Minera Andes signs definitive agreement at Los Azules copper project with Xstrata Copper

    TSX: MAI

    SPOKANE, WA, Nov. 14 /CNW/ - Minera Andes Inc. (TSX: MAI; US OTC: MNEAF)
is pleased to report that a definitive Option Agreement has been executed by
Minera Andes and Xstrata Copper regarding the Los Azules porphyry copper
project in San Juan province, Argentina. The Option Agreement consolidates
into one package adjoining properties that straddle a large copper porphyry
system. Xstrata Copper is one of the commodity business units within Xstrata
plc (London Stock Exchange: XTA.L and Zurich Stock Exchange: XTRZn.S).

    Option Agreement

    Minera Andes and its subsidiary company Minera Andes S.A. ("MASA") and
Xstrata Copper have contributed their respective properties into the Option
Agreement. Under the Option Agreement, MASA has the right to earn a 100%
interest in Xstrata Copper's property by spending at least US$1.0 million on
the property by November 2010, making payments to keep the property in good
standing and producing a preliminary economic assessment (to NI 43-101
standards). If in the opinion of Xstrata Copper, the preliminary assessment
shows the potential to economically produce 100,000 tonnes (200 million
pounds) of contained copper per year for 10 years or more then Xstrata Copper
will have a right to earn a 51% interest in the combined properties (the
"Back-in Right"). To satisfy the conditions of the Back-in Right, Xstrata
Copper must assume control and responsibility for the combined properties,
make a cash payment to Minera Andes of three times MASA's expenditures
incurred on the combined properties after the 25th of November 2005 and
complete a bankable feasibility study within five years of its election to
exercise the Back-in Right. In the event that the preliminary assessment does
not, in Xstrata Copper's opinion, meet the criterion contemplated above,
Xstrata Copper's interest would be limited to a right of first refusal on a
sale of the combined properties, or any part thereof. All lands that make up
the combined properties' mineral applications are subject to a provincial
mouth of mine royalty of between zero and 3%. This royalty will be negotiated
with the province of San Juan as the project advances.
    If Xstrata Copper advises MASA of its intention to exercise Xstrata
Copper's Back-in Right for a 51% interest, Minera Andes will be required to
form a new Argentinean operating company and transfer the combined properties
to the operating company. Following the completion of its Back-in Right,
Xstrata Copper will also be required to use commercially reasonable efforts to
obtain project financing for the development of a mine as contemplated by the
bankable feasibility study. If the project financing arrangements are accepted
by MASA and such financing completes, Xstrata Copper will earn an additional
4% interest in the project, thereby reducing MASA's interest from 49% to 45%.
If project financing is not available or not accepted by MASA, the project may
proceed without third party financing.
    MASA and Xstrata Copper are to use good faith efforts to negotiate and
execute a shareholders' agreement governing the operating company after the
date that Xstrata Copper notifies MASA of its intention to exercise the
Back-in Right. The activities that may be undertaken by the operating company
while Xstrata Copper is completing its back-in and thereafter, until a
shareholders agreement is signed, will be limited to those activities
necessary to deliver the Bankable Feasibility Study. From the date that
Xstrata Copper satisfies the conditions of the Back-in Right up until the date
on which a shareholders agreement is signed, each of MASA and Xstrata Copper
will have a right of first refusal over any bona fide offer received by the
other party from a third party purchaser (other than an affiliate) to purchase
any of its interest, directly or indirectly, in the project.
    The obligation of Xstrata Copper to seek project financing and the
limitations placed on the operating company will cease if MASA transfers,
directly or indirectly, its interest in the project (other than to an
affiliate) or in the event of a change of control of MASA, regardless of
whether MASA and Xstrata Copper have entered into a shareholders agreement.
    The obligations of MASA under the Option Agreement are guaranteed by
Minera Andes and the obligations of Xstrata Copper are guaranteed by Xstrata
Queensland Limited. Minera Andes is prohibited from entering into certain
transactions resulting in its disposing its interest in the project or a
certain portion of its interest in Minera Santa Cruz S.A., unless the acquirer
assumes Minera Andes' guarantee obligations under the Option Agreement.

