Andean American Gold Corp.
TSX VENTURE : AAG
FRANKFURT : AQN

Andean American Gold Corp.

March 01, 2010 17:09 ET

Andean American Mining Reports Third Quarter Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 1, 2010) - Andean American Mining Corp. (TSX VENTURE:AAG)(FRANKFURT:AQN) - (all figures in Canadian dollars, unless otherwise noted) -

The Board of Directors of Andean American Mining Corp. reports on its Consolidated Interim Financial Statements and Management Discussion and Analysis for the quarter ended December 31, 2009.
Highlights:

Financial:

- The net income for the period was $909,832 or $0.01 per share compared with a net loss of $510,954 or $0.01 per share in the comparable period last year.

- General and administrative expenses and direct operating costs decreased over the same period in the prior year, while foreign exchange gain increased over the comparable period. This decrease was offset by increases in foreign exchange due to the fluctuation between the Canadian and US dollar.

- The loss from operations in this quarter amounting to $67,414 compared with a loss of $371,659 in the comparable period last year was primarily due to a decrease in direct operating costs and stock based compensation.

- Cash flow provided from (used for) operations in the three months ended December 31, 2009 before changes to non-cash working capital was $270,554 compared with ($164,622) in the comparative period for 2008.

Operational:

- The Company received an updated NI 43-101 compliant resource estimate incorporating an additional 2,000 metres of drill results. Qualified Person Victor Jaramillo, P.Geo., of Discover Geological Consultants, Inc. is the author of the report. In addition, the Company is working on an optimized feasibility study demonstrating the applicability of the finalized flow sheets including improvements to the CAPEX, OPEX and the Economic Model.

- The Company filed the Invicta Project Feasibility Study on SEDAR, following an audit by the Lokhorst Group Ventures Inc. The Feasibility Study involved an extensive analysis of all aspects of the project and resulted in a robust financial model with a strong cash flow using conservative metal prices. The Study reports an operating cost for the mine and plant of 28.92 USD/t and a capital cost of USD 65.3 million. The sum of the 5-years bulk revenue is USD 600.1 million and net profits are USD 185.3 million, with a gold base price of USD 900/oz and copper base price of USD 2.00/lb. The Net Present Value at 11% discount rate of the 5-year free cash flow net of debt amortization amounts to USD 159 million in the base case scenario. The Company expects pre-production mine development to take approximately 15 months from project initiation. On August the 7th, 2009 the Company announced a financial advisory agreement with WestLB for the Invicta Mining Project. On February 10th, 2010 the Company signed a joint lead mandate with Barclay's Capital and WestLB to provide US$68 million in senior debt finance to the Invicta project, subject to due diligence.

- At the Sinchao Project an initial resource estimate was calculated during fourth quarter of 2008. The NI 43-101 compliant resource estimate was completed using 42 diamond drill holes. An inferred resource of 237 million tonnes grading 0.47% copper, 0.49 g/t gold and 12.1 g/t silver was estimated using a 0.27% copper cut-off. This inferred resource is within a larger inferred resource of 416 million tonnes grading 0.36% copper, 0.33 g/t gold and 9.2 g/t silver at a 0.13% copper cut-off. A recent re-interpretation of the property geology indicates that less than 15% of the mineralized zones have been tested to date. The geological potential for additional resources at the Breccia and Skarn Zones has been estimated to range from 400Mt to 1,600Mt.

- The Company has exploration programs planned for Sinchao and Invicta. Strategic partners may be involved. Less than 5% of Invicta and 15% of Sinchao has been drilled to date.

The complete Management Discussion and Analysis and Financial Statements will be filed with SEDAR at www.sedar.com. For further information call (604) 681-6186 or toll free: 1-888-356-4784 or visit our website at www.andeanamerican.com. Andrew Gourlay, P. Geol., Geological Consultant, is the Qualified Person for the technical disclosure in this news release.

On behalf of Andean American Mining Corp.,

John Huguet, Chairman & CEO

Andean American Mining Corp. (TSX VENTURE:AAG)(FRANKFURT:AQN) is an international mining and exploration company focused on growth. The Company is actively pursuing new targets of potential early stage gold and silver prospects in Peru and currently has two key assets: the 28,200 hectare Invicta gold-silver-copper advanced exploration stage project; 59% of Sinchao Metals Corp., owner of the Sinchao zinc-copper-silver-gold-lead mineralization project. For further information call (604) 681-6186 or toll free: 1-888-356-4784 or visit www.andeanamerican.com.

