Minera Andes announces the San Jose mine increases silver and gold resources by 62 percent

    TSX: MAI

    SPOKANE, WA, Sept. 17 /CNW/ - Minera Andes Inc. (TSX: MAI and US OTC:
MNEAF) is pleased to announce a NI 43-101 Technical Report has been filed that
includes new resources discovered in 2006 on the Kospi vein at the San José
project in Santa Cruz province, southern Argentina. The San José mine is now
in the commissioning phase of start up and full production of 750 tonnes per
day (t/d) is anticipated in 5 to11 months. The San José project is operated by
Minera Santa Cruz S.A. (owned 51% by Hochschild Mining plc ("Hochschild")
(HOC.L Reuters, HOC.LN Bloomberg, London Stock Exchange)) and 49% by Minera
    A new Technical Report by AMEC Americas Limited (AMEC) entitled "San José
Property San Cruz Province, Argentina NI 43-101 Technical Report", was
authored by Robert Cinits (P. Geo.), Pierre Rocque (P. Eng.), William
Colquhoun (FSAIMM), and Rodrigo Marinho (C.P.G.), appropriately qualified
person according to NI 43-101. The results from the report indicate that the
2006 core drilling program (128 holes totaling 22,047 meters) on the Kospi
vein at San José increased silver and gold resources by 62% from the level
announced in the October 2005 feasibility study. In addition, we anticipate
that the 38,000-meter exploration drilling campaign currently underway, and
development of the underground workings will further increase the mineral
reserves and resources. Under NI 43-101 inferred mineral resources cannot be
included in San José's mine life. Minera Andes intends to provide an updated
technical report that will incorporate the Kospi vein measured and indicated
resources into the mine plan once additional testwork required to allow the
mineral resources to be classified as mineral reserves has been completed
according to NI 43-101. This new report will also classify any additional
reserves and resources defined from the ongoing exploration and underground
development work on the property, and discuss the projects mineral potential.
Adding mineral reserves is key to supporting the recently announced plans to
expand production to 1,500 t/d.
    Some highlights of the new AMEC Technical Report are as follows (all
amounts are expressed in U.S. dollars, unless otherwise indicated):

    -   Measured and indicated resources: at December 31, 2006 are:
        1.8 million tonnes grading 8.33 g/t gold and 522 g/t silver. An
        additional 92,000 ounces of gold and 5.8 million ounces of silver, in
        318,000 tonnes, grading 9.03 g/t gold and 567 g/t silver are
        classified as inferred resources. The economic cutoff used to
        calculate the resources is $45/t (using a price of $500 for gold and
        $8.50 for silver).
    -   Gold contained: 477,000 ounces of measured and indicated resources
    -   Silver contained: 29.8 million ounces of measured and indicated
    -   Mineral reserves: at April 30, 2007 are essentially unchanged from
        the October 2005 feasibility study since the Kospi vein is not yet
        classified as a reserve.
    -   Production: 750 t/day at full production
    -   Forecast average operating costs of: $235 per ounce of gold
    -   Mine life is 5.2 years - does not include Kospi vein mineral
    -   Forecast average gold production: 58,269 ounces per year at full
    -   Forecast average silver production: 3.1 million ounces per year at
        full production

