Gold/Silver Production Increases

SPOKANE, WA - Minera Andes Inc. reported on the San Jose mine production to December 31, 2008. The San Jose joint venture is operated by Minera Santa Cruz S.A. ("MSC") and is owned 49% by Minera Andes and 51% by Hochschild Mining plc. Total production at the San Jose mine in 2008 was 4,380,000 ounces of silver and 54,260 ounces of gold.
Production at the San Jose mine, in Argentian, in Q4 2008 totaled 1,329,000 ounces of silver and 17,370 ounces of gold, of which 49% is attributable to Minera Andes. Mill throughput increased 60% compared to the previous quarter due to the plant expansion completed in October. Silver production was 34% higher and gold production was 41% higher than the previous quarter due to higher tonnage treated which was partially offset by lower head grades.
The San Jose mine entered into commercial production on January 1, 2008, and a project to double the original design capacity of the processing plant from 750 metric tonnes per day was completed in October 2008. Mill production has now been ramped up to the capacity of 1,500 metric tonnes per day, and December 2008 marked the first full month of production at the expanded capacity rate. Approximately half of the concentrate produced by the mill is converted on site to dore bullion.
Operational milestones accomplished in the fourth quarter include:
    -   Completion of the increase in processing capacity to 1,500 MTPD and
        most of the related ancillary works.
    -   Commissioning problems with the dore furnaces were resolved, which
        allowed the precipitate in inventory to be processed into dore
        bullion.
    -   Improvements in the quality of the dore through improved precipitate
        filtration.
    -   Re-routing the Kospi ramp in order to alleviate difficult ground
        conditions.
The increased production volume and connection to the national power grid, which is forecast to be completed in the first quarter of 2009, should enable a significant reduction in unit operating costs in 2009. MSC forecasts that at the expanded production rate, the San Jose mine will produce approximately 95,000 ounces of gold and 7,500,000 ounces of silver in 2009.
The San Jose mine now comprises 18 km of underground workings accessed by ramps on the Huevos Verdes, Frea and Kospi veins. During 2008, 5,187 meters of workings were completed on these three veins. The mine is currently staffed with 734 employees and over 200 contractors.
The companyÕs address is 111 East Magnesium Road; Ste. A, Spokane, WA 99208, (509) 921-7322, fax: (509) 921-7325, email: [email protected].