ANACONDA MINING INC. ANNOUNCES RIGHTS OFFERING

TORONTO, April 1 /CNW/ - Anaconda Mining Inc. (TSX: ANX) ("Anaconda" or the "Corporation") announces the terms of a rights offering to holders of common shares.  Anaconda will be issuing to holders of its common shares as of record at the close of business on April 7, 2011 transferable rights certificates to subscribe for common shares before 4:00 p.m. (Toronto time) on May 3, 2011 on the terms set out in a rights offering circular dated March 31, 2011 (the "Rights Offering Circular") to be mailed by Anaconda  to its shareholders.  The Rights Offering Circular will also be available on the SEDAR website at www.sedar.com.  One right (a "Right") will be issued for each common share outstanding and four (4) Rights will permit the shareholder to purchase one common share (a "Share") for $0.07 per Share.

The Rights and the underlying common shares have been approved for listing on the TSX.  If all Rights are subscribed for, 31,686,443 Shares will be issued for total gross proceeds of $2,218,051.  The offering is not subject to any minimum subscription level. Certain investors including members of management have agreed to provide a standby guarantee in the amount of $2,218,051 (the "Standby Guarantee"), of which $2,145,000 has already been advanced to Anaconda Mining in the form of promissory notes due on June 29, 2011 and June 30, 2011 ("Promissory Notes").  Pursuant to the Standby Guarantee, the standby guarantors will be issued 7,921,611 common share purchase warrants (the "Guarantor Warrants").  Each whole Guarantor Warrant entitles the holder to purchase one common share for $0.08 until May 3, 2013.

Net proceeds after Rights Offering expenses will be released to Anaconda to be used for working capital purposes. If Anaconda calls upon the Standby Guarantee, Shares shall be issued to the standby guarantors for the amount of unsubscribed Rights and will settle the applicable amount of Promissory Notes, which may include up to $412,500 of Promissory Notes held by insiders. 

The Corporation does not currently have sufficient funds to satisfy trade payables and other short term obligations.  Anaconda continues to make modifications to its mill processing at the Pine Cove mine to increase ore throughput and gold recovery. These improvements are expected to generate sufficient cash from operations for at least the next twelve months as illustrated in the forecast provided in the Rights Offering Circular. However, if these efforts are not successful, the Corporation will need to raise additional capital in order to fund any shortfall in working capital and its other contractual obligations over the next twelve months.

The offering is not being made in any jurisdiction other than the applicable jurisdictions in Canada (the "Qualified Jurisdictions"), and is not, and under no circumstances is to be construed as, an offering of any securities for sale in or to a resident of any jurisdiction other than the Qualified Jurisdictions or a solicitation therein of an offer to buy or sell securities.  Shareholders as of April 7, 2011 will be provided with a Rights Offering Circular detailing the offer.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction.  The Rights and the Common Shares issuable on exercise of the rights will not be and have not been registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

ABOUT ANACONDA

Anaconda is a Toronto, Canada based mining and exploration company focused on operating the Pine Cove gold mine located near Baie Verte in Newfoundland, Canada and, with its joint venture partner, Inversiones SBX Limitada, advancing the development and exploration of its iron ore portfolio in Chile.

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 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.

SOURCE Anaconda Mining Inc.

For further information:

Anaconda Mining Inc. 
Dustin Angelo
President and CEO 
(647) 260-1248 
Email: dangelo@anacondamining.com
     
or 
Terre Partners
Joanna Longo
Investor Relations
(416) 775-8771
Email: jlongo@terrepartners.com

Company website: www.anacondamining.com

 


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