San Jose Mine First Quarter Production

 

SPOKANE, WA - Minera Andes Inc. reported details of the San Jose mine production for the first quarter of 2009. The San Jose project is owned by Minera Santa Cruz S.A. ("MSC"), which in turn is owned 49% by Minera Andes and 51% by Hochschild Mining plc ("Hochschild"). Hochschild is the operator of San Jose. Production for San Jose in the first quarter (on a co-product basis) totaled 1,299,000 ounces of silver at a cash cost of $4.99 per ounce and 16,560 ounces of gold at a cash operating cost of $357 per ounce, of which 49% of the production is attributable to Minera Andes.

The San Jose gold/silver mine saw a decrease in gold and silver production and a significant lowering of unit operating costs in Q1 2009 compared to Q4 2008 as reported by MSC to the owners. Silver production was 2% lower and gold production was 5% lower in Q1 2009 compared to the previous quarter, because approximately 20% of the mill feed was derived from low-grade surface stockpiles. This was partially offset by the higher tonnage being treated in the current quarter. Unit operating costs were lower due to increased production and the economies of scale associated with the processing capacity expansion completed in Q4 of 2008.

Work is underway to also increase mine production from 750 MTPD to 1,500 MTPD, primarily by accessing the Kospi vein, located between the Huevos Verdes and Frea veins which are the source of the current production. Production from the Kospi vein is anticipated to commence during the second quarter of 2009. In the meantime, mill feed is being generated from expanded mine production at the Huevos Verde and Frea veins and from a surface stockpile of low-grade ore.

The company’s address is 111 East Magnesium Road; Ste. A, Spokane, WA 99208, (509) 921-7322, fax: (509) 921-7325, email: [email protected].