SPOKANE,
WA––November 26, 2007–– Minera
Andes Inc. (TSX: MAI and US OTC: MNEAF) is pleased to announce results of
a NI 43-101 Technical Report to be filed that includes new mineral
resources identified from 2007 exploration drilling, underground
development, and conversion of 2006 mineral resources into mineral
reserves at the San Jos� project in Santa Cruz province, southern
Argentina. In addition the report also quantifies areas of mineral
potential based on drilling. The San Jos� mining operation is expected
to reach full production of 750 tonnes per day (t/d) by year-end and the
process plant in commissioning is forecast by Minera
Andes to reach full capacity in first half of 2008. The San Jos� project is
operated by Minera Santa Cruz S.A.
("MSC") (owned 51% by Hochschild
Mining plc ("Hochschild") (HOC.L
Reuters, HOC.LN Bloomberg, London Stock
Exchange) and 49% by Minera Andes.
Some highlights of
the new Technical Report by AMEC Americas Limited (AMEC) are as follows (all
amounts are expressed in U.S. dollars, unless otherwise indicated):
- Proven and Probable
Mineral Reserves: at June 30, 2007 are: 2.4 million tonnes grading
6.79 g/t gold and 430 g/t silver. The economic cutoff
used to calculate the reserves is $94/t (using a price of $500 for
gold and $9.00 for silver).
- Gold contained: 602,000 ounces
of Proven and Probable Mineral Reserves
- Silver contained: 33
million ounces of Proven and Probable Mineral Reserves
- Production: 750
t/day at full production mining rate
- Forecast average
operating costs of: $3.92 per ounce silver equivalent
- Mine life increased from
5.2 yrs to 9 yrs
- Forecast average gold
production: 64,000
ounces per year at full production
- Forecast average silver
production: 3.9 million ounces per year at full production
- Mineral potential was
estimated for three targets to total: 1.6-3.4 million tonnes, with
6-10 g/t gold and 200-600 g/t silver
The new Technical
Report by AMEC entitled "San Jos� Property San Cruz Province,
Argentina NI 43-101 Technical Report", was authored by Pierre Rocque (P. Eng.), William Colquhoun (FSAIMM),
Emmanuel Henry MAusIMM (C.P.), and Armando
Simon, R.P. Geol., AIG, appropriately qualified
persons according to NI 43-101. The results from the new report
indicate that the 2006 core drilling program (128 holes totaling 22,047 meters)
and 2007 development and drilling on the Kospi
and Frea veins at San Jos� increased silver and
gold reserves by 100% from the level announced in the our September 2007
Technical Report. Work at San
Jos� in 2007 has increased the mineral resources
and mineral reserves from a 38,000-meter exploration drilling campaign
currently underway, and development of the underground workings. We
expect further increases in the mineral reserves and mineral resources from
these programs. At the current mining production rate of 750 t/d the new mineral reserves that include the Kospi vein indicate a mine life of 9 years at San Jos� an
increase of 73 percent over the existing mine life of 5.2 years.
Allen Ambrose,
president of Minera Andes, said "Even with
the new drilling, less than 15% of the known 40 kilometers
of the vein trends at San Jos�
have been drilled. The drilling in 2006-2007 has increased the
mine’s mineral reserves by 100%. The joint venture is
drilling 38,000
meters in the current exploration program to
define new mineral reserves and continue evaluating new targets. With
commissioning of the mine and the ramping up of production it is an
exciting time for Minera Andes. Now we are developing
the mineral reserves to support the plans of MSC to double production to 1,500 t/d. The mineral potential estimates
on drilled targets further highlights the potential to increase
the mineral reserves."
Mineral
Potential
The new Technical Report also estimates the mineral potential at San Jos� based on
drilling outside the existing mineral reserves/resources. Mineral
potential was estimated using long section based blocks with 2 to 8 drill
holes per target for the Odin, Aylen, and Frea extension targets. The mineral potential
for these targets based on the current drilling is estimated to total 1.6
to 3.4 million tonnes ranging from 6 to 10 g/t gold and 200 to 600 g/t
silver.
