Minera Andes Inc.
TSX : MAI
OTC Bulletin Board : MNEAF

Minera Andes Inc.

June 27, 2011 09:30 ET

Minera Andes Reports Drill Results and Development Update for the Los Azules Copper Project

TORONTO, ONTARIO--(Marketwire - June 27, 2011) - Minera Andes Inc. (the "Corporation" or "Minera Andes") (TSX:MAI)(OTCBB:MNEAF) is pleased to announce drill assay results from the January – May 2011 drill program and a development update for the 100% owned Los Azules Copper Project, in San Juan Province, Argentina. Highlights from the recent drilling include a step-out drill hole, located approximately 250 meters west of the resource that returned 0.50% copper over 269 meters, including 0.95% copper over 45 meters. Infill drilling was generally in line with expectations, for example intersecting 0.66% copper over 395 meters and 0.63% copper over 237 meters (Table 1).

Exploration Drilling West of Resource

Two exploration holes were designed to test geophysical anomalies located west and north of the resource. The best result, hole T-01, located approximately 250 meters west of the resource, intersected 0.50% copper over 269 meters, including 0.95% copper over 45 meters. This hole is encouraging for several reasons, 1) it demonstrates that geophysics may be a useful guide for copper mineralization at Los Azules, 2) this area is only one of several high priority geophysical targets that have been identified on the property, and 3) the hole bottomed in 0.42% copper and was terminated before reaching its target depth, suggesting that there may be potential to find additional mineralization at depth. Follow up exploration is currently being planned.

Infill Drilling Confirms Expectations

Drilling to upgrade the inferred mineralization to the indicated category consisted of nine drill holes. In general, the holes returned mineralization in-line with expectations. Drill holes AZ1168 and AZ1170 were terminated while in mineralization due to difficult drilling conditions, bottoming in 0.95% and 0.55% copper, respectfully. The mineralization at Los Azules is open at depth.

Hole AZ1164 was extended as planned, intersecting good copper grades over a wide intersection. This result helps infill the central portion of the deposit.

Table 1 - Los Azules Infill Drilling Summary

HoleCuThicknessFromTo
(%)(m)(m)(m)
AZ11640.55284.4120.0404.4
Including0.75128.0120.0248.0
AZ11680.66395.4148.0569.3
AZ11690.36229.886.0315.8
AZ11700.63237.3112.0349.3
Including0.8562.0112.0174.0
AZ11760.63130.0162.0292.0

Despite encountering low grade copper mineralization, infill holes AZ1171, AZ1172, AZ1173 returned values less than expected.

Planned Exploration at Los Azules

Due to difficult ground conditions the amount of meters drilled between January-May was less than planned. The strategy for the upcoming season is to continue testing deep geophysical targets. Also, Minera Andes will look to begin drilling at Los Azules earlier than previous years in order to extend the drill campaign.

Preliminary Feasibility Study

Minera Andes continues to advance work related to Los Azules Preliminary Feasibility Study including the following:

  • Developed preliminary hydrologic model
  • Evaluated potential geotechnical risks with positive outcome
  • Completed evaluation of construction/production access road alternatives
  • Continued environmental base line assessment and monitoring, including glaciology studies (no ice glaciers are present in the project area)
  • Drilled condemnation holes in areas that are potential locations for surface facilities (Exhibit 1A and Exhibit 4)
  • Completed archeological assessment
  • Completed initial stakeholder mapping
  • Conducted preliminary testing of alternative metallurgical processing options with positive results
  • Completed trade-off study of heap leaching option as an alternative to flotation recovery with determination that heap leaching is not a viable option
  • The anticipated cost to complete the Preliminary Feasibility Study is $30 million, with the earliest completion date being late 2013.

About Los Azules

Los Azules is a large copper porphyry system located in western San Juan Province in a belt of porphyry copper deposits that straddles the Chilean/Argentine border. This belt contains some of the world's largest copper deposits, including Codelco's El Teniente and Andina mines, Anglo American's Los Bronces mine, Antofagasta PLC's Los Pelambres mine and Xstrata's El Pachón project, among others.

The mineral resources for Los Azules were calculated in June 2010 and are summarized in the table below for the "base case" cut-off grade of 0.35 percent copper. The base case cutoff grade is based on experience from other projects with similar characteristics, potential scale of operation and location.

Mineral
Resource
Category
Tonnes
(millions)
Copper
%
Contained Copper
(MM lbs)
Gold
grams/tonne
Silver
grams/tonne
Indicated1370.732.20.071.7
Inferred9000.5210.30.071.7

There is a high-grade secondary enrichment zone near the top of the mineralization. We use a cut-off grade of 0.70% copper to define "high-grade" mineralization, and the material above the 0.70% cut off approximates the secondary enrichment zone, but it is not exactly coincident. The portions of the deposit that exceeded the 0.70% copper limit are 67 million tonnes of indicated resources at an average grade of 0.95% (1.4 billion pounds of contained copper) and 127 million tonnes of inferred resources at an average grade of 0.86% (2.4 billion pounds of contained copper).

