Andean Resources Announces Fourth Quarter Results

FREMANTLE, WESTERN AUSTRALIA, Jul 31 (MARKET WIRE) --
Andean Resources Ltd. (TSX: AND)(ASX: AND) -

QUARTERLY REPORT

For the Quarter Ended 30th June 2008

(Dollars expressed in Australian dollars)

HIGHLIGHTS

- Release of updated resource estimate for Eureka West of 1.4 million
ounces of gold and 23 million ounces of silver

- Closed a $42 million financing by issuing 25.8 million shares to
institutional investors

- In June, Andean completed its Phase 4 drill program with results that
continue to infill and expand the Eureka West high-grade deposit

- Discovery of the new Evita Vein, with results of 9m of 13.7 g/t Au and
61 g/t Ag

- Extension drilling continues to define the 721 Vein, which remains open
to the east and down-plunge

- Strengthening of senior management team in key areas of Operations and
Investor Relations

- At quarter-end, cash balances were $37.7 million

- On schedule to complete the Pre-Feasibility study in September 2008

Wayne Hubert, Managing Director, commented: "With the recent capital
raising and additions to the management team, Andean is well prepared to
continue exploring and developing Cerro Negro. Our flagship, 100% owned
Cerro Negro project will strongly position us as one of the industry's
lowest cost gold producers with tremendous growth potential."

Completed Phase 4 Drill Program Eureka West Veins

The majority of the holes drilled into the Eureka West vein during the
quarter to complete the Phase 4 drill program were infill holes; however,
the grades and widths were significantly higher in the inferred areas of
the resource than had been previously estimated, including: - EDD-813:
11m of 11.7 g/t gold and 110 g/t silver from 300m

- EDD-816: 38m of 17.0 g/t gold and 335 g/t silver from 280m

- ERC-843: 14m of 8.7 g/t gold and 99 g/t silver from 37m

- EDD-853: 7.0m of 84.4 g/t gold and 573 g/t silver from 309m

- ERC-867: 12.0m of 12.6 g/t gold and 838 g/t silver from 382m

The Company is also pleased to report final assays from the Phase 4
drilling (see Table 1 for detailed drill data); including the more
significant results detailed below:

- ERC-865 which intersected mineralization 50m up-dip from previously
released ERC-813 (main intersection 11m, 11.7 g/t Au, 112 g/t Ag) on the
western end of Eureka West with: 3m of 4.7 g/t Au and pending Ag from
270m 4m of 10.7 g/t Au and pending Ag from 277m

Eureka West Resource Upgrade

Based on all the infill and exploration drilling completed at Eureka
through drill-hole ERC-812, Andean released an updated JORC and NI 43-101
compliant resource estimate for the Eureka West Veins on April 16th,
which included the following highlights:

- Infill drilling confirmed continuity of the high gold and silver grades

- Gold and silver grades more than doubled from the previous October 2007
resource estimate

- Total mineral resource tonnage up 15% from the prior estimate

- Contained ounces of gold increased by 119% to more than 1 million
ounces of gold and 18 million ounces of silver; with grades of 12.9 g/t
gold and 235 g/t silver in the Indicated category together with 0.34
million ounces of gold and 4.9 million ounces of silver (at a grade of
10.7 g/t gold and 157 g/t silver) in the Inferred category

The CIMM- and JORC-compliant resource estimate was completed by Reno
Pressacco, P.Geo., a Senior Associate Geologist with Micon International
Limited, who is a Qualified Person as defined by NI 43-101. This resource
estimate for Eureka West will be used in the Pre-feasibility Study which
is nearing completion. The results are summarized in the table below:

