Andean Resources Ltd.: Quarterly Report for the Quarter Ended September 30th 2009

PERTH, AUSTRALIA, Oct 29 (MARKET WIRE) --
Andean Resources (TSX: AND)(ASX: AND) is pleased to report the results
for the quarter ended September 30, 2009 covering the Company's
activities at its 100% owned Cerro Negro epithermal gold project in
southern Argentina. Good progress continues to be made in the exploration
programs designed to increase the Company's overall gold and silver
resources; in the bankable feasibility study; in site infrastructure; and
in building a team to enable the path to production with the following
highlights:

Highlights

- Further drilling at the Bajo Negro discovery extended known strike
length to over 1 kilometer with the vein remaining open along strike and
to depth

-- BDD-925: 9.4m of 22.1 g/t Au and 42 g/t Ag from 242m

-- BDD-937: 9.6m of 22.1 g/t Au and 30 g/t Ag from 267m

-- BDD-942: 13.5m of 13.7 g/t Au and 46 g/t Ag from 308m

-- BDD-954: 4.9m of 21.3 g/t Au and 41 g/t Ag from 279m

-- BDD-955: 5.75m of 104.9 g/t Au and greater than 45 g/t Ag from 263m

- Completion of the first ever winter drill program at Cerro Negro

- New Bajo Negro discovery to be included in the Bankable Feasibility
Study

- Underground contractor to mobilize to site in the fourth quarter of 2009

- Appointment of Louis Gignac as Chairman of the Board

- Appointment of Richard Leclerc as Vice President, Operations

- Cash balances at quarter-end were A$95.2M

Exploration Activities

Bajo Negro Drilling - continued resource expansion

Throughout the first ever winter drill season at Cerro Negro, the
Company's main drilling focus was on the Bajo Negro area, located 13
kilometers from the Eureka West veins and 2 kilometers south of Vein
Zone. For the entire winter drill program, 2 Major winterized diamond
core rigs were used to extend and infill the deposit.

Most of the holes drilled during the quarter extended the mineralization
to the northwest and delineated a second ore-shoot northwest of the shoot
defined by drilling in the prior quarter. Most of this shoot is concealed
below a post-mineral breccia deposit, which reaches over 200 meters
thick. This northwest shoot has a wider and/or higher grade core as
defined by the following intersections:

- BDD-937: 9.6m of 22.1 g/t Au from 266.75m and 5.7m of 17.7 g/t Au from
285.05m

- BDD-942: 13.5m of 13.7 g/t Au from 308m

- BDD-946: 17.7m of 12.2 g/t Au from 231.9m

- BDD-954 : 4.9m of 21.3 g/t Au from 278.9m

- BDD-955: 5.75m of 104.9 g/t Au from 262.5m including 0.5m of 1071 g/t
Au from 265.7m

- BDD-956: 12.35m of 12.1 g/t Au from 270.8m.

The shoot remains open to the northwest and at depth, where slightly
narrower or lower grade mineralization has been intercepted in the
following holes:

- BDD-958: 3.4m of 13.8 g/t Au from 309m

- BDD-960: 6.55m of 10.4 g/t Au from 337.9m

- BDD-962: 7.85m of 8.2 g/t Au from 362m

Four other holes explored the southeast end of the vein:

- BDD-936: 2.6m of 5.6 g/t Au from 180.1m

- BDD-938: 3m of 17 g/t Au from 197m

- BDD-939 and BDD-941: No significant intersections.

Four holes drilled in the previous quarter, with assays pending,
intersected the vein between the two ore shoots:

- BDD-920: 3.3m of 7.6 g/t Au from 224.1m

- BDD-922: 2.5m of 4.8 g/t Au from 281.4m

- BDD-926: 1m of 3.1 g/t Au from 162m

- BDD-932: 15.4m of 12 g/t Au from 214.25m (transition to the NW shoot)

Step-out exploration has commenced 500m north of existing drilling on the
inferred strike extension of the Bajo Negro vein As a summary of the
above, drilling at Bajo Negro during the quarter has extended the length
of mineralization to over 1 kilometer. The mineralization is still open
to the northwest and at depth.

