Andean Resources Ltd.
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Andean Resources Ltd.

July 07, 2009 19:52 ET

Andean Resources Expands Bajo Negro Discovery and Provides Additional Disclosure

FREMANTLE, WESTERN AUSTRALIA--(Marketwire - July 7, 2009) - Andean Resources Ltd. (TSX:AND)(ASX:AND) is pleased to report six additional diamond drill results from the recent Bajo Negro discovery at its 100% owned Cerro Negro gold and silver project in Southern Argentina. These latest results continue to provide new resource potential at the project and highlights include:

- BDD-914 intersected 3.5m of 26.7 g/t Au and 58 g/t Ag from 242m

- BDD-915 intersected 5.25m of 18.7 g/t Au and 27 g/t Ag from 202m

- BDD-918 intersected 7m of 10.3 g/t Au and 20 g/t Ag from 121m

- Strike length of the vein has now been tested along approximately 550 meters

- Mineralization remains open at depth

- To date, all 19 drill holes in Bajo Negro have intersected mineralization with grades exceeding 2.5 g/t Au over mineable widths

Reported widths are intersected widths, and true widths are less in every case (see Table 1 for detailed drill data). Andean has assumed an underground cut-off grade of 2.5 g/t gold at Bajo Negro for all the interval summaries reported in this release.

Bajo Negro Vein

The confirmation of the Bajo Negro vein discovery, located 13 kilometres east of the Eureka West veins and 2 kilometres southwest of the Vein Zone deposit, was announced on May 19, 2009. The nineteen holes for which results have been received all intersected the Bajo Negro vein with widths and grades which could permit underground mining. Potentially mineable widths and grades can now be inferred over a strike length of at least 550m and vertical extent of 150m.

The following new intersections, taken in conjunction with previously-announced results, define the upper part of an ore shoot which is open to depth and along strike:



BDD-914: 3.5m of 26.5 g/t Au and 58 g/t Ag from 242m

BDD-915: 3.35m of 6.9 g/t Au and 14 g/t Ag from 193m
And 5.25m of 18.7 g/t Au and 27 g/t Ag from 202m

BDD-916: 9.85m of 6.6 g/t Au and 11 g/t Ag from 136m
And 3.3m of 8.9 g/t Au and 30 g/t Ag from 152m

BDD-917: 2.8m of 10.7 g/t Au and 70 g/t Ag from 101m

BDD-918: 11.1m of 7.6 g/t Au and 14 g/t Ag from 119m
Including 7m of 10.3 g/t Au and 20 g/t Ag from 121m

BDD-919: 10.2m of 5.2 g/t Au and 7 g/t Ag from 231m


Each of these new drill holes, together with the previous drill holes, is shown on the longitudinal section, Figure 2. Hole BDD-914 is the deepest hole for which results have so far been received, with an intersection at about 660m elevation, or 240m below the surface. The hole intersected the vein approximately 50m below the intersection in BRC-913 (7.75m, 38.9 g/t Au, 45 g/t Ag). The intersection in BDD-914, although narrower than most, shows the persistence of high gold grades with depth.

BDD-915 was drilled 150m southeast of BDD-914 and cut the Bajo Negro vein about 40m below the high-grade intersection in BRC-911 (7m of 60.7 g/t Au, 90 g/t Ag). BDD-915 demonstrates that gold grades and widths above 50 gram-meters persist at depth.

BDD-916 and BDD-917 were drilled on the same section 100m southeast of BDD-915. The holes intersected the vein in the upper part of the shoot, and grade-thickness contours suggest that values will improve with depth.

BDD-918 and BDD-919, also drilled on the same section, are the most southeasterly holes drilled into the Bajo Negro vein to date. They show that the shoot is still open to the southeast, with values above 50 gram-meters. The holes show that the quartz vein, dipping 70 degrees NE, continues to be strongly developed towards the southeast, with a true width of 7-8m.

In summary, the latest holes have outlined the southeastern part of a high-grade (greater than 100 gram. meters gold) ore shoot surrounded by mineralization greater than 50 gram-meters, which remains open along strike and to depth. The top of the mineralization (as defined by the 5 gram meter contour) occurs at 50 to 100m depth, and is likely to have been influenced by the paleowater table.

Encouragingly, this would suggest that the hydrothermal system is intact and has undergone little or no erosion. Barren silicified outcrops, 150m northwest of current drilling (see Figure 1), are interpreted as remnants of a silica cap deposited above the paleowater table. Aeromagnetic lineaments (Figure 1) suggest that continuation of the vein below these outcrops is a strong possibility.



Bajo Negro Drill Results (at a 2.5 g/t Au cutoff)

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Hole Easting Northing Elev- Depth Azim. Dip From To Width Au Ag
(m) (m)ation (m)(True) (m) (m) (m) (g/(g/
(m) t) t)
----------------------------------------------------------------------------
BDD-914 2407542 4804870 888.7 272.4 245 -70 242.4 245.9 3.5 26.5 58
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BDD-915 2407590 4804737 888.0 231 245 -60 193.3 196.65 3.35 6.9 14
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201.75 207 5.25 18.7 27
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BDD-916 2407588 4804618 894.4 240 245 -60 135.65 145.5 9.85 6.6 11
----------------------------
151.7 155 3.3 8.9 30
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BDD-917 2407555 4804604 890.9 124.5 245 -58 101 103.8 2.8 10.7 70
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BDD-918 2407651 4804540 897.8 158 245 -60 119 130.1 11.1 7.6 14
----------------------------
(121 128 7 10.3 20)
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BDD-919 2407722 4804567 902 308.1 245 -65 230.8 241 10.2 5.2 7
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Currently, two core drill rigs are focused on extending Bajo Negro along strike and at depth, and updates will be provided on a regular basis.

