As filed with the Securities and Exchange Commission on May 3, 1999
Registration No. 000-22731
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
Registration Statement Under the
Securities Act of 1933
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MINERA ANDES INC.
(Exact name of registrant as specified in its charter)
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ALBERTA, CANADA NONE
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3303 N. Sullivan Road
Spokane, WA 99216
(509) 921-7322 (telephone)
(509) 921-7325 (facsimile)
(Address, including zip code, and telephone and
facsimile numbers, including area code, of
registrant's principal executive offices)
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Allen V. Ambrose
Minera Andes Inc.
3303 N. Sullivan Road
Spokane, WA 99216
(509) 921-7322 (telephone)
(509) 921-7325 (facsimile)
(Name, address, including zip code,
and telephone and facsimile numbers, including area
code, of agent for service)
Copy to:
Ronald J. Lone
Stoel Rives LLP
One Union Square, 36th Floor
600 University Street
Seattle, WA 98101-3197
(206) 624-0900 (telephone)
(206) 386-7500 (facsimile)
Approximate date of commencement of proposed sale to the public:
From time to time after this registration statement becomes effective
If the only securities being registered on this Form are to be offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with a dividend or
interest reinvestment plan, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Title of Each Amount Proposed Maximum Proposed Maximum Amount of
Class of Securities to be Offering Price Per Aggregate Offering Registration
Registered Registered Share(1) Price(1) Fee
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<S> <C> <C> <C> <C>
Common Stock, 5,100,000 shares $0.39 $1,989,000.00 $553
no par value
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), under the Securities Act of 1933, as amended, based on
an estimated market price of $.39, which is the average of the high and low
prices for the Common Stock on the Nasdaq OTC Bulletin Board April 30, 1999.
</TABLE>
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The Registrant agrees that the Securities and Exchange Commission may consider
it to have filed an amendment to this Registration Statement on the date
necessary to delay this Registration Statement's effective date until either (1)
the Registrant files an amendment specifically stating that this Registration
Statement shall become effective under Section 8(a) of the Securities Act of
1933, as amended; or (2) until the date that the Securities and Exchange
Commission declares this Registration Statement to be effective.
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PROSPECTUS
Subject to Completion
dated May 3, 1999
MINERA ANDES INC.
5,100,000 Shares of Common Stock
MINERA ANDES INC. Minera Andes is engaged in the exploration and
3303 N. Sullivan Road development of mineral properties located in the
Spokane, WA 99216 Republic of Argentina.
(509) 921-7322
In this Prospectus, N.A. Degerstrom, Inc.
("Degerstrom" or the "Selling Shareholder") is
offering to sell up to 5,100,000 shares of Minera
Andes' Common Stock. Degerstrom may offer the
shares to the public on one or more exchanges, in
privately negotiated transactions, or otherwise, at
prices computed as follows:
MINERA ANDES' COMMON o fixed prices;
STOCK is listed on The o then-current market prices;
Alberta Stock Exchange o prices computed with formulas based on
under the symbol "MAI," then current market prices; or
and on the Nasdaq OTC o negotiated prices.
Bulletin Board under
the symbol "MNEAF." Minera Andes will not receive any proceeds
from the sale of the shares.
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This investment involves a high degree of risk. You should purchase the
shares only if you can afford a complete loss. See "Risk Factors" beginning on
page 5 before purchasing the shares.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved the shares, or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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_________________, 1999.
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Prospective investors may rely only on information contained in this
Prospectus. Neither Minera Andes nor the Selling Shareholder have authorized any
person to provide prospective investors with information different from that
contained in this Prospectus. This Prospectus is not an offering in any
jurisdiction where such offering is not permitted. The information contained in
this Prospectus is correct only as of the date of the Prospectus, regardless of
the time of the delivery of this Prospectus or any sale of the shares.
