Minera Andes announces completion of NI 43-101 Technical Report on the June 2008 San José mine mineral resources and reserve



    
    TSX: MAI    NASD-OTCBB: MNEAF
    

    SPOKANE, WA, June 5 /CNW/ - Minera Andes Inc. (TSX: MAI and US OTC:
MNEAF) announces the results of a NI 43-101 Technical Report that comprises an
independent review of the mineral resources and reserves as of June 2008 at
the San José mine in Santa Cruz province, southern Argentina. The San José
mine 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.
    The Technical Report entitled "NI 43-101 Technical Report, Minera Andes,
Inc., San José Silver-Gold Project, Santa Cruz, Argentina", was prepared by
SRK Consulting (US), Inc. ("SRK") and endorsed by Chris Elliott (MAusIMM) and
Leah Mach (CPG), appropriately qualified persons according to NI 43-101.

    Mineral Resources

    The June 2008 San José 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
Chris Elliott and Leah Mach at SRK. The mineral resources and reserves remain
open along strike and at depth in some areas.
    SRK used a gold price of $600 per ounce (oz) and $10.50 per oz for silver
for estimating mineral resources and reserves, which reflect the price outlook
in mid-2008 for San José. The average Life of Mine cash operating costs are
estimated at $122/tonne of ore processed, or $271/ounce gold equivalent. The
base case Net Present Value (NPV), using long-term metal price estimations of
$850 per ounce of gold and $12.50 per ounce of silver and a discount rate of
8%, is $205 million. The undiscounted NPV representing cumulative cash flow is
$234 million.
    At June 30, 2008 total Measured and Indicated Mineral Resources at the
San José mine were 570,000 ounces of gold and 39.4 million ounces of silver,
contained in 2.5 million tonnes grading 7.11 g/t gold and 490 g/t silver, or
73.6 million ounces of silver on a silver equivalent basis (see table below).
An additional 77,000 ounces of gold and 5.1 million ounces of silver, in
447,000 tonnes, grading 5.33 g/t gold and 356 g/t silver are classified as
Inferred Resources. The cutoff value used to estimate the mineral resources is
181g/t silver equivalent (using a price of $600/oz for gold and $10.50/oz for
silver).

    
                Mineral Resources(*) - Measured and Indicated
    -------------------------------------------------------------------
                           Grades            Classified Resource
    -------------------------------------------------------------------
      Area                                 Total
    Resources            Au       Ag     Resource  Measured  Indicated
    (6/30/07)          (g/t)    (g/t)       (t)       (t)        (t)
    -------------------------------------------------------------------
    Huevos Verdes      6.80      529      560,000   292,000    268,000
    -------------------------------------------------------------------
    Frea               8.31      374      745,000   446,000    299,000
    -------------------------------------------------------------------
    Odin               5.27      298      196,000         -    196,000
    -------------------------------------------------------------------
    Kospi              6.86      609      887,000         -    887,000
    -------------------------------------------------------------------
    Ayelén             6.22      466       79,000         -     79,000
    -------------------------------------------------------------------
    HVR                4.86      430       31,000    12,000     19,000
    -------------------------------------------------------------------
    Total Project
     06/30/08          7.11      490    2,499,000   750,000  1,749,000
    -------------------------------------------------------------------
    Total Project
     06/30/07          7.91      500    2,365,000   645,000  1,721,000
    -------------------------------------------------------------------
    Percentage change                       +6
    -------------------------------------------------------------------


    -----------------------------------------------------------
                           Contained Ounces
    -----------------------------------------------------------
      Area                                          Silver
    Resources                 Gold       Silver   equivalent
    (6/30/07)                 (oz)        (oz)        (oz)
    -----------------------------------------------------------
    Huevos Verdes           122,000    9,524,000   16,844,000
    -----------------------------------------------------------
    Frea                    199,000    8,958,000   20,898,000
    -----------------------------------------------------------
    Odin                     32,000    1,878,000    3,798,000
    -----------------------------------------------------------
    Kospi                   196,000   17,367,000   29,127,000
    -----------------------------------------------------------
    Ayelén                   16,000    1,184,000    2,144,000
    -----------------------------------------------------------
    HVR                       5,000      439,000      739,000
    -----------------------------------------------------------
    Total Project
     06/30/08               570,000   39,350,000   73,550,000
    -----------------------------------------------------------
    Total Project
     06/30/07               602,000   38,032,000   74,092,000
    -----------------------------------------------------------
    Percentage change          -5         +3           -1
    -----------------------------------------------------------
    (*) 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. Minera Andes has calculated the Silver/Gold
        equivalency as 1oz gold = 60 oz silver.
    

