SPOKANE, Wash., Oct. 21, 2004 (PRIMEZONE) -- Minera Andes Inc. (TSX Venture Exchange:MAI) (OTCBB:MNEAF) has accepted an offer letter from Macquarie Bank Limited to provide a loan facility of up to $4 million. This facility is to be provided in two tranches to provide funding to Minera for its 49% portion of the costs of completing a bankable feasibility study and related development work for the San Jose/Huevos Verdes gold/silver project in Argentina. Macquarie Bank Limited ("Macquarie") is an international banking group active in providing project financing to the mining sector.
The US$4 million debt facility to be provided by Macquarie is subject to completion of documentation and certain regulatory approvals. It consists of an initial tranche of US$2.0 million available for two-years from draw-down and a further facility of US$2 million to be provided prior to 30 June 2005, subject to achievement of positive exploration and development at Huevos Verdes to the satisfaction of Macquarie. This facility will act as bridge financing for Minera Andes' share of the costs of completing a feasibility study and initial work with respect to establishing a mine at Huevos Verdes.
The commercial terms of the loan include a facility fee of 1.5% of the principal amount of the initial tranche and interest of Libor plus 2% p.a., currently totaling approx 4.1%p.a. In addition Minera is to provide share purchase warrants to acquire approx 2,738,700 MM Common Shares of Minera Andes at an exercise price of approx C$0.91 per share. The warrants exercise price is calculated at a 20 percent premium to the volume weighted average of Minera's common stock determined from the ten business days prior to acceptance of this offer. Each warrant is to be exercisable for two years. Additional share purchase warrants may be issued in regard to the second tranche of US$2.0 million, on terms calculated in a similar manner at that time, upon fulfillment of conditions precedent for that tranche.
Macquarie Bank, headquartered in Australia, was established in 1969 and provides specialist investment banking and financial services in select markets around the world. Macquarie Bank listed on the Australian Stock Exchange in 1996 and has reported successive years of record profits and growth since 1992. Macquarie Bank currently employs over 5,000 people in 17 countries.
Drawdown of the initial tranche of this finance facility is subject to completion of documentation, receipt of regulatory approval and certain approvals of Mauricio Hochschild & Cia. Ltda., Minera Andes' joint venture partner at Huevos Verdes. Separately, the company has terminated discussions with RMB Resources Limited regarding provision of debt facilities, previously announced in the press release dated 24th of September 2004.
Minera Andes is funded with working capital of approximately US$3.2 million for its exploration and underground construction programs. Minera Andes is a mining exploration company focused on gold, silver and copper exploration in Argentina where it holds about 200,000 hectares (500,000 acres) of mineral exploration land and co-owns the advanced stage San Jose/Huevos Verdes gold/silver project now under construction for possible mine production, with a feasibility study underway. Minera Andes has also discovered an enriched copper zone at its Los Azules property, and is acquiring other exploration targets in southern Argentina. The Corporation presently has 70,750,928 issued and outstanding shares.
For further information, please contact: Art Johnson at the Spokane office, or Krister A. Kottmeier, investor relations -- Canada, at the Vancouver office. Visit our Web site: www.minandes.com.
FORWARD-LOOKING STATEMENT- Although Minera Andes believes many of its properties have promising potential, its properties are in the early stages of exploration. None have yet been shown to contain proven or probable mineral reserves. There can be no assurance that such reserves will be identified on any property, or that, if identified, mineralization may be economically extracted. There can be no assurance that the San Jose/Huevos Verdes gold/silver project will be found to be economically feasible or that a mine will successfully be constructed. In addition, Minera Andes' joint venture partner, Mauricio Hochschild & Cia. Ltda., does not accept responsibility for the use of project data or the adequacy or accuracy of this release.
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