Vancouver —
The deal has the ex-CEO and chairman of
The initial tranche will give McEwen a 14.2% interest in the company, exclusive of the warrants. Completion of the second tranche will give him 23.5% ownership. He also will have the right to nominate a director and to participate in future financings.
Funds will be primarily allocated towards ongoing development and exploration on the San Jos gold-silver project in southern Argentina’s Santa Cruz province. A recently completed feasibility study indicated positive economics for development of the Frea and Huevos Verdes veins.
The study reviewed proven and probable reserves of almost 1.2 million tonnes grading 7.7 grams gold per tonne and 406 grams silver per tonne (for 288,000 oz. gold and 15.2 million oz. silver). A proposed 750-tonne-per-day underground operation is expected to produce almost 61,000 oz. gold and 3.1 million oz. silver annually over a 4.3-year mine life.
San Jos is 49%-owned by Minera Andes and 51% by project operator Mauricio Hochschild, a specialist in underground mining of vein-hosted metal deposits.
Following the announcement of McEwen’s investment on Dec. 21, investors leapt on the stock to rally Minera Andes’ share price 12% to close at 52 per share on high volume.
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