McEwen Mining Announces $60 Million Rights Offering Backstopped by Its Chief Owner, Rob McEwen
TORONTO, ONTARIO--(Marketwire - Oct. 29, 2012) - McEwen Mining Inc. ("McEwen Mining") (NYSE:MUX)(TSX:MUX)announced today that McEwen Mining and its wholly-owned subsidiary, McEwen Mining - Minera Andes Acquisition Corp. ("Exchange Co.") (TSX:MAQ), will launch transferrable rights offerings (the "Rights Offerings").
"I believe a rights offering, versus all other forms of financing, is the most fair to our shareholders. We are giving the Companies' current shareholders who have been supportive and loyal to the Company the first right on this financing. I am personally backstopping this financing for $60 million because I believe McEwen Mining has a bright future," said Rob McEwen , Chairman and Chief Owner.
- Record date/time is set at 5:00 p.m. (EST) on November 8, 2012 (the "Record Date").
- How many shares will I be able to subscribe for? For each share you hold on the Record Date you will receive one (1) subscription right to acquire the same class of shares. For every ten (10) subscription rights of the same class of shares you hold, you will be able to subscribe for one (1) share of that same class of shares (subject to applicable law).
- What will it cost to subscribe for a share? Upon the exercise of ten (10) subscription rights each Common Share will cost US$2.25 or CDN$2.24 (if you reside in Canada) and each Exchangeable Share will cost CDN$2.24. The price difference is reflective of the US$/CDN$ exchange rate.
- Rights Expiry Date: The Rights Offerings will be open until 5:00 p.m. (EST) on December 4, 2012. Holders of subscription rights will need to exercise their subscription rights prior to that time and date ("Expiry Date")
- How much will the Rights Offerings raise? Gross proceeds of approximately $60m.
- What will the funds raised be used for? (1) to fund the advancement of the Company's El Gallo complex; (2) to complete metallurgical studies on the Company's Tonkin project and follow-up work as required; (3) to advance the permitting process and environmental impact study on the Company's Gold Bar project; (4) to further explore the Company's various projects and properties, and (5) for other corporate purposes.
- How many shares will be issued? The Company expects to issue a total of 19,051,679 Common Shares and 7,798,762 Exchangeable Shares representing approximately 10% of our current outstanding Common Shares (assuming the conversion of the Exchangeable Shares issued in the Rights Offerings into Common Shares).
- Will this dilute my percentage share holdings? Your shareholdings will not be diluted if you exercise your rights in full. If your rights go unexercised or you sell your rights (see below), your percentage share holdings will be diluted.
- Can I sell my rights on the NYSE or TSX? Yes, shareholders who do not wish to exercise their subscription rights will have the option of selling their subscription rights to acquire the underlying Common Shares through the New York Stock Exchange or the Toronto Stock Exchange and their subscription rights to acquire the underlying Exchangeable Shares on the Toronto Stock Exchange (subject to the New York Stock Exchange and the Toronto Stock Exchange approving the trading of the subscription rights and the listing and trading of the shares issuable upon the exercise of such subscription rights).
- Can I buy more shares? Perhaps. All shareholders of McEwen Mining and of Exchange Co. will be offered an oversubscription privilege that allows those shareholders that fully exercise their subscription rights the opportunity to acquire, on a pro rata basis, additional Common Shares or Exchangeable Shares, respectively, that remain unpurchased on the Expiry Date.
- When will I receive additional information? A rights certificate and a prospectus or rights offering circular will be mailed to each shareholder of McEwen Mining and Exchange Co. shortly following the Record Date.
- Backstop: Rob McEwen will be subscribing for all the subscription rights made available to him as a result of his 25% ownership in McEwen Mining (includes his Exchangeable Shares), but will not participate in the oversubscription privilege thereunder. In addition, he has agreed to backstop the Rights Offerings in their entirety. This means that if any subscription rights remain un-exercised in the Rights Offerings (including the oversubscription privilege) on the Expiry Date, the unsubscribed Common Shares and Exchangeable Shares will be subscribed for by Rob. This guarantees that the Rights Offerings will be fully subscribed for. The Company will raise approximately US$60 million in gross proceeds from the Rights Offerings.
ABOUT MCEWEN MINING ( www.mcewenmining.com )
The goal of McEwen Mining is to qualify for inclusion in the S&P 500 by 2015 by creating a high quality, high growth, low-cost, mid-tier gold producer focused in the Americas. McEwen Mining's principal assets consist of the San José mine in Santa Cruz, Argentina (49% interest); the El Gallo complex in Sinaloa, Mexico; the Gold Bar project in Nevada, US; the Los Azules Copper project in San Juan, Argentina and a large portfolio of exploration properties in Argentina, Nevada and Mexico.
McEwen Mining has 268,495,751 shares issued and outstanding (comprised of 190,516,797 Common Shares and 77,987,621 Exchangeable Shares). Rob McEwen , Chairman and Chief Owner, owns approximately 25% of the shares of McEwen Mining (assuming all outstanding Exchangeable Shares are exchanged for an equivalent amount of Common Shares). As of June 30, 2012, McEwen Mining had cash and liquid assets of $38 million.
October 29, 2012 (Source: McEwen Mining)