Anaconda and New Island Agree to Friendly Transaction - Anaconda to Acquire
New Island's Interest in Pine Cove Mine and New Island to Continue as
Independent Company

ST. JOHN'S, NEWFOUNDLAND and LABRADOR and TORONTO, Aug. 30 /CNW/ - Anaconda Mining Inc. ("Anaconda") (TSX: ANX) and New Island Resources Inc. ("New Island") (TSX VENTURE: NIS) are pleased to announce that they have reached agreement on a friendly transaction. The friendly transaction would be structured as a Plan of Arrangement and 22,602,315 Anaconda shares will be distributed to the shareholders of New Island in exchange for New Island's interest in the Pine Cove Property (the "Revised Transaction"). The exact share exchange ratio will be determined prior to the interim court application for the Plan of Arrangement and based upon the number of New Island Shares outstanding at that time. The share exchange ratio shall not be less than 0.42 of an Anaconda share or greater than 0.45 of an Anaconda share per New Island share. In addition, pursuant to the Plan of Arrangement, expected to close on or before October 15, 2010:

    
    -   Anaconda would acquire New Island's interest in the Pine Cove Mine
        and Mill.
    -   New Island would continue as a public company and would retain the
        prospective Glover Island property and all of the remaining assets of
        New Island.
    -   Upon closing of the Revised Transaction, all of the New Island shares
        acquired by Anaconda pursuant to its current take-over bid (the
        "Offer") will be returned to tendering shareholders.
    -   Upon closing of the Revised Transaction every New Island shareholder,
        whether or not they tendered to the Offer will receive the same
        number of Anaconda shares (per New Island share tendered) and will
        continue to own a New Island share.
    -   New Island is permitted to issue new securities in New Island before
        the interim court application for the Plan of Arrangement in order to
        raise funds necessary to complete the Plan of Arrangement and to
        retire current debts outstanding but the parties agree that in no
        circumstances shall New Island issue securities valued at more than
        $325,000.
    -   Full releases will be exchanged, the intention being that there would
        be no further obligations whatsoever between the parties, including
        without limitation, any obligations pursuant to the recently
        concluded arbitration proceedings or any other outstanding payables,
        except any obligations arising under this transaction. Further, each
        party will agree to bear their own costs in respect of any and all
        matters relating hereto either before or after acceptance of this
        proposal.
    -   New Island will immediately cease all regulatory and other legal
        proceedings in this matter.
    -   New Island will immediately take such steps as are necessary to
        install Messrs. David Wiley and Dustin Angelo as members of the New
        Island Board of Directors until the Plan of Arrangement closes. In
        the event the Plan of Arrangement does not close on or before October
        15, 2010 or as mutually agreed upon, New Island shall immediately
        take such steps as may be necessary to install the slate of Directors
        currently proposed by Anaconda in connection with its pending
        requisition.
    -   Completion of the Arrangement is subject to the requisite approval of
        New Island shareholders and all applicable regulatory approvals.
    -   Anaconda and New Island each agree to use their best efforts and to
        take such steps as are necessary to bring about the closing of the
        Plan of Arrangement as soon as is practicable including the
        preparation of formal agreements forthwith which will include
        provisions relating to conditions of closing in favour of each party,
        no solicitation and standstill provisions, termination provisions and
        reciprocal break fees in an amount equal to the greater of $300,000
        and 5% of the value of a superior transaction, structured on the
        break fee provisions of New Island's agreement with Mountain Lake
        Resources Inc.
    -   New Island has also agreed to deliver support and lock-up agreements
        from each of the directors and officers and insiders of New Island
        and certain other shareholders on a best efforts basis.
    -   In connection with Anaconda's offer (the "Offer") which is currently
        outstanding, New Island:
        -  advises that shareholders who tendered to the Offer will receive
           the same benefits as the shareholders under the Revised
           Transaction;
        -  advises that shareholders who tendered to the Offer since August
           20, 2010 (the date of the last extension) that they can leave
           their shares tendered as they will be eligible for the benefits of
           the Revised Transaction; and
        -  advises that shareholders who intend to tender under the Offer
           will also receive the benefits of the Revised Transaction.
    -   New Island endorses the revised transaction and indicates that each
        of the directors and officers of the company supports the revised
        transaction and intends to enter into a support agreement with
        respect to the revised transaction.
    -   New Island is also informed by its financial advisors Salman Partners
        Inc. ("Salman") that based upon Salman's initial analysis the revised
        transaction appears to be fair to the shareholders of New Island from
        a financial perspective and that Salman will issue a definitive
        opinion with respect to the fairness of the transaction prior to the
        meeting of shareholders.
    