This news release may contain forward-looking information within the meaning of the Securities Act (Ontario) ("forward-looking statements"). Such forward-looking statements may include the Company's plans for its mineral projects, the overall economic potential of its properties, the availability of adequate financing and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements expressed or implied by such forward-looking statements to be materially different. Such factors include, among others, risks and uncertainties relating to potential political risks involving the Company's operations in a foreign jurisdiction, uncertainty of production and costs estimates and the potential for unexpected costs and expenses, physical risks inherent in mining operations, currency fluctuations, fluctuations in the price of gold and other metals, completion of economic evaluations, changes in project parameters as plans continue to be refined, the inability or failure to obtain adequate financing on a timely basis, and other risks and uncertainties, including those described in the Company's Financial Statements, Management Discussion and Analysis and Material Change Reports filed with the Canadian Securities Administrators and available at www.sedar.com.

Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by the inability to obtain required environmental and other regulatory approval, environmental or operating permits. The estimate may also be materially affected by global economic conditions such as the price of gold and silver, the price of oil and other commodities utilized in the production of gold and silver. Unknown geologic or hydrologic conditions or other unknown factors may materially affect the resource estimates.

This document may use the terms 'measured resources', 'indicated resources' and 'inferred resources'. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In addition, 'inferred resources' have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable. The quantity and grade of the potential mineralization is conceptual in nature, and there has been insufficient exploration to define a mineral resource. It is uncertain if further exploration will result in the targets being delineated as mineral resources.



ANDEAN AMERICAN MINING CORP.
INTERIM CONSOLIDATED BALANCE SHEETS

See Note 1 - Nature of Operations and Going Concern Uncertainty

December 31, December 31, March 31,
2009 2008 2009
(Restated
- Note 4)
------------ ------------ ------------
(Unaudited) (Unaudited) (Audited)
ASSETS
Current
Cash and cash equivalents $ 222,567 $ 238,911 $ 28,358
Accounts receivable (Note 5) 298,734 874,127 287,037
Prepaid expenses 102,061 149,533 33,480
Mineral on pads and inventories
(Note 6) - 483,930 181,628
------------ ------------ ------------
623,362 1,746,501 530,503
Mineral properties and deferred
costs (Note 7) 43,422,626 41,508,947 41,714,764
Property, plant and equipment
(Note 8) 1,599,843 1,722,816 1,664,436
------------ ------------ ------------
$ 45,645,831 $ 44,978,264 $ 43,909,703
------------ ------------ ------------
------------ ------------ ------------
LIABILITIES
Current
Bank indebtedness $ - $ 316,319 $ 28
Accounts payable and accrued
liabilities 3,638,316 4,906,510 5,784,678
Loans payable (Note 9) 1,440,791 382,312 615,903
------------ ------------ ------------
5,079,107 5,605,141 6,400,609

Future income tax liabilities 826,229 678,693 787,159
Reclamation and closure costs
(Note 10) 129,941 150,589 155,942
------------ ------------ ------------
956,170 829,282 943,101
Non-controlling interest 12,223,509 12,487,884 12,300,403
------------ ------------ ------------
18,258,786 18,922,307 19,644,113
------------ ------------ ------------
SHAREHOLDERS' EQUITY
Share capital (Note 11) 73,103,257 71,507,912 71,507,104
Contributed surplus (Note 12) 12,197,142 10,896,914 11,211,019
Deficit (57,913,354) (56,348,869) (58,452,533)
------------ ------------ ------------
27,387,045 26,055,957 24,265,590
------------ ------------ ------------
$ 45,645,831 $ 44,978,264 $ 43,909,703
------------ ------------ ------------
------------ ------------ ------------

Contingencies (Note 15)
Mineral Properties (Note 7)
Share Capital (Note 11)
Subsequent Events (Note 18)

APPROVED BY THE DIRECTORS

"JOHN HUGUET" "BRYAN MORRIS"
------------------------- -------------------------
DIRECTOR DIRECTOR

The accompanying notes are an integral part of these interim consolidated
financial statements.


ANDEAN AMERICAN MINING CORP.
INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS), COMPREHENSIVE INCOME
(LOSS) AND DEFICIT
FOR THE THREE AND NINE MONTH PERIODS ENDED
(Unaudited)
See Note 1 - Nature of Operations and Going Concern Uncertainty

Three Months Ended Nine Months Ended
December 31 December 31
-------------------------- --------------------------
2009 2008 2009 2008
-------------------------- --------------------------
(Restated (Restated
- Note 4) - Note 4)
REVENUE
Sales of metals $ 26,233 $ 643,576 $ 259,561 $ 2,693,916
------------ ------------ ------------
OPERATING EXPENSES
Direct operating
costs (145,706) 748,538 35,732 2,923,728
Royalty expense (40) 5,953 1,803 32,070
Amortization and
depletion 8,143 21,474 38,912 35,128
Selling expenses (323) 37,986 14,293 119,525
Stock based
compensation 231,573 201,284 429,701 1,254,461
-------------------------- --------------------------
93,647 1,015,235 520,441 4,364,912
-------------------------- --------------------------

