VANCOUVER, BRITISH COLUMBIA - Andean American Mining Corp. (TSX VENTURE:AAG - News; FRANKFURT:AQN - News; BVL:AAG) -

The Board of Directors of Andean American Mining Corp. reports on its Consolidated Interim Financial Statements and Management Discussion and Analysis for the quarter ended June 30, 2008. During the Quarter, the Company strengthened the focus of its resources on the development of the Invicta Project and the progressive exploration at the Sinchao property. At the Santa Rosa mine, there continues to be a lack of support for mining from the Virundo community and so production will continue to diminish. Management has reviewed the carrying value of the Santa Rosa mine and determined that it should be written down to a nil value.

Highlights:

Financial:

- The net loss for the period was $988,614 or $0.013 per share compared with net loss of $1,086,321 or $0.018 per share in the comparable period last year. Stock based compensation expense, general and administrative expenses and direct operating costs increased over the same period in the prior year. This increase was offset by decreases in amortization and depletion.

- The loss from operations in this quarter amounting to $849,982, compared with a loss of $943,882 in the comparable period last year, was due to low recoveries from recycled materials and increased operating costs. The increased operating costs were mainly due to much higher waste to ore ratios, the poor recoveries from recycled minerals and lower volumes of minerals processed which increased the unit cost of production.

- Cash used in operations in the quarter before changes to non-cash working capital items was a deficit of $787,437 compared to a deficit with $273,841 in last year’s quarter. The decrease was primarily due to lower revenues and increases in direct operating costs and general and administrative expenses.

- Revenues for the three month period ending June 30, 2008 were $1,020,212 compared with $1,128,552 in the comparative period in fiscal 2007. Sales of gold and gold equivalents in the quarter were 1,188 ounces compared to 1,874 ounces in the comparable period last year.

Operational:

- At Invicta, Wardrop Engineering is completing a NI 43-101 Technical Report and working on a feasibility study. A 1200 metre adit has been driven at 3400 metres elevation, drilling and sampling continues. During the first quarter mineralization was confirmed over 2.7 kilometres, connecting the Atenea Structure with the Dany Vein and the Pucamina Vein.

- At Sinchao, a 5,000 metre drill program was completed and mineralization has been identified over an area of approximately 750 metres by 300 metres, and to a depth of approximately 400 metres. Step-out drilling continues to intersect mineralization, with drill rigs working 150 metres to the northwest and 300 metres to the southeast.

The complete Management Discussion and Analysis and Financial Statements will be filed with SEDAR at www.sedar.com. For further information call (604) 681-6186 or toll free: 1-888-356-4784 or visit our website at www.andeanamerican.com. Andrew Gourlay, P. Geol., President of Andean American Mining Corp. is the Qualified Person for the technical disclosure in this news release.

On behalf of Andean American Mining Corp.,

John Huguet, President & CEO

This news release may contain forward-looking information within the meaning of the Securities Act (Ontario) (”forward-looking statements”). Such forward-looking statements may include the Company’s plans for its mineral projects, the overall economic potential of its properties, the availability of adequate financing and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements expressed or implied by such forward-looking statements to be materially different. Such factors include, among others, risks and uncertainties relating to potential political risks involving the Company’s operations in a foreign jurisdiction, uncertainty of production and costs estimates and the potential for unexpected costs and expenses, physical risks inherent in mining operations, currency fluctuations, fluctuations in the price of gold and other metals, completion of economic evaluations, changes in project parameters as plans continue to be refined, the inability or failure to obtain adequate financing on a timely basis, and other risks and uncertainties, including those described in the Company’s Financial Statements, Management Discussion and Analysis and Material Change Reports filed with the Canadian Securities Administrators and available at www.sedar.com.

Andean American Mining Corp. (TSX VENTURE:AAG - News; FRANKFURT:AQN - News; BVL:AAG) is an international mining and exploration company focused on growth. The Company is actively pursuing new targets of potential early stage gold and silver prospects in Peru and currently has two key assets: the 41,500 hectare Invicta gold-silver-copper advanced exploration stage project; 61% of Sinchao Metals Corp., owner of the Sinchao zinc-copper-silver-gold-lead mineralization project.

ANDEAN AMERICAN MINING CORP.

INTERIM CONSOLIDATED BALANCE SHEETS
(Expressed in Canadian Dollars, except where noted)

June 30, June 30, March 31,
2008 2007 2008
——— ——— ——–
(Restated-
Note 17)
(unaudited) (unaudited) (audited)
$ $ $
ASSETS
Current
Cash and cash equivalents 2,424,717 5,273,400 5,973,166
Accounts receivable (Note 4) 916,001 803,163 843,756
Prepaid expenses 144,041 268,931 239,732
Mineral on pads and inventories
(Note 5) 588,864 2,849,141 752,228
———- ———- ———-
4,073,623 9,194,635 7,808,882
Mineral on pads (Note 5) - 3,281,576 -
Mineral properties and deferred
costs (Note 6) 36,748,073 30,820,093 33,799,108
Property, plant and equipment
(Note 7) 1,722,685 1,085,287 1,648,965
———- ———- ———-
42,544,381 44,381,591 43,256,955
———- ———- ———-
———- ———- ———-

