The news that Rob McEwen
had put together a $40m financing deal for Minera Andes
that would give him 53% control of the compayn has tipped Hochchild’s (HOC.L) hand. It turns out HOC.L privately offered $70m for Minera’s 49% of the San José mine in Argentina….aka the 49% HOC doesn’t already own.
What the hell was HOC trying to achieve here? It’s pretty clear that the company has tried to muscle in and grab full control by making a cash call they knew MAI.to couldn’t easily cover and then lowballing for the whole asset. Are you surprised that McEwen, a Minera board member that would have known all about the deal, has done the corporate equivalent of giving HOC.L the finger?
Thus Hochschild once again proves it’s a total klutz when it comes to doing deals. We can now add this one to recent Hochschild screwups such as selling Caylloma, a mine packed full of silver and profit, to Fortuna when HOC thought it was depleted. And let’s not forget the Lake Shore Gold fiasco, too.
But what it does mean is that MAI.to is in play. Let’s see if HOC.L comes back at them with a counterbid, as the original $70m mentioned is derisory for 49% of this asset; they put double that on the table and then people might take them seriously.
PS: Here’s Mineweb with more details
Minera Andes (MAI.to): Suddenly it’s a raging buy… (February 16th 2009)