Exhibit 99.1

MINERA ANDES INC.

ANNUAL INFORMATION FORM

FOR THE YEAR ENDED DECEMBER 31, 2007

March 26, 2008



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Table of Contents



|                                                           |  |   
|---------------------------------------------------------- |  | --
|GLOSSARY OF GEOLOGIC AND MINING TERMS                      |  | 3 
|                                                           | 
|STATEMENT OF ABBREVIATIONS AND CONVERSION FACTORS          |  | 5 
|                                                           | 
|PRELIMINARY NOTES                                          |  | 6 
|                                                           | 
|CURRENCY DISCLOSURE                                        |  | 8 
|                                                           | 
|EFFECTIVE DATE                                             |  | 8 
|                                                           | 
|CORPORATE STRUCTURE                                        |  | 8 
|                                                           | 
|GENERAL DEVELOPMENT OF THE BUSINESS                        |  | 10
|                                                           | 
|DESCRIPTION OF THE BUSINESS                                |  | 14
|                                                           | 
|DESCRIPTION OF MINERAL PROJECTS                            |  | 32
|                                                           | 
|DIVIDENDS                                                  |  | 59
|                                                           | 
|DESCRIPTION OF CAPITAL STRUCTURE                           |  | 59
|                                                           | 
|MARKET FOR SECURITIES                                      |  | 60
|                                                           | 
|DIRECTORS AND OFFICERS                                     |  | 61
|                                                           | 
|INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS |  | 65
|                                                           | 
|TRANSFER AGENT AND REGISTRAR                               |  | 67
|                                                           | 
|MATERIAL CONTRACTS                                         |  | 67
|                                                           | 
|INTERESTS OF EXPERTS                                       |  | 70
|                                                           | 
|AUDIT COMMITTEE AND RELATIONSHIP WITH AUDITORS             |  | 71
|                                                           | 
|SCHEDULE A                                               |  | 75



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GLOSSARY OF GEOLOGIC AND MINING TERMS

The following is a glossary of technical terms which are used in this Annual Information Form:

andesiteis a type of dark colored, fine grained volcanic rock;

anomalousmeans
either a geophysical response that is higher or lower than the average background or rock samples that return assay values greater than the average background;

argillic means pertaining to clay or clay minerals;

Bankable Feasibility Study means the study, prepared to
industry standards, based upon which a bank or other lending institution may loan the Corporation or MASA funds for production development on the Claims;

brecciameans a course grained rock, composed of angular broken rock fragments held together by a finer grained matrix;

Cateomeans an exploration concession for mineral rights granted to an individual or company in the Republic of Argentina, as defined by the Republic of Argentina Mining Code, as amended;

Claimsmeans the Cateos, Manifestación de Descubrimiento, Mina, Estaca Mina (as defined by the Republic of Argentina Mining Code, as amended)
described herein issued to MASA, MSC or the Corporation by the government of Argentina or any provincial government;

daciteis a type
of fine-grained extrusive rock;

Estaca Minameans areas granted to extend the area covered by existing Minas;

felsicdescribes an igneous rock having abundant light colored minerals;

grabenmeans an elongate crustal block that is bounded by faults on its long sides;

grab
samplemeans one or more pieces of rock collected from a mineralized zone that when analyzed do not represent a particular width of mineralization nor necessarily the true mineral concentration of any larger portion of a mineralized area;

igneous rockmeans a rock formed by the cooling of molten rock either underground or at the surface of the earth;

illiticis a general name for a group of clay minerals;

intrusive rockmeans an igneous rock that, when in the molten or partially molten state, penetrated into or between other rocks, but cooled beneath the surface;

low sulfidationapplies to a type of mineralization low in sulfur content;



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Manifestación de Descubrimiento(literally, manifestation of discovery) means the intermediate
stage between the exploration phase and exploitation phase of development;

metamorphic rockmeans an igneous or sedimentary rock that
has been altered by exposure to heat and pressure (resulting from deep burial, contact with igneous rocks, compression in mountain building zones or a combination of these factors) but without complete melting. Metamorphosis typically results in
partial recrystallization and the growth of new minerals.

Metasedimentrefers to metamorphosed sedimentary rock.
Metavolcanicsrefers to metamorphosed volcanic rock;

Minameans an exploitation grant based on Manifestación
de Descubrimiento;

net smelter return royaltyis a form of royalty payable as a percentage of the value of the final product of a mine,
after deducting the costs of transporting ore or concentrate to a smelter, insurance charges for such transportation, and all charges or costs related to smelting the ore. Normally, exploration, development and mining costs are not deducted in
calculating a net smelter return royalty. However, such royalties are established by contract or statute (in the case of property owned by governments), and the specific terms of such contracts or statutes govern the calculation of the royalty;

net profits royaltyis a form of royalty payable as a percentage of the net profits of a mining operation. In contrast to net smelter
return royalties, costs relating to exploration, development and mining may be deducted from the net proceeds of the operation in calculating the royalty. However, such royalties are established by contract or statute (in the case of property owned
by governments), and the specific terms of such contracts or statutes govern the calculation of the royalty;

orebodymeans a continuous
well-defined mass of material containing enough ore to make extraction economically feasible;

porphyrymeans an igneous rock of any
composition that contains conspicuous large mineral crystals in a fine-grained ground mass;

pyroclasticmeans pertaining to rock
material formed by volcanic explosion or expulsion from a volcanic vent;

rhyoliteis a type of felsic lava flow;

strataboundmeans a mineral deposit confined to a single stratigraphic unit;

stratigraphymeans the science of rock strata;

synvolcanicmeans formed at the time
of volcanic activity;



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tuffaceousis a general term for all consolidated pyroclastic rocks;

Underlying Royaltymeans any royalties on the Claims that are part of the lease, purchase or option of said Claim from the owner or any royalties that
may be imposed by the provincial government;

veinmeans a mineral filling of a fault or fracture in the host rock, typically in tabular
or sheet-like form;

VLF-EMmeans a very low frequency electromagnetic geophysical instrument used in exploration to measure variances
of conductivity in surficial sediments and bedrock;

volcanic rock(basalt, pillowed-flows, rhyolite) means an igneous rock that has
been poured out or ejected at or near the earths surface;

volcanoclastic rock(wacke, tuff, turbidite) means a sedimentary rock
derived from the transportation and deposition of volcanic rock fragments by air (tuff) or water (wacke or turbidite).

STATEMENT OF
ABBREVIATIONS AND CONVERSION FACTORS

The following is a list of abbreviations used throughout this annual information form for technical terms:



|       |  |                                              
|------ |  | ---------------------------------------------
|Ag     |  | silver                                       
|Au     |  | gold                                         
|As     |  | arsenic                                      
|Cu     |  | copper                                       
|g/t Au |  | grams per tonne gold                         
|g/t Ag |  | grams per tonne silver                       
|g/t    |  | grams per tonne                              
|ha     |  | hectare(s)                                   
|Hg     |  | mercury                                      
|IP/RES |  | induced polarization and resistivity (survey)
|kg     |  | kilogram(s)                                  
|km     |  | kilometer(s)                                 
|m      |  | meter(s)                                     
|Mo     |  | molybdenum                                   
|NSR    |  | Net Smelter Return                           
|oz     |  | ounce                                        
|opt    |  | ounces per ton                               
|Pb     |  | lead                                         
|ppb    |  | parts per billion                            
|ppm    |  | parts per million                            
|Sb     |  | antimony                                     
|sq.    |  | square                                       
|VLF-EM |  | very low frequency electromagnetic (survey)  
|Zn     |  | zinc                                         



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The following table sets forth certain standard conversions from Standard Imperial units to the International System of
Units (or metric units).



|                         |  |             |  |            
|------------------------ |  | ----------- |  | -----------
|To Convert From Imperial |  | To Metric   |  | Multiply by
|acres                    |  | hectares    |  | 0.404686   
|feet                     |  | meters      |  | 0.30480    
|miles                    |  | kilometers  |  | 1.609344   
|tons                     |  | tonnes      |  | 0.907185   
|ounces (troy)/ton        |  | grams/tonne |  | 34.2857    



|                                         |  |                                           |  | 
|---------------------------------------- |  | ----------------------------------------- |  | 
|1 mile = 1.609 kilometers                |  | 2,000 pounds (1 short ton) = 0.907 tonnes |  | 
|1 yard = 0.9144 meters                   |  | 1 ounce (troy) = 31.103 grams             |  | 
|1 acre = 0.405 hectares                  |  | 1 ounce (troy)/ton = 34.2857 grams/tonne  |  | 
|2,204.62 pounds = 1 metric ton = 1 tonne |  |                                           |  | 

PRELIMINARY NOTES

Cautionary Statement Regarding Forward-Looking Statements

The statements in this Annual Information Form
(AIF) for Minera Andes Inc. (Minera Andes or the Corporation) that are not based on historical facts are referred to as forward-looking statements. These statements can be identified generally by
forward-looking words such as expect, believe, anticipate, plan, intend, estimate, may, will or similar words. Information concerning the interpretation
of drill results and mineral resource estimates also may be deemed to be forward-looking statements, as such information constitutes a prediction of what mineralization might be found to be present if and when a project is actually developed.
Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Corporation or other future events or conditions may differ materially from those reflected in the forward-looking statements due
to a variety of risks, uncertainties and other factors, including, without limitation, those described in Description of the Business- Risk Factors, and elsewhere in this AIF.

You are cautioned that any such forward-looking statements are not guarantees and may involve risks and uncertainties. Our actual results may differ materially from
those in the forward-looking statements due to risks facing us or due to actual facts differing from the assumptions underlying our predictions. Some of these risks and assumptions include:



| |  |  | general economic and business conditions, including changes in interest rates, fluctuations in the prices for base metals, fluctuations in prices for securities in
the resource sector, demand for base metals and other economic and business conditions;
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| |  |  | escalating capital and operating costs (partly as a consequence of relatively high current metal prices) and shortage of mining and processing equipment;
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| |  |  | natural phenomena or disasters that may affect completion of drill programs, exploration work, completion of feasibility studies or development, if warranted;
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| |  |  | actions by government authorities, including changes in government regulation, permitting requirements or environmental legislation;
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| |  |  | the companys ability to raise sufficient financing to complete its planned exploration work on its properties and to develop the projects, if warranted;
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| |  |  | future decisions by management in response to changing conditions, and
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| |  |  | misjudgments, inaccurate assumptions or changes in conditions related to forward-looking statements.
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We advise you that these cautionary remarks expressly qualify in their entirety all forward-looking statements attributable to us or persons acting on our behalf. You
should not place undue reliance on such forward-looking statements.

Cautionary Note to U.S. Investors  Information Concerning Preparation of
Resource and Reserve Estimates

This Annual Information Form has been prepared in accordance with the requirements of the securities law in effect in
Canada, which differ from the requirements of United States law. Unless otherwise indicated, all resource and reserve estimates included in this Annual Information Form have been prepared in accordance with Canadian National Instrument 43-101
(NI 43-101) and the Canadian Institute of Mining and Metallurgy Classifications System. NI 43-101 is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of
scientific and technical information concerning mineral projects. NI 43-101 permits the disclosure of an historical estimate made prior to the adoption of NI 43-101 that does not comply with NI 43-101 to be disclosed using the historical terminology
if the discloser: (a) identifies the source and state of the historical estimate; (b) comments on the relevance and reliability of the historical estimate; (c) states whether the historical estimate uses categories other than those
prescribed by NI 43-101, and (d) includes any more recent estimates or data available. Canadian standards, including NI 43-101, differ significantly from the requirements of the United States Securities and Exchange Commission
(SEC), and resource and reserve information contained herein may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, the term resource
does not equate to the term reserves. Under U.S. standards, mineralization may not be classified as a reserve unless the determination has been made that the mineralization could be economically and legally produced or
extracted at the time the reserve determination is made. The SECs disclosure standards normally do not permit the inclusion of information concerning measured mineral resources, indicated mineral resources or inferred
mineral resources or other descriptions of the amount of mineralization in mineral deposits that do not constitute reserves by U.S. standards in documents filed with the SEC. U.S. Investors should also understand that
inferred mineral resources have a great amount of uncertainty as to their existence and great uncertainty as to



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their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher
category. Under Canadian rules, estimated inferred mineral resources may not form the basis of feasibility or pre-feasibility studies except in rare cases. Investors are cautioned not to assume that all or any part of an inferred
mineral resource exists or is economically or legally mineable. Disclosure of contained ounces in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report
mineralization that dos not constitute reserves by SEC standards as in place tonnage and grade without reference to unit measures. The requirements of NI 43-101 for identification of reserves are also not the same as those of
the SEC, and reserves reported by the Corporation in compliance with NI 43-101 may not qualify as reserves under SEC standards. Accordingly, information concerning mineral deposits set forth herein may not be comparable with information
made public by companies that report in accordance with United States standards.

CURRENCY DISCLOSURE

All currency amounts in this report are stated in U.S. dollars unless otherwise indicated. On December 31, 2007, the noon rate of exchange, as reported by The Bank
of Canada for conversion of United States dollars into Canadian dollars was U.S. $1.00 = Cdn $.9881.

EFFECTIVE DATE

This Annual Information Form is dated March 26, 2008 and the information contained herein is current as of such date, other than certain financial information which
is current as of December 31, 2007, being the date of the Corporations most recently completed year end or as otherwise indicated.

CORPORATE STRUCTURE

Name, Address and Incorporation

Minera Andes was formed upon the amalgamation of Scotia Prime Minerals, Incorporated and Minera Andes Inc. pursuant to theBusiness Corporations Act (Alberta). A certificate of amalgamation was issued by the
Registrar of Corporations in the Province of Alberta on November 6, 1995.

On August 1, 1996 the Corporations articles were amended to
allow shareholders meetings to be held in Vancouver, British Columbia, in addition to any place within Alberta.

On June 30, 2000 the
Corporations articles were restated and amended to allow shareholders meetings to be held in the City of Vancouver, British Columbia, the City of Spokane, Washington or anywhere in Alberta that the directors determined.



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Our management office is 111 E. Magnesium Road, Suite A, Spokane, Washington, 99208, and our principal business address
is Coronel Moldes 837/820, (5500) Mendoza, Argentina. Our registered address is 7415B 35th Ave. N.W., Calgary, Alberta, T3B 1T4 Canada.

Intercorporate Relationships

The Corporations interests in its Argentina properties are held through two Argentinean subsidiaries:
Minera Andes S.A. (MASA) and Minera Santa Cruz S.A. (MSC), a MASA subsidiary. MASA was incorporated under the laws of the Republic of Argentina in September 1994. In April 2001, the Corporation transferred some of its
Argentina properties to MSC.

The corporate management of the Company is performed by Minera Andes (USA) Inc., a wholly owned subsidiary, operating out of
Spokane, WA., USA.

The corporate structure of Minera Andes and its principal subsidiaries is as follows:

LOGO

We hold 38,986,504 of the 38,987,504 issued and outstanding shares of MASA as well as an irrevocable transferable option
to purchase the remaining MASA shares. The remaining shares are held by a second shareholder as required by local law.

MASA holds 49% of the shares issued
and outstanding of Minera Santa Cruz S.A.



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GENERAL DEVELOPMENT OF THE BUSINESS

Three Year History



| | 1. | On March 31, 2005, Corporation announced that a decision had been make to increase the initial start-up mine operating capacity to be used in the feasibility study at the San
José project (the San José Project) (See Description of Mineral Projects for details on the San José Project). The feasibility study was originally being based on a start-up operation at 500 tonnes per
and was then increased to 750 tonnes per day.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Minera Andes and its joint venture partner completed a bankable feasibility study at the San José Project in October of 2005 to determine the economic viability of the San
José veins. The study was managed by MTB Project Management Professionals, Inc., of Denver. The purpose of the feasibility study was to provide an independent third party determination of the technical and economic viability of the veins
currently developed at the project. The results of the feasibility study indicate the project is positive for the development of a mine on the property;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | On November 28, 2005, the Corporation announced that a letter of intent had been signed with Xstrata Copper regarding the Los Azules porphyry copper project in San Juan
province, Argentina (the Los Azules Project) (See Description of Mineral Projects for details on the Los Azules Project). Xstrata Copper and Minera Andes had been working on separate, adjoining properties that straddle a
large copper porphyry system now consolidated into one package. Xstrata Copper is one of the commodity business units within Xstrata plc (London Stock Exchange:XTA.L and Zurich Stock Exchange: XTRZn.S).
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Los Azules Project was discovered by Minera Andes geologists through regional exploration near the Argentina/Chile border. The combined Minera
Andes-Xstrata Copper property package (approx. 7,500 Ha) encompasses a large, enriched (chalcocite) copper zone at Los Azules. The overall target area was approximately 2,700 meters by 700 meters as defined.



| | 4. | In December 2005, Robert McEwen, Chairman and CEO of U.S. Goldcorp, and founder and former Chairman and CEO of Goldcorp Inc., agreed to invest a total of C$10 Million in Minera
Andes by private placement.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. | On March 22, 2006, the Corporation announced that the Environmental Impact Assessment, the primary document for permitting the San José Project, had been approved by the
province of Santa Cruz, Argentina.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. | On March 28, 2006 the Corporation announced that the joint venture company Minera Santa Cruz, co-owned by Minera Andes (49%) and Mauricio Hochschild & Cia.
Ltda.(Hochschild) (51%) made a final decision to place the San José Project into production.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | 7. | In May, 2006, Robert McEwen completed the early exercise of all the common share purchase warrants the held in the company. As a result, a total of 14,285,714 common shares were
issued resulting in gross proceeds of C$7,857,143 to Minera Andes. In addition, Mr. McEwen reported that he purchased 1.2 million shares in the market at C$1.10 per share during March, 2006. His holdings at that time totaled 30% of the
issued and outstanding common shares of the Corporation.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 8. | In May, 2006, the company reported the discovery of significant high-grade copper at its Los Azules Project in Argentina. An eleven hole drill program returned intervals up to 1.6%
copper over 221 meters and 1% copper over 173 meters in separate holes.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 9. | In November, 2006, the company announced that Minera Santa Cruz S.A. (MSC), was finalizing the terms and conditions of an offer letter with its venture partner whereby
Hochschild Mining PLCs subsidiary, Lorenzon Limited would provide the remaining financing to complete the construction of the San José Project. The project finance loan was for up to US$55 million for completion of mine construction at
the San José Project in Argentina. The loan will be repaid only from MSC cash flow eliminating the need for typical bank required hedging of the gold and silver production.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10. | In December 2006, we received conditional listing approval to list our common shares on the Toronto Stock Exchange (TSX) and we began trading on the TSX in February
2007.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 11. | At year-end 2006, the San José mine entered into the final construction stages and started up in the second quarter of 2007. During construction approximately 700 people were
working at the site and when construction was completed the mine was be staffed by approximately 450 personnel. A 21,241-meter drilling program was completed by year end.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 12. | In March 2007, we received a two-year loan from Macquarie for $7,500,000 of which $5,880,000 was for the development of the San José Project and $1,620,000 was for general
purposes. In October 2007, Minera Andes received another tranche of US$10 million on the existing loan facility from Macquarie. The total loan facility is $17.5 million. The main purpose of the facility was to provide additional funding to Minera
Andes for its 49% portion of the costs of the exploration, sustaining capital, cost overruns and expansion related costs of the MSC project that entered its production commissioning phase in the third quarter of 2007.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 13. | The San José mine celebrated its inaugural ceremony in June 2007. During construction approximately 1,100 people were working at the site and when that construction is
complete the mine is staffed by approximately 450 personnel.
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| | 14. | In August, 2007, MSC made the formal decision to double production capacity from 750 tonnes per day to 1,500 tpd at the San José mine in southern Argentina. The cost of the
expansion was planned to be financed primarily from cash flow from the existing mine and unsecured local bank financing.
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In August 2007, the board of MSC approved a budget of $102.9 million for construction completion of the
750 tonnes per day operation, pre-production mine expansion costs, and costs related to the change in scope to the original mine plan incurred to date. In November 2007, the board of MSC approved project capital increases of $42.5 million. These
capital increases are related to incremental costs associated with the processing facility at San José taking longer than anticipated to reach full capacity which required $34.1 million. At the end of 2007, the Minera Andes investment in MSC
totaled approximately $65 million.

The current project loan facility for $61 million (originally $55 million) with Hochschild was expanded
to $65 million at the end of the second quarter of 2007 to cover additional mine completion costs and the corporation was finalizing the terms and conditions of the formal loan documentation. The loan will be repaid from MSC cash flow and there is
no hedging of the projects gold and silver production (which would have been required under the previously arranged bank financing facility). To accelerate the mine expansion and provide necessary funds from mine cash flow, Hochschild agreed
to extend the payback of the project loan facility until after completion of the expansion (except for expected repayment of $4 million from the proceeds of local bank loans to MSC in October, 2007). MSC estimated completion of the mine expansion to
occur in late 2008.

Based on work by Minera Andes consultant engineers in their Technical Report in November 2007, reserves at the San
José mine increased by 100 percent primarily derived from drilling from 2006 thru June 30th, 2007. Proven and Probable Mineral Reserves: at June 30, 2007 are: 2.4 million tonnes grading 6.79 g/t gold and 430 g/t silver. The
economic cutoff used to calculate the reserves is $94 per tonne (using a price of $500 per ounce for gold and $9.00 per ounce for silver) based on a November 2007 Technical Report by AMEC. Mineral potential at the San José Project based on
2005-2006 drilling outside the existing mineral reserves/resources was estimated for three targets (Odin, Ayelén, and Frea extension) to total: 1.6-3.4 million tonnes, with 6-10 g/t gold and 200-600 g/t silver. At the current mining
production rate of 750 tonnes per day the new mineral reserves that include the Kospi vein indicate a mine life of 9 years at San José an increase of 73 percent over the previously defined mine life of 5.2 years.



| | 15. | During November 2007, a definitive Option Agreement was executed by Minera Andes and Xstrata Copper on the Los Azules Project. The Option Agreement consolidates into one package
adjoining properties that straddle a large copper porphyry system.Our previous drilling reported the discovery of significant high-grade copper at the Los Azules property in Argentina. Drilling has returned intervals up to 1.62% copper over 221
meters and 1.00% copper over 173 meters in separate holes on the property.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 16. | At the Los Azules Project, a planned 2007-2008 exploration program of 24 holes totaling 10,000 meters, in two stages of 5,000 meters is currently underway. The exploration program
at the Los Azules Project is designed to define an inferred resource estimate and provide sufficiently detailed information to allow the completion of a Preliminary Assessment (as defined by NI 43-101) of the property by Q4 2008.
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| | 17. | At year end 2007, approximately 28,585 meters of core drilling totaling 112 drill holes was conducted on several targets identified at the San José Project. Drilling in the
second half of 2007 has defined 2.8 km of strike length along the Odin and Ayelén veins that have significant potential to further increase the current reserves/resources at the San José Project.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 18. | A total of 958,000 ounces of silver and 14,950 ounces of gold were produced. The first sales of metals from inventory at the San José mine occurred in December 2007 and
included 92,000 ounces of silver and 1,490 ounces of gold. At year-end the mine had $20.7 million of metal in inventory in the form of concentrates and doré, or about 95% of the total 2007 production.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 19. | The San José mine commenced production during the second quarter of 2007 and approached full production by year-end. The processing plant, which is still in the commissioning
phase, is expected to reach full capacity in first half of 2008. The mine is currently staffed with approximately 436 employees and 148 contractors. Based on a NI43-101 technical report filed in November of 2007 at a full production rate of 750
tonnes per day, the mine is forecast to produce approximately 64 thousand ounces of gold and 3.9 million ounces of silver on an average annual basis for the life of the mine.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 20. | On February 12, 2008, the Corporation announced that it had completed the third and final closing on its December 19, 2007 announced private placement. The financing
consisted of three closings totaling Cdn$34.23 million. A total of 22,085,668 units, at a price of C$1.55 per unit, were issued pursuant to the various closings on the private placement.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Minera Andes will use the proceeds from the offering to fund its share of the costs at the San José Project in southern Argentina, as well as for
exploration drilling and completing a scoping study at the Los Azules Project, general exploration, and for general corporate purposes.