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TABLE OF CONTENTS
Section Page
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The Business of Minera Andes .................................... 3
Incorporation of Certain Documents by Reference ................. 3
Available Information ........................................... 4
Risk Factors .................................................... 5
Selling Shareholder ............................................. 9
Plan of Distribution ............................................ 9
Experts ......................................................... 10
Indemnification for Securities Act Liabilities................... 10
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THE BUSINESS OF MINERA ANDES
Minera Andes Inc. ("Minera Andes" or the "Corporation") is engaged in the
exploration and development of mineral properties located in the Republic of
Argentina. The Corporation's strategy is:
o to identify and acquire properties with promising mineral potential,
o to explore them to an advanced stage or to the feasibility study stage, and
o to pursue development of the properties, typically through joint ventures
or other collaborative arrangements with partners that have expertise in
mining operations.
The Corporation's business grew out of a program begun by Degerstrom, a
contract mining company based in Spokane, Washington, to identify properties in
Argentina that possessed promising mineral potential. Beginning in 1991,
Degerstrom identified a number of areas believed to have exploration potential
based on the study of available remote sensing satellite data and experience
gained from drilling work.
Degerstrom then began the process of filing applications for exploration
concessions with the provincial governments in Argentina and negotiating option
agreements with private landowners. Degerstrom incorporated the Corporation in
1994 in Alberta, Canada and conveyed these property interests to the
Corporation.
Degerstrom provides management services to the Corporation and acts as
operator of the Corporation's properties and projects pursuant to an operating
agreement entered into in March 1995 (the "Operating Agreement"). Under the
Operating Agreement, Degerstrom operates and manages exploration of the
Corporation's properties and provides related offsite administrative assistance
as required. In exchange for these services, the Corporation reimburses
Degerstrom for its direct out-of-pocket and certain allocated indirect costs and
expenses, and pays Degerstrom a management fee of 15% of its total costs.
The Corporation's current property interests consist of mineral rights and
applications for mineral rights covering approximately 210,000 hectares in six
provinces of Argentina including:
o option to purchase contracts,
o exploration and mining agreements, and
o applications for exploration concessions.
The Corporation's properties are all early stage exploration prospects. No
proven or probable mineral reserves have been identified at this time.
The Corporation is organized under the laws of Alberta, Canada. The head
office and principal business address of the Corporation is located at 3303
North Sullivan Road, Spokane, Washington, 99216. The registered address of the
Corporation is 1600, 407 2nd Street S.W., Calgary, Alberta, T2P 2Y3 Canada.
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INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE
The SEC allows the Corporation to "incorporate by reference" the
information we file with them, which means that the Corporation can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this
prospectus, and information that the Corporation files later
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with the SEC will automatically update and supersede previously filed
information, including information contained in this document.
The Corporation incorporates by reference the documents listed below and
any future filings we will make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 until this offering has been
completed:
(a) The Corporation's Annual Report on Form 10-KSB for the year ended
December 31, 1998;
(b) All other reports filed by the Corporation pursuant to sections 13(a),
13(c), 14, or 15(d) of the Exchange Act since the end of the fiscal year ended
December 31, 1998; and
(c) The description of the Corporation's Common Stock contained in the
Corporation's Registration Statement on Form 10-SB (Registration No. 000-22731),
filed June 20, 1997, including any amendment or report filed for the purpose of
updating such description.
You may request free copies of these filing by writing or telephoning us at the
following address:
Allen V. Ambrose
Minera Andes Inc.
3303 N. Sullivan Road
Spokane, WA 99216
(509) 921-7322
You may also review and/or download free copies of the above materials at the
SEC web site at http://www.sec.gov.
AVAILABLE INFORMATION
The Corporation files annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and copy any
reports, statements or other information on file at the SEC's public reference
room in Washington, D.C. You can request copies of these documents, upon payment
of a copying fee, by writing to the Public Reference Section of the SEC,
Washington, D.C. 20549.
The Corporation has filed a Registration Statement on Form S-3 with the SEC
in which it registered the shares offered by Degerstrom in this Prospectus for
resale. This Prospectus, which forms part of the Registration Statement, does
not contain all of the information included in the Registration Statement.
