Minera Andes AgM Update
(July 11th, 2011)
I arrived at 1 King about 15 minutes before the AGMAmesame room as was used for the Lexam VG Gold AGM. Got to the bottom of the elevators at the same time as some other shareholders as well as Rob. The doors opened at which point Rob said, “shareholders first”. A couple of us got in followed by Rob, the doors closed and Rob joked that we could likely have the meeting in the elevator.
At the meeting I ended up sitting beside Michael Smedley which I’m sure most would recognize from BNN interviews. In person he’s the same as on TV, an interesting character for sure. Andrew Elinesky, the MAI Treasurer was there as well as a few US Gold people I recognized.
Nils, VP corporate affairs, conducted the formal meeting which was uneventful. Following this the CFO, Perry Ing did a review of the financials, again nothing unusual but he did draw attention to the fact that they have earned about $31million from the silver mine but only received about $11 million to date undue to some details on how loans work in Argentina. Perry noted the cash flow would catch up in the next 6-12 months.
Jim Duff, COO, gave a presentation on the status of Minera Andes’s projects. He highlighted the new silver veins discovered that has extended the mine life by 3-4 years to 12 years. He also noted that they are close enough to current mining to be relatively easy to bring online. He, and later Rob noted that Hothschild have agreed to increase the exploration budget from about $6-7 million which is a step in the right direction but they’d like to see more. Jim noted that as a result of the strike Q2 numbers would likely be down a bit. They lost 16 days in total due to the strike as well as a day or so shutdown due to a fatality at the mine. One has to wonder if the strike was triggered by the death?
Jim followed up with a discussion on the recently announced Los Azules holes. He brought up a side showing a large target area just to the west of the southern half of Los Azules that was labeled ‘Titan’ (slide at 25min into webcast). It would seem to imply this entire area will be a significant focus of Los Azules drilling going forward. Jim followed with a discussion of a target drilled for silver on 100% owned Minera Andes claim directly north of Goldcorp’s Cerro Negro project but implies no successes yet (see slide about 20:30min into the webcast below). I’m glad to see some net new exploration finally starting where Minera Andes has no strings attached like in the other properties. He also noted that the other exploration properties would have drilling in the months ahead.
Rob concluded with his standard presentation on gold in relation to the DOW and spent significant time “selling” the merits of the US Gold / Minera Andes merger. He seemed to be going somewhat out of his way with multiple slides on the merits. One slide in particular shows the increases in gold, silver, McEwen Junior Gold Index, Minera Andes and US gold since the announcement on June 14th (about 47:30min into the webcast). He noted Minera Andes was up the most followed by US Gold. His comment was that that would seem to imply the market likes the deal. My comments are that that is an extremely short timeframe and conveniently gold has had a bit of a rough time in the past few weeks. Grasping at straws if you ask me, but I’ll give him the benefit of the doubt for the time being. There was no firm commitment on a timeframe for a vote which seemed odd, given the indication of October-ish 2011 in past comments. Given his impatient nature I would have expected him to push for October to do a deal. He did indicate there would be a first vote with McEwen not included given he’s an interested party followed by a secondary vote with his say included. More details required.
Rob also noted Peregrine takeover works out to $.04/lb but just after the deal Stillwater dropped 22%, which would work out closer to about $.03/lb after the drop. He was basically warning that premiums can be an illusion (comments at 41 min. in the webcast).
A shareholder brought up the TNR dispute, Nils noted that the date for the court case is 8-12 months out and that TNR has been very good at delaying tactics. Nils noted that they have talked to litigation council and ‘believe ‘ they have a very strong case. He noted the case would take place in BC courts. I hope they’re right, going to court has it’s risks attached.
I stopped for my Minera Andes dividend, an open bar, and talked to a few other shareholders. Many seem to be counting on a resumption of the copper spinout and Rob continuing to be involved. I do think the spin out will happen after the legal TNR dispute is resolved, and that Rob will insure it gets a good start but I don’t expect him to stick with it, he’s a gold and silver guy and that, I believe, is his focus. You never hear Rob commenting on a future copper price target.
2010 AGM webcast. (good till Oct 2011)