Expected
Changes In Business During 2008

It is anticipated that expected recovery rates at the San José plan will be reached by mid-2008. Forecast
production is 64,000 ounces of gold and 3,900,000 ounces of silver per year based on November technical report. Minera Andes attributable share of this is 49%.

Currently a doubling of capacity at the San José mine by the end of 2008 is underway. Initial capacity is 750 tonnes per day and the plant and infrastructure are currently being upgraded to 1,500 tonnes per
day.

We also have plans to increase reserves and resources at the San José project. MSC plans to conduct a program consisting of approximately 4000
meters of surface drilling and 3,800 meters of underground drilling on several targets during 2008.

Completion of a preliminary economic assessment on the
Los Azules project by approximately Q4-2008 is underway. We continued drilling on the project during the fourth quarter of 2007 and



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expect to complete the drilling during this seasons drill program (approximately mid-December 2007 through early-April 2008). After the drilling is
completed, three to four months time will be needed to assess the data.

We will also pursue exploration on our other 100%-owned properties that have
characteristics similar to the San José Project. We plan to spend a minimum of $500,000 during 2008, subject to available finances, on other gold/silver properties in the Santa Cruz province in Argentina.

Significant Acquisitions and Significant Dispositions

There were no
significant acquisitions or dispositions in 2007.

DESCRIPTION OF THE BUSINESS

General

The Corporation is engaged in the exploration and
development of mineral properties located in the Republic of Argentina. The Corporations objective is to identify and acquire properties with promising mineral potential, explore them to an advanced stage or to the feasibility study stage, and
then, if warranted, to pursue development of the properties, typically through joint ventures or other collaborative arrangements with partners that have expertise in mining operations.

Our current properties and projects consist of mineral rights and applications for mineral rights covering approximately 304,221acres (123,133 ha) in three Argentine provinces. The lands comprise option to purchase
contracts, exploration and mining agreements and direct interests through the Corporations filings for exploration concessions. At December 31, 2007, we were in the exploration stage, had interests in properties in three provinces in the
Republic of Argentina, and were commencing production in the San José Project in Santa Cruz province, southern Argentina.

Precious metals prices
have now trended generally upward for nearly seven years. Silver prices have increased from a low of $4.30 in early April 2001 to $14.75 per ounce in December 2007, an average annual increase of 20% and have subsequently trended higher still in the
first quarter of 2008. Gold prices have increased from a low of $256 in early April 2001 to $835 per ounce in December 2007, an average annual increase of 19% and have subsequently trended higher still in the first quarter of 2008. The higher
precious metals prices increased our ability to equity finance during 2005, 2006, and 2007 as well as obtain other forms of financing.

The Corporation has
six employees and seven consultants

The market for precious metal company equities generally strengthened during 2005 to 2007. Our common share price began
the year at Cdn$1.52 and ended the year at Cdn$1.57. The share price hit a high of $2.64 in May. The increased interest in investing in gold and gold mining companies during the past five years has made exploration and development capital more
readily available. As a result, we successfully raised $12.8 million of new equity funds during 2005,



14



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$21.7 million in 2006, and $28.4 million in 2007, including option and warrant exercises, net of issue costs. We used portions of the cash to make joint
venture payments, acquire new exploration properties in Argentina, and to fund exploration and development activities at the San José Project and other projects in our property portfolio. In 2008 we anticipate using our cash to complete the
preliminary economic assessment on the Los Azules Project, to fund other exploration activities, and for other general corporate purposes.

Argentina

Recent Mining and Economic History in Argentina

Argentina is the second largest country in South America, over 2.7 million sq. km in area. In 1983, Argentina returned to a multiparty democracy, which brought to an end nearly a half century of military intervention and political
instability. The country then began to stabilize; however, it was not until 1989, with the election of the government under President Carlos Menem, that Argentinas economy began to improve. Menem initiated economic reforms that included the
privatization of many state companies and the implementation of the Convertibility Plan, which fixed the Argentine peso to the U.S. dollar at par, fully backed by reserves of foreign exchange, gold and dollar-denominated bonds of the Central Bank of
Argentina. Results of the reforms were positive; Argentinas gross domestic product grew at up to 8% per annum in the early 1990s and inflation dropped to between 1% and 3% per annum. However, following a recession in 1999 and 2000, a
severe political and economic crisis occurred in late 2001. In early 2002 the government chose to devalue the peso, first to $1.00 to Peso$1.40, before allowing the Peso to float in February 2002. The economic reforms associated with the devaluation
of the Peso included the conversion of all US dollar denominated contracts into Pesos on a one-to-one basis and all US dollar bank accounts into Pesos. At the end of December 2005, the Peso stood at Peso$3.03 to $1.00; at the end of December 2006,
the Peso stood at Peso $3.06 to $1.00; and at the end of December 2007, the Peso stood at Peso $3.15 to $1.00.

In 1993, the Mining Investments Act
instituted a new system for mining investment to encourage mineral exploration and foreign investment in Argentina. Key incentives provided by the Act include guaranteed tax stability for a 30-year period, 100% income tax deductions on exploration
costs, accelerated amortization of investments in infrastructure, machinery and equipment, and the exemption from import duties on capital goods, equipment and raw materials used in mining and exploration. Repatriation of capital or transfer of
profits is unrestricted. Argentinas mineral resources, administered by its 23 provinces, are subject to a provincial royalty capped at 3% of the mouth of mine value of production, although provinces may opt to waive this royalty.

Argentinas mineral potential is largely unexplored, particularly in comparison to that of its immediate neighbors and, as a consequence, information
pertaining to the countrys resource base is lacking. We initiated gold exploration in Argentina in 1991, in conjunction with N.A. Degerstrom, Inc. Our exploration efforts initially focused on evaluating prospects generated by 1960s
United Nations development exploration programs and on targets generated by satellite image analysis. We developed techniques of processing and interpreting satellite imagery to assist in identifying promising exploration targets. Currently, we are
completing exploration work that includes geophysical surveys, mechanical trenching and reverse-circulation drilling on the most advanced targets in our property portfolio, and conducting grassroots exploration to evaluate our other properties and
to generate new targets.



15



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Property and Title in Argentina

The laws, procedures and terminology regarding mineral title in Argentina differ considerably from those in the United States and in Canada. Mineral rights in Argentina are separate from surface ownership and are
owned by the federal government. Mineral rights are administered by the provinces. The following summarizes some of the Argentinean mining law terminology in order to aid in understanding our land holdings in Argentina.



|1. | Cateo: A cateo is an exploration concession which does not permit mining but gives the owner a preferential right to a mining concession for the same area. Cateos are measured in
500 ha unit areas. A cateo cannot exceed 20 units (10,000 ha). No person may hold more than 400 units in a single province. The term of a cateo is based on its area: 150 days for the first unit (500 ha) and an additional 50 days for each unit
thereafter. After a period of 300 days, 50% of the area over four units (2,000 ha) must be dropped. At 700 days, 50% of the area remaining must be dropped. Time extensions may be granted to allow for bad weather, difficult access, etc. Cateos are
identified by a file number or expediente number.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cateos are awarded by the following process:



| | a. | Application for a cateo covering a designated area. The application describes a minimum work program for exploration;
| | -- | ---------------------------------------------------------------------------------------------------------------------



| | b. | Approval by the province and formal placement on the official map or graphic register;
| | -- | --------------------------------------------------------------------------------------



| | c. | Publication in the provincial official bulletin;
| | -- | ------------------------------------------------



| | d. | A period following publication for third parties to oppose the claim; and
| | -- | -------------------------------------------------------------------------



| | e. | Awarding of the cateo.
| | -- | ----------------------

The length of this process varies
depending on the province, and commonly takes up to two years. Accordingly, cateo status is divided into those that are in the application process and those that have been awarded. If two companies apply for cateos on the same land, the first to
apply has the superior right. During the application period, the first applicant has rights to any mineral discoveries made by third parties in the cateo without its prior consent. While it is theoretically possible for a junior applicant to be
awarded a cateo, because applications can be denied, we know of no instances where this has happened.

Applicants for cateos may be allowed
to explore on the land pending formal award of the cateo, with the approval of the surface owner of the land. The time periods after which the owner of a cateo must reduce the quantity of land held does not begin to run until 30 days after a cateo
is formally awarded. Our goal is to determine whether our cateos contain commercial grade ore deposits before portions of the cateos must be relinquished. Our ability to do so is dependent upon adequate financing for exploration activities. It is
likely that several of our cateos will be relinquished after preliminary exploration because no promising mineral deposits have been discovered.



16



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Until August 1995, a canon fee, or tax, of Peso$400 per unit was payable upon the awarding of
a cateo. A recent amendment to the mining act requires that this canon fee be paid upon application for the cateo.



|2. | Mina: To convert an exploration concession to a mining concession, some or all of the area of a cateo must be converted to a mina. Minas are mining concessions which
permit mining on a commercial basis. The area of a mina is measured in pertenencias. Each mina may consist of two or more pertenencias. Common pertenencias are six ha and disseminated pertenencias are 100 ha
(relating to disseminated deposits of metals rather than discrete veins). The mining authority may determine the number of pertenencias required to cover the geologic extent of the mineral deposit in question. Once granted, minas have an indefinite
term assuming exploration development or mining is in progress. An annual canon fee of Peso$80 per pertenencia is payable to the province.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Minas are obtained by the following process:



| | a. | Declaration of manifestation of discovery in which a point within a cateo is nominated as a discovery point. The manifestation of discovery is used as a basis for location of
pertenencias of the sizes described above. Manifestations of discovery do not have a definite area until pertenencias are proposed. Within a period following designation of a manifestation of discovery, the claimant may do further exploration, if
necessary, to determine the size and shape of the orebody.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | Survey (mensura) of the mina. Following a publication and opposition period and approval by the province, a formal survey of the pertenencias (together forming the mina)
is completed before the granting of a mina. The status of a surveyed mina provides the highest degree of mineral land tenure and rights in Argentina.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. | Estaca Minas: These are six-ha extensions to existing surveyed minas that were granted under previous versions of the mining code. Estaca minas are equivalent to minas. New Estaca
minas were eliminated from the mining code in August 1996.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. | Provincial Reserve Areas: Provinces are allowed to withdraw areas from the normal cateo/mina process. These lands may be held directly by the province or assigned to provincial
companies for study or exploration and development.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

All mineral rights described above are considered forms of real property and can be
sold, leased or assigned to third parties on a commercial basis. Cateos and minas can be forfeited if minimum work requirements are not performed or if annual payments are not made. Generally, notice and an opportunity to cure defaults is provided
to the owner of such rights.



17



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Grants of mining rights, including water rights, are subject to the rights of prior users. Further, the mining code
contains environmental and safety provisions administered by the provinces. Prior to conducting operations, miners must submit an environmental impact report to the provincial government describing the proposed operation and the methods to be used
to prevent undue environmental damage. The environmental impact report must be updated bi-annually, with a report on the results of the protection measures taken. If protection measures are deemed inadequate, additional environmental protection may
be required. Mine operators are liable for environmental damage. Violators of environmental standards may be caused to shut down mining operations.

Risk Factors

An investment in the Corporations securities should be considered highly speculative due to the nature of the
Corporations involvement in the exploration for, and the acquisition, development and mining of, precious and base metals. An investment in the Corporations securities involves a high degree of risk and should only be made by persons who
can afford the total loss of their investment. An investor should consider carefully the risk factors set out below. In addition, investors should carefully review and consider all other information contained in this AIF before making an investment
decision.

FINANCIAL RISKS

A substantial or
prolonged decline in metal prices, particularly gold, silver or copper, would have a material adverse effect on us.

The price of our common shares, our
financial results, and our exploration and development have previously been, and would in the future be, significantly adversely affected by a substantial or prolonged decline in metal prices. Metal prices are volatile and are affected by numerous
factors beyond our control such as the sale or purchase of metals by various central banks and financial institutions, inflation or deflation, fluctuation in the value of the United States dollar and foreign currencies, global and regional demand,
and the political and economic conditions of major mining countries throughout the world. Any drop in the price of metals could adversely impact our future revenues, profits and cash flows. In particular, sustained low metal prices could:



| |  | cause suspension of the development of the mine at the San José Project if such operations become uneconomic at the then-prevailing gold and silver prices,
thus causing a loss in our investment in the project;
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | cause the project financing facility for the San José Project to become inadequate, unavailable or reduced;
|- |  | -----------------------------------------------------------------------------------------------------------



| |  | cause us to be unable to fulfill our debt payment obligations;
|- |  | --------------------------------------------------------------



| |  | halt or delay the development of new projects;
|- |  | ----------------------------------------------



18



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| |  | reduce funds available for exploration, with the result that depleted reserves are not replaced; and
|- |  | ----------------------------------------------------------------------------------------------------



| |  | reduce or eliminate the benefit of enhanced growth opportunities anticipated from the development of our Los Azules Project.
|- |  | ----------------------------------------------------------------------------------------------------------------------------

Furthermore, the need to reassess the feasibility of any of our projects because of declining metal prices could cause substantial delays or might interrupt operations
until the reassessment can be completed. Mineral reserve calculations and life-of-mine plans using significantly lower metal prices could result in reduced estimates of mineral reserves and non-reserve mineral resources and in material write-downs
of our investment in mining properties and increased amortization, reclamation and closure charges.

We may incur substantial losses in the future that
could make financing our operations and business strategy more difficult.

We had a total accumulated deficit of $42.4 million as of December 31,
2007. We had a net loss of $8.2 million for the year ended December 31, 2007 compared to a net loss of $10.8 million for the year ended December 31, 2006. Numerous factors, including declining metal prices, lower than expected ore grades
or higher than expected operating costs (including increased commodity prices), and impairment write-offs of mine property and/or exploration property costs, could cause us to be unprofitable in the future. Any future operating losses could make
financing our operations and our business strategy, or raising additional capital, difficult or impossible and could materially and adversely affect our operating results and financial condition.

Our obligations could strain our financial position and impede our business strategy.

We had total consolidated debt and liabilities as of December 31, 2007 of $68.7 million, including $31.85 million payable under the project loan. These liabilities could have important consequences, including the
following:



| |  | increasing our vulnerability to general adverse economic and industry conditions;
|- |  | ---------------------------------------------------------------------------------



| |  | limiting our ability to obtain additional financing to fund future working capital, capital expenditures, operating and exploration costs and other general
corporate requirements;
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | requiring us to dedicate a significant portion of our cash flow from operations, anticipated from the San José Project after commissioning beginning in the
third quarter of 2007, to make debt service payments, which would reduce our ability to fund working capital, capital expenditures, operating and exploration costs and other general corporate requirements;
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | limiting our flexibility in planning for, or reacting to, changes in our business and the industry; and
|- |  | -------------------------------------------------------------------------------------------------------



19



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| |  | placing us at a disadvantage when compared to our competitors that have less debt relative to their market capitalization.
|- |  | --------------------------------------------------------------------------------------------------------------------------

We currently have no cash flow from operations and will remain dependent on other sources of financing until such time, if ever, that we become self-sustaining from
cash generated from operations.

We commenced production at the San José Project in 2007 but we currently have no source of operational cash
flow. The definitive agreement relating to the San José Project financing has not yet been completed. This will determine the amount and timing of free cash flow that is available for distribution. The amount and timing of free cash flow that
we receive from the San José Project, when it commences, is further affected by the fact that we only own a 49% interest in the project and cash distributions must be approved by the shareholders of MSC, the joint-venture company. When cash
distributions are received from MSC, it is uncertain if they will be sufficient by themselves to fund our continuing exploration and development activities.

Our estimates of mineral reserves could be inaccurate, which could cause production and costs to differ from estimates. Our estimates of non-reserves mineral resources could also be inaccurate.

There are numerous uncertainties inherent in estimating proven and probable mineral reserves and non-reserve measured, indicated and inferred mineral resources,
including many factors beyond our control. The accuracy of estimates of mineral reserves and non-reserves is a function of the quantity and quality of available data and of the assumptions made and judgments used in engineering and geological
interpretation, which could prove to be unreliable. These estimates of mineral reserves and non-reserves may not be accurate, and mineral reserves and non-reserves may not be able to be mined or processed profitably.

Fluctuation in metal prices, results of drilling, metallurgical testing and production, and the evaluation of mine plans subsequent to the date of any estimate could
require revision of the estimates. The volume and grade of mineral reserves mined and processed and recovery rates might not be the same as currently anticipated. Any material reductions in estimates of our mineral reserves and non-reserves, or of
our ability to extract these mineral reserves and non-reserves, could have a material adverse effect on our results of operations and financial condition.

Lower metal prices have adversely affected our ability to obtain financing in the past, and recurring lower metal prices could have similar effects in the future.

In the future, we may not be able to obtain adequate financing on acceptable terms. If we are unable to obtain additional financing on acceptable terms, we might need to delay or indefinitely postpone further
exploration and development of our properties, and as a result, we could lose our interest in, or could be forced to sell, some of our properties.

Risks inherent in acquisitions that we might undertake could adversely affect our current business and financial condition and our growth.



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We plan to continue to pursue the acquisition of producing, development and advanced stage exploration properties and
companies. The search for attractive acquisition opportunities and the completion of suitable transactions are time consuming and expensive, divert management attention from our existing business and may be unsuccessful. Our success in our
acquisition activities depends on our ability to complete acquisitions on acceptable terms and integrate the acquired operations successfully with those of Minera Andes. Any acquisition would be accompanied by risks. For example, there may be a
significant change in commodity prices after we have committed to complete a transaction and established the purchase price or exchange ratio, a material ore body may prove to be below expectations or the acquired business or assets may have unknown
liabilities which may be significant. We may lose the services of our key employees or the key employees of any business we acquire or have difficulty integrating operations and personnel. The integration of an acquired business or assets may
disrupt our ongoing business and our relationships with employees, suppliers and contractors. Any one or more of these factors or other risks could cause us not to realize the anticipated benefits of an acquisition of properties or companies, and
could have a material adverse effect on our current business and financial condition and on our ability to grow.

We currently do not have a hedging
program but implementation of a hedging program might be unsuccessful and incur losses.

We do not have a hedging program nor do we have plans to do
so. However, if we do implement a hedging program in the future, we may be prevented from fully benefiting from higher spot market metal prices to the extent that production is hedged. Also, even if such hedge program is economically effective,
accounting for the derivatives on a mark-to-market basis could show large swings in any period as any unrealized, non-cash losses/gains are recognized through the statement of operations.

We are subject to fluctuations in currency exchange rates, which could materially adversely affect our financial position.

We maintain most of our working capital in Canadian and United States dollars. We typically convert our Canadian dollars to United States funds or our Canadian and
United States funds to Argentinean pesos as payment obligations become due. Accordingly, we are subject to fluctuations in the rates of currency exchange between the Canadian, United States dollar and Argentinean peso, and these fluctuations could
materially affect our financial position and results of operations. A significant portion of our operating costs is in Argentinean pesos. We currently have future obligations that are payable in Canadian dollars, United States dollars and
Argentinean pesos. We and our 49%-owned joint-venture company, MSC, obtain construction and other services and materials and supplies from providers in other countries. The costs of goods and services could increase due to changes in the value of
the Canadian dollar, the United States dollar, or the Argentinean peso, such as the recent cost increase due to the decrease in the value of the United States dollar relative to other currencies. Consequently, operation and development of our
properties might be more costly than we anticipate.

We are subject to litigation risks.



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All industries, including the mining industry, are subject to legal claims, with and without merit. Defense and
settlement costs can be substantial, even with respect to claims that have no merit. Due to the inherent uncertainty of the litigation process, the resolution of any particular legal proceeding could have a material effect on our financial position
and results of operations.

We are subject to interest rate risks.

The interest rates for the project facility loan MSC obtained from Hochschild for up to $65 million for the San José mine and for our loans with Macquarie for $17.5 million fluctuate based on LIBOR. We estimate
that a 1% increase in the interest rate on the variable rate debt would result in a $493,500 change in annual interest expense allocable to Minera Andes. We have not entered into any agreements to hedge against unfavorable changes in interest rates,
but may in the future actively manage our exposure to interest rate risk.

OPERATIONAL RISKS

The technology, capital costs and cost of production of mineral reserves and non-reserves at the San José Project remain subject to a number of uncertainties,
including funding uncertainties.

Based upon the completion of the San José Project feasibility study in 2005 and subsequent November 2007
Technical Report on the San José Project, the proven and probable mineral reserves were prepared in accordance within 43-101 of the Canadian securities regulators. While the feasibility study and November 2007 technical report indicated that
the mineral reserves can be profitably mined and processed at current metal prices, the capital cost to construct a plant, together with related mining equipment and facilities, may significantly increase before the mine is completed due to factors
beyond our control. While the processing technology envisioned in the feasibility study and November 2007 technical report has been successfully utilized at other mines, and despite testing, engineering and analysis, the technology may not perform
successfully at commercial production levels on the San José ores, in which case our production estimates may not be achieved.

Our activities
are subject to a number of risks and hazards including:



| |  | environmental hazards;
|- |  | ----------------------



| |  | discharge of pollutants or hazardous chemicals;
|- |  | -----------------------------------------------



| |  | industrial accidents;
|- |  | ---------------------



| |  | labor disputes and shortages;
|- |  | -----------------------------



| |  | supply and shipping problems and delays;
|- |  | ----------------------------------------



| |  | shortage of equipment and contractor availability;
|- |  | --------------------------------------------------



22



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| |  | difficulty in applying technology such as bio-oxidation processing;
|- |  | -------------------------------------------------------------------



| |  | unusual or unexpected geological or operating conditions;
|- |  | ---------------------------------------------------------



| |  | cave-ins of underground workings;
|- |  | ---------------------------------



| |  | failure of dams;
|- |  | ----------------



| |  | fire;
|- |  | -----



| |  | marine and transit damage and/or loss;
|- |  | --------------------------------------



| |  | changes in the regulatory environment; and
|- |  | ------------------------------------------



| |  | natural phenomena such as inclement weather conditions, floods and earthquakes.
|- |  | -------------------------------------------------------------------------------

These or other occurrences could result in damage to, or destruction of, mineral properties or production facilities, personal injury or death, environmental damage, delays in mining, delayed production, monetary
losses and possible legal liability. We could incur liabilities as a result of pollution and other casualties. Satisfying such liabilities could be very costly and could have a material adverse effect on our financial position and results of
operations.

Our mining properties are subject to numerous environmental laws, regulations and permitting requirements that can delay production and
adversely affect operating and development costs.

Compliance with existing regulations governing the discharge of materials into the environment, or
otherwise relating to environmental protection, in the jurisdictions where we have projects may have a material adverse effect on our exploration activities, results of operations and competitive position. New or expanded regulations, if adopted,
could affect the exploration or development of our projects or otherwise have a material adverse effect on our operations.

Mining operations require
mining and other permits from the government. These permits may not be issued on a timely basis or at all, and such permits, when issued, may be subject to requirements or conditions with which it is burdensome or expensive to comply. Such
permitting issues could adversely affect projected production commencement dates, production amounts and costs.

Due to an increased level of
non-governmental organization activity targeting the mining industry, the potential for the government to delay the issuance of permits or impose new requirements or conditions upon mining operations may be increased. Any changes in government
policies may be costly to comply with and may delay mining operations. The exact nature of other environmental control problems, if any, which we may encounter in the future, cannot be predicted, primarily because of the changing character of
environmental requirements that may be enacted within various jurisdictions. To the extent that we are subject to any such changes, they may have a material adverse effect on our operations.



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As a result of the foregoing risks, project expenditures, production quantities and rates and cash operating costs, among
other things, could be materially and adversely affected and could differ materially from anticipated expenditures, production quantities and rates, and costs. In addition, estimated production dates could be delayed materially. Any such events
could materially and adversely affect our business, financial condition, results of operations and cash flows.

The development and operation of our
mining projects involve numerous uncertainties that could affect the feasibility or profitability of such projects.

Mine development projects
typically require a number of years and significant expenditures during the development phase before production is possible.

