Anaconda Mining Posts $2.6 Million in Net Income and Sells 3,852
Ounces for Q2 Fiscal 2014
TORONTO, ONTARIO--(Marketwired - Jan 13, 2014) - Anaconda Mining
Inc. ("Anaconda" or "the Company") (TSX:ANX) is pleased to report
its financial and operating results for the three months ended (the
"Quarter") and six months ended November 30, 2013. The Company
generated net income of $2,646,938, or $0.015 per fully diluted
share, and $4,139,163 in earnings before interest, depreciation and
depletion and share based compensation ("EBITDA") for the Quarter.
The Company sold 3,852 ounces of gold and generated $5,299,446 in
revenue at an average sales price of $1,376 per ounce. Cash
operating cost per ounce sold at the Pine Cove Project for the
Quarter was $1,021. The Company also recognized property and
royalty income of $3,289,040 from its sold Chilean iron ore
properties.
For the six months
ended November 30, 2013, the Company generated net income of
$3,243,234, or $0.018 per fully diluted share, and $5,925,515 in
EBITDA. The Company sold 7,948 ounces of gold and generated
$11,031,229 in revenue at an average sales price of $1,388 per
ounce. Cash operating cost per ounce sold at the Pine Cove Project
for the six months ended November 30, 2013 was $929.
During the Quarter,
the Company entered into two three-year option agreements to
acquire a 100% undivided interest in the Deer Cove and Stog'er
Tight gold projects, which are adjacent to the Pine Cove Project.
Anaconda considers Deer Cove and Stog'er Tight to be key components
in its regional exploration program. The Company is planning an
exploration program beginning with detailed compilation, structural
interpretation and ground geophysical surveys at Stog'er Tight,
followed up with a winter diamond-drill campaign. Detailed
compilation of all Deer Cove data will also be undertaken with
follow-up diamond-drilling to commence in the spring of 2014.
President and CEO,
Dustin Angelo, stated, "The second quarter milestones and financial
results were quite strong even in this continued volatile gold
price environment. We recognized $3,289,040 in property and royalty
payments from our sold Chilean iron ore assets, including the
receipt of a US$1 million property payment, US$121,705 in the first
of now ongoing quarterly royalty payments, and we have recognized
the future receipt of US$2 million in commercial production
milestone payments due by May 2015. We generated over $2.6 million
in net income, over $4.1 million in EBITDA and almost $1.4 million
in mine level cash flow. As a result, our cash position was in
excess of $2.2 million at the quarter end. We sold 21% more ounces
in the Quarter relative to the same period last year and, despite
the gold price being lower, our actual average gold selling price
was $65 per ounce higher than the average London PM gold fix price
for the quarter and $75 higher on a year to date basis due to a
successful hedging strategy. The Company completed a major
strategic initiative during the Quarter with the acquisition of the
Deer Cove and Stog'er Tight properties, consolidating our land
position on the peninsula. These properties contain two advanced
gold projects and will be a significant focus in our drive to
increase resources and production in the coming months."
Highlights for the
six months ended November 30, 2013
BALANCE SHEET:
- As at November 30, 2013, the Company had cash and cash
equivalents of $2,272,713 and net working capital of
$1,864,314.
OPERATING
PERFORMANCE:
- For the three months ended November 30, 2013, the Company sold
3,852 ounces of gold and generated $5,299,446 in revenue at an
average sales price of $1,376 per ounce.
- For the six months ended November 30, 2013, the Company sold
7,948 ounces of gold and generated $11,031,229 in revenue at an
average sales price of $1,388 per ounce.
- Cash operating cost per ounce sold at the Pine Cove Project for
the three and six months ended November 30, 2013 was $1,021 and
$929 per ounce, respectively.
- Total cash cost per ounce sold, including corporate
administration, capital expenditures and exploration costs for the
three and six months ended November 30, 2013 was $1,276 and $1,271
per ounce, respectively.
