Anaconda Mining Inc. ("Anaconda" or "the Company") - (TSX:ANX) is pleased to
report its financial and operating results for the three months ended August 31,
2013 (the "Quarter"). The Company generated net income of $596,295, or $0.003
per fully diluted share, and $1,786,382 in earnings before interest,
depreciation and depletion, and share based compensation ("EBITDA"). The Company
sold 4,096 ounces of gold and generated $5,731,783 in revenue at an average
sales price of $1,399 per ounce. Cash operating cost per ounce sold at the Pine
Cove Project for the three months ended August 31, 2013 was $950.
President and CEO, Dustin Angelo, stated, "The first quarter financial results
in terms of revenue, operating cash flow and net income were very strong in the
face of a volatile gold price environment. We generated nearly $1.8 million in
EBITDA and almost $2.4 million in mine-level cash flow, despite a gold price
reduction of approximately $225 per ounce from the first quarter in fiscal 2013.
After completing the first quarter of fiscal 2014, we are at or better than
budget on nearly all key financial and operating metrics. With the positive
operating numbers at Pine Cove, the receipt of US$1 million from the commercial
production milestone payment in September from our partners in Chile, and the
future royalty payments from Chile, the Company is on very sound financial
footing with less than $250,000 in debt and approximately $1.8 million dollars
in the bank."
Highlights for the fiscal year ended May 31, 2013
BALANCE SHEET:
-- As at August 31, 2013, the Company had cash and cash equivalents of $924
and net working capital of $1,667,136. It received $394,288 immediately
after Quarter-end related to gold sold at the end of the Quarter.
OPERATING PERFORMANCE:
-- For the three months ended August 31, 2013, the Company sold 4,096
ounces of gold and generated $5,731,783 in revenue at an average sales
price of $1,399 per ounce.
-- Cash operating cost per ounce sold at the Pine Cove Project for the
three months ended August 31, 2013 was $950.
-- Total cash cost per ounce sold, including corporate administration,
capital expenditures and exploration costs for the three months ended
August 31, 2013 was $1,267 per ounce.
-- At the Pine Cove project, EBITDA for the three months ended August 31,
2013 was $2,277,701.
-- On a consolidated basis, EBITDA for the three months ended August 31,
2013 was $1,786,352.
-- Net income for the three months ended August 31, 2013 was $596,296 or
$0.003 per share basic and $0.003 per fully diluted share, respectively.
-- Purchase of property, mill and equipment for the three months ended
August 31, 2013 was $403,060.
-- Purchase of production stripping assets for the three months ended
August 31, 2013 was $362,361.
GROWTH INITIATIVES:
-- Approximately $478,000 was spent at the Pine Cove Project on exploration
for the three months ended August 31, 2013. The Company's exploration
initiatives focused on drilling the Romeo and Juliet prospect and an
airborne survey across the entire project.
Operations overview
During the three months ended August 31, 2013, the gold sales volume of 4,096
ounces represented a 3% decrease 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 first quarter of
fiscal 2014 and 2013.
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August 31 August 31
2013 2012
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OPERATING STATISTICS:
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Mill
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Operating days 85 74
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Availability 93% 80%
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Dry tonnes processed 83,890 62,865
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Tonnes per 24-hour period 987 856
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Grade (grams per tonne) 1.92 1.85
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Overall mill recovery 83% 84%
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Gold sales volume (troy oz.) 4,096 4,217
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Mine
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Operating days 64 66
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Ore production (tonnes) 74,189 90,515
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Waste production (tonnes) 484,514 514,665
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Total production (tonnes) 558,703 605,180
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Waste: Ore ratio 6.5 5.7
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Milling operations
The Pine Cove mill operated for 85 days during the Quarter at 93% availability.
The mill processed 83,890 dry tonnes of ore (987 tonnes per operating day) at an
average head grade of 1.92 grams per tonne ("g/t"), slightly higher than the
1.89 g/t projected for the year. Overall mill recovery averaged 83% for the
Quarter. The operating metrics for the mill were all very close to budget and
the completion of a crusher move and upgrade project during the quarter should
lead to continued consistent operations.