Development projects are
subject to the completion of successful feasibility studies and environmental assessments, issuance of necessary governmental permits and receipt of adequate financing. The economic feasibility of development projects is based on many factors such
as:



| |  | estimation of mineral reserves and mineral resources;
|- |  | -----------------------------------------------------



| |  | anticipated metallurgical recovery rates;
|- |  | -----------------------------------------



| |  | environmental considerations and permitting;
|- |  | --------------------------------------------



| |  | future metal prices; and
|- |  | ------------------------



| |  | anticipated capital and operating costs.
|- |  | ----------------------------------------

Our mine
development projects could have limited relevant operating history upon which to base estimates of future operating costs and capital requirements. Estimates of proven and probable mineral reserves and operating costs determined in feasibility
studies are based on geologic and engineering analyses and might not prove to be accurate.

The management of mine development projects and start up of new
operations are complex, and neither we, nor Hochschild, the operators of the San José Project, have a history of managing an ongoing operation, the start-up of a new operation and a significant development project in Argentina. Completion of
development and the commencement of production may be subject to delays. Any of the following events, among others, could affect the profitability or economic feasibility of a project:



| |  | unanticipated changes in grade and tonnage of ore to be mined and processed;
|- |  | ----------------------------------------------------------------------------



| |  | unanticipated adverse geotechnical conditions;
|- |  | ----------------------------------------------



| |  | incorrect data on which engineering assumptions are made;
|- |  | ---------------------------------------------------------



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| |  | costs of constructing and operating a mine in a specific environment;
|- |  | ---------------------------------------------------------------------



| |  | availability and cost of processing and refining facilities;
|- |  | ------------------------------------------------------------



| |  | availability of economic sources of power;
|- |  | ------------------------------------------



| |  | adequacy of water supply;
|- |  | -------------------------



| |  | adequate access to the site including competing land uses (such as agriculture and illegal mining);
|- |  | ---------------------------------------------------------------------------------------------------



| |  | unanticipated transportation costs and shipping incidents and losses;
|- |  | ---------------------------------------------------------------------



| |  | significant increases in the cost of diesel fuel, cyanide or other major components of operating costs;
|- |  | -------------------------------------------------------------------------------------------------------



| |  | government regulations (including regulations relating to prices, royalties, duties, taxes, permitting, restrictions on production, quotas on exportation of
minerals, as well as the costs of protection of the environment and agricultural lands);
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | fluctuations in metal prices; and
|- |  | ---------------------------------



| |  | accidents, labor actions and force majeure events.
|- |  | --------------------------------------------------

Adverse effects on the operations or further development of a project could also adversely affect our business, financial condition, results of operations and cash flow. Because of these uncertainties, and others identified in these
Risk Factors, our production estimates at the San José Project may not be achieved.

We need to continually discover, develop or
acquire additional mineral properties reserves for production and a failure to do so would adversely affect our business and financial position in the future.

Because mines have limited lives based on proven and probable mineral reserves, we will need to continually replace and expand our mineral reserves when the San José Project begins production. At an average production rate of 750
tons per day (tpd), we estimate that the San José Project has a mine life of 9 years given the reserves identified in the November 2007 NI 43-101 technical report but our estimates might not be correct and the mine life would be shortened if
we expand production. Our ability to maintain or increase our annual production will be dependent in significant part on our ability to identify new reserves, bring new mines into production and to expand or extend the life of existing mines.

Mineral exploration is highly speculative, involves substantial expenditures, and is frequently unsuccessful. Few prospects that are explored end up being
ultimately developed into producing mines. To the extent that we continue to be involved in exploration, the long-term success of our



25



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operations will be related to the cost and success of our exploration programs. We cannot assure you that our exploration efforts will be successful. The
success of exploration is determined in part on the following factors:



| |  | the identification of potential mineralization based on superficial analysis;
|- |  | -----------------------------------------------------------------------------



| |  | availability of prospective land;
|- |  | ---------------------------------



| |  | availability of government-granted exploration and exploitation permits;
|- |  | ------------------------------------------------------------------------



| |  | the quality of our management and our geological and technical expertise; and
|- |  | -----------------------------------------------------------------------------



| |  | the capital available for exploration and development.
|- |  | ------------------------------------------------------

Substantial expenditures are required to determine if a project has economically mineable mineralization. It could take several years to establish proven and probable mineral reserves and to develop and construct mining and processing
facilities. As a result of these uncertainties, we cannot assure you that current and future exploration programs will result in the discovery of mineral reserves, the expansion of our existing mineral reserves and the development of mines.

We face competition from other mining companies in connection with the acquisition of properties.

We face strong competition from other mining companies in connection with the acquisition of properties producing, or capable of producing, precious metals. Many of
these companies have greater financial resources, operational experience and technical capabilities. As a result of this competition, we might be unable to maintain or acquire attractive mining properties on terms we consider acceptable or at all.

Consequently, our revenues, operations and financial condition could be materially adversely affected.

Title to our mineral properties could be challenged.

We seek to
confirm the validity of our rights to title to, or contract rights with respect to, each mineral property in which we have a material interest. However, we cannot guarantee that title to our properties will not be challenged. Title insurance
generally is not available, and our ability to ensure that we have obtained a secure claim to individual mineral properties or mining concessions could be severely constrained. We generally do not conduct surveys of our properties until they have
reached the development stage, and therefore, the precise area and location of such properties could be in doubt. Accordingly, our mineral properties could be subject to prior unregistered agreements, transfers or claims, and title could be affected
by, among other things, undetected defects. In addition, we might be unable to operate our properties as permitted or to enforce our rights with respect to our properties.

We depend on the services of key executives.



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We are dependent on the services of key executives including our President and a small number of highly skilled and
experienced executives and personnel. Due to the relatively small size of our management team, the loss of these persons or our inability to attract and retain additional highly skilled employees could adversely affect the exploration and
development of our properties, which could have a material adverse effect on our business and future operations. We do not have key person insurance.

The
period of weak metal prices prior to 2002 resulted in depletion of the number of trained and experienced professionals and managers in our industry. Higher metal prices have resulted in an increased demand for these people, and it could therefore be
more difficult to attract or retain such experienced professionals and managers without significantly increasing the cost to us.

Our insurance coverage
could be insufficient.

Our business is subject to a number of risks and hazards generally, including:



| |  |  | adverse environmental conditions;
| | - |  | ---------------------------------



| |  |  | industrial accidents;
| | - |  | ---------------------



| |  |  | labor disputes;
| | - |  | ---------------



| |  |  | unusual or unexpected geological conditions;
| | - |  | --------------------------------------------



| |  |  | ground or slope failures;
| | - |  | -------------------------



| |  |  | cave-ins;
| | - |  | ---------



| |  |  | changes in the regulatory environment;
| | - |  | --------------------------------------



| |  |  | marine transit and shipping damage and/or losses;
| | - |  | -------------------------------------------------



| |  |  | natural phenomena such as inclement weather conditions, floods and earthquakes; and
| | - |  | -----------------------------------------------------------------------------------



| |  |  | political risks including expropriation and civil war.
| | - |  | ------------------------------------------------------

Such occurrences could result in:



| |  |  | damage to mineral properties or production facilities;
| | - |  | ------------------------------------------------------



| |  |  | personal injury or death;
| | - |  | -------------------------



| |  |  | loss of legitimate title to properties;
| | - |  | ---------------------------------------



| |  |  | environmental damage to our properties or the properties of others;
| | - |  | -------------------------------------------------------------------



27



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| |  |  | delays in mining, processing and development;
| | - |  | ---------------------------------------------



| |  |  | monetary losses; and
| | - |  | --------------------



| |  |  | possible legal liability.
| | - |  | -------------------------

Although we maintain
insurance in amounts that we believe to be reasonable, our insurance might not cover all the potential risks associated with our business. We might also be unable to maintain insurance to cover these risks at economically feasible premiums.
Insurance coverage might not continue to be available or might not be adequate to cover any resulting liability. Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration and production is not
generally available to us or to other companies in the mining industry on acceptable terms. We might also become subject to liability for pollution or other hazards which we cannot insure against or which we might elect not to insure against because
of premium costs or other reasons. Losses from these events might cause us to incur significant costs that could have a material adverse effect upon our financial performance and results of operations.

GOVERNMENTAL AND REGULATORY RISKS

Minera Andes is a Canadian company
that conducts operations through foreign (principally Argentinean) subsidiaries and joint ventures, and substantially all of our assets consist of equity in these entities. Accordingly, any limitation on the transfer of cash or other assets between
the parent corporation and these entities, or among these entities, could restrict our ability to fund our operations efficiently, or to repay our debt. Any such limitations, or the perception that such limitations might exist now or in the future,
could have an adverse impact on available credit and our valuation and stock price.

We are subject to changes in the regulatory environment where we
operate which may increase our costs of compliance.

Our mining development and exploration activities are subject to extensive regulation governing
various matters, including:



| |  |  | licensing;
| | - |  | ----------



| |  |  | production;
| | - |  | -----------



| |  |  | taxes;
| | - |  | ------



| |  |  | disposal of process water or waste rock;
| | - |  | ----------------------------------------



| |  |  | toxic substances;
| | - |  | -----------------



| |  |  | development and permitting;
| | - |  | ---------------------------



28



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| |  |  | exports;
| | - |  | --------



| |  |  | imports;
| | - |  | --------



| |  |  | labor standards;
| | - |  | ----------------



| |  |  | occupational health and safety;
| | - |  | -------------------------------



| |  |  | mine safety; and
| | - |  | ----------------



| |  |  | environmental protections.
| | - |  | --------------------------

Compliance with these
regulations increases the costs of the following:



| |  |  | planning;
| | - |  | ---------



| |  |  | designing;
| | - |  | ----------



| |  |  | drilling;
| | - |  | ---------



| |  |  | operating;
| | - |  | ----------



| |  |  | developing;
| | - |  | -----------



| |  |  | constructing; and
| | - |  | -----------------



| |  |  | closure and reclamation.
| | - |  | ------------------------

We believe that we are in
substantial compliance with current laws and regulations in Argentina and elsewhere. However, these laws and regulations are subject to frequent change and reinterpretation. Amendments to current laws and regulations governing operations and
activities of mining companies or more stringent implementation or interpretation of these laws and regulations could have a material adverse impact on us, cause a reduction in levels of production and delay or prevent the development or expansion
of our properties.

We are subject to risks relating to exploration, development and operations in foreign countries.

Our assets and operations are affected by various political and economic uncertainties, including:



| |  |  | the risks of war, civil unrest, coups or other violent or unexpected changes in government;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | political instability and violence;
| | - |  | -----------------------------------



29



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| |  |  | expropriation and nationalization;
| | - |  | ----------------------------------



| |  |  | renegotiation or nullification of existing concessions, licenses, permits, and contracts;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | illegal mining;
| | - |  | ---------------



| |  |  | changes in taxation policies;
| | - |  | -----------------------------



| |  |  | restrictions on foreign exchange and repatriation; and
| | - |  | ------------------------------------------------------



| |  |  | changing political conditions, currency controls, and governmental regulations that favor or require the awarding of contracts to local contractors or require
foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our activities are subject to
complex laws, regulations and accounting standards that can adversely affect operating and development costs, the timing of operations, the ability to operate and financial results.

Our business, mining operations and exploration and development activities are subject to extensive Canadian, United States, Argentinean and other foreign, federal, state, provincial, territorial and local laws and
regulations governing exploration, development, production, exports, taxes, labor standards, waste disposal, protection of the environment, reclamation, historic and cultural resource preservation, mine safety and occupational health, toxic
substances, reporting and other matters, as well as accounting standards. Compliance with these laws, regulations and standards or the imposition of new such requirements could adversely affect operating and development costs, the timing of
operations, the ability to operate and financial results.

MARKET RISKS

The market price of our common shares could experience volatility and could decline significantly.

Our common
shares are listed in Canada on the TSX (prior to February 7, 2007 we traded on the TSX Venture Exchange) under the symbol MAI and in the United States on the NASD OTC Bulletin Board under the symbol MNEAF. Securities of small-cap companies have
experienced substantial volatility in the past, often based on factors unrelated to the financial performance or prospects of the companies involved. These factors include macroeconomic developments in North America and globally and market
perceptions of the attractiveness of particular industries. Our share price is also likely to be significantly affected by short-term changes in metal prices or in our financial condition or results of operations as reflected in our quarterly
earnings reports. Other factors unrelated to our performance that could have an effect on the price of our common shares include the following:



| |  |  | the extent of analytical coverage available to investors concerning our business could be limited if investment banks with research capabilities do not follow our
securities;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



30



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| |  |  | the trading volume and general market interest in our securities could affect an investors ability to trade significant numbers of common shares; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the size of the public float in our common shares may limit the ability of some institutions to invest in our securities; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------

As a result of any of these factors, the market price of our common shares at any given point in time might not accurately reflect our long-term value. Securities class
action litigation often has been brought against companies following periods of volatility in the market price of their securities. We could in the future be the target of similar litigation. Securities litigation could result in substantial costs
and damages and divert managements attention and resources. Also, we may not be able to sell new common shares at an acceptable price should the need for new equity funding arise.

Investors could have difficulty or be unable to enforce certain civil liabilities against us, certain of our directors and our experts.

Minera Andes is a Canadian corporation. Substantially all of our assets are located outside of Canada and the United States, and our head office is located in the United States. It might not be possible for investors
to collect judgments obtained in Canadian courts predicated on the civil liability provisions of Canadian or U.S. securities legislation. It could also be difficult for you to effect service of process in connection with any action brought in the
United States upon our directors and experts. Execution by United States courts of any judgment obtained against us or any of the directors, executive officers or experts in the United States courts would be limited to our assets or the assets of
such persons or corporations, as the case might be, in the United States. The enforceability in Canada of United States judgments or liabilities in original actions in Canadian courts predicated solely upon the civil liability provisions of the
federal securities laws of the United States is doubtful.

The existence of outstanding rights to purchase or acquire common shares could impair our
ability to raise capital.

As of March 26, 2008 approximately 34 million common shares are issuable on exercise of warrants, options, agents
compensation options and agents compensation warrants. During the life of the warrants, options, agents compensation options and agents compensation warrants, the holders are given an opportunity to profit from a rise in the market price of common
shares, with a resulting dilution in the interest of the other shareholders. Our ability to obtain additional financing during the period such rights are outstanding could be adversely affected, and the existence of the rights could have an adverse
effect on the price of our common shares. The holders of the warrants and options can be expected to exercise or convert them at a time when we would, in all likelihood, be able to obtain any needed capital by a new offering of securities on terms
more favorable than those provided by the outstanding rights.



31



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DESCRIPTION OF MINERAL PROJECTS

The Corporations material properties are the San José Project and Los Azules Project. The disclosure on the Corporations other properties has been included only for the information of the reader.

All work completed by the Corporation was conducted under the supervision of Brian Gavin, a qualified person for purposes of NI 43-101 and
work completed by our joint venture partner Hochschild on the San José Project has been reviewed by Mr. Gavin.

MATERIAL PROPERTIES

San José Project

The San José Project is
described in the technical report entitled  NI 43-101 Technical Report Update on the San José Property, Santa Cruz Province, Argentina  with an effective date of October 1, 2007 (the San José Report)
prepared by AMEC Americas Limited (AMEC) The San José Report was authored by Pierre Rocque (P. Eng.), William Colquhoun (FSAIMM), Emmanuel Henry MAusIMM (C.P.), and Armando Simon, Ph.D, R.P.Geo (AIG), each of whom is considered a
qualified person and independent of the Corporation within the meaning of NI 43-101. The San José Report is incorporated by reference in this AIF and is available at www.sedar.com. The summary from the San José Report has been
reproduced below (in italics).

Minera Andes Inc. (Minera Andes) commissioned AMEC Americas Limited (AMEC), to update its recent
independent Qualified Persons Review and NI43-101 Technical Report (the Report) for the San José goldsilver project (the Project) located in the Province of Santa Cruz, southern Argentina.

Subsequent to a Feasibility Study in 2005 and a production decision in March 2006, the Project reached pre-production on 26 June 2007. Updated mineral resources
and mineral reserves are discussed in this Report for the Huevos Verdes, Frea and Kospi Veins.

The following people served as the Qualified Persons
responsible for the preparation of the Report as defined in National Instrument 43-101, Standards of Disclosure for Mineral Projects, and in compliance with Form 43-101F1 (the Technical Report).



| |  | William Colquhoun, FSAIMM; Principal Metallurgist, AMEC Lima office
|- |  | -------------------------------------------------------------------



| |  | Emmanuel Henry, MAusIMM (CP); Principal Geostatistician, AMEC Santiago office
|- |  | -----------------------------------------------------------------------------



| |  | Armando Simon, R.P.Geol., AIG; Principal Geologist, AMEC Santiago office
|- |  | ------------------------------------------------------------------------



| |  | Pierre Rocque, P.Eng.; Principal Mining Engineer, AMEC Oakville office
|- |  | ----------------------------------------------------------------------

AMEC understands that this report will be used by Minera Andes in support of filings with the Toronto Stock Exchange.



32



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Several effective dates are appropriate for this report, as shown below:



| |  | Effective Date of the report  1 October 2007.
|- |  | ----------------------------------------------



| |  | Effective Date of the Mineral Resources  30 June 2007.
|- |  | -------------------------------------------------------



| |  | Effective Date of the Mineral Reserves  30 June 2007 (note that these mineral reserves were originally reported by Minera Santa Cruz S.A. (MSC) as at
30 June 2007; however AMEC has reviewed and adjusted these, as discussed in Section 17.2).
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Property Setting

The Property is situated in the Province of Santa Cruz, southern Argentina, 1,750 km southsouthwest of the capital city, Buenos Aires, and 230 km
southwest of the Atlantic coast port city of Comodoro Rivadavia. Access to the Property from Comodoro Rivadavia takes about 4.5 hours and is mostly along paved highways with the final 32 km along a well-maintained gravel road. Elevations on the
Property range between approximately 300 and 700 masl.

Topography is gently rolling, with a few deeply incised valleys. The climate is arid to
semi-arid with short warm summers, and winters with temperatures commonly below 0oC. Mining and exploration can continue year round in this part of Argentina.

Most of the Property area is uninhabited; it is however, used by local farmers for sheep and cattle grazing.

Tenure and Agreements

The Project is operated as a joint venture between Minera Andes S.A. (49%) and Hochschild Mining plc
(51%), through the holding company Minera Santa Cruz S.A (MSC).

The Project covers 50,491 ha, comprising 46 contiguous Mining Claims (8
Minas or approved mining claims; and 38 Manifestations or claims that are in the application process for mining claim status) and one exploration claim (cateo). Mineral Reserves are hosted on Minas El Pluma E3 and
El Pluma 4. The claims are all in good standing, with the appropriate annual holding costs paid. MSC holds the surface rights to the San José Estancia, where the mine and associated infrastructure are constructed and the La
Carmancita Estancia, which provides right of way access between the mine and closest paved highway.

MSC retained Vector Peru S.A. to complete
an EIA covering the Project in 2004. Approval was received from the Santa Cruz Provincial Department of Mining (DPM) on 1 March 2006. MSC has received an Environmental Quality Certificate from the DPM for 2006 and is currently awaiting approval
for the 2007 certificate from the DPM. All other permits required to operate the mine are in place.



33



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Previous Work

There is no formally-recorded exploration on the project prior to Minera Andes work during 1997 to 2001. Surface exploration during this period resulted in the discovery of the Huevos Verdes and Saavedra West epithermal vein and
breccia systems. Hochschild Mining plc (until November 2006, a private Peruvian group named Mauricio Hochschild & Cia. Ltda) joint ventured into the property in 2001.

In 2004, a Feasibility Study was commissioned to evaluate the economics of an underground mining operation on the Huevos Verdes and Frea Veins. The Feasibility Study envisaged a 750 t/d operation over a 4.3 year
mine-life, using mechanized cut-and-fill mining as the primary mining method, supplemented by conventional cut-and-fill mining where the vein width was not sufficient to permit entry of the mechanized equipment. Waste rock was to be used as backfill
in the mining operation. San José mineralization was to be processed on-site using conventional crushing, grinding, flotation and concentrate cyanidation leach technology, with cyanide recovery and destruction. Gold and silver was planned to
be recovered by standard Merrill Crowe zinc precipitation and refined to produce doré bars.

The Feasibility Study was completed in October
2005 and in March 2006 led to a positive development decision, and commencement of commercial production in late June 2007. The veins included in the current mine plan are the Huevos Verde Veins, comprising three northwest aligned, discontinuous
zones: Huevos Verdes North (HVN), Huevos Verdes Central (HVC) and Huevos Verdes South (HVS), the Frea vein and the Kospi vein. The three main veins HV, Frea and Kospi vein are located within about a 2 km radius of each other.

Geology and Mineralization

The San José Project is located in the extreme northwest corner of the 60,000 km2Deseado Massif, in Patagonia,
Southern Argentina. Jurassic volcanic rocks in the massif host numerous widely-distributed clusters of gold and silver bearing quartz veins such as Cerro Vanguardia, Martha, Manantial Espejo and San José. The Deseado Massif consists of
Palaeozoic low-grade metamorphic basement rocks unconformably overlain by an extensive sequence of Middle to Upper Jurassic-aged andesitic to rhyolitic volcanic and volcanoclastic rocks. The Jurassic rocks are divided into the Bajo Pobre Formation,
predominantly of intermediate composition, and the felsic Bahia Laura Group, which discordantly overlies the Bajo Pobre Formation. The Bahia Laura Group is in turn subdivided into the Chon Aike Formation (dominantly ignimbrites) and the La Matilde
Formation (dominantly volcaniclastic rocks). These units are overlain by Cretaceous-aged tuffs and siliciclastic sediments of the Castillo Formation, which were deposited in small fault-controlled basins concentrated along the northern and southern
margins of the Deseado Massif. Overlying these are Tertiary-aged flood basalts of the Alma Gaucha Formation, which are widespread and cover much of the northwestern and central portions of the massif.

Most mineralization and exploration targets on the San José Property are hosted in the Bajo Pobre Formation, and to a lesser degree, the Chon Aike Formation.
Occurrences have also been documented in the Cretaceous-aged rocks. Targets other than the principal veins under



34



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production and development and their strike extensions, include the Odin (A and B), Ayelen, Flor, HV West, Kospi 1, Kospi South, Lourdes, Frigga, Aguas
Vivas, Roadside, and Portuguese West. An exploration program is currently underway to explore these targets.

Mineralization is developed in
low-sulphidation epithermal quartz vein, breccia and stockwork systems, and consists of banded to mottled ginguro quartz with irregular sulphide bands, mineralized by fine-grained argentite, pyrite and occasionally arsenopyrite. Sulphide
percentages vary from vein to vein, but average from <1% to 5%.

Vein lengths and thicknesses at the principal veins are variable, including 400
m of strike and 0.5 m to 4.0 m thicknesses at HVN; 520 m of strike and 0.5 m to 3.0 m thickness at HVS; 400 m of strike and 0.5 m to 5.0 m thickness at HVC; 600 m of strike and 0.5 m to 7.0 m thickness at Frea; and 1,100 m of strike and 0.3 m to 9.5
m thickness at Kospi.

The mineralized systems are preferentially developed in normal-sinistral faults striking 330° to 340°, and conjugate
dextral faults striking ~300°. Fault slickensides at Huevos Verdes rake from 0° to 90° indicating that fault-veins range from pure strike-slip to dip-slip. Veins have variable dips, ranging from 42o and 75o to the northeast in
the Huevos Verde and Frea veins to 65o to the southwest in the Kospi vein.

Alteration comprises a narrow halo of silicification around veins
and fractures, surrounded by an extensive zone of intermediate argillic (often with an argillic overprint) alteration that is mixed with phyllic alteration. The intermediate alteration zone is in turn surrounded by a much more extensive zone of
propylitic alteration.

