SPOKANE, Wash., Oct. 7, 2004 (PRIMEZONE) -- Minera Andes Inc.'s (TSX Venture Exchange:MAI) (OTCBB:MNEAF) advanced-stage San Jose silver/gold exploration and construction project continues on the road to production with the awarding of contracts to the engineering firms working on a "bankable" feasibility study. This study will be used to enable a final development decision in early 2005 and to support solicitation of project debt financing from international banking groups.
At the Huevos Verdes vein, part of the San Jose project, a crew of over 100 people is completing development of the underground workings intended to explore the high-grade vein and convert the existing high-grade silver/ gold resource estimate to a reserve estimate to support mine design work as part of the feasibility study. In addition, the feasibility study, commissioned at a cost of US$1.9 million, is planned for completion in the first quarter of 2005.
Allen V. Ambrose, president of Minera Andes, said "The building of a project engineering team and assignment of tasks for completion early next year reflects the fact that this promising project is progressing rapidly. In anticipation of completing the feasibility study early next year we have begun the process of talking with banks to shorten the project finance process assuming the study results will be positive and support a production decision."
The goal of the feasibility study is to provide baseline, geologic, engineering and economic studies on Huevos Verdes, a high-grade, epithermal, vein-hosted silver/gold system in Santa Cruz province, southern Argentina. The completed feasibility study will include ore reserve estimation and corresponding, mine design and production schedule, metallurgy and process design, project infrastructure design, development of environmental management and permitting programs, and development of overall project capital and operating costs and economics. This work is planned for completion in early 2005 and is under the management of MTB Project Management Professionals Inc. of Denver hired earlier this year by the joint venture company, Minera Santa Cruz (owned 51% by Mauricio Hochschild & Cia. Ltda. of Lima, Peru (MHC) and 49% by Minera Andes).
Advanced-stage exploration and construction is presently underway at Huevos Verdes by Minera Andes' operating joint venture partner. About 3,500 meters of underground workings are being developed and are due for completion in early 2005. Two shafts have been completed and various surface facilities are in place. A 28 km all-weather road and bridge access the work site. Project employment is projected to peak in October/November at 166.
Feasibility study engineering, resource estimation and mine design work is being conducted by AMEC Plc, an international project management and engineering services company. AMEC is widely recognized by international finance institutions.
Environmental socioeconomic and permitting activities are being led by Vector Argentina a subsidiary of Vector Engineering, an engineering consulting firm. Another subsidiary, Vector Peru, will complete hydrogeological and geotechnical studies relating to water wells, mine service roads and mining and process facilities siting.
Huevos Verdes is Minera Andes' most advanced project and is located in the San Jose project, a 98,800-acre mining district-size region with about ten other known gold/silver targets at earlier stages of exploration. Currently, four veins totaling about 32 km of strike length have been identified at San Jose. Only 2.2 km of the Huevos Verdes vein system has been drill-tested, or less than half of its presently known 5 km of strike length. The mineralization at Huevos Verdes is open at depth and laterally.
Minera Andes is funded with working capital of approximately US$4.0 million for its exploration and underground construction programs. Minera Andes is a mining exploration company focused on gold, silver and copper exploration in Argentina where it holds about 200,000 hectares (500,000 acres) of mineral exploration land and co-owns the advanced stage San Jose silver/gold project. Minera Andes has also discovered an enriched copper zone at its Los Azules property, and is acquiring other exploration targets in southern Argentina. The Corporation presently has 70,442,990 issued and outstanding shares.
For further information, please contact: Art Johnson at the Spokane office, or Krister A. Kottmeier, investor relations - Canada, at the Vancouver office. Visit our Web site: www.minandes.com.
FORWARD-LOOKING STATEMENT- Although Minera Andes believes many of its properties have promising potential, its properties are in the early stages of exploration. None have yet been shown to contain proven or probable mineral reserves. There can be no assurance that such reserves will be identified on any property, or that, if identified, mineralization may be economically extracted. In addition, Minera Andes' joint venture partner, Mauricio Hochschild & Cia. Ltda., does not accept responsibility for the use of project data or in the adequacy or accuracy of this release.
CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF INFERRED RESOURCES:
This news release uses the term "Inferred Resources." We advise U.S. investors that while this term is recognized and required by Canadian regulations, the SEC does not recognize it. "Inferred Resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an "Inferred Resource" will ever be upgraded to a higher category. Under Canadian rules estimates of "Inferred Resources" may not form the basis of feasibility or other economic studies. U.S. INVESTORS ARE CAUTIONED NOT TO ASSUME THAT PART OR ALL OF AN "INFERRED RESOURCE" EXISTS, OR IS ECONOMICALLY OR LEGALLY MINABLE.
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.