Andean Resources Announces Exploration and Project Update

• Press Release
• Source: Andean Resources Ltd.
• On 8:00 am EST, Thursday December 4, 2008

FREMANTLE, WESTERN AUSTRALIA--(MARKET WIRE)--Dec 4, 2008 -- Andean Resources (Toronto:AND.TO - News)(ASX:AND.AX - News) reports the first results from its recently commenced 2008/09 drill program at its 100% owned Cerro Negro project in Southern Argentina including the following highlights:

- Infill drilling at Eureka West continues to confirm structural and grade continuity, supportive of further upgrading of inferred resources

- Geotechnical hole EDD-887, drilled 50m below the base of the current Eureka West Resource returns a quartz interval with an estimated true width of approximately 10m. Assays pending

- Infill drilling at the Vein Zone deposit confirms good grades and widths including 10m of 9.4g/t gold in VDD-801

- Identification of several new exploration targets at Cerro Negro following trenching on the Bajo Negro Vein, field mapping of a new vein in the proposed tailings dam area, and reviewing prior drilling at Silica Cap and Don Adolfo prospects

- Andean commences the Cerro Negro Bankable Feasibility Study with emphasis on maximising return on capital

Seven of the holes reported in this release were drilled into the Vein Zone area and seven of the holes were drilled into the Eureka West Vein. Reported widths are intersected widths, and true widths are less in every case (see Table 1 for detailed drill data). Andean has assumed an underground cut-off grade of 2.5 g/t gold at Eureka for all the interval summaries reported in this release.

Eureka West Vein - Infill Holes

The Company continues to drill test the high-grade Eureka West Vein in order to better define the top and bottom limits of the structure which hosts the Eureka West mineral resource. The highlights of the recent drill results include:

- ERC-877: 4.0m of 8.6 g/t Au and 95 g/t Ag from 207m

- ERC-878: 16.0m of 5.8 g/t Au and 61 g/t Ag from 162m

- ERC-879: 5.0m of 29.3 g/t Au and 324 g/t Ag from 288m

- ERC-885: 12.0m of 14.4 g/t Au and 135 g/t Ag from 230m

- ERC-886: 8m of 17.0 g/t Au and 308 g/t Ag from 272m

ERC-878 encountered of 3m of 5.7 g/t Au, 177 g/t Ag and 16m of 5.8 g/t Au, 61 g/t Ag, which correspond respectively to the 1.0 and 1.1 splits of the West Vein, with the 1.0 split mostly eroded at the La Matilde paleosurface. The intercepts in ERC-878 are up-dip from EDD-809 in which the corresponding intersections were 15m of 51.5 g/t Au, 1099 g/t Ag and 8m of 16 g/t Au, 68 g/t Ag. The result from ERC-878 leaves up-dip potential in the 1.1 split, despite this intersection being in the upper part of the ore-shoot.

ERC-877 and ERC-879 extend the up-dip potential of the Eureka West veins (see attached longitudinal section).

ERC-885 was drilled below ERC-814, which intersected 19 meters of 6.9 g/t Au, 113 g/t Ag. ERC-885 intersected 12 meters of 14.4 g/t Au, 135 g/t Ag, approximately 40 meters below ERC-814, leaving the resource still open to depth on this section.

ERC-886: intersected 8m of 17 g/t Au, 308 g/t Ag from 272m, corresponding to the 1.0 split of the West Vein. This is below ERC-873, which intersected 7m of 21.8 g/t Au, 320 g/t Ag. The intersection is within the resource.

Eureka West Vein - Extension Holes

Several other drill holes targeted up-dip mineralization, but intersected the old paleo-surface zone with quartz clasts in the basal La Matilde Formation (See Figure 2); this confirms that the overlying La Matilde Formation is post-mineral. The Eureka West veins remain open at depth and to the west beneath the La Matilde Formation.

On the most westerly section drilled to date (200W), hole EDD-845 intersected this quartz rubble zone in the basal La Matilde Formation. Andean geologists plan to explore further south into the hanging wall to try and intersect the Eureka West Veins in this area (see Figure 3).

In addition, a near vertical geotechnical hole, EDD-887 was drilled on section 200E to better understand rock conditions for the proposed underground decline, when it intersected Eureka West veins with a 20m quartz vein intercept (estimated true width 10m) at the 300m elevation, which is approximately 50m below the current resource.

Vein Zone Drilling Results

The seven Phase 5 holes shown in Table 2 were drilled on a NE-SW grid to better test the SE part of the resource, where veins have a predominant north-westerly trend. Previous holes, drilled on a NS grid, were in some cases oblique to the trend of the veins.

The best results from this program were obtained in holes drilled in the western half of the new grid:

- VDD-801: 10m of 9.4 g/t Au from 145m

- VRC-805: 9m of 6.4 g/t Au from 9m and 9m of 8.7 g/t Au from 42m

- VRC-806: 24m of 5.4 g/t Au from 173m

The intersections in VDD-801 and VRC-806 correspond to a structure which makes up a major part of the Vein Zone resource. The intersections in VRC-805 are from the hanging wall part of the resource.