LIABILITIES
Current
Bank indebtedness 186,907 27,496 92,048
Accounts payable and accrued
liabilities 4,991,894 2,695,726 4,982,436
Deferred income - 225,824 -
Loans payable (Note 34,670 40,941 39,574
Current portion of long term
debt (Note 9) 360,452 466,701 381,300
———- ———- ———-
5,573,923 3,456,688 5,495,358
Long term debt (Note 9) - 101,217 -
Future income tax liabilities 5,609,829 5,146,772 6,080,372
Provision for reclamation and
closure costs (Note 10) 126,072 120,055 127,085
———- ———- ———-
11,309,824 8,824,732 6,207,457
Minority interest 9,754,784 5,957,500 9,752,047
———- ———- ———-
21,064,608 14,782,232 21,454,862
SHAREHOLDERS’ EQUITY
Share capital (Note 11) 69,653,248 64,652,879 69,653,248
Contributed surplus (Note 12) 9,848,329 3,823,604 9,182,035
Deficit (58,021,804) (38,877,124) (57,033,190)
———- ———- ———-
21,479,773 29,599,359 21,802,093
———- ———- ———-
42,544,381 44,381,591 43,256,955
———- ———- ———-
———- ———- ———-
Going concern (Note 1)
Contingency (Note 18)
Subsequent Events (Note 19)

APPROVED BY THE DIRECTORS

“JOHN HUGUET” “BRYAN MORRIS”
————- ————–
DIRECTOR DIRECTOR

The accompanying notes are an integral part of these interim consolidated
financial statements.

ANDEAN AMERICAN MINING CORP.

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS, COMPREHENSIVE INCOME (LOSS)
AND DEFICIT
(unaudited)
(Expressed in Canadian Dollars, except where noted)

Three Months Ended
———————————-
June 30, 2008 June 30, 2007
————- —————
(Restated Note 17)
$ $
REVENUE
Sales of metals 1,020,212 1,128,552
———- ———-
OPERATING EXPENSES
Direct operating costs 1,274,676 1,180,438
Royalty expense 16,873 20,469
Amortization and depletion 6,664 433,903
Selling expenses 38,106 41,886
Stock based compensation 533,875 392,314
Provision for reclamation - 3,424
———- ———-
1,870,194 2,072,434
———- ———-
GROSS PROFIT (LOSS) (849,982) (943,882)

OTHER (INCOME) EXPENSE
General and administrative expenses 499,930 402,926
Interest expense 1,889 14,842
Other (income) expense (23,825) 12,257
Foreign exchange gain (335,761) (913,488)
Dilution loss on sale of shares by
subsidiary - 589,276
Minority interest (3,601) 36,626
———- ———-
138,632 142,439
———- ———-
NET INCOME (LOSS) AND COMPREHENSIVE
INCOME (LOSS) FOR THE PERIOD (988,614) (1,086,321)
DEFICIT, BEGINNING OF PERIOD (57,033,190) (37,790,803)
———- ———-
DEFICIT, END OF PERIOD (58,021,804) (38,877,124)
———- ———-
———- ———-

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
BASIC AND DILUTED 73,620,017 61,940,074

NET INCOME (LOSS) PER COMMON SHARE
BASIC AND DILUTED (0.013) (0.018)

The accompanying notes are an integral part of these interim consolidated
financial statements.

ANDEAN AMERICAN MINING CORP.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
(Expressed in Canadian Dollars, except where noted)

Three Months Ended
———————————-
June 30, 2008 June 30, 2007
————- —————-
CASH PROVIDED FROM (USED FOR): (Restated Note 17)
$ $

OPERATING ACTIVITIES
Net income (loss) for the period (988,614) (1,086,321)
Adjustments for items not
affecting cash:
Amortization and depletion 6,664 433,903
Stock based compensation 533,875 392,314
Minority interest (3,601) 36,626
Dilution loss on sale of shares by
subsidiary - 589,276
Provision for reclamation - 3,424
Unrealized foreign exchange gain on
long-term monetary assets and
liabilities (335,761) (643,063)
———- ———-
(787,437) (273,841)
Net changes in non-cash working
capital items:
Accounts receivable (72,245) (88,813)
Mineral on pads and inventories (163,364) (129,266)
Prepaid expenses 95,961 (61,878)
Accounts payable and accrued
liabilities 9,548 (744,551)
Deferred income - (77,230)
———- ———-
(917,537) (1,375,579)
———- ———-
INVESTING ACTIVITIES
Mineral properties and deferred
costs (2,619,635) (602,925)
Property, plant and equipment (80,384) (94,999)
———- ———-
(2,700,019) (697,924)
———- ———-
FINANCING ACTIVITIES
Private placement of units, net
of issue costs - 6,686,370
Shares issued by subsidiary to
minority interest - 705,000
Payment of long term debt (20,848) (27,732)
Payment of loans payable (4,904) -
———- ———-
(25,752) 7,363,638
———- ———-
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS DURING THE PERIOD (3,643,308) 5,290,135
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 5,881,118 (44,231)
———- ———-
CASH AND CASH EQUIVALENTS, END
OF PERIOD 2,237,810 5,245,904
———- ———-
———- ———-
CASH AND CASH EQUIVALENTS IS
COMPRISED OF:
Cash 2,424,717 5,273,400
Bank indebtedness (186,907) (27,496)
———- ———-
2,237,810 5,245,904
———- ———-
———- ———-

The accompanying notes are an integral part of these interim consolidated
financial statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

Source: Andean American Mining Corp.

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