Andean Resources Ltd.
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Andean Resources Ltd.

June 09, 2009 09:01 ET

Andean Resources Reports an Updated Resource at the Eureka Veins

PERTH, AUSTRALIA--(Marketwire - June 9, 2009) - Andean Resources Ltd. (TSX:AND)(ASX:AND) -



Highlights

- Updated independent Resource Estimate for Eureka Veins delivers:

-- a 38% increase in the Indicated gold Resource to 1.4M oz Au; and

-- a 20% increase in the global gold Resource at Eureka

- The increase in gold and silver resource will significantly improve the
already robust project economics at Cerro Negro, which are currently the
subject of a Bankable Feasibility Study ("BFS").

- Eureka West indicated resource zone diluted grade of 12.5 g/t Au and 184
g/t Ag gives a combined grade of 15.6 g/t AuEq (gold equivalent), making
Eureka one of the highest-grade undeveloped gold projects in the world.

- A very high-grade core to the mineralization exists with approximately 2.5
million tonnes at 17.2 g/t Au and 223 g/t Ag of indicated material
identified to date.

- The Eureka vein system remains open at depth and along strike, with only
25% of the known strike length of the outcropping Eureka vein system
included in this resource estimate.

- Further upside potential remains at Cerro Negro, following the recent
high-grade Bajo Negro vein discovery (not included in this estimate).


Andean Resources Ltd. (TSX:AND)(ASX:AND) is pleased to report an updated resource estimate for the Eureka veins at its 100% owned Cerro Negro project in Southern Argentina. Since the previous resource estimate in April 2008, drilling at Eureka has concentrated on infill and extension drilling designed to expand the resource base and increase the overall confidence levels as the Company progresses with its project development schedule. This latest resource estimate demonstrates continued expansion of the size and quality of the Eureka deposit.

The high-grade Eureka vein system is on the western end of the Company's Cerro Negro project (approximately 215 square kilometers in size) in the Santa Cruz province of Argentina.

The NI-43-101 and JORC-compliant resource estimate was completed by independent consultants Mine Development Associates ("MDA") of Reno, Nevada. This latest resource estimate includes the data released through the April 14, 2009 news release. The new estimate is summarized in the table below:



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Indicated Tonnes Grade (g/t) Contained Ounces
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(at a 3g/t AuEq cutoff) ('000) Gold Silver AuEq Gold Silver AuEq
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(K oz) (M oz) (K oz)
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Eureka West Veins 3,469 12.5 184 15.6 1,399 20.5 1,741
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721 Vein 99 4.7 50 5.5 15 0.2 18
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Eureka Main Vein 40 5.4 82 6.8 7 0.1 9
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Total/Average 3,608 12.3 179 15.2 1,421 20.8 1,768
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Inferred Tonnes Grade (g/t) Contained Ounces
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(at a 3g/t AuEq cutoff) ('000) Gold Silver AuEq Gold Silver AuEq
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(K oz) (M oz) (K oz)
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Eureka West Veins 229 13.9 104 15.6 102 0.8 115
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721 Vein 285 6.8 43 7.5 63 0.4 70
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Eureka Main Vein 448 4.9 89 6.4 70 1.3 91
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Total/Average 962 7.6 79 8.9 235 2.4 275
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Note: AuEq or gold equivalent was calculated considering long-term average
silver and gold metal price ratios to arrive at a ratio of 60 to 1,
respectively. Gold-equivalent calculations reflect gross metal content and
have not been adjusted for metallurgical recoveries or relative processing
and smelting costs.
(1) Gold equivalent grades estimated based on the following formula:
AuEq (g/t) equals Au(g/t) + (1/60 x Ag(g/t))
(2) Tonnage is metric tonnes, where one metric tonne is 1000 kilograms, or
2,205 pounds
(3) Ounces are troy ounces, where one troy ounce equals 31.103 grams


Wayne Hubert, Andean's CEO, commented, "I am extremely pleased with the progress we have made over the last year, primarily attributable to the excellent team of geologists we have at Cerro Negro. Eureka now represents the largest high-grade undeveloped gold and silver project owned by an exploration company in the world. The significant increase in the indicated mineral resource at Eureka will also significantly improve the project economics of the upcoming Bankable Feasibility Study, when compared to the Prefeasibility Study that was completed in the fourth quarter of 2008. We look forward to further high-grade drill results to follow, from not only the Eureka veins, but also the new high-grade discovery at the Bajo Negro vein and other targets the team has identified at site."

Eureka Indicated Resource

The updated Resource estimate has seen indicated gold resources increase by 38% versus the previously reported resource at Eureka, based on infill and expansion drilling completed over the last 12 months and the inclusion of minor amounts of Indicated resources from additional veins. The work resulted in a new indicated resource of 1.4 million ounces of gold and 20.8 million ounces of silver at a AuEq grade of 15.2 g/t, which will provide the basis for the mine planning in the Bankable Feasibility Study to be completed in the fourth quarter of this year.

Eureka Inferred Resource

Of the 4 kilometers of outcropping veins that comprise the Eureka system, only 1 kilometer has been systematically drilled and included in this resource, which further adds to the upside potential at the Eureka vein system, as the drill program continues in this area. In addition to converting the majority of last year's inferred resource to indicated through extensive infill drilling, an additional 235,000 ounces of gold and 2.4 million ounces of silver have been added to the inferred resource category through the delineation of the 721 Vein, the Eureka Main Vein, and the extensions of the Eureka West veins to the west. All these zones remain open, and drilling is currently focusing on extending these zones.