The estimation used a
conventional method, based on the interpretation of mineralized blocks on
vertical longitudinal sections, the calculation of block areas, average
horizontal widths and weighted average grades of the mineralized
intersections, and the subsequent calculation of block tonnages and
weighted average grades.
AMEC’s estimation has also
considered the following procedures and assumptions:
- For Ayel�n
and Od�n, AMEC used the composite vein
true thicknesses and grades provided by Minera
Andes. Composite grades were capped at 10 g/t Au and 500 g/t Ag.
- For Frea,
AMEC used the individual sample lengths and assays. Individual
assays were capped at 25 g/t Au and 1,000 g/t Ag. In such cases
where splits were present in the proximity of the main vein (less
than 10 m
along the hole), the estimation considered the combined thickness
and weighted average grade of the split and the vein. Splits located
at greater distances were not included in the estimation.
- For the estimation of
horizontal thicknesses, AMEC assumed that all veins dip 70�, and
that all holes were drilled with 50� dip.
- Whenever necessary,
horizontal thicknesses were diluted to 1 m minimum mining
width.
- AMEC considered a 2.65
t/m3 bulk density.
It should be
emphasized that this estimation is conceptual in nature, that there has
been insufficient exploration to define a mineral resource, and that it
is uncertain if further exploration will result in the target being
delineated as a mineral resource.
Potential
Tonnages and Grades of Selected Exploration Targets
Vein target
|
Tonnage (Million tonnes)
|
Gold (g/t)
|
Silver (g/t)
|
Minimum
(Min)
|
Maximum
(Max)
|
Min
|
Max
|
Min
|
Max
|
Ayel�n
|
0.2
|
0.4
|
7
|
11
|
300
|
700
|
Odin
|
1.0
|
2.0
|
6
|
10
|
200
|
600
|
Frea Extensions
|
0.4
|
1.0
|
6
|
10
|
200
|
600
|
Total
|
1.6
|
3.4
|
6
|
10
|
200
|
600
|
San Jos� Mine
The drilling completed on the San Jos� mine at year end 2006 to June
30th, 2007 indicate an increase of 88% in contained gold and silver and
the mine now contains over 71 million silver equivalent ounces in the
Proven and Probable Mineral Reserve categories (see reserves tables
below). This increase in mineral reserves is primarily due to the
addition of the Kospi vein and new development
and drilling on trend of the Frea vein. Estimated
mine life is 9.0 years with the current reserves at a 750 t/d mining
rate.
The Kospi vein, discovered in 2005, is the first target
that has been converted to a mineral reserve out of several high-priority
drill targets identified on the property through early reconnaissance
drilling and surface exploration programs. Other priority targets are
Odin (A and B), Ayelen, Flor,
Huevos Verdes West, Kospi 1, Kospi South, Lourdes, Frigga, Aguas Vivas, Roadside, and Portuguese West. Though
these targets are early stage we believe that they have significant
discovery potential for gold and silver mineralization. Drilling is
planned for these targets as part of an ongoing 38,000 meter, $4
million exploration drilling program started earlier this year. Currently
over 10,000
meters have been drilled for this field seasons
2007-2008 program.
The technical report
by AMEC, uses a long-term gold price of $575 per
ounce (oz) and $9.00 per oz for silver for estimating mineral reserves in
its economic analysis. The average cash operating costs are
estimated at $94/tonne of ore processed, or $235/ounce gold equivalent. AMEC
estimates the San Jos�
a remaining capital expense from the initial capital cost budget to the
amount of approximately $20.8 million. The base case Net Present Value
(NPV), using an 8% discount rate, is $91 million. Based on the
parameters listed above, the undiscounted NPV representing cumulative
cash flow is $150 million.
The San Jos� mine is ramping up to full
commercial production from the start up in the third quarter of 2007 to
full commercial production. Approximately eleven kilometers of underground workings have been
developed at the mine along with the associated infrastructure. Power is
supplied by four diesel generators. The mine is designed to produce 750 t/d of ore from three separate structures, the Frea, Huevos Verdes, and Kospi veins,
using underground mining methods. Mechanized cut and fill mining
will be used as the primary mining method supplemented with conventional
cut and fill mining.
