Minera Andes to drill five targets in Argentina program

2009-08-24 06:15 ET - News Release

Mr. Krister Kottmeier reports

MINERA ANDES INITIATES EXPLORATION ON 100%-OWNED TARGETS IN ARGENTINA

Minera Andes Inc. has released exploration plans for two principal areas in Argentina:

1. Santa Cruz province where the corporation's San Jose mine is located;
2. San Juan province, site of the corporation's recent Los Azules copper discovery.

The target in Santa Cruz province is high-grade epithermal gold-silver mineralization. In San Juan province, porphyry-style copper mineralization is the primary target.

Exploration program

Minera Andes plans to systematically evaluate its portfolio of properties in Santa Cruz and San Juan province. It is anticipated that in the next 18 months all the properties currently held will be evaluated using satellite image analysis, soil and rock sampling and geologic mapping. The company expects to conduct further work, including various geophysical surveys, on eight to 10 properties in total. The company's work plan calls for reconnaissance core drilling on up to five targets (2,500 meters per target).

Santa Cruz province -- big potential -- many new discoveries

Since beginning exploration in Argentina in the 1990s, Minera Andes has one of the most successful exploration teams in Argentina with two discoveries to its credit: the now-producing San Jose mine (a joint venture between the corporation and Hochschild Mining plc in which the corporation has a 49-per-cent interest) in Santa Cruz province and the Los Azules porphyry copper project in the San Juan province. Santa Cruz is home to several significant precious metal mines and new discoveries. It was not until the 1990s that the area began to be explored. Now that the mine is built and the money is in the bank, the company will be aggressively looking at the discovery potential of its extensive landholdings.

The producing mines in the Deseado massif are:

• AngloGold Ashanti's Cerro Vanguardia mine (reserves of 3.5 million ounces of gold and a production rate of 220,000 ounces per year);
• Pan American Silver's Manantial Espejo mine (reserves of 75 million ounces silver and a production rate of four million ounces silver and 60,000 ounces gold per year);
• Coeur's Mina Marta (a reserve of 50 million ounces silver and a production rate of 2.7 million ounces per year);
• Minera Andes' discovery, the San Jose mine (reserves of 27.3 million ounces silver and 412,000 ounces gold, measured and indicated resources of 39 million ounces silver and 570,000 ounces gold with a production of six million ounces silver and 60,000 ounces gold per year).

Exploration continues to yield positive results in Santa Cruz. Notable recent exploration successes include Andean Resources' Cerro Negro property, close to San Jose, where a resource of 2.4 million ounces of gold has been discovered at the Eureka vein and Exeter Resources' Cerro Moro property which so far has a resource of more that 600,000 ounces gold equivalent. These new discoveries attest to the continued exploration potential of the Deseado Massif.

Minera Andes currently controls 35 properties in Santa Cruz province covering approximately 66,000 hectares. The exploration target is gold and silver mineralization in low-to-intermediate-sulphidation epithermal systems. Largely acquired on the basis of satellite imagery, geologic setting and proximity to known mineralized trends, these properties run the full gamut from grassroots properties, with little or no work done to date, all the way to targets ready to drill (Martes 13). Several properties have already been the focus of preliminary drill campaigns and will be re-evaluated as part of the planned campaign.

San Juan province

The Andean cordillera of Chile and Argentina hosts 18 per cent of the world's copper resources. Alone, the Miocene copper belt of Chile contains 605 billion pounds of copper. Minera Andes has already made a significant copper discovery at Los Azules where 11 billion pounds of copper have been delineated at potentially minable grades (in an inferred resource of 922 million tonnes of 0.55 per cent copper). Los Azules is subject to an option earn-in agreement with Xstrata Copper

In addition to Los Azules, Minera Andes holds three other porphyry copper targets in San Juan province. One of them, Los Chonchones, has been extensively sampled in a grassroots sense and displays characteristics (alteration etc.) typical of productive porphyry copper systems, and consequently, is a strong candidate for further work.

Initial results from the Celestina project, Santa Cruz province

As a precursor to the proposed program, drilling was completed at the Celestina property in early June. A total of 10 core holes were drilled to depths between 140 metres and 240 metres, for a total of 1,731 metres, to test for gold/silver mineralization. Drilling confirmed the presence of a low-sulphidation epithermal mineralized system. Nine of the 10 holes cut significant widths of mineralized structures. Mineralized intercepts included strongly altered faults and breccias zones with some zones of gray to crystalline quartz. Identified minerals included abundant pyrite and occasional lead and zinc minerals. Assays revealed only weakly anomalous gold (up to 1.2 grams per tonne (g/t) over 1.2 metres and 0.4 g/t over 0.3 metre in hole CL09-10) and silver values (up to 106 g/t over 2.4 metres in hole CL09-04). A thorough study of the geologic significance of the drill program will be made before any decision is made regarding further work.

Qualified person

Assay results were reviewed by Brian Gavin, Minera Andes's vice-president, exploration, who is 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 Acme Analytical Argentina, SA, in Mendoza, Argentina, for fire assay and ICP analysis. Accuracy of results is tested through the systematic inclusion of standards, blanks and check assays.