Thursday, July 05, 2012

TNR Gold litigation: McEwen Mining Los Azules Resource Map - Battle for the "World's Sixth Largest Undeveloped Copper Deposit" TNR.v MUX

  "Now Los Azules has 15.4 billions lbs of Copper in all categories - an increase of 23.2% from 12.5 billions lbs - stakes in this litigation are going higher.

“Los Azules is one of the world’s largest undeveloped copper deposits. We are looking forward to commencing our most ambitious drill program this November. This deposit appears to have good potential to expand in size,” stated Rob McEwen, Chairman and Chief Owner."

  This litigation has gone the long way from the "lawsuit without merit" to the recent 10-Q filing by McEwen Mining and only those who are following it can really appreciate the recent changes. Now the map of Los Azules is published on the McEwen Mining  website and all shareholders can get the clear information about what is at stake here. McEwen Mining has filed a number of disclosures with SEC in U.S. describing the claims of TNR Gold and the court hearing is scheduled for this coming November.

TNR Gold: McEwen Mining - The Los Azules copper project is subject to ongoing legal proceedings with the potential that we may lose part of our interest in the project TNR.v, MUX

McEwen Mining has updated its Los Azules web page - now you can see the location of Copper High Grade Core Zone on former TNR Gold properties, which TNR Gold claims to be returned back:

Los Azules – Argentina (Exploration)

Los Azules is a 100% owned advanced-stage porphyry copper exploration project located in the cordilleran region of San Juan Province, Argentina near the border with Chile. It is one of the world's largest undeveloped copper deposits with a mineral resource of 10.8 billion pounds of copper (inferred) and 4.6 billion pounds of copper (indicated). Gold resources are 710,000 ounces indicated, and 1.79 million ounces inferred. Silver resources are 19 million ounces indicated, and 56 million ounces inferred.
Los Azules is a traditional porphyry copper system. The upper part of the system consists of a barren leached cap, which is underlain by a high-grade secondary enrichment blanket, and the primary mineralization below the secondary enrichment zone extends to at least 650 meters, which is the depth of the deepest holes drilled to date. McEwenMining is planning to drill 15,000 meters starting in November of 2012 and continuing into the 2013 season at LosAzules to continue exploration of the deposit.
The property encompasses 50,933 acres and surrounds a large alteration zone that contains the resource which measures approximately 4 kilometers long by 1.5 kilometers wide.

McEwen Mining has recently intersected 0.53% copper over 351 meters, including 0.71% copper over 167 meters, in Hole 1279. This hole is located 340 meters southeast of Hole T-01, which was drilled in 2011 and returned 0.50% copper over 269 meters, including 0.95% copper over 45 meters. In addition, Hole 1175, located 200 meters east of T-01, returned 0.70% copper over 15 meters before being terminated due to bad ground conditions.
Copper Grade

McEwen Mining has signed a contract with Major Drilling to provide four core drills and one reverse-circulation drill for the 2012-13 drill season.  These core rigs are considerably more powerful than the ones used during the 2011-12 season and the Company believes this will increase the likelihood of reaching target depths (+700 meters), where high-grade copper mineralization has been encountered.  McEwen Mining anticipates starting the upcoming drill season in November and plans a total of 15,000 meters of drilling.

Mineral Resource Estimate Greater than 0.35%

(B lbs)

Mineral Resources Greater than 0.70% Copper

(B lbs)

Los Azules Resource Map

Location of Los Azules

Los Azules is 6 km east of the Chilean-Argentine border, is accessible by road and is at an elevation of 3,500 meters above sea level. Due to snow conditions on two mountain passes on the access road to the site, seasonal exploration typically commences in November and terminates in late April.
The deposit is located on a copper porphyry belt host to some of the world's largest copper mines including Codelco's El Teniente mine (world's largest underground copper mine), Anglo American's Los Bronces mine, Antofagasta's Los Pelambres mine and Xstrata's El Pachón project.
The figure and technical information on this page were derived from McEwen Mining Inc.’s news release titled “McEwen Mining Announces Resource Update at the Los Azules Copper Project in Argentina” released on June 28, 2012 by McEwen Mining. To access the news release click here."

TNR Gold Litigation: McEwen Mining Announces Resource Update at the Los Azules Copper Project in Argentina TNR.v, MUX

  Now Los Azules has 15.4 billions lbs of Copper in all categories - an increase of 23.2% from 12.5 billions lbs - stakes in this litigation are going higher.

