Seeking Alpha

Sufiy's  Instablog

Sufiy
42 Followers
1 Following
Send Message
Sufiy is a Seeking Alpha contributor.
My blog:
Sufiy
Back To Sufiy's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

This post has 9 comments:

Track new comments on this article
  •  
    The information contained within this post is incorrect regarding what land-claim is contested by the TNR dispute. Simple fact-checking will show that none of the Los Azules copper deposit is within the contested claim. See the Exhibit 4 of the June 27, 2011 press release. The consequence of which is that however the litigation turns out it will have negligible effect on Minera Andes.
    6 Jul 2011, 02:41 PM Reply Like
  •  
    We are afraid that you are up to a surprise, please see the maps posted above. The contested part of the Los Azules property called Xstrata on the map. Xstrata has optioned that property from TNR Gold and the new claim is related to all that property above the line called Xstrata. As you can see on the map the high grade core of the Los Azules deposit is located on that property.

    In the Minera Andes NR on the Exhibit 4 the land called "contested property" represents Escorpio IV property, not Los Azules and it is part of the litigation as well.

    All relevant information, including the recent Judgment and the New claim with clear description of the properties involved could be found on the link below:

    www.tnrgoldcorp.com/s/...

    Regards,
    6 Jul 2011, 04:00 PM Reply Like
  •  
    I stand corrected, TNR in the new claim does contend that "Xstrata and Minera Andes did not complete the required exploration expenditure required for Xstrata's exercise option on April 23, 2007 to Properties" as per their May 16, 2011 press release.

    However, TNR can claim anything they want but proving it in court will be another thing. I would contend the chance of them being successful in their new claim is low considering the facts.

    On Sept. 6 2007 press release titled "Xstrata PLC Vests its interest in the Los Azules Property, Argentina" within which it states:

    "To earn the 100% option, Xstrata agreed to cash payments totaling US$560,000 and incur exploration expenditures totaling US$1,000,000 by May 15, 2008. ... All cash payments due by May 15, 2008 have been received. All exploration expenditures have been incurred."

    So basically they are contradicting themselves between then and now. Thus, it will be tough for them to make much of a case in court of why they took the money and said the obligations were fulfilled yet 4yrs later they comeback when things are not going their way and claim the obligations were not fulfilled. This is a TNR pressure bluff.

    Now, even if one considers this low probability event to occur and TNR gets 50% of Los Azules, the valuation of Minera Andes (as you have noted above) under such a circumstance would be reduced by 10% from $4.26 to $3.82 ($4.26 - 0.5*$0.88). This is not that much relative to the company's total assets. Consequently, no matter how the litigation turns out the underlying effect on Minera Andes shareholders will be small. Even if the litigation did not exist, the sale of Los Azules would not likely happen until a (pre)feasibility study is completed which will take 1-2 more years. So all those out there worried about this event can relax.

    Regarding the merger with UXG, it is a share exchange or more fundamentally an asset exchange; MNEAF gives up 56% of their assets in exchange for 44% of UXG's assets. Thus, one can not credibly determine the merits of merger unless an independent valuation is performed on UXG as well. Is the market overvaluing or undervaluing UXGs assets? Your entire discussion of the merger terms as equivalent to $2.15 should be revised because it is not correct. Your valuation should be based on fundamentals not efficient markets. Here is an example of a back-of-the-envelope valuation of UXG:

    messages.finance.yahoo...

    Best of luck.
    6 Jul 2011, 08:32 PM Reply Like
  •  
    Thank you,

    You have very important observations.

    Regarding TNR - we think that it is the core of the problem here for MAI's valuation. Not a lot of people do really understand the case, including Rob until this May judge decision.

    www.tnrgoldcorp.com/s/...

    In 2007 TNR was taking everything in a good faith from its partners and accepted the option execution upon presented by Xstrata and MAI expenses. In the recent article by Mineweb you can see that it was found not to be the case according to TNR lawyers and the new claim application:

    sufiy.blogspot.com/201...

    We started to follow this story way back and our first position in MAI was in 2005. We do not know how this litigation will turn out in the end, but can see the clear escalation in the case and the value at stake. Rob was not even in the company when option execution was happening. According to the article above quite a few corners maybe were cut and now Judge has allowed this new claim.

    We think that all shareholders would be in a much better shape if this litigation was resolved long time ago and Minera Andes has received a proper market valuation. Rob talked about Chinese interest even last year and was pumping Los Azules before the TNR's claim became too serious to ignore it.

    TNR has nothing to lose out of this litigation, they are squeezed out of all properties already, but for MAI all these new coming documents ordered by Judge for preparation for the trial can bring new information to all parties of the litigation, which Rob does not even know about now.

    Judge will be to decide in any case, but MAI's shareholders are not in the control of this situation and will have to make a decision based on the distressed valuation of the company.

    Just imaging if the litigation was resolved tomorrow even as per your calculations - what will be the Minera Andes value without any litigation concerns?

    We were really surprised that, particularly Rob, has chosen this way of confrontation and endless litigation in April 2010 when TNR has an attempt to back in. After this merger proposition some MAI shareholders feel really forgotten.


