SPOKANE, WA, March 27 /PRNewswire-FirstCall/ - Minera Andes Inc. (TSX: MAI and US OTC: MNEAF) announced today details of the San Jose mine performance to 31 December 2007. The San Jose project is operated by Minera Santa Cruz S.A. ("MSC") and is owned 51% by Hochschild Mining plc ("Hochschild") (HOCM.L: Reuters and HOC LN: Bloomberg - London Stock Exchange) and 49% by Minera Andes. The San Jose mine commenced production during the second quarter of 2007 and approached full production by year-end 2007. Hochschild forecasts that the processing plant, which is still in the commissioning phase, is to reach full capacity in the first half of 2008. Plans are underway to expand the mine and double the current production rate by year-end 2008.
Exploration
In 2007, we saw significant growth in the San Jose project through its exploration program results. The last independent NI43-101 Technical Report commissioned by Minera Andes was released in November 2007 and showed an increase in reserves at San Jose of more than 100%, based on surface drilling and under ground exploration completed in 2006 through the first half of 2007.
On March 12, 2008, Hochschild released updated resource and reserve estimates at San Jose in their Preliminary Results for Year Ended 31 December 2007. These results show an increase in reserves of 19% and an increase in resources of 28% over the year ended 31 December 2006 JORC Code results. Currently Minera Andes cannot endorse these results as only a part of the data on which the resource /reserve calculations are based has been released to Minera Andes. Minera Andes is in the process of obtaining this information and will review the data and report on the results as soon as practicable. Exploration work completed in the second half of 2007 includes 20,274 meters (82 holes) of drilling mainly on Frea, Odin, and Ayelen veins and several hundred meters of drifting along the Frea vein. Receipt of assay results is underway for 19 drill holes. The Frea, Odin, and Ayelen veins all have mineral potential and remains open at depth and along strike.
MSC plans a 2008 exploration program at San Jose consisting of mapping, compilation and interpretation of all project data on a district scale (115 km2) to identify new targets. Approximately 4,000 meters of surface drilling and 3,800 meters of underground drilling are planned for 2008 as a follow-up on the targets generated from the surface work.
Expansion
Based on the significant increase in the reserves during 2007, the board of MSC last November approved an expansion at San Jose from 750 to 1,500 tonnes per day, thereby doubling the rate of production at San Jose. Minera Andes anticipates the expansion to be completed by year-end 2008.
Various pieces of new equipment have been ordered by MSC for the mine expansion, including a new ball mill, flotation cells, a crusher and other ancillary equipment. Also, work to connect to the national power grid is underway, and this connection is forecast to provide significant cost savings over the on-site diesel generators that currently supply the electrical power to the project. Following connection to the power grid, the diesel generators will be retained as a backup power supply.
Production
The San Jose mine now comprises more than 13 km of underground workings accessed by ramps accessing the Huevos Verdes and Frea veins. A third ramp has also been constructed to access the Kospi vein, where 173 meters of the vein have been developed to date. The mine is currently staffed with 436 employees and 148 contractors.
The San Jose gold/silver mine saw a steady increase in production in Q4 2007 as reported by MSC to the owners. The San Jose mine is currently operating at rate of 750 tonnes per day. The first sales of metal from the mine occurred in December of 2007. The sales of the metals that were produced during the construction/commissioning phase of the plant went to reduce the capital required for 2007. At year-end the mine had had about 90% of its metal in inventory in the form of concentrates and dore. Several contracts are in place to sell dore and concentrate production.
SAN JOSE MINE PRODUCTION
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Product Q4 Q3 Full year
2007 2007 2007
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Ore production (tonnes) 65,480 27,494 92,974
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Average head grade silver (g/t) 536 544 538
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Average head grade gold (g/t) 7.03 7.21 7.08
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Silver produced (ounces) 776,000 182,000 958,000
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Gold produced (ounces) 11,660 3,300 14,960
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Net silver sold (ounces)(x) 92,000 0 92,000
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Net gold sold (ounces)(x) 1,490 0 1,490
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(x) 855 ounces of gold and 42,379 ounces of silver were produced during
construction phase of the plant and have been recorded as a reduction
to the capitalized cost of the plant.
During the start-up of San Jose in Q2 2007, several factors contributed to delays in the processing plant becoming fully operational, including technical issues related to the mill and the flotation process; problems with the intensive leaching process that produces a precipitate that is converted into dore, and extreme August weather conditions. We are advised that although the processing plant is now operating at capacity, the intensive leaching process remains in the commissioning stage. Re-engineering work is currently underway to improve the detoxification process. The operator expects theses issues to be corrected in the first half of 2008.
Allen V. Ambrose, Minera Andes' President, who is an appropriately "qualified person" as defined by National Instrument 43-101, is responsible the information used in this news release and has supervised the preparation of the information and reviewed all information used in this news release.
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 Jose silver/gold mine that has recently commenced 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 189,334,935 shares issued and outstanding.
This news is submitted by Allen V. Ambrose, President and Director of Minera Andes Inc.
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 Jose 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 Jose mine will be achieved on a timely basis, or at all, that production capacity at the San Jose mine will be successfully increased, that resources and reserves at the San Jose mine will be increased or that Minera Andes will successfully raise the funds necessary to maintain its interest in the San Jose 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. We refer readers 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. 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.
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, because these terms are common usage in Canada and form part of our Canadian filing requirements.
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 Road, Ste. A Spokane, WA, 99208, USA, Phone: (509) 921-7322, E-mail: info@minandes.com; Vancouver Office, 911-470 Granville Street, Vancouver, B.C., V6C 1V5, Phone: (604) 689-7017, 877-689-7018, E-mail: ircanada@minandes.com
SOURCE Minera Andes Inc.
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