Anaconda Increases Holdings in New Island to Nearly 50% as Offer Expires;
Anaconda and New Island Continue to Pursue Friendly Transaction

TORONTO, Aug. 31 /CNW/ - Anaconda Mining Inc. ("Anaconda") (TSX: ANX) is pleased to announce that an additional 4,500,504 common shares ("New Island Shares") of New Island Resources Inc. ("New Island") have been validly deposited to Anaconda's offer to purchase all of the outstanding New Island Shares (the "Offer"), which Anaconda has taken up and accepted for payment.

Together with the New Island Shares that it has previously acquired pursuant to the Offer, Anaconda, New Island's largest shareholder, beneficially owns approximately 49.97% of the issued and outstanding New Island Shares.

Anaconda's Offer, which was made on the basis of 0.42 of a common share of Anaconda ("Anaconda Share") for each New Island Share, expired today at 5:00 p.m. (Toronto time). Payment will be made to New Island shareholders for their newly deposited shares as soon as possible and in any event on or before September 3, 2010 in accordance with the terms of the Offer.

As previously announced, Anaconda and New Island have reached agreement on a friendly transaction that 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 "Plan of Arrangement"). 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.

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 and 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 Plan of Arrangement, among other things, all of the New Island Shares acquired by Anaconda pursuant to the Offer will be returned to tendering shareholders and 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.

Completion of the Plan of Arrangement is subject to the requisite approval of New Island shareholders and all applicable regulatory approvals.

DISCLAIMER

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 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 of Anaconda 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 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, 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 does not undertake 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.

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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; Greg DiTomaso, Investor Relations, Anaconda Mining Inc., (647) 436-2592, Email: info@anacondamining.com; Or visit Anaconda's website: www.anacondamining.com. For a copy of the early warning report, please contact Greg DiTomaso at (647) 436-2592


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