the renewable energy sector and electrical infrastructure. The Los Azules copper project is positioned to benefit from this broader market trend. If the feasibility study proves favorable, McEwen Copper could tap into a lucrative market, potentially leading to substantial long-term gains.
The current market dynamics also point towards a growing demand for copper, driven by increased production of electric vehicles (EVs) and renewable energy systems, both of which require substantial amounts of copper. This contextual backdrop makes the timing of McEwen Copper's financing round particularly strategic.
That said, the $2 million minimum investment requirement for qualified accredited investors may limit the pool of potential investors, impacting how quickly the remaining shares are subscribed. This could delay the project's progress if not enough capital is raised promptly.
Overall, the financing news is aligned with the favorable market conditions for copper and positions McEwen Copper to capitalize on this trend, provided it can navigate the complexities of the investment conditions and shareholder rights.
TORONTO, June 24, 2024 (GLOBE NEWSWIRE) -- McEwen Mining Inc. (NYSE and TSX: MUX) announces a non-brokered private placement financing of up to 2,333,333 common shares of its wholly-owned subsidiary McEwen Copper Inc. at a subscription price of US
Lead orders to purchase
This Offering will be used to advance work on a bankable feasibility study for the Los Azules copper project, which is scheduled for publication by the end of the first quarter (Q1) of 2025.
Subscription for the remaining 1,700,000 common shares is available to qualified accredited investors, subject to a US
Prior to the Offering, ownership in McEwen Copper is of 14,768,000 common shares (
About McEwen Copper
McEwen Copper Inc. holds a
Los Azules ranked the 8th largest undeveloped copper deposits in the world (Mining Intelligence, 2022). Its current copper resources have increased to 10.9 billion pounds at a grade of
A bankable feasibility study (FS) is underway with completion, planned by the end of Q1 2025. Los Azules is being designed to be distinctly different from other copper mines, consuming significantly less water, emitting much lower carbon and progressing towards carbon neutral by 2038, and being powered by
This news release and the information included herein do not constitute an offer to buy or the solicitation of an offer to subscribe for or to buy any of the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
CAUTION STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This news release contains certain forward-looking statements and information, including "forward-looking statements" within the meaning of the private securities litigation reform act of 1995. The forward-looking statements are intended to be subject to the safe harbor provided by section 27a of the securities act of 1933, section 21e of the securities exchange act of 1934 and private securities litigation reform act of 1995.
This news release contains certain forward-looking statements and information, including "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements and information expressed, as at the date of this news release, McEwen Mining Inc.'s (the "Company") estimates, forecasts, projections, expectations or beliefs as to future events and results. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, risks and contingencies, and there can be no assurance that such statements and information will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements and information. Risks and uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the forward-looking statements and information include, but are not limited to, effects of the COVID-19 pandemic, fluctuations in the market price of precious metals, mining industry risks, political, economic, social and security risks associated with foreign operations, the ability of the corporation to receive or receive in a timely manner permits or other approvals required in connection with operations, risks associated with the construction of mining operations and commencement of production and the projected costs thereof, risks related to litigation, the state of the capital markets, environmental risks and hazards, uncertainty as to calculation of mineral resources and reserves, and other risks. Readers should not place undue reliance on forward-looking statements or information included herein, which speak only as of the date hereof. The Company undertakes no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. See McEwen Mining's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and other filings with the Securities and Exchange Commission, under the caption "Risk Factors", for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information regarding the Company. All forward-looking statements and information made in this news release are qualified by this cautionary statement.
The NYSE and TSX have not reviewed and do not accept responsibility for the adequacy or accuracy of the contents of this news release, which has been prepared by management of McEwen Mining Inc.
ABOUT MCEWEN MINING
McEwen Mining is a gold and silver producer with operations in Nevada, Canada, Mexico and Argentina. In addition, it owns approximately
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FAQ
What is the purpose of McEwen Copper's recent US$70 million financing?
How many common shares will McEwen Copper issue in the recent financing?
What is the minimum investment required for the remaining shares in McEwen Copper's financing?
What will be McEwen Mining's ownership percentage in McEwen Copper after the offering?
When is the feasibility study for the Los Azules copper project expected to be published?