-------------------------------------------------------------------
--------
-----------------------------------------------------------
Category Tonnes Au g/t Contained Oz Ag g/t Contained Oz
-------------------------------------------------------------------
Indicated
-------------------------------------------------------------------
1.0 Vein 1,805,000 15.79 916,400 297.84 17,286,200
-------------------------------------------------------------------
1.1 Vein 683,000 5.18 113,800 69.87 1,534,500
-------------------------------------------------------------------
Total, Indicated 2,488,000 12.88 1,030,200 235.26 18,820,700
-------------------------------------------------------------------
Inferred
-------------------------------------------------------------------
1.0 Vein 728,000 12.80 299,600 188.31 4,408,000
-------------------------------------------------------------------
1.1 Vein 245,800 4.57 36,100 62.44 493,400
-------------------------------------------------------------------
Total, Inferred 973,800 10.72 335,700 156.53 4,901,400
-------------------------------------------------------------------
-------------------------------------------------------------------

Eureka Main Vein

Since the first eight holes were drilled into the Eureka Main Vein in
early 2007, this area had not received any drilling until the final
stages of the Phase 4 program, as the exploration focus had previously
been on the Eureka West Vein. Six holes were drilled into this target,
with the results demonstrating similar high grade values to those found
in the Eureka West vein, including:

- EDD-834: 8m of 7.8 g/t gold and 177 g/t silver from 186m

- EDD-849: 2.7m of 29.8g/t gold and 164 g/t silver from 83m

Recently completed drill hole, ERC-856 was drilled to test an outcrop on
one section of the Eureka vein and intersected a wide zone of quartz
veining with low gold values. ERC-856 intersected 2m averaging 4.8 g/t
Au, 4 g/t Ag from 217m, and additional low grade mineralization to 232m.
Clearly, this hole did not intersect a mineralized ore shoot and further
holes are planned in the new Phase 5 program to explore for additional
ore shoots within the Eureka Vein south-east extension.

721 Vein

During the final stages of the Phase 4 drill program, Andean continued to
test the 721 Vein, of which the discovery hole, EDD-721, intersected 17m
of 9.2 g/t gold and 69 g/t silver in June 2007. The results of the recent
drilling campaign included:

- ERC-863: 5m of 13.9 g/t gold and 77 g/t silver from 235m

- EDD-855: 15.0m of 5.6 g/t Au and 13.0 g/t Ag from 41m

Post the end of the quarter; on July 7th, 2008 Andean released results
for the first intercept for EDD-866 with 2m of 8.1g/t gold and 168 g/t
silver from 111m. Subsequently, assays for two additional intercepts for
that drill-hole have been received:

2m of 4.6g/t gold and 107 g/t silver from 123m and;

1m of 17.8 g/t gold and 79 g/t silver from 223m

Assays have now also been received for EDD-871 which tested the western
extent of the 721 Vein, 130m down-dip from EDD-855 (15m of 5.6 g/t Au and
13 g/t Ag) with the following results near the ignimbrite contact: 14.1m
of 5.7 g/t Au and pending Ag from 166.2m

The drill holes testing the depth of the 721 Vein indicated that the
mineralisation is truncated at depth by a similar ignimbrite sequence as
is intersected below the West Vein. Encouragingly however; the 721 Vein
remains open to the east and down-plunge.

Evita Vein

On July 7, the Company announced the discovery of the new Evita Vein,
with drill hole EDD-868 intersecting 9.0m of 13.7 g/t Au and 61 g/t
silver, discovered at 190m below surface in the hanging wall of the
Eureka West Vein at its eastern end. ERC-873 may have intersected the
Evita Vein 350m further to the west with a shallower intersection of 1m
of 9.8 g/t Au and 72 g/t silver from 120m. Further drilling on this vein
is warranted and is scheduled to commence in September, when the new
Phase 5 drill program begins.

Pre-Feasibility Study

The pre-feasibility study (PFS) for Andean's Cerro Negro project is on
schedule to be completed in September 2008, with the results to be
released in October. The PFS has been designed to enable a smooth
transition to a bankable feasibility study (BFS) to be conducted over the
remainder of 2008 and completed during the first half of 2009. Andean
continues to utilize leading industry consultant specialists for all
technical areas of the study to ensure the Company has a high level of
confidence in the results generated. To date, no material issues have
been identified that would compromise the development of an economic
project at Cerro Negro based upon the current mineral resource estimates
and projected operating parameters. A summary of the work completed
during the quarter is as follows:

Resource Modeling:

- The Vein Zone resource modelling continues to be refined and should be
completed by the end of August - an ongoing re-evaluation of all
geological data has resulted in a better understanding of the eastern end
of the deposit, and the definition of a previously-unrecognized flexure
of the vein system into unexplored ground.

