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

Andean American Gold Corp.

November 15, 2005 17:59 ET

Andean American Reports Second Quarter Financial Results; Announces 10 Quarters of Year Over Year Improvement

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 15, 2005) - The Board of Directors of Andean American Mining Corp. (TSX VENTURE:AAG) is pleased to provide financial results for the Quarter ended September 30, 2005. The results are as expected and in line with the budget for each quarter growing positively throughout the fiscal year. The company has had an active quarter finalizing community agreements at Santa Rosa and Sinchao, acquiring a pre-feasibility project, Invicta, from Barrick, setting up a new division, Andean Explorations (ANDEX), and expanding the drill program at Sinchao.

Highlights:

Revenue and Operating Expenses: For the quarter were up 30% over a year earlier compared to the same period in 2004, while cost of sales was up only 67% over the previous year. Depletion and Depreciation were up 345%, reflecting the significant increase in the underlying asset base and the higher units of production.

Sales: Up 22% over the previous year. Gold recoveries continued to be hampered in the period due to difficulties with the silver precipitate circuit. The company is modifying the silver press bags and has brought in a new technician to address these issues.

Current Assets and Liabilities: Current assets were up 14% and exceeded total liabilities by $1.6 million or 29%. Liabilities decreased by $3.6 million primarily due to the retirement of the production debenture, payments of capital leases, repayments of long term debt and interest. Current assets surpassed all liabilities for the first time since 1998, an indication of the strength of the company's growth strategy and the commitment of its management.

Shareholders' Equity: Improved in the quarter by $5.8 million.



Balance Sheet:

As at
September 30, March 31,
2005 2005
$ $
Assets
Current 7,170.8 6,312.7
Non-current 40,895.6 40,505.2
------------ ------------
Total Assets 48,066.4 44,969
------------ ------------
------------ ------------

Liabilities
Current 5,349.5 7,921.5
Non-current 195.5 1,224.2
Shareholders' equity 42,521.4 35,824.0
------------ ------------
Total Liabilities & Shareholders' equity 48,066.4 44,969.7
------------ ------------
------------ ------------


Operations Results:

--------------------------------------------------------------------
TEN QUARTERS OF YEAR OVER YEAR IMPROVEMENT
--------------------------------------------------------------------
GOLD SALES EQ. OZS TOTAL OZS ANNUAL
QUARTER ENDING OUNCES SILVER GOLD IMPROVEMENT
--------------------------------------------------------------------
Sept.30, 2005 4,245 471 4,716 22%
--------------------------------------------------------------------
June 30, 2005 5,852 522 6,374 96%
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--------------------------------------------------------------------
FISCAL YEAR MAR
31/06
--------------------------------------------------------------------

--------------------------------------------------------------------
Mar 31, 2005 4,604 406 5,010 81%
--------------------------------------------------------------------
Dec 31, 2004 4,730 270 5,000 112%
--------------------------------------------------------------------
Sept 30, 2004 3,665 173 3,838 156%
--------------------------------------------------------------------
June 30, 2004 3,052 199 3,251 124%
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--------------------------------------------------------------------
FISCAL YEAR MAR 16,051 1,048 17,099 119%
31/05
--------------------------------------------------------------------

--------------------------------------------------------------------
Mar 31, 2004 2,627 136 2,763 Base
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Dec 31, 2003 2,275 83 2,358 Base
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Sept 30, 2003 1,440 58 1,497 Base
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June 30, 2003 1,385 65 1,450 Base
--------------------------------------------------------------------

--------------------------------------------------------------------
FISCAL YEAR MAR 7,727 341 8,068 Base
31/04
--------------------------------------------------------------------


Outlook:

Andean American is well positioned to continue increasing production at Santa Rosa. With exploration underway at the fully permitted sites of Rio and Mamara, part of Santa Rosa, the company expects to continue to grow the Santa Rosa mine. Production objectives for fiscal year end (March 31, 2006) are 28,000 ounces, increasing to 40,000 ounces at March 31, 2007.