- Milestone payments and royalty revenue from Chilean iron ore
properties were $3,289,040, which included the receipt of US$1
million in September, the receipt of a US$121,705 royalty payment
and the recognition of the US$2 million commercial production
milestone payment due no later than May 15, 2015.
- At the Pine Cove Project, earnings before interest,
depreciation and depletion and share based compensation ("EBITDA")
for the three and six months ended November 30, 2013 was $1,365,722
and $3,643,423, respectively.
- On a consolidated basis, EBITDA for the three and six months
ended November 30, 2013 was $4,139,163 and $5,925,515,
respectively.
- Net income for the three months ended November 30, 2013 was
$2,646,938 or $0.015 per basic and fully diluted share,
respectively.
- Net income for the six months ended November 30, 2013 was
$3,243,234 or $0.018 per basic and fully diluted share,
respectively.
- Purchase of property, mill and equipment for the six months
ended November 30, 2013 was $748,469. Key items include crusher
upgrades of 205,000, mining software of $88,000 and mill laboratory
additions of $54,000.
- Additions to production stripping assets for the six months
ended November 30, 2013 were $362,361; depreciation of production
stripping assets during the same period was $70,154.
GROWTH
INITIATIVES:
- The Company completed two three-year option agreements to
acquire a 100% undivided interest in the Deer Cove and Stog'er
Tight gold projects, which are adjacent to the Pine Cove Project
and are key components in its regional exploration program.
- Approximately $600,000 was spent at the Pine Cove Project on
exploration for the six months ended November 30, 2013. The
Company's exploration initiatives focused on drilling the Romeo and
Juliet prospect, an airborne survey across the entire project and
structural interpretations in and around the Pine Cove pit.
Operations
overview
During the three
months ended November 30, 2013, the gold sales volume of 3,852
ounces represented a 21% increase over the same period in fiscal
2013. Average sales price for the Quarter was $1,376 per ounce
versus $1,686 per ounce for the second quarter of fiscal 2013, an
18% decrease. As a result of the higher sales volume and a lower
selling price, gross revenue during the three months ended November
30, 2013, of $5,299,446, was lower than the same period in the
previous fiscal year by $97,117 or 2%.
The following table
summarizes the key operating metrics for fiscal 2014 and 2013.
|
For the three months ended |
|
For the six months ended |
|
|
November 30 |
|
November 30 |
|
November 30 |
|
November 30 |
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
OPERATING STATISTICS: |
|
|
|
|
|
|
|
|
Mill |
|
|
|
|
|
|
|
|
Operating days |
79 |
|
86 |
|
164 |
|
160 |
|
Availability |
87 |
% |
94 |
% |
90 |
% |
88 |
% |
Dry tonnes processed |
76,114 |
|
76,292 |
|
160,004 |
|
139,157 |
|
Tonnes per 24-hour period |
956 |
|
887 |
|
976 |
|
870 |
|
Grade (grams per tonne) |
1.80 |
|
1.76 |
|
1.86 |
|
1.80 |
|
Overall mill recovery |
83 |
% |
83 |
% |
83 |
% |
84 |
% |
Gold sales volume (troy oz.) |
3,852 |
|
3,194 |
|
7,948 |
|
7,411 |
|
Mine |
|
|
|
|
|
|
|
|
Operating days |
62 |
|
64 |
|
126 |
|
130 |
|
Ore production (tonnes) |
84,533 |
|
61,172 |
|
158,722 |
|
151,687 |
|
Waste production (tonnes) |
427,845 |
|
494,856 |
|
912,359 |
|
1,009,521 |
|
Total production (tonnes) |
512,378 |
|
556,028 |
|
1,071,081 |
|
1,161,208 |
|
Waste: Ore ratio |
5.1 |
|
8.1 |
|
5.8 |
|
6.7 |
|
Milling
operations
The Pine Cove mill
operated for 79 days during the Quarter at 87% availability. The
mill processed 76,114 dry tonnes of ore (956 tonnes per operating
day) at an average head grade of 1.80 grams per tonne ("g/t") and
an overall mill recovery of 83%. During the month of November, the
Baie Verte Peninsula experienced a winter storm, which caused power
outages at the mine site. As a result of the weather and subsequent
difficulty in restarting the ball mill, the Pine Cove mill was down
for a total of six (6) days during the month. Despite the
interruption, the Company processed almost exactly the same amount
of tonnes in the Quarter as it did in the similar period in fiscal
2013 because of an 8% year-over-year increase in tonnes per
operating day.
