| NEWS RELEASE | TSX-V:AAG |
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| December 1, 2009 | SEDAR Profile # 00003879 |
ANDEAN AMERICAN MINING REPORTS SECOND 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 September 30, 2009.
| Highlights: Financial: |
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| - | The net loss for the period was $402,309 or $0.00 per share compared with a net loss of $1,746,194 or $0.03 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 $52,747 compared with a loss of $449,355 in the comparable period last year was primarily due to a decrease in direct operating costs and stock based compensation. |
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Cash flow provided from (used for) operations in the three months ended September 30, 2009 before changes to non-cash working capital was ($480,170) compared with ($601,244) in the comparative period for 2008. |
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| Operational: | ||
| - | The Company expects to receive an updated NI 43-101 compliant resource estimate incorporating an additional 2,000 metres of drill results in the near future. Andean American has retained Independent Qualified Person Victor Jaramillo, P.Geo., of Discover Geological Consultants, Inc. to author the report. In addition, the Lokhorst Group Ventures Inc. is working on an optimized feasibility study demonstrating the applicability of the finalized flow sheets including improvements to the CAPEX, OPEX and the Economic Model. |
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| - | The feasibility study of June 2009 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, re-interpretation of the property geology indicated 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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“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; 59% 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) ("forward-looking 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 at www.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.
