SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ____________________________ Date of Report (Date of earliest event reported): November 30, 2017
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
____________________________
Date of Report (Date of earliest event reported): November 30, 2017
McEWEN MINING INC.
(Exact name of registrant as specified in its charter)
Colorado
(State or other jurisdiction of
incorporation or organization)
001-33190
(Commission File
Number)
84-0796160
(I.R.S. Employer
Identification No.)
150 King Street, Suite 2800
Toronto, Ontario, Canada M5H 1J9
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number including area code: (866) 441-0690
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuan t to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuan t to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule
405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use
the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
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Item 1.01 Entry into a Material Definitive Agreement.
On November 30, 2017, Compañia Minera Pang ea, S.A. de C.V. (“CMP”), a wholly-
owned subsidiary of McEwen Mining Inc. (the “Company”), executed a line of credit agreement
(“Line of Credit”) with Banco Nacional de Co mercio Exterior, S.N.C., a Mexican federal
development banking institution (“Bancomext”). The Line of Credit allows CMP to borrow up to
120,000,000 Mexican pesos (approximately $6,440,000 based on a market exchange rate of 18.63
Mexican pesos to 1 US dollar, as published by Bloomberg on November 30, 2017). Borrowing
under the Line of Credit will be available for one (1) year from November 30, 2017.
Interest payments under the Line of Credit are due quarterly beginning with any borrowing
and a final payment of all principal and accrued interest is due twenty-four (24) months following
the date of the first withdrawal. CMP is permitt ed to prepay any amounts owed without penalty.
The interest rate for each advance is as agreed upon by the parties prior to each advance, and will
be reviewed and adjusted on a quarterly basis.
CMP is permitted to use the proceeds from the Line of Credit (i) to finance up to 90% of
the value added tax (“VAT”) refunds related to the cost of its El Gallo 1 mining project, (ii) as
working capital, and (iii) for other expenses related to CMP’s mining activity. Borrowings under
the Line of Credit are secured by a lien on all VAT collections received by CMP.
The Line of Credit will be immediately due an d payable in the event of a failure to pay
principal or interest when due, or for a breach of other covenants set forth in the Line of Credit.
All amounts due under the Line of Credit have been irrevocably and unconditionally guaranteed
by the Company.
The description of the Line of Credit and the Guaranty in this report is a summary only and
is qualified in its entirety by reference to the Line of Credit, an English summary of which is filed
herewith as Exhibit 10.1 and the Guaranty which is filed herewith as Exhibit 10.2.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits ar e filed or furnished with this report:
10.1 English summary of Line of Credit Agreement dated November 30, 2017.
10.2 Guaranty and Subordination Agreement dated November 30, 2017.
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
McEWEN MINING INC.
Date: December 4, 2017 By: /s/ Andrew Elinesky
Andrew Elinesk y, Senior Vice President and
Chief Financial Office r
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Exhibit 10.1
English Summary of the Line of Credit Agreem ent (“Line of Credit”), dated and finalized
November 30, 2017, between Banco Nacional de Comercio Exterior, S.N.C. a Mexican
federal development banking institution (“Bancomext”) and Compañia Minera Pangea S.A.
de C.V. (“CMP”).
Parties to the Agreement: Banco Nacional de Comercio Exterior, S.N.C. and Compañia Minera
Pangea, S.A. de C.V.
Subject Matter of Agreement : Provision of a Line of Credit granted to CMP by Bancomext in
an amount up to 120 million Mexican pesos.
Use of Proceeds: CMP is obligated to use the Line of Credit funds (i) to finance up to 90% of the
value added tax (“VAT”) refunds related to the cost of the El Gallo 1 project, (ii) as working capital
and (iii) for other expenses related to CMP’s mining activity.
Advances: The Line of Credit will be available for withdrawal for one (1) year beginning from
the date of execution. CMP must provide to Ba ncomext certain required documentation listed in
the Line of Credit five (5) days in advance of any withdrawal.
Term: Any amounts borrowed under the Line of Credit will be payable in one lump sum payment
twenty-four (24) months after the date of the first withdrawal, including principal and any accrued
interest. CMP is permitted to prepay any amounts owed without penalty or commission.
Interest: The interest rate for each advance is as agreed upon by the parties prior to each advance.
The interest rate will be reviewed and adjusted on a quarterly basis. Any accrued interest is
payable quarterly. In case of la te payment of interest due, the rate shall be twice the ordinary
interest rate as agreed between CMP and Bancomext.
Other fees: A fee of 1% of the total Line of Cr edit amount was charged upon execution of the
agreement, together with other banking service f ees for any services CMP may request. There is
no stand-by fee applicable to the line of credit.
