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HISTORICAL CONSOLIDATED FINANCIAL STATEMENTS OF MINERA ANDES INC. June 30, 2011 (Unaudited—stated in thousands of United States dollars)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

o

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

US GOLD CORPORATION

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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No fee required.

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        
 
    (2)   Aggregate number of securities to which transaction applies:
        
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
 
    (4)   Proposed maximum aggregate value of transaction:
        
 
    (5)   Total fee paid:
        
 

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Fee paid previously with preliminary materials.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
 
    (2)   Form, Schedule or Registration Statement No.:
        
 
    (3)   Filing Party:
        
 
    (4)   Date Filed:
        
 

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PRELIMINARY COPY

GRAPHIC

US GOLD CORPORATION
Suite 4750, Brookfield Place
Bay Wellington Tower
181 Bay Street, P.O. Box 792
Toronto, Ontario, Canada M5J 2T3

[    •    ], 2011

Dear US Gold Shareholder,

        You are cordially invited to attend a special meeting of shareholders, which we refer to as the Meeting, of US Gold Corporation, which we refer to as US Gold, or the Company, to be held at [    •    ] in Toronto, Canada at [    •    ], local time, on [    •    ], 2011.

        At the Meeting, US Gold shareholders will be asked to vote on matters necessary to enable US Gold to acquire Minera Andes Inc., which we refer to as Minera Andes, in a merger of equals transaction. We refer to the contemplated combination with Minera Andes as the Arrangement. US Gold's board of directors, which we refer to as the Board, believes that the combination with Minera Andes is in the best interests of US Gold and its shareholders because the combined company will have a stronger combined cash position and balance sheet, sources of revenue, active mining operations, enhanced trading liquidity, a significant growth profile, industry leading costs, an expanded exploration program and additional technical expertise. The accompanying proxy statement and the documents and information incorporated by reference in the proxy statement contain detailed information about and other important information concerning the Arrangement.

        The Arrangement would be undertaken pursuant to an arrangement agreement, dated September 22, 2011, which we refer to as the Arrangement Agreement, by and among US Gold, McEwen Mining—Minera Andes Acquisition Corp., a wholly-owned subsidiary of US Gold, which we refer to as Canadian Exchange Co., and Minera Andes, pursuant to which US Gold, through Canadian Exchange Co., will acquire all issued and outstanding common shares of Minera Andes in exchange for exchangeable shares of Canadian Exchange Co., at an exchange ratio of 0.45 of an exchangeable share of Canadian Exchange Co. for each outstanding common share of Minera Andes.

        Holders of exchangeable shares of Canadian Exchange Co. will have substantially similar voting and economic rights as holders of US Gold common stock. The exchangeable shares issued by Canadian Exchange Co. in the Arrangement will be exchangeable on a one-for-one basis for shares of US Gold common stock at any time at the option of the holder. We are effecting the Arrangement with exchangeable shares of Canadian Exchange Co. instead of shares of US Gold because such exchangeable shares may provide a more favorable Canadian tax treatment to Minera Andes' Canadian shareholders.

        At the Meeting, US Gold shareholders will be asked to:

      Proposal 1—approve an amendment to US Gold's Amended and Restated Articles of Incorporation (the "US Gold Articles of Incorporation") to create a new class of US Gold stock comprised of one share of preferred stock, designated as Series B Special Voting Preferred Stock, no par value, to be issued in connection with the Arrangement and for the purposes further described in the proxy statement;

      Proposal 2—approve an amendment to the US Gold Articles of Incorporation to increase the authorized shares of common stock of US Gold from 250,000,000 shares to 500,000,000 shares;


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      Proposal 3—approve the issuance of exchangeable shares of Canadian Exchange Co. and shares of common stock of US Gold issuable upon exchange of such exchangeable shares and exercise of Minera Andes options, in connection with the Arrangement;

      Proposal 4—approve an amendment to the US Gold Articles of Incorporation to change the name of US Gold to McEwen Mining Inc., which will be filed after completion of the Arrangement;

      Proposal 5—approve the amendment and restatement of the US Gold Equity Incentive Plan as described in more detail in the accompanying proxy statement; and

      Proposal 6—approve the adjournment or postponement of the Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Meeting to approve and adopt any of Proposals 1 through 5.

        You may cast separate votes on each proposal.

        The Board recommends that all US Gold shareholders vote "FOR" each of the proposals. If Proposals 1, 2 or 3 (collectively, the "Arrangement Proposals") do not receive the requisite shareholder approval, US Gold would be prevented from completing the Arrangement as currently contemplated.

        The Board, based in part on the unanimous recommendation of the special committee of independent directors of the Board (the "Special Committee") created to consider the Arrangement, approved the Arrangement, the issuance of the exchangeable shares of Canadian Exchange Co., the issuance of the US Gold shares of common stock issuable upon exchange of the exchangeable shares of Canadian Exchange Co. and exercise of Minera Andes options, and the issuance of one share of preferred stock designated as Series B Special Voting Preferred Stock of US Gold, which we refer to as the Series B Special Voting Preferred Stock, in connection with the Arrangement, and believes that the Arrangement is advisable, fair to you and in your best interests.

        The Board hopes that you will attend the Meeting. Whether or not you plan to attend the Meeting, however, please sign, date and return the accompanying proxy card in the enclosed, postage paid, pre-addressed envelope, or otherwise return your proxy in a manner described in the accompanying proxy card, as soon as possible. Your vote is important, regardless of the number of shares you own, so please return your proxy card TODAY.

    Sincerely,

 

 

DR. LEANNE M. BAKER
Director and Chair of the Special Committee

        Neither the Securities and Exchange Commission (SEC) nor any state securities commission has approved or disapproved of the transactions described in the accompanying proxy statement or the shares of US Gold common stock and exchangeable shares of Canadian Exchange Co. to be issued in connection with such transactions or passed upon the adequacy or accuracy of the accompanying proxy statement. Any representation to the contrary is a criminal offense.

        The accompanying proxy statement and form of proxy are first being sent to the shareholders of US Gold on or about [    •    ], 2011.


ADDITIONAL INFORMATION

        The accompanying document is the proxy statement of US Gold for the Meeting. The accompanying proxy statement incorporates important business and financial information about US Gold from documents that are not included in or delivered with the accompanying proxy statement. This information is available to you without charge upon your request. You can obtain documents


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incorporated by reference into the accompanying proxy statement by requesting them in writing or by telephone from US Gold at the following address and telephone number:

US GOLD CORPORATION
Attn: Corporate Secretary
Suite 4750, Brookfield Place
Bay Wellington Tower
181 Bay Street, P.O. Box 792
Toronto, Ontario, Canada M5J 2T3
Telephone: (866) 441-0690

        In addition, if you have questions about the Arrangement, the Meeting or the other matters described in the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need to obtain proxy cards or other information related to the proxy solicitation, please contact [    •    ] (the "Solicitor"), the proxy solicitor for US Gold, toll-free at [    •    ]. You will not be charged for any of these documents that you request.

If you would like to request documents, please do so by [    •    ], 2011 in order to receive them before the Meeting.

        See "Where You Can Find More Information" beginning on page [    •    ] of the accompanying proxy statement for further information.


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PRELIMINARY COPY

GRAPHIC

US GOLD CORPORATION
Suite 4750, Brookfield Place
Bay Wellington Tower
181 Bay Street, P.O. Box 792
Toronto, Ontario, Canada M5J 2T3

NOTICE OF SPECIAL MEETING AND PROXY STATEMENT

        Notice is hereby given of a special meeting, which we refer to as the Meeting, of shareholders of US Gold Corporation, a Colorado corporation, which we refer to as US Gold, or the Company, to be held at [    •    ] in Toronto, Canada at [    •    ], local time, on [    •    ], 2011 (the "Meeting").

        At the Meeting, US Gold shareholders will be asked to vote on, among other things, matters necessary to enable US Gold to acquire Minera Andes Inc., which we refer to as Minera Andes, in a merger of equals transaction. We refer to the contemplated combination with Minera Andes as the Arrangement.

        At the Meeting, US Gold shareholders will be asked to:

      Proposal 1—approve an amendment to US Gold's Amended and Restated Articles of Incorporation (the "US Gold Articles of Incorporation") to create a new class of US Gold stock comprised of one share of preferred stock, designated as Series B Special Voting Preferred Stock, no par value, to be issued in connection with the Arrangement and for the purposes further described in the proxy statement;

      Proposal 2—approve an amendment to the US Gold Articles of Incorporation to increase the authorized shares of common stock of US Gold from 250,000,000 shares to 500,000,000 shares;

      Proposal 3—approve the issuance of exchangeable shares of Canadian Exchange Co. and shares of common stock of US Gold issuable upon exchange of such exchangeable shares and exercise of Minera Andes options, in connection with the Arrangement;

      Proposal 4—approve an amendment to the US Gold Articles of Incorporation to change the name of US Gold to McEwen Mining Inc., which will be filed after completion of the Arrangement;

      Proposal 5—approve the amendment and restatement of the US Gold Equity Incentive Plan as described in more detail in the accompanying proxy statement; and

      Proposal 6—approve the adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the meeting to approve and adopt any of Proposals 1 through 5.

        If approved, Proposals 1, 2, 5 and 6 shall be effective regardless of the outcome of the other proposals. Proposal 3 shall be effective only if Proposals 1 and 2 are also approved. Proposal 4 shall be effective only if Proposals 1, 2 and 3 are also approved and the Arrangement is completed.

        The Arrangement involves risks that are described in the accompanying proxy statement under the heading "Risk Factors," beginning on page 31. You should read and carefully consider such risk factors before you vote for or grant your proxy as requested herein and in the proxy.


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        The holders of record of US Gold's common stock, the holder of the Series A Special Voting Preferred Stock (the "Series A Preferred Share"), and the holders of the 2007 Exchangeable Shares, as defined and described more fully below, as of [    •    ], 2011 are entitled to notice of, and to vote at, the Meeting. The holder of the Series A Preferred Share holds the share as trustee (the "Trustee") for the holders of exchangeable shares (the "2007 Exchangeable Shares") of our subsidiary, US Gold Canadian Acquisition Corporation ("2007 Acquisition Co.") as set forth in the Voting and Exchange Trust Agreement among US Gold, 2007 Acquisition Co. and Computershare Trust Company of Canada dated March 22, 2007. Each share of common stock is entitled to one vote. The Series A Preferred Share is entitled to 3,279,106 votes based on the number of 2007 Exchangeable Shares outstanding as of the record date, [    •    ], 2011, that are not held by US Gold or any of its subsidiaries. The Trustee shall deliver notice of the Meeting and related information to the holders of the 2007 Exchangeable Shares and the holders of the 2007 Exchangeable Shares are entitled to direct the Trustee to cast one vote for each 2007 Exchangeable Share held as of the record date. The holders of US Gold common stock and the holders of the 2007 Exchangeable Shares, through the Trustee, vote together as a single class.

        The Board, based in part on the unanimous recommendation of the Special Committee, recommends that all US Gold shareholders and holders of the 2007 Exchangeable Shares vote "FOR" each of the proposals.


        Whether or not you plan to attend the Meeting please sign, date and return the accompanying proxy card in the enclosed, postage paid, pre-addressed envelope, or otherwise return your proxy in a manner described in the accompanying proxy card, as soon as possible. Your vote is important, regardless of the number of shares you own, so please return your proxy card TODAY.


    By Order of the Board of Directors,

 

 

DR. LEANNE M. BAKER
Director and Chair of the Special Committee
Toronto, Ontario, Canada
[•], 2011
   

        If you have any questions concerning the Arrangement, the Meeting or the other matters described in the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of US Gold, please contact US Gold's proxy solicitor:

[    •    ]


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TABLE OF CONTENTS

 
  Page  

REPORTING CURRENCIES AND FINANCIAL PRINCIPLES

    1  

IMPORTANT NOTES

    1  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

    1  

CAUTIONARY NOTE TO U.S. INVESTORS—INFORMATION CONCERNING PREPARATION OF RESOURCE AND RESERVE ESTIMATES

    2  

QUESTIONS AND ANSWERS ABOUT THE MEETING AND THE TRANSACTIONS

    4  

SUMMARY

    14  

SELECTED HISTORICAL FINANCIAL DATA OF US GOLD

    26  

SELECTED HISTORICAL FINANCIAL DATA OF MINERA ANDES

    27  

SELECTED UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL DATA

    29  

RISK FACTORS

    31  

THE MEETING

    39  
 

Purpose of the Meeting

    39  
 

Record Date and Outstanding Shares

    39  
 

Voting

    39  
 

Voting of Proxies

    40  
 

Revocation of Proxies

    41  
 

Voting in Person

    41  
 

Votes Required

    42  
 

Recommendation of the Special Committee

    43  
 

Recommendation of the Board

    43  
 

Conditions to the Proposals

    43  
 

Vote Tabulation

    43  
 

Quorum; Abstentions and Broker Non-Votes

    44  
 

Costs of Solicitation

    44  
 

Other Business

    44  
 

Presence of Accountants

    44  

PROPOSAL 1—AMENDMENT TO ARTICLES OF INCORPORATION TO CREATE AND DESIGNATE A NEW CLASS OF PREFERRED STOCK

    45  

PROPOSAL 2—AMENDMENT TO ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED SHARES OF COMMON STOCK

    46  

PROPOSAL 3—ISSUANCE OF STOCK IN CONNECTION WITH THE ACQUISITION OF MINERA ANDES

    47  

PROPOSAL 4—AMENDMENT TO US GOLD ARTICLES OF INCORPORATION TO CHANGE THE NAME OF US GOLD TO MCEWEN MINING INC. 

    48  

PROPOSAL 5—AMENDMENT AND RESTATEMENT OF US GOLD EQUITY INCENTIVE PLAN

    49  
 

Background

    49  
 

Summary of the Restated Plan

    50  
 

Federal Income Tax Consequences of the Grant and Exercise of Options

    53  
 

New Plan Benefits

    54  
 

Securities Authorized for Issuance Under Equity Compensation Plans

    54  
 

Vote Required

    55  

PROPOSAL 6—ADJOURNMENT OR POSTPONEMENT OF THE MEETING TO SOLICIT ADDITIONAL PROXIES

    56  

INFORMATION ABOUT THE COMPANIES

    57  
 

About US Gold

    57  
 

About Minera Andes

    58  
 

About Canadian Exchange Co. 

    59  
 

About Callco

    59  

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  Page  

COMPARATIVE PER SHARE INFORMATION

    60  

THE ARRANGEMENT

    62  
 

General

    62  
 

Background of the Arrangement

    62  
 

Reasons for the Arrangement

    67  
 

Basis for the Board's Recommendation

    69  
 

The Exchange Ratio

    70  
 

The Securities to be Issued by US Gold and Canadian Exchange Co. in the Arrangement

    70  
 

Completion of the Arrangement

    72  
 

Pro Forma Financial Information

    73  
 

Ongoing Canadian Reporting Requirements

    73  
 

Formal Valuation and Fairness Opinion of Special Committee's Financial Advisor

    73  
 

Regulatory Matters

    81  

THE ARRANGEMENT AGREEMENT

    85  
 

The Arrangement

    85  
 

Closing

    86  
 

Representations and Warranties

    86  
 

Obligations to Effect the Arrangement

    87  
 

Conduct of the Business of US Gold and Minera Andes Pending the Completion of the Arrangement and Other Covenants

    89  
 

Non-Solicitation; Acquisition Proposals

    92  
 

Compositions of the Board of Directors of US Gold and Minera Andes

    95  
 

Treatment of Outstanding Minera Andes Stock Options

    95  
 

Conditions to the Consummation of the Arrangement

    95  
 

Definition of Material Adverse Effect

    97  
 

Termination of the Arrangement Agreement

    98  
 

Termination Fees

    100  

STRUCTURE OF THE ARRANGEMENT

    102  
 

Description of the Structure of the Arrangement

    102  
 

Description of Exchangeable Shares

    102  
 

The Voting and Exchange Trust Agreement

    108  
 

The Support Agreement

    110  
 

Effect of the Arrangement on US Gold Shareholders

    111  
 

Accounting Treatment

    111  
 

Registration

    112  

INFORMATION ABOUT MINERA ANDES

    113  
 

History and Development of Minera Andes

    113  
 

Significant Events in the Development of Minera Andes

    114  
 

Description of Mineral Properties

    119  
 

Material Effects of Government Regulations on Minera Andes' Business

    151  
 

Legal Proceedings

    152  
 

Limitations Affecting Security

    155  
 

Management's Discussion And Analysis Of Financial Condition And Results Of Operations

    155  
 

Quantitative and Qualitative Disclosure about Market Risk

    170  

CURRENCY EXCHANGE RATES

    172  

DESCRIPTION OF CAPITAL STOCK OF US GOLD

    173  
 

Common Stock

    173  
 

Series A Special Voting Preferred Stock

    173  
 

2007 Exchangeable Shares

    174  

INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

    177  

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  Page  
 

Beneficial Ownership of and Trading in Securities of Minera Andes

    177  
 

Board Positions with Minera Andes

    178  
 

Commitments to Acquire Securities of Minera Andes

    179  
 

Arrangements, Agreements or Understandings

    179  
 

Material Changes and Other Information

    179  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    180  
 

Changes in Control

    182  

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

    183  
 

Compensation Discussion and Analysis

    183  
 

Summary Compensation Table

    187  
 

Grants of Plan Based Awards

    188  
 

Outstanding Equity Awards at Fiscal Year-End

    189  
 

Option Exercises and Stock Vested Table

    190  
 

Director Compensation

    190  
 

Compensation Committee Report

    191  
 

Compensation Committee Interlocks and Insider Participation

    191  

NO DISSENT OR APPRAISAL RIGHTS

    191  

YEAR 2012 SHAREHOLDER PROPOSALS

    191  

OTHER MATTERS

    191  

WHERE YOU CAN FIND ADDITIONAL INFORMATION

    192  

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

    192  

HISTORICAL CONSOLIDATED FINANCIAL STATEMENTS OF MINERA ANDES INC. 

    194  

Annex A—Second Amended and Restated Articles of Incorporation of US Gold

   
A-1
 

Annex B—First Amendment to Second Amended and Restated Articles of Incorporation of US Gold

    B-1  

Annex C—Unaudited Pro Forma Combined Consolidated Financial Statements

    C-1  

Annex D—Unaudited Financial Statements of McEwen Mining—Minera Andes Acquisition Corp. 

    D-1  

Annex E—Raymond James Ltd. Formal Valuation and Fairness Opinion

    E-1  

Annex F—US Gold Corporation Peer Group Companies for Compensation Comparison

    F-1  

Annex G—Arrangement Agreement, dated September 22, 2011

    G-1  

Annex H—Amended and Restated US Gold Equity Incentive Plan

    H-1  

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REPORTING CURRENCIES AND FINANCIAL PRINCIPLES

        All references to "$" or "dollars" in this document refer to United States dollars, unless otherwise indicated. All financial information contained in this proxy statement is reported in U.S. dollars unless otherwise noted. We abbreviate Canadian dollars as Cdn$.

        US Gold's financial statements are prepared in accordance with US generally accepted accounting principles (US GAAP). Minera Andes' consolidated financial statements and the notes thereto have been prepared in accordance with Canadian generally accepted account principles (Canadian GAAP) for the fiscal years ended December 31, 2010, 2009 and 2008 and International Financial Reporting Standards (IFRS) for the six months ended June 30, 2011, and will be prepared in accordance with IFRS for the fiscal year ending December 31, 2011. In connection with Minera Andes' transition to IFRS in 2011, Minera Andes has and will continue to report its 2010 financial data in accordance with IFRS during the 2011 fiscal year. All reconciliations of IFRS or Canadian GAAP information to US GAAP are based on information taken directly from Minera Andes' public reports and filings or from information provided to us by Minera Andes.


IMPORTANT NOTES

        In deciding how to vote on the proposals described in this proxy statement, US Gold shareholders and the holders of the 2007 Exchangeable Shares should rely only on the information contained in, or incorporated by reference into, this proxy statement. US Gold has not authorized any person to provide US Gold shareholders and the holders of the 2007 Exchangeable Shares with any information that is different from such information. If you are in a jurisdiction where the solicitations of proxies are unlawful, or if you are a person to whom it is unlawful to direct solicitations, then the solicitation presented in this proxy statement does not extend to you. The information contained in or incorporated by reference into this proxy statement speaks only as of the date of this proxy statement, unless otherwise specified.


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

        Some of the information included in this proxy statement and certain other documents filed or to be filed with the SEC by US Gold (as well as information included in other statements made by US Gold or its representatives, and information about Minera Andes or its business), may contain forward-looking statements that are intended to be covered by the safe harbor provided in the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not relate strictly to historical or current facts, often will be phrased in the future-tense, and may include the words "may," "could," "should," "would," "believe," "expect," "anticipate," "estimate," "intend," "plan" or other words or expressions of similar meaning. Forward-looking statements that relate to US Gold or its business are based on US Gold's current beliefs and expectations about future events, and include statements that reflect US Gold's management's beliefs, plans, objectives, goals, expectations, anticipations and intentions with respect to the Arrangement and US Gold's financial condition, results of operations, future performance and business, including statements relating to US Gold's business strategy and US Gold's current and future development plans.

        Uncertainties that could affect the accuracy of forward-looking statements, besides the specific risk factors regarding the Arrangement identified in "Risk Factors" beginning on page 31, include:

    changes in gold, silver, copper and base metal prices;

    the ability to increase production of silver in future years;

    decisions of the operator of the San José Mine;

    the interpretation of drill hole results and the geology, grade and continuity of mineralization;

    the results of pending and future feasibility studies;

    the uncertainty of resource and reserve estimates and timing of development expenditures;

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    the availability of capital to fund US Gold's or Minera Andes' exploration program;

    changes in the political and regulatory environment in Argentina;

    change in interest rates and economic conditions;

    access and availability of materials, equipment, supplies, labor and supervision, power and water;

    results of current and future exploration activities;

    any adverse court decisions in respect of the Los Azules litigation; and

    local and community impacts and issues.

        Although US Gold believes that the expectations reflected in its forward-looking statements are reasonable, any or all of the forward-looking statements contained in this proxy statement or in US Gold's public reports and securities filings may prove to be incorrect. This may occur as a result of inaccurate assumptions or as a consequence of known or unknown risks and uncertainties. Many factors relating to the Arrangement described in this proxy statement, some of which are beyond US Gold's control, will be important in determining US Gold's future performance if any of the businesses or assets of US Gold or Minera Andes are combined. Consequently, actual results may differ materially from those predicted in or that might be anticipated from forward-looking statements. Therefore, US Gold shareholders and the holders of the 2007 Exchangeable Shares should not regard such forward-looking statements as a representation that the predictions or expectations reflected in the forward-looking statements will be achieved, and should not place undue reliance on such forward-looking statements.

        US Gold undertakes no obligation to publicly update or revise any information in this proxy statement, whether as a result of new information, future events or otherwise, other than to reflect a material change in the information previously disclosed, as required by applicable law. US Gold shareholders and the holders of the 2007 Exchangeable Shares should review US Gold's subsequent reports filed from time to time with the SEC on Forms 10-K, 10-Q and 8-K, and any amendments thereto. As noted in "Incorporation of Certain Documents by Reference" beginning on page 192, several such reports are incorporated by reference into this proxy statement.


CAUTIONARY NOTE TO U.S. INVESTORS—INFORMATION CONCERNING PREPARATION OF
RESOURCE AND RESERVE ESTIMATES

        US Gold and Minera Andes are required to prepare reports under the Canadian Securities Administrators' National Instrument 43-101 "Standards of Disclosure for Mineral Projects" ("NI 43-101") under the Canadian securities laws because shares of US Gold and Minera Andes are listed on the TSX and subject to Canadian securities laws. These standards are different from the standards generally permitted in reports filed with the SEC.

        The terms "mineral reserve", "proven mineral reserve" and "probable mineral reserve" used in this proxy statement are Canadian mining terms defined in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") in the CIM Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as the same may be amended from time to time by the CIM. These definitions differ from the definitions of those terms in Industry Guide 7 ("Guide 7") promulgated by the U.S. Securities and Exchange Commission (the "SEC"). Under U.S. standards, mineralization may not be classified as a "reserve" unless a determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Under Guide 7 standards, a "Final" or "Bankable" feasibility study is required to report reserves, the three-year historical average precious metals prices are used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority. One consequence of these differences is that "reserves"

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calculated in accordance with Canadian standards may not be "reserves" under the Guide 7 standards. U.S. investors should be aware that US Gold's properties and certain properties of Minera Andes do not have "reserves" as defined by Guide 7 and are cautioned not to assume that any part or all of the disclosed mineralized material will ever be confirmed or converted into Guide 7 compliant "reserves".

        Under NI 43-101, US Gold and Minera Andes each report measured, indicated and inferred resources, which are measurements that are generally not permitted in filings made with the SEC. The estimation of measured resources and indicated resources involve greater uncertainty as to their existence and economic feasibility than the estimation of proven and probable reserves. U.S. investors are cautioned not to assume that any part of measured or indicated resources will ever be converted into economically mineable reserves. The estimation of inferred resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources. It cannot be assumed that all or any part of inferred resources will ever be upgraded to a higher category. Therefore, U.S. investors are also cautioned not to assume that all or any part of inferred resources exist, or that they can be mined legally or economically.

        Canadian regulations permit the disclosure of resources in terms of "contained ounces" provided that the tones and grade for each resource are also disclosed; however, the SEC only permits issuers to report "mineralized material" in tonnage and average grade without reference to contained ounces. Under U.S. regulations, the tonnage and average grade described herein would be characterized as mineralized material. US Gold provides such disclosure about its exploration properties in the documents it has incorporated by reference into this proxy statement and about Minera Andes mineral properties in the section entitled "Information About Minera Andes" beginning on page 113 to allow a means of comparing our projects to those of other companies in the mining industry, many of which are Canadian and report pursuant to NI 43-101, and to comply with applicable disclosure requirements.

        We also note that drilling results are not indicative of mineralized material in other areas where we or Minera Andes have mining interests. Furthermore, mineralized material identified on our or Minera Andes' properties does not and may never have demonstrated economic or legal viability.

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QUESTIONS AND ANSWERS ABOUT THE MEETING AND THE TRANSACTIONS

        The following are some questions that you, as a shareholder of US Gold or a holder of the 2007 Exchangeable Shares, may have regarding the Arrangement and the Meeting, and brief answers to those questions. You are urged to read carefully this proxy statement, the annexes to this proxy statement, which are incorporated by reference into this proxy statement, and the other documents incorporated by reference in this proxy statement in their entirety because this section may not provide all of the information that is important to you with respect to the Arrangement and the Meeting. Additional important information is contained in the annexes to, and the documents incorporated by reference into, this proxy statement.

Q:    Why am I receiving this document?

A:
US Gold is holding the Meeting in order to, among other things, obtain shareholder approval to (i) issue the exchangeable shares of Canadian Exchange Co., which we sometimes refer to throughout this proxy statement as the exchangeable shares, and the shares of US Gold common stock issuable upon exchange of the exchangeable shares and the exercise of Minera Andes options in connection with the Arrangement, which we refer to collectively as the Stock Issuance, (ii) amend the US Gold Articles of Incorporation, and (iii) amend and restate the US Gold Equity Incentive Plan.

    You are receiving this proxy statement and the enclosed proxy card because you are a holder of US Gold common stock or a holder of the 2007 Exchangeable Shares as of the record date and you are entitled to notice of and to vote your shares at the Meeting.

Q:    What is the effect of the Arrangement?

A:
If the Arrangement is completed, US Gold will acquire, through Canadian Exchange Co., all of the issued and outstanding common shares of Minera Andes and Minera Andes will thereby become a wholly-owned indirect subsidiary of US Gold. In the Arrangement, each holder of Minera Andes common shares will receive 0.45 of an exchangeable share of Canadian Exchange Co. for each outstanding common share of Minera Andes held.

Q:    What matters will be considered at the Meeting?

A:
At the Meeting, US Gold shareholders and the holders of the 2007 Exchangeable Shares will be asked to:

approve an amendment to the US Gold Articles of Incorporation to create a new class of US Gold stock comprised of one share of preferred stock, designated as Series B Special Voting Preferred Stock, no par value, to be issued in connection with the Arrangement and for the purposes further described in this proxy statement;

approve an amendment to the US Gold Articles of Incorporation to increase the authorized shares of common stock of US Gold from 250,000,000 shares to 500,000,000 shares;

approve the issuance of exchangeable shares of Canadian Exchange Co. and shares of common stock of US Gold issuable upon exchange of such exchangeable shares and exercise of Minera Andes options, in connection with the Arrangement;

approve an amendment to the US Gold Articles of Incorporation to change the name of US Gold to McEwen Mining Inc., which will be filed after completion of the Arrangement;

approve the amendment and restatement of the US Gold Equity Incentive Plan as described in more detail elsewhere in this proxy statement;

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    approve the adjournment or postponement of the Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Meeting to approve and adopt any of above proposals; and

    transact such other business as may properly come before the Meeting.

    Shareholder approval of the Arrangement Proposals, the first three bullet points above, is a condition to the obligations of US Gold and Minera Andes to complete the Arrangement.

Q:    When and where is the Meeting?

A:
The Meeting will be held on [    •    ], 2011 at [    •    ], local time, at [    •    ] in Toronto, Canada.

Q:    When do you expect the Arrangement to be completed?

A:
It is currently anticipated that the Arrangement, if approved, will be completed in late 2011.

Q:    Is completion of the Arrangement subject to any other conditions?

A:
Yes. In addition to the approval of the Arrangement Proposals by US Gold shareholders and the holders of the 2007 Exchangeable Shares, completion of the Arrangement requires approval by Minera Andes shareholders, approval by the Court of Queen's Bench of Alberta, which is sometimes referred to in this proxy statement as the Court, and the satisfaction or waiver of the other conditions specified in the Arrangement Agreement.

Q:    Are there risks I should consider in deciding whether to vote for the proposals?

A:
Yes. A number of risk factors that you should consider in connection with the proposals, the Arrangement and related transactions are described in the section of this proxy statement entitled "Risk Factors" beginning on page 31.

Q:    Does the Arrangement require the approval of Minera Andes shareholders and are any Minera Andes shareholders already committed to vote in favor of the Arrangement?

A:
Yes. The Arrangement must be approved by Minera Andes shareholders at a special meeting called for that purpose. Each of the directors and officers of US Gold and Minera Andes, including Robert R. McEwen, the Chairman, Chief Executive Officer and largest shareholder of each of US Gold and Minera Andes, has entered into a voting agreement to vote any common shares of US Gold and Minera Andes he or she holds in favor of the Arrangement Proposals at the Meeting and the Arrangement at the Minera Andes shareholder meeting. The voting agreement covers shares representing approximately 22% of the outstanding shares of US Gold and the 2007 Exchangeable Shares, counted together as a single class and approximately 32% of the outstanding shares of Minera Andes, assuming all officers and directors exercise all of their US Gold and Minera Andes options.

Q:    Why are exchangeable shares being offered to the shareholders of Minera Andes in connection with the Arrangement and what are exchangeable shares?

A:
The exchangeable shares are being offered to Minera Andes shareholders because such exchangeable shares may provide a more favorable Canadian tax treatment to Minera Andes' Canadian shareholders than shares of US Gold. Each exchangeable share is substantially the economic and voting equivalent of a share of US Gold common stock and is exchangeable on a one-for-one basis for a share of US Gold common stock. In addition, each holder of an exchangeable share will, through a trust agreement and Series B Special Voting Preferred Stock to be issued by US Gold, effectively have the ability to cast votes along with holders of US Gold

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    common stock. Any exchangeable shares then outstanding will, upon the direction of Canadian Exchange Co.'s board of directors, be exchanged for shares of US Gold common stock on any date that is on or after the tenth year anniversary of the date on which exchangeable shares are first issued, subject to applicable law. Exchangeable shares may also be required to be exchanged for US Gold common stock in specified circumstances as described further in this proxy statement.

    US Gold has agreed to file a registration statement with the SEC, in order to register under the Securities Act of 1933, as amended, (the "Securities Act"), the shares of US Gold common stock to be issued upon exchange of the exchangeable shares. US Gold also agreed to use its reasonable best efforts to cause such registration statement to become effective upon the consummation of the Arrangement and to maintain the effectiveness of such registration so long as any exchangeable shares remain outstanding. For purposes of registering such stock, US Gold is preparing a registration statement on Form S-4. The effectiveness of the registration statement is a condition to the completion of the Arrangement.

    The shareholders of US Gold voting together with the holders of the 2007 Exchangeable Shares must approve the Arrangement Proposals in order for Canadian Exchange Co. to issue the exchangeable shares.

Q:    How many shares of US Gold common stock will be issued if the Arrangement is completed?

A:
No shares of US Gold common stock will be issued initially upon the consummation of the Arrangement. However, if we complete the Arrangement, we currently estimate that US Gold would issue a total of approximately 127,326,984 shares of US Gold common stock to shareholders of Minera Andes upon exchange of the exchangeable shares of Canadian Exchange Co. and 1,906,650 shares of US Gold common stock upon exercise of options to acquire Minera Andes common shares (the "Minera Andes Options"). As of the date of this proxy statement, US Gold has 136,473,613 shares of common stock issued and outstanding, options to purchase up to 4,264,260 shares of common stock, 3,279,106 shares of common stock issuable upon exchange of issued and outstanding 2007 Exchangeable Shares 1,362,638 shares reserved for issuance pursuant to the US Gold Equity Incentive Plan and 124,500 shares to be issued pursuant to a prior purchase agreement. Upon completion of the Arrangement and the approval of the amendments to US Gold's Equity Incentive Plan, there will be a total of 273,375,113 shares of common stock of US Gold outstanding or issuable pursuant to a prior purchase agreement or upon exercise or exchange of outstanding options, exchangeable shares 2007 Exchangeable Shares and an additional 1,362,638 shares reserved for issuance under the US Gold Equity Incentive Plan. However, the US Gold Articles of Incorporation currently authorize only 250,000,000 shares of common stock. Therefore, US Gold does not have adequate shares of its common stock authorized and available for issuance in the Arrangement and under the amended Equity Incentive Plan. The shareholders of US Gold and the holders of the 2007 Exchangeable Shares will need to approve Proposal 2 in order for US Gold to complete the Arrangement. See "Proposal 2—Amendment to Articles of Incorporation to Increase the Authorized Shares of Common Stock" beginning on page 46.

Q:    Why am I being asked to approve an amendment to the US Gold Articles of Incorporation to create the Series B Special Voting Preferred Stock?

A:
In connection with the Arrangement, US Gold will issue one share of Series B Special Voting Preferred Stock to a trustee in order to provide the holders of the exchangeable shares of Canadian Exchange Co. with voting rights that are correlative to holders of shares of US Gold's common stock. An amendment to the US Gold Articles of Incorporation will be required to create and authorize the Series B Special Voting Preferred Stock. If the creation of the Series B Special Voting Preferred Stock is not approved, the Arrangement will not be consummated. Therefore, the

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    Arrangement cannot be completed as currently contemplated unless US Gold shareholders and the holders the 2007 Exchangeable Shares, voting together as a single class, approve Proposal 1.

Q:    What will happen to my ownership percentage and voting power in US Gold?

A:
Upon completion of the Arrangement and exchange of all the exchangeable shares of Canadian Exchange Co., we estimate that Minera Andes' former shareholders will own approximately 47% of the outstanding common stock (including the 2007 Exchangeable Shares) of the combined company on a fully diluted basis as a result of the Arrangement. While your ownership percentage in US Gold will only be reduced when the exchangeable shares are exchanged into shares of US Gold common stock, your voting and economic interest will be immediately reduced upon the issuance of the exchangeable shares of Canadian Exchange Co.

Q:    Is US Gold common stock listed on a stock exchange?

A:
Shares of US Gold common stock are currently listed on the New York Stock Exchange ("NYSE") and the Toronto Stock Exchange ("TSX"), under the symbol "UXG" and will remain listed on those stock exchanges upon completion of the Arrangement.

Q:    Will the shares of US Gold common stock issuable upon exchange of the exchangeable shares of Canadian Exchange Co. be listed on a stock exchange?

A:
It is a condition to the Arrangement that the shares of US Gold common stock issuable upon exchange of the exchangeable shares of Canadian Exchange Co. and the exercise of Minera Andes Options be approved for listing on the NYSE and the TSX. We intend to take all commercially reasonable steps to list such new shares of US Gold common stock on the NYSE and the TSX.

Q:    Are Canadian Exchange Co.'s exchangeable shares listed on a stock exchange?

A:
It is a condition to the Arrangement that the exchangeable shares be approved for listing on the TSX. We intend to take all commercially reasonable steps to list the exchangeable shares on the TSX. The exchangeable shares will not be listed on a stock exchange in the United States. The trading symbol for the exchangeable shares of Canadian Exchange Co. on the TSX will be "MAQ".

Q:    What impact will the Arrangement have on US Gold's business?

A:
We believe our business will expand as a result of the Arrangement. The Board believes that the combination with Minera Andes is in the best interests of US Gold and its shareholders because the combined company will have a stronger combined cash position and balance sheet, sources of revenue, active mining operations, enhanced trading liquidity, a significant growth profile, industry leading costs, an expanded exploration program and additional technical expertise.

Q:    What impact will the Arrangement have on the composition of the Board?

A:
Immediately following consummation of the Arrangement, at least 50% of the Board will be composed of directors recommended by Minera Andes. Pursuant to the Arrangement Agreement, the current Minera Andes board of directors is entitled to recommend to the Nominating and Corporate Governance Committee of the Board (the "Nominating Committee") nominees to fill, effective immediately following the consummation of the Arrangement, any vacancies on the Board, whether such vacancies are the result of the resignation of any member of the Board prior to the consummation of the Arrangement or an increase in the size of the Board, such that such Minera Andes designees, appointed or elected, would constitute at least 50% of the directors of the Board immediately following consummation of the Arrangement. If the Nominating Committee

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    decides to not nominate a particular Minera Andes designee, the Minera Andes board of directors is entitled to recommend a replacement nominee.

Q:    Do US Gold's directors support the proposals and the Arrangement?

A:
The Arrangement was proposed by and has the support of Robert R. McEwen, the Chairman and Chief Executive Officer of each of US Gold and Minera Andes. Mr. McEwen is also the largest shareholder of US Gold and Minera Andes. The Board approved each of the proposals, the Arrangement and the Arrangement Agreement. The Board recommends that you vote "FOR" each of the proposals. In addition, pursuant to a voting agreement dated September 22, 2011, each of the directors and officers of US Gold and Minera Andes, including Mr. McEwen, agreed to vote all of his or her shares of US Gold and Minera Andes in favor of the Arrangement.

    When considering the recommendation of the Board with respect to the Arrangement Proposals, you should be aware that certain of our directors and executive officers may have interests in the Arrangement that may be different from, or in addition to, the interests of US Gold shareholders and the holders of the 2007 Exchangeable Shares generally. Specifically, Mr. McEwen, who serves as our Chairman and Chief Executive Officer and is our largest shareholder, is also the Chairman and Chief Executive Officer and largest shareholder of Minera Andes. For a more detailed description of these interests, see "Interests of Certain Persons in Matters to be Acted Upon" on page 177.

Q:    Am I entitled to vote on the Arrangement?

A:
Not directly. However, although we are not asking for your vote directly on the Arrangement, we are asking you to vote to approve the Arrangement Proposals. If any of the Arrangement Proposals do not receive the requisite shareholder approval, US Gold would be prevented from completing the Arrangement as currently contemplated.

Q:    What is McEwen Mining Inc.?

A:
If the Arrangement is completed and US Gold shareholders approve Proposal 4, US Gold will change its name to McEwen Mining Inc. In connection with the change of the name of US Gold to McEwen Mining Inc., the trading symbol for US Gold common stock on the NYSE and TSX will be changed from "UXG" to "MUX".

Q:    How will the Amended and Restated US Gold Equity Incentive Plan change the current US Gold Equity Incentive Plan?

A:
The Amended and Restated US Gold Equity Incentive Plan is attached as Annex H to this proxy statement. The purpose of amending and restating the US Gold Equity Incentive Plan is to advance the interests of US Gold and its shareholders by affording key persons, upon whose judgment, initiative and efforts we may rely for the successful conduct of our business, an opportunity to invest in our company and the incentives inherent in stock ownership. On October 4, 2011, the Board approved the amendment and restatement of the US Gold Equity Plan to:

(1)
increase the number of shares reserved for issuance under the US Gold Equity Plan to 13.5 million;

(2)
prohibit option repricing without shareholder approval;

(3)
provide that options will count against the authorized share limit differently than restricted stock awards and other full value awards (a so-called "fungible share pool");

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    (4)
    prohibit net share counting of awards; and

    (5)
    provide for termination of the Plan on October 4, 2021.

Q:    What percentage of the outstanding shares of US Gold do directors and executive officers hold?

A:
As of October 4, 2011, directors and executive officers of US Gold and their affiliates beneficially owned approximately 22% of the issued and outstanding shares of common stock of US Gold and the 2007 Exchangeable Shares, counted together as a single class, entitled to vote at the Meeting, assuming our officers and directors exercise all of their options. Upon completion of the Arrangement, If Mr. McEwen exercises all of his outstanding options to purchase shares of Minera Andes and of US Gold common stock, we expect that Mr. McEwen will own approximately 68,293,241 shares of US Gold common stock and exchangeable shares or approximately 25% of the outstanding shares of US Gold common stock, exchangeable shares and 2007 Exchangeable Shares, counted together as a single class.

Q:    Who is entitled to attend and vote at the Meeting?

A:
Any holder of record of US Gold common stock or 2007 Exchangeable Shares, at the close of business on [    •    ], the record date, is entitled to attend and vote at the Meeting. On the record date, there were [    •    ] shares of our common stock and [    •    ] shares of 2007 Exchangeable Shares outstanding and entitled to vote together as a single class on the proposals.

Q:    What will constitute a quorum at the Meeting?

A:
In order to carry on the business of the Meeting, we must have a quorum. Holders of one-third of our common stock issued, outstanding and entitled to vote on the record date, must be present at the Meeting, either in person or by proxy, to establish a quorum. For purposes of establishing a quorum at the Meeting, all issued and outstanding shares of 2007 Exchangeable Shares that are not held by US Gold or any of its subsidiaries shall be treated as common stock of US Gold. Proxies that we receive that are marked "abstain" will be considered as present at the Meeting for purposes of establishing a quorum. Broker non-votes will also be considered as present for purposes of establishing a quorum.

Q:    What vote is required to approve the proposals?

A:
Assuming the presence of a quorum, the following vote is required for each proposal:

The approval of Proposal 1 (proposal to amend the US Gold Articles of Incorporation to create a new class of US Gold stock comprised of one share of Series B Special Voting Preferred Stock) requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions and broker non-votes will not be treated as votes cast on this proposal and thus will have no effect on the outcome of this proposal.

The approval of Proposal 2 (proposal to amend the US Gold Articles of Incorporation to increase the authorized shares of common stock of US Gold from 250,000,000 shares to 500,000,000 shares) requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions and broker non-votes will not be treated as votes cast on this proposal and thus will have no effect on the outcome of this proposal.

The approval of Proposal 3 (proposal to issue exchangeable shares of Canadian Exchange Co. and shares of common stock of US Gold issuable upon exchange of such exchangeable shares and exercise of Minera Andes Options, in connection with the Arrangement) requires (i) that

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      the total number of votes cast on the proposal represents at least a majority of the shares of US Gold common stock and the 2007 Exchangeable Shares, counted together as a single class, entitled to vote on the proposal, and (ii) the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions will be treated as votes cast on this proposal and thus will have the effect of a vote "AGAINST" this proposal. Broker non-votes will be counted as shares entitled to vote on the proposal but will not be treated as votes cast on this proposal and thus will have a negative impact on satisfying the requirement described in the preceding clause (i).

      Furthermore, pursuant to Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions of the applicable Canadian securities regulators ("MI 61-101") approval of Proposal 3 also requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class, excluding shares of US Gold common stock and 2007 Exchangeable Shares held by persons whose votes may not be included in determining minority approval pursuant to MI 61-101, including Robert R. McEwen, Chairman and Chief Executive Officer of US Gold and Minera Andes, Perry Ing, an officer of US Gold and Minera Andes, Ian Ball, an officer of US Gold who holds common shares of Minera Andes, Stefan Spears, an officer of US Gold who holds common shares of Minera Andes, and Allan Marter, a director of Minera Andes.

    The approval of Proposal 4 (proposal to amend the US Gold Articles of Incorporation to change the name of US Gold to McEwen Mining Inc. after completion of the Arrangement) requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions and broker non-votes will not be treated as votes cast on this proposal and thus will have no effect on the outcome of this proposal.

    The approval of Proposal 5 (proposal to amend and restate the US Gold Equity Incentive Plan) requires (i) that the total number of votes cast on the proposal represents at least a majority of the shares of US Gold common stock and the 2007 Exchangeable Shares, counted together as a single class, entitled to vote on the proposal, and (ii) the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions will be treated as votes cast on this proposal and thus will have the effect of a vote "AGAINST" this proposal. Broker non-votes will be counted as shares entitled to vote on the proposal but will not be treated as votes cast on this proposal and thus will have a negative impact on satisfying the requirement described in the preceding clause (i).

    The approval of Proposal 6 (proposal to adjourn or postpone the Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Meeting to approve and adopt any of Proposals 1 through 5) requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions and broker non-votes will not be treated as votes cast on this proposal and thus will have no effect on the outcome of this proposal.

Q:    Do I need to attend the Meeting in person?

A:
No. It is not necessary for you to attend the Meeting to vote your shares, although we invite you to attend.

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Q:    How do I cast my vote?

A:
If you are a holder of record of US Gold common stock, you can vote in any one of the following ways:

by signing and returning the proxy card in the enclosed postage pre-paid envelope;

on the Internet or by telephone by following the instructions on the enclosed proxy card; or

by attending the Meeting and voting in person.

    If your stock is held in the name of a broker, bank or nominee (an "Intermediary"), you must present a proxy from the Intermediary in order to verify that the Intermediary has not voted your shares on your behalf.

    Shares of US Gold common stock represented by properly executed proxies received before the Meeting will be voted at the Meeting in the manner specified on the proxies and if no instructions are specified, proxies will be voted "FOR" each of the proposals presented at the Meeting.

