Anaconda Mining Inc. ("Anaconda" or "the Company") (TSX:ANX) is pleased to
report its financial and operating results for the fiscal year ended May 31,
2013. The Company generated net income of $7,438,629 or $0.04 per fully diluted
share compared with net income of $3,298,063 or $0.02 per fully diluted share
for the fiscal year ended May 31, 2012. Fiscal 2013 net income consisted of
income from operations of $3,460,629 or $0.02 per share and the recording of a
deferred income tax recovery of $3,978,000 or $0.02 per share. Deferred income
tax assets were recorded when the Company removed its going concern note to the
financial statements and recognized the tax value of its income tax loss carry
forward amounts.
President and CEO, Dustin Angelo, stated, "The Company had another record year
in terms of sales volume, revenue, operating cash flow and net income. We
generated nearly $7 million in EBITDA and over $9 million in mine level cash
flow, which is tremendous when you consider our market capitalization. We were
also successful in achieving our number one goal for the fiscal year, which was
to pay off all of our high cost debt. As at May 31, 2013, we had a very clean
balance sheet with only approximately $260,000 in low cost, government issued
loans. The balance sheet will be fortified in September when the Company
receives the US$1 million commercial production milestone payment from our
partners in Chile. Going forward, we will also begin to receive royalty payments
from Chile so this non-core asset has, once again, become a cash generator."
The Company's core gold mining business continues to improve and management has
set challenging goals for fiscal 2014. The Company has budgeted to produce and
sell approximately 18,000 ounces of gold for the year and generate nearly $4
million in net income using a gold price of $1,400 per ounce and an average head
grade of approximately 2.1 grams per tonne. Cash operating costs at the mine
level (production, royalty, Pine Cove G&A, etc.) are expected to be
approximately $960 per ounce and all in cash costs including corporate, capital
expenditures and exploration are projected to be approximately $1,200 per ounce.
Highlights for the fiscal year ended May 31, 2013
BALANCE SHEET IMPROVEMENT:
-- As at May 31, 2013, the Company had cash and cash equivalents of
$466,899 and net working capital of $1,333,047.
-- During the year ended May 31, 2013, the Company made principal payments
of $4,054,727 and reduced its overall principal amount of debt to
$262,338. Of the total principal paid, $3,697,280 went against its
Series I Debenture, Series II Debenture and the Thorsen loan, paying off
these obligations in full.
OPERATING PERFORMANCE:
-- For the year ended May 31, 2013, the Company sold 14,879 ounces of gold
and generated $24,173,439 in revenue at an average sales price of $1,625
per ounce.
-- Cash operating cost per ounce sold at the Pine Cove Project for the year
ended May 31, 2013 was $1,004 per ounce.
-- Total cash cost per ounce sold, including corporate administration,
capital expenditures and exploration and evaluation asset costs for the
year ended May 31, 2013 was $1,341 per ounce.
-- At the Pine Cove project, earnings before interest, depreciation and
depletion and share based compensation ("EBITDA") for the year ended May
31, 2013 was $9,233,758.
-- On a consolidated basis, EBITDA for the year ended May 31, 2013 was
$6,914,426.
-- Net income for the year ended May 31, 2013 was $7,438,629 or $0.04 per
share basic and $0.04 per fully diluted share, respectively. Net income
attributable to operations was $3,460,629 or $0.02 per share and net
income related to the recording of a deferred income tax asset was
$3,978,000 or $0.02 per share.
-- Purchase of property, mill and equipment for the year ended May 31, 2013
was $1,665,632.
GROWTH INITIATIVES:
-- Approximately $1,023,000 was spent at the Pine Cove project on
exploration for the year ended May 31, 2013. The Company's exploration
initiatives focused on drilling the down-dip and western extensions of
the pit, prospecting the properties across the Pine Cove project and
obtaining a bulk sample from the Romeo and Juliet prospect.
-- During fiscal 2013, the Company entered into 3 option agreements and
staked nearly 300 acres, increasing its land package within the Pine
Cove project to approximately 4,785 hectares.
