Minera Andes reports first quarter 2009 financial results



    
    TSX: MAI
    NASD-OTCBB: MNEAF
    

    SPOKANE, WA, May 15 /CNW/ - Minera Andes Inc. (the "Corporation" or
"Minera Andes") (TSX-MAI and US OTC: MNEAF) today reported a net loss of $4.9
million ($0.02 per share) in its first quarter 2009 financial statements. All
amounts in this news release are in US dollars unless otherwise noted. Our
financial statements are available under the Corporation's profile at
www.sedar.com.
    Minera Andes' share of the net loss derived from Minera Santa Cruz
S.A.("MSC") for the three months ended March 31, 2009 (before amortization),
was $0.9 million. MSC is owned 49% by Minera Andes and 51% by Hochschild
Mining plc ("Hochschild") (HOCM.L: Reuters and HOC LN: Bloomberg - London
Stock Exchange). MSC owns and operates the San José silver/gold mine in
southern Argentina, which has recently expanded its processing capacity to a
rate of 1,500 tonnes per day. Hochschild is the operator of the San José Mine.
    Allen Ambrose, President of Minera Andes said, "While we are disappointed
with our loss for the first quarter, we are very pleased by the progress that
MSC is making in reducing operating costs at the San José Mine. Unfortunately,
the mine had a considerable build-up of processed silver and gold in inventory
during the quarter and showed a net loss for the quarter, but the products
have now been sold, and the sale of this built up inventory will be reflected
in the results for the second quarter."
    The silver and gold sales from the San José Mine in the first quarter of
2009 totaled $21.1 million. During the fourth quarter 2008, total sales from
the San José Mine were $19.6 million. The weighted average sales prices were
$12.98/ounce of silver and $911/ounce of gold during the first quarter of 2009
and $8.93/ounce of silver and $774/ounce of gold during the previous quarter.
San José's silver and gold sales are unhedged. The first quarter 2009 sales of
silver and gold by MSC were lower compared to fourth quarter of 2008 due to
built up processed product inventories of silver and gold at the end of the
quarter while MSC negotiated new contracts and improved commercial terms for
the sale of doré bullion and concentrates. The accumulated inventories were
sold at the start of the second quarter of 2009.
    Cash operating costs (calculated on a co-product basis) for the mine were
$4.99 per ounce for 1,299,000 ounces of silver and $357 per ounce for 16,560
ounces of gold. As previously reported, a total of 118,986 tonnes of ore was
processed in the first quarter of 2009 with an average grade of 427 grams per
tonne of silver and 5.29 grams per tonne of gold. The sale products are
marketed in the form of concentrates and doré bullion. Cash operating costs
were $12.2 million for the quarter, which represents a decrease of
approximately 28% compared to the fourth quarter of 2008 and the cash cost per
tonne decreased by 29% to $111.80 per tonne. The decrease in total cash
operating costs was mainly due to lower costs for marketing, labor, supplies,
energy, and repairs and maintenance, which was partially offset by an increase
in the tonnage mined and processed. The decrease in the cash cost per tonne
and per ounce of silver and gold reflects the economies of scale achieved
through the expansion of the processing plant as well as the effects of the
Argentine Peso devaluation.
    Allen V. Ambrose, Minera Andes' President and CEO, who is a "qualified
person" as defined by National Instrument 43-101, is responsible for 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 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.
    This news is submitted by Allen V. Ambrose, President, CEO and Director
of Minera Andes Inc.

    Non-GAAP Financial Measures:

    In this news release, we use the term "operating cash cost." Operating
cash costs are defined as the sum of the geology, mining, processing plant,
general and administration costs as well as royalties, refining and treatment
charges and sales costs applied to doré, but with respect to concentrate sales
do not include refining, treatment charges and sales costs. The operating cash
costs per ounce are calculated on a co-product basis by dividing the
respective proportionate share of the total costs for the period for each
metal by the ounces of each respective metal produced. The proportionate share
of the total costs is calculated by multiplying the total cash costs by the
percentage of total production value that the respective metal represents. For
2009, approximately 52% of the value of the production was derived from silver
and 48% was derived from gold based on the year 2009 average London PM fix for
silver and for gold. We use operating cash cost per ounce as an operating
indicator. We provide this measure to our investors to allow them to also
monitor operational efficiency of MSC's mine at San José. Operating cash cost
per ounce should be considered as non-GAAP Financial Measure and should not be
considered in isolation or as a substitute for measures of performance
prepared in accordance with GAAP. There are material limitations associated
with the use of such non-GAAP Financial Measures. Since these measures do not
incorporate revenues, changes in working capital and non-operating cash costs,
they are not necessarily indicative of operating profit or cash flow from
operations as determined under GAAP. Changes in numerous factors include, but
are not limited to, mining rates, milling rates, silver and gold grades,
silver and gold recoveries, and the costs of labor, consumables and mine site
operations general and administrative activities that can cause these measures
to increase or decrease.

    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 resources;
operational and development risk; 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.





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 operations: 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

Organization Profile

MINERA ANDES INC.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890