    If you are a holder of record of 2007 Exchangeable Shares, you can vote your 2007 Exchangeable Shares in any one of the two following ways:

    by signing and returning the enclosed voting instruction form to the Trustee. This form permits you to instruct the Trustee to vote at the Meeting. The Trustee must receive your voting instruction by 5:00 p.m. ([    •    ] time) on [    •    ], 2011 at the address indicated on the voting instruction form. This will give the Trustee time to tabulate the voting instructions and vote on your behalf; or

    by attending the Meeting and voting in person, if you instruct the Trustee (by following the procedures set forth in the enclosed voting instruction form) to give you or your designee a proxy to exercise the voting rights personally at the Meeting. You may also instruct the Trustee to give a proxy to a designated representative of US Gold to exercise such voting rights.

    Only holders of the 2007 Exchangeable Shares whose names appear on the records of 2007 Acquisition Co. as the registered holders of the 2007 Exchangeable Shares as of the record date are entitled to instruct the Trustee as to how to exercise voting rights in respect of their 2007 Exchangeable Shares at the Meeting. If on the record date your 2007 Exchangeable Shares were held, not in your name, but rather in an account at an Intermediary, then these proxy materials are being forwarded to you by that organization. The Intermediary holding your account is considered to be the shareholder of record for purposes of instructing the Trustee as to how to vote your 2007 Exchangeable Shares. As a beneficial owner, you have the right to direct the Intermediary regarding how to instruct the Trustee as to how to vote your 2007 Exchangeable Shares.

Q:    How many votes do I have?

A:
Each holder of US Gold common stock is entitled to one vote for each share of US Gold common stock held as of the close of business on the record date. Each holder of 2007 Exchangeable Shares is entitled to one vote for each such exchangeable share held as of the close of business on the record date.

Q:    May I change my vote or revoke my proxy after I have mailed my signed proxy card?

A:
You may revoke your proxy and/or change your vote at any time before your shares are voted at the Meeting.

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    If you are a holder of record of US Gold, you can do this by:

    sending a written notice stating that you revoke your proxy to US Gold at Suite 4750, Brookfield Place, Bay Wellington Tower, 181 Bay Street, P.O. Box 792, Toronto, Ontario, Canada M5J 2T3, Attn: Corporate Secretary, as long as the notice bears a date subsequent to the date of the proxy and is received no later than two business days prior to the Meeting and states that you revoke your proxy;

    submitting a valid, later-dated proxy by mail, telephone or through the Internet that is received prior to the Meeting; or

    attending the Meeting and voting by ballot in person. Your attendance at the Meeting will not, by itself, revoke any proxy that you have previously given. You must notify a representative of US Gold at the Meeting of your desire to revoke your proxy and vote in person.

    If you are a holder of record of 2007 Exchangeable Shares, you can revoke your voting instructions and/or change your vote by:

    sending a written notice to the Trustee instructing the Trustee to revoke your voting instructions and to not vote your 2007 Exchangeable Shares, as long as the notice bears a date subsequent to the date of the voting instructions and is received no later than 5:00 p.m. ([    •    ] time) on [    •    ], 2011 at the address indicated on the voting instruction form; or

    submitting a valid, later-dated signed voting instruction form to the Trustee at the address indicated on the voting instruction form by 5:00 p.m. ([    •    ] time) on [    •    ], 2011.

    If you have instructed an Intermediary to vote your shares, you must follow directions received from the Intermediary to change those instructions.

Q:    If my shares are held in "street name" by my broker, will my broker vote my shares for me?

A:
Your broker will vote your shares only if you provide your broker with instructions on how to vote. You should instruct your broker to vote your shares, following the directions provided by your broker. If you fail to instruct your broker on any of the proposals to be considered at the Meeting, your shares will not be voted with respect to such matter but your shares will be considered as present for the purpose of establishing quorum. If you don't instruct your broker on how to vote for Proposal 3 and 5, the resulting "broker non-vote" will have a negative impact on the passage of Proposal 3 and 5.

Q:    Who is soliciting this proxy?

A:
The Board is soliciting this proxy and US Gold will bear the cost of the solicitation. US Gold has also engaged the Solicitor to assist in the solicitation of proxies for the Meeting and provide related advice and informational support for a services fee of approximately $[    •    ], plus the reimbursement of reasonable out-of-pocket expenses. We may also make arrangements with brokerage firms and other custodians, nominees and fiduciaries for the forwarding of soliciting material to the beneficial owners of US Gold common stock and the 2007 Exchangeable Shares held of record by those owners. We will reimburse those brokers, custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses incurred in connection with that service. In addition to the use of mail, our directors, officers and employees, without additional compensation, may solicit proxies by personal interview, telephone, electronic mail or otherwise.

Q:    Where can I find the voting results of the Meeting?

A:
The preliminary voting results are expected to be announced at the Meeting. US Gold will report the final voting results, or the preliminary voting results if the final voting results are unavailable,

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    in a Current Report on Form 8-K to be filed with the SEC and the Canadian Securities Administrators within four business days following the Meeting.

Q:    Do I have dissent or appraisal rights?

A:
No. Holders of US Gold common stock do not have dissent or appraisal rights under Colorado law in connection with any of the matters to be acted on at the Meeting.

Q:    What do I do if I receive more than one proxy or set of voting instructions?

A:
If you receive more than one proxy and/or set of voting instructions relating to the Meeting, which means you own shares in more than one account or you are a holder of our common stock and a holder of 2007 Exchangeable Shares, each proxy or set of voting instructions should be voted, completed and/or returned separately as described elsewhere in this proxy statement in order to ensure that all of your shares are voted.

Q:    What do I need to do now?

A:
After carefully reading and considering the information contained in this proxy statement and the attached annexes, please submit your proxy in accordance with the instructions set forth in the enclosed proxy card as soon as possible so that your shares will be represented at the Meeting.

Q:    Whom do I contact if I have questions about the Meeting?

A:
You may contact our information agent at:

[    •    ]

or us at:

US Gold Corporation
Suite 4750, Brookfield Place
Bay Wellington Tower
181 Bay Street, P.O. Box 792
Toronto, Ontario, Canada M5J 2T3
Telephone: (866) 441-0690
Attention: Investor Relations

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SUMMARY

        This summary highlights selected information from this proxy statement. It may not contain all of the information that is important to you. You are urged to read carefully the entire proxy statement and the other documents referred to or incorporated by reference in this proxy statement in order to fully understand the Arrangement Agreement, the Arrangement and the other matters to be considered and voted upon at the Meeting. See "Where You Can Find Additional Information" beginning on page 192 of this proxy statement.

Information about US Gold (see page 57)

  US Gold is a precious metals exploration stage company engaged in the business of acquiring, exploring, and developing mineral properties in the U.S. and Mexico. US Gold was organized under the laws of the State of Colorado on July 24, 1979. US Gold holds interests in approximately 1,525 square miles of mineral concessions in west central Mexico and also holds interests in approximately 254 square miles in Nevada, United States.

 

US Gold's common stock is listed on the TSX and the NYSE under the symbol "UXG." If the Arrangement is completed and US Gold shareholders approve Proposal 4, US Gold will change its name to McEwen Mining Inc. and the trading symbol of US Gold common stock will be changed to "MUX". US Gold is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act and, as such, it files or furnishes reports and other information with the SEC from time to time. As of market close on the record date, [•], 2011, the closing price of US Gold common stock on the NYSE was $[•] and there was a total of [•] shares of US Gold Common stock outstanding.

 

US Gold's principal executive offices are located at Suite 4750, Brookfield Place, Bay Wellington Tower, 181 Bay Street, P.O. Box 792, Toronto, Ontario, Canada M5J 2T3 and its telephone number is (866) 441-0690. US Gold's website is www.usgold.com. Information contained on the website is not incorporated by reference into this proxy statement and you should not consider information contained on the website as part of this proxy statement.

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Information about Minera Andes (see page 113)

 

Minera Andes is an exploration company incorporated under the Business Corporations Act (Alberta) (the "ABCA") exploring for gold, silver and copper in Argentina with three significant assets: (i) a 49% interest in Minera Santa Cruz S.A. ("MSC"), owner of the San José Mine; (ii) a 100% interest in the Los Azules copper deposit; and (iii) a portfolio of exploration properties in Deseado Massif region of Southern Argentina. The San José Mine is an operating silver-gold mine located in Santa Cruz Province, Argentina. The San José Mine is a joint venture pursuant to which title to the assets is held by MSC, an Argentinean company owned 49% by Minera Andes and 51% by Hochschild Mining (Argentina) Corporation S.A., a subsidiary of Hochschild Mining plc. (together with its affiliates and subsidiaries "Hochschild"). In the fiscal year ended December 31, 2010, the San José Mine produced 84,303 ounces of gold, at an average grade per tonne of ore processed of 6.14 grams of gold per tonne, and 5,323,842 ounces silver, at an average grade per tonne of ore processed of 397 grams of gold per tonne.

 

Minera Andes' common shares are listed on the TSX under the symbol "MAI" and quoted on the Over-the-Counter Bulletin Board, or OTCBB, under the symbol "MNEAF." If the Arrangement is completed, common shares of Minera Andes will cease to be traded on the TSX and the OTCBB. As of market close on the record date, [•], 2011, the closing price of Minera Andes shares on the TSX was Cdn$[•] and there was a total of [•] Minera Andes shares outstanding.

 

Minera Andes' principal executive offices are located at Suite 4750, Brookfield Place, Bay Wellington Tower, 181 Bay Street, P.O. Box 792, Toronto, Ontario, Canada M5J 2T3 and its telephone number is (647) 258-0395. Minera Andes' website is www.minandes.com. Information contained on the website is not incorporated by reference into this proxy statement and you should not consider information contained on the website as part of this proxy statement.

Information about McEwen Mining—Minera Andes Acquisition Corp. (see page 59)

 

McEwen Mining—Minera Andes Acquisition Corp., or Canadian Exchange Co., is an indirect wholly-owned subsidiary of US Gold organized under the ABCA on September 19, 2011 for the sole purpose of the Arrangement. Canadian Exchange Co. does not and will not have operations. Canadian Exchange Co.'s principal executive offices are located at Suite 4750, Brookfield Place, Bay Wellington Tower, 181 Bay Street, P.O. Box 792, Toronto, Ontario, Canada M5J 2T3 and its telephone number is (866) 441-0690.

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Information about McEwen Mining (Alberta) ULC (see page 59)

 

McEwen Mining (Alberta) ULC, or Callco, is a direct wholly-owned subsidiary of US Gold organized under the ABCA on September 19, 2011 for the sole purpose of the Arrangement. Callco will hold certain call rights related to the exchangeable shares and will hold the voting shares of Canadian Exchange Co. Callco does not and will not have operations. Callco's principal executive offices are located at Suite 4750, Brookfield Place, Bay Wellington Tower, 181 Bay Street, P.O. Box 792, Toronto, Ontario, Canada M5J 2T3 and its telephone number is (866)  441-0690.

The Arrangement (see page 62)

 

Subject to the terms and conditions of the Arrangement Agreement, US Gold will acquire, through Canadian Exchange Co., all of the issued and outstanding common shares of Minera Andes, which we sometimes refer to throughout this proxy statement as the Minera Andes shares, at a ratio of 0.45 of an exchangeable share of Canadian Exchange Co. for each outstanding Minera Andes share. All outstanding Minera Andes Options will be converted into options to acquire common stock of US Gold at a ratio of 0.45 of a share of US Gold common stock for each Minera Andes share underlying each such Minera Andes Option. The exercise price and vesting terms of the Minera Andes Options will remain unchanged. The Arrangement will be completed pursuant to a court-approved plan of arrangement, the Plan of Arrangement, under the ABCA. Upon completion of the Arrangement, Minera Andes will be an indirect wholly-owned subsidiary of US Gold and the Minera Andes shares will no longer be publicly traded. The terms and conditions of the Arrangement are set out in the Arrangement Agreement, which was entered into by US Gold, Canadian Exchange Co. and Minera Andes on September 22, 2011.

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Background to the Arrangement (see page 62)

 

In early June 2011, Mr. McEwen, the Chairman, Chief Executive Officer and largest shareholder of US Gold and Minera Andes, advised management of each of Minera Andes and US Gold that he intended to propose to their respective boards that they consider combining Minera Andes and US Gold. The Special Committee, composed of independent directors of US Gold, was formed on June 14, 2011 to evaluate, review and negotiate the proposed transaction with Minera Andes. From June 14, 2011 through September 22, 2011, the Special Committee, with advice from independent counsel and an independent financial advisor, conducted due diligence, evaluated the proposed transaction and negotiated the Arrangement Agreement. On September 22, 2011, the Special Committee unanimously determined that the Arrangement Agreement was in the best interests of US Gold and its shareholders and recommended to the Board that US Gold enter into the Arrangement Agreement. The Board approved the Arrangement and the Arrangement Agreement on the same day.

Reasons for the Arrangement (see page 67)

 

The Board believes that the Arrangement is in the best interests of US Gold and its shareholders because, following completion of the Arrangement, the combined company will have:

 

•       a stronger combined cash position and balance sheet;

 

•       sources of revenue;

 

•       active mining operations;

 

•       enhanced trading liquidity;

 

•       a significant growth profile;

 

•       industry leading costs;

 

•       an expanded exploration program; and

 

•       additional technical expertise.

Effect of the Arrangement on US Gold Shareholders (see page 111)

 

Assuming that the Arrangement is completed and that all of the exchangeable shares issued in the Arrangement are exchanged for shares of US Gold common stock, current US Gold shareholders would hold approximately 53% and current shareholders of Minera Andes would hold approximately 47% of US Gold's outstanding common stock and the 2007 Exchangeable Shares, counted together as a single class, on a fully diluted basis. Robert R. McEwen would own approximately 25% of US Gold's outstanding common stock, the exchangeable shares and the 2007 Exchangeable Shares, counted together as a single class, assuming Mr. McEwen exercises all of his US Gold and Minera Andes options.

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Recommendation of the Special Committee Regarding the Arrangement (see page 43)

 

Having undertaken a thorough review of, and carefully considering, the Arrangement, including consulting with independent financial and legal advisors, the Special Committee unanimously concluded that the Arrangement is fair to US Gold and its shareholders and in the best interests of US Gold. The Special Committee unanimously recommended that the Board approve the Arrangement.

Recommendation of the Board of Directors (see page 43)

 

The Board, based in part on the unanimous recommendation of the Special Committee, has determined that the Arrangement is in the best interests of US Gold, its shareholders and approved each of the proposals set forth in this proxy statement. The Board recommends that US Gold shareholders vote "FOR" each of the proposals set forth in this proxy statement.

Pro Forma Financial Information (see page 29)

 

A summary of the pro forma financial information for the Arrangement is provided on page 29 of this proxy statement and full pro forma financial information is included in Annex C to this proxy statement.

Securities to be Issued by US Gold and Canadian Exchange Co. in the Arrangement (see page 70)

 

Pursuant to the Arrangement, holders of Minera Andes shares will receive a number of exchangeable shares of Canadian Exchange Co. equal to the number of Minera Andes shares so exchanged multiplied by 0.45, or the exchange ratio, for a total of approximately 127,326,984 exchangeable shares which will be exchangeable at any time into the same number of shares of US Gold common stock. In addition, all outstanding Minera Andes Options will be converted into options to acquire common stock of US Gold at a ratio of 0.45 of a share of US Gold common stock for each Minera Andes share underlying each such Minera Andes Option.

 

US Gold has agreed to file a registration statement with the SEC in order to register, under the Securities Act, the shares of US Gold common stock to be issued upon exchange of the exchangeable shares. US Gold also agreed to use its reasonable best efforts to cause such registration statement to become effective upon the consummation of the Arrangement and to maintain the effectiveness of such registration so long as any exchangeable shares remain outstanding. For purposes of registering such stock, US Gold is preparing a registration statement on Form S-4. The effectiveness of the registration statement is a condition to the completion of the Arrangement.

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US Gold has also agreed to take commercially reasonable efforts to obtain any regulatory approvals that are necessary to ensure that the shares of US Gold common stock to be issued upon the exercise of the Minera Andes Options will be freely tradable in the United States and Canada.

The Exchange Ratio (see page 70)

 

The exchange ratio of 0.45 was determined by negotiation between the Special Committee and the special committee of Minera Andes and announced on September 2, 2011. The exchange ratio will not be adjusted for any subsequent changes in market prices of US Gold common stock or Minera Andes shares prior to the closing of the Arrangement.

The Arrangement Agreement (see page 85)

 

The Arrangement Agreement is attached as Annex G to this proxy statement. We urge you to read the entire Arrangement Agreement, because it is the legal document governing the Arrangement.

The Voting Agreement (see page 177)

 

Each of the directors and officers of US Gold and Minera Andes, including Robert R. McEwen, the Chairman, Chief Executive Officer and largest shareholder of each of US Gold and Minera Andes, has entered into a voting agreement to vote any shares of common stock of US Gold and common shares of Minera Andes he or she beneficially owns in favor of the Arrangement Proposals at the Meeting and the Arrangement at the Minera Andes shareholder meeting. The voting agreement covers shares representing approximately 22% of the outstanding shares of US Gold and the 2007 Exchangeable Shares, counted together as a single class and approximately 32% of the outstanding shares of Minera Andes, assuming all of the directors and officers exercise all of their US Gold and Minera Andes options.

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Formal Valuation and Fairness Opinion of Special Committee's Financial Advisor (see page 73)

 

On June 9, 2011, the Board established the Special Committee to evaluate the terms of the Arrangement and the process of determining those terms. On July 19, 2011, the Special Committee retained Raymond James Ltd. ("Raymond James") to provide financial advice and assistance to the Special Committee including providing a formal valuation of the common stock of US Gold and the common shares of Minera Andes in accordance with MI 61-101 and providing an opinion as to the fairness of the exchange ratio offered in the Arrangement, from a financial point of view, to the shareholders of US Gold, other than Robert R. McEwen and any affiliated entities (as defined under MI 61-101) or any other interested party (as defined under MI 61-101, including any related party or joint actor of such interested party), collectively, the "Interested Parties." Based upon and subject to the matters described in its formal valuation and fairness opinion dated September 22, 2011 attached as Annex E, Raymond James concluded that, as at the date of its opinion, the exchange ratio was fair from a financial point of view to the shareholders of US Gold, other than any Interested Parties, from a financial point of view.

Risk Factors (see page 31)

 

There are certain risks associated with the proposals, the Arrangement and related matters as described in "Risk Factors" beginning on page 31. US Gold shareholders and the holders of the 2007 Exchangeable Shares should consider these risks in determining how to vote on the proposals to be brought before the Meeting. Additional risk factors are described in some of the documents incorporated by reference into this proxy statement.

Conditions to the Consummation of the Arrangement (see page 95)

 

As more fully described in this proxy statement and the Arrangement Agreement, the completion of the Arrangement depends on a number of conditions being satisfied or waived, including, among others, receipt of the approval of (1) the Arrangement Proposals by US Gold shareholders voting together with the holders of the 2007 Exchangeable Shares, (2) the Arrangement by Minera Andes shareholders, and (3) the Plan of Arrangement by the Court.

 

Although we expect to complete the Arrangement as soon as possible after the requisite approvals of the Minera Andes shareholders and the US Gold shareholders voting together with the holders of the 2007 Exchangeable Shares are obtained we cannot be certain when, or if, the conditions to the Arrangement will be satisfied or waived, or that the Arrangement will in fact be completed.

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Termination of the Arrangement Agreement (see page 98)

 

As more fully described in this proxy statement and the Arrangement Agreement, the Arrangement Agreement may be terminated by US Gold and/or Minera Andes at any time prior to completing the Arrangement upon the occurrence of certain events. Either US Gold or Minera Andes may terminate the Arrangement Agreement if the Arrangement is not completed by April 30, 2012.

Termination Fees (see page 100)

 

As more fully described in this proxy statement and the Arrangement Agreement, the Arrangement Agreement contains certain termination rights for both US Gold and Minera Andes. Minera Andes has agreed to pay a termination fee of $20,100,000 (representing approximately 3% of its market capitalization as of market closing on September 1, 2011) in certain circumstances, including if the Arrangement Agreement is terminated because (i) Minera Andes intentionally breaches its representations, warranties or covenants such that a closing condition would not be met; (ii) Minera Andes approves, recommends or enters into a "superior proposal" or an "acquisition proposal" (each as defined); or (iii) an acquisition proposal was announced prior to the Minera Andes shareholders meeting, Minera Andes shareholders do not approve the Arrangement Agreement, and Minera Andes enters into a transaction for the sale of 50% or more of Minera Andes within 12 months of the termination of the Arrangement Agreement.

 

US Gold has agreed to pay a termination fee of $25,600,000 (representing approximately 3% of its market capitalization as of market closing on September 1, 2011) in certain circumstances, including if the Arrangement Agreement is terminated because (i) US Gold intentionally breaches its representations, warranties or covenants such that a closing condition would not be met; (ii) US Gold approves, recommends or enters into a superior proposal or an acquisition proposal; or (iii) an acquisition proposal was announced prior to the US Gold shareholders meeting, US Gold shareholders do not approve Arrangement Proposals, including the Stock Issuance, and US Gold enters into a transaction for the sale of 50% or more of US Gold within 12 months of the termination of the Arrangement Agreement.

 

In addition, each party has agreed to pay the other party a $4,000,000 "expenses fee" if the Arrangement Agreement is terminated by the other party as a result of an unintentional breach of the representations, warranties or covenants of such party such that a closing condition would not be met.

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Treatment of Outstanding Minera Andes Stock Options (see page 95)

 

All outstanding Minera Andes Options will become exercisable to acquire common stock of US Gold at a ratio of 0.45 of a share of US Gold common stock for each Minera Andes share underlying each such Minera Andes Option. The exercise price and vesting terms of the Minera Andes Options will remain unchanged.

Listing of US Gold Common Stock (see page 91)

 

The shares of US Gold common stock to be issued upon exchange of the exchangeable shares of Canadian Exchange Co. and the exercise of Minera Andes Options will be listed on the NYSE and the TSX. Upon completion of the Arrangement, the trading symbol on both the NYSE and TSX for US Gold common stock will be "MUX".

Listing of Canadian Exchange Co. Exchangeable Shares (see page 91)

 

The exchangeable shares of Canadian Exchange Co. to be issued to Minera Andes shareholders in the Arrangement will be listed on the TSX. The exchangeable shares will not be listed on any stock exchange in the United States. The trading symbol for the exchangeable shares of Canadian Exchange Co. on the TSX will be "MAQ".

Board Composition (see page 95)

 

Immediately following consummation of the Arrangement, at least 50% of the Board will be composed of directors designated by Minera Andes.

Additional Information

 

Additional information regarding the Arrangement is set forth in "The Arrangement" beginning on page 62, "The Arrangement Agreement" beginning on page 85 and "The Structure of the Arrangement" beginning on page 102.

The Meeting (see page 39)

 

The Meeting will be held at [•] in Toronto, Canada at [•], local time, on [•], 2011.

Purpose of the Meeting

 

To present proposals for approval by US Gold shareholders and the holders of the 2007 Exchangeable Shares of the following:

Proposal 1(see page 45)

 

To approve an amendment to the US Gold Articles of Incorporation to create a new class of US Gold stock comprised of one share of preferred stock, designated as Series B Special Voting Preferred Stock, no par value, to be issued in connection with the Arrangement.

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Proposal 2 (see page 46)

 

To approve an amendment to the US Gold Articles of Incorporation to increase the authorized shares of common stock of US Gold from 250,000,000 shares to 500,000,000 shares. In connection with Proposals 1 and 2, we will restate the US Gold Articles of Incorporation to consolidate such amendments (the "Second Amended and Restated Articles of Incorporation"). The full text of the Second Amended and Restated Articles of Incorporation, which is marked to show the proposed amendments to the US Gold Articles of Incorporation, is attached as Annex A to this proxy statement.

Proposal 3 (see page 47)

 

To approve the issuance of exchangeable shares of Canadian Exchange Co. and shares of common stock of US Gold issuable upon exchange of such exchangeable shares and the exercise of Minera Andes Options, in connection with the Arrangement.

Proposal 4 (see page 48)

 

To approve an amendment to the US Gold Articles of Incorporation to change the name of US Gold to McEwen Mining Inc., which will be filed after completion of the Arrangement. The full text of this amendment to the US Gold Articles of Incorporation is attached as Annex B to this proxy statement.

Proposal 5 (see page 49)

 

To approve an amendment to the US Gold Equity Incentive Plan as described in more detail in this proxy statement.

Proposal 6 (see page 56)

 

To approve the adjournment or postponement of the Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Meeting to approve and adopt any of Proposals 1 through 5.

Conditions to the Effectiveness of Proposals 1, 2, 3 and 4 (see page 43)

 

If approved by the US Gold shareholders and the holders of the 2007 Exchangeable Shares, voting together as a single class, Proposals 1 and 2 shall be effective regardless of the outcome of the other proposals. Proposal 3 shall be effective only if the US Gold shareholders and the holders of the 2007 Exchangeable Shares also approve Proposals 1 and 2. Proposal 4 shall be effective only if the US Gold shareholders and the holders of the 2007 Exchangeable Shares also approve Proposals 1, 2 and 3 and the Arrangement is completed.

Record Date (see page 39)

 

Any holder of record of US Gold common stock or 2007 Exchangeable Shares, at the close of business on the record date, [•], is entitled to attend and vote at the Meeting. On the record date, there were [•] shares of our common stock and [•] shares of 2007 Exchangeable Shares outstanding and entitled to vote together as a single class on the proposals.

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Quorum (see page 44)

 

In order to carry on the business of the Meeting, we must have a quorum. Holders of one-third of our common stock issued, outstanding and entitled to vote on the record date, must be present at the Meeting, either in person or by proxy, to establish a quorum. For purposes of establishing a quorum at the Meeting, all issued and outstanding shares of 2007 Exchangeable Shares that are not held by US Gold or any of its subsidiaries shall be treated as common stock of US Gold. Proxies that we receive that are marked "abstain" and broker non-votes will be considered as present at the Meeting for purposes of establishing a quorum.

Votes Required (see page 42)

 

Assuming the presence of a quorum, the following sets forth the vote required to approve each proposal.

 

The approval of Proposals 1, 2, 4 and 6 require the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions and broker non-votes will not be treated as votes cast on each such proposal and thus will have no effect on the outcome of each such proposal.

 

The approval of Proposals 3 and 5 requires (i) that the total number of votes cast on the proposal represents at least a majority of the shares of US Gold common stock and the 2007 Exchangeable Shares, counted together as a single class, entitled to vote on the proposal, and (ii) the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions will be treated as votes cast on each such proposal and thus will have the effect of a vote "AGAINST" each such proposal. Broker non-votes will be counted as shares entitled to vote on each such proposal but will not be treated as votes cast on each such proposal and thus will have a negative impact on satisfying the requirement described in the preceding clause (i).

 

Furthermore, pursuant to MI 61-101 approval of Proposal 3 also requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class, excluding shares of US Gold common stock and 2007 Exchangeable Shares held by persons whose votes may not be included in determining minority approval pursuant to MI 61-101, including Robert R. McEwen, Chairman and Chief Executive Officer of US Gold and Minera Andes, Perry Ing, an officer of US Gold and Minera Andes, Ian Ball, an officer of US Gold who holds common shares of Minera Andes, Stefan Spears, an officer of US Gold who holds common shares of Minera Andes, and Allan Marter, a director of Minera Andes.

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Voting (see page 39)

 

Each holder of US Gold common stock and/or 2007 Exchangeable Shares is entitled to one vote for each share held as of the close of business on the record date. Holders of US Gold common stock or 2007 Exchangeable Shares may vote their shares in the manner described in "The Meeting—Voting."

US Gold stock owned by directors and executive officers (see page 180)

 

As of October 4, 2011, directors and executive officers of US Gold and their affiliates beneficially owned approximately 22% of the issued and outstanding shares of common stock of US Gold and 2007 Exchangeable Shares, counted together as a single class, entitled to vote at the Meeting, assuming our officers and directors exercise all of their options. Upon completion of the Arrangement, if Mr. McEwen exercises all of his outstanding options to purchase Minera Andes shares and US Gold common stock, we expect that Mr. McEwen will own approximately 68,293,241 shares of US Gold common stock and exchangeable shares or approximately 25% of the outstanding common stock, exchangeable shares and the 2007 Exchangeable Shares, counted together as a single class.

No Dissent or Appraisal Rights (see page 191)

 

Under Colorado law, holders of US Gold common stock are not entitled to dissent rights or appraisal rights in connection with any of the matters to be acted upon at the Meeting.

Additional Information

 

Additional information regarding each proposal is set forth in "Proposal 1—Amendment to Articles of Incorporation to Create and Designate a New Class of Preferred Stock" beginning on page 45, "Proposal 2—Amendment to Articles of Incorporation to Increase the Authorized Shares of Common Stock" beginning on page 46, "Proposal 3—Issuance of Stock in Connection with the Acquisition of Minera Andes" beginning on page 47, "Proposal 4—Amendment to US Gold Articles of Incorporation to Change the Name of US Gold to McEwen Mining Inc." beginning on page 48,"Proposal 5—Amendment and Restatement of US Gold Equity Incentive Plan" beginning on page 49 and "Proposal 6—Adjournment or Postponement of the Meeting to Solicit Additional Proxies" beginning on page 56.

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SELECTED HISTORICAL FINANCIAL DATA OF US GOLD

        The following are selected consolidated financial data for US Gold for each of the years in the five-year period ended December 31, 2010 and for the six-month periods ended June 30, 2011 and 2010. The information with respect each of the years in the five-year period ended December 31, 2010 has been derived from and should be read in conjunction with the audited consolidated financial statements and related notes and Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed with the SEC on May 14, 2011 and incorporated by reference in this proxy statement and Annual Report on Form 10-K for the fiscal year ended December 31, 2009, filed with the SEC on March 16, 2010. The information with respect to the six-month periods ended June 30, 2011 and 2010 has been derived from and should be read in conjunction with the unaudited consolidated financial statements and related notes included in US Gold's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 filed with the SEC on August 5, 2011 and incorporated by reference in this proxy statement. The information with respect to each of the years in the three-year period ended December 31, 2008 has been derived from audited consolidated financials not included in this proxy statement. All historical financial data presented with respect to US Gold is in accordance with US GAAP. Historical results are not indicative of the results to be expected in the future and results of interim periods are not necessarily indicative of results for the entire year.


US Gold Historical Financial Data

 
  Six Months Ended
June 30,
  Year Ended December 31,  
(in thousands, except per share)
  2011   2010   2010   2009   2008   2007   2006  

Operating data

                                           

Net loss from operations(1)(2)(3)(4)

  $ (22,885 ) $ (19,432 ) $ (35,783 ) $ (35,759 ) $ (130,384 ) $ (32,293 ) $ (75,178 )

Other income (expenses)

    997     (148 )   694     1,685     (1,573 )   3,426     2,528  

Net loss(1)(2)(3)(4)

    (21,888 )   (17,581 )   (33,091 )   (27,698 )   (131,111 )   (28,546 )   (72,650 )

Basic and diluted loss per share

  $ (0.16 ) $ (0.14 ) $ (0.27 ) $ (0.25 ) $ (1.36 ) $ (0.35 ) $ (1.82 )

Weighted average number of shares

    134,310     121,938     121,987     112,224     96,641     81,955     39,891  

Balance sheet data

                                           

Cash and cash equivalents

  $ 53,351   $ 24,906   $ 6,818   $ 27,690   $ 10,300   $ 30,929   $ 50,922  

Marketable securities

    3,710     11     4,576     11              

Short-term investments

        939         12,946              

Gold and silver bullion

    34,220     3,616     4,569     2,760              

Property and equipment, net

    11,316     4,142     4,391     2,888     5,187     5,547     1,520  

Mineral property interests

    236,224     233,981     235,153     239,858     255,813     258,121     3,300  

Goodwill

                        107,017      

Other assets

    8,839     6,123     6,118     5,826     6,377     7,055     3,657  
                               
 

Total assets

  $ 347,660   $ 273,718   $ 261,625   $ 291,979   $ 277,677   $ 408,669   $ 59,399  
                               

Current liabilities

  $ 4,607   $ 2,265   $ 3,680   $ 1,849   $ 1,278   $ 987   $ 3,403  

Deferred income tax liability

    78,573     78,573     78,573     80,572     87,341     88,187      

Other long-term liabilities and deferred gain

    6,219     6,503     6,092     6,332     5,864     5,574     3,511  

Shareholders' equity

    258,261     186,377     173,280     203,226     183,194     313,921     52,485  
                               
 

Total liabilities and shareholders' equity

  $ 347,660   $ 273,718   $ 261,625   $ 291,979   $ 277,677   $ 408,669   $ 59,399  
                               

(1)
Includes a non-recurring, non-cash expense of $51,681 relating to derivative instrument liability in 2006.

(2)
Includes a non-recurring, non-cash expense of $107,017 relating to the write down of the goodwill in 2008.

(3)
Includes a non-cash expense of $16,580 relating to the write-off of mineral property interests and equipment in 2009.

(4)
Includes a non-cash expense of $5,878 relating to the write-off of mineral property interests in 2010.

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SELECTED HISTORICAL FINANCIAL DATA OF
MINERA ANDES

        The following are selected consolidated financial data for Minera Andes for each of the years in the three-year period ended December 31, 2010 and for the six-month periods ended June 30, 2011 and 2010. The information with respect each of the years in the three-year period ended December 31, 2010 has been derived from and should be read in conjunction with the Minera Andes audited consolidated financial statements and related notes beginning on page 194 of this proxy statement and "Information About Minera Andes—Management's Discussion and Analysis of Financial Condition and Results of Operations" beginning on page 155 of this proxy statement. The information with respect to the six-month periods ended June 30, 2011 and 2010 has been derived from and should be read in conjunction with the Minera Andes unaudited consolidated financial statements and related notes included beginning on page 194 of this proxy statement. Minera Andes' financial statements for fiscal years ended December 31, 2008, December 31, 2009 and December 31, 2010 were, according to Minera Andes, prepared in accordance with Canadian GAAP, and for the six-month periods ended June 30, 2011 and June 30, 2010 were, according to Minera Andes, prepared in accordance with IFRS. Each of Canadian GAAP and IFRS differs from US GAAP in certain respects. Dollar values presented below are presented in U.S. dollars, unless otherwise indicated. See the sections entitled "Reporting Currencies and Financial Principles" on page vii and the note entitled "Differences Between Canadian ("CDN") and United States ("US") GAAP" contained in the notes to the audited consolidated financial statements of Minera Andes beginning on page F-1. For purposes of this proxy statement, we have provided selected historical financial data for the six-month periods ended June 30, 2011 and 2010 in IFRS and for the fiscal years ended December 31, 2010, 2009 and 2008 in Canadian GAAP, as well as a reconciliation to US GAAP for the six month periods ended June 30, 2011 and June 30, 2010 and for the fiscal years ended December 31, 2010, 2009 and 2008. Historical results are not indicative of the results to be expected in the future and results of interim periods are not necessarily indicative of results for the entire year.

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Minera Andes Historical Financial Data

 
  Six months ended
June 30,
  Six months ended
June 30,
  Year ended December 31,  
 
  2011   2010   2010   2009   2008  
(in thousands, except per share)
  IFRS   US
GAAP
  IFRS   US
GAAP
  CDN
GAAP
  US
GAAP
  CDN
GAAP
  US
GAAP
  CDN
GAAP
  US
GAAP
 

Operating Data

                                                             

Net income on Investment from MSC

  $ 24,808   $ 25,693   $ 3,911   $ 9,790   $ 24,461   $ 35,672   $ 9,349   $ 10,387   $ 4,696   $ 2,229  

Operating expenses

    (3,487 )   (3,487 )   (2,300 )   (2,300 )   (5,454 )   (5,454 )   (6,081 )   (6,081 )   (5,037 )   (5,037 )

Other income (expenses)

    6,406     (3,523 )   (224 )   (10,010 )   466     (33,242 )   847     (7,408 )   (3,634 )   (11,687 )

Net income (loss) and other comprehensive income (loss)

    27,727     18,683     1,387     (2,520 )   19,473     (3,024 )   4,115     (3,102 )   (3,975 )   (14,495 )

Basic and diluted earnings (loss) per share

  $ 0.10   $ 0.07   $ 0.01   $ (0.01 ) $ 0.07   $ (0.01 ) $ 0.02   $ (0.01 ) $ (0.02 ) $ (0.08 )

Weighted average number of shares, basic

    280,309     280,309     263,991     263,991     264,570     264,570     236,524     236,524     189,696     189,696  

Weighted average number of shares, diluted

    284,046     284,046     264,747     264,747     269,891     269,891     237,052     237,052     189,696     189,696  

Balance Sheet Data

                                                             

Cash and cash equivalents

  $ 10,567   $ 10,567   $ 7,958   $ 7,958   $ 13,834   $ 13,834   $ 18,872   $ 18,872   $ 3,410   $ 3,410  

Short-term investments

    11,405     11,405                                  

Receivables and prepaid expenses

    229     229     181     181     354     354     252     252     315     1,179  

Project loan interest receivable (current)

            8,897     8,897     9,121     9,121     7,600     7,600     4,984     4,984  

Project loan interest receivable (noncurrent)

                    587     587                  

Project loan receivable

    31,850     31,850     31,850     31,850     31,850     31,850     31,850     31,850     31,850     31,850  

Mineral properties and deferred exploration costs

    43,032         29,077         32,680         19,255         16,391      

Investment in Minera Santa Cruz

    127,419     109,615     92,634     68,613     103,954     85,264     88,723     58,822     80,344     49,406  

Equipment, net

    331     331     190     190     277     277     19     19     31     31  
 

Total Assets

  $ 224,833   $ 163,997   $ 170,787   $ 117,689   $ 192,657   $ 141,287   $ 166,571   $ 117,415   $ 137,325   $ 90,860  

Current liabilities

 
$

3,249
 
$

3,249
 
$

17,020
 
$

17,020
 
$

12,621
 
$

37,909
 
$

10,349
 
$

16,004
 
$

35,920
 
$

36,784
 

Deferred income tax liability

    1,979         1,297                              

Project loan interest payable

                    587     587                  

Project loan payable

    31,850     31,850     31,850     31,850     31,850     31,850     31,850     31,850     31,850     31,850  

Shareholders' Equity

    187,755     128,898     120,620     68,819     147,599     70,941     124,372     69,561     69,555     22,226  

Total liabilities and shareholders' equity

  $ 224,833   $ 163,997   $ 170,787   $ 117,689   $ 192,657   $ 141,287   $ 166,571   $ 117,415   $ 137,325   $ 90,860  

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SELECTED UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL DATA

        The following selected unaudited pro forma combined consolidated financial data has been prepared to give effect to US Gold's acquisition of Minera Andes in a transaction accounted for as a purchase in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 805, Business Combinations as if the Arrangement occurred as of January 1, 2010. This data should be read in conjunction with the information set forth under "Information About Minera Andes" in this proxy statement beginning on page 113 and the unaudited pro forma combined consolidated financial statements set forth in Annex C to this proxy statement.

        The selected unaudited pro forma combined consolidated financial data presented below are presented in accordance with US GAAP and in U.S. dollars. Minera Andes' consolidated financial statements and the notes thereto for the six-month period ended June 30, 2011 have been prepared in accordance with IFRS and for the fiscal year ended December 31, 2010 in accordance with Canadian GAAP and all reconciliations of IFRS or Canadian GAAP information to US GAAP are based on information taken directly from Minera Andes' public reports and filings or provided to us by Minera Andes. The selected unaudited pro forma combined consolidated financial data presented below are for illustrative purposes only and are not necessarily indicative of the actual operating results or financial position that would have resulted if US Gold and Minera Andes had combined at the beginning of the periods presented, nor is it necessarily indicative of any future operating results or financial position of US Gold if combined with Minera Andes. The unaudited pro forma balance sheet reflects the preliminary adjustments to record the estimated fair values of the assets and liabilities acquired in the combination with Minera Andes. To the extent there are significant changes to the business of Minera Andes, the assumptions and estimates reflected herein could change significantly by the closing date of the Arrangement. Accordingly, the purchase accounting adjustments reflected in the unaudited pro forma combined consolidated financial data below are preliminary and subject to change. In addition, the selected unaudited pro forma combined consolidated financial data presented below does not reflect any potential operating efficiencies of the combined entities. This summary data should be read together with the unaudited pro forma combined consolidated financial statements as at the six-month period ended June 30, 2011 and for the year ended December 31, 2010 set forth in Annex C to this proxy statement. See also the Section entitled "Risk Factors—The pro forma financial statements are

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presented for illustrative purposes only and may not be an indication of the combined company's financial condition or results of operations following the Arrangement" beginning on page 32.

 
  US Gold and Minera Andes
Summary Selected Unaudited Pro Forma
Combined Consolidated Financial Data
 
US GAAP
  Year Ended
December 31, 2010
  6 Months Ended
June 30, 2011
 
 
  ($ in thousands except per share data)
 

Operating data

             

Revenue

  $ 13,690   $ 12,064  

Costs and Expenses

  $ 54,675   $ 36,724  

Operating loss

  $ (40,985 ) $ (24,660 )

Other (expense) income

  $ (19,110 ) $ 7,826  

Net loss

  $ (58,097 ) $ (16,834 )

Basic and diluted loss per share

  $ (0.23 ) $ (0.06 )

Weighted average common shares outstanding

    249,201     261,524  

Balance sheet data

             

Current assets

        $ 117,127  

Mineral property interest

        $ 568,378  

Investment in Minera Santa Cruz ("MSC")

        $ 289,060  

Property and equipment

        $ 11,647  

Project loan receivable

        $ 31,850  

Other assets

        $ 5,194  

Total assets

        $ 1,023,256  

Current liabilities

        $ 12,768  

Deferred income tax liability

        $ 236,341  

Project loan payable

        $ 31,850  

Other long-term liabilities

        $ 6,219  

Total liabilities

        $ 287,178  

Shareholders' equity

        $ 736,078  

Total liabilities and shareholders' equity

        $ 1,023,256  

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RISK FACTORS

        The information below sets forth risks and uncertainties relating to the Arrangement and the proposals described in this proxy statement that could materially adversely affect US Gold's business, financial condition and/or operating results. This information should be read in conjunction with US Gold's Annual Report on Form 10-K for the year ended December 31, 2010, which is incorporated by reference herein and sets forth additional important risks and uncertainties that could materially adversely affect US Gold's business, financial condition and/or operating results. You should carefully consider these risks in determining whether to vote in favor of the proposals described herein. Additional risks and uncertainties that US Gold does not presently know or that US Gold currently deems immaterial may also impair US Gold's business operations.

The Arrangement is subject to conditions to closing that could result in the Arrangement being delayed or not consummated or can be terminated in certain circumstances, each of which could negatively impact our stock price and future business and operations.

        The Arrangement is subject to conditions to closing as set forth in the Arrangement Agreement, including obtaining the requisite approval of our shareholders voting together with the holders of the 2007 Exchangeable Shares, requisite approval of the Minera Andes shareholders and approval of the Court. In addition, each of US Gold and Minera Andes has the right, in certain circumstances, to terminate the Arrangement Agreement. See "The Arrangement Agreement" beginning on page 85 for a summary of such conditions and termination rights. If the Arrangement Agreement is terminated or any of the conditions to the Arrangement are not satisfied and, where permissible, not waived, the Arrangement will not be consummated. Failure to consummate the Arrangement or any delay in the consummation of the Arrangement or any uncertainty about the consummation of the Arrangement may adversely affect our stock price or have an adverse impact on our future business operations.

        If the Arrangement is not completed, our ongoing business may be adversely affected and, without realizing any of the benefits of having completed the Arrangement, we would be subject to a number of risks, including the following:

    negative reactions from the financial markets and from persons who have or may be considering business dealings with us;

    we will be required to pay certain costs relating to the Arrangement, whether or not the Arrangement is completed. We expect to incur acquisition-related expenses of approximately $4.9 million, consisting of investment banking, legal and accounting fees and printing and other related charges in connection with the Arrangement. These amounts are preliminary estimates and the actual amounts may be higher or lower; and

    we have agreed to pay a termination fee of $25,600,000 if the Arrangement Agreement is terminated in certain circumstances or the Arrangement is not completed for certain reasons. See "The Arrangement Agreement—Termination Fees" beginning on page 100 for further information regarding termination fees.

        In addition, we could be subject to litigation related to any failure to complete the Arrangement or related to any proceeding commenced against us seeking to require us to perform our obligations under the Arrangement Agreement.

The Arrangement Agreement may be terminated by US Gold or Minera Andes in certain circumstance which could negatively impact our stock price and future business and operations

        Each of US Gold and Minera Andes has the right, in certain circumstances, to terminate the Arrangement Agreement. See "The Arrangement Agreement—Termination of the Arrangement Agreement" beginning on page 98. Accordingly, there can be no certainty, nor can US Gold provide

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any assurance, that the Arrangement Agreement will not be terminated by either of US Gold or Minera Andes prior to the completion of the Arrangement. For example, both US Gold and Minera Andes have the right, in certain circumstances, to terminate the Arrangement Agreement in the event of a change that has a material adverse effect in respect of the other party. Although a material adverse effect excludes certain events that are beyond the control of either party, such as, among others, any change in general political, financial or economic conditions including in Canada, the United States, Mexico, Central America or South America; any change in the state of securities, currency, exchange or commodities markets in general or changes in commodity prices or currency exchange rates; changes affecting the mining industry in general provided each such change doesn't have a materially disproportionate effect on such party. There can be no assurance that a change having a material adverse effect on either US Gold or Minera Andes will not occur prior to the effective date of the Arrangement, in which case either US Gold or Minera Andes, as the case may be, could elect to terminate the Arrangement Agreement and the Arrangement would not proceed. In addition, both US Gold and Minera Andes can withdraw, modify, qualify or change its recommendation to its shareholders prior to the approval of the Arrangement (i) to support a superior proposal, or (ii) if the board of directors determines that such withdrawal, modification, qualification or change is necessary for the board of directors to act in a manner consistent with its fiduciary duties under applicable laws and the boards financial advisor has confirmed in writing that it is unable to render a fairness opinion in respect of the Arrangement at such time. If, for any reason, the Arrangement Agreement is terminated, this could adversely affect our stock price and have an adverse impact on our future business operations.

The pro forma financial statements are presented for illustrative purposes only and may not be an indication of the combined company's financial condition or results of operations following the Arrangement.

