Los Azules copper project shows depth

Vancouver – The first hole from the summer drill program at the Los Azules copper porphyry project in Argentina returned a long mineralized intercept for Minera Andes (MAI-T) and joint venture partner Xstrata Copper, the copper division within Xstrata (XSRAF-O, XTA-L).

Hole 30 returned 201 metres grading 0.89% copper after 123 metres of leached cap rock and included 113 metres grading 1.04% copper. The drill hole was collared near the northeast corner of the drilled area, close to what the company thought was the boundary of the mineralized system. Finding a long, well-mineralized intercept indicates the system is larger than originally thought and it is still open in several directions and at depth.

Minera Andes is advancing the Los Azules project as project operator under an option agreement signed with Xstrata in late 2007 that consolidated into one package adjoining properties straddling a large porphyry system. Mindera Andes has the right to earn a 100% interest in Xstrata’s property by producing a preliminary assessment. If the assessment shows Los Azules has the potential to economically produce 200 million lbs. copper per year for at least ten years, Xstrata gets the right to earn a 51% interest in the combined properties.

The project’s potential increased significantly last year when Minera Andes drilling discovered an area of near surface, high grade mineralization in hole 19, which returned 221 metres grading 1.62% copper. Several nearby holes returned intercepts of similar length averaging around 1% copper and ending in mineralization.

The current program at Los Azules is designed to define an inferred resource. The company also hopes to complete an economic scoping study for the property by the end of the fourth quarter.

Minera Andes also owns 49% of the producing San Jose mine in southern Argentina, which is run by Minera Santa Cruz. Hothschild Mining (HOC-L) owns the other 51% of the operating company. The mine started commissioning in the fall of 2007 and is expected to reach its full operational capacity 750 tonnes per day in the next few months. The mine is expected to produce 64,000 oz. gold and 3.9 million oz. silver per year. Average cash operating costs are $94 per tonne of ore processed.

Minera Andes has developed roughly 11 km of underground workings at the mine, as well as the associated infrastructure. The processing facility uses a Gekko gravity-flotation-intensive-leaching process followed by direct electrowinning and resin column absorption for the production of a gold-silver dore product. Power is supplied by four diesel generators.

The Kospi, Frea, and Huevos Verdes veins host San Jose’s defined mineral reserves, which totaled 2.4 million tonnes grading 6.79 grams gold per tonne and 430 grams silver per tonne as of July 2007. Measured and indicated resources stand at 2.4 million tonnes grading 7.91 grams gold and 500 grams silver; inferred resources add 230,000 tonnes grading 7.8 grams gold and 452 grams silver.

Recent drill results are showing the potential to increase San Jose’s reserves. In late 2007 drilling defined 2.8 km of strike length along the Odin and Avelen veins, which lie parallel to the main vein structures offset less than 1 km to the northeast, including several high grade intercepts.

At Odin, the vein has been traced for 1,600 metres and to a depth of 200 metres. Some of the better intercepts of late include hole 368, which returned 3.2 metres from 101 metres depth grading 10.57 grams gold per tonne and 244 grams silver per tonne including 0.46 metre of 34.43 grams gold, and hole 398, which cut 0.5 metre grading 6.3 grams gold and 1,074 grams silver from 220 metres depth.

The Avelen vein structure has been traced over a 1,200-metres strike length and to 200 metres depth. At Avelen hole 397 intercepted 1 metre grading 28.22 grams gold and 1,759 grams silver from 187 metres depth. Hole 412 cut 5.1 metres grading 7.1 grams gold and 382 grams silver from 135 metres depth, including 1.7 metres grading 15.41 grams gold and 461 grams silver, and hole 385 returned 9.3 metres grading 4.1 grams gold and 248 grams silver from 106 metres downhole, including 1.5 metres grading 11.95 grams gold and 240 grams silver.

And the project’s exploration potential remains considerable. San Jose hosts 40 km of vein trend target, of which less than 15% has been explored to date.

Minera Andes has had success raising capital of late. In December and January the company closed two tranches of private placement, bringing in proceeds of $33.6 million. On news of the Los Azules drill intercept the company’s share price gained 3 to close at $1.60. Minera Andes has a 52-week trading range of $1.10 to $2.64 and has 189.3 million shares issued.