AndeanGold Ltd.
TSX VENTURE : AAU

AndeanGold Ltd.

May 07, 2009 09:00 ET

AndeanGold Corporate Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 7, 2009) - AndeanGold Ltd. ("the Company" or "AndeanGold") (TSX VENTURE:AAU) is pleased to provide an update on the Company's activities in Latin America. In early 2008, the Company announced that it had adopted a revised corporate strategy to expand its exploration activities outside Ecuador (see news release of April 24, 2008). This expansion plan focused on Peru and Colombia, both because these were mineral rich countries and because AndeanGold's experienced technical and administrative staff based in Quito could be cost effectively utilized to carry out the expansion work programs. The Company signed several exclusivity and confidentiality agreements with concessionaires in both Peru and Colombia and visited numerous potential mineral properties of interest.

PERU

Presently, AndeanGold's exploration activities are focused on the Rio Seco Project, a gold property with silver and copper credits, located in the Department of Libertad, Peru. To date, four mineralized zones and ten vein systems have been identified. The principal mineralized zone, the West Zone, lies within a shear zone created by two major N-S faults and exhibits both open pit (stockwork target) and underground mining (multiple vein target) potential. The Company has reported positive assay results from a recently completed detailed structural and geological mapping and trenching program (the "Program") on the project, including (see new release of April 20, 2009):

- Stockwork Target:

-- Comprises quartz vein stockworks, ladder vein networks and discrete veins, with an overall width of about 100m. The recent Program has extended the strike length from 300m to 600m.

-- The Program has outlined several sizeable mineralized lenses within the stockwork target containing higher concentrations of veining and better gold values. These lenses appear to be distributed en echelon style along the stockwork trend and were exposed in outcrops over a 25m width along the eastern side of the trend by the access road that runs through the Project. Based on the results of the current Program and the Company's present geological model, there are also indications of additional mineralized lenses within the remaining 75m width of the stockwork target to the west which is poorly exposed and deeply weathered and, therefore, less amenable to detailed evaluation by surface work.

-- Based on the assay results from the 2008 and 2009 trenching programs, the four exposed stockwork lenses have a combined strike length of 580m, an approximate width of 25m, and an average indicative grade of 1.02 g/t AUE (0.96 g/t Au and 4.82 g/t Ag, based on a 75:1 gold/silver price ratio and in-situ values).

-- The results of the latest Program are encouraging and support the Company's decision to initiate a Phase I drilling program to test the depth, strike extent and grade of the 600 x 100m stockwork target area.

- Multiple Vein Target:

-- Lying south of and contiguous with the stockwork target, the multiple vein target consists of two overlapping and offset principal quartz-sulfide veins, having individual strike lengths of approximately 200m.

-- Including the assay results of the current Program, the assay results of the 2008 and 2009 trenching programs, based on continuous channel samples, included:

Vein 3: 1.07 - 13.80 g/t Au and 9.30 - 93.70 g/t Ag over widths from 0.30 - 10.00m

Vein 4: 0.84 - 7.33 g/t Au and 0.60 - 57.80 g/t Ag over widths from 0.30 - 0.80m

-- Presently, this target area is considered to have good underground potential and will be subject to further evaluation, including drilling.

- Two new mineralized targets have also been discovered:

-- The Alessandra Target is located 180m north of and along strike from the stockwork target. Based on limited work done to date, 10 continuous channel samples of veins from the Alessandra target returned assay results ranging from 0.34 - 39.86 g/t Au and 2.2 - 78.2 g/t Ag over widths from 0.10 - 0.60m. Based on the favorable assay results to date, and the location of this target area, further evaluation work is warranted.

-- The Gabriel Target is located approximately 300m south of the multiple vein target and contains several quartz veins and veinlets that are aligned with the major shear structure. Overall, 21 continuous channel samples of veins from the Gabriel target returned assay results ranging from 0.22 - 10.97 g/t Au and 1.8 - 83 g/t Ag over widths from 0.18 - 4.00m.

ECUADOR

AndeanGold's three principal Ecuadorian projects are Molleturo, Curiplaya and San Bartolome, each with approved EIS reports. NI 43-101 reports were prepared for the Molleturo and Curiplaya Projects in connection with the Company's TSX Venture Exchange listing in January 2007.