Mining
operations
Mining activities
operated for a total of 62 days during the Quarter and excavated a
total of 512,378 tonnes of ore and waste. Ore production totaled
approximately 84,533 tonnes, while waste was 427,845 tonnes for a
strip ratio of 5.1 : 1. During the Quarter, the mine experienced
dewatering issues caused by power outages. The combination of power
outages and unusually high precipitation (snow and rain) delayed
access to the newly developed bench at the 5006 level where higher
grade ore mining is scheduled. Mining activities were therefore
redirected to upper benches to allow dewatering of the lower yet
potentially higher grade areas of the mine.
Exploration
The first half of
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 first quarter of fiscal 2014 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. |
|
|
|
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.
Following structural analyses performed during the Quarter, the
Company plans to drill additional holes in the Balcony Zone to
further delineate the target. |
|
|
|
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 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 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. |
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 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. A review of the historic data indicated the need
for additional drilling to test both up dip of PC-11-181 and to
test a sparsely drilled area immediately northwest of the deposit.
During the fiscal 2013, the Company completed a twenty-hole,
3,296-metre program successfully exploring the down-dip and the
northwest areas (the "Western Extension Area") of the Pine Cove
deposit. The down-dip drilling successfully established continuity
of gold mineralization with four, widely spaced drill holes all
intersecting mineralization up dip from PC-11-181 (Anaconda Press
Release, February 28, 2013). Hole PC-13-195 intersected 12.06
metres of 3.32 g/t gold from a depth of 168.66 metres and hole
PC-13-199 intersected 3.06 metres of 7.69 g/t gold from a depth of
147.2 metres. |
|
|
|
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). |
|
|
|
During the Quarter, a review and compilation of diamond-drill
results from the winter drill program was completed along with
detailed structural geologic mapping of the Pine Cove pit area.
Mapping identified a broad alteration halo surrounding the ore
comprised of an outer gradational calcite to iron carbonate zone
surrounding a zone of intense iron-carbonate, sericite, pyrite and
quartz veining/silicification - the ore zone. The alteration and
gold mineralization is hosted by strongly deformed mafic volcanic
and volcaniclastic rocks. |
|
|
|
In
the eastern and central portions of the pit the mineralized zones
appear to dip moderately to steeply to the northeast towards the
area tested by the down-dip drilling. While the down-dip area has
returned significant intervals of gold mineralization it is
probably too deep to access by open pit. Additional drilling is
warranted to test its amenability to underground mining
methods. |
|
|
|
Mapping and mine development in the western portion of the pit has
revealed that the geology and distribution of the gold
mineralization is much more complex. There appears to be a
significant, but as of yet unresolved, strong northeast structural
control on the gold mineralization particularly in the Western
Extension Area where the mineralization is lensoidal and more
quartz-rich. This lensoidal nature both along strike and vertically
currently precludes its inclusion in the mine plan. Drilling as
part of the planned "North Waste Dump" condemnation drill program
will test for the potential northeast extension of this
mineralization. |
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.
Anaconda Mining Inc.Dustin AngeloPresident and CEO(647)
260-1248dangelo@anacondamining.comwww.anacondamining.comProConsul
Capital Ltd.Andreas CurkovicInvestor Relations(416)
577-9927acurkovic@proconsulcapital.com
Anaconda Mining (TSX:ANX)
Historical Stock Chart
From Jun 2024 to Jul 2024
Anaconda Mining (TSX:ANX)
Historical Stock Chart
From Jul 2023 to Jul 2024