Three holes (VDD-802, VDD-803, and VRC-807) were drilled to test the SE limit of the resource with limited success as the veins tend to narrow in this area (see Figure 4). Results include:

- VDD-802: 3m of 9.1 g/t Au from 119m

- VRC-807: 6m of 3.3 g/t Au from 223m

Trenching, Bajo Negro Vein

A total of 550m of new trenching has been completed on the Bajo Negro vein, south west of Vein Zone, in addition to a 190m existing trench.

Sampling of the outcrop and the vein in the original trench during previous exploration encountered encouraging gold values including 4m of 2.4 g/t gold. The new trenches have exposed a continuous and very consistent structure consisting in part of two vein splits, 2.2 -2.5m and 1.1 -1.5m wide, which can be traced south from the original outcrop for 380m. There are good possibilities for further continuation to the south on the evidence of quartz float along the strike of the vein. The new trenches have been sampled, and assays are pending.

The Bajo Negro vein outcrops are approximately 100m above the level of exposure at Vein Zone, and are close to silicified outcrops thought to have been deposited above a paleo-water table. Andean intends to drill the vein to explore for a deeper gold-enriched zone such as was found in the Eureka area.

Bankable Feasibility Study

Andean is beginning work on a Bankable Feasibility Study (BFS) for the Cerro Negro project, scheduled for completion in 2009. In addition to the Prefeasibility Study (PFS) design, which encompassed capital and operating-cost environments prevalent in Q2 2008, Andean will be reviewing a number of initiatives designed at maximising the financial performance of the project and thus increasing the project return on capital that would include the following concepts:

- Rather than developing two mines in parallel with higher upfront capital as contemplated in the Prefeasibility Study, develop the two mines in series with the high grade Eureka deposit first followed by Vein Zone

- Evaluating used processing facilities with capability to process Eureka ores at rate of at least 2,000 tonnes-per-day

- Relocating the processing facilities nearer to Eureka reducing upfront infrastructure requirements

- Evaluate contract mining of Eureka and Vein Zone rather than the owner-operator scenario incorporated in the PFS

Wayne Hubert, Andean's CEO, commented, "These latest drilling results support our view that the Eureka vein system will continue to deliver additional high-grade results. Andean's large Cerro Negro project holds tremendous geological potential for the discovery of additional veins and the Company is committed to continue with its exploration focus at the property, even in light of the current market turmoil that has seen many companies put their drilling efforts on hold. Andean has however, in the interest of focusing its resources at Cerro Negro, curtailed its grass-roots regional exploration efforts outside of the property boundaries."

Next Steps

The Company has added a third drill rig on the property, in order to complete all the drilling required to upgrade the Eureka resources for the Bankable Feasibility Study. An additional 31 holes have been drilled at the Eureka veins and are awaiting assays. Andean will continue to update the market as these results become available.

 

Table 1: Drill Hole Data
Eureka West Vein Intersections (at a 2.5 g/t Au cut-off grade)
----------------------------------------------------------------------------
Hole    Easting Northing Elev- Azimuth  Angle  From     To  Width   g/t  g/t
                         ation   (true)          (m)    (m)    (m)   Au   Ag
----------------------------------------------------------------------------
ERC-877 2393991  4808274   670      45    -50   207    211      4   8.6   95
----------------------------------------------------------------------------
                                                215    218      3     3   30
----------------------------------------------------------------------------
                                                220    223      3     3   37
----------------------------------------------------------------------------
ERC-878 2304071  4808251   661      45    -60   105    108      3   5.7  177
----------------------------------------------------------------------------
                                                162    178     16   5.8   61
----------------------------------------------------------------------------
                                                183    187      4   3.1   22
----------------------------------------------------------------------------
                                                197    200      3   3.2   26
----------------------------------------------------------------------------
ERC-879 2393930  4808351   682      45    -55   266    270      4     4   59
----------------------------------------------------------------------------
                                                288    293      5  29.3  324
----------------------------------------------------------------------------
                                                309    311      2   3.5   19
----------------------------------------------------------------------------
EDD-880 2393956  4808309   677      45    -50 222.2  224.4    2.2   5.8   65
----------------------------------------------------------------------------
                                              231.4    234    2.6   2.7   39
----------------------------------------------------------------------------
ERC-882 2394174  4808036   654      45    -60   291    298      7   2.8   46
----------------------------------------------------------------------------
ERC-885 2394150  4808116   648      45    -66   230    242     12  14.4  135
----------------------------------------------------------------------------
ERC-886 2394049  4808158   658      45    -65   272    280      8  17.0  308
----------------------------------------------------------------------------



