Toronto, ON – February 7, 2025 – In a strategic move to strengthen its financial position, McEwen Mining Inc. (NYSE: MUX) has announced the pricing of an upsized offering of $95 million in convertible senior notes due in 2030. The offering is being made in a private placement to qualified institutional buyers under Rule 144A of the Securities Act of 1933. The transaction is set to close on February 11, 2025, pending customary closing conditions.

1. Key Aspects of the Offering

The sale of these convertible senior notes marks a significant capital-raising initiative for McEwen Mining, with the potential to increase the total offering to $110 million if initial purchasers fully exercise their option to acquire an additional $15 million in notes. Here are some critical elements of the offering:

Attractive Pricing: The initial conversion price is set at $11.25 per share, which represents a 30% premium over the latest closing price of $8.65 per share as of February 6, 2025.

Capped Call Transactions: The company has entered into separate capped call transactions that could effectively raise the conversion price to $17.30 per share, a 100% premium over the current share price.

Debt Refinancing: The offering is anticipated to provide strategic benefits, including refinancing $20 million of existing higher-interest debt alongside offering an attractive coupon rate of 5.25%.

2. Structure and Terms of the Notes

The notes will be senior, unsecured obligations of McEwen Mining and will carry a semi-annual interest payment schedule starting August 15, 2025. The maturity date for the notes is set for August 15, 2030, unless they are converted, redeemed, or repurchased earlier.

Conversion Features

The notes will be convertible only under specific circumstances prior to May 15, 2030, and will be convertible at any time until two trading days before the maturity date thereafter. The initial conversion rate will allow holders to convert $1,000 of notes into approximately 88.9284 shares of common stock, subject to adjustments in accordance with specific events.

3. Use of Proceeds

McEwen Mining estimates that the net proceeds from the offering will be around $91.3 million, or approximately $105.9 million if the full option is exercised. The funds are intended for the following purposes:

Capped Call Overlay: Approximately $13.1 million for capped call transactions.

Debt Repayment: A portion to reduce outstanding borrowings under the company’s existing credit agreement.

General Corporate Purposes: Remaining funds will be allocated for general operational needs.

4. Market Impact and Forward-Looking Statements

The company has also initiated capped call transactions with financial institutions, designed to mitigate potential dilution of its common stock upon conversion of the notes. This move is expected to influence the market price of McEwen Mining's common stock as the market evaluates the deal and its implications.

While the company is optimistic about the offering, it has issued a caution regarding forward-looking statements related to the transaction. The outcome of the offering, including the potential impacts of market conditions and other uncertainties, remains a variable that could influence actual results.

5. Conclusion

McEwen Mining Inc.’s upsized offering of convertible senior notes represents a strategic financial maneuver aimed at optimizing its capital structure. By securing favorable conversion terms and leveraging existing debt refinancing opportunities, the company is positioning itself for future growth and stability. This offering will be closely watched by analysts and investors alike, as it could significantly impact the firm’s operational trajectory and stock performance in the coming years.

For further inquiries, McEwen Mining can be contacted at their Toronto office or through the investor relations team.

Contact Information

150 King Street West

Suite 2800, PO Box 24

Toronto, ON, Canada

M5H 1J9

Toll-Free: (866)-441-0690

Direct: (647)-258-0395

Email: info@mcewenmining.com

Original press release