Andean Resources Ltd.
TSX : AND
ASX : AND

Andean Resources Ltd.

October 07, 2010 17:00 ET

Andean Provides Corporate Update

SALT LAKE CITY, UTAH--(Marketwire - Oct. 7, 2010) - Andean Resources (TSX:AND)(ASX:AND) is pleased to provide the following corporate update.

Friendly Transaction with Goldcorp

On September 3, 2010, Andean and Goldcorp (TSX:G)(NYSE:GG) announced an agreement whereby Goldcorp will acquire, through a scheme of arrangement under Australian law (the "Arrangement"), all of the outstanding shares of Andean. Under the Arrangement, each Andean share will be exchanged, at the option of the holder, for (i) 0.14 Goldcorp share (the "Share Consideration") or (ii) C$6.50 in cash, subject to a maximum cash consideration of C$1 billion. If the Andean shareholders elect, in aggregate, to receive more than C$1 billion in cash consideration, the maximum cash consideration will be pro-rated among the Andean shareholders who elected to receive cash and the balance of their Andean shares will be exchanged for Goldcorp shares. 

Based on the September 2, 2010 closing price of Goldcorp shares on the TSX (the last trading day prior to the announcement of the Arrangement), the consideration offered pursuant to the Arrangement represents a 35% premium to Andean's closing price on the TSX on the same date and a 56% premium to Andean's 20-day volume weighted average trading price on the TSX as at the same date.

The scheme booklet in connection with the scheme meeting of Andean shareholders to be called to consider and approve the Arrangement is currently expected to be mailed to Andean shareholders before the end of October, with the scheme meeting expected to be held in early December. Additional details regarding the Arrangement can be found on Andean's website and by referencing Andean and Goldcorp's joint press release announcing the Arrangement dated September 3, 2010.

Drill Results Update

Andean has received drill results from 72 holes since the July 19, 2010 press release. The results listed in Tables 1 through 3 are from exploration holes drilled at the Mariana Central, San Marcos and Mariana Norte deposits. These new drill results will be incorporated into resource estimates for the deposits.

Mariana Central

The drill results largely confirms Andean's previous expectations of Mariana Central as one continuous high-grade ore shoot of about 620m that is open to depth. Exploration for new ore-shoots along strike will commence following the exploration of this current ore shoot to depth.

The core mineralization is confirmed for over 770 meters along strike, 170 meters down dip and appears to plunge 5 to 8° to the west. On both the western and eastern extents, the dip of the vein flattens to approximately 45°N and narrows (west) or forms multiple splays (east). New drill hole results are shown in Table 1 and depicted on a longitudinal section map (Figure 1) and on a plan view map (Figure 3).

Table 1. Recent Mariana Central drill results.
 