“Los Azules is one of the world’s largest undeveloped copper deposits. We are looking forward to commencing our most ambitious drill program this November. This deposit appears to have good potential to expand in size,” stated Rob McEwen, Chairman and Chief Owner.

 Los Azules Map with TNR Gold former properties:

The high grade copper zone is located on former TNR Gold properties on the McEwen Mining map:

Los Azules from TNR Gold website 

Los Azules is located in the San Juan province of Argentina in the prolific Andean cordillera region. It contains a mineralized porphyry copper deposit that is one of the world's largest undeveloped copper deposits.


In 2006 drill results released by Minera Andes confirmed significant high-grade copper on the Los Azules property. An 11-hole drill program returned intervals up to 1.62 per cent copper over 221 metres and 1 per cent copper over 173 metres in separate holes. The new core drilling focused on the previously defined enriched copper target in an area approximately 2,500 metres by as much as 1,500 metres, defined by prior drilling. For NI 43-101 compliant mineral resource information, please refer to the project page on the website of Minera Andes Inc.

On June 30, 2008, TNR and its Argentinean subsidiary Solitario Argentina S.A(together, "TNR") commenced an action in the Supreme Court of British Columbia against MIM Argentina Exploraciones S.A. ("MIM"), a subsidiary of Xstrata PLC ("Xstrata"). That action has since been amended to include additional claims and also to name Minera Andes Inc. and three of its subsidiaries as defendants. The lawsuit concerns claims relating to three issues over mineral properties in the northern part of the Los Azules area.

In May 2011, following a two-day hearing before the British Columbia Supreme Court, TNR and its subsidiary, Solitario Argentina S.A., have been granted leave to amend their pleadings to add a new claim to the litigation (the "New Claim") over the Los Azules project in Argentina. The litigation involves TNR, Minera Andes Inc., MIM Argentina Exploraciones S.A. ("Xstrata") and related entities. The Los Azules project is an advanced exploration project currently reporting a National Instrument 43-101 compliant Inferred Resource.

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.

As a result of the New Claim being added to the litigation, the trial scheduled to commence on June 20, 2011 in Vancouver, BC has been adjourned so that documents relating to the New Claim can be produced. A new date for the trial will be set in due course.

In the original Notice of Claim, among other claims, TNR and Solitario seek rectification of a 2004 Exploration and Option Agreement with Xstrata (later assigned to Minera Andes) to restore a right on the part of Solitario to back-in to up to 25% of certain properties constituting the northern half of the Los Azules project (the "Properties") any time within 120 days of the production of a feasibility study. Minera Andes and Xstrata oppose rectification and the other relief sought by TNR and Solitario.

TNR and Solitario are currently in litigation with Minera Andes Inc. (and indirect subsidiary of McEwen Mining Inc.) and MIM Argentina Exploraciones S.A. The litigation (the "Los Azules Litigation") involves a challenge to title to a substantial portion of the mineral properties constituting the Los Azules Project in San Juan Province of Argentina. Specifically, TNR is challenging the title of Minera Andes Inc. 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. A trial in the Courts of British Columbia is set to commence in November, 2012 and last for approximately six week we invite all shareholders to learn more about the case proceedings via the publicly available documents.

The claims are described in a recent judgment of the British Columbia Supreme Court which allowed TNR to make additional amendments to its claims and granted an adjournment of the trial, which had been set to commence on June 20, 2011. See the news release issued on that subject. Also linked is a copy of TNR's Amended Notice of Civil Claim which the court has permitted to be filed. The three claims are summarized below. Note that none of these claims have been proven in court and the defendants oppose each of the claims.

First, TNR's claim challenges the validity of the exercise of an option under a May 15, 2004 Exploration and Option agreement between Solitario and MIM. Solitario claims that prior to exercising its option and taking 100% ownership of Solitario's mineral properties in Los Azules (subject to a back-in right for Solitario), MIM did not meet the required $1 million in expenditures in relation to the exploration of the properties so as to be entitled to the option. Solitario says that as a result, MIM's exercise of the option was a nullity such that the properties should be returned to Solitario, or, in the alternative, that the defendants are liable to Solitario for damages. The defendants oppose this claim and deny that the exercise of the option was invalid.

