VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 23, 2012) - AndeanGold Ltd. ("the Company" or "AndeanGold") (TSX VENTURE:AAU) is pleased to announce that, pursuant to a Memorandum of Understanding ("MOU") (see news release dated January 23, 2012), Gitennes Exploration Inc. ("Gitennes") and the Company have signed the definitive Share Sale and Mining Agreement (the "Agreement") and have closed the transaction giving the Company the right to acquire Gitennes' 40% interest in the Urumalqui Ag-Au Project (the "Project") in Peru. Pursuant to an existing Option Agreement (the "Option") between the parties dated April 21, 2010 (see news release dated April 22, 2010), AndeanGold presently has the right to earn a 60% interest in the Project.
Mr. Anthony F. Ciali, President & CEO, states, "We are extremely pleased to now have the opportunity to acquire a 100% interest in the Urumalqui Project. This will greatly facilitate our objective to develop the Urumalqui Vein to the initial development stage as soon as practicable, an important step forward in the overall development of the Project."
On signing the Agreement, the Company was required to pay Gitennes $125,000 in cash and issue Gitennes 200,000 common shares of AndeanGold (see news release dated January 23, 2012 for the Company's payment obligations under the Agreement).
Pursuant to the Agreement, AndeanGold acquired all of the issued and outstanding shares (the "Shares") of an offshore holding company of Gitennes that owns all of the issued and outstanding shares of Minera Corimalqui S.A., the Gitennes indirect Peruvian subsidiary that is the titleholder of the Project's concessions. The Shares will be subject to recoveyance to Gitennes should AndeanGold either not fulfill its obligations under both the Option and the Agreement or elect to terminate the Agreement while fulfilling its obligations under the Option.
In November 2011, the Company announced an initial National Instrument 43-101 compliant inferred mineral resource estimate (the "Estimate") for the Project, which was prepared by Mine and Quarry Engineering Services, Inc. ("MQes") of San Mateo, California (see news release dated November 15, 2011). Pursuant to the Estimate, the Project, at a 90 g/t Ag cutoff grade, contains an inferred mineral resource of:
1,945,000 tonnes at 171.01 g/t Ag (10,692,000 ounces) and 1.378 g/t Au (86,200 ounces)
As stated in MQes' Estimate report, "The exploration potential of Urumalqui Vein is good. Exploration results show that the known Vein mineralization may continue along its trend in both strike directions and to depth along its entire known length." Six drill holes have intersected the structure 200 metres below surface, and all six were mineralized. In addition, there has been only limited exploration done on the Project's other mineralized vein structures identified to date.
The Company is committed to advancing the Urumalqui Project to the development stage as soon as practicable, as well as actively working with the local communities related to the Project. AndeanGold has had excellent community relationships and is working on several agreed to social projects for the benefit of the communities.
About AndeanGold Ltd.:
AndeanGold Ltd. is engaged in the acquisition, exploration and potential development of primarily precious metals properties, principally in Peru and Ecuador. The focus of the Company's exploration activities is presently in advancing its Urumalqui Project, as well as pursuing mineral property acquisitions, in Peru. In Ecuador, the Company's activities have been limited to administrative and legal matters due to the Mining Mandate issued by the Ecuador Constituent Assembly on April 18, 2008. In November 2009, President Correa signed the Mining Regulations into law pursuant to the requirements of the new Mines Law, which was passed in January 2009. This was the final legal precursor to the re-initiation of exploration and mining development in Ecuador. The Company has been issued new mining titles under the new Mines law to its three key Ecuadorian projects and has filed the requisite documents with the Ministry of Non-Renewable Natural Resources and Ministry of Environment in support of the Company's request to renew exploration programs on its key projects in Ecuador. The Company is actively working with government officials to achieve this end.
Please refer to AndeanGold's website at www.andeangoldltd.com for further information on the Company's projects and activities.
On Behalf of the Board of Directors of ANDEANGOLD LTD.
Anthony F. Ciali, President, CEO and DirectorNeither the 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 release.