Operations overview
During the year ended May 31, 2013, the gold sales volume of 14,879 ounces
represented a 24% increase over the same period in 2012. Average sales price for
the year was $1,625 per ounce versus $1,662 per ounce for the year of fiscal
2012, a 2% decrease. As a result of the higher sales volume, gross revenue
during the year ended May 31, 2013, of $24,172,439, was significantly higher
than the same period in the previous fiscal year by $4,266,683. The higher
overall gold output compared to the previous year was a result of higher grade
and recovery.
The following table summarizes the key operating metrics for fiscal 2013 and 2012.
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May 31 May 31
2013 2012
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OPERATING STATISTICS:
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Mill
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Operating days 323 314
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Availability 87% 85%
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Dry tonnes processed 287,747 286,139
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Tonnes per 24-hour period 890 925
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Grade (grams per tonne) 1.99 1.81
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Overall mill recovery 83% 80%
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Gold sales volume (troy oz.) 14,879 11,978
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Mine
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Operating days 234 239
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Ore production (tonnes) 309,059 272,854
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Waste production (tonnes) 1,649,408 1,306,163
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Total production (tonnes) 1,958,467 1,579,017
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Waste: Ore ratio 5.34 4.80
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MILLING OPERATIONS
The Pine Cove mill operated for 323 days during the year at 87% availability.
The mill processed 287,747 dry tonnes of ore (890 tonnes per operating day) at
an average head grade of 1.99 grams per tonne ("g/t"), higher than the 1.90 g/t
projected for the year. Overall mill recovery averaged 83% for the year, which
was on budget.
Mill availability and throughput was best in the second and fourth quarters when
there were no significant weather issues or maintenance down time. In the first
quarter, the mill was down in August 2012 for a two week maintenance period,
slightly longer than planned. In the third quarter, significant snowfall
followed by extended periods of rain and freezing rain contributed to some
mechanical failures and lower availability of the crushing plant during the
winter. In addition, there were two weather related power outages/incidents
causing site shutdowns. Subsequent mechanical improvements together with an
extension in the crushing schedule alleviated availability issues going into the
final quarter of fiscal 2013. These improvements allowed the site to achieve
crushing capacity in excess of the mill capacity. Consequently, the site
maintained consistent feed to the ball mill and several days of crushed ore for
unscheduled mechanical downtime. The following table summarizes the key mill
operating statistics for the year ended May 31, 2013.
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Total/
Q1 '13 Q2 '13 Q3 '13 Q4 '13 Avg.
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OPERATING STATISTICS:
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Operating days 74 86 77 86 323
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Availability 77% 94% 85% 94% 87%
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Dry tonnes processed 62,865 76,292 63,822 84,768 287,747
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Tonnes per 24-hour period 854 884 830 982 890
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Grade (grams per tonne) 1.84 1.76 2.17 2.18 1.99
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Overall mill recovery 84% 83% 83% 84% 83%
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Gold sales volume (troy oz.) 4,217 3,194 3,101 4,367 14,879
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MINING OPERATIONS
Mining activities operated for a total of 234 days during the year and excavated
a total of 1,958,467 tonnes of ore and waste. Ore production totaled
approximately 309,000 tonnes which was right at budget, while waste was
approximately 1,649,000 tonnes for a strip ratio of 5.3 : 1, also very close to
plan. Operating days were reduced in the final two quarters as a result of over
production relative to budget in the first two quarters. The following table
summarizes the key mine operating statistics for the year ended May 31, 2013.
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Total/
Q1 '13 Q2 '13 Q3 '13 Q4 '13 Avg.
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OPERATING STATISTICS:
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Operating days 66 64 52 52 234
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Ore production (tonnes) 88,159 61,172 86,025 73,703 309,059
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Waste production (tonnes) 517,021 494,856 335,669 301,862 1,649,408
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Total production (tonnes) 605,180 556,028 421,694 375,565 1,958,467
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Waste: Ore ratio 5.86 8.09 3.90 4.10 5.34
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EXPLORATION
The Company, through a combination of staking and option agreements holds
mineral exploration rights to approximately 4,785 hectares comprising the Pine
Cove Project. These rights cover highly prospective rocks of the Point Rousse
ophiolite complex which is known to host "Mother-Lode-Style" gold
mineralization. The fiscal 2013 exploration program had three objectives:
1) to re-evaluate the exploration potential immediately north and west of the
Pine Cove deposit;
2) to identify trenching and diamond-drill targets regionally across the Pine
Cove project; and
3) to obtain a bulk sample from the Romeo and Juliet prospect for metallurgical
testing.
