McEwen unveils US$55million sale of Ontario assets to Discovery

McEwen Inc. [MUX-TSX, NYSE] said it has signed a US$55 million deal to sell its Fuller and Paymaster properties in the Timmins, Ont., area to a unit of Discovery Mining Ltd. [DSV-TSX, DSVSF-OTCQX].  The agreement includes a surface rights only parcel which is also located in Timmins. The Fuller property is wholly owned by a McEwen subsidiary which also holds a 60% stake in the Paymaster joint venture with the balance held by Discovery Mining subsidiary Dome Mine Ltd.

McEwen said the transaction will monetize non-core assets and provide McEwen with US$55 million of additional capital which the company plans to invest across its operations and development projects to support its goal fo producing 250,000 to 300,000 gold equivalent ounces annually by 2030 with minimal to no share dilution.

The Fuller and Paymaster properties are part of McEwen’s broader Fox Complex land position in the Timmins mining district. Fuller covers approximately 210 hectares and Paymaster approximately 179 hectares. Upon completion, Discovery will acquire McEwen’s full interest in both assets and consolidate 100% ownership of the Paymaster joint venture. At the Fox Complex, McEwen’s operations and development will remain centred on Froome, Stock and Grey Fox, as previously outlined in the company’s growth strategy.

Under the agreement, the purchase price will consist of US$5.0 million payable in cash and US$50 million payable in common shares of Discovery. The number of Discovery shares to be issued will be determined based on the five-day volume weighted average share price on the TSX two business days before the closing date. The transaction is expected to close following the satisfaction of customary closing conditions, including TSX approval for the issuance of Discovery shares.

On Friday, Discovery Mining shares were unchanged at $11.48 and currently trade in a 52-week range of $13.43 and $4.58. McEwen shares rose 4.90% or $1.20 to $26.70.

Discovery is advancing plans to more than double its annual gold production to over 500,000 ounces annually via investment in the company’s Porcupine assets. “In addition to further exploration upside, a key benefit of the land being acquired is that it provides an ideal location for potential new processing and tailings facilities to support large-scale production from our Dome Mine,’’ said Discovery President and CEO Tony Makuch. “Dome has an 11 million-ounce inferred resource and we are working on plans to resume operations over the next five years using the existing Dome Mill for processing,” he said. “Longer term, we will look to operate the mine at a significantly higher level of producing using a new processing facility to be located at the adjacent purchased assets.’’

Meanwhile, Discovery has entered into a royalty purchase agreement with Franco-Nevada Mining Corp. [FNV-TSX, NYSE]. Under the deal, the parties have agreed to amend the terms of the royalty agreement entered into as of April, 2025 in relation to the Porcupine Operations, extending Franco-Nevada’s existing royalty interest to the purchased assets in exchange for $8.0 million, payable to Discovery.