Acquisition Proposal was announced prior to the Lexam
shareholders meeting, Lexam shareholders do not approve the
Arrangement Agreement, and Lexam enters into a transaction
resulting in the merger, business combination, or similar
transaction, including the sale or acquisition of a material
portion of Lexams assets within 12 months of the termination of
the Arrangement Agreement.

The Company has agreed to pay a termination fee of $2,100,000
in certain circumstances, including if the Arrangement
Agreement is terminated because (i)the Company fails to
complete the Arrangement on or prior to May23, 2017 when all
other closing conditions have been met or (ii)the Company
materially breaches its representations, warranties or
covenants such that closing conditions would not be met.

In order to comply with NYSE rules, Mr.McEwen will not be
entitled to receive shares of the Companys common stock in
exchange for his Lexam Shares in an amount representing more
than 1% of the currently issued and outstanding shares of the
Company without obtaining the prior approval of the Companys
shareholders. The Company will seek such shareholder approval
at its 2017 Annual Meeting of Shareholders. If such shareholder
approval is not obtained, the Company will pay for such excess
shares in cash.

The Arrangement Agreement has been included to provide
investors and shareholders with information regarding its
terms. It is not intended to provide any other factual
information about the Company. The representations, warranties
and covenants contained in the Arrangement Agreement were made
only for purposes of that agreement and as of specific dates,
were solely for the benefit of the parties to the Arrangement
Agreement, may be subject to limitations agreed upon by the
contracting parties, including being qualified by confidential
disclosures made for the purposes of allocating contractual
risk between the parties to the Arrangement Agreement instead
of establishing these matters as facts and may be subject to
standards of materiality applicable to the contracting parties
that differ from those applicable to investors. Shareholders
are not third-party beneficiaries under the Arrangement
Agreement and should not rely on the representations,
warranties and covenants or any descriptions thereof as
characterizations of the actual state of facts or condition of
the Company or Lexam or any of their respective subsidiaries or
affiliates. Moreover, information concerning the subject matter
of the representations, warranties and covenants may change
after the date of the Arrangement Agreement, which subsequent
information may or may not be fully reflected in the Companys
public disclosures.

A copy of the Arrangement Agreement is attached to this report
as Exhibit2.1. The foregoing description of the Arrangement
Agreement is qualified in its entirety by reference to the
Arrangement Agreement.

Item 3.02 Unregistered Sales of Equity
Securities

As described in Item1.01 of this report, the Company has agreed
in the Arrangement Agreement that, if the Plan of Arrangement
becomes effective and its acquisition of the issued and
outstanding common shares of Lexam is thereby completed, the
Company will issue 0.056 of a share of the Companys common
stock for each issued and outstanding Lexam Share, or
approximately 12,689,709 shares of the Companys common stock.
If issued, such shares will represent approximately 4% of the
total number of shares of common stock of the Company.

Section3(a)(10)of the Securities Act of 1933, as amended (the
Securities Act), exempts from the registration requirements
under that Act the issuance of securities which have been
approved, after a hearing upon the fairness of the terms and
conditions on which all persons to whom it is proposed the
securities will be issued shall have the right to appear, by
any court expressly authorized by law to grant such approval.
Under the Arrangement Agreement, Lexam will submit the Plan of
Arrangement to the

Court for interim order permitting notice to all persons to
which the shares of the Companys common stock will potentially
be issuable. Following the requisite approval by the Lexam
shareholders and a hearing at which such persons will have the
right to appear, Lexam will seek a final order from the Court
as to the fairness of the Plan of Arrangement. Such final order
is a condition to the consummation of the Plan of Arrangement
and the issuance of the Companys shares of common stock. The
Company therefore anticipates that, if the Plan of Arrangement
becomes effective under the terms and conditions described in
the Arrangement (including the receipt of such final order from
the Court), the issuance of up to 12,689,709 shares of the
Companys common stock to the Lexam shareholders will be exempt
from the registration requirements under the Securities Act to
Section3(a)(10)thereof.

Item 9.01 Financial Statements and
Exhibits.

(d) Exhibits. The following exhibits are filed with this
report:

Additional Information About the
Arrangement

As discussed above, in connection with the Arrangement, the
Company intends to seek approval from its shareholders at the
Companys 2017 Annual Meeting of Shareholders to issue shares to
Robert R. McEwen, Chairman and Chief Executive Officer of the
Company, as required by the rulesof the New York Stock
Exchange. The Company intends to filea preliminary proxy
statement and a definitive proxy statement with the SEC to seek
such approval. SHAREHOLDERS ARE URGED TO READ THE DEFINITIVE
PROXY STATEMENT WHEN IT BECOMES AVAILABLE AND ANY OTHER
RELEVANT MATERIALS FILED WITH THE SEC CAREFULLY IN THEIR
ENTIRETY BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH
RESPECT TO THE ARRANGEMENT BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE ARRANGEMENT AND THE PARTIES THERETO.

The definitive proxy statement will be mailed to the Companys
shareholders seeking, among other things, their approval to
issue shares exceeding 1% of the currently issued and
outstanding shares of the Companys common stock to Mr.McEwen in
consideration for his shares of Lexam, in accordance with the
terms of the Arrangement. The Companys shareholders may also
obtain a copy of the definitive proxy statement free of charge
once it is available by directing a request to: McEwen Mining
Inc. at (647)258-0395, at 150 King Street West, Suite2800,
Toronto, Ontario, Canada M5H 1J9. In addition, the preliminary
proxy statement, the definitive proxy statement and other
relevant materials that will be filed with the SEC will be
available free of charge at the SECs website at www.sec.gov or
shareholders may access copies of such documentation filed with
the SEC by visiting the Investor Relations section of the
Companys website at http://www.mcewenmining.com.

The Company and its respective directors, executive officers
and other members of management and employees, under SEC rules,
may be deemed to be participants in the solicitation of proxies
in connection with the Arrangement. Information regarding the
names, affiliations and interests of certain of the Companys
executive officers and directors in the solicitation will be
available in the preliminary proxy statement and definitive
proxy statement relating to the Arrangement to be filed with
the SEC. Information about the Companys executive officers and
directors is also available in the Companys definitive proxy
statement relating to its 2016 Annual Meeting of Shareholders
filed with the SEC on April20, 2016.