The processing
facility utilizes a Gekko
Gravity-Flotation-Intensive Leaching (GFIL) process, direct electro
winning and resin column absorption for the production of the final
product a gold-silver dor�. Due to the
potential for additional risk with a newer process technology that might
result in lower throughput and metallurgical recoveries AMEC has reduced
expected recovery of gold to 75% and silver to 65% in the first year of
production. They have assumed the average life of mine recovery of
90% for gold and 88% for silver in the second year. As a result
there is some risk that additional plant modifications and commissioning
time could be required to achieve these increased recoveries and that
there would be additional capital costs.
Mineral Resources,
Reserves
The new San Jos� mineral resource and mineral reserve estimates, mine
life, and mining rates, disclosed herein are based on work from our joint
venture partner that was audited and adjusted by independent qualified
persons Emmanuel Henry, MAusIMM (CP), and
Pierre Rocque, P. Eng. at AMEC. The
mineral resources and reserves remain open along strike and at depth in
some areas.
At June 30, 2007
total Measured and Indicated Mineral Resources at the San Jos� Project
were 602,000
ounces of gold and 38..0 million ounces of silver,
contained in 2.4 million tonnes grading 7.91 g/t gold and 500 g/t silver
or 71 million ounces of silver on a silver equivalent basis (see table
below). An additional 58,000 ounces of gold and 3.3 million
ounces of silver, in 230,000 tonnes, grading 7.80 g/t gold and 452 g/t
silver are classified as inferred resources. The economic NSR cutoff used to estimate the mineral resources is
$45/t (using a price of $500 per ounce for gold and $9.00 per ounce for
silver). Gold mill recovery used for the mineral resource estimate is
89.65% and silver mill recovery is 90.49%. Gold commercial recovery used
for the mineral resource estimate is 99.68% and 99.75%.
Mineral Resources* – Measured and
Indicated
Area Resources
(6/30/07)
|
Grades
|
Classified Resource
|
Contained Ounces
|
Au (g/t)
|
Ag (g/t)
|
Total Resource (t)
|
Measured (t)
|
Indicated
(t)
|
Gold
(oz)
|
Silver
(oz)
|
Silver equivalent
(oz)
|
Huevos Verdes
|
7.04
|
520
|
616,000
|
290,000
|
325,000
|
139,000
|
10,296,000
|
17,941,000
|
Frea
|
8.72
|
384
|
950,000
|
354,000
|
596,000
|
266,000
|
11,745,000
|
26,375,000
|
Kospi
|
7.63
|
622
|
800,000
|
0
|
800,000
|
196,000
|
15,991,000
|
26,771,000
|
Total
Project
06/30/07
|
7.91
|
500
|
2,365,000
|
645,000
|
1,721,000
|
602,000
|
38,032,000
|
71,143,000
|
Total Project
Oct. 21, 2005
|
9.32
|
494
|
1,097,000
|
167,000
|
930,000
|
327,000
|
17,343,000
|
35,328,000
|
Total Project Dec
31, 2006
|
8.33
|
522
|
1,779,000
|
291,000
|
1,488,000
|
477,000
|
29,847,000
|
56,083,000
|
Percentage
change since Dec 31, 2006
|
|
|
+33
|
|
|
+26
|
+27
|
+27
|
*Note: Contains
100 percent of the resources, Minera Andes ownership of the project is 49%. Mineral
Resources are inclusive of mineral reserves. Mineral resources that are not
mineral reserves do not have demonstrated economic viability. Silver/gold
equivalency 1oz gold = 55
oz
The resource models
were developed using industry-accepted methods. AMEC validated the
model estimates, and after some adjustments, found them to reasonably
estimate grade and tonnage. The mineral resource estimates are compliant
with CIM Definition Standards for Mineral Resources and Mineral Reserves
as incorporated by reference in NI 43–101. AMEC notes,
however, that the resource classification criteria applied are generous
and are at the limit of what AMEC would qualify as reasonable. AMEC also
notes biases of 18% and 21% for gold and silver, respectively, at Huevos Verdes South. Even
larger biases are observed at Huevos Verdes Ramal. This may not
have a material impact at the scale of the property, but it will have a
local impact.
