VANCOUVER, BRITISH COLUMBIA--(Marketwired - Feb. 6, 2014) - AndeanGold Ltd. ("the Company" or "AndeanGold") (TSX VENTURE:AAU)(LMA:AAU) is pleased to announce that the Company has entered into a non-binding letter of intent ("LOI") with Corporacion Financiera de Desarrollo ("COFIDE"), a Peruvian state-owned development bank, for a U.S. $4 million loan facility (the "Loan"). The Loan will be made available to the Company's Peruvian subsidiary, PeruGold Resources S.A.C. ("PGR"), which will utilize the funds to finance plans to develop a small-scale, mining only operation (the "Operation") at the Company's Urumalqui Ag-Au Project (the "Project") located in the Department of Libertad, Peru.
In order to finalize the Loan, the Company must provide COFIDE, principally, with an independent report (the "Report") on the requisite mine development costs to initiate the proposed Operation; a related operating cash flow analysis; completion of COFIDE's standard Information Request form; and a Company guaranty of PGR's Loan obligations. It is estimated that it will take 3 months to provide this information and that COFIDE would then require at least 30 days to approve the Loan. In addition, closing of the Loan would be subject to execution and delivery of definitive documentation. The Company has received proposals from independent engineering firms based in Lima, Peru for preparation of the Report.
It is intended that the Operation would accommodate a production rate of up to 350 TPD, although it is anticipated that the initial operating rate may be lower in order to coincide with available third-party processing facilities. The Company has identified several potentially suitable processing facilities, although no formal agreements have yet been signed. It is estimated that permitting for the Operation may take 9 - 12 months and that the Operation should commence production within 3 - 6 months from the receipt of all permits, subject to the conclusions reached in the Report.
Once the Loan has been approved, COFIDE has indicated that it would be prepared to consider providing additional loan facilities in order for the Company to carry out additional exploration / development programs, geological / engineering studies, permitting, etc. leading to commencement of an eventual full-scale mining and processing operation at the Project. Once fully permitted, COFIDE has further indicated that it would be prepared to consider providing the Company with a construction loan to build the full-scale operation.
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 ("MRNNR") in support of the Company's request to renew exploration programs on its key projects in Ecuador. In September 2012, the Company received authorization from the MRNNR to renew exploration programs on its Curiplaya Project.
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 Director
Neither 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.