High-grade core to the Eureka Resource

The mineral resource incorporates dilution into the calculations, which is defined as lower grade rock that is, by necessity, removed along with the ore in the mining blocks, subsequently lowering the grade of the ore. If dilution was not included in the calculation, the vein resource for the entire Eureka vein at a cutoff of 3 g/t AuEq is:

- 2,478,000 indicated tonnes grading 17.20 g/t Au and 223 g/t Ag (equating to 20.9 g/t AuEq) for 1,370,000 ounces of gold and 17,743,000 ounces of silver.

- 546,000 inferred tonnes grading 12.8 g/t Au and 99 g/t Ag (equating to 14.5 g/t AuEq) for 225,000 ounces of gold and 1,739,000 ounces of silver.

Because of the chosen method of reporting, the resource is reported with the high-grade vein material diluted with 1.546 million tonnes of mineralized material grading 1.2 g/t Au and 76 g/t Ag, in order to develop the total resource at Eureka. On a tonnage basis, this represents dilution of about 34%.

To date, 270 holes have been drilled into the Eureka vein system, with about 65% of the holes in the principal Eureka vein being completed with diamond drilling. Based on an analysis of the reverse circulation (RC) holes representing about 35% of the drilling in the principle part of the Eureka vein, the Company has reasonable data to support that these RC holes have probably understated the overall grade of the deposit. In order to better understand these analyses, the resource model was rerun excluding the RC holes, which resulted in the overall gold grade of the deposit increasing by about 7%. This factor was not incorporated into the resource tables presented.

Bajo Negro

The recently reported discovery of the Bajo Negro vein, located 13 kilometers from the Eureka Veins, (see press release dated May 19, 2009) was not included in this resource estimate. To date, only 13 drill holes have been completed with assays at this new area. Currently, one drill rig is focused on extending the Bajo Negro vein to depth and along strike. A maiden resource estimate for Bajo Negro will be completed in the fourth quarter, once further drilling has been completed.

Resource Estimate Authorship and Methodology

Steven Ristorcelli, of MDA, completed this resource estimate. Steven 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 the reported Eureka 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.

Three separate gold domains and three separate and distinct silver domains were used in the construction of the resource model, in order to properly model the geology and mineral distribution in the Eureka vein system. In addition, the quartz vein was modelled. Capping of high grades varied by domain, based on a broad analysis of outlier samples identified by statistical breaks in the data. The capped grades for gold range from 200 g/t in the banded veins, to as low as 12 g/t Au in the stockwork domain. Block sizes were 4m (long) by 2m (wide) by 4m (high). Density applied to the model for the Eureka mineralization was 2.35 tonnes/m3. Further details will be included in a NI-43-101 report, prepared by MDA, which will be available on SEDAR within 45 days.

Next Steps

In addition to furthering the drill program at the Eureka veins to extend the resource along strike and at depth, the Company is also focusing attention on the new high-grade Bajo Negro Vein, with one diamond core rig being devoted to this new and exciting prospect, where quartz veining continues to be intersected. Assays are pending and will be provided in the Company's next drilling release. The work on the Bankable Feasibility Study (BFS) is ongoing and is expected to be completed during the fourth quarter. The BFS will only be based on the Eureka and Vein Zone deposits.

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.



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Total Eureka Resource
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Indicated
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Cutoff Tonnes Grade Grade Grade Ounces Ounces
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g/t AuEq g/t AuEq g/t Au g/t Ag Au Ag
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1.0 6,348,000 9.51 7.62 114 1,555,000 23,182,000
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1.5 5,777,000 10.33 8.28 123 1,537,000 22,906,000
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2.0 4,901,000 11.86 9.49 142 1,496,000 22,330,000
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3.0 3,608,000 15.24 12.25 179 1,421,000 20,804,000
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4.0 3,075,000 17.29 13.93 202 1,377,000 19,939,000
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5.0 2,694,000 19.09 15.39 222 1,333,000 19,234,000
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6.0 2,389,000 20.83 16.80 242 1,290,000 18,592,000
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7.0 2,143,000 22.48 18.13 261 1,249,000 17,976,000
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8.0 1,931,000 24.12 19.46 279 1,208,000 17,350,000
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Inferred
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Cutoff Tonnes Grade Grade Grade Ounces Ounces
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g/t AuEq g/t AuEq g/t Au g/t Ag Au Ag
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1.0 3,450,000 3.70 3.09 37 342,000 4,082,000
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1.5 2,374,000 4.80 4.02 47 306,000 3,608,000
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2.0 1,551,000 6.44 5.40 62 269,000 3,089,000
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3.0 962,000 8.91 7.59 79 235,000 2,444,000
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4.0 724,000 10.69 9.17 91 214,000 2,120,000
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5.0 566,000 12.42 10.74 101 195,000 1,842,000
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6.0 453,000 14.16 12.33 110 180,000 1,600,000
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7.0 361,000 16.12 14.13 120 164,000 1,387,000
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8.0 296,000 18.02 15.84 131 151,000 1,245,000
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A.C.N. 064 494 319

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