At June 30th, 2007
the Proven and Probable Mineral Reserves, based on an overall NSR cutoff off of $94/t (using
a price of $500/oz for gold and $9.00/oz for silver), are 2.4 million
tonnes at 6.79 g/t gold and 430 g/t silver, containing 521,000 ounces
of gold and 32,986,000
ounces of silver. The mineral reserves also
take into account marginal blocks of ore located on the periphery of
higher grade zones. The NSR cutoff for
these blocks was $45/t. The marginal cutoff was
defined by the value of ore, which meets the variable costs, but not the
fixed costs. A 15% unplanned dilution and a 5% mining loss are used in
the calculation for the October 21, 2005 mineral reserves and a 12%
unplanned dilution and 5% mining loss has been used in the April 30th,
2007 and June 30th, 2007 mineral reserve estimations.
Mineral Reserves*
- Proven and Probable
Area Reserves
(6/30/07)
|
Grades
|
Classified Reserve
|
Contained Ounces
|
Au (g/t)
|
Ag (g/t)
|
Total Reserve
(t)
|
Proven
(t)
|
Probable (t)
|
Gold
(oz)
|
Silver
(oz)
|
Silver Equivalent (oz)
|
Huevos Verdes
|
5.62
|
417
|
595,000
|
307,000
|
288,000
|
108,000
|
7,974,000
|
14,454,000
|
Frea
|
7.77
|
343
|
937,000
|
350,000
|
587,000
|
234,000
|
10,321,000
|
24,361,000
|
Kospi
|
6.52
|
536
|
854,000
|
-
|
854,000
|
179,000
|
14,722,000
|
25,462,000
|
Total Project Oct.
21, 2005
|
7.7
|
406
|
1,160,859
|
174,241
|
986,626
|
288,000
|
15,229,000
|
32,515,000
|
Total Project
4/30/07
|
7.89
|
417
|
1,195,000
|
311,000
|
884,000
|
303,000
|
16,028,000
|
34,224,000
|
Total
Project
6/30/07
|
6.79
|
430
|
2,386,000
|
657,000
|
1,729,000
|
521,000
|
33,017,000
|
64,277,000
|
Percentage
Change
|
|
|
+100
|
|
|
+72
|
+106
|
+88
|
*Note: Contains
100 percent of the reserves, Minera Andes ownership of the project is 49%.
Silver/gold equivalency 1oz Au = 60 oz Ag.
The mineral resource
and mineral reserve estimates are based on (76,478 meters)472 drill holes and trenches and 2,733 channel
samples taken from underground workings constructed at Huevos Verdes, Frea, and Kospi. The
nominal spacing at Huevos Verdes
and Frea is approximately 35 meters along
strike (horizontally) and 50 meters vertically and at Kospi it is approximately 40 meters by 40 meters.
The following
summarizes the key assumptions, parameters and methods used in the
mineral resource and mineral reserve estimates:
- Gold assays were cut to
65 g/t, 10 g/t, 50 g/t, 50 g/t and 50 g/t and 30 g/t at Huevos Verdes South,
Central, North, Ramal, at Frea, and at Kospi,
respectively. Silver assays were cut to 6,000 g/t, 500 g/t, 4,000
g/t, 5,000 g/t, 3,000 g/t and 2,700 g/t at Huevos
Verdes South, Central, North, Ramal, at Frea and at Kospi, respectively.
- Density values used for the
estimate are 2.595 t/m3 for Huevos Verdes, 2.611
t/m3 for Frea and Kospi.
- The geological model was
developed using a series of northeast oriented sections spaced
approximately 5
meters to 50 meters
apart.
