Andean American sells first gold from Santa Rosa

Junior Andean American Mining (AAG-V) has delivered the first 7.8 kg of gold for refining from the pilot plant at the Santa Rosa project.

The gold sold for US$282.60 per oz., and represents the first commercial transaction for operating revenues in the Vancouver-based company’s history. Silver receipts will be finalized October 20. Larger sales are expected on a weekly or bi-weekly basis.

Andean says the production of the concentrates resulted in normally anticipated disruptions to the adsorption-desorption plants.

Since mid-August, the pilot plant has been running continuously at a daily rate of about 500 tonnes. The junior feels that with adjustments to the operations, including the addition of in-pit vibratory screening, in-pit ripping, adding a three-inch-and-less circuit direct from pit to secondary crusher and quadrupling of carbon-in-column capacity, production should reach 1,200-to-1,400 tonnes per day.

Resources at Santa Rosa currently stand at 1.5 million tonnes grading 3.85 grams gold and 56.4 grams silver per tonne, giving a pilot plant life of 4.5 years at 1,000 tonnes per day. The company is confident that on-going exploration will not only increase the life of the operation but also boost the grade to between 7 and 9 grams gold. The increase is due to better control of operations and sampling than that carried out by previous companies in the mid-1990s.

Earlier this year, Placer Dome (PDG-T) inked a deal with Andean to earn a majority interest in the surrounding ground. Under an option agreement, Placer can earn an initial 55% interest in the property by spending US$3.6 million on exploration and paying US$2.2 million through to January 2004.The major can increase its interest to 60% by proceeding with a feasibility study. By funding the study, it can boost its interest to 70%.

Situated 120 southwest of the city of Cuzco, Santa Rosa consists of 20 concessions covering 13,340 ha. Placer Dome has identified more than 15 targets within a structural trend measuring 15 by 4 km. Andean American has excluded the mine area from its agreement with Placer. However, if the major makes a production decision, Andean will include the zone.