Second, TNR's claim seeks to rectify the terms of a back-in right in the May 15, 2004 Exploration and Option Agreement. TNR says the back-in right incorrectly indicates that Solitario could only exercise its back-in right if MIM produced a feasibility study within 36 months of exercising its option to purchase the properties. TNR claims that the agreement that was made, and which was reflected in a May 15, 2003 Letter of Understanding, was that Solitario can back-in to the property anytime within 120 days of a feasibility study being produced. TNR says that the back-in clause in the Exploration and Option Agreement should be rectified to remove the reference to the 36 month period, and claims that Minera Andes and its subsidiaries, as assignees of the mineral properties, should be subject to the rectified back-in right. In the alternative, TNR claims that the 36 month limitation is unenforceable for lack of consideration, and in the further alternative says that the effect of the reference to 36 months is that it is an implied term that the defendants had to produce a feasibility study within 36 months or pay damages to TNR. The defendants oppose the claims made by TNR and say that the back-in right as presently worded accurately reflects the agreement that was made with Solitario.

Third, TNR seeks a declaration that a property called Escorpio IV, which is adjacent to the properties that were subject to the May 15, 2004 Exploration and Option Agreement, is solely owned by Solitario and not subject to the Exploration and Option Agreement. In this claim, TNR asserts that MIM is bound by an October 20, 2003 irrevocable assignment of all of its rights with respect to Escorpio IV. The defendants disagree and claim that Escorpio IV was part of the properties subject to the Exploration and Option Agreement, and they counterclaim for an order that TNR transfer the property to the defendants.

In addition to the above noted action, on April 1, 2010, Minera Andes and its subsidiaries commenced an action in the Supreme Court of British Columbia against TNR, pre-emptively contesting its ability to waive the requirement that a feasibility study be produced in advance of issuing a back-in notice for up to 25% of the Los Azules properties that are subject to the May 15, 2004 Exploration and Option Agreement. Notwithstanding the lawsuit, on April 23, 2010, Solitario waived the requirement for a feasibility study and issued a back-in notice for 25% of those properties. Minera Andes and its subsidiaries rejected the back-in notice. TNR says the action commenced by Minera Andes and its subsidiaries is without merit, and has brought a counterclaim for a declaration that the back-in notice issued on April 23, 2010 is valid.

The two actions have been joined for hearing in one trial, which will take place in the Supreme Court of British Columbia, located in Vancouver, British Columbia, on a date to be set.

Download Links:
Original Notice of Civil Claim
Amended Statement of Defence & Counterclaim
Amended Notice of Claim"

"We have a very interesting development with McEwen Mining - company has filed shelf preliminary prospectus for 200 million. What has happen with the idea to Sell Los Azules before the end of the litigation? Is it the case that before you can Sell something you will need to Buy it? The new Los Azules resource estimation is promised by Rob McEwen by the end of June 2012."

Debt Securities (which may be guaranteed by one or more of our Co-Registrants) Common Stock Warrants Subscription Rights Subscription Receipts

"The Los Azules copper project is subject to ongoing legal proceedings with the potential that we may lose part of our interest in the project. We are currently subject to ongoing litigation regarding the Los Azules Copper Project. TNR Gold Corp (‘‘TNR Gold’’) and its subsidiary, Solitario Argentina S.A. (‘‘Solitario’’ and together with TNR Gold, ‘‘TNR’’), claim, among other things, that certain properties that comprise the Los Azules Copper Project were not validly transferred to Minera Andes and therefore should be returned to TNR. In the alternative, TNR claims that even if Minera Andes validly owns the Los Azules Copper Project, TNR has a 25% back-in right to a substantial portion of the Los Azules project underlying known mineral resources that may be exercised to acquire a 25% interest in such part of the property. TNR has also claimed damages. We estimate that the Los Azules Copper Project represents approximately 56% of the total assets acquired, not counting liabilities assumed, in the acquisition of Minera Andes, based on our preliminary estimate of the fair value of all identifiable assets acquired and liabilities assumed.
We are not able to estimate the potential financial impact of this claim. If resolved adversely against the Company, this litigation could materially adversely affect the value of the Company by reducing or terminating our interest in a significant portion of the Los Azules Copper Project and our ability to develop the Los Azules Copper Project. Alternatively, we could be subject to a significant damages award. Such a result would have a significant negative impact on the value of the Company and could have a significant impact on our stock price."

