Argentina Mining Play

[Ed Monton]

McEwen: Argentina, Minera Andes Promising
By: Dorothy Kosich
Posted: '23-DEC-05 06:00' GMT © Mineweb 1997-2004

http://www.mineweb.net/sections/junior_mining/730325.htm

RENO--(Mineweb.com) Although, lately, mining entrepreneur Rob McEwen has bought major positions in a number of companies exploring in Nevada, McEwen took the industry by surprise by investing in a junior explorationist focused on Argentina.

McEwen has agreed to invest a total of Cdn.$10 million for a 23.5% shareholding in Spokane, Washington-based Minera Andes (MAI: TSX).

The former Chairman, President and CEO of Goldcorp, McEwen has already subscribed Cdn$5,395,159 for an aggregate of 12,414,740 units issued through private placement. The second private placement of 13,156,689 units will close 61 days after approval by the Minera Andes shareholders. Proceeds from these placements will be used for further development and exploration of the San Jose gold and silver project in southern Argentina.

In an interview with Mineweb Thursday, McEwen said he invested in Minera Andes for "a very strong management team, good geological backing, (and a) good track record."

"The area's promising," McEwen said, adding that Minera Andes has "met with great success using geophysical tools defining structure. Their mine is well underway and will be producing in the first half of '07. All of those things are very good."

"I think they're going to find a lot more gold there and a lot more of other minerals," he added. "Minera Andes has a large property package and they've been down there for quite a while. They have quite a lot of on the ground of experience."

In a news release, Minera Andes President and CEO Allen Ambrose said "we are pleased that a proven industry leader in the gold sector recognizes the value inherent in our company. The value in Minera Andes lies in the development of the advanced stage gold/silver project at San Jose, currently scheduled for production in the first quarter of 2007, and its significant exploration upside. In addition, we have a large portfolio of wholly owned exploration properties in Argentina, including the Los Azules copper property scheduled for drilling this field season."

In an interview with Mineweb Thursday, Ambrose explained that "as geologists, we were always attracted to Argentina being under explored, (and) under developed." He described the area has containing "a lot of vein systems and similar geological trends to Nevada," but lacking, however, a wave of modern exploration. "

"We're good explorationists, Ambrose said. "We know our way around Argentina, and built an incredible database. We've looked at a lot of things and have a lot of projects and ideas to look at to get to the next discovery. ... In Argentina, you can pick up, as we did, big land packages and control the whole area." Minera Andes holds about 500,000 acres of mineral exploration land in the country.

The San Jose project has proven and probable mineral reserves with 288,094 contained ounces of gold, 15,229,380 contained ounces of silver. The project has a capex of $61.26 million, an estimated mine life of 4.3 years, and an average operating cost of $200 per ounce of gold equivalent. Construction, which has already commenced, is expected to take a total of 14 months. MHC, a large private South American metal mining and cement production company, is the project operator with 51% while Minera Andes hold a 49% interest.

Although the project is located in the Patagonia region, it is in the Santa Cruz Province, a remote arid, area where other mining projects are based. A ban on cyanide has not been enacted in the province.