Minera Andes announces the San Jose project increases silver and gold reserves by 71 percent

    TSX: MAI

    SPOKANE, WA, April 10 /CNW/ - Minera Andes Inc. (TSX: MAI and US OTC:
MNEAF) is pleased to announce the results of the 2006 exploration program at
the San José project in Santa Cruz province, southern Argentina, where
production is scheduled to commence in the second quarter of this year. The
San José project is operated by, Hochschild Mining plc ("Hochschild") (HOC.L
Reuters, HOC.LN Bloomberg, London Stock Exchange). Minera Andes has a 49%
interest in the San José Project.
    In 2006, a 21,241 meter drilling program increased silver and gold
reserves by approximately 71% from the reserves announced in the news release
of October 24, 2005. The highlights of the new reserve estimate from
Hochschild and the expected initial mine production are as follows (all
amounts are expressed in U.S. dollars, unless otherwise indicated):

    -   Proven and probable mineral reserves at December 31, 2006 are:
        1,958,430 tonnes (t) with an average grade of 7.2 g/t gold and 450
        g/t silver (using a cutoff off grade of $75/t - using a price of
        $500/oz for gold and $8.50/oz for silver).
    -   Gold contained: 453,348 ounces proven and probable reserves
    -   Silver contained: 28,334,242 ounces proven and probable reserves
    -   Forecast average gold production: 60,633 ounces per year
    -   Forecast average silver production: 3,119,533 ounces per year
    -   Initial production 750 t/day - with plant and infrastructure
        constructed to be upgraded to 1,500 t/day
    -   Forecast average operating costs of: $200 per ounce of gold
        equivalent from October 2005 feasibility study
    -   Mine life increased from 4.3 years to 6.8 years
    -   Production: Scheduled start up second quarter 2007

    Results of 2006 Drilling Program
    The drilling completed on the San José mine at year end 2006 increased
the project mine life by 58 percent from 4.3 years (as previously announced
from the results of the feasibility study in October 2005) to 6.8 years. The
new mineral reserves indicate an increase of approximately 71% in contained
gold and silver and the mine now contains over 55 million silver equivalent
ounces in the proven and probable categories (see reserve tables below).
Inclusive of reserves the mineral resources (measured and indicated) on the
property now total approximately 58.8 million silver equivalent ounces plus an
additional 12.2 million silver equivalent ounces in the inferred category.
This increase is primarily due to the addition of the Kospi vein to the
reserve/resource category.
    The Kospi vein is the first of the four new veins discovered on the
property in the last 18 months to be drilled and placed into the reserve
category. Sufficient drilling has not yet been done on the other veins to
include them in the reserve category.
    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 21,241 meter drill program in 2006 increased the
mine's reserves by 71%. The joint venture is drilling 38,228 meters in 2007 to
define new reserves and continue evaluating new targets. These factors are
expected to allow an expansion of production at the project within a short
period after mine start-up. With production expected to begin in the second
quarter of 2007, it is an exciting time for Minera Andes. We are on the road
to becoming a producing company. In a few short months, we expect to be an
unhedged low cost silver producer in Argentina."

    San José Mine
    The San José mine is in the final construction stages and scheduled to
start up in the second quarter of this year. Approximately nine kilometers of
underground workings have been developed at the mine along with the associated
infrastructure. Completion of construction of the processing plant is
underway, where the final product will be a silver/gold doré. This year mining
will begin at the Huevos Verdes and Frea veins. All of the personnel have been
hired for the mine and the processing plant personnel are currently being
hired. During construction approximately 700 people are working at the site
and when construction is complete the mine will be staffed by approximately
450 personnel.

    Mineral Resources, Reserves
    The new San José mineral resource and reserve estimates, mine life, and
mining rates, disclosed herein are from a report provided by our joint venture
partner Hochschild which have been reported according to JORC code and use
JORC categories that are recognized under Section 7.1(b) of NI 43-101. Minera
Andes will have its independent qualified persons review the disclosure made
herein and will have an independent technical report prepared and filed as
soon as practicable. Investors should consider this in their investment
    At December 31, 2006 total unaudited measured and indicated resources at
the San José Project were 480,197 ounces of gold and 29.9 million ounces of
silver, contained in 1.8 million tonnes grading 8.36 g/t gold and 522 g/t
silver. An additional 99,015 ounces of gold and 5.9 million ounces of silver,
in 317,824 tonnes, grading 9.69 g/t gold and 576 g/t silver are classified as
inferred resources. The cutoff grade used to calculate the resources is $45/t
(using a price of $500 for gold and $8.50 for silver).

                Mineral Resources - Measured and Indicated(*)
                     Grades            Classified Resource
    Area                                      Total
    Resources           Au        Ag        Resource    Measured    Indicated
    (12/31/06)        (g/t)      (g/t)         (t)         (t)         (t)
    HUEVOS VERDES       7.47         551     563,266     216,026     347,240
    FREA               10.29         417     609,338      82,448     526,890
    KOSPI               7.25         601     613,975           -     613,975
    Total Project
     Oct. 21,
     2005               9.32         494   1,097,000     167,000     930,000
    Total Project       8.36         522   1,786,579     298,473   1,488,106
     change                                      +63

                        Contained Ounces
    Area                                 Silver
    Resources      Gold      Silver    equivalent
    (12/31/06)     (oz)       (oz)        (oz)
    HUEVOS VERDES    135,277   9,978,292  18,094,912
    FREA             201,588   8,169,310  20,264,590
    KOSPI            143,113  11,863,592  20,450,372
    Total Project
     Oct. 21,
     2005            327,153  17,343,200  36,972,380
    Total Project    480,197  29,983,584  58,795,404
     change              +47         +73         +59
    (*) Note: Contains 100 percent of the resources, Minera Andes ownership
        of the project is 49%. Resources are inclusive of reserves.
        Silver/gold equivalency 1oz Au = 60 oz Ag.