    San José Mine

    The drilling completed on the San José mine at year end 2006 indicate an
increase of approximately 62% in contained gold and silver and the mine now
contains over 58.5 million silver equivalent ounces in the measured and
indicated categories (see resource tables below) plus an additional
11.4 million silver equivalent ounces in the inferred category. This increase
is primarily due to the addition of the Kospi vein to the resource category.
    The Kospi vein, discovered in 2005, is the first target that has been
converted to a resource out of several high-priority drill targets identified
on the property through early reconnaissance drilling and surface exploration
programs. Other priority targets are Odin (A and B), Ayelen, Flor, Huevos
Verdes West, Kospi 1, Kospi South, Lourdes, Frigga, Aguas Vivas, Roadside, and
Portuguese West. Though these targets are early stage we believe that they
have significant discovery potential for gold and silver mineralization.
Drilling is planned for these targets as part of an ongoing 38,000 meter,
$4 million exploration drilling program started earlier this year.
    The technical report by AMEC uses a long-term gold price of $575 per
ounce (oz) and $9 per oz for silver for estimating mineral reserves. The
average cash operating costs are estimated at $94/tonne of ore processed, or
$235/ounce gold equivalent. AMEC estimates the internal rate of return (IRR)
after taxes of the San José project at 116 percent based on a "moving forward"
basis assuming a remaining expense in the initial capital cost budget of $20.8
million. The base case Net Present Value (NPV), using an 8% discount rate, is
$53 million. Based on the parameters listed above, the undiscounted NPV is
$75.5 million.
    Allen Ambrose, president of Minera Andes, said, "Even with the new
drilling, less than 15% of the known 40 kilometers of the vein trends at San
José have been drilled. The 22,047 meter drill program in 2006 increased the
mine's resources by 63%. The joint venture is drilling 38,000 meters in the
current exploration program to define new reserves and continue evaluating new
targets. With commissioning of the mine and the ramping up of production it is
an exciting time for Minera Andes. We are on the road to becoming a producing
company. Before this time next year we anticipate to reach full production at
the San Jose mine."
    The San José mine is ramping up production from the start up in July 2007
to full commercial production. Approximately nine kilometers of underground
workings have been developed at the mine along with the associated
infrastructure. Power will be supplied by four diesel generators.
    The mine is designed to process 750 t/d of ore from two separate
structures, the Frea and Huevos Verdes veins, using underground mining
methods. Estimated mine life is 5.2 years with the current reserves.
Mechanized cut and fill mining will be used as the primary mining method
supplemented with conventional cut and fill mining.
    The processing facility utilizes a Gekko Gravity-Flotation-Intensive
Leaching (GFIL) process and Merrill Crowe-smelting for the production of the
final product a gold-silver doré. Due to the potential for additional risk
with a newer process technology and with throughput and recovery loss AMEC has
reduced expected recovery of gold to 85% and silver to 87% in the first year
of production. They have assumed the average life of mine recovery of 90% for
gold and 88% for silver in the second year. As a result there is some risk
that additional plant modifications and commissioning time could be required
to achieve these increased recoveries and that there would be additional
capital costs.

    Mineral Resources, Reserves

    The new San José mineral resource and 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 Rodrigo
Marinho, (C.P.G) and Pierre Rocque, P. Eng. at AMEC. The mineral resources and
reserves remain open along strike and at depth in some areas.
    At December 31, 2006 total measured and indicated mineral resources at
the San José Project were 477,000 ounces of gold and 29.8 million ounces of
silver, contained in 1.8 million tonnes grading 8.33 g/t gold and 522 g/t
silver. An additional 92,000 ounces of gold and 5.8 million ounces of silver,
in 318,000 tonnes, grading 9.03 g/t gold and 567 g/t silver are classified as
inferred resources. The economic cutoff used to calculate the mineral
resources is $45/t (using a price of $500 per ounce for gold and $8.50 per
ounce for silver). Gold recovery used for the resource estimate is 89.65% and
silver recovery is 90.49%.

                Mineral Resources(*) - Measured and Indicated
                           Grades                 Classified Resource
    Area Resources      Au       Ag       Resource    Measured     Indicated
    (12/31/06)         (g/t)    (g/t)       (t)          (t)          (t)
    Huevos Verdes
     South             10.82     793       241,000     108,000       134,000
    Huevos Verdes
     Cntrl.             5.43     329       121,000           0       121,000
    Huevos Verdes
     North              4.66     393       194,000     101,000        93,000
    Frea               10.00     414       609,000      82,000       527,000
    Kospi               7.25     601       614,000           0       614,000
    Total Project
     Oct. 21, 2005      9.32     494     1,097,000     167,000       930,000
    Total Project
     Dec 31, 2006       8.33     522     1,779,000     291,000     1,488,000
    Percentage change                          +62

                               Contained Ounces
    Area Resources                              equivalent
    (12/31/06)        Gold (oz)   Silver (oz)      (oz)
    Huevos Verdes
     South              84,000     6,150,000    11,190,000
    Huevos Verdes
     Cntrl.             21,000     1,277,000     2,537,000
    Huevos Verdes
     North              29,000     2,454,000     4,194,000
    Frea               199,000     8,108,000    20,048,000
    Kospi              143,000    11,857,000    20,437,000
    Total Project
     Oct. 21, 2005     327,000    17,343,000    36,972,000
    Total Project
     Dec 31, 2006      477,000    29,847,000    58,467,000
    Percentage change      +46           +72           +58
    (*) Note: Contains 100 percent of the resources, Minera Andes ownership
    of the project is 49%. Resources are inclusive of reserves. Mineral
    resources that are not mineral reserves do not have demonstrated economic
    viability. Silver/gold equivalency 1oz gold = 60 oz

    At April 30th, 2007 the proven and probable mineral reserves, based on an
overall cutoff off grade of $94/t (using a price of $500/oz for gold and
$8.50/oz for silver), are 1.2 million tonnes at 7.89 g/t gold and 417 g/t
silver, containing 303,000 ounces of gold and 16,028,000 ounces of silver. The
reserves also take into account marginal blocks of ore located on the
periphery of higher grade zones. The cutoff grade for these blocks was $45/t.
The marginal cutoff was defined by the value of ore, which meets the variable
costs, but not the fixed costs. A 15% unplanned dilution and a 5% mining loss
are used in the calculation for the October 21, 2005 reserves and a 12%
unplanned dilution and 5% mining loss has been used in the April 30th, 2007
reserve calculations.

