Extorre Gold Mines Limited (TSX:XG.TO - News) (NYSE Amex:XG - News) (FRANKFURT:E1R.F - News) ("Extorre" or the "Company) wishes to provide its insight on the proposed acquisition by the Argentine Federal Government of 51% of the Argentine oil company, Yacimientos Petroliferos Fiscales (YPF), from Spanish Oil Company Repsol.
It is important to note that there are significant differences in regulations, tradition, public importance and internal use of products between the oil & gas sector and the mining industry in Argentina. Public policy in one sector is not connected with the other.
Furthermore, the Argentinean Government initiative currently under discussion before Congress has been enacted only in connection with YPF which has a long Argentinean history. Extorre notes that YPF was State owned from its inception in the early 1920's until the late 1990's, when it was privatized and a majority stake sold to Repsol. The current re-nationalization process of YPF has not been extended to other oil & gas companies operating in Argentina.
There is no reported agenda in the popular press or, to Extorre's knowledge, to extend the nationalization process to any other company in the oil and gas sector in Argentina or to any other sector of the economy. Additionally, recently, several mining Provinces have joined an alliance in support of mining with the acknowledgment of the Argentinean Government and none of the objectives of that alliance relate to any action or policy similar to the one taken in connection with YPF. The mining sector has also received explicit public support from the Provinces and the Federal Government.
Several other mining companies operating in Argentina have publicly commented on this situation in terms similar to Extorre's view.
Very recent discussions with potential financiers to provide capital for the potential development of Cerro Moro have indicated that the YPF action has not materially affected the finance ability of the project.
