McEwen Mining Inc. [MUX-TSX, NYSE] has entered into an equity distribution deal with a group of underwriters in connection with a common share offering that could raise up to US$90 million, the company said.
McEwen said the agreement, dated November 8, is with an underwriting group that includes UBS Securities, LLC, BMO Capital Markets Corp., Cantor Fitzgerald & Co., Roth Capital Partners LLC, Wainwright & Co., LLC and Alliance Global Partners.
The company said the offering is being made only in the United States. No sales will be made in Canada whether through the facilities of the TSX or on any other Canadian exchange.
McEwen is planning an offering of up to 47.8 million shares, assuming a sales price of US$1.88, the closing price of the shares on the New York Stock Exchange on November 7, 2018.
“We currently intend to use the net proceeds of this offering to fund working capital and for general corporate purposes,” McEwen said.
McEwen Mining CEO Robert McEwen told Resource World recently that he believes gold is in the early stages of a new bull market. He hopes to capitalize by qualifying his company – McEwen Mining Inc. – for inclusion in the S&P 500. That would require him to build the company’s market cap to around $5 billion, up from $660 million at the time of the Summit.
On Tuesday November 13, McEwen Mining shares were off 2.78% or $0.05 to $1.75. The stock is currently trading in a range of $2.52 and $1.70. There are currently 337.3 million shares outstanding.
It’s key assets are the San Jose Mine in Santa Cruz, Argentina, the Black Fox Mine in Timmins, Ontario, the El Gallo Fenix Project in Mexico, the Gold Bar Mine in Nevada (currently under construction), and the Los Azules copper project.
Robert McEwen, the Bay Street financier who owns 24% of McEwen Mining, has said he hopes to see the company increase its production from around 170,000-185,000 ounces this year to at least 220,000 ounces by 2020.
Due to its location in the heart of Nevada’s Cortez Trend, the company has high hopes for the Gold Bar Mine, which is expected to produce 55,000 ounces of gold next year, increasing to 60,000 ounces in 2020. The initial gold pour at the heap leach operation is scheduled for the first quarter of 2019.
The company recently started a new phase of drilling as part of a $5 million exploration program after announcing a resource update featuring an increase of 92,000 ounces of indicated resources and an additional 82,000 ounces of inferred resources mainly in areas known as Gold Pick and Gold Ridge.