Note: we are not sure that this particular Judge will be involved in this court hearing.
Disclaimer: please read our full disclaimer, nothing on this website or any links provided should be relied upon in any way and nobody will accept any responsibility in any case.
Disclaimer: please read our full disclaimer, nothing on this website or any links provided should be relied upon in any way and nobody will accept any responsibility in any case.
Shame may restrain what law does not prohibit.
Seneca
Mineweb:
"...But, according to court documents, TNR Gold now alleges Minera Andes and Xstrata failed to meet those expenditures as they rushed to hit the $1 million mark so they could as quickly as possible "take-out" TNR Gold's 25-percent back-in right on the property...
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!.."
Mineweb has made a very good summary of the case and different views of the parties involved and it will be a good idea to read the full article.
Emails mentioned above are particularly entertaining and can be found in the document below:
Can we say that George Macintosh, QC has started his 2012 "exploration" season with this move? First, we have to congratulate him with making Best Lawyers in Canada 2012 and Lawyer of the Year 2012. We are not sure why he is in charge in this particular case and leading TNR Gold litigation team, but things are getting interesting by the day and now we have, quite surprising for many shareholders, the number on the TNR Gold's claims, which must be still discounted for the potential early settlement. Idea of the settlement was rejected after "careful consideration" within 48 hours by Minera Andes and they insist with US Gold that:
"The Board of Directors of US Gold, including the Special Committee of independent directors formed to evaluate the transaction with Minera Andes, remains of the view that the proposed business combination with Minera Andes on the terms of the arrangement agreement dated September 22, 2011 is fair to shareholders and in the best interests of US Gold and its shareholders and recommends that shareholders vote in favour of this transaction at the special meeting to be held on January 19, 2012."
Public offer of TNR Gold is valid until January 18th, 2012 but it looks like there is no interest even to discuss it with parties involved and decisions were made very quickly. We just hope, for the sake of shareholders, that legal documents in this case are getting more proper attention and time allocated.
We can understand Mr McEwen - he is the largest shareholder of both companies and knows them very well. He knows where the value is and how to buy it in a best way for all parties involved...from both sides. We even join him in his worries on BNN another day that nobody really reads all those 500 pages of Merger Info Circulars these days. Everything should be fine - people managing other people's money do not have time as well to read everything.
What will happen if somebody is still reading and even has invested in a calculator? These ideas will be a pure speculation from our side and we urge you to base all your decisions only on official documents (even better if they are from BC Supreme Court) and after consulting your certified and trusted financial adviser.
| TNR Gold Corp. TSX VENTURE : TNR  |
January 12, 2012
TNR Gold Offers to Settle Los Azules Litigation With Minera Andes for US$125 Million
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 13, 2012) - TNR Gold Corp. (the "Company") (TSX VENTURE:TNR) and its wholly owned subsidiary Compañía Minera Solitario Argentina S.A. ("Solitario" and, together with the Company "TNR") today announced that they have made an offer of US$125 million to settle their current litigation with Minera Andes Inc over title to a substantial portion of the mineral properties constituting the Los Azules project in Argentina (the "Los Azules Litigation").
Minera Andes has recently agreed to be acquired by US Gold Corporation pursuant to an arrangement transaction (the "McEwen Merger"). If the McEwen Merger is approved by the shareholders of both companies and the transaction closes, Minera Andes will become an indirect subsidiary of US Gold, which will be renamed "McEwen Mining Inc.".
The Los Azules Litigation involves a challenge by TNR of the title of Minera Andes and certain of its subsidiaries to the mineral properties constituting the northern half of the Los Azules project (the "Solitario Properties"). TNR is seeking return to it of a 100% interest in the Solitario Properties or damages; and, effectively, in the alternative, recognition of TNR's right to back-in to a 25% interest in the properties; together with recognition of TNR's interest in the related Escorpio IV property.
The offer was initially made on January 10, 2011, with finalization of the settlement conditional upon closing of the McEwen Merger; and Minera Andes' Board of Directors has indicated to TNR that it has determined not to accept the offer. TNR, however, believes that, in the best interests of the shareholders of TNR, Minera Andes and US Gold Corporation, it is important to resolve the current uncertainty as to the ownership of the Solitario Properties before the finalization of the McEwen Merger. Accordingly, TNR has now amended and made its offer public, has removed the conditionally of its prior offer and has extended the acceptance period to January 18, 2012.
Kirill Klip, Chairman of TNR commented that: "We strongly believe that our settlement offer is in the best interests of the shareholders of TNR, Minera Andes and US Gold. The Los Azules project is considered to represent one of the largest undeveloped copper projects in the world but the current legal uncertainty over its legal ownership is detracting from the value of the project for shareholders of all three companies."
"The offer made to shareholders of Minera Andes by US Gold has, I believe, been discounted by the Special Committee of US Gold and its financial advisors because of the uncertainty regarding legal title to the Solitario Properties and the possibility that an adverse determination in the Los Azules Litigation could reduce or terminate its interest in the Solitario Properties."
"If the McEwen Merger is completed, continued uncertainty as to legal title to the Los Azules mineral interests could impede financing of the project and adversely impact the trading price of the shares of McEwen Mining. If the McEwen Merger is completed, US Gold on a consolidated basis will inherit the legal liabilities and costs associated with the Los Azules Litigation, including the risk of loss of all or a significant portion of the northern portion of the project or of a substantial damage award."
Kirill Klip added that: "Acceptance of the TNR settlement offer would create the opportunity for Minera Andes to obtain clear and secure title to the Los Azules project and would provide certainty and clear value for the shareholders of Minera Andes and US Gold."
