ANACONDA MINING REPORTS RESULTS FOR FISCAL THIRD QUARTER ENDED FEBRUARY 28, 2011

TORONTO, April 15 /CNW/ - Anaconda Mining Inc. ("Anaconda") - (TSX: ANX); is pleased to report its results for the three and nine months ended February28, 2011. All amounts are in Canadian dollars unless stated otherwise.  The financial results and Management's Discussion and Analysis of these results may be found on Anaconda's website (www.anacondamining.com) and on its SEDAR profile (www.sedar.com).

FISCAL THIRD QUARTER HIGHLIGHTS

Pine Cove gold mine, Baie Verte, Newfoundland:

  • During the third quarter ended February 28, 2011, Anaconda continued to increase gold production over the previous fiscal quarters with approximately 1,790 ounces produced versus 980 ounces and 380 ounces during the second and first fiscal quarters, respectively.
  • The mill processed 56,892 tonnes of ore with a weighted average grade of 2.2 grams per tonne, which equates to an average of 632 dry tonnes per day ("tpd") of throughput throughout the fiscal third quarter.  The average throughput takes into account downtime due to inclement weather, scheduled and unscheduled maintenance and holidays.  Through the end of the quarter, the mill had been able to consistently process 800 to 850 tpd on a sustained basis.
  • Subsequent to quarter end, the Company made a series of modifications to the crusher and cyclones to increase throughput to 950 to 1,000 tpd on a sustained basis.
  • At the end of January 2011, the Company initiated a multi-step process to minimize the adverse effects clay minerals in the ore were having on leach recovery and filtration. The recently completed modifications to the circuit have resulted in the production of  a higher grade flotation concentrate (ranging from 40 grams per tonne to 50 grams per tonne) and  flotation recoveries have improved to  approximately 89% to 90%.

Iron-ore assets, Chañaral, Chile:

  • Anaconda and Inversiones SBX Limitada ("SBX"), Anaconda's Chilean Joint Venture Partner, have focused their resources on moving the Esperanza iron deposit forward toward a commercial development decision.
  • Esperanza is a small, fully permitted for development, near surface magnetite hosted iron deposit in the greater San Gabriel project area that hosts a resource of 4.5 million tonnes grading 41% total iron (see Anaconda press release dated August 14, 2008).
  • Detailed metallurgical studies along with preliminary process engineering have been completed. The JV partners have requested equipment pricing from suppliers in order to finalize a detailed mine plan (including capital expenditures and operating costs) to determine the economic scope under which a near term development decision can be based.  The Esperanza mineral resource is near surface and as a result will require minimal pre-stripping and could be in production within approximately 12 months following a production decision.
  • Based on preliminary work performed to date, Esperanza is expected to produce approximately 700,000 tonnes per year of iron concentrate grading greater than 63 percent iron (based on metallurgical tests indicating an optimal 3 millimetre sinter fines product).
  • Anaconda, with the assistance of Gryphon Partners, is reviewing potential off-take arrangements for the product to be produced from Esperanza.

FINANCIAL OVERVIEW

  • Precious metals sales for the third quarter and for the nine-month period ended February 28, 2011, were $2.2 million and $3.9 million, respectively.
  • Sales were offset by $3.0 million ($6.2 million for the 9-month period) for costs of goods sold.
  • Administrative expenses were $0.89 million for the quarter and $3.0 million over the 9 months ended February 28, 2011.
  • Consolidated net loss for the three and nine months ended February 28, 2011was approximately $1.9 million ($0.015 per basic and fully diluted share) and $10.3 million ($0.091 per basic and fully-diluted share), respectively.
  • As at February 28, 2011, Anaconda had cash and cash equivalents of $504,000, of which $326,000 was restricted for letters-of-credit guarantees with a Canadian financial institution and amounts held in a debt-reduction escrow account to be utilized for debt service and/or principal repayments to Anaconda's Series I debenture holders.
  • As at February 28, 2011, Anaconda had a working capital deficiency of approximately $6.875 million.  Anaconda utilized the proceeds from its precious metals sales over the first nine months together with funds drawn under new loans and debenture issues to fund operations and to discharge some of its current operating obligations as well as providing funding for its capital requirements.
  • The Company continues to work closely with vendors with which it has made payment plans as well as arranging new plans for past due payables.  Many vendors have been highly receptive to working with the Company to stage payments in a manner that mirrors the timing of expected revenue, as the Pine Cove project increases its gold output.
  • The Company detailed the terms of its rights offering, as discussed in the press release dated April 1, 2011.  One right (a "Right") will be issued for each common share outstanding and 4 Rights will entitle the shareholder to purchase one common share for $0.07.  Use of proceeds from the rights offering will be used to repay aged payables and fund other working capital requirements.
  • On April 11, 2011, the Company announced that it was extending the maturity date of its unlisted common share purchase warrants with expiry dates of April 23, 2011, May 11, 2011 and July 25, 2011, for all non-insider holders.  The expiry dates of the share purchase warrants have been extended by 1 year.

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 the proposed amendment to the expiry date of warrants, 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 approval of the amendment to the expiry date of warrants 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. 

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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