McEwen to acquire Canadian Gold in all-stock deal valued at C$0.35 per share

TORONTO/FLIN FLON - McEwen Inc. (NYSE:MUX) (TSX:MUX), whose stock has surged 42% over the past six months according to InvestingPro data, announced Monday it has entered into a binding letter of intent to acquire Canadian Gold Corp. (TSX-V:CGC) in an all-stock transaction valuing Canadian Gold at C$0.35 per share.

Under the proposed arrangement, Canadian Gold shareholders would receive 0.0225 McEwen shares for each Canadian Gold share, representing a 26% premium to Canadian Gold’s 30-day volume weighted average price as of July 25. Following completion, existing Canadian Gold shareholders would own approximately 8.2% of the combined company. McEwen, currently valued at $613.3 million, maintains a healthy balance sheet with moderate debt levels and strong liquidity, according to InvestingPro metrics.

The transaction would give McEwen full ownership of the Tartan Mine in Manitoba, a high-grade former gold producer with existing infrastructure. The mine, which produced 47,000 ounces of gold between 1987 and 1989, is located near Flin Flon with access to skilled mining workforce and power.

"The existing infrastructure, including the mine ramp, roads, and power, provides an opportunity to restart operations within a relatively short timeframe," said Rob McEwen, Chairman of McEwen Inc., in the press release statement.

Canadian Gold recently expanded the Tartan property’s strike length from 8 kilometers to 29.5 kilometers through two transactions. The site includes a ramp extending 320 meters below surface and the footprint of a former 450 tonne-per-day mill.

The transaction requires approval from two-thirds of Canadian Gold shareholders and a simple majority of minority shareholders. Completion is subject to customary conditions and regulatory approvals, including from the TSX and NYSE.

McEwen and Canadian Gold expect to enter into a definitive arrangement agreement with customary deal protection provisions, including a C$2.2 million break fee payable to McEwen under certain circumstances.

The companies anticipate closing the transaction by the end of 2025, pending shareholder and regulatory approvals. Wall Street analysts maintain a bullish outlook on McEwen, with price targets ranging from $13.75 to $16.00. For comprehensive analysis and additional insights, investors can access the detailed Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.

In other recent news, McEwen Mining reported first-quarter financial results with revenue of $35.7 million and a net loss of $6.3 million, or ($0.12) per share. This marks a decline from the previous year’s first quarter, which had revenue of $41.2 million and a net loss of $20.4 million, or ($0.41) per share. The decrease in revenue was mainly due to lower production, with the company producing 24,131 Gold Equivalent Ounces, compared to 33,037 GEOs in the same period last year. H.C. Wainwright adjusted its outlook for McEwen Mining, lowering the stock price target to $15.50 from $18.00 while maintaining a Buy rating. The firm noted that production at the Gold Bar and San José mines aligned with their plans, including waste removal and a scheduled maintenance shutdown in Argentina. Additionally, John Florek, CEO of Sankamap Metals, has been appointed to McEwen Mining’s Board of Directors. Florek will continue his role at Sankamap while serving on the board. These developments are part of McEwen Mining’s ongoing business activities.

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