        The pro forma financial statements contained in this proxy statement are presented for illustrative purposes only and may not be an indication of the combined company's financial condition or results of operations following the Arrangement for several reasons. For example, the pro forma financial statements have been derived from the historical financial statements of US Gold and Minera Andes and certain adjustments and assumptions have been made regarding the combined company after giving effect to the Arrangement. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments and assumptions are difficult to make with complete accuracy. Moreover, the pro forma financial statements do not reflect all costs that are expected to be incurred by the combined company in connection with the Arrangement. For example, the impact of any incremental costs incurred in integrating US Gold and Minera Andes is not reflected in the pro forma financial statements. Furthermore, the financial statements of Minera Andes included in the pro forma financial statements have been prepared in accordance with IFRS and Canadian GAAP. The pro forma financial statements were prepared by US Gold by reconciling Minera Andes information to US GAAP. Such reconciliation is preliminary and the adjustments are difficult to make with complete accuracy. As a result, the actual financial condition and results of operations of the combined company following the Arrangement may not be consistent with, or evident from, these pro forma financial statements. In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect the combined company's financial condition or results of operations following the Arrangement. Our stock price may be adversely affected if the actual results of the combined company fall short of the pro forma financial statements contained in this proxy statement. See the section entitled "Selected Unaudited Pro Forma Combined Consolidated Financial Data" beginning on page 29 of this proxy statement and the Unaudited Pro Forma Combined Consolidated Financial Statements attached as Annex C to this proxy statement.

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Minera Andes' public filings are subject to Canadian disclosure standards, which differ from SEC requirements.

        Minera Andes is a Canadian issuer that is required to prepare and file its periodic and other filings in accordance with Canadian securities laws. As a result, certain of the information about Minera Andes, including any management's discussion and analysis, that is contained in this proxy statement was prepared in conjunction with Minera Andes' financial statements that were prepared in accordance with IFRS or Canadian GAAP and other Canadian disclosure regulations, rather than the requirements that would apply in the United States. Furthermore, information regarding Minera Andes' mineral properties was prepared in accordance with NI 43-101which has disclosure standards that differ from the standards set forth by the SEC, including Guide 7. See "Cautionary Note to U.S. Investors—Information Concerning Preparation of Resource and Reserve Estimates" for additional information regarding differing disclosure requirements. Because Canadian disclosure requirements are different from SEC requirements, the information about Minera Andes contained in this proxy statement may not be comparable to similar information available about US Gold or other U.S. issuers.

Directors and executive officers of US Gold may have interests in the Arrangement that are different from those of US Gold shareholders and the holders of the 2007 Exchangeable Shares generally.

        Certain executive officers and directors of US Gold may have interests in the Arrangement that may be different from, or in addition to, the interests of US Gold shareholders and the holders of the 2007 Exchangeable Shares generally. For example, Robert R. McEwen, the Chairman of the Board, Chief Executive Officer and largest shareholder of US Gold, is also the Chairman of the Board, Chief Executive Officer and largest shareholder of Minera Andes. The Board and the Minera Andes board of directors each established a special committee comprised of independent directors to evaluate the Arrangement and advise the full boards of directors of US Gold and Minera Andes on whether the Arrangement is in the best interests of and fair to their respective companies and respective shareholders. Each of the special committees retained its own independent legal counsel and financial adviser. The special committees of both US Gold and Minera Andes recommended in favor of the Arrangement. Nevertheless, you should consider these interests in connection with your vote on the proposals described in this proxy statement, including whether these interests may have influenced US Gold's directors and executive officers to recommend or support the proposals.

Completion of the Arrangement would result in the issuance of a significant amount of additional common stock, which will reduce the voting power of our current shareholders and may depress the trading price of our common stock.

        Completion of the Arrangement would result in the issuance of a significant amount of our common stock. Pursuant to the Arrangement Agreement, we expect that Canadian Exchange Co. will issue up to approximately 127,326,984 exchangeable shares in consideration for the currently outstanding shares of Minera Andes and US Gold will reserve approximately 1,906,650 shares of common stock issuable upon exercise of Minera Andes Options. If all of the exchangeable shares that are issued pursuant to the Arrangement are exchanged for our common stock, it would represent an increase in the outstanding shares of US Gold common stock of approximately 91% of the common stock and the 2007 Exchangeable Shares, counted together as a single class, we presently have outstanding, or 92% if all outstanding Minera Andes Options are exercised. Following completion of the Arrangement, former Minera Andes shareholders would hold or have the right to direct the vote of approximately 47% of the voting power of our outstanding shares of common stock, the exchangeable shares and the 2007 Exchangeable Shares, counted together as a single class, on a fully diluted basis. As a result, our existing shareholders will not exert the same degree of voting power with respect to the combined company that they did before the consummation of the Arrangement. Further, the issuance of such a significant amount of common stock and its potential sale in the public market from time to

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time, could depress the trading price of our common stock and you may lose all or a part of your investment.

Minera Andes may be less valuable to us than expected.

        The value of Minera Andes to us is based in large part on identifying resources on its properties and establishing reserves on those properties. This requires us to make accurate assumptions regarding the valuation of Minera Andes, the exploration results at Minera Andes' properties and estimated capital needs to continue an exploration program at Minera Andes' properties. While the San José Mine has proven reserves, Minera Andes only has "inferred resources" and "indicated resources" at its other properties. There can be no assurance that these mineral resources will be upgraded to mineral reserves or that even if mineral deposits are discovered, that such mineral deposits can be commercially mined. Whether a mineral deposit can be commercially viable depends upon a number of factors, including the particular attributes of the deposit, including size, grade and proximity to infrastructure; metal prices, which can be highly volatile; and government regulations, including environmental and reclamation obligations. If, after our combination with Minera Andes, we are unable to establish some or all of the mineralized material as proven or probable reserves in sufficient quantities to justify commercial operations, we may not be able to raise sufficient capital to develop a mine. If we are unable to establish such reserves, the market value of our securities may decline, and you may lose some or all of your investment.

Title to mineral properties are subject to title and other defects and contest by prior owners, various parties who may have had rights to the land, and governmental authorities. These risks may be hard to identify in acquisition transactions, and Minera Andes may be subject to risk of loss of ownership of mineral properties.

        Interests in mining projects or properties generally are subject to uncertainties and complexities arising from the application of contract and property laws governing private parties and/or local or national governments in the jurisdiction where mining projects are located. We cannot guarantee that title to properties held by Minera Andes will not be challenged. Title insurance is generally not available for mineral properties and our ability to ensure that Minera Andes has obtained secure title to individual mineral properties or mining claims is severely constrained. Minera Andes' mineral properties may be subject to prior unrecorded agreements, transfers or claims, and title may be affected by, among other things, conflicting title rights and undetected defects. Disputes could also arise challenging, among other things, the existence or geographic extent of mining interests. Upon completion of the Arrangement, we may incur significant costs related to defending the title to our properties. Unknown defects in title to the Minera Andes properties may prevent us from realizing the anticipated benefits from the Arrangement.

Minera Andes is subject to ongoing legal proceedings and its Los Azules Copper Project is at risk of loss, which may adversely affect the value of Minera Andes.

        Currently Minera Andes is subject to ongoing litigation regarding the Los Azules Copper Project. TNR Gold Corp ("TNR Gold") and its subsidiary, Solitario Argentina S.A. ("Solitario" and together with TNR Gold, "TNR") claim that certain properties that comprise the Los Azules Copper Project were not validly transferred to Minera Andes and therefore should be returned to TNR. In the alternative, TNR claims that even if Minera Andes validly owns the Los Azules Copper Project, TNR has a 25% back-in right to a substantial portion of the Los Azules project underlying known mineral resources that may be exercised to acquire a 25% interest in such part of the property. TNR has also claimed damages. US Gold estimates that the Los Azules Copper Project represents approximately 42% of the total net assets acquired, not counting liabilities assumed, in the Arrangement, based on US Gold's preliminary estimate of the fair value of all identifiable assets acquired and liabilities assumed.

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        Minera Andes has rejected TNR's claims. However, Minera Andes has stated that it is not able to estimate the potential financial impact of this claim. If resolved adversely to Minera Andes, this litigation could materially adversely affect the value of Minera Andes by reducing or terminating its interest in a significant portion of the Los Azules Copper Project and its ability to develop the Los Azules Copper Project. Alternatively, Minera Andes could be subject to a significant damages award. Such a result would have a significant negative impact on the value of the combined company and could have a significant impact on US Gold's stock price. In addition, US Gold on a consolidated basis will inherit the legal liabilities and costs associated with the litigation and the claims surrounding the Los Azules Copper Project, including the risk of loss of a significant portion of the Los Azules Copper Project, upon completion of the Arrangement. For more information regarding these claims, see "Information About Minera Andes—Legal Proceedings" beginning on page 152.

Minera Andes does not control (jointly or otherwise) the San José Mine and has no control over the timing or amount of future cash calls.

        Minera Andes holds 49% of the voting shares of MSC, the operator of the San José Mine, and Hochschild holds the balance. The board of directors of MSC consists of three members, only one of which is a nominee of Minera Andes. Hochschild is entitled to appoint the balance of the members of the board of directors of MSC. The joint venture agreement with Hochschild does however grant Minera Andes a "veto" in respect of certain and very limited matters regarding the affairs of MSC and the operation of the San José Mine by making such matters subject to the unanimous approval of the MSC board of directors. For example, a sale of all or substantially all of the assets of MSC; an amendment to the Articles of Incorporation of MSC that would have an adverse effect on the rights of any particular shareholder to receive its share of the profits of MSC; entry into a new line of business; acquisition of real property or conducting exploration, development or mining outside of the San José Mine; or any merger or other corporate combination involving MSC requires unanimous approval from the Minera Andes and Hochschild designees on the MSC board of directors. However, in the event of a disagreement between Hochschild as "majority owner" and Minera Andes as "minority owner," concerning any act of MSC that requires the unanimous approval of the board of directors of MSC, Hochschild has the option to purchase all of the shares of MSC held by Minera Andes for "fair value". Accordingly, MSC and the San José Mine are generally under the control of Hochschild.

        As a result, Minera Andes has limited, if any, ability to control the timing or amount of cash calls requiring outlays by Minera Andes or any other matter relating to the management of MSC and the San José Mine and decisions made in that regard may have an adverse effect on the operations and financial position of US Gold after the completion of the Arrangement.

        Furthermore, the joint venture agreement with Hochschild provides that the board of directors of MSC may elect to raise additional funds by issuing shares of MSC, and in such event, each shareholder of MSC shall have a pre-emptive right to subscribe and pay for its pro rata share of such additional shares of MSC. Historically, MSC's operations have been financed in this manner. Any shares not purchased by Minera Andes pursuant to its pre-emptive right may be purchased by Hochschild or any third party who is offered shares in the financing. Accordingly, in the event of a cash call by MSC financed by share subscriptions, a failure by Minera Andes to exercise its pre-emptive right, in full or at all, may result in a reduction of Minera Andes's interest in the San José Mine.

        There can be no assurance that if a cash call is made, Minera Andes will have the funds available to satisfy such cash call when due and that Minera Andes' interest in the San José Mine will not be reduced accordingly. If this were to occur, it could have a significant negative impact on the value of the combined company and could have a significant impact on US Gold's stock price. US Gold on a consolidated basis will inherit the effect of these financing arrangements and the limited involvement in the management of MSC after the completion of the Arrangement.

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We will require significant additional capital to continue our exploration activities, and, if warranted, to develop additional mining operations.

        Upon completion of the Arrangement, substantial expenditures will be required to continue the exploration programs at Minera Andes exploration stage properties. We will be required to expend significant amounts of capital for geological and geochemical analysis, assaying and, if warranted, feasibility studies with regard to the results of our exploration. We may need to obtain additional financing, either in the form of debt or equity financing, to fund such expenditures. We may not benefit from these investments if we are unable to identify commercially exploitable reserves. Furthermore, expenditures we make for Minera Andes properties may reduce the availability of capital to pursue our exploration programs at El Gallo, where we are in the process of a feasibility study, and Gold Bar, where we are in the process of a pre-feasibility study.

        If we are successful in identifying commercially exploitable reserves, we will require significant additional capital to extract those reserves. Our ability to obtain necessary funding, in turn, depends upon a number of factors, including the state of the economy and applicable commodity prices. We may not be successful in obtaining the required financing for these or other purposes on terms that are favorable to us or at all, in which case, our ability to continue operating would be adversely affected. Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration or potential development and the possible partial or total loss of our interest in certain properties.

Development at Minera Andes' Los Azules property presents development challenges that may negatively affect, if not completely negate, the feasibility of development of the property.

        Minera Andes' Los Azules property is considered to represent one of the largest undeveloped copper deposits in the world. However, the property is located in a remote location that is accessed by 120 kilometers of unimproved dirt road with eight river crossings and two mountain passes both above 4,100 meters. According to the technical report prepared for Minera Andes for the Los Azules property, capital costs are estimated to be $2.8 billion initially and $3.73 billion over the life of the mine with an accuracy target of plus or minus 35%. In order for the Los Azules property to be economically feasible for development, the price of copper would have to be high enough to justify the high capital costs estimated for the project. If the price of copper were to decrease below the current price, the Los Azules property may cease to be feasible for development, and Minera Andes may not develop the property and may have to write-off the asset. This would have a material negative affect on Minera Andes, and US Gold if the Arrangement is completed. Furthermore, even if the development of the Los Azules property remains economically feasible, Minera Andes, and US Gold if the Arrangement is completed, may not be able to raise sufficient capital to develop the property, may not receive the required permits or environmental approvals, may not be able to construct the necessary power and infrastructure assets and may not be able to attract qualified workers to build such a project, each of which could result in the delay of or indefinitely postpone development at the property. Such a result would have a material negative affect on Minera Andes, and US Gold if the Arrangement is completed.

The ongoing operations of Minera Andes are subject to environmental risks, which we will assume after our acquisition of Minera Andes and which could expose us to significant liability and delay, suspension or termination of certain of our operations.

        Minera Andes' operations are subject to extensive environmental regulation in Argentina. The Environmental Protection Section of the National Mining Code of Argentina, enacted in 1995, requires that each Provincial government monitor and enforce the laws pertaining to prescribed development and protection of the environment. The Argentine Constitution establishes that the Federal Government is required to set the minimum standards. In 2002, the National Congress established such

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minimum standards for the protection of the sustainable environmental management and the protection of biodiversity, which are applicable throughout Argentina. Provinces are entitled to strengthen those standards. Further, the Argentine Constitution, as amended in 1994, allows any individual who believes a third party may be damaging the environment to initiate an action against such party. These laws and regulations have a substantial impact on Minera Andes' operations and could result in material adverse effects on its financial position and results of operation. Nevertheless, the regulation of environmental matters is not as well developed in Argentina as in the United States and certain other countries but it is developing at a rapid pace. Such environmental regulation is evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects, and a heightened degree of responsibility for companies and their officers, directors and employees. Future changes in environmental regulation in Argentina, if any, may adversely affect Minera Andes' operations, make its operations prohibitively expensive, or prohibit them altogether. Environmental hazards may exist on Minera Andes' properties that are unknown to us at the present and that have been caused by Minera Andes, or previous owners or operators, or that may have occurred naturally.

The ongoing operations of Minera Andes are subject to various laws and regulations.

        Minera Andes' operations are subject to various laws, regulations and permitting requirements. Failure to comply with such laws, regulations and permitting requirements may result in civil or criminal fines or penalties or in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed or corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Minera Andes may be required to compensate those suffering loss or damage by reason of its mining or exploration activities. Due to an increased level of non-governmental organization activity targeting the mining industry in Argentina, the potential for the government to delay the issuance of permits or impose new requirements or conditions upon mining operations may be increased. Any changes in government policies may be costly to comply with and may delay mining operations. Future changes in such laws and regulations, if any, may adversely affect Minera Andes' operations, make its operations prohibitively expensive, or prohibit them altogether. If Minera Andes' interests in Argentina are materially adversely affected as a result of a violation of applicable laws, regulations, or permitting requirements or a change in applicable law or regulations, it would have a significant negative impact the value of the combined company and could have a significant impact on US Gold's stock price.

Minera Andes is subject to risks relating to economic and political instability in Argentina.

        All of Minera Andes' material properties are located in Argentina. There are risks relating to an uncertain or unpredictable political and economic environment in Argentina. During an economic crisis in 2002 and 2003, Argentina defaulted on foreign debt repayments and on the repayment on a number of official loans to multinational organizations. In addition, the Argentinean government has renegotiated or defaulted on contractual arrangements.

        In January 2008, the Argentinean government reassessed its policy and practice in respect of export duties and began levying export duties on mining companies operating in the country. Although this particular change does not affect Minera Andes as its fiscal stability agreement explicitly fixes export duties at 5% for doré bars and 10% for concentrates, there can be no assurance that the Argentinean government will not unilaterally take other action which could have a material adverse affect on Minera Andes' interests in Argentina, including in particular the San José Mine.

        There have been recent indications in Argentina that refunds of VAT (IVA) may be delayed. Delays in the payment of VAT refunds may have an impact on the cash flow from the operations of MSC, the operator of the San José Mine. Such reduction in cash flow could affect MSC's ability to

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make timely payments related to the operation of the mine and could require MSC to seek additional financing, including from Minera Andes.

        There also is the risk of political violence and increased social tension in Argentina as Argentina has experienced periods of civil unrest, crime and labor unrest. Certain political and economic events such as acts, or failures to act, by a government authority in Argentina, and acts of political violence in Argentina, could have a material adverse effect on Minera Andes' ability to operate.

        If Minera Andes' interests in Argentina are materially adversely affected as a result of the political or economic environment in Argentina it would have a significant negative impact the value of the combined company and could have a significant impact on US Gold's stock price.

The Arrangement will increase our exposure to foreign currency risk.

        Following completion of the Arrangement, we will hold assets, incur liabilities, earn revenues and pay expenses for our Argentine operations in Argentine pesos. Because our financial statements will continue to be presented in U.S. dollars, we will be required to translate assets, liabilities, income and expenses that relate to our Argentine operations and that are denominated in Argentine pesos into U.S. dollars at the then-applicable exchange rates. Consequently, increases and decreases in the value of the U.S. dollar versus the Argentine peso will affect the value of these items in our financial statements, even if their underlying value has not changed, and as a result, our financial results could be more volatile as a result of the Arrangement. Although we may enter into transactions to hedge portions of this foreign currency translation exposure, we will not be able to eliminate this exposure. In addition, U.S., Canadian and Argentine laws may limit our ability to repatriate cash from Argentina as dividends or otherwise to the United States and may limit our ability to convert Argentine pesos into U.S. dollars. Further, there may be potential tax inefficiencies in repatriating funds from Argentina.

If our authorized shares of common stock is increased as we are proposing, we may be able to issue a significant number of additional shares of common stock in the future. Additional issuances of common stock by us would dilute your ownership interest in US Gold, could reduce some or all of our financial measures on a per share basis and could reduce the trading price of our common stock.

        We may issue equity in the future in connection with acquisitions, strategic transactions or for other purposes. To the extent we issue additional equity securities, your ownership interest in US Gold would be diluted. Furthermore some or all of our financial measures on a per share basis could be reduced. In addition, the shares of common stock that we issue may not be subject to resale restrictions and may be freely tradable in the United States and in Canada. The market price of our common stock could decline if certain large holders of our common stock, or recipients of our common stock sell all or a significant portion of their shares of common stock or are perceived by the market as intending to sell these shares other than in an orderly manner.

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THE MEETING

Purpose of the Meeting

        This proxy statement is furnished in connection with the solicitation of proxies of US Gold shareholders and the holders of the 2007 Exchangeable Shares by the Board for use at the Meeting to be held at [    •    ] in Toronto, Canada at [    •    ], local time, on [    •    ], and at any adjournments or postponements thereof. The Meeting is being called to consider the following matters:

    Proposal 1—an amendment to the US Gold Articles of Incorporation to create a new class of US Gold stock comprised of one share of preferred stock, designated as Series B Special Voting Preferred Stock, no par value, to be issued in connection with the Arrangement and for the purposes further described in this proxy statement;

    Proposal 2—an amendment to the US Gold Articles of Incorporation to increase the authorized shares of common stock of US Gold from 250,000,000 shares to 500,000,000 shares;

    Proposal 3—the issuance of exchangeable shares of Canadian Exchange Co. and shares of common stock of US Gold issuable upon exchange of such exchangeable shares and exercise of Minera Andes Options, in connection with the Arrangement;

    Proposal 4—an amendment to the US Gold Articles of Incorporation to change the name of US Gold to McEwen Mining Inc., which will be filed after completion of the Arrangement;

    Proposal 5—the amendment and restatement to the US Gold Equity Incentive Plan as described in more detail elsewhere in this proxy statement; and

    Proposal 6—the adjournment or postponement of the Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Meeting to approve and adopt any of Proposals 1 through 5.

        The passage of Proposals 1, 2 and 3, the Arrangement Proposals, is necessary for US Gold to complete the transaction with Minera Andes. See "The Arrangement" starting on page 62, "The Arrangement Agreement" starting on page 85 and "Structure of the Arrangement" starting on page 102 for further information about the Arrangement. Therefore, the Arrangement cannot be completed as currently contemplated unless US Gold shareholders and the holders of the 2007 Exchangeable Shares, voting together as a single class, approve each of the Arrangement Proposals.


Record Date and Outstanding Shares

        All holders of record of US Gold common stock or 2007 Exchangeable Shares, other than US Gold or any of its subsidiaries, at the close of business on [    •    ], the record date, are entitled to notice of, to attend, and to vote on the proposals at, the Meeting, or any adjournment or postponement thereof. On the record date, there were [    •    ] shares of US Gold common stock and [    •    ] 2007 Exchangeable Shares outstanding and entitled to vote together as a single class at the Meeting.


Voting

        Each holder of US Gold common stock is entitled to one vote for each share of US Gold common stock held as of the close of business on the record date. Each holder of 2007 Exchangeable Shares, other than US Gold or any of its subsidiaries, is entitled to one vote for each such exchangeable share held as of the close of business on the record date.

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        If you are a holder of record of US Gold common stock, you can vote in any one of the following ways:

    by signing and returning the proxy card in the enclosed postage pre-paid addressed envelope;

    on the Internet or by telephone by following the instructions on the enclosed proxy card; or

    by attending the Meeting and voting in person.

        If your stock is held in the name of an Intermediary, you must present a proxy from the Intermediary in order to verify that the Intermediary has not voted your shares on your behalf.

        Shares of US Gold common stock represented by properly executed proxies received before the Meeting will be voted at the Meeting in the manner specified on the proxies. Physical proxies that are properly executed and timely submitted but which do not contain specific voting instructions will be voted "FOR" each of the proposals presented at the Meeting.

        If you are a holder of record of 2007 Exchangeable Shares, you can vote your 2007 Exchangeable Shares in any one of the two following ways:

    by signing and returning the enclosed voting instruction form to the Trustee. This form permits you to instruct the Trustee to vote at the Meeting. The Trustee must receive your voting instruction by 5:00 p.m. ([    •    ] time) on [    •    ], 2011 at the address indicated on the voting instruction form. This will give the Trustee time to tabulate the voting instructions and vote on your behalf; or

    by attending the Meeting and voting in person, if you instruct the Trustee (by following the procedures set forth in the enclosed voting instruction form) to give you or your designee a proxy to exercise the voting rights personally at the Meeting. You may also instruct the Trustee to give a proxy to a designated representative of US Gold to exercise such voting rights.

        Only holders of the 2007 Exchangeable Shares whose names appear on the records of 2007 Acquisition Co. as the registered holders of the 2007 Exchangeable Shares as of the record date are entitled to instruct the Trustee as to how to exercise voting rights in respect of their 2007 Exchangeable Shares at the Meeting. If on the record date your 2007 Exchangeable Shares were held, not in your name, but rather in an account at an Intermediary, then these proxy materials are being forwarded to you by that organization. The Intermediary holding your account is considered to be the shareholder of record for purposes of instructing the Trustee as to how to vote your 2007 Exchangeable Shares. As a beneficial owner, you have the right to direct the Intermediary regarding how to instruct the Trustee as to how to vote your 2007 Exchangeable Shares.


Voting of Proxies

        Shares of US Gold common stock represented by properly executed proxies received before the Meeting will be voted at the Meeting in the manner specified on the proxies. Physical proxies that are properly executed and timely submitted but which do not contain specific voting instructions will be voted "FOR" each of the proposals presented at the Meeting.

        The Trustee will vote the 2007 Exchangeable Shares in the manner specified on properly executed and timely submitted voting instructions to the Trustee from the holders of such 2007 Exchangeable Shares.

        Your vote is important.    Accordingly, if you are a holder of US Gold common stock, please submit your proxy by telephone, through the Internet or by mail, whether or not you plan to attend the Meeting in person. Such proxies must be received by 11:59 p.m. Eastern Time on [    •    ], 2011. If your shares of stock are held by an Intermediary, please provide a proxy from such Intermediary or direct the Intermediary how to vote your shares.

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        If you are a holder of record of 2007 Exchangeable Shares, please submit your voting instruction to the Trustee, whether or not you plan to attend the Meeting in person. The Trustee must receive your voting instruction by 5:00 p.m. ([    •    ] time) on [    •    ], 2011 at the address indicated on the voting instruction form. If your 2007 Exchangeable Shares are held by an Intermediary, please direct the Intermediary how to instruct the Trustee as to how to vote your 2007 Exchangeable Shares.


Revocation of Proxies

        You may revoke your proxy and/or change your vote at any time before your shares are voted at the Meeting.

        If you are a holder of record of US Gold common stock, you can revoke your proxy and/or change your vote by:

    sending a written notice stating that you revoke your proxy to US Gold at Suite 4750, Brookfield Place, Bay Wellington Tower, 181 Bay Street, P.O. Box 792, Toronto, Ontario, Canada M5J 2T3, Attn: Corporate Secretary, as long as the notice bears a date subsequent to the date of the proxy and is received no later than two business days prior to the Meeting;

    submitting a valid, later-dated proxy by mail, telephone or through the Internet that is received prior to the Meeting; or

    attending the Meeting and voting by ballot in person. Your attendance at the Meeting will not, by itself, revoke any proxy that you have previously given. You must notify a representative of US Gold at the Meeting of your desire to revoke your proxy and vote in person.

        If you are a holder of record of 2007 Exchangeable Shares, you can revoke your voting instructions and/or change your vote by:

    sending a written notice to the Trustee stating that you revoke your voting instructions and instructing the Trustee to not vote your 2007 Exchangeable Shares, as long as the notice bears a date subsequent to the date of the voting instructions and is received no later than 5:00 p.m. ([    •    ] time) on [    •    ], 2011 at the address indicated on the voting instruction form; or

    submitting a valid, later-dated signed voting instruction form to the Trustee at the address indicated on the voting instruction form by 5:00 p.m. ([    •    ] time) on [    •    ], 2011.

        If you have instructed an Intermediary to vote your shares, you must follow directions received from the Intermediary to change those instructions.


Voting in Person

        US Gold shareholders may vote in person at the Meeting even if they already have provided their proxy in the manner described in this proxy statement and in the accompanying proxy card. Such shareholders must notify a representative of US Gold at the Meeting of their desire to revoke their proxy and vote in person. Please note that US Gold shares may only be voted by the record owner of the shares, so US Gold shareholders whose shares are held in the name of an Intermediary and who wish to vote those shares in person at the Meeting must obtain a valid proxy from the Intermediary in order to vote the shares in person at the Meeting.

        Holders of 2007 Exchangeable Shares may vote in person at the Meeting if they instruct the Trustee (by following the procedures set forth in the voting instruction form) to give them or their designee a proxy to exercise the voting rights personally at the Meeting.

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Votes Required

        Assuming the presence of a quorum, the following vote is required for each proposal:

    The approval of Proposal 1 (proposal to amend the US Gold Articles of Incorporation to create a new class of US Gold stock comprised of one share of preferred stock designated as Series B Special Voting Preferred Stock, no par value) requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions and broker non-votes will not be treated as votes cast on this proposal and thus will have no effect on the outcome of this proposal.

    The approval of Proposal 2 (proposal to amend the US Gold Articles of Incorporation to increase the authorized shares of common stock of US Gold from 250,000,000 shares to 500,000,000 shares) requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions and broker non-votes will not be treated as votes cast on this proposal and thus will have no effect on the outcome of this proposal.

    The approval of Proposal 3 (proposal to issue exchangeable shares of Canadian Exchange Co. and shares of common stock of US Gold issuable upon exchange of such exchangeable shares and exercise of Minera Andes Options, in connection with the Arrangement) requires (i) that the total number of votes cast on the proposal represents at least a majority of the shares of US Gold common stock and the 2007 Exchangeable Shares, counted together as a single class, entitled to vote on the proposal, and (ii) the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions will be treated as votes cast on this proposal and thus will have the effect of a vote "AGAINST" this proposal. Broker non-votes will be counted as shares entitled to vote on the proposal but will not be treated as votes cast on this proposal and thus will have a negative impact on satisfying the requirement described in the preceding clause (i).

      Furthermore, pursuant to MI 61-101 approval of Proposal 3 also requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class, excluding shares of US Gold common stock and 2007 Exchangeable Shares held by persons whose votes may not be included in determining minority approval pursuant to MI 61-101. To the knowledge of US Gold, 28,553,360 shares are held by persons whose votes may not be included in determining the minority approval set out above, comprised of 28,477,527 shares held by Robert R. McEwen, Chairman and Chief Executive Officer of US Gold and Minera Andes, 16,833 shares held by Perry Ing, an officer of US Gold and Minera Andes, 15,000 shares held by Ian Ball, an officer of US Gold who holds common shares of Minera Andes, 42,000 shares held by Stefan Spears, an officer of US Gold who holds common shares of Minera Andes, and 2,000 shares held by Allan Marter, a director of Minera Andes.

    The approval of Proposal 4 (proposal to amend the US Gold Articles of Incorporation to change the name of US Gold to McEwen Mining Inc. after completion of the Arrangement) requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions and broker non-votes will not be treated as votes cast on this proposal and thus will have no effect on the outcome of this proposal.

    The approval of Proposal 5 (proposal to amend and restate the US Gold Equity Incentive Plan) requires (i) that the total number of votes cast on the proposal represents at least a majority of the shares of US Gold common stock and the 2007 Exchangeable Shares, counted together as a single class, entitled to vote on the proposal, and (ii) the affirmative vote of the majority of the

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      votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions will be treated as votes cast on this proposal and thus will have the effect of a vote "AGAINST" this proposal. Broker non-votes will be counted as shares entitled to vote on the proposal but will not be treated as votes cast on this proposal and thus will have a negative impact on satisfying the requirement described in the preceding clause (i).

    The approval of Proposal 6 (proposal to adjourn or postpone the Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Meeting to approve and adopt any of Proposals 1 through 5) requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions and broker non-votes will not be treated as votes cast on this proposal and thus will have no effect on the outcome of this proposal.


Recommendation of the Special Committee

        Having undertaken a thorough review of, and carefully considered, the Arrangement, as described in the section entitled "The Arrangement—Background to the Arrangement" beginning on page 62, including consulting with independent financial and legal advisors, the Special Committee unanimously concluded that the Arrangement is fair to US Gold, its shareholders and the holders of the 2007 Exchangeable Shares and in the best interests of US Gold and unanimously recommended that the Board approve the Arrangement.


Recommendation of the Board Regarding the Proposals

        The Board has approved the Arrangement and each of the proposals and recommends that US Gold shareholders and the holders of the 2007 Exchangeable Shares vote "FOR" Proposals 1 through 6. The failure to receive shareholder approval of any of the Acquisition Proposals would prevent US Gold from completing the Arrangement as currently contemplated.

        In adopting the Special Committee's recommendations and concluding that the Arrangement is substantively and procedurally fair to US Gold and its shareholders and that the Arrangement is in the best interests of US Gold, the Board considered and relied upon the same factors and considerations that the Special Committee relied upon, as described in the section entitled "The Arrangement—Reasons for the Arrangement" beginning on page 62, and adopted the Special Committee's analyses in their entirety.


Conditions to the Proposals

        If approved by the US Gold shareholders and the holders of the 2007 Exchangeable Shares, Proposals 1, 2, 5 and 6 shall be effective regardless of the outcome of the other proposals. Proposal 3 shall be effective only if the US Gold shareholders and the holders of the 2007 Exchangeable Shares also approve Proposals 1 and 2. Proposal 4 shall be effective only if the US Gold shareholders and the holders of the 2007 Exchangeable Shares also approve Proposals 1, 2 and 3 and the Arrangement is completed.


Vote Tabulation

        Votes cast in person or by proxy at the Meeting will be tabulated by the inspectors of election appointed by the Board for the Meeting.

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Quorum; Abstentions and Broker Non-Votes

        In order to carry on the business of the Meeting, we must have a quorum. Holders of one-third of our common stock issued, outstanding and entitled to vote on the record date, must be present at the Meeting, either in person or by proxy, to establish a quorum. For purposes of establishing a quorum at the Meeting, all issued and outstanding 2007 Exchangeable Shares that are not held by US Gold or any of its subsidiaries shall be treated as common stock of US Gold. Abstentions and broker non-votes will be counted as present for purposes of establishing a quorum.


Costs of Solicitation

        This solicitation is being made on behalf of US Gold by the Board, and US Gold will bear the cost of soliciting proxies for the Meeting. Proxies may be solicited by directors, officers or regular employees in person, by personal interview, telephone, electronic mail or otherwise. None of US Gold's directors, officers or employees will receive any additional compensation for soliciting proxies on behalf of the Board.

        US Gold has retained the Solicitor to assist in soliciting proxies for the Meeting and to serve as US Gold's information agent for the Meeting at an estimated fee of $[    •    ] plus reasonable out-of-pocket expenses. We may also make arrangements with brokerage firms and other custodians, nominees and fiduciaries for the forwarding of soliciting material to the beneficial owners of US Gold common stock and the 2007 Exchangeable Shares held of record by those owners. We will reimburse those brokers, custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses incurred in connection with that service.


Other Business

        We know of no business that will be presented for consideration at the Meeting other than that described in this proxy statement. As to other business, if any, that may properly come before the Meeting, it is intended that proxies solicited by the Board will be voted according to the best judgment of the proxy holder(s).


Presence of Accountants

        KPMG LLP, our principal accountants for the current fiscal year and for the year ended December 31, 2010, are expected to be present at the Meeting. KPMG LLP will have the opportunity to make a statement if it desires to do so and is expected to be available to respond to appropriate questions.

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PROPOSAL 1—AMENDMENT TO ARTICLES OF INCORPORATION TO CREATE AND
DESIGNATE A NEW CLASS OF PREFERRED STOCK

        In connection with Proposals 1 and 2, we will restate the US Gold Articles of Incorporation to consolidate such amendments. The following summary of the amendment described in this proposal is qualified in its entirety by the text of the Second Amended and Restated Articles of Incorporation, which is marked to show the proposed changes to the US Gold Articles of Incorporation and is attached as Annex A to this proxy statement.

        US Gold proposes to effect the Arrangement, whereby it will acquire all of the outstanding common shares of Minera Andes in exchange for exchangeable shares of Canadian Exchange Co. The exchangeable shares are intended to provide their holders with rights which are substantially equivalent to the economic and voting rights of holders of shares of US Gold's common stock. To accomplish this, US Gold will be required to authorize and issue to the exchange and voting trustee one share of preferred stock, designated Series B Special Voting Preferred Stock, which preferred stock will enable the exchange and voting trustee to fulfill its obligation to the holders of exchangeable shares of Canadian Exchange Co. to provide such voting rights. An amendment to the US Gold Articles of Incorporation will be required to authorize and issue this preferred stock.

        The amendment to the US Gold Articles of Incorporation, if approved, would authorize the creation of a new class of preferred stock, no par value, to be designated as Series B Special Voting Preferred Stock. If approved, a single share of Series B Special Voting Preferred Stock would be authorized and following completion of the Arrangement, outstanding. The share of Series B Special Voting Preferred Stock would be entitled to a number of votes with respect to any matter properly submitted to a vote of the holders of US Gold common stock equal to the number of outstanding exchangeable shares of Canadian Exchange Co. (other than those owned by US Gold or its subsidiaries) at the time of such vote, and except as otherwise required by law, the holders of US Gold's common stock, the holders of the 2007 Exchangeable Shares, and the holders of the Series B Special Voting Preferred Stock will vote together as a single class on all matters properly submitted to a vote of the holders of US Gold common stock, including the election of directors. In the event of any liquidation, dissolution or winding up of US Gold, the holder of the share of Series B Special Voting Preferred Stock will not be entitled to receive any assets of US Gold available for distribution to US Gold's shareholders. The share of Series B Special Voting Preferred Stock is not redeemable. The holder of the share of Series B Special Voting Preferred Stock will not be entitled to receive dividends. However, holders of exchangeable shares will be afforded substantially similar rights as holders of US Gold common stock in connection with any liquidation, dissolution or winding up of US Gold, and in the event that dividends are declared and paid with respect to shares of US Gold common stock. At such time as the Series B Special Voting Preferred Stock has no votes attached to it because there are no exchangeable shares of Canadian Exchange Co. outstanding not owned by US Gold or its subsidiaries, and there are no shares of stock, debt, options or other agreements of Canadian Exchange Co. that could give rise to the issuance of exchangeable shares of Canadian Exchange Co. to any person other than US Gold or its subsidiaries, the share of Series B Special Voting Preferred Stock will be cancelled. For additional information concerning the terms of the exchangeable shares, see "The Structure of the Arrangement—Description of Exchangeable Shares" beginning on page 102.

        If this proposal does not receive shareholder approval, US Gold would be prevented from completing the Arrangement as currently contemplated. Assuming the presence of a quorum, the approval of the proposal requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions and broker non-votes will not be treated as votes cast on this proposal and thus will have no effect on the outcome of this proposal.

The Board recommends that US Gold shareholders and
the holders of the 2007 Exchangeable Shares vote "FOR" Proposal 1.

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PROPOSAL 2—AMENDMENT TO ARTICLES OF INCORPORATION TO INCREASE THE
AUTHORIZED SHARES OF COMMON STOCK

        In connection with Proposals 1 and 2, we will restate the US Gold Articles of Incorporation to consolidate such amendments. The following summary of the amendment described in this proposal is qualified in its entirety by the text of the Second Amended and Restated Articles of Incorporation, which is marked to show the proposed changes to the US Gold Articles of Incorporation and is attached as Annex A to this proxy statement.

        US Gold proposes to effect the Arrangement, whereby it will acquire all of the outstanding common shares of Minera Andes in exchange for exchangeable shares of Canadian Exchange Co. As of October 4, 2011, there were a total of 136,473,613 shares of common stock of US Gold outstanding, 4,264,260 additional shares of common stock of US Gold issuable upon exercise of outstanding options, 3,279,106 shares of common stock of US Gold issuable upon exchange of issued and outstanding 2007 Exchangeable Shares, 1,362,638 shares of US Gold common stock reserved for issuance pursuant to the US Gold Equity Incentive Plan, and 124,500 shares of US Gold common stock to be issued pursuant to a prior purchase agreement. In connection with the Arrangement, US Gold estimates that Canadian Exchange Co. will need to issue approximately 127,326,984 exchangeable shares to acquire all of the issued and outstanding capital stock of Minera Andes, which exchangeable shares will be exchangeable for the same number of shares of common stock of US Gold and all outstanding Minera Andes Options will be exercisable to acquire a total of approximately 1,906,650 shares of common stock of US Gold. Upon completion of the Arrangement, there will be a total of 273,375,113 shares of common stock of US Gold outstanding or issuable pursuant to a prior purchase agreement or upon exercise or exchange of outstanding options, exchangeable shares and 2007 Exchangeable Shares and an additional 1,362,638 shares reserved for issuance under the US Gold Equity Incentive Plan as amended, as described in Proposal 5. However, the US Gold Articles of Incorporation authorize the issuance of only 250,000,000 shares of common stock and therefore US Gold must increase to number of authorized shares of common stock to complete the Arrangement. Therefore, US Gold proposes to amend the US Gold Articles of Incorporation to increase the number of authorized shares of its common stock from 250,000,000 shares to 500,000,000 shares to (i) ensure that US Gold has enough authorized common stock to issue upon the exchange of the exchangeable shares of Canadian Exchange Co. for shares of common stock of US Gold and exercise of Minera Andes Options, and (ii) provide for approximately 226,749,387 shares of authorized but unissued common stock, including 5,862,638 shares reserved for issuance under the Amended and Restated US Gold Equity Incentive Plan if Proposal 5 is approved, that the Board may issue in the future in its discretion, subject to any shareholder approval required by law. An amendment to the US Gold Articles of Incorporation will be required increase the authorized shares of common stock of US Gold. If this proposal does not receive shareholder approval, US Gold would be prevented from completing the Arrangement as currently contemplated.

        Assuming the presence of a quorum, the approval of this proposal requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions and broker non-votes will not be treated as votes cast on this proposal and thus will have no effect on the outcome of this proposal.

The Board recommends that US Gold shareholders and
the holders of the 2007 Exchangeable Shares vote "FOR" Proposal 2.

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PROPOSAL 3—ISSUANCE OF STOCK IN CONNECTION WITH THE ACQUISITION OF
MINERA ANDES

        We currently estimate that, in connection with the Arrangement, an aggregate of up to approximately 127,326,984 exchangeable shares will be issued by Canadian Exchange Co. and the same number of shares of US Gold common stock will be reserved for issuance in connection with the exchange of exchangeable shares of Canadian Exchange Co. plus an additional 1,906,650 shares of US Gold common stock will be reserved for issuance upon exercise of Minera Andes Options. US Gold common stock is traded on the TSX and on the NYSE. Because the shares of Canadian Exchange Co. that we expect to issue in connection with the Arrangement are exchangeable, upon the terms and conditions described herein, into approximately 127,326,984 shares of US Gold common stock, which represents more than 20% of the shares and voting power of US Gold currently issued and outstanding, Section 312.03 of the NYSE Listed Company Manual requires that holders of US Gold common stock approve the Stock Issuance. In addition, NYSE listing standards require shareholder approval of the Stock Issuance because Canadian Exchange Co., in connection with the Arrangement, will issue a number of exchangeable shares that are exchangeable into more than 1% of the currently issued and outstanding shares of common stock of US Gold to Robert R. McEwen, the Chairman, the Chief Executive Officer and a substantial security holder of US Gold.

        The Board has approved the acquisition of all of the outstanding common shares of Minera Andes pursuant to the Arrangement, the issuance, in connection with the Arrangement, of exchangeable shares of Canadian Exchange Co., which exchangeable shares are immediately exchangeable at the holders' option on a one-for-one basis into shares of common stock of US Gold and the issuance of the shares of US Gold common stock issuable upon exchange of the exchangeable shares or exercise of Minera Andes Options. Additional information regarding the Arrangement and related matters is included in this proxy statement under "The Arrangement—Background of the Arrangement" beginning on page 62, "The Arrangement—Reasons for the Arrangement" beginning on page 62, "The Arrangement—Formal Valuation and Fairness Opinion of Special Committee's Financial Advisor" beginning on page 73, "The Arrangement" beginning on page 62, "The Arrangement Agreement" beginning on page 85 and "Structure of the Arrangement" beginning on page 102 and additional information regarding Minera Andes is included in this proxy statement under "Information About Minera Andes" beginning on page 113.

        Assuming the presence of a quorum, the approval of this proposal requires (i) that the total number of votes cast on the proposal represents at least a majority of the shares of US Gold common stock and the 2007 Exchangeable Shares, counted together as a single class, entitled to vote on the proposal, and (ii) the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions will be treated as votes cast on this proposal and thus will have the effect of a vote "AGAINST" this proposal. Broker non-votes will be counted as shares entitled to vote on the proposal but will not be treated as votes cast on this proposal and thus will have a negative impact on satisfying the requirement described in the preceding clause (i).

        Furthermore, pursuant to MI 61-101 approval of this proposal also requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class, excluding shares of US Gold common stock and 2007 Exchangeable Shares held by persons whose votes may not be included in determining minority approval pursuant to MI 61-101. See "The Meeting—Votes Required" beginning on page 42.

The Board recommends that US Gold shareholders and
the holders of the 2007 Exchangeable Shares vote "FOR" Proposal 3.

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PROPOSAL 4—AMENDMENT TO US GOLD ARTICLES OF INCORPORATION TO CHANGE THE
NAME OF US GOLD TO MCEWEN MINING INC.

        The following summary of the amendment described in this proposal is qualified in its entirety by the text of the First Amendment to the Second Amended and Restated Articles of Incorporation, which is attached as Annex B to this proxy statement.

        US Gold proposes to change its name to McEwen Mining Inc. if the Arrangement is completed. An amendment to US Gold's Articles of Incorporation will be required to effect this name change. The name change will be effected only if the Arrangement is completed. Therefore, this proposal will only be effective if the US Gold shareholders and the holders of the 2007 Exchangeable Shares, voting together as a single class, approve each of the Arrangement Proposals. The amendment to the Second Amended and Restated Articles of Incorporation, if approved, will be filed with the Secretary of State of the State of Colorado after completion of the Arrangement. In connection with the name change of US Gold to McEwen Mining Inc., the trading symbol for US Gold common stock on NYSE and TSX will be changed from "UXG" to "MUX".

        Assuming the presence of a quorum, the approval of this proposal requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions and broker non-votes will not be treated as votes cast on this proposal and thus will have no effect on the outcome of this proposal.

The Board recommends that US Gold shareholders and
the holders of the 2007 Exchangeable Shares vote "FOR" Proposal 4.

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PROPOSAL 5—AMENDMENT AND RESTATEMENT OF US GOLD EQUITY INCENTIVE PLAN

        We are asking our stockholders to approve amendments to US Gold's Equity Incentive Plan (the "US Gold Plan") to increase the number of shares of common stock reserved for issuance thereunder from 9,000,000 to 13,500,000 shares, as well as the other changes outlined below. Below is a summary of the principal provisions of the US Gold Plan, assuming approval of the above amendment, which summary is qualified in its entirety by reference to the full text of the US Gold Plan, as amended, which is attached as Annex H to this proxy statement. We refer to the amended and restated US Gold Plan as the "Restated Plan" below.


Background

        Effective March 17, 1989, the Board adopted the U.S. Gold Corporation Non-Qualified Stock Option and Stock Grant Plan, or the "US Gold Plan." On October 3, 2005, the Board amended the US Gold Plan to provide for an increase in the number of authorized shares from 3,500,000 to 5,000,000. Our shareholders approved this amendment on November 14, 2005. On October 19, 2006, the Board approved the amendment and restatement of the US Gold Plan to provide for the grant of incentive options and restricted stock; increase the number of shares of US Gold common stock reserved for issuance under the US Gold Plan by 4,000,000, for a total of 9,000,000 shares; limit stock option grants in a single year to an individual to no more than 1 million shares as well as other changes. Our shareholders approved the amendment and restatement on November 30, 2006.

