Andean Resources expands Bajo Negro gold-silver mineralization

Vancouver – Andean Resources‘ (AND-T, AND-A) latest drill hole results extend gold-silver mineralization at depth and along strike in both directions at the Bajo Negro target on the company’s Cerro Negro property in Argentina.

“The mineralization is open in both directions, but is especially promising to the north-west, where the vein is branching into several splays, with two of these splays containing high gold grades,” stated Dave Shatwell, Andean Resources’ chief exploration geologist on the Cerro Negro project, 110 km northeast of the Argentinian town of Las Heras.

Andean Resources has two drill rigs operating at Bajo Negro, a gold-silver target within a dozen or so kilometres of the company’s two chief gold-silver zones on the property: Eureka West, 13 km to the east, and the Vein zone, 2 km to the southwest.

At Bajo Negro four drill holes extend mineralization 75 metres to the northwest within two major splays that have piqued the interest of Andean Resources. For example, hole 935 hit 6 metres grading 34.8 grams gold per tonne and 29 grams silver per tonne starting 142 metres downhole and 10 metres grading 14.2 grams gold and 38 grams silver starting 183 metres downhole.

Likewise hole 937 intersected 10 metres grading 22.1 grams gold and 30 grams silver starting 267 metres downhole and then 6 metres grading 17.7 grams gold and 20 grams silver starting 285 metres downhole.

Drilling to the southwest extended mineralization 50 metres. Hole 936 hit 3 metres grading 5.6 grams gold and 7 grams silver and hole 938 returned 3 metres grading 17 grams gold and 13 grams silver. Both intercepts started at just under 200 metres downhole.

Within the previously defined gold-silver mineralized area at Bajo Negro Andean Resources pushed mineralization at depth with, for example, hole 925 hitting 9 metres grading 22.1 grams gold and 42 grams silver.

So far mineralization has been defined along about 800 metres of strike and the company says mineable widths and grades can be inferred along 650 metres of that and over a vertical extent of at least 150 metres.

The two drill rigs that Andean Resources has dedicated to Bajo Negro will continue to turn throughout the winter and additional drill rigs will begin to target other areas on the property including the Eureka zone starting in September, the company says.

Andean Resources’ prefeasibility study of the Cerro Negro project has pegged the probable reserves of Eureka West and the Vein zones at 7.2 million tonnes grading 6.4 grams gold and 75 grams silver, or 1.5 million contained oz. gold and 17.3 million contained oz. silver.

In the prefeasibility study Andean Resources envisaged a 4,000-tonne-per-day operation at Cerro Negro. Half the tonnage would come from a Vein zone open pit while the other half would come from an underground mine at Eureka West. The proposed project has a six-year mine life and would produce 350,000 oz. gold and 3 million oz. silver a year.

With cash costs of US$198 per oz. gold net of silver credits and provincial and federal royalties, capital expenditures of US$281 million and based on US$800 per oz. gold and US$13 per oz. silver, Cerro Negro showed an internal rate of return of 40% and a net present value of $203 million, discounted at 8%.

On news of the drill results from Bajo Negro Andean Resources’ share price gained 3¢ to $1.80. Andean Resources has about 402 million shares outstanding.