                  Mineral Reserves(*) - Proven and Probable
                           Grades                Classified Reserve
    Area Reserves       Au       Ag       Reserve      Proven      Probable
    (4/30/07)          (g/t)    (g/t)       (t)          (t)          (t)
    Huevos Verdes       6.39     461       586,000     236,000       350,000
    Frea                9.34     375       609,000      75,000       534,000
    Kospi                         No      Reserves
    Total Project
     Oct. 21, 2005       7.7     406     1,160,859     174,241       986,626
    Total Project
     4/30/07            7.89     417     1,195,000     311,000       884,000

                               Contained Ounces
    Area Reserves                               equivalent
    (4/30/07)         Gold (oz)   Silver (oz)      (oz)
    Huevos Verdes      120,000     8,685,000    15,909,000
    Frea               183,000     7,342,000    18,315,000
    Total Project
     Oct. 21, 2005     288,000    15,229,000    32,515,000
    Total Project
     4/30/07           303,000    16,028,000    34,224,000
    (*) Note: Contains 100 percent of the reserves, Minera Andes ownership of
    the project is 49%. Silver/gold equivalency 1oz Au = 60 oz Ag.

    The resource and reserve estimates are based on 417 core holes,
31 reverse circulation holes and 2,013 samples taken from underground workings
constructed at Huevos Verdes, Frea, and Kospi. The nominal spacing at Huevos
Verdes and Frea is 35 meters along strike (horizontally) and 50 meters
vertically and at Kospi it is 40 meters by 40 meters.
    The following summarizes the key assumptions, parameters and methods used
in the Mineral Resource and Reserve estimates:

    -   Gold assays were cut to 120 g/t, 20 g/t, 80 g/t and 100 g/t at Huevos
        Verdes South, Central, North and Frea, and 30 g/t at Kospi,
        respectively. Silver assays were cut to 10,000 g/t, 1,000 g/t,
        8,000 g/t and 4,000 g/t at Huevos Verdes South, Central, North and
        Frea, and 3,500 g/t at Kospi, respectively.
    -   Density was assigned as an average to the three principal mineralized
        zones, Huevos Verdes, Frea, and Kospi. The values used for the
        estimate are 2.595 t/m3 for Huevos Verdes, 2.611 t/m3 for Frea and
    -   The geological model for both Huevos Verdes and Frea zones was
        developed using a series of northeast oriented sections spaced
        approximately 10 meters to 50 meters apart.
    -   Assays were composited to full vein-width interval.
    -   The estimation is done using Ordinary Kriging coupled with oriented
        search ellipses.
    -   Block grades were estimated based on interpretation of geological
        parameters logged in drill holes.
    -   Included in the mineral resource estimate at Huevos Verdes North and
        South and Frea are 2,013 chip channel samples taken from the
        underground workings.

    The filing of this technical report on San José was triggered by
disclosure of mineral reserve and resource estimates based on the results of
the 2006 exploration drilling program in our April 10th 2007 news release. The
reconciliation of the material changes between the information reported in the
news release and technical report by AMEC described herein are the Kospi vein
mineral reserves reported in the April 10th news release reverted back to
mineral resources described in the technical report because of the need for
some additional metallurgical testwork required to meet NI 43-101 standards.
The mineral resources in the technical report are essentially unchanged from
the April 10th news release and do not require reconciliation. The mine life
in the technical report is 5.2 years as it does not take into account the
Kospi vein resources versus 6.8 years as disclosed in the April 10th news
release where the Kospi vein is included.

    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 that has
started initial 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
166,717,517 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 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.
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 José mine will
be achieved on a timely basis, or at all, that production capacity at the San
José mine will be successfully increased, that resources and reserves at the
San José mine will be increased or that Minera Andes will successfully raise
the funds necessary to maintain its interest in the San José 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. Reference is made 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. In
addition, 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. Similarly,
Hochschild denies any responsibility for Minera Andes's NI 43-101 Technical
Report or for any of Minera Andes's Canadian securities filings or for any
information that Minera Andes has given to the securities markets and any such
responsibility is hereby disclaimed in all respects.

    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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