        On October 4, 2011, the Board approved the Restated Plan to:

    (1)
    increase the number of shares reserved for issuance under the Restated Plan to 13.5 million;

    (2)
    prohibit option repricing without shareholder approval;

    (3)
    provide that options will count against the authorized share limit differently than restricted stock awards and other full value awards (a so-called "fungible share pool");

    (4)
    prohibit net share counting of awards; and

    (5)
    provide for termination of the Restated Plan on October 4, 2021.

        The Board of Directors believes that granting stock options, restricted stock and stock awards to employees, directors, consultants and advisors is necessary to attract and retain the services of qualified people who contribute and will contribute to US Gold's success. US Gold's compensation program is intended, among other things, to align the interests of our directors, employees and consultants with the interests of our shareholders, and the compensation program is designed to reward performance that supports US Gold's principle of building long-term shareholder value. As part of this compensation program, we currently award stock options and stock awards under the US Gold Plan. As of October 4, 2011, there were 1,362,638 shares available for issue under the US Gold Plan. Accordingly, unless our shareholders approve the increase in shares reserved for issuance under the Restated Plan, we will be limited in our ability to make equity awards to our employees, directors, consultants and advisors.

        Pursuant to the rules of NYSE, Shareholder approval is required for the amendments.

The Board has recommended that US Gold shareholders and the holders of the 2007 Exchangeable Shares vote "FOR" approval of the Restated Plan.

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Summary of the Restated Plan

Administration of the Restated Plan

        The Board, or a committee appointed by the Board, administers the Restated Plan. In this discussion, the administrator of the Restated Plan is referred to as the committee.

        The committee has the power to select the participants to be granted awards, determines the time or times when awards will be made, and determines the form of an award, the number of shares of our common stock subject to the award, and all the terms, conditions (including performance requirements), restrictions and/or limitations, if any, of awards, including the time and conditions of exercise or vesting. Incentive options may be granted only to employees. Non-qualified options, restricted stock, and other stock grants may be made to employees, directors, consultants and advisors.

        The Restated Plan provides that the committee may delegate authority to specified officers to grant options and other awards, provided that no grants of options or other awards may be made by such specified officers to any employee, consultant or advisor who is covered by Section 16(b) of the Exchange Act or whose compensation is, or may become, subject to the $1 million limit on deductible compensation under Section 162(m) of the Code. At this time, the committee has not made such a delegation.

Shares Subject to the Plan

        There are currently 9,000,000 shares of common stock reserved for the grant of awards under the US Gold Equity Plan. If the proposal is approved, 4,500,000 additional shares of common stock will be reserved for grant under the Restated Plan. After considering exercises and forfeitures under the US Gold Equity Plan, as of October 4, 2011, there were 1,362,638 million shares of common stock available for grant under the US Gold Equity Plan. If the proposal is approved, we will have 5.86 million shares available for grants under the Restated Plan.

Share Usage

        Shares of our common stock that are subject to awards will be counted against the Restated Plan share limit as one share for every one share subject to the award. Any shares of stock that are subject to awards other than options shall be counted against the Restated Plan share limit as three shares for every one share subject to the award. The number of shares available for issuance under the Restated Plan shall not be increased by the number of shares (1) tendered or withheld or subject to an award surrendered in connection with the purchase of shares upon exercise of an option, (2) deducted or delivered from payment of an award in connection with US Gold's tax withholding obligations or (3) purchased by US Gold with proceeds from option exercises.

Adjustment of Shares

        The number of shares available under and subject to the Restated Plan, and each share reserved for issuance under the Restated Plan, are subject to adjustment on account of stock splits, stock dividends, recapitalizations and other dilutive changes in our common stock. Any shares of our common stock related to awards that terminate by expiration, forfeiture, cancellation or otherwise will be available again for grant under the Restated Plan.

Exercise of Options

        The committee determines the exercise price for each option, but no option will be granted at an exercise price that is less than the fair market value of our common stock on the date of grant (at least 110% of the fair market value of our common stock on the date of grant in the case of an incentive option granted to an individual who owns stock of US Gold having more than 10% of the voting

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power). An option holder may exercise an option by written notice and payment of the exercise price in cash or by check, bank draft or money order payable to the order of us, or a combination of the foregoing. In addition, an option may be exercised by a broker-dealer acting on behalf of the participant if the broker-dealer has received from the participant a notice of exercise and adequate provision has been made with respect to the payment of any withholding taxes due upon exercise. If the exercise price of the shares being purchased is $2,000 or less, the exercise price must be paid in cash or by check, bank draft or money order payable to the order of us.

Option Term

        The committee determines the period and the conditions of exercisability, the minimum periods during which participants must be employed by us or must hold options before they may be exercised, the minimum periods during which shares acquired upon exercise must be held before sale, conditions under which the options or shares may be subject to forfeiture, the frequency of exercise or the minimum or maximum number of shares that may be acquired at any one time. Incentive options must expire no later than 10 years from the date of grant (five years in the case of an incentive option granted to an individual who owns stock of US Gold having more than 10% of the voting power). If a participant's employment terminates for any reason other than cause or death, the participant will be entitled to purchase all or any part of the shares subject to any vested option for a period of up to three months from the date of termination (not longer than one year in the case of death). If the participant's employment terminates for cause, as determined by us, the unexercised option will be forfeited and expire.

Restricted Stock

        The committee may grant a participant a number of shares of restricted stock as determined by the committee in its sole discretion. Grants of restricted stock may be subject to such restrictions, including for example, continuous employment with us for a stated period of time or the attainment of performance goals and objectives, as determined by the committee in its sole discretion. The restrictions may vary among awards and participants. If a participant dies or becomes disabled or retires pursuant to our retirement policy, the restricted stock will become fully vested as to a pro rata portion of each award based on the ratio of the number of months of employment or service completed at termination of employment or service from the date of the award to the total number of months of employment or service required for each award to become fully vested. The remaining portion of the restricted stock will be forfeited. If a participant terminates employment for any other reason, all unvested shares of restricted stock will be forfeited.

Stock Grants

        The committee may grant shares of our common stock to participants. The committee determines the number of shares of our common stock to be granted, the vesting conditions and other restrictions, if any, the time and manner of payment, and any other terms and conditions of the stock grants. The committee may also, in its sole discretion, accelerate vesting and waive other restrictions and conditions under such circumstances as it deems appropriate.

Nontransferability

        Except as may otherwise be provided by the committee at the time of a grant, options and restricted stock awards are not transferable except by will or pursuant to the laws of descent and distribution.

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Amendment and Termination

        The Board may alter, suspend or terminate the Restated Plan at any time and may, from time to time, amend the Restated Plan in any manner, but may not without shareholder approval adopt any amendment that would increase the aggregate number of shares of common stock available under the Restated Plan or modify any provision of the Restated Plan that would materially increase the benefit or rights of any participant in the Restated Plan. In addition, no amendment may be made to the no-repricing provisions described below without the approval of US Gold's shareholders. The rules of the NYSE, on which our common stock is listed, require shareholder approval of material amendments to the Restated Plan. Unless terminated sooner, the Restated Plan will terminate on October 4, 2021.

No-Repricing

        Except in connection with certain corporate transactions, no amendment or modification may be made to an outstanding option, including by replacement with or substitution of another award type, that would be treated as a repricing under applicable stock exchange rules or would replace options with cash, in each case without the approval of the shareholders (although appropriate adjustments may be made to outstanding options to achieve compliance with applicable law, including the Code).

Change of Control

        Upon the occurrence of a corporate transaction involving a change of control of US Gold, as defined in the Restated Plan, the committee may take any one or more of the following actions with respect to outstanding awards under the Restated Plan:

    provide that any or all options shall become fully exercisable regardless of whether all conditions of exercise relating to length of service, attainment of financial performance goals or otherwise have been satisfied;

    provide that any or all restrictions with respect to restricted stock and other awards shall lapse;

    provide for the assumption of the outstanding options by the successor company or the substitution of new options for the outstanding options on terms comparable to the outstanding options; or

    make any other provision for outstanding awards as the committee deems appropriate and consistent with applicable law.

        The committee may also provide that any awards that are outstanding at the time the corporate transaction is closed shall expire at the time of the closing. The committee need not take the same action with respect to all outstanding awards or to all outstanding awards of the same type.

Limitations on Grants

        The maximum number of shares of common stock subject to options that can be awarded under the Restated Plan to any person is 500,000 per calendar year. The preceding limitation is subject to adjustment for stock dividends and similar events as provided in the Restated Plan.

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Federal Income Tax Consequences of the Grant and Exercise of Options

        Certain of the federal income tax consequences applicable to the grant and exercise of non-qualified options and incentive options are as follows:

Non-Qualified Options

        There are no income tax consequences to the participant or to us when a non-qualified option is granted. When a non-qualified stock option is exercised, in general, the participant recognizes compensation, subject to wage withholding and income tax, equal to the excess of the fair market value of the common stock on the date of exercise over the exercise price. We are generally entitled to a deduction equal to the compensation recognized by the participant, assuming that the compensation satisfies the ordinary, necessary and reasonable compensation requirements for deductibility and that the deduction is not limited by Section 162(m) of the Code.

Incentive Options

        When an incentive option is granted, there are no income tax consequences for the participant or us. When an incentive option is exercised, the participant does not recognize income and we do not receive a deduction. The participant, however, must treat the excess of the fair market value of our common stock on the date of exercise over the exercise price as an item of adjustment for purposes of the alternative minimum tax. If the participant makes a "disqualifying disposition" of the common stock (described below) in the same taxable year the incentive option was exercised, there are no alternative minimum tax consequences.

        If the participant disposes of our common stock after the participant has held it for at least two years after the incentive option was granted and at least one year after the incentive option was exercised, the amount the participant receives upon the disposition over the exercise price is treated as capital gain. We are not entitled to a deduction for this amount. If the participant makes a "disqualifying disposition" of common stock by disposing of common stock before it has been held for at least two years after the date the incentive option was granted and at least one year after the date the incentive option was exercised, the participant recognizes compensation income equal to the excess of:

    the fair market value of common stock on the date the incentive option was exercised or, if less, the amount received on the disposition, over

    the exercise price.

        We are not required to withhold income or other taxes in connection with a "disqualifying disposition." We are generally entitled to a deduction equal to the compensation recognized by the participant, assuming that the compensation satisfies the ordinary, necessary and reasonable compensation requirements for deductibility and that the deduction is not limited by Section 162(m) of the Code.

Code Section 409A

        Section 409A of the Code provides that all amounts deferred under a nonqualified deferred compensation plan are currently includible in gross income to the extent they are not subject to a substantial risk of forfeiture and have not been taxed previously unless the plan satisfies both the plan document and operational requirements specified in Section 409A of the Code. If the deferred compensation plan fails to satisfy the requirements of Section 409A, all amounts deferred for the year of the failure and all preceding years (to the extent they are not subject to a substantial risk of forfeiture) are included in the gross income of the participant(s) affected by the failure. The amount included in gross income is also subject to an additional tax equal to 20% of that amount and to

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interest. Incentive options are not subject to Section 409A. We expect to administer the Restated Plan with the intention that non-qualified options will qualify for an exemption from Section 409A of the Code.

Code Section 162(m)

        Under Section 162(m) of the Code, we may be limited as to federal income tax deductions to the extent that total annual compensation in excess of $1 million is paid to our chief executive officer or any one of the three highest paid executive officers (other than the chief financial officer) who were employed by us on the last day of the taxable year. However, certain "performance-based compensation," the material terms of which are disclosed to and approved by our shareholders, is not subject to this limitation on deductibility. It is our intention that compensation resulting from options granted under the plan would be deductible without regard to the limitations otherwise imposed by Section 162(m) of the Code.


New Plan Benefits

        All future awards under the Restated Plan are within the discretion of the Board or the Compensation Committee. The number, type and benefits of awards that will be granted under the Restated Plan in the future are not determinable.


Securities Authorized for Issuance Under Equity Compensation Plans

        Set out below is information as of December 31, 2010 with respect to compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance. This information relates to the US Gold Equity Plan.


Equity Compensation Plan Information

Plan Category
  Number of securities
to be issued upon
exercise of
outstanding options
  Weighted-average
exercise price per
share of outstanding
options
  Number of securities
remaining available for
future issuance under
equity
compensation plans
 

Equity compensation plans approved by security holders

    3,086,001   $ 2.02     2,309,638  

Equity compensation plans not approved by security holders

    464,668 (1) $ 5.01      
                 

TOTAL

    3,550,669           2,309,638  

(1)
In connection with the acquisition of White Knight Resources Ltd., Nevada Pacific Gold Ltd. and Tone Resources Limited (the "Acquired Companies") in 2007, we assumed stock options covering 812,918 shares of our common stock. Following the exercise of 170,125 options during 2007, expiration of 34,500 options during 2008, and exercise of 143,625 options during 2010, a total of 464,668 options remained exercisable at December 31, 2010.

        The options that we assumed in connection with the acquisition of the Acquired Companies were not approved by our security holders. These options are exercisable at prices ranging from Cdn$4.30 to Cdn$6.70 and expire on dates from 2014 to 2017. The weighted-average exercise price of these options reflects the original exercise price of the options, modified to reflect the exchange ratios associated with the acquisitions. We are not authorized to issue any additional options under any of these plans.

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Vote Required

        Assuming the presence of a quorum, the approval of this proposal requires (i) that the total number of votes cast on the proposal represents at least a majority of the shares of US Gold common stock and the 2007 Exchangeable Shares, counted together as a single class, entitled to vote on the proposal, and (ii) the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions will be treated as votes cast on this proposal and thus will have the effect of a vote "AGAINST" this proposal. Broker non-votes will be counted as shares entitled to vote on the proposal but will not be treated as votes cast on this proposal and thus will have a negative impact on satisfying the requirement described in the preceding clause (i).

The Board recommends that US Gold shareholders and
the holders of the 2007 Exchangeable Shares vote "FOR" Proposal 5.

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PROPOSAL 6—ADJOURNMENT OR POSTPONEMENT OF THE MEETING TO SOLICIT ADDITIONAL PROXIES

        Any adjournment or postponement may be made without advance notice by an announcement made at the Meeting by the chairman of the Meeting. If persons named as proxies by you are asked to vote for one or more adjournments or postponements of the Meeting for matters incidental to the conduct of the Meeting, such persons will have the authority to vote in their discretion on such incidental matters. However, if persons named as proxies by you are asked to vote for one or more adjournments or postponements of the Meeting to solicit additional proxies if there are insufficient votes at the time of the Meeting to adopt Proposals 1 through 5, such persons will only have the authority to vote on such matter as instructed by you or your proxy, or, if no instructions are provided on your signed proxy card, in favor of such adjournment or postponement. Any adjournment or postponement of the Meeting for the purpose of soliciting additional proxies will allow US Gold's shareholders and the holders of the 2007 Exchangeable Shares who have already sent in their proxies to revoke them at any time prior to their use.

        Assuming the presence of a quorum, the approval of this proposal requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class. Abstentions and broker non-votes will not be treated as votes cast on this proposal and thus will have no effect on the outcome of this proposal.

The Board recommends that US Gold shareholders and
the holders of the 2007 Exchangeable Shares vote "FOR" Proposal 6.

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INFORMATION ABOUT THE COMPANIES

About US Gold

        US Gold is a precious metals exploration stage company engaged in the business of acquiring, exploring, and developing mineral properties in the U.S. and Mexico. US Gold was organized under the laws of the State of Colorado on July 24, 1979 under the name Silver State Mining Corporation. On June 21, 1988, US Gold changed its name to U.S. Gold Corporation and on March 16, 2007, US Gold changed its name to US Gold Corporation. US Gold presently holds an interest in numerous properties in Nevada and Mexico, jurisdictions that have been historically favorable to mining. US Gold is currently in the exploration stage and has not generated revenue from operations since 1990.

        US Gold holds interests in approximately 1,525 square miles of mineral concessions in west central Mexico. Its primary property in Mexico is the El Gallo Complex, located in Sinaloa state on the Sierra Madre Trend, a geological area of significant gold and silver mineralization. In 2010, US Gold completed two estimates of mineralized material on the El Gallo Complex and in February 2011, US Gold completed a Preliminary Economic Assessment. US Gold intends to complete a feasibility study at the El Gallo Complex by mid 2012 and on August 31, 2011 announced the commencement of work towards the first phase of production on the property. Over the next two years, US Gold estimates it will spend approximately $150 million on development and exploration at the El Gallo Complex, which will mainly consist of infrastructure related to production and exploration drilling.

        US Gold holds interests in approximately 254 square miles in Nevada, United States. The majority of US Gold's Nevada properties, including its interests in the Tonkin Complex and Gold Bar Project, are located along the Cortez Trend, in north central Nevada. US Gold also owns property, including the Limo Project, on the southern end of the Carlin Trend. Both the Cortez Trend and Carlin Trend are geological areas of significant gold discoveries. In 2006, US Gold commenced comprehensive exploration of its Tonkin property in an effort to identify additional mineralized material. From 2008 through 2009, US Gold drilled various targets on US Gold's Gold Bar and Limo Projects, as well as expanded the quantity of estimated mineralized material at the Gold Bar Project in updated technical reports. In 2010, US Gold completed a Preliminary Economic Assessment for the Gold Bar Project and expects to complete a pre-feasibility study on the property during the last quarter of 2011. Over the next two years, US Gold estimates it will spend approximately $20 million on exploration on the Gold Bar Project, Limo Project and at other targets in Nevada.

        In July 2011, US Gold and Select Resources Corporation, Inc. ("Select") signed a four-year Exploration Lease and Purchase Option Definitive Agreement (the "Definitive Agreement") with respect to the Richardson Mineral Project ("Richardson") in the Tintina Gold Belt of Alaska. Under the terms of the Definitive Agreement, US Gold will acquire an exploration lease for Richardson, and an exclusive option to purchase a 60% interest in the project and enter into a joint venture with Select. US Gold's option vests upon completion of $5 million in exploration expenditures and 30,000 feet of core drilling during the term of the Definitive Agreement. The Richardson project is located 70 miles (115 kilometers) southeast of Fairbanks, Alaska, and covers an area of approximately 52 square miles (136 square km). Historically the Richardson District has been a producer of placer gold (est. since 1905) with some small lode gold production. Virtually all of the lode exploration has been conducted by or on behalf of Select between 1987 and 2005. US Gold's focus is on discovering a new major intrusive-related gold system similar to that at the Pogo Mine owned by Sumitomo, which is approximately 45 miles (75 km) northeast of Richardson. It is believed that the Richardson project hosts at least three distinctly different types of intrusive-related gold systems. US Gold is currently conducting field sampling and reconnaissance exploration activities as well as airborne geophysics. Core drilling is planned later in the current 2011 drill season.

        US Gold's common stock is listed on the TSX and the NYSE under the symbol "UXG." If the Arrangement is completed, US Gold will change its name to McEwen Mining Inc. and the trading

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symbol of US Gold common stock on the NYSE and the TSX will be changed to "MUX." As of market close on the record date, [    •    ], 2011, the closing price of US Gold common stock on the NYSE was $[    •    ] and there was a total of [    •    ] shares of US Gold common stock outstanding.

        US Gold's principal executive offices are located at Suite 4750, Brookfield Place, Bay Wellington Tower, 181 Bay Street, P.O. Box 792, Toronto, Ontario, Canada M5J 2T3 and its telephone number is (866) 441-0690. US Gold's website is www.usgold.com. Information contained on the website is not incorporated by reference into this proxy statement and you should not consider information contained on the website as part of this proxy statement. US Gold is subject to the reporting requirements of the Exchange Act and, as such, it files or furnishes reports and other information with the SEC from time to time. More information about US Gold is available and incorporated by reference into this proxy statement as described in the sections below entitled "Where You Can Find Additional Information" and "Incorporation of Certain Documents by Reference" beginning on page 192.


About Minera Andes

        Minera Andes is an exploration company exploring for gold, silver and copper in Argentina with three significant assets: (i) a 49% interest in MSC, owner of the San José Mine; (ii) a 100% interest in the Los Azules copper deposit; and (iii) a portfolio of exploration properties in Deseado Massif region of Southern Argentina. The San José Mine is an operating silver-gold mine located in Santa Cruz Province, Argentina. The San José Mine is a joint venture pursuant to which title to the assets is held by MSC, an Argentinean company owned 49% by Minera Andes and 51% by Hochschild. In the fiscal year ended December 31, 2010, the San José Mine produced 84,303 ounces of gold, at average grade per tonne of ore processed of 6.14 grams of gold per tonne, and 5,323,842 ounces silver, at an average grade per tonne of ore processed of 397 grams of silver per tonne.

        Minera Andes was formed upon the amalgamation of Scotia Prime Minerals, Incorporated and Minera Andes Inc. pursuant to the ABCA on November 6, 1995. The head office of Minera Andes is located at Suite 4750, Brookfield Place, Bay Wellington Tower, 181 Bay Street, P.O. Box 792, Toronto, Ontario, Canada M5J 2T3, and its principal place of business is located at Abraham Pizzi 5045, Barrio San Roberto—Dep. Rivadavia (5400) San Juan, Argentina. Minera Andes' registered and records office and address for service is 3700-205 5 Avenue S.W., Calgary, Alberta, T2P 2V7, Canada. Minera Andes' website is www.minandes.com. Information contained on the website is not incorporated by reference into this proxy statement and you should not consider information contained on the website as part of this proxy statement. Minera Andes is a reporting issuer in each of the provinces of Canada other than Quebec and files its continuous disclosure documents with the securities regulatory authorities in those provinces via SEDAR. Such documents are available without charge at www.sedar.com. In addition, Minera Andes is a foreign private issuer in the U.S. and therefore files various reports with the SEC. Such reports are available at the SEC's Public Reference Room and online at http://www.sec.gov. See the section below entitled "Where You Can Find Additional Information" beginning on page 192. The documents that Minera Andes files on SEDAR and with the SEC are not incorporated by reference into this proxy statement and you should not consider such information as part of this proxy statement. Minera Andes' common shares are listed on the TSX under the symbol "MAI" and quoted on the OTCBB under the symbol "MNEAF." As of market close on the record date, [    •    ], 2011, the closing price of Minera Andes common stock on the TSX was Cdn$[    •    ] and there was a total of [    •    ] Minera Andes shares outstanding.

        Additional information regarding Minera Andes is included under "Information About Minera Andes" in this proxy statement beginning on page 113.

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About Canadian Exchange Co.

        US Gold's indirect wholly-owned subsidiary, McEwen Mining—Minera Andes Acquisition Corp., or Canadian Exchange Co., is a corporation US Gold incorporated under the ABCA solely for the purpose of the Arrangement. Canadian Exchange Co. has no significant assets and has not engaged in any business operations or other activities to date and will not engage in any business operations or activities. In connection with the Arrangement, among other things, Canadian Exchange Co. will obtain the benefit of a support agreement with US Gold, to the extent the Arrangement is completed, and will acquire common shares of Minera Andes.

        Canadian Exchange Co. is authorized to issue the exchangeable shares, as described in the sections entitled "Structure of the Arrangement—Background and Reason for the Issuance of Exchangeable Shares" and "Structure of the Arrangement—Description of Exchangeable Shares" beginning on page 102. In connection with the Arrangement, Canadian Exchange Co. will issue 0.45 exchangeable shares in exchange for each issued and outstanding common share of Minera Andes. The exchangeable shares are exchangeable into shares of US Gold's common stock on a one-for-one basis at any time at the option of the holder of exchangeable shares and will have substantially the same economic, voting and other rights as US Gold's common stock and will be permitted to vote along with the holders of US Gold common stock, counted as a single class with US Gold common stock and the 2007 Exchangeable Shares. The exchangeable shares will be listed on the TSX, and the listing is a condition to the completion of the Arrangement. The exchangeable shares will not be listed on a securities exchange in the United States. The trading symbol for the exchangeable shares of Canadian Exchange Co. on the TSX will be "MAQ".

        Canadian Exchange Co.'s principal executive offices are located at Suite 4750, Brookfield Place, Bay Wellington Tower, 181 Bay Street, P.O. Box 792, Toronto, Ontario, Canada M5J 2T3 and its telephone number is (866) 441-0690.


About Callco

        US Gold's direct wholly-owned subsidiary, McEwen Mining (Alberta) ULC, or Callco, is a corporation incorporated under the ABCA solely for the purpose of the Arrangement. Callco has no significant assets and has not engaged in any business operations or other activities to date and will not engage in any business operations or activities. In connection with the Arrangement, among other things, Callco will obtain the benefit of a support agreement with US Gold and will hold certain call rights related to the exchangeable shares and hold the voting shares of Canadian Exchange Co.

        Callco will hold certain call rights related to the exchangeable shares of Canadian Exchange Co., as described in the section entitled "Structure of the Arrangement—Description of the Exchangeable Shares" beginning on page 102.

        Callco's principal executive offices are located at Suite 4750, Brookfield Place, Bay Wellington Tower, 181 Bay Street, P.O. Box 792, Toronto, Ontario, Canada M5J 2T3 and its telephone number is (866) 441-0690.

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COMPARATIVE PER SHARE INFORMATION

        The following table summarizes unaudited per share information for:

    US Gold and Minera Andes separately on a historical basis; and

    US Gold and Minera Andes on an equivalent unaudited pro forma combined condensed basis.

        The pro forma information presented below is presented in accordance with US GAAP and in U.S. dollars. The pro forma information is presented for illustrative purposes only and is not necessarily indicative of the actual operating results or financial position that would have resulted if US Gold and Minera Andes had combined at the beginning of the period presented, nor is it necessarily indicative of any future operating results or financial position of US Gold if combined with Minera Andes. For additional information concerning the basis of presentation of the pro forma combined consolidated financial information, see the notes to the unaudited pro forma combined consolidated financial statements set forth in Annex C to this proxy statement.

        The historical book value per share is computed by dividing total shareholders' equity by the number of shares outstanding at the end of the period. The unaudited pro forma combined income per share is computed by dividing the unaudited pro forma combined income from continuing operations available to holders of common stock by the unaudited pro forma combined weighted average number of shares outstanding. The unaudited pro forma combined book value per share is computed by dividing total unaudited pro forma combined shareholders' equity by the unaudited pro forma combined number of common shares outstanding at the end of the period. The historical per share information of US Gold and Minera Andes was derived from US Gold's and Minera Andes' respective historical annual financial statements.

        For information on applicable currency exchange rates, see "Currency Exchange Rates" beginning on page 172.

        Data for Canadian Exchange Co. has not been included because it has not conducted business during any of the periods discussed below.

 
  Six Months Ended   Year Ended  
 
  June 30, 2011
  December 31, 2010
 

US Gold—Historical

    US GAAP     US GAAP  

Historical per common share:

             
 

Loss per basic and diluted share

  $ (0.16 ) $ (0.27 )
 

Dividends declared

  $   $  
 

Book value per share

  $ 1.85     1.42  

 

 
  Six Months Ended   Year Ended  
 
  June 30, 2011
  December 31, 2010
 

Minera Andes—Historical

    IFRS     Canadian GAAP  

Historical per common share:

             
 

Income per basic and diluted share

  $ 0.10   $ 0.07  
 

Dividends declared

  $   $  
 

Book value per share

  $ 0.66   $ 0.55  

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  Six Months Ended   Year Ended  
 
  June 30, 2011
  December 31, 2010
 

Unaudited Pro forma Condensed Combined US Gold and Minera Andes

    US GAAP     US GAAP  

Unaudited pro forma condensed combined per common share of US Gold:

             
 

Loss per basic and diluted share

  $ (0.06 ) $ (0.23 )
 

Dividends declared

  $   $  
 

Book value per share

  $ 2.76   $ n/a  

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THE ARRANGEMENT

General

        The Board has unanimously approved the Arrangement and the Arrangement Agreement (other than Robert R. McEwen, who abstained from voting on the Arrangement and the Arrangement Agreement because of his interests in Minera Andes). The Arrangement provides for the acquisition of Minera Andes by US Gold through Canadian Exchange Co. The Arrangement will not be completed unless US Gold's shareholders voting together with the holders of the 2007 Exchangeable Shares approve each of the Arrangement Proposals.

        Upon completion of the Arrangement, Minera Andes will become an indirect subsidiary of US Gold. Pursuant to the Arrangement, Canadian Exchange Co. will acquire all of the outstanding Minera Andes shares, and Minera Andes shareholders will receive exchangeable shares of Canadian Exchange Co. based upon an exchange ratio of 0.45 exchangeable shares for each Minera Andes share. Each exchangeable share of Canadian Exchange Co. will be exchangeable on a one-for-one basis for shares of US Gold common stock at any time at the option of the holder.

        Based on the number of Minera Andes shares outstanding as of October 4, 2011, US Gold expects that Canadian Exchange Co. will issue approximately 127,326,984 exchangeable shares to Minera Andes shareholders and Minera Andes Options will be converted into options to acquire 1,906,650 shares of US Gold common stock pursuant to the Arrangement. US Gold expects that, immediately after completion of the Arrangement, former Minera Andes shareholders will beneficially own approximately 47% of the outstanding common stock of US Gold including the 2007 Exchangeable Shares and the exchangeable shares issued in connection with the Arrangement. This percentage is based on the number of shares of US Gold common stock, Minera Andes shares and Minera Andes Options outstanding on October 4, 2011, the most recent practicable date prior to the date of this proxy statement.

        You are urged to read the Arrangement Agreement carefully and in its entirety because it is the legal document that governs the Arrangement. A copy of the Arrangement Agreement is included with this proxy statement as Annex G. For additional information about the Arrangement Agreement, see "The Arrangement Agreement" beginning on page 85 of this proxy statement.


Background of the Arrangement

        The provisions of the Arrangement Agreement are the result of negotiations conducted between representatives of the Special Committee and the special committee of independent directors of Minera Andes, and their respective financial and legal advisors. The following is a summary of the principal events leading up to the public announcement of the proposed transaction, the negotiation of the Arrangement Agreement and meetings, negotiations, discussions and actions between the parties that preceded the public announcement and execution of the Arrangement Agreement.

        The business combination of Minera Andes and US Gold was proposed by Robert R. McEwen, the Chairman, Chief Executive Officer and largest shareholder of each of Minera Andes and US Gold, in June, 2011. Mr. McEwen beneficially owns approximately 21% of the issued and outstanding shares of US Gold and approximately 30% of the issued and outstanding shares of Minera Andes. In addition, both companies have a common executive management team with the Chief Executive Officer, Chief Financial Officer and Corporate Secretary holding the same position in both companies.

        In early June 2011, Mr. McEwen advised management of each of Minera Andes and US Gold that he intended to propose to their respective boards that they consider combining Minera Andes and US Gold at an exchange ratio of 0.40 of a US Gold common share for each one Minera Andes share. Management commenced initial discussions with external legal counsel in order to determine the procedural steps required in contemplation of such a transaction.

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        On June 8, 2011, Nils Engelstad, the corporate secretary of Minera Andes and US Gold, sent an email to the Board advising each of the directors of Mr. McEwen's proposal and that the rationale for this exchange ratio was to provide an "at market" merger of equals.

        On June 8, 2011, Mr. McEwen advised the directors of each of the companies during a telephonic meeting of the board of directors of each company of his proposal and that the basis for this exchange ratio was to provide an "at market" merger of equals. The proposed ratio of 0.40 of a share of US Gold common stock for each Minera Andes share was based on the average trading range for US Gold shares and Minera Andes shares established during the past six months preceding Mr. McEwen's proposal.

        On June 9, 2011, given Mr. McEwen's ownership interest in Minera Andes and the fact he is a director and officer of Minera Andes and may have or be perceived to have interests in the consummation of the Arrangement that may conflict with the interests of US Gold and its shareholders, the Board determined that it was in the best interests of US Gold to form a special committee of independent directors, the Special Committee, to evaluate, review and if it determined to proceed, negotiate the Arrangement with the special committee of independent directors of the board of Minera Andes. Specifically, the Board delegated to the Special Committee the authority to (i) consider whether it is appropriate for US Gold to engage in the proposed transaction at this time; (ii) evaluate the terms of the proposed transaction and suggest to the Board any modifications to the terms of the proposal; (iii) consider whether the proposal would be fair to and in the best interests of US Gold and its shareholders; (iv) obtain any necessary or desirable opinions from legal, financial or other advisors; (v) negotiate with the special committee of the board of directors of Minera Andes; (vi) provide reports and/or recommendations to the Board with respect to such matters and at such times as the Special Committee deemed appropriate, and (vii) recommend what action, if any, should be taken by the Board with respect to the proposed transaction.

        On June 14, 2011, the Board by resolution formed the Special Committee at a meeting held immediately following the annual general meeting of US Gold. The Special Committee was made up of Dr. Baker (Chair), Ms. Ashby, Mr. Bojtos, and Mr. Costelloe, as they were determined to be independent. The members of Special Committee are all of the directors of US Gold except for Mr. McEwen. Following a meeting of the Minera Andes board of directors on June 14, 2011, the two companies issued a joint press release announcing the proposal that had been made by Mr. McEwen.

        From June 17, 2011 through September 22, 2011, the Special Committee held formal meetings on eighteen occasions, including four meetings with Raymond James, its independent financial advisor. Counsel to the Special Committee attended each of these meetings. Seventeen of the meetings were by telephone and one was in person. In addition, during this time, members of the Special Committee also held informal consultations and meetings with management of US Gold and Minera Andes, Raymond James, counsel to the Special Committee, and each other.

        On June 17, 2011, the Special Committee retained Perkins Coie LLP as U.S. counsel to the Special Committee. On June 22, 2011, the Special Committee retained Goodmans LLP as Canadian counsel to the Special Committee. Both U.S. counsel and Canadian counsel were independent of US Gold, Minera Andes and Mr. McEwen.

        On June 22, 2011, the Special Committee met with Perkins Coie LLP, its U.S. counsel, where such counsel explained to the members of the Special Committee their fiduciary duties in the context of the proposed transaction and the process that the Special Committee should undertake before making a recommendation to the Board.

        On June 24, 2011, Dr. Baker asked seven potential independent financial advisors to submit proposals to advise the Special Committee. On June 28 and June 29, the Special Committee met to discuss the seven proposals received from the potential independent financial advisors. After due

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consideration, the Special Committee determined to retain Raymond James as its independent financial advisor because of its independence and expertise in mining transactions. A formal engagement letter was entered into with Raymond James on July 19, 2011 to assist it in evaluating the proposed transaction, including the preparation and delivery of a formal valuation in accordance with MI 61-101 and a fairness opinion.

        On June 30, 2011, legal advisors to US Gold and the Special Committee held a meeting by telephone with management of US Gold to discuss, among other things, establishment of data rooms for each of US Gold and Minera Andes, execution of a confidentiality agreement between US Gold and Minera Andes, applicability of MI 61-101 to the proposed transaction and the proposed structure of the proposed transaction. On July 1, 2011, the electronic data room for US Gold was established and on July 4, 2011, the electronic data room for Minera Andes was established. On July 8, 2011, Minera Andes and US Gold entered into a confidentiality agreement in respect of the proposed transaction. US Gold retained Fraser Milner Casgrain LLP as Canadian counsel along with Hogan Lovells US LLP as U.S. counsel to the company, who along with both U.S. and Canadian counsel to the Special Committee each conducted significant due diligence on Minera Andes. Perkins Coie LLP and Goodmans LLP, as counsel to the Special Committee, performed due diligence on certain issues as instructed by the Special Committee and reviewed the diligence undertaken by Fraser Milner Casgrain LLP and Hogan Lovells US LLP.

        On July 14, 2011, the Special Committee met with its legal advisors and Raymond James in person at the offices of Perkins Coie LLP in Denver, Colorado. At this meeting Raymond James presented to the Special Committee its preliminary analysis of the proposed transaction. Based upon its diligence and analysis to date, Raymond James was of the preliminary view that the proposed transaction was a good strategic fit for US Gold at this time and that the proposed exchange ratio of 0.40 was within the range of what Raymond James would consider to be fair, from a financial point of view, to US Gold shareholders, other than any Interested Parties. Also at this meeting a representative of Goodmans LLP provided the Special Committee with a summary of MI 61-101 considerations, as well as other legal considerations involved with plans of arrangement and related party transactions in Canada.

        On July 20, 2011, Minera Andes' counsel, Lawson Lundell LLP, provided a presentation to US Gold's U.S. and Canadian counsel, the Special Committee's Canadian and U.S. counsel, counsel to the special committee of Minera Andes, Raymond James and RBC Dominion Securities Inc. ("RBC"), financial advisor to the special committee of Minera Andes. The presentation gave an overview, including the current status, of the litigation in respect of the Los Azules property. Later in the day Goodmans LLP provided the information learned at the meeting about the litigation to the Special Committee. The Special Committee instructed Goodmans LLP to undertake a review of a number of additional items in respect of the Los Azules litigation. Dr. Baker also reported at the meeting that she had spoken with Raymond James and they would take into account the litigation information into their financial analysis of the proposed transaction. The Special Committee also discussed other diligence matters, including undertaking site visits to the San José Mine and the Los Azules property.

        On July 25 and 26, 2011, Raymond James and Mr. Bojtos attended due diligence presentations with Minera Andes technical consultants and management. These diligence sessions were in lieu of physical site visits at the time because of hazardous travel conditions to the sites due to winter weather. Mr. Bojtos was able to visit the San José Mine from September 6th to the 9th and reported back to the Special Committee about his visit on September 12, 2011. No site visit was made to Los Azules given the winter whether and remote location. In addition to this diligence, Special Committee members carried out further due diligence inquiries including a review of other companies operating in Argentina and the nature of the political system and mining environment in Argentina.

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        On August 13, 2011 the Special Committee held a meeting with Raymond James at which Raymond James presented its opinion to the Special Committee that the proposed exchange ratio of 0.40 was fair, from a financial point of view, to US Gold shareholders, other than any Interested Parties. Based upon the input from Raymond James and advice from legal counsel, the Special Committee authorized its counsel to proceed with drafting definitive documentation for the proposed transaction and authorized its chair, Dr. Baker, to contact the chair of the Minera Andes special committee to determine whether the special committee of Minera Andes had completed its review and analysis of the proposed transaction and if it had determined to pursue the proposed transaction.

        On August 16, 2011 Dr. Baker placed a call to Mr. Michael Stein, chairperson of Minera Andes' special committee. Dr. Baker advised Mr. Stein that the Special Committee was prepared to move forward on the proposed transaction at the exchange ratio of 0.40 US Gold shares for each Minera Andes share.

        On August 17, 2011 the Special Committee held a meeting to discuss the negotiation process and determined that Dr. Baker and Mr. Bojtos would lead any discussions and negotiations with Minera Andes' special committee.

        On August 18, 2011 Dr. Baker and Mr. Bojtos had a telephone call with Mr. Stein and Mr. Victor Lazarovici from Minera Andes' special committee to discuss the potential for a transaction of the nature proposed. Information was exchanged regarding certain aspects of the analysis of the respective financial advisors, but Messrs. Stein and Lazarovici stated that they needed to have further discussions with their financial and legal advisors before proceeding to discuss the terms of a potential transaction.

        On August 26, 2011 the Board met to discuss and approve the Phase 1 capital budget to begin production at the El Gallo Complex by mid 2012. Raymond James was immediately notified of the development so that it could factor the information into its valuation model.

        On August 29, 2011 the Special Committee's U.S. and Canadian counsel, together with US Gold's U.S. and Canadian corporate counsel, conducted a follow-up due diligence call with Minera Andes' management.

        On August 30, 2011, Dr. Baker and Mr. Stein held two telephone conversations to discuss the status of the valuation work currently being done by their respective financial advisors and their preliminary conclusions. Mr. Stein stated that the midpoint of RBC's valuation was significantly higher than the proposed 0.40 exchange ratio, and he asked whether the Special Committee could agree to move above the proposed 0.40 exchange ratio. Dr. Baker replied that based upon Raymond James' analysis, the Special Committee may be willing to agree to a higher exchange ratio. After discussing the specifics of the valuation process as well as other subjective factors, they each agreed to discuss with their respective special committees whether they could agree to a 0.45 exchange ratio.

        On the morning of August 31, 2011 Dr. Baker and Mr. Stein had another brief discussion, during which Mr. Stein stated that if the Special Committee could agree to a 0.45 exchange ratio, then he would recommend that the Minera Andes special committee agree to that exchange ratio.

        On August 31, 2011 the Special Committee held a meeting at which the Special Committee resolved that it was in US Gold's best interests to proceed to negotiate a transaction on the basis of a 0.45 exchange ratio. Dr. Baker was asked to contact Mr. Stein to convey the message and ask whether the Minera Andes special committee would agree to a 0.45 exchange ratio. Dr. Baker also contacted Mr. McEwen to determine whether he would support an exchange ratio of 0.45 in his capacity as the largest shareholder of each company. In that discussion, Mr. McEwen indicated that he would in principle support the 0.45 ratio. Mr. Stein confirmed on August 31, 2011 that the 0.45 exchange ratio was agreeable in principle to the Minera Andes special committee. On the afternoon of August 31, 2011, Perkins Coie LLP distributed drafts of the Arrangement Agreement to Torys LLP, counsel to the Minera Andes special committee.

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        On September 1, 2011 the Special Committee held a meeting at which Raymond James confirmed its opinion that the proposed new exchange ratio of 0.45 would fall within the range of what Raymond James considered to be fair from a financial point of view to US Gold shareholders, other than any Interested Parties.

        On September 1, 2011, the Board met to obtain an update from the Special Committee on the advice received from Raymond James and on ongoing negotiations with the special committee of Minera Andes, including the fact that an exchange ratio of 0.45 had been agreed to in principle by the special committees. The Board then approved in principle the 0.45 exchange ratio. At that point the Board determined that it was appropriate to jointly announce with Minera Andes that an exchange ratio had been agreed upon in principle that was different from the exchange ratio initially proposed by Mr. McEwen as previously announced by both US Gold and Minera Andes on June 14, 2011. Based upon the considerable time spent and costs incurred to date, Mr. McEwen requested that a break-fee be agreed upon prior to final documentation being completed. The Board agreed and the Special Committee along with management assisted in the preparation of a letter agreement that was signed and announced the following day.

        On September 2, 2011, US Gold, Minera Andes and Mr. McEwen executed a letter agreement reflecting the parties' agreement in principal to support the revised exchange ratio of 0.45 subject to the completion of due diligence and the negotiation of a definitive arrangement agreement. The letter agreement also provided for an immediately effective mutual break-up fee equal to approximately 3% of each party's market capitalization as of the previous day. The agreement was publicly announced before the markets opened on September 2.

        On September 12, 2011, the Special Committee held a meeting at which Mr. Bojtos provided the Special Committee an overview of his site visit to the San José Mine. The Special Committee was briefed on, and discussed, the status of the Arrangement Agreement and certain outstanding diligence items, including the Los Azules litigation claim.

        On September 14, 2011, the Special Committee held a meeting at which counsel provided a detailed overview of the revised draft of the Arrangement Agreement that had been prepared by Torys LLP, counsel to the special committee for Minera Andes. The Special Committee discussed at length the material business issues raised by the redraft, including deal protection provisions and post-closing board composition, and discussed the open diligence items, including relating to the Los Azules litigation.

        On September 16, 2011, the Special Committee held a meeting at which Goodmans LLP gave an overview of the diligence undertaken to date on the Los Azules litigation and the information gathered from that diligence. The Special Committee discussed the risks posed by the Los Azules litigation claim to the value of Minera Andes and discussed how to address this risk.

        On September 19, 2011, the Special Committee held a meeting to discuss remaining outstanding business issues with the Arrangement Agreement as well as the open diligence items, including relating to the Los Azules litigation. Dr. Baker agreed to discuss the open issues directly with Mr. Stein, and representatives of Perkins Coie LLP and Goodmans LLP agreed to discuss certain deal protection provisions with Torys LLP.

        On the morning of September 21, 2011, the Special Committee held a meeting at which they discussed the post-closing board composition of the combined companies as well as the open business issues on the Arrangement Agreement. Dr. Baker agreed to again speak with Mr. Stein regarding the remaining business issues on the Arrangement Agreement.

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        On September 21, 2011, Dr. Baker had a telephone conference with Mr. Stein as well as representatives of Perkins Coie LLP, Goodmans LLP and Torys LLP, at which they discussed and reached a tentative agreement on the remaining business issues in the Arrangement Agreement subject to the approval of the respective special committees and boards of directors.

        On the morning of September 22, 2011, the Special Committee held a meeting at which (i) Raymond James gave an updated presentation and confirmed Raymond James' opinion that the proposed exchange ratio of 0.45 remained fair, from a financial point of view, to the shareholders of US Gold (other than any Interested Parties) based upon and subject to the analyses, assumptions, qualifications and limitations set out in the formal valuation and fairness opinion the full text of which is attached as Annex E to this proxy statement, (ii) Goodmans LLP discussed the additional diligence that had been conducted with respect to the Los Azules litigation subsequent to the September 16th meeting, and (iii) Perkins Coie LLP gave a presentation to the Special Committee explaining the provisions and significant terms of the Arrangement Agreement. Legal counsel of the Special Committee discussed once again the directors' fiduciary duties in respect of the proposed transaction. Following the presentations from Raymond James and legal counsel and after discussion, the Special Committee unanimously determined that the Arrangement Agreement was in the best interests of US Gold and its shareholders and recommended that the Board approve the Arrangement Agreement. Immediately after the Special Committee meeting, the Board met and, based in part upon the recommendation of the Special Committee, approved entering into the Arrangement Agreement, with Mr. McEwen abstaining from the vote. On the afternoon of September 22, 2011 US Gold and Minera Andes executed the definitive Arrangement Agreement.

        On September 22, 2011, Raymond James provided the Special Committee its fairness opinion and formal valuation, which states that, based on and subject to the scope of the review, analyses undertaken and various assumptions, limitations and qualifications set forth in its opinion, as of the date of thereof, the consideration of 0.45 shares of US Gold to be received by Minera Andes shareholders for each one Minera Andes share pursuant to the Arrangement Agreement is fair, from a financial point of view, to US Gold shareholders, other than any Interested Parties. The Raymond James formal valuation and fairness opinion, a copy of which is attached hereto as Annex E, is subject to the assumptions and limitations contained therein and should be read in its entirety.


