Andean American drilling expands gold zone at Invicta

Vancouver – Initial drilling by Andean American Mining (AAG-V, ANMCF-O) at its Invicta project in west-central Peru has returned a significant mineralized interval.

Core hole AE-DDH-06-56 cut 34.6 metres (from 124 metres downhole depth) averaging 5.2 grams gold per tonne, 45.4 grams silver per tonne and 1% copper, including a 7.3-metre interval of 13.8 grams gold, 140 grams silver and 3% copper in mineralized breccia zones composed of quartz, pyrite, chalcopyrite, hematite, galena and minor sphalerite.

The hole has Andean American excited with its potential to add to the project’s resource base. Earlier this year, an indicated resource of about 2.8 million tonnes grading 3.4 grams gold, 16.45 grams silver, 0.37% copper, 0.5% lead and 0.44% zinc was estimated (using a 1 gram gold cut-off) at Invicta, hosted in the Atenea vein structure. Further inferred resources of 2.4 million tonnes at 2.8 grams gold, 37.4 grams silver and 1% copper were also reviewed.

Andean American acquired its option on the advanced, prefeasibility-stage project from a Barrick Gold (ABX-T, ABX-N) subsidiary in late 2005. The agreement grants the junior the option to acquire 100% interest for cash and shares totaling US$700,000 within the first year, followed by annual advanced royalties payments of US$100,000 to Barrick upon exercising its option plus a lump sum payment of US$800,000 on commencement of production. Barrick retains a 1% NSR, capped at US$1 million, and a back-in right to acquire up to 51% interest should Andean American delineate more than 2 million contained ozs. of gold in proven and probable reserves.

Mineralization on the project occurs in an epithermal breccia environment within volcanic and intrusive assemblages, and is hosted in veins, fracture fillings and stockworks. The deposit shows a metal zonation with gold decreasing and base metals increasing with depth.

In addition to Invicta, Andean American operates its Santa Rosa gold-silver mine in southern Peru and holds the Sinchao gold-silver-copper deposit in northern Peru.