Andean Resources Ltd.
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ASX : AND

Andean Resources Ltd.

October 19, 2009 16:30 ET

Andean Resources Announces Drilling and Project Update

PERTH, AUSTRALIA--(Marketwire - Oct. 19, 2009) - Andean Resources (TSX:AND)(ASX:AND) reports further encouraging results from its ongoing drilling program at its 100% owned Cerro Negro project in Southern Argentina. Today's results include the results from the next 16 drill-holes from the Bajo Negro vein for which assays have been received. Four of these holes are classified as step-out holes along strike, four as step-outs to depth, seven as delineation holes, and one hole tested the updip extension of the Bajo Negro vein.



Step-out holes 150m along strike to the north-west:

BDD-958: 3.4m of 13.8 g/t Au and 22 g/t Ag from 309m

BDD-960: 6.55m of 10.4 g/t Au and 39 g/t Ag from 338m

BDD-962: 7.85m of 8.2 g/t Au and 18 g/t Ag from 354m

BDD-969: 4.14m of 13.0 g/t Au and 70 g/t Ag from 318.15m


The widths reported above are intersected widths. The estimated horizontal width of each intersection normal to the strike of the vein is shown in Table 1. The horizontal widths depend on the attitude of the vein and the angle of the drill-hole. They are generally but not always less than the intersected widths. Andean has assumed an underground cut-off grade of 2.5 g/t gold at Bajo Negro for all the interval summaries reported in this release.

With these results, the Bajo Negro vein has now been drill tested with over 70 drill holes for more than 1.1 km in strike length and remains open along strike. The majority of these holes intersected the vein with widths and grades which could permit underground mining and are all shown in Figure 1, the Longitudinal Section for the Bajo Negro vein.



Step-out holes to depth

BDD-957: 4.1m of 5.7 g/t Au and 17 g/t Ag from 294m

BDD-961: 4m of 24.5 g/t Au and 76 g/t Ag from 305m

BDD-963: 9.85m of 5.5 g/t Au and 17 g/t Ag from 340m

Including 2.1m of 16.6 g/t Au and 25 g/t Ag from 340m


Based on this drilling, the Bajo Negro vein remains open to depth along the majority of its currently defined strike length of 1.1km.



Delineation holes

BDD-956: 12.4m of 12.1 g/t Au and 38 g/t Ag from 271m

BDD-959: 16.0m of 10.1 g/t Au and 28 g/t Ag from 263m

BDD-965: 8.4m of 13.1 g/t Au and 79 g/t Ag from 137m

BDD-966: 6.85m of 13.9 g/t Au and 17 g/t Ag from 118.15m

BDD-967: 4.3m of 38.8 g/t Au and 76 g/t Ag from 125.7m

BDD-970: 9.5m of 16.5 g/t Au, 60 g/t Ag from 142.5m

BDD-971: 7.0m of 8.4 g/t Au and 8g/t Ag from 115m
and 6.8m of 5.6 g/t Au and 15 g/t Ag from 126m


These drill-holes were successful in further defining and extending the high-grade contours on the Longitudinal Section shown in Figure 1. This drilling was designed to support the upcoming resource estimate for the Bajo Negro vein, which will be completed in the first quarter of 2010.

The drill-hole BDD-968, designed to test the up-dip extension of the vein on 125S, intersected 1m of 3.6 g/t Au and 4 g/t Ag from 78m, defining the upper limit of economic mineralization on this section.

A breccia above the NW part of the vein, previously regarded as a post-vein rubble breccia, is now thought to be a diatreme which was probably emplaced at the same time as the mineralisation or shortly after (Figures 1 and 2). The nature and extent of this breccia will influence exploration of the vein towards the NW. It is being delineated by ongoing geological and geophysical programs.

Wayne Hubert, Andean's Chief Executive Officer commented, "With high-grades at Bajo Negro persisting for more than 1.1 kilometers and still being open along strike and at depth, the discovery has become material to the ongoing Bankable Feasibility Study now warrants inclusion in the BFS. Not only will Bajo Negro add to the already robust economics of Cerro Negro, but it allows Andean to incorporate into its development plans greater future operational flexibility by having a more centrally located processing plant than was envisaged under the original PFS. Importantly, the underground ramp into the Eureka West ore body which remains one of the critical path items to production at Cerro Negro will be started in the current quarter."