Metallurgical Testwork

- Metallurgical testwork is more than 90% complete with more
representative samples being sent to AMMTEC in Perth Australia to
validate the recoveries being determined by PRA Labs of Vancouver.

- Plant design criteria have been determined based on the blending of two
different ore types from Eureka and Vein Zone.

- Optimizing recoveries including lead nitrate addition, oxygen addition,
and increasing cyanide concentration

Mine Planning

Mine Development Associates of Reno, NV, were selected for open pit and
underground mine planning work.

- A preliminary exploration decline design was selected and a Request for
Quotation was prepared for the construction of the decline.

- The resource block models developed by Micon will be used for all mine
planning work.

- Golder Associates, Argentina are developing the geotechnical model and
have collected all data and rock samples. - Hidroar S.A. has completed
the hydrology study and determined six likely locations for production
water wells to be used for processing.

Infrastructure

- A power options study has been completed by Technolatina S.A. outlining
the capital cost and expected operating costs for the generation of
electricity for several combinations of options.

- A general alignment of three possible access roads has been scoped;
ongoing work will define the preferred access option.

- Construction of a wind tower has begun for the collection of wind data
to be used in determining the feasibility of wind generators.

- A conceptual design of a tailings facility has been awarded to DE
Cooper and Associates of Perth Australia and tailings samples have been
sent to labs in Australia for ARD and Geotechnical test work.

- Vector Argentina continues sampling and data collection necessary for
the Environmental Baseline Study (EBS).

- All major chapters of the Environment Base Line Study are in draft form
and undergoing review.

- Ongoing permitting work focuses on the access road and exploration
decline.

2008 Cerro Negro Timeline

- August - Initiate EIS (Environmental Impact Study) permitting process

- September

-- Completion of Pre-Feasibility Study

-- Phase 5 exploration drilling commences

- October - December

-- Release of updated Resource estimate

-- Commencement of Bankable Feasibility Study

MANAGEMENT

Andean continued to strengthen its management team in both the
operational and investor relations functions throughout the quarter. In
April, Stabro Kasaneva, who was previously the General Manager of
Yamana's El Peon mine, joined the Andean team as the Vice President of
Operations. Stabro had spent most of the last ten years working with
Meridian Gold, starting as an underground mine geologist and working his
way up to the General Manager of El Peon. Also joining the Andean team
was Krista Muhr, who joined in June as the Director of Investor
Relations. Krista gained invaluable experience while managing the
investor relations functions for both North American Palladium and
Meridian Gold prior to and during its takeover by Yamana Gold.

CORPORATE

Financings and Liquidity

During the quarter, the Company expended approximately A$ 3.2 to advance
the Cerro Negro project. At quarter-end, Andean had cash balances of
approximately A$37.7 million. During April 2008 additional funds of
approximately A$40 million, net of fees and expenses, were received from
a public offering of 25.8 million shares.

Share Capital

At quarter-end the Company's issued securities were as follows:

- 399.8 million ordinary shares

- 21.4 million unlisted options (at various strike pieces between A$0.25
and A$1.70)

