New Mineralized Zone At The San Jose Mine

SPOKANE, WA - Minera Andes Inc. reported details of the 2009 exploration program underway at its producing high-grade gold/silver San Jose Mine in southern Argentina. The San Jose project is owned by Minera Santa Cruz S.A. ("MSC") and MSC is owned 49% by Minera Andes and 51% by Hochschild Mining plc the operator. Exploration highlights include the discovery of a new mineralized structure about 845 meters southwest of the producing Huevos Verdes vein. The structure, which does not outcrop on the surface, was discovered in the first hole of a program of several 1,000 meter long diamond drill holes to be drilled horizontally from existing underground workings. Core hole (SMJ-105) intersected 8.9 g/t (0.26 ounces per tonne - opt) gold and 517 g/t (15.1 opt) silver over 1.00 meters.

The 2009 exploration program at San Jose consists of a compilation and interpretation of project data over the entire San Jose district, comprising approximately 115 km(2) (28,400 acres), to identify new targets and follow up on existing targets through exploration drilling. The planned drilling program totals approximately 22,000 meters made up of 17,000 meters of core drilling from the surface and 5,000 meters of underground drilling. The surface drilling will focus on the Kospi, Ayelen, Odin, and the newly discovered structure. Un-derground drilling will concentrate on the Kospi, Frea, Huevos Verdes Central veins as well as other veins by drilling from the underground access ramps. In addition to discovering new mineralized veins, the goal of this year’s exploration program will be to add to the existing resources at San Jose.

 

The new mineralized quartz vein structure was discovered in the first drill hole of the underground exploration program in the San Jose mine. The first phase of the underground drilling program consists of five 1,000-meter long, horizontal holes to test various geophysical targets outside the current mining areas in order to evaluate possible sub-parallel structures. Drill hole JM-105, directed towards a high-resistivity anomaly to the southwest of the Huevos Verdes vein, intersected the structure at 845m yielding 8.9 g/t Au and 517 g/t Ag over 1.0 meter width. A follow-up surface drilling program to test the continuity of this recent discovery is in preparation. The current five long-hole underground program continues with a second horizontal hole currently being drilled in a northeast direction from the Huevos Verdes vein.

The company also reported de-tails of the San Jose mine production for the first quarter of 2009.

The San Jose project is owned by Minera Santa Cruz S.A. ("MSC"), which in turn is owned 49% by Minera Andes and 51% by Hochschild Mining plc.

Hochschild is the operator of San Jose. Production for San Jose in the first quarter (on a co-product basis) totaled 1,299,000 oun-ces of silver at a cash cost of $4.99 per ounce and 16,560 ounces of gold at a cash operating cost of $357 per ounce, of which 49% of the production is attributable to Minera Andes.

The San Jose gold/silver mine saw a decrease in gold and silver production and a significant lowering of unit operating costs in Q1 2009 compared to Q4 2008 as reported by MSC to the owners. Silver production was 2% lower and gold production was 5% lower in Q1 2009 compared to the previous quarter, because approximately 20% of the mill feed was derived from low-grade surface stockpiles. This was partially offset by the higher tonnage being treated in the current quarter. Unit operating costs were lower due to increased production and the economies of scale associated with the processing capacity expansion completed in Q4 of 2008.

Work is underway to also increase mine production from 750 MTPD to 1,500 MTPD, primarily by accessing the Kospi vein, located between the Huevos Verdes and Frea veins which are the source of the current production. Production from the Kospi vein is anticipated to commence during the second quarter of 2009. In the meantime, mill feed is being generated from expanded mine production at the Huevos Verde and Frea veins and from a surface stockpile of low-grade ore.

The company's address is 111 East Magnesium Road, Spokane, WA 99208, (509) 921-7322.