Andean to raise $9.8m to fund Argentine gold exploration

Fremantle-based mineral explorer Andean Resources Ltd will raise $9.8 million though a share placement to fund exploration at its Cerro Negro gold project in Argentina, ahead of listing on the Toronto Stock Exchange.

The company will issue 28 million shares at 35c, as well as one attaching option for every two new shares issued exercisable at 45c, to Toronoto based investors.

Andean chief executive Wayne Hubert said the placement would provide runding for the company's remaining exploration programs, as well as giving it the chance to build a shareholder base in North America.

The full text of a company announcement is pasted below

Andean Resources Ltd (ASX:AND) is pleased to announce that it has entered into arrangements to place a total of 28 million new shares (with one attaching option for every 2 new shares issued, exercisable at A$0.45 on or before 24 months of issue) at a placing price of A$ 0.35 to raise A$ 9.8 million (before expenses).

The share and attaching option issue, which is being co-ordinated by leading international securities firms Haywood Securities Inc ("Haywood") and BMO Nesbitt Burns, is being made principally to Toronto based institutional investors. The introduction of several new N. American based investors to the Company's share register at this time is expected to facilitate interest in Andean ahead of a planned Toronto Stock Exchange listing of the Company in the 2nd quarter 2007.

The fund raising has been structured as an exempt offer under Section 708 of the Corporations Act and can be completed within Andean's existing 15% placement capacity under section 7.1 of the ASX Listing Rules.

Funds form the share and warrant offering (which is scheduled to complete on or before 25th February 2007) and the proposed Shareholder Share Purchase Plan (see below) will be used to fund the extensive drilling and exploration programs planned for 2007 at Cerro Negro and for general corporate purposes.

Offer under Andean Shareholder Share Purchase Plan

The Board recognises the importance of providing existing shareholders who have supported the Company with an opportunity to participate in the Company's next stage of development at what represents an important corporate milestone for Andean.

Accordingly, the Company has also decided to give its existing Australian shareholders an entitlement to acquire shares via an offer to be made under its Shareholder Share Purchase Plan.

It is intended that eligible shareholders on the register as at 7.00pm (WST) on 20 February 2007 ( the "Record Date") will be invited to subscribe for up to $4,950 worth of ordinary shares in the capital of Andean, at a price of A$0.33 per share. This compares favourably to yesterday's closing price of A$ 0.37 per share.

The total amount sought to be raised under the Shareholder Purchase Plan is A$2.64 million. Applications will be treated on a first come, first served basis up to this level. Applications received exceeding this level will be returned to shareholders.

An Offer Letter, Terms and Conditions of the Shareholder Share Purchase Plan and an Application Form will be despatched to eligible shareholders following the Record Date.

Commenting on today' s announcement Andean's CEO Mr Wayne Hubert said, "This financing not only provides the remaining funding required to complete Andean's planned exploration programs in 2007, but also provides Andean with the platform to build an excellent long-term shareholder base in North America."