Well it looks like reality has set in at Minera Andes and the complications of the legal debate with TNR have put the breaks on the copper spinout. Will be interesting if the court case gets deferred also.
See full link from Minera Andes here.
When Rob originally took a significant stake in Minera Andes I can’t image he wasn’t confident he could resolve the TNR dispute, or had a strong case against it. There are some very interesting statements in the May 17th release by Minera Andes, see here.
“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.”
I must say I’m a bit perplexed by this statement, why would TNR make such a fuss on the details of the 36 month limit if Xstrata added or altered the agreement without TNR’s lawyers being aware? Would seem easy to prove, BUT if TNR lawyers missed the change I think TNR should examine their legal services, isn’t that what you pay these guys for?!
The most recent claim references that $1,000,000 wasn’t spent.
“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.”
If you look at my previous MAI posting here you’ll notice from the information circular the number of holes drilled. It’s certainly not to the level of current drilling and I can’t say what a typical hole costs to drill but I’d find it odd it the number of holes that were drilled by Xstrata and Minera Andes didn’t total $1,000,000.
Disclaimer: The above is strictly my personal thoughts and should not be considered advise in anyway. Please consult a professional for advise. Do your own due diligence. I hold a position in MAI but not TNR.