Table 1: Latest Drill Results

----------------------------------------------------------------------------
Hole Zone E N Az Dip From To Width Au Ag TD
----------------------------------------------------------------------------
ERC- EK-SE 2395680 4807437 30 -70 217 219 2 4.8 4 366
856
----------------------------------------------------------------------------
EDD- EKW 2393852 4808345 45 -62 346 348 2 6.5 143 395
864
----------------------------------------------------------------------------
ERC- EKW 2393941 4808327 45 -55 270 273 3 4.7 Pending 348
865 ---------------------------------------------------------------
277 281 4 10.7 Pending
----------------------------------------------------------------------------
EDD- 721 2394700 4807850 360 -60 111 113 2 8.1 168 269.5
866 HW ---------------------------------
123 125 2 4.6 107
----- ---------------------------------
721 223 224 1 17.8 79
----------------------------------------------------------------------------
ERC- EKW 2393790 4808315 45 -55 382 394 12 12.6 382 394
867
----------------------------------------------------------------------------
EDD- Evita 2394450 4807800 360 -60 204 213 9 13.7 61 350
868
----------------------------------------------------------------------------
EDD- EKW 2393870 4808327 45 -65 370 374 4 25.5 120 399
869
----------------------------------------------------------------------------
ERC- 721 2394650 4807700 360 -60 No intersections greater than 433
870 2.5 g/t Au
----------------------------------------------------------------------------
EDD- 721 2394500 4807800 360 -60 166.2 180.3 14.1 5.7 Pending 400
871
----------------------------------------------------------------------------
ERC- 721 2394800 4807800 360 -60 308 309 1 2.8 4 336
873
---------------------------------------------------------------
721 2394800 4807800 360 -60 120 121 1 9.8 72
---------------------------------
HW 233 234 1 3.6 9
----------------------------------------------------------------------------

(1) Intersections are drilled widths, not true widths. True widths are less
than drilled intersections and can be determined from the Eureka cross-
sections provided

(2) Some coordinates and elevations are approximate and subject to final
survey by a licensed surveyor

In the above table, the Gauss Kruger coordinate system and the Campo
Inchauspe datum are used to define drill hole collar positions. However
on the longitudinal projection of the Eureka West Vein, the coordinate
system refers to a local grid established for drilling the Eureka West
Vein.

Quality Control and Assurance

The analytical results quoted in this release are derived from half drill
core in the case of diamond drill holes, or from cuttings in the case of
reverse circulation holes. Samples are prepared on site and a 200 gram
sample crushed to 85% -200 mesh is sent to Alex Stewart Argentina in
Mendoza, Argentina, for gold and silver determination on a 50 gram split
of the assay sample.

Gold is determined initially by fire assay with AA finish. Samples
assaying more than 30 ppm gold are re-assayed using a gravimetric finish.

Silver is determined initially by ICP, and samples assaying more than 100
ppm silver are re-assayed by fire assay with gravimetric finish.

Quality control of the analytical results is maintained by inserting
standards, blanks, and duplicates into the sample run, approximately
every twenty samples. Additional quality control is maintained by sending
assay sample splits to a second laboratory from time to time. These
checks are evaluated statistically at regular intervals.

All analytical data are entered into a Microsoft Access database, with
limited access and numerous checks to ensure integrity of the data.

Note 1: Reno Pressacco has sufficient experience (more than 5 years)
which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to
qualify as a Competent Person as defined in the 2004 Edition of the
"Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves'. Reno Pressacco consents to the inclusion in
the report of the matters based on his information in the form and
context in which it appears. The information in this Report that relates
to Mineral Resources is based on information compiled by Reno Pressacco,
who is a Member of APGO, which is a 'Recognised Overseas Professional
Organisation' ('ROPO') included in a list promulgated by the ASX from
time to time.

Note 2: The information in this Report that relates to exploration
results is based on information provided by David Shatwell who is a
Fellow of the Australian Institute of Geoscientists. Mr Shatwell has
extensive experience relevant to the style and type of mineralisation and
deposits under consideration, and to the activity undertaken, to qualify
as a Competent Person as defined in the 2004 Edition of the "Australian
Code for Reporting of Mineral Resources and Ore Reserves" (the J.O.R.C.
Code). Mr Shatwell consents to the inclusion in this Report on his work
in the form and context in which it appears.

