AAG Aftermath Silver Ltd

Andean American Gold Corp. ("Andean American" or the "Company") (TSX
VENTURE:AAG)(FRANKFURT:AQN) wishes to provide an update to shareholders
following a detailed review, by the Company's management and its Board, of
corporate and project objectives in the light of the current financial market
conditions, the capital requirements to develop its Invicta Gold Project in Peru
and the opportunities for value-adding mergers and acquisitions which arise in
such a market.  


Taking the abovementioned factors into consideration and with a view to
preserving the Company's healthy cash balance, the management and Board of
Andean have decided to delay completion of the current Feasibility Study
activities on the Invicta Project. The management and Board are considering
various merger and acquisition opportunities that may include the involvement of
joint venture partners, sale of certain properties and the use of funds to
purchase new projects for the Company.  


As previously announced on June 17, 2011, and as part of the Feasibility Study
which was commissioned from SRK Consulting (U.S.) Inc. ("SRK"), the Company and
its consultants are busy with a number of trade-off studies to identify
opportunities for capital cost reductions at Invicta. These studies are
addressing costs associated with roads, water, power and other infrastructure
which accounts for approximately one third of the preliminary initial capital
cost estimate for Invicta. These trade-off studies will continue unaffected but
the engineering studies for the identified favoured options will not be
completed to a feasibility level at this stage. 


Although the Feasibility Study is not yet complete, early indications are that
the initial capital cost to build an underground mine at Invicta will be
considerably higher than forecast in the July 2010 Feasibility Study, and may
exceed US$150 million, partly due to increases in the estimates for
infrastructure, such as roads and water supply. Indications based on the work
done to date are that the mine plan will only support an ore production rate of
4,000 tonnes per day and not 5,000 tonnes per day as per the July 2010
Feasibility Study, and management estimates that project operating costs could
be anywhere in the vicinity of US$30 to US$40 per ore tonne (not finalized by
SRK and other Feasibility Study consultants), compared to the US$28 per ore
tonne indicated in the July 2010 Feasibility Study. Although metal prices have
increased since the July 2010 Feasibility Study, management believes that the
currently estimated project costs will exceed the Project Debt Finance Facility
that the Company has in place with Barclays Capital and West LB, thus delaying
the completion of the current Feasibility Study. 


Management and the Board believe that the Invicta property is under-explored and
are optimistic that further exploration drilling on the property should show an
increase in the mineable resources. Increased mine life will strengthen the
economics of the project, and will support the Company's efforts to raise the
project debt and equity finance required to build the mine. 


The Company will continue its community relations program and negotiations to
complete the outstanding agreements with the communities surrounding the Invicta
Project, which are a pre-requisite for mine construction. In addition to the
agreement already reached with the community of Santo Domingo de Apache,
significant progress has been made in building relationships with the two other
communities of Paran and Lacsanga and Andean is supporting ongoing road and
water studies which will benefit both the communities and the future mine. 


"We believe it is prudent for the Company to preserve its cash position in a
difficult financial market where many junior resource issuers are unable to
raise funds. We will use the time to explore the Invicta property for further
resources and to advance relationships and negotiations with the local
communities, both of which will prepare the Company for future growth," said
David Rae, President and CEO of Andean American.


Qualified Person 

This press release has been reviewed by Peter Clarke of SRK Consulting (U.S.)
Inc. (SRK), an independent Qualified Person, as this term is defined in NI
43-101. The opinions contained herein are based on available information
concerning the Invicta Project, and in part from the Feasibility Study work
carried out to date which has not been completed. The quality of information and
estimates are based on the data available at the time and level of preparation,
and opinions regarding estimates and project status are based on data provided
from various sources, including SRK and other project consultants.


Appointment of a new Director to the Board 

Andean American is pleased to announce the appointment of Jean-Pierre Chauvin to
the Board of Directors. Mr. Chauvin brings significant technical skills and
board level experience, as well as experience with mergers and acquisitions, to
the Board of Andean American. He is a mining engineer with over 29 years in the
mining industry and currently serves on the Boards of PC Gold Inc., LakeSide
Minerals Inc., Macusani Yellowcake Inc. and Khan Resources Inc. The Board of
Andean American welcomes Mr. Chauvin and believes that he will be a valuable
member as the Company seeks new opportunities for growth. 


About Andean American 

Andean American is an international mining and exploration company focused on
value growth through the development of gold and copper projects in Peru and
currently has two key assets: the 31,600 hectare Invicta gold-silver-copper
advanced exploration stage project and 65% of Sinchao Metals Corp., owner of the
Sinchao gold-silver-copper exploration project. In addition, the Company is
actively targeting early stage gold and silver prospects in Peru. 


For further information about Andean American, please visit the Company's
website at www.AAGgold.com.


Forward Looking Information 

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


On behalf of Andean American Gold Corp.,

David Rae, President and Chief Executive Officer

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