Friday, April 23, 2010

TNR Gold Subsidiary Serves Notice of Back In Into Los Azules to Minera Andes and Secures Standby Credit Facility TNR.v, CZX.v,, ABX,, FCX

"If it was a joke - it can become the bad one. As we understood from Minera Andes NR, which came out first on 1st of April: TNR Gold approached Minera Andes in negotiations in order to exercise its back-in right in Los Azules project. Rob McEwen CEO of Minera Andes decided to reject TNR Gold's claim of back-in right and sided with Xstrata, his response to TNR Gold discussion was a writ against TNR Gold filed to court on Fools' Day. We are not talking about manners here, but move is a very symbolic: he has welcomed before the lawsuit from his another partner, which he calls "partner from hell" and now attempts to block TNR Gold back-in right even before the deadline in agreement with Xstrata which is on 23rd of April according to Minera Andes NR. Our take from here is that maybe TNR Gold was able to finance its backing in and produced a proposition strong enough for Minera Andes to rush to court on such an unusual day. Looks like junior has received another chance to challenge the legal situation with an early back-in attempt, way before the major legal battle with Xstrata scheduled this Fall. The very important issue for development of Los Azules - ownership for Escorpio IV stays with TNR Gold until court decision in the Fall. Escorpio IV will accommodate part of the mining facilities according to Minera Andes Preliminary Economic Assessment of the Los Azules. We have been expecting that Rob McEwen will be more flexible in apparent discussions with TNR Gold and can secure 100% property including Escorpio IV in a deal with TNR Gold, now this question will be in the legal space. We think that we do understand his motivation: it is very difficult to announce that Los Azules does not belong to him 100% until the court decision in TNR Gold case with Xstrata after so many NRs stating just that. Legally Minera Andes has disclosed lawsuit between TNR Gold and Xstrata in its filings, but for some of the Minera Andes shareholders relying on company's presentations and NR's this news, that ownership of Los Azules is challenged by TNR Gold in lawsuit pending resolution was out of the blue."

TNR Gold has announced today a very important milestone in the development of the company: management and, what is very important, investors behind this financing are not discouraged by any legal rhetoric from Xstrata and Minera Andes and methodically advancing their legal case in Los Azules back-in right case.

Company reports that as part of its legal strategy TNR Gold secured the credit facility and have notified Minera Andes about an early back-in right into the Los Azules project.

It looks like money will be used only in case of successful litigation progress and this bridge loan allows company to finance the back-in right without dilution of TNR Gold and International Lithium Corp. at these price levels, which do not reflect the possible success in litigation.

You can review Los Azules project details in Minera Andes presentation.

Recent news on developments at Los Azules can be found here and for further reference we will address you to the latest TNR Gold presentation.

Every legal case brings uncertainty and you should address it in a legal statement below.

TNR Gold Subsidiary Serves Notice of Back In Into Los Azules to Minera Andes and Secures Standby Credit Facility

04/23/2010 [ACCESSWIRE]
Vancouver, B.C.: Compañía Minera Solitario Argentina S.A.(“Solitario”), a wholly owned subsidiary of TNR Gold Corp. ("TNR"), has served notice to Minera Andes Inc. exercising its back-in right for 25% of certain of the properties (the “Properties”) constituting the Los Azules project in Argentina (the “Los Azules Project”). TNR also entered into a standby credit facility in the aggregate principal amount of CAD$5 million (the “Facility”) for a term of one-year. The proceeds from the Facility have been placed in a trust account to be released on closing of the exercise of the back-in right.
TNR has issued 2,272,727 common shares to the lender as partial consideration for the Facility and has agreed to issue another CAD$500,000 of common shares with a deemed price equal to the 10-day volume weighted average trading price as of the day prior to the court’s decision in certain circumstances where TNR is successful in its litigation with respect to the back-in right. In addition, TNR has paid a corporate finance fee of CAD$305,000.
The right of TNR and Solitario to exercise the back-in right for the Los Azules Project is subject to a legal action commenced by Minera Andes Inc., Minera Andes S.A., Los Azules Mining Inc. and Andes Corporacion Minera S.A. (the “MAI Group”) against TNR and Solitaro in which the MAI Group is disputing Solitario’s ability to waive the production of a feasibility study and issue a back-in notice at this time. The action seeks declaratory relief that any back-in notice is invalid, void or of no force and effect, and advances a claim for costs. TNR is also in a legal dispute with MIM Argentina Exploraciones S.A. ("MIM") a subsidiary of Xstrata PLC, over the language of the back-in clause of the Exploration and Option Agreement entered into between Solitario and MIM. In the action, TNR is also seeking confirmation of its ownership in the Escorpio IV property, which is located adjacent to the Los Azules Project and a declaration that the Escorpio IV property is excluded from the Exploration and Option Agreement. A court date has been set for the fall of 2010.
TNR and International Lithium Corp (“ILC”) are diversified metals exploration companies focused on exploring existing properties and identifying new prospective projects globally. TNR has a portfolio of 18 active projects, of which 9 will be included in the proposed spin-off of International Lithium Corp. For further details of the spin-off please refer to TNR's April 12, 2010 news release or visit

The recent acquisition of lithium, other rare metals and rare-earth elements projects in Argentina, Canada, USA and Ireland confirms the companies’ commitments to generating projects, diversifying its markets, and building shareholder value.

On behalf of the board,

Gary Schellenberg

Cautionary Language and Forward-Looking Statements

Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release. This press release includes certain statements that may be deemed "forward-looking statements". All statements in this discussion, other than statements of historical facts, that address future exploration drilling, exploration activities and events or developments that TNR expects, are forward looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include metal prices, exploration successes, continued availability of capital and financing, and general economic, market or business conditions. In particular, there are no assurances that TNR will be successful in the current litigation with respect to the Los Azules Project and its back-in right and there are no assurances that TNR will be able to refinance the Facility in the event that the closing with respect to the Properties is delayed beyond the term of the Facility. Accordingly, readers should not place undue reliance on forward-looking statements. This news release and the information contained herein does not constitute an offer of securities for sale in the United States and securities may not be offered or sold in the United States absent registration or exemption from registration.

We have a position in this company, please, do not consider anything as an investment advise, as usual, on this blog.
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