MARIANA CENTRAL
Hole ID East   North   From   To   Intercept m   Au g/t   Ag g/t
MDD-1036 2398855   4809314   150.2   154.5   4.30   4.77   95.0
  168   170   2.00   8.08   36.0
MDD-1046 2398570   4809601   231.85   238.3   6.45   20.86   41.1
MDD-1059 2398666   4809418   127.1   129.0   1.90   4.43   78.7
MDD-1060 2398526   4809639   151.00   152.00   1.00   167.20   344.0
  227.00   228.00   1.00   7.31   6.0
  232.50   239.00   6.50   100.81   197.0
  Including
  235.50   236.00   0.50   445.20   507.00
MDD-1064 2398710   4809525   105   109   4   10.86   116.8
  245.7   247.55   1.85   40.35   40.2
  251.5   253   1.5   3.66   3.5
  256.6   257.6   1   7.12   14.0
MDD-1065 2398412   4809611   140.8   146.75   5.95   15.32   35.5
MDD-1069 2398420   4809682   210   224   14   18.99   124.3
MDD-1071 2398689   4809570   287.2   296.2   9   9.40   22.1
  315.00   315.80   0.8   10.80   62.0
MDD-1076 2398382   4809712   223.8   231.3   7.45   59.99   165.1
MDD-1079 2398351   4809752   240.0   242.5   2.5   3.37   17.2
MDD-1080 2398773   4809447   231.00   239.00   8.00   68.12   1101.7
MDD-1086 2398774   4809418   201.9   206.2   4.3   8.49   20.4
  211.1   217.8   6.7   29.10   183.4
MDD-1088 2398735   4809449   209.00   225.30   16.30   34.28   283.8
MDD-1090 2398734   4809380   135   139.2   4.2   73.19   113.2
  144   145   1   52.10   76.0
  155   163.6   8.6   28.58   256.8
MDD-1091 2398557   4809531   130   135   5   12.20   17.8
  139.8   142   2.2   18.23   32.0
  143.5   145.8   2.3   24.90   24.3
  148.65   158.45   9.8   22.05   252.8
MDD-1092 2398695   4809412   157.8   170   12.2   62.1   481.2
MDD-1093 2398593   4809492   144   146.55   2.55   103.20   392.0
MDD-1094 2398784   4809520   309   313   4   4.76   18.2
MDD-1095 2398566   4809673   291   293.1   2.1   3.12   22.6
MDD-1096 2398607   4809565   236.2   238.2   2   39.10   331.5
  240.8   249.15   8.35   30.14   332.5
MDD-1097 2398419   4809750   293   294.7   1.7   5.74   22.5
MDD-1099 2398652   4809604   309.8   314.5   4.7   28.43   74.6
MDD-1100 2398804   4809474   284.35   296.4   12.05   22.39   124.1
MDD-1101 2398459   4809712   253.6   254.6   1   3.8   16
  275.5   278.9   3.4   12.5   116.6
MDD-1102 2398756   4809301   84   85   1   18.7   12
  95   96   1   5.35   103
  100.35   106.2   5.85   7.92   26.8
  116   117   1   10.5   25
MDD-1103 2398378   4809586   98   99.1   1.1   22.2   33
  101   106.5   5.5   6.65   56.5

San Marcos

The new drilling at San Marcos largely confirms the existing mineralization, but also extends the mineralization down-plunge to the east by approximately 100 meters. 

The San Marcos vein system is interpreted as two to up to five sinuous and intertwined veins that strike east-west and dip steeply to the north on the western extents and steeply to the south on the eastern extents. The San Marcos vein is drill defined over a strike length of about 700 meters, has a true width of at least 4 to 5 meters and a known vertical extent of over 300 meters. Drilling has identified mineralization for over 600 meters along strike, 250 meters down dip, and grade x thickness contours indicates the core mineralization plunges 25°E. The veins remain open at depth to the east. New drill hole results are shown in Table 2 and depicted on a long section map (Figure 2) and plan view map (Figure 4).

Table 2. Recent San Marcos drill results.
 
