Minera produces 1.4 million oz Ag in Q3 at San Jose

2009-10-08 11:44 ET - News Release

Mr. Helen Bilhete reports

MINERA ANDES ANNOUNCES THIRD QUARTER 2009 SAN JOSE MINE PRODUCTION

Minera Andes Inc. has provided the San Jose mine production results for the third quarter of 2009. During the third quarter, the San Jose mine produced 1,402,000 ounces of silver and 22,470 ounces of gold, of which 49 per cent is attributable to Minera Andes.

Compared with the second quarter of 2009, the third-quarter 2009 silver production was 11 per cent higher and gold production was 24 per cent higher. The increase in silver and gold production was the result of a higher mill-feed tonnage and head grades for both silver and gold, and higher processing recovery rates. Mill throughput in the third quarter of 2009 was 3 per cent higher than the level of the previous quarter. Compared with the third quarter of 2008, the third-quarter 2009 silver production increased 42 per cent and gold increased 82 per cent due to the increased production rate associated with the expansion program completed in the fourth quarter of 2008.

SAN JOSE MINE PRODUCTION COMPARISON

Production (i)                 Third-quarter Second-quarter Third-quarter
                                       2009        2009        2008

Ore production (tonnes)              122,342     119,184      67,589
Average head-grade silver
(grams per tonne)                        407         400         547
Average head-grade gold      
(grams per tonne)                       6.65        5.65        6.78
Silver produced (ounces)           1,402,000   1,265,000     990,000
Gold produced (ounces)                22,470      18,080      12,340
Net silver sold (ounces)           1,783,000   1,709,000     846,000
Net gold sold (ounces)                28,140      21,930       9,760

(i) 49 per cent of the San Jose mine production is attributable to Minera Andes.

Third-quarter production cost information will be provided when available in a subsequent news release.

Sales of silver and gold were respectively 4 per cent and 28 per cent higher in third quarter of 2009 compared with the second quarter as a result of the higher production and a products inventory decrease. In comparison with the same quarter last year, sales of silver and gold in third quarter of 2009 were respectively 110 per cent and 188 per cent higher because of the increased production and a products inventory reduction.

Product inventories were reduced substantially by the end of the third quarter compared with the end of the second quarter of 2009.

          SAN JOSE MINE PRODUCT INVENTORY COMPARISON

                                           Third-quarter  Second-quarter
                                                    2009        2009

Concentrate (tonnes)                                 347         992
Dore (kilograms)                                   2,481       3,935
Precipitate (kilograms)                            3,865       3,994
Total contained silver in all products (ounces   199,500     424,400
Total contained gold in all products (ounces       3,480       6,960

Note: 49 per cent of the San Jose mine inventories is attributable to Minera Andes.

The third quarter marks the first complete quarter of full production from the mine, now that underground production has commenced in the Kospi vein. At the present time, nearly all of the production is being derived directly from underground mining, and the operation is no longer relying on low-grade surface stockpile material to provide mill feed.

Operations at San Jose have returned to normal after a series of labour stoppages. A total of five days of operation were lost during the third quarter due to these stoppages. Hochschild Mining PLC, which is the operator at San Jose, continues to work closely with employees and unions to ensure good relations at the operation.

This news release is submitted by James K. Duff, chief operating officer of Minera Andes.

Reliability of information

Minera Santa Cruz SA, the owner of the San Jose mine, is responsible for and has supplied to the corporation all reported results from the San Jose mine. This news release is based entirely on information provided to Minera Andes by Minera Santa Cruz (MSC). Minera Andes's joint venture partner, a subsidiary of Hochschild Mining PLC, and its affiliates other than MSC, do not accept responsibility for the use of project data or the adequacy or accuracy of this news release. As the corporation is not the operator of the San Jose mine, there can be no assurance that production information reported to the corporation by MSC is accurate. The corporation has not independently verified such information and readers are therefore cautioned regarding the extent to which they should rely upon such information.