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Hochschild, Minera Andes settle lawsuit
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21st September 2010
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TORONTO (miningweekly.com) – LSE-listed Hochschild Mining and Canadian partner Minera Andes have agreed to settle a legal dispute, the firms announced on Monday.

The two companies have a joint venture (JV) on the San Jose precious-metals mine in Argentina, and have had a bumpy relationship over the last few years.

In April, Hochschild filed a lawsuit asking a New York court to force Minera Andes to execute formal loan agreement documents for a $65-million project finance loan provided by Hochschild to the joint-venture company for construction of the San Jose project.

The companies have now signed agreements on both the project finance loan and the restructuring of a 2004 shareholder loan agreement and Hochschild has agreed to drop the litigation.

Hochschild, which owns 51% of San Jose, has also agreed to give Minera Andes a right to consent on certain extraordinary capital spending for the mine, not including regular sustaining capital and only in certain limited circumstances.

The San Jose mine, which started up in 2007, produced around five-million ounces of silver and 77 000 oz of gold last year.

Speaking at the Denver Gold Forum on Monday, Minera Andes CEO Rob McEwen pointed out that San Jose, as well as a big package of exploration land that is wholly owned by Minera Andes, is right next door to Andean Resources' Cerro Negro project.

Canada's second-biggest gold-miner, Goldcorp, agreed earlier this month to pay C$3,6-billion for Andean, in order to gain control of Cerro Negro.

“The lawsuit's over and now we step out and move forward faster,” McEwen said.

“Now we can get going, start drilling and finding another Andean Resources next to us,” McEwen commented.

Minera Andes also owns the Los Azules copper project in Argentina, where the company has outlined an indicated resource of 2,2-billion pounds of copper and more than ten-billion pounds of copper in the inferred category.

Edited by: Liezel Hill

 

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