Andina First Quarter 2012
Update
ANDINA
Minerals Inc. (TSXV:
ADM) (�Andina� or the �Company") wishes to
update the market on progress made during the first quarter of 2012 on the
Company�s Volcan project.
�Our
environmental permitting and engineering teams have made significant progress
advancing their respective studies in 2012,� said George Bee, President and
CEO. �Our metallurgical work program in support of a feasibility study is
complete and final reports are currently being drafted. Preliminary
indications suggest that grade recovery curves will be similar to that reported
in the 2011 prefeasibility study. The Environmental Impact Assessment
(�EIA�) is substantially complete and we expect to submit it to the authorities
in the second quarter of 2012 after we conclude discussions with both government
agencies and local communities. The feasibility study could be delayed as
late as the first quarter of 2013, while the Company continues to optimize all
aspects of the study, including sourcing of people, products and material which
is taking longer than anticipated.�
Volcan Project Update:
�
In January 2012, the Company reviewed
and finalized a detailed project description of the Volcan
Gold Project (�Volcan�)
for its EIA and construction permit application, for the initial development
plan.
o Extensive
metallurgical engineering studies to support a feasibility study for Volcan are now largely complete. These studies were aimed
at optimizing reagent consumption and providing an acceptable level of detailed
information for any independent engineer reviews.
o Management has
included a Sulphidation, Acidification, Recycling, and Thickening circuit into
the Volcan project description to reduce operating costs and eliminate risk.
o The project
description now includes a combined mill-heap leach production rate of 60,000
tonnes of ore processed per day using the same or similar crushing equipment as
identified in the prefeasibility study where total throughput was set at 55,000
tonnes per day.
o Additionally, new
processes to mitigate environmental risks associated with tailings have been
added to the project description. These measures have been included to give
comfort to stakeholders that Andina is proposing all reasonable measures, above
and beyond those presented in the prefeasibility study, to save water, protect
the environment and eliminate risk associated with the project.
�
During the first quarter of 2012, the
Company successfully completed a study linking idiosyncrasies in the Volcan
geology and mineralogy to the metallurgical results that have been seen in the
metallurgical test work conducted over the past three years.
o The study has
significantly advanced our knowledge of the Dorado ore bodies that form the
Volcan project. The protocols developed are applicable to the wider geologic
setting and give management confidence that Andina can manage a gold deposit in
the area with minimal operational risk.
o The Company has now
developed a block-model that clearly identifies low pH material, thought to be
associated with exotic sulphate salts, therefore further de-risking the planned
selective mining and processing practices to be employed at Volcan.
o Having now identified
a limited horizon of low pH material at Volcan, the Company believes it can
improve heap leach performance by now directing this material to either waste
or the proposed mill where it can be effectively processed. The Company
anticipates improvements in reagent consumption having developed a protocol to
manage low pH material related to sulphate salts.
�
The 2011/2012 Development Program Field
Season was successfully completed in April 2012.
o The Company�s
objective was to gather the remaining essential data for the feasibility study.
Information includes: detailed investigation and additional drilling to
establish pit-slope angles, condemnation drilling under key project facilities,
water well drill and pump test investigations to support the site
hydro-geochemical and hydrological models, geotechnical and site foundation
investigations.
�
Feasibility Study Status:
o We are currently
evaluating the final results of the metallurgical program to confirm the
optimal plant flowsheet and to finalize projected recoveries and reagent
consumptions.
o The geotechnical
investigation has been completed on site for all the proposed site facilities.
o Geotechnical drilling
in the mine area to finalize the pit slopes is complete.
o The general site
layout has been finalized.
o Preliminary
engineering has been completed and general arrangements have been prepared
along with the associated material takeoffs for the process plant.
o Requests for
quotations have been issued for all major equipment and quotations are in hand
for approximately half of the items.
o Contractor bid
packages are being sent out to obtain preliminary prices for site construction.
