Andaurex Industries Inc.
TSX VENTURE : AWX

November 15, 2006 10:37 ET

Andaurex Industries Inc.: Drilling Extends Gold Skarn Discovery on San Anton Property

Intersections Include 35m Grading 2.29 gAuEq/t and 13.7m Grading 4.83gAuEq/t

OTTAWA, ONTARIO--(CCNMatthews - Nov. 15, 2006) - NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE US

Kings Minerals NL and Andaurex Industries Inc. (TSX VENTURE:AWX) are pleased to announce the latest drill results from a gold skarn deposit located on the southern flank of the Cerro del Gallo gold/silver deposit on the San Anton property in Guanajuato State, Mexico. Higher grade gold-dominant skarn intersections, which are located within much broader mineralized intercepts, include 35m grading 1.23g/tAu, 4g/t Ag and 0.43% Cu from 139.00m in hole SA-120, 15.24m grading 2.99g/t Au, 3g/t Ag and 0.33% Cu from 167.64m in hole SA-088, 13.00m grading 2.25g/t Au, 4g/t Ag and 0.56% Cu from 170.00m in hole SA-128 and 13.72m grading 3.70g/t Au, 4g/t Ag and 0.47% Cu from 236.22m in hole SA-188.

The gold skarn is a separate and distinct zone of mineralization that lies peripheral to the Cerro del Gallo deposit and usually occurs within a broader envelope of gold mineralization that is up to 200m in width and generally higher grade than the average for the deposit. The gold skarn has now been intersected in a total of 10 diamond core and reverse circulation ("RC") drill holes over a strike length of approximately 250m and the zone is up to 50m wide. Assay results are still pending on four of these holes. The gold skarn dips southwesterly at -40 degrees and remains open down dip and along strike. Further drilling is planned to define the full extent of this significant new zone of gold mineralization.

Gregory Bowes, President of Andaurex commented that "The discovery of the gold skarn and the continued expansion of the gold rich zone indicate that gold mineralization is both higher grade and more extensive at the southern end of the Cerro del Gallo deposit. As a result, we will be able to evaluate the economics of a number of development scenarios including starting up with a standard gold processing operation."

Andaurex is acquiring, subject to regulatory approval, Kings Minerals 51% interest in the San Anton property through a reverse takeover transaction that will result in the formation of a new company, San Anton Resource Corporation, which will hold the interest in the property. The other 49% is owned by Goldcorp. The Cerro del Gallo deposit hosts measured and indicated resources of 225 million tonnes grading 0.81g/t AuEq (5.9Mozs of AuEq based on 0.35g/tAu, 13g/tAg and 0.10% Cu) and inferred resources of 229 million tonnes grading 0.71g/t AuEq (5.2Mozs of AuEq based on 0.30g/tAu, 11g/tAg and 0.10% Cu), both based on a 0.30g/t AuEq cut-off grade. The resource estimate is based on a total of 24,635 metres of drilling in 110 drill holes to the cut-off date of December 16, 2005. Over 56,000m of infill and expansion drilling has now been completed on the deposit and a new resource estimate will be prepared in the first quarter of 2007.




GOLD SKARN PROSPECT
SIGNIFICANT DRILL INTERSECTIONS (0.40 g/t Au only cut-off)
(Skarn mineralization only)


Hole ID From To Interval Au Ag Cu AuEq
------------------------------------------------------
SA-086 167.65 169.16 1.52 1.72 2 0.17 2.14
------------------------------------------------------
SA-088 170.69 182.88 12.19 2.99 4 0.37 3.92
------------------------------------------------------
SA-093 64.01 68.58 4.57 1.53 4 0.12 1.88
------------------------------------------------------
SA-120 139.00 174.00 35.00 1.23 4 0.43 2.29
------------------------------------------------------
SA-128 170.00 183.00 13.00 2.25 4 0.56 3.59
------------------------------------------------------
SA-141 79.00 88.00 9.00 0.93 6 0.32 1.76
------------------------------------------------------
SA-188 172.21 175.26 3.05 4.38 (i) (i) (i)
------------------------------------------------------
SA-188 182.88 192.02 9.14 2.01 (i) (i) (i)
------------------------------------------------------
SA-188 236.22 249.94 13.72 3.70 4 0.47 4.83
------------------------------------------------------
SA-211 163.07 170.69 7.62 (i) (i) (i) (i)
------------------------------------------------------
SA-211 227.08 228.60 1.52 (i) (i) (i) (i)
------------------------------------------------------
SA-214 117.35 123.44 6.09 3.69 (i) (i) (i)
------------------------------------------------------
SA-214 124.97 129.54 4.57 1.05 (i) (i) (i)
------------------------------------------------------
SA-214 137.16 149.35 12.19 1.00 (i) (i) (i)
------------------------------------------------------
SA-214 167.64 169.16 1.52 1.00 (i) (i) (i)
------------------------------------------------------
SA-215 111.25 124.97 13.72 1.54 (i) (i) (i)
------------------------------------------------------
SA-215 138.68 141.73 3.05 1.33 (i) (i) (i)
------------------------------------------------------

