SPOKANE, WA, Nov 11, 2008 /PRNewswire-FirstCall via COMTEX/ --
Minera Andes Inc. (TSX: MAI and US OTC: MNEAF) is pleased to announce details of the San Jose mine performance to September 30, 2008. The San Jose project is operated by Minera Santa Cruz S.A. ("MSC") and is owned 49% by Minera Andes and 51% by Hochschild Mining plc ("Hochschild") (HOCM.L: Reuters and HOC LN: Bloomberg - London Stock Exchange). Hochschild is the operator of the project. Gross proceeds from metal sales during the third quarter of 2008 were $18.5 million.
Production at the San Jose mine in Q3 2008 totaled 990,000 ounces of silver and 12,340 ounces of gold, of which 49% is attributable to Minera Andes. Mill throughput increased 11.5% compared to the previous quarter, but silver production was 9.4% lower and gold production was 0.6% lower than the previous quarter due to lower head grades.
SAN JOSE MINE PRODUCTION
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Production* Q3 Q2 Q1
2008 2008 2008
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Ore production (metric tons) 67,589 60,603 59,897
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Average head grade silver (g/t) 547 681 624
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Average head grade gold (g/t) 6.78 7.56 7.10
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Silver produced (ounces) 990,000 1,093,000 968,000
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Gold produced (ounces) 12,340 12,410 12,140
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Net silver sold (ounces)* 846,000 2,284,400 323,000
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Net gold sold (ounces)* 9,760 28,980 5,050
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* The company has a 49% interest in the San Jose production.
Third quarter 2008 sales of gold and silver are lower than Q2 because an inventory build of metal produced in 4Q 2007 and 1Q 2008 gave the second quarter higher than normal sales. In addition, another build up of metal inventory has occurred in Q3 due to a smelting furnace being temporarily down. The metal in inventory is forecast to be sold in Q4 of 2008. The average realized market prices in 3Q 2008 were 4.5% lower for Au and 25% lower for Ag than in 2Q 2008. Prices for sales of metal in Q3 2008 on an average weighted basis were $861 per ounce of gold and $12.37 per ounce of silver.
Phase I of the expansion has been completed, consisting of an increase in the mining and processing capacity from 750 metric ton per day to 1,500 metric ton per day. Mine production will ramp up to full capacity over the next few months. Currently, approximately 40% of the ore fed to the expanded plant is being processed to produce dore bars and approximately 60% is being processed to produce concentrates. Phase II of the expansion involves connecting to the regional electrical grid which is estimated to be completed in Q1 2009. Meanwhile, there is sufficient diesel generating capacity at the mine to run the mill at its full capacity. Phase III of the mine expansion involves further expansion of the refining circuit at the processing facility to convert all the concentrate produced at the mine to dore which is expected to be completed by mid 2009, which will reduce working capital requirements and selling discounts and receive a lower tax treatment.
Allen Ambrose, president of Minera Andes said, "The San Jose project now has cash flow that is being used to pay for the expansion of the mine, refining circuit, and for the connection to the regional power grid. Remaining funds will be used to begin repayment of the joint venture project debt."
The San Jose mine now comprises 18 km of underground workings accessed by ramps on the Huevos Verdes, Frea and Kospi veins. During 2008 to date, 4,095 meters of workings were completed on the Huevos Verdes, Frea, and Kospi veins. The mine is currently staffed with 724 employees and over 230 contractors.
Allen V. Ambrose, Minera Andes' President, who is a "qualified person" as defined by National Instrument 43-101, is responsible for the information used in this news release and has supervised the preparation of the information and reviewed all information used in this news release.
Minera Andes is a gold, silver and copper exploration company working in Argentina. The Company holds about 304,000 acres of mineral exploration land in Argentina including the 49% owned San Jose silver/gold mine that commenced production last year. Minera Andes is also exploring the Los Azules copper project in San Juan province, where an exploration program is underway to define a resource and scoping study. Other exploration properties, primarily silver and gold, are being evaluated in southern Argentina. The Corporation presently has 189,706,935 shares issued and outstanding.
This news is submitted by Allen V. Ambrose, President and Director of Minera Andes Inc.
Caution Concerning Forward-Looking Statements:
This press release contains certain "forward-looking statements", including, but not limited to, the statements regarding the Company's strategic plans, evolution of mineral resources and reserves, work programs, development plans and exploration budgets at the Company's San Jose Project. The forward-looking statements express, as at the date of this press release, the Company's plans, estimates, forecasts, projections, expectations or beliefs as to future events and results. 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. In particular, there can be no assurance that production capacity at the San Jose mine will be successfully increased, that resources and reserves at the San Jose mine will be increased. 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, the state of the capital markets, environmental risks and hazards, uncertainty as to calculation of mineral reserves and other risks. We refer readers to the risk factors and uncertainties described in the Company's continuous disclosure record, a copy of which is available under the Company's profile at www.sedar.com. Minera Andes' joint venture partner, a subsidiary of Hochschild Mining plc, and its affiliates do not accept responsibility for the use of project data or the adequacy or accuracy of this release.
Cautionary Note to U.S. Investors:
The United States Securities and Exchange Commission (the "SEC") permits mining companies, in their filings with the SEC, to disclose only those mineral deposits with "mineral reserves" that a company can economically and legally extract or produce. We use certain terms in this press release, such as "mineral resources", that the SEC guidelines strictly prohibit us from including in our filings with the SEC, because these terms are common usage in Canada and form part of our Canadian filing requirements.
SOURCE Minera Andes Inc.
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