McEwen to acquire 31% interest in Paragon Geochemical

Executive Summary

• McEwen Inc. has signed agreements to acquire an approximately 31% equity interest in Britannia Mining Solutions Inc. (operating as Paragon Geochemical Laboratories Inc.), a provider of advanced analytical services and PhotonAssay technology.
• The transaction involves a private placement valued at $15.3 million, payable in McEwen shares, making McEwen Paragon's largest shareholder.
• McEwen will appoint Ian Ball to Paragon's board and retain the right to nominate one additional board member, while Paragon aims to become publicly traded.

Key Details

• Transaction Structure: McEwen acquires ~31% interest in Paragon (Britannia Mining Solutions Inc.) via private placement.
• Consideration: Total investment of $15.3 million.
• Share Acquisition:
  • 648,002 shares purchased from Britannia Life Sciences Inc.
  • 226,286 shares purchased directly from Paragon.
• Pricing: Deemed price of $17.50 per Paragon share, payable in shares of McEwen.
• Strategic Rationale: Paragon is a leader in PhotonAssay technology, described as a rapid, accurate, and non-destructive method for assaying gold, silver, and base metals, offering faster turnaround and improved accuracy over traditional fire assay.
• Operational Integration: McEwen currently employs PhotonAssay in exploration programs at the Fox complex (Ontario, Canada) and the Gold Bar mine complex (Nevada, USA) to optimize drilling strategies and accelerate exploration timelines.
• Paragon Profile:
  • ISO 17025:2017-accredited geochemical laboratory.
  • Currently operates three laboratories with plans to construct eight additional sites in key mining regions over the next two years.
  • Aiming to become publicly traded.
• Governance Changes:
  • Ian Ball (Vice-Chairman of McEwen) will join Paragon's board upon listing.
  • McEwen retains the right to nominate one additional board member.
  • McEwen becomes Paragon's largest shareholder upon completion.

Notable Quotes

• "Paragon is recognized for its deployment of PhotonAssay, a technology that McEwen believes is poised to become the new industry standard for assaying precious and base metals, with Paragon aiming to be one of the world's leading service providers."
• "PhotonAssay is a rapid, accurate and non-destructive method for assaying gold, silver and base metals that is transforming industry standards. It offers significant advantages over traditional fire assay techniques, including faster turnaround times, improved accuracy and enhanced environmental safety."