| NEWS RELEASE | TSX-V:AAG |
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| August 27, 2009 | SEDAR Profile # 00003879 |
ANDEAN AMERICAN MINING REPORTS FIRST QUARTER FINANCIAL RESULTS
VANCOUVER, BRITISH COLUMBIA-Andean American Mining Corp. (TSX.V-AAG) (FWB-AQN)-(all figures in Canadian dollars, unless otherwise noted)
The Board of Directors of Andean American Mining Corp. reports on its Consolidated Interim Financial Statements and Management Discussion and Analysis for the quarter ended June 30, 2009.
| Highlights: Financial: |
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| - | The net income for the period was $31,656 or $0.00 per share compared with a net loss of $1,377,977 or
$0.02 per share in the comparable period last year. Stock based compensation expense, general and
administrative expenses and direct operating costs decreased over the same period in the prior year. This
decrease was offset by increases in foreign exchange due to the fluctuation between the Canadian and US
dollar. |
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| - | The loss from operations in this quarter amounting to $140,719 compared with a loss of $849,982 in the comparable period last year was primarily due to a decrease in direct operating costs. |
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Cash flow provided from (used for) operations in the three months ended June 30, 2009 before changes to
non-cash working capital was $522,180 compared with ($787,437) in the comparative period for 2008. The
increase was primarily due to the fluctuation of the Canadian dollar in relation to the United States dollar. |
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| Operational: | ||
| - | At Invicta, a feasibility study was completed in June of 2009 after an audit by Guy Lokhorst, P.Eng., of The
Lokhorst Ventures Group. The study reported an operating cost for the mine and plant of 28.92 USD/t and a
capital cost of USD 65.3 million. The sum of the 5-years bulk revenue is USD 600.1 million and net profits
are USD 185.3 million, with a gold base price of USD 900/oz and copper base price of USD 2.00/lb. The
Net Present Value at 11% discount rate of the 5-year free cash flow net of debt amortization amounts to USD
159 million in the base case scenario. The Company expects pre-production mine development to take
approximately 12 months from project initiation. |
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| - | At the Sinchao Project, a recent re-interpretation of the property geology indicates that less than 15% of the
mineralized zones have been tested to date. The geological potential for additional resources at the Breccia
and Skarn Zones has been estimated to range from 400Mt to 1,600Mt, with estimated grades of 0.3% to 0.6%
copper and 0.3 to 0.5 g/t gold. This is exclusive of the recently identified porphyry – style mineralization,
which has not yet been evaluated. |
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| - | The sale of El Misti Gold S.A.C. and the Santa Rosa mine finally concluded in June of 2009. The Company
has also retained a small land position in the area and has entered into a joint venture with a private Peruvian
Company, Minera Nueva Esperanza. The Company will assist this group in their efforts to initiate operations
and will receive an NSR in return. |
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“We continue to move towards finalizing our financing of the Invicta Project,” states Chairman and CEO John Huguet, “and we are extremely encouraged by the potential of both our principal properties.”
The complete Management Discussion and Analysis and Financial Statements will be filed with SEDAR at www.sedar.com. For further information call (604) 681-6186 or toll free: 1-888-356-4784 or visit our website at www.andeanamerican.com. Andrew Gourlay, P. Geol., President of Andean American Mining Corp. is the Qualified Person for the technical disclosure in this news release.
On behalf of Andean American Mining Corp.,
“John Huguet”
John Huguet
Chairman & CEO
Andean American Mining Corp.
T: 604.681.6186
F: 604.681.3652
E: investors@andeanamerican.com
Andean American Mining Corp. (TSX.V:AAG) (FWB:AQN) is an international mining and exploration company focused on growth. The Company is actively pursuing new targets of potential early stage gold and silver prospects in Peru and currently has two key assets: the 41,500 hectare Invicta gold-silver-copper advanced exploration stage project; 58% of Sinchao Metals Corp., owner of the Sinchao zinc-copper-silver-gold-lead mineralization project. For further information call (604) 681-6186 or toll free: 1-888-356-4784 or visit www.andeanamerican.com.
This news release may contain forward-looking information within the meaning of the Securities Act (Ontario) ("forwardlooking
statements"). Such forward-looking statements may include the Company's plans for its mineral projects, the overall
economic potential of its properties, the availability of adequate financing and involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance or achievements expressed or implied by
such forward-looking statements to be materially different. Such factors include, among others, risks and uncertainties
relating to potential political risks involving the Company's operations in a foreign jurisdiction, uncertainty of production and
costs estimates and the potential for unexpected costs and expenses, physical risks inherent in mining operations, currency
fluctuations, fluctuations in the price of gold and other metals, completion of economic evaluations, changes in project
parameters as plans continue to be refined, the inability or failure to obtain adequate financing on a timely basis, and other
risks and uncertainties, including those described in the Company's Financial Statements, Management Discussion and
Analysis and Material Change Reports filed with the Canadian Securities Administrators and available atwww.sedar.com.
Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimate of mineral
resources may be materially affected by the inability to obtain required environmental and other regulatory approval,
environmental or operating permits. The estimate may also be materially affected by global economic conditions such as the
price of gold and silver, the price of oil and other commodities utilized in the production of gold and silver. Unknown
geologic or hydrologic conditions or other unknown factors may materially affect the resource estimates.
This document may use the terms "measured resources", 'indicated resources' and 'inferred resources'. Investors are cautioned
not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In addition,
'inferred resources' have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be
assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Investors are
cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable. The quantity
and grade of the potential mineralization is conceptual in nature, and there has been insufficient exploration to define a
mineral resource. It is uncertain if further exploration will result in the targets being delineated as mineral resources.