o Preliminary designs
for the site infrastructure have been prepared and bid prices are being
solicited for construction of these facilities as part of the general
contractor bid packages.
o The first draft of
Volcan�s feasibility study is nearing completion and is expected for initial
internal review around mid-year. It is anticipated that there will be several
scope differences between the draft feasibility study and the prefeasibility
study which was published in February 2011. The concept and scale of mineral
processing is expected to be largely the same, employing a spilt leach and
milling scenario, however, the intention is to increase the use of the
equipment outlined in the prefeasibility study, with the anticipated result of
higher throughput in the mill. The Company intends to take a more
environmentally robust approach to tailings management and intends to move from
thickened tailings envisioned in the prefeasibility study to dry stack tailings
and to add a cyanide destruction circuit. These changes would likely be
favorable for capital costs by reducing the need for tailings impoundment
construction but will be offset due to the need for filtering equipment. The
feasibility study is expected to include SART to control copper values in heap
leach solutions, which if left unchecked would negatively impact cyanide
consumption and therefore operating cost. The differences outlined above and
inflation since publication of the prefeasibility study are anticipated to
result in several changes to the economic metrics published in the
prefeasibility study and as a consequence prior estimates should not be relied
upon and should only be considered in the light of noted changes.
o Based on the
anticipated changes to the Volcan project description in comparison to the
prefeasibility study and the current bearish climate for mining investment, the
Company will use the coming months, while environmental permitting is advanced
through the evaluation process, to refine and optimize the first draft of the
feasibility study, including sourcing of people, products and material, which
is taking longer than anticipated. The feasibility study could be delayed as
late as the first quarter of 2013.
�
The Company intends to delay its
submittal of the EIA for Volcan until the end of the second quarter of 2012 in
order to provide the Company additional opportunities to meet with governmental
officials and communities prior to submittal.
�
On January 1, 2012, Mr. Robert (Bob)
Rose assumed the role of Chief Operating Officer for Andina. Bob is a
senior mine development professional who reinforces Andina�s internal team and
will provide leadership in the preparation of the economic studies and
development of Volcan.. It should be noted that Bob
was the Project Manager for the Volcan Project in his former position with
Kappes Cassidy & Associates and the transition has been seamless.
�
In February 2012, Dr. Annick Chouinard
assumed the role of Vice President of Exploration for Andina. Annick is a
senior geologist having extensive experience with epithermal sulphidation
deposits. Annick augments our existing geological team and, with the
completion of Volcan�s feasibility study, will provide exploration leadership
on Andina�s under-explored land holdings.
�
As at March 31, 2012 the Company had
working capital of $9.8 million and cash-on-hand of $14.3 million.
�
First quarter net loss was $0.4 million,
or $0.003 per share.
Dr.
Annick Chouinard, Vice President of Exploration of Andina and a qualified
person for the purposes of National Instrument 43-101 of the Canadian
Securities Regulators, has reviewed the scientific and technical information
contained in this press release.
About Andina Minerals Inc.
Andina�s
primary focus is mining exploration and development in Chile. The
Company�s flagship development project is the 100%-owned Volcan Gold Project,
strategically located in the prolific Maricunga Gold Belt.
In
February 2011, Andina announced the results of a positive pre-feasibility study
for the Dorado deposits of Volcan. Initial Proven and Probable Mineral Reserves
are 6.6 million ounces of gold at an average grade of 0..73
g/t contained in 283 million tonnes of ore. In addition, there remains
2.4 million ounces of Measured and Indicated gold resources at an average grade
of 0.68 g/t contained in 110 million tonnes of ore plus 1.5 million ounces of
gold in the Inferred category contained in 73 million tonnes of ore at an
average grade of 0.65 g/t Au.
Andina
is progressing with EIA submission in the second quarter of 2012 and
finalization of a feasibility study for Volcan.
In
addition to Andina�s extensive underexplored land position surrounding Volcan,
the Company holds two other mineral properties located within Chile�s primary
mining regions.