1. Pine Cove Down-Dip and Western Extension Exploration: Historic drilling
immediately north of the Pine Cove deposit indicated potential for
additional gold mineralization down-dip of the Pine Cove deposit. In
2011 and 2012, drilling was completed approximately 100 meters north of
the mine. Drill hole PC-11-181 intersected 2.50 grams per tonne gold
over 40.8 meters and PC-12-189 intersected 32 meters grading 0.848 grams
per tonne. During the fiscal year, the Company completed a twenty-hole,
3,296-metre program successfully exploring the area immediately west and
down-dip of the Pine Cove deposit. Subsequent to the end of fiscal 2013,
a review and compilation of diamond-drill results from the winter drill
program was completed. A detailed structural interpretation was
recommended to guide future exploration efforts. A structural study of
the Pine Cove mine area was initiated in late July, 2013. Results are
anticipated by the fall of 2013.
Highlights:
Western Extension Area
-- Hole PC-13-196 intersected 11.4 metres of 2.19 grams per tonne ("g/t")
gold from a depth of 26.6 meters;
-- Additional mineralization in hole PC-13-196 was intersected at 63.9
metres and again at 96.0 metres;
-- Hole PC-13-202 intersected 26.87 metres of 1.81 g/t from a depth of 73
metres and 12.7 metres of 1.28 g/t gold from a depth of 108.9 metres;
-- Hole PC-13-210 intersected 41 metres of 2.34 g/t gold from a depth of 51
metres.
Down-dip Extension Area
-- Hole PC-13-195 intersected 12.06 metres of 3.32 g/t gold from a depth of
168.66 metres;
-- Hole PC-13-199 intersected 3.06 metres of 7.69 g/t gold from a depth of
147.2 metres:
-- Four, widely spaced drill holes all intersected mineralization up dip
from PC-11-181, which assayed 2.50 g/t gold over a core length of 40.8
metres (Anaconda Press Release, July 27, 2011).
2. Regional Exploration: Past mineral exploration activities in the Ming's
Bight area on the Baie Verte Peninsula, dating mainly from the period
1985-1990, resulted in an extensive collection of archived data that
includes more than 30,000 gold-in-soil geochemical analyses. Much of
this data has never been adequately followed up and many anomalies have
not been explained. Compilation and digitizing of this historic
geophysical and soil geochemical data was initiated by Tenacity and
completed by Anaconda. Prospecting teams have followed up much of the
historic soil data and completed infill sampling in some areas.
As a result of the positive sampling results, trenching targets have been
identified in the Ming's Bight and Goldenville areas. Because of positive
sampling results from the Goldenville area, Anaconda optioned three mineral
licenses from local prospectors (Press Release dated December 11, 2012) and now
controls a 4-kilometer strike length of the Goldenville iron formation.
Trenching has also been completed in the Pine Cove North area. Three trenches
exposed shear-related, strongly silicified and iron-carbonitized mafic volcanic
rocks locally containing disseminated pyrite. These altered zones are anomalous
in gold over exposed trench lengths of greater than 30 meters with assay values
up to 820 ppb over one meter channel intervals.
Additional work is planned for both the Pine Cove North and Goldenville areas.
In June, after the fiscal year end, Fugro Airborne Services completed a
helicopter-borne Electromagnetic/Magnetic survey over the entire Pine Cove
Project. The Dighem EM/Horizontal Magnetic Gradiometer survey targeted
ophiolitic and cover sequence rocks of the Point Rousse Complex. The survey
covered approximately 700 line kilometers at a flight line spacing of 75 meters.
The data will be used in conjunction with archived gold-in-soil geochemical data
and prospecting to further delineate exploration targets.