    Regards,
    7 Jul 2011, 05:30 AM Reply Like
  •  
    We are not alone with our question here.

    More thoughts from the MAI shareholders board:


    The litigation will be heard and resolved in Canadian Courts.

    It appears MNEAF, through the comments/actions made and initiated by McEwen, have shot themselves in the foot as far as resolving things privately with TNR are concerned.

    I believe we all agree the current asset quantity numbers for Los Azules will increase. Currently we are talking 10's of billions of $$$ in asset value - Excuse me if UXG and R. McEwen fail to acknowledge that - IMHO the present merger proposal by UXG has thrown the door open, allowing major miners* an opportunity to acquire MNEAF, (including Los Azules) for an excellent, profit ensuring price. The minimum price for MNEAF will be the price set by UXG, $2.15+/- PPS, and the maximum price is any one's guess. Once the 'Special Commitee' sets a price, I believe we will see additional counter offers made by major miners*. Let's all try to remember, we are talking about a world class copper asset, (with a few million ounces of gold and silver thrown in) - IMO even an offer of $5.00+ PPS will not be considered ridiculous when the other assets are factored in. As an excellent example of my reasoning, look at Andean Resources and their Cerro Negro Mine adjacent to MNEAF's San Jose Mine.

    Recent Los Azules development costs mentioned are at or near $2.9 billion**. If the start-up money scares you away, let's face it, you don't deserve the 10's of billions of $$$ in profits that investment will bring in.

    *IMO major miners will approach TNR, 'respectively' acknowledge their right to co-exist on the same planet the rest of us inhabit, and make them an offer. The deal will be for less than what TNR is currently demanding,,, and when the dust settles we will all say, "TNR did okay, even if they didn't get that much. Why didn't MNEAF offer them a deal like that?"

    **One thing we might consider, known gold asset recovery alone from Los Azules more than pays for development - 3,683,313 oz gold equiv*** at $1500 oz = $5,524,969,500

    ***42 oz Silver = 1 oz Gold"

    messages.finance.yahoo...
    9 Jul 2011, 05:56 AM Reply Like
  •  
    Video from Minera Andes AGM.

    sufiy.blogspot.com/201...

    We have found the following comments from Minera Andes the most interesting:

    1. COO of Minera Andes Mr Duff: description of Los Azules as "enormous" and true potential of this project without downplaying it for TNR Gold appetite reduction plan.

    2. Rob McEwen has mentioned the recently announced transaction with Stillwater Mining buying Peregrine Metals at 4 cents per Cu pound in the ground. Peregrine's project is located within 50 km from Los Azules, does not have even PEA and with average grades of 0.3% Copper. How he can justify the buy out price for Minera Andes without even an attempt to clear the situation with TNR Gold and allow the proper valuation of this "world class" copper deposit is a total mystery for us. Shareholders at the AGM remain silent. With resources at Los Azules standing now at 12.5 bln pounds the 4 cent price will bring the valuation of los Azules to 500 mln dollars based on Stillwater Mining bid.

    3. The only questions asked at the AGM were regarding the TNR Gold litigation and one shareholder has started with a very good shot: "Why Minera Andes will not return Escorpio IV to TNR Gold if there is no mineralization?" Rob has passed the mission to explain the litigation to Mr Engelstad. In the end, Nils Engelsdat has described the litigation with TNR Gold as per Minera Andes litigation update. He has mentioned that it is very important to clear the title of the Los Azules and that the timing is not on the Minera Andes side. "Recent delay" with the new claim from TNR Gold will be for another 8-12 months and we did not expect him to tell anyone that it took Judge two days to allow this new "sea changing" claim and that now TNR Gold is claiming to return all of the Solitario properties - Northern Half of the deposit on the map above. One particular comment will be found as a very interesting by the lawyers involved. Nils Engelsdat suggested that everybody should assess the merits of TNR Gold claims by looking at TNR Gold share price - we were always wondering why all sell offs in this junior were coincided with litigation developments in Los Azules case, now we have another food for thought recorded in this webcast from Minera Andes officer. As per the reasons why TNR Gold has discovered only recently the documents supporting its recent claim we will address you to the Recent Judgement by Supreme Court of BC and TNR Gold's Amended Notice of Civil Claim presented below. The article from MineWeb has presented some very interesting circumstances surrounding this case as well.

    sufiy.blogspot.com/201...
    12 Jul 2011, 06:22 PM Reply Like
  •  
    Observation: The TNR offer of $125 M to settle the claims would represent a 10 fold re-valuation of TNR Stock which taps out just over $12 M at this writing.

    The bottom line is that, this WILL BE SETTLED at some point. Approx 98% of all similiar claims are normally settled out of court.
    If the settlement is only half of the above amount, TNR stock should see a 500% jump upon settlement.
    9 Feb 2012, 12:58 PM Reply Like
  •  
    Can not argue with you, Retire Fund.

    We have some update now:


    James Goodwin has wrote an article McEwen Mining Silver Mining, he has background in law and is considering to write about the Los Azules litigation.

    We would like to share this new information.

    James,

    It will be great!

