Andean Resources Ltd.
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ASX : AND

Andean Resources Ltd.

March 24, 2010 17:00 ET

Andean Reports Initial Bajo Negro Resource Estimate

SALT LAKE CITY, UTAH--(Marketwire - March 24, 2010) - Andean Resources (TSX:AND)(ASX:AND) reports an initial resource estimate for the Bajo Negro vein at its 100% owned Cerro Negro project in Southern Argentina. 

The Bajo Negro vein, discovered less than a year ago, is located adjacent to the Silica Cap hill at Cerro Negro and is within 2 kilometers of the Vein Zone deposit in the south eastern portion of the Company's property. Since then, Andean has drilled 117 holes in the vein, of which 105 were diamond core holes and 12 were reverse circulation holes. 

Bajo Negro Undiluted Resource Estimate

The NI-43-101 and JORC-compliant resource estimate was completed by Mine Development Associates (MDA) of Reno, Nevada. The estimated undiluted resource within the quartz vein at a 3.0 g/t gold equivalent cut-off is presented in the table below:

Indicated
Cutoff Tonnes Grade Grade Grade Ounces Ounces
g AuEq/t   g AuEq/t g Au/t g Ag/t Au Ag
3.0               1,696,000 10.50 10.10 23.4            551,000            1,277,000
Inferred
Cutoff Tonnes Grade Grade Grade Ounces Ounces
g AuEq/t   g AuEq/t g Au/t g Ag/t Au Ag
3.0                  899,000 7.46 7.22 14.3            209,000               412,000

Note: AuEq or gold equivalent was calculated considering long-term average silver and gold metal price ratios to arrive at a ratio of 60 to 1, respectively. Gold-equivalent calculations reflect gross metal content and have not been adjusted for metallurgical recoveries or relative processing and smelting costs.

Block-Diluted Bajo Negro Resource Estimate

The diluted resource estimate includes portions of the enveloping lower-grade stockwork zones external to the quartz vein that are within the resource blocks and would be mined as dilution:

Indicated
Cutoff Tonnes Grade Grade Grade Ounces Ounces
g AuEq/t   g AuEq/t g Au/t g Ag/t Au Ag
3.0               1,872,000 9.14 8.74 24.0            526,000            1,443,000
Inferred
Cutoff Tonnes Grade Grade Grade Ounces Ounces
g AuEq/t   g AuEq/t g Au/t g Ag/t Au Ag
3.0                  935,000 6.33 6.07 15.7            183,000               471,000

To-date, the Bajo Negro vein has been defined by drilling over a strike length of almost 1.2 kilometers and has an average true width of 3.9 meters and a known vertical extent of up to 300 meters. The 3.0 g/t gold equivalent envelope is shown in Figure 1. Bajo Negro remains open along strike and to depth, with further drilling planned for later this year. Currently, two universal RC/Core rigs and one dedicated core only rig are actively drilling the new Mariana Norte, Mariana Central and San Marcos veins. 

The indicated resource portion of this Bajo Negro estimate will be used to develop the mine plan at Bajo Negro for the ongoing Feasibility Study that is on schedule to be completed by the end of June of this year. The other mine plans being prepared for the Feasibility Study include the Eureka West and Vein Zone deposits, bringing the total Indicated resources, now with the Bajo Negro deposit addition, to approximately 2.5 million ounces of gold and 21 million ounces of silver. Inferred resources at Cerro Negro would be in addition to these indicated resources.

A high percentage of the inferred resource at Bajo Negro is expected to convert to the indicated category with additional drill testing, especially along the diatreme contact.

Wayne Hubert, Andean's CEO, commented, "Bajo Negro will significantly improve the economics of Cerro Negro with average grades of 10 grams per tonne gold equivalent, good average mining widths of 4 meters, remarkable continuity of the vein, and good host rock conditions. The vein also remains open along strike with the most northerly drill intercept having a gold grade of over 25 grams per tonne. This certainly reflects the excellent work done by Andean's team in Argentina in adding three-quarters of a million high grade ounces in less than 12 months." 