Reasons for the Arrangement

Basis for the Special Committee's Recommendation

        In making its unanimous recommendation, the Special Committee consulted extensively with its legal and financial advisors and management of both US Gold and Minera Andes and considered a number of relevant factors, including:

    Merger of Equals. The Arrangement was proposed by Mr. McEwen as a merger of equals between two companies in which he holds a significant interest. The Arrangement values the equity of Minera Andes at approximately $610.3 million (based on the closing price of the Minera Andes shares on the TSX of Cdn$2.23 on September 22, 2011 and the noon US/Canadian dollar exchange rate of 1.0329 on September 22, 2011), or $2.16 per Minera Andes share. This represents a premium of approximately 16% based on the 20-day volume weighted average trading prices for US Gold and Minera Andes on the TSX through September 2, 2011, the last trading day prior to the public announcement by US Gold and Minera Andes of the revised exchange ratio.

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    Progress towards US Gold's Objective. US Gold's publicly stated objective is to qualify for the S&P 500 Index by 2015. The combination of US Gold and Minera Andes is expected to move US Gold closer to this objective by providing US Gold with:

    strong exploration and production properties that are robust and scalable with a cost structure that is expected to allow the assets to be developed and last through a full commodity cycle;

    expected increased trading volumes which would enhance US Gold's liquidity; and

    asset diversification across commodities, stage of development and geography and positive cash flow from operating income which will allocate financial and operating risk across multiple assets in multiple jurisdictions.

    Aligned Interests. The combination of US Gold and Minera Andes consolidates Mr. McEwen's position as the largest shareholder of both companies. This is expected to align his interests and focus his energy into one flagship entity. The combined company will have a consolidated and focused management team which is expected to offer operational and cost synergies.

    Minera Andes is the Best Alternative. The Special Committee considered US Gold's alternatives to the proposed transaction, including the attractiveness of other acquisition targets, and determined that, based on the exchange ratio and other relevant factors, the acquisition of Minera Andes is the best alternative for US Gold at this time.

    Combined Strength of US Gold and Minera Andes. The combined company will have a stronger combined cash position and balance sheet, sources of revenue, active mining operations, enhanced trading liquidity, a significant growth profile, industry leading costs, an expanded exploration program and additional technical expertise.

    Advice from Raymond James. The opinion from Raymond James that, as of September 22, 2011, and based upon and subject to the analyses, assumptions, qualifications and limitations set forth therein, the exchange ratio is fair, from a financial point of view, to US Gold shareholders, other than Interested Parties.

    The Arrangement is Procedurally Fair. The process undertaken by the Special Committee to review the proposal advanced by Mr. McEwen was procedurally fair to US Gold and its shareholders for the following reasons:

    The Special Committee was comprised of only independent directors;

    The Special Committee retained independent legal and financial advisors;

    The Special Committee conducted an extensive review of alternatives to the proposed transaction, conducted arms'-length negotiations with the special committee of Minera Andes with respect to the exchange ratio offered under the Arrangement, oversaw the due diligence process and negotiated the terms of the Arrangement Agreement;

    The proposal to issue exchangeable shares of Canadian Exchange Co. and the shares of common stock of US Gold issuable upon the exchange of such exchangeable shares in connection with the Arrangement requires the affirmative vote of a majority of the shareholders of US Gold excluding any shares directly or indirectly held by Mr. McEwen and certain other interested parties; and

    The Arrangement must be approved by the Court of Queen's Bench in Alberta, which will consider, among other things, the fairness of the Arrangement to parties involved in the Arrangement.

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    Ability to exercise a "fiduciary out" in certain circumstances. The Arrangement Agreement allows the Board of US Gold to consider and respond to a Superior Proposal, subject to the payment of a termination fee to Minera Andes in certain circumstances. In addition, the Board can withdraw, modify, qualify or change its recommendation if such change is necessary for the Board to act in a manner consistent with its fiduciary duties, subject to certain conditions.

    No other Proposals. Subsequent to the public announcement of the proposed transaction on June 14, 2011, no third party expressions of interest or solicitations to purchase US Gold stock were received by the Special Committee or the Board.

    Voting Agreement. Mr. McEwen and each of the directors and officers of US Gold and Minera Andes have executed a voting agreement pursuant to which, and subject to the terms thereof, they have agreed to vote their respective shares of US Gold and Minera Andes in favor of the resolutions needed to approve the Arrangement.

        The Special Committee also considered a number of risks and potential negative factors relating to the Arrangement, including but not limited to:

    Los Azules Litigation. The Los Azules property owned by Minera Andes is subject to litigation which creates uncertainty as to Minera Andes' title to this property. See "Description of Los Azules Litigation" and "Risk Factors—Los Azules Litigation". Counsel for the Special Committee undertook a diligence review of documentation related to this claim but could not assess the likelihood of success by Minera Andes given the inherent uncertainty in the litigation process. The ultimate outcome of the Los Azules litigation will depend, in part, on pre-trial process, the documentary and oral evidence tendered at trial, and the trial judge's findings of facts based on her assessment of the documentary evidence, and the testimony and credibility of the witnesses. There can be no assurance that the Los Azules litigation will be resolved in a way that is not materially adverse to Minera Andes. See "Information about Minera Andes—Legal Proceedings" beginning on page 152 for more information.

    Challenges in Development of the Los Azules property. The Los Azules property represents one of the largest undeveloped copper deposits in the world and is in a remote location accessed by 120 kilometers of unimproved dirt road with eight river crossings and two mountain passes both above 4,100 meters. The Los Azules project is a large scale and long term project with initial capital costs currently estimated to be $2.8 billion. There are many challenges to bringing the Los Azules property into production, including volatility of copper prices, access to capital for development, permitting, environmental approvals, construction of power and other infrastructure assets in a remote location and ability to attract a qualified work force. See "Risk Factors" beginning on page 31 for more information.

Basis for the Board's Recommendation

        In addition to the Special Committee's basis for their recommendation, the Board believes that the combination of US Gold and Minera Andes is in the best interests of US Gold and its shareholders because it would result in the following strengths for the combined company:

    A stronger cash position and balance sheet, sources of revenue and active mining operations.  Successful completion of the Arrangement will give US Gold access to additional cash resources and revenue of Minera Andes. The combined company will have approximately $105 million in cash, including silver/gold bullion, and no bank debt. In addition, Minera Andes had revenue of approximately $24.5 million and net income of approximately $19.5 million for the year ended December 31, 2010, which was primarily attributable to Minera Andes' 49% interest in the San José Mine.

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    Enhanced trading liquidity.  US Gold expects that the successful completion of the Arrangement would result in increased market capitalization and trading liquidity of the combined company. Because of the increased market capitalization and liquidity of the combined company, US Gold expects that the combined company will have greater access to equity and debt capital markets than US Gold currently does, and greater appeal to institutional investors because, unlike US Gold, whose properties are in the exploration stage, Minera Andes has properties in the production stage that generate revenue. US Gold expects that the enhanced access to the equity and debt capital markets resulting from the Arrangement would provide management of the combined company greater flexibility to execute its business plan under various financial market conditions.

    Significant Growth Profile.  US Gold projects the combined company would have production of 2.5 million silver ounces in 2011, which is expected to increase to 7.5 million silver ounces by 2014.

    Industry Leading Costs.  The combined company's cash cost to mine silver is estimated to be approximately $0.40 per silver ounce (net of gold by-product), with costs expected to remain low as new production commences.

    Expanded Exploration Program.  The combined company would have significant land packages adjoining Goldcorp's Cerro Negro Project, Barrick's Cortez Mine and US Gold's own El Gallo Complex.

    Additional technical expertise.  US Gold believes that Minera Andes has quality employees with good technical expertise in Argentina. US Gold hopes to retain key employees following the successful completion of the Arrangement to assist in US Gold's business and operations going forward.


The Exchange Ratio

        The exchange ratio of 0.45 was determined by negotiation between the Special Committee and the special committee of Minera Andes and announced on September 2, 2011. The exchange ratio will not be adjusted for any subsequent changes in market prices of US Gold common stock or Minera Andes shares prior to the closing of the Arrangement.


The Securities to be Issued by US Gold and Canadian Exchange Co. in the Arrangement

Exchangeable Shares

        Pursuant to the Arrangement, holders of Minera Andes shares will receive a number of exchangeable shares of Canadian Exchange Co. equal to the number of Minera Andes shares so exchanged multiplied by the exchange ratio of 0.45. The exchangeable shares of Canadian Exchange Co. will be exchangeable into US Gold common stock on a one-for-one basis at any time at the option of the holder and will carry voting and dividend/distribution rights which are designed to provide holders of the exchangeable shares with substantially similar voting and economic rights as holders of US Gold common stock. Any exchangeable shares then outstanding will, upon the direction of Canadian Exchange Co.'s board of directors, be exchanged for shares of US Gold common stock on any date that is on or after the tenth year anniversary of the date on which exchangeable shares are first issued, subject to applicable law. Exchangeable shares will also be required to be exchanged for shares of US Gold common stock in other specified circumstances.

Minera Andes Options

        All Minera Andes Options will become exercisable to acquire common stock of US Gold. The number of shares of US Gold common stock issuable upon exercise of such converted options will

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equal to number of Minera Andes shares issuable upon exercise prior to conversion multiplied by the exchange ratio of 0.45. The exercise price and vesting terms of the Minera Andes Options will remain the same.

Fractional Shares

        Fractional exchangeable shares will not be issued pursuant to the Arrangement. Instead, the number of exchangeable shares to be issued to each Minera Andes shareholder will be either rounded up (if the fractional interest is 0.5 or more) or down (if the fractional interest is less than 0.5) to the next whole number. For purposes of such rounding, all of the common shares of Minera Andes deposited by a shareholder will be aggregated. In addition, no fractional shares of US Gold common stock will be issued pursuant to Minera Andes Options that have become exercisable into options to acquire common stock of US Gold. Instead, the number of shares of US Gold common stock to be underlying each converted Minera Andes Option will be rounded up or down to the next whole number.

Total Expected Issuance of US Gold Shares

        Based upon information provided to us by Minera Andes, we expect to issue a total of up to approximately 127,326,984 exchangeable shares of Canadian Exchange Co. and 1,906,650 shares of US Gold common stock upon exercise of Minera Andes Options in connection with the Arrangement. However, the actual number of shares issued and reserved for issuance in connection with the acquisition of Minera Andes will be impacted by a number of circumstances and variables that US Gold cannot predict or control, for example, the number of shares of Minera Andes outstanding at the time of the Arrangement.

Shares to be Issued

        The following chart summarizes the US Gold common shares that are outstanding as of October 4, 2011 (and on a fully diluted basis) and that we expect will be issued to the holders of shares of Minera Andes upon exchange of the exchangeable shares of Canadian Exchange Co. in connection with the Arrangement and upon exercise of the Minera Andes Options. It also shows the approximate percentage of US Gold common stock that would be held by current shareholders of US Gold and Minera Andes, assuming the Arrangement is completed. Information regarding the outstanding shares of Minera Andes was provided to us by Minera Andes.

 
  Total
US Gold
Shares Giving
Effect to
Arrangement
(undiluted)(1)
  Total
US Gold
Shares Giving Effect
to Arrangement
(fully diluted)(1)
  Percentage of
Undiluted
US Gold
Shares Held(1)
  Percentage of
Fully Diluted
US Gold
Shares Held(1)
 

Existing US Gold Shareholders

    139,752,719     144,141,479     52 %   53 %

Minera Andes Shareholders

    127,326,984     129,233,634     48 %   47 %

Total for US Gold and Minera Andes

    267,079,703     273,375,113     100 %   100 %

(1)
Securities of Minera Andes held by Robert R. McEwen and any other current shareholders of US Gold that will be exchanged for exchangeable shares of Canadian Exchange Co. under the Arrangement are included in Minera Andes shareholders ownership numbers and percentages.

        Upon completion of the Arrangement, if Mr. McEwen exercises all of his outstanding options to purchase shares of Minera Andes and of our common stock and exchanges all of his exchangeable shares for shares of our common stock, we expect that Mr. McEwen will own approximately 68,293,241 shares of our common stock or approximately 25% of the outstanding shares of our common stock the

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exchangeable shares to be issued in the Arrangement and the 2007 Exchangeable Shares, counted together as a single class.

Minera Andes Shareholder Dissenter Rights

        The shareholders of Minera Andes have dissent rights with respect to the Arrangement. Any shareholder of Minera Andes who validly exercises his or her dissent rights will be entitled to receive fair value for each common share of Minera Andes common stock he or she holds in lieu of any exchangeable shares. Pursuant to the Arrangement Agreement and Plan of Arrangement, Minera Andes shall pay fair value for Minera Andes common shares held by any Minera Andes shareholder who validly exercises his or her dissenters rights, which may result in material expense to Minera Andes. If holders of more than 5% of Minera Andes issued and outstanding common shares exercise their dissent rights, US Gold has the right to terminate the Arrangement Agreement.

Registration of US Gold Common Shares

        US Gold has agreed to file a registration statement with the SEC in order to register under the Securities Act the issuance from time to time of the shares of US Gold common stock in exchange for the exchangeable shares. US Gold also agreed to use its reasonable best efforts to cause such registration statement to become effective upon the consummation of the Arrangement and to maintain the effectiveness of such registration so long as any exchangeable shares remain outstanding. For purposes of registering such shares of common stock, US Gold is preparing a registration statement on Form S-4. The effectiveness of the registration statement is a condition to the completion of the Arrangement.

        US Gold has also agreed to take commercially reasonable efforts to obtain any regulatory approvals that are necessary to ensure that the shares of US Gold common stock to be issued upon the exercise of the Minera Andes Options will be freely tradable in the United States.

Listing of US Gold Common Shares and Canadian Exchange Co. Exchangeable Shares

        The completion of the Arrangement is subject to the condition that the shares of US Gold common stock to be issued upon exchange of the exchangeable shares of Canadian Exchange Co. and the exercise of Minera Andes Options will be listed on the NYSE and the TSX and the exchangeable shares of Canadian Exchange Co. to be issued to Minera Andes shareholders in the Arrangement will be listed on the TSX. The exchangeable shares will not be listed on a securities exchange in the United States. We have agreed to take all commercially reasonable steps to list the exchangeable shares of US Gold common stock on the NYSE and the TSX and to list the exchangeable shares on the TSX.


Completion of the Arrangement

        Under the ABCA, the Arrangement requires approval by the Court. Assuming such approval is obtained, and the other conditions to closing contained in the Arrangement Agreement are satisfied or waived, it is anticipated that the following will occur substantially simultaneously with the consummation of the Arrangement:

    articles of arrangement for Minera Andes will be filed with the Registrar under the ABCA and a proof of filing will be issued to give effect to the Arrangement;

    the Voting and Exchange Trust Agreement and the Support Agreement (as described under "Structure of the Arrangement") will be executed and delivered; and

    the various other documents necessary to consummate the Arrangement will be executed and delivered.

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        It is currently anticipated that the Arrangement will close as soon as possible after the requisite approvals of the Minera Andes shareholders and the US Gold shareholders voting together with the holders of the 2007 Exchangeable Shares are obtained.


Pro Forma Financial Information

        A summary of the pro forma financial information for the Arrangement is provided on page 29 of this proxy statement and full pro forma financial information is included in Annex C to this proxy statement.


Ongoing Canadian Reporting Requirements

        Minera Andes is a reporting issuer in each of the provinces of Canada other than Quebec. After the Arrangement is completed, Minera Andes will no longer be separately subject to Canadian financial and other continuous and timely reporting requirements but will be consolidated with US Gold's reporting under the U.S. federal securities laws and Canadian securities laws, as applicable.

        Currently, US Gold is a reporting issuer in each of the provinces of Canada, but pursuant to National Instrument 71-102—Continuous Disclosure and Other Exemptions Relating to Foreign Issuers of the Canadian Securities Administrators, US Gold is generally exempt from Canadian financial and other continuous and timely reporting requirements, including the requirement for insiders of US Gold to file reports with respect to transactions in US Gold securities, provided US Gold complies with the requirements of U.S. securities laws and U.S. market requirements in respect of all financial and other continuous and timely reporting matters and US Gold files with applicable Canadian securities regulators copies of its documents filed with or furnished to the SEC under the Exchange Act. However, as a reporting issuer in Canada, US Gold is subject to NI 43-101 and complies with the disclosure requirements of NI 43-101 with respect to its mineral projects and, following completion of the Arrangement, will be required to comply with such requirements with respect to the Minera Andes mineral projects.


Formal Valuation and Fairness Opinion of Special Committee's Financial Advisor

        Raymond James Ltd. ("Raymond James") was engaged by the Special Committee pursuant to an engagement agreement (the "Engagement Agreement") dated July 19, 2011 to assist it in evaluating the Arrangement, including the preparation and delivery to the Special Committee of a formal valuation (the "Valuation") of the common stock of US Gold and common shares of Minera Andes both in accordance with the requirements of MI 61-101 and a fairness opinion (the "Opinion") as to whether the consideration payable by US Gold under the Proposed Transaction is fair, from a financial point of view, to the shareholders of US Gold, other than any Interested Parties. On September 22, 2011 Raymond James rendered its Valuation and Opinion to the Special Committee, as of such date and subject to the qualifications, limitations and assumptions stated in its written opinion, that the exchange ratio of 0.45 shares of US Gold common stock for each 1 share of Minera Andes common stock is fair, from a financial point of view, to the shareholders of US Gold, other than any Interested Parties.

        The full text of Raymond James' opinion, dated as of September 22, 2011, is attached as Annex E to this proxy statement. US Gold shareholders are encouraged to read Raymond James' opinion for a discussion of the procedures followed, factors considered, assumptions made and qualifications and limitations of the review undertaken by Raymond James in connection with its opinion. The following is a summary of Raymond James opinion and the methodology that Raymond James used to render its opinion. This summary is qualified in its entirety by reference to the full text of the opinion.

        Raymond James' opinion is addressed to the Special Committee of the Board of Directors of US Gold, addresses only the fairness, from a financial point of view, of the exchange ratio to the

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shareholders of US Gold, other than the Interested Parties, and does not constitute a recommendation to any US Gold shareholder as to how such shareholder should vote with respect to the Arrangement Proposals. The terms of the Arrangement were determined through arm's-length negotiations between the Special Committee and the special committee of the board of directors of Minera Andes and were approved by US Gold's Board of Directors. Raymond James did not recommend any specific form or amount of consideration to the Special Committee or that any specific form or amount of consideration constituted the only appropriate consideration for the proposed Arrangement. Raymond James was not requested to address, and its opinion does not in any manner address, US Gold's underlying business decision to proceed with or effect the Arrangement. In addition, Raymond James expressed no opinion as to the price at which shares of common stock of US Gold actually will trade following the announcement of the Arrangement Agreement. No limitations were imposed by the Special Committee upon Raymond James with respect to the investigations made or procedures followed by it in rendering its opinion.

Credentials of Raymond James Ltd.

        Raymond James is a wholly-owned, indirect subsidiary of Raymond James Financial, Inc. ("Raymond James Financial"). Raymond James Financial is a publicly listed, diversified financial services holding company whose subsidiaries engage primarily in investment and financial planning, including securities and insurance, brokerage, investment banking, asset management, banking and cash management, and trust services. Raymond James is a Canadian full-service investment dealer with operations located across Canada. Raymond James is a member of the Toronto Stock Exchange ("TSX"), the TSX Venture Exchange ("TSXV"), the Montreal Exchange, the Investment Industry Regulatory Organization of Canada, the Investment Funds Institute of Canada, and the Canadian Investor Protection Fund. Raymond James and its officers have prepared numerous valuations and fairness opinions and have participated in a significant number of transactions involving private and publicly traded companies.

Independence of Raymond James

        The terms of the Engagement Agreement provide that Raymond James was paid $500,000 for its services and was reimbursed for its reasonable out-of-pocket expenses upon submission of the Valuation and Opinion. In addition, US Gold has agreed to indemnify Raymond James against certain expenses, losses, claims, actions, damages and liabilities incurred in connection with the provision of its services. The fee payable to Raymond James is not contingent in whole or in part on the outcome of the Proposed Transaction or on the conclusions reached in the Valuation and Opinion.

        Neither Raymond James nor any of its affiliated entities is or has been an associated or affiliated entity or issuer insider (as those terms are defined in MI 61-101) of US Gold, Minera Andes or any Interested Party in connection with the Arrangement. Except as financial advisor to the Special Committee, neither Raymond James nor any of its affiliated entities is or has been an advisor to any of the Interested Parties with respect to the Arrangement.

        The fees paid to Raymond James in connection with the Engagement Agreement do not give Raymond James any financial incentive in respect of the conclusions reached in the Valuation and Opinion and Raymond James has no material financial interest in the completion of the Arrangement. No understandings or agreements exist between Raymond James and US Gold or any Interested Party with respect to future financial advisory or investment banking business. Raymond James may in the future, in the ordinary course of its business, perform financial advisory or investment banking services for US Gold or other Interested Parties.

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Scope of Review

        In connection with the Valuation and Opinion, Raymond James reviewed and relied upon or carried out, among other things, public and non-public disclosure of US Gold and Minera Andes, information regarding the Arrangement (including the terms of the Arrangement Agreement), NI 43-101 technical reports and other feasibility studies of properties owned by US Gold and Minera Andes. In addition, Raymond James held discussions with senior management of both US Gold and Minera Andes, held discussions with the Special Committee and legal counsel to the Special Committee, and carried out other diligence review, all as more specifically described in the Raymond James Valuation and Opinion.

General Assumptions and Limitations

        With the Special Committee's approval and as provided for in the Engagement Agreement, Raymond James has relied, without independent verification, upon all financial and other information that was obtained by it from public sources or that was provided to it by US Gold, Minera Andes and their affiliates, associates, advisors or otherwise. Raymond James assumed that this information was complete and accurate and did not omit to state any material fact or any fact necessary to be stated to make that information not misleading. Raymond James' Valuation and Opinion is conditional upon such completeness and accuracy. In accordance with the terms of its engagement, but subject to the exercise of its professional judgment, Raymond James has not conducted any independent investigation to verify the completeness or accuracy of such information.

        Raymond James has assumed that the Arrangement will be effected in accordance with the terms described in the Arrangement Agreement, and that US Gold will acquire 100% of Minera Andes, as contemplated by the Arrangement Agreement. They have assumed that all conditions precedent to the completion of the Arrangement can be satisfied in due course, that all consents, permissions, exemptions or orders of relevant regulatory authorities or third parties will be obtained without adverse condition or qualification, that the procedures being followed to implement the Arrangement are valid and effective, that this proxy statement will be distributed to the US Gold shareholders in accordance with all applicable laws, and that the disclosure in the proxy statement will be accurate, in all material respects, and will comply, in all material respects, with the requirements of all applicable laws.

        The Valuation and Opinion is based on the securities markets, economic, general business and financial conditions prevailing as of the Valuation Date and the conditions and prospects, financial and otherwise, of US Gold and Minera Andes as they were reflected in the information reviewed by Raymond James. In its analysis and in preparing the Valuation and Opinion, Raymond James made numerous assumptions with respect to commodity performance, general business, economic and market conditions, and other matters, many of which are beyond the control of Raymond James, US Gold or any party involved with US Gold in connection with the Arrangement, including any Interested Party. While Raymond James believes the assumptions used are appropriate in the circumstances, some or all of the assumptions may prove to be incorrect.

Prior Valuations

        US Gold has represented to Raymond James that there have been no independent appraisals or prior valuations (as defined in MI 61-101) of all or a material part of the properties or assets owned by, or the securities of US Gold or any of its subsidiaries made in the preceding 24 months and in the possession or control of US Gold except as noted herein. In addition, Minera Andes has represented to Raymond James that there have not been any prior valuations (as defined in MI 61-101) of Minera Andes or its material assets or its securities in the past twenty-four months.

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Duff & Phelps Valuation

        US Gold engaged Duff & Phelps in December 2009 in order to estimate the fair value of certain of its mineral properties ("U.S. Mineral Interests") in accordance with the provisions of Accounting Standards Codification 360. The results of this analysis were to be used by US Gold for financial reporting purposes. A copy of this report is available from the office of US Gold (Suite 4750, Brookfield Place, Bay Wellington Tower, 181 Bay Street, P.O. Box 792, Toronto, Ontario, Canada M5J 2T3).

        The U.S. Mineral Interests comprised of the following gold complexes located in the state of Nevada: Tonkin Complex, Gold Bar Complex, Limousine Butte Complex ("Limo Project"), Battle Mountain Complexes (North, East and West) and Other Properties. Duff & Phelps utilized a market approach (land value multiple per square mile) to estimate the fair value of U.S. Mineral Interests as of November 1, 2009 at $297.9 million. Raymond James reviewed that report during its analysis to prepare the Valuations and Opinion but did not rely on it as a result from many factors including the following:

    1.
    Raymond James did not utilize the land value per square mile methodology for financial assessment given that there are other and more recent valuation approaches available;

    2.
    Raymond James had access to more recent reports from external technical consultants, namely, Tonkin Report, Limo Report and New Pass Report, as well as the Gold Bar Report and the Gold Bar Project Information (SRK);

    3.
    Raymond James had access to information as at 2011 versus the 2009 data used in the Duff & Phelps Report; and

    4.
    Since the date of the Duff & Phelps Valuation there have been substantial changes in the price forecasts for silver, gold, and in the reserves, financial position and operations of US Gold.

Approach to Valuation and Opinion

        The Valuation and Opinion was prepared on a going-concern basis and is based upon techniques and assumptions that Raymond James considered appropriate in the circumstances for the purposes of arriving at an opinion as to the range of fair market value of the US Gold Shares and Minera Andes Shares.

        For the purposes of determining a range of fair market value for US Gold and Minera Andes, Raymond James relied upon four valuation methodologies:

    net asset value ("NAV") approach;

    comparable trading approach;

    comparable transactions approach; and

    market trading approach

        The analysis presented in the Valuation and Opinion is based on a USD/CAD exchange rate of $1.0329 per Cdn$1.00 being the noon exchange rate published by the Bank of Canada for September 22, 2011.

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Valuation Methodologies and Application to Us Gold and Minera Andes

NAV Approach

        Raymond James considered the NAV approach to value both US Gold and Minera Andes. The NAV approach builds up a value by separately considering each operating, development, exploration and financial asset, whose individual values are estimated through the application of that methodology considered to be the most appropriate in the circumstances, net of obligations, liabilities, including reclamation and closure costs, and the present value of corporate expenses that are not directly attributable to the operating and development assets. The NAV approach adopts a prospective view in regard to commodity prices and explicitly addresses the unique characteristics of each major asset.

        To value the operating mines and selected development projects, Raymond James relied primarily on a discounted cash flow ("DCF") analysis whereby projected unlevered free cash flows are discounted over a time horizon equal to the estimated remaining life of the asset at a range of discount rates to generate a range of present values. As a basis for the development of the projected cash flows, Raymond James reviewed unaudited projected operating and financial statements for US Gold and Minera Andes prepared by management and technical report authors (the "Forecasts"). Raymond James also reviewed the underlying assumptions (on an asset by asset basis) including, but not limited to, production rates, operating costs, and capital expenditures, and had detailed discussions with senior management and technical experts of US Gold and Minera Andes. The Forecasts and underlying assumptions were reviewed for reasonableness and were compared to sources considered relevant. Based on this review, Raymond James developed its own forecasts.

        Raymond James conducted a survey of commodity prices used by selected industry groups and research analysts. The following table sets out the commodity price forecasts used in its analysis.

Commodity
   
  Long Term   2011   2012   2013   2014   2015   2016   2017  

Gold

  US$ /oz   $ 1,200.00   $ 1,520.00   $ 1,580.00   $ 1,550.00   $ 1,450.00   $ 1,300.00   $ 1,200.00   $ 1,200.00  

Silver

  US$ /oz   $ 19.50   $ 37.80   $ 38.50   $ 35.00   $ 30.00   $ 26.00   $ 19.50   $ 19.50  

Copper

  US$ /lb   $ 2.50   $ 4.37   $ 4.65   $ 5.00   $ 5.00   $ 5.00   $ 2.50   $ 2.50  

        The NAV analysis yields values that are generally above those obtained in Comparable Trading and Comparable Transactions approaches. As the NAV methodology adopts a prospective, long-term view with respect to commodity prices, it is not as sensitive to the current levels of commodity prices as is the Comparable Trading or Comparable Transactions approaches, which is based on metrics that reflect current commodity prices and the uncertainty of future pricing. Since the NAV approach requires the valuator to make a number of assumptions, different valuators could derive different NAVs for the same assets.

Application to US Gold

        The range of value for US Gold's El Gallo and Gold Bar projects were derived from DCF analyses based on the Forecasts. Raymond James calculated DCF values using its forecasted price assumptions and performed sensitivity around long term commodity prices. Raymond James did not consider any future capacity expansions, but did assume ramp up in production according to the Forecasts. Raymond James also applied risk adjusted multiples to the properties to reflect their stage of development, among other factors. A discount rate of 5% was chosen to reflect the country-specific political and other risks associated with the projects. The value of exploration properties was estimated by applying a prevailing industry average EV/Resource multiple to the current resource estimates of Limo and placing a nominal value to early exploration properties given their stage and other considerations.

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        Using the NAV Approach a range of value of between Cdn$4.21 to Cdn$5.42 per US Gold Share was estimated.(1)(2)


(1)
Corporate adjustments as at the Valuation Date include cash and cash equivalents balance of US$91.3 million and debt obligations of US$0.0 million

(2)
Shares outstanding calculated based on the treasury method

Application to Minera Andes

        The range of values for Minera Andes' San Jose and Los Azules properties were derived from DCF analyses based on the Forecasts. Raymond James calculated DCF values using its forecasted price assumptions and performed sensitivity around long term commodity prices. Raymond James did not consider any future capacity expansions, but did assume ramp up in production according to the Forecasts. Raymond James applied a risk adjusted developer multiple to Los Azules, in line with industry comparables, to reflect the current stage of development of the project, and also made additional adjustments to reflect the risks associated with the current litigation. A discount rate of 3% was chosen for San Jose and 8% for Los Azules to reflect the country-specific political and other risks associated with the projects. Raymond James placed a nominal value on the early exploration properties given their stage of development and other considerations.

        Using the NAV Approach, a range of value of between Cdn$1.87 to Cdn$2.14 per Minera Andes Share was estimated.(3)

(3)
Corporate adjustments as at the Valuation Date include cash balance of US$21.3 million and debt obligations of US$0.0 million

Comparable Trading Approach

        Raymond James selected and reviewed 13 publicly traded silver companies, 7 of which are categorized as producing, and 6 of which are categorized as development-stage, and derived market trading multiples for such companies. In addition, Raymond James selected and reviewed 7 publicly traded development-stage gold companies and 7 development-stage copper companies. Ideally, the public companies considered would be comparable in terms of commodity mix, geographic location, operating characteristics, growth prospects, risk profile and size. Raymond James recognizes that no single company is perfectly comparable to US Gold or Minera Andes and as such has focused on ranges of value based on a broad set of companies. Raymond James determined that the most appropriate metric on which these companies can be compared is a multiple of Enterprise Value ("EV") per ounce/pound of resources including Proven and Probable Reserves and Measured, Indicated and Inferred Resources ("EV/Resources"). Based on Raymond James' review of the companies identified, Raymond James has selected appropriate multiples and applied them to the applicable metrics of US Gold and Minera Andes to estimate the fair market value of US Gold Shares and Minera Andes Shares.

Application to US Gold

        Raymond James selected and reviewed market trading multiples and market statistics of selected publicly traded companies with businesses that Raymond James considered relevant to US Gold. Estimated financial data for the selected companies was based on publicly available information.

        Based on the average EV/resource multiples of the peer group, the implied value for El Gallo is approximately US$247.7 million. Based on the average EV/resource multiples of the peer group, the implied value for Gold Bar is approximately US$130.8 million, and Limo is approximately US$38.3 million.

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        Using the Comparable Trading Approach, a range of value between Cdn$3.74 to Cdn$4.04 per US Gold Share was estimated.

Application to Minera Andes

        Raymond James reviewed market trading multiples and market statistics of selected publicly traded companies with businesses that Raymond James considered relevant to Minera Andes. Estimated financial data for the selected companies was based on publicly available information. Raymond James performed the analysis over a range of resources applied to Los Azules to reflect the potential outcomes of litigation and potential loss of ownership over the contested resources.

        Based on the average EV/Resource multiples of the peer group, the implied value for San Jose is approximately US$291.1 million. Based on the average EV/Resource multiples of the peer group, the implied value for Los Azules is approximately US$175.6 million.

        Using the Comparable Trading Approach, a range of value between Cdn$1.54 to Cdn$2.13 per Minera Andes Share was estimated.

Comparable Transactions Approach

        Raymond James selected and reviewed 40 transactions involving companies and assets in the silver, gold and copper sector that have been concluded or were pending and for which there was sufficient public information to derive valuation multiples. Nineteen of the transactions occurred in the gold space, 10 in the silver space, and 11 in the copper space. Ideally, comparable transactions considered would be comparable in terms of commodity mix, geographic location, operating characteristics, growth prospects, risk profile and size. Raymond James recognized that no single transaction is perfectly comparable to the Arrangement and as such focused on the ranges of value based on a broad set of transactions. Raymond James determined that the most appropriate metric on which these transactions can be compared is an EV/Resources multiple. Based on its review of the transactions identified, Raymond James selected appropriate EV/Resource multiples and applied them to the applicable metrics for US Gold and Minera Andes to estimate the fair market value of US Gold Shares and Minera Andes Shares.

Application to US Gold

        Using publicly available information, Raymond James identified and reviewed comparable silver and gold transactions involving companies with projects at various stages of development, which have recently concluded. Raymond James reviewed 29 public-company transactions in the silver and gold industry. Selected transactions involved companies in the silver and gold mining industry with similar size and operating metrics to US Gold's development projects.

        Using the Comparable Transaction Approach, a range of values between Cdn$3.59 to Cdn$3.88 per US Gold Share was estimated.

Application to Minera Andes

        Using publicly available information, Raymond James identified and reviewed comparable silver and copper project transactions involving companies with projects at various stages of development. Raymond James reviewed 21 public company transactions in the silver and copper industry. Selected transactions involved companies in the silver and copper mining industry with similar size and operating metrics to Minera Andes properties. Raymond James performed the analysis over a range of resources applied to Los Azules to reflect the potential outcomes of litigation and potential loss of ownership over the contested resources.

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        Using the Comparable Transaction Approach, a range of values between Cdn$1.54 to Cdn$2.64 per Minera Andes Share was estimated.

Market Trading Approach

        Based on market capitalization, market following, trading liquidity, and other considerations, Raymond James considered the Market Trading Approach in assessing the fair market value of the US Gold Shares and Minera Andes Shares. In considering the Market Trading Approach, Raymond James reviewed and considered the trading history of US Gold and Minera Andes.

Application to US Gold

        In considering the Market Trading Approach, Raymond James reviewed trading prices and volumes for US Gold Shares for the period from January 6, 2011 to September 22, 2011, the last trading day preceding the announcement of the execution of the Arrangement Agreement.

        In reviewing trading of US Gold Shares, Raymond James considered:

           i)  trading volumes over 5, 10, 20, 30, 60, 90, and 180 days preceding the Valuation Date; and

          ii)  volume-weighted average prices over 1, 5, 10, 20, and 30 days preceding the Valuation Date.

        For the low case scenario, Raymond James used US Gold's closing price on September 22, 2011. For the mid case scenario, Raymond James used the median of the five VWAP prices. For the high case scenario, Raymond James used the 30-day VWAP.

        Using the Market Trading Approach, a range of values between Cdn$5.18 to Cdn$5.91 per US Gold Share was estimated

Application to Minera Andes

        In considering the Market Trading Approach, Raymond James reviewed trading prices and volumes for Minera Andes Shares for the period from January 6, 2011 to September 22, 2011, the last trading day preceding the announcement of the execution of the Arrangement Agreement.(4) Based on US Gold's closing price on the TSX on September 22, 2011 of Cdn$5.06, the implied value per Minera Andes Share was Cdn$2.28 indicating a premium of 2.1% over the closing market price of Cdn$2.23 per Minera Andes Share.


(4)
Source: Thomson One

        In reviewing trading of Minera Andes' Shares, Raymond James considered:

           i)  trading volumes over 5, 10, 20, 30, 60, 90, and 180 days preceding the Valuation Date; and

          ii)  volume-weighted average prices over 1, 5, 10, 20, and 30 days preceding the Valuation Date.

        For the low case scenario, Raymond James used Minera Andes' closing price on September 22, 2011. For the mid case scenario, Raymond James used the median of the five VWAP prices. For the high case scenario, Raymond James used the 10-day VWAP.

        Using the Market Trading Approach, a range of values between Cdn$2.27 to Cdn$2.61 per Minera Andes Share was estimated

US Gold valuation Conclusion

        Based upon and subject to the factors set out in the Valuation and Opinion, Raymond James is of the opinion that, as of the date of the Valuation and Opinion, the fair market value of US Gold is in the range of Cdn$4.25 to Cdn$5.25 per US Gold Share.

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Minera Andes Valuation Conclusion

        Based upon and subject to the factors set out in the Valuation and Opinion, Raymond James is of the opinion that, as of the date of the Valuation and Opinion, the fair market value of Minera Andes is in the range of Cdn$1.75 to Cdn$2.25 per Minera Andes Share.

Fairness Opinion

        In reaching an opinion as to whether the consideration payable by US Gold under the Arrangement is fair, from a financial point of view, to the shareholders of US Gold, other than any Interested Parties, Raymond James principally considered the following:

    1.
    A comparison of the range of NAV of US Gold to the range of NAV of Minera Andes; and

    2.
    A comparison of the range of fair market values of US Gold to the range of fair market values of Minera Andes, each as determined in the Valuation.

        Based upon such analysis, Raymond James concluded that the Exchange Ratio of 0.45 shares of US Gold stock for each 1.0 share of Minera Andes stock is fair, from a financial point of view, to the shareholders of US Gold, other than any Interested Parties.


Consent of Raymond James

        We refer to the formal valuation and fairness opinion ("Valuation and Opinion") dated September 22, 2011, which we prepared for the Special Committee of the Board of Directors of US Gold Corporation. We consent to the filing of the Valuation and Opinion with the applicable securities regulatory authorities and the inclusion of the summary of the Valuation and Opinion, the text of which was previously provided to Raymond James, and the full text of the Valuation and Opinion in US Gold's proxy statement in connection with the proposed plan of arrangement with Minera Andes Inc. Our Valuation and Opinion was given as at September 22, 2011 and remains subject to the assumptions, qualifications and limitations contained therein. In providing our consent, we do not intend that any person other than the Special Committee shall be entitled to rely upon our Valuation and Opinion.

Sincerely,

GRAPHIC

Raymond James

Dated October 6, 2011


Regulatory Matters

Competition Act (Canada)

        Part IX of the Competition Act (Canada), which is referred to in this proxy statement as the Competition Act, requires that, subject to limited exceptions, the Commissioner of Competition be notified of certain classes of transactions that exceed the thresholds set out in Sections 109 and 110 of the Competition Act, which are referred to in this proxy statement as notifiable transactions, by the parties to such transactions. The transactions contemplated by the Arrangement do not meet these thresholds and thus, the Arrangement is not a notifiable transaction.

        Whether or not a "merger" (as such term is defined under the Competition Act) is subject to notification under Part IX of the Competition Act, the Commissioner of Competition can apply to the Competition Tribunal for a remedial order under Section 92 of the Competition Act at any time before

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the merger has been completed or, if completed, within one year after it was substantially completed (provided, subject to limited exceptions, the Commissioner of Competition has not issued an advance ruling certificate in respect of the merger). Where the Competition Tribunal finds that the merger prevents or lessens, or is likely to prevent or lessen, competition substantially, it may order, among other things, that the merger not proceed or, if completed, order its dissolution or the disposition of assets or shares involved in such merger. In addition to the foregoing, or in lieu thereof, with the consent of the person against whom the order is directed and the Commissioner of Competition, the Competition Tribunal can order a party to the merger or any other person to take any other action.

Court of Queen's Bench of Alberta

        The Arrangement requires approval by the Court, under the ABCA. On [    •    ], 2011, Minera Andes obtained the interim order of the Court (the "Interim Order") providing for the calling and holding of the special meeting of Minera Andes shareholders for purposes of approving the Arrangement and other procedural matters.

        Subject to the approval of the Arrangement by Minera Andes shareholders and the approval of the Arrangement Proposals by US Gold shareholders and the holders of the 2007 Exchangeable Shares, voting as a single class, the hearing in respect of the final order (the "Final Order") is expected to take place on or about [    •    ], 2011 at the Court House 601—5th Street S.W., Calgary, Alberta T2P 5P7, or as soon thereafter as is reasonably practicable. The Court will consider, among other things, the fairness and reasonableness of the Arrangement to the shareholders of US Gold and any other interested person as the Court considers appropriate. The Court may approve the Arrangement in any manner the Court may direct, subject to compliance with such terms and conditions, if any, as the Court deems fit.

        If the Final Order is granted and the other conditions for the completion of the Arrangement have been satisfied, Minera Andes will file articles of arrangement with the Registrar under the ABCA and the Registrar will issue a Certificate of Arrangement, thereby giving effect to the Arrangement.

        Although US Gold's objective is to have the effective date of the Arrangement occur as soon as possible after the Meeting, the effective date could be delayed for a number of reasons, including, but not limited to, an objection before the Court at the hearing of the application for the Final Order or any delay in obtaining any required approvals.

Investment Canada Act

        Under Part IV of the Investment Canada Act, certain transactions involving the acquisition of control of a Canadian business by a non-Canadian entity that exceed prescribed monetary thresholds are subject to review (a "Reviewable Transaction") and cannot be implemented unless the Minister of Industry (Canada) (the "Minister") is satisfied or is deemed to be satisfied that the acquisition is likely to be of net benefit to Canada.

        Under Part IV.1 of the Investment Canada Act, investments by non-Canadians to acquire control of a Canadian business can be made subject to review and approval on grounds that the investment could be injurious to national security. The Governor in Council may take any measures in respect of the investment that the Governor in Council considers advisable to protect national security, including: (a) directing the purchaser not to implement the investment; (b) authorizing the investment on condition that the non-Canadian (i) give any written undertakings to Her Majesty in right of Canada relating to the investment that the Governor in Council considers necessary in the circumstances, or (ii) implement the investment on the terms and conditions contained in the order; or (c) requiring the purchaser to divest itself of control of the Canadian business or of its investment in the entity. In order to trigger a national security review, within 45 days of the date on which the notification or application for review has been filed and certified as complete or within 45 days of the date of closing of a transaction for which neither an application for review nor a notification is required, either (a) the

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Governor in Council must order a review of the transaction or (b) the Minister must issue a notice to the purchaser indicating that a review may be necessary on grounds of national security, in which case the Governor in Council has 25 days from the date of notice to order a review.

        It has been determined that the transactions contemplated by the Arrangement do not constitute a Reviewable Transaction. As a result, US Gold will only be required to file a notification form under Part III of the Investment Canada Act within 30 days of closing.

Hart-Scott-Rodino Act

        Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules promulgated thereunder by the United States Federal Trade Commission, or the FTC, certain transactions may not be consummated unless notification has been given and certain information has been furnished to the FTC and the Antitrust Division of the United States Department of Justice and certain waiting period requirements have been satisfied. We have determined that the Arrangement is not subject to the notification and reporting requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Canadian Securities Regulatory Matters

        The distribution of the shares of US Gold common stock and exchangeable shares of Canadian Exchange Co. in connection with the Arrangement will be made pursuant to statutory exemptions from the prospectus and registration requirements of applicable Canadian securities laws.

MI 61-101 Compliance

        Under MI 61-101, US Gold is considered to be a related party to Minera Andes because the companies have the same "control person", namely Robert R. McEwen. A "control person" is a person who directly or indirectly holds more than 20% of the outstanding voting securities. Furthermore, certain officers and directors of US Gold, who are "related parties" of US Gold own common shares in Minera Andes. As a result of these relationships, the Arrangement constitutes a "related party transaction" under MI 61-101. As a related party transaction under MI 61-101, the issuance of exchangeable shares in the Arrangement is subject to the requirements of MI 61-101, which include minority shareholder approval and the obtaining of a formal valuation. Minority shareholder approval excludes the votes of related parties of US Gold who hold common shares of Minera Andes and the votes of related parties of Minera Andes who hold shares of common stock of US Gold or 2007 Exchangeable Shares. As a result of the requirements of MI 61-101, approval of Proposal 3 requires the affirmative vote of the majority of the votes cast by holders of US Gold common stock and holders of the 2007 Exchangeable Shares, counted together as a single class, excluding shares of US Gold common stock and 2007 Exchangeable Shares held by persons whose votes may not be included in determining minority approval pursuant to MI 61-101. Shares that will be excluded from determining minority approval pursuant to MI 61-101 are all shares held directly or indirectly by Robert R. McEwen, Chairman and Chief Executive Officer of US Gold and Minera Andes, Perry Ing, an officer of US Gold and Minera Andes, Ian Ball, an officer of US Gold who holds common shares of Minera Andes, Stefan Spears, an officer of US Gold who holds common shares of Minera Andes, and Allan Marter, a director of Minera Andes.

United States Securities Regulatory Matters

        US Gold has agreed to file a registration statement with the SEC in order to register under the Securities Act the issuance from time to time of the shares of US Gold common stock in exchange for the exchangeable shares. US Gold also agreed to use its reasonable best efforts to cause such registration statement to become effective upon the consummation of the Arrangement and to maintain the effectiveness of such registration so long as any exchangeable shares remain outstanding. For

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purposes of registering such stock, US Gold is preparing a registration statement on Form S-4. The effectiveness of the registration statement is a condition to the completion of the Arrangement.

        US Gold has also agreed to take commercially reasonable efforts to obtain any regulatory approvals that are necessary to ensure that the shares of US Gold common stock to be issued upon the exercise of the Minera Andes Options will be freely tradable in the United States and Canada.

Challenges by Governmental and Other Entities

        Notwithstanding the approval of the Arrangement by the Court, there can be no assurance that any other governmental or other entities will not challenge the Arrangement on antitrust or competition grounds and, if such a challenge is made, there can be no assurance as to its result.

Other Governmental Approvals

        US Gold is not aware of any material governmental approvals or actions that are required for completion of the Arrangement other than those described above. It is presently contemplated that if any such additional material governmental approvals or actions are required, those approvals or actions will be sought. US Gold has agreed to use commercially reasonably efforts to obtain all regulatory approvals required to complete the Arrangement.