3. Romeo and Juliet Bulk Sample: The Romeo and Juliet prospect is a gold-
bearing quartz vein system located 1.5 kilometers northwest of the Pine
Cove mine. The veins were discovered in 1988 and have been trenched and
tested by 18 shallow diamond-drill holes. The veins contain very fine,
free gold making sampling a challenge ("nugget effect") as historic chip
and channel samples returned quite variable assay values including 1.15
grams per tonne gold over 6 metres from the Romeo zone up to 23 grams
per tonne over 1.0 metre from the Juliet zone. In 1993, a 10-tonne
"mini" bulk sample was collected from the Juliet zone and 3,035
kilograms were processed returning a head grade of 36.68 grams per tonne
gold (this data is historic in nature and has not been verified by the
Company). In August 2012, 24 grab samples were collected from the Juliet
zone and assay results ranged from a low of 10 parts-per-billion gold up
to 130.7 grams per tonne gold. In the late fall of 2012 Anaconda
extracted a 1,000-tonne bulk sample from the Juliet zone and stockpiled
the broken quartz vein material at the Pine Cove mine where it was
crushed.
Five representative samples of crushed quartz, averaging 12.6 kg, were processed
at Accurassay Laboratories in Thunder Bay by cyanide extraction (bottle roll
testing). The weighted average assay of the five samples is 5.71 g/t gold and is
representative of the gold grade within the near surface portion of the Juliet
zone where the bulk sample was extracted. Table 1 contains the head grade assay
results for the five samples.
Table 1. Gold head grade assay results
from Anaconda's Romeo and Juliet bulk
sample.
Mass Grade
Sample (grams) (g/t gold)
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68956 11,842 6.32
68957 12,774 5.14
68958 12,299 5.15
68959 13,061 4.91
68960 13,018 7.05
Romeo and Juliet Project Plan
The Company initiated metallurgical testing and pilot milling of the Romeo and
Juliet material. Ideally, the quartz vein hosted mineralization would supplement
the current sulfide hosted mineralization to maximize the current circuit
configuration of the mill. The Company is also planning to calculate a
preliminary resource estimate after receiving the results from the 2,000 metre
in-fill diamond-drill program that was initiated in July and completed by
mid-August, 2013. Pending a favorable resource estimate, Anaconda is considering
an underground exploration program, to better define grades and geometry.
The information in this release has been reviewed and approved by David Evans,
P. Geo., with Silvertip Exploration Consultants Inc., a "Qualified Person" under
National Instrument 43-101.
ABOUT ANACONDA
Headquartered in Toronto, Canada, Anaconda is a growth oriented, gold mining and
exploration company with a producing asset located on the Baie Verte Peninsula
in Newfoundland, Canada called the Pine Cove mine.
FORWARD-LOOKING STATEMENTS
This document contains or refers to forward-looking information. Such
forward-looking information includes, among other things, statements regarding
targets, estimates and/or assumptions in respect of future production, mine
development costs, unit costs, capital costs, timing of commencement of
operations and future economic, market and other conditions, and is based on
current expectations that involve a number of business risks and uncertainties.
Factors that could cause actual results to differ materially from any
forward-looking statement include, but are not limited to: the final approval of
the private placement by the Toronto Stock Exchange; the grade and recovery of
ore which is mined varying from estimates; capital and operating costs varying
significantly from estimates; inflation; changes in exchange rates; fluctuations
in commodity prices; delays in the development of the any project caused by
unavailability of equipment, labour or supplies, climatic conditions or
otherwise; termination or revision of any debt financing; failure to raise
additional funds required to finance the completion of a project; and other
factors. Additionally, forward-looking statements look into the future and
provide an opinion as to the effect of certain events and trends on the
business. Forward-looking statements may include words such as "plans", "may",
"estimates", "expects", "indicates", "targeting", "potential" and similar
expressions. These forward-looking statements, including statements regarding
Anaconda's beliefs in the potential mineralization, are based on current
expectations and entail various risks and uncertainties. Forward-looking
statements are subject to significant risks and uncertainties and other factors
that could cause actual results to differ materially from expected results.
Readers should not place undue reliance on forward-looking statements. These
forward-looking statements are made as of the date hereof and we assume no
responsibility to update them or revise them to reflect new events or
circumstances, except as required by law.
FOR FURTHER INFORMATION PLEASE CONTACT:
Anaconda Mining Inc.
Dustin Angelo
President and CEO
(647) 260-1248
dangelo@anacondamining.com
www.anacondamining.com
ProConsul Capital Ltd.
Andreas Curkovic
Investor Relations
(416) 577-9927
acurkovic@proconsulcapital.com
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