Andean Resources into more gold and silver at Cerro Negro

Vancouver – For Andean Resources (AND-T, AND-A) recent drilling has cut significant grades of gold and silver at both old and new targets on the Cerro Negro property in the province of Santa Cruz, Argentina.

A roving drill-rig discovered high-grade gold at the previously undrilled Bajo Negro target.

All five drill-holes that Andean Resources collared at Bajo Negro returned gold grades ranging between 3 and 18 grams gold per tonne over intersect widths of between 1 and 7 metres.

At the northern extent of drilling hole 901 hit 3 metres grading 5.1 grams gold and 13 grams silver per tonne starting 113 metres down-hole. Hole 905, 300 metres to the south of hole 901, cut 7 metres grading 8.6 grams gold and 16 grams silver starting at a depth of 104 metres.

About mid-way between those two holes, hole 904 returned several other significant intersects which included 2 metres grading 17.67 grams gold starting 95 metres down-hole and 6 metres grading 11.8 grams gold starting 111 metres downhole.

Since it appears that the Bajo Negro zone, which runs at least 300 metres northwest to southeast, is open at depth and along strike Andean Resources says it plans on drilling further holes at the new prospect.

On the silver front Andean Resources cut significant silver grades in a series of holes drilled at the Mariana Sur zone, about 5 km west of Bajo Negro.

Hole 804 for example hit as much as 1 metres grading 2,082 grams silver starting 122 metres down-hole. Other holes cut grades and widths closer to that of hole 802 which returned 1 metres grading 328 grams silver starting at a depth of 47 metres below surface.

There was also good news at the much better known Eureka gold-silver area, 13 km to the west of Bajo Negro, for which Andean Resources is working on a feasibility study of an underground gold-silver mine.

At the Eureka West zone drilling continues to expand gold and silver mineralization at depth and to the west.

The most westerly hole drilled to date, hole 939, hit 12 metres grading 12.3 grams gold and 71 grams silver starting at a depth of 421 metres below surface. Further to the east and at depth Hole 444 returned 6 metres grading 10.3 grams gold and 122.5 grams silver starting 408 metres down-hole.

The drilling is part of Andean Resources efforts to update a year-old resource estimate for the Eureka area. The company has so far pegged Eureka at 2.5 million indicated tonnes grading 12.88 grams gold and 235.26 grams silver for 1 million contained ounces gold and 18.8 million oz. silver.

The new resource estimate, which will include several targets beyond Eureka West for the first time, is to form the basis of Andean Resources’ feasibility study of the Cerro Negro project.

In a prefeasibility study the company had envisioned both an open-pit and an underground mine. But, citing savings on capital costs, in January Andean Resources said the feasibility would only consider development of an underground mine at Eureka.

The plan as outlined in the prefeasibility study would have cost US$281 million and churned out 350,000 oz. gold a year from a 4,000-tonne-per-day mill.

On news of the drill results Andean Resources’ share price dropped 7¢ to close at $1.31. The company has 402.1 million shares outstanding.