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  • "Big Copper in Argentina" Los Azules: Minera Andes: Update on Litigation With TNR Gold Corp. tnr.v, mai.to, tck, cuu.v, czx.v, lun.to, bwr.to, cs.to, imn.to, ncu.to, tko.to, wrn.to, qux.to, bls.to, bhp, fcx 0 comments
    May 19, 2011 3:40 PM | about stocks: FCX, BVN, AUY, RIO, BHP, TCK, NEM, ABX, MCP, REE, LIT, SQM, FMC


      Minera Andes came out with response to the TNR Gold latest NR on Los Azules litigation TNR Gold Granted Leave to add New Claim over Los Azules project. Stockwatch has called NR from Minera Andes as "Minera Andes faces new litigation claim by TNR Gold" Do not rush to any conclusions and accept all provided information only for your own DD, if you are interested. We are long-standing followers of both companies: TNR Gold and Minera Andes - even before the first copper was hit at Los Azules - you can find a lot of information on this blog: history of this discovery in motion. 
      Always judge for yourself what different facts mean and what kind of implications they will bring to the underlining assets and companies holding them and you will be rewarded accordingly. Do not forget thou, that in any legal case the decision will be done by the Judge, unless involved parties will strike the out-of-the-court settlement.
      Our role here is to share with you, as usual, our educational travel thoughts and this trip is one of the most exciting just by the magnitude of assets involved - "Big Copper in Argentina" as Rob McEwen has nailed it.
      So far litigation team of TNR Gold under the leadership of George Macintosh Q.C. from Farris has delivered two judgements in favor of TNR Gold and its related parties. First one was in February 2011 and related to the third parties in the case - TNR Gold former lawyers.
      Second one is announced now and allowed TNR Gold to bring the new claim forward:
     
    "The New Claim alleges that Xstrata and Minera Andes did not complete the required exploration expenditures required for Xstrata's exercise of its option on April 23, 2007 to acquire the Properties. On that basis, TNR and Solitario advance a claim of breach of contract and intentional interference with economic relations, and seek the return of the Properties, or alternatively, damages as against the defendants or any of them."

     These properties are called Xstrata on the map below. TNR Gold litigation team now seeks in this new claim that Northern half of the Los Azules deposit to be returned to TNR Gold. The level of the case is elevated now by this action from potentially 15% after back-in into the project for TNR Gold (it is 25% for the Northern Half of the deposit, but high grade core is located on TNR Gold property called Xstrata on the map) to the claim that seeks the return of the all Solitario (TNR Gold subsidiary in Argentina) properties, which comprise roughly half of the Los Azules deposit at this moment - above the line on the map called Xstrata.


     Nobody will take these kind of developments lightly just before the trial which was due to commence in June 2011. It took Judge two days to consider the application of George Macintosh litigation team and it was granted to TNR Gold.
      Actually, Minera Andes has warned about this potential situation in its latest MD&A:
       We think that maybe from now on it will be more prudent to call Los Azules not 100% owned project, but subject to ongoing litigation and CIBC has already noticed this litigation before.
      Our take here is that, maybe, during the-so-called discovery stage, when all involved parties in litigation are producing the documents and witnesses are called to testify; new information was discovered, which was not available to TNR Gold at the moment of option execution and it allowed George Macintosh litigation team to convince the Judge that this claim is material enough for the court to consider it during the trial.
      We will provide for your consideration the description of Los Azules and its value by Minera Andes and NRs from both companies. Los Azules is building up in the very important Copper project with word size potential and we can not agree more with Rob McEwen that it will become the major Copper mine one day. The project is very highly leveraged to the Copper price and Rob McEwen has done a great job to increase its size - now we are waiting for another drill results from Minera Andes, which are already long time due with five rigs on the property. 
      We can not speak for Rob McEwen, of course, but think that he has a few nasty surprises from these legal stage of discovery in this trial - potentially how the former management at Xstrata and Minera Andes have been dealing with TNR Gold. But Judge will be to decide in any case in all this situation. Relationship between Minera Andes and Xstrata will be another interesting topic to watch.



    From Minera Andes on Los Azules:

    "The Los Azules Project is a 100% owned advanced-stage porphyry copper exploration project located in the cordilleran region of San Juan Province, Argentina near the border with Chile. It is one of the world's largest undeveloped copper deposits with an indicated mineral resource of 137 million tonnes grading 0.73% copper, equivalent to 2.2 billion pounds of copper, and an inferred mineral resource of 900 million tonnes grading 0.52% copper, equivalent to 10.3 billion pounds of copper. Exploration and infill drilling continues with five drills currently operating at the Los Azules Copper Project...
    An updated preliminary assessment on the Los Azules Copper Project was released in December 2010. It is based on the updated resource estimate announced in June 2010 and higher base case metal price assumptions:

    Using a Copper price of $3.00/lb

    Base case pre-tax Net Present Value ("NPV") is $2.8 billion and the Internal Rate of Return ("IRR") is 21.4%, at a discount rate of 8%

    Life of mine Cash Operating Costs of $0.96/lb of copper net of gold and silver by-product credits

    Initial Capital $2.9 billion

    Capital Payback in 3 years

    Mine life of 25 years

    Forecasted Annual Copper Production: 1st 5 Years: 500 million lbs, Life of Mine: 375 million lbs"


      The drop in TNR Gold share price on the next day of announcement about this new claim in Los Azules litigation was due to the spin out of International Lithium and that 16th of May was the Ex Dividend day for the ILC units.