    We have covered this story for years, but nobody in our team is with the law background.

    You can find deposit maps, Los Azules presentations from Minera Andes and links to TNR Gold website where they have provided all latest BC court documents here:

    http://bit.ly/yusMeu

    McEwen mining is very modest with any information on litigation, but you can try your luck there!

    Another interesting information has transpired lately.

    Alan Ambrose former CEO of Minera Andes has sold recently 300,000 shares of McEwen Mining. Before he was selling almost all his stake in Minera Andes.

    He was the key person in all period covering litigation of relationship with TNR Gold and some of his emails with Xstrata are exposed by TNR Gold in latest Claim filing, when Judge has allowed the new claim for Northern Half of the Los Azules deposit to be returned back to TNR.

    It could be nothing it could be everything.

    In any case he is taking his chips off the table, when TNR Gold insiders are buying millions of shares from last fall.

    Rob's problem, as we see it is that it was Alan who was running Minera Andes and get into all that mess with Los Azules and TNR Gold, Rob came only in 2007 into the picture.

    IR at TNR Gold told us that the company is now in discovery stage in preparation to the trial, when more documents and witnesses will be presented.

    We guess Alan Ambrose will be one of them.

    Question is quite simple now: whether Rob can afford to ride blindfolded into the risk of losing up to 2/3 of Los Azules, when his key man in charge at that time sold off his stake and he is supposed to be the line in litigation defense as we imagine?

    Your take on all this will be appreciated.

    Regards,
    10 Feb 2012, 08:45 AM Reply Like
  •  
    Well it looks like Rob knew what he was doing after all. A PEA should be out sometime around the 3rd Q for Los Azules. I think LA will be on loaded sometime this year our by Q12014. Now how is he gonna fund El Gallo phase II? Not sure but he has met all the goals for MUX in 2012 and that includes the uncertainty of LA from a litigation standpoint. I'll continue to support Rob by retaining my holdings and adding when opportunities come.
    6 Apr, 11:12 PM Reply Like
Full index of posts »
Latest Followers

StockTalks

  • TNR Gold: McEwen Mining - Los Azules Copper Project Continues to Grow TNR.v $MUX
    Jan 18, 2013
  • MUX http://su.pr/2lBbMT TNR #Gold Rejects Third Party Proposal And Provides Los Azules Update TNR.v $MUX
    Sep 8, 2012
  • MUX http://su.pr/2sDTPD# McEwen Mining Latest Corporate Presentation - Big Copper Los Azules - TNR Gold Strategy: Resolve Lawsuit!? $MUX
    Sep 8, 2012
More »

Latest Comments


Most Commented
  1. BNN: Los Azules: Rob McEwen on U.S. Gold and Minera Andes Proposed Merger and its valuation tnr.v, ilc.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 (9 Comments)
  2. Lithium Jolt: DBM Energy: This Breakthrough Will Soon Slash EV Prices Drastically ilc.v, tnr.v, czx.v, rm.v, lmr.v, abn.v, asm.v, btt.v, bva.v, bvg.v, epz.v, fst.v, gbn.v, hao.v, jnn.v, ks.v, ktn.v, kxm.v, mgn, mxr.v, rvm.to, svb, ura.v, nup.ax, srz.ax, u (5 Comments)
  3. TNR Gold: Los Azules Litigation: U.S. Gold, Minera Andes CEO urges holders to approve merger mai, uxg, ilc.v, tnr.v, czx.v, rm.v, lmr.v, abn.v, asm.v, btt.v, bva.v, bvg.v, epz.v, fst.v, gbn.v, hao.v, jnn.v, ks.v, ktn.v, kxm.v, mgn, mxr.v, rvm.to, svb, ura (5 Comments)
  4. DBM Energy: KOLIBRI Lithium Batteries Passes Safety Tests. New Independent Range Test Confirms 455 km On One Charge! tnr.v, czx.v, rm.v, lmr.v, alk.ax, lun.to, cgp.v, abn.v (3 Comments)
  5. Canadian Goldbug Stakes His Name On McEwen Mining: The Battle Of Los Azules: TNR Gold Vs McEwen Mining In Copper Showdown With Xstrata Tnr.v, Ilc.v, Czx.v. Mux, Mai.v, Uxg, Xta.l, Abx, Ng, Gg, Bhp, Vale, Fcx, Abx, Ng, Tck, Kgc, Rio, Nem, Swc, Anto.l, (3 Comments)
Posts by Themes
. Lithium, A123, Aben Resources, Agrentina, Alaska, Alternative Energy, Ameri Gold, Ampera, Apple, Applle, argentina, Argentina, Asia, ASPO, Audi, Australia, Auto makers, Bailout, Barrick Gold, Batteries, Batteries. Peak Oil, BBC, BC, Bernanke, better place, Better Place, Bill Gates, BMW, BMW i, BNN, Bravo gold, Brines, Budget deficit, BYD, California, Canada, Canada Junior Mining, Canada Lithium, Canada Zinc Metals, Capacitors, Cars, Charging, Chile, China, china, China , Chris Paine, Clean Air, Clean Air , Clean Tech,
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.