Certain information is omitted and you should refer to the Registration
Statement and its exhibits. With respect to references made in this Prospectus
to any contract or other document of the Corporation, such references are not
necessarily complete and you should refer to the exhibits attached to the
Registration Statement for copies of the actual contract or document. You may
review a copy of the Registration Statement at the SEC's public reference room
in Washington, D.C., and at the SEC's regional offices in Chicago, Illinois and
New York, New York. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. The Corporation's
SEC filings and the Registration Statement can also be reviewed by accessing the
SEC's Internet site at http://www.sec.gov.
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RISK FACTORS
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You should carefully consider the following factors and other
information in this Prospectus before deciding to invest in shares of
the Corporation's common stock. You should not purchase any of the
shares unless you can afford a complete loss of your investment.
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History of Losses. The Corporation was founded in 1994 and a majority of
its properties are early exploration stage properties. The Corporation has
experienced net losses in each year of operations and expects to incur further
losses in the near term. There can be no assurance that the Corporation will
become profitable in the near future or any other time. The success of the
Corporation will depend on its ability to explore and develop these properties,
the expertise of its management, the quality of its properties and its ability
to raise the necessary capital or enter into all necessary joint venture
arrangements to bring its properties into production.
Risks Inherent in Minerals Exploration. There are a number of uncertainties
inherent in any exploration or development program including:
o the location of economic ore bodies,
o the development of appropriate metallurgical processes, and
o the receipt of necessary governmental permits.
Substantial expenditures may be required to pursue such exploration and, if
warranted, development activities. Assuming discovery of an economic ore body
and depending on the type of mining operation involved, several years may elapse
from the initial stages of development until commercial production is commenced.
New projects frequently experience unexpected problems during the
exploration and development stages that frequently result in abandonment of the
properties as potential development projects. Most exploration projects do not
result in the discovery of minable deposits of ore. There can be no assurance
that the Corporation's exploration efforts will yield reserves or result in any
commercial mining operations.
Many of the properties that the Corporation intends to explore in Argentina
are the subject of applications for concessions, many of which have not yet been
granted. The filing of an application for concession grants the holder the
exclusive right to obtain the concession conditioned on the outcome of the
approval process. The approval process is an administrative procedure under the
authority of the Argentine Province in which the property is located. The
process includes a public notice and approval procedure allowing third parties
to give notice of opposition or prior claim, if any, before the title to the
concession is granted. The approval process may take many months to complete.
Although the Corporation believes that it has taken all necessary steps with
respect to the application, approval and registration process for the property
concessions it has currently applied for and property transactions to which it
is a party, there is no assurance that any or all applications will result in
issued concessions or that the public registrations will be timely approved.
Risks Inherent in the Mining Industry. Mining projects are highly
speculative and involve substantial risks, even when conducted on properties
known to contain significant quantities of mineralization. Mining projects are
subject to a variety of laws and regulations relating to:
o exploration,
o development,
o employee safety, and
o environmental protection
Mining activities are subject to substantial operating hazards including
rock bursts, cave-ins, fires and flooding, some of which are not insurable or
may not be insured for economic reasons. The Corporation currently has no
insurance against such risks. The Corporation may also incur liability as a
result of
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pollution and other casualties involved in the drilling and mining of ore. There
may be limited availability of water and power, which are essential to mining
operations, and interruptions may be caused by adverse weather conditions.
The Corporation, or its joint venture or investment partners, must obtain
necessary governmental approvals and make necessary capital expenditures before
production may commence on most of its projects. Bringing projects into
production will also require significant capital expenditures. The Corporation
may obtain funds for a portion of these capital expenditures from joint venture
or investment partners. However, there can be no assurance that the
Corporation's joint venture or investment partners will provide such funds or
that project financing will be available to the Corporation on acceptable terms.
The number of potential sources of third-party project financing for mining
projects is limited.
Competition. A large number of companies, many of which are significantly
larger and have greater financial and technical resources than the Corporation,
compete in the acquisition, exploration and development of mining properties.
These competitive pressures may have a material adverse effect on the
Corporation's operations and financial performance.