Vein Zone Intersections (at a 1.0 g/t Au cut-off grade)
--------------------------------------------------------------------------
Hole    Easting Northing Elevation Azimuth  Angle  From     To  Width  g/t
                                     (true)          (m)    (m)    (m)  Au
--------------------------------------------------------------------------
VDD-801 2408726  4806583       787     225    -55   117    119   2.00  2.6
--------------------------------------------------------------------------
                                                    122  124.5   2.50  2.6
--------------------------------------------------------------------------
                                                    133    138   5.00  4.9
--------------------------------------------------------------------------
                                                    145    155  10.00  9.4
--------------------------------------------------------------------------
                                                  170.1    174   3.90  4.0
--------------------------------------------------------------------------
VDD-802 2408825  4806439       824     225    -50    77     80   3.00  1.5
--------------------------------------------------------------------------
                                                    119    122   3.00  9.1
--------------------------------------------------------------------------
VDD-803                                             NSR
--------------------------------------------------------------------------
VRC-805 2408771  4806486       812     225    -65     9     18   9.00  6.4
--------------------------------------------------------------------------
                                                     35     39   4.00  2.2
--------------------------------------------------------------------------
                                                     42     51   9.00  8.7
--------------------------------------------------------------------------
                                                     73     75   2.00  4.4
--------------------------------------------------------------------------
                                                     80     85   5.00  3.0
--------------------------------------------------------------------------
                                                     88     90   2.00  1.3
--------------------------------------------------------------------------
                                                    115    122   7.00  1.6
--------------------------------------------------------------------------
                                                    157    160   3.00  1.0
--------------------------------------------------------------------------
                                                    164    170   6.00  2.2
--------------------------------------------------------------------------
VRC-806 2408771  4806564       794     225    -60   123    126   3.00  2.1
--------------------------------------------------------------------------
                                                    137    139   2.00  1.6
--------------------------------------------------------------------------
                                                    150    155   5.00  3.6
--------------------------------------------------------------------------
                                                    157    160   3.00  5.6
--------------------------------------------------------------------------
                                                    164    169   5.00  2.3
--------------------------------------------------------------------------
                                                    173    197  24.00  5.4
--------------------------------------------------------------------------
VRC-807 2408801  4806456       820     225    -55    97     99   2.00  3.4
--------------------------------------------------------------------------
                                                    159    162   3.00  3.9
--------------------------------------------------------------------------
                                                    171    175   4.00  1.5
--------------------------------------------------------------------------
                                                    223    229   6.00  3.3
--------------------------------------------------------------------------
(1) Intersections are drilled widths, not true widths. True widths are
    less than drilled intersections and can be determined from the Eureka
    cross-sections provided
(2) Some coordinates and elevations are approximate and subject to final
    survey by a licensed surveyor
(3) Hole VDD-804 abandoned due to poor core recovery

In the above table, the Gauss Kruger coordinate system and the Campo Inchauspe datum are used to define drill hole collar positions. However on the longitudinal projection of the Eureka West Vein, the coordinate system refers to a local grid established for drilling the Eureka West Vein.

Quality Control and Assurance

The analytical results quoted in this release are derived from half drill core in the case of diamond drill holes, or from cuttings in the case of reverse circulation holes. Samples are prepared and assayed by ACME Analytical Laboratories SA (Mendoza) in Mendoza, Argentina.

Gold is determined initially by fire assay with AA finish. Samples assaying more than 10 ppm gold are re-assayed using a gravimetric finish.

Silver is determined initially by AAS, and samples assaying more than 100 ppm silver are re-assayed by fire assay with gravimetric finish.

Quality control of the analytical results is maintained by inserting standards, blanks, and duplicates into the sample run, approximately every twenty samples. Additional quality control is maintained by sending assay sample splits to a second laboratory from time to time. These checks are evaluated statistically at regular intervals.

All analytical data are entered into a Microsoft Access database, with limited access and numerous checks to ensure integrity of the data.

Note: The information in this Report that relates to exploration results is based on information provided by David Shatwell who is a Fellow of the Australian Institute of Geoscientists. Mr Shatwell has extensive experience relevant to the style and type of mineralisation and deposits under consideration, and to the activity undertaken, to qualify as a Competent Person as defined in the 2004 Edition of the "Australian Code for Reporting of Mineral Resources and Ore Reserves" (the J.O.R.C. Code). Mr Shatwell consents to the inclusion in this Report on his work in the form and context in which it appears.

Andean Resources Ltd (www.andean.com.au) is an Australian and Toronto listed gold explorer searching for precious metals in the Andes, with four large property positions in the Patagonia.

To view Figure 1, please visit the following link: http://media3.marketwire.com/docs/andfig1.pdf

To view Figure 2, please visit the following link: http://media3.marketwire.com/docs/andfig2.pdf

To view Figure 3, please visit the following link: http://media3.marketwire.com/docs/andfig3.pdf

To view Figure 4, please visit the following link: http://media3.marketwire.com/docs/andfig4.pdf

A.C.N. 064 494 319

     Contacts:
     Andean Resources Limited
     Krista Muhr
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     (647) 330-1478
     Email: krista.muhr@andeangold.com
      
     Andean Resources Limited
     Morrice Cordiner
     Director
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     Email: morrice@bigpond.net.au
      
     Andean Resources Limited
     Warren Gilmour
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     + 61 8 9430 9965 (FAX)
     Email: warren@andean.com.au
     Website: http://www.andean.com.au