T.MAI - Los Azules Lawsuit UpdateUpdate on Litigation With TNR Gold Corp.
5/17/2011 9:44:31 AM - Market Wire
TORONTO, ONTARIO, May 17, 2011 (MARKETWIRE via COMTEX News Network) --
Minera Andes Inc. (the "Company" or "Minera Andes") (TSX: MAI)(OTCBB: MNEAF) advises that TNR Gold Corp. and its subsidiary, Solitario Argentina, S.A. (together, "TNR") have amended their pleadings to add a new claim in the ongoing litigation regarding a portion of Minera Andes' Los Azules copper project in Argentina (the "Project"). See "New Claim by TNR" below.
Minera Andes rejects all of TNR's claims and will vigorously defend its position in court. Unfortunately, TNR's amended claim has caused the trial, which was scheduled for June 2011, to be delayed.
Background to the TNR Dispute
-- The Project was, until the fall of 2009, subject to an option agreement
between Xstrata Copper (and certain affiliates, "Xstrata") and Minera
Andes.
-- In the fall of 2009, Xstrata elected not to exercise its option to back-
in to the Project and subsequently transferred all properties then held
by Xstrata (and forming part of the Project) to Minera Andes. Minera
Andes now owns 100% of the Project.
-- Certain portions of the northern part of the Project (the "Subject
Properties") that were formerly held by Xstrata and transferred to
Minera Andes following the termination of the option agreement remain
subject to an underlying option agreement between Xstrata and TNR (the
"TNR Agreement").
-- The TNR Agreement provided that TNR had the right to back-in to up to
25% of the Subject Properties, exercisable by TNR upon the satisfaction
of certain conditions within 36 months of Xstrata exercising its option,
including the completion of a feasibility study.
-- The 36-month period following the exercise of the option expired on
April 23, 2010 and no feasibility study has been completed on the
Project.
-- 1st Claim - October 2008: In addition to an existing unresolved claim
against Xstrata regarding a mineral tenure known as Escorpio IV (located
to the west of and not forming any port of the Los Azules deposit), TNR
claimed in 2008 that the above back-in right is not subject to the 36-
month timeline that appears in the executed agreement. In fact, TNR
claims the 36-month limit was never the commercial intention of the
parties. In particular, TNR claims the 36-month requirement was added by
Xstrata, overlooked by TNR (and their lawyers) and not discovered for a
number of years all the while Xstrata made payments on their option.
-- 2nd Claim - April 2010: In April 2010, TNR claimed they had the right to
back-in to the Subject Properties prior to the expiry of the option
period on account that they could waive the requirement that a
feasibility study be completed. Minera Andes rejected and continues to
reject TNR's ability to back-in to the Project (see Minera Andes' news
releases dated April 1, 2010, and April 26, 2010).
-- The foregoing claims were consolidated into a single action in the fall
of 2010 and were scheduled to go to trial in June 2011. This has been
delayed on account of TNR amending their claim (see below).
New Claim by TNR
-- 3rd Claim - April 2011: In April 2011, TNR proposed, and were
subsequently allowed, to amend their claim to claim that Xstrata and
Minera Andes did not complete the required exploration expenditures of
$1,000,000 required under the TNR Agreement for Xstrata's exercise of
its option on April 23, 2007 to acquire the Subject Properties.
-- On that basis, TNR and Solitario are advancing a claim to seek the
return of the Subject Properties, or alternatively, damages against
Xstrata or Minera Andes.
-- Minera Andes rejects TNR's claim that insufficient expenditures were
made.
About Minera Andes: Minera Andes is an exploration company exploring for gold, silver and copper in Argentina with three significant assets: (i) a 49% interest in Minera Santa Cruz SA, owner of the San Jose Mine in close proximity to Goldcorp's Cerro Negro project; (ii) 100% ownership of the Los Azules copper deposit with an inferred mineral resource of 10.3 billion pounds of 0.73% Cu and an indicated resource of 2.2 billion pounds of 0.52% Cu; and, (iii) 100% ownership of a large portfolio of exploration properties in Santa Cruz province, Argentina, including properties bordering the Cerro Negro project in Santa Cruz Province. The Company had $31 million USD in cash as at February 7, 2011 with no bank debt. Rob McEwen, Chairman and CEO, owns 31% of the shares of the Company. The Company announced on March 17, 2011, its intention to spin-out the Los Azules Copper Project into a new publicly traded company, subject to a number of approvals.
This news release has been submitted by Nils Engelstad, VP Corporate Affairs of Minera Andes Inc.
Technical Information
Technical information about the Los Azules Project in this news release was derived from the report entitled "Canadian National Instrument 43-101 Technical Report Updated Preliminary Assessment, Los Azules Project, San Juan Province, Argentina" with an effective date of December 1, 2010 (released December 16, 2010) prepared by Kathleen Altman, Ph.D., PE,, Robert Sim, P.Geo,. Bruce Davis, PhD, FAusIMM, Richard Jemielita, Ph.D., MIMMM, William Rose, PE, and Scott Elfen, PE (the "Los Azules Report"). Each of the Los Azules Report authors are independent of Minera Andes Inc. and Qualified Persons, each as defined by National Instrument 43-101 "Standards of Disclosure for Mineral Projects" ("NI 43-101"). The Los Azules Report is available under the Corporation's profile on SEDAR (www.sedar.com).
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Mineral Contained
Resource Tonnes Copper Copper Gold Silver
Category (millions) % (Billion lbs) grams/tonne grams/tonne
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Indicated 137 0.73 2.2 0.07 1.7
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Inferred 900 0.52 10.3 0.07 1.7
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Cut-off grade of 0.35% Cu.
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