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  • US Gold: Special situation: Mineweb: Los Azules Litigation TNR Gold vs Minera Andes - Court Documents 1 comment
    Dec 5, 2011 6:30 PM | about stocks: UXG, BHP, TCK, RIO, ABX, NEM, BVN, VALE, AUY, TM, FCX

    These documents, found by Mineweb in the litigation case between TNR Gold and Minera Andes, are public now. In order to have one of the the "largest litigation cases in the history of BC Supreme Court" you need one of the largest Copper deposits in the world, very big ambitions and bunch of emails describing the way of thinking how to get it all and "take out of the game" the junior partner. Now US Gold shareholders will join the litigation lawyers' party after the merger with Minera Andes. We continue to monitor the situation and implications for the newly listed in the US McEwen Mining after the merger.


    Mineweb: Minera Andes drops plans to spin-out Los Azules because of a court case with TNR Gold questioning its full ownership of the project. 



    "...A court hearing to consider TNR Gold's claims to the northern area of Los Azules through its back-in right had previously been set for this June, the same month Minera Andes had intended to spin out Los Azules into a separate company. McEwen told Mineweb in an interview Friday he had hoped those legal proceedings would have been underway before Minera Andes shipped off Los Azules. But in mid-May TNR Gold threw a wrench into those plans. It gave notice that the BC Supreme Court would allow it to add a new claim to the case alleging Xstrata and Minera Andes did not meet required exploration expenditures to exercise the option agreement governing the property in 2007. The implication: TNR Gold believes it still owns the entire northern portion of Los Azules, and not just a 25-percent back in right... 


    Moreover, TNR Gold charged, Xstrata never intended to produce a feasibility study. To that alleged end, in its application to advance its new claim TNR Gold quoted an email apparently sent between two Xstrata employees at the time. According to TNR Gold it read, "Yes, taking Solitario (TNR Gold subsidiary) out of the game is a good idea. All we have to do now is not complete a feasibility study within the next three years!..."
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  • Sufiy
    , contributor
    Comments (377) | Send Message
    Author’s reply » "We can only speculate why the market does not like Gold juniors now or this particular deal or what else is affecting the valuations now. Some shareholders are raising very interesting questions about the valuations in proposed merger between Minera Andes and US Gold.


    Rob McEwen: "My Rough Estimate of Value" $4.26 Minera Andes March 2011 Presentation.


    Circular leaves more questions than answers now: why the sudden collapse in value of Los Azules? Could the litigation discount in case with TNR Gold be so large according to investment banks? Is the risk of litigation outcome properly disclosed to US Gold and Minera Andes side? Why the San Jose and Los Azules valuation range is so wide and out of touch with previous numbers published by Minera Andes? What Minera Andes did to address the litigation risk and preserve the value for its shareholders? Have they even tried to settle the case before this down beat valuations or it will be settled after Minera Andes existing shareholders will be diluted?
    Interesting to mention the large short position in US Gold and that it was driving Minera Andes down which is locked with the exchange ratio. Can we still expect the surprise counter bid for the Minera Andes? A lot of disgruntled retail shareholders of Minera Andes are still waiting for it. But who reads all these boards anyway? That is why we are surprised with this letter - we have thought that the deal is done already from the beginning.
    Los Azules deal with TNR Gold - when company was paying 5 mln dollars for the 12.5% of the Los Azules with its attempt to back in and was refused by Minera Andes in 2010 - looks like a sweet distant memory now. TNR Gold has advanced the new claim in May 2011 and is seeking now the return of all the Northern Half of the Los Azules deposit. We can not assess the risk involved in this litigation for the all parties, but still think that more proactive approach on the part of Minera Andes in order to resolve the dispute with TNR Gold could lead to the benefit of all shareholders. The litigation disclosure from the company is still very modest to put it mildly and we will provide the links in order that it will not be a total surprise later for all shareholders involved.

    9 Jan 2012, 02:27 PM Reply Like
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