EUREKA WEST AND BAJO NEGRO LOW SULFIDATION AU-AG DEPOSITS, CERRO NEGRO DISTRICT, ARGENTINA: DISCOVERY; GEOLOGY AND RESOURCE DEVELOPMENT

The Eureka West and Bajo Negro deposits are two new low sulfidation vein discoveries in the Deseado Massif, southern Argentina. The Massif is a 60,000 km2 terrane in which Late Jurassic intermediate to felsic volcanics host many epithermal vein occurrences including three mines in production.

The Eureka West Vein was discovered by Andean Resources in 2007, and is part of the previously-known Eureka vein system. The vein is unusually wide compared to others in the Deseado and contains bonanza Au and Ag grades associated with quartz, adularia, base metal sulfides, sulfosalts, and ginguro-style banding. Most of the vein is concealed below post-mineral volcanic and epiclastic material.

Bajo Negro is a quartz-pyrite vein with lower Ag:Au ratios than the Eureka system. The outcrop was discovered in 2005, but drilling only commenced in early 2009. In November, over 90 holes had defined mineralisation with gold grades above a 2.5 g/t cut-off, over a length of 1.1 km.

At Eureka, an Indicated resource of 3.6 MT grading 12.25 g/t Au, 179 g/t Ag has been defined, plus an Inferred resource of 0.96 Mt at 7.59 g/t Au, 79 g/t Ag. Resource definition drilling at Bajo Negro is in progress for a resource estimation in January, 2010.

A feasibility study into a 2000 tpd underground mining operation on these two veins is scheduled, supplemented by previously known open cut resources at the Vein Zone deposit, is scheduled for completion in June 2010.

Dave is Andean Resources’ Chief Geologist and has worked on the Cerro Negro project since Andean started exploring there in 2005. Before that he worked in South American countries at various times since 1967, and now lives in Lima. Dave was involved in the Lihir deposit in the early years and did the first geological mapping at what became the Fruta del Norte deposit (Ecuador) in the late 1990s when Climax Mining owned it. Apart from that he has worked around the SW Pacific, and had a stint in Mongolia. Most of this has been on epithermal gold, but he has done petroleum exploration in PNG and coal exploration in Kalimantan.