VANCOUVER, British Columbia, Aug. 12, 2002 (PRIMEZONE) -- Andean American Mining Corp. (TSX Venture Exchange:AAG) is pleased to provide this update on financial results for the quarter ended June 30, 2002.
This is the second consecutive quarter the Company has had operating income from the Santa Rosa mine. Although measured against a humble beginning, the quarter over quarter comparisons are indicative of significant improvements on the income statement in sales (up over 400%) and earnings from operations (up over 800%). The quarter still shows an overall loss for the period of $120,458 Canadian (down over 50% on a comparison to the quarter ending June 30, 2001), but equally humble at less than 0.004 cents Canadian per share.
The significant balance sheet items for the quarter are:
-- Current assets increased by $558,365 including over 4,000 ounces
of gold recorded at cost of production
-- Plant and equipment assets increased by $417,251
-- Liabilities decreased by $155,735
-- Shareholders equity increased by $991,448
INCOME STATEMENT
FOR THE THREE MONTHS ENDED JUNE 30, 2002 AND 2001
2002 $ 2001 $
SALES OF GOLD 760,468 -
COST OF SALES 422,649 -
DEPRECIATION AND DEPLETION 92,308 -
RECLAMATION 2,484 -
517,441 -
EARNINGS FROM MINING OPERATIONS 243,027 -
ADMINISTRATIVE EXPENSES
Administrative and management
services 23,117 23,023
Bank charges 2,041 622
Depreciation 2,168 1,774
Investor relations 18,487 20,898
Office salaries and sundry 111,013 44,418
Office rent, parking, storage 17,224 22,100
Professional fees 19,210 4,898
Regulatory and transfer
agent fees 3,991 1,817
Shareholder communications 4,601 687
Telecommunications 5,571 4,676
Travel and accommodation 4,633 8,056
212,056 132,969
INCOME (LOSS) BEFORE OTHER ITEMS 30,971 (132,969)
OTHER ITEMS
$ $
Foreign exchange gain (loss) 28 (1,401)
Interest on long-term debt and
financing charges (151,457) (124,324)
Interest income - 95
(151,429) (125,630)
LOSS FOR THE PERIOD (120,458) (258,599)
DEFICIT - BEGINNING OF PERIOD (15,888,407) (14,903,618)
DEFICIT - END OF PERIOD (16,008,865) (15,162,217)
BALANCE SHEET
As at June 30, As at March 31,
2002 $ 2002 $
A S S E T S
CURRENT ASSETS
Cash 106,944 58,314
Accounts receivable 58,271 33,816
Inventories 1,121,095 635,815
1,286,310 727,945
MINERAL PROPERTIES, DEFERRED
COSTS AND PLANT AND
EQUIPMENT (Note 3) 32,038,171 31,602,920
OFFICE EQUIPMENT 9,654 11,822
33,334,135 32,342,687
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued
Liabilities 1,469,888 1,610,008
Accrued interest payable 274,025 124,892
Current portion of debentures 3,975,896 4,100,000
Loans payable 1,355,023 1,398,151
7,074,832 7,233,051
DEBENTURES 950,702 950,702
PROVISION FOR RECLAMATION 5,330 2,846
8,030,864 8,186,599
S H A R E H O L D E R S'
E Q U I T Y
SHARE CAPITAL (Note 4) 41,312,136 39,892,686
SHARE SUBSCRIPTIONS RECEIVED - 126,143
DEFICIT (16,008,865) (15,862,741)
25,303,271 24,156,088
33,334,135 32,342,687
Production highlights for the quarter ended June 30, 2002 and the month ended July 31, 2002.
July's production improved again on June's and set a new standard for average grade for a month. During July, in fact, there was a 40% increase in grade and a 16% production increase over June resulting in a combined 65% increase in ounces produced for the month. Our priority has now shifted to enhanced recoveries. The trend is definitely improving with increased production and improved gold grade (42% lower cash cost July over June). The projected production for August and September should see continued improvement from increased production but will probably stay flat on grade or possibly diminish.
Commercial Production Costs (all in U.S.$)
Quarter ending June 30, 2002
April May June July
Tonnes produced 18,994 20,024 25,335 29,426
Head grade - Gold/ton 2.62 g 2.58 g 2.44 g 3.42 g
Costs per tonne $9.50 $9.47 $8.51 $8.50
Production costs $180,443 $189,627 $215,601 $252,475
Recoverable ounces
produced 1,115 1,158 1,363 2,255
Ounces shipped 440 555 631 758
Ounces inventoried 675 602 732 1,497
Cash cost/oz Gold $161,93 $163.75 $158.18 $111.96
After silver credits $158.15 $160.09 $153.33 $107.35
Non cash costs $44.54 $44.54 $44.54 $44.54
Total cost per ounce $202.69 $204.63 $197.87 $151.89
No. 2 Crusher Expansion Project
Testing of components has begun in the expansion for the ADR plant. The new crushing plant (Crusher # 2) should see testing in September. The start up curve will be gradual between September and calendar year end. This is later than planned due to revisions in the feed hoppers and chutes.
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 Venture Exchange: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.