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Above is recent valuation on Los Azules from CanaccordAdams. With a very conservative view on Copper price 2 USD/lb long term, analyst assigned valuation of 350 mil USD with 10%discount rate and 0.25 (!) risk adjustment for NPV (development stage and Argentina). TNR Gold has a back-in right of 25% in the Northern part of the deposit with high grade core positioned mostly on its land. As you remember, conditions of this back in agreement and Title to adjacent Escorpio IV property is under dispute with Xstrata.

In case of successful litigation process all market cap of TNR Gold seems to be more the justified by Los Azules value alone - other properties in Argentina, Shotgun and Illiamna in Alaska are a free top up in this case.

The most important part is, that value for International Lithium will be credited to TNR holdings as a "free paper" in the case of court victory.

TNR Gold legal position is that:

"Gary Schellenberg, President of TNR commented that "Xstrata's decision does not affect TNR's own back-in right with respect to certain of the properties located in the Project. We are confident in the viability of the project therefore fully intend to exercise our back-in at the appropriate time and look forward to a mutually beneficial working relationship with MAI". TNR retains a conditional 25% back-in right to certain of the properties within the Project through its wholly-owned subsidiary, Solitario Argentina S.A. ("Solitario") under an exploration and option agreement (the "Exploration and Option Agreement") between MIM Argentina Explorationes S.A.("MIM"), a subsidiary of Xstrata PLC, and Solitario dated May 15, 200, which is one of the underlying agreements to which MAI's interest is subject. TNR's back-in option is currently the subject of a legal dispute, with a court date set for the fall of 2010. In the legal proceedings, TNR is seeking rectification of the Exploration and Option Agreement to the extent that it purports to terminate Solitario's back-in rights if a feasibility study is not completed within three years of MIM exercising its option. TNR's position is that the true intent of the parties is reflected in a letter of understanding which provided that Solitario's back-in right subsists until 120 days after completion of a feasibility study. TNR is also seeking confirmation of ownership of its Escorpio IV claim, which is located adjacent to the Project; and a declaration that the Escorpio IV property is excluded from the Exploration and Option Agreement."

TNR has George K. Macintosh, Q.C.- one of the best lawyers in Canada working on the case.


Rob McEwen CEO of Minera Andes was marketing Los Azules in San Francisco with the following:

"Los Azules Copper Discovery

Inferred resource containing over 11 billion pounds of copper.
Larger than 83% of the world's copper deposit.
Open at depth and to the north for over 2 miles.
High Grade Core: Approximately 105 million tons of 1% copper near-surface!

Los Azules Preliminary Assessment

NPV (USD 3.0/lb, 8% discount rate) - $4 Billion
IRR - 25%
Initial Capital Expenditure - 2.7 Billion
Mine Life - 23.6 years."

It will be interesting to see how law suit with Xstrata will go on and weather Rob McEwen will be open to a deal with a junior in order to clear the title of Los Azules and be able to market Los Azules project on the market.

Canada Zinc Metals CZX.v stays as a wild card in the game with Chinese Tongling owing 13%. With recent activity in share price of CZX.v, we will not be surprised that Canaccord is right and company will be taken out at one stage. In this case Chinese Tongling as a shareholders in TNR Gold will add spice to the game around this huge Copper and gold mine in Argentina.