AndeanGold Ltd.
TSX VENTURE : AAU

AndeanGold Ltd.

August 15, 2012 08:00 ET

AndeanGold Announces Positive Preliminary Metallurgical Test Results; Urumalqui Advanced-Stage Ag-AuProject, Peru; Up to 97% Silver Recovery and 96% Gold Recovery

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 15, 2012) - AndeanGold Ltd. ("the Company" or "AndeanGold") (TSX VENTURE:AAU) is pleased to announce very positive results from the preliminary metallurgical test program (the "Program") on the Company's Urumalqui advanced-stage Ag - Au Project ("Project") in Peru. The Program was conducted by G&T Metallurgical Services Ltd. ("G&T") of Kamloops B.C. Mine and Quarry Engineering Services Inc. ("MQes") of San Mateo, CA was engaged to oversee the Program and previously had prepared the initial NI 43-101 compliant inferred mineral resource estimate (the "Estimate") for the Project (See news release dated November 15, 2011).

PRELIMINARY METALLURGICAL TEST RESULTS
SILVER GOLD
HEAD TOTAL HEAD TOTAL LEACH
GRADE RECOVERY GRADE RECOVERY TIME NaCN
TEST g/t % g/t % hours ppm
GRAVITY + FLOTATION
Primary Composite 158 86 1.56 82
GRAVITY + CYANIDATION
Primary Composite 158 80 1.56 96 48 667
158 83 1.56 96 48 1000
158 97 1.56 96 96 2500
High Grade Composite 202 99 2.09 97 96 2500
Low Grade Composite 98 96 0.39 90 96 2500

Mr. Anthony F. Ciali, President & CEO of AndeanGold states, "We are extremely pleased with the Urumalqui Vein's recovery results from the preliminary metallurgical testing program. The results far exceeded our expectations, especially with respect to the silver recovery rates. The Urumalqui Project's NI 43-101 Mineral Resource Estimate was predicated, in part, on a silver recovery of 65% and a gold recovery of 85%, compared to the Program's recovery results of up to 97% silver and up to 96% gold on the primary composite material. These higher recovery rates, coupled with the very encouraging Urumalqui Vein surface channel sample assay results (see news release of May 29, 2012), should have a very favorable impact on the Company's planned update of the Project's mineral resource estimate."

Metallurgical Testing Notes:

  1. Gravity recovery results were: 11 - 21% for Ag and 15 - 35% for Au.
  2. The 96 hour cyanidation leach time tests included the addition of 250 g/t lead nitrate.
  3. Approximately 120 kilograms of samples from the Project were shipped to G&T in April 2012. The samples were independently selected by MQes from the Company's 2011 infill drilling program of the Urumalqui Vein. Two sets of samples were shipped. The first consisted of 52 individual bags of coarse crushed material and the second consisted of 28 individual bags of quartered core material. Three composites were generated from the first set of samples, consisting of a Primary, High and Low grade composite. These composites were utilized for the metallurgical test work, which included a comparison of grinding, gravity concentration and flotation and grinding, gravity concentration and cyanidation tests to investigate potential silver and gold recovery from the Project samples. Four composites were generated from the second set of samples, and these composites were utilized for Bond ball mill work index determination tests.
  4. Ore hardness was measured using a standard Bond Ball mill work index ("Index") test procedure. The Index for the four samples ranged from 12.0 to 18.2 kWh/tonne, with the average being approximately 15.1 kWh/tonne. Based on these preliminary tests, the ore hardness can be generally described as moderate to moderately hard.
  5. The gravity tailing cyanidation leach tests were conducted over leach times of 24, 48, 72 and 96 hours. While the bulk of the gold solubilized within 24 hours, the silver was relatively slow with leaching appearing to be continuing at 48 hours. Additional gravity tailings leach tests were conducted with the leach time ultimately increased to 96 hours, at which point the cyanide levels were increased to 2,500 ppm and 250 g/t of lead nitrate was added. This resulted in a silver recovery of 97% and a gold recovery of 96%, which for gold was the same recovery achieved at 48 hours but for silver, was a marked improvement from the silver recoveries of 80 - 83% at 48 hours.
  6. A sub-sample of the gravity concentrated tailings was submitted for Trace Mineral Search (TMS - via QEMSCAN) to determine silver mineral occurrences and associations. Of the observed silver bearing minerals in both the gravity concentrate and tailings, a significant proportion of the total silver was acanthite/argentite at approximately 96%. These minerals are amenable to both flotation and cyanidation processes.

G&T's recommendations for further test work to optimize the cyanidation process streams of the flowsheet. included, but were not limited to: a.) gravity recoverable gold / silver tests, b.) sodium cyanide sensitivity, c.) effect of lead nitrate addition rates, d.) effect of pH and e.) effect of dissolved oxygen.

Mineral Resource Estimate - Urumalqui Vein

Pursuant to the NI 43-101Mineral Resource Estimate, the Project, at a 90 g/t Ag cutoff grade, contains an inferred mineral resource of:

1,945,000 tonnes at 171.01 g/t Ag (10,692,000 ounces) and 1.378 g/t Au (86,200 ounces)

As stated in MQes' Estimate report, "The exploration potential of Urumalqui Vein is good. Exploration results show that the known Vein mineralization may continue along its trend in both strike directions and to depth along its entire known length." Six drill holes have intersected the structure 200 metres below surface, and all six were mineralized. In addition, there has been only limited exploration done on the Project's other mineralized vein structures identified to date, and the very favorable surface channel assay results for the 500m NW section of the Urumalqui Vein warrant the commissioning of an infill drill program. The Company's 2011 infill drill program was limited to the 1,000m Central and SE sections of the 1,500m Urumalqui Vein outcrop.

AndeanGold Ltd. has the right to earn a 100% interest in the Urumalqui Project from Gitennes Exploration Inc. ("Gitennes") pursuant to an existing Option Agreement (the "60% Option") between the parties dated April 21, 2010 (see news release dated April 22, 2010) and a definitive Share Sale and Mining Agreement between the parties dated May 17, 2012, giving AndeanGold the right to acquire Gitennes' remaining 40% interest in the Project (See news release dated May 23, 2012).

The Company is committed to advancing the Urumalqui Project to the development stage as soon as practicable, as well as actively working with the local communities related to the Project. AndeanGold has had excellent community relationships and is working on several agreed to social projects for the benefit of the communities.

Dr. William F. Lindqvist, a director of the Company, is a Qualified Person and has reviewed and approved the technical content of this news release.

About AndeanGold Ltd.:

AndeanGold Ltd. is engaged in the acquisition, exploration and potential development of primarily precious metals properties, principally in Peru and Ecuador. The focus of the Company's exploration activities is presently in advancing its Urumalqui Project, as well as pursuing mineral property acquisitions, in Peru. In Ecuador, the Company's activities have been limited to administrative and legal matters due to the Mining Mandate issued by the Ecuador Constituent Assembly on April 18, 2008. In November 2009, President Correa signed the Mining Regulations into law pursuant to the requirements of the new Mines Law, which was passed in January 2009. This was the final legal precursor to the re-initiation of exploration and mining development in Ecuador. The Company has been issued new mining titles under the new Mines law to its three key Ecuadorian projects and has filed the requisite documents with the Ministry of Non-Renewable Natural Resources and Ministry of Environment in support of the Company's request to renew exploration programs on its key projects in Ecuador. The Company is actively working with government officials to achieve this end.

Please refer to AndeanGold's website at www.andeangoldltd.com for further information on the Company's projects and activities.

On Behalf of the Board of Directors of ANDEANGOLD LTD.

Anthony F. Ciali, President, CEO and Director

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information