Andean is a Canadian mining company producing gold and silver from its Santa Rosa mine in the Andes mountain region in Peru, South America. It is also exploring for gold at its Invicta project and for gold/copper at its Sinchao project, both which are also in Peru.
Mining is important to Peru. It accounted for 9% of total global gold production in 2005 and was the number one silver producer in the world.
The Company is profitable and cash-flow positive, with significant exploration potential. Recent drilling results indicate zones of gold mineralisation at Invicta, with an outstanding intercept in September of 36.4 meters of 5.12 grams/tonne of gold.
With additional drill holes just reported, the current tonnage and grade at Invicta will be significantly enhanced. The current indicated resource is 300,000 ounces gold and 1.4 million ounces of gold and gold equivalents as the inferred resource.
Video of interview with John Huguet, CEO of Andean on the drill results at Invicta:
Andean is listed as a mining company on the TSE Venture Exchange. The Company's head office is in Vancouver.
In 2005, Andean acquired the option to purchase 100% of the advanced pre-feasibility stage project of 3,700 hectares from a subsidiary of Barrick Gold (the largest gold mining company in the world).
Subsequently, Andean independently acquired an additional 13,200 hectares contiguous to the property bringing the total land position for the project to 16,900 hectares.
On Sept 6, 2006, Andean announced the discovery of a major new mineralised structure, which it has named "Ydalia", on which work was being undertaken.
On Sept 12, it announced the results of its first drill hole (AE-DDH-06-56) which returned results grading 5.12 g/t gold, 45.42 g/t silver, 1.01% copper and interesting zinc and lead content, over 36.4 meters.
On Oct 10, the Company announced further results for drill holes AE-DDH-06-52, AE-DDH-06-58 and AE-DDH-06-80 drilled on the Atenea Vein Structure at the Invicta project. Significant results include 49.25 meters (true width 32 meters) of 2.38 g/t gold, 11.04 g/t silver, 0.44% copper, 0.40% lead and 0.22% zinc. Click for further details (pdf).
Also, significant surface sample results from Ydalia yielded a high grade 2.0 meter wide surface chip channel sample of 91.7 g/t gold and 20.3 g/t silver.
"These drill results will beneficially impact resource estimates for the Invicta Project", states Chairman and CEO John Huguet, "and allow completion of the feasibility study."
The Yanacocha-Hualgayoc mining district was historically one of the earliest mining areas developed by the Spanish in Peru and remains a very important area today as it hosts multi-million tonne deposits such as Tantahuatay, La Granja , Michiquillay, Sipan, and Yanacocha.
Sinchao lies approximately 30 km northwest of the Yanacocha mine, which is currently producing 1.5 million ounces of gold per year and is the largest and one of the lowest cost producing gold mines in South America.
On March 20, 2006, Andean American received a NI 43-101 Technical Report on the Sinchao property. The report details four distinct styles of mineralization at Sinchao: a large copper-gold-zinc (silver) Skarn zone, a copper-gold-silver mineralised fault and Breccia zone, a high Sulphidation copper-gold epithermal mineralised zone and a copper-gold-silver replacement manto-type massive Sulphide.
The report includes recommendations for a two-phase exploration program focused on the mineralised fault-Breccia and Skarn zones.
Based on the report (which makes several assumptions that still need to be verified), it could then be stated that a potential tonnage for the mineralised fault and Breccia zone may be in the range of 40 to 81 million tonnes and for the Skarn mineralised zone, it may be in the range of 437 to 874 million tonnes. The low end is considering that only 50% of the calculated tonnes may contain potentially economic mineralisation.
Andean holds about 2/3rds of the shares of the newly formed Sinchao Metals Corporation, which owns the rights to the Sinchao properties and has fast-tracked development of these assets under its new CEO, Mr. Andrew W. Gourlay, P.Geol.
Santa Rosa is Andean's producing property. Currently there are over 1,435,000 tonnes of minerals on heap pads with gold and silver estimated at 39,800 ounces of gold and 1,737,800 ounces of silver totaling 68,800 ounces of gold and gold equivalents.
However, the Company has had metallurgical problems and low recoveries. Production has fallen in recent quarters, from 6,374 total ounces of gold equivalent (June 2005) to 2,084 (June 2006). The Company believes it has solved the issue of excessive sulphur it has struggled with in recent months.
Andean had revenues of $ 1.2 million in its first quarter ended June 30, 2006 and net profits of $ 115,893.
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