May 16 2013
AndeanGold Ltd. ("the Company" or "AndeanGold") is pleased to announce that it has signed a drilling agreement with Explomin del Peru S.A. ("Explomin"), based in Lima, Peru for its advanced-stage Urumalqui Ag-Au exploration project (the "Project") in Peru.
Explomin successfully completed the Company's 2011 Phase I drilling program at the Project and is in the process of mobilizing two diamond core drill rigs to commence drilling at the Project during the week of May 20, 2013.
The Phase II drill program will entail up to 2,000 metres and will focus on drilling, to a vertical depth of up to 200 meters, the 500 metre NW segment of the Urumalqui Vein (the "Vein "), where there has been only limited, wide-spaced historical drilling. The Company did not undertake any drilling on this section of the Vein during its 2011 drilling program, which was focused on infill drilling the 1,000 metre Central and SE sections of the Vein. The 2011 drilling program led to the release of a NI 43-101 Inferred Mineral Resource Estimate of (see news release of November 15, 2011):
10.692 Million Ounces Silver and 86,200 Ounces Gold
1.945 Million Tonnes at 171.01 g/t Ag and 1.378 g/t Au
Based on the Company's 2012 surface channel sampling of the Vein, the trench assay results for the 500 metre NW outcrop returned very encouraging results of (see news release of May 29, 2012):
2.66 metres average width at 82.46 g/t Ag - 4.21 g/t Au - 9.42 oz/t AGE average grade
AGE: Equivalent ounces of silver based on a gold to silver ratio of 50:1 and assuming 100% recoveries.
oz/t: Ounces per metric tonne.
The trench gold grade results for the 500 metre NW outcrop were consistently higher than those for the 1,000 metre Central and SE outcrops and individual trenches contained some of the highest gold grades reported at the Project.
AndeanGold Ltd. has the right to earn a 100% interest in the Urumalqui Project from Gitennes Exploration Inc. ("Gitennes") pursuant to an existing Option Agreement (the "60% Option") between the parties dated April 21, 2010 (see news release dated April 22, 2010) and a definitive Share Sale and Mining Agreement between the parties dated May 17, 2012, giving AndeanGold the right to acquire Gitennes' remaining 40% interest in the Project (see news release dated May 23, 2012). Pursuant to the 60% Option, the Company must complete an additional 1,929 metres of drilling in order to satisfy the requirement to complete 7,000 cumulative metres of drilling by the third anniversary of the Agreement (July 8, 2013).
The Company is committed to advancing the Urumalqui Project to the development stage as soon as practicable, as well as actively working with the local communities related to the Project. AndeanGold has had excellent community relationships and is working on several agreed to social projects for the benefit of the communities.
Mr. John E. Bolaños, Vice President Exploration of the Company, is a Qualified Person for all technical information in this news release, excluding the mineral resources, in compliance with National Instrument 43-101 and has reviewed and approved the content of this release.