Andean American Gold Reports Progress With Invicta Project
Community Agreements Progressing Concurrently With Mine Design and Construction Preparation
TORONTO, ONTARIO -- (Marketwire) -- 04/20/11 -- Andean American Gold Corp. ("Andean American" or the "Company") (TSX VENTURE: AAG)(FRANKFURT: AQN) is pleased to report that its Invicta gold project, located in the mineral rich Western Pre-Cordillera of the Peruvian Andes, continues to advance towards construction, with good progress on community agreements and preparation well underway for phase one of construction, which is anticipated to begin in the third quarter of 2011.
The Company and local communities continue to work together in finalizing the Surface Land Use Agreements, required in order to begin construction of the Invicta Project. An agreement for long-term land lease and concurrent commitments for ongoing social development has been signed with the community of Sayan. This agreement covers a relatively small parcel of land required for the development of infrastructure at Invicta.
In addition, an agreement with a private landowner was recently completed, covering the surface rights for the permitted water well source which will provide water to the mine.
Dialogue continues with the remaining communities affected by the Invicta Project; Quintay, Lacsanga and Paran. The company is pleased with the pace of discussions and the progress being made locally, and anticipates further signed agreements during the current quarter. The company's goal remains the completion of all Surface Land Use agreements by the end of Q2 2011. Project construction as well as a 20,000 metre infill drilling program will commence as soon as these agreements are completed.
PROJECT DESIGN AND PRE-CONSTRUCTION WORK
The company's consultants, SRK Consulting (U.S.) Inc., DRA Americas Inc., Resource Development Inc. and Klohn Crippen Berger continue to advance the upgraded feasibility study for Invicta, as well as all required pre-construction activities, in order to prepare the project for its expected construction start date, early Q3 2011. The upgraded feasibility study remains on schedule for completion in June 2011.
In addition, the company is in the process of defining the 20,000 metre drilling program, aimed at expanding the Invicta Project resource, and is evaluating drilling contractors for this work.
DIVESTURE OF NON-CORE ASSETS
The Company is pleased to report that during March 2011 Andean sold the mineral assets and the mining plant and equipment of its Santa Rosa property, which was, up until March 2011, under a three-year assignment agreement with Minera Phoenix S.A.C ("MP"), a private Peruvian company. During March 2011 Andean and MP mutually agreed to terminate the agreement, facilitating the sale to Interandina S.A.C, a well known Peruvian mining contractor for net proceeds of US$60,000 after settling $40,000 of liabilities incurred by MP. "The Santa Rosa project was not considered to be a core asset for Andean as the Company's strategic focus is on the Invicta Project. We are pleased with the orderly transition to Interandina, who will aim to re-establish profitable mining operations at Santa Rosa," commented David Rae, President and CEO of Andean American Gold.
APPOINTMENT OF VIRAL NETWORK INC.
The Company also wishes to announce the appointment of Viral Network Inc. to develop its online shareholder communications capability. Viral Network will receive $6,000 per month for a six-month contract period and 100,000 stock options, pursuant to the Company's stock option plan, at a price of $0.80 The options are exercisable over a period of two years will vest quarterly over a 12-month period.
UPDATE ON PROPERTIES HELD BY ANDEAN'S SUBSIDIARY, SINCHAO METALS
As previously disclosed on February 7, 2011, Sinchao Metals Corp ("Sinchao"), in which Andean holds a 59.8% interest, conducted a review of its properties earlier this year and determined that title to the claims of four of the properties comprising the Sinchao Project were not properly transferred to a subsidiary of Andean American Gold Corp ("Andean"), the party that purported to transfer the claims to Sinchao. As a result neither Andean nor Sinchao holds any proprietary interest in the claims, which claims contain approximately 40% of the inferred resource previously disclosed by Sinchao. Sinchao has been striving to reach an agreement with the parties that Andean originally dealt with in order to remedy the deficiencies in title however it has been unable to reach such an agreement. Sinchao is therefore not optimistic that it will be able to remedy the deficiencies in title, and will make the necessary adjustments to its financial statements to reflect the write down of these four properties and accordingly, Andean will write down the value of these assets in its financial statements.
About Andean American
Andean American is an international mining and exploration company focused on value growth through the development of gold and copper projects in Peru and currently has two key assets: the 28,200 hectare Invicta gold-silver-copper advanced exploration stage project and 59.8% of Sinchao Metals Corp., owner of the Sinchao gold-silver-copper exploration project. In addition, the Company is actively targeting early stage gold and silver prospects in Peru.
For further information about Andean American, please visit the Company's website at www.AAGgold.com or call (604) 681-6186 or toll free: 1-888-356-4784.
On behalf of Andean American Gold Corp.,
David Rae, President and Chief Executive Officer
Forward Looking Information
This news release may contain forward-looking information within the meaning of the Securities Act (Ontario) ("forward-looking statements"). Such forward-looking statements may include the Company's plans for its mineral projects, the overall economic potential of its properties, the availability of adequate financing and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements expressed or implied by such forward-looking statements to be materially different. Such factors include, among others, risks and uncertainties relating to potential political risks involving the Company's operations in a foreign jurisdiction, uncertainty of production and costs estimates and the potential for unexpected costs and expenses, physical risks inherent in mining operations, currency fluctuations, fluctuations in the price of gold and other metals, completion of economic evaluations, changes in project parameters as plans continue to be refined, the inability or failure to obtain adequate financing on a timely basis, and other risks and uncertainties, including those described in the Company's Financial Statements, Management Discussion and Analysis and Material Change Reports filed with the Canadian Securities Administrators and available at www.sedar.com.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.