    The mineral resource estimates are based on 593 surface and underground
drill holes (12,140 meters), 3 surface trenches (95.2 meters) and 5,389
channel samples (11,084 meters). The channel samples were taken from
underground workings constructed at Huevos Verdes, Frea, and Kospi. The
nominal drill 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 underground channel samples are
spaced at approximately 2.5m along the drifts and the drifts are spaced at
about 20m vertically.
    The resource models were developed using industry-accepted methods. SRK
validated the model estimates and 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.

    Mineral Reserves

    At June 30th, 2008 the Proven and Probable Mineral Reserves, based on an
overall economic cutoff value of $115/t (using a price of $600/oz for gold and
$10.50/oz for silver), are 1,615,000 tonnes at 6.88 g/t gold and 486 g/t
silver, containing 357,000 ounces of gold and 25,230,000 ounces of silver. The
mineral reserves also take into account marginal blocks of ore located on the
periphery of higher grade zones. The marginal cutoff for these blocks was
$45/t. The marginal cutoff was defined by the value of ore that meets the
variable costs, but not the fixed costs.

    
                  Mineral Reserves(*) - Proven and Probable
    -------------------------------------------------------------------
                           Grades            Classified Resource
    -------------------------------------------------------------------
      Area                                 Total
    Resources            Au       Ag     Resource   Proven    Probable
    (6/30/07)          (g/t)    (g/t)       (t)       (t)        (t)
    -------------------------------------------------------------------
    Huevos Verdes      6.06      460      393,000   249,000    143,000
    -------------------------------------------------------------------
    Frea               7.92      360      524,000   270,000    254,000
    -------------------------------------------------------------------
    Kospi              6.55      596      698,000         -    698,000
    -------------------------------------------------------------------
    Total Project
     06/30/08          6.88      486    1,615,000   519,000  1,095,000
    -------------------------------------------------------------------
    Total Project
     6/30/07           6.79      430    2,386,000   657,000  1,729,000
    -------------------------------------------------------------------
    Percentage Change                      -32
    -------------------------------------------------------------------


    -----------------------------------------------------------
                           Contained Ounces
    -----------------------------------------------------------
      Area                                          Silver
    Resources                 Gold       Silver   equivalent
    (6/30/07)                 (oz)        (oz)        (oz)
    -----------------------------------------------------------
    Huevos Verdes            77,000    5,812,000   10,432,000
    -----------------------------------------------------------
    Frea                    133,000    6,058,000   14,038,000
    -----------------------------------------------------------
    Kospi                   147,000   13,361,000   22,181,000
    -----------------------------------------------------------
    Total Project
     06/30/08               357,000   25,231,000   46,651,000
    -----------------------------------------------------------
    Total Project
     6/30/07                521,000   33,017,000   64,277,000
    -----------------------------------------------------------
    Percentage Change         -31        -24          -27
    -----------------------------------------------------------
    (*) Note: Contains 100 percent of the reserves, Minera Andes
        ownership of the project is 49%. Minera Andes has
        calculated the Silver/Gold equivalency as 1oz gold
        = 60 oz silver.

    The decrease in the reserves from June 2007 to June 2008 is due to the
application of a higher cut-off grade and an increased dilution allowance by
SRK as well as depletion. The following summarizes the key assumptions,
parameters and methods used in the mineral resource and mineral reserve
estimates:

    -   Gold assays were cut to 120 g/t, 10 g/t, 50 g/t, 20 g/t and 50 g/t
        and 36 g/t at Huevos Verdes South, Central, North, Ramal, Frea and at
        Kospi respectively. Silver assays were cut to 10,000 g/t, 1,000 g/t,
        6,000 g/t, 2,000 g/t, 4,000 g/t and 3,800 g/t at Huevos Verdes South,
        Central, North, Ramal, Frea, and at Kospi, respectively.
    -   Density values used for the estimate are 2.595 t/m(3) for Huevos
        Verdes, 2.611 t/m(3) for Frea, and 2.621 t/m(3) for 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 within the vein wireframes.
    -   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 17,886 chip channel samples taken from the underground workings.
    -   Conventional Cut and Fill (CC&F) minimum mining width          0.8m
    -   Mechanized Cut and Fill (MC&F) minimum mining width            2.0m
    -   Planned dilution           0.2m HW + 0.2m FW= 0.4m total
    -   Unplanned dilution                                               5%
    -   Economic stope outlines from BECOV                         US$115/t
    

    A technical report, prepared in accordance with NI 43-101 will be filed
on SEDAR (www.sedar.com) within 45 days. This news release was prepared by, or
under the supervision of, Mr. Allen Ambrose, President of Minera Andes, a
"qualified person" within the meaning of NI 43-101. For (i) the
resource/reserve estimate contained herein; (ii) a description of the key
assumptions, parameters and methods used to estimate the mineral
resource/reserve referred to in this news release; and (iii) a general
discussion of the extent to which the estimate of mineral resources/reserves
may be materially affected by any unknown environmental, permitting, legal,
title, taxation, socio-political, marketing, or other relevant issues, please
refer to the technical report that will be filed within 45 days.

    San José Mine Update

    The capacity of the processing plant at San José was increased to 1,500
tonnes per day in fourth quarter of 2008, and the processing plant is
currently consistently achieving target production throughput. However, mine
production has lagged behind mill capacity due to difficult ground conditions
encountered in the Kospi vein development. Those problems have largely been
overcome, and MSC is forecasting full production from Kospi by the end of the
second quarter. During the development of the Kospi vein, mill feed has been
supplemented with material from low grade surface stockpiles. For the full
year, MSC is forecasting silver production approximately 30% higher than 2008
and gold production approximately 50% higher than 2008.
    Subsequent to the June 2008 resource and reserve estimate, which was the
subject of SRK's review, MSC has prepared an updated estimate of the resources
and reserves at San José as at December 31, 2008. The updated resources and
reserves, compliant with NI 43-101 standards, will be released shortly.
    Minera Andes is a gold, silver and copper exploration company working in
Argentina. The Corporation holds or has an interest in approximately 304,000
acres of mineral exploration land in Argentina, including the properties
comprising the 49% owned San José silver/gold mine. Minera Andes is also
exploring the Los Azules copper project in San Juan province, where a scoping
study has been completed and a 43-101 technical report filed. Other
exploration properties, primarily silver and gold, are being evaluated in
southern Argentina. The Corporation presently has 230,538,851 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.

    Caution Concerning Forward-Looking Statements:

    This news release contains forward-looking statements and forward-looking
information within the meaning of applicable US and Canadian securities laws.
Such forward-looking statements or information include expected production at
MSC's San José Project. In making the forward-looking statements and providing
the forward-looking information, we have made numerous assumptions. Although
our management believes that the assumptions made and the expectations
represented by such statements or information are reasonable, there can be no
assurance that the forward-looking statements will prove to be accurate.
Forward-looking statements and information involve known and unknown risks,
uncertainties and other factors that may cause our actual results to be
materially different from that expressed or implied by such forward-looking
information. Such risks, uncertainties and other factors include among other
things, declines in the price of gold, silver, copper and other base metals,
capital and operating cost increases, changes in general economic and business
conditions, including changes in interest rates and the demand for base
metals, economic and political instability in Argentina, discrepancies between
actual and estimated production and mineral reserves and resource, operational
and development risk, and the speculative nature of mineral exploration and
regulatory risks.
    Readers should not place undue reliance on forward-looking statements or
information. We undertake no obligation to reissue or update forward-looking
statements or information as a result of new information or events after the
date hereof except as may be required by law. See our annual information form
for additional information on risks, uncertainties and other factors relating
to the forward-looking statements and information. All forward-looking
statements and information made in this news release are qualified by this
cautionary statement. 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 news 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. U.S. Investors are
urged to consider closely the disclosure in our Form File No. 40F, which may
be secured from us, or from the SEC's website at
http://www.sec.gov/edgar.shtml.





For further information:

For further information: 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, 1-877-689-7018, E-mail: ircanada@minandes.com

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