SOURCE: Minera Andes Inc.

May 23, 2006 10:00 ET

Minera Andes Drilling Cuts 221 Meters (725 Ft) of 1.62% Copper at Los Azules Project, Argentina

SPOKANE, WA -- (MARKET WIRE) -- May 23, 2006 -- Minera Andes (TSX-V: MAI) and (PINKSHEETS: MNEAF) is pleased to report the discovery of significant high-grade copper at its Los Azules property in Argentina. An eleven hole drill program returned intervals up to 1.62% copper over 221 meters and 1.00% copper over 173 meters in separate holes.

The new core drilling (see Table 1) focused on the previously defined enriched copper target in an area approximately 2,500 meters by as much as 1,500 meters defined by prior drilling (see attached map). Drilling tested mineralization on both Minera Andes' lands and adjacent lands subject to a letter of intent with Xstrata Copper (see below).

Table 1. Significant 2006 Drilling Results at Los Azules

Drill Hole                  Intersection              Total
                    TD    From      To     Interval   Copper
                    (m)    (m)      (m)       (m)      (%)
AZ-06-10 (core)   261.35    174   261.35     87.35     0.83
AZ-06-11 (core)    270.7  158.7    270.7     158.7     0.51
AZ-06-14 (core)   224.55    136      178        42     1.13
Includes:                   136      158        22     1.40
AZ-06-17 (core)    183.5     66    183.5    117.65     0.63
Includes:                    66      124        58     0.84
AZ-06-19 (core)    299.4  78.25    299.4    221.15     1.62
Includes:                 78.25      116     37.75     2.22
Includes:                   134      146        12     3.94
AZ-06-20 (core)    253.3     80    253.3     173.3     1.00
Includes:                    80       98        18     1.69
Includes:                    98      182        84     1.12
Allen Ambrose, president of Minera Andes, said, "Our technical team has made a second discovery in Argentina. Our careful, consistent, methodical exploration has now resulted in two discoveries including the San José project now going into production and the new exciting Los Azules drilling results. The northern portion of the Los Azules target where the new drilling has discovered thick sections of plus one percent copper is exciting in that we see a large copper target developing that is near surface and high grade. We look forward to reporting on the ongoing exploration program at this discovery later this year when an aggressive drilling campaign will start in Argentina's summer field season."

Eleven reconnaissance core holes totaling 3,426 meters were drilled in the current campaign to depths of between 133 to 316 meters. The primary focus of the drilling was to test the grade and continuity of known leachable (chalcocite) copper mineralization identified in prior drill campaigns (see Table 2). Drilling at Los Azules continues to encounter features typical of many porphyry copper systems. In the discovery zone, strongly leached cap rock extends from the subcrop to as much as 161 meters beneath the surface followed by an enriched zone of secondary copper mineralization (chalcocite) overlying a zone of mixed secondary and primary (chalcopyrite) copper mineralization. The majority of holes shown in Table 1 ended in mineralization. Drill holes AZ-06-12, 13, 15, 16, and 18 returned lower copper values ranging from nil to 0.5 percent copper.

Table 2. Significant Drilling Results at Los Azules, 1998 to 2004

Drill Hole                  Intersection              Total
                      TD   From       To    Interval  Copper
                     (m)    (m)      (m)       (m)      (%)
AZ-04-01 (core)      195    130      195        56     0.62
Includes:                   150      192        36     0.82
AZ-04-02 (core)    330.5    164      304       140     0.38
Includes:                   164      190        26     0.47
Includes:                   230      304        72     0.42
AZ-04-04 (core)    300.8    162      282       120     0.54
Includes:                   162      202        40     0.59
Includes:                   236      282        46     0.64
AZ-04-07 (core)    168.8     96      152        56     0.44
Includes:                   126      152        26     0.58
LA-04-98 (RC)        250    117      250       133     0.47
LA-06-98 (RC)        250     61      250       189     0.44
Includes:                   157      250        93     0.64
LA-08-98 (RC)        220     77      220       143     0.55
Includes:                   103      220       117     0.61
LA-03-04 (RC)        226     94      226       132     0.40
Includes:                   104      114        10     1.12
All results have been reviewed by Brian Gavin, Minera Andes' vice president of exploration, an appropriately qualified person as defined by National Instrument 43-101. Minera Andes has retained the firm of Roscoe Postle and Associates, an independent international geological and mining consulting firm, to review the quality control and quality assurance program on the project. A full program of check analyses and sequential leach copper analyses is in progress.