    Please, do not forget, that we own stocks we are writing about and have position in these companies. We are not providing any investment advise on this blog and there is no solicitation to buy or sell any particular company here. Always consult with your qualified financial adviser before making any investment decisions.



     
    Vancouver B.C.: TNR Gold Corp. ("TNR" or the "Company) advises that following a two-day hearing before the British Columbia Supreme Court, TNR and its subsidiary, Solitario Argentina S.A., have been granted leave to amend their pleadings to add a new claim to the litigation (the "New Claim") over the Los Azules project in Argentina. The litigation involves TNR, Minera Andes Inc., MIM Argentina Exploraciones S.A. ("Xstrata") and related entities. The Los Azules project is an advanced exploration project currently reporting a National Instrument 43-101 compliant Inferred Resource.
     
    In the original Notice of Claim, among other claims, TNR and Solitario seek rectification of a 2004 Exploration and Option Agreement with Xstrata (later assigned to Minera Andes) to restore a right on the part of Solitario to back-in to up to 25% of certain properties constituting the northern half of the Los Azules project (the "Properties") any time within 120 days of the production of a feasibility study. Minera Andes and Xstrata oppose rectification and the other relief sought by TNR and Solitario.
     
    The New Claim alleges that Xstrata and Minera Andes did not complete the required exploration expenditures required for Xstrata's exercise of its option on April 23, 2007 to acquire the Properties. On that basis, TNR and Solitario advance a claim of breach of contract and intentional interference with economic relations, and seek the return of the Properties, or alternatively, damages as against the defendants or any of them.
     
    As a result of the New Claim being added to the litigation, the trial scheduled to commence on June 20, 2011 in Vancouver, BC has been adjourned so that documents relating to the New Claim can be produced. A new date for the trial will be set in due course.
     
     
    The Company is a diversified international metals exploration company focusing on the continued advancement of existing properties and identifying and acquiring new prospective projects. TNR has a portfolio of 18 active projects, of which 9 rare metals projects, including the Mariana Lithium Brine project, will be held or optioned to TNR's wholly owned subsidiary International Lithium Corp. ("ILC") upon completion of a Plan of Arrangement.
    The objective of the Plan of Arrangement is to spin-out TNR's rare metals property interests into a separate public company, ILC. The Plan of Arrangement has been approved by TNR's shareholders, the courts of British Columbia and the TSX Venture Exchange with the Record Date / Effective Date set for May 19, 2011. For further details of the spin-out, please visit International Lithium's website, TNR's information circular dated May 10, 2010 which is available on the SEDAR website at sedar.com and the Company's press release dated May 12, 2011.
    The recent acquisition of lithium, other rare metals and rare-earth elements projects in Argentina, Canada, USA and Ireland confirms TNR's commitment to generating projects, diversifying its markets, and building shareholder value.
     
    On behalf of the board,
     
    Gary Schellenberg
    President"


     
    05/17/2011
    TORONTO, ONTARIO -- (MARKET WIRE) -- 05/17/11 -- 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 (sedar.com).
     
     
    ----------------------------------------------------------------------------
    Mineral Contained
    Resource Tonnes Copper Copper Gold Silver
    Category (millions) % (Billion lbs) grams/tonne grams/tonne
    ----------------------------------------------------------------------------
    Indicated 137 0.73 2.2 0.07 1.7
    ----------------------------------------------------------------------------
    Inferred 900 0.52 10.3 0.07 1.7
    ----------------------------------------------------------------------------
     
    Cut-off grade of 0.35% Cu.
     
    Caution Concerning Forward-Looking Statements: This press release contains certain forward-looking statements and information. The forward-looking statements and information express, as at the date of this press release, the Company's plans, estimates, forecasts, projections, expectations or beliefs as to future events and results. Forward-looking statements and information involve a number of risks and uncertainties, and there can be no assurance that such statements will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements. Risks and uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the forward-looking statements include, but are not limited to, factors associated with completion of the Arrangement (including the expected benefits thereof), fluctuations in the market price of precious metals, mining industry risks, risks associated with foreign operations, risks related to litigation which if resolved adversely to Minera Andes could materially impact the Corporation's value and interest in and ability to develop the Los Azules project, property title, the state of the capital markets, environmental risks and hazards, uncertainty as to calculation of mineral resources and reserves and other risks.
     
    Readers should not place undue reliance on forward-looking statements or information. The Company undertakes no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. See the Company's Annual Information Form for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information. All forward-looking statements and information made in this news release are qualified by this cautionary statement.
     
    The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this news release, which has been prepared by management.
     
    Contacts:
    Minera Andes Inc.
    Nils Engelstad
    Vice President, Corporate Affairs
    Toll-Free: 1-866-441-0690 or Tel: 647-258-0395
    647-258-0408 (FAX)
    info@minandes.com
     
    Source: Minera Andes Inc."
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