Exploration and development continue at Sinchao, which has a true polymetallic nature, with copper, gold, silver, zinc and molybdenum in evidence. The company plans to have the Sinchao Project 'ready' by calendar year end 2005. The acquisition of a pre-feasibility stage gold project from Minera ABX Exploraciones SA, a subsidiary of Barrick, is considered a major step towards reaching the company's enhanced production objectives.

Interim Financial Statements for September 30, 2005 are attached to this release, which should be read in conjunction with Notes to the Financial Statements and Management's Discussion and Analysis for the second quarter which is filed by Andean American at www.sedar.com.

Andean American Mining Corp. (TSX VENTURE:AAG) is focused on gold mining, exploration and development with its head office in Vancouver and operations in Peru. The company is a low cost, profitable producer with sales up 111% in 2005. Andean is actively pursuing new opportunities and has recently acquired lands from Barrick. With its current and new properties, with its strong management team and with a commitment to steady growth and financial viability, Andean is well positioned to become a leading organization in the mining industry. For further information, please visit our website at www.andeanamerican.com.

On behalf of Andean American Mining Corp.,

John Huguet President & CEO



ANDEAN AMERICAN MINING CORP.
INTERIM CONSOLIDATED BALANCE SHEETS
(Unaudited - Prepared by Management)
September 30, March 31,
2005 2005
$ $
(audited)

ASSETS
CURRENT ASSETS
Cash 2,446,452 242,657
Restricted cash (Note 10) 513,440 565,285
Accounts receivable (Note 4) 795,583 782,445
Prepaid expenses 299,215 251,087
Minerals on pads & inventories (Note 5) 3,116,076 2,622,991
------------ ------------
7,170,766 4,464,465

RESTRICTED CASH (Note 10) - 265,521
MINERAL ON PADS (Note 5) 3,020,175 3,020,174
MINERAL PROPERTIES AND DEFERRED COSTS
(Note 6) 35,308,530 34,752,561
PROPERTY, PLANT AND EQUIPMENT (Note 7) 2,566,918 2,466,938
------------ ------------
40,895,622 40,505,194
------------ ------------
48,066,388 44,969,659
------------ ------------
------------ ------------
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities 3,308,193 3,112,303
Accrued interest payable - 321,465
Deferred income 328,467 137,605
Loans payable (Note 9) 92,532 312,999
Current portion of capital lease obligation
(Note 10) 614,465 640,132
Current portion of debentures (Note 8) - 2,643,401
Current portion of long term debt (Note 11) 1,005,866 753,610
------------ ------------
5,349,523 7,921,515

CAPITAL LEASE OBLIGATION (Note 10) 12,114 386,030
LONG TERM DEBT (Note 11) 78,374 725,760
PROVISION FOR RECLAMATION & CLOSURE COSTS
(Note 12) 105,020 112,360
------------ ------------
5,545,031 9,145,665
SHAREHOLDERS' EQUITY

SHARE CAPITAL (Note 13) 57,369,042 51,600,212
CONTRIBUTED SURPLUS 1,539,054 1,311,784
DEFICIT (16,386,739) (17,088,002)
------------ ------------
42,521,357 35,823,994
------------ ------------
48,066,388 44,969,659
------------ ------------
------------ ------------

APPROVED BY THE DIRECTORS

JOHN HUGUET, DIRECTOR BRYAN MORRIS, DIRECTOR


ANDEAN AMERICAN MINING CORP.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2005
(Unaudited - Prepared by Management)

Three Month Period Ended Six Month Period Ended
September 30 September 30
2005 2004 2005 2004
$ $ $ $

REVENUE
Sales of metals 2,540,153 1,952,648 5,570,672 3,566,686
---------- ---------- ---------- ----------