Regional Exploration targets

Mariana Norte

Float sampling and geological mapping in the Mariana Norte area,
commenced in the previous quarter and continued throughout the quarter
ended September 30th. A total of 77 samples have been collected over a
northwest-trending area of 2 x 0.5 kilometers. These include 40 vein
quartz float samples with encouraging epithermal textures which average
6.6 g/t Au, 41 g/t Ag. An induced polarization survey is in progress to
further define the drill target.

San Marcos

At San Marcos, located north of the Mariana targets, a northwest-trending
breccia vein is developed at the faulted contact between andesite and
ignimbrite, over an outcrop length of 200 meters. An east-west vein
splays off the breccia vein and is exposed over 250 meters. Previous
explorer, Pegasus Gold International had drilled an RC hole into each of
these structures during the 1990's. Both holes intersected the
structures, with 3 meters, 3.65 g/t Au in the east-west vein and 2
meters, 2.64 g/t Au in the breccia vein.

Sixteen rock chips were collected from the east-west vein during the
quarter with an average 12.2 g/t Au, 52 g/t Ag. Six rock chips from the
breccia vein assayed 0.2 to 1.9 ppm Au, and one additional sample assayed
121 g/t Au, 59 g/t Ag.

Las Margaritas

Existing information on the Las Margaritas prospect, in the southern part
of the Cerro Negro tenements, was compiled, and a field visit to the
prospect was made. The prospect contains small quartz veins in
ignimbrite. Two rock chip samples of veins assayed 0.2 g/t Au, 37 and 80
g/t Ag. No immediate further exploration is planned.

Geophysics

Argali Geofisica was contracted during the quarter to carry out ground
magnetics and IP surveys covering areas at Vein Zone-Bajo Negro and
Eureka-Mariana-San Marcos.

Ground Magnetics

Magnetometer coverage will extend existing coverage at Eureka-Mariana to
the east and north to provide continuous cover for the San Marcos and
Bajo Nero prospects. The sector extending northwest from Bajo Negro has
been completed and shows northwest trends, which will be used to assist
in planning step-out drilling.

Induced Polarization (IP)

IP surveys commenced during the quarter will extend existing coverage at
Eureka and Vein Zone to cover the Mariana Norte, San Marcos, and Bajo
Negro extensions. East-west trending anomalies in the San Marcos area
potentially extend the outcropping vein eastward below superficial cover.
At the end of the quarter, IP coverage was progressing westward to cover
the area of anomalous float at Mariana Norte.

Bankable Feasibility Study

During the quarter, work on the Bankable Feasibility Study (BFS) was
expanded to include the new Bajo Negro discovery. With the success of the
recent extension drilling, Andean believes Bajo Negro is likely to have a
material impact on the BFS in terms of plant location, metallurgy,
improved mine-life and financial returns. Accordingly, post the end of
the quarter, the Company announced that the BFS will be modified in the
following ways:

- Infill drilling at Bajo Negro will be completed during this current
quarter for inclusion in a resource estimate for the first quarter of
2010.

- Metallurgical testwork will be completed on Bajo Negro composites
during the first quarter of 2010. Initial leach testing of the pulp
rejects has been positive.

- Testing a more centrally located processing site, that has been
identified in a different watershed and more central to Bajo Negro,
Mariana, Vein Zone and San Marcos. Condemnation and a geotechnical
assessment of the new process and tailings site will begin in November.

- A modified mine plan including Eureka West, Bajo Negro and Vein Zone
will be finalized in the second quarter of 2010, and is expected to
confirm, as part of the BFS, a more robust mine-life and enhanced project
returns.

Allowing for these changes to the current scope of work, the BFS is
expected to be completed by the end of the second quarter 2010.

During the quarter the following work was undertaken in relation to the
BFS:

- Metallurgical testwork on the Eureka composites were completed by
AMMTEC in Perth, Australia with positive results. Details will be
published once the work has been summarized.

- Alternative processing routes are being investigated for suitability
and cost comparisons with a focus on carbon absorption and EMEW cells. To
date, the leading processing technology for Cerro Negro remains Merrill
Crowe, which is a proven technology.