GROSS PROFIT (LOSS) (67,414) (371,659) (260,880) (1,670,996)
OTHER (INCOME)
EXPENSE
General and
administrative
expenses 279,003 395,734 958,417 1,458,992
Interest expense 2,342 2,059 3,935 3,552
Other (income)
expense (68,020) (83,455) (2,476) (132,533)
Foreign exchange
loss (gain) (1,143,166) (286,291) (1,683,041) 880,936
Minority interest (47,405) 111,248 (76,894) (246,798)
-------------------------- --------------------------
(977,246) 139,295 (800,059) 1,964,149
-------------------------- --------------------------
NET INCOME (LOSS) AND
COMPREHENSIVE INCOME
(LOSS) FOR THE
PERIOD 909,832 (510,954) 539,179 (3,635,145)
DEFICIT, BEGINNING OF
PERIOD (58,823,186) (55,837,915) (58,452,533) (52,713,724)
-------------------------- --------------------------
DEFICIT, END OF
PERIOD $(57,913,354) $(56,348,869) $(57,913,354) $(56,348,869)
-------------------------- --------------------------
-------------------------- --------------------------
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING
BASIC AND DILUTED 80,621,518 73,620,017 79,052,833 73,620,017
NET INCOME (LOSS) PER
COMMON SHARE
BASIC AND DILUTED $ 0.01 $ (0.01) $ 0.01 $ (0.05)

The accompanying notes are an integral part of these interim consolidated
financial statements.


ANDEAN AMERICAN MINING CORP.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE AND NINE MONTH PERIODS ENDED
(Unaudited)
See Note 1 - Nature of Operations and Going Concern Uncertainty

Three Months Ended Nine Months Ended
December 31 December 31
2009 2008 2009 2008
-------------------------- --------------------------
CASH PROVIDED FROM (Restated (Restated
(USED FOR): - Note 4) - Note 4)
OPERATING ACTIVITIES
Net income (loss)
for the period $ 909,832 $ (510,954) $ 539,179 $ (3,635,145)
Adjustments for
items not affecting
cash:
Amortization and
depletion 8,143 21,474 38,912 35,128
Stock based
compensation 231,573 201,284 429,701 1,254,461
Minority interest (47,405) 111,248 (76,894) (246,798)
Unrealized foreign
exchange (gain)
loss 569,780 (8,276) 648,688 883,639
-------------------------- --------------------------
1,671,923 (185,224) 1,579,586 (1,708,715)
Net changes in non-
cash working
capital items:
Accounts receivable 93,355 22,207 (11,697) (30,371)
Mineral on pads and
inventories - (31,293) (181,628) 268,298
Prepaid expenses (2,136) 34,470 (68,581) 90,199
Accounts payable
and accrued
liabilities (1,492,588) (4,782) (2,146,362) (224,271)
-------------------------- --------------------------
270,554 (164,622) (828,682) (1,604,860)
-------------------------- --------------------------
INVESTING ACTIVITIES
Mineral properties
and deferred costs (717,906) (819,925) (1,653,057) (6,071,081)
Property, plant and
equipment - (132,334) - (243,273)
-------------------------- --------------------------
(717,906) (952,259) (1,653,057) (6,314,354)
-------------------------- --------------------------
FINANCING ACTIVITIES
Private placement of
units, net of issue
costs 604,210 - 1,851,060 1,999,250
Issue (payment) of
loans payable (324,820) 31,653 824,888 (38,562)
-------------------------- --------------------------
279,390 31,653 2,675,948 1,960,688
-------------------------- --------------------------
INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS DURING
THE PERIOD (167,962) (1,085,228) 194,209 (5,958,526)
CASH AND CASH
EQUIVALENTS,
BEGINNING OF PERIOD 390,529 1,007,820 28,358 5,881,118
-------------------------- --------------------------
CASH AND CASH
EQUIVALENTS, END OF
PERIOD $ 222,567 $ (77,408) $ 222,567 $ (77,408)
-------------------------- --------------------------
-------------------------- --------------------------
CASH AND CASH
EQUIVALENTS IS
COMPRISED OF:
Cash $ 222,567 $ 238,911 $ 222,567 $ 238,911
Bank indebtedness - (316,319) - (316,319)
-------------------------- --------------------------
$ 222,567 $ (77,408) $ 222,567 $ (77,408)
-------------------------- --------------------------
-------------------------- --------------------------

The accompanying notes are an integral part of these interim consolidated
financial statements.


SEDAR Profile # 00003879

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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