The results of the 2011 drilling will not have a material impact on the inferred mineralization and no resource update is warranted.

Refiled Interim Financial Report

Minera Andes also announces today that it is refiling its interim financial statements for the three months ended March 31, 2011 to provide a condensed consolidated statement of changes in equity for the period ended March 31, 2010 under International Financial Reporting Standards ("IFRS"). The refilling was made at the request of the Ontario Securities Commission and the additional disclosure does not impact any of the other interim financial statements previously filed.

About Minera Andes

Minera Andes is an exploration company exploring for gold, silver and copper in Argentina with three significant assets: a 49% interest in Minera Santa Cruz SA, owner of the San Jose Mine in close proximity to Goldcorp's Cerro Negro project; 100% ownership of the Los Azules copper deposit with an inferred mineral resource of 10.3 billion pounds of copper and an indicated resource of 2.2 billion pounds of copper; and, 100% ownership of a large portfolio of exploration properties in Santa Cruz province, Argentina, including properties bordering the Cerro Negro project in Santa Cruz Province. Minera Andes had $22 million in cash and short-term investments, with no bank debt (as of May 31, 2011). Rob McEwen, Chairman and CEO, owns 31% of the shares of the corporation. On June 14, 2011 the corporation announced that Mr. McEwen has proposed to combine the corporation with US Gold Corporation to create a high growth, low-cost, mid-tier silver producer focused on the Americas.

This news release has been submitted by James K. Duff, Chief Operating Officer of the Corporation.

For further information, please contact: Jim Duff or visit our Web site: www.minandes.com.

Scientific and Technical Information:

This news release was prepared by James K. Duff, Chief Operating Officer of the Corporation and a registered Professional Geologist in the State of Idaho, who is a Qualified Person as defined by National Instrument 43-101. Bruce Davis, PhD, FAusIMM, who is a Qualified Person as defined by National Instrument 43-101 and responsible for the quality control for the assaying of the Los Azules drill core has reviewed the assay quality control information and is awaiting final results from additional quality control samples. All samples were collected in accordance with industry standards. Splits from the drill core samples were submitted to the ACME sample preparation laboratory in Mendoza, Argentina, and then transferred to ACME's laboratory in Santiago, Chile for fire assay and ICP analysis. Accuracy of results is tested through the systematic inclusion of standards, blanks and check assays. The mineral resource estimate referenced in this press release was prepared in June 2010 by Robert Sim, P.Geo. and Bruce Davis, PhD, FAusIMM, both independent Qualified Persons as defined by National Instrument 43-101 "Standards of Disclosure for Mineral Projects" ("NI 43-101").

For further information in respect of the Los Azules project please refer to the technical report entitled "Canadian National Instrument 43-101 Updated Preliminary Assessment, Los Azules Project, San Juan Province, Argentina" dated December 16, 2010, prepared by Kathleen Altman, Robert Sim, Bruce Davis, William L. Rose, Scott Elfen, and Richard Jemielita, each of whom is "independent" of the Corporation and a "qualified person" for the purposes of National Instrument 43-101 – "Standards of Disclosure for Mineral Projects . This report is available on SEDAR (www.sedar.com).

Cautionary Note to U.S. Investors:

All resource estimates reported by the Corporation are calculated in accordance with 43-101 and the Canadian Institute of Mining and Metallurgy Classification system. These standards differ significantly from the requirements of the U.S. Securities and Exchange Commission. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

Caution Concerning Forward-Looking Statements:

This press release contains certain forward-looking statements and information. The forward-looking statements and information express, as at the date of this press release, the Corporation's plans, estimates, forecasts, projections, expectations or beliefs as to future events and results and management's understanding of proposed legislative changes. Forward-looking statements involve a number of risks and uncertainties, and there can be no assurance that such statements will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements. Risks and uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the forward-looking statements include, but are not limited to, factors associated with fluctuations in the market price of precious metals, mining industry risks, risks associated with foreign operations, risks related to on-going or pending litigation including specifically risks related to litigation which if resolved adversely to Minera Andes could materially impact the Corporation's value and interest in and ability to develop the Los Azules project, property title, the state of the capital markets, environmental risks and hazards, uncertainty as to calculation of mineral resources and reserves and other risks.

Readers should not place undue reliance on forward-looking statements or information. The Corporation undertakes no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. See the Corporation's annual information form for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information. All forward-looking statements and information made in this news release are qualified by this cautionary statement.

