Minera Andes announces production to commence at San José silver/gold mine



    TSX: MAI
    NASD-OTCBB: MNEAF

    SPOKANE, WA, June 26 /CNW/ - Minera Andes (TSX: MAI and US OTC: MNEAF) is
pleased to announce the inauguration ceremony and the official start-up of
production at the San José silver/gold mine will take place today in southern
Argentina. Initial production from the mine based on the 2005 feasibility
study is forecast at 3.1 million ounces of silver and 61,000 ounces of gold
per year. In addition, excellent potential exists to increase production from
the initial rate through the ongoing exploration program at the mine.
    The inaugural ceremony is being held at the San José mine to recognize
the completion of construction, commissioning and start-up of production.
Distinguished guests representing the federal and provincial governments of
Argentina, the project partners, and contractors and employees of Minera Santa
Cruz, the joint venture company, are attending the ceremony.
    San José is part of a 99,000-acre silver/gold mineralized trend in Santa
Cruz province. Numerous high-grade targets within the trend were discovered by
Minera Andes' exploration geologists in the late 1990s. The San José Project
is owned by Minera Santa Cruz, a joint venture company owned by Minera Andes
(49%) and a wholly-owned subsidiary of Hochschild Mining plc (51%) (London
Stock Exchange, LSE: HOC), the project operator.
    Allen Ambrose, Minera Andes' president, said, "Attaining unhedged silver
and gold production from San José is an important milestone for Minera Andes.
Joining the ranks of high-grade producers, we look for San José to provide
ongoing income as we repeat our Argentina business plan of exploration,
discovery and partnering for income growth in gold, silver and copper."

    San Jose Growth Considered

    Further expansion at the San José mine is contemplated. Mill capacity was
designed to be scaleable to 1,500 tonnes-per-day from the planned startup
production rate of 750 tonnes-per-day. In anticipation of possible production
growth, some equipment with expanded capacity has been installed, pending a
formal expansion decision. By early 2007, more than 9,000 meters of
underground mine workings were completed at the San José mine, compared to
5,300 meters in early 2006. Surface facilities have also been expanded and
upgraded.
    Mr. Ambrose said, "A formal decision on a production increase has not yet
been made. A 38,000-meter exploration drilling program is now underway and is
designed to test new targets and to develop new reserves and resources on the
property. It will also be necessary to add more equipment and infrastructure
to handle increased production. With only about 4 km or 10 percent of the
known 40 km of vein trends drill-tested, we are encouraged by the exploration
potential to develop more reserves at San José and we believe we are well
positioned to increase the mine life and production rates."

    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 José silver/gold mine going into
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
166,700,767 shares issued and outstanding.

    Allen V. Ambrose, Minera Andes' President, who is an appropriately
qualified person as defined by National Instrument 43-101, has reviewed the
information used in this news release.
    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 José Project.
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.
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, environmental risks and
hazards, uncertainty as to calculation of mineral reserves and other risks. In
addition, Minera Andes' joint venture partner, Hochschild Mining plc., does
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.





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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MINERA ANDES INC.

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