SPOKANE, WA, Feb. 9 /CNW/ - Minera Andes Inc. (the "Corporation" or
"Minera Andes", TSX:MAI and US OTC:MNEAF) announced today that it has entered
into a letter agreement with Robert R. McEwen, a director and existing
shareholder of the Corporation, pursuant to which Mr. McEwen or an affiliate
of Mr. McEwen will purchase, on a private placement basis, 121,212,121 common
shares of the Corporation (the "Offered Shares") at a price of C$0.33 per
share, for proceeds of C$40.0 million. The subscription price is equal to the
closing price of the Corporation's common shares on the Toronto Stock Exchange
(the "TSX") on February 4, 2009.
Closing of the offering is anticipated to occur on February 13, 2009
following close of trading on the TSX. Of the proceeds, approximately US$11.3
million will be applied to fund the Corporation's share of the cash call in
respect of its 49% interest in the San José Project and US$17.5 million will
be applied to repay the Corporation's outstanding indebtedness to Macquarie
Bank Limited. The balance of the proceeds will be used for general corporate
purposes and exploration.
The completion of the offering is subject to a number of conditions
including obtaining approval of the Toronto Stock Exchange ("TSX"). Mr. McEwen
presently owns, or exercises control or direction over, 46,057,143 common
shares, or 24.3% of the issued and outstanding common shares. The issuance of
the 121,212,121 common shares to Mr. McEwen pursuant to the proposed private
placement (which represents 63.7% of the currently issued and outstanding
190,158,851 common shares) will result in Mr. McEwen exercising control or
direction over 167,269,264 common shares, or approximately 53.7% of the then
issued and outstanding 311,370,972 common shares.
Under the TSX Company Manual, shareholder approval would be required as a
result of the fact that (i) the number of common shares issued pursuant to the
private placement will be in excess of 25% of the currently issued and
outstanding common shares of the Company at an issue price below the volume
weighted average price of the common shares on the TSX during the five trading
days up to and including February 4, 2009, the day preceding the date of the
letter agreement made between the Corporation and Mr. McEwen, and (ii) the
private placement will result in greater than 10% of the outstanding common
shares of the Corporation being issued to an insider of the Corporation.
The Corporation has applied to the TSX under the provisions of Section
604(e) of the TSX Company Manual for an exemption from securityholder approval
requirements. The members of the Special Committee of the Corporation's Board
of Directors, Allan Marter, Donald Quick and Victor Lazarovici (each of whom
is free from any interest in the offering), have authorized such application
and have concluded that the Corporation is in serious financial difficulty as
a result of the cash call for the San José Project and the outstanding bank
indebtedness, the private placement is intended to improve the Corporation's
financial situation, and the private placement is reasonable for the
Corporation under the circumstances.
The TSX has advised that the Corporation will automatically be subject,
in the ordinary course, to a de-listing review as a result of relying on the
financial hardship exemption under Section 604(e). The Corporation believes
that, upon completion of the private placement, it will be in compliance with
all of the TSX listing requirements.
The private placement will also be a related party transaction for the
purposes of Multilateral Instrument 61-101 Protection of Minority Shareholders
in Special Transactions. It is the intention of the Corporation to avail
itself of 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
Our joint venture partner in the San José Project, Hochschild Mining plc,
has offered the Corporation an extension to March 3, 2009 of the February 17,
2009 deadline for payment of the cash call, to allow for the complexities of
transferring funds to Argentina. The Corporation has accepted this offer, with
gratitude to Hochschild Mining plc.
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% interst 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
190,158,851 shares issued and outstanding.
This news release is submitted by Allan J. Marter, a Director and the
Chairman of the Special Committee of the Board of Directors of Minera Andes
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. In particular, there can be no assurance that
financing will be secured within the time required. 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, 111 East
Magnesium Road, Ste. A, Spokane, WA, 99208, USA, Phone: (509) 921-7322,
E-mail: firstname.lastname@example.org; or Krister A. Kottmeier, investor relations -
Canada, at the Vancouver office, 911-470 Granville Street, Vancouver, B.C.,
V6C 1V5, Phone: (604) 689-7017, 877-689-7018, E-mail: email@example.com.
Visit our Web site: www.minandes.com