Minera Andes shares up 27% Monday

Minera Andes (TSX:T.MAI, Stock Forum) announced Monday that Robert R. McEwen, a director and existing shareholder of the company, will purchase more than 121 million common shares of Minera at 33 cents per share, for proceeds of $40 million.

Closing of the offering is expected after market close on February 13.

Of the proceeds, the company says US$11.3 million will be applied to fund its share of the cash call in respect of its 49% interest in the San Jose Project and US$17.5 million will be applied to repay its outstanding debt to Macquarie Bank. The balance will be used for general corporate purposes and exploration.

McEwen already owns 24.3% of the company’s issued and outstanding common shares, and following the proposed private placement, will exercise control over 53.7% of the company’s shares.

Minera Andes, a gold, silver and copper exploration company working in Argentina, says it has applied to the TSX for an exemption from securityholder approval requirements, with its board of director’s special committee concluding that the company is in serious financial difficulty as a result of the cash call for the San Jose Project and the outstanding bank indebtedness and that the private placement is intended to improve its financial situation.

As a result, the company will automatically be subject to a TSX de-listing review as a result of relying on the financial hardship exemption.

Minera Andes also notes that its joint venture partner in the San Jose Project, Hochschild Mining plc, has offered an extension to March 3 of the February 17 deadline for payment of the cash call.

On the company’s Bullboard, casey13 commented on the news, saying: “Wow. Huge vote of confidence and huge dilution. Double the amount I was expecting. Personally I was hopping for a debt/equity deal because of the low stock price but in these times???[sic]

Lousytiming added: “McEwen took a lot of risk out of our stock today and the market likes it. But I suspect there's lots more upside. I don't think McEwen is going to tie up all that capital for a 20 or 30% return[sic]”

Shares of Minera Andes were up 27% to 47 cents Monday

Noront closes placement Toronto-based Noront said Thursday that it has closed a private placement of 6.5 million security units for C$26 million. The units, which were sold at C$4 apiece and comprise one common share and one-half of one common share purchase warrant bearing a strike price of C$5 and an two-year maturity, were sold to six investors. The investors consist of investment companies Rosseau Asset Management, Pinetree Capital Ltd., Sprott Asset Management and Northfield Capital Corp., as well as mining players Robert McEwen of Evanachan Ltd. and U.S. Gold Corp. and
Pierre Lassonde of Franco-Nevada Corp.