Extorre Gold Mines (XG.TSX, AMEX: XG) commented on the proposed acquisition by the Argentine Federal Government of 51% of the Argentine oil company, Yacimientos Petroliferos Fiscales (YPF), from Spanish Oil Company Repsol. Extorre noted that “there are significant differences in regulations, tradition, public importance and internal use of products between the oil & gas sector and the mining industry in Argentina. Public policy in one sector is not connected with the other.”
The emerging gold company went on to say that the Argentinean Government initiative presently being discussed before Congress has been enacted only in connection with YPF which has a long Argentinean history. Extorre noted that YPF was State owned from its inception in the early 1920’s until the late 1990’s, when it was privatized and a majority stake sold to Repsol. The current re-nationalization process of YPF has not been extended to other oil & gas companies operating in Argentina.
Highlights:
* There is no reported agenda in the popular press or, to Extorre’s knowledge, to extend the nationalization process to any other company in the oil and gas sector in Argentina or to any other sector of the economy
* The mining sector has also received explicit public support from the Provinces and the Federal Government
* Many other mining companies operating in Argentina have publicly commented on this situation in similar terms to Extorre’s view
* Very recent discussions with potential financiers to provide capital for the potential development of Extorre’s Cerro Moro project have indicated that the YPF action has not materially impacted the finance ability of the project
Extorre Management:
“Recently, several mining Provinces have joined an alliance in support of mining with the acknowledgment of the Argentinean Government and none of the objectives of that alliance relate to any action or policy similar to the one taken in connection with YPF.”
Trevor Mulroney, New President and CEO of Extorre:
“My task in leading Extorre through mine development to production represents a unique opportunity to demonstrate the real value of the Cerro Moro project. The grade of the deposit is clearly spectacular by industry standards and I intend to show how those grades will translate into very substantial shareholder value.”