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THE ARRANGEMENT AGREEMENT

        The following is a summary of the material terms and conditions of the Arrangement Agreement. This summary may not contain all the information about the Arrangement Agreement that is important to you and is qualified in its entirety by reference to the Arrangement Agreement attached as Annex G to this proxy statement. You are encouraged to read the Arrangement Agreement carefully and in its entirety because it is the legal document that governs the Arrangement.

        Explanatory Note Regarding the Arrangement Agreement and the Summary of the Arrangement Agreement: Representations, Warranties and Covenants in the Arrangement Agreement Are Not Intended to Be Relied Upon as Public Disclosures.

        The Arrangement Agreement and the summary of its material terms and conditions in this proxy statement have been included to provide information about the terms and conditions of the Arrangement Agreement. They are not intended to provide any other public disclosure of factual information about US Gold, Minera Andes or any of their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the Arrangement Agreement are made by US Gold and Minera Andes only for the purposes of the Arrangement Agreement and were qualified and subject to certain limitations and exceptions agreed to by US Gold and Minera Andes in connection with the negotiation of the terms of the Arrangement Agreement. In particular, in your review of the representations and warranties contained in the Arrangement Agreement and described in this summary, it is important to bear in mind that the representations and warranties were made solely for the benefit of the parties to the Arrangement Agreement and were negotiated for the purpose of allocating contractual risk between the parties to the Arrangement Agreement rather than to establish matters as facts. The representations and warranties may also be subject to a contractual standard of "materiality" or "material adverse effect" different from those generally applicable to shareholders and reports and documents filed with the SEC and in some cases may be qualified by disclosures made by one party to the other, which are not necessarily reflected in the Arrangement Agreement. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this proxy statement, may have changed since the date of the Arrangement Agreement, and subsequent developments or new information qualifying a representation or warranty may have been included in or incorporated by reference into this proxy statement.

        For the foregoing reasons, the representations, warranties and covenants or any descriptions of them should not be read alone or relied upon as characterizations of the actual state of facts or conditions of US Gold, Minera Andes or any of their respective subsidiaries or affiliates. Instead, such provisions or descriptions should be read only in conjunction with the other information provided elsewhere in this proxy statement or incorporated by reference herein.


The Arrangement

        Under the terms of the Arrangement Agreement, US Gold, through Canadian Exchange Co., our newly-formed and indirect wholly-owned Canadian subsidiary, will acquire all of the issued and outstanding shares of Minera Andes. The Arrangement will involve an exchange of Minera Andes shares for exchangeable shares of Canadian Exchange Co., as described below. Holders of Minera Andes shares will receive that number of exchangeable shares equal to the number of Minera Andes shares so exchanged multiplied by the exchange ratio of 0.45. Each exchangeable share of Canada Exchange Co. will be exchangeable on a one-for-one basis for shares of US Gold common stock at any time at the option of the holder. In addition, all outstanding Minera Andes Options will become exercisable to acquire common stock of US Gold at a ratio of 0.45 of a share of US Gold common stock for each Minera Andes share underlying each such Minera Andes Option. The exercise price and vesting terms of the Minera Andes Options will remain unchanged. The Arrangement will be completed by way of the Plan of Arrangement, a copy of which is attached as Exhibit A to the

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Arrangement Agreement. Upon completion of the Arrangement, Minera Andes will be an indirect wholly-owned subsidiary of US Gold and the Minera Andes shares will no longer be publicly traded.


Closing

        It is currently anticipated that the Arrangement will close as soon as possible after all requisite approvals are obtained and all conditions have been satisfied, or where not prohibited by applicable law, waived. Either US Gold or Minera Andes may terminate the Arrangement Agreement if the Arrangement is not completed by April 30, 2012, or such later date as may be consented to by US Gold and Minera Andes.


Representations and Warranties

        The Arrangement Agreement contains a number of representations and warranties made by both US Gold and Minera Andes that are subject in some cases to exceptions and qualifications (including materiality qualifications and exceptions that would not reasonably be expected to have a "material adverse effect"). See also "—Definition of Material Adverse Effect" beginning on page 97 of this proxy statement. Although sometimes different in form and scope, the mutual representations and warranties in the Arrangement Agreement relate to, among other things:

    corporate existence, good standing and qualification to conduct business;

    corporate power and authority;

    due authorization, execution, delivery and validity of the Arrangement Agreement;

    capital structure and due authorization and issuance of capital stock and options;

    reporting issuer status in the U.S. and Canada;

    governmental and third-party consents or approvals in connection with the Arrangement;

    compliance with and absence of any conflict with or violation of organizational documents, material agreements, permits, laws or regulations, including stock exchange rules and regulations;

    absence of certain payments becoming due in connection with the Arrangement;

    securities filings and the absence of misstatements or omissions of material facts from such filings;

    financial statements;

    internal controls and compliance with Sarbanes-Oxley Act of 2002 and other applicable laws or regulations;

    value of current assets;

    undisclosed obligations or liabilities;

    absence of certain events or changes from June 30, 2011 to the date of the Arrangement Agreement;

    material contracts;

    agreements with directors and officers and significant shareholders;

    related party loans and indebtedness and related party transactions;

    claims, litigation and investigations;

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    employment and consulting agreements not at arm's length;

    title to assets and absence of liens;

    mineral properties, mining claims, concessions, permits, licenses, leases, surface rights and other similar documents or rights;

    properties not subject to condemnation or expropriation, royalties, rights or interests in favor of third parties;

    possession of and compliance with necessary permits, licenses, certificates and the like;

    technical reports;

    insurance;

    environmental matters;

    tax matters;

    agreements, judgments, injunctions and orders prohibiting or impairing the operation of business;

    broker's or finder's fees;

    entry into the voting agreement by directors and officers;

    formal valuation and fairness opinion related to the Arrangement;

    severance and termination payments;

    collective bargaining and other labor matters;

    employee benefit plans and related matters; and

    absence of status as an investment company.

        US Gold also makes representations and warranties relating to, among other things:

    due authorization and issuance of the exchangeable shares, the Series B Preferred Share and the shares of US Gold common stock to be issued upon the exchange of the exchangeable shares or exercise of the Minera Andes Options;

    rights, privileges, restrictions and conditions of the exchangeable shares and the Series B Preferred Share; and

    freely tradeable status of the exchangeable shares and the shares of US Gold common stock to be issued upon the exchange of the exchangeable shares.

        The representations and warranties in the Arrangement Agreement do not survive the effective time of the Arrangement (the "Effective Time").


Obligations to Effect the Arrangement

        US Gold, Minera Andes and Canadian Exchange Co. are obligated under the Arrangement Agreement to perform certain tasks in order to effect the Arrangement. In particular, each of US Gold and Minera Andes agreed, among other things, that it will:

    convene a meeting of its shareholders to obtain the necessary shareholder approvals to consummate the Arrangement as soon as practicable and use commercially reasonable efforts to ensure that their shareholder meetings occur on the same date;

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    use commercially reasonable efforts to solicit proxies to be voted at its shareholder meeting in favor of approvals related to the Arrangement, and seek the necessary shareholder approvals to consummate the Arrangement in accordance with any applicable laws, including MI 61-101 and the rules of the TSX and the NYSE, as applicable;

    prepare, in consultation with the other party, and file a proxy statement or information circular, as applicable, together with any other documents required by applicable laws, in connection with its shareholder meeting;

    timely provide such information to be included in the other party's proxy statement or information circular, as applicable, describing itself and its business;

    ensure that the information provided by it for inclusion in the other party's proxy statement or information circular, as applicable, does not contain any misrepresentation and indemnify and save harmless the other party and its affiliates from any loss resulting from any such misrepresentation;

    promptly cause its proxy statement or information circular, as applicable, and all other proxy materials to be mailed to its security holders and filed with applicable securities regulatory authorities;

    ensure that its proxy statement or information circular, as applicable, complies in all material respects with all applicable laws and does not contain any misrepresentation (other than with respect to the information provided by the other party as described above) and provide its shareholders with information in sufficient detail to permit them to form a reasoned judgment concerning the matters to be placed before them at its shareholder meeting;

    include a statement in its proxy statement or information circular, as applicable, that its board of directors recommends that its shareholders vote in favor of the shareholder approvals necessary to consummate the Arrangement and that each of its directors and executive officers intends to vote all of their shares of stock of such party in favor of such matters;

    take all such actions as may be required under applicable laws (and the Interim Order in the case of Minera Andes) in connection with the transactions contemplated by the Arrangement Agreement and the Arrangement;

    notify the other promptly of the receipt of any comments from the SEC or other securities regulatory authorities and respond reasonably promptly to comments from the staff of the SEC or other securities regulatory authorities; allow the other party a reasonable opportunity to review and comment on the various documents to be filed or delivered to its shareholders in connection with the Arrangement; and

    cooperate and use commercially reasonable efforts to take all reasonable actions, including the preparation of any applications for orders, registrations, consents, filings, circulars and approvals, required in connection with the Arrangement Agreement and the Arrangement and the preparation of any required documents, in each case as reasonably necessary to discharge their respective obligations under the Arrangement Agreement, the Arrangement, and the Plan of Arrangement, and to complete any of the transactions contemplated by the Arrangement Agreement, in accordance with applicable securities laws.

        US Gold agreed that it will:

    US Gold, Callco and Canadian Exchange Co. will execute and deliver the Exchangeable Share Support Agreement and the Voting and Exchange Trust Agreement along with Callco, Canadian Exchange Co. and the trustee (with respect to the Voting and Exchange Trust Agreement);

    issue to and deposit with the trustee the Series B Special Voting Preferred Stock;

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    use commercially reasonable efforts to cause the exchangeable shares of Canadian Exchange Co. to be issued in connection with the Arrangement and the shares of US Gold common stock to be issued on the exchange of the exchangeable shares to be approved for listing on the NYSE and the TSX prior to the Effective Time;

    prepare and file with the SEC a registration statement on Form S-4 (or other applicable form) to register under applicable securities laws the shares of US Gold common stock issuable from time to time after the Effective Time upon exchange of exchangeable shares and use its reasonable best efforts to cause such registration statement to become effective upon the consummation of the Arrangement and to maintain the effectiveness of such registration so long as any exchangeable shares remain outstanding;

    cooperate with and assist Minera Andes in seeking the Interim Order and the Final Order; and

    following receipt by Minera Andes of the Final Order and prior to the filing by Minera Andes of the Articles of Arrangement, cause to be delivered to a depositary sufficient exchangeable shares of Canadian Exchange Co. to satisfy the aggregate consideration payable to Minera Andes shareholders pursuant to the Plan of Arrangement.

        Minera Andes agreed that it will:

    promptly advise US Gold of (and provide US Gold with) any written notice of dissent or purported exercise (or withdrawal) by any Minera Andes shareholder of dissent rights received by Minera Andes in relation to the Arrangement and any written communications sent by or on behalf of Minera Andes to any Minera Andes shareholder exercising or purporting to exercise dissent rights in relation to the Arrangement;

    consult with US Gold on any material to be filed with the Court and ensure that all such materials are consistent in all material respects with the terms of the Arrangement Agreement and the Plan of Arrangement;

    file and pursue an application with the Court for an Interim Order with the provisions set forth in the Arrangement Agreement and otherwise in form and substance reasonably satisfactory to US Gold as soon as reasonably practicable after the later of (i) 10 days after the filing of this proxy statement and (ii) all comments of the SEC, if any, on this proxy statement being resolved;

    advise the Court of US Gold's intention to rely upon Section 3(a)(10) of the Securities Act in respect of the distribution of the exchangeable shares of Canadian Exchange Co. to Minera Andes shareholders in connection with the Arrangement;

    diligently pursue and take all steps necessary or desirable to have the hearing before the Court of the application for the Final Order (in form and substance reasonably acceptable to US Gold) held as soon as reasonably practicable upon obtaining the Interim Order and requisite US Gold and Minera Andes shareholder approvals to consummate the Arrangement; and

    file the articles of arrangement consummating the Arrangement no later than the fifth business day after the satisfaction or waiver of the conditions to closing set forth in the Arrangement Agreement.


Conduct of the Business of US Gold and Minera Andes Pending the Completion of the Arrangement and Other Covenants

        Under the Arrangement Agreement, US Gold and Minera Andes have agreed that, except as expressly contemplated by the Arrangement Agreement or with the other party's written consent, US Gold and Minera Andes will conduct their respective businesses in the ordinary course consistent with

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past practice and in a manner consistent with industry practice and in compliance, in all material respects, with applicable laws and use commercially reasonable efforts to preserve intact their present business organizations, goodwill, and material rights and franchises, keep the services of their officers and employees and preserve their relationships with their suppliers and others having business dealings with them. Further, each of US Gold and Minera Andes has agreed, subject to various exceptions, limitations and conditions set forth in the Arrangement Agreement, among other things, not to:

    declare or pay dividends or make other distributions in respect of its capital stock;

    issue, sell, or redeem or otherwise acquire any of its own securities or other ownership interests;

    accelerate the vesting of any unvested stock options or accelerate the release or expiry date of any hold period relating to its stock or modify the terms of any stock option;

    amend or propose to amend its organizational documents;

    enter into or materially modify or terminate any swap or hedging agreement;

    change existing accounting practices, methods and principles;

    incur any material indebtedness for borrowed money or enter into a guarantee with respect to indebtedness for borrowed money;

    enter into any material operating lease except in the ordinary course of business or create any mortgages, liens, security interests, claims, encumbrances or the like on its property or assets;

    sell, lease, license, encumber any material assets, or acquire any assets or make any investment in excess of $2,000,000;

    settle or compromise any litigation where the amount paid exceeds $200,000;

    expend or commit to expend any amounts with respect to capital expenditures in excess of $2,000,000 individually or $3,500,000 in the aggregate;

    other than in the ordinary course of business consistent with past practice, (i) increase the compensation or benefits, or otherwise extend, expand or enhance the engagement, employment or any related rights, of; (ii) accelerate the payment or vesting of any such benefits to; or (iii) adopt, enter into or take any action with respect to any employee benefit plan, policy, or employment, severance, change of control or termination agreement providing for any form of benefits or other compensation to, any former, present or future director, officer, employee or consultant;

    make any loan to any present or future officer, employee, consultant or director;

    enter into any agreement or arrangement that limits or otherwise restricts, or that would after the Effective Time, limit or restrict, it from competing in any manner in any line of business in any geographic area;

    enter into any agreement that has the effect of creating a joint venture, partnership, or similar relationship;

    enter into, terminate, fail to renew, or waive any material provision of, exercise any material option or relinquish any material contractual rights under, or modify in any material respect, any material contract; or

    agree to, or make any commitment to, take or authorize, any of the foregoing, or allow any of its subsidiaries to do so.

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        In addition, each of US Gold and Minera Andes has agreed, subject to various exceptions, limitations and conditions set forth in the Arrangement Agreement, among other things, that it will:

    use commercially reasonable efforts to cause its current insurance policies not to be cancelled;

    promptly advise the other party in writing of:

    any event, condition or circumstance that might be reasonably expected to cause any representation or warranty of such party contained in the Arrangement Agreement to be untrue or inaccurate;

    any material adverse effect on such party or any change, effect, event or occurrence which would be reasonably expected to have a material adverse effect on such party; and

    any material breach by such party of any obligation, covenant or agreement contained in the Arrangement Agreement;

    use its commercially reasonable efforts to cooperate with the other parties to the Arrangement Agreement in connection with each such party's performance of its obligations under the Arrangement Agreement and do all such other commercially reasonable acts and things as may be reasonably necessary or reasonably desirable in order to consummate and make effective, as soon as reasonably practicable, the Arrangement and the other transactions contemplated by the Arrangement Agreement;

    upon a request of the other party and subject to applicable laws, effect only such reorganizations of the business, operations and assets of itself and its subsidiaries or such other transactions as may requested by the other party, acting reasonably, and co-operate with the other party and its advisors in order to determine the nature of any such reorganization that might be undertaken and the manner in which it might most effectively be undertaken; and

    not agree to, or make any commitment to, take or authorize, any of actions in violation the foregoing, or allow any of its subsidiaries to do so.

        Under the Arrangement Agreement, each of US Gold and Canadian Exchange Co. also agreed that, subject to various exceptions, limitations and conditions set forth in the Arrangement Agreement and except as expressly contemplated by the Arrangement Agreement or with Minera Andes' written consent, that it will:

    make or give any necessary application or notice to the TSX and the NYSE for approval of the Arrangement, for approval for listing and posting for trading on the TSX and the NYSE the shares of US Gold common stock issuable upon the exchange of the exchangeable shares to be issued pursuant to the Arrangement or upon exercise of Minera Andes Options, and for the listing and posting for trading of such shares as of the Effective Time, and for approval for listing and posting for trading on the TSX the exchangeable shares, and for the listing and posting for trading of such shares as of the Effective Time;

    carry out the terms of the Final Order applicable to US Gold or Canadian Exchange Co.; and

    make joint elections with eligible holders in respect of the dispositions of their Minera Andes shares pursuant to Section 85 of the Income Tax Act (Canada) (and any similar provision of any provincial tax legislation) in accordance with the procedures and within the time limits set out in the Plan of Arrangement (the agreed amount under such joint elections shall be determined by each eligible holder in its sole discretion within the limits set out in the Income Tax Act (Canada)).

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        Under the Arrangement Agreement, Minera Andes has also agreed that, subject to various exceptions, limitations and conditions set forth in the Arrangement Agreement and except as expressly contemplated by the Arrangement Agreement or with US Gold's written consent, that it will:

    make or give any necessary application or notice to the TSX for approval of the Arrangement and to delist the Minera Andes shares following the completion of the Arrangement;

    make or give any necessary or desirable application or notice to applicable securities regulatory authorities to cause Minera Andes to cease to be a reporting issuer following the completion of the Arrangement; and

    carry out the terms of the Final Order applicable to Minera Andes.


Non-Solicitation; Acquisition Proposals

        Subject to the exceptions described below, US Gold and Minera Andes have agreed that neither US Gold nor Minera Andes nor their subsidiaries will, directly or indirectly, through any of its or its subsidiaries' officers, directors, employees, investment bankers, representatives or agents:

    solicit, assist, initiate, knowingly encourage or otherwise facilitate (including by way of furnishing information or entering into any form of agreement, arrangement or understanding) any inquiries, proposals or offers relating to, or that would reasonably be expected to lead to, any acquisition proposal;

    engage in, continue or otherwise participate in any discussions or negotiations with any person regarding, or that would reasonably be expected to lead to, any acquisition proposal;

    furnish to any person any information with respect to, or otherwise cooperate in any way with, or assist or participate in, facilitate or knowingly encourage, any effort or attempt by any other person to make an acquisition proposal, or that would reasonably be expected to lead to an acquisition proposal;

    approve, accept, endorse or recommend, or propose publicly to accept, approve, endorse or recommend any acquisition proposal;

    accept or enter into or publicly propose to accept or enter into, any letter of intent, agreement (including a confidentiality or standstill agreement), understanding or arrangement, oral or written, in respect of, that is intended to result in, or would reasonably be expected to lead to an acquisition proposal; or

    withdraw, modify, qualify or change any recommendation of its board of directors to its shareholders regarding the Arrangement.

        US Gold and Minera Andes must cease any existing discussions or negotiations with any persons (other than with any other party to the Arrangement Agreement) with respect to any potential acquisition proposal. We refer to the party (either Minera Andes or US Gold) that receives an acquisition proposal as the Target Party and the other party as the Other Party. The Target Party shall immediately notify the Other Party of any acquisition proposal or of any inquiry, proposal or request received by it for non-public information relating to the Target Party or any of its subsidiaries or joint ventures in connection with an acquisition proposal or for access to the properties, books or records of the Target Party or any of its subsidiaries or joint ventures by any person or entity that informs any officer or director of such party or any of its subsidiaries that it is considering making, or has made, an acquisition proposal. The Target Party will be responsible for any breach of its obligations related to acquisition proposals and solicitations by its officers, directors, agents or representatives.

        However, a Target Party may, in response to an acquisition proposal and prior to its shareholders approving the matters necessary to consummate the Arrangement, (i) engage in discussions or

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negotiations with, or respond to enquiries from, any person making what the board of directors of the Target Party has determined in good faith to be or could reasonably be expected to result in a superior proposal, and (ii) withdraw, modify, qualify or change the recommendation of its board of directors to its shareholders regarding the Arrangement if the Target Party receives a superior proposal, subject to the conditions below. A Target Party, may, prior to its shareholders approving the matters necessary to consummate the Arrangement, provide non-public information to a party who proposes an acquisition proposal only if such acquisition proposal is a superior proposal or could reasonably be expected to lead to a superior proposal and the Target Party has entered into or then enters into a confidentiality agreement with such person that is substantially similar or not less onerous to that then in effect between Minera Andes and US Gold and the Target Party provides the Other Party with a list and copies of all information provided to such person not previously provided to the Other Party. The Target Party must also promptly send a copy of any such confidentiality agreement to the Other Party. The foregoing does not relieve a party from its obligations to proceed to call and hold the applicable shareholders' meeting and to hold the vote on the matters necessary to consummate the Arrangement.

        If the board of directors of a Target Party determines that an acquisition proposal is a superior proposal, it must give immediate notice of such determination to the Other Party, provide the Other Party with a true and complete copy of the superior proposal and give the Other Party not less than five business days' advance notice of any action to be taken by it in response to the superior proposal. During such five business day period, the Target Party may not accept, recommend, approve or enter into any agreement to implement such superior proposal and the Other Party has the right, but not the obligation, to offer to amend the terms of the Arrangement Agreement such that the acquisition proposal would no longer constitute a superior proposal. If the Target Party's board of directors determines that, as a result of the amended offer, the acquisition proposal is no longer a superior proposal, it must not accept, recommend, approve or enter into any agreement to implement such acquisition proposal and it must enter into an amended agreement with the Other Party reflecting the amended offer. If the Target Party's board of directors continues to believe in good faith, after consultation with its financial advisers and outside counsel, that such superior proposal remains a superior proposal and therefore rejects the amended offer, the Target Party and its board of directors may approve, recommend, accept or enter into an agreement with respect to the superior proposal, provided that it first terminates the Arrangement Agreement and pays the termination fee to the Other Party.

        Under the Arrangement Agreement:

    an "acquisition proposal" means, with respect to Minera Andes or US Gold, as the case may be, other than the transactions contemplated by the Arrangement Agreement and other than any transaction involving the other party and/or one or more of its wholly-owned subsidiaries (and/or in the case of Minera Andes, its 49% interest in MSC), any offer, proposal, inquiry or expression of interest from any third person or group of third persons, whether or not in writing and whether or not delivered to the shareholders of the Target Party, after the date of the Arrangement Agreement relating to: (i) any acquisition, purchase, sale, transfer, lease, partnership, joint venture, earn-in right, option to acquire, direct or indirect, involving assets of the Target Party and/or one or more of its subsidiaries that, individually or in the aggregate, constitute 15% or more of the consolidated assets of the Target Party and its subsidiaries, taken as a whole, or which contribute 15% or more of the consolidated revenues of the Target Party and its subsidiaries, taken as a whole; (ii) any, direct or indirect, acquisition, purchase or option to acquire or purchase from the Target Party or its subsidiaries (x) 15% or more of any voting or equity securities of the Target Party, or (y) all of the voting or equity securities of any one or more of the Target Party's subsidiaries that, individually or in the aggregate, constitute 15% or more of the consolidated assets of the Target Party and its subsidiaries, taken as a whole, or which contribute 15% or more of the consolidated revenues of the Target Party and its

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      subsidiaries, taken as a whole; (iii) any arrangement, merger, amalgamation, consolidation, business combination, liquidation or dissolution or other similar transaction involving the Target Party or any one or more of its subsidiaries (or in the case of Minera Andes, its 49% interest in MSC) that, individually or in the aggregate, constitute 15% or more of the consolidated assets of the Target Party and its subsidiaries, taken as a whole, or which contribute 15% or more of the consolidated revenues of the Target Party and its subsidiaries, taken as a whole; (iv) any take-over bid, tender offer, exchange offer, reorganization or recapitalization or similar transaction that, if consummated, would result in any person, or group of persons or securityholders of such person(s) beneficially owning, directly or indirectly, (x) 15% or more of any class of voting or equity securities (including based on securities convertible, exchangeable or exercisable for voting or equity securities) of the Target Party or (y) the Target Party's subsidiaries that, individually or in the aggregate, constitute 15% or more of the consolidated assets of the Target Party and its subsidiaries, taken as a whole, or which contribute 15% or more of the consolidated revenues of the Target Party and its subsidiaries, taken as a whole; or (v) any combination of the foregoing. For the purposes of this definition, in the case of Minera Andes, for the purpose of calculating consolidated assets and revenues the term "subsidiaries" includes Minera Andes' 49% interest in MSC; and

    a "superior proposal" means a bona fide acquisition proposal made in writing before the Target Party's shareholders approve the matters necessary to consummate the Arrangement: (i) to purchase or otherwise acquire, directly or indirectly, all of the shares of the Target Party (other than those held by the person making the acquisition proposal) on the same terms and conditions to all Target Party shareholders (other than the person making such acquisition proposal and any joint actor and any of their respective affiliates) or all or substantially all of the assets of the Target Party and its subsidiaries taken as a whole; (ii) that is reasonably capable of being completed in accordance with its terms and without undue delay, taking into account all legal, financial, regulatory and other aspects of such proposal and the person making such proposal; (iii) that is not subject to any financing condition; (iv) that in respect of which any required financing to complete such acquisition proposal has been demonstrated to be available to the satisfaction of the Target Party's board of directors, acting in good faith (after receipt of advice from its financial advisors and outside legal counsel); (v) that is not subject to a due diligence and/or access condition; (vi) that did not result from a breach of non-solicitation provisions of the Arrangement Agreement by the Target Party, its subsidiaries or its representatives; and (vii) in respect of which the Target Party's board of directors determines in good faith (upon recommendation of the Target Party's special committee and after receipt of advice from outside legal counsel and financial advisors) that failure to recommend such acquisition proposal to the Target Party shareholders would be inconsistent with its fiduciary duties under applicable law and that such acquisition proposal would, taking into account all of the terms and conditions of such acquisition proposal, if consummated in accordance with its terms (but not assuming away any risk of non-completion), result in a transaction more favorable to the Target Party shareholders from a financial point of view than the Arrangement (including any adjustments to the terms and conditions of the Arrangement proposed pursuant to the Arrangement Agreement).

        Nothing contained in the Arrangement Agreement prohibits the boards of directors of any party to the Arrangement Agreement from withdrawing, modifying, qualifying or changing its recommendation to its shareholders in respect of the Arrangement prior to its shareholders approving the matters necessary to consummate the Arrangement, if (i) such party's board of directors determines, in good faith (upon the recommendation of its special committee and after receiving advice of outside legal counsel), that such withdrawal, modification, qualification or change is necessary for the board of directors to act in a manner consistent with its fiduciary duties under applicable laws, and (ii) such party's board of directors has consulted with its independent financial advisor and such financial advisor

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has confirmed in writing that it is unable to render a fairness opinion in respect of the Arrangement as of such time based on the facts and circumstances then existing; provided that not less than 48 hours before the board of directors considers any proposal in respect of any such withdrawal, modification, qualification or change, such party shall give the other party written notice of such proposal and promptly advise the other party of the proposed consideration of such proposal. The foregoing does not relieve a party from its obligations to proceed to call and hold the applicable shareholders' meeting and to hold the vote on the matters necessary to consummate the Arrangement.


Compositions of the Board of Directors of US Gold and Minera Andes

Composition of the Board of Directors of US Gold

        Prior to the Effective Time, the current Minera Andes board of directors is entitled to recommend to the Nominating Committee nominees to fill, effective immediately following the Effective Time, any vacancies on the Board, whether such vacancies are the result of the resignation of any member of the Board prior to the Effective Time or an increase in the size of the Board, such that such nominees, appointed or elected, would constitute at least 50% of the directors of the Board immediately following the Effective Time. In the event that the Nominating Committee determines, in its sole discretion, that any person nominated by the current Minera Andes board of directors pursuant to the foregoing should not be recommended for election or appointment to the Board, then the current Minera Andes board of directors shall be entitled to recommend to the Nominating Committee such other nominees that are acceptable to the Nominating Committee, acting reasonably.

Composition of the Board of Directors of Minera Andes

        Minera Andes must use commercially reasonable efforts to assist in effecting the resignations of each member of the Minera Andes board of directors, and causing them to be replaced by persons nominated by US Gold effective as at the Effective Time, provided that US Gold (i) enters into mutual releases with Minera Andes and each such director, and (ii) maintains certain directors' and officers' liability insurance coverage.


Treatment of Outstanding Minera Andes Stock Options

        US Gold and Minera Andes have agreed to take all necessary action to ensure that following the Effective Time all Minera Andes Options will be converted for options to purchase shares of US Gold common stock upon the terms and conditions set forth in the Plan of Arrangement and US Gold shall take commercially reasonable efforts to obtain any regulatory and stock exchange approvals that are necessary for such purpose and to ensure that the shares of US Gold common stock received on the exercise of such options will be listed on the TSX and the NYSE and will be freely tradable in the United States and Canada.


Conditions to the Consummation of the Arrangement

Conditions to the Obligations of US Gold

        US Gold's obligations to effect the Arrangement are subject to the satisfaction or waiver at or prior to the Effective Time of the following conditions, among others:

    all representations and warranties of Minera Andes contained in the Arrangement Agreement shall be true and correct in all respects except for such inaccuracies which, individually or in the aggregate, do not constitute and would not reasonably be expected to constitute a material adverse effect with respect to Minera Andes;

    Minera Andes shall have performed or complied in all material respects with all of its covenants required to be performed at or prior to the Effective Time;

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    since September 22, 2011, there shall not have occurred any material adverse effect in respect of Minera Andes; and

    holders of not more than 5% of the Minera Andes shares shall have exercised their rights of dissent in respect of the Arrangement.

        Unless precluded from doing so by applicable law, we may, in our sole discretion, waive any of these conditions in whole or in part.

Conditions to the Obligations of Minera Andes

        Minera Andes' obligations to effect the Arrangement are subject to the satisfaction or waiver at or prior to the Effective Time of the following conditions, among others:

    all representations and warranties of US Gold contained in the Arrangement Agreement shall be true and correct in all respects except for such inaccuracies which, individually or in the aggregate, do not constitute and would not reasonably be expected to constitute a material adverse effect with respect to US Gold;

    US Gold shall have performed or complied in all material respects with all of its covenants required to be performed at or prior to the Effective Time; and

    since September 22, 2011, there shall not have occurred any material adverse effect in respect of US Gold.

        Unless precluded from doing so by applicable law, Minera Andes may, in its sole discretion, waive any of these conditions in whole or in part.

Mutual Conditions to the Obligations of US Gold and Minera Andes

        US Gold's and Minera Andes' obligations to effect the Arrangement are subject to the satisfaction or waiver at or prior to the Effective Time of the following conditions:

    the Interim Order shall have been granted and shall not have been set aside or modified in a manner unacceptable to US Gold or Minera Andes;

    the Arrangement Proposals set forth in this proxy statement shall have been approved by the US Gold shareholders;

    the Arrangement shall have been approved by the Minera Andes shareholders;

    the Final Order shall have been granted and shall not have been set aside or modified in a manner unacceptable to US Gold or Minera Andes;

    the articles of arrangement in respect of the Arrangement and all necessary related documents shall have been accepted for filing together with the Final Order in accordance with section 193 of the ABCA;

    no order, decree or judgment shall have been issued, no law shall have been enacted and there shall have been no action taken under applicable law, in any case that makes illegal or otherwise restrains, enjoins or prohibits the Arrangement;

    the TSX and the NYSE shall have approved the listing and posting for trading of the shares of US Gold common stock issuable upon exchange of the exchangeable shares to be issued pursuant to the Arrangement and the exercise of the Minera Andes Options, and the TSX shall have approved the listing and posting for trading of the exchangeable shares, subject to the filing of required documents which cannot be filed prior to the Effective Time;

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    no material proceeding by a governmental entity shall be pending: (i) seeking to prohibit or limit in any material respect US Gold's ability to vote, receive dividends with respect to or otherwise exercise ownership rights with respect to the stock of Minera Andes or any of its material subsidiaries or joint ventures; (ii) which would materially and adversely affect the right of Minera Andes and its subsidiaries and joint ventures, taken as a whole, to own their material assets or operate their business; or (iii) seeking to compel US Gold or Minera Andes or any of their respective subsidiaries to dispose of or hold separate any material assets as a result of the Arrangement or the other transactions contemplated by the Arrangement Agreement;

    the registration statement covering the shares of US Gold common stock to be issued upon exchange of the exchangeable shares shall have been cleared to go effective by the SEC under the Securities Act; and

    the Arrangement Agreement shall not have been terminated in accordance with its terms.


Definition of Material Adverse Effect

        Many of the representations and warranties in the Arrangement Agreement are qualified by "material adverse effect." In addition, there are separate standalone conditions to the completion of the Arrangement relating to the absence of any material adverse effect in respect of the other party.

        For purposes of the Arrangement Agreement, "material adverse effect" with respect to either Minera Andes or US Gold means any change, condition, circumstance, effect, event, fact or development that individually or in the aggregate with other changes, conditions, circumstances, effects, events, facts or developments (a) is or would reasonably be expected to be material and adverse to the business, affairs, properties, assets (tangible or intangible), liabilities and obligations (including contingent liabilities and obligations), capitalization, operations, results of operations or condition (financial or otherwise) of such party and its subsidiaries (and in the case of Minera Andes, its 49% interest in MSC) taken as a whole; or (b) prevents or would reasonably be expected to prevent such party from consummating the transactions contemplated by the Arrangement, provided that any change, condition, circumstance, effect, event, fact or development resulting from or arising in connection with any of the following shall not constitute a material adverse effect: (i) any change in general political, financial or economic conditions, including in Canada, the United States, Mexico, Central America or South America (provided that such conditions do not have a materially disproportionate effect on such party relative to comparable exploration and/or mining companies); (ii) any change in the state of securities, currency, exchange or commodities markets in general or changes in commodity prices or currency exchange rates (provided that it does not have a materially disproportionate effect on such party relative to comparable exploration and/or mining companies); (iii) changes affecting the mining industry in general and not having a disproportionate effect on such party relative to comparable exploration and/or mining companies; (iv) any change in applicable accounting standards or in law or in the interpretation, application or non-application of law by any governmental entity; (v) any change in regional, national or international, political or social conditions (including, the engagement by any country in hostilities, whether commenced before or after the date hereof, and whether or not pursuant to the declaration of a national emergency or war), or the occurrence of any natural disaster or military, militant or terrorist attack (or any escalation or worsening thereof) (provided that such conditions do not have a materially disproportionate effect on such party relative to comparable exploration and/or mining companies); (vi) any failure to meet any estimates or expectations regarding its revenues, earnings or other financial performance or results of operations (provided that the causes of such failure may be taken into account in determining whether a material adverse effect has occurred); (vii) the announcement of the execution of the Arrangement Agreement and the transactions contemplated thereby; and (viii) any action taken by such party or its subsidiaries that is required pursuant to the Arrangement Agreement (excluding any obligation to act in the ordinary course of business) or any action taken (or omitted to be taken) by such party at the

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written request of the other party. In no event shall a change in the trading price of a party's equity securities by itself be deemed to constitute a material adverse effect (provided that the causes of such change may be taken into account in determining whether a material adverse effect has occurred).


Termination of the Arrangement Agreement

        The Arrangement Agreement may be terminated at any time prior to the Effective Time in each of the following circumstances, among others:

    by the mutual agreement of US Gold and Minera Andes;

    by either US Gold or Minera Andes if

    the Arrangement has not become effective on or before April 30, 2012, provided that a party may not terminate the Arrangement Agreement if its breach of the Arrangement Agreement or any related transaction document caused or resulted in the failure of the Arrangement to become effective by April 30, 2012;

    the US Gold shareholders and holders of the 2007 Exchangeable Shares do not approve the Arrangement Proposals;

    the Minera Andes shareholders do not approve the Arrangement;

    if any law makes the consummation of the Arrangement illegal or otherwise prohibited, and such law has become final and nonappealable; or

    if any condition to the obligation of the terminating party to consummate the Arrangement as set forth in the Arrangement Agreement becomes incapable of satisfaction prior to April 30, 2012 unless the failure to satisfy any such condition is a result of a breach of the Arrangement Agreement or any related transaction document by the party seeking to terminate the Arrangement Agreement;

    by US Gold, any time prior to the Effective Time, if

    the board of directors of Minera Andes has withdrawn, amended or modified in a manner adverse to US Gold its approval or recommendation of the Arrangement or fails to publicly reaffirm its recommendation of the Arrangement within five business days after having been requested in writing by US Gold to do so (unless as a result of a breach by US Gold of the Arrangement Agreement which breach would give rise to the failure of a closing condition to be met);

    Minera Andes has entered into a definitive agreement with respect to a superior proposal pursuant to the Arrangement Agreement;

    Minera Andes or its board of directors publicly announces its intention to change its approval or recommendation of the Arrangement or to enter into a definitive agreement with respect to a superior proposal;

    the Board approves and authorizes US Gold to enter into a binding written agreement providing for the implementation of a superior proposal, but only so long as: (A) the US Gold shareholders have not yet approved the Arrangement Proposals; (B) US Gold has not breached any of its non-solicitation obligations under the Arrangement Agreement with respect to the superior proposal or any inquiry or proposal by the person making such superior proposal; (C) the Board has determined in good faith, after receiving advice from an independent financial adviser and its outside legal counsel, that such agreement constitutes a superior proposal; and (D) US Gold pays to Minera Andes the termination fee in accordance with the Arrangement Agreement simultaneously with such termination;

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      Minera Andes breaches the Arrangement Agreement such that would give rise to the failure of a closing condition to be met, subject to a 15-business day cure period, and so long as US Gold is not in breach such that would give rise to the failure of a closing condition to be met;

      Minera Andes has approved or recommended an acquisition proposal or entered into a binding written agreement in respect of an acquisition proposal except as expressly permitted by the Arrangement Agreement;

      there has been any material adverse effect with respect to Minera Andes since September 22, 2011; or

      the meeting of Minera Andes shareholders to approve the Arrangement is cancelled, adjourned or postponed except as expressly permitted by the Arrangement Agreement or as agreed by US Gold in writing; and

    by Minera Andes, any time prior to the Effective Time, if

    the Board has withdrawn, amended or modified in a manner adverse to Minera Andes its approval or recommendation of the Arrangement or fails to publicly reaffirm its recommendation of the Arrangement within five business days after having been requested in writing by Minera Andes to do so (unless as a result of a breach by Minera Andes of the Arrangement Agreement which breach would give rise to the failure of a closing condition to be met);

    US Gold has entered into a definitive agreement with respect to a superior proposal pursuant to the Arrangement Agreement;

    US Gold or its Board publicly announces its intention to change its approval or recommendation of the Arrangement or to enter into a definitive agreement with respect to a superior proposal;

    the board of directors of Minera Andes approves and authorizes Minera Andes to enter into a binding written agreement providing for the implementation of a superior proposal, but only so long as: (A) the Minera Andes shareholders have not yet approved the Arrangement; (B) Minera Andes has not breached any of its non-solicitation obligations under the Arrangement Agreement with respect to the superior proposal or any inquiry or proposal by the person making such superior proposal; (C) the board of directors of Minera Andes has determined in good faith, after receiving advice from an independent financial adviser and its outside legal counsel, that such agreement constitutes a superior proposal; and (D) Minera Andes pays to US Gold the termination fee in accordance with the Arrangement Agreement simultaneously with such termination;

    US Gold breaches the Arrangement Agreement such that would give rise to the failure of a closing condition to be met, subject to a 15-business day cure period, and so long as Minera Andes is not in breach such that would give rise to the failure of a closing condition to be met;

    US Gold has approved or recommended an acquisition proposal or entered into a binding written agreement in respect of an acquisition proposal except as expressly permitted by the Arrangement Agreement;

    there has been any material adverse effect with respect to US Gold since September 22, 2011; or

    the Meeting is cancelled, adjourned or postponed except as expressly permitted by the Arrangement Agreement or as agreed by Minera Andes in writing.

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Termination Fees

        Minera Andes has agreed to pay a termination fee of $20,100,000 (representing approximately 3% of its market capitalization as of market closing on September 1, 2011) to US Gold if any one of the following events occurs:

    Minera Andes terminates the Arrangement Agreement in connection with a superior proposal;

    US Gold terminates the Arrangement Agreement because:

    Minera Andes' board of directors changes its approval or recommendation of the Arrangement or fails to publicly reaffirm its recommendation of the Arrangement;

    Minera Andes enters into a definitive agreement with respect to a superior proposal;

    Minera Andes or its board of directors publicly announces its intention to change its approval or recommendation of the Arrangement or to enter into a definitive agreement with respect to a superior proposal;

    Minera Andes intentionally breaches the Arrangement Agreement, which breach gives rise to the failure of a closing condition to be met, subject to a 15-business day cure period;

    Minera Andes approves or recommends, or entered into a binding written agreement in respect of, an acquisition proposal not expressly permitted by the Arrangement Agreement; or

    the meeting of Minera Andes shareholders to approve the Arrangement is cancelled, adjourned or postponed in a manner not expressly permitted by the Arrangement Agreement or agreed to by US Gold; or

    either party terminates the Arrangement Agreement because the Minera Andes shareholders did not approve the Arrangement and (i) an acquisition proposal or an intention to make an acquisition proposal was publicly announced prior to the meeting of the Minera Andes shareholders, and (ii) Minera Andes enters into a definitive agreement or completes a transaction involving (x) 50% or more of the consolidated assets of Minera Andes and its subsidiaries or assets which contribute 50% or more of the consolidated revenues of Minera Andes and its subsidiaries or (y) 50% or more of the voting or equity securities of Minera Andes or all of the voting or equity securities of any one or more of its subsidiaries (including its 49% interest in MSC) that, individually or in the aggreage, constitute 50% or more of the consolidated assets of Minera Andes and its subsidiaries or which contribute 50% or more of the consolidated revenues of Minera Andes and its subsidiaries, within 12 months of the termination of the Arrangement Agreement.

        US Gold has agreed to pay a termination fee of $25,600,000 (representing approximately 3% of its market capitalization as of market closing on September 1, 2011) to Minera Andes if any one of the following events occurs:

    US Gold terminates the Arrangement Agreement in connection with a superior proposal;

    Minera Andes terminates the Arrangement Agreement because:

    the Board changes its approval or recommendation of the Arrangement Proposals or fails to publicly reaffirm its recommendation of the Arrangement;

    US Gold enters into a definitive agreement with respect to a superior proposal;

    US Gold or the Board publicly announces its intention to change its approval or recommendation of the Arrangement or to enter into a definitive agreement with respect to a superior proposal;

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      US Gold intentionally breaches the Arrangement Agreement, which breach gives rise to the failure of a closing condition to be met, subject to a 15-business day cure period;

      US Gold approves or recommends, or entered into a binding written agreement in respect of, an acquisition proposal not expressly permitted by the Arrangement Agreement; or

      the Meeting is cancelled, adjourned or postponed in a manner not expressly permitted by the Arrangement Agreement or agreed to by Minera Andes; or

    either party terminates the Arrangement Agreement because the US Gold shareholders did not approve the Arrangement Proposals and (i) an acquisition proposal or an intention to make an acquisition proposal was publicly announced prior to the Meeting, and (ii) US Gold enters into a definitive agreement or completes a transaction involving (x) 50% or more of the consolidated assets of US Gold and its subsidiaries or assets which contribute 50% or more of the consolidated revenues of US Gold and its subsidiaries or (y) 50% or more of the voting or equity securities of US Gold or all of the voting or equity securities of any one or more of its subsidiaries that, individually or in the aggreage, constitute 50% or more of the consolidated assets of US Gold and its subsidiaries or which contribute 50% or more of the consolidated revenues of US Gold and its subsidiaries, within 12 months of the termination of the Arrangement Agreement.

        In addition, each party has agreed to pay the other party a $4,000,000 "expenses fee" if the Arrangement Agreement is terminated by a party as a result of an unintentional breach of the representations, warranties or covenants of the other party such that a closing condition would not be met.

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STRUCTURE OF THE ARRANGEMENT

Description of the Structure of the Arrangement

        The Arrangement has been structured with the intent to make it possible to provide favorable Canadian tax treatment to Minera Andes' Canadian shareholders. In order to effect the Arrangement, holders of common shares of Minera Andes will receive exchangeable shares of Canadian Exchange Co., a wholly-owned indirect subsidiary of US Gold, pursuant to the Arrangement. The exchangeable shares are intended to provide the holders of the exchangeable shares with the economic and voting rights that are, as nearly as practicable, equivalent to those of a share of common stock of US Gold. The issuance of exchangeable shares of Canadian Exchange Co. may result in a more favorable Canadian tax treatment to Minera Andes' Canadian shareholders than if US Gold shares were issued. US Gold believes that the expectation of favorable Canadian tax treatment will encourage more Minera Andes shareholders to vote in favor of the Arrangement and therefore increases the probability of successfully completing the Arrangement.


Description of Exchangeable Shares

        The exchangeable shares are exchangeable on a one-for-one basis at any time at the option of the holder of the exchangeable shares into shares of US Gold common stock. The following is a summary description of the material provisions of the rights, privileges, restrictions and conditions attaching to the exchangeable shares. This summary is qualified in its entirety by reference to the Plan of Arrangement and the Voting and Exchange Trust Agreement.

Retraction of Exchangeable Shares by Holders

        Subject to applicable law and the due exercise by either us or Callco of our of its retraction call right, holders of exchangeable shares will be entitled at any time to retract (i.e., to require Canadian Exchange Co. to redeem) any or all exchangeable shares held by them and to receive in exchange one share of common stock of US Gold, plus the dividend amount, which is the full amount of all declared and unpaid dividends on the exchangeable shares and all dividends and distributions declared on a share of common stock of US Gold that have not yet been declared or paid on the exchangeable shares, if any. Holders of exchangeable shares may effect a retraction by presenting to Canadian Exchange Co. or its transfer agent the certificate(s) representing the exchangeable shares the holder desires to be redeemed by Canadian Exchange Co., together with such other documents and instruments as may be required under the ABCA, the Articles of Incorporation of Canadian Exchange Co. or by its transfer agent, and a duly executed retraction request specifying that the holder desires to have the number of retracted shares specified therein redeemed by Canadian Exchange Co. A holder of retracted shares may withdraw its retraction request, by written notice to Canadian Exchange Co. before the close of business on the business day immediately preceding the retraction date, in which case the retraction request will be null and void and the revocable offer constituted by the retraction request will be deemed to have been revoked.

