* Q3 silver production 1.4 mln oz, up 15 pct vs Q2
* Q3 gold production 22,025 oz, up 12 pct vs Q2
* Shares rise as much as 5 pct (Recasts; adds details, analyst comments, updates share movement)
BANGALORE, Oct 20 (Reuters) - Canada's Minera Andes MAI.TO said silver and gold production at its flagship San Jose mine in Argentina grew sequentially in the third quarter, helped by improved development of the high-grade Kospi vein, sending its shares up as much as 5 percent.
The San Jose mine is operated by Minera Santa Cruz SA, a joint venture between Hochschild Mining Plc (HOCM.L) and Minera Andes. About 49 percent of production at San Jose is attributable to Minera Andes.
Canaccord Genuity analyst Wendell Zerb expects improved production at the mine in the second half of the year, compared to the first.
Third-quarter silver production was up 15 percent at 1.4 million ounces sequentially, while gold production rose 12 percent to 22,025 ounces, compared with the second quarter.
However, sales of silver and gold were down 6 percent and 10 percent, respectively, compared with the prior quarter due to an increase in products inventory.
The company said it will give details on production costs with the third-quarter results.
Earlier this month, Minera Andes said the discovery of nine veins of gold and silver would "significantly" extend the life of the San Jose mine. [ID:nSGE6960KT]
In September, the company resolved a dispute with Hochschild over the repayment of loans for financing the San Jose joint venture. [ID:nSGE68J0KA]
Minera Andes shares touched a high of C$2.02 Wednesday morning on the Toronto Stock Exchange. The stock has gained 74 percent in value since the company settled the loan dispute with Hochschild. (Reporting by Gowri Jayakumar in Bangalore; Editing by Jarshad Kakkrakandy, Anne Pallivathuckal)