Drilling and Sampling

Since 1998, a total of approximately 98,744 m in 583 exploration holes has been drilled on the various zones and targets throughout the Property. Of these, 493 of the holes are core (89,651 m) and 90 holes (9,093 m) are reverse
circulation (RC). In addition there are more than 6,500 underground channel samples in roughly 2,000 sample lines from the HVN, HVS, and Frea veins, and more than 170 surface trenches.

A total of 472 drill holes and trenches (76,478 m) and 2,733 channel samples and are used to support the mineral resource estimates at HVN, HVS, HVC, HVrml, Frea and
Kospi.

Data Verification

Data were
verified in four phases, dating from 2001 to 2007. Verification included laboratory visits (2001 and 2005), independent core sampling (2001 and 2004), drill collar location verification (2004 and 2007), down hole survey review (2005 and 2007),
density review (2005 and 2007), geological interpretation review (2005 and 2007), database auditing (2005 and 2007). In addition, reviews of the QA/QC data (blanks, standards, pulps and duplicates) were undertaken in 2004 and 2007. The checks
indicated that most of the data are sufficiently free from error to support resource estimation; however, underground channel-chip sample precision continues to be poor, mainly due to difficult sampling conditions and, possibly, to inadequate



35



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sampling procedures. In addition, since the last Technical Report in 2005, an incomplete QA/QC program has been in place, lacking sufficient coverage of
coarse and pulp duplicates. As a result, AMEC is unable to comment on sub-sampling and analytical precision; however, Au and Ag accuracy are within acceptable limits.

Mineral Resources

Mineral Resources, as of 30 June 2007, were estimated by Hector Aspajo, MAusIMM and
Abel Puerta, MAusIMM, (MSC), and audited and adjusted by Emmanuel Henry, MausIMM (CP) from AMEC.

Databases were constructed and maintained using
the GEMM system, a proprietary MSC database. All assays were composited to full-width vein intercepts, and were not weighted with respect to vein intercept lengths. Each intercept thus represents a single composite. Composites and 3-dimensional
solid models were constructed utilizing MineSight® commercial mine modelling software. Grade estimations for gold and silver were completed utilizing ordinary kriging methods via MineSight routines. Block grades were estimated within a
marginal cut-off shell equating to $US45/t

A geological model was completed for each vein, containing two solids (domains); one
representing the quartz vein and the other restricted to a US$45/t marginal economic cut-off, which is internal to the quartz vein domain. The resource model was then constrained to the latter domain. The blocks were classified as Measured,
Indicated or Inferred, in accordance with the Australasian 2004 JORC Code, based on the variogram ranges and the index of relative variability. These classifications were reconciled with 2005 CIM definitions. During the audit AMEC encountered
several tabulation errors in the Huevos Verdes estimates and made the appropriate corrections. AMEC has re-tabulated the mineral resources and the restated CIM-definition-compliant resource estimates for the overall San José Project as shown
in Table 1-1. AMEC also detected a high bias in the silver estimates at Huevos Verdes South in the order of 14%, which was not corrected.

The
mineral resources were estimated using the following assumptions within a marginal cut-off shell equating to $US45/t or a silver-equivalent cut-off grade of 176 g/t Ag-equiv:



| |  | gold grade top-cuts: 65 g/t HVS; 10 g/t HVC; 50 g/t HVN; 50 g/t HVS Rml; 50 g/t Frea; 30 g/t Kospi
|- |  | --------------------------------------------------------------------------------------------------



| |  | silver grade top-cuts: 6,000 g/t HVS; 500 g/t HVC; 4,000 g/t HVN; 5,000 HVS Rml ; 3,000 g/t Frea; 2,700 g/t Kospi
|- |  | -----------------------------------------------------------------------------------------------------------------



| |  | density: 2.595 t/m3for all Huevos Verde zones, 2.611 t/m3for Frea and Kospi
|- |  | ---------------------------------------------------------------------------



| |  | gold mill recovery: 89.65%
|- |  | --------------------------



| |  | silver mill recovery: 90.49%
|- |  | ----------------------------



| |  | gold commercial recovery: 99.68%
|- |  | --------------------------------



| |  | silver commercial recovery: 99.75%
|- |  | ----------------------------------



| |  | gold price: US$500.00/oz
|- |  | ------------------------



| |  | silver price: US$9.00/oz
|- |  | ------------------------



36



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Table 0-1: San José ProjectMineral Resources (Effective Date 30 June, 2007), A.

Puerta, MAusIMM (adjusted by E. Henry, MAusIMM (CP)  AMEC)



|               |                      |          |       |        |     |       |       |            |        |            |     |    
|-------------- | -------------------- | -------- | ----- | ------ | --- | ----- | ----- | ---------- | ------ | ---------- | --- | ---
|Vein           |                      | Category |       | Tonnes |     | Ag    |       | Au         |        | Ag         |     | Au 
|               |                      | (kt)     |       | (g/t)  |     | (g/t) |       | (1,000 oz) |        | (1,000 oz)
|Huevos Verdes  |                      | Measured |       | 290    |     | 691   |       | 9.04       |        | 6,447      |     | 84 
|               | Indicated            |          | 325   |        | 368 |       | 5.26  |            | 3,849  |            | 55 
|               | Measured & Indicated |          | 616   |        | 520 |       | 7.04  |            | 10,296 |            | 139
|               | Inferred             |          | 37    |        | 348 |       | 5.66  |            | 411    |            | 7  
|Frea           |                      | Measured |       | 354    |     | 397   |       | 5.70       |        | 4,523      |     | 65 
|               | Indicated            |          | 596   |        | 377 |       | 10.51 |            | 7,222  |            | 201
|               | Measured & Indicated |          | 950   |        | 384 |       | 8.72  |            | 11,745 |            | 266
|               | Inferred             |          | 83    |        | 333 |       | 7.07  |            | 887    |            | 19 
|Kospi          |                      | Measured |       |       |     |      |       |           |        |           |     |   
|               | Indicated            |          | 800   |        | 622 |       | 7.63  |            | 15,991 |            | 196
|               | Measured & Indicated |          | 800   |        | 622 |       | 7.63  |            | 15,991 |            | 196
|               | Inferred             |          | 110   |        | 577 |       | 9.06  |            | 2,040  |            | 32 
|Total San José |                      | Measured |       | 645    |     | 529   |       | 7.20       |        | 10,969     |     | 149
|               | Indicated            |          | 1,721 |        | 489 |       | 8.18  |            | 27,062 |            | 453
|               | Measured & Indicated |          | 2,365 |        | 500 |       | 7.91  |            | 38,032 |            | 602
|               | Inferred             |          | 230   |        | 452 |       | 7.80  |            | 3,338  |            | 58 



|Notes: | Cut-off Block value >US$45 = approximately 176 g/t AgEq; rounding of tonnes, as required by reporting guidelines may result in apparent differences between tonnes, grades,
and contained metal.
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Measured and Indicated Mineral Resources has grown by 586 kt, 8,185,000 ounces of silver and 125,000 ounces of
gold since the December 31, 2006 statement (Table 1-2). This is primarily the result of additional drilling.

Table 0-2: San
José ProjectMineral Resources Comparison between December 31, 2006

(AMEC, 2007) and June 30, 2007



|                          |                      |          |       |             |      |          |      |          |        |               |     |              
|------------------------- | -------------------- | -------- | ----- | ----------- | ---- | -------- | ---- | -------- | ------ | ------------- | --- | -------------
|Resource EstimateDate     |                      | Category |       | Tonnes (Kt) |      | Ag (g/t) |      | Au (g/t) |        | Ag (1,000 oz) |     | Au (1,000 oz)
|December 31, 2006         |                      | Measured |       | 645         |      | 529      |      | 7.20     |        | 10,969        |     | 149          
|                          | Indicated            |          | 1,721 |             | 489  |          | 8.18 |          | 27,062 |               | 453
|                          | Measured & Indicated |          | 2,365 |             | 500  |          | 7.91 |          | 38,032 |               | 602
|                          | Inferred             |          | 230   |             | 452  |          | 7.80 |          | 3,338  |               | 58 
|June 30, 2007             |                      | Measured |       | 291         |      | 605      |      | 7.80     |        | 5,662         |     | 73           
|                          | Indicated            |          | 1,488 |             | 505  |          | 8.44 |          | 24,184 |               | 404
|                          | Measured & Indicated |          | 1,779 |             | 522  |          | 8.33 |          | 29,847 |               | 477
|                          | Inferred             |          | 318   |             | 567  |          | 9.03 |          | 5,799  |               | 92 
|Difference since December |                      | Measured |       | 354         |      | -76      |      | -1       |        | 5,307         |     | 76           
|                          | Indicated            |          | 233   |             | -16  |          | -0   |          | 2,878  |               | 49 
|                          | Measured & Indicated |          | 586   |             | -22  |          | 0    |          | 8,185  |               | 125
|                          | Inferred             |          | -88   |             | -115 |          | -1   |          | -2,461 |               | -34



|Notes: | Cut-off Block value >US$45 = approximately 176 g/t AgEq; rounding of tonnes, as required by reporting guidelines may result in apparent differences between tonnes, grades,
and contained metal.
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



37



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Mineral Reserves

Mineral reserves at the HVN, HVC, HVS, Frea and Kospi Veins were estimated by Abel Puerta MAusIMM (MHC) and reviewed/adjusted by Pierre Rocque, P. Eng from AMEC (Table 1-3). The estimate was completed in accordance with CIM Mineral
Resource and Mineral Reserve Standards.

Table 0-3: Mineral Reserves (P.
Rocque, P. Eng., June 30th, 2007)



|                   |  |                        |  |          |  |          |  |            |  |          |  |          |  |              |  |          |  |         
|------------------ |  | ---------------------- |  | -------- |  | -------- |  | ---------- |  | -------- |  | -------- |  | ------------ |  | -------- |  | --------
|                   |  | Proven andProbable (t) |  | Au (g/t) |  | Ag (g/t) |  | Proven (t) |  | Au (g/t) |  | Ag (g/t) |  | Probable (t) |  | Au (g/t) |  | Ag (g/t)
|Huevos Verdes (HV) |  |                        |  |          |  |          |  |            |  |          |  |          |  |              |  |          |  |         
|South (HVS)        |  | 287,000                |  | 7.64     |  | 565      |  | 177,000    |  | 8.70     |  | 655      |  | 110,000      |  | 5.93     |  | 419     
|Center (HVC)       |  | 78,000                 |  | 3.90     |  | 214      |  |           |  |         |  |         |  | 78,000       |  | 3.90     |  | 214     
|North (HVN)        |  | 230,000                |  | 3.69     |  | 301      |  | 130,000    |  | 4.44     |  | 349      |  | 100,000      |  | 2.73     |  | 240     
|Total HV           |  | 595,000                |  | 5.62     |  | 417      |  | 307,000    |  | 6.91     |  | 526      |  | 288,000      |  | 4.26     |  | 301     
|Frea               |  | 937,000                |  | 7.77     |  | 343      |  | 350,000    |  | 4.84     |  | 344      |  | 587,000      |  | 9.52     |  | 342     
|Kospi              |  | 854,000                |  | 6.52     |  | 536      |  |           |  |         |  |         |  | 854,000      |  | 6.52     |  | 536     
|Total              |  | 2,386,000              |  | 6.79     |  | 430      |  | 657,000    |  | 5.80     |  | 429      |  | 1,729,000    |  | 7.16     |  | 431     



|Note: | Rounding of tonnes as required by reporting guidelines may result in apparent differences between tonnes and grades.
|----- | --------------------------------------------------------------------------------------------------------------------

Reserve parameters utilized by MHC were modified as required, and the following parameters support the reserves estimates:



| |  | minimum mining widths of 1.0 m for conventional cut-and-fill stopes and 1.5 m for mechanized cut-and-fill stopes
|- |  | ----------------------------------------------------------------------------------------------------------------



| |  | unplanned dilution of 12% (adjusted from 15% used in the Feasibility Study)
|- |  | ---------------------------------------------------------------------------



| |  | mining recovery of 95% (adjusted from 98% used by MSC)
|- |  | ------------------------------------------------------



| |  | stopes outlined according to a break-even cut-off value of US$94/t and also by consideration of key mining criteria such as width, equipment selection and
stope access
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | recovery figures used against sill pillar reserves of 25% dilution and 75% mining recovery (not considered in MSC estimate)
|- |  | ---------------------------------------------------------------------------------------------------------------------------



| |  | 10 m crown pillar
|- |  | -----------------



| |  | Mineral Reserves shown above are inclusive of the Mineral Resources shown on Table 1-1.
|- |  | ---------------------------------------------------------------------------------------

Mineral Reserves are considered sufficient to support a 9 year mine-life at an average mining rate of 750 t/d.

Mine Development and Mine Plan

The Huevos Verdes complex
and the Frea vein are accessed via two separate declines from surface. The Frea vein is currently being mined by the MCF (mechanized cut-and-fill) method whereas portions of the HV vein are scheduled to be mined by the CF (conventional cut-and-fill)
method due to narrower vein widths than at Frea. It is anticipated that the same mine design will be implemented for the Kospi deposit, once the characteristics of the vein are better understood.

The mining plan provided by MSC for the Huevos Verdes and Frea veins is based on minimum mining widths of 1.0 m for conventional cut-and-fill stopes and 1.5 m for
mechanized cut-and-fill



38



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stopes. A 1-boom jumbo is used for development and production drilling in wider stopes (i.e. over 1.5 m); otherwise, hand-held drills (i.e.
stopers) are used for production drilling. Ore haulage to the ore passes is by scooptrams ranging from 1.5 yd3to 4.0 yd3. Current haulage is performed by 20 t trucks via the ramp to surface where it is transported directly from the mine to the processing plant.

Waste rock from development will be used for backfill in the cut-and-fill mining. Later in the mine life, when a shortage of waste rock for
backfill occurs, then borrow surface till will be used for backfill.

Fresh air is distributed throughout the mine via a pull
ventilation system, which uses one fan per vein to pull the air into the mine through near-vertical raise-bored raises and the declines.

According
to the RMR classification system, both the HVN and HVS zones show Poor to Fair quality rockmass designations and the Frea zone ranges from Fair to Good. The most competent ground occurs in the ore body, then in the footwall, and finally in the
hanging wall. Ground conditions tend to improve with increasing depth below surface. Visual assessment underground corroborates this statement. Bolts and wire mesh were observed occasionally; however, no systematic bolting has been implemented
underground. In AMECs opinion, excavations where back span exceeds 3 m, and where the RMR value is less than 50, should be systematically bolted using a minimum 1.8 m (effective length) bolt.

Connection to the national power grid was deemed non-feasible during the Feasibility Study due to its inadequate and unreliable supply capacity. Consequently,
electrical power is provided by an on-site, diesel-fired power generating station. The power generating plant consists of four generators, each capable of providing 1,600 kW of power (at 50Hz). Under normal operations, three generators provide
approximately 4,800 kW, thus allowing one generator on standby.

Production currently comes from the Frea (60%) and HVS (40%) veins at a
rate of 750 t/d. MSC is planning to increase daily throughput to 1,500 t/d.

An annual refining contract with Argor-Heraeus SA that is under
negotiation will provide a market for gold and silver produced from the San José property.

Metallurgy and Processing

Several bench-scale metallurgical investigations have been conducted on Huevos Verde samples since testwork
was initiated by Minera Andes in 1998. Five metallurgical test programs were conducted on Huevos Verde samples between 1998 and 2005. Frea was investigated as part of the 2005 Feasibility Study. In these test programs, various metallurgical
variables were examined to determine the optimum design parameters for the processing plant. The Feasibility Study proposed a concentrator flowsheet using two-stage crushing, ball mill grinding, flash and rougher flotation, pre-aeration, concentrate
cyanide leaching in conventional agitated tanks and dewatering, acid volatilization cyanide recovery (AVR), sulphur dioxide-air (SO2-Air) cyanide
destruction, and Merrill Crowe-smelting for the production of a gold-silver doré. A primary P80grind of 75 μm was recommended,
and an overall life-of-mine recovery of Au 90% and Ag 88% projected.



39



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During early 2006, MSC and Gekko Systems (Gekko) jointly reassessed the Feasibility Study process flowsheet and began
investigating the use of an alternative Gravity-Flotation-Intensive Leaching (GFIL) gold and silver recovery flowsheet that was developed by Gekko. Gold and silver will be recovered by direct electrowinning and resin column scavenging from the
concentrate leach solution.

During 2006 and early 2007 Gekko conducted two phases of bench scale metallurgical testwork on metallurgical samples
from HV and Frea veins to support their process design. Additional amenability testwork was subsequently conducted by Tecsup in 2007 on metallurgical samples from the new Kospi vein. Overall AMEC considers the testing completed on this process
to be at a pre-feasibility level. The testwork generally confirms the amenability of the HV, Frea and Kospi veins to either the original feasibility flotation-leaching or the Gekko GFIL flowsheets. In general the veins are metallurgically
similar. Metallurgical variability test work should be completed on Kospi in the future for mine planning recovery purposes.

The 750 t/d Gekko
based process plant currently being commissioned by MSC is the first application of the process on a continuous basis, in this configuration, at this scale and on this type of mineralogy. MHC ́s prior experience with the Gekko ILR
technology and the preliminary Gekko testwork results led them to decide to advance the San José project to construction based on the Gekko flowsheet without any need for further assessment or a detailed feasibility study on the
process. The current flowsheet is based on a primary grind size of P80 110 μm.

The final product will be doré bars. There is
an option to produce a gold-silver concentrate, using a flotation cleaner and filter circuit provided, which will be bagged for shipping to a smelter. This will only be activated if the intensive leach plant is not operating.

There is often some potential for unanticipated throughput and recovery loss and high operating cost risk exposure and learning curve typically associated
with the commissioning a relatively new process concept or application that is progressed to construction in the absence of feasibility level definition. Based on its review of the Gekko testwork and engineering, AMEC believes these risks
exceed that of normal unanticipated start-up issues and there are some specific aspects of the flowsheet that may require additional capital cost, modification and time following start-up in order to achieve the design 750 t/day throughput
and planned recoveries and operating costs.

AMEC has identified some potential issues with the Gekko test work which relate to the plant
process design criteria, scale-up and implementation of the as-built Gekko process. These, as well the fact that the process is being put into production without completion of a detailed feasibility study, results in an increased risk that the
recoveries indicated in the following laboratory batch scale testwork will not be achieved in the plant currently being commissioned.

AMEC ́s analysis of plant grind and throughput performance indicated the existing ball mill is too small
to achieve the 750 t/d throughput and P80110 microns grind planned. At the planned grind AMEC expect the mill throughput will on average be about 88% of
planned throughput.



40



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AMEC also believes that the planned P80110 microns product size does not provide an optimum recovery and recommends 74 microns is considered. This appears to be supported by commissioning plant data
AMEC reviewed. Overall AMEC believes additional grind capacity will be required to achieve the throughput and recoveries planned.

AMEC
believes a gravity Falcon and flotation flowsheet is capable of achieving similar recoveries to the more complex Gekko Jig-Falcon gravity system and flotation flowsheet. AMEC recommends the recovery benefits of utilizing the Gekko Jig plant are
reviewed in future plant trials relative to the ongoing operating and maintenance costs of operating this equipment.

Based on laboratory leach
results Gekko concluded the San Jose GF concentrates are amenable to intensive cyanidation, using the Gekko In-Line Leach reactor. However no actual test or pilot work was conducted in an In-Line leach reactor and AMEC believes there is
additional recovery risk associated with implementing continuous in-line leaching based on batch leach test work results.

Gekko reported
concentrate cyanidation test work gave average gold and silver leach extractions of about 95-97%, in 24 to 48h. AMEC notes the reporting time of 24 -48 h, is longer than a 9 h residence time planned in the actual Gekko process. Silver-sulphide
dominant mineralization similar to the flotation concentrate typically requires extended leach times (48h) to achieve efficient silver extractions. Consequently the indicated test work leach extractions should be treated with caution as AMEC
believes actual Gekko plant leach recoveries will be lower than this. AMEC believes additional leach capacity wil be required and this is supported by current commissioning performance.

AMEC believes the use of lower gravity-flotation concentration ratios (higher concentrate weight recoveries) than planned will improve recovery performance. High
concentration ratios are currently being implemented to offset Gekko reactor throughput-residence time limitations that result in low gold and silver leach recoveries. However additional leach capacity will be required to do this.

AMEC has not assessed or costed the above risks in detail but have included an additional sustaining capital provision of $5 million in the
project cash flow over Years 1 and 2 to cover potential unanticipated and unspecified modifications to the milling and concentrate leaching and recovery circuits that could be required to achieve the throughput and recoveries ultimately
expected.

AMEC has also used a reduced recovery of 75% Au and 65% Ag in the initial year of operation based on current plant performance
described in 16.5.3. AMEC expects that once required modifications are made to the process plant the planned throughput and recovery indicated by the feasibility study of about Au 90% and Ag 88% will ultimately be achieved.

Plant commissioning was initiated in July 2007, but the ramp-up is taking longer than initially planned because of commissioning and operational issues problems
associated with the implementation of the Gekko process, which are still being resolved. During AMEC ́s visit the plant was still being commissioned and operating at a lower throughput and recovery than planned. Plant throughput and recovery
continued to improve from August to September under Gekko ́s supervision, but AMEC expects modifications will ultimately be required to the process plant to achieve the planned throughput and recovery.



41



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Most process control was being done manually due to unstable plant operation. The control philosophy should be
reviewed.

Plant accountability based on physical production declined from 88% in August to 80% in September. AMEC regard this as low and should be
investigated. During AMEC ́s site visit some poor sample preparation practices associated with the mill feed head sample were noted which could be expected to introduce some sampling assay bias and should be corrected. A possible source of the
current plant negative variance also includes overstating mill feed and physical theft and AMEC recommend the plant mill feed weigh to meter calibration should be checked and security controls reviewed.

Cost Estimates and Financial Analysis

The total estimated
capital cost to design and build the facilities planned in the 2005 Feasibility Study amounted to US$61.3 M (AMEC, 2005). A recent capital cost update provided by MSC shows an increase of 48%, to US$90.6 M (excluding sustaining capital costs, which
vary from US$12 M to US$7 M per year until 2010). The estimate covers the direct field costs of executing the project, plus the indirect costs associated with design, procurement and construction efforts, including contingency and working capital.

MSC is considering re-evaluating the concept of installing a power line in order to reduce operating costs; this has not been included in the
financial analysis.

The operating costs include those costs required to produce at a rate of 750 t/d, including all mine development costs (e.g.
ramps, ventilation raises, backfill raises, etc.). These costs have been prepared using Q2 2007 US$ and exclude: contingencies, allowances for escalation, value-added taxes and import duties, and commercial fees and expenditures. The average cash
operating costs are estimated at US$94/t of ore processed, or U$235/oz AuEq.

Smelter terms are consistent with industry standards and are
considered in the cash flow calculations.

Long-term metal prices selected for the analysis were US$575 for gold and US$9 for Ag.

The project was evaluated on a stand alone, 100% equity-financed basis using a discounted cash flow analysis. Cash inflows consist of annual revenue projections for
the remaining mine-life. Cash outflows such as sustaining capital, operating costs and taxes are subtracted from the inflows to arrive at the annual cash flow projections. Annual net cash flow (NCF) projections are then discounted for time and risk
and summed to arrive at a net present value (NPV).

The results of the economic analysis represent forward-looking information as defined under
Canadian securities law. The results depend on inputs that are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those presented here. Some of the key
technical risks include: lower than anticipated



42



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metallurgical recoveries of gold and silver from the Gekko system; lower than expected mine recovery and higher than expected dilution; increases to
future operating and capital costs; the fact that mineral resources and mineral reserves are estimates based on limited sampling data, interpretation of geology and assumptions applied that may change with increased exploration,
development and mining; and future metal prices may change from those used in the economic model.

The NPV results for various discount
rates are presented in Table 1-4.

