Projects

Overview

In July 2008, AndeanGold established its Peruvian subsidiary, PeruGold Resources S.A.C. ("PGR"), which is based in Lima, Peru. PGR has signed confidentiality agreements with a Canadian junior mining company and private concessionaires relating to a number of projects in southeast Peru. PGR's geological team has also conducted field visits to several mineral properties, principally located north of Lima, and has had preliminary discussions with a number of concessionaires with respect to acquiring an interest in these properties. Having established a foothold in Colombia, AndeanGold plans to increase its exploration activities in Peru.

Peru

Peru, located in western South America, is the third largest country in South America and has a diverse geography, which includes three distinct areas --- the western arid coastal region along the Pacific Ocean, the mountainous Andes that divides the country in half, and the lush Amazon rainforest crossing through the country's borders into Colombia, Ecuador and Brazil. This varied geography reflects the country's diverse exports, which include gold, copper, lead, cotton, crude petroleum, fish and fish products, sugar and coffee. The country's major cities are located along the Pacific coast, and the Pan-American Highway runs the entire length of the country.

Peru is one of the most mineralized regions of the world, being rich in gold, silver, zinc, lead, copper and oil. The country has a long, rich mining history of over 400 years, dating back to pre-Colombian times. The country's government is mining friendly. The Peruvian mining law was reformed and simplified in 1991, allowing foreign companies to hold 100 percent of mineral concessions, resulting in an attractive framework for the development of mineral projects. Mining companies are required to pay an annual land tax of US$3.00 per hectare of land held, and as long as they meet this minimal payment, the companies are able to hold concessions indefinitely. This straightforward mining law and exceptional geological potential has helped the country to attract one of the largest budgets for mineral exploration and development in the world.

In an annual survey of mining industry insiders by The Frasier Institute, Peru ranked as the seventh best country for mining investment, behind only the U.S., Canada, Australia, Chile, Mexico and Brazil.

Peru is a major international metals producer:


Geology

Active and paleo-convergent margins of the Peruvian Andes host a diverse array of some of the world's richest gold, copper, zinc, lead and silver deposits. Within the Peruvian segment of the Andean Cordillera, world-class deposit styles that are currently being exploited include porphyry, high and low sulphidation epithermal, iron oxide, skarn, and manto and chimney deposits. Although much of this mineral wealth can be attributed to magmatic pulses at key ages within the last 70 million years, the geological setting of major deposits is related to structures that have been active since the early Paleozoic.

The modern day Andean Cordillera is principally the result of a 240 million year history of subduction-related tectonism along the western margin of the Brazilian Shield, which began in the Early Triassic and continues today. This long-lived cycle of east directed subduction beneath the South American Plate formed a linear volcano-plutonic arc with a landward back arc basin, along what was the coast of Peru. Magmatism along the arc was episodic, being regularly disrupted by shortening events that caused inversion of the back arc volcano-sedimentary sequences, and migration of the center of volcanism and intrusion.

With few exceptions, the major ore systems known from Peru are associated with arc-related igneous and volcanic rocks. Metallogenic zoning is characteristic of continental margin activity where early episodes are dominated by copper-gold mineralization close to the subduction trench, progressing to zinc-lead then tin-tungsten systems further inside the continental margin.