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

Andean American Gold Corp.

October 22, 2010 13:33 ET

Andean American Announces CDN$15 Million Bought Deal Financing

Funds to Be Used Primarily for Advancing Andean's Gold-Silver-Copper Project in Peru

TORONTO, ONTARIO--(Marketwire - Oct. 22, 2010) -

NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Andean American Gold Corp. ("Andean" or the "Company") (TSX VENTURE:AAG)(FRANKFURT:AQN) is pleased to announce that it has entered into an agreement with a syndicate of underwriters, led by Haywood Securities Inc. and including Octagon Capital Corp. (collectively the "Underwriters"), pursuant to which the Underwriters have agreed to purchase, on a bought deal basis, 16,700,000 common shares of the Company ("Common Shares") at a price of CDN$0.90 per Common Share, for aggregate gross proceeds of CDN$15,030,000 (the "Underwritten Offering"). In addition, the Company will grant the Underwriters an over-allotment option, exercisable up to 24 hours prior to the closing of the Underwritten Offering, to purchase up to an additional 5,500,000 Common Shares at CDN$0.90 to raise additional gross proceeds of up to CDN$4,950,000 (the "Over-Allotment Option", and together with the Underwritten Offering, the "Offering").

The Company intends to use the proceeds primarily for advancing its Invicta Gold Project in Peru, as well as for general corporate purposes.

The Offering is scheduled to close on or about November 12, 2010 (the "Closing Date"), and is subject to certain conditions, including but not limited to, receipt of all necessary approvals including the approval of the TSX Venture Exchange and the securities regulatory authorities.

"The majority of the funds raised through this bought deal will be used to advance our Invicta Project, a gold, silver and copper project. As mentioned in the press release of October 12, 2010, the Company has retained SRK to upgrade the Feasibility Study completed in July this year and anticipates completion in Q2 2011. Negotiations with the local communities are advancing and orders for long lead items have already been placed. We are focussed on bringing this project into production as soon as possible so that the Company and its shareholders can benefit from the strong demand for our commodities," said David Rae, President of Andean American Gold Corp.

The Common Shares issued in connection with this Offering will be subject to a four-month hold period from the Closing Date, as prescribed by the TSX Venture Exchange and applicable Canadian securities laws.

For further information, please visit the Company's website at www.AAGGOLD.com.

About Andean American

Andean is an international mining and Exploration Company focused on value growth through the development of gold and copper projects in Peru and currently has two key assets: the 28,200 hectare Invicta gold-silver-copper advanced exploration stage project and 60% of Sinchao Metals Corp., owner of the Sinchao gold-copper exploration project. In addition, the Company is actively targeting early stage gold and silver prospects in Peru. For further information call (604) 681-6186 or toll free: 1-888-356-4784.
On behalf of Andean American Gold Corp.,

"David Rae"

David Rae
President

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.

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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