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Thursday, June 23, 2011 9:40:16 PM
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.
Technical Details
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 will be vigorously defending its legal position and 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.
http://www.tnrgoldcorp.com/s/LosAzules.asp
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