Quality Control and Assurance

The analytical results quoted in this release are derived from half drill core in the case of diamond drill holes, or from cuttings in the case of reverse circulation holes. Samples are prepared by ACME Analytical Laboratories SA (Mendoza) in Mendoza, Argentina, and assayed by the same laboratory in Santiago, Chile. Gold is determined initially by fire assay with AA finish. Samples assaying more than 10 ppm gold are re-assayed using a gravimetric finish. Silver is determined initially by AAS, and samples assaying more than 100 ppm silver are re-assayed by fire assay with gravimetric finish. Quality control of the analytical results is maintained by inserting standards, blanks, and duplicates into the sample run, approximately every twenty samples. Additional quality control is maintained by sending assay sample splits to a second laboratory from time to time. These checks are evaluated statistically at regular intervals. All analytical data are entered into a Microsoft Access database, with limited access and numerous checks to ensure integrity of the data.

Note: The information in this Report that relates to exploration results is based on information provided by David Shatwell who is a Fellow of the Australian Institute of Geoscientists. Mr. Shatwell has extensive experience relevant to the style and type of mineralisation and deposits under consideration, and to the activity undertaken, to qualify as a Competent Person as defined in the 2004 Edition of the "Australian Code for Reporting of Mineral Resources and Ore Reserves" (the JORC Code). Mr. Shatwell consents to the inclusion in this Report on his work in the form and context in which it appears.

Additional Disclosure

In connection with the filing of the prospectus for Andean's recently announced $90 million bought-deal financing, the Company has been requested to clarify certain of its recently published disclosure on the Company's website at www.andean.com.au and in material distributed through press releases, relating to the Cerro Negro project, located in Southern Argentina.

Certain of the Company's previously filed continuous disclosure documents did not include the grade information for each category of mineral resource and reserves. In particular, the information contained in the press releases of the Company dated January 30, 2009 and April 30, 2009, which disclosed gold and silver resource and reserve estimates, should have disclosed the grade and quantity for each category. The following tables set out the revised information:



Estimated Mineral Resources for the Eureka West Deposit(1)

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Zone Category Tonnes Au Grade Au Product Ag Grade Ag Product
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M g/t ounces g/t M oz
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Eureka Indicated 2.49 12.9 1,030,200 235 18.8
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Eureka Inferred 0.97 10.7 335,700 157 4.9
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Cerro Negro Project, Probable Reserves and Production Schedule(2)

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Vein Zone Eureka Cerro Negro Total
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Probable Probable Probable
Ore 000's Ore 000's Ore 000's
Period Tonnes g/t Au Tonnes g/t Au g/t Ag Tonnes g/t Au g/t Ag
----------------------------------------------------------------------------
Year 1 672.3 3.09 677.7 11.54 242.81 1,350.0 7.33 121.89
----------------------------------------------------------------------------
Year 2 675.3 3.70 674.7 14.07 258.86 1,350.0 8.88 129.37
----------------------------------------------------------------------------
Year 3 674.9 4.58 675.1 12.97 203.05 1,350.0 8.77 101.55
----------------------------------------------------------------------------
Year 4 847.3 4.29 502.7 6.69 120.41 1,350.0 5.18 44.84
----------------------------------------------------------------------------
Year 5 1,350.00 2.58 1,350.0 2.58 0.00
----------------------------------------------------------------------------
Year 6 410 3.80 410.0 3.80 0.00
----------------------------------------------------------------------------
Totals 4,629.80 3.53 2,530.20 11.63 212.16 7,160.0 6.39 74.97
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In addition, the Company's press release dated December 18, 2008 included a statement on gross metal value with respect to one drill hole (EDD-887) which is hereby retracted.

Finally, all of the Company's investor presentations distributed since July 2008, available at www.andean.com.au, with the slide titled "Growing Resource Estimate" have been amended to include "Gold equivalent grades were calculated using 60:1 silver:gold ratio. Gold-equivalent calculations reflect gross metal content and have not been adjusted for metallurgical recoveries or relative processing and smelting costs."

Andean Resources Ltd (www.andean.com.au) is an Australian and Toronto listed gold explorer searching for precious metals in the Andes, with four large property positions in the Patagonia.

Note 1: Reno Pressacco 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". Reno Pressacco consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this Report that relates to Mineral Resources is based on information compiled by Reno Pressacco, who is a Member of APGO, which is a 'Recognised Overseas Professional Organisation' ('ROPO') included in a list promulgated by the ASX from time to time.

Note 2: Neil Prenn 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". Neil Prenn consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this Report that relates to Mineral Resources is based on information compiled by Neil Prenn, who is a Member of APGO, which is a 'Recognised Overseas Professional Organisation' ('ROPO') included in a list promulgated by the ASX from time to time.

A.C.N. 064 494 319

Please note: Figure 1 is available at the following link: http://media3.marketwire.com/docs/and707figure1.pdf.

Please note: Figure 2 is available at the following link: http://media3.marketwire.com/docs/and707figure2.pdf.

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