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

Andean American Gold Corp.

March 03, 2008 09:00 ET

Andean American Mining Reports Third Quarter Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 3, 2008) - Andean American Mining Corp. (TSX VENTURE:AAG)(FRANKFURT:AQN)(BVL:AAG) -

The Board of Directors of Andean American Mining Corp. announces that its Consolidated Interim Financial Statements and Management Discussion and Analysis for the quarter ended December 31, 2007 have been filed with SEDAR at www.sedar.com. Highlights of these statements are discussed below:

- The net loss for the period was $1,054,183 or $0.016 per share compared with a net loss of $2,998,136 or $0.049 per share in the comparable period last year.

- Cash flow used by operations in the quarter ended December 31, 2007 before changes to non-cash working capital items was $153,743 compared with $1,421,276 in the comparative quarter for 2006.

- Revenues for the three month period ending December 31, 2007 were $1,836,319 in 2007 compared with $1,523,064 in the comparative period in 2006. Sales of gold and gold equivalents in the quarter were 2,336 ounces compared to 2,219 ounces in the comparable period last year.

- As of February 25, 2008 the Company had independently acquired 37,300 hectares bringing the total to 41,500 hectares at the Invicta Proprety. The 13,000 metre drill program was completed and results warranted the initiation of an additional 10,000 metres in 2008. Wardrop Engineering Inc. has been engaged to prepare a NI 43-101 Technical Report, expected in March 2008, which will provide an updated resource estimate to include drill results from the current drill program.

- At Sinchao, a 5,000 metre drill program is continuing to test the limits and continuity of the Breccia Zone and will test the high grade zinc in the Skarn Zone. Additional targets defined by the geophysical surveys will be tested and an estimate of inferred resources will be compiled.

- At Santa Rosa, metal production during the quarter was 2,310 gold equivalent ounces compared to 2,221 gold equivalent ounces for the comparative period in fiscal 2007.

Outlook:

Gold and silver prices are showing continued strength and at the date of this report are forecast by the major institutions to continue strengthening of the Canadian dollar against the US dollars. The Company's revenues will be negatively affected by any further strengthening of the Canadian dollar against the US dollar. Metal prices and currencies are subject to fluctuation due to changes in global economic conditions. The Company is experiencing rising production costs due to increasing prices for fuel, chemicals and maintenance supplies. These rising prices, driven by the global economic boom, are expected to continue throughout calendar 2008.

For the complete Management's Discussion and Analysis and Financial Statements, please refer to the Company's filings at www.sedar.com.

Mr. Andrew Gourlay, P. Geol., President of Andean American Mining Corp. is a "Qualified Person" as defined in the Canadian Securities Administrators National Instrument 43-101 with the ability and authority to verify the authenticity and validity of the data herein.

On behalf of Andean American Mining Corp.,

John Huguet, Chairman & CEO

Andean American Mining Corp. (TSX VENTURE:AAG)(FRANKFURT:AQN) is an international mining and exploration company focused on growth both organically and through acquisitions. The Company is actively pursuing new targets of potential early stage gold and silver prospects in Peru and currently has three key assets: the 16,900 hectare Invicta gold-silver-copper advanced exploration stage project; 67% of Sinchao Metals Corp., owner of the Sinchao zinc-copper-silver-gold-lead mineralization project; and the 9,000 hectare Santa Rosa property, which is a small producing open-pit mine.

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.

This news release may use terms such as "inferred resources", "indicated resources", "measured resources", and "mineral resources". These terms are recognized and required by Canadian securities regulations (under National Instrument 43-101 "Standards of Disclosures for Mineral Projects"). Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In addition, "inferred resources" have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Estimates of Inferred Mineral Resources may not form the basis of feasibility of pre-feasibility studies, or economic studies except for a Preliminary Assessment as defined under National Instrument 43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.



ANDEAN AMERICAN MINING CORP.
INTERIM CONSOLIDATED BALANCE SHEETS
(Expressed in Canadian Dollars, except where noted)

December 31 March 31
2007 2007
----------- -----------
(unaudited) (audited)
$ $
ASSETS
Current
Cash and cash equivalents 10,182,396 174,484
Accounts receivable (Note 3) 733,756 714,350
Prepaid expenses 316,179 207,053
Mineral on pads and inventories (Note 4) 1,722,465 2,546,590
----------- -----------
12,954,796 3,642,477
Mineral on pads (Note 4) 3,609,726 3,454,861
Mineral properties and deferred costs (Note 5) 34,920,954 30,453,207
Property, plant and equipment (Note 6) 1,182,872 1,188,152
----------- -----------
52,668,348 38,738,697
----------- -----------
----------- -----------
LIABILITIES
Current
Bank indebtedness 88,484 218,715
Accounts payable and accrued liabilities 2,381,570 3,440,277
Deferred income 129,535 303,054
Loans payable (Note 7) 38,042 44,387
Current portion of long term debt (Note 8) 286,811 543,615
----------- -----------
2,924,442 4,550,048

Long term debt (Note 8) 101,217 101,217
Future income tax liabilities 5,057,959 5,723,679
Provision for reclamation and
closure costs (Note 9) 111,553 130,159
----------- -----------
8,195,171 10,505,103
Minority interest 7,829,234 2,642,331
----------- -----------
16,024,405 13,147,434
----------- -----------
SHAREHOLDERS' EQUITY
Share capital (Note 10) 69,067,549 59,127,821
Contributed surplus (Note 11) 6,479,037 2,367,949
Deficit (38,902,643) (35,904,507)
----------- -----------
36,643,944 25,591,263
----------- -----------
52,668,348 38,738,697
----------- -----------
----------- -----------

Going concern (Note 1)
Contingency (Note 15)
Subsequent Events (Note 16)


"JOHN HUGUET" "BRYAN MORRIS"
---------------------------------- ----------------------------------
DIRECTOR DIRECTOR

The accompanying notes are an integral part of these interim consolidated
financial statements.


ANDEAN AMERICAN MINING CORP.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS, COMPREHENSIVE INCOME (LOSS)
AND DEFICIT
(unaudited)
(Expressed in Canadian Dollars, except where noted)

Three Months Ended Nine Months Ended
--------------------------------------------------
December 31 December 31 December 31 December 31
2007 2006 2007 2006
$ $ $ $

REVENUE
Sales of metals 1,836,319 1,523,064 4,474,260 4,225,586
----------- ----------- ----------- -----------

OPERATING EXPENSES
Direct operating costs 1,442,659 1,956,884 4,265,432 4,669,559
Royalty expense 32,293 24,628 77,510 71,862
Amortization and
depletion 231,152 422,339 1,004,292 852,707
Selling expenses 46,849 43,254 130,572 115,111
Stock based
compensation 410,060 75,344 1,224,107 75,344
Provision for
reclamation (28) 3,645 3,412 10,777
----------- ----------- ----------- -----------
2,162,985 2,526,094 6,705,325 5,795,360
----------- ----------- ----------- -----------

GROSS PROFIT (LOSS) (326,666) (1,003,030) (2,231,065) (1,569,774)

OTHER (INCOME) EXPENSE
General and
administrative
expenses 525,607 248,110 1,536,229 955,488
Interest expense 10,948 29,315 33,593 77,828
Other (income) expense (47,115) 162,881 (184,444) 25,143
Foreign exchange
(gain) loss 68,046 (260,713) (736,173) (103,723)
Dilution (gain) loss
on sale of shares by
subsidiary 425,684 - 425,684 6,086,167
Minority interest (255,653) (35,094) (307,818) (83,239)
----------- ----------- ----------- -----------
727,517 144,499 767,071 6,957,664
----------- ----------- ----------- -----------
NET INCOME (LOSS) AND
COMPREHENSIVE
INCOME (LOSS) FOR
THE PERIOD (1,054,183) (1,147,529) (2,998,136) (8,527,438)
DEFICIT, BEGINNING
OF PERIOD (37,848,460) (23,737,134) (35,904,507) (16,357,225)
----------- ----------- ----------- -----------
DEFICIT, END OF PERIOD (38,902,643) (24,884,663) (38,902,643) (24,884,663)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING
BASIC 64,987,417 51,864,930 61,480,971 51,612,880
DILUTED 65,340,504 51,864,930 61,530,354 51,612,880

NET INCOME (LOSS) PER
COMMON SHARE
BASIC (0.016) (0.022) (0.049) (0.165)
DILUTED (0.016) (0.022) (0.049) (0.165)

The accompanying notes are an integral part of these interim consolidated
financial statements.


ANDEAN AMERICAN MINING CORP.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
(Expressed in Canadian Dollars, except where noted)

Three Months Ended Nine Months Ended
--------------------------------------------------
December 31 December 31 December 31 December 31
2007 2006 2007 2006
$ $ $ $

CASH PROVIDED FROM
(USED FOR):

OPERATING ACTIVITIES
Net income (loss) for
the period (1,054,183) (1,147,529) (2,998,136) (8,527,438)
Adjustments for items
not affecting cash:
Amortization and
depletion 231,152 443,452 1,004,292 863,318
Stock based
compensation 410,060 75,344 1,224,107 75,344
Minority interest (255,653) - (307,818) -
Provision for
reclamation (28) 3,645 3,412 10,777
Unrealized foreign
exchange gain
on long-term
monetary assets
and liabilities 89,225 21,982 (772,817) (25,688)

Dilution (gain) loss
on sale of shares by
subsidiary 425,684 - 425,684 6,086,167
----------- ----------- ----------- -----------
(153,743) (603,106) (1,421,276) (1,517,520)
Net changes in
non-cash working
capital items:
Accounts receivable 92,268 (21,136) (19,406) 229,083
Mineral on pads and
inventories 299,537 234,861 669,260 494,190
Prepaid expenses (19,337) (9,734) (109,126) (128,532)
Accounts payable and
accrued liabilities (663,969) (69,946) (1,058,707) (503,547)
Deferred income 40,895 (39,225) (173,519) 25,136
----------- ----------- ----------- -----------
(404,349) (508,286) (2,112,774) (1,401,190)
----------- ----------- ----------- -----------

INVESTING ACTIVITIES
Mineral properties
and deferred costs (2,311,098) (900,300) (4,895,966) (2,232,625)
Shares of subsidiary
acquired by private
placement (2,000,000) - (2,000,000) -
Property, plant and
equipment (172,641) (13,146) (318,947) (83,106)
----------- ----------- ----------- -----------
(4,483,739) (913,446) (7,214,913) (2,315,731)
----------- ----------- ----------- -----------

FINANCING ACTIVITIES
Sale of Sinchao (CMS) - 513,459 - 3,337,434
Change in restricted
cash - (205,634) - -
Private placement of
units, net of issue
costs 5,997,550 798,855 12,692,420 816,355
Shares issued by
subsidiary to
minority interest,
net of issue costs 6,234,436 - 6,946,936 -
Payment of long term
debt (85,399) (84,272) (173,526) (231,663)
Payment of loans
payable - - - (52,476)
----------- ----------- ----------- -----------
12,146,587 1,022,408 19,465,830 3,869,650
----------- ----------- ----------- -----------
INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS DURING
THE PERIOD 7,258,500 (399,324) 10,138,143 152,729
CASH AND CASH
EQUIVALENTS,
BEGINNING OF
PERIOD 2,835,412 1,362,553 (44,231) 810,500
----------- ----------- ----------- -----------
CASH AND CASH
EQUIVALENTS, END
OF PERIOD 10,093,912 963,229 10,093,912 963,229
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
CASH AND CASH
EQUIVALENTS IS
COMPRISED OF:
Cash 10,182,396 1,057,820 10,182,396 1,057,820
Bank indebtedness (88,484) (94,591) (88,484) (94,591)
----------- ----------- ----------- -----------
10,093,912 963,229 10,093,912 963,229
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

The accompanying notes are an integral part of these interim consolidated
financial statements.


SEDAR Profile # 00003879

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Andean American Mining Corp.
    John Huguet
    Chairman & CEO
    (604) 681-6186 or Toll Free: 1-888-356-4784
    Website: www.andeanamerican.com