Andean American
Gold Corp.
("Andean" or the
"Company") (TSX VENTURE:AAG)(FRANKFURT:AQN) reports that for
the three months ended June 30, 2012, it has recorded a net loss
US$13,610,824 or US$0.09 per share compared to a
net loss of US$7,568 or US$0.00 per share for the
same period in 2011. This was mainly due to a write-off of exploration
properties of $19,185,013 for the three month ended June
30, 2012 which is as a result of the anticipated closing of the
transaction with Lupaka mentioned below. Andean ended
the quarter with a cash position of US$14,612,605 and a working
capital surplus of US$13,029,640.
In November 2011,
the Company announced that it had retained Paradigm Capital Inc., as
its financial advisor to conduct an analysis of the strategic alternatives
available to the Company, and on July 5, 2012, the Company and Lupaka Gold Corporation ("Lupaka") announced the signing of a binding Letter of
Intent that provides for a combination of the two companies (the "Business
Combination") to create a new Peru-focused
gold exploration and development company. Under the terms of the Business
Combination, Andean American shareholders will receive 0.245 shares of Lupaka for each share of Andean American owned, resulting
in the shareholders of Andean American owning 45.27% of Lupaka
upon the completion of the Business Combination. The meeting of shareholders is
planned for September 21, 2012 to approve the transaction.
Selected Financial
Information
(Expressed in United
States Dollars, except share capital amounts):
|
June 30,
2012
|
June 30,
2011
|
Net Loss for the period
|
$13,610,824
|
$7,568
|
Loss per share
|
$0.09
|
$0.00
|
Total
assets
|
$32,615,817
|
$64,251,792
|
Working capital surplus
|
$13,029,640
|
$19,999,255
|
Mineral properties
|
$8,562,538
|
$39,405,443
|
Share Capital:
|
|
|
Outstanding
|
150,976,810
|
143,095,892
|
Warrants
|
2,500,000
|
5,589,368
|
Options
|
6,850,000
|
5,977,588
|
Cash Flow and Liquidity
As at June 30, 2012,
Andean had working capital surplus of US$13,029,640, compared to
a working capital surplus of US$19,999,255 at June 30,
2011. For the three months ended June 30, 2012, Andean
used cash of US$914,527, which included cash used in operations
of US$938,275, expenditures on plant and equipment and mineral
properties and deferred costs of US$1,013,017. This was offset
by financing activities of $1,036,765.
The information above
should be reviewed in conjunction with the Company's unaudited consolidated
financial statements, management discussion and analysis, for the three months
ended June 30, 2012 that will be available shortly on www.sedar.com. For further information call (416)
368-9500 or toll free: 1-888-356-4784 or visit our website at www.AAGgold.com.
Andean is a Canadian based
exploration and development company that has concentrated its operations and
exploration activities in Peru,
a country with a long and successful history in mining and the necessary
infrastructure and mining skills to support the growth of its mining industry.
The Company's key asset is its 31,600 hectare Invicta
gold-silver-copper advanced exploration stage project located in the Huaura Province. Andean also owns
approximately 17% of Southern Legacy Minerals Inc. ("Southern
Legacy"), formerly called Sinchao Metals
Corp ("Sinchao"), a company listed on
the TSX-V trading under the symbol 'LCY', which has properties in Peru
and Chile.
On behalf
of Andean American Gold Corp.,
Bruce Ramsden, Vice President, Finance and CFO
This news release may
contain forward-looking information within the meaning of the Securities Act (Ontario)
("forward-looking statements"). Such forward-looking statements may
include the Company's plans for its mineral projects, the overall economic
potential of its properties, the availability of adequate financing and involve
known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements expressed or implied by such
forward-looking statements to be materially different. Such factors include,
among others, risks and uncertainties relating to potential political risks
involving the Company's operations in a foreign jurisdiction, uncertainty of
production and costs estimates and the potential for unexpected costs and
expenses, physical risks inherent in mining operations, currency fluctuations,
fluctuations in the price of gold and other metals, completion of economic
evaluations, changes in project parameters as plans continue to be refined, the
inability or failure to obtain adequate financing on a timely basis, and other
risks and uncertainties, including those described in the Company's Financial
Statements, Management Discussion and Analysis and Material Change Reports
filed with the Canadian Securities Administrators and available at www.sedar.com.
This press release is not
an offer to sell or the solicitation of an offer to buy the securities, nor
shall there be any sale of the securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to qualification or
registration under the securities laws of such jurisdiction. The securities
being offered have not been, nor will they be, registered under the United
States Securities Act of 1933, as amended and such securities may not be
offered or sold within the
United States absent an applicable exemption from U.S. registration
requirements.