The tables below show the sensitivity of the diluted resources to changes in cut-off grade:

Cutoff Tonnes Grade Grade Grade Ounces Ounces
g AuEq/t g AuEq/t g Au/t g Ag/t Au Ag  
1 2,506,000 7.32 6.99 20.09 563,000 1,619,000
1.5 2,329,000 7.78 7.43 21.06 556,000 1,577,000
2 2,168,000 8.23 7.86 22.01 548,000 1,534,000
3 1,872,000 9.14 8.74 23.98 526,000 1,443,000
4 1,589,000 10.15 9.71 26.27 496,000 1,342,000
5 1,350,000 11.15 10.67 28.68 463,000 1,245,000
6 1,134,000 12.23 11.71 31.21 427,000 1,138,000
7 974,000 13.17 12.61 33.53 395,000 1,050,000
8 835,000 14.12 13.52 35.76 363,000 960,000
             
Inferred
Cutoff Tonnes Grade Grade Grade Ounces Ounces
g AuEq/t g AuEq/t g Au/t g Ag/t Au Ag  
1 1,660,000 4.39 4.19 12.22 223,000 652,000
1.5 1,421,000 4.92 4.7 13.2 215,000 603,000
2 1,233,000 5.41 5.17 14.07 205,000 558,000
3 935,000 6.33 6.07 15.68 183,000 471,000
4 697,000 7.31 7.02 17.49 157,000 392,000
5 491,000 8.5 8.17 19.87 129,000 314,000
6 339,000 9.86 9.49 22.53 103,000 246,000
7 254,000 10.99 10.58 24.67 86,000 202,000
8 189,000 12.21 11.77 26.91 71,000 163,000

Andean Resources Ltd. is a dual listed company (TSX:AND)(ASX:AND), actively and aggressively exploring for gold resources in Argentina. The company is well positioned to become a mid-tier gold producer over the next two years as it commences production from its 100% owned Cerro Negro project. This high-grade, world-class deposit is located in the mining-friendly province of Santa Cruz, in southern Argentina, and contains a growing resource base of over 3.2 million ounces of gold. In order to expand its resource base and add to the future production profile, Andean is committed to ongoing exploration and building its resource inventory at the Cerro Negro project and, in the process, generating enhanced returns for its shareholders as a platform for future growth.

Quality Control and Assurance

The analytical results quoted in this release are derived from half drill core in the case of diamond drill holes. Samples are prepared and assayed by ACME Analytical Laboratories SA (Mendoza) in Mendoza, Argentina. Gold is determined initially by fire assay with AA finish. Samples assaying more than 10 ppm gold are re-assayed using a gravimetric finish. Silver is determined initially by AAS, and samples assaying more than 100 ppm silver are re-assayed by fire assay with gravimetric finish. Quality control of the analytical results is maintained by inserting standards, blanks, and duplicates into the sample run, approximately every twenty samples. These checks are evaluated statistically at regular intervals. All analytical data are entered into a Microsoft Access database, with limited access and numerous checks to ensure integrity of the data.

Qualified Persons Statement

Steven Ristorcelli has sufficient experience (more than 5 years) which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Steven Ristorcelli consents to the inclusion in this press release the matters related specifically to reported Bajo Negro resources. The information in this report that relates to Mineral Resources is based on information compiled by Steven Ristorcelli, who is a Member of the AIPG, which is a 'Recognised Overseas Professional Organisation' ('ROPO') included in a list promulgated by the ASX from time to time.

Forward Looking Statement

This press release contains certain "forward-looking statements". All statements, other than statements of historical fact, that address activities, events or developments that Andean Resources Limited, including its subsidiaries and affiliated entities (collectively, "Andean" or the "Company"), believes, expects or anticipates will or may occur in the future are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect", and "intend" and statements that an event or result "may", "will", "can", "should", "could", or "might" occur or be achieved and other similar expressions. These forward-looking statements reflect the current internal projections, expectations or beliefs of Andean based on information currently available to Andean. Forward-looking statements are subject to a number of risks and uncertainties, including those detailed from time to time in filings made by Andean with securities regulatory authorities, that may cause the actual results of Andean to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on Andean. Andean expressly disclaims any obligation to update or revise any such forward-looking statements. 

This release is not authorized for distribution to United States newswire services and not authorized for dissemination in the United States. The securities discussed herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state and may not be offered or sold in the United States or to United States persons (as defined in Regulation S of the Securities Act) unless an exemption from registration is available.

To view Figure 1: Bajo Negro 3 g/t gold equivalent grade-shell with drill-holes, please visit the following link: http://media3.marketwire.com/docs/bajonegro1.pdf

To view Figure 2: Bajo Negro Longitudinal Section showing Grade-Thickness (gm) (*gold only x horizontal thickness), please visit the following link: http://media3.marketwire.com/docs/bajonegro2.pdf

ABN 064 494 319

Contact Information

  • Andean Resources Limited
    Krista Muhr
    Director of Investor Relations
    In North America: +1.647.330.1478
    In Australia: +61 (0) 448.886.460
    krista.muhr@andeangold.com
    or
    Andean Resources Limited
    1/1 Nairn Street, Fremantle
    Western Australia 6160
    + 61 (8) 9430.9966
    + 61 (8) 9430.9965 (FAX)
    www.AndeanGold.com