AndeanGold Ltd.
TSX VENTURE : AAU

AndeanGold Ltd.

April 22, 2010 09:00 ET

AndeanGold Signs Agreement to Acquire a 60% JV Interest in the Advanced-Stage Urumalqui Au-Ag Project, Peru

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 22, 2010) - AndeanGold Ltd. ("the Company" or "AndeanGold") (TSX VENTURE:AAU) is pleased to announce that, pursuant to the previously announced Memorandum of Understanding (see news release of February 1, 2010), it has signed an agreement (the "Agreement") with Gitennes Exploration Inc. ("Gitennes") (TSX Venture Exchange: GIT) to acquire a 60% Joint Venture ("JV") interest in Gitennes' Urumalqui Au-Ag Project (the "Project"). The Project is an advanced-stage exploration property located in the Department of Libertad, Peru, approximately 70 km east of the city of Trujillo. The Project consists of four (4) contiguous concessions totaling 2,700 hectares, and is located at elevations ranging from 3,400 – 3,700 metres.

Mr. Anthony F. Ciali, President and CEO, stated, "We are extremely pleased to have signed the Agreement on the advanced-staged Urumalqui Project and look forward to initiating the next phases of drilling on the highly prospective Urumalqui Vein structure, which outcrops for 1.5 km on surface and has been drilled to the +/- 200 metre level to date with encouraging results. The Urumalqui Vein mineralization is open along strike and at depth, and the style of mineralization can reach depths of 400 to 600 metres. Future drilling programs will include both infill and deeper drilling to obtain accurate data for future resources / reserves calculations and to determine the depth potential of the Urumalqui Vein mineralization."

Mineralization at the Urumalqui Project is hosted in volcanics and is comprised of several gold-silver quartz veins. Vein mineralogy and textures and associated alteration are characteristic of low-sulphidation, vein-style, epithermal, mineralization. To date, Gitennes' work programs have included grid‐controlled soil sampling, IP and magnetic geophysics surveying, three phases of core drilling (approximately 7,336 metres in 47 holes) and preliminary metallurgical testing. A NI 43-101 Report was prepared on the Project, dated March 30, 2009 (See Gitennes technical report filing at www.sedar.com).

The principal target on the property, among several mineralized vein structures, is referred to as the Urumalqui Vein (the "Vein"), which is a near-vertical feature, up to 20 metres wide, containing a core of one or two banded quartz veins ranging from 0.5 to 11 metres aggregate thickness, and intervening oxidized vein breccias and altered volcanic rocks. The Vein is exposed at surface over a strike length of 1,500 metres and consists of eight vein segments, ranging in length from 40 metres to 400 metres. For the most part, vein outcrop is continuous along each segment.

The majority of the drilling to date has been focused on the 1,000 metre long central and southeastern segment of the Urumalqui Vein and from the surface down to about 200 metres vertical depth. For the 35 holes (5,835 metres) drilled in the Urumalqui Vein to date, the average vein intersection width and weighted average Au and Ag grades were 3.31 metres of 1.33 g/t Au and 154 g/t Ag – 3.90 g/t AUE (gold equivalent based on a 60:1 Ag-Au ratio and assuming 100% recoveries). In the few holes that were deeper than 200 metres, the Vein structure remained strong and mineralized. All holes appear to have been in the "boiling zone", based upon vein textures, and the potential for good mineralization at deeper levels than those tested thus far is considered to be good.

Based on preliminary metallurgical test results to date on core and rock samples, which entailed a combination of gravity, flotation and cyanide test work, it may be possible to achieve favorable recoveries by a combination of crushing and milling, followed by gravimetric separation and cyanide leaching. However, additional metallurgical tests will be required to determine the ultimate method of recovering gold and silver at the Project.

AndeanGold's Peruvian subsidiary, PeruGold Resources S.A.C. ("PGR"), and Gitennes' Peruvian Subsidiary, Minera Corimalqui S.A. ("MC"), the concessions titleholder, are the parties to the Agreement, which is in the process of being registered in Peru. PGR will be entitled to exercise its option and earn a sixty (60) percent shareholder's interest in Newco by:

a) Expending $3 million of qualifying expenditures on the Project over a four (4) year term (the "Term"),

b) Completing 3,000 metres of drilling by the end of the second year of the Term and 7,000 metres of cumulative drilling by the end of the third year of the Term, and

c) AndeanGold issuing Gitennes 200,000 publicly traded shares of the Company, each, within five (5) days of registering the Agreement in Peru (the "Effective Date") and on the first, second and third year anniversaries of the Effective Date.

Except for the first payment, Gitennes may elect to receive cash in lieu of shares, with the cash amount not to exceed $25,000, $50,000 and $100,000 with respect to the first, second and third year anniversary date payments, respectively. If the market value of the Company's shares on the respective payment dates exceed the maximum cash payment amount on such date, the difference will be satisfied by the issuance of equivalent shares.

Upon PGR exercising its option, MC will transfer the mining titles to the Project's concessions to Newco.

This transaction is subject to acceptance by the TSX Venture Exchange.

Dr. William F. Lindqvist, a director of AndeanGold, is the Qualified Person in compliance with National Instrument 43-101 with respect to this release.

About AndeanGold Ltd.:

AndeanGold Ltd. is engaged in the acquisition, exploration and potential development of primarily precious metals properties, principally in Peru and Ecuador. The focus of the Company's exploration activities is presently in advancing its Urumalqui Au-Ag Project and Rio Seco Au Project, as well as pursuing mineral property acquisitions, in Peru. In Ecuador, the Company's activities have been limited to administrative and legal matters due to the Mining Mandate issued by the Ecuador Constituent Assembly on April 18, 2008. On November 4, 2009, President Correa signed the Mining Regulations into law pursuant to the requirements of the new Mines Law, which was passed in January 2009. This was the final legal precursor to the re-initiation of exploration and mining development in Ecuador. The Company has filed the requisite documents with the Ministry of Non-Renewable Natural Resources in support of the Company's request to renew exploration programs on its key projects in Ecuador. The Company looks forward to working with government officials to this end.

Please refer to AndeanGold's website at www.andeangoldltd.com for further information on the Company's projects and activities.

On Behalf of the Board of Directors of ANDEANGOLD LTD.

Anthony F. Ciali, President, CEO and Director

Neither the 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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