VANCOUVER, BC, July 31, 2002 (PRIMEZONE) -- Andean American Mining Corp. (TSX Venture Exchange:AAG) is pleased to provide this update on financial results for the year ended March 31, 2002.
Statement of Operations
For 12 months ended March 31, 2002
2002 2001
$ $
Revenue from Gold Sales 183,664 --
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Cost of Sales 131,871 --
Depreciation and Depletion 21,689 --
Reclamation 2,849 --
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156,406 --
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Income from Mining Operations 27,258 --
Administrative Expenses 763,540 525,536
Other Expenses (Income) 24,270 (4,582)
Interest and Finance Charges 473,567 600,923
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Net Income (Loss) for the Year (1,234,119) (1,121,877)
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Loss per Share $0.06 $0.10
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Administrative expenses for the year ended March 31, 2002 were $763,540 compared to $525,536 during the prior year, an increase of $238,004. The increase is primarily due to an increase of $41,975 in office rent, parking, and maintenance, $87,447 in salaries and wages, $47,409 in shareholder communications. Interest and financing charges for the year ended March 31, 2002 were $473,567 compared to $600,923 for the year ended March 31, 2001. Partway through the year, the holders of Series AC debentures converted their debentures into common shares of the Company. As a consequence, interest was only payable for a portion of the year.
During the year ended March 31, 2002, the Company developed and constructed a heap leach facility to extract gold from a small portion of its Santa Rosa property in Peru. Gold extraction and sale from this facility commenced in limited quantities in August 2001. By March 2002, production rates had increased and stabilized sufficiently that the Company declared the commencement of commercial production to be in March 2002. All costs and revenue to February 28, 2002, the start up period, have been charged (credited) against development costs. Operating results only reflect operating activities at the mine site for the month of March.
In the first month of commercial production, the Company recorded revenue of $183,664 from 381.60 ounces of gold realizing Cdn$481.30 per ounce. Revenue is recognized when production is received by the smelter. Related costs of sales for this period were Cdn$345.57 per ounce. While the operating profit from mining operations was not a significant number, this represented a significant milestone in the Company's development. The Company was able to overcome substantial hurdles and bring the Santa Rosa mine on stream. The quarterly financials for the period ended June 30, 2002 should be available in early August.
Andean American's objective is to create shareholder value through low cost mine development. At Santa Rosa, through higher process rates and continued process refinements the aim is to have production costs in the lowest quartile for the industry. The mine is now in commercial production and this is seen as a realistic goal as Peru is host to two of the world's lowest cost producers of gold, Yanacocha and Pierina -- both of which are high altitude heap leach operations.
To find more about Andean American Mining Corp. (TSX:AAG) visit our website at www.andeanamerican.com.
For further information, please contact John Devlin at 1-866-885-0484 and jdevlin@andeanamerican.com or the Company at (604) 681-6186 or toll free 1-888-356-4784 and email info@andeanamerican.com
On behalf of Andean American Mining Corp., "John Huguet" John Huguet President & CEO
This news release may contain forward-looking statements regarding upcoming work programs and events. Actual results may differ materially from those anticipated in such statements. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.