McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is pleased to announce that it has amended its $50 million senior secured term loan facility to gain financial flexibility and entered into a new $15 million unsecured subordinated promissory note.

“Reduced cash flow from operations in Q1 has placed McEwen Mining in a challenging position which we needed to overcome. I have invested a further $15 million by way of an unsecured Promissory Note so that we can implement corrective action. It was also beneficial to extend the maturity of our Term Loan to enable us to invest in production growth and mine life extensions before debt retirement. Results from operations are expected to improve starting with the current quarter and resume the positive trend we experienced during 2021. Gold Bar achieved our production target in Q1 and Los Azules has made some important advances,” said Rob McEwen, Chairman and Chief Owner. “The deviation from our financial forecast for Q1 was caused by lower production at the Fox Complex and at San José. Loss of manpower due to COVID-19 was a significant factor at both mines. Very cold weather and equipment failures also occurred at the Fox mill.”

The maturity of the Term Loan was extended to March 31, 2025, the amortization period and certain covenants were also amended, and any security interest over McEwen Copper Inc. and the Los Azules copper project was removed. The principal amount of the loan and reference rate remain unchanged. The amendment will eliminate the need to repay $10 million of principal in 2022 and $40 million in 2023 and allow McEwen Copper to raise additional financing as well as pursue its IPO.

In consideration for the extension of the Term Loan and other amendments, Sprott Private Resource Lending II (Collector), LP will be paid bonus interest in the form of 588,235 restricted common shares of the Company. Evanachan Limited, an entity wholly-owned by Rob McEwen, and a lender of half the principal outstanding under the Term Loan, has waived any right to receive bonus interest.

In addition, the Company has entered into a $15 million Promissory Note with Evanachan Limited maturing on September 30, 2025, and bearing interest of 8% payable monthly in arrears. The Promissory Note will be used for working capital purposes and can be repaid by the Company at any time without penalty.

ABOUT MCEWEN MINING

McEwen Mining is a diversified gold and silver producer and explorer focused in the Americas with operating mines in Nevada, Canada, and Argentina. It also has a large exposure to copper through its subsidiary McEwen Copper, owner of the Los Azules copper deposit in Argentina.