Mining operations
Mining activities operated for a total of 64 days during the year and excavated
a total of 558,703 tonnes of ore and waste. Ore production totaled approximately
74,189 tonnes, which was approximately 11,000 tonnes below budget, while waste
was approximately 484,514 tonnes for a strip ratio of 6.5 : 1. The lower than
planned ore production for the quarter was a result of excessive spring water
runoff during a period when the mine was accessing a new level, making mucking
of ore difficult. As a result, a greater emphasis was placed on waste hauling
during the quarter. Future quarters will adjust for this in order to bring the
strip ratio back to planned levels.
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 Q1 fiscal 2014 exploration program focused on the following
objectives:
1. A diamond drill program at the Romeo and Juliet prospect;
2. An airborne survey over the Ming's Bight Peninsula; and
3. Follow-up work from the winter drill program around the Pine Cove pit.
1. Romeo and Juliet: During the quarter the Company completed diamond
drilling at its Romeo and Juliet prospect and intersected a new gold-
bearing zone dubbed the Balcony Zone, located between the Romeo and
Connecting Zones. It appears to dip steeply to the north, trends roughly
east-west and is spatially associated with a northeast-trending
topographic linear. Mineralization has been traced for approximately 100
meters and is open to the east, west and down dip. Gold is associated
with pyritic altered mafic volcanic rocks, which is different from the
Romeo and Juliet massive quartz vein hosted-style of gold
mineralization. A structural interpretation is therefore underway to
help guide future drilling and to better understand these positive
anomalies.
Anaconda drilled seven holes into the Balcony Zone. Hole RJ-13-26
intersected strongly-altered mafic volcanic rock containing abundant
disseminated pyrite and fine quartz-carbonate veinlets, which assayed
8.4 g/t Au over a core length of 12 meters. The hole is interpreted to
have cut the mineralization at a low angle. Hole RJ-13-33 was
subsequently drilled to intersect the mineralization perpendicular to
hole RJ-13-26. It also contained altered mafic volcanics with heavy
disseminated pyrite and quartz-carbonate veining. Hole RJ-13-33 assayed
4.35 g/t Au over 8.44 meters including 6.22 g/t Au over 1.64 meters and
5.45 g/t Au over 4.85 meters. This intersection confirms the scale and
significance of the mineralization, but further work is required to
establish true widths. Holes RJ-13-34 to RJ-13-37 targeted the Balcony
Zone, with all but RJ-13-34 returning anomalous gold intercepts,
highlighted by RJ-13-35 returning 2.91 g/t Au over 11.1 meters. Fine
visible gold was observed in quartz veins in holes RJ-13-26, 35, 36 and
37.
To date, Anaconda has drilled 19 holes totaling 2,004 meters at the
Romeo and Juliet prospect. The original goal of the program was to
target down-dip extensions of the Romeo and Juliet gold-bearing quartz
veins. While Anaconda intersected the Romeo and Juliet quartz veins in
13 out of 19 holes, assays results from the down-dip extensions of the
Juliet and Connecting Zones were generally lower than anticipated.
However, in the Romeo Zone, hole RJ-13-32 returned 10.4 g/t Au over 0.54
meters and hole RJ-13-29 returned 3.45 g/t Au over 1.23 meters, both at
depths over 100 meters. PC-13-27 intersected both the Balcony and the
Romeo Zones. (See press release dated September 16, 2013 for full
details of drill results).
2. Regional Exploration / Airborne Survey: 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 Gold Mining Company Ltd. and completed by Anaconda. Prospecting
teams have followed up much of the historic soil data and completed
infill sampling in some areas.
In June 2013, 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 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. 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 2013, the Company completed a twenty-hole,
3,296-metre program successfully exploring the area west (the "Western
Extension Area") and down-dip of the Pine Cove deposit. During the
Quarter, a review and compilation of diamond-drill results from the
winter drill program was completed The Western Extension Area returned
significant near surface mineralization with PC-13-196 intersecting 11.4
meters of 2.19 grams per tonne ("g/t") from a depth of 26.6 meters and
PC-13-210 returning 2.34 g/t gold over 41 meters starting at a depth of
51 meters (See press release dated June 5, 2013 for full details of
drill results). Subsequent to the review and compilation, a structural
study of the Pine Cove mine area was initiated in late July 2013 to
guide future exploration efforts. Results are anticipated by the fall of
2013.
The information in this news 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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