TORONTO, ONTARIO--(Marketwire - Nov. 10, 2011) - Minera Andes Inc. (the "Company" or "Minera Andes") (TSX:MAI)(OTCBB:MNEAF) is pleased to announce net income of $6.8 million ($0.02 per share basic and diluted) for the quarter ended September 30, 2011, an increase of $12.4 million compared to a net loss of $5.6 million ($0.02 loss per share basic and diluted), for the same period in 2010.
The increase is primarily attributable to the strong performance of silver and gold prices and its impact on the San Jose Mine where our 49% ownership interest is reflected in our income from investment in Minera Santa Cruz S.A. ("MSC"). Income from this investment increased from $5.0 million in Q3 2010 to $11.2 million in Q3 2011. The average weighted gross sale price for silver increased from $21.31 per oz in Q3 2010 to $35.82 per oz in Q3 2011, a 68% increase; the average weighted gross sale price for gold increased from $1,270 per oz to $1,726
per oz over the same period, a 36% increase. Comparing Q3 2010 to Q3
2011, silver ounces sold at MSC increased from 1,220,000 oz to 1,410,000
oz reflecting an increase of 16% while gold oz sold decreased slightly
from 20,000 oz to 18,000 oz, a decrease of 10%.
Other factors contributing to the increase in net income in 2011 compared to 2010 include a $9.2 million
unrealized loss on the fair value of our warrant liability recorded
during Q3 2010 which did not recur in 2011 as the Company no longer has
any warrants outstanding; this was partially offset by a $2.0 million increase in professional fees relating to the proposed combination with US Gold Corporation. At September 30, 2011, the Company had $45.0 million in cash and cash equivalents and short-term investments and is debt free.
Update to Minera Andes Press Release on October 27, 2011
Decree No. 1722 was issued by the Executive Branch of Argentinean government on October 25, 2011, and published in the Official Gazette on October 26, 2011, which re-establishes the obligation for mining companies, including MSC, to repatriate to Argentina
all foreign currency revenues obtained from mining exports. Considering
that Argentine exporters in general are subject to the obligation of
repatriating their export revenues into the country, and alleging
fairness and equity reasons, the Executive Branch has re-established the
obligation to settle in the Single and Free Foreign Exchange Market,
all revenues arising from exports performed by companies engaged in the
development of mining projects. The special exceptions for mining
industries previously granted in 2003 and 2004 have been eliminated.
The Company has been advised by MSC that their preliminary estimates indicate an additional $2 million
in their annual pre-tax operating expenses (on a 100% basis) as a
result of the increased foreign exchange and bank transaction costs
caused by the issuance of this decree.
Our financial statements and management's discussion and analysis are available under the Company's profile at www.sedar.com and www.sec.gov.
This news release has been submitted by Perry Ing, Chief Financial Officer of Minera Andes Inc.
About Minera Andes
Minera Andes is an exploration company exploring for gold, silver and copper in Argentina with three significant assets: A 49% interest in Minera Santa Cruz SA, owner of the San Jose Mine in close proximity to Goldcorp's
Cerro Negro project; 100% ownership of the Los Azules copper deposit;
and, 100% ownership of a large portfolio of exploration properties in Santa Cruz province, Argentina, including properties bordering the Cerro Negro project in Santa Cruz Province. The Company had $45 million USD in cash as at September 30, 2011 with no debt. Rob McEwen, Chairman and CEO, owns 30% of the shares of the company. On September 22, 2011, Minera Andes and US Gold Corporation
("US Gold") announced that the two companies have entered into an
arrangement agreement, pursuant to which the companies will combine to
form McEwen Mining. This transaction is expected to become effective in
early 2012 subject to customary approvals, including stock exchange,
court approval and approval by shareholders of Minera Andes and US Gold.
About Minera Santa Cruz
Minera Santa Cruz SA is a joint venture owned 51% by Hochschild Mining Argentina, a wholly owned subsidiary of Hochschild Mining plc, and 49% by Minera Andes S.A., a wholly owned subsidiary of the Company. The joint venture owns and operates the San Jose property.
Reliability of Information:
Minera Santa Cruz, the owner and operator of the San Jose mine, is responsible for and has supplied to the Company all reported results and operational updates from the San Jose mine. Minera Andes' joint venture partner, a subsidiary of Hochschild Mining plc,
and its affiliates other than MSC do not accept responsibility for the
use of project data or the adequacy or accuracy of this release. As the
Company is not the operator of the San Jose
mine, there can be no assurance that production information reported to
the Company by MSC is accurate, the Company has not independently
verified such information and readers are therefore cautioned regarding
the extent to which they should rely upon such information.
Caution Concerning Forward-Looking Statements:
press release contains certain forward-looking statements and
information. The forward-looking statements and information express, as
at the date of this press release, the Company's plans, estimates,
forecasts, projections, expectations or beliefs as to future events and
results. Forward-looking statements involve a number of risks and
uncertainties, and there can be no assurance that such statements will
prove to be accurate. Therefore, actual results and future events could
differ materially from those anticipated in such statements. Risks and
uncertainties that could cause results or future events to differ
materially from current expectations expressed or implied by the
forward-looking statements include, but are not limited to, the
completion of a business combination between Minera Andes and US Gold
(including the numerous approvals required in connection with such a
business combination), risks related to business integration as a result
of a successful business combination, factors associated with
fluctuations in the market price of precious metals, mining industry
risks, risks associated with foreign operations, risks related to
litigation, property title, the state of the capital markets,
environmental risks and hazards, uncertainty as to calculation of
mineral resources and reserves and other risks.
Readers should not
place undue reliance on forward-looking statements or information. The
Company undertakes no obligation to reissue or update forward-looking
statements or information as a result of new information or events after
the date hereof except as may be required by law. See the Company's
Annual Information Form, filed on SEDAR (www.sedar.com), and the Company's Form 40F, available on EDGAR (www.sec.gov),
for additional information on risks, uncertainties and other factors
relating to the forward-looking statements and information. All
forward-looking statements and information made in this news release are
qualified by this cautionary statement.
The TSX has not reviewed
and does not accept responsibility for the adequacy or accuracy of the
contents of this news release, which has been prepared by management.
FOR FURTHER INFORMATION PLEASE CONTACT:
Minera Andes Inc.
Chief Financial Officer
Source: Minera Andes Inc.