Andean plans $97m capital raisings

Fremantle-based Andean Resources plans to raise $C90 million ($A97 million), fully underwritten by a syndicate of brokers, for its Cerro Negro gold project in Argentina.

The company has entered into a deal with BMO Capital Markets, including several other brokers, and Dundee Capital Markets which have agreed to buy on a "bought deal" basis 56.25 million shares at $C1.60 each.

Proceeds from the raising will be used to progress Cerro Negro to production over the next two years.

The share offer is expected to close on July 15.

Andean released the project's prefeasibility study last year which estimated capital cost at $US281 million ($A352 million).

The project is projected to produce 1.3 million ounces of gold during a six year period from 2011.

Shares in Andean were last trading at $1.77 before entering a trading halt.

The announcement is below:

Andean Resources (AND:ASX; AND:TSX) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by BMO Capital Markets, including CIBC World Markets, Paradigm Capital, RBC Capital Markets, Thomas Weisel Partners, UBS Securities, Haywood Securities, and Dundee Capital Markets, under which the underwriters have agreed to buy on a "bought deal" basis by way of a short form prospectus, a total of 56,250,000 Common Shares (the "Common Shares"), at a price of C$1.60 per Common Share for gross proceeds of C$90,000,000.

The net proceeds will be used to significantly advance the exploration and development of the Cerro Negro project in Argentina over the next two years as the Company moves towards production.

Wayne Hubert, Andean's CEO, commented, "This financing opens up a new chapter in the Andean story, where we commit to expanding the high-grade resource through increased exploration, and to developing one of the best undeveloped projects in South America. The financing risks at Cerro Negro have been significantly reduced."

The offering is expected to close on or about July 15, 2009 and is subject to Andean receiving all necessary regulatory approvals.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.