To view a map of the Eureka West Ore Block Model, please visit the
following link:

http://media3.marketwire.com/docs/and731a.pdf

To view a map of the Longitudinal Projection, 721 Vein, please visit the
following link:

http://media3.marketwire.com/docs/and731b.pdf

Appendix 5B

MINING EXPLORATION ENTITY QUARTERLY REPORT

Name of entity
----------------------------------------------------------------------------

ANDEAN RESOURCES LTD
----------------------------------------------------------------------------

ABN Quarter ended ("current quarter")
------------------ --------------------------------

66 064 494 319 30 June 2008
------------------ ---------------------------------

Consolidated statement of cash flows

--------------------------
Current Qtr Year to Date
(12 months)
Cash flows related to operating activities $A'000 $A'000
--------------------------
1.1 Receipts from product sales and related
debtors
1.2 Payments for:
evaluation (a) exploration and (3,254) (11,365)
(b) development
(c) production
(d) administration (2,532) (6,593)
1.3 Dividends received
1.4 Interest and other items of a similar
nature received 248 677
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Other (provide details if material)
--------------------------

Net Operating Cash Flows (5,538) (17,281)
---------------------------------------------------------------------------

Cash flows related to investing activities
1.8 Payment for purchases of: (a) prospects
(b) equity investments
(c) other fixed assets (463) (1,263)
1.9 Proceeds from sale of: (a) prospects 10
(b) equity investments
(c) other fixed assets
1.10 Loans to/from other entities
1.11 Loans repaid by other entities
1.12 Other

--------------------------

Net Investing Cash Flows (463) (1,253)
--------------------------

1.13 Total operating and investing cash flows (6,001) (18,534)
(carried forward)
---------------------------------------------------------------------------

---------------------------------------------------------------------------
1.13 Total operating and investing cash flows (6,001) (18,534)
(brought forward)
---------------------------------------------------------------------------

Cash flows related to financing activities

1.14 Proceeds from the issue of shares, options, etc. 42,896 51,739
1.15 Proceeds from the sale of forfeited shares
1.16 Proceeds from loans
1.17 Repayment of loans
1.18 Dividends paid
1.19 Other - Capital raising expenses (2,126) (2,126)
--------------------------

Net financing cash flows 40,770 49,613
---------------------------------------------------------------------------

Net increase (decrease) in cash held 34,769 31,079

1.20 Cash at beginning of quarter/year to date 5,748 10,722
1.21 Exchange rate adjustments to item 1.20 (2,849) (4,133)

--------------------------

1.22 Cash at end of quarter 37,668 37,668
---------------------------------------------------------------------------

Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related
entities

-----------
Current Qtr
$A'000
-----------

1.23 Aggregate amount of payments to the parties included in
item 1.2 339
-----------

1.24 Aggregate amount of loans to the parties included in
item 1.10
--------------------------------------------------------------------------

1.25 Explanation necessary for an understanding of the transactions
--------------------------------------------------------------------------
Consultancy fees (193)
Directors fees, salaries & superannuation (146)
--------------------------------------------------------------------------

Non-cash financing and investing activities

2.1 Details of financing and investing transactions which have had a
material effect on consolidated assets and liabilities but did not involve
cash flows

--------------------------------------------------------------------------

--------------------------------------------------------------------------

2.2 Details of outlays made by other entities to establish or increase
their share in projects in which the reporting entity has an interest

--------------------------------------------------------------------------

--------------------------------------------------------------------------

Financing facilities available
Add notes as necessary for an understanding of the position

----------------------------
Amount available Amount used
$A'000 $A'000
----------------------------
3.1 Loan facilities

----------------------------
3.2 Credit standby arrangements

------------------------------------------------------------

Estimated cash outflows for next quarter

$A'000
----------------------------

4.1 Exploration and evaluation 1,000

4.2 Development
------------------------------------------------------------

Total 1,000
------------------------------------------------------------

Reconciliation of cash

Reconciliation of cash at the end of the quarter -----------------
(as shown in the consolidated statement of cash Current Previous
flows) to related items in the accounts as follows. Quarter Quarter
$A'000 $A'000
-----------------

5.1 Cash on hand and at bank 3,245 1,439

5.2 Deposits at call 34,423 4,309

5.3 Bank Overdraft

5.4 Other (provide details)

-----------------

Total: cash at end of quarter (Item 1.22) 37,668 5,748
-----------------

Changes in interests in mining tenements

---------------------------------------------------------
Tenement Nature of interest Interest at Interest at
Reference (note (2)) Beginning of End of
Quarter Quarter
---------------------------------------------------------

6.1 Interests in
mining tenements
relinquished,
reduced or lapsed Nil
---------------------------------------------------------
6.2 Interests in
mining tenements
acquired or
increased Nil
---------------------------------------------------------

Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion
rights together with prices and dates.