    The Los Azules Property

    Road work and planning for the set up of the base camp and drilling at
Los Azules is currently in progress. It is anticipated that the drilling will
start for this Argentine summer field season within the next thirty days. The
exploration program at Los Azules is designed to define an inferred resource
and provide sufficiently detailed information to allow the completion of a
Preliminary Assessment (as defined by NI 43-101) of the property.
    Over half the drilling to define a copper resource has been completed to
date and drilling will continue this field season over the known area of
leachable (chalcocite) and sulfide (chalcopyrite) copper mineralization as
currently defined. The area to be drilled covers approximately 2.5 kilometers
by 0.9 kilometers within the enriched copper target currently identified at
Los Azules that is about 3.3 kilometers long and 0.9 kilometers wide (see
attached map). Holes will be drilled at a nominal grid spacing of 200 meters
east-west and 400 meters north-south. Where needed fill in holes will be
drilled on the 200 meter north-south grid lines.
    A total of 24 holes, totaling approximately 10,000 meters, are planned
for the current campaign, to complete a mineral resource estimate. Drilling
will commence on the northern half of the mineralized copper target where
AZ-06-19 encountered 221 meters of mineralization averaging 1.62 percent
copper that was 200 meters from hole AZ-06-20 containing 173 meters of 1.00
percent copper. Drilling will also include infill drilling on the southern
half of the target. The holes will be drilled to a depth of approximately 350
meters. This drilling will test a known area of leachable (chalcocite) and
sulfide (chalcopyrite) copper mineralization currently defined by 26 drill
    Allen Ambrose, president of Minera Andes, said, "Our technical team is
anxious to start drilling and following up on the high grade copper results
from our previous drilling campaigns. The northern portion of the Los Azules
target where drilling has discovered thick sections of plus 1% copper is
exciting in that we see a large copper target developing that is near surface
and high grade. We look forward to reporting on Los Azules and anticipate
completing the remainder of the drilling in the coming field season so we can
report a copper resource by mid next year."
    The engineering firm of Gustavson and Associates has been retained to
monitor the program and prepare the NI 43-101 resource estimate and
Preliminary Assessment report. The fieldwork during the upcoming field season
will be managed by Minera Andes' technical staff with the assistance of
Nivaldo Rojas and Associates.
    The highlights from the previously reported 2005, 2006, and 2007 drilling
campaigns are listed in Table 1 below with several holes ending in copper
mineralization, including AZ-07-24D and AZ-06-19 that bottomed in high-grade
copper over 1 percent.

    Table 1. Significant Drilling Results at Los Azules, 1998 to 2007
                                    Intersection                  Total
    Drill Hole           TD       From         To   Interval     Copper
                         (m)        (m)        (m)        (m)        (%)
    AZ-04-01 (core)     195        130        195         56       0.62
      Includes:                    150        192         36       0.82
    AZ-04-02 (core)   330.5        164        304        140       0.38
      Includes:                    164        190         26       0.47
      Includes:                    230        304         72       0.42
    AZ-04-04 (core)   300.8        162        282        120       0.54
      Includes:                    162        202         40       0.59
      Includes:                    236        282         46       0.64
    AZ-04-07 (core)   168.8         96        152         56       0.44
      Includes:                    126        152         26       0.58
    LA-04-98 (RC)       250        117        250        133       0.47
    LA-06-98 (RC)       250         61        250        189       0.44
      Includes:                    157        250         93       0.64
    LA-08-98 (RC)       220         77        220        143       0.55
      Includes:                    103        220        117       0.61
    LA-03-04 (RC)       226         94        226        132       0.40
      Includes:                    104        114         10       1.12
    AZ-06-10 (core)  261.35        174     261.35      87.35       0.83
    AZ-06-11 (core)   270.7      158.7      270.7      158.7       0.51
    AZ-06-14 (core)  224.55        136        178         42       1.13
      Includes:                    136        158         22       1.40
    AZ-06-17 (core)   183.5         66      183.5     117.65       0.63
      Includes:                     66        124         58       0.84
    AZ-06-19 (core)   299.4      78.25      299.4     221.15       1.62
      Includes:                  78.25        116      37.75       2.22
      Includes:                    134        146         12       3.94
    AZ-06-20 (core)   253.3         80      253.3      173.3       1.00
      Includes:                     80         98         18       1.69
      Includes:                     98        182         84       1.12
    AZ-07-22 (core)   271.2        119        257        138       0.62
      Includes:                    119        155         36       0.99
      Includes:                    119        139         20       1.24
      Includes:                    155        257        102       0.49
      Includes:                    213        227         14       0.71
    AZ-07-24D (core)  278.2        124      278.2      154.2       0.54
      Includes:                    124        160         36       0.80
      Includes:                    160        202         42       0.50
      Includes:                    202        234         32       0.34
      Includes:                    234      278.2       44.2       0.66
      Includes:                    234        254         20       0.74
      Includes:                    264      278.2       14.2       0.87
    AZ-07-29B        226.85        126        216         90       0.71
      Includes:                    126        154         28       0.86
      Includes:                    170        204         34       0.92

    To view a map of the Los Azules Porphyry Copper Project please visit

    All results have been reviewed by Brian Gavin, Minera Andes' vice
president of exploration, an appropriately qualified person as defined by
National Instrument 43-101. All samples were collected in accordance with
industry standards. Splits from the drill core samples were submitted to Alex
Stewart Assayers, Argentina, S.A., in Mendoza, Argentina, for sample pulp
preparation and to ALS Chemex Laboratories, Mendoza, during the 2004 field
season and to ACME Analytical Laboratories, Mendoza, during the 2006 and 2007
field seasons, for fire assay and ICP analysis. Accuracy of results is tested
through the systematic inclusion of standards, blanks and check assays and by
reanalysis of 10% of samples at the Alex Stewart Assayers, Argentina, S.A. lab
in Mendoza Argentina.

    About Minera Andes

    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 49% owned San José silver/gold mine that has
started initial production. As discussed above, Minera Andes is 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 166,832,517 shares issued and outstanding.
    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. 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 base 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.

    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 Rd., Suite 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

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