SAN MARCOS
Hole ID East North From To Intercept m Au ppm Ag ppm
SDD-1017 2399497 4810830 94.55 101.55 7 12.09 186.2
SDD-1018 2399300 4810917 236.6 240 3.4 4.23 46.3
SDD-1019 2399398 4810827 67.6 70.8 3.2 13.25 93.8
91.6 95 3.4 10.53 204.5
SDD-1020 2399698 4810827 43.2 44.4 1.2 20.40 263.0
SDD-1021 2399854 4810859 82.4 86.3 3.9 2.68 226.3
SDD-1022 2399748 4810879 123 132 9 9.52 117.2
133.5 142 8.5 12.09 104.6
SDD-1024 2399798 4810889 113.00 114.00 1.00 6.16 6.0
122.60 123.80 1.20 9.31 16.1
132.00 133.00 1.00 4.51 7.0
SDD-1027 2399600 4810980 277 281 4 7.66 28.2
SDD-1028 2399900 4810693 263.2 266.0 2.8 4.60 55.3
SDD-1029 2399850 4810713 200.5 206.36 5.86 13.36 128.8
250.8 253 2.2 21.13 181.3
264.9 266 1.1 15.40 4.0
273.2 279.4 6.2 12.47 171.2
293.9 295 1.1 33.30 4.0
SDD-1030 2399502 4810696 113 114 1 16.90 26.0
SDD-1031 2399298 4810832 102.40 105.25 2.85 4.67 32.5
108.00 109.00 1.00 28.00 55.0
SDD-1032 2399550 4810864 129.10 132.80 3.70 20.42 125.1
Including
132.00 132.80 0.80 71.50 214.0
134.15 136.00 1.85 3.09 37.3
SDD-1033 2399548 4810906 177.25 189.3 12.05 17.13 177.3
207.5 208.3 0.8 5.01 41.0
210.3 214.6 4.3 9.12 27.3
SDD-1034 2399649 4810903 178.4 181.6 3.2 5.26 29.0
190.3 200.9 10.6 6.32 68.1
SDD-1035 2399549 4810944 254.00 258.85 4.85 5.08 25.6
266.00 271.20 5.20 5.75 57.6
274.35 284.00 9.65 4.87 25.6
300.50 301.55 1.05 46.30 157.0
SDD-1038 2399599 4810815 49 54 5 8.21 12.2
SDD-1039 2399549 4810817 NSV
SDD-1040 2399448 4810815 44 50 6 5.33 82.2
SDD-1041 2399499 4810810 45.20 48.30 3.1 3.29 8.0
71.00 72.00 1.00 12.00 17.0
SDD-1042 2399399 4810799 26.0 32.5 6.50 7.95 40.8
SDD-1043 2399448 4810863 148.0 159.9 11.90 10.75 103.2
SDD-1044 2399649 4810859 108.00 114.25 6.25 9.80 69.0
SDD-1045 2399348 4810944 279.2 283.5 4.30 3.71 16.1
SDD-1046 2399349 4810804 49.45 53.10 3.65 9.73 16.1
63.00 64.00 1.00 3.97 4.0
SDD-1047 2399298 4810801 56.85 57.70 0.85 12.40 45.0
59.4 60.8 1.40 21.82 64.0
SDD-1048 2399746 4810979 287 293.5 6.50 13.53 184.9
307.4 314.05 6.65 36.77 342.6
SDD-1049 2399448 4810896 141.8 152.2 10.40 6.06 61.1
199.7 208 8.30 6.36 58.7
211 218.35 7.35 12.20 79.8
               

Mariana Norte

Exploration drill testing of the Mariana Norte vein has identified mineralization over 750 meters along strike, up to 150 meters down dip and is found in 2 to 3 parallel to intertwined quartz vein and breccia zones. The Mariana Norte structure forms a lazy "s" shape that strikes N70°W and dips 45 to 60°N at the eastern and western extents. The central segment strikes N80°E and dips 60°N and may represent a link or structural offset of the east and west segments. Holes with important intercepts are commonly 4 to 8 meters in true width as currently understood but probably average 3 to 4 meters overall. Vein widths of up to 8 meters persist to the west but not all of the quartz and/or carbonate vein material carries precious metal values. Exploration of this system will resume late in Q4 of 2010 or early in Q1 of 2011. New drill hole results are shown in Table 3.

Table 3. Recent Mariana Norte drill results.
 
MARIANA NORTE
Hole ID East   North   From   To   Intercept m   Au g/t   Ag g/t
MDD-1020 2398768   4809955   123.20   127.35   4.15   3.65   8.9
  131.90   136.00   4.10   3.79   6.6
  219.25   220.10   0.85   5.76   24.0
  244.90   246.00   1.10   3.56   8.0
MDD-1021 2398836   4809832   96.00   98.00   2.00   4.32   67.0
  110.60   113.00   2.40   5.08   68.2
  115.00   116.00   1.00   2.87   74.0
  117.00   118.50   1.50   3.14   48.0
MDD-1026 2398631       135.3   138.3   3   4.37   63.3
MDD-1029 2398644   4809886   175.00   176.00   1.00   4.65   69.0
MDD-1031 2398533       125   127   2   5.20   51.5
MDD-1032 2398546   4809914   163.2   168.75   5.55   7.70   84.8
  171.2   173.8   2.6   4.82   58.5
  181   182   1   5.08   2.0
MDD-1034 2398487   4809874   113.3   119.9   6.6   8.60   162.4
MDD-1037 2398500   4809928   168.1   171.6   3.5   3.53   21.0
MDD-1040 2398438   4809890   131   132.5   1.50   10.14   437.1
  Including
  132.00   132.50   0.50   16.40   1262.0
MDD1042 2398449   4809940   158.20   158.85   0.65   4.57   15.0
  177.55   178.65   1.10   4.86   48.0
MDD-1045 2398390   4809902   NSV
MDD-1048 2398402   4809942   155.50   156.20   0.70   2.71   19.0
MDD-1055 2398461   4809986   208.40   210.55   2.15   7.31   7.2
  212.00   213.70   1.70   112.14   141.1
  Including
  212.00   212.50   0.50   268.30   261.00
MDD-1061 2398509   4809973   212.10   215.00   2.90   92.79   162.2
MDD-1066 2398582   4809850   120.40   122.35   1.95   7.74   17.8
  127.70   132.80   5.10   7.38   111.0
MDD-1074 2398607   4809949   213.00   214.05   1.05   2.55   27.3
  219.05   220.00   0.95   5.45   91.2
MDD-1070 2398593   4809900   167.95   175.4   7.45   10.87   77.8
  178.15   180   1.85   7.18   19.8
MDD-1077 2398635   4809733   206.35   210   3.65   4.46   51.2
  215.50   216.50   1.00   6.02   20.0
  218.00   219.00   1.00   12.90   44.0