    At December 31, 2006 the unaudited proven and probable mineral reserves,
based on an overall cutoff off grade of $75/t (using a price of $500/oz for
gold and $8.50/oz for silver), are 1.96 million tonnes at 7.2 g/t gold and 450
g/t silver, containing 453,348 ounces of gold and 28,334,242 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 grade 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 2% mining loss has been used in the December 31,
2006 reserve calculations.

    Mineral Reserves - Proven and Probable(*)
                         Grades                  Classified Reserve
    Area                                    Total
    Reserves          Au          Ag       Reserve     Proven      Probable
    (12/31/06)       (g/t)       (g/t)       (t)         (t)         (t)
    HUEVOS VERDES       6.26         464     604,797     224,016     380,781
    FREA                9.14         367     657,145      76,354     580,791
    KOSPI               6.22         515     696,490           -     696,490
    Total Project
     Oct. 21,
     2005                7.7         406   1,160,859     174,241     986,626
    Total Project        7.2         450   1,958,430     300,370   1,658,062
     change                                      +69

                         Contained Ounces
    Area                                    Silver
    Reserves         Gold       Silver    Equivalent
    (12/31/06)       (oz)        (oz)        (oz)
    HUEVOS VERDES    121,724   9,022,329  16,325,769
    FREA             193,108   7,753,867  19,340,347
    KOSPI            139,282  11,532,227  19,889,147
    Total Project
     Oct. 21,
     2005            288,094  15,229,380  32,515,020
    Total Project    453,348  28,334,242  55,535,122
     change              +57         +86         +71
    (*) Note: Contains 100 percent of the reserves, Minera Andes ownership of
        the project is 49%. Silver/gold equivalency 1oz Au = 60 oz

    The resource and reserve estimates are based on 11 trenches, 382 core
holes, 32 reverse circulation holes and 1,975 samples taken from underground
workings constructed at Huevos Verdes, Frea, and Kospi. The nominal spacing in
both zones is 35 meters along strike (horizontally) and 50 meters vertically
and 50 meters by 50 meters at Kospi.

    The following summarizes the key assumptions, parameters and methods used
in the 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
        2.62 t/m3 for Kospi.
    -   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 resource estimate are 1,791 samples taken from the
        underground workings at 2 meter intervals.

    Allen V. Ambrose, Minera Andes' president of company, who is an
appropriately qualified person as defined by National Instrument 43-101, has
reviewed the reports and data used in this news release.
    The San José project is held by Minera Santa Cruz SA, the joint venture
corporation co-owned by Minera Andes (49%) and project operator Hochschild
(51%). Hochschild has over forty years experience in the exploration,
evaluation and extraction of precious metal epithermal vein deposits in South
America. In addition, Hochschild has extensive experience in underground
mining and operates three underground epithermal vein mines located in
southern Peru that are geologically similar to the San José project.

    Warrant Exercise Incentive Program
    In another matter, the Corporation is also pleased to announce that it
received gross proceeds of Cdn$3.9 million through the early exercise of
6,006,758 warrants, under the incentive program for the early exercise of
three series of common share purchase warrants of the Corporation announced
December 27, 2006.
    The early exercise incentive program pertains to three private placements
listed in the table below. Notices regarding the early exercise incentive were
delivered to holders of the affected private placements advising the holders
of the incentive exercise program. Holders of these warrants had until
5:00 p.m. (Toronto time) on March 19, 2007 to exercise their warrants to
receive the incentive. The following table set forth the number of warrants
exercised pursuant to the early incentive program, the funds received and the
number of warrants still outstanding:

                                                   Value of
                                                   warrants       Number of
                                                   exercised       warrants
                                                     under          still
    Warrant                       Number of        incentive     outstanding
    price                          warrants         program      after early
    (Cdn$)       Expiry date      exercised          (Cdn$)        exercise
    0.50          11/13/2008        851,500      $   425,750         878,725
    0.55           12/1/2007        935,714          514,643               -
    0.70           3/22/2010      4,219,544        2,953,680       2,012,409
    Total                         6,006,758      $ 3,894,073       2,891,134

    Under the incentive program, a total of 600,673 New Warrants were issued
to those warrant holders taking part in the early exercise incentive. Each New
Warrant entitles to holder to acquire a common share of the Corporation at the
price of Cdn$1.75 per share until September 19, 2008. The New Warrants and
common shares issuable upon exercise of the New Warrants will be subject to a
four-month and one-day hold period.
    For those warrant holders who did not take part in the incentive early
exercise incentive program, the existing warrants held will continue to be
exercisable for common shares under the original terms of the private
placement. However, the holder will not be entitled to receive any new
incentive warrants.
    Minera Andes is a gold, silver and copper exploration company working in
Argentina. The Corporation holds about 440,000 acres of mineral exploration
land in Argentina including the co-owned San José silver/gold mine under
construction for production and cash flow by mid-2007. Minera Andes is also
exploring the Los Azules copper project in San Juan province, where drilling
is underway to define a resource. Other exploration properties, primarily gold
and silver, are being evaluated in southern Argentina. The Corporation
presently has 163,276,173 issued and outstanding shares.
    This news is submitted by Allen V. Ambrose, President and Director of
Minera Andes Inc.

    For further information, please contact: Art Johnson at the Spokane
office, or Krister A. Kottmeier, investor relations - Canada, at the Vancouver
office. Visit our Web site: www.minandes.com.

    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: 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, (877) 689-7018, E-mail: ircanada@minandes.com

Organization Profile


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