        Upon receipt by Canadian Exchange Co. or its transfer agent of a retraction request and certificate(s) representing the exchangeable shares to be redeemed, Canadian Exchange Co. will immediately provide notice of such request to us and Callco. Instead of Canadian Exchange Co. redeeming the retracted shares, and provided that the retraction request is not revoked by the holder in the manner described above, we will have the right to purchase, and to the extent the right is not exercised by us, Callco will have the right to purchase, all but not less than all of the shares covered by the retraction request, which we refer to as our retraction call right. See the section entitled "—Call Rights" beginning on page 104 of this proxy statement.

        If, as a result of solvency requirement or other provisions of applicable law, Canadian Exchange Co. is not permitted to redeem all exchangeable shares tendered by a retracting holder and

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neither we nor Callco has exercised its retraction call right, Canadian Exchange Co. will redeem up to the maximum permissible number of exchangeable shares tendered by the holder. We or Callco will be required to purchase any exchangeable shares not redeemed by Canadian Exchange Co. in exchange for shares of our common stock on the retraction date under the optional exchange right described below. See the section entitled "—The Voting and Exchange Trust Agreement—Optional Exchange Upon Canadian Exchange Co. Insolvency Event" on page 109 of this proxy statement.

Distribution on Liquidation of Canadian Exchange Co.

        Subject to applicable law and the exercise by either us or Callco of our or its liquidation call right, in the event of the liquidation, dissolution or winding up of Canadian Exchange Co. or any other distribution of its assets among its shareholders for the purpose of winding up its affairs, holders of exchangeable shares shall be entitled to receive from the assets of Canadian Exchange Co. a liquidation payment that will be satisfied by issuance of one share of our common stock plus the dividend amount, if any, for each outstanding exchangeable share. This liquidation amount will be paid to the holders of exchangeable shares before any distribution of assets of Canadian Exchange Co. is made to the holders of the common shares or any other shares of Canadian Exchange Co. ranking junior to the exchangeable shares, and is subject to the exercise by us or Callco of our or its liquidation call right described in the section "—Liquidation Call Right" below.

Automatic Exchange Upon Liquidation of US Gold

        Under the Voting and Exchange Trust Agreement, in the event of our liquidation, all of the then outstanding exchangeable shares will be automatically exchanged for shares of our common stock. To effect an automatic exchange, we will purchase all of the exchangeable shares from the holders on the last business day prior to the effective date of a liquidation. The purchase price payable for each exchangeable share purchased in a liquidation of US Gold will be satisfied by the issuance of one share of our common stock plus the dividend amount, if any. See the section entitled "—The Voting and Exchange Trust Agreement—Automatic Exchange Right Upon US Gold Liquidation Event" on page 109 of this proxy statement.

Redemption of Exchangeable Shares by Canadian Exchange Co.

        Subject to applicable law and the due exercise by either us or Callco of our or its redemption call right, Canadian Exchange Co. will, on the redemption date, redeem all of the then outstanding exchangeable shares for a purchase price equal to one share of our common stock for each outstanding exchangeable share plus the dividend amount, if any. The redemption date for the exchangeable shares will be the date, if any, established by the board of directors of Canadian Exchange Co. for the redemption by Canadian Exchange Co. of all but not less than all of the outstanding exchangeable shares, which date will be no earlier than the tenth anniversary of the Effective Time, unless one of the conditions described in the paragraphs below is met.

        The board of directors of Canadian Exchange Co. may accelerate the redemption date in the event that:

    fewer than 5% of the total number of exchangeable shares issued in connection with the Arrangement (other than exchangeable shares held by us or our subsidiaries and subject to necessary adjustments to the number of shares to reflect permitted changes to exchangeable shares) are outstanding;

    (i) any person, firm or corporation acquires directly or indirectly any voting security of US Gold and immediately after such acquisition, the acquirer has voting securities representing more than 50% of the total voting power of all the then outstanding voting securities of US Gold on a fully-diluted basis; (ii) the shareholders of US Gold approve a merger, consolidation,

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      recapitalization or reorganization of US Gold, other than any such transaction which would result in the holders of outstanding voting securities of US Gold immediately prior to such transaction having more than 50% of the total voting power represented by the voting securities of the surviving entity outstanding immediately after such transaction; (iii) the shareholders of US Gold approve a liquidation of US Gold; or (iv) US Gold sells or disposes of all or substantially all of its assets, and the board of directors of Canadian Exchange Co. determines that it is not reasonably practicable to substantially replicate the terms and conditions of the exchangeable shares in connection with such transaction and that the redemption of all but not less than all of the outstanding exchangeable shares is necessary to enable the completion of such transaction;

    the holders of exchangeable shares are entitled to vote as shareholders of Canadian Exchange Co. on a certain matter, except with respect to the right to vote on general business matters presented at any annual meeting of Canadian Exchange Co. (including the election of one of the directors of Canadian Exchange Co.) and except with respect to the right to vote on any change to the rights of the holders of exchangeable shares where the approval of such change would be required to maintain the equivalence of the exchangeable shares with the shares of US Gold common stock, and to the extent that the board of directors of Canadian Exchange Co. has determined that it is not reasonably practicable to accomplish the business purpose intended by the matter on which the shareholders are entitled to vote, which business purpose must be bona fide and not for the primary purpose of causing the redemption date acceleration, in a commercially reasonable manner that does not result in such a vote; or

    the holders of exchangeable shares are entitled to vote as shareholders of Canadian Exchange Co. on a proposed change to the rights of the holders of exchangeable shares where the approval of such change would be required to maintain the equivalence of the exchangeable shares with the shares of US Gold common stock and the holders of exchangeable shares fail to take the necessary action at a meeting or other vote of the holders of exchangeable shares, to approve or disapprove, as applicable, the matter.

        Subject to applicable law, and provided that we and Callco have not exercised the redemption call right, Canadian Exchange Co. will redeem all of the outstanding exchangeable shares upon at least 30 days prior notice to the holders of the exchangeable shares.

Call Rights

        As further described below, we and Callco will have certain overriding rights to acquire exchangeable shares from the holders. In each case, we have the initial call right and to the extent we do not exercise our right, Callco may exercise its right. A holder of exchangeable shares will be subject to different Canadian federal income tax consequences depending upon whether the call rights are exercised and by which entity and whether the relevant exchangeable shares are redeemed by Canadian Exchange Co. if the call rights are not exercised.

Change of Law Call Right

        Each of we and Callco have an overriding change of law call right to purchase (or, in the case of us, to cause Callco to purchase) from all but not less than all of the holders of exchangeable shares (other than US Gold and its subsidiaries) all but not less than all of the exchangeable shares held by each such holder in the event of any amendment to the Income Tax Act (Canada) and other applicable provincial income tax laws that permits holders of exchangeable shares who (a) are resident in Canada, (b) hold their exchangeable shares as capital property and (c) deal at arm's length with us or Canadian Exchange Co., to exchange their exchangeable shares without requiring such holders to recognize any gain or loss or any actual or deemed dividend in respect of such exchange for the purposes of the

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Income Tax Act (Canada) or applicable provincial income tax laws. The purchase price under the change of law call right is satisfied by delivering to the holder of exchangeable shares one share of our common stock for each exchangeable share purchased plus the dividend amount, if any. In the event of the exercise of the change of law call right by us or Callco, as the case may be, each holder of exchangeable shares shall be obligated to sell all the exchangeable shares held by such holder to us or Callco, as the case may be, on the change of law call date upon payment by us to such holder of the purchase price for each such exchangeable share. To exercise the change of law call right, we or Callco must notify the transfer agent of our or its intention to exercise such right at least 45 days before the date on which we or Callco intend to acquire the exchangeable shares. The transfer agent will notify the holders of exchangeable shares as to whether we or Callco have exercised the change of law call right forthwith after receiving notice from us or Callco.

        Notwithstanding the foregoing, neither we nor Callco shall be entitled to exercise the change of law call right if more than 5% of the exchangeable shares are held by US residents.

Retraction Call Right

        Under the share provisions, each of we and Callco have an overriding retraction call right to acquire all but not less than all of the exchangeable shares that a holder of exchangeable shares requests Canadian Exchange Co. to redeem on the retraction date. Callco is only entitled to exercise its retraction call right with respect to those holders of exchangeable shares, if any, for which we have not exercised our retraction call right. The purchase price under the retraction call right is satisfied by delivering to the holder of exchangeable shares one share of our common stock for each exchangeable share purchased plus the dividend amount, if any.

        At the time of a retraction request by a holder of exchangeable shares, Canadian Exchange Co. will immediately notify us and Callco and either we or Callco must then advise Canadian Exchange Co. within five business days if we choose to exercise the retraction call right. If we or Callco do not advise Canadian Exchange Co. within the five-business day period, Canadian Exchange Co. will notify the holder as soon as possible thereafter that neither of us will exercise the retraction call right. Unless the holder revokes his or her retraction request, on the retraction date the exchangeable shares that the holder has requested Canadian Exchange Co. to redeem will be acquired by us or Callco (assuming either we or Callco exercise the retraction call right) or redeemed by Canadian Exchange Co., as the case may be, in each case for the retraction call purchase price as described in the preceding paragraph.

Liquidation Call Right

        Under the share provisions, each of we and Callco have an overriding liquidation call right, in the event of and notwithstanding a proposed liquidation, dissolution or winding up of Canadian Exchange Co., to acquire all but not less than all of the exchangeable shares then outstanding (other than exchangeable shares held by us or our subsidiaries). Callco is only entitled to exercise its liquidation call right with respect to those holders of exchangeable shares, if any, for which we have not exercised our liquidation call right. The purchase price under the liquidation call right is satisfied by delivering to the holder of exchangeable shares one share of our common stock for each exchangeable share purchased plus the dividend amount, if any. Upon the exercise by us or Callco of the liquidation call right, the holders will be obligated to transfer their exchangeable shares to us or Callco, as the case may be, for the purchase price. The acquisition by us or Callco of all of the outstanding exchangeable shares upon the exercise of the liquidation call right will occur on the effective date of the voluntary or involuntary liquidation, dissolution or winding up of Canadian Exchange Co.

        To exercise the liquidation call right, we or Callco must notify Canadian Exchange Co.'s transfer agent in writing, as agent for the holders of the exchangeable shares, the trustee and Canadian

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Exchange Co. of our or Callco's intention to exercise this right at least 30 days before the liquidation date in the case of a voluntary liquidation, dissolution or winding up of Canadian Exchange Co. and at least five business days before the liquidation date in the case of an involuntary liquidation, dissolution or winding up of Canadian Exchange Co. The transfer agent will notify the holders of exchangeable shares as to whether or not we or Callco have exercised the liquidation call right after the earlier of (a) the date notice of exercise has been provided to the transfer agent and (b) the expiry of the date by which the same may be exercised by us or Callco. If we or Callco exercise the liquidation call right on the liquidation date, we or Callco will purchase and the holders will sell all of the exchangeable shares for an amount equal to the liquidation call exercise price as described in the preceding paragraph.

Redemption Call Right

        Under the share provisions, we and Callco have an overriding redemption call right, notwithstanding any proposed redemption of the exchangeable shares by Canadian Exchange Co., to acquire all but not less than all of the exchangeable shares then outstanding (other than exchangeable shares held by us or our subsidiaries). Callco is only entitled to exercise its redemption call right with respect to those holders of exchangeable shares, if any, for which we have not exercised our redemption call right. The purchase price under the redemption call right is satisfied by delivering to the holder one share of our common stock for each exchangeable share purchased plus the dividend amount, if any. In the event of the exercise of the redemption call right by us or Callco, as the case may be, each holder of exchangeable shares shall be obligated to sell all the exchangeable shares held by such holder to us or Callco, as the case may be, on the redemption date upon payment by us to such holder of the purchase price for such exchangeable shares.

        To exercise the redemption call right, we or Callco must notify Canadian Exchange Co.'s transfer agent in writing, as agent for the holders of the exchangeable shares, and Canadian Exchange Co. of our or Callco's intention to exercise this right at least 30 days before the redemption date (other than in the case of an accelerated redemption date described above, in which case we or Callco, as the case may be, must notify the transfer agent and Canadian Exchange Co. on or before the redemption date). The transfer agent will notify the holders of exchangeable shares as to whether or not we or Callco exercised the redemption call right after the earlier of (a) the date notice of exercise has been provided to the transfer agent and (b) the expiry of the date by which the same may be exercised by us or Callco. If we or Callco exercise the redemption call right on the redemption date, we or Callco will purchase and the holders will sell all of the exchangeable shares for an amount equal to the redemption call purchase price as described in the preceding paragraph.

Effect of Call Rights Exercise

        If US Gold or Callco exercise one or more of its call rights, shares of our common stock will be directly issued to holders of exchangeable shares and we or Callco, as the case may be, will become the holder of the exchangeable shares. We or Callco will not be entitled to exercise any voting rights attached to the exchangeable shares that are acquired from the holders. If we or Callco decline to exercise the call rights when applicable, we will be required, under the Support Agreement, to issue shares of our common stock to the holders of exchangeable shares.

Purchase for Cancellation

        Subject to applicable law and the Articles of Incorporation of Canadian Exchange Co., Canadian Exchange Co. may at any time purchase for cancellation all or any part of the outstanding exchangeable shares by private agreement with any holder of such exchangeable shares or by tender to all holders of record of the exchangeable shares or through the facilities of any stock exchange on which the exchangeable shares are listed or quoted at any price per share together with the dividend amount for which the record date has occurred prior to the date of purchase.

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Voting Rights

        Under the Voting and Exchange Trust Agreement we will enter into with Callco, Canadian Exchange Co. and the trustee, holders of exchangeable shares will be entitled to receive notice of and attend any meeting of our shareholders and to vote at any meetings. See the section entitled "—The Voting and Exchange Trust Agreement—Voting Rights in US Gold" beginning on page 108 of this proxy statement.

        The number of directors of Canadian Exchange Co. will be fixed at three and the rights attaching to the exchangeable shares will entitle holders of exchangeable shares a limited right to vote on the election or appointment of one director but such holders will have no right to vote on the election of the remaining two directors. In addition, the holders of the exchangeable shares are entitled to receive notice of any meeting of the shareholders of Canadian Exchange Co. and to attend and vote thereat, except those meetings where only holders of a specified class or particular series of shares are entitled to vote, and each holder of exchangeable shares is entitled to one vote per exchangeable share in person or by proxy.

Ranking

        Holders of exchangeable shares will be entitled to a preference over holders of any common shares of Canadian Exchange Co. and any other shares ranking junior to the exchangeable shares with respect to the payment of dividends and the distribution of assets in the event of the liquidation, dissolution or winding up of Canadian Exchange Co., whether voluntary or involuntary, or any other distribution of the assets of Canadian Exchange Co. among its shareholders for the purpose of winding up its affairs.

Dividends

        Holders of exchangeable shares will be entitled to receive dividends equivalent to the dividends, if any, paid from time to time by us on shares of our common stock. The declaration date, record date and payment date for dividends on the exchangeable shares will be the same as that for any corresponding dividends on shares of our common stock.

Certain Restrictions

        Except with the approval of the holders of the exchangeable shares, Canadian Exchange Co. will not be permitted to:

    pay any dividends on common shares or any other shares of Canadian Exchange Co. ranking junior to the exchangeable shares, other than stock dividends payable in common shares or in any such other shares of Canadian Exchange Co. ranking junior to the exchangeable shares, as the case may be;

    redeem or purchase or make any capital distribution in respect of common shares or any other shares of Canadian Exchange Co. ranking junior to the exchangeable shares with respect to the payment of dividends or the distribution of the assets in the event of a liquidation, dissolution or winding-up of Canadian Exchange Co., whether voluntary or involuntary, or any other distribution of the assets of Canadian Exchange Co. among its shareholders for the purpose of winding up its affairs;

    redeem or purchase or make any capital distribution in respect of any other shares of Canadian Exchange Co. ranking equally with the exchangeable shares with respect to the payment of dividends or the distribution of assets in the event of the liquidation, dissolution or winding up of Canadian Exchange Co., whether voluntary or involuntary, or any other distribution of the assets of Canadian Exchange Co. among its shareholders for the purpose of winding up its affairs; or

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    issue any shares of stock other than exchangeable shares, common shares and any other shares ranking junior to the exchangeable shares, other than by way of stock dividends to holder of exchangeable shares,

unless, in the case of the first three bullet points above, all dividends and distributions on the outstanding exchangeable shares corresponding to dividends and distributions declared and paid to date on the shares of our common stock have been declared and paid in full on the exchangeable shares.

Amendment and Approval

        The rights, privileges, restrictions and conditions attaching to the exchangeable shares may be added to, changed or removed only with the approval of the holders of the exchangeable shares. Any approval given by the holders of the exchangeable shares to add to, change or remove any right, privilege, restriction or condition attaching to the exchangeable shares or any other matter requiring the approval or consent of the holders of the exchangeable shares as a separate class (other than the election of a single director) shall be deemed to have been sufficiently given if it has been given in accordance with applicable law, subject to a minimum requirement that such approval be evidenced by a resolution passed by not less than 662/3% of the votes cast on such resolution (excluding exchangeable shares beneficially owned by us or any of our subsidiaries) at a meeting of holders of exchangeable shares duly called and held at which the holders of at least 10% of the outstanding exchangeable shares at that time are present or represented by proxy.


The Voting and Exchange Trust Agreement

        The purpose of the Voting and Exchange Trust Agreement will be to create a trust for the benefit of the registered holders from time to time of exchangeable shares (other than US Gold and its subsidiaries). The trustee will hold the one issued and outstanding share of special voting stock of US Gold, to be designated "Series B Special Voting Preferred Stock," in order to enable the trustee to exercise the voting rights attached thereto and will hold exchange rights in order to enable the trustee to require Canadian Exchange Co. to redeem outstanding exchangeable shares, in each case as trustee for and on behalf of such registered holders of exchangeable shares.

        The following is a summary of some of the material terms and conditions of the Voting and Exchange Trust Agreement and is qualified in its entirety by reference to the form of Voting and Exchange Trust Agreement attached as Exhibit C to the Arrangement Agreement.

Voting Rights in US Gold

        Under the Voting and Exchange Trust Agreement, we will issue to the trustee one share of Series B Special Voting Preferred Stock to be held of record by the trustee as trustee on behalf of, and for the use and benefit of, the registered holders of exchangeable shares (other than us or our subsidiaries) and in accordance with the provisions of the Voting and Exchange Trust Agreement. During the term of the Voting and Exchange Trust Agreement, and under the terms of the Support Agreement, we will not be permitted to issue any additional shares of Series B Special Voting Preferred Stock without the consent of the holders of exchangeable shares.

        Under the Voting and Exchange Trust Agreement, the trustee will be entitled to all of the voting rights, including the right to vote in person or by proxy, attaching to the one share of Series B Special Voting Preferred Stock on all matters that may properly come before our shareholders at a meeting of shareholders. The share of Series B Special Voting Preferred Stock will have that number of votes, which may be cast by the trustee at any meeting at which our shareholders are entitled to vote, equal to the number of outstanding exchangeable shares (other than shares held by us or our subsidiaries).

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        Each holder of an exchangeable share (other than us or our subsidiaries) on the record date for any meeting at which our shareholders are entitled to vote will be entitled to instruct the trustee to exercise one of the votes attached to the share of Series B Special Voting Preferred Stock for that exchangeable share. The trustee will exercise each vote attached to the share of Series B Special Voting Preferred Stock only as directed by the relevant holder and, in the absence of instructions from a holder as to voting, the trustee will not have voting rights with respect to such exchangeable share. A holder of an exchangeable share may, upon instructing the trustee, obtain a proxy from the trustee entitling the holder to vote directly at the relevant meeting the votes attached to the share of Series B Special Voting Preferred Stock to which the holder is entitled.

        The trustee (or us at our option) will send to the holders of the exchangeable shares the notice of each meeting at which our shareholders are entitled to vote, together with the related meeting materials and a statement as to the manner in which the holder may instruct the trustee to exercise the votes attaching to the share of Series B Special Voting Preferred Stock, at the same time as we send the notice and materials to our shareholders. The trustee (or us at our option) will also send to the holders of exchangeable shares copies of all information statements, interim and annual financial statements, reports and other materials we send to our shareholders at the same time we send those materials to our shareholders. We will endeavor to obtain copies of materials sent by third parties to our shareholders generally, including dissident proxy circulars and tender and exchange offer circulars, as soon as possible after those materials are first sent to our shareholders and to deliver those materials to the trustee, which will send those materials to holders of exchangeable shares, or we will deliver those materials directly to the holders of exchangeable shares.

        All rights of a holder of exchangeable shares to exercise votes attached to the share of Series B Special Voting Preferred Stock will cease upon the exchange of that holder's exchangeable shares for shares of our common stock.

Optional Exchange Upon Canadian Exchange Co. Insolvency Event

        We and Callco will agree in the Voting and Exchange Trust Agreement that, upon the insolvency of Canadian Exchange Co., a holder of exchangeable shares will be entitled to instruct the trustee to exercise an exchange right with respect to any or all of the exchangeable shares held by the holder, thereby requiring us or Callco to purchase the exchangeable shares from the holder. The purchase price payable for each exchangeable share purchased upon the insolvency of Canadian Exchange Co. will be satisfied by the issuance of one share of our common stock plus the dividend amount, if any.

        As soon as practicable following an event of insolvency of Canadian Exchange Co. or any event that may, with the passage of time or the giving of notice or both, result in the insolvency of Canadian Exchange Co., Canadian Exchange Co. and we will give written notice of the insolvency or other event to the trustee. As soon as practicable after receiving the notice, the trustee will give notice to each holder of exchangeable shares of the event or potential event and will advise the holder of its rights with respect to the exchange right.

        If, as a result of solvency provisions of applicable law, Canadian Exchange Co. is unable to redeem all of a holder's exchangeable shares which the holder is entitled to have redeemed in accordance with the share provisions, the holder will be deemed to have exercised the optional exchange right with respect to the unredeemed exchangeable shares and we or Callco will be required to purchase those shares from the holder in the manner set forth above.

Automatic Exchange Right Upon US Gold Liquidation Event

        We will agree in the Voting and Exchange Trust Agreement that we will notify the trustee, (a) in the event of any determination by the Board to institute voluntary liquidation, dissolution or winding up proceedings with respect to US Gold or to affect any other distribution of our assets among our

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shareholders for the purpose of winding up our affairs, such notice to be given at least 30 days prior to the proposed effective date of such liquidation, dissolution, winding up or other distribution, or (b) promptly following the earlier of (i) receipt by us of notice of, and (ii) our otherwise becoming aware of any threatened or instituted claim, suit, petition or other proceeding with respect to the involuntary liquidation, dissolution or winding up of US Gold or to effect any other distribution of our assets among our shareholders for the purpose of winding up our affairs, in each case where we failed to contest in good faith any such proceedings commenced in respect of us within 30 days of becoming aware.

        Promptly following receipt by the trustee of notice of such an event or potential event of insolvency, the trustee will give notice to each holder of exchangeable shares of such event or potential event and will advise the holder of its rights with respect to the automatic exchange right.

        In order that the holders of exchangeable shares will be able to participate on a pro rata basis with our shareholders, immediately prior to the effective date of such event of insolvency, we will automatically exchange all of the then outstanding exchangeable shares (other than exchangeable shares held by us or our subsidiaries) for a purchase price per exchangeable share of one share of our common stock plus the dividend amount, if any.


The Support Agreement

        The following is a summary of some of the material terms and conditions of the Support Agreement and is qualified in its entirety by reference to the form of Support Agreement attached as Exhibit B to the Arrangement Agreement.

        Under the Support Agreement, we will covenant that, so long as exchangeable shares not owned by us or our subsidiaries are outstanding, we will, among other things:

    not declare or pay any dividend on the shares of our common stock unless (i) on the same day Canadian Exchange Co. declares or pays, as the case may be, an equivalent dividend on the exchangeable shares, and (ii) Canadian Exchange Co. has sufficient money or other assets or authorized but unissued securities available to enable the due declaration and the due and punctual payment, in accordance with applicable law and the Articles of Incorporation of Canadian Exchange Co., of an equivalent dividend on the exchangeable shares;

    advise Canadian Exchange Co. sufficiently in advance of the declaration of any dividend on the shares of our common stock and take other actions reasonably necessary to ensure that the declaration date, record date and payment date for dividends on the exchangeable shares are the same as those for any corresponding dividends on the shares of our common stock;

    ensure that the record date for any dividend declared on the shares of our common stock is not less than ten business days after the declaration date of such dividend (or such shorter time period as may be permitted by law and the requirements of any stock exchange on which the exchangeable shares are listed); and

    take all actions reasonably necessary to enable Canadian Exchange Co. to pay the liquidation amount, the retraction price or the redemption price to the holders of the exchangeable shares in the event of a liquidation, dissolution or winding up of Canadian Exchange Co., a retraction request by a holder of exchangeable shares or a redemption of exchangeable shares by Canadian Exchange Co., as the case may be.

        The Support Agreement will also provide that, without the prior approval of Canadian Exchange Co. and the holders of exchangeable shares, we will not distribute additional shares of common stock of US Gold or rights to subscribe therefor or other property or assets to all or substantially all holders of shares of our common stock, change any of the rights, privileges or other terms of our common stock, or change

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the then outstanding number of shares of our common stock into a lesser or greater number, unless the same or an equivalent distribution on, or change to, the exchangeable shares (or in the rights of the holders thereof) is made simultaneously. In the event of any proposed cash offer, share exchange offer, issuer bid, take-over bid or similar transaction affecting our common stock, we and Canadian Exchange Co. will use reasonable best efforts to take all actions necessary or desirable to enable holders of exchangeable shares to participate in such transaction to the same extent and on an economically equivalent basis as the holders of our common stock, without discrimination.

        The Support Agreement will also provide that, as long as any outstanding exchangeable shares are owned by any person or entity other than us or any of our subsidiaries, we will, unless approval to do otherwise is obtained from the holders of the exchangeable shares, remain the direct or indirect beneficial owner of all of the issued and outstanding common shares of Canadian Exchange Co. and Callco.

        Under the Support Agreement, each of us and Callco will not exercise, and will prevent our affiliates from exercising, any voting rights attached to the exchangeable shares owned by us or Callco or their affiliates on any matter considered at meetings of holders of exchangeable shares (including any approval sought from such holders in respect of matters arising under the Support Agreement).

        The Support Agreement may not be amended without the approval of the holders of the exchangeable shares, except in limited circumstances.


Effect of the Arrangement on US Gold Shareholders

        If the Arrangement is completed, it is expected that the former shareholders of Minera Andes will control up to approximately 48% of the voting power of US Gold, or approximately 47% on a fully-diluted basis, and will own the same proportions of US Gold's common stock and 2007 Exchangeable Shares, counted together as a single class, upon exchange of the exchangeable shares of Canadian Exchange Co. that they receive in the Arrangement. Upon completion of the Arrangement, if Mr. McEwen exercises all of his outstanding options to purchase shares of Minera Andes and of our common stock, we expect that Mr. McEwen will own approximately 68,293,241shares of our common stock and exchangeable shares or approximately 25% of the outstanding shares of our common stock, the exchangeable shares and the 2007 Exchangeable Shares, counted together as a single class. For additional information, see "The Arrangement—The Securities to be Issued by US Gold and Canadian Exchange Co. in the Arrangement" on page 70.


Accounting Treatment

        The Arrangement will be accounted for as an acquisition of a business. US Gold will record net tangible and identifiable intangible assets acquired and liabilities assumed from Minera Andes at their respective fair values at the date of the completion of the Arrangement. Any excess of the purchase price, which will equal the market value, at the date of the completion of the Arrangement, of the US Gold common stock (including the US Gold common stock issuable upon exchange of the exchangeable shares and exercise of Minera Andes Options) issued as consideration for the Arrangement, over the net fair value of such assets and liabilities will be recorded as goodwill.

        The financial condition and results of operations of US Gold after completion of the Arrangement will reflect Minera Andes' balances and results after completion of the Arrangement but will not be restated retroactively to reflect the historical financial condition or results of operations of Minera Andes. The earnings of US Gold following the completion of the Arrangement will reflect acquisition accounting adjustments, including the effect of changes in the carrying value of Minera Andes' assets and liabilities on depreciation and amortization expense. Intangible assets with indefinite useful lives and goodwill, if any, will not be amortized but will be tested for impairment at least annually, and all assets including goodwill will be tested for impairment when certain indicators are present. If, in the

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future, US Gold determines that tangible or intangible assets (including goodwill) are impaired, US Gold would record an impairment charge at that time.


Registration

        US Gold will file a registration statement on Form S-4 with the SEC to register the shares of common stock of US Gold issuable upon exchange of the exchangeable shares of Canadian Exchange Co. US Gold also agreed to use its reasonable best efforts to cause such registration statement to become effective upon the consummation of the Arrangement and to maintain the effectiveness of such registration so long as any exchangeable shares remain outstanding. For purposes of registering such stock, US Gold is preparing a registration statement on Form S-4. The effectiveness of the registration statement is a condition to the completion of the Arrangement.

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INFORMATION ABOUT MINERA ANDES

History and Development of Minera Andes

Corporate Overview

        Minera Andes was formed upon the amalgamation of Scotia Prime Minerals, Incorporated and Minera Andes Inc. pursuant to the ABCA on November 6, 1995. Minera Andes' corporate head office is located at Suite 4750, Brookfield Place, Bay Wellington Tower, 181 Bay Street, P.O. Box 792, Toronto, Ontario, Canada M5J 2T3, its telephone number is 647-258-0395 and its principal business address is located at Abraham Pizzi 5045, Barrio San Roberto—Dep. Rivadavia (5400) San Juan. Minera Andes' registered and records office and address for service is 3700-205 5th Avenue S.W., Calgary, Alberta, T2P 2V7, Canada.

        Commencing on February 7, 2007, Minera Andes was listed on the TSX under the symbol "MAI". Prior to February 7, 2007 Minera Andes was listed on the TSXV, having initially been listed thereon on December 20, 1995. Minera Andes' common shares are also quoted on the OTCBB under the symbol "MNEAF".

        Minera Andes' principal business is the exploration and development of mineral properties, located primarily in the Republic of Argentina, with a focus on gold, silver and copper mineralized targets. Minera Andes' carries on its business by acquiring, exploring and evaluating mineral properties through Minera Andes' ongoing exploration program. Following exploration, Minera Andes either seeks to enter into joint ventures to further develop these properties or dispose of them if they do not meet Minera Andes' corporate requirements.

        Minera Andes currently holds mineral rights and applications for mineral rights covering approximately 244,500 hectares (604,173 acres) in Argentina. Minera Andes' principal assets currently consist of:

    a 49% interest in MSC, which owns and operates the San José Mine, an operating silver and gold mine in Santa Cruz Province, Argentina, covering 50,491 hectares (124,766 acres) (not included in the acres noted above);

    a 100% interest in the Los Azules Copper Project, an advanced-stage porphyry copper exploration project in San Juan Province, Argentina; and

    a portfolio of exploration properties in the prospective Deseado Massif region of Southern Argentina.

Organizational structure

        Minera Andes' material property interests are held through its wholly-owned subsidiaries organized in Argentina. Minera Andes' interest in the San José Mine is held by Minera Andes S.A. ("MASA") and Minera Andes' interest in the Los Azules Copper Project is held by Andes Corporación Minera S.A. ("Andes Corp.").

        The San José Mine is a silver-gold mine located in Santa Cruz Province, Argentina. The San José Mine is a joint venture pursuant to which title to the assets is held by MSC, an Argentinean company. MSC is owned 49% by Minera Andes' wholly-owned subsidiary, MASA, and 51% by Hochschild. Minera Andes' investment income or losses, as the case may be, arise from its 49% share of the net profit or loss of the operations of the San José Mine, owned by MSC and accounted for on an equity basis.

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Significant Events in the Development of Minera Andes

San José Mine History

        In October 2005 MSC completed a bankable feasibility study at the San José Mine that led to the development of the San José Mine. In March 2006, an environmental impact assessment, the primary document for permitting the San José Mine, was approved by the province of Santa Cruz, Argentina, and a final decision was made to place the San José Mine into production. In March 2007, an aggressive exploration program was approved for the San José Mine by MSC, with an objective of adding new reserves and resources, and identifying new veins to increase mine life. Pre-commissioning production commenced at the San José processing facility during the second half of 2007.

        The San José processing facility commenced production during the second quarter of 2007 and full commercial production of 750 metric tonnes per day ("MTPD") was reached in the first quarter of 2008. The first sale of metals from the San José Mine occurred in December 2007.

        In August 2007, before achieving commercial production, MSC initiated a project to double the capacity of the San José processing facility. In October 2008, capacity at the San José processing plant was increased from 750 MTPD to 1,500 MTPD. The plant operated at an average daily rate of 1263 MTPD in 2009 and in 2010. Approximately 50% of the concentrate produced at the mill is converted on site to doré bullion.

        On March 19, 2009 the San José Mine processing facility was connected to the national power grid through the construction of a 130 kilometer 132 kV electric transmission line. Diesel generating capacity, which is sufficient to run the mill at its full capacity, remains on site as backup.

        MSC purchased part of the equipment necessary to expand the concentrate leaching and electrowinning circuit so that 100% of the concentrates produced by the operation can be converted to doré on site. Basic and detailed engineering have been completed, but construction of the project has been suspended because the completion of the circuit is not economically attractive given the current market conditions for concentrate sales. As such, the related project and plant costs and plant have been impaired for accounting purposes by $5.7 million during 2010.

        In 2010, approximately 54,476 meters of core drilling in a total of 265 drill holes were completed at the San José Mine. The 2010 drilling program represented a significant increase compared to the 2009 program, which consisted of approximately 25,094 meters of core drilling in a total of 115 drill holes. Drilling focused primarily on eleven new veins discovered during the year. The most important new veins are the Micaela and Sofia veins. The veins are located in the main mine area. Infill and step-out drilling was also completed on the Frea, Odin and Ayelén veins. Outside of the main mine area, drilling was carried out on the Cerro Portugués, Aguas Vivas and Saavedra West to explore for new resources.

        The 2011 exploration program at San José consists of surface geophysics and a diamond core drilling program totaling approximately 56,400 meters of drilling. The goal of the 2011 exploration program is to upgrade existing resources to replace reserves depleted during 2010 and to discover new mineralized veins (new resources) on the San José property, which covers approximately 50,491 hectares (124,700 acres).

        Minera Andes' personnel regularly communicate with MSC's staff, make periodic visits to the mine and hold scheduled conference calls with MSC's operations management twice a month. In addition, a formal protocol for the transfer of information from MSC to Minera Andes was established during 2009, which has improved the quality and timeliness of information available to it regarding the operation of the San José Mine.

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Option and Joint Venture Agreement

        Minera Andes' interest in, and the affairs of, MSC are governed by an option and joint venture agreement dated March 15, 2001 between MASA and Hochschild, as amended by agreements dated May 14, 2002, August 27, 2002, September 10, 2004, and September 17, 2010 (the "OJVA").

        Under the OJVA Minera Andes is entitled to appoint one of the three members of the Board of Directors of MSC and Hochschild is entitled to appoint the balance of the members of the Board of Directors of MSC. The OJVA grants Minera Andes a "veto" in respect of certain and very limited matters regarding the affairs of MSC and the operation of the San José Mine. In particular, Minera Andes has limited ability to control the timing or amount of cash calls and decisions made in that regard may have an adverse affect on our operations and financial position. However, the OJVA grants Minera Andes certain approval rights with respect to new project capital expenditures and exploration. Minera Andes has the right to receive, upon request, information regarding the San José Mine.

        The OJVA and the by-laws of MSC provide, in relevant part, that:

    (i)
    the Board of Directors of MSC shall, at all times, consist of three directors and that, in effect, two of such directors shall be nominated by Hochschild and one director shall be nominated by MASA;

    (ii)
    the Board of Directors of MSC shall meet at least once every calendar quarter, without any stipulation that a nominee of each of Hochschild and MASA be present;

    (iii)
    at any meeting of the Board of Directors of MSC, each of MASA and Hochschild shall have that number of votes equal to the number of directors it is entitled to appoint;

    (iv)
    MSC shall finance its operations and activities from such sources as the Board of Directors of MSC sees fit;

    (v)
    the only actions by MSC requiring unanimous approval of both MASA and Hochschild are (a) a sale of all or substantially all of the assets of MSC; (b) any amendment to the articles of MSC that would have an adverse effect on the rights of any particular shareholder to receive its share of the profits of MSC; (c) entering into any new line of business; (d) acquiring real property or conducting exploration, development or mining outside of the property initially transferred to MSC for the purposes of establishing the joint venture; or (e) any merger or other corporate combination involving MSC; and

    (vi)
    in the event of a disagreement between Hochschild as "majority owner" and MASA as "minority owner", concerning any act of MSC that requires the unanimous approval of the Board of Directors of MSC, Hochschild has the option to purchase all of the shares of MSC held by MASA for "fair value".

        The OJVA provides that MSC shall finance its operations from such sources as the Board of MSC shall determine, including by issuing additional shares. In such event, each shareholder of MSC has a pre-emptive right to subscribe for its pro rata share of the additional shares. Any shares not subscribed by a shareholder shall be offered to the other, participating, shareholder. As a result, full exercise of a shareholder's pre-emptive right (assuming full exercise by other shareholder) maintains its shareholdings in MSC at current levels while a failure to exercise its pre-emptive rights, in full, may result in dilution (the extent of such dilution depending on whether the other shareholder exercises its pre-emptive right and to what extent and whether such shareholder also purchases shares not purchased by the first shareholder). Historically, a portion of the operating and capital costs of the San José Mine have been financed by issuing additional shares of MSC.

        The OJVA also provides that it shall be the policy of MSC to maintain excess distributable cash and that unless the Board of MSC unanimously decides otherwise, MSC shall distribute, on a semi-annual basis all cash not reasonably required for operations or expansion.

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Financing for the San José Mine

        Financing for the initial development of the San José Mine was provided by way of loans to MSC by Minera Andes and Hochschild in amounts proportionate to their shareholdings in MSC. These amounts are subordinated to the project loans described below and form part of Minera Andes' investment in MSC. These loans bear a fixed interest rate of 7.00%.

        Subsequently, project financing for the San José Mine was provided pursuant to project finance loan documentation between Minera Andes, MSC and Hochschild wherein Hochschild and Minera Andes agreed to provide MSC with a permanent secured project loan in the aggregate amount of $65 million (in amounts proportionate to their shareholdings in MSC) except the loans to be made by Minera Andes to MSC are structured as (i) a loan by Hochschild to Minera Andes; and (ii) a corresponding loan by Minera Andes to MSC on the same terms as the loan by Hochschild to Minera Andes. Both the loan to Minera Andes and the loan by Minera Andes bears interest at the same rate, 7.00%, and upon the same terms (including repayment). The project loans are currently unsecured except that, as security for the loan made by Hochschild to Minera Andes, Minera Andes has pledged to Hochschild its right to the repayment of the corresponding loans made by Minera Andes to MSC. The project loans bear a fixed interest rate of 7.00%. On October 3, 2011, MSC repaid the entire outstanding principal and accrued interest on the shareholder and project finance loans.

        Currently there are no additional financing arrangements for development at the San José Mine, though the board of directors of MSC may finance activities at the San José Mine from sources at it sees fit, including the issuance of additional shares of MSC. The consent of the Minera Andes' designee on the board of directors of MSC would not be required to consent to such additional financing arrangements. Historically, the operating and development costs of the San José Mine have been financed by the issuance of shares of MSC. Both Minera Andes and Hochschild have preemptive rights to participate in any such additional issuances. Either party's interests in MSC would be diluted if it did not participate in such additional issuances.

Los Azules Project History

        The Los Azules Copper Project is an advanced-stage exploration project located in San Juan Province, Argentina. The Los Azules Copper Project was previously subject to an option agreement between Minera Andes, MASA and MIM Argentina Exploraciones S.A. (later known as "Xstrata Copper") and Xstrata Queensland Limited (together with Xstrata Copper, "Xstrata") dated November 2, 2007 (as amended by assignment and amending agreement dated May 15, 2009, collectively the "Los Azules Option Agreement"). As of October 1, 2009, Xstrata elected not to exercise its one-time right to back-in to a 51% interest in the project. Consequently, Xstrata transferred those properties held by it and forming part of the Los Azules Copper Project to Andes Corp., a wholly owned subsidiary of Minera Andes, and Xstrata no longer retains any ownership in or rights with respect to the project. Minera Andes, through Andes Corp., owns 100% of the Los Azules Copper Project. A portion of the Los Azules Project is currently the subject of litigation in the Supreme Court of British Columbia, which if resolved adversely to Minera Andes may affect Minera Andes' ownership of the Los Azules Project. See "—Legal Proceedings" beginning on page 152 for a description of the litigation related to the Los Azules Copper Project.

        In November 2005, Minera Andes signed a term sheet with Xstrata Copper, in respect of the matters provided for in the Los Azules Option Agreement.

        In May 2006, Minera Andes reported the discovery of significant high-grade copper at its Los Azules Copper Project with an eleven hole drill program returning intervals up to 1.6% copper over 221 meters and 1% copper over 173 meters in separate holes.

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        In November 2007, the Los Azules Option Agreement was executed. The Los Azules Option Agreement provided for the consolidation of adjoining properties owned indirectly by Minera Andes and Xstrata straddling a large copper porphyry system.

        Between 2006 and 2008, Minera Andes drilled 64 core holes totaling 11,572 meters at the Los Azules Copper Project and commenced preparation of the preliminary assessment contemplated by the Los Azules Option Agreement.

        In September 2008, Minera Andes completed a metallurgical testing program indicating that the mineralized material at the Los Azules Copper Project is amenable to conventional flotation recovery methods and that the overall metal recoveries and the copper concentrate grades are high.

        Also, in September 2008, an independent resource estimate was completed in respect of the Los Azules Copper Project and an initial technical report (subsequently revised in January 2009) was prepared in accordance with NI 43-101 and filed.

        In February 2009, the preliminary assessment was completed and the results thereof announced by news release dated February 5, 2009. A technical report, in support thereof, was subsequently filed in March 2009.

        On May 29, 2009, in accordance with the terms of the Los Azules Option Agreement, Minera Andes delivered to Xstrata the preliminary assessment, thereby exercising its earn-in option and acquiring a 100% interest in those properties comprising the Los Azules Copper Project held by Xstrata, subject to a one-time option held by Xstrata to back-in to a 51% interest in the Los Azules Copper Project.

        On October 1, 2009, the back-in right expired, unexercised and Minera Andes, through its wholly owned subsidiaries, now holds 100% of the Los Azules Copper Project, subject to litigation that is currently ongoing in the Supreme Court of British Columbia. See "—Legal Proceedings."

        In December 2009, Minera Andes initiated a seasonal drilling program at the Los Azules Copper Project and during the 2009-2010 field season 10,007 meters of diamond core drilling was completed in 23 drill holes. The results of the drilling as well as an updated resource estimate were reported in an updated 43-101 Technical Report dated December 16, 2010.

        In December 2010, Minera Andes initiated a seasonal drilling program at Los Azules.

Principal Capital Expenditures

        The following constitutes Minera Andes' principal capital expenditures and divestitures, since the beginning of Minera Andes' last three financial years and the six months ended June 30, 2011. Capital expenditures relate to projects/properties in Argentina.

Expenditures/Investments
(all figures in millions of USD)
  2011
(6 months)
  2010   2009   2008  

Los Azules Exploration Project

    9.5     12.3     1.8     7.3  

San José Mine (via MSC)

            (0.6 )   11.3  

Other Exploration Projects

    0.8     1.1     1.2     0.7  

        There have been no divestitures since the beginning of Minera Andes' last three financial years.

        Capital expenditures relate to projects/properties in Argentina. No expenditures were made in 2010 and 2011 with respect to the San José Mine because capital expenditures are made by MSC and not Minera Andes. Some of the work provided is completed by contractors located in the U.S., although such U.S. expenditures constitute less than 10% of the overall expenditures on the Minera Andes projects. Method of financing to accommodate these expenditures was primarily equity financings. In 2009, capital expenditures were also financed through bank debt which is no longer outstanding.

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Corporate Developments

        In December 2005, Mr. Robert McEwen, Chairman and Chief Executive Officer of US Gold, and founder and former Chairman and Chief Executive Officer of Goldcorp Inc., agreed to invest a total of Cdn$10 million in Minera Andes by private placement.

        In March 2006, Mr. McEwen purchased 1.2 million shares of Minera Andes in the market at a price of Cdn$1.10 per share. In addition, in May 2006, Mr. McEwen exercised all the common share purchase warrants then held by him. As a result, a total of 14,285,714 common shares were issued resulting in gross proceeds of Cdn$7,857,143 to Minera Andes. Mr. McEwen then held 30% of the then issued and outstanding common shares of Minera Andes.

        In February 2007, Minera Andes's shares were listed on, and commenced trading on, the TSX. Minera Andes' shares were previously listed and traded on the TSXV.

        Between December 2007 and February 2008, Minera Andes completed private placements consisting of the issue of a total of 22,085,668 units, at a price of Cdn$1.55 per unit, for gross proceeds of Cdn$34.23 million. The proceeds from the offering were primarily used to fund Minera Andes' share of the costs at the San José Mine and for exploration drilling and completing the preliminary assessment on the Los Azules Copper Project.

        On August 5, 2008, Mr. McEwen joined the board of directors of Minera Andes upon the exercise of a right to nominate an individual to the board of directors of Minera Andes granted to him as part of the 2006 financing.

        In February 2009, Minera Andes completed a private placement with Mr. McEwen (the "McEwen Financing") pursuant to which Mr. McEwen purchased an aggregate of 40 million common shares at a price of Cdn$1.00 per share for gross proceeds to Minera Andes of Cdn$40 million, as a result of which Mr. McEwen held 37.3% of the issued and outstanding shares of Minera Andes. The proceeds from the McEwen Financing were used: (i) as to $11.3 million, to pay Minera Andes' portion of the cash call made by MSC in December 2008 in respect of the San José Mine; (ii) as to approximately $17.5 million, to repay all amounts due under Minera Andes' then outstanding bank loan with Macquarie Bank Limited; and (iii) as to the balance, for general corporate purposes.