Need for Additional Capital. The exploration and, if warranted, development
of the Corporation's properties will require substantial financing. The
Corporation's ability to obtain additional financing will depend, among other
things, on the price of gold, silver, copper and other metals and the industry's
perception of their future price. Therefore, availability of funding depends
largely on factors outside of the Corporation's control, and cannot be
accurately predicted. Failure to obtain sufficient financing could result in
delay or indefinite postponement of exploration, development or production on
any or all of the Corporation's projects or loss of properties. For example,
certain of the agreements pursuant to which the Corporation has the right to
conduct exploration activities carry work commitments which, if not met, could
result in the Corporation losing its right to acquire an interest in the subject
property. There can be no assurance that additional capital or other types of
financing will be available when needed or that, if available, the terms of such
financing will be favorable to the Corporation.
Foreign Operations. All of the Corporation's properties are located in
Argentina. Argentina has recently emerged from periods of political and economic
instability. While current indications are that such instability is diminishing,
there are no guarantees that this will continue. Foreign properties, operations
and investments may be adversely affected by local political and economic
developments, including:
o nationalization,
o exchange controls,
o currency fluctuations,
o taxation,
o local laws or policies, and
o laws and policies of the United States and Canada affecting foreign trade,
investment and taxation.
It is important that the Corporation maintain good relationships with the
governments in Argentina. The Corporation may not be able to maintain such
relationships if the governments change. Argentina has and is developing new
bodies of law that will impact the conduct of business generally and mining
operations in particular. Future laws (including tax laws) could have a material
adverse effect on the conduct of the Corporation's business and mining
operations.
Difficulties in Developing Remote Areas. Many of the areas in which the
Corporation is conducting exploration and, if warranted, development activities
are in particularly remote and mountainous regions, with limited infrastructure
and limited access to essential resources. Exploration or development projects
in these areas may require the Corporation or its joint venture partners to
develop power sources, transportation systems and communications systems, and to
secure adequate supplies of fuel, machinery, equipment and spare parts.
Consequently, exploration and development in these areas is particularly
difficult, requiring significant capital expenditures, and may be subject to
cost over-runs or unanticipated delays.
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Fluctuation in the Price of Minerals. The market price of minerals is
volatile and beyond the control of the Corporation. If the price of a mineral
should drop dramatically, the value of the Corporation's properties which are
being explored or developed for that mineral could also drop dramatically and
the Corporation might not be able to recover its investment in those properties.
The decision to put a mine into production, and the commitment of the funds
necessary for that purpose, must be made long before the first revenues from
production will be received. Price fluctuations between the time that such a
decision is made and the commencement of production can completely change the
economics of the mine.
Although it is possible to protect against price fluctuations by hedging in
certain circumstances, the volatility of mineral prices represents a substantial
risk in the mining industry generally which no amount of planning or technical
expertise can eliminate. The Corporation has not in the past and does not expect
in the future to engage in hedging transactions that in certain circumstances
could protect against price fluctuations. Such price fluctuations could have a
material adverse effect on the Corporation's business and results of operations.
Environmental and Other Laws and Regulations. Mining operations and
exploration activities in Argentina are subject to various federal, provincial
and local laws and regulations governing:
o mineral rights,
o exploration, development and mining,
o exports,
o taxes,
o labor,
o protection of the environment, and
o other matters.
Compliance with such laws and regulations may necessitate significant
capital outlays, materially affect the economics of a given project, or cause
material changes or delays in the Corporation's intended activities. The
Corporation has obtained or is in the process of obtaining authorizations
currently required to conduct its operations. New or different standards imposed
by governmental authorities in the future, or amendments to current laws and
regulations governing operations and activities of mining companies or more
stringent implementation thereof, could have a material adverse impact on the
Corporation's business and results of operations.
Single Controlling Shareholder. Degerstrom beneficially owns approximately
26% of the outstanding voting securities of the Corporation. Degerstrom
therefore can exert significant influence in the election of the Corporation's
directors and have substantial voting power with respect to other matters
submitted to a vote of the shareholders. The interests of Degerstrom with
respect to any transaction involving actual or potential change in control of
the Corporation or other transactions may differ from those of the Corporation's
other shareholders.
