About Andina

The primary focus of Andina Minerals Inc. (“Andina”) is mining exploration and development in Chile.

The Company’s flagship development project is the 100%-owned Volcan Gold Project (“Volcan”) located 120 kilometres east of Copiapo in the Atacama region of Chile. Andina has completed over 112,000 metres of drilling at Volcan and discovered three gold deposits in the Dorado area: the Dorado East, Central and West and two gold zones in the Ojo de Agua area: Andrea, Florencia, plus the Ojo de Agua East zone.

Mineral Reserves

As of January 31, 2011, initial Proven and Probable Mineral Reserves for the Dorado deposits of the Volcan project are 6.6 million ounces of gold at an average grade of 0.726 grams per tonne gold (“g/t Au”) contained in 283 million tonnes of ore. This represents a sub-set of the Global Dorado Sector Resources that have been earmarked for Phase 1 Development.

Global Dorado Sector Mineral Resources

As of September 16, 2010, the updated resource for the Dorado deposits estimated measured and indicated mineral resources of 389.7 million tonnes at an average grade of 0.71 g/t Au for 8.9 million ounces of contained gold and inferred resources of 41.6 million tonnes at an average grade of 0.50 g/t Au for 671,000 ounces of contained gold. Both estimates are at a cut-off grade of approximately 0.4 g/t Au.

Also as at September 16, 2010, for the Dorado deposits, estimated Global geologic measured and indicated resources at a cut-off grade of 0.2 g/t gold are 11.7 million ounces of gold plus an additional 4.3 million ounces of gold in the inferred category.

In addition to the Dorado deposits, the Ojo de Agua area hosts an inferred resource of 18.6 million tonnes grading 0.85 g/t Au for total contained gold content of 510,000 ounces at a cut-off grade of 0.5 g/t (October 2008) at the Andrea and Florencia zones while drilling continues to define a resource at Ojo de Agua East.

2011 Pre-feasibility Study for the Dorado deposits

  • Based on a subset of in-pit gold resources from the Dorado deposits which targets 74% or 6.6 million contained ounces,
  • Average annual gold production of approximately 283 million ounces,
  • 15 years mine life,
  • Average first 5 years cash operating costs of $584/oz Au,
  • Average life-of-mine (“LOM”) cash operating costs of $615/oz Au,
  • At $1,300/oz gold, using at a 5% discount rate, after-tax NPV of $863 million generating an IRR of 23%,
  • Estimated construction capital costs of $547 million,
    • Processing 55,000 tonnes per day (“tpd”) of ore,
      • 11,000 tpd Milled (5,500 selected higher grade and 5,500 fines from leach feed)
      • 44,000 tpd Heap Leach Pad
  • Waste to ore ratio of 2.48:1 LOM,
  • Several opportunities to materially improve project economics were not incorporated into the PFS, including Flotation and SART technologies the subject of ongoing testwork and engineering.

Development of Volcan is not complex and has comparatively low development costs for a resource of this magnitude based on: metallurgical testing to date, location in Chile, access to infrastructure and proximity to surface of the deposits, compared to other gold deposits of similar magnitude.

In addition to Volcan, Andina has two exploration projects, the Encrucijada gold/silver property, a joint venture with Hochschild Mining Plc and the Pampa Buenos Aires gold/silver project, a joint venture with Iron Creek Capital Corp. While Volcan is an advanced stage exploration project on the cusp of development, both Encrucijada and Pampa Buenos Aires are early stage but show promise on significant strategic land positions for both gold and base metal mineralization.