(i) Assays pending



GOLD SKARN PROSPECT
SIGNIFICANT DRILL INTERSECTIONS (0.30 g/t AuEq cut-off)
(Total mineralization)


------------------------------------------------------------------------
HOLE ID From To Interval Au Ag Cu AuEq COMMENTS
(g/t) (g/t) (%) (g/t)
------------------------------------------------------------------------
SA-086 70.10 97.54 27.43 0.23 23 0.15 0.96
SA-086 134.11 169.16 35.05 0.57 3 0.11 0.88 Open at Depth
------------------------------------------------------------------------
SA-088 0.00 199.64 199.64 0.47 10 0.15 0.99 Open at Depth
------------------------------------------------------------------------
SA-093 0.00 216.41 216.41 0.81 10 0.06 1.11 Open at Depth
------------------------------------------------------------------------
SA-120 121.00 202.00 81.00 0.83 5 0.30 1.60
------------------------------------------------------------------------
SA-128 130.00 200.00 70.00 0.68 6 0.26 1.38
------------------------------------------------------------------------
SA-141 67.00 92.00 25.00 0.56 4 0.16 0.99
------------------------------------------------------------------------
SA-188 135.64 175.26 39.62 1.06 -- -- 1.06
SA-188 179.83 265.18 85.34 1.31 3 0.23 1.88 Results Pending
------------------------------------------------------------------------
SA-211 36.58 38.10 1.52 1.53 -- -- 1.53
SA-211 150.88 160.02 9.14 2.01 -- -- 2.01 Results Pending
------------------------------------------------------------------------
SA-214 105.16 152.40 47.24 1.15 -- -- 1.15
SA-214 167.64 179.83 12.19 0.54 -- -- 0.54 Results Pending
------------------------------------------------------------------------
SA-215 88.39 126.49 38.10 1.03 -- -- 1.03
SA-215 134.11 167.64 33.53 0.67 -- -- 0.67 Results Pending
------------------------------------------------------------------------
Au equivalent has been calculated as Au + (Ag/60) + (Cu X 2.3).
Metallurgical recoveries and smelter returns have been assumed at 100%.


Drilling was supervised by Graeme Rabone, a consultant to Kings Minerals, who is a Qualified Person under National Instrument 43-101 and has reviewed and approved the technical information in this release. HQ diamond core is assayed in 1.0 meter intervals while RC samples are assayed in 1.52 metre intervals, at SGS Mineral Services in Toronto, Canada. Gold is routinely assayed using a 30 gram sample, fire assay fusion and AAS finish with all gold values greater than 1.0g/t routinely re-assayed by SGS using the gravimetric method prior to batch reporting. Silver and copper values are determined on a 2 gram sample, aqua regia-hydrofluoric acid digest and AAS finish with high values checked using a different method. Standard reference material is routinely inserted into the sample stream from diamond core and RC drilling at a rate of 1 in 40 samples and sample blanks every 1 in 100 samples. Field duplicates are inserted every 1 in 50 samples. Analytical QA/QC work is done at a later time at another external laboratory (previously ALS Chemex) on about 5% of selected samples containing above background metal values.

Andaurex is acquiring Kings Minerals 51% interest in the San Anton property, which hosts the Cerro del Gallo gold/silver deposit, pursuant to a reverse take-over transaction with Kings Minerals which will result in the formation of a new company, San Anton Resource Corporation which will hold the interest. Goldcorp Inc. owns the remaining 49% interest in the San Anton property. Shareholders of Andaurex approved the transaction at a special meeting held on November 9, 2006. Closing of the transaction is subject to regulatory approval and the satisfaction of a number of other conditions including the completion of a financing of at least C$10 million. A syndicate of agents lead by Haywood Securities Inc. has been engaged to complete a private placement financing of up to 18,750,000 units at a price of C$0.80 per unit for gross proceeds of up to C$15 million. Each unit will consist of one common share and one-half of one common share purchase warrant with each whole warrant exercisable to acquire one common share of San Anton at an exercise price of C$1.20 for a period of twenty-four (24) months.

WARNING: The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This press release includes certain "forward-looking statements". All statements other than statements of historical fact included in this release, including, without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of Andaurex, Kings Minerals and San Anton, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the expectations of Andaurex are exploration risks detailed herein and from time to time in the filings made by Andaurex and San Anton with securities regulators.

Contact Information

  • Andaurex Industries Inc.
    Gregory B. Bowes
    President
    613-729-9006