- Assays were composited to full vein-width interval.
- The estimation was done
using Ordinary Kriging coupled with
oriented search ellipses.
- Block grades were
estimated based on interpretation of geological parameters logged in
drill holes.
- Included in the mineral
resource estimate at Huevos Verdes and Frea are
2,733 chip channel samples taken from the underground workings.
Minera Andes is a gold, silver and
copper exploration company working in Argentina. The Corporation holds about 410,000 acres
of mineral exploration land in Argentina
including the co-owned San Jos�
silver/gold mine that has started initial production. Minera Andes is also exploring the Los Azules copper project in San Juan province, where an exploration
program is underway to define a resource. Other exploration properties,
primarily silver and gold, are being evaluated in southern Argentina.
The Corporation presently has 166,832,517 shares issued and outstanding.
Allen V. Ambrose, Minera Andes' President, who is an appropriately
"qualified person" as defined by National Instrument 43-101,
has supervised the preparation of the information in the news release.
This news is
submitted by Allen V. Ambrose, President and Director of Minera Andes Inc.
For further information, please contact: Art Johnson at the Spokane office, or Krister
A. Kottmeier, investor relations – Canada, at the Vancouver office. Visit our Web site: www.minandes.com.
Spokane Office
111 East Magnesium
Rd.,
Spokane, WA 99208 USA
Phone: (509) 921-7322
E-mail: mineraandes@minandes.com
|
Vancouver
Office
Suite 911 - 470 Granville St,
Vancouver, BC. V6C 1V5
Phone: (604) 689-7017 / 877-689-7018
E-mail: ircanada@minandes.com
|
Caution Concerning
Forward-Looking Statements:
This press release contains certain "forward-looking
statements", including, but not limited to, the statements regarding
the Company's strategic plans, evolution of mineral resources and
reserves, work programs, development plans and exploration budgets at the
Company’s San Jos�
Project. Investors should be aware that the introduction of new
technology such as ILR can create added risk in achieving metallurgical
performance. The forward-looking statements express, as at the date of
this press release, the Company's plans, estimates, forecasts,
projections, expectations or beliefs as to future events and results. Forward-looking
statements involve a number of risks and uncertainties, and there can be
no assurance that such statements will prove to be accurate. Therefore,
actual results and future events could differ materially from those
anticipated in such statements. In particular, there can be no assurance
that commercial production at the San Jos� mine will be achieved on a
timely basis, or at all, that production capacity at the San Jos� mine
will be successfully increased, that resources and reserves at the San
Jos� mine will be increased or that Minera
Andes will successfully raise the funds necessary to maintain its
interest in the San Jos� mine. Risks and uncertainties that could cause
results or future events to differ materially from current expectations
expressed or implied by the forward-looking statements include, but are
not limited to, factors associated with fluctuations in the market price
of precious metals, mining industry risks, risks associated with foreign
operations, the state of the capital markets, environmental risks and
hazards, uncertainty as to calculation of mineral reserves and other
risks. Reference is made to the risk factors and uncertainties described
in the Company's continuous disclosure record, a copy of which is
available under the Company's profile at www.sedar.com. In addition, Minera Andes' joint
venture partner, a subsidiary of Hochschild
Mining plc, and its affiliates do not accept responsibility for the use
of project data or the adequacy or accuracy of this release. Similarly, Hochschild denies any responsibility for Minera Andes's NI 43-101
Technical Report or for any of Minera Andes's Canadian securities filings or for any
information that Minera Andes has given to the
securities markets and any such responsibility is hereby disclaimed in
all respects.
Cautionary Note to U.S.
Investors:
The United States
Securities and Exchange Commission (the "SEC") permits mining
companies, in their filings with the SEC, to disclose only those mineral
deposits with "mineral reserves" that a company can
economically and legally extract or produce. We use certain terms in this
press release, such as "mineral resources", that the SEC
guidelines strictly prohibit us from including in our filings with the
SEC.
THE TSX HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE
ADEQUACY OR ACCURACY OF THIS RELEASE.
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