Update from Minera Andes as of Apr 4th with regard to the question of if the ‘court and shareholder approval’ mentioned in the press releases in any way relates to the court base involving TNR and MAI:
From: “Andrew Elinesky”
To: “Bob Ahrens”
Hello again Bob,
The court approval relates strictly to the spin off transaction and we would like to have the special meeting at the same time as the AGM so as to avoid having two meetings but at the moment that is a tentative deadline which may need to move if major hurdles such as court approval and a tax ruling are not cleared in sufficient time.
All the best,
From: Bob Ahrens
Sent: April-02-11 11:45 PM
To: Andrew Elinesky
Subject: RE: Shareholder question on Los Azules 2010 expenses
One more question which you may not be able or allowed to answer but I’m asking it anyways.
When in your Mar. 17th release that the spinoff of the copper assets would required ‘Court and shareholder approval’, can you say if this ‘Court’ approval relates strickly to the act of spinning off the new business or does ‘court’ approval also relate to the MAI vs TNR dispute?
I’ll understand if you can’t comment.
Also can you say if the special meeting for the spinoff with will happen at the annual meeting?
I’ve been reviewing the Minera Andes Information Form for 2010 released on SEDAR.com on Mar. 30th, 2011. Yes I’ve read the whole freaking document! I’ve been trying to get a better perspective on the legal dispute between TNR and Minera Andes.
On page 48 it outlines Los Azules drilling which is as follows:
2004 4 holes 864m
Minera Andes drilling
2003-2004 9 holes 2064m
2005-2006 11 holes 2602m
2006-2007 18 holes 3583m
2007-2008 19 holes 5489m
2009-2010 31 holes 10,818m
Later on page 58 TNR claims Xstrata did not complete the required exploration expenditures in order to exercise the option to acquire the properties underlying the Solitario (former TNR name) agreement. No idea what those expenditures were expected to be but Xstrata definitely was light in it’s drilling compared to Minera Andes since then.
From Minera Annual Information Form (Dec 31, 2010) (page 58):
“Certain of the properties formerly held by Xstrata and transferred to the Company pursuant to the (Los Azules) Option Agreement remain subject to an underlying option agreement between Xstrata and Solitario Argentina S.A. (“Solitario”), whereby Solitario had the right to back-in up to 25% of the properties covered by the underlying option agreement (the “Solitario Agreement”),exercisable by Solitario upon the satisfaction of certain conditions within 36 months of Xstrata exercising the option, including the production of a feasibility study. Xstrata exercised the option pursuant to the Solitario Agreement effective April 23, 2007. The 36-month period expired on April 23, 2010 without a feasibility study having been completed. TNR has also subsequently claimed that Xstrata (and Minera Andes) did not complete the required exploration expenditures to exercise the option to acquire the properties underlying the Solitario Agreement. TNR, by consequence, claims properties underlying the Solitario Agreement should be returned to TNR.”
The background history section on page 45 gives some great insight into how this all played out and the reference to the 25 percent back-in right.
From the Minera Andes Annual Informatio Form (Dec 31, 2010) (page 45)
There are no formal records of exploration in the project area prior to 1980. The only important active project in the area prior to 1980 was the El Pachón porphyry copper project, now owned by Xstrata, which is located about 90 kilometers south of Los Azules. Evidence of prospecting (small trenches or pits) exists on some of the concessions. In the mid-1980’s through the mid-1990’s, Battle Mountain Gold Company (BMG) explored the area and discovered a large hydrothermal alteration zone associated with dacite porphyry intrusions and stockwork zones. BMG drilled 24 reverse circulation holes during 1998 and 1999 looking for a high-level gold deposit. Low-grade
porphyry copper style mineralization was detected in the drilling, but BMG was focused on gold exploration. Concurrently during the mid-1990’s Minera Andes acquired concessions in the area based on regional exploration and Landsat imaging. Minera Andes’ claims adjoin the BMG claims to the south. In December 2003, Minera Andes initiated an exploration program at Los Azules, including geologic mapping and sampling, ground magnetic and induced polarization geophysical surveys and core drilling. Minera Andes’ initial core drilling intersected porphyry-style copper mineralization, and in 2006 drilling intersected high grade intervals up to 1.6 percent copper over 221 meters and one percent copper over 173 meters in separate holes. By the end of
the 2009-2010 field season, 87 diamond drill holes totaling 24,457 meters have been drilled at Los Azules. In addition, 24 reverse circulation holes were drilled by BMG and four holes were drilled by Mount Isa Mines (MIM) totaling 6,545 meters.
After BMG merged with Newmont 2000, the BMG properties were acquired by Solitario Resources, a Canadian junior exploration company (now called TNR Resources), and an individual from San Juan named Hugo Bosque. MIM optioned the Solitario property in May 2004. Xstrata succeeded MIM, and in April 2007 it exercised its option to acquire Solitario’s concessions. In 2007, Minera Andes (as operator) and Xstrata entered into an option agreement that consolidated Minera Andes’ and Xstrata’s properties. In October 2009, Xstrata declined to continue
to participate in the project, and as a result Xstrata assigned its properties to Mineral Andes, and the company now owns 100 percent of the project. TNR, as successor to Solitario, has lodged a legal action in the Supreme Court of British Columbia claiming that it has the right to back-in to up to 25 percent of the Solitario concessions and challenging the valid exercise of the option over Solitario’s concessions. Minera Andes believes that TNR’s claim is without merit and is contesting TNR’s claim.”
As to how this plays out, time will tell but at least this informs us much better from an investor perspective. See Sedar.com to lookup full document