Takeover target Minera Andes and its would-be white knight Rob McEwen are a bit perplexed that joint venture partner Hochschild has dropped its $11.3 million cash call in favor of a friendly bid to acquire Minera for itself.

Hochschild is upset that Minera rushed to do business with über-gold investor McEwen when Hochschild claims it already had proposals on the table. If McEwen succeeds in his bid to acquire 53.7% of Minera Andes for $40 million, he could block a Hochschild takeover.

However, in a statement issued Wednesday, Minera insist that Hochschild made its friendly proposal on February 6, only after a letter of agreement had already been entered into by Minera with McEwen.

Minera's Special Committee of the Board of Directors includes Allan Marter, a CFO well respected within North American mining industry circles, who is chairing the special committee. The group claims Hochschild rejected previous proposals made by Minera Andes, which would have achieved the combination Hochschild is now proposing.

The directors also insist that Minera Andes' previous request for an extension of the February 17, 2009, deadline to complete the cash call for the San Jose mine in Argentina had already been refused by Hochschild. However, Minera noted, if that extension had been granted, McEwen would have withdrawn his offer, significantly weakening the corporation's negotiating position with Hochschild and placing the corporation in a precarious position, should discussions with Hochschild be unsuccessful (as they had many times in the past) and the moratorium on the cash call lifted.

Minera insisted that the transaction with Mr. McEwen, if completed, will alleviate the corporation's distressed financial position, thereby increasing the corporation's negotiating position with Hochschild and any other potential acquirers.

In an interview with the Financial Post, McEwen said Hochschild's cash call was a big surprise to him and Minera Andes. When you're a partner in a project and you're getting continual cash calls after you're told you are not going to get them, for a junior it's a real financial hardship.

However, Hochschild's Deputy Chairman Roberto Danino told the FP that McEwen is paying much less than either of our offers, and all this was done without giving shareholders any chance to be aware of our offers.

McEwen said it would be a mistake to sell the company or its San Jose asset in this bear market. He asserted that his proposal would improve Minera's balance sheet and leave the stock in a better position once the junior mining sector improves.

Although McEwen's offer could result in a serious dilution of shares and potentially hurt minority shareholders, at least one mining commentator-the inco kola blog-suggests that Hochschild's actions are underhanded.

After making the cash call, Hochschild is said to have had a change of heart and made a bid to buy Minera Andes out from the San Jose joint venture for up to US$70 million cash or Cdn45-cents per Minera Andes share.

Hochschild also offered to acquire all of Minera Andes for 0.22 shares of Hochschild for each share of MAI, a potential value of US 50-cents per share. The company also gave Minera 10 more days to repay its cash call, as well as offer short-term bridge financing to another Hochschild/Minera JV, Minera Santa Cruz.