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Hochschild Mining confirms all share approach for Minera Andes

Last updated: 15:00 10 Feb 2009 AEDT, First published: 16:00 10 Feb 2009 AEDT

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Hochschild Mining, the South and North American silver producer,  confirmed that it made an all-share takeover offer last week for Minera Andes Inc (MAI), its joint venture partner at the San José project in Argentina.  

Hochschild issued a statement this morning detailing its offer in response to a Minera Andes announcement via the Toronto Stock Exchange yesterday that it would place 121.2 million shares at C$0.33 per share with Robert McEwen, a director of the company.

Hochschild said that its all share offer values Minera Andes at nearly twice the amount than director and existing shareholder Robert R McEwen is offering under the share placing deal.

In the statement, Hochschild said Minera Andes shareholders should be made aware that it approached the company on February 6 with a firm proposal to acquire the company, paying 0.22 Hochschild share for each Minera Andes share, which at the closing price on February 5, implies a value of  CDN$0.62 per share.

Hochschild also made an alternative proposal to acquire Minera Andes 49 percent stake in the San Jose joint venture for US$70 million, which in turn would represent approximately CDN$0.45 per Minera Andes share.

Yesterday Minera Andes announced an agreement with director and existing shareholder Robert R McEwen, under which he will buy 121.2 million shares in the company at C$0.33 each, raising C$40 million and giving McEwen 53.7% of the enlarged capital.

Minera Andes had said it would use approximately US$11.3 million of the money from the placement to fund its share of Hochschild’s cash call in respect of its 49 percent San José stake.

Hochschild said it also offered MAI an extra ten business days to contribute its pro-rata portion of the cash call due on February 17, as well as short-term bridge financing to the JV company Minera Santa Cruz, to give Minera Andes the opportunity to consider Hochschild’s proposals.
 
Hochschild also noted that its proposals do not expire until 5.00 pm London time on February 11 2009.

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