McEwen Mining Announces Flow-Through Financing at $14.36 (Cdn$19.59) per Share a 19% Premium to Market
McEwen Mining (NYSE: MUX, TSX: MUX) announced a flow-through financing at $14.36 (Cdn$19.59) per share, a 19% premium to market. The financing, divided into two parts, aims to raise US$22.0 million (Cdn$30,035,790) to fund exploration and development at the Fox Complex in Ontario. Part 1 targets Canadian Exploration Expenses with 643,000 shares at US$15.56 (Cdn$21.23) per share, while Part 2 targets Canadian Development Expenses with 890,000 shares at US$13.49 (Cdn$18.41) per share. The closing is expected on June 14, 2024, subject to customary conditions including TSX and NYSE approvals. Cantor Fitzgerald is leading the syndicate of placement agents.
- Financing offers a 19% premium to market price.
- US$22.0 million (Cdn$30,035,790) to be raised for exploration and development.
- Focus on Fox Complex, a key area for production growth.
- Comprehensive use of proceeds for qualified Canadian Exploration and Development Expenses.
- Final prospectus supplement to be filed with SEC and Canadian securities regulatory authorities.
- Closing is subject to customary conditions, including regulatory approvals, which introduces uncertainty.
- Potential shareholder dilution with the issuance of 1,533,000 new shares.
- Net proceeds after fees are expected to be US$20.9 million (Cdn$28,534,000), reducing the effective capital raised.
- Execution risks associated with exploration and development activities.
Insights
The announcement from McEwen Mining regarding their flow-through financing pricing at a premium is a noteworthy development. The company is securing
One key point to consider is the allocation of funds towards the exploration and development at the Fox Complex. This strategic focus could drive future production growth and potentially improve McEwen Mining’s operational efficiencies. It's essential for investors to monitor the execution of these plans closely, as delays or cost overruns could impact the returns on this investment. Additionally, flow-through shares come with a premium and the offering at a higher price indicates investor confidence in McEwen’s prospects.
However, one should also consider the market conditions and the broader industry context. The mining sector is highly cyclical and subject to volatility in commodity prices, which can impact profitability. Additionally, the success of the Fox Complex development will be important since a significant part of the raised funds will be directed there.
From a market perspective, McEwen Mining’s decision to offer a public financing at a premium reflects strong market sentiment towards its projects and growth potential. The flow-through financing mechanism is particularly advantageous in Canada, where it allows companies to pass tax deductions for exploration expenses directly to investors, thereby reducing the after-tax cost of investments. This often encourages equity investment in resource exploration companies.
Flow-through shares can significantly impact the liquidity and share price of the issuing company. In the short term, this financing could create upward pressure on McEwen Mining’s stock price due to the premium and the perceived vote of confidence from institutional investors. However, investors should remain cautious of potential dilution effects, as an increase in the number of shares outstanding can dilute earnings per share.
In the long term, the use of funds for the Fox Complex suggests a commitment to growth and expansion, which might enhance the company’s production capabilities. Successful exploration can lead to the discovery of new resources, boosting reserves and future revenue streams. Nonetheless, the inherent risks associated with mining exploration – such as uncertain outcomes and regulatory hurdles – should not be overlooked.
CANADIAN BASE SHELF PROSPECTUS IS ACCESSIBLE, AND PROSPECTUS SUPPLEMENT WILL BE ACCESSIBLE ON SEDAR+ WITHIN TWO BUSINESS DAYS
TORONTO, May 28, 2024 (GLOBE NEWSWIRE) -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) (“McEwen”) is pleased to announce it has priced a public financing to fund continued exploration and development at the Fox Complex in the Timmins region of Ontario, primarily focused on exploration drilling and the development of an underground access ramp from surface to mine the gold resources of Stock East and West. This represents the next area of production growth at the Fox Complex.
The proceeds of this financing will be used exclusively for qualifying Canadian Exploration Expenses (within the meaning of subsection 66.1(6) of the Income Tax Act (Canada)) (“CEE”) and Canadian Development Expenses (within the meaning of subsection 66.2(5) of the Income Tax Act (Canada)) (“CDE”), including:
Part 1 (CEE) of the financing consists of a US
Part 2 (CDE) of the financing consists of a US
(Part 1 (CEE) and Part 2 (CDE) together being the “Offering”).
The Offering of 1,533,000 flow-through common shares for aggregate gross proceeds of US
Cantor Fitzgerald Canada Corporation and Cantor Fitzgerald & Co. is leading a syndicate of placement agents for the Offering.
The Offering is being made pursuant to a shelf registration statement on Form S-3 (File No. 333- 275324) that was previously filed by McEwen in the United States and subsequently declared effective by the Securities and Exchange Commission (“SEC”) on January 2, 2024 and also pursuant to a preliminary and final multi-jurisdictional disclosure system prospectus (the “Canadian Base Shelf”) in Canada. McEwen will file a final prospectus supplement with the SEC in connection with the Offering and will file a Canadian final prospectus supplement to the Canadian Base Shelf under the “northbound” multi-jurisdictional disclosure system with securities regulatory authorities in each of the provinces of Canada other than Quebec (collectively, the “Prospectus Supplement”). The Offering is being made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. The Base Shelf Prospectus is, and the Prospectus Supplement will be (within two business days from the date hereof), filed with the SEC and will be available on the SEC’s website at http://www.sec.gov or by visiting the SEDAR+ website at www.sedarplus.com. Copies of the Prospectus Supplement, when available, may also be obtained in the U.S. by contacting Cantor Fitzgerald & Co., Attention: Capital Markets, 110 East 59th Street, 6th Floor, New York, NY 10022, or by e-mail at prospectus@cantor.com, or in Canada an electronic or paper copy of the Base Shelf Prospectus, the Prospectus Supplement, and any amendment to such documents may be obtained without charge by contacting Cantor Fitzgerald Canada Corporation, Attention: Equity Capital Markets, 181 University Avenue, Suite 1500, Toronto, ON, M5H 3M7 by emailing ecmcanada@cantor.com by providing the contact with an email address or address, as applicable.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
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, including but not limited to the expected use of proceeds of the Offering and the timing of the closing of the Offering. 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 the 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
CONTACT INFORMATION
150 King Street West
Suite 2800, PO Box 24
Toronto, ON, Canada
M5H 1J9
Relationship with Investors:
(866)-441-0690 Toll free
(647)-258-0395
Mihaela Iancu ext. 320
info@mcewenmining.com
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