SPOKANE, WA, Aug. 12 /CNW/ - Minera Andes Inc. (TSX: MAI and US OTC:
MNEAF) announced details of production cash costs (in US dollars) at the San
José mine for the second quarter of 2008. The San José project is operated by
Minera Santa Cruz S.A. ("MSC") and is owned 49% by Minera Andes and 51% by
Hochschild Mining plc ("Hochschild") (HOCM.L: Reuters and HOC LN: Bloomberg -
London Stock Exchange). Hochschild is the operator of the project. For the
second quarter, production cash costs averaged $322 per ounce of gold and
$6.16 per ounce of silver. As previously reported in our July 30, 2008 news
release, metal prices for sales of metal in Q2 2008 on a weighted average
basis were $901 per ounce of gold and $16.47 per ounce of silver.
The production cash costs are shown on a co-product basis and are defined
as the sum of the geology, mining, processing plant, general and
administration costs divided by the number of ounces of gold and silver
produced at the mine. Production cash costs include royalties, refining and
treatment charges and sales costs are applied to doré but concentrate sales do
not include refining, treatment charges and sales costs. Depreciation is not
included in the production costs. The production cash costs are calculated
using the value of the 12,410 ounces of gold and 1,093,291 ounces of silver
produced in the form of doré, precipitates, and concentrates and the cost to
produce those ounces as defined above ($10,727,957). Our co-product reporting
is based on the Q2 2008 average London PM fix for gold and the London fix for
The San José mine is at full production of approximately 750 tonnes per
day, but is being expanded to double the production rate to 1500 tonnes per
day by year-end 2008. A total of 60,603 tonnes of ore was mined in the second
quarter with an average grade of 7.56 grams per tonne gold and 681 grams per
tonne of silver.
Allen Ambrose, president of Minera Andes said, "The San José mine is
producing high grade gold and silver ore from an underground operation. This
means, we move fewer tonnes to produce an ounce of gold or silver which in
turn helps us maintain lower costs per ounce. We anticipate that production
costs will trend even lower as the production is doubled and we receive the
benefit of the economies of scale from the expansion."
Allen V. Ambrose, Minera Andes' President, 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 Company holds about 304,000 acres of mineral exploration land
in Argentina including the 49% owned San José silver/gold mine that commenced
production last year. Minera Andes is also exploring the Los Azules copper
project in San Juan province, where an exploration program is underway to
define a resource and scoping study. Other exploration properties, primarily
silver and gold, are being evaluated in southern Argentina. The Corporation
presently has 189,456,935 shares issued and outstanding.
Non-GAAP Financial Measures: In this news release, we use the term
"production cash cost." The production cash costs are calculated on a
co-product basis and are defined as the sum of the geology, mining, processing
plant, general and administration costs divided by the number of ounces of
gold and silver produced at the mine. Production cash costs include royalties,
refining and treatment charges and sales costs applied to doré but the
concentrate sales do not include refining, treatment charges and sales costs.
Depreciation is not included in the production cash costs. We use production
cash cost per ounce as an operating indicator. We provide this measure to our
investors to allow them to also monitor operational efficiencies of our mine
at San José. Production cash cost per ounce should be considered as Non-GAAP
Financial Measures 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 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 including, but not limited to, mining rates, milling rates,
gold grade, gold recovery, and the costs of labor, consumables and mine site
operations general and administrative activities can cause these measures to
increase or decrease.
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. In
particular, there can be no assurance that production capacity at the San José
mine will be successfully increased, that resources and reserves at the San
José mine will be increased. 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.
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:
firstname.lastname@example.org; Vancouver Office, 911-470 Granville Street, Vancouver, B.C.
V6C 1V5, Phone: (604) 689-7017, (877) 689-7018, E-mail: email@example.com