The Molleturo and San Bartolome Projects are high-grade polymetallic properties with historic small-scale underground mining operations. The mean assay results from historical sampling of the Roman and Isabel Veins at the Molleturo Project are:

392.0 g/t Ag, 3.4 g/t Au, 0.69% Cu, 2.3% Pb and 4.24% Zn

The San Bartolome Project is Ecuador's largest historic silver producer, with reported historic grades of:

20 oz/t Ag, 1.15% Pb and 2.9% Zn

During the fourth quarter of 2007, a select grab sampling program was conducted at the San Bartolome Project of mineralized waste dump vein material from the previous small-scale mining operations. The results supported San Bartolome's reported historic high-grades, with the assays returning (see news release of November 1, 2007):

40.9 to 71.7 oz/t Ag; 2.87 to 5.15 g/t Au, 0.84 to 4.36% Pb and 2.66 to 10.84% Zn

The Curiplaya Project is located in the "Dynasty Copper-Gold Belt" in southwest Ecuador and contains Au-Cu porphyry and epithermal / stockworks targets. During 2007, a 7,200 metre drill program was completed on the "Core Zone" copper-gold porphyry target, which returned anomalous precious and base metals values, but did not identify any target that would warrant a follow up drill program. The Company subsequently shifted its focus on the Project to testing other major targets, including the "West Zone", an epithermal breccia target with reported values of up to 6.0 g/t Au, and the "Limon Zone", a Cu, Au porphyry target with reported rock chip values up to 1.78% Cu.

West Zone:

A detailed geochemistry grid was completed on the West Zone, where a newly defined soil gold anomaly, covering an area 150m long by 300m wide, was defined. The anomaly partially overlaid a body of gold-bearing intrusive/hydrothermal breccia, some 150m long and 125m wide. In addition to the main gold anomaly, several other gold anomalous areas were detected within a soil grid that covered an area of 500 x 600 metres. Two trenches were completed in the breccia area to test for bed rock mineralization and continuous channel samples, taken at 2.0 metre intervals, returned the following average assay results (see new release of February 28, 2008):

Trench #1 - 22.0 metres grading 4.74 g/t Au and 1.31 g/t Ag

Trench #2 - 41.7 metres grading 3.70 g/t Au and 1.71 g/t Ag

Limon Zone:

A 2,200 x 3,500 metre grid completed on the Limon Zone defined two Cu-Au porphyry anomalies (250 x 250m and 200 x 350m) and a shear zone anomaly (500 x 500m).

New Mines Law:

The Company was encouraged by the passage of the new mines law in Ecuador, which was formalized in the Ecuadorian government's legislative gazette on January 29, 2009. The Ministry of Mines and Petroleum ("MMP") has 180 days to write the specific regulations to apply the new law, which must then be reviewed and approved by the new Congress and President prior to implementation. The determination of the Ecuadorian Government to pass a new mines law has renewed the interest of the mining industry in Ecuador, as evidenced by the sale of Aurelian Resources (Fruta del Norte property) to Kinross Gold, announced discussions in progress for the potential sale of Corriente Resources (Mirador Project) and other recently announced property / company acquisitions. In addition, several of mining companies, with advanced projects, have recently received notice from the MMP to resume activities on their projects. The Company is in discussion with the MMP to reinitiate work programs on its projects and looks forward to working with the MMP to regularize and negotiate revised mining concession contracts once the mining law regulations have been implemented. The Company has timely paid the 2009 mining fees on its concessions, pursuant to the provisions of the new mines law.

COLOMBIA

In Colombia, the Company has established an office in the city of Medellin and hired a senior Colombian geologist. Several properties of interest have been investigated, principally in the Department of Antioquia, which is where the Company has focused its activities. To date, no concessions have been acquired.

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 Rio Seco 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, which, among other provisions, provided for the suspension of exploration activities in Ecuador for a period of 180 days. Ecuador recently passed a new Mines Law, which replaces the Mining Mandate, and is working on developing regulations and finalizing terms and conditions of future mining operations. The Company looks forward to working with government officials to this end, and is actively pursuing authorization to reinitiate work programs on its key Ecuadorian projects.

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.

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