        In connection with the McEwen Financing, Mr. McEwen was granted the right to appoint two additional directors to Minera Andes' board of directors, which combined with Mr. McEwen's existing rights to board representation entitled him to nominate a total of three directors to Minera Andes' board of directors. On February 2, 2009 and February 23, 2009, Mr. Clark and Mr. Drummond, respectively, resigned from the Minera Andes' board of directors. On February 23, 2009, Mr. Richard Brissenden and Mr. Michael Stein were appointed to Minera Andes' board of directors, as nominees of Mr. McEwen.

        On February 23, 2009, Mr. McEwen was appointed Executive Chairman of Minera Andes.

        On March 13, 2009, James K. Duff was appointed Chief Operating Officer of Minera Andes. Mr. Duff has more than 30 years of diverse international mining experience and is responsible for managing Minera Andes' interests in the San José Mine and the Los Azules Copper Project.

        On June 18, 2009, following Minera Andes' annual general and special meeting, Robert R. McEwen was appointed President and Chief Executive Officer of Minera Andes effective immediately, replacing Mr. Allen Ambrose. Mr. Ambrose was re-elected to the board of directors of Minera Andes.

        Minera Andes completed an equity offering on August 19, 2009, by way of short form prospectus pursuant to which Minera Andes issued 30,705,000 units, each unit consisting of one common share and one half of a common share purchase warrant at a price of Cdn$1.25 per unit. The equity offering was completed on a "bought deal" basis and resulted in net proceeds to Minera Andes of approximately Cdn$22 million.

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        On September 9, 2009, Brian Gavin, Vice President, Exploration of Minera Andes submitted his resignation effective October 9, 2009. On September 30, 2009, Nils Engelstad, formerly corporate legal counsel to Minera Andes, was appointed Vice President, Corporate Affairs. In February 2010, Minera Andes announced that Perry Ing would be appointed Chief Financial Officer effective April 5, 2010. Henry John, formerly Chief Financial Officer, continued on as a consultant to Minera Andes for a period of one year.


Description of Mineral Properties

San José Mine

        Unless otherwise indicated, technical information in this proxy statement regarding the San José Project is derived from the technical report (the "San José Technical Report") dated December 16, 2010 entitled "Technical Report on the San José Silver-Gold Mine, Santa Cruz, Argentina" prepared by Eugene J. Puritch (P.Eng); Alfred S. Hayden (P.Eng); James L. Pearson (P.Eng); Fred H. Brown (CPG, PrSciNat); Tracy Armstrong (P.Geo); David Burga (P. Geo); and Kirstine R. Malloch (MAusIMM), all of P&E Mining Consultants Inc. ("P&E") and each of whom is a "qualified person" and "independent" of Minera Andes, in each case, within the meaning of NI 43-101. Such information is based on assumptions, qualifications and procedures which are not fully described herein. The information provided below is based on assumptions, qualifications, and procedures which are not fully described herein. The full text of the technical reports, and any updates thereto, that Minera Andes has received are filed by Minera Andes on SEDAR and are available under Minera Andes's profile on SEDAR at www.sedar.com. US Gold is not able to independently verify this information, and the technical reports filed by Minera Andes, including the San José Technical Report, on SEDAR or any other information filed by Minera Andes on SEDAR are not a part of this proxy statement and shall not be deemed to be incorporated by reference into this proxy statement. Reserve and resource information contained herein supersede information provided in the San José Technical Report.

        Information subsequent to the effective date of the San José Technical Report was provided and reviewed by Minera Andes management.

Project Description and Location

        The San José property is located in Perito Moreno District, in the Province of Santa Cruz, Argentina, lying approximately between latitude 46°41'S and 46°47'S and longitude 70°17'W and 70°00'W (Gauss Kruger, Zone 2 coordinates approximately 4830000N 2400000E). The mine is by air 1,750 kilometers south-southwest of Buenos Aires and 230 kilometers southwest of the Atlantic port of Comodoro Rivadavia. The nearest town is Perito Moreno, which is approximately 30 kilometers west of San José.

        The San José property covers a total area of approximately 50,491 hectares and consists of 50 contiguous mining concessions (consisting of 18 "Minas" or approved mining claims; and 32 "Manifestations" or claims that are in the application process for mining claim status). As of September 30, 2010, all of the concessions comprising the San José property were in good standing. The one exploration license ('Cateo') is in the process of being converted into four new Manifestations, namely Verano I, II, III and IV. These four new Manifestations will have bi-annual fees, but only after a three-year grace period from the initial application dates.

        Title to the San José property is held by MSC, the holding and operating company set up under the terms of OJVA between MASA (49%) and Hochschild (51%). MASA is an indirect wholly-owned subsidiary of Minera Andes. The original agreement was finalized on March 15, 2001. Hochschild was formerly a private Peruvian company named Mauricio Hochschild & Cia. Ltda. ("MHC") that in November 2006 became a publicly traded company on the London stock exchange.

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        MSC was specifically set up in March 15, 2001 to explore and develop gold and silver mineralization on the San José property. Under the agreement, MHC could earn a 51% ownership in the property by spending a total of $3 million over three years, and of that, a minimum of $100,000 per year had to be spent on exploration targets within the property other than the Huevos Verdes vein. In addition, MHC was required to make semi-annual payments totaling $400,000 per year (subsequently amended to $200,000 per year as noted below) until "pilot plant" production was achieved. As part of the Agreement, title to the property was transferred to, and held by, the joint venture holding and operating company (MSC).

Surface Rights

        A mining license alone is not sufficient to permit mining operations. An agreement for access and occupation of the surface land is also required from the surface owner and occupier before mining may commence. Surface rights in Argentina are not associated with title to either a mining lease or a claim and must be negotiated with the landowner.

        To ensure the integrity of its operations, MSC has purchased the land and corresponding occupation rights that are necessary to conduct its operations. MSC may purchase additional land in due course, as the need arises.

        All of the known mineralized zones, mineral resources and mineral reserves and active mine workings, existing tailings ponds, waste etc., are within MSC's concessions.

        There are no back-in rights, payments or other agreements or encumbrances or environmental liabilities to which the property is subjected.

Argentina's Mining Royalties

        Under Argentinean Law, mining concessions are real property, which can be transferred freely and can also be pledged. Concessions are granted for unlimited periods of time, subject to the following conditions:

    (a)
    the payment twice a year of a mining fee or canón of 80 pesos per unit, or pertenencia; and

    (b)
    the filing of a minimum investment plan and compliance with a one-off minimum investment in the concession equal to 300 times the relevant canón over a five year period. Of the figure set out in the minimum investment plan for investment over five years, 20% must be invested in the first two years. Failure to comply with these conditions may result in the termination of the concession.

San José Mining Royalties

        As legal owners of the mineral resources, provinces are entitled to request royalties from mine operators. Regulations vary from province to province. In Santa Cruz, where the San José property is located, the royalty is fixed at a maximum of 3% of the mine-site value per year payable monthly. However, under the Mining Tax Stability Agreement the mining royalty is fixed at 1.85% of the mine-site value per year when the final product is doré and 2.55% when the final products are concentrates or precipitates.

        Minera Andes management reports that MSC paid ARS$35,718,725 ($8,992,9750 based on current exchange rates) in mining royalties and canon payments to the Province of Santa Cruz in 2010.

        A national export tax (Retention Tax) is fixed at 5% for doré and 10% for concentrates or precipitates. Certain tax rebates are available if the final products are shipped from a Patagonian maritime port (depending on the port of exportation, these rebates will be reduced to nil as from 2009 and 2010).

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        A new provincial tax in the form of a trust fund (Fondo Tecnológico Productivo in Spanish) was proposed in 2010, patterned after a similar law in San Juan Province. The purpose of the trust fund would be to raise money for infrastructure projects in the local areas where mining projects are located. Negotiations between the Province and the mining companies stalled during 2010 but are likely to resume in 2011. In San Juan, contributions to the trust fund are "voluntary" and range from about 1% to 1.5% of gross sales.

Environmental Management

        The Environmental and Social Impact Assessment ("ESIA") for the San José property forms the principal document for the permitting of the property. The ESIA was designed to fulfill the legal requirements in Argentina and also to comply with the procedures of evaluation that are widely accepted internationally regarding environmental and social protection measures. The ESIA was structured according to the Argentinean national mining law, which the Province of Santa Cruz has adhered to. The Provincial Department of Mining is the lead permitting agency.

Provisions for Rehabilitation

        The conceptual mine closure plan includes the following activities:

    All surface structures and installations will be dismantled and removed, except those necessary to support the ongoing monitoring activities.

    The ramps will be closed and secured to avoid any unauthorized access.

    The waste rock stored temporarily on surface will be backfilled to the mine workings and the tailings facility will be capped with an impermeable layer of cement-mixed tailings. The minimum cover thickness will be 1 meter.

    Water derivation channels will be conditioned for long-term use.

    Some of the roads will be closed, but many will remain open to provide access for longer-term monitoring.

    A monitoring program will be executed together with the authorities and the community to guarantee that physical and chemical stability is achieved.

    Employment levels are expected to fall at closure.

        The estimated constant dollar cost for reclamation and closure of the San José Mine is $6.6 million.

Permitting Requirements

        Other permits applied and/or accepted in order to advance the San José property are outlined below.

        Grants of mining rights, including water rights, are subject to the rights of prior users. The mining code also contains environmental and safety provisions administered by the provinces.

        Environmental Impact Reports ("EIR") must be submitted to the provincial government prior to conducting mining operations. On March 1, 2006, MSC received approval for the Environmental Impact Assessment ("EIA") for the San José property. The EIR must describe the proposed operation and the methods that will be used to prevent undue environmental damage and must be updated biennially. Mine operators are liable for environmental damage and violators of environmental standards may be required to shut down mining operations. An EIR must be submitted every two years in accordance with Argentinean law.

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Accessibility, Climate, Local Resources, Infrastructure and Physiography

        The principal access route to San José comprises a good unsealed (dirt) road section of 32 kilometers and then tarmac road to the port of Comodoro Rivadavia, a total distance of 350 kilometers. Comodoro Rivadavia has scheduled national air services to Buenos Aires, the capital of Argentina, with international air connections.

        The main incoming materials are diesel fuel, chemicals, cement, timber supports, spare parts, explosives, zinc powder, sodium cyanide and hydrogen peroxide. Transportation of materials to and from the property is by truck. Mine haulage roads provide access from the mine portals to the ore stockpile at the process facility and temporary rock stockpile facilities. Concentrate is exported via the port of Puerto Deseado in the province of Santa Cruz, 250 kilometers south of Comodoro Rivadavia.

        The San José property is within an arid to semi-arid area of Argentina, with short, warm summers reaching temperatures above 10°C and winters with temperatures commonly below 0°C. Strong and persistent winds can be encountered especially during the warmer months (October to May). Average rainfall at the site is estimated to be 144 millimeters and snowfall amounts to 32.5 millimeters. Annual average temperature is 8.9°C. MSC has maintained a weather station at the property since January 2005. Mining and exploration can continue year round in this part of Argentina.

        The nearest town to the San José property in Argentina is Perito Moreno, approximately 30 kilometers to the west. Las Heras, Pico Truncado, and Perito Moreno are small towns (populations ranging from approximately 3,600 to 15,000), which mostly provide labor for the local oil industry, or, in the case of Perito Moreno, for tourism and agricultural purposes. These towns are only able to supply the most basic needs (food, accommodations, fuel, hardware, labor, etc.) for very early stages of exploration. More advanced projects must be serviced from Caleta Olivia, Comodoro Rivadavia, or Buenos Aires.

        Power is provided by way of a transmission line connected to the national grid. Diesel generators, which are fully capable of providing sufficient power for the expanded 1,500 MTPD operation, are on site for back-up.

        Fresh water is obtained by wells which have been sited so as to dewater the Frea Vein mining area. Water is stored in a surface impoundment. Water for the underground mine is sourced from the settling ponds.

        The closest deep water port facility is at Comodoro Rivadavia, a driving distance of approximately 350 kilometers. Alternatively, the port of Puerto Deseado is located approximately 400 kilometers east—southeast of the property.

        The property consists of camp facilities that can accommodate up to 712 personnel, a medical clinic, a security building, a maintenance shop, processing facilities, a mine and process facility warehouse, a surface tailings impoundment, support buildings and mine portals, a change house, a core shack, an administration building and offices.

        MSC has installed a satellite-based telephone/data/internet communication system.

Topography, Elevation and Vegetation

        The topography of the San José property in Argentina is gently rolling, with a few deeply incised valleys. Elevations on the property range between approximately 300 meters and 700 meters. The property area is considered to be semi-desert. Vegetation comprises low scrub bushes and grass, typical of harsh climate and poor soils. Fauna consists of birds, small mammals and reptiles. Most of the property area is uninhabited; however, it is used by local farmers for sheep and cattle grazing.

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Historical Exploration

        Parts of the Santa Cruz Province were reviewed during the 1970's as part of a joint Argentine government-United Nations regional exploration plan (Patagonia-Comahue). In the 1980's FOMICRUZ, S.E., which is the Provincial mining company, completed reconnaissance surveys in the province to delineate areas of interest for mineral reserves.

        There is no formally-recorded exploration on the property prior to work carried out by Minera Andes in the late 1990s. The property was acquired by Minera Andes in 1997, after a regional structural study and prospecting program uncovered areas of Landsat color anomalies, and coincident anomalous gold and silver values. Based on these results, Minera Andes embarked on an exploration program commencing in 1997.

Geological Setting

        The geology of the San José property is summarized below.

Regional Geology

        The San José property is located in the northwest corner of the 60,000 square-kilometer Deseado Massif of the Santa Cruz Province, Argentina. The Deseado Massif consists of Paleozoic metamorphic basement unconformably overlain by Middle to Upper Jurassic bimodal andesitic and rhyolitic volcanics and volcaniclastics. Cretaceous sediments and Tertiary to Quaternary basalts overlie the Jurassic volcanic.

Geology of the Deseado Massif, Argentina

GRAPHIC

Modified from http://www.argentexmining.com/santacruz-province.php

        Jurassic magmatism in the Deseado Massif accompanied extensional tectonics marked by normal faults, horst and graben formation, and block tilting during the opening of the southern Atlantic Ocean. Several small basins formed after the main volcanic episodes, a consequence of intense diastrophic block faulting. Continental sediments were deposited in the Upper Jurassic to Lower Cretaceous in those basins, represented by tuffaceous sandstones, tuffites, limestones, conglomerates, and shales. LS epithermal Ag-Au deposits accompanied magmatism and deformation. Basaltic plateau volcanism was dominant during the Tertiary span, coupled with minor marine ingressions that produced the deposition of sandstones, shales and fossiliferous limestones. Intrusive rocks are scarce in the area. They are represented by irregular bodies of rhyolitic porphyries that intrude the main silicic volcanic units, and by basaltic plugs that pierce the whole sequence.

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        Large amounts of intermediate to silicic volcanics were erupted in the Jurassic, in a sub-aerial, cratonic back-arc tensional environment. These volcanics are subdivided into the Bajo Pobre Formation, predominantly of intermediate to basic composition, and the felsic Bahia Laura Group that discordantly overlies the Bajo Pobre Formation. The Bahia Laura Group is further subdivided into the interdigitating Chon Aike Formation (dominantly ignimbrites) and the La Matilde Formation (dominantly volcaniclastics).

        The volcanic rocks of the Deseado Massif host the producing Ag-Au mines of Cerro Vanguardia, Marta Mine, Manantial Espejo and San José, as well as the prospects and properties of El Dorado-Monserrat, Cerro Negro and La José Fina.

        The principal host rock for silver and gold mineralization in the San José district is the Bajo Pobre Formation where veins are typically developed in competent andesite flows, and to a lesser extent, in volcaniclastic units.

Property Geology

        The property is covered by the El Pluma 4769-I map sheet of the 1:250,000 Servicio Geológico Minero Argentino geological map series. The geology of the San José property is summarized below.

Bajo Probre Formation (Upper Jurassic)

        The Jurassic Bajo Pobre Formation at around 145-150 Ma is the lowermost stratigraphic unit on the San José property and is assumed to underlie the entire area. It is the main host of Au and Ag mineralization at the Huevos Verdes, Frea and Kospi vein deposits as well as many regional prospects. The Formation also hosts some of the mineralization at Saavedra West Zone.

        The formation comprises a lower andesite volcaniclastic unit and an upper andesite lava flow and has a maximum thickness of 120 meters. A dacitic, hornblende-megacrystic lava flow of restricted extent has been identified but its stratigraphic position within the Formation is unknown.

Geology of the San José Property

GRAPHIC

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        An epiclastic environment is inferred for the andesitic volcaniclastic unit, supported by the chaotic changes in facies. This unit is generally pervasively altered and commonly has at least a propylitic overprint. Age dating of the volcaniclastic and lava flows indicates a hiatus of around 5 Ma between the two volcanic events. The andesitic and dacitic lava flows discordantly overlie the volcaniclastics. The andesitic lava flow has a thickness of up to 50 meters. These flows are massive, with columnar jointing and auto-breccia textures where weathering and hydrothermal alteration is concentrated.

Bahia Laura Group—Chon Aike & La Matilda Formations (Upper Jurassic)

        The andesitic volcanics are discordantly overlain by volcanic rocks of the Bahia Laura Group. Subdivision of the Group into the Chon Aike and La Matilde Formations is not well defined on the property and in previous reports the formations have been grouped together and referred to as the Chon Aike Formation, and this is adopted in the section below.

        Previously, outcrops of the Chon Aike Formation were thought to be restricted to geologically mapped areas to the north of the Rio Pinturas valley and in the Saavedra West area. However, mapping of a widespread tuffaceous unit overlying the Bajo Pobre Formation by Dietrich et al. (2004), may belong to the tuffaceous facies of either the Chon Aike or La Matilde Formation.

        The Saavedra West basin is interpreted as a syn-volcanic graben, possibly a caldera, developed within the Bajo Pobre Formation and infilled by pyroclastics correlated with the La Matilde Formation. Pebble dykes are abundant within the graben and ignimbrites that may be correlated with the Chon Aike Formation occur as dykes along one edge. In the Saavedra West area, the thickness of the Group is around 80 to 100 meters, however at Huevos Verdes, La Sorpresa and Rio Pinturas the thickness is only 15 to 20 meters. Pyroclastic rocks of the Chon Aike Formation are laterally extensive. Age dating of the ignimbrites within the Chon Aike Formation gives ages around 147-151 Ma, younger than the age of the volcaniclastic sequence but older than the andesitic flows of the Bajo Pobre Formation.

        Where this Group is overlain by sedimentary rocks of the Cretaceous Castillo Formation, the upper contacts of the Chon Aike Formation are concordant. However, this contact is discordant with the overlying Tertiary flood basalts of the Alma Gaucha Formation.

Post-Jurassic Geology

        Deposition of Cretaceous sedimentary rocks of the Castillo Formation is interpreted to be controlled by block faulting which created small, normal fault-controlled depressions. Thickness of the formation varies but is generally between 5 to 80 meters and decreases towards the south. The formation is divided into three members, with the lowermost member redefined as a tuffaceous deposit belonging to the Chon Aike Formation.

        The northwestern part of the Deseado Massif is covered by an extensive area of Tertiary-aged basalts with at least two basaltic episodes recognised in the San José region. The Upper Oligocene Alma Gaucha Formation occurs as uniform flat-lying flood basalts up to 30 meters that cover a significant portion of the property. Recent basaltic flows from the Cerro Portuguese volcanic centre form lava flow channels that overlie the flood basalts.

        Glacially-derived, unconsolidated till deposits up to 50 meters in thickness occur predominantly in the Rio Pinturas valley.

Structural Geology

        The San José district is transacted by two north-northeast striking major lineaments. The Rio Pinturas lineament follows the Rio Pinturas valley and is one of the main structural features of the Deseado Massif. This lineament can be traced for over 100 kilometers. A second, sub parallel lineament is located 2 kilometers east of the Rio Pinturas lineament.

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        The main structural trend of fault and vein systems on the property is west-northwest to north-northwest. Less prominent are east-striking faults and veins and those north to northeast striking.

        The vein systems at Huevos Verdes, and possibly also those at Frea, developed along north-northwest striking (average orientation of 325°/65° northeast) sinistral strike-slip faults that were reactivated during Triassic rifting. The Huevos Verdes vein system is known to be composed of three main segments along strike.

        Variations of vein orientation in bends and jogs along, and in between, sub-parallel sinistral faults control vein width and mineralization style.

        Sinistral shearing along the north-northeast striking lineaments such as Rio Pinturas may have resulted in overall extension within the bounding blocks that host the San José mineralization, facilitating formation of structural openings along re-activated faults of favorable north-northwest strike.

Alteration

        Alteration is typically a low sulfidation ("LS") epithermal with silicification accompanying all of the veins and fractures and occurring as a narrow alteration halo, generally surrounded by an extensive zone of intermediate argillic mixed with phyllic alteration. Strong argillic alteration is interpreted to be a supergene overprint of the propylitic halo with disseminated pyrite.

Exploration

        The following table is a summary of exploration on the San José property from 1997 to 2010.

Year
  Company   Description

1997 to 2001

  Minera Andes   5 year program consisting of prospecting; soil sampling; stream sediment sampling; mapping and sampling; trenching and channel chip-sampling. IP/Resistivity (74 line kilometers) CSAMT (42 line kilometers) and magnetic surveys (186 line kilometers) by Quantec Geofisica Argentina S.A. RC drilling (85 holes) and diamond drilling (3 holes); alteration studies (Portable Infrared Mineral Analyzer); metallurgical studies; discovery of Saavedra West and Huevos Verdes Zones, plus numerous prospects.

2001 to 2003

 

MSC

 

Joint venture company created between Minera Andes and Hochschild; 2 year program consisting of surveying; IP/Resistivity (45 line kilometers), and Real Section IP (20.25 line kilometers) surveys by Quantec Geofisica Argentina S.A.; diamond drilling (30 holes); further definition of the Huevos Verdes Zone; mineral resource estimates at Huevos Verdes and Saavedra West vein and breccia zones.

2003 to 2004

 

MSC

 

Hochschild vested at 51% ownership; 2 year program consisting of underground development at HVN and HVS; surface rights land purchasing; road construction; diamond drilling (39 holes); program further outlined the Huevos Verdes Zone and resulted in the discovery of the Frea Zone.

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Year
  Company   Description

2004 to 2005

 

MSC

 

Definition-style diamond drilling (144 holes). Initiation of Feasibility Study including mineral resource and mineral reserve estimates at Huevos Verdes and Frea managed by MTB Project Management Professionals Inc. of Denver, USA, includes mine design, capital and operating cost estimation, metallurgical, geotechnical environmental EIA and social studies by Vector Argentina, AMEC Americas Limited ("AMEC") retained to do resource audit; continued underground development on 480 and 430 levels at HVN and HVS; IP/Resistivity (215 line kilometers) surveys; additional 38 diamond drill holes to test regional targets.

October 2005

 

MSC

 

Completion of Feasibility Study in October 2005, decision to proceed to production was made on March 28, 2006.

November 2005 to June 2006

 

MSC

 

Phase 1 and Phase 2 drilling at Kospi Vein (128 holes); EIA approved by DPM on March 1, 2006; continued underground development (ramp construction and drifting at HVS and Frea); Granting of Environmental Permit, production decision (March 28, 2006); change of metallurgical processing and recovery methodology to a Gekko system; supporting metallurgical test work; mine construction, permitting.

July 2006 to September 2007

 

MSC

 

Ongoing plant and infrastructure construction, continued mine development, mineral resource/mineral reserve estimation (Huevos Verdes, Frea, Kospi), continued metallurgical test work, official mine opening (June 26, 2007), continued drilling of regional prospects.

September 2007

 

MSC

 

Preparation of a technical report by AMEC, including a mineral resource and mineral reserve estimation with effective date of December 31, 2006.

January 2007 to December 2008

 

MSC

 

Commercial production officially commenced on January 01, 2008. Continued drilling on the Ayelén, Odin, Frea and Ramal Frea as well as exploration drilling totaling 220 drill holes and 48,762 meters during 2007-2008. Mine comprised of over 18 kilometers of workings, which includes 5.7 kilometers advancement in 2008, with 2 access ramps.

January 2009 to September 2010

 

MSC

 

Extension of geophysical survey by Quantec Geoscience Argentina S.A. including IP, resistivity and ground magnetics. Drilling from January 2009 to December 2009 totaling 25,094 meters and 115 drill holes, and drilling from January 2010 to December 2010 totaling 54,476 meters and 265 drill holes at the mine site and regional drilling.

January 2010 to June 2010

 

MSC

 

Drilling from January 2011 through June 2011 totaling 19,711 meters in 82 drill holes, mostly for infill drilling.

1997-2006 Exploration Programs

        Exploration by Minera Andes on the San José property from 1997 to 2001 was concentrated over the northern part of the property and consisted of geological mapping, sampling, trenching, geophysics, alteration and metallurgical studies and reverse circulation ("RC") and diamond drilling. In 2001, an

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extensive exploration program was undertaken which included detailed topographic surveying of the property, Induced Polarization ("IP") geophysics and drilling.

        Exploration during 2003-2004 consisted of underground exploration/development, environmental and metallurgical studies and the construction and commissioning of a pilot plant at Huevos Verdes Vein. Land was purchased, right-of-way agreements were obtained and a camp road was constructed. Exploration on other targets on the San José property included geophysical programs, surface sampling and drilling.

        A technical support program with the Colorado School of Mines commenced in late 2003 and consisted of regional mapping over a 165 square-kilometer area and detailed target mapping as well as petrographic studies, geochemical analyses, age dating, ore microscopy, fluid inclusion studies, PIMA analyses, remote sensing studies and database reviews.

        Surveying of the topography, planned access and infrastructure in the Huevos Verdes and Frea areas was carried out during 2005-2007. Further IP geophysical surveys were undertake during 2004-2005, as well as continuing development of underground workings on the Huevos Verdes Vein and diamond drilling to 2008.

        MSC commissioned a feasibility study on the San José property during 2004-2005 with AMEC retained to do a mineral resource audit, mine engineering, metallurgical studies and a review of capital and operating costs while Vector (Peru) S.A. and Vector Argentina were retained to undertake the geotechnical, environmental and social aspects of the report. Based on the report outcomes, a decision was made to proceed to the production phase. Pre-production at the Huevos Verdes and Frea Veins commenced on June 26, 2007.

2007-2008 Exploration Program

        As of December 31, 2008, the San José Mine comprised more than 18 kilometers of underground workings accessed by two ramps with construction of a third ramp to access the Kospi Vein having been completed in January 2009 (Minera Andes 2008). In 2008, several hundred meters of drifting was completed along the Frea Vein, with a total of approximately 5.7 kilometers advancement of the San José workings completed in 2008. All underground development in mineralization has been systematically channel chip-sampled. The Frea, Odin and Ayelén Veins all have mineral potential and remain open at depth and along strike.

        The 2007 surface drilling program consisted of 113 diamond drill holes totaling 28,585.74 meters and focused on regional prospects as well as strike extensions of known veins with most of the drilling concentrated on the Ayelén, Frea and Odin veins. The 2008 surface drilling program consisted of 80 diamond drill holes totaling 18,691.00 meters and focused on the Ayelén, Odin and Ramal Frea veins with the objective to increase the mineral resources on these veins as well as to undertake minor amounts of exploration drilling. During 2007-2008, 27 underground drill holes totaling 1,485 meters were drilled in the Frea and HVS workings to explore for branches off of the main vein structures. No promising veins or structures were intercepted.

2009-2010 Exploration Program

        The geophysical company, Quantec Geoscience Argentina S.A., was engaged in 2009 to extend the area of the San José property covered by existing geophysical data, namely the areas of Aguas Vivas to the northwest and Cerro Alto to the south. The survey consisted of 181 line-kilometers of IP, Resistivity, 55 line-kilometers of Ground Magnetrometry and 11 line-kilometers of pole-dipole IP carried out between August to October 2009 (Unger and Langer 2009). A further 54 line-kilometers was surveyed in 2010 in the area of the Aguas Vivas prospect.

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        The geophysical surveys were used to guide exploration drilling in 2009 and 2010, and for detailed geological interpretation along five lines, four lines located to the north and east of the underground workings and one line at Aguas Vivas. These five lines were later drill tested.

        Subsequent to the San José Technical Report, Minera Andes management reports that, during 2010, 54,476 meters of diamond core drilling was completed in 265 holes. The 2010 program represented a significant increase from the exploration effort in 2009 when 25,094 meters of diamond core drilling were completed in 115 holes. The drilling was successful in discovering 11 new veins with a cumulative strike length of 7.5 kilometers, representing an increase of 44% over the previously known total of 17 kilometers. The most important of the new veins are the Micaela and Sofia veins.

2011 Exploration Program

        Subsequent to the San José Technical Report, Minera Andes management reports that:

        Through June 30, 2010, 19,711 meters of diamond core drilling has been completed in 82 holes since the start of the year. Most of the drilling during the first half of the year was infill drilling designed to upgrade inferred resources to the measured and indicated categories. The drilling successfully extended the Dos Lauras vein several hundred meters to the northwest and the known vein strike length is now just over 1,000 meters. In addition, infill drilling was completed with good results on the Micaela, Luli, Susana and Marta veins.

        During the first half of 2011, 3,147 line-kilometers of surface magnetic lines spaced 75 meters apart were run covering 22,000 hectares (54,000 acres) southeast of the mine area. The magnetic data is being analyzed to define drilling targets southwest of the mine, an area that is covered by a layer of post-mineral basalt. The magnetic data will be complemented by 342 line-kilometers of gradient array IP to be run over the same area by the end of the year as well as 25 line-kilometers of pole-dipole array IP.

        The vein system at San José continues to be open at depth and laterally. As a result of the discovery of the east-west trending Micaela-Sofia vein system last year, previous drill results are being reinterpreted to define new drilling targets in and near the mine area in conjunction with surface magnetic IP geophysics data.

Mineralization

        Mineralization in the San José area occurs as LS epithermal quartz veins, breccias and stockwork systems accompanying normal-sinistral faults striking 330° to 340° and conjugate dextral faults. Most of the known mineralization at San José is hosted by the Jurassic Bajo Pobre and Chon Aike Formations.

Veins and Vein Systems

        Regional exploration has identified numerous vein targets, of which only five, Huevos Verdes, Frea, Kospi, Ayelen and Odin have been extensively explored by surface diamond drilling and subsequently developed by underground mining. After reviewing the various drilling programs prior technical consultants concluded the Frea and Kospi Veins were the most significant zones in terms of grade and tonnage. The mineralized Frea has been traced over a 1,200 meter strike length and to depths of up to 250 meters, with an average width of up to 2.5 meters. The Kospi Vein has been traced for over 1,300 meters strike length (Mach & Elliot 2009) and to depths of up to 230 meters, with an average width of around 3.0 meters.

        Major vein systems and exploration targets on the San José property are discussed in detail below and are further illustrated in the Figure below.

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Huevos Verdes

        The Huevos Verdes vein system is one of the most important targets on the property consisting of three to four discontinuous zones: HVN, HVS, HVC and HVR. The system is comprised of an array of sub-parallel veins striking 325° with dips ranging between 45° and 75° to the northeast that can be traced almost 2,000 meters along strike. Mineralization is hosted by the Jurassic Bajo Pobre Formation, close to the contact of andesitic lava flows with underlying volcaniclastics.

        The vein system has a pinch and swell nature and has numerous bends and jogs. Several subparallel veins and splays off the main vein have been identified. The width of the vein zone is variable, ranging from less than 1 meter to around 15 meters. With the exception of limited outcrops of the HVS, the remainder of the veins are blind targets, below a Cretaceous-Tertiary cover layer of up to 50 meters.

        Within the HVN and HVS zones, the strongest mineralization is restricted to sub-vertical 50 to 80 meters long ore shoots which can extend 50 to 200 meters vertically. The location of these shoots may correspond to structural bends and jogs.

        High-grade portions of the veins consist of banded to mottled quartz with irregular sulfide bands mineralized by fine-grained argentite and pyrite. Ruby silver and native silver are locally observed. The base metal content (Zn, Pb, Cu) of the veins and the amount of sphalerite, galena and chalcopyrite tends to increase with depth.

Huevos Verdes North (HVN)

        The main HVN vein is irregularly-shaped and pinches and swells along the 400 meters of strike. The vein width varies between 0.5 to 4 meters and the dip ranges between 65° to 70° to the north-northeast. The vein and surrounding host rocks have associated strong illitic and argillic alteration with minor propylitic and potassium feldspar alteration.

        The northern and southern extents of the vein have been closed off by drilling. At depth, mineralization is mostly closed off, except at the northernmost end of the zone. This zone is the weakest mineralized structure of the three Huevos Verdes zones. The strongest levels of gold and silver mineralization are restricted to two principal sub-vertical shoots, which are each approximately 50 to 80 meters long and can be traced approximately 150 to 200 meters vertically.

Huevos Verdes South (HVS)

        The HVS vein has been traced for approximately 520 meters along strike and ranges in width from 0.5 to 3 meters. The dip of the vein ranges from 42° to 75° to the north-northeast and the strike varies from 100° to 190°. The change in orientation has implications for mineralization and may explain the better mineralization and higher gold and silver grades at HVS compared to the HVN vein. Four main sub-vertical shoots, up to 80 meters long horizontally and up to 200 meters vertical trace, appear to control the majority of the mineralization. Mineralization is open to the north-northwest and similar to the HVN, gold and silver grades are strongest in the uppermost parts of the vein and appear to decrease with depth.

Huevos Verdes Central (HVC)

        The HVC vein has been traced approximately 400 meters along strike and ranges in width between 0.5 to 5.0 meters. The dip of the vein ranges from 70° to 75° to the north-northeast. The strongest mineralization is restricted to a gently plunging ore shoot 40 to 70 meters in width. The shoot has been traced for almost 300 meters and remains open at depth.

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Huevos Verdes Ramal (HVR)

        The HVR vein has been traced approximately 200 meters along an east-west strike and ranges in width from 1 to 3 meters. The vein is located between the HVC and HVS and has been traced vertically for 250 meters.

Frea Vein

        The Frea vein is hosted in Jurassic volcanics and controlled by northwest trending faults. The vein is a blind target below Cretaceous sediments and Tertiary basalts, discovered in 2003 as a result of test drilling an IP/resistivity target. The vein has been traced approximately 1,200 meters along its northwest-trending strike and vertically to 200 meters. The width of the vein varies from 0.5 to 7 meters and dips at approximately 52° to the northeast. The vein remains open in all directions except the northwest extent which is closed off by drilling.

Kospi Vein

        The Kospi vein is also hosted by Jurassic volcanics and controlled by northwest trending faults, however, it dips to the southwest at about 70°. Kospi is also a blind target beneath Cretaceous and Tertiary cover rocks, discovered in 2005 as a result of test drilling a IP/resistivity target. The vein has been traced for approximately 1,300 meters along its northwest strike at 308° and vertically to 230 meters. The thickness of the vein ranges from 0.25 to 9.5 meters. The vein remains open to the southeast but is closed off by drilling in its northwest extent.

Odin and Ayelén Veins

        The Odin and Ayelén veins are the two most northeasterly northwest-striking sub-parallel systems that have been drilled. As a result of the 2008 drilling program, Odin has been traced approximately 1.6 kilometers along strike and Ayelén 1.2 kilometers along strike, with both dipping to the southwest (Minera Andes News Releases, September 2, 2008 and January 9, 2009). Mach & Elliot (2009) reported an extension to these veins of 1.9 kilometers for Odin and 1.6 kilometers for Ayelén. Both of these vein systems were discovered by test drilling blind geophysical targets. The Odin vein remains open to the west along strike and at depth where it has been tested to 200 meters.

Other Vein Systems and Exploration Targets

        There are additional mineralized veins and targets identified within the San José property:

    Huevos Verdes Oeste (West) ("HVO")

    Aguas Vivas

    la Sopresa

    El Pluma West

    Pluma

    Pluma South

    Ramal Frea (Frea Satellite)

    Ramal Kospi

    Austri

    Frigga

    Roadside

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    Portugues

    Saavedra (Discovery Hill)

        These have been identified using a combination of geochemical and structural modeling, geophysical surveying and drilling.

Structural Controls on Mineralization

        The most important control on mineralization at San José is structure, which governs the formation and opening of faults and the creation of open space during the mineralizing event. The strike of the veins is not only related to vein width but also mineralization styles and gold and silver grades.

        Huevos Verdes veins have the best developed ore shoots with respect to grade and width at strike directions of 320° to 305°. Vein segments with strikes greater than 325° usually lack significant mineralization and are characterized by brecciation and fault gouge. These findings led to the conclusion that the Huevos Verdes vein system developed in a sinistral strike-slip setting. Counter-clockwise bending of a sinistral strike-slip fault creates a dilational setting, whereas clockwise bending creates a compressional environment. Therefore, open space will preferentially form in counter-clockwise bends whereas increased tectonic friction with fault gouge and brecciation will develop preferentially in a compressional setting along clockwise-rotated bends. With respect to the Huevos Verdes system, the best mineralization will generally occur where structures bend counter clockwise from the average strike (less than 325°). Mineralized shoots would be expected to occur along the vein system where vein strike bends towards less than 325°.

        Early north-northwest striking normal faults were established in the region due to Permian-Triassic rifting. Dextral east-west to west-northwest-trending wrench faulting associated with mineralization in the Deseado Massif occurred at 150 to 125 Ma. The Huevos Verdes vein system formed as sinistral extension fissures within this dextral wrench fault system. The Permian-Triassic north-northwest trending faults were reactivated and became hosts to mineralization.

        The Huevos Verdes system is discontinuous and displays counter-clockwise bending at the tips of mineralized sections. This geometry is interpreted to reflect formation of mineralized tension fissures with sinistral strike-slip displacement in between dextral master wrench faults. The bending indicates proximity to dextral east-west trending master faults. Dextral wrench faulting is thought to have occurred during mid to upper Jurassic times in the region and related to the early opening of the southern Atlantic. Outcrops of east-west striking, weakly-to-unmineralized quartz veins are exposed in the intermittent segments between the three zones of the Huevos Verdes system. East-west trending lineaments are rare but present in the northwestern Deseado Massif.

        Sinistral, north-northeast striking lineaments on the San José property, as illustrated in the figure immediately below, limit the known occurrences of the north-northwest striking mineralized veins such as Huevos Verdes. The Rio Pinturas and the San José lineaments form a prospective corridor, with no known mineralization either east or west of this corridor.

        Litho-stratigraphy may also play an important role in governing mineralization where certain litho-stratigraphic horizons favored the opening of fractures. Mapping in the Pluma Zone noted that the fracturing of rocks is by far more intense in andesitic lava flows than in underlying volcaniclastic rocks. Fracture-controlled wall rock alteration and mineralization is more pronounced in the lava flows. Host lithology may be a factor controlling the depth of mineralized shoots.

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        The structure at the Saavedra/Saavedra West (Discovery Hill) deposits has been interpreted to be a syn-volcanic graben, possibly a caldera, that developed within the Bajo Pobre Formation and infilled with sedimentary rocks of the La Matilde Formation (Colquhoun et al. 2007). A series of north-northwest trending steeply dipping gold-silver quartz veins and siliceous structures occur at Discovery Hill. These veins may have been emplaced along graben-bounding faults. This trend is sub-parallel to that at Huevos Verdes and IP/resistivity surveys have traced this trend from just northeast of Discovery Hill to a point that occurs 100 meters directly southwest of the HVS zone. A cross-section of the Horst and Graben structure at San José is presented below.

Cross section showing the horst and graben structure at San José

GRAPHIC

Drilling

        The following is information on the drill program on the San José property from 1998 to December 31, 2010. Information is respect of the period from September 30, 2010 to December 31, 2010 was prepared and provided by Minera Andes management.

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        From 1998 to December 31, 2010, 1152 RC and diamond exploration surface and underground drill holes totaling 218,761.54 meters have been drilled on the property. The table below gives the details on the program for each year to year-end 2010.

Year
  No. Drill Holes   No. Meters   Drill Hole Numbers   Core or RC   Company

1998

    38     3,956.00   EP-01 to 38   RC   Minera Andes

1999

   
21
   
1,648.00
 

EP-39 to 59

 

RC

 

Minera Andes

2000

   
29
   
3,698.21
 

EP-60 to 85 & EPD-01 to 03

 

RC & HQ core

 

Minera Andes

2001

   
30
   
5,113.24
 

HVD-1 to 30

 

HQ core

 

MSC

2002 - 2003

   
32
   
4,376.87
 

SJD-1 to 32

 

HQ core

 

MSC

2004

   
13
   
2,807.45
 

HVD-31 to 36 & SJD-33 to 39

 

NQ & HQ core

 

MSC

2005

   
211
   
43,730.12
 

SJD-40 to 215 & SJM-1 to 28A & MSC-4 to 8

 

BQ, NQ, HQ core & RC

 

MSC

2005 - 2006

   
178
   
25,100.36
 

SJD-216 to 330 & SJM 29 to 74

 

NQ & HQ core

 

MSC

2007

   
135
   
29,846.74
 

SJD-331 to 443 & SJM-75 to 95 & SJM-97

 

HQ core & NQ, BQ core

 

MSC

2008

   
85
   
18,915.05
 

SJD 444 to 523 & SJM-96 & SJM-100 to 103

 

HQ core & NQ, BQ core

 

MSC

2009

   
115
   
25,093.50
 

SJD-524 to 623 &
SJM-105 to 114

 

HQ & NQ core

 

MSC

2010

   
265
   
54,476
 

SJD-624 to 853 &
SJM-115 to 137
AVD-01 to 05

 

HQ & NQ core

 

MSC

January through June 2011

   
82
   
19,711
 

SJD-227, 323, 352, 719,
757, 767, 792, 815
SJD 854 to 923

 

HQ & NQ core

 

MSC

TOTAL

   
1,234
   
238,473
           

        The focus of the 2009 drill program was drilling on the Ramal Kospi, Ramal Frea and HVN veins to increase resources. The program also included drilling on IP-identified geophysical targets to delineate potential mineralization. Drilling totaled 25,093.50 meters in 115 holes for 2009.

        A total of 105 surface diamond drill holes totaling 21,389.30 meters were completed in 2009 by two truck-mounted Boart Longyear rigs, model LF-90 producing HQ core. Five of the surface holes were extensions of holes initially drilled in 2007 on the Ayelén vein.

        Holes drilled to the northwest and southeast of the Frea, Ayelén and Odín veins tested extension of these structures. Drilling to the north of these veins in 2009 identified the Laura vein, however, these drill holes did not return intercepts of any economic value.

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        Drilling on the IP targeted areas of Aguas Vivas, Portugués Sorpresa and Rosario identified veins but no significant mineralization was discovered. The Rosario vein is a pair of structures approximately 400 to 500 meters in length along strike with intermittent outcrops in the La Matilde Formation. Drilling was undertaken on the Rosario vein to check the behavior of the vein(s) within the Bajo Pobre Formation, however, the vein was discovered to be thin (10 centimeters) and unmineralized. The Sorpresa vein was previously intersected by RC drilling in 1998 with diamond drilling undertaken in 2009 to check the structures at depth. Both the Cerro Alto and Portugués structures were identified in regional exploration, however, drilling did not indicate significant mineralization.

        Four long and six short underground holes, SJM-series, were drilled horizontally in the HVC, Frea, Odín and Kospi workings totaling 3,704.20 meters. These holes were drilled to explore possible branches of the main veins.

        The 2010 drilling program focused on the Ayelén, Odín and Ramal Frea veins in order to increase resources and identify new areas of potential mineralization along the extensions of these veins. The drilling identified 11 previously unidentified east-west and northwest striking veins including the Micaela, Sofia, Antonella, Dos Lauras, Maria, Shala, Pacha Mara, Hera, Susana and Luli veins as well as important extensions of existing veins, such as the Ayelén Extension. Drilling was also undertaken at Aguas Vivas Portugués and Saavedra Oeste prospects to identify veins and mineralization.

Some of the Newly Identified Veins at the San José Mine

GRAPHIC

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Sampling Method and Approach

Summary of Sample Preparation, Analyses and QA/QC Program for the San José Property

Year
  Sample Prep Laboratory   Analytical Laboratory   Assay   QA/QC

Minera Andes RC drilling 1998 - 2000 and diamond drilling 2000

  Geolab (now ALS Chemex) Mendoza   Degerstrom   Fire Assay Fusion with direct coupled plasma (DCP) finish for Au.

Aqua regia digestion and DCP-atomic emission spectrometry for Ag, Cu, Pb, Zn, As and Bi.

Nitric acid digestion for Hg.
  Bondar Clegg laboratories (ALS Chemex) provided check analyses. No QA/QC program. Pulps and rejects no longer available for re-sampling.

MSC diamond drilling 2001

 

ALS Chemex, Mendoza

 

ALS Chemex, Mendoza

 

Unknown

 

Check analyses by Alex Stewart Laboratories in Mendoza. Limited QA/QC program, no pulps or rejects available for re-sampling. Limited core as most used previously for re-sampling or metallurgical work.

MSC diamond drilling 2002 - 2003

 

ALS Chemex, Mendoza

 

Alex Stewart Laboratory, Mendoza

 

4 FA/AA for Au and FA/Grav for Ag. ICP for Cu, Pb, Zn and As.

 

Check analyses by ALS Chemex, La Serena (Chile). Limited QA/QC program, no pulps or rejects available for re-sampling. Limited core as most used previously for re-sampling or metallurgical work.

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Year
  Sample Prep Laboratory   Analytical Laboratory   Assay   QA/QC

MSC diamond drilling 2004 - 2005

 

ALS Chemex, Mendoza

 

Alex Stewart Laboratory, Mendoza

 

4 FA/AA for Au and FA/Grav for Ag. ICP for Cu, Pb, Zn and As.

 

Check analyses by ALS Chemex, La Serena (Chile). QA/QC program designed by AMEC implemented by MSC in 2005, commencing in drill hole SJD-40. Twin, duplicate, CRM and blank samples accounting for 1 in 30 samples or 3%. Granulometric tests.

MSC diamond drilling 2006-July 2007 and underground channel sampling

 

ALS Chemex, Mendoza

 

Alex Stewart Laboratory, Mendoza

 

4 FA/AA for Au and FA/Grav for Ag. ICP for Cu, Pb, Zn and As.

 

Check analyses by ALS Chemex, La Serena (Chile). QA/QC program with Twin, duplicate, CRM and blank samples.

MSC diamond drilling July 2007-June 2010 and underground channel sampling

 

In house laboratory and Alex Stewart Laboratory, Mendoza

 

In house