- Preliminary mine planning at Eureka West has been developed by NCL
Engineering, out of Santiago, Chile. Underground mining methods being
investigated include transverse mining in the wider zones with cut and
fill mining in the narrower zones. A raise bore ore-hoist is also being
studied as a potential operating cost savings due to the geometry of the
orebody. A geotechnical assessment of the Eureka orebody generally
concludes the rock is of moderate strength with varying levels of ground
support required. Stope sizes are still being optimized based on mining
method and location along the veins. It is expected based on
hydro-geological studies completed by Hidroar that manageable levels of
water will be encountered in ramp development and in mining.

- Paste backfill is no longer being considered for use in the mine due to
the change in plant location and to the cost of paste backfill.
Development waste from underground will be used as backfill. Thickened
tailings will be the preferred method of tailings storage and will reduce
the footprint of the tailings storage facility and minimize overall water
requirements.

- Two access roads are being investigated with Vector Engineering - the
north access through the San Jose mine and a new north-east access.

- The cost of sharing and extending the existing powerline from the San
Jose mine is being investigated.

- All Environmental Baseline Studies have been completed and a request
for a comprehensive Socioeconomic Study has been given to Vector
Engineering of Mendoza. Vector will also be the lead contractor writing
the Environmental Impact Study which will be completed in parallel with
the BFS as much as possible. - The final BFS document will be compiled by
Ausenco in a manner similar to the PFS with contributing authors
responsible for their individual sections. A complimentary 43-101
Technical Report on the BFS will be written by MDA within 45 days after
the release of the BFS results.

Underground Ramp

The access for the underground mine remains one of the main items on the
critical path to production and Andean plans on finalizing the
construction contract for the decline into the Eureka West ore body
during the current quarter, followed by mobilization of the contractor to
begin construction of the portal before the end of 2009.

Initial bids by contractors were higher than expected mainly as a result
of the contractors amortizing the underground equipment over the two-year
ramp construction. In order to reduce the ramp construction cost, Andean
will be purchasing the underground mine equipment and diesel generators.
Orders are currently being placed. This equipment will continue to be
used by the Company throughout the life of mine once the underground ramp
has been constructed. All permits for this exploration decline
(underground ramp) have been received.

Cerro Negro Timeline

- Drilling Campaign - ongoing with 2 UDR rigs onsite focusing on
extending and infill drilling the Bajo Negro vein; and a UDR 1000 being
mobilized to commence exploration drilling at Bajo Negro, Mariana and San
Marcos areas.

- Bankable Feasibility Study - revision to include the Bajo Negro vein;
and is now scheduled for completion during June 2010.

- Underground Decline - contractor selected; contract being finalized
with mobilization expected in the November-December timeframe.

Corporate

Appointments

During the quarter, the Company was pleased to announce two significant
appointments to its Board and management teams, as new skills are
required to assist in bringing Cerro Negro into production.

Louis Gignac was appointed as the new Chairman of the Board of Directors,
effective July 15, 2009. Mr. Gignac is the President of G Mining
Services, Inc., a private consultancy, and previously served as the
President and CEO of Cambior Inc. from its creation in 1986 until its
acquisition by Iamgold Corporation in November 2006. Mr. Gignac has held
previous management positions with Falconbridge, Exxon Minerals and also
served as a professor of mining engineering at Laval University, and
currently sits on four other boards. Mr. Gignac holds a Doctor of
Engineering from the University of Missouri-Rolla, a masters in mineral
engineering from the University of Minnesota and a degree in mining
engineering from Laval University.

Mr. Patrick Esnouf stepped down as the Chairman, but will continue with
the Company as independent director of the Board.

The appointment of Mr. Richard Leclerc as Vice President, Operations, was
announced on September 14, 2009. Mr. Leclerc is a registered professional
mining engineer that graduated from Laval University in Quebec in 1981,
who is fluent in English, Spanish and French. Over his 27 years of mining
experience, Mr. Leclerc has held senior operating and development
positions with Falconbridge in Chile and Peru, with Cambior in Chile,
Peru and Argentina, and for Teck Cominco in Chile.

Most recently, Mr. Leclerc was Chief Operating Officer for Centenario
Copper and in charge of the construction and development of the Franke
project in Chile, prior to Quadra Mining's takeover of Centenario. As VP
Operations, Mr. Leclerc has assumed overall responsibility for the timely
development and operation of the Cerro Negro project.

