Minera Andes loses $4.88-million (U.S.) in Q1 2009

2009-05-15 16:04 ET - News Release

Mr. Allen Ambrose reports

MINERA ANDES REPORTS FIRST QUARTER 2009 FINANCIAL RESULTS

Minera Andes Inc. had a net loss of $4.9-million (two cents per share) in its first quarter 2009 financial statements. All amounts in this news release are in U.S. dollars unless otherwise noted.

The company's financial statements are available under the corporation's profile on SEDAR. Minera Andes's share of the net loss derived from Minera Santa Cruz S.A. (MSC) for the three months ended March 31, 2009 (before amortization), was $900,000. MSC is owned 49 per cent by Minera Andes and 51 per cent by Hochschild Mining PLC. MSC owns and operates the San Jose 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 Jose 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 Jose mine. Unfortunately, the mine had a considerable buildup 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 Jose mine in the first quarter of 2009 totalled $21.1-million. During the fourth quarter 2008, total sales from the San Jose mine were $19.6-million. The weighted average sales prices were $12.98 per ounce of silver and $911 per ounce of gold during the first quarter of 2009 and $8.93 per ounce of silver and $774 per ounce of gold during the previous quarter. San Jose's silver and gold sales are unhedged. The first quarter 2009 sales of silver and gold by MSC were lower compared with the 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 dore 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 dore bullion. Cash operating costs were $12.2-million for the quarter, which represents a decrease of approximately 28 per cent compared with the fourth quarter of 2008 and the cash cost per tonne decreased by 29 per cent to $111.80 per tonne. The decrease in total cash operating costs was mainly due to lower costs for marketing, labour, supplies, energy, and repairs and maintenance, and 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.

Mr. Ambrose, 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.