TSX: MAI
NASD-OTCBB: MNEAF
SPOKANE, WA, Feb. 2 /PRNewswire-FirstCall/ - Minera Andes Inc. (the "Corporation" or "Minera Andes", TSX:MAI and US OTC:MNEAF) intends to file substantially revised management discussion and analysis of financial condition and results of operations for the nine and three month periods ended September 30, 2008 (the "Revised MD&A") and annual information form for the financial year ended December 31, 2007 (the "Revised AIF").
The nature and substance of the Revised MD&A and the Revised AIF include amendments to comply with the form requirements of National Instrument 51-102 - Continuous Disclosure Obligations and to provide additional information regarding the Corporation's joint venture interest in the San Jose Project and update the Corporation's financial position.
Title to the San Jose Project is held by Minera Santa Cruz S.A. ("MSC"), an Argentinean corporation which is owned, as to 49%, by Minera Andes, and as to 51%, by Hochschild Mining plc ("Hochschild").
Specifically, the Revised MD&A and Revised AIF will make it clear that:
- MSC has made a cash call of $23 million (all amounts are in US
dollars), of which the Corporation's share is $11.3 million, due on
February 17, 2009 and a failure by the Corporation to pay such amount
may result in a reduction of our interest in the San Jose Project;
- by the terms of the Corporation's credit agreement (the "Credit
Agreement") with Macquarie Bank Limited ("Macquarie"), the sum of
$7.5 million is scheduled to be repaid in March 2009;
- the Corporation currently has approximately $2.5 million in cash and
cash equivalents;
- the Corporation's lack of available cash and cash equivalents,
constitutes an event of default under the Credit Agreement entitling
Macquarie to demand payment of the entire principal amount of
$17.5 million due thereunder (plus accrued interest), which it has
not done;
- the Corporation's obligations under the Credit Agreement are secured
by all of the Corporation's present and after-acquired property;
- Hochschild has made project loans to MSC, in the aggregate principal
amount of $65 million for the development of the project which loans
(plus accrued interest) are to be repaid from the operating cash of
MSC in priority to any other distributions to the shareholders of
MSC;
- the Corporation has no control or influence over the strategic
operating, investing and financing policies of MSC, including the
amount and timing of any cash call, and that in the past, decisions
have been made, notwithstanding the Corporation's opposition; and
- there can be no assurance that additional cash calls will not be made
or that the Corporation will have the funds available to satisfy any
such cash call, as and when due, and that our interest in the San
Jose Project will not be reduced as a result.
The Corporation is assessing all of the options available to it to raise the required financing to pay the cash call of $11.3 million, satisfy our debt obligation to Macquarie and maintain our ability to meet our planned growth and development. There can be no assurance that the Corporation will be successful in securing the required funding.
The refiling of this disclosure is part a result of the Corporation's response to a review of its continuous disclosure record by the Alberta Securities Commission. When completed, the Revised MD&A, the Revised AIF and the restated interim financial statements will be available for review on www.sedar.com.
Minera Andes is a gold, silver and copper exploration company working in Argentina. The Company holds approximately 304,000 acres of mineral exploration land in Argentina. Minera Andes is also exploring the Los Azules copper project in San Juan province, where an exploration program has defined a resource and a scoping study is underway. 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 is submitted by Allen V. Ambrose, President and Director 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. 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.
