Minera Andes gets feasibility thumbs up on San Jos

Vancouver – The long awaited feasibility study on Minera Andes’ (MAI-V) San Jos gold-silver deposit, in southern Argentina’s Santa Cruz province, indicates positive economics for development of the Frea and Huevos Verdes veins.

The study, conducted by MTB Project Management Professionals and AMEC Engineering, reviews proven and probable reserves of almost 1.2 million tonnes grading 7.7 grams gold per tonne and 406 grams silver per tonne (containing 288,000 oz. of gold and 15.2 million oz. of silver). Using assumed gold and silver prices of US$425 and US$6.50 per oz. respectively, the project would deliver a projected 12.5% internal rate of return (IRR). At current metal prices, the IRR buoys to about 26.1%.

Start-up capital expenditures are estimated at US$61.2 million with a 14-month construction period. In fact, Minera Andes has already completed over 4 km of underground workings, and has advanced on infrastructure including constructing a camp for 330 workers. The proposed 750-tonne-per-day underground operation is expected to produce almost 61,000 oz. of gold and 3.1 million oz. of silver annually over a 4.3 year mine life.

Minera Andes president Allen Ambrose commented, “we commissioned the feasibility study to identify the reserve base required to obtain bank financing for the San Jos project.” The reserve calculation does not incorporate recent drill discoveries on other areas of the property. Ambrose continued, “we see this as the first step in fully developing the property. To date we’ve only drilled about 15% of the known vein trend.”

Both the Frea and Huevos Verdes veins will be mined using mainly mechanized cut and fill methods, feeding a crushing and grinding circuit followed by flotation, concentration, cyanide leach and Merrill-Crowe circuits. Over the planned mine life, total operating costs are estimated at US$200 per oz. of gold equivalent (using US$400 and US$6.50 per oz. for gold and silver respectively). Gold recoveries of 90.2% are estimated, along with 88.1% of the silver being extracted.

The 50 sq. km San Jos property hosts a series of northwest trending mineralized quartz veins, besides the Frea and Huevos Verdes covered in the feasibility study. Minera Andes has identified over 32 km of vein trend on the project, much of which is targeted for drilling. The two veins comprising the defined reserve are open to depth.

San Jos is held 49% by Minera Andes and 51% by project operator Mauricio Hochschild, a specialist in underground mining of vein-hosted metal deposits.

Minera Andes reports 90.8 million shares outstanding.