TNR's settlement offer is an offer to settle all claims and counterclaims in the Los Azules Litigation for US$125 million, and includes the conveyance of the Escorpio IV property to Minera Andes. The usual contractual releases would accompany the settlement. If the McEwen Merger closes, TNR is agreeable to payment in registered shares of McEwen Mining valued at market.
The various proceedings in the Los Azules Litigation have been consolidated and the pleadings are being amended, so that all issues will be heard together in a six week trial scheduled for late 2012. The Court filings relating to the litigation are available from the BC Supreme Court registry database (BC Online) and are hosted on TNR's webpage at www.tnrgoldcorp.com/s/LosAzules.asp.
ABOUT TNR GOLD CORP. / INTERNATIONAL LITHIUM CORP.
Over the past twenty-one years TNR, through its lead generator business model, has been successful in generating high quality exploration projects around the globe. With the Company's expertise, resources and industry network, it is well positioned to aggressively identify, source, explore, partner and continue to expand its project portfolio.
TNR's recently listed subsidiary, International Lithium Corp. (TSX VENTURE:ILC), demonstrated the successful application of TNR's business model in which TNR shareholders benefited from a unit distribution upon spin-out of TNR's lithium and rare metals projects. TNR remains a large shareholder in ILC at 27% of outstanding shares.
At its core, TNR provides significant exposure to gold and copper through its holdings in Alaska and Argentina; and teamed with the recent acquisitions of rare-earth elements and iron ore projects in Canada confirm TNR's commitment to continued generation of in-demand projects, while diversifying its markets and building shareholder value.
On behalf of the board,
Gary Schellenberg, President - TNR Gold Corp.
Statements in this press release other than purely historical information, historical estimates should not be relied upon, including statements relating to the Company's future plans and objectives or expected results, are forward-looking statements. News release contains certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company's business, including risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements. In particular, there are no assurances that the Company's current settlement offer will be accepted or that an alternative acceptable settlement can be negotiated with Minera Andes or that the Company will achieve a favourable outcome in the Los Azules litigation.
CUSIP: #87260X 109
SEC 12g3-2(b): Exemption #82-4434
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
TNR Gold Provides Update on Litigation With Minera Andes Over the Los Azules Project
Background of the Los Azules litigation:
TNR Gold: Los Azules Litigation: U.S. Gold, Minera Andes CEO urges holders to approve merger
This headline U.S. Gold, Minera CEO urges holders to approve merger is from Stockwatch and you should read the full NR from Rob McEwen below. Why is the worry about the approval outcome? Both stocks - US Gold and Minera Andes have collapsed since last spring. US Gold has made the top at 9.2CAD with MC over 1.2 billion dollars and now is trading at 3.26CAD with MC at 456 mln CAD. Minera Andes has made a top at 3.3CAD before the new claim for Los Azules was advanced by TNR Gold in May and now is trading at 1.42CAD with MC at 407 mln CAD. Combined companies will be valued at current market prices in the range of 863 mln CAD - a far cry from last spring almost 2 billion valuation at the top.
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.
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.
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.
Update 1.01.2012 Charts below can provide further ideas about potential valuations for Los Azules:
Chris from "On The Hunt for Value" has made a terrific forensic accounting job following the proposed valuations for Minera Andes and US Gold including the communication with US Gold. We highly recommend to read his Blog in its entirety, even if he takes in some part a different view on TNR Gold side of litigation:
"A recent data point not included below is the purchase of Peregrine Metals' 12b lbs Cu, 0.42% grade Altar deposit, for an implied price of $0.03-$0.04 per lbs Cu.
My Question to US Gold: In the NAV approach on Los Azules, using the assumptions that Raymond James stated, why is it that their sensitivity table says that LA is valued between $248.6m and $379.5m yet in the NAV summary, Raymond James has LA valued at between $87.0m and $132.8m?
Update 1.01.2012 Charts below can provide further ideas about potential valuations for Los Azules:
Chris from "On The Hunt for Value" has made a terrific forensic accounting job following the proposed valuations for Minera Andes and US Gold including the communication with US Gold. We highly recommend to read his Blog in its entirety, even if he takes in some part a different view on TNR Gold side of litigation:
Minera Andes (MNEAF) merger with US Gold (UXG)
Assuming at buyout-price of 54% of NPV, as based on recent M&A activity (see above slide), than Los Azules could have a potential value around $790m.
UPDATE:
My Question to US Gold: In the NAV approach on Los Azules, using the assumptions that Raymond James stated, why is it that their sensitivity table says that LA is valued between $248.6m and $379.5m yet in the NAV summary, Raymond James has LA valued at between $87.0m and $132.8m?
ANSWER FROM US GOLD: The sensitivity table refers to the NPV of the Los Azules Project – based on 100% ownership and unadjusted for trading value. The NPV is then adjusted according to what is stated in the Formal Valuation “Raymond James applied a risk adjusted developer multiple to Los Azules, in line with industry comparables, to reflect the current stage of development of the project, and also made additional adjustments to reflect the risks associated with the current litigation.”
As a result, we adjusted the NPV by a multiple of 0.35x and the range becomes US$87-US$132.8M from US$248-US$375. There are essentially no copper development stage companies that trade at 1.0x NPV, and given the political, technical and litigation risk associated with this project the 0.35x multiple was merited."
End of quote.
Los Azules Litigation TNR Gold vs Minera Andes - Trial Date is Set for November 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.
TNR Gold: Los Azules Litigation: Minera Andes: Los Azules Project Exploration Progress Update
"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.
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."
"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."
Los Azules Litigation: TNR Gold Contests Drilling by Minera Andes on Escorpio IV Property, Argentina
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 -
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.
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.
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