Announcement • Aug 20

McEwen Mining Inc. (NYSE:MUX) completed the acquisition of remaining 96.7% stake in Timberline Resources Corporation (OTCPK:TLRS) from a group of shareholders.

McEwen Mining Inc. (NYSE:MUX) entered into a non-binding letter of intent to acquire remaining 96.7% stake in Timberline Resources Corporation (OTCPK:TLRS) from a group of shareholders on February 12, 2024. McEwen Mining Inc. (NYSE:MUX) entered into a definitive agreement to acquire remaining 96.7% stake in Timberline Resources Corporation (OTCPK:TLRS) from a group of shareholders for $20.7 million on April 16, 2024. Pursuant to the terms, Timberline shareholders will have the right to receive 0.01 of a share of McEwen’s common stock for each share of Timberline’s common stock (the “Exchange Ratio”), representing a value of $0.102 per Timberline share, calculated based on the 20-day volume weighted average trading price of McEwen’s shares on the NYSE at the close on April 15, 2024. Each Timberline warrant outstanding immediately prior to the closing of the transaction will remain outstanding and be converted into a warrant to acquire McEwen shares based on the Exchange Ratio. Each Timberline stock option outstanding and in-the-money immediately prior to the closing of the Transaction will automatically vest and be converted into the right to receive McEwen shares at the Exchange Ratio less the exercise price per stock option; all other outstanding Timberline stock options will be cancelled. McEwen currently owns 6.25 million Timberline shares representing approximately 3.3% of Timberline’s basic common shares outstanding. Excluding McEwen’s existing ownership, McEwen expects to issue approximately 1.84 million shares on closing for a transaction value of $18.8 million. The Exchange Ratio represents an undiluted equity transaction value (on a 100% basis) of approximately $19.4 million. Concurrent with the execution of the agreement, McEwen and Timberline have entered into an interim financing arrangement whereby McEwen has agreed to loan Timberline up to approximately $500,000 to fund working capital and corporate costs of Timberline through the anticipated closing of the proposed transaction. Upon termination of the merger agreement under the circumstances, Timberline would be required to pay McEwen a termination fee of $400,000. The closing of the transaction is subject to customary conditions, including receipt of necessary regulatory and stock exchange approvals, approval from Timberline’s shareholders holding a majority of its outstanding shares, the absence of any order or law prohibiting consummation of the merger, the effectiveness of the Registration Statement on Form S-4 to be filed by McEwen pursuant to which the McEwen shares to be issued in connection with the merger will be registered with the U.S. SEC, and the authorization for listing on the New York Stock Exchange and the Toronto Stock Exchange of the McEwen Shares to be issued or issuable in connection with the merger. McEwen Mining’s and Timberline’s board of directors have unanimously approved the merger agreement. Timberline’s Board recommended that Timberline’s shareholders vote in favour of the transaction. The directors, officers and two principal shareholders of Timberline, holding shares reflecting approximately 40% of Timberline's aggregate outstanding shares, have entered into voting and support agreements with McEwen, pursuant to which they have agreed, among other things, to vote their shares in favour of the transaction. Timberline Stockholders Approve Merger with McEwen Mining at special meeting on August 16, 2024. It is anticipated that the transaction will close in the third quarter of 2024. As of July 17, 2024, Timberline anticipates that the transaction will close in August 2024. As per updated filing, The closing of the transaction is expected to occur on or about August 19, 2024. Cormark Securities Inc. acted as financial advisor to Timberline and provided fairness opinion to Timberline Board. Brian Boonstra of Davis Graham and Stubbs LLP acted as legal advisor to Timberline. George A. Hagerty and Richard Aftanas of Hogan Lovells US LLP acted as legal advisors to McEwen Mining. Nevada Agency and Transfer Company is the transfer agent for Timberline. Cormark Securities Inc. will receive $317,728 for financial opinion services. McEwen Mining Inc. (NYSE:MUX) completed the acquisition of remaining 96.7% stake in Timberline Resources Corporation (OTCPK:TLRS) from a group of shareholders on August 19, 2024. As a result of the Transaction, the shares of Timberline will cease trading on, and will be delisted from, the TSX Venture Exchange and the OTCQB Venture within five business days.

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McEwen Mining Inc. (NYSE:MUX) completed the acquisition of remaining 96.7% stake in Timberline Resources Corporation (OTCPK:TLRS) from a group of shareholders.

McEwen Mining Inc. (NYSE:MUX) entered into a definitive agreement to acquire remaining 96.7% stake in Timberline Resources Corporation (OTCPK:TLRS) for $20.7 million.

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