Affirmative and Negative Covenants:
• CMP is required to provide to Bancomext all financial statements (interim and audited
annual) on a quarterly basis during the term of the Line of Credit. McEwen is required to
provide to Bancomext all financial statements McEwen files with the US Securities and
Exchange Commission within 10 days of submission;
• CMP must not change its shareholder structure without the consent of Bancomext;
• CMP must notify Bancomext of any circumst ance affecting the recovery of the VAT
balance within two (2) days from being notified by the Tax Administration Service
(“SAT”);
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• CMP shall maintain a bank account (“VAT A ccount”) with Banco Nacional de Mexico
(“Banamex”) to deposit and transfer the VAT amounts; and deliver to Bancomext a copy
of the statement of VAT Account within five (5) days following the end of each month;
• CMP is required to deposit any portion of the VAT refund it collects into the VAT Account;
deposit the VAT applied as reduction by final compensation of each fiscal year into the
VAT Account; and report existence of embargoe s or trade offsets that affect the VAT
refund;
• Maintain a specified reserve for a special mining tax;
• Contract and utilize PwC Mexico as tax advisor;
• CMP shall not instruct SAT to deposit the VAT refunds into any account, other than the
designated VAT Account, without acknowledgment and approval of Bancomext. Further,
CMP shall not file supplementary tax retu rns without acknowledgment and approval of
Bancomext, unless to correct an error. CMP shall not request compensation for other tax
credits or liabilities that may affect the VAT returns claimed and shall not withdraw from
the tax authority any VAT claim filed under the terms of the Line of Credit without prior
written consent by Bancomext unless such wit hdrawal is filed by the same tax authority
and followed by a submission of a VAT claim to replace the original within sixty (60) days
of such withdrawal; and
• Maintain specified books and records and permit inspection by Bancomext.
Joint Obligor and Subordination: McEwen agreed to guarantee all of CMP’s obligations under
the Line of Credit. Further, McEwen agreed to subordinate to Bancomext all of McEwen’s right
to payment and claim of all debt obligations owing by CMP to McEwen (“Subordinated Debt”)
until all obligations are met under the Line of Cred it. If McEwen receive s a Subordinated Debt
payment from CMP, McEwen is required to remit the same to Bancomext within twenty-four (24)
hours of receipt.
Pledge: CMP is obliged to simultaneously enter into a non-dispossessory pledge agreement with
Bancomext, pledging the amounts deposited in the VAT Account.
Insurance: Upon the first advance on the Line of Cr edit, CMP must provide Bancomext with a
copy of an insurance policy that covers risks associated with the mining industry for at least 100%
of the amount granted under the Line of Credit.
Events of Acceleration: The Line of Credit will be deemed due immediately, without notification
required, if CMP does not make timely payments of the principal, interest or commissions; or if
CMP is no longer in good standing regarding tax obligations and labor remittances; if CMP has
been involved in paying bribes to a government or government official in regards to obtaining the
approval of this Line of Credit; or if CMP modifies the shareholde r capital structure in such way
that the major shareholder does no longer hold 51% of the shar es, without prior consent of
Bancomext.
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Payment of expenses: CMP will pay all the expenses generated from the Line of Credit, along
with any related duties, fees, taxes and others. In case of failure to pay, all expenses due will be
subject to a 25% annual ordinary interest on the amount remaining unpaid. Proof of payment must
be provided to Bancomext.
Enforcement: Bancomext has the right to obtain paym ent through commercial enforcement, as
per Article 1395 of the Commercial Code (Codigo de Comercio de Mexico) of any amounts owed
by CMP.
Governing Law and Jurisdiction : The Line of Credit will be exclusively governed by and
construed according to the laws and jurisdiction of Mexico City (formerly the Federal District).
The parties waive any other jurisdiction.
Exhibit 10.2
MCEWEN MINING INC. / BANCO NACIONAL DE COMERCIO EXTERIOR, S.N.C.
GUARANTY AND SUBORDINATION AGREEMENT
This GUARANTY AND SUBORDINATION AGR EEMENT (the “Guaranty) is made
effective as of November 30, 2017, by McEwen Mining Inc., (the “Guarantor”), for the benefit of
El Banco Nacional de Comercio Exterior, S.N.C. (the “Creditor”), located at Periférico Sur 4333,
Col. Jardines en la Montaña, C.P. 14210 Ciudad de México. This Guaranty is being given for the
benefit of the Guarantor and for Compañía Minera Pangea, S.A. de C.V. (the “Debtor”) located at,
Blvd. Antonio Rosales 855, Ote. Altos 12 Col. Morelos C.P. 81460, Guamúchil Sinaloa, Mexico.,
in consideration for the Creditor entering into that certain Contrato de Apertura de Crédito Simple
dated as of November 30, 2017 among the parties hereto (the “Credit Agreement”).
