Hochschild sues Minera Andes

Finance

Publishing Date: 18 Mar 2010 3:00pm GMT
Author: Mining Journal

Hochschild Mining plc has filed a law suit against Minera Andes Inc, its partner on the San Josè silver mine in Argentina, seeking repayment on a US$65 million loan.

Minera Andes chairman Rob McEwen welcomed the news, saying it will favour shareholders.

“Regrettably, despite significant effort on the part of Minera Andes, it appears that the courts of the State of New York may provide our shareholders with the best venue for ensuring fair treatment by our joint-venture partner so that both parties can begin receiving the profits generated by the San Josè mine,” said Mr McEwan.

Hochschild owns a 51% interest in the project and Minera Andes 49%.

Hochschild is claiming that Minera Andes has refused to sign a formal loan agreement on the project for three years, preventing any funds from being distributed to the partners.

The company is seeking a decree by the court requiring Minera Andes to execute formal loan-agreement documents, consistent with previous agreements between the companies.

Minera Andes says that despite Hochschild’s claims, it has been willing to execute loan documentation that reflects a commercial agreement from October 2006. “We believe the details of the case will speak for itself,” said Minera Andes.

Hochschild says the law suit will have no impact on the running of the mine.