Conflicts of Interest. Allen V. Ambrose, the Corporation's President and a
director, and certain other directors and officers of the Corporation are also
directors, officers or employees of Degerstrom, and of other natural resource
and mining companies. As a result, conflicts may arise between the obligations
of these directors to the Corporation and to these other entities. Certain
directors and officers of the Corporation have other employment or other
business or time restrictions placed on them and accordingly, these directors
and officers may not be able to devote full time to the affairs of the
Corporation.
Transactions With Degerstrom. The Operating Agreement between the
Corporation and Degerstrom is not the result of arm's-length negotiations
between independent parties. There can be no assurance that the Operating
Agreement or any future agreements will contain terms comparable to those that
would have resulted from negotiations between unaffiliated parties. Such
agreements may be amended by the Corporation and Degerstrom, by mutual
agreement. Degerstrom is not required to devote its personnel and resources
exclusively to, or for the benefit of, the Corporation. There can be no
assurance that the services to be provided by Degerstrom under the Operating
Agreement will be available to the Corporation at all times.
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Dependence on Key Personnel. The Corporation's success will be dependent
upon the services of certain executive officers, including Allen Ambrose and
Brian Gavin, who are also employees of Degerstrom. Degerstrom pays compensation
and provides other benefits to these individuals. The Corporation does not have
employment contracts with nor does it maintain key person life insurance for Mr.
Ambrose or Mr. Gavin. There can be no assurance that the Corporation will retain
its key personnel.
Limited Trading Market For Liquidating Investment. There currently is a
limited trading market for the Corporation's securities. There is no assurance
that an active trading market will ever develop. Investment in the Corporation
is not suitable for any investor who may have to liquidate such investment on a
timely basis and should only be considered by investors who are able to make a
long-term investment in the Corporation.
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Special Note Regarding Forward-Looking
Statements
Some of the statements contained in this Prospectus discuss
future expectations, contain projections or results of operations or
financial condition or state other "forward-looking" information.
These statements are subject to known and unknown risks, uncertainties
and other factors that could cause the actual results to differ from
those contemplated by the statements and, therefore, these statements
are not guarantees of Minera Andes' future performance.
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SELLING SHAREHOLDER
All of the 5,100,000 shares offered by this Prospectus are owned by
Degerstrom. Degerstrom initially acquired 4,000,000 shares of the Corporation in
connection with its conveyance of certain properties to the Corporation in 1995.
See, "The Business of Minera Andes." In January 1996, Degerstrom entered into a
subscription agreement with the Corporation for 500,000 units of the
Corporation, with each unit consisting of one share of Common Stock and a
warrant to purchase an additional share of Common Stock. In July 1996,
Degerstrom received the 500,000 shares and exercised the 500,000 warrants.
Degerstrom purchased on the open market an additional 100,000 shares in August
1998 in separate transactions of 75,000 and 25,000 shares.
Degerstrom is the Corporation's controlling shareholder, owning
approximately 26% of the Corporation's outstanding Common Stock. Since 1995,
Degerstrom has provided management services to the Corporation and has operated
the Corporation's properties under the Operating Agreement. See, "The Business
of Minera Andes." In addition, certain directors and officers of the Corporation
are also directors, officers or employees of Degerstrom. See, "Risk Factors -
Single Controlling Shareholder and Transactions With Degerstrom; Dependence on
Key Personnel."
The following table sets forth certain information given to the Corporation
by the Selling Shareholder as of April 16, 1999.
Shares of Common Stock
Selling Shareholder Beneficially Owned Shares Offered for Sale
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N.A. Degerstrom, Inc. 5,100,000 5,100,000
If all of the shares being offered are sold, the Selling Shareholder
will not own any shares of Common Stock after the completion of the Offering.
However, the Selling Shareholder is not obliged to sell any of the shares
offered by it in this Prospectus.