Table 1-4: San José NPV (Base Case 8%)



|                                  |  |       |   |      |        
|--------------------------------- |  | ----- | - | ---- | -------
|After Tax                         |  | Units |   | 000
|Cumulative Undiscounted Cash Flow |  | (US$  | ) |      | 149,535
|NPV 5 %                           |  | (US$  | ) |      | 109,315
|NPV 8 %                           |  | (US$  | ) |      | 91,279 
|NPV 10 %                          |  | (US$  | ) |      | 81,166 
|NPV 15 %                          |  | (US$  | ) |      | 61,026 

The sensitivity analysis was performed on the Base Case NPV using an 8% discount rate. Positive and negative
variations, up to 30% in either direction, were applied independently to the gold and silver prices, and the capital and operating costs.

The
results of this analysis demonstrate that the projects financial outcome is most sensitive to variation in gold price and silver price. The next most sensitive parameter is the operating costs. The capital cost is the parameter studies which
had the least impact on the sensitivity of the NPV.

The cash-flow model was created on a moving forward basis. This implies that all of the capital
already spent is considering sunk and was not included in the required initial investment. Therefore, the payback period for the remaining initial investment is 2.5 years. It is important to note that the sunk costs on this project are substantial.

Conclusions and Recommendations

Approximately ten years after the San José Property was first acquired by Minera Andes and through several successful exploration programs and development phases, mine pre-production was initiated at the Huevos Verdes and Frea
Veins on 26 June 2007.

In some areas, the existing Mineral Resources and/or Reserves remain open along strike, or at depth. Additional
drilling is recommended to further delineate these zones and ultimately to add to existing Mineral Resource and Mineral Reserves. Prior to the next run of the resource model several database and modeling issues should be addressed to improve the
accuracy of the estimate. Most of these issues were uncovered during AMEC ́s involvement with the audit and the review of the geological model and supporting database.

AMEC has noted that some mineralized intervals, showing vertical and horizontal continuity parallel to the main vein and logged in the drill holes, were not interpreted and captured in the current resource model.



43



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Some of these improvements include the twinning of a representative number of RC and pre-2004 core holes, an
evaluation of decay of cyclicity for the RC holes, further review of collar and downhole surveying for the drill holes, more detailed geological interpretations and further review on controls of mineralization, the construction of an oxide domain in
the resource model, and continued review and improvement of the underground sampling methodology.

For the Huevos Verdes, Frea and Kospi veins,
AMECs view is that the sample spacings currently being used for the Indicated category are the maximum allowable. This relates to the ability to determine the tonnage of mineable ore and adequately delineate the boundaries of the ore shapes
(i.e. modelling the geometry of the veins). Subsequent to additional drilling and/ore underground development MSC should consider re-running the variography and constructing a new resource model to see if the resource classification can be improved.

The Gekko recovery process will need to be closely monitored to determine if the desired gold and silver recoveries are being achieved. Plant
modifications are recommended by AMEC to achieve the life of mine recoveries projected at the required throughput. These include reducing the grind size to a primary P80 grind of 75 microns (from the 110 microns currently in the Gekko design
criteria). The additional capital costs to achieve this have not been reviewed in detail, but are roughly estimated at US$5.0M.

In addition to the
above plant-related capital costs, there are approximately US$20.8M from the 2007 revised capital cost estimate (MSC) that are still to be spent plus approximately US$37.2M in sustaining capital from 2007 until the end of mine life.

MSCs next mineral reserve estimates will require improved documentation to assist in a transparent conversion of mineral resources to mineral reserves. AMEC
strongly recommend that MSC identify sill pillar areas in the stoping blocks and assign appropriate dilution and mining recovery factors to those areas. AMEC agrees with the reduced dilution factor used by MSC (15% in the Feasibility Study versus
12% in the current LOM) based on visual observations at HVS and Frea; however, operational experience will need to be gained to substantiate a higher mining recovery factor.

AMEC anticipates adverse ground conditions during sill pillar recovery. Consequently, it is recommended to evaluate alternative mining methods to optimize sill pillar recovery.

Numerous other high priority targets have been identified on the Property through early previous stage drilling and surface exploration programs. The main targets are
Odin (A and B), Ayelen, Flor, HV West, Kospi 1, Kospi South, Lourdes, Frigga, Aguas Vivas, Roadside, and Portuguese West. Although these are all considered to be at early stages of exploration, MSC believes that significant upside
potential for the Property occurs within these prospects. Future explorations efforts should be focused within these zones.

The San
José Property should be further evaluated for additional vein style gold and silver mineralization. An exploration program, as outlined below, is recommended. The total cost for the next phase of exploration is approximately US$3.92M and
includes 145 drill holes totalling 38,300 m (at the time of this report the program has already commenced and 24 holes totalling 5,858 m had been completed from the overall program).



44



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Information Subsequent to San José Report Summary

Further supporting the mineral potential described in the San José Report, new drilling in the fourth quarter of 2007 defined 2.8 km of strike length along the
Odin and Ayelén veins that have significant potential to further increase the current reserves/resources. The highest grade intercept from this drilling campaign was in hole SJD-412 that encountered 52.44 g/t (1.69 ounces per ton
opt) gold and 1,147 g/t (37 opt) silver over 1.68 meters.

During 2007, approximately 28,587 meters of core drilling totaling 113 drill holes
was conducted on several targets identified at San José. In September thru December of 2007, 82 holes totaling 20,274 meters were drilled at the Frea, Odin, Ayelén, Frigga, and Lourdes targets. Assay results for 19 drill holes are
still pending. Three of the areas (Frea, Odin, and Ayelén) contained high-grade gold/silver mineralization discovered in late 2005 through reconnaissance drilling of blind geophysical targets.

The majority of the fourth quarter 2007 drilling concentrated on the Odin and Ayelén veins covering approximately 2.8 kilometers of strike length along these
open-ended mineralized veins. The drilling completed in 2007 extended the known mineralization along the Odin and Ayelén vein trends another 1000 meters along strike  more than a 64% increase in strike length from the 2005 discovery
drilling.

The discovery of new high-grade silver/gold mineralization in veins such as Odin, Ayelén and Frea represents additional mineralization
that can add to the current reserves/resources at the project where production has recently commenced. These discoveries also indicate the large mineral potential of the San José property where more than 40 kilometers of vein trend target is
currently known to exist, and of which less than 15% has been explored to date.

San JoséOdin Vein

During the 2007 campaign, 30 holes were drilled on the Odin target and the vein is currently defined by a total of 44 holes in an area approximately 1600 meters along the
strike of the vein to a depth of approximately 200 meters (see map in March 7, 2008 New Release). Highlights of the program included the identification of massive and banded quartz veining with disseminated pyrite and argillic alteration. The
Odin vein remains open along strike and to depth.

High-grade gold and silver mineralization was intersected in the fourth quarter 2007 drilling campaign
at the Odin vein (see table below). The highest grade intercept drilled in this drilling campaign is described above. Highlights of the Odin vein drilling include values up to 0.46 meters of 34.43 g/t (1.11 opt) gold and 321 g/t (10 opt) silver
(SJ-368) which is part of a larger interval running 3.15 meters of 10.57 g/t (0.34 opt) gold and 244 (8 opt) g/t silver. Hole SJD-398 contains 0.50 meters of 6.30 g/t (0.20 opt) gold and 1074 g/t (35 opt) silver at depth of 220 meters below surface.
See table below for important intercepts.



45



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San JoséAyelén Vein

Drilling in the fourth quarter has expanded the Ayelén high-grade gold silver vein to a strike length of 1200 meters and a depth of 200 meters (see map in News Release dated March 7, 2008). A total of 45
holes have been drilled on the Ayelén vein with 37 holes drilled in the 2007 campaign. The Ayelén vein structure is sub parallel to the Odin vein and dips in the same direction southwest.

Significant intercepts (see table below) at Ayelén include SJD-397 that encountered 28.22 g/t (0.91 opt) gold and 1,759 g/t (57 opt) silver over 1.02 meters.
Drill hole SJD-426 encountered 1.53 meters grading 8.21 g/t (0.26 opt) gold and 1,161 g/t (37 opt) silver within a larger interval of 2.95 meters of 5.41 g/t (0.17 opt) gold and 804 g/t (26 opt) silver. Hole SJD-428 encountered 1.55 meters
containing 15.41 g/t (0.50 opt) gold and 736 g/t (24 opt) silver.

San JoséFrea Vein

The Frea vein is located 2 kilometers northeast of the Huevos Verdes vein, and both veins are currently being mined on several levels. Proven reserves of 587,000 tonnes
and probable reserves 350,000 tonnes ( totaling 937,000 tonnes grading 7.77 g/t gold and 343 g/t silver  see November 26, 2007 News Release) at the Frea vein are currently delineated over a strike length of about 575 meters and to a depth
of approximately 350 meters below the surface. The drilling completed in 2007 extends the known mineralization along the Frea vein trend another 500 meters along strikean increase of 87% in strike length. Frea Vein mineralization now extends
for 700 meters of strike and it remains open to further expansion to the northwest and to depth.

The 2007 drilling concentrated on infill and drilling the
northwest extension of the Frea vein. Significant drilling results include SJD-364 that encountered 11.57 g/t (0.37 opt) gold and 1,291 g/t (42 opt) silver over 3.64 meters of high grade mineralization. Drill hole SJD-386 encountered 1.50 meters
grading 12.87 g/t (0.41 opt) gold and 710 g/t (23 opt) silver. Hole SJD-391 encountered 1.47 meters containing 9.41 g/t (0.30 opt) gold and 758 g/t (24 opt) silver. In 2007, the drilling at the Frea vein indicates that it is an open-ended
mineralized silver/gold vein. Assay results are pending for hole SJD-442.

September thru December 2007 Drilling Highlights, San José Project



|                |  |               |  |             |  |                   |  |          |  |         
|--------------- |  | ------------- |  | ----------- |  | ----------------- |  | -------- |  | --------
|Drill Hole/Vein |  | From (meters) |  | To (meters) |  | Interval (meters) |  | Au (g/t) |  | Ag (g/t)
|Frea            |  |               |  |             |  |                   |  |          |  |         
|SJD-364         |  | 142.26        |  | 145.90      |  | 3.64              |  | 11.57    |  | 1,291   
|SJD-367         |  | 291.78        |  | 293.86      |  | 2.08              |  | 1.54     |  | 30      
|SJD-383         |  | 125.77        |  | 126.15      |  | 0.38              |  | 0.30     |  | 78      
|SJD-386         |  | 128.20        |  | 128.75      |  | 0.55              |  | 1.86     |  | 118     
|and             |  | 171.90        |  | 173.40      |  | 1.50              |  | 12.87    |  | 710     
|SJD-391         |  | 62.53         |  | 64.00       |  | 1.47              |  | 9.41     |  | 758     
|Odin            |  |               |  |             |  |                   |  |          |  |         
|SJD-366         |  | 130.2         |  | 130.57      |  | 0.37              |  | 2.63     |  | 226     
|SJD-368         |  | 101.20        |  | 104.35      |  | 3.15              |  | 10.57    |  | 244     



46



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|          |  |        |  |        |  |      |  |       |  |      
|--------- |  | ------ |  | ------ |  | ---- |  | ----- |  | -----
|includes  |  | 101.20 |  | 103.13 |  | 1.93 |  | 15.25 |  | 334  
|includes  |  | 102.57 |  | 103.13 |  | 0.56 |  | 34.43 |  | 321  
|SJD-369   |  | 144.7  |  | 145.52 |  | 0.82 |  | 8.44  |  | 539  
|SJD-371   |  | 130.2  |  | 130.22 |  | 0.20 |  | 0.23  |  | 22   
|SJD-375   |  | 123.38 |  | 124.02 |  | 0.66 |  | 0.76  |  | 146  
|SJD-376   |  | 66.50  |  | 66.95  |  | 0.45 |  | 0.66  |  | 213  
|SJD-379   |  | 198.94 |  | 202.45 |  | 3.51 |  | 3.74  |  | 108  
|includes  |  | 198.94 |  | 199.24 |  | 0.30 |  | 9.29  |  | 360  
|includes  |  | 200.87 |  | 202.45 |  | 1.58 |  | 5.06  |  | 144  
|SJD-381   |  | 193.65 |  | 194.82 |  | 1.17 |  | 4.15  |  | 85   
|SJD-382   |  | 108.44 |  | 109.33 |  | 0.89 |  | 0.36  |  | 49   
|SJD-384   |  | 219.85 |  | 220.35 |  | 0.50 |  | 0.23  |  | 16   
|SJD-388   |  | 230.23 |  | 230.55 |  | 0.32 |  | 1.51  |  | 10   
|SJD-392   |  | 114.21 |  | 116.28 |  | 2.07 |  | 3.59  |  | 418  
|includes  |  | 114.80 |  | 115.48 |  | 0.68 |  | 6.99  |  | 951  
|and       |  | 134.80 |  | 135.80 |  | 1.00 |  | 1.23  |  | 189  
|SJD-398   |  | 125.80 |  | 126.30 |  | 0.50 |  | 6.30  |  | 1,074
|SJD-401   |  | 115.60 |  | 116.05 |  | 0.45 |  | 0.45  |  | 47   
|SJD-403   |  | 150.20 |  | 151.80 |  | 1.60 |  | 5.20  |  | 72   
|SJD-404   |  | 222.10 |  | 222.90 |  | 0.80 |  | 0.99  |  | 33   
|SJD-409   |  | 60.87  |  | 62.40  |  | 1.53 |  | 1.05  |  | 131  
|SJD-412   |  | 116.66 |  | 118.34 |  | 1.68 |  | 52.44 |  | 1,147
|and       |  | 122.53 |  | 123.3  |  | 0.77 |  | 4.43  |  | 335  
|SJD-414   |  | 58.70  |  | 61.50  |  | 2.80 |  | 6.23  |  | 110  
|SJD-419   |  | 115.53 |  | 116.50 |  | 0.97 |  | 3.32  |  | 90   
|SJD-420   |  | 234.50 |  | 235.00 |  | 0.50 |  | 0.53  |  | 95   
|SJD-423   |  | 136.76 |  | 137.18 |  | 0.84 |  | 3.52  |  | 388  
|Ayelén    |  |        |  |        |  |      |  |       |  |      
|SJD-363   |  | 74.4   |  | 75.9   |  | 1.50 |  | 2.57  |  | 297  
|and       |  | 168.70 |  | 169.70 |  | 1.00 |  | 5.97  |  | 587  
|SJD-374   |  | 155.66 |  | 156.85 |  | 1.19 |  | 11.67 |  | 721  
|SJD-385   |  | 106.15 |  | 115.40 |  | 9.25 |  | 4.10  |  | 248  
|includes  |  | 106.87 |  | 108.35 |  | 1.48 |  | 11.95 |  | 240  
|and       |  | 111.95 |  | 115.40 |  | 3.45 |  | 3.65  |  | 343  
|SJD-387   |  | 204.68 |  | 205.68 |  | 1.00 |  | 0.48  |  | 62   
|SJD-390   |  | 203.20 |  | 204.09 |  | 0.89 |  | 1.10  |  | 196  
|SJD-394   |  | 228.70 |  | 229.80 |  | 1.10 |  | 3.30  |  | 482  
|SJD-397   |  | 186.88 |  | 187.90 |  | 1.02 |  | 28.22 |  | 1,759
|SJD-406   |  | 177.93 |  | 178.90 |  | 0.97 |  | 0.04  |  | 450  
|SJD-412   |  | 135.4  |  | 140.53 |  | 5.13 |  | 7.11  |  | 382  
|and       |  | 138.81 |  | 140.53 |  | 1.72 |  | 15.41 |  | 461  
|SJD-420   |  | 234.50 |  | 235.00 |  | 0.50 |  | 0.53  |  | 95   
|SJD-421   |  | 208.20 |  | 210.25 |  | 2.05 |  | 4.60  |  | 294  
|SJD-422   |  | 118.35 |  | 119.10 |  | 0.75 |  | 0.13  |  | 39   
|SJD-425   |  | 94.35  |  | 96.00  |  | 1.65 |  | 4.86  |  | 67   
|SJD-426   |  | 234.07 |  | 237.02 |  | 2.95 |  | 5.41  |  | 804  
|including |  | 234.63 |  | 236.16 |  | 1.53 |  | 8.21  |  | 1,161
|SJD-427   |  | 75.45  |  | 77.90  |  | 2.45 |  | 6.42  |  | 861  
|SJD-428   |  | 77.65  |  | 79.20  |  | 1.55 |  | 15.41 |  | 736  
|SJD-429   |  | 101.68 |  | 103.20 |  | 1.52 |  | 4.51  |  | 584  
|SJD-430   |  | 236.37 |  | 237.00 |  | 0.63 |  | 4.54  |  | 656  
|and       |  | 241.34 |  | 243.44 |  | 2.1  |  | 3.05  |  | 308  
|SJD-431   |  | 124.70 |  | 125.04 |  | 0.34 |  | 0.01  |  | 684  



|* | All of the drill holes are angle holes. True thickness of the vein is undetermined.
|- | -----------------------------------------------------------------------------------



47



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In addition to the holes listed in the table above, four holes (SJD-370, 372, 377, and 395) were drilled in the Lourdes
target plus five holes (SJD-400, 402, 405, 408, and 413) were drilled in the Frigga target and one hole SJD-396 was drilled at the Kospi vein. These holes encountered quartz veining and/or hydrothermal breccia that did not return values above
background levels of gold and silver. Although only background gold and silver values were encountered, the geologic features identified at these targets are consistent with precious metal-bearing epithermal systems. One goal of this reconnaissance
drilling is to identify promising geologic trends that will be further tested in order to explore for high-grade shoots typical of the mineralization found at the Frea, Kospi, and Huevos Verdes veins. Also, several other targets, such as Aguas Vivas
to the north, remain to be drill tested on the property. Assay results are pending on drill holes SJD- 407 and SJD-408.

At Odin drill holes SJD-373, 393,
and 399 did not intersect the vein and holes SJD-362, 365, 407, 415, and 424 contained no gold and silver values. Assay results are pending for Odin holes SJD-410, 411, 418, 438, and 440. At Ayelén drill holes SJD-378, 380, and 411
intersected the quartz vein without precious metal values and assay results are pending on SJD-416, 432-439, 441, and 443.

On March 12, 2008,
Hochschild released updated resource and reserve estimates at San José in their Preliminary Results for Year Ended 31 December 2007. These results show an increase in reserves of 19% and an increase in resources of 28% over the year
ended 31 December 2006 JORC Code results. Currently Minera Andes cannot endorse these results as only a part of the data on which the resource /reserve calculations are based has been released to Minera Andes. Minera Andes is in the process of
obtaining this information and will review the data and report on the results as soon as practicable. Exploration work completed in the second half of 2007 includes 20,274 meters (82 holes) of drilling mainly on Frea, Odin, and Ayelén veins
and several hundred meters of drifting along the Frea vein. Receipt of assay results is underway for 19 drill holes. The Frea, Odin, and Ayelén veins all have mineral potential and remains open at depth and along strike.

MSC plans a 2008 exploration program at San José consisting of mapping, compilation and interpretation of all project data on a district scale (115 km2) to
identify new targets. Approximately 4,000 meters of surface drilling and 3,800 meters of underground drilling are planned for 2008 as a follow-up on the targets generated from the surface work.



48



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Assay results for the drilling were reviewed by Brian Gavin, Minera Andes vice president, exploration, who is an
qualified person as defined by NI 43-101. All samples were collected in accordance with industry standards. Splits from the drill core samples were submitted to Alex Stewart Assayers, Argentina, S.A., in Mendoza, Argentina, for fire
assay and ICP analysis. Accuracy of results is tested through the systematic inclusion of standards, blanks and check assays.

San JoséMine
Expansion

In March 2007, an aggressive exploration program was approved by the joint venture partners with the goal of adding new reserves and resources,
and identifying new veins to increase mine life and facilitate the expansion of production at the San José Mine. Currently, a total of 40 kilometers of vein trend has been identified on the San José property. Extensive drilling has
been conducted on only 15% or about 4 km of veins that make up the reserve and resource base. The 2007 drilling campaign was highly successful contributing significantly to increasing reserves and resources at San José. The mine life has
doubled from 4.5 year to over 9 years and it appears we have the potential to add new reserves and resources.

In November of 2007, the board of MSC made
the formal decision to double production capacity from 750 tonnes per day to 1,500 tonnes per day at the San José mine in southern Argentina. The cost of the expansion will be financed primarily from cash flow from the existing mine and
unsecured local bank financing. Minera Andes anticipates the expansion to be completed by year-end 2008.

Various pieces of new equipment have been ordered
by MSC for the mine expansion, including a new ball mill, flotation cells, a crusher and other ancillary equipment. Also, work to connect to the national power grid is underway, and this connection is forecast to provide significant cost savings
over the on-site diesel generators that currently supply the electrical power to the project. Following connection to the power grid, the diesel generators will be retained as a backup power supply.

San JoséCosts

In Q3 of 2007 the construction completion of the
750 tpd operation was estimated to cost $94.1 million, plus value added tax (IVA). Pre-completion mine expansion costs and costs related to the change in scope to the original mine plan incurred to date are approximately $11 million, plus IVA. At
the end of the second quarter of 2006, when the decision to place the mine into production, Minera Andes reported the mine cost was estimated at $78.3 million, plus IVA. The amounts paid for IVA tax are refundable to MSC rateably based on
production.

The 20% cost increase for completing construction of the mine arises from increases due to inflation of equipment and materials costs,
construction delays, and increased contractor costs. Mine expansion costs and costs related to the change in scope to the original mine plan of approximately $11 million include the expansion of facilities, purchase of over-dimensioned equipment,
mining engineering studies for the Kospi vein, the commencement of construction of the ramp for the Kospi vein, and additional underground workings.



49



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The current project loan facility for $61 million with Hochschild was expanded to $65 million at the end of the second
quarter of 2007 to cover additional mine completion costs and we are currently finalizing the terms and conditions of the formal loan documentation. The loan will be repaid from MSC cash flow and there is no hedging of the projects gold and
silver production (which had been required under the previously arranged bank financing facility). To accelerate the mine expansion and provide necessary funds from mine cash flow, Hochschild has agreed to extend the payback of the project loan
facility until after completion of the expansion (except for expected repayment of $4 million from the proceeds of local bank loans to MSC in October, 2007).

In August 2007, the board of MSC approved a budget of $102.9 million for construction completion of the 750 tpd operation, pre-production mine expansion costs, and costs related to the change in scope to the original mine plan incurred to
date, $5.4 million for two months of sustaining costs, $2.1 million for exploration, $2.9 million for electrical connection to the regional power grid, and the related IVA for each item. The amounts paid for IVA tax are refundable to MSC ratably
based on production. An amount of $27.4 million was funded by the MSC shareholders (Hochschild and Minera Andes).

In November 2007, the board of MSC
approved project capital increases of $42.5 million. These capital increases are related to incremental costs associated with the processing facility at San José taking longer than anticipated to reach full capacity which required $34.1
million. At the end of 2007 Minera Andes investment in MSC totaled approximately $65 million.

San JoséProduction

In Q1 2008 the San José mine now comprises more than 13 km of underground workings accessed by ramps accessing the Huevos Verdes and Frea veins. A third ramp has
also been constructed to access the Kospi vein, where 173 meters of the vein have been developed to date. The mine is currently staffed with 436 employees and 148 contractors.

The San José gold/silver mine saw a steady increase in production in Q4 2007 as reported by MSC to the owners. The San José mine is currently operating at rate of 750 tonnes per day. The first sales of
metal from the mine occurred in December of 2007. A total of 958,000 ounces of silver and 14,950 ounces of gold were produced during 2007. Minera Andes owns 49% of the mine through its joint venture with the project operator, Hochschild. The first
sales of metals from inventory at the San José mine occurred in December 2007 and included 92,000 ounces of silver and 1,490 ounces of gold. At year-end the mine had about 90% of its metal in inventory in the form of concentrates and
doré. Several contracts are in place to sell doré and concentrate production.

