Minera Andes Inc. (TSX: MAI and US OTC: MNEAF) is pleased to announce details of the San José mine performance to June 30, 2008. The San José project is operated by Minera Santa Cruz S.A. and is owned 49% by Minera Andes and 51% by Hochschild Mining plc (HOCM.L: Reuters and HOC LN: Bloomberg - London Stock Exchange). Hochschild is the operator of the project.
Gross proceeds from metal sales during the second quarter of 2008 were $63.7 million. Over the past 12 months, the San José project has produced gross sales of approximately $74.6 million in gold and silver, mostly from the last three quarters.
The San José mine commenced its operation a year ago and is now at full production. Production in Q2 2008 totaled 1,093,000 ounces of silver and 12,410 ounces of gold, of which 49% is attributable to Minera Andes. Currently, plans are underway to expand the mine and double the current production rate by year-end 2008.
Allen Ambrose, president of Minera Andes said, "The San José project now has cash flow that is being used to pay for the expansion of the mine this year and for the connection to the regional power grid. Remaining funds will be used to begin repayment of the joint venture project debt. With our current cash position of approximately $8.4 million and the mine with cash flow we are well positioned to grow the company."
Second quarter 2008 sales of gold and silver are high because most of the metals produced in the first quarter of 2008 were sold in Q2 2008 at the prevailing market prices. Based on a gold price of $900 per ounce and a silver price of $18 per ounce, the total metal production for Q2 2008 at the San José mine had a gross metal value of $31 million or $10.3 million a month. Prices for sales of metal in Q2 2008 on an average weighted basis were $901 per ounce of gold and $16.47 per ounce of silver.
The San José mine now comprises 16 km of underground workings accessed by ramps on the Huevos Verdes, Frea and Kospi veins. During 2008 to date, 2,520 meters of workings were completed on the Huevos Verdes, Frea, and Kospi veins. The mine is currently staffed with 669 employees and over 200 contractors. -- www.cnxmarketlink.com
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