SOURCE: Minera Andes Inc.

October 06, 2005 13:15 ET

Minera Andes Provides San Jose Gold/Silver Project Advances; Feasibility Study Due Out This Month

SPOKANE, WA -- (MARKET WIRE) -- October 6, 2005 -- Minera Andes Inc. (TSX-V: MAI) and (OTC BB: MNEAF) is pleased to announce that the San José/Huevos Verdes high-grade silver/gold project has made continued progress in the second and third quarters of 2005, both operationally and financially.

A feasibility study and environmental impact assessment for the Huevos Verdes project are scheduled for public release this month. A letter of intent has been signed for $50 million in project financing to construct a mine and processing facility at the San José project, assuming a positive feasibility study outcome. Minera Santa Cruz (MSC), the joint venture of Minera Andes and Mauricio Hochschild & Cia. Ltda., is co-owned by Minera Andes (49 percent) and Hochschild (51 percent).

Allen Ambrose, president of Minera Andes, said, "The feasibility study is a long awaited event for us and we look forward to reporting its contents in a news release later this month. Thirty days from the release of information on the feasibility study a technical report prepared to National Instrument 43-101 standards will be filed on Sedar. AMEC Engineering has been retained to prepare this report."

Underground Work and Exploration

Underground development at Huevos Verdes has generally continued at an accelerated pace, with 826 meters completed in the second quarter. Work has been conducted on both the northern and southern shoots of the main Huevos Verdes vein, and in part includes drifting toward the central mineralized zone of Huevos Verdes to better evaluate its mineralized potential. Underground workings now total more than 4,200 meters, compared to about 3,300 meters in total reached during the first quarter of 2005. During the second quarter, development of underground infrastructure such as tunnels, ore passes and vertical workings averaged about 275 meters per month.

The second phase of a three-phase diamond drilling program, begun early in 2005 at the Huevos Verdes and Frea veins, was completed in the second quarter. The Frea vein was added to the project earlier this year and represents a significant enlargement of the total Huevos Verdes project. A total of 32,214 meters of drilling was conducted on the veins in the two phases, with results from the drilling included in the feasibility study.

Construction of two underground ramps, one for the main Huevos Verdes project and the other at the nearby Frea vein, was also begun in July. The ramps will access the Huevos Verdes and Frea veins at depth for gold/silver production.

The third phase diamond drilling program, begun after the closing of the feasibility study, totaled about 9,000 meters and successfully identified three new areas of mineralization to the immediate northeast of Frea. The drilling found more than two kilometers of new and still-open-ended mineralized vein trend.

Surface Facilities Construction

Construction to expand employee housing and dining facilities at Huevos Verdes is planned for completion later this month. The expansion was due to employment increasing to 350 from about 185 at year-end 2004.

Construction of water treatment plants and a new warehouse is planned for completion in November. Electric generators for the main Huevos Verdes facilities and the south shaft area have also been purchased.

Minera Andes is a gold, silver and copper exploration company working in Argentina. The corporation is funded with working capital of about US$1.3 million for feasibility study completion and underground construction at its advanced-stage silver/gold project in Santa Cruz province. Minera Andes holds about 500,000 acres of mineral exploration land in Argentina, including the co-owned Huevos Verdes/San José silver/gold project now under construction and feasibility consideration for possible mine production. Minera Andes has also discovered an enriched copper zone at its Los Azules property and is in negotiations to develop it further, and is acquiring other exploration targets in southern Argentina. The Corporation presently has 90,818,505 issued and outstanding shares.

This news is submitted by Allen V. Ambrose, President and Director of Minera Andes Inc.

FORWARD-LOOKING STATEMENT - Although Minera Andes believes many of its properties have promising potential its properties are in the early stages of exploration. None have yet been shown to contain proven or probable mineral reserves. There can be no assurance that such reserves will be identified on any property, or that, if identified, mineralization may be economically extracted. There can be no assurance that the San José/Huevos Verdes gold/silver project will be found to be economically feasible or that a mine will be successfully constructed. 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.

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.

Contact Information

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

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