SAN JOSE MINE PRODUCTION



|                                |  |         |  |         |  |              
|------------------------------- |  | ------- |  | ------- |  | -------------
|Product                         |  | Q42007  |  | Q32007  |  | Full year2007
|Ore production (tonnes)         |  | 65,480  |  | 27,494  |  | 92,974       
|Average head grade silver (g/t) |  | 536     |  | 544     |  | 538          
|Average head grade gold (g/t)   |  | 7.03    |  | 7.21    |  | 7.08         
|Silver produced (ounces)        |  | 776,000 |  | 182,000 |  | 958,000      
|Gold produced (ounces)          |  | 11,660  |  | 3,300   |  | 14,960       
|Net silver sold (ounces)*       |  | 92,000  |  | 0       |  | 92,000       
|Net gold sold (ounces)*         |  | 1,490   |  | 0       |  | 1,490        



|* | 855 ounces of gold and 42,379 ounces of silver were produced during construction phase of the plant and have been recorded as a reduction to the capitalized cost of the plant.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



50



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During the start-up of San José in Q2 2007, several factors contributed to delays in the processing plant becoming
fully operational, including technical issues related to the mill and the flotation process; problems with the intensive leaching process that produces a precipitate that is converted into doré, and extreme August weather conditions. We are
advised that although the processing plant is now operating near capacity, the intensive leaching process remains in the commissioning stage. Re-engineering work is currently underway to improve the detoxification process. The operator expects
theses issues to be corrected in the first half of 2008.

Los Azules Project

The Los Azules project was discovered by Minera Andes geologists in the 1990s through regional exploration near the Argentina/Chile border in San Juan province, Argentina.

On November 2nd, 2007 Minera Andes and its subsidiary company Minera Andes S.A. (MASA) and Xstrata Copper have contributed their respective properties into an option agreement ( Los Azules Option Agreement) replacing the November
2005 non-binding letter of intent regarding the Los Azules porphyry copper project. Xstrata Copper and Minera Andes had been working on separate, adjoining properties that straddle a large copper porphyry system now consolidated into one package
under the Los Azules Option Agreement. Xstrata Copper is one of the commodity business units within Xstrata plc.

Under the Los Azules Option Agreement,
MASA has the right to earn a 100% interest in Xstrata Coppers property by spending at least US$1.0 million on the property by November 2010, making payments to keep the property in good standing and producing a preliminary economic assessment
(to NI 43-101 standards). If in the opinion of Xstrata Copper, the preliminary assessment shows the potential to economically produce 100,000 tonnes (200 million pounds) of contained copper per year for 10 years or more then Xstrata Copper will have
a right to earn a 51% interest in the combined properties (the Back-in Right). To satisfy the conditions of the Back-in Right, Xstrata Copper must assume control and responsibility for the combined properties, make a cash payment to
Minera Andes of three times MASAs expenditures incurred on the combined properties after the 25th of November 2005 and complete a bankable feasibility study within five years of its election to exercise the Back-in Right. In the event that the
preliminary assessment does not, in Xstrata Coppers opinion, meet the criterion contemplated above, Xstrata Coppers interest would be limited to a right of first refusal on a sale of the combined properties, or any part thereof. All
lands that make up the combined properties mineral applications are subject to a provincial mouth of mine royalty of between zero and 3%. This royalty will be negotiated with the province of San Juan as the project advances.

If Xstrata Copper advises MASA of its intention to exercise Xstrata Coppers Back-in Right for a 51% interest, Minera Andes will be required to form a new
Argentinean operating company



51



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and transfer the combined properties to the operating company. Following the completion of its Back-in Right, Xstrata Copper will also be required to use
commercially reasonable efforts to obtain project financing for the development of a mine as contemplated by the bankable feasibility study. If the project financing arrangements are accepted by MASA and such financing completes, Xstrata Copper will
earn an additional 4% interest in the project, thereby reducing MASAs interest from 49% to 45%. If project financing is not available or not accepted by MASA, the project may proceed without third party financing.

MASA and Xstrata Copper are to use good faith efforts to negotiate and execute a shareholders agreement governing the operating company after the date that Xstrata
Copper notifies MASA of its intention to exercise the Back-in Right. The activities that may be undertaken by the operating company while Xstrata Copper is completing its back-in and thereafter, until a shareholders agreement is signed, will be
limited to those activities necessary to deliver the Bankable Feasibility Study. From the date that Xstrata Copper satisfies the conditions of the Back-in Right up until the date on which a shareholders agreement is signed, each of MASA and Xstrata
Copper will have a right of first refusal over any bona fide offer received by the other party from a third party purchaser (other than an affiliate) to purchase any of its interest, directly or indirectly, in the project.

The obligation of Xstrata Copper to seek project financing and the limitations placed on the operating company will cease if MASA transfers, directly or indirectly, its
interest in the project (other than to an affiliate) or in the event of a change of control of MASA, regardless of whether MASA and Xstrata Copper have entered into a shareholders agreement.

The obligations of MASA under the Los Azules Option Agreement are guaranteed by Minera Andes and the obligations of Xstrata Copper are guaranteed by Xstrata Queensland
Limited. Minera Andes is prohibited from entering into certain transaction resulting in its disposing its interest in the project or certain portion of its interest in Minera Santa Cruz S.A., unless the acquirer assumes Minera Andes guarantee
obligations under the Option Agreement.

The combined Minera Andes-Xstrata Copper property package (approx. 7,500 Ha) encompasses a large, enriched
(chalcocite) copper zone at Los Azules.

At the request of the Corporation Tetra Tech, Inc. (Tetra) prepared a technical report entitled
Los Azules Copper Project, San Juan Province, Argentina, NI 43-101 Technical Report dated March 26, 2008 (the Los Azules Report). The author of the Los Azules Report is Donald B. Tschabrun, MAusIMM, principal mining
Engineer of Tetra who is a qualified person and independent of the Corporation within the meaning of NI 43-101. The Loz Azules Report is incorporated by reference in this AIF and is available at www.sedar.com. The summary from the Los Azules Report
has been reproduced below (in italics).

Tetra Tech, Inc. (Tt) was commissioned by Minera Andes, Inc. (MAI) to prepare a Canadian National
Instrument 43-101 (NI 43-101) compliant Technical Report for the Los Azules Copper Project in Argentina. This technical report has been prepared to present the information on the Los Azules copper project pursuant to NI 43-101 reporting
requirements. The effective date of this report is March 2008. The Qualified Person responsible for this report is Mr. Don Tschabrun, Principal Mining Engineer of Tt.



52



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The project consists of a porphyry copper deposit occurring on land owned by MAI to the south (approximately 3400 ha)
and adjacent property owned by Xstrata PLC (Xstrata) to the north. In November of 2007 MAI signed a definitive Option Agreement with Xstrata. MAI, in its fourth drilling program, is currently drilling on both MAI-controlled land and Xstrata land to
further define the limits and complete in-fill of the mineralized zones.

Previous work recognizes two principal geological groups at Los Azules: an
upper volcanic suite and a lower intrusive complex. This porphyry copper deposit seems to represent a typical porphyry system that consists of a supergene-enriched zone superimposed on a primary mineralized zone. The leached cap zone above the
supergene enrichment zone appears to be devoid of copper mineralization, as none has been noted from surface or drill core observations.

Mineralization at the Los Azules deposit consists of various copper sulfide minerals in two main zones consisting of the supergene and primary zones. Minerals in the supergene enrichment zone are comprised of chalcocite, chalcopyrite,
and pyrite. The supergene zone varies considerably in thickness from 40 m to well over 200 m, as some holes bottomed in copper mineralization. Mineralization in the primary zone consists of chalcopyrite and pyrite with minor amounts of bornite and
covellite. Mineralization controls consist of the extensive stockworks, veining and faulting as noted in the drill core. At the current drill hole spacing (400 m north-south by 200 m east-west) the copper porphyry system appears to be continuous
from drill hole to drill hole. Locally the mineralized porphyry target appears to extend about 3 km north-south by 1 km east-west.

At the present
time, the Los Azules copper deposit is considered to be an exploration-stage project. There are currently no mineral resources or mineral reserves based on Canadian National Instrument 43-101 standards.

Additional Details on the Drilling at Los Azules Project

The
2006-2007 field season exploration program completed 11 drill holes totaling 3,714 meters in the copper target. Several holes ended in copper mineralization, including AZ-07-24D that bottomed in high-grade copper over 1 percent.

Currently underway is a planned 2007-2008 exploration program of 24 holes totaling 10,000 meters, in two stages of 5,000 meters. The 2007-2008 field season Loss Azules
extends from November 2007 to April 2008.

The exploration program at Los Azules is designed to define an inferred resource estimate and provide
sufficiently detailed information to allow the completion of a Preliminary Assessment (as defined by NI 43-101) of the property.

Over half the drilling to
define a copper resource has been completed to date and drilling is in progress this field season over the known area of leachable (chalcocite) and sulfide



53



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(chalcopyrite) copper mineralization as currently defined. The area of drilling covers approximately 2.5 kilometers by 0.9 kilometers within the enriched
copper target currently identified at Los Azules that is about 3.3 kilometers long and 0.9 kilometers wide. Holes will be drilled at a nominal grid spacing of 200 meters east-west and 400 meters north-south. Where needed fill in holes will be
drilled on the 200 meter north-south grid lines.

Drilling this season started on the northern half of the mineralized copper target where AZ-06-19
encountered 221 meters of mineralization averaging 1.62 percent copper that was 200 meters from hole AZ-06-20 containing 173 meters of 1.00 percent copper. Drilling will also include infill drilling on the southern half of the target. The holes will
be drilled to a depth of approximately 350 meters. This drilling will test a known area of leachable (chalcocite) and sulfide (chalcopyrite) copper mineralization currently defined by 26 drill holes.

Assay results are in from the first core hole drilled in the 2007-2008 field season at the Los Azules porphyry copper project. Hole AZ-07-30 encountered 113 meters of
1.04 % copper within a larger zone of 200.8 meters of 0.89 % copper.

As of mid March 2008, seven vertical core holes have been completed
totaling 2,528 meters of the 5,000 meter, 12 hole drilling Stage I program underway as part of the 2007-2008 exploration program Four holes are currently being drilled and assays are pending for six holes. Hole AZ-07-30 was drilled near the
northeast of currently defined area of copper mineralization. The upper 123 meters of the hole contained leached cap rocks underlain by high-grade porphyry copper mineralization to 323.8 meters.

Consultants and an independent engineering firm have been retained to monitor the program and prepare the NI 43-101 resource estimate and Preliminary Assessment report.
The fieldwork is being managed by Minera Andes technical staff with the assistance of Nivaldo Rojas and Associates.

The highlights from the
previously reported 2005, 2006, and 2007 drilling campaigns are listed in Table 1 below with several holes ending in copper mineralization, including AZ-07-24D and AZ-06-19 that bottomed in high-grade copper over 1 percent.

Table 1. Significant Drilling Results at Los Azules, 1998 to 2007



|                |  |        |  |              |  |        |  |               |  |                 
|--------------- |  | ------ |  | ------------ |  | ------ |  | ------------- |  | ----------------
|                |  |        |  | Intersection |  |        |  |              
|Drill Hole      |  | TD (m) |  | From (m)     |  | To (m) |  | Interval* (m) |  | Total Copper (%)
|AZ-04-01 (core) |  | 195    |  | 130          |  | 195    |  | 56            |  | 0.62            
|Includes:       |  |        |  | 150          |  | 192    |  | 36            |  | 0.82            
|AZ-04-02 (core) |  | 330.5  |  | 164          |  | 304    |  | 140           |  | 0.38            
|Includes:       |  |        |  | 164          |  | 190    |  | 26            |  | 0.47            
|Includes:       |  |        |  | 230          |  | 304    |  | 72            |  | 0.42            
|AZ-04-04 (core) |  | 300.8  |  | 162          |  | 282    |  | 120           |  | 0.54            
|Includes:       |  |        |  | 162          |  | 202    |  | 40            |  | 0.59            
|Includes:       |  |        |  | 236          |  | 282    |  | 46            |  | 0.64            
|AZ-04-07 (core) |  | 168.8  |  | 96           |  | 152    |  | 56            |  | 0.44            
|Includes:       |  |        |  | 126          |  | 152    |  | 26            |  | 0.58            



---

|                                                                     |  |        |  |       |  |        |  |        |  |     
|-------------------------------------------------------------------- |  | ------ |  | ----- |  | ------ |  | ------ |  | ----
|LA-04-98 (RC)                                                        |  | 250    |  | 117   |  | 250    |  | 133    |  | 0.47
|LA-06-98 (RC)                                                        |  | 250    |  | 61    |  | 250    |  | 189    |  | 0.44
|Includes:                                                            |  |        |  | 157   |  | 250    |  | 93     |  | 0.64
|LA-08-98 (RC)                                                        |  | 220    |  | 77    |  | 220    |  | 143    |  | 0.55
|Includes:                                                            |  |        |  | 103   |  | 220    |  | 117    |  | 0.61
|LA-03-04 (RC)                                                        |  | 226    |  | 94    |  | 226    |  | 132    |  | 0.40
|Includes:                                                            |  |        |  | 104   |  | 114    |  | 10     |  | 1.12
|AZ-06-10 (core)                                                      |  | 261.35 |  | 174   |  | 261.35 |  | 87.35  |  | 0.83
|AZ-06-11 (core)                                                      |  | 270.7  |  | 158.7 |  | 270.7  |  | 158.7  |  | 0.51
|AZ-06-14 (core)                                                      |  | 224.55 |  | 136   |  | 178    |  | 42     |  | 1.13
|Includes:                                                            |  |        |  | 136   |  | 158    |  | 22     |  | 1.40
|AZ-06-17 (core)                                                      |  | 183.5  |  | 66    |  | 183.5  |  | 117.65 |  | 0.63
|Includes:                                                            |  |        |  | 66    |  | 124    |  | 58     |  | 0.84
|AZ-06-19 (core)                                                      |  | 299.4  |  | 78.25 |  | 299.4  |  | 221.15 |  | 1.62
|Includes:                                                            |  |        |  | 78.25 |  | 116    |  | 37.75  |  | 2.22
|Includes:                                                            |  |        |  | 134   |  | 146    |  | 12     |  | 3.94
|AZ-06-20 (core)                                                      |  | 253.3  |  | 80    |  | 253.3  |  | 173.3  |  | 1.00
|Includes:                                                            |  |        |  | 80    |  | 98     |  | 18     |  | 1.69
|Includes:                                                            |  |        |  | 98    |  | 182    |  | 84     |  | 1.12
|AZ-07-22 (core)                                                      |  | 271.2  |  | 119   |  | 257    |  | 138    |  | 0.62
|Includes:                                                            |  |        |  | 119   |  | 155    |  | 36     |  | 0.99
|Includes:                                                            |  |        |  | 119   |  | 139    |  | 20     |  | 1.24
|Includes:                                                            |  |        |  | 155   |  | 257    |  | 102    |  | 0.49
|Includes:                                                            |  |        |  | 213   |  | 227    |  | 14     |  | 0.71
|AZ-07-24D (core)                                                     |  | 278.2  |  | 124   |  | 278.2  |  | 154.2  |  | 0.54
|Includes:                                                            |  |        |  | 124   |  | 160    |  | 36     |  | 0.80
|Includes:                                                            |  |        |  | 160   |  | 202    |  | 42     |  | 0.50
|Includes:                                                            |  |        |  | 202   |  | 234    |  | 32     |  | 0.34
|Includes:                                                            |  |        |  | 234   |  | 278.2  |  | 44.2   |  | 0.66
|Includes:                                                            |  |        |  | 234   |  | 254    |  | 20     |  | 0.74
|Includes:                                                            |  |        |  | 264   |  | 278.2  |  | 14.2   |  | 0.87
|AZ-07-29B                                                            |  | 226.85 |  | 126   |  | 216    |  | 90     |  | 0.71
|Includes:                                                            |  |        |  | 126   |  | 154    |  | 28     |  | 0.86
|Includes:                                                            |  |        |  | 170   |  | 204    |  | 34     |  | 0.92
|*       True thickness of the copper mineralization is undetermined.

All results have been reviewed by Brian Gavin, Minera Andes vice president of exploration, an appropriately
qualified person as defined by National Instrument 43-101. All samples were collected in accordance with industry standards. Splits from the drill core samples were submitted to Alex Stewart Assayers, Argentina, S.A., in Mendoza, Argentina, for
sample pulp preparation and to ALS Chemex Laboratories, Mendoza, during the 2004 field season and to ACME Analytical Laboratories, Mendoza, during the 2006 and 2007 field seasons, for fire assay and ICP analysis. Accuracy of results is tested
through the systematic inclusion of standards, blanks and check assays and by reanalysis of 10% of samples at the Alex Stewart Assayers, Argentina, S.A. lab in Mendoza Argentina.



55



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OTHER PROPERTIES

The
disclosure found below on the Corporations other properties has been prepared by and/or reviewed, as case may be, by Brian Gavin, Vice PresidentExploration of Minera Andes and a qualified person within the meaning of NI
43-101.

Santa Cruz Project Property Summary

Santa
Cruz Project Location

Minera Andes currently holds 15 cateos and 29 manifestations of discovery in the Deseado Massif region of Santa Cruz. These
properties are located at moderate elevations (300 to 1,000 m above sea level). Topography varies from gently rolling to locally rugged. The Deseado Massif is a cold desert. Access to the properties is by dirt road and trail.

Santa Cruz Project Geology

The project area covers the Deseado
Massif, a package of Middle to Upper Jurassic volcanic rocks locally overlain by Cretaceous sediments and Tertiary to Quaternary basalts. The Jurassic rocks are divided into the Bajo Pobre Formation, of intermediate composition, and the felsic Bahia
Laura Group. The Bahia Laura Group is in turn subdivided into the Chon Aike Formation (dominantly ignimbrites) and the La Matilde Formation (dominantly volcaniclastic rocks). Several potentially important, low sulfidation epithermal deposits have
recently been discovered in the massif, including the Cerro Vanguardia deposit which has a reserve of greater than 3.2 million oz Au equivalent. Exploration by a number of companies is ongoing in the massif.

Santa Cruz Project Exploration

Santa Cruz is one of Argentinas
least well-explored provinces. The area was explored under the Argentine government-United Nations regional exploration Plan Patagonia-Comahue in the 1970s. In the 1980s, FOMICRUZ, S.E., a state owned company, completed reconnaissance surveys in the
province to delineate areas of interest for mineral reserves.

Minera Andes has been actively exploring in the region since 1997. The properties have been
acquired on the basis of geologic and geochemical reconnaissance. Geologic evaluation of these grassroots targets is ongoing.

The Cerro Mojon property was
drilled April and May of 2006 and, as the results were not encouraging, the lands will be allowed to expire. A second drilling program at El Trumai in May of 2007 had negative results and the land will be allowed to expire. In 2007 geological
mapping and geophysics field work was done at the Celestina property and at the A. Telken property. Drilling is tentatively planned for the A. Telken propertyduring the second or fourth quarter of 2008.



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Santa Cruz Project Ownership

Minera Andes currently controls 15 cateos and 29 manifestations of discovery (totaling 73,195 ha) in Santa Cruz province. Land holding costs for 2008 are estimated to be Peso$12,000.

Chubut Project Property Summary

Chubut Project Location

Minera Andes currently holds 1 manifestation of discovery at the El Valle property in the Precordilleran and Patagonian Massif regions of Chubut
totaling 1,480 ha. This property is located at moderate elevations (5000 m above sea level) in central Chubut. Access to the property is by dirt road and trail.

Chubut Project Geology

Jurassic-Cretaceous volcanic terranes have been the focus of exploration in the southern Chilean Cordillera over the
past decade. These rocks are potential hosts of epithermal gold and gold rich replacement deposits attested to by the discoveries, in Chile, at Fachinal (epithermal Au-Ag), El Toque (base metal, stratabound replacement deposit with a minor precious
metal credit) and, in Argentina, the Esquel Project. This high-grade vein system contains an announced resource of 4.2 million oz of gold, and 7.8 million oz of silver. In Argentina, rocks of the same age and type occur in both Andean and
extra-Andean Patagonia. These areas are relatively unexplored.

Chubut Project Exploration

Chubut was included in the United Nations and Argentina governments Plan Patagonia-Comahue exploration program in the 1960s and 1970s. This campaign delineated
several prospects with weak to moderate base metal anomalies. The samples were not analyzed for their precious metal content.

In 1997, Minera Andes
completed reconnaissance surface sampling and mapping on five properties in the western Chubut province. This work indicates the potential for mineralized epithermal and porphyry or intrusive-related systems.

At the El Valle property, the initial exploration located a north-northeast trending zone of illitic alteration and mineralization about 1.5 km wide and three km long.
Numerous northwest and northeast trending veins, some up to 5 m wide and more than 500 m long, have also been located in tuffaceous rocks within the zone of alteration. The zone is open to the west and south under Quaternary alluvium in
valleys, and open-ended to the north and east under Quaternary alluvium and post-mineral Tertiary basalt.

Results from the 40-sample reconnaissance
program on this property show gold values ranging from below detection limit to 14.6 g/t. Several high values, above 3 g/t gold, are from outcrops and float from multistage epithermal quartz veins. Some of the samples with low gold values show
strongly anomalous pathfinder elements such as mercury (in the low 2,000 to 13,000 ppb



57



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range) that may indicate higher levels in the gold system. No exploration was done at El Valle since 2001 due to legal issues with the surface landowner and
uncertainty related to the future of mining in Chubut given the current moratorium on the use of cyanide.

Chubut Project Ownership

We currently control 1 manifestation of discovery (totaling 1480 ha) in Chubut province. Land maintenance costs for 2008 are estimated to be $1,000.

San Juan Project Summary Which Includes Los Azules

San Juan
Project Location

The San Juan Province Project comprises the Los Azules project and three other properties totaling 48,547 ha in southwestern San Juan
province. Elevation ranges from 2,500 m to 5,500 m and moderate to high relief.

San Juan Area Project Geology

The project area extends from the western margin of the Cordillera Frontal to the Cordillera Principal. The area is principally underlain by Permo-Triassic Choiyo Group
volcanic rocks, a multi-phase igneous sequence comprising volcanic breccias, ignimbrites, tuffs and rhyolites, intruded by granites and overlain by extrusive acidic volcanic rocks. Jurassic continental, marine and volcanic derived sedimentary rocks
unconformably overlay Permo-Triassic rocks. The youngest rocks in the project area comprise Tertiary volcanic and intrusive rocks, which are common hosts of epithermal gold mineralization as evidenced by deposits in the Chilean Andes.

San Juan Project Exploration

No formal records of previous
exploration in the project area exist. Evidence of prospecting (small trenches or pits) exists on some of the cateos. The area is currently active with pre-development work at the El Pachón copper deposit.

The San Juan Province Project is a regional reconnaissance program, focused on epithermal gold and gold-copper porphyry targets in the eastern cordillera. All of the
lands were acquired based on the results of satellite image analysis. Preliminary field examination, including rock chip sampling and property-wide stream sediment sampling, has been completed on all properties.

Detailed work at Los Chonchones included reconnaissance-scale geologic mapping and geochemical surveys. Results returned a number of anomalous gold and/or copper values
in all sample types, scattered throughout the color anomalies and concentrating in the center of the southwest anomaly. Lands are held pending possible joint ventures.

Through December 31, 2007, we have spent $6,375,944 on the San Juan Project (net of write-offs for properties abandoned).



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San Juan Area Project Ownership

Our lands in San Juan consist of 9 cateos and applications for cateo and 20 manifestations of discovery and total 48,547 hectares. At present, these lands are not subject to a royalty, however, the government of San
Juan has not waived its rights to retain up to a 3% mouth of mine royalty from production. Property canon fees for the properties in 2008 are estimated at Peso$20,000.

DIVIDENDS

No dividends have been paid on any common shares of the Corporation.

The Corporation intends to retain its earnings for use in the business and does not expect to pay dividends on its common shares in the foreseeable future.

DESCRIPTION OF CAPITAL STRUCTURE

Common Shares

The Corporation is authorized to issue an unlimited number of Common Shares without nominal or par value, of which, as at the date hereof 189,334,395
Common Shares are issued and outstanding as fully paid and non-assessable.

The holders of Common Shares are entitled to dividends, if, as and when
declared by the Board, to one vote per share at meetings of shareholders of the Corporation and, upon liquidation, to receive such assets of the Corporation as are distributable to the holders of the Common Shares.