............................................................................

-------------------------------------------------
Number Number Issue price Amount paid
Issued quoted per up per
security security

-------------------------------------------------
7.1 Preference securities
(description)

-------------------------------------------------
7.2 Issued during Quarter

-------------------------------------------------
7.3 Ordinary securities 399,819,749 399,819,749

-------------------------------------------------
7.4 Issued during Quarter 31,200,000 31,200,000

-------------------------------------------------
7.5 Convertible debt
securities
(description)

-------------------------------------------------
7.6 Issued during quarter

---------------------------------------------------------------------------
Exercise Expiry
7.7 Options Price Date
(description) 4,000,000 $0.25 31/10/09
1,000,000 $0.30 30/04/10
1,000,000 $0.35 31/10/10
7,000,000 $0.30 30/09/10
980,000 $0.35 27/02/09
1,600,000 $0.40 14/03/11
1,600,000 $0.40 30/06/11
3,000,000 $0.70 14/07/11
1,000,000 $1.70 14/04/12
250,000 $1.60 02/06/12

-------------------------------------------------
7.8 Issued during Quarter 1,000,000 $1.70 14/04/12
250,000 $1.60 02/06/12

-------------------------------------------------
7.9 Exercised during 5,000,000 $0.08 30/06/08
Quarter 400,000 $0.40 30/06/11
-------------------------------------------------
7.10 Expired during
Quarter

-------------------------------------------------
7.11 Debentures
(totals only)

-------------------------

7.12 Unsecured notes
(totals only)
-------------------------

Compliance Statement

1. This statement has been prepared under accounting policies which
comply with accounting standards as defined in the Corporations Act or
other standards acceptable to ASX (see note 4).

2. This statement does give a true and fair view of the matters
disclosed.

Sign here: "signed" Date: 31 July 2008
---------------
Ross Arancini
Company Secretary

Notes

1. The quarterly report is to provide a basis for informing the
market how the entity's activities have been financed for the past
quarter and the effect on its cash position. Any entity wanting to
disclose additional information is encouraged to do so, in a note or
notes attached to this report.

2. The "Nature of Interest" (items 6.1 and 6.2) includes options in
respect of interests in mining tenements acquired, exercised or lapsed
during the reporting period. If the entity is involved in a joint venture
agreement and there are conditions precedent which will change its
percentage interest in a mining tenement, it should disclose the change
of percentage interest and conditions precedent in the list required for
items 6.1 and 6.2.

3. Issued and quoted securities The issue price and amount paid up is not
required in items 7.1 and 7.3 for fully paid securities.

4. The definitions in, and provisions of, AASB 1022: Accounting for
Extractive Industries and AASB 1026: Statement of Cash Flows apply to
this report.

5. Accounting Standards ASX will accept, for example, the use of
International Accounting Standards for foreign entities. If standards
used do not address a topic, the Australian standard on that topic (if
any) must be complied with.

Contacts:
North America:
Andean Resources Ltd.
Krista Muhr, Director of Investor Relations
(647) 330-1478
Email: krista.muhr@andeangold.com

Australia/Asia:
Andean Resources Ltd.
Morrice Cordiner, Director
+61 2 9276 1245 or Cell: 0412 270 761
Email: morrice@bigpond.net.au

Andean Resources Ltd.
Warren Gilmour
Director
0402 116 261
Email: warren@andean.com.au
Website: www.andean.com.au

Copyright 2008, Market Wire, All rights reserved.

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