Andean American expands gold zone at Invicta

Vancouver — Initial drilling by Andean American Mining (AAG-V, ANMCF-O) at its Invicta gold-silver-copper project in west-central Peru has returned a significant mineralized interval.

Core hole AE-DDH-06-56 cut 34.6 metres (from 124 metres depth) averaging 5.2 grams gold per tonne, 45.4 grams silver per tonne and 1% copper, including a 7.3-metre interval of 13.8 grams gold, 140 grams silver and 3% copper in mineralized breccia zones composed of quartz, pyrite, chalcopyrite, hematite, galena and minor sphalerite.

The hole has Andean American excited about the potential to add to the project’s resource base. Earlier this year, an indicated resource of about 2.8 million tonnes grading 3.4 grams gold, 16.45 grams silver, 0.37% copper, 0.5% lead and 0.44% zinc was estimated (using a 1-gram gold cutoff) at Invicta, hosted in the Atenea vein structure. Further inferred resources of 2.4 million tonnes at 2.8 grams gold, 37.4 grams silver and 1% copper were also reviewed.

Andean American acquired its option on the advanced, prefeasibility stage project from a Barrick Gold (ABX-T, ABX-N) subsidiary in late 2005. The agreement grants the junior the option to acquire a 100% interest for cash and shares totalling US$700,000 within the first year, annual advanced royalties payments of US$100,000 to Barrick upon exercising its option, and a lump sum payment of US$800,000 on the start of production. Barrick retains a 1% net smelter royalty, capped at US$1 million, and a back-in right for up to a 51% stake should more than 2 million contained ounces gold be delineated in proven and probable reserves.

Mineralization on the project occurs in an epithermal breccia environment within volcanic and intrusive assemblages, and is hosted in veins, fracture fillings and stockworks. The deposit shows a metal zonation with gold decreasing and base metals increasing with depth.

In addition to Invicta, Andean American operates its Santa Rosa gold-silver mine in southern Peru and holds the Sinchao gold-silver-copper deposit in northern Peru.