The Bankable Feasibility Study (BFS) will be modified to include the following:



- Infill drilling at Bajo Negro that will be completed during this current
quarter for inclusion in a resource estimate for the first quarter of
2010.

- Metallurgical testwork will be completed on Bajo Negro composites during
the first quarter of 2010. Initial leach testing of the pulp rejects has
been positive.

- Testing a more centrally located processing site, that has been
identified in a different watershed and more central to Bajo Negro,
Mariana, Vein Zone and the San Marcos areas. Condemnation and a
geotechnical assessment of the new process and tailings site will begin
in November.

- A modified mine plan including Eureka West, Bajo Negro and Vein Zone will
be finalized in the second quarter of 2010, providing an even more
attractive mine-life and return than was shown in the Pre-Feasibility
Study.

- The modified BFS including Bajo Negro will be completed in the June
quarter of 2010.


Other Cerro Negro exploration:

Mariana Norte

Float sampling and geological mapping in the Mariana Norte area commenced in the June quarter and continued throughout the September quarter. A total of 77 samples have been collected over a northwest-trending area of 2 x 0.5 kilometers. These include 40 vein quartz float samples with encouraging epithermal textures which average 6.6 g/t Au, 41 g/t Ag. An induced polarization survey is in progress to further define the drill targets.

San Marcos

At San Marcos, located north of the Mariana targets, a northwest-trending breccia vein is developed at the faulted contact between andesite and ignimbrite, over an outcrop length of 200 meters. An east-west vein splays off the breccia vein and is exposed over 250 meters. Pegasus Gold International had drilled an RC hole into each of these structures during the 1990s. Both holes intersected the structures, with 3 meters, 3.65 g/t Au in the east-west vein and 2 meters, 2.64 g/t Au in the breccia vein, however the drilling was apparently too shallow.

Sixteen rock chips were collected from the east-west vein during the September quarter with an average 12.2 g/t Au, 52 g/t Ag. Six rock chips from the breccia vein assayed 0.2 to 1.9 ppm Au, and one additional sample assayed 121 g/t Au, 59 g/t Ag.

Geophysics

Argali Geofisica was contracted during the September quarter to carry out ground magnetics and IP surveys covering areas at Vein Zone-Bajo Negro and Eureka-Mariana-San Marcos.

1. Ground Magnetics

Magnetometer coverage will extend existing coverage at Eureka-Mariana to the east and north to provide continuous cover for the San Marcos and Bajo Negro prospects. The sector extending northwest from Bajo Negro has been completed and shows northwest trends, which will be used to assist in planning step-out drilling.

2. Induced Polarization (IP)

IP surveys commenced during the September quarter will extend existing coverage at Eureka and Vein Zone to cover the Mariana Norte, San Marcos, and Bajo Negro extensions. East-west trending anomalies in the San Marcos area potentially extend the outcropping vein eastward below superficial cover. At the end of the quarter, IP coverage was progressing westward to cover the area of anomalous float at Mariana Norte.

Next Steps

One UDR-1000 drill-rig remains focused on exploration at Bajo Negro, San Marcos, and the Mariana areas. Two multi-purpose (UDR-650) drill-rigs are currently focused on infill drilling the Bajo Negro vein to enable an indicated resource to be included in the BFS. In early November, a reverse circulation (Schramm) drill-rig will be mobilized to Cerro Negro for the purpose of condemnation drilling in the newly located processing plant area. Following this drilling, the rig would be available for exploration drilling.



Table 1: Bajo Negro Drill Hole Collar Data and Intersection Details
------------------------------------------------------------------

Hole Depth East GK North GK RL (m) Az (GK) Angle (deg)
(m) (m) (m)
--------------------------------------------------------------
BDD- 316.1 2407214 4805221 917.9 245 -65
956