PLAN OF DISTRIBUTION
The shares offered in this Prospectus may be sold from time to time by the
Selling Shareholder, or by pledgees, donees, transferees or other successors in
interest. Such sales may be made on one or more exchanges, in privately
negotiated transactions, or otherwise at market prices then prevailing or at
prices related to the then-current market price, at fixed prices that may be
changed, or at negotiated prices. The shares may be sold to or through brokers
or dealers, who may act as agent or principal, or in direct transactions between
the Selling Shareholder and purchasers.
Transactions involving brokers or dealers may include:
o ordinary brokerage transactions,
o transactions in which the broker or dealer solicits purchasers,
o block trades in which the broker or dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction, and
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o purchases by a broker or dealer as a principal and resale by such
broker or dealer for its account.
In effecting sales, brokers and dealers engaged by the Selling Shareholder or
the purchasers of the shares may arrange for other brokers or dealers to
participate. Such brokers or dealers may receive discounts, concessions or
commissions from the Selling Shareholder, the purchasers of the shares for whom
such broker or dealer may act as agent or to whom they may sell as principal, or
both (which compensation as to a particular broker or dealer may be in excess of
customary commissions). The Selling Shareholder and such brokers and dealers who
act in connection with the sale of shares may be deemed to be "underwriters"
within the meaning of the Securities Act, and any commissions received by them
and any profit on any resale of the shares as principal may be deemed to be
underwriting discounts and commissions under the Securities Act.
Including and without limiting the foregoing, in connection with
distributions of the shares, the Selling Shareholder may enter into hedging
transactions with brokers or dealers and the brokers or dealers may engage in
short sales of the shares in the course of hedging the positions they assume
with the Selling Shareholder. The Selling Shareholder also may enter into option
or other transactions with brokers or dealers that involve the delivery of the
shares to the brokers or dealers, who may then resell or otherwise transfer such
shares. The Selling Shareholder also may loan or pledge the shares to a broker
or dealer and the broker or dealer may sell the shares so loaned or upon default
may sell or otherwise transfer the pledged shares.
The Corporation is bearing all costs relating to the registration of the
shares. Any commissions, discounts or other fees payable to brokers or dealers
in connection with any sale of the shares will be borne by the Selling
Shareholder, the purchasers participating in such transaction, or both. None of
the proceeds from the sale of the shares by the Selling Shareholder will be
received by the Corporation.
Any shares covered by this Prospectus that qualify for sale pursuant to
Rule 144 under the Securities Act of 1933, as amended (the "Securities Act") may
be sold under Rule 144 rather than pursuant to this Prospectus.
EXPERTS
The consolidated balance sheets as of December 31, 1998 and 1997, and the
consolidated statements of operations and accumulated deficit, mineral
properties and deferred exploration costs, and changes in financial position for
the years then ended, incorporated by reference in this prospectus, have been
incorporated herein in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
The consolidated balance sheet as of December 31, 1996, and the
consolidated statements of operations and accumulated deficit, mineral
properties and deferred exploration costs, and changes in financial position for
the year then ended, incorporated by reference in this prospectus, have been
incorporated herein in reliance on the report of MacKay & Partners, independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Corporation pursuant to its Bylaws, Articles of Incorporation, or otherwise,
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the Corporation has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
All expenses in connection with the issuance and distribution of the shares
will be paid by the Corporation. The following is an itemized statement of these
expenses (all amounts are estimated except for the SEC registration fee:
SEC registration fee................................ $ 553
Legal fees.......................................... $ 4,000
Accountant's fees................................... $ 500
Printing fees....................................... $ 0
Taxes............................................... $ 0
Miscellaneous...................................... $ 250
Total............................................... $ 5,303
Item 15. Indemnification of Officers and Directors.
