Minera Andes Inc. (TSX:MAI)(OTCBB:MNEAF) has announced the results of an updated independent mineral resource estimate as at September 30, 2010 at the San José mine in Santa Cruz province, southern Argentina.
The contained silver in the Inferred Mineral Resources increased by 133% and the contained gold increased by 122% compared to the December 31, 2009 estimate as reported by the Corporation in its March 31, 2010 Annual Information Form. The increase is primarily due to the discovery of nine new veins as well as important extensions of previously known veins, as reported by the Corporation on October 7, 2010. An updated resource/reserve technical report on the San José mine will be filed on SEDAR in the near future.
The San José mine is operated by Minera Santa Cruz SA, a joint venture owned 51% by Hochschild Mining Argentina, a wholly owned subsidiary of Hochschild Mining plc, and 49% by Minera Andes S.A., a wholly owned subsidiary of the Corporation.
Rob McEwen, Chairman and CEO of Minera Andes, said:
"The big increase in the inferred silver and gold resources is terrific! It is the direct result of skilled geologists having a significantly higher exploration budget for a most prospective property. Our exploration goal is to meet and exceed the exploration success of Andean Resources' neigbouring Cerro Negro property."
At September 30, 2010, total Measured and Indicated Mineral Resources at the San José Mine were 651,000 ounces of gold and 44.2 million ounces of silver, contained in 3.0 million tonnes grading 6.81 grams/tonne (g/t) gold and 462 g/t silver, or 83.3 million ounces of silver equivalent. An additional 712,000 ounces of gold and 46.4 million ounces of silver, contained in 4.6 million tonnes, grading 4.87 g/t gold and 317 g/t silver, or 89.2 million ounces of silver equivalent, are classified as Inferred Resources. The mineral resources remain open along strike and at depth in some areas.
Mineral Resources- Contained Gold and Silver Metals
The September 30, 2010 resource estimate is an interim updated estimate, and a comprehensive updated resource and reserve estimate will be prepared for the year ending December 31, 2010 and released near the end of the first quarter of 2011. Details of the September 30, 2010 resources by vein are provided in Exhibit 1.
The September 30, 2010 resource estimate is net of 2010 mine production through September 2010, which was 323,398 tonnes at 6.68 g/t gold and 416 g/t silver. The new resources are a direct result of an increased emphasis on exploration at San José. Through the end of the third quarter of 2010, $5 million had been spent on exploration, and exploration for the fourth quarter is expected to be approximately $1.5 million.
This news release is submitted by James K. Duff, Chief Operating Officer of Minera Andes Inc.
The contents of this press release have been reviewed and approved by Eugene Puritch, P.Eng., President of P&E Mining Consultants Inc. ("P&E"), a Qualified Person under NI 43-101 "Standards of Disclosure for Mineral Projects" ("NI 43-101"). P&E are independent consultants to the Corporation.
The September 30, 2010 resource models were developed using industry-accepted methods by P&E. The resource estimate is based on drill hole data provided by our joint venture partner Hochschild Mining Plc and by MSC, the joint venture operating company as reported by the Corporation on October 7, 2010. All samples were collected in accordance with industry standards. All drill core samples were submitted to Alex Stewart Argentina S.A laboratory in Mendoza, Argentina for fire assay and ICP analysis. Accuracy of results is tested through the systematic inclusion of standards, blanks and check assays.
P&E constructed a wire frame block model to estimate the resource. P&E estimated 'existing' vein resources as of September 30, 2010 based on December 31, 2009 resources, depleted by January 1st to September 30th, 2010 mine production. 'New' Inferred Resources, (added during the period December 31, 2009 to September 30, 2010), were estimated by P&E using a gold price of US$925 per ounce (oz) and silver price of US$15 per oz for all mineral resources. P&E validated the model estimates and found them to reasonably estimate grade and tonnage. The mineral resource estimates are compliant with CIM Definition Standards for Mineral Resources and Mineral Reserves as incorporated by reference in NI 43–101. The independent Qualified Persons as defined by NI 43-101 for the purposes of the September 30, 2010 resource estimate disclosure are James L. Pearson, P.Eng., Eugene Puritch, P.Eng., David Burga, P.Geo and Fred H. Brown, CPG all of P&E and each a Qualified Person under NI 43-101.
The following summarizes the key assumptions, parameters and methods used in the mineral resource estimate:
- A marginal cutoff grade of 148 g/t of silver equivalent, representing the variable operating cost of $53.87/t was used to estimate the mineral resources.
- Drill hole assay values and channel samples were combined for mineral resource estimation.
- Bulk density value used for the resource estimate was 2.60 tonnes per cubic meter (t/m3) for all veins.
- Assays values manually identified as potentially economic were composited to length-weighted values.
- Prior to block estimation, gold composite samples were cut to 150 g/t at Huevos Verdes Sur,70 g/t at Frea and 40 g/t at Kospi. Silver assays were cut to 10,000 g/t at Huevos Verdes Sur, 4,200 g/t at Frea, and 4,400 g/t at Kospi.
- Grade estimation was undertaken with oriented search ellipsoids and Ordinary Kriging where sufficient resolution was available for variography, or by Inverse Distance Cubed (1/d3) weighting of composite values in areas of lower resolution.
- The San José mineral 'existing' vein and 'new' vein resource estimates are based on 754 and 77 drill holes, respectively, and 10,744 channel samples. Channel samples were taken from drift backs in the Huevos Verdes Sur, Huevos Verdes Norte, Odin, Frea, and Kospi vein systems.
- Mineral resource estimation was confined to areas considered to have a reasonable degree of geological confidence.
Mineral resources that are not mineral reserves do not have demonstrated economic viability.
The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category. The mineral resources in this press release were estimated using CIM Standards.
Source: Minera Andes Inc.