Share Capital

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

- 462.4 million ordinary shares

- 18.8 million unlisted options (at various strike prices between A$0.25
and A$1.70)

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 by ACME Analytical
Laboratories SA (Mendoza) in Mendoza, Argentina, and assayed by the same
laboratory in Santiago, Chile. Gold is determined initially by fire assay
with AA finish. Samples assaying more than 10 ppm gold are re-assayed
using a gravimetric finish. Silver is determined initially by AAS, 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.

The information in this quarterly 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 mineralization 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 JORC
Code). Mr. Shatwell consents to the inclusion in this Report on his work
in the form and context in which it appears.

Andean Resources Ltd. is a dual listed company (TSX: AND)(ASX: AND),
actively and aggressively exploring for gold resources in Argentina. The
company is well positioned to become a mid-tier gold producer over the
next two years as it commences production from its 100% owned Cerro Negro
project. This high-grade, world-class deposit is located in the
mining-friendly province of Santa Cruz, in southern Argentina, and
contains a growing resource base of over 2.5 million ounces of gold. In
order to expand its resource base and add to the future production
profile, Andean is committed to ongoing exploration and building its
resource inventory at the Cerro Negro project and, in the process,
generating enhanced returns for its shareholders as a platform for future
growth.

MANAGEMENT'S DISCUSSION & ANALYSIS

FOR THE QUARTER ENDED

SEPTEMBER 30, 2009

Expressed in Australian dollars unless otherwise indicated

MANAGEMENT'S DISCUSSION & ANALYSIS

Introduction

The following Management's Discussion and Analysis ("MD&A") of the
operating results and financial position of Andean Resources Limited (the
"Company" or "Andean") should be read in conjunction with the unaudited
financial statements of the Company for the quarter ended September 30,
2009 and the audited consolidated financial statements and related notes
for the year ended June 30, 2009 which have been prepared in accordance
with Australian Accounting Standards, other authoritative pronouncements
of the Australian Accounting Standards Board, Australian Accounting
Interpretation and the Corporation Act 2001. Australian Accounting
Standards include Australian equivalents to International Financial
Reporting Standards ("AIFRS"). Compliance with AIFRS ensures that the
consolidated financial statements and notes of Andean Resources Limited
comply with International Financial Reporting Standards ("IFRS"). All
amounts in this report are in Australian dollars ("AUD") unless otherwise
noted.

Additional information about the company is filed in Australia and Canada
in conjunction with the ASX and TSX listings. This includes the Company's
Annual Information Form for the year ended June 30, 2009 (the "Annual
Information Form" or "AIF") which is available on SEDAR at www.sedar.com.
Under Canadian securities laws the Company is a "designated foreign
issuer" as defined in "National Instrument 71-102 - Continuous Disclosure
and Other Exemptions Relating to Foreign Issuers."

Company Overview

The Company is an Australian based mineral resource corporation engaged,
through its subsidiaries, in the acquisition, exploration and development
of precious metals properties. To date, the Company has focused entirely
on its 100% owned Cerro Negro Project in Southern Argentina. Through its
ongoing exploration efforts, the Company has dramatically increased
reserves and continues to identify new areas for growth.

Selected Annual Financial Information

The following table presents selected financial information of the
Company at the date and for the periods indicated. The information set
forth below is derived from the historical consolidated financial
statements and the related notes, and should be read in conjunction with
the historical consolidated financial statements of Andean and related
notes along with other disclosure included within the MD&A.

Selected Financial Information
(thousands of AUD, except per share amounts,
rounded to the nearest thousand)

Quarter Ended Quarter Ended
------------------- --------------
September 30, 2009 June 30, 2009
------------------- --------------

Interest and other income (4,776) (1,805)

Net Loss (6,789) (7,356)

Loss per share (0.0150) (0.0183)

Total assets 158,315 73,552
Long-term liabilities 212 219

Results of Operations

As a result of increased exploration, Andean continues to grow and
advance. To date, the company has relied on equity financing to fund
exploration programs on its properties in Argentina. The following
comparative analysis of selected expenditures and information explains
the effect of such growth on the results of the Company.

Andean reported a net loss for the quarter ended September 30, 2009 of
$6.8 million or $0.0150 per share, which was $0.6 million lower than the
net loss for the previous quarter. The Loss was lower primarily due to
reduced share based payments resulting from the number of options granted
and the revaluation of unexercised options and share entitlements; offset
by a higher foreign currency exchange loss.

