SPOKANE, Wash., May 14, 2003 (PRIMEZONE) -- Construction and underground exploration has begun on Minera Andes' (TSX Venture Exchange:MAI) (OTCBB:MNEAF) Huevos Verdes high-grade gold/silver vein on the San Jose property, Santa Cruz province, southern Argentina. This marks another milestone in the project's development and is another step toward realizing Minera Andes' goal of quickly becoming a producing precious metals mining company with a sustaining operational cash flow.
The work being undertaken by Mauricio Hochschild & Cia. Ltda. ("MHC") of Lima, Peru, Minera Andes' joint venture partner, includes the sinking of two 45-degree angle decline shafts and the construction of tunnels or galleries on two levels of the main Huevos Verdes vein. The immediate objective is to define a mineable ore reserve through bulk sampling and drilling on these two levels. This is an essential step prior to considering the mine development decision. It is estimated that the length of the galleries that will permit exploration along the vein will initially be approximately 2,270 meters (about 7,500 feet).
During the past several months, surface work has been completed in preparing the site for the underground exploration program. Land has been purchased from private land owners, right-of-way agreements have been obtained, and a 27-kilometer all-weather road is presently under construction to provide year-round access to the mine site.
MHC is now in the third year of the Option and Joint Venture Agreement with Minera Andes that covers the 40,000-hectare (98,800 acres) San Jose land package including the Huevos Verdes development project. MHC has now submitted a "notice of vesting" under the terms of the Option and Joint Venture Agreement. Minera Andes' management is pleased with this early notice by MHC which speaks to the success of exploration on the property and a commitment to its development. This exploration success will support the project's rapid progress through the present phase of underground construction, with continued exploration of the ore reserve mineralization which is open at depth.
Allen Ambrose, president of Minera Andes said, "We are very pleased with the progress that MHC has made at Huevos Verdes and are heartened by their decision to exercise their option to vest. This places the project further along the road to a final production decision. The recent exploration successes add to our optimism that the resource at Huevos Verdes has the potential to expand considerably as further exploration work is completed."
Separately, Minera Andes is completing an audit the of US$3million work program expenses submitted by MHC. On vesting, MHC has a 51 percent ownership in San Jose while Minera Andes retains a 49 percent interest. MHC now enters a 30-day period to submit a program and capital budget for an ore processing plant. It is Minera Andes' intention to exercise its rights to maintain its 49% interest through development and production of the mine that is expected to be successfully completed at San Jose.
Huevos Verdes is one of nine known geologic anomalies in the San Jose land package, a 40,000-hectare (98,800 acres) area in Santa Cruz province. An independently calculated resource estimate, based on 2.2 km of drilled strike length, determined the Huevos Verdes project has an indicated resource of 12,800,000 ounces of silver and 128,000 ounces of gold, and an inferred resource of 21,917,000 ounces of silver and 216,000 ounces of gold. These initial quantities are based on an indicated 1,856,000 tonnes of material grading 214.5 g/t silver and 2.1 g/t gold. An additional 2,689,000 tonnes of material grading 253.5-g/t silver and 2.5 g/t gold is classified as inferred. These resources are reported above a cutoff grade of 50-g/t silver. Mineralization at the Huevos Verdes project remains open at depth and along strike.
Minera Andes is a mining and exploration corporation focused on Argentina. It presently controls 10 other projects with approximately 198,000 hectares (approximately 489,000 acres) of mineral exploration land in Argentina. Most of these properties are located in the Andean cordillera are primarily gold, silver and copper mineralization targets. The Corporation is actively addressing its options to commence additional exploration activities while pursuing the further development of its gold/silver discovery property in Santa Cruz province. The Corporation presently has 37,009,197 issued and outstanding shares.
For further information, please contact: Art Johnson, at the Spokane office, or Krister A. Kottmeier, investor relations at our Vancouver, Canada office. Visit the Web site: www.minandes.com.
Spokane Office Vancouver Office 3303 N. Sullivan Road 1000-355 Burrard Street Spokane, WA 99216 USA Vancouver, B.C. V6C 2G8 Phone: (509) 921-7322 Phone: (604) 689-7017; 877-689-7018 E-mail: mineraandes@minandes.com E-mail: ircanada@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.