MAI Announces Third Quarter Sales

Production at the San Jose mine in Q3 2008 totaled 990,000 ounces of silver and 12,340 ounces of gold, of which 49% is attributable to Minera Andes. Mill throughput increased 11.5% compared to the previous quarter, but silver production was 9.4% lower and gold production was 0.6% lower than the previous quarter due to lower head grades.

Third quarter 2008 sales of gold and silver are lower than Q2 because an inventory build of metal produced in 4Q 2007 and 1Q 2008 gave the second quarter higher than normal sales. In addition, another build up of metal inventory has occurred in Q3 due to a smelting furnace being temporarily down. The metal in inventory is forecast to be sold in Q4 of 2008. The average realized market prices in 3Q 2008 were 4.5% lower for Au and 25% lower for Ag than in 2Q 2008. Prices for sales of metal in Q3 2008 on an average weighted basis were $861 per ounce of gold and $12.37 per ounce of silver.

Phase I of the expansion has been completed, consisting of an increase in the mining and processing capacity from 750 metric ton per day to 1,500 metric ton per day. Mine production will ramp up to full capacity over the next few months. Currently, approximately 40% of the ore fed to the expanded plant is being processed to produce dore bars and approximately 60% is being processed to produce concentrates. Phase II of the expansion involves connecting to the regional electrical grid which is estimated to be completed in Q1 2009.

Meanwhile, there is sufficient diesel generating capacity at the mine to run the mill at its full capacity. Phase III of the mine expansion involves further expansion of the refining circuit at the processing facility to convert all the concentrate produced at the mine to dore which is expected to be completed by mid 2009, which will reduce working capital requirements and selling discounts and receive a lower tax treatment.

Allen Ambrose, president of Minera Andes said, "The San Jose project now has cash flow that is being used to pay for the expansion of the mine, refining circuit, and for the connection to the regional power grid. Remaining funds will be used to begin repayment of the joint venture project debt."

The San Jose mine now comprises 18 km of underground workings accessed by ramps on the Huevos Verdes, Frea and Kospi veins. During 2008 to date, 4,095 meters of workings were completed on the Huevos Verdes, Frea, and Kospi veins. The mine is currently staffed with 724 employees and over 230 contractors.

Allen V. Ambrose, Minera Andes' President, who is a "qualified person" as defined by National Instrument 43-101, is responsible for the information used in this news release and has supervised the preparation of the information and reviewed all information used in this news release. -- www.cnxmarketlink.com