Cerro Negro Gold Project

Quick Facts

  • Location:

    Santa Cruz Province, Southern Argentina. 750m elevation.

  • Ownership:

    The project is owned 100% by Andean Resources Limited

  • Mineralisation:

    Low-sulphidation, epithermal gold (and potentially silver) hosted within quartz veins and associated stockworks

  • Current Status:

    As at April 16 2008, the project contains a JORC and NI 43-101 compliant resource of 2.3 million ounces of gold. A planned 30,000m+ diamond and RC drill program designed to expand and enhance this Resource base will commence in October 2008.
  • Zone Category Cut-off Tonnes Au Grade Au Product Ag Grade Ag Product AuEq Grade
    Au/Eq M g/t ounces g/t M oz g/t
    Eureka Indicated 3.0 2.49 12.9 1,030,200 235 18.8 16.8
    Eureka Inferred 3.0 0.97 10.7 335,700 157 4.9 13.3
    Vein Zone Indicated 1.0 4.61 3.7 533,736 - - 3.7
    Vein Zone Inferred 1.0 4.31 2.7 366,888 - - 2.7
    2,266,524

Introduction

Cerro Negro is an advanced stage gold exploration project on the low level Patagonian plains in the southern Argentinean province of Santa Cruz. Project infrastructure is excellent with access to the property via 54 km of bitumen and 80 km of gravel roads from the nearest provincial town of Las Heras (110km NE) which provides the local on-shore oil fields located in Santa Cruz with basic manufacturing and service facilities. The main regional centre of Comodoro Rivadavia (pop. 140,000) has port and airport facilities and is situated 160km north east of Las Heras.

Cerro Negro Map

The climate in the region is cool, dry and at times windy with a winter season between late June and mid-September. Temperatures range from 25 degrees centigrade in summer to minus 5 degrees centigrade in the winter months. Average rain fall is approximately 60 cm per annum. The terrain at Cerro Negro has subdued relief at approximately 750m above sea level.

Within the Cerro Negro project boundary (comprising 25,000 hectares) are ten currently identified prospect areas with manifestations of epithermal gold mineralization. Only two of these, the Vein Zone and the Eureka West prospects, have been subject to systematic drilling by Andean. Within the overall Cerro Negro project, at least five zones of known epithermal mineralization are now recognized comprising:-

Vein Zone
  • Vein Zone, which was the previous focus of past exploration,
  • Herradura which adjoins Vein Zone to the east and has yet to be systematically drill tested by Andean;
  • Bajo Negro, 2 km to the south-west of the Vein Zone which has been trenched by Andean Resources with some encouraging results;
  • Eureka Vein, which is located near the western margin of the tenement and has large outcropping quartz veins over some 4 kms of strike and has recorded significant gold grades; the current focus of exploration;
  • Mariana, located north of the Eureka Vein area where epithermal veins and extensive areas of argillic alteration have been partially tested by eight RC holes drilled by Pegasus Gold in 1996-97.

Community Relations and the Environment

Andean recognizes the importance of protecting the environment in all aspects of its day to day project operations and exploration activities.

The Company aims to carry out its activities in a manner which now, and in the future, will reflect "best practice" in environmental performance. To achieve this Andean integrates environmental issues into the planning of all its on-site activities.

The Company has established a base-line monitoring program to identify normal levels of rainfall, water quality, wind strength and wind direction across the Cerro Negro project area.

At the point of commencing any feasibility study on the project, a full Environmental Impact Study ("EIS") will be carried out to ensure not only compliance with relevant mining codes etc but also that any proposed mining operations meet the expectations and needs of the local community in and around the project area.

The Company strives to build long term relationships with local land owners and other members of the local and provincial communities and to this end engages local contractors for many of the activities that support its exploration efforts. At the local stakeholder level, formal meetings and presentations have also been variously conducted during the year with Provincial Mines Department representatives, local residents and land owners and local environmental authorities as part of building local awareness and acceptance of the company and its activities.

The viability of developing projects in the region can be demonstrated by the construction of the San Jose epithermal gold project which is located 25km's north of Cerro Nergo. The San Jose project is owned jointly by the TSX listed Minera Andes Inc. and the AIM listed Hochschild mining company from Peru.

The Company has now formally established its Argentinean office and administration activities in the local provincial town of Caleta Olivia recognising the importance it places on having a strong and visible local presence in Santa Cruz province.

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