Exhibit 10.12.3

 

Execution Version

 

AMENDMENT NUMBER 3 TO OPTION AND JOINT VENTURE AGREEMENT

 

THIS AMENDMENT NUMBER 3 to the Option and Joint Venture Agreement is made as of
the 10th day of September, 2004, by and between MINERA ANDES INC., a corporation
formed under the laws of Alberta, Canada ("MAI"), MINERA ANDES S.A., a
corporation formed under the laws of Argentina ("MASA"), MAURICIO HOCHSCHILD &
CIA. LTDA., a corporation formed under the laws of Peru ("MHC") and LORENZON
LIMITED ("Lorenzon"), a corporation formed under the laws of the Cayman Islands;

 

WHEREAS, MAI, MASA and MHC entered into an Option and Joint Venture Agreement
dated as of March 15, 2001, as amended on May 14, 2002 and August 27, 2002 (as
so amended, the "Agreement");

 

WHEREAS, pursuant to Section 3.1 and 4.3 of the Agreement, MHC designated
Lorenzon, an Affiliate of MHC, to acquire the Newco Shares (as such term is
defined in the Agreement) to which MHC was entitled under Section 3.1 and 4.3 of
the Agreement;

 

WHEREAS, the parties desire to amend the Agreement further to reflect the
parties' agreement (i) to forego construction of a pilot plant, (ii) to remove
MAI's right to exercise the Second Carry Option described in the Agreement and
(iii) to modify the obligation of MHC to make cash payments to MAI pursuant to
Section 5.2 of the Agreement; and

 

WHEREAS the parties desire that Lorenzon become a party to the Agreement,
enjoying the benefits of the Agreement and undertaking to be bound by the
provisions of the Agreement;

 

NOW, THEREFORE, in consideration of the premises and of the mutual promises,
covenants, and agreements contained in this Amendment, and intending to be
legally bound, the parties hereto agree as follows:

 

1.   Definitions.  For the purposes of this Amendment, capitalized terms used
but not defined herein have the meanings ascribed to them in the Agreement.

 

2.   References to Newco.  The parties acknowledge that the Newco referred to in
the Agreement is Minera Santa Cruz, S.A., an Argentine corporation ("MSC").  All
references in the Agreement to Newco shall be deemed to refer to MSC.

 

3.   Amendment of Section 5.2.  Section 5.2 of the Agreement is hereby amended
to read in its entirety as follows:

 

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"Subject to Section 5.3, MHC shall pay to MAI at the end of each six month
period ending on March 15 and September 15 in each year the amount of Two
Hundred Thousand Dollars ($200,000) until the occurrence of both of the
following:

 

(a)    a positive feasibility study for the development of a Mine on the
Property is obtained by MSC as contemplated by the agreement between MSC and MTB
Project Management Professionals, Inc. dated 26 May 2004 (a copy of which is
attached hereto), which study concludes that the development of a Mine on the
Property is technically feasible and economically warranted as judged by the
standards of the industry for a project of this nature in Argentina (the
"Positive Feasibility Study"),_and;

 

(b)    after receipt of the Positive Feasibility Study and acceptance by the
Board of MSC of a commercially reasonable financing plan, the Board of MSC takes
a decision (the "Production Decision") to construct the Mine;

 

provided, however, that during such time, if any, that the Positive Feasibility
Study has been obtained, but the Board of MSC has not yet taken the Production
Decision, the amount of the semi-annual payment to MAI shall be reduced to One
Hundred Thousand Dollars ($100,000).

 

4.    Amendment of Section 6.4.  The parties acknowledge that MAI did not
exercise the First Carry Option and agree that it shall not be necessary to
construct a Pilot Plant on the Property.  Accordingly, Section 6.4 of the
Agreement is hereby amended to read in its entirety as follows:

 

"The activities of MSC shall be directed primarily toward construction of a Mine
on the Property, but the parties recognize that the Board of Directors of MSC
will determine the scope of such activities and that such activities may differ
from that currently contemplated and may include additional Exploration,
depending upon the circumstances at the time.  The parties contemplate that the
first Mine on the Property will be project financed to the maximum extent
feasible, minimizing any debt or equity contribution of the parties, and MHC
shall cause MSC to use reasonable efforts to seek project financing on arm's
length, on commercially acceptable terms to develop such Mine.  The parties
recognize, however, that there can be no guarantee that MSC will be able to
obtain project financing on acceptable terms."

 

5.   Elimination of Second Carry Option.  MAI shall not be entitled to exercise
or elect the Second Carry Option.  Accordingly, Sections 6.5, 6.6, and 12.1 of
the Agreement are hereby deleted from the Agreement.

 

6.   Addition of Lorenzon.  MHC, MAI and MASA hereby agree that Lorenzon shall
become and be deemed to be a party to the Agreement, and that Lorenzon shall be

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entitled to the benefits of, and be entitled to enforce the obligations of any
party under, the Agreement.  Lorenzon hereby undertakes to each of MAI and MASA
to be bound by the provisions of the Agreement in the same manner as MHC.   MHC
hereby guarantees to each of MAI and MASA the performance by Lorenzon of the
Agreement and acknowledges and agrees that none of MHC’s obligations under the
Agreement are diminished as a consequence of Lorenzon becoming a party to the
Agreement.

 

7.   Governing Law.  This Amendment shall be governed by and construed in
accordance with the laws of the State of New York.   The provisions of Section
23.2 of the Agreement shall apply to this Amendment.

 

8.   Counterparts.  This Amendment may be executed in counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together will constitute as one and the same instrument.

 

IN WITNESS WHEREOF the parties have executed this Agreement as of the day, month
and year first above written.

 

 

MINERA ANDES INC.

 

 

 

 

By:

/s/ Allen V. Ambrose

 

 

Allen V. Ambrose

 

Its:

President & Director

 

 

 

 

MINERA ANDES S.A.

 

 

 

 

By:

/s/ Brian Gavin

 

 

Brian Gavin

 

Its:

Director

 

 

 

 

MAURICIO HOCHSCHILD & CIA. LTDA.

 

 

 

 

By:

/s/ Eduardo Hochschild Beeck

 

 

Eduardo Hochschild Beeck

 

Its:

Vice-President

 

 

 

 

LORENZON LIMITED

 

 

 

 

By:

/s/ Robert Muffly

 

 

Robert Muffly

 

Its:

Secretary

 

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