TNR Gold Rejects Third Party Proposal And Provides Los Azules Update TNR.v, MUX

TNR Gold: Los Azules Litigation: Time May Be Ripe for Copper M&A to Flourish TNR.v, MUX

"We will address all interested parties to the web-cast of yesterday's Conference Call with McEwen Mining:

  Here we will provide some additional public information on Los Azules litigation, so that you can have the full picture and decide why McEwen Mining is so worried, why now and what actually they are talking about:

Rob McEwen:

"We are blessed with having a number of world class properties, properties of long life and such size that  they are of interest to the large number of players - particularly, Los Azules Copper project, where we have encouragement in drilling this year. We have discussions about partial or full sale of this  property, which could provide some or all of the funding we need to carry on our business. These discussions have been going on for a while now, but we will certainly step up that tempo..."

Answering one of the questions, whether McEwen Mining has to wait until the end of the litigation or  sell only part of the property Rob McEwen said: "It will be the sale of all property and it does not have to wait the end of the litigation."

  In the end of the conference call TNR Gold litigation is mentioned with the Merger Offer proposal from unnamed party and Rob McEwen has pointed, as usual, to the TNR Gold share price - this attention to the junior market is also very interesting in light of the all recent developments.
  Timing of a very fortunate Sales of McEwen Mining shares by Former CEO of Minera Andes Mr Allen Ambrose becomes particularly interesting in light of all recent warnings for McEwen Mining shareholders about "Argentina Situation".

   You can find more information about emails of Mr Allen Ambrose presented as evidence in public court documents of Los Azules litigation below."

TNR Gold Receives Third Party Proposal and Provides Los Azules Project Update TNR.v

"Kirill Klip, Chairman of TNR commented that: "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 both TNR and McEwen Mining. The third party proposal which we have received to purchase TNR, together with the fact that McEwen Mining has decided to limit its drilling activity to non-disputed mineral claims only are further validation of the value of TNR, its title claims and its prospects for success in the upcoming Los Azules litigation."

TNR Gold Vs. McEwen Mining: 
Los Azules 
"World's Sixth Largest Undeveloped Copper Deposit"


Thursday, May 10,2012

Note: we are not sure that this particular Judge will be involved in this court hearing.

Disclaimer (loosely based on investment bankers' small print): 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.

  We are very pleased to see this development: acknowledgement of the ongoing litigation, its risks, property involved and proper representation of all necessary information for the shareholders. Annual General Meeting to be held by McEwen Mining on Thursday May 17, 2012 at 4:00 will provide a good opportunity to ask all questions about this developing story with "World's Sixth Largest Undeveloped Copper Deposit" - as Rob McEwen has called it. 

McEwen Mining reports: 

"A total of 2,835 meters were drilled this season in eight holes. A drill hole location map, a table of assay results and a cross section of the Los Azules resource are provided in Exhibits 1, 2 and 3. All of the drill holes from this season were completed on mineral claims that are not subject to ongoing litigation."

Page 5 provides, finally, McEwen Mining map outlining High Grade Core Copper Zone on TNR Gold's former properties called "100% Held mineral rights (subject to litigation) and surface ownership".

TNR Gold litigation on Los Azules Copper Project, Argentina - Form 10-Q for MCEWEN MINING INC. TNR.v

TNR Gold's Gary Schellenberg Discusses Gold Mining in Alaska and Los Azules Copper Project on Midas Letter Money TNR.v

Update February 12th, 2012. CNNMoney: 

$1.7M of MUX sold by Allen Ambrose

We guess, that at some stage Mr Allen Ambrose - former CEO of Minera Andes, will be questioned during the Los Azules litigation on what exactly were his intentions explained in his emails presented by TNR Gold litigation counsel in Amended Claim.

Allen Ambrose emails:

24. "Next we should look at our alternatives to take out the Solitario (TNR Gold - S) agreement..."TNR Gold vs Minera Andes (McEwen Mining now) and MIM (Xstrata now). From Page 11 Part 3: Legal Basis

Los Azules: Gold bug McEwen eyes big copper play - TNR Gold claims Northern Part of the project back 

Mcewen Mining: SEC filing: ITEM 1A. Risk Factors
"The Los Azules copper project is subject to ongoing legal proceedings with the potential that we may lose all or part of our interest in the project    

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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