For the quarter ended September 30, 2009, the Company incurred
exploration expenditures of $2.9 million on its resource property
compared to $4.5 million for the quarter ended June 30, 2009. The costs
were less for the most recent quarter because the exploration program
slows during the winter months of July and August due to the challenges
of cold weather. Of the exploration expenditures in the quarter, the vast
majority was spent to explore and develop the Cerro Negro property.
During the quarters ended September 30, 2009 and June 30, 2009,
exploration primarily included expenditures for drilling, labor and
consulting, geology, metallurgical studies, road and drill site
construction, environmental permitting, and resource modeling. During the
quarter ended September 30, 2009, drilling accounted for approximately
34% of the costs, labor and consulting made up approximately 45%, and
maintenance and equipment rentals were approximately 6%.

Interest and other income, which was primarily made up of foreign
currency exchange losses during the quarters ended September and June
2009, decreased $3.0 million for the quarter ended September 30, 2009
compared to the quarter ended June 30, 2009. These losses were the result
of the recovery from the devaluation of the Australian dollar in the
latter part of 2008. The Company's presentation currency is the
Australian dollar, and as a result will incur foreign exchange gains and
losses from the settlement of transactions denominated in foreign
currencies. Furthermore, the Company's financial instruments are mainly
held in foreign currencies. Due to fluctuating exchange rates with the
Australian dollar, a foreign exchange loss of $4.8 million was recorded
in the current quarter, which was a change from the foreign exchange loss
of $1.8 million recorded in the quarter ended June 30, 2009.

Employee benefits expense were $0.6 million for the quarter ended
September 30, 2009. This spending is consistent over quarters and relates
to the salaries and benefits of employees hired to facilitate company
growth.

The depreciation expense recorded on the income statement reflects the
amount charged for furniture and office equipment used in administrative
offices.

Consultancy fees for the quarter ended September 30, 2009 were $0.4
million compared to the quarter ended June 30, 2009 of $0.9 million.
Consulting decreased as a result of seasonality of work on the project
during the winter months of July and August.

Corporate and administrative expense increased by $0.2 million over the
current quarter. The main drivers included rentals & leases and audit
fees.

Share based payments decreased $2.6 million for the quarter ended
September 30, 2009 compared to the quarter ended June 30, 2009. This was
a result of the number of options granted and the revaluation of
unexercised options as of June 30, 2009. This expense represents a
reserve to recognize the fair value of options issued but not exercised
and share entitlements pursuant to the Company's share plan.

Summary of Interim Results

Over the past six half-year periods, the Company's expenses have been
generally increasing attributable to matters described in "Results of
Operation" explained above.

The following table sets out the financial results for each of the
Company's six most recently completed half-year periods. The half-year
financial results are in accordance with the AIFRS applied on the same
basis as the annual financial statements incorporated by reference
herein.

Selected Interim Financial Information
(thousands of AUD, rounded to the nearest thousand)

Six Month Period Ending
(unaudited)
Jun. 30, Dec. 31, Jun. 30, Dec. 31, Jun. 30, Dec. 31,
2009 2008 2008 2007 2007 2006
------- ------- ------- ------- ------- -------

Interest and
other income (1,987) 5,226 376 278 249 120

Net Gain (Loss) (9,500) 2,263 (7,560) (3,422) (2,883) (1,945)

Interest and other income fluctuations are based on the amount of cash
and cash equivalents as well as foreign currency exchange gains. The
timing of financings affects the amount of interest earned. The
fluctuation of exchange rates on the cash held in foreign denominated
currencies was the cause of the significant movement in the two most
recent periods.

Net loss has increased over time due primarily to the acceleration of
exploration. The increase in net loss is consistent with the growth in
the company to support the exploration activities. The number of meters
drilled in a given period has been a significant indicator of the support
expenditures and therefore overall loss during the various periods.
During the six months ending December 31, 2008, the devaluation of the
Australian dollar caused a significant reporting gain. Whereas the
subsequent strengthening of the Australian dollar during the six months
ending June 30, 2009 negated a portion of the previous gain, thus
reporting a foreign currency exchange loss.

