ANDEAN AMERICAN MININ G CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED MARCH 31

2008

2007

Restated Not e 17

$

$

C AS H PROVIDED FROM (US ED FO R):

OPERATING ACTIVITIES

Net income (loss ) for the period

(19,242,387)

(21,433,578)

Adjustments for items not affecting cash:

-

Amortization and depletion

1,425,694

878,890

Stock bas ed compens ation

1,785,307

615,767

Minority interes t

(780,345)

-

Provis ion for reclamation

3,495

22,486

Unrealized foreign exchange gain on long-term

monetary as sets and liabilities

(15,261)

249,896

Write-down of mineral properties

5,132,844

8,307,532

Write-down of mineral on leach pads

3,859,867

-

Write-down of property plant and equipment

589,888

1,286,674

Los s on s ale of mineral property

-

6,086,167

Dilution los s on s ale of s hares by s ubs idiary

3,490,008

1,886,296

(3,750,890)

(2,099,870)

Net changes in non-cash working capital items :

Accounts receivable

(129,406)

106,073

Mineral on pads and inventories

1,389,356

979,172

Prepaid expens es

(32,679)

(137,352)

Accounts payable and accrued liabilities

1,542,160

(245,540)

Deferred income

(303,054)

116,639

(1,284,513)

(1,280,878)

INVES TING ACTIVITIES

Mineral properties and deferred cos ts

(8,537,752)

(2,966,625)

Shares of subs idiary acquired by private placement

(2,000,000)

-

Property, plant and equipment

(1,616,219)

(134,198)

(12,153,971)

(3,100,823)

FINANCING ACTIVITIES

Private placement of units , net of is sue costs

12,709,393

835,155

Shares is s ued by subs idiary to minority interes t,

net of is sue cos ts

6,922,785

3,006,862

Payment of long term debt

(263,532)

(314,492)

Payment of loans payable

(4,813)

(555)

19,363,833

3,526,970

INCREAS E (DECREAS E) IN C AS H AND CAS H

EQUIVALENTS DURING THE YEAR

5,925,349

(854,731)

C AS H AND CAS H EQ UIVALENTS, BEGINNING O F YEAR

(44,231)

810,500

C AS H AND CAS H EQ UIVALENTS, END OF YEAR

5,881,118

(44,231)

C AS H AND CAS H EQ UIVALENTS IS CO MPRIS ED O F:

Cas h

5,973,166

174,484

Bank indebtednes s

(92,048)

(218,715)

5,881,118

(44,231)

The accompanying notes are an integral part of these consolidated financial statements.