Xstrata Copper Agreement

Minera Andes owns a 100 percent interest in its land that makes up the southern half of the property. The Xstrata Copper lands (see map) are subject to a letter of intent whereby Minera Andes has the right to earn a 100 percent interest in Xstrata Copper's property by spending at least US$1.0 million on the property over the next four years, making payments to keep the property in good standing and producing a preliminary economic assessment (to NI 43-101 standards). If the preliminary assessment shows the project to be potentially economically viable at a potential production rate of 100,000 tonnes (200 million pounds) of copper per year for 10 years then Xstrata Copper will have a one time back-in right to earn a fifty one percent interest in the combined properties by making a cash payment to Minera Andes of three times Minera Andes' expenditures on the property, completing a bankable feasibility study within five years and assuming underlying property commitments. In the event that the preliminary assessment does not meet the size criterion contemplated above, Xstrata Copper's interest would reduce to a first right of refusal on any subsequent sale of the property. All lands that make up the property's mineral applications are subject to a provincial mouth of mine royalty of between zero and three percent. This royalty will be negotiated with the province of San Juan as the project advances.

The Xstrata Copper lands to be acquired by Minera Andes are subject to two underlying agreements. The first agreement covering approximately 1,400 hectares has remaining payments totaling US$845,000 to acquire a 100 percent of these lands. The second agreement, covering the remainder of the Xstrata Copper lands contains underlying payments totaling US$410,000, a US$1.0 million work commitment and a 25 percent buy back clause if a feasibility study is completed within 3 years of Xstrata Copper/Minera Andes exercising the option to acquire the property, subject to payback to Xstrata Copper/Minera Andes of two times the expenditures on the property. If the vendor buys back 5 percent or less there interest will convert to a one percent net smelter royalty.

Minera Andes is a gold, silver and copper exploration company working in Argentina. Minera Andes holds about 440,000 acres of mineral exploration land in Argentina, including the co-owned San José silver/gold project now under construction and development for planned mine production and is acquiring other exploration targets in southern Argentina. The Corporation presently has 151,614,776 issued and outstanding shares.

For further information, please contact: Art Johnson at the Spokane office, or Krister A. Kottmeier, investor relations -- Canada, at the Vancouver office. Visit our Web site: www.minandes.com

FORWARD-LOOKING STATEMENT -- The Corporation's results will be subject to known and unknown risks and uncertainties that may cause the Corporation's actual results in future periods to differ materially from forecasted or anticipated results. Among those factors which could cause actual results to differ materially are the following: the risks inherent in mineral exploration and the mining industry, the Corporation's needs for additional capital, and other risk factors listed from time to time in the Corporation's public filings. In addition, Minera Andes' joint venture partner, Mauricio Hochschild & Cia. Ltda., does not accept responsibility for the use of project data or the adequacy or accuracy of this release.

THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • Spokane Office
    Art Johnson
    111 East Magnesium Rd., Suite A
    Spokane, WA 99208 USA
    Phone: (509) 921-7322
    E-mail: info@minandes.com

    Vancouver Office
    Krister A. Kottmeier
    410-744 West Hastings Street
    Vancouver, B.C.
    V6C 1A5
    Phone: (604) 689-7017
    877-689-7018
    E-mail: ircanada@minandes.com