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McEwen Mining announces $80 million funding for copper project

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(Kitco News) - McEwen Mining (NYSE: MUX; TSX: MUX) announced today that it is raising $80 million for its Los Azules copper project in Argentina.

Executive chair and chief owner, Rob McEwen, described Los Azules to be the world's 25th largest copper producer and a lowest-cost quartile producer during a recent shareholders meeting.

The financing is a non-brokered private placement financing of up to 8,000,000 common shares of a 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.

Los Azules is being kept separate from McEwen Mining.

"[The financing] 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," stated Rob McEwen, Chairman and Chief Owner in a news release.

"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."

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