Capital Resources and Liquidity

As at September 30, 2009, the Company had working capital of $91.2
million. This amount represents a working capital increase of $82.2
million from June 30, 2009. This change was primarily due to the July 15,
2009 offering of 56,250,000 common shares at $1.60 Canadian dollars (CAD)
per share, for gross proceeds of CAD 90.0 million. The Company is
adequately funded to carry out its planned exploration and development
programs into the construction phase.

Critical Accounting Estimates and Assumptions

Andean makes estimates and assumptions concerning the future. The more
significant estimates and assumptions included in the consolidated
financial statements are:

(a) Restoration obligations

The Company estimates the present value of the costs of legal and
constructive obligations to restore operating locations in the period in
which the obligations arises.

(b) Shared-based payment transactions

The Company measures the cost of equity settled share based payments at
fair value at the grant date using the Black-Scholes model.

Outlook

The Company continues to drill the existing veins to expand the resource.
The work on the Bankable Feasibility Study (BFS) is ongoing with both
Eureka and Vein Zone. Additionally, Andean recently evaluated the Bajo
Negro discovery and has determined to include it in the BFS as it has
potential to materially enhance the already attractive economics of the
Cerro Negro project. The Company is committed to steady growth and rising
value through successful exploration and development of mineral deposits.
The Company will continue to increase its gold and silver resources
through the prudent exploration of priority targets in the upcoming
fiscal year. Management will continue to evaluate all options in an
effort to advance its properties while limiting financial exposure to the
Company.

Risk and Uncertainties

This discussion and analysis may contain disclosures that are
forward-looking. Forward-looking statements are subject to risks and
uncertainties, which could cause actual results to differ materially for
those in such forward-looking statements.

The Company is a mineral exploration and development company and as such
is exposed to a number of risks and uncertainties that are not uncommon
to other companies in the same business.

The Company's financial success is subject to, among other things,
fluctuations in metal prices and foreign exchange rates, and its ability
to obtain financing to continue and complete the development of those
properties it has classified as assets.

FINANCIAL STATEMENTS

FOR THE QUARTER ENDED

SEPTEMBER 30, 2009

Expressed in Australian dollars unless otherwise indicated

ANDEAN RESOURCES LIMITED
CONSOLIDATED BALANCE SHEETS
AT SEPTEMBER 30, 2009 - Unaudited
AT JUNE 30, 2009 - Audited
(Thousands of Australian Dollars)

September 30 June 30
2009 2009
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Current assets
Cash and cash equivalents 95,231 13,598
Trade and other receivables 1,073 586
----------------------
Total current assets 96,303 14,184

Non-current assets
Receivables 5,135 4,930
Property, plant and equipment 3,390 1,930
Exploration and evaluation costs carried forward 53,486 52,509

----------------------Total non-current assets
62,011 59,368

Total assets 158,315 73,552
----------------------

Current liabilities
Trade and other payables 5,066 5,141
----------------------
Total current liabilities 5,066 5,141

Non-current liabilities
Payables (0) 0
Provisions 212 219
----------------------
Total non-current liabilities 212 219

Total liabilities 5,278 5,360
----------------------

Net assets 153,037 68,192
----------------------
----------------------

Equity
Contributed equity 190,366 99,201
Reserves 10,214 9,748
Accumulated losses (47,544) (40,756)
----------------------

Total equity 153,037 68,192
----------------------
----------------------

ANDEAN RESOURCES LIMITED
CONSOLIDATED INCOME STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009 - Unaudited
FOR THE YEAR ENDED JUNE 30, 2009 - Audited
(Thousands of Australian Dollars)

Three months ended Year ended
September 30 June 30
2009 2009
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenue from continuing operations
Interest income 43 521
Exchange loss (4,819) 2,718
Bank Commissions (75) (289)
Employee benefits expense (594) (1,654)
Depreciation expense (3) (13)
Consultancy fees (397) (2,066)
Corporate and administrative expenses (413) (927)
Impairment of receivable - (808)
Legal fees (91) (540)
Promotional expense (45) (228)
Share based payments (88) (3,060)
Stock Exchange fees (120) (78)
Travel & accomodation costs (185) (811)
----------------------
Net Income/ (Loss) before tax (6,788) (7,237)