The Bylaws of the Corporation provide that no director or officer shall be
personally liable for acts or omissions in the exercise of the powers and
discharge of the duties of his or her office, excluding liability arising from
such director's or officer's wilful neglect. In addition, the Bylaws provide
that the Corporation shall indemnify a director or officer, former director or
officer, and persons acting as director or officer of another company in which
the Corporation is a shareholder at the request of the Corporation, against all
monetary liabilities arising with respect to any action or proceeding to which
such director or officer is a party, provided that the director or officer acted
honestly and in good faith with a view to the best interests of the Corporation,
and in the event of a criminal proceeding, that the director or officer had
reasonable grounds for believing that his or her conduct was lawful. The Bylaws
also provide that the Corporation may purchase and maintain insurance for the
benefit of officers or directors against liabilities arising as a result of the
Corporation's indemnification obligations. The limits on director and officer
liability, the indemnification of directors and officers, and the purchase of
insurance against indemnification liabilities provided for in the Bylaws of the
Corporation are all subject to restrictions under the Business Corporations Act,
Alberta, as amended.
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Item 16. Exhibits.
Exhibit
Number Description
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2.1 Asset and Share Acquisition Agreement between MASA, NADSA, the
Corporation, Degerstrom, Brian Gavin, Jorge Vargas and Enrique
Rufino Marzari Elizalde, dated March 8, 1995, as amended on April
19, 1996. (1)
5.1 Opinion on Legality.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Mackay & Partners.
24.1 Power of Attorney.
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(1) Incorporated by reference to the Corporation's Registration Statement on
Form 10-SB (Registration No. 000-22731), filed June 20, 1997.
Item 17. Undertakings.
(a) The Corporation hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or
the most recent post-effective amendment thereof) that,
individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration
Statement; and
(iii) To include any additional or changed material information
with respect to the plan of distribution;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is incorporated by
reference from periodic reports filed by the registrant pursuant
to Section 13 or Section 15(d) of the Exchange Act.
-12-
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain
unsold at the termination of the offering.
(b) The Corporation hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the Corporation has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
the payment by the Corporation of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Corporation will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question,
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
-13-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Spokane, State of Washington, on May 3, 1999.
MINERA ANDES INC.
By: /s/ ALLEN V. AMBROSE
-------------------------------------
Allen V. Ambrose
President
KNOW BY ALL THESE PRESENTS that each person whose signature appears below
hereby authorizes and appoints Allen V. Ambrose and Allan J. Marter, and each of
them, with full power of substitution and full power to act without the other,
as such person's true and lawful attorney-in-fact and agent to act in such
person's name, place and stead and to execute in the name and on behalf of each
file, any and all amendments to this Registration Statement, including any and
all post effective amendments.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on May 3, 1999.
/s/ ALLEN V. AMBROSE /s/ JOHN JOHNSON CRABB
- ------------------------------------- -------------------------------------
Allen V. Ambrose, President and John Johnson Crabb, Director
Director (Principal Executive
Officer)
/s/ ARMAND HANSEN
- ------------------------------------- -------------------------------------
Armand Hansen, Director A.D. Drummond, Director
/s/ ALLAN J. MARTER /s/ BONNIE L. KUHN
- ------------------------------------- -------------------------------------
Allan J. Marter Bonnie L. Kuhn, Director
Chief Financial Officer and Director
(Principal Financial and Accounting
Officer)
-14-
<PAGE>
Exhibit Index
Exhibit
Number Description
- ------- -----------
2.1 Asset and Share Acquisition Agreement between MASA, NADSA, the
Corporation, Degerstrom, Brian Gavin, Jorge Vargas and Enrique
Rufino Marzari Elizalde, dated March 8, 1995, as amended on April
19, 1996. (1)
5.1 Opinion on Legality.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Mackay & Partners.
24.1 Power of Attorney.
- --------------
(1) Incorporated by reference to the Corporation's Registration Statement on
Form 10-SB (Registration No. 000-22731), filed June 20, 1997.
-15-
May 3, 1999
THE BOARD OF DIRECTORS OF MINERA ANDES INC.
3303 North Sullivan Road
Spokane, Washington
USA 99216
Dear Sirs/Mesdames:
RE: MINERA ANDES INC. (the "Corporation")
We have acted as counsel for the Corporation in connection with the filing of a
Registration Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, as amended. The Registration Statement relates to the
registration for resale of up to 5,100,000 common shares of the Corporation (the
"Shares").