Preferred Shares

The Corporation is authorized to issue an unlimited
number of preferred shares which may be issued in one or more series and the directors are authorized to fix the number of shares in each series and determine the designation, rights, privileges, restrictions and conditions attached to the shares of
each series. The holders of the preferred shares have no right to notice of, to attend, or to vote at any meeting of the shareholders of the Corporation. The directors of the Corporation may provide the preferred shares with a priority over the
Common Shares with respect to the payment of dividends and the distribution of assets upon the liquidation of the Corporation. The preferred shares, however, shall not carry a residual right to participate to an unlimited degree in the earnings of
the Corporation and in its assets upon liquidation or winding up. Currently no preferred shares are issued and outstanding.



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MARKET FOR SECURITIES

Trading Price and Volume

The Corporations common shares are listed for trading on the TSX under the trading
symbol MAI and quoted on NASDAQ Over the Counter Bulletin Board as MNEAF.

On February 7, 2007, the company traded on the TSX
and ceased trading on the TSX Venture Exchange.

Trading price and volume on the Canadian exchanges for 2007 is as follows:



|       |  |      |  |      |  |      |  |       |  |         |  | 
|------ |  | ---- |  | ---- |  | ---- |  | ----- |  | ------- |  | 
|Date   |  | Open |  | High |  | Low  |  | Close |  | Avg Vol |  | 
|Dec-07 |  | 1.77 |  | 1.87 |  | 1.45 |  | 1.57  |  | 114,100 |  | 
|Nov-07 |  | 1.90 |  | 2.06 |  | 1.72 |  | 1.79  |  | 146,500 |  | 
|Oct-07 |  | 1.85 |  | 2.12 |  | 1.80 |  | 1.90  |  | 195,700 |  | 
|Sep-07 |  | 1.78 |  | 2.19 |  | 1.67 |  | 1.85  |  | 179,400 |  | 
|Aug-07 |  | 1.74 |  | 1.83 |  | 1.10 |  | 1.73  |  | 216,600 |  | 
|Jul-07 |  | 2.11 |  | 2.14 |  | 1.74 |  | 1.83  |  | 126,300 |  | 
|Jun-07 |  | 2.36 |  | 2.45 |  | 2.07 |  | 2.12  |  | 121,200 |  | 
|May-07 |  | 2.23 |  | 2.64 |  | 2.07 |  | 2.38  |  | 239,000 |  | 
|Apr-07 |  | 1.82 |  | 2.46 |  | 1.82 |  | 2.23  |  | 230,300 |  | 
|Mar-07 |  | 1.92 |  | 2.02 |  | 1.60 |  | 1.86  |  | 135,700 |  | 
|Feb-07 |  | 1.60 |  | 2.25 |  | 1.60 |  | 1.92  |  | 248,500 |  | 
|Jan-07 |  | 1.50 |  | 1.57 |  | 1.31 |  | 1.57  |  | 128,800 |  | 

Prior Sales

During the most recently completed financial year ended December 31, 2007 and to the date of the AIF the following securities of the Corporation, which are not listed or quoted on a market place were issued:



|                  |  |                            |  |                             |  |                                       
|----------------- |  | -------------------------- |  | --------------------------- |  | --------------------------------------
|Date of Issue     |  | Number ofSecurities Issued |  | Type of Securities Issued   |  | Exercise Price ofSecurity Issued(CDN$)
|March 7, 2007     |  | 4,227,669                  |  | Purchase Warrants           |  | 2.06                                  
|March 19, 2007    |  | 600,673                    |  | Purchase Warrants           |  | 1.75                                  
|September 4, 2007 |  | 250,000                    |  | Stock Options               |  | 1.73                                  
|October 22, 2007  |  | 4,066,390                  |  | Purchase Warrants           |  | 2.41                                  
|December 21, 2007 |  | 6,940,322                  |  | Purchase Warrants           |  | 2.00                                  
|December 21, 2007 |  | 694,031                    |  | Agents Compensation Options |  | 1.70                                  
|January 25, 2008  |  | 3,889,011                  |  | Purchase Warrants           |  | 2.00                                  
|January 25, 2008  |  | 388,901                    |  | Agents Compensation Options |  | 1.70                                  
|February 11, 2008 |  | 213,500                    |  | Purchase Warrants           |  | 2.00                                  
|February 11, 2008 |  | 21,350                     |  | Agents Compensation Options |  | 1.70                                  
|February 14, 2008 |  | 100,000                    |  | Stock Options               |  | 1.35                                  



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DIRECTORS AND OFFICERS

The following tables sets forth information about the Corporations directors and officers and their respective positions as of the date of this AIF:



|                                                                             |  |                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|---------------------------------------------------------------------------- |  | -------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NAME, AGE ANDMUNICIPALITY OFRESIDENCE                                        |  | POSITION HELD                    |  | PRINCIPAL OCCUPATION DURING PAST FIVE YEARS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Allen V. Ambrose, 51 Spokane, Washington                                     |  | President, Chairman and Director |  | Director and President of the Corporation since November 6, 1995. Mr. Ambrose was appointed Chairman of the Board of Directors of the Corporation on December 20, 2006. Director of Cadre
Resources Ltd. from April 1994 to March 2001. Director of and consults with Century Mining Corporation and Samba Gold Inc. (formerly named Kaieteur Resource Corporation) since July 2002. Provides management and geologic consulting services to
Franconia Minerals Corporation since August 1998. Director of Mexivada Mining Corporation since November 2005 and a director of Rockgate Capital Corporation since October 2005. On August 10, 2006 he became a director of Gold Port Resources Ltd. On
April 30th, 2007 he became a director of Stoneshield Capital Corp.
|                                                                             |  |                                 
|John Johnson Crabb, 82 (1) (3) (4) Madeira Park, B.C.                        |  | Director                         |  | A director of the Corporation since November 6, 1995. Mr. Crabb was a Mining Executive/ Geologist and Director with Inland Resources, Inc., a mining company from 1985 to November 1995; Director
of Cadre Resources Ltd. from April 1995 to March 1996. Mr. Crabb is a life member of the Association of Professional Engineers and Geoscientists of British Columbia.                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                             |  |                                 
|Gary A. Craig, 59(1) (2) Spokane, Washington                                 |  | Director                         |  | A director of the Corporation since April 12, 2002. Mr. Craig is currently President of N.A. Degerstrom, Inc. since June 5, 2006. Prior thereto from July 1, 2000 he was Executive Vice President
for N. A. Degerstrom, Inc. Previously Gary Craig was Project Manager for Dravo Corporation, a mining company.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                             |  |                                 
|A.D. (Darryl) Drummond, 71 Ph.D., P. Eng.(3) (4) Vancouver, British Columbia |  | Director                         |  | A director of the Corporation since June 26, 1996. Mr. Drummond is a Professional Engineer; President of D.D.H. Geomanagement from 1981 to November 2004; Director of Samba Gold Inc.
(formerly named Kaieteur Resource Corporation) from December 1998 to present; Director of Saxony Explorations Ltd. from February 2000 to September 2003; Director of Valerie Gold Resources Ltd. from November 6, 1998 to March 27, 2003;
Director of Valgold Resources Ltd. from March 27, 2003 to present; Director of Wollasco Minerals Inc. from October 12, 2004 to December 16, 2004; and Director of Gold Port Resources Ltd. From December 16, 2004 to present;
Director and chairman of Butler Developments Corp from June 16, 2006 to March 6, 2008.                   



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|                                                        |  |                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------------------------------------------------------- |  | --------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NAME, AGE ANDMUNICIPALITY OFRESIDENCE                   |  | POSITION HELD               |  | PRINCIPAL OCCUPATION DURING PAST FIVE YEARS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Brian Gavin, 54 Spokane, Washington                     |  | Vice President, Exploration |  | Officer of the Corporation since November 6, 2005. Director of Minera Santa Cruz S.A. Mr. Gavin has served as President (since April, 2001), and Chief Executive Officer (since July, 2007) and
director of Franconia Minerals Corporation (TSX) since June 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                        |  |                            
|Henry A. John, 60 Spokane, Washington                   |  | Chief Financial Officer     |  | Chief Financial Officer of the Corporation since November 9, 2007 and employee since September 1, 2007. Mr. John has been a chartered accountant in British Columbia since 1974 and a certified
public accountant in Washington State since 1998, has accounting and auditing experience with public corporations, including junior exploration/mining companies. In Spokane, he has been associated with the accounting firm of LeMaster & Daniels
where his duties included audits, review and regulatory oversight compliance. During 2006, while with LeMaster & Daniels, Mr. John performed Sarbanes-Oxley work for Minera Andes, and is familiar with the company through his
engagement.                                                                                                                                                                                                                                                                                      
|                                                        |  |                            
|Bonnie L. Kuhn, 42(2) Calgary, Alberta                  |  | Secretary and Director      |  | A director and officer of the Corporation since June 19, 1997 and Chief Financial Officer from May 15, 2000 to April 13, 2005. From January 1, 1999 to June 1, 2001, a partner with Armstrong
Perkins Hudson LLP, Barristers & Solicitors. From June 2001 to January 2005, a senior associate with Field LLP. From January 2005 on Ms Kuhn is self-employed. Director and officer of Franconia Minerals Corporation (TSX) since August
1998.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                        |  |                            
|Allan J. Marter, 60 (1) (2) (3) (4) Littleton, Colorado |  | Director                    |  | A director of Minera Andes since November 9, 2006. He retired on October 13, 2006, after seven years as Chief Financial Officer of Golden Star Resources Ltd. He currently serves as
Président of the board and director of EURO Ressources SA (TSX and Euronext: EUR) and had previously served as an officer and director of a number of North American junior exploration and mining companies including Addwest Minerals
International, Ltd. (a director until March 30, 2003), Golden Phoenix Minerals, Inc. (a director until June 25, 2004), Minera Andes Inc. (chief financial officer until May 15, 2000 and a director until September 23, 2003), and
EURO Ressources SA (formerly Guyanor Ressources SA) (chief financial officer until June 23, 2005). He is currently a director of Franconia Minerals Corporation (TSX) since November 22, 2006 and is currently a director of Aurelio Resource
Corporation and acting Chief Financial Officer since November 28, 2006.



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Notes:

|(1) | Member of Audit Committee.
|--- | --------------------------

|(2) | Member of the Corporate Governance Committee
|--- | --------------------------------------------

|(3) | Member of Compensation Committee
|--- | --------------------------------

|(4) | Member of the Nominating Committee
|--- | ----------------------------------

As of the date hereof the number of
common shares of the Corporation beneficially owned, or controlled or directed, directly or indirectly, by all directors and executive officers of the Corporation as a group is 694,700 or 0.37% of the issued and outstanding.

The term of office of the directors expires annually at the time of the Corporations annual general meeting or until their successors are elected or appointed.

Cease Trade Orders, Bankruptcies, Penalties, or Sanctions

Except as disclosed below, to the best of knowledge of the management of the Corporation, no proposed director of the Corporation, or any personal holding company of a proposed director, is at the date of this management information
circular, or within the 10 years before the date of this AIF has been, a director or chief executive officer, or chief financial officer of any corporation (including the Corporation) that:

(a) was subject to an order that was issued while the proposed director was acting in the capacity as director, chief executive officer or chief financial officer; or

(b) was subject to an order that was issued after the proposed director ceased to be a director, chief executive officer or chief financial officer and
which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.

An order means:



|1. | cease trade order;
|-- | ------------------



|2. | an order similar to a cease trade order; or
|-- | -------------------------------------------



|3. | an order that denied the relevant company access to any exemption under securities legislation,
|-- | -----------------------------------------------------------------------------------------------

that was in effect for a period of more than 30 consecutive days.



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Ms. Kuhn has advised the Corporation that she was a director of Aludra Inc. (Aludra) on
February 13, 2003, February 26, 2003 and March 3, 2003 when the British Columbia Securities Commission, Alberta Securities Commission and Ontario Securities Commission, respectively, issued cease trade orders requiring that
trading cease in respect of the securities of Aludra due to Aludras failure to file and deliver to its shareholders the annual audited financial statements for Aludra for the year ended May 31, 2002 prepared in accordance with GAAP. The
securities of Aludra remain cease traded. Ms. Kuhn resigned as a director of Aludra in October 2004.

Mr. Ambrose has advised the Corporation
that he is a director of Century Mining Corporation (Century). On March 20, 2008 the British Columbia Securities Commission issued a cease trade order against the insiders of Century for not filing in the correct form; a technical
report under NI 43-101; interim financial statements for the financial period ended September 30, 2007 pursuant to NI 51-102; and management discussion and analysis for the period ended September 30, 2007. This cease trade order is still
in effect as of the date of the AIF.

To the best of the knowledge of the management of the Corporation, no proposed director of the Corporation or any
personal holding company of the proposed director, is at the date of this AIF, or has been within 10 years before the date of this AIF, a director or executive officer of any company (including the Corporation) that, while that person was acting in
that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise
with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.

To the best of the knowledge of the management of the
Corporation, no proposed director of the Corporation or any personal holding company of the proposed director has, within the 10 years before the date of this AIF, become bankrupt, made a proposal under any legislation relating to bankruptcy or
insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director.

To the best knowledge of the management of the Corporation no proposed director or personal holding corporation of a proposed director has entered into, at anytime, a
settlement agreement with a securities regulatory authority.

To the best knowledge of the management of the Corporation no proposed director or personal
holding corporation of a proposed director, has been subject to, at anytime, any penalties or sanctions imposed by



| | a) | a court relating to securities legislation or securities regulatory authority, or
| | -- | ---------------------------------------------------------------------------------



| | b) | a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed director.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------



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Conflicts of Interest

There are potential conflicts of interest to which the directors, officers and promoters of the Corporation may be subject with respect to the operations of the Corporation. Certain of the directors may serve as directors and/or officers of
other companies or have significant shareholdings in other companies. Situations may arise where the directors, officers and promoters of the Corporation will be engaged in direct competition with the Corporation. Any conflicts of interest will be
subject to and governed by the law applicable to directors and officers conflicts of interest.

INTEREST OF MANAGEMENT AND OTHERS
IN MATERIAL TRANSACTIONS

No director or executive officer of the Corporation, no person or company that beneficially owns, or controls or directs,
directly or indirectly, more than 10% of any class or series of the Corporations outstanding voting securities and no associate or affiliate of any of such persons or companies has any material interest, direct or indirect, in any transaction
within the three most recently completed financial years or during the current financial year that has materially affected or will materially affect the Corporation other than as disclosed below:

On December 20, 2005 the Corporation entered into a private placement agreement (the First Agreement) at arms length with Robert R. McEwen of
Toronto, Ontario, providing for the purchase by Mr. McEwen or any associate or affiliate of himself (together, McEwen) of an aggregate of 15,414,740 units of the Corporation (First Private Placement Units), at a price of
Cdn$0.35 per First Private Placement Unit, for gross proceeds of Cdn$5,395,159 (the First Private Placement). Each First Private Placement Unit was comprised of one Common Share and one-half of one Common Share purchase warrant (the
First Private Placement Warrant). One whole First Private Placement Warrant entitled the holder thereof to purchase one additional Common Share at an exercise price of Cdn$0.55 per Common Share at any time prior to the earlier of: a) the
15th trading day after receiving notice from the Corporation that the weighted-average price of the common shares on the TSX Venture Exchange has been equal to or greater than Cdn$1.00 for a period of 20 consecutive trading days commencing 120 days
after the date of issuance of the First Private Placement Warrant; and b) December 20, 2007. The First Private Placement closed on December 20, 2005. As a result of the First Private Placement, McEwen held approximately 14.2% of the issued
and outstanding Common Shares of the Corporation (or 19.9% after giving effect to the exercise of the First Private Placement Warrants acquired by McEwen). The full text of the First Agreement may be accessed on SEDAR at www.sedar.com.

The First Agreement provides that commencing on the date that is 61 days after the date which is the later of (i) the date upon which the Rights Plan
is terminated, and (ii) the date upon which all rights issued under the Rights Plan are redeemed, and ending on the date that is two (2) years following December 20, 2005 (the Closing), if at any time subsequent to the
Closing, McEwen owns not less than 10% of the issued and outstanding Common Shares (assuming the exercise of any Warrants held by McEwen), then the McEwen shall have a right of first refusal to subscribe for up to and including 100% of the value of
each financing undertaken by the Corporation, either by way of private placement or public offering of equity, debt, subscription units or convertible securities, rights offering or project financing, other than the currently contemplated



65



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debt financing by the Corporation of the San José Project of the Corporation through a yet to be determined financial institution, (a
Financing) on the same terms and conditions (including price and timing) as offered to other potential investors in each such Financing. McEwens right to participate in a financing applies to each financing and is not affected by
McEwens exercise or failure to exercise such right in respect of any particular financing. The First Agreement further provides that for a period of five (5) years following the Closing, if at any time subsequent to the Closing, McEwen
owns not less than 10% of the issued and outstanding Common Shares (assuming the exercise of any warrants held by McEwen), then McEwen shall have the right, from time to time and at any time, to nominate one (1) individual (the Subscriber
Nominee) to the board of directors of the Corporation, and the Corporation shall use all reasonable efforts to cause its board of directors to pass such resolutions and to take such other actions as may be required in order that the Subscriber
Nominee become a member of the board of directors of the Corporation. In addition, the Corporation shall use all reasonable efforts to cause its board of directors to pass such resolutions and to take such other actions as may be required in order
to maintain the number of members of the board of directors of the Corporation at not more than six (6).

The First Agreement also provides that for a
period of one (1) year from the Closing the Corporation will not, without the prior written consent of McEwen, which consent shall not be unreasonably withheld: (i) enter into any agreements respecting any of the Corporations
properties that might have the effect of creating an interest, directly or indirectly, in such property to a third party; (ii) enter into any agreements with third parties which will have rights, which when exercised, would have the effect of
granting an interest, directly or indirectly, in any of the Corporations properties to third parties; (iii) enter into any option, joint venture, royalty, lease, unitization, sale, deed, trust, conveyance, transfer, disposition, mining,
cross mining, commingling or agreements of whatever nature with respect to any of the Corporations properties; (iv) enter into any agreements with respect to financing on any of the Corporations properties which would result in any
dilution or reduction of the Corporations present interests in any of those properties; (v) enter into any agreements, relating to an amalgamation, reorganization, plan of arrangement or similar type of transaction, which might have the
effect of reducing the Corporations interest in any of its properties or granting a third party an interest, directly or indirectly, in any of the Corporations properties; and (vi) encumber any of the Corporations properties
in any manner whatsoever.

In addition, the First Agreement requires that the Corporation take all necessary action to obtain the necessary shareholder
approval for the Second Private Placement, to redeem the rights under the Rights Plan and to terminate the Rights Plan. The First Agreement also sets out how the funds provided by the First Private Placement are to be used.

In addition, the Corporation on December 20, 2005 signed a further subscription agreement, as amended (Second Agreement), at arms length with
McEwen, whereunder he has the right to acquire a further 13,156,689 Units of the Corporation, on the same terms as the First Private Placement, for gross proceeds of Cdn$4,604,841.10 (the Second Private Placement). The Second Private
Placement will close 61 days after receipt of approval from the shareholders of the Corporation of the termination of the Rights Plan and the redemption of the rights issued thereunder and upon satisfaction of other customary conditions of closing.
The full text of the Second Agreement may be accessed on SEDAR at www.sedar.com.



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The terms described above for the First Agreement are also set forth in the Second Agreement, other than the use of
proceeds from the Second Private Placement are detailed in the Second Agreement.

In addition, the Second Agreement provides that if favourable shareholder
approval is not obtained for the Second Private Placement, the redemption of the rights issued under the Rights Plan and the termination of the Rights Plan, and as a result there is no closing of the Second Private Placement on or before
March 2, 2006, the Corporation will be required to pay a break fee to McEwen of Cdn$2,000,000.

The terms of the Second Agreement were approved at a
Special Meeting of the Shareholders of the Corporation held on February 7, 2006. The Second Agreement was amended on March 8, 2006 to provide for the new closing date of March 8, 2006. Excluding warrants, on completion of this
subscription Mr. McEwen held 22.3% of the issued and outstanding shares of the Corporation with a total investment of C$10 million in the Corporation.

Pursuant to an Amending Agreement to Warrants dated May 5, 2006 (Amending Agreement) (available on SEDAR at www. sedar.com) Mr. McEwen completed the early exercise of 14,285,714 warrants he held in the Corporation.
Each warrant was exercisable into one common share at an exercise price of Cdn$0.55 for gross proceeds of Cdn$7,857,143. As a result, a total of 14,285,714 common shares were issued. In consideration for the early exercise of all of
Mr. McEwens common share purchase warrants, the Corporation issued to Mr. McEwen 2,000,000 new common share purchase warrants. Each new warrant will entitle McEwen to purchase one common share at an exercise price of Cdn$1.80 per
share for a term of 12 months expiring on May 5, 2007. On May 4, 2007 Mr. McEwen exercised 2,000,000 common share purchase warrants. As a result on May 4, 2007 Mr. McEwen increased his shareholdings in the Corporation to
46,057,143 or 27.75% of the issued and outstanding common shares.

As of the date of the AIF Mr. McEwen currently holds 46,057,143 or 24.33% of the
issued and outstanding common shares.

TRANSFER AGENT AND REGISTRAR

The registrar and transfer agent for the Corporations common shares is Computershare Trust Company of
Canada, 600, 530-8thAvenue SW Calgary, Alberta, T2P 3S8. Registration facilities are maintained and transfers of the Corporations common
shares may be effected through Computershares offices in Toronto, Ontario and Vancouver, British Columbia.

MATERIAL CONTRACTS

The following is a list of every contract, other than contracts entered into in the ordinary course of business, which is material to the Corporation and
was entered into within the most recently completed financial year, or before the most recently completed financial year but is still in effect:



| | 1) | On March 15, 2001 the Corporation entered into an Option and Joint Venture Agreement dated March 15, 2001, as amended with, Minera Andes S.A, and Hoschschild (the
Option Agreement) for the exploration and possible development of Minera Andes epithermal gold-silver exploration land package at El Pluma/Cerro Saavedra (now referred to as San José Project), including Huevos Verdes. A copy
of this agreement is available on SEDAR at www. sedar.com
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Under the Option Agreement, in July 2003 Hoschschild earned a 51% ownership in the joint venture by
spending a total of $3 million, including a minimum of $100,000 per year on exploration targets within the joint venture, other than Huevos Verdes. In addition, Hoschschild was to make semiannual payments totaling $400,000 per year until pilot plant
production was achieved. In September 2004, an amendment to the agreement stated such payments should be made until a positive feasibility study for the development of a mine on the property was obtained by MSC and the board of MSC made a decision
to construct the mine. In October 2005, MSC completed a positive feasibility study for the development of a mine on the property and in December 2005, the board of MSC made a decision to construct the mine such that the semiannual payments totaling
$400,000 per year are no longer payable by Hoschschild.

Following Hoschschilds vesting at 51% ownership, Minera Andes opted to
participate in the development of the project on a pro-rata basis.