Exhibit 1 - Summary of Drill Hole Results for 2010-2011 Drill Season
Intersection
From (m)To (m)Vertical Thickness (m)% CuComments
HOLE 1064A0120120.0-Pre hole drilled in 2009-2010 season.
120248128.00.75Secondary enrichment zone
24828840.00.58Mixed secondary enrichment (Cc) and chalcopyrite mineralization disseminations
288404.4116.40.33Primary disseminated chalcopyrite
HOLE 10670156156.0-Pre hole drilled in 2009-2011 season
156336180.00.23Mixed secondary enrichment and disseminated chalcopyrite
33637539.00.40Primary disseminated chalcopyrite
Hole 116804646.0-Gravel overburden
4614895.00.04Leached cap
148515344.40.67Mixed secondary enrichment and disseminated chalcopyrite
51555739.50.48Primary disseminated chalcopyrite
557569.311.50.95Primary disseminated chalcopyrite and bornite
Hole 116905050.0-Gravel overburden
508636.00.10Leached cap
86315.75229.80.36Primary chalcopyrite mineralization disseminations
HOLE 117003030.0-Gravel overburden
3011282.00.05Leached cap
11217462.00.85Secondary enrichment
174349.3175.30.55Mixed secondary enrichment and disseminated chalcopyrite
HOLE 117105050.0-Gravel overburden
508636.00.05Leached cap
86201115.00.12Mixed secondary enrichment and disseminated chalcopyrite
201400.1199.10.16Primary disseminated chalcopyrite
HOLE 117206262.0-Gravel overburden
627412.00.09Leached cap
7412551.00.22Mixed secondary enrichment and disseminated chalcopyrite
12515227.00.07Primary pyrite and chalcopyrite veinlets
Intersection
From (m)To (m)Vertical Thickness (m)% CuComments
HOLE 117303232.0-Gravel overburden
328048.00.11Leached cap
809919.00.34Secondary enrichment
99228129.00.22Mixed secondary enrichment and disseminated chalcopyrite
228294.566.50.18Primary disseminated chalcopyrite
HOLE 117402424.0-Overburden
247652.00.03Leached cap
76250174.00.17Mixed secondary enrichment and disseminated chalcopyrite
250341.491.40.10Primary chalcopyrite mineralization disseminations
HOLE 117506363.0-Overburden
637411.00.03Leached cap
74249.5175.50.22Primary disseminated pyrite and veinlets

HOLE 1176
03232.0-Overburden
32162130.00.03Leached cap
162292130.00.63Secondary enrichment
292393.4101.40.19Primary disseminated pyrite and veinlets
HOLE T-01B07272.0-Overburden
72808.00.09Leached cap
80866.00.78Secondary enrichment
8613246.00.27Primary disseminated chalcopyrite
1321408.00.73Mixed secondary enrichment and disseminated chalcopyrite
14018646.00.25Primary disseminated chalcopyrite
1861926.01.43Secondary enrichment
192387195.00.13Primary disseminated chalcopyrite
38740821.00.62Secondary enrichment
40842214.00.54Mixed secondary enrichment and disseminated chalcopyrite
42246846.00.25Primary disseminated chalcopyrite
46848618.00.49Mixed secondary enrichment and disseminated chalcopyrite
48649610.00.95Secondary enrichment
49656064.00.33Mixed secondary enrichment
56060545.00.95Primary chalcopyrite and bornite
60565651.00.42Primary chalcopyrite
HOLE T-0207676.00.04Leached cap
76700.1624.10.06Primary pyrite mineralization disseminations and veins

Exhibit 1A - Summary of Condemnation Drills Results for 2010-2011 Drill Season

Intersection
From (m)To (m)Vertical Thickness (m)% CuComments

HOLE CO 01
0200200.00.001Fresh unmineralized rock
HOLE CO 020168168.00.001Fresh unmineralized rock
16820032.00.006Fresh unmineralized rock
HOLE CO 030200200.00.003Fresh unmineralized rock
HOLE CO 0402828.00.004Fresh unmineralized rock, partially leached
28186158.00.001Fresh unmineralized rock
HOLE CO 050162162.00.002Fresh unmineralized rock
HOLE CO 060200200.00.003Fresh unmineralized rock
HOLE HB 040200200.00.002Fresh unmineralized rock
HOLE HB 050200200.00.001Fresh unmineralized rock
HOLE HB 060200200.00.003Fresh unmineralized rock
HOLE HB 0708282.00.002Fresh unmineralized rock with meteoric weathering
82200118.00.006Fresh unmineralized rock
HOLE GB 02042420.003Fresh unmineralized rock with meteoric weathering
42200158.00.007Fresh unmineralized rock

To view the figures associated with this press release, please visit the following link: http://media3.marketwire.com/docs/mai_627_figures.pdf

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this news release, which has been prepared by management.

Contact Information

  • Minera Andes Inc.
    James K. Duff, Chief Operating Officer
    99 George St. 3rd Floor, Toronto, Ontario, Canada, M5A 2N4
    647-258-0395 or Toll-Free: 1-866-441-0690
    647-258-0408 (FAX)
    info@minandes.com
    www.minandes.com