Anaconda announces positive preliminary metallurgical testwork on San Gabriel
ore

TORONTO, Aug. 4 /CNW/ - Anaconda Mining Inc. ("Anaconda") (TSX:ANX) is pleased to report that it has received positive preliminary metallurgical test results from the San Gabriel Iron Project ("San Gabriel") located in northern Chile. Anaconda holds a 50% interest in a large project area that includes the San Gabriel Project through Minera Hierro San Gabriel S.A. ("MHSG").

MHSG sent 326 kilograms of composite drill core material to SGA Laboratory ("SGA") (www.SGA-liebenburg.de), a well-known research centre for iron ore beneficiation and metallurgical testing located in Liebenburg-Othfresen, Germany for testing purposes. SGA (Studiengesellschaft fur Eisenerzaufbereitung) is a joint venture laboratory with the German steel industry and is recognized worldwide for its research facilities for iron ore beneficiation, pelletizing, sintering and metallurgical testing of iron ore.

The iron grades of the samples sent ranged between 22% to 43% total iron. The magnetite mineralization was classified into three types: massive, clast and matrix dominated mineralization. SGA was able to produce a high quality pellet feed concentrate from the composite sample provided. Further testing revealed that a sinter feed concentrate between 3 and 1 mm can be produced from a sample of the ore received.

Further, the preliminary test results indicate that an iron concentrate can be produced which will be low in deleterious elements; specifically phosphorous, sulphur and alumina. Further metallurgical testwork is now planned to determine the detailed parameters of such iron concentrate.

Lew Lawrick, President and CEO of Anaconda stated, "This is a significant positive development as this preliminary testwork substantiates that San Gabriel magnetite ore can be processed into a high value product for the global steel industry. The potential to produce a fine ore sinter feed product from a portion of the deposit has significant positive implications for offtake opportunities and thus potential development initiatives."

As part of ongoing commercialization studies, a process flow sheet using a dry process including a high pressure grinding roll press and a regrind circuit to reduce the amount of mixed ores will be tested in due course to produce iron concentrate. If successful, a pilot plant test of 5 tons of magnetite mineralization will be necessary for feasibility study purposes.

All necessary environmental and operational (mining) permits are currently in place for San Gabriel.

    
    About Minera Hierro San Gabriel
    -------------------------------
    

Minera Hierro San Gabriel S.A. ("MHSG") is a Chilean company, owned 50% by Anaconda and formed to hold the San Gabriel and Vetarron deposits, the Antonio concessions, and other exploration concessions in the San Gabriel area.

The initial NI 43-101 Mineral Resource Estimate (as per an Anaconda press release dated August 14, 2008) for the San Gabriel Project totals 57.9 million tonnes ("Mt") at an average grade of 32 percent total iron ("% Fe") in the indicated category and a further 2.6 Mt at an average grade of 29% Fe in the inferred category. The mineral resource is contained within three zones, namely the San Gabriel (Main), Esperanza and Antonia zones and uses a cutoff grade of 20% Fe (Table 1). See below for additional information related to this mineral resource estimate.

    
    Table 1. San Gabriel Initial Mineral Resource Estimate(1)

    -------------------------------------------------------------------------
    Zone                 Category          Tonnage       Iron Grade
                                             (Mt)          (% Fe)
    -------------------------------------------------------------------------
    San Gabriel (Main)   Indicated           53.6            31
    -------------------------------------------------------------------------
    Esperanza            Indicated            4.3            41
    -------------------------------------------------------------------------
    Total Indicated                          57.9            32
    -------------------------------------------------------------------------
    Antonia              Inferred             2.6            29
    -------------------------------------------------------------------------
    Total Inferred                            2.6            29
    -------------------------------------------------------------------------
    (1) using a cutoff of 20% iron
    

The Antonio concession encompasses two significant magnetic anomalies, with geophysical signatures similar to that of the main San Gabriel deposit. At a magnetic susceptibility of 0.7 (SI), the first anomaly measures approximately 800 by 280 meters extending to a depth of 300 meters and is located three kilometers south of the San Gabriel deposit. At similar magnetic susceptibilities, the second anomaly measures approximately 600 by 100 meters extending to a depth of 150 meters and is located approximately six kilometers SSE of the San Gabriel deposit.

The Vetarron deposit, located five kilometers south of the San Gabriel deposit, is a near surface magnetite deposit. Vetarron North, a 500 meter long strong magnetic anomaly with outcropping magnetite-rich structures may represent the undrilled northern extension of the Vetarron deposit.

    
    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.

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 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. Assumptions upon which such forward-looking information is based include Anaconda's ability to acquire 100% of the New Island common shares and the benefits that may be obtained as a result of the business combination of the two companies. Many of these assumptions are based on factors and events that are not within the control of Anaconda 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, the business of New Island and Anaconda not being integrated successfully or such integration proving more difficult, time consuming or costly than expected 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 has 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. Anaconda undertakes no 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 Greg DiTomaso, Investor Relations, Anaconda Mining Inc., (647) 436-2592, Email: info@anacondamining.com; Or visit Anaconda's website at: www.anacondamining.com


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