In the fourth quarter of 2003, we notified Hoschschild of our intent to
subscribe for additional equity in MSC, so as to maintain a 49% interest. We made investments of $16.9 million, $13.6 million and $11.3 million in 2007, 2006 and 2005, respectively, to fund our 49% interest in the project.



| | 2) | The First Agreement dated December 20, 2005 between the Corporation and Robert R. McEwen of Toronto, Ontario. See Interests of Management and Others in Material
Transactions.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3) | The Second Agreement dated December 20, 2005 between the Corporation and Robert R. McEwen of Toronto, Ontario. See Interests of Management and Others in Material
Transactions.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4) | The Amending Agreement dated May 5, 2006 between the Corporation and Robert R. McEwen of Toronto, Ontario. See Interests of Management and Others in Material
Transactions.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5) | Beginning with the Credit Agreement dated December 10, 2004 between the Corporation and Macquarie, the Corporation has received numerous loan facilities from
Macquarie and amended and restated credit agreements have been entered into
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | with the most recent being the Second Amended and Restated Credit Agreement dated October 22, 2007, . a copy of this agreement is available at
www.sedar.com. Of the various loan facilities made by Macquarie the following remain outstanding:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

a) On
March 7, 2007, we received a third tranche of $7,500,000 from Macquarie of which $5,880,000 was for the development of the San José project and $1,620,000 was for general purposes. The commercial terms of this debt include a facility fee
of 1.5% of the principal amount, interest of LIBOR plus 2% p.a., currently totaling approximately 7.36% p.a., and a two-year loan term. In addition, Minera Andes provided share purchase warrants to acquire 4,227,669 Common Shares of Minera Andes at
an exercise price of Cdn$2.06 per share. The warrant exercise price was calculated at a 25% premium to the volume weighted average of Minera Andes common stock determined from the twenty business days prior to February 21, 2007. Each
warrant is to be exercisable for two years.

b) On October 26, 2007, we received a fourth tranche of $10,000,000 from Macquarie bank of
which $8,526,000 was for the development of the San José Project and $1,474,000 was for general purposes. The commercial terms of the fourth tranche include a facility fee of 1.5% of the principal amount, interest of LIBOR plus 2.75% p.a. and
mature on September 30, 2009. In addition, Minera Andes provided share purchase warrants to acquire 4,066,390 Common Shares of Minera Andes at an exercise price of Cdn$2.41 per share. The warrant exercise price was calculated at a 20% premium
to the volume weighted average of Minera Andes common stock determined from the twenty business days prior to October 22, 2007. Each warrant is to be exercisable for two years.



| | 6) | On October 10 2006, Minera Andes signed a letter of intent, as amended, to provide project financing with Lorenzon Limited, an affiliate of Hochschild, and to terminate the
Macquarie project financing offered in February 2006 and the $20 million Macquarie bridge loan offered in August 2006 subject to a successful public offer by Hochschild. Hochschild agreed to pay the break fees and other costs related to the
Macquarie financing. In November 2006, Hochschild successfully completed a public offering on the London Stock Exchange.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
Hochschild financing includes a binding $20 million bridge loan with MSC, which will be replaced, as soon as reasonably practical, with a permanent financing of $65 million or such higher amount as agreed to by Minera Andes and Hochschild. The
project financing will be made substantially on the same terms as the Macquarie financing except that:

(a) MSC will not be required to
hedge any of its production.

(b) The project financing will be unsecured, except for a security interest in certain collection and escrow
accounts and the funds deposited and the rights to the funds deposited. The shareholders of MSC will not be required to pledge their shares in MSC as security for the loans to MSC.



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(c) Events of default will basically be limited to events outside the control of Hochschild and MSC.

(d) Future project expansions will be financed from cash flow from the project.

Under terms of the financing, a subsidiary of Hochschild will lend 51% of the bridge loan and permanent financing directly to MSC and 49% of the loan will
be lent to Minera Andes which in turn will lend the funds to MSC. The interest rate of the bridge loan is LIBOR plus 2.5%. Final documentation for the permanent financing has not been completed, but the terms include, amongst other items, an
interest rate of LIBOR plus 2.85% and a minimum term of three years. Repayment of the loan payable is contingent on the operating cash flows of MSC.

As at December 31, 2006, the $20 million bridge loan had been lent to MSC. The Companys 49% share of the $20 million bridge loan is $9.8 million.

As at December 31, 2007, the $20 million bridge loan plus $45 million in advances on the permanent financing, a total of $65 million, had been lent on the project. The Companys 49% share of the project was
$31.85 million.



| | 7) | The Los Azules Option Agreement dated November 2, 2007 among the Corporation, MASA and Xstrata Copper. See Description Of Mineral Projects- Material Properties-Los Azules
Project for details.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

INTERESTS OF EXPERTS

Names of Experts

The persons referred to below have been named as having prepared or certified a report, valuation,
statement, or opinion described or included in a filing, or referred to in a filing, made under National Instrument 51-102 during, or relating to, the Corporations financial year ended December 30, 2007.

BDO Dunwoody LLP, Chartered Accountants, provided an auditors report dated March 26, 2008 in respect to the Corporations consolidated financial
statements for the year ended December 31, 2007.

William Colquhoun, FSAIMM; Principal Metallurgist, AMEC Lima office, Emmanuel Henry, MAusIMM (CP);
Principal Geostatistician, AMEC Santiago office, Armando Simon, Ph.D, R.P.(Geol), AIG; Principal Geologist, AMEC Santiago office, and Pierre Rocque, P.Eng.; Principal Mining Engineer, AMEC Oakville office, authored the San José Report and
each of whom is considered a qualified person and independent of the Corporation within the meaning of NI 43-101.



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Donald B. Tschabrun, MAusIMM, principal mining Engineer of Tetra, authored the Los Azules Report and is considered a
qualified person and independent of the Corporation within the meaning of NI 43-101.

In addition, at the Corporations request AMEC prepared a
technical report entitled San José Property, Santa Cruz Province, Argentina NI 43-101 with an effective date of June 30, 2007 (First San José Report). The First San José Report was authored by Pierre
Rocque, P.Eng.; Consulting Manager Mining and Geology, AMEC Oakville office, Robert Cintis, P.Geo.;, Principal Geologist, AMEC Vancouver office, Rodrigo Alves Marinho, CPG (AIPG); Senior Geologist, AMEC Santiago office, and William Colquhoun,
FSAIMM; Project Manager and Principal Metallurgist, AMEC Lima office. Each of the authors is considered a qualified person and independent of the Corporation within the meaning of NI 43-101. The San José Report subsequently superseded this
report.

Interests of Experts

BDO Dunwoody LLP has
advised that they are independent with respect to the Corporation within the meaning of the Rules of Professional Conduct of the Institute of Chartered Accountants of British Columbia and the rules of the US Securities and Exchange Commission.

To the knowledge of the Corporation, none of the other persons named above held, at the time of or after such person prepared the report, valuation,
statement, or opinion, any registered or beneficial interests, direct or indirect, in any securities or other property of the Corporation or of one of its associates or affiliates or is or is expected to be elected, appointed or employed as a
director, officer or employee of the Corporation or of any associate or affiliate of the Corporation.

AUDIT COMMITTEE AND RELATIONSHIP
WITH AUDITORS

National Instrument 52-110 of the Canadian Securities Administrators (NI 52-110)requires the Corporation, to
disclose annually in its Annual Information Form certain information concerning the constitution of its audit committee and its relationship with its independent auditors, as set forth in the following.

The Corporations audit committee is governed by an audit committee charter, the text of which is attached as Schedule A to this Annual Information Form.

The Corporations audit committee is comprised of three directors, Allan J. Marter, John Johnson (Jack) Crabb and Gary A. Craig. As defined in NI
52-110, Allan J. Marter, John Johnson (Jack) Crabb and Gary A. Craig are independent. Also as defined in NI 52-110, all of the audit committee members are financially literate.

Each audit committee member possesses education or experience that is relevant to the performance of their responsibilities as audit committee members of the
Corporation.



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Mr. Marter has more than 25 years experience in the financial sector of the mining industry. He retired on
October 13, 2006 after seven years as Chief Financial Officer of Golden Star Resources Ltd (TSX, AMEX). He currently serves as Président of the board and director of EURO Ressources SA (TSX and Euronext: EUR) and had previously served as
an officer and director of a number of North American junior exploration and mining companies. He is currently a director of Franconia Minerals Corporation (TSXV) since November 22, 2006 and is currently a director of Aurelio Resource
Corporation and acting Chief Financial Officer since November 28, 2006. Mr. Marter was president of the Northwest Mining Association in 1993.

Mr. Crabb graduated from the University of British Columbia in 1951 with a Masters Degree in Geology and has been a director of Minera Andes since November 6, 1995. He was a director of Inland Resources, Inc. from 1985 to November
1995. Mr. Crabb was the director of Pegasus Gold Inc. and Vice President of Exploration for Crowsnest Resources Ltd., a wholly owned subsidiary of Shell Canada.

Mr. Craig has a degree in Civil Engineering and is currently President of N.A. Degerstrom, Inc. since June 5, 2006. Prior thereto from July 1, 2000 he was Executive Vice President for N. A. Degerstrom,
Inc. His responsibilities for Degerstrom include managing 350 employees at various job sites throughout the U.S. and Argentina. Before his employment with Degerstrom, Mr. Craig worked 27 years for Dravo Corporation. The last 20 years with Dravo
he worked as project manager for a phosphate mining operation, where he oversaw 100 employees.

Since the commencement of the Corporations most
recently completed financial year, the Corporation has not relied on the exemption in



|1. | section 2.4 (De Minimis Non-audit Services which exempts all non-audit services provided by an issuers auditor from the requirement to be pre-approved by the
audit committee if such services are less than 5% of the auditors annual fees charged to the issuer, are not recognized as non-audit services at the time of the engagement of the auditor to perform them and are subsequently approved by the
audit committee prior to the completion of that years audit),
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2. | section 3.2 (Initial Public Offerings which exempts issuers from the requirement that all members of the audit committee be independent so long as the board is
satisfied the committee can nevertheless act independently and at least one member is independent for a period of 90 days, or so long as a majority of members are independent for a period of one year, from the date of the receipt from the securities
commission for the issuers prospectus in respect of its initial public offering),
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. | section 3.4 (Events Outside Control of Member which exempts an audit committee member from being independent for a period ending on the later of the issuers next
annual meeting of shareholders and the six month anniversary of the member ceasing to be independent if such lack of independence is due to reasons outside the members reasonable control), or
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|4. | section 3.5 (Death, Disability or Resignation of Audit Committee Member which exempts a new audit committee member appointed due to the death, disability or
resignation of a former member, for a period ending on the later of the issuers next annual meeting of shareholders and the six month anniversary of the new members appointment, from the requirement of being independent)
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

of NI 52-110 or an exemption from the requirements of NI 52-110, in whole or in part, granted by a securities regulator under Part 8
(Exemptions) of NI 52-110.

Since the commencement of the Corporations most recently completed financial year, the Corporation has not relied
on the exemption in section 3.3(2) (Controlled Companies which exempts a member of an audit committee from the requirement to be independent if the lack of independence arises solely from being a director of an affiliated entity and
other similar circumstances) or section 3.6 (Temporary Exemption for Limited and Exceptional Circumstances which exempts a member of an audit committee from the requirement to be independent in certain limited and exceptional
circumstances) of NI 52-110.

Since the commencement of the Corporations most recently completed financial year, the Corporation has not relied on
the exemption in section 3.8 (Acquisition of Financial Literacy which exempts a member of an audit committee from the requirement to be financially literate if the member becomes financially literate within a reasonable period of time
following their appointment) of NI 52-110.

Since the commencement of the Corporations most recently completed financial year, the Corporations
Board of Directors has not failed to adopt a recommendation of the audit committee to nominate or compensate an external auditor.

In the following
discussion, audit fees are fees billed by the Corporations external auditors for services provided in auditing the Corporations annual financial statements for the subject year. Audit-related fees are fees not
included in audit fees that are billed by the auditors for assurance and related services that are reasonably related to the performance of the audit or review of the Corporations financial statements. Tax fees are fees billed by
the auditors for professional services rendered for tax compliance, tax advice and tax planning. All other fees are fees billed by the auditors for products and services not included in the foregoing categories. The Corporation incurred
the following fees for services performed by its principal accounting firm, BDO Dunwoody LLP, during fiscal 2006 and 2007:



| | a. | Audit Fees
| | -- | ----------

The fees billed for each of the fiscal
years ended December 31, 2007 and December 31, 2006 for professional services rendered by BDO Dunwoody LLP for the audit of our annual consolidated financial statements and services that are normally provided by BDO Dunwoody LLP in
connection with statutory and regulatory filings or engagements for each of those fiscal years were $167,604 and $153,810, respectively.



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| | b. | Audit Related Fees
| | -- | ------------------

Fees billed by BDO Dunwoody LLP
for audit related services not included in item (a) were $4,156 for fiscal year ended December 31, 2007 (2006  $26,810).



| | c. | Tax Fees
| | -- | --------

Aggregate fees billed by BDO Dunwoody LLP
for tax compliance, tax advice and tax planning for each of the fiscal years ended December 31, 2007 and December 31, 2006 were $8,237 and $4,684, respectively. These fees include fees relating to the reviews of tax returns, tax consulting
and planning.



| | d. | All Other Fees
| | -- | --------------

Fees billed by BDO Dunwoody LLP for
products or services, other than those services covered in items (a) and (b) were $10,549 and $5,741 for the fiscal years ended December 31, 2007 and December 31, 2006. These fees relate to various corporate matters, including
fees billed by BDO Dunwoody LLP in connection with the review of our Management Information Circular and material for a special shareholder meeting.



| | e. | Audit Committee Approval of Audit and Non-Audit Services
| | -- | --------------------------------------------------------

Our Audit Committee is responsible for the oversight of our independent auditors work and pre-approves all services provided by BDO Dunwoody LLP. The Audit Committee sets forth its pre-approval in the minutes of its meetings. Audit
Related and Tax Fees provided by BDO Dunwoody LLP are typically approved individually during the Committees periodic meetings or, on an as-needed basis, the Audit Committees Chair is authorized to approve such services in advance on
behalf of the Committee with such approval reported to the full Audit Committee at its next meeting.

ADDITIONAL INFORMATION

Additional information relating to the Corporation can be found on SEDAR at www.sedar.com. Additional information, including directors
and officers remuneration and indebtedness, principal holders of the Corporations securities, and securities authorized for issuance under equity compensation plans will be contained in the Corporations Management Information
Circular to be prepared in connection with the Corporations annual and special meeting of shareholders to be held no later than June 30, 2008. Additional financial information is provided in the Corporations 2007 annual financial
statements and management discussion and analysis, also filed on SEDAR.



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SCHEDULE A

MINERA ANDES INC.

(the Corporation)

AUDIT COMMITTEE CHARTER

A. Purpose

The Audit Committee (the Committee) is a committee of the board of directors (the Board) of the Corporation the primary function of
which is to assist the Board in its oversight of the nature and scope of the annual audit, managements reporting on internal accounting standards and practices, financial information and accounting systems and procedures and financial
reporting and statements and to recommend, for approval of the Board, or to approve, the audited financial statements, interim financial statements and any other releases containing financial information.

The primary objectives of the Committee are as follows:



| | 1. | To assist directors meet their responsibilities (especially for accountability) in respect of the preparation and disclosure of the financial statements of the Corporation and
related matters.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | To oversee the work of the external auditors.
| | -- | ---------------------------------------------



| | 3. | To provide better communication between directors and external auditors.
| | -- | ------------------------------------------------------------------------



| | 4. | To enhance the external auditors independence.
| | -- | -----------------------------------------------



| | 5. | To increase the credibility and objectivity of financial reports.
| | -- | -----------------------------------------------------------------



| | 6. | To strengthen the role of the outside directors by facilitating in depth discussions between directors on the Committee, management and the external auditors.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

B. Responsibility of Management and External Auditors

The Committees role is one of oversight. Management is responsible for preparing the Corporations financial statements and other financial information and for the fair presentation of the information set
forth in the financial statements in accordance with generally accepted accounting principles (GAAP). Management is also responsible for establishing internal controls and procedures and for maintaining the appropriate accounting and
financial reporting principles and policies designed to assure compliance with accounting standards and all applicable laws and regulations.

The external
auditors responsibility is to audit the Corporations financial statements and provide their opinion, based on their audit conducted in accordance with generally accepted auditing standards, that the financial statements present fairly,
in all material respects, the financial position, results of operations and cash flows of the Corporation in accordance with GAAP.

C. Membership and
Organization

1. CompositionThe Committee shall be comprised of not less than three independent members of the Board.



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2. IndependenceNone of the members of the Committee shall be members of management of the Corporation, and
all of them shall be unrelated directors (as such term is used in the Report of the Toronto Stock Exchange on Corporate Governance in Canada) and independent (as such term is used in Multilateral Instrument 52-110Audit
Committees (MI 52-110).

3. Appointment and Removal of Committee MembersEach member of the Committee shall be appointed by the
Board on an annual basis and shall serve at the pleasure of the Board or until the earlier of: (a) the close of the next annual meeting of the shareholders of the Corporation at which the members term of office expires; (b) the death
of the member; or (c) the resignation, disqualification or removal of the member from the Committee or from the Board. The Board may fill the vacancy in the membership of the Committee.

4. Financial LiteracyAll of the members of the Committee shall be financially literate within the meaning used in MI 52-110 or a member who is
not financially literate must become so within a reasonable period of time following his or her appointment.

5. ChairAt the time of the
annual appointment of the members of the Committee, the Board shall appoint a Chair of the Audit Committee. The Chair shall be a member of the Committee, preside over all Committee meetings, coordinate the Committees compliance with this
Charter, work with management to develop the Committees annual work plan and provide reports of the Committee to the Board. The Chair may vote on any matter requiring a vote. In the case of an equality of votes, the Chair shall be entitled to
a second or casting vote. The Chair shall report to the Board, as required by applicable law or as deemed necessary by the Committee or as requested by the Board, on matters arising at Committee meetings and, where applicable, shall present the
Committees recommendation to the Board for its approval.

6. Venture IssuerFor so long as the Corporation is a Venture
Issuer (as defined in MI 52-110), it is not required to comply with the provisions of paragraph 1 Composition, paragraph 2 Independence and paragraph 4 Financial Literacy. In the event the Corporation cannot
comply with all or a part of these provisions, then the Committee shall be comprised of not less than three members of the Board, a majority of whom are not officers or employees of the Corporation or a subsidiary of the Corporation.

D. Functions and Responsibilities

The Committee shall have
the functions and responsibilities set out below as well as any other functions that are specifically delegated to the Committee by the Board. In addition to these functions and responsibilities, the Committee shall perform the duties required of an
audit committee by the Alberta Business Corporations Act, by any requirements of stock exchanges on which the securities of the Corporation are listed, and all other applicable laws.

1. Oversee External AuditorsThe Committee shall oversee the work of the external auditors, including reviewing any significant disagreements between
management and the external auditors in connection with the preparation of financial statements.

2. Internal ControlsThe Committee shall
monitor the system of internal control. The Committee shall require management to implement and maintain appropriate systems of internal control in accordance with applicable laws, regulations and guidance, including internal control over financial
reporting and disclosure and to review, evaluate and approve these procedures. At least annually, the Committee shall consider and review with management and the external auditors:

(a) the effectiveness of, or weaknesses or deficiencies in: the design or operation of the Corporations internal controls (including computerized information system controls and security); the overall control
environment for managing business risks; and accounting, financial and disclosure controls (including, without limitation, controls over financial reporting), non financial controls, and legal and regulatory controls and the impact of any identified
weaknesses in internal controls on managements conclusions.



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(b) any significant changes in internal control over financial reporting that are disclosed, or considered for
disclosure, including those in the Corporations periodic regulatory filings;

(c) any material issues raised by any inquiry or investigation by the
Corporations regulators;

(d) any related significant issues and recommendations of the external auditors together with managements responses
thereto, including the timetable for implementation of recommendations to correct weaknesses in internal controls over financial reporting and disclosure controls.

3. Review Financial StatementsThe Committee shall review the annual and interim financial statements of the Corporation and related managements discussion and analysis (MD&A) prior to their approval. The
process should include but not be limited to:

(a) reviewing changes in accounting principles and policies, or in their application, which may have a
material impact on the current or future years financial statements;

(b) reviewing significant accruals, reserves or other estimates;

(c) reviewing any related party transactions, with related party having the meaning ascribed to it by Canadian securities regulations;

(d) reviewing accounting treatment of unusual or non-recurring transactions;

(e) ascertaining compliance with covenants under loan agreements;

(f) reviewing disclosure requirements for commitments and contingencies;

(g) reviewing unresolved differences between management and the external auditors;

(h) obtain explanations of significant variances with comparative reporting periods;

(i) reviewing any legal matters which
could significantly impact the financial statements as reported on by the general counsel and meet with outside counsel whenever deemed appropriate; and

(j) reviewing audit response letters from the Corporations legal counsel made under the Joint Policy Statement of the Canadian Bar Association and the Canadian Institute of Chartered Accountants.

4. Public DisclosureThe Committee shall review the financial statements, MD&A, annual information forms (AIF), management information
circulars and any prospectuses as well as all public disclosure containing audited or unaudited financial information (including, without limitation, any press releases disclosing earnings or financial results) before release and prior to Board
approval.

5. Interim Financial StatementsThe Committee shall review the interim financial statements and disclosures, and obtain explanations
from management as required. After completing its review of the interim financial statements, if advisable, the Committee shall, if so authorized by the Board, approve the interim financial statements and the related MD&A, or if not so
authorized by the Board, then approve and recommend them for approval by the Board.

6. Hiring PoliciesThe Committee shall review and approve
the Corporations hiring policies regarding the hiring of partners, employers and former partners and employees of the present and former external auditors of the Corporation. The Committee shall review candidates for the position of Chief
Financial Officer of the Corporation and make recommendations to the Board with respect to the appointment of a Chief Financial Officer.

7. Appointment
of External AuditorsWith respect to the appointment of external auditors by the Board, the Committee shall:

(a) recommend to the Board the
appointment of the external auditors;



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(b) recommend to the Board the terms of engagement of the external auditor, including the compensation of the auditors
and a confirmation that the external auditors shall communicate directly to the Committee;

(c) on an annual basis, review and discuss with the external
auditors all significant relationships such auditors have with the Corporation to determine the auditors independence;

(d) review the performance of
the external auditors;

(e) when there is to be a change in auditors, review the issues related to the change and the information to be included in the
required notice to securities regulators of such change; and

(f) review and approve in advance any non-audit services to be provided to the Corporation or
its subsidiaries by the external auditors and consider the impact on the independence of such auditors, including reviewing the range of services provided in the context of all consulting services bought by the Corporation. The Committee may
delegate to one or more members the authority to approve nonaudit services, provided that the member report to the Committee at the next scheduled meeting such preapproval and the member comply with such other procedures as may be
established by the Committee from time to time.

8. Evaluation and Rotation of Lead PartnerAt least annually, the Committee shall review the
qualifications and performance of the lead partners of the external auditors. The Committee shall obtain a report from the external auditors annually verifying that the lead partner of the external auditors has served in that capacity for no more
than five fiscal years of the Corporation and that the engagement team collectively possesses the experience and competence to perform an appropriate audit.

9. Review with External AuditorsReview with external auditors (and internal auditor if one is appointed by the Corporation) their assessment of the internal controls of the Corporation, their written reports containing
recommendations for improvement, and managements response and follow-up to any identified weaknesses. The Committee shall also review annually with the external auditors their plan for their audit and, upon completion of the audit, their
reports upon the financial statements of the Corporation and its subsidiaries.

10. Risk Policies and ProceduresThe Committee shall review
risk management policies and procedures of the Corporation (e.g. hedging, litigation and insurance), regarding current areas of great financial risk and whether management is managing these effectively.

11. Treatment of Complaints/SubmissionsThe Committee shall review and approve the establishment by management of procedures for the receipt, retention and
treatment of complaints received by the Corporation from employees or others, regarding accounting, internal accounting controls, or auditing matters.

12.
InvestigationsThe Committee shall have the authority to investigate any financial activity of the Corporation. All employees of the Corporation are to cooperate as requested by the Committee.

13. Retain ExpertsThe Committee may retain independent counsel, persons having special expertise and/or obtain independent professional advice to assist in
filling their responsibilities at the expense of the Corporation without any further approval of the Board. The Committee has the authority to set, and have the Corporation, pay the compensation for any such persons engaged by the Committee.

14. Advising BoardThe Committee shall ensure that the Board is aware of matters which may significantly impact the financial condition or
affairs of the business.

15. Updates to CharterThe Committee shall review and recommend to the Board any updates to the Audit Committee
Charter. All changes to the Audit Committee Charter shall be approved by the Board.



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E. Adoption of the Audit Committee Charter and Amendments

1. This Charter was adopted and approved by the Board of Directors of the Corporation on May 20, 2005.



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