During the third quarter, the bulk of the drilling (72 of the 90 holes)
was infill for the purpose of upgrading existing inferred resources to the
measured and indicated categories so that they can be incorporated into
the production plan. This infill drilling amounted to 16,844 meters and
was concentrated on the Micaela, Sofia, Luli, Susana, Antonella, and 861
Split veins. Results of the infill drilling are in line with
expectations.
The balance of the drilling (18 of the 90 holes) was exploration on
step-out targets to extend the resources on existing veins. This
exploration drilling totalled 4,483 meters. Assay results have been
received on eleven of these holes and are shown in Exhibit 2. While no new
significant veins were intersected, low grade intercepts on the eastern
extension of the Odin vein in Hole SJD-998 and the southern extension of
the Huevos Verdes South vein in Hole SJD-1011 are encouraging because
these intercepts open up exploration potential for extending these veins
further east and south beyond the current known limits of mineralization
(Figure 1). Resources defined by the exploration and infill drilling will
be reported as part of the year end resource update, which will be
released at the end of the first quarter of 2012.
A geophysical survey was commenced comprising of 342 line-kilometers of
gradient array Induced Polarization ("IP") and 25 line-kilometers of
pole-dipole array IP. The survey will cover an area of about 16,000
square kilometers in the southern part of the joint venture
property. This data will complement magnetic surveys that were
completed over the same area during the first half of the year, and the
geophysical data will be used to identify drill targets for 2012.
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 new surface magnetic data and induced polarization
geophysics data.
Status of Proposed Merger with US Gold: On June 14,
2011 the Company announced that Mr. Rob McEwen (who is the company's
Chairman and CEO and owns 30% of the shares of the company) proposed to
combine the Company with US Gold Corporation to create a high-growth,
low-cost, mid-tier silver producer operating in the Americas, listed on
the New York and Toronto Stock Exchanges. The Corporation entered into a
definitive arrangement agreement on September 22, 2011, wherein each
Minera Andes shareholder would receive 0.45 of a share exchangeable into a
US Gold share for every one (1) Minera Andes share held. Minera Andes
shareholders of record at the close of business on the record date,
December 12, 2011, will be entitled to notice of and to vote at the
special meeting. The special meeting will be held in Toronto on January
19, 2012. The venue will be announced shortly.
About Minera Andes: Minera Andes is an exploration
company exploring for gold, silver and copper in Argentina with three
significant assets: One, a 49% interest in Minera Santa Cruz SA, owner of
the San Jose Mine that is located near Goldcorp's Cerro Negro project;
Two, 100% ownership of the Los Azules copper deposit; Three, 100%
ownership of a large portfolio of exploration properties in Santa Cruz
province, Argentina, including properties bordering the Cerro Negro
project. The Company had $45 million USD in cash as at September 30, 2011
with no bank debt.
About Minera Santa Cruz: Minera Santa Cruz SA is a
joint venture owned 51% by Hochschild Mining Argentina, a wholly owned
subsidiary of Hochschild Mining plc, and 49% by Minera Andes S.A., a
wholly owned subsidiary of the Corporation. The joint venture owns and
operates the San José property.
About Hochschild Mining plc: Hochschild Mining plc is
a leading precious metals company listed on the London Stock Exchange
(HOCM.L / HOC LN) with a primary focus on the exploration, mining,
processing and sale of silver and gold. Hochschild has over forty years of
experience in the mining of precious metal vein deposits and currently
operates four underground vein mines, three located in southern Peru, one
in southern Argentina and one open pit mine in northern Mexico. Hochschild
also has numerous long-term prospects throughout the Americas.
