Andean Resources Ltd.

Andean Resources Ltd.

September 16, 2008 17:00 ET

Andean Resources Starts 2009 Field Season Activities at Cerro Negro

FREMANTLE, AUSTRALIA--(Marketwire - Sept. 16, 2008) - Andean Resources Limited (TSX:AND)(ASX:AND) has commenced its largest planned drill program at its 100% owned Cerro Negro gold project in Southern Argentina. The $12.5 million drill program is designed to:

- Extend the recently discovered Evita Vein along strike; at the end of the last drill campaign, Andean intersected a new vein (the "Evita" Vein) 100m to the south of the Eureka West veins with EDD-868 returning 9m of 13.9 g/t gold and 61 g/t silver;

- Expand the indicated resources at the Eureka West veins for inclusion in the Bankable Feasibility Study (BFS) that will follow the release of the Pre-Feasibility Study (PFS) in October;

- Drill test a new geologic interpretation at Vein Zone to follow what has been interpreted as a possible NW-SE trending inflection in the eastern part of the current resource and test the possibility of a higher-grade underground resource with the veins open to depth;

- Investigate the possibility of new ore shoots in the Eureka corridor, with less than 1km of the 4km Eureka structure drill tested;

- Perform geotechnical, metallurgical, hydrological, and condemnation drilling for commencement of the BFS;

- Drill test four targets near Vein Zone; Silica Cap, Bajo Negro, Don Adolfo, and Pescado Rabioso.

One drill-rig is currently onsite with an additional rig arriving in the second half of September. The current drill program is planned to operate continuously through the end of June 2009.

Andean initiates a regional exploration program into Santa Cruz Argentina

Andean is planning on expanding its footprint in the province of Santa Cruz with a regional exploration program of about $2 million which will focus first on its four additional properties of Las Mellizas, La Esperanza, San Augustin and Mancha Blanca. The same team that initially made the discoveries at Cerro Negro has already initiated its search for its next discovery in the province.

Andean remains well funded with a cash balance of over $30 million and no debt.

Pre-Feasibility Study (PFS) on schedule for release in October

Andean is currently assembling the components of its pre-feasibility study ("PFS") which remains on track for completion towards the end of this month.

Over the first half of this year, in addition to its highly successful drilling programs at Eureka West, Andean has undertaken substantial work on mine planning, metallurgy, engineering design and environmental studies in support of its PFS. The study, which will be compliant with Canadian National Instrument 43-101, focuses on the future development of both an open-pit, with moderate-grade resources (approximately 3g/t Au) from the Vein Zone deposit, together with an underground development based on the high-grade resources (approximately 12g/t Au) sourced from Eureka West.

Currently the PFS is highlighting a very robust project, based on current estimates of Measured and Indicated Resources at Cerro Negro, capable of delivering superior operating margins, bottom quartile cash costs (measured globally across the industry), standard processing options and a rapid payback period.

The current status of these key areas of the PFS is summarised below:-

Component Consultant Group Status / % completed
Mine Planning MDA 75%
Metallurgy Ausenco 100%
Engineering Design Ausenco 90%
Resources Micon 100%
Environmental Baseline Study Vector International 100%
Infrastructure Requirements Ausenco/Andean 90%
Financial Modelling Andean 75%
Geotechnical Golder & Associates 100%


In summary, Mr Wayne Hubert, CEO of Andean stated "We are excited about once again starting a new field season at Cerro Negro and we have every confidence that this season's programs will continue to expand the resource base with exciting targets at both Eureka and Vein Zone. I am also looking forward to delivery of the PFS which will set out the proposed development economics at Cerro Negro, and highlight our world class project. We remain in a strong position of being able to rapidly pursue our exploration and pre-development plans at Cerro Negro over the coming season."

To view a map of the 2008/09 Eureka Targets and 2008/09 Vein Zone Prospect, please click on the following link:

A.C.N. 064 494 319

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