McEwen prices public offering, stock tumbles to 52-week low

Shares of McEwen Mining (NYSE, TSX: MUX) stumbled on Wednesday, falling by as much as 17% to a 52-week low of C$1.64 after the company announced that it has priced its planned public offering.

The Toronto-based gold miner intends to raise $50 million through the offering of 37.75 million units, with each unit priced at $1.32 and consisting of one common share and one half of one common share purchase warrant. Each full warrant is exercisable at $1.72 per share over the next five years.

The offering price is well below where McEwen shares have traded recently, weighing on Wednesday’s stock slide. Market capitalization of the company has declined to C$723 million.

The company has also granted the underwriters a 30-day option to purchase up to an additional 5.66 million shares and/or additional warrants to purchase up to 2.83 million shares at the public offering price, less the underwriting discounts and commissions.

McEwen said it would use the net proceeds from the offering for current mining projects and exploration prospects, as well as operating capital and general working capital.

The offering is expected to close on or about November 22.