SOURCE: Minera Andes Inc.

November 28, 2005 12:37 ET

Minera Andes Signs Letter of Intent Over Los Azules Porphyry Copper Project With Xstrata Copper

SPOKANE, WA -- (MARKET WIRE) -- November 28, 2005 -- Minera Andes Inc. (TSX-V: MAI) (OTC BB: MNEAF) is pleased to announce a letter of intent has been signed with Xstrata Copper regarding the Los Azules porphyry copper project in San Juan province, Argentina. Xstrata Copper and Minera Andes had been working on separate, adjoining properties that straddle a large copper porphyry system now consolidated into one package (see attached map). Xstrata Copper is one of the commodity business units within Xstrata plc.

Allen Ambrose, president of Minera Andes, said, "We are very pleased as this agreement will enable us to explore 100 percent of the primary target at Los Azules. This type of geologic setting and mineralization can be amenable to low-cost mining and recovery methods. There are several mines in production with the same mineralogy and grade of copper identified in our recent drilling. These discovery drilling results speak to the project's potential."

The Los Azules project was discovered by Minera Andes' geologists through regional exploration near the Argentina/Chile border. The combined Minera Andes-Xstrata Copper property package (approx. 7,500 Ha) encompasses a large, enriched (chalcocite) copper zone at Los Azules. The overall target area is approximately 2,700 meters by 700 meters as currently defined (see attached map). Past drilling consists of 15 reverse-circulation and 9 core holes (totaling 5,481 meters) drilled by Minera Andes, Xstrata Copper and Battle Mountain Gold between 1998 and 2004. Eight holes intersected significant copper mineralization greater than 0.4 percent in an area defined by geology, MIMDAS deep penetration IP and magnetic geophysical surveys. The best hole, LA-08-98 encountered 0.55 percent copper over 143 meters and ended in mineralization. The remainder of the holes returned copper values between nil and those shown in the table below.

In the letter of intent, subject to TSX-V approval, 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 preliminary economic assessment (to NI 43-101 standards). If the preliminary assessment shows the project to be potentially economically viable and can be expected to produce 100,000 tonnes of copper per year for 10 years then Xstrata Copper will have a one-time back-in right to earn a 51 percent interest in the combined properties by making a cash payment to Minera Andes of three times its 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 would retain a first right of refusal on any subsequent sale of the property.

The highlights of the drilling are as follows:

Significant Drilling Results at Los Azules

                       Intersection                     Total
Drill Hole      TD(m)  From(m)  To(m)  Interval(m)    Copper (%)
----------      -----  --------------  -----------  --------------
AZ-04-01        195     130     195        56          0.62
 (core)
 Includes:              150     192        36          0.82
AZ-04-02        330.5   164     304       140          0.38
 (core)
 Includes:              164     190        26          0.47
 Includes:              230     304        72          0.42
AZ-04-04        300.8   162     282       120          0.54
 (core)
 Includes:              162     202        40          0.59
 Includes:              236     282        46          0.64
AZ-04-07        168.8    96     152        56          0.44
 (core)
 Includes:              126     152        26          0.58
LA-04-98        250     117     250       133          0.47
 (RC)
LA-06-98        250      61     250       189          0.44
 (RC)
 Includes:              157     250        93          0.64
LA-08-98        220      77     220       143          0.55
 (RC)
 Includes:              103     220       117          0.61
LA-03-04        226      94     226       132          0.40
 (RC)
 Includes:              104     114        10          1.12
Drilling at Los Azules encountered features typical of many porphyry copper systems. In the discovery zone, strongly leached cap rock extends between 61 to 164 meters beneath the surface, and lies above an enriched zone of secondary copper mineralization (chalcocite) overlying a zone of mixed secondary and primary (chalcopyrite) copper mineralization.

All results have been reviewed by Brian Gavin, Minera Andes' vice president of exploration and an appropriately qualified person as defined by National Instrument 43-101.

Xstrata Copper is one of the commodity business units within the major global diversified mining group Xstrata plc, which is listed on the London and Zurich stock exchanges and is based in Switzerland. Xstrata maintains a meaningful position in six major international commodity markets: copper, coking coal, thermal coal, ferrochrome, zinc and lead on four continents and seven countries: Australia, South Africa, Spain, Germany, Argentina, Peru and the UK. Through subsidiaries in Argentina and Australia, Xstrata Copper is a top 10 global copper producer. In Argentina, Xstrata Copper annually produces 180,000 tonnes of copper in concentrate and 633,000 ounces of gold in concentrate and dore from one of the world's major copper deposits, Bajo de la Alumbrera.

Minera Andes is a gold, silver and copper exploration company working in Argentina. 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 acquiring other exploration targets in southern Argentina. The Corporation presently has 90,944,431 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, the Los Azules property in the early stages of exploration. It as yet been shown to contain proven or probable mineral reserves. There can be no assurance that such reserves will be identified on the property, or that, if identified, mineralization may be economically extracted. The Corporation's results will be subject to known and unknown risks and uncertainties that may cause the Corporation's actual results to 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.

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

Contact Information

  • For further information, please contact:

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

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

    Visit our Web site: www.minandes.com