Friday, November 04, 2011

TNR Gold: Los Azules Litigation: Minera Andes: Los Azules Project Exploration Progress Update tnr.v, ilc.v, czx.v,, uxg, 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,, svb, ura.v,,,

  Some Minera Andes shareholders are not very happy these days with the valuation proposed in the merger with US Gold.  The "Big Copper in Argentina" has been promoted by Minera Andes as one of the largest Copper deposits in the world - before TNR Gold was allowed its new claims last May - now it has shrunk dramatically on paper in valuation of the "independent financial advisers" in order to support the proposed acquisition price by US Gold. This shrinkage has affected even the 49% in the Silver producing mine in Argentina as well.
  Business is tough in Canada and who said that relationships with junior partners should be any different than with the small shareholders? Some of them are talking now about lawsuits to follow, misrepresentation of facts and other heavy litigation staff - people are getting emotional and frustrated. We would think as well that by now COO of the company should know better and made the clarification that TNR Gold is now seeking return of the Northern Half of the Los Azules deposit and not only 25% back in right, but we are sure Minera Andes shareholders are already better informed.
  In the other news about the project the very important information is that the Copper is still there in the ground, there are NO glaciers in the area and NO other shrinkages was reported in the area. We can expect the size of the deposit to grow further:
"During the last season, nine wells were drilled in order to confirm the previously defined resources, in addition to two deep exploration wells. In one of the latter a new mineralized areas was found, located southwest of the already defined resources area. With regards to diamantine, 5,655 meters were drilled and 4,793 meters were drilled with reverse air. Due to this new mineralized area, it is possible that the amount of resources may increase."

  Stakes are getting bigger and companies involved in this case as well - we continue to monitor the situation. 

 June 23, 2011

Vancouver B.C.: TNR Gold Corp. (the "Company"). TNR advises that it has taken note of the proposed merger of Minera Andes Inc. with US Gold to form McEwen Mining Inc. or some other similar entity. For further information please see the news release from Mineral Andes dated June 14, 2011.

As TNR is currently engaged in litigation against Minera Andes Inc. and three of its subsidiaries, TNR advises that it will be monitoring the developments with Minera Andes Inc. and intends to ensure that TNR's rights in the litigation are not prejudiced by any changes to the ownership of Los Azules or the identity of the Minera Andes parties.

Additional information can be obtained on the TNR corporate Los Azules webpage - 

Public Court Documents on Los Azules litigation:

We have found emails between Minera Andes and Xstrata presented in TNR Gold's application particularly entertaining:


TNR Gold (Solitario) properties are called Xstrata on the map below and above that line.

TNR Gold Insiders activity:

As of 11:59pm ET November 4th, 2011
Insider NameOwnership
SecuritiesNature of transaction# or value acquired or disposed ofUnit
Nov 4/11Nov 3/11Listov, AlexanderDirect OwnershipCommon Shares10 - Acquisition in the public market500,000$0.050
Oct 12/11Oct 12/11Klip, KirillDirect OwnershipCommon Shares10 - Acquisition in the public market100,000$0.050
Jul 29/11Jul 28/11Varshney, HariDirect OwnershipOptions50 - Grant of options200,000$0.100
Jul 29/11Jul 28/11Bella, Jerome MichaelDirect OwnershipOptions50 - Grant of options250,000$0.100
Jul 29/11Jul 28/11Chung, PaulDirect OwnershipOptions50 - Grant of options200,000$0.100
Jul 28/11Jul 28/11Sieb, MikeDirect OwnershipOptions50 - Grant of options250,000
Jul 28/11Jul 28/11Schellenberg, Gary David AlbertDirect OwnershipOptions50 - Grant of options750,000$0.100
Jul 28/11Jul 28/11Klip, KirillDirect OwnershipOptions50 - Grant of options500,000$0.100
Jun 17/11Jun 17/11Schellenberg, Gary David AlbertDirect OwnershipCommon Shares10 - Acquisition in the public market50,000$0.075
Jun 16/11Jun 16/11Klip, KirillDirect OwnershipCommon Shares10 - Acquisition in the public market50,000$0.080



Los Azules Project Exploration Progress

Jim Duff, Chief Operating Officer (COO), reviews the details on Los Azules copper project, located in the Argentinean Cordillera, west of San Juan Province.

Los Azules deposit is located in a copper porphyry belt in the Argentinean Cordillera, six kilometers from the Chilean border. In that area in Chile, some of the largest copper deposits in the world are located, such as El Teniente and Andina (Codelco), Los Bronces (Anglo American), Los Pelambres (Antofagasta Minerals), as well as Xstrata Copper El Pachón project.

The deposit is the property of Minera Andes, a company listed in the Toronto Stock Exchange, which also owns 49% of Minera Santa Cruz SA, operating San José mine in Santa Cruz, southern Argentina, in addition to a wide portfolio of exploration properties in this province in the Patagonia.

The deposit was discovered in 2004, access is by road, and it is located at 3,500 meters above sea level. During the drilling of a 221 meter deep well in 2006, high-quality copper traces were found. Since then, Minera Andes has prioritized the project.

During the 2010-2011 exploration period, between 80 and 120 persons worked in the project, the majority of them were contractors. In addition to the drilling program, Minera Andes carried out every environmental baseline study together with hydro-geologic and geo-technical studies.