I. OBLIGATIONS
The guaranty set forth herein (this “Guaranty”) is given by the Guarantor to induce the Creditor to
extend credit to the Debtor, or to forbear in the exercise of the Creditor’s right against the Debtor,
and in consideration of the Creditor doing so, a nd for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and further acknowledging that the
Creditor intends to rely on this Guaranty, the Guarantor absolutely, irrevocably and
unconditionally guarantees prompt payment when due of all payments and liabilities of the Debtor
to the Creditor in relation to the Credit Agreement, whether now existing or hereafter incurred (it
being understood and agreed that this Guaranty is a continuing one, except as such duration is
specifically limited elsewhere in th is Guaranty or the Credit Ag reement), whether voluntary or
involuntary and however arising, whether secured or unsecured, absolute or contingent, liquidated
or unliquidated, and regardless of whether the De btor may be liable individually or jointly with
others, regardless of whether recovery upon any such obligation may be or hereafter become barred
or otherwise unenforceable, including interest and charges, and to the extent not prohibited by law,
all costs and attorney’s fees incurred in atte mpting to realize upon this Guaranty. Creditor may
proceed directly against Guarantor without first proceeding against Debtor.
II. DURATION
This Guaranty is continuing and shall not be revoked by the Guarantor. This Guaranty will remain
effective until all obligations guaranteed by this Guaranty and pursuant to the Credit Agreement
are completely discharged.
If the Creditor repays, restores, or returns, in whole or in part, any payment or property previously
paid or transferred to the Creditor in full or partial satisfaction of any Obligation (as defined
below), because the payment or transfer (“Tran sfer”) was declared to be void, voidable, or
otherwise recoverable under any state or federal law, or because the Creditor elects to repay,
restore, or return, in whole or in part, in conne ction with a claim that the Transfer was void, is
voidable, or is otherwise recoverable, then as to any amount that the Creditor repays, restores, or
returns, and as to all reasonable costs, expenses, and attorney’s fees of the Creditor related to the
Transfer or to the repayment, restoration, return, or voidability of the Tr ansfer, the liability of
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Guarantor will automatically and immediately be revived, reinstated, and restored and will exist
as though the Transfer had never been made.
III. NOTICE OF DEFAULT
The Creditor shall not be required to notify the Guarantor of a default by the Debtor in the Debtor’s
commitments to the Creditor before proceeding against the Guarantor under this Guaranty.
IV. CREDITOR PROVISIONS
The Guarantor expressly waives diligence on the part of the Creditor in collection of any part of
the debt or other obliga tion owed to the Debtor. Further, th e Creditor has no du ty to bring suit
against the Debtor (for collection of the debt or other performance which is due) before proceeding
against the Guarantor. The Guarantor waives notice of the acceptance of this Guaranty and of any
and all such indebtedness and lia bility. The Guarantor waives presentment, protest, notice,
demand, or action on delinquency in respect of any such indebte dness or liability, including any
right to require the Creditor to sue or otherwise enforce payment. Until all obligations of the
Debtor to the Creditor have been satisfied in full, the Guarantor waives all rights of subrogation to
any collateral and remedies of the Creditor against the Debtor, and other persons or entities. Any
indebtedness of the Debtor now or hereafter ow ed to the Guarantor is hereby subrogated to the
indebtedness of the Debtor to the Creditor, and such indebtedness of the Debtor to the Guarantor,
if the Creditor so requests, shall be collected, enforced, and received by the Guarantor as trustee
for the Creditor and be paid over the Creditor on account of the indebtedness of the Debtor to the
Creditor, but without reducing or affecting in any manner the liability of the Guarantor under the
provisions of this Guaranty.
V. AUTHORITY TO ALTER OBLIGATIONS
The Guarantor agrees that, without notice to the Guarantor, the Creditor may change the terms of
payment or performance by the Debtor to the Creditor. The Guarantor shall not be released from
any responsibility on the obligations of the Debtor. The Guarantor’s liability under this Guaranty
is several and is independent of any other guar antees. Other guarantees may be released or
modified, with or without consideration, without affecting the liability of the Guarantor.
VI. SUBORDINATION
(1) To the extent and in the manne r hereinafter set forth, Guaran tor hereby subordinates, in
right of payment and claim, all debt obligations now and hereafter owing by Debtor to Guarantor
(the “Subordinated Debt”) to th e obligations of the Debtor to the Creditor under the Credit
Agreement (the “Obligations”):
(a) until the Obligations shall have been paid and satisfied in full in cash, the Guarantor
shall not receive or collect, directly or indirectly, any amount upon the Subordinated Debt;
and
(b) until the Obligations shall have been pa id and satisfied in full in cash, the
undersigned shall not (i) commence any enforcement action of any kind whatsoever against
the Debtor or any of its assets to recover all or any part of the Subordinated Debt, or (ii)