New Island President and CEO Harold Wareham commented, "The Revised Transaction represents the best alternative available to New Island shareholders in the circumstances. New Island shareholders will enjoy the opportunity of continued participation in the gold production at Pine Cove through their share ownership in Anaconda, while remaining shareholders of New Island. New Island is looking at strategies for the future, in particular with respect to the best utilization of what will be its core asset, which is the gold property at Glover Island, Newfoundland and Labrador."

Lew Lawrick, President and CEO of Anaconda commented, "We are very pleased to have been able to determine a friendly solution with New Island that is a win for both parties. We look forward to working closely together with New Island to close what I believe is a very attractive outcome for all parties. We also remind New Island shareholders that our amended Offer expires tomorrow and encourage you to continue to tender. New Island shareholders who do tender will receive Anaconda shares within days versus waiting until after an October shareholder meeting and subsequent court approval. Together with the support agreements already obtained from the New Island Board and Management, and our 41% current NIS holding, tendering now will provide further incremental but important support to ensure successful completion of the deal which all parties are eager to complete."

The current Offer is for all of the issued and outstanding New Island Shares on the basis of 0.42 of a common share of Anaconda for each New Island Share is currently outstanding and expires at 5 pm Toronto time on Tuesday, August 31, 2010.

Shareholders of New Island should be aware that various intermediaries impose an earlier deadline in order to tender their New Island Shares to the Offer. Anaconda encourages each shareholder to check with their intermediary to determine when the Offer must be accepted to meet the new expiry time 5:00 p.m. (Toronto time) on Tuesday, August 31, 2010.

Investors may obtain a free copy of the Offer documents filed by Anaconda with Canadian securities regulators at www.sedar.com. In addition, you may request these documents free of charge, from Anaconda's information agent, Kingsdale Shareholder Services Inc. within North America at 1-888-518-1558 (outside North America at 1-416-867-2272).

This press release does not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell, any of the securities of New Island. Such an offer can only be made pursuant to an offer to purchase and accompanying an offering circular filed with the securities regulatory authorities in Canada.

About New Island

New Island is a diversified junior exploration company holding gold and base metal properties in the Province of Newfoundland and Labrador. Additional information concerning New Island may be obtained on New Island's website at: www.newislandresources.com or from the System for Electronic Document Analysis and Retrieval (SEDAR) website at: www.sedar.com under New Island's profile.

About Anaconda

Anaconda is a Toronto, Canada-based mining development and exploration company focused on advancing its principal assets, the Pine Cove Gold Mine in Canada and its portfolio of Chilean iron ore assets. Anaconda is committed to bringing the Pine Cove Gold Mine into full Commercial Production, as well as advancing the exploration and near-term production opportunities of its Chilean iron ore assets. Anaconda continues to evaluate strategies to 'unlock' value attributable to its Chilean iron portfolio for the benefit of its shareholders.

"Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release"

FORWARD-LOOKING INFORMATION

This news release contains certain "forward-looking information" under applicable Canadian securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking information. Forward-looking information is often characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking information is based on the opinions and estimates of management of either Anaconda or New Island or both as the context indicates at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Many of these assumptions are based on factors and events that are not within the control of either Anaconda or New Island and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking information include changes in market conditions, variations in ore grade or recovery rates, risks relating to international operations, fluctuating prices and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and other risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, as well as those risk factors discussed or referred to in the Annual Information Form for Anaconda filed with securities regulatory authorities and available at www.sedar.com. Although Anaconda and New Island have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Neither Anaconda nor New Island undertakes any obligation to update forward-looking information if circumstances or management's estimates or opinions should change, except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking information.

%SEDAR: 00007625E

SOURCE Anaconda Mining Inc.

For further information: For further information: Lew Lawrick, President and CEO, Anaconda Mining Inc., (647) 478-5307, Email: llawrick@anacondamining.com or Harold L. Wareham, President and CEO, New Island Resources Inc., (709) 576-7711, Email: info@newislandresources.com


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