--------------------------------------------------------------
BDD- 342.0 2407111 4805285 914.0 245 -75
957

--------------------------------------------------------------
BDD- 354.0 2407108 4805341 913.3 245 -61
958

--------------------------------------------------------------
BDD- 300.0 2407178 4805253 917.8 245 -60
959

--------------------------------------------------------------
BDD- 368.6 2407152 4805357 914.2 245 -60
960

--------------------------------------------------------------
BDD- 330.0 2407179 4805254 917.8 245 -68
961

--------------------------------------------------------------
BDD- 390.0 2407093 4805382 909.8 245 -60
962

--------------------------------------------------------------
BDD- 370.0 2407259 4805245 923.5 245 -63
963



--------------------------------------------------------------
BDD- 408.0 2407094 4805383 909.6 245 -68
964

--------------------------------------------------------------
BDD- 170.0 2407354 4805036 906.8 245 -60
965

--------------------------------------------------------------
BDD- 150.0 2407486 4804822 887.5 245 -60
966

--------------------------------------------------------------
BDD- 150.0 2407507 4804777 884.4 245 -60
967

--------------------------------------------------------------
BDD- 107.9 2407481 4804709 881.0 245 -60
968

--------------------------------------------------------------
BDD- 344 2407016 4805402 901.1 245 -62
969
--------------------------------------------------------------
BDD- 167 2407299 4805092 913.8 245 -60
970


--------------------------------------------------------------
BDD- 150.0 2407523 4804727 881.5 245 -60
971


-------------------------------------------------------------


-------------------------------------------------------------
Hole From To Width Au Ag Hor
(m) (m) (m) (g/t) (g/t) Width
(m)
-------------------------------------------------------------
BDD- 270.8 283.15 12.35 12.1 38 10.8
956

-------------------------------------------------------------
BDD- 293.8 297.9 4.1 5.7 17 3.1
957

-------------------------------------------------------------
BDD- 309 312.4 3.4 13.8 22 2.4
958

-------------------------------------------------------------
BDD- 263 279 16.0 10.1 28 16.0
959

-------------------------------------------------------------
BDD- 337.9 344.45 6.55 10.4 39 4.9
960

--------------------------------------------------------------
BDD- 305 309 4 24.5 76 3.8
961

--------------------------------------------------------------
BDD- 354.15 362 7.85 8.2 18 5.2
962

--------------------------------------------------------------
BDD- 339.6 348.5 9.85 5.5 17 6.2
963 Incl
339.6 341.7 2.1 16.6 25 1.3

--------------------------------------------------------------
BDD- NSV
964

--------------------------------------------------------------
BDD- 123.45 126.6 3.15 17.6 45 2.3
965
---------------------------------------------------------
136.5 142.7 6.2 17.2 103 4.5

--------------------------------------------------------------
BDD- 118.15 125 6.85 13.9 17 6.3
966
--------------------------------------------------------------
BDD- 125.7 130 4.3 38.8 76 3.8
967

--------------------------------------------------------------
BDD NSV
968

--------------------------------------------------------------
BDD- 318.15 322.3 4.15 13.2 70 4.1
969

--------------------------------------------------------------
BDD- 132.0 132.75 0.75 62.5 594 0.6
970
---------------------------------------------------------
142.5 152 9.5 16.5 60 7.5

---------------------------------------------------------
165.25 167 1.75 5.5 11 1.4

--------------------------------------------------------------
BDD- 115 122 7.0 8.4 8 6.4
971

---------------------------------------------------------
126 132.8 6.8 5.6 15 5.9

--------------------------------------------------------------


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. Additional quality control is maintained by sending assay sample splits to a second laboratory from time to time. 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.

Competent Persons Statement

The information in this Report that relates to exploration results is based on information provided by David Shatwell who is a Fellow of the Australian Institute of Geoscientists. Mr. Shatwell has extensive experience relevant to the style and type of mineralisation and deposits under consideration, and to the activity undertaken, to qualify as a Competent Person as defined in the 2004 Edition of the "Australian Code for Reporting of Mineral Resources and Ore Reserves" (the JORC Code). Mr. Shatwell consents to the inclusion in this Report on his work in the form and context in which it appears.

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 2.5 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.

NOTE: To view Figure 1, please visit the following link: http://media3.marketwire.com/docs/nn.pdf

NOTE: To view Figure 2, please visit the following link: http://media3.marketwire.com/docs/nm.pdf

Contact Information

  • Andean Resources Ltd.
    Krista Muhr
    Director of Investor Relations
    (647) 330-1478
    krista.muhr@andeangold.com
    or
    Andean Resources Ltd.
    Morrice Cordiner
    Director
    +61 (2) 9276 1245
    Cell: +61 (0) 412 270 761
    morrice@bigpond.net.au
    or
    Andean Resources Ltd.
    1/1 Nairn Street, Fremantle
    Western Australia 6160
    +61 (8) 9430 9966
    +61 (8) 9430 9965 (FAX)
    www.andeangold.com