Correction to September 3, 2010 Goldcorp Press Release

An error in reporting the resources of the Vein Zone deposit was made in the September 3, 2010, Press Release announcing the acquisition of Andean by Goldcorp. The tonnes and grade of the indicated and inferred resources of Vein Zone were incorrectly taken from an earlier resource statement, and their inclusion in the Press Release had not been reviewed or approved by Steve Ristorcelli, the Qualified Person responsible for the estimation of the resource numbers. The correct resource numbers are stated below, which are consistent with the resources reported in the Andean press release dated July 6, 2010.

VEIN ZONE Cutoff   Tonnes   AuEq   Au   Ag   Au   Ag
INDICATED 0.5   8,361,000   2.29   2.21   4.9   593,300   1,315,400
INFERRED 0.5   3,124,000   1.08   1.05   2.0   105,200   200,700

Andean Trading and Insider Reporting

On September 30, 2010, Wayne Hubert, Chief Executive Officer of Andean, exercised 5.0 million Andean options at a strike price of $0.30 which were set to expire as of that same date. These options were granted to Mr. Hubert under his original employment contract with Andean four years ago and would have expired worthless unless exercised on September 30, 2010. The exercise of these options triggers an immediate cash withholding tax liability for Mr. Hubert in the United States. In order to pay that withholding tax liability, Mr. Hubert intends to sell approximately 2 million Andean shares in the open market. Following the disposal of these shares, Mr. Hubert will continue to hold 3.8 million Andean shares. Mr. Hubert intends to vote these 3.8 million shares in favour of the Arrangement.

Qualified Persons Statement

The information in this press release that relates to exploration results is based on information provided by William H. Wulftange, Vice President of Exploration for Andean Resources, who is a Licensed Professional Geologist (#5219574-2250) by the State of Utah and a is member (#4037018) of a Recognised Overseas Professional Organization (ROPO), the Society of Mining, Metallurgy and Exploration America. Mr. Wulftange has extensive experience relevant to the style and type of mineralization and deposits under consideration, and to the activity undertaken, to qualify as a "Qualified Person" as defined in Canadian National Instrument 43-101, as well as a "Competent Person" as defined in the JORC Code. Mr. Wulftange has reviewed and verified that the information presented in this press release conforms to NI 43-101 standards and industry Best Practices and consents to the inclusion in the report of the matters based on his information in the form and the context in which it appears.

The Vein Zone Mineral Resource Estimates were carried out by Steven Ristorcelli, who has sufficient experience (more than 5 years) which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Steven Ristorcelli consents to the inclusion in this press release the matters related specifically to reported Vein Zone resources. The information in this report that relates to Mineral Resources is based on information compiled by Steven Ristorcelli, who is a Member of the AIPG, which is a 'Recognised Overseas Professional Organisation' ('ROPO') included in a list promulgated by the ASX from time to time.

A.B.N. 66 064 494 319

To view Figure 1, please visit the following link:

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To view Figure 2, please visit the following link:

http://media3.marketwire.com/docs/andfig2-1007.pdf

To view Figure 3, please visit the following link:

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To view Figure 4, please visit the following link:

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