McEwen tries to make a point with his furniture
Today in this PR, Minera Andes (MAI.to) announced that McEwen is buying 121m or so shares of the company. The immediate result is to put $40m in the coffers which easily covers the $11.3m cash call imposed on the company by Hochschild (HOC.L) as 51% owners and operators of the San José silver/gold mine in Argentina. It will also pay off the $17.5m debt it owes to Macquarie and leaves the company with $12m or so in working cap.
But the big ownership news is contained in this passage of the PR:
The issuance of the 121,212,121 common shares to Mr. McEwen pursuant to the proposed private placement (which represents 63.7% of the currently issued and outstanding 190,158,851 common shares) will result in Mr. McEwen exercising control or direction over 167,269,264 common shares, or approximately 53.7% of the then issued and outstanding 311,370,972 common shares.
Yup, McEwen just took control of the company. His stake in MAI.to dates back to when he was putting USGold (UXG) together to make a big move on the Nevada Cortez trend. As that hasn’t worked out so well (the truth machine and all that), mo’ MAI.to is a logical move.
The market likes the news so far; despite the massive dilution just announced, MAI.to is up 6.7% at $0.40. The good news (apart from the McEwen control) is that the company now has enough working capital to see it through. with silver spot now trading around $13/oz, Minera Andes may even begin to turn in profitable quarters in FY09; that’d be refreshing.
MAI.to was a favourite here for a long time, though it disappointed through 2008. Since the HOC.L cash call was announced your humble correspondent put it on the also-ran pile. Now it’s surely worth revisiting and looking at the company. DYODD, dude.