Income tax expense - -
----------------------

Net Income/ (Loss) after tax (6,788) (7,237)
----------------------
----------------------

Basic and diluted loss per share (cents) (1.4998) (1.7958)

Appendix 5B

MINING EXPLORATION ENTITY QUARTERLY REPORT

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

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

Quarter ended
ABN ("current quarter")
-------------- -----------------
66 064 494 319 30 September 2009
-------------- -----------------

Consolidated statement of cash flows
---------------------------
Current Qtr Year to Date
(3 months)
Cash flows related to operating activities $A'000 $A'000
---------------------------
1.1 Receipts from product sales and related
debtors
1.2 Payments for: (a) exploration and
evaluation (2,874) (2,874)
(b) development
(c) production
(d) administration (1,918) (1,918)
1.3 Dividends received
1.4 Interest and other items of a similar
nature received 50 50
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 (4,742) (4,742)
----------------------------------------------------------------------------
Cash flows related to investing
activities

1.8 Payment for purchases of: (a) prospects
(b) equity
investments
(c) other fixed
assets (1,544) (1,544)
1.9 Proceeds from sale of: (a) prospects
(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 (1,544) (1,544)
---------------------------

1.13 Total operating and investing cash flows
(carried forward) (6,286) (6,286)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
1.13 Total operating and investing cash flows
(brought forward) (6,286) (6,286)

Cash flows related to financing activities

1.14 Proceeds from the issue of shares,
options, etc. 95,091 95,091
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 (4,505) (4,505)
---------------------------

Net financing cash flows 90,586 90,586
----------------------------------------------------------------------------

Net increase (decrease) in cash held 84,300 84,300

1.20 Cash at beginning of quarter/year to date 13,598 13,598
1.21 Exchange rate adjustments to item 1.20 (2,667) (2,667)

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

1.22 Cash at end of quarter 95,231 95,231
----------------------------------------------------------------------------

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 1.2 449
------------
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 (296)
Directors fees & superannuation (153)
----------------------------------------------------------------------------

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 4,000
4.2 Development
----------------------------------------------------------------------------

Total 4,000
----------------------------------------------------------------------------

Reconciliation of cash

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

5.1 Cash on hand and at bank 4,241 1,755

5.2 Deposits at call 90,990 11,843

5.3 Bank Overdraft

5.4 Other (provide details)
----------------------

Total: cash at end of quarter (Item 1.22) 95,231 13,598
----------------------

Changes in interests in mining tenements

------------------------------------------------------
Tenement Nature of Interest at Interest at
Reference interest Beginning of End of
(note (2)) Quarter Quarter
------------------------------------------------------
6.1 Interests in
mining tenements Nil
relinquished,
reduced or lapsed
------------------------------------------------------
6.2 Interests in
mining tenements Nil
acquired or
increased
------------------------------------------------------

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 security up per
security
----------------------------------------------------------------------------
7.1 Preference
securities
(description)
------------------------------------------------------
7.2 Issued
during
Quarter
----------------------------------------------------------------------------
7.3 Ordinary
securities 462,354,325 462,354,325
------------------------------------------------------
7.4 Issued during
Quarter 56,833,142 56,833,142
----------------------------------------------------------------------------
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
6,000,000 $0.30 30/09/10
150,000 $0.40 14/03/11
1,412,500 $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
1,000,000 $0.75 31/07/12

------------------------------------------------------
7.8 Issued during
Quarter
------------------------------------------------------
7.9 Exercised during 100,000 $0.40 14/03/11
Quarter 150,000 $0.40 14/03/11

------------------------------------------------------
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.

Date: 29 October 2009

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.

A.C.N. 064 494 319

Contacts:
Andean Resources Ltd.
Krista Muhr
Director of Investor Relations
647.330.1478
krista.muhr@andeangold.com

Andean Resources Ltd.
Morrice Cordiner
Director
+61 (2) 9276.1245 or Cell: +61 (0) 412.270.761
morrice@bigpond.net.au

Andean Resources Ltd.
1/1 Nairn Street, Fremantle
Western Australia 6160
+61 (8) 9430 9966
+61 (8) 9430 9965 (FAX)
www.andeangold.com

Copyright 2009, Market Wire, All rights reserved.

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