TNR subsidiary exercises Los Azules back-in
2010-04-26 09:19 ET - News Release
Mr. Gary Schellenberg reports
TNR GOLD SUBSIDIARY SERVES NOTICE OF BACK-IN INTO LOS AZULES TO MINERA ANDES AND SECURES STANDBY CREDIT FACILITY
Compania Minera Solitario Argentina S.A., a wholly owned subsidiary of TNR Gold Corp., has served notice to Minera Andes Inc., exercising its back-in right for 25 per cent of certain of the properties constituting the Los Azules project in Argentina. TNR also entered into a standby credit facility in the aggregate principal amount of $5-million for a term of one year. The proceeds from the facility have been placed in a trust account to be released on closing of the exercise of the back-in right.
TNR has issued 2,272,727 common shares to the lender as partial consideration for the facility, and has agreed to issue another $500,000 of common shares with a deemed price equal to the 10-day volume-weighted-average trading price as of the day prior to the court's decision in certain circumstances where TNR is successful in its litigation, with respect to the back-in right. In addition, TNR has paid a corporate finance fee of $305,000.
The right of TNR and Solitario to exercise the back-in right for the Los Azules project is subject to a legal action commenced by Minera Andes Inc., Minera Andes S.A., Los Azules Mining Inc. and Andes Corporacion Minera S.A. (the MAI group) against TNR and Solitaro, in which the MAI group is disputing Solitario's ability to waive the production of a feasibility study and issue a back-in notice at this time. The action seeks declaratory relief that any back-in notice is invalid, void or of no force and effect, and advances a claim for costs. TNR is also in a legal dispute with MIM Argentina Exploraciones S.A. (MIM), a subsidiary of Xstrata PLC, over the language of the back-in clause of the exploration and option agreement entered into between Solitario and MIM. In the action, TNR is also seeking confirmation of its ownership in the Escorpio IV property, which is located adjacent to the Los Azules project, and a declaration that the Escorpio IV property is excluded from the exploration and option agreement. A court date has been set for the fall of 2010.
