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Minera and shareholder McEwen amend terms of CDN$40 mln placement

Last updated: 15:00 17 Feb 2009 AEDT, First published: 16:00 17 Feb 2009 AEDT

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Minera Andes Inc said it agreed with director and existing shareholder Robert R McEwen on amended terms for the private placement first announced on February 9, notably an increase in the price McEwen is paying for Minera Andes shares to CDN$1 from CDN$0.33 each.

Under the new terms McEwen will purchase 18,299,970 shares in the company at a price of CDN$1 each, with US$11.3 million of the money raised to satisfy Minera’s share of Hochschild’s cash call in respect of its 49 percent San José stake. McEwen will also assume the bank loan owing by Minera to Macquarie Bank Ltd in the aggregate principal amount of US$17.5 million.

The original terms envisaged McEwen taking 121,212,121 Minera shares in a private placement at CDN$0.33 each, raising CDN$40 million for funding the cash call and to repay Macquarie.

The planned fundraising was criticised on February 10 by Hochschild which noted that it had made a share offer the previous week for Minera, valuing the company at nearly double the amount per share agreed between Minera and McEwen.

In today’s statement, Minera said Macquarie has agreed to transfer the loan to McEwen. However, this still requires Hochschild consenting to transferring the security in the San José project from Macquarie to McEwen.

If agreement is not reached with either or both of Macquarie and Hochschild by the close of business in Toronto on February 25, 2009, McEwen will purchase a total of 21,700,030 Minera shares at CDN$1 per share and the company will repay Macquarie directly.

The bank loan, once assumed by McEwen, will be convertible at his option at CDN$1 per share for a total of 21,700,030 shares.

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