We have examined such documents and have considered such questions of law as we
have considered relevant and necessary as a basis for the opinions hereinafter
set forth. As to various questions of fact material to such opinions and which
were not independently established, we have relied upon certificates of public
officials, copies of which have been delivered to you today, and on the minute
books of the Corporation. In such examination we have assumed the genuineness of
all signatures and the authenticity of all documents submitted to us as
originals and the conformity to authentic originals of all documents submitted
to us as certified, notarial or true copies or reproductions. In addition, we
have assumed that the minute books of the Corporation are a complete record of
minutes, resolutions and other proceedings of the directors and shareholders of
the Corporation.
For the purposes of the opinion expressed in paragraph 1 hereof, we have relied
as to certain factual matters on a Certificate of Status dated April 16, 1999,
issued by the Registrar of Corporations, Alberta, a copy of which has been
delivered to you today.
We are qualified to practice law only in the Province of Alberta and our
opinions herein are restricted to the laws of the Province of Alberta and the
federal laws of Canada applicable therein, as of the date of this opinion. We do
not undertake to advise the addressee hereof as to any changes in the laws of
the Province of Alberta and the federal laws of Canada applicable therein after
the date of this opinion.
For the purposes of the opinion set forth in paragraph 3 hereof, we have assumed
that the Shares issued by the Corporation were fully paid for in money or in
property or for past service that is not less in value than the fair equivalent
of the money that the Corporation would have received if the Shares had been
issued for money.
Based upon the foregoing and subject to the qualifications hereinafter
expressed, we herein express the following opinions:
1. The Corporation is a valid and subsisting corporation under the laws of the
Province of Alberta, Canada;
2. The Shares are duly authorized common shares in the capital of the
Corporation; and
<PAGE>
April 16, 1999
THE BOARD OF DIRECTORS OF MINERA ANDES, INC.
Page 2 of 2
3. The Shares are issued and, when sold in the manner described as in the
Registration Statement, will be validly issued, fully paid and
nonassessable.
This opinion is being furnished for the sole benefit of the addressee hereof and
may not be used, circulated, quoted, relied upon, distributed, or otherwise
referred to by any other person or entity or for any other purpose without our
prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Yours very truly,
/s/ ARMSTRONG PERKINS HUDSON
Exhibit 23.1
Consent of Independent Accountants
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report dated February 18, 1999, except for Note 12, as to which
the date is March 8, 1999, on our audit of the financial statements of Minera
Andes, Inc. We also consent to the reference to our firm under the caption
"Experts."
/s/ PRICEWATERHOUSECOOPERS LLP
Vancouver, B.C., Canada
May 3, 1999
Exhibit 23.2
Consent of Independent Accountants
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report dated February 20, 1997, on our audit of the financial
statements of Minera Andes, Inc. as of December 31, 1996 for the year then
ended. We also consent to the reference to our firm under the caption "Experts."
/s/ MACKAY & PARTNERS
Chartered Accountants
Vancouver, British Columbia, Canada
May 3, 1999
Exhibit 24.1
POWER OF ATTORNEY FOR FORM S-3 REGISTRATION STATEMENT
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints ALLEN V. AMBROSE, with full power to act, his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement on Form S-3, and file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratify and conform all that
said attorney-in-fact and agent, or his substitutes, may lawfully do or cause to
be done by virtue hereof. Pursuant to the requirements of the Securities Act of
1933, as amended, this Power of Attorney has been signed by the following
persons in the capacities indicated on May 3, 1999:
Signature Title
--------- -----
/s/ ALLEN V. AMBROSE Chief Executive Officer, President and
- ---------------------------------- Director (Principal Executive Officer)
Allen V. Ambrose
/s/ ALLAN J. MARTER Chief Financial Officer and Director
- ---------------------------------- (Principal Financial and Accounting
Allan J. Marter Officer)
/s/ ARMAND HANSEN Director
- ----------------------------------
Armand Hansen
/s/ JOHN JOHNSON CRABB Director
- ----------------------------------
John Johnson Crabb
Director
- ----------------------------------
A.D. Drummond
/s/ BONNIE L. KUHN Director
- ----------------------------------
Bonnie L. Kuhn
