Minera Andes provides update on second tranche of private placement with Rob McEwen



    
    TSX: MAI                                          NASD-OTCBB: MNEAF
    

    SPOKANE, WA, Feb. 25 /CNW/ - Minera Andes Inc. (the "Corporation" or
"Minera Andes", TSX:MAI and US OTC:MNEAF) announced today that on February 26,
2009 it will complete the second tranche of its previously announced private
placement to Robert R. McEwen, the Executive Chairman and an existing
shareholder of the Corporation.
    On February 18, Minera Andes announced that it had completed the first
tranche of the private placement with Mr. McEwen and had issued 18,299,970
common shares of the Corporation to him at a price of C$1.00 per share for
gross proceeds to the Corporation of C$18,299,970 (the "First Tranche"). The
Corporation also agreed with Mr. McEwen that if he acquires the bank loan
owing by the Corporation to Macquarie Bank Limited ("Macquarie") in the
aggregate principal amount of US$17.5 million, together with related security,
the conversion of that loan to common shares of the Corporation would be put
to the Corporation's shareholders for approval. If Mr. McEwen was unable to
acquire the loan from Macquarie by the close of business on February 25, 2009,
together with related security, then the Corporation and Mr. McEwen would
complete the second tranche of the private placement, consisting of 21,700,030
common shares of the Corporation to be issued at a price of C$1.00 each for
gross proceeds to the Corporation of C$21,700,030 (the "Second Tranche").
    The Corporation has been advised by Mr. McEwen that he has not been able
to acquire the bank loan and related security from Macquarie. Therefore, the
Corporation and Mr. McEwen will now complete the Second Tranche. The proceeds
from the Second Tranche will be used to repay Macquarie in full.
    The Corporation applied to the Toronto Stock Exchange (the "TSX") under
the provisions of Section 604(e) of the TSX Company Manual for an exemption
from securityholder approval requirements in respect of the issue of an
aggregate of 40,000,000 common shares to Mr. McEwen in the First Tranche and
the Second Tranche on the basis that the Corporation is in serious financial
difficulty. The details of those financial difficulties have been the subject
of previous news releases by Minera Andes.
    With its financial condition improved, the Corporation will be in a
position to undertake a review of the options available to it for the medium
and longer-term.
    The transactions with Mr. McEwen described above are also related party
transactions for the purposes of Multilateral Instrument 61-101 Protection of
Minority Shareholders in Special Transactions. The Corporation is relying on
certain exemptions set out in such Instrument from provisions that would
otherwise require the Corporation to obtain a formal valuation and the
approval of its minority shareholders in connection with the private
placement.
    The common shares of the Corporation purchased by Mr. McEwen in the First
Tranche represented approximately 9.6% of the number of outstanding common
shares prior to giving effect to the First Tranche and increased Mr. McEwen's
beneficial ownership of common shares (which for this purpose includes 100,000
common shares issuable upon exercise of stock options held by Mr. McEwen) from
46,157,143 common shares (approximately 24.3% of the outstanding common
shares) to 64,457,113 common shares (approximately 30.9% of the outstanding
common shares). The common shares that will be acquired in the Second Tranche
represent approximately 11.4% of the number of outstanding common shares prior
to giving effect to the First or Second Tranche, and will increase Mr.
McEwen's beneficial ownership to 86,157,143 common shares (approximately 37.4%
of the outstanding common shares). To the best of the knowledge of Minera
Andes, upon completion of the Second Tranche, the only person who will
beneficially own, directly or indirectly, more than 10% of the Corporation's
common shares is Mr. McEwen.
    Pursuant to a subscription agreement between the Corporation and Mr.
McEwen entered into in December 2005, until December 21, 2010 Mr. McEwen has
the right to nominate one person to the Board of Directors of Minera Andes, so
long as Mr. McEwen owns not less than 10% of the outstanding common shares of
the Corporation and assuming the exercise of any warrants held by him. Mr.
McEwen himself joined the Board of Directors of Minera Andes on August 8,
2008, upon the exercise of this right. Pursuant to the subscription agreement
for the First Tranche and the Second Tranche, Mr. McEwen was given the right
to nominate an additional two directors, with the result that he now has the
right to nominate a total of three directors to Minera Andes' Board of
Directors. Messrs. Richard Brissenden and Michael Stein were appointed as
directors of Minera Andes on February 23, 2009 pursuant to the exercise of
this right.

    Minera Andes is a gold, silver and copper exploration company working in
Argentina. The Corporation holds approximately 304,000 acres of mineral
exploration land in Argentina. Minera Andes holds a 49% interest in the San
José Project, an operating gold and silver mine. Minera Andes is also
exploring the Los Azules copper project in San Juan province, where an
exploration program has defined a resource and a preliminary assessment has
been completed. Other exploration properties, primarily silver and gold, are
being evaluated in southern Argentina. The Corporation presently has
208,458,821 common shares issued and outstanding.

    This news release is submitted by Allen V. Ambrose, President and Chief
Executive Officer of Minera Andes Inc.

    Caution Concerning Forward-Looking Statements:

    This press release contains certain forward-looking statement and
information. The forward-looking statements and information express, as at the
date of this press release, the Corporation's plans, estimates, forecasts,
projections, expectations or beliefs as to future events and results.
Forward-looking statements involve a number of risks and uncertainties, and
there can be no assurance that such statements will prove to be accurate.
Therefore, actual results and future events could differ materially from those
anticipated in such statements. Risks and uncertainties that could cause
results or future events to differ materially from current expectations
expressed or implied by the forward-looking statements include, but are not
limited to, factors associated with fluctuations in the market price of
precious metals, mining industry risks, risks associated with foreign
operations, the state of the capital markets, environmental risks and hazards,
uncertainty as to calculation of mineral reserves and other risks.





For further information:

For further information: Art Johnson at the Spokane office, or Krister
A. Kottmeier, investor relations - Canada, at the Vancouver office. Visit our
Web site: www.minandes.com; Spokane Office, 111 East Magnesium Road, Ste. A,
Spokane, WA, 99208 USA, Phone: (509) 921-7322, E-mail: info@minandes.com;
Vancouver Office, 911-470 Granville Street, Vancouver, B.C., V6C 1V5, Phone:
(604) 689-7017, (877) 689-7018, E-mail: ircanada@minandes.com

Organization Profile

MINERA ANDES INC.

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