Fully located in Argentinean territory, Los Azules foresees a concentration process fully performed through conventional flotation to produce copper concentrate. Recently, the company informed that it intents to convert Calingasta copper project Los Azules in a new mining company listed in the market, but later it gave up.

Jim Duff, Minera Andes Chief Operating Officer (COO), reviews the copper project details.

- Why Minera Andes intended to create a new company listed in the market for Los Azules project?

- Minera Andes has been exploring Los Azules during the last twelve years, and this became a very large and important project. There is no doubt that the deposit is very valuable, but the company is well-known in North American financial markets as a company focused on precious metals. This is mainly due to the company success in the discovery of San José mine in the Santa Cruz Province, already in production and operated by our partner Hochschild Mining Ltd. from Peru. Therefore, to the eyes of North American investors, the fundamental attraction is based on San José value perceived and the potential to increase its reserves without taking into consideration Los Azules contribution. We consider that Los Azules actual value is not fully reflected on the company shares price. The idea was to separate Los Azules and create a different company, together with other copper exploration projects we have. Minera Andes shareholders would have received one share of the new company for each Minera Andes share they held.

Expectations were that Los Azules value as a separate company would be higher than within Minera Andes and, therefore, Minera Andes shareholders could have received a value increase.

- Would this open the way to obtain partial or the entire project financing?
- The project is still in its advanced exploration stage. We are working on a pre-feasibility study and, therefore, it is premature to speculate about financing now.

- Why this decision change?
- The decision was postponed mainly due to the financial markets uncertain situation.

"S. Rob McEwen was more open on this issue:

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.


- Where is Los Azules project located?
-Los Azules is located at approximately 80 kilometers west of Calingasta village in the San Juan Province, on the high mountains, around six kilometers from the Chilean border.

– What are the project resources and how much will its production be?
- Total resources are 1.037 billion tons, with a cut-off grade of 0.35% Cu. Extraction average daily rate will be 100,000 tons mineral during the project useful life and 169,000 tons fine copper a year.

- How many years useful life will the copper mine have?
- More than 25 years, based on the resources defined to this moment.

- How much will the startup investment be?
- According to an independent preliminary study dated December 16, 2010, it is estimated that investment until the startup will be approximately US$2.9 billion.

- Will the project feasibility study be ready next year?
- The most optimistic date for the pre-feasibility study completion would be the end of 2013. After the pre-feasibility study, a definitive feasibility study would be carried out, which could take one or two more years.

- Which are the coming plans?
- During the coming season, we will continue drilling with diamantine in order to explore and expand the deposit and, at the same time, confirm the alredy defined resources. In addition, we will continue with several engineering studies associated to the pre-feasibility study. In general, the schedule for this season will be similar to that of the previous season.

- Will the coming campaign be brought forwards?
- The exploration season is limited by the weather conditions. It typically takes to November or December for us to reach the project site (when weather conditions improve on the high mountains) and we leave it at the end of April. This is the season we foresee for this campaign.

- Do you have the results from the last exploration? What are the indications regarding resources?
- During the last season, nine wells were drilled in order to confirm the previously defined resources, in addition to two deep exploration wells. In one of the latter a new mineralized areas was found, located southwest of the already defined resources area. With regards to diamantine, 5,655 meters were drilled and 4,793 meters were drilled with reverse air. Due to this new mineralized area, it is possible that the amount of resources may increase.

- How much has been invested in exploration and how many meters have been drilled?
- To this moment, the company has invested approximately US$37 million, and we have drilled more than 36,000 meters diamantine.

- How long will the project construction will take, and how many jobs will it generate?
- Once the feasibility study is completed and all permits and licenses are obtained, the construction stage will require between two and three years. Currently, we have no estimate of the amount of labor the construction will require.

- Did the Argentina Glacier Law affect Los Azules plans?
- Minera Andes is strongly committed to environmental protection. During the exploration stage and during the project operation we will comply with every applicable law and regulation for environmental protection, including the San Juan Province Glacier Law.

- Are there glaciers in Los Azules area?
- There is none in the project area.

- Are there estimate dates to submit the environmental impact report to the authorities?
- The project is still in the advanced exploration stage and we cannot foresee the date of the environmental impact report submission to the Argentinean authorities.

- Does the report include a section on glaciers?
- Of course, we are working with nationally and internationally recognized experts on glaciers.

- What is your current relation with the communities?
- We have good relations with the communities but, being this an exploration project, the impact is minimal at this stage. As the project advances, we will work closely with the communities in order to inform them and seek the appropriate ways of collaboration.

- Are you assessing the possibility of acquiring and/or exploring any other project in Argentina and/or Chile?
- For a long time the company has had several very interesting exploration projects in the Santa Cruz Province. Except for San José mine, we have not really explored these areas. At the moment, we are preparing an aggressive project to explore in Santa Cruz. For the time being, we have no intention to explore in Chile.

- Does the copper current price encourage investments for the company?
- Of course. Los Azules is located in a very remote place and requires a large investment. With the current copper prices, the project is economically interesting.

- Which is the situation of the legal action involving TNR, Minera Andes, MIM Argentina Exploraciones (Xstrata), and related entities? (TNR demands back 25% of some properties part of Los Azules)

"S. 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."

- The legal action is at the British Columbia Province Supreme Court in Canada. The trial has been postponed for 2012."

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.

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