OPERATING EXPENSES

Direct operating
costs 1,693,043 1,085,370 2,892,147 1,803,247
Royalty expense 24,774 - 80,923 -
Amortization and
depletion 271,666 60,539 702,621 211,484
Selling expenses 59,177 46,628 122,659 105,305
Reclamation 3,973 2,786 11,274 8,073
---------- ---------- ---------- ----------
2,052,633 1,195,323 3,809,624 2,128,109
---------- ---------- ---------- ----------

GROSS PROFIT 487,520 757,325 1,761,048 1,438,577

OTHER EXPENSES

General and
administrative
expenses 377,452 324,645 687,390 752,226
Interest expense 87,375 123,807 207,353 210,850
Other expenses
(income) (5,360) 8,792 11,226 22,659
Foreign exchange
gain (339,457) (145,852) (258,148) (118,372)
Stock based
compensation 411,964 - 411,964 -
---------- ---------- ---------- ----------

NET INCOME (LOSS) (44,452) 445,933 701,263 571,214

DEFICIT - BEGINNING
OF PERIOD (16,342,287) 18,574,676 (17,088,002) (18,699,957)
---------- ---------- ---------- ----------
DEFICIT - END OF
PERIOD (16,386,739) (18,128,743) (16,386,739) (18,128,743)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING
BASIC 45,577,029 41,988,520 44,728,018 41,988,520
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
DILUTED 46,670,786 41,988,520 45,821,775 -
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

EARNINGS (LOSS)
PER COMMON
BASIC 0.02 0.01 0.02 0.01
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
DILUTED 0.02 - 0.02 -
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------


ANDEAN AMERICAN MINING CORP.
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN CASH FLOW
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2005
(Unaudited - Prepared by Management)

Three Month Period Ended Six Month Period Ended
September 30 September 30
2005 2004 2005 2004
$ $ $ $
CASH PROVIDED
FROM (USED FOR)
OPERATING
ACTIVITIES

Income (loss) for
the period (44,452) 445,933 701,263 571,214
Amortization and
depletion 271,666 60,539 747,007 211,484
Provision for
reclamation 3,973 2,786 11,274 8,073
Foreign exchange
(gain) loss (10,943) - (120,722) -
Stock based
compensation 411,964 - 411,964 -
Others 24,774 - 75,223 -
656,982 509,258 1,826,009 790,771

(Increase) in
accounts
receivable (217,803) (163,246) (13,138) 1,273,977
(Increase) in
inventories (301,878) (434,292) (493,085) (909,113)
(Increase) decrease
in prepaid expenses 217,082 - (48,128) -
Increase in accounts
payable and accrued
liabilities 260,563 985,058 114,969 640,360
Increase (decrease)
in deferred income 124,219 (23,874) 190,862 (89,046)
Increase (decrease)
in accrued interest
payable (336,358) - (321,465) -
402,807 872,904 1,256,024 1,706,949

INVESTING ACTIVITIES

Mineral properties
and deferred costs (670,040) (745,559) (1,040,353) (953,622)
Property, plant
and equipment (224,518) (185,455) (382,282) (305,476)
(894,558) (931,014) (1,422,635) (1,259,098)

FINANCING ACTIVITIES

Payment of
debentures (1,513,989) (246,987) (1,924,757) (614,658)
Common shares
issued for cash 4,734,449 336,988 4,870,491 468,397
Payment of long
term debt (225,527) - (277,742) -
Payment of loans
payable (150,730) (123,010) (297,586) (549,550)
2,844,203 (33,009) 2,370,406 (695,809)

INCREASE (DECREASE)
IN CASH DURING
PERIOD 2,352,452 (91,119) 2,203,795 (247,958)
CASH - BEGINNING
OF PERIOD 94,000 96,950 242,657 253,789
CASH - END OF
PERIOD 2,446,452 5,831 2,446,452 5,831


This news release may contain forward-looking statements regarding upcoming work programs and events. Actual results may differ materially from those anticipated in such 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 Huget
    President & CEO
    (604) 681